Qube Holdings Limited (QUB) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to this Annual General Meeting of Shareholders of Qube Holdings Limited. My name is Allan Davies, and I'm the Chairman of the Board of Directors of Qube Holdings. I'm pleased to say that after an absence of 2 years, we were able to hold Qube's AGM, both in person at a usual venue here at PwC's office and also online by Computershare's online meeting platform, MeetNow. For those attending in person, I'd request that all mobile phones be switched to silent. And I note that filming of the proceedings is not permitted. The hybrid meeting format allows shareholders, proxy holders and guests to attend in person or online by watching a live webcast of this meeting. By either means, shareholders and proxy holders have the ability to ask written and oral questions and submit their votes. The live webcast is available by link on Qube's website and a recording of this meeting will also be made available on Qube's website after the meeting. I'm advised by the company secretary that a quorum of shareholders is present, and so I declare the meeting open. The notice of meeting was made to shareholders electronically, and where shareholders had requested a copy, the notice has been mailed to them. The notice of meeting together with template voting form on AGM notice and access flyer were lodged on the ASX. They're also available on Computershare's investor vote page for Qube's AGM and on the Annual Meetings page of Qube's website. And I'll take the notice of meeting as read. I'd like to begin by introducing the other directors of the company, secretary and also Qube's auditor. Joining me on the stage is Sam Kaplan, Deputy Chairman and a member of the Audit and Risk Management Committee; Paul Digney, Managing Director and a member of the Safety, Health and Sustainability Committee; Director Ross Burney, a member of the Nomination and Remuneration Committee; Director Alan Miles, Chair of the Safety, Health and Sustainability Committee; Director Stephen Mann, Chair of the Audit and Risk Management Committee and a member of the Safety, Health and Sustainability Committee; Director Jackie McArthur, Chair of the Nomination and Remuneration Committee; and Director Nicole Hollows, a member of the Audit and Risk Management Committee and a member of the Safety, Health and Sustainability Committee. Joining remotely is recently appointed Director Lindsay Ward, and I'd like to formally welcome Lindsay to his first Qube AGM, and we look forward to his contribution to the work of the Board. Lindsay, along with Alan and Stephen and I, will be standing for election at this AGM. Also joining me on the stage is Company Secretary, William Hara; and in the audience, Chief Financial Officer, Mark Wratten; and Director Corporate Affairs, Ben Pratt. This is the first Qube AGM for both Mark and Ben, and I welcome you both, and thank you for your contribution to Qube so far. Also in attendance is John Digney, Director Logistics & Infrastructure; Michael Sousa, Director, Ports; and Todd Emmert, Director, Bulk. As part of the management restructure that occurred at the start of FY '22, John, Michael and Todd are elevated to key management personnel or KMP reporting directly to the Managing Director. We also have in the audience reporting to the Managing Director, Emily Link, Director of Strategy -- sorry, Director, People, Culture and Safety; and Shane Collins, Director, Strategy and Development. Also present is Belinda Flynn, General Manager Safety, Health and Sustainability; and Paul Lewis, Qube's former CFO, who had in FY '22 transitioned to the new role of Group Investor Relations and Corporate Support. Finally, also in the audience is Jane Reilly, lead audit partner for Qube's auditor PwC, Australia. Jane has been in this role for the last 5 years and will be replaced by Liz Stesel as the lead audit partner at the conclusion of the AGM. I'd like to thank you Jane for your professionalism, technical skill and guidance, which I know have been of significant assistance, particularly to the Audit and Risk Management Committee. Lizzy has already been working with Qube for some time in the lead up to the rotation, but I would like to take this opportunity to formally welcome you to working with Qube and note your appointment. Having introduced the Board, senior management and our auditor, I'd like to take this opportunity to advise shareholders that it is intended to make a Board committee change with Lindsay Ward to replace Stephen Mann as a member of the Safety, Health and Sustainability Committee. This change has been approved by the Qube Board and will take effect from tomorrow, subject to confirmation of Lindsay's election as a director at today's AGM. Before we move to the agenda items, there are several housekeeping matters I would like to mention regarding the online component of this hybrid meeting format. The first is in relation to asking questions. As explained in the notice of meeting and following the same format as last year, we will only have one Q&A session towards the end of the meeting to answer questions on all items. This will include questions in the 2022 annual report, the Managing Director's presentation and the resolutions to be voted upon. Question time will take place after the formal voting resolutions are shown and prior to closing of the voting poll. In-person attendees will be requested to approach the microphone at the start of the question time in order to ask their question. Online attendees can submit written questions at any time. [Operator Instructions] Shareholders have the option to vote directly or appoint a proxy prior to the AGM by previously provided voting forms or through the investor vote page on the Computershare website, the Qube's AGM. For those attending in person, you must be holding a blue shareholder proxy holder voting card. You should indicate your vote by placing a mark whether you are for, against or abstain for each resolution. As printed on the reverse side of the voting card, you may wait until closer to the end of the meeting to complete your card as I'll allow some time towards the end of the meeting to do so. If you change your mind during the meeting, please cross out your previous vote and clearly indicate your final voting intention and initial the change. If you're participating online via Computershare's meeting platform, you're eligible to vote, and you can do so on the platform during the AGM even if you have previously cast your vote or appointed a proxy doing so or cancel your previously cast vote or proxy appointment. Voting will be conducted by a way of a poll on each item of business. The poll will be taken simultaneously on all resolutions, which will be displayed as part of the consideration of the formal business of the meeting. In order to provide shareholders and proxy holders participating online with enough time to vote, I will shortly direct the opening of the voting system for voting on all resolutions. Once the voting system is open, the voter icon will appear as shown on the slide. Selecting this icon will bring up a list of the resolutions and present you with the voting options to cast your vote, select one of the options. A tick will appear to confirm receipt of your vote and there is no need to hit a submit or hit a button. Your vote is automatically recorded and you will see a vote confirmation notification on your screen. Online participants have the ability to change your vote up until the time I declare voting closed, which will be at the end of the meeting. To change your vote, select Click Here to change your vote and press a different option to override. I will give you a warning before the poll is closed. I now declare voting open on all items of business and direct opening of the voting system. The vote icon that appears on the screens of shareholders and proxy holders should soon show all of the resolutions and allow you to vote on them. Finally, it should be noted that technical difficulties can occur with a hybrid meeting format involving an online component. If any such difficulties arise during the course of the AGM, as Chairman, I have the discretion as to whether and how the meeting should proceed, including whether it should be adjourned and if so, for how long. In such circumstances and in exercising my discretion, I would consider a number of factors, including the number of shareholders affected and the extent to which participation in the meeting has been restricted. In such circumstances, I may determine that the meeting should continue and transact business, including proceeding with the voting on the resolutions. If you experience technical difficulties during the AGM, please refer to the online meeting guide located on Computershare's investor vote page for Qube's AGM or on Qube's website. You can also contact Computershare by telephone on 03-9415-4024 within Australia or if outside of Australia, î9415-4024. Before proceeding to the formal items of business on the notice of meeting, I would like just to say a few words as a Chairman. A copy of my remarks has been lodged with the ASX and will be posted on Qube's website. I'm pleased to report that Qube has delivered excellent results in FY '22 with the record financial results across key metrics, welcome improvements in safety, health and sustainability metrics and the successful completion of both the Moorebank Logistics Park monetization process and the share buyback capital initiative. Underlying revenue growth for FY '22 was over 26%, up to around $2.6 billion, and this flowed through the underlying earnings or EBITA of $222.1 million, almost a 21% increase over the prior corresponding period. Underlying NPATA also increased almost 26% to $200 million, and this was a record result for the Qube. Together with a positive earnings outlook and strong financial position, this gave the Board confidence to declare an ordinary dividend of $0.063 per share. The Board also declared $0.007 per share fully franked special dividend as a result of the Moorebank monetization, which I will discuss shortly. This brought the total full year dividend to $0.07 per share. This was a record full year distribution for Qube and a 16.7% increase on the prior year's dividend. Pleasingly, the strength of our earnings was underpinned by higher volumes across core markets, including containers, grain, steel, most mining bulk commodities, energy and general cargo. This helped to offset weaknesses in other areas and underscores the importance of Qube's diversified logistics strategy and the benefits at our scale, operational performance and productivity initiatives assist in our ability to deliver long-term growth in earnings. Of course, COVID-19 continued to have some cost and operational impacts on the business during the year. However, the easing of travel restrictions and border controls as the world finally began to emerge from the worst phases of the pandemic were welcome developments. Indeed, this also provided a return to more normal operations, including for more than our 8,200 employees who did a remarkable job managing through the significant challenges that COVID-19 presented. On behalf of the Board, I'd like to take this opportunity to publicly thank all employees for their hard work and commitment to keeping themselves, their colleagues and our customers and their communities safe. The health and safety of our people is of course a major focus for Qube. And as I mentioned, we achieved welcome improvements in safety metrics during the year. This included a 17.7% reduction in our Total Recordable Injury Frequency Rate when compared to the prior year, a 6.3% reduction in our Lost Time Injury Frequency Rate compared to the previous year and a Critical Injury Frequency Rate of 0.69 set against the target of 1, reflecting our strong focus on identifying and minimizing critical risks. Tragically, despite these achievements, we did report a fatality during the year when a Qube employee died in a single light vehicle accident on a public road in South Australia. The cause of this accident remains unknown, and we again extend our sincere condolences to his family and friends. Turning now to the operating division. A strong performance in Logistics and Infrastructure business unit, together with more modest underlying earnings growth from the Ports and Bulk business, saw underlying revenue growth of 28% to $2.57 billion and underlying earnings growth of EBITA of 19% to $252 million. While weather impacts, labor shortages and port congestion weighed somewhat on performance across the division, key highlights for the division included a strong year for grain-related activity, thanks to Qube's Agri high-quality export supply chain, which was further bolstered with the acquisition of the Newcastle Agri Terminal in October 2021. The commencement of our new rail contract with BlueScope in the second half of FY '22. This is one of the largest logistics contracts in Australia, and I'm pleased to say it is performing extremely well. Strong performances across our Australian general stevedoring activities with higher bulk and break-bulk volumes, mainly steel imports and grain imports and grain exports than the previous year and growth in the revenue and earnings for Qube Energy, supported by a new contract win with Chevron and the expansion of service offerings and projects with existing customers who are increasing exploration and production activities. In FY '22, the top 10 customers across the division represented approximately 20% of the operating division's total revenue and included mining companies, energy companies, retailers and manufacturers. No single customer represented more than 4% of the total divisional revenue. Patrick also had a very strong result in FY '22, generating strong cash flow with total distributions to Qube during the period of $85 million. The underlying contribution from Qube's 50% interest in Patrick of $54 million NPAT and $64 million NPATA was an increase of 31% and 27%, respectively, over the prior corresponding period. Patrick renewed several contracts in the period and its market share stabilized at 42% across the year compared to 44% in FY '21. In April '22, Patrick finalized a new enterprise agreement with the Maritime Union of Australia. This new 4-year agreement provides additional flexibility in relation to recruitment rostering and training. Shareholders will also be aware that Qube successfully completed the transaction with LOGOS for the sale of 100% of its interest in the warehousing and property components of the Moorebank project in December 2021. Qube received upfront proceeds of $1.36 billion with another $200 million received in early August 2022. The remainder of the deferred consideration of $100 million will be paid progressively as the construction of Stage 1a of the Moorebank Interstate Rail Terminal is delivered. The transaction with LOGOS allowed Qube to realize a strong value for Moorebank property assets, avoid the risk associated with delivering leasing and development of future warehouses and significantly reduced Qube's ongoing CapEx requirements. As I mentioned earlier, as a result of the receipt of the Moorebank monetization proceeds, combined with Qube's positive earnings outlook, the Board declared a $0.007 per share fully franked dividend -- it was a special dividend in addition to the full year ordinary dividend. In FY '22, we published our first partial disclosure statement under the Task Force on Climate-Related Financial Disclosures or the TCFD framework. We also developed a decarbonization strategy that includes a plan to transition Qube from its reliance on fossil fuels today to focus on the potential of using alternative fuel supplies in the future. Sustainable fuels, like biofuels and e-fuels, in particular, are important to Qube's decarbonization road map and will be part of our continued alternative fuel initiative. We'll remain a dedicated -- we will maintain a dedicated program to drive continued improvement in carbon emissions reduction, energy efficiency and reduction in fuel use. However, our success and ability to do so will be dependent on the availability of alternative energy and at commercial pricing. To conclude, I'm pleased to say that Qube has experienced a strong start to FY '23 with many of the elements that underpin the FY '22 results, including higher volumes and margin improvement continuing across most parts of the business. Despite the uncertain economic and interest rate environment, the strength of our balance sheet, together with our diversity and opportunities for growth, mean we remain positive about the remainder of the period and expect strong growth in underlying revenue and earnings in the operating division. Earnings are not expected to be materially impacted by cost inflation given Qube's ability to recover costs -- in higher costs through a combination of contractual protections, rate adjustments and productivity improvement. Finally, on behalf of the Board, I'd like to thank you, our shareholders, for your ongoing support of our business. I'd also like to commend Paul Digney and his executive team for their leadership and again, thank the 8,000 people who make up the Qube family for their hard work and commitment to making Qube thrive. I'd now like to hand over to Paul for a presentation on the performance of the Qube group. A copy of Paul's presentation has also been lodged with my remarks on the ASX and will be posted on Qube's website.

Thank you, Allan, and good morning to everyone. I'm going to kick off with a slide which is Qube, a plan to thrive. Shareholders will be familiar with our vision and the ambition of our business and how successful we have been executing our strategy on the journey so far. At present, we are building on this vision and ambition in what we were calling a plan to thrive. Every word on this slide captures Qube on a page. It's who we are, and it's our plan to thrive further into the future. With 5 key priorities highlighted in blue that underpin our purpose, a purpose to help our customers, our communities, our industries, our shareholders, all to thrive, but also the Qube business to thrive, and therefore, importantly, everyone involved in Qube to thrive. These 3 -- these 5 key priorities being safety, well-being, planet, opportunity and performance. Today, I intend to touch on as I go through this presentation. Next slide, please. Safety and well-being, starting with safety. Safety is one of these key priorities. As the Chairman has already said, the health and safety of our people must always come first. Last year, as the Chairman mentioned, we achieved a reduction in our TRIFR and our LTIFR key metrics on the prior year. But we also kept our CIFR, a critical incident frequency rate, under a target of 1, reflecting our strong focus on identifying and minimizing the critical safety risks in our business. So this year, in 2023, we will continue to focus on minimizing and better eliminating these critical safety risks in our business by the help of technology and innovation and engineering enhancements to further reduce this risk. But also including our ongoing worker engagement programs that promotes an innovative thought culture on the ground. Also another key priority for Qube is well-being of our employees. This year, we will continue to further enhance Qube's already great workplace culture and our well-being programs, such as employee health, career development, community and indigenous engagement and diversity inclusion programs. You can find a lot of this information on our well-being programs and Qube's great culture within our recently released sustainability report, which is on our website. Next slide, please. As Allan has mentioned, next slide is the Qube's decarbonization plan, our planet priority for Qube. We realize that we have to reduce carbon emissions to ensure our planet thrive. With diesel use being our main source of our carbon emissions, our plan is focused a lot on how we transition away from fossil fuels. And that's not an easy transition at this point in time. This year's sustainability report, we outlined Qube's plan for decarbonization. Our plan includes interim and 2050 targets on a pathway to Net Zero. Our goals, here on this slide, are just the start of our climate change response. But as Allan mentioned, while we transition to suitable technologies and renewable fuels, we are conscious that we need to remain competitive. And our approach considers a journey that is both to be considered as an industry leader to transition away from fossil fuels and take the lead but is also responsible and achievable. So over the next 2 years, we are making significant commitments on green fuel trials, trying all possible green fuels across all types of our equipment, working with customers and partners across electric vehicles, hydrogen and biofuel options. I would say that we would be probably at the forefront of this, the amount of trials, the amount of commitments we're going to make in the logistics space in this space. It will take us a few years and will give us a good understanding of what we can and can't do in the near future. And I look forward to updating you all as we progress over this journey. Next slide, please. Okay, video time. Not only have we set out a decarbonization plan, Qube has also started to get involved in providing logistics services in the renewable space. This video shows Qube's integrated supply chain capability for a wind farm project, all the way from the port of discharge to the project site. And we will position ourselves to be a substantial logistics player in the renewable space in Australia as it evolves in Australia. Can we please play the video? [Presentation]

Next slide, please. Investor Day wrap-up and Qube's plan for continued growth. This takes me to the opportunity part of thrive. Shareholders may be aware that in October, we hosted an Investor Day, an opportunity to showcase the business to the investment community. If you didn't get an opportunity to view -- have a view on the day, the presentation, all the great new videos that we've just released and the full day recording is now available on our website. On the day we took the audience through the Qube journey over the past 15 years and highlighted our achievements and our growth, the audience got to experience in depth Qube's vision and strategy, our evolution, our brand and our business development, our key strengths, our key markets, our key products and our key services, our multiple growth and value drivers within the business but most of all, the exciting growth opportunity ahead for Qube. This slide here highlights the scale of Qube today, a diversified very robust business across many sectors. It represents -- it is represented by the Qube's sub-brands on this slide, the many businesses within the businesses of Qube. A great foundation built over 15 years with a huge opportunity to grow. Next slide, please. Key strengths today of Qube that have established Qube as a market leader. This slide I've taken from our Investor Day presentation. It represents our key strengths, a wall of strength, as I call it, that we have developed over the last 15 years, which provides us with the opportunity to grow and our customers to value. Every box represented -- on this slide represents a key strength of Qube. In the middle, it represents our integrated service offering. To the right side, it represents our key strengths around our people, our expertise and culture. And on the left side, our safety, sustainability and our governance frameworks. All of these key strengths combined today have established Qube as a supply chain market leader, and no one that we compete again has all these at the same level of quality as Qube today. We're proud to say that. And this is our point of difference in the market today. This is why customers choose Qube and while we have a very sticky customer base, and they stay with Qube. Next slide. This leads me to the next video. We are continuing to look for opportunities to grow in key markets. The export grain supply chain is a recent example. Over the past couple of years, we have invested in both up-country storage facilities and export grain terminals in New South Wales. The Newcastle Agri terminal, as Allan mentioned, has been the most recent investment we made last year. This video showcases Qube's capabilities in this sector today, and I'd now like to roll the video. [Presentation]

That video is just one of many on our website at the moment. We recapped our hub of the videos over the last 6 months. So if you haven't had the opportunity to view the videos on our website, there's over a dozen on different supply chains just like that grain one. They're very good videos and they're worth watching. There is weather impacts at the moment, like there was last year. We are impacted somewhat, but we're managing through it at the moment. We like a little bit less rain, but not no rain, I guess, it's just that balance. But it's manageable at the moment. So yes. Can I move to the next slide? Thanks. This now takes me to the performance part of Qube. I won't go through this slide. Allan has just already touched on all the elements here. But what I will say just to call out again that last year, the Qube management team delivered a strong financial performance across all metrics. And as Allan mentioned, I say well done to my team on that result. Next slide, please. To answer one of your questions just now. An update on the risk and challenges faced in 2022. As a part of our full year '22 results, although we had a strong financial result, we also called out a number of challenges that impacted those results last year. Pleasingly, whilst these challenges have not completely disappeared in this financial year, the impact is much less than what it was last year for us. Starting with COVID. With reduced restrictions and no further border closures, we're seeing far less impact on our business. In terms of inflationary pressures, as Allan mentioned, Qube is effectively mitigating these through a combination of contractual protections, cost management initiatives and rate increases. Unfortunately, adverse weather events continue to occur, but we're managing through those at this point in time. Supply chain bottlenecks have continued to improve. And Qube now received some of the equipment that was delayed last year, which is improving the productivity of some of our contracts. Labor impacts and skill shortage have lessened, but I couldn't say they've gone away completely in the industry, but Qube has always been in a better position to attract labor and skills. So we still -- and we also still have some issues in some parts of the country or in some regions where it's difficult to find labor and the skills in those areas. The recovery in the New Zealand forestry volumes in China remain subdued. However, in the first quarter of this year, management has been able to reset its cost and revenue structure within the business to offset the impact of lower volumes from the second quarter onwards. And other significant volumes that have been -- that were impacted last year, such as wind farms have rebranded and have a more favorable outlook ahead for us. Next slide, please. Business update. We noted at Investor Day that we're really happy with the performance of the business in the first quarter, which was ahead of our internal expectations. Pleasingly, this trend has continued in the month of October. And we're very confident in our ability to achieve our full year guidance. Volumes in most parts of the business were strong. Margins benefited from high asset utilization, product initiatives and rate restoration across mobile parts of our business. Key highlights for the first month included Logistics & Infrastructure business saw strong volumes across most parts of its business and achieved significant margin improvement. The Ports & Bulk business unit has experienced good volumes from our energy, ports and resources activities, which has partly offset the continued weakness in forestry volumes in the first 4 months of this financial year. But as I noted before, we have proactively reduced costs and secured rate increases in the Forestry business, so we expect significant improvement in this area over the remainder of the year, even if volumes do not improve. And Patrick's also delivered a strong result in the first 4 months, in line with our expectations. Next slide, please. Full year '23 outlook. So despite the increasing inflationary environment and the economic uncertainty, Qube confirms its previous full year guidance. This outlook and key assumptions remain consistent with the guidance that we provided with our full year '22 results as summarized on this slide. Of course, this assumes no unexpected adverse events such as severe weather or geopolitical events. And as I previously mentioned, we see multiple opportunities for growth over the remainder of the year and beyond, and we're more excited about Qube's future than we ever have been. Next slide. I would like to finish with a video featuring the people of Qube. We as Qube can have all the great infrastructure, the great assets, the great systems in the industry, we can have the best executive team to implement our strategy and our vision, but it won't thrive with our great people and our workforce culture on the ground. Please roll this video. [Presentation]

Thank you. That finishes my presentation. I'll hand back to Allan.

Thank you, Paul. I'd just like to say that the people you've just seen in that video is or on those -- all those 3 videos actually are really what makes Qube a great business. We've got strategic assets, good equipment and systems. But as Paul said, without the people, there is no business. And since COVID restrictions have eased, the Qube Board has been quite active in interacting with our people on many sites. We've been to Melbourne -- this year to Melbourne, Perth, Newcastle, Brisbane, Tauranga in New Zealand and others. Last week, I had the privilege of visiting Qube's Rail and Agri operations in Western and New South Wales at Dubbo, Narromine and Coonamble. The people on those are just really engaged, excited about the future, just like those people, you saw on the videos, and the Qube culture and its people are really what makes Qube a great business. I get quite emotional about it because the people are absolutely key in this business. Then now I turn to the formal proceedings, which involve consideration of the FY '22 financial statements and reports and voting on the resolutions as set out in the notice of meeting. The first item of business is to receive and consider the company's financial report, the directors' report and the auditor's report for the financial year ended 30th of June '22. These are contained in the annual report, which was lodged with the ASX, made available to shareholders and is available on Qube's website. As it is common practice in with most companies, the reports will be tabled but won't be subject to the resolution as it isn't required by the Corporations Act. I invite shareholders and proxy holders to ask questions on the management of the company or the annual report. Questions may also be asked of the auditor who's sitting in front of me, accounting policies adopted by the company and the auditor's independence in carrying out the audit. All questions should be addressed to me and then I will ask our auditor, Jane Reilly, or a member of management to respond to the questions as applicable. And as I've mentioned, questions will be answered during question time towards the end of this meeting. We'll now move to the resolutions to be put to the meeting as set out in the notice of meeting. Detailed information on each of the resolutions is contained in the explanatory memorandum attached to the notice. Qube's constitution allows the Chairman to demand a poll, which, as I mentioned, I have done for each resolution. As advised in the notice, as Chairman of the meeting, I will vote all undirected available proxies for each resolution. Rather than stepping through each resolution individually, a list of resolutions in the corresponding valid direct and proxy votes received for each prior to the meeting are now being displayed on the screen. The votes for these resolutions, together with the votes cast at this meeting, will be added in the final result lodged with the ASX. I move that each resolution be adopted and will now introduce each resolution, except for the first resolution, which deals with my reelection. And for good order, I'll ask Sam Kaplan, Deputy Chairman to conduct the meeting and put this resolution, and I will speak to the resolution before taking back conduct of the meeting and putting the rest of the resolutions.

Thank you, Chairman. This resolution is to consider the reelection of Allan Davies as a Director. Allan retires by rotation under the company's constitution and is eligible for reelection. Information on Allan's professional experience is contained in the annual report and the explanatory memorandum in relation to this resolution. The directors other than Allan, given his interest in it, unanimously recommend you vote in favor of this resolution. I now invite Allan to speak to this resolution. Thank you.

Thanks, Sam. I'm seeking resolution as a director because firstly, I'm passionate about Qube, its people and its prospects. I have approximately 50 years experience in the Australian and international mining industries as a miner, supervisor, manager, general manager, director in other mining companies, which equips me well to understand Qube's business, particularly in servicing mining customers. Over the last 20 years, I've also been involved directly in logistics businesses. And during that time, I've been a Director of Pacific National, Queensland Rail, Aurizon, Patrick and also Qube. My family also owns and operates an agricultural business, which assists my understanding of Qube's agri business. And finally, I believe I have the experience and capability to serve as an effective director of Qube. The second resolution is to consider the reelection of Alan Miles as a Director. Alan retires by rotation under the company's constitution and is eligible for reelection. Information on Alan's professional experience is contained in the annual report and the explanatory memorandum in relation to this resolution. The directors other than Alan, given his interest in it, unanimously recommend you vote in favor of this resolution. And I now invite Alan to speak to this resolution.

Thank you, Allan, and good morning. My working career has been in commercial shipping and logistics, having had senior management roles in containerized Falcon RoRo shipping activities. I believe this experience complements acute business models, both operationally and commercially. Currently, I'm Chairman of the Safety, Health and Environmental Committee. This committee has undertaken a number of projects during the last year, including the health and well-being, as has already been mentioned, health and well-being activities throughout the whole COVID periods. The committee is progressing several other significant projects, including the sustainability and decarbonization pathways. And I would like to be continued to be involved in these projects as we look to establish longer-term processes, but at the same time, ensuring our focus on safety is maintained as a priority. If reelected, I would look forward to continuing to act in the best interest of the company and its shareholders. And like the other members of the Board, I'd like to thank all the management for their efforts over the last 12 months. It's been really quite a difficult period during COVID, but I think the teamwork has really demonstrated the results today. So thank you very much.

Thank you, Alan. Resolution 3 is the reelection of Stephen Mann as a Director. Steve also retires by rotation under the company's constitution and is eligible for reelection. Information on Steve's professional experience is contained in the annual report and the explanatory memorandum in relation to this resolution. The directors other than Steve, given his interest in it, unanimously recommend you vote in favor of this resolution. And I'd like now to ask Steve to speak to the resolution.

Thank you, Allan. Good morning, ladies and gentlemen. I was appointed the key Board as an independent director 3 years ago and it has been quite an eventful period on the Board as has been detailed. As mentioned, my background is detailed in the AGM notice of meeting and the annual report. In summary, with over 25 years of senior executive experience in companies such as Aurizon, Qantas, BlueScope Steel, Western Sydney Airport and TNT, I have extensive exposure to sectors of relevance to Qube including freight and logistics, rail, infrastructure, aviation and resources, and areas such as strategy, finance, transformation, health and sustainability, technology, M&A and business development. My term having expired, I offer myself for reelection of the Qube Board. Thank you.

Thanks, Steve. Resolution 4 is to consider the election of Lindsay Ward as a Director, Lindsay was appointed by the directors to fill a casual vacancy on the Board in accordance with the company's constitution with his appointment taking effect from 4th of October this year. In accordance with the Corporations Act and Qube's Constitution, Lindsay's appointment as a director must be confirmed by way of election at this AGM and being eligible, Lindsay offers himself for election. Information on Lindsay's professional experience is contained in the explanatory memorandum in relation to this resolution. And the directors other than Lindsay given his interest in it, unanimously recommend you vote in favor of this resolution. And Lindsay is outside of the country, but he'll now speak to this resolution.

Thank you, Allan, and good morning, shareholders and guests. My apologies for not being there in person. I did have a long-standing overseas commitment. I'm pleased to stand for election to the Board of Qube Holdings today and welcome the opportunity to represent you, our shareholders. My executive career began over 35 years ago, firstly, in mining before moving into power generation followed by logistics, support management and rail and then into funds management and infrastructure. I began my nonexecutive director career approximately 10 years ago and have extensive listed and private board experience across ports, renewables, waste recycling, bulk liquid storage, gas transportation, mineral exploration and mining. This diverse board experience has enabled me to gain insights into the continually evolving corporate governance requirements and also the ESG expectations of shareholders. I believe a significant and diverse executive experience across safety leadership, ESG operations, asset management, construction, funds management and business strategy will enable me to make a significant contribution to the Qube Board, including as a member of the Safety, Health and Sustainability Committee. It's an exciting time to be part of the logistics sector, and there are plenty of opportunities and challenges we must navigate. Subject to the approval of shareholders, I look forward to continuing to work closely with my fellow directors and management and continue to grow our business in the best interest of all shareholders.

Thank you, Lindsay. The next item of business is Resolution 5 to adopt the FY '22 remuneration report. The remuneration report is included in the annual report. Information on this resolution is contained in the explanatory memorandum, which also includes a message from Director Jackie McArthur, who was Chair of the Nomination and Remuneration Committee. The Corporation Act requires that listed companies put a nonbinding vote to shareholders to voice their opinion on the remuneration report. Key management personnel, including directors and their closely related parties, are excluded from voting in favor of the remuneration report unless as directed proxies for shareholders eligible to vote. The directors encourage all shareholders to cast their vote and unanimously recommend shareholders to vote in favor of this resolution. Resolution 6 is the next item of business, and that is to approve the issue of securities under Qube's new equity plan rules for a period of 3 years. The equity plan rules are a set of common terms and conditions underpinning and applicable to the offer issue and exercise of securities under Qube's employee incentive plans. It should be noted that Qube's nonexecutive directors do not participate in any employee incentive plan. They may only choose to participate in Qube's Non-Executive Director Equity Plan, which is a salary sacrifice arrangement under the rules of which Qube must only acquire existing shares on market as distinct from shares being issued to directors. The listing rules restrict the number of equity securities that a listed company may issue in any 12-month period without the approval of shareholders to 15% of the number of ordinary securities on issue at the start of the period. If shareholders approve this resolution, any securities issued pursuant to offers under the equity plan rules within the 3-year period from the date of the AGM will be treated as having been made with the approval of shareholders for the purpose of listing Rule 7.2. As such, they will be excluded from calculation of the 15% limit and provide the Board with greater flexibility when considering any further necessary fundraising. More detail on the equity plan rules are set out in the explanatory memorandum and the directors other than Paul given his interest in the outcome of this resolution unanimously recommend that shareholders vote in favor of this resolution. The next item of business is Resolution 7, to approve the FY '23 award of performance rights under Qube's Long-Term Incentive Plan to Managing Director Paul Digney. This is a new more traditional performance rights plan, but that transitions in the LTI instrument away from share appreciation rights after completion of the Moorebank monetization earlier this year. A summary of the plan which takes effect from FY '23 is included in the explanatory memorandum in relation to this resolution. The directors other than Paul given his interest in it unanimously recommend you vote in favor of this resolution. The next item of business is Resolution 8, to approve the grant of share rights to Managing Director Paul Digney as the deferred component of his FY '22 award under Qube's short-term incentive plan. A summary of the plan is included in the explanatory memorandum in relation to this resolution. The directors other than Paul given his interest in it unanimously recommend you vote in favor of this resolution. Resolution 9 is the next item of business, which is to approve the grant of financial assistance by a number of entities in connection with their acquisition by Qube in late 2021 and early 2022. These entities operate businesses in the forestry and agri sectors and have bolstered Qube service offering in these areas. The acquisitions were funded by borrowings under a Qube Group loan facility. This facility is supported by Qube Group guarantee, and it's the intention to now join these entities to this guarantee. Entry into the supporting guarantee could be considered the giving of financial assistance by these companies and the acquisition of their own shares requiring shareholder approval under the Corporations Act. As noted in the explanatory memorandum, the shareholders of these companies must provide their approval. As these are now subsidiary companies of Qube Holdings, a listed holding company, Qube shareholders must also give their approval. The purpose of this resolution is to seek that approval. The Board has considered the giving of this financial assistance and unanimously recommends that shareholders vote in favor of this resolution. I'd now like to proceed to the Q&A session. As previously mentioned, when asking you a question, please note or state your name whether you're a shareholder or which shareholder you represent by proxy and any affiliation you may have with the relevant organization. I also reserve the right not to permit a person to ask a question who has not provided this information and to limit the number of questions a person may ask. If due to time constraints, we are not able to answer all of the questions that this meeting answers to all questions as moderated will be posted on Qube's website after the meeting. I'll commence by calling on shareholders or proxy holders questions from the floor followed by shareholders or proxy holders who have called in and then it will be followed by written questions submitted by the online meeting platform. I'd now like to call on questions from the floor. If you'd like to ask a question, please line up at the microphone placed in the center of the room and only a validated shareholder or proxy holder may ask questions. And so you must be holding either a blue-colored voting card or a yellow-colored nonvoting card, and I'll determine the appropriate person to answer the questions.

Yes, Allan, thanks very much. I'm Peter Gregory from the Australian Shareholders' Association. I'm holding proxies today for 127 shareholders totaling just over 3 million shares. I'd note also that our members tend to be longer-term shareholders who are loyal to the companies that they choose to invest in. I'd like to, first of all, ask about the digital transformation program that's underway. Can you give us a bit of a picture of the nature of this transformation that's happening? Is it being conducted using proven systems and technologies? And is it being supported by a credible implementation partner? And also what are the benefits to the company, to its people and to customers?

Thank you for the question. Paul, I think you're probably best place to ask or to answer that question.

Sorry, Peter, is that a general question or a question of Qube?

Sorry?

Is that a general question about digital transformation or a question about Qube's digital transformation?

Qube's activity with it, yes.

Yes, okay. Yes. So we've -- I mean, in that space -- in that innovation space in regards to digital transformation, we've always tried to be a leader in that space with doing smart stuff with artificial intelligence and so forth.

I understand you've got a transformation program happening around your overall systems operation?

Are you talking about the Oracle platform?

If that's what it is, yes.

Yes, yes, yes. So -- Okay, sorry. So that's our accounting system. So we're doing an overhaul of our accounting financial platform. We're now -- Mark, you're probably better -- you're better -- Mark is probably better to answer that. Sorry, it wasn't your fault.

Yes. Thanks. So we've commenced the implementation of Oracle in the cloud as a replacement for our PeopleSoft accounting system, and we go live early next year. We are using Oracle Consulting to help us with that. So Oracle, obviously, a large global company. So we're very excited about the implementation of that new system. It will take us to a state-of-the-art ERP system with advanced reporting capabilities. We'll be able to provide much greater insight into our business operations to all of the executives and people on the ground. So it's going to provide significant advantage for us going forward and for a number of years. So I'm very pleased with the decision to go ahead with that project before I started, and I'm now taking it through its completion.

Thank you. Can I ask a further question relating to reelection of directors? We note that the Board is largely comprised of two groups of directors. Half of directors have been -- had considerable service on the Board. And following the conclusion of this meeting, it will mean that there's 4 directors who, at the end of their term will have had 14 years of service. There's another group who commenced subsequent to 2019. The ASA takes a view that it's difficult for a director to be independent after having served on a Board 10 years. And so we are looking at it and saying, depending on the outcome of today's election, there will be 4 directors who we would not see as being independent. I'd like to ask Allan and Alan. If Allan, we are -- as Chair, we are supporting your reelection -- because we believe any change of Chair, sudden change of Chair would be very disruptive to the organization. But we'd like to ask your intention in terms of completing the term as a tall, transferring to another Chair to what succession plans might be in place.

Thanks, Peter. Good question. Succession planning is pretty much top of mind with the Board and has been for some time. We -- last -- and I'll explain the evidence of that. Last year, we sought an increase in directors' total remuneration to allow for an additional director to come on to the board before someone else comes off. And so Lindsay Ward has been elected and came on to the board, assuming he's voted up today to allow in time someone to move off the board. In my case, assuming I'm elected or reelected today, my intentions -- it's difficult to predict the future. But I'll serve on the Board as long as I think it's appropriate -- as long as Qube sees value in my serving on the Board. And at some point in time, I'll obviously have to step down. But those sort of discussions haven't been completed at this point, but it's -- but everything is under consideration.

Okay. Thanks for that Allan. And Alan, if I can direct the question also to you. It is a concern of ASA's at this balance of independent and nonindependent directors. And as a consequence of that, we will be voting against your reelection today. I'd like to stress that it has absolutely nothing to do with your contribution to the company or your abilities. It is purely about this balance of independent versus nonindependent. In light of that comment, if you are reelected, can I ask your intention in terms of transitioning off the Board and what your plans are in those terms? Also, if you are reelected, will you continue on as Chair of the SHS Committee?

Yes. Thank you. Thanks for those questions. Yes, I -- my intention as it stands today, is to serve the full term, if I'm reelected, and as Allan just mentioned, we are working through a number of changes to the committee. I think it was highlighted today of a change of our committee members on the Safety and Health Committee. So my intention is that I'll work with the Board through the period. And we do have a plan for transitioning into a succession plan for the chairmanship's role over the next 12 to 15 months.

Yes. Is it microphone a bit high?

Oh, well, wasn't raised. This is [ Frelot ] can you hear me? This is more a comment because it amazed me to find that the tugboats, which -- had they gone on strike would have affected you with the storage and if you had to empty the trains. But it just amazes me that they are arranged by a Danish company and how long has this been? You think about our tugboats going out to bring the ships in and cruise line is everything. And this is just only in like the -- probably the ports that are for industry rather than cruise or...

No, no. I'll let Paul answer the question. He will give you a good response on that tugboats or vessels?

Yes, you're right. I mean we -- as a country, we're exposed with tug operators, I guess, in regards to their availability. So obviously, any industrial action is problematic. But it's also -- it would also be huge too, right? So I think the realization of what occurred just recently is that something is going to intervene either before it happens or it won't last too long because us as a country can't afford not to be able to get ships in and out of this country. But you're spot on there, we are vulnerable with tugboat operators in this country.

Are there any more other questions from the floor? Okay. Well, are there any questions from people who have dialed in?

There are no questions at this time.

Thank you. Ben, do you have any online questions to ask?

I do, Chairman. We have 8 questions on the online platform, 7 of which are from Mr. Stephen Mayne. And the first question he asks is, did any of the 5 main proxy advisers recommend to vote against any of today's resolutions, including the reelection of the chair? If so, what was the issue? Have there been any material proxy protest votes? Also, why not disclose the proxies to the ASX with the form of addresses like others now do?

The answer to that question -- all those questions is no. Into the last one, we'll give it consideration.

The next question from Mr. Mayne is are we concerned about the proposed changes to the federal industrial relations laws? Also has the recent lockout of MUA members by Danish tugboats giant Svitzer had any impact on our operations? Finally, does our recent full year enterprise agreement with the MUA derisk the likelihood of strike action on the docks and supply chain disruptions?

Paul, perhaps you might want to answer those 3, and I'll follow up if there's any other comment.

Yes. In regards to the strike action or the lockout action on Svitzer, there was no impact to Qube or Patrick operations because it didn't occur. Our views on the current [ IL ]reforms. Obviously, they're not ideal, I guess, in regards to some elements of it, but until that's passed in parliament or government, it's pretty hard to comment exactly what that will mean. But from a Qube perspective, we've always been able to -- regardless of what government is in power, we're able to manage that and navigate our way through whatever that industrial landscape looks like. So it will be for us to deal with. The third question, Ben what's was that again?

Sorry, the final question was, does our recent 4-year enterprise agreement with the MUA derisk the likelihood of strike action on the docks and supply chain disruptions?

Yes. While you're in agreement -- in-time agreement, you're less likely or very unlikely to have industrial action. So we're in a good position for the next 4 years to get on with management and the employees to manage the business and deliver out some of the productivity initiatives that we've got in place, both in Patrick's and in our Qube Ports business.

Mayne, on the industrial legislation is, as Paul said, it's a moving target at the moment simply because the final Bill to go to the Senate is yet to be finalized, so we'll wait and see what happens.

Chairman, Mr. Mayne asks or notes that the ASA voting intentions report says Qube's foundation lies in the consortium in which the Digney family played a significant part. As a consequence, Qube has 3 Digney Brothers in senior roles. He goes on to ask, this is unusual for those of us unfamiliar with the history, could Paul please spell out the family's history with Qube and also summarize the scale of ownership interest of family has in the company?

I'll start and respond to that question. The first point I'd like to make is that Paul and his brothers have been and previously, that was part of the business back in the Patrick days from the late '90s through to the time which Patrick was sold in 2006 to 2012. Subsequently, Paul and his 2 brothers have been part of the Qube business given the nature of Paul's role and John and David's role in the company. The company has developed strict governance protocols to deal with any potential conflict of interest that might arise and those protocols exist across a wide range of issues within the operation of the company. I'll let Paul just comment on the history, but that's how the Qube Board sees it. And we, in fact, see Paul and his brothers as part of Qube as being a huge plus for shareholders because of their deep knowledge of the logistics industry.

Thanks, Allan. Yes. I mean my history and my brothers history goes back a long way. But as far as Qube is involved, I was -- and my brothers and a few other individuals, including this man next to me, Sam, we were part of the due diligence that actually created what Qube is today. So we've been very fundamental to the start of this. So all I can say is we've done -- we've delivered a lot for Qube and our shareholders over the course. Our output and our sacrifices have been substantial. I don't think I need to speak much more than that. In regards to my ownership, it's in the annual report in regards to how many shares I hold. It is for John as well as KMP. And I think my brother David has equity. I don't know the number of it. So we've got skin in the game, and we always will have skin in the game, and we love Qube.

Thanks, Paul.

Thanks, Chairman. Mr. Mayne has directed a further question to Mr. Digney. He asks, could the CEO summarize his past LTI grants as to whether they have vested or lapsed? Also has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position? Please don't say look it up in the annual report and through ASX announcements, Mr. Mayne says, it's complicated over many years and the CEO could actually summarize the situation in 30 seconds.

You could provide a brief potted summary, please, Paul.

I haven't sold a share for a long time. I can't remember the last time I sold a share, and I don't intend to selling any shares. That's it.

Next one, Ben?

Thank you. Mr. Mayne asks, could new Director, Lindsay Ward and the Chair comment on the recruitment process that led to his appointment to the Board? Was a headhunter involved, did the full Board interview Lindsay and did they interview any other candidates? Did Lindsay know any of our directors before engaging with the recruitment process?

I'll start with the Chair of the RemCo on this response. So Jackie, would you like to make a comment, please?

It was a multistage process that was I think a credit to all involved. In the first instance, we went to 2 recruitment agencies. And we chose 1 recruitment agency. That recruitment agency then compiled a long list of more than 25 candidates that met a matrix of skills and needs that the entire Board were involved in consolidating. So the Board said, here's all the skills, here's what we're after. I as the Chair of RemCo took that to the external head hunter, if you like. And from that, we went from a long list. We went to a short list. Out of that short list, we brought 4 individuals forward that met the criteria that the Board had put forward. And we had, in the end, I think 5 directors including Paul Digney interview the 4 candidates. Out of the 4 candidates, we roughly came down to 2. And hopefully, we're welcoming the successful candidate to the Board today. Thank you.

In relation to the response regarding knowledge of Lindsay, despite the fact that I've been in mining a long time I have never actually met Lindsay before. So the answer to that part of the question is 0. But Lindsay, you might like to comment too on the process?

Certainly, the process was very thorough. I went through about half a dozen different interviews. As Jackie said, met with a number of people on the Board. Most of those meetings were in person. And I certainly don't have any relationship with any of the directors on the Board up until the point of my appointment.

Thanks, Lindsay. Ben?

We have -- sorry, two questions left Chairman, one from Mr. Mayne and one from another shareholder. Mr. Mayne asks, given the interesting discussions across a range of topics today, including the final resolution on financial assistance, could the Chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? He notes a number of companies already do this. Will you follow suit? This is something IAG has been doing since 2003.

We'll give it consideration.

And the final question, we have online is from Mr. John Lancel, who says he believes there might still be scope for a special dividend from the Moorebank proceeds. Would you like to comment, Chairman?

I guess, to be -- to take -- it's a good question and I take it seriously. Directors are always giving consideration to how we can best serve shareholders' interests. And whilst I won't give any guarantees that that special dividend may occur, it's the sort of thing that we do consider regularly. And if it makes sense for us to do so, we would issue a special dividend. But at this point, we haven't made any decision in that regard.

Thanks, Chairman. There are no more questions online.

Thank you, Ben. Ladies and gentlemen, that concludes the discussion on the items of business. I'll shortly instruct that the poll and voting system be closed, and please ensure that you cast your votes on all the resolutions. I'll now pause to allow your time to finalize your votes. [Voting]

For those voting in person, once you've completed your voting card, please place it in the ballot boxes that are now being looked around by the Computershare representatives. If any shareholders in the room need more time to complete their voting card, please raise your hand. Okay. As the voting process is now complete with some of it still to be collected, I declare the poll closed and instruct that the voting system may also be closed. I'd reckon all voting cards and previously received voting forms be retained for 6 months and then destroyed. And as voting has been completed and there are no other matters to be transacted at this meeting, I declare the meeting closed. And a senior member from Computershare has been appointed as the returning officer. And following confirmation by Computershare, the final voting results will be announced on the ASX later today, and they'll also be posted on Qube's website. I'd like, once again, thank you very much and also thank PwC very much for allowing us to use this room and for your attendance in person and also online at today's meeting. Thank you.