Scentre Group (SCG) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Annual General Meeting of Scentre Group Limited. I'm Brian Schwartz, the Chairman of Scentre Group. The Company Secretary has informed me that a quorum is present, and I therefore declare the meeting open. In doing so, I would like to acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the land I am on. Recognizing that many of us are in different lands of different traditional custodians, I would like to pay my respects to each of their Elders past, present and emerging. Our AGM is, for a second year, being held online because of ongoing COVID-19 considerations. I'm conducting this meeting from the Wesley Centre and would like to welcome my fellow directors who are with me here today: Mike Ihlein, Chair of our Audit and Risk Committee; Steve Leigh; Mike Wilkins; Carolyn Kay; Margie Seale; and Guy Russo. Andrew Harmos, Chair of our Human Resources Committee, is participating by Zoom from Auckland. Carolyn and Margie are each standing for reelection today, and Guy is standing for election. Also with me today is our CEO, Peter Allen; our CFO, Elliott Rusanow; and our Company Secretary, Maureen McGrath. Megan Wilson, representing the group's auditors, EY, is also present. Other executives of the group are participating in the meeting from our Sydney support office at 85 Castlereagh Street. Before we move to the items before the meeting, there are several housekeeping matters I need to mention. Securityholders have been provided instructions as to how to participate and vote at the AGM in the Notice of Meeting and online meeting guide, which are available on our website. Voting on all resolutions will be by poll. Once I declare the polls open, a voting icon that looks like a bar graph will appear on your device screen or navigation bar. Once you click this, the resolutions will appear on your screen and you can select a voting option. To cast your vote, select one of the options. There is no need to hit a submit or enter button as the vote is automatically recorded. You can vote or change your vote at any time during the meeting until I declare the polls closed. I will give you a clear prompt in the meeting to let you know when the polls will close. Proxyholders with directed votes will have those votes automatically voted as directed as open votes held by a securityholder or proxyholder will be voted according to the option you select. We've received some questions from securityholders in advance of the meeting, which I will address during the meeting. [Operator Instructions] Following questions and discussion, I will then declare the polls for all resolutions closed. The combined results, comprising the proxy votes received before the meeting and the votes cast today, will be displayed on screen. Barry Azzopardi of Computershare has been appointed as the Returning Officer. Following confirmation by Computershare, final proxy and voting results will be announced to the ASX later today. The Notice of Meeting has been made available to securityholders, including on the group's website, and I will take the notice as having been read. In the event that we have any technical difficulties, I will call for a short adjournment of the meeting with the meeting to be reconvened no earlier than 15 minutes after the adjournment. If it's not possible to reconvene the meeting at that time, we will make an announcement on the ASX as to how and when the meeting will be reconvened. I will now move each of the resolutions in the Notice of Meeting and open the polls in respect of each of those resolutions. As Chairman, I've been appointed proxy by a number of securityholders. These include directed and undirected proxies. As set out in the Notice of Meeting and proxy form, all undirected proxies will be voted in favor of the relevant resolution. I now formally vote all directed and undirected proxies. As mentioned, you may ask questions throughout -- through the online platform at any time until the end of the question-and-answer section. With that, I'd now like to deliver my formal address, and again, greet all of you and thank you for joining us. I hope that you and your families remain safe and well in these times, and we certainly appreciate your understanding as we continue to consider the COVID-19 pandemic in planning events. Needless to say 2020 was a disrupted year. Despite this, we were proactive and decisive in supporting our customers, our retail partners and our people in enhancing long-term value for securityholders. The Board was actively engaged with management in overseeing our response to the challenging operating environment. We met frequently during the year, some 23 times as compared to a regular 10 meetings perhaps a year. Committees including the Human Resources Committee, the Audit and Risk Committee and the Nominations also met much more frequently than they otherwise might have to consider the key impacts and decisions. We are proud of our people and their ability to remain agile and focused throughout the period. We thank them for their efforts and contribution. Our priority was to ensure our customers, retail partners and our people remain safe, connected and engaged through a period that was challenging on multiple fronts. Unfortunately, some of our people were impacted by redundancy, by standby or reduced hours as a part of our cost reduction measures. Despite this, our employee engagement remains strong when one considers key talent retention, low levels of voluntary turnover, high candidate Net Promoter Scores and the exit data which confirms that more than 96% of our people would recommend Scentre Group as an employer. Throughout the year, we played a leadership role in our industry through the Shopping Centre Council of Australia, of which Peter is the Chairman, to support government engagement and public policy development. We focused our case-by-case support on those that most needed our help, which were our small- to medium-sized or our mom-and-dad retail partners. We didn't claim or receive any financial support from the Australian or New Zealand governments, including the JobKeeper program. Our ability to make decisions through the cycle has underpinned investor confidence and support from capital -- debt capital markets when we needed it. We acted quickly to secure additional funding, ensuring we were in a strong financial position to see the group through and beyond the volatile period. Our capital management actions were focused on preserving value for the long term, and we did not seek equity from our securityholders. Our long-term objective, to create sustainable returns for our securityholders, is consistent with our approach to being a responsible, sustainable business. During 2020, we announced our target to achieve net zero carbon emissions by 2030 and committed to the Task Force for Climate-Related Financial Disclosures. Our stand-alone Responsible Business Report and our first Modern Slavery Statement were released on the 31st of March and are available online. The Board and the Human Resources Committee, chaired by Andrew Harmos, has invested much time on the topic of remuneration. While the poll on the remuneration report for item 2 has not yet been taken, based on proxy votes already received, we expect a substantial vote against it. We are disappointed given the time and focus the Board devoted to these important issues on your behalf and the consideration we have given to the outcomes the group and management delivered in the most uncertain and complex operating environment. I would like to make comments on how, as you would have expected, the Board exercised judgment and addressed the issues raised. There's been a very substantial reduction in earnings for our team. The fixed remuneration for senior management and base Board fees were reduced by 20% at the height of the pandemic and remained at that reduced level for 3 months. No increases were given to management. In fact, our CEO has not had an increase since taking on the role in 2014. The short-term at-risk remuneration reduced substantially for senior management, and the long-term at-risk remuneration for the years relating to 2018, '19 and 20 lapsed. That is, there will be 0 payouts for those 3 years, thereby eliminating our long-term retention strategy. Our existing remuneration structure was not designed to cater for the unprecedented circumstances we faced. The Board considered the changing operating environment and exercised its judgment to build a remuneration structure for 2020 that responded and allowed us to adapt to the continuing complexity and uncertainty. Key to our ongoing success is attracting and retaining high-performing people, and retention is a key element of our long-term remuneration -- at-risk remuneration plan. Given the loss of our retention strategy, the Board determined that it was in the best interest of securityholders to mitigate the risk of losing our very well-credentialed key senior executives during very difficult times and to retain the best management team to lead our business through this uncertain period and beyond. We have spent a lot of time talking with many of our major investors, and they understand the issues we faced during this unprecedented period and the complexity of the issues the Board needed to consider in determining our approach. The Board believes we responded appropriately to the circumstances and achieved the best outcome for the group and you, its investors, with this pandemic-specific remuneration structure. As a result and as announced to the ASX in September of last year, 2020, the Board made a one-off issue of equity-based retention awards to members of the senior leadership team, including the CEO and CFO, whose services are integral to the group's response to the pandemic and beyond, steering a course through recovery and accelerating initiatives to support future growth. These awards will vest in the next 2 to 3 years subject to executives remaining and achieving individual performance requirements. These awards were not intended and did not come close to compensating executives for the 0 vesting of the 3 years of long-term awards, and they serve a different purpose to the short-term at-risk remuneration which is intended to recognize current year performance and outcomes. The Board remains committed to regular and critical review of our remuneration philosophy and framework on an ongoing basis and as such, has considered a number of factors when determining the 2021 long-term at-risk remuneration hurdles. For FY '21, we have retained a reduced ROCE hurdle of 50% and introduced a relative total shareholder return hurdle of 30% and a strategic measure hurdle of 20%. We will continue to review the LTAR hurdles as the economy -- economic recovery continues to ensure that the short- and long-term incentives continue to meet our remuneration principles. We value the views of our securityholders, and the Board will consider all investor feedback as we make our decisions in 2021. The Board is committed to continuing to ensure that we appoint directors with an appropriate mix of skills, knowledge, experience and diversity, including gender. We're in the process of addressing further representation of women on our Board and hope to be in a position in the first half of the year to make a further appointment. During the year, we were pleased to welcome Michael Wilkins and Guy Russo to the Board. Carolyn Kay and Margie Seale are standing for reelection, and Guy Russo will stand for election, all with the full support of the Board. In addition to Board succession, there is, again, as you would expect, a substantial ongoing process including external advisers to assist us with assessing and further developing the skills of our people to ensure that when the time is right, we have appropriate senior management in place, including looking outside the organization. Thank you for your continued support of Scentre Group. I'd now like to introduce our CEO, Peter Allen, to deliver his address.

Thank you, Chairman, and good morning, everyone. I, too, would like to thank securityholders for participating in today's hybrid AGM. I would especially like to thank our people for their commitment to our customers throughout a disrupted year and for their contribution to our results. I'm very proud of our team, particularly how we kept adapting to the conditions, keeping our centers safe and open for the communities we serve. We continued to remain flexible. The restrictions imposed by governments during 2020 to address COVID-19 made for an unprecedented operating environment. Our team remained focused on balancing the health and safety of our customers, retail partners and people with business continuity and economic activity. We are pleased that all of our 42 Westfield Living Centres remained opened, safe and trading during the year despite these restrictions. We had more than 450 million customer visits across our portfolio, including an average of 46 million per month for the last quarter, highlighting how important our centers are to our consumers, our customers and our communities. This scale of visitation and average dwell time of more than 1.5 hours demonstrates that our Westfield Living Centres are a third place for our customers after their home and workplace. It also reflects the currency of our customer strategy and our plan to create the places people choose to come more often for longer. During the year, leadership of the industry and of our company remained a priority. We are proactive and deliberate in the decisions we made with a view not just for the short term, but the long-term ramifications of those decisions. Our capital management measures were focused on strengthening the group's financial position and preserving value for the long term for our securityholders by not raising dilutive equity. The group executed $10.1 billion of new and extended funding, including $3.6 billion of bank facilities, $2.4 billion of long-term bonds and $4.1 billion of subordinated notes. The subordinated hybrid notes issue was complex and is being viewed as unique and extremely innovative by the market. As a result of these actions, we have available liquidity of over $6 billion, sufficient to cover all debt maturities to early 2024. We maintain an A-grade credit rating from all 3 rating agencies. Cash collection has been a priority for our team. We achieved gross operating cash flows of $2.3 billion, and net operating cash flows grew by 95.7% in the second half of 2020, resulting in a cash surplus of $771 million for the 12-month period. Cash flow momentum has continued into 2021 with gross rental cash flow for the 3 months to 31 March being in excess of $600 million. Operating profit and FFO for 2020 were approximately $765 million or $0.147 per security. This included a credit charge of $304 million relating to the financial impact of the pandemic. Importantly, we did not seek or receive funds from the Australian or New Zealand government, including under its JobKeeper scheme. All suppliers continued to be paid on 30-day terms to ensure their cash flow, consistent with our commitment to the Australian Supplier Payment Code. Supporting our retail partners was a key focus for the team during the year, particularly our small- to medium-sized retailers, or SMES, who bore the brunt of the cash flow shock with limited access to other capital. We reached commercial arrangements with 3,398 retail partners, including 2,456 SME retailers, in line with the Code of Conduct. Throughout the year, we saw continued demand for space by our retail partners with occupancy at 98.5%. We introduced 217 new retail brands to Westfield across all categories. Notably, the structure of our lease has not changed and remains based on the mutual agreement to pay a fixed base rent, a position fully supported by our debt and equity investors who do not want to see us take on retailer risk. Notwithstanding the turbulence during 2020, we continued to evolve the Westfield ecosystem, creating new opportunities for interaction between Scentre Group, our customers and our retail partners and brands. We have a solid platform with approximately 20 million people living in close proximity to a Westfield Living Centre. We seized the opportunity to introduce and progress strategic initiatives during the year, including Westfield Direct and Westfield Plus. Westfield Plus is our membership program, and we now have approximately 1.5 million members. This provides the opportunity for us to engage more personally with our customers. To support our retail partners throughout the height of the pandemic, we trialed Westfield Direct, a new drive-through, contactless, click-and-collect service. These initiatives have positioned us to accelerate growth as consumer confidence continues to pick up. The most successful retailers are multichannel retailers with productive physical store networks. Our Westfield Living Centres remain a central part of their business strategies given the quality of our centers and their proximity to customers. We continue to invest in our portfolio and during the year, completed a number of developments, including a new dining precinct at Westfield Doncaster in Melbourne, introducing 14 new restaurants to the center. In December 2020, we're appointed by Cbus Property to design and construct the residential and commercial tower on the site of the former David Jones menswear store on the corner of Market and Castlereagh streets in Sydney CBD. These outcomes were achieved while the group also maintained its focus on being a responsible, sustainable business and delivering on key initiatives across our 4 pillars of community, people, environment and economic performance. Community engagement with our Westfield Local Heroes community grants and recognition program continues to grow with more than 140,000 people voting for our 2020 heroes. Over the past 3 years, I'm proud that we've granted $3.62 million to programs that directly benefit local communities. Our diversity and inclusion strategy continues to be a key driver of our culture, and we're proud of our inclusion in the Bloomberg Gender-Equality Index for the second year running as well as continued recognition as an Employer of Choice by the Workplace Gender Equality Agency and the Silver status in the Australian Workplace Equality Index awards. On the environment, we announced our net zero emissions by 2030 target and have established a road map to inform these initiatives. We reduced our energy use by 10% year-on-year, of which 4% was continued asset operational efficiency. We publicly supported the Task Force for Climate-Related Financial Disclosure recommendations in 2020, and our climate resilience approach and reporting against the TCFD continues to improve. It was pleasing to improve our key performance in key areas in key surveys such as the CDP and GRESB. Highlights of our financial performance were referenced earlier, noting it has been a trademark of our leadership team to balance short-term responses with long-term consequences for the business. Supply chains have also been a key focus throughout the year as we developed our first Modern Slavery Statement to assess and address risks in our direct operations and supply chain. Both our Responsible Business Report and Modern Slavery Statement were released on the 31st of March and are available online. Whilst COVID-19 uncertainty remains in 2021, subject to no material change in conditions, the group expects to distribute at least $0.14 per security for 2021. The distribution is expected to continue to grow in future years. The group plans to retain earnings to cover operating and leasing capital expenditure, fund strategic initiatives and reduce net debt. What we learned from last year is regardless of the economic cycle, we must keep moving and innovating to deliver the most efficient platform for our partners to connect with customers. We operate a business that is unparalleled in terms of scale and proximity to where people live and work. This is our competitive advantage. We have a number of strategic initiatives underway that will drive our customer strategy in 2021 and beyond, delivering on our purpose: creating extraordinary places, connecting and enriching communities. We believe Scentre Group is well positioned to deliver long-term growth for securityholders. I'll now hand back to the Chairman.

Thank you, Peter. Before I turn to questions, I'd like to ask each of Carolyn Kay and Margie Seale, who are standing for reelection, and Guy Russo, who is standing for election, to speak. The notes accompanying the Notice of Meeting include a background note on each of Carolyn, Margie and Guy.

Thank you, Chair. Good morning and thank you, fellow securityholders, for allowing me to address you today. I am honored to be considered to continue as a Director of Scentre Group. As you're well aware, it's been a difficult time during the COVID-19 pandemic for all. While we face challenges at Scentre Group, I am very proud of the manner in which the management team pulled together to work through the varying and complex issues. The Board has a diverse range of skills led by a very effective chair, which has been particularly relevant during the pandemic. We work together whilst challenging each other to aim to reach together with management effective outcomes for stakeholders and to continue to strengthen the organization. As you will have seen in the annual report and Notice of Meeting, I have lived and worked in Australia, the U.K. and the U.S. I have had over 30 years experience in finance working as a lawyer, a banker and a director. I have also been and I'm now a nonexecutive director across a broad range of sectors and enterprises, currently including the Future Fund, Myer Family Investments, Sydney Grammar School and the General Sir John Monash Scholarship Foundation. In 2020, I participated in the federal government's retirement income review. My background in law and finance, coupled with my experience as a nonexecutive director and ongoing education, provides me with relevant skills particularly in the areas of global markets, finance, risk, governance, customer engagement and strategy. I take my responsibilities very seriously, and it is with a commitment to work diligently for you that I offer myself for reelection to the Board of this remarkable organization. Thank you.

Thank you, Chairman, and good morning, everybody. Thank you for the opportunity to say a few words about myself and why I'm standing for reelection for Scentre Group today. I'm currently a full-time company director with focus on understanding consumer markets, customer engagement, brand management, sales to retailers, strategic and business development, media and content and the transition to new digital business models. With an extensive executive background including leading companies in the publishing industry during the move from print to digital as well as having experience with a range of companies in my capacity as a nonexecutive director, which are responding to new ways customers wish to manage their lives and interact, I bring an understanding of the need to and how to respond to such changes. My current experience as a director across a range of companies provides me with an understanding of various industry sectors undergoing significant change, as is Scentre Group. As a Board and management team, we constantly think about what Scentre Group will look like in the future and how to build our business to ensure we grow securityholder returns. During this last year, the company introduced a number of customer programs designed to enable consumers to more easily shop with us in ways that work best for them, and we have others slated for this coming year. Throughout my executive career, I spent much time in our centers working with retailers to maximize sales. And I continue to visit them extensively as a director of the company, spending time with the Scentre management including during this last year through the COVID period as was appropriate and allowed. I'm always impressed with the teams at the front of our business in our centers. Last year was a particularly tough year for our Scentre management and leasing teams, and the efforts were outstanding, surpassing a number of industry benchmarks during the period. I continue to support the professionalism and drive of the management at Scentre Group and in our Westfield Living Centres and the work being done to ensure the company remains as relevant in the future as it has been since inception. So it is with great pleasure that I stand for reelection today. Thank you.

Thank you, Chairman. I'm very pleased to offer myself for election to the Scentre Group today -- the Board, I'm sorry. I believe I can make a valuable contribution to the group given my extensive experience in the local and international retail industry. Like many Australian teenagers, I started my working life at McDonald's. From working at the McDonald's outlet in Kingsford in Sydney, I worked my way up to being CEO of McDonald's Australia and then President of McDonald's Greater China. After McDonald's, I joined the Wesfarmers, holding the role of Managing Director of Kmart Australia and New Zealand and then CEO of Wesfarmers department stores Kmart and Target. During my career, I have come to know the group very well, having been a retail partner. I'm aware of the current challenges and opportunities in the retail sector, but believe that the group's purpose and strategy, quality of the group's assets and the experience of the management teams sets the group apart. The challenging environment of 2020 has highlighted the group's role as a leading organization in retail asset management and the benchmark for which competitors and peers measure themselves. It would be an honor to be elected today. If elected, I have the time, focus and commitment to work with the Board and management for the continued success of the group and for you, the securityholders. Thank you for your consideration.

Thank you directors Carolyn, Margie and Guy. Thank you. The items of business are shown on the slide you can now see on the webcast. [Operator Instructions] As mentioned, Megan Wilson from EY, the group's external auditor, is present at today's meeting. Megan is available to respond to any questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by Scentre in relation to preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit. I will not be putting each resolution to the meeting in turn. Instead, I will now address questions on all items of business before the meeting. I note that item 1 is a discussion on the group's financial statements and reports, and this item is not subject to a vote. Prior to the meeting, we've received questions on the group's future plans, including over the next 5 years. I think that -- I hope that you would have got a sense of that from Peter's presentation. Although I must say that the next 5 years, he'd be doing well for the next 5 weeks. But nonetheless, obviously, the consideration is ongoing and continual.

I'll now respond to online questions on all items of business, and we do have a number, largely questions from the Australian Shareholders' Association. I should say that we met with Sue Howes, who is the representation of the Australian Shareholders' -- the representative of the Australian Shareholders' Association, and we have provided answers to the questions that she asked. I think, Sue, that you will also agree that the presentations made by Peter and myself probably covered almost all of them as well. Nonetheless, in the interest of completeness and recognizing that you'll probably be hearing for the third time, so forgive me if I do go through them in the detail they deserve. The first question relates to rental agreements have been renegotiated with the majority of tenants. What general changes have occurred to rental agreements as a result of these negotiations and how has this affected the valuations placed on portfolio properties? I think what we should recognize is that the valuation principles that we apply are consistent from year-to-year, and we value each property at least once a year independently by an outside person. So the principles that are applied are consistent. There'll be no fundamental changes in the way that we've done those valuations. And in terms of the impact that -- I'm just reading the question, valuations placed on portfolio properties, you will note that in the first half of the year, our valuations were severely impacted by what was happening in the world. And then you will also note that in the second half of the year, in fact, they were flat year-on-year, which was really as a result of the negotiations that we had completed with our shareholders in that first half of the year and they now are reflecting in the valuations, which didn't go down any further. So I think in addition to that, the structure of the rental agreements hasn't changed. Peter went through that in his report, and they are still all based on fixed rentals rather than a percentage of sales. And we've said it often. We know that our investors don't want us -- don't want to take on retail risk. And so we didn't agree all along and ultimately, all of our retailers understood that our investors are interested in real estate and property risk. Hopefully, that answers that first question. The second one is about the credit charge that's been included in the accounts, which covers both receivables and bad debts. Given the first quarter is now over, can you provide an update on the changes that have now occurred to these provisions and the likely ultimate write-off? I think simply put, as we did explain before, there are no changes. It may be some small change in the presentation, but in fact, the net numbers will be as they are. And in fact, the further 3 months has simply given us further comfort on those numbers. The next question is -- I think we've answered that. It's, again, about valuations. I think I've answered that question. Yes, I think. Any other questions? Shareholders have seen a TSR of negative 26% in the past year and an average of negative 2.3% over the last 5 years, while the CEO has received remuneration at the top-tier level. Could you explain to shareholders the disparity between the experience of shareholders and the rewards to senior management? Again, I hope that in my presentation where I did go into some considerable detail on remuneration, but perhaps the part of your question that I just do want to expand on is I mentioned that all of our long-term incentive arrangements lapsed. So that had a number of ramifications, not the least of which is Peter Allen had 3 years' worth of long-term incentives that he -- at the start of the year, he was well on track to receive and by the end of the year, they were worth 0. And they were worth over $11 million at the start of the year. So to suggest that management haven't felt any pain, not to mention the substantial shareholdings they have, not to mention the reduction in salaries for 3 months, not to mention the reduction in the short-term incentives, wouldn't be correct. And I think it's fair to say that the management, who did an extraordinary job, took pain akin to everybody else. The difference between shareholders and management is that management are locked into their shareholdings at particular points in time, whereas obviously shareholders can move in and out. I hope I've answered that. As I say, we [ did in the day ] as well. The next question relates to the fact that we've taken the ROCE hurdle as the only one, and we've now added some other hurdles. And the question is -- including a relative TSR. Why have these changes occurred at a point in time when ROCE has notably failed for a number of periods going forward? I think this fits in the category of we're damned if we do and we're damned if we don't because all of our shareholders, yourselves included, have been asking us for a long time to introduce relative TSR particularly. And you say that the share price is 60% of what it was at the end of FY '16 and the dividend is 33% of what it was in FY '16, the very short-term perspectives on those. But the fact is that relative TSR is exactly that: It's relative. And so everybody is at the same stage in terms of the share market, in terms of earnings, in terms of the pandemic. And so I think to say that it's a point in time that's a particularly favorable one doesn't reflect that comparability. Any other questions? I think we've answered that one. Thank you. The next one is, again, on remuneration. An event has occurred that's reflected a very poor result of shareholders with a corresponding poor result for senior management through the failure of short- and long-term incentives. However, senior management have been granted retention awards. Could you explain to shareholders how the remuneration plan aligns with the financial expense of shareholders when awards such as these are issued if the remuneration plan fails? We've -- and I did cover this, again, in my report, we reflected long and hard on the fact that -- I mentioned, Peter lost $11 million in long-term incentives. And to suggest that there is no alignment there or that the retention awards somehow compensate management for the lost LTAR and STAR simply isn't correct. What I explained was, was that we lost our retention mechanism. And so what the retention grants were designed to achieve was to try and retain what we considered to be the best management team going. Now we could have done nothing. We could have done nothing on all of this. And we could have come to the end of the year and said, "Terrific. We got a great outcome. We didn't give anything, and we did -- we ticked all the boxes and we lost our management team." We, as a Board, took a decision that, that wasn't what we wanted to do. We wanted to retain this team, and that's what the retention awards were designed to do. I now have a question from Mr. [ Wolfgang Frank ], and I'll have to read it. It says, "Remuneration report states that short- and long-term outcomes are designed to fairly remunerate executives for achieving outcomes that deliver or will deliver securityholder value. For FY '20, the share price declined from [ $4 to $2.70 ] with distributions reducing from [ $2.27 to $2.6 ] with forecast distribution of $0.14 per security. All FY financial metrics declined significantly. Despite these outcomes, they achieved 55% and 50% of short term for Peter and Elliott Rusanow, our CFO, despite only meeting some of the financial/nonfinancial measures. Despite -- not in comparative peer group, ANZ, for example, reduced executive short-term awards by 50% despite financial/nonfinancial outcomes being met. In determining the 50% reduction, the Board judged what was fair and reasonable having regard to the impact on shareholders and considering expectations from customers and the community." It's a long question. How does SCG awards align with securityholder values? Mr. [ Frank ], I hope that I have answered that question already, both in responding to the ASA questions as well as in my overview. I hear your comments about the ANZ. As you say, they're not comparative at all. Some industries did better than others in terms of the pandemic. And as you would be well aware, ours was one of those that was severely impacted. But we assessed in March, at the time of the pandemic beginning, both our long-term and our short-term incentives. On long term, there and then we said, well, clearly, as sad as it was, no one was going to earn any long-term incentive for '18, '19 or '20 and in fact, we never issued '20. For the short-term incentives, unlike many companies that have a June year-end or later, but not December, they said, well, clearly, we're not going to earn it and so we're not paying it. We still had 9 months of the year to go. And for us to disincentivize management who were doing such an excellent job would have been -- would have not been a good message. And so we consciously made a decision that we would continue with the incentive scheme, the short-term incentive scheme. And at the end of the day, we made a call which, again, is what the Board are paid to do, that some of them vested, 50% in Elliott's case and 55% in Peter's case, compared to 80-plus percent in prior years. So I hope that, that answers your question. We do think that they align. And again, I would encourage shareholders to look at the total picture when it comes to remuneration, not just short term, not just the fixed remuneration, but also long term that didn't vest at all. So hopefully, that does answer your question. Do we have any other questions? I'm told there are no further questions, and as a result, the proxy results on all resolutions received before the meeting will now be shown. Please cast any final votes before I close the polls, which I will do in approximately 30 seconds. [Voting]

[ By my watch ], that is about 30 seconds, and the poll for each resolution is now closed and it will take a short time for the results from today to be combined with the proxy results. Right. We have that slide. Based on these results, the resolutions to reelect Carolyn and Margie and to elect Guy have been passed. Congratulations to each of you. Thank you. Based on the results, item 6, the grant of performance rights to our CEO, Peter Allen, has also been passed by the requisite majority. As noted in my address, item 2, the resolution on the group's remuneration report, has received a substantial vote against it. And based on these results, the resolution has not passed. As I said, we value the views of our securityholders, and the Board will consider all securityholder feedback as we make the decisions in 2021. The final results of the polls will be announced to the ASX later today. On behalf of the Board, I'd like to thank you all for participating in today's AGM, and the meeting is now closed. Thank you.