Smartgroup Corporation Ltd ($SIQ)

Good morning, everybody, and welcome to the 2026 Annual General Meeting of Smartgroup Corporation Limited. I am John Prendiville, Chair of the Smartgroup Board. I would like to acknowledge the traditional owners of the land on which we are meeting today, the Gadigal People of the Eora Nation. I recognize their continuing connection to the land, waters and culture. I pay my respects to the elders, past and present. It's now 11:00 a.m., the nominated time for the meeting. I've been advised by the company secretary that a quorum is present, and so I am pleased to declare the meeting open. This year's AGM is being held as a physical meeting with a live video webcast available for shareholders who prefer to follow the meeting remotely. I warmly welcome those shareholders who are joining us online. We did consider a hybrid meeting, a format after asking shareholders for feedback at last year's AGM. However, given limited shareholder demand and the additional cost involved, the Board decided to continue with a physical-only meeting, consistent with recent years and which I am advised by our registry is common practice across companies of our size. The notice of meeting was made available to shareholders and lodged with the ASX on the 15th of April 2026. I propose to take the notice as read. Joining me here in Sydney today are Anne McDonald, Non-executive Director and Chair of the Audit and Risk Committee; Carolyn Colley, Non-executive Director and Chair of the IT and Innovation Committee; Deborah Homewood, Non-executive Director and Chair of the Human Resources and Rem Committee; Ian Watt, Non-executive Director and Chair of the Environmental, Social and Governance Committee; Mark Rigotti, Non-executive Director; Paul Rogan, Non-executive Director; Scott Wharton, Managing Director and Chief Executive Officer; and Sophie MacIntosh, Group Executive, Legal, Risk and Corporate Affairs and Joint Company Secretary. Karen Hopkins, the audit partner from our auditor, KPMG, is also present here today and will be available to answer questions from shareholders at the appropriate time in the meeting. I will now make some brief comments about the company's performance in 2025 and so far in 2026 before handing over to Scott to take you through these matters in more detail. I'll remind shareholders that our 2025 annual report is available from the Investors section of our website. 2025 was a year of disciplined execution and continued strategic momentum for Smartgroup. Amid evolving market dynamics, the group delivered strong financial performance, deepened customer relationships and accelerated progress on its strategic road map. We welcomed new clients across all segments while retaining all major contracts up for renewal. Our focus remains clear: To build a resilient, scalable and customer-centric platform and deliver sustainable value for our shareholders. In March 2026, we welcomed Paul Rogan to the Board. Paul is Chair and Non-executive Director of Hub24 and a Non-executive Director of IDP Education and Raiz Invest. He has been a valued addition to the Board, bringing deep experience in financial services, governance and growth leadership. Consistent with our commitment to strong governance, the Board will continue to review its skills mix and composition to ensure it remains well positioned to guide Smartgroup's strategy and long-term success. In this regard, we will likely add a further director to the Board this year, which should position us well, not only as it relates to our desired skill set, but also for good succession planning in the years ahead. Succession planning is a topic the Board is well across, not only as it relates to the executives, but also the Board itself. I have been on the Board since listing on the ASX, and gladly they accepted the role of Chairman to ensure a successful and seamless transition for Michael Carapiet as he retired in early 2024. While I am up for reelection in this meeting and as much as I enjoy the role of Chairman, I won't be standing again in 3 years' time. I'm very confident that when it comes time to transition to a new chair, we will have an abundance of options in which to choose and will, again, ensure a seamless and well-thought through transition. Turning to the highlights of the last financial year. 2025 was a strong year for Smartgroup. We delivered solid revenue and profit growth, made meaningful progress against our strategic priorities and continued to build momentum across the business. At the same time, we invested in capability and growth initiatives to support Smartgroup's long-term ambitions. The group's financial results reflect this momentum. Revenue grew to $329.3 million for the year, up 8% compared to 2024, underpinned by strong novated leasing volumes and new client growth. EBITDA increased to $135.3 million, up 14% in the same period with the EBITDA margin expanding to 41%, which is an indication of the scalability and leverage of our platform and disciplined cost management. Net profit after tax and amortization, which we call NPATA, rose to $80.2 million, up 11% compared to 2024. Smartgroup's capital-light business model continues to underpin strong cash generation and a resilient balance sheet. This financial strength enables us to invest confidently in growth while consistently delivering significant, fully franked dividends to the shareholders. We achieved strong growth across our customer base in 2025 with salary packaging customers, novated lease volumes and fleet vehicles under management all reaching record levels. This performance reinforces Smartgroup's strong market position and the trust we continue to earn across our sectors in which we operate. Novated leases under management reached 85,300, supported by strong demand and improved vehicle supply. Active salary packaging customers increased to 491,000 driven by new client wins and deeper engagement with existing clients. Our fleet business also expanded, reaching 35,200 managed vehicles. Together, these results reflect the strength of our proposition and the growing relevance of our services. The federal government's electric car discount policy has been a significant catalyst for change in Australia's automotive market. Introduced in July 2022, the policy has materially accelerated electric vehicle adoption while supporting lower transport emissions. In just 3 years, electric vehicles have grown from representing less than 2% of new vehicle sales in Australia to around 15% today. This growth has been supported by a broader range of models, improving vehicle availability and increasingly affordable price points. Smartgroup has played an important role in enabling this transition by making electric vehicle ownership more accessible through novated leasing. Our market-leading proposition and digital platforms have simplified the customer experience, while our education initiatives have helped thousands of Australians better understand the benefits of EV leasing. In doing so, we have helped ensure that the government's policy translates into practical and meaningful outcomes for customers and employers across the country. The government has now completed its statutory review of the electric car discount policy and confirmed its continuation as part of the federal budget. The review confirmed that the policy is working as intended, supporting more affordable access to electric vehicles, particularly for everyday Australians, while contributing to emissions reduction and greater energy independence. Importantly, the government has reaffirmed its commitment to the policy by maintaining the current settings through to April 2027, followed by a phased and measured continuation. This approach provides certainty for households and industry, while supporting a sustainable transition as the electric vehicle market continues to mature. Over recent months, volatility and increases in oil and fuel prices have provided additional momentum for Australians to reassess the total cost of owning a car. For households facing rising fuel costs and longer commutes, electric vehicles have become an increasingly attractive option to help manage day-to-day living expenses. Against this backdrop, Smartgroup remains focused on supporting customers through the changing market and policy conditions and continuing to play a constructive role in Australia's transition to a cleaner, more affordable transport future. ESG. Caring for others and for the planet is a Smart way to do business. During the year, we published our new sustainability strategy, detailing our vision to 2028 and commitment on how we will reduce our impact, support clients and customers to make more sustainable choices and build a more resilient business for the years ahead. The new sustainability strategy was informed by extensive stakeholder consultation and an updated ESG double materiality assessment, which helped us narrow our focus to those areas which best align to our corporate strategy and where we have the greatest opportunity to deliver positive social and environmental impact. We continue to invest in creating positive social impact, including through our Smartgroup Foundation. The Foundation awarded 20 grants totaling almost $250,000 to community groups delivering tangible outcomes to promote more inclusive communities, enhanced financial well-being and the protection and restoration of our natural environment. We also committed almost $1.2 million in sponsorships for community-focused initiatives and events in the education, health and defense sectors. Diversity and inclusion remains a focus, earning us Inclusive Employer recognition from the Diversity Council of Australia for the sixth year. We concluded our 2-year Innovate Reconciliation Action Plan in December with key achievements, including the onboarding of a number of First Nation businesses within our supply chain. We are now working towards publishing a second innovate ramp in 2026. 2025 was the second full year delivering our strategic priorities, and we have made strong progress. We strive to deliver smarter benefits by simplifying processes so they work smarter for our clients and their employees, our customers. We enable our clients to attract and retain great teams, add real value to the lives of their employees, and together, help build a more sustainable Australia. Scott will provide more details about our strategic priorities in his presentation. Since listing in 2014, Smartgroup has delivered strong and consistent returns for shareholders through both capital growth and fully franked dividends. Over this period, we have returned approximately $649 million to shareholders in fully franked dividends, while our market capitalization has grown from approximately $160 million at listing to around $1.5 billion as at the 15th of May 2026. This slide highlights the long-term shareholder value created by Smartgroup since listing. As in previous years, I want to briefly highlight our approach to capital allocation, which is to ensure that we deliver long-term sustainable growth and maximize shareholder value. Our strategic priorities provide significant opportunities for Smartgroup's medium and long-term growth. To ensure we make the most of these opportunities, we continue to invest in core and digital technologies as well as customer experience improvement initiatives. These necessitate allocating sufficient capital to ensure we can execute well. Consistent with this capital allocation approach and factors including our solid returns and cash generation and our meaningful ongoing investments in the growth of the business, the Board declared a fully franked final ordinary dividend of $0.215 per share. The Board also declared a fully franked special dividend of $0.12 per share. Together with the $0.195 per share interim ordinary dividend declared in August 2025, this brings fully franked dividends to $0.53 per share for the year, representing 90% of 2025 in NPATA. In addition, Smartgroup has recently reached agreement on the sale of the majority of its self-funded fleet portfolio to Volkswagen Financial Services Australia. This expands the strength of our fleet funding panel to further enhance funding support for our clients. Fleet remains a core pillar of our growth strategy, and through our relationship with funding providers, we are pursuing this growth in a capital-light manner, consistent with our overall strategy. With the release of capital from these assets, the Board has, today, declared an on-market share buyback of up to $20 million over the coming 12 months. I should announce -- I should sort of let you know that those things were announced this morning for anybody who hasn't seen the recent announcements. Finally, as evidenced in our disciplined approach to capital management, you can see from the chart on this page, our continued delivery of strong return on equity for our shareholders, which is currently sitting at about 30% after tax. Before I finish, I also wanted to give you a sense of the Board's thinking regarding executive remuneration, a topic I haven't touched on previously other than what's covered in the annual report. The Board believes that the remuneration outcomes for 2025 generated sensible outcomes that align with the company's objectives and continue to reinforce our pay-for-performance framework. Remuneration outcomes were directly linked to performance against clearly defined financial and nonfinancial measures with a significant portion of executive remuneration structured to be at risk, equity-based and delivered over the long term. We believe this supports alignment between executives and shareholders and ensures rewards only realized when value is delivered. The remuneration framework implemented for 2026 has been structured consistently, maintaining the same principles of performance alignment, appropriate stretching targets and a strong emphasis on long-term value creation. Our thinking and approach to remuneration has been pretty consistent over the years. And I note that all proxy advisers have recommended that shareholders vote in favor of all resolutions being put to today's meeting, including the rem report. In closing, the operating environment continues to evolve, presenting both challenges and opportunities. While inflation and higher interest rates have weighed on consumer sentiment, demand for value-led solutions remains resilient. Cost-of-living pressures are driving individuals and employers to seek smarter ways to maximize financial well-being and attract talent, creating a supportive backdrop for our offerings. On behalf of the Board, I would like to sincerely thank Scott, the broader management team and all the Smartgroup employees for their dedication and hard work throughout 2025. I also extend my thanks to our loyal clients, suppliers and shareholders for their continued support and to my fellow non-executive directors for their ongoing contribution, experience and insight in guiding Smartgroup's strategy and direction. I'll now hand over to Scott.

Thank you, John, and good morning, everyone. This morning, I will begin with an overview of Smartgroup's investment proposition. I will then provide some more details about our strategic priorities and the progress we have made to date. I will finish by recapping our 2025 financial results and sharing an update on trading in the first quarter of 2026. We believe our investment proposition remains highly compelling. Smartgroup's differentiated position underpins our ability to deliver strong growth and sustainable returns over the long term. Smartgroup is a leading employee services and fleet solutions provider with a client base that employs around 2.5 million Australians. Our existing client base represents a significant growth opportunity. In 2025, we provided services to around 584,000 of those people and managed over 120,000 vehicles across novated leasing and fleet. We are the largest salary packaging provider in Australia, and this scale enables us to continue investing in superior customer experience and in the systems and protections that safeguard our customers. Over the last 2 years, we have consistently demonstrated improvements in operating efficiency. In 2025, the number of customers handled per operations team member has improved by 16%. Smartgroup's operating platform continues to demonstrate strong capability in attracting, migrating and retaining some of the country's largest and most complex employer clients. Our scalable technology foundations, sector expertise and customer-centric service model enables seamless transitions for new clients. The group has significant recurring revenues and long-term contracts with clients in attractive and growing segments like government, health, education and not-for-profit. Our offerings are even more relevant to our customers during tough economic times when people are looking for ways to make the most of their take-home salaries. We have a track record of revenue growth and a resilient and scalable earnings base with strong cash flow conversion. Smartgroup's investment proposition to shareholders is underpinned by our capital-light business model. This model means that we carry relatively low levels of vehicle residual value and credit risk. Combined with our strong balance sheet and high free cash flows, this means that we can pay fully franked dividends to shareholders at the same time as we are investing for growth. Finally, we have articulated a clear set of strategic priorities to drive profitable growth into the future. We are focused on our customers and our core businesses of salary packaging, novated leasing and fleet while investing in digital and technology, accelerating growth and delivering scale efficiencies. This slide recaps Smartgroup's strategic priorities and focus areas as communicated to the market in February 2024. Smartgroup is committed to delivering smarter benefits for smarter tomorrow through disciplined execution of these strategic priorities. Since announcing our strategic priorities in February 2024, Smartgroup has delivered strong and consistent financial performance. Over the 2023 to 2025 period, revenue has grown by 31%, driven by continued investment in digital capabilities to enhance our customer proposition alongside strengthened account management and business development capabilities. Over the same period, EBITDA increased by 35%, reflecting the scalability of our operating model. NPATA increased by 27%, demonstrating our ability to deliver profitable growth while continuing to invest to support long-term value creation. Our disciplined execution is translating into sustained customer growth and continued momentum in our core markets. The peer comparison highlights that we are growing from a position of scale, and we are continuing to build that lead. While competitors have also grown, our growth rates and absolute scale reinforce the strength of our proposition and our execution. This slide outlines our strategic road map. While our strategy focuses on the 4 strategic priorities, we have deliberately phased execution. The first phase focused on growth and demand generation to build our leadership position in novated leasing. We have also invested in our front-end digital assets to enhance customer experience and sustainably fuel growth into the future. The second phase, which commenced in 2025, is focused on building a scalable business platform. This phase includes investments in consolidating our brands, removing duplication of operations, modernizing our technology and automating processes. The third phase focuses on innovation of propositions to meet evolving customer and client needs. We have made good progress. For example, we expanded our novated leasing network through partnerships, including BMW Financial Services and Qantas, and broadened our employee benefits proposition by adding Intellihub, Count and Finspo to the platform. Our fleet funding offering has also been expanded with Volkswagen Financial Services Australia. As a result and as mentioned at our 2025 results, we anticipate EBITDA margin to be in the mid-40s during 2027. Beyond 2027, with sustained investment, particularly in automation and AI, we see opportunities to further elevate business performance. We will continue to develop our product offering to meet evolving customer needs and strengthen our value proposition. A key focus of Phase 1 of our road map is digital transformation, and I wanted to provide some examples. We have now delivered enhanced market-leading digital solutions, improved customer experience and expanded our digital reach. As I mentioned in our full year results in 2024, we launched our enhanced car leasing portal and we also delivered smart.com.au, our new customer, digital home. These investments have made it easier for customers to engage with us on their salary packaging and novated leasing needs, how they want and when they want. In 2025, we have delivered our new digital salary packaging sign-up journey, making a significant milestone in our platform modernization. This digital asset enhances customer onboarding by offering an improved experience that simplifies the sign-up process. Feedback has been positive from clients. I will touch on the new Smart app later in the presentation when I step through our Q1 trading update. Importantly, over the last year, we have improved our digital product and technology capabilities to ensure we continuously enhance our digital assets. These capabilities will ensure that our products remain market-leading and continue to meet customer needs into the future. This slide outlines some of the work underway in Phase 2 of our strategic road map. A central objective of Phase 2 is reducing operational complexity. We've already reduced our brand footprint from 8 to 4, and early in 2024, we divested non-core businesses to sharpen our focus. This consolidation allows us to concentrate our marketing investment, better leverage our ongoing investment in product technology and remove duplication across the organization. Operationally, we're also simplifying the way we serve customers. We've already reduced our contact centers, and we're now on a clear pathway toward a more unified and streamlined contact center operation. We've also made significant progress in enhancing our technology. When we began this journey, we were operating multiple legacy systems inherited through acquisitions, including duplicate product platforms. Today, we've delivered meaningful improvements with 45% of our compute now running in the cloud. By 2028, we will reach 100% modernization of our technology infrastructure. This reduces operational risk, accelerates the delivery of new digital experiences and enables future automation. In 2023, automation in our business was limited. In recent years, we have stepped up significantly, introducing, for example, an internal AI agent, enabling rapid access to product information and automation of key processes such as customer claims. We will continue to expand automation as we build out our highly scalable platform and omnichannel operation. As a result, we are already seeing tangible efficiency improvements, including sustained gains in the number of customers handled per operations team member. As these initiatives come together, brand consolidation, contact center rationalization, technology modernization and deeper automation, the efficiency benefits will continue to grow. The third phase of our strategic road map is about enhancing our propositions, expanding benefits, strengthening feature sets and introducing new products into our operating platform that create even more value across our core markets. Smartgroup is well positioned and is unlocking value through scale and disciplined investment and execution. As we continue to enhance the customer experience and expand our market reach, we are generating operating leverage that benefits clients, partners and shareholders. This reflects the strength of our leading capital-light digital platform, which connects employers, employees and partners at scale. These outcomes demonstrate that the delivery of the strategic priorities announced 2 years ago are now translating into sustained improvements in efficiency, scale and financial performance. Our approach to value creation remains unchanged. Firstly, we are focused on winning additional clients to leverage the existing scale of our platform and our relationship management teams that already serve over 0.5 million customers. In 2025, we continued to grow our customer base to record numbers. For example, we were successful in winning Monash Health and Grampians Health in Victoria. We were also added to the Transport for New South Wales leasing panel, and we welcomed many new clients across all segments while retaining all major contracts up for renewal. Since announcing our strategic priorities, we have grown our eligible employee customer base by over 300,000 to 2.5 million eligible employees which represents a 14% increase between 2023 and 2025. Secondly, we are focused on the organic opportunity to expand the uptake of our packaging and benefits offerings within our eligible customer base to leverage the great work of the operations teams that are already in place to support our clients. We are succeeding in improving our uptake rate. Since announcing our strategic priorities, active customer uptake has had a relative improvement of 9%. Our approach for driving uptake is working well and gives us a clear pathway to further organic growth. And finally, we are focused on expanding our products and services to better meet customer needs, and we have already outlined in our strategic priorities. This will increase customer lifetime value. We are making good progress, showing a relative improvement in the uptake of our products by 13% since announcing our strategic priorities. In combination, improvements in total eligible customer base, customer uptake and product cross-sell have underpinned our growth over the past 2 years. We are making strong progress on each front and these improvements will drive improved financial returns over the medium term. In summary, in 2025, Smartgroup, again, delivered strong financial results and solid operating momentum through disciplined execution. We delivered record customer numbers across salary packaging, novated leasing and fleet. These results reflect a business that is performing very well across all meaningful metrics. We will continue to remain focused on driving further growth and scalability through the delivery of our strategic priorities. I'll now turn to our Q1 trading update. Novated leasing business continues to show strong growth with momentum carrying through into the first quarter of 2026. In Q1 2026, new leased vehicle orders were up 22%, and total settlements, which include new, used and refinanced vehicles were up 7% year-on-year. The pipeline strengthened materially during the quarter, with future pipeline revenue increasing approximately $16.8 million at the end of March 2, up from $9.8 million in December. We have also seen further improvements in vehicle delivery performance. Average vehicle order to delivery time frame for Smartgroup's Top 30 makes and models reduced to 24 days in Q1 2026. Smartgroup remains actively focused on managing yield. In Q1, yield was lower, reflecting targeted promotional activity and also vehicle mix. This was a carefully managed outcome, and we remain disciplined in balancing volume growth with yield management. I want to highlight a couple of operational milestones from Q1 that are directly aligned to our strategic priorities. One of the most exciting developments in the quarter has been the launch of our new Smart app. The app is designed to drive higher customer engagement and greater self-service, make it easier for customers to manage their benefits in the way that suits them. The second operational highlight is the progress we are making with our AI, data and automation program, which is focused on improving responsiveness for customers and improving productivity across the organization. We are implementing 24/7 digital servicing designed to reduce call volumes through AI-enabled chat, and we are also rolling out an internal AI agent to help our teams access product and contract information quickly, supporting both efficiency and customer experience. We're also using AI to analyze customer calls at scale with over 200,000 calls now analyzed to better understand customer needs, sentiment and areas where we can continue to enhance the experience. We continue to see a supportive environment for future growth. Demand for our products and services is robust. We are pleased to see the government reaffirm its commitment to electric car discount policy. Many of our customers are nurses, teachers and not-for-profit workers. The policy has made it possible for them to transition to an electric vehicle and reduce their living expenses. Policy certainty is important to maintaining strong EV uptake and gives manufacturers and charging providers the confidence to invest, supporting Australia's transition to cleaner, more affordable transport. Our distribution partnerships have received a positive response from clients and customers, validating our strategic direction and unlocking new channels for scalable expansion. Recently, we signed new partnerships with Hyundai Capital, Jaecoo and Chery. We are mindful of the broader economic environment, including potential impacts from inflation, interest rates and changes in consumer confidence and continue to actively monitor these factors. Notwithstanding this, our business model and strategic investments provide resilience and flexibility. As we have said before, 2026 will be a significant year of technology, investment and change delivery. This will position the group to realize the scale benefits associated with our strategic priorities. As we have mentioned, we are targeting EBITDA margin to be in the mid-40s during 2027. With sustained investment, including automation and agentic capabilities, we see continued opportunities to further elevate business performance beyond 2027. So continued strong execution of our strategic priorities, Smartgroup is well positioned for sustained profitable growth, enhancing value for our shareholders. In closing, I'd like to thank our Chair, Directors, executive team and all Smartgroup team members for your hard work and commitment throughout 2025. To our clients, customers and of course, our shareholders, we'd like to express our gratitude for your ongoing support.

Thank you, Scott. We'll now move to the formal part of the meeting. I will start by explaining the arrangements for asking questions and voting on the formal items of business. Questions. Only shareholders and proxy holders holding yellow voting cards or blue nonvoting cards will be entitled to ask questions. Visitors holding red visitor cards are not entitled to speak at this meeting. If you wish to raise a question, could you please hold up your yellow or blue card. When I call on you to ask your question, please identify yourself. And if you are a proxy or representative of another shareholder, the name of that shareholder, you may then ask the question. I ask all shareholders to keep your questions short and to the point so that as many shareholders as possible have the chance to ask their questions. We also ask shareholders not to ask more than 2 questions at a time, if possible. We reserve the right to rule out questions that do not relate to the business of the meeting. And we will also not answer questions that are substantially similar to questions that have already been answered. Otherwise, we will endeavor to answer as many of the questions as we can. I also note that in the notice of meeting, we invited shareholders who were unable to attend the meeting in person today to lodge questions online before the meeting. I understand from our Company Secretary that no questions were lodged online before this meeting. In accordance with the company voting, sorry, in accordance with the company's constitution and as stated in the notice of meeting, as Chairman, I have determined that voting on each of the resolutions will be conducted by a poll rather than a show of hand. In accordance with the company's constitution, shareholders were given the opportunity to exercise a direct vote before the start of this meeting by lodging the voting form that accompanied the notice of meeting. Shareholders were also able to use the voting form to appoint a proxy to vote on their behalf at the meeting. As set out in this notice of meeting, I will vote all directed proxies in accordance with the directions provided by shareholders. And I will vote all undirected proxies in favor of all resolutions. Shareholders and proxy holders who are attending the meeting in person today and who have not exercised a direct vote before this meeting, should have received a yellow voting card on entry to the meeting. If you did not receive a yellow voting card, please see the representatives of MUFG corporate markets who are located at the registration desk just outside this room. Shareholders and proxy holders holding yellow voting cards will be invited to cast their votes on all resolutions by completing the voting cards and placing them in the voting boxes. Representatives of MUFG corporate markets will circulate the voting boxes after all resolutions have been discussed and before the poll closes. As I have previously explained, voting on each resolution will be by poll. The poll for each resolution is now open and will close 5 minutes after the end of the meeting. The results of the poll on all resolutions will be released on the ASX company announcements platform and made available on the company's website as soon as possible after the close of the meeting. Financial statements and reports. The first item of formal business is to receive and consider the company's financial statements and reports for the financial year ended 31 December 2025 as set out in the 2025 annual report. This item of business does not require shareholders to vote on a resolution or to formally adopt the reports. Shareholders or their proxies may comment or ask questions about the financial statements and reports or about management of the company. Shareholders may also ask questions of the company's auditor, KPMG, in relation to the conduct of the audit, the preparation and content of the audit report, accounting policies that are adopted by the company and the independence of the auditor in carrying out the audit. I will now address any questions relating to this item of business or any general business questions. Are there any questions? Please?

I've got 4 questions, so I'll ask 2 and then you can come back to me.

Sorry, would you just identify yourself?

My name is Ray Hadley. I live in the outer West. So I haven't seen this morning's announcement. First thing that I'm anxious to find out a bit more about is the sale -- I assume from what has been said, there's been a sale of Smart Fleet to VW. Does this mean that you're no longer in that business anymore. And also what is the -- one of the things I look at when I buy shares is the price to earnings ratio. So you guys are obviously privy to the -- how much it was sold for. I'm not asking what that was, but you know how much. Yes, I want to know, did we get a good deal?

Should I answer that one, right? Yes, sure. So -- and I'm conscious of the fact that you haven't had an opportunity to see the release. But what the release is that we sold a reasonable portion of our on-balance sheet fleet-funded cars. So you remember in years of old, we've talked about having a pilot program running where we fund certain fleet cars on our balance sheet, and that had run up over time.

So that's like real estate where...

No, no.

All listed you sell some of it.

Pretty much, but it's basically -- we had about -- we had a portfolio of cars on balance sheet, which we -- which was the part of program we've been running for some time, some 3 years, I think it is, to sort of understand how that side of the market works. Our fleet operation -- our traditional fleet operation has been carrying on regardless. Fleet as a concept, fleet as a business is one of our strategic priorities. So we haven't sold the fleet business at all. We've simply sold a component of the existing fleet book that we were holding on balance sheet, sold that into our third-party fleet funding provider. We've set up a third-party fleet funding provider to enable us to write fleet deals off balance sheet, similar to what we do in novated. And what we've had is a part of program where we've had a reasonable portion of a portfolio on balance sheet. So funded by the company itself. All this announcement is done is transferred that -- a large part of that balance to a third-party funder and released that capital back to the company.

So did we get a good deal? That's what I want to know.

I think we're very happy with the deal. We certainly would have done the deal if we weren't happy with the deal.

Now on the slides, it was [ 19 ] -- not -- 2028, but I didn't see anything listed as new opportunities. You seem to be reducing what you're doing, rather, things sort of happen and it looks like in 2028 that you haven't got any eyes on any opportunities.

Yes. Good question. So what Scott has done is obviously go through what was our strategic plan, some 2 or so years ago that goes out to 2028. I think we're achieving wonderful results on that plan. And I think the results that are sort of coming through, the market's recognition of those results is probably some recognition, some third-party reference, I guess, that you can sort of take to the market at least is reasonably happy with what we're doing. I will say also that in terms of expansion, in terms of new opportunities, in terms of growth within our with our strategic set of businesses, we're constantly looking at opportunities in that area. And I think we will continue to do so. We have a conservative balance sheet which is, again, a bit related to why we've made a decision to sort of do a nonmarket buyback with some of the capital released from that sale of book. But we are definitely always looking and if we see the right opportunity and it fits our strategic objectives, knowing that it's very easy to blow things up in acquisitions, as I'm sure everyone in this room is aware, we want to make sure that if we do something that we do something well, that it fits with what we're capable of doing and what we're capable of handling and that it fits our longer-term strategic direction. So that we can continue to sort of develop and build on our value creation. I'm not sure if that answers the question, but basically, we are always looking, and we will continue to grow. Other questions? Please.

Chair, I'd like to introduce Richard Ground.

There are a number of comments about the increase in EVs and it's great that there are more EVs from an environmental point of view. I'm just wondering how that -- whether that impact -- the balance between EVs and internal combustion, whether that affects income, revenue, profitability, whatever.

I might actually pass that to you. I think my sort of comment would be that the mix of cars that we deal with. We still have -- we sort of break it down into sort of what is an ICE internal combustion engine. Obviously, the -- next slide. This slide is our EV and possibly hybrid sort of in that camp as well. We're finding a very stable and strong market in ICE, but very high growth in EV. The nature of what we do sort of gives us a reasonably consistent return across those cars other than for value. So the cheaper a car gets the cheaper the -- or the lower the return that we can expect in relation to a transaction on that car. As you might imagine, there's only so much to go around. So I think that would probably be the drivers, I think, Scott, I might pass to you if there's any other nuances there?

Yes. It's a good question. A couple of add-on comments. Firstly, combustion engine vehicles remain a very important part of our overall business. Many of our customers want to get a novated lease for the combustion in car for a range of reasons. And in fact, if you look at absolute numbers between 2023 and 2025, the actual number of combustion engine novated leases that we do, which has actually grown through that period. That being said, in parallel, EVs have obviously been accelerating growth as well. So good news, we've had growth in combustion engine and growth in EVs overall the total book has grown substantially. And back to that number, the question is, do we see any changes between EV and combustion engine on yield. Around the fringes, depending on the make and model of the car. But overall, the main game from our perspective is volume, more cars through where the combustion engine or EV equals a good outcome. That's overall revenue growth. And depending on the make or model, we will work with our customers to look at other items that might be relevant for them as a driver. So for example, EVs actually opens up a whole new world of discussion with our customers around what I refer to as the EV lifestyle. So one of our partnerships we mentioned is with Intellihub. So we're going to speak to our customers, but we can also not just give them an EV now, we can also help them get set up with home battery and solar as well as charging as well through that service. So interestingly, whilst combustion engine vehicles will continue to be important part of our business, the expansion of EV is opening up new opportunities for us as well.

Okay. Other questions? I think you can.

Chair, reintroducing Mr. Hadley.

Ray Hadley again. One of the things I do on a regular basis is look at how the share price goes up and down. Obviously, if you're looking at -- it's a good time to buy. Is it a good time to sell. And I've noticed slightly that the share price has had a bit of a jump, probably roughly 20%. And I'm wondering if someone got here to what's going on this morning and pushed the price up. That's the first concern. And then based on the 2028 chart I saw, and I know you've explained that you're always looking out for more opportunities, but it seems to me that there's less things that you need to concentrate on. So what's the justification for more adding another person to the management team?

Okay. I might touch on that. If I can go that in reverse. Another person on the management team. I think Ray that might have been my reference to adding someone else, and that was actually on the Board. Yes, on the Board. And again, just adding someone to the Board just to allow for skills mix, and also, in due course, we're going to have succession discussions as well. So just making sure that we've got a...

In the same number.

Pretty much over time. Yes. Yes, but it's just giving us that flexibility over the next couple of years to work out how we want to handle things. And I think that will work really well as well as that skills mix. In relation to the first point, I think that was a reference to the share price, obviously, having gone up and whether somebody was privy to the announcement that we made this morning, I don't think that was the case around this morning. I think that was only signed very, very recently as in very recently. I don't think it's of a nature that would have a material movement in the context of a company this size with its earnings and market cap, $20 million buyback it is of interest, but I don't think it's a -- I don't think it moves the needle in terms of impact. So I don't think that's -- I think the cause of movement in the share price, I suspect, is probably the market becoming aware of a little bit of pull forward of interest in EVs over the last 2 or 3 months. And that's been reported by other companies that are in the space that they're picking up some reasonable interest in growth. And also, I think the federal government coming out with their views in relation to the EV rebate policy giving certainty to outcomes, I think, and certainly to the industry going forward, I think the market probably, analysts and institutional investors probably took a view that a period of uncertainty has been taken away. And I think that's probably the driver of what's going on here. But good question. Any other questions?

Chair, introducing Mr. Howard Coleman of Team Invest.

More comments and then a question relating to the buyback. Obviously, Team Invest members always love it when a company is a capital light and doing something to make itself even more capital light. So we applaud the -- getting rid of the leased vehicles to a third party and releasing funds. My concern, though, with the buyback is, at the moment, when you've announced the buyback, your PE is -- or our PE shareholder is particularly high looking at the last 10 years. So while it's been a fantastic wealth winner and Team Invest members applaud the work done by Scott and his team, you and the Board, in making this such a successful investment for us over the years, don't make the cochlear mistake or CSL mistake of buying back lots of shares while the PE is high. If you sort of look at the last 10 years' worth of PEs, I'd be happy if -- and I'm sure most Team Invest members would be happier if you were buying back shares when we also thought they were good value, and we're buying them rather than when we didn't. A comment really share price rise we may have been a bit of a contributor to that because when the share price was well under $10, lots of Team Invest members were buying shares in Smartgroup, including me. But I'm not that sure that they'd be buying them today, they'd be waiting for a lower price. So with experience on the Board, I'm sure you won't make that mistake. But let's not be buying back the shares when the PE ratios are particularly high.

Would you like me to comment on that?

Yes, please.

Yes, sure, sure. I guess the -- I'd say a couple of things. One, we obviously have growth objectives ahead of us. So one would like to think that in the years ahead, we will produce a better outcome than we are at the moment. That's the first thing. Second thing is the coincidence of the buyback really has come about as a result of a release of capital. And we had a number of choices in front of us. We could have repaid debt, which wouldn't have done much because we've got a very conservative balance sheet anyway. So it might have given us a little bit of an interest saving. I think what we were hoping to do was really to sort of send a signal that the capital management dynamics and the processes we go through evolve -- have evolved. So it's not just purely a fully franked dividend returned to shareholders. We can also do other things. And so we've sort of, on a very small amount of money, I think, in the context of this company, if it was $200 million that we were going to do a buyback, I'd say, okay, that's a good discussion to have at [ $20 ]. I think it's really just showing that we have spare capital. This is an opportunity that we put in place. Now what I would say about the opportunity we put in place is that the buyback is over 12 months. So we can take our time, and we will take our time. We can take our time. We can turn it off if something better comes along. We can reduce whatever we said we were going to do from whether it's [ $20 ] or what we do $10 million. And frankly, at this share price, it's around 1 million shares. So I want to put it in context in terms of size and scale. It's not a reflection of what we think about price. It's more a reflection of how we wanted to telegraph that we are capable of actually managing different capital management outcomes, but we do keep the flexibility of being able to amend this thing anytime over the course of 12 months as we seek to execute. And again, if anything better comes up, given our balance sheet strength and our share price and everything else. I'm sure we've got a lot of funding capacity. I've got no doubt about that, but we can amend the journey we're on. Yes. Sure. I understand. Yes. I understand. It's okay. Any other questions? Can we leave that to you then? That's okay. Yes, great. Great. Okay. If -- as there are no further questions, we will now move to the next item of business. The rem report. We now move to Resolution 1, which is the nonbinding and advisory vote on the company's remuneration report for the year ending 31 December 2025. The remuneration report is set out on the pages 50 to 66 of the 2025 annual report. After the resolution has been moved, there will be time for comments and questions on the remuneration report. I now move to the remuneration report of the company for the year ended 31 December 2025 be adopted. I will now address any questions relating to this item of business. Are there any questions? Please?

Thanks, Howard Coleman. Certainly, I'll be voting in favor of the remuneration report, and I expect that's the case with pretty much all Team Invest members. There is one thing though that we're not all that excited about. And that is that you use as part of the LTI, a relative TSR. And I think that's a little bit like asking Scott and his team to run a marathon where they can't see the other runners in the marathon and until after the marathon has ended and then they say, where did we come. And that's what relative TSR is like. Scott can't affect how the other -- nor can his team affect how the other companies are going to be doing is completely outside the control management. So how to incentivize this management or motivates them to do anything. I have no idea. Earnings per share, obviously, does. And I would strongly suggest that we look for either increasing the earnings per share component and are they getting rid of or reducing the relative TSR or replacing it with a measure that's more in the control of management so that we're driving home from work or however they get home in the evening, they can think, maybe if I do so and so a bit better, I'll qualify for a bigger bonus, but I just don't see how any management team and I've been in both positions in management and setting these up for management, can possibly be motivated about something that they can't see are they doing.

Good question. Can I answer that?

Sure.

So I'll say a couple of things, if I may, because it is probably the topic that I -- so in the last month, I've got a round of institutional investors to have the one-on-ones and various topics always come up. There always positive sort of meetings. But we do talk about the 75-25 split. And funnily enough, as you're shifting more towards EPS, some of the institutions actually would like it to sort of come the other way and be more like 50-50. Sure, sure, sure. We did do a little bit of external expert analysis of this at the end of last year. So we had -- I think it was Korn Ferry did some analysis for us. And it was quite an interesting sort of outcome because it didn't really give you a definitive response as to where the market is. They were sort of saying, listen, it can be 50-50, it could be 75-25. You've got to make the choice. And so there's not a clear and definitive sort of outcome here. I've got institutions on one side, Howard you on one side? Korn Ferry sort of giving us analysis that sort of seems to be sort of not quite as definitive as we might have anticipated. I will say that 2 years ago, when we did the LTI outcomes, you might remember that the outcome that was triggered. It was not the EPS, but management wouldn't have got anything, but for the TSR -- the TSR hurdle component getting hit, so they got 25% of the LTI. So whilst I sort of think we would be open to the notion of talking about 50-50, I think from a shareholder perspective, I think there is still a desire to sort of want to have management sort of linked to an outperformance measure on a shareholder basis, on a shareholder return basis. So I don't know if that's a muddled sort of answer. We've had a long and exhausted sort of discussion about whether we sort of turn that to a 50-50, whether we keep it at 25-75. We haven't gone to 100% because it gives no option other than an EPS outcome. And in some years gone by, the EPS outcome was a no.

Yes, it may be worth looking for another measure. In terms of the TSR, why the remuneration consultants recommend relative TSR is if we were using EPS only, you wouldn't be paying them. So as Charlie Munger said, show me the incentive, and I'll tell you the outcome. So of course, remuneration consultants would like to add as much complexity as possible and preferably the kind of complexity that the Board themselves couldn't easily work out.

Very smart Board, Howard. Very smart Board.

Yes, it's a very smart Board. I see we have everything from a fellow astrophysicists to accounting and so I'm sure people could, but the advantage to the remuneration consultants is the more complex, they make it, the more likely you are to hire them and pay for their services. So I think you always need to take the comments of remuneration consultants with a bit of pinch of salt, looking at what's in it for them. So as I say, we're not going to -- and I don't think any of our Team Invest members intending basically against the remuneration report. But if you can find another measure that Scott and his team can be properly motivated by and responsible for and can feel they can affect the outcome rather than relative TSR, we'd be much happier.

Okay. Thanks, Howard. I'll take that on notice. As it relates to the remuneration report, are there other questions in the audience? Okay. As there are no further questions, I will now put the resolution to the meeting. The direct votes and proxy votes received for this resolution are shown on this slide. [Voting]

I will now move to Resolution 2, which is for the election of Mr. Paul Rogan as a Director. Paul was appointed by the Board as a Non-executive Director effective 2nd of March 2026. Under the company's constitution, Paul is required to retire at this meeting and being eligible, offers himself for election by shareholders. Information relevant to Paul's proposed election is set out in the notice of meeting. And I note that each of the other directors supports Paul's election. Paul will now say a few words. Paul?

Thank you, John, and good morning, everybody. It's a privilege for me this morning to have the opportunity to speak to you as I stand for election as a Director of your company. For those of you I haven't yet had the pleasure of meeting, I bring over 25 years' experience as a senior executive and Board across major Australian financial institutions and growth-focused businesses. Smartgroup has really impressed me as an organization with significant growth potential, as Scott has outlined in his presentation, having a large client footprint, leading market positions, strong brands and an ambition that resonates with me bringing smarter benefits for a smarter tomorrow. Given the recent positive policy outcomes with relation to the electric car discount and the large addressable market that we have, I see enormous opportunity to leverage our strengths, further embrace digital disruption, including AI and continue enhancing the value that we -- and the experience that we offer to our clients, their employees and our shareholders alike. As John mentioned in his preamble, I currently sit on ASX-listed HUB24 as the Chairman. I also Chair a nonbank reverse mortgage provider called Household Capital, and I sit on ASX-listed IDP Education and Raiz Invest. I understand that given my current portfolio, some shareholders or their proxy advisers have asked whether or questioned my capacity to serve and carry out my responsibilities at Smartgroup. Consistent with my commitment to the Board at the time of my appointment, I'm currently in the process of reshaping my Board portfolio and I anticipate making some further announcements on that in coming months. My commitment to you, though, as shareholders is to provide strong oversight, strategic clarity, culture of transparency and accountability. I'm very much looking forward to deepening my knowledge of the business and the markets within which we operate. I'm energized by the opportunity to work closely with my Board colleagues. Scott and his talented executive team, as we guide Smartgroup through its next chapter. Thank you for your continued support as shareholders of the Smartgroup, and if elected, I will serve with dedication, integrity and a clear focus on shareholder value creation.

Thank you, Paul. I have the pleasure of moving that Mr. Paul Rogan, who was appointed as a Director under Article 10.7(a) of the company's constitution, and being eligible, offers himself for election to be elected as a director of the company. I will now address any questions relating to this item of business. Are there any questions? Okay. As there are no further questions, I will now put the resolution to the meeting. The direct votes and proxy votes received for this resolution as shown on this slide. [Voting]

We'll now move to Resolution 3. As this resolution concerns my own reelection as a director, I will ask Anne McDonald, the Chair of the Audit and Risk Committee, to assume the chair for this item of business.

Thank you, John, and good morning, ladies and gentlemen. John Prendiville retires at this meeting in accordance with the company's constitution and, being eligible, offers himself for reelection. Information relevant to John's proposed reelection is set out in the notice of meeting. And I note that each of the other directors supports John's reelection. But I'll now ask John to say a few words.

Thanks, Anne. Good morning, ladies and gentlemen. I joined the Board of Smartgroup in 2014, just prior to listing on the stock exchange. I'm very pleased to be here today standing for reelection as a Director of Smartgroup. I bring a background in finance, strategy and management. Prior to joining Smartgroup, I spent nearly 20 years at Macquarie Bank, where I was an executive director and a senior executive and global head of one of the investment banking groups. I recently retired as a Non-executive Director from the Board of Notre Dame University Australia and from the role of Chair of the Board of Wilsons Advisory, an institutional grade stock broker and Private Wealth Advisory Group, following its merger with Canaccord Genuity Australia. In March 2026, I joined the Board of St John of God Hospital Health Australia, and I am on the Finance and Investment Committee of that organization. I'm also on the Boards and various subcommittees for a range of private companies. In addition to being on the Board of Smartgroup, I am the chair and a member of the various subcommittees of the Board. My experience as a corporate finance specialist and the various other roles listed earlier have been invaluable to me in my position and contribution as Chairman of the Board and as a member of those committees. I have very much enjoyed my role here at Smartgroup, and while this will be my last nomination for the Board role, I look forward to continuing to realize the full potential of the company for us all. Thank you.

Thanks, John. I now have pleasure in moving that Mr. John Prendiville, who retires in accordance with Article 10.3(a) of the company's constitution, and being eligible, offers himself for reelection, be reelected as a Director of the company. I'm now happy to take any questions relating to this item of business. Are there any questions? Thank you. As there are no questions, I will now put the resolution to the meeting. The direct votes and proxy votes received for this resolution are shown on this slide. [Voting]

Thank you. I'll now pass back to John.

We'll now move to Resolution 4, which is for the -- apologies. Thanks, Anne. Thanks for that. We'll now move to Resolution 4, which is for the reelection of Ms. Deborah Homewood as a director. Deborah retires at this meeting in accordance with the company's constitution and, being eligible, offers herself for reelection. Information relevant to Deborah's proposed reelection is set out in the notice of meeting. And I note that each of the directors supports Deborah's reelection. Deborah will now say a few words.

Thank you, John. Good morning, ladies and gentlemen. I joined the Board of Smartgroup in May 2016, and I'm very pleased to be here today standing for reelection. I have a health strategy and management background with over 25 years in the telecommunications and IT sectors. I was most recently interim CEO of AusDN, the only employee-led network in Australia focused on the inclusion of people with disability. Prior to that appointment, I was the Managing Director of MAX Solutions for over 10 years. MAX Solutions, now Angus Knight Group, is a health training and human services company that provides services on behalf of federal and state governments, including welfare to work and NDIS programs, Australia wide. Additionally, they provide health services to private organizations, particularly focused on health outcomes for their employees. In addition to being on the Board of Smartgroup, I'm the Chair of the HR Remuneration Committee and a member of the ESG and Audit and Risk Committees. I'm a member of Chief Executive Women and have previously served on their Board as Chair of the Membership Committee and was appointed as an Advocate for the G20 EMPOWER Group at the invitation of the Department of Prime Minister and Cabinet in 2022 for a 12-month period. Additionally, I'm Chair of Inherited Cancers Australia as a national charity dedicated supporting families at risk of inherited cancers. In my work at Smartgroup, I have drawn on much of my previous professional experience, particularly in the areas of strategy, culture and leadership. It is both a privilege and a responsibility to serve you as a Director of Smartgroup. Thank you, John.

Thank you, Deborah. I have the pleasure of moving that Ms. Deborah Homewood, who retires in accordance with Article 10.3(a) of the company's constitution and, being eligible, offers herself for reelection, be reelected as a Director of the company. I will now address any questions relating to this item business. Are there any questions? As there are no further questions, I will now put the resolution to the meeting. The direct votes and proxy votes received for this resolution are shown on this slide. [Voting]

We will now move to Resolution 5, which is for the approval to issue shares under the company's loan funded share plan to Mr. Scott Wharton, the company's Managing Director and CEO. Detailed information about the proposed issue of shares, including a summary of the terms of the loan funded share plan, is set out in the explanatory notes to the notice of meeting, as required by the ASX Listing Rules. In summary, if shareholders approve Resolution 5, the company will issue to Scott 753,086 ordinary shares, which will vest at the end of a 3-year vesting period, ending on the 31st of December 2028, subject to the satisfaction of the performance hurdles and other vesting conditions described in the explanatory notes to the notice of meeting. The performance hurdles are based on total shareholder return and earnings per share over the 3-year vesting period, with the vesting of 75% of the shares tested against the earnings per share hurdle and the remaining 25% tested against the total shareholder return hurdle. Any shares that do not vest at the end of the period -- at the end of the vesting period will be forfeited. If shareholders approve Resolution 5, then the company will also loan Scott an amount equal to the total issue price of all the shares to be issued to him with the issue price taken to be the 20-day VWAP, or volume weighted average price of shares, traded up on the ASX until today. Scott cannot sell any shares at vest at the end of the vesting period until any outstanding balance on that loan is repaid. The Board believes that the performance hurdles strongly align Scott's ability to derive any value from the shares with the company's financial performance and the interest of our shareholders. I now move Resolution 5 as set out in the notice of meeting. I will now address any questions relating to this item of business. Are there any questions? As there are no questions, I will now put the resolution to the meeting. The direct votes and proxy votes received for this resolution are shown on this slide. [Voting]

We will now move to Resolution 6, which is for the approval to issue 45,911 performance rights under the company's short-term incentive plan to Mr. Scott Wharton, the company's Managing Director and CEO. Detailed information about the proposed issue of performance rights including a summary of the terms of the short-term incentive plan as set out in the explanatory notes to the Notice of Meeting, as required by the ASX listing rules. In summary, if shareholders approve Resolution 6, then the company will issue to Scott performance rights having a value of $381,000, comprising 50% of Scott's maximum potential short-term incentive entitlement for the 2026 financial year, of course, subject to Scott meeting KPIs set by the Board. The achievement of these KPIs will be assessed by the Board at the end of the year. Details of the KPIs and the assessed achievement of each of them will then be reported in the company's remuneration report. I now move Resolution 6 as set out in the notice of meeting. And I will now address any questions relating to this item of business. Are there any questions? Okay. As there are no questions, I will now put the resolution to the meeting. The direct votes and proxy votes received for this resolution are shown on this slide. [Voting]

That ends the formal part of the Annual General Meeting, and I now declare the meeting closed. The poll will remain open for a further 5 minutes. With all shareholders and proxy holders present, please now complete your yellow voting card and place them in the voting boxes being circulated by representatives of MUFG Corporate Markets. The results of the meeting will be announced on the ASX company announcements' platform and will be available on the company's website as soon as possible after the close of the meeting. Thank you for participating in our meeting today. And I know that the Smartgroup Board and management look forward to your continuing support in the coming year. Shareholders here at the venue are invited to join the Board for light refreshments in the foyer. Thank you.