Sonic Healthcare Limited (SHL) Earnings Call Transcript & Summary

Well, good morning, ladies and gentlemen, and welcome to Sonic Healthcare Limited's 2022 Annual General Meeting. And I'm Mark Compton. As Chairman of Sonic's Board of Directors, I will chair today's meeting. And isn't it great? I acknowledge we've got a number of people online, it's a hybrid meeting, but it's also lovely to see people in the room here at the InterContinental in Sydney and see shareholders in 3 dimensions again after a hiatus of 3 years. So lovely to see you back. Before we start the meeting, I'm aware that we are spread across different parts of the country and possibly the world today. And I'd like to acknowledge the Gadigal people of the Eora Nation, the traditional custodians of the land where I'm currently standing and pay my respects to their elders, past, present and emerging. I've been advised that there is a quorum present, and therefore, declare the meeting open. And if you can just bear with me now because we need to go through some housekeeping because of a hybrid meeting, there are various layers of complexity. So there's a bit to cover. So be patient and -- but for those particularly online, this will be important for you. This is Sonic's first hybrid AGM, providing the opportunity for shareholders, proxies and guests to attend in person or participate via our online meeting platform. Online attendees can watch a live webcast of the meeting and have the ability to ask questions and submit votes in real time. We expect the meeting to proceed smoothly but would appreciate your understanding of technological issues do occur. I would like to welcome my fellow Board members attending the meeting today, albeit one is attending virtually. Our Chief Executive, Dr. Colin Goldschmidt; our CFO, Mr. Chris Wilks is on apology today. Chris has consented to me disclosing that he is undergoing some medical treatment for a kidney stone and hence unable to join us today. We wish Chris well for a full and speedy recovery; Professor Christine Bennett; Professor Suzanne Crowe. Dr. Philip Dubois; Dr. Katharine Giles; Mr. Neville Mitchell; and Mr. Lou Panaccio. Lou has also consented to me disclosing -- that he is attending virtually as he's had some recent surgical treatment that prevents him from traveling for a few weeks. We send Lou our very best wishes for a full and speedy recovery; Ms. Kate Spargo; and Dr. Jane Wilson. Also present is the company's Secretary, Mr. Paul Alexander, and Paul is also the Deputy Chief Financial Officer of the company. For our online attendees, whilst you have just seen a photo of the directors, you will be able to see each of them in real time if they are asked to speak as part of the meeting. I note that Brett Entwistle, a partner from PricewaterhouseCoopers, our auditor, is also in attendance. For our attendees who are here in person, in accordance with the admission card you would have received at registration today, only holders of green and pink admission cards are entitled to speak and vote at the meeting. Shareholders and proxy holders attending online can submit written questions through the online meeting platform at any time during the meeting. [Operator Instructions] Questions submitted online during the meeting will be read out by the company's secretary, Mr. Alexander. And Paul will identify the shareholder who has asked each question unless you indicate in your question that you do not wish to be named. If the same or very similar question is asked by more than one shareholder, we might combine these and will endeavor to identify all relevant shareholders, although this may become difficult if there is a high volume of questions. Questions submitted online will be addressed at the relevant time in the meeting. Questions are limited to 2,000 characters in the question field. However, if questions are particularly lengthy, we may need to summarize them in the interest of time. For those shareholders who wish to ask a verbal question, an audio questions facility is available during this meeting. [Operator Instructions] Depending on the question asked, we will direct it to the appropriate director or to the auditor to respond. We've received a number of questions from shareholders and the Australian Shareholders Association in advance of the meeting, which we will endeavor to address at the appropriate point during the course of the meeting. Consistent with best practice, all items of business will be decided on a poll. I will open the polls now and keep them open so that you can vote at any time during the meeting. If you are eligible to vote and have logged into the online platform, select the Vote icon at the top of your device screen. Once you click this, the resolutions will appear on your screen, and you can select a voting option. There is no need to hit Submit or the Enter button as the vote is automatically recorded. You'll receive a vote confirmation notification on your screen. You do have the ability to change your vote during the meeting until I declare the polls closed. [ Maria Joplich ] from Computershare will act as the returning officer for the purposes of conducting and determining the results of the poll, the results of which will be announced to the ASX later today. The voting icon should soon appear if it hasn't already. Please submit your votes at any time. Following questions and discussion, I'll provide a warning before declaring the poll for all resolutions closed to allow sufficient time for votes to be submitted. If you're having any difficulties in locating the voting icon, please refer to the detailed guide available on Sonic's website. That's all the housekeeping matters now. He says with great relief. Now I'll move on to the matters of the meeting. The minutes of the company's last Annual General Meeting held on 18 November 2021 are tabled on the table to my left and available for inspection by shareholders, and I will take these minutes as read. The 2022 financial year was another outstanding year for Sonic Healthcare, achieving record revenues and profit whilst continuing to protect the communities we serve by providing COVID-19 pandemic-related testing and immunizations in addition to our normal essential health care services. In total, Sonic's 41,000 people provided over 140 million patient consultations in the year across our 7 countries of operation. That's about 400,000 per day -- rather throughout the year. It is safe to say that we have further progressed our ambition to be and to be seen by all health care stakeholders, including governments, as an integral partner in delivering high-quality, safe, reliable and cost-effective health care services. The combination of pandemic-related services and the strength of our base business enabled Sonic to report a net profit of the year -- for the year, rather, of $1.5 billion on revenues of $9.3 billion, increases of 11% and 7%, respectively. We continued our progressive dividend policy, rewarding shareholders with a 10% increase over the previous year to $1 per share for the year, a significant milestone for the company. From the payment of our inaugural dividend of $0.02 per share in 1994, the annual dividend per share has never decreased. Thanks to the strong performance of our Australian operations, both dividends for the year were fully franked. Strong cash generation in the financial year reduced net interest-bearing debt by $128 million, even after we invested $628 million in growing the company through acquisitions and joint ventures. We also commenced our first-ever buyback in the second half and by 30 June 2022, had bought $294 million of stock on market out of a 12-month target of up to $500 million. To date, we have acquired $425 million of stock. With record-low gearing, a strong balance sheet, experienced and dedicated management teams and Sonic's unique medical leadership culture that provides very significant competitive advantage, the company is well set for further growth through business acquisitions, other opportunities and ongoing organic growth, continuing our strategy that has proven successful over 3 decades. Sonic's Board continues to embrace development, renewal and diversity in its own composition as well as within the company more broadly. And we are delighted that Professor Christine Bennett, AO and Dr. Katharine Giles, have recently joined the Board as independent nonexecutive directors. Christine and Kath are standing for election today, and you will have an opportunity to hear from them and ask them questions shortly. As previously announced, Dr. Philip Dubois and Dr. Jane Wilson AO will retire as directors at the conclusion of this meeting. Philip and Jane has served Sonic extremely well and faithfully over many years. We highly value their contribution to the Board and sincerely thank them on behalf of all shareholders for the work and expertise they have brought to bear for the benefit of all of them we serve. Philip was appointed to the Board in 2001, following the acquisition of Queensland X-Ray, Sonic's largest radiology practice, where he was the practice leader. His presence on the Board played an important role in consolidating Sonic's radiology businesses into a cohesive group. He retired from his executive role as CEO of Sonic's Radiology division on 30 June 2020, having facilitated seamless succession from both his previous role as CEO of Queensland X-Ray and then the CEO of Sonic Radiology. Jane is a registered medical practitioner, joined the Sonic Board as a Non-Executive Director in 2010, bringing broad experience in medical services, governance and capital markets. Her role as Chair of the Risk Management Committee since 2010 has been invaluable, never more so than during the COVID-19 pandemic. On behalf of the Board and management of Sonic Healthcare and all shareholders, I wish Philip and Jane the very best for the future and sincerely thank them for their leadership and sage counsel over 21 and 12 years, respectively. Thank you both. A further significant development to the Board's governance structure during the year was the appointment of Professor Susanne Crowe, AO to the Risk Management Committee of the Board, enriching the committee with a specialist clinical and other expertise and experience. Following today's AGM, Sonic's Board is expected to comprise 7 independent directors, plus 2 executive directors being the Chief Executive Officer and the Chief Financial Officer, including a pathologist and 3 other medical practitioners in keeping with the company's medical leadership culture. The Board's current gender diversity objective will also be satisfied with 44% of directors being 57% of nonexecutive directors being female. I note that Sonic's 2022 sustainability report is now available on Sonic's website. This publication is the next evolution of the corporate responsibility reports we have prepared in previous years. The document provides a compelling summary of Sonic Healthcare's efforts and achievements in ESG initiatives. I highly recommend that all our shareholders and other stakeholders take time to read it. There is much in the document that will be of interest, much to be proud of the shareholders, and it gives a good sense of plans for ongoing action on ESG matters. This year's sustainability report has added import as it describes the formal sustainability, governance and management structures that have been established in the last year at Board, executive and operational levels and details the company's material sustainability topics, and net-zero strategy as determined by the new Sonic Sustainability Steering Committee. The report also describes the ways in which Sonic continues to care for its people, the environment, its own communities and communities in acute need. Colin will provide more information on these topics during his presentation. Sonic's standing as a socially responsible company continues to be recognized through ongoing inclusion in the FTSE4Good Index series, the FTSE4Good Australia 30 Index and by other external parties. In summary, 2022 has been a year of great achievement and development for Sonic Healthcare. On behalf of the Board, I thank each and every Sonic staff member for their courage, dedication, expertise and flexibility and for the exemplary way in which they assist our patients, our referring physicians and other stakeholders every day. I add my congratulations and thanks to the leaders, including the directors, in Sonic for the exemplary manner in which they bring to life every day the culture of medical leadership, which is the key driver of the clinical and financial success of this great Australian company. I also thank you, our shareholders, for your continuing support of Sonic Healthcare. I will now use this opportunity to answer a question that was raised prior to the meeting. And this is a question from Mr. Brian Rathbone, a shareholder, and also incorporates a question that was raised by the Australian Shareholders Association. And Mr. Rathbone's question reads as this: our Chief Executive, Dr. Colin Goldschmidt, has been an outstanding builder and leader of Sonic Healthcare for some years. He has built an international federation of businesses. My concern is that there will come a time when Dr. Goldschmidt will no longer lead our company. And as each year goes by, the need to identify his replacement becomes more urgent. Does the Board have in place a comprehensive plan for the inevitable time when a new Chief Executive is appointed? I would suggest that not only does there need to be someone who has confidence to run this large international business, but also will have the respect and confidence of the leaders of the Federated businesses. And as I mentioned, I note that the Australian Shareholders' Association has asked a similar question. So if I can respond to these questions collectively. Firstly, the Board -- shareholders should be comforted and know that the Board does have conversations and plans in place around succession and a process to run through. We discuss those with -- amongst the nonexecutives and also, of course, discuss those with Dr. Goldschmidt and the other key executives. Secondly, to say that there are no near- or medium-term plans on our part or Dr. Goldschmidt's for any forthcoming retirement. I often say to people want I'm asked this question, Colin turns up to work every day with the energy, passion and enthusiasm as if it's his first day on the job. And that's true. As the lawyers would say, it also has the benefit of being true. And I think that, that energy and passion and enthusiasm is reflected not only in the way that he leads the company, but also in bringing fresh and new ideas about the way the company can grow and advance and new opportunities. And so whatever that's happening and whatever he's happy, then we're happy and shareholders will be happy, I think. But that said, we need to plan in for succession in 2 ways. One is emergent. And if I had some wood detach and if I could both feet off the ground at this point, I would do so. But sometimes things happen where you need to move quickly, and of course, in planned succession. And certainly, the Board has looked very carefully at that. I'll take Mr. Rathbone's point, as does all the Board, about cultural leadership in this culturally very strong organization, values-driven organization that the most likely candidates for examination when it comes time to succeed Dr. Goldschmidt, whatever time that is in the future, and most likely to be from within the company who understand the culture and are respected within the business and so on. It doesn't completely rule out looking outside the business, but most likely, that comes from inside and there are good candidates there, I think, for that purpose. So plans are there. Consideration is given. We don't talk about it every day. Otherwise, that will send the wrong message that we're trying to edge the CEO close to the window, and that's certainly not the case. But we do have that in hand, and I would like shareholders to be confident by that response. I'd now invite -- if there are no more questions on that point that I can see, then I would invite Dr. Goldschmidt, our CEO, Managing Director, to present a more detailed overview of the company. Thanks, Colin. I might involve -- invite the directors up here if they want to go to the front row that will save them getting a quick neck turnaround looking at the screen. Thank you very much.

Thank you very much, Mark, and good morning and good day to everyone in the audience and online. It's a great pleasure for me to be presenting at today's Annual General Meeting, an update on the financial year 2022 that's passed and also an update on the more recent 4 months. Just the headlines that we issued with our full year results, this was in August, it was a record year for Sonic Healthcare with revenues up above $9 billion for the year and profit up 11% at almost $3 billion. And the growth that you see there was very much driven by the COVID testing that Sonic Healthcare has risen to the occasion to achieve right around the world. We should always remember this was not just Australia. We were integrally involved in the pandemic right around the world. Our capital management looks very strong as a result of these record results. And as Mark mentioned, we hit a milestone with a $1 per share dividend for the year. If we look at the mix of our business around the world, this is the pie chart that we show most -- every year, you'll see that we have 3 big divisions. All 3 of these are now in excess of $2 billion per annum, quite incredible. And of course, this is a reflection of COVID revenue in the year. Then we have 2 medium-sized divisions. That's the U.K. and Switzerland. And of course, a growing radiology business and primary care over here as well. So the gray segments are the non-pathology segments within this pie chart. And I'm going to show you a little bit later. When you look at this pie chart, that -- about 2/3 of our revenue is now overseas, international, 1/3 Australia. And if you just look at pathology, it's actually 3/4 overseas, 1/4 Australia. And of course, because of the bigger markets overseas, we expect that trend to continue. So we will always be quintessentially an Australian company, but most of our business, hopefully, will continue to grow overseas faster than here. Just on the revenue, and we won't go into all that text, but rather, if I can point you to this chart, you get a good idea of what's happened through the pandemic. So the dark blue is what we call our base business. And of course, this is a change for us that we're splitting our revenue into base business and COVID business. And we do that because we think the COVID revenue is going to go away, and it's an extraordinary increase that occurred. So the ceres color is the COVID testing revenue right around the world, I'll just say again. And over here in the financial year 2020, when the pandemic began in March 2020, we had a little bit of COVID testing only through to June 30 that year. But then look what happened after that. You had 2 years in excess of $2 billion of revenue each. And then looking at the base business, and if I could draw your attention to this dotted line because it starts with the 2022 base business level, you will see that it has maintained our strength through the pandemic. We were very pleased to see this because in the very early stages of the pandemic, I'll go back to the 2020 year, you'll see that the base business actually fell off a little bit. And that's because in the first months of the pandemic, everyone -- it was shock horror right around the world. Nobody went to see their doctors. And therefore, there was no pathology testing, no radiology and no primary care. And that did change as we kind of accommodated to the pandemic. And so in the subsequent years, base business tended to grow and has continued to do that. And we're seeing an acceleration of that base business growth as the pandemic recedes, and I'll mention that in a second as well. This chart shows our full revenue chart since the very beginning. You can't even see what these were back here, 1988. So this is since the very beginning of Sonic Healthcare. It started off with revenues to something like $20 million. So we're now at $9 billion, just to give you a sense of the scale. But the reason to show this chart is not just to give you a sense of the span of the history. But to look at the last 2 years and how they've jumped up in relation to the steady revenue growth over a long period of time. So these are abnormal years. And we certainly expect as the pandemic goes away, that 2023 is not going to jump up a whole lot higher again. But I think the market expects that, and hopefully, all shareholders understand that as well. You also get an idea here of the split between the Australian business and the overseas offshore business, which I mentioned a minute ago. I'm not going to spend much time on the dividends, but we were very proud about this because like our revenue, like our profit, Sonic Healthcare has become quite a predictable company. And we see that as an asset, an asset for shareholders, asset for all our staff as well. And if you look at the dividend history, again, going back to the first time we paid a dividend, not the beginning of Sonic because we only paid that maiden dividend in 1994. It was a $0.02 dividend. It has never gone backwards since. I think we can call that a progressive dividend history. It's certainly nonregressive but something we're quite proud of. Now over the last 2 years, because we became so involved in pandemic management, we were able to do a lot in terms of our capital management. And the first thing that you'll see from this chart is that our net interest-bearing debt has gone down dramatically. So you're talking from $2.3 billion down to $812 million. And so additional earnings that came into Sonic have been plowed back into the company, which strengthens us for future growth. So it's a reinvestment strategy. And where we are left now because we couldn't predict what was going to happen with interest rates, we're in a very fortunate position that all our debt essentially is now fixed term and long term. So we do not have exposure to the rising interest rates that many companies around the world are struggling with right now. So our gearing is at record low levels. And as Mark mentioned, we're also participating in a share buyback. We've also made serious acquisitions over this period, and we're left with headroom of something like $1.5 billion, very well placed for expansion from here on into the future. And this chart, which we did put out with our full year results, just gives you a sense of -- this is our debt cover, which is our net debt to EBITDA, how it's fallen from a long-term average of around 2.5x down to almost 0. I think this is a very positive thing in the current environment. But of course, we want to grow, and we're going to be using this strong balance sheet to take Sonic's growth forward at acquisition level very significantly. Now don't get alarmed by this slide. It's very busy, and you don't need to worry about all these numbers. But this is the trading update that we are releasing today covering the 4 months to 31 October of this year. And what I might do is just take you through the main numbers here. First of all, it shows that in the corresponding period last year, our COVID revenue has fallen quite significantly, as everyone has expected. So as the pandemic has receded, so the PCR and associated testing has reduced. If you look at our base business revenue, it's actually gone up against last year, 6.7% and up 8.5% against pre-pandemic levels. We like to measure everything against pre-pandemic levels when it comes to base business because stuffs happened in between, and we want to be sure that we're doing okay if we try and remove the noise of all the COVID testing in these numbers. If we look at the next number, and that's the total revenue and by the way, I'm hoping that very soon, we'll be able to stop separating these numbers because with ongoing low-level COVID testing, that's going to become part of our normal business, and we will call that base business. The whole thing will be back to one number of revenue. But we do this because it is important that we split them up. But if you look at our total revenue, yes, it is down against last year because COVID revenue is down but up very significantly against pre-pandemic levels. And bear in mind that this does include some residual COVID revenue that we're still doing. Then moving on to our earnings. Earnings are down against last year, obviously, because COVID revenue has fallen. But against pre-pandemic levels, significantly up. And very pleasingly, if you look at our EBITDA margin, against pre-pandemic levels, it's up by 200 basis points. That's overstating it a bit, again, because we now have COVID testing involved. But the question is if the COVID levels stay as they are, this is a great result because we now have a new virus around and a new set of tests that go with that virus that are going to be here into the future. Again, I'm only going to point you to the chart here. So this is the same sort of chart I showed you a moment ago on an annual basis, but this one is for corresponding 4-month periods -- four 4-month periods. And the pattern is very similar. First of all, looking at the base business, again, you will see that it's grown against last year and very significantly against pre-pandemic levels. And you can see here how our COVID revenue, this is just for 4 months, has fallen. And if I go to the next slide, it puts it very, very clearly the last 4 months, including October, how we've gone from $94.6 million worldwide down to $57.7 million. An interesting side issue here is that it looks like it's stabilizing out. People are asking us, so what do you think is going to happen with COVID revenue? And of course, nobody knows for sure. We can't say. But we're looking for patterns because the one thing we do believe is that there will be what we call a residual COVID revenue that will continue long term. But exactly where that level is, we can't be certain. So it's actually gone up a little bit in October versus September, and we'll keep tracking this obviously because it will become a significant addition to our big menu of tests that we run right now. So we also issued an outlook for the year with our August results. And the first thing we did tell the market is that we were not really able to give our normal guidance. And the reason for that was, as the year before, is that COVID just introduced so much unpredictability that it would be an unreliable guidance if we were to put it out. We expect our base business to continue growing and even perhaps at a faster rate. The underlying drivers for growth in pathology, radiology are very much still there. This is aging of population, new tests, new technologies, et cetera. And we -- I guess, we also believe that there will be some kind of rebound. I don't want to overstate this, but certainly during a pandemic, so much was left undone. People didn't go to their doctors. They didn't get their normal mammographies. They didn't get their normal blood tests. Elective surgery was canceled all over the place. Endoscopy centers were shut. And there hasn't been a catch-up. So there's a big concern about latent cancer sitting in populations right around the world which are undiagnosed, which would have been diagnosed if we not had the pandemic. So we are seeing this in some of our markets where, for example, histopathology, which is tissue specimens often from cancer cases, have gone up quite dramatically. And it looks like that is a rebound phenomenon from the pandemic. I've mentioned the COVID testing demand and it will be ongoing, but exactly at what level, not certain. And there's an issue that we are dealing with in Sonic, and many companies are in the same position in health care, is that to respond to the pandemic as we did in this incredible way, where our volumes went up so enormously and magnificent as the response was, we had to put on huge additional levels of infrastructure, staffing, equipment, et cetera. So in order to actually deal with the call to duty, which is how I describe it. So we ran drive-through centers. We ran additional courier runs. We had to expand our labs and buy additional equipment. All the stuff happened in very quick succession but was something very needed and very well appreciated around the world. So we're now in a transition period where the testing levels have fallen off quite dramatically, which is a good thing. We want this pandemic to go away, don't we? And we now have to actually bring all those costs down, bearing in mind, of course, that we've got to be on standby in case there is another surge and in case testing levels go up. So this is just one of the dynamics we're dealing with in all our divisions around the world. We also mentioned that we're certainly very much hoping that the progressive dividend strategy that we have will continue well into the future. So now moving beyond the numbers, there's been a lot of talk about cybersecurity of late, quite understandably. And we've put in a slide here just to provide some reassurance about how seriously Sonic takes cybersecurity and has done for such a long time. So we very much recognize that we're in an extra special position in health care dealing with millions and millions of people's private health care data. And we also recognize that looking after the integrity of that data is critical to the confidence in Sonic Healthcare. I'd like to actually let you know that we have a very highly resourced IT division around the world, including a specialized and dedicated cybersecurity division. We use state-of-the-art tools to protect and monitor systems. We have security checks in every possible area of our business, personnel, physical, operational and technical. We do internal and external penetration testing all the time. We do annual so-called NIST audits, that's the National Institute of Standards and Technology, and regular system upgrades as well. And we are certainly -- our systems are targeted not to match but to exceed our regulatory environments in all the markets in which we operate. Exciting news that we've just published Sonic's 2022 sustainability report. And I believe all shareholders have been sent a link to this fantastic document. I take my hat off to the people who were involved in putting it all together. It's a huge amount of work but something that we're very, very proud of in Sonic. It's not just the words, it's actually the deeds. This report is available online at that website. And of course, the report deals with the ESG topics: environmental, our people, communities, governance. And for the first time, we've included our goals in key areas. So for example, to achieve net zero by 2050 and to reduce our Scope 1 and 2 greenhouse emissions by 43% by the year 2030. And of course, there are goals in all these categories in terms of diversity, in terms of our community work, including the Sonic Healthcare Foundation and in terms of governance. It kind of gives me a bit of a segue to talk about, I guess, broader things in the company. And one of the first things was that these medical leadership principles were locked into place in Sonic. They were there since the beginning, but really formalized and put into this stylized form just over 20 years ago. And at that time, we included one of the pillars of company conscience. And the company conscience pillar is very much sustainability and ESG. So we believe that we wanted to be good corporate citizens from way back then, and we've been doing a lot of stuff that is now formalized into the ESG programs that all companies are involved in. We've been doing them for a long time. We've obviously upped the game quite substantially, particularly in relation to emissions. But many of the activities have been there for quite a long time. But then broadening it out a bit further, we like to talk about the Sonic difference in Sonic Healthcare, and it's very much #1 made up of medical leadership and these medical leadership principles. It's also -- we also include our core values and very much our federated structure as well. So in a sense, on this slide, you've got Sonic Healthcare on one page. This is the real -- the important elements of our culture, which is very deep seated in the organization and been there for a long time now. The one part of this that stands out -- you might be asking, well, what does this actually mean? What is medical leadership? I do get asked the question internally and certainly externally, and I just thought I'd put in 1 or 2 slides just to talk about it because it is quite interesting. So first of all, it is what it says it is. It is leadership that is medical in nature. And very importantly, it means that the CEOs and executive managers must be medically minded. That's the best way to put it. But believe it or not, the majority of health care companies around the world, the CEO and leader -- and executive leaders come from disparate industries. They come into health care and they say, "This is like any other business," and it just isn't so healthcare is complex and very different. So the way Sonic Healthcare has done it has been very, very different. Medical leadership implies that pathologists are the natural leaders in pathology or in the pathology lab and radiologists are the natural leaders in a radiology practice. And when I say this, you might say, "Well, yes, obvious," but it's not obvious. Because again, I'm going to say that the majority of pathology companies around the world do not take that view. They have pathologists in the side room. "You do what your best at." That's the words that are used, "And leave the management to us," the managers who come from disparate industries. That's a very different where to run a business. So medical leadership actually means that the business will operate like a specialist medical practice, and that's the simplest way to put it. So when you go and see a gynecologist or a dermatologist, the gynecologist is the leader of that practice. There's not even any question about it. And same with the dermatologist. And when we started Sonic Healthcare where it was much smaller, it seemed like that was the obvious thing to do. And then people said, "Well, you can't make that work with a big company or a publicly traded company." But I think today, we can say, "Definitely, you can." So I think we've got the results now. It's 30 years or whatever it is. Thank you very much. And you can run it that way in a big company and a publicly traded company. And of course, medical leadership also means that operations are prioritized towards best patient care. So that's it in a nutshell, that's medical leadership, and that's the way Sonic Healthcare runs. Now you might say, "Well, you guys are just doing this for fun or that this is CEO rattling on," not so. And if I try to summarize the outcomes of this system, number one, it drives the highest quality in health care. So when you look at this and you say, "Well, yes, pathologists are involved." And if you run it like a medical practice and your leaders understand doctors, in particular, they understand doctors, understand the doctor-patient relationship, you are going to get a better quality of health care, this simple. This model resonates with clinicians, and they are our primary customer. So they refer work to us. They look at it and they say, yes, that's -- if there's pathologists, radiologists. I know I'm going to get the best attention for my patients. It also resonates with our pathologists and radiologists. That's the way they want it. It's a professionally empowering model where a professional can actually achieve fulfillment in some way. And in fact, it resonates with all health care staff. So it's not just pathologists and radiologists. It's the lab tech, it's the sonographers, it's couriers, it's collectors, it's everyone in the organization. They prefer this model. And of course, it drives passion with people going the extra mile, and it's driven our growth over the years. Almost all our acquisitions have been companies which have said, "Yes, that's the model we've been running as a small company, and we want to join a bigger organization. We want to merge or join with you." Probably over 90% of our more than 100 acquisitions have been in that category. And very importantly, the medical leadership model has driven financial success. So when you look at this, you'll see that it actually has dealt with all 3 major stakeholders in the company, starting with our staff; then going to our customers, that's patients and clinicians; and then very importantly, shareholders, too. So all 3 shareholders have been delivered value and will continue to be offered value through this system. And if you're talking about just the one aspect of a pathologist, this is our Australian pathology division. These are all our labs in Australia. And we now are the #1 player in Australian pathology with a market share of over 40%. We now have 454 pathologists employed in Australia. And with no apology, I'm going to show you this slide mainly because I'm more involved with Douglass Hanly Moir than -- just because I'm here in Sydney, and that's -- this was the first lab in Sonic Healthcare. And when I joined Douglass Hanly Moir Pathology, there were 2 pathologists. I was #3. There's now 105. And what you see here is absolutely pathology power. This is a star-studded team. You wouldn't think that there's 105 pathologists in one pathology practice. There is no lab anywhere in Australia that even comes close to this, one organization. They might have -- they have less than half this number. But the beauty of this is that within this group, you've got super specialized people. So you've got super specialized experts in gyne, in dermatopathology and in neuropathology and in bone pathology and in lymph node pathology and in oral pathology and in microbiology and in hematology and genetic pathology, I can keep going on and on. And so we know that if a specimen hits Douglass Hanly Moir Pathology, it's going to be handled in an amazing way because you've got super specialists in this practice. Now I've put up Douglass Hanly Moir, and I don't want to play favorites in Sonic. I've got several hats. This is an example. I could show many of our other big labs around the world. There's in Australia, there's others in Germany and the U.S.A., U.K., in Switzerland, Belgium. And this is what the model has delivered. So if you're a newly graduated pathologist coming out, you just got your fellowship, this is the place to go. Why wouldn't you want to be here? So I just -- excuse me, I just got a bit of a throat -- just want to say that our pathologist numbers right around the world have been one of the critical differences that we have versus our competitors. I'm not going to show you every country. This is a map of all our labs in Germany. We are the #1 player in Germany in pathology, and we employ 341 pathologists. It's incredible. And this is the U.S.A., where we are #3. These are all our labs in the U.S.A. We employ 380 pathologists. And if you look at the world, 7 countries, 1,336 pathologists employed by Sonic Healthcare. Now we are the #3 largest -- third largest lab in the world. 2 biggest there in America: Quest and LabCorp, then come Sonic Healthcare. But by pathologist numbers, we are well and truly #1. Nobody comes even close. And if you talk about the Sonic difference, this is one, and it's a big one. It's a very important one. Again, I'll just say for all our stakeholders. I'm going to move towards the end of this presentation just by talking to you about something quite exciting, and that's our joint venture that we have formed to take our endeavors further in the field of artificial intelligence. So we've announced this previously that we've made an investment in this company, harrison.ai. We've taken a 20% stake in the business. And I'll put up the slide there. We were very attracted to this company because we've been looking for an opportunity in artificial intelligence, which is very much the new frontier in health care in general, but certainly in pathology and radiology. And why we were attracted to this particular company was, number one, the 2 gentlemen that you see in that photo, 2 brothers, Dimitry and Aengus Tran, very bright guys, wonderful gentleman. Dr. Aengus Tran is a doctor. And the way they approached artificial intelligence was kind of resonated with Sonic. It was almost a medical leadership approach. They approached it in a medical way, asked the right questions and achieved an incredible result. So when we met them, they had already achieved this. They had set up a joint venture with another radiology company and formed this JV called annalise.ai. Annalise, by the way, is a play on the word analyze. That's how they got to that name. But they literally leapfrogged the world in radiology AI by coming up with a chest X-ray product that can find 124 abnormalities in a split second. It's an incredible product. You got to see it work. It's mind blowing that you can put it up on the screen and instantly, 124 abnormalities are assessed and tells you these are they and here are potential -- possible diagnoses. They're now working on a brain CT product along the same lines, and that's now completed and will move further in radiology. So as a result of that, we formed a separate joint venture with harrison.ai that we've called franklin.ai to take our -- endeavors further in the space of pathology AI. And we're very excited about this because we're working with brilliant young minds in a field where we can offer a huge amount as part of this joint venture. So as you can imagine, Sonic has got a huge amount of data. We're very big. We go back, we keep our material for a long, long time. And we've got incredible intellect in our organization that we can offer to the joint venture, so pathologists and experience and diagnostic ability, these super specialists that I mentioned when I showed you this slide. And of course, from our side, we're going to benefit from the way these clients have approached AI in health care. Now you might be wondering about these names. I mentioned the Annalise, a play on the word analyze. Harrison, was named after the textbook Harrison's Principles of Internal Medicine, which is the bible for all medical students and doctors. It was around when I was a medical student, and it still is today. It's a book that everyone uses. And then the big question is, and I'd love to throw this open to a quiz, but I know some of the Sonic people know the answer, where on earth did this name Franklin come from. So I'll let you know that it was named after one Rosalind Franklin. Some of you in the audience might know who Rosalind Franklin is because she has been described as the unsung hero of DNA, the wronged heroine and also the forgotten heroine. And just to let you know, Rosalind Franklin was a very bright scientist working in London at King's College London in the late '40s and early 50s at the same time that Watson and Crick were working on DNA -- on the structure of DNA. And it was Rosalind Franklin's X-ray crystallographic work, especially this one, the famous Photo 51, which absolutely clinched the 3D structure of DNA. So she was the first person to actually prove the structure and allowed Watson and Crick with whom this was shared, by the way, without her knowledge. They immediately ran off because they were almost there but couldn't prove it. And it was these photos that proved the 3D structure of DNA. It showed, as you see here, that it was a double helix. And her work could actually even give more information about the dimensions of the molecule DNA and of course we go on, the rest is history so to speak because we now know the structure of DNA in very, very fine detail. And of course, it's -- the blueprint of life, the secret of life and how it completely changed everything in medicine. So that's our -- the name Franklin.ai came about. And we were, of course, involved in this decision, it was no accident. We were very keen working with the Harrison guys to come up with a suitable name. And it was just nice that we could honor Rosalind Franklin in this way. And we have a little bit of a debt of -- thanks to her, because a very small side by this whole thing. Something like 25 years ago, we ran a competition in Sonic to come up with a new logo. And the competition was actually won by 1 of our pathologists here in Sydney, and we chose that logo, the double-stranded DNA helix. And of course, it sits very proudly against Sonic Healthcare's name and you probably all seen it many times. But just to give you an idea, it sits proudly against so many of our brands. So within our federated structure, it doesn't matter. It's this icon, the double-stranded DNA, is very much the binding force around the whole of Sonic Healthcare. And of course, it's very much our aspiration that the logo, wherever it's seen, becomes associated automatically hopefully, with the highest possible quality standards in health care. So I'll leave it at that. Thank you very much. And I'm going to move to questions straightaway. Thank you.

So the first question comes from Mr. Philip Anthony Carlton and Ms. Aileen Jane Patriko. And the question is, given your statement in the 2022 annual report that future acquisitions are most likely to occur in the U.S.A. and Germany. Could you provide shareholders with an update on your pipeline of potential acquisitions as well as your views on the current market forces impacting M&A activity and valuations in these markets? So just to answer this question briefly, we are in 7 countries at the moment. As I mentioned in the presentation, in terms of acquisition and in terms of market size in Pathology Australia, is not really the major area where we will achieve acquisitions. The big 2 markets of Germany and the U.S.A. are unquestionably markets where we see a lot of growth ahead for us. So it's not a matter of Sonic having to suddenly branch out into another 7 countries. We could grow enormously because we are well established in Germany and the U.S.A. But, of course, I want to also mention the other countries like Switzerland and the U.K., where we have acquisition or contract growth opportunity very much as well. We don't exclude going into new countries, and we've mentioned this before, that we have very disciplined criteria about going into new countries, and we're conscious all the time that so many companies have failed by going into countries that are not suited their operations. So we're very mindful of not just succumbing to what appears to be a great opportunity, when someone says, there's a lot of people there, why aren't you there? It's not that simple. And I think the security of Sonic Healthcare today is very much a product of the discipline we had early on in the game about which countries we go into. We were just so conscious of the vast majority of Australian companies that failed when they went overseas. So my answer to this question is that there are many opportunities for us in the existing countries that we're in, both in pathology and radiology. And when we're talking radiology, I want to say that Australia is still an opportunity for us, because we're not at 40-plus percent of the market, so we can grow in Australia. And as you know, we're only in Australia in radiology. So 1 day, possibly, we might expand globally into radiology. The radiology space is a very positive area for us. I think we've got an outstanding division here in Australia. It's grown significantly. And the prospects for radiology are very bright going forward. Of course, there are going to be opportunities for us to go into other countries as well. So the other part of the question was the market forces affecting valuations. We don't see a big difference in valuations. The activity in M&A went down a bit through the pandemic, but it looks like it's picking up again. And so we're very much out there looking for opportunities, and we do have a very rich pipeline right now. And so hopefully, things are going to increasing momentum as we go forward. The next part of this question was specifically on the U.S. hospital laboratory groups, how are your partners strategically positioning in the post-pandemic/inflationary environment? Does this pressure on them to outsource or sell? So the question is about labs that are based as part of hospital groups in the U.S.A. And I think the answer to this question is, yes, the activity has increased, which might be a reflection of increased pressure on some of these hospital networks. And we're very much in that space as well. We have existing deals where we have bought or partnered -- we bought hospital labs or partnered with hospitals to run their labs. And so we will keep pushing that forward. The next series of questions are on cybersecurity and they come from the Australian Shareholders Association. And with respect, I'm going to not answer them specifically, because I think I've covered them all in the presentation. Then a question comes must be from the Shareholders' Association as well. What is Sonic Healthcare seeing in its various markets regarding the volume of COVID-19 tests, i.e., are they increasing, decreasing or steady? Well, they're decreasing, and we don't know where it's going, as I've mentioned in the presentation. What is the effect of rapid antigen tests, RATs, eg. are they becoming more routine and PCR testing in Sonic markets? If so, what are the implications for Sonic's COVID-related business? So you guys -- everyone probably uses RAT test in the audience. And RAT tests are used around the world. There's no question about it. The problem with them is they are not very accurate. So I guess everyone has accepted this that a RAT test can be negative and you're carrying COVID. And people are less worried about it than they were before. Has RAT test being replaced PCR testing? Probably not. But PCR testing has come down nevertheless. And as I mentioned in the presentation, it is our expectation that there'll be ongoing sustainable COVID PCR testing level. The other point I just want to raise in relation to this and what we've seen is that, on a seasonal basis with the normal coughs and colds respiratory viruses, when people get the coughs and colds, they wanted to know what they've got. And we found in the Australian winter that COVID PCR testing went up together with the other respiratory viruses. And in several of the cases, it was COVID negative and rhinovirus positive or RSV virus or one of the other viruses that give you the cough and cold. So look, we're interested to see what happens in the Northern Hemisphere winter, whether this is repeated or not. The other thing to mention here is that it's not the same in all the countries that we deal with. So there's not 1 rule that works for all in terms of PCR testing. And what we found recently, for example, in Germany is that the PCR testing went up suddenly. They say as a result of Oktoberfest, a super spread event, I think. And so things like that can actually trigger additional testing as well. Considering that Sonic is well placed for acquisition or growth, where in the world is Sonic currently thinking about any new acquisitions? Well, I think I've answered that question. What particular sectors or jurisdictions do you have in mind? Pathology, radiology, possibly parallel health care sectors, but much lower down on the list and much less likely. There's big opportunities for us in pathology and radiology. Is there any expectation that revenue and/or net profit will be lower in FY 2023? Well, as I've shown you in the slides in the presentation, revenue is likely to be lower, although we can't say. So in the first 4 month it is, as our profit numbers because COVID testing has fallen. I also mentioned that I think the market is aware of this very much so, and it's built into the market expectations that are out there. I've got to invite any further questions at this point. Firstly...

There were some additional questions from the Shareholders Association on ESG topics.

Sorry. Apologies to the Australian Shareholders' Association. I'll move straight through these. So the question is on ESG. First 1 is the Sonic Sustainability Steering Committee has been formed during the year. How is this committee constituted? Does it have board or key management personnel representatives? So we've taken a very big step with our sustainability program in general. But 1 of the key things was to set up the management structure around this. Given we got 1,500 employees around the world, our aim is very much to get sustainability inculcated all the way down to everyone. And in order to do that, we've set up a Steering Committee. That Steering Committee is chaired by myself, the CEO of Sonic Healthcare, and the other members are the CEOs of all our major divisions, which tells you immediately that we regard this as a top, top, top priority. Also on the Steering Committee are the Sustainability Director, which is Dr. Stephen Fairy, our Chief Medical Officer; and the Sustainability Manager appointed full-time for that role, Adele Richards. We have also got other global office executives on that Steering Committee, because they were involved, and I'm sorry, I won't mention your names, and they were very involved in all our sustainability efforts going back years from now. So that Steering Committee, its aim is to coordinate the activities of our ESG initiative and also to get it penetrated all the way through the company, very important. So that covers what are the main goals of the Steering Committee. The other question is, what are the main goals of the newly formed Sonic Healthcare Foundation? And for that one -- it's the 1 thing I did write down for today. Because I took this off the Sonic Healthcare Foundation's website, which I encourage people to have a look at. We've only recently launched the website, but the foundation is a very exciting new development within Sonic Healthcare, because it formalizes 1 part of our sustainability initiative, and that's our charitable giving, which we've been involved in for decades. But the purpose of the foundation is on the website and it reads as follows: Sonic Healthcare Foundation's principal activity is to utilize our health care experience, expertise and staff talents to help promote and deliver improved health outcomes through the prevention, treatment and control of disease. So those are the critical elements of the purpose of this foundation. There's much, much more detail. We've now got a Board, a very capable Board of external people on the foundation. We've set spending limits. And just as everyone knows, we have been deeply involved with about 6 hospitals in terribly disadvantaged parts of Central Africa now for a long time. We're also deeply involved with indigenous health here in Australia through the Clontarf Foundation and have been involved for a very long time as well. But we want to take it a whole lot further through this foundation, and there's going to be -- it's a global initiative, not just Australian, and it's hopefully going to involve staff contributing, if they so choose, and company matching. And it really is going to lift our charitable, I guess, endeavors very significantly into the future. Right. Questions from the floor, please.

Robert Connelly, a shareholder. Thank you very much, Dr. Goldschmidt for your passionate talk earlier about your company. Your Chairman advised us of such a passionate talk earlier on. So it seems a bit dull my 2 questions in comparison to your talk. One is on cybersecurity. Can you point to a member on your Board, who has the responsibility of cybersecurity and may we hear from them? Let me go to the second question, and then I'll -- I promise I'll sit down. You had a slide about gender equity, I think, and it had the figures 40:40:20, but I'm not quite sure what that meant.

So I'll take the second 1 first. It's 40 male, 40 female, 20 other. That's it. So can I point to somebody on the Board? It's Jane Wilson, who's Head of Risk Committee.

So I Chair the Risk Committee of Sonic health and every Risk Committee. We hear from our in-house expert on cybersecurity about that very thing. So that's why I think Dr. Goldschmidt's slide earlier on, showed you the breadth and depth of what we ask or what we go through at every meeting with our cybersecurity expert, who is an IT expert. So they present to the Risk Committee and also directly to the Board. So it is -- I think Dr. Goldschmidt pointed out very clearly that it's something that's been on our radar for a long time, long before these breaches and patient confidentiality, data management is very, very important to Sonic Healthcare. So it is taken extremely seriously.

And Dr. Jane, who would you be passing over to when you do so?

That's a matter for the Board and our Chairman may like to answer that question.

Thanks, Jane. We've had some in-house discussions about that, and we've got a Board meeting later today just to look at the committees now. We know who's been elected and who hasn't. And so we'll configure or reconvene on that later today. But it will be in very capable hands. I can guarantee that, because all the directors are very capable.

There are more questions from the floor? No. So Paul, do we then go to questions online? Your questions that have been submitted online.

Okay. So the first question that's been submitted electronically is from Steven Maine, who asks overall, how much windfall revenue did we generate over the past 2.5 years from the pandemic? And how much of that do you estimate dropped to the bottom in additional after-tax profit?

Right. So I would like to first just address that word windfall. We don't see it that way. It's very true that we were -- we became extensively involved, I'd like to call it, rising to the occasion and serving our mission as a health care company. I think windfall has a connotation to it that doesn't really fit well with the unbelievable effort made by thousands of people in Sonic over the period of time. So as you saw in the presentation, the revenue increases were roughly $2 billion per year for the 2 main years of the pandemic. That's the financial year 2021 year and 2022 year. And as you've now seen those numbers are falling off as the pandemic is abating. How much of that falls through to profit? Cannot answer at all. And the reason for this is that there might be an assumption that suddenly this revenue arrives and it's all for free. Just absolutely is not the case. The amount of expense that went into delivering the service is absolutely enormous. And we didn't stop and think about it. We just had to do our duty globally. We've tried actually to try and sift out, what are COVID costs and what are non-COVID costs, and it's actually impossible. So we do know that our margin would have lifted somewhat above our normal margin, but it's not very significant, and it's not very pertinent to our own business running to know exactly what that additional profit was or how much was specifically due to COVID that fell through.

The next question is from Mr. Peter Calerio, who asks, given the recent news of state-sponsored hacking of systems and the theft of data, how confident is Sonic that their customer, patient and employee data is safe?

Well, again, it goes to what's been presented already. Nobody can give any ironclad guarantee in this space. Absolutely, nobody in the world. All we can do as a company and especially as a health care company is do absolutely everything that we can to safeguard patient's data and to avoid the sort of attacks that have occurred in the recent past here in Australia. And we're doing that in a big, big way. That's really the only way I can answer that, Paul.

A further question, which is probably for our Chairman. This is from Steven Maine. When disclosing the outcome of voting on all resolutions today including the remuneration report, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with the scheme of arrangement? This will provide a better gauge of retails shareholder sentiment on all resolutions and was the disclosure initiative adopted by other companies this AGM season?

I thank Mr. Maine for his question, and we'll take that on notice and discuss with the Board, later Board meeting following the AGM in the normal course. So we'll discuss that this afternoon. But I appreciate the input, and we'll consider that within the Board. Thank you.

There are no more questions that have been submitted for this topic and no questions on the phone either at this point.

Excellent. Thank you very much I'll hand the meeting -- one more from the floor. Is that in order?

[indiscernible] are we covered in that respect or are we liable or something like that?

So I don't know if you can get insurance for that sort of thing, but there's a lot of discussion about whether or not to negotiate with criminals who are blackmailing companies and asking for ransoms. In the case of victims recently in Australia, they refused to pay the ransom. And I think that's generally the approach that's been advised, because paying the ransom doesn't get you a solution necessarily. But in terms of the insurance, I'm not aware that we have insurance against a ransom, no.

Yes. No, because what about the patients if their data is being released illegally? Are we liable or the company is liable?

There could be things like class actions brought, but generally, they have not been very significant. That's not been the biggest problem. The biggest problem is the sharing of data on the dark web and elsewhere. Thank you very much. I'll hand the meeting back to Mark Compton.

Thanks, Colin, for an excellent presentation and for dealing with the several questions that were there. It's now time to move on to the formal business of the meeting. The Notice of Meeting has been made available to all shareholders and is available on the Sonic's website. I propose to take that notice as read. As I mentioned before, you may submit or ask a question on any item of business via the online platform at any time during the meeting. Shareholders attending in person will also be given the opportunity to ask questions during the meeting. The poll is open on all items. Proxy results for all items of business being voted on today will be on your screen as we consider each resolution. I note that I will read out each formal resolution to the meeting. Proxies have been reviewed by our share registry, Computershare Investor Services Pty. Limited. I note that I have cast undirected proxy votes given to me as the Chairman in favor of all resolutions. The first item of business per the Notice of Meeting is the Receipt and Consideration of the Financial Report and Directors' Report, the Auditor's Report of the company and the group for the financial year ended 30 June 2022. If you have not already done so, please submit or prepared to ask any questions now regarding the financial statements and reports. And I will start with whether there are any questions from shareholders in the room on the financial statements and the relevant reports? I note for those online that there are no questions. Paul, any -- and there will be no questions submitted either via text or audio. So we'll now move on with the resolutions for today's meeting. Resolution 1 is an ordinary resolution, which reads as follows: that Professor Christine Bennett, who was appointed as a Director during the year and who retires in accordance with Article 69 of the company's constitution and being eligible, offers herself for election and is elected as a Director of the company. Christine's biography is included in your Notice of Meeting. Christine is non-executive independent director, who has a broad range of skills and deep experience in health care leadership, policy and governance. I now invite Christine to speak to you and answer any questions you may have. Thanks, Christine.

Thank you, Mark, and for the opportunity to say a few words, and good morning, everyone. It's my -- really I'm delighted and excited to be joining the Sonic Healthcare Board. As Dr. Goldschmidt outlined, Sonic is 1 of Australia's leading and most successful health care stories with an international business led from Australia, but with a global reach and the opportunity for growth as well as a deserved reputation for excellence. I've had over 40 years' experience in health and aged care. I've been a clinician as Chief Executive, a strategist, a Board member and an academic. And I've worked in the public sector, the for-profit, the not-for-profit and listed environments across pretty much the whole health ecosystem. And through those experiences and also my other interests in, for example, being the Chair of the National Health and Hospitals Reform Commission 10 years ago, I've had the experience and the opportunity to look at health systems here in great detail and indeed around the world. And I share Sonic's view and philosophy -- medical leadership philosophy and also the developed federated model. And I think that this is 1 of the unique differentiators that Dr. Goldschmidt spoke so eloquently to earlier, that delivers high-quality care and high-quality care delivers a good quality business and outcomes as well. So I from a personal point of view as a clinician, as a sometime patient and the mother of 5, I'm a regular user of Sonic's health services and have experienced firsthand quality. In fact, a few weeks ago, I had an MRI of my left ankle at 7:30 p.m. on a Sunday night. So thank you for that and for that care. Also, over the last 10 years, I've been the Dean of Medicine at Notre Dame, finished up last December. And it's been -- it was my fantastic experience to have the Douglass Hanly Moir pathologists as our academic unit. And that showed medical leadership to me in action, not only as terrific teachers of excellent content, but also as great role models of medical leaders looking to the future. And I can assure you that every graduate from Notre Dame understands the importance of clinical and anatomical pathology as a -- pathology as medical specialty. So from a personal and professional point of view, I am delighted to be involved with this company and to serve on the Board. I am committed -- deeply committed to making a contribution to the future of Sonic for our customers, the referring doctors, their patients, the health system beyond that, our people and, of course, to our shareholders. So thank you for the opportunity, and I'm happy to take questions.

Thank you very much, Christine. Any questions from the floor or the hotel for Professor Bennett. I note there are none. Paul, any questions online?

Yes. So Steven Maine has a good question. Did any of the 5 main proxy advisers, Axy, Ownership Matters, Glass-Lewis, ISS and ASA recommend a vote against any of the directors today, including Professor Bennett? As the company secretary, I can answer that myself. And the answer is no. So there were no recommendations against our directors. Will you disclose the proxy votes before the debate on each resolution? We are. And also why not disclose the proxies to the ASX with the formal addresses like others do now? So that's something we can consider for the future, and we'll do so.

And those proxy results will be available at the ASX later on today. So just as I mentioned in my opening remarks. Are there any other questions for Professor Bennett? Then the proxy results for this resolution are shown on the screen, which will be available on the screen here, but those joining by online and will be recorded in the minutes of the meeting. And again, just to reiterate, they will be released to the ASX later today. So resolution 1, the election of Professor Bennett as a Director, 285,456,411, that's 494,387 against, 1.6 million or thereabouts open and directed to the Chair a little over 900,000 and abstentions, 130,365. I will now move on to the next item of business. Resolution 2 is an ordinary resolution which reads as follows: That Dr. Katharine Giles, who was appointed as a Director during the year and who retires in accordance with Article 69 of the company's constitution and being eligible offers herself for election and is elected as a Director of the company. Kath's biography is included in Notice of Meeting. Kath is non-Executive Independent Director, who brings to the position medical expertise, investment expertise, had a strong background in medical innovation and health care technology. And I'd now invite Dr. Giles to speak to you and answer any questions you might have. Thanks, Kath.

Thank you, Mark, and good morning, everyone. It's an absolute privilege to be able to sit in front of you today and put myself forward for election by yourselves, not only in Sonic Healthcare, an Australian icon, having a developed purposeful, sustainable global business headquartered in Australia, but also as a doctor, I believe it delivers on progressing towards what's made the 2 holy grails of medical care. One, preventing disease; and two, making sure that patients get the right treatment the first time. The businesses that Sonic Healthcare operates across pathology, radiology and clinical services are fundamental to enabling medical professionals to make informed treatment decisions for patients and work towards achieving these goals. However, we still have a lot to do, more to do to achieve these goals. And I've dedicated my career to identifying and developing disruptive medical technologies that can improve the lives of patients and their families as an investor, founder and CEO. The current climate of global uncertainty is an ideal breeding ground for disruption, and I hope to bring my experience and outlook as a complement to the existing Sonic Board to future-proof and grow the business through the identification of disruptive technologies, both those that may act as threats to business as usual and also to those that could create huge opportunities in the future for growth. I strongly believe in the values of medical leadership, the commitment to service excellence through putting quality service to clinicians and patients first, and the federated model. As a referring doctor, I always choose to refer to those clinicians and providers that I trust the ones that are focused on my community. And retaining that local feel while providing the economies of scale and governance of a $1 billion business is a significant competitive advantage. So to -- also to address some of the questions in advance, whilst I had other roles in the health care space, I'm confident that I have the capacity to devote the appropriate amount of time to both business-as-usual and also and also capacity and have the full support of both Chairs of Sonic and OncoRes to undertake both roles. So in conclusion, I'm absolutely delighted to have this opportunity to join this incredible team at Sonic Healthcare. Thank you.

Thank you very much, Kath. We have 2 questions presubmitted from the Shareholder's Association. One was about time and commitment, which Kath has just answered. And the other question was how will you manage any future potential conflict of interest between Sonic and OncoRes?

Thanks, Mark. So the Sonic Board has governance processes to manage conflict of interests. I don't believe that there will be future conflicts of interest, but should they arise, then we'll deal with it by the appropriate processes.

Thanks, again. Questions from the floor here at the meeting for Dr. Giles? A note for those online, there are none. Paul, any and no other questions on the screen or audio. So the proxy results for this resolution are shown on the screen. And again, we'll be recorded in the minutes of the meeting and released to the ASX later today. So election of Dr. Katharine Giles as a non-Executive Director for 285,426,902, against 510,495, open 1.6 million or thereabouts, open to the Chair, 922,786 and abstentions 133,380. We're moving now to Resolution 3. Resolution 3 is an ordinary resolution though a non-binding resolution, which reads as follows: That the remuneration report for the financial year ended 30 June 2022 is adopted. As you are aware, remuneration reports are topical and sometimes controversial. Given the application of the 2 strikes rule, which is described in the Notice of Meeting. There will always be differences in views on individual elements of the report and the pay structures it describes, but we would ask you to consider the report as a whole as well as the performance of the company and its management team. I'll now Kate Spargo as Chair of our Remuneration and Nomination Board Committee to address questions from shareholders regarding the ordinary resolution. Kate?

Thank you, Mark, and good morning, everyone. We have had some questions from the Australian Shareholders' Association, and I'll attempt to answer those briefly. We have spent some time, Mark and myself, and Paul in discussion as we do every year with interested parties, including the Australian Shareholders Association to discuss these in some detail, so I'll try and keep this brief. One of the questions or comments from the Shareholders Association is that they seek an explanation of how LTI options over ordinary shares work, but this is not provided. The reason for this is not provided and why would these be used -- options we use in a mature company such as Sonic. My response to that is to say that options are a common instrument and Sonic shareholders effectively approve our option plan at the AGM every 3 years, and this was most recently done in 2020. And the rules of the plan are available on the website. Secondly, shareholders association talk about the STI award being 40% made up of equity and the ASA would prefer that to be 50%. We consider that given that the 40% is actually 50% of the quantitative aspect of the STI that is that, that's built on earnings, we think that 40% is appropriate. And that amount into equity discourages short-term thinking. It was commented by the STI that the body -- I'm sorry, the LTI awards were paid out despite TSR, total shareholder return being negative. That is minus 10% this year. And the ASA prefers no performance bonuses should be paid if the TSR is negative. In fact, the performance of that component of the LTI TSR is measured over a 3-year period. And over that 3-year period, of course, it was positive. So it's appropriate. STI and LTI performance hurdles are preferred by the ASA to be measured over a 4-year period. We measure our LTI over a 3-year period, and we consider that to be appropriate in the circumstances of this company. ASA comments that there's no geographical representation of the company's TSR performance against the comparator group in the annual report, and the guidelines recommend this. We can provide this somewhat consider it. But of course, as you're probably aware, the remuneration report is already fairly detailed and complex. We try to keep it readable. The ASA comments that there's no remuneration table for take-home pay in the remuneration report. It's actually quite a difficult thing. In fact, it's an impossible thing to do accurately, because, of course, it relates to the valuation of the options, which cannot be known until such time as actually they either vest or -- they either vest or not. And so take-home pay is not really a concept that can be reported on. There is sufficient information and there is detailed information about the nature of the remuneration received. And the final comment from the ASA relates to improving clarity of remuneration report in future years. We look at it every year, and we try to make sure that it's as readable as possible. But of course, there are lots of complex details in it, and we will continue to review it to make sure that we make it as readable as possible.

Thank you very much, Kate. Are there any further questions from the floor of the meeting? I note for those online, there are none. And I can just go to Paul, the Company Secretary. There are no further questions online, either, text or verbal. That being the case, the proxy results for this resolution are shown on the screen and will be recorded in the minutes and released to the ASX lab today. So the adoption of Resolution 3, the adoption of the remuneration report for 243,890,486, against 24,253,756, open 1,586,315, open to the chair, 915,403 and abstentions 16,696,004. I will now move on to the next item of the business Resolution 4. Resolution 4 is an ordinary resolution, which reads as follows: That for the purposes of ASX 16 rules, 10.14 and 7.1 and all other purposes, the grant of long-term incentives up to a maximum value of $3,066,001 to Dr. Colin Goldschmidt, Managing Director and Chief Executive Officer; under the Sonic Healthcare Limited employee option plan and the Sonic Healthcare Limited performance rights plan and the subsequent allotment of shares in respect of those incentives on the terms summarized in the explanatory notes be approved. As described in the Notice of Meeting, the Board wishes to provide performance incentives for Colin and Chris through 2025 financial year by issuing options and performance rights. Vesting of the rights and options is subject to challenging performance conditions, aligning their interests with yours, the shareholders. Colin and Chris created enormous value for some shareholders over almost 3 decades, and the Board wishes to incentivize them to continue to do so. Paul Alexander, the Sonic's Company Secretary will now read out any questions from shareholders regarding this ordinary resolution. And I'll ask Kate to -- as Chair of the Rem Committee to address them. Just before that, I'll see if there are any questions from the floor on this particular resolution? I note for those online, there are none. So Paul, any on screen, yes.

So we have 2 questions, 1 for this resolution and 1 for the next, which has to do with Chris Wilks' long-term incentives, both from Steven Maine. And the questions are identical and can be partly addressed together, I think. So the first question -- or first part reads, could the CEO summarize his past long-term incentive grants as to whether they have vested or lapsed? So rather than put Colin on the spot, I can answer that question. And in the last 2 years, they've vested 100%, a very strong performance of the company. In the 7 years prior to that, the level of vesting ranged between 35% and 71% across each of those years, depending on the performance against the performance hurdles of those LTIs. That applied both Colin and Chris. Their hurdles are identical. And so that answers both parts of that question. I don't have the detail beyond 9 years ago with me. So that hopefully is sufficient. The second part of the question was whether Colin or Chris, have ever, sold or bought any Sonic ordinary shares without relying on an incentive scheme to build equity positions in the company? From our own memory, I think Colin and Chris probably have taken part in shareholder purchase plans over the years. But Colin, I'm not sure whether you want to add anything to that.

I think you are correct, Paul. There have been instances where I have participated in share acquisition opportunities. Most of my shares have come from remuneration plan and incentive as part of my remuneration.

Thanks, Paul. Any other questions? If not, we note on the screen Resolution 4, the proxy results, the approval of long term incentives to Dr. Goldschmidt. For 262,850,327 , against 70,433,129, open 1,587,590 open to the chair 929,750 and abstentions 500,360,298. So we move to the next item of business Resolution 5. Resolution 5 is an ordinary resolution, which reads as follows: That for the purposes of ASX 16 rules, 10.14 and 7.1 and all other purposes, the grant of long-term incentives up to a maximum value of $1,286,618 to Mr. Chris Wilks, Finance Director and Chief Financial Officer, under the Sonic Healthcare Limited Employee Option Plan and the Sonic Healthcare Limited Performance Rights Plan and the subsequent allotment of shares in respect of those incentives on summarized in the explanatory notes be approved. Are there any questions on this resolution from the floor? For those online, I note there are not. I'll ask Paul to deal with any questions apart from we've deal with Mr. Maine's that apply to this resolution. Thanks, Mr. Maine. And there are no others that have been received. So the proxy results for Resolution 5 are now shown on the screen. Approval of long-term incentives to Mr. Chris Wilks. For 262,344,928 against, 17,171,512 open, 1,570,355 open to the Chair, 904,515 and abstentions of 5,765,777. Now that we've completed the formal business of today's meeting, are there any other questions about the company that anyone would like to ask? And I will go to the floor of the meeting first. And for those online, I note there are no questions. Are there any questions? And yes, we've got 1 on the screen. Thank you, Paul.

Yes. So again, a question from Steven Maine. Given the interesting discussions today across a range of topics, could the Chair undertake to make an archived copy of the webcast plus a full transcript of the proceedings available on the company's website?

That's a good suggestion. And again, if I could just take that, because I think the Board should have a view on that, but prima facie, not sure. I mean, we do make it available obviously live. And if we can provide an archive thing that I'm sure we can do it or just explore the technology. I guess that's possible. But we appreciate the suggestion, a good one. Thank you. Any other questions, Paul? Nothing else? No other questions from the floor. I think everyone's had a good opportunity to ask questions during the meeting. And ladies and gentleman, that concludes the discussion of items of business for this meeting. For those attending and voting online, here's the first warning, I will soon close the online voting system. So please remember to cast your votes by using the voting icon on your device screen or navigation bar. Once you have clicked this, the resolutions will appear on your screen, and you can select the voting option. If there is any person physically in attendance, who believes they are entitled to vote, but has not yet registered to vote, would you please raise your hand for assistance? Hopefully, everyone registered on the way in, but if you did not and you would like to now is the time to do that. The persons entitled to vote on poll are all shareholders, representatives and attorneys of shareholders and proxy holders, who hold green admission cards. Who are not excluded from voting in accordance with the voting restrictions for key management personnel and they're closely related parties as set out in the Notice of Meeting. On the reverse of your green admission card is your voting paper and instructions. I will now go through the procedures for filling in the voting papers. Proxy holders have attached their admission card -- have attached to their admission card a summary of proxy votes, which details the voting instructions for business items on the appointment documents in your favor. By completing the voting paper, when instructed to vote in a particular manner, you are deemed to have voted in accordance with those instructions. In respect of any open proxy votes, a proxy holder may be entitled to cast, you need to mark a box beside the motion to indicate how you wish to cast your open votes. Proxy holders should refer to the summary of proxy votes form attached to your voting paper for further information. Shareholders also need to mark a box beside the motion to indicate how you wish to cast your votes. Please ensure you print your name where indicated and sign the voting paper. Print your name where indicated and sign the voting paper. When you're finished filling in your voting paper, please lodge it in a ballot box to ensure your votes are counted. If you require any assistance, please raise your hand. So there is a ballot box coming around with our returning officer. So you do have green voting slips with or without proxy instructions on them, they can be placed in this ballot box. Just in case anyone thinks I'm not voting, I've put mine in the box earlier. I'm not allowed to go again. I don't think anyone's. Anyone need any more time? Or if you've got a green paper, then just sort of wave it and Maria or one of her team will come and collect it. Here's the penultimate warning for those online, we will be closing the poll very soon. So if you haven't voted online, please do so now. Everyone in the room has had their voting paper collected. Any outstanding ones? Please wave them in the air. No, it looks like we collected everybody, Maria. Thank you. And just a reminder, this is the last warning for those online, if you are wishing to vote now is the time to do it and with haste. [Voting]

So we've collected all the votes here and with plenty of warning, I will now formally close the polls and appoint [ Maria Japowicz ] as the returning officer to count the votes. Maria will report the results of the poll to me. The results will be announced later today to the ASX and posted on the company's website once they're available this afternoon. On behalf of the Board, I'd like to thank you for participating in today's hybrid AGM. And I hope that you and your families stay safe and well in the weeks and months ahead and enjoy the festive period and summer in front of us. With that, ladies and gentlemen, I declare the meeting closed. Thank very much indeed.