Super Retail Group Limited (SUL) Earnings Call Transcript & Summary

Good morning. I am Sally Pitkin, the Chair of Super Retail Group, and I'm delighted to welcome you to the 18th Annual General Meeting of Shareholders of Super Retail Group. The time is now 11:30 a.m. Brisbane time, and as we have a quorum of members present, I declare the Annual General Meeting open. As this meeting is being held virtually with shareholders present in many locations, I would like to acknowledge the traditional owners of the country on which we are each present and recognize their continuing connection to land, waters and culture. We pay our respects to their elders, past, present and emerging. Today's meeting is our second virtual Annual General Meeting, which we considered appropriate because of the ongoing COVID-19 pandemic. We want to protect the health and safety of our shareholders and our team while enabling shareholder engagement and participation. If we experience any technical issues today, a short recess or an adjournment may be required, depending on the number of shareholders being affected. I certainly hope this won't be the case, but I will let you know if this occurs. I would now like to introduce to you your directors. Today, from our head office in Strathpine, Brisbane, is Anthony Heraghty, our Managing Director and CEO. And by telephone from Brisbane, Sydney and Melbourne are Annabelle Chaplain; Gary Dunne; Peter Everingham, who is the Chair of our Human Resources and Remuneration Committee; Howard Mowlem, the Chair of our Audit and Risk Committee; Reg Rowe, the Founder of Super Retail Group. Also in attendance in Sydney are Rebecca Farrell, our Chief Legal Officer and Company Secretary; and Paddy Carney and Alicia Clarke, our auditors from PricewaterhouseCoopers. I am also joining the meeting today from Canberra. Earlier this month, we announced the appointment of Judith Swales as a Director with effect from 1 November. Because Judith was appointed less than 28 days before this meeting, Judith will present herself for election at next year's AGM. To welcome Judith in the meantime, we have invited her to attend today, and I am pleased to say that she is also joining us virtually from Melbourne. Welcome, Judith. The notice for today's meeting was made available to all shareholders on our website, where you will also find the minutes of the 2020 AGM, our constitution and the 2021 Annual Report. I will take the notice as read and deal with the business of the meeting in the order it appears in the notice. But before we do that, I'd like to now explain how voting and questions will work for the meeting. Your Board has determined that voting at the meeting will occur by way of a poll for all resolutions which require a vote. So that you have enough time to vote, I will shortly open the voting and it will stay open until 5 minutes after the meeting closes. Shareholders, corporate representatives and proxy holders attending today will be able to cast their vote online in real time. To do this, could you please click on the Get a Voting Card button on your screen? It sets out all the resolutions to be voted on today. And then use the electronic card to cast your vote by selecting for, against or abstain. If you should cast some of your votes for, some against, or some abstain, you can click on the Partial Votes tab and you will be able to record the number of votes in each box and you can edit and submit your work during the meeting up until the voting has closed. As we come to formally put a resolution to the meeting, the proxies received in relation to that resolution will be shown. That number will include votes on undirected proxies cast by me as Chair. And as set out in the notice of meeting, these undirected proxy votes will be cast in favor of all resolutions. Today, we have appointed Rachel Teo of Link Market Services, the company's share registry, as the returning officer. After the votes have been counted and reviewed by the returning officer, the results of the meeting will be released to the ASX and available on our website. I now declare the voting open on all items of business, and you can submit your online votes at any time. All shareholders will have the opportunity to comment on and ask questions in relation to the resolutions. I will hold comments and questions until the item of business has been introduced and shareholders have been invited to ask questions or provide comments. Shareholders will be able to ask questions online during the meeting, but we have also introduced an additional facility to allow shareholders to dial in and ask questions over the phone. I propose the order of taking questions will be as follows: first, from any shareholders using the teleconference facility; and secondly, from any shareholders who have asked a question online via written text. This order has been chosen to minimize any technology issues in switching back and forth between voice questions and written questions. [Operator Instructions] Shareholders can also submit those questions in written format via the online portal. And these questions will appear on a screen before me, and they'll be read out by the Company Secretary, and then I will answer the question or pass it on to the most appropriate person to answer. Your questions will be read as submitted, and they will not be screened or summarized. There is a 512-character -- 512-letter -- character limit per question. If your question or comment relates to a particular item of business, we will hold that question until that item is addressed. Also, if your question relates to a previous item of business, please still send it through, and we will address it at the next available opportunity. We now have two prerecorded presentations from myself and the CEO to share with you. After these speeches, we will turn to the formal business of the meeting. We did these prerecordings as part of our plan to manage any chance of any technical risk during today's meeting. A year ago, when we gathered virtually for the Annual General Meeting, the impact of the COVID-19 health and economic crisis was still unfolding. At the time, we all recognized the uncertainty playing out across the retail sector, the economy and the wider Australian and New Zealand communities but held hopes that better times lay ahead. Regrettably, it has not played out that way. The past year has been perhaps the most difficult and challenging time that many businesses and people have faced. But in Super Retail Group's ongoing response to the COVID-19 pandemic, we displayed the agility, innovation and resilience required to operate successfully in an uncertain external environment. On behalf of the Board, I am pleased to report that 2021 financial was a demonstration of Super Retail Group at its best, underlining the benefits of a sustainable business strategy that remains robust in a volatile world. The record sales and earnings results reflect the successful execution of our strategy and exceptional contingency planning by the group's leadership team. By remaining nimble and flexible, we remained open for business with plentiful stocks for our engaged team members to meet the unprecedented customer demand in our lifestyle and leisure categories. As we stand here today, of course, uncertainty continues to loom large over the economy and society. And while the impact of the pandemic will play out for some time yet, Super Retail Group has continued to perform strongly, thanks to our resilient omni-retail strategy, strong leadership and diligent team members. Looking back, last year's $203 million equity raising, completed with strong support from retail and institutional shareholders, including our founder and major shareholder, Reg Rowe, was pivotal in positioning the group for success. The financial flexibility allowed us to invest in both our people and the infrastructure needed to continue delivering our omni-retail strategy despite the uncertainty created by COVID-19. We entered this financial year, FY 2022, with a conservative balance sheet and no bank debt. Importantly, as consumer trends accelerated the shift towards online and became embedded in customer behavior across Australia and New Zealand, our supply chain and distribution networks were enhanced and strengthened. To the great credit of the management team, the business was able to circumvent many of the COVID-19-induced supply chain challenges confronted by other retailers by building inventory levels in advance of anticipated delays. This decision, combined with other improvements to our operations, has driven a strong operational performance and a record financial result. The group's result and robust financial position has supported the Board's decision to determine a fully franked final dividend of $0.55 per share. The total dividend for the 2021 financial year is $0.88 per share. The total dividend represents a full year payout ratio of 65%, in line with the group's policy. On behalf of shareholders, the Board also remains focused on the ethical and sustainable stewardship of all aspects of the group's activities. At Super Retail Group, we are determined to make a constructive contribution to society and have a positive impact in the communities in which we operate. With a rapidly evolving external environment, the group is reviewing its vision, mission and values to ensure they remain relevant to team members and other stakeholders. In the time since our values were first articulated, the company has transitioned to an omni-retailer with 4 core brands and employs a larger and more diverse group of team members. The Board wants to be satisfied that these statements of intent remain firmly aligned with the ambition of the organization. Robust environmental, social and governance practices continue to be an area of focus for the Board and the leadership team. As a group, our business activities are increasingly conducted in a manner that aligns with the transition to a lower carbon footprint, and ESG risk management is entrenched as a routine component of the Board's accountabilities. More than ever, any review of Super Retail Group's performance must draw attention to the passion and dedication of our team members. They are the backbone of the organization and the foundation of our success. We will continue to invest in our team members because we understand they are central to delivering sustained growth. The immense uncertainty around health risks for the community during the pandemic only serves to further underline the extraordinary efforts of team members. This has never been more apparent given our strong performance during one of the most challenging external environments in our time as a listed company. The Board would also like to commend the leadership of our Managing Director and Chief Executive Officer, Anthony Heraghty. Anthony has retained his laser focus on ensuring the business continues to focus on executing our strategy and creating a culture of high performance, creativity and engagement. Strong leadership from Anthony and his leadership team and an emphasis on more deeply understanding our customers is a crucial contributor to our strong growth. The stewardship of the Board has helped strengthen the group and positioned it to create long-term value. The Board is diligent and dedicated in fulfilling its responsibilities, guiding the business on behalf of shareholders, and I take this opportunity to thank my fellow directors for their sound advice and council. Over the course of the financial year, Diana Eilert announced her retirement as a Non-Executive Director after 6 years on the Board, and we thank Diana for her contribution and service to shareholders. Earlier this month, I was pleased to announce the appointment of Judith Swales as a Non-Executive Director effective 1st November. Ms. Wales has significant Board and executive management experience with a range of global businesses and is currently the Asia Pacific Chief Executive Officer of dairy company, Fonterra. Her extensive background in high-performing retail businesses and digital acumen across a diverse range of sectors, combined with her focus on delivering value for shareholders, makes her a valuable addition to the Board. Looking forward, as Australia and New Zealand continue the emergence from the constraints of COVID-19, we have strong grounds for optimism for both the community and the business. Further, the year ahead will be particularly significant for Super Retail Group with 2022 marking 50 years since our journey began with Reg and Hazel Rowe establishing an automotive accessories mail-order business in Queensland. On this note, it was with great sadness that we learned of the passing of Hazel Rowe earlier this year. It is no exaggeration to say that we are all indebted to Hazel for her work with Reg in founding this business, which now employs over 14,000 people across Australia and New Zealand, supports thousands of suppliers and meets the needs of millions of customers. It is a remarkable legacy. On behalf of the Board and the entire Super Retail Group team, today, we acknowledge Hazel's contribution and reiterate our deepest sympathies to Reg and the Rowe family. Although the year ahead will be marked by continuing uncertainty, the Board and leadership team have a clear strategy and engaged team members to ensure the group is positioned to deliver sustainable success. I am confident Super Retail Group will continue to create value for you, our shareholders. Thank you for your continued support.

Thank you, Sally, and good morning. It's my pleasure to provide you with an overview of the '21 financial year and an update on our year-to-date trading performance. I'm pleased to report that despite the impact of COVID-19 in FY '21, the group delivered a record full year result underpinned by strong top line growth, high gross margins and disciplined cost management. The strong result was in no small measure due to our remarkable team members who asserted themselves on the COVID-19 challenge and overcame every obstacle presented. On behalf of the management team, I thank them sincerely for their tireless efforts. As we stand today, the group is in robust financial shape. We've got a conservative balance sheet with no bank debt and sufficient inventory levels to counterbalance global supply chain issues. We are well positioned for the cyber and Christmas trading period and excited by the prospect of a nationwide reopening of domestic travel and outdoor leisure activity. As we go to financial highlights, you can see the group sales increased by 22% to a record $3.45 billion. This top line growth delivered an 80% increase in EBIT to $477 million. Our statutory NPAT increased by 173%, whilst our underlying NPAT increased by 107%, reflecting a reduction in below-the-line adjustments. A strong cash flow result enabled the Board to declare full year dividends totaling $0.88 per share. Underpinned by our omni-retail business model, the record result was largely driven by elevated customer demand in all our leisure and lifestyle categories. Nowhere with this more evident than in our digital channels, where our sales increased by 43% to more than $416 million. Online sales now represent 12% of group sales. We completed more than 1.5 million home delivery orders this year, which contributed to a 34% increase in home delivery sales to $224 million, while Click & Collect sales grew 56% to $192 million. While our omni-retail strategy continues to deliver, it was our sharp focus on inventory that enabled us to meet unprecedented demand in both our in-store and online channels. We increased shipping container volumes by 54%, and our forklifts were working overtime, delivering 400,000 pallets from our distribution centers. We also grew the number of our active club members during the period by 22% to over 8 million. These valued members represent almost 2/3 of group sales and remain the focus of our data and analytics program to build even stronger relationships, and I'll talk more on that soon. Super Retail Group is committed to being a good corporate citizen. We believe it benefits our team, investors, customers and trade partners and the wider community. Our Dow Jones Sustainability Index score increased to 60, placing us in the top quartile of the retail sector. We reduced our total recordable injury frequency rate, known as TRIFR, by 24% and cut carbon emissions by 7%. We're making solid progress on our ESG commitments and have commenced a program of work to refresh and review our 2030 sustainability strategy. Our corporate strategy has served us well during the extraordinary events of recent years. The group's strategy is based on 5 pillars: growing the 4 core brands, leveraging closeness to our customer, connecting our omni-retail supply chain, simplifying the business, and excelling in omni-retail. In FY '22, the group expects to spend $125 million of capital in to -- continuing to implement our strategy across both digital and omni investments as well as our store network. The online sales chart on this slide underscores the importance of this continued investment in our digital capability. Whilst the COVID-19 pandemic turbocharged online sales, the chart shows you that there is a long-term trend across all of our brands towards the digital channel. We reasonably expect these sales will continue to increase. And in the medium term, 20% to 25% of total sales will be online. These are levels seen in international markets. To ensure we don't miss the clicks, we'll make further investments in our digital capability to grow our market share. Our loyalty program stand out -- does stand out as an exciting area of growth for the group. We've grown our active club membership this year by more than 20%. With over 8 million members now, our aspiration over time is to grow that number to 10 million. Active club members now represent more than 63% of total sales, and we believe these -- the loyalty exhibited by these customers provides a solid bedrock for the business. Having completed detailed customer research, we are now proceeding with further investments in our data and analytics capability, which will enable us to hyper-personalize customer offers. This investment will enable each of our brands to reduce club member churn, increase visitation and ultimately improve annual customer value. Now despite the shift towards online sales, bricks and mortar remain the backbone of our business. Last year, 94% of group sales involved a customer visiting one of our stores. Furthermore, growth in Click & Collect sales outpaced home delivery. Over the past 18 months, our brands have been reshaping their network strategies, trialing new store concepts and enhancing in-store experiences. The group has plans to implement a 5-year store network plan, which we expect to deliver significant value for our shareholders. In Supercheap Auto, we're looking at a substantial refurbishment across the fleet to upgrade our old format into the next-generation stores and to continue the rollout service of dedicated serve areas to provide more fitment options for that "do it for me" customer. In rebel, our rCX stores are a hit, and we intend to prioritize the rollout of that format across our top 25 doors. We also intend to introduce our specialized in-store offerings in the must-win categories of basketball, football, running, kids and training more broadly across our entire network. In BCF, having successfully trialed our small-format regional stores, we'll be targeting a rollout across other regional areas. This compact 600-square-meter format is delivering sales intensities 30% above average. And given the lower regional rents and a modest capital requirement, we're achieving quite a bang for our buck. And finally, in Macpac, we think we're starting to get the recipe right. The introduction of Macpac products in rebel and BCF this winter has significantly enhanced brand awareness and boosted sales in Macpac stores. To build off this momentum, we'll continue to roll out stores in colder climate states. Supercheap Auto delivered another very strong performance this year and proved once again how strongly this brand resonates with its customers. Sales increased by 16.9% to $1.31 billion, delivered by like-for-like sales growth. Online sales grew 31% to $107 million, representing 8% of sales. Like-for-like sales growth was achieved in categories, with auto accessories and car care delivering the strongest gains. Four-wheel drive and outdoor, in-car tech and roof racks, safety and comfort and car detailing were the fastest-growing subcategories. rebel's performance this year was underpinned by very strong online sales and a much improved promotional strategy. Online sales grew by 36% to $193 million, representing 16% of sales. Like-for-like sales growth of 17.5% was achieved in all categories, with performance sports delivering the strongest growth. Football, basketball, licensed apparel and kids' apparel were the fastest-growing subcategories. Fitness equipment and accessories also performed very well as lockdown -- COVID-19 lockdowns lifted at-home fitness activity. BCF was clearly the standout performer across the 4 core brands as the nation rediscovered its love of camping and outdoor adventure. Measures implemented during the year helped to enhance the BCF brand and drive BCF growth. These initiatives, including delivering locally relevant ranging through our tailored store-by-store offers, the successful introduction of Macpac winter apparel, and actually the broadening of the wider clothing and footwear offer. Total sales increased by 49.1% to $797 million due to a 48% increase in like-for-like sales. Online sales grew 90% to $86 million, representing 11% of sales. Caravan, four-wheel drive, camp shelter and bedding, barbecue, trailer, water sports, footwear and apparel were among the fastest-growing subcategories. Macpac performed well in FY '21. Given COVID restrictions on travel, the increase of sales to -- of 16.3% to $153 million represented a credible result. In Australia, like-for-like sales increased by 9.7% despite restrictions on offshore travel. And in New Zealand, like-for-like sales increased by 21.1%. Online sales grew 38% to $30 million, representing 21% of sales. Tents, sleeping bags and camping accessories were the fastest-growing categories. Last month, we announced that experienced retailer, Cathy Seaholme, would be replacing Alex Brandon as Managing Director of Macpac. I would like to thank Alex for his dedication to the business and welcome Cathy to the group. I'm pleased to be able to provide an update on our year-to-date trading performance. As shown on this table, for the first 16 weeks of the F '22 year, the group has delivered like-for-like sales which are 12% lower than FY '21, but 10% higher than FY '20. Obviously, COVID lockdowns had adversely impact the trade in the first 16 weeks. Macpac, in particular, has been impacted by lockdowns in the key markets of New South Wales, Victoria and New Zealand, which were more severe than the previous corresponding period. If you exclude the major impacted markets of New South Wales and Victoria, group like-for-like sales in the first 16 weeks of FY '22 was 6% lower than FY '21, and 27% higher for the FY '20. Online sales have increased by 96% and represent 30% of group sales year-to-date. Click & Collect grew by 163%, outpacing home delivery, again, and represented 59% of online sales during the period. Gross margin improvements that were achieved in FY '21 have been sustained in the first 16 weeks of FY '22. The group is well positioned for the key cyber and Christmas trading period with a fortified inventory position across all of its 4 core brands. The group expects promotional activities to normalize over this period. Freight and logistics costs associated with these elevated levels of inventory could impact future gross margins as the outlook for supply chain remains challenging. As indicated in our full year results announcement, the group is undertaking investment in its customer loyalty and data and analytics capability. This multiyear program is underway. This is a significant investment, and it will impact operating expenses in the first half and beyond. Otherwise, the first -- in the first 16 weeks, operating expenses as a percentage of sales have normalized to half 1 FY '20 levels. So in summary then, the group's omni-retail business model has proven to be resilient. In FY '22 year-to-date, we've maintained a steady trading momentum in the non-COVID-impacted regions, and we're confident that we'll see a rebound in sales as lockdowns end and stores begin to reopen across the country. The group has a strong inventory position. We're well placed to take advantage of expected uplift in consumer demand in the auto, leisure and outdoor categories over the summer holiday period. I look forward to updating you on our progress throughout the year. And again, thank you, our shareholders, for your continued support. I'd now like to hand back to Sally to conduct the rest of the meeting.

We now come to the formal business of the meeting. Except for resolution 4, each resolution set out on the notice of the meeting is to be considered as an ordinary resolution and must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. Resolution 4 requests the shareholders to consider and approve proportional takeover provisions to be included in the Super Retail Group's constitution. This resolution needs to be considered as a special resolution and must be approved by at least 75% of the votes cast by shareholders entitled to vote and voting on the resolution. So let us now turn to the first item of business, and that is to receive and consider the financial report for the company for the year ended 26 June 2021, together with directors' report and the auditor's report. Copies of these reports were made available on our website, the ASX platform and were also sent to those shareholders who requested it. No resolution is required on this item, but I invite shareholders and their proxies to comment and ask questions. Questions may also be asked to the auditors in relation to the conduct of the audit, the preparation and the content of the audit report, the accounting policies adopted by the company and the independence of the auditor. I will now take questions on item 1 firstly from teleconference participants. So over to you, moderator. Do you have any questions by telephone from our shareholders?

There are no questions raised from shareholders participating by teleconference, Chair.

Thank you, moderator. So we'll now turn to written questions. I have a screen in front of me where any questions that shareholders submit in writing will appear. I'll just give it a minute to refresh. And it is telling me that no questions have been submitted at this time. So there being no questions from shareholders, I will now go to -- sorry, I have one question. It has come in from a shareholder, [ Ralph Tan ]. And the question is, in relation to our Supercheap Auto business, with the number of electric vehicles increasing, how is Supercheap Auto positioned to deal with this evolution or transition from fuel to electric drive vehicles? And what steps have Supercheap Auto taken to ensure its range of products can cater to the electric vehicle market? Thank you, [ Mr. Tan ], for submitting that question. Electric vehicle sales at the moment account for only about 1% of new car sales in Australia. That, of course, is expected to increase exponentially over time, but we need to remember that Supercheap Auto plays very heavily in the aftermarket segment. And so electric vehicles are still going to require car care and accessories. Equally, the Supercheap Auto business helps customers with tools, garage, equipment and a range of outdoor products. And so they will still all have a place in an electric future. But Supercheap's long-term strategy does take account of the changing vehicle fleet and is focused on broadening its appeal to a diverse customer base. Thank you again, [ Mr. Tan ], for the question. So they're the only questions we have on item 1.

And there being no further questions, I'll now move on to the second item of business, which is our remuneration report. So the 2021 Remuneration Report is in our annual report at Pages 43 to 67, and it's also available on the company's website and was posted to those shareholders who requested a hard copy of the annual report. So further details on this item are also available in the notice of meeting. Overall, the group delivered a very strong trading performance particularly in light of the continuing impact of COVID-19. And in considering COVID-19's impact on the performance of the company over the past year, the Board has considered the reward outcomes appropriate and did not feel the need to moderate them. The strong reward outcomes reflect a strong financial performance, and the Board recommends that shareholders vote in favor of this resolution. I will now take questions from shareholders on item 2. So with this, could I please go to our moderator for telephone questions? Have you any telephone questions for us?

There are no questions raised from shareholders participating by teleconference, Chair.

Thank you, moderator. So I'll now go to written questions. And on my screen, I will read it out. [ Peter McAnally ], who is the monitor for the Australian Shareholders' Association, has submitted a question. And that question reads, congratulations to your company, its employees, management and Board on the success achieved in a trying and difficult year. ASA's policy is to see employee incentives aligned to shareholders in that equity incentives be at least 50% for STIs. Going forward, will you consider endeavoring to reach the ASA's guidelines? Thank you, [ Mr. McAnally ], for that question. And I understand the ASA guidelines and the rationale for that guideline of the 50%. We introduced deferral for a portion of STI into equity. We introduced that in financial year 2020 in the form of restricted shares. It was just last year, in financial year '21, that we increased the percentage of the deferral to 30%. And we think this is the right level of deferral at this time, but it is something that we will keep under review. And thank you again for the question. I'm just looking at the screen now to see if we have -- [ Mr. McAnally ], a further question from you. Would you please explain how you will determine the NED fees and balance the need for the fee to be sufficiently attractive to NEDs of required caliber and not so high that it is difficult for NEDs to exercise independent judgment in case it jeopardizes retaining role and effective annuity for successive years of directorship? So NEDs' fees are set after considering independent benchmarking and that looks at what other companies are paying -- other comparable companies are paying in fees. As you note, [ Mr. McAnally ], it is important that we are able to attract capable and committed directors. It is also important that a majority of our directors are independent in accordance with the ASX good governance guidelines. The Board is presently developing a multiyear succession plan. And in doing that planning, that balancing of capability and independence will be an important consideration. I think that continuing to get independent benchmarking will be an important part of setting fees into the future. Thank you again for the question. And it's a good one because we need to continually have in mind that balance between the level of fees and the independence of the director. I'm just looking to see whether we have any other questions, and I'm told no other questions have been submitted at this time. So I will now put resolution 2 to the meeting. And please note that in accordance with the voting exclusion statement in the notice of meeting, the company will disregard votes cast by certain persons on this item. Now the proxies received in relation to this resolution should now be showing on the screen. I'm waiting expectedly. Rebecca, as our Company Secretary and General Counsel, I'm just wondering if -- given the proxies are not showing on the screen for our shareholders, could you read out the proxies for us, please?

Chair, they are on the screen.

My apologies, shareholders. I just can't see them on the screens that I've got. There are many screens here, but they're not showing on any of mine. So it's now time to vote. Could you please select either for, against or abstain for resolution 2 on your electronic voting card? [Voting]

I would now like to move to item 3, which is the reelection of directors. Again, as a precaution against any technical difficulties, we have prerecorded a short speech from myself and Peter Everingham as your directors who are seeking reelection at this Annual General Meeting. So we will play each of those speeches first, and then we will deal with each item. But as the next item of business, which is 3.1, relates to my reelection, I'm going to ask the Chair of the Audit and Risk Committee, Howard Mowlem, to chair the meeting for this item of business. So I'm going to hand over to Howard, who will introduce the item, and then the speech will be played. Thank you, Howard.

Thank you, Sally. The first director for reelection is Dr. Sally Pitkin. Further information in relation to Sally's background and experience is set out in the notice of meeting. We will now hear Sally's reelection speech.

Thank you for the opportunity to address you today to seek your support for my reelection as an Independent Non-Executive Director on the Board of your company. I am privileged to have been a member of the Super Retail Group Board since July 2010, and your Chair since October 2017. I'm also the Chair of the Nomination Committee and an ex officio member of the Human Resources and Remuneration Committee. In my time with the group, the company has grown into one of Australia's biggest and most accomplished retail businesses with 4 segment-leading brands in growing lifestyle categories. During my tenure, we have successfully integrated rebel and Macpac into the business, adding to our dominant automotive and outdoor brands, Supercheap Auto and BCF. In line with our omni-retail strategy, we have also modernized and digitized the business to capitalize on the explosive growth in online retailing while maintaining a fit-for-purpose store network to service our more than 8 million loyal customers. Additionally, we have refreshed the Board and management team, bringing in respective directors and executives with significant domestic and international experience so we can stay at the cutting edge of retailing in Australia and New Zealand. As Chair of the Board throughout the COVID-19 pandemic, I am particularly proud of the role we have played in helping support the business through the unprecedented economic turbulence created by the virus. I have been a Board Director on listed private, public and not-for-profit organizations for 25 years. I'm a director of listed companies, Link Group and Star Entertainment Group. And like many directors, I am active in supporting several not-for-profit organizations. This experience enables me to deliver the highest standards of corporate governance and directorship at Super Retail Group, which in turn drives a stronger business performance and better outcomes for you, our owners. The role as Non-Executive Director and Chair in listed companies continues to evolve. We are now required to have a deeper understanding of many different fields, ranging from the behavioral sciences to organizational culture, strategy, regulatory compliance, human resources, technology, finance and risk. I believe my experience and ongoing engagement with a range of different organizations is an asset to the Board. It helps to ensure I remain up-to-date with the many different aspects of best practice corporate governance. There are exciting times ahead for your company as our society emerges from COVID-19 restrictions. And while it is inevitable, there will be fresh challenges. I am as enthusiastic and focused as I have ever been about serving on your Board. It remains a great pleasure to serve as a Director of this company, and subject to your vote, I look forward to continuing to make an important contribution to the group as we position the company for sustained growth. Thank you.

Thank you, Sally. I will now take questions on item 3.1 from teleconference participants. Do we have any, please?

There are no questions raised from shareholders participating by teleconference, Chair.

Thank you. I will now take questions on item 3.1 from shareholders watching online or who have sent in their questions in written format. Do we have any questions?

Chair, there are no questions online.

Thank you. And I'm not seeing anything on the screen. So as there are no further questions and discussion, I will now put resolution 3.1 to the meeting. The proxies received in relation to this resolution should be now shown on the screen. The directors, with Sally abstaining, unanimously recommend shareholders vote in favor of this resolution. Please now select either for, against or abstain for resolution 3.1 on your electronic voting card. [Voting]

Thank you, and Sally will now resume as Chair.

Thank you, Howard. Let's turn now to item 3.2. That's the reelection of Peter Everingham. Peter is the Chair of the Human Resources and Remuneration Committee. Further information in relation to Peter's background and expertise is set out in the notice of meeting, and we will now hear Peter's reelection speech.

Good afternoon. Thank you for the opportunity to address today's Annual General Meeting. I've been an independent Non-Executive Director of Super Retail Group since December 2017. Today, I'm seeking shareholder support for reelection to the company's Board. My Board experience began 10 years ago, serving the Boards of companies that my employer at the time, SEEK Limited, had invested in. And 4.5 years ago, I decided to devote myself fully as a professional Board of Director across a small number of organizations. What I bring to the Board is 22 years of experience in online-driven consumer businesses, where the customer propositions have been to evolve rapidly and adapt regularly. I provide a whole-of-business perspective, covering strategy and investments, sales and digital marketing and people and culture. I also have a background in finance accounting, which enables me to serve as an accomplished member of the Finance, Audit and Risk Committee as well as human resources. This year, I was appointed Chair of Super Retail Group's Human Resource and Remuneration Committee, a role that I have thoroughly enjoyed and hope to continue. As part of my Board career, I'm also a Governor and Director of the World Wide Fund for Nature in Australia, and I'm able to contribute well to the ongoing development of Super Retail Group's sustainability practices. Outside of work, I have a keen interest in sport, hiking and the ocean, all of which feed my interest in and knowledge of Super Retail's categories. It has been a privilege to serve as a director for the past 4 years and subject to your vote, I look forward to continuing to make an important contribution to Super Retail Group's future. Thank you.

I will now take questions on item 3.2 from teleconference participants. Over to you, moderator.

Thank you. There are no questions raised from shareholders participating by teleconference, Chair.

Thank you, moderator. I'm looking to the screen to see if any written questions have been submitted, but there have been no questions submitted. And so we will now display the proxy received in relation to this resolution. They should be coming up on the screen now. The directors, with Peter Everingham abstaining, unanimously recommend shareholders vote in favor of this resolution. So it is now time to vote. Could you select for, against or abstain for resolution 3.2 on your electronic voting card? [Voting]

The next item of business is item 4, which is the proportional takeover provisions. This item is the approval of amendments to Super Retail Group's constitution to include new provisions relating to proportional takeover bids. A proportional takeover bid occurs when a bidder offers to acquire only a proportion of each shareholder's shares, for example only 5 out of every 8 shares held. Under the Corporations Act, companies can include proportional takeover rules in their constitution that enable a shareholder to vote on a proportional bid in principle before a proportional takeover bid is permitted to proceed. These rules expire if they are not refreshed by a special resolution of shareholders every 3 years. The Board considers that shareholders should have the opportunity to vote on any proportional takeover bid. The resolution is to consider and if, thought fit, to approve the insertion of proportional takeover provisions as a new rule 22.9 and Schedule 2 in Super Retail Group's constitution. And this is set out in Annexure 1 of the notice of meeting. Further information about this resolution is set out in the notice of meeting. I will now take questions on Item 4 from teleconference participants. Moderator, are there any questions?

There are no questions raised from shareholders participating by teleconference, Chair.

Thank you, moderator. And I'm now looking to the screen, but no written questions have been submitted on this item 4. So on that basis, I will now put resolution 4 to the meeting, and the proxies received in relation to this resolution are now shown on the screen. Could you please now select either for, against or abstain for resolution 4 on your electronic voting card? [Voting]

Ladies and gentlemen, that concludes our discussion on all items of business. In 5 minutes, the voting system will close. Once voting has been closed, all voting cards will be final and cannot be changed. Could you please check that you have cast your vote on all resolutions before you log out of this meeting? On behalf of the Board, I would like to thank you for your support, attendance and participation today. I regret that we do not have the opportunity for a chat over a cup of tea this morning, but I hope I can welcome you in person as well as virtually at next year's AGM. We intend to hold virtual AGMs going forward to really maximize the opportunity for you, our shareholders, to participate. I now declare the meeting closed.