Transurban Group (TU9.SG) Earnings Call Transcript & Summary

Good morning everyone. My name is Craig Drummond and I am Chair of the Transurban Group. Welcome to the 2025 Annual General Meetings. This morning we are holding three meetings concurrently. These are the Annual General Meetings for Transurban Holdings Limited, Transurban International Limited and Transurban Holding Trust. We have a quorum, so I declare the meetings open. I am chairing today’s meetings in Melbourne. And on behalf of Transurban, we acknowledge the Traditional Owners of the lands throughout Australia, and we pay our respect to elders past and present. We acknowledge our roads and infrastructure are built on country. And with deep respect, we incorporate the voices of First Nations people in our approach, supporting access to mobility across communities. An example of how we do this is through our First Nations driver programs delivered by the KARI Foundation in Sydney and the ARTIE Academy in Brisbane. In FY '25, these programs helped over 60 students gain their driver's license. The Board and I are pleased to be meeting with security holders in person and online today. As well as providing our security holders with an update on our operations, this AGM also provides an opportunity for Board members to hear directly from security holders. For those joining us online, we have worked diligently to ensure the broadcast runs smoothly, but should you experience any technical difficulties, a recording of the meetings will be available on our website later today. As outlined in the Notice of Meetings, security holders will have the opportunity to vote and ask questions of the Board in real time. To provide everyone with an opportunity to vote, and in case anyone cannot stay for the duration of the meetings, I will now formally open the poll on all resolutions. The Notice of Meetings was made available to all of you. With your consent, I will take that document as read. I would now like to introduce the Directors and our Company Secretary. On my right are our Company Secretary, Fiona Last; our Chief Executive Officer, Michelle Jablko; and Independent Non-executive Directors Gary Lennon; Patricia Cross; Rob Whitfield; Marina Go; Mark Birrell; Sarah Ryan; and Tim Reed. Marina Go and Sarah Ryan are standing for re-election. You will hear from both later in the meeting. As part of the Board’s active succession activities, we recently announced the appointment of Michael Wright as a Non-executive Director. Michael will join the Board at the start of November, and it is intended that he will stand for election at next year’s AGM. I would also like to acknowledge Peter Scott, who, unfortunately, is unable to be here today due to a medical condition. As previously announced, Peter will be retiring from the Board at the conclusion of today’s meetings. Peter was appointed to the Board in March 2016 and has been an invaluable contributor during a period of growth and success for Transurban. On behalf of the Board, to Peter, thank you for what has been a truly significant contribution and great service to our company. This year saw us deliver real and sustainable value for all of our stakeholders, through new initiatives and continuous improvement, both on and off the road. At its core, our customer value proposition is simple. We strive to deliver safer, faster and easier journeys, saving our customers time, fuel, and carbon emissions every day. With this in mind, we set out with a clear goal, to communicate our value proposition to our more than 11 million customers. We wanted our customers to see and feel the value they receive when choosing our roads. This included launching a new travel time savings feature in the Linkt app, and partnering with breakfast radio to give peak-hour motorists real time traffic reports, helping customers to make informed travel decisions. We continued to invest in digital upgrades across our app and website to further improve the end-to-end customer experience. As part of these efforts, we introduced a customer service chat bot which uses generative AI to respond to customers within the Linkt app and website. The technology has handled around 420,000 customer inquiries since it launched, with most customers rating the experience as helpful. Cybersecurity measures were also enhanced, with new generative AI-powered fraud detection technology, helping us to identify fake customer accounts faster. Together, these efforts are building trust and loyalty from our customers, and we were pleased to have achieved a Net Promoter Score of positive 12, up from negative 2 just five years ago. We saw resilient traffic growth across all markets in FY '25. There was underlying growth in Sydney and Brisbane over the year, with traffic up 2.7% and 1.5%, respectively. In Melbourne, traffic grew by 1.2% in FY '25, helped by increased airport trips and weekend traffic. North America was a standout performer this year, contributing nearly 25% of overall revenue growth, despite representing only around 7% of total trips. Drivers are consistently choosing our express lanes, even outside of peak hours, and our pricing reflects that value. We’re also looking forward to the 495 Express Lanes Northern Extension project opening in the region later this year. Today, we released our September quarter traffic results, with Average Daily Traffic increasing by 2.7% on the same period last year, averaging 2.6 million trips per day. This result was supported by growth across all markets, with North America continuing to perform particularly well, up 6.8% for the quarter. In Melbourne, traffic growth was supported by increased airport trips on Western Link and easing construction impacts across the network. And we saw continued growth in Sydney and Brisbane, with both workday and weekend trips increasing. The result demonstrates the value customers place on our roads, and the quality and diversity of our portfolio. Let me now turn to our key financial results for the year ended 30 June 2025. Proportional toll revenue grew 5.6% to $3.7 billion, supported by resilient underlying traffic. And proportional operating EBITDA grew by 7.4%, with a margin improvement of 140 basis points. Our continued focus on managing costs as well as maximizing the performance and efficiency of our operations saw proportional operating costs holding flat year-on-year at $947 million. We have used proportional operating EBITDA this financial year to highlight the performance of the business excluding the one-off impacts of both the ConnectEast litigation of $143 million and restructuring costs of $29 million. Free cash, excluding capital releases, increased by 7.6% to more than $2 billion. This allowed us to deliver more than $2 billion in gross distributions to security holders. Our full-year distribution of $0.65 per stapled security, which was in line with guidance, was 99.5% covered by free cash and represented a 4.8% increase on FY '24. Despite some volatility in debt capital markets throughout FY '25, we were able to consistently secure strong outcomes when accessing debt markets. We raised $3.8 billion of debt across bank and debt capital markets to support funding initiatives and project delivery. Our weighted average cost of Australian dollar debt remained flat year-on-year at 4.5%. This was mainly due to some well-timed hedging of some of our floating rate exposure that we carried over the financial year end. Weighted average maturity for group debt is marginally lower than the prior year at a comfortable 6.6 years. In September, we returned to the US public debt market where we successfully priced a $550 million bond at attractive rates with strong demand for our paper. So our balance sheet remains in a strong position, and we are well funded to take advantage of future organic growth opportunities with balance sheet capacity in excess of $1.7 billion. Each year we conduct a listening survey to understand the expectations of the community. This year our community engagement survey heard from more than 5,000 Australians, giving us valuable insight into what matters most and where we can have the greatest impact. Safety was again rated the most important focus area and expectations continue to rise around our road safety initiatives. These initiatives center on road safety for all ages and stages, from babies in car seats, to teens getting their learners' permit, to older drivers. We hit a milestone of 10,000 free car seats checked through our partnership with Kidsafe, which operates in Brisbane, Sydney and Melbourne. We also conducted free car seat checks in Virginia and Montreal. Our roads continue to perform well against relevant Australian and international safety standards. All of our Australian and U.S. roads have been assessed by the International Road Assessment Program, with NorthConnex becoming our first asset to earn a 5-star safety rating. And Monash University's Accident Research Center's latest analysis has again found that our Australian roads are, on average, at least twice as safe compared to like roads, such as freeways or motorways with similar traffic volumes. We continued to work towards our goal of net zero emissions by 2050, achieving a 24% year-on-year reduction in Scope 1 and 2 emissions. And we’re working closely with our suppliers and delivery partners to reduce Scope 3 emissions across our supply chain. We also remain focused on supporting the demands of our growing cities and helping prepare our customers for the future. This year, that included showcasing electric vehicles at our EV Drive Day in Sydney, giving the community a chance to test drive an EV and learn about cost-friendly ways to own and charge them. As we usher in Transurban’s 30th year, we look forward to a new era of growth. Transurban was listed on the ASX in 1996 and the strong macro trends that enabled our business then, population growth, freight growth and increasing urban congestion, remain strong today. In the next year, we’ll open 3 major projects, and beyond that, we’re actively exploring another $10 billion pipeline of potential opportunities. Michelle will share more about our projects and the opportunities ahead. Before I conclude, I’d like to recognize Michelle and the broader Executive team for their hard work this year, and the way they have guided the business through significant change. And on behalf of the Board, I would like to thank you, our security holders, for your support of Transurban. As populations grow and demand for our roads continues to rise, our quality assets offer stable opportunities for investment and growth -- offer opportunities for investment and growth. Looking ahead to FY '26, we’re excited about the project milestones on the horizon as well as the pipeline of opportunities being evaluated. These opportunities will continue to drive long-term value and distributions for you, our security holders. With this in mind, and on the back of good traffic results today for the September quarter, the Board today reaffirms our FY '26 distribution guidance. We expect the FY '26 distribution to be $0.69 per security, representing 6.2% growth on FY '25, with expected free cash coverage of 95% to 105%. On that note, we now have a short video of key highlights for the year. [Presentation]

Thanks Craig, and good morning. Every day, customers take more than 2.5 million trips on our roads. And as populations grow, the need for high quality infrastructure is clear. The opportunity for growth is real. How we realize it will come from bringing exceptional value to customers, and from the results we deliver for our investors. That’s why we’ve been focused on bringing together our physical and digital assets, to deepen the customer experience and get even more value out of our infrastructure. By delivering tangible value and unlocking efficiencies, we’re strengthening stakeholder support and driving sustainable returns for you, our security holders. Our roads are more than infrastructure. They underpin the liveability of our cities and connect people to jobs, recreation and each other. By relieving the burden of upfront spending, we enable government budgets to be directed to other critical areas and still deliver broader community benefits like reduced congestion, improved safety and better connectivity. Take New South Wales, where Transurban and our partners have invested over $36 billion in the state since 2005. This investment is equivalent to building over 51 hospitals or 1,300 schools. For individuals, our roads give people choice, helping our 11.3 million customers get where they need to go faster, safer and with less fuel. And by bringing together our physical and digital assets, we are helping our customers have the digital tools that help them make that choice and connect them to the value they get from using our roads. The new travel-time savings feature in the Linkt app is a great example. It lets customers quickly see the money spent versus time saved, putting the choice in their hands. In August for example, Linkt customers collectively saved an estimated 5.9 million hours by traveling on Transurban roads. And our Linkt Rewards program continues to expand, with new partners coming on board this year, including our new fuel discount partner 7-Eleven. Our focus on customer value extends to other priority areas for the business, including reaching a positive outcome on toll reform in New South Wales. We’re continuing to work constructively with government to deliver solutions that meet their priorities and are positive for Sydney, while protecting the significant investment that Transurban and our partners have made in Sydney’s road network. And we’re optimistic we’re getting closer to a solution in the coming months. Alongside these efforts, we’ve continued delivering real outcomes for our government and community partners this year. We supported the New South Wales government to open Sydney Gateway with its connection into WestConnex. Today, motorists save nearly 40 minutes on a trip from Paramatta to the airport, compared to a decade ago and Sydney has 1 million more people. And as freight demand increases, we’re working with the Victorian government to trial livestock vehicles and EV trucks on CityLink, opening up new journeys for the freight industry. Off the road, we’ve continued to invest in community infrastructure, creating 14 kilometers of new walking and cycling paths that will be delivered as part of the West Gate Tunnel project later this year. Delivering this clear and tangible value is a real differentiator, underpinning the opportunities ahead of us. We’ve also worked hard to become a more nimble and efficient business, working smarter and streamlining the way we operate. This year, that included a comprehensive organizational review, and the difficult decision to reduce our workforce. The decision was not made lightly, and when it was announced we acted quickly, decisively and with care for those impacted. It was hard, but we’re confident it was the right decision. With our new operating model now in place, we’re starting to achieve sustainable efficiencies in many areas of the business. We’ve engaged suppliers to drive better value, streamlined our technology platforms to make work easier for our people, and refined our asset life cycle planning to ensure we’re managing resources as effectively as possible. And it’s still early days. We continue to look for opportunities for efficiency ahead of us. Importantly, the capital being released is being invested for our future. This means improved outcomes for security holders, more efficient operations and direct benefits for our customers. The proactive re-sheeting of the M2 in Sydney which is currently underway is one such example. We have an exciting year ahead of us, with nearly $13 billion worth of projects opening in the next 12 months. In Virginia, the 495 Northern Extension project is nearing completion, with new lanes set to open to motorists shortly. In Sydney, the M7/M12 integration project will improve connections to the new Western Sydney Airport, and the surrounding development precinct, when it opens next year. And here in Melbourne, we’re firmly in the final stages of the West Gate Tunnel project. As we’ve noted before, projects like these are naturally complex, and not done until they’re done. But we’re looking forward to easing congestion in Melbourne’s west, and we’re planning with the state for a successful opening later this year. Looking ahead, we have over $10 billion of potential new project discussions in the pipeline. In Brisbane, the Logan West Upgrade is in progress. And with the Olympics fast approaching, we welcomed the Queensland government’s 2032 Delivery Plan, which includes upgrades on the Gateway Motorway. On the back of strong performance in North American business, we’re also in the planning stages of our bi-directional project on the 95 Express Lanes. And we’re part of a consortium exploring new projects in Atlanta and Nashville. Taking a partnership approach helps us enter new markets in a disciplined and lower risk way, where we can build our presence over time and support long-term value and distribution growth. More importantly, our deep mobility expertise and customer-first mindset is opening the door to new kinds of opportunities. We are encouraged to see both the Australian and New Zealand governments commit to finding solutions on road user charging. We firmly believe that the customer needs to be at the heart of any road user charging system, and we’re exploring how we can support and help shape these important developments. So we’re thinking broadly about the strengths we bring to the table, and where we can add value through our physical and digital assets. To finish, I would like to thank my fellow Board members and Executive Committee colleagues for their continued support. And I would like to recognize the whole Transurban team for your dedication and hard work, in what has been a year of great effort. Thank you also to our security holders for your ongoing support of Transurban. We’re entering FY '26 with momentum, a solid foundation and a clear ambition to continue driving value. We look forward to another successful year. Thank you.

Thank you, Michelle, and transcripts of my address and that of the CEO are available on the Transurban website and on the ASX. Before we move to the formalities, I'll begin by outlining the procedures for today's meetings. These are security holder meetings. As in past years, only security holder holders, their attorneys, proxies and corporate representatives are permitted to vote and ask questions. With the hybrid meeting format, there are 3 ways questions may be asked. For those attending in person, you may ask a question if you hold a blue or red card. When I invite questions later in the meeting, please make your way to a fixed microphone point and provide your name to the microphone attendant. If you're unable to make your way to the microphone, please raise your hand, and we'll bring a microphone to you. We'll take questions following the introduction of all items of business. For those attending online, you may submit written questions through the online platform by clicking on the Q&A icon and following the prompts. Written questions can be submitted at any time. To help with the smooth running of the meeting, we ask online participants to submit your questions now. If you are attending online and wish to ask a question verbally, you'll need to follow the instructions below the broadcast window. We recommend that you wait until the question time begins before connecting to the audio line to minimize the time queuing to ask your question. Questions which may be moderated, grouped or summarized will come through to me as chair of the meetings, and I'll either answer it myself or I'll pass it on to the most appropriate person to answer it that's if it's a hard question. If a security holder has a question that relates to the online meeting technology, please contact the helpline detailed in our AGM online participation guide published on our website. To enable all security holders a reasonable opportunity to ask questions, you are requested to ask no more than 2 questions at a time. Please keep your questions short and to the point so that as many people as possible have the chance to ask a question. Please ensure your question is relevant to security holders as a whole. If you are an eligible security holder, a representative or attorney of an eligible security holder or a proxy for an eligible security holder, you are entitled to vote. For those attending the meeting in person, at registration, you should have been issued with a blue admission card and voting card. If you are representing or are a proxy for more than one security holder, you will have been provided with a separate admission and voting card for each separate capacity in which you are attending the meetings. Relevant voting instructions are printed on the reverse of your blue card. When you complete your card, please indicate the manner in which the votes are to be cast by placing a mark in the for, against or abstain box for each resolution. If you have difficulty in completing your voting card, please raise your hand and a representative from Computershare will assist you. You do not need to put the percentage or number of votes you are voting unless you wish to do so. Before placing your voting card in the collection box, please ensure that you print your name on the bottom of the card. At the conclusion of the meetings, please place your voting card in one of the collection boxes located near the exit. If you are attending the meeting online and you are eligible to vote, a vote icon will appear on your screen. Selecting this icon will bring up the list of resolutions and present you with voting options. To cast your vote, simply select one of the options, for, against or abstain for each resolution. A tick will appear to confirm receipt of your vote. You can change your vote at any time up until the poll is closed by selecting Click Here to change your vote. Proxy holders are reminded that you must vote in accordance with the proxy holders' directions. Any directed proxies that are not voted at the meeting will automatically defer to the Chair of the meetings. And as Chair, I'm required to vote those proxies as directed. All proxies that are open and available to the Chair of the meetings will be voted in favor of the relevant resolutions. Again, if you require any assistance, please contact our securities registry, Computershare Investor Services. Doris Grave of Computershare will act as returning officer. And I appoint you and Barron of PwC, the group's independent external auditor, to be the scrutineer for all resolutions. The results of today's meetings will be announced following the meetings on the ASX and on Transurban's website. I now turn to the formal items of business at today's meetings. The notice of meetings set out information regarding items for consideration at today's meetings. I'll introduce each item of business separately and then invite questions on all items of business together after the items have been introduced. We have 4 items of business today. Items 2 to 4 include resolutions that require a vote. Item 1 is the receipt and consideration of the Transurban Group financial report for the year ended June 30, 2025. This has been approved by your Board and provided to you with Transurban's 2025 corporate report is also available on Transurban's website. There is no need to pass a resolution on the financial report. However, security holders and proxy holders are welcome to ask questions in relation to the accounts or the overall activities of the group and as previously mentioned we will take questions following the introduction of all items of business. Security holders and proxy holders will also be given a reasonable opportunity to ask you Barron of PwC questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted in preparation of the financial statements and the auditor's independence. All questions to the auditor should, in first instance, be addressed to me as Chair. And if appropriate, I will ask Mr. Barron to address the meetings. Item 2 of business on the agenda concerns the election and re-election of directors. Marina Go was appointed as an independent Non-Executive Director in December 2021. Marina is currently a member of the Remuneration, People and Culture Committee and the Nomination Committee. Marina has worked in executive roles across a range of listed and private companies and in non-executive director roles across a diverse range of sectors. Her executive career included over 25 years' experience in branding, marketing, digital technologies and change leadership in the media industry. A copy of Marina's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Marina Go offers herself for election. I confirm and reconfirm the Board's view that Marina's contribution as an experienced executive with deep expertise in brand, customer and community interactions with a focus on innovation are highly regarded by the Board. In recommending her re-election, the Board notes Marina's contributions as a valued member of the Remuneration, People and Culture Committee and the Nomination Committee. The directors other than Marina unanimously recommends re-election. I'll now ask Marina to address the meetings.

Thank you, Craig, and good morning, fellow security holders. It's a privilege to serve on the Board of Transurban, an organization that plays a critical role in our communities. Our role in connecting people, families and communities and enabling them to travel safely and in less time between their homes and the workplaces is what excites me about the importance of Transurban's mission. We operate with a social license from the communities and stakeholders we serve, and that requires continued earning. I have significant and relevant executive and non-executive experience in understanding the customer perspective, and it is through that lens that I'm well placed to provide meaningful contribution to this critical area. As Craig said, I joined the Transurban Board on December 1, 2021, and I'm a member of the Remuneration, People and Culture and Nomination Committees. My executive roles and non-executive roles have included leading organizations through headwinds, which is increasingly important in globally uncertain times. I've served as a Chairman and Non-Executive Director on ASX-listed companies, private companies and not-for-profit organizations across a range of sectors, including energy, retail, technology and government. I'm also an experienced People and Remuneration Committee Chair, Sustainability Committee Chair and Audit and Risk Committee member. I'm passionate about innovation, convenience and mobility, and that has shaped my board portfolio. I also have considerable experience in the areas of digital technology, reputational risk and stakeholder engagement as well as diversity and inclusion. I lead a full and rewarding career as a Non-Executive Director. I have the time to devote to my role as an independent Non-Executive Director of Transurban, which I've demonstrated since joining. I hope that you re-elect me to the Board for a second term as it's an organization that I'm honored to serve. Thank you.

Thank you, Marina. I'll now move to the proposed re-election of Dr. Sarah Ryan as a Non-Executive Director. Sarah was appointed as an independent Non-Executive Director in September 2023. She is a member of the Remuneration, People and Culture Committee and the Nomination Committee. Dr. Ryan is an experienced Non-Executive Director and former energy executive with more than 30 years of international experience in the oil and gas industry, including holding various technical, operational and leadership roles both in Australia and overseas. A copy of Sarah's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Sarah offers herself for re-election. I reconfirm the Board's view that Sarah continues to bring a deep understanding of large infrastructure projects across various industries, and her expertise and experience working with large global companies involved in complex, capital-intensive projects is highly valued by the Board. In recommending her re-election, the Board notes Sarah's contribution as a member of the Remuneration, People and Culture Committee and the Nominations Committee. The directors other than Sarah unanimously recommend her re-election. I'll now ask Sarah to address the meetings.

Thank you, Craig, and good morning, everyone. So I was delighted when I was invited to join the Board of Transurban in 2023, as I believed I could make a real contribution to this company, and I'm delighted to learn that this is true and I'm here again today. So my executive background is in the energy industry with more than 30 years experience worldwide mostly around operations, engineering and contracting as well as technology development and innovation. I have also spent 10 years in investment management focusing on the global energy and natural resources industries. I'm an elected fellow of the Australian Academy of Technology and Engineering, where I currently chair their energy forum, and I hold a PhD in geology and geophysics. I'm currently a Non-Executive Director of 3 other ASX-listed companies, being Aurizon, Viva Energy and Calix, and I'm a former Director of Woodside Energy, Oz Minerals and Aka Solutions from Norway. My non-executive experience covers various roles in energy, rail transport, fuel and retail, pipeline construction, mining, defense, oilfield technology and decarbonization of heavy industry. Many of the issues I've had to deal with over that time in both my executive and non-executive roles are very relevant to Transurban's business today and in the future. For example, large and complex construction projects with high levels of interest from a broad group of stakeholders, including the community and government, the emphasis on safety and risk management, the opportunities and challenges of new technology and innovation in infrastructure and the nature of the business as a provider of key infrastructure for broader communities. I confirm I continue to have the time to devote to this role. I believe my background and experience leave me well placed to continue to contribute to the company's future, and I'll be delighted to be re-elected as a director by security holders today. Thank you.

Thank you, Sarah. I'd like to remind attendees that we will take questions following the introduction of the remaining items of business. Item 3 of business on the agenda is the adoption of the remuneration report of Transurban Holdings Limited and Transurban International Limited for the financial year ending 30 June 2025. Voting on this resolution is as an item of business is advisory only. Transurban's remuneration strategy is designed to enable and drive our business strategy and sustainable long-term growth. The report aims to provide you with an understanding of the links between Transurban's strategy, its performance and executive remuneration as well as the framework we have in place to ensure effective governance of remuneration matters. The report also details the FY '25 remuneration arrangements and outcomes for your directors and senior executives. In determining the remuneration outcomes for FY '25, the Board assessed Transurban's performance in terms of financial and nonfinancial measures set out in the group performance scorecard and took into consideration the alignment with security holder experiences. The group FY '25 short-term incentive outcome was 105% of target with a year-on-year increase in proportional operating EBITDA of 7.4% and a distribution growth of 4.8% aligning STI outcomes with the experience of security holders. In determining the STI outcomes of the CEO and executive key management personnel, the Board considered both individual performance and all factors that have contributed to the overall group result. The Board considers the resulting STI outcomes to be aligned with the experience and expectations of security holders. I now turn to the final items of business. Item 4 on the agenda is the approval of proposed grants of deferred securities and performance awards to the CEO and Managing Director, Michelle Jablko, under the Transurban Group's deferred short-term incentive plan and long-term incentive plan. The terms of the proposed grants are set out in the explanatory notes in the notice of meetings. If security holder approval is obtained, 2 grants of equity will be made to Michelle. The first grant represents 50% of Michelle's FY '25 STI, approximately $1.1 million. This amount will be deferred into Transurban stapled securities which will vest if Michelle remains employed with Transurban for a period of 2 years. This creates a strong retention proposition for the CEO and ensures that half of her STI award remains subject to Transurban security price, which is intended to support increased alignment between the CEO and security holders. The second grant consists of performance awards, which will be granted to Michelle as the long-term incentive portion of her FY '25 remuneration package. Each performance award entitles her to one fully paid ordinary Transurban stapled security at the end of the 4-year performance period subject to satisfaction of 2 equally weighted performance measures. The first measure is relative total shareholder return, or TSR, measured against the bespoke comparator group. The second measure is free cash flow per security, which reflects the Transurban Group's focus on maximizing free cash to drive security holder return. Approval is being sought to grant a total number of performance awards to the CEO not exceeding 217,816. In a moment, I'll invite questions on all items of business. But before I do, details of the proxies received for each item of business are being shown on the screen. We encourage security holders to submit questions in advance of the meeting. We'll now address a question received from a number of security holders prior to the meetings before turning to questions in the room and any questions online. If you have a question, please make your way to the microphone now. Fiona, can you please read the question?

Chair, we received the following question ahead of the meeting. Transurban's pipeline of work appears to be drying up. Major projects in Sydney and Melbourne effectively finished a bit of road widening in Brisbane but what else is going to happen?

Well, I think that question was probably answered in Michelle's speech. We've got $13 billion of projects delivering in the current year and we have a pipeline currently of conversations around a pipeline of -- in excess of $10 billion of projects across multiple jurisdictions from Queensland, New South Wales, the U.S. and potentially in New Zealand. So I think the chap that asked that question, I think that's the response that we're actually very optimistic about the opportunities that sit in front of us because all of the criteria and the reason for being for Transurban today, as I indicated in my speech, are, in fact, even stronger than they were when we listed in 1996. So any questions in the room? Mike.

We do you have a question from Michael from the Australian Shareholders Association.

Good morning. My name is Mike Muntisov, and I'm a volunteer representing the Australian Shareholders Association. Today, I hold proxies from 277 security holders accounting for approximately 1.9 million votes. And thank you to those security holders who appointed us as their proxy. I have a couple of questions to start. You've mentioned, in fact, just now several projects due to open shortly. And I'm sure people in the room are very looking forward to the opening of the West Gate Tunnel after several years. But something you haven't discussed is the impact of the Western Sydney Airport, which is due to open next year. What does your modeling suggest will be the impact on revenues of this airport opening.

I'll pass that to Michelle. I think she's the appropriate one to answer. Thanks, Mike.

Thanks, Michael. So that part of Sydney is experiencing very significant growth -- a quite significant population growth, new business formation. So it's quite a growing part of Sydney. When we announced the project, what we explained to the market was during construction, we probably have about a 5% impact on traffic. And then from that lower base, it would increase about 10% on opening because the congestion was already in that corridor. So we're expecting quite a quick ramp-up.

Yes. I was more referring to the airport itself. When the airport opens, in terms of what do you expect would happen with revenues, toll revenues in your network?

So we'll get -- not much of that project was actually dependent on the airport. It provides a very important connection into the airport. But for us, the real value in that project is actually the congestion that already exists in that corridor.

But what about diversion from the current airport? I mean how does that all play out?

It was very small component. Yes, very small component.

Okay. You flagged some development opportunities in the U.S. That doesn't necessarily mean you'll need to raise capital if you're successful. But should a capital raise be required for any reason, the ASA advocates for the fairest method of raising for all existing security holders, and that is a renounceable entitlement offer, such as the PAITREO and we note that Transurban has been an exemplary user of PAITREO in the past, and we thank you for that. What's Transurban's current view on methods of capital raising?

Mike, look, you're absolutely right. We have been and we are always very focused on all shareholders and not just one group of shareholders. So that is always a conversation between the executive and the Board. And we have favored PAITREO and renounceable rights issues in the past. And all things being equal, if we were to come to market at some point, but I can tell you now there are no current plans or expectations that we will be coming to market in the foreseeable future. But if that changed, that would be the starting point. But it would be contingent on the size of the capital raising if we were ever to go for a smaller capital raising or a larger capital raising. So I think we need to have retain flexibility, but your premise of making sure that we are fair to all shareholders is the premise that we obviously start with.

And maybe, Chair, if I can add. We do have quite a lot of organic capacity as well. The Chair commented on the strength of the balance sheet. And as we continue to drive performance of the business, that will create more and more organic capacity as well.

Thank you, Mike. Are there any more questions in the room? No. Any questions online, Fiona?

Chair, we've received no further questions online.

Okay. Thank you. Excellent. So if -- as there are -- oh, Mike, you're coming back for a second. That's okay.

I thought there might be some other questions, but seeing there isn't I seem to have a monopoly on the questions here.

That's okay.

I have a question for Sarah Ryan, Sarah. The company policy is for directors to purchase Transurban shares to the equivalent value of 1 year's fees over 5 years, which works out at about 15,000 shares. Sarah's shareholding in the company is lagging on a pro rata basis. And last financial year, she purchased 1,000 shares. So we'd like to understand what Sarah's plans are going forward in terms of purchase of shares.

So Mike, I might take that question because we do discuss this in the boardroom. At periods of time through any particular year, and that's certainly been relevant for us when we're in negotiations with, for example, the New South Wales government. We have blackout periods because we're uncertain as to what the exact outcome may be at the exact point in time. As Michelle said, we're very confident and very happy with the progress and the relationship with the government and also the progress that we're making. But we take -- at a Board level, we take a fairly cautious approach to directors engaging in either buying or selling shares or management buying or selling shares. So I think it is fair to say that our blackout periods in the period of time that Sarah has been on the Board have constrained her ability to purchase. But one thing I can guarantee is that Sarah, like all directors, will meet their obligation as is currently stated over a 5-year period. They will have a minimum of shareholding to cover their fees. So I can guarantee that. We have one more question in the room, I think. Yes.

Chair, can I introduce John O'Leary.

Morning, John.

Morning. Looking at the report, I think it was early August, I was actually pleased with what I read. And I read the newspapers and -- my question is Melbourne is approximately 1.1% growth, and you refer to mainly airport traffic and weekend travel. There's talk of legislation for working from home in Melbourne. So I was curious to know your opinion on proposed legislation from working from home. And I wondered whether it would impact Melbourne's traffic. I can't have a feeling it might not, but I'm curious to know your...

John, it's a very good question and one that we have talked about inside the boardroom. And what I can say to you is currently in Melbourne CBD, the -- on average, people are coming -- currently coming to work at about 3 days of the 5-day work week. And what is being proposed, there's clearly a lot of water still to pass under the bridge on that potential legislation is -- wouldn't make any material change to that outcome. And I do note that the September quarter of this current financial year, we've just reported today that traffic growth in Victoria was up 3.1%. So it has recovered. I would say the lower number you referred to, which is absolutely spot on, was fairly heavily affected and impacted by construction activity in and around the West Gate and CityLink projects. That is now beginning to clear. So from our point of view, I think having flexibility -- always having flexibility both for the employer and the employee is the ideal circumstances, but we're not expecting if there was legislation, and I'll pass to Michelle for an additional comment. But if there was legislation, we're not expecting a material impact.

Maybe the only other thing I'd add, Chair, is with the new West Gate Tunnel project opening, that's in a real growth part of Melbourne in the west and it has a whole different reason for being. And so just to add that to the Chair's comments as well.

Thanks, John. Fiona, any other questions online?

Chair, we have no further questions online.

Okay. As there are no more questions, that concludes our discussion of each of the items of business. Security holders and guests that concludes the business of the meetings, and all that remains now is to complete the poll by submitting your votes. If you have not already done so, please complete your voting now. And once again, we have displayed on the screen the proxy instructions for each item of business. For those attending the meeting in person, please lodge your completed voting cards in one of the collection boxes located near the exit. If you require any assistance, please raise your hand, and as I've said before, a representative from Computershare will help you. The poll will close in 10 minutes after the conclusion of the meetings, and rather than delay the closing of the meetings, the results of each poll will be announced to the ASX and published on Transurban's website once the votes have been counted and checked. [Voting]

I thank all of you for your attendance and participation at today's meetings. Subject to finalization of the poll, I declare the Annual General Meeting of Transurban Holdings Limited and Transurban International Limited, and the meeting of Transurban Holding Trust closed. And for those people attending in person, I hope you are able to join me and the other Transurban directors, together with senior execs for refreshment in the foyer. Thanks for your attendance. Cheers.