Tyro Payments Limited (TYR) Earnings Call Transcript & Summary

Okay. Well, good afternoon, and welcome. On behalf of all my fellow directors, it's wonderful to have you here at Tyro's 2022 AGM. And as many of you know, my name is David Thodey, and I am the Chair of Tyro. Before we begin today, I want to acknowledge the traditional owners on the land on which we meet, the Gadigal people. And I have been reminded, as I've gone to a number of meetings over the last -- really month, I mean it is important that we celebrate the indigenous people of this country and actually celebrate them. I mean it's a recognition but also a celebration of, I think, the wonderful culture that we haven't inherited and how we move forward with reconciliation. And for all those who are joining us from different locations I, too, would like to pay my respects to elders past and present of the lands on which you are meeting. Well, it's great to be back in person and to see people face-to-face as someone said to me, see the whites of each other's eyes. While we are webcasting today and there's a number of people online, it's great to have people here. But I do recognize that it's always a bit difficult with these hybrid meetings, and I'm sure you've all went to a lot of AGMs just getting the balance right so people can ask questions and participate. So as such, we're going to take you through some of the technical aspects of just how the meeting will run. And -- but I really would encourage you -- we do want questions because there's lots going on in the business, and this is your opportunity as shareholders to ask us, and we appreciate questions and really do want to try to answer them the best possible way. So I'm delighted to say I'm joined by Jairan Amigh, just on the -- on my left, who's going to take you through the technical aspects. And if you have any question on this aspect, just ask her, not me. So Jai, over to you.

Sure. Hi, everyone, and welcome. So for voting today, all the resolutions will be voted on by way of poll using voting cards. So for everyone who is present here today, please use the voting card that you were given when you registered and arrived. For online shareholders, you'll need to register to vote first in order to access your voting card and you'll do that online. To do that, please go to the bottom of the Tyro web page that you are currently on. Under the webcast and presentation, there are 3 boxes. Click on the get a voting card button. Next, you will need to validate your registration by entering your details on the top section of the voting card, which provides providing your shareholder number, SRN or HIN and your post code. If you're an appointed proxy, please enter the proxy number issued to you by Link Market Services in the proxy details section. Once you've entered your appropriate details, click the submit details and vote. Once you've registered, your voting card will appear on your screen and as well the detail of the resolutions to be voted on today. Shareholders and proxies can either vote a full vote or partial vote. So questions. Only shareholders can ask questions, and that obviously includes your proxy -- proxies and corporate representatives. You'll only be able to ask a question if you have registered to vote. For shareholders present at the meeting, when the Chair asks for questions, please raise your hand and a meeting attendant will come over with a mic so that you can ask your question. For shareholders joining us online, if you would like to ask a question, click on the Ask a Question button the Tyro AGM web page and follow the instructions from there. For those shareholders joining online, who wish to ask a question verbally, there is an audio question facility available. To use this service, please follow the instructions contained in the online meeting guide. This guides on the Tyro AGM web page as well as Tyro's own website. We'll endeavor to answer all the questions that are asked, but if there are questions that are on a similar topic, we will group them together and provide 1 response. We'll try to do that as best as we can. If you have any trouble using the virtual AGM meeting platform, please refer back to the AGM online meeting guide, which can also be found on the Tyro website or contact the help lines shown on the screen now. If we experience technical difficulties that impact the ability to continue with the meeting, the Chair will assess the circumstances and communicate further with you. If this isn't possible, we will send you an e-mail with instructions about when and how to rejoin the meeting. I hope that's clear. Handing back to you.

Thank you very much, Jai, Company Secretary. So let's get into the meeting. So I want to introduce the non-executive directors up here on the stage. So firstly, David Fite, who's been a long-term Director; then we have Aliza Knox, and Aliza has been on the Board now a couple of years; Paul Rickard, who many of you will know; Claire Hatton; and your new Chair elect, as we announced this morning, we'll come back to Fiona Pak-Poy, and I'm also delighted to introduce Jon. Jon has now been in the role for [indiscernible]. Just feels like a long time, Jon, doesn't it? Yes. But it's great to have Jon in the chair. He's doing really well, and we're very excited about him. But I also want to welcome a number of the senior team here as well. I won't go through all of you, but it's great to have you here. And if we can't answer your questions, we'll throw to the leadership team. And also, I'm delighted to welcome Michael Byrne from EY, who's our auditor. And he will be able to -- also handle any particular questions you have. So the agenda for today, so I'm going to give a presentation, then Jon is going to give a presentation, then we'll go through a number of resolutions, and we will have the remuneration report, I'm going to say Fiona will present that. We have 5 items of business we need to get through today. And I think we'll be able to hopefully get through those. With enough time, we will pause at the end and give you opportunity to ask questions. So we'll take each one as -- and then you can vote. So we don't -- so leave everything to the end. You should have a copy of the annual report we sent out on the 29th of August and the notice of meeting, which was provided you on the 24th of October. And look, we need to take those documents as read as you would understand. So I think that sort of covers of all the administrative side of just the process. So let me now turn to my presentation. And just before I actually give you the presentation, I do just want to address Shefali Roy, who is in London, who I forgot to introduce. So Shefali, are you up on the screen? Shefali is the other Board member, and I forgot to check, because she's in London time. She -- there she is. I'm not sure what time it is there, Shefali. It's probably something extraordinarily...

3:30 in the morning.

3:30 in the morning. So there's dedication for you in terms of a good director. So Shefali, great to have you here on the Board as well. So I do want to start off by -- just addressing, and some of the activity that we've had in -- at Tyro. And this is around the unsolicited approaches we've had. And I think it's important that we really just talk about this because we've had several parties who have approached us, and we continue to engage really on a preliminary basis. And it is for us about maximizing shareholder value. That's what we are here to do. And I do just want to note that these offers are nonbinding and indicative, and therefore, they still have a lot of uncertainty around them, but we will consider them because that's our job to do. You would be aware that over the last 12 months, as bond yields and interest rates have started to increase, many investors have changed their focus from high-growth revenue companies to more of free cash flow and profitability perspective. And this shift in value dynamics has had a really significant impact on Tyro because we've always been a high-growth company. We started what, nearly 2 months ago at $3.76 and you would not be surprised that we've got down to $0.60. And we felt very strongly that, that did not reflect fair value for this company. So we undertook quite a significant revaluation or another look at the company, and we've done a significant amount of work, really look at the intrinsic value in the company. And we think that, as you look at the growth prospects and as we look at the whole Australian payments industry, that Tyro has a unique place, so our expectations to achieve strong and improving operating leverage in the near term and that we believe that we are well funded and [ carefully support ] our continuing growth opportunities and ambitions. So I think that the results we've achieved in the first 4 months of '23 and our '23 guidance are a clear indication that Tyro is now on a path to profitability and positive free cash flow in the near term. As such, whilst the Board will consider credible change of control proposals, we'll only bring it back to shareholders if we believe the proposal does represent compelling value to all shareholders. So I just wanted to really cover that off right at the beginning because at the end of the day, we do understand it's your company, and we respect that. So let me now provide a quick overview of the business and how we're traveling and then I'll pass over to Jon. So '22 was another challenging year for Australia and internationally, and we've had to deal with a lot of things around geopolitical tensions. Obviously, interest rates have gone up, you'll had COVID. Just remember, only 12 months ago, we still had COVID and that had a big impact on our business. And with the heightened inflationary pressures and also global supply chain issues, which have really impacted some of our business, it has been challenging. Unfortunately, I can't say that 12 months gives you a lot of stability in terms of the future. We don't know. So we have to be agile and ready to respond really as the economy changes. However, we are taking action. What has stood out to us really has been that the resilience of small and medium businesses in our merchants that really has been quite a telling factor that how strong they've been through this period. And we see the reactions in terms of transaction volumes and how they're going as we go forward. However, there's no guarantees as we go forward. So the light of these changes and top line performances, we remain very positive but cautious about the future. As you would understand, our business really works at a completely different scale when we actually listed back and remember, it was only December 2019 when we did it. So that's what, 3 years ago, and it feels like more like 5 years with all the things with COVID we've been through. We've nearly doubled our annual transaction value from $17.5 billion to $34 billion, which has been, I think, a great testament to the management team. And when you start to look at in terms of annualized growth, that's 25% compounded growth over the period, which is really strong. We have more than doubled the number of merchants from 29,000 we had at IPO to 63,700 and that's as of 30th of June. And we now have over 100,000 terminals that reinforces our position as the fifth largest payments company in Australia. Now our aspirations remain large, and we are very conscious that as we increase scale, we need to increase profitability as well. And I'm pleased to say that we're seeing increase in EBITDA, but also we're looking at free cash flow positive as well. But the payments for the industry is very large. It's what about $668 billion. And it's ever-changing, lots of technology providers in this market. But the fundamentals remain very strong because the cash is becoming less and less prevalent. I mean many of us don't carry cash anymore. We continue to see e-commerce payments and QR code payments growing enormously. And because we only represent 5% of the market share, we think there's enormous opportunity to grow as we go forward. We are seeing a greater appetite for micro and small business to really adopt new payment technologies, and we think this is very exciting. And that's why we continue to focus on these core segments of the market where we can really build differentiation as we go forward. I do want to just say our fundamental value proposition remains the key driver of our growth. Because we offer payments products that are fast, reliable and cost effective and for our merchants compared to others in the market. And so we've got to remain competitive as we go forward. So the release, which you would have seen out here, of our Tyro Go terminal and the Tyro Pro terminal, I think, is very exciting in terms of the growth that we're seeing in terms of the opportunity to refresh the product set. Our banking license continues to provide us with great deposit and lending products, and we think that is very strong as we go forward. And it's a great value proposition to take to our merchants. But we need to continue to maintain tight cost control as we go through this period. And we're seeing now as well that the product innovations can really make a difference. So we do think that we have very strong products in the market, and we're now at a point where we need to take a balanced view going forward around profitability and free cash flow as I mentioned. And you would have seen that we announced a cost reduction program, which is about just being leaner and driving operating leverage going forward. Now I'm pleased to say Jon has really settled into the CEO role incredibly well. He's driving real organization and cultural productivity changes. And I think this is setting us up for a really great next stage in our growth. We have reforecasted our operating leverage back to 82% for full year '23, and we will exit full year '23 on a positive free cash flow basis. Now that's a significant milestone. But Jon is going to provide you more update on that as we get into the session today. Okay. Just a few more topics for me to go through. I do want to just talk to the terminal connectivity issue that is now nearly 2 years old. And I do just want to give you an update because when we went through that, that unfortunate experience, we also had a short seller come into the market, and we have been very focused on that through that period of focusing on our customers more than anything else. And I've got to say that I think it's really resulted in some great results because when you look at our results, our churn levels have not changed through that period. And that's a great credit to the management team as they've really focused on the customer more than anything else. And I do want to stress, all financial impacted merchants were invited to register with Tyro to enable remediation claims to be assessed. To date, we've engaged with all merchants who have sought remediation and settled claims to the value of $5.2 million. In October '21, we were served with proceedings filed in the Federal Court of Australia in relation to the terminal connectivity issue. Our defense of those proceeds continues to progress through the court. Notwithstanding those proceedings, Tyro's remediation program remains open for merchants claiming any impact to register remediation by contacting Tyro. We are confident that the remediation program will bring a swifter resolution to any claims in the class action and will avoid unnecessary legal and litigation funding costs and delay any benefits to merchants. So I just want to be very clear on that. So we made the door as open. So let me just talk to sustainability, diversity and the changes on the Tyro Board. We are committed to building a sustainable business both financially but also with a strong social conscience, and we are focused on delivering solutions that create a sustainable future for all stakeholders. We have also recently undertaken a significant amount of work to understand how cybersecurity risks that could happen to any organization in Australia how we can be best prepared. We take our privacy and data protection obligations very seriously, given the large amount of transactions that we process. And I can provide shareholders with a level of confidence that I can never provide 100% confidence in terms of the actions we are taking. This is just a difficult area for every company and also individually in terms of making sure that we're as cybersecure as possible. However, it's a high-risk game, unfortunately. So very important for us. From an environmental perspective, we are focused on reducing Tyro's impact on climate change. And whilst we are not an intensive emitter of carbon dioxide or carbon monoxide, this year, we will become a net zero carbon neutral business by signing the Climate Act of Australia initiative and developing our first formal emissions inventory. Now I do want to stress that we are buying offsets for that but our plan is to get to true net zero as soon as we can. We're also focused on assisting our merchants to better understand their commitments as well and how they can face into their carbon footprint and what they can do by developing ideas that consist them on their journey. This is just the start of the move and having been involved in this area a lot, especially around Scope 1, 2 and Scope 3. This will take a lot of hard work as we go forward. But we are committed to that journey. Next is diversity. At Tyro, we really do try to create a safe, inclusive and welcoming environment for all employees. We recognize that our merchants and the community in which we operate are diverse and very multicultural, and we're committed to ensuring that our team reflects this very diverse community that we serve. In '22, we introduced our first-ever cultural diversity survey within the organization to better understand ourselves and how our broad-based diversity compares to the community in which we operate. We have initially looked at the cultural diversity of our Board, and you can see the Board here today and the executive leadership team, and we will implement initiatives through '23 across our entire team. The learnings from these initiatives will guide our thinking and setting our targets for a broad-based diversity rather than just purely on gender, but I do want to stress, gender remains a very important aspect of diversity. We're making progress but always more work to do. As I did mention, we do target representation of women at 40:40:20. 40% men, 40% females and 20% floating. And I'm glad to say that we're approaching those objectives. So that's around diversity. Let me now just turn to the Board, and then I will pass over to Jon. So over the past 3 years, we've undertaken a real renewal of the Board. In 2019, many of you would remember, Kerry Roxburgh as the Chair, Catherine Harris and Hamish Corlett, who all retired in 2021. We were pleased to welcome Aliza Knox to the Board. And more recently, in January '22, we welcomed Claire Hatton and Shefali Roy, who you see up here today. Claire is based in Sydney, and she has extensive experience, spanning senior executive and country leadership roles in technology and travel businesses in Asia and the U.K. She brings extensive commercial leadership experience at Tyro and is well versed in digital technology. Shefali has extensive C-suite senior leadership roles in operations and compliance and regulatory affairs and our global multinational companies like Apple and Stripe, and she'll say more about that. And she brings a wealth of technology expertise and knowledge, especially from the U.K. where fintech is so prevalent. As announced this morning, I have decided to resign as a board member and Chair of Tyro effective the 1st of March 2023, and that's to take up some new opportunities. The Board has been working over the last 12 months to make sure that we have extensive succession plans in place for both the Board but also for management. And after due considerations, I'm absolutely delighted to confirm that the Board has unanimously concluded that Fiona Pak-Poy, who has been Non-Executive Director for over 3 years and also Chair of the People and Rem Committee, and has enormous experience will be taking up this role in March. Fiona, you really, I think, is a wonderful person to take the company forward, and I really wish her all the best. And I've had a great time. I've really enjoyed my time here. It's been ups and downs unquestionably, but it has been an incredibly satisfying time. I wish that the share price is a little bit stronger, but maybe the markets will change, but that we will see. So I'm sure that we are leaving Tyro or I'm leaving Tyro in really good hands. And I think that it's an exciting time for the company. Paul Rickard also has kindly agreed to offer himself for reelection today, and he will be speaking to that as well. And Paul has been a very strong member of this Board. So as Chair of the Board, I'd like to thank all the Board members for their wonderful commitment to all the management team, to all the people I've worked with. It has just been a real pleasure, and I'm looking forward to the next couple of months and then saying a fair well to all the Tyro employees who have done so well. I thank you, the shareholders and all our other partners for your ongoing support. So that concludes my address. So let me now hand over to Jon, who will take you through a bit of an update on the business. So Jon, over to you.

Thanks, David, and good afternoon to our shareholders and guests. It's a great pleasure to be joining you today for my first AGM as CEO. Before I summarize our results for the 2022 financial year, I'd like to provide you with an overview of my first 50 days as CEO and my vision for the next stage of Tyro's growth. I first came across Tyro in 2015 when I was working for one of Tyro's major bank competitors. I was immediately impressed by Tyro's use of technology to reinvent and disrupt payments in Australia. Tyro had a fantastic reputation across the SME sector, providing customer-centric solutions that weren't offered by the traditional payments providers. The innovative technology and products Tyro offered were world-class and continue to position the business strongly today. However, over the past 5 years, we've lost some of our innovation focus. And increasingly, we're viewed as a more traditional provider of payment and cash flow management solutions. Our challenge, which I'm determined to address is to regain our mantle as Australia's leading payments, innovator and disruptor. With the benefit of almost 18 months on the executive team and 2 months as CEO, I have a clear understanding of our strengths, our potential and the issues that need to be addressed. In the past 2 months, as David indicated, we've started to make several operational changes, which are repositioning our business and recapturing the spark that has been so critical for our success. Firstly, on October 10, I announced the program to reduce our FY '23 operating cost base by $5 million, which equates to delivering an annualized $11 million saving. Our cost base was too large for the size of our business, and I believe that with a leaner, more focused organization, we'll prioritize initiatives to deliver measurable benefits while creating the required operating leverage and profitability. We've prioritized the realization of savings on discretionary expenditure and nonrevenue-generating parts of our business. This includes a reduction of almost 10% in total headcount. I'm confident the approach which we have taken will have no impact on our ability to deliver strong transaction value and merchant acquisition growth while continuing to support our investment in innovative products and services. Secondly, we focused project delivery on the initiatives we need to maintain and strengthen our market competitiveness. These are foundational in nature, and they provide a strong base on which we can build new customer experiences and drive operational efficiencies. We've prioritized and accelerated the rollout of our new Tyro Go card reader, which you may have seen in the foyer at the start of our session today, deployment of our new Tyro Pro Android-based terminals, and our new digital customer onboarding and servicing capabilities. The Tyro Go reader is now available to all of our existing and all new merchants. As of last Friday, we had 624 devices in production and being used by customers. Our Tyro Pro terminal has completed field tests and is in pilot 2 weeks ahead of our December forecast. Our digital onboarding process has also gone live for customers applying for Tyro Go. The digital onboarding of further products will be deployed in the coming months with Tyro bank account to go live before Christmas. These products offer a compelling and competitive, delivering an improved customer experience and significant operational cost benefits. However, we also recognize that the payments landscape is rapidly changing, and we've plans to move beyond card-based payments and into other acceptance approaches. This includes account-to-account-based payments that leverage capabilities made available and possible through the new payments platform. We will also leverage our banking license to deepen the relationships we have with customers by providing lending services such as those available today by our merchant cash advance, a transaction banking account, and we will continue to enhance our deposit product offering. I'm really excited about the future, and I look forward to regularly updating shareholders on our new products, product features and services as we bring technology and innovation focus back to their business. As David mentioned, the interest that we've been having from external parties in buying our business is not distracting us from delivering for our shareholders and customers. We have a small team that is supporting ongoing discussions with the broader Tyro team completely focused on driving performance. As I remind the team, the interest in our business reflects the value and the wonderful potential that others see. We have a duty to maximize that value by running the business as efficiently and as effectively as we possibly can. Now moving to our FY '22 financial results. Despite the year being difficult due to the ongoing impacts of COVID, we grew our merchant base by 10% and are proud to say that by the end of FY '22, we service more than 63,000 Australian merchants. Tyro's core business, excluding Bendigo, grew by 16% in a period significantly impacted by COVID lockdowns. We increased the value of transactions processed by 34% to reach $34.2 billion, of which our Bendigo Alliance contributed $5.2 billion. This outperformed our forecast when announcing the alliance in October 2020. Our revenue increased by 37% to $326 million. We increased our normalized gross profit by 24% to $148.5 million, and we booked an EBITDA result of $10.7 million, noting our first half EBITDA was $2.8 million, and our second half result was much stronger at $7.9 million. As noted, our performance was dampened by the COVID lockdowns in New South Wales, Victoria and the ACT, which cost Tyro an estimated $5 billion in forgone EBITDA in the first half. Our second half provides a far better line of sight to Tyro's momentum and includes benefits from action taken to manage operating costs during the second half and the implementation of a pricing change in March 2022. These actions positively contributed to the last quarter FY '22 results and helped deliver an improved operating leverage. These margin improving actions as well as the changes I have outlined over the past 2 months are providing us with further operating leverage improvements that I will discuss as part of our trading update. Pleasingly, the changes we have implemented have had no impact on top line growth. Although we operate in a highly competitive industry, over the past 5 years, Tyro has continued to capture segment share, growing by 7x the card present growth rate. This has seen our segment of card-present payments reaching 5% on 30 June 2022 and our share in SMEs -- share for SMEs in hospitality, retail and health reached approximately 19%. Including Bendigo, we ended the year with 63,770 active merchants. Our health business, and you may have seen our health offering again in the foyer before today's presentation. But our new health business, which incorporates Medipass added 2,262 new merchants seeing us end the year with over 12,000. These merchants processed $3.3 billion in payments. Merchants in our 3 core verticals, hospitality, retail and health, represented 85% of our active merchants and made up 91% of our merchant value. Our strongest transaction growth was in our hospitality vertical, which grew by 18%. Health was up 17%, while our retail vertical grew 12%. eCommerce transactions, which are an increasingly important part of our business, continued to grow to $520 million, up from $70.3 million in the prior period. New merchant sign-ups tracked at approximately 1,200 applications per month with 55% of leads coming to us through digital and telephone channels and 45% through our partners. We now have 348 direct point-of-sale integration partners, up from 322 in the previous year. During the year, we also entered an exclusive partnership to provide merchant acquiring services to Telstra's business customers through more than 350 Telstra resale stores and Telstra business and technology centers as well as online. This channel has performed above expectations, and we're confident that it will prove to be a strong acquisition channel for Tyro moving forward. Turning to banking. Although banking represents a small part of our business, it offers an important cash management solution for merchants and one where we see continued strong prospects for growth. Our Tyro Bank Account is a fee-free interest-earning transaction accounts. We have more than 5,000 merchants actively using the Tyro Bank Account, which is up approximately 11% on the previous year. We had $83 million in total deposits at 30th of June, up from $75.5 million a year ago. Our term deposit product, which is available to customers through the Tyro App, held $4 million in deposits at 30th of June. Our unsecured loan product is designed to help SMEs grow their businesses. Loans are repaid from a percentage of card transaction values generated by the business as selected by merchants. The innovative feature of this product is that the repayment value cycles up and down in alignment with the merchant's daily cash transactions. We wrote just under $100 million in new loans for the year compared to $26 million in the previous year. The average loan size in the year was $47,000 compared to approximately $35,500 a year ago. Average loan terms have remained consistent at 6 months. Lending losses for the year were $600,000. The year ahead. So in FY '22, we performed a detailed review of Tyro's capabilities, payment industry trends and opportunities for growth. As a result, we've refined our strategic plan. As I've noted, we're making good progress on 3 strategic priorities for FY '23, Tyro Go, Tyro Pro and automated onboarding. Having delivered these foundational initiatives, the key focus for the remainder of FY '23 is to ensure our new terminal and reader form factors, provide the same level of integration into our POS systems as our existing terminals. We'll also turn our attention to mobile point-of-sale acceptance, continue to invest in third-party funder integrations for our health business and scale our banking business to utilize our valuable banking license to its full extent. With the annualized $11 million reduction in our cost base going forward and our focus on increased productivity, we're well positioned on our journey to profitability and positive free cash flow. As we've guided the market, we're aiming to exit FY '23 and positive free cash flow. Together with the Board, I will continue to focus on making productivity and efficiency improvements, which we can implement without impacting our strong growth profile. At the FY '22 end of year results, we provided earnings guidance for the first time. Following the announcement of our cost-reduction program in October, we updated our guidance, reducing operating leverage from 85% to 82% and increasing EBITDA to a range of $28 million to $34 million, which was up from $23 million to $29 million. Today, I'm pleased to confirm that we're tracking towards the top end of all operating metrics provided. We've generated transaction value of $14 billion to 31st of October, an increase of 52% on the prior corresponding period. Our hospitality vertical is delivering exceptionally strong growth at 87% versus the prior period, with growth in our retail and health verticals also strong at 38% and 36%, respectively. Over the first 4 months of this financial year, we've averaged 1,440 new merchant applications per month, bringing our total merchant count to 67,205. We've achieved loan originations of $48.7 million, up 137% on the same period last year. At a group level, gross profit year-to-date of $61.9 million was achieved, up 57% on the comparable period. Group EBITDA before share-based payments came in at $10.4 million, and our year-to-date operating leverage is 83%. These are strong results and do not yet include the $5 million in cost savings announced at the start of October. We are, however, tempering our expectations. We remain cautious of the broader macroeconomic environment and the impact of interest rate increases to spending in Tyro's key hospitality and retail verticals. We must also flawlessly execute initiatives, which are critical for the realization of operating expense savings. Although the headcount reductions of the past month have presented a challenging period for our team members, this process and our renewed focus on the delivery of critical initiatives has provided clarity to our team and our shareholders on my ambitions for a leaner, more focused Tyro. My vision is that we return to our fintech routes. We are an innovator who uses technology to deliver faster, more secure, more reliable, customer-focused payment and banking services. I'd like to thank the fantastic team at Tyro for embracing this vision. I'd also like to thank the Tyro Board and for this exciting opportunity and for the support they've given me. Back to you, David.

Thanks, Jon, for that very thorough update. So that's really great. Okay. So now we turn to the formal part of this meeting, and it's all contained in those meeting, and we've got 7 ordinary resolutions are requiring a more than 50% majority to pass by shareholders entitled to vote and voting. As we move through the voting for these resolutions, if you have any resolution-specific questions, we'll take the questions then. But if you got general ones, we'll save them until the end, as I think that provides the best way forward. After consideration of all these general questions, Jon will also be available for any questions as well. So let's now go to the financial report. As mentioned previously, while no resolution is required in relation to the financial report and directors' report and the auditors' report, I now invite shareholders and their proxies to comment or ask any questions in relation to these reports or the group's business. Questions may also be asked of our auditors, and Michael is here in the front seat, in relation to the conduct of the audit and content of the audit report, the accounting policies adopted by the group and the independence of the auditor in carrying out the audit. So with that, are there any comments or questions in relation to these matters? So the way I'll do it is I'll throw over to questions, and I'll wait for 10 seconds for them to come, and then we will move forward from there. So are there any questions? Always hard to know 10 seconds, but, Jai? There are no questions online. So with that, we'll move to item #2, which is the adoption of the remuneration report. So there's a remuneration report for full year '22, as you can see on the screen. As indicated I intend to vote or undirected and discretionary proxy votes held by me in favor of the resolution. The group's remuneration report for the financial year ending '22, which forms part of the Tyro Annual Report is available on Tyro's website, and it outlines the group's remuneration strategy and practices together with details of the specific remuneration arrangements that apply to key management personnel in accordance with the requirements of the Corporations Act. As required by the Corporations Act, the Board presents a remuneration report to shareholders for consideration and adoption by a nonbinding vote. The vote of the adoption of the remuneration report is advisory only and does not bind directly to the company. And while it is advisory, I do want to stress that we take your feedback very seriously, and it would go into any considerations as we go forward. But before I do that, I think it's a great opportunity to get the Chair of the People and Remuneration Committee, Fiona Pak-Poy, to come and just take you through a bit around the framework and the way we're looking. So Fiona, over to you.

Thanks David. Okay. A little bit embarrassing. I have to stand on the step. David, you have very big shoes to fill in more ways than one. Thank you very much, and welcome, everybody, to those in person and to those online. I'm very pleased to present the FY '22 remuneration report to all the shareholders today and briefly to highlight the key changes that we made to our rem report and the framework and the way we worked in 2022. The past 3 years have presented us with numerous challenges. As you all know, COVID-19 pandemic, the terminal connectivity issue, which we suffered through and dealt with in January '21 and an increasingly uncertain macroeconomic environment that we face today. Through all of this, our Tyro team has truly been tested, and I am pleased to say that our team has emerged stronger and continues to deliver quality products and services to all of our 63,000-plus merchants, which is evidenced in the growth delivered for the year. In FY '22, our team developed a new 5-year strategy, including a refined vision for the business, and we introduced a new value, Win Together, which you can see up on the slide. This new value complements our existing values and recognizes that to achieve our vision, we can only do so by being a united team with a growth mindset that embraces diversity, enabling us to collaborate, innovate and accelerate. Since Jon's appointment 50 days ago, roughly, the Win Together value has clearly been demonstrated. The entire Tyro team has pulled together as one, and we're pleased to say that we've seen a really reinvigorated sense of energy, drive and commitment to deliver an innovation, which is very encouraging to the Board, and you can see evidence of some of that out in the hall. We believe this plays as Tyro in an excellent position to deliver on its short- and long-term targets. We introduced a new approach to flexible working in late April 22, like many companies in Australia, and our approach was to adopt what we call a remote-friendly as opposed to remote-first method and this means that we recognize that workplace flexibility is about more than just remote working. Employees can choose when they want to come into the office, but it does need to be balanced with the needs of their teams and the business more broadly. And this is emerging as we all move into the next phase of post-COVID. We moved into our new offices in Sydney in April 22, just down the road, Market Street, which was necessitated by our previous lease coming to an end at the end of 2021. Our new Sydney headquarters is fantastic and you're all invited to come visit someday, if you'd like, has been designed with flexibility in mind, enabling team members to do their best work, whatever that be, whether it's focused meetings, conversations, attending company-wide all-hands sessions, like on the photo of the bleachers here, catching up with fellow Tyro at lunch, a game of table tennis or Friday drinks. The energy that this move has brought back to our team after the extended lockdowns that we all endured during COVID has been really refreshing to see. We'd like to create an even greater place to work and grow where our strategy, purpose and values are truly alive, and all the Tyros are empowered to deliver their best work and drive amazing outcomes for Tyro and our customers. The Board has made a number of remuneration decisions in FY '22 to firstly, better align remuneration with shareholder wealth creation, which is ultimately the most important thing but also are placing a greater focus on linking remuneration to performance and retention, and retention has been difficult in this climate of a tech war, that's right, talent war. The changes made to the remuneration framework in FY '22 was supported by refreshed market data for key roles. We better aligned our incentive schemes to the delivery of targets, both from a financial and a merchant satisfaction perspective with added waiting place on merchant satisfaction metrics in FY '22. To further attract and retain talent, we introduced a long-term retention incentive plan in the form of service rights for all our team members, excluding the executive team we refer to as XLT. Following engagement with stakeholders on the FY '22 long-term incentive plan, the Board has refined the FY '23 LTI plan by amending the financial performance hurdles to applicable -- sorry, hurdles applicable to vesting for the plan. 50% of the plan is now -- will now vest based on the achievement of EBITDA performance hurdle in FY '25, while the new performance hurdle representing the remaining 50% of the planned award has been added based on the achievement of the total shareholder return ranking relative to the S&P or Technology Index at the 30th of June 2025. We received this feedback loud and clear from many of our shareholders last year, and so we thought it was important to incorporate. With respect to the annual salary reviews conducted in January 2022, we provided our team excluding the XLT with an overall average remuneration increase of 4.3%. XLT were provided with an average increase of 8%. Our stated strategy is to provide fixed annual rem between the 50 and 75th percentile based on independent benchmarking with technology roles, obviously skewed toward the higher end of the range because of the competitive nature. The overall FY '22 STI outcome came in at 46% of target were as 89% in the prior year with a total STI of $4.9 million paid to employees. Of this $2.1 million was paid in cash with the remaining $2.8 million issued as rights. The significant decrease in the FY '22 STI outcome relates to the company not meeting the target for the financial component of the plan as well as not meeting the threshold for certain merchant satisfaction metrics. While this is disappointing, we do want to confirm that as a people committee and as a Board, we do stick to trying to really deliver shareholder return and understand that we can only reward employees for outperformance. The FY '22 LTI plan was made available to 77 employees made up of executive KMP, the XLT and key employees identified by the CEO and the Board. Performance rights were granted in February 2022 to those employees with vesting based on achievement of a defined range of statutory EBITDA outcomes in FY '24. This plan is not due to be tested until FY '24 and as such, no vesting has occurred. Just to confirm, no vesting has taken place on the FY '19, '20 or '21 [ plans ] as the performance hurdles for vesting were unfortunately not met in FY '22. Since listing on the ASX in 2019, no changes have been made to the nonexecutive director fees until FY '22. In FY '21, the Board undertook a review of the nonexecutive director fees, and we received independent advice from external consultants, which highlighted that our total net fees had fallen below market fees -- sorry, individual net fees. So in order to ensure that Tyro remains able to attract and retain directors of appropriate skill and experience, as you can see with my colleagues, the Board resolved to increase base, nonexecutive director fees by 29.6% to be in line with market comparables that would commence in FY '22. The total fees, including this increase, along with the fees for our 2 new additional NEDs appointed during FY '22, is still well within the actual envelope, which is the director fee pool of $1.4 million approved back prior to the IPO. The Chair fees have not been changed for the prior year. We might have to look at that, David. We are confident that we've developed a robust and fit-for-purpose rem framework that serves Tyro well. It is aimed at furthering a high-performance culture by appropriately balancing fixed annual remuneration for all Tyros to award core performance as an STI that underpins achievement of financial and operating targets and an LTI that's focused on delivering long-term shareholder wealth creation. Looking ahead to FY '23, we are committed as a Board to continuously reviewing the effectiveness of our remuneration framework. As always, we welcome your feedback on the remuneration report. Just before I hand back to David, I'd just like to say thank you for your great leadership. I'm certainly honored to be elected Chair-elect by my colleagues and really wonderful Board, and I look forward with the rest of the Board and the management team to serving shareholders well and liaising with you in a very close manner. And please feel free to reach out whenever you like. Thank you.

Well done. Thank you. Thanks, Fiona, and thanks for all the work you've done, and I'm really excited about what you will achieve as Chair of Tyro. So now in terms of the remuneration report, I'm going to pause now and take any -- firstly, any questions from the floor or comments, and then we'll go online. So firstly, any questions from the floor on the remuneration report? Okay. We'll take that as 10 seconds. Jai, are there any questions from online?

Not specific [indiscernible]. And I don't know if you should just check the online moderator or...

Online moderator, any questions come in at all? None. Okay. So now we'll give you 10 seconds to those who need to vote who are online, and we'll just pause for a moment on that. [Voting]

Okay. Well, we now go to the next item, which is my reelection to the Board, which I'll explain why in a moment. But I need to hand over to Fiona to who will Chair this part of the meeting. So back to you, Fiona.

Thank you, David. Maybe I won't stand for this one, stand on my tippy toes. So moving to Item 3A relating to the retirement by rotation and reelection of Director, Mr. David Thodey. David Thodey can be seen on your screens now and in person. As Chair for this resolution, I intend to vote all undirected and discretionary proxy votes held by me in favor of this resolution. Clause 47A of the company's constitution provides a director must retire from office no later than the longer of the third Annual General Meeting of the company or 3 years following the director's last election or appointment. Additionally, ASX Listing Rule 14.4 provides that a director must not hold office without reelection past the third Annual General Meeting following the company's admission to the official list of the ASX, for 3 years following the company's submission to the official list of the ASX, whichever is longer. I'll now ask David to say a few words about yourself and your skills and experience that you bring to the Tyro Board.

Thanks, Fiona. Look, I know this seems a little bit unusual because I've announced my intention to resign. But because I announced it will be the 1st of March, we need a period where I'm still here as a director to assist in the transition period. And look, that's really important because we want to have a really seamless transition and make sure that we get the handover done. So I do need to say a few words about my credentials, which may be a bit after the events, really. But as you know, I have had a 40 years out in the technology industry. I've had the privilege to be a CEO of a number of different companies. And in my sort of nonexecutive career, I now span Zero Ramsay Healthcare, but also I'm very active in public policy as well because I do think that we all need to get back in some way, and some of you be aware that I'm doing a review of myGovID at the moment, which is if you've got any suggestions, please feel free to give them to me. But it is really important. But look, again, I've got to say that chairing the Tyro Board has been a real privilege. Wonderful group of people to work with, and they have really contributed enormously. It has -- as I've said, COVID was challenging as was the terminal outage. But I do believe strongly that if you remain focused on customers, and you remain absolutely -- sell us in representing the needs of customers, then you build great products, you innovate and you create a climate and a culture where you can do things that are great. And I -- it's hard to do, but it's -- if you can do it, it really does drive enormous value. And also, you do need good governance as a listed company. You need to act on behalf of all shareholders and irrespective of size, and you need to be there to represent their interest, and that's what this Board does. So I think I'll leave it there. Let me pass back to Fiona because you need to vote on the next few months. Okay. So over to you, Fiona.

Thanks, David. Are there any comments or questions into the -- sorry, in relation to the reelection of Mr. David Thodey. None online?

None online.

Did online?

Not on the telephone.

Okay. So I will now propose that Item 3A is set out in the notice of meeting to be put to a vote. I invite shareholders to cast their vote in this resolution, and I'll pause for a further 10 seconds while voting takes place. [Voting]

Okay. Well, that brings a close to Item 3A of our business, and I'll pass back to David for the remainder of the meeting. Thank you.

Thanks, Fiona. You did a wonderful job. I think you should become Chair. Okay. Let's move on to 3B. Now this is for the reelection of our Director, Paul Rickard, and you can see it's come up on the screen there. As I indicated, I intend to vote again, all undirected and discretionary proxy votes held by me in favor of this resolution. The constitution provides that a Director must retire from office no later than -- or longer the third Annual General Meeting. And of course, that applies the ASX Listing as well. I do want to say, as Paul comes up, he does really add a lot of value to the business and his long experience in the banking sector is really very, very valuable. So Paul, over to you.

Thank you, David. It gives me great pleasure to again stand for reelection as Director of Tyro, a company that I've now been involved with for 13 years. I joined Tyro in August 2009, when the company was about 6 years old. Still very much finding its feet as a disruptor in the payment space in Australia. I remember when I joined Tyro or MoneySwitch as it was then called. We're only generating about $1 million of gross profit and transaction value of about $100 million. In fact, I remember a celebration for $100 million. Fast forward 13 years, and we'll process around $42 billion in transaction value this year with 67,000 merchants offering class-leading payments and unsecured lending products. Being part of this growth story is something I'm very proud of, and I look forward to continuing to assist Tyro for the next 3 years of my term as a director, if reelected. Although we do not intend to get from my professional skills and experience in detail today, things I would like to highlight to shareholders is my 30 years' experience in financial services, including holding the position of Executive General Manager Payments and Business Technology for the Commonwealth Bank. Together with the experience I've gained as a Director of Tyro and other listed companies such as PEXA in any industry that has seen and continues to see significant change. This experience in banking, payments and technology has given me the required skills and level of knowledge and the experience to represent you, Tyro, our shareholders on the Board. As Chair of the Audit and Chair of the Risk Committee, I've tried to ensure that Tyro maintains the highest level of governance and risk oversight while optimizing the potential return for shareholders. I look forward to Tyro moving into the next phase of growth under the leadership of our new CEO, and Tyro generating profits and positive free cash flow for you, as shareholders. Thank you again for your consideration, and back to you, David.

Thanks, Paul, again. So I think he represent his credentials very well. So now we're going to take any questions from the floor. Yes, question?

I'm slightly embarrassed about this, but thank you for the comments we had earlier before the meeting started. This is not so much a criticism, it's just a note of warning or a bit of disquiet. I'd be very happy to vote for Mr. Rickard as a continuing director, although I do note, sadly, there's a fairly large against vote on the figures on the chart there. Why that is? I don't know. But I do notice one thing that Mr. Rickard is fairly heavily committed with 2 other public companies, director. Obviously, he's got the skills. I say there's no personal animosity here whatsoever. And there's 3 proprietary limited companies. I'd like to see all of you continue on the Board. But just a slight note of disquiet that there's a pretty heavy workload for all companies during COVID and specifically Tyro with the terminal outage, all sorts of other problems we've had. I always think you need a little bit of a margin of safety. Even if you'd spend a few weeks on a [ CG and Ireland ], no problem as long as if the article hits the fan, you get the first plane back and you deal with it. And I think the Board has dealt with it very well. I'd like to make some comments later with the terminal outage despite a lot of very bad and I think unearned bad press. Just wondering if we could just keep a little bit of a check on a lot of the overcommitment of directors because previously, going back to 12 years or more, when we had the global financial crisis, I did a quick analysis of a lot of other committed directors and chairman of a number of major and minor companies, and it was almost a complete match up that a lot of the companies where there were 3, 4, 5, 6 directorships or equivalent chairmanship could be worth 2 or even 3 directorships, especially in the larger company, and there was no margin for safety. And if the article is going to hit the fan, it will not just hit on fan, it could hit 2 or 3. I'm just wondering if that's a little bit of an overcoming would you possibly even shed 1 or 2 of those commitments maybe on the private companies. There's no doubt in your undoubted coping with Tyro under very difficult conditions in the last 2 years, but I always have a note of disquiet when directors are overly committed even with noncorporate interest. It's still time. It was only 24 hours in the day on all of us.

Well, look, thank you for your comments. And I think they're well made because -- and I'll answer it as Chairman of the Noms Committee. Look, we do try to make sure we've got the right skills, but also the time commitment, and we do need to make sure there's a buffer for all of us, including myself, about how much time we've got available. I've got to say that Paul specifically has really gone above the call of duty. He has been, always turns up to every meeting despite his commitments. He has chaired the committee meetings very well and provides great stability, I think, in terms of being, having a banking license. So that was the reason that we felt very comfortable to support Paul. And I do note the voting, and I'm not sure either about that. But yes, Paul, as I think this is your fourth -- again the fourth one. So yes, I think Paul and I -- and I'm sure if you recognize that both the commitment and the time period is really important to consider. But we take your point and for all of us. No, I understand. I understand.

One thing I hadn't -- and I hear this criticism about people being on different boards or several boards. One thing I hadn't really appreciated until I got experience of being on a couple of boards is how much you learn from one company and can apply it to the rest. And a good example of that at the moment is in the -- what's happening in terms of security -- online security, which is obviously a major topic amongst every company, as we all know, with Medibank and Optus and even The Smith Family yesterday, I think it was, I got my letter. So there are a lot of common things you get out of being across different companies and being able to take the experience from one company and bring that to another. So whereas several years ago, I probably might have said let's look at directors who got too many commitments. I think there's actually quite a lot to be gained from having a director who has seen multiple experiences.

Thanks, Paul, and I think it's a really good point. Okay. So any other questions in the room? Any questions online? I think the answer...

I don't have any here. Just to confirm with the moderator there are no questions on telephone?

No more. Okay. Well, for those who are voting, if you could vote now, that would be great. Thank you very much. I'll give you just a few seconds and then we move on to Item 3C, which is the election of Shefali Roy. [Voting]

I think you got 5 seconds [indiscernible]. So I'm not going to go through, again, all the requirements under the constitution or under the ASX, but suffice it for me to say we've been delighted to have Shefali on the Board. And she has really contributed -- well, since 1st of January '22, she's been in and she does spend some of the time in the U.K., but is in Australia as well, but we felt it was really valuable to get a global perspective to bring into Australia. So now let me ask Shefali to say a few words about herself and the skills and the experience that she brings. Shefali, over to you.

Super. Great. Thank you, David. Hopefully, you can see me okay and hear me okay. Thank you for the time and the opportunity to speak. It is 4:30 in London in the morning. So hopefully, this comes across as coherent. Background-wise, as David said, I spent a bit of my time in Australia and in London, and the reason for that is I moved it study many, many years ago. I did grew up in Melbourne and studied Economics and Finance at RMIT. And then worked at [ HCC ] for a couple of years and then [indiscernible] for a couple of years both in Australia, after which in 2005, I moved to London to study in London School of Economics to get a master degree. And that kind of kept me rooted in London for a long time. After which I decided to join Goldman Sachs. My career at Goldman's was really in private wealth and working in their compliance, and as David said at the top his address, most of my career has been spent in compliance and regulatory affairs and operations. So while as the Goldman's, I was very much working with that team across Europe and the Middle East. After Goldman's, I decided to finance a little bit and move to Christies. And I was a Chief Compliance and Ethics Officer for a couple of years, building our back office and building our governance and regulatory affairs and risk management. That was very exciting. But I decided to leave that because it was peak financial crisis and we finally, do something different. And then [indiscernible] actually. And I joined Apple in London reporting into Cupertino. And my job at Apple [indiscernible] in ethics, compliance and business conduct across Europe, the Middle East and in Africa and to build out our compliance framework and [indiscernible] product or environment or opening up of stores [indiscernible]. And Apple as some of my know, it's really a lovely wonderful magical company. But the reason I left is a little company called Stripe called me and said help us build out Stripe in Europe. So I left Apple after a number of years, joined Stripe and it was very early. And part of that job is again, building out compliance and licensing and product development, localizing product for the European market and building out a risk management framework for the organization. Did that for a few years. We decided to take a break from working and went back to university. So I went back to the university in Oxford, got a master's degree there, then came back at sort of some corporate side of life and joined the company called TrueLayer as COO and chief compliance officer. You may know of TrueLayer in Australia as part of the open banking organization framework and CTR. So part of my job at TrueLayer is helping us open up offices all across the world and really handling anything in product and engineering but working with product organizations to launch and ship product across the world and particularly in Australia as we're getting compliant with CPI. That was for a couple of years. I left in September of 2020. And since then, I have really been working to launch a Venture Capital firm in London. We are a firm that is launching early next year. We are best in [indiscernible] entrepreneurs, and one of the verticals we invest is in finance. And it's a really interesting time to be in Venture at the moment because that's very fantastic B2B innovative products that are being built out of [indiscernible] but I think David touched on that earlier in his address. So that's the day job. I also teach. I'm an associate fellows at Oxford University and Said Business School where I teach about ethics and leadership and FinTech and Venture Capitalism, and it's very interesting, and it keeps me entertained. And you get to learn through things because some of students there are building their products and building their own companies. So there's a lot of learning lessons and cross-pollination of banking usage comes across really well, which leaves me, I guess, to why Tyro. I was very excited to join Tyro last year. I think as [indiscernible] Jon said, it's $670 billion business, 5% market share. We're trying to [indiscernible] shipping products with utility in speed and frugality big deal to it. And so that becomes a very exciting proposition. And some of the things that we see in Europe is when it comes to building technology products or businesses and are very underserved and somewhat forgotten client sector like, [indiscernible] in Australia, there's room for opportunity and growth. And so that to me is what make Tyro a really attractive opportunity. And I think the next 2, 3 years is going to be really exciting. And that's really all about me, actually. I thank you very much for the time, and I thank you for the opportunity given to me. And that's it, David.

Well, thanks, Shefali, and thanks for being up so early in the morning. That's really great. She is amazing. I've got to say attends every Board meeting at all hours of the day and night. And there's a bit of a sign of sort of being a drawing on resources. She is an Australian, let me just hasten to add, Australian Passport as well, which is very good. So...

Yes, I am. I am for sure.

Yes, for sure. So we like back [indiscernible]. So let me just throw it open to any questions from the floor. Yes, one question. Yes. Here's the microphone.

My name is Kim [indiscernible], just wonder how she can be so far away on the other side of the continent be able to help Tyro which is in Australia? What are the expertise [indiscernible] from England to here.

Yes. So Shefali is in Australia 4 or 5 months a year. She's -- it's only 7 months that she's over there. The reason that we felt that she would add a lot to the Board in the business here is that so much of technology is global now. And the U.K. has really had a leadership role in financial services. So while Shefali is not here, her commitment is second to none. And with video conferencing, it really doesn't matter at the Board meeting, but when she's here, she spends a lot of time in the business. So that was the reason, and it has, I think, played out. And by the way, my own personal view is that more and more whether you are in Australian-only company or working around the world, that bringing in best people in is really important. So that was our thinking. And I've got to say, so far, Shefali has done wonderfully well and we've got a lot of value. Okay. But thank you for the question. Any other questions here? Any online?

I don't have any online. Check with the moderator if there's any one on the telephone.

On the telephone, no. Okay. And then, so I'll just give a few minutes for people to vote. [Voting]

And then we'll move on to the election of Claire Hatton, which is Item 3D, and I just want to say again, I will be voting or any undirected and discretionary proxy votes held by me in favor of this resolution. Again, I note the constitution and the ASX listing rules. But I do just want to introduce Claire, who was appointed to the Board by all the directors on the 5th of January 2022. And she has really been a strong member already made a lot of difference. So she was -- came -- she was intended to retire and then nominate herself again and as a director, and I'm now going to ask Claire to come up and say a few words. So Claire, over to you.

Thanks, David. Thanks for the opportunity to share my background. And thank you, shareholders, for the opportunity to stand for election as a director of Tyro. I'm currently an entrepreneur and a professional Board Director. I'm Non-Executive Director of listed Lifestyle Communities in the ASX 200 and a Non-Executive Director of Australian Pacific Holdings, a large family-owned luxury tour operator based in Melbourne. I'm also Co-Founder and Director of Full Potential Labs, a global leadership development business working with technology companies to help them really build leadership capacity to scale and also to improve diversity. Most recently, as an executive, I spent 7 years on the Google Australia and New Zealand commercial leadership team, navigating significant growth, and I have over 20 years' experience working in digital business, in marketing, sales and operations and 25 years in travel and technology industries across Australia, Asia and the U.K. Previously, I was Non-Executive Director of ASX-listed 3P Learning Limited where I was People and Culture Chair and Non-Executive Director of Children's Charity Plan International. As a result, I believe I bring really a broad range of skills and experience that bring value to Tyro to the payments business and to its oversight and good governance. I really believe in Tyro's mission to power the future of businesses with innovative payments, making a real difference to Australian businesses. Subject to my election, I look forward to the opportunity to work with my fellow directors and the leadership team to create value for all of Tyro's stakeholders. Thank you again for your consideration. Then back to you, David.

Thank you, Claire, and it is great to have you on the Board. So any questions from the floor at all? Are there any questions online, Jairan or on the telephone?

I don't about the phone rather, but I don't think there is any online.

You could do online. Anyone on the telephone? No. Okay. Well now we'll put 3D sit on the notice of meeting to a vote. And we'll just pause for a moment as you do that, and then we'll move on to Item 4, which is the participation of directors and the remuneration sacrifice rights plan. [Voting]

Okay. I'm sure you have voted. So this is item 4, which relates, as I said, to the participation for remuneration sacrifice rights plan that can be seen on the screen now. Shareholders being asked to approve this item, which allows remuneration sacrifice and is issued on the conversion of those sacrifice rights under the Tyro Payments Limited remuneration sacrifice rights plan we issued to Shefali Roy and Claire Hatton as Directors of Tyro, and we need to bring that to you. Shareholders resolved at the 2020 AGM to allow sacrifice rights and any shares issued on the conversion of those sacrifice rights and the sacrifice rights plan for all other Tyro rights for a period of 3 years from the 27th of October, 2020, being the date of the last Annual General Meeting, which seems like a long time ago. Sacrifice right plan enables non-executive directors who are often limited in their ability to purchase shares in the company due to the operation of the Australian insider trading laws and the group's focus on good Corporate Governance to invest in the company's non-executive directors may voluntary elect sacrifice up to 100% of their fees and to sacrifice rights, and we encourage people to hold a position in the company. Elections are made on an annual basis, sacrifice rights allocated shortly after the publication of the annual report and subject to shareholder approval. Based on the fee sacrifice for the year vest and convert into ordinary shares shortly after the end of the financial year, subject to compliance with the group securities trading policy. So with that, it's good that we can bring it to you. Are there any questions in relation to this particular item? From inside here, Jai, no? Any...

None online. And I've assume none on the telephone as well.

Okay. So if there's no telephone questions, we will give people a moment before we go on to item 5. [Voting]

This is the sixth resolution relating to the grant of service rights in relation to the full year '22 short-term incentive plan to the previous CEO and Managing Director that can be seen on your screen now. Now although Robbie Cooke is no longer CEO and Managing Director of Tyro, under the Listing Rule 10.11, Robbie is still a related party to Tyro as he was a director within 6 months prior to the proposed issue date for the service rights. And as such, shareholders are being asked to approve Item 5 to allow service rights and any shares that may vest following the conversion of those service rights under the incentive plan to be issued to Mr. Cooke. Now I just want to be clear, these were set for him last year. And because of the timing, this is why we bring it to you to get approval. So let me just open it to any questions. And I just should stress the actual amount is a reasonably small amount, just under $50,000, isn't it? $56,000 shares so it's about the issuing of service rights. So any questions on this item? It's really just tidying up what was already agreed in the previous year. Anything online at all.

No, not in relation [indiscernible] on the telephone.

Okay. Great. Okay. Well, we'll just leave it. It is important, but it's important that we just go through this process. Okay. So anyone who would like to vote, please do so. [Voting]

Right. Okay. We are now at the end of the said resolutions. We opened to the general Q&A. And we would be very welcome to have any questions that any shareholders who would like to ask at this point. I will try to [ MC ] it and pass it off to any of the very capable directors here today. So firstly, Jai, we should open it to questions here in the room? Yes please do.

David, this is Gary Dorman. Considering the timing of the current process the Board is running through, share price is around about 1/3 of what it was 12 months ago, what's behind the Board's thinking of running this process now?

Well, I want to be clear that we are just responding to people who approached us, and we felt that the right way was to run a process because we had so many people approaching us. So -- and we felt that was the fairest way to do it. Now as I said at the beginning of the meeting, there's no nonbinding integral office, there's no guarantee about any outcome, and we'll only come back to shareholders if there is something we believe shareholders should consider. So it's really a process matter. We are open, and we think that's the right approach for our Board to take, but we are making no commitments around where or how we would bring it back to shareholders. Okay? So it's really about managing a process. I mean one of the things you can't control is nonbinding integral office, we can't track. But now it puts a price. Okay. Yes. Sorry, could you introduce your name?

Charles Edwards proxy holder from a superannuation company. I'll take it in reverse order. First some good news at the end following on from that gentleman's comments and some kind words with you before the meeting, there's a whole lot of companies, and I'm going back 10, 15, 20 years, Bradken, Capilano Honey, Wotif, Tasmanian salmon just this week. Sydney Airport, Greencross, Biota Webster, SAI Global, Healthscope, dozens of others good companies, they're not in the bargain basement barrel. They're not in competent leaders or directors, and they've all been skipped up at the bottom of the cycle, who wouldn't? The lion grabs the weakest zebra, that sort of thing. And this company is risking the same thing happening. Now clearly, as you said, the share price has been anything from $3.76 to $0.60. You pay big money at Luna Park for a wild ride like that. And since listing, we're a new company on the ASX and a lot of us have bought shares because from January '20 to November '21, despite the terminal connectivity issue, which should have funneled the share price almost immediately in January '21, it didn't. Because just looking at the graph this morning, throughout that time, mostly, Tyro shares were between $3.50 and $4.50 , and a lot of brokers were recommending them at listing in 2019, 2020. In my view, rightly so. So we've weathered some pretty big stores. The share price is down as this gentleman has already said, I get really ticked off. No matter what I bought them for, luckily, it wasn't between $3.50 and $4.50, but a lot of people did buy well north of $2.50, even $2, and what really ticks me off, as with all of those companies that I recited, every single one of them, they wait the takeover company reasonably enough, it's the law of the jungle. They wait for the bottom of the cycle. Every share is cyclical. It has its ups and downs, unless it goes bankrupt, and that's down and out. And they wait for the downtime, which we're certainly in at the moment, it's not $0.60, it's $1.50, but it's still well south of $3.50, $4.50, and I would be really annoyed more than that, if the Board didn't firmly stand up and there's a lot of talent on this Board, and I don't mean that sarcastically in any way. you're not incompetent. You're running the business through thick and thin over the last 3 years and complements to that. I would like to see you take a more muscular attitude to these offers of takeover, and it's not a xenophobic thing whether they're being taken over by China or Russia or Canada or New Zealand or Pitcairn Island. I don't particularly care about that as such. But this is a company and in your own words, in your address and our CEOs, you're saying we're maximizing shareholder value. Yes, all the things that should be up. Positive free cash flow, significant value proposition growth ambitions, all of your words, I take to heart and all of the metrics and the presentation on the screen were up. As a shareholder, at this stage, I'm kind of happy that we're pulling out of the $0.60 level and not just the share price, the general uplift of a young company on the way up. And I wouldn't like to see that cut short by some vulture venture capitalists coming in, which is what they do. Yes, true. But they don't, I'm bit sick of boards, and I don't mean you or the Board, but these other Boards, they roll over for a tummy rub at the slightest hint of a takeover as if that's some sort of a vanity project, and I could single out some specific ones there, but I'll try and keep it nondefamatory. I would like this board to be a lot more muscular and our incoming Chairman to reject these up-and-coming office where we're on the way up. All of your comments were very positive. I'm buoyed up, and I wouldn't like to see that cut short by some opportunistic offer. I mean maybe if they're opportunistic at $10 a share at some [indiscernible]. Yes, fine. Okay. But I'm not talking about fantasy land. The reality is this share price has been $3.50, $4.50 for quite some time between January 2020 and November '21, despite the terminal outage. And I'd like to just, secondly, I would like to say congratulations to the Board for handling that issue. I don't think you've got enough credit in the press the way you handled it.

Thank you.

You updated the community through the ASX website you dealt with the merchants. You swept up as much as you can sweep up as quickly as you can and you and your managers full marks. But that's sort of attitude I'd like to see and great credit to that. And you can do that, I'd like you to maximize shareholder value, not by stocking off the company that we'll undoubtedly hear headlines $1.80 off of for Tyro, 20% premium on current -- 20% premium would be $1.80. Now for the people and institutions ever they bought Tyro for, there'd be a lot of people who would be buying them well north of $2.50 a share, not $3.50, but $2.50. And that'd be really ticked off at a company going -- putting itself out say, oh, we got a 20% increase on current prices. That's a hell of a lot less than a lot of people paid for this company, which, okay, we're sort of down a little bit. But I'm quite prepared as a patient shareholder to ride that through. And I'd like the Board to be very muscular about any of these offers, really stand out and not just roll over for a tummy rub. I hope you don't do.

Tummy rubs. Okay. Thank you very much. Well, look, I really appreciate your comments, and I'm sure the Board taken on board. And a couple of things I would say. We have done a lot of work on what we think is fair value. And as you would have seen, we were -- an offer was made that was made public that we did not believe it made -- reflected fair value for all shareholders, and we rejected that offer within 24 hours. So I think that we are being very considered and we do hear you. And and we also need to reflect where value is in the market. And this is the market has rerated and multiples have been different. But we -- as you rightly point out, we see a lot of potential for this business, and we do think about what will be in the best interest of all stakeholders going forward. So thank you for your comments, and we take on Board. Thank you. Okay. Any other questions in the room? We have a few. I know that have been pre-submitted, which we will go through. Some very technical questions, which I've been asked to answer, which will be interesting, but I will be up for it. Okay. Any questions online? Yes, you want to go.

I was going to go straight to the ones previously received.

Okay. So we're now through the previous received questions, and I will take some of them and pass them off to people more qualify the line. .

All right. So some of these topics that have been touched on during the presentations, but you may want to provide more detail. The first question is Gordon Chew. Why has the weekly update of transaction value stopped?

So for those who don't know, through COVID, we published the weekly transaction numbers. It's because we felt there was such a volatile environment. At full year results, we said that we would cease that but do it on a monthly basis. So we're still doing on a monthly basis, and I think that gives the market and shareholder a fair view of how we are traveling. So it was just that every week became quite a lot of work to do. A great management team. Okay. That was the [indiscernible] one. So it is available monthly.

Next question is from Nelson Ashworth. Are there plans in the near future to launch into general banking?

We have -- as we have said, we are a payments company offering banking services around that, both deposit and loans. And as Jon said, the loan portfolio is going well, but we are very conscious that as mixed economic environment. And so therefore, doing -- making sure that we're managing the credit risk carefully. But no, that's our current plan of payments company with banking products around it.

Thank you, David. The next question comes from Paul and Tracy Deer. Similar to the comments earlier, but would it be in the best interest of shareholders to delay any takeover bid until fair compensation is received? And does the Board believe that the current economic situation needs to improve to achieve the best possible bid?

Well, thank you for the question again. We look at the market. We look at the performance of the company, long-term value creation to make -- to determine what is fair value. And we are conscious that we're going into a difficult period. So all those things factor in, in terms of how you value a company. So we are very conscious of that.

The next question is from Tai Nguyen. How does Tyro compete with Square Afterpay?

Well, firstly, Square is definitely a competitor. Afterpay really is not a direct competitor to us. But we are a local payments company trying to differentiate and build differentiation at the Australian level. Square is a multinational company, and we think we have significant differentiation. But Jon, do you want to pick up on that because you spend a lot of time on it.

Yes, David. So Square clearly a competitor, and we're seeing a lot more competition in the Australian market in the payments landscape. Where we see a Square predominantly playing is in the micro part of the market. and they do that by providing a point-of-sale system, a fairly [ vanilla ] generic point-of-sale system with an integrated payment solution, where we are able to compete strongly against them is we have a more open system that is able to integrate into the 350-or-so point-of-sale partners that we work with. And we think that, that provides us with a far more open system, which is appealing to merchants that we're providing services to.

Right. And it's great to see the Tyro Go product, which is very similar to the Square product, and so it's looking good. So if you get a chance when you're out buying coffee, you can see that. And I think the local support is a really big part of that. So that's the answer to that question. But...

Thank you, David. The next question from Tai Nguyen is why has the share -- why has the Tyro share price dropped so much on the ASX?

The reason that the share price has dropped is has been a rerating of the industry. And at the moment $1.50 were about the same as the industry, but at $0.60, it was way above the industry. So in a way where -- that maybe this process has brought the value back to -- in the markets at $1.50. But that's where most companies are, and we do need to be conscious of that. I mean the -- remember the way company is being valued based on revenue multiples, it has now moved to EBITDA and cash as key indicators. So that's changing in the sentiment. Now do we believe that growth companies still should be looked at differently? If you look at our multiples, they're still very high, still very high. And so we try to take all those factors into consideration as we look forward because we've got to be balanced in the assessment.

Great. Thanks, David. The next question is from Vivid Savitri. The question is what kind of commitment towards sustainability and environmental protection does Tyro have?

Well, I think I touched on that. Our commitment is net zero, but it's not to just buy offsets to get to net zero, it is truly to be a net zero company, and Giovani does a great job in terms of running the program, and it's in [ Jon's ] KPIs. And so he's going to lead us forward on this. But yes, we see as very important. It's about our environmental and social commitment in terms of being a responsible and trustworthy organization.

A second question from Vivid Savitri, and you have touched on this to a certain extent, what is the future business direction moving forward? And how do you -- how will you weather the recession? What's the plan?

Well, the, there's 2 parts to that question. Our fundamental value proposition is not changing. We are a payments company with banking services, and we think there's enormous value in that. If there is a major recession, we need to be flexible in terms of our cost base and determining what we need to do, but we will still strive to try to compete on product innovation and customer service going forward. And that's what our fundamental value proposition has been. And we're here for the long term. So we need to survive through that. That's why the balance sheet is so important to us. And the balance sheet remains strong. I do want to stress, I mean, for those who don't understand the banking license gives us enormous access to cash because of the deposit base we get. And that's a very important part of our whole strategy going forward.

Great. Thank you, David. There's a question here from Grant [indiscernible]. It's a bit technical, but I'll do my best.

Okay. This is the technical question. And it's asked to me as a telecommunications person.

I'm going to...

So I want to give it a go?

Sure. Okay. On Page 17 of the annual report, Robbie Cooke explained that we will be differentiating on micro, small, medium and large merchants, to provide seamless experience to customer, it would be better to differentiate on a hardware network basis. I'll try this. Okay, WiFi NBN, WiFi plus 4 5 6. 4 5 6 [ only ]. I know I'm saying that wrong, NBN, Sky Muster Plus satellite, et cetera. And I guess the question is why wouldn't you do it that way as opposed to what's proposed?

So the point is the question is relating to, could you segment your customer base based on how you connect to the network. So you know how you keep WiFi or 4G, 5G or, and you can come in through nbn or different versions. We have chosen to take a customer-centric approach in terms of how we approach the market and looking at the needs of customers. And that's why we've segmented to micro. There are other segmentations we could provide. And to a degree we do provide differentiation in terms of how you connect because if you got a mobile device walking around, so there is a degree of segmentation there we do. But our predominant segmentation in terms of adjusting customer need is the type of customer they are, and we think that is probably more important to us at the moment. But there are lots of other consideration there. You can come back to me later on and see if I answered the question correctly.

All right. So there's a handful of final questions from Robert [ Kaya ] .

I want to do them one by one, so I can answer...

Sure. Okay. Why is Tyro performing so badly? And has it got a good future?

I think that I would say that from Jon's report, they are very encouraging signs of the business.

Why don't we see many Tyro machines in shops?

We have 100,000 terminals and shops and hospitality today. I can't really comment much more about why you're not seeing them, but there's 100,000 out there.

Has Tyro got a good and full-time sales team?

I believe so. That is definitely full time. But as I look at Josh over there, I'm sure we can always -- they're doing very well, but we aspire for greatness right, Josh. So thank you.

Is Tyro considering a revamp of its management team?

I will -- Jon is new into the team, and I think that he is doing a wonderful job with the current management team. I'm sure that as things change, you will look at options go forward, depending on the strategy of the business.

Is Tyro operating overseas?

No.

And will Tyro ever start paying dividends?

I I hope so. I don't think I can say much more than that for now. Okay.

There are some now that have popped online.

Okay, right. Okay. We've got a few more.

Okay. So I want to be anonymous here, but just want to thank for all the timely communications, keep shareholders informed. Keep it up.

Thank you.

Can you explain why staff salary increases are only 4% to the executive team who are 8% and 29% for the Board?

Look, the way that we look at salary is we do benchmarking to the market, and therefore, it will be different at any one time. I can't -- there will be differences in between management and staff. But if you look at most of the EBAs now, it's around 4%. So I can't really say much more than that. But we benchmark to market, and that's the most important thing we do.

All right. And the final question is also a similar question from Timothy [indiscernible]. Thank you for your question.

I mean it has been a very technical...

Sorry, the question was, was there a vote on the remuneration report, we can see a flash up. Maybe I missed it.

Yes, I know that it was there. We can go back to -- do you want to go back to [ Gary ]? It was...

[indiscernible] for that on the remuneration?

Yes. Again, this is for the indication that. Okay. Is that okay? Okay. Yes. Look, I mean, just starting to say, technology companies, there's been a lot of competition for staff in the market. And therefore, it's been very active, and we try to get the balance right in that. We want to be competitive, but we're trying to be leaner and meaner, not meaner but leaner, so as we go forward. Okay. With that, I think that draws the meeting to a close. Thank you for all your questions. Look, we do strive to be open and transparent as much as we can be. And we do just want to note that all the voting numbers will go up on the ASX. I think pretty quickly after this so that will be good. And I think with that, I can formally close the meeting. Thank you for your attendance and all the best. Thank you.