Viva Energy Group Limited (VEA) Earnings Call Transcript & Summary

Okay. Well, good afternoon, and welcome to Viva Energy's 2025 Annual General Meeting. I'm Robert Hill, and I'm honored to serve as the Chairman of Viva Energy. It's now just after 2:00 p.m. Australian Eastern Standard Time. We have a quorum present, and I declare this Annual General Meeting of Viva Energy Group Limited open. We're holding our Annual General Meeting today as a hybrid meeting, which means that we have people joining us here at King & Wood Mallesons in Melbourne as well as online, and we welcome all of you today. I'd like to acknowledge the traditional custodians of country throughout Australia and their connections to land, sea and community. Here in Melbourne, we're on the traditional lands of the Kulin Nation of peoples, and we pay our respect to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples present today. Before we begin the formal business, I'll hand over to our Company Secretary, Julia Kagan, to run through some procedural matters.

Thank you, Chairman, and welcome to everyone joining us today. There are no safety drills planned for today. So if you do hear an emergency alarm, please observe the staff and fire wardens who will provide further instructions. Voting on all items of business today will be carried out by way of a poll. Shareholders had the option of casting their vote before the meeting or appointing a proxy to do so on their behalf. If you haven't already done so, you can vote at today's meeting, both in person and online. You can do so at any time during the meeting starting from now as the polls are open for voting. If you are attending the meeting in person, you will have received an attendance card when you registered on arrival. Those who hold a yellow voting card can cast your vote by filling out your card. Those holding a red or blue card are not entitled to vote at this meeting. If you have any questions, please see a member of the company's share registry, MUFG at the registration desk. For those shareholders joining us online, you can cast your vote by following the instructions set out on the screen in front of you. Voting will close shortly after the end of the meeting. There are several ways you can ask questions at today's meeting. Those attending the meeting in person and who hold a yellow or blue card, you're entitled to speak and ask questions at this meeting. Visitors who hold a red card are not entitled to speak at this meeting. If anyone with a yellow or blue card wishes to speak, please make your way to the microphone when the Chairman calls for questions and identify yourself before asking your question. For those who are participating via our online platform, you'll be able to submit questions by registering as a shareholder or proxy holder and selecting the "Ask a Question" button. You do not need to wait until we get to the formal items of business to submit your questions. There may be a slight delay in transmission, so we do encourage you to start submitting your questions now, and we will address these a little later today. For our shareholders participating by phone, the phone line operator will introduce you to the meeting at the appropriate time, and you can speak at that point. When we get to questions, the Chairman will consider questions first from the floor, then questions submitted online and then questions by phone. I will now hand back to the Chairman.

Thank you, Julia. Today, I'm joined on stage by my fellow directors to my left, Dat Duong, Non-Executive Director. Dat is the Vitol Investment Partnership Portfolio Manager and Vitol Investment Director; Sarah Ryan, an Independent Non-Executive Director and Chair of our Audit and Risk Committee; and Arnoud De Meyer, Independent Non-Executive Director and Chair of the Strategy and Investment Committee. And to my right, Scott Wyatt, Chief Executive Officer and Managing Director; Nicola Wakefield Evans, an Independent Non-Executive Director and Chair of our Sustainability Committee; and Mark Chung, Non-Executive Director. Mark is Head of Investments for Vitol in Asia Pacific and joined our Board following Mike Muller's retirement from the Board on the 5th of May. And I'd like to take this opportunity to thank Mike for bringing his significant experience to the Board and wish him well for his future endeavors. Carolyn Pedic, our Chief Financial Officer; and Julia Kagan, our Company Secretary, are also with us on the stage today. With us in the room are the rest of the Viva Energy executive team. We also have joining us in person, Trevor Johnston, representing our auditor, PricewaterhouseCoopers. Trevor will be available to answer questions on the auditor's report later in the meeting. The last year has been a transformative period for the company. We've made important strategic investments in all parts of our business to create new pathways for growth and to ensure the company continues to do well through the energy transition. On the financial front, we delivered an EBITDA (RC) of approximately $750 million in 2024, our second highest result since listing. This was largely due to an exceptional performance in our commercial business. This business has been growing year-on-year backed by the diverse portfolio of businesses we operate across a wide range of industries, the supply chain investments we have made and the exceptional performance of our team, ably led by Denis Urtizberea. That's why we call him Denny. Unfortunately, Denny's got COVID and can't be with us today, but I did want to personally recognize him for the exceptional contribution he and his team have made. They've demonstrated that a commitment to customer service pays off. We're now a highly respected supplier in this sector. In our convenience business, we've made a number of acquisitions, which will safeguard the value of our key retail assets into the future. In 2023, we acquired the Coles Express Convenience Retailing business, having taken responsibility for retail fuel pricing and marketing at the Coles Express sites in 2019. Last year, we acquired OTR, which gives us a template for a first-class retail convenience offer, and we purchased the balance of Liberty Convenience earlier this year. The acquisition of OTR marked the beginning of a 5-year program to establish the leading convenience network in Australia. We see considerable opportunities to leverage our 1,000 store network to grow the convenience business, transitioning the company from being a fuel retailer that happens to sell convenience to a convenience retailer that also sells energy. With this in mind, I acknowledge that the financial returns from this sector in 2024 were disappointing. The complexity of the integration coincided with a challenging trading environment, and we did not achieve all of our objectives. We have, however, made significant progress and we'll move through this year with substantial integration efforts largely behind us and store conversions commencing at an ever-increasing pace. Management are navigating the external environment to improve returns, and we've taken steps to strengthen the Board to provide the team with greater support in the execution of our ambitious retail strategy. In that context, I'm pleased to welcome John Joyce to the Board as a Non-Executive Director from the 2nd of June of this year. John brings deep retail experience gained in senior roles across a range of retailers and supermarkets, holding roles such as Managing Director of ALDI Stores Australia and Chief Executive Officer of Rebel Sports. John will add great value to our Board. Turning to our refining business. After a relatively strong first half, refining margins fell away sharply in the third quarter, and we saw the refinery largely operate at breakeven levels for much of the second half, supported by the fuel security services payment. Notwithstanding these financial results, our team at the refinery delivered strong operational performance during a time when we're in the midst of a major investment program to produce ultra-low sulfur gasoline. This significant upgrade is progressing extremely well and will be completed on time, which reflects a huge effort by the team and effort that's been greatly appreciated by the Board. After completion of this project and the upcoming major maintenance program, which Scott will address later, we will enter a period of lower capital expenditure at the refinery from 2025. While we remain positive about the potential refining environment through that period and the opportunity for improved returns, this is by no means certain. It is therefore a key priority for the Board and management to engage with the reelected federal government to review the effectiveness of the FSSP program and the longer-term options for the refining business. The Geelong Energy Hub is now recognized as a national asset of strategic importance. It's an honor to contribute to national energy security through the provision and operation of these assets, but we also need to generate acceptable returns on these investments, and we acknowledge investor concerns that this has certainly been challenging in recent years. I want to say a few words about safety. The Board is committed to high standards of personal safety. We owe it to our employees, contractors and the public we interact with every day. Overall, outcomes in 2024 were very good during a year of significant activity across our operations, and we maintain our efforts to keep that good record. Similarly, we willingly embrace our responsibilities in relation to environmental sustainability. Our social license to operate is underpinned by these responsibilities, and they're respected by the Board. I wanted to say a few words about the energy transition and our place within what is a major endeavor. We've always accepted the need to reduce carbon emissions and the expectation that we must make a significant contribution to execution of public policy in that regard. We accept that responsibility whilst also ensuring reliable supply of our traditional energy products while they're required by the community, government, business and households. We must also remain financially strong whilst investing in the energy transition that is more -- in some ways, more of the future than of the present. Balancing all these expectations and responsibilities means that we have to be selective when it comes to how we lower or offset our own emissions. When it comes to customers, we've been pleased to offer imported sustainable aviation fuel and biodiesel and have invested in supply chain upgrades necessary to support customer choices. We can and would like to coproduce these biofuels in our own refinery as soon as economics and public policy make it possible. EV deployment remains focused on building a quality, fast and reliable system at locations anticipated to have high utilization. The rollout speed ensures that we're resolving issues as they arise to ensure efficient management of a scaled network. We're about to open Australia's first public new energy service station for heavy vehicles, offering both hydrogen and EV charging for fleets, a first for Australia. We're producing hydrogen and that which we don't sell to the fleets, we can offer to sell to the wholesale market. And earlier this month, we successfully processed pyrolysis oil from waste plastics to new plastic precursors, another first for Australia. In summary, there are many opportunities we can develop at our refining business, but we're realistic about the challenges and the government support will be crucial to maintain and invest in these capacities over the longer term. Last but not least, I'd like to welcome Mark Chung to our Board. Mark joined Vitol in 2020 and is the current Head of Investment for Vitol in Asia Pacific. Prior to Vitol, Mark was Head of Asia Pacific Energy and Power at the at Bank of America Merrill Lynch and previously, the Head of Asia Oil and Gas and Head of Asia Financial Sponsors Group. Mark will bring a strong energy and financial focus to the Board. Thank you again, our shareholders, for your feedback and support. Thank all of Viva team, and thank you to our customers for your business and loyalty. I'll now hand over to our CEO for more detail on last year's performance and our path forward.

Thank you, Robert. And let me also welcome shareholders and guests with us today. As Robert has touched on, we are in the midst of a major transformation of our various businesses. The development of our convenience business, together with the investment in our energy hub are substantial programs that are well underway, while our commercial business continues to extend operations and deliver sustainable growth. These programs remain a key focus for the company in 2025, and I will come to this in more detail after reviewing our results for 2024. Viva Energy delivered approximately $750 million of EBITDA on a replacement cost basis last year. This was up 5% on 2023, supported by strong sales growth in our commercial business and higher crude intake due to lower levels of maintenance and improved operating performance in the refinery. Group sales grew by 4% to nearly 17 billion liters in 2024, with Viva Energy now supplying more than 25% of Australia's liquid energy needs. This market-leading position is underpinned by high-quality positions and deep relationships with customers across a wide range of sectors. It is a sustained position which has been achieved progressively over many years on the back of an unwavering customer focus, unique strategic assets and infrastructure and some amazing contributions from our people. Despite the challenging retail trading environment, fuel sales in our company-controlled retail network grew by 0.5% on a pro forma basis, with convenience sales, excluding tobacco, up 2% on the prior year. Earnings of $231 million in our Convenience business were broadly in line with 2023 with growth impacted by low sales growth, illicit tobacco, cost escalation and higher carrying costs through a period of transition of this part of our business. Since completing the OTR acquisition, we have successfully stood up systems to bring together our various retail businesses. And as I stand here today, we are now operating a single unified retail business with a focus on shifting from transition to delivery with momentum building in every aspect of our retail strategy. EBITDA in our commercial business increased by 5% to $470 million in 2024, its fourth consecutive year of earnings growth. On a pro forma basis, our sales volumes were up 5%, driven by strong demand from the aviation, resources, agriculture and defense sectors. with the newly acquired OTR wholesale business further strengthening our Liberty Rural proposition. Over the last year, we have entered the marine market in Brisbane, further built our relationship with Defence, expanded our aviation operations to more than 90 airfields across Australia and supported a wide range of initiatives to help customers with their energy transition, as Robert touched on before. This includes supplying sustainable aviation fuel to the Department of Defence and Virgin Australia, the delivery of renewable diesel to an international cruise ship operator and the completion of our first hydrogen refueling station. These are early but important steps in supporting our customers with lower carbon solutions. Our refining business delivered EBITDA of $94 million in 2024, increasing by 44% over the prior year due to lower levels of maintenance and improved operating performance. Weak regional refining margins in the second half negatively impacted earnings. And while this environment persists into 2025, we are beginning to see some strengthening as global trade tensions settle and the outlook for global oil demand improves. We are making good progress on the implementation of ultra-low sulfur fuel and expect to commence production in early October to support the transition to new fuel specifications in mid-December. Preparations for the major maintenance of our Residue Cat Cracking Unit in quarter 3 this year are also progressing well. With both these projects behind us, we will enter a period of lower capital expenditure in our refining business from 2026. We will continue to take a disciplined capital approach to capital investment and shareholder returns in all parts of our business. For 2024, we declared a final dividend of $0.0387 per share, representing a payout of 66% of group NPAT over the course of the year. Now I'd like to take a few more moments just talking about the progress we have made in our convenience business and then the priorities for the year ahead. As I mentioned earlier, we have now stood up systems and processes, which set us up to operate as a single unified retail business. We have moved off the Coles transitional services agreement, transitioned fuel supply to the OTR network Viva Energy supply chain and consolidated our retail head office functions. As a consequence, we are now beginning to capture some of the significant synergies that were anticipated from the merger of our retail businesses and which are expected to deliver $30 million in the second half of 2025, building to $90 million per year in 2027 as we consolidate convenience supply chains and transition off the product supply agreement with Coles next year. Given the soft retail trading environment at the moment, we are also taking additional steps to reduce operating costs in our convenience business and in our corporate offices and expect this to deliver at least $50 million of cost reductions in addition to the synergies I mentioned earlier, predominantly through the second half of this year. With these foundations now set, we will move from a period of transition to the delivery of our long-term retail plans in the second half of this year. As Robert mentioned earlier, we are moving forward quickly with our store conversion program. We are commencing the conversion of 10 stores this quarter and have a program of conversions and store operating -- store openings, which will see the OTR brand and offer extended to between 40 and 60 Express stores over the rest of 2025. Most of these will be in New South Wales to optimize supply chain efficiencies, but also to focus on markets where we think we have the biggest opportunity for growth. I look forward to providing an update on the performance of these early conversions and the convenience business more generally when we deliver our first half results in August. In closing, I'd like to thank shareholders for their support and the Viva Energy team for the contributions they are making to the transformation of our business and for what we have achieved so far. We have over 15,000 people working across the country with the vast majority in customer-facing and operational roles. The service they provide to customers in safely delivering on their expectations and helping them reach their destination is exceptional and critical to our success. Their enthusiasm for what we aspire to achieve is tangible, and we are collectively excited about what's ahead. Finally, I'd just like to acknowledge some changes to my executive team. Bill Patterson was appointed Executive General Manager of the Geelong Refinery, transitioning from Dale Cooper, who we thank for his valuable contribution to his time in the role. Bill has held senior roles across Australia, Oman and Singapore and most recently led Viva Energy's Liberty Rural business as CEO. Amanda Fleming, our Chief Digital and Transformation Officer, who is leaving the company after a significant contribution over more than 5 years, will be succeeded by Debbie Browning, who will join us in July to accelerate our digital transformation. Debbie joins us with extensive technology and digital experience as well as relevant experience in deploying technology strategies in retail, B2C and energy environments. Once again, thank you very much for your support, and let me now hand back to Robert.

Thank you, Scott. As we go through the resolutions today, I will open for questions. Those shareholders with us in Melbourne today holding a yellow or a blue card, you may make your way to the microphone at the appropriate time, and please identify yourself before asking your question. For our shareholders attending online, I would encourage you to start submitting your questions now, and we'll address them as we go. I will now proceed with the formal business of the meeting. The notice of meeting sets out the following matters for consideration by shareholders today: one, to consider the financial statements and reports; two, to adopt the remuneration report; three, to elect and reelect Dat Duong, Nicola Wakefield Evans and Mark Chung as directors of the company; and four, to grant performance rights to Scott Wyatt under the company's long-term incentive plan. During the meeting, we will display the proxy votes and the direct votes received in advance of the meeting, where I, as Chairman of the meeting, have been nominated as a shareholder proxy, I intend to vote all undirected and available proxies in favor of each resolution. There are also voting restrictions for some resolutions as outlined in the notice of meeting. I remind you that the polls are now open for voting. The outcome of today's meeting, including the final vote numbers, will be released on the ASX after the conclusion of today's meeting. So I will turn to the first item of business, consideration of the financial statements and reports. The Corporations Act requires the directors to lay before the Annual General Meeting, the financial report, the directors' report and the auditor's report for the last financial year. There's no formal resolution put to shareholders for this item, but there will be an opportunity to ask questions on the matters contained in the reports. Are there any questions from the floor? Please make your way to the microphone.

Good afternoon, Chairman. My name is Ian Curry. I'm here as a representative of the Australian Shareholders' Association, but also as a shareholder. I have proxies from 16 shareholders for around 188,000 shares. That's excluding my own shares. The gas import terminal, Chairman, I think I was here probably 6 years ago asking you a question about the political influence in the progress of that terminal. Nothing has changed, of course, 6 years later, I do wonder whether it's now in the best interest of the company to continue to try and proceed with that project. As an aside, I read this morning that someone thinks regasification terminals are the way to go now, but that was in their own interest, of course, at [ Jamina ]. I say this about the importation terminal because it will require substantial capital investment. The company is, at the moment, spending quite a lot of money on the OTR acquisition and quite properly so. And debt levels are probably higher than you would like in the longer term. And therefore, I do wonder whether the potential delays in a gas importation terminal might mean that it's no longer of value to the company.

So thank you for the question. It has been a struggle. We went through a whole environmental assessment process, meeting every requirement that had been set by the government in that process only to then be told there's other questions they want us to answer, and we had to start the process again in relation to those other questions. Obviously, respecting government, we did so. We completed the materials. And the -- as I understand it from what we hear, the officials have completed their assessment and have forwarded a recommendation to the minister. And we understand that a determination by the minister is imminent. So next year, I'm confident you'll know whether we were successful or not in getting government approvals to the project. In relation to the need, the need for additional gas in Southeastern Australia, Victoria, in particular, is greater than ever and particularly from '28-'29, and there doesn't seem to be any other viable alternative. Certainly, there's other options being campus, but they haven't been realized. So our view at the moment is there's probably going to be greater demand than what we thought when we started this process. So there hasn't never been an import terminal like this in Australia. So again, it's new. But what I can say to you is potential offtakers seem quite positive at the moment. They will require gas in this part of Australia, and they don't see any other alternative. So what we've been seeking to do is to finish the assessment process to constrain as much as possible our expenditure in that process. So we know how easy it is for that to get away. And if we are successful, which we will know soon, we will then engage the offtakers and determine whether there is a financial model that is in our interest. We will do so recognizing exactly what you said that we are capital constrained at the moment, and we need to be cautious. But it might just be that this could be an important investment for the company. So I would just ask you to be patient a little while longer and know that we will not be reckless with your money. And one day, it might make you an even more prosperous shareholder.

Well, I'm getting older, Chairman. But still I'm on my feet. If I might ask another question regarding the convenience and mobility. I assume that you have all the numbers regarding how many people buy fuel and items in the store, how many buy fuel only and how many only shop in the store. You've said 50% roughly of the earnings now will come from the convenience and mobility area. And the question then is, to what extent will the development of external, if I can put it that way, from the current fuel stations, external charging points as against charging points, which you may install in your own service stations and be able to accommodate a certain number of them in a reasonable time. To what extent is this going to change your mix because what you're relying on is people buying in store basically because you're going to offer them something superior. And so I am interested to how can you balance this out off-site charging, on-site charging to help your sales. But if it's off-site, you won't get those sales.

So again, you're correct. And Australia is different to some other places where -- firstly, the uptake of EVs has been slower here. and I think a bit slower than what we anticipated largely because of cost and range issues. But the other difference is that there's many more Australians that have the opportunity to charge at home or charge at work, particularly charging at home when you compare it with some European countries. But nevertheless, we believe there will be a market in the future for those who want the opportunity for a delicious on-the-run lunch to charge their vehicle whilst they eat. And we've seen this happen elsewhere in the world. And I think to some extent, it could still happen in Australia. But it is work in progress, and this sector is changing so quickly every day. We were working on a 20-minute period that will be necessary for them to charge. And now, of course, we know with some of the latest Chinese vehicles, they can charge in 5 minutes. So they'll have to -- they could take away pie, I suppose. But it does mean that I think we've been -- we've made the right decision to approach the installation of EVs in a cautious and managed way. So if we had flooded our service stations at the moment with EVs, we simply wouldn't have had the business to make them pay. So this -- it's just another example in the energy transition where it -- some things you have to be upfront and you've got to set an example and take a risk. But in others, you're better off just not being the first mover and just to see how this transition plays out before you invest your hard-earned shareholders' money.

Thank you, Chairman.

I should say just in passing, one of our interest in on the run actually was the fact that more so than with other convenience offers, there was a larger number of customers who actually simply go to the store. So that was our rationale that over time, as demand for traditional hydrocarbon fuels slows, which hasn't been slowing as some expected, that gap would be picked up by a better convenience offer. That's the strategy, and I think that strategy is still sound. Are there any other questions from the floor?

Yes. [ Russell Weavers ] shareholder. I'm particularly interested to hear a bit more about the low-sulfur fuel. You mentioned about a mandate, but I'm wondering, is this a government mandate that everybody has got to produce low carbon -- low sulfur fuels, which you said will come on later this year. And is that going to help with the margins on the sale of the fuel? That's my question.

Yes. No, it's again, thank you. It's a good question. Basically, it's a public health issue, and Australia is catching up with other parts of the world. So the government did require existing refineries to upgrade those refineries to world's best practice means to have a facility that will produce a low -- ultra-low sulfur gasoline. And it's an expensive enterprise. For us, it's about $400 million, of which the government because it's largely a public good rather than company good because it's a public good, the government has contributed some of money in this instance of about $150 million. In relation to the margin, Scott could answer it better than me, but we think there will be some, but not a great uplift. So it's principally a public health requirement. It brings the refinery up to world's best practice. It's a complicated large and complicated piece of kit. And our people have done an extraordinary job down at Geelong. If you ever want to come down and have a look at it, you'll be amazed. It's -- and we're delivering it on the government schedule. It's -- what would you say, 90% complete now. And it's part of the government's broader requirements for the sector in Australia. Unfortunately, the remaining international companies in refining walked rather than invested. So the only 2 refining companies, the 2 listed Australian companies have invested in similar plant, and it will be a better refinery as a result of it. But do you want to say what you think will be the uplift?

Yes, I can. I think it will require anyone importing petrol into Australia or making it here to be supplying low sulfur petrol progressively so that by 15th of December, it's -- when you go to fill up a petrol station, that's what you're going to get. So it takes time to push all that through the supply chain, of course. But because the specification is obviously a tighter specification than what we currently make, if you're importing that fuel, it will cost more to buy on the international markets than the current grade of petrol does, which means that the value of the petrol we make at Geelong will be more -- will be higher, and therefore, the refining margins will be higher, and it will -- it will provide a reasonably meaningful uplift on the gasoline or the petrol that we make. It's not the only thing we make at Geelong, of course. So it's part of the refining margin. But we've been saying to investors, it's sort of probably in the order of USD 1 to USD 1.50 a barrel uplift in gasoline margins.

And will that be replacing an existing [ basal ] or will there be another nozzle on the basal?

No, no, all the petrol you currently buy, whether it's 91, 95 or 98, will all be low sulfur 10 parts per million sulfur petrol. So currently, it's much higher than that. So it all comes down. But the grades you currently buy will be the same.

Might encourage you to delay your switch to an EV.

It reduces not just emissions from the tail pipe. So as Robert said, it's a health benefit.

Thank you. Any other questions from the floor? If not, Julia, do we have any questions online?

We do, Chairman. We have a couple of general business questions. The first one is from Stephen Mayne. And his question is, is the Chair, Robert Hill, intending to run again when his current term expires in 2027 at the age of 81. There are no other independent chairs of ASX 200 who are over 80 years old. Will Robert still be in the chair at Viva by the time of his birthday on September 25 next year? Or is Chair succession likely to occur before then?

Does it mean he wants me to go or stay? Somebody told me the other day that observed a gray hair or 2. So I will pass the baton to the next generation. Any other questions?

Yes, Chair, we've got another question also from Stephen Mayne. John Joyce is a good Board appointment given his background running ALDI and our heavy push into convenience retailing, but it is not good practice to announce the appointment of a new director in the short period between the publication of the Notice of Meeting and the holding of the AGM. As a former politician himself, surely Chair, Robert Hill, recognizes the importance of directors receiving a mandate. What prevented John from being presented for election at today's AGM?

His commencement date is after the AGM. So -- that's when he's commencing. If he was commencing before the AGM, then he would submit himself in the same way as Mark Chung is. So it's just part of the corporate practice. There's nothing sinister in it, if that's what's being suggested. Okay.

There's no more online questions.

More online?

There is no more online questions.

No more online. Any questions on the phone?

There are no questions on the phone line at this time.

If there's no further questions, I declare that the financial statements and reports have been received and considered. The next item of business, item 2, the remuneration report. The vote on this item is advisory only. However, the Board will consider and take into account the outcome of the vote and feedback from shareholders on the remuneration report. Are there any questions from the floor on the remuneration report?

Thank you, Chairman. I should start off by saying that the Shareholders' Association is voting in favor of the report. 2024 was a pretty good year in remuneration terms, both for the 12 monthly short term and the 3-yearly long term. But as representatives of shareholders, we are concerned that over the last 3 years, the share price has gone from $3.49 to $2.63 to, I think, about $1.91 when I left home and that earnings have also fallen over the last 3 years. Now clearly, earnings per share are affected by the number of shares on issue. But we do just make that point that taken together with the debt levels, remuneration and reward will be closely watched because they need to be reflected in the performance of the company in this current year and in the next couple of years as well.

Yes. Well, I'll answer the question. We accept that principle. Yes, there's got to be a sharing of the pain and a sharing of the gain. I don't totally accept what you said about the rem outcomes for this last year. I think the short-term incentive came in at about 33%, which reflected the -- that we didn't achieve the returns that we expected and that largely related to not getting the uplift in the retail part of the business that we were expecting. On reflection, maybe we expected too much in that too shorter time that year '24 only included the first 8 months after the acquisition of On the Run. And the integration challenge and the rollout was clearly more substantial than what we had anticipated. And when you link that to the outside -- I don't want to make excuses by referring to outside factors such as the illegal tobacco event that's hit us so substantially. We didn't achieve what we wanted to achieve in the retail sector. And when we reported expectations for a softer first half in this year, which is part of the same situation, the share price dropped over the edge, which disappointed us as much as it disappointed you. The response, the response is the actions we've taken to intensify the rollout and the integration, get those factors behind us to take costs out and to do everything possible to achieve the retail financial result that we want. And if we can deliver those improved earnings, which I'm confident we can and even in that report of February, we foreshadowed a stronger second half of the year when we have some of these integration issues behind us. And they are getting behind us now. In South Australia, for example, it's now our fuel that we're selling and the BP signs have gone from the service stations. We're now off the Coles operating systems. We now have our own, which is a significant saving. And the cost-outs that Scott referred to in his speech are occurring as we stand here today. So with better earnings during the course of this year, we have every hope -- reasonable hope, I would suggest that we will claw our way back up the share price mountain. And there's been some improvement to indicate as we've -- as shareholders have gradually regained confidence that we will achieve our aspirations, the share price has gradually started to increase again. So we share our disappointments and our good times, we share the benefits, and we'll make sure that the executives do as well.

Chairman, you mentioned that the illicit tobacco trade. This is a societal issue as much as a business issue. And there's a conundrum there because there's a revenue for the government, which is declining, but still substantial. There's the crime associated with all that. Is Viva and other major retailers of tobacco products, of which I don't approve, but anyway, are you making representations to government about tackling this? What is a crime against society?

We are every day. I guess, as you've sort of indicated, governments, they want the revenue, but they don't really want to be seen to be encouraging smoking either. But they are gradually have put more effort into it and the state governments have been passing stronger laws. And the police have become more involved as organized crime came into this new business opportunity. It took hold very quickly and quite deeply. And what's disturbed me is that a lot of people don't see it as a criminal activity. The government is taxing me too much, why shouldn't I get the cheap cigarettes. But anyway, the police are now starting to make some arrest under the new laws, the South Australian laws, which I think will be ultimately adopted across Australia, the police will be able to close down shops that are selling illegal cigarettes. And I think we will recover some of that business. I'm not sure that we'll ever recover all of it. The only other thing I would add is that -- and I commend our retail team. They've actually used the opportunity to quite successfully argue with the tobacco companies for increased -- some improvements in the margin. So whilst the volume might have slipped, the margins have improved a bit. But in this first operation of the OTR business, it has come as a shock, and it has been costly. But we have no alternative but to work our way through it.

Thank you, Chairman.

Thank you. Any other questions from the floor? The rem report? If not, Julia, we've got any questions online?

Yes, we do, Chairman. It's a question from Stephen Mayne. Which of the 5 main proxy advisers, ACSI, Ownership Matters, Glass Lewis, ISS and ASA covered us this year? And did any recommend a vote against any of today's resolutions, including this remuneration report? Also, thanks for disclosing the proxies early with the formal addresses showing the biggest protest vote was only 9% against the rem report. What's caused this?

Thanks for showing that. What's the last point?

Yes. So we displayed the outcome of the proxy votes.

Yes. No, all the proxy advisers recommend a vote in favor of all motions. So -- and I appreciate that. And there was some protest vote, I guess, is a fair enough expression from 2 significant shareholders. And I think the message behind it was really to remind us that really it's similar to the question that was asked, and that is to ensure -- as a Board, ensure that the executives -- the position of the executives reflects the interest of the shareholders as you go through tumultuous times. So I take that message. We accept that message and respect their right to give us that reminder. Any other questions online?

No, Chairman.

Are any phone questions on the phone?

There are no questions on the phone line at this time.

Okay. So sorry, but no questions on the phone, and that one doesn't get voted on, does it? So we moved -- does it or does not?

Yes, Chair. So we've got a summary of direct and proxy votes that are now displayed. And given that there are no further questions on this item of business, we formally put the motion. Yes.

Okay. So the question is the remuneration report for the year ended 31st of December 2024 be adopted. Please record your vote now. And if you haven't already done so, for shareholders attending this meeting in person, please now select for, against or abstain next to Resolution 2 on the yellow paper voting card. For shareholders attending the meeting online, please select for, against or abstain next to resolution 2 on your online voting card. So we move to the third of our matters. This item relates to the reelection of Dat Duong as a director. Dat retires at this meeting in accordance with the company's constitution and being eligible, offers himself for reelection. The Board has considered Dat's performance and contribution and supports Dat's reelection. Details of Dat's qualifications, career and experience are set out in the notice of meeting and in the annual report. Dat, as I said, is here with us on the platform today, and I will ask him to speak to you in support of his reelection.

Thank you, Mr. Chairman, and good afternoon, everyone. My name is Dat Duong, and it's honored to be here today to offer myself for reelection to the Viva Energy Board. As a result, I would like to take a few minutes to provide a brief background on my experience and how I can add value to Viva Energy. I actually started my career in the industry that Viva is in as a retail business analyst at Esso Imperial Oil in Canada in 1998. Since then, I've accumulated 25 years of experience across the field of finance, accounting, strategy and mergers and acquisitions, mainly in the energy industry. I have extensive experience in international investment banking, both in Hong Kong and in Canada, where I led multiple downstream oil transactions during my time with Merrill Lynch in the Global Energy and Power Investment Banking Group. I have been with Vitol for almost 15 years, and I'm currently the Vitol Investment Partnership Portfolio Manager that manages over $15 billion of assets globally, including retail stations, refineries, terminals and commercial businesses. I bring significant experience in financial and strategic analysis to the Board of Viva Energy as well as providing an international perspective of best practices by similar companies that Vitol owns around the world. I am also a Director of the Saras Group, an Italian energy multinational company who operates 300,000 barrels a day refinery and also has operations in marketing, transportation and power generation, including renewables. In addition, I have a deep understanding of the business and industry having been involved with Viva Energy since the initial investment by the Vitol Investment Partnership in 2014. I'm extremely excited to continue as a Board member of Viva as the company enters the next phase of its strategic journey. So I humbly seek reelection and your support today. Thank you.

Thank you, Dat. Any questions from the floor? Any questions online regarding Dat's reelection?

Yes, we do, Chairman. The question is from Stephen Mayne. Vitol owns 30% of Viva Energy, but their 2 nominee directors never seem to buy any of our shares and aren't even paid directors' fees by Viva Energy. Could Dat please explain why this is so and whether the performance of Viva Energy impacts his bonus arrangements at Vitol? In other words, what alignment or incentive does that have to drive shareholder returns at Viva Energy? Is he banned from buying our shares by Vitol policy? Or does he choose to retain a zero investment?

Yes. I can handle that question, Robert. It's company policy that Mark and I, who are employees of Vitol do not -- cannot buy shares in the company. But I can assure you, as the portfolio manager of Vitol Investment Partnership who owns the shares in Viva, we are aligned in terms of trying to drive shareholder value, and we are remunerated by the performance of Viva shares. This is an important investment for us and the firm, and we are fully aligned that with other investors that we increase the value of the shares in Viva.

Dat was one of those a little over 10 years ago who observed what a wonderful business this could be when Shell was deciding to downsize in Australia and has put in an enormous effort ever since to ensure that it is a wonderful business. Thanks, Dat. Now any other questions online?

No more questions online.

Any questions on the phone?

There are no questions on the phone line at this time.

If there are no questions on the phone, I put the question that Dat Duong be reelected as a director of the company. Please record your vote now if you have not already done so. Nicola retires at this meeting in accordance with the company's constitution and being eligible, offers herself for reelection. The Board has considered Nicola's performance and contribution and supports Nicola's reelection. Details of Nicola's qualifications, career and experience are set out in the Notice of Meeting and in the annual report. I'll ask Nicola to say a few words about her reelection.

Thank you, Chair. Good afternoon, ladies and gentlemen. It is a privilege to be considered for election to the Viva Energy Board at this Annual General Meeting, and I'm delighted to speak in support of my election. I would like to make the following points about how I contribute to Viva Energy. In addition to my role on the Board, I'm the Chair of the Sustainability Committee, a member of the Audit and Risk Committee and the Strategy and Investment Committee. I'm also a Nonexecutive Director of the ASX-listed Sonic Healthcare, the Australian Government's Clean Energy Finance Corporation, the University of New South Wales Foundation and the Goodes O’'Loughlin Foundation. I'm also a Guardian of the Future Fund, a member of the Takeovers Panel, and I chair MetLife Australia and the 30% Club Australia. As an experienced senior executive, corporate lawyer and Nonexecutive Director, particularly of ASX-listed companies, I have a deep technical knowledge across a number of sectors that are relevant to Viva Energy, including energy transition, renewable energy, energy trading, resources, energy and infrastructure, transport and logistics, property and construction in Australia and globally. I also have over 30 years' experience as a corporate finance lawyer where I'm qualified to practice in Australia, Hong Kong and the United Kingdom. I've also lived and worked in Asia and North America and have worked with a number of businesses globally in many sectors. This experience allows me to have an appreciation of the complexity and diversity of the global markets that are relevant to Viva Energy and enables me to contribute effectively to the Board's oversight of Viva Energy's operations. My exposure to many high-performing organizations during my legal career and as a nonexecutive director on other boards has enabled me to understand the importance of having a great culture, values and organizational resilience, never more so than today. I believe that I can bring this experience from other successful organizations to my work on the Viva Energy Board. My experience as a nonexecutive director and as an adviser to Board brings a useful and relevant understanding of corporate governance and of how good Boards should operate. I also have extensive experience in ESG and safety through chairing similar committees on other Boards. This experience assists me in my current role as Chair of the Sustainability Committee and allows me to contribute to the business, strategic, regulatory and governance aspects as a director of Viva Energy given its diverse operations. Viva Energy has a great Board with a broad mix of skills and experience, and I'm delighted to be part of it in this very dynamic Australian company. Thank you for considering my election. I can assure you that I will contribute to dedicate both the time and commitment to fulfill my duties to Viva Energy and its shareholders. I, therefore, offer myself for election to the Board of Viva Energy and very much appreciate your support. Thank you.

Thank you, Nicola. Are there any questions from the floor? Sorry if you have a question, could you move to the microphone, please? Or maybe we could take a microphone to you. And just...

[ Jack Kara ], is she shareholder?

Okay. Question to Nicola. Are you a shareholder?

Yes, I am and my shareholding as a .

Why didn't you say so?

Sorry, I should have said so. Yes. Thank you.

Her shareholding is in the annual report and meets the constitutional requirement. Any other questions from the floor? Any questions online, Julia?

No, Chairman.

Any questions on the phone?

There are no questions on the phone line at this time.

No questions on the phone. We put the -- I put the motion that Nicola Wakefield Evans be reelected as a director of the company. Please record your vote now and if you haven't already done so. Next item relates to the election of Mark Chung as a director. Mark was recently appointed to the Board, retires at this meeting in accordance with the company's constitution. Being eligible, Mark offers himself for election. Details of Mark's qualifications, career and experience are set out in the notice of motion. I'll ask Mark to speak to say a few words on his election.

So thank you very much, Chairman. Good afternoon, everyone. As alluded to, my name is Mark Chung. I'm very honored to have recently joined the Board of Viva Energy and also to stand before you for reelection today at this Annual General Meeting. Just a couple of words on background. I was born and raised in Melbourne, commenced my career here in Melbourne with Deutsche Bank in corporate finance and mergers and acquisitions. Since then, I've spent in the order of 20 years across the energy sector in finance, capital markets, mergers, acquisitions, investments on a global basis. here in Australia, in Hong Kong, in London and most recently now in Singapore with Vitol. Prior to joining Vitol, I was Managing Director at Bank of America Merrill Lynch. I also helped to look after and head the Asia Pacific Energy and Power investment banking effort there out of Hong Kong. And during that time, I was very fortunate to commence my association with Viva Energy and to have supported its public listing back in 2018. Having been with Vitol since 2020, I sit here as the Head of Investments for Vitol in the Asia Pacific. As you may know, Vitol has invested considerably across the entire energy spectrum. And we've invested today now in a global network of infrastructure that spans approximately 10,000 service stations globally in the order of 1 million barrels per day of refining capacity, storage terminals, upstream exploration and production of oil and natural gas, power generation, renewables and also into the energy transition. I'll look to bring the learnings and the global best practice from that network as well as experience across energy markets, governance, compliance and also reflect upon roles that I sit on as on the Supervisory Board of VTTI B.V., a global energy storage and infrastructure company invested by Vitol as well as Board Director of Vitol Emerald, a company which is invested in approximately 1,300 service stations across Sub-Saharan Africa and also as a previous role as a Board Director of VEV, a Vitol invested company, which has made inroads into fleet electrification and electric vehicle charging in the United Kingdom. I strongly believe Viva Energy has all of the building blocks for continued success. I'm very excited to be part of the company and the Board. And thank you for your consideration to this reelection, and I'm honored for your support. Thank you very much.

Thank you, Mark. Are there any questions from the floor for Mark? Any questions online, Julia?

Yes, Chairman. It might have been answered in part, but I'll read it in full. It's another question from Stephen Mayne. Could Mark Chung please comment on the selection process that saw him chosen to take 1 of Vitol's 2 seats on the Viva Energy Board? For instance, why wasn't the global CEO or Chair appointed? Mark went to Melbourne University, but he is living in Singapore. Is he intending to dial into Board meetings or take it more seriously and travel frequently to Australia to fulfill this role? What proportion of his time will the Viva Energy Board take up? And what other investments does he oversee at Vitol in the Asia Pacific region?

Mark?

Yes. So I think there were a few components.

Some of part you've answered in your presentation, but...

Yes. So I think we, as Vitol view Viva Energy as a very strategic long-term investment as Dat also alluded to. We put considerable thought as to how we support the investment moving forward and through the representation of Dat and myself and putting ourselves up for reelection. As it sits, I'm looking to focus a considerable amount of my time and to fully dedicate myself to the initiatives of the Board. I do not intend to support this remotely, which I believe was one of the questions, and will be here in person and spend a considerable amount of time with the Board and also the management team to take that forward. I think some of the other questions around other companies that I support and oversee has already been answered.

Any other questions online?

No other questions.

Any questions on the phone?

There are no questions on the phone line at this time.

Then I will put the question that Mark Chung be elected as a Director of the company. Please record your vote now if you haven't already done so. The voting lines will close shortly after the next item of business. The next item of business is Item 4, which is grant of performance rights to Scott Wyatt, proposed to issue 764,525 performance rights under the long-term incentive plan to Scott Wyatt, our Chief Executive and Managing Director. Each performance right will entitle Scott to acquire 1 ordinary share in the company for no consideration at the end of the performance period, subject to satisfaction of the performance obligations. The performance period is 3 years and will run for the 1st of January -- from the 1st of January 2025 to the 31st of December 2027. The notice of meeting sets out all the relevant details in relation to the performance rights, including performance conditions. Any questions from the floor on this item? Any questions online, Julia?

Yes, we do. We have a question from Stephen Mayne. The annual report says we have 13,101 shareholders, but less than 1,000 have voted today, a stark contrast with the 90% turnout we've just seen in the federal election. When disclosing the outcome of voting on all resolutions today, including this LTI grant, please advise the ASX how many shareholders voted for and against, similar with the scheme of arrangement. This will provide a better gauge of retail shareholder sentiment on all resolutions and insights into the chronically low retail shareholder participation rate.

I'm not quite sure that it relates to Item 4, but -- and I think Stephen has asked that in previous years, and the answer is that this -- we vote by poll, and we think it's the best reflection of the outcome, and we'll stick with that practice. Any other questions online?

No other questions.

Are there any questions on the phone?

There are no questions on the phone line at this time.

Then I'll put the question. Item 4, that 764,525 performance rights be granted to Scott Wyatt under the company's long-term incentive plan. Please record your vote now if you haven't already done so. And that covers all of the business before the Annual General Meeting today. And -- but in accordance with our usual practice, I will nevertheless ask if there are any further questions that any shareholders attending today or those online or those on the phone would like to ask. Any other questions from the floor? Any other questions online?

Nothing.

Any other questions on the phone?

There are no questions on the phone line.

Thank you for that. Voting will close shortly after the conclusion of the AGM. For those shareholders online, a 5-minute countdown timer will appear at the top of your screen, advising the remaining voting time. If you've not already cast your votes, can you please do so now? For shareholders at the meeting in Melbourne, please complete your voting -- your paper voting forms and place them in the ballot voting boxes with the MUFG staff who are both roaming in the room and also located at the exit doors. Voting results will be released to the ASX and will be displayed on the company's website after the conclusion of this meeting. Thank you again for participating today in this hybrid format meeting. We appreciate the attendance of shareholders both in person and participating remotely. And for those attending here today in Melbourne, I invite you to meet with your directors and management over a cup of tea or coffee. And I declare the Annual General Meeting now closed.