Transurban Group (TCL) Earnings Call Transcript

Good morning, everyone. My name is Craig Drummond, and I'm the Chair of the Transurban Group. Welcome to the 2023 Annual General Meeting, my first as Chair. This morning, we are holding 3 meetings concurrently. These are the Annual General Meetings for Transurban Holdings Limited, Transurban International Limited and Transurban Holding Trust. We have a quorum, so I declare the meetings open. As I'm chairing today's meeting in Melbourne on behalf of Transurban, I would like to acknowledge the traditional owners, the Wurundjeri people of the Kulin Nation. We pay our respects to Aboriginal and Torres Strait Islander cultures and to elders, past and present. Our assets are located on many different traditional lands. And to celebrate the opening of our M4-M5 Link in Sydney earlier this year, Aboriginal vocal group, KARI Singers, performed an acknowledgment of country, which you have just seen. The artwork featured on the link, Movement of Time, is one of the ways that we demonstrate respect to the traditional owners and their connection to land and to our local communities. The Board and I are pleased to be meeting with security holders in person and online today as well as providing our security holders with an update on our operations. This AGM also provides an opportunity for Board members to hear directly from security holders. For those joining us online, we have worked diligently to ensure that the broadcast runs smoothly. But should you experience any technical difficulties, a recording of the meetings will be available on our website later today. As outlined in the notice of meeting, security holders will have the opportunity to vote and ask questions of the Board in real time. To provide everyone with an opportunity to vote, and in case anyone cannot stay for the duration of our meetings, I will now formally open the poll on all resolutions. The notice of meetings was made available to all of you. With your consent, I will take that document as read. I would now like to introduce the directors and our company secretary. On my right, our Company Secretary, Fiona Last; our Chief Executive Officer, Scott Charlton; CEO Designate, Michelle Jablko. And independent nonexecutive directors: Rob Whitfield, Terry Bowen, Patricia Cross, Mark Birrell, Peter Scott, Marina Go and Tim Reed. In addition, our newest Director, Sarah Ryan, is attending today's meetings remotely due to a long-standing prior commitment. Since our last AGM, and in my first year as Chair, the Board has been actively engaged in Board and CEO succession planning. In February 2023, we announced that our Chief Executive Officer, Scott Charlton, will leave Transurban later in the year. I'm delighted that the Board has appointed Michelle Jablko as our new CEO. Michelle will commence in the position of CEO upon the conclusion of today's meetings. On behalf of the Board, I would like to acknowledge Scott's outstanding leadership over the past 11 years. Scott has transformed the business, increasing the portfolio from 6 to 22 assets and building Transurban into a world-class toll road operator and owner. Under his leadership, Transurban's market capitalization has increased and more than quadrupled to around $38 billion with total security holder returns of 276%. The assets that Scott and his team have developed or acquired are some of our most important in Australia and North America. They support economic growth, and deliver meaningful travel benefits for customers in terms of time savings, reliability and safety. Michelle's appointment is the first internal CEO appointment in Transurban's history, and positions our business extremely well to keep delivering for all of our stakeholders. Michelle joined Transurban in early 2021 as Chief Financial Officer, after being CFO at ANZ for just under 5 years. She brings a balance of strong leadership, financial acumen, experiencing complex transactions as well as a focus on building relationships with stakeholders. Michelle's skills and experience make her an excellent leader for Transurban's next phase of growth. You will have an opportunity to hear from both Scott and Michelle during today's meetings. Last month, we announced that Henry Byrne, our current Group Executive, Victorian Strategy, has been appointed CFO, effective from the conclusion of today's meetings. Henry, who joined Transurban in 2007, has held broad leadership roles, including across strategy, Investor Relations and asset management. He has strong internal and external relationships and a deep understanding of the strategic drivers of Transurban's business. As part of the Board's active succession activities, Dr. Sarah Ryan was appointed a Nonexecutive Director on September 1, 2023. The Board considers Sarah's diverse experience with large global companies involved in complex, capital-intensive projects, complements the Board's existing mix of skills, experience and diversity. In addition, Mark Birrell and Patricia Cross are standing for reelection today. Both Mark and Patricia are valuable contributors to our Board. You will hear from Sarah, Mark and Patricia today. We recently announced the retirement of 2 directors. After more than 6.5 years, Dr. Jane Wilson has decided not to seek reelection. Further, having recently accepted a global executive role, Terry Bowen has decided to step down from the Board. Both Jane and Terry have been valuable contributors during a period of growth and success for Transurban. And on behalf of the Board, I thank them for their significant contribution and service to our Board. I'm pleased to confirm that Rob Whitfield has been appointed Chair of our Audit and Risk Committee, and that Patricia Cross has been appointed Chair of the Remuneration, People and Culture Committee. As outlined in our notice of meetings, the Board is actively engaged in searches for 2 nonexecutive directors to complement the skills, experience and diversity of the Board. Financial year 2023 was an excellent year for Transurban with record traffic and financial results and significant milestones achieved on our major projects. Traffic volumes reached an average of 2.4 million trips a day. And our customers collectively saved more than 400,000 hours in travel time every workday. Our customers have the benefit of driving on roads that have been independently assessed as twice as safe as similar motorways. The free-flying nature of our roads also means they save nearly 30% in greenhouse gas emissions compared to using alternative stop-start routes. Delivering tangible benefits such as these to our customers is fundamental to our success and the sustainability of our business. Since joining the Board, I have been impressed by the approach taken right across the business to consistently look for ways to create further value for our customers, government partners, community, business partners, suppliers, employees and, of course, for you, our security holders. This is not a business that rests on its laurels. We understand that to create value for our shareholders and stakeholders means that we must understand them well and forge trusted relationships with them. Creating value may come in the form of multibillion-dollar projects such as WestConnex or West Gate Tunnel that transform a city's transport network. Or it may come from a customer service team member who goes over and above to solve a customer issue. Most importantly, whatever the project initiative or interaction, we measure our performance to assess whether we are truly meeting stakeholder needs. In FY '23, we achieved a customer Net Promoter Score known as NPS of positive 7, which reflects a 24-point improvement over the past 5 years. NPS is a globally recognized benchmark of customer advocacy and loyalty and we gauge our performance through comprehensive feedback surveys on all customer service channels. It is pleasing to see this positive trend, but there is clearly room for improvement in the way we service and the value we deliver to our customers. This will remain a key priority going forward. One of the areas of focus will be on our customer rewards program, which we are looking to further expand. This year, we introduced Europcar as a car rental partner, and we also continued to promote our fuel discount offer. The offer has saved customers more than $8 million -- sorry, $6 million since launching in 2019. We recognize that higher living costs in the current economic environment are impacting many households. While we now have almost 10.3 million customers, most use our roads infrequently. On average, around 80% of our Australian customers spend less than $10 a week on tolls. However, for those customers, who may be facing hardship, we continue to offer support through our Linkt Assist and first-time forgiveness programs in Australia and North America. During the year, we made substantial progress on our major construction projects. We will share a video shortly to show some of the highlights. These projects are the most visible examples of how we go about delivering value for our stakeholders by creating transport infrastructure that is critical to the efficient functioning of our cities. Projects such as these also generate further cash flow to underpin distribution growth for security holders for years to come. I would also like to touch briefly on the Australian Competition and Consumer Commission's recent announcement that it opposes Transurban's acquiring a majority interest in Aurizon Roads, the owner of EastLink. The decision is specifically in relation to the acquisition of the majority interest in Eastlink. As previously announced, we are closely reviewing the decision and considering all options available to us. Turning now to recap our financial results, which we announced in August. As I mentioned earlier, traffic volumes in the last financial year reached record levels with an average of 2.4 million trips taken on our roads every day. In our September quarter results, which we released today, that number has grown to around 2.5 million trips and represents our highest quarterly traffic result for the group yet. Average daily traffic is up 3% compared to the last September quarter, supported by record large vehicle traffic across all Australian markets. Brisbane achieved its highest quarterly traffic result across weekdays and the weekend, and for both cars and large vehicles. Despite construction works impacting some assets in Sydney and Melbourne, both markets recorded strong quarterly results. Sydney recorded its second highest quarterly traffic result ever, and Melbourne achieved its highest quarterly traffic result since the pandemic. In North America, traffic on the 495 and 95 Express Lanes is up compared to the last September quarter. And traffic on the 95 Express Lanes is now sitting 16% higher than pre-pandemic levels. Alongside our record traffic result, the group reported a number of other record results in FY '23. Proportional toll revenue increased by more than 26% to a record $3.3 billion. Proportional earnings before interest, tax, depreciation and amortization, EBITDA, was also a record, increasing by almost 29% to more than $2.4 billion as we continue to maximize the performance of our operations. Free cash flow, excluding capital releases, increased by approximately 45%, which allowed us to pay $1.61 billion in distributions to security holders. The full year distribution of $0.58 per stapled security was an increase of almost 42% on FY '22 and 97% covered by free cash. While higher inflation and interest rates continue to impact economies globally, 68% of our toll escalations are linked to the Consumer Price Index. This provides protection for our business in this environment. Our exposure to short-term spikes in interest rates is minimized by our high rate of hedging. More than 96% of our existing borrowings are interest-rate hedged. In FY '27, we raised approximately $7.7 billion of debt facilities, across bank and debt capital markets to support funding initiatives and the delivery of projects. We maintained a broadly stable weighted average cost of debt at 4.1%, despite a 325 basis point increase in the cash rate over the period. In FY '23, we continued our stakeholder listening program. This included an annual community survey of almost 5,000 people in Australia to provide further insight into how we're performing and what matters most to them. This year, one of the key findings was for Transurban to build on its environmental, social and governance, ESG activities. While sustainability and ESG have been a long-standing focus area for our business, it is important that we continually challenge our approach to realize the best possible outcomes. We have set a pathway to Net Zero greenhouse gas emissions by 2050 through a range of targets. This year, we exceeded our target for a 50% reduction in our Scope 1 and 2 fuel and electricity emissions by 2030, 7 years ahead of schedule. The 2030 target has been externally validated by the globally recognized science-based targets initiative as being aligned to limiting climate change to 1.5 degrees. Our reduction in emissions has been largely due to improvements in energy efficiency and transitioning to renewable energy. In FY '23, 80% of our electricity needs came from renewable sources. Our assets will likely face a range of impacts due to extreme weather events. So it is critical that we continually evolve our approach to building and operating resilient infrastructure. We've been working with our suppliers on decarbonization strategies and have expanded greenhouse gas emission reporting to include our top 100 suppliers. Their progress is monitored through their participation in the carbon disclosure project supply chain reporting. We've also been proactive in promoting the benefits of electronic -- electric vehicles as a means of reducing greenhouse gas emissions. This included co-sponsoring the Parliamentary Friends of Electric Vehicles and Future Fuels Transport Group, which was launched on the launch of Parliament House in Canberra in June. While customer vehicle emissions are not within our Scope 3 emissions, which include our projects and supply chain, we recognize the impact that fossil fuel-powered vehicles have on the environment. Therefore, it is important that we play a role in helping accelerate the uptake of EVs through community education. During the year, we also continued to invest in community activities that range from learn to drive programs to road safety research. Our investments are targeted activities and partnerships that are important to local communities and contributed to positive social, economic and environmental outcomes. Finally, I would like to comment on our remuneration framework. This year, we introduced a group performance scorecard to reflect the focus that we put on creating value for all stakeholders and ensuring executive remuneration is well aligned to overall business performance. The scorecard, which informs short-term incentive outcomes, includes financial and nonfinancial measures, comprising health and safety and the environment, customer and delivery as well as sustainability, reputation and leadership. Pleasingly, this year, we achieved a strong balance of results in all areas. The outcomes are outlined in the Remuneration Report in our Corporate Report that is available on our website. Our business is in a strong position. We have a robust and well-managed balance sheet. We have a committed project pipeline and excellent opportunities in the near term and beyond. Today, we reaffirm our guidance that we expect the FY '24 distribution to be $0.62 per security. This represents approximately 7% growth on FY '23 and would be a record distribution for the group. The guidance reflects our confidence in the underlying business as well as our capacity to deliver ongoing value for all stakeholders. On behalf of the Board, I would like to thank the executive team and all our employees for their efforts and hard work over the year, which is evident through these excellent results. Lastly, I would like to thank you, our security holders, for your ongoing support of Transurban. I would now like to hand over to Scott for his final address. But before doing so, I would like to take this opportunity to play a short video of some of the project highlights during the year. [Presentation]

Great, very inspiring video if you're an engineer or an infrastructure nerd. Some of us are. Those are some of the greatest projects obviously being built not only in Australia but some of the biggest projects in the world. Thanks, Craig, and thank you for, obviously, your very kind words. It has been a privilege and a highlight of my career to lead this exceptional organization for the past 11 years. I've been surrounded by a tremendous team that is truly committed to making our cities better places and to making some real differences to people's lives. Craig has spoken about our performance for 2023, which was, I think, one of our best years. And Michelle is going to speak about the future of your company. And in my comments, I'd like to remind you, as security holders, of why I'm so proud of our company and why I believe you should be as well. So hard to believe that cars first drove on CityLink in 1999. And we recorded there an average about 200,000 transactions a day. And now there are more than 4x the number of transactions on CityLink in any one day. We have almost 10.3 million customers, which is more than most organizations in Australia. And we have an average of 2.5 million trips a day made across our 22 different assets. And we had some modeling estimate that CityLink would save about 30,000 hours a day in 2011. So this was done a long time ago. What we find today is in FY '23, we estimate customers that are collectively say, nearly 80,000 hours on an average workday using CityLink. And in the past decade, we have estimated that our customers, and this is a pretty astounding number, in the last decade, our customers have saved around 87 million hours in travel time across all of our assets compared to the alternatives. So clearly, that is time that people have spent being more productive, spending time with friends or families or doing whatever they choose to do with their time. Our customers have also benefited from our investment in state-of-the-art safety and traffic management technology, some of which Craig talked about. And that's allowed our road safety performance to improve even as our networks have grown substantially. Now since 2015, the number of vehicle kilometers that have traveled on our roads has increased by 55% as a result of both new assets and just increasing traffic in our markets, but the rate of serious injury crashes has decreased by more than 22%. Also in the past 20 years, we've invested more than $38 billion in new projects and acquisitions, along with our partners. We've also invested around $4 billion in further enhancing our own assets, including the city's M2, the M5, Logan Motorway in Queensland and of course, CityLink here in Melbourne. And this has enabled us to create more capacity and keep the cities moving as population continues to grow. Today, we have more than 350 kilometers of roads in operation and we have a multibillion-dollar pipeline of current projects and potential near-term opportunities. Now over the past decade, these projects have created approximately 85,000 jobs. We've had more than 2,800 apprentices that have been trained at academies that were established as part of our major projects. And when our projects are completed, not only do the customers benefit from the road, but the local communities get their streets back. In Sydney, more than 26,000 trucks use NorthConnex and WestConnex every day, and these are trucks that would have otherwise been using the local streets. In Melbourne, around 9,000 trucks a day are expected to bypass local streets once the West Gate Tunnel project opens. And from a broader perspective, the economic benefits of our roads in terms of travel time savings, reliability gains and reducing operating costs are significant. KPMG estimates the total economic benefits from the accelerated delivery of toll roads by the private sector in Sydney alone to be $35 billion over 30 years to 2046. In the U.S., the broader economic impact of the Express Lanes is estimated to be around USD 8 billion. Now just over 20 years ago, some of you may remember, I remember, I wasn't with Transurban then, but I remember CityLink being built. Most of Transurban's 142 employees were housed in some transportable buildings alongside CityLink. Today, we employ around 4,000 people in our direct workforce, spread across our 5 markets here in North America. And we have some of the greatest people and specialists in fields as diverse as data science, artificial intelligence, and traffic modeling, all the way to community engagement, sustainability, safety research and everything in between. Now all these people contribute in different ways to achieve our purpose, which is to strengthen communities through transport. And again, we always use data, and I believe the numbers tell the story. And here are just a few examples of the different ways the team has been delivering on our purpose. We've provided more than 400 grants to local community organizations in Australia over the last 9 years. We've invested over USD 2 million in more than 350 not-for-profit organizations in the U.S. One thing that I'm very proud of is we've raised more than $21 million for the Royal Children's Hospital in Melbourne through the Run for the Kids. We have procured approximately $1 billion in contracts with women and minority-owned businesses in the U.S. We provided approximately $10 million in toll credits during COVID-19 to over 40,000 people across Australia. And we've committed close to $5 million to Neuroscience Research Australia to fund Transurban Safety Center in a partnership that is now going into its seventh year. So in summary from me, your company creates substantial economic value for our cities. We create jobs. We make life safer on the road, and we improve communities. We give people options on choices about how they travel and how they spend their time, and we help make our cities some of the best in the world. But importantly, we do this all while providing strong financial returns to you, our security holders. So again, I'm very proud of what our company has done and will be doing. And I'd like to take that final opportunity to thank you for -- our investors for all your support over my time at Transurban. Since 1999, our market capitalization, as Craig said, it's grown around $38 billion. And in that time, we have raised more than $16 billion in equity for acquisitions, including Queensland Motorways and WestConnex as well as projects such as right here with the West Gate Tunnel. And these investments have extended our average concession life to more than 28 years, which is longer than when I started at Transurban. And they deliver long-term distribution growth and they're going to create substantial value. So again, thank you for your support. But we all know the great cities don't just happen and they require planning foresight and ideas, and they need great transport solution. And that's what Transurban has and will continue to deliver under your new CEO. So congratulations to Michelle, who will be an excellent leader to take the business to the next phase of the growth. Your business is in great hands. Thank you to my fellow Board members and my executive committee colleagues for all your support. And finally, thank you to the whole Transurban team. It's been an amazing journey, and I look forward to seeing what a difference you continue to make to our cities. And thank you to my family -- sorry, and friends for all your support. I almost made it. And now I'd like to introduce Michelle to make a few comments.

It's very hard to follow that. Thank you, Scott, and good morning, everyone. I would like to start by saying that I'm honored to be appointed as Transurban's next CEO. I would also like to acknowledge the transformative impact of Scott's leadership on our business over the past decade. The business is in great shape. And over the past couple of months, we've ensured a smooth transition so that we can build on the momentum we have. I'll be supported in my new role by an experienced and capable executive team including Henry Byrne, who will be taking over from me as Transurban's next Chief Financial Officer. Along with an exceptional team of people throughout Transurban, I'm inheriting a strong business. This starts with the more than 10 million customers, who choose to use our roads here and in North America for faster, safer, more reliable and more efficient travel. In August, we opened the first phase of the Fredericksburg Extension, a 16-kilometer extension of the 95 Express Lanes in Virginia. This now means motorists traveling between Washington, D.C. and Fredericksburg can save around 30 minutes during peak hour. The customer demand has been evident since it opened, with 75% of customers who use the 95 Express Lanes, continuing their journey through the extension. And in Sydney, the M4-M8 Link, which we opened in January, means motorists using WestConnex to head from Parramatta to the airport can save around 40 minutes in travel time during peak hour and bypass 52 sets of traffic lights. At a time when our research shows that over 60% of the community are concerned about the current levels of congestion, these travel time savings provide customers with real choice about how to move around their city. The strength of this value proposition is reflected in our record traffic results, in the September quarter, of 2.5 million average trips per day, which the Chair touched on earlier. Now as well as having a clear value proposition, I'm excited by the tremendous potential for growth that Transurban has close to our core. Looking ahead, we had some exciting projects to deliver in the next few years. The West Gate Tunnel project here in Melbourne, further Express Lanes extensions in Virginia and the M7-M12 integration project in Sydney. And we're also working closely with the New South Wales government on its opening of the Rozelle Interchange as part of WestConnex later this year. In addition to our project pipeline, we also have a significant number of other opportunities to grow the portfolio in our markets. Investment in infrastructure will be essential to prepare for population growth, which is expected to be 25% to 40% or more across our Australian market over the next 20 years. And in some cases, is already exceeding government forecasts. While a huge challenge for our cities, it also presents us with opportunity to work with our stakeholders to come up with solutions that meet their needs, including new development opportunities. Delivering and operating tangible infrastructure that provides value to customers and the wider community is one of the many things that attracted me to Transurban, and is something we have a lot of experience in. Our success in this has been built on the trust of our government, community and business partners and, of course, you, our security holders. As Transurban's next CEO, I will continue to strengthen the value proposition for our customers and build on the quality and depth of the long-term relationships we have with our stakeholders. An example of this is in New South Wales, where we're working collaboratively with the government to identify opportunities for the road network to deliver greater efficiency, fairness, simplicity and transparency for users and, at the same time, supporting our long-term investments. Meeting the future needs of our cities will also require us to innovate and continually improve the safety and efficiency of our operations. We have a very long track record of this. As Scott touched on, CityLink was one of the most sophisticated roads in the world when it opened nearly 25 years ago. But we're still always looking for ways to improve it for our customers. Just this year, we installed an innovative lighting system in the Burnley Tunnel to encourage smoother traffic flow, an initiative that has already seen 15% improvement in peak hour speeds since it was installed. Now if you, like me, know Melbourne well, you'll appreciate the difference and improvement like this can make when traveling across our city. Our investment in operational upgrades such as this also contributes to better safety outcomes for our customers. As the Chair mentioned, our roads have been independently assessed as being twice as safe as similar motorways. We're also exploring more ambitious applications of our technology, such as looking into how roads can support connected and autonomous vehicles including automated freight. Now while still an emerging technology, the potential benefits in terms of safety, less congestion and improved accessibility are significant and have motivated us to contribute to the rollout of automation in our markets. In August this year, we announced a partnership with Plus, a global Silicon Valley company that drives automated software. Combining our smart road infrastructure and operational expertise with Plus' state-of-the-art autonomous driving technology, we hope to work with the Victorian government and the broader freight industry to bring the benefit of automated freight one step closer, and set up the state to be an international leader in the space. I'm really proud of what we've delivered this year, and I'm excited by the opportunities we have to build on this going forward. As I've said, our success will come down to the value we provide our customers, the trust of our stakeholders and continuing innovation to meet the growing needs of our cities, and these will all be a key focus. My career has been built on long-term relationships. And in the coming months, I expect to have a lot more conversations with our partners. I want to ensure our stakeholders continue to work with us time and time again. I will also be listening to our customers and our communities to ensure that we continue to serve their interests. I believe that if we do this well, we will continue to grow both distributions and value for our security holders. I would like to thank the Board for the trust they've placed in me on your behalf to lead this next chapter for Transurban. Thank you.

Thank you, Scott and Michelle. Transcripts of my address and those of the CEO and the CEO Designate are available on the Transurban website and on the ASX. Before we move to the formalities, I'll begin by outlining the procedures for today's meetings. These are security holder meetings. As in past years, only security holders, their attorneys, proxies and corporate representatives are permitted to vote and ask questions. With the hybrid meeting format this year, there are 3 ways questions may be asked. For those attending in person, you may ask a question if you hold a blue or red card. When I invite questions later in the meeting, please make your way to a fixed microphone point and provide your name to the microphone attendant. If you're unable to make your way to the microphone, please raise your hand, and we will bring a roving microphone to you. [Operator Instructions] Written questions can be submitted at any time. Those may be moderated or grouped together to avoid repetition. And if questions are particularly lengthy, we may need to summarize them in the interest of time. To help with the smooth running of the meetings, we ask online participants to submit your questions now. If you are attending online and wish to ask a question verbally, you will need to follow the instructions below the broadcast window. We recommend that you wait until the question time begins before connecting to the audio line to minimize the time queuing to ask your question. Questions, which may be moderated, will come through to me as Chair of the meetings, and I will then answer it myself or I'll pass it on to the most appropriate person to answer the question. If a security holder has a question that relates to the online meeting technology, please contact the helpline detailed in our AGM online participation guide published on our website. To enable all security holders a reasonable opportunity to ask questions, you are requested to ask no more than 2 questions at a time. Please keep your questions short and to the point so that as many people as possible have the chance to ask a question. Please ensure your question is relevant to security holders as a whole. If you are an eligible security holder, a representative or attorney of an eligible security holder or a proxy for an eligible security holder, you are entitled to vote. For those attending the meetings in person, at registration, you should have been issued with a blue admission and voting card. If you are representing or you are a proxy for more than 1 security holder, you will have been provided with a separate admission and voting card for each separate capacity in which you are attending the meetings. Relevant voting instructions are printed on the reverse side of your blue card. When you complete your card, please indicate the manner in which the votes are to be cast by placing a mark in the For, Abstain or Against box for each resolution. If you have difficulty in completing your voting card, please raise your hand and a representative from Computershare will assist you. You do not need to put the percentage or number of votes you are voting unless you wish to do so. Before placing your voting card in the collection box, please ensure that you print your name on the bottom of the card. At the conclusion of the meetings, please place your voting card in one of the collection boxes located near the exit. If you are attending the meetings online and you are eligible to vote, a vote icon will appear on your screen. Sending -- selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of the options: for, against or abstain for each resolution. A tick will appear to confirm receipt of your vote. A tick will appear to confirm receipt of your vote. You can change your vote at any time until the poll is closed by selecting, Click here, to change your vote. Proxy holders are reminded that you must vote in accordance with the proxy holders' directions. Any directed proxies that are not voted at the meetings will automatically default to me as Chair of the meetings, and I am required to vote those proxies as directed. I intend to vote all proxies that are open and available to the Chair of the meeting in favor of the relevant resolutions. Again, if you require any assistance, please contact our securities registry, Computershare Investor Services. Ms. Doris Grave of Computershare, will act as returning officer. And I appoint the CEO Mr. Ewan Barron of PwC, the group's independent external auditor, to be the scrutineer for all resolutions. The results of today's meetings will be announced following the meetings on the ASX and on Transurban's website. I'll now turn to the formal items of business at today's meetings. The notice of meetings set out information regarding items for consideration at today's meetings. I will introduce each item of business separately and then invite questions on all items of business together after all items have been introduced. We will have five items of business today. Items 2 to 5 include resolutions that require a vote. Item 1 is the receipt and consideration of the Transurban Group financial report for the year ended 30 June 2023. This has been approved by your Board and provided to you with Transurban's 2023 corporate report. It is also available on Transurban's website. There is no need to pass the resolution on the financial report. However, security holders and proxy holders are welcome to ask questions in relation to the accounts or the overall activities of the group. As previously mentioned, we will take questions following the introduction of all items of business. Security holders and proxy holders will also be given a reasonable opportunity to ask Mr. Ewan Barron of PwC questions relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted in preparing the financial statements and the auditor's independence. All questions to the auditor should, in first instance, be addressed to me as Chair. And if appropriate, I will ask Mr. Barron to address the meetings. Item two of business on the agenda concerns the election and reelection of directors. Dr. Sarah Ryan was appointed as an independent Non-Executive Director in September 2023. Sarah is currently a member of the Nominations Committee. Sarah is an experienced Non-Executive Director and former energy executive with more than 30 years of international experience in the oil and gas industry. A copy of Sarah's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Sarah Ryan offers herself for election. I reconfirm the Board's view that Sara is an experienced Non-Executive Director with an extensive executive and nonexecutive career with large global companies involved in complex capital-intensive projects. She brings a deep understanding of large infrastructure projects across various industries and her expertise and experience is highly valued by the Board. In recommending her for election, the Board notes that Sarah has confirmed that she will have sufficient time to fulfill her duties as a director. The directors other than Sarah unanimously recommend her election. As Sarah is attending today's meeting remotely. We will now play a message from Sarah to security holders.

Thank you, Chairman, and good morning, everyone. I was delighted when I was recently invited to join the Board of Transurban as I believe I can make a real contribution to this company as a Nonexecutive Director. My executive background is the energy industry, with more than 30 years experience worldwide, mostly around operations, engineering and contracting as well as technology development and innovation. I've also spent 10 years in investment management, focusing on the global energy and natural resources industries. I'm a fellow of the Australian Academy of Technology and Engineering, and I hold a PhD in geology and geophysics. I'm currently a nonexecutive director on the Board of two other ASX-listed companies, being Horizon and Viva Energy, and a former Director of Woodside Energy and Oz Minerals. Many of the issues I've had to deal with over that time in both my executive and nonexecutive roles are very relevant to Transurban's business today and in the future. For example, large and complex construction projects with high levels of interest from a broad group of stakeholders, including the community and government, the emphasis on safety and risk management, the opportunities and challenges of new technology and innovation in infrastructure and the nature of the business as a provider of key infrastructure for communities in Australia and in North America. I can confirm that I have the time to devote to this role. I believe my background and experience leave me well placed to contribute to the company's future, and I'll be delighted to be elected as a director of security holders today. Thank you.

Thank you, Sarah. I'll now move to the proposed reelection of Mark Birrell as a Non-Executive Director. Mark was appointed as an independent Non-Executive Director in May 2018. He is a member of the Audit and Risk Committee and the Nomination Committee. Mark is a Director with deep industry experience in the fields of infrastructure and transport. A copy of Mark's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Mark offers himself for reelection. I reconfirm that Mark's contribution as an experienced director with extensive infrastructure industry knowledge are highly regarded by the Board. In recommending his reelection, the Board notes that Mark has confirmed that he will continue to have sufficient capacity to fulfill his duties as a Director and recognize his contribution as an experienced, diligent and committed director as a valued member of the Audit and Risk Committee and the Nomination Committee. The directors other than Mark unanimously recommend his reelection. I'll now ask Mark to address the meetings.

Thanks, Craig, and good morning, everyone. I'm pleased to offer myself for reelection to your Board today. I see Transurban as globally respected as a quality owner and operator of transport infrastructure. The company is distinguished by its long-term outlook and commitment to sustainable management. So it's been a privilege to serve as a nonexecutive director since 2018 and contribute to a company that has an outstanding Chairman, Board and management team. I'm pleased to bring a lifelong interest in infrastructure and urban development to this role. I've experienced the operational challenges of infrastructure and logistics through my previous roles as Chairman of the Port of Melbourne and Deputy Chairman of Australia Post. And I've helped lead public policy debate on improving cities and helping assist communities through my earlier service as a captive minister and recent roles as the Chair of Peak Bodies like Infrastructure Partnerships, Australia. Transurban is a sophisticated strong business, operating 24/7 to provide safe and swift transport for commuters and for freight. Without question, the company has got a clear vision across Sydney, Melbourne and Brisbane as well as in North America. And I'll work with my fellow directors to help ensure it reaches its full potential ahead. The last year has seen Transurban post-COVID settle into a more normal commercial environment and open new projects that have won quick support from motorists and the public more generally. Let me just call out two examples. First, Transurban opened the WestConnex M4/M8 Link tunnels early this year, marking a major milestone in that great project. This link is the final element of the WestConnex project delivered by our consortium with the Rozelle Interchange currently under construction by transport for New South Wales. The second example is in the U.S., where our 16-kilometer main line of the 95 Express Lanes Extension project known as FredEx opened in August this year. When fully complete, the extension of the 95 Express Lanes will create the longest reversible road in America, spanning 80 kilometers from Washington, D.C. into Virginia. These are two valuable examples of how your company will keep delivering positive outcomes for you our security holders as well as for our partners and for each of our stakeholder groups. I continue to be excited by the opportunities that lay ahead because Transurban is a very well-positioned company as a leading global infrastructure corporation focused on benefiting customers and its local communities. It's my wish to keep contributing to the strategic outlook and positive governance of this company. So it would be an honor to represent you again as an independent Board member. Thank you.

You give him a clap. Thank you, Mark. I'll now move to the proposed reelection of Patricia Cross as a Non-Executive Director. Patricia was appointed as an independent Non-Executive Director in July 2021. Patricia has recently been appointed Chair of the Remuneration, People and Culture Committee effective from the conclusion of today's meetings. She is also a member of the Nominations Committee. Patricia has extensive international experience as both an executive and nonexecutive director across a wide range of financial services and other industries. A copy of Patricia's bio is set out in the notice of meetings. In accordance with the constitutions of Transurban Holdings Limited and Transurban International Limited, Patricia Cross offers herself for reelection. I reconfirm the Board's view that Patricia brings extensive international capital markets, risk management and treasury expertise to the Board. In recommending her reelection, the Board notes that Patricia has confirmed that she will continue to have sufficient capacity to fulfill her duties as a director and recognizes her contribution as an experienced, diligent and committed director, and as a valued member of the Remuneration, People and Culture Committee and Nominations Committee. The directors other than Patricia unanimously recommend her reelection. And I'll now ask Patricia Cross to address the meeting.

Thank you, Chair, and good morning to everyone. I'm super honored to be here and to represent you, our shareholders, as the member of the Transurban Board of Directors. As I said, when I was first elected 2 years ago, I feel a great affinity with Transurban's purpose and business model. Our roads are safer, they're time saving, they're more reliable and have lower emissions and surface rates. It's also very satisfying to work with such a capable and energized management team and Board of Directors. The notice of the AGM does detail much of my extensive experience as an executive in international banking as well as a nonexecutive director and Chair with global-listed companies. So I'll try not to repeat all of that. Like my colleagues around the Board table, I've been very fortunate to have a wealth of experience. Mine in particular, is as a senior executive in several large listed international banks in multiple jurisdictions around the world. As a seasoned company director, a very large listed Australian and English companies, including Chair roles, and as an investment manager and Non-Executive Director and Chair of significant funds in the U.K. and Australia. There are a couple of things I'd like to quickly highlight. First, although I happily adopted Australia as my home and sole country of citizenship almost 30 years ago, I'm not originally from here. I think you can hear that. I've lived and worked in 7 countries, almost all of which are the types of strong economic Western economies that infrastructure companies like Transurban can thrive in. Washington, D.C. is one of those places that I lived in, studied in and worked in for quite a few years. My uniquely global perspective means I do think differently. Second, as one of the founding developers of over-the-counter financial risk management tools in Europe and the United States; and as a NAV Executive General Manager and Executive Committee member, in addition to having served as Macquarie Group's Board Risk Committee Chair, I confess to have a passion for balance sheets and risk management. Third, almost all of my career has been spent in iconic global companies that have huge and diverse customer and employee basis. What that means is that I've learned that the Board must weigh deeply into the culture of these types of organizations. We have to encourage constructive and enabling behaviors while discouraging those, which may be devices, and are inconsistent with organizational purpose. The Board needs to have a clear view of what the culture and actions of an organization brings to all stakeholders sustainably. So how pleasing it is a little over 2 years in to be able to participate in and advocate for Transurban's role within all of our communities. What we do matters. Transurban's purpose is vital to the economic and social communities we operate in. And all of my Board colleagues are intensely focused on this. I thank all of you for your support. I'd like to add to the thanks to Scott Charlton for your unparalleled contribution and leadership as a CEO. And I'm super enthusiastic about continuing to engage with all of my Transurban colleagues, many of whom are in the front row to continue to work in all of your best interests. Thank you very much.

Thank you, Patricia. Item 3 of business on the agenda is the adoption of the remuneration report of Transurban Holdings Limited and Transurban International Limited for the financial year ended 30 June 2023. Voting on the resolution in this item of business is advisory only. Transurban's remuneration strategy is designed to support and reinforce our business strategy, including the creation of sustainable long-term growth. The report aims to provide you with an understanding of the links between Transurban's strategy, its performance and executive remuneration as well as the framework we have in place to ensure effective governance of remuneration matters. The report also details the FY '23 remuneration arrangements and outcomes for our directors and senior executives. In determining the remuneration outcomes for FY '23, the Board took into consideration Transurban's strong results in areas spanning the breadth of our business from our daily operations to activities that create long-term value for our customers, communities and partners in government and business. The group FY '23 short-term incentive outcome was 108% of target with a year-on-year increase in EBITDA of 29% and distribution growth of more than 40% aligning STI outcomes with the experience of security holders. In determining the STI outcomes of the CEO and executive key management personnel, the Board considered both individual performance assessed as having performed at levels, which met or exceeded expectations and other factors that have contributed to the overall group result. The Board considers the resulting STI outcomes to be aligned with the experience and expectations of security holders. I would like to remind attendees that we will take questions on all items of business shortly following the introduction of the remaining items of business. Item 4 on the agenda is the approval to increase the aggregate amount that may be paid as remuneration to its nonexecutive directors known as the fee pool. The current aggregate fee pool previously approved by security holders at the 2016 AGM is $3 million. If security holder approval is obtained, the maximum aggregate amount that may be paid as remuneration to nonexecutive directors would increase by $500,000 to $3.5 million. As detailed in the notice of meeting, seeking security holder approval does not indicate the Transurban Group intends to use the full amount of the proposed maximum fee pool immediately, but rather that the fee pool be set at a level which allows for growth in nonexecutive director fees over time to reflect the Board's needs and the increasing demands and responsibilities imposed on nonexecutive directors as well as to provide strategic flexibility to enable additional Board appointments as appropriate. I'll now turn to the final item of business. Item 5 on the agenda is the approval of the grant to the incoming CEO, Michelle Jablko, of performance awards under the group's long-term incentive plan. The terms of the proposed grant are set out in the explanatory notes in the notice of meetings. If security holder approval is obtained, performance awards will be granted to Michelle Jablko as part of her FY '24 remuneration package. Each performance award entitles her to one fully-paid ordinary Transurban stapled security, subject to satisfaction of the specified performance measures. As detailed in the Notice of Meetings, the performance awards to be granted to the incoming CEO for this year will be subject to two equally weighted performance measures over a 4-year performance period. The first measure is relative total shareholder return measured against a bespoke comparator group. The second measure is free cash flow per share, per security, which reflects the Transurban Group focus on maximizing free cash to drive security holder return. Approval is being sought to grant a total number of performance awards to the incoming CEO not exceeding 204,309. In a moment, I will invite questions on all items of business. Before I do, details of the proxies received for each item of business is shown on the screen.

We encourage security holders to submit questions in advance to the meetings, and I'll now address some of the more frequently raised relevant questions before turning to questions in the room and online. If you have a question, please make your way to a microphone now. So Fiona, please read the first question.

Chair, several security holders have asked the question in advance of the meeting about the voice referendum, which is summarized in the following question. Why has the Board used shareholder funds to support social issues such as the voice?

Thanks, Fiona, and thank you for the question. I think it's particularly relevant. Just to be very clear, the Transurban Group did not provide any funding to either the no or the yes camps in the most recent referendum. The Transurban Group does support the Uluru statement of the heart, and we see this as an ongoing process in First Nation's reconciliation. And just to remind security holders that Transurban started the path towards reconciliation in 2014 with our first reconciliation action plan. But to be very clear, we did not provide any security holder funds for either the yes or the no camps in the referendum. Another question, Fiona?

Chair. We have received the following question from security holder, Dianne Scully. Why does Transurban pay its dividends so that the tax statement for the fiscal year is not made available until mid-August? It delays my tax preparation.

It's a good question. It's a question we get not infrequently. And this year, security holders were sent their tax statements on the 21st of August. But bearing in mind that the financial accounts were not finally -- finalized and released publicly until the 16th of August, and they were not -- obviously, the audit was signed off on the 16th of August. So it's quite challenging to bring forward that date any further. But we take it on Board, and we're cognizant that it's slightly inconvenient to a number of our security holders. But thanks for the question. I'll now take some questions from security holders attending the meetings. Are there any questions from security holders attending the meetings? Yes, number two.

Thank you, Chair. We've got Mike Monteso from the Australian Shareholders' Association.

Thank you.

Yes. My name is Mike Monteso, and I'm a volunteer representing the Australian Shareholders Association. Today, I hold proxies from 336 security holders accounting for approximately 2.6 million votes. I'd like to start by first acknowledging the efforts of the outgoing CEO, Scott Charlton. By any measure, the growth and performance of the company over your tenure has been outstanding. You have delivered great value to shareholders. So on behalf of retail shareholders, I would like to thank you. And we would look forward to Michelle taking on the baton. Mr. Chair, we have two questions. With Scott Charlton's departure, there is now no engineering or project management experience at all on the executive management team and reduced experience on the Board. What plans do you have to address this situation?

Thanks for the question, Mike. I think -- the first thing I'd say is we've just recently appointed as you've seen Dr. Sarah Ryan and Sarah has major projects and infrastructure-based experience. That said, we are currently in the market looking for two additional directors. We are looking for a director with deep infrastructure industry experience, and we are looking for a director, given Mr. Bowen's departure, we're looking for a director with significant expertise in accounting and finance. In terms of the executive, I might let Michelle make that comment.

Thank you very much for the question. Likewise, at the executive level, we are looking to add some engineering skills to the executive team. So we're working through that right now.

And Mike, to be clear, there is a lot of engineering and construction experience clearly within the organization, but your points are very valid and the Board and the executive acknowledge your question.