Inghams Group Aktie

Okay. Good morning, everyone, and welcome to Inghams 2026 Investor Day. I'd also like to extend a warm welcome to those joining us online. We appreciate you taking the time to be with us this morning, and particularly those in the room given the horrible weather outside. I'd also like to welcome Mike Ihlein, who is here from your Board of Directors.

On behalf of Inghams, I'd like to acknowledge the Gadigal people of the Eora Nation on whose traditional land we meet today, and pay my respects to their elders past and present.

Before Ed and the team take you through today's presentation, I would like to say a few words on behalf of the company and the Board.

Over the past several months, I've had the opportunity to speak directly with a number of you. Those conversations were very candid and very valuable. The messages were clear, that the pattern of recent years, earnings volatility, guidance that did not hold, and the gap between the goals management described and what the business had delivered had eroded confidence and the balance sheet needed to be addressed.

Management and the Board are aligned with you and your concerns, and we hope today you will find specific and credible pathways to addressing those issues. We believe Inghams is a fundamentally sound business. We are a leading integrated producer in the category with deep customer relationships and strong capabilities to deliver.

While there are external factors we need to manage, including grain prices, oil prices, consumer sentiment and customers with rightfully high expectations, these are realities we must plan for and manage effectively.

Over the past 12 months, we have made significant changes that set the foundations for our future activities, notably a substantially refreshed executive leadership team, a redesigned operating model and a sharper focus on how we create value into the future. You will hear from many of the people who are driving that change and that work today. This is a team that has been rebuilt for the task in front of us, and I encourage you to engage with them directly during the course of today's event.

Today, Ed and the team will walk you through a clear, sequenced strategy built on a 3-phase approach: stabilize, optimize and grow, which together chart the path to stronger earnings and returns for Inghams. What we hope you take from this morning is straightforward. We want you to see the evidence that the business is stabilizing as shown by the data, not just the narrative. We want you to understand the path to stronger returns and why we believe the path is within our control. And we want you to leave with a clearer view of what Inghams can deliver over time.

We recognize that it is early days, and ultimately, we will be judged on what we deliver. We fully accept this accountability. Our priority is to deliver lasting change, not quick fixes. Implementing real change for a stronger and more sustainable business takes time. We know it will require consistent improvement across several reporting periods to build a greater foundation of trust with shareholders and other stakeholders, but the outcome will be far more enduring.

There will be time for questions across 2 sessions today, and myself and Mike and the management team will be available informally throughout the morning. Once again, thank you for joining us here today and online and for your continued engagement with us.

I will now hand over to Ed.

Thanks, Helen. Good morning, and welcome, everyone. For those online and those in the room who don't know me, my name is Ed Alexander.

I joined Inghams 11 years ago. And the reason I joined Inghams wasn't necessarily to join a poultry company, but rather it was to join or be part of the private equity backed turnaround at the time, we're obviously owned by TPG. And the purpose of my intention at that point in time was to leave the business at the point in time at which TPG ultimately sold whether privately or publicly the business.

But I came to really enjoy what it is that Inghams has to offer. Inghams offers a very real product that delivers very real value to very real Australians and Kiwis right across Australia and New Zealand. And for that reason, I subsequently stayed on for the next 11 years. And obviously, the last 3 roles as Group Strategy Officer, Chief Executive of the New Zealand Business and then very humbled to take on the role of CEO and Managing Director at the beginning of this financial year.

So that's me. I'm genuinely excited to be here today and to be provided with the opportunity to present to you, our shareholders, a view of how I think about the business as well as a view as it relates to the opportunities that are ultimately available to us.

I know many of you -- actually a few of you have ultimately skipped straight forward to the trading update, so I might hit that on the head from the get-go. We're reaffirming guidance of between $180 million and $200 million pre-AASB 16 EBITDA. And I'm incredibly pleased with the way in which the business is responding to the crisis brought about by the Middle East. The impact is certainly material. What we call out in our guidance is a net impact of between $7 million and $10 million brought about mainly through increases to cost of fuel. And certainly, we're seeing increases to packaging starting to flow through. And whilst we are covered on feed through the end of FY '26 and into FY '27, as I'm sure you'd be aware, there's no doubt that will impact us throughout the course of financial year '27.

At the same time, I'm incredibly encouraged by the response of the business. We're operating according to 3 pretty clear principles, the first being that we neither win nor lose through way of price increase. The second being that we ensure adequate labor to run our operations efficiently. I think it's fair to say we've learned through the experience of COVID that labor and having adequate labor to run efficiently is key to this business creating value. And finally, that we never wasted prices. I know there was significant disappointment as it related to our downgrade at the half. And so we're using this as an opportunity to significantly address our distribution costs, how do we increase minimum order quantities, how do we redirect transport, how do we optimize routes and ultimately reduce the number of transport miles that our product is going to deliver to tens of millions of Aussies and Kiwis.

And specifically, I suppose the big levers are being pulled with discipline. We're seeing pricing pass through. We're seeing transport costs net of fuel increases reduced. And we're seeing SKU rationalization improve production efficiency. It's a good example, I think, of an organization which show time and time again that it's resilient and it's also able to focus and execute when asked to do so.

Outside of the impacts of the Middle East, I'm very pleased to also report that we're growing across both segments. If you look at the release, we're talking an Australian business that's now growing 1.2% in the 9 months through to the end of March. We're also talking about New Zealand business is growing 0.5% for a Group total of 1.1%. And I think given the impact of the Woolworths, given that we're lapping in the first quarter full supply in Woolworths, I think that's extraordinary. And I think it goes to show that this business absolutely knows how to grow and can compete effectively within the market.

Demand for chicken remains strong, notably brought around by, obviously, cost of living crisis increasingly starting to bear its head again. And ultimately, if we're seeing strong demand through retail, that usually results in relatively buoyant trading through wholesale. And so we're seeing a wholesale channel whose economics have remained relatively robust.

Now with that out of the day, I'm more than happy to take questions as part of the Q&A, as Helen rightly mentioned upfront. Today is really about talking about our future, certainly the next sort of couple of years. The last 24 months have certainly been difficult for the business as a result of the changes to the Woolworths contract. But we've reflected, I think it's fair to say we've learned, we've changed [indiscernible] a lot, and we're now starting to see positive results flow through.

To go to the essential question that we are trying to answer today is that: How does Inghams become a structurally stronger business that consistently delivers higher earnings and higher returns? My view is pretty clear, and that is that Inghams is not a broken business. It's a high-quality business that has not consistently captured the true value that's available to it.

What you'll hear from myself and the team is a strategy that deliberately seeks to address this question, and it is deliberately sequenced. As Helen referenced, we stabilize the business first, we optimize the asset second, and then we grow value from a much stronger foundation.

You will see all of that reflected in today's agenda, which we've kept relatively simple and pretty pragmatic. In effect, Clair is going to talk about how we're planning on winning with customers. Susy will talk about cost and the significant value upside that comes from a new approach to operational excellence. Adrian is going to talk about planning, the critical part of the business, the [indiscernible] thing that ensures that the left hand is talking to the right.

Matt is going to talk about New Zealand and the continued journey towards $100 million pre-royalty, pre-AASB 16 EBITDA. Caroline is going to talk about growth. We obviously introduced a new growth function this year specifically with a view of how do we ultimately start to extract new value from our business, both the core and beyond it. And then Andrew is going to talk about our technology strategy.

I'm sure many of you would know that 3 years ago, we went down the path of an ERP program. What we're trying -- what we will be presenting today is an alternative path, which I think is far less risky and creates the opportunity for far more value as well.

And then I'm going to talk about capital allocation and finish off with some thoughts. Across the way, we have plenty of time for questions and answers. You'll see that we've also got 25 minutes or so set aside for morning tea, and we should make sure we're all out here by 12:30.

As I said upfront, I spent 3 years in New Zealand. And one of the things that I always admired about the All Blacks and probably less admired about the wallabies was the ability of the All Blacks to play based on the context in front of them. And I think what they do incredibly well is when they need to, they play [ it tight and they earn the right ] to spin it outside. And then at the crux of it or that concept sits at the heart of this sequencing. We ultimately earned the right to play it out wide.

FY '26 has been turbulent. So our focus for the last 12 months has been on stabilization. That means bringing stability to the executive team. It means balancing supply demand, means balancing our product portfolio. It means reducing inventory. It means returning to normal operating settings. And it ultimately means a return to growth.

The second phase is being on optimization. And this is where margins start to expand. So we'll be talking about our plan to improve mix. We'll be talking about how we're going about reducing our cost to serve. We'll be talking about the role of stronger planning to deliver that. And we'll be talking about extracting more value from our existing assets and our network.

And then on the growth. Growth for us is not about undifferentiated incremental value. Growth for us is about expanding into areas where Inghams has a genuine right to win. It's where consumer insights ultimately suggest points to significant opportunity. It's where those opportunities are scalable. And it's where ideally we control the raw material input.

So I've said on many calls up until this point in time that it's a frustration to mine, the number of businesses who ultimately rely entirely on our supply chain for their mere existence and who get a better return on capital than we do. And at some point in time, I think that Inghams rightly deserves to be playing in those areas of the market.

You have seen this [indiscernible] slide presented many times before through the strategy update and as part of our full year results. Poultry is an incredibly attractive and resilient category. Demand continues to grow. It's the most affordable animal protein, and we're seeing that expanding further as a result of red meat taking off due to supply shortages over in the U.S. It's versatile, it's healthy and it offered high protein before high protein became a significant trend.

As a result, consumption is incredible. Right now within the Australian market, we're seeing consumption per capita sitting roughly 55 kilos per capita and then slightly shy of 50 kilos per capita over in New Zealand.

We're also fundamentally a domestic business. And I think that at a point in time when across the globe there's significant volatility and uncertainty, that offers value in and of itself.

And then Inghams obviously holds this enviable position within the attractive market, within a category that -- and we have clear strategic advantages. We're firstly the only operator across Australia and New Zealand, and Matt and [ Caz ] will talk about how we intend to create more value through that reality.

We've got an integrated national network. I think if you think about what's happening in the market at the moment across poultry, you're seeing consolidation driving unit cost reduction. We think that there's a better and alternative play to that. It's about how we leverage a national footprint to provide the best, most local, freshest supply into the market, which also provides product and mix optionality.

We have deep customer relationships. Clair will point to it shortly. But the [ worlds ] are certainly not everything. Over the last 6 months, we have won Supplier of the Year into Woolworths Fresh. Last week, we were appointed Supplier of the Year, both fresh and frozen into Metcash, and we're a finalist with Coles. I think [indiscernible] you quite rightly pointed out was a courtesy appointment for a moment. I don't think that's the case.

I think I can point to one clear correlation and that's that when you get a prize, it's likely that you're projecting some level of downside as it relates to the business. I'm very proud of the way that the team has turned us into a very customer-centric culture and the prizes somewhat reflected that.

I think we've got an incredibly trusted household name. You talk to any Aussie or Kiwi across Australia and New Zealand, they all know who Inghams is and what we stand for.

And my point is simply that the question is not whether or not demand exists. The question is not whether or not we have competitive advantage. The question is how can Inghams leverage inherent strength to create and extract as much value as possible from the available demand.

So performance, of course, is not -- that all makes sense. It's not as simple as that. And despite all this good stuff, we should be very honest about performance and where, ever since listing, it's fair to say we've fallen short. And that is the returns on capital have declined, earnings have been inconsistent. And understandably, that has impacted investor confidence. These trends are through to the end of financial year '25, and obviously, they continue to deteriorate as we look at financial year '26.

This is not an easy business to operate, and there are very real and valid reasons for the trends that you see. The complexity and external factors cannot become an excuse for how we think about the performance of this business. If these trends tell us anything, it's that we need to bring more clarity over time as to what drives positive returns. They tell us that we need to bring more levers, as Helen alluded to, within our control. And then finally, we need to improve our approach to capital allocation.

Now the opportunity and starting hypothesis is that over many years, the issue has not necessarily been strategy, but rather on execution. And as I reflect on it, around why is it that we, as a business, have ultimately struggled to execute, I probably landed on 3 things.

The first is the sheer nature of the business. On any given week across Australia and New Zealand, we're tasked with processing almost 5 million birds. We're tasked with doing it with 8,203 employees. And we're tasked with achieving customer service levels north of 98%. That in itself creates complexity. When you then throw in that we didn't go down the ERP path 3 years ago, and therefore, we are very reliant on humans as a basis to how we run that system, it creates even further complexity.

The second is that ever since listing, I think there's been significant events that have disrupted this business. And I'll go back to my first principle, the way in which this business creates value is through stability. Things such as COVID, things such as bird shortages, or as [indiscernible] used to officially call it, the [ lazy roosters ], things such as the loss of the Woolworths contract significantly destabilized this business. And as a result, because of the complexity and because of these destabilizing events, all the gravitational pull of the business comes back to today, and you can't then focus on what you're going to do differently tomorrow.

And then finally, I'd say that there's the element of structure as well. So once I get to how I think about our operating model and how I think about how we've segmented the team, it's very clear that we're trying to pick between those who are running the business and those who are ultimately improving the business. And I think over time, that will be the key to how we think about change over the medium and long term.

So as a result of these things, we've been focused on the short term and responding to prices. And we've struggled to really execute and to change how we do things. And of course, that's probably not sufficient in a world and a market that has changed more than ever. The business has become definitely more complex, the way of customer diversification. Customer expectations have increased significantly, certainly across the last 11 years that I've been here. And the market has fundamentally become more competitive, with obviously the call-out being Baiada and the new Tamworth facility that's going to be coming online within a matter of months.

And the resulting symptoms then, which is what's shown in front of you, are very clear to see. And that is operational inconsistency, it's increased capital deployed for lower returns, and it's competitors who ultimately moved ahead with the obvious reference point being Baiada and the Tamworth facility.

And to talk about execution, I'm going to talk about a strategy that's fundamentally different to what else is being executed within the market. We're not going to be pursuing a commodity scale at all cost model. To do so would be an absolute race to the bottom within the Australian market. We're building a structurally more resilient and higher-quality earnings model.

That means we, firstly, we're planning to grow at market. We're not planning to take material share nor are we planning to lose it. Secondly, we're going to focus on value per bird. And that's not just lifting price. Value per bird the whole way across the supply chain. How do we think about extracting more yield? How do we think about reducing wastage? How do we think about ensuring the right product, right place, right time? How do we think about mix? How do we think about revenue price management? How do we think about the role of innovation to extract further value? And how do we think about things that have historically been seen as display [ streams ] in ingredients and ultimately move them up the value curve?

We're going to compete not just through price war, but through customer partnerships as well as category leadership. It's fair to say that our consumer insights and category function are a big reason for the awards that I referenced earlier.

And finally, we're going to be directing more capital towards capabilities that don't just take costs out of the business, but ultimately drive better revenue-generating capability. One of my favorite things that Peter and the team is, over a very long period of time, you see that 70% of return on capital comes from revenue-generating investments. And over time, the intention is that we need to direct more of our available envelope towards those areas.

And so this is the kind of strategy [indiscernible] started that we end up landing upon. And everything that's on here is what the team will be talking to today. Everything ultimately, as I said, comes back to this idea of maximizing the value per bird to drive sustainable earnings and growth. It's about reducing waste, improving yield, improving mix, optimizing the network, unlocking value through perceived waste streams, driving innovation and improving planning discipline.

The strategy then is also very sequenced. We need to stabilize the business first, which we've largely done in the last 10 months during our [indiscernible] journey. We then need to optimize the network. And then finally, we need to grow new value.

And then we have 3 pillars that ultimately underpin the delivery of this ambition. Winning with customers improves mix and improves revenue quality. Unlocking trapped value improves margin, improves cash generation. And then that creates the capacity to invest in new spaces and invest in future growth opportunities.

Supporting all of these are 4 critical and enabling capabilities. Firstly, our network. As I said, I think it is a [ latent ] advantage at the moment, but it's something that we intend on taking advantage of. Secondly is planning, which I'll come back to in a second. Third is digital, that Andrew will talk to. And finally, our people.

And increasingly, we've come to believe that planning in particular is not just the support function. Planning is the operating system of the business. It connects the farms with processing. It connects processing with good customer service, good customer service with inventory, with logistics and working capital. It's the spine of the system and needs to make sure that the left hand is talking to the right.

And so we're executing the strategy, again, as Helen alluded to upfront, we've significantly reshaped the leadership team as well as the operating model of the organization. This has been a genuine reset. We've reduced layers, we've focused accountabilities and we've built a team that I believe has a pretty strong bias towards execution. I'm incredibly excited by what this team brings and what they're capable of delivering. And you'll hear from many of them today, and I'd ask that they briefly introduce themselves as they step up on the stage.

In terms of [indiscernible] what we're hearing from Amanda Green, joined us 3 weeks ago as Chief People Officer. Amanda comes from Reece having spent 3 years there. Prior to that, she held multiple roles across various industries and businesses, notably PwC, [ NAV ] and Australia Post. Perhaps most importantly, she was GM of People, Culture and performance at the Richmond Football Club through the years where culture transformed and, ultimately, Richmond as well as Dusty Martin were completely unstoppable.

Secondly, I just want to introduce David West. I did introduce Dave at our AGM this year. Dave has been with Inghams for the last 8 years. He previously worked at [ Simplot ] and he's responsible for our [indiscernible] processing turkey and value-add operations.

And then we're well progressed with the recruitment of a new group executive, Supply Chain Excellence. And this person is going to be looking after planning, warehousing and distribution, continuous improvement and engineering. And when I talked about we need to delineate between people who work on the business and work in the business, this is the person who needs to be doing that. It's fundamentally about optimizing the business and thinking about how we extract more value from our existing assets.

And then finally, I do want to acknowledge Gary Mallett, who has decided to step down as of the end of September this year after 7 years with the company. Gary has built some great foundations for us to build on, and he's been enormously helpful with my transition on [indiscernible]. As we announced last week, I'm also super excited for Grant Douglas to be joining sometime in mid-October of this calendar year. Grant comes with good ASX experience from Brickworks.

Now whilst FY '26 has been a difficult year and, quite frankly, continues to throw [indiscernible] we're increasingly encouraged by the results that we're seeing. Underlying earnings momentum is improving. I think if nothing, I think you look at that graph, underlying EBITDA pre-AASB 16 for Australia, you can see the rate of improvement that we're talking about. It's why notwithstanding obviously the December, January period, why I have confidence in us being able to deliver the full year number and then ultimately felt the need to downgrade. But you can see that rate of improvement.

I can say to the team, this is a momentum business. If you got momentum going in your favor, you can expect that it's going to continue for a period longer. If you don't have momentum going in your favor, then it's going to take a while to turn around.

Operational performance is improving, and the team will reference many data points today for you to take on with you. Inventory is reduced by $25 million from the beginning of this financial year, and then new business wins have been secured. As I said, outside of Woolworths, we're growing across every single channel in quite a significant way. And I think the prices are reflective, whilst not everything of where we stand as a business, relative to customer partnership as well as relative to customer centricity.

Importantly, these are not theoretical improvements. They are tangible signs that the business is stabilizing and that the strategy is beginning to work. We believe that Inghams can become a materially stronger business with better earnings, better returns and better resilience, without needing to become a fundamentally different company. And we should give confidence that there is materially more value still to be unlocked from here.

So in terms of the key messages that I want to take away from this opening, the first is that this is an incredible category. We're an incredible category and we're an incredible business that operates within that category. Secondly is that past returns do not reflect the quality of this business. Thirdly is that execution is the opportunity. Fourth, that we're going to -- what we'll be presenting today is a strategy that fundamentally focus on how we extract more value per bird. And finally, that this is a sequenced strategy and near-term stabilization ultimately [indiscernible] the foundations on which we can achieve future growth.

And without further ado, I'd like to invite our Chief Customer Officer, Clair Stevenson, to the stage to talk about our approach to winning with customers. Thanks, Clair.

Thank you, Ed. Well, way of introduction, although Ed has just done that for me, I'm Clair and I lead our customer team here at Inghams. I've been with Inghams now for 3.5 years. And over the last 9 months, I've stepped into this role. My experience is largely retail, customer, FMCG for the last 20 years. And I'm really looking forward to bringing some of that into my new role.

Now over the last 12 months, we have continued to diversify our customer base. And there's been some great progress made. So Ed has alluded to other retail growth, but I'm pleased to share that our other retail growth is actually at 18% versus last year, which is great considering we were also growing the year prior. And we've also had other wins across our QSR customers.

Now whilst price has formed part of that conversation, it's just one part of many criteria that our customers look at when they're choosing who they partner with. So over the next 15 minutes or so, I'm going to share with you how do we win with our customers, how does that translate to value for Inghams. And then I'm going to bring some real-life examples so you can see through data how that's going to help us grow.

So let's start with how we win with our customers. Now through this process of diversifying our customer base, we've got really close to our customers, and we've listened to them. And they've been really clear with us what it takes for us to earn their trust and keep their business. And price is just one element of that. So I'm going to share with you the 3 pillars that we know makes a difference to our customers, and we know creates value for not only Inghams the consumer but also the customer. And it's incredibly important that we get this value occasion right because we need to grow value not just for Inghams, but for our customers.

So let's talk about this first pillar, which is this idea of freshest. And I want to share with you why that's important to a customer. For any of you who have ever walked into a retailer or certainly a QSR, if you're shopping for fresh, you need that to be fresh. And you're probably hunting around for the best shelf life on the shelf. This matters not just for the consumer, but it matters for our retailer. If you don't get freshness right, it creates incredible waste in the supply chain. And that waste erodes value for not only the retailer, the consumer and, of course, us.

Now we have a privileged network which enables us to be close to the customers' DCs, and it enables us to give our customers the freshest product. And that's what we'll be focused on when we think about partnering with our retailers and our QSR partners. They've told us this matters.

Equally, our customers, and you would have seen this, whether that's on a QSR menu or if you walk through a retailer, poultry is becoming the center of their strategy. Every retailer is looking at how do we win with fresh and how does poultry play up in that space. Every QSR is looking at how does poultry form a bigger part of their menu. And they need to have partners that can support them on delivering that product at its freshest.

Secondly, this idea of most trusted. You need to be able to supply that product on time in full. If there's a QSR out there that only has poultry on the menu and it doesn't receive poultry, it loses value. So it's only going to be partnering with people that can support them in making sure that the supply is there on time in full.

And to do that, we need to make sure that our planning is right, and you'll hear more from that from Adrian later on. A key enabler for us being the most trusted is about making sure that we deliver on time. It's also about ease of business. It's also about making sure we do what we say we're going to do.

And lastly, this idea of differentiation. Each retailer, each QSR partner, each food service customer, they're all competing with their own competition. They need products on shelf or on the menu that are different to their competitors. So whilst freshness and supply will be part of that, offering propositions that are different to our competitors is what's going to set us apart. And Caroline will share more about that later. The key here is that category partnerships are what creates more value in the relationship.

And the number one thing I want you to take away from this slide is that our goal here is to shift from supplier to growth partner, and we are already making progress on that, and I'll share some data points with you in a moment.

Now none of this can be done without great execution, and that's execution on our consumer insights, that's execution on our commercial excellence, which I'll share with you in a moment. We have to be disciplined in how we go to market with these customers. And then lastly, our planning discipline. That's where we create the most value.

So let me bring to life with you some of the value we think we can create by getting this right. We've reviewed our channels, our customers and our products. And we've identified where is the most value for us, which channels can we partner with where we create value as well as get value for us and our customers. And equally, within that channel, who are the customers that we can partner with? Who can we leverage our network to give them what they need and ensure that we're elevating the conversation beyond price into a category partnership?

And lastly, within those customers, what's the right product mix and portfolio that's going to drive the best outcome for everybody? The key here, it has to create value for everyone in that equation to ensure it's sustainable.

We've identified a $30 million opportunity by getting that mix right. And that's reviewing our trade spend. It's making sure we're putting promotions on the right products that get consumers to trade up into product formats that create more value. It's about making sure we're focused on channels that create more value and moving material into those channels. And I'm going to give you a live example of one product that's created a significant incremental net sales.

And lastly, we must embed pricing discipline as we do this. So we've got a great stabilized customer base. We now need to optimize the value that comes from those customers. And then we can move into the growth phase, which Caroline will share more on how we differentiate.

So let me bring this to life for you with a couple of data points. Now unashamedly, I will always start with what the customers told us. And I'm not going to talk about awards, I'm going to talk about what they've told us in [ the basin ].

Many of you will be aware there's an Advantage survey, which is an industry survey that's done annually. And 3 years ago, we were in the bottom quartile. Our customers are telling us, "You are not hearing us, you're not delivering to our needs." Pleasingly, I can stand here today and say that we're in the top quartile when it comes to protein, and we're actually rated #1 when it comes to the poultry supplier of choice. That's an incredibly important lead indicator for us that we must keep an eye on, and that forms and stabilizes our relationships.

So we've introduced a Voice of Customer program that we'll be running every quarter to ensure that we're delivering and doing what we said we would.

And even more pleasingly, I've told you how important category is so that we can drive the category. Our customers have told us that Inghams are the #1 choice when it comes to category partnership.

So let's talk about some numbers. So when we talk about optimizing that stable customer base, I want to share with you 2 things. One, we've actually just launched our Commercial Excellence function that's now up and running. It's been going now for about 6 to 9 months. And that function is there to centralize how do we go to market, how do we make sure we don't leak value. How do we create value? By moving material into the highest value channels, customers and products.

And we've already started that journey. The $30 million is where we see the opportunity, but I'm really pleased to say that with one product, and I want to take you through this example, it was in a lower value channel. We partnered with a key channel and a customer within that space to move that material into a value-added product. And that was an incremental $3 million net sales on that one SKU. There is so much opportunity if we can optimize and execute brilliantly.

And then just to show you how we're going to continue to grow, I just wanted to bring to life for you how much headroom there is in this category. What you can see there on the right-hand side is as we trade up the value chain, what consumers are looking for, they're all growing faster than category. And we start with tray pack packaged breast, which is growing at 10%. That's also the highest value versus some of those more commodity, lower-value channels.

But then there's a significant 47% premium if we move into a free-range breast fillet. And then equally, if you combine that with a value-add, there's a 74% premium just by getting consumers to trade up into value-add. Now this requires mix, trade planning, discipline, but it also requires great category insight to show the retailers how can they range these products, how can they go to market and how do we maximize value when we're working on those categories. And Caroline will share more later how we're going to innovate in the space even further.

So a couple of key message I'd like to leave you with. One, that we are shifting and we've already started this journey from volume-led to value-led growth. And I want to be clear, we will still care about volume, but we'll care far more about mix and price.

Category partnerships absolutely unlock superior economics. They ensure that we've got a stable base and ensure that we can partner to create value together. We have a network that enables us to deliver to a differentiated customer proposition. We have a unique network that enables us to do that at a national scale.

Commercial discipline is improving earnings already, but that will continue to be something that helps us grow. And lastly, innovation and formats will expand the value for bird simply by ensuring that we move the consumer up the value curve.

Now I'll hand over in a moment to Susy and Adrian, who will share with you how do we pull more value from our operations. It's not just with the customer. And equally, how do we make sure that we embed our planning. To win with our customers, we don't have to be the cheapest. But we do need to create value. And to win, we must be the partner of choice. And our customers are telling us that we are. Thank you.

Thanks, Clair. Good morning, everybody. My name is Susy Klein, and I'm heading up our Agribusiness and Primary Processing and Ingredients operations. I've been with the business for 30 years, about 20 years in the technical services space looking after food safety and quality, animal health and productivity and R&D, and the last 10 years in our operations space across primary, bird processing and also in our agribusiness space again.

What we've just learned from Clair this morning is how we're changing the way we win with customers to unlock more value out of every bird that we process within our organization. What I would like to take you through now is what will happen within the 4 walls of operations. And the message is quite clear. There's more value in this business than we are currently capturing.

Over the last 3 years, we know that our business has changed rapidly. The unlock trapped value strategy is grounded in realigning our operational execution to that change in our business and our new business model, extracting full value from the network, assets and footprint that we already have in place.

In operations, inconsistent execution across the network has been suppressing the value of our business. Removing that variation through executional stability, standardized site performance and realization of our capital investments present significant levers to create value within our organization. It's important to note that this is an evolution of a base-up continuous improvement program by combining site-led improvement with operational execution and a systemized enterprise-wide operating model.

Additionally, scaling our capabilities to utilize the whole bird through harvesting of high-value ingredients and optimizing assets such as our turkey operations are other levers that we will pull to extract value from the business.

The economic logic is quite straightforward. Unlocking trust value is under our control, and it doesn't rely on external tailwinds. The identified opportunities present a pathway to deliver an EBITDA uplift of $100 million over the next 3 years. What does unlocking trapped value look in practice?

Primary processing yield is a clear example of this, demonstrating a steady return to baseline throughout H1 FY '26 and a sharp uptick throughout H2 FY '26. As we identify best practice, we stabilize our operations across the network, and we maintain disciplined execution. This is delivering a $10 million annualized benefit to our bottom line.

Similarly, implementation of a standardized labor tool, in particular, in its first iteration for management of overtime has created the right visibility and accountability at site level, removing barriers before it becomes cost. This is a different operating rhythm, and it's already delivering marked savings.

Transport efficiency is another good example of how we are realigning the operating model to the new business model. When we actually map our network flows, we look at what we're producing, we look at where it needs to go. We identified that there are significant cost to serve inefficiencies that have become embedded in our business, particularly over the last couple of years. In addressing these inefficiencies and using tools such as AI-enabled route planning, we can unlock those inefficiencies, and you can see the savings are immediate and they are growing.

Across transport, labor, network efficiency, packaging and waste, the pipeline of savings continues to grow. But the important thing is that these examples validate that the approach we're taking is systematic, it's effective, and we're pulling multiple levers at the same time. It's gaining momentum to deliver a $20 million value to the bottom line.

Capital. We've deployed significant capital across the business in the last 2 years. Some examples are here: an automated cutoff line and single-line processing flow at Osborne Park, which we're calling Osborne Park One Touch. We have a new fully-cooked processing capability at [ Lizzaro ], which is unlocking $4.6 million per annum in benefits, and more importantly, further strengthening our partnerships with key retail and QSR customers. We automated tray packing in South Australia and Queensland, delivering significant efficiency and labor improvements. These assets will be fully operational by the end of FY '26. The opportunity now is to realize their full potential.

The work that I've already talked about that's already underway in scheduling, labor planning, for example, this builds a robust operating model around which we can unlock the benefits of these automation opportunities. They are best-in-class assets. They have long-term strategic importance to the business. And very importantly, they are clearly aligned to our customer partnerships. The opportunity now is to fully monetize them. This is a low-risk, low capital, fast-payback path to earnings improvement, and it is entirely within our control.

And finally, ingredients. Ingredient harvesting is a direct expression of the value for bird strategy. So we're extracting more material from exactly the same bird without requiring incremental increases in volume or more capital spend.

There's 2 connected levers here. The first is harvesting more usable material from the existing bird. The second is redirecting that material, which has historically flowed into lower-value markets, into higher-value customer channels. Project [ Pluto ] is proof of this approach, delivering a $5 million incremental EBITDA impact against an $8.5 million investment within the first year.

Investment in plant freezing capability allows us to develop strategic partnerships with pet food manufacturers, demonstrating that we have an effective model in place and then allowing us to upscale. The growth in harvesting volume, as you can see on the slide, up 15% year-on-year, underpins this opportunity, and it's the starting point for the growth platform.

As primary processing continues to improve, volume flowing into the ingredients platform grows and earning upside scales accordingly with that. This is exactly the kind of mix shift that we're talking about that will improve the quality of our earnings as we move into higher-value markets from lower-value commodity channels.

In closing this section, the message I would like you to take away is very straightforward. The value was always there. What has changed is that our business moved quickly and our operational model needs to catch up. And in that process, our inherent value became trapped. In identifying that gap, putting the right focus across it and discipline of execution, you can see that early results demonstrate that the opportunity is real, the approach is working and that momentum continues to build.

Stable, disciplined execution is how we rebuild our earnings quality, improve returns on capital already invested and create the platform for what comes next.

Over to Adrian, who will take you through how planning sits at the center of all of this.

Good morning. I'm Adrian Wilson. My title is Group Executive, Enterprise Alignment and Corporate Affairs. My job is creating and embedding the performance systems inside the business that ultimately determine how we run the business more effectively, how we grow, and making sure that our stakeholders outside the business, our 8,203 people inside the business, understand where we go and what our strategy is and how to align to it.

I'll talk to you this morning about planning, which you've heard already referenced a number of times. And we're referencing it because it is one of the most significant and controllable value levers that we have inside the business.

I just want to touch on what we mean by planning. So Ed's described, I think, the challenge of a short shelf life perishable supply chain that we operate with. So every week, across Australia and New Zealand, we process almost 5 million birds. The birds come in different shapes and sizes. The birds were set against a variable demand signal that we determined about 13 weeks prior. We take these birds, we turn them into over 1,000 SKUs. And once processed, they have about 12 to 18 days of shelf life.

They must get to customers with a minimum of 8 to 9 days of shelf life with 98% customer service level. Essentially, 98% of orders received are fulfilled within these terms. That's the challenge of operating this business.

To coordinate this, as Ed indicated, we have established planning processes and analytical tools to help us do this. But the system is still too dependent on expert judgment and manual coordination. Ultimately, we end up with too much focus concentrated on short-term execution and often optimization against a narrow set of objectives. Nothing that looks like we want to make sure the birds are balanced. We want to make sure the plants are utilized. But while this supports localized performance, it sometimes creates system costs and missed opportunities that aren't always fully accounted for.

These impacts were amplified in the after-effects of the Woolworths supply change. As you heard from Clair, we've made really significant progress diversifying our customer base. The changes to the product mix we serve, the geographical distribution of our demand, they drove complexity. We have more orders, more SKUs, more deliveries, and our planning processes were not well equipped to optimize these.

In this context, and in a nutshell, the opportunity we're pursuing is to build a stronger planning capability that acts as an effective control power for the business with a longer horizon of focus and a greater ability to integrate and optimize all the variables that sit across the full supply chain. This means joining up decisions across demand, supply, cut balance, inventory, network flow and utilization that you just heard about from Susy, freight, customer service, all of which ultimately flow into our cost position, our revenue position and our service results.

In doing so, you've heard Ed used the language this morning that planning has to be the spine of our business. So this ambition is complementary to all the things that you've heard about this morning from the team. Elevating planning in this way will support the operational stability that Susy has just described that is what lets us unlock trapped value from the network. It's critical to creating the consistency of delivery that Clair has talked about to deliver customer trust. And it's essential to help us realize the full value of the bird and leverage the full utility of the distributed network that Ed talked about as well.

We believe that getting it right will unlock $30 million of direct EBITDA upside, and I'll take you through the basis of that in a second as well as support working capital release. The plan is to unlock this progressively over the next 3 years. To do it, there's three parts. Everybody a chance to catch up on the slide. Three parts to do it. So the first thing we've got to do is extend our horizon of focus. So I talked before and it's talked as well about a lot of our attention gets absorbed in the executional window. And by that, we mean kind of the 2 weeks before we end up with the birds and have to turn them into something.

What we need is to push our focus to what we call the tactical time frame, that the 13 weeks -- the 2 to 13 weeks time in which we're putting into production and beyond that, 13 weeks out to 18 months, which is the time where we can really do the kind of ultimately -- and process improvement. The second part is creating greater visibility of the key variables that we have in the business further out so that we've got more opportunity to optimize supply chain performance.

This means bringing together more joined up and granular data so that we can model constraints, test scenarios, identify and make more informed -- part over time is improving the speed and accuracy and the quality of decisions. And that is something that technology and systems improvement can help us with, and you're going to hear more from this morning about how our forward-looking technology platform will help to enable this.

So as you can see on the screen, a number of changes we've made are already in place that support this program. We've reorganized the planning organization around a horizon-based operating model. We've elevated executive focus through the creation of the group executive supply chain role. And we're in the process of developing a machine learning-based demand planning solution. It sits at the heart of a refreshed demand planning process. It's an example of the modular way we can deploy these improvements over time. We've also made improvements in the way our technical planning levers are deployed, and you can see the results of that in the first half improvement in frozen inventory that it's also talked about this morning.

So by delivering this program, we believe there's approximately $30 million of EBITDA available that can be progressively unlocked over the next 3 years. This happens in four ways. Firstly, better mix and margin realization, particularly through level optimization of what we turn those birds into and how we put them in the marketplace. It's completely complementary to the commercial excellence and revenue management upside that Clair has talked to. The second is lower waste, making sure that we're matching demand, supply and inventory to reduce the amount of product we have to clear or discount. The third is working capital, reducing excess inventory and making sure stock held in the right place across the network. And the fourth is lowering our network cost, reducing avoidable freight handling and storage and rebalancing activity across the network.

So to sum that up, planning is one of the biggest controllable value levers we have in the business. Our intent is to make planning the spine of the business, looking across a longer horizon with better visibility so that we can optimize for and control critical business outcomes. The improvement to unlock this is underway and the price currently is $30 million of EBITDA over the next 3 years.

To conclude on our outlook for unlocking trapped value. The key messages to take away from this is our belief that the fastest path to earnings recovery is already embedded in the business. We've sized $130 million of EBITDA improvement phased from these operational improvement activities. But in the course of bringing those to life, planning will become the spine of the business that there is significant overlook value in value streams like ingredients and bioproducts. And critical to what Susy and I have demonstrated, momentum is building inside the year behind us. You're seeing those results flow through.

So with that, I'll hand over to Matt Easton from our Chief Executive of New Zealand.

Thanks, Adrian and Susy. Good morning, everyone. I'm Matt Easton, Chief of our New Zealand business. I've been with Inghams for almost 11 years, the first half of that in Australia and the second half back in New Zealand prior to this role as General Manager of Operations in New Zealand. As many of you who have followed Inghams would already know, New Zealand is a strategic market for the group.

Today, I'll share why that's the case, what our key priorities are, how we're progressing and what to expect from the New Zealand business as we move forward. In New Zealand, Inghams provides over 8 million servings of chicken each week through our diversified customer base, which spans all major channels. Retail is our largest channel, where we have long-running supplier relationships with each of the major banners across Quitchery, deli and frozen departments. We've been ranked #2 -- sorry, #1 poultry supplier in New Zealand for the last 2 years.

We also enjoy higher share into Tier 1 QSRs, which is enabled by our strengths in quality, product development and higher animal welfare. Across our fantastic set of brands, Ingham's SPCA Barn raised, [ Waitoa ] Carbon Zero Free Range and Bostock Brothers Organic Chicken, we have distinct propositions and products, leading volume and margin growth for the category. These brands give us pricing power, generating around 50% higher margins than equivalent non-branded product. The market we operate in is favorable and balanced. There are four processes and Inghams is one of only two that are completely vertically integrated. By that, I mean with feed mill, Fielder Farms and hatchery providing the upstream farming needs to the rest of our operation. And Inghams is number two by market share with approximately 1/3 of the -- we have the largest processing site in the country, affording us significant operational advantages that gives us economies of scale.

And importantly, half of New Zealand's population live within 3 hours of our primary processing site. Our scale and location give us a structural cost advantage that compounds over time and one we'll continue to expand, and I'll touch a bit more on that. Two important acquisitions over the last 2.5 years have fundamentally strengthened the market position we enjoy in New Zealand. Through the 2023 acquisition of Bromley Park Farms and [ Hatcheries ], we became self-sufficient in our day chip supply. The acquisition also increased the resiliency of our network by adding a second hatchery and additional breeder farms.

Pleasingly, after implementing the Inghams farming system here, our key performance metric of chicks per has increased by 30%. This shows the value of our global best practice farming system and the capabilities of our farming team. The 2024 acquisition of Bostock Brothers, New Zealand's only organic chicken brand, extended our branded portfolio, bringing with it thousands of loyal consumers, both domestically and internationally to connect with the brand and align with what it stands for.

This acquisition also improved our operational resilience by adding a second primary processing site to our network. Both acquisitions are delivering in line with our investment case. One final differentiator for our New Zealand business is our position within the [indiscernible] Group. We're the only company operating across both Australia and New Zealand and recent changes to our operating model are helping us take advantage of this to generate additional value for our customers. So we have a strong valuable position in New Zealand. The market is favorable. We have the largest site giving us cost advantage. We also have the best portfolio of brands, which give us pricing power, and this gives us conviction in future opportunities.

Our strategic priorities for New Zealand align with the same three pillars that you're hearing about today across the group, albeit applied to the New Zealand content, unlocking [ trip ] value. Opportunities exist to unlock further value within our network. As I said, we have the largest processing and at that site, we have a 5-year automation program to extend those cost advantages further. The road map was significantly informed by a European study tour in 2023, and that gives us a clear perspective of where we can take the [ Taharoa ] plant and the moves we need to make to get there.

Processing yields, which is harvesting more of the meat already grown into higher value streams and labor, our second largest cost after feed are the most significant and directly controllable levers at our disposal. The same execution discipline, which Susy spoke to earlier, applies in New Zealand, too, and we're implementing with the same rigor. I'll shortly share what we've already delivered.

We've identified key areas to improve how we move products throughout our network and deliver to our customers. These include removing nonvalue-added steps between us and the customer, improving and improving our customers' visibility of product movements. This will improve our ease of doing business for our customers and our customer relationships and reduce our cost to serve, winning with customers.

To create greater partnership value going forward, we're focusing on three things: category leadership, bringing the richest and most valuable actionable insights from Australia and New Zealand. Recent changes to our operating model, which I touched on and the establishment of the group-wide growth function, which Caroline will speak to some of these insights generated soon. Brand. We're investing further behind the Ingham's, White Tower and Boscot Brothers brands to ensure each brand keeps earning and growing space with consumers and retailers. Continued marketing investment paired with consumer-led innovation will ensure our branded portfolio remains at the front of category and margin growth.

And customer partnerships. We're deepening our relationships with customers founded on the principle that a partnership approach will deliver more value than a transactional one. We intend to continually raise the bar with our customers and what matters most to them across reliable service levels, consistent quality, animal welfare credentials, ease of doing business or product development that helps them grow their categories.

And finally, innovating for growth. So we've expanded the [ Boscot ] farming capacity with the construction of 5 new sheds, which will drive an increase of around 20%. That will help us meet growing New Zealand demand, our growth in export markets and the launch into Central Australia. Every additional organic or free range that we grow lifts our value. There's also a sizable opportunity in ingredients and pet food. So I won't repeat the business case, which Susy has already shared. But I do want to repeat that opportunity exists in New Zealand, too, and there's also an opportunity to tap into New Zealand proinence, particularly with our pet food customers who export into the global market.

Let's take a look now some of the progress. As you can see here, our branded products are showing double-digit volume growth. And in calendar year 2025, our branded revenue was up more than 20% on 2024. Our brands are delivering growth for our customers and improving our overall mix and expanding our margins. Our structural cost advantage. As I alluded to earlier, our automation program is delivering returns ahead of the original business case. Through these investments, we've expanded capacity, supporting both growth and higher value mix. We've lifted yield by between 1 to 3 percentage points, improving our revenue per bird. And this is a very capital-light way of adding capacity into our network. We've also lifted our labor productivity, lowering unit costs and improving operational resilience.

In total, we've delivered $3 million to $4 million of annualized run rate cost reduction, and we have that favorable road map ahead on projects, which will follow our capital framework and continue to grow our revenue, lift capacity and improve productivity. Putting these together, our pathway to $100 million EBITDA, I should add that we're measuring that New Zealand dollar and EBITDA is built on the 3-phase plan Ed introduced, stabilize, optimize and grow.

We've made good progress on stabilization over the last couple of years, and now our focus is on optimizing the network and growing to close [indiscernible] the key points I'd like you to take from today are the New Zealand market is structurally attractive, and we occupy number two position out of four players. With these market conditions, we believe outperformance will come from lifting our value [indiscernible] not just chasing both. Our distinct portfolio of brands spanning good, better, best, are performing well and bringing growth to the category and delivering margin improvement.

We're well positioned having the largest site and 50% of New Zealand is within a 3-hour drive. And these cost advantages are being extended through the automation program underway. With the revenue growth, cost programs and identified areas of new value, we have a pathway to $100 million EBITDA in 2030.

Thanks for your time. I'll now pass on to Carol.

Hi, everyone. For those that I haven't met, my name is Caroline Hayes. I'm the Chief Growth Officer for Inghams. Before I joined the Inghams business over almost 7 years ago, I spent a lot of my career in supply chain and procurement before moving into sales and marketing and worked with some well-known brands like Mars and Blackmores here in Australia and New Zealand.

So as Matt has shared, New Zealand has had the pleasure of very strong success over the last few years before stepping into the Chief Growth Officer role 10 months ago, I led sales and marketing for the New Zealand business. We obviously had a lot of strength around our branded portfolio and the growth that we saw double-digit growth revenue and margin. But when I reflect on that period and the strong success that we had, I think there was one key learning, which is it's not the strength of the brands alone that allowed that growth over time. It's very much we understood what was the consumer insight, what were the key consumer drivers, what's missing in the category of channels that aren't delivering on that need and then how do we bring the right propositions that are delivering on an unmet consumer need.

So I think a lot of that learning over the last few years has given us some really good foundation to understand how do we grow the business ahead over the coming years. So what I'm hoping to take you through today is how we will build a more repeatable value creation model over the coming years at Inghams.

There's three key distinct earnings streams that we're looking at and that you would have heard over the course of today. I think importantly, whilst they're distinct, they're also very interconnected when you look from consumer-led demand through to ingredients and how we plan to extend into the future. I think when we look at consumer-led demand, there's a lot of examples today, not just on our branded portfolio and how we've grown value over time. But I think as Clair has shown, there's been a lot of very good benefit around how we've shifted mix over the last 12 months.

But when we look and we step back and we say we've had good success across changing our mix and growing margin, we still feel that there's a lot of untapped opportunity for us to go after. So when we look at consumer-led demand, there's insights, there drivers, there's companies around us that are very focused on these needs of the consumer, whether it's through convenience, protein plus the high protein demand. And we already see opportunities that we're starting to build over the coming months.

When we look at ingredients, I think that's a very good example where as Ed has shared, how do we maximize the value of the bird that we already have. It's not necessarily about processing more volumes, but the volumes that we already have, how do we extract more margin. Susy has shared [ Project Pluto ], how do we take and make sure that we're moving further down the supply chain and extracting more margin, which has had a lot of success investing $8.5 million and generating an incremental $5 million EBITDA.

I think another recent example we've had in New Zealand is we looked at the stops and broth and [ suits ] category, and we said there's companies around us that already use our material and then deliver a much higher value product to the market. So we just recently launched WA Free Range Bone glass. So that's our first entry into a new category. Ultimately, it's 30% more margin than where that material goes today. So I think whilst in reality is small, it's an example of how do we -- there's a lot more opportunities beyond that for us to go after.

And then platform expansion. So as Ed often said, there's companies around us to make very high margin growth from utilizing our materials, how we're very clear on how we're going to play in those categories and channels. And then once we've earned the right to delivering sustainable and continued performance over the coming years, how do we move into new areas that are in high category growth. So I think when we look -- when we step back at the three key earnings streams, hopefully, it's very clear that poultry remains the engine, but what we're looking at is it's not going to define the boundary of where we grow into in the future.

I think looking at the high-value streams, there are opportunities. We're very clear on where we can win in new areas. But as Matt shared, we do see that our Trans-Tasman model should give us an advantage relative to our competitors across ANZ. This starts with really understanding what is the consumer need, what are the insights what's in high growth that we can go after and then what are the propositions we're going to bring to the market. As Ed shared, distinctive propositions that's where you get your margin growth. If you're bringing the same propositions that already exist, it's always going to be -- end up a race to the bottom.

So insights become critical. We have 30 million [ ANZ ] consumers that we can leverage our insights from. New Zealand is our test market. So I think bone [ bone broth ] is a good example of how we're launching that into the New Zealand market. And ultimately, we prove that out and then we scale it into the Australian market. Another good example was Bostock Brothers. I think from acquiring the business and growing it over the last 2 years, we're now very good organic poultry partners. We're always very good at nonorganic, but now we have a very good appreciation of what it takes to grow an organic company.

And then ultimately, what New Zealand allows us to do is test scale in a smaller market. And then once we prove that out, bring it to Australia and scale it and ultimately deliver more value. So then how we see that all coming together ultimately over time, that's what should allow us to have a scaled portfolio that we show us of in other categories outside of where we play today. This is a bit of an insight into how we're thinking from how consumer insights are translating to opportunities in the market. There'll be nothing new here.

When you look across convenience, nutrition experience, these are macro shifts that every food company in Australia is talking to at the moment. But when we look at the total addressable market across these three platforms, it's $2.6 billion. So we have a right to play within. It's an addressable market. And then the work ahead is what are the kind of key segments that we're going to play within those markets, which we've already started working on.

I think importantly, CAGR is growing strongest across the areas that we're looking at. I think whether it's insights on GLP-1 usage or the move to higher protein, there's lots of opportunity for us to play with the material that we already have. Some examples of proposition. So I think importantly, they're not a product success.

So I think if you take Ingham's Crunchy 6 in New Zealand, that was a very focused need on how do we premiumize the freezers. We heard from consumers, they said, I want to feel like I'm cooking something that feels more premium at home. So we brought out this range in 12 months ago and started growing the freezer category by 39% I think [ Bone Rock ] is another example, which I've spoken to. So 30% margin less compared to the next sale. And then outside of brands, I think Zoo Street Greek is a great collaboration that we had with [indiscernible], and we saw an increase of 38% new customers to the category. So I think what those examples say is it's not about the individual products and ranges that we're bringing to market, but it's how do we be really clear on what the proposition we're trying to solve for.

So wrapping it up, I think when we look across -- as I shared, insights becomes very critical. I think when we look at everything from ingredients we've spoken to today that we see it as a major opportunity for us to go after. We have some tests that we'll be proving out and we're getting the results for, but we see it as a much larger market that we can take advantage. We have all the raw material input that's now [ bid ] to put that material into higher margin and higher growth categories. We're already starting to see mix structurally improve, but there's still tons of opportunity for us to go after over the next coming years and where we're going to play in the market and ensure we're playing in the right places.

And ultimately, when we look at the three streams coming together, we should have a portfolio that enables us to move to parts of the market where we can premiumize, but we're also not cannibalizing the core. And ultimately, that's what allows us to both execute on the value that you've heard today, but also how do we grow EBITDA further into the future.

So that's it for myself. And I think I'm passing over to Ed, who's going to run a Q&A session.

We did a dry run of this, we went over by about an hour or so. I asked the team to make sure that they focus on their lines and they obviously spend the weekend doing just I might ask the people. I appreciate we've got here, but perhaps if you could line up, and I'll just field questions.

I think Bret. I'm taking questions from the room.

There's a lot of focus on the execution and that we certainly agree. But what is the company going to do to measure execution just share with shareholders and analysts.

Look, I think what I'd like to do at the back end of the deck, I get in my closing thoughts, but we've got effectively three horizons to talk about stabilize, optimizing growth. And over time, what I want to do is keep coming back to the market where we are relative to that journey and kind of overlay it with some of the key projects and initiatives that we talk about today.

So you can -- and quite frankly, if you look at the [ Ridley ] presentation and how it's evolved over time, it's stealing effectively from that sense of things. I think then internally, we'll have a stronger sense as well as to what our balanced strategic scorecard is, which hopefully allows us to hold ourselves to account for delivering on what we say we're going to do.

So are we getting quantified measures on execution? Or are you just going to...

We'll keep working on that. I mean as you and I chatted about prior to me stepping into the role, I hope that what the market sees is from myself as a CEO is wanting to raise the lead on how we're operating and performing and increasing the transparency that we get from the business.

And over the next 6 months, we intend to make sure that, that finds its way into our presentations. So whether it is showing a kind of view on how mix is evolving ingredients and our volume of ingredients is expanding, we'll make sure that we're giving you the information that allows you to make some judgment on how we're operating the business. Yes.

So just in terms of the, I guess, market opportunity more than I expected. But just at a baseline, what is your market share in sort of basic or primary process product versus value and also free range. I think we have a good feel on New Zealand where you do have a better mix across those three product areas. But what about in the Australian market?

Yes. So total Australian market share is, give or take, 30% across the board. I think we then say of that -- so I'll go to kilograms as opposed to anything else. So let's call it 8,000 tons a week is what our salable core product is. Of that, we've got 1,200 tons a week that goes into further process. So call that sort of nuggets and tenders, et cetera of the world. Value enhanced is slightly skewed because our biggest SKU -- biggest single SKU remains the roaster, and we're selling, give or take 800 tons a week of that. But I'd say value Enhance must be 1,300, 1,400 as well, that sort of number.

A little bit on -- yes. So you're talking the market is about 20%, 25% of value in there. However, there's still opportunities to keep that. We over-index in value enhancing retail, which is good. And then further process in the most recent market [ re-to-date ], Caroline, actually the market leaders when it comes to the freezer brand, which is a significant step change that's over 34% and growing in terms of total market retail.

Actually got the systems in place today where each of these plants can talk to one another and make sure you can do it is there some kind of investment to get that.

Yes. I mean, we've got systems in place so far as we've got good processes set up that are reliant on humans effect saying as it relates to the capability and capacity. I'd say we do a very good job with what we've got today. But as Andrew say, systems become inherently more complex and we do need to start leaning on technology if we're going to start to optimize it.

But I may not even though we're talking about planning of the business, for the last 11 years, it's been the most process still within the business. We're just saying that we ultimately need to significantly enhance it and really need to invest behind it as well. No, we won't be looking at ERP. As referenced, our first step is around building a demand planning tool, and we've got a partnership in place with Amazon, and we're in the process of building that at the moment. And then our next step is to look at what is a more kind of optimized planning system in totality. But maybe, [indiscernible] do you want to...

Yes, it is way is in the presentation -- so in a something that's going to last cost to get to the next step there is an annual talk about this always in about age that we rated our planning levels. developer. We can do [indiscernible] talk about [indiscernible] we have a operating challenge on price is challenging.

That is really about using that opportunities for approving our tool to process and the strategy we can absolutely get out of prices. So that's the first step as we are a bit of a beat optimization against [indiscernible] oath idea of actually better communication has to be at a price that is a point. That's not the starting portfolio that point the material on a billing plan better and thus by significant decline epic -- in the present. It's not something that's going to take to get to the next step and Andrew will talk about this more. But when you break it down across the plan, there's a lot we can do a lot better. And I talked about the fact that we have operating change process change that is really about using tools. Better...

[indiscernible] Macquarie. Just a question around the that you talked about in terms of getting the shelf life required and the 98% across the board for the customers. Can you talk to any data points you have around your competitors and how they sort of -- what sort of level of do they have and what differentiation you can bring to that?

Yes. I might get Susy, perhaps, to speak to that, including reference to our system and the advantage that, that provides.

Sort of two parts to that question. I think the first part is around our network and the uniqueness of our network. So when you compare us to our competitor, we have quite a unique network where we have a footprint in every state, and that enables us to get our product to our customer more quickly with a higher level of efficiency and also a higher.

Secondly, we have quite a unique shelf life program within our business where essentially we chill the product rapidly, which is great for food safety, but also for shelf life. And it means it gives us that freedom to be able to move product around the network as we need to and achieve that 98% customer service level that Clair was referring to in her presentation.

Ben from Jarden. Just the $130 million that you sort of identified, should we be thinking of that as linear over the 3 and 5 years? And how do we think in terms of bankability through the P&L? Are you talking about getting more return back through that value chain? Is this just holding 100% of that?

No, it's not. And I'd say that, that is growth of embedded inflation within the system as well. We and I'm not going to be providing any sense of guidance as it relates to future years. But I'd say that it is linear. It's probably slightly front-ended, particularly on the unlocking value from our operations.

But I think the way I think about it -- so let me start with maybe a story. I went to Japan the other day to go through Procter & Gamble and some of the best sites they've got globally. And they took me through their system of operations excellence. And they said two things. They said, firstly, once you get to -- if they got all the sites within their entire Procter & Gamble network to level 5 from an ops excellence perspective, then it would be the equivalent of building three new greenfields across the globe.

And as I said, regardless of level, every site is expected to take a further 5% of cost out each and every year. So I think about things like the way in which these things become sustainable is by developing a system which fundamentally keeps reinforcing itself keeps taking costs out over time. quite frankly, I think that's to be further. And my point asked me a question saying, whilst I think it's front end to start with, the system itself will find further opportunity just as time goes on through way of how [indiscernible]

And so your ability to continue to drive better pricing outcomes contracts challenge. Do you need your brands [indiscernible]

Yes. Look, it's a good question. Maybe I know you thought a bit about how you bring brand over to the Australian market. So down there. I would say Bret, our strategy fundamentally looks at three key things around how you create value over time. The first is how do you pivot more of your total revenue to places that are in growth.

The second is how do you create distinctiveness and distinctiveness creates pricing power, pricing power creates margin. And the third is how do you increase customer stickiness over time. And the reason that I say that is that there's many ways in which we create distinctiveness. And distinctiveness is the thing that creates leverage and pricing power. We talked about our network. I think our network is completely made. I look at what [ buy ] is doing, what the market is doing. They're consolidating, they're driving down unit cost. They're doing a fantastic job on delivering on that vision.

I think at the end of the day, they drive further commodity into an otherwise commoditized industry. And we're just saying our network is completely distinct from that. We're going to remain operating in all states across Australia. We're going to use that to provide the freshest products, the best customer service, and we're going to use it to create product optionality as well over time. And I think it's an important demarcation.

Brand absolutely works in New Zealand, but it's always been New Zealand as well as you're quite rightly pointing out then the shift or there's significant drift towards private label. within Australia. But maybe, [indiscernible] do you want to talk about just how you're thinking about brand more generally and the role that it might play within the Australian market.

So I think as the categories of growth that we're going to go after. I think when we look at brand, we recently went out and we did a lot of consumer research on how people see brand versus private label as an example. When we look at the portfolio in everyday commodity, consumers see every brand is the same.

When you look at freezer, they strongly resonate with the Inghams brand. And I think that's where you see because it's a different proposition. We've grown 17% year-to-date this year in freezer alone. But as we think about our portfolio ahead, I think that shared at the start, we're looking at how do we scale what we had in New Zealand for organic. Organic is a perfect example. The brand is the vehicle by which you speak to the consumer. I think there's still opportunity with the Inghams brand here.

But ultimately, as we grow into new areas where we do have a distinctive proposition, that brand will be the vehicle that we use to do it. So I think we'll naturally see a shift over time. It will look different to probably how we thought about...

Just what is the company's plans for positioning in the free range in Australia touches on that debate, I think.

Yes. I mean we're -- correct me if I'm wrong there, we're the biggest sellers of free range at the moment within the Australian market. I mean we've got 20% that's grown as free rent, slightly less of that's sold as free -- but at the moment, we are by far the majority supplier into macro within the Australian market.

I think as Carol pointed out, as Clair pointed out, it's growing above the base growth rate of the category. And I think we continue to push in that manner. Again, as Carol pointed out, we obviously -- a few years ago, we came out with the Free Ranger as a brand to step into that category. I think the reality of that is a proposition that it just wasn't sufficiently differentiated from what else exists in the market. And therefore, it wasn't successful as a brand. If you look at something like The Bare Bird, which is now ranged into Woolworths and Coles, this is air chill. It's got no antibiotics, it's free range. It's got a very much a point of difference and it resonates with consumers.

So long answer, I think that's an area of the market that we continue to play into. We always pride ourselves of being leaders in welfare. I think the question becomes how can we create the next iteration of free range and distinction over time. And part of that will probably stay we've made no secret that we like the idea of bringing the Australian market as well. I appreciate that, that is an organic proposition to...

And in terms of customers, my numbers are in the ballpark, but my sense is that wholesale would be circa 20% of the volume, if not a little bit more. It hasn't historically go back 5, 10 years, hasn't been that high. Are you comfortable with wholesale being the volume? Or is that adding to potential earnings volatility?

Yes. Look, I mean, maybe Clair, you've got a pretty strong perspective on wholesale. I don't you have a crack... I think you got the answer...

I mean, wholesale has a role to play. And we have seen as we've diversified our customer base, we've shifted more into retail. We're moving material from some of those lower wholesale channels into retail QSR. But equally, there's pockets in the wholesale where we have leverage in terms of proximity or lower competition.

And equally plays an important role for our business to ensure that we can move and maximize the value when we -- as Adrian talked about in that 13-week window, you need a home for that and you need to maximize it the right way. The key is to ensure your supply and demand is an equilibrium so that you can provide in the right way but you're not value my view is that we will remove lower value channels and move that into high-value channels, the wholesale will still play an important role for us. And there's some customers in that channel that are merging growers such as food manufacturers that there is significant opportunity to make that more sustainable.

And I might just further add, I remember the periods of time where we've been more like kind of 10% odd share of the market, your pricing within the market actually becomes, I think, more volatile because you're easily replaceable in terms of you get to a point within wholesale market where in effect, you hit a critical scale such that you actually do have a little bit more power than just working on spot price and market economics alone.

And we've certainly seen that over the last few years as well. I'd also make an observation relative to the market, which is the -- if I look at the last 3 years, I'd say it's been incredibly rational. There was obviously a period of time with the final Woolworths adjustment last year where I'd say arguably, we were the ones that set the market long at that point in time. But outside of that, it's a market that's very rational. And as Clair said, plays a critical role for us from both the supply chain as well as revenue-generating perspective.

[indiscernible]

Yes it's a good question. I mean, firstly, I'd say, if you look over a long period of time, you'll see that the business is, give or take, track with fee costs. And by that, I mean, whilst I think it's fair to say that there is an element of lag, over time, ASP moves with rising and falling fee costs as well, which is somewhat of a first principle thing.

I'd say secondly, in particular, within our retail and our QSR segments, we've obviously got mechanisms set up with major customers, which allow for cost pass-through. And by and large, -- we designed those contracts such that they are back to back in terms of the point in time at which the cost is incurred is the point in time at which the price flows through. But then obviously this question around wholesale, and I'd say the wholesale is a market whose price doesn't move based on changes or variations to cost inputs.

It moves based on market economics or supply-demand imbalances. And so that becomes a somewhat question mark. But I think what that really asks for is that the industry and us playing a critical role there are rational in terms of how we think about volumes. So definitely a slight level of lag, particularly as it relates to the non-contracted volumes, albeit there's also a slight benefit on the way back down.

I guess what did you learn from the last couple of times that you implement now thinking...

Yes, we are. And if I go kind of probably specifically to our principles in terms of how we're thinking about the crisis, the first one was this idea we don't either gain or lose based on price pass-through. And that is a direct response to I think we'd say quite candidly that through the period of high inflation, we saw too much increase and we became uncompetitive in the market, and that was a big basis for the change to the Woolworths contract that we saw another lost volume that flows through the business.

So one element is that I think Clair and the team as well as from a New Zealand perspective, done a very good job in partnering with customers as it relates to the price that is being passed through at the moment. I think the second is COVID in particular, when we were sitting at 35% vacancies across Australia and New Zealand. It just brought out -- ultimately, this needs to be -- whilst we talk a lot about margin, this needs to be a revenue-generating business.

And without labor to generate the revenue, we were just coming to a standstill. I remember when I first got over in New Zealand, we were literally making donuts in terms of underlying performance. So the second is every week, we're tracking vacancies at the moment, making sure that we've got full labor available to produce the required SKU set. And I think the final is I fully anticipate that we're going to go into a high single-digit inflationary environment over the coming 6-month period.

And what do we know from that? We know that you see an increase in in-home consumption, you see a reduction in-home consumption as well. And whilst we're not really doing anything except for being very aware of that at the moment. What does it really says that you're likely to see a slight reduction in demand in your sort of foodservice QSR wholesale channels offset by strong retail performance.

And I think pleasingly, we've got a retail channel where we're continuing to improve our market share position as.

No, that was up until March. I think in terms of the trading update provided, let's say, net impact this financial year of the $7 million to $10 million largely predominantly through fuel-related increases that are flowing through.

Probably at some level in New Zealand, do you have at all with...

As it relates to...

Question is how will the business be impacted by [indiscernible]? Traditionally, any comment on increased fuel cost?

Yes. As I said, we covered on feed through to early financial year '27. We're definitely there as it's publicly available seeing an increase in the cost base.

Looking on to the next financial year at that point in time, we're going to have to rely significantly on the mechanism and contracts that we've got in place along with how we manage to pass through from a partnership perspective.

In terms of fuel, there's definitely, again, been a significant impact to the business and it's flowing through notwithstanding that we've had a slight reduction through way of the excise tax being taken off.

I'd say what I am most proud of as a business is just seeing the offsets that are happening through operational improvements. And I probably skipped over it somewhat, but the focus is we've introduced these minimum order quantities. We're leveraging AI to optimize our transport routes. We're rethinking where raw materials are going across the network. And all of that is helping to significantly reduce, I'd say, the cost impact that's flowing through as a result of the fuel increase. So it's material. We're obviously not alone as it relates to confronting the impacts of the war in the Middle East.

[indiscernible]

Insufficient answer, I guess.

How do you think about in terms of the grocery issues, but that seems to be resolved from the beginning of the year. How do you continue to drive that switching? Because why protein prices haven't changed really picked up in the last couple of years when theoretically should.

Yes. Look, I tend to think a couple -- a few things. I mean, firstly, I think it's fair to say that retailers are significantly investing in [indiscernible] from an infrastructure perspective. And you just need to look at where Woolworths are investing their dollars. They're investing upstream. And that then means that they're incentivized to keep volume flowing through that area of the network. I'm sure they're taking some level of hit from a margin perspective to keep pricing on shelf slightly lower than the kind of true raw material increase would suggest.

I think the second thing is that where we see big changes happen, it's when the shelf space ultimately changes. And we saw that through the most recent sort of inflationary increase where space for poultry was expanding, which saw an uptick in demand, which just says consumers, I guess, shop with their eyes more than they necessarily shop with their minds in many respects.

And look, I think from our perspective, how do you -- so the third one is just I think consumers are people. And so you're seeing they would like to eat red meat twice a week, and you see that flow through how they think about their shopping. And so the fourth and the opportunity. So Inghams is how do you create a more premium experience such that you can become a substitute for the red meat opportunity as and when it presents. Yes, the short answer, Ben, is I am surprised that there's not a more significant switching that we see as a result of price.

[indiscernible]

Yes. Look, I mean I go back to we need to stabilize and grow the business. And we -- once I get to the capital I talk about, I think our net debt position at the moment is high. And obviously, I think our leverage is outside the range. And so the immediate term is around making sure that they all come back to within that range.

I think absolutely, there's a role for M&A to augment strategy. I personally like the notional -- the goal of M&A is to invest in new capability that offers that distinctiveness and whether that is brand or it's a new capability that produces a different product. That's how I probably think more about M&A as opposed to just expansion for expansion stake, which I don't think is necessarily a good use of investor dollars.

[Break]

So welcome back. Trust you had morning tea. And apologies, there was no product out there. We'll ensure next time that we've got some product.

So my name is [ Andrew Locke ]. I'm the Chief Technology Officer for Inghams. I'd like to convince you that I left university a couple of years ago, but that's not the case. I've actually been in technology for just a tad over 3 decades. It actually feels quite a long time just saying that.

And the last two companies I've been with have been 25 years with two other companies, multinationals. And they had a very clear vision, which was around providing quality, affordable products to consumers every day, and that was the attraction to Inghams for me.

So as you've heard from the leadership team, -- the ambition and direction is clear. And I think from a -- for a technologist, that's music to my ears. So that provides me a rich foundation for me to build on as technology is really a key enabler to this business.

So in the next 10, 15 minutes, I'm going to walk you through how technology is looking to enable this ambition. But just firstly, I want to touch on a decision that was made 3 years ago that [ Helen ] and [ Michael ] and the Board made. This was a very deliberate yet considered decision not to invest and embark on an expensive multiyear [ ERP ] program. To be fair at the time, it was quite a bold decision given the residual risk of the environments that we work within, aged infrastructure, aged systems and people.

But there is a -- since then, we've seen significant advancements in cloud and compute platforms, AI, modern integration. And these modern integration tools allow us to connect and extend our existing systems without replacing them. We don't need a multiyear [ ERP ] program to unlock the value in this business. So the decision 2 years ago was not just bold -- 3 years ago, sorry, was not just bold in hindsight. It's actually positioned us today to take a smarter path forward.

So let's fast forward to today, a little bit about it already, but let me introduce [ Nexus ] platform. This is Ingham's digital engine. This is the technology future for Inghams. I want to call out that this is not a product we're buying off the shelf or a ready-made solution. This is an ecosystem that we are creating as an organization.

So let me dive into the platform, the Nexus platform itself. So I'll start with layer 1, which is the foundation. So the layer at the bottom there. Today, this is where our rich systems of record, systems of knowledge, systems of knowledge sit. And this is realistically been built up over the last 30 years. Given the age and residual risk of these systems, the temptation would be to replace them with new for old. We're not going to do that.

Our philosophy is clear. We want to wrap these systems, not rip them. containerize the technology that enables this -- has enabled this great business over the last 30 years with this technology.

So let me explain the intelligence layer. Significant, and I do mean significant. In my career, I haven't seen the advancements in technology that I'm seeing in the last 2 to 3 years. I've made this a reality. So when I talk about cloud platforms, compute power and then we've got AI. So we've got traditional AI, Agentic AI, multimodal AI, others, integration capability and digital twins and so on.

So I mentioned wrap, not rip our current systems. So how are we going to achieve this? We partnered with Amazon or Amazon Web Services, and I'll refer to them as AWS to leverage their capability, both knowledge, process knowledge and technical capability to deliver this platform further. This is the layer where our business data becomes business intelligence, one trusted source of the truth, live data streaming across both [ ANZ ] and AI agents that can act on intelligence within proper governance and guardrails. We are not replacing humans. We are augmenting them.

So just for a moment, we talked about planning before. Think of a supply plan in our organization today, currently pulling data sources up to five, probably more five, than five data sources or systems across the organization. We will bring that down to one data source, driving a single production decision.

Nexus puts the intelligence in the forefront real time with recommendations that can actually act on. This is the layer that turns 30 years of operational knowledge into a genuine competitive advantage. Now if I talk about the experience layer, layer 3. So today, if you think about it, end users look and look at a 30-year-old system. So that's one advantage is to change that look and feel for our end users. However, the big play here is to have access to real-time data to drive real-time insights.

For a business like Inghams, this is critical. Digital [ twins ], conversational AI grounded in Ingham's own data and human AI collaboration driving real right real-time and right information for those people, accessible on desktops, mobile and embedded tools that we have today.

As you've heard, this direction improves value, better pricing and better decision-making, reduces cost to serve through optimized logistics and network planning and drives consistency of earning by real-time visibility and not surprises.

So my final message on this slide, we are not -- we are making a deliberate shift in our thinking and our approach from traditional technology mindset. We're looking to leverage significant advancements in technology. The Nexus platform and digital engine is not a concept, it is a platform. It is secure, it is scalable, strategically owned and here to stay.

Now if I move to the road map. I'm only going to spend a couple of minutes talking about two key things within this road map. The first one is AI adoption and literacy. To cast your minds back to March 2025, the leadership team made a bold move to provide access to a large language model and topic, which is known as Claude in a secured environment.

First, the Board and leadership team, and 2 months later, Claude was rolled out to 1,000 users across Inghams, a very deliberate deployment strategy to lift the exposure and literacy of this evolving technology. So these adoption rates that I'm going to refer to in a second are rates that I have never seen before throughout my career. Within 2 months, we had 80% adoption across the business. Month 4, we had 90%, and we maintain those rates today.

So fast forward to today, so we haven't just adopted AI, our literacy has improved considerably. We now have 30 trained AI champions embedded across all functions in the business. And of those 30, we have 13 advanced AI champions or AI evangelists as we're calling them to drive oversight and advance our AI capability in.

In addition to that, we've created an AI innovation Board, which most of the leadership team sit on. And this is really looking as well as support from AWS. And this is really to look at high-value use cases, high impact that drive real business opportunity. So the goal is not just adoption. It's about making AI a core operating muscle for this business.

Now if I move to the road map. So these are clear phases. We want to strengthen the foundation. We want to accelerate, integrate, lead and optimize. I think the advantage of these -- this approach provides flexibility to adopt and adapt. The phase structure gives the business and Board clear direction at each stage. If the returns are the returns are not there, sorry, we pause and redirect. If they are, we accelerate.

So just to close, we're not chasing technology for technology's sake. Every layer of the Nexus is platform, [ Ingham's ] digital engine, every use case, every investment on the road map is tied directly back to earnings improvement, cost efficiency, competitive advantage. We own the platform, we own the data, and we own its future.

Thanks, Andrew. Thanks, everyone. As I said early on, I'll caveat this part of the presentation by acknowledging that, obviously, normally, my CFO would be presenting on balance sheet and our debt position. But given Gary Mallett decision to step away from the business as of 30th of September this year, we thought it appropriate that I present instead.

Accordingly, the next few slides are largely framing up how we're thinking about capital and some of our positioning without necessarily providing a specific answer. One of the questions that was asked of me during the break was how do I feel about a new CFO coming on board, having not had significant input into the strategy. And whilst myself and [ Gary ] have been liaising and I think shared with him the key tenets of our strategic direction, this is an area where I absolutely want him to put his spin on things, including how we create and ultimately ensure a healthier balance sheet over time.

With all that said, I think strategy only really matters at the end of it, we can put up a lot of nice words, a lot of nice ideas, but only really matters if we can successfully translate it into returns. And I think very candidly, this is an area where we need to improve as a business.

Over the last decade, as many of you will have seen, significant capital has been invested into the business. Many of those investments made absolute sense at the time, including if you think about things, purchasing our [ Bolivar ] processing plant, we purchased our water cutters, our [ DSIs ]. We purchased [ leak combiners ]. We've invested significantly in automation and capacity expansion. And as Susy highlighted, I think many of those investments really provide opportunities for us to capture more value today.

And the three reference points that she positioned to was firstly [indiscernible] One Touch, which enables [ WA ] self-sufficiency in a far better and more cost-effective retail solution. She referenced obviously the new oven at [ Lizzaro ], which is around contingency as well as expanded capacity for our further processing network. And then she also referenced automated trade packing. And that's both around how we ensure a more efficient trade back solution of the market as well as how we'll ultimately meet the fixed rate needs of both our customers as well as consumers in the market. And so there's opportunity. And the reality is that as capital has increased within the business, returns have declined, and that almost as a starting principle is insufficient.

The outcome for clarity doesn't come down to a single cause and in no way am I suggesting that they are bad decisions that have been made historically. Returns have been compressed by both the volume of capital deployed and by periods where overall business performance has simply come in and fallen short of expectation. Both matter. And the important thing is that both are within our focus to address.

So it is to say that I think a key lesson for us being obviously a vertically integrated business that's got intensive capital is that these projects can't be reviewed on a project-by-project basis. Hopefully, a lot of what you've heard today is about if we as a business are going to extract full value, then we need to be operating as an end-to-end system. And that means that we can't think about things as a one-off process of cost reduction or capital improvement. It's about how does an investment ultimately reduce cost, how does it optimize meat flow? How do we ensure that the product comes back together and can be sold in the market? How do we ensure it can be sold through to our customers and how do we also ensure sufficient network flow.

Another question asked of me during the break was this idea, and I say somewhat of a false theory in many respects, which is that over time, when retailers or large customers see our earnings performance that they simply seek price reduction as a result of that. I'd say that's not the case. In many respects, where we have fallen short in terms of delivering on our capital investments is that we haven't attributed the full system impact. And therefore, we haven't extracted full value from the investment.

We can build very good assets but the system around them isn't operating effectively and the returns simply won't realize. And that is why as of the last 6 months, we've centralized capital management underneath finance. whose specific goal or role is to ensure that only the very best capital projects come forward and that they're being considered in a very well-rounded system level nature. And that means that sales know how to sell them and we know how to implement them through operations. We think about the impact as it relates to me flow and balance throughout operations as well.

So probably three points in particular that I just want to note on this slide. And the first is that our immediate priority is to reduce leverage to within our target range of 1 to 2x pre-AASB 16 EBITDA and once they maintain it within range. This is important because, obviously, a stronger balance sheet improves our resilience, provides us with opportunity to withstand shocks such as the one we're currently in many respects, living through, but also provides us with optionality in the future should as [ Daniel ] alluded to, should M&A opportunities like come along.

Secondly, as [ Adrian ] alluded to when he talked about planning as the part of the business, we see real opportunity to reduce our net working capital across the system. Historically, suboptimal planning has driven significant increases in inventory. And I think it's fair to say that we -- as a result of that, as a result of the complexity of our supply chain as well as the need to deliver service level to our customers, we hold buffer right across our supply chain. And that results in an increase in inventory or net working capital. And we see that as we invest in planning that we can reduce that ultimately going to reduce net debt over time while simultaneously improving our service levels to our customers.

And then finally, capital allocation itself has now been centralized and segmented into four distinct buckets. Obviously, stay in business. This is a capital-intensive supply chain that we're operating in. We always expect to spend 30% to 50% of available capital on stay in business. It's about reliability, continuity and compliance. Secondly is optimization capital. This capital that's really focused on cost out. And I think it's fair to say that with cost out and with the market dynamics as we see the stake, over time, there should be a level of expectation that you bank the benefit. But then ultimately, they will be competed away over time, such as the reality of the business and the industry that we're working within. And we expect to spend 20% to 40% of the total capital envelope on optimization capital.

Thirdly is growth CapEx. This is around how do we increase capacity, how do we drive mix improvement, how do we drive higher revenue-generating opportunities. And this is the one where, as I referenced earlier, my view of the world is that our role needs to be how do we invest more capital towards distinctive capability because distinctive capability is what creates distinction in the market. Distinction is how you create pricing power and pricing power is how you create margin.

And so over time, we're going to make sure that we're allocating a further portion of capital or the available capital envelope towards growth capital. And then finally, there's more strategic investments, new strategic capabilities that may well go beyond the realms of what we're doing today that again, are seeking to provide distinction and deliver or augment our strategic positioning within the market.

The important shift here is really that we want to make sure that if I look at it historically, it's fair to say capital allocation was managed largely through operations within the business. We're centralizing that. We're putting it underneath finance, and we're making sure that it's far more closely linked to strategy than it ever has before because the role of capital outside of making sure that we're able to continue to run our operation as we do today is to augment strategy. And hopefully, that's what you're seeing on the page up here.

Finally, we do have a pretty clear and distinct plan, which says that we need to reduce operating leverage and reduce debt over time. Over the next 2 years, we'll be reducing net debt and leverage and ultimately get it back to within our target range. The balance sheet today is sound, but ongoing discipline can make it become materially stronger. A stronger balance sheet ultimately is not just a financial objective, but it's what gives us the platform to do new and different things in the future.

So the real key messages from here is that as [ Helen ] alluded to upfront, I think we've done a listening session with our investors and we've heard you, and that is that we need to reduce our net debt position and get our leverage back to within thresholds. Improving the balance sheet does not depend on heroic assumptions by any means.

We've got four levers available, improved earnings. Hopefully, what you take from all the areas that have preceded this section is that there is a strong argument to say that Inghams can improve earnings and extract further value from this operation. Secondly, we're going to get better planning to reduce our net working capital. Thirdly, we're going to ensure capital discipline. If you think about even this year, we went into the year -- into this financial year with $36 million of overhang capital from the previous financial year, and we'll finish the year spending, give or take, $80 million. We cut hard on capital given the balance sheet position of the business. And that kind of discipline is absolutely what we need to do as we continue forward as well.

And then finally, I put up their dividend policy. That's not to say that we are reducing our dividend or our payout ratios in the short term. It is to say that it is a critical lever that's available to us. And our first and foremost position is we're going to make sure that we've got a healthy balance sheet. And if it gets to it that the top 3 levers there, we feel that insufficient, and we will look at addressing it over time, but it's not something that we're introducing right now.

So if I had to summarize very simply the capital philosophy of the business, it's these three points. The first is the stronger cash generation through earnings performance, reduced working capital and capital discipline is our focus.

The second is that we will reduce net debt, and we will get our leverage back to within target range within the short term.

The third is that a stronger balance sheet ultimately gives us resilience and gives us the freedom to invest in new and different things in the future and to strategically grow.

And then finally, as I mentioned a few times today, 70% of return on capital over time comes from revenue-generating capability and opportunity. And over time, the intent is that we invest more of our available capital envelope into the new ideas and capabilities that are going to create products and solutions that are distinctive to the market, create pricing power and therefore, grow margins.

Above all, we believe there's still very significant value that's available across our network that we can unlock from just running our operations better, and that's certainly the near-term focus of the business.

If I can finish with a few reflections and just wrapping up on some of the key messages that you would have heard from myself and the team this morning is this. Firstly, as I said with the outset, we're reconfirming FY '26 pre-AASB 16 EBITDA guidance of between $180 million and $200 million despite a materially more volatile environment brought about by the war in the Middle East. The situation is creating meaningful cost pressures across both fuel as well as increasingly packaging and the impact is real, but the business is managing it very effectively, and that's through a combination of cost pass-through procurement discipline, logistics optimization as well as some level of SKU rationalization.

What gives me confidence is that the operational performance of the business is improving underneath the external volatility. As I said upfront, volumes are improving across both Australia and New Zealand. The fact that the Australian business has got back to growth of 1.2% in the first 9 months through the end of March is incredible. And it says a lot about the business, the customer centricity and the customer partnerships that we've been able to grow over the last 9-month period.

The second is that inventory is improving. We've reduced inventory by $25 million across year-to-date with more still to come. The third is that prices are increasing. You would have heard from me in the half, I talked about the basis through which upgraded guidance was provided was on the basis of holding pricing flat, and we're now talking about depreciation. And of course, a big element of that is due to the prices of the Middle East and the need to pass through some of that cost through to customers.

And then finally, the wholesale market is buoyant. Again, in my 11 years, the one thing that I'll say as a theme or a correlation is that if you have strong demand flowing through the retail channel, then it's likely that, that will result in strong wholesale economics. And what we're seeing at the moment is retail demand continues to be very buoyant, driven by a combination of cost of living pressures as well as an increasing delta between poultry as well as red meat, which is driving consumers that demand.

And importantly, the run rate of the business is materially stronger than it was earlier on in the year. You all would have seen the graph that we put up earlier pinpointing that, but I think it's fair to say that the rate of improvement has been significant and material.

This slide really captures the philosophy of the strategy that myself and the team presented today, that is the sequencing is everything, and we'll keep coming back to this in market updates. I think, [ Clair ], as it relates to a document that I want to keep putting in front of the market to give us a sense as to how we're going executing strategy, this will be it. We'll work on how we quantify as well as put more discrete initiatives against each of these areas over time. In a vertically integrated business, stability matters.

And the last 2 years, in particular, for this business have been incredibly destabilizing. Over the last 9 months, we've been focused on simply stabilizing the business. This means reducing our inventory, getting back to growth, getting our operating settings back in line with what we know produces best value. We then move to optimizing the asset. That's around how we're going to expand margins through improving mix through reducing cost to serve through instilling greater planning discipline and ultimately optimizing our network flows.

And then finally, we're going to grow new value, and [ Clair ] took you through that today. We see three very key areas that we can grow value into where we've got an absolute right to win. And that's where the opportunity is significant, the opportunity is scalable. It's backed by consumer insight and where ideally we control the raw material input.

But as I said and their approach to games warrant, you earn the right to play out wide, no disillusion and we're not going to jump straight out to the growth stream of things. We're going to make sure that we focus on stabilizing and getting through the immediate period first. So the immediate focus is that we need to navigate the crisis in the Middle East.

As I said, the cost increases are material. We're doing a very good job managing it, but it's going to be on our agenda for the foreseeable future.

Secondly, we need to keep building on our operational discipline. We talked about the fact that in the near term, operational efficiency is our best and easiest way in which we improve the earnings performance of this business. Susy talked about $100 million of upside. You saw the yield improvement that's already flowing through. We believe that there's significantly more that can come through simply running our existing operation more efficiently.

Thirdly, we need to continue being great partners to our customers. As I said, if there's an area of pride that I feel as it relates to our performance over the last 9 months, it is in this area. The fact that we're getting awards with all the customers, we're first in the Advantage Group survey, the fact that we're growing at high teens with all non-Woolworths-related retail accounts is testament to two things. One is that we have absolutely transitioned to become a customer-centric culture. And the other is that Inghams can absolutely compete. I feel like you hear an awful lot about can Inghams or can't Inghams compete in this market. Make no mistake, we're a 30% market player with what I believe is the most attractive network in the market with the best partnerships. Of course, we can compete in this market and the fact should state that for themselves.

And then finally, we're going to be making planning strategic capability, as I said, and I probably belabor the point of that planning is the thing that connects the left hand with the right. And when we get it wrong, we get it very wrong. And quite frankly, we got it very wrong this time last year. It led to the massive increase in inventory, and we spent the whole first half of this financial year managing that, getting back to balance, managing supply/demand, bringing our inventory down. Planning needs to be better as a capability. We're elevating it. We're making sure that it sits at the executive table. And over time, we'll also be augmenting it with technology as well as artificial intelligence.

So in terms of what I hope gives investors some level of confidence, it is that none of this is theoretical, and we provided the trend of improvement the whole way through. Many of these initiatives are already well and truly underway and already producing results.

On the productivity side, you've seen improvements to labor productivity. We've reduced our overtime materially. We've seen planning uplift. We've seen the yield improvement, Susy talked 61% to 63% New Zealand, just for context as well is closer to 65% in terms of yield generation. I think at some level, that provides whilst there's differences between the markets, there's differences in the kit. At some level, that's got to provide a sense of opportunity that's available.

And then finally, we talked about improvements to logistics and supply chain. When we went into the half, we didn't have a sense as to what our true cost to serve was on a customer-by-customer basis. We've now built within Claude, which Andrew referenced, a true cost to serve model. So we can make far more informed decisions relative to where we're directing our product.

On the growth side, what you should be looking out for as we look ahead is firstly Bostock Brothers within the Australian market. I talked at length about the role we need to be -- if we're going to be branding stuff, it needs to be distinctive. No point branding commodity. And we bought [indiscernible] 2 years ago, one of the big intents or one of the basis of the investment thesis for that acquisition was that we wanted to scale it into the Australian market.

The second is that we're scaling this ingredients curve. You think about ingredients, currently, we apply effectively no cost to product that go flow through to rendering and it's a significant volume as well. Our plan is to scale that all the value over time. It also allows us to compete on the export market basis where we can be competitive because we don't assign cost of the product. I see over the medium, long term, in particular, significant upside relative to that as a strategic positioning.

Finally, we're seeing the significant new business. [ Clair ] obviously talked about some of the big [ leagues ] of new business that we've won over the last 9 months, and there's more new business that's being committed to over the coming 6 months. And again, if nothing else, what that tells you is that Inghams can compete.

And then finally, we're moving into higher value formats as well as new category opportunities. referenced this. But when we think about things like [indiscernible] Polar entering into growth, when we think about the collab around the [ Zeus ] Hot [indiscernible] Chicken product that seems to have taken the world and we think about that's kind of new -- bringing QSR to home for you range. These are things that truly do create advantage and they allow us to grow our category not for ourselves but for our retail partners as well.

Importantly, I think much of this growth and much of this opportunity, it's not about investing in new spaces, it's about leveraging the existing infrastructure and the existing capability that we have today.

So why are we confident? And ideally, why are you confident as well? Firstly, it's because this remains a structurally sound business. I emphasize significantly with investors over time that you look at this business on face value and you say you give or take a 30% to 35% fare in the most attractive protein in a largely closed market, why can't you generate higher returns on that economic value alone. But we do operate in a structurally attractive market.

Secondly, it is because Inghams has very strong foundations. I want to belabor the point around we have got a very different network to what our largest competitor in Australia has. We've got a network that spans all states and it provides for localized service, it provides for great customer service levels, and it allows us to provide differentiated product over time as well.

We've got New Zealand, which is a strategic weapon within our armor. And in many respects, what we're thinking about now is how we leverage it more strategically or purposely. How do we start to innovate, test and then scale into the Australian market. We've got these deep customer relationships. And as I said, we've got a diversified network.

Thirdly, because we now have far more clarity on where the value opportunity sits, the opportunity is better through execution. We're talking about higher value per bird, improved planning, stronger mix, focused operational excellence and disciplined capital allocation.

And finally, this is a sequence strategy. Whilst ambitious, I think it very appropriately manages risk. We think about, firstly, how do we stabilize the business first, how do we optimize and expand margin second and how do we grow new value third.

And so on that note, and I'll open up for questions straight after this, I do want to say thank you on behalf of the Board as well as the management team. Inghams, as I said upfront, is not a broken business. And it's not a business that can't compete. We've shown that across the course of the year, and we'll continue to show it as we move forward.

I'd say we're a pretty strong 108-year-old business that has not consistently captured the full potential that's available. Over the last 12 months, we've reflected deeply, we've changed significantly and the results are starting to flow through. You can see them, albeit there's still a lot of work ahead. But increasingly, we believe we now have, firstly, the right strategy. Secondly is the right sequencing and finally, and perhaps more importantly, is the right team that's capable has the capability to deliver on the strategic intent.

And importantly, we're not trying to fundamentally change the greatness that this company is. All we're thinking about is how we can create a better version of this company that can ultimately extract more value from what it's doing today. So on that note, I thank you very much for your support and time today, and I'll open up to any questions that the room may have.

Working capital reduction plan. Does that rely on the supply chain and things like cost to serve to be optimized getting working capital down on a...

I'd say they happen in parallel as opposed to a rough sequencing relative to. If I think about working capital today, I think you can think about working capital based on buffer at any stage of the system. If I think about our competitor thinks about buffer, I think they have a majority share in wholesale and they think about that as buffer.

So if they're short, they think about redirecting volumes away from wholesale into the retail channel. And I'd say we've got buffer within there. We've got buffer as it relates to fresh and frozen inventory. We've got buffer as it relates to broilers in the field. We've got buffer as it relates to eggs. We've got buffer as it relates to breeders, and we don't always drive breeders out to full age of 62 weeks. I think all of that represents working capital, all of which can be reduced. And so I think it's more around how do you get better real-time indicators as it relates to what's sitting within each stage of the supply chain whilst at the same time, ensuring good customer service and low I supposed.

Around the CapEx requirements going forward, how you aim to essentially balance out your, ensuring production is low enough but also being able to have enough CapEx to spend on things like value enhanced?

Yes. No, it's a good question. It's more I'd say that the real focus that I want myself and the team to be putting over the next 12 months, in particular, is around how you extract more value out of the existing assets. I think there's far more value that's going to come.

Make no mistake, when you introduce big capital change into a factory, that comes with its own destabilization in efficiency. And we see that, quite frankly, time and time again. So next 12 months, in particular, whilst we're looking at improving earnings and improving the health of our balance sheet, I think it's largely going to be that rather than cost out CapEx, we'll be looking at how we just run those assets more effectively.

I think over time, [indiscernible] it's probably less about none of cost out more revenue generating and more saying we're pulling every capital opportunity together. It's being managed centrally, and we're going to optimize allocation based on the available envelope.

Just on this working capital reduction, are you suggesting you can get working capital we want to measure?

Yes, I think so. I would say that there's probably sequencing to how quickly we deliver it, which is that we need the tech solution in place first. But then I think absolutely. I mean, it's a business that's always operated with buffer and manually at that and always trying to achieve 98% service levels.

So yes, I think absolutely, you can -- it's a decision around where you effectively hold your buffer and then making sure that we're not holding buffer at multiple stages within the supply chain that we're just holding it in the most appropriate place.

And any implications on other elements of working capital, whether it be credit or debtors?

I don't think so, but let me get my new CFO. he'll provide more educated perspective on.

Where is capacity utilization? I know that's a big question, but maybe first part to understand at what point will change the capacity? And how much spare capacity do you have for the production growth?

Yes. So look, we -- I mean, why don't I go more holistically, which is to say through, give or take, 2030, there will be ongoing capacity expansion that needs to take place within our network, but nothing significant in terms of all that's manageable within our forecast capital expenditure beyond 2030 and certainly, once we hit kind of some lease renewal in sort of 2034, et cetera, we're then opening up optionality in terms of how we think about capacity expansion.

In the immediate term, we say that we've got -- once we look at going to kind of a 6 processing week, we've got, give or take, 15% to 20% of spare capacity across the network, and it feels comfortable as well. I'd say that one of my beliefs at least is that the worst thing you could do at the moment is invest in significant new capacity at a point in time at which obviously, that's coming on in the market.

[indiscernible] process...

Yes. Primary will be the first thing to point process. I'd say yes, you sort of say further process over time becomes slightly less critical just through nature of the product.

On fuel cost, [indiscernible]

As well to fiscal '27?

Yes. I think that's fair. I'd go back to without overplaying these principles, but we either gain or lose through way of cost pass-through that certainly the principle. And we've seen that at the moment, which is that there's definitely been a slight dip in the kind of headwind cost of fuel in the kind of immediate short term in this week, next week.

But based on the last check it was around $120 per barrel price. I imagine it's going to you again, but we haven't passed that price increase at the I'd say not materially at the moment I mean it's -- I'd say not materially at the moment. You probably talk to a few of the QSR operators and they're starting to talk a little bit more softness certainly than what they were saying in March. But based on our sort of ex-factory numbers, it's pretty nice to see. And we'll probably have a pretty much stronger, better view of that once we get to the full year immersion.

As we go into line technology related put 30-year old steel you have at can provide the potential rights et cetera, systems may not be resolved by AI as the modern car system. [ Mike ] at our resident technology person that sits engine. talent agent system. I think these are actually while we commission invested in them over the years and a bit to purchase. We have built on what we're looking at the moment to stop further on those systems to vanilla in technology for so long, these are robust systems that do exactly what we need to do.

What we're going through as you saw through the Nexus platform is we're going through quite a logical process of how we take them into the cloud and how we take them back to vanilla. Once we are back at the vanilla, then what do we do next? Do we continue to containerize and look after them? Or do we actually look at what technologies in the market at that point in time.

But I think the thing that I just -- we have put risk mitigations around to ensure that they're not going to fall over and we do monitor them on a daily basis. The majority of the team that I look after is focused on business as usual. So we have a lot of monitoring in the background.

Do you want to [ Andrew ] just talk about the example of a change to, I think, the code within [ BPX ] and just a reduction of time that takes through use of AI.

I started my career on [ BPX ] [indiscernible] old we've coded at source code in [ BPX]. And it does two things. Knowledge, we actually know folks on the system probably some time ago, we actually know what the code is doing. So that's point number one. Point number two is it [ BPX ] [indiscernible] the issue. And then the other thing too is we are looking to use it for enhancements, not necessarily just on we're going to stop doing that. But if there are that we need to fix. And we had an example a month ago where the developer would take 90 days, 3 hours. So we are seeing the advancements in technology coming through, making sure that we are putting controls around that. So this is not a new hype and we used to technology. This is not a hype is real. We've got to make sure the right controls around it.

Any other questions online, Bret? Any other questions?

Great. You're welcome to stay around and chat to management over the next 20 minutes ago. So thanks very much to everyone who attended today. Very much appreciate it and look forward to touch base with many of you over the coming months.

Welcome to the Inghams FY '26 Interim Financial Results Briefing. [Operator Instructions] I will now hand over to Inghams' Chief Executive Officer and Managing Director, Ed Alexander.

Good morning, and thank you for joining us today. My name is Ed Alexander, Chief Executive Officer and Managing Director of Inghams, and it is my pleasure to welcome you to our interim results presentation.

On behalf of Inghams, I would like to acknowledge traditional owners, both past and present as custodians of this land that we are meeting on today. Joining me for today's presentation is our CFO, Gary Mallett. At the conclusion of the formal presentation, we will take any questions you may have on our results, the business and our outlook for the remainder of financial year '26.

Our first half result is below expectation and below the potential of this business. As we outlined in our November trading update, the primary driver was elevated operational costs in Australia that arose from 3 key areas: excess inventory carried over from financial year '25, higher cost to serve as we onboarded new customers and products and transitional supply chain inefficiencies including the value-enhanced consolidation into our New South Wales Ingleburn facility. These factors reduced network efficiency and increased unit costs in H1.

The actions we have implemented to address these issues have reduced inventory by $27 million during the half, which has enabled a return to normal production settings and an improvement of unit costs as we move into half 2. At the same time, the business fundamentals have definitely improved. The first half saw a return to positive volume growth in the second quarter, driven by significant new business wins.

Net selling prices improved across the half, driven by growth in our retail channel and a strong recovery in wholesale pricing as channel economics improved. New Zealand remained resilient, driven by stable operations and strong branded performance. Overall, the first half earnings we have announced this morning are not where we would like them to be and are well below the potential of the business over the medium and long term.

Turning to our key performance indicators for the half. As you can see, group volumes were slightly lower year-on-year, reflecting financial year '25 changes, but the trend improved throughout the half. Net selling prices increased modestly, supported by mix improvement and wholesale market recovery. New Zealand performance has been stable, providing a partial counter to the weaker performance in the Australian business. We will discuss most of these key metrics in more detail throughout the presentation.

As we outlined in our trading update in November last year, the key driver of the result has been an increase in operational costs. Beyond general inflation across labor ingredients, utilities and packaging, the elevated cost drivers have been $19 million related to excess inventory management, $6.7 million related to incremental supply chain and logistics costs, $3.8 million related to lower farming performance and $1.8 million related to the transition at Ingleburn.

We have made solid progress against our cost reduction program during the first half of financial year '26 and remain on track to deliver $60 million to $80 million of savings for the full year. Measures are in place to restore operational performance in the second half, including improved planning discipline, supply chain stabilization and targeted operational initiatives across farming and processing.

Significant progress has been made against our key financial year '26 operating initiatives, and we have more to do. Firstly, the group returned to volume growth in Q2 with strong non-Woolworths retail growth and QSR volumes increasing on the back of new supply arrangements. Secondly, our voice of customer metrics have improved across all major segments, and we are maintaining high service levels whilst growing volume, which is testament to the capability of our team and the potential of the business.

Thirdly, we have addressed excess inventories. Processed poultry inventories were reduced by $27 million in the half and the resulting working capital improvement underpins strong cash conversion of 113%. The organizational restructure has been implemented, delivering expected annualized savings of $8 million to $10 million. Operations and procurement savings are being achieved, and we are on track to meet our full year cost reduction target as further savings are delivered progressively throughout the second half.

We also saw unit costs improved sequentially in Q2 versus Q1. With inventory normalized, production settings have returned to more normal levels. Whilst there is more to be done, the business enters the second half now with stronger operational control and positive momentum.

Looking at our volume performance in more detail. Group core poultry volumes declined 0.7% versus the prior competing period, albeit with a positive trend through the half returning to growth in quarter 2. In Australia, volumes declined 0.5% with QSR up 9% and wholesale up 4.5%, offsetting the retail channel decline. In New Zealand, the 1.6% decline was largely driven by lower other poultry product sales, which fell 41.5% due to the closure of key export markets. Excluding OPP, New Zealand core volumes increased by 2.7%.

Retail is the story of successful customer diversification with non-Woolworths retail growing strongly at 16.6%. Combined foodservice, wholesale and export volumes increased 3.8% versus PCP with strong Australian food service growth of 11.9% due to increased customer demand. As you can see from the bottom right-hand chart, we can see a clear improvement from Q1 to Q2, and we're expecting this momentum to be maintained in the second half. Turning now to pricing.

Group core poultry NSP increased 1.4% to $6.43 per kilogram. In Australia, core poultry NSP grew 1.1%, while New Zealand NSP increased 4.4% in local currency. Retail NSP increased 1.5%, driven mainly by a favorable mix shift while New Zealand retail pricing increased 3.9% in local currency, driven in part by 11% growth in high-value further processed products. QSR pricing eased slightly, down 1.2%, reflecting the new Nando supply agreement and growth in McDonald's McWings demand, which has a lower price per kilogram.

The standout story here is the wholesale channel recovery. Wholesale pricing recovered strongly, up 4.5% year-on-year with clear week-on-week momentum throughout the half, up 20.9% over the half. Export channel pricing growth was also strong at 20.5% versus PCP, underpinned by solid growth in both Australia and New Zealand as export markets progressively returned to normal operations.

I will now hand to Gary to cover the financials in more detail.

Thanks, Ed, and good morning, everyone. Commencing with our profit and loss on an as-reported basis.

Ed has already outlined the changes in volume, NSP and cost versus PCP. So to summarize, revenue was largely flat at $1.61 billion, down just 0.1% versus PCP. Core poultry revenue was actually higher, up 0.7%, driven by NSP growth across both markets. This increase was offset by lower byproducts revenue, down 5.1% due to lower Australian pricing and a reduction in external feed down 9.9% due to the combined effects of lower volumes and pricing. Total costs grew 5% or $69.7 million versus the PCP due to inflationary effects, the elevated operational costs in our Australian farming, processing and supply chain operations and the AASB 16 impact of the grower contract conversions.

Due to the conversion of 68 growers to variable performance-based contracts over the last 18 months, there has been an increase in as-reported operating costs of $29.5 million versus the prior period. As expected, this has been largely offset by lower AASB 16 depreciation and interest charges.

We saw a benefit from lower feed, with internal feed costs declining $24.9 million versus PCP, reflecting the sustained improvement in market pricing of key feed inputs. Depreciation declined 23.6% due largely to the reduction in AASB 16 depreciation from grower contract conversions. Net finance expense increased 2.9% due to higher average debt balance, partially offset by lower AASB 16 interest. Net profit after tax was $18.1 million, which is down 64.9% versus PCP.

Now turning to the balance sheet. We made significant progress on addressing our inventory levels during the half. Inventories and biologicals declined $24.3 million versus FY '25 year-end. Our targeted inventory reduction initiatives delivered a $27.1 million decrease in processed poultry, including $13.7 million from turkey and $12.7 million from chicken. Feed inventory reduced $4.4 million due to lower feed costs and timing of usage, partially offset by an increase in other inventories of $10.9 million due to higher ingredients and packaging items.

Right-of-use assets decreased $64.8 million or 8%, while lease liabilities reduced by $65.9 million, reflecting the conversion of 68 contract growers to variable performance-based contracts. Net debt increased $35.7 million to $466.1 million, reflecting lower earnings and ongoing capital expenditure. As a result, leverage was 2.4x at the end of the first half, which is above our policy range of 1x to 2x. We expect leverage to trend lower in the coming periods as earnings improve.

Moving now to cash flow performance. Operating cash flow for the half was $134.3 million, down $32.8 million on the prior corresponding period. This reduction was largely driven by lower earnings, though we saw a partial offset from improved working capital. The substantial progress we made in optimizing working capital, mainly through our inventory reduction, resulted in cash conversion improving significantly to 113%, an increase of 18.6 percentage points.

We invested $47.6 million in capital expenditure during the period allocated across 3 categories: $13.6 million in sustaining, $18.9 million in core growth initiatives, and $15.1 million in high-growth opportunities that position us for future expansion. During the half, we paid a fully -- paid a final fully franked FY'25 dividend of $0.08 per share. AASB 16 principal payments decreased as a result of the conversion of contract growers to performance-based variable contracts, which reduced our AASB 16 lease obligations.

Now turning to our capital expenditure. Stay-in-business CapEx was $13.6 million, which is 43.2% of pre-AASB 16 depreciation. While this is nominally lower than previous periods, some of our investment expenditure during the period could be considered to have an SIB element to it. Our growth investment activities continue to focus on automation, strategic infrastructure upgrades, and improved processing capabilities across Australia and New Zealand, all of which is designed to improve earnings quality and resilience over time.

In Australia, the fully cooked capability at Lisarow is now operational, enhancing the group's proposition to key retail and QSR customers. The new Victorian pet food capability is nearing completion and is expected to be operational from April '26, enabling greater value extraction from Offal and OPP as part of a broader strategy to maximize returns from our core protein platform.

In New Zealand, the new QSR 9 cut and DSI capability is fully commissioned and performing to plan. In addition, further retail automation investments, including fixed weight and automated tray packing, will support improved efficiency and retail competitiveness. The Bostock farming expansion is expected to deliver a 20% increase in volume, which will support our future Australian market strategy for the brand. Overall, our capital expenditure continues to reflect a disciplined approach to investing in both operational continuity and strategic growth initiatives.

Leverage at the end of December was 2.4x underlying EBITDA pre-AASB 16, which is above the upper end of our capital management policy range of 1x to 2x. This elevated position reflects 2 factors: lower EBITDA over the trailing 12 months and higher net debt from ongoing capital expenditure programs. We expect leverage to progressively trend down toward our policy range as earnings recover in future periods.

Net debt was $466 million at the end of the period. You can see from the chart that this is the highest level, but it's important to note that our debt facilities are well structured with maturities in November '27 and November '29. Currently have $199 million in committed and undrawn facilities, providing adequate financing capacity.

This slide summarizes our capital management outcomes for the half against our established framework. As outlined in the previous slide, sustaining capital was $13.6 million and investing capital was $34 million. The Board declared a fully franked interim dividend of $0.04 per share, representing a payout ratio of 70% within our target range of 60% to 80% of underlying NPAT. Leverage at 2.4x, as I've noted, is above our target range.

Turning now to the current feed market dynamics. Feed costs are a significant input for our business, and market pricing conditions for our key feed inputs, wheat and soy meal, have continued to be favorable. On soybean, global markets are currently seeing ample supply from major producers. Brazil has emerged as the dominant supplier in 2025-'26 with forecast record production and competitive export pricing. Chinese demand remains a key driver of global soybean trade.

On wheat, global markets are characterized by healthy supply volumes and elevated inventories, with major exporters all reporting strong 2025-'26 harvest. AB's Forecast forecasts an increase in Australian wheat production to approximately 35.6 million tons for 2025-'26, well above the 10-year average, driven by strong yields in Western Australia and the recovery in South Australia and Victoria. The U.S. Department of Agriculture has also raised their global wheat production forecast. You can see from the chart that both wheat and soy prices in Australian dollar terms have moderated from their highs, with our internal feed cost declining $24.9 million in the half versus the PCP.

I'll now hand back to Ed to discuss the segment performance.

Thank you, Gary. In Australia, revenue was broadly flat against the first half of '25. Core poultry volumes were down 0.5%, but underlying that, there was a positive shift. While retail channel growth slowed, we delivered stronger QSR growth, up 9%, reflecting the new business we have won over the past year. Wholesale volume increased 4.5% against the backdrop of significantly improved fundamentals.

Byproducts revenue declined 6.7% due to softer tallow pricing, and our external feed business saw lower revenue on lower volumes, and input cost deflation flowed through to pricing. On costs, total costs increased 6.4%. As Gary noted earlier, we converted further growers to variable performance-based contracts, and this saw Australian operating costs increase $30.8 million, largely offset by lower AASB 16 depreciation and interest costs.

While we also faced some inflationary pressures across labor, ingredients, utilities, and packaging, the key driver was elevated operational costs driven by inventory-related costs, elevated cost to serve as we onboarded new customers, and some transitional supply chain inefficiencies. Stripping these out, underlying cost growth was 3.7%. SG&A increased 11%, largely reflecting the further centralization of group functions we've undertaken, plus some one-off items in the prior corresponding period. Adjusting for one-off items, SG&A declined 1.9%. As Gary noted earlier, our internal feed costs declined on PCP due to lower input prices.

Turning now to New Zealand. Core poultry volumes declined 1.6%, but grew by 2.7% with the exclusion of OPP. External feed volumes declined about 9% following the loss of some customer business in the prior period. Revenue was marginally down as core poultry NSP grew 4.4% in New Zealand dollar terms, largely offsetting the volume decline.

The New Zealand business delivered a 2.5% reduction in total costs versus PCP. Lower international feed input prices drove about $1 million of that improvement, while increases in labor, utilities, freight, and packaging were offset by reductions to repairs and maintenance as well as consulting costs. SG&A declined almost 22%, reflecting the benefits of the centralization of some functions.

I would also note that FX movements reduced our reported EBITDA by approximately $0.8 million in Australian dollar terms versus the PCP. New Zealand remained stable with solid top-line growth driven by brand and enabled by efficient operations.

Turning now to our guidance and our outlook. We are updating our guidance for financial year '26 underlying pre-AASB 16 EBITDA to a range of $180 million to $200 million. This revision reflects the timing of operational recovery. The measures we have been implementing are working, but are taking longer to translate into financial results than we initially anticipated. We now expect the benefits to be more heavily weighted towards the fourth quarter. We are seeing this particularly in [Audio Gap]

Hi, Ed can you hear us? [Audio Gap]

Turning now to our guidance and our outlook. We are updating our guidance for financial year '26 underlying pre-AASB 16 EBITDA to a range of $180 million to $200 million. This revision reflects the timing of operational recovery. The measures we have been implementing are working, but are taking longer to translate into financial results than we initially anticipated. We now expect the benefits to be more heavily weighted towards the fourth quarter. We're seeing this particularly in supply chain and logistics performance. The flat first-half performance for the New Zealand business has also contributed to the revised outlook.

I want to emphasize that the fundamentals of our business are strengthening. The improved inventory position has enabled a return to normal production settings, which is supporting improved unit costs. We have clear actions in place to reduce supply chain costs, and targeted operational initiatives are underway. This implies a materially stronger second-half performance relative to the first.

While the first half is disappointing, our return to positive top-line growth and improved operational foundations means that we are well positioned for improved earnings momentum into financial year '27. We are focused on restoring unit cost discipline, improving return on capital, and strengthening cash generation. That concludes the formal presentation.

I will now hand back to the operator, and we'll take your questions. Thank you.

[Operator Instructions] Our first question comes from Richard Barwick from CLSA.

My question is focusing on the change in the guidance. I just want to go right to the point where you're talking about the operational improvements taking -- they're working, but they're taking longer. Can you sort of step through that exactly? Because I mean, the delta we're talking, midpoint to midpoint, is about $30 million. So, it's a pretty material downgrade to the way you're thinking about your underlying EBITDA. So yes, what has -- if it's working but taking longer, can you sort of provide a little bit more of a framework around that so the way we think about it --so we can have some a bit more confidence as we move into '27?

Yes, sure. Thank you, Richard. I mean, look, at some point, I suppose, I'd say -- as I said, the downgrade largely reflects on as a result -- as opposed to a deterioration in trading condition more holistically. And I think that if I think about it, the supply chain inefficiencies in particular are things that when we provided previous guidance to the market, we assumed that they would have improved by the start of quarter 3. And it certainly feels like that will push on into quarter 4. And I think that will make sense. I think as we've -- as we've talked in length, I think the business has been very successful at diversifying our customer portfolio. We've seen non-Woolworths retail growth of 16%, QSR growth of 8%. And that ultimately has resulted in a fair bit of additional complexity within our supply chain and logistics area of the business. So I'd say that's the sort of biggest area as it relates to a change in the guidance provided.

The second is just some continuation, I suppose, of inefficiencies that have been previously called out. We assumed that farming performance would be back on track by now. That's improving, but improving at a lesser rate than what we previously assumed. And then finally, the transition of value enhanced from our major primary processing sites to Ingleburn is simply taking longer to get up to efficient operations. So I'd say those are the three big areas that have resulted in the adjustment of guidance provided. As I said, I think positively we do now have the inventory under control and therefore, a return to normal production settings and so we have seen from quarter 3 an immediate improvement in unit cost.

And then -- so just the way you're thinking about the operating environment. So the volume -- from a volume perspective, are you seeing that things are playing out more or less the way that you had anticipated? There's no negative or a slower recovery in volumes than you're expecting?

No. I'd say I think the business has performed very strongly from a volume perspective, Richard. I think -- I mean, if anything, we're probably slightly exceeding our expectations where volume is concerned. And you can see through the graphs provided in the presentation, that across the second half, we're seeing a return to historical volume growth of between that sort of 2.5% to 3.5%. So volume continues to perform strongly. And as said, I think underlying market fundamentals, including wholesale economics also continue to perform strongly.

Our next question comes from Ajay Mariswamy from Macquarie.

My question is around the --that cost out program that you talked to around it being $60 million to $80 million coming out over the coming year. And in terms of that downgrade that you put through, which to Richard's point, is about $30 million. Should we expect that to be a step-up in the first half of '27? Or how should we think about the shape of that?

Firstly, I'd say look, in relation to the cost out program as we sort of said in the presentation, that broadly remains on track. I'd say, as we hit the end of the half, across continuous improvement, procurement as well as changes to organizational structures, we've removed about $40 million of cost from the business and therefore, remain on track to deliver the $60 -- to $80 million for the full year.

The reality is that is more than being offset by a combination of embedded inflation, which once adjusted for feed as well as other operating costs sits at around 3.5% as well as the operational efficiencies related to inventory and supply chain management. So I look at it more as I think as the half progresses day-to-day, that those operational efficiencies become normalized and therefore, we get more into the cost impulse that you see of the business is just far lower than what we're going through at the moment, which is largely a stabilization period as we've diversified the customer base.

Got it. And then just secondly, in terms of the demand side of things in terms of tendering, can you give us some color around -- so we saw that Nando's win in terms of QSR side of things. On the retail side of things, how are things tracking? And outside of price, how else are you looking to be more competitive outside of price alone?

Yes. Look, good question. I mean I'd say they're tracking very strongly. If I go quite specifically to the point, I think there's been concerns raised across the market around Ingham's ability to both win business as well as fully offset the impacts from the Woolworths transition. And I'd say, if anything, what this result shows us is that, that is factually correct, and it's reflected by the fact that across Coles, ALDI, and Metcash, our portfolio has grown on average by 17% and also reflected by the growth of 9% through our QSR customers.

In terms of competing on non-price-related sort of variables, I think what we bring to the table is this sort of diversified network that allows for good customer service levels which customers have said is one of their most important priorities. I think as a business, we've always prided ourselves on being leaders as it relates to quality and animal welfare. And I think increasingly, we're thinking about the role of consumer insights and category insights as a basis through which we can grow the category in partnership with our customers. And the feedback that we're getting and which is reflected in both the Advantage survey results as well as our internal voice of customer surveys is that customers as well are genuinely valuing those aspects of our value proposition and it becomes a big basis for how we win outside of just price alone, which obviously has to remain competitive.

And our next question comes from Ben Gilbert from Jarden.

Maybe just one for Gary, just on balance sheet. Where do you see -- do you see net debt ending the year up on where it is at the moment? And I'm just thinking around the path to that sort of leverage ratio. You sort of talked to it coming down. Is there any color you can give us around covenants or how the discussions around the banks are just interested sort of through those points, please?

So covenants are well above our guided 1% to 2% and well above our current levels. So conversations with the banks have been good. In regard to net debt, we do expect that will be lower from the end of the year. And with higher earnings, you will see a reduction in leverage, may still be above the two, but we do see it trending down and see it continuing to trend down into future periods.

And then just second one from me. Just interested around the SG&A side of things as well in terms of if we strip out the one-offs, what were the actual cost reductions in SG&A for one-off in the first half?

Yes. Look, Ben, the big drivers of the SG&A reduction in the first half was the operational restructure that we did and talked about at the AGM, and I think we've signposted it as $8 million to $10 million, and that is flowing through in terms of SG&A reductions, and that was largely a delayering, I suppose, a delayering of the business. From a New Zealand perspective, the key reductions came from, firstly, on a reported basis, the centralization of activities, but then within that geography, the reduction in repairs and maintenance as well as consulting cost.

Our next question comes from Craig Woolford from MST Marquee.

Just I'm going to use Slide 28, just to ask a question around the SG&A. I'm using the underlying pre-AASB figures. You've got distribution expenses and admin expenses. They've still grown quite materially, like up 8% and 12% or circa $18 million increase and yet you'd have some cost out. Like what's creating such inflation in those two cost items to that extent?

Yes. Look, from a distribution--in terms of distribution expense, I'd say there's two big drivers that we've partially dealt with through the first half, and there's probably a more structural element as we look forward. The first as it relates to the first half is that with the excess inventory, we've had to incur increased distribution expense, both in relation to third-party warehouse, but also in relation to our warehouses being totally full of product. And therefore, there's inefficiencies as it relates to product movement. Importantly, now that's now 80% of total utilization, so you can get back into efficient operations.

I think the more structural one is that with customer diversification, what we're seeing is effectively a combination of both customer and SKU proliferation. And all our customers have sort of different ordering times, different ordering windows, different [type of] expectations. And that certainly created some complexity, which is taking some getting used to. And so how it manifests itself within the P&L is that we're having to do more runbacks, et cetera, and more trucking to deliver to our customers' service level requirements. And that's really the big driver, I suppose, of that inflation.

I do think that once we've got -- we're back in growth and we've got stability and all the big leaps in new business by and large have been onboarded, there's now an opportunity to stabilize the operation, get back to optimize fresh inventory levels. And at that point in time, we should be able to materially reduce the unit cost of distribution.

Back on the early slide that we had in the key drivers, I think it was around Page 7, the waterfall chart, there's $9 million of one-offs labeled on that chart. So that's in SG&A. So it's pretty flat SG&A. It's really the cost reductions that Ed's been talking about happened during the period, and that's being offset probably by inflation at the moment. So we'll see -- expect to see that to drop in the second half.

What were -- what were those one-off items?

So in the prior year, FY -- first half FY '27. So there was sort of some settlements that we had on some commercial matters that we had in that period of time and some releases of provisions last year.

So it's a benefit in the PCP --

Benefit in the PCP -- and then yes, the net is $9 million.

Okay. And then just clarifying the supply -- you talked about supply chain inefficiencies as one of the issues around the downgrade [indiscernible]. Just to be clear, like is this because there's still an imbalance between production and demand? Or is it some other supply chain inefficiency?

No. Look, I'd say our supply demand is very balanced at the moment, Craig. And in fact, I'd say there's very strong demand out in the market. The supply chain inefficiency is just the incremental complexity that customer diversification has ultimately created within our supply chain. And I think it's fair to say that it's an area of the business as well where we can afford to work on how we become more disciplined such that we can continue to provide very good service through to the customers whilst at the same time, managing cost to serve.

I genuinely feel like within the first half, in some ways, we had a perfect storm of warehouses full of inventory, coupled with a lot of new customers and products coming online, which just related to complexity that ultimately led to a massive uptick as it relates to supply chain costs. And that's what I mean. There's an element of that, but it's definitely temporary, and we'll be able to manage it through improved processes as well as the inventory reduction. There will be a slight element of it as well, which is slightly more structural. But whatever way you turn it, we need to improve or turn our focus to how we make sure that that's an efficient part of the supply chain.

And Craig, just to be clear, so there was some imbalances during the half, especially early in the half. But I think Ed was talking about as of now, we feel like we're back in balance.

And our next question comes from Evan Karatzas from UBS.

Just with the restructuring cost, the $60 million to $80 million, how much will the one-off restructuring cash costs be in the second half that you'll have to pay? Like correct me if I'm wrong, but it looks like it was only $4.5 million in the first half, which just feels a bit light for that scale of cost out program.

So there won't be a huge amount in the second half. So a lot of it is around continuous improvement procurement savings. So yes, a lot of that sort of one-off cash costs we've already incurred in the first half. So there will be some in the second half, but probably not as much as the first half.

Okay. All right. Fair enough. And then just sort of coming to the industry supply-demand situation. Can you just give an idea of how you're seeing this as we get to Jan and Feb and how you're seeing any potential changes to supply as well over the next 12 months?

Sorry, Evan, was that a question -- we just dropped out for a second. Was that a question in relation to the [Baiada] plant?

Yes, sure. And any other changes to the supply you're seeing? [indiscernible] I just want to understand the industry supply-demand situation, how you're seeing this through Jan and Feb as well and any potential changes to supply over the next 12 months across the industry?

Yes. Look, I mean as it relates to -- through Jan and Feb, the market has remained very tight. And I think what we've seen, obviously, with the increase in CPI and therefore increasing pressure at some level on cost of living across Australia, I think we should expect for that demand tailwind to continue as it relates to poultry. And I think really pleasingly, we are seeing growth across all our channels, notwithstanding the Woolworths change.

Look, as it relates to changes in the industry, our understanding is there will not be a significant impact within this financial year as it relates to new volume coming on board. It's obviously an area that we're watching. But I think as it relates right now, we've got good stability as it relates to our customer agreements.

And our next question comes from Jonathan Snape from Bell Potter.

Look, I just want to get a head around -- I'm looking at this slide of the Australian business as a reference point. I guess, what the one-off costs or the full impact of this inventory reduction, supply chain inefficiencies and all that sort of stuff was. It looks like it was about $30 million in the first half, like if I just look at the comments you made around what the cost would have been if it didn't have it in there. So is it right to kind of assume that maybe they were highest in 1 quarter, unwound a little bit in 2Q, unwinding a little bit more in 3Q and then kind of gone by 4Q, not there next year. And we should be seeing that $8 million to $10 million flow through in fourth quarter with a run rate full realization in 2027. Is that kind of how you would think about it and how you kind of bridge the improved second half?

Yes, exactly, John, I think that's really neatly put. I think -- probably the one caveat that I'd say is I genuinely think that the supply chain costs that we've called out, there's an element of temporary and there is an element of structural as it relates to those costs in particular in terms of -- it's probably the only one where the profile was slightly different. And in fact, we saw an uptick in Q2 as more complexity came on board with the customer diversification.

But very broadly speaking, that's exactly how we look at it. This is a transition year for Inghams. It's a stabilization year for Inghams. We genuinely look at ourselves as having strong foundations and a good -- hopefully, a very strong run rate entering FY '27.

Okay. And I guess the follow-on on this is, if I looked at that waterfall you had on Slide 7, which kind of itemizes it all down. And then kind of look like at Slide 9. In terms of the -- I just want to make sure I'm not double counting something here. In the first quarter, obviously, the volumes are down 4 million or 5 million [indiscernible] 1,000 tons, 4,000 tons or 5,000 tons probably looks a bit. And it looks like the run rate is going to kind of get all that back as we get into '25 or most of it. Is there an impact in that little chart up there that kind of counts in, I guess, the lost sales in that period?

Within the -- yes, I mean, I suppose -- the waterfall.

It's in there.

Yes. I mean, look, there's a group revenue at the far right of that waterfall, which talks to a negative $1 million. I think it's fair to say if you think about when the first tranche of the Woolworths adjustment happened, Jo was at the end of quarter 1. So there's definitely a sort of materiality of lost sales that we sit in there. It's not called out in any material sense. But we've got the negative $1 million there. I think it's fair to say our top line performance improved as the half progressed. And therefore, you can say, yes, I suppose.

Thank you. And our next question is a text question from Adam Olstein, private investor. Adam asks, can you please elaborate on the status of the non-stay-in-business CapEx and expected direction of this in the second half?

Thanks, Adam. I feel overall, we had CapEx of $46 million in the first half, and I suspect that will be a bit lower in the second half. There was a number of multiyear projects that carried over into the first half. So in total, I think it will be down a little bit. And I think the proportion of that of SIB will be a bit higher in the second half as well. So the sort of the overall sort of 40s percent of depreciation, I expect to return more to that normal 75% to 90% range.

And our next question is another text question from Chris Joyce, also a private investor. Chris asks, processed inventory reduced by $27.1 million and seems to have been accompanied by an EBITDA loss of $19 million. In essence, an NRV of only 30% versus the previously capitalized value. What was the realized -- why was the realized price so poor or low?

So there are probably two different things, although I can see why they're trying to be connected. So partly in reducing that inventory did drive that $19 million, for example, we needed to reduce the amount of birds that we were growing in the field and processing less processing through the plant. Therefore, you have a lower fixed cost recovery. We had some downgrade of material. So some products produced for render rather than for a higher value. So it's not that, that $19 million is a loss on sale or an NRV, it's costs that are associated with having an imbalance in supply.

By taking those actions, it allowed us to reduce our inventory, and it was then done at unprofitable prices as a result of that, of which you can see from the NSP increase, also the improvement in the wholesale market. So market economics are quite strong. So a complicated answer. I hope that answered the question, Chris.

And our next question is another text question from Victor Yan from Wavestone. Victor asks, can I ask any change in the competitive environment with Baiada Tamworth volumes coming online from April 2026? Are customers preempting this dynamic in tender conversations? And what is Ingham's response strategy? Also, do you have any view on Baiada's unit cost on chicken from the Tamworth plant benchmarked versus Ingham's cost position?

Yes. Thanks for the question. I mean shorter answer is no, we're not seeing any change in either competitor dynamics and/or conversations with customers. I think as I said earlier, our focus from Ingham's perspective is on how do we, in a material way, enhance our value proposition over time to customers. And from our perspective, we see our network as a point of competitive advantage because we can provide localized service and good customer service levels at a low cost. We see ourselves as being the market leaders in quality and welfare and sustainability and we think that through investment in consumer insights and category over time, that in turn makes us the value leaders in terms of the perceived value within the market.

And I think very positively, as it's called out within the document, our voice of customer results reflect that -- plus the customer results reflect that and indeed, the growth of the top line from a volume perspective and new customers brought on board also reflect that. So short answer is no but we obviously have line of sight as to relation to competitive dynamics and unit costs. Our focus remains heavily on our operation, on our value proposition and how we continue to enhance it over time.

Thank you. And our next question comes from Lila A., a private investor. Lila asks, what are your top three business risks for the next 6 to 12 months? Thank you.

Thanks, Lila. I mean, look, there's -- and let me think about that. I suppose if I think purely in relation to earnings, we need to focus on the pace and speed of operational improvement. And obviously, that was the basis for the guidance that's now being provided or the updated guidance that's been provided. But one is the pace of operational improvement. We're very aware that, that needs to improve.

I'd say the other material risk is the kind of key variables of our business is feed cost, which I'd say is low risk over the next six months just in terms of due to our procurement policy. But certainly, wholesale pricing, we're very aware that the foundations or the economics of wholesale are currently strong and therefore, as a major player within the market, we need to play our role in terms of ensuring that those economics remain somewhat strong.

And look, they're probably the two ones that I'm most focused on. Obviously, there's changes that our competitors are investing behind, as was called out in the previous question. That certainly remains a risk, but it's something that we feel like we're increasingly bringing a very strong answer to the pace.

Thank you. As there are no further questions now, I'll hand back to Ed to close the meeting.

Brilliant. Thanks very much [indiscernible]. Look, on behalf of the management team, I'd like to thank everyone for joining us today, and we look forward to meeting with many of you over the coming weeks. Thank you very much.

Good morning, everyone. Good morning, good morning, and welcome. I've got the green light, Brett. Excellent. Okay. Good morning. My name is Helen Nash, the Chair of Inghams Group Limited.

On behalf of the Board, the management team and all of our staff, I'd like to welcome you to our 2025 Annual General Meeting. It is now 10:00, I think a little bit past. And as we have a quorum present, I declare the 2025 Annual General Meeting of Inghams Group Limited open.

On behalf of Inghams, I would like to acknowledge the Gadigal people of the Eora Nation on whose land we meet today. I pay my respects to their elders, past and present and to any Aboriginal and Torres Strait Islander peoples joining us here today.

To briefly outline the agenda for today's meeting, I will give my Chair's address. Your Chief Executive Officer and Managing Director, Ed Alexander, will then give his address, and I will then move to the formal items of business and resolutions as set out in our notice of meeting. Following this, we will open the meeting to general business and questions.

This year's meeting is being held as a hybrid meeting, and a guide to the online meeting platform has been made available on the Investor Center on our website. Voting today will be conducted by way of a poll on all items of business. For our shareholders attending virtually and eligible to vote, once voting opens, you can select the Vote icon and all your resolutions will be activated with voting options.

To cast your vote, simply select one of the options and your vote will be automatically recorded. You are able to amend your vote up until the time I declare the meeting closed. For those attending the meeting in person and eligible to vote, you should have received a blue voting card at registration. If you believe you're entitled to vote and have not received the correct voting card, please see Computershare staff at the registration table. To cast your vote, simply complete and sign the back of the card. A Computershare representative will collect your voting card at the end of the meeting. I'll provide a notification at the end of all items of business before I move to closing voting.

If we experience technical difficulties in the broadcasting of the AGM to shareholders, we will pause the meeting and aim to recommence it at the earliest opportunity. If these difficulties persist, I will assess the circumstances and then communicate further with you. If we take steps to adjourn the meeting, we'll make an announcement to the ASX with all relevant details.

Computershare is the returning officer for this meeting, and the final results will be released to the market on the Inghams website later today.

I now declare the meeting and voting open.

How to ask a question. For our shareholders attending in person, those in possession of either a blue voting card or a yellow nonvoting card are welcome to ask questions, while those with a white visitor card are not able to ask questions during the meeting. If you believe you've not received the right card, please go to the registration desk where Computershare will assist you. We have placed microphones towards the front of the room. If you have a question on a relevant item of business, please proceed to one of the microphones. I will indicate when we're ready to take your question, at which time, please introduce yourself and ask your question.

Virtual attendees can submit questions at any time. To do so, please select the Q&A icon at the top of the screen. select the topic your question relates to from the drop-down list and then type your question into the text box. Once finished, please press the send button. I will address questions during the discussion about the relevant items of business. Please note that your questions may be moderated or if we receive multiple questions on the same topic, similar questions may be amalgamated.

For those shareholders who wish to ask a verbal question via the telephone line, please follow the instructions below the broadcast. We will make every attempt to answer all your questions today. I would like to thank shareholders who submitted questions in advance of today's AGM. These questions have been reviewed and will be addressed at the appropriate point during the meeting. If time constraints prevent us from doing this, responses to unanswered questions will be posted in the Investor center after the meeting.

I'd like to introduce you to your other Board members here today. Starting from my immediate right, we have Chief Executive Officer and Managing Director, Ed Alexander. Then we have Non-Executive Director, Linda Bardo Nicholls AO; Non-Executive Director, Rob Gordon, who is standing for reelection today. You'll hear from Rob later; Non-Executive Director and Chair of the Risk and Sustainability Committee, Margie Haseltine; Non-Executive Director and Chair of the Finance and Audit Committee, Mike Ihlein; and Non-Executive Director and Chair of the People and Remuneration Committee, Timothy Longstaff, who is also standing for reelection today, and you will hear from Tim later.

Our newly refreshed executive leadership team are seated in the front row. Many over there, also some in the front here, and Ed will introduce you to each of them in his address.

We also have KPMG partner, Trent Duvall, representing our external auditor in the front row. Trent will be available during the formal items of business to respond to questions relevant to the conduct of the audit and the preparation and the content of the independent auditor's report. Thank you, Trent.

Turning now to my presentation. Fellow shareholders, FY '25 was a year of stable financial results and measured progress for our company as we navigated through a challenging operating environment. While we delivered underlying EBITDA pre-AASB 16 of $236.4 million, which was slightly above the prior year's record results, it was disappointing to see a weaker earnings trend develop in the final quarter. This was caused by the effect of higher production settings and lower expected volumes following the Woolworths supply agreement renewal and as a result, some temporary production inefficiencies resulting in higher unit costs and inventories.

Statutory net profit after tax of $97.2 million was 2.9% lower than the prior year. As a result, we declared or paid dividends in respect of FY '25 of $0.19 per share, $0.01 per share lower than the prior year, representing a payout ratio of 72.7%.

The FY '25 results reflected a challenging macroeconomic environment, marked by persistent inflationary pressures and the impacts of the renewal of the Woolworths supply agreement and evolving consumer behaviors.

We continued our focus on delivering our strategic agenda and investing in important growth initiatives. The successful completion of the Bostock Brothers acquisitions in New Zealand strengthened our position in that market, while our processing network investment program across Australia and New Zealand is well underway.

The release of our softer-than-expected FY '26 earnings outlook in August has been reflected in our share price, which has declined approximately 33% since that time. The outlook reflects the impact of the Woolworths supply agreement renewal, a roll forward of the challenging market conditions that emerged in the fourth quarter of FY '25 and specific operational cost pressures across inventory management, farming and processing performance and our turkey operations. I acknowledge that these issues and the performance of our share price are deeply disappointing for all shareholders. And I want to assure you that your Board and management team are responding with urgency and discipline through a range of measures, which are expected to position the company for stronger performance in the second half of FY '26 and beyond.

Safety is integral to the way we operate and the safety of our teams, contractors and visitors plays a key role in our success. I am pleased to report that the company achieved a further improvement in safety performance during FY '25. The total recordable injury frequency rate improved by 3.6% from the prior year, exceeding our target of a 3% improvement. Over the last six years, there's been a total improvement of 57% in this key safety measure, reflecting the company's comprehensive approach to workplace health and safety and creating a safer environment for all of our people.

Our commitment to sustainable practices has also supported measurable improvements in our environmental impact. We have maintained 100% RSPCA approved and SPCA certified accreditations across all our broiler farming facilities, and we achieved an average global food safety initiative BRC rating of A or better with 80% of our sites earning AA ratings. We achieved a significantly -- a significant sustainability milestone during the year with our New Zealand operations moving to 100% renewable electricity. The 20-year agreement to supply New Zealand operations with electricity from solar farms provides Inghams with a competitive long-term electricity pricing, enabling us to meet our sustainability goals without significant upfront capital costs.

In Australia, we achieved our climate active carbon-neutral certification for our Marion Bay chicken brand, making this Australia's first carbon-neutral certified chicken brand. We also exceeded our 50% recycled content packaging target, achieved 28% waste intensity reduction and reduced our water intensity by 2.7%. For those who are interested in reading more about our initiatives and results, our updated sustainability report in our 2025 annual report is a valuable resource.

At the end of FY '25, Andrew Reeves retired as Chief Executive Officer and Managing Director. Andrew made a tremendous contribution to Inghams after coming into the role from his position as a Non-Executive Director on the Board. He led the company for over four years through a significant period in its history, including unprecedented challenges posed by the global pandemic. He successfully stabilized our operations and delivered significant growth in profitability over that time. Andrew also contributed strongly to the culture of the business. And as a keen developer of executive talent, he was instrumental in building organizational capability and capacity. On behalf of the Board, I thank Andrew for his significant contribution to Inghams' success and wish him well in his future endeavors.

Following a robust global search process, the Board was delighted to appoint Ed Alexander as our new CEO and Managing Director. Ed's appointment exemplifies Andrew's successful focus on nurturing internal leadership talent. Ed brings a deep knowledge of our business from his 10-plus years with Inghams, most recently as Chief Executive in New Zealand, where he delivered outstanding results doubling EBITDA between FY '22 and FY '24, achieving significant gains in customer partnerships and reducing employee turnover through a systematic focus on people, partnerships and innovation. You will hear from Ed shortly.

Aside from our CEO transition, there were no changes to the composition or membership of the Board during FY '25. We were very pleased to welcome Rob Gordon back to Board duties following his approved medical leave of absence at the beginning of FY '25.

At this year's AGM, pursuant to the ASX listing rules and the company's constitution, both Rob and Tim are standing for reelection. You will hear from them both as in their reelection resolutions a little later.

Turning now to a review of remuneration, starting with the FY '25 outcomes. and starting with our short-term incentive plan or STIP. Payments under this plan are conditional on the achievement of performance objectives against a key financial measure, three nonfinancial ESG measures and the individual's overall performance in contributing to the achievement of our group strategic objectives. The financial performance measure is underlying pre-AASB 16 EBITDA, representing 70% of the STIP scorecard. Based on overall company performance, the balanced scorecard outcome in FY '25 was 69.5 out of a total of 120, resulting in 57.9% of maximum. This outcome reflects a below target financial performance, partially offset by strong outcomes across all three ESG measures.

For KMP, our former CEO achieved an initial STIP outcome of 46.3% of maximum based on the scorecard result and his 100% individual multiplier. The Board determined that it was appropriate to apply downward discretion to reduce the former CEO's FY '25 STIP outcome by 35%, primarily as a result of the weaker FY '26 outlook due to the volume reduction from the New Woolworths supply agreement. This resulted in a final SIP outcome for Andrew Reeves of 30.1% of maximum. Our CFO, Gary Mallett, achieved a STIP outcome of 41.7% of maximum, which also included a downward discretion of 10%. Downward adjustments were also made to the remuneration outcomes of several other executives.

For the long-term incentive plan, or LTIP, the vesting for the FY '23 to FY '25 plan was 91.05%. The performance of the company on the relative total shareholder return measure was at the 72nd percentile, which resulted in 93.4% of rights vesting for 50% of the LTIP scorecard. The return on invested capital measure was 19.6% in FY '25, resulting in a vesting level of 88.71% for the remaining 50% of the LTIP scorecard. Following the company's FY '25 results, the absolute total shareholder return was calculated for the 2022 one-off performance rights grant to the then CEO, Andrew Reeves; and CFO, Gary Mallett, as approved by shareholders at the 2022 AGM. Due to the significant share price decline after the release of our FY '25 results, the total shareholder return outcome resulting in -- resulted in this award vesting at 0%.

On Board remuneration in FY '25, there was a benchmarking process undertaken to review the Board fee structure. As a result of this review, the Board determined there would be no increase in nonexecutive director Board fees. More results -- more details on nonexecutive director remuneration can be found starting on Page 71 of the 2025 annual report.

As keen followers of the company have previously heard me note, Inghams' remuneration strategy and structure is designed to support our purpose, ambition, values and behaviors with incentives to create value for our shareholders, customers and the community over the short, medium and long term. The performance-based elements include an equity component, which is designed to foster a business ownership approach.

Total fixed remuneration is reviewed annually with each review considering a variety of factors such as comparable market rates, responsibilities and experience in the role, business impact and the recognition of desired behaviors. The announcement on the 4th of December last year of Ed's appointment as Inghams' new CEO and MD included disclosure of his remuneration arrangements. I would like to note that Ed's remuneration arrangements for FY '26 are lower than those of our former CEO and MD. There was no change to the FY '26 total fixed remuneration for our CFO, Gary Mallett.

During FY '25, the Board carried out a review of both the short- and long-term incentive plans. This work is detailed more fully in the remuneration report, which forms part of our annual report. The basic structure of the FY '26 short-term incentive plan remains unchanged with a 70-30 mix between financial and nonfinancial measures -- financial and nonfinancial measures, the nonfinancial measures emphasizing the importance of ESG to our business.

While the people safety and food safety measures remain unchanged, we are altering the water usage measure from water consumption to a water withdrawn measure. This change provides a better measure of our environmental impact by capturing the total demand we place on local water sources, recognizing the capital outlays on water treatment and reclamation and aligns with our sustainability-linked loan measure.

For our long-term incentive plan, the FY '26 to '28 structure also remains unchanged from the prior year being based on two equally weighted performance measures of underlying pre-AASB 16 based return on invested capital and relative total shareholder return. This mix of performance measures seeks to achieve the close alignment of our executives with shareholders as indicated by the strong shareholder support it has previously received.

The FY '26 to '28 ROIC measure has a lower threshold and maximum levels than prior years. The levels set by our Board reflect both the earnings forecast outlined in our FY '26 earnings guidance and an upward trend in capital employed as Inghams invests in the refurbishment, efficiency and expansion of its production capacity. The Board acknowledges that while the ROIC hurdles for FY '26 to '28 have been lowered due to both an increase in capital employed and a softer earnings outlook, the company is still investing above its weighted average cost of capital, and the Board remains focused on ensuring future targets align -- continue to align with shareholder value creation beyond FY '26.

I would also like to emphasize the fact that the Board has set the plan hurdles with greater emphasis on stretch outcomes.

Overall, the Board is committed to ensuring the remuneration strategy reflects good governance and is transparent in its design to support the business strategy and drive sustainable outperformance for shareholders over the short, medium and long term. For those who wish to read more, the remuneration report starts on Page 50 of the 2025 annual report.

As we look ahead, the poultry sector remains an attractive and growing one, underpinned by several significant advantages, including a price advantage and well-established health benefits over red meat.

We have work to do to restore the operational, financial and therefore, share price performance of the business. And I want to assure you that we're responding with urgency and discipline. Your Board has complete confidence in our new CEO and the refreshed leadership team now in place across the business. The depth of experience they bring, combined with the fresh perspectives and renewed energy that is evident throughout the business positions us very well to address the challenges that we currently face and capitalize on the opportunities that lie ahead. The Board looks forward to working closely with them as they build momentum across our operations and deliver on our collective ambitions for the company. and I really look forward to being able to present an improved picture and outlook to you next year.

I will now hand over to your Chief Executive Officer and Managing Director, Ed Alexander, to take you through more of the detail that underpins our business and performance. Thank you, Ed.

Thank you, Helen, and good morning, everyone. It's great to be here with you today as Inghams Chief Executive Officer, and I want to start by adding my welcome to you all, whether you're joining online or in person.

Inghams is the largest integrated poultry producer operating across Australia and New Zealand, and our diverse network provides us with important and real advantage. Our national network means that we can manage biosecurity risk, we can ensure great service to our customers, and we can efficiently and effectively service every major retail and food service channel with confidence.

Because we are vertically integrated from feed milling and farming through to production and distribution, we have control over every step of the production process. That control means that we can manage quality and cost, and we can keep the right balance between supply and demand. When we get this balance right and we pair it with operational excellence, we grow returns sustainably over time.

As Helen noted earlier, Inghams delivered solid financial results in FY '25. It showed the strength and resilience of our business even in a tough market and through a period of significant change.

FY '25 was a tale of two markets. Group core poultry volumes were down 1.4%, driven by a decline in Australian volumes, partially offset by strong growth through New Zealand, which was aided by the strong retail channel performance as well as the Bostock Brothers acquisition. Group revenue totaled $3.15 billion, which was slightly lower than FY '24 and in line with our volume performance. EBITDA pre-AASB 16 was $236.4 million, slightly above the prior corresponding period and representing a solid performance despite market conditions in Australia in the final quarter.

In Australia, cost of living pressures and changes to the Woolworths supply agreement created headwinds. But we've made real progress, broadening our customer base, and that's something we'll continue to build upon. In New Zealand, the story was different. The turnaround there has been strong with stable operations, great brand performance and the Bostock acquisition, all combining to drive volume and earnings growth. Underlying net profit post-AASB 16 was $97.2 million, down 2.9% on the prior corresponding period, and we paid total dividends of $0.19, which was slightly below the $0.20 paid in FY '25 and representing a healthy payout ratio of just over 72%.

As Helen mentioned earlier, the softer-than-expected FY '26 outlook we released in August has clearly had an impact on our share price. That outlook was shaped by a slower FY '25 exit run rate, weaker wholesale economics and some temporary production inefficiencies as we work through frozen excess inventory and adjusted down our production settings. The company has initiatives in place to address the above issues, and I'll discuss current trading and our outlook in more detail shortly.

Since stepping into the role of CEO in July of this year, I've spent time examining how we're structured and how we operate as a business. In a market that's moving as quickly as ours, it's essential that we're organized for speed, accountability, productivity and growth. Through that review, it became clear that we needed to reshape our operating model and refresh our leadership team to set the business up for its next era.

That work started in June of this year with the appointment of Caroline Hays as Inghams' new Chief Growth Officer. Caroline joined Inghams in 2020 as General Manager, Procurement before being appointed General Manager, Sales and Marketing in New Zealand in 2022. In 2023, her remit was expanded to include both New Zealand strategy as well as the newly acquired Bostock Brothers business. Caroline has delivered results in every facet of remit from delivering top line growth to revitalizing the Inghams and Waitoa brands in New Zealand to successfully integrating Bostock Brothers. As Chief Growth Officer, Caroline will lead our growth agenda across both countries, driving innovation, building our brands and finding new ways to create new value.

In September, Clair Stevenson was appointed to the role of Chief Customer Officer, replacing Mark Power. Since joining Inghams in January 2023, Clair has unified our retail channel into a truly customer-focused team and amplified the voice of the customer right across the organization. In the most recent Advantage survey report, Inghams was the top-rated poultry supplier as voted on by our retail partners. Whilst this is certainly reflective of an organization that has become more customer-centric, it is also reflective of everything that Clair brings to the table. With a track record of building partnerships and driving commercial outcomes, I have every confidence that Clair will do a wonderful job in leading the sales team forward.

More recently, in October, we made further changes to strengthen our Australian operations, moving from a single centralized operational function to three focused and flatter divisions. This shift gives us a sharper accountability, faster decision-making and strong line of sight from farming through to customer.

Susy Klein was appointed Group Executive Agribusiness and Operations Enablement with three decades of Inghams' experience and deep operational expertise, Susy now leads the critical bookends of our supply chain from feedmill and farming through to warehousing and distribution. She also oversees the cross-functional processes that drive operational excellence right across the business.

Jacinda Blair was appointed Group Executive Primary Processing and Ingredients. With over 17 years' experience, Jacinda brings a proven combination of operational know-how and commercial acumen as well as people leadership. Her focus is on unlocking productivity in our core business and capturing new value from ingredients and byproduct.

Dave West was appointed Group Executive, Value-add in Turkey. Dave has more than 8 years with Inghams and over 15 years leading operations across FMCG and agriculture. He will lead the expansion of our value-added and convenience portfolio, building products that create distinctive value for customers and consumers alike.

And finally, Adrian Wilson joins the executive leadership team in the role of Group Executive, Enterprise Alignment and Corporate Affairs. In this role, Adrian will be responsible for ensuring we're focused and aligned as one enterprise, sharpening how we set priorities, strengthening systems and processes that allow us to deliver. His remit also includes communications and external relations, ensuring that the way we engage, both inside and outside the business, reflects a consistent and compelling Inghams story.

Together, these changes make us flatter, faster and more connected. with clearer accountability and decisions being made closer to where the action actually happens. It is my belief that these changes to our leadership team structure will result in a more predictable business that can deliver reliable returns to shareholders over time.

Moving now to an update on current trading. I'm pleased to report that market fundamentals have underpinned volume, pricing and revenue tracking in line or ahead of the outlook that we shared in August. On volumes, we've seen stabilization across the group with core poultry volumes up 0.8% compared to our FY '25 exit run rate. This is particularly encouraging given the Woolworths volume reduction that took effect in FY '25. Pleasingly, non-Woolworths retail sales have grown by 16.5%, and we have seen solid growth in QSR, which is up 8.6%. This reflects a business that is not only as competitive as ever, but also focused on delivering sustainable growth.

Pricing is improving as well, with core poultry net selling prices up 1.5% compared to our FY '25 exit run rate. Importantly, our Australian wholesale margins have improved materially, up 39% versus full year 2025. However, we have experienced operational challenges in the first half of financial year '26.

In our farming operations, we've seen higher egg costs due to our decision to reduce volume in late FY '25 and below target feed conversion rates flowing through from late FY '25 into the first quarter of this financial year. These issues have impacted our cost base more than anticipated.

We've also experienced temporary supply chain inefficiencies in our processing operations due to changes to our customer portfolio last year. Specifically, we've seen lower processing yields with some material being downgraded to the ingredients channel. We have also reduced turkey production to better match demand, which has seen our unit costs rise. Importantly, we've identified these issues. We've understood the root cause, and we've implemented corrective actions. I'm pleased to say that as a result, our recent operational performance is showing -- is showing positive improvements, and we expect performance to return to target levels in the second half.

Our broader cost-out program remains on track and is set to deliver between $60 million and $80 million in annualized savings across labor, procurement and site operations. Feed cost benefits are being realized and are broadly in line with our expectations. So whilst we certainly face some near-term headwinds, the underlying market conditions are very positive and our corrective actions are working.

Turning now to an update on outlook and guidance. As you will have seen in our ASX announcement yesterday, we've reaffirmed our FY '26 guidance for underlying EBITDA pre-AASB 16 in the range of $215 million to $230 million. That outlook is underpinned by positive market fundamentals. We expect volume to lift slightly, offset by a small price reduction as we share some of the feed cost benefits with our customers. We also expect improving operational stability to drive unit cost efficiency.

In New Zealand, performance remains strong, supported by stable operations, resilient brand performance and favorable market conditions. We also indicated that for the first half of financial year '26, underlying EBITDA is expected to be approximately $80 million. As I mentioned earlier, we've seen some operational cost pressures in the first half, and these will impact results before the full benefits of our corrective actions flow through. Those benefits are building and will be more evident in the second half, where we expect a much stronger earnings performance.

So, what's driving this outlook? First, our earnings are weighted to the second half. This reflects the lower FY '25 exit run rate and the timing of benefits from our operational reset, which are now progressively coming through. Second, on volumes and pricing, we expect core poultry volumes to be slightly higher than prior year with net selling prices a little lower. Importantly, wholesale margins continue to improve, and that provides a very meaningful offset. Third, on costs, excluding feed, we're seeing some inflationary pressures and the short-term effects of operational challenges we identified earlier in the year. These are being materially offset by our $60 million to $80 million cost-out program across labor, procurement and site operations. Feed costs, meanwhile, are expected to continue to provide a modest tailwind in the second half. And finally, on capital expenditure, we revised our guidance to between $70 million and $90 million, maintaining disciplined capital allocation whilst investing in the areas that matter most to our long-term growth.

So, to summarize, we've reaffirmed our full year guidance. The first half has certainly had its challenges, but our corrective actions are delivering and our cost-out program is on track, and the business is positioned for a stronger second half and a solid full year outlook. All this sets us up very well as we look ahead to FY '27 and beyond.

Thank you once again for joining us today, and I'll now hand back to Helen to conduct the formal business of the meeting.

Thank you, Ed. I'll now move to the formal items of business. The notice of meeting was lodged with the ASX on the 10 of October and is available. I propose the notice of meeting be taken as read. Each resolution set out in the notice of meeting is to be considered as an ordinary resolution and to be approved by a simple majority of votes cast by shareholders entitled to vote. For all items of business and in accordance with any voting exclusions that apply to each resolution, undirected proxies that have been given to the Chair or my fellow directors will be voted in favor of these items. The results of today's meeting will be released to the ASX and published on the Inghams Group Limited website in the Investor Center later today.

The first item of business is to receive and consider the financial report of the company and its controlled entities and the reports of the directors and auditor for the year ended 28th of June 2025. The annual financial report, directors' report and auditor's report are contained in the company's 2025 annual report, which was released to the market on the 10th of October. As I noted earlier, KPMG partner, Trent Duvall, is here with us today and available to respond to questions relevant to the conduct of the audit and the preparation of the content of the independent auditor's report and the independence declaration. This item of business is for discussion only, the Corporations Act directing there is no formal vote required.

I'll now take questions on this item of business, starting with questions in the room. Are there any questions on this item?

Look, the first question is -- I'm sorry, I'm representing the ASA. Got a proxy for about 33 of the shareholders. Has there been any discussion on potential -- with potential purchases?

I think that you will have noted that we released an ASX announcement a couple of weeks ago, now stating no.

Okay. And so that is the answer is no. Fine. The CEO said in the results, the update yesterday and also today, the market fundamentals have developed favorably over the first 18 weeks with stable demand in volume in Australia, and this is great, none Woolworths, Retail was up 15.5% and QSR, 8.6%, which is all fantastic.

However, with all that, your volume are still down 1.1% over the prior year, the same period last year, which I thought was still a good period. I thought we were talking about the bad period being those last 18 weeks. But even if we look at those last 18 weeks, you're only up 0.8% over that disastrous time. How is this really indicating a recovery or just a slightly worse result than last year really is what you're projecting. I don't quite understand that.

Ed, would you -- I can see you nodding. I can tell you'd like to answer that. So, yes, please go ahead.

I think -- I mean, look, firstly, from a growth perspective, it's worth reminding that in the first quarter of this year, we're lapping full Woolworths business. And so whilst we did talk about total volumes being down 1.8%, I think the non-Woolworths business is up significantly, which, as I said in my speech, is reflective, I think, that we've done a very successful job in winning new business to offset the impacts of the Woolworths contract adjustment.

In terms of then -- as -- I think then these things are all connected. What we said is in the final quarter of financial year '25, oversupply led to a significant deterioration of wholesale pricing economics -- wholesale pricing. What we've done in the first quarter of this financial year is then a slight reduction in our processing numbers to ultimately tighten up the market. And that's then why we're talking about a marginal increase in volume on the FY '25 run rate, but we talked about a 40% increase in wholesale margins through that period as well. And you wouldn't get that 40% increase in wholesale margins unless we had materially tightened our volume position.

Okay. Great. You talked today and previously about $60 million to $80 million annualized cost coming out of the business, $8 million to $10 million comes out from this new structure. By the way, that $60 million to $80 million, I assume that there's also some one-off redundancy costs that will come out of that. But how much of that has been achieved so far?

Look, the $60 million to $80 million, so that does include partly the restructuring. It also includes things such as procurement, some of the benefits from our capital program and then our ongoing continuous improvement programs. As we said, the restructure itself was $8 million to $10 million of annualized benefit. And in terms of then, there's probably $4 million or so of redundancy costs that will end up hitting this financial year.

Right. Okay. So that other -- well, so what? The other $50 million to $70 million is basically from inefficiencies that are there that are going to be improved? Or I'm just trying to understand because you're also saying your operational costs are higher this year than you anticipated because you have an increase in soybean costs and things like that. I think you have to assume that soybean, particularly is going to stay up there. It's not going to fall, even though China is starting to take some perhaps, but still -- so I'm just trying to figure out where this money is coming from, the savings. I think it's fantastic. You're doing it, but I understand where.

I probably think about costs in three lumps. I'd say there's certainly feed, which, in many respects, macroeconomics determines what the feed cost is going to be, and that's not included in the $60 million to $80 million that we've identified. I think the $60 million to $80 million more is continuous improvement in terms of programs that just drive continual efficiencies in how we work and the processes that ultimately are required to deliver great product at the end of the day. And then as we said, there's certainly inefficiencies that have been in our supply chain in the first quarter of this financial year that we're addressing. But the addressing or the delta between our current performance and where we expect to be in the second half isn't included in the $60 million to $80 million cost-out program.

Thanks, Alan. So just clarifying, are there any questions for our auditor? No.

To the auditor, has any of your upper staff, higher staff work for PwC during the illegalities that PwC engaged in several years ago. As I'm a newish shareholder, I may have been asked before, but if it hasn't, you can tell us now.

There's definitely no one in our team that has worked at PwC from time to time the firm -- there is definitely no one in our team that has worked from PwC.

We just get you a mic. Yes, thank you. Yes.

Sorry, sir. There is definitely no one from our team that has worked for PwC. From time to time, the firm across the 10,000-odd staff of KPMG, we do recruit from other firms. So I can't tell you if there are individuals who's been recruited where. There is no one from the executive leadership of PwC at KPMG.

It goes to trustworthiness of the audit.

Yes. So I think I covered that. There's no one in the audit practice, no one in the audit team from PwC.

Hopefully, no lessons -- I mean, hopefully, lessons have been learned.

Thank you. But -- yes, Peter.

David Kingston, K Capital.

Sorry, Dave.

I just got a couple of comments and a couple of questions. Look, Inghams is an iconic company. It's been around for a long time. High quality in core poultry business. Look, it's great that you've been very frank today, both the Chair and the CEO. You've acknowledged the disappointment of the earnings downgrade, and you've acknowledged the poor share price performance. But it's not just the fall from $380 million six months ago to $240 million today or yesterday, which is a loss of $500 million of market cap.

I tend to look long term to get a guide on companies. And it is concerning that the Inghams' IPO price in 2016 was $3.15. And here it is today, nine years later, significantly lower. So, in assessing an investment, is this a great investment opportunity given the fall? Or is it a value trap? I tend to look at what's gone wrong and are you dealing with those issues. And I appreciate the frankness and the honesty today. Nothing. Sorry. Okay. And I think it's good to have a frank discussion today. Look, the couple of key issues are clearly Baiada and Woolies. Baiada continues to gain market share as well as Hazeldenes.

Look, most industry observers comment that Baiada is more aggressive and more commercial than Inghams. Clearly, Baiada has taken part of the Woolies business. I accept it's got the advantage of being private and nimble. You've got the constraints of being public and with governance issues and whatever.

It is a concern that Baiada is also going to open a new state-of-the-art processing plant in Tamworth in early 2016 (sic) [ 2026 ], processing a massive 3 million chickens a week. I'm not sure whether that's been taken into account in your assessment of future earnings. Clearly, the partial loss of volumes on Woolies replaced by QSR and others is having a big impact because the volumes might have been largely replaced, but the margins have gone down. In '25, there was a 9.2% drop in Inghams wholesale margins.

Look, the other big issue, I think, in trying to work out objectively why this great company has declined and hopefully, it can return.

But the other big issue, to be frank, is the legacy of TPG. Look, private equity is smart. They're very capable. They make money. But look, following the purchase by Inghams in 2013 by TPG Private Equity, they made a terrible mistake in my view of selling the major Inghams properties, processing properties. That's left you with a legacy that your lease costs are now heavy at $166 million a year, majority being principal part interest. It's a classic PE strategy to strip properties out. It might work for the PE people, but it leaves a legacy. And now the irony is you're starting to buy back some of those properties they sold. Now look, I welcome that because I think -- those properties are core properties, processing plants. I think you're doing the right thing to buy them back. But I accept in assessing how you're going that TPG have left you with some tough legacies that not your fault. That's private equity.

Unfortunately, the TPG property sales means that your NTA has dropped because they pull a lot of money out through dividends. Your NTA has dropped now to a modest $215 million relative to your market cap of around about $900 million. Also, you've got significant debt of $530 million. And with reduced earnings, there's limited debt headroom.

So, coming to a couple of questions, Chair. I appreciate the frankness today, but while Inghams has paid solid dividends, the total shareholder return, which is the critical issue for shareholders, has been weak, both over the short term and the long term. Dividend is good, but the equity value has gone down.

First question, how can you deal with this ongoing erosion of market share that keeps on putting pressure on Inghams from Baiada and Hazeldenes continuing to take market share and continuing as nimble private companies to invest in state-of-the-art facilities, which is putting a lot of pressure on Inghams.

My second question, just to give you both at the same time. Look, I do have some concerns about the key financial metrics. Market cap, $890 million, debt over $530 million, NTA $215 million. Gearing, according to some brokers, may go above 2x EBITDA, which is the top end of your range, a target range. So, the question is, with margins tightening, and I don't see that changing given the competition, are you concerned about the debt level and the low-ish NTA? Why does -- also why does Inghams do you think trade? I know you're going to say you can't control the share market, but why does Inghams trade at a 20% to 30% discount to relevant international peers?

Gosh, that's an incredibly well considered set of questions, David. Thank you. And you've obviously read our results and our report intimately. So, let me try and tackle a couple of things, and then I may ask Gary, put Gary on notice to give a perspective on our financials as well.

So I think you've acknowledged that we've been very frank about the performance of where the business is at today. And I do want to reiterate that we are very dissatisfied with where our current share price is.

How do you deal with erosion of market share to your first question? Well, you have to have a strategy that ultimately grows your share over your medium to long term. And that is what our team are working on now. So it is premature for me to unveil what they're working on. But what you've seen from Ed is a refreshment of the executive leadership team in this business that we're pretty excited about. And that team are head down at the moment refreshing the strategy for Inghams and are looking very acutely at those challenges that you've raised and how we can win against the competition. So the plan for that is not to discuss that today. It's premature, but the plan is to share that with investors in the second half of this calendar year when that's been finalized.

Turning to the financials. Are we concerned about our financials? Of course, we are, and we're acutely focused on them. We do believe that they're managed very well. And as Ed's already talked about, we're expecting -- we're already seeing a tick up in some very important operational and financial measures across the business, and we expect those to strengthen in the second half and beyond. But I will just see if Gary would like to make any additional comments on debt. Gary? We might get Gary a microphone if we could. Thank you.

So, the NTA position, I think you rightly talk about the major impact of that is the property sales from 9, 10 years ago. As far as debt, the $530 million debt, net debt is $430 million under that scenario. So there's cash that sits in there. We do see our upper limits of leverage. So our guidelines of 1x to 2x, I think they will be breached at the half year. So it will be higher at the half year, largely through the prediction of earnings, but also some significant multiyear CapEx that's already been committed coming through. So I think we will be higher than our debt leverage range at the half, we expect that to return back to around the top of the range at the full year under that. Significant headroom sits above our determined range as to where our covenant sits and that we have plenty of liquidity in our commitments as well.

But I think your observations are fair. And we need to improve the financial performance in the year, and that will bring those levels back into line.

Thanks, Gary. Okay. There's a question. Yes. The lady on the right, please face with the microphone. Yes, please do introduce yourself.

Yes. My name is Vani. Very simple question. I have been shopping at Woolies, and I would say that I'm going through the 13 pages of your product, okay? And they are more for very large ones like maybe a kilogram, two kilograms products. And you don't have too many things that are, let's say, I would like sausages, I would like cold cuts. I think the structure has changed. Like I do see in Woolies, you have chickens like marinated in different flavors these days, but the weather is hot. I'm not going to open an oven to cook a chicken, okay? I want something that's simple to cook. You have something like skews on the chickens, but skews is more like you just put in some marinade and put the chicken through the rods like the skews. But you don't have the higher processing like sausages, okay?

They are -- if you look at the Woolies, there are different types of sausages that have different, let's say, with goat cheese or maybe with wine, like different flavors. So these are easier to cook and not that easy for us, house wife to do it like to reproduce it like for us. Skewers is just meat marinated in different sources. We can do it very easily. but not sausages, okay? Cold cuts will be very handy in the hot summer.

So there are two things I think has changed. First, the family structure is getting smaller. We're not living in a big house with a big fridge where I can tug in one or two kilos of stuff in there. I'm living in a smaller apartment these days, maybe a smaller family. So something like 400, 500 grams is better. And secondly, you have a lot of -- as I go through the pages, lots of crispy stuff like tenders, schnitzel that have bread crumbs. And look, it's healthy eating these days. I don't want to have all the stuff that I have to put in either deep fried or either I put in an oven or a deep fryer. It doesn't go these days. If I go for chicken, I want white meat. I want something that's more pertaining to be on a diet, not so heavy deep-fried stuff. And first is the family structure getting smaller. We're moving into apartments. Second, make it easier to cook, more flavorable. And third, it's hard. So the weather is getting hotter. So don't expect us to open an oven and a whole chicken or a bigger turkey like sort of doesn't make sense.

Okay. Thank you. Thank you. I can see Caroline I'm taking notes there as our Chief Growth Officer. Yes, the gentleman at the back. Thank you.

[ Simon Merrick ] a minor, minor, minor shareholder. But my simple question is Woolworths has been on or off. I'm not quite sure what's the current situation? Do Woolworths buy from Inghams? And if so, roughly what percentage do we believe that they are buying from us?

Yes. Okay. So we still supply the majority of Inghams -- of Woolies' chicken to them. They are an incredibly valued and important customer. We've just renewed -- as you know, we've got a new contract with them. It's a multiyear contract, and we're working really constructively with them on joint partnership opportunities. So, yes, we still supply them. We're still their biggest supplier. We just supply slightly less than we did before.

I suppose the obvious thing question is, what have you learned from your previous discussions with Woolworths? You've been with them for a long time. They dropped you, obviously, for a certain extent. What lessons were learned from that?

I'm going to ask Clair to comment because Clair has been intimately involved with working with Woolworths for a period of time now and deserves a lot of credit for the recent joint business partnership.

So, Clair, would you like to just add a little bit of color as to what we've learned through the Woolies process?

Just checking you can hear me is perfect. So what have we learned? Well, we've learned that it's really important that we have a relationship that thinks about growth into the future versus a tactical relationship. And we've made significant room in terms of building our relationship. And as Helen just mentioned, we've actually just agreed a joint business plan with them that stops us just talking about supply and chicken and actually talks to them about creating categories like sausages and various other things with them. So we've significantly stepped into our relationship.

We've also learned that it's important we have other relationships outside of Woolies. And so you can see from the results, our 16% growth in other retail is really the results from the last year or so of us building those relationships, and there's plenty more opportunity there that we're going after.

Thank you.

Thanks, Simon. Okay. Alan, would you like to ask -- so the gentleman in the front row. Yes. Please do introduce yourself.

Good morning, Chair, and the Board. My name is [ Wolfgang Schwarz ], and I'm fairly new recent shareholder. So when I saw the price dropping below $2.50, I thought I'd buy some shares and see how the company will be going.

You're welcome.

My thing is you're producing chicken there. But we have a large aging population, have ever considered producing ducks.

And maybe another question is, you're trading in New Zealand in what's called in Australia actually. What about our next neighbor north, Indonesia, with 270 million people. Have you ever considered going out of Australia and New Zealand?

Okay. So let me take the duck question, first of all. I mean, I'm sure, Wolfgang, you'd appreciate we look at all sorts of growth opportunities, and that does include -- we look regularly at other proteins. I'm not going to say that duck is on the agenda at the moment, but you would expect us to look at growth opportunities.

And you're absolutely right about the Asian markets and the appeal of different flavors and delivery mechanisms that we can do for poultry. So I would say we focus more on that is looking at the appetite and the appeal and the need states of Lebanese and Asian consumers, but applying that to the poultry market. We do export. It's a relatively small part of our business. And at the moment, we are very much focused on Australia and New Zealand. Thank you.

Alan, did you have another question?

Yes. It's just following up what a couple of other people have said and what I wanted to ask I was wondering, last year, last -- sorry, let's -- in your results in 2024, you projected an EBITDA of $236 million to $250 million. At your half year, you used the same figures. You ended up at $236.4 million, right at the bottom.

The reason seems to be primarily that you thought you were going to lose less business from Woolworths. You thought that Baiada and Hazeldenes, I'm not sure which one -- I know Baiada is doing amazingly at the moment, but I'm not sure which one actually took that business away much -- to a much greater extent than you thought they would. You went and overproduced because you didn't think that was going to happen.

Why did they take that business? Long term is great, fantastic, and that's wonderful, but they cut you off short term. Why?

So I might give you a headline comment, and then I'll ask Ed to expand on that. I think one of the -- we have enjoyed an incredible relationship with Woolworths for a very, very long period of time. But if you were to look at their supply, they were very heavily weighted to Inghams, way more than a diversification or a balanced portfolio approach would take. So it's simply a customer diversification strategy from their point of view.

Now it's equally important for us, as Clair was saying just a moment ago, to have a balanced and spread portfolio for Inghams across a variety of channels and customers. That's the headline reason is they were far too heavily weighted. And from a resilience and a diversification point of view, it made sense for them to do that as it does for us over time.

But Ed, would you like to add anything to that?

Yes. I mean I think that's exactly. The rationale largely from a Woolworths' perspective was one of wanting to diversify their supply base. In terms of then the adjustment of volumes in the second half, we knew the Woolworths adjustment was coming. We knew 12 to 18 months before that final tranche was adjusted in late February of financial year '25.

What we did, and there's probably a reflective moment for us as an organization is we held our production settings flat despite the adjustment. And the reason for holding our production settings flat is twofold. Firstly, we wanted to hold on to our market share. I think as you quite rightly pointed out, we have been losing to Baiada, and there was a sense of putting a stake in the ground to say, no, we don't want to lose any more market share.

And the second was a belief that based on how we see Baiada play out in the market prior to that point in time that we thought Baiada would adjust down the other competitors would adjust down their processing volumes as well. Now as it happened, I think that led to a significant oversupply in the market in the final quarter, which led to the wholesale pricing that you saw deteriorate the way that it has, and we've since seen it come up some 40% again.

But -- and so that's really as it played out. It wasn't so much a short-term shock from Woolworths perspective. It was the decisions we subsequently made from a processing volume perspective.

Great. Thank you. And I assume you've learned from that, and that won't happen again.

Watch your space.

Thanks, Alan. Brett -- yes, David.

Just one follow-up, please. It's really on medium-term outlook. Look, when you look at this business, it's got ongoing heavy CapEx, which is well above depreciation in recent years. Secondly, as we've all talked, you've got heavy competition from fellow suppliers like Baiada and et cetera. Thirdly, you've got the challenge of dealing with non-generous customers such as Woolies. Look, they're a fantastic company, but we all know they're not particularly generous, which is fair enough.

When we look at FY '25, you've delivered $90 million NPAT on $3.2 billion of revenue. That's an NPAT to revenue margin of sub-3%. You're actually now in the supermarket company territory, whose margins are traditionally fairly low, but you are down at their level. That's the sort of margin that they deliver.

So my question really is, is the future that this is a branded business, which can get decent margins? Or is this business migrating to being a commodity type business where the competitors are big, the customers are tough. So do you see that it is a branded business? It's got some brands, but are they becoming a little bit meaningless? Is this becoming a commodity type industry, which necessarily, if it is, unfortunately, the margins are going to migrate lower?

No, it's a great question, David, and I'm going to get dangerously close to talking about future strategy, which I'm just not going to do. But I think there is a role for both. We have to play in core poultry, and we have to be competitive. And I think Ed's talked about how we're making significant efficiency and operational improvements in that area, and they're in play. So we need to do a better job there.

But there's also a role for branded and for value add and for things that our competitors cannot do. And we believe that, that's a real strength of ours and a particular strength of the team assembled now around Ed. So a role for both, but definitely a role for driving our growth agenda in the future.

Brett, are there any questions on the line?

Chair, there are no questions on the line or on the phones.

Okay. I am now going to move to the resolutions.

Item 2 is, concerns the reelection of Rob Gordon as a Non-Executive Director of the company. Rob was first appointed as a Non-Executive Director on the 11th of April 2019 and was last elected by shareholders on the 8th of November 2022. Rob is currently a member of the Finance and Audit Committee and a member of the Nomination Committee. Rob has nearly 40 years' experience in fast-moving consumer and agribusiness sectors and was most recently the Chief Executive Officer and Director of Ricegrowers Limited. The Board has reviewed Rob's performance and believes he continues to provide a very valuable contribution to the Board and accordingly unanimously supports his reelection.

I'd now like to invite Rob to say a few words in support of his reelection. Rob?

Thank you very much, Chair. Well, good morning, everyone. My name is Rob Gordon, and I have had the privilege of being an NED of the Inghams business for two terms. And today, I'm seeking your support for a third term.

The majority of my experience comes from the 40 years I spent in executive roles in the international food industry. And so I'd like to share a few highlights of my background, which I consider may be relevant to the current trading situation at Inghams.

I'm actually originally an automation and supply chain specialist, believe it or not, graduating in the U.K. with an honors degree in electrical and electronic engineering and joining Unilever's engineering management training program before taking a number of supply chain roles, including systems engineer, factory Chief Engineer and at the age of 26 being appointed factory manager and going on to run the largest tea factory in Europe. I then spent time in Unilever's corporate center, modeling the network and supply chain implications of the introduction of the single European common market.

At 31, I was expatriated to Australia to take on the role of Technical Director for Streets Ice Cream and managed the launch of Magnum Ice Cream here and in New Zealand despite local management believing that consumers wouldn't pay for real chocolate on ice cream. It comes back to the previous point, consumers flocked to pay a premium for a differentiated branded product.

After leaving Unilever to join Goodman Fielder to run their commercial oils business, a number of other roles followed, including Marketing and Strategy Director for Goodman Fielder Baking, Managing Director of Medley Foods; and finally, Managing Director of Goodman Fielder Consumer Foods, which included at the time, Uncle Tobys, MeadowLea, [indiscernible] and White Wings to name some of the brands. I then spent four years as CEO of Dairy Farmers turning around a poorly performing co-op and eventually selling it to Kirin at a close to 13 multiple and starting the rationalization of the Australian dairy industry.

A brief couple of years as President of the Southeast Asia for the grain accumulator and trader Viterra before taking on the role of CEO for SunRice, which had just emerged from the Millennium drought, heavily in debt and narrowly avoiding being taken over by a Spanish rice company. The business was completely restructured over my 12 years in the role. Debt was reduced significantly and now around 2/3 of sales are from international markets, including from a mill I opened in Vietnam, supply sourced from China and South America. The domestic brand was also relaunched and extended. In 2019, I listed the business on the ASX and the share price, which was at $2.05 when I joined, recently peaked north of $18.

At the previous AGM of Inghams, I was asked how I could possibly be the CEO of a business like SunRice and make a meaningful contribution to Inghams. Well, I had the energy to do both the professional standard of both companies, but now I have retired from my executive positions and have kept my NED involvement focused purely on Inghams. I'm very encouraged by the recent transformative moves made by our new and highly capable CEO, Ed Alexander. I believe there are many parallels between my background and the challenges facing Ed and his rejuvenated team. And I stand ready to share experiences and advice when needed. There is a very collaborative and transparent culture around our Board table, fostered by our Chair, Helen, and focused on bringing the correct solution even when tough decisions are needed.

In anticipation, I'd like to thank you for your support for this third term. Thank you.

Thank you, Rob. I'll now take questions on this item. Are there any questions about Rob's reelection?

None, Rob. Brett, are there any questions on the line?

Chair, there are no questions on the line either.

Okay. Thank you, Brett. Moving to the proxy results. Wow, pick it up, Rob. I will briefly pause if there is anyone in the room that hasn't cast their vote.

Okay. Moving to item #3. Item 3 concerns the reelection of Tim Longstaff as a Non-Executive Director of the company. Tim was appointed as a Non-Executive Director on the 20th of January 2022 and was elected by shareholders on the 8th of November 2022. Tim is currently the Chair of the People and Remuneration Committee, a member of the Finance and Audit Committee and a member of the Nomination Committee. Tim's professional background as a chartered accountant encompasses a 25-year career in investment banking and senior executive roles as well as serving as a senior adviser to a senior federal cabinet minister. He now has a broad range of experience as a net of large ASX-listed companies. The Board has reviewed Tim's performance and believes he continues to provide a very valuable contribution to the Board and accordingly unanimously supports his reelection.

I would now like to invite Tim to say a few words in support of his reelection.

With thanks, Helen, and good morning, fellow shareholders. As Helen said, my name is Tim Longstaff. I've been an Inghams director now since 2022, and I'm seeking your reelection for a second term, confident in the company's fundamentals, its strong team and the contribution I make.

Helen has covered and you've seen my background. I'm a chartered accountant, most of my career in investment banking with some time at the most senior levels of government, and I'm now a full-time nonexecutive director on the Boards of four large ASX-listed companies.

I want to explain why Inghams is important to me. Over 8,000 Inghams team members show up every day to make Inghams purpose real, to deliver deliciously good food in the best way. Chicken is Australia's favorite protein. Over two to three nights a week, most families have chicken for dinner purchased from one of the many supermarket chains that Inghams supplies. When we're heading out for a picnic, we grab a barbecue bird. And when we're on the run, we get some nuggets or a burger from a fast food, quick service restaurant like McDonald's or KFC that Inghams supplies.

But to do these things, Inghams needs to be financially successful and commercially viable. We need to create real shareholder value. After delivering, as was covered earlier, successive record EBITDA results between 2024 and 2025, we must acknowledge that recent performance has been poor. Inghams has been facing into strategic challenges. I acknowledge the shareholder disappointment in the share price. And rest assured that the Board and management team are focused with discipline and urgency on making the decisions necessary to reposition Inghams and create durable, meaningful shareholder performance. That is my focus as a former investment banker and an accountant is creating durable, meaningful shareholder performance.

My skills on the Board are in three primary areas. Firstly, as a chartered accountant of over 30 years standing, which comes in quite surprisingly useful chairing the Rem Committee, but also working with Mike on the Audit Committee. Secondly, in strategy, contributing to a strategy that will create this shareholder value and bringing equity market insights to do so. And thirdly, the investment banking skills around capital structure, equity market engagement and M&A that may well be needed as Inghams develops its new path to the future. My background has enabled me to offer valuable insights to support and where needed, constructively challenge to help our team move forward.

In closing, I really look forward to partnering with my effective and collegiate Board colleagues very ably led by Helen, Ed as he develops his new strategic vision and his first-class and rejuvenated management team to continue the shareholder value creation journey. I will be delighted to have your support to continue to do so. Thank you.

Thank you, Tim. Are there any questions in the room about Tim's reelection?

David?

Thank you. Look, Tim's got an excellent CV, and so I can make an outstanding contribution to the company. But just a quick question, Tim. Notwithstanding your high-quality CV and your hard work over your three years on the Board, shareholder value has gone down. Would you perhaps comment on what you think has caused that and why you're confident that this company will turn around the underperforming share price?

Brett is going to bring your handheld.

Thanks, David. Look, thanks, David. Very fair questions. So my time on the Board began in the depths of COVID. And -- thanks, David. Look, my time on the Board began in the depths of COVID, and we had struggled to get out of that. I think the challenges that have caused the recent share price decline are really around Woolworths and the recalibration of the business and its strategy to deal with that.

And what -- I suppose in the classic phrase, never waste a crisis. What we've been -- what Ed has been leading is a process to really confront the longer-term strategic challenges of the organization and to build something that is durable.

With some reluctance you say this, but in a sense, the loss of the Woolworths volume has provided us with the license to make more long-term strategic, perhaps more courageous change than just in a sense, trying to achieve -- make smaller, more -- less -- more modest change to achieve a growth in earnings. And what we have on the Board, what Ed's driving and what the Board as a whole is supporting is a real focus on how do we make Inghams to be the strongest and best company we can in 2030, not necessarily how do we deliver share guidance for next year.

Thanks, Tim. Brett, are there any questions on the line about Tim's reelection?

Chair, there are no questions on the line.

Sorry, we do have another question in the room from Wolfgang. Go ahead, Wolfgang.

As you said, you have four other directorships and four large ASX-listed companies. First of all, what are these four companies? And do you really have enough time and energy to devote to this Inghams business?

Thanks, Wolfgang. If we're in the same position.

This is a chicken company and not a tech company.

As Mike said, we're a chicken company and not a tech company. Wolfgang completely fair question. Let me say my four -- my three other boards are the Nine Entertainment Group, which is the television and media entity that owns the television station and the financial review and the Sydney Herald and things. I'm on the Board of Perenti, a mining services company, and I'm on the Board of a large transport and logistics company called Aurizon. So they're plus Inghams as the four boards.

What I find is that each of those boards enables me to bring really different perspectives, whether it's about industrial relations, whether it's about performance efficiency, whether it's about adopting AI. Each of these companies has got its own approach. And it's incredibly valuable to have the wealth of experience on the Board, colleagues who sit on other boards to bring those different perspectives of how other companies are thinking about changing things.

So to give you a really real example, it's fascinating to bring the insights from the Nine Board, engaging as we do with most of the consumer-leading companies in Australia and engaging with the consumer sector and bring those broader perspectives to bear at Nine.

As you would see, Wolfgang, if you look, I have a 100% attendance record at Board and committees across all those four boards. And really, this is my -- I'm happy to say that in nonexecutive director terms, I'm a young director. This is not a transition to retirement for me. This is a full-time five-day a week role that I throw myself into. And as a technical point, which you shouldn't rely on, I'm well within the proxy adviser guidelines for not being over-Board.

But the test is, do I contribute and do I throw myself in? And the answer is yes. And not just the bare minimum, but Helen thoughtfully gives me some special projects from time to time, and I work on colleagues with special projects, and I find time for those as well. And so yes, it's about the journey of creating shareholder value for Inghams shareholders, and that's what I'm engaged in.

[indiscernible]

Yes. And I'll just add to that. I mean, Tim is always available and deeply engaged in this business. He's already said he doesn't miss a meeting. Inghams is incredibly well served by all of our directors. This is a very engaged and committed Board. So we're lucky to have each and every one of them.

Brett, are there any other questions on the line?

Chair, there are no questions on the line for this item.

Okay.

Okay. We are going to move to the proxy results, and I'll just give you a few more seconds to cast your vote if you haven't yet done so. And I will now move to -- he got 98.8. I think Rob has just -- so close and yes, so far.

Item 4. Item 4. Now we're going to move on and talk about the remuneration report for the year ended the 28th of June 2025. The remuneration report is contained on Pages 50 to 73 of the annual report. It sets out the remuneration policies of the company and reports on the remuneration arrangements in place for the company's KMP during the 2025 financial year. We are committed to ensuring that our remuneration strategy reflects good governance, in consultation with key stakeholders is transparent in its design and supports the business strategy to drive sustainable outperformance for shareholders over the short, medium and long term.

In the lead up to this year's AGM, I met with several stakeholders, along with Tim to discuss the company's current remuneration plans and update ourselves on key issues for investors. We find these meetings really informative and very valuable, and they do provide input into the Board's decisions regarding executive remuneration.

While the vote on the remuneration report is a nonbinding one, it remains a valuable source of feedback. The Board takes the discussions held during this part of the meeting and the outcome of the vote into account when setting remuneration policy for future years.

I will now take questions on this item, starting with questions in the room. Are there any questions?

Alan?

Thank you. Thank you for the meeting with both of you before the remuneration. And I don't think I've ever heard the Chair talk so much about remuneration in her their opening speech, and I thought it was very good. One of the things that happened this year, and I think it was mentioned, is that you use your discretion to reduce the short-term incentive, particularly for the CEO.

My question -- I have two questions. My first one is that shouldn't have been necessary. And I want to know if it's going to be necessary again this coming year. The reason for that is the minimum in your -- as you said, in your long-term incentive, your return on investment capital has been reduced because of the outlook, because of the expenditures, the capital expenditures. So what I want to know is, are we going to have the same situation next year that has to look at, well, we said $215 million to $230 million, and we made our minimum so low that basically, are we going to see a more realistic minimum in your short-term incentive this year? That's my first question.

I'm going to take that, and then I'll check to see whether my colleague would like to build on that. I think discretion was warranted, Alan, because we, on the whole, hit the bottom end of the guidance that we took. So on the face of it, we looked at a scorecard that vested. So -- and I think I did cover this in my opening address. We had to take a step back from that and actually look at the bigger picture, which said, yes, it did vest. It vested right at the bottom of the range. The ESG measures on the whole were very solid.

But when you take a step back and you look at the loss of volume with the renewal of the Woolworths contract and importantly, what we're living through now, the outlook at that point in time, which was out of FY '25 into FY '26, the outlook in the short term being more challenged than was ideal. That was really the reason why we needed to take a step back and say, we can't just look at the vesting of the financials. We need to look at the bigger picture and the outlook into the future 6 and 12 months of the business.

Tim, would you like to add anything to that?

I'd agree with that, of course. I think to your question, Alan, we shouldn't have to use discretion. You know what, sometimes we have to. We set targets to find the right degree of balance between a realistic target because if it's not achievable, it's of no value to the executives and doesn't motivate them. And yet at the same time, they need to be challenged and stretched. So that's how we set these targets.

And with a continuing executive team, then you can allow for unders and overs in future periods. But with an exiting Chief Executive and where the impact of the key event that drove our targets being the transition of Woolworths volumes, the question when we set the FY '25 targets was we didn't know what the effect would be. We had some ambitious targets that the team needed to achieve. We didn't know how it would evolve. And so when we saw it evolve, we saw that FY '25 did not fully capture the impact of the loss of Woolworths. And yet Andrew was leaving as an executive.

So at that point, we had to make a decision of how we captured the totality of that substantial decision that happened on Andrew's watch, and it was appropriate, as Helen said, to make the adjustment. We set our structure so we don't have to adjust them. But when they have to be adjusted because it's the right thing to do, they have to be adjusted. And I must say that the decision the Board made has got very widespread shareholder proxy support.

Good. Thank you. My other question, I know you think it's surprising coming from me. But I understand we have a new CEO, and we have great hopes for him, but he doesn't have the experience the previous CEO has, and therefore, the fixed annual remuneration was reduced. And okay, that makes sense.

But what I can't understand is why his incentives were reduced. I mean, yes, reduced is fixed, but his incentives should have been at least as high as his predecessor was because you want them to shoot the lights up. You want them to aim high as you were talking about. So why did you reduce his incentives?

It's again -- I knew you were going to ask this question. I'm sure Ed's thinking, yes. Come on Alan ask that question. So I think I'll make a couple of comments. And again, if Tim would like to embellish.

You've picked up, first of all, on the fact that, of course, Ed did a fantastic job in New Zealand as CEO of New Zealand. This is his first group CEO role of an ASX-listed company. So he is growing into that role. He is already making great strides in building a great team around him and refreshing our strategy, and he will grow in that role. It's appropriate that the benchmarking is reviewed and is different to, for example, a retiring CEO who's been in the game for a very long period of time.

We expect Ed's remuneration with his performance obviously being at an acceptable level and hopefully at an outstanding level for his remuneration to move over time. And that would include, of course, his fixed rent, but also those stretch areas of STI and LTI.

Anything to add, Tim?

Probably Helen, yes, I think shareholders should expect that not only will it TFR and remuneration move, but it will move at the rate -- at a rate higher than the broader workforce. When we benchmarked Andrew, the benchmark for an experienced qualified CEO was about what Andrew was being paid, about 1.25. So if you do the math and say, over a period of years that you would expect Ed to get to that level. So if we hypothetically increase the wages of the broader workforce at, say, 3% in line with inflation, if Ed was having pay increases of, say, 6%, don't bank you get Ed.

Then as you move towards that benchmark level for an experienced Chief Executive, subject as Helen said, the performance, I think shareholders should expect to see that. And I think they should be grateful for that because it will be doing a tremendous job.

Thanks, Alan. Yes, David, go ahead.

Yes. Look, just a couple of things. As the great Charlie Munger used to say, show me the incentive, and I'll show you the outcome. Look, like Tim, I come from an investment banking background. I think it would fall apart Tim, if there weren't bonuses. I think no one would have any employees. So, philosophically, I'm all in favor of incentivizing the key people. It looks like Ed's done a great job in New Zealand. I think your address today was excellent. It was energized and practical. So you see a very good people person. So I'm sure you'll do well.

But look, at the end of the day, Chair, the person who's -- the party that's made the most money out of this sector in Inghams is TPG. Now private equity are incentivized massively. They made a lot of money. The people who've made the least amount of money are the shareholders from the IPO in TPG. So all I would say is that the other people have made a huge amount of money in this sector are the private savvy. I'll even use the word [indiscernible] because I think it's fair to say Baiada all reports are really tough, ruthless. And they're driven by what every single dollar of profit goes to the family. And I believe Hazeldenes probably the same. So, really, I'd just like to support attractive remuneration for the key people who make it happen.

But also just a question for Ed. I'm pretty realistic, and I've dealt with a lot of listed companies. And the governance is tough. It's only getting tougher. Compliance. There's an element of bureaucracy in being a listed company that is impossible to avoid. It doesn't matter how effective you are. It's just endemic in listed companies.

Ed, how -- are you confident that with the constraints of being Chief Executive of a listed company that you can outcompete those unfettered, wildly, savvy private players who are motivated by the fact that every single dollar of profit goes to their families. Are you confident that the constraints you're under are not going to mean that there's going to be an ongoing performance -- a period of underperformance relative to the Australian index or just that the share price will actually recover. Bearing in mind, you've got these pretty sharp competitors.

Yes, sure. Is this working?

Yes, it is.

Thanks for the question and the support of my remuneration. I think I'd say maybe three points upfront. The first is that across the New Zealand market, we also had very competitive private operators who were family-owned and were very hungry for new business. And we managed to outcompete them and outcompete them quite significantly. And we did that largely through two focus areas.

One was how do you get more exposure to areas that are growing within the market? And how do you make sure that you're capturing portfolio growth? And the other is how do you invest behind distinctive capabilities such as the acquisition of Bostock Brothers that provides you with relative pricing power within that market. And I think as a result, as Helen talked to upfront, that's seen Inghams' New Zealand earnings double over that sort of period of time from '22 to '24. So that's point number one.

Point number two is I think there's still an awful lot more that we can do as an organization to make ourselves less bureaucratic and more efficient. And it started with the changes to the operating model, which was taking layers out of the business. And I think there's quite frankly, more to do there in terms of how we do reduce the bureaucracy and ultimately reduce the friction as it relates to working with Inghams.

And then finally, I think how you do compete. I've got a framework in my mind, which is intrinsic values created through three areas that's play where the growth is, invest behind distinctiveness and ultimately think about how you increase barriers to exit over time. And I think once you apply that model, there is certainly a way in which to outcompete competitors within the market. It's just up to us as a management team to make sure that we go after that.

Thanks, David. Brett, are there any questions on the line?

Chair, we have a question from Mr. Stephen Mayne. His question is as follows: which of the proxy advisers covered us this year? And did any recommend a vote against today's resolutions, including this remuneration report item? If so, -- what reasons did they give? And did this translate into any material protest votes?

Stephen also notes, it is standard for companies to be across this detail on voting recommendations and inform shareholders where relevant. He also asks, next year, please disclose the proxies earlier to the ASX, along with the formal business addresses to avoid having to ask questions like this and allow for a more fully informed debate.

Okay. So, noted on the request. And we met -- Tim and I met with all of the proxies and all of them are in favor of all of the resolutions. Tim, that's correct. Yes. Brett, are there any more questions on the line?

There are no further questions, Chair, for this item.

Okay.

The proxy results are shown on the screen with a very good result. I will pause briefly just in case you haven't cast your vote.

And now I will move to Item 5. So this is about the company's LTIP for '26 to '28, which is the grant to the CEO MD. The company's LTIP schemes are designed to align the interest of the CEO and Managing Director with the interest of shareholders by providing the opportunity to receive an equity interest in the company through the granting of performance rights. Each performance right entitles the CEO to receive one fully paid ordinary share in the company, subject to meeting specified performance conditions.

The FY '26 to '28 LTIP structure remains unchanged from the prior year and is based on two equally weighted performance measures of underlying pre-AASB 16 return on invested capital and relative total shareholder return.

As I outlined earlier, there is no change to the relative TSR measure and the level set for the '26 to '28 period represents a substantial hurdle if it is to be achieved.

In relation to return on invested capital, the FY '26 to '28 measure has a lower threshold and maximum level than previous years. The levels set by the Board reflect both the earnings forecast outlined in our '26 earnings guidance and an upward trend in capital employed as Inghams invests in the refurbishment, efficiency and expansion of its productive capacity, as I previously talked about. Importantly, the target levels are meaningfully in excess of Inghams weighted average cost of capital.

I will now take questions on this item, starting with questions in the room. There are no questions here. Brett, are there any questions on this item on the phone line? Brett, are there any questions?

Chair, there are no questions for this item.

Okay. Thank you. So I think we can move to the proxy results which are now on the screen, and I will pause again briefly just in case you haven't cast your vote.

Okay. Before proceeding to general business, I would like to advise that I will move to close voting at the conclusion of that discussion. So if you've not already done so, please complete all of your votes for the resolutions.

So moving now into general business. And I think we did actually cover a little bit of general business earlier, which is absolutely fine, but shareholders are now invited to ask any other general questions that you might have regarding the company.

We did receive several questions prior to the meeting that I would like to address. I will come back to you. I'm just going to address a couple of questions that we had upfront. The first question references the fall in our share price, which I have discussed, but I will come back to it and how we intend on improving it going forward.

As I noted earlier in my address, the performance of our share price since late August has been very disappointing. And I'd like to reiterate my reassurance that the Board and the management team are responding with urgency and discipline through a range of measures, which are expected to position the company for stronger performance in the second half of this fiscal and beyond. We look forward to updating you on these and their outcomes during the year.

The second question relates to whether Inghams has plans to introduce a dividend reinvestment plan in the future.

The Board and the management team constantly review the capital requirements of the business. While we do not have any current intention to introduce a dividend reinvestment plan, should we decide that commencing such a plan is in the interest of the company and its capital requirements, we will advise shareholders by way of an ASX announcement at that time.

The next question relates to our growth plans for the business. We actively consider growth opportunities in Australia and New Zealand during the course of any given year as evidenced by the two New Zealand acquisitions we've undertaken more recently. The Board and management actively consider external growth opportunities as they arise, whilst remaining focused on driving the performance and growth of the existing business.

The final question we received was a general question in relation to our sustainability initiatives.

Sustainability is an important contributor to the performance of our business. With a focus on responsible business practices that align with our strategic direction, we believe that we're performing well in our key sustainability focus areas, and they will create long-term value for shareholders, customers and communities. Our sustainability reporting, which you can find on our website, is a valuable resource for those who'd like to learn more about how sustainable practices benefit our business.

I will now take questions from the room. So please come to the mic.

Michael Ristoski, Super Fund. For a company that is chooks, I've heard it referred to once. And you lost over the reduced feed conversion ratio in your comments, and I was wondering what caused it. What -- how we fixed it? And do you expect it to happen again?

And the second bit, which is a chook company with a minor bit of turkeys, have you investigated or considered going into other forms of poultry, quail, pigeons, et cetera, guinea fowl?

Thank you, Michael. So I think I answered the duck question earlier, but I will ask Ed to comment on food conversion in a moment because I think you touched on it, but it might be worth just going over the operational challenges again.

We do look at all the other proteins. And really, that forms part of our -- we do an annual strategic review. So we've looked at duck, we've looked at red meat. We've looked at other poultry as well. And we still believe that there are significant opportunities in the key markets in which we're currently operating. But we would be blind not to make sure that we're looking outside of our core business, and we do that regularly.

Ed, do you want to comment about food conversion?

Yes. My comment on feed conversion, we're an agricultural business at the end of the day, and we go in and out of cycles, quite frankly, whether that's feed or whether that's efficiency of our farming practice, these are cycles that we go in and out of. I think the beauty about poultry is you get very quick feedback. And so we can make adjustments quite quickly.

The relative point here is that across the last four months, in particular, there has been a reduction in feed conversion ratio, but we're immediately starting to see improvements as we're working on it today. And there's a whole bunch of things that can impact that. It could be weather, quite frankly, it can be slight outbreaks in disease in various farms. It can be poor husbandry in some instances. There's a whole bunch of factors. But it's our job as management to pick up on those leading indicators as quickly as possible and address them, and I'm very comfortable that Susy and the team are doing that as we speak. So I do think at the end of the day, it comes back to some of the agricultural realities that we have to deal with.

I forgot the other bit. What precautions does the company take against Otago flu?

Yes. It's a very obviously appropriate and timely question. Look, we've got very strict sort of biosecurity controls that are in place right across our network. I would say that given there's been discussion about our competitors quite a lot today, I think we've got a real advantage relative to biosecurity control just given that our asset footprint kind of extends across all states of Australia as well as New Zealand. But look, we've got strict biosecurity controls in place, and we continue to monitor it and working with the industry as well.

Thank you, Michael. Brett, are there any questions on the line?

Chair, we have several questions online.

Actually, just hang on because I think David might have another question. David, go ahead.

Thank you, Chair. Just a brief one. Look, we know the earnings are down and you've got a strategy to fix that. But I am a little bit concerned about the capital spend because your net cash flow is clearly significantly negative. Recently, you have bought back a facility that I support, but it's cost you money.

Secondly, you bought a New Zealand business, which I'm sure Ed's on top of. So let's assume that's a winner.

Thirdly, you have ongoing large CapEx, which -- maintenance CapEx and general CapEx, which generally has been above your depreciation rate, which leads to the situation where your debt is $530 million, but tracking above your target range of 2x EBITDA. Question is pretty simple. Can you rule out the possibility of a new equity issue?

Again, very well informed and insightful comments, which I agree with. New Zealand, Bolivar and large CapEx, this is in part, as you've talked about, the result of TPG and the years of private equity. All of those investments were incredibly well thought through and have strong -- the Bostock business, for example, is a growth strategy for us, has strong returns. Bolivar is a strategic asset, made absolute sense for us to buy that one back.

Our CapEx falls into those three areas: ESG, stay in business and growth. At the moment, we're very comfortable with the plans that we have that we can manage them. Can we absolutely rule out an equity in the future? I'm not going to say no to anything. What we need to do is finalize the strategic reset that Ed and the team are working on and then share that when we're ready to do so.

So that's the plan for the second half of this year is to get an Investor Day, talk about the future when Ed and the team are ready. But in terms of our current plans and our current investments, we're very comfortable with our capital framework as it stands today.

Brett, are there any questions on the line -- sorry, we've got another question in the room. Two questions in the room.

Chair, my name is Kevin Lewis. Small things you look at. Big things you can work out. Do we sell fertilizer -- because we're a chicken group, do -we sell the fertilizer from the chickens? Do we sell fertilizer? Do we sell feathers? And are we -- what are we doing to increase sales in the wholesale section?

And the last thing is because we're getting eggs as -- because we've chickens, do we use the eggs to sell or do we use the chickens to get chicks?

And the other thing is why can't we sell sausages, chicken sausages for Aldi, Woolies, the other one, Coles, et cetera. But also besides those, do we sell premium chickens to retailers as well? Lot to go through.

Yes, there's a lot to go through there. There's clearly a lot of demand for chicken sausages. So with fertilizer and feathers, we're really getting into the sort of rendering area. So, Ed, you might want to make a comment on that because they are very important byproducts, and we do use them and we do sell them. So I might get you to make a comment around that.

Quickly have a crack through some of those questions. In relation to fertilizers, so we've got that incorporated into our grower agreements. So, at the moment, our growers are able to use the fertilizer that the chickens are generating, and there's a value transfer effectively between us as the company effectively. There is value created through the fertilizer, exactly.

As it relates to feather, that's a significant opportunity. So we use that into rendering at the moment. I think there's various upsides that we can use that into the future as well. Indeed, what we're looking at the moment as an organization is how we can just make sure that we maximize the full value that's available from processing the full bird.

As it relates to eggs, all of our eggs are used to generate meat chickens at the moment and certainly in the short term, have no intention to enter the egg market, which, as you would have seen, been quite impacted by avian flu.

Sausages is on Caroline's top of priority list to make sure that she works out how we get into that of the market.

And in terms of the wholesale channel, I think it's a really good question that you asked in terms of how can you play a bigger role there. I look at the wholesale market, it's a significant portion of the Australian market now. And you can see the impact that it had on us as an organization at the last quarter.

So the question for us is how I think we generate stronger partnerships with some of those players within the wholesale market and reduce some of the price volatility that exists there as well.

Wolfgang?

So what happens to the millions of billions of feathers at the moment? What do we do with that?

They're going through the rendering at the moment. They're being rendered.

It's a good question. Susy, why don't you go give a crack at rendering? Sorry, Susy...

So, what is rendering, Susy?

Group Executive for Agribusiness, who I introduced earlier.

Good morning, everybody. So rendering of the feathers goes into what we call feather meal and the feather meal gets used in fertilizers. It can get used as a feed ingredient in other meat proteins. So it's a very valuable source of protein that can be used in a number of different ways.

Do we sell?

Yes, we do. Yes, we do. 100% of our feathers go into a rendering and which is then sold.

Thank you, Susy. Gentleman on the end.

I've got a very simple question. You mentioned a number of times that you will be resetting the strategy. We, as a shareholder, can we know about the time line?

Sorry, what was the question? What is the time line for that? Okay. So I think I mentioned earlier, the plan is to be able to get an Investor Day in your diaries in the second half of this fiscal. So we're still working on the date for that. So I can't give you a date today, but somewhere between February and June next year.

Brett, are there any questions on the line?

Chair, we have several questions for general business. The first one is from Mr. Stephen Mayne. How many full-time equivalent staff do we currently have? And is this likely to fall over the coming 12 months with the rapid rollout of AI? Which parts of our business and operations are the most prospective for AI productivity gains? And how energetically are we embracing those opportunities?

Okay. So we have over 8,000 employees at Inghams. We have over 800 FTE salaried. -- looking at to check that my numbers are correct. And we have no plans to radically change that.

AI is being incredibly well embraced across the organization. We've got Andrew Lock, our CIO, with us today with me in the front. And not only are our employees embracing AI, but the Board is embracing AI, and we're seeing lots of exciting business initiatives being driven through Claude, in particular, across the organization. So we see it as a very important and exciting part of our future.

Chair, the next question from Mr. Mayne again is as follows: Coles and Woolworths have been under pressure from shareholder resolutions at their past two AGMs over the labeling and salmon farming practices of some of their salmon suppliers in Tasmania. Are we feeling the heat at all from activist groups over our chicken farming practices? And have we noticed that Coles and Woolworths are making more demands for reform from major meat suppliers like us as they come under direct pressure from the ESG movement? And what are the biggest ESG reforms we've made since becoming a public company?

Gosh, that's a big question. So in short, we're not seeing any activism at Inghams. We've -- we're incredibly proud of our animal welfare credentials. You would know, I'm sure that Australia is 100% RSPCA. New Zealand is 100% SPCA. We have incredibly high levels of animal welfare. We take it very seriously. We're always looking to improve.

Some of the key areas of our ESG agenda, I've touched on those two. We're audited many, many times throughout the year. We've achieved an average AA rating under the BRCGS across all of our sites, which is really outstanding and a credit to our Inghams team.

I think I mentioned earlier that New Zealand is now 100% renewable electricity. We have our Marion Bay carbon-neutral chicken coming out of Tasmania. And we continue to improve significantly in the area of packaging and water. So we beat our target of having over 50% of our packaging renewable. We're ahead of target. We aim to get that up into the very high 80s over the next few years. And we continue to focus on really reducing our water footprint and consumption. We reduced that by 2.7% in the last year. So those would be some of the important highlights.

I should just touch on safety. Again, our safety record is exemplary, and we've reduced that significantly, I think, by 57% over the last four years.

Chair, Stephen asked another question on the Australian operation, how many enterprise agreements with unions does our company have across the business? JB Hi-Fi and Domino's both said at recent AGMs that they pay award wages, have no enterprise agreements and virtually nonexistent union membership amongst its workforce. Is our situation the same? Or are we closer to the likes of Qantas and Bega, which are juggling more than 50 enterprise agreements across their operations?

Again, it's a big question. Luckily, we have our Chief People Officer in the room. Grant, walk up to the microphone. We definitely have more than a few EBAs. Do you know the number off the top of your head, Grant?

Yes.

I thought you would. Are you on? Or you can come and share my microphone. you're on.

Yes, I am aware. We have 26 EBAs, 25 in New Zealand and 21 in Australia. And then we have a range of salaried staff, which you mentioned earlier, which is about 800 people. We do have a range of competitive conditions, and we compete against our major competitors and are constantly looking at benchmarking on the market. So we know we've got competitive terms. and we pay reasonably against all our competitors, so we can attract great talent into our business.

Thank you, Grant. Brett, do we have any more questions?

Chair, we have a question from Mr. James. A lot of the focus on questions have been around Woolworths. Could you comment on the other supermarkets and potential customer outlook, Coles, Aldi, Costco, Foodland, et cetera? And what percentage of these markets do we currently have? And are we increasing market share?

Okay. So I'm going to talk broadly about that question before I get into some very commercially sensitive information, which I'm not going to divulge. So those customers, I think Clair talked about this earlier. We are diversifying our customer portfolio. And that's something that there is no doubt that the change to the Woolworths contract provided a catalyst, and we will be a stronger business because of it.

So the likes of those customers that you've raised in your question, we're engaged with. We're growing and hope to grow our business more fully with them over the period of time, but I'm not going to give out percentages, I'm afraid.

Chair, we have a final question online from Mr. Adam. Our company's research has identified your company is likely to be a significant gas user amongst listed companies in the food industry. SIX is an online broker that represents shareholders who are concerned about your exposure to gas risks and have some questions regarding how you are addressing them.

Sharp price increases are highly possible as the East Coast gas market in Australia is predicted to face a shortfall in supply by 2026, which may affect Inghams' operations. The company stated it has plans for electrification of fossil gas-based plants and equipment as a means to reduce its Scope 1 and 2 greenhouse gas emissions and undertaken feasibility studies for on-site renewable energy generation.

Can the Board tell us what the results of that feasibility study was in relation to switching from gas to renewables? And does the company intend to create a plan to transition off gas?

So I think I've discussed that already in terms of with New Zealand, we're 100% renewable electricity already. And we continue to look at ways of reducing our greenhouse gases. I mean we're not a huge emitter, but we are -- we do, of course, have a -- we did a feasibility study, and we're working on reducing that, and we are reducing it year-on-year and are heading successfully towards our 2030 goals.

Anything you want to add, Ed?

No. I mean I think that covers it largely. Soybean meal remains, I think, the biggest generator of our GHG footprint, and that's certainly something that we're looking at the moment in terms of what alternatives exist out in the market. But sustainability continues to be something that as an organization, we're proud of the position that we take, and it's something we continually try to improve upon as well.

Brett, any other questions?

Chair, there are no further questions online for this item.

Okay. I think as there are no further questions and voting is now closed, I declare the Annual General Meeting of the Inghams Group closed. On behalf of the Board, thank you very much and being so engaged and asking so many questions. Thank you for joining us today. Thank you. Have a good day.

Welcome to the Inghams FY '25 financial results briefing. [Operator Instructions]

I will now hand over to Inghams' Chief Executive Officer and Managing Director, Ed Alexander.

Good morning, and thank you for joining us this morning. My name is Ed Alexander, Chief Executive Officer and Managing Director of Inghams, and it's my pleasure to welcome you to our FY '25 results presentation. On behalf of Inghams, I would like to acknowledge the traditional owners, both past and present, as custodians of this land that we are meeting on today.

Joining me for today's presentation is Gary Mallett, our Chief Financial Officer; and our Chief Operating Officer, Anne-Marie Mooney. At the conclusion of the formal presentation, we will take any questions you may have on our results, the business and our outlook for financial year '26.

As you know, Andrew Reeves stepped down as CEO and Managing Director of Inghams at the conclusion of FY '25. I would like to take the opportunity to recognize the tremendous contribution made by Andrew to the Inghams business during his tenure. Andrew stepped into the role when Inghams needed him most, leading the business through the unprecedented challenges posed by the global pandemic, successfully stabilizing operations and returning the company to strong profitability. Andrew made major strides in reshaping and building the culture of the business. His commitment to doing things the right way set the standard for how we operate.

Andrew leaves behind a remarkable legacy after an extraordinary 40 years in business. On behalf of the entire Inghams business, I would like to express our deepest thanks and gratitude to Andrew for his exceptional leadership and wish him every future success.

Turning now to the results for FY '25. Inghams delivered FY '25 EBITDA pre-AASB 16 of $236.4 million, slightly above the prior corresponding period and representing a solid performance despite challenging market conditions in Australia in the final quarter. While group volumes declined, NSP increased slightly and EBITDA per kilo grew 1.8%. Feed costs declined $57.2 million, and our focus on cost discipline delivered good results with operational expenses, excluding feed costs, increasing by only 0.3%. The Australian business faced headwinds from the Woolworths supply agreement changes and broader cost of living pressures affecting consumer demand. That said, we made very strong progress diversifying our customer portfolio.

Our New Zealand operation delivered exceptional growth with EBITDA pre-AASB 16 up 14.3% to $52.7 million, underpinned by volume and NSP growth and reflecting favorable market conditions and successful brand investments. We settled the acquisition of Bostock Brothers in July 2024. The integration continues on track, and the business is performing in line with expectations. While near-term conditions remain challenging, our operational discipline and strategic positioning support confidence in our medium-term outlook.

This table summarizes the key financial outcomes during the period. You will notice that certain key indicators are lower than the prior corresponding period, notably in Australia. Our New Zealand business made a strong contribution in FY '25, and we are now realizing the benefits of the strategy that we have been implementing, including the acquisition of Bostock Brothers and investments in promotions and branding.

FY '25 was something of a tale of 2 markets. Group core poultry volumes were down 1.4%, driven by a 2.5% decline in Australian volumes, partially offset by strong growth of 5.2% for New Zealand, which was aided by strong retail channel performance and the Bostock acquisition. Australia faced headwinds in retail, particularly during the second half, as we transitioned to the new Woolworths supply agreement. However, we did observe some positive momentum in QSR with new business wins driving growth in the second half. Group export sales were down 8.6%, largely due to temporary market closures due to avian influenza outbreaks at non-Inghams farms.

Group core poultry net selling prices increased by 0.5% to $6.31. However, as you can see, group NSP declined sequentially in the second half, down 96 basis points. In Australia, pricing increased slightly across FY '25, but we saw pressure emerge in the second half, resulting in a 2.3% decline compared to the first half. In contrast, our New Zealand business delivered strong NZD-denominated price growth of 2.9%. The Bostock acquisition was a key contributor here, adding 2.3 percentage points to New Zealand growth and 32 basis points to group NSP overall.

Looking at performance by channel. Retail remained solid with growth of 2.1%. Wholesale, however, declined by 9.2%, reflecting the broader dynamics in the Australian market.

Before I hand to Gary to go through the financials, I wanted to comment on the performance of the business between the first and second half of financial year '25. In Australia, our trading performance deteriorated meaningfully as we progress through the fourth quarter. While lost Woolworths volumes were largely replaced, the shift to a lower margin mix, weaker wholesale pricing and softer retail demand late in the year drove a meaningful deterioration in Q4 earnings. In contrast, our New Zealand business delivered strong results with the successful Bromley Park integration, reducing farming costs; effective marketing investment driving brand performance; and higher red meat prices, improving poultry's relative value proposition. As a result, we saw margin expansion and improved demand.

I will now hand to Gary.

Thanks, Ed, and good morning, everyone. Commencing with our profit and loss on an as-reported basis. Ed outlined the changes in core poultry volume and NSP. As a result of these movements and the 10.3% decline in external feed revenue due to the combination of lower feed pricing, which, of course, benefits our core poultry business and volumes, total revenue fell 1.5% to $3.15 billion. EBITDA on an as-reported basis declined 15.3% to $392 million largely as a result of the significant $60.8 million reduction in AASB 16 charges arising mainly from the planned conversion of 121 contract growers to variable performance-based contracts over the past 2 years. Underlying EBITDA pre-AASB 16 was $0.1 million higher than FY '24.

Total costs showed modest growth of 0.8%. There are several factors in this outcome worth noting. Internal feed costs declined $57.2 million due to improvements in market pricing of key feed inputs over the past 12 months. There was an additional $60.8 million operating cost impact due to the above-mentioned conversion of contract growers, although this was largely offset by lower AASB 16 depreciation and interest charges, while total other costs, excluding feed and AASB 16 items, increased by only $7.2 million despite inflationary pressures. This was largely due to our stringent focus on cost management initiatives and operational efficiencies. In summary, despite volume headwinds, we maintained pricing discipline, demonstrated strong cost control and delivered significant feed cost savings, which has supported our underlying earnings for the year.

Turning now to the balance sheet. Our balance sheet remains sound. Working capital saw an increase of $15.5 million from additional processed poultry inventory, reflecting the challenging fourth quarter Australian trading conditions and higher prepayments due mainly to the timing of annual insurance renewals. Right-of-use assets and lease liabilities have both declined significantly versus the PCP from the previously mentioned conversion of grower contracts from fixed performance-based variable contracts. Net debt increased by $82.5 million, including the settlement of the acquisition of Bostock Brothers Limited in New Zealand and the delivery of our capital investment program to support future growth.

Moving now to cash flow performance. Cash conversion remains strong at 97%, slightly lower than FY '24. CapEx and acquisitions totaled $135.4 million with $42.5 million of core and high-growth project investment and as noted earlier, the settlement of the Bostock Brothers acquisition for $31.3 million in July '24. Dividends paid in the period were lower and relate to the final FY '24 dividend of $0.08 per share and the interim FY '25 dividend of $0.11. Both dividends were fully franked. AASB 16 interest and principal payments declined $77 million due to the conversion of contract growers to more performance-based variable contracts and the acquisition of the previously leased Bolivar primary processing plant. Tax and interest payments were also higher in the period.

Now turning to our capital expenditure. Our capital allocation strategy demonstrates disciplined investment in both operational continuity and strategic growth initiatives. During FY '25, stay in business CapEx was $61.6 million, which is basically 100% of pre-AASB 16 depreciation and reflects a catch-up in outstanding projects, which arose as a result of the constraints we experienced during the COVID period. Our investing capital of $42.5 million has been focused on automation and operational efficiency improvements across both Australia and New Zealand. Notable projects included: completing the Amarina Breeder Triangle facility; automation initiatives worth $16.3 million in Australia; our Ingleburn Value-Enhanced decoupling project, enhancing our processing flexibility; the Lisarow fully cooked line upgrade, expanding our capacity; and $9.8 million in New Zealand automation projects. The capital investment is reflected in our balance sheet metrics on the next slide.

Our leverage ratio sits within our target range of 1 to 2x, increasing to 1.8x due to the investments previously mentioned. We also strengthened our financial position during the period through a successful refinancing, as mentioned at the half. We've increased our total facilities by $200 million and extended the weighted maturity by approximately 2.4 years. This provides us with funding flexibility to progress our operational and automation investment programs whilst positioning us to capitalize on strategic opportunities as they emerge.

This leads to our capital management outcomes. I've already covered many of the details in today's presentation, and our capital management strategy is serving us well. Our sustaining CapEx is tracking well above our target range versus depreciation -- sorry, well against, not above, and we continue to execute on several core and high-growth investments. As previously mentioned, today, we have also declared a fully franked final dividend of $0.08 per share.

Turning now to the current feed market dynamics. Feed costs are one of our largest input costs. During FY '25, we benefited from declining commodity prices. Observed market pricing saw Australian wheat down approximately 10% and soy meal down around 17% year-on-year. Looking ahead, current external forecasts suggest continued good grain supply with record wheat production expected globally and strong Brazilian soybean crops. ABARES forecasts Australian wheat production at 30.6 million tonnes, which while down 11%, if achieved, would still be above the 10-year average. These forecasts suggest continued moderation in feed costs, though we maintain our prudent forward-purchasing strategy of 3 to 9 months coverage to manage security of supply and price volatility.

As regular followers of Inghams will know, the market pricing data shown on the slide represents broad commodity benchmarks. Our actual feed pricing differ from these market indicators due to a variety of factors relating to the purchasing and pricing of delivered grain and soybean meal that we use as well as the level of forward cover that we may hold at any given point in time.

I will now hand back to Ed to discuss the segment performance.

Thank you, Gary. Our Australian operations faced a challenging year with core poultry volumes declining 2.5% and revenue down 2.6% to $2.64 billion. The primary driver was the transition to the new Woolworths supply agreement, which has temporarily impacted volumes with retail volume declining by 4 kilotons. As noted earlier, we have successfully secured new business primarily across our retail and QSR customer base, and I believe we are well positioned to secure further new business in FY '26.

While we were successful in replacing lost volumes, increased promotional intensity and pricing pressures have been margin dilutive in the short term. As a result, Australia recorded a small increase in core poultry NSP of 0.5%. On the cost side, our management initiatives delivered strong results. Total costs fell by $61.7 million or 2.4% with internal feed costs down $49.8 million on the back of lower input prices and SG&A reducing by 18.3%, more than offsetting cost growth in other areas. As a result, underlying EBITDA margin largely was broadly steady at 7%, reflecting the business' operational resilience during this period of transition.

New Zealand delivered strong growth with core poultry volumes increasing by 5.2% and revenue rising 4.0% to $512.3 million. A key contributor was the acquisition of Bostock Brothers, which strengthened our market position, added 3 percentage points to volume growth and supported strong retail channel growth of 11.3%. Core poultry NSP in New Zealand dollars improved 2.9%. Retail pricing increased by 7.7%, although this was partially offset by declines across the combined wholesale, foodservice and export channels. External feed volumes fell 7.9% as a result of reduced external customer business, though this was partly offset by increased internal demand from Bromley Park Hatcheries.

Total costs increased by $11.6 million. Internal feed costs improved by $7.4 million due to lower input prices, while our results also reflected a full year of Bostock Brothers operating costs of $19.8 million following the completion of the acquisition in July 2024. Pleasingly, our underlying pre-AASB 16 EBITDA margin expanded by 93 basis points to 10.3%, highlighting both strong operational leverage and the successful integration of Bostock Brothers.

I will now hand over to Anne-Marie to discuss our investment program and sustainability.

Thanks, Ed, and good morning. Our network investment blueprint directly supports our aims -- our key aims of expanding capacity, improving efficiency and supporting value growth. It outlines a comprehensive multiyear investment program across our primary processing facilities, scaling to around $120 million over the program duration. Our investment focuses on automation, strategic infrastructure upgrades and new processing capabilities. We're prioritizing automation in areas with the highest labor demand and those that closely align with key customer plans to drive significant efficiency improvements across our processing network. These investments will strengthen our leadership position in the poultry industry, enhance our competitive differentiation, drive operational resilience, reduce labor costs and align with evolving customer expectations while demonstrating our commitment to quality, innovation and sustainability.

At Osborne Park in WA, we are introducing an automated cut-up processing capability to increase speed and reduce bottlenecks. With a $12 million investment, this project is expected to deliver very attractive returns in both financial and capability terms. The scope includes new big bird and small bird overhead cut-up lines, automated boning machines and vision camera grading system. Key benefits include increased cut-up processing speed, elimination of manual double handling, removal of work in progress bottlenecks and significant labor and yield improvements. Importantly, this creates the foundation for stage 2 expansion as we move towards self-sufficiency in our Western Australian operations. Implementation is well underway with equipment orders placed in the second half of 2025, preinstallation works in the first half of 2026 and commissioning targeted for early FY '27.

Our Murarrie facility represents our largest single productivity enhancement investment at $40 million. This comprehensive upgrade includes 3 automated cut-up lines with in-line deboning. The benefits are substantial, including yield improvements, significant reduction in labor reliance and improved safety and quality outcomes. Importantly, it also unlocks our ability to process big birds from the small bird line. Our implementation time line shows works commencing in September '26, equipment orders in Q1 2026 and installation beginning in Q1 2027 with completion anticipated in the second half of 2027. This project represents a transformational upgrade to our largest processing facility.

The Te Aroha QSR automation project represents our continued commitment to operational excellence in New Zealand and is expected to deliver a compelling ROIC whilst positioning us for future QSR market growth. The new overhead cut-up line replaces 4 circular auto-saws, producing consistent 9-cut chicken portions to exacting standards in addition to labor efficiency and safety benefits. The project forms part of our broader New Zealand automation pipeline. Our KFC line is currently commissioning with an investment in water-jet cutters following in October.

Looking ahead, we're progressing new business cases for other automation projects over the next 18 to 24 months. Each investment systematically addresses labor efficiency, yield optimization and capacity expansion whilst maintaining our focus on animal welfare and food safety standards.

I'm proud to highlight Inghams' continued leadership in people safety, animal welfare, sustainability and food quality throughout FY '25. Our safety performance improved with total recordable injury frequency rate declining by 3.6% to 4.25. We maintained 100% RSPCA-approved and SPCA-certified certifications across all broiler farming facilities. And we achieved an average Global Food Safety Initiative BRC rating of A or better with 80% of sites earning AA ratings. Significant sustainability milestones include moving to 100% renewable energy in our New Zealand operations and achieving Climate Active Carbon Neutral certification for our Marion Bay brand, Tasmania's first carbon-neutral certified chicken. We exceeded our 50% recycled content packaging target, achieved 28% waste intensity reduction and reduced water intensity by 2.7%. Our 2025 sustainability report will be published with our annual report in October.

I will now hand back to Ed.

Thank you, Anne-Marie. Turning now to our guidance and outlook. FY '25 was a year of significant change for Inghams with the completion of the Woolworths contract renewal, onboarding of new customer volumes and challenging market conditions, particularly in the fourth quarter. While lost Woolworths volumes were largely replaced, the shift to a lower margin mix, weaker wholesale pricing and softer retail demand late in the year drove a meaningful deterioration in Q4 earnings. We have been and will continue to act decisively to address these issues. We are reducing excess inventory and recalibrating production settings to match demand in each channel. And we are implementing cost reductions across the business. While these initiatives will impact H1 earnings, they are expected to underpin a stronger H2 performance.

Inghams retains a strong competitive position built on attractive market fundamentals and industry-leading capabilities. The performance of our New Zealand business illustrates what is possible when the fundamentals are executed well with EBITDA doubling between FY '23 and FY '25, significant gains in customer partnership rankings and reduced staff turnover. This success was driven by a systematic focus on people, on partnerships, on innovation and on network strength.

Our FY '26 strategy represents a disciplined approach to current -- disciplined response to current market conditions and will set a strong foundation for long-term value creation and a return to profitable growth. Our focus centers on 3 priorities: firstly, matching supply with demand to improve market economics and promotional effectiveness; secondly, delivering outstanding customer service to maintain existing volume and win new business; and finally, optimizing our cost base to offset inflation and rebuild margin. While FY '26 will be a year of disciplined execution through challenging market conditions, these strategic choices position us strongly for long-term value creation.

Today, we are providing FY '26 guidance for underlying EBITDA pre-AASB 16 of between $215 million and $230 million. Earnings are expected to be significantly weighted towards the second half, reflecting both the impact of weaker Q4 '25 trading conditions and the timing of benefits from the operational changes underway.

Our FY '26 outlook is shaped by the following factors. Group core poultry volumes are expected to be slightly higher in FY '26. In Australia, we expect growth in non-Woolworths retail and QSR, partially offset by a targeted reduction into wholesale. We expect New Zealand to continue to perform well, supported by strong brand performance and favorable category conditions. Net selling prices are expected to be slightly lower in FY '26, reflecting recent customer pricing outcomes, wholesale market conditions and competitive intensity for new business.

Operating costs, excluding feed, are expected to rise modestly in FY '26. While general inflation would otherwise drive higher costs, our cost reduction initiatives across labor, procurement and site level operations are expected to deliver annualized savings of $60 million to $80 million below what costs would have otherwise been. Feed costs are expected to provide a modest benefit, contributing to second half margin recovery. And capital investment is expected to be between $80 million and $100 million. Overall, our FY '26 outlook demonstrates a disciplined response to current market dynamics while prioritizing customer relationships, disciplined cost management and positioning the business for sustainable, profitable growth looking forward.

That concludes the formal presentation. I will now hand back to the operator, and we will take your questions. Thank you.

[Operator Instructions] Our first question today comes from Ben Gilbert from Jarden.

Just the first one, just really trying to dig into Q4. It looks like it's a pretty material deterioration. And one of your customers or a QSR operator talked to better margins in Q4 and it sounds like they got better terms on poultry. Just interested in what -- I appreciate the wholesale side, but have you had to give up more than you might usually have around feed price reductions, et cetera? Because if I then sort of connect that into '26, typically, you guys, when feed prices come down, you do get a bit of a tailwind. So I'm just trying to piece what exactly outside of wholesale pricing, if there have been any, terms impacting Q4? And why aren't you expecting to get any feed benefits into fiscal '26?

Yes. Thanks, Ben. I mean I look at the Q4 deterioration really driven by 3 drivers. The first, obviously, at the end of February, we had the final transition of the Woolworths volume. And whilst, as we said at the Macquarie update, that was largely replaced, there was a mix impact that then flowed through to the Q4 earnings profile. Secondly, we made an assumption that our competitors would switch supply to fund the new Woolworths business. But instead, they set processing volumes incrementally, which really drove the excess, I think, in Q4 and then subsequently impacted pricing, both at a wholesale economics level as well as from the effectiveness of our promotional levers.

And then finally, we saw this retail market soften sort of materially, I suppose, in Q4 as well. And I think the whole combination of that really meant that we had less volume flowing through the retail channel. We had more volume flowing through the wholesale channel, all at a time when there was a pretty material decline in wholesale average sale price. That's really how I sort of picture the Q4 outlook.

And the feed -- and typically -- appreciate you've got some pass-through to consumers and your customers, but typically, you do get a bit of a benefit from feed costs on the way down. And in most case, I think you also typically have longer dated hedging than your peers. But historically, you've got a bit of a benefit as feed falls. It doesn't look like you're expecting that this time.

It's Gary. I think there's always that timing difference on the way down. So no, I don't think that's right. I mean we've absolutely shared some of that feed benefit with our customers, but I don't think it's different to the historical.

And then just final one for me. On this as well, just around the end market discussion. There's been a lot of -- if you look in QSR, just an enormous amount of people now talking about big rollout plans and McDonald's, et cetera, talking that poultry is outperforming within their portfolio. Poultry typically performs better within grocery, and I think they've called it out as being stronger given it's a lower-value protein. I'm surprised with the market situation. Is it the market or the competitive standpoint more so with your peers keeping -- putting more volume in?

Is that -- are you talking specific to our observation around a softening of retail volume in Q4, Ben?

Yes. Yes, broadly in the market as opposed to Inghams specifically.

I'd say 2 things. I mean, firstly, I think the long-term proposition of poultry remains very true, which is that we see long-term growth. It remains sustainable, versatile and has a pretty significant cost advantage versus other proteins, and we're certainly seeing the benefits of that in New Zealand at the moment. So from a long-term perspective, I don't see any change.

From a short-term perspective, again, we also hear from the QSRs about driving poultry -- my sense is that there is -- in Q4, in particular, there was somewhat of a decline in consumer confidence and also there was a biding of cost of living pressures. And the combination of that meant that we saw an impact. And obviously, for us, that was also coupled with the changes in the Woolworths contract. So look -- so that's our observation. I don't think anything changes structurally on a long-term basis. Short term, we do feel like there was a softening.

Our next question comes from Craig Woolford from MST Marquee.

So can I just clarify the -- you referred to it as an operational reset. Just trying to wrap my head around the pressure that you see -- we saw in the fourth quarter and you see in FY '26. Do you see it as issues that are transitory in nature? Or is there a more fundamental point of pressure of competition because -- that comment you made in response to the earlier question around competitors switching supply, but instead increased supply does sound like a more fundamental concern?

No, just transitory in nature, I think, Craig. From what we've had to do, we built up too much inventory in Q4 because of all the reasons identified. So we're now having to slightly reduce our production settings to match supply with demand. And then we also need to continue to look at what our cost optimization activities are. And from that perspective, I see it as very transitory. There's also an element where whilst there's a lot of benefits with a more diversified customer base, you also have some supply chain inefficiencies that come as a result of that. And so that's something that is transitory and we'll just deal with particularly over the first half of this financial year.

Okay. That makes sense. The -- so just clarifying on pricing. I'm reading from Slide 9 as I ask this question just around the performance in the second half. It reads like NSP was down in the second half in Australia versus the first half due to weaker wholesale and foodservice pricing. The wholesale will have been more volumes in that wholesale channel as well as lower prices, no doubt, like a mix effect. Just explain some of the other factors because it looks like pricing was decent in retail. QSR, there's no comment. But was foodservice pricing down? Or was it just the wholesale component?

It was predominantly wholesale. So that's the main game here. And you can see that on the next slide on Page 10, what's happened. So yes, retail relatively flat. And yes, foodservice is just in the category, but it was wholesale that's the factor.

It's just how you define the category. Yes. Okay. So is there an update you can provide as to the share that wholesale has now represented? Because the overall volume share of foodservice wholesale export hasn't changed dramatically. Is there much of a channel shift in your volumes? Or is it just the pricing within that wholesale channel?

So big picture, not really. But on -- again, on that next slide, Page 10, you can see there's a shift from retail into wholesale over that Q4 period. I think we're expecting to see that, that will correct itself into FY '26 as well. So big picture, not really much change, but you can see on Slide 10 that in the detail, there's a little wink, especially Q4.

Our next question comes from Phil Kimber from EAP (sic) [ E&P ].

Just first question was just around -- you said that the fourth quarter, you really saw consumer value change. I'm just wondering if it was a change in the consumer value set, which I would have thought has been going on for a while. Or was it more a change in the supermarkets' view of that and reaction to the consumer environment? Just wondering if you could clarify what you meant around the fourth quarter change.

Look, Phil, what we just observed was a softening of demand, particularly through that retail channel in the fourth quarter. I don't think anything structurally changed as it relates to customer perception of poultry or otherwise. As I say, based on our information, it was a good consumer confidence from a macro perspective as well as a continuation of cost of living pressures. And to some extent, I think we're increasingly seeing the supermarkets responding as well to those 2 drivers.

Okay. So it wasn't -- it's not just your data. You're saying the overall market data as well is what you're...

Phil, that's exactly right. That's right.

Yes. And then just on the feed costs expected to deliver a modest benefit. I mean I think you did -- I think it was $57 million or $60-odd million in FY '25. In terms of thinking about the shape of that, I assume modest means less than what you did in -- a smaller incremental benefit than you got in FY '25, if I can just sort of confirm that thinking. And then secondly, in terms of how it's sort of phased, I would have thought more of it's going to skew to the first half than the second, but I could be wrong. So just anything on that would be awesome.

So yes, I think modest is less, as you pointed out. And yes, I also would agree that in the comp to PCP, it would be more in the first half.

Do you expect some benefit in the second half still versus PCP? Or has it sort of washed its way through by then?

So second half is a long time into the future. So hard to be projected. But based on our, I guess, thoughts as to go, we're seeing it relatively flat through FY '26.

Our next question comes from Ajay Mariswamy from Macquarie.

Just in relation to that ASP decline you expect to see in FY '26, how does that compare to where you see market ASP in poultry being? And what's the view on the level of supply going forward in FY '26?

If I understand your question, Ajay, I suppose what we saw was the decline in ASP through the fourth quarter for all the reasons identified. And then what we are seeing is having made decisions at the back end of that quarter as well as the beginning of this financial year to match our supply with demand, we are starting to now see improvements that are flowing through pricing from a wholesale economics standpoint. And we expect that to continue to improve as the half progresses. So I think from an overall pricing perspective, we expect it to be marginally down, but that's largely driven by the exit run rate. But we are seeing improvements as we stand here today.

I guess if I ask it in terms of relative to where competitors are sitting in terms of ASP, if you have any visibility on that, is your ASP decline sort of in line with where your competitors would be into those channels? Or is there something else driving ASP decline because, for example, you might be sitting slightly higher in this current period?

Yes. Look, Ajay, I'm not sure what our competitors' pricing is.

Sure. And then just in terms of the promotional environment at the moment, do we see that potentially intensifying given that consumer sentiment is still a bit soft, particularly around chicken? Or given that other meats such as lamb and beef are sort of seeing a little bit of price inflation, do we expect to see that promotional environment to soften a little bit? And any margin implications to that?

Look, I mean, I think in many respects positively, we've seen over the last few weeks some pretty aggressive $8.50 pricing across all the retailers on breast fillet, which is certainly helping to improve our relative market economics. Yes, I think whilst there's still some deterioration in demand, you expect retailers are going to keep driving poultry as the lowest-cost protein. I remain of the view that it's positive. And look, in terms of price relativity, a big driver of the New Zealand outcome for the half was because of the significant price increase on red meat. So that flows over to Australia. I think it creates some significant positive tailwinds for us.

Your next question comes from Evan Karatzas from UBS.

So I just want to confirm this as you're seemingly hinting at it. The original plan for those excess volumes in the fourth quarter or you had in the fourth quarter was to put it into the retail channel, but then that channel declined, I don't know, 10% odd in the fourth quarter. Is that correct?

No. The original plan -- what did we assume? We assumed that the competitors who picked up the Woolworths business from Inghams would pull some of their volume from other channels and use it to fund the Woolworths volume. And therefore, we didn't completely downset or reduce our production volumes to match the lost business. As it happened, our competitors set incremental business. We didn't fully downset, and that was one of the driving factors behind a long or excessive production [indiscernible]. In addition to that, a softening of retail consumption drove down pricing.

Okay. Well, then why in your view, do you think, I guess, you were outcompeted or lost those volumes to the other channels to your competitors is what it sounds like. What happened there?

You're talking about -- are you talking about retail, Evan?

Well, you made a comment that you didn't think your competitors have excess supply, but they did. And they were clearly able to place it and you weren't, had to take it to wholesale. So I'm just understanding why that was.

I don't think we said that they placed in retail. So I think what you saw is more or less...

Okay. I'll move on [ to the last one ] then. You're saying slight price declines in your FY '26 assumption. Obviously, the 4Q price declines are a fair bit more than slight. Can you just marry that up? Are you expecting a recovery from current pricing even though you've still got, I guess, excess supply that needs to find a home? Just trying to understand that, please.

Just one more time, Evan.

Sorry. Okay. Your guidance implies a slight decline in pricing FY '26 assumptions. Obviously, the 4Q, the price declines are a bit more than slight. So I'm just trying to marry that up. Are you expecting a recovery from the current pricing levels?

Yes. We'll see -- exactly. So we'll see some recovery during the year. But overall, we still expect it will be down year-on-year. So yes. So therefore, your first half will be more impacted than your second half flowing through there.

Thank you. There are no further questions. So I'll hand back to Ed to close the meeting.

Thank you, Josh. Look, on behalf of the Inghams management team, I would like to thank everyone for joining us today. And we look forward to meeting many of you over the coming weeks. Thank you very much.