NIB Holdings Aktie

Well, good morning, everyone, and thank you for joining us for nib's FY '26 Half Year Results.

I'm Ed Close, nib Group CEO and Managing Director; and I'm joined here in Newcastle by our group Chief Financial Officer, Nick Freeman.

We're pleased to deliver a strong set of results today, reflecting disciplined growth in our core markets improved customer value and significant progress in operational and digital transformation.

Before we begin, I'd like to acknowledge the traditional custodians of the land we're joining you from today, the Awabakal people. and pay my respects to Elders past and present.

This morning, I'll step through our first half performance, the drivers of the result and the strategic progress across our business. Nick will then take us through the financials. And before I close with outlook and open up for questions.

Turning to Slide 5. Our purpose, your better health and well-being continues to guide how we support customers and health care providers. At nib, we remain focused on delivering great value health insurance and support services to our customers, underpinned by high-quality products and improved access and affordability. This ongoing focus continues to translate into sustainable commercial outcomes for our shareholders, while supporting a positive contribution in the communities where we operate.

So if we jump across to Slide 6 and looking at the first half '26 highlights. This was a strong group performance in line with expectations with positive contributions across all business segments, and reflects the disciplined execution of strategic priorities and a continued focus on delivering great customer outcomes.

Pleasingly, group underlying operating profit of $129.1 million was up 22%, and supported by top line revenue growth of 7.7%. In our Australian residents business, we delivered another consistent high-quality result with disciplined policyholder growth and margins maintained in the 6% to 7% target range. Our adjacent businesses delivered their highest first half year since FY '19, contributing $30.4 million, up more than $20 million on the prior corresponding period. International and New Zealand segments achieved particularly strong outcomes. Our productivity and performance agenda continues to gain traction.

Since FY '24, we've delivered $39 million of cumulative productivity benefits across the group with material reductions in key expense ratios. And we've also continued to simplify the portfolio, announcing the sale of the World Nomads International travel insurance business, sharpening our strategic focus on our core health insurance markets. with the review of the remaining Australian and New Zealand travel business ongoing.

So if you move across to Slide 7, and you can see that our performance is translating across the key group metrics. PHI lives covered rose to 1.95 million, our largest customer base ever with our value proposition continuing to resonate on both sides of the [ Tasman ]. Customer satisfaction remained resilient, with group NPS at plus 33%. There were some temporary impacts in New Zealand as a result of pricing and product changes, which were largely offset by positive experiences across our other business segments.

A key highlight of the result was the significant improvement in the group operating expense ratio, which reduced 100 basis points to 16.5%. And it's a result of our direct focus on productivity, automation and our AI agenda now delivering scalable results.

ROIC increased to 14.7% and reflecting stronger operating performance and disciplined capital deployment. NPAT of $82.9 million was in line with expectations and does reflect the lower investment income relative to a strong comparative period. And the higher one-offs as we previously guided. The Board declared a fully franked interim dividend of $0.13 per share, consistent with the prior year.

So if we jump across to Slide 8, and we'll go a little deeper on the business segments. Australian residents delivered another strong result. Our disciplined focus on policyholder growth across our high-value segments, NPS at plus 35, 89% of interactions now self-serve digitally and the non-marketing expense ratio of 5.8% were all key highlights. nib continues to support the long-term viability of the private hospital sector and our hospital payout ratio is now tracking higher than pre-COVID levels and in line with expectations.

International's positive contribution continued, where we delivered a strong UOP result, up 23% and with stable gross margins and tightly controlled expenses. Policyholder growth was particularly driven by PALM participants, our temporary graduate focus and skilled workers. Customer outcomes remain a key strength in this segment with record NPS of plus 63. And pleasingly, we retained preferred provider status for PALM and have continued to strengthen those relationships in the seasonal worker community.

Over the ditch in New Zealand, the recovery is progressing at pace. We made a strong return to profitability with UOP of $3.9 million, up $14 million, driven by our management action plan and a stabilization in claims inflation. As we saw last year, repricing does bring short-term pressure on policyholder trends but has been necessary to restore the business to sustainability. Claims inflation is moderating, and our focus is now firmly on customer experience and value.

Across the wider non PHI businesses, Health Services achieved profitability for the first time, in line with our expectations. Our investment in ItsMy Group continues to support more than 10% of all private health insurance industry sales. and Thrive delivered UOP growth of 4.8% and returned to positive participant growth in January 2026.

If we have a look at productivity on Slide 9, this highlights how our digital and AI transformation is translating directly into improved customer and commercial value. Our productivity gains are now structurally embedded resulting in the group operating expense ratio reducing by 100 basis points. And this is underpinned by cumulative productivity savings of $39 million since FY '24.

In Australian residents, 94% of claims are now processed within 24 hours and 86% of are processed unassisted using automation. More than 600 of our operational staff are now using internal AI tools, supporting over 250,000 interactions since January 25. These at scale initiatives are enabling further investment in our customer value proposition. Almost 80% of our customers now benefit from no or known gap coverage. And we've expanded no gap Dental optical and our physio networks to more than 2,000 locations. This is saving customers more than $45 million in out-of-pocket costs. And importantly, we continue to secure multiyear agreements with hospital providers with more than 80% of our total benefit outlays now under a partnership model.

More than 11,000 customers were enrolled in health management programs in partnership with our business Honeysuckle Health, and these were delivered through virtual means for 93% of customers, and these are now translating to better health outcomes and experiences for our customers.

So with that, I'll pass to Nick and we can go through the results in a little more detail.

Thanks very much, Ed. If I look at the overall group financial performance, the highlights of this result with a strong UOP growth at 22% higher than last year, managing the arhi result into the target range with reported margins at 6.8% and underlying margins at 6.5%. The rebound of the adjacent businesses, which had their strongest result since pre-COVID, highlighted by the performance of the international business, the recovery in New Zealand and our Health Services segment generating a profit. And the continued progress on the productivity agenda, with the operating expense ratio reducing by 100 basis points to 16.5%.

As we announced on the 19th of December, we did take a noncash impairment in the nib drive segment of a little over $4 million and nonrecurring costs were impacted by a net cash expense before tax of around $8 million in the first half result relating to historical adjustments to the Australian government rebate and to the New South Wales Hospital insurance levy.

Our investment income was down, driven by markets generally and mainly the reduction in cash rates and also our sustainably biased equities portfolio underperformed given the strong performance of the mining sector over the last 6 months.

Turning now to Australian Residents Health Insurance. Our core arhi business continued to deliver in line with expectations with revenue growth of 7% and margins in the target range. The reduction in margin was expected given the elevated margin profile of past periods and growth was a little lower than we would have wanted given competitive market dynamics. We also did have negative product mix impacts on revenue. However, the margin impact relating to that was more limited given the downgrading occurred in the higher claiming tiers.

Claims inflation was 5.3% or 6.1%, including the impact of the New South Wales bed rate and has been offset by pricing and productivity, which will come to in the following slides. Productivity was definitely a highlight with the overall management expense ratio below 10% and our non-marketing expense ratio at 5.8%, which is the lowest since 2017. Looking and just going a little bit more into pricing, margins and inflation. In this slide, we're trying to unpack inflation a little bit more and our pricing and productivity response. I'll just take you through this. It might take a little while, but bear with me.

So starting at the bottom left, you can see that we had very high medical inflation driven by investment in customer benefits, mainly expanding our known GAAP and non-GAAP offerings. Hospital inflation was also elevated given the New South Wales bed rate impact and our support of the private hospital sector. However, the chart at the top left then pulls apart those impacts as a number of those are unlikely to reoccur.

Starting with our claims inflation, excluding the bed rate impact of 5.3%, we then expect the impact of investment in known GAAP and non-GAAP to reduce given it commenced in October '24. We'd then like to highlight what we've termed risk equalization volatility. There's been some market commentary around the increase in hospital claims and payments, especially in the December quarter, and we did see this. The growth in the industry gross deficit was over 4% higher in the first half than in the preceding 12 months, and this was especially notable in the December quarter.

Given that we basically pay the entire net risk equalization transfer in the pool, we did see our inflation increase as a result, and one would assume that they benefited other participants. We're not able to provide an indication as to whether that will reverse as that depends on the behaviors of the other participants in the pool, but we are just highlighting this impact as unusual. If we adjust for those impacts, we come to a base level of inflation of around 4.1%, which does include mix and downgrading effects.

Now let's look at our pricing on which the mix impact was negative 1.3% and which means that we need around 5.4% pricing to cover inflation. And given that our pricing is 5.79 in the March quarter and 5.47% from April 26, we think our settings are in a reasonable range to continue to manage gross margins within the ranges we are targeting. Our hospital benefit ratio is now ahead of pre-COVID levels, and we're focused on continuing to manage claims inflation with an end-to-end strategy having been developed and one which will be executed across the rest of this calendar year. We remain focused on productivity and delivering enhanced value to our members.

Turning now to margins. As we just highlighted, we think the settings are in the right range from margin stability, and there was relatively little impact between our underlying net margin and reported net margin. The margin impact from the chain to the LIC was quite small, highlighting that our provisioning at June '25 has been appropriate. There has, however, been a reduction in the LIC due to faster payment speeds in the first half of '26 which has again been the subject of market and commentary and may be a factor in the risk equalization volatility we've highlighted. Overall, our estimate is that the LIC reduced by $28 million to $29 million due to this factor. And again, the December LIC is so far supporting this conclusion through hindsight analysis.

If we then look at cash claims growth to incurred claims growth, I just let you know that, that's in the second and the slide on Page 32, in which we do provide a breakdown of further incurred claims information. If we adjust this impact for payment speeds and volume impacts, then cash claims and incurred claims growth align. And I'm sure a few of you want to unpick this a little more in our calls this afternoon in discussions this week.

Moving now to the adjacent businesses and given how busy the reporting season is this year, I'll not spend too much time on the other businesses other than to note that their strong performance with a combined up of $30.4 million this year versus 9.9% in the prior comparable period, and this was the best performance since the first half of '19. Our international business delivered a strong performance with UOP growth of 23%. And the New Zealand turnaround was notable with our recovery plan taking effect in a more stable inflation environment, albeit at elevated levels, and our Health Services segment delivered a profit as expected. We sold the international perimeter of our travel business. And given that most of the net assets are intangibles, there will be a high cash realization from the sale of around $20 million.

And with that in mind, if we could now jump to Slide 21 on capital management, our ratios continue to strengthen, and the PCA ratio for the health fund was at 1.91x, which is a similar level to last year and above our target minimum of 1.5 to 1.6. We look at capital management initiatives in the second half as the travel strategic review continues and funds are received.

And finally, on cash flow. Our first half '26 operating cash flow was positive and ahead of the prior comparable period. And the normal seasonal trend is continuing, and we'd expect strong cash generation in the second half given pricing and rate protection factors.

And with that, I'll now hand back to Ed.

Thank you, Nick. So I just wanted to pause and spend a short moment on our strategy. It's fair to say it remains clear and focused across our business.

Firstly, we aim to grow and strengthen our core PHI businesses in Australia and New Zealand. We'll continue to invest in customer propositions, and we'll continue to focus on delivering our above system multi-brand, multichannel growth. Scaling health management and claims optimization programs are also a priority.

Secondly, we continue to scale our adjacent businesses to deliver value back to private health insurance, including our focus on health services, the ItsMy Group platform and our scale-up efforts in the NDIS plan management.

And thirdly, we continue to embed productivity powered by digital and AI. We're simplifying the business model, and we maintain a disciplined capital allocation focus. This strategy is underpinned by our people, who continue to deliver exceptional outcomes for customers and is strengthened by our proactive approach to risk management. We're pleased with the ongoing execution and progress on our key priorities, and this is reflected in our first half performance.

So if we jump across to Slide 25, I also wanted to dive a little bit deeper on our investment thesis. Private health insurance is a core pillar of Australia's health care system. It funds around 40% of hospital episodes and the majority of elective surgeries and continues to ease the pressure on the public system. Participation remains stable and long-term growth of 1.5% to 2% is supported by positive government policy and an aging population. The industry is capital light, cash generative and operates with resilient regulatory settings.

And within this environment, nib is differentiated. We continue to deliver above-industry policy growth, maintain disciplined cost control and leverage our scale, digital data and AI capability. This is alongside our targeted health services strategy, which strengthened outcomes in our core PHI proposition. These things taken together position nib to deliver sustainable growth and long-term value for customers and shareholders.

And lastly, if we jump across to Slide 26, and we'll just step through some of the FY '26 outlook and guidance. FY '26 Group UOP continues to track in line with expectations. We expect FY '26 Group UOP to be in the range of $257 million to $260 million for the full year. Our disciplined productivity program remains a key focus, and we'll continue to support performance with further reductions in the group operating expense ratio expected.

Across the portfolio in Australian residents, we are targeting above system policyholder growth and a stable full year underlying net margin in the 6% to 7% target range. International is expected to continue its strong contribution to group UOP. And New Zealand is recovering strongly with a clear focus on customer experience and value. Health Services profitability is expected to continue for the full year after that important milestone at the half. And in travel, the strategic review is well progressed.

So with that, we'll now open up for questions, and we'll pass to the operator.

[Operator Instructions] First question from Julian Braganza from Goldman Sachs.

Firstly, I just want to be clear on what's happening with claims inflation just on a like-for-like basis. You're saying underlying base inflation, 4.1%, headlines, 6.1%. And I think previously, at the full year result, you flagged 4.9%, including the bed rate impact. So there's a few different definitions here. But I just want to be clear what's happening since FY '25 to first half '26, and what is the outlook for inflation given incremental hospital indexation? And I'm just trying to lead into in the second half '26 and FY '27 to align with the rate that you've got. So any color around that would be great.

I think in FY '25, Julian, it will be the investment in GAAP and non-GAAP that we didn't pull out. So in this case, we're pulling it out because we don't think it will repeat into the future just to give you a bit more guidance, it also gives you a bit more of an indication about where we're seeing that base inflation and then why we've priced where we have.

As to the risks and opportunities into the future, I guess something I can turn to add. But again, that's something that's in the future, and we'll adapt to those as they come up.

Yes, I think just building on that, Julian, I mean, when we think about what we're remaining alert to. You referenced indexation. And certainly, as part of our expectations and commitments to the hospital sector viability, we've been doing our bit. And I think we've talked to some of the key data points around our ongoing support for the hospital sector.

And that also correlates to utilization as well. And so given our strong track record of growth, we are anticipating utilization to continue. And that's another important element of ensuring that there's adequate volume flowing through the hospital sector.

In terms of our actions underway that we can proactively manage that. We referenced that we're embarking on a fairly comprehensive end-to-end review of our hospital contracting and broader benefits management strategy. A couple of things that are interesting that we're working hard on is around average length of stay. That is an opportunity for nib. When we look at benchmarks to peers in the industry, that's something that we are working harder and presents some opportunity moving forward. And equally around the shifting patterns of care, particularly with a focus around short stay, day and community-based care. And again, when we benchmark ourselves to industry, that is also an opportunity for nib.

Okay. Got it. And just to be clear, so if that 4.1% underlying number continues to track higher with headline indexation, how are you thinking about just that product mix impact. Have you factored in any benefits from the downgrading from gold to silver and bronze on the claims side of the equation. But I just want to understand how you're thinking about that downgrading, particularly given you'll be putting that -- the rate increase through in the second half.

The 4.1% includes the downgrading that occurred in the period. And so that's why we've deducted the downgrading from the pricing.

Yes. And sorry, I mean, in terms of an offset, that 4.1% is a 4-point just in terms of the underlying base inflation, if that continues to track higher, what happens, like on the other side of the equation, downgrading, how can that track in the second half and into next year? Can be lower -- can the down going to be lower to offset the inflation base? That's just trying to understand.

It could be lower or higher.

Yes. I think what I would say, Julian, is if you think about some of the pricing decisions that we made in April '25, which were quite strategic in where we applied those that did correlate with downgrading in what we would describe as lower value segments and tiers. And so we'd expect that, that is largely washing through as well. So in terms of your margin impact overall when you look at downgrading and that claims experience, with focused on a fairly neutral impact overall.

Okay. Got it. And just a last question for me on expense ratios. So down to $9.9 million, just how much flexibility just in terms of what you're doing there, how much scope is there to reduce that further from here?

So we've touched on our forward-looking expectation that productivity will continue to deliver benefits. We're really pleased with the progress, and we've highlighted the step change that is now very much structural. What we do want to remain committed to and we talked about the investment in customer benefits, but also our investment into our growth and distribution.

So we remain disciplined around how that productivity will unlock value, but also important to think about where do we redirect some of that value back to customer benefits and also our growth strategy. So we're not putting specifics out there at this point, Julian, but we are expecting that there's still some opportunity ahead.

Next question comes from Siddharth Parameswaran from JPMorgan.

Good morning, gentlemen. Maybe just a question first just on the lapse rate that has been rising for a period of time and seems very, very high by industry standards. I was hoping if you could just provide more detail behind the comments that you've given us as to what's happening? And maybe just some comments on whether you think this is where it will stop or whether it will get worse and related to that, just -- I know you have some assumptions on amortizing your DAC. I just wanted to understand where we are in terms of how close you are to those assumptions?

Yes, I'll provide a few insights on lapse performance. And I'll pass to Nick to put some color around the DAC.

So on the lapse drivers, I mean, yes, it is elevated. It is an opportunity for us, absolutely. That higher lapse rate is predominantly driven by a few key factors. Firstly, our high sales mix, generally, about 1/3 is attributable to that lapse experience as well, particularly around competitive responses to our strong sales performance. And so win back activity is something that is -- we're watching closely as competitors understandably respond to our high sales and distribution focus. And so that is a big driver of what we would call that short-term lapse.

Equally, I touched on the pricing approach that we took over the last 12 months around prioritizing those high-value segments and working out well, where does nib as a business model, want to prioritize. And that has also being reflected in that lapse impact as we have been quite strategic around product design and pricing optimization.

And then the other sort of 1/3, if we think of it in three parts, is absolutely an opportunity for us. And so we've been -- we talked about the government rebate adjustments that we have made, and we're in the process of refreshing our go-to-market strategy with a big focus on the nib brand itself. And so we remain optimistic about the opportunity to really intervene in that lapse and retention space. And we do expect that there should be some moderation moving forward. Do you want to...

Yes. Yes. And in terms of the DAC, we've still got headroom. We amortize over 5 years, and there's still headroom above that in terms of the average life.

Great Okay. Just a second question that I had was just around claims inflation in arhi. Just to I ask if you're benchmarked where your inflation is coming in versus years because it seems -- I mean from taking your numbers today, if I was to adjust for the mix effect, which seems to be benefiting you, it seems like inflation is extremely high. Like headline 6.1%.

I understand there's a reinvestment in customer benefits, but the mix effect effectively more than offsets that. So it seems like underlying inflation is well over 6%. You got a rate increase, which is 5.4%. Just keen to understand exactly Well, firstly, will there be anything which will bring that inflation down perhaps on the hospital side. You touched on a couple of things, but the -- I think the underlying pressures are more the other way that hospitals are asking for more. So I was just hoping you could help us understand some of these numbers on the inflation side?

Yes. I think I'll talk to some of the experience, said. So I can't -- crystal ball where others have been around their hospital partnership arrangements, but we've talked consistently now for or so around the work we've been doing in the hospital sector. And so from a contracting time line and sequencing perspective, we struck several multiyear agreements over the course of the last 18 months. And so we're certainly feeling that indexation impact through those numbers, and that was expected. And I referenced the 80% of benefits outlay that are now under a partnership agreement.

Obviously, indexation plays an important role there, but it also gives us good predictability around what we're expecting moving forward, given 80% of the benefit outlay is under contract.

If I think about some of the other factors that are playing through. We have a high proportion of our customer base in New South Wales, and that is certainly seeing higher levels of inflation, again exacerbated by the New South Wales bed rate impact. And so our member-based proportion is obviously skewed to that state.

The other thing that we've been spending some time on is looking at our customer proportion that sit on gold relative to peers. And if you think about, again, our strategy over a long period of time, we have a much lower proportion of our base on gold. And so what we're actually seeing is that as the market generally responds to the sustainability or lack thereof, should I say, of the gold proposition that we've been a little bit out on that timing and lag effects that might be starting to play through around gold. So there are some of the factors.

I mean you asked about the management response and I've talked about disciplined pricing. I've talked about the productivity approach, giving us optionality around our expenses. And we've talked about that end-to-end claim strategy with a big opportunity around shifting patterns of care.

And then I think the last point you referenced this was we have been quite deliberate around our investment in customer benefits. And so that medical inflation line that we highlight there is really table stakes for us is we see it as a critically important part of our proposition, and we're committed to making sure that investment resonates.

A couple of comments if I said would be the gold is an important point. We're at about half the industry proportion of gold given our history and that we target a different customer base. So while everyone's reduced -- been reducing on gold, given what Ed just talked about, the relative reduction for the rest of the industry versus nib is different.

But if I go back to sort of industry and so forth, it's hard for us to comment on any single participant. But I think what we often talk about is, we think that the best guide to where people are seeing industry inflation where industry inflation is, is what people put in their pricing. And so an industry of about 4.5% less. But the majors are more like 5% with the exception of 1%, I think gives you an indication about where that is.

Now relatively, if I take 5% for the majors and 1% downgrading that comes to 4% , I could -- we've got us saying at about 4% -- do you know what I mean, like I'm not seeing perhaps as much difference as you are seeing, but happy to talk it through. And I think, yes, that slight elevation for the factors that Ed's talked about.

Next, we have Nigel Pittaway from Citi.

I'd just like to ask a first question on high policyholder growth and really what you're trying to tell us there. I mean I think in the one breath, you're saying you are focused on high-value segments, but then you also said you were quite disappointed with policyholder growth. You've obviously cropped your policyholder growth target for the full year. And an increasing share of your policyholder growth is coming at the moment from aggregators, which I understand have been quite aggressive during the period.

So can you put that all together for us to exactly what you're targeting and how we should think that policyholder growth moving forward?

Yes, thanks for the question. So yes, I think we've been quite clear around our expectations moving forward. We're talking to above system and systems tracking at around 2%. And so we have to be disciplined. I think we've talked about making quite deliberate choices about where we play and how we execute on that, talk to some of the drivers of lapse and I've also been signal that retention is a big opportunity for us.

And so certainly, a core part of our distribution and business model is that consistency around above system policyholder growth. So we're certainly not stepping away from that. We do have some quite innovative initiatives that are coming through over the next 6 to 12 months that gives us confidence.

And you touched on the aggregator channel, which strategically, again, remains important to us and particularly through the partnership with it's my group, but all of our strategic partners in the aggregator sector. And so they support our high-value growth strategy. And yes, we remain alert to some of the factors. I touched on some of the temporary disruption of the government rebate changes and our adjustments to offer and how we flight our go-to-market strategy, and that has had some short-term impact, but that will start to unwind over the months ahead.

Okay. But you have to drop your sort of policyholder growth target before to above this and so that gives a sort of modest temporary. That's fair to say, right?

Couldn't quite get all of that, Nigel, but I think you're referencing back to the step change from 3% to above system.

Yes, absolutely.

Yes. I hope I tried to be clear on the factors around why we stepped away from that in the second half.

Yes. Okay. All right. I'll move on then. I mean, in terms of just the growth then in New Zealand, presumably model those price rises are fully earned through yet. So the growth rate, obviously, you had a pullback in policyholders. But in terms of sort of the earn through those premium rate increases, there's still more of that to come. Would that be fair?

Yes, that's right. On Page 17 of the presentation. We can see that the first quarter and the second quarter, the average is -- price rises going up from 22% to 26%. But we've also got to remember that we've unfortunately had some lapse as a result of the remedial action, and there's been some downgrading.

So Yes, some will go through, but please, let's just -- the lapse in the downgrading has been -- we've had that impact, and we're now really focused on adjusting, I guess, for that impact and having put the business on a more sustainable footing, reverting it back to -- focusing more on customer service and the growth.

Okay. And then just wanted to sort of see what's involved a little more in the capital management review. Obviously, before you sort of indicated that any proceeds you got there was a fair chance that a reasonable amount of those might be distributed? I mean, can you sort of give us a flavor of what exactly you're going to be looking at and the capital management review?

So Nigel, certainly, that remains front and center around returning those proceeds to shareholders. And we're working through those options at the moment. I think it's also fair to say that we're focused on maximizing the return on our existing investments as well and particularly strengthening some of those adjacent businesses. So we'll work through that carefully over the months ahead. But hopefully, that's giving you a signal around our intended direction.

Great. And then maybe just finally, on international, clearly, you're back inside what used to be your margin target of 10% to 15% this half, but typically second half has been stronger. So is it fair to say that overall margin for international is probably a bit better than you used to get when you were targeting 10% to 15% is that a fair comment?

Yes. I mean we were really pleased with the way the international business has gone, especially because it's on that lower gross margin of 39%. And really that the benefit on that has been in the expense ratios. It's hard to really give that target given that it has been quite a volatile segment. But we're pleased with where the -- we're happy with the margin where it is. We're pleased with the expense ratio. I hope that gives you an indication, but I'm just hesitant around those historical targets when they've been quite volatile since we gave them.

Next, we have Freya Kong from Bank of America.

Can I just ask on the updated strategy in New Zealand? Are you going to continue to prioritize profit over growth? Are you going to look to increase retention and growth now? And also what kind of margins are you writing new business at relative to your historic 8% to 9% target?

Thanks for the question. Yes, it's a balance in New Zealand. And so we took some necessary action in that market to ensure that we could get that business back on sustainable footing. And where we're really pleased with the direction it's heading.

And notwithstanding, we acknowledge the customer impacts were felt and you can see that in the NPS and the lapse rate. And so our priority over the next 12 months is making sure that alongside pricing discipline, how do we really proactively manage that claims inflation trajectory. And so consistent with the Australian approach, we'll be looking to really influence that claims trajectory and working closely with our provider community to do so.

We're not guiding to any forward-looking margins in that business at this point. A little bit like the international space, there's still quite a lot of uncertainty there. Macroeconomic conditions are improving, but they also remain somewhat suppressed to where they have been historically. And you did reference our historical margin point, but it is still too early for us to really sort of put that on a forward-looking basis. So we're pleased with the steps that have been taken to date.

You talked about balancing on customer and growth, and that is also a big focus for us. And we're seeing competitive dynamics really stabilize as well. And so I would say that the playing field is certainly more even now. And we're quite buoyed by some of the growth initiatives that we are now turning our attention to, including the revised launch of our life insurance offering over there as a bundled play with health really strengthening our relationships with the financial adviser community, which is an important distribution channel for us in New Zealand and then we'll selectively pursue some of those other adjacencies, including international visitors in New Zealand and also the corporate sector. So there's opportunity there, and there's certainly headroom for growth. We're about 15% of the overall resident at market in New Zealand. So again, consistent with Australia, we see lots of opportunity for growth moving forward.

Okay. And what's the underlying yield that you're getting right now on the defensive portfolio? Were there any negative mark-to-market impacts in the half?

That will be included on the last page of the appendices.

I don't think you split out underlying yields there though, correct me if I'm wrong.

Okay. Maybe this afternoon, you could take me through underlying yield.

Okay. Okay. Great. And then just a final clarification. The group yield of target for the full year, what would that be excluding travel because that's a discontinued operation now?

Again, we've guided to what we've guided to. And I guess we'll keep it where we are in that regard.

Next, we have Andrew Buncombe from Macquarie.

Congratulations on the results. Just two from me, please. How should we think about the product mix impact in the residence business in second half '26? Was there anything unusual in the first half that we need to adjust for?

No, I don't think there's anything too unusual. I think that potentially our relative pricing last year versus the industry and then because our relative pricing this year versus the industry is smaller, maybe that might provide some modest benefit.

Great. And then a couple of questions on travel, please. Would you consider holding the Australian and New Zealand travel business if you can't get appropriate compensation and then also potential stranded costs from travel. If you can just talk to that as well, please?

Andrew, thanks for the question. So Look, that review on to the -- in the Australia and New Zealand perimeter is ongoing as we flagged. I think all options certainly remain possible. If you think about the strategic logic of distributing travel under an nib branded arrangement to our Australian and New Zealand domestic policyholders. There's clearly a tighter alignment than the different brands in those global segments through World Nomad. So if you think about proximity and related as to the core, then clearly that is stronger. But all options, of course, are on the table. And there's certainly plenty of interest that continues to work through.

As it relates then to stranded costs, we're confident that they'll be largely immaterial and that they would be certainly a priority focus for us in the event that the Australian perimeter did exit the portfolio.

Next, we have Kieren Chidgey from UBS.

I just wanted to go back to high claims inflation. The 6.1% underlying claims inflation number you're talking to. Can you give a broad breakdown in terms of what you saw on hospital relative to ancillary and also interested within hospital on the composition between indexation and utilization?

So the hospital versus ancillary is at the bottom left on that Page 13. So 3.6% ancillary ,6.2% hospital, 13.5% Medical is where the 6.1%. In terms of sort of some of the drivers, I think we have commented that we are seeing some relatively high utilization. And again, that will be a focus of the end-to-end management strategy around how we manage that with our hospital partners.

Okay. But I mean, the year-on-year change, just be useful to get some color between the sort of the higher inflation, is that predominantly all coming from that utilization bucket? Or I mean you did talk to hospital indexation being up as well?

I mean I guess sort of the biggest reasons the 6.1% is firstly, the New South Wales bed rate, and secondly, the investment in customer benefits. So -- and then we've got that risk equalization piece. But in terms of breaking down between your price and utilization, it's something we can think about in the future.

And your outlook on risk , you're kind of flagging a fairly stable margin outlook into second half. What are you assuming from a risk equalization basis as we move into second half?

We are assuming that we don't see a second quarter like we saw in the December quarter. So we are assuming that we don't see that again, but we're not necessarily assuming that it reverses.

Okay. Just a second question on Thrive. Just looking at the stat accounts, there's sort of a suggestion there that there's indicators of possible impairment for Thrive even how you haven't taken on this period, but I do note the revenue growth assumptions of almost half on the go-forward in that [ CGU ] impairment testing. Can you just talk to I guess, what you're seeing in that business and how you're thinking about the growth outlook from here?

Yes. Kieren, so with NDIS and Thrive has certainly been a soft growth performance over the past 12 months. And really, this is driven by a couple of factors. There was some internal challenges that we've been quite transparent about dating back about 15 months ago or so now when we integrated several of those businesses under one operating system and one brand, and that did have quite a significant temporary impact on our service levels and broader participant experience. That has largely unwound.

Over the top of that, as you're aware, there's been some regulatory changes that the NDIS scheme is working through. And certainly, Thrive has been within that and planned management has also been within that as well. And so on that forward-looking basis, those revenue projections that you're referring to, we are anticipating modest growth there, and we talked about January being more favorable and back in positive territory. But we are cautious about some of those shifting market conditions. So hence, the revised revenue assumptions.

Next, we have Andrei Stadnik from Morgan Stanley.

I do have you don't know question around claims inflation, apologies about that. But I just wanted to ask in terms of the cash paid claims, it looked like the cash paid claims running at about 6.5% growth a year ago and 2 years ago. But in this half, they stepped up to almost 8%. How should we think about that? Is that just the split-up in the claims process or anything else moving there?

Yes. And I'm happy to go through that. Again, on Page 32. I'd actually say that it was even a little bit higher than that 8%. But then when we back out the increase in processing speeds, and then also adjust for the average volume growth, we do come back to very close to that 6.1% incurred that we've reported. And so comfortable that cash and incurred are aligning. And then from that 6.1%, we've then provided that waterfall down to the 4.1% against which we're pricing on.

And that slide 13, we talk about 4.1% underlying base inflation, has that been adjusted for the $31 million LIC release because that's worth, I think, roughly about 2.5%.

No, that release is -- that $31 million release is $2 million to $3 million of actual release of hindsight release, which is that 20 basis points in the underlying margin waterfall. And then the other $28 million is the -- or $28 million to $29 million is the payment speed processing. So that's why that's reduced. There's only $2 million to $3 million or 20 basis points, that's actually affected margin.

Next question comes Vanessa Thomson from Jefferies.

I just wanted to circle back on the nib thrive. You mentioned that things have turned more positively in January of this year. Is that around participant numbers? You can see it's slipped backwards a little. And I wondered if -- or is it around margin?

Yes, it's -- so we talked about January from a positive growth perspective, and you'll see the overall period-on-period reduction. And I've highlighted some of the drivers of that. And so January, we've certainly seen a positive step-up on volume growth and participants.

The scheme is still growing, and we show you some of the overall scheme growth numbers at the back of the pack. And the planned management penetration or contribution within the scheme is also increasing.

So from a thematic perspective around overall numbers and also the uptake of plan management, those settings are still favorable. In January, we started to see some positive volume growth coming through. What we have been really focused on, you can see that in the numbers is making sure our participant experience and our operating efficiency is improving. And so we're pleased with the work that's happened around our cost base. We now got all of those businesses integrated. We have a dual brand strategy, primarily through Thrive, Instacare that have complemented each other in key markets. And so all of those settings are now more stable. And we I talked about some further regulatory pieces that we need to continue to navigate and we're alert to those. But outside of that, we're feeling confident about where things are heading.

And then -- sorry, the move to Navigator, which I think is -- I know there's very little information, but it's a couple of years away now. Are you positive on the margin consequence of that change. I understand that's a more time-consuming kind of role than plant management?

Yes, you referenced to the lack of information, Vanessa, it is still quite ambiguous. We must say around what the Navigator model could look like, will look like and at what time that would take effect. And so that is really difficult for us to estimate and make assumptions around what that could be. We do have high confidence that the plant management sector has a really important role to play within the scheme ongoing. And so that intermediary layer, whether it's in its current shape within plan management or revised shape.

Certainly, the role of connecting participants with the broader NDIS community is a critical one that intermediaries play. Alongside that, there's an important role for the intermediary layer and plant managers to play around scheme sustainability, and we've talked about how we leverage payment integrity and our compliance frameworks and some of our digitization from our health insurance business across in plan management, and we're keen to work alongside several stakeholders, including the government around making sure that we're eliminating fraud, waste and abuse from the NDIS sector more broadly. And so those settings are attractive for a player like us.

Okay. And then my second question was on hospital contracting. I can see you've renewed your bit since contract. It has a dynamic indexation in year 3. I understand you've done that with others. I just wondered whether you have any contracts that have reached that dynamic indexation phase and how when you're in that phase, you incentivize the hospital?

Yes. Thanks, Vanessa. So some of those multiyear agreements are moving towards those dynamic indexation models. We're comfortable with the driving factors around where indexation is landing, and we've certainly looked to accommodate that around our forward-looking pricing. And so I talked about predictability of having 80% of our total outlays under a partnership model. That's important because it gives us that confidence around where we need to price to make sure that those things are aligned. So I won't go into all the nuts and bolts around the component parts of those partnership agreements.

I did reference length of stay and a shift to day settings and short stay as priority opportunities for nib. We do lag the industry in some of those key metrics, and we touched on that broader benefits management strategy that we've embarked on and our provider partners have an important role to play there as well.

We have a follow-up question from Siddharth Parameswaran from JPMorgan.

Just a very quick one. Just wanted to check on just the seasonality that you're expecting for that second half. I think you made a comment previously about the days effect, and being very strong in New Zealand, in particular and reasonably important for Australia as well. I was just keen to get your perspective on that. I didn't see any specific comments around that.

Expecting some positive benefit from that more in New Zealand than in Australia, but some positive from that in terms of margins.

Meaningful as in the some in like I think you called out quite strongly last...

I guess the puts and takes, Sid, which is one of the reasons why we've provided the guidance that we have. Yes. I mean I know that everyone wants to get as much accuracy in their models as we do. But again, there's always puts and takes on these things.

You could see at the back of the pack, Slide 31, if you wanted to sort of see the half-on-half.

I see no further questions at this time. I will now pass back to Ed for closing remarks.

Well, thanks, everybody, for joining us and really appreciate the conversation this morning, and we look forward to catching up soon. So we'll wrap it up there. Thank you.

Good morning, ladies and gentlemen. My name is David Gordon, and I'm the Chairman of nib Group. I welcome you to Sydney to our 18th Annual General Meeting. I also welcome those who have joined us online and by phone.

Today's meeting is taking place on Gadigal land, where First Nations people have met for thousands of years. Everyone who is born or lives in this country does so today on the land of traditional owners. We acknowledge those people who came before us and their legacy by conducting our current business with respect and understanding.

I would therefore like to recognize the traditional owners of land on which we meet today, the Gadigal people of the Eora nation, and pay respect to elders past and present. And now I'd like to welcome Uncle Allen Madden, who will deliver a welcome to country.

Thank you for that applause. Once again, my name is Allen Madden, Gadigal Elder.

Board, members, distinguished guests, ladies and gentlemen. For my first song...no. Born and bred in Redfern, the capital of Sydney. [indiscernible]. Married man, 10 children, 26 grandchildren, 17, great great. Yes, we did have TV. I just couldn't afford the [ bloody ] electricity. Aboriginal black [ Redfern ] [indiscernible]. No football fans here neither [indiscernible]. Welcome the country's always an honor and pleasure. Just to give you a bit of an insight of where you are and who we are. Welcome to Gadigal land. Welcome to Gadigal country.

As we've all welcomed, firstly, I'd like to acknowledge our First Nations and traditional owners of the lands that you may have come from or work upon, and pay my respects. To all our aboriginal elders, all elders, past and present, also I pay my respects. To all our aboriginal and [indiscernible] the brothers and sisters. From whatever every general island nation you may have come from, welcome to Gadigal. And all our nonindigenous brothers and sisters here today, a very warm and sincere welcome to you to Gadigal. No matter where you've come from, whether it be across the seas, across the state or across town, once again, a very warm and sincere welcome to you to Gadigal. And as I've mentioned many times before, was, is and always will be our aboriginal land. Only [indiscernible] insured and that coming taxation and going. It's an honor and pleasure to be here today to welcome one and all to Gadigal.

Gadigal is 1 of 29 clans of the Eora nation. The Eora nation is bounded by nature's own: the Hawkesbury River to the north, Nepean to the west, and Georges River to the south. And then between those 3 [indiscernible] is the Eora nation. And in that nation, [indiscernible] 29 clans. And the clans [indiscernible] today is Gadigal.

On behalf of members of the Metropolitan Local Aboriginal Land Council and of the Gadigal Mob, once again, a very warm and sincere welcome you to Gadigal. There's an all aboriginal saying out there. My [indiscernible] is very appropriate for you [indiscernible] today. I say where as I will, there's a relative. And as you travel across these traditional lands and borders, may the spirits of our ancestors guide, look over you, and keep you safe. So once again, on behalf of the Land Council and of the Gadigal Mob, welcome, welcome, welcome. Thank you.

Thank you very much. Thank you, Uncle Allen.

It has now gone past 11 a.m. here in Sydney, and the Company Secretary has advised me that a quorum is present, and as such, I formally declare the meeting open.

Before we start our official proceedings, I'd like to ask that all mobile phones be turned off or turned to silent so as not to interfere with the proceedings. If you wish to use your phone, please do so outside the room if you're present.

I'd now like to introduce the nib representatives who are joining me here today. First, my fellow nonexecutive directors, Jacqueline Chow, Anne Loveridge, and Jill Watts, Peter Harmer, Donal O'Dwyer and Brad Welch. And joining me from nib's senior executive team, our Chief Executive Officer and Managing Director, Ed Close; Group Executive, Legal Chief Risk Officer, General Counsel and Company Secretary, Roslyn Toms; and Group Chief Financial Officer, Nick Freeman. Also joining us today are members of nib's executive team, representatives from nib's external lawyers, [ Ash Hirst ]; our share registry, Computershare; and our auditors, PricewaterhouseCoopers. We also welcome Chair of the nib Foundation, Vanessa Wells.

Many of you will know that our Chief Executive Officer and Managing Director, Ed Close, was appointed on December 1 last year. Prior to that appointment, Ed was Chief Executive of nib's Australian Residents Health Insurance. Ed will address you shortly, providing an overview of FY '25 and a summary of nib's key strategic objectives for the year ahead. Following his presentation, I will lead us through the items of business for this meeting.

Turning now to my report on nib's performance for the 2025 financial year. During the year, greater certainty returned to our economy. Australia stock market was buoyant. Growth in the economy was positive, albeit modest, and interest rates began to ease. At nib, the '25 financial year made a stronger focus on what we do best, private health insurance in Australia and New Zealand, and a disciplined approach to our business, its value to our customers and returns to our shareholders. Across Australia and New Zealand, nib now covers almost 2 million private health insurance customers.

I'm pleased to report that during FY '25, we continued to grow our core business in a very competitive market. In our Australian Residents Health Insurance business, nib achieved policyholder growth of 3.2%, again, exceeding the industry average of 2.2%. Our Net Promoter Score, which tells us how well we are performing for our customers, was at 34. Our new customers include more than 52,000 people who are new to private health insurance, more than 22,000 nib customers were enrolled in health management programs. And in Australia, we supported 390,000 hospital admissions, up 5% on the prior year, and 4,300,000 visits to ancillary health care providers, like dentists and optometrists. And through our planned management business, nib Thrive, we supported more than 43,000 NDIS participants. nib Thrive is now processing 96% of participants' claims within a day of receipt. In our Health Services business, Honeysuckle Health, we ensure access and value for our customers, and achieve this through our product range, competitive pricing and excellent customer service.

In FY '25, the public and private health sectors recorded another year of high costs and claims inflation in Australia and especially in New Zealand, where double digit price increases were felt across the health economy. nib incurred $2.7 billion in private health insurance claims in FY '25, continuing and increasing our substantial support for both the public and private health sectors. nib group has a sharp focus on the ways in which we can drive down costs in its -- in our own business and more broadly in the sector.

We alone cannot change the economics of health, but we have invested heavily in key measures in FY '25. One such measure is our new partnership agreements with some of Australia's largest private hospital groups. I want to take a moment to talk about those key agreements and the importance of good contracting. Private health insurers contract with hospitals to provide certainty of access for customers to contain prices and to ensure best outcomes for our members. Those agreements are structured as partnership models for better outcomes, and nib now has a multiyear agreements in place with several of Australia's large hospital groups, among others.

Together, we agree on appropriate price for an overnight stay in a hospital bed or a specialist service at that hospital. Agreements also cover the cost of medical prosthesis, which can include everything from sutures to pacemakers. We want members covered for their treatment for their stay in a hospital with no or limited out-of-pocket costs. This is one of the benefits of having private health insurance, access to great places for care and value. These agreements are complex, and they are hotly negotiated by private hospitals and private health insurers. The sustainability of the private health care system relies on both sides having robust discussions.

We recently announced a new deal with St Vincent's Health Australia. St Vincent is Australia's largest not-for-profit provider of health and aged care services, operating 10 private hospitals across New South Wales, Queensland and Victoria, and rehabilitation and psychiatric services. nib and St Vincent signed a 3-year agreement that better reflects the shift in modern patient care, including the need for shorter hospital stays and sometimes care at home, all at the direction of the treating specialist. The agreement between the 2 parties innovates through dynamic indexation, which means both parties share the risk if health sector prices rise during the terms of the contract. Both parties also have reciprocal rights to improve efficiency, from legal obligations to operational matters, and we have agreed to establish a joint committee to work together on shared value initiatives during the life of the contract.

We know the federal government is very focused on the sustainability of the private hospital sector and is pointed to the need for better outcomes. The private health care system can only endure if both private hospitals and private health insurers can operate sustainably. That requires all of us to run our businesses efficiently, transparently and with a focus on productivity and better outcomes.

About 55% of the Australian population has private health insurance. Private health insurance pays out for around 2 of every 3 elective surgeries. And data from the Australian Prudential Regulation Authority shows health funds paid a total of $12.4 billion to private hospitals in the last financial year, an increase of 6.4%. In that time, nib paid over $1 billion to hospitals directly and contributed more than $240 million to industry claims through risk equalization. We've been able to do this and ensure appropriate returns to shareholders through prudent management.

nib is playing its part in targeting and delivering first-class health services along with delivering efficiencies, which ensure prices remain affordable and customers see value. But private health insurance alone cannot drive solutions or sector-wide reform. We operate in a highly regulated environment as a listed entity, governed by the Australian Stock Exchange listing rules, and we're also governed by the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission.

We don't shy away from oversight and regulation, but we welcome greater transparency over the cost of care for all parties. We look forward to greater clarity in claims, bill processing and hospital costs as part of that process. After all, consumer demand for change has never been stronger. Challenges to the health system, to the health system status quo are not new. We know these are challenges that private health insurers and health providers must meet. At nib, we innovate and better serve those in need.

Another way that nib delivers value to the sector is by allocating funding to programs designed to help members get well and stay well. nib's health management programs, our health check for members and screening programs, are designed to help reduce the burden on our health system and improve health outcomes for people with a specific disease, injury or condition. This is a significant saving for members who may avoid unplanned hospital visits or readmissions, for the community and for the entire health sector.

Turning to the nib group and our purpose, which is the better health and well-being of our customers. Nib reported a $198.6 million net profit tax for the last financial year, an increase of 9.4% over the previous year. The Board declared a final dividend of $0.16 per share, bringing the full year dividend to $0.29 per share fully franked. The full year dividend represents a payout ratio of 7.6%.

At a glance, nib is Australia's fourth largest private health insurer. We're the second largest private health insurance provider in New Zealand. Through our international inbound students and workers business, nib supports 46,500 people who come to Australia as part of the Pacific Australia Labor Mobility scheme, known as PALM, and our nib Thrive NDIS business has about a 10% market share in plan management. We also offer travel insurance through 3 brands.

Our operational highlights include, in our Australian private health insurance business, which is the engine room for our growth, nib reported its highest ever sales in FY '25. In our international inbound students and workers' health insurance business, we continue to focus on disciplined growth and margin improvement. Changes to immigration policy made the returns in this business more pleasing, and we remain optimistic about the future.

Our business in New Zealand continued to navigate a very challenging market, including softer economy and sector-wide health claims inflation. Pleasingly, claims inflation appears to be reducing in New Zealand. Strong management remediation during the year and price increases, along with a renewed focus on operating costs, resulted in a better second half. The private health insurance market in New Zealand is very different to Australia's market. Premium prices rise when a customer's policy reaches its anniversary, and price changes flow gradually through the customer base.

And in nib Thrive, we continue to build our business, which serves participants in Australia's National Disability Insurance game. nib is committed to better participant experiences, supporting the government around payment integrity and fraud detection to ensure a more sustainable scheme for all of those who need support. The sector is maturing and reforming, and nib Thrive is well placed for further organic growth.

During the year, we announced a strategic review of our travel insurance business, which includes nib Travel, Travel Insurance Direct and World Nomads global brands. That review is currently underway.

FY '25 was also a year of prodigious change in technology. Already in nib, artificial intelligence is germane to the whole of group productivity. We are constantly reviewing where AI is applicable to our business model, the gains it can deliver and how we can implement AI to provide deeper customer insights and better customer outcomes.

nib is strongly focused on its own costs, and is delivering productivity gains that result in better value and experiences for customers as well as market growth. Productivity measures during the year included an increase in group-wide tech-driven solutions. We refreshed our corporate strategy with a keen focus on driving growth into private health insurance from our adjacent businesses. And we implemented structural changes with our -- with the establishment of our Health Services division, means we are better placed to scale up our services. We combined our international inbound students and workers with our Australian residents health insurance to form a single division.

All of nib's achievements over the year come from the sustained effort and consistently high standards that nib people apply to their work. Your management team and Board strongly believe in the importance of high ethical standards, good governance and strong risk management. Our senior leaders are high performers who drive exploration, innovation and strong growth. We recognize that nib's ongoing track record of value creation depends on a strong risk governance framework and risk culture. Our approach involves business level ownership of risk, clear and consistent engagement with key regulators and ongoing investment in our risk management teams and their capabilities.

nib's risk framework sits alongside our strategic plan and our sustainability pillars, and it underpins our commitment to deliver for our customers and stakeholders and supports our purpose and commercial strategy. It enables nib to strive for and deliver consistently for our customers, their families and communities.

Turning to sustainability and nib in the community. We support the better health and well-being of our customers, employees, their families and our communities. For almost 75 years, from its inception as a BHP workers cooperative, nib group is focused on customers' better health outcomes. It's also a key part of our sustainability agenda. Our focus is on understanding the risks to our customers, mitigating those risks where we can, and managing or helping the -- helping treat them when they occur.

We know that many factors determine a customer's good health: access and equity and care, housing, connections to community and the natural environment. We can't solve every issue, but we aim to effect change where we can have the greatest impact. Our 5 sustainability pillars are population health, the natural environment, leadership and governance, community spirit and cohesion, and people, culture and employment. We set and exceeded targets for health management programs, health assessments and in our nib Foundation, the number of people reached through our prevention partnerships. Further, we launched our second Innovate Reconciliation Action Plan, launched an inaugural Disability Inclusion Action Plan, and about 20% of sponsorship funding was invested in diversity and inclusion initiatives.

Through the nib foundation established 17 years ago, we have funded more than 200 community health and well-being initiatives worth $34.2 million. In 2025, nib Foundation welcomed 2 partners in Australia's disability sector, Down Syndrome Australia and People with Disability Australia. We continued our funding program to the Hunter Medical Research Institute to help better understand chronic disease prevention and to the birth pathways program.

Our Independent Nonexecutive Director, Donal O'Dwyer retires from your Board at the conclusion of this meeting. Donal was appointed in 2016 and has served a full term on the nib Board. He's been a truly outstanding member of the Audit Committee, the People and Remuneration Committee and the Nomination Committee, and has made a very significant contribution to the nib business over almost a decade. Donal's insights, guidance and contribution have been highly valued, along with the warmth, good humor and generosity of spirit that he has brought to all of his dealings on the nib Board. On behalf of the Board and all shareholders, I thank Donal, and we -- for his commitment, and we wish him all the best for the future.

I'd also like to welcome our New Zealand -- welcome to our New Zealand Board, Andrew Blair, who joined as a nonexecutive director this year and was appointed Chair on the retirement of [ Hannah James ] on the 1st of November. [ Hannah ] has served on the Board since 2016 and was appointed Chair at the start of 2024. We thank [ Hannah ] for her dedication to nib and wish her well, and we also welcome Andrew, and look forward to working with him.

Together with the nib Board, I look forward to the challenges the year ahead will bring. Thanks to my fellow Board members, nib's executive management team and the wider nib group for their hard work and dedication throughout the year.

And now I'd like to hand over to Managing Director and Chief Executive Officer, Ed Close.

Thank you, David, and good morning, everybody, and thanks for joining us. It looks like we've got a great turnout here in Sydney. And for those of you that can take the time, we encourage you to stay for some refreshments at the conclusion of the meeting.

I'm Ed Close, nib's group Managing Director and Chief Executive Officer. And throughout the year, nib has continued to support our customers, our shareholders and our communities.

Our purpose, as David mentioned, is your better health and well-being. We protect customers by ensuring health care is accessible and affordable. We connect them to trusted providers and partners, and we provide insights and tools to empower individuals, their families and the communities to manage their health.

David has already provided a bit of an overview on our business and the broader industry landscape over the past year. But before I talk to our financial results, I'd like to share some numbers that demonstrate nib's commitment to the better health and well being of our customers.

At nib, we are providing value and access so that customers can look after the health and well-being, whether that's through access to private hospitals and ancillary care, health care at home programs or virtual care. We're doing more to help our almost 2 million customers in private health in Australia and New Zealand.

In FY '25, we funded almost 400,000 hospital admissions and incurred $2.7 billion in private health insurance claims. nib supported 4.3 million customer visits to dentists, optometrists and other ancillary health service providers across Australia, up by 5% on the previous year. nib's preventative dental and optical networks expanded to more than 500 providers, saving customers over $40 million in out-of-pocket costs in FY '25. Our network grew to more than 40,000 medical specialists, who offer nib customers a known gap in cost for medical treatment to reduce medical out-of-pocket costs and provide greater certainty for customers.

One in 4 major joint procedures for nib customers is now delivered through our no out-of-pocket clinical partners program, which can also reduce the length of hospital stay and improve accessibility for our customers. Our finder provider tool has helped up to 50,000 customers a month find a specialist for treatment. And now more than 70% of our nib customers use our mobile app and digital tools.

As David highlighted, we're also investing in digital and AI to make experiences easier and more personal. We now have a number of AI initiatives in production, including nib GPT and AI summarization that has cut after core work by 60%, enabling our staff to focus more of their time on supporting our customers. And we're constantly improving service experience while protecting our customers' data and privacy.

We continue to expand our health services offering. In the last 12 months, nib enrolled more than 22,000 people in health management programs to help them manage a chronic disease. Health information we know is deeply personal. We continue to strengthen safeguards across our platforms and partner networks, so members can manage their health with trust and confidence, from secure digital claims to verified provider connections and non-gap arrangements. These initiatives demonstrate nib's ability to deliver value and convenience for customers, supporting our strong above-[indiscernible] growth across our Australian Residents business.

Now I'd like to turn to our group financials. Positive momentum continues across FY '25. Group revenue rose 7.8% to $3.6 billion, supported by continued expansion of our private health insurance portfolio. As we mentioned, now covers nearly 2 million people across Australia and New Zealand. This scale means we fund significant parts of the health system, and play a critical role in connecting our customers with trusted partners to help them get well or stay well. With the $2.7 billion in incurred claims, we are very motivated to deliver value and better health outcomes for our customers.

In FY '25, we delivered a solid group operating result, with an underlying operating profit of $239.2 million and net profit after tax of $198.6 million. We're proud of our digital-first customer-led approach, which helped us achieve a group Net Promoter Score of plus 34. And as I mentioned, we now enjoy more than 70% of our Australian PHI policies being digitally connected, making interactions for those customers simpler, faster and easier. And we're also seeing the benefits of our productivity focus. Our group operating expense ratio improved by 50 basis points to 17.7%. We maintained a fully franked dividend of $0.29 per share, consistent with FY '24.

I'd now like to take a time to look a little bit deeper at the nib segment performance. In FY '25, our Australian Residents Health Insurance business had another standout year. nib has reported above sector growth for more than 20 years. And in FY '25, nib outpaced the market again, with 3.2% net policyholder growth compared with the average industry growth at 2.2%. Net margins remained stable and were guided towards our 6% to 7% target range, supported by disciplined pricing product design and tight expense control.

FY '25, as David mentioned, was our best ever sales year, up 13%, thanks to our strong multichannel distribution strategy, including 52,000 people who are new to PHI, highlighting how nib is continuing to support increased participation in the private health insurance sector. As more people buy private health insurance because they see value in the cover that nib provides, the burden on the public health sector eases. And in FY '25, our prevention and in-home care initiatives saved over 24,000 hospital bed days and saw meaningful improvements in health outcomes for customers.

We've also strengthened our support for the broader health care system. As David highlighted, we've secured major multiyear partnerships with the large hospital groups across the country. We see high potential for continued growth in our priority health insurance markets. And our product, pricing and improving customer value proposition position us strongly across all our brands and channels.

Turning now to our adjacent businesses, which contributed $45.3 million to group underlying operating profit. International students and workers who come to Australia must hold private health insurance as part of their visa requirement. Our international visitors business recorded 14.4% revenue growth and 23% growth in underlying operating profit, with more than 46,500 of our customers part of the Pacific Australian Labor Mobility scheme, or PALM. Our direct relationships with employers are stronger than ever, and we're seeing new opportunities emerge in these markets as international student commission payments undergo further reform.

Across the [indiscernible] in New Zealand, our recovery plan is well underway. Price increases are now aligned with inflation, product changes have been announced and are taking effect, and we returned to profitability in the second half of the year. We also welcomed our new Chief Executive for the nib New Zealand business, Skye Daniels. Skye joined nib in August. She has deep industry experience as Chief Financial Officer, and has worked in aviation, media and the wider health care sectors. I also wanted to take this opportunity to thank former nib New Zealand Chief Executive Officer, [ Rob Hannon ], for his fantastic contribution over the last 12 years. We wish [ Rob ] all the best for the future.

Our health services strategy is progressing positively. Honeysuckle and Midnight Health are now fully and wholly consolidated within nib's Health Services division. We are aiming for profitability in FY '26 as the businesses gain scale and market traction. nib's Health Service division is central to nib's growth strategy. Honeysuckle helps nib's private health insurance customers better manage health conditions and risks through its health management programs. These programs reflect nib's drive to deliver better value for customers and importantly, better health and well-being, especially for those customers that are managing a chronic disease.

Honeysuckle Health also run support programs to help people return to work after an injury and is actively working with several insurers and corporate groups across Australia to improve broader health and well-being outcomes. During FY '25, nib completed more than 121,000 general health interactions via our health and well-being programs and telehealth consultations. As part of nib's broader digital consumer health offering, Honeysuckle's Hub health brand focuses on delivering convenience, access and discretion through virtual health care delivery. As part of this experience, both nib and non-nib customers can consult with the clinician at a time and in place that suits them. Many of these customers are young parents and professionals juggling work and family obligations. They live right across Australia, including in regional and remote locations where access to GP can be difficult. And we know that health care in the home is transforming patient care. With guidance from a treating specialist, customers can now receive high-quality and affordable treatment outside a hospital setting.

For some time now, advancements in health care delivery have resulted in improved patient recovery times, leading to shorter hospital stays. A patient might once have spent a week in hospital following a knee or hip replacement, where now, prehab and often rehab can be done in the comfort of their own home, can often mean a much shorter hospital stay while delivering quality patient outcomes and experiences. This positive shift benefits patients, families and communities and unlock significant efficiencies across the broader health system.

It is a major change. And while it brings advantages, it can also create challenges, such as pressure on hospital budgets, operating models and as this transition accelerates. But importantly, this is not a move away from quality care. It is a move towards achieving the best possible outcomes for patients, and ensures that we focus on the right care, in the right setting, at the right time, the right price for our customers.

Across in the disability sector, we continue to strengthen nib Thrive, which serves participants across Australia's NDIS. In FY '25, nib Thrive delivered a $16.9 million underlying operating profit, up 10.5% on prior year. As David highlighted, Thrive supports around 43,000 NDIS participants, mostly providing plan management services and essential role in ensuring that providers are paid promptly, and participants receive a high-quality participant experience. We have focused significant amounts of energy on our service level improvements, and this now means that around 96% of claims are often processed within a single day, and 85% of our calls are answered within 90 seconds for our participants and providers.

As a relatively new entrant to the disability sector, we are committed to listening to participants, carriers and providers to drive continuous improvement. This engagement is critical as the NDIS undergoes significant reform, including changes to eligibility, fee structures and intermediaries as the government focuses on securing the long-term sustainability of the scheme. Thrive continues to actively contribute to these reforms, ensuring we are ready to adapt as changes are implemented. And our goal is clear: to help shape a sustainable NDIS, while delivering exceptional service for participants and providers, and we look forward to working closely with the disability community and the government in the year ahead.

Earlier in the year, we announced nib Travel would undergo a strategic review. The review is well advanced, and we will provide a further update to the market in due course. Our Travel brands include Travel Insurance Direct, nib Travel and World Nomads.

During FY '25, gross written premium for our Travel segment continued to improve. The business focused on cost discipline, delivering a 6.7% decrease in operating expenses year-on-year. New products were launched in the United States and the United Kingdom, supporting our growth momentum in Global Markets. All 3 Australian and New Zealand brands won a 2025 WeMoney Award, with nib and World Nomads taking our back-to-back wins.

Finally, during the year, nib kicked off a multiyear productivity program, which has delivered pleasing results to date. We unlocked $80 million in benefits, reduced our group operating expense ratio and kept nonmarketing expense growth to just 3.4% in an inflationary environment. We're also using AI to process nearly 1 and 2 Thrive invoices straight through, and we continue to expand our capability into our Australian health insurance business and New Zealand operations.

I'd now like to spend some time on our strategic direction. As we look to the future, nib Group's refreshed strategy is focused on 4 core priorities, each designed to drive sustainable growth, operational excellence and long-term value for our customers, our partners and our shareholders. Our top priority is to accelerate growth in our core PHI business in Australia and New Zealand. We continue to target above system growth and sustainable earnings through a multi-brand, multichannel approach, disciplined pricing and ongoing innovation to enhance the customer experience and value proposition in our key markets.

Our partnership with Honeysuckle Health is scaling up, and it helps us deliver better health outcomes for our customers, improve access to affordable care and optimize our claims performance in our PHI business. We're expanding our health services and partnerships with insurers and corporate groups. Our partnership with ItsMyGroup is helping us extend our distribution and deliver greater value to both PHI and non-PHI brands across Australia. And we are strengthening our leadership in NDIS plan management. We will pursue a multi-brand strategy, and we will continue to work hard to improve experiences for participants and providers.

And finally, as I mentioned, we're unlocking group productivity through digital data and AI. We're embedding AI and digital-first capabilities and simplifying our business model to drive efficiency, but most importantly, to improve the customer and employee experience.

Our disciplined approach to capital allocation ensures we're investing for long-term value and sustainable returns. And looking ahead towards the outlook, we continue to see a positive uplift in [ group ] underlying operating profit, supported by continued strength in our Australian PHI business, and expected return to full year profitability in New Zealand and solid momentum across our adjacent businesses.

FY '25 was a year of disciplined and strong momentum across our core and adjacent businesses. We're focused on sustainable growth, operational excellence and delivering seamless experiences for our customers. nib Group remains well positioned to deliver consistently strong outcomes for all of our stakeholders in FY '26 and beyond.

Before I hand back to David, I did want to take the opportunity to thank the nib team for its positive contribution over the past 12 months. It's greatly appreciated. Thank you all. And I'd also like to take this opportunity to thank our customers, and of course, our shareholders for their ongoing support. It's very much valued and appreciated, and we very much look forward to the year ahead.

And with that, I'll hand back to David. Thank you.

Okay. We'll now proceed with the formal business of the meeting. I propose to take the notice convening the meeting as read. And please note that matters not pertaining to the meeting won't be covered today.

Shareholders will be given the opportunity to ask questions in relation to any aspect of nib's operations. And personally, I think that's the most interesting part of the meeting. Responses to questions or general matters of business will take place under the first item of business. For subsequent agenda items, I'll only allow questions and comments specific to those items.

Let me first address questions from the floor, and I'll ask shareholders to stand up at the microphone in the aisle. If you're unable to do that, you can raise your hand and a microphone will be brought to you. For shareholders joining us online to ask a question from the online platform, please follow the instructions shown on your screen. You must be logged in as a shareholder to do this. The question function on the online platform is now open. For shareholders on the telephone line, [Operator Instructions]. If we receive similar questions regarding the same topic, we'll respond to those questions collectively. Any shareholder who has submitted a written question prior to today will receive a written response from nib.

We recognize that a significant number of our shareholders are also nib members. If you have a question relating to your nib health insurance cover, please visit our member consultants in the pre-function area. Alternatively, you can contact nib via phone on [ 13 16 42 ] or by visiting our website at nib.com.au or by using the nib app on your phone.

I now put before the meeting nib's 2025 financial report, directors' report and independent auditor's report. There's no vote on this item, and as such, voting is not yet open. But this is the only item on today's agenda where you have a formal opportunity to ask questions or make comments generally about the performance of nib and its management.

Our auditor, [ Caroline Mara ], partner of PricewaterhouseCoopers, is here today and available to respond to questions in relation to the conduct of the audit, the content and preparation of the audit report, the accounting policies adopted by the company in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit.

Any questions in relation to these reports or any aspect of nib's operations or its management generally will be addressed now. If you have a question about a subsequent item of business, please wait until I address that item of business on the agenda. So if there's a shareholder in the room who'd like to ask a question, please move to the microphone and -- with your attendance card and raise your hand. Wonderful.

Chairman may introduce William Printess.

Welcome, William, thank you very much for coming.

Thank you for inviting me. It's very nice for you, and I enjoyed your address. But was it AI written your address?

It was not. No. Hard slog. No AI. Although we do use AI and lots of things to improve them, but that was not one of them.

Okay, just inquiring. I just wanted to -- I think it was sort of raised by you or maybe by Ed about health care inflation, which is greatly above the CPI. So can I just ask, what are your assumptions going forward in the next year or 2 in relation to the inflation that's going to be in health care as it pays to the CPI? Because I should imagine that will have -- both have sort of an impact on increases in premiums. Anyway, that's my first question. So I was [indiscernible] that. Can I ask another one?

Yes, go ahead.

Okay. I didn't want to hog it.

No, I'm sure [indiscernible].

The company sort of operates in a very regulated environment, which you said. And also one department you didn't mention was the Department of Health. And the government, being as they are politically -- you're in a politically sensitive area, that if your profits go up, everyone jumps up and down. Well, not everyone, but the politicians do.

Well, they jump up and down for different reasons, yes.

And I'm just wondering, because they set your premium increases as well. So just wondering if you could comment on that regulatory environment that basically, in a way, limits your profitability -- ability to do things.

Okay. Well, that's 2 excellent questions.

And can I ask you a third one?

If I can remember it, then go ahead, yes.

The third one is a very simple one, maybe. But when I put the TV on -- and there's another health fund, which I won't name, but you'll know anyway. And they say we're not for profit, come to us. The other ones, and I presume they're referring to nib, have greedy shareholders there that need money and so forth. I'm just wondering how you counteract that type of argument? And anyway, that's it. That's enough.

Thank you. That's 3 excellent questions. Let me see if -- I might just do the last one first, then we'll come back to the other 2.

So the concept of not-for-profit is -- it's an interesting one because every business requires capital in order to function. And that capital can either be capital retained on its balance sheet, that has ultimately come from either contribution from people in the past or from ongoing profits, or it can come from new capital issued and taken up by shareholders such as yourselves. And one of the great benefits that we have as a listed business is that we have the ability, where we need it, to add to our capital reserves by raising capital in the markets. And in a market and in an industry which is changing so much, that's huge flexibility.

As far as not-for-profits versus those that make profit, I think it's a little misleading because every business should make a profit. It's a question of what you then do with it. Some of that profit gets reinvested into expansion or into existing businesses. Some of that profit needs to go to compensate the source of the capital. Now in the case of nib, the source of that capital is you, our shareholders, and that's why we pay dividends. And the discipline of paying dividends is, in my opinion, a very good one. It means that we focus even more on the efficiency and productivity of our business to make sure that we can generate a profit to pay shareholders for the use of their capital.

Now in nib's case, you made the point that our pricing is set by the government, and it's true. Every year, every health fund in Australia seeks to -- seeks the approval of the government for a price increase and -- including ourselves. And the guidance that we give about our profitability and the guidance that we give to the government in terms of our price increases is very simple. We continue and have for a long time, look to achieve an underlying profit ratio of between 6% to 7%. And that is a target which we are very keen to continue to follow.

Now with health inflation that you mentioned in your first question, that becomes more challenging. And there are 2 components to health inflation. There's the actual cost of a particular procedure or a prosthetic, and those costs are going up. The wage costs of -- in hospitals are going up as is the cost of products, whether it be sutures or pacemakers in the example that I gave in my address. And both components of that go to increase the costs of the health system, the costs that we pay out to hospitals for the procedures that our members get done.

And so when you look at health inflation, the cost that we need to cover is a cost to ensure that we can continue to meet the obligations that our members incur when they have health procedures in hospitals as those costs go up, and the number of claims that they make if the number of people who need procedures increases. And both components of health inflation have increased in recent times.

COVID was a bit of a complicating factor in all of that because during COVID, many people who needed procedures put them off or couldn't have them done because there were other things being done within our health care system. And one of the challenges is trying to work out what sort of additional demand there may be on our hospital system post-COVID as some of those procedures flow through the system. At the same time, as prices have increased, it's a bit of a double whammy. And that's what's going on at the moment.

How do we factor that into our planning? It's a very good question, and it requires us to be highly focused on trends that are taking place, not just in aggregate, but in every type of procedure across public and private hospitals. And to ensure that we are tracking the claims by our members in those areas and what's going on with health care costs, the cost of going to a doctor, the cost of needing a particular piece of equipment in an operation.

And that's why I said earlier in my address that the challenges that are being faced by the health care system are not challenges that we alone can solve. They need to be done in the private sector in partnership between private health insurers and private hospitals. It's one of the reasons why we are very keen for there to be greater transparency in how hospital costs are being incurred. We are completely transparent in the way in which we operate. We're a listed business. We publish our accounts every year. Our accounts are audited by a highly reputable organization. And every dollar that we spend is allocated and checked, and we publicize how we spend everything we do.

We ask for the same level of transparency from the private hospital sector because we want to ensure there is productivity gains across the system in order to be able to cater for the growth that's taking place, in the number of procedures that people are asking for, in the increased cost of those procedures. So that we can moderate the increases that we pass on to our members and at the same time, adequately compensate the capital that's involved in our business, and ensure the ongoing sustainability and viability of the private health insurance sector.

And that's a challenge, which I referred to in my address in terms of the hotly contested agreements that we enter into with private hospitals because part of those agreements are to address exactly the thing that you raised. We formed these -- we enter into these contracts for periods of time, 2, 3 years. And hospital costs go up, the number of claims go up, we need to factor all of those things in. So we've taken a shared partnership approach with private hospitals to how those things are managed.

So we all have the same outcome in mind, that we want our private health care system and our public health care system to be as efficient as possible, to be as productive as possible so that we can pass on the smallest possible increases to our members, but ensure that their health care is well catered for in terms of access to health care and in terms of equality for health care and the cost of health care. And that's a challenge which the management team is faced with day in, day out, and has been for years and done a great job. So I hope that, that answers the 3 questions that you asked of me.

Please go ahead. Go from there. I can hear you. We've got a microphone actually, we might pass it to you and.

You don't have to answer this question, but...

You ask it, I'll answer it.

Sorry. Well, that's okay. Thanks for that explanation. I thought it was excellent. The -- going forward with health care inflation, I presume you have a set of assumptions on what you expect that inflation to be.

And secondly, with premium increases, I guess there's politics involved in there. And can you sort of give an idea of what you think may be politically okay for the increases coming up? That's why I said you don't have to answer this question.

I'm not sure that the question is capable of being answered accurately because I can't predict the future. What I can say is that the entire health care system works with the government to ensure the sustainability of the system. It's one of the fundamental elements of our society, that we can look after our sick and those in need. And we are an important part of that process.

No one part, ourselves included, can control the outcomes, but we can all work together to try and get the best outcome possible. Inflation is a fact. The CPI inflation, I mean, general inflation. The inflation taking place within the health care system is a fact. And the fact of the matter is that both across the public sector and the private sector, we need to be able to provide high-quality and enduring health care.

We take that role very seriously. And so yes, we have -- we do estimate what sort of increases in inflation rate and in participation rate, the number of claims that people are going to make, and we monitor that in order to ensure that we're covering things. And we wish to make the smallest increases possible in private health insurance costs so that we can make our insurance and indeed the sector's insurance, as affordable for the population as possible. And it's an ongoing challenge, but it's a challenge which we enter into arm-in-arm with private hospital operators and with the government.

And is there anything you'd like to add to that?

Thanks, David. Thanks William for the question. Well, let's come on. A couple of quick additional points on inflation. So you'll recall in the investor results presentation, we talked about our 12 months rolling inflation, which sits around 4.9%. And so I think you can get a good guide around our projections moving forward. Long-term inflation is, for health care generally, trends at around CPI plus 2%, with a combination of aging and technology investment driving that above CPI piece. And so I think if you look at history as a guide, is always a general way to take a look at that.

And then as it relates to the premium round, again, if you look at history, then ensuring that there's that sustainable sector profile around the ability to price in that inflation, history would generally support that ability to price in inflation.

Great. Thanks for the questions. Does anyone else on the floor have a question? We love questions. Please.

I would like to. My name is [ Peter Castein ].

Sorry, your name is?

[ Peter Castein ].

Peter, welcome.

The question I have is a general question, which is sometimes raised by a lot of the members that are involved in taking out health insurance. And that is that they -- every year, we get these costs increasing. Obviously, the government has a lot to say in that, and inflation is also incurred.

But in the last 4 or 5 years, I noticed our returns or our benefits haven't increased. And I often wonder while profits are increasing, and obviously, the company is extending its range of businesses. I often wonder, it's going to continue, because there is a -- the gap between benefits and premiums, it seems to be shortening. And a lot of people in health insurance are often talking about whether the benefits are justified. And I would imagine that a lot of it would be wanting to keep out of health insurance, private health insurance, because there seems to be a very strong swing towards public hospitals and the excellent service they provide. So when it comes to future involvement in the premiums that we have to pay, I'm just wondering whether people are starting to realize that maybe private health insurance is not -- is rewarding as perhaps it's presented.

Thank you. Well, I'm going to hand to Ed in relation to some of the specifics of the question that you mentioned, but let me speak generally about a few things. First of all, Australia is blessed with a wonderful health care system by international standards, as you know. The quality of health care in this country is well above most of our Western comparable nations. And that's a wonderful thing.

Coming with that, high quality does come cost, and it occurs across the public system and the private system. And ultimately, it gets funded either by the government in relation to the private system, or subsidized by the government and funded by individuals, if they like to take out private health insurance.

We have a very strong public health system in this country in the form of Medicare, as you mentioned. But the reality is that under Medicare, with the increasing number and cost of services that are sought and provided, there are waiting times, and some of those waiting times are increasing. Equally, you can't choose your own doctor. And so many people, indeed, as I mentioned in my address, more than half the population in this country has private health insurance for that, amongst other reasons.

And the challenge is, as you put it, to ensure that we are providing value to those members, and doing that in a high inflation environment is a challenge. It is difficult. But equally, we have been expanding the range of products and services that we cover under our insurance policies, and I'll get Ed to speak to some of those in more detail, for many years now.

And whilst it may appear as though that gap that you spoke of may be changing, the fact of the matter is that more and more Australians are seeking out the cover of private health insurance for the reasons that I mentioned. And the challenge that, that places and the strain that, that places on the system is ensuring that there are enough facilities at the right price to provide those services. And equally, that the private health system can operate sustainably, so as not to overload the public system and make it even longer for people to get procedures and even longer to be waiting in emergency departments.

And so the interaction between the public and the private system in this country is a very delicate one, and it's a challenge which we are -- which we engage in every day. And ultimately, the reality of inflation, whether it's buying a leader of milk or a slab of butter or your health insurance, is that those things are subject to inflation. And also, as I mentioned, in relation to health insurance or health inflation, affected by the number of people who are also making claims. And in times when those -- when that goes up, it compounds the issue in relation to the insurance -- the inflation in underlying costs as well.

So is there anything you'd like to add to that in relation to our policies?

Yes. Thanks, David, and thanks for the question, Peter. A couple of additional points. From a benefits per member perspective, we actually have seen positive increases around increasing benefits per customer on average. So I think that's something that we should continue to work hard on, absolutely.

Participation rate, as David alluded to around private health insurance, is at record levels, and we've seen record numbers of individuals across Australia now taking up health insurance. And an element of why they are looking to private health insurance is because of that alternative access to the public system, and they see the value in having choice, control and access through the type of proposition that we offer. And we talked about 52,000 new members joining nib in the last 12 months who are new to category. And so those are individuals that are now turning to health insurance as the value proposition improves.

If you compare and contrast, it's always dangerous territory. When you look at health insurance payout ratios and contributions back to members, health insurance as a category always sits at the top or very -- we're very close to the top around benefits that are delivered back to members compared to other insurance categories. And in terms of affordability on premiums, we continue to work hard, both as an industry and at nib to deliver a lower premium as possible. And so particularly in the COVID period where we were delivering record low increases of 2% to 3%. Coming back to the claims inflation conversation earlier, though, that it is important that we get those balance right from time to time. So we are now moving out of what was that artificially low COVID period where we saw -- we did see some lower claims, and we are returning to normal. So hopefully, that's helpful.

The other thing I'll add is that in addition to funding and providing financial support for claims made in relation to health insurance, one of the other benefits of private health insurers and certainly in relation to nib is the investment that we make in providing services to assist people to stay healthy and remain well. And if you look at things like as our health checker, which is provided to our members in order to assist in ways that are well beyond simply paying for health claims. And equally, when people get ill, our health management programs that are designed to try and minimize their stay in public -- in private hospitals and to get them back on their feet as quickly as possible. So there are things that we're doing at both ends of that spectrum that are also intended to improve the health care of our members and to see them being well rather than being ill where at all possible.

One final point there, David, because I forgot to mention. nib has worked hard, and we talked about the expansion of our gap arrangements and so trying to give more of our members certainty around reducing that out-of-pocket burden, which I think you're alluding to, Peter. And so it wasn't that long ago that we had less than 20 no gap dental centers across the country, and we now support more than 500. And so investments like that, to support our member value proposition are an important part of giving our members certainty at that claim period. And now we've turned our attention into the medical community working closely with doctors and specialists around how do we expand our no gap and known gap offerings there. Again, to alleviate that out-of-pocket risk for customers as they move through a hospital episode of care.

Thanks, Peter. Are there any other questions from the floor?

Hello. My name is [ Richard Grant ].

Richard, welcome.

You mentioned the 2 aspects of health inflation, but there is really a third one, which is the development of new medical technologies. And a lot of the medical technologies that are being developed are hugely expensive. How does nib deal with this?

Well, first of all, we're not a provider of health services. We don't own and operate hospitals. Those procedures and that technology would typically be invested by providers of health care, like private hospitals. But ultimately, the cost gets passed on to the system and we're part of the system. So I understand your question.

I think the challenge, in relation to technology, is to ensure that it's actually providing effective outcomes at better cost to society than the previous method. And the advances in technology, not just in health care but across all sectors, having the main been great drivers of efficiency and greater effectiveness and productivity for nations.

Our ability to influence the extent to which hospitals invest in those things ultimately comes through the negotiation we have with hospitals because if they're going to buy a large piece of equipment and intend to provide a new service and charge for it, they will inevitably ask us, whether or not it's a sort of thing that we would like to include in our policies, whether it's a sort of thing that we think our members are going to get value for. And so there's a lot -- pardon me, there's a lot of discussion about returns and investment by those hospitals.

We would hope that there was more discussion so that we can actively get involved in the allocation of capital, in the same way as I mentioned that we'd like to see greater transparency in relation to where costs are incurred. So it's an ongoing challenge. But overall, we are very much in favor of the use of new technology if it can improve the outcomes for members in relation to health care, and/or reduce costs in doing so.

Okay. Anyone else have a question? These are great questions. If there are no more questions from the floor, I'll check if there are any questions online or via telephone.

Yes, Chair. We do have 2 questions online. I'll start with one that's linked to our recent discussion. It's from [ Mr. Andrew Keller ]. Some have seen extraordinarily high prices for procedures in comparison between private and public hospitals. Private hospitals costs being seemingly higher in cases for the same procedure. Is this being monitored in any way? Surely, it adds to health insurance premiums in a negative way.

So do you want to?

Thanks, Andrew, for the question. So it comes back to the conversation we're having earlier, and I talked about this concept of right care at the right price, the right time and the right setting. And a big part of our strategy moving forward is working with our provider partners, public and private, day surgeries, short-stay hospitals, our high acuity overnight facilities across the full spectrum of the provider network to ensure that we put the consumer first around what is the most appropriate care delivery method in partnership with the clinician at the most efficient price.

And so it's really around balancing this access and affordability, and we certainly recognize that there is opportunity, and I talk to this transition that is underway around how do we work with our providers to accelerate that transition so that we can alleviate the cost burden that is still being incurred in some of these settings. So to give you an example around some of these elective surgeries that still continue to take place in high-cost overnight facilities. There are good reasons around why that does take place, but we also recognize that there are these emerging care delivery models, virtual care, care in the home. I talked about rehabilitation in the home earlier, and day facilities where it is highly appropriate that we work with our members and their doctor to guide them into that care pathway.

And so of course, every patient will have its own unique journey, and so it needs to be treated on its merits. But it is an opportunity. It is about then putting the consumer at the center of that conversation and saying, well, what is the most -- the best way we can deliver the optimum health outcomes at the right price. But this will take time. And we -- and I talked about some of the challenges around this transition. So this is going to be multifaceted and multiyear to work on this transition. And they are important partners in that ecosystem and that we need to support with that transition. So it is a balance. Prosthesis is a topic that often comes up around the distortion between public and private pricing there. And again, we work in collaboration with the government and the stakeholders that I've talked to earlier around what is a sustainable and sensible way that we can get better consistency and parity on our prosthesis pricing.

Thanks, Ed. Ross, [indiscernible] questions?

I guess one final question online. [ Mr. Henry Kay ] has asked, has nib considered linking with the Virgin Australia Frequent Flyer program?

That one I'm going to pass to you, Ed.

I'll tackle that one. Thank you for the question, Henry. Of course, from time to time, we explore all different partnership options, but I'm sure it goes without saying that we have a fantastic, trusted long-standing relationship with Qantas as a key distribution and brand loyalty partner of nib. They're an important part of our Australian residents health insurance growth strategy. They've been a fantastic partner for many years. And at this stage, we have a very -- enjoying that long-standing relationship. And so I don't see an urgent need to be considering other opportunities.

Of course, if we step back and say, well, what's -- whenever we look at these different partnerships, and it came up on an earlier slide, if you look at the breadth of the brands that we work with, we will continually look into the market for unique propositions, highly engaged brands, trusted brands with large loyal customer bases and where we can work together and bring the best elements of nib and that partner brand. Of course, we remain open to those different distribution strategies. So hopefully, that is the helpful around the conviction we have around the Qantas arrangement, but also then remaining open to have a distribution, including several large insurers and banks that we work with today.

And there are no questions on the telephone line.

All right, lovely. All right. Well, now that we've considered the reports, we'll deal in turn with each of the items set out in the notice of meeting. I declare that voting on a poll for all resolutions is now open. Votes may be changed up to the time voting is closed at the conclusion of the meeting.

For those of you in the room who are eligible to vote, scan the QR code on your attendance card with your smartphone or other device, and this will take you to an online voting page. To vote, select one of the voting options. A tick will appear to confirm receipt of your vote. To change your vote, select click here to change your vote, what a surprise, and select a different option to override. Alternatively, if you are not able to vote using the QR code, you can vote by following the instructions at the back of the poll card. Participants who have logged into the online platform as a shareholder or proxy will be able to vote by following the instructions on their screen.

Now Item 2 on the agenda relates to the remuneration report contained in the 2025 director's report. In accordance with the Corporations Act, this vote is advisory only, and the outcome is not binding on the Board. nib's approach to remuneration is simple and underpinned by a strong governance framework. Consistent with our approach in previous years, we are actively engaged with and seek regular feedback on our remuneration framework from key interest groups, including shareholders, proxy advisers and other shareholder representative groups, including the Australian Shareholders' Association. The directors unanimously recommend that shareholders vote in favor of adopting the remuneration report of nib for the financial year ended 30 June 2025, as set out in the directors' report.

And I'll now take questions on this item of business. If a shareholder in the room would like to ask a question, please make your way to the microphone or raise your hand, and we'll bring a microphone to you. Has anyone got any questions on the remuneration report? No questions. All right. What about questions online or by phone, Ross?

No, there are no questions.

No questions. All right. There being no questions, I will reveal the proxy votes received prior to the meeting in relation to this resolution. As the Chairman of the meeting, I have been appointed proxy by some shareholders to vote on this resolution, and I intend to vote undirected proxies, which are able to be voted on this resolution, in favor of Item 2. There are voting exclusions applicable to this resolution, which are outlined in detail on Page 8 of the notice of meeting.

I now put to a poll the resolution that the remuneration report of the company for the financial year ended 30 June 2025, as set out in the director's report, is adopted. To vote, click one of the voting options shown on the screen or on the back of -- the instructions on the back of your card.

Now item 3 on the agenda is my reelection as a Non-Executive Director of nib. And for the purpose of this item, I'm going to hand over the meeting to Anne Loveridge, a Non-Executive Director and Chair of nib's Audit Committee. After the poll on this resolution, I'll resume the role of Chairman of the meeting.

Thank you, David. David was appointed to the Board of nib Holdings Limited in May 2020 and has been Chair since July 2021. In accordance with the ASX listing rules and nib's constitution, David retires, and being eligible, offers himself for reelection as an Independent Non-Executive Director. I now invite David to address the meeting regarding his reelection.

Okay. Well, good afternoon, shareholders, colleagues and guests here in Sydney and those joining online. It's been a privilege to serve on the nib Board, and I'm honored to be standing for reelection as a director. I joined nib, as Anne said, as a non-Executive Director in May 2020, and was appointed Chair in July 2021. I remain as passionate about the business today as I was when I was first appointed, and I remain committed to supporting nib's senior management team.

I came to nib with broad experience as a director of public and private companies and incorporated advisory roles into Australian and international organizations. I've got extensive knowledge of strategy development, mergers and acquisitions and capital raisings and a strong track record in business growth, including the accelerated adoption of technology to grow market share.

As Chair, I take great care to maintain my independence and due diligence and act with fairness guiding nib's purpose. As we look ahead, I remain committed to ensuring nib continues to deliver value for shareholders, for customers and for the broader health system. I am very proud of nib's governance standards and the strategic direction we set. I respectfully seek your support for my reelection, and I thank you for your continued trust in my leadership.

Thank you, David. The directors, with Mr. Gordon abstaining, recommend that you vote in favor of the reelection of Mr. Gordon as a Non-Executive Director of nib.

I'll now take questions on this item of business. If a shareholder in the room would like to ask a question, please stand at the microphone in the aisle or raise your hand and someone will bring a microphone to you. To ask a question online or via telephone, please follow the prompts. Any questions in the room? Ross, are there any questions online or via telephone?

No questions online or via telephone.

Okay. There being no further discussion, I'll now reveal the proxy votes received prior to the meeting in relation to this resolution.

As the Chair of the meeting for this part of the meeting, I have been appointed by proxy by some of the shareholders to vote on this resolution. I intend to vote in favor of the resolution detailed in Item 3 for the proxies open at the chair's discretion. I now put to a poll the resolution that Mr. David Gordon be reelected as Non-Executive Director of the company. To vote, click on one of the voting options shown on the screen or fill in the card in your hand.

I will now hand back to David to chair the remainder of the meeting.

Thank you, Anne. Item 4 on the agenda seeks shareholder approval for Mr. Edward Close, Managing Director and CEO, to participate in the long-term incentive plan via a grant of performance rights for the financial year commencing on the 1st of July 2025, with a 4-year vesting period. The plan forms part of nib's remuneration strategy, and it's designed to align the interests of executives and shareholders to assist nib in the attraction, motivation and retention of executives. In particular, the plan provides executives with an incentive for future performance, thereby encouraging those executives to remain with and contribute to the future performance of nib. A summary of the planned rules is set out in the schedule to the explanatory notes in the notice of meeting.

The Board, with Mr. Close abstaining, recommends that shareholders vote in favor of the ordinary resolution in Item 4. And I'll now take questions on this item of business. If there's a shareholder in the room who'd like to ask a question, please make your way to the microphone. And if you'd like to ask a question online or via telephone, please follow the prompts. Is there anyone in the audience here today in the room that would like to ask a question about this resolution? So we do this every year. It's an ASX requirement for the participation of the Chief Executive that shareholders get an opportunity to both ask questions and vote. If there's no one in the room who'd like to ask a question. Are there any questions online or via telephone?

There are no questions.

Okay. As there's no discussion, I'll now reveal the proxy votes received prior to the meeting in relation to this resolution. Here we go. As Chairman of the meeting, I've been appointed proxy by some shareholders to vote on this resolution, and I intend to vote undirected proxies which are able to be voted on this resolution in favor of Item 4. There are voting exclusions applicable to this resolution, which are outlined in detail on Page 8 of the Notice of Meeting.

And I now put to a poll the resolution, which is displayed on the screen. I'm certainly not going to read it. There being no further discussion, I'll now pause to allow shareholders time to finalize their votes. For shareholders present in the room with a green paper voting card, please hold these up for Computershare staff to collect. I'll now give everybody time to complete their votes or to complete their votes online.

If you have a green card, please hold it up. If it hasn't already been collected and someone will come past and collect your vote. Yes. We got there someone in the front here. Here we go. Did you have a vote you wanted to hand in? I'm sorry. Anyone else in the room who has a voting card that they'd like to hand in, please raise your hand, and we'll make sure your vote is counted. Is there anyone else who hasn't yet voted and would like to? It doesn't look like it. All right.

[Voting]

I'll now declare the poll on all resolutions -- almost. I will now declare the poll on all resolutions closed. The results of the poll on all resolutions determined -- sorry. The results of the poll on all resolutions determined by a full poll result will be lodged with the Australian Stock Exchange and made available on our shareholder website later today. A recording of today's meeting will be available shortly on the shareholder website. Shareholders and guests, that being the end of all business, I would like to wish you continued good health and well-being and declare the meeting closed. Thank you for your attendance today.

Well, good morning and thank you for joining us today for nib's FY '25 Full Year Results. I'm Ed Close, nib Group CEO and Managing Director, and I'm joined here in Newcastle by our Group Chief Financial Officer, Nick Freeman. We're pleased to share a positive set of results today. They reflect our continued focus on sustainable growth in key markets, delivering value for our customers and excelling in operational and digital transformation. Before we begin, I'd like to acknowledge the traditional custodians of the land we're joining you from today, the Awabakal people, and pay my respects to elders past and present. At nib, our purpose remains clear, your better health and wellbeing. Our vision and mission continue to guide our strategy and our people every day, ensuring we deliver value to our customers, our partners, our communities and our shareholders.

So turning to Slide 6 and looking at the FY '25 highlights. In FY '25 we delivered a strong group operating performance in line with guidance with UOP of $239.2 million and NPAT of $198.6 million. Our core arhi business continues to perform, achieving 3.2% net policyholder growth and maintaining stable net margins well within the 6% to 7% target range. Our digital-first customer-led approach supported a group NPS of plus 34 with more than 70% of Australian PHI policies now digitally connected. Long-term hospital partnerships and enhanced provider networks are delivering real value for customers and providers, improving access and affordability to quality health care. Our adjacent businesses are building positive momentum, contributing a solid $45.3 million in UOP to the group result. Notably New Zealand returned to profitability in the second half of '25. Our international students and workers portfolio grew UOP by 23% and Honeysuckle and Midnight Health losses were halved. We also accelerated our productivity agenda, delivering $18 million in savings, with over 50 AI and machine learning initiatives now in production across the group. Our refreshed strategy is delivering results, with a primary focus on our core PHI businesses, whilst also scaling Health Services and in plan management. The nib Travel strategic review is progressing well and remains on track.

So if we turn to Slide 7, looking a little deeper at some of our key performance metrics. We delivered strong results in line with guidance, as I mentioned earlier. Looking at group revenue, which rose 7.8% to $3.6 billion, our PHI portfolio now covers nearly 2 million people, up 3.2% on the last 12 months. We're also pleased with our ongoing productivity focus, and this progress is reflected in our group operating expense ratio improving by 50 basis points to 17.7%. Net investment income rose 28.9% to $79 million, and the group maintained a fully franked dividend of $0.29 per share in line with FY '24.

So taking a look in Slide 8. In our flagship arhi business, our consistent track record of growing well above system continued where we outpaced the market with 3.2% net policyholder growth and 3.9% growth in combined policies. FY '25 marked our best ever sales year up 13%, driven by a high-performing, multichannel distribution strategy targeted towards high-value segments. We attracted 52,000 new-to-industry customers and remained a net gainer from switching behavior. Net margins remained stable and were guided into our 6% to 7% target range as we expected, supported by disciplined pricing, optimized product design and tight cost control. With 1.4 million Australians now covered and a 9.7% market share in arhi, we see high potential for continued growth in our priority markets with our product, pricing, and value proposition well positioned across our various brands and channels.

If we turn to Slide 9, we continue to prioritize value for our customers and providers, supporting a health care system in transition. Innovative care models are reshaping health care delivery in Australia, improving access and making high quality care more affordable for consumers. And in FY '25, nib supported over 121,000 health interactions through wellbeing offerings and telehealth support, and we enrolled more than 22,000 customers in health management programs in partnership with Honeysuckle Health. Our prevention and in-home care initiatives saved more than 24,000 hospital bed days, and we expanded our no gap dental and optical networks to over 500 providers, saving customers $40 million in out-of-pocket costs. Our known gap model now covers more than 40,000 medical specialists across the country and 1 in 4 major joint procedures is now delivered through our no out-of-pocket Clinical Partners program with leading specialists across Australia. We also continue to actively support the wider health care system. We've secured multiyear partnerships with some of Australia's largest hospital groups, and we've provided nearly $28 million in additional private and public hospital funding over the past 2 years, including support for the New South Wales public health system. And importantly, our arhi hospital claims ratio remains in line with historical levels.

If we take a look at Slide 10, our adjacent businesses made strong progress in FY '25, contributing $45.3 million to the group UOP result. International saw revenue growth of 14.4% and UOP was up 23% with more than 46,000 PALM lives supported, those direct employer relationships strengthened and new growth opportunities emerging from commission reforms. Across in New Zealand, our recovery plan is gaining positive traction. Price increases are now aligned with inflation, product and network changes are taking effect, and we returned to profitability in the second half of '25 as inflation stabilized. We also welcomed our new New Zealand CEO, Skye Daniels, who arrived in August. Our Health Services strategy is progressing well with Honeysuckle and Midnight Health now fully owned and consolidated, losses halved and we're on track for profitability in FY '26. In Travel, we posted our best monthly sales in 2 years in June, supported by strong distribution and disciplined cost control. The strategic review is well advanced and remains on track. Thrive is now at scale following our inorganic growth strategy. The Instacare acquisition boosted performance across the year, and service levels remained strong, with 96% of claims processed within 1 day and 85% of calls now answered within 90 seconds. UOP of $16.9 million was up 10.5%.

So turning to Slide 11. In FY '25, we commenced a multiyear productivity program, and in the last 12 months, as I mentioned, this has delivered $18 million in savings. Our group operating expense ratio reduced by 50 basis points to 17.7%. This was achieved while containing nonmarketing expenses to just 3.4% growth in an inflationary environment. And pleasingly, we saw customers per FTE improve by 7.7%. We're accelerating our digital-first agenda to drive better customer, employee and efficiency outcomes. Over 50 AI initiatives are now in production, including nibGPT, an internal knowledge management tool; our AI summarization strategy, supporting more than 500 contact center agents, which has cut after-call work by 60%; our chatbot, nibby, handled more than 5 million interactions in the last 12 months and helped to streamline customer service and reduce response times; and we're now straight-through processing nearly 1 in 2 Thrive invoices using AI, with a rapid expansion underway to arhi and New Zealand. Finally, we've completed a groupwide simplification across our operations. We've combined Australian PHI operations, we've consolidated Health Services and we're refocusing our New Zealand and Travel businesses to their core markets. These changes have been supported by our new group operating model and capital allocation framework to ensure disciplined focus and execution of our revised strategy.

And with that, I'd now like to pass to Nick, who will go through the financial results in a bit more detail. Thanks, Nick.

Thanks, Ed. And as Ed has pointed out, group UOP landed at $239.2 million, which was within our guidance range of $235 million to $250 million. It was driven by continued top line growth with arhi growing once again above system and expense management was a highlight with our operating expense ratio reducing from 18.2% to 17.7%. Arhi claims inflation continues to moderate during the year on a like-for-like basis, and New Zealand was ahead of expectations, recording a profit during the second half. We'll talk a bit about those businesses more in a moment. A few other things worth noticing. Strong performance in our international students and workers business, with UOP growing 23%, the Health Services losses halved and Honeysuckle Health did achieve its first breakeven month in the fourth quarter as expected. Investment income was strong and in line with market performance. And I think as some of you already noted, we did have a low effective tax rate, as $13 million in Midnight Health historical tax losses were recognized after we moved to 100% ownership.

Turning now to arhi. We've already talked about the growth, and we'll talk a bit more about claims inflation on the following slides. Net margin was 7.3% with an underlying margin at 6.5% being managed back into our target range. Gross margins reduced and are now back in line with historical margins down from the elevated post-COVID levels. The groupwide expense efficiencies flowed into reduced operating expense ratios in arhi and allowed further investment into our no gap and known gap offerings. Downgrading increased from 0.3% to 1%, which is in line with historical averages. And there was limited gross margin impact as the downgrading tended to occur in the lower-margin segments as we actively managed the pricing and product design.

Okay. Have a look -- a bit of a look at deeper dive into inflation and margins. In this slide, the key highlights are that nib continues to have an industry-leading margin position and, similar to industry, is seeing margins come back to pre-COVID levels. Inflation has continued to moderate, reducing from 5.9% to 4.5% on a like-for-like basis. Actual inflation was 4.9%, including the New South Wales hospital bed rate changes. Our pricing averaged 4.52% during FY '25 against an average inflation of 5.4, so it's not surprising that gross margin declined. But with current pricing at 5.79%, settings are once again realigned to promote margin stability. And you can see in the bottom-left chart that most of the -- bottom right chart, I should say, that most of the inflation has been driven by increased hospital indexation and to some degree, medical inflation, which is in the hospital other. Utilization, length of stay and extras inflation have been settling at expected levels.

Turning now to margins. We reported a net margin of 7.3% and an underlying margin of 6.5% and the only significant factor in the difference were claims development and LIC movements. There were 2 impacts in this regard. Firstly, we did reduce the probability of sufficiency in the risk margin from 98% to 95% in the first half, as the claims inflation started to stabilize. I would highlight that 95% is still a very confidence level with the APRA minimum for capital being 75%. Secondly, we saw significantly faster claims processing speeds, which reduced by about 5 days. And in the bottom-left-hand box, we show the average payment percentage relating to the current month. In the bottom right, we outline the gap between the claims inflation and also where our pricing is. And as we continue -- as I continue to mention, the accommodations or the settings are a little more stable right now with 5.79% pricing against the 4.9% inflation. There'll be further continued net margin stability through targeted pricing and product design, the network controls and also the ongoing focus reducing the MER. Worth noting that our LIC provisioning and risk margins are now in line with pre-COVID levels, aided again by the moderating inflation and more stable claims processing.

If we now move to Slide 17, and I'll try and run through some of these segments a little more quickly so we can run through to Ed and some questions. As I mentioned before, international students and workers performed very well with the UOP growing at 23%. We'll go to New Zealand, where I might linger a little bit longer. New Zealand has experienced challenging circumstances, making a loss in the first half. And while we made a profit in the second half, it was still a loss for the full year. Claims inflation reached unprecedented levels, especially in early Q3. And while it's still high, we are seeing some moderation in the inflation. As claims have developed, we're seeing inflation now around 21%. And of this 21%, 6% is service cost, which has reduced. However, the utilization remains high at 15%. The reduction in inflation in New Zealand allowed it to return to a reasonable profit level in the second half. However, I just want to caution at the moment around the working days impact, which we still expect to be present in the first half of '26 and also the challenging conditions continued with that utilization. Having said that, our claims inflation recovery program is still well progressed and will continue into FY '26.

Turning now to Slide 19. And this slide just provides a little more insight into -- on pricing and aligning with inflation trends. So on the left-hand side, what we can see is that -- I don't know what to call it, salmony pink, I'll go, salmony pink line is the applied increase at renewal. And as that runs through the book, as it progresses through the book every month, the average renewal increase, which is the dark green line, has been trending up. We can now see that, that's starting to intersect with the inflation line, which is the lighter green line. On the right-hand side, I should also highlight that there were 9 fewer working days in the second half of '25, and that obviously helped the profitability. And that impact continues -- the first half, second half impact continues in FY '26, and we've provided some more details of that in the appendices.

Okay. Zipping through the other segments. Let's go to Slide 20, Travel. The other thing I'd just highlight is the second half being a good -- much stronger than the first half of $4.8 million. GWP up 6.7%. That's probably about all on that. I'll go to Thrive. Thrive grew its UOP by 10.5%, and that was mainly driven by the successful acquisition of Instacare in December 2024. And then Health Services, I might just linger a little bit on this. So Health Services, you can see that the profitability trend continues to trend towards breakeven, which we expect in the full year. Honeysuckle Health had its first breakeven month in Q4. And I'd also highlight that we did make some further investments in the Health Services segment as we moved to 100% ownership of Honeysuckle Health, 100% ownership of Midnight Health, as well as an investment in ItsMy Group, which is a market-leading private health insurance sales and service and technology company, powering more than 20 Australian health insurance brands.

Turning now to capital management and cash flow. Our balance sheet remains strong with group gearing and leverage remaining stable and at low levels despite our debt increasing modestly as we invested in the purchase of Instacare and in the Health Services segment. In terms of cash flow on the next page, cash flow -- it was pleasing to see the expected bounce back in second half cash flow occur with cash flow 19% higher than the prior corresponding period and operating cash inflow growth exceeding operating cash outflow growth in that half. I think the more stable margin environment in both New Zealand and Australia, along with stable claims processing speed, should be positive for cash flows moving forward. I'll now hand back to Ed.

Thanks, Nick. So turning to our strategy. Our refreshed strategy focuses on 4 core areas. Our highest priority focus is to drive above-system growth and consistent sustainable earnings across our core PHI businesses in Australia and New Zealand through our multi-brand, multichannel approach, disciplined pricing and innovation across products and provider networks. Our health management strategy, in partnership with Honeysuckle, will continue to scale up with the aim of improving health outcomes and access to affordable care for customers, alongside optimizing our claims performance. Secondly, we're expanding Health Services and our insurance partnerships to deliver greater value to our PHI businesses and our strategic B2B clients. With Honeysuckle and Midnight now consolidated, we're positioned to drive operating leverage as they transition towards profitability, and we'll focus on scaling our offerings in health management, corporate and virtual health and injury support. We continue to expand our relationships with PHI and non-PHI brands across Australia in partnership with ItsMy Group, a market-leading PHI technology and services business. Thirdly, in NDIS plan management, we will strengthen our growth profile through a multi-brand strategy targeting key geographies and distribution channels. A big focus is around enhancing participant and provider experience and capturing efficiencies through the integration of private health insurance and digital infrastructure across the operating model. And underpinning those 3 pillars, we're unlocking group productivity through AI and digital-first capabilities, a big focus on simplification of our business model. This growth strategy is underpinned by disciplined capital allocation to support long-term value creation and returns for shareholders.

So turning to the all-important FY '26 outlook slide. Looking ahead, we expect a positive uplift in group UOP, driven by continued strength in Australian PHI and expected return to full year profitability in New Zealand and solid momentum across our other adjacent businesses. In arhi, we're targeting above-system policyholder growth of around 3% and maintaining stable margins in the 6% to 7% range. International students and workers will continue to contribute strongly, and our New Zealand recovery plan is progressing well. In non-PHI, nib Health Services, as we mentioned, is on track for full year profitability. Thrive remains focused on organic growth and further efficiency gains following the removal of setup fees by the NDIA more recently. Our multiyear productivity program will continue to underpin our group performance with further ongoing reductions in our group operating expense ratio and capital expenditure and one-off costs also expected to reduce materially over the next 12 months.

So FY '25 marked a year of disciplined strategy execution with positive momentum across our core PHI and adjacent businesses. We have a clear focus on sustainable growth, on operational excellence and digital-first customer experiences. We are well positioned to deliver consistently strong outcomes in FY '26 and beyond. And with that, I'd like to now open up for Q&A.

[Operator Instructions] First question comes from Julian Braganza from Goldman Sachs.

Just a first question on the New Zealand business. You're putting through price increases in the order of 15% to 20%, but the revenue growth that's coming through is mid-to-high single-digit, around 8%. I just want to be clear what the difference is there. What's happening with volumes? What's happening with downgrading? and what's the expectation for revenue growth into '26 as well, given the rate increases that you're pushing through?

Thanks, Julian. I'll kick off with some high-level remarks and then pass to Nick. So there's definitely a timing element to what you're seeing there come through in the FY '25 revenue uplift of circa 8%. We guided you to the 12 months portfolio pricing as they're coming through on a quarterly basis. What I would say is that -- and we talked to this, is that our pricing is now matching inflation, but that will take some time to wash through the portfolio, as I'm sure you can appreciate. We've got different channels and different cohorts that have their different renewal periods and those anniversary dates are still playing through. But I guess we have high confidence when you think about that pricing matching inflation piece that we're now on top of that previously significant challenge. So really, when you think about the FY '26 piece, I think you can have high confidence that our ability to match the inflation is good. And I guess you're seeing that timing aspect that's flowing through the '25 result versus our expectation moving forward. Nick?

No, I think that that's right. And we did see our residents book decline a little bit in FY '25, but we'd expect the pricing to compensate that into FY '26.

Yes. And maybe a final comment just on the growth outlook. So you mentioned volume, Julian. We are seeing strong resilience from that portfolio around the ability to absorb those significant premium increases. There are several factors that are quite different in the New Zealand market to Australia around switching and portability of policies between funds. I guess the other piece is that given this is an industry-wide challenge that insurers are facing, that we are seeing competitors also consistently lift premiums as well. So competitive positioning remains strong.

Okay, great. And just a second question on the arhi net margins into FY '26. It looks like you're guiding to about stable margins, underlying margins, 6.5% call it, from '25 into '26 with, I guess, second half '25 probably around 6.3%, a touch softer. Maybe if you can just talk a little bit about the moving parts into next year. And I know from a rate inflation perspective, you're saying that should be more aligned. But just in terms of downgrading, given how material that was in the second half from what I can calculate and also just in terms of expenses, just those 2 key features in particular, how should we be thinking about that into next year?

Yes. So as we've stated, we're guiding to underlying margins in that 6% to 7% range across the full year. The components, you're breaking that down a little bit. You're obviously aware of the premium increase that was announced in April, and that's largely the benefit of that will flow into the '26 period. So that's something that you can look to. We've also shared the claims inflation per customer per workday at 4.9%, including the New South Wales bed rate impact. We've also showed you what that looks like when we back that out. So I think you can take that as another data point. Industry claims is tracking around circa 5%. So you can triangulate those pieces there as well. And then we've talked about ongoing opportunity from a productivity perspective as well. And so if you think of the components around the confidence that we have around the underlying net margins being within that 6% to 7% range, I think you can triangulate those data points as a good guide. We talked previously around 4% to 6% as an inflation assumption that we think about at nib moving forward, and there's nothing that suggests that we're moving away from that broader range as well. Anything that you'd like to add there, Nick?

Yes. I think, also, when the hindsight flows through, Julian, the second half margins are probably a little more positive than 6.3% as well.

Okay. And just on downgrading and expenses, just expectations into next year, given what we have experienced over the second half?

Yes. So with the downgrading, Julian, we talk about 1% being more in line with historical levels. Certainly, we saw elevated downgrading and also some lapse impact coming through from absorbing that premium increase. We took the opportunity to deliberately make sure that the portfolio was optimized in those higher-value segments. So some of that downgrading, we're seeing minimal-to-immaterial gross margin impact as a result of that revenue downgrading as we tilted our portfolio to those higher-value segments. So we're actually quite comfortable with that level of downgrading that's playing through at the moment.

The piece on lapse, we do have a large proportion of our cohort on lower-value policies, which means whilst the downgrading would be occurring at the top end, obviously, there's not that alternative available to those individuals that reside on the basic and bronze level covers. So again, there are some factors around that. Pleasingly, and we obviously talked to the full year 3.2% on the policyholder growth, but we saw really positive momentum in the last quarter as we made those pricing and product changes and the progress year-to-date is also pleasing.

Next question comes from Andrei Stadnik from Morgan Stanley.

Can I ask my first question around lapse rates? It looks like lapse rates went up and might have hit an all-time high at almost 15%. But looking into next year, do you think that can improve? And what have you baked into that 3% net policyholder growth plan?

Yes, Andrei, we haven't guided to any explicit composition around sales lapse scenario for '26, but we have obviously talked to the around 3% ongoing target. And a big part of our business model, as everyone is well aware, is that continued ability to outpace market growth. And so we have high confidence around that ongoing. There's a couple of elements I should point out on lapse. Certainly, that higher sales rate, and we talked to record sales in '25, does drive some increased churn as a result of that. And so roughly 1/3 of some of those -- that lapse increase would be attributable to the higher sales period, and it does come with the business model that we've always had that longstanding ability to unlock. The second piece I talked about was that proportion of cohort on those lower-tier products, and again, not unsurprising to us. And if you look back to historical levels, you will see that lapse is generally something that does come with policyholder distribution strategy that we go after. That said, and you've touched on this, retention is a big priority for us in the arhi business moving forward. And so the investments that we've made in our no gap and known gap network enhancements, the investments that we've made more generally around programs like Clinical Partners, the work we're doing with Honeysuckle Health and several other loyalty and retention initiatives are in full flight. And so we are deliberately focused on improving that lapse rate moving forward.

Look, and for my second question, can I ask you to expand a little bit on what happened in Thrive during the year? Because I think it was subject to a compliance [ notice ] for a period of time that might have slowed some of the growth there. So how do you view your aspirations going forward in terms of what might be possible in terms of supporting what the government wants to do with NDIS and how confident are you that you've got a tight grip on operational issues?

Yes. So touching on the last 12 months in Thrive, yes, we did encounter some temporary service disruption as a result of the integration of 5 of our plan management businesses back in November. So those businesses came in under the nib Thrive umbrella, and that did cause some short-term delays in processing and service levels across our participant and provider community, and we were disappointed with that outcome. And certainly, the team have worked very hard to get back on track in terms of our operational excellence there, and we talk about some of the service levels that 96% of claims now being processed same day, 85% of calls being answered within 90 seconds. And so we aspire to a best-in-class participant and provider experience, and we were disappointed that temporary reduction in those service levels, but we're pleased with the progress that's been made over the past 6 to 9 months and certainly are comfortable with the servicing levels. That did also, and you would see this in the numbers that, that did impact our participant growth for a period of time. But again, we've worked hard. And with the addition of Instacare, we've got that breadth of brand distribution and geographic stretch now to give us confidence around our growth projections moving forward. And I guess we remain actively engaged in constructive dialog with industry partners around future navigator models and the important role that the intermediary sector, that plan management role, as well as support coordination, play in driving participant experience, but also scheme sustainability. So we're quite buoyed about the projections there in Thrive.

Next we have Nigel Pittaway from Citi.

Just, first of all, I think at the half year, you said central estimate was around about [ 10%-ish issued ] claims. Presumably, that's a bit lower now. So can you give us just a feel for whereabouts that currently sits?

I think, Nigel, I'm just trying to get to the slide. We have that on Slide 32 of...

Oh, there it is.

Yes.

All right. It's always in those backslides that I never quite get to in time, but all right, 32 is it? Okay, very good. All right, well I'll take that for the moment. All right. Just in terms of -- obviously, you're reiterating your 3% policyholder growth for next year. Are you expecting system to grow at similar rates? Or are you expecting any downward pressure on the rate of growth of system in setting that guidance?

So industry was tracking at about 2.3% for the 12 months to March based on the APRA data, Nigel. We're anticipating similar levels. We are seeing, obviously, with easing cost of living pressures as rate reductions start to flow through, that's one indicator of ongoing support for participation and the relevance of private health insurance. Also, notwithstanding ongoing public pressure around wait times, gives us confidence that industry will remain at similar levels, maybe modestly lower than that 2.3% mark. And as I mentioned, we've tilted product pricing and our distribution certainly in the back half of '26 and gives us high confidence that around that 3% mark is achievable.

Okay. Fair enough. And then just maybe a bit more on the inflation components. Again, I think when you previously were saying that things like rehab and gyno were quite elevated within hospital. Is that still the case? Or have other modalities come to the fore? Can you just give us a bit of a flavor of what's happening there?

On a modality basis, Nigel, fairly broad-based, it would be our view now within that hospital and medical categories. So nothing that's jumping out that has caused us any surprised or questioning as to why there's been a significant uplift. I know coming out of the temporarily benign COVID period, we did see certain modalities jump around a little bit. But largely for us, we're seeing pretty consistent growth and stabilization across those hospital categories.

I think probably the big callout would be more on the hospital indexation side, the impact of that and also the medical inflation as well. They'd be the 2 main drivers.

Yes. Okay. And do you think we've reached peak indexation now or...?

I won't try and crystal ball how all of that plays out, Nigel. What I would say for nib is that -- and we've been quite transparent around this, that securing those multiyear agreements with all the major hospital groups gives us confidence and clarity around our forward-looking indexation levels into '26 and beyond. And so with that, we're guiding back to those 6% to 7% margins as really the best indicator around our projections around that. And certainly -- and we've talked about the arhi hospital payout ratio being in line with historical levels, we're feeling that, that's going to be well supported as we move into the next premium round.

Next question comes from Andrew Buncombe from Macquarie.

Just the first one would be interesting to get some insight into what is happening with the PALM contract going forward.

Andrew, I can't say too much on PALM at this point, given conversations are still commercial in confidence and that process is still playing out. What I would say, though, is that nib has had a long-standing track record of delivering exceptional outcomes for those PALM participants and the employers that are directly engaged in supporting that seasonal worker program. So we've strengthened our relationships over the last few months. We remain very positive about the outlook of that PALM offering. And those direct agreements that we have struck with those approved employers, remembering that this is a nonexclusive arrangement that nib has and there are other insurers that actively play in that space, but we've been able to forge a dominant market share through the conviction that we have working really closely with those employers and participants. So outlook, I would say, is positive. What I can't say is anything that's commercial in confidence at this stage, sorry, Andrew.

That's okay. The next one, sticking with international. It sounds like there's [ portfolio ] in that market currently up for sale. Given how NHF has had mixed success in Travel, NDIS and currently in New Zealand, how would you convince investors that nib are the best stewards of reinvesting that excess capital to double down on that market?

Yes, I'm not fully aware of inorganic growth opportunities in the international segment, Andrew. It's not the highest priority on our radar at this point. So probably all I'd say on that one at this point.

Yes. No, that's good. And then the final question from me. It looks like your risk equalization contribution in the second half of '25 was very low this period. Just any color around whether you think that's the go-forward rate would be helpful.

I'll jump in there. Probably payment speed related, given it's on a cash basis, I think that there were some interesting ins and outs in the second half in terms of the cash and which players paid more cash versus less cash. So I'd like to see that play out a little bit, Andrew, before we'd have any comment.

Next we have Siddharth Parameswaran from JP Morgan.

Couple of questions, if I can. Firstly, just on the arhi division, I just wanted to just check firstly on the inflation numbers you've given us, 4.5% FY '25 on an incurred basis and 4.9% including New South Wales bed rate changes. I just want to make sure or clarify what it is on a paid basis, because I think the number suggests it's reasonably higher. I was wondering if you could just help us understand that and which one we should be using because does that 4.5% include any changes in reserving assumptions?

The 4.5% does include the changes in reserving assumptions. And in terms of the paid, we'll talk about that in the afternoon, because, again, we had that 5 days improvement in claim processing speed.

Okay. Maybe I'll just clarify. Just a follow-up to Julian's question then earlier. Just starting with an underlying margin of 6.5%. If I just take into account the rate increase that you got and the inflation that you're flagging, it would suggest that the margins may inch above the target range. I'm just wondering if there's -- and particularly given that you're also flagging some efficiency gains, just wondering if you could maybe just bridge the gap.

I guess there's a lot of moving parts in that one, Sid. If we work forward, there's still the indexation to play fully out. You've got whatever the pricing assumption is going to be in the 1st of April next year. And you've got that industry inflation at around 5%. And again, our average inflation is still -- and pricing is still catching each other up. They've aligned on a point basis. But as we highlighted, that we're still catching up. So I guess we're pretty comfortable with the guidance that we've provided, but depending on if you want to move some of those assumptions to 20 or 30 basis points one way or another, I could see where you'd come from there. But again, I think that's why we're pointing to where we're pointing, because there's still a few things playing out.

Okay. That's helpful. And just one final question. Ed, you said you had a strong outlook for international. I was just keen to just clarify that. Is that driven by pricing changes you're making? Because we do have some potential adverse outcomes on student numbers and maybe migration slowing as well. I was just keen to understand, is that pricing-led? Or is it also you're positive on volumes?

Yes, Sid, I think we talked to ongoing strong contribution from our international segment. You've touched on a couple of important points. Migration settings have evolved since those COVID peaks, or those post-COVID peaks, I should say. And so they are normalizing to more consistent levels with pre-COVID. So from a volume perspective, we remain alert to that. We do see opportunity to selectively pursue some segments that we haven't historically played within. So the university sector and the commission reforms allow us to take a look at that, things like tourist visas and working holiday makers, but we want to be really deliberate and disciplined about which of those markets we enter and why, because each of them comes with a differing risk profile. Pricing, yes, we put through sustainable premium increases over the past 12 months across that portfolio. And we've also seen some of the COVID effect washout, particularly in our students' portfolio, where those students were staying in country for much longer than they typically would. And with that comes a claims and benefits profile that we wouldn't have usually seen in that book. So there's a few factors, if you think about some volume headwinds and pieces that we need to be alert to around migration settings. But equally, then, the disciplined approach we've taken to pricing and gross margin has been pleasing. And then again, underpinned by that productivity agenda gives us confidence that the ongoing contribution from international will be solid.

Next we have Freya Kong from Bank of America.

Just following up on international. Is there anything we should read into your -- I guess, there's no guidance for margin and historically, it's been around 10% to 15%. Are you just being cautious there? Or any reason for this?

Freya, no specific reason as to why we haven't stated an explicit guidance -- sorry, a margin range in that guidance. But I think that historical data points would be a fair assumption moving forward.

Okay. And then on the group operating expense ratio, which was down 50 basis points this year, where do you see this tracking over the next 2 to 3 years? Should we expect similar annual improvements because of the productivity and simplification initiatives that you have ongoing?

So we definitely see ongoing improvements. To the orders of magnitude of the last 12 months, is not something that we are guiding to at this point. But what I would say within that group operating expense, we also need to be mindful that there's a large contribution of acquisition and growth-related expenditure there. And again, coming back to the fundamentals of our business model, we want to make sure that we preserve and continue to strengthen that growth model. So yes, directionally lower, but we won't be guiding at this point to specific reductions in the next 12 months.

Okay, great. And then final question on New Zealand. Historically, you've had that 8% to 9% target margin. Obviously, we've fallen well below that. But now that you're seeing pricing -- cumulative pricing tracking claims inflation, do you think this is still an achievable midterm target?

Yes. It's too early to make a call around the long-term or even medium-term margin achievability in that market. There are a lot of structural changes that are playing through. If you think about the broader economy at the moment in the New Zealand market, different players coming from different perspectives around the competitive dynamics in health insurance in New Zealand. And so, again, we won't be talking to getting back to that long-term average, certainly not in the next 12 months. But clearly, we are seeing some early positive signs in New Zealand, but a little bit too early to make that call, Freya.

Next we have Vanessa Thomson from Jefferies.

I just wanted to return to some of that discussion around modalities for claims and you spoke to hospital claims. We've seen through and post-pandemic that nonsurgical claims had declined in certain categories. I wondered if that had persisted into FY '25 in the second half.

Vanessa, it was a little bit hard to hear you, but I think you were talking about just some further insight around the modalities and the drivers of the claims inflation. Again, fairly broad-based and general from our perspective. Ancillary remains stable, hospital with that indexation is higher. There's certainly nothing that's been emerging of note for us, Nick, at this point.

No. I think it's a fair question, not really noticing that. If there was a small trend this year, I think last year, we called out the things like rehab had come back. This year, it might be a little bit more in the discretionary areas. But again, I think, Ed's right, fairly broad-based. Things that were noticeable because last year rehabilitation, because it's a relatively large category and it grew, was worth calling out. But in this case, I'd say sort of more even.

So the previous -- sorry about the sound. The previous patterns where we've seen less respiratory, less inpatient psych, and less inpatient rehab, have they continued? It sounds like perhaps not for rehab.

No. I guess that rehab had its growth spurt last year. In terms of -- sorry, what was the other area that you were looking at?

Respiratory and inpatient psychiatric.

Again, no, I wouldn't be noticing those things as much this year.

Okay.

Just two quick points, Vanessa, I would do want to just add there just around broader context. Length of stay is stable at this point and I guess has been on that moderately decreasing trend for some time now as we know that there's different care models that are evolving and the role of short stay, same day and the work we've done around hospital minimization, hospital substitution and some of the work we're doing with health management programs with Honeysuckle. All of those things are aiding the ability. We talked to bed days saved as a good proxy for the effectiveness of our health management strategy. So it's good to be able to look at those aspects when you're trying to get a feel for what are the controlling mechanisms that we have around improving health outcomes and managing claims. The other piece I would just note there, and we do talk to this in the Investor Pack is that we've also made deliberate decisions around investments in some areas that do have an inflationary impact, particularly our known gap and medical specialist networks, which we recognize needed to be amplified over the last 12 to 18 months, and that has also had an inflationary impact. But the benefit of out-of-pocket certainty and better provider relationships has significantly outweighed that inflationary impact.

Okay. And then second question, just on hospital contracts, and I appreciate commercial sensitivity. But you've mentioned that you've locked in the contract -- 3 contracts with the largest hospital providers. Do those contracts allow for indexation? We've seen ongoing wage pressure for hospitals still persisting. I just wondered about that.

Yes. Those contracts, Vanessa, under a partnership model, enable dynamic indexation throughout the period. And so I won't get in all the detail, but it gives us good predictability and forecast accuracy around our trajectory, and it also gives those large hospital groups clarity and certainty around those indexation levels for them as well.

Okay. And then my last question, just on Thrive. You said in the comments that the lapse rate has stabilized, I assume post the service interruptions. The setup fees are now being eliminated for new plans. So if those people come back, presumably, are they lapsing because of the interruption? Or is that just something you generally see in the Thrive portfolio?

Yes. I think there were 2 parts there, Vanessa, if I heard that correctly. The service disruptions did exacerbate that participant lapse for a period of time, and we have seen improving stability around that, particularly in the last quarter and into FY '26. The reduction or the removal of setup fees has no impact to the participant themselves. This was a fee that the plan manager took to support the establishment and then the renewal of those fees. So no impact from a participant perspective around the reduction of that fee. The opportunity, I guess, ahead for us is if you think about the Thrive business with circa 10% market share in plan management, I talked to this earlier, our commitment is around staying really focused on being an exceptional plan manager and supporting those participants and providers with processing accuracy, processing speed, wraparound services, and certainly making sure our service levels are best-in-class. With that, getting back to really solid growth numbers and unlocking further efficiency remain well in front of us.

Next we have Kieren Chidgey from UBS.

Ed and Nick, just a couple of follow-up questions to start on the arhi margin. There's obviously been a very significant shift in your payment processing times that's caused a lot of distortion between your paid inflation per person and the incurred. I'm just keen for a little bit more detail there. A, is that done in your [Audio Gap] you're talking about conservative reserving at the end of the period, but your earlier comment suggests you've reflected all these payment changes already in reserving.

No. It's more the 6.3%, and I can get the analytics and maths of how you arrive at 6.3%. But what I'm saying is that if you take the ups and downs between the first half and the second half -- so just to clarify, what I was just saying is that the 6.3% may be a little bit, I guess, pessimistic between the margin profile saying 6.7%, 6.3% goes to 6.5%. So if your exit rate is 6.3%, what does that mean for FY '26? And I was trying to say, well, that could be a little bit conservative or pessimistic, given that we're guiding

But is there seasonality in your margins?

Well, there is, as we've talked about in terms of both the workdays and the marketing. But then if you look at the LIC, you really only need about 20 basis points difference between halves to get to -- that could occur through hindsight that would get you to a 6.5%, 6.5%, 6.5% type profile between the halves. So it's really not very much change that needs to occur in hindsight that would then, instead of going 6.7%, 6.3%, 6.5%, you'd go 6.5%, 6.5%, 6.5%. And as you know, the last couple of months of every half are not fully developed. So as those develop, those sorts of tens of basis points can occur.

Okay. I might have missed a comment on this, but could you confirm the tax rate outlook moving ahead is just more of a normalized 30% and the benefit this period is one-off?

I didn't make a comment, but yes, that would be our expectation to a normalized tax rate.

Okay. And just a final question, a bit of a niche one. But your corporate or, I guess, other unallocated area had quite a lot of cost growth in the second half of '25. Can you talk about what fed into that? I think you show on Slide 35 about $16 million of nonmarketing expenses for the year, but I think from memory, it was $4 million or $5 million in the first half, so it seemed to double in the second half.

Yes. No, I think that's a really fair question. So I guess there's a couple of drivers. The first is -- I don't know how to put this any other way, but on my right-hand side there's a new Chief Executive and there's a runoff of the old Chief Executive. So we've got for a little bit of time some double up in executive costs that are flowing through. The second is that there's been some reallocation back into the corporate office because we stood up a Group Strategy and Development Division, which now sits in the corporate office. So there's been a bit of a reallocation back into that central area.

Okay. And in terms of expectation into '26, is it a similar number then? It does sound like it on the strategy side, but less on the...

Yes, a bit reduced as some of the duplication goes out during the year.

I see no further questions at the time. That concludes today's Q&A session.

Well, thank you, everybody, for joining us, and great to be with you and look forward to following up in the weeks ahead. So we'll leave it there. Thanks a lot.