My name is Miles George and I am your Chair. Welcome to AGL's 2026 annual general meeting. It is a pleasure for the AGL Board to be present in Melbourne for today's meeting. I would like to start the meeting by acknowledging the traditional owners of the land on which we meet today, the Wurundjeri people of the Kulin Nation, and pay my respects to their elders, past and present. Shareholders attending via our online platform may be doing so from other ancestral lands, and I also pay my respects to the traditional custodians of those lands and their elders, past and present. May I ask you to make sure that your mobile phones are switched to silent while the meeting is in progress. Filming of this meeting is not permitted, but please note that this meeting is being filmed on behalf of AGL for webcasting purposes.
A recording of the webcast will be made available after the meeting on the AGL website. I also ask that you note where your nearest exit is in the unlikely event it becomes necessary to evacuate the building. In the event of an emergency, please follow the instructions of the venue staff. I can confirm that the necessary quorum is present here today, and I formally declare the meeting open. Today's meeting is being conducted as a hybrid meeting, and our shareholders have been given the opportunity to attend the meeting in person or via the online platform. Shareholders have also been given the opportunity to lodge a proxy or direct vote and ask questions in advance of the meeting. We will address the key themes raised in my address and in the managing director and CEO's address.
Shareholders and proxies attending using the online platform can submit written questions or ask verbal questions via the instructions on the platform. Although you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or, if we receive multiple questions on one topic, amalgamated together. For those attending the meeting here in person, once we come to question time, you can ask a question by raising your hand and a microphone attendant will come to you. Please show your attendance card and provide your name. To be eligible to speak in person today, you must hold a yellow or blue attendance card. We will give shareholders a reasonable opportunity to ask questions, but it is possible that not all questions will be answered today.
This year, we will take shareholder questions on all items of business in one question and answer session after I have introduced all of the items of business. Voting in person today will be conducted on a poll using mobile devices. If you are eligible to vote, please scan the QR code on your attendance card with your mobile device at any time once I open the voting. If you are attending online and are eligible to vote, once voting opens, press the vote icon and all resolutions will be activated with voting options. If you do not have a mobile device, you may complete the voting items on the reverse side of the attendance card, and Computershare staff will collect the cards at the conclusion of the meeting. You can change your vote up until the time I declare voting closed. I now declare voting open on all resolutions.
I would now like to introduce my fellow directors. They are John Pollaers, Christine Holman, Graham Cockcroft, Betsy Donaghey, Mark Bloom, Vanessa Sullivan, Mark Twidell, and our Managing Director and CEO, Damien Nicks. Also attending this meeting today is our Company Secretary, Melinda Hunter, and Chief Financial Officer, Gary Brown, as well as other members of the executive team. AGL's external auditors, PricewaterhouseCoopers, are also attending this meeting. The Senior Audit Partner, Trevor Johnston, is available to answer any relevant questions in relation to the audit that you may wish to ask later in the meeting, and I thank him for attending today. I'd now like to provide an outline of AGL's performance over FY 2026. Overall, we delivered a strong full-year financial result consistent with our FY 2026 earnings guidance. We reported underlying net profit after tax of AUD 631 million and underlying EBITDA of AUD 2.1 billion.
The Board declared a final FY 2026 dividend of AUD 0.26 per share, which was fully franked, resulting in a total dividend for FY 2026 of AUD 0.50 per share. This equated to a payout ratio of 53.3% of underlying net profit after tax. For FY 2027, we're targeting a dividend payout ratio range between 55%-60% of underlying net profit after tax, which is also expected to be fully franked. Our strong financial performance in FY 2026 was achieved despite softer market conditions, demonstrating the quality, value, and flexibility of our integrated portfolio across our generation and customer business to respond and deliver against various market conditions. We also had an excellent year of operational performance, which Damien will speak to shortly. Our key focus is on providing strong returns to our shareholders, while at the same time reinvesting into future growth to deliver long-term shareholder value.
I will outline some examples of the investments and divestments we made during FY 2026 to achieve this objective. We completed the construction of the 500-MW Liddell Battery in New South Wales, which is now fully operational. We divested 19.9% of our equity interest in Tilt Renewables for AUD 750 million, which will allow us to redeploy the proceeds towards higher returning firming projects and transition opportunities. As an example, we're currently engaging with potential capital partners regarding the development of more than 2 GW of renewable projects from our pipeline. We advanced the construction of the 500-MW Tomago Battery in New South Wales, while also securing a long-term services and energy agreement for the project. We commenced construction on the Kwinana Swift Gas 2 Project in Western Australia, which is a 220-MW dual-fuel gas turbine power station to be co-located with our existing Kwinana Swift Power Station.
We signed two long-term wind power purchase agreements with Tilt Renewables, further diversifying our electricity supply portfolio. We entered into a long-term strategic partnership with Aussie Broadband, alongside the divestment of our telecommunications business for consideration of approximately AUD 115 million paid in Aussie Broadband shares. This has allowed us to simplify our customer market operations, reduce ongoing operating costs, while maintaining a bundled customer proposition through the AGL brand. We've also executed a Capacity Investment Scheme agreement for the proposed 600-MW Hexham Wind Farm in Victoria. We're also continuing to invest in our retail transformation program to deliver a modern, scalable retail platform that will underpin long-term customer and shareholder value. We remain focused on delivering the program successfully, and following a detailed review of the next phase of implementation, we expect the total program costs to increase by an additional AUD 100 million- AUD 150 million.
This reflects the scale, complexity, and regulatory environment that the program is delivering within, and our approach to de-risk implementation for our customers. AGL's FY 2027 guidance, as announced in August and which remains unchanged, is underlying EBITDA between AUD 1.9 billion and AUD 2.2 billion, and underlying net profit after tax between AUD 470 million and AUD 670 million. We remain future-focused and believe we have the right strategy in place to continue to deliver strong returns for our shareholders.
The breadth and flexibility of our portfolio, the strategic optionality within our development pipeline and our operating assets, our significant customer base, and our disciplined approach to capital allocation provide a strong foundation to navigate the evolving and complex energy market landscape and market conditions. It's now my pleasure to invite Damien Nicks, your Managing Director and Chief Executive Officer, to address you. Following Damien's address, we'll move to the formal business of the meeting. Thank you.
Thank you, Miles, and good morning, everyone. I'm Damien Nicks, AGL's Managing Director and Chief Executive Officer. I'd like to welcome those joining us online today and for those in Melbourne. It's great to be here together on the traditional lands of the Wurundjeri people of the Kulin Nation for our annual general meeting. I'm pleased to provide an update on a year in which AGL delivered excellent financial and operational performance and continued to execute its strategy. In particular, I believe AGL has become a stronger, more flexible, and resilient company that positions us to capture opportunities arising from the energy transition and growing electricity demand. Miles has discussed our financial performance and strategic delivery during FY 2026. I'll focus on the strength and the resiliency of our underlying business, including our operational performance during FY 2026, which reflects four years of execution and delivery of our strategy.
Starting first with safety remains our highest priority, and we're committed to providing a safe and supportive work environment for our people. While our total injury frequency rate increased slightly to 2.2 in FY 2026, it remains well below FY 2023 and FY 2024 levels, despite the significant volume of operational and maintenance activity undertaken across our sites. Safety is something we always aim to strengthen, and the goal of ensuring everyone returns home safely every day.
Our total customer services grew to 4.6 million as at 30 June . We're particularly pleased to grow customer numbers during FY 2026, while at the same time achieving some of our highest ever customer advocacy scores. Customer satisfaction, or CSAT, increased to 84.1% from 81.6% in FY 2025, and our Net Promoter Score was +10, an improvement of 2 points from FY 2024/2025. Furthermore, AGL's RepTrak score increased to 72.4, up 4.7 points compared to FY 2025.
Employee engagement was 70% in FY 2026, 3 percentage points lower than the prior year, but broadly in line with industry benchmarks. While periods of transformation can create challenges and change fatigue, we remain focused on building an inclusive workplace where our people feel supported, connected, and empowered to succeed. I'd now like to turn to our broader operational performance and highlight the progress we have made over the past four years, as shown on this slide. Our excellent year of operational performance across the entire business reflects the disciplined execution of our strategy over the past four years and the commitment of our people across the business. From an operational perspective, fleet equivalent availability factor, or EAF, improved to 83.4%, an increase of 4.3 percentage points on FY 2025, and a 6.6 percentage point improvement from FY 2023.
This reflects our continued investment in reliability and flexibility and allows AGL to generate when the market conditions are most favorable. AGL's flexible asset fleet capacity has grown to 8,700 MW, which is spread across a diverse range of asset types and continues to deliver increasing benefits to AGL. This is a 1,300 MW increase from FY 2024. While FY 2026 experienced lower market volatility, our flexible asset fleet generated a premium of 18% to the time-weighted market price, which is 5 percentage points above FY 2025. Our significant year-on-year investment in growth to transition our energy portfolio is clear from the metrics on the slide in relation to our assets. Our new renewable and firming capacity increased to 2,126 MW, and our total grid-scale batteries, either operated, contracted, or in delivery, increased to 1,700 MW. Both of these metrics have more than tripled since FY 2023.
Another area in which we made significant progress is decentralized assets under orchestration, which grew to 1,739 MW in FY 2026, which is a 250 MW increase from FY 2025 and a further 600 MW increase from FY 2023. In FY 2026, this was driven by a strategic acquisition of South Australia's virtual power plant, combined with material growth in customer-controlled hot water under orchestration. These FY 2026 outcomes and the reflection over the last four years demonstrate the strength of our underlying business, which is the flexibility to deliver under various market conditions. We also have significant optionality in our business that positions us favorably today and throughout the transition. Our development pipeline of renewable and firming assets is now over 10 GW. This pipeline is diversified across location, technology, asset type, including grid-scale batteries, pumped hydro, gas, wind, and solar.
We have opportunities spanning every mainland state, which is complemented by approximately an additional 5 GW of early-stage opportunities. This breadth of options allows us to remain disciplined and responsive, sequencing new developments in line with market signals, customer needs, and system requirements. We will leverage this optionality to deliver projects with the best strategic fit and risk-adjusted returns for AGL. Another significant opportunity for AGL is supporting the growth of regional data centers through our energy hubs. Data centers are expected to be a major source of future electricity demand. AGL is uniquely positioned to support this growth through three strategically located energy hubs that combine large land holdings, existing water infrastructure, grid connectivity, and generation assets. These developments have the potential to attract new investment into regions where AGL has operated for decades, supporting economic diversification, employment opportunities, and long-term regional growth.
We also continue to expand our products and services to meet growing demand of customers, including from home batteries and electric vehicles. We also created broader value for our customers, people, communities, and stakeholders throughout FY 2026. Some examples of our initiatives include expansion of AGL Community Power to help more customers participate in the energy transition by reducing barriers to electrification. Our work has included integrating South Australia's virtual power plant, extending the program into New South Wales Community Housing, and delivering a community battery at Port Pirie as part of emPowering SA Community Battery Program. We received external recognition for inclusion and workplace culture, including recognition as a gold winner in the AFR BOSS Best Places to Work Awards, platinum status for LGBTQ+ inclusion, and a leading ranking in Australian Disability Network's Access and Inclusion Index.
We increased procurement from First Nations owned businesses by 41% to AUD 18.73 million in FY 2026 and supported economic participation and capability building through partnerships with First Nations enterprises across the regions in which we operate. We also invested around AUD 6.1 million in community initiatives, including through partnerships focused on economic development and education, energy affordability, climate, and environmental initiatives. We are now well underway into FY 2027 and are focused on building on the momentum of the past year. As the energy transition continues, our priorities remain clear: maintaining portfolio flexibility and optionality, investing with discipline, and delivering long-term value for our shareholders while supporting our customers and communities. In closing, I want to thank our people for their commitment, our customers for trusting us to power their houses and businesses, and our shareholders for their continued support. Thank you very much.
Thank you, Damien. It's now time to address the formal business of the meeting. The notice of meeting sets out six items of business. Resolutions in relation to items two to sox will be voted on today and are supported by your board. A poll will be conducted on each resolution. As mentioned earlier, we will invite questions on all items of business in one question- and- answer session after I have introduced the items. Turning now to the first item of business, AGL published its 2026 annual report in August, which contains full information about the company's financial and operating performance during FY 2026 and the company's sustainability report, directors report, and auditors report. Under the company's constitution and the Corporations Act, there is no requirement to ask shareholders to vote to adopt the accounts.
However, you may ask questions or make comments on the 2026 annual report and the management and performance of AGL when I invite questions. As I mentioned earlier, Trevor Johnston from PricewaterhouseCoopers is available to answer questions relevant to the audit. The second item of business is the adoption of the remuneration report for the year ended 30 June 2026. The remuneration report is also included in the 2026 Annual report. The third item of business is the re-election of three directors. In accordance with Clause 58 of the company's constitution, Mark Bloom, Christine Holman, and I will retire from the Board with effect from the close of the meeting and now stand for directors. The Board, excluding each director in relation to their own re-election, recommends shareholders vote in favor of each resolution.
The fourth item of business is the grant of performance rights under the long-term incentive plan in the 2027 financial year to the Managing Director and CEO, Damien Nicks. The terms of the grant are set out in the notice of meeting. The fifth item of business relates to the approval of termination benefits to relevant executives. The Corporations Act restricts the benefits that can be given without shareholder approval to individuals who hold or held in the previous three years a managerial or executive office on leaving employment with the AGL group. The termination benefits authorization obtained at the 2023 AGM lapses at the end of this meeting. As such, AGL is seeking a further three-year approval, which would have effect until the conclusion of the 2029 AGM. The sixth item of business is the reinsertion of proportional takeover provisions into AGL's constitution.
Clause 12 of AGL's constitution contains proportional takeover provisions that prohibit AGL from registering a transfer of AGL shares under a proportional takeover bid, unless the bid is approved by resolution issued by shareholders in general meeting. Under the Corporations Act, proportional takeover approval provisions must be renewed every three years, or they will cease to have effect. The provisions were last approved by shareholders at the 2023 AGM for a period of three years. If the proposed resolution is approved by shareholders, the proportional takeover provisions will be reinserted into AGL's constitution and will have effect on exactly the same terms until the 1st of October 2029. This is a special resolution, which means that it needs 75% of the votes to be passed. The proxy and direct votes received before the meeting on each item are now displayed on the screen behind me.
I would now like to invite questions on all of the items of business. I will first take questions from the floor of the meeting, then written questions from the online platform, and verbal questions from online. When I call for questions from the floor of the meeting, I ask that you please announce your name and, if relevant, the name of the organization that you represent. For shareholders asking questions via the online platform, please submit your questions now if you have not already done so, or please follow the instructions to join the queue to ask a verbal question. We will now invite questions from the floor. If anyone holding a yellow or blue card has a question, please raise your hand and a microphone will be brought to you. Now we have a question over here.
Dimitri Lafleur, Australasian Centre for Corporate Responsibility. Thank you, Mr. Chair. I have a question regarding the transition plan. AGL's climate transition plan relied on AEMO's 2025 progressive change scenario and its central gas demand outlook. Since then, the 2026 GSO has replaced that scenario and points to stronger electrification and lower long-term gas consumption. Has the Board reassessed the assumptions underpinning the CTAP and AGL's emission trajectory, and if so, will investors see an updated assessment of the implications for gas demand, gas infrastructure requirements, and future emissions?
Thank you for the question. AGL produced a CTAP, the Climate Transition Action Plan, in 2025. Our intention is to produce an updated version of that plan next in 2028. This year, we have also complied with the accounting provisions to include the updated accounting requirements on sustainability in our sustainability report in the annual report. We regularly review forecasts for gas demand, among other things. AGL, as you would know, is a substantial buyer of gas, and so the availability of reasonably priced and contractable gas supply is important for us, in particular for our customers and also for our gas peaking plant. Do we have any other questions from the floor? No? We might move then to the online platform. James?
Yes, Chair. There are no questions on the phone line, and we have three online questions. The first question comes from the Australian Shareholders' Association: Some market commentators believe that the scarcity of long-term power purchasing agreements is a major obstacle to the rollout of renewable energy. Could data centers help accelerate the rollout of renewable energy by providing long-term power agreements?
Thank you for the question. Data centers represent a very strong opportunity for AGL in two ways. One is we have three existing energy hub sites which have the combination of attributes that data centers are looking for, in particular, large areas of land, availability of strong connections, water infrastructure, and available power, and I am talking about Bayswater, Loy Yang and Torrens Island. The second way that we would benefit from data centers, which we consider to be a really major opportunity, is the increased demand in the power system generally, which obviously supports stronger demand for our operating assets.
The next question, again, comes from the Australian Shareholders' Association: In a year of solid progress for AGL, the delay and significant cost increase in the retail transformation project was disappointing. What steps have been taken to improve the management of IT and cybersecurity projects?
Thank you for the question. The retail transformation program is the largest technology transformation program that AGL has ever undertaken. It is large and complex, and what we have found as we have progressed through that program is that the complexity of the Australian energy market has required more work and more detail to be undertaken in relation to that project. Accordingly, the costs of that project have increased by between AUD 100 million- AUD 150 million, and the time taken to complete that project has also been extended by 12 months.
Having said that, we still expect to benefit from the AUD 70 million- AUD 90 million per annum of cost benefits arising from the implementation of that project. In relation to cybersecurity is a major risk for all big businesses, all businesses, including AGL, and we continue to upgrade our resilience against cybersecurity attacks. It is a major focus of risk for the Board. Nobody should be complacent about the risk that cybersecurity presents to businesses like ours and others.
The last question comes from Mr. Stephen Mayne: We have got about 115,000 shareholders. How many of them voted by proxy, and what sort of campaign did we run to get out the vote? Did you even manage 2%? Also, when disclosing the outcome of voting on all resolutions today, including this LTI grant to the CEO, please advise the ASX how many shareholders voted for and against each item, similar with the scheme of arrangement. This will provide a better gauge of retail shareholder sentiment on all resolutions and insight into the chronically low retail shareholder participation rate. The likes of Qantas, ASX, Suncorp, Tabcorp, and even our own share registry provider, Computershare, have all voluntarily provided this data at their most recent AGMs. You have got the data, Chair, so why not let the sun shine in after years of saying no to this transparency request?
Thank you for the question, Stephen. We disclose the voting outcomes, which as I said before, on the screen behind me, in relation to each of the resolutions that we have put to this meeting. We do not disclose the number of shareholders voting on each resolution. We are not required to do that under ASX rules, and so we do not do that. Sorry, did you have any more questions from the online platform?
We've got one more question come through from Mr. Yoga Shrikanta. AGL has said its energy hubs could support more than 7 GW of data center capacity over the longer term. Can you give shareholders a sense of how advanced discussions with prospective data center customers are, and what business model AGL expects to pursue? For example, land leasing, long-term electricity and firming contracts or partnerships, and when you think this opportunity could become material to earnings.
Thank you for the question. As I mentioned earlier, we consider data centers to be a major opportunity for AGL at our existing energy hub sites. The business model clearly includes supplying energy as a key element under long-term contracts, but the other elements that we have available at the energy hubs include the provision of other infrastructure, such as water and strong connections to existing grid, as well as large land holdings. Thank you. Do we have any further questions from the online platform?
No more questions, Chair.
No. We have completed questions from the floor, but I'll allow one more question.
Apologies, Chair. I was not fast enough. I was expecting more questions.
Sure.
Dimitri Lafleur, Australasian Centre for Corporate Responsibility. Just a question on electrification. AGL describes electrification as a major strategic opportunity and a key enabler of emission reductions, yet the company has not set a target to reduce customer gas demand or gas sales. How does the Board intend to measure success in electrification, and when can shareholders expect to see measurable targets and disclosures that demonstrate progress in helping customers move away from gas?
Thank you for the question. You are absolutely right. Electrification is a key part of our strategy, and we are keen for our existing gas customers to take advantage of electrification opportunities in both residential and business applications. In relation to gas, we still have a substantial number of customers who depend on us to supply gas, and we also use gas, as you would be aware, in firming applications in our gas peaking plant. Those firming applications are a necessary part of the transition, and so we will continue to use gas in that application and continue to supply gas to those of our residential and industrial customers who use that gas until such time as they make the choice to electrify. We certainly encourage electrification, but obviously, at the end of the day, that is the customer's choice.
Thank you. Ladies and gentlemen, that concludes the formal items of business for today's meeting. If you have not already voted, please submit your votes now. The polls will remain open for another 10 minutes. Results of the poll on each resolution will be provided to the ASX as soon as possible today, and posted on the company's website. On behalf of the Board, thank you for attending and demonstrating your interest in AGL by taking part in this meeting. I now declare the meeting closed, subject to conclusion of the poll. Thank you.