Good morning, everyone. Welcome to the Bega Cheese AGM. I think, as many of you are aware, this is a very formal meeting. It is being broadcast, so it is my obligation to actually read the Annual General Meeting address. So forgive me for the formality. I know many of you that know me well would understand that I'd much rather have a chat, but I think that, obviously, we need to make sure we deal with these formalities appropriately. So welcome to the Bega Group Annual General Meeting, which is being recorded and webcast. As we have a quorum, I now declare the meeting open. When you registered this morning, you will have received an admittance card. For all shareholders and proxy holders who are voting, you would have received a yellow voting card.
If you are a shareholder who is not voting, you should have received a blue card. If you are a non-shareholder, you will have received a red card. Yellow card holders will be able to vote for or against resolutions and ask any questions they wish relating to the business of the AGM. Blue card holders will be able to ask questions but not vote. Red card holders are most welcome at the meeting but will be unable to participate in the proceedings. Further information regarding voting procedures will be provided prior to the commencement of the resolutions to be put to the meeting. Shareholders attending this meeting in person and online are able to ask questions. For those shareholders attending in person, I would ask that you identify yourself before asking a question. For those shareholders attending online, please follow the process contained in the online guide.
The Company Secretary, Brett Kelly, will then read out your question. At today's meeting, we have a number of formalities to deal with, including the consideration of the Group's 2024 Annual Report, the adoption of the remuneration report, and the election of directors. I am pleased to welcome new shareholders and our long-term shareholders who know the company so well and have supported the strategy and directives of the company over many years. Let me introduce my fellow directors: Patria Mann, Peter Margin, Terry O'Brien, Harper Kilpatrick, Rick Cross, and Raelene Murphy. I am also pleased to welcome Sam Lobley, representing our auditors, PricewaterhouseCoopers, our legal counsel from Addisons, Laura Hartley and Li-Jean Chew, and Julie Stokes from Link Market Services. I'm also pleased to welcome Tim Faulkner from our Corporate Advisors, Kidder Williams, and, of course, a number of Bega Group staff.
I've received apologies from Ken Kimber. Are there any other apologies? We will now move to the formal part of the meeting. I am pleased to present the FY 2024 results. I will give you a brief overview and then hand to CEO Pete Findlay for a more comprehensive report of the year. The financial outcomes in financial year 2024 have been largely delivered by our branded business. It is living up to all that we expected from it. The results demonstrate the strength and breadth of the branded portfolio. Our market-leading brands and investments in key growth categories, strong innovation, and in-market activation have driven value growth. Pleasingly, in uncertain times, we have achieved strong results in our international branded and food service business and continue to see great opportunities in those markets.
Importantly, we have transformed our business to respond to the changing industry circumstances and marketplace, particularly from a milk supply and capacity alignment point of view. We have largely executed a major organizational realignment, which Pete will talk more about in his presentation. The restructure has made the branded segment of our business far more effective and efficient, and our bulk business more agile, positioning the company well for the future. We are, of course, always looking for the opportunity to improve efficiency and productivity. In financial year 2024, we executed some small corporate transactions, including the acquisition of the Betta Milk business in Tasmania and subsequent transfer of that business into our Lenah Valley operations in Hobart. Additionally, we have sold our fruit processing facility in Leeton, New South Wales, which is the facility that basically squeezes the fruit to create bulk juice.
We're absolutely maintaining and committed to our orange juice branded business, and this transaction will improve the efficiency of our bulk juice supply chain. We have previously announced a strategic review of the Peanut Company of Australia. That review is still underway as we continue to endeavor to simplify our business and make sure that we are driving productivity and efficiency. The financial performance for FY 2024 was pleasing in the context of industry circumstances. However, we believe there is still much more that can be achieved in the business. It is pleasing in uncertain times to report revenue growth of 4% and even more pleasing to report branded growth of 6%. The strong branded EBITDA growth has offset the challenges that we have reported throughout financial year 2024 regarding the disconnection of farm gate milk prices to global dairy commodity prices.
We will provide more detail on this aspect of our business later in the report. The business generated strong cash flow in the financial year 2024, delivering a very strong balance sheet with a leverage ratio at year-end of 1.3 times. Moving to the next slide, which outlines the financial performance for the year, Pete will speak on the financial performance in more detail again in his presentation. It is pleasing to report improved performance in the context of the financial year 2024 and a challenging three-year period. In FY 2024, revenue, EBITDA performance, profit after tax, and earnings per share have all improved. Importantly for shareholders, the total dividend has increased to AUD 0.08 per share, an increase of 7% on the previous year. The net debt of AUD 162.4 million and a strong balance sheet means the business is well positioned to execute on both internal and external opportunities.
I always think that it is important to reinforce our vision and values. It sounds like a bold statement, but I do believe that we are well on the path of becoming not only a business that owns some of Australia's most iconic brands, but a business that can make the claim of being the great Australian food company. As we continue to build and refine our business, we are very clear on what we want to achieve and how we intend to achieve it, which I think is reflected in our vision, purpose, and value statements. The company celebrated its 125th birthday this year. It is self-evident that the last 10 to 15 years of that long history have been particularly transformational.
The company has evolved from a small cooperative here in the Bega Valley on the far south coast of New South Wales, producing our famous cheese, to executing strategies that saw us first expand and grow scale, create adjacencies in skills that we had, and then make the major decision to become a largely branded company. First, with the acquisition of Australia's most iconic brand, Vegemite, and then add to that a series of leading dairy and food brands that have significantly strengthened and changed the business. I might say that the presentation of the business today demonstrates a significant change over the last decade or more, and the importance of that transformation cannot be overstated. The transformation sees us looking to the future with great optimism and far more certainty than would have been the case if our strategy of the last decade had not been executed.
Turning to sustainability, we have had some significant coverage in recent times, and I would encourage anybody that was interested to understand more about the circularity initiatives that we have launched in the Bega Valley to watch the Landline program that was first aired on the 28th of July, 2024. We have recently refreshed our sustainability strategy. Traditionally, we have built our strategy on the great food for a better future theme, which reflects both our history and the fact that we want to be a sustainable business for another 125 years. We have refined our strategy to embrace circularity and re-emphasized our focus on community and collaboration. Our sustainability strategy does include the fact that the Bega Group is one of the strong engines behind the regional circularity cooperative and indeed the construction of the National Circularity Centre here in Bega.
This initiative, I think more than any other that I am aware of, demonstrates the importance of collaboration. The range of partners in the cooperative driving research and implementation of programs that will make a sustainable difference, not only within the Bega business but well beyond it, is extensive. I believe this initiative will demonstrate both within Australia and around the world the right approach to sustainability and achieving effective outcomes for communities from an economic, environmental, and social point of view. We are very excited about this project and delighted with the manner in which it has been embraced by many of our partners, which includes our corporate colleagues, research institutions, all levels of government, and members of the community.
I will now hand over to CEO Pete Findlay, who has been executing our refreshed strategy over the last two years, and I think that it is demonstrable that that work is having great success in positioning the business for the future. So over to you, Pete. I'll leave this one here if you want. Do you want to take that one?
Thank you. Thank you, Barry, and thank you to all our shareholders, suppliers, and stakeholders for the support you have shown us over the past year. I think it's worth just quickly discussing the strategic plan we outlined approximately 18 months ago and has driven our focus for FY 2024 and beyond. There are six key pillars. Firstly, protecting and growing our core business in the large grocery trade in Australia. We hold market positions in those retailers that remain particularly important to us, and we would say we continue to work with our retail partners to ensure we are delivering to our customer and consumer expectations. The second pillar of the strategy is to win on the street, which endeavors to improve our competitiveness in independent grocery, food service, petrol and convenience, and local trade, where we have traditionally been underrepresented.
The third pillar of our strategy is streamlining our sites to improve productivity and efficiency and ensure we remain both domestically and globally competitive. The fourth pillar embraces sustainability and endeavors to meet both community and consumer expectations, ensuring we are in step with the requirements of regulators and our customers of today and in the future. The fifth pillar is securing dairy solids, which is, of course, very important to ensure we are building a more resilient bulk business that can compete for dairy solids and continue to create value streams for those solids in both international and domestic ingredient markets, while importantly supporting the growth of our branded business. The sixth pillar is our international opportunity, particularly in the branded space.
The business has always had a good footprint or presence in the Middle East, Southeast Asia, and Northern Asia. We feel there are opportunities to continue to expand in that space over the next five years. All of the above is being underpinned by organizational enablement, ensuring the business has capability to deliver on strategy and is able to operate in a highly cost-efficient manner. I am pleased to say we've made good progress in our strategy during FY 2024. We've had both volume and value growth in our core domestic grocery business as a result of working closely with our key partners: Coles, Woolworths, Metcash, Aldi, and Costco.
We're extremely pleased that in an environment where there were significant shifts in and out of particular channels and to retail our own brands, we're able to work with those customers and continue to drive volume and value growth. We have seen and continue to see headwinds around out-of-home dining, which did impact our restaurant and petrol and convenience trade, although we have been very pleased with our execution and build in market share in food service. We achieved 14% growth in food service, which helped mitigate some of the challenges in the out-of-home channels. We invested in our customer experience and cost to serve, which continues to improve our competitive position and customer engagement. We had a record year in our branded international business. We delivered just over AUD 250 million of revenue, which is up 11%.
Significant growth in Southeast Asia and Northern Asia, in particular in our yogurt and cream cheese products. While we achieved revenue growth, it was important that we maintained a focus on enhancing capability and driving efficiency and cost-effectiveness into our business. We have continued to streamline our sites, which has included the exiting and sale of our Canberra site and the transfer of that volume to our Penrith facility, which has delivered good volume-related cost efficiencies. We also purchased the Betta Milk business in Tasmania in January of this year, and I'm pleased to say that within four months, we transitioned out of two sites that were previously owned by that business in Burnie and the Meander Valley and added that volume to our Lenah Valley site in Hobart.
We've also recently announced the sale of our juice extraction facility in Leeton, and we expect a substantial increase in volume through that site, further improving our supply chain costs. We remain committed to our branded juice business, bottling and branded juice at our Smithfield site, now with the added benefit of greater efficiencies in the creation of bulk juice through the Leeton sale. We continue to have under review our two peanut processing facilities with an endeavor to achieve a better cost structure for our peanut butter business in total. We've largely completed our corporate restructure, which has seen approximately 250 roles removed from the business and is generating close to AUD 22 million in annualized savings. Roles have also been rationalised at some of our manufacturing facilities, which has added to our efficiency and competitive position.
We, of course, continue to focus on our sustainability commitments, and we are comfortable with our progress. In summary, we have an organization that is well structured and capable of meeting our customer and consumer expectations, particularly in regards to brands and our focus on the two key channels of grocery and non-grocery. Our international branded business has also benefited from the capabilities created here in Australia. It was pleasing to achieve growth in FY 2024, and it's been particularly important to have growth and momentum as we entered FY 2025 with a more difficult economic environment. We would expect our business performance over the next 12 months will be largely driven by the work we've done on cost efficiencies and very targeted promotional campaigns. It is pleasing to report a significant uplift in our branded segment earnings for the year.
The performance was achieved through good growth on the top line, driven by both volume and value, and the work we've done around efficiencies, productivity, and costs. We are always aware that it is not a long-term strategy to simply expect to pass on all cost increases to the consumer. In fact, as the consumer is challenged by price increases, it will be particularly important that we continue to achieve cost and productivity improvements to deliver a stable financial performance in the year ahead. Key cost initiatives in FY 2024 included a review of our logistics services and operations, a review of fixed costs at all of our sites, change shift structures, and, as previously mentioned, a streamlining of our overall footprint. It is always important that we have an effective promotional program for our brands, and particularly important when we have operational leverage.
In other words, well-targeted promotional campaigns can drive volume in our most efficient lines and factories. Overall, I believe that we have a very good branded business momentum. As I said, our food service business grew dramatically with a 14% revenue increase, and we believe we can maintain growth momentum. The corporate restructure has always been key to delivering specific focus and capability in both our retail and food service channels. It has allowed us to recruit some excellent talent that we are confident will continue to drive growth in that part of the business. We certainly think we can continue to win on the street in the future, and that will probably drive a lot of the uplift in our branded business moving forward. I've already spoken about the success of our branded business overseas, which, as I have mentioned, is a key pillar in our FY 2028 strategy.
As the steward of some of Australia's favorite brands, it is important that we maintain a culture of brand innovation. The team have focused strongly on ensuring we have a significant innovation pipeline for our yogurt and milk-based beverage brands. We've got the size and scale to support the growth and innovation of our brands, and some great work has been done with our new pouch formats in yogurt. Our Farmers Union Greek children's offering and our Yoplait no sugar offerings has led to us increasing our pouch output significantly, with our new pouch line installed 18 months ago, delivering to consumer demand and seeing our overall output almost doubling in that time. We've also continued to innovate across the milk-based beverage category. I am pleased to say that we have maintained our strong leadership position with more than 50 share points.
The lactose-free and no sugar-added offerings were introduced this year. Our no sugar offering has now moved to approximately 8.5% of total milk-based beverage offering and grew by approximately 23% year on year, demonstrating the important link between functional trends and ensuring an appropriate product response. Other innovation in milk-based beverages have included our plant-based offering and our new intense range. I am pleased to say we have some terrific innovation to be delivered over the next six months, and we think we will continue to drive growth. We've increased investment in our brands over the last 12 months. Ongoing investment in Vegemite, which included celebrations for Vegemite's 100th birthday. In yogurt, the Farmers Union Aussie All-Rounder advertising campaign was particularly successful and drove 11% uplift for the brand.
Messaging around innovation in Yoplait with no sugar added and lactose-free, particularly on our Yoplait tubs, really resonated with consumers who were seeking added value in the second half of the financial year. Our Dare brand continues to be strong. As I mentioned previously, we launched a no sugar-added range, which was very successful. Other Dare brand activities included the Dare mergency and our Are You Okay in-store brand activity. And I'm pleased to add that we have some significant new material coming out to support Dare, both on TV and outdoor billboards over the next six months, which we're very excited about. We ran a boutique campaign in Western Australia with some humour associated with the Cowfish advertising campaign, which reflects our wish to support some of our regional brands. We have some great regional brands, and we've received a very positive response to the campaign.
I would encourage people to watch out for some news around some of our other regional brands, such as Big M and Dairy Farmers, in the future. Our international branded growth continues, and I thought I would share some perspective on our performance in this area as I do see this playing a significant role for us in the future. Bega Group has always had a good international branded business. It tended to grow out of a push strategy where, on occasion, we saw opportunities for products produced here in Australia under an Australian halo be sold into international markets. The approach described has served us well over an extended period of time, but we think to take it to the next level, we need to focus a little more on a demand link strategy.
In other words, market-specific products designed to meet the consumer and customer needs of specific markets or regions. In particular, focusing on the food service area, out-of-home eating is a significant trend in places like Southeast Asia, Northern Asia, and the Middle East. Developing products that meet these local food service needs, working with chefs, and promoting these products in the right areas is a great opportunity. We've refined our approach to our international markets. We've consolidated our distributors and ensured that we've created relationships with those distributors that can best meet our needs. In saying that, it is important to share that we have also created direct relationships with significant retailers and food chains.
We've also done some extensive branding work across all the countries we export to and now have brand alignment with a strong Green Bega branding, really helping us stand out on shelf and at trade exhibitions. We're building out our capability with the in-market international team, now at 26 people, and this year we'll be adding a marketing manager that we based in country. And we are investing in relationships with strategically located manufacturers in market that will give us some optionality for processing in the future. We are excited about our international branded vision with very strong growth in cream cheese, yogurt, and processed cheese, and these three categories will be our focus.
We do not want to try and be too much to too many markets, but we are particularly excited about what FY 2025 has in store for this part of our business, and we are already seeing good results in the first quarter. As I mentioned, we are very pleased with the momentum of our brands. Our branded business now represents 86% of our overall revenue. We are buoyed that we were able to improve our branded segment EBITDA margin, which was at 6.6% for the period. That margin is still nowhere near where we would expect it to be, and we have aspirations of continuing improvement and restoring margins to that more typical of high-quality brands. We are heading in the right direction, and we are pleased with the work we have done over the last 18 months in achieving that margin accretion.
This chart illustrates the strength of our branded share across our core retail categories and also highlights that there has been reasonably good growth in these categories. We continue to focus on categories where we are number one: milk-based beverages, spreads, and yogurt. We work with our customers to deliver innovation for the consumer, which supports growth and brand loyalty. A good performance in white milk, juice, and water ice is pleasing. We have strong share in these categories, and that gives us a platform to grow and build our market share. We are very aware of the consumer trend that our business responds to. The good news is that the four key trends that we focus on and that we evolved in our strategy remain consistent and very relevant to our categories and our product range.
Better value, as a trend, has been highlighted over the last six months, and I think will continue to stay heightened throughout FY 2025. We have strong brands that can appeal to customers in this space. While we continue to see customer segments wanting convenience, we have observed a return to larger offerings, such as one-kilo yogurt tubs, that delivers value to the consumer. We've seen consumers reduce the frequency of out-of-home eating and therefore access the large grocery chains to meet their in-home catering needs. Within the retail chain, some consumers are searching for additional value through retailer-owned brands. The Bega Group business has been agile in responding to these circumstances with its range of great value brands and by continuing to work with retailers to meet their needs on retailer-marked brands. This approach has enabled us to effectively and quickly respond to the change in consumer behavior.
Functional health remains important. As I mentioned, we have had a very good response to our no added sugar and lactose-free ranges. We continue to see opportunities in high protein and functional health benefits, such as calcium and probiotics, and you will see us respond further to these opportunities over the next 12 months. We will always ensure our product range is meeting the needs of our consumers and responding to demographic change. We would note that consumers are shopping more frequently and wishing to consume on the go and are seeking products that have health benefits. Our strong growth in pouch yogurt is a reflection of these trends.
Our Farmers Union promotion, the Aussie All-Rounder, particularly appealed to changing demographics, cooking trends, and a more diverse Australian population who tend to use yogurt more in their cooking, particularly in the Middle East and Asian populations. Sustainability has a high awareness among consumers. We will continue to respond to consumer expectations in this space. While consumer awareness is high, there is not a willingness to pay a premium for sustainability activities, and therefore it is important that we respond to the consumer expectations in a manner that is not only environmentally sustainable but also commercially sustainable. A really challenging year for our bulk business from a financial perspective caused by that disconnect between Australian farm gate milk prices and global dairy commodity prices. I've been pleased with the way the business has responded to these difficult circumstances and improved the resilience of our bulk business going forward.
There was a strong focus on removing costs from the business and creating more flexibility in our infrastructure. Several million AUD of costs were removed from our overheads, and we further increased our efforts to access higher value markets, particularly around our proteins. We continue to invest strongly in our cream cheese business, which is working particularly well in our branded international markets, and we will increase capacity in this product. A great deal of work has been done within the bulk business to make that more resilient but maintain flexibility. We continue to have the capacity to pick up opportunity milk as that arises during spring flush, which is important for both our business perspective and the industry perspective. We expect that the bulk business will return to profitability in FY 2025.
It will not go back to its historic levels, but we think it is in a much better place than what it was, and there are still opportunities for further improvement. I would highlight the work during the year related to the management of our dairy solids and directing milk to the highest returning product streams. We were able to benefit and alleviate some of the lower protein prices around skim milk powder and declining international demand for infant formula. We've also just installed new capacity at our Tatura site, which is producing non-dairy proteins, which will improve plant utilization and is potentially a long-term strong return new product for our Tatura facility. It was good to see a positive year for milk production in FY 2024. An increase in milk production was fantastic, with total industry milk production growing to 8.4 billion liters.
We expect that milk production in FY 2025 will be relatively stable depending on weather conditions, particularly over spring. The year has started off strongly in terms of supply, however, some of our regions are particularly dry and will no doubt be impacted if those dry conditions continue. The graph on the screen shows the average Australian farm gate milk price in manufacturing states and a basket commodity milk product and the value of those milk products. It is very straightforward to observe the significant gap that we had to deal with during FY 2023 and FY 2024. There has been a reduction in that gap in FY 2025, which is more reflective of the long-term position for the industry.
It's not so much what the milk price is. In fact, we would love to pay a higher milk price for milk, with the limiting factor being the returns we receive in the market. Paying a significant price over the market for an extended period of time always ends badly, and we've seen that time and time again in the Australian dairy industry. A greater alignment in farm gate milk price to our market ensures companies are able to invest to improve efficiencies and improve returns. As I have mentioned, we continue to keep our manufacturing footprint under review. This year, we have closed our Canberra site, closed two sites in Tasmania, sold our Leeton facility, and are continuing to review our two peanut processing sites at Kingaroy and Tolga. The focus remains an endeavor to optimize our footprint and deliver better cost-per-unit outcomes for our business.
We executed some important business improvement projects in FY 2024. The most significant of these was our restructure, which will deliver AUD 22 million of annualized savings, of which AUD 12 million were realized in FY 2024. The restructure better aligns our sales capability with the key channels we operate in. We maintained our capital expenditure at a little below depreciation, executing a number of important projects that will drive benefit into the future. We completed our new digital sales platform, which is part of our win-on-the-street strategy, and will enable a more efficient and enjoyable user experience for our customers while delivering a better cost-to-serve and distribution model. We made further investments in integrating our core enterprise resource planning systems. It is not our intention to transition to a single ERP system, as we consider it not the best use of funds.
The work done in FY 2024 has included utilizing some high-quality middleware layers across our systems, which brings together our integrated business planning process, delivering a much improved demand picture across the business, allowing us to engage with our customers in a more effective and cost-efficient way. During the year, we made important investments in our capacities and capabilities at our milk-based beverage plant, Wetherill Park, and our yogurt facilities in Morwell. We also commenced our Lavender Warehouse automation project. The Lavender automation is a AUD 30 million project, which we expect will be completed by FY 2026 and delivers significant operational savings and should future-proof one of our major distribution hubs. Turning to our sustainability initiatives, we continue to work towards meeting our commitment of a 40% reduction in absolute Scope 1 and Scope 2 emissions by 2030.
We've formed a risk and sustainability committee who monitor all our sustainability initiatives. I'm pleased to report that we are tracking well in meeting our targets, which includes a 30% reduction in water use by 2030 and, of course, net zero emissions by 2050. We continue to also be on track with our HESTA commitments of ensuring diversity in our business with a 40-40-20 target by 2030. We are all, of course, very excited to be the driving force behind the Bega Valley Circularity Project, which has recently been awarded the Australian Design Council's Impact Award. The project reflects the history, culture, and imagery of our brands in the home of the company. The important learnings that will be generated from the project will spread across our company and our communities and create value for those communities, our suppliers, and our customers.
Sustainable packaging continues to be a focus for the company. We have made significant APCO packaging commitments, and we continue to do well against these targets. We will continue to invest in initiatives in this area, and we are particularly pleased with our investment of AUD 14 million at our Wetherill Park facility to establish in-house production of recycled plastic bottles. We have received some great recognition for the nutritional value of a number of our products, winning 13 Health Food Guide Awards in FY 2024, and we have also launched new products in areas such as lactose-free and no added sugar. It is important that we prepare for the emerging obligations associated with climate-related financial disclosure.
In FY 2024, we have completed a gap analysis to ensure we are in a position to comply with a draft Australian standard and have a design roadmap that will enable timely compliance with climate-related financial disclosure. Turning now to some more detailed analysis of our financial results, I will largely focus on our normalized results shown here on the left side of the slide. As I previously mentioned, it was good to see 4% revenue growth to AUD 3.5 billion in what was a fairly challenging year. I will discuss in the later slide how our EBITDA and profitability has been achieved, so I'll not dwell on it here. I did want to touch on three or four things on this slide, as I mentioned previously. Our depreciation and/or amortization is down to AUD 88 million this year. Our investments will be focused on growth, cost savings, efficiencies, and capacities.
We have chosen to invest a little less in the last year in the last years at our bulk sites and have been very choiceful in our investment in both our bulk and fresh white milk sites, as we are careful to invest where we see the greatest opportunity for improved financial performance. I will focus on the net finance costs on this slide. You will observe that financing costs have increased from AUD 23 million in FY 2023 to almost AUD 35 million in FY 2024. Approximately AUD 5 million of that increase is attributable to interest rates. The other AUD 7 million is largely the impact of the Vegemite Way lease. This is the full year of the sale and leaseback of Vegemite Way that combined with the renewal of that lease at our Lavender Warehouse during the year and has been a major contributor to the rise in our lease commitments.
It has been pleasing to see an increase in our earnings per share (EPS) to AUD 0.096, and I am confident in the potential for our EPS to increase further over coming years. Reconciling our statutory results on the left side to our normalized result on the right side, I'm just going to focus on the EBITDA line. Our statutory EBITDA was AUD 165.1 million, and from that, we have deducted AUD 13.2 million from the sale and exit of our Canberra site. We have normalized AUD 5.3 million of additional restructuring, and the additional spend was targeted at our manufacturing sites and the logistics network. What you will see in the next slide is that this is only one of many things that led to over AUD 40 million of efficiency programs across our supply networks. Included in normalized items is the Betta Milk acquisition that we completed in December of 2023.
We have AUD 6.9 million of one-time costs as we consolidated production into Lenah Valley in Tasmania, and we also wrote off AUD 2.8 million of assets as part of that. Those are the major items that explain the small change from AUD 165.1 million in statutory earnings to AUD 164.1 million in normalized earnings. This slide is probably the one that's most interesting in understanding our profit evolution during the year. On the left side, you will see our normalized EBITDA of AUD 162.2 million from the FY 2023, and on the right-hand side, the FY 2024 result of AUD 164.1 million. In between, you see the key changes in our P&L. The first three blue columns all relate to our branded business, and combined, they total AUD 71.1 million EBITDA improvement in the branded business that is over 50% year on year. The first column is about branded volume, mix, and price.
As I've mentioned, it isn't just about growing price and volume. It is actually about growing the categories that matter for us. That is yogurt, milk-based beverages, and spreads. I'm very pleased to say we grew volume and value in those categories and directed a lot of our investment and innovation into those categories, which really shows in this result. We did take price to partly mitigate inflation and significant cost increases in FY 2023. You may recall that in the prior year, there was a two or three-month lead time in executing price increases, which significantly impacted that year's results. Obviously, in FY 2024, we had the annualized benefit of those price increases. Timing, pricing, volume, and mix is all bundled into that AUD 112 million branded column. In the middle column, you see AUD 84 million of cost inflation. While inflation is decelerating, it is obviously not negative.
Overall, there was inflation greater than 3% across our cost base. Labor costs in our factories are going up almost 4%. Energy and gas continue to increase, and some input areas like coffee and cocoa continue to escalate. The work we are really proud of is in the branded efficiency and value creation initiatives. We offset more than half of that entire cost inflation with AUD 43 million of efficiency and value creation programs. That's more efficient designs in our sites, restructuring over time, and restructuring shifts. In the logistics network, it was consolidating cool rooms and making them more efficient, and of course, we focused on procurement savings. All three of these initiatives working together and combined with overhead savings were a big factor in the over 50% improvement in financial performance by the branded business. As I've discussed, a very tough year in the bulk business.
Year over year, we dropped AUD 61 million in earnings. What I'm really proud of is, if you looked at commodities themselves, it would have been an AUD 80 million decrease, were it not for the agility of the bulk management team. They were alert to procuring lower-cost opportunity milk that was available during the spring flush. They changed shift structures, and in some of the bulk sites, they became more efficient, and they mitigated almost AUD 20 million of that impact to achieve the AUD 60 million outcome. A sobering number, but still a great effort by the team. The key measures that we focus on are gross margin and EBITDA margin.
This year, we have achieved an improvement of 0.4% in our gross margin, and while we don't disclose gross margins individually for our bulk and branded businesses, it is observable that our bulk business declined by in excess of AUD 60 million in earnings, and therefore, there has been a significant improvement in our branded gross margin for the whole group to move forward, which is really encouraging. I'm going to pause for a second on dividends per share. As Barry said, a good 7% improvement in dividends per share, and I think that's what's exciting as you look into the next three or four years. If you see our annual report, we have a large quantity of a large bank of franking credits of over AUD 113 million. So our EPS expands in the coming years. As it will, the opportunity to reward shareholders with fully franked dividends is very strong.
The final thing I would mention at the bottom of the chart is return on funds employed. We've moved up almost two points to 5.6% and see that this can be further improved. The performance was driven by net working capital reductions, being choiceful about capital expenditure, selling some assets consistent with our focus and simplification program. My final slide is on the financials. My final slide on the financials is on the balance sheet. I'll just make some key observations. Our receivables were up a little bit as we did sell more in May and June of FY 2024. Importantly, we carefully managed inventory and were able to decrease inventory by AUD 70 million over the year, a really strong performance. Overall net debt is down over AUD 40 million and leverage is at 1.3 times.
Looking ahead in FY 2025, we do expect that our debt will increase in the first half, as we always have a net investment in inventory, remembering that in the spring, we received 60% to 65% of our milk supply. In December of 2023, we had a leverage of 1.9 times. We expect to improve on that, and we will probably deliver between 1.6 and 1.8 times leverage in the first half. By the end of the FY 2025, we'll improve on the 1.3 times, and we'll get somewhere between one times and 1.2 times leverage. Reflecting on the year, I think we are well placed as a result of our strategy that has now been in place for some time. We transitioned to a branded business. We have iconic brands. They resonate with consumers in Australia and internationally.
They are in all market channels and have the ability to move with consumer desires and insights, particularly around functional benefits, healthy eating, snacking, and across a number of different meal occasions throughout the day. I think we are well positioned with our iconic leading brands and integrated manufacturing and processing network that is starting to operate well and still has more improvement available to it. We have opportunity to further simplify and focus our network, and we'll be moving on our strategic review of PCA and other projects and opportunities over the next 12 months. I think we are starting to get to a place where we can springboard off our solid foundations. We will continue to invest more in technology around our logistics and our route network.
I believe there remains opportunity for productivity improvements within the business, and I'm really happy with our ability to have an agile response to changes in the market. As I've mentioned, we've seen consumers trade in and out of channels and within category subsets. I think we have got the ability to move with these different changes. They don't always suit us, but we have a good representation across a number of channels that allow us to ensure we remain relevant to our customers and consumers. As markets continue to evolve and consumer sentiment and confidence comes back, I think we will be well positioned to win in areas that are finding circumstances a little challenging at the moment. Our branded acquisitions are ahead of business case, which is terrific, particularly in the context of the challenging environment of our bulk business.
I think there is still huge opportunity to continue to grow our brands both here and overseas. We have a great opportunity, particularly in Southeast Asia and the Middle East, which are growing areas as they transition into high-protein diets and seek more dairy on a daily basis. I also think we can extend our core brands here without necessarily having to go too far from their brand essence or what they stand for. We continue to see a great runway for Dare in the beverage space and for our yogurt brands. We believe that we now have our bulk business more stable and are not facing anything like the headwinds of the last couple of years. We are happy with the strength of our balance sheet and believe that we have the right people and the right capability to continue to take the business forward.
We are very comfortable with the business and the strategy that we have in place and the value it can create for our shareholders and our stakeholders. We are in the second year of a five-year strategic plan and believe that our strategy stands up well, and there's some really good work we can continue to do against the key strategic pillars. It will be a slightly different year in FY 2025. We are seeing a very challenging consumer environment. We recognize that we're able to get some mitigation from high costs through price increases in FY 2024 while still showing a good track record of cost control and value creation. We believe that it will not be possible to offset inflationary pressures with price increases in FY 2025. Therefore, earnings will have to be driven through productivity and efficiency improvements.
In fact, we've forecast very little price increase for FY 2025. We'll achieve our objectives by improving our footprint, driving growth through volume, by being competitive on price, running selective promotional campaigns, and capitalizing on operational leverage. We think our branded business can continue to grow through these opportunities, but it will be single mid-digit growth. Our bulk business will respond to the better alignment of farm gate milk prices to dairy commodity price. Although it will not return to its traditional levels in the short term, we do see commodity prices being reasonably constrained.
Our expectation for the Bega Group normalized result in FY 2025 is an EBITDA range of AUD 190 million-AUD 200 million, which is in line with where we would expect to be able to, which is in line with where we would be able to expect to achieve our 2028 strategy of a AUD 250 million plus EBITDA and continue to improve our return on funds employed. With that said, I would just like to thank the team, our shareholders, our suppliers, and all our stakeholders for their support throughout the year. I'll now hand back to Barry.
Thank you, Peter. And while it's not in the script, I think you'll all agree that that was a very comprehensive review of the year, and I think you can all feel very confident in the skills of our executive team to execute the strategy going forward.
And I think it's been very demonstrable this year exactly how well they've dealt with the challenges of the previous two to three years and continue to position the company for success into the future. Ladies and gentlemen, that brings us to the end of the presentation. I will now go to questions. This year, we have questions coming in online, as well as obviously anybody that wishes to ask questions in the audience. I may well just deal with the ones online first, which are coming through the company secretary to Brett Kelly. So while this may seem a little strange, Brett will ask me the questions, and I will endeavor to project to the audience.
Thank you, Chairman. I have eight online questions.
Eight, right.
So the first one comes from Catherine Garrett, and she has said, "I'm very impressed with the taste of your lactose-free cheese.
I was wondering if there were plans to supply this product to Aldi stores. They currently don't have any lactose-free cheeses but do supply lactose-free milk. With 44% of Australia being lactose intolerant, there seems to be a good market to capture."
Thank you. Very pleased that people like our lactose-free cheese. That is fantastic. As most people in the audience would be aware and online would be aware, Aldi obviously have their own suite of brands, and they have brands specific to their stores. There are a few exceptions, one of them, of course, being Vegemite. And the reality is we have a very good relationship with Aldi, so I'm sure if Aldi approached us and wanted to discuss us producing a lactose-free cheese for them, we would be more than happy to do so.
Thank you. Catherine's asked the second question.
I see your current net zero target is zero by 2050. Are there any plans to reduce that target to, say, 2040? Will a wider adoption of the Bega Circular Valley initiative in other areas be a main contributor to reaching net zero sooner?
I think Pete and I both mentioned in our presentations that there is no question that we are putting resources and emphasizing through our, particularly through our creation of a sustainability and risk committee. All the obligations that we have are all the undertakings we make in terms of targets. We would say, and particularly the circularity initiative says that in order to meet those targets, there will have to be significant collaboration both across the industry and across government research organizations. We will continue to work towards achieving those targets.
Obviously, if we can achieve them more quickly, we'll be pleased to do so, but the commitments we made would be the commitments that we would stand by at this stage. We need to be very comfortable that we can reach those targets. We're comfortable with our progress, but we wouldn't be looking to bring them forward. Next question comes from Peter Schettino. Canadian company Saputo has recently announced that it is closing the iconic King Island cheese. Is there not an opportunity for Bega Group to purchase this well-known and much-loved brand and add it to the portfolio of brands? The action if taken will endear more customers to the Bega Group. I think we would recognize that King Island is a much-loved brand and a brand with a great history. The challenges that King Island have faced over the years are significant.
They're particularly due to the logistics challenges of dairying on King Island and indeed moving product from King Island to Spirit of Tasmania and then into the mainland. I suspect, although of course I'm not privy to the detail, that that would be the reason why the decision has been made for Saputo to close those facilities. I would say that we've been very aware of the challenges, and I, with somewhat of a long history in the dairy industry, have been very aware of the challenges of King Island for a very long time. I don't think that as much as the brand is much loved, I don't think shareholders would want us to invest in something that we know to have significant challenges and not providing an appropriate economic return. So unfortunately, we won't be the Australian savior of King Island.
Next question comes from Stephen Mayne.
Could the CEO and Chair comment as to whether they were surprised by the recent ACCC action against Coles and Woolworths over fake discounts? Were many of our products involved in this allegedly misleading and deceptive conduct, and how have we responded to these revelations? The response from the duopoly has been to point out that some of the increases followed supplier requests for a price rise. How do we go about asking Coles and Woolworths for a price rise? Is it different to other smaller retailers?
I think in terms of the ACCC revelations, I would say, of course, we were surprised. In terms of, and it's probably not much more commentary I can add to that, in terms of how we go about price rises, and I think a lot of that was indicated in Pete's presentation. But we obviously have dealt with significant cost increases, particularly post-COVID.
Indeed, we do go to our customers, and after we've exhausted, if you like, all the efficiency opportunities that we might have, all the productivity opportunities we might have, all the things that Pete described in terms of ensuring the good economic position of the company, we are on occasion required to go to the market to ask for price rises. When we go to our larger customers, we generally need to justify those rises, so it normally entails us demonstrating that we have, in fact, experienced those rises and providing documentation to demonstrate that. That's been the process for as long as I've been around, quite frankly, and I think that, so there is a justification requirement.
Generally, from your customers, the first thing they will ask you is what you have done to try and mitigate those cost increases, what you've done from an efficiency point of view, whether your business structures are appropriate. Those questions will always be asked, and if those discussions are had, and then we move forward from there in terms of justifying why we might need to go to the market and ask for a price increase, as Pete mentioned in his presentation. Post-COVID, we did need to, we had significant cost increases, and we did take some price in that environment. In the current environment we're in, we're seeing that our margin improvement and profit improvement will largely come from internal efficiency initiatives and cost-saving initiatives. Peter, I don't know whether there's anything you want to add to that, but.
It's really restoration, margin improvement.
Yeah, yeah.
For the audience, Pete said, really, all the endeavor post-COVID has been to restore an appropriate position and an appropriate margin for the brands, and we're doing that through a number of initiatives. Some of that will include price, but it will include all those other things that Pete mentioned around promotions, around product mix, around focus on particular brands that perform particularly well, and all the internal efficiency initiatives that we can implement.
Thank you. The next question comes from Ronald Guy, who is representing the Regional Trade Union Human Rights Shareholder Group. Pacific and itinerant workers have been exploited in the agricultural industry. How does Bega ensure that this is not the case in the supply chain at Bega? Reference to the modern slavery.
Yeah, so we have significant processes through our procurement system to ensure that we have the behavior of our suppliers well documented.
I would refer people to our sustainability report, which was released on Monday, that discusses all our initiatives, including the way in which we manage issues such as modern slavery, but that's all documented within our sustainability report.
Thank you. Ronald's asked a further question. It is good to see the direction that Bega is taking in the Bega Valley circular economy. Can you update us on the reduction of packaging and plastics and CO2? How supportive is state and federal government?
So again, I'll refer to the sustainability report. Pete will be a little bit more closer to our packaging initiatives.
I would perhaps refer to one, which is our recent investment in Wetherill Park, where we're creating a fully recyclable rPET bottle that many of you will see our Dare brand in, which is obviously one of our key initiatives in terms of reducing or meeting our packaging covenants. But throughout the business, we have particular packaging initiatives. Again, they're documented in our sustainability report, but Pete, you're probably closer to some of the packaging initiatives if you want that comment.
Thanks, Barry. Our major commitment around packaging is with APCO, which is an Australian commitment that we've signed up to. We are well on track to achieve our targets, so we're getting very much to the end of that transition, which is about a level of packaging having an amount of recyclable content or being recycled.
So there's been a huge amount of work done on that, and we're getting very close to meeting that target by the end of this financial year.
Next question comes from Stephen Mayne. The federal government keeps introducing new laws in the industrial relations space. How are we navigating these changes, and what is our overall level of engagement with the union movement? What proportion of our staff are unionized, and how many registered enterprise agreements do we have? Bit of a mouthful, Chairman.
So obviously, we have a number of EBAs across all of our sites. They are generally site-related, and they are generally state-based.
So we have significant interaction with the union movement, but I would say a constructive interaction with the union movement as we look to make sure that we have an engaged workforce and that indeed we are able to implement the efficiency programs that we talk about. But I would say that it's probably self-evident that the level of industrial action that Bega experiences is relatively small, and we look to have a constructive relationship. We do on occasion disagree, and we do therefore on occasion have the odd piece of industrial reaction, but I would say overall, it's constructive. I don't have our head of human resources or people in culture here, so for me to remember exactly how many EBAs we have, I will struggle. I'm not sure whether Pete's aware, but not lots of it. It's more than 50.
Yeah, so Pete's answer is that it's more than 50 EBAs, but I can't, off the top of my head, give you the specific number. But as I said, we've got a workforce of 3,800 odd people across 18 sites, and then obviously there's administrative capacities beyond that. So a significant amount of engagement, but I can't give you the specific number.
Next question is a further one from Ronald Guy. Recently, the European Union upheld the legal position of Western Sahara in regard to Morocco exploitation of natural resources, fish, etc. In regard to the EU trade agreement, Australian farmers are relying on phosphate from Western Sahara, unfortunately. New Zealand is still using phosphate from Western Sahara, which Morocco financially benefits from. Does Bega procure supply? Avoid this ESG issue.
Amnesty International has recorded the human rights problems, for example, the treatment of Sultana Keya, and the continued imprisonment of Sarah Weias. Apologies for my mispronunciation.
That's okay, Mr. Kelly. We'll have a chat about your pronunciation after the meeting. Bega has no farms, so Bega's not directly involved in the farming operations, although we do have a supply handbook that sets out our standards, including what we expect the farmers to execute, the standards at which we expect our farmers to operate. I would comment that part of the circularity initiative is really about recognizing that, and it was on display during COVID, that we are bringing in resources from all around the world, sometimes from regions that, if I was to put it in my terms, don't like us very much.
The importance of trying to become more sustainable, more able to use the resources available in this country, which I would extend to saying, including along the biggest coastline in the world and the absence of the seaweed industry, for example, in Australia is something that still continues to amaze me, and that's obviously a very good natural fertilizer among other things. Our initiatives are trying to make sure that we manage those resources better and we make those supply chains stronger. I would refer back to our sustainability report in terms of the fact that we obviously endeavor in all the procurement that Bega is involved in to conduct ourselves in a manner that the community would expect.
One final question following the CEO's address from Henrik Kay. The CEO mentioned coffee.
How about launching a competitor to the Nestlé coffee products as they are Swiss-owned and Australian-owned product I consider would be welcomed?
I think it's fair to say that, and I think Pete demonstrated what we want to do is make sure that we are focused on our large brands. We're investing in those brands, and there are, of course, adjacencies and opportunities to expand that portfolio, but I would think moving into an entirely different segment would not be something that we would be on. And I think it is a very crowded segment, the coffee segment. So the focus for us is to try and be the number one or number two brand in whatever category we are in, and I think that we would probably find going fairly tough in the coffee space. But I'm looking at my CEO to see whether he's inspired by wanting to.
But for those online, his body language is indicating that he's not inspired to go into coffee, but thank you for the question. And I do understand why. Look, our endeavor is to be the great Australian food company, but as Pete said, we can't be all things, and it's important that we focus and we deliberately grow our brands in areas where we think we have the expertise and where we think there are adjacencies.
That's all. Thank you, Chairman.
Okay, I'll go to the audience.
Yes. Steve Tire, question for Pete. Bega Cheese has recently got into the honey. With your marketing of honey, has it met you?
Is it meeting your expectation? Are you growing your market share with your Capilano honey and the Capilano Hive project that Bega Cheese is running?
Yeah, so it met our expectations initially, but it would be fair to say that it's plateaued, so it's not continuing to grow. It's sort of traveling along quite nicely. It's available in independent grocery and in Coles, but not in Woolworths. So we weren't able to get that into the third-largest retailer.
On another question, I was on Singapore Airlines yesterday, and for my cup of tea supporting dairy farmers.
Thank you.
Instead of having powdered milk, they had like a tomato sauce, long, thin container with UHT milk in it, which gave you a much better taste and flavor.
Is Bega Cheese exploring?
So we actually sell a lot of little UHT packaged milk. You'll see it on a lot of air flights where you just pull off the cap.
Yes, that's what it was.
Oh, that's what it was.
So you are involved in that?
We make that, yeah, absolutely. We make that at our Wetherill Park site in Sydney, and I think we're the only people that make that product in Australia.
Okay, excellent.
So yeah, it's a great machine. It does well for us.
Okay, thank you.
Thank you.
Any other questions? Just a question, Barry.
Oh, excuse me. That's all right. Ronald Guy, is he explaining just the actual cheese? I mean, where does cheese still sit in the?
In terms of our portfolio, obviously we're very proud of our origins which are here. I think most people in the room would know that we have an arrangement with Fonterra regarding the Bega brand. We still obviously produce a large amount of cheese here, and we have the two largest cheese cut and pack and processing facilities in Australia, one here in Bega and one at Strathmerton.
In terms of our total portfolio, there are other brands that are now much larger, and it depends whether you look at them by revenue or by margin. But the reality is, and Pete, you'll probably help me a little bit here, but Dairy Farmers would be one of our largest brands in terms of revenue, in terms of margin. Obviously, products like Vegemite, Dare, Farmers Union, Yoplait yogurts, those products are much larger contributors. But Bega will obviously always continue to be a very important part of the portfolio, and we are always working closely with Fonterra to ensure that brand remains at number one. So it's the number one cheese-selling brand in Australia, and we obviously share in the, without going into too much detail, we obviously are beneficiaries of the performance of the Bega brand.
But the Bega brand itself would be one of the larger retail brands in Australia. So it's still very important to us, but it now sits with that group of brands.
So Fonterra actually owns the brand?
No, no, no. So we franchise the brand to Fonterra for Australia only, and that's why Pete mentioned. So internationally, we manage it ourselves. In Australia, Fonterra manages it on our behalf.
So the competitor, the cost in the retail sense, is Fonterra's?
Yes, yes.
Good morning. Good morning, Mr. Chairman.
Morning.
Good morning, Mr. Chairman. Elton Ivers is a shareholder. I've got the wondering focus by Peter and so forth on international sales and development of that. What proportion of your international sales covers the total sales of your business? From a revenue point of view? Yeah, taking just. It's probably about 14%.
So well, and branded, but if you include commodity, we would be about 2.5 billion, 2.6 billion in domestic and. It's about AUD 500 million internationally. Yeah, so AUD 500 million in international sales. So that's a AUD 3.5 billion portfolio.
Great, thank you. Inventories, your assets, I noticed in your financial statement you've got them recorded. What checks are done on the inventory that you have? Because you've got like six distribution centres and 81 depots, I assume a lot of your inventory is held there. It's your soft goods stuff. And what checks are done on the use-by dates and expiry dates and best-before dates?
So clearly, and clearly very extensive and intensive ones, particularly given the history of the dairy industry in some of our competitors' history, not ours. So obviously we are audited and our inventory is audited.
So PwC work with our team to make sure, and some of them are physical counts and some of them are desktop counts, but also internal to our logistics team and our management teams, the inventory is constantly monitored because obviously as a branded retailer, you need to get those brands, you need to get that product onto the shelf with plenty of use-by date. Internationally, you obviously got longer shelf lives that you're dealing with, but we are constantly monitoring, and you will note that in fact inventory is quite significantly reduced this year.
Yes. Thank you.
Any other question I've got is on your closing sites and would expect that this has an increase in the transport of goods, therefore has an impact on your sustainability goals. How are you addressing that?
So there is always a net effect, Elton.
So yes, on the one hand, yes, you will have increased transport. On the other hand, all the efficiencies and energy that you're using at that site you're closing is significantly reduced. So obviously there is a constant calculation done, but generally you would say you are still more positive by being more efficient at less sites to get greater outcomes than is offset by some of the transport additions that you may have.
Okay, do you use any renewable energy-sourced vehicles?
Vehicles, no. Sites, we've got a significant renewable energy program going on within the sites in terms of our endeavor to meet targets, our stated targets. Thank you. No problem. Any other questions? Okay.
My name's Lloyd Sustin and I come from the city, so I'm a city slicker.
Welcome, welcome. Very nice to have you here.
I'm very impressed with the efficiency gains. They're very impressive, I think.
Yeah, it's like they replace the people online. People online cannot be without the microphone. Oh, wow. I'm surprised at that.
I hope you can all hear me now. I usually insult everybody by the time I get up here, so I apologize if I've insulted anybody. These efficiency gains are terrific, but to me as an engineer, that says that it was a very inefficient organization before and that some people are to blame for running an inefficient business. Has anything happened about that? That's all I'd like to say. And if I've insulted anybody, I hope they accept my apologies.
Believe me, I've been more greatly insulted.
I'm sure I could dig out of my tribe, but I wasn't trying.
So look, I think we would say I would answer that in two ways. I am a fairly transparent person.
I will never argue that we get everything perfectly right all of the time. We don't, and I will never argue that some of the things that we did yesterday can't be improved tomorrow, even though we thought they were quite effective in the way we're looking at them, but I would strongly suggest to you that the vast majority of efficiency gains are associated with new technologies. They're associated with the availability of whether it's robotics, automation, all of those wonderful things that engineers design for us is real, and Wetherill Park, which is the project I mentioned earlier around the bottling equipment there, that is relatively new technology. And that technology, it goes from a very small pellet that arrives there, is blown into a bottle, blown into a fully recyclable bottle.
As you follow that fully recyclable bottle through that plant, you see automation after automation after automation right to the end where you see laser-guided forklifts, so unmanned forklifts. So a lot of that is new technology. So I think in my time, I would say that if we were trying to do what we do today, even 10 or 15 years ago, we would probably have twice as many staff because that's the advancement in technology. And that includes, Pete mentioned ERP, it includes the work that Gunter and his team do around the administration of the business and the number of people. We have better ERP systems, better computer technology has seen us again be more efficient. So much of the efficiency gain is around the availability of technology.
But we will always say, yes, there are probably some things that we would look back at and say we could have done that better. But I am very confident in the team that we had, and I'd also say that I've been very confident in the teams that I've had over the years that they are focused continually on always improving. We have a continuous improvement team in our business, which says that it's always a focus, but it also says that we always think we can improve more.
Thank you very much. It sounds like I haven't insulted anyone.
No. That's fine. No.
Gillian King, shareholder. And I realised during the presentation today I've been eating Bega Cheese, not only all my life, but half of Bega's life too, so I'm feeling very old.
And my sister and I have indelibly imprinted in our minds going to the Kameruka cheese factory when we were very, very young. And I'm very glad to be here in person. I had questions for last year, but I realized too late that it was only a webcast last year.
Yes, in terms of technology.
Unfortunately, I was too far away and had three AGMs on the same morning and two of them at the same time. So I'm pleased to be here in person. I've got a few questions, so I'm happy to intersperse them with other people. I was interested in Catherine Garrett's question earlier. And I guess what we're seeing is we're observing accelerating global warming and its associated consequences like climate change and more extreme weather.
And as records continue to be broken and businesses and people's lives are disrupted or destroyed, and we found out just on Monday that carbon dioxide is accumulating faster than at any time in human history. And methane, which cattle is a major contributor towards, and it's also a short-lived climate change accelerant, is also surging. And the increased urgency—just hold on—the increasing urgency for action to stop damage to our climate is clear. Yet I do not detect a sense of urgency in any of Bega's reports or in what's been presented here this morning. The 2024 annual report says key risks on climate change are focused on managing the impacts, and it details that in a bit more detail. But it doesn't say anything about the risks, including lost opportunities of not reducing emissions quickly.
And aiming for a 40% reduction in absolute emissions by 2030 and net zero emissions by 2050 is too slow. And that's the same sort of thing that Catherine was asking about. And in light of that, all of that, and that you said you need to be comfortable—oh, sorry—that you're actually ahead of actually getting to the 40% reduction target, will Bega accelerate its efforts to reduce greenhouse gas emissions further? So we're already ahead of the current timeframe so that they're achieved well before the current target dates.
I'm not going to change the answer to the question that was asked earlier. I may add some flavor. So Bega recognizes the undertakings it's made. It's obviously made them very deliberately and being very aware of not making undertakings that we cannot be comfortable that we can meet. You mentioned enteric methane.
And so the work that we don't talk about or the things that we are engaged in, if you like, because they are not initiatives by Bega, but in fact, I spent much of early last week at a number of universities as we look at the progress that's being made not only here, but globally on enteric methane reduction in cows. It is not something that Bega will ever solve in its own capacity. And indeed, the research effort around the world on enteric methane leads me to feel confident that solutions will be found, but doesn't lead me to the position where I can make commitments on when those solutions might be found or how they may be implemented.
But I think we have got an appropriate amount of focus in terms of the resources that Bega Group is putting into the sustainability space and indeed the capability of the company to make sure that we keep the commitments we've named. And if we are able to achieve them more quickly, we'll obviously be delighted to do so, but the position we've taken is the position that stands.
Y eah, thank you. Part of the reason for asking the question is also just comparing with other broadly similar-sized manufacturing companies in which I'm invested. I see there's another question here, so I'll give it to you first. Hi, Barry.
Hi.
Philip. Philippa Russell, supplier. I'd just like to say, Barry and the team, I'm really pleased to see the great improvement with the results this year, I think, for 2024.
I think that's really good and shows just how hard you've been working. I'd also like to just add on the efficiencies bit. We have actually inherited a few of these plants over the last few years. They weren't ours, but we have gained them from other companies. So I think.
I think you should come up here.
Oh, yeah, that's a very good answer. To give a bit of support to Barry and the team, that is a little add-on to how we are looking at making everything more efficient. Over time, obviously, it takes a lot of time and money. All right.
No, I thank you, Philippa. That's very kind. But that is also a very true statement that I miss.
I would say that as we have made acquisitions, we do have a particular manufacturing skill that was maybe not there in some of the previous owners, and that has seen us focus on improvements at a lot of sites, some of which we said were well short of where they needed to be.
Jillian King again. Just my other questions are really, except for one, is really just around just seeking some clarification on a few things. And one of them, I was just a bit puzzled because Bega Group's interim, there's a difference between the interim greenhouse gas emissions reduction target and the overall one. The interim target is to reduce absolute emissions, which is fantastic. And I wish so many more companies would do that. But the overall target is net zero. And so I'm just wondering, does net zero mean that Bega is pursuing offsets?
Not at this stage, but it would be something that potentially may need to be considered as we work through the process of meeting those targets, but not at this stage.
I'm very reassured by that. And I would just counsel the board that if you do look at that, be very, very careful because so many companies do it to avoid actually reducing emissions, which is why I give the big praise on the absolute emissions before. And also because it's really difficult to permanently absorb emissions from the same atmosphere that you're throwing emissions into. And so there are questions being asked around the traps. Okay. My next question is around packaging. And the sustainability report says that more than 93% of Bega's packaging was reusable, recyclable, or compostable. And we've heard a lot about that today, which is fantastic. That was in calendar year 2023.
Many manufacturers claim that their packaging is compostable, but it's only compostable in certain industrial composters, not the small-scale, low-tech ones that we're most familiar with. So what does Bega Group mean when it says its packaging is compostable?
I think I would need to take that question on notice. We don't have our sustainability team here. Happy to answer that question. So I don't want to give you an inaccurate answer, so I would rather take the question on notice. That's fine. And also, when does Bega plan to achieve 100% of its packaging being reusable, recyclable, or compostable? Because I just didn't find that.
Yeah, it's obviously an endeavor, but I just want to be careful here.
I mean, I think that as we think about packaging and plastics and food waste and preservation, we need to make sure that we are balanced in our views around what is achievable, and indeed, we need to look at that in the context of the overall supply chain, which includes food waste and food preservation and the life of food. So we've obviously got a team that is dedicated to doing all that we can to meet the Australian packaging undertakings, and it is an industry-wide undertaking that. Sorry, Pete, you can add, so 93%, we continue to move towards the mid- to high-90s%. What I would say is, as we get right to the end of that, there actually isn't industry solutions available at the moment to get to 100%. So we're actually trying to work with suppliers and actually create new industry solutions that actually don't exist.
So we continue to work towards that. We've worked towards that at a fairly significant expense. And I'd say not a lot of large consumer companies get up and talk about that in this country, but I would say we would be at the very pointy end of that achievement. And so we're very proud of that. We've done, we think, in a sustainable way for our business. But at the moment, we're actually trying to work with the rest of the industry to find solutions to get to 100% because they actually don't exist at the moment. So somewhere between 93% and 100% is where we think we'll land. And then at the moment, we're still actually working out how to get that final couple of %. That's great news. Thank you very much.
Also, the sustainability report says that there's detailed information on the greenhouse gas emissions in the appendix, which, thank you very much for that, it was great to see, and there we find that the vast majority of Bega Group's energy consumption is from climate-damaging sources like fossil gases, diesel, and I was really surprised, a substantial amount of wood, and so I'm just wondering, why is a modern Australian manufacturing company like Bega Group using wood as an energy source, particularly given focus on health and environment.
I think we've had almost enough sustainability questions, I think I'm happy to continue the discussion afterwards, I'll answer this question, but I'd encourage you, we do have a number of people in the meeting, and we do need to progress the meeting, so it is wood waste, it creates energy.
Whether we like it or not in this country, timber is a very important and significant resource that is required for building. It is not a solution to say that we will import our timber from around the world. And the wood waste that we're using creates energy. It's a very sustainable and, in fact, circular process that we use. And so yes, we do. And it's an energy creator.
So that's the waste from timber mills for buildings. That's correct.
Great. Okay. Thank you. My last one is nothing to do with sustainability. Okay.
And can this be your last question, please?
Yes, it is. It is my last one. And it picks up on what you were saying about recognizing the demographic changes and particularly more people cooking with yogurt. I'm just wondering, is Bega looking at doing an Indian-style yogurt?
The reason I ask that is because I have an Indian friend, and I was with her on Sunday. She said the only place that she can get Indian-style yogurt is at Costco. The Indian subcontinent people, the number is going up and up and up. I think there's a huge market there.
If you have a look at the campaign I talked about before, Farmers Union Greek-style yogurt, the Great Aussie All-Rounder, is a Greek-style yogurt, which is actually extremely popular with people from the subcontinent. The advertising promotion of that actually explains the use of that in cooking for people from the subcontinent and from the Mediterranean and from African communities because it's very popular in their cooking. We think we're very much meeting that new demographic as it evolves in Australia. That product is absolutely part of that.
So I'm not sure about the specific Indian-style yogurt, but that yogurt's very popular in that form of cooking. Thank you. Okay. Thank you for your questions. Ladies and gentlemen, we've now come to the formal part of the meeting. A poll is being held on all resolutions at this meeting. If leaving early, place completed voting cards in the ballot box by the registration desk. For each item of business, I will first open the floor for discussion, and then we'll put the motion for that item to the meeting and ask you to complete your voting cards in relation to that. Share registrar, Ms. Julie Stokes of Link Market Services Limited, will act as a returning officer in relation to the poll. If there are any aspects regarding voting that you are uncertain about, please ask one of the registrar staff.
The results of the poll will not be available before the end of the meeting. You can, however, obtain the results of the poll later today by visiting the Bega Group website or the ASX. Ladies and gentlemen, the resolutions will be the adoption of the remuneration report and election of directors. Sorry. The adoption of the remuneration report. Firstly, to item two in the notice of meeting. The remuneration report on pages 39 to 53 of the annual report outlining the remuneration for the board, executive CEO, and other key personnel. In setting remuneration, the nomination remuneration people and capability committee refer to market and external advisors. I would inform the meeting that the following proxies have been received in respect to the remuneration report. I will be casting the undirected proxies in favor of the motion. Are there any questions regarding the remuneration report?
So this comes from Stephen Mayne. Thank you for disclosing the proxies to the ASX with the formal addresses. There was a 10.8% protest vote against the REM report. Corporate voting is not a secret ballot. Have you investigated who voted against and why? When disclosing the poll results today, could you please advise the ASX how many shareholders voted for and against each item, similar to a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment and insight on the chronically low retail shareholder participation rate.
Apart from observing the recommendations by the various proxy advisors, we have not made further investigation into the negative, into the 10% vote against the REM report. We have reported the results of the poll every year in a consistent manner and according to our obligations, and that's what we'll continue to do. No further questions.
Any other questions on the remuneration report?
Good morning. Morning, Mr. Chair. My question may not be suitable for yourself to be answering, but maybe Mr. O’Brien, the chair of the remuneration report, remuneration committee might be able to answer it. Just I noticed in your LTIs that the executive chairman, Mr. Irvin, has any awards in cash this year. I noticed there's a nice explanation in the annual report, which helps explain it, which I understand. Thank you. Is this considered to be just a one-off, or is it considered to be a change in structure?
It's been the methodology for a great many years, but I don't know whether Terry wants to add to it, but it has been an accepted methodology, and it relates to the fact that if you wish to examine the share registry, you would note that I have a very large parcel of Bega shares, and therefore it doesn't make a significant difference. But Terry might want to answer. I can't add much to the explanation in the REM report, but clearly, one of the aims of issuing rights to shares to senior management in their incentive plans is to get alignment with the shareholders. And so in the case of Barry, given that he's been a shareholder from the very beginning of the IPO, he has got a substantial number of shares and needs no further alignment. So it's a pointless exercise in doing it that way.
So that's why we've turned it into cash. And that's been the case for a long, long time and will be ongoing. I think it's been the case. It's the IPO. Peter Margin was the previous chair of the nominations committee. I didn't think that was for your LTI. That's been for both. Any other questions? Okay. As there are no further questions, I now move the remuneration report for the period ended 30 June 2024 be adopted. I will now put the motion to the meeting. Would you please now complete your yellow voting card in relation to item two? I'm sure you all know what the yellow voting card looks like. I'm sure you want. I'm sure all of you that have it know how to fill it out. I now move to the election of myself.
I will ask Deputy Chairman Peter Margin to chair the meeting while my election is conducted.
Thank you, Barry, and good morning, everybody. I might now invite Barry just to say a few words. I sort of formally thought I should step down, so I thought I should go there.
Look, I'll just say a few words. I think many in the audience know that, for the purpose of people online. I consider my leadership of Bega Group for so many years to be a great honor and privilege. And I know I am here because of the support I received from shareholders. And I never take that support for granted, and it's been greatly appreciated over a great many years.
Obviously, from my perspective, I have led the group through significant change and significant acquisition, always with the eye on making sure this business was still around for another 125 years. I always comment that we are here because of those that came before us, and our duty is to make sure that we deliver a business for those that will come after us. So my effort in life has always been to make sure that this business grows, this business changes and adapts to what is an ever-changing world and an ever-changing environment and an ever-changing marketplace. I am proud of what we, and I strongly emphasize that we have been able to achieve.
I think for me, it's been a privilege to work with many, many people, and that absolutely includes the current team that I am delighted to be part of putting together and then part of leading to make sure we can live up to the expectations of many. I put myself forward for election because I want to continue that work, and I want to continue to make sure that we not only meet but exceed the expectations of all involved with this company: shareholders, suppliers, community, stakeholder. I think I have the required experience and skills to make sure that we will achieve more in the future, and my endeavor is always to achieve more than we have achieved in the past whilst being very proud of the work that we have done today. So thank you in anticipation for your support, and I'm delighted to put myself forward.
Thank you, Barry, for those very heartfelt words. Before we proceed, I'd like to inform the meeting that we have the following proxies in respect of Barry's election. I'll be casting the undirected proxies in favor of the motion. Are there any questions? Yes, Deputy Chairman of the one that's online from Stephen Mayne. Barry has been chair since 2000 and has done a great job building our enterprise. Is he intending to serve a full three-year term? Health permitting, does he currently anticipate nominating again at the 2027 AGM? Also, over his 24 years in the top job, what does he regard as the two best decisions Bega have made over that journey? And could he also share one regret with investors today? Thank you, Stephen, and thank you for those words of support for Barry. He has been an extraordinary chairman over the journey.
I know Barry has certainly informed the board that he will be intending to serve out certainly this term, and we hope and pray that he continues to do that into the near future, but I'll allow Barry just to express his own points.
Thanks for the question, and I think Peter's answered the first part of it. My intention is to make sure that I continue to serve the company for the term in which I've nominated myself for. And indeed, in doing that, I will make sure that I'm considering beyond that, but I'm also making sure that I'm building a team that is able to steward this company forward well into the future, so two achievements and one regret. I'll do it quickly in the interest of time.
Interestingly, the first one I would say is when we made the investment into Tatura Milk Industries in Northern Victoria, which we all know has had a series of challenges. But the reality is that that broke the boundaries of the Bega Valley, and it took our vision wider, and it demonstrated to us that we could not only operate a business within the region that had an enormous history where we could work with others to create what was and is a great investment for us. So that was significantly important. I'll probably group two together, but the acquisition of Vegemite was extraordinarily important because it reset the company as a genuine branded company, and that obviously led to the acquisition of all those line brands.
So those two things, if I combine the branded strategy with the moving outside the walls of the valley, would be the two things that I would say actually set us on the path that we are on now. Look, my one regret, I think it's well documented. I take my leadership of Bega very seriously, but I also see that in the context of Bega being an important component of the dairy industry. And for all my effort and heartfelt emotion, I could not convince the two large cooperatives, Fonterra and Murray Goulburn, to reverse the decision to do clawbacks to dairy farmers very late in the season. I believed at the time, and I continue to believe, that that would impact the confidence of dairy farmers and the trust of dairy farmers for a long time to come and impact the momentum for the industry.
I think history says it did. And my regret is I was not able to convince them of the gravity of that decision and the long-term impact it would have on the industry.
Thank you very much, Barry. Brett, are there any more questions online? No. No. Thank you very much. From the floor?
Hi, Jillian King. My question builds on the previous question and also your responses, Barry. And recognizing that you've been in this leadership position for so long and that the shareholders' association would say, "Oh, it's too long. There hasn't been enough renewal." But also recognizing you have been in for so long and that that could be a risk in terms of the vision and drive and everything that you've had for the company if something happens to you.
I'm just wondering what is in place, what you're doing to build that capacity for somebody to take over from you in terms of succession planning and also for risk management?
So the gentleman standing before you is a very experienced dairy and food director. He is my Deputy Chairman. The board is, I think, and I think the community is very well aware that I was very ill for a period of time. I think it is fair to say that at the time, the requisite experience of the board and the experience of management saw the business continue to progress and go forward over that period of time. I'm very conscious of making sure we have a strong skills-based board and there is appropriate renewal occurring there, and you will see some further renewal in the next period.
But I'm also making sure that, and I think he demonstrated it today, and if more of his executive were here, you would feel very confident about the capability of the executive team. And obviously, I see an important part of my role as to be a strong mentor to the executive team. And obviously, Pete's the leader of that team. I see him as very much a part of the future of this company, and he carries. And I think this is important as much as the knowledge and skill and experience of running a dairy and food company is important. Carrying the same values and culture that this business has built up over a great many years and looks to make sure we embed in the business is extraordinarily important. And I know that all my board members, I know Pete Margin, and I particularly know Pete Findlay.
We've got our CFO and company secretary there in Gunther and Brett that also carry that same culture and values, which is the thing that I think gives you the most security that this company will always behave in the manner in which it has in the past. Thank you.
Thanks, Barry. Are there any other questions from the floor? And if there are no other questions, I now move that Barry Irvin be elected to the board, and I'll now put that motion to the meeting. And if you already haven't done so, could you please record your vote in relation to resolution 3A? And I'll hand the meeting back to Barry.
Thank you, Peter. I now move the election of Rick Cross. Rick, I'll invite you to say a few words.
Yeah, thanks, Barry, and good morning, everyone.
It is indeed a privilege once again to stand before you looking for your support in the upcoming election. I farm in Northern Victoria, not far from the Cherus site. And last December, we made the difficult decision to close our dairy. No family succession plan coming through and 32 years of getting up way too early. So with that in mind, we made that decision and moved on to still being involved in the dairy industry, running adjustment for dairy heifers, providing fodder, but just sleeping in a little bit longer and having quite a life looking after grandkids. One thing about knowledge, it doesn't disappear just because you stay in bed. I was first involved with Bega Cheese back in 2006 when Barry and his group of government vets came to look at the Cherus site.
We all know how that acquisition went through, and this was documented in 2011. They purchased the remaining 70% of TMI, and I moved on to the Bega board. Since then, the dairy industry has undergone a fair amount of change. We've had national milk volume decline, and nice to know in the last couple of years it's stabilised and let's hope for some more positive growth out there, and we've also seen the demise of some of our major players in that industry, so during that time, Bega needed to change its footprint. It needed to evolve. It needed to move with the market. And through strategic acquisitions, we now find ourselves the owners of some of Australia's iconic and most trusted brands: the Bega Cheese brand, Vegemite, Dairy Farmers, Farmers Union, and DARE.
As part of those acquisitions, I was around for all of those, and I would hope in some small way my positive comments led to the right decisions being made by the team, and I must emphasize that. It was a team with the board, with the execs. We're all going in the same direction. Looking forward, the Australian industry, sorry, with world demand and customer needs continuing to change, Bega will need to continually focus on its footprint and its strategy moving forward, so with your support and the boards behind myself, I'd like to continue in that process. Thank you.
Thank you, Rick. Before we proceed, I would like to inform the meeting we have the following proxies in respect to Rick's election. I will be casting the undirected proxies in favor of the motion. Are there any other questions?
Yes, there are, Chairman, from Stephen Mayne.
The first part is for Rick to address, and I'd suggest the second part for yourself. It is unusual to have an active owner, manager, farmer on a big corporate board like Bega. Could Rick Cross please share his insights on balancing the sometimes competing interests of farmers, suppliers, and shareholders? Also, what current level of farmer entitlement to board seats at Bega? And when was this last changed? Did any of the proxy advisors recommend a vote against any of today's relations, including—or I think he means resolutions—including the full board appointment resolutions?
So Rick, you might answer the first one.
I'll answer the rest, well, I think the first part of that question is quite easy. I'm no longer a supplier. So I'm independent and have no conflicts of interest other than being a shareholder.
As I said, I've been involved in the dairy industry for the last 32 years. I was born on our place. So if you want to get really technical, it's been close to 55 years on a dairy farm. And I've represented dairy farmers at many different levels, from local UDV to working for Dairy Australia. I think my knowledge sort of stands for itself. Without that conflict now of being a supplier, well, I think that'd speak for itself.
So if I can. I'm Rick Ports. Yes, boys. Okay, so there's two parts to it.
I will address the conflict issue, though. So supplier directors of Bega comply with all the rules and receive the same payment for their milk, as does every other supplier. So there is no, that is managed entirely. There are no special arrangements.
It is entirely public in terms of how that role is or that requirement is met. There are two positions currently held for supplier directors on the Bega board. It reflects the history of the company. It reflects what we undertook to shareholders when we first listed the company back in 2011. In fact, it has changed from that initial position that we took to the then cooperative or the then Bega Group shareholders who voted to list the company. At that time, there were four positions on the board reserved for dairy farmers. We reduced that to two last year. There was one proxy advisor that recommended against Rick's election, I think. Is that correct? No. No, there was none. Sorry. My mistake. My apology, Rick. So yes, so I think that answers the question. No further questions.
Philippa Russell, supplier.
I'd just like to add it's nice to see Rick, although a retired farmer, he has the knowledge of the farmer. It's very important, I think, that Bega Group retain those two farmer positions. It's the most important thing that I could see happen. You have a lot of information there. And what have we based ourselves on? The farmer and what we produce. And I think it's terribly important. It's something you'll hopefully keep in the back of your mind that this is where it all began. And thanks, Rick, for stepping up again.
I think I would add,
Philippa, that—and this would be no surprise to any shareholder of Bega—our largest, by far our largest piece of procurement is milk. That is the largest singular item we buy in this business every year.
Knowledge of that procurement process, knowledge of what will cause a farmer to both supply you, stay loyal to you, comply with the conditions of supply, etc., is extraordinarily important for that very large piece of procurement. And we all know, in terms of that diminishing supply that we've seen nationally and the history of that I mentioned earlier around some of the dairy companies, making sure you get that relationship with the dairy farmer right is extraordinarily important to the business. And we see what the impact is if we do not have that supply rolling throughout our large plants, whether that be in our commodity business or indeed even in our branded business. So are there any other questions? Sorry, I'll just put them there. I will now put them, sorry. I now move that Rick Cross be elected to the board.
I will now put the motion to the meeting. If you haven't already done so, please record your vote in relation to resolution 3B. I now move to the election of Raelene Murphy. Raelene, I invite you to say a few words.
Thanks, Barry. I'll keep it quite quick. There's only one plane out of Merimbula, and I stand guilty of my fellow directors withdrawing their support if I keep going on too far. I'm delighted and humbled to be restanding for election of the board of the Bega Group. I've been a director and chair of the audit committee since 2015 and have had the great honour of working with Barry and my fellow directors in that period.
I feel that we've achieved much in transitioning the business to a premium branded business that is more resilient to cycles and has the potential to deliver significant upside to shareholders. In my time on the board, we brought Vegemite back to Australia and preserved its position as number one in its category and continued to grow a product that's 100 years old. That's no mean feat and a real credit to the innovation and determination of the team. We've successfully integrated the Lion group of assets and a stable of brands and weathered some of the most volatile times in the segment to present as a business with iconic and category-leading brands and almost 4,000 employees who are mostly employed in regional locations and are all working incredibly hard for shareholders, and we've also continued to evolve through innovation, our manufacturing footprint, and product offerings to deliver increased value.
Our share price has not been immune to the volatility in the segment and to sentiment, and throughout all of that, Bega has remained solid and, in my view, continues to provide great upside and potential to investors. I thought long and hard about asking your support today for re-election, given my tenure and my personal belief that directors don't have a right for instant re-election, and sometimes they need to move on. My previous executive experience and experience as a non-executive director across listed companies that have added significant value to shareholders means that I think I can make a real contribution to your board, and the value of my corporate history with Bega ensures that momentum is not lost on significant initiatives, and thankfully, I have the support of my fellow directors.
This is a board that values culture and performance in equal measures and a management team under who I regard as an excellent CEO and Peter Findlay that reflects and cultivates these values. There is much success ahead of us, and I'm confident that I can contribute to that success and ensure that it's reflected in returns to you, the shareholders. Thank you in advance for supporting me. That's it. Hopefully, not too long.
Thank you, Raelene. Before we proceed, I would like to inform the meeting we have the following proxies in respect to Raelene's election. I will be casting the undirected proxies in favor of the motion. Are there any questions?
No.
No. Any questions from the floor? As there are no questions, I will now move that Raelene Murphy be elected to the board. I will now put the motion to the meeting.
If you haven't already done so, please record your vote in relation to resolution 3C. I now move the election of Harper Kilpatrick. Harper, I invite you forward to say a few words. I could say Harper missed his plane yesterday. I'm sure he doesn't want to miss another one, but I'll leave that as the introduction, Harper.
Thank you, Mr. Chairman, and good morning, ladies and gentlemen. Thank you for the opportunity to address you today and seek your approval for my appointment for a further three-year term as a supplier director of Bega. By way of background, I'm both a dairy farmer and retired chartered accountant, having spent all my executive career in the agriculture, food, and beverage sectors. I've been dairy farming in southwest Victoria since 2011, prior to which I was deputy CFO of Almarai, the Middle East's leading food and beverage manufacturer and distributor.
I've held several non-executive director positions since moving to Australia, the most notable being a non-executive director of Murray Goulburn Co-op for 18 months prior to its sale to Saputo Dairy Australia. With all this in mind, I bring a good understanding of dairy from both sides of the farm gate, which has served me well on the Bega board. I'm very proud of what the company has achieved over my three years on the board, in particular the integration and revitalization of the Lenah Dairy and Drinks business, the management of the business through COVID, and the subsequent management of inflationary pressures, including the increase in farm gate milk price. I've contributed regularly to the discussion on strategy, policy, and governance at board meetings. I'm also a member of the audit, milk pricing, and risk and sustainability committees.
I believe I have represented the interests of all stakeholders in a professional and ethical manner and haven't forgotten that my primary role is to represent the shareholders of Bega. I appreciate your support and will now hand back to the chair.
Thank you, Harper. Before we proceed, I would like to inform the meeting we have the following proxies in respect to Harper's election. I will be casting the undirected proxies in favor of the motion. Are there any questions?
Yes, I have one, Chairman. From Stephen Mayne, the first part to Harper, the second part to yourself. Australia is in the midst of an unprecedented deluge of takeovers, with 27 major takeovers above AUD 200 million completed so far this calendar year. The ASX is losing long-standing names such as CSR and Boral. Why are public markets not valuing ASX-listed companies like ours more highly?
What are we doing to avoid being gobbled up like so many other companies? As a farmer director, what is Harper's attitude towards any potential takeover of Bega? And does the chairman agree that thinning out of the ASX is a problem for the nation?
That's not a simple one, is it? Look, I would say I recognise that I've got a fiduciary duty to the shareholder. Therefore, we've always got to do what's in the best interest of the Bega business. And I would just keep it as simple as that.
Look, my answer is so I would say that obviously, and probably it's defined by my earlier comments, that our ambition is to be around for another 125 years. Our view is that the way to best protect ourselves is to continue to perform well and have that performance recognised by shareholders.
And we, of course, recognize all our duties as a publicly listed company. I would agree that we need a vibrant Australian ASX and a vibrant Australian economy that is not from an industry point of view owned by multinationals. I think everybody has their role, and I am not against international investment in any way. I think it's very important in this country, but it is equally important that companies are recognized for the work that they do, the value that they create, and indeed be the Australian champions, not only within Australia but internationally. Are there any further questions? I will now put the motion to the meeting. If you haven't already done so, please record your vote in relation to resolution 3D. Ladies and gentlemen, in the interest of time, thank you very much for your attendance at this year's AGM.
If all votes have been completed, please ensure you lodge your yellow voting cards in the ballot box stationed at the registration desk to ensure your votes are counted. The poll will remain open for a further five minutes. Just before I declare the meeting closed, I know that a number of the Melbourne-based directors and staff would have enjoyed to have a traditional cup of tea with you at the end of this meeting. Unfortunately, as Raelene mentioned, they're all on a flight, and the meeting has been quite a long one. And so I apologize on their behalf, but I will be very happy to join you in a cup of tea at the end of the meeting. Thank you all very much for your attendance, either here or online. And I now declare the meeting closed. Thank you.