Well, good morning, ladies and gentlemen. My name is Jane McAloon, and I'm the Chair of your Board. On behalf of the Board, I welcome you today to BlueScope's 2024 Annual General Meeting. As the necessary quorum is present, I declare this AGM of shareholders open. I would now like to welcome to the stage Uncle Richard, who is the Chair of the Illawarra Aboriginal Corporation. He recently retired from his business development role with Innovation, Training, Employment Careers, ITEC, which he held for over 30 years, where he leaves a fabulous legacy by helping launch hundreds of Aboriginal business startups and support them on their journey to becoming successful businesses. Richard is also a former employee of BlueScope, having worked at the Port Kembla Steelworks on the plant for the 10 years prior to that.
He is an important leader in the local community and has helped us shape our thinking toward our approach to the Land Transformation Master Plan here at Port Kembla and its design with country principles. We've also been engaging closely with him and the Illawarra Aboriginal Corporation on gifting a parcel of land and a building located in our community campus for a future Aboriginal cultural centre. Welcome, Uncle Richard.
Good morning. Before I start, I'd just like to acknowledge the BlueScope Chairperson, Jane McAloon, Mark, the CEO of BlueScope. Yeah, got that right. Yeah. The shareholders and the rest of the Board of Directors. Yeah. So, look, welcome everybody. I'd just like to thank BlueScope for acknowledging and wanting a Welcome to Country on behalf of the traditional land that we're meeting on. I think it's good that we're moving in this direction, making. We know that BlueScope, previously BHP, a multinational organization within the world, and showing leadership in what you're doing, I think, is a good thing. It's a humanity thing. I think it showcases that we're getting better as a nation. And when organizations such as yours do what you do and working with local communities, I think it's a good thing. And hopefully all these other multinationals think the same way.
So, congratulations and keep doing the good work that you do. And it's about building relationships and our country. We are a pretty lucky country in a lot of ways. And if we can continue to move in that direction, then it makes our society a better place for everyone to enjoy and work. And unfortunately, you just got to look around other parts of the world, not so good. That's unfortunate, but we're in Australia, so let's try and better ourselves and make ourselves a good people nation. I don't know. That's what I think anyway. Look, a welcome is a very important process in this day and age. As I said, it showcases that we're getting better, understanding that Aboriginal people are and will always be first peoples of this nation. Unfortunately, some people don't understand that, but that's their issues.
We just need to move forward and make sure that we are respectful to the first peoples of this nation. And what I will say is I'm not going to stand up here and say that Aboriginal people are the best, great, all this stuff. We have issues in our community. But if anyone can tell me that there's not an issue within other communities, whether whatever culture you come from, then you need to have a look in the mirror. We're all human beings at the end of the day. And I think that gets lost in a lot of the issues that happen around the world. First and foremost, we're human beings. And if people can think a little bit like that, yes, we've got our different religions, different cultures and beliefs and all that kind of stuff, but at the end of the day, we're human beings.
If we don't look after each other, respect each other around the world, then who's going to look after us? I know it sounds simple and easy, but life's too short. We're not here for a long time. So while we're here, let's respect and understand each other. And that's all cultures. We are a multicultural society in the Illawarra. People from all parts of the world come over to Australia. They're home. Great. Let's work, live with it, learn our history, learn the history of Australia, the good, the bad, and the ugly. It wasn't all good. I'm not going to stand up and say, "Oh, it's been great." And as I said, learn about the history of Australia, the first peoples of Australia. What happened when colonization happened? It wasn't good. But what I say, it's our history. Learn about Aboriginal culture.
It's not too hard to ask, is it? It's not too hard to ask. [Foreign language] . Welcome to country. Welcome to land. The land we are meeting today is the land of the Dharawal people. Should I ask you what land we're on?
Dharawal.
Dharawal. So remember it, that's history. Learn your history. Learn about the Aboriginal people. Dharawal. Can anyone tell me what's the traditional owner of the land that we're on? Who are the traditional owners? No, it's not Dharawal. There you go. You're learning. Who said Wodi Wodi? Now someone up here said Wodi Wodi too. Learn about it. It's your history. It's your country. Learn about where you are. Aboriginal history. Dharawal land, Wodi Wodi people. But there's a few other cultures that occupy this land too. Different cultures, Aboriginal cultures. So there's 13 Aboriginal cultures that occupy this land. Can anyone tell me how long Aboriginal people have occupied this land continent?
4,000 years.
4,000? No, I think you're a bit off there, aren't you? Yeah, I think it's about 65,000 years. Yeah. Well, someone's shaking head and saying, "No." Yeah. So we all have our ways of thinking, and that's good. So 65,000, maybe plus. So learn about the history of Australia. We're a nation that's at our history. I keep going back to the history. I can't get away from the history. Learn about it. It makes you understand where we've come from and hopefully where we're headed. I'd like to acknowledge my elders, very important people in our community. They are the people that have shown who we are, where we've come from, to be proud as an Aboriginal person in your own country. Yeah. We're getting better. And without their perseverance, their endurance, their fight the fight, walk the walk, I don't know where we'd be.
I don't know if we'd be doing this kind of stuff. So it's important that we continue to remember. People talk about the Tent Embassy, the Aboriginal Tent Embassy that was in Canberra back in the '60s, '50s. People said it was a blight on society. Well, it might have been a blight on society, but what it did, it brought issues to the table. Aboriginal issues. Back in the day, we weren't being given the same kind of stuff that normal people got, everyone else got. So we're getting better. So the Tent Embassy, that's part of our culture, and I'm proud of that for what them people have done. Without them doing that, I don't know where we'd be. So welcome here today.
I hope that the Board of Directors, the shareholders continue to do what you do, supporting community, all communities, because like I said, you are a multinational society organization, and you people are leaders in your community. So thanks for having me today, and I hope that we can continue to work together in the future. Thank you very much. Thank you.
Thank you, Uncle Richard, for your informative, challenging, and beautiful welcome to country. We very much appreciate it. We understand that the history of this company is really important. We respect and honor that as we do with you. Thank you. I pay my respects to the traditional owners of all the lands where people are watching from today, to elders, past, present, and emerging, and to all First Nations people here today on Dharawal Country, the Wodi Wodi people. The Great Steel City of Wollongong is hosting our AGM for the third consecutive year. Thank you to everyone joining us here in person today, and a warm welcome to those joining us online. I will now pass to Michael Reay, our MC for today, to cover some important procedural and technical housekeeping matters.
Thank you, Jane. Welcome everybody to BlueScope's 2024 Annual General Meeting. My name is Michael Reay, BlueScope's Head of Corporate Affairs for the Australian Business, and it is my pleasure to be your host for today. It is great to be holding the AGM again here in the Illawarra in person, third year in a row. It will be a hybrid meeting, so a very warm welcome to those who are also joining us online. Given this is a hybrid format, I'd like to cover some procedural housekeeping matters for today's AGM that will help shareholders participate in the meeting. For those of you here present in the room, you would have been given a card when you registered this morning. If you've got a yellow card like this one, shareholders and proxy holders may speak and vote at the meeting.
If you've got a blue card, they're for shareholders who may speak but not vote, and red cards are for visitors who are not shareholders, but they're welcome to observe, but can neither speak nor vote at the meeting. Please retain these cards as you'll need to present these cards for asking a question or for re-entry to the room if you do pop out. For those online, we will shortly cover how you can vote and ask questions. However, if you have any trouble using the online platform during the meeting, please refer to the virtual meeting online guide, which can be accessed from your screen. It contains all the information you need to know about how to vote and ask questions at today's meeting. You can also call the help number shown on the screen for assistance.
Now let's cover off how to vote and how to ask a question. For those shareholders and proxy holders physically present here today at the meeting, your voting paper for the poll is on the back of your yellow admission card. In order to vote on a relevant motion, a shareholder or proxy must mark the appropriate box, either for, against, or abstain. Proxy holders who have been directed to vote in a specified manner must vote in accordance with those directions. For your vote to be valid, proxy holders who have open votes must place a mark in the box for, against, or abstain. Once the chair opens the poll, if you wish to vote early, just complete your voting card and then place your card in one of the ballot boxes which are positioned towards the back of the room.
If you have any difficulty in completing your voting paper, please see one of the Link Market Services staff members who will be able to assist you towards the back. For shareholders joining us online, to register to vote and to get a voting card, click on the Get a Voting Card box at the top or bottom of your screen and enter your proxy number or your shareholder number and postcode, or if you are outside Australia, your country of residence. The notice of the meeting contains information on where you can locate these numbers if you do not already have them handy. To vote, you will need to click either for, against, or abstain voting button for each item of business and then click the Submit Vote. Online shareholders and proxy holders attending may vote through the online portal at any time during the meeting.
You may edit your voting card as many times as you like while voting is open. Now, how to ask a question. In terms of how we'll manage shareholder questions today, for each item of business, we'll take questions first here from the floor. Then I'll read any online questions that come through the portal on behalf of the chair, followed by any telephone questions if we have any online. Shareholders present here with a yellow or blue card can ask questions. If you wish to ask a question, you should, at the appropriate time, make your way to one of the microphones in the room and give your name to the attendant who will then introduce you to the chair. You may then ask your question.
Shareholders and proxy holders online can submit written questions any time from now by clicking on the Ask a Question box, which is at the top or the bottom of your screen. If you have yet to obtain a voting card, you'll be prompted to enter your security holder number or proxy details before you can ask a question. If you do have any questions, I encourage you to submit them as soon as possible as there might be a slight delay in them being received on this end. In addition, on your screen, you'll see our virtual meetings guide. This also contains all of the information you'll need to know about how to vote and how to ask questions. You can also call the help number that's shown on your screen if you have any difficulties.
Shareholders and proxy holders on the telephone, press Star 1 on your keyboard to ask a question. If at any time you no longer wish to ask a question or make a comment, you can press Star 2. More generally, we will answer questions in accordance with the item of business to which they relate. If you are asking a question today as a representative of a particular shareholder organization or a group, please say or include that at the start of your question. To avoid duplication, if we receive a number of questions that are essentially the same, we'll do our best to aggregate these and broadly cover the issues raised by the questions. Of course, we do ask that all questions are asked in a respectful manner. Any online questions that include offensive language or defamatory remarks will not be read out or responded to.
And in the unlikely event that we experience some technical difficulties during the meeting, we may need to take a short break. If we're able to, we will communicate this to our online shareholders either verbally or by putting up a communication. If there is a significant tech issue at the discretion of the Chair, we will adjourn the meeting to another time or date. And if that occurs, please keep an eye on your email inbox and your AGM website for updates and further details. And we'll also lodge any details with the ASX. Now, with all of those procedural housekeeping matters out of the way, I'll hand back to your Chair, Jane.
Thank you, Michael. And we won't be testing you on those at this point. Before we start the formal business of the meeting, I'm delighted to introduce to you my fellow directors and the company secretary who join us here today on the stage. From my far right, we have Peter Alexander, Kathleen Conlon, Ewen Crouch, who is the Chair of the Risk and Sustainability Committee of the Board. We have Rebecca Dee-Bradbury, who is Chair of the Remuneration and Organization Committee, and Penny Grau, the Company Secretary. And then from my far left, we have Zhiqiang Zhang, Alistair Field, who stands for election today, Jennifer Lambert, Chair of the Audit Committee, and Mark Vassella, our Managing Director and Chief Executive Officer, who many of you know. We also have K’Lynne Johnson, Chair of the Health, Safety, and Environment Committee, joining us today online.
In the front row, we have David Fallu, our Chief Financial Officer, as well as members of our management team, including Tanya Archibald, Chief Executive of Australian Steel Products, our Chief People Officer, Peta Renkin , and our Chief Digital Information Officer, Sam Scimone. Finally, Matt Honey and Richard Bembridge, our external auditors from Ernst & Young, are here with us today, and Julian Tai is joining us online. Matt, Richard, and Julian will be available to answer any questions you may have for the auditors at the appropriate time. The notice of meeting was distributed earlier, setting out the business and resolutions to be considered today, which are taken as read. There are a number of items of business on today's agenda, all of which are shown on the screen now. Voting on items two to eight will be carried out by way of a poll.
Daniel Reid of Link Market Services is the returning officer for today's poll. As mentioned earlier, only persons holding a yellow card are entitled to vote at this meeting. So I now formally open the poll on items two to eight. Voting will close five minutes after the end of the meeting, and the results of the poll will be available later today on the ASX and our website. I will shortly make a few remarks about BlueScope over the past year, and following that, Mark Vassella will provide you with further detail about BlueScope's performance. Finally, Rebecca Dee-Bradbury will make a few comments on our remuneration approach, and I will then move to the formal business of the meeting. Now to my remarks. I would like to start with safety.
BlueScope has a strong foundation in managing safety well, and it is a fundamental tenet of how we do business. Disappointingly, this year, BlueScope's lag indicator, Total Recordable Injury Frequency Rate, or TRIFR, again increased. Some of our colleagues also sustained very serious life-changing injuries. This is of significant concern to both the Board and management, and in July, Mark and his team launched a global refocus on safety program. This is intended to ensure ongoing emphasis on BlueScope's foundational safety practices right across the company. We're encouraged by the leadership Mark and his team have shown in developing and rolling this program out. He will provide more detail on this shortly. From the perspective of the Board and the Health, Safety, and Environment Committee, we are focused on providing the appropriate support and challenge to management to drive the required improvement in performance.
It is the highest priority for the board and management. Let me turn to the FY 2024 highlights. BlueScope delivered a resilient financial result in a challenging global macroeconomic environment and steel industry volatility. BlueScope continued its track record of shareholder returns, a strong balance sheet, and ongoing investment in sustainable earnings and growth. BlueScope also made strong progress under our Transform, Grow, Deliver strategy. This is very important, and Mark will cover this shortly. Our growth focus is both on continuing the shift towards our higher margin premium and branded products such as Colorbond and TrueCore Steel, including through the new Western Sydney metal coating line, and on growing our U.S. businesses. We have been making steel in the U.S. since 1997, and today we operate in 16 states across that country.
Our U.S. business is core to BlueScope's growth, and we're excited by the value creation opportunities that BlueScope has in this large and attractive market. At the same time, we're working hard to unlock a low carbon future for our operations, particularly in our iron and steelmaking process. This is easy to say, but difficult to deliver, particularly when technology is at its very early stages. We have a long way to go, but we are energized by this challenge. I will say more about decarbonization shortly, but the board is encouraged by the great progress being made, such as the installation of the electric arc furnace at the Glenbrook site in New Zealand, and lastly, we're working to unlock value from BlueScope's 1,200 hectare portfolio of land. This is a multi-decade value-creating opportunity, so let me say a little bit about BlueScope's financial framework.
It is fundamental to the sustainability of the company. Established in 2017, it provides essential guardrails for financial management built on the lessons from BlueScope's first 15 years as a listed company. It underpins all decisions, supporting our Transform, Grow, Deliver strategy. Over the last 12 months as your chair, I've reflected on the fundamental importance of this framework. Steel is a cyclical and volatile industry, and pricing is largely determined by international demand and supply. In this context, our financial framework is essential for BlueScope's long-term financial and operating strength and balances the competition for capital between shareholder returns and capital investments. This discipline is crucial in enabling the confident operation and investment in our long-life, capital-intensive business through macroeconomic cycles. The board firmly believes that the framework should provide shareholders confidence in BlueScope's ability to weather industry and macroeconomic cycles and to drive long-term quality earnings and growth.
This is evident in the resilience of BlueScope's performance this year. The board also continues to work hard to provide oversight of the company's approach to driving key sustainability outcomes. Today, we're just up the road from our steelmaking home, the Port Kembla Steelworks, which in less than four years will have been continuously operating for 100 years. It is Australia's largest manufacturing site. Port Kembla steelmaking is steeped in history as the backbone of this local community. But more than that, Port Kembla has been the backbone of a modern and industrialized Australia. You see our products everywhere: on bridges, houses, buildings, and as part of Australia's renewable energy transition, to name just a few, and into the future, with the Blast Furnace 6 reline project, Port Kembla is our bridge to low-emission steelmaking, and it's on track to be operational in 2026.
We're progressing our decarbonization ambitions through partnerships and technology collaborations across the broader iron and steel value chain. In Australia, the team is continuing to identify the most appropriate direct-reduced iron, or DRI, options possible, potential ironmaking locations, technology options, and the enablers for each of those options. We're also progressing pre-feasibility work with Rio Tinto and BHP on a pilot Electric Smelting Furnace, which we believe has the potential to unlock the continued use of Pilbara ores in the lower emissions DRI process. Let me turn to the outlook for BlueScope. Mark will provide a summary of the current operating conditions across the business as covered in the updating earnings guidance we provided in late October and reaffirmed today. We note the outcome of the recent U.S. election and the optimism that markets have shown for the potential impact on the U.S. steel industry.
We're monitoring developments to understand what this may mean for BlueScope to ensure we're well positioned to capture any opportunities that may arise. We're confident in our balance sheet and operating resilience and our culture and experience in rising to address near-term economic challenges. To that end, we're bolstering performance through a significant group-wide cost and productivity program, as well as working hard on the turnaround of our U.S. BlueScope Coated Products business. We're continuing to position ourselves to capitalize when the economic cycle turns, and it will. The board and management remains focused on ensuring our near-term performance is balanced with the investment in longer-term sustainable growth and returns to deliver the future of BlueScope. Now, turning to board composition and renewal. At the end of last year's AGM, I had the privilege of succeeding John Bevan as the Chair of the Board.
BlueScope has a collectively skilled and experienced board. At the start of this year, Alistair Field joined the board, bringing more than 25 years' experience in the mining, metals, and manufacturing sectors across North America, the Middle East, and the U.K. He offers himself for election and is unanimously supported by the board. You will hear from Alistair during the item relating to his election. Long-life, capital-intensive businesses operating through time in a volatile and cyclical industry require seamless and planned board succession. BlueScope has the culture and experience of what to do at the bottom of the cycle. That corporate experience and memory is as essential at the board as it is at management. Seamless and planned succession at the board ensures those lessons remain understood and effectively passed through director tenure.
In practice, this means our approach is to ensure incoming directors serve on the board for a longer period with longer-serving members before they retire. With five directors appointed in the last three years and plans underway for ongoing succession, the board asked senior directors Ewen Crouch and Rebecca Dee-Bradbury to complete their fourth term as directors. It is in this context of managed succession we seek your approval to increase the maximum number of directors to 12, which will enable this overlap of service to continue. We believe this approach is in the best interest of the company as we facilitate the transfer of corporate knowledge and experience to underpin board effectiveness through cycles. The resolution to increase the fee pool for directors facilitates this process. I would like to conclude with, oh, I think we've skipped our script.
I would like to conclude with five reasons why it's only going to get better for BlueScope. One, that's a drum roll there. Our commitment to safety and sustainability continues to be at the center of what we do at BlueScope, and we remain steadfast in our work to secure a sustainable future for our business and the communities in which we operate. Two, we have a highly resilient business driven by our quality margin-enhancing premium branded portfolio. This is led by our Colorbond steel product portfolio, which is a clear industry leader in Australia and has great potential to capture share in the North American market. Three, we have a strong balance sheet and will remain disciplined in our allocation and management of capital.
Four, we're progressing well on a number of turnaround initiatives, including the group-wide cost-out program and the turnaround of the BlueScope Coated Products business, and we continue to progress unlocking value in our extensive property portfolio. Five, we have an exciting pipeline of growth opportunities, including the assessment of how we can further integrate our U.S. value chain in a capital-efficient manner and ongoing initiatives to expand our earnings contribution from value-added products. Our North Star de-bottlenecking, the new metal coating line in Australia and Port Kembla plate mill projects will deliver growth, and our number six Blast Furnace reline at Port Kembla and the New Zealand electric arc furnace projects lay the foundation to deliver another generation of sustainable steelmaking in Australia and New Zealand. Before I hand over to Mark, the board would like to acknowledge his leadership of BlueScope through a few cycles now.
Our purpose and our bond underpin everything at BlueScope. Mark and his team, as well as the broader BlueScope, live both these in practice. They know how to pull together to manage challenging times, and they know how to simultaneously invest through the cycle for future value. Thank you to Mark, his leadership team, and the 16,500-strong BlueScope team across 15 countries for this year's results. Finally, thank you to you, our shareholders, for investing in and supporting BlueScope. It is the greatest privilege to serve you as Chair. I'll now invite Mark to update you on BlueScope's performance.
Thanks, Jane, and thanks to all shareholders, employees, and supporters of BlueScope here in person and online today. It's great to be back in the Illawarra with you again. Now, starting with safety, where, as Jane noted, the increase in the FY 2024 lagging safety indicator of TRIFR was simply unacceptable.
Our commitment to safety has not wavered, and it was clear that this disappointing performance required an intervention. To tackle this, we launched a global refocus on safety initiative in July of this year. This program highlights the importance of basic safety practices to ensure the well-being of our workforce. The renewed focus includes ensuring strict compliance with core safety practices, making sure that our people are committed to our fundamental safety principles, including the significant number of those that are new to BlueScope, providing our frontline leaders the resources to guide their teams. Now, most importantly, this means giving them back the time in their calendars to engage in toolbox meetings, audits, and other key touchpoints, and to continuing the important work in engaging our people in risk control improvement projects and learning and development opportunities. I'm pleased with how the business has responded to this program.
However, there's lots of work to do for us to drive the required improvement that we need, and we'll keep you posted as we progress. Our business delivered a resilient result in FY 2024, which is a testament to our growing and diversified business model, as strong contributions from North Star and the downstream and value-added components of the business offset the impact of soft spreads in Asia on our Australian and New Zealand steelmaking operations. To recap the key financial results, we reported an underlying EBITDA of AUD 1.34 billion, reflecting an 11.9% return on invested capital. We reported continued strength in our balance sheet, finishing the year with AUD 364 million net cash, and we reported ongoing investment in growth and returns, with over AUD 500 million returned to shareholders and over AUD 300 million invested for growth.
FY 2024 also saw the continued execution of key projects across the footprint under our strategy of transform, grow, and deliver that will secure our long-term future. To update you on these projects, in the United States, BlueScope's key growth region, we're working to add an additional 10% of volume at the North Star asset following the recent completion of our initial expansion, which increased output by nearly 50%. We're also looking at opportunities to further integrate our U.S. value chain and working to deliver value from the recent investments in BlueScope Recycling and BlueScope Coated Products, including the rollout of Colorbond in the U.S., which has enormous potential. In Australia, our successful ongoing in-market growth is set to continue, supported by sales and marketing programs, innovation, and differentiation.
To support this growth, we're well underway in installing an additional metal coating capacity for the anticipated increase in the Colorbond and Truecore steel sales. We're also securing the future of ironmaking at Port Kembla with the number six Blast Furnace reline, which is our bridge to low emissions iron and steelmaking when it is developed and scaled, and I had the privilege of going inside the Blast Furnace yesterday at number six, something I haven't done before, and it was pretty amazing, I've got to say. Anybody that wants to see a photo of that later, just come and see me. We had a very cool experience yesterday. The team there are doing an outstanding job, and the project is progressing very well.
In New Zealand, we're making solid progress installing an electric arc furnace to replace over half of our existing higher-emitting production, which is being co-funded by the New Zealand government. We're also continuing our work on the multi-decade opportunity to repurpose approximately 1,200 hectares of land in Australia and New Zealand. Our current focus is on unlocking residential land supply from the West Dapto site and progressing the development concept in Port Kembla, as we announced at last year's AGM. To support this body of work, just yesterday, I'm excited that Michael Yeandle has joined BlueScope's executive leadership team, and he will join us in early January as the head of our Property Development Division. Michael's a highly experienced property development executive with a proven track record of having been in property development across Australia and the United Kingdom for over 25 years.
In addition to our ELT leadership team, in December 2023, we welcomed our Chief Executive of Digital Information, Sam Scimone, who's with us in the front row today. Now, Sam's responsible for the global IT strategy and operations of the business, leading digital innovation and managing the increasingly important cybersecurity needs for BlueScope. In other changes to the ELT, our Chief Legal Officer, Deborah Caudle , our Chief Executive Climate Change and Sustainability, Gretta Stephens, and our Chief Executive of BlueScopeX, Andrew Garey, have all announced their retirements, and that will take effect over the coming months. I'd like to thank Deborah, Gretta, and Andrew for their highly valued contributions to BlueScope and wish each of them the best in their future endeavors. They've all made incredible contributions to our business over the years and leave a very strong legacy.
I'll give you updates on those positions as we move forward. Our key sustainability focus areas around safety, communities, responsible supply chains, and climate action inherently reflects our position as a large-scale steel manufacturer with long-lived assets in regional communities. In short, caring for our people, our communities, and our environment is at the heart of what we do. I spoke earlier about our approach to safety and the refocus initiative underway. As we continue to focus on our safety culture, we're also building and diversifying a diversity and inclusion mindset. I'm pleased to say that our continued efforts in this space have resulted in us achieving another milestone in FY 2024, with women now making up a quarter of the entire BlueScope workforce. I think you can see the diversity on display here today with our young people, graduates, and cadets.
Additionally, our people strategy includes a commitment to listen to our people and make sure BlueScope is seen as a great place to work. In March of this year, 77% of our employees provided feedback through a global employee pulse survey, and I'm pleased to report an overall employee engagement rate of 72%. In FY 2024, we've again made great progress on our decarbonization journey. Our near-term optimisation work and increased electric arc furnace production has resulted in a 12% reduction in our steelmaking greenhouse gas intensity since FY 2018, aligned to our 2030 target level, and we're continuing to work in pursuit of our non-steelmaking targets. We're also progressing a range of initiatives that are critical to unlocking decarbonization pathways for our business and the steel industry more broadly, including the New Zealand electric arc furnace and our collaboration with Rio Tinto and BHP and our broader Australian DRI options study.
In another highlight for the year, our Vietnam plant in Phu My achieved ResponsibleSteel site certification. Now, this is our third site to be certified following Port Kembla here and Illawarra, sorry, and Western Port in Victoria. Now to cover the trading update released today, which confirmed the guidance range provided in our earnings update in late October. This revised outlook highlights the challenging operating conditions facing the broader global steel industry, including the continued softness in East Asian spreads off the back of record levels of Chinese steel exports, ongoing cost inflation, and a period of pause and uncertainty during the recent election.
While these pressures are impacting the industry performance in the near term, our growing position in North America and continued growth in value-added and premium-branded products gives us confidence that BlueScope's resilience and longer-term success, underpinned by a robust balance sheet and strong operating disciplines. Our BlueScope has a culture of rising to these challenges and will continue to work in balancing near-term performance with longer-term sustainable growth and returns. To that end, we're targeting a further improvement in annualized earnings through approximately AUD 200 million of cost and productivity initiatives across the group. Now, in conclusion, I remain excited about BlueScope's bright future as the resilience of our business model and balance sheet enables the company to invest for sustainable growth and deliver returns to shareholders through the cycle.
I'm very proud of our dedicated team of more than 16,500 people who continue to work hard for our customers and our communities. I'd like to thank them for their continued dedication and thank you, our loyal shareholders, for your support during the year. Before I finish, I'd also like to thank our new Chair, Jane. You've been in the role for 12 months now, and it's been a pleasure working with you. We, as a management team, enjoy your enthusiasm and dedication, so thank you. Thank you all very much.
Thanks, Mark. Very generous. Ladies and gentlemen, I'd like to ask Rebecca Dee-Bradbury to speak to you about BlueScope's remuneration approach and outcomes this year.
Thank you, Jane. Good morning.
My name is Rebecca Dee-Bradbury, and it is my pleasure as Chair of the Remuneration and Organization Committee to briefly update you on the key items outlined in more detail in the remuneration report. The purpose of the remuneration report is to provide you with an overview of BlueScope's approach to remuneration, the performance achieved, and in turn, the remuneration outcomes for this year. BlueScope is an Australian-listed company that employs thousands of people across 15 countries. These people are the center of our continued success, with their dedication and hard work reflected in our solid financial performance in FY 2024. We strive to build a workforce that reflects the diversity of the communities in which we operate. We are pleased to again report that the board and executive leadership team level, female representation is at 50% and is aligned with our 40-40-20 target.
To attract and engage and retain the best talent globally, it is essential that our remuneration framework is relevant and competitive within the markets where we operate. We do this by having a robust governance structure and remuneration framework that is fit for purpose and supports the business strategy. The framework not only drives performance, but also ensures that our leaders are accountable for upholding our values, shaping our culture, and prioritising the safety and well-being of our people. Let me quickly provide you with a brief recap on our approach and how it has landed this year. The Managing Director and CEO and the Executive KMP, or key personnel, remuneration reflects the structure BlueScope's remuneration strategy, which sets fixed remuneration at or slightly above the median, with STI and LTI opportunities set below the market median.
This is offset by a greater probability of LTI vesting through the industry cycle. This approach results in their realized pay being in line with market median and provides value for them throughout the industry cycle while maintaining a balance between having a cost-effective remuneration structure and consistent returns to shareholders. For FY 2024, the Managing Director and CEO's annual fixed remuneration was increased by 3.5%, reflecting market benchmarks. His responsibilities in a highly complex global organization and in line with fixed remuneration increases provided to the broader business. The Executive KMP also received an uplift of 3.5% to their fixed remuneration. It is anticipated that the Managing Director and CEO will not receive an increase to his remuneration for FY 2025. I will now turn to our performance and other remuneration outcomes for the year.
When the board determined the FY 2024 Executive KMP incentive outcomes, we considered the group's underlying business performance, our remuneration principles, the Executive KMP's behaviours against our bond, and the delivery of value to shareholders. The board is satisfied that the Executive KMP behaved in line with our bond, performed well in FY 2024, and the incentive outcomes accurately reflect this balanced performance. Under the short-term incentive plan, the Executive KMP are measured against both financial and non-financial objectives, each weighted at 50%. Non-financial objectives include safety, sustainability, diversity, and strategic measures. For FY 2024, the STI assessments included discretion to reduce the payout under the safety category to zero for all Executive KMP, including the Managing Director and CEO.
Although BlueScope delivered on its committed risk control improvement projects, TRIFR was above the target range, and the board and management felt that it was appropriate to reduce the payout under the safety category to zero. The board approved an FY 2024 STI award for the Managing Director and CEO of 99.3% of his target opportunity. For other Executive KMP, the STI awards ranged from 73.9%- 126.4% of their target opportunities. The range of STI outcomes demonstrated the difference or differentiation in performance across the Executive KMP and reflects the varying performance across all of our businesses and the different stages of the cycle that these businesses are in. In FY 2024, Long-Term Incentive Alignment Rights Award was tested on June 30, 2024, at the end of the three-year performance period. The LTI award was subject to behavioral gateway and two performance conditions and a service condition.
The Managing Director and CEO and Executive KMP were rigorously assessed and were deemed to have behaved in line with our code, which is the behavioral gateway, and met the service condition. For the three-year period ended in 30 June 2024, management delivered a strong ROIC performance and maintained a strong balance sheet, which aligns to BlueScope's financial framework objectives. As a result, the board determined that the FY22 LTI Alignment Rights Award would vest in full for the MD, CEO, and Executive KMP. The committee will continue to monitor the remuneration framework to ensure it remains competitive in the global market and that it's aligned to our strategy and drives shareholder outcomes. Now turning to the board of directors. Considering market benchmarks and the director's responsibilities in a large global complex organization, fees paid to directors were increased by 3.5% in October 2023.
From July 1, 2024, fees were set in USD for overseas-based directors. This aims to mitigate variances in their fees due to foreign exchange rate volatility. More details on this will be presented in our FY 2025 remuneration report. We consider that this approach aligns with our remuneration principles of fairness and transparency while also ensuring that we can attract and retain high-performing non-executive directors from relevant geographies to our board. As a board, we are pleased with the performance of our people and believe that the incentive outcomes for the MD, CEO, and KMP are consistent with the execution of all of our strategy, overall group performance, and shareholder experience. Finally, I want to thank you, our shareholders, for your support over the year, and I look forward to speaking to a number of you at the conclusion of today's meeting. Thank you. I'll hand back to Jane now.
Thank you.
Thanks, Rebecca. I will now turn to the formal business of the meeting. Before welcoming the discussion on today's item of business, I want to just quickly go over a few procedural matters. As shareholders are aware, no formal vote is required on item one. As I mentioned earlier, the poll is already open for items two to eight. The proxy position on each relevant item will be displayed after the specific discussion on that item. So, to facilitate discussion and voting, I will formally put to the meeting each item of business as set out in the notice. There'll be plenty of time after the discussion of the items of business to complete and submit your vote. I will invite questions about each item of business when we deal with that individual item.
We've received several questions and comments from shareholders in the lead-up to the AGM, which we have considered, and we thank you very much for your input. Many of these questions have been addressed in our earlier remarks. I will just touch on a few questions that were specifically raised. The first one relates to executive pay, including the role of STI and LTI, short-term incentive and long-term incentive plans. Rebecca has spoken about that. I won't go over the detail again. Just to say, the board is very comfortable with the approach we take to reviewing and setting executive pay. Shareholders have also been supportive. We've received strong voting support from investors on the remuneration report since we restructured the way we pay executives in 2018.
As previously outlined by Rebecca, we set total pay at the lower end of our peers, and we see incentive pay as a critical element of remuneration that drives alignment between executives and shareholders, including through minimum shareholding requirements. Our CEO has chosen to take his STI and shares every year since he was appointed to the role. We've also received a number of questions on shareholder returns. To be clear, BlueScope's policy on shareholder returns is to distribute at least 50% of free cash flow to shareholders via a stable dividend targeted at AUD 0.60 per share per annum, with additional returns made via on-market buybacks. This commitment ensures any growth capital competes with shareholder returns. Share buybacks provide effective capital allocation discipline as well as a flexible method of returning capital to shareholders.
In relation to shareholder returns, some investors asked whether BlueScope would recommence its dividend reinvestment plan. Some also asked about bonus shares or rights issues. The short answer is, at this point, we don't have a need for extra capital, but we would, of course, consider these options and others if required in the future. We received questions on the method of payment of dividends. BlueScope has a mandatory direct credit policy for all its Australian shareholders supported by LINK's secure electronic payment portal. This positions BlueScope and shareholders well for the federal government's ongoing phase-out of checks across Australia later this decade. Lastly, we received a question regarding BlueScope's approach to allocating capital to hydrogen and direct reduced iron or DRI technologies.
Our financial framework guides our capital allocation approach, and we have disclosed that we expect to invest AUD 300 million-AUD 400 million between 2021 and 2030 in pursuit of our 2030 decarbonization targets and our 2050 net zero goal. This spend includes the New Zealand Electric Arc Furnace project underway. As covered in Mark's and my remarks, we're prioritising options for the use of Pilbara ores in a DRI and Electric Smelting Furnace ESF process through our partnership with Rio Tinto and BHP. The project is an investment of both time and money, with many people working on it from all three companies, including people in this room. Hydrogen is a more distant prospect, so our investment is small at this stage, as you would expect. Other steel companies, particularly those in Europe, are progressing this development. Therefore, we're focusing on the more prospective near-term technology development for our assets.
One area where we're supporting R&D and tech development for hydrogen iron making is in its use as a reductant for the New Zealand Iron Sands. So, as indicated in the notice of meeting, I intend to vote valid undirected proxies given to the chair in favor of items two to eight. So, let's now turn our attention to item one, which is to receive and consider the annual report, financial statements, and the reports of the directors and the auditor for the financial year ended 30 June 2024. Shareholders and proxy holders are entitled to ask our auditor questions relevant to the conduct of the audit. For your information, we did not receive any questions for the auditors prior to the meeting. So, I'll now take any questions shareholders may have, and I invite shareholders present in the room who have a question to move to a microphone.
If you can please provide your name when called to the microphone. For those of you not here in person, please submit your questions through the online portal or press star one on your telephone keypad if you wish to ask a question. To the floor. Thank you.
Chair, introducing Phil Laird.
Thank you for taking questions. Two, if I may. Firstly, blast furnace number six due in two years. Anything on decarbonization or more efficient operations than the old number six would be appreciated, and that might include capturing gas from emissions. And then I have a second question, but perhaps one at a time.
By all means, ask your second question now, and we can see if I can address both.
Thank you.
Look, any progress in, I'm looking at Scope 2 and Scope 3 emissions when we transport product, particularly from Port Kembla, but going to other parts of Australia. I see a lot of trucks going up Mount Ousley with nice Colorbond, but I also see developments in Moorebank and now Somerton and Sydney and Melbourne with over AUD 1 billion being invested in intermodal rail terminals. And I'm wondering if this is in BlueScope's thinking to make use of some of these nice new intermodal facilities to make use of to lower emissions in the transport of our heavy steel products. Thank you.
Thank you very much. Thank you. On the Blast Furnace 6 reline, it's exciting to hear from Mark that he was inside it yesterday inspecting it. It's a once-in-a-lifetime opportunity, as I understand. And very cool. Very cool, apparently. Yes, I'm very, very envious.
We're spending AUD 1 billion on the reline of Blast Furnace Six, and it's an upgrade as well. So, we do expect it to be at least as efficient as Blast Furnace Five, looking for further opportunity in relation to that. Blast Furnace Five is highly optimized already, I'm sure you know that, but we are building optionality for new tech, like potentially a hydrogen injection and biochar. So, I can assure you that there is continued focus on decarbonization. We have a 2030 target for the reduction of emissions in steelmaking. We've reached that target to date, but we are absolutely resolute in continuing to step up to that challenge. In relation to rail and truck movements, obviously optimizing the supply chain for a range of reasons is fundamental for delivery in full on time to customers.
Customers need products when they order them, and we have worked very hard through Tanya and the Australian Steel Products business to improve DIFOT performance and always look to do that. So, it's part of that optimization of logistics and supply chain. We absolutely agree that rail is very emissions efficient. There have been some instances where we've struggled with floods across the Nullarbor and up through Queensland from Sydney to Queensland. And so, there are some important sort of optimizing challenges that the team undertake every day when delivering for customers. So, absolutely hear what you say about rail, very important part of our logistics chain, and always look to do the best we can for customers. Thanks. Any other questions from the floor? Michael, any questions online?
Yes, we do have some questions online.
The first one we've got here is from Michael Manta from the Australian Shareholders' Association. The ASA holds proxies for 139 shareholders, and we have two questions on this item. The first one is, the recycled metals and painted coil businesses in the U.S. are not meeting expectations. What specifically is BlueScope doing to improve their performance? And the second one is a bit of a follow-up on the previous six blast furnace reline. Is the progress of the Port Kembla number six reline project to date meeting schedule and budget?
Let's just deal with the blast furnace reline, and I think we've answered that one. In terms of the BlueScope Recycling and Materials business, that's a scrap business very important to the efficient operation of our North Star mini mill, where we have three electric arc furnaces.
It's essential to integrate upstream scrap supply into the mini mill, and those acquisitions have been very important to improve the competitiveness and efficiency of North Star. We're very happy with the way the value-adding process is occurring. We always look through the team there to optimize what we're doing. It's a continued work in progress, but we're pleased with the operation in terms of the scrap supply. The BlueScope Coated Products are the paint lines that we acquired. So, we acquired five light gauge paint lines, and we acquired two heavy gauge paint lines across the U.S. We acquired those for the current business, and that has not performed as well as we had expected. We're putting a lot of effort into turning that business around, and Mark referred to that, and I referred to that in my comments.
We have one of our most experienced leaders there in charge of turning that business around. And we have to be patient about that, but we believe we've got the skill and experience and absolute commitment to do that. But more importantly, those paint lines are really important in terms of the introduction of Colorbond steel to the United States. We've shown in the Australian business and in New Zealand business how we've been able to grow value-added premium downstream products, Colorbond steel, Truecore steel. And you can see them everywhere, as we mentioned. They're amazing products. And that's our ambition for the United States. And to do that, those paint lines are very important. So, we'll get them working well. That's absolutely what we do at BlueSco pe.
We feel very confident that what we've done there is the right thing to progress our ambition for the very exciting U.S. market. All is going well. Thank you.
We do have a number of questions here from Peter Corkish, and it was great to catch up with Peter and Gabriel last night in Wollongong. He's looking great. Hope you're watching online, Peter. Great to see you. The first one is around culture and around how is BlueScope reducing harassment and bullying in the workplace? The second question is about renewables. What is BlueScope doing in its transition to renewable energy and particularly using renewable energy at its local sites like the new distribution hub? The third one is about the ACCC case and what is the remaining events in that case?
Number four, we've got what would the impact on BlueScope from the U.S. and Trump's economic policies? And the fifth one is a heritage one, which is about the importance of a historical artifact, the Galloway Steam Engine, which is located down on the number one works at the Port Kembla Steelworks.
Let me start with the last one first because it's really amazing. What you refer to, the Galloway engine, is absolutely fully preserved. It's in a purpose-built facility, and we absolutely propose to showcase it as part of the redevelopment of the Master Plan at Port Kembla. And if you want to know anything about it, Jennifer Lambert here, our Chair of the Audit Committee, was raised by a train driver, as she said, and she knows all about it.
It's another one of those wonderful artifacts around the heritage of this amazing company that we all need to see. It's absolutely our commitment to do the right thing by that steam engine. Very important to our business. Bullying and harassment, a very important cultural question. It's not just a BlueScope question. It's a question for every organization that we're associated with as people. Culture is absolutely crucial. Tone from the top is crucial, but also supported by the right process and systems. We have regular reports to the Board and the Risk and Sustainability Committee and the Remuneration and Organization Committee on systems and processes, the results of employee feedback. We test the speak-up culture in the organization. I'm not saying we're perfect. Mark and his team would not say that either, but we absolutely seek to improve every day we turn up to work.
And our aim is to be confident that the speak-up culture really supports our people to feel free to offer suggestions and to call things out. We have a great record in safety, and we are looking to add to that safety culture a speak-up culture. So, that's very important. The other question you asked was around transition to renewable energy and operations. A lot of talk about renewable energy transition. All of you will know this, but just to dimension it or give context, the transition just in Australia is the largest change in the industrial base of this country that we've ever seen since the industrialisation initially. Huge, huge change. And the amount of renewable energy required is massive. It's multiples of what we had in terms of the installed base load coal capacity.
As that retires, the big challenge is to use the technology that's proven to build that capacity. We absolutely believe we're technology agnostic, but we absolutely believe that whatever renewable energy is built, it needs to be affordable and it needs to be firmed. If you look at the advantage that we have in the United States and that the steel business generally has in the U.S., it's distinguished by its cheap energy. Very significant. While we look for every opportunity to be energy efficient and reduce our emissions at the same time, firmed and affordable renewable energy is really important. As a postscript to that, the transition to a low emissions future is obviously gas, and that's what we believe. Having affordable and available gas is just as crucial. What are we doing about it?
There's a lot of work that we're doing in terms of the installation of solar panels on buildings and looking for opportunities to do that further. We're looking at power purchase agreements for the offtake, using different instruments from solar farms, wind farms, etc. As I said, we're technology agnostic, but it is important that we look to secure our future, and that's what we're doing. In terms of the ACCC, that matter has been to the Federal Court. We appealed it, and we're waiting for a judgment. We're not really in a position to make any further comment at this time. And finally, the impact on BlueScope of Trump's economic policies and tariffs. As Mark and I mentioned, we're very optimistic about our future in the United States.
You saw the markets react positively, very optimistic about what things the Trump policies might mean for the steel industry in particular. It is still unclear what will happen, but we watch and engage actively in the United States. We are well positioned with North Star to benefit. And you heard Mark talk about the expansion to the capacity of North Star, and you heard also about the BlueScope Coated Products paint line. We're looking also at further midstream integration, metal coating, pickle line, cold roll mill. We're still looking at those, but absolutely, not only are we confident about the future of our business in the U.S. because of the U.S. entrepreneurialism and innovation, but also we do believe that the Trump policies will likely benefit the steel industry. Thanks, Michael. I think that's it, Mr. Corkish.
Yes, thanks, Jane. That's all Peter's questions.
We do have some from Stephen Mayne here. We've got three on this item. And I hope you're well, Stephen. And I'd be disappointed if we didn't get a question from you. It wouldn't feel like an AGM. So, on page 163 of the annual report, we list the three big US index funds. We've got BlackRock, State Street, and Vanguard, along with the biggest industry fund, AustralianSuper. As the four biggest shareholders with holdings above 5%, but we only state the number of shares each controls and not the percentage stake. I had to calculate that the Big Four collectively own 97 million shares or 22% of the company. Will you fix this disclosure next year, and how do we directly engage with the Big Four largest shareholders? Are they supportive?
First of all, I'd say that we have a very comprehensive and thoughtful investor engagement program, as you would expect. There are regular discussions that I have and other members of the board with investors. We have a process of engaging with them at least twice a year formally, and then obviously, Mark, David, our Chief Financial Officer, Chris Gibbs, our Head of Investor Relations and others talk regularly with investors. That's a really important part of listening to what's important to people and also communicating why we make the decisions we do and why we believe in the resilience of our company. In terms of the disclosure at the back of the annual report, as you know, Mr. Mayne, that's all governed by the Corporations Act. Investors hold via nominees, which is what we disclose in the annual report. It's obviously common practice.
When an investor holds over 5%, they lodge a substantial shareholder notice with the ASX, and everybody knows when they hold over 5%. That's a requirement, and hence the four that you note. We will continue to review market practice in relation to what we do, but we don't intend to change our disclosure process at the moment. Thank you.
And a follow-up question from Stephen, Jane. We've got how long has Ernst & Young been our auditor? When did we last run a full tender for the audit job, and when are we next intending to tender our external audit work?
Yes. Yes. A question asked sometimes of us around the external auditor. Most importantly, fundamentally, the external auditor gives shareholders the assurance that there is integrity in the quality of our financial reporting and our disclosures. That's their basic role. It's very important.
Ernst & Young have been our external auditor for 22 years. It is a long time, and we have had five lead partners in that time. Each lead partner is required to be independent, and each year we go through a rigorous process to reassess the independence of the auditor because, as I said, the integrity of our financial statements absolutely depends on that. The Corporations Act, as you know, requires lead audit partner rotation every five years and other partners every seven, and we obviously comply with that. We have a policy and a process in place to assess their independence. It's led through Jennifer Lambert, the Chair of the Audit Committee. We are confident in their independence, and we have reappointed them for the current financial year.
We note that the integrated sustainability standards in the next couple of years are compulsory and adds quite substantial sustainability disclosures to our financial statements and annual report disclosures. That's a big change. Important change, but a big change. And so, we're looking at the external auditor in the context of the challenge that's ahead of us in the next couple of years and review it on an annual basis. But in summary, very pleased with the performance of Ernst & Young.
And one final question from Stephen on this item. If you believe the media, we were very important during the first Trump term in fending off proposed steel tariffs that would have hurt Australia. What was our lived experience with these tariffs between 2017 and 2021? And please provide some early commentary on the tariff risk situation during the forthcoming second Trump administration.
BlueScope is a unique steel company. We are an international integrated steel company, and we move our products and people and talent across the globe. And so, we get the best of who we are by exporting and importing the talent and products that we have. Very proud of that. We would not have had the confidence to continue investing in the United States and to continue importing some of our product into the United States, particularly into our Steelscape and business, if we did not have confidence in the operating environment. So, we have found that the U.S. tariffs have supported U.S. prices. You can see that with U.S. steel spreads and Asian spreads. You can see that structural difference between the two of them.
Those prices have benefited the North Star mini mill and in turn have benefited our shareholders if we've returned capital through dividends and buybacks to them. We received an exemption to the tariffs, a Section 232, it's called. We think that was very important, and we have been very careful in making sure that we comply with the terms and conditions of that exemption. In terms of the future, we're monitoring very closely, and it is too early to say, but suffice to say, we are very optimistic about our future in the United States.
Thank you, Jane. And that's all the questions online for item one, and there's no questions on the phone.
And I think there's one more question on the floor.
There is. Chair introducing Nigel Holmes. Thanks, Mr. Holmes.
Thank you for the opportunity to address the board. Yes, my name's Nigel Holmes.
I'm a former employee of the previous company, Australian Iron and Steel, who have done a fitting and machining apprenticeship. I'd just like to say that this is a very important area that I think as a company you need to be responsible in training. I know you've got traineeships, but as I went through it and many others went through that training at the apprentice center at Steelhaven, I feel that some of that assets have been deteriorated. I know it happens. It happens in some of the rest of the departments. You've got training, traineeships. I just want to say that trades is an important area because now we find ourselves in a position where we have to import a lot of trades from other countries when we should be offering opportunities to Australian young people and adult apprenticeships coming through as well.
I just wanted to say that as just something to think about. But also, I'd just like to raise a question and ask a question on what's BlueScope's position on the impending or talked about wind farm off the coast here, considering the shipping movements that happened there, considering the community's concern about the whale movements, and considering the kind of challenging technology that has to be created to make that happen. Has the company got a position on this? Is there already been any talk with the government about this? I'd just like to hear some feedback. And just quickly, I know it's been mentioned about the number six blast furnace, but I didn't hear the answer. Are we on target, and is it on budget?
Let's start with the last. I always remember the last first. Yes and yes. So, on time, on budget.
The first question around apprentices, absolutely everybody in this room, particularly Tanya Archibald, who leads our Australian steel products business, couldn't agree with you more. It's really important to have qualified trades. That was a great question. Good job. Thank you so much for asking, but we couldn't agree more. Absolutely crucial to the future of the company, and there are a number of apprentices in the room today, a number of our cadets. There is a comprehensive program aimed at developing the future trades for the business. We can't operate without them. It's absolutely crucial. One important thing we're looking at, it's an MOU with the New South Wales government to look at a Super TAFE down here. And a Super TAFE, I'm not quite sure what a Super TAFE will look like, but I think it's going to be super. I mean, I didn't mean to dismiss it.
It is actually a really good idea. There is a number of important industry in the Illawarra that require trades. So, I encourage you to speak with Tanya and encourage you to speak with Dave Scott, who runs our manufacturing business. Absolutely, we always need to be challenged to do the right thing by the business in building the right trades and integrating them, looking after people. The second question that you asked, it was in relation to the offshore wind farm, which, as I understand, is not approved. Yes. Look, I think I've talked before about the size of the transition, and the government, both federal and New South Wales governments, are looking at all sorts of ways to develop renewable energy. Social license to operate is a very critical question. From our perspective, firmed, affordable renewable energy is really important. But we are absolutely technology agnostic.
And so, we're aware of the wind farm, and we will watch that development with considerable interest. But at the moment, our view is we need to do the best by BlueScope. So, we look at existing technology that's around existing renewable energy developments, like the Finley Solar Farm. Yeah, solar farm. Solar farm to offset a number of our emissions, I think it's 20%. Yeah. So, yeah, I mean, we're still looking at it, but no active support for anything other than firmed, affordable renewables. Thank you. Thank you. Well, Michael, that concludes the discussion on item one. And I just have one more question. Oh, I'm sorry. Oh, I'm so sorry. It's because I've got my glasses on. I can't see.
Chair, I just want to introduce you to Mr. Amir Ekbote.
I'm sorry about that. I didn't see you. Apologies.
No worries. Thank you very much.
In terms of if I look at the annual report, the earnings per share value has declined for this past year to this year, which begs the question of the productivity within the business. I know that the business is consolidating about 16 different business systems with Microsoft 365, I believe. How is that project going? And given that EY is our external independent auditors and they have acquired the vendor, which is basically implementing BlueScope's systems, but they're US division, not the Australian division, would that be any effect as to the independence of the auditors?
Independence of the auditors, no. In terms of EPS, earnings have dropped. Volatility. In fact, I think, Tanya and Mark, for five or six months last year, the Australian business was seeing spreads, steel spreads below bottom of the cycle.
That's a very difficult environment to operate in, and you can see that our earnings guidance was revised as a consequence. So, it's a relatively straightforward answer to the EPS question. Productivity, of course, is very important, but it is really driven by what's happening with earnings predominantly. You heard Mark talk about the cost and productivity program of $200 million. That's very important. Part of our Financial Framework is to be cash break even at the bottom of the cycle in steelmaking. Absolutely a fundamental principle and a challenge. And in Australia, Tanya's leading that. In terms of the IT systems, lots of foundational work. Sam Scimone, who has joined us here today, has been here for how long, Sam? One year. One year. And I'd encourage you to talk with him. He's across a lot of this.
And we have introduced a global perspective on our systems change and the integration challenges because what you raise is very real. Tech programs are big changes, big cultural change programs. We're putting a lot of time and effort and resources and absolutely planning into those changes. So, as much as you can be, we're confident we have the right people and getting better at how we approach those changes and thinking about the strategic choices we make on vendors, systems, etc.
Thank you.
Thank you. Okay, apologies. I think now there are no further questions in the room, so let's move to agenda item two. I stand for re-election today, and Alistair is standing for election. Details about both of us are set out in the notice of meeting, and each of items 2A and 2B will be voted on separately.
As 2A relates to me, I will ask Ewen Crouch to chair the meeting. Thank you.
Thank you, Jane. And good morning, everyone. Item 2A relates to the proposed re-election of Jane McAloon as a director of the company. Jane was appointed to the board in September 2022 and was actually due to stand for re-election at the 2025 annual general meeting. However, to allow board transition to take place in an orderly manner, Jane determined that it would benefit the company for her to stand for early re-election. The board agrees with this. I confirm that the board considers Jane to be independent and recommends her re-election to shareholders. I would now like to ask Jane to address the meeting.
Thanks, Ewen.
I'm pleased to stand for re-election, and as I said earlier, I'm privileged to be the Chair working with an absolutely outstanding group of board colleagues, including our managing director. I bring over 30 years of business, government, and regulatory experience at senior exec and board levels across the natural resources, energy, infrastructure, and utility sectors. I currently chair EnergyAustralia, just down the road here, and sit on the board of Allianz. As an executive, I worked for BHP, AGL, and the New South Wales government. I've spent most of my career in emissions-intensive industries and have experience working at the intersection of business and sustainability challenges and opportunities across Australia, the U.K., U.S., and Asia. I believe this prepares me well for contributing to BlueScope's future. BlueScope has continuously operated since the 1870s when John Lysaght first came to Australia.
It was one of the first Australian companies to explore the Asian region, building operations as early as 1969 in Malaysia. As the economy grew and expanded in the 1980s to New Zealand and in the 1990s to the U.S. and China, BlueScope confronted and managed through many difficult economic cycles. As a result, BlueScope has built a deep resilience in its people and business portfolio, creating considerable value for shareholders and communities. Today, BlueScope is the aggregation of the courage and vision of past leaders, with today's leaders continuing to build the next stages of growth in Australia, New Zealand, Asia, India, China, and of course, the U.S. BlueScope is truly a unique international steel company. I believe I bring skills and experience that will, with my colleagues, contribute to BlueScope's ongoing future prosperity. Thank you.
Thank you very much, Jane. I now invite questions on Jane's re-election.
Firstly, are there any questions in the room? Thank you. Secondly, Michael, are there any questions online or on the phone in relation to this item?
We do have two questions online, Ewen. First one's from Michael Manta from the Australian Shareholders' Association. The ASA welcomes Ms. McAloon's decision to nominate early for re-election to allow a balance in future director elections. We support Ms. McAloon's re-election. To assist shareholders making informed voting decisions on directors, will you undertake to publish the director skills matrix in the annual report from next year?
In our corporate governance statement, we review every year what market practice is and what we ought to be disclosing to inform the market fully. We evolve the disclosure this year, and we do that on a continuous basis. So I think that answers the question, Michael.
And one from Stephen Mayne.
Could new Chair Jane McAloon please comment on the biggest changes in board process, delegations, reporting lines, or governance that she has implemented since taking over as Chair from John Bevan after last year's AGM, and could CEO Mark Vassella also comment as to whether Jane is more or less hands-on than John Bevan as a Chair? What has changed in the way he communicates with and interacts with the board?
Let me follow Jane's precedent and answer the second question first. I think Mark, in his remarks earlier on today, noted the very positive working relationship he has with Jane, and I don't think anything further is required on that. In relation to the board as a whole, let me just say the transition from John Bevan to Jane McAloon has been seamless. Jane exemplifies everything that we want in a Chair.
She, of course, brings her own lens to the role. The board continuously reviews its practices during the course of the year. We did that this year, and Jane had some extra things to add to that process. So I guess that probably addresses the issue that you're raising, Stephen. Thank you. Are there any other questions online?
No further questions online or on the telephone.
Details of proxies validly lodged on the item are now displayed on the screen. Based on the proxies received, I'd like to congratulate Jane on her re-election as our chair and ask her to resume as chair of the meeting. Well done, Jane.
Thank you so much. Well, that's a relief, isn't it? Item B relates to the proposed election of Alistair Field. As I mentioned before, Alistair joined the board in January 2024 in accordance with our constitution, offering himself for election.
Alistair, would you like to say a few words?
Thank you, Jane. Good morning, ladies and gentlemen. I'm seeking your support to serve as a non-executive director of BlueScope. I'm based in Australia and live in the Northern Rivers region. As an introduction to my background, I've spent the last 30 years in heavy capital industries in senior corporate and leadership roles. I've worked across numerous industries and lived and worked in Canada, Saudi Arabia, and more recently in the United States. I've spent over 10 years in the aluminum business, running bauxite mining operations and aluminum refineries. Followed that with a little bit of work in the logistics business, running Patrick Terminals here in Australia. And then finally, running a global ferrous and non-ferrous recycling company out of the United States.
All of these roles covered the broad spectrum of managing global challenges around the world and various functions to make sure that that governance of these companies was in good order. More particularly, covering major projects, mergers and acquisitions, and global operations around the world, but also going through the various commodity cycles and the challenges that sit with that. My last executive role was Chief Executive Officer of Sims Limited, a global recycling company listed here in Australia. Naturally, I have a deep understanding of the metal scrap industry, and that is very pertinent to BlueScope and its future operations as well. I currently sit on the board of Alcoa Corporation and Fonterra Co-op. I can assure you, as shareholders, that I have the capacity to carry out my duties here. I look forward to working with my colleagues on the board and the management team.
So I thus seek your support to continue to work on the board and work in your best interest. Thank you.
Thanks, Alistair. I'd like to confirm that the board considered Alistair to be independent and recommends shareholders to support Alistair's election. Are there any questions from the floor? Okay. No. Thank you. Michael, any questions online or on the phone?
We do have one online from Stephen Mayne. Could new director Alistair Field and the chair comment on the recruitment process that led to his appointment to the board? Which recruitment firm, if any, assisted with the process? Did the full board interview Alistair as a group? And did they interview any other candidates? Did Alistair also know any of the board of directors before engagement with the recruitment process?
Thanks, Stephen. So our board succession and renewal process is outlined pretty clearly in the corporate governance statement.
And we do that because these kind of questions sometimes get asked, and we feel that if we disclose it fully in the corporate governance statement, that's a good thing to do. In terms of Alistair, he has been on our list of potential directors for some period of time. As I mentioned before, board succession and renewal is planned and thoughtful, and it's not just a process of, "He's a great person. Let's grab them." It doesn't work that way. Long-life, capital-intensive businesses require planned succession. So Alistair's appointment is part of that. You would expect that we use people externally to assist us in that process. That's a prudent, thoughtful thing to do. We'll continue to do that. We're confident in the way we approach what we do, and we're absolutely confident that we have the best person for the role in Alistair. Thanks, Michael.
No further questions online or on the telephone.
Thank you. So that concludes discussion for item 2B, and details of the proxies validly lodged in relation to this item are on the screen. Based on the proxies received, well done, Alistair. Very strong support. I now move to items three, four, and five on today's agenda, which relate to the adoption of our 2024 Remuneration Report and grant of share rights under the company's short-term incentive plan and alignment rights under the long-term incentive plan, respectively to our chief executives. Each of these items will be voted on separately. However, we'll deal with the discussion together. There are voting restrictions which apply, which were detailed in the notice. Item three involves a non-binding resolution to adopt the company's Remuneration Report. Each director recommends that shareholders vote in favor of the resolution under item three.
The directors, other than Mark, recommend that shareholders vote in favor of the resolutions under four and five. I now invite any questions from the floor. Thank you. Michael, questions received online?
We do have one online from Stephen. Did any of the proxy advisors recommend a vote against any of today's resolutions, including this Remuneration Report item? If so, what reasons did they give? Please don't say they are confidential. It is standard for companies to be across this detail on the voting recommendations and inform shareholders where relevant. Also, why not disclose the proxy position to the ASX along with the formal addresses, as companies like Origin, JB Hi-Fi, Nine, Computershare, and NAB now do, to allow for a more fully informed AGM debate?
So let me start with proxies. The second question. We do not disclose those proxy results before the AGM with the addresses.
We clearly and thoughtfully formed a view that that was the right approach for BlueScope. We watch market practice. If it evolves in a way that we think it's in the company's interests and shareholders' interests to do so, then we will do so. But we're not at that stage. In terms of proxy advisor reports, I know you talk about them being confidential. The point is not that. The point is that they're not our reports to disclose. If you want a copy of the proxy advisor reports, you need to engage with the proxy advisors. What I would say is that we meet with proxy advisors twice a year, and we have a constructive relationship with all of them. We work through a number of issues, and we proactively raise, particularly items on the notice of meeting with them, well in advance.
And so we have strong support from the proxy advisors, and we also engage, obviously, with our investors on precisely the same issues. They form their own views, but often some of them use those proxy advisor reports. The short version is that we have strong support for the notice of meeting and strong support for the practices of the company. Thanks, Stephen.
No further questions online or on the telephone.
Well, that concludes discussion on these items. The details of the proxies validly lodged are shown on the screen. So first is the Remuneration Report, and then the grant of shares and alignment rights. Okay. Thank you. Item six and seven relate to the proposed increase in the maximum number of directors on the board and the consequential proposal to increase total director fee pool. We will deal with the discussion on these two items together.
The directors recommend that shareholders vote in favor of item six for the increase in the maximum number of directors. Consistent with the increase in the maximum number, item seven proposes an increase in the fee pool. Given the interests of directors, the board makes no recommendation on item seven. Also, there are voting restrictions which apply to this item, which are detailed in the notice. So I now open the floor to questions, please. Yes.
Chair introducing Kerry Bible.
I just want to make reference to your address. You mentioned that you were disappointed with the safety program, that it needs improving, so not up to standard, and you were working on cost and productivity initiatives. With this in line, I think it actually looks a bad look when you look at page three of your report, which gives the results, and it's quite depressing, really.
And so with all those things in mind, then you say, "Well, we'd like to increase the number of directors to 12, and we want to increase the pool of fees." I think when you perform better, and I know a lot of it has to do with the economy, of course, then you ask, not now.
Yes, I understand. Thank you for that question. So we absolutely thought about all of the questions and ideas that you raised. And ultimately, the board is tasked with acting on your behalf in the best interests of the company: shareholders, communities, employees, the business. And that rests heavily on our shoulders. We absolutely should be held accountable for those decisions, and that's why we stand here today.
We are firmly of the view that to manage planned succession on the board, it is very sensible to allow an overlap between incoming directors and outgoing directors. And you can take from that we have continued planned succession. The last time that BlueScope was in this financial position was in 2015, 2016. The only two directors on the board at that time were Ewen Crouch and Rebecca Dee-Bradbury. And as I said, corporate memory at the board is just as important as corporate memory in management. We are together, board and management, the one team, different roles. And the challenge and support between those two different roles requires corporate memory. And as chair, I'm responsible for managing the board on behalf of investors.
Our clear view as a collective is that it's in our interest to be able to do that in the best interest of the company. We do think that a good size of the board is around 10, and it is absolutely not our intention to pay directors substantially more. That's not what we're doing. What we're doing is what we think is acting in the best interests of BlueScope. Michael, any questions from online, please?
Yes, we have one question from Michael Manta from the ASA. BlueScope sought and obtained approval from shareholders for a temporary increase in the number of directors in 2021 to facilitate the orderly renewal of directors. That approval still has 12 months to run. Why hasn't the board largely completed this transition in the four years that shareholders provided?
It's like saying that you set and forget, isn't it really, that question?
That you set the board, you get the right people on, and then you just stop. That succession stops. It doesn't stop. Succession is a daily process. We're always thinking about where is the company going and what is the right combined set of skills and experience at this board to act in the best interests of the company. That is not an easy task, and if we don't approach it as a steward of the company, then we won't get the right results for the company. So we had the opportunity to meet with Mr. Manta before, and we had a very good exchange. It was really good, and we just disagree on this, and so while we respect absolutely the view of the Australian Shareholders' Association, we don't agree.
And we offered, obviously, the board determined that asking you and Rebecca to serve to the end of their fourth term is consistent with that acting in the best interests of the company. Thanks, Michael.
And one from Stephen Mayne on item seven. When disclosing the outcome of voting on all resolutions today, but particularly this proposed increase in the fee cap for directors, please advise the ASX how many of our 66,000 shareholders voted for and against. Similar to what happens with a scheme of arrangement. This will provide a better gauge of retail shareholders' sentiment and insight into the chronically low retail shareholder participation rate. Other companies such as Qantas, ASX, Suncorp, etc., have already done this during the AGM season.
Stephen, I'm very disappointed. We did it last year, and we'll do it again this year.
That's all the questions online and on the phone.
Thank you.
That concludes the discussion on items six and seven. Details of proxies validly lodged in relation are displayed on the screen. So that brings us to the final item to be discussed today, and we're seeking a further approval for an exemption from the 12-month termination payment cap provisions for a three-year period. We had a similar three-year approval in 2021. It expires at this AGM. The directors, with Mark abstaining, recommend that shareholders vote in favor. There are also voting restrictions which apply to this item. I now invite questions from the floor. Michael, any questions online?
No questions online or on the phone.
Well, that was a quick one. Thanks, Michael. That concludes discussion on the item. Details of the proxy votes on this item are on the screen. Now, Michael, any final online questions that we've missed?
Just doing a quick reset, but nothing.
No more questions.
Thank you. That concludes the formal business of the meeting today. If you haven't already done so, I now ask that you complete your voting paper or vote online. For those here, please place your completed voting paper in the poll collection boxes at the back of the room. The poll will remain open for a further five minutes, and the results will be available later today via the ASX or our website. Thank you so very much. For those of you who made the effort to come here today, and there are many of you, thank you for making that effort and your attendance. We thank you for your continued support of BlueScope. And those here, please join us for light refreshments. We've put on a great spread. I now declare the meeting closed, subject to the finalization of the poll. Thank you.