Good afternoon, ladies and gentlemen. My name is John Mullen, and it's a great privilege as Chair of Brambles to welcome you to the 2021 AGM and to declare the meeting open. Naturally, we would much rather be holding a physical meeting, but this has not been possible again this year. We fervently hope that with the gradual lifting of COVID-nineteen restrictions, this will be the last time that we have to hold such a virtual meeting. Our company secretary has advised me that there is a quorum for the meeting, and I propose to take the notice of meeting as read.
Let me start by introducing your Board. I will then take you through the process for asking questions and for voting. After that, I will present my address before handing over to our Chief Executive Officer, Graham Chipchase. When Graeme, in turn, concludes his address, I'll answer questions from shareholders and then move to the formal part of the meeting. So let me now introduce your directors.
Joining me here in our Sydney office, on my right is Scott Perkins, the Chair of our Remuneration Committee. In London, via VideoLink, we have our Chief Executive Officer, Graham Chipchase and our Chief Financial Officer, Nessar O'Sullivan. The balance of directors are joining us by AudioLink. Firstly, our 2 other Sydney based directors, George Shugby and Tony Froggatt. They are not with us in our Sydney office due to assisting us in managing the health and safety protocols that we've put in place for this meeting.
Tony will retire from the Board at the end of this meeting, and I'll have more to say about Tony's contribution to Brambles during my formal address. Nora Scheinke Estor, our Chair of the Audit and Risk Committee, is attending from Melbourne. From the U. K, we have Elizabeth Fagan and Ken McCall. Tara Hassan joins us from Toronto.
Tara will also retire from the Board at the end of this meeting. And likewise, I'll have more to say about Tara's contribution to Brambles during my formal address. Finally, our U. S. Based Director, Jim Miller, is with us from Santa Clara in California.
Then also with us at our Sydney office is our company secretary, Robert Gerard and Sue Horlin from our external auditors, PwC. Today's virtual meeting is being held by the Loomi platform, which allows shareholders and proxies to ask questions and submit votes on the items of business. Through the Lumi platform, you can ask questions in 1 of 2 ways. First way is to submit a text question, and this function is available now and questions can be submitted at any time. To ask a question, select the messaging tab at the top of the screen.
This will open a new screen, which contains an ask a question box. To type your question into that box. And once you've finished typing, please hit the arrow symbol at the right of the screen to send. Although you may start submitting questions by text at any time from now, I will not be answering the questions until the relevant time in the meeting. The company secretary We'll read out questions verbatim on your behalf, although questions may be moderated and if we receive multiple questions on the same topic, amalgamated together.
We appreciate the time it takes to type in questions. If we move on in the agenda before you have submitted your question, therefore, we will answer it at the end of the meeting. The second way you may ask a question on the Lumi platform is through the audio function. This will enable you to ask a live question orally. To ask an audio question, pause the broadcast and click on the link under asking audio questions.
A new page will open, which contains 2 boxes, one for you to enter your name and the other the topic of your question. Once you have entered these details, click on the Submit Request box at the bottom of the screen. You'll be able to hear the meeting. And when you hear your name called out by Mr. Gerard, you may ask your question.
Although you can submit your question to ask an audio question at any at your request to ask an audio question at any time from now, I will wait until the relevant time in the meeting before inviting you to ask your question. We've also provided the facility to help questions over the telephone. Those that wish to use this facility were asked to pre register by 5 p. M. Yesterday.
As no shareholders or appointed proxies preregistered, we will not need to use this facility today. As I mentioned earlier, Sue Horland from PwC is in attendance and is available if any shareholder wishes to ask her any questions about the conduct of PwC's audit, via audit report, the company's accounting policies or the auditors' independence. You can ask Sue a question using the same functions which I just outlined to you. We'll be holding a poll on all the resolutions before this meeting, and I now open the polls. Let me now take you through how to vote.
If you're eligible to vote at this meeting, a voting tab will shortly appear at the top of your screen. Selecting this icon will bring up a list of the resolutions and present to you with voting options. To vote, simply select from your voting direction from the options displayed on the screen. Your selection will change color and a confirmation message will appear. To change your vote, simply select another option.
And if you wish to cancel your vote, please press cancel. There's no need to press a Submit or Send button. Your vote is automatically counted, and voting can be performed at any time during the meeting until I close the poll. You also have the ability to change your vote up until the time I declare voting closed. Therefore, please submit your votes at any time.
I'll give you a warning before I move to close voting. We're webcasting this meeting, and we will retain an archived version of the webcast on our website. So let me now make some comments on the FY 'twenty one financial year. I'd like to start by saying how proud I am of what Brambles has achieved in fiscal year 'twenty one and the critical role that its 12,000 employees have played in keeping global supply chains open and essential goods flowing during another unprecedented year. I'm also immensely proud that Brambles continues to rank with the world's very best in respect of sustainability, and you will hear more on this from Graham shortly.
Last year, I talked about to significant challenges and disruptions across global supply chains since the outbreak of the COVID-nineteen pandemic. A year on, Brambles continues to respond to unpredictable demand patterns, inflationary cost pressures and unprecedented changes in global supply chain dynamics. Despite these operating and cost challenges, however, Brambles delivered a strong fiscal year 'twenty one result comprising sales revenue growth of 7% on underlying profit growth of 8% and a material increase in free cash flow generation. At the same time, the business invested in the foundations for the Shaping Our Future transformation program announced to the market at Bramwell's Investor Day on the 13th 14th September. Before addressing the transformation program, I think it's important to put the fiscal year 'twenty one result in the context of the initiatives undertaken since 2017 to improve the resilience of the business.
Over the past 4 years, management and our teams around the world have significantly improved commercial terms to better capture the cost to serve. They have made investments across the business to improve network productivity and embed a renewed focus on asset productivity and cash flow generation across the organization. Collectively, these actions underpinned the underlying profit leverage and strong free cash flow generation in fiscal year 'twenty one. As a Board, we acknowledge that it's critical for Brambles to build on these foundations and its world class business model to further strengthen its competitive advantage and identify new sources of growth and efficiency, which will ultimately position the business for long term success. This has never been more important than it is today as the business contends with the challenges and complexities created by the COVID-nineteen pandemic and the rapid pace of change across global supply chains and the retail landscape.
At the same time, we recognize that delivering 1 financial year's results, which meet the financial commitments we've made to you, our shareholders, is not enough. It is consistent delivery of operating leverage and sustainable free cash flow generation, which underpins shareholder value creation over the long term. And these two considerations are at the very core of the Shaping Our Future Transformation program. The Board and our management team are very conscious that while the margins and return on capital generated by Brambles are at high levels compared to many other industrial companies, the flow through to cash generation is not where it should be. This is predominantly due to the lack of digital visibility over the sum 345,000,000 pooling assets moving through Brambles system and the level of capital expenditure required each year to replace uncompensated loss assets.
This will only be addressed by materially reducing uncompensated asset losses through our digitization investment and by achieving sufficient pricing to ensure that the full cost of doing business is recovered. This need to improve cash flow generation is at the core of the new strategy announced at the company's Investor Day, and Graham will touch further on this in his address. I can think of no better way to improve long term returns for shareholders than by resolving this issue, which has dogged Brambles and the industry for many years. Delivering the transformation program will require upfront investment in fiscal year 'twenty two. But these investments are expected to deliver sustained underlying profit growth in the high single digits, translating into consistent growth in free cash flow per share and total shareholder value creation of over 10.5% per annum from for year 'twenty three onwards, which is a material uplift from our 4 year historic run rate.
Graham will outline the initiatives, the investments and I invest the proposition in more detail shortly, but I want to take this opportunity to address the market's reaction to the transformation program. Naturally, we are disappointed at the fall in the share price since the Investor Day and understand that some investors would have preferred to see improved performance and returns without the need for investment. However, I have met with numerous shareholders since the Investor Day, and I've noted broad support for both the strategic direction of the transformation and the need for investment to maintain the long term sustainability of our company. We have a rigorous plan in place with detailed milestones to track progress and clear return and value hurdles to ensure disciplined allocation of shareholder funds. We will be providing you with a clear line of sight into our transformation progress, including the investments we are making and the benefits they are delivering.
This will be done through the detailed scorecard outlined at the Investor Day, which will be updated and reported on every 6 months. Lastly, I do understand that investors want to see continuity and commitment to see a change of this magnitude delivered. I want to confirm that both I, as Chair, the CEO and the broader Brambles organization all collectively committed to seeing this 4 year program delivered in full, supported by a revitalized and united Board with a number of new directors, all of whom are also committed to the same outcome. Turning then to dividend and capital management. The Board declared total dividends for fiscal year 'twenty one of US0.25 dollars per share with the Australian dollar equivalent of AUD0.2732 per share, Frank, at 30%.
This results in a payout ratio for the year of 54%, which is in line with Bramble's dividend policy to target a payout ratio of 45% to 60% of underlying profit after finance costs and tax. During the year, Brambles continued to return IFCO sale proceeds to shareholders through the on market share buyback program. And today, Brambles has bought back and canceled 168,000,000 shares for a total consideration of AUD 1,900,000,000 This brings total proceeds returned to shareholders since 2019 to AUD 2,300,000,000 representing 82% of the £2,800,000,000 capital management program announced to shareholders following the sale of IFCA. Brambles expects to complete this program in fiscal year 'twenty two. Let me now address executive remuneration.
I'd like to start by outlining our remuneration policy. A key underpinning of our policy is the intention to set remuneration at levels that attract, retain and motivate high caliber and talented employees. The overarching structure of our executive remuneration is fundamentally designed to align Executive Rewards with the creation of shareholder value. Essentially, Executive Pay has 2 components: fixed remuneration, which comprises approximately 25% of the total potential remuneration outcomes and at risk remuneration, which comprises 75% of potential outcomes. At risk remuneration, in turn, has 2 elements.
The first is short term incentives, half of which are received in cash and the other half in deferred share awards, which vest 2 years from the date of grant. The second is long term incentive share rights, which bears 3 years from the date of grant. And both short- and long term incentive outcomes depend on the achievement of financial objectives and, in the case of short term incentives, personal objectives as well. An additional objective of our remuneration policy is to align executive rewards with our code of conduct and shared values. As a part of its assessment of the 2021 remuneration outcomes, the remuneration committee carried out an assessment of any behavioral events or incidents which occurred during the year, which might warrant adjustments to all or part of an executive's incentive based remuneration.
I'm very pleased to report, however, that no such incidents or events were identified through that process. Looking ahead then. During 2022, the Board will consider whether any changes to the long term incentive plan are necessary to ensure executive incentives are aligned to the objectives of the Accelerated Shaping Our Future transformation, which I outlined earlier. Detailed consultation with our shareholders will be undertaken, And any changes to the plan to implement that alignment will be put to you, our shareholders, at next year's AGM. In conclusion, In an extremely challenging environment, I believe that Bramble's remuneration strategy is appropriate and that it continues to support our business strategy and rewards executives for the creation of shareholder value.
For those shareholders seeking more information regarding the performance conditions of our short- and long term incentive plans and performance against these conditions in fiscal year 'twenty one. These are set out in detail in the remuneration report on Pages 45 to 64 of our fiscal year 'twenty one annual report. Lastly, Let me now turn to Board renewal. In line with our Board renewal plan, Tony Froggatt and Tara Hassan will retire at the conclusion of today's AGM after 16 years and 10 years of service, respectively. Both Tony and Tyra have made outstanding contributions to Brambles throughout their time on the Board, and we thank them deeply for their service.
Brambles is a first class company, and we expect to be able to recruit 2 1st class directors to succeed Tony and Tara. On behalf of the Board then, I would like to thank our management team and our employees for their hard work and dedication through this exceptional year. Our customers, without whom there would be no brambles, and you, our shareholders, for your continued support for our company. Thank you again. And let me now hand over to our Chief Executive Officer, Graham Chipshase in London.
Thank you, John. Good afternoon, ladies and gentlemen. Firstly, I'd like to acknowledge the exceptional efforts of our teams around the world. They have overcome unprecedented challenges to keep supply chains functioning effectively while delivering on our financial commitments and setting the foundations for our transformation ambitions. We delivered a strong FY 'twenty one result despite numerous challenges associated with COVID-nineteen, Brexit and inflationary pressures across our key inputs of lumber, transport and labor.
Sales revenue increased 7 at constant currency, driven by volume and price realization across our global pallets business and the recovery in our automotive business, which was severely impacted by the outbreak of the COVID-nineteen pandemic in the prior year. To see. Underlying profit growth of 8% was ahead of guidance and in line with our commitment to deliver operating leverage in the year. This performance reflected price realization, supply chain efficiencies and included the benefits of cycling automotive shutdowns in the prior year, one off-site compensation and surcharge income related to increased lumber costs. During the year, we successfully completed our 3 year U.
S. Automation and lumber programs, which combined with pricing and surcharge cost recovery mechanisms, as we have reported another material improvement in cash flow generation with positive free cash flow after dividends of over US340 $1,000,000 or $126,000,000 after adjusting for $215,000,000 of timing benefits, largely related to delayed pallet purchases. Our balance sheet also remains strong with net debt within our investment grade ratings and overall return on capital invested remained well above cost of capital at 17.8%. I'm very proud of Bramble's leading position in sustainability, our achievements in fiscal 'twenty one and our ambitions for the future. As one of the most sustainable companies in the world, We recognize it is our responsibility to drive sustainability across global supply chains.
This is why last year, We announced our intention to pioneer regenerative supply chains and launched our ambitious 12 months journey into this journey. We've taken the first critical step towards becoming a regenerative business by becoming a carbon neutral company in our own operations in all regions. Whilst this is a great achievement, we recognize that the real challenge lies in the activities of our whole supply chain, and we have started collaborative actions with customers, suppliers and external organizations to that end. During the year, our people have ranked Brambles as a top employer in 17 countries across 4 regions, illustrating our commitment to our people and to create an inclusive and rewarding work environment. We remain committed to our sustainability leadership position and supporting our customers to contribute to a more regenerative and net positive future.
To share. While our fiscal 'twenty one performance was strong, our operating landscape is changing rapidly. As economies and societies around the world return to a new normal, we are adapting to the complexities created by the COVID-nineteen pandemic. Ongoing disruptions to global trade and shortages in lumber, labor and transport are introducing costs and challenges across customer supply chains and our own operations. We've seen an acceleration in the shift to e commerce as retailers increase their omnichannel offering to meet consumer demands and changes in how they want to shop for their everyday essentials.
This shift is increasing the level of automation across retail and manufacturing supply chains as customers look to reduce costs across their operations. There is also an increasing focus on the sustainability of goods and supply chains. Customers want a supply chain partner they can trust, someone who can help them operate more efficiently and reduce the environmental footprint of their operations. They want better tracking of their goods and end to end visibility across their supply chains. As the global leader in sustainable logistics, Brambles is uniquely positioned to help customers navigate this rapidly changing landscape.
To do this, we have set the ambition to transform our business and reinvent pooling for the supply chains of tomorrow. With this ambition in mind, we are transforming our business through the Shaping Our Future program we outlined at our recent Investor Day. The program builds on the strength of our sustainable business model and the improvements made across our business over the past 4 years through a twin track approach. Track 1 looks at optimizing our existing business, largely through tried and tested asset efficiency and network productivity initiatives, which have been instrumental to the resilience of our business to date. We have also identified opportunities to streamline processes and build technological foundations to make our organization simpler, more efficient and effective.
Track 2 focuses on building the brambles of the future by accelerating the digital transformation of our business, improving the customer experience and identifying new sources of customer value to further strengthen our competitive advantage. By embedding advanced data analytics capabilities across our organization, we will leverage the vast amount of data we have today to provide our teams with the tools and insights they need to improve asset efficiency and make better commercial decisions. We will also be deploying various forms of asset digitization technologies to gain better visibility of the end to end flows of our pallets and goods through the supply chain. We believe this will provide insights to identify and enable us to address sources of loss and inefficiencies across supply chains, unlocking significant value for us and for our customers. Specifically, we'll be deploying smart asset trials in Canada and the U.
K, which in conjunction with advanced data analytics will be used to develop our future operating model with the objective of optimizing supply chains to deliver benefits to our customers, to retain our shareholders. Through transformation, we will strengthen the long term sustainability of our business and unlock significant operational and asset efficiencies, which will allow us to deliver strong financial returns to you, our shareholders. From fiscal year 'twenty three, revenue growth is expected to be in the mid single digits, driven by pricing and volume growth across all regions. Underlying profit growth is expected to be in the high single digits with consistent delivery of operating leverage, while free cash flow is expected to fully fund capital expenditure and dividends from fiscal 'twenty three. We anticipate a progressive improvement in the level of excess free cash flow we generate over the next 4 years as the asset efficiency and pricing benefits enabled by digital transformation investments are realized.
Implementing our transformation program will involve nonrecurring short term costs in fiscal 'twenty two and 'twenty three and ongoing investments in transformation initiatives over the next 4 years. As John mentioned, the investment profile of our transformation program has been a key focus for shareholders and market participants. I want to take this opportunity to clarify the shape and nature of our ongoing transformation investments, which are critical to improving both pricing and asset efficiency, leading to an improvement in cash returns over the course of the transformation. Over the next 4 years, we'll be investing approximately US400 $1,000,000 into largely proven service center automation and pallet durability initiatives, which adds capacity to our service center network and reduce the repair burden across our pallet ball. This represents approximately $25,000,000 of additional per annum investment over and above The annual average of approximately $75,000,000 invested in similar supply chain initiatives over the past 3 years.
To invest in our business.
Based on our experience, these investments are expected to generate attractive returns and are the types of investments you would expect us to make to support growth, improve the ongoing efficiency of operations and strengthen our competitive advantage. Our digital transformation will require capital and operating cost investments of approximately $620,000,000 over the next 4 years, of which $180,000,000 will be spent in 2022 and 2023 to build out data analytics capabilities and tools across the organization as well as confirming proof of concepts for asset digitization, including the trials in the U. K. And Canada. The balance of the digital transformation investments of $440,000,000 in fiscal 'twenty four and 'twenty five Includes capital and operating costs associated with scaling asset digitization, developing digitally enabled customer solutions and the infrastructure required to support these initiatives.
These investments will be heavily stage gated and dependent on the successful outcome of the trials we'll be undertaking in fiscal 20222023. I want to assure shareholders that we will only commit to these increased FY 'twenty four and 'twenty five investments where value creation is clear and returns meet our strict capital allocation criteria. The investment in data analytics and digital investments will be an enabler to deliver the forecast 30% reduction in uncompensated pallet losses by the end of fiscal 'twenty five. This is the equivalent of eliminating the need to purchase 8,000,000 pallets in fiscal 'twenty five of saving more than $150,000,000 in pooling capital expenditure with the expectation of further potential improvements beyond fiscal 'twenty five. The last point I want to clarify before moving to our Q1 trading performance is around plastic pallets.
We understand investors' concerns about the potential dilution of returns from the introduction of plastic pallets into Costco's U. S. Supply chain. I want to reiterate that our intention is to find a solution where the needs of both Costco and our manufacturing customers can be met, while Brambles maintains the level of return required if such an investment is made. If this is not possible, we will not proceed with the investment.
Turning to our Q1 trading update, which we announced to the market this morning. We generated sales revenue of 1.292 period in constant currency terms. This strong growth was driven by rollover pricing benefits from the prior year and ongoing commercial discipline to recover inflation and other cost to serve increases in all regions. Our volumes were in line with the prior corresponding period as net new business growth of 2%, primarily in the European palates and Australian RPC businesses, was offset by lower like for like volumes in North America, largely due to pallet availability constraints. As part of the quarterly trading update, we also provided our financial outlook for fiscal 'twenty 2.
Following a strong first quarter revenue performance, we now expect FY 'twenty two revenue growth to be between 5% 7% at constant FX rates. With the moderation from 9% growth in the first quarter due to stronger FY 'twenty one revenue comparatives for the balance of this fiscal year. As highlighted, Fiscal year 'twenty two is a year of transformation investment. In this context, underlying profit growth is expected to be between 1% 2% at constant FX rates and will include approximately US50 $1,000,000 of short term transformation costs. Excluding these short term transformation costs, underlying profit growth is expected to be between 6% 7%.
Free cash flow is expected to be an outflow of approximately US200 $1,000,000 including the reverse of the US215 $1,000,000 of timing benefits, largely relating to deferred pallet purchases in fiscal 'twenty one. The fiscal 'twenty two free cash flow outcome is, however, dependent on a number of factors, which are currently material unknowns to the full year outlook and subject to change during the year, including lumber prices, sawmill capacity and efficiency of global supply chains, which are likely to impact both unit pallet prices as well as overall pallet supply by market. Finally, dividends are expected to be in line with our policy to pay out between 45% 60% of underlying profit after finance costs and tax in U. S. Dollar terms.
I'd like to conclude by stating that Brambles is an inherently resilient, high performing and sustainable company. We are committed to transforming our business and increasing our world leading position in global supply chains to benefit our people, our customers and you, our shareholders. Thank you. I'll now hand back over to John in Sydney.
Great. Thanks very much, Graham. Ladies and gentlemen, before moving to the formal part of the meeting, I will now answer questions from shareholders. I remind you that you can ask a question in 1 of 2 ways: 1st, by text, by clicking on the Messaging tab, typing your question in the Ask a Question box and then clicking the arrow symbol to send secondly, by audio via the Loomi platform, by pausing the broadcast, clicking on ask all your questions, typing your name, the topic of your question and then clicking on Submit a Request. Before taking your questions over, I'd like to respond to a couple of questions raised by shareholders prior to the meeting.
This year, we received 2 questions. The first was why did we not send out hard copies of the notice of meeting and voting forms? Well, as a result of changes to the law to deal with the impact of the COVID-nineteen pandemic and in line with the practice of many other companies, we chose to send the notice of meeting electronically. Distribution in this manner is safe, more efficient, saves costs and is good for the environment. Notwithstanding that, however, we did say both in my letter of the 6th September sent to all shareholders and in the notice of meeting that shareholders who wish to obtain a hard copy could do so by contacting our share registrar.
And a number of Shareholders indeed took advantage of that opportunity and were sent hard copies. 2nd question we received was whether we had any plans to acquire any other companies or competitors in the next 5 years. And we're always open to growing our businesses by way of acquisition if the right opportunities arise. However, we are not currently actively looking for acquisitions, but rather are focusing on our shaping our future transformation program that both Graeme and I outlined in our addresses. I would also note that our ability to acquire competitors is subject to the application of local competition laws.
I I'll now respond to any general questions that have been submitted by shareholders or their proxies or company representatives attending this meeting that do not refer to any specific item of business.
Robert, are there any such questions? Yes, Chairman, we have some questions that have been submitted via text. The first question is from the Australian Shareholders Association, and it is as follows: Your Investor Day presentation flagged high single digit profit growth going forward. The Australian Shareholders Association is cognizant of stagnant earning growth in the recent past and comments that ongoing challenges are signaled in North America. In 2022, a 3% to 6% growth rate is forecast for the medium term in Europe.
What is your degree of confidence in achieving high single digit profit growth in 2020 onetwenty 2. We note that temporary price increases helped drive revenues in the Q1 of 2021, 'twenty two.
Thank you for the question. So I have a high degree of confidence to answer the question directly. I think management did an excellent job in the year past, fiscal year 'twenty one, of delivering bottom line leverage and growth of the order of magnitude that you have mentioned. But the key, obviously, for both management and Board was to make that sustainable over the long term, hence the very significant restructuring transformation plan that we're undertaking with Shaping Our Future. And as you heard from Graham, we've got 1 year of investment to getting that program in place, after which We're pretty comfortable that we will be able to deliver those strong improved earnings that we have not seen over the last 3 or 4 years.
So again, I'm very comfortable and confident that management have got a good plan to address that situation. Robert, any further questions?
Yes. We have another question from the Australian shareholders association. Do you see any significant impacts from the current trend of bringing manufacturing back home with a consequent reduction in globalization on your business.
Thank you for that question, too. The simple answer there is There will obviously be impacts and influences on our businesses. World supply chains rejig themselves, but the great majority of Brambles Our pallet distribution is domestic in or in regional areas. It's not international. So we're not seeing A lot of pallets, for instance, transported from Asia to the United States or the like, which is where I think we'll see most of those supply chain changes.
So The answer there is no. I don't see any material impact.
Any further questions? Yes. We have another text question from shareholder Mr. Stephen Main. The question is, why did you not just use a shareholder HIN number or SRN to join this meeting online rather than coming up with a separate voter access code.
Most companies Which use Lumi allows shareholders to use their common HIN SRN number. Was it a boardroom which to insist on this separate VAC or a Brambles call. Fine for the company secretary to answer this question.
Very fortunate. Stephen, nice to hear from you, as usual, and I will definitely defer to our company secretary because I really don't have any idea of the answer to your question. Robert?
Thank you, John. So the Voter Access Code is a Boardroom initiative. Boardroom provides a unique reference code called the Voting access code or VAC to access meetings and the VAC is provided to shareholders with their AGM notification either by post or e mail. Boardroom believes that there is a this is a more efficient method than using an SRN or HIN and it does not routinely include SRNs or try in on shareholder correspondence for both security and privacy reasons. We have used the VAC on all our AGMs since Boardroom became our share registrar in 2019.
And to date, we've had no issues with the use of VAC and I, as Company Secretary of Brambles have been comfortable to use it.
Great. I hope that answered your question, Stephen. Any more questions?
Yes. We have a further question from shareholder Stephen Main, which is as follows. Is it true that a lack of access to timber is contributing to a global shortage of timber pallets? Are Are supply shortages less pressing for our competitor, LOSCOME, with its plastic pallets? Also, is it true big clients such as Amazon are stockpiling pallets, exacerbating supply challenges in Australia.
Have we considered limiting the ability of big customers to stockpile our timber pallets both in Australia and worldwide?
Okay. Thank you, Stephen, for that one. So firstly, yes, there's the shortage of timber has definitely heavily impacted the whole pallet industry. Obviously, Brambles is the market leader, has been significantly impacted as well. And those shortages have come about been driven by the pandemic, of course, and they've been exacerbated by an explosion of construction and other industries using wood, the supply of wood being limited and then on top of that the milling capacity during COVID, a lot of milling plants shut down, which made the situation worse still.
So yes, that is very much an issue, although the good news is it is starting to improve. As the price of lumber is starting to return somewhat towards normal levels. I think the second part of your question was around at LOSCOME. So obviously, I can't comment on what's what takes place in a competitor's business, but I can certainly say that the shortage of wood has affected the whole industry. And to my knowledge, Loscombe has a similar profile of pallet usage, predominantly wood, as our own.
They're not a predominantly plastic pallet user. Last but not least, our customers stockpiling. I think obviously in shortages people do, same as When the COVID started, we all rushed out and bought more toilet rolls. So I think some of our customers have definitely done that, but management have done a very good job of liaising and interacting with customers and ensuring we get as many pallets back as quickly as we can. So while the impact we would all have wished for it not to have been the case, both supplier and customers, It is starting to improve, and I think it'll be a few months more yet before we get back to normal, but we're heading in the right direction.
Any more questions? Yes, Chairman, another question from shareholder, Mr. Stephen Main. The question is Which law firm advised on the constitutional amendment? And are we going to pay their bill given that the item had to be withdrawn after opposition from to see advisers and shareholders.
What percentage of proxies cast were against the proposal? And what were we thinking in proposing provisional amendment that could have allowed all future AGMs to be online only. Whose idea was this?
Well, thank you for that question. So There's been very little cost involved in this. I don't actually know a law firm. If we even had a law firm advise us on that the company secretary would know, but it wasn't a particularly big issue. And I think I'm sure you are aware, Stephen, that quite a number of other companies, including other ones where I sit on the Board put up such motions and which were passed quite easily.
So it's been a trend across a lot of corporate Australia simply to be able to react to the ever changing rules and regulations that come into effect with COVID. But it's not the end of the world. We received some feedback from proxy advisers and some investors, ironically more institutional than retail, but we did receive some feedback that there was discomfort with it. So we thought as no point in prosecuting something that isn't going to get universal support. So I really don't think it's a big issue either way.
To help them answer the question.
Any further questions, Robert? Yes. One further question from shareholder Stephen Main. When disclosing the outcome of all resolutions today, will the chair agree to publicly disclose how many shareholders voted for and against each item, similar to what happens with the scheme of arrangement. This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs.
I'm not sure thank you. I'm not sure I fully understand the question because we obviously publish the votes on all motions put to the meeting. So was there something else, Roger?
No. The Chairman, Under the listing rules in the Corporations Act, we're required to disclose the votes for and against abstaining and the number of proxies, which were discretionary. There's no requirement to disclose the number of shareholders that voted for and against, unlike a scheme of arrangement. And the reason why is that with a scheme of arrangement, you have a 2 test. You have to get a specified proportion of the issued share capital voting and you have to get a specified proportion of shareholders voting.
And that's why in the scheme of arrangement you disclose in that way with resolutions at the AGM, you don't have the latter requirement, which is why it's not disclosed.
Yes, sorry, I misunderstood the question, but hopefully, Robert has explained. Thank you. Anything further?
With no further general questions, Chairman.
Okay. Fantastic. In that case, we will now turn to the items of business. All voting items on the agenda will be proposed as ordinary resolutions. As stated in the notice of meeting, I will be casting any discretionary proxy votes that have been given to me in favor of each of the items of business.
The proxy and direct vote position for each resolution will be shown on the screen. To cast your vote, click on the voting tab at the top of your screen, simply select one of the options. There's no need to hit submit or enter as the vote is automatically recorded. And we will announce the poll results to the ASX later today and also post them on our website. Sarah Jenkins, a Boardroom, has been appointed Returning Officer.
The first item of business is to consider and receive the financial report, director's report and auditor's report for Brambles for the year ended 30th June 2021. There's no vote on this item, but if you have any questions on this item and have not already done so, Please submit your questions now. Robert, do we have any questions?
No, we have no questions on this resolution on this item.
Thank you, Robert. Item 2 asks shareholders to adopt the remuneration report for Brambles for the year ended 30 June 2021, which is contained in the annual report. If you have any questions on this item and have not already done so, please submit your questions now. I outline Bramble's remuneration policy and the structure of executive remuneration during my address to the meeting. Robert, are there any questions on Item 2?
Yes, Chairman, we have one question from the Australian Shareholders Association. We are concerned at the apparent latitude that the board has in adjusting both STI and LTI incentive targets prior to vesting. Will you commit to highlighting any changes made and the rationale for doing so in the annual report?
Thank you for that question. I can assure you that the remuneration committee and then to the whole board Reviews extremely diligently any variance is made to prescribe STI and LTI plans. We go into the review at the end of the year on the assumption that we won't make any adjustments at all. But occasionally, if something arises in the year that is completely outside management's control, either positive or negative. And at that point, the remuneration committee and the Board will review it.
But if we were to make such a change, we would certainly disclose that in the annual report. So you need to have no concerns about that. Any further questions there, Robert? To
make no further questions on this resolution.
Thank you. So the resolution and the direct vote and proxy position are now shown on the screen. Please now cast your votes, therefore, for item 2. Item 3 is the reelection of Elizabeth Fagan as a Director. If you have any questions on this item, have not already done so, Please submit your questions now.
Elizabeth's biographical details are set out in both the notice of meeting and the annual report. Elizabeth has been subject to an assessment process by the Board, and her reelection is unanimously supported by her fellow directors. And I invite Elizabeth to speak briefly on her reelection.
Thank you, John. Good afternoon, ladies and gentlemen. It has been an honor to serve Bramble's Board over the last few years, and I'm very pleased to submit myself for reelection for a further 3 year term. The last 19 months have been some of the most challenging to face Brambles in its long history. And it has reinforced not only how important we are in keeping supply chains open, but how resilient our business is in difficult times.
During this period, as we emerge into a new COVID normal environment, a detailed understanding of the market segments In which we operate is an essential component of the overall skill set for your Board. I am currently Chair of the Board of D2M2, a local enterprise partnership which leads and supports economic growth for the region of Derbyshire and Nottinghamshire in England. This organization has worked with businesses, local authorities, skills and training providers and community and voluntary sector organizations to grow the local regional economy. Previously, I was Senior Vice President and Non Executive Chair of Boots, the leading pharmacy led health and beauty retailer in the U. K.
Boots is part of Walgreens Boots Alliance, the largest retail pharmacy, health and daily living destinations across the U. S. And Europe, with presence in more than 25 countries. Before taking on those roles, I had a 12 year career with Boots, which included Managing Director of the Boots UK and Ireland and other marketing and general management executive roles, both in the U. K.
And across its international businesses, which included initiating and marketing through our digital channels. This was my 2nd period of working with Boots. I started my career with them some 33 years ago in commercial supply and marketing roles. Between these two periods, I with Boots, I spent 12 years in senior executive roles in Marketing and General Management with Dixons Group, a leading electronic and technology retailer in the UK and Europe. My career has provided me with extensive experience in the customer marketing and in the retail sector, both within the UK and internationally.
If re elected, I will continue to bring those skills and my wider business experience to the Board to support the executive to implement the shaping of future transformation of our business. Thank you.
Thank you very much, Elizabeth. So, Robert, are there any questions on Item 3, please?
Yes, Chairman. We have one question on item 3 from Mr. Stephen Main. And the question is, since 2019, ASX listed Treasury Wine's estate has voluntarily moved to annual elections for directors in line with best practice that occurs in both the U. S.
And the U. K. Dual listed companies like News Corporation, BHP and Rio Tinto all do this due to the laws in the U. S. And the U.
K. We, Rambles, would be doing this had we not abandoned our own DLC in 2,006. Given that Elizabeth is a U. K.-based Brambles Director, what does she think about this idea of voluntarily moving to U. K.-style annual election of directors?
And as an old Englishman himself, is the Chair up to up for following the TWE lead? If not, why not? Will he discuss the matter with TWE Chair Paul Rayner.
Thank you for that. I'm sure I like the old Englishman comment. But Look, as I said, Stephen, we're very aware of that trend that's happening in the U. K, in particular. It's not common practice in Australia yet, but we are reviewing the issue, and we will reach a conclusion over the next year or so as to whether We adopt that same policy.
As you know, it's not widely adopted as yet in Australia other than for companies that are either dual listed or have such a structure. Robert, any other questions?
No other questions on this item.
Fantastic. Thank you. The resolution and direct vote and proxy position. I therefore now shown on the screen. Please therefore cast your vote now for item 3.
Great. Item 4 is the reelection of Scott Perkins as a Director. If you have any questions on this item and have not already done so, please submit your questions now. Scott's biographical details are set out in the notice of meeting and the annual report. Scott as well has been a subject of an assessment process by the Board, and his reelection is unanimously supported by his fellow directors.
I therefore now invite Scott to speak briefly on his reelection.
Thank you, John. Good afternoon and good morning, ladies and gentlemen and fellow shareholders. It is both a privilege and a responsibility to serve you as a Non Executive Director of Brambles. Since I joined the Board 6 years ago, I've been part of a team alongside my fellow directors and our management that have been focused on improving both the underlying health of and performance of Brambles. My professional experience and the experience I've gained as a company director in other places have proven relevant to the challenges and opportunities Brambles faces.
The lessons of disruption and transformation As well as how to optimally allocate capital have been consistently in focus. Brambles benefits from a tremendous legacy in terms of the strength of our shared business model, our established base of customers and the network that supports our assets. Successful execution of shaping our future will redefine this endowment and offer Brambles And our customers are more digitally enabled and informed future. This future holds considerable promise for our shareholders. And if I'm reelected, I will continue to work hard to realize the full potential of Brambles for you all.
Thank you for your support.
Thank you very much, Scott. Robert, are there any questions on this one, Item 4?
Yes, Chairman. We have one question on Item 4 from shareholder, Stephen Main. And the question is, CV's matter with public company directors, as does accurate public statements. As the Chair of the Woolworths Audit Committee, why did Scott allow the CEO and Chair's claim that poker machine gamblers only lost £700,000,000 a year on the company's 12,000 machines remain uncorrected for 2 years. Now that the Endeavour demerger is completed, does he agree that the true figure is closer to 1,500,000,000?
Why didn't he intervene and correct the attempt to downplay the ESG damage caused by Woolworths? The answer will determine how I vote on this resolution.
Stephen, you can't expect me to comment on that. This is a Brambles AGM, not a Woolworths AGM. So I respectfully suggest that you direct that question to Woolworths Santos, Scott himself in his capacity, Woolworths Director, not in this forum. Thank you. Any other questions on that one?
No further questions on Item 4.
Okay, thank you very much. The resolution and direct vote and proxy position are now shown on the screen for item 4 as well. So therefore, Please now cast your vote for Item 4. Item 5 Ask shareholders to approve the participation by Graham Chipchase in the Brambles Performance Share Plan for the purpose of ASX Listing Rule 1014. The approval is for a period of 12 months expiring at the 2022 Annual General Meeting.
If you have any questions on this item and have not already done so, please submit your to now. Listing Rule 1014 requires shareholder approval for the issue of securities to a director under an employee incentive scheme. That Brambles Performance Share Plan is an employee incentive scheme. And the notice of meeting now sets out details of how the Performance Share Plan works in the way in which the number of both short- and long term incentive awards to be granted to Mr. Chip Chase are calculated.
Robert, are there any questions on Item 5?
No, Chairman. We have no questions on Item 5.
Thank you. Yes, the resolution and direct vote and proxy position are now shown on the screen. Please therefore now cast your vote for item 5. Item 6 asks shareholders to approve the participation by Nessus O'Sullivan in the Brambles Performance Share Plan for the purpose, again, of ASX Listing Rule 1014. The approval is for a period of 12 months, expiring at the 2022 Annual General Meeting.
If you have any questions on this item and have not already done so. Please submit your questions now. The reasons for this resolution are the same as that for the previous resolution relating to Mr. Chipshade's.
Yes. We have one question on Item 6, which also appears to have been a question from the previous item as well that the heading was not clear. Did any and it's from shareholder Stephen Main. Did any to advise the RIM report or the LTI grant. And can the proxies on each item please be disclosed before the debate So we can ask questions if there has been
a big protest vote. This is ASA AGM policy. We did not receive any recommendations against from the proxy advisers. As to when they release their report, obviously, that's a matter up to them, I'm afraid, not us. You'll have to ask them when and how they release that information.
Any further questions, Robert?
No further questions on Item 6.
Great. The resolution and direct vote and proxy position are now shown on the screen. So please also now cast your vote for item 6. Item 7, ask shareholders to authorize and approve the on market buyback of up to 144,400,000 shares in the company in the 12 month period following the approval of this resolution. If you have any questions on this item, I have not already done so, Please submit your questions now.
When we announced the sale of our IFCO RPC business, we also said that we would return to shareholders approximately AUD 2,400,000,000 of the proceeds of that sale by way of an on market buyback of shares. In my address, I gave you an update on the status of the buyback program. If shareholders approve this resolution, Brambles will be authorized to undertake further on market buybacks of up to 144,400,000 shares for the 12 months to the 19th October 2022. Depending on the share price over the next 12 months, this may mean that the number of shares bought back may be less than 144,400,000 for which approval is sought. In addition, the actual number of shares to be bought back will be determined based on the share price, market conditions and any alternative of capital deployment opportunities which may arise over the next 12 months.
Further details on this resolution are set out in the explanatory notes in the notice of meeting. Robert, do we have any questions for Item 7, please?
Yes, Chairman. We have one from shareholder Stephen Main. And the question is, why go so hard with on market buybacks? The Commonwealth Bank recently did a £6,000,000,000 off market buyback. Have we considered that or do we not have enough franking credits to make it worthwhile?
Why not pay a special dividend or do a capital to turn rather than this drip, drip, drip of ongoing on market buybacks. Can you name any ASX listed company going harder with its on market buybacks and brambles?
Stephen, I think you know as well as I do, there's no right or wrong answer to this. I think it's situation specific. There are a number of ways of returning funds to shareholders by regular dividend, by special dividend, on market or off market buyback. And as you rightfully say, the number of the variables are particularly around franking credits, influence that decision, also the types of shareholders because obviously, overseas shareholders cannot benefit from the franking credits. And obviously, as well with a very large buyback.
It's very unlikely that a company is going to have sufficient pool of franking credits to meet that. So there is no right or wrong answer. I think the Board, in each case, sits down and discusses in detail with management and advisers what is the most effective way of achieving the best return of funds to shareholders, and then we adopt that accordingly. So I think your question about what others do, again, I can't really comment on any other company's policies, but there's the wide variety of those options is visible across the corporate landscape in Australia. Personally, I favor long term continual programs, Special dividends and a one off payment like that, it comes and goes, and then the impact is forgotten quite quickly.
Something like a buyback like we're doing now. It's an effective way of returning funds to shareholders. It also reduces the number of shares on offer, therefore, supporting the share price and also, of course, it means it's a lower amount of dividend has to be paid out in total. On not paying dividend on those shares that have been canceled. So it's a complicated issue and varies each time, but I think we've got the right course of action here today.
Any further questions?
No further questions on this item.
Thank you. The resolution and direct vote and proxy position for Item 7 are now on the screen. Please therefore cast your vote for Item 7 as well. As we announced to the ASX on the 8th October, Item 8, which had proposed changes to the constitution, including authorizing the holding of virtual shareholders' meetings, was withdrawn. Although the purpose of that amendment was to remove uncertainty about the capacity of Brambles to hold virtual meetings where in person meetings were not possible.
A sufficient number of shareholders expressed reservations about the proposal to warrant the withdrawal of the resolution. Robert, are there any final questions?
Yes, Chairman. We have 2 final questions, both from shareholder Stephen Main. The first one relates to the Director reelection addresses. And it is, are these Director to campaign speeches live. If so, well done.
Too many directors opt for prerecorded scripted campaign speeches. What does Scott think about annual election of directors?
Well, I'll turn to Scott to answer that one. What do you think of the annual election?
John, I think you answered the question really well. I think it's something that is obviously up for consideration, but not yet established market practice in our part of the world, but Certainly an issue that warrants consideration.
Thank you. Robert, any further questions?
Yes, one further and final question also from Stephen Main. Well done for publishing a full transcript of past AGMs along with the full webcast on your website. Can the Chair promise that this practice will continue with the lively discussion that has unfolded at this AGM?
Thank you, Stephen. Yes, I think we have no A reasonable desire to change the MOTOSOC brand that we're using. I think we're in good hands with Robert as our company secretary, who's very much across latest trends in all of these things, and we will continue to focus on as much disclosure as we possibly can. I think it's the bottom line, to be as transparent and informative to shareholders as we can be, and we will continue to do that. If that was the last question, Robert, then ladies and gentlemen, that concludes our discussion on the items of business.
And I now declare the AGM closed. Thank you so much for your attendance today. I'll shortly be closing the voting system as well, so please ensure that you have cast your vote on all resolutions. I will now pause just to allow you time to finalize those votes. I'll pause for a minute or so and continue after that silence.
Okey doke. Voting is now closed. We will announce the results of the poll to the ASX later this evening, And thank you all very, very much for joining our AGM today.