Good day, brothers and sisters. My name's Yarra Munya, and I'm a part of the Wiradjuri people, and I'm here to pay my respects to the elders, past and present. I'm also here to pay my respects to Coles as well, 'cause I've been a part of Coles for over five years now, and I keep coming back like a boomerang. Every year, I'm coming back, doing all this stuff. I'm here to think about what it was like here for thousands of years before all this was here, and what it would've been like. It would've been elders telling stories to the younger people in a direction to go forward, and that's what they would've had. They would've clear direction where they were going and what their purpose was to be a part of that tribe.
For me to be a part of Coles, I've seen the work that Coles have been doing around Australia, 'cause I've been to different places like Broome and Darwin and in all different stores. We're over in Broome doing a mini-series over there called Mystery Road with Aaron Pedersen, Deborah Mailman, and we're over there doing that. I remember walking into one of the stores in Broome, and we acknowledged each other, the Aboriginal people that work in that store. I seen their chest go out just a little bit more. It was called. That's what we call direction. It's purpose and where we're meant to be going. It's a bit like a kangaroo and an emu. They don't go backwards, they go forwards.
The time that I've been here with Coles and the leadership of the people that I've met here in Coles, with Steve in particular and the chairman are very strong people that I've had moments with to talk about different things with, culture. They're not just hearing me, they're actually doing things. That's why we're one of the biggest employers of Aboriginal people in the country. I'd like to acknowledge Coles and say thank you for that, for my people. Thank you. What I'm going to do now, I'm gonna vibrate some energy through this yidaki. You guys know it as a didgeridoo. It's actually called a yidaki. The didgeridoo is actually a name by the Irish people, meaning I don't know what it is.
I'm here to let you guys know as being Australians and people that are listening out there, that this is called a yidaki, and it's a part of our culture, and it's a part of your culture because you're here in Australia. We've got other people from around the world that are living here as well. This is the oldest living culture in the world. I'm very proud to be a part of it, and I know that you guys are, so let's just keep the culture going strong like what we're doing here today. Let's keep it all moving forward. Thank you. Thank you. Have a good meeting, a good gathering of people coming together. As I said, let's move forward like a kangaroo and emu. They're the coat of arms of our country, so let's just keep moving forward.
We have, Coles has for a long time, so I believe the best is yet to come. Have a great day. Thank you. Thanks.
Thank you very much indeed, Stan, for that fabulous welcome and wonderful performance and acknowledgment of country. I would like to take this opportunity as well to acknowledge the Wurundjeri people of the Kulin nation, where I am standing today, and to acknowledge the elders, past and present, and to pay my respects to all of them. I also extend particular respect to any Aboriginal and Torres Strait Islander peoples who may be joining us here today at this Coles Annual General Meeting. Ladies and gentlemen, my name is James Graham, and as Chairman of Coles Group Limited, it is my great pleasure to welcome you to this annual general meeting.
This year, we are holding our meeting in a hybrid format, but it is wonderful to be back here at the Melbourne Convention and Exhibition Center for this meeting, something which we haven't been able to do since 2019. I thank all those who've come along today to ensure the success of this meeting. Thank you also to those shareholders, proxy holders and guests who are attending us online using the Lumi platform. As a courtesy to all of those at the meeting present with us, could I ask that you please make sure that any mobile devices are switched to silence so that it doesn't disrupt the free flow of the meeting. Would you also please note the location of your nearest exit in the unlikely event that we needed to evacuate the building, which would be signaled by the sounding of a loud siren.
As we have a quorum, I now declare today's meeting open. I would like to start our proceedings by introducing my fellow board colleagues. Joining me here in Melbourne from my right, at the extreme end of our dais here, is David Cheesewright. Next to Dave is Abi Cleland. Next to Abi is Scott Price. Besides Scott is Jacqueline Chow. On my immediate left is our fabulous Company Secretary, Daniella Pereira. Next to Daniella is our Chief Executive, well-known to everyone, Steven Cain. Besides Steven is Richard Freudenstein, Chairman of our People and Culture Committee. Next to Steven is Wendy Stops, and beside Wendy is Paul O'Malley, who is the Chairman of our Audit and Risk Committee. Joining us in Perth, coming in via video link is Terry Bowen.
Terry Bowen is unable to be physically with us here today, because only having been appointed to the board a few weeks ago, he actually has another annual general meeting this week in Perth. He's joining us though by video link. We're very pleased to be able to welcome both Scott and Terry as new board members only five weeks ago. You'll hear from both Scott and Terry during the course of the meeting because they'll be speaking to us directly at the time of their election. Jacqueline and I will also be standing for re-election at today's meeting.
I also note that in the front couple of rows of the auditorium here in front of me are the members of the Coles Executive Leadership team, and as well, David Shewring from our auditors, Ernst & Young. Later on, and after the formal part of the meeting is concluded, there will be an opportunity for those shareholders present to mix and talk with the leadership team and the board on matters of general interest. The notice of today's meeting has been distributed to shareholders, and I will take it as read. Before we move to the formalities, I would like to explain, maybe I should say I need to explain, the meeting procedures that we will use today with our hybrid format.
As this is a shareholders' meeting, only shareholders, their attorneys, proxies, and authorized representatives are entitled to vote on the resolutions, make comments, and ask questions at this meeting. Consistent with the approach taken at our previous meetings, I will address questions relating to a particular item of business during discussion of that item. For those attending the meeting here in person, as you registered today, you should have been issued with a voting handset or a yellow or white card. Holders of a handset may speak and vote. Holders of yellow cards may speak but may not vote. If you hold a white card, you are a visitor and are welcome to attend, but you are not entitled to speak or vote at the meeting.
There are various microphones located in this room, and once we come to question time, you can ask questions by making your way to the closest microphone, giving your name to the attendant, showing your handset or yellow admission card. If you're unable to make your way to a microphone, please raise your hand and a microphone will be brought to you for you to ask your question. As a courtesy to all shareholders, please also state your affiliation if you are not attending today in your personal capacity. Your name will be announced to the meeting at the time that you're being invited to put your question. This year, shareholders and appointed proxy holders, they also ask both written and live audio questions through the Lumi online meeting platform.
Detailed instructions on how to ask questions were set out in the online meeting guide available on Coles' annual general meeting website, a link to which is available if you click on the Home tab at the top of your screen. To ask a written question online, click on the messaging icon. Select the category your question relates to, and then please type your question in the text box. Click on the small arrow to submit your question. To help with the smooth running of the meeting, we ask shareholders and proxy holders who are participating online to submit your questions now. It'll make it easier for the running of the meeting a little later. To ask an audio question, you will need to click on the Request to speak button at the bottom of the broadcast window and follow the instructions to connect to the audio facility.
If asking an audio question, we recommend you wait until the relevant agenda item is being discussed, as you will only be able to hear and not see the meeting while you are queued to speak. If you encounter any technical issues with the platform, please call our share registry, Computershare Investor Services. The numbers are included in the notice of meeting and also shown on the Home tab at the top of the Lumi platform. All questions at the meeting today must relate to an item of business under consideration and to the company as a whole. If your question is of a personal nature relating to your shopping experience at any Coles Group business, and you are here with us today, please visit the customer booth located in the foyer, where the attendants will be delighted to assist you.
As I mentioned earlier, our executive leadership team will also be available in the foyer following the conclusion of the meeting and will be happy to answer any specific questions you may have. For any questions relating to your personal shareholdings, please make your way to a Computershare attendant, who will be delighted to assist you with any questions you may have. If you are participating online, please contact our customer care number or the Computershare registry number shown on your screen. Any questions of a personal nature relating to your shopping experience or your shareholding will not be addressed during the meeting. We will instead contact you after the meeting to separately ensure you receive the level of individual support you require. We will ensure that there is a reasonable opportunity for shareholders as a whole to ask questions and make comments during the meeting.
However, there may not be time to answer every question or address every comment received. In order to enable all shareholders a reasonable opportunity to be heard, we ask that shareholders restrict themselves to no more than two questions or comments initially. If we receive a number of questions that are similar, we may answer those questions collectively. If the questions are too lengthy, we may need to summarize them in the interest of time. Shareholders were encouraged to submit questions prior to the meeting. Thank you to those shareholders who have done so. We have sought to address some of the common themes in those questions in the formal addresses which Steven and I will make shortly. Moving on to voting. Today's voting will be conducted by way of a poll, and I now declare the poll open. The poll will remain open until the conclusion of the meeting.
For those attending in person, if you are eligible to vote, you would have been given a handset which had a white plastic card inserted in the top of it at registration. Your name should be displayed across the top of the screen of your handset. If you are voting and do not have a handset or your name is not displayed, please raise your hand now and one of the attendants will assist you. For those persons voting at the meeting, you should see the resolutions displayed on the handset screen. To vote, use the blue trackball on the handset to navigate to a resolution. Press the green square button to view the resolution and open the voting options. Then cast your vote by pressing one, two, or three. You can change your selection by highlighting the resolution and pressing one, two, or three.
You can press the green square button to move on to the next resolution or press the red triangle to return to the full list of resolutions. The final selection on your device at the close of polling will be counted as your vote. Please ensure that you return the handsets to one of the assistants stationed near the exit when you leave today's meeting. If you have any issues, please raise your hand and one of the attendants will assist. For those attending online, a voting icon will appear at the top on the left-hand side of your screen. Each proposed resolution will be shown on the screen. Click on the voting icon to submit your vote on each proposed resolution. If you require assistance, please contact Coles' share registry, Computershare Investor Services.
I think I have dealt with the procedural parts leading up to the meeting, and I will now move to the formal part of the meeting. The 2022 financial year was again marked by significant outside events impacting all aspects of the group's business. The extended COVID-19 lockdowns in the first half of the year, the South Australian January floods with associated disruption to the rail networks of Western Australia and the Northern Territory, the impacts of Omicron and its consequential effects on team members' health and absenteeism, and the exceptional flooding in New South Wales and Queensland earlier this calendar year all contributed to add pressure on our supply chain, store operations, and product availability.
Nevertheless, the group has again responded to these unpredictable but somewhat recurring events with full-year sales increasing by 2%, earnings before interest and tax remained broadly consistent with levels of the previous year, despite our incurring COVID-19-specific costs of some AUD 240 million. Profit after tax increased by 4%, underpinning a AUD 0.02 per share increase in our full-year dividends, which took the full-year dividend payout to AUD 0.63 per share. Despite this volatile environment, our strategy remained unchanged, as we continued to focus upon responsibly increasing our investment in efficiency with an increasing focus upon the importance of sustainability across all aspects of the business.
Pleasingly, we have continued to progress the development of our 2 distribution center automation projects in partnership with Witron and look forward to the commissioning of our Queensland facility at Redbank in the first quarter of this coming calendar year, followed by our Kemps Creek facility in New South Wales in the first quarter of the following year. In partnership with Ocado, we are making progress in the development of both our New South Wales and Victorian customer fulfillment centers. At the Sydney facility, we recently had a construction delay, which is currently being assessed to determine what, if any, impact there may be on the commissioning schedule. These four new facilities represent a significant capital investment by the group, which we embarked upon in 2018-19.
As they progressively come online in 2023 and 2024, we are confident that they will directly improve our operating efficiency and enhance the value of our customer offering for many years ahead. During the year, we also continued our Smarter Selling program against our target of AUD 1 billion in total savings to be achieved over a four-year period, ending June of next year. In this last year, we delivered savings totaling some AUD 230 million across our business operations in areas such as energy savings, loss prevention, realignment of the meat operating model, and the automation of the entry and exit for some 45,000 supplier vehicles at our distribution centers, to name but a few.
An important element in our vision to create trust and to build long-term shareholder value has been responsibly and reliably delivering upon commitments to team members, suppliers, and community. In all three areas, we made substantial progress during the year. We supported team members through COVID and beyond with many health and well-being initiatives, and through a continuing focus upon safety, we saw a 14.7% reduction in our safety incident measure, TRIFR, Total Recordable Injury Frequency Rate. Pleasingly, this was accompanied by a 3 percentage point improvement during the year in our team member engagement survey, My Say, which reflects a favorable increase in how team members feel about Coles and their participation. As regards our suppliers, we spent some AUD 31 billion during this last financial year across more than 8,000 suppliers with whom we partner.
In somewhat challenging circumstances, our suppliers worked collaboratively with us to overcome availability constraints, and we have responded to many requests for cost price increases where there were clear signs that raw material and/or operating costs had also increased. These challenges in both availability and cost pressures have continued into our new financial year, where we have seen an increase in the effects of inflation. With nearly every Australian being impacted directly or indirectly by Coles. We continued working closely with a wide number of community groups during the year. Coles, together with our customers, suppliers, and team members, contributed AUD 142 million by way of total community support during the year.
The largest single component of this support is our provision of unsold edible food to food rescue organizations, SecondBite and Foodbank, who partner with charities and community organizations across the whole of the country to feed vulnerable Australians in need. Not only is this a critical step in sustaining our community, it also assists us in meeting our wider goals targeting zero waste, zero emissions, and zero hunger. During the year, we made further progress in lowering our Scope 1 and Scope 2 emissions, where we have targeted a 75% reduction in these emissions by 2030, and that is compared with our 2020 baseline. In addition, through a range of initiatives, we made significant progress on our target of being powered 100% by renewable electricity by the end of our 2025 financial year, now less than three years away.
We've also closely analyzed our Scope 3 emissions, being those emissions indirectly from our extensive supply chain and value chain. Following this assessment and the mapping that we have done, we have developed and submitted a proposal as to how we should address our Scope 3 target to the Science-Based Targets initiative for their consideration and validation. Following receipt of SBTi's response, we will provide details of those targets in the year ahead. Shareholders will be aware that in September this year, we announced the sale of our petrol and convenience business, Coles Express, to our fuel partner, Viva Energy Limited. That sale is subject to the approval of the Commonwealth Government's Competition and Foreign Investment Authorities.
Upon completion, this will allow us to focus upon our omni-channel supermarkets and liquor businesses, while we have been able to ensure customers will still benefit from the continuation of fuel discount dockets, now available digitally, and also the ongoing Flybuys program participation, as well as, of course, ongoing great value through Coles branded products at the Coles Express stations. Upon completion, Viva will own and operate the 710 Coles Express sites, and we will receive a cash payment of AUD 300 million and assigned leases which previously represented some AUD 816 million of liabilities on our balance sheet. Those will be assigned to Viva.
This agreement provides a logical outcome for all parties involved, greater certainty and further investment into the Coles Express business to ensure that it will remain at the forefront of petrol and convenience retailing in Australia. Before closing, I would like to comment about your board. With the exception of the resignation of Zlatko Todorcevski and the concurrent appointment of Paul O'Malley in October 2020, your board has remained unchanged over the last four years since the date of its demerger from the Wesfarmers group in November 2018. In preparation for future board renewal, the board decided that two new non-executive director appointments should be made to facilitate that renewal and to add to the skills mix of the board.
In that regard, as I have mentioned, we are delighted to welcome Terry Bowen and Scott Price, who were both appointed on the first of October and who stand for election at today's meeting. Shareholders will also have noted in the notice of meeting my advice to the board that if I am to be reelected today, I would expect to retire at an appropriate time during the ensuing three-year term. This will further support board renewal and, importantly, the long-term development of Coles. I would now like to invite our Managing Director and Chief Executive Officer, Steven Cain, to provide us with his comments on the year and the business.
In doing so, I would like to record my thanks to Steven, to the executive leadership, and in fact, to the whole Coles team, who make an enormous effort every day throughout the year to ensure that we can continue to meet the standards which you, our shareholders and our community, and our team members expect. Before we hear from Steven, I would like to show a brief video presentation looking back at the year we have had.
Our ambition at Coles is to become Australia's most sustainable supermarket. The 2022 financial year proved to be another challenging year across the country. Thanks to our more than 120,000 team members, our customers, suppliers, and partners, we have worked together to drive change around our key sustainability focus areas of Together to Zero and Better Together. Together to Zero is focused on reducing emissions, waste, and hunger. This year, we signed the last of the agreements needed to meet our target to be powered by 100% renewable electricity by the end of FY25. We trialed our first electric delivery truck. We announced a 10-year, AUD 10 million blue carbon partnership with the Great Barrier Reef Foundation, and we launched the Coles Finest Certified carbon-neutral beef range in Victoria.
This year, we diverted 82.5% of our solid waste from landfill. 94.6% of our Coles own brand product packaging was recyclable in Australia. We continued our long-standing partnership with SecondBite and Foodbank, donating unsold edible food to Australians in need. Better Together sets out how we will work with all our stakeholders to drive positive change. Coles is committed to safety and wellbeing. This year, our Total Recordable Injury Frequency Rate improved by 14.7% on FY21. We were recognized for our ongoing commitment to employ people with all kinds of abilities, and for championing LGBTQI+ inclusion in the workplace and beyond. We achieved our largest single year increase in women in leadership positions. We're working towards increasing representation of Aboriginal and Torres Strait Islander peoples in our workforce.
We supported communities across Australia in many ways, contributing a total of AUD 142 million together with our customers, team members, and suppliers. Ethical sourcing is critical to the long-term sustainability of our business. We continue to seek and address risks of human rights violations and modern slavery within our operations and supply chain through our independent audit program. Coles Supermarkets has an Australian first sourcing policy. We continue to work on farm animal welfare with our producers and RSPCA Australia. This year, we reached a milestone with more than AUD 30 million provided to producers through the Coles Nurture Fund since 2015. These are only some of our achievements in a year of challenge and opportunity. Thank you to all our supporters.
Okay. Thank you. Thank you, Chairman, for those kind words and good morning to the shareholders in the room here today and those watching remotely. It is great to be back in person again for the first time since 2019. We have now completed the third year of our transformation strategy, and we continue to focus on our vision to be the most trusted retailer in Australia and grow long-term shareholder value. Back in 2019, we said we wanted to maintain or grow our market share profitably. That remains the case. COVID restrictions and flood-related availability issues have driven local shopping trends in Australia. These trends are unwinding as availability improves and value becomes more important to Australian consumers.
Going forward, Coles will benefit from an increasing net new store pipeline, as well as expected reduced processing times for all those waiting to come to Australia and the increase in skilled migration that the government has announced. We've set out five differentiators in our strategic plan, and we continue to make good progress against all of them. A good strategy around differentiation needs to be executed at pace to be successful. Pace can only be achieved through a strong culture of engaged team members, which is why engagement and safety are critical parts of our scorecards here at Coles. As we move forward, we endeavor to make decisions to grow long-term shareholder value that include the interests of all of our stakeholders that we serve, including obviously, customers, team members, suppliers, and our community partners. Progress against our three strategic pillars I'll go through now. First up is inspiring customers.
We've launched 1,300 own brand products in supermarkets this year, taking the range to about 6,000 SKUs or products as they're otherwise known. This is the widest range in Australia and provides customers with great value. As customers increasingly look for omni-channel solutions, which is the combination of e-commerce and the experience in store that allow them to shop any time, anywhere, anyhow, we have unified our shoppable app this year. I'm delighted to report that the ratings that we get on Apple for our app have improved from 1.9 a couple of years ago to 4.7 recently. That's 4.7 out of five in case anyone's thinking it's out of ten. I hope all of you have downloaded the app and agree that it's improved significantly over recent years.
We've also complemented the technology improvement with significant increases in capacity, both in click and collect and home delivery, not only in supermarkets, but in our liquor business, as well. With regards to customer loyalty and data, our Flybuys joint venture with Wesfarmers has now access to 20% of all retail expenditure in Australia, and we were delighted that Bunnings and Officeworks decided to join the party, this year. It is clear that customers are earning more points than ever before as they recognize the value of Australia's favorite loyalty program, and our future efforts will be focused on providing a more personalized value experience through Flybuys. We continue to differentiate our liquor offer through customers responding positively to our local ranging and strong growth in our exclusive liquor brands.
Underpinned by more than 420 awards received during the year, including Smithies winning the Australian Lager of the Year at the Melbourne International Beer Competition. That's a big award in Australian beer, as everyone would know. As more of our customers opted to shop online, the liquor delivery on-demand service was expanded to more than 400 stores. Moving on to Smarter Selling, which James referred to earlier, and I won't repeat what he said, but it's a very important program within Coles. This helps us offset inflationary pressures and invest in the future by simplifying what we've done in the past. We continue to tailor our store formats to better suit the needs of our customers, renewing 50 supermarkets in the year, including 12 Format A's, 22 Format C's, and 6 Coles Local stores.
In liquor, a remarkable 191 Liquorland stores were renewed in our new black and white format, while 8 First Choice Liquor Markets and 9 Vintage Cellars were also renewed. To provide our customers with more choice in how they shop in stores while improving team member productivity, we have continued to transform our service offering. With more trolley-assisted checkouts, which you can see on the screen there, we call them TACs, and customer bagging benches to allow customers to pack their own bags if they prefer. Our attention is now turning to Smarter Selling 2, which we'll talk about next year.
In winning together, James covered some of our progress on sustainability, particularly our Together to Zero program, and it was pleasing to be recognized as the number 2 food retailer globally for sustainable business practices in the World Benchmarking Alliance's 2021 food and agriculture benchmark. Disappointingly, however, I'm sure some of you have read the news today that our long-term soft plastic recycling partner, REDcycle, has advised us that they've had to pause the collection of soft plastics, not only from our stores, but nationwide in other people's stores as well. Sustainability is as important to Coles as it is to many of our customers, shareholders, and partners. We are committed to and exploring options for a sustainable long-term structural solution for soft plastic recycling in Australia. Our Better Together strategy is about supporting and celebrating the diversity of our team.
We believe we are more likely to achieve our full potential as a business when our team reflects the diverse customer base we serve, and that everybody feels confident to make a contribution at Coles and give us their diversity of thought and opinion. Achieving gold-tiered employer status for the second year in a row at the 2022 Australian LGBTQI Awards and a top employer for people with disability at the 2022 Disability Confidence Awards. Again, being recognized as the best graduate program in Australian retail and FMCG are acknowledgments of the hard work being done by the team at Coles to truly diversify. We're looking forward next year to hitting 40% of women in leadership across the Coles organization. We're also looking forward to continuing to grow the number of Indigenous team members that we have in the team and at a management level.
In terms of our more experienced team members, I'm delighted that we now have, believe it or not, 4,400 team members who've worked for Coles for more than 25 years. We've got 7,000 team members who are more than 60 years of age and older. I would like to take this opportunity to recognize and thank, in particular, Brenda Palmer, who retired last month after 55 years working for Coles. A remarkable achievement. Many of you will remember she was on the front cover of our demerger booklet back in 2018. I'll certainly always remember ringing the bell with her at the ASX when we launched on the stock market here in Australia. We wish her a very happy retirement. Moving on to our suppliers who are facing supply chain challenges and higher input costs.
I'm delighted to say that we recorded our highest ever net favorable score in our Advantage survey with them, and we thank them for supporting Coles and our customers through some very difficult times, which as we've seen is ongoing. With the communities we serve needing more support than ever, Coles was ranked number 1 for community contribution by an Australian company in the GivingLarge Corporate Philanthropy report, measured as a percentage of pre-tax profit over a 3-year period. Moving on to the financial performance in FY 2022. James has covered our solid profits in the year. Sales in supermarkets and liquor were both up more than 2% despite cycling lockdowns and the related local shopping behaviors we talked about earlier.
Pleasingly, our e-commerce revenues across the group rose by 42% in the year to approximately AUD 3 billion for the first time, with the additional capacity and customer experience of Ocado in Melbourne and Sydney still to come. We continue to generate strong cash flows and maintain a strong balance sheet to fund our future growth ambitions. During the first half, we established a AUD 1.3 billion sustainability-linked loan, replacing existing debt facilities and drawing a direct line between our sustainability program and the cost of capital as we work to fulfill our ambition to be Australia's most sustainable supermarket. Last month, we reported our Q1 performance.
Supermarkets, liquor, and Express sales were up 14%, 15%, and 8% respectively on a 3-year basis, which compares us to before COVID, which means that there's less variability in what's been going on, and those are pleasing results. I would like to thank the Coles Express team for their significant contribution to Coles Group over the last 19 years, culminating in us receiving the Canstar Customer Industry Award this year. We wish them well in their future careers with Viva, and of course, we will continue to support them through our new strategic partnership. In an environment of increasing cost of living pressures, Coles remains committed to delivering trusted value. By continuing to drive efficiencies through Smarter Selling, we can ensure that we are able to maintain a great value offer for customers while growing long-term shareholder value.
Over the past few months, we have introduced dropped-in-lot prices on hundreds of products that will remain in place until the end of January. We've also introduced for the first time Flybuys member-only pricing on top of our programs. Many of you will see that we've brought back our collectible glasses program, which this year is Schott Zwiesel glassware from Europe, all of which provide differentiated value at Coles. Looking ahead, we are optimistic about the upcoming Christmas period as Australia comes back together again to celebrate time with family and friends. We have curated our most sustainable Christmas range ever, which is focused on easy entertaining for a variety of budgets.
In terms of community, we are currently actively supporting Movember, and I note that one of our ELT members in the front row is wearing a new mo, so say hello to him later. We are soon launching our second big Christmas appeal with AUD 2 tokens at the checkout to cater for the most vulnerable Australians who are doing it tough. Looking to next year, our new Witron and Ocado automation facilities will make 2023 one of the most transformational years in Coles' long 108-year history, which provide long-term, game-changing supply chain efficiencies and a world-class online customer experience for many years to come. Coles is now a better business than before COVID. We are more resilient, we're more agile, and now classified as essential.
We are making significant progress on our strategy and our increased investment in the business. The good news is the best is still to come. I would like to thank our customers for choosing Coles, for their patience while we in the food industry navigate the various and almost continuous availability challenges. I'd like to thank our team members for their dedication and support of each other and the communities that we live in, our board for their informed and considered guidance, thank you, and for the executive leadership team, their tireless enthusiasm for sustainably helping all Australians to lead healthier, happier lives. Finally, you, our 448,000 direct shareholders. Thank you for your continued support.
Before handing back to the chairman, I would like to share the new Dropped & Locked pricing adverts that you may have seen, and also the new Christmas Easy Entertaining advert. Thank you.
At Coles, we've already locked in the prices on hundreds of products that Aussies love to help keep the cost of living down. Now we're dropping the prices on lots of things and locking them in until January 2023. The prices of your favorites dropped and locked, not for days or weeks, but months. Thanks, Denise. Keep an eye out for Dropped & Locked prices across the store at Coles, because prices you can depend on, that's value the Australian way.
Knock, knock.
Just see those 3 birds flying in the wind, winging their way.
Hello.
Coming home. It's lovely weather for a sleigh ride together with you. Ding-ding-ding-ding-ding-dong-ding. Ding-ding-ding-ding-ding-dong-ding. Hey, wow. You made it.
No, no.
Up in the sky.
Australia is back together this Christmas. Whether your Christmas is small or big, at home or on the beach, Coles is making great value entertaining and gifting easy, so you can spend more time with the people you love.
Our cheeks are nice and rosy and comfy and cozy are we.
To Sunny.
Come together like birds of a feather would sing. Ding-ding-ding-ding-ding-dong-ding.
That's value the Australian way. At Coles.
Ding-dong-ding.
Well, to all of those of us here, I think we now feel quite hungry. Thanks very much, Steven, for your address and update on how the business is performing. I will now turn to the formal agenda items of today's business. The notice of meeting set out information regarding items for consideration, and I will introduce each item of business separately and then invite questions and or comments for that item. At each instance, to best manage the interface between questions in the room and those on the online Lumi platform, I will first ask for questions from the floor. I will then address questions received via the Lumi platform, firstly addressing those in writing and then those from the audio facility. Sally Fielke, our General Manager, Corporate and Indigenous Affairs, will introduce the questions received via the Lumi platform.
For items two to five, following discussion, details of the proxies and direct votes received for that item will be shown on your screen and handset. I will then ask shareholders and proxy holders to vote on the item, noting that you may have already done so. As set out in the notice of meeting, I intend to vote all available undirected proxies held by me as the chairman of the meeting in favor of items two to five. If you leave the meeting early, please ensure that you have submitted your votes. Voting on all resolutions can be done in advance via your handset or online and at any time until the poll is closed immediately before the conclusion of the meeting. Tim Huynh from Computershare will act as Returning Officer for the poll and will oversee the counting of the votes.
The final results will be made available after the meeting to the Australian Securities Exchange and will be displayed on our website. I now turn to the first item of business, which is to consider the financial report of the company and its controlled entities and the reports of the directors and auditor for the year ended 26 June 2022. These reports were included as part of the annual report and published on our website. While there is no requirement to put this item to a vote, there is an opportunity for shareholders to ask questions relating to the company's financial report and the reports of the directors and the auditor. As mentioned earlier, Mr. David Shewring, representing the company's auditor, Ernst & Young, is also present with us and is available to answer questions in connection with the audit.
I would now like to invite questions or comments from shareholders regarding the financial report of the company and the reports of the directors and the auditor. Are there any questions? Microphone one.
Mr. Chairman, I would like to introduce Mr. Stuart Burns from the Australian Shareholders' Association.
Mr. Burns, very nice to have you with us, and as always, good to enjoy the support of the Australian Shareholders' Association.
Thank you, Mr. Chairman. On behalf of the Australian Shareholders' Association members, we have three questions. The first pertains to the factors that led to the divestment of the Coles Express business. Could you explain further on the factors that led to this step?
Thank you, Mr. Burn. The Coles Express business has been part of the Coles Group for around 20 years. During the first half of that period of time or a little more, it was a joint venture between really Shell, owned by the Royal Dutch Shell Company from the United Kingdom, and the Coles Group. Over the time, the environment and the trading of petrol and fuels around the world has changed quite a bit. You've all become aware and familiar with many changes in the availability of fuel and the pricing points of fuel. In 2018, when Coles was demerged from the Wesfarmers Group, shortly thereafter, an opportunity arose to restructure the arrangements between Coles and the Shell-branded fuel.
By that time, Shell actually had been the ownership of Shell had been transferred to another company called Vitol, which is a United Kingdom company, and it had set up an Australian subsidiary called Viva. The opportunity that emerged in early 2019 was to change the contractual arrangements between Coles and Viva, the provider of the fuel. Prior to that time, Coles had set the price for fuel at the fuel pumps every day. It was seen that having regard to the volatility of the fuel and the fact that Coles had no control over fuel prices, it was perhaps more appropriate for Coles to facilitate the sale of the fuel by providing the team members and manning and operating the Coles Express shops attached to each of our 710 outlets.
What we decided to do in 2019 is that we transferred the responsibility and price setting of fuel to the fuel provider, Viva. Coles, from that date on, operated as an agent of Viva's to facilitate the sale of fuel. Coles ran, operated, and provided all of the product to the Coles Express stores. Subsequently, an opportunity emerged to perhaps take the next and most logical step in terms of the long-term development of the business of Coles Express. That was to recognize that as Coles still had no real engagement in the fuel industry other than its manning and operating and servicing customers through Coles Express, it was seen as an opportunity to transfer the permanent ownership of the fuel business of Coles Express to Viva Energy.
As a result of negotiations with Viva Energy, we have been able to put in place arrangements which we think provide a very comfortable and logical outcome for all participants. Viva will take over all of our 710 sites. They will rebadge those sites over a couple of years. They will move from being called Coles Express to a name chosen by Viva. We will continue to provide the support to the shops and stores at the Coles Express outlets. We will continue to provide our best Coles products to support that endeavor. Viva, who are partners and have been partners with Flybuys, will continue to operate the Flybuys program, so redemptions and earning of points can continue to happen for customers using the Coles Express service stations.
The 4 cents per liter shopper docket will continue to be provided by Viva to Coles customers. Mr. Burns, we see this as a very attractive outcome. We will receive a cash payment of AUD 300 million. We will no longer have the lease liabilities attached to the 710 stores and facilities. Those will be transferred to Viva. Customers will be able to enjoy the continued operation of the Coles Express stores progressively rebranded and to be able to still enjoy access to Coles product through those stores.
Mr. Chairman, our second question regards data integrity. Can you please advise the steps that have been taken by Coles to ensure that customers' data is maintained and will not be released by hackers?
As you can imagine, Mr. Burns, this is a fairly topical matter of discussion in all large Australian and global groups, where customer information is an important part of business operation. Coles is very familiar with the importance of customer data and ensuring the integrity and protection and confidentiality of that data. This is something which has been in place for so long as Coles has been providing its services and an ability to collect customer information which is of value to the customers and to Coles. We have a very well-established program at Coles. We have a situation where we have a five-year technology program. That technology program is reviewed annually by the board. The technology program is independently evaluated by experts in the field.
We have, over the last several years, significantly increased our investment in the focus of ensuring we were doing the most we could do to protect our data that we have from any third-party cyberattack. In fact, over the last three years, we have almost doubled our investment in the cyber area in order to ensure that our technology was secure, our processes were secure. In addition to our review, we also have an internal and external audit of those facilities. We are on constant red alert to the risks, but we are constantly investing, testing to ensure that we can maintain the security of the data which we have within the Coles business. Are there any further questions from the floor? If there are none, Sally, are there any questions online?
Yes, Chairman. In advance of the meeting, we received several questions regarding Coles online sales. Several shareholders have asked, what percentage of the sales in Coles is through online, and is there any plan to increase this percentage?
Thanks very much for that question. I think Stephen referred in his address to the successful growth of the online business. I think in last fiscal year, that is the year ending June of 2022, our total online sales grew by 41% to AUD 2.8 billion. This is encouraging in terms of the commitment that we made in 2019 to significantly increase our investment in the online infrastructure so we could be more efficient in online. In the year that has just passed, the total sales from our online activity represented some 7.9% of our total sales. This is way in excess of the levels that were there when we embarked upon the investment into our online strategy in 2019.
We believe that it's really important for us to be able to offer our customers the ease of access at any time, anywhere. Part of that commitment is to ensure that whether the customer wants to shop in store, whether online at a time of their convenience, if we can do the delivery to their home, if we can make the delivery available through click and collect, if we can improve the timeliness of those arrangements, these are all part of the growth of our online strategy. If you look globally, I think you see that around the world, online, across all areas of retail, continues to grow, and we hold a very positive view for the long-term investment and commitment we've made in that area. Sally, are there any other online questions?
In advance of the meeting, we also received several questions regarding fuel prices. The questions relate to why Coles Express fuel stations have higher fuel prices than its competition in surrounding areas, and how this impacts on the overall Coles branding.
Well, Sally, I think I mentioned in response to Mr. Burns' question around the sale of Coles Express, that what we've seen over recent years is a change in the supply chain of fuel, and there is certainly volatility in the price movement of fuel. We all see that as we drive around Australia and at different times go to the service station to refill our car. The price setting, though, as I mentioned earlier, since March of 2019, all price setting of fuel at Coles Express stations has been set by Viva, by Viva Energy, the supplier of that fuel. Our role has simply been to facilitate the sale, to make sure that the customer interface is as smooth as it can be.
The separation which we have recently announced in terms of the sale of the Coles Express business, I think ultimately leads to the most logical outcome, that is that Viva, as the fuel supplier, will be entirely responsible for the fuel operation of those service outlets, service stations and the price setting, and we will be focused on our omni-channel retailing, which is the area of our expertise and is the whole purpose of our making sure that we're delivering value to customers, because as Steven said in his address, it's so important that we are always offering value and quality to our customers. We think that in our omni-channel food and liquor business, that's where our expertise lies, and that's where our focus will be going forward.
Thank you, Chairman. The next question comes from Miss Athena Pazzoli. She asks: The number of customers at Coles in my area has dropped a lot. It started dropping off at the same time that vegetable plastic bags were banned. This was done so by Coles following orders from the government. It is bad for business to ignore the sanitation and health of Coles customers. Plastic bags around broccoli is healthier than placing it onto a dirty trolley or recycled dirty bag. Will you stop this policy?
Oh, thank you for the question, Ms. Pazzoli. The issue of packaging, which is underlying I think your question, is central to how we operate our business every day. In food, it's clearly important that we protect the safety of food, and we recognize that, and we work diligently with our suppliers to try and find ways to keep product safe. We're also concerned that the product has the best possible shelf life that we can provide the product with. Because if we have the best shelf life, we'll have minimum amount of waste, and we're all concerned to minimize waste. In parallel with that, we know that there are challenges across the whole of our organization and the whole of the community to minimize plastic which would otherwise end up in landfill.
What we have tried to do is to invest in different ways to use more and more recycled product. Steven mentioned earlier the amount of commitment that we've got in our own brand area to have, I think 94.6% of all own brand product is packaged in product which is either recyclable, reusable, or compostable. The challenge we have is to make sure that we keep products safe, we provide the optimum life, shelf life to the product, and we minimize any risk of the loss of use of the natural resources of the world. We don't want to add to environmental issues. We are very focused on sustainability, living responsibly.
We're balancing these issues all the time, and what we're hoping to do with all of our customers is to create that sense of trust that they know when they come to Coles, they can trust in terms of the price, the quality, the commitment to sustainability. We feel that if we balance all those items, we will in fact get more customers and more support. Ms. Pazzoli, I'm sorry that in your area you feel that there's been a loss of customers participating in the Coles store. I'm sure that our local store manager would be more than interested of understanding that background.
If we have that information available, we'll be certainly looking into whether there are any incidental other issues that we could pursue to ensure that our commitment to our customers' value in sustainability and price is uppermost, that people know that they can trust Coles.
Thank you, Chairman. The next question also comes from Ms. Athena Pazzoli, who asks, "Does Coles have a plan B when it is accepted that climate change caused by man is nowhere near the levels that the renewable industry is claiming? Can you implement a plan B when opinions change?
Well, thanks, Ms. Pazzoli. The issue is clearly one where the world as a whole is focused on targets, and it goes back, I think, to the original Paris Agreement setting those targets. What we've done is to say, "Well, what can we do in our role in order to ensure that those targets are realistic and we are able to meet our commitments to them?" We have a plan A, and I have to say our plan A is pretty detailed. If you look at the elements of our plan A, the Scope 1 and Scope 2 emissions, we have said our objective there is to lower those by 75% by 2030 compared with a 2020 baseline. We have specific initiatives and steps that we can see will ensure that we can reasonably achieve that outcome.
We don't make those commitments lightly. We make those commitments 'cause we know the importance of those in terms of our operation and how everyone who is looking at us thinks about our commitment to deliver and achieve that commitment. On the second area, which is relevant to emissions strategy, is the We use a lot of electricity in our business, primarily because of refrigeration and the refrigeration needs a lot of electricity. We have committed to having all of our electricity by 2025 coming from renewable sources. We were very early on into entering into commitments with new solar farms, so new solar farms could be built to supply renewable power to the grid.
We've entered into arrangements in Queensland with CleanCo, the government renewable energy provider, to underpin what will ultimately be about 90% of our total Queensland electricity requirements will come from CleanCo. We have entered into arrangements with wind farm operators. We've got all sorts of commitments which give us a real sense of confidence that we will deliver the targets that we have set. Now, we still have the work to be done, and we will be measured by all of our stakeholders in terms of our achievement of those. I'd have to say, Ms. Pazzoli, that at the moment, we feel that our plan A is pretty robust, and we feel very positive that we will deliver in accordance with our commitments.
We have one final online question, Chairman, again, from Ms. Athena Pazzoli, who has asked for a clarification around what Coles means about realignment of our meat operating model.
Thanks, Ms. Pazzoli. This is obviously an important issue which has also been referenced in terms of a change that we made during the 2022 financial year. Most of the large participants in the supermarket industry in Australia provide their meat in what we call ready meat, that it's been prepared off-site. It's available in quality and price points that are going to be suited to the customer. We have invested over the years in large, really state-of-the-art, very efficient facilities to try and ensure that the meat products that we can offer are of the highest quality and provide the widest range in accordance with our customer requirements.
As part of that, over time, less and less live active cutting of meat inside the store has occurred because we've done all of that more efficiently with less waste, more effectively outside the store. There was only a very small element left where there were some stores where you would go to the store and you would still have the meat potentially cut in front of you. Under this arrangement, all of our meat Australia-wide is now prepared off-site and prepared in a very safe way and a way which is designed to ensure we meet the quality, standards, longevity of product that our customers expect of us. That was the final step of the change that we made during 2022, and that brings us in line with the industry practice of other supermarket operations.
Thank you, Chairman. There are no further online questions under this item.
Thank you, Sally. I think I do. There are no further questions. I'll just then check. Are there no further questions in the room? Okay, thank you. If there are no further questions, that ends the discussion of item one. We'll move on to item two, which is in component parts. The first item is 2.1, and this item relates to the election of Terry Bowen, who I mentioned earlier, is joining us from Perth today. Terry was invited by the board to become a director of Coles Group Limited, following what was really a very detailed search for non-executive persons who we felt would be particularly suited to the requirements of Coles Group. Terry was appointed on the first of October of this year.
In accordance with the company's constitution, Terry offers himself for election today. The text of the resolution to which item 2.1 relates is now displayed, and Terry's details have been set out in the notice of meeting. I will now invite Terry to address the meeting, but bearing in mind that Terry is not with us, he'll be coming to us by video link.
Well, thank you, Mr. Chairman, and good morning, ladies and gentlemen. I became a director of Coles Group on the first of October, and I seek your support for election at today's annual general meeting. I believe I have a range of skills and experience that will enable me to add value on the Coles board. In a career spanning over 30 years, I've been fortunate as a full-time executive to work across a diverse group of some of Australia's leading companies. This has included 2 decades of experience serving on the leadership teams of Wesfarmers Landmark, Jetstar Airways, Coles Group, and Wesfarmers Limited as finance director, and Wesfarmers Industrial and Safety as its CEO. During this time, I developed strong skills in finance and accounting, strategic planning, mergers and acquisitions, and operational management.
Significantly, over my last 10 years as an executive at Wesfarmers, I also gained strong retail experience and, in particular, good knowledge and understanding of the Coles Group of businesses. During this period, I served as Coles' finance director immediately upon its acquisition by Wesfarmers in 2007 through to 2009, or as part of the leadership team through the early part of the Coles business performance turnaround. I then served as Wesfarmers' finance director from 2009 to 2017, where I maintained broad oversight of all of Wesfarmers' divisions, which included Coles as a large and important part of the Wesfarmers group, as well as other significant Australian retail names. Since leaving Wesfarmers, I've had 5 years non-executive director experience, serving on the board of BHP since 2017 and Transurban since 2020. In addition to providing part-time oversight and guidance on the operations group of private equity firm BGH Capital.
Collectively, I believe all of these experiences combine to provide a strong foundation in many areas that are important to the Coles board and management team. Being based in Western Australia, I also provide increased geographic diversity to the board. To conclude, I'm excited in the opportunity to bring my skills and experience to the Coles board. I confirm that I have the time available and would be honored to receive your support today. Thank you, Mr. Chairman.
Thanks very much indeed, Terry. I should say that despite Terry having to be in Perth today for his other board commitments that were put in place well in advance of his joining the board of Coles Group, Terry was here as part of the board meeting and the discussions with the senior leadership team on Monday and Tuesday of this week. I greatly appreciate his participation. The board, other than Terry, unanimously recommend the election of Terry Bowen, noting that Terry brings extensive financial and commercial acumen of direct relevance to the Coles Group. I would now like to invite any questions that any shareholder or proxy holder may have in relation to this item of business.
As I did previously, I will start with, are there any questions from the floor? Microphone one.
Mr. Chairman, I would like to reintroduce Mr. Stuart Burns from the Australian Shareholders' Association.
Thank you, Mr. Chairman. As previously discussed with Coles, the ASA has difficulty with the published skills matrix since many skills are possessed by all directors and no skills have fewer than five skilled directors. It's hard for us to assess if a new candidate plugs a gap in Coles' skill base. Can the chairman ask Mr. Bowen to expand on which particular skills he brings to the board, and he has done this to a partial extent, which boosts the overall capacity of the board, and whether his current suite of directorships will leave adequate time for Coles work?
Well, thanks very much indeed, Mr. Burns. Thank you also, as you noted, for having raised that item with me previously. As far as the skills mix is concerned, I think I'm a bit like you, Mr. Burns. I'm not quite sure I always get as comfortable with how it all comes together. It is something which we feel is appropriate to try and draw out the range of background experience that each and every one of our directors has. It is an area where I think all major public companies now provide a skills mix summary as part of the annual report. It is something which we will continue to work upon. The purpose of it is not to be procedural.
The purpose of it is to be helpful in providing relevant background criteria that a director who comes to the Coles board may specifically bring. In terms of the makeup of the board as a whole, and this goes to your question as to the skills base of any particular director, and in this case, Mr. Bowen, we look at the suite of background experience that each director has. One of the advantages of a board like Coles is that we have been able to attract people who have had very different experiences, but all experiences which have relevance to our operation, the nature of the assessments we're going to have to make, the decisions we're gonna have to make. I think in Mr. Bowen's case, we have a really special opportunity, which is hard to find in an Australian environment.
Not only do we have a person who, by his own professional executive background, has demonstrated a leading role in so many different organizations in finance and in commercial development, but he has, as he noted in his address, he spent two years between 2007 and 2009, actually as the finance director working full-time in the Coles business. Now, the hardest thing in Australia to find is people who understand how the business of the scale and complexity of Coles across our food and liquor businesses, the complexity of that is beyond that of almost any other organization in Australia other than one.
Given that one tends to either be red or green in this country, Terry's background experience actually means that not only are we acquiring someone who's got the breadth of commercial judgment, the recognition professionally and in the whole ASX community of an outstanding understanding of finance, but we have a person who really understands the levers that are available to be moved to impact the way in which our business operates. We feel extremely fortunate that we've been able to get that blend of outcome. As to time, Terry himself in his address referenced that he wouldn't have taken on this role if he hadn't been able to devote the time and the resources that are necessary to be absolutely diligent.
I have to say, one of the pleasures of the role I have is working with the whole of this board, all of whom are busy. It's a funny thing, if they're not busy, then their capacity to add value is diminished because it is the breadth of that experience which really comes together to make their contribution so valuable. We are 100% happy with Terry's joining the board of Coles Group Limited. His professional background, his commercial insights, and his availability, we think, will be a great asset for this company going forward, and it's the reason why every one of the directors other than Terry recommends in favor of voting for Terry Bowen under resolution item 2.1. Are there any further questions from the floor? If not, are there any questions, Sally, online?
Chairman, there are no online questions under this item.
Okay. If there are no questions now remaining, we have finished the discussion on this item. The details of the proxies and direct votes received in relation to this item will now be displayed on the screen. Please now enter your votes for item 2.1 if you have not already done so. Moving on to item 2.2. This item relates to the election of Scott Price as a director of the company. Scott was invited by the board to become a director of Coles Group Limited following a detailed non-executive director search and was appointed to the board effective 1 October 2022. In accordance with the company's constitution, Scott also offers himself for election today. The text of the resolution is now displayed, and Scott's details are set out in the notice of meeting.
I will now invite Scott to address the meeting.
Thank you, Chairman, and good afternoon, shareholders and guests. As a fellow shareholder of Coles, I'm excited by the strategy of this great company and the opportunity to join this outstanding business and seek your support as I stand for election for my first full term on the board. For over 30 years, I worked in the consumer goods, logistics, and retail industries. At the beginning of my career, at Coca-Cola, I worked in four countries, including a memorable stint here in Australia. I left Coca-Cola to join DHL as president of the Japan operations and was subsequently made the Chief Executive Officer of DHL Asia, and then followed to run the European operations as Chief Executive Officer.
I was excited to join Walmart to begin my retail career in 2009, responsible for both the existing Asia business at that time, as well as expansion into new Asian markets. My final role at Walmart was leveraging the Walmart international business, covering areas such as global sourcing, technology, real estate, and direct manufacturing. I then went on to join UPS as the first executive outsider in 112 years, something I was reminded of often, to lead a substantial transformation program, corporate strategy, M&A, advanced technology, as well as the global back offices. In my final role at UPS, before I retired, I was the president and Chief Executive Officer of UPS International, responsible for all markets outside the United States.
This encompassed operations in over 220 countries, with both air and ground networks across the world. UPS International has over 100,000 employees. I have served on public NGO advisory boards in Europe, Asia, Latin America, and as well the United States, and understand and appreciate the role of a board. I believe that I bring not only retail experience, but as well as significant logistics experience, at a time when, frankly, supply chain management is a critical success factor for any business. I'm honored to have the opportunity to become a Coles team member and work with such a great management team, as well, board. Thank you, Mr. Chairman.
Thank you very much indeed, Scott. The board, other than Scott, unanimously recommends the election of Scott Price, noting that Scott brings experience in fast-moving consumer goods, retailing, and logistics of particular relevance to our group. I would now like to invite any questions that any shareholder or proxy holder may have in relation to this item of business. I will start with any questions that may arise on the floor. If there are no questions on the floor, Sally, are there any questions online?
Chairman, there are no online questions under this item.
Okay. There are no questions online nor on the floor, so we will now bring this matter to a conclusion. The details of the proxies and direct votes received in relation to this item are now being displayed. Please enter your vote for item 2.2 if you have not already done so. I'll now move on to item 2.3, but as this item relates to my own position, I would invite Richard Freudenstein to chair the meeting for this item of business.
Thanks, James, and good afternoon, everyone. The text of the resolution is now displayed and James's details are set out in the notice of meeting. I now invite James to address the meeting.
I think he's coming back. Thank you, Richard. It was a great honor four years ago to have been invited to be the chairman of the Coles Group upon its demerger from Wesfarmers and its listing on the Australian Securities Exchange. Since that time, I have worked closely with my fellow directors, our chief executive, the management team, as we have sought to develop our strategy, to build our competitive market position, and to strengthen the business in all areas of our activities. Over the period, we have significantly invested in building our team, enhancing our store network. We have partnered with globally recognized leaders in developing transformational new technology. We have worked closely with suppliers to innovate and to ensure that we can offer products of quality and price to meet our customers' needs.
We have sought to deepen our community engagement and leadership roles. These initiatives have all been aimed at building trust in every aspect of Coles, so as to underpin our aim of sustainably creating long-term value for you, our shareholders. In my role as Chairman, I have sought to draw off my own professional experience as a non-executive director and as a banker in working within and alongside many of Australia's largest corporations. This extensive involvement has allowed me to be an active participant in how to assess and how to address the wide diversity of business opportunities and challenges that characterize corporate life, and has greatly assisted me in my role at Coles, working with our board and our management team.
If reelected by shareholders today, I look forward to continuing to provide insights and guidance to support what I believe continues to be an opportunity-rich future for our group. As part of doing so, I will work with my board colleagues to ensure the orderly transition of the company's chairmanship at an appropriate time during my term, consistent with maintaining the high standards of corporate governance to which we at Coles are committed. Thank you.
Thank you, James. The board, other than James, unanimously recommends the reelection of James Graham. Over the past four years, James has been an outstanding chairman and brings to the board a wealth of commercial experience and a strong focus on corporate governance. I would now like to invite any questions you may have on this item of business. Microphone one.
I'd like to reintroduce Mr. Stuart Burns from the Australian Shareholders' Association. A question for James.
Mr. Chairman, the ASA would like to thank Mr. James Graham for the professionalism he's shown over the last four years in his chairmanship of the Coles Group. He's indicated that he intends to stand down during this financial year. Can he give some more details on the succession plans that are being put in place to find a suitable chairman for Coles Group?
Thanks, Mr. Burn. I might take that question. Early this year, James discussed with the board his future plans, and the board unanimously, and I would say enthusiastically, asked James to re-stand for election and continue as chair, because as I mentioned before, he has really done an outstanding job across the company, leading the board from demerger, working closely with executive team, and is incredibly well-known and well-respected throughout the whole of Coles. By standing and saying that he will retire sometime in the next three years, he has given the board plenty of time to plan and transition an orderly transition to a new chair. But at this stage, it'd be premature to talk about timing or process in relation to that. Are there any other questions from the floor? Sally, do we have any online questions?
There are no online questions under this item.
No further questions from the floor. Thank you, Sally. Thank you. If there are no further questions, we have now finalized discussion of this item. The details of the proxies and direct votes received in relation to this item will now be displayed. Please now enter your votes for this item 2.3 if you have not already done so. As we've now finalized this item, I will now hand the meeting back to James to continue. Thank you.
Thank you, Richard, and potentially thank you, shareholders, for your support. I now turn to item 2.4 on today's agenda, which relates to the reelection of Jacqueline Chow as a director of Coles Group Limited. The text of the resolution is now displayed, and Jacqueline's details are set out in the notice of meeting. I will now invite Jacqueline to address the meeting, noting that Jacqueline is an extremely diligent director who has contributed greatly to the board and to the senior management team across her role as a director over these last four years.
Thank you, Chairman. Good morning, shareholders and guests. I'm honored to be standing for reelection to the board of Coles Group. Since joining the board 4 years ago, I've served as a member of the Nomination Committee and also the Audit and Risk Committee. I take this responsibility very seriously. I've run several large-scale listed businesses end-to-end, with my last executive role spanning 80 countries. Having the recency of hands-on operational experience can be helpful context for what it truly takes to deliver on our promises and to do it sustainably with a diverse array of constituencies, be they our workforce team members, communities, governments or regulators. For over 20 years of working life, I've almost entirely served customer-facing businesses with household brand names. Arnott's Biscuits, Kellogg's, Fisher & Paykel Appliances, just to name a few.
Using data analytics and insights to constantly appreciate the challenges of Australian households, I've sought to learn what are their pain points, how to make their lives easier, and then created innovation and technology solutions to build customer loyalty. This diligence on understanding the customer is even more critical now in the face of economic volatility and dramatic societal shifts. The last few years of geopolitical upheaval, natural disasters, and the pandemic disruption has caused countries and businesses all around the world to redefine their supply chains and to mitigate their risks. As an executive, I've always been a supplier to Coles Supermarkets, so I bring an important perspective on how to harness a productive and trusted partnership with suppliers. I am motivated to contribute toward our purpose, to sustainably help all Australians live happier and healthier lives.
I would be honored to receive your support to serve as a director. Thank you.
Thank you very much indeed, Jacqueline. The board, other than Jacqueline, unanimously recommends the re-election of Jacqueline Chow. I would now like to invite any questions that any shareholder or proxy holder may have on this item of business, and as previously, I will first invite, are there any questions from the floor? I don't think there are. Sally, are there any questions online?
Chairman, there are no online questions under this item.
Thank you. If there are no questions, this item of business has now been finalized. The details of the proxies and direct votes received in relation to this item will now be displayed. Please now enter your vote for item 2.4 if you have not already done so. I now turn to item three, which is an advisory vote on the 2022 remuneration report. The remuneration report can be found on pages 65 to 83 of the 2022 annual report. I will now invite Richard Freudenstein in his capacity as Chairman of our People and Culture Committee to speak to the meeting in relation to this resolution.
Thank you, James. As we've already heard, across the 2022 financial year, Coles has continued to deliver on its transformation strategy while maintaining stable earnings before interest and tax. This was despite significant COVID-19 costs, transformation project costs, flood events, and lower Express earnings as a result of reduced mobility from COVID-19 lockdowns. The Coles executive team is rewarded through the payment of benchmarked fixed compensation, a short-term incentive based 60% upon financial measures and 40% on strategic measures, and a long-term incentive dependent on performance over a 3-year period. This structure is designed to ensure remuneration of the group is market competitive, performance-based, creates long-term shareholder value, and is fit for purpose. The board maintains discretion across all remuneration aspects to ensure that outcomes are appropriate in the context of our performance and the expectation of our customers, team members, shareholders, and the community.
For the 2022 financial year, notwithstanding the challenges presented to management across the year, the group's performance was solid against all financial metrics included in the executive KMP STI balanced scorecard, delivering above-target performance against each of the financial targets set by the board. This included the impact to EBIT of COVID-19 costs of approximately AUD 240 million compared to approximately AUD 130 million incurred the prior year. In the non-financial and strategic metrics, performance was again strong against our safety and team member engagement metrics, with significant improvement in both areas. Our main customer metric, Net Promoter Score, performed well at the beginning of the year, but was negatively impacted as a result of supply chain challenges which affected availability for our customers.
Finally, the board decided not to award executive KMP against the Ocado program metric in consideration of the additional investment required to complete that project. This resulted in STI outcomes for the executive KMP being between 69% and 75.7% of the maximum STI opportunity. The board is of the opinion these outcomes reflect the solid achievements delivered by management against the commitments made to shareholders for the 2022 financial year, noting that 50% of the managing director and CEO's STI outcome will be deferred into equity for 2 years and 25% of STI for other executive KMP will be deferred into equity for 1 year. In addition to STI outcomes, the LTI award granted to executive KMP in the 2020 financial year was tested at the end of the 2022 financial year.
This award had two performance metrics, relative total shareholder return and cumulative return on capital. Performance against each of these metrics exceeded the stretch targets set by the board, with TSR performing at the 84th percentile when measured against the ASX 100 peer group. Therefore, the board determined that 100% of the 2020 financial year LTI award would vest. In considering the performance metrics to apply for the 2023 financial year, the board has decided to make one change, which is to expand the safety metric beyond Total Recordable Injury Frequency Rate to include a broader safety index, which has a greater focus on lead indicators. This approach aims to improve safety culture as well as safety performance.
I would also like to take this opportunity to speak to resolutions 4 and 5 relating to the allocation of equity to our Managing Director and Chief Executive Officer, Steven Cain. Resolution 4 relates to the approval sought to allocate 51,785 shares to Mr. Cain pursuant to the 50% deferral into equity of the short-term incentive earned in the 2022 financial year. As previously noted, these shares will be subject to a 2-year deferral. Resolution 5 relates to the approval sought to allocate Mr. Cain 218,878 performance rights, being equivalent to 175% of Mr. Cain's total fixed compensation. The terms of this long-term incentive grant are set out in the notice of meeting, and importantly, they are entirely performance-based.
50% of the performance rights are subject to our relative total shareholder return measured over a three-year period, and 50% are dependent on the company meeting a cumulative return on capital measurement as set by the board in line with the execution of our strategy. This long-term incentive structure has been set by the board in recognition of the importance of aligning remuneration outcomes with long-term returns to shareholders in accordance with our vision of becoming the most trusted retailer in Australia and growing long-term shareholder value. Thank you.
Thank you very much, Richard, for providing that additional background on our remuneration report and supplementary matters. Turning now to item three on today's notice of meeting, the remuneration report. The text of the resolution in item three is now displayed on the screen. While the vote on this item of business is advisory only, the board takes account of the discussion and voting when reviewing our remuneration practices and policies. The board recommends that shareholders vote in favor of the adoption of the remuneration report, and I now invite any questions that any shareholder or proxy holder may have in relation to this report, starting with any questions from the room. I don't think there are any questions from the room. Sally, are there any questions on this item of business online?
Yes, Chairman. The first written question comes from Mr. Stephen Mayne, who asks, "When disclosing the outcome of voting on all resolutions today, including the remuneration report, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment and was a disclosure initiative adopted by the likes of Metcash, Altium, and Dexus last year, and Webjet and Tabcorp so far this AGM season.
Thank you, Mr. Mayne, for your question. At Coles, we're interested in ensuring the highest standards of corporate governance, and we look very closely at our corporate responsibilities. We look closely at the requirements of the Australian Securities Exchange. Our practice is, and continues to be, to disclose the number of shares that have voted on the different items of business at an annual general meeting. Noting, as you correctly point out, that if the purpose of this meeting was totally different to be a meeting, a scheme of arrangement meeting, then the rules under the Corporations Act would lead to a different outcome.
We believe this approach is in line with the current market practice of the major Australian corporations, and certainly consistent with the requirements of the Australian Securities Exchange and the Corporations Act, and we will continue to adopt this approach.
Chairman-
Sally, are there any further questions?
Yes. The second written question also comes from Mr. Stephen Mayne, who has asked, "Did any of the five main proxy advisors, ACSI, Ownership Matters, Glass Lewis, ISS, and ASA, recommend a vote against either of the remuneration items today? Will you disclose the proxy votes before the debate on the remuneration questions so shareholders can ask questions about the reasons if there have been any protest votes? Also, why not disclose the proxies to the ASX with the formal addresses like Afterpay, Brambles, Carsales, JB Hi-Fi, NAB, Origin Energy, SEEK, and Viva Energy have all done in the past and Sims Limited did only yesterday? That would allow for a more fully informed debate, wouldn't it?
Mr. Mayne, thank you again for your follow-up question. The situation with the voting in terms of the timeliness of when we provide the information on the proxy voting that has taken place in advance of the meeting is our approach to provide that information after the time after the discussion before the time that the voting on this matter or each matter is closed. We believe it's more appropriate to provide that information after discussion because we think all shareholders should feel entirely free to express their views on each of the items of business in advance of knowing what might be the direction of the proxy votes. However, in casting their vote, we think it is appropriate that shareholders be aware of the proxies.
Our practice is to allow discussion, to then notify the proxies, and then to finalize voting. We think that is, continues to be respectful, appropriate, and in line with the majority of major Australian companies. Noting that practice may differ in different situations. As regards the question that you raised about the particular advice or otherwise of the proxy advisory firms who play an active role in assisting major institutions in terms of how they should consider voting, I don't think that's something which is appropriate for me to be commenting upon expressly.
I think to the extent that you see how the proxy voting comes together prior to the conclusion of the each item of business, it will give you a fairly good sense of the direction of support or otherwise that the proxy advisory firms have had towards the particular items of business and to the extent to which that advice may or may not have been followed by those clients of those firms.
Thank you, Mr. Chairman. The next written question also comes from Mr. Stephen Mayne. I have a problem listening to Richard Freudenstein talking about remuneration when he spent decades working for the Murdoch family, where executive pay has long been out of control. Richard remains a Murdoch nominee to the REA board. Does he agree that it was ridiculous that Murdoch men have been paid more than AUD 1.5 billion by public companies since 2000, using their gerrymandered board control to overpay themselves? Please appoint a Coles Rem Committee chair not tainted by association with Murdoch family pay excesses.
Thank you, I think, Mr. Mayne. That item is not an item which is in any way relevant to the business of this meeting in terms of another public corporation and persons to whom you've referred. I think those matters could be addressed in another forum. As far as Mr. Freudenstein is concerned, though, I wanna be entirely clear with all shareholders. Mr. Freudenstein is a man of the most utmost integrity in every element of how he deals with all aspects of his engagement, contribution, discussion, objectivity in Coles Group Limited. There is no way I would, in any way, suggest that he does not meet the highest standards that all of us would aspire to.
We are quite privileged, as fellow board members and as Coles Group Limited, to enjoy his position on the board and his leadership, and the way he works with the fellow board members and the senior management team as Chairman of the People and Culture Committee, is of the highest standard and is only worthy of our thanks and acknowledgement. Are there any further questions, Sally?
Thank you, Chairman. There are no further written questions under this item.
If there are no further questions, we've now finalized the discussion on this item. The details of the proxies and direct votes received will now be displayed on the screen. I trust that they're all clear enough for everyone to be able to see from wherever you are sitting, either in the meeting room or online. Please now enter your votes for item three if you have not already done so. I now turn to item four, which is the approval of the grant of STI shares, that is short-term incentive shares, to our Managing Director and Chief Executive Officer, Steven Cain, as part of his short-term incentive award for the 2022 financial year. The text of the resolution is now displayed. Details of the proposed grant have been set out in the explanatory notes to the notice of meeting.
As outlined in the notice, the purpose of Mr. Steven Cain's short-term incentive is to provide increased focus on and award for performance against those areas that most significantly drive the delivery of the company's strategic initiatives, to which Mr. Richard Freudenstein has already spoken. The board, other than Steven Cain, considers the grant of short-term incentive shares to be appropriate in the interests of shareholders and unanimously recommends that shareholders vote in favor of item four. I now invite any questions that any shareholder or proxy shareholder may have on this item. As previously, I will first invite, are there any questions from the floor? There being no questions from the floor, Sally, I invite, are there any questions from the online platform?
We have one written question from Mr. Stephen Mayne, who asks, "Given the interesting discussions across a range of topics today, including this STI grant for the CEO, could the Chair undertake to make an archived copy of the webcast, plus a full transcript of proceedings available on the company's website? While we have made the webcast available since 2019, the likes of Nine, AGL, ASX, ANZ, Domino's and Lendlease all produced their first AGM transcripts in 2021. Will you follow suit today? This is something IAG has been doing since 2003.
Thank you, Mr. Mayne, for that perspective. It is not our practice, nor do we intend to vary from our practice, which is to table in advance of this meeting on the Australian Securities Exchange the outline or the speeches that were made by Steven Cain and myself in the context of this annual general meeting. We also provide a webcast of this meeting, which will be available on the Coles website shortly following the conclusion of this meeting. Our view is that that is the most appropriate way to provide the relevant information to our shareholders and all other parties who have an interest in the Coles Group business. That is our practice at this time, and I do not anticipate that changing. Are there any other questions, Sally?
Thank you, Chairman. There are no more online questions or comments on this item.
Thank you. If there are no further questions, we have now finalized discussion on this item. The details of the proxies and direct votes received in relation to this item will now be displayed. Please now enter your vote on item four if you have not already done so. I now turn to item five, which is the approval of the grant of performance rights to Steven Cain as his long-term incentive award for the 2023 financial year. The text of the resolution is now displayed. Details of the proposed grant have been set out in the explanatory notes to the notice of meeting.
As outlined in the notice, the purpose of Steven Cain's long-term incentive is to ensure that his interests are aligned with the long-term interests of shareholders by providing him the opportunity to be awarded an equity interest in Coles, subject to the achievement of the performance targets, as set out in the notice of meeting to which Mr. Freudenstein has already spoken. The board, other than Steven Cain, considers the grant of performance rights to be appropriate in the interests of shareholders and unanimously recommends that shareholders vote in favor of item five. I now invite any questions that you may have on the approval, either as a shareholder or a proxy holder of the granting of Steven Cain's long-term incentive. In accordance with my previous practice, I will first invite. Are there any questions from the floor?
If there are no questions from the floor, Sally, are there any questions online?
Chairman, there are no online questions or comments on this item.
Thank you. Well, as there are no questions in relation to this matter, the details of the proxies and direct votes received in relation to this item will now be displayed. Please now enter your vote on item 5 if you have not already done so. Before I close the meeting, I would like to pause to give shareholders a final opportunity to enter their votes. Sally, while we wait, can I just check if there were any remaining online questions not dealt with?
There are no remaining online questions, Chairman.
Thank you. Are there any remaining questions on the floor? If not, we have now finalized our discussion, and that concludes the formal business of this meeting. If you have not already done so, please ensure that you submit your vote for each resolution in person or through the online platform. I will now just pause for a moment in case any shareholder has not had that opportunity. I now declare the poll closed, and the final results of the poll will be advised later today to the Australian Securities Exchange and will be published on our website as soon as possible. That concludes our business today. Thank you very much for your attendance at Coles Group's hybrid annual general meeting and for your support of Coles. We very much look forward to your continuing support as we enter the happy and busy Christmas trading period.
I now declare the meeting closed. For those of you who are with us here in Melbourne, I invite you to join the board and executive leadership team for some refreshments, which will be served just outside the entrance to this room. Thank you all very much.