Well, welcome, ladies and gentlemen, to the 2023 Annual General Meeting o f Cleanaway Waste Management Limited. My name is Philippe Etienne, and as Chairman of Cleanaway, I'll be chairing the meeting today. As there is a quorum present, I declare the meeting open. Before we begin the proceedings, I'd like to acknowledge the Jagera people and the Turrbal people as the traditional custodian owners of Meanjin, which is Brisbane, the lands of which we meet today. We pay our respects to the Jagera and Turrbal Elders, past, present, and emerging. Before we start, I'd like to make everyone aware of the safety exits. In case of emergency, the fire exits are the double doors at the rear of the room leading to the front entrance, and also the door at the front of the room.
The fire alarm is a constant beep and will only evacuate on the sound of the evacuation alarm, which is a whooping sound, or at the supervisor's request. P.A. announcements will be made asking guests to evacuate, and managers or supervisors will assist guests to evacuate the building. I note the assembly point is located on the Queen Street footpath. The Notice of Meeting, dated 20th of September 2023, was made available to all shareholders. I propose to take the Notice of Meeting as read. I'd like now to introduce you to my fellow directors, the General Counsel and Company Secretary, and the CFO. On my left, we have, in the following order: Mark Schubert, Chief Executive Officer and Managing Director, Dan Last, General Counsel and Company Secretary, Non-Executive Directors Michael Kelly, Samantha Hogg, Terry Sinclair, Jackie McArthur, Ingrid Player, and our CFO, Paul Binfield.
Non-Executive Director Clive Stiff is an apology as he's traveling overseas on business. We will hear from Clive on video later during the course of the meeting. I'd also like to introduce the company's auditor, Ernst & Young, which is represented today by Ashley Butler, a Partner with the firm. Today's meeting is being held in person and virtually via the Computershare platform, where attendees can listen to a live webcast on the meeting, and shareholders and proxies can ask questions and submit votes online. To provide you with sufficient time to vote, I now declare voting open on the items of business two, three, and 4. Item 5 is conditional on at least 25% of the votes cast on Item 2 being cast against the adoption of the remuneration report for the financial year ended 30 June 2023.
* Wait, "poll" - Lowercase. Correct. * Wait, "trading update" - Lowercase. Correct. * Wait, "business activities" - Lowercase. Correct. * Wait, "procedural guidelines" - Lowercase. Correct. * Wait, "question submission" - Lowercase. Correct. * Wait, "voting" - Lowercase. Correct. * Wait, "address" - Lowercase. Correct. * Wait, "formal business" - Lowercase. Correct. * Wait, "shareholder" - Lowercase. Correct. * Wait, "proxy" - Lowercase. Correct. * Wait, "proxies" - Lowercase. Correct.
For those attending the meeting online and who are eligible to vote, as the poll is open, a voting icon is available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. For those voting online, you're free to submit your votes at any time. To cast your vote, simply select one of the options. There's no need to hit Submit, as the vote is automatically recorded. Please ensure you cast a vote for items two, three, and four. You'll receive a vote confirmation notification on your screen. To change or cancel your vote, click the link which says, "Click here to change your vote," at any time until the poll is closed. Votes may be changed up to the time I declare voting is closed.
For shareholders, proxies, and corporate representatives in person, I'll ask you to vote once we've gone through all items of business today by completing the blue voting card that was provided to you upon admission. White cards are for visitors who cannot vote or ask questions today, and shareholders with a yellow card are not entitled to vote on the items of business. I will provide a warning before I move to close voting at the end of the meeting. Questions will be aggregated and addressed at the end of all the items of business. It's my duty as Chairman to ensure that shareholders have the opportunity to ask questions and discuss the items of business during the meeting.
We ask that all questions and comments be concise, be confined to the particular item being discussed and to matters relevant to shareholders as a whole, and be informative and respectful. Given this is a hybrid meeting, I'll first take questions received in advance of the meeting. Questions from those physically present at the meeting, and then followed by written audio questions from participants who have joined us online. If you're attending the meeting in person, only shareholders, validly appointed proxies and corporate representatives who are given a blue or yellow voting card upon entry are entitled to ask questions. When I call for questions, please raise your blue or yellow card, state your name, organization you represent, before asking your question.
For those attending the meeting online who wish to submit a written question, you may do so at any time during the meeting via the speech bubble icon on your screen. Type your question in the chat box on the right of the screen and then select Send. Confirmation that your message has been received will appear above. Instructions on how to ask a verbal question are shown below the broadcast window on the online platform. If you're asking a verbal question, please state your full name before asking your question. Please limit your questions to only one or two questions at a time, and then rejoin the queue to allow others to ask questions. Please note that while you can submit written questions from now on, I will not address them until the end of all items of business.
We will ensure that there is a reasonable opportunity for shareholders to ask questions and make comments at this meeting. However, there may not be time this morning to answer every question or comment received. Questions will be moderated to avoid repetition, and if questions are particularly lengthy, we may need to summarize them in the interest of time. Questions should relate to the item of business under consideration at today's meeting. I'll now address the meeting with an overview of Cleanaway's past performance. It's my pleasure to address shareholders of Cleanaway Waste Management Limited, my first as Chairman of the company. After serving as a Non-Executive Independent Director of Cleanaway since May 2014, it's been an honor to have been appointed Chairman in September of this year. The 2023 financial year was a much improved year for Cleanaway.
Our Blueprint 2030 strategy is in place and progressing well, and the business has stabilized following an extended period of challenges, both internal and external. Pleasingly, we are making strides towards further improving the company's financial performance. Having delivered an underlying financial outcome in line with our guidance for the year, we've now set ambitious midterm financial targets aligned with Blueprint 2030 and have aligned management incentives to those targets. The financial year 2026 incentive scheme threshold represents an approximately 40% improvement in EBIT from financial year 2023 to AUD 425 million, while the stretch target represents an approximately 66% improvement to AUD 500 million. We also set our ambition to reduce our greenhouse gas emissions in accordance with the Glasgow Climate Pact and aligned our ambitions to our long-term incentive plan for our executives.
During the year, we made good progress on the activities that will help us achieve these goals, and I look forward to reporting to you on our progress. With safety and the environment as our foundations, we are committed to ensuring everyone goes home from work unharmed and will continue to work hard in pursuit of our goal. One measure of our safety performance is our Total Recordable Injury Frequency Rate, or TRIFR. This improved to 3.7 in financial year 2023 from 4.2 in financial year 2022. While the improvement's encouraging, it's still below our expectations, given our heightened focus placed on safety during the year. While many of the incidents were minor in nature, there were some significant injuries to our people. The lessons to be learned from these events are being incorporated throughout the organization.
Tragically, there was also one fatality in our operations during the year. The fatality occurred at the Kemps Creek landfill, in an area of site where a contractor was in operational control. The worker was an employee of the contractor, and our thoughts go out to their family and all others who were impacted by the accident. During the year, we faced operational challenges, including labor availability and efficiency and persistent cost inflation. We also had some legacy issues to deal with in our Queensland Solids business and our Health Services business. In the context of the challenges faced, Cleanaway delivered a strong underlying financial performance . We reported an underlying net profit after tax of AUD 148.6 million, which is 2.5% higher than previous year.
This reflected strong EBIT growth, up 17.5%, which was mostly offset by a significantly higher interest expense in a rising interest rate environment. This translated to earnings per share of AUD 0.066. On a statutory basis, our AUD 21.6 million net profit after tax attributable to ordinary equity holders was 72.6% lower than prior year. This largely reflected costs associated with the loss of the health services processing equipment, net of insurance recovery costs and provisions taken to rectify and remediate the New Chum Landfill and acquisition and integration costs. The New Chum costs included an impairment charge resulting from the unsuccessful height rise court appeal decision. The business remains in very strong financial health, as at 30 June 2023.
We had AUD 504.5 million of undrawn debt facilities and an average debt maturity of 3.6 years. Our net debt to EBITDA ratio of 1.9x as of 30 June 2023, was 0.3x lower than 30 June 2022, as a result of equity raised during the year and remains comfortably within our covenant. Our financial performance and strong financial position allowed the board to declare a final unfranked dividend of AUD 0.0245 per share, which was paid on 6th of October 2023.
This took the total unfranked dividend for the year to AUD 0.049 per share, which was in line with prior year and represents a payout ratio of 74.3%, in line with our stated policy of paying out 50%-75% of underlying profits. Cleanaway is eligible to participate in the Commonwealth Government's Instant Asset Write-Off Scheme, which reduced tax payments paid by the Group in financial year 2023 and 2022, and is forecast to continue into 2024. Because of those lower tax payments, Cleanaway does not expect to resume franking dividends fully until calendar year 2024. We've been busy integrating and extending our strategic infrastructure, and towards the beginning of financial year 2023, we announced the acquisition of the GRL business for AUD 168.5 million, which is core to our Organics Blueprint.
During the year, through our various circular plastics joint ventures, we co ntinued to develop our second PET plastics pelletizing facilities in Altona and our HDPE and PP plastics pelletizing at Laverton, both in Victoria. Through our joint venture with TOMRA, we successfully tendered for Western, Regional and Metro zones of the Victorian Container Deposit Scheme. We expect to deploy approximately AUD 40 million of capital towards the joint venture and anticipate an attractive return profile based on a progressive ramp-up of the scheme. We've also been advancing the long lead items related to our energy from waste developments in Victoria and Queensland. We continue to take a capital-light approach to the projects and remain disciplined in our approach to capital allocation. These projects are underpinned by our strategic pillar of creating sustainable customer solutions with high circularity and low carbon emissions.
On the 21st of August, 2023, we completed the acquisition of Australian Eco Oils for AUD 39 million. The acquisition provides us with an attractive entry point into a new adjacent market. High-quality used cooking oil is becoming an increasingly important source of feedstock for the production of renewable fuels, including sustainable aviation fuels and renewable diesel. Turning now to remuneration. At our 2022 AGM, despite the support of a significant majority of 74.5% of votes cast in favor, we did receive a first strike against the remuneration report. The Board has taken this very seriously and actively engaged with our shareholders, seeking to address the key issues raised. As a board, we seek to remunerate executives appropriately, as well as presenting our ability to attract and retain talented people. Understandably, in some years, that's easier to do than others.
We will continue to work constructively with our shareholders in seeking to deliver equitable outcomes. The Board exercised discretion to moderate STI outcomes downwards for financial year 2023, executive remuneration outcomes in order to better align management and shareholder experience. The Board has also approved further changes to our executive remuneration framework for financial year 2024, to further strengthen the alignment between shareholders and management. While the Board always retains the right to apply discretion, we expect these changes will be well received by shareholders. I'd now like to talk about our program of orderly Board renewal. During the year, we appointed two new independent Non-Executive Directors. Jackie McArthur was appointed to the Board in August 2022 and duly elected at last year's AGM. Clive Stiff was appointed in June 2023 and is standing for election today.
Clive is an experienced executive with diverse and complementary international and domestic experience. I look forward to him playing a key role in contributing to the development and execution of our Blueprint 2030 strategy over the coming years. I'm delighted to welcome Clive to the board of Cleanaway and congratulate him on his appointment, pending his election. I'd also like to recognize Ray Smith's significant service to the company since his appointment as a Non-Executive Director in 2011. Ray retired as a Director with effect 31st of August 2023, having made a significant contribution to the growth and success of Cleanaway. In his role as a Director and Chair of the Audit and Risk Committee, he has played a key role in steering the performance, improvement, and growth of the company.
His deep understanding of finance, operations, and strategy, and broad corporate experience with industrial companies has been a significant asset to the Board. On behalf of the Board, I thank Ray for his wise counsel over many years and wish him all the best in his retirement. I'd also like to pay tribute to our former Chairman, Mark Chellew, and recognize the immense achievements and milestones delivered during his tenure. Mark made a tremendous contribution to Cleanaway over the last 10 years. As a Board, we've greatly benefited from his strong leadership, deep knowledge, and experience, which has driven a period of significant growth and success. This included the acquisition of Toxfree and the Sydney Resource Network, development of the Footprint 2025 strategy, and development and execution of the Blueprint 2030 strategy. We wish Mark well in his retirement.
With the departures of Ray and Mark, Michael Kelly has taken the Chair of the Audit and Risk Committee, and Jackie McArthur has taken the Chair of the Sustainability Committee. In preparation for Terry Sinclair's retirement from the board in 2024, after 12 years of service, we will seek to appoint another director over the course of financial year 2024 as part of our ongoing board renewal. I would like to take this opportunity to thank our CEO, Mark Schubert, the executive management team, and all Cleanaway employees for their efforts in delivering robust operational and financial outcomes for this year. Your efforts are greatly appreciated. Thanks also to my fellow board members for their support, particularly as I begin my chairmanship. Finally, I'd like to thank our shareholders for continued support you have given the board and management of Cleanaway.
With that, I'll hand over to our CEO, Mark Schubert, for his address.
Thanks, Mark. All right, thank you, Philippe, and good morning, everybody. It is a privilege to report to you on Cleanaway's performance for the financial year ended 30 June 2023. At Cleanaway, our mission, and what's written on the side of all our trucks, is "Making a sustainable future possible together." To achieve that, we must ensure, firstly, that our business itself is sustainable. A truly sustainable business has strong foundations. At Cleanaway, our foundations are safety and the environment. In practice, that means protecting our people and protecting the environment. Our team knows that when faced with a choice, because they're our foundations, they always come first. To strengthen our foundations over the last 12 months, we've embedded new health, safety, and environment capability in the organization. The team has developed an HSE strategy and an intensive improvement roadmap focused on three areas.
The first is improved critical risk management, the second is growing leadership capability and safety culture, and the third is embedding a learner's mindset. Our lagging safety indicators, while improving, are still not where they need to be or where we want them to be. Our TRIFR of 3.7 on the 30th of June 2023 represented 82 incidences where one of our teammates required medical treatment of some sort. We know that's not good enough, and for FY 2024, we'll continue to work towards implementing programs that reduce injury numbers, improve management of critical risks such as fire, as well as starting to incorporate additional measures and lead indicators into our reporting to provide better insights in relation to our performance.
We'll also roll out our first two safety-related core processes and continue a significant program of work around managing risks from fire, which have had a significant impact on performance over recent years. As with HSE, we've installed new capability to ensure we evolve our culture and grow our capability to deliver Blueprint 2030. During the year, Scott Nicholls joined the Executive Team, he's actually in the room today, as the Executive responsible for our Liquid Waste and Health Services and Industrial Waste Services segments. Scott brings significant experience and capability to the organization and has hit the ground running, including leading our fleet strategy, given his logistics background. We've done internal work to reimagine our Cleanaway values, which are aligned to our strategies and which we will formally launch these soon.
Rather than simply words on a page, we're focused on bringing our values to life with actions around how we work, how we lead, how we show up, and how we treat one another. Our people strategy is designed to embed the reinforcing mechanics that will support a Cleanaway culture where our 300 branches are the center of our company, driving performance with capable leaders, local ownership, care, connection, and a view well beyond today. At the same time, we are focused on ensuring we build a strong talent pipeline with successes identified for all business-critical roles to support the growth embedded within Blueprint 2030. One of the early achievements from our new people strategy has been an improvement in female participation levels across the company, continuing the positive trend from FY 2022.
From a gender perspective, we saw an 8.1% or 200 basis point improvement in our female representation rate, increasing from 20.8%-22.8%. At the executive and senior management level, we increased female representation from 23%-36.2%, and we're approaching at the CEO plus two element, the 40/40 diversity ambition. We are confident that our Blueprint 2030 strategy will create shareholder value and do that by integrating and extending our leading network of infrastructure assets to provide high circularity and low carbon solutions, seamless customer service, and value for money for customers. Under Blueprint 2030, we will create a competitive advantage and generate significant value by extending and integrating our assets and capabilities to address Australia's increasingly complex waste needs.
We'll do this in the most sustainable way possible, while delivering an exceptional customer experience, powered by the passion of our workforce. To better define the meaning of high circularity, this year we have reimagined the well-known concept of the waste hierarchy to become the Cleanaway Circularity Hierarchy, recognizing that different recycling solutions have very different circularity and carbon outcomes. When looking at circularity, we set ourselves the task of being able to give meaning to high circularity in the context of offering the most circular and lowest carbon solution for customers. We've also developed a simple approach that can be used to assess our business, customer solutions, and investment opportunities against an expanded waste hierarchy. The hierarchy recognizes degrees of circularity and reflects the desirability of supporting first domestic and then international circular economies over downcycling.
As I reflect on the progress our team has made since we've released our strategy, I'm really filled with pride. To drive the growth of the business, we've developed detailed plans across our 14 blueprints, with expected timelines and deliverables closely tracked and reviewed monthly by the team. To support the delivery of our strategy and foundations, we've installed new capacity, including a refreshed executive team, that is deeply passionate and aligned about our purpose, our strategy, and new and significantly improved capability in areas such as HSE, carbon, organics, C&D, landfill gas, and sustainability. We have set greenhouse gas reduction targets aligned to a 1.5 degree pathway. During the year, we drilled more than 250 landfill gas wells, improved gas capture efficiency by more than 15%, and reduced carbon emissions by 9% on a like-for-like basis.
Excitingly, this sees us well on our path to meeting our targets. We also acquired and integrated GRL. This is a strategically located site and facility that enhances our network and customer offering today and into the future as we position Cleanaway to capture a significant growing share of the FOGO market opportunity. We have commenced and/or completed the construction of three mechanical plastic pelletizing facilities while we continue to expand our infrastructure footprint. This includes infrastructure to support TOMRA Cleanaway's recent Victorian Container Deposit Scheme network operator appointment. To make us more efficient, we identified the automation and digitization needs of the business and have commenced the delivery of Customer Connect and rolled out analytics tools that will support improved profitability.
We've also commenced the digitization of our workshops and fleet, and our sales team have been trained and equipped with tools to improve sales effectiveness. Our customer value proposition is central to our strategy, and pleasingly, we have been publicly recognized by one of our largest customers for our customer service. We expect that through continuing to execute our strategy diligently, Cleanaway will increasingly become the supplier of choice for recycling, for resource recovery, and for waste management services across a broad spectrum of customers. Against the backdrop of high inflation and a tight labor market and operational challenges, Cleanaway delivered a strong financial performance in FY 2023.
The company reported net revenue growth of 13.9% to AUD 2,965.8 million and grew underlying EBITDA by 14.9% to AUD 668.1 million. Underlying EBIT was 17.5% higher than the prior year at AUD 302.2 million. Underlying net profit after tax was AUD 148.6 million or 2.5% higher than the prior year, and that translated to underlying earnings per share of AUD 0.066 per share. Our statutory net profit after tax was AUD 21.6 million, and that was 72.6% lower than the prior year. As we've talked about, this largely reflected significant costs related to the New Chum Landfill, medical waste disposal, processing costs, and acquisition and integration costs.
Now, the New Chum Landfill costs are related to rectification and remediation resulting from the significant flood events and the subsequent write-off of the assets following an unsuccessful court appeal that would have allowed for its height to be extended. The medical waste costs are net of insurance recoveries and relate the loss of the hammer mill in Victoria following a fire in June 2022. During the year, as a result of tight labor market conditions, we incurred more overtime and more expensive labor hire to supplement our general workforce. We have implemented several successful strategies to address the challenges. These included improving recruitment capacity, the continued success of our Women's Driver Academy, and building on leadership capability. Our branch-level labor value drivers are tracking and improving daily performance, particularly now that vacancy rates have declined.
Our actions have resulted in vacancies today being around 48% lower than back in October last year, adjusting for unfilled growth roles such as the Victorian CDS scheme. With retention being the focus now, we have ongoing initiatives in place across onboarding, closing our enterprise agreement backlog, and our upcoming culture refresh. We feel confident that this vacancy trend will continue, and that we will deliver significant operational and financial improvements. Both Queensland Solids and the Health Services business units endured ongoing challenges from FY 2022, and we have performance restoration plans that are making good progress. The fleet replacement program for approximately 40 trucks that we lost during the Queensland floods last year was completed during the year. This has resolved some of the availability and repair and maintenance challenges associated with operating the makeshift fleet.
The Queensland network is now set up to operate without New Chum Landfill, and today, the Queensland business has stabilized and is focused on driving productivity and efficiency initiatives. We have a new management team and a replacement fleet in place following the floods of early 2022, and we are seeing the business performing and improving in line with our plans. We undertook substantial rectification works at the New Chum Landfill in preparation for the wet season. We expect to recommence construction of the final cell in FY 2024 and expect the landfill should deliver a modest contribution in FY 2025. The court appeal for a height rise at New Chum was unsuccessful, and we've decided not to pursue any further appeals. As a result, we're now planning for its closure and final remediation.
We have been successful in addressing inflationary pressures through the contractual mechanisms that allow us to recoup rising costs over time. However, temporary impact on margins remain while those inflationary pressures remain elevated. Net cash from operating activities for the group increased by AUD 15.5 million to AUD 481.8 million compared to FY 2022, and that reflected increased underlying EBITDA and lower tax payments. This was partially offset by cash outflows attributable to underlying adjustments and higher interest payments. This all resulted in a strong cash conversion ratio of 98.3%. Our capital expenditure of AUD 431.1 million reflected investment in a number of critical areas. Those primary areas were fire detection and suppression equipment, landfill gas capture, contract renewals, replacement and refurbishment of existing assets.
We allocated growth CapEx to our HDPE and PP plastic pelletizing facilities, the IWS-led Santos Total Waste Management contract, the development of the Western Sydney MRF, the acquisition of Queensland Energy from Waste site, and our ongoing Customer Connect project. We have made good progress stabilizing the business, and I'm very confident that we have the capability in place to deliver the Blueprints. Earlier, I spoke to the progress that we have made, which gives us confidence to outline our three-year financial targets and a scorecard aligned to Blueprint 2030, linked to the Long-Term Incentive Plan. As we've spoken to investors about, we are targeting an FY 2026 EBIT of greater than AUD 450 million. This is to be achieved with incremental improvements in return on invested capital .
As Philippe said earlier in his address, the stretch target and the one the team is working to, is to deliver AUD 500 million. The group's balance sheet remains strong, and we are committed to maintaining that. We do remain highly focused on capital allocation and have refined our processes to support our decision-making process. Our benchmark is always relative to returning capital to shareholders, and we assess all growth opportunities with that same financial discipline. I am pleased to report a strong start to the new financial year. With the benefit of stability in the business, we have continued to make progress on our strategic priorities, and we are seeing the benefits beginning to emerge in our financial outcomes. The Queensland business, or Queensland Solids business unit, is benefiting from higher volumes, improving labor productivity, and lower disposal and fleet costs.
Service delivery metrics are strong, with the focus shifting to include delivery of the midterm ambition and longer-term strategic growth. Performance improvement initiatives are gaining traction in our health services business unit, with financial performance also supported by price increases. The newly commissioned autoclaves in Victoria are performing well, and the focus has turned to lifting productivity at the site. Further efficiency improvements are helping to expand margins. These include simplification of our solids operating structure by consolidating a number of business units and our data analytics and fleet optimization blueprints. We have been ramping up our activity in preparation for the commencement of the container deposit scheme in Victoria on one November. Key team members have been recruited. Our new fleet of 37 trucks are in place. Our four drivers academy for women participants have graduated, and our sorting facilities are fast approaching commissioning as scheduled.
With our collection points progressively rolling out, our digital platform for network logistics optimization is well advanced. The IWS business is having a strong start to the year, benefiting from the recent tender successes. Landfill volumes are a key variable for earnings that we monitor closely throughout the year, and competition in the Melbourne market remains strong. Therefore, based on our performance to date and the outlook, our current expectation is that we will deliver an FY 2024 EBIT of approximately AUD 350 million. I would like to thank the Board and the Executive Team for the support that they've given me throughout the year, leading your company. I'd like, in particular, to acknowledge our former Chairman, Mark Chellew, for the support and guidance that he's provided me since I joined Cleanaway, and I do wish him the best for the future.
I also wanna thank our more than 7,500 strong workforce for their perseverance this year. I do know how much pride our team has in delivering for our customers every day, and we appreciate the extraordinary efforts of our people as they work through our labor shortage challenges together. It's our people that make the business great. We will keep each other safe, we'll protect the environment, and improve for tomorrow as we continue to strive towards our mission together. A thank you from me for attending today. I'll hand back to Philippe for the formal parts of the meeting.
Thank you. Okay, well, thank you, Mark. Transcripts of both my address and that of the CEO and Managing Director, Mark Schubert, are available on the website and the ASX company announcement platform. Ladies and gentlemen, we'll now continue with the formal business of the meeting. As I mentioned earlier, voting is being conducted by way of a poll at the end of the meeting. You may vote at any time. I will introduce each item of business and then take questions together at the end of all items of business. Prior to commencing of today's meeting, valid proxy votes have been received totaling...
It's a big number, 1,803,661,845 shares, which represents approximately 80.94% of Cleanaway Waste Management Limited's issued capital. The proxy votes received prior to the meeting will be displayed on the screen for each resolution. Where the Chair of the meeting has been nominated as a shareholder's proxy, all open and available proxies will be voted in favor of items 2, 3, and 4 . There are voting restrictions for some resolutions, as outlined in the Notice of Meeting, which apply to those who have an interest in the resolutions and certain of their related parties or associates. As you'll be aware from the Notice of Meeting, items 2, 3, and 4 require a vote. Finally, I appoint Michael Hutchison of Computershare Investor Services as the Returning Officer.
I'll now move to the first item of business. First item of business is the receipt and consideration of the company's financial report for the year ending 30 June 2023, and the directors' report and the auditors' report, which are now before the meeting. Please note, there's no vote on this item of business. Ashley Butler, a partner of Ernst & Young, Cleanaway, Cleanaway's auditors, is also present to address any questions you may have in relation to the conduct of the 2023 audit. Any questions for Ashley should be directed through me, as Chairman, and must be relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company relevant to the preparation of the financial statements, and the independence of the auditor in relation to the conduct of the audit.
Item 2 on the agenda is to consider the company's Remuneration Report for the year ended 30 June 2023, as it appears in the 2023 Annual Report, and to pass a non-binding resolution to accept the report. You'll see from the screen the number of proxies received for the resolution. In accordance with the Corporations Act, the company will disregard any votes cast on this resolution by any Key Management Personnel of the company, including the Directors and closely related parties of these persons. Item 3A, 3B, and 3C relate to the election and re-election of Directors. A separate resolution will be put for each Director.
Item 3A relates to my re-election, and I'll now pass the meeting to a member of the Board, Michael Kelly, who is the Chairman of the Audit and Risk Committee, to chair this part of the meeting as the next matter relates to my re-election.
Thank you, Philippe. Philippe was appointed an Independent Non-Executive Director of the company in May 2014 and was appointed the Board Chairman in September 2023. Philippe retires in accordance with the company's constitution and, being eligible, offers himself for re-election. The Board, in the absence of Philippe, unanimously supports his re-election. The number of proxies received for the resolution to re-elect Philippe Etienne is shown on the screen. I now invite Philippe to address the meeting.
It's been my great privilege to have served on your board for the last nine years and to offer myself for re-election today. I've had a global industrials career. I was almost 25 years with ICI Australia, which became Orica, where I was Chief Executive Officer of Orica Mining Services after holding a range of other senior executive positions in the USA and Germany, including strategy and planning and responsibility for synergy delivery of large-scale acquisitions. I also spent four years returning Australia's innovative banknote business, Securency, to a sound, strategic and ethical foundation. I'm currently a Non-Executive Director of Lynas Rare Earths Limited and Aristocrat Leisure Limited.
I hold a Bachelor of Science in Physiology and Pharmacology and a Master's of Business Administration. I'm a graduate of the Australian Institute of Company Directors and have completed postgraduate qualifications in marketing. I believe that my industrials background and experience with your company has allowed me to add material benefit to your board and complements well the great talent pool of my fellow directors. I look forward to continuing that contribution if you reelect me today. Thank you.
Thank you. Thank you, Philippe. I'll now pass the meeting back to Philippe Etienne to chair the remainder of the meeting, and good morning, all.
Okay, thanks, Michael. The next item, 3B, relates to the re-election of Samantha Hogg as a Director. Samantha retires in accordance with the company's constitution, and being eligible, offers herself for re-election. The Board, in the absence of Samantha, unanimously supports her re-election. Samantha has been an Independent Non-Executive Director since November 2019. The number of proxies received for the resolution to re-elect Samantha Hogg is shown on the screen, and I now invite Samantha to address the meeting.
Thank you, Philippe, and good morning, shareholders. I'm an experienced executive with international experience across the transport, infrastructure, energy, and resources sectors. I formerly held senior positions with Transurban Group and Western Mining Corporation across a broad range of portfolios, including finance, strategic projects, marketing, and corporate services. My most recent executive role was as Chief Financial Officer of Transurban Group. I'm currently the Deputy Chair and Lead Independent Non-Executive Director at Adbri Limited and a Non-Executive Director at IGO Limited. I hold a Bachelor of Commerce, and I'm a member of the Australian Institute of Company Directors. I believe that with my extensive skills and experience in finance and corporate governance across various industries, I'm able to continue contributing to the ongoing success of our company, and I thank you for considering my re-election as a director today.
If elected, I look forward to working with my board colleagues to achieve better outcomes for all stakeholders, customers, shareholders, and the wider community. Thank you for your support.
Thank you, Samantha. Item 3C, to which I'll now move, relates to the re-election of Terry Sinclair as a Director. Terry retires in accordance with the company's constitution, and being eligible, offers himself for election. The board, in the absence of Terry, unanimously supports his re-election. Terry has been a non-independent... Sorry, a Non-Executive Independent Director since April 2012. The number of proxies received for his resolution is shown on the screen. I now invite Terry to address the meeting.
Well, good morning, and I'd like to echo my colleagues' comments regarding what a privilege it is to serve as a Director on the Board of your company. I do so as a company Director and corporate advisor with actually 45 years' experience across the industrials, infrastructure, and consumer services sectors. I've gained this experience working in a variety of ownership structures, ranging from institutional, private equity, listed companies like Cleanaway, and privately held companies and government business enterprises. I've held senior executive positions in both operations and corporate development roles in BHP, primarily in the minerals, steel, and transport logistics areas, and Australia Post, where I was Head of both Logistics and Head of Corporate Development.
I also run a small business where I provide independent advisory services to clients, including AustralianSuper, the Carlyle Group, private equity in Washington, D.C., DFAT, New South Wales Treasury, and Amazon. I currently serve as Chairman of Silk Logistics Holdings and as a Non-Executive Director of Indara Corporation, which is privately held by AustralianSuper and Singtel. I hold a Master of Business Administration, a Graduate Diploma in Management, and other tertiary qualifications in mining, including surveying. In light of, and as Philippe mentioned earlier, in light of the board renewal over the past two years, including the changes to the chair and committees as announced on the 14th of September this year, and in order to support continuity in the leadership of Cleanaway, I am seeking re-election at this AGM.
It is my intention to retire as a Non-Executive Director of Cleanaway around the end of FY 2024. Thank you for your support. Thanks, Philippe.
play a pre-recorded video message from Clive." I'll keep them as separate sentences. Wait, "Clive's apology". Is it "Clive's apologies"? "Apology" is singular. "Apologies" is plural. The transcript says "apology". Wait, "three D". If I use "3D", it's numeric. Final check on "Director". "election of Clive Stiff as a Director." "appropriate person for election to the Board." Wait, "Director" vs "director". Rule: "Capitalize formal executive titles when used as titles in running text".
Ladies and gentlemen, good morning, and first and foremost, my apologies for not being able to be present in person at the AGM, as I'm overseas on business this week. I'm honored and excited to be joining Cleanaway, and I really look forward to contributing to the board and helping the business grow and create value for its many stakeholders. As you would have seen in the notice of meeting, in addition to being a Cleanaway Non-Exec, I'm currently a Non-Executive Director of ASX-listed GrainCorp, where I also chair the Sustainability Committee, and I'm a member of the Audit Risk Committee and the Safety, Health, and Environment Committee. I'm a member of the advisory board of Quantium, the leading Australian data science and A.I. company, and I'm also a member of the Australian Advisory Council of Genpact, a New York Stock Exchange-listed digital transformation and process excellence company.
My former board roles include Australian Pharmaceutical Industries, until the company was acquired by Wesfarmers and came off the ASX. I was Chair of the Australian Food and Grocery Council, and Chair of T2 Tea. Finally, I was a Director of Foodbank New South Wales and ACT. During my executive career, I worked in large listed consumer goods companies for 35 years. I was Chief Exec of Unilever, Australia and New Zealand for 8 years until early 2020. Prior to that, I was Managing Director of Goodman Fielder Baking in Australia and New Zealand, and before that, I spent the first 22 years of my career at Procter & Gamble internationally, including a few years as CEO of Procter & Gamble France. I have a Master's in Management, and I'm a fellow and a graduate of the Australian Institute of Company Directors.
Source: "in change and improvement programs, and in M&A". * Yes. * Is there a comma after "M&A"? * Source: "and in M&A, both as a former CEO". * Yes. * Okay. * Wait, "Non-Executive Director". * Is it "Non-Executive Director" or "Non-Executive director"? * Glossary: "Non-Executive Director". * Okay. * Wait, "CEO". *
Thank you. Thank you for that. I'll move onto the next item. The next item of business relates to the granting of rights to the CEO and Managing Director, Mark Schubert. Item 4A of the notice of meeting seeks approval for the granting of 757,660 performance rights to Mark Schubert under the terms and conditions of Cleanaway's Long-Term Incentive Plan, as set out in the explanatory statement to the notice of meeting. Item 4B of the notice of meeting seeks approval for the granting of 67,713 deferred equity rights to Mark Schubert under the terms and conditions of Cleanaway's Deferred Equity Plan, as set out in the explanatory statement to the notice of meeting. The number of proxies received for Resolutions 4A and 4B are on the screen.
Item 5 relates to the conditional resolution to be put to the meeting. However, as less than 25% of the votes cast on Item two were cast against the approval of the financial year 2023 Remuneration Report, Item 5 is not required to be put to this meeting. The Board thanks the shareholders for their support. I'll now take questions on each of the items of business. As noted earlier, I'll first take questions received in advance of the meeting, then questions from those physically present at the meeting, and then followed by written and audio questions from participants who have joined us online.
For those shareholders present in person today, if you wish to ask a question, please move to a microphone and show your blue or yellow admission card to the microphone attendant, who will note your name and introduce you when it's your turn to speak. Please limit yourself to one question at a time to give other shareholders a chance to ask questions. For those attending the meeting online who wish to submit a written question but have not yet done so, please submit your question now via the speech bubble icon on the screen. I now ask Roger if we have any questions from shareholders who have submitted questions in advance of the meeting today.
We don't. We will have questions later as partly online.
Thank you, Roger. I'll now take any questions and proxy questions from the floor, with the first question from the Australian Shareholders Association representative, David Loosemore. Hello, David.
Good morning, everyone. I'm a volunteer for the Australian Shareholders Association. Today, we hold proxies from 44 ASA members for approximately 540,000 company shares. Firstly, I'd like to thank Cleanaway for holding this meeting as a hybrid meeting to allow for maximum participation of shareholders. My first question is, how can recycling be made more profitable? What are the key barriers that the company is working on to overcome that?
Yeah, thank you for the question. It's an excellent question. I mean, there are many instances where recycling is already proving to be profitable. In the main, the answer to your question relates around scale. For a particular material to be available for profitable recycling, the volumes and collection logistics have to be sufficient to make the process work, and there has to be a viable end market for the use of that material. Sometimes those markets develop naturally, sometimes they require some sort of government assistance. Really, they're the factors.
We see profitable, I mean, in Australia, not Cleanaway necessarily, but in Australia, we see profitable recycling in clearly an area of metals, in an area of cardboard, and Cleanaway is directly involved in recycling of a range of plastics. All are good commercial projects.
We've all seen the impact that cyber threats can have on corporations during the year and the potential risk to major infrastructure. Is the company planning any strategic upgrade of IT systems in future years?
I think the short answer is yes. This is an area that the Board spends considerable time on. Basically, our cyber response fits into four buckets of improving our cyber resilience, protecting Cleanaway from intrusions and cyber extortion, elevating our hygiene education, and trialing capacity and reviewing our cybersecurity risk profile. The company has increased things. It already has 24/7 penetration monitoring. We do phishing simulations, extensive employee education, sort of continuous employee education. Whenever we contemplate new systems, new software, new IT, the sort of cyber consideration of those is absolutely at the front.
Is there anyone else that wants to ask a question? I do have some more, but.
Hi, my name is Peter Neal. I just wanted to ask about the issues at New Chum. Have they been fixed? Because it still seems to come up in the media occasionally.
Actually, the board was at New Chum the day before yesterday. I wish I had some footage to show you. The site is extraordinary. The extensive rectification works have been done. Remediation works will start. We have virtually no community complaints from that site anymore. I just want to commend the team on what it's done in terms of the capping works on that site and also the land gas capture works on that site, both of which have materially addressed the issues to which you refer. Back to you.
The association welcomes the improvements in the remuneration report following the first strike. We encourage the company to lift the deferred portion of the short-term incentive above 20% to a more usual 50%.
Yeah, so that's a matter which is under consideration. We have heard that feedback, and over the course of this year, we'll turn our minds to that, but we have definitely heard the feedback.
We also discussed the need for a board skills matrix that assists all shareholders in their voting decisions. While the update in the corporate governance report is an improvement, we'd prefer to see the skills and strengths attributed to individual directors in an unambiguous fashion. Will the company consider an update to the board's skills matrix?
Look, I'm definitely happy to take that on board and give it consideration. As it sits at the moment, the board has discussed that matter. We continue to feel that the most important issue is whether the board, as a whole, has the suite of skills across it that are required by the company, which is why we present the board skill picture in aggregate. We'll take it on those.
The directors have company shares for alignment with shareholders or skin in the game, but less than the equivalent of 12 months' fees. More recently appointed directors have made a start to achieve that, and we encourage all directors to increase their holdings towards the equivalent of 12 months' fees, as trading windows allow. Does the company have a policy of directors increasing their shareholdings in the company?
Yeah, we do. In June 2021, we introduced a policy encouraging shareholders to, over five years, build their shareholding to at least one times their base fee. In fact, all directors are in compliance with that as of this date. Any further questions from the floor? I think we can go to any questions that we have on the online portal, please, Roger?
Yes, Mr. Chairman. We do have questions, written questions online. I'll read them in the order and let you answer each one, and we'll go to the next one.
Thank you.
The first question is from Mr. Stephen Mayne , and his question is the following in a few parts. Could the CEO summarize his past LTI grants since joining the business in 2021 as to whether they are likely to vest or lapse? Also, has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position in the company? Please don't say, "Look it up in the annual report," and through ASX announcements. It's complicated, and the CEO could factually summarize the situation in 60 seconds.
I'll hand over to Mark.
I won't say look it up in the annual report. Very simply, in 60 seconds, no LTI grants that I've received have vested yet because we're still in the performance period. Remember, the performance period is three years, and of course, I've been in the company two years, so that time will come. The first participation will be the 2022 offer. I've never sold any shares in Cleanaway. We don't comment on the likelihood of shares to vest beyond what we say about the performance of the company. It's up to shareholders, obviously, to view the performance of the company forward, 'cause otherwise that'll be differential disclosure.
Thank you, Mark. Roger, the next question.
Another question from Mr. Stephen Mayne , and the question is: Victoria was one of the last states to embrace a container deposit scheme. How does the scheme design compare with other states, and which state models do we think are most optimal?
Hmm.
The vi-
Again, I'll ask Mark to.
Yeah.
Uh.
The Victorian scheme launched on.
Oh, sorry.
Launches on first of November. Over what period are we expecting to invest AUD 40 million in this scheme?
Okay.
All right. Thank you for the question again. Victorian CDS scheme does start on November 1st, so it's literally days away. It is a very similar scheme to the New South Wales scheme. The key difference between the New South Wales scheme and the Victorian scheme is that in Victoria's case, the government, the way they tendered it is they tendered six zones, and they picked three network operators. Whereas New South Wales has one network operator, and that network operator is TOMRA Cleanaway. In Victoria, they've picked three, and we are operating two of the zones, the western zones, so I think the west part of Melbourne and the western part of Victoria.
It's a very similar scheme to New South Wales, but for us, it'll have about a third of the amount of volume going through it as the scheme that we operate in New South Wales, and that's just because we're operating a third of the state rather than the whole state. In terms of the AUD 40 million, we've spent a tiny part of that in FY 2023, and we did that because we needed to get the long lead time items moving to be ready for November the 1st, and then the vast majority of the AUD 40 million will be spent this financial year.
Thank you, Mark. Roger.
There's another question from Mr. Stephen Mayne , and the follow-up question is: Which of the proxy advisors caused last year's remuneration strike with an against recommendation? Did any of the five main proxy advisors, being ACSI, Ownership Matters, Glass Lewis, ISS, and ASA, recommend a vote against any of today's resolutions? If so, what reasons did they give? Will you disclose the proxy votes before the debate on each resolution so shareholders can ask questions about the reasons if there have been any protest votes? Also, why not disclose the proxy position to the ASX with formal addresses to offer more timely disclosure to the market? Many companies now do this.
Firstly, last year, the question in relation to last year, one of the proxy advisors, Ownership Matters, did recommend against the remuneration report. The others supported that resolution. This year, all of the proxy advisors have supported a yes vote for that resolution. We continue to believe that, and we think it's majority market practice, to provide the proxy results as we've done today, so that people can have a proper discussion without sort of prejudging what the outcome may or may not be.
Do we have another question, Roger?
Yes, we do, Mr. Chairman. The next question from Mr. Stephen Mayne again. His question is: It is unusual for a director to spend nine years on a board before appointed as a Chair. Why did it take Philippe so long to land the big job? This is also the first ASX-listed Chairman role that Philippe has been appointed to. After his first month in the role, could Philippe explain how he is reworking his busy portfolio of board seats to make sure he has enough bandwidth to take on a big role, such as chairing Cleanaway? Has he made any changes yet?
Yeah, I'm so tempted to make a joke about Mark Chellew not being able to be pushed out of the role, but the reality is that Mark has been an outstanding Chairman for Cleanaway. The role was just not vacant. I have to tell you personally, I was very sorry to see Mark go. I would have been very happy for him to continue on in the role, but that was his decision. He felt the time was right. I again thank my board colleagues for asking me to take on that role. In terms of balancing workloads, I sit on three ASX boards and now chair this one. I'm also chair of an unlisted infrastructure company.
don't use a comma: "I have other activities outside of those areas in leading a sporting association". This is grammatically confusing. "Those areas in leading a sporting association" implies the areas are part of the association. But he said "outside of those areas". The comma is necessary. Wait, "I always have liked being busy". Is "always have liked" correct? Yes, it's what he said. Wait, "I'm best when I don't have idle hands." "I think I'm best when I don't have idle hands." Wait, "I don't worry about being overworked." "So, um, I, I don't, uh, I don't worry about, uh, being, um, overworked." "I don't worry about being overworked." Wait, "Were it t
Chair, Mr. Chairman, we do have another question from Mr. Stephen Mayne again. His question is: As the new Chair, will Philippe commit to seriously examining three governance and transparency reforms? one, being voluntarily moving to annual elections of directors like BHP and Treasury Wines. Number two, disclosing the outcome of voting by shares and shareholders, a move the ASX itself embraced this week. Number three, publishing a full transcript of the AGM debate, along with a copy of the webcast, so that shareholders who missed the debate can catch up on what happened.
a stutter. * Okay, the transcript looks solid. * Wait, "anywhere else? Our website. Okay." Is "Our website" a sentence? Speaker: "...anywhere else? [Pause] Our website. [Pause] Okay." Yes. * Wait, "Don't need to make a commitment to do that." Is "Don'
Voluntarily moving to annual elections.
Yeah. I mean, every year we consider these sort of matters. The Board, though, doesn't believe that would be in the interests of shareholders, so we've got no plans to move to annual director elections.
We have a final question from Mr. Main. The question is: Could new Director, Clive Stiff, and the Chair comment on the recruitment process that led to his appointment to the Board? Was a recruitment firm involved? Did the full Board interview Clive? Did they interview any other candidates? Did Clive know any of our directors before engaging with the recruitment process?
Yeah. Yes, we did use external recruitment advisors for that search. Yes, the board, I can't say that every single director met Clive, because some may well have been traveling, but the majority of the board most certainly met with Clive before deciding to appoint him. I would be very surprised if some of the directors didn't know Clive. I certainly knew of him. I didn't know him personally prior to him joining the board, but I would be almost certain that some of the directors knew him before his appointment.
Thank you, Mr. Chairman. These are all the written questions we have online. We'll check whether there's any verbal questions.
There are no phone questions.
Very good. There being no further questions, that concludes our discussion on the items of business, and we thank everybody for their questions. As indicated at the start of the meeting, a poll will be taken on all resolutions. Cleanaway's constitution requires that proxies must be lodged at least 48 hours before the meeting. Proxies lodged after that time are not valid. If anyone here is under power of attorney, you may only vote if the power was lodged with the company at least 48 hours before the meeting. Anybody holding a power of attorney in respect of shares in the company that has not previously been lodged may not vote using it. The poll will be conducted by our share registry, Computershare Investor Services. Michael Hutchison from Computershare will act as Returning Officer.
We'll announce the results of the poll and advise the ASX as soon as the results are determined. In-person attendees entitled to vote have been issued with a blue voting paper at registration. The process for in-person shareholders and for proxy holders and attorneys who have received a blue card is as follows. Firstly, shareholders, if you wish to vote for a resolution, please mark the For box next to the corresponding resolution. If you wish to vote against, mark the Against box next to the resolution, and if you wish to abstain from voting, mark the Abstain box next to the resolution. Secondly, if you are a proxy holder or attorney, you must comply with any specific voting direction of the shareholder if you wish to lodge a valid vote. The voting direction is shown on the schedule attached to the voting card you have received.
If you have any questions, please ask one of the Computershare representatives before lodging your voting card in the poll boxes. Please now complete your voting cards and place them in the poll boxes being carried throughout the room by Computershare. If the voting cards have all been collected, I now declare the poll closed. The results of these votes will be released to the stock exchange on Cleanaway's, sorry, and on Cleanaway's website later today. Ladies and gentlemen, that completes the business for today's meeting. I now declare the meeting closed, and thank you for your attendance.