Good morning, ladies and gentlemen. Please let us know if you can't hear this. My name is David Trude, as Chairman, I welcome you to the 26th Annual General Meeting. This is our sixth year running the AGM virtually, and we are very pleased with how this format allows all our shareholders to participate easily and equally, no matter where you are. If we do experience any technical hiccups along the way today, we may need to pause briefly or, if necessary, adjourn. If it happens, I'll let you know straight away. Voting on resolutions is open and will remain so until five minutes after the end of the meeting. Now for the formalities of the meeting. The notice of the meeting was duly given, and the meeting has been properly convened. We will turn to resolutions later in the meeting.
Please note that only shareholders, proxy holders, or shareholder company representatives may vote. I note that there is a quorum present, and I declare the meeting open. I'd like to introduce my colleagues joining me at this AGM listed on page three, Andrew Hansen, our Global CEO and Managing Director, our non-executive directors who are off camera but with me here in Melbourne, Bruce Adams, our Deputy Chairman, David Howell, Don Rankin, Lisa Pendlebury, and Rebecca Wilson. I would also like to introduce our Company Secretary, Julia Chand, as well as representatives from our auditors, RSM Australia Partners. Beginning with operational highlights, commercial momentum was a clear feature in financial year 2025. In January 2025, we signed a transformative five-year agreement with VM O2, a joint venture between Telefónica and Liberty Global.
We have also signed a strategic five-year agreement with one of U.S.A.'s largest renewable energy portfolios for an estimated contract value of AUD 16 million. We secured Vattenfall in Finland with a AUD 5.5 million contract, supported Å Entelios in Denmark, and grew Hansen Trade recurring revenues through multiple new developments. In Germany, our transformation of powercloud is delivering results. We've streamlined operations, relaunched as Hansen Germany, acquired assets from Canuti, and achieved positive underlying EBITDA. These are important milestones that strengthen our European presence. We are continuing to invest in and leverage the opportunities that AI is enabling across many parts of the business, lifting productivity and quality whilst maintaining robust profitability and a strong balance sheet. In summary, financial year 2025 was a good year for Hansen. Moving to page seven, I'll briefly summarize the results for the financial year 2025.
Operating revenue was up 11.2% to AUD 392.5 million. Underlying EBITDA increased 20.9% to AUD 111.7 million, with a margin of 28.5%, and cash EBITDA rose 21.5% to AUD 93.4 million with a 23.8% margin. Underlying net PAT of AUD 56.9 million was up 43%, and statutory net profit after tax more than doubled to AUD 43.3 million, up 105.7%, reflecting improved efficiency, disciplined cost management, and continued progress in Germany. By operating segment, communications and media grew 15% to AUD 171.3 million, benefiting from ongoing digital transformation and modernization programs. Energy and utilities revenue grew 8.3% to AUD 221.2 million, supported by resilient demand and the contribution from our German acquisition. In short, we delivered double-digit top-line growth, strong operating leverage, and material earnings improvement while strengthening the balance sheet and positioning the group for continued growth and further operational efficiencies.
Before handing over to Andrew, I want to take a moment to acknowledge my fellow director and Deputy Chairman, Bruce Adams, who is retiring and will not be seeking re-election for his remarkable contribution to Hansen over the past 25 years. Throughout this time with Hansen, Bruce has been a trusted voice on our board, bringing excellent legal insight and steady guidance to every chapter of our journey. His unwavering dedication and integrity have left an indelible mark on our business. On behalf of the executive team, the board, and myself, I extend our deepest gratitude to Bruce for his exceptional service and support and wish him every success in the future. I will now hand over to Andrew.
David, thank you, and welcome everyone for joining the call today. Certainly, everyone has noted now an impressive result for last year, which sets us up for the future. It would be probably remiss of me, David, not to probably also comment on Bruce Adams. Whilst I probably understand the investment community has probably had enough examples where they like to have independence, at the same time, Bruce Adams, who was an external lawyer to Hansen before he joined the board, has been invaluable as a sounding board to myself and the rest of the executive. He will be surely missed. Certainly, some of his guidance and his advice has been paramount. It was, I know, when Bruce handed in his resignation, it was when I sat in for a number of days.
Bruce, you remain a friend of Hansen, a friend of mine, and we wish you all the best for the future going forward. Just a little bit now on Hansen for those who are joining us. As it's noted, I think to be sitting in a business which has about 14.5% CAGR since 2008, my time since leading this business to have it continually growing and making more money year on year out, I think even, David, the way we talk about cash EBITDA, it's the hallmark of our business to not only be able to provide dividends for our shareholders, but to provide working capital and now, as you'll use, additional capital for acquisitions, I think is exceptional.
We're a business now with about 1,600 employees, with some efficiencies flowing through, but I'll get to some of that in a moment now, and with software in 80-plus countries. Very industry-specific what we do, and we're having a fantastic year, and our future looks brilliant. Just moving to sustainability. Certainly, this is a topic which is dear to a lot of people and need to understand, and also some pressure from some of our customers in the Nordics, which were very early adopters of it. It's been a good eye-opener for Hansen and what we do. We do have some limitations because we're not a distribution, manufacturing, or retailer. We really largely have a workforce with laptops. A lot of our work is probably where our offices, where we operate in our offices.
David also probably some of the areas like where we're in data centers, where we're minimizing some of the work which we actually do. We've listed some highlights there. I think the best one would be a 40% reduction in our emissions here in Australia, etc., as we go forward. Certainly, some of our software applications and some of the AI focus is actually pointing to some much better decision-making processes. Diverse workforce, I think Hansen probably leads the way and has for decades now, having a very strong female leadership council inside our business. We are pushing our suppliers equally to actually address these things because it's probably one of those last areas where, whether we're buying laptops, etc., or cleaning, we're asking our own suppliers to come to the market on that. We're certainly Australian sustainability and reporting standard, reaching those new levels with the ASB compliance.
Also, on top of that, when you see some of the recognition which we're receiving, David, in carbon neutral, Equivarius, etc., ratings, etc. We've got a team of people which work on this at the moment now, and I know our staff strongly participate in those successes, etc., and a lot of internal projects where we talk about sustainability. Once again, I thank you for the team leading this force. What started off was going to be an expense to the company, but we're seeing it play out in just some of the rewards we're receiving and recognition from our third party. Driving operational efficiency, look, there probably is not a company which doesn't talk about AI these days.
It's the forefront, and I think everyone on the call today, one shape or another, is actually using some AI themselves now and seeing some of the benefits it's doing it. We took a view around AI and a reasonably early adopter into AI, and basically was to actually work with a lot of our tools which we use to support our applications. It's not only giving our own staff quicker decision-making, but also for our customers to quickly align with data, quicker data to make better decisions. We're seeing the benefits enormously flowing through now and optimizing a workforce which the productivity has been able to improve. We've been able to improve our productivity and also have a sharper workforce because our ability is now to develop software to test regression testing or fault finding that AI has made a big difference to our business.
We will continue to invest largely in AI. We've got a couple of initiatives before us at the moment now, which is to go even further. Strong consult with our customers as well about their own expectations and what they're looking for. We see this as the start of a journey. It's a continuing journey, David, with AI and one which I think we are seeing enormous benefits through the organisation as we embark on it. A lot of people are talking about it, but we're doing a lot of doing rather than just talking about it as well. Just turning to M&A, I joined Hansen from an M&A type background and have continued. I think we've been exceptional in our ability of focusing on M&A. We have very targeted in what we believe is the right process.
We certainly look at expanding our M&A into our existing marketplace, which is the energy utilities marketplace and cross-communications. We see that where we're finding adjuncts to our own applications or where it moves to new locations, etc. I know we've been speaking for a few years, and some would be saying, "Well, what are you doing with a potential third vertical?" Hansen's recognised our strength is we are a global organisation with corporate services, account management, servicing the whole world. Trying to find opportunities to go into those marketplaces we feel are good, and we've talked about whether it be the financial services, the insurance markets, or industries where we also have in-house knowledge of dealing with data, compliance, etc., which work well for us. We stay very true to what our focus is.
We've put up there on the slide, we've always liked mission-critical applications. We like that it's close to the cash register, so we like to be where the decisions are being made by businesses. We like to see where we can leverage technology or adjunct or bolt-on technology for us as well. We do like tier one, tier two. We think tier one and tier two is important to us as well because that's the business which we're largely in at the moment now. We do want to make sure we've got clear ownership of IP, clear sharing of IP because that's the way our business runs where we do own all our own software. Predictable cash flow, revenues, etc., is also fundamental. Certainly, where we can leverage existing customers and grow our existing customers.
We call that basically our bullseye, and that's what it's going to sign off. When we take that approach and we think of the third vertical, we're making sure that third vertical, and we've looked at lots so far, we do have a sustainable business, David, that we can actually maybe buy a business where we can leverage that business and grow that business beyond as we go forward. Moving to our next slide, turning to page 14, Digitalk. Look, this has been after many, many months. This was actually a competitive process they were going through, but it quickly led to that we were the natural owner of that business. We were dealing with the founder who founded this business back in 1996, so very similar hallmarks or process to the way Hansen sees its business.
Sixty-plus employees and with software in many, many countries, 30 countries and 150 operators. Operates just outside of London in Milton Keynes. The applications they provide are complementary to Hansen. They are not competitive to Hansen's processes, and therefore, we just saw this as a fantastic business that we can unlock the opportunities of Digitalk by providing that global platform which we talked about before. I know we've already spoken about, but just the highlight of that business, the purchase price is GBP 33 million for the business. That was approximately 10 times the value to cash EBITDA on the business, so its earnings are accretive to us. We have such strong banking relationships. We are able to provide that from a combination of cash and debt, and it will be a wholly owned subsidiary of Hansen.
As noted, we are waiting for a regulatory sign-off, which we're expecting sometime in the next few weeks. We are already effectively involved in the business and giving some guidance whilst we're waiting for that regulation to come through. Turning a little bit more, the strategic rationale was it was a clear adjacency to our business. We also see the technology around the MVNO marketplace as one, which is our virtual mobile operators, is a business which is growing worldwide at the moment now. It does interject across our own catalogue and CPQ products, so we see the benefits there. It is already a SaaS cloud-native offering, which is important to us. We really believe that one of the conversations we had very early is how can we unlock the opportunities of the Digitalk business globally by taking a footprint.
I think the management team and the owner have done a fantastic job building the business, and I think are largely excited. We will continue to have an ongoing relationship on one of our teams where the CEO, Justin, will continue to have a relationship with Hansen going forward. It is mission-critical software. It's got a combination of tier one, tier two, and tier three customers around. They're all long-term, so ultimately, what we're looking here, this is unlocking the full potential of this business, and so we're very excited to bring it on board. Just turning the page to Outlook. Always the important slide people are looking for. We remain extremely confident about achieving our midterm or our growth targets, really built around the three fundamentals: the visibility of our business, because of our recurring revenue streams, the low churn, and our installed base.
Our execution, I think, is second to none, our playbook, whether it be by M&A and Hansenization. Operational disciplines of this business have always been there. It comes into opportunities. There is no doubt decarbonisation, smart grid rollout, cloud SaaS are all opportunities where our business continues to grow. It's all about automation, AI taking place at the moment now, so we have little doubt that we're confident in delivering a 5%-7% organic growth and sustainable EBITDA margin of 30% going forward. We sit here very confident in our business and our future at the moment now. Just to drive some of those points home, it's around customer momentum. We've listed some customers there for everyone to look at on the slide, various customers.
It's always awful calling out some customers because you'd understand during the year there's dozens of customers which are renewing with us at the moment now. We do have a very slow churn, but we're closing these deals because we're also a product which is all about fit for purpose, value partnership, and best of breeds, which is a combination of how we actually manage our customers, but more importantly, how we deal with things like R&D, etc., to become relevant for our customers going forward. Just to drive on that continuum, is that confidence in our support and maintenance. I think everyone would understand we own our own software. We own the IP. It means the source code is ours.
Our customers pay support and maintenance to get access not only to support of their application, but also to be able to use their application to be able to get upgrades and updates of their applications moving forward. You can see a beautiful uptick of the growth of both our utilities and the communication sector going forward. We continue to be very pleased by speaking with our customers to get their renewals. We have lower churn, but also see that fundamental growth in our business. On that note, David, the outlook continues to look very, very positive to Hansen, the cash-generative nature of our business.
It goes for me certainly to thank not only all of our customers for entrusting their business through Hansen, but all the hard work and dedication of a team of people which are key members of the Hansen family, which are able to meet those customers' expectations. Thank you to everyone. David, on that note, I think I'll hand back to you.
Thank you, Andrew. Ladies and gentlemen, we now come to the formal part of the meeting, matters requiring resolution which are outlined in the notice of meeting. The resolutions for consideration today may only be voted on by shareholders, proxy holders, and shareholder company representatives. Shareholders online through the virtual meeting website can ask questions via text on each matter being put to shareholders. Those joining via the phone may also ask questions verbally.
Consideration of accounts and reports, I wish to start by tabling the 2025 annual report containing the Director's Report, the financial statements, Director's Declaration, and Independent Auditor's Report. Copies of the 2025 annual report were either distributed by post or made available online to shareholders. For the purpose of today's meeting, I intend to assume shareholders have had sufficient opportunity to review and consider the content of the annual report. As previously commented, representatives of our company's auditors and RSM Australia Partners are present and available to answer questions. Are there any comments or questions regarding the various reports and financial statements contained within the 2025 annual report via the online platform? Julia.
Thank you, Chairman.
There are no more questions from the online platform. I would now ask the moderator if there are any questions via the phone.
No questions via the phone at this time.
Thank you. The introduction of the resolution, moving to the resolutions, votes can be submitted throughout the meeting for five minutes after the close of the meeting. I intend, as Chairman of the meeting, to vote in favor of all resolutions with the open votes given to me. The results will be announced to the ASX after the conclusion of the meeting. I would now like to deal with the formal resolutions contained in the notice of meeting. Resolution One, adoption of resolutions remuneration report. The first resolution relates to the adoption of the remuneration report. At this stage, I wish to advise that all directors and executives named in the remuneration report, as well as any person or party associated with any of them, are excluded from voting on this resolution in respect of shares they own or control.
The resolution for consideration as a non-binding resolution is as follows. In accordance with the requirements of the Corporations Act, adopt the remuneration report for the year ended the 30th of June 2025 as it appears in the director's report within the annual report 2025. Are there any questions regarding the remuneration report via the online platform, Julia?
Thank you, David. There are no questions on the remuneration report.
If there are no questions via the online platform, I will now ask the moderator if there are any questions via the phone.
No questions via the phone at this time.
Thank you. You can see on the screen the proxy position of the resolution prior to today's meeting. Thank you. I will now move to the remaining resolutions, each of which is an ordinary resolution requiring a 50% vote in favor to be successful.
Resolution Two, the re-election of Lisa Pendlebury. I now consider Resolution Two that Lisa Pendlebury, a director retiring by rotation in accordance with the company's constitution and being eligible and having signified a candidature for Office B and is hereby re-elected a director of the company. Are there any questions regarding this Resolution Two via the online platform, Julia?
Thank you, David. There are no questions in relation to the re-election of Lisa Pendlebury.
If there are no more questions via the online platform, I would ask the moderator if there are any questions via the phone.
No phone questions at this time.
Thank you. You can see on the screen the proxy position for the resolution prior to today's meeting. I think by that, Lisa, it would be that you are likely to get in. That's not bad, 96.5%.
Resolution Three, grant of performance rights to Managing Director Andrew Hansen for financial year ending the 30th of June 2026. Moving to Resolution Three, that for the purpose of Listing Rule 10.14 and for all other purposes, shareholders approve the grant of 113,419 performance rights to Andrew Hansen under the Hansen Technologies Incentive Performance Rights Plan on the terms and conditions set out in the explanatory notes. Are there any questions regarding Resolution Three via the online platform, Julia?
Thanks, David. Yes, we have a question from shareholder Stephen Maine. He states, "Well done for disclosing the proxies early with the formal addresses and also for achieving strong voting support on all resolutions. This is a good sign and different from the material protests of years gone by.
What are the major changes that we've made to win over the proxy advisors and institutional investors, including on resolutions like this LTI grant?
Always good to hear from you, Stephen, and thank you for your opening comments about what we're going. Look, from my point of view, not all proxy houses do openly entertain engagement done by companies. We have, I think, in the last couple of years, worked harder to listen to what our shareholders and what they've had to say, Stephen, along with that engaging with them to explain our processes going forward. I think it's a combination probably of getting the information out early and engaging with them and also listening. Yeah, appreciate it and certainly appreciate the voting in favour of my performance rights this time. Thank you all.
If there are no more questions via the online platform, I'd ask the moderator if there are any questions via the phone.
No phone questions at this time.
Thank you. As you can see on the screen, the proxy position for the resolution prior to today's meeting. Are there any other questions before we close the meeting?
Yes, David, I have quite a number in the general business. Two of them, so I'm just going to combine two of them, one from the Australian Shareholders Association and Stephen Maine, just like you to address the ongoing succession planning for both yourself and Andrew.
I hope people aren't suggesting the dynamic duo were to be broken up. David, I'd be very disappointed if that was the case. Look, I think our business succession planning is part of Hansenization. It actually drills deep from the lower echelons of our organization to most senior. This is a regular topic for the board, David. I know you sit in amongst it as well. It's always hard talking about ourselves in this particular case. What I can assure all shareholders, succession planning is something which is constantly spoken of. We have plans and a case for something untowards happening to any of us, but also that handover so we make sure we don't have any single points of failure. That goes by myself, certainly yourself, David, but other directors all the way down to operational managers. I think the best way to answer that is something which is a regular topic which is constantly looked at.
I think we would also be considering our value contribution to the business and where that actually sits in our value to the company. Whilst we're still adding value, I'd like to think we have a relevant role in the business.
Can I just add to that? This is a subject that is discussed at the board on a very regular basis, quite openly. I just leave it at that, I think. Thank you .
I have another question from the Australian Shareholders Association. He just would like you to, in relation to corporate sustainability, can you have an update on the transition from buying offsets to reducing emissions?
Yeah, look, I think that's a great question. I think the idea that people can actually buy their way out of bad by buying offsets. From this year going forward, Hansen won't be buying any further offsets.
We're also moving from Australian standards that David and shareholders to actually global standards at the moment. Now, I think most people would understand that Hansen, our ability to minimize offsets, we're not a manufacturer, we're not earth moving. We really have a workforce with laptops. So it's really limited. So our abilities come down to the offices and our NASPA's rating where we have low things. Also, as much as we can by reducing the amount of power used in our data centers is probably another area which we have a long focus on. I know our team also largely work with nearly all of our suppliers and mainly with our suppliers to make sure what are they doing at the moment. I accept the point. We too don't like the idea of buying offsets.
I think the 40% reduction we talked about, what we've done in Australia is proof of putting what Hansen's actually doing. Just moving forward, we will continue to drive it as best we can, but we are a little bit limited, but we'll continue to report on it going forward. A good question, and thank you.
I have another from the Australian Shareholders Association. Can you please publish your director skills matrix in the annual report that enables retail shareholders' background and confidence in order to cast their votes for the election of directors?
I think that is on our website. It is. Just for everyone on the call, our website, because it's constantly updated, whereas the annual report is a piece in history. We have elected to actually have the skills matrix on our website, and that's where it's updated. For everyone, anyone doing update, certainly that would be the location to find it where it's regularly updated. Thank you, Julie.
Another one from the Australian Shareholders Association.
She's busy. Very busy.
We've got a limited file. Congratulations on the business results this year and the further expansion with Digitalk. What's your key differentiation from competitive SaaS providers which will make Hansen more attractive to your target market?
Now, that's a very, very tough, long-winded question. The principal activity of software as a service is actually about lowering the cost for our customers. So SaaS to us is being able to get the benefits of bulk buying services or hardware from people. The differentiator to Tesla is really our application, less so about the operation of our hardware.
As far as we're concerned, I think the differentiator for us is always our software meeting their expectations and driving efficiencies into their business. Part of that process is the cost of serving and people wanting an application to be successful, successfully managed, etc. There is a lot of talk about data centers now and the efficiencies which we're getting out of it is what we actually drive. To be honest, it's probably more around our application because a lot of the SaaS is actually a pass-on cost from third parties. A good question. Thank you.
I have one more question from Stephen Maine. When disclosing the outcome of voting on the resolutions today, please advise the ASX how many shareholders voted for and against each item, similar to estate arrangements. This will provide a better gauge of retail shareholder sentiment on resolutions. Also, please make a full AGM webcast published online for the benefit of shareholders unable to watch live. I'll look at the second question.
Yes, I mean, that makes sense. And certainly, we comply with our obligations in actually registering our votes. I would like to think we're consistent with our obligations and doing it. Stephen, thank you again.
I have no further questions on the moderator platform. Does the moderator have any other questions?
No phone questions from the phones at the moment.
Thank you very much. We appreciate everyone attending. Hopefully, the way we do these meetings, it does give everyone the opportunity to participate given that we do have a shareholding quorum that is right around the world. Thank you all. I appreciate it. Bye.