Welcome to the Annual General Meeting of Megaport Limited. My name is Bevan Slattery, Chair of the company. I'd like to begin by acknowledging and paying my respects to the Turrbal people who are the traditional custodians on the land at which Mengport's headquarters stands and we're presenting from today. I'd also like to pay my respects to Elders past and present and to extend respects to the Aboriginal and Torres Strait Islanders who are joining our Annual General Meeting today. On behalf of the Board and staff of Megaport, it is my pleasure to welcome you to our AGM for 2021.
As we have a quorum, I declare the AGM open. I'd now like to introduce you to the members of the Board members of the Megaport Board of Directors. Vincent English, our Executive Director and Chief Executive Surat and I together here in Brisbane. Due to COVID-nineteen travel restrictions, our other Megaport directors, Naomi Seddon, Jay Adelson, Mike Clayco, Melinda Snowden, and Lloyd Gordon are joining us online today. Also joining us online are Sean Cassidy, our Chief Financial Officer and Sylvia Fesson, our company secretary.
I'd also like to introduce Richard Wunsdell of Deutsche Tushnetso. Richard is available to take questions on the conduct of the audit and the preparation of the content of the independent external auditors report. We have not received any apologies from shareholders unable to attend this meeting and have not received any questions prior to the meeting. As you know, in response to COVID-nineteen conditions, today's meeting is being held online by the Lumi platform. This allows shareholders, to and guests to attend the meeting virtually.
All attendees can watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions and submit notes. Online attendees can submit questions at any time. To ask question, select the messaging tab at the top of the Lumi platform. At the top of that tab, there is a selection sorry, there is a section for you to type your question.
Once you've finished typing, please hit the arrow symbol and send. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your question may be moderated or if we receive multiple questions on one topic and they'll be metered together. Questions that have been submitted regarding other items of business will be held over until we come to those items and general questions to the business of the company will be addressed after the meeting closes. For those shareholders who wish to ask a verbal question, an audio questions facility is available during the meeting.
To use this service, please pause the broadcast on the Lumi platform and then click on the link under the Ask Audio Questions. A new page will open where you'll be prompted to enter your name and the topic of your question before being connected. You will listen to the meeting on this page while waiting to ask your questions. If you have any issues using the system, please return to the Lumi platform. Finally, due to time constraints, we may not get to answer all your questions.
If this happens, we will answer them in due course via e mail or posting prompt responses to our website. Voting today will be conducted by way of a poll on all items in business. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. At that time, if you're eligible To vote at this meeting, a new voting tab will appear. Selecting this tab will bring up a list of resolutions and present you with the voting options.
To cast your vote, simply select one of the options. There is no need to hit and submit or enter button as the vote is automatically recorded. You do, however, have the ability to change your vote up until the time I declare voting closed. The proxy votes already received a contained in their presentation today and will be displayed on screen at the appropriate time. All undirected proxies will be voted by me in favor of the resolution to the extent I'm permitted to do so.
I now declare the meeting sorry, the voting open on all items of business. The voting tab will soon appear. Please submit your votes at any time. I will give you a warning before I move to close the vote. I'll now give the Chairman's address.
I'd like to refer all shareholders to the company's 2021 annual report, which is released on the 10th August this year. This included a letter to shareholders from me as well as extensive information of the company and its operations. As I said out in my letter, from humble beginnings, Megaport is now a global leader in automated connectivity. Our vision was simple, be the world's leader in software defined connectivity. What started in 2013 as a software defined network in Australia in our services over 2,200 customers in over 760 locations in 136 cities across 23 countries.
This year we launched a vehicle virtual edge, a service that takes our platform beyond the data centers and helps enterprise accelerate their journey into SD WAN and SASE. Customers are now sorry, customers are now connecting branch locations like office buildings, corporate campuses and storefronts to our rich ecosystem of service providers. We have integrated with many of the leading SD WAN providers to deliver maximum flexibility and our engineering teams are hard at work integrating new technology partners to further increase the power of choice in keeping with our neutral model. MBE is an incredibly exciting platform it provides a virtualized environment for hosting additional network functions on demand and with no need for additional hardware. SD WAN support it's only the first of many use cases to come.
For our customers and partners, agility is the name of the game. The past year has shown us that the ability to adapt to shifting demands on IT system makes or breaks the business. Our acquisition of InovaEdge, a service orchestration and automation company will allow us to integrate the Inovo Studio service to Megaport's platform. This will give customers the ability to not just use Megaport to provision services to the cloud, but let us now take them through the cloud. The EnovaEdge team's expertise in developing and automating perfectly complements Megaport's software defined networking capabilities.
Combined, we empower even greater agility for our partners and our customers alike. As the 1st mover in the thriving network as a service space, channel partners have always played a critical role in Megaport's success. We have learned much since launching services in 2013 and recognize an opportunity to truly align NAS to play as a foundation role in the channel to speed up service adoption. This is why we've developed Megaport Partner Advantage, a world class channel program. With Megaport Partners Edge, channel partners will greatly benefit from the ability to rapidly connect their customers to services directly through Megaport.
Channel partners can accelerate providing solutions for their customers and seamlessly boost cloud service adoption. I'm incredibly excited about Megaport Partner Advantage and and look forward to seeing the program provide greater audience for our capability and scale to our operations. I'm very proud of Megaport's enduring drive to innovate and deliver value to our customers, partners and shareholders. I'm incredibly proud of our team. Their resilience in the face of diversity and culture that has been created under the leadership of CEO, Vincent English.
I'd like to take this opportunity thank the Megaport team and you, our valued shareholders, for your continued support as you transform the way the world does business in a cloud economy. I'll now hand over to our CEO and Executive Director, Vincent English, who will provide his address.
Good morning. Thank you, Ben. Megaport has fundamentally changed the way network services are bought and consumed. Point, click, connect is more than a model. It's the philosophy that underpins our technology and innovation roadmap in order to make our customers' lives easier.
The buying behavior for IT services has evolved significantly in the past few years. Today's IT decision makers are focused on using platforms and tools to achieve the infrastructure less and agile the demand and controlled ease of use and services that work together with minimal to no manual work. In essence, automation and integration are now fundamental requirements. The shift in the IT enablement landscape has guided our journey from a service providing connections with data centers to a global platform, powering holistic connectivity solutions for all aspects of IT enablement. Through this journey, cloud connectivity has continued to play a central role in our success, representing 65 and of the connections that happen on Megaport's software defined network today.
According to Gartner, Worldwide public cloud services end user spending will reach US397 billion dollars in 2022. Multi cloud adoption is a driving factor in these remarkable numbers, and 35% of Megaport's customer use our platform to connect to multiple cloud providers. That number continues to accelerate as we connect to more cloud on ramps and innovate our platform to reduce the complexity of getting connected. A key enabler for this is Megaport Cloud Router, MCR. Since being launched in 2017, MCR has made it extraordinarily easy to connect cloud providers directly together in a point click fashion, reducing the complexity of implementing multi cloud and hybrid cloud architectures.
The number of production MCRs grew 65% in fiscal year 2021, with more than 500 of these innovative virtual rotors in service. Using the same technology platform that supports MCR, we were able to develop Megaport for HSSNVE, which supports connections through leading SD WAN technologies. With the formal launch of services In March 2021, customers are now connecting their branch locations into the Megaport platform to manage global network services on demand. Initial MDE adoption is similar to that of the MCR in its 1st few months, and we expect to see accelerated growth in the product based on the strong pipeline. We won't stop there.
Since orchestration and automation play such important roles in today's IT landscape, we will leverage our acquisition of InovoEdge to drive new features that empower our customers with predictive capacity management powered by AI. Our platform will provide greater end to end control of IT resources and increased visibility to drive performance and Essentially, we will provide our customers the tools that they need to get their users, locations and services all connected with ease. As I said before, with our technology roadmap, including the integration of NovoEdge Services, Megaport will take customers to the cloud and through the cloud. Megaporta 2 Group EBITDA breakeven in June 2021. This is a strong validation of our business model, and there is additional operating leverage based on the investments to date.
Asia Pacific, for example, is Megaport's most mature market and generated a profit after direct network cost margin of 73% in June 2021. Europe achieved EBITDA positive position for the entire fiscal year in 2021. And North America, which represents the largest target address to the market is growing at the fastest rate, with 47% growth year over year in monthly recurring revenue. The Megaport mission for this year is to scale up, scale out. This is a commitment by everybody at Megaport to accelerate our growth on our innovation cycle to increase our lead in the NAS space.
With a proven business model, the trust of to partners and customers and a leading platform built for innovation. We are well positioned to achieve this. We are investing in revenue growth by making investments in further market expansion, product and service innovation, and most critically, the people responsible for making Megaport, the transformational technology company that is changing the way IT services are built today and tomorrow. To truly scale, We've developed our channel program, Partner Vantage, to take advantage of the power and the reach of the Megaport platform, which is built on continued product innovation. Partner Vantage bolsters our support for existing channels like data centers, networks and managed service providers and launches new features and capabilities to for the additional channel segments such as value added distributors and value added resellers.
For the first time ever, VADs and VIRUS will have the ability to offer real time connectivity to tie services and locations together as part of a holistic solution. The investments we are making in our channel program and the new services that we are driving through our product innovation will amplify our go to market capabilities and position us to to capture greater market share as businesses increasingly adopt agile networking. I would like to thank the entire team for another hugely successful year. Without each team member driving our customer and partner solutions and executing on the wider global strategy with passion and enthusiasm. Megaport will not have delivered to massive achievements in fiscal year 2021.
On On behalf of the team, I sincerely thank you for your investment in Megaport. Thank you.
Thank you, Vinnie. We now come to the formal business of the meeting. As set out in the notice of meeting, there are 12 resolutions to be considered today. The resolutions have been outlined and explained in the explanatory memorandum that was included with the notice of meaning. Each resolution will be put to the meeting.
Shareholder questions, which is submitted, which are relevant to the resolution will be addressed by May. I will then advise the number of proxy votes received in each resolution before moving to the next item of business. Each resolution set out in the notice of meeting is to be considered as an ordinary resolution and as such must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. Once the voting is cast, our share registry provider will tabulate the results, which will be released as soon as possible today on the ASX. Those results will also be displayed on our company website once available.
I'll now turn to the financial statements for Megaport Limited. We have received the annual report of the directors, the auditor's report and the financial report for the financial year ending 3rd June 20 21. I now invite shareholders to comment or ask questions of the reports of the company. Questions may also be asked of the auditors about the conduct of the audit, the content of the audit report, accounting policies adopted by the company and the independence of the auditor in carrying out the audit. Cecilia, are there any questions or comments?
No, there are no questions on this item of business.
As there are no more questions or no questions, we'll now move to the formal resolutions. The first resolution in the notice of meeting is a non binding resolution to adopt the remuneration report. Please note that the vote on this resolution is advisory only and does not bind the company or the directors. Voting solutions to this resolution as set out in our instant meetings. The resolution is the remuneration report of the directors for the financial year ended 30th June 2021 be adopted.
And now welcome questions with respect to the remuneration report. Celia, are there any questions on the REM report?
No, we haven't received any questions.
Okay. As there are no further questions, the proxy votes received in relation to this Resolution are now on screen. 4, 64,000,000 654,106 discretionary revenue 92,256 against 25 $1,073,901 and abstaining is 1,952,942. For Resolution 2, I ask you to consider, if in favor, to pass the following resolution as an ordinary resolution. Mike Clayco, being a director who retires in accordance with the Rule 9 on 2B of Megaport's constitution and ASX Listing Rule 14.4 and being eligible to be elected as a Director of Megaport.
As set out in the notice of meeting, Mike is seeking election as a Director of the company. Mike's background and qualifications appear in the explanatory memorandum to the notice of meaning. For the reasons set out in the explanatory memorandum, Mike has the full support of the Board for his election. Are there any questions or comments regarding Mike's election?
No, we received no comments or questions on this item.
Okay.
As there are no further questions, the proxy votes received in relation to this resolution are now on screen. Mike will not vote on this item. 4, dollars 102,000,000,900 and 35 especially our open 88,101 against 19,877 and abstaining 220,081. For Resolution 3, I ask you to consider and if in favor to pass the following resolution as an ordinary resolution: that Ms. Melinda Snowden, being a Director who retires in accordance with Listing Rule 19.2B of Megaport's Constitution and ASX Listing Rule 14.4 and being eligible to be elected as the Director of Megaport.
As said at the NOSA meeting, Melinda is seeking election as a Director of the company. Melinda's background qualifications and experience appear in the explanatory memorandum to the notice of meeting. For reasons set out in the to the explanatory memorandum. Melinda has the full support of the Board for her election. Are there any questions or comments regarding Melinda's election?
No, there are no comments or questions on this item.
Okay. As there's no questions, the proxy votes received in relation to the resolution are now on screen. Melinda will not vote on the items. For 100,178,197 discretionary or open 113,184 against 1,906,794, of sounding 220,119. For Resolution 4, I ask you to consider and if in favor, pass to holding resolution as an ordinary resolution that Ms.
Lo Gordon, being a Director who retires in accordance to Listing Rule 19.2 of Megaport's constitution and ASX Listing Reporting.4 and being eligible to be elected as a Director of Megaport. As said out in the notice of the meeting, Glo is seeking election as the Director of the company. Glo's background qualifications and experience appear in the explanatory memorandum for the notice of the meeting. For reasons set out in the explanatory memorandum, GLOW is the full support of the Board for her election. Are there any comments or questions regarding GLOW's election?
No, there are no questions.
Okay. As there are no further questions, the votes received in relation to this resolution are now on screen. GLO will not vote on this item. For, dollars 102,000,000,88,512 discretionary or open 89,101 against 20,600, abstaining 220,081. We now move to the special business of the meeting.
The first special business is the approval of the Megaport employee share plan. For Resolution 5, I ask you to consider and if in favor to pass the following resolution as an ordinary resolution that for the purpose of ASO Assisting Rule 7.2 from 13 and all other purposes, issues of equity securities under the ESP, the details of which I set out an expenditure memorandum be approved as an exception to the AOC System Rule 7.1. The ESP was last approved by shareholders in 2018. The ESP was established by Megaport to offer eligible participants across the business sorry, across Megaport's business the to become shareholders of Megaport and enhance employee engagement by aligning employee interests with Megaport's performance and interest to shareholders. The directors unanimously recommend that Shell's vote in favor of this resolution.
Are there any comments or questions on Resolution 5?
No, there are no questions.
Okay.
As there's no questions, the proxy votes received in relation to this resolution are now on screen. Voting exclusions applied to this resolution as set out in the notice of meeting for $89,641,141 discretionary were open 89,308 against 815,695 abstaining $2,834,543. Resolution 6, I ask you to consider Anif in favor to pass the following resolution as an ordinary resolution that for the purposes of ASIC System Rule 7.2, exception 13, and all other purposes, issues of securities under the Enclosure Option Plan General, the details of which are set out in the expenditure memorandum be approved as an exception to this base at System World 7.1. The ESOP General was established prior to Megaport's listing on the ASX in December 2015 and was last approved by shareholders in 2018. That Aesop General is designed to focus executives on delivering long term shareholder returns and retain key employees of Megaport for the long term.
The directors unanimously recommend that shareholders vote in favor of this resolution. Are there any comments or questions on Resolution 6?
No, there are no questions. Okay.
As there's no questions, the proxy votes received in relation to this resolution are now on screen. Voting and Solutions apply to this resolution as said out in the notice of the meeting. For, 73,097,157 discretionary open 88,101 against 16,418,000 abstaining 3,777,335. We now go to Resolution 7 regarding the grant of options to Non Executive Director, Mike Claytor. For Resolution 7, I ask you to consider, if in favor, to pass the following resolution as an ordinary resolution.
That for the purpose of ACE's existing rule 10.14 and all other purposes, shareholders approved the grant of 100,000 options with an exercise price equal to the closing price of Megaport shares on the ASX on the trading day before Mike Claco's appointment as a director being $11.78 and the issue of up to 100,000 megaport shares on exercise of those options to Mike Claker as detailed in the explanatory memorandum. The directors abstain the interest of corporate governance for making a recommendation in relation to Resolution 7. Are there any comments or questions on Resolution 7?
No, there are no comments or questions.
As there's no further questions, the property votes received in relation to this resolution are now on screen. Letting exclusions apply to this resolution as set out in the notes of the meeting. For $38,894,419 discretionary open 88,101 against 51,529,380 outstanding 2,789,787. It seems I really want you Mike, but I'll be there to pay for you. We now go to Resolution 8 regarding the grant of options to Non Executive Director Melinda Snowden.
For Resolution 8, I ask you to consider and if in favor to pass the following resolution as an ordinary resolution. That for the purposes of AES Existing Rule 10.14 and all other purposes. Shareholders approved the grant of 100,000 options with an exercise price to the closing price of Megaport shares on the ASX and the trading day before Ms. Melinda Snowden's appointment as a Director being $14.99 and the issue of up to 100,000 megaport shares on exercise of those options to Ms. Snowden as detailed within the explanatory memorandum.
The Director is abstaining the interest of corporate governance for making recommendations in relation to Resolution Aite. Are there any comments or questions on Resolution Aite?
No, there are no comments or questions.
As there are no further questions, the proxy votes received in relation to this resolution are now on screen. Voting Solutions apply to this resolution as said at the notice of meeting. 4, 38,883,330. Discretionary open, 88,757 against $51,529,775,000 outstanding 2,708,825 Same goes for you, Melinda. We'll now turn to Resolution 9 regarding the ground of options to Non Executive Director, Globe Gordon.
For Resolution 9, I ask you to consider and if in favor to pass the following resolution as an ordinary resolution. That for the purpose of the to existing rule 10.14. In all other purposes, shareholders approved the grant of 100,000 options with an exercise price equal to the closing price of Megaport shares on the ASX on the trading day before Mr. Lloyd Gordon's appointment as a director being $18.43 on on the issue of up to 100,000 Megaport shares on exercise of those options to Ms. Gordon as detailed in the explanatory memorandum.
The directors of standing the interest of corporate governance for making a recommendation in relation to Resolution 9. Cecilia, are there any comments or questions on Resolution 9?
No, there are no comments or questions.
As there are no further questions, the proxy votes received in relation to this resolution are now on screen. Voting and exclusions applied to the resolution that's set out in the notice of the meeting. For 38,885,046 discretionary open 88,366 against 51,528 sorry, 51,528,488,787. Resolution 10, I ask you to consider and if in favor to pass the following resolution as an ordinary resolution. That for the purpose of listing Rule as existing law 10.17 and rule 19.5A of Megaport's constitution and all other purposes, the maximum aggregate amount of directors' fees that may be paid to Megaport nonexecutive directors per annum as remunerator for their services being increased by $500,000 from $1,000,000 to $1,500,000 per annum.
The Board is seeking to increase the director fee pool to provide headroom to allow for temporary fluctuations in the size of the Board to allow for additional committees or advisory boards and to allow for future increases in fees and to maintain market competitiveness. The directors abstaining the interest of corporate governance from making a recommendation in relation to Resolution 10. Are there any comments or questions on Resolution 10?
No, there are no comments or questions.
As there are no further questions, the proxy votes received in relation to this resolution are now on screen. To Boating Solutions applied to this resolution as set out in the notes of the meeting. For, dollars 91,132,707 discretionary 98,894 against 334,455, obtaining 1,724,600 and one. We now turn to Resolution 11 regarding the amendment of the constitution to ensure that Megaport can convene a virtual general meeting of shareholders. I ask you to consider and if in favor to pass the following resolution as a special resolution.
That for the purpose of Section 136.2 of the Corporations Act and all other purposes. Megaport's constitution be amended in the manner sent out in the explanatory memorandum effective on the day in which this resolution is passed. During the course of the current COVID-nineteen pandemic, Megaport has taken advantage of various Sadif and other measures to allow the companies to hold general meetings virtually using technology. Such measures are, however, temporary. The proposed amendments of the constitution will enable Megaport to continue to hold general meetings using technology, either physical, hybrid or virtual, after such measures have lapsed.
While the Board's preference is not to hold virtual only meetings, if that is possible, this change has been proposed to avoid legislative uncertainty moving forward. That directors unanimously recommend that shareholders vote in favor of Resolution 11. Are there any comments or questions on Resolution 11?
No, there are no comments or questions.
As there are no questions, the proxy votes received in relation to this resolution are 80,806,366 discretionary and open against $20,312,403,000,000 1,188,499. For the final resolution, I ask you to consider and if in favor to pass the following resolution as a special resolution that the proportional takeover approval provisions contained in Rule 15 of Megaport's constitution be granted in effect for further 3 years effective on the date for which the resolution is passed. Megabort's constitution currently contains provisions dealing with proportional takeover bids for shares in accordance with the Corporations Act. These provisions must be renewed every 3 years or they cease to have effect. The current provisions were last renewed in 2018.
The directors unanimously recommend that shareholders vote in favor of Resolution 12. Are there any comments or questions on Resolution 12?
No, there are no comments or questions on this resolution.
As there are no further questions, the proxy votes received in relation to this resolution are now on screen. 101,932,292,98,974 at discretionary are open against $150,004,000 outstanding $237,024,000 That concludes the items of business. In a couple of minutes, I'll close the voting system. A reminder of the online voting instructions is now on screen. Please ensure that you've cast your vote on all resolutions.
So I'll now pause for your time to finalize those votes. I think I also might probably use some of this time just to say, I'm obviously pretty disappointed with how shareholders have treated the resolutions on the directors' options that are there. It's a very competitive market and we've managed to get hold of some of the best people I think in the world and the industry and the space that we're operating in. And the message that's certainly being sent to myself and the Board and the executive and members there that we're actually not really in control at all of trying to get the best talent in the world and to vote those resolutions down for 100,000 options issued at market. It's really not I think it's not really friendly to getting the best people in the world.
And I think the situation with proxy advisors, They're incredibly founder unfriendly, and I think they're very technology company unfriendly. I think I'll just let Institutions know that one of the things that I've always enjoyed is bringing technology companies to the Australian Stock Exchange and to sharing that prosperity and innovation with institutions. And yes, I don't know why I'd kind of keep doing that because in terms of other businesses and things that are there because as a founder my votes don't get counted. I'm excluded and I think it's actually pretty disappointing. But It's up to the institutions to do what they want.
I'll give another 30 seconds before I close Okay, Voting is now closed. Results of those votes will be released to the stock exchange later today. On behalf of the Board, I'd like to thank you for your attendance and participation online today. Thank you for your interest in the company. We look forward to your ongoing support.
Please stay safe and I wish you the very best of health and I hope you'll have the opportunity to meet you face to face in the AGM in 2022. This does bring proceedings to an end, and I now declare the meeting closed. Shareholders are now invited to ask general questions about the business management of the company. Cecilia, are there any general questions?
No, we've not received any questions from the general business of the company.
No more?
No more. Okay.
Well, thank you very much.