So it's past 11:00 A.M . I think we might commence the meeting. Good morning, and welcome, everybody. For those that are present with us at Eden Park today, please find a seat, and we will start Vulcan Steel's 2023 Annual Shareholders Meeting. For those who do not know me, my name is Russell Chenu, and I'm an independent director and chair of the Board of Vulcan Steel. I will be chairing our annual meeting today. I'm informed that in accordance with Vulcan's Constitution, we have a quorum present, and so I now declare this annual meeting formally open. On behalf of the board and the team at Vulcan Steel, we thank you for your continued support, and also for joining us today. This is Vulcan's second annual shareholder meeting as a listed company, but its 27th since its incorporation in 1995.
As you know, we are running a hybrid meeting today, so we have shareholders with us in Auckland, and we also have shareholders joining us online via Link Market Services online platform. Welcome, all. Our online participants should be able to hear us, see the PowerPoint presentations, as well as vote and submit written questions online. Just before we get started, we should cover off a few housekeeping points. For those with us at Eden Park, in case of an emergency, our exit is back through the doors that you came through after registering with Link Market Services. As we are on the fourth floor, we will need to use the stairs, not the lifts, and the stairwell is located just after the lift bay. Our assembly point will be in the car park at the back of the south stand by Gate G.
Should we be required to evacuate, Eden Park staff will be available to help us all get out of this building safely. The toilets are also back through the entry doors that you came through. We will take specific questions at the end of both of Rhys and my presentations, and as we go through each of the five resolutions, and any general questions towards the end of the meeting. After the closing of the meeting, we invite you to join us for a cup of tea or coffee and a light lunch. For those online, if you do have any technical issues during the meeting, please ring Link Market Services Helpline. The telephone numbers are included in the PowerPoint slide that is now being presented. Online shareholders, if you have questions, please submit them via the online platform as soon as you can.
The PowerPoint slide on your screen now identifies where the Q&A tab can be located on the online platform. We will endeavor to ensure that all questions are answered at an appropriate time during this meeting. For any shareholders with us at Eden Park who wish to ask a question or make a comment, roving microphones will be available to ensure that everyone present and online can hear you. Please wait for a microphone to be brought to you prior to asking your question. We also ask that you please state your full name and identify whether you are a shareholder, a proxy holder, or another interested party before you ask your question. Thank you. If there are any questions, whether asked online or from the audience today relating to the same or similar subject matter, we may amalgamate those questions together and answer them in one response.
This will help us with the flow and timing of the meeting. While we will try to get through as many questions as possible, we apologize in advance for any questions that we are unable to answer due to time constraints. For any such question that we do not have time to respond to, or which we consider requires a more detailed response, our investor relations team will contact you, and we will endeavor to provide you with a written answer, either to your registered email or postal address. We will also publish any written answers on our investor website, which can be accessed through Vulcan's investor website. The address is in the glossary on page 22 of the notice of meeting. I would now like to introduce my board colleagues.
Starting from my far right, we have Carolyn Steele and Adrian Casey, and to my far left, we have Wayne Boyd, our newest director, Nicola Greer, and Rhys Jones. We also have Bart de Haan, who is dialing in today from Sydney. You should be able to see Bart on the screen to my left. Hi, Bart. Bart had surgery recently and, following medical advice, has been advised not to fly. Hence, why he's on video and not with us. Sitting beside me on the right is our Company Secretary, Sarah-Jane Lawson. There are currently seven directors, including myself, and a brief summary of each of our backgrounds has been included in Vulcan's latest annual report, which you should have all received. As you are aware, Nicola Greer is seeking election, and Bart de Haan is seeking re-election today.
They will each speak to you before their resolutions are put to a vote. In the audience today is our Chief Financial Officer, Kar Yue Yeung. Please raise your hand, Kar Yue . And our Chief Information Officer, James Wells. I can't see where James sat, but... Oh, yes, there he is, down the back. We also have a number, have a number of the Vulcan team with us today. From our finance team, we have Wayne Bowler and Christine Burns. Also, also from our East Tamaki sites, I think through the room, Melanie Andrew, Neil Downing, Paul Tomich, Brian Moulds, and Nick Trifunovich, to name a few. The Vulcan team should be readily identifiable by their name badges, and some of the team are wearing a Vulcan-branded vest or jacket. I encourage you to speak to our team after we finish the meeting today.
The team will also be assisting with reading out any questions, online questions submitted by shareholders during the meeting as well. Deloitte is Vulcan's external auditor, and here today from Deloitte is Silvio Bruinsma and Jomarie du Plessis . Silvio and Jomarie are available to answer any questions directed to the audit team. Also present with us are representatives from our legal advisors, as well as our share register, Link Market Services. We will now show a short video showcasing our Melbourne distribution team, which provides some insight of what our employees think about working at Vulcan.
What are we up to today? Just off for an early morning blood donation at the Red Cross. I usually start at seven. I start giving blood around seven, so it's good.
It's normally pretty busy here, particularly in the morning. Just make sure everyone gets their material on time. I'm Samantha Stockwell. I run the site here at Melbourne. I've been with Vulcan since 1995, right when it started. Had a couple of stints off to have some children. This is gonna be quite intimidating, actually, for the day. I'm gonna need to... Yeah, you're already laughing, so that's not ideal.
You and me.
The people that we've got is what makes it tick.
Morning, all. How are we?
Good birthday yesterday?
I did have a good birthday yesterday, thank you.
Yeah.
I'm Kane Gordon, Vulcan Distribution. Been with the business coming up to four years. It's the skills that you can bring as an individual and the culture of the business and how they fit, as opposed to your technical knowledge about steel. You need someone who can talk to customers and consult it himself. The type of person here, that they're energetic, that they're outgoing, that they're positive and bring that energy.
So if someone comes and works here, they need to understand how that gets stocktaken, how it gets put on a truck. The whole picture is about understanding all of it. So everyone's part of that autonomy to deliver the product at the same time. We have a new starter here this morning. Do you want to come and meet him with me? He might find this a little bit intimidating that there's a camera here. How are we doing?
Samantha, this is Nash.
Hi, Nash. How you going?
Hi.
Welcome aboard. First day today?
Yes.
Oh, that's great news. It's quite simple. We just want him to join the team and stick around. So-
Safe and happy.
Yeah, exactly. Safe and happy. Majority of the time, it's just about making someone understand the family they've joined. Welcome to the team.
Thank you.
Welcome.
Thank you.
Thanks. Really, our truck drivers are our reps. Not that the reps like to hear that. Hey, Brad.
The truck drivers are very good.
Yes, they are.
Yeah, they are very good.
If I need to get something approved on this site, I can just speak to my boss. I can ring the CEO. We all have that connection 'cause we're actually all working together as a team.
Good evening, guys. Guess what?
Oh, you've got a medical this afternoon?
Yeah.
Yeah, okay. Our shift is just swapping a shift, coming on today's shift for us. Yeah, so then he can get to his medical appointment for his wife this afternoon. So it's good. I'll leave you to it, mate. Thanks.
There is a quality of life to be had when you work. You might have a family commitment or something that you really want to get to. You just ask. The flexibility is there, and where we can, we'll make it work. Yeah, it just keeps the balance real.
It's good.
Now, moving to the agenda and the order of events for today's meeting. I will shortly say a few words. Following that, Rhys Jones, Vulcan's Managing Director and Chief Executive Officer, will present on Vulcan's operating performance for the 2023 financial year. Following the conclusion of both of our presentations, we would be happy to answer any questions you may have. We welcome any feedback. Then we will turn to the formal business of the meeting, where we have five resolutions to consider. All five resolutions are ordinary resolutions for shareholder approval. Resolutions will be conducted by way of a poll rather than a show of hands. The first resolution is that the board is authorized to fix the remuneration of Deloitte as auditors for the current financial year.
The next two resolutions relate to the election of directors, and the final two resolutions relate to the grant of performance share rights to our two executive directors: Rhys Jones, our Chief Executive, and Adrian Casey, our Chief Operating Officer. Vulcan's financial statements for the year ended 30 June 2023, together with Deloitte's auditors' report, are in Vulcan's annual report, which has been available on Vulcan's investor website since late August. We also have some hard copies of the annual report on the registration desk, so please feel free to take a copy of the annual report home with you. As I mentioned earlier, we will take questions relevant to each resolution at the time that such resolution is presented to you, our shareholders. Once voting has closed on the resolutions, we should have time for further Q&A.
At that point, shareholders will have the opportunity to ask any general questions. I will now give my chairman's address. Ladies and gentlemen, fellow shareholders, FY 2023 has been a year of both challenge and opportunity for your company. Opportunity with the acquisition of Ullrich Aluminium, which we completed in August last year, and challenge with the softening of demand that we experienced in both Australia and New Zealand during the year. Increasing inflation and higher interest rates adversely impacted business and consumer confidence in both countries, but especially in New Zealand. It is pleasing to report that Vulcan achieved record revenue in FY 2023. This included an 11-month contribution from Ullrich Aluminium. However, earnings were lower in FY 2023 than in the prior year. A highlight of the year was the very strong cash flow performance, with operating cash flow driven by disciplined working capital management.
This strong cash flow performance enabled us to reduce net borrowings during the year. Following the purchase of Ullrich, net borrowings peaked at NZD 435 million during the year. By the end of June this year, we had reduced our net debt to NZD 340 million, a reduction of NZD 95 million from the peak. We continue to maintain a strong financial position with unutilized borrowing facilities of NZD 100 million available to us at the end of June this year. Rhys will comment further on the FY 2023 results in his presentation. I'll turn now to dividends. We declared dividends of NZD 0.55 per share for financial 2023. The dividend amounts to NZD 72 million, which represents 76% of our net profit after tax.
The financial year 2023 dividend for the year was 76% imputed for New Zealand shareholders and 100% franked for Australian shareholders. In September, we announced the appointment of Nicola Greer as a director of the company. We welcome Nicola to the board, and her election is one of the resolutions for this meeting. Nicola's appointment reinstates a majority of independent directors on the board. I would like to thank all directors for their contribution during the year as we continue our journey of transition from a private to a listed company. Both our Audit and Risk Committee and our People and Remuneration Committee made significant progress on governance during the year, and we are indebted to Carolyn Steele and Bart de Haan for their chairmanship of those committees. In September this year, Vulcan was admitted to the ASX 300 Index and the NZX Mid-Cap Index.
We want to take a moment to acknowledge these milestones today as they are recognition of the collective contribution of our employees to the successes achieved by your company. Turning now to environmental matters, we are committed to reducing our environmental footprint over time. As a value-added processor and distributor of metal products, we are pursuing incremental and ongoing improvement to our emissions levels. In FY 2023, the acquisition of our aluminum business during the year contributed 5,536 tons to our overall greenhouse gas emissions level. Scope one and two greenhouse gas emissions for pre-existing businesses was 737 tons lower in FY 2023, at 8,427 tons, compared with 9,164 tons the previous year, a reduction of a material 8%. Vulcan demonstrated considerable resilience in financial 2023.
Our people continued to execute with their renowned commitment to customer service. Economic corrections often provide quality businesses with a strong balance sheet, with opportunities to enhance their business model and improve their relevant market position. Your board believes this may be such a time. Notwithstanding current headwinds, we believe that in the medium term, our commitment to our business strategies will deliver a stronger, more prosperous company. On behalf of your board, I would like to thank all our employees for their commitment, our customers for their trust in our company, and you, our shareholders, for your ongoing support. I will now ask Rhys to present his CEO presentation. Thank you.
...T hank you, Russell, and welcome everyone to Vulcan Steel's annual shareholder meeting for 2023. The past year has been volatile and challenging, with global inflation and rapidly rising interest rates impacting all of our key markets. Despite this difficult economic environment, Vulcan Steel's financial performance produced a number of highlights in a period in which a major acquisition was also completed. Our business generated AUD 145 million of operating cash flow from an EBITDA of AUD 219 million, as supply chains normalized and working capital was reduced. The EBITDA of AUD 219 million on sales revenue of AUD 1.245 billion represented a return on sales of 17.6%, while return on capital employed was 21%.
Excluding the impact of lease accounting standards or IFRS 16, our return on capital employed was 32% in 2023. This is a key performance metric and incentive hurdle for the leaders in our business. A net profit after tax of NZD 95 million was achieved, while the net debt to EBITDA cover was comfortably within our target at 1.85x at the end of the financial year, after the successful integration of Ullrich Aluminium. We are pleased with the contribution from our aluminum business in the 11 months under Vulcan's ownership in 2023. One of the highlights this year has been the NZD 169 million of Ullrich Aluminium. This NZD 300 million trans-Tasman aluminum distributor is a strong fit culturally and strategically with the existing business.
The Vulcan value proposition of providing high stock availability and delivery in full on time is a strong cultural fit with aluminum, which has ensured the retention of customers during a period of significant change. The aluminum unit has much potential to grow and improve in all aspects of its operational and financial performance. The addition of aluminum has further diversified Vulcan Steel's customer base and increased the number of monthly active trading customers by 80%, excluding accounts that overlap with our pre-existing business. The metals division now includes aluminum, engineering steels, and stainless steel. The combined revenue of this division is now similar to the steel division, which consists of distribution, coil, and plate processing. This deliberate strategy of product, customer, and geographic diversification will enhance the reliability of earnings. The Ullrich acquisition has significantly increased the footprint of Vulcan across Australasia.
The number of sites has increased from 29 to 70 in the past year. The aluminum network operates in many regional cities and towns where Vulcan did not previously have a presence. The opportunity to cross-sell complementary products to aluminum from this expanded network is significant. Sites which sell more than one product type are called hybrid units. For example, a unit which sells both aluminum and stainless steel. A number of hybrid sites have been created primarily in the aluminum branch network. This hybrid branch strategy provides greater service and product availability to our customers, while reducing unit costs. This strategy enables customers of different divisions to buy seamlessly through one point of contact. The Vulcan IT system is a critical plank in enabling the business model to be rolled out rapidly in a newly acquired division.
The core principle or criteria behind Vulcan Steel's growth strategy is that it must add value to the customer and Vulcan shareholders. Careful consideration is also paid to ensuring readily accessible synergies are present. Brownfield expansions of existing sites or winning new customers, or a greater share of an existing customer spend, are a core growth strategy. This is particularly important in a challenging economic environment. Similarly, greenfield entry into new geographies is another low-risk growth strategy, particularly when the hybrid strategy described previously is employed. A number of greenfield sites have been identified and sequenced for implementation. The hybrid rollout will progressively gain traction over the coming two years. The growth strategy of further expanding the product range or service offered has been successful over the past nine years.
Metals, which consists of aluminum, engineering steels, and stainless steel, has grown from nil revenue to over NZD 600 million per year, with approximately 20% EBITDA margin. This strategy involves considering opportunities in other steel and metal market segments in which Vulcan does not presently operate, but are complementary to the existing business division. Mergers or acquisitions of businesses that operate in our existing portfolio, which offer consolidation or geographic diversification, are also being identified. These opportunities are regularly considered. The priorities for the coming year include, firstly, ensuring that Vulcan's customer service mindset and culture are embedded in the aluminum business. Second, that the planned hybrid rollout in five locations by June 2024 is implemented to a consistently high standard. Third, that the ongoing focus of offsetting inflationary pressures through productivity improvements and cost reduction is effective and complementary to a culture of personal accountability and ownership.
And four, explore other complementary product platforms and adjacencies. Turning now to health and safety. Health and safety, paramount, given our employees are handling heavy metal products daily. We're committed to providing a safe and healthy work environment. We continue to focus on increasing awareness through ongoing risk education and training, as well as the use of technology to reduce injury frequency rate over time. To help our employees achieve their maximum potential, we've established our own internal development program and supplement this with external courses where appropriate. We provide workplace and personal support to our employees and their immediate family in assisting with work and personal challenges. We believe in giving back to and supporting the communities that support us and our people.
Our philosophy around community support is that wherever possible, we're actively involved and ensure that our personal support goes where it is needed, ideally directly to individuals. We're especially proud of how our employees came together to reach out through their personal work network to victims of New Zealand's devastating floods in February 2023. We donated a total of NZD 85,000 directly to individuals in the community to support them and their families in the immediate aftermath of Cyclone Gabrielle. The weak international economic environment has resulted in lower metal product prices, while domestic demand across Australasia is weaker than the comparable period last year. This has resulted in revenue declining by 9%. The EBITDA year to date is lower by 29% due to lower volume, reduced revenue per ton, and increased operational costs due to inflation.
The volume in Australia was stable in the first four months of 2024 compared to the second half of 2023, while New Zealand volume was lower for the comparable period. Volumes in New Zealand in October were adversely impacted by the general election. The volume outlook appears to be stabilizing from a potentially gradual improvement in the first half of next calendar year. The ongoing impact of high interest rates are expected to limit the extent of any significant recovery well into next year. Lead activity indicators for New Zealand are showing some improvement in the second half of 2024. However, the outlook for Australia appears to be weakening. The past year has been successful, but the macroeconomic outlook appears challenging in the year ahead due to ongoing economic and geopolitical uncertainties, as well as inflation pressure on operating costs.
Despite the tough environment, there are a number of opportunities to position Vulcan to grow strongly now and into the future. Thank you.
Thank you, Rhys. I will now open up the floor to anybody who has a question on any matter referred to in either Rhys's or my presentations. Just as a reminder, would you please identify yourself by name and whether you are a shareholder, proxyholder, or other interested party prior to asking your question? Thank you. Are there any questions? Yes.
There's a microphone coming to you. Just... Yep, that's right.
Thank you. I'm Bruce Parks, the proxyholder for the Shareholders Association. My question is around inventory. You are destocking like everybody else. You've acquired Ullrich, and you have fought through the growth, yet there's a trading downturn forecast. Are you at your right level now, or is there further to go?
Maybe Rhys could give us an operating answer to that question.
Just a quick comment.
It's on.
When we acquired the aluminum business, it had much too much inventory. So we've had to work through that, and some of that inventory was aged as well. So we've still got some way to go on that, but we've made very good progress. That's the first answer. The second bit is, as the economy's declined, we've been very mindful. We always forecast our inventory in regard to what we're seeing coming up, coming forward. So we've managed our inventory down. I think in the, we're in the general order of, in the vicinity of maybe, Kai, you, I would say AUD 30 million of further reduction in inventory in the, in the coming period, in that sort of order.
What we are also mindful of is the fact that when you start to see an upturn emerging, you wanna make sure you don't reduce your inventory and miss out on the opportunity of capturing that opportunity. So we're gonna be watching inventory like hawks over the next few months, just to see how those trends develop to make sure we've got the right coverage so we can absolutely service our clients to a high standard.
Thank you.
Thanks, Rhys. Are there any further questions from the room? No, I can't see any hands up. Wayne, do we have any questions submitted online relating to either the MD or CEO or chair reports?
Not at this stage, no.
No. Thank you. As there are no questions, I will now proceed to the formal business of today's meeting. As I mentioned earlier, there are five resolutions being put to Vulcan shareholders to vote on today. All five resolutions were set out in the notice of meeting and the proxy voting forms that were sent to Vulcan shareholders in late September. All five resolutions are ordinary shareholder resolutions. An ordinary shareholder resolution is simply a resolution that must be approved by more than 50% of those shareholders entitled to vote and voting on that resolution. The notice of meeting will be taken as read. But just as a reminder, voting entitlements have been determined as at 9 P.M. New Zealand Time, last Monday, 6th November .
Registered shareholders at that time are the only persons entitled to vote, and only the shares registered in those shareholders' names at that time may be voted at this meeting. Votes can be lodged during the meeting today or by proxy. For your proxy to be effective, your proxy voting form must have been received by Link Market Services by 11:00 A.M. last Monday, so two days ago. The valid proxy votes received are set out in our PowerPoint slides and will be shown as we get to each resolution. Voting on all five resolutions today will be conducted by poll only. Vulcan share registry provider, Link Market Services, will conduct the poll. Votes will be counted after the end of today's meeting, and the results will be published on ASX, NZX, and Vulcan's investor website later this afternoon.
For shareholders voting online, you will be able to cast your vote using the electronic voting card received when online registration is validated, which will occur shortly. To vote, you will need to click Get Voting Card within the online meeting platform. You will be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking for, Against, or Abstain on the voting card. Once you have made your selection, please click Submit Vote on the bottom of the card to lodge your vote. For those who are voting at Eden Park today, please use the voting paper that should have been handed to you at the registration desk prior to entry. The Link Market Services team will ensure that your voting forms are collected at the appropriate time.
As indicated in the notice of meeting and on the proxy voting form, my intention as chair of today's meeting is to vote all discretionary proxies and any undirected proxies held by me in favor of each resolution. So starting with the first resolution, I move as an ordinary shareholder's resolution that the Board of Vulcan is authorized to fix the fees and expenses of Deloitte Limited as Vulcan's auditor for the financial year ending 30 June 2024. The board unanimously recommends you vote in favor of Resolution One. Now for questions relating to this resolution. In terms of process, I will ask for any questions from those who are in attendance with us at Eden Park today, and then move on to any online questions submitted during this meeting. I note that no questions were received prior to this meeting.
Are there any questions relating to this resolution from any shareholder present here today? No, no questions. I will now take questions from shareholders via the online platform. Wayne, have we received any online questions relating to this resolution?
No questions at this stage.
Sorry?
No questions at this stage.
Thank you. As there are no further questions on this resolution, we will proceed to a poll. We will now move to Resolution Two. This resolution relates to the election of Nicola Greer as a director. Having joined the board 2 months ago, Nicola is Vulcan's newest director. I will now hand over to her to speak to you. Thank you, Nic.
Good afternoon. I joined the board of Vulcan Steel in September this year. It was a privilege to be appointed to the board, and I appreciated the rigorous and considered process Vulcan's nomination committee undertook. I'm pleased today to have the opportunity to now seek your support for my election as an independent director. Vulcan's journey is truly inspiring. From its beginnings in 1995 with Peter Wells' vision to the NZX and ASX-listed entity it is today. The combination of growth, both organically and through acquisition, is admirable. Vulcan will continue to focus on the core things we value: quality, service, and our people. I have a lot to learn in this business. I am but one of the many caretakers of the unique culture that makes Vulcan such a special place. It is a responsibility I take very seriously and am fully committed to.
My professional background is in the financial markets, having spent many years in New Zealand, Australia, and the U.K. working for ANZ, Citibank, and Goldman Sachs. I also have strong links to the New Zealand property sector through both my private interests and listed entity experience. My various governance roles have provided me with a breadth of knowledge of New Zealand business. Many of the operational challenges the current economic environment presents are shared by all these entities. I have the capacity, experience, and passion to serve Vulcan stakeholders well. I would welcome your support for my election as an independent director. If elected, I look forward to working with my fellow directors and Vulcan's strong management team to achieve ongoing success in delivering value and sustainable investment returns to you, our shareholders. Thank you.
Thank you, Nicola, for that address, which I think amply demonstrates why the board feels that Nicola is a very good fit for the company's board. Her background in financial markets, particularly trading, plus her experience in property and construction in New Zealand, and the fact that she lived and worked overseas in Australia and the U.K., we think positions her really well to make a contribution to our company, and she's already demonstrating that in such a short period of time. The board, other than Nicola, recommends Nicola to you as a Vulcan director and unanimously supports her election. I now move as an ordinary resolution that Nicola Greer, who was appointed as a director by the board, effective from 5 September 2023 , be elected as a director of Vulcan.
I note that no questions relating to the resolution for Nicola's election were received prior to today's meeting. Are there any questions relating to this resolution from any shareholder present at Eden Park? I can't see any hands raised. I will now take questions from shareholders via the online platform. Wayne, have we received any questions relating to?
No questions.
Thanks, Wayne. As there are no questions, voting on this resolution will proceed to a poll. Let us move to our next resolution, which is Resolution Three. This resolution relates to the re-election of Bart de Haan as a director of Vulcan. Bart has served as a director of Vulcan since September 2015. The board, other than Bart, recommends Bart to you as a Vulcan director and unanimously supports his re-election. I will now ask Bart to say a few words about himself and his role on the board.
Thanks, Russell. So apologies that I'm not there in person. As Russell said, that, I'm not allowed to travel yet after surgery. A sum up of my bio is that I live in Sydney. I have a dual Australian and Dutch citizenship. I've worked in the Netherlands, U.S., Australia, New Zealand as a strategy consultant and was involved in a number of venture capital activities in Australia and New Zealand. I was involved-- I typically work with boards and senior management of large companies across a whole bunch of industries. Here I go. Beer, soft drinks, dairy, airlines, medical technology, oil and gas, minerals, building products, and SSZ in steel processing and metal processing. Then I got involved in clean energy sectors, in wind and solar generation and carbon sequestration.
The issues that I typically worked on were industry and competitive economics, growth, acquisitions, integrations, and turnarounds. So that's my bio. So before I joined Vulcan, I knew five of the senior people from my consulting work in New Zealand companies. All these people were, in my book, very high-quality people with a good set of ethics and values, so it was easy for me to join. Then I got to work with the founders and owners, Peter Wells, Adrian Casey, Wayne Boyd, and I learned that these guys had assembled an extraordinary group of high-quality people, and they had been building a sophisticated business over 20 years, and actually much more sophisticated than I had come across in my consulting experience. So I had to catch up. It's hard to say how I contributed in the first few years.
I'd like to believe that my background was broad enough to be complementary and be a sparring partner to both the management and the board, my board colleagues, and that I am Dutch enough to take on any Kiwi. So how will I contribute going forward? I see no major changes. I see keep on reinforcing what the company has been doing well and is good at. And that is, keep pushing for high performance standards, keep the quality of the data, which means keeping investment in systems. This gets more critical if we integrate acquisitions. Keep the early planning for succession. No compromise on the quality of the people we hire, and we keep on investing in talent.
Protect our current culture, as Nicola was saying, and as Rhys has been referring to, but also our decentralized model, which is an integrated part of that and our incentive structure. With growth, this will all become harder.... Keep growing selectively. We've been doing that, but it will be tougher with growth to find opportunities that fit our criteria for success and risk, and we have pretty tight criteria for that. And then lastly, keep the dynamics between the management and the board. I think we're making a good transition from private to public. There's a broad skill set on the board. There's respect and trust. There is honest and challenging debate, and individuals speak their minds, and we like that. The company has excellent data, and the board gets briefed early and engaged early. So there's no sugarcoating of difficulties, issues.
There's no manipulation of numbers, no politics, and no grandstanding, which is what I appreciate. So I hope I left some time for questions. Russell, over to you.
Thank you, Bart. I think we're very fortunate to have Bart as a member of the board. He has an excellent background working in a lot of different companies in different parts of the world. He's a director who provides a lot of challenge to management in lots of different ways, but always very respectfully, very courteous. And he keeps us a little bit grounded, and he keeps us a little bit entertained, which is quite valuable on a board. And I think management find him a very useful challenge as well. So we'd love to have him continue. And I move as an ordinary resolution that Bart de Haan, who retires as a director by rotation and is eligible for re-election, be re-elected as a director.
Again, now it is time to invite shareholders to ask any questions that they may have about the resolution for Bart's re-election. I note that we did not receive any questions on this resolution prior to the start of today's meeting. Are there any questions relating to this resolution from any shareholder present at Eden Park? No. Wayne, have we received any questions relating to this resolution from shareholders online?
No questions.
Thanks, Wayne. Bart will be disappointed that he didn't get any questions.
Very true.
Thank you, Wayne. As there are no further questions, voting on this resolution will proceed to a poll. That now takes us to the fourth resolution. I move, as an ordinary resolution, that for the purposes of ASX Listing Rule 10.14 and for all other purposes, the issue of 229,798 performance share rights to Vulcan's Managing Director and Chief Executive Officer, Rhys Jones, under Vulcan's FY 2024 Long-Term Incentive Plan, and on the terms and conditions set out in the explanatory notes in the notice of meeting, be approved. We did not receive any questions relating to this resolution prior to our meeting.
Just a reminder that an overview of the key terms of the proposed grant of performance share rights to Rhys, as well as Adrian, is set out on pages 14 to 16 in the Notice of Meeting. So with that in mind, are there any questions relating to the grant of performance share rights to Rhys? All right. Not in the room. Wayne, any questions from shareholders on the online platform?
No questions.
No. Okay, thank you. As there are no questions, voting on this resolution will proceed to a poll. Resolution five is the final resolution of today's meeting. I move, as an ordinary resolution, that for the purposes of ASX Listing Rule 10.14 and for all other purposes, the issue of 91,217 performance share rights to Vulcan's Chief Operating Officer, Adrian Casey, under Vulcan's FY 2023 Long-Term Incentive Plan, and on the terms and conditions set out in the explanatory notes in the notice of meeting, be approved. Again, I would like to note that we did not receive any questions relating to this resolution prior to the meeting. Shareholders with us today at Eden Park, do you have any questions relating to the grant of performance share rights to Adrian? No, there are none in the room.
Wayne, any questions from shareholders online?
No questions, thanks.
Thank you, Wayne. As there are no questions, voting on this resolution will also proceed to a poll. This concludes our discussion on the formal business of today's meeting. I now encourage you all to please cast your vote on all five resolutions. I will now pause to allow time for all votes to be finalized. The people from Link are coming around to collect people's votes to slip into the ballot boxes. So we'll just wait until that's completed before we resume... While that's being finalized, please ensure you hand in your voting card to ensure that your vote is counted. For those shareholders online, voting will close five minutes after this annual meeting closes. A timer will appear on your screen, which will provide a countdown to show how much time you have left until online voting closes.
As I mentioned earlier, once the votes have been counted, the results of the voting will be released on the ASX, NZX, and on our investor website. We expect this to be done this afternoon. That concludes the formal business of this annual meeting. Now, we move to a very important part of this meeting, which is the time for our shareholders to ask any general questions that you may have, or if you wish to make any comments. I note that we received no general questions prior to this meeting. Do we have any questions from those who are in attendance with us at Eden Park today? Yes. If just here, a microphone is on its way to you, sir.
Hi, I'm Marion Jones, past director and long-time shareholder. These meetings are very formal, and I understand they need to be. I just want to make a vote of personal thanks for the efforts of the directors and the staff. These are hard times. I'm delighted, Bart, that you are part of the team. I remember working with you a few years ago, and I appreciate your humor. We are grateful. I am, and my wife and I are grateful as shareholders to be part of this wonderful company. We're grateful to have been able to be part of it over a long time, and just wish you well as you go forward. There will be hard times.
The one question I wanted to ask, though: with the inevitable downturn, how are our staff numbers handling? How we handling our numbers of staff with what's going on at the moment?
I'll answer that question.
Yeah. Go ahead.
Yeah, so one of the key planks of our philosophy is we're all in it together as one team, and so we basically have a title-less culture, where we're all in it. So we use titles for these formal arrangements, but we typically just go by our Christian names right around the company. So when you're all in it together, because you've got a small downturn for a period of time, you don't throw people out the door. So our mindset is very much based on performance. When we went through the upcycle, our numbers didn't increase greatly. And similarly, we're basically doing the sinking lid policy, Warwick. So when people leave, they aren't replaced, or when we're looking at some units requiring less staff, we work out whether those people can be redeployed into another unit.
We work extremely hard on that. Separately, on the Ullrich Aluminium, we unfortunately had to make some people redundant in that environment simply because there was a significant amount of duplication. But one good example of that was, we had a fabrication division we inherited, which was effectively competing with our own aluminum clients that we're trying to sell to. So Adrian did a fantastic job of on-selling. Even though we got closed that unit down, he organized for one of our clients, or several of our clients, to buy those business and reemploy our people. So they didn't lose their jobs. They got redeployed. So there's, there'll be no lack of effort if anybody does face a redundancy within our aluminum business. We've absolutely worked hard to ensure that they're redeployed and have another role.
And our philosophy long term is to be highly productive, but we're all in it together, and when the going gets tough, you don't start throwing people out, you actually back them. And, we're very confident that that process is working well. Our DIFOT and service performance in this downturn has been unbelievably good. Basically, errorless service, which our clients need, 'cause they're on, they're on short lead times as well, where they're suddenly getting an order in the door, and they've got people standing around, so they're desperately wanting their product quickly. So long term, we think that pays off in spades. Thanks.
Does that answer your question, sir? Terrific. Thank you. And thanks very much for your earlier comments. That's much appreciated by all of us and our employees. It's really, really good to hear that sort of feedback from somebody who's been involved in the company and knows the way in which it operates. Thank you. Any further questions from the room? Yeah. Wayne, are there any questions submitted online?
We have one question submitted from John Goldsmith. "How could experienced operators underestimate the transition cost of Ullrich to the extent published?
Yes, I can answer that as well. So you'll recognize we're AUD 5 million out on our estimated integration costs. So they are one-off costs. So there's two components to that. Roughly half of it, and this is a straight out error, half it was a tax bill we needed to pay for acquiring a business in the Queensland state. What we had is, we had some advice suggesting that we didn't have to pay it, and then we got some conflicting advice later, saying we did have to say, pay it. So that ended up being roughly half the gap. So that's one element.
The second part of it was just simply that there was more opportunity to improve the business and more opportunity to change it and facilitate that change, and we aggressively did that in a period of time, which incurred more cost. So the speed at which we were implementing and changing was faster than we had initially estimated.
No, no other questions.
No further questions? Thank you, Wayne. If we had no further questions, then that brings us to the end of Vulcan Steel's 2023 Annual Meeting of Shareholders. On behalf of your board, I would like to thank you, our shareholders, for joining us and for your participation today. We really do appreciate your support. For those with us in Auckland, we hope that you stay for some light refreshments. I now formally declare the 2023 Annual Meeting closed. Thank you all very much.