Good afternoon, ladies and gentlemen, and welcome to Wesfarmers' Annual General Meeting for 2026. My name is Ruth Callaghan, and I will be the moderator for today's meeting. In relation to some housekeeping matters, in the unlikely event of an emergency, you will be asked to leave the room in an orderly fashion through the exits, which are clearly marked around the room. Convention center staff will be available to assist you should you need them. If you have not already done so, may I remind you to please switch off your mobile phones. Now, before our chairman, Michael Chaney, commences proceedings, I would like to begin today by introducing Dr. Richard Walley OAM to perform a welcome to country on behalf of the traditional owners of this part of Western Australia, the Whadjuk-Noongar people. Ladies and gentlemen, please welcome Dr. Walley.
We ask the good spirit to keep everyone safe. This is called the Whadjuk section of the Noongar language group. It is a spiritual place, a place where many of us are gathered like we are today, to create stories, share stories, and pass them on to many generations. At the end of this presentation, may the good spirit take each and every one of us safely back to our families. [Non-English content]. I do a little song called "Bilyakuiling Waal Dandi," it is the story of the river traveling back to the ocean. I would like to thank you for including a welcome. In our culture, it is a sign of respect. Respect is our greatest asset, regardless of who we are or where we are from.
We do not take respect for granted, so thank you very much for your respect. [Non-English content]. May the good spirit be with us.
Well, good afternoon, everyone, and welcome to this meeting. I am Michael Chaney, the chairman of Wesfarmers. I am advised that we do have a quorum present, not surprisingly, I might say. I now officially open the 45th annual general meeting of Wesfarmers Limited. Can I start by thanking Dr. Richard Walley for his welcome to country on behalf of the Noongar people, who are the traditional owners of this part of Australia in which we are meeting today, and pay my respects to their elders, past and present. Richard, like me, is retiring this year. Richard, I would like to take this opportunity to sincerely thank you for your leadership in the community and for welcoming us to Noongar country at our AGMs for many, many years, including throughout the last 11 years of my chairmanship at Wesfarmers. I wish you all the very best for the future.
Thank you, everyone who has joined today's meeting in person here in Perth or is watching us online. We are pleased to be hosting our annual general meeting for Wesfarmers in this convention center. We have our board here that I will introduce in a moment. We have our executive leadership team and hundreds of shareholders in this room. I guess there are over 1,000 shareholders, for those who are not here, who are participating today. On stage with me are Managing Director Rob Scott, who will speak to us a bit later in the meeting, and Sheldon Renkema, our company secretary. As I said, also joining us are our board of directors. There are three directors standing for re-election today: Bill English, Alan Cransberg, and Ken MacKenzie.
If Ken's elected to the board, which I'm sure he will be, the board's resolved to appoint him as Chairman to succeed me from the conclusion of the meeting. Each of them who are standing today will address you later in the meeting when they seek your support for their election or re-election. First, I'd like to introduce my Director colleagues, who will stand while I introduce them. Firstly, Sir Bill English, who's been a board member since 2018. Alongside Bill is Alan Cransberg, who joined in 2021. Next to Alan, Ken MacKenzie, who joined the board in June this year and, as I said, is seeking re-election today. Then we have Mike Roche, joined us in 2019 and is Chairman of the Remuneration Committee. Alongside Mike is Sharon Warburton, the Chair of our Audit and Risk Committee and a member of the board since 2019.
Next to Sharon is Alison Watkins, who joined the board in 2021, and then Kate Munnings, who joined us in 2024. Alongside Kate is Tom von Oertzen, who also joined in 2024, and then Julie Coates, who joined us in 2025, just last year. Also, thanks very much, Directors. Also in the room at the front, I think mainly in the second row there, are the group's senior executives, including the Managing Directors of our divisions. I welcome them all on your behalf and thank them and their teams for their fantastic efforts for the company throughout the year. As you would've seen on the way in, all of our businesses are represented here today outside and are pleased to demonstrate some of their products and services after the meeting as well as they were before. Hopefully you'll join us for refreshments.
They'll be a bit more stimulating than they were, that is, the refreshments after the meeting. If you've got any questions about any operational matter in one of our divisions, please speak to some of the representatives after the meeting. They'll all, as I said, be outside and available to talk to you. Our audit partners from EY, Fiona Campbell and Mark Cunningham, are also here to answer any questions on the audit and related matters. Finally, a special welcome to our current team members and former Directors, executives, and team members who've joined us today, either here or online. On to now some procedural matters. Many shareholders have already taken the opportunity to submit their voting instructions and questions through the Lumi AGM online platform, and we thank them for doing so.
As outlined in our notice of meeting, shareholders and proxy holders may vote and submit questions during this meeting, either in person or using the Lumi AGM online platform. All resolutions will be decided by poll. Now, so that shareholders and proxy holders have ample time to vote, including those participating in the meeting online, I'll now open the poll on all resolutions. I'll provide a reminder to submit any outstanding votes before the poll is closed at the end of the meeting. We've got a couple of people from Computershare. Sebastian Erna is our Returning Officer for the purpose of conducting and determining the results of the poll on each resolution. The results will be announced through the ASX company announcements platform later today and will also be available on the Wesfarmers website.
We'll now play a short video on further procedural matters, which saves me the problem of having to read them out to you. So enjoy the video.
Shareholders and proxy holders attending in person who have not already voted have been provided with a green voting card at registration. If you are acting as a proxy and have been directed how to vote, please complete and lodge your blue voting card. If you don't, the vote defaults to the Chairman, who will vote as the shareholder has instructed. If no instruction is given on a resolution, the Chairman will vote in favor of the resolution. Once you have voted, place your cards in one of the Computershare boxes at the conclusion of the formal business. For eligible shareholders and proxy holders voting online, a voting icon will appear in your navigation bar. Select it to see the resolution. For each resolution, choose For, Against, or Abstain. Your vote will be recorded automatically, and you may change your vote until the Chairman declares the poll closed.
To ask a question, you must be a shareholder or their attorney, proxy, or authorized corporate representative. Questions may be asked orally or in writing online. Please don't repeat a question already asked and answered. The Chairman will respond to questions relating to a particular item of business during discussion of that item and will answer general questions later in the meeting. Please keep questions relevant to the resolution and to all shareholders. If your question relates to products, services, or interactions with the Wesfarmers business, please direct it to a business representative in the pavilion after the meeting. When the Chairman calls for questions, those in the room should move to the nearest microphone, show your green, blue, or yellow card, and give your name or organization represented to the attendant, who will introduce you.
To allow all shareholders to have a reasonable opportunity to be heard, please ask all of your questions on a particular item together. If you are online, please submit written questions as early as possible. Written questions may be moderated, for example, by combining similar ones. As time is limited, not all questions may be answered, and the Chairman may limit the number of questions per person. The company will respond to any relevant unanswered questions after the meeting. If you are online and wish to ask a question in writing, select the messaging icon on the navigation bar, choose your questions category, type it into the box, and select Send to submit. Your questions and any responses appear under My Messages. If you are online and wish to ask a question orally, select Request to speak in the broadcast panel. This pauses the webcast.
Please check that your name appears correctly, enter your topic, select Submit Request, and allow microphone access. Connect to the queue and listen in real time while you wait. When it is your turn, a beep will prompt you to proceed, and you may ask your question. If you are attending in person and need help to vote or ask questions, please speak to a Computershare representative. If you are online, a user guide is available on the platform and the AGM section of the Wesfarmers website. Please call Lumi on the number shown for any issues. Transcripts of the chairman's and managing director's addresses will be available on the Wesfarmers website and the ASX Company Announcements platform. A recording of the meeting will also be made available on the website.
Well, I hope you found the video helpful. Please submit your votes any time from now until I close the poll at the end of the formal items of business. Are there any questions on the poll procedure? Okay, fine. As you will be aware from the notice of meeting, we have four items of business today. Before we turn to them, I would like to reflect on the past year and, as this is my last meeting as chairman, on what I believe has made the company successful over the time of 42 years since it went public. I will then offer some brief observations on the economy, before our managing director, Rob Scott, will comment on the current trading and outlook for the group.
I am pleased to report that Wesfarmers increased its profit in the 2026 financial year, despite quite substantial uncertainty at home because of continuing weak consumer demand and economic conditions, and abroad because of conflict around the world, as we are all aware. Net profit after tax for the company was AUD 2.9 billion, which was an increase of just over 8% on the previous year, excluding significant items that year. The board declared a fully franked dividend for the full year of AUD 2.22 per share, which compared with AUD 2.06 in the previous year. In December, we also paid out a AUD 1.50 per share capital management distribution that you all approved at last year's annual meeting.
Profits during the year increased in the Bunnings Group, the Kmart Group, Chemicals, Energy and Fertilisers, in Industrial and Safety, and in the Wesfarmers Health business. Officeworks earnings fell largely due to restructuring activities. As has often been the case with Wesfarmers, the result this year really does show the value of a diversified portfolio of being a conglomerate in which weaknesses in some divisions are made up and offset by strengths in others. I think that has been a key factor in Wesfarmers' success over the 42 years since we listed on the Securities Exchange. My own involvement with Wesfarmers now spans 43 years.
I joined the company in 1983 as company secretary and administration manager. I became finance director the following year and served as managing director from 1992 to 2005. I returned to the company in 2015 to the board, and I became chairman later that year. I do not believe anyone could have wished for a more enjoyable, rewarding career than the one I have had with your company.
Wesfarmers' record since it listed on what used to be called the Australian Stock Exchange, and now is the Securities Exchange, is well documented. From our float in November 1984, the company, as we heard, for those of you who were here, has outperformed every other company in the stock exchange that was then listed with a compound shareholder return of 19.4% a year. Actually, I think it's 18.8%. The share price fell a bit today. A AUD 1,000 investment in Wesfarmers at the time of our listing would be now worth about AUD 1.4 million if you'd reinvested your dividends. The same amount invested in the All Ordinaries Index would be worth around AUD 62,000.
It's been a really fantastic outcome for our long-term shareholders, many of whom are here today, including those from farming families who got their shares through a conversion of cooperative stock, which they received as trading bonuses. I have to say, it's been really gratifying over the years to hear many stories about how Wesfarmers shares helped a lot of farmers through the tough times. It's fair to say that the success of the company, and Trevor Eastwood is with us here today, the first listed company CEO, the success of the company was beyond the wildest dreams of any of us who were there in 1984. It's perhaps worth reflecting on how that happened and what lessons we might draw from it. I wrote about this in my chairman's letter this year in the annual report.
It essentially gets down to adopting a clear, unambiguous purpose statement for the company, designing management systems that drive behaviors towards achievement of that purpose, and sticking to your guns in an environment where external commentators, frankly, often suggest you should be taking different steps or adopting different strategies, or even breaking up the company. It's actually very hard to maintain a consistent approach to running a company over 40 years. It gets down essentially to constantly driving home the corporate culture, and doing so through the best people you can find, something that we've been really blessed with, and a point on which I want to elaborate in a moment. The clear and actually unusual purpose statement we adopted on listing in 1984 was, "To provide a satisfactory return to shareholders." Because we recognized that that was the reason people invested in our shares.
That didn't mean we put money ahead of other values. We recognized early on that unless you were a good corporate citizen, the company wouldn't prosper in the long run. We stressed at the outset that we aim to achieve good returns by looking after the interests of all our stakeholders, our customers, our team members, suppliers, the community generally, including through strong environmental practices and through community investment. It shouldn't be surprising, I think, that if you do those things well, the company will be rewarded by support from those stakeholders, and it will prosper accordingly. It shouldn't be surprising, I think, if your stated purpose is about shareholder returns rather than, say, building a particular empire, that your shareholders will actually get better returns. A second way in which we've differed from other companies has been in our attitude to capital.
At no time have we told any of our divisions that they were in a competition for capital, and that's quite a different approach to what you hear in other companies. Rather, we've stated our firm belief that for a listed company, capital is effectively unlimited, except at times like the week after the global financial crisis. But it's effectively unlimited because investors and lenders will be happy to provide it for good investments. What is limited are those good investments, where the numbers add up, and if any manager can find one, they get the capital that they need. It's been a combination of those two things, the financial objective and the approach to capital, that have seen the makeup of Wesfarmers change constantly over the last 40 years, with different industry sectors playing an increase or decreasing role as time went by.
I'm sure, in the same way, that the company will continue to evolve over the years to come, driven by the same philosophies and values that have been so important to us. One of the big challenges of being successful over any period is that it can lead to hubris. That is, a belief that you're possessed with a wisdom which others don't have, that you can do no wrong, and most dangerously, that you're invincible. Well, fortunately, we've made enough mistakes over the 40 years to have a sober view about that issue, and the biggest one you'll recall was where we wrote off about AUD 1.5 billion in the Bunnings UK venture. But there have been other smaller ones, too. The important thing is to learn from mistakes and to understand that unless you innovate constantly and remain open to taking risk, you're going to go backwards.
The way I've always expressed it is, if it ain't broke, get ready to change it. Because if you keep doing the same thing just because it's working, the business will be disrupted through new products and new processes, new competitors and new technology, and so on. While it may sound a bit clichéd, change really is the only constant. It's also pretty common, I think, for companies to attribute their success to good people, and it can sound platitudinous. But in Wesfarmers' case, the quality of people we've been able to attract and retain over the last four decades has been absolutely key. The visionary cooperative CEO, John Bennison, who some of you will remember, now passed away, unfortunately, engineered the takeover of CSBP, which made a huge difference to the Wesfarmers co-op.
Trevor Eastwood, who's with us today, has an engineer's clarity of thinking, and he gave us the simple corporate objective. He was the one who really said, "Why do people buy shares in us? That must be our objective." I worked to build on Trevor's good work, and then Richard Goyder and Rob Scott have both made their own special marks. We've had an outstanding group of Chief Financial Officers and divisional leaders, too, almost all of whom were developed within the group. We've had an unusually strong business development team that was able to take us down new paths and seed the divisions with commercial talent. A huge factor in the company's success has been its half ownership in Gresham Partners Limited, and this, I think, has been unique in Australian corporate history.
Apart from being one of the country's most successful investment banks in its own right, Gresham's close relationship with Wesfarmers has led to some of the most innovative developments the country's seen. These included the way the cooperative found its way onto the stock exchange, the formation of The Franked Income Fund, which many here today will remember as a great generator of wealth. Gresham's provided huge support with innovative strategies to navigate regulatory quagmires and has provided great advice in our many acquisitions and divestments. I pay tribute to everyone at Gresham, and in particular to the founder and current chairman of Gresham, James Graham, who's here with us today, who's frankly got the best commercial brain I've ever encountered.
Of course, the prosperity of Wesfarmers going forward will be a function not only of how well we operate ourselves, but also of the environment in which we operate. At a national level, a strong and growing economy provides more opportunities for business and attracts more investment. There's a symbiosis here. Profitable and growing companies support the community. We pay wages to employees, we pay taxes to governments, source goods from suppliers, serve customer needs, pay dividends to shareholders, including millions of superannuation investors, and general economic growth is provided to the country through our investment. Today, though, our economy is facing real headwinds. We've got low growth, weak productivity, dismal confidence, and limited ambition or capacity amongst governments for reform.
Taken together, this economic and political environment has a significant impact on companies and on their capacity to find and make investments where the numbers add up, to all of our long-term detriment. Last year at this meeting, I welcomed the Commonwealth Government's initiative to convene an economic reform roundtable with a focus on lifting productivity. Since then, though, we've seen limited, if any, progress in productivity. In fact, backward steps in business tax, none of the wholesale tax reform that I spoke about then, which remains vitally important if we're going to drive investment and remain competitive. Company and personal tax rates in Australia are still too high, and given the state of the budget, lowering them requires governments to stand back and restructure federal and state taxes together. Governments haven't found ways to work together, unfortunately, to take up that task.
It's also of real concern that increasingly populist approaches by governments and opposition parties take precedence over effective policies. A prime example of this is the race to the bottom on immigration policy, which ignores the central importance that immigration has historically had on our economic prosperity. In this case, a concern about a different issue, housing shortages, is driving policy which would end up having the opposite effect to what was intended. As our skills shortages get worse, the casual workers on whom we depend for our care and our hospitality and agricultural sectors are banned from entering, and our universities, on whom we depend for highly qualified graduates, are faced with existential funding challenges. You don't read much about that in respect to the immigration debate, but the universities will be in huge trouble if the number of our international students declines materially.
If confidence stays low and productivity stays weak and we fail to really effect real form and bow to populist pressures, investment will stall, and it will go elsewhere. Wages growth will slow, and governments will have less to spend on the services that Australians value. In the end, that will hurt us all. What do we do about it? In that context, Wesfarmers will keep doing its best to invest where the numbers add up and we will ensure that our balance sheet stays strong so whatever we are faced with in the economy, we will be able to cope with and continue to prosper. Turning now to our board. Ken MacKenzie joined us in June, as I said, and he stands for election today. As I did say earlier, subject to your vote, he will succeed me as Chairman at the end of the meeting.
Ken had a 23-year executive career at Amcor, including 10 years as Managing Director and CEO, and it was a fabulous performance at Amcor. Then he was Chairman of BHP for nearly eight years. He shares the views on governance and capital discipline and long-term value creation that have underpinned Wesfarmers' success. We are really delighted that Ken accepted our invitation to join the board and chair the company, and I commend his election to you. I thank my fellow directors and every director I have had the pleasure of working with over the years for their support and their diligence and commitment. Your company is in great hands, I think, with an outstanding Managing Director, outstanding board, and leadership team, and employees.
On behalf of the board, I thank those over 100,000 employees across the group for their efforts, and for our leadership team for their dedication to the company. Finally, I thank all of you, our shareholders. Many of you have supported Wesfarmers for decades, and some since it listed. That loyalty is part of the story that I have described today. It has been a privilege to serve this remarkable company, first as an executive and later as director and Chairman. I look forward to watching its continuing success in the years ahead. I will now hand over to Rob Scott for his remarks.
Well, thank you, Chairman, and thank you, Dr. Walley, for your welcome earlier. As the Chairman outlined, 2026 was another year of profitable growth for the group, with strong contributions from our largest divisions. Our continued focus on operating excellence and disciplined approach to capital allocation helped us grow our businesses, keeping our prices low for customers, supporting our teams, partnering responsibly with suppliers, investing in local communities, and paying tax to government. We have made strong progress on our strategic agenda, positioning the group for future growth to deliver satisfactory returns to our shareholders. Today, I would like to talk about three of our priorities. Firstly, how we support households and businesses. Secondly, how we use technology to benefit customers and our team members. Finally, how we are investing for the future. This is all about delivering a satisfactory return.
Over the past year, Australian households and businesses have faced persistent cost pressures with elevated inflation and rising interest rates. The Middle East conflict has added to domestic cost pressures with supply-side challenges in areas such as fuel, fertilizers, and international shipping. Together, these pressures weighed on sentiment and the economy. During this time, our businesses have continued to provide value to customers, including by lowering the prices of thousands of products. With our everyday low price model in Bunnings and Kmart, customers know they will get great value all the time, not just when things are on promotion. We can only achieve this by running our businesses as efficiently as possible and focusing on productivity to offset the impact of inflation. When we do that is good for customers.
Value also matters to business customers, and this year we served more than 2 million small, medium, and large businesses across Bunnings, WesCEF, Officeworks, Blackwoods, and the Workwear Group. These customers are critical to our economy, and we provide quality, reliable, and competitive products to some of Australia's largest export industries, leveraging our scale and capabilities to deliver better service and quality. During the year, we have continued to invest in our distribution and fulfillment centers so that we can get more products to customers when and how they want them, including through new express delivery options. While the retail market remains highly competitive, our divisions continue to grow their addressable markets. Wider product ranges in our new expanded marketplaces at Bunnings and Kmart are providing more choice and adding thousands of products for customers to choose from, including commercial categories at Bunnings.
Turning to how we are leveraging technology to benefit our customers and our teams. We continue to use technology, including AI, to improve customer service and enhance the jobs of our team. Customers are increasingly choosing to engage with our businesses using technology, and it is critical that we keep evolving our offer to meet their expectations. While developments in AI are accelerating, so too are public concerns about implications for jobs, risks to personal data, cybersecurity, and the build-out of data centers. These are genuine concerns. AI provides a singular opportunity to overcome some of the greatest challenges to our economic prosperity, being weak productivity and low economic growth. Opting out of AI is not really an option, but how companies use AI will be critical to their future competitiveness and importantly, will determine customer and stakeholder trust in their company.
Responsible use of AI will accelerate the strategies that are at the core of our success, which is why we have adopted what Mike mentioned earlier, is a people-first digitally enabled approach. This means putting our customers and our team members and other stakeholders such as suppliers at the center of our focus. These efforts are a logical extension of the work we have already been doing for years to build out our data assets and to digitize our operations. We are confident it will help unlock productivity benefits, helping us keep our prices low. In agentic commerce, our AI shopping assistants, Buddy at Bunnings, Joy at Kmart, and Ollie at Officeworks, are making shopping better for customers, driving two to three times higher conversion rates and increasing our average order values by about 20%-30%. So real tangible value.
Now our teams are developing AI skills and using AI to work smarter to help customers more effectively in store whilst also delivering productivity benefits across areas such as recruitment, sales forecasting, and in infrastructure performance at WesCEF. Finally, investing in our portfolio. The history of Wesfarmers is one of continuous improvement, entrepreneurial initiative, and portfolio renewal. Notwithstanding the lower economic growth that we're seeing, we also see opportunities to invest capital to create shareholder value in our existing businesses and also some new opportunities. We're investing in developing new revenue streams in ways that address domestic capacity constraints and leverage Australia's natural advantages. A great example is our lithium business, which delivered its first profit last year with the mine and concentrator operating above nameplate capacity for the year.
In July, we announced an expansion of the Mount Holland mine and concentrator, which is expected to double spodumene concentrate production and lower our unit costs by 2030. We've also responded to national challenges such as housing supply, investing in the Built Living joint venture, which will use advanced manufacturing to help make housing more affordable and faster to build. During the year, we also strengthened the portfolio by transitioning our Industrial and Safety businesses into Bunnings, which provides opportunities for Bunnings to grow and improve its mid-market and commercial offer. We continue to invest in our businesses in the areas of transformation projects, such as the ones underway at Officeworks and Health to improve returns through growing our sales and lowering our cost base. We also see opportunities to grow by winning new customers as our customers focus on lower prices, trusted value, and widest range.
Kmart's new furniture offer through the new K Home store concept and the launch of Kmart's Marketplace are great examples of this. Across the group, I'm also pleased to report that we see plenty of opportunities to create shareholder value by addressing customer needs and investing for the long term. Turning to the trading update, I'd like to provide some update on how our businesses have been performing of late. The group has had a reasonable start to this financial year, with strong operating performances in WesCEF helping to offset some moderation in retail demand. At our full year results in August, we noted that uncertainty regarding the outlook for inflation, house prices, interest rates, and tax settings were weighing on consumer sentiment. Since then, the Reserve Bank has increased the cash rate for the fourth time this year to its highest level since 2011.
Elevated inflation and higher interest rates continue to impact demand in parts of the Australian economy and are placing pressure on household and business budgets. In this environment, the group's retail businesses are well-positioned with their strong value credentials, expanding offers, and growing omnichannel and marketplace capabilities. They remain focused on providing customers with even better value, service, and convenience, especially as we approach the important Black Friday and Christmas trading periods. Bunnings Group's year-to-date sales growth has moderated since the second half of the 2026 financial year, and despite a stronger start to the quarter, lower sales across seasonal categories and the commercial segment in recent weeks has weighed on overall sales performance. Kmart Group's sales growth is broadly in line with the second half of the last financial year, supported by strong value credentials and its Anko product range.
Construction of Kmart Group's omnichannel supply chain facility in Moorebank in New South Wales is expected to reach practical completion in November this year, with commissioning to commence in the first quarter of the 2028 financial year. Kmart Group's earnings for 2027 financial year are expected to include operating expenses of AUD 30 million-AUD 40 million associated with the dual occupancy cost, technology implementation, and other project expenses associated with the commissioning of that important site. Officeworks sales growth is broadly in line with the second half of last financial year. The transformation program remains on track for completion by the end of next calendar year, and the benefits of structurally lowering the cost base are expected to support an improvement in earnings this financial year.
In the Health division, Priceline Pharmacy continues to deliver strong network sales growth, and the relaunch of the Sister Club loyalty program as Pulse Rewards in August has been well received by customers. Wholesale performance continues to improve, supported by the ongoing automation of the fulfillment centers, with the Adelaide center now live and the Perth fulfillment center opening next year. In WesCEF, earnings for the first half of the financial year will benefit from the lag effect of ammonia pass-through pricing, recent capacity expansions, and improved pricing on the sales of spodumene. Spodumene concentrate production at Mount Holland is expected to be in line with our nameplate capacity, approximately 380,000 tons a year, with WesCEF's share being half of that.
We expect more than half of our production will be sold to market, and sales have been and will be weighted towards the first half of this financial year. Production rates at a refinery are expected to increase through the second half of the financial year as further odor mitigation solutions are implemented. I would like to talk about our team. We have over 100,000 team members, and Wesfarmers has long recognized that the value of an engaged workforce that reflects the communities where we operate are key. Our leadership team and our board remain in gender balance, and we maintain indigenous employment parity. This year, we were proud to deliver our ninth Reconciliation Action Plan and the second at the elevate level focused on leadership pathways and economic participation.
We are one of Australia's largest providers of first jobs, and as technology changes how we work, that responsibility is significant, and we will keep supporting our team members to build the skills that will serve them well even beyond their time with us. As always, safety comes first at Wesfarmers. We take very seriously our responsibility to create safe, inclusive and respectful workplaces, and group safety improved once again this year. For team members in our retail businesses, customer threatening situations remain a grave concern, with over 1,000 physical assaults reported during the 2026 financial year. To address this, we continue to advocate for law reform to exclude dangerous people from our stores and to better protect team members and customers. Turning to our leadership team, our longstanding focus on the development of talent and succession planning remains critical to our corporate objective.
I'd like to thank Tim Bult, who retired as Managing Director of Industrial and Safety after 26 years with the group, as the division transitioned into Bunnings. in August, we announced that Mike Schneider will retire as the Managing Director of Bunnings Group in February 2027 and will be succeeded by Rachael McVitty. I'd also like to thank Mike for his exceptional contribution to Bunnings over many years and wish him all the best for the future. Now, as you know, today we hand over, well, we hope to hand over the chairmanship of Wesfarmers from Michael Chaney to Ken MacKenzie, and it's not because we want to see you go, Mike, it's just that the laws say that it's time for you to go. Since Mike joined Wesfarmers in 1983, he's made an extraordinary contribution in an executive role and in a non-executive capacity.
As Managing Director from 1992 to 2005 and as Chairman since 2015. In this time, much of the group's success has been shaped by Mike's unwavering focus on disciplined capital allocation, shareholder returns and building businesses for the long term. I would personally like to thank Mike for his support and counsel to me over many years, and thank you, Mike, for giving me a job back in 1992. Now, please could everyone join me in thanking Mike for his contribution. In closing, Wesfarmers is well-positioned to deliver returns through the cycle. Our diverse portfolio of high quality, resilient businesses and our strong balance sheet give us the capacity to invest, to adapt in dynamic markets and to take advantage of opportunities. I'd like to thank our board for their continued advice and support and our leadership team and team members for their commitment to our corporate objective.
I'll now hand back to you, Chairman.
Well, thanks very much, Rob. Now on to the formal business of the meeting. I refer to the minutes of the 44th annual general meeting of the company held on 30th of October last year. I've reviewed those minutes, and I've signed them as a true and correct record of the meeting, and they're available to inspect at the shareholder registration desk outside and also at the company's registered office. Voting on all resolutions today will be carried out by a poll, and all resolutions are ordinary resolutions requiring the approval of a majority of shareholders who vote on that resolution. Where as Chairman I've been nominated as a shareholder's proxy, I intend to vote all undirected and available proxies in favor of each of the resolutions.
There are also voting restrictions for some resolutions, as outlined in the notice of meeting, which apply to those who have got an interest in the resolutions, and certain of their related parties. A reminder that if you are having any issues casting your vote or submitting a question, please speak to a Computershare representative if you are attending here in person, or if you are participating online, please refer to the user guide on the Wesfarmers website or call Lumi on the number shown on the slide. The proxy votes and direct votes that have been submitted in advance of the meeting will be set out on the slide shown for each resolution. As mentioned earlier, the final results of the poll on the resolutions will be available on the ASX company announcements platform and on the Wesfarmers website later today. I will now proceed with the formal business of the meeting.
The notice of general meeting was distributed to shareholders on Friday, the 25th of September this year, and I will take the notice as read. We will now proceed with the items of business listed in that notice, and for each item of business, we will display the wording of the relevant resolution on the slides. The first item is to receive and consider the financial statements and the reports of the directors and auditors for the year ended 30 June, 2026, which have been included in the company's annual report. As I mentioned earlier, we have got the auditors here and Fiona Campbell and Mark Cunningham from EY were the signing partners for the company in that year. They are available to answer any questions on the audit or related matters. I will shortly invite shareholders to ask in person or submit online any questions regarding this resolution.
For those shareholders and proxy holders participating online, just remember that there is a brief delay in the broadcast, so please follow the instructions outlined earlier and ask your questions online when you are ready to do so. Are there any questions in relation to item one? I must say, this would be the first meeting I have ever been at where there were. Ruth, do you have any questions online?
I do, Chairman. I have a question from Phoebe Rowntree, who is a shareholder, who says, "Wesfarmers is lacking transparency about its contribution to plastic pollution and doesn't demonstrate adequate product stewardship for its products and packaging." She notes that Kmart's Anko dumbbell set received a dishonorable mention at Australia's inaugural Unpackit Packaging Awards. The set already comes with its own carry case, yet inside, each individual weight was wrapped in single-use plastic. It's an example of the excessive and unnecessary packaging used in Wesfarmers brands. She asks, "Will Wesfarmers commit to publishing data annually on how much plastic it uses overall, beginning with the 2026/2027 sustainability report, and take greater action to reduce unnecessary single-use plastic packaging use?
Well, thanks for that question. Yeah, we all recognize the plastics issue, and there's a lot of activity going on around the group in all the divisions to reduce our plastic use and also with regard to making things renewable and recyclable and so on. There's a lot more I'm sure we can do. I'll take that suggestion on board, and Rob can take it on board. The sustainability report, of course, gets bigger and bigger every year, and it's now, in itself, as big as the accounts. I'm not sure this question relates to accounts, but I'm happy to deal with it. We do publish a lot of information in there, for example, on diverting waste from landfill. In the last year, we diverted 73% of the waste that would've gone to landfill to other uses.
It is a big effort, but we'll endeavor to do more, and we'll look at the question of whether we can include those sort of statistics in the sustainability report. There's a question at microphone six.
Mr. Chairman, microphone six. May I introduce Amanda Holly, who is a proxy holder?
Thank you. Chair, my question concerns Bunnings's timber sourcing and the risk it poses to Wesfarmers shareholders. Bunnings's responsible timber policy still accepts PEFC-endorsed Responsible Wood-certified timber.
Ms. Holly, sorry to interrupt, but
Yes
this resolution's on the accounts. I wonder if you could ask that question during the general question time?
Absolutely.
Thanks. Okay, if there are no further questions, I'll move to the next item of business, and that is the re-election and election of directors.
Excuse me, Mr. Chairman.
Yes, sorry.
There is a question.
Oh, microphone two. Go ahead.
Mr. Chairman, may I introduce Jeff Reed? He's a proxy holder.
Good afternoon, Chairman, and thank you. My name's Jeff Reed. I'm a proxy holder on behalf of about 1,000 ASA members, Australian Shareholders' Association members, who between them collectively hold 2.3 million Wesfarmers shares. Mr. Chairman, can I thank you for your endeavors over the past 43 years and your stewardship of the company and your unrelenting focus on shareholder benefits. It is very much appreciated, and we thank you for it. I'd also like to thank you for your continued engagement with the ASA, which is exemplary amongst my experience with corporate citizens. So, thank you. My question today is about Wesfarmers' health division. The division has returns which languish in the range of 4%-5%, and they really haven't changed over the five years we've had the health division.
I wonder if you or Mr. Scott could please describe to the meeting what is the plan to turn around the health division to bring it up to a really good level of profitability?
Well, thanks, Mr. Reed. Can I just reciprocate? We've enjoyed our engagement with the ASA. I understand you're about to retire.
Mr. Chairman, not yet.
Not yet. Must be one of your colleagues. Ken MacKenzie will have the pleasure of meeting you again next year. I am not sure your question is about accounts, but I guess if it is return on capital, it is. Or it could be seen that way. Let me answer it. Certainly, the health division's return on capital is low. It is around 5%, as you said. If you look at their corporate plan, it shows it increasing to a much more acceptable level. There have been a number of events occurred, factors occurred, since we acquired the business through Australian Pharmaceutical Industries. Some are outside our control and some because of regulation changes in government and so on.
The returns have not been what were planned, but our expectation is, particularly as we have now put a real retail expert into that side of it, and the retail business, we had probably an AUD 20 million increase in profit last year, and we are budgeting for another one this year. We think there is real potential in there, and we do have expectations that the return will improve.
Thank you, Chairman.
So, if we move on to the next item, Bill English, Alan Cransberg, and I are retiring by rotation at this meeting, and Bill and Alan are offering themselves for re-election, and I'll be standing down. Ken MacKenzie, as I mentioned, was appointed this year, and he is offering himself for election. The board has resolved to, as I said, to appoint Ken as Chairman at the end of this meeting if he's been elected by the shareholders. Now, displayed on the screen now is the position in relation to direct votes and proxies received on the election and re-election of each Director prior to any revocations that may have occurred during the meeting. I'm going to get each Director to come up and speak to you briefly, seeking their re-election.
The first is Bill English, the former Prime Minister of New Zealand and was appointed to the board in April 2018. We'll hear briefly from Bill.
Mr. Chairman, shareholders, Wesfarmers has an enviable record of performance, and I'm seeking your support to continue to be part of the team delivering that performance. I first joined the board in 2018, just before the write-off of the BUKI losses and the demerger of Coles. But that was in an economy where high migration, increasing house prices supported much of Wesfarmers' subsequent success. The picture is different now. Tailwinds that we used to have are fading, and in particular across Australia and New Zealand. Our customers can't enjoy quite the same predictable increase in their house values that underpinned their confidence. That gives a new set of challenges for Wesfarmers.
Under the leadership of Mike Chaney and Rob, probably the most important changes in recent years have been a new generation of leaders of our divisions, for whom the easier conditions of the past are not the natural way of the world. They and the board are going to be dealing with more economic uncertainty, with growing competition, and particularly with the disruption that AI is already bringing to not just our business, but businesses of all sizes across Australia and New Zealand. I believe we're well-equipped for those challenges and would like to be part of a board which finds our way of delivering the same kind of performance that you're used to. I've learnt much about being a Director from our Chairman, Mike. We've already heard reference to his clarity and consistency about economic return to shareholders.
But he is equally focused on maintaining a set of values. I think he leaves a board and a management team that have humility, that have learnt resilience, but have some real ambition. I look forward to your support in realizing those ambitions.
Thank you, Bill. I invite shareholders to ask any questions in regard to this resolution. Okay.
Excuse me, Mr. Chairman.
Yes. Which microphone?
Microphone two.
Microphone two. Sorry.
May I once again introduce Jeff Reed, who is a proxy holder.
Thanks again, Chairman. Jeff Reed from the Australian Shareholders' Association. In the notice of meeting, Sir Bill English has a very long list of appointments to other organizations and foundations and enterprises. I wonder if you or he could please assure the meeting that he has sufficient time to devote to his role at Wesfarmers.
Yeah, sure. Wesfarmers is the only listed company director role that Bill has. Like most Directors, he has interests outside in not-for-profit organizations and so on. I can assure you, and the bottom line is we have never had a feeling at all that Bill has not had time to discharge all his duties properly. The bottom line is that we do have every year an annual assessment individually of each Director, and we go through what is called a 360-degree process, and the Chair sits down with each Director individually and talks about their performance and so on. If you ever have a situation where a Director is not pulling their weight, is not putting enough time in and so on, they know about it pretty quickly.
I frankly have not had that experience in the boards I have served on, because certainly in large companies you get people who are very dedicated to it and do put in the effort. The answer is Bill is a terrific Director and certainly devotes the time that he should to the job.
Thank you, Mr. Chairman.
Okay. Well, I think there are probably no further questions. I will now introduce Alan Cransberg, who was appointed to the board in October 2021.
Firstly, to all the shareholders, thanks for letting me be part of the board over the last five years. In my time on the board, I have been really impressed by the company, my fellow board members, and the executive leadership team led by a very capable Rob Scott. Just as background, in my executive career, I worked for a company called Alcoa. I spent 37 years there starting as a civil engineer, which I did not like, and then worked through the organization from running individual operations in Australia and the U.S. to finally ending up as president of global manufacturing based in New York for eight years, running all of Alcoa's global mining, refining, and smelting operations in 12 different countries.
After eight years in the U.S., along with a child who was born in the U.S. and is still a U.S. citizen, my wife and I made the decision to return to Australia to lead the Australian operations, as well as to continue to manage global mining and refining operations. In my executive career, I learned a lot about people. I learned a lot about operating to a set of values that defined us and, similar to Wesfarmers, making sure that we made the right return for our shareholders, a satisfactory return, and making tough decisions if we did not. I sort of retired when I was 57 because I got sick of sitting on airplanes going to different countries, and my post-executive career has been about working in organizations and businesses I care about.
They include a private equity company, [Swire & Sons] in Australia, which had a diversified range of operations in Australia. I had a lot of fun working in a couple of startup companies, which I both invested in and helped them grow. I was also on the board of West Coast Eagles for nine years. We have not been going that well lately, but we were going okay when I was there. And chairing it for six. In the not-for-profit space, while I was at West Coast, we set up an organization called the Waalitj Foundation, which started off with three people and now is 137 people helping Indigenous members in our society get jobs and maintain those jobs and set up businesses. Finally, I have been with Wesfarmers for five years and frankly, very, very impressed with the company.
My background helps the board assess opportunities, support and challenge management, and contributing to making whatever decisions we have to continue to make sure that we get that acceptable return to shareholders. It is a very collaborative board, and with your support, I would love to continue to help grow the group and continue to provide the right returns. Finally, I want to thank Mike Chaney, who invited me onto the board, for his outstanding leadership of the company. I have seen lots of great leaders, and we are very lucky as a company to have Mike lead our company. And finally, Mike, while we will miss you, I think we have got a really good leader coming in in Ken MacKenzie, and I look forward to both working with him and learning from him. Thank you.
Thank you, Alan. Are there any questions on this resolution? It looks like there are none. None from you, Ruth. I will now introduce Ken MacKenzie, who, as I said, was appointed to the board on the 1st of June .
Thanks, Mike, and good afternoon, everyone. I was pleased to join the board, as Michael said, in June this year, and today I seek your support for my election as a director to your board. This is the first time I am standing for election, so I thought I would tell you a little bit about myself. First, my interest in Wesfarmers. Wesfarmers is an iconic Australian company that I have long admired, and it is an honor to have the opportunity to contribute to its ongoing success. If you think you have detected an accent, you would be correct. I was born and raised in Canada. Both of my parents were academics, but they grew up on the land. In fact, I am the first MacKenzie in our recorded history that was not born on a farm.
I like to think that the values that come from a life on the land, hard work, practical thinking, and looking after one another are in my DNA. I trained as an engineer and have spent much of my career in the manufacturing sector. I spent 23 years at Amcor, including 10 years as Chief Executive from 2005 to 2015. Amcor is a global packaging business that services the healthcare, food, and beverage sectors, and it operates from more than 40 countries. More recently, I served as the chair of BHP for nearly eight years. Across my 40-year business career, a few priorities have remained constant. The first priority has always been the health and safety of the people that I work with. Everyone should go home safe at the end of the day. Second, understanding how businesses operate and how they create value.
From the needs of customers to operational productivity, the complexity of global supply chains, and of course, the importance of having great talent. Third, disciplined capital allocation with a clear focus on return on capital and the creation of long-term shareholder value. Finally, a belief that enduring shareholder value depends on how well you look after your customers, your coworkers, your suppliers, the communities in which you operate, and the environment. These are the priorities and the experience that I hope to bring to your board. So thanks for your consideration, and I would welcome your support. Mike, I would also echo Alan's comments. I really appreciate the opportunity to join the board. Thank you.
Well, thank you, Ken. I invite shareholders to ask any question in relation to Ken's appointment.
Ruth has one, Mike. Mike, Ruth. Ruth. Ruth.
Ruth. Ruth, online.
Chairman, I have a question from Mr. Stephen David Mayne, who is a shareholder, and the question has three elements. Firstly, how much have we agreed to pay new Chair Ken MacKenzie? Will there be an increase on what Michael Chaney received in 2025/ 2026? Secondly, regarding AGM practice, could Ken please undertake that he won't try to introduce BHP-style AGMs at Wesfarmers, where live online voting and questions have been banned for the past five years? Thirdly, Woolworths got with the program at its AGM this morning and disclosed the proxy votes early to the ASX, along with the formal addresses. Michael Chaney has never done this in 43 years of involvement with public companies when it is becoming best practice.
Will Ken MacKenzie undertake to look at early proxy disclosure next year as market practice moves led by the likes of Woolworths, ASX Group, Qantas, Computershare, and others?
Well, thanks, Mr. Mayne. Firstly, the Director's fee payable to the Chair in the next year will be the same fee that I've been receiving. As far as Ken introducing any BHP-style things, that'll be up to him and the Board as we go forward. We've got a formula that works pretty well, but everyone has their own views, and we'll leave it to Ken. As regards to your third question, you're right. I don't think we've ever released the proxy votes in the morning. A bit like governments releasing all the postal votes before the polls close, and I can't really see the logic of it.
You describe it as best practice, and there are a couple of companies apparently doing it, but it seems to me the most logical thing is to put the votes up at the meeting when other people are voting and leaving it at that. Again, that's something I won't be involved in. By the way, it's never been suggested to me before that we do it. So it's not like 43 years of strong resistance. Anything else, Ruth?
No, Chairman. I apologize, Chairman. I do have a follow-up from Mr. Mayne. Mr. MacKenzie will be the first non-Perth resident to chair Wesfarmers. How much time is he planning to spend in Perth? Will the company maintain a dedicated office for him in Perth and/or in his hometown of Melbourne? Are we supplying him with an executive assistant? How much contact has Ken had with CEO Rob Scott so far, and how frequently is he expecting to be in touch with him each week? Is his style to have daily interactions with the CEO with regular texts and emails, or is he more hands-off? Also, does he have any plans in mind for changes to the committee structure or leadership, and is he likely to chair any committees?
I think I could answer all of those with a simple, "Don't worry about it." Ken lives in Melbourne and will be here as often as he needs to be here. My practice with Rob has been, there are some weeks I don't come into the office, and some weeks I'm in the office all the time. We religiously have a time each Tuesday, is it, where we catch up, and that's in the diary, and we catch up then every day if we need to, depending on what's happening. I've always had a very hands-off style. That is, boards govern, management runs the company. Chairman's available 24/7. Rob can call me any time and wake me in the middle of the night. I'm not going to be there trying to interfere.
Ken's style, I think, is exactly the same, and it's one of the things we looked at and talked to people about on other boards and so on that Ken's been involved in. I have no doubt that Ken will spend the time that he needs to spend. He will have an office in Melbourne, and it'll be near the Wesfarmers office there, and he will have an executive assistant, as I have. I'm sure it'll work very smoothly. What happens now, particularly after COVID, is that a heck of a lot of your communications are on Teams or Zoom, on video conferences, and that's made it much easier to be remote. Given the majority of our operations are now outside Western Australia, it's quite handy having a chair who's in Melbourne anyway.
I think it'll go very smoothly and no differently, really, to how it's gone over the last 13 or 11 years. Anything else, Ruth?
Not online.
Okay. We will move on, and ask that you vote on resolutions 2A to 2C. Each of them, of course, are independent and should be voted on separately. Shareholders voting in person should place a mark in the For, Against, or Abstain box on your green voting cards. Similarly, proxy holders who are voting in person who have been given open votes should place a mark in the appropriate box on the blue voting card to indicate which way you are voting on those resolutions. Shareholders who have already voted have received a yellow card, and they do not need to do anything further. If you need any assistance with voting, just hold up your hand and a Computershare person will come along. If you are voting online, just follow the instructions that have been provided.
If you need any assistance, just call Lumi on the number shown on the slide. Item three relates to the company's remuneration report for the year ended 30 June 2026. Displayed on the screen is the position in relation to direct votes and proxies received on this resolution prior to any revocations that may have occurred today. The rem report provides information regarding the remuneration of directors and senior executives to the key management personnel of the combined group. You can see all the details for that on pages 114 to 142 of the company's annual report. We do appreciate engagement from shareholders in relation to the executive remuneration, and I can assure you that the board remains committed to a remuneration framework which is underpinned by our guiding principles, that is focused on driving leadership performance and behaviors to deliver satisfactory shareholder returns over the long term.
The total remuneration of our executives is set out in the report, and it is set at a level that reflects their contribution and their competencies and capabilities, and to make sure we can attract and retain the best people we can find. The remuneration report in the annual report, including the covering letter from Mike Roche, the Chair of the Remuneration Committee, provides a detailed explanation of the outcomes for the 2026 year, and I will not go into any detail on those here. I do invite shareholders to ask any questions regarding the remuneration report now. Are there no questions from the floor? Ruth, do you have any online?
No, Chairman.
Okay. If there aren't any questions, I'll ask you to vote on resolution three. We're now moving to the final item of business, which I'll take the opportunity to remind those eligible to vote at the meeting who haven't yet cast their vote that I'll close the poll shortly after this final item of business. Please ensure that you cast your votes before this time. This item four relates to the grant of deferred shares and performance shares to the group managing director. Displayed on the screen is the position in relation to the votes received, as I've described before. The board believes that it's in the shareholders' interest to provide the group managing director with remuneration incentives that ensure there's significant alignment between the executive and the shareholders and rewards the executive appropriately.
Approval is sought for the grant of deferred shares and performance shares to Mr. Robert Scott under the 2026 Key Executive Equity Performance Plan on the notes set out in the notice of meeting. I invite any questions on this item. I think there are no questions here. Ruth, have you got any questions?
No, Chairman.
Okay, fine. That now concludes the formal business of the meeting, and I intend to close the poll. If you're eligible to vote and you haven't yet cast your vote, please ensure that you do so. For those of you who are in the room, please complete your voting cards, and if you haven't already done so, hand them to somebody from Computershare, and you'll see them coming down the aisles with their purple boxes. We'll just leave that for a moment. Okay. Are there any further voting cards not yet in boxes? Perhaps if there are, you could just raise a hand and somebody will come to you. It looks like they're all in. Thank you all very much for taking the time to cast your votes.
I will now declare that the poll has closed. Shortly, we will move to general questions to allow you to raise any matters for general discussion. There are a couple of other things I wanted to highlight. Firstly, we have a great turnout today, which means we have a lot of shareholders who may like to ask questions about our businesses. For those shareholders and proxy holders who are in the meeting room, representatives of our divisions are available outside for your general customer queries at their respective booths. I would encourage you, if that is specific, to go out after the meeting and have a chat with them. We also have an information desk, which is in the exhibition pavilion for more information about Wesfarmers and staff members and so on.
People will be out there available to answer any general queries you may have about your shareholding. Please note that light refreshments will be served at the conclusion of the meeting in the room next door. If you need to leave before that, thank you very much for your attendance. We will now move to general business. I invite shareholders to ask any questions regarding general business. There was one, I think, about wood heaters at the back, which I did interrupt. Perhaps we could start with that one.
Mr. Chairman, microphone six, may I introduce Amanda Holly, who is a proxy holder?
Thank you, Chair. Take two. My question concerns Bunnings' timber sourcing and the risk it poses to Wesfarmers shareholders. Bunnings' timber policy still accepts PEFC-endorsed Responsible Wood-certified timber. In Australia, the scheme certifies timber logged from native forests, high conservation value forests, and threatened species habitat. PEFC certifies timber from Forestry Corporation of New South Wales, a logging agency which has been convicted at least nine times since 2020 and penalized more than AUD 1.9 million for unlawful logging. In Tasmania, PEFC certifies timber from old-growth forests. Here in Western Australia, PEFC certifies jarrah cleared from the northern jarrah forests by Alcoa for bauxite mining. In 2020, Bunnings stopped sourcing from VicForests due to its unlawful logging, which protected the Bunnings brand. More than 11,000 Australians have emailed Mike Schneider this year asking Bunnings to stop selling PEFC-certified timber.
Will the board make dropping PEFC-certified native forest timber part of Rachael McVitty's mandate, or will it leave shareholders exposed to the risk of Bunnings losing the trust of its customers?
Well, thanks, Ms. Holly. Bunnings has a responsible timber sourcing policy that it takes very seriously, and it's always ensured that it's selling sawn timber that is certified by the relevant authorities. There is a Forest Stewardship Council, which generally Bunnings supplies to imported timbers, but the PEFC that you refer to is the program for endorsement of forest certification, which is also called Responsible Wood in Australia. If people involved in logging, contractors and so on in New South Wales broke the law, I assume they were prosecuted for it and they paid the appropriate penalties, and that the authorities there, which is the government, take the necessary steps to make sure that all of those things are conducted responsibly.
If I recall correctly, to put it in perspective, in New South Wales and in Tasmania, over 80% of the forest cover is in reserves and parks that won't ever be logged, and about 16% of the forest is in production forests, which are rotated over a 100-year cycle, and frankly, is the world's most renewable resource. The fact is, there is a demand for hardwood timber. Some of it comes from New Guinea or from elsewhere in Asia, but there's a demand for Australian hardwood timber. As far as we're concerned, the certification that governments require and that Bunnings follow is adequate to make sure we are conforming with not only the rules, but with appropriate behavior. I know that The Wilderness Society, from which I believe you come, has had some discussions with Bunnings.
They were terminated when The Wilderness Society, in its wisdom, decided to hold some demonstrations outside Bunnings stores, and then the discussions stopped, and that The Wilderness Society now is reviewing that sort of strategy. All I can say is Bunnings would welcome continued engagement to understand any concerns. I think Wesfarmers has also suggested that Naomi Flutter and her people be prepared to sit down and have a chat about it. I'd encourage you to do that, because we do want to ensure that we're acting responsibly in regard to this and providing our customers with properly certified wood.
Thank you, Chair.
Number five.
Mr. Chairman, microphone five. May I introduce Chung Chang, who is a shareholder.
Good afternoon, Mr. Chairman. I will be missing these questions, which I've answered over the last 11 years. I wanted you to stay on last year, saying you're only 76 years old. President Trump is 80 and running the world, so
And look what happened there.
This will be my last. Can I comment the staff on having coffee today? We didn't have to involve the Managing Director, so true to his word, he said he'll fix this and we'll never have a problem again. I've got a few questions, myself and the three proxy holders. Do you want me to ask you all the questions now?
Yeah.
Yeah, okay.
Yeah.
Question number one relates to something you said in 2021. It was COVID time, and you were rolling out the vaccines, COVID-specific vaccines, and you were gung-ho about your staff and senior management, no problem. My staff, my senior management, my Directors have taken it. Five years later, tens of thousands of Australians have been vaccine injured. The largest compensation, AUD 6.5 million for Chris Nemeth, because he's paralyzed by it. Now that you've had a chance to review it all, will you be making your own medical inquiries or still relying on government mandates? That's the first question. If you could tell us how many Wesfarmers staff were vaccine injured or died, that would be helpful as well. Second question, also on health. The health division is making 5% return versus Bunnings making 10%-15%. What's the rationale for continuing the strategy?
What justifies the continuation of the health division? Specifically, I will ask you about a new drug, the Ozempic drug, because this carries a lot of risk. There are many lawsuits at the moment, billions at risk of Ozempic or this GLP-1 receptors. The Australian and other publications have said that this is basically a zombie drug, makes you do not want to enjoy life, not just food, not shopping, many things, and you just become a zombie out of it. So what is the rationale of continuing stocking this thing, or would I be coming back to you in five years' time? If I have one more question, Mr. Chairman. In the press today, you talked about the one that got away, Lynas, and you also talked about your regrets with Bunnings UK. Can you enlighten us on two or three others that got away?
No, the journalist asked me that, and that was the response, so I do not have another two to give you. In terms of your question about COVID and health, Ozempic and so on. They are really not questions for this meeting, I think. To the extent our pharmacy chains supply any ethical drug, any approved drug, we do so under the regulations and so on, and we rely on the relevant health authorities to be registering things. In answer to your question about COVID, I do not recall hearing that any of our staff suffered from vaccination, passed away because of vaccination. What I can tell you is that because of vaccination, tens of thousands of people in Australia did not pass away. Anyway, it is not really a relevant issue for this company. Yep. Number two.
Chairman, microphone two. May I introduce Paul Slath, who is a proxy.
Mr. Chairman, thank you for allowing me to present a case I believe is of great importance, improving the vision for the vast majority of people. In some cases, as I personally have experienced, return to natural vision by reactivating using this tool called pinhole glasses, by wearing them after having spent 20 years wearing prescribed glasses. Now, I ask why Bunnings have not stocked pinhole glasses, stenopeic, when they stock so many other types of devices of glasses. That is my only question. It is a simple question.
I wish I could answer it. Mike, did you understand that question? We have a roving mic. This is Mike Schneider, the CEO of Bunnings.
Thank you very much for your question. I was not aware of those glasses, but I will catch you after the AGM and I will learn about them and we will see what we can do. Thank you.
I am sure that a lot of people will be greatly benefited by having a look into it and
Great
a lot of people.
Thank you.
Thanks, Mr. Slath. Number five.
Mr. Chairman, microphone five. May I introduce Rick Schnaddon, who is a proxy holder.
Thank you, Mr. Chaney, for the opportunity to ask a couple of questions. I was gratified to hear that in your opening address, you indicated the importance of the environment in which Wesfarmers operates. It is a symbiotic relationship between the nation and our business. In the annual report, there are a number of risks which are identified by your risk management team, which is also gratifying. They do not mention the risk, the one that started with the dreaded C word, Canberra. One of the greatest risks to making profit to generate a sound business to help the company is one of the greatest risks is government. My question comes down to the research that I did prior to this meeting in relation to the amount of money that Wesfarmers contributes to the Labor Party.
The figure that I saw was that Wesfarmers numbers 36 in the top 100 donors to the Australian Labor Party. I am at a loss as to what possible advantage or what benefit Wesfarmers would receive by making political donations, basically to any political party. Can you please address that?
Yeah, sure. Firstly, we do not make any cash donations to any political party. Those amounts you are talking about, which I think in the case of Labor over the last year was about AUD 30,000 or AUD 50,000 or something, was made up of a whole lot of smaller purchase of a seat at a dinner. For example, the Prime Minister is coming over, do you want to buy a seat for AUD 5,000? Both parties do this. It is the way they raise money. The purpose of going along is that you are there in the room, you hear what the Prime Minister is saying. It may well inform you better about policy going forward and the effect it has on your company and so on.
At election time, or budget, for example, there is a budget dinner in Canberra, where a couple of our people who are in external relations go to the budget dinner along with all the press people and so on. Those sort of gatherings can be useful in basically gaining information about the economy or whatever. There are no instances where we actually provide cash to a candidate, but we do attend those sort of functions. Yep. Number three.
Mr. Chairman, microphone three. May I introduce Peter Curnow, who is a shareholder.
Thank you, Mr. Chairman. My question is in regards to Bunnings stores. I have no problem with people who have assistance dogs being in the store. That would be unrealistic. It has become almost a dog walking park in the store that I generally go to. Being a person who has been bitten by a dog on the face, I really do not like Bunnings becoming a dog walking park. I appreciate people like their dogs and need to walk them, but I really do not believe they should be admitted into Bunnings stores. The risk is too high.
Thanks, Mr. Curnow. I think there are rules about bringing your dog into Bunnings, and we expect people to observe them. It is fair to say there is a very large number of people who think it is a great thing we do allow dogs in stores, and there are some who think we should not. Perhaps I could refer this to Mike Schneider. Mike, you can take it on board along with other comments that you get. Thank you.
Thank you.
Other questions? Number two.
Mr. Chairman, microphone two. May I introduce Barry Kernaghan, who is a shareholder.
Thank you, Mr. Chairman. First of all, I would like to welcome you to the ranks of what the club that most of us in here belong to, that is the Retirement Club. We all enjoy retirement. We hope you keep good health until you can fill out your bucket list.
Thanks, Mr. Kernaghan.
In the meantime, I know I have mentioned this every year, but I think it deserves me mentioning it again. Every week, Bunnings lets sporting and social club groups raise funds every week at every store they have in Australia. That is 312 stores each Saturday holding their world-famous sausage sizzle. Multiply that by 52, and we get a massive 16,200 organizations that benefit from your magnificent gesture each year. This is where most of our sporting champions get their financial assistance to become the idols, no matter what sport we follow. Ladies and gentlemen, on whose thousands of organizations over the east cannot be here today, would therefore appreciate if you could all stand and applaud the board on their behalf in helping them develop these Australian sporting champions. Please rise and give them a round of applause. Thank you.
Well, thanks, Mr. Kernaghan. I am relieved that retirement doesn't seem to affect your mathematical ability. Any other questions? Ruth, do you have any questions?
I do, Chairman. Shareholder Mr. Henry Kaye asks with regards to AI, "When recruiting staff, how about giving people with disabilities a chance of employment?
Yeah, thanks. Rob, do you want to say something about that?
Absolutely. Firstly, across the group, we understand we have over 2,000 team members that have identified as having a disability, and I suspect the number is actually higher than that in reality. Our businesses do create work opportunities for people with disabilities. There is good examples and evidence around the group of making adjustments in the workplace to accommodate those certain disabilities. Kmart, in particular, has been working on a program of work with the Federal Government over the last two years around creating more opportunities and also career pathways, along with some other large employers as well. These are very active areas. We want to make sure that our teams reflect the communities in which they operate, and the reality is that many people in the community do have disabilities, and many people with disabilities can make an enormous contribution to our businesses and develop good careers.
It is an area that is a work in progress, but good evidence across the group of progress.
Thanks, Rob. Number two.
Mr. Chairman, microphone two. May I introduce Dr. John Pearce, who is a shareholder.
Mr. Chairman, a lot of us hold our lovely Wesfarmers shares in trusts. What is the business community doing to reverse the proposed changes to trusts announced in the May budget? Are you and we doing enough?
Yeah, I think there's been a heck of a lot of debate about this, and the government's continued to make changes ever since the budget. That's due to the pressure that's brought by all sorts of organizations, including, no doubt, the Business Council of Australia, that really represents us in those sorts of arguments. That's all I could say. We're not individually making representations about trusts because it's really not something that directly relates to us, except, as you say, some of our shareholders will have their shares in trusts. There are plenty of people out there making representations to the government on it.
But you have a lot of power. We'd like you to go to bat for us.
Yeah. There are a lot of issues. There have been quite material changes made to date. I must say, I personally don't recall where it's finally settled, but there have been changes to the taxation of discretionary trusts and testamentary trusts or something. It's not something that we've been involved in or I think we'll be involved in.
I'd like you in.
More from Ruth.
Yeah. Ruth, another question.
Thank you, Chairman. Mr. Brent Stirling Perkins asks, "How is Bunnings Fiji performing so far?
Is that Bunnings Fiji?
That is right, yes.
Mike?
Chairman, it is very early days.
Very early days.
Very early days. It is a very small element. It is not about opening stores in Fiji. It is about providing essentially a wholesale product. So, very early stages, immaterial to Bunnings at the moment, and one of just a number of new business opportunities that the team are reviewing.
Okay. Thanks, Ruth. Any more?
Yes, Chairman. This is from Mr. Stephen David Mayne. "Our shares fell by 4.17% today after investors digested this morning's update. The stock dropped by 7% on AGM day last year. Could new Chair Ken MacKenzie set himself a target to ensure investors are not overly confident going into next year's AGM, and aim for the stock to move by less than 1% on AGM day? Why has this happened two years in a row? Could outgoing Chair Michael Chaney and the CEO reflect on whether we need to make any tweaks on our continuous disclosure policies and practices?
Yeah, sure. On the last point, no, we certainly don't believe we do. The market is incredibly volatile at the moment, and I think a drop of 4% simply reflects the fact that while we're having growth in our revenues, in our businesses, we've said in Rob's address that it's moderated in this quarter. Compared to what a number of other retailers are experiencing, the drop we had today was pretty modest. I, though, I'd join you. I'd like to see Ken guaranteeing that it won't drop more than 1%. I think, Ken, you need to have a hangdog look in the months leading up to it. Anything else, Ruth?
I have one final question online, Chairman, from Mrs. Claire Elizabeth Allen, who says, "I have received a written response from investor relations ahead of the AGM regarding Bunnings wood heater liabilities. The response acknowledges the scientific gap between lab certificates and real-world pollution, but states that the board will wait for regulations to change. How does a passive stance to products with documented PM2.5 medical harm satisfy the board's duties to proactively mitigate liability and greenwashing risks?
Yeah. Ms. Allen, is it Ms. Allen? Has written a very long email to us a few days ago, and we sent back. This is about wood-burning fireplaces and so on. We sent back a long response, and then today we got a response to our response, and then that shorter question as well that Ruth has just read out. The simple fact is this, that Bunnings sells a huge number of products and always makes sure that they are safe, they are certified, and so on. There are endless regulations about endless products, and wood-burning stoves are no different. What Ms. Allen is referring to is that there are laboratory tests done by government authorities about emissions from wood-burning fireplaces and so on, and a suggestion that in actual everyday use outside, the results may be different to laboratory use.
Well, all I can say is that we rely on the certifying authorities to do these things and to make sure that, in fact, if there are differences, they are taken into account in what is certified. So, that is our position on it. We will be sending Ms. Allen a detailed response to her second lengthy commentary via email. Looks like the sausage rolls have lured most out. Are there any other questions? Ruth, have you got any?
No, sir.
Okay, and I think there are none here. So, thanks everyone for joining us today for this meeting, either in person or online. I now declare that all resolutions at today's meeting have been passed, and an announcement containing final results will be in the places that I mentioned earlier. Thanks again for your participation and interest. I declare the 45th Annual General Meeting of Wesfarmers Limited closed and invite everyone outside to enjoy some refreshments and talk to our directors and executives. Thank you.