Thank you for standing by, and welcome to the Ingham's Group Limited full year 2021 conference call. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you'll need to press the star key followed by the number one on your telephone keypad. I would now like to turn the conference over to Andrew Reeves, CEO and Managing Director. Please go ahead. Thank you, and good morning, everyone. My name is Andrew Reeves, Managing Director and Chief Executive Officer of Ingham's. It's my pleasure to welcome you to Ingham's' 2021 full year results presentation, my first results presentation since taking the reins of the company earlier this year. I would like to take this opportunity to acknowledge that I am hosting this presentation from the lands of the Gadigal people of the Eora Nation. I would like to pay my respects to elders past, present, and emerging, and recognize their ongoing cultures and connection to the lands, waters, and community. Joining me today is our Chief Financial Officer, Gary Mallett. At the conclusion of the formal presentation, we will both take any questions that you may have on the results and the business today. Now, turning to the highlights for 2021. Just as a quick reminder, as we announced in November last year, our financial results are reported inclusive of the leases accounting standard AASB 16. All references to the underlying results are post AASB 16, unless otherwise stated. Today, we have the pleasure of reporting a solid set of results, with EBITDA and net profit after tax coming in within our earnings guidance range that was issued in May. These results have been achieved despite the ongoing impact of the pandemic on our operating environment. Our results are underpinned by resilient demand for poultry, and the positive operational outcomes arising from the delivery of our strategic plan. Core poultry volume grew in line with our expectations, with demand across the majority of our channels resulting from a recovery in trading volumes ahead of pre-COVID-19 levels. Our Optimize the Core strategy has also contributed strongly to today's result. Our dedicated team remains focused on process improvement and waste elimination. Managing around 200 projects in FY 2021, with 320 improvement project opportunities also identified for FY 2022. Throughout the COVID-19 pandemic, Ingham's has focused on keeping our people safe. Our high safety standards enabled us to keep operating throughout COVID-19 with minimum operational disruption, and perform our role as an essential service provider. Our ability to respond quickly and effectively to the challenges that COVID has placed in front of us continues to speak to the resilience and agility of our business, and our unwavering commitment to our people to deliver great outcomes for our customers and consumers, as well as profitable growth and returns for our shareholders. If we can move forward now to the financial highlights on slide four. While Gary will cover the financials in more detail shortly, there are a few key highlights I would like to note. Group core poultry volume grew by 4.2% on the prior corresponding period, with volume growth in New Zealand particularly strong at just over 6%. The result reflects growth in retail, coverage expansion in wholesale, and a solid recovery in QSR and food service, which were particularly impacted by the COVID-19 containment measures. Our statutory EBITDA of AUD 443.9 million increased by 14.5%, supported by volume and revenue growth, combined with continued operating efficiencies, net feed cost benefit, and frozen poultry inventory reduction. Our statutory NPAT of AUD 83.3 million also recorded a strong increase of 108%. The company paid total dividends of AUD 0.165 per share, an increase of 17.9%, and reflecting a payout ratio of 71% of underlying NPAT, in line with our policy target of 60%-80% of underlying NPAT post AASB 16 adjustments. We move into FY 2022 with a very strong balance sheet, our net debt having been reduced by 24% during the year. Moving now to review our customer channels. Overall, despite the ongoing effects of COVID-19 containment measures that remain a feature of the markets we operate in, we saw demand strengthen across most channels as restrictions eased. In retail, the effects of pandemic containment measures have been particularly visible. Following strong growth in the first half-Australian demand in the second half moderated versus the prior corresponding period due to elevated demand that arose from COVID-19 restrictions in mid-2020. In New Zealand, we have previously noted the impact that the lower tourism levels are having on this channel due to ongoing border closures. We saw the performance of our QSR channel improve as lockdowns were lifted. In addition, promotional activity and new product launches provided additional performance benefits. Similarly, our food service channel saw the benefits of easing restrictions with a stronger second half performance. While this channel continues to feel the effects of the absence of international tourist arrivals due to border closures, increased domestic tourism has helped fill the void, driving demand growth, particularly in regional areas. We are also seeing growth in wholesale with the performance in the second half particularly strong, driven by the addition of new customers and expansion of our coverage. Despite the headwinds of the pandemic, our focus on the customer and broadening our customer relationships is helping us achieve good growth in this channel. The export channel has been a key channel for managing excess inventory. Australian export volumes were lower versus prior period due to partial export market closures impacted by a bird flu outbreak in some farms outside Ingham's' network. While in New Zealand, volumes improved as we utilized this channel to clear excess inventory. We anticipate volumes to slowly grow as export markets reopen. In late 2019, the business presented its strategic framework, which comprised of three pillars. To Optimize the Core, Transform to Tomorrow, and Create the New. Over the last two years, this framework guided our efforts and shaped our plans to deliver more consistent, predictable, and reliable returns. The benefits of the initiatives and actions taken under this plan can be seen in our results today. Optimizing the core, our program of continuous improvement, is delivering strong outcomes, driving lower costs, enhancing yield, and reducing waste. Through this program, we are delivering greater asset efficiency and return with relatively modest capital spend. We announced at the half year that in December we entered into an agreement for the sale of our Hamilton feed mill and associated dairy feed supply business. The feed mill was dedicated to production of dairy feed solely for external sale and was non-core to our operations. This sale has released capital that we will deploy to higher value opportunities. Under our pillar of Transform for Tomorrow, we are making good progress with our two HatchTech hatcheries in Victoria and Western Australia, and I will talk more about HatchTech later in the presentation. As discussed earlier this year, our Redland Bay research farm is fully operational with a number of successful calibration trials conducted. Future trials will be supported by our feed and farm R&D strategy, focusing on optimizing feed and raising the bar on animal welfare standards. Finally, our third strategic pillar to Create the New is delivering some excellent outcomes. During the past year, we had an enhanced focus on premium market through branded and private label product innovation, as well as the launch of plant-based products. This included the launch of a new brand, The Free Ranger, in April last year, which is now present in over 300 supermarkets. Product innovation, such as our Super Crunch range of frozen products, has been very successful with healthy sales volumes and strong positive consumer feedback. Our plant-based range is also experiencing continued success across QSR and retail channels. I'll now hand over to Gary to present the financial results in more detail. Thanks, Andrew, good morning, everyone. As Andrew noted earlier in the presentation, our financials are presented inclusive of AASB 16 adjustments unless we've stated otherwise. In the appendix to this presentation, you'll find additional information and reconciliations on our AASB 16 impacts. Turning to Slide eight and our profit and loss. The group delivered EBITDA of AUD 444 million, representing growth 14.5%. The improvement in EBITDA during the period, and also our gross profit margin percentage, was driven by a combination of volume and revenue growth, improved operational performance, the contribution from continuous improvement initiatives across our farming, primary, further processing, and supply chain activities, procurement savings, and the change in our inventory position, or provision versus the prior period. Gains from these areas were partially offset by increases in insurance costs and legal settlements. Stripping out AASB 16 adjustments, underlying EBITDA pre-AASB 16 grew at a slightly higher rate of 16.6% to AUD 210 million. Statutory NPAT for the year was AUD 83 million, which is a significant increase of AUD 43 million on the prior year, which reflects the benefits I've already outlined and also the absence of asset impairment this year. The company's effective tax rate was 26.4%, due largely to the receipt of an R&D tax credit related to a prior year, the benefit from which was partially offset by a provision that we made for an uncertain tax matter from prior years. The impact of AASB 16 on NPAT reduced in FY 2021 versus the prior period to AUD 14.5 million as expected, versus AUD 23.7 million. Turning to the balance sheet. I'm pleased to report that our balance sheet is in good shape. During the year, total inventories fell AUD 24 million as we successfully reduced excess frozen poultry inventory. We are now holding at levels we are comfortable with. This was offset by an increase in feed on hand as we secured physical supply post-harvest. This is simply a timing associated with physical delivery. We maintain forward cover of between three and nine months. Our receivables increased AUD 19.5 million to AUD 225 million, in line with higher Q4 sales compared to the prior period. In regard to leases, we added new growers and extended leases at some facilities, including turkey farms and our Cambridge DC in New Zealand. These increases were offset in our right-of-use assets and lease liabilities by amortization and cash lease payments respectively. As Andrew noted in the financial highlights earlier, we have recorded a significant improvement of net debt declining by AUD 74 million due to solid trading cash generation and prudent capital management. Moving to the cash flow on slide 10. Our cash conversion ratio was just over 100% during the year, with an increase of 340 basis points to 102%. This includes the level of our inventory procurement payable facility falling AUD 12 million over the year. Capital expenditure of AUD 66 million during FY 2021 was lower than the prior year as we maintained discipline given the challenges associated with COVID-19 that we experienced during the year, which also meant that we weren't able to access some of the sites during this period. The investment we are making in our two hatchery projects are progressing well, with the Victorian hatchery now operational and the Western Australian facility expected to commence operations around mid-year FY 2022. We also commenced investing in a new fully cooked line at our Auckland further processing facility. This project is expected to complete in the first half of FY 2022, increasing our capacity to service our New Zealand customers. As we announced in December, and Andrew mentioned, we entered into an agreement to sell our Hamilton feed mill for NZD 11.45 million, with the sale now completed. Looking to our capital management outcomes. We presented our framework at the half in February, and I'm pleased to report how we have performed against the key principles of the framework in FY 2021. As already noted, we're in a strong financial position with net debt of AUD 240 million, and our leverage is well within our stated range at 1.2x as a result of solid trading cash generation and prudent capital management. This represents a strong improvement on our leverage level of 1.8x as at June last year. During the year, we declared total dividends of AUD 0.165 per share, fully franked, placing us within our stated payout range of 60%- 80% of underlying NPAT, an increase of 18%. Our return on invested capital improved by 400 basis points to 22.4%, showing the impact of significantly higher profits. Our ROIC is calculated on a pre-AASB 16 basis, taking underlying NPAT, deducting after-tax interest, and dividing by average capital invested. Moving to slide 12. Late 2020 brought a bumper wheat harvest in Australia. This was reflected in wheat prices easing from historical highs, with the benefit of these lower feed prices being realized as expected in the second half. Prices, however, didn't fall as much as could be anticipated given the level of the harvest due to strong international demand driving high exports and keeping domestic stocks low. In the first half of the 2021 calendar year and continuing through into FY 2022, domestic wheat prices stabilized and have been firming. In contrast, as you can see in the chart on the right, soy meal pricing has started to ease from the highs seen in the year, however still above historical levels. Ingham's continues to maintain forward cover between three and nine months to secure supply, which is in line with our procurement strategy. I will now hand back to Andrew to discuss the segment performance for FY 2021. Thanks, Gary. Now turning to the Australian segment results on slide 14. The Australian business delivered good results in FY 2021. Core poultry volume growth of 3.9% was driven by general recovery as restrictions were eased and removed mid-2021, with good growth in QSR and food service channels and greater coverage in the wholesale channel also contributing to this result. Revenue growth was 4.8% for the year, with statutory EBITDA growth of 13.4% to AUD 371.8 million. As you can see, we also achieved improvements in margin during the year. This was driven by the realization of operational cost efficiencies, procurement savings, and the year-on-year benefit in stock obsolescence. I've already outlined the performance across various channels where we saw good growth, particularly in QSR, food service, and wholesale. Looking at New Zealand, we recorded strong poultry volume growth of 6.3%, driven by recovery wholesale and food service channels, and continued strength in QSR. As the market exited the strict national lockdown and resultant closure of most channels that had been in place in the final quarter of 2020, and which saw demand decline by approximately 50%. Total revenue grew up to approximately AUD 394 million, representing a growth of 2.2%. Poultry revenue grew by a solid 5.3%, while feed revenue was down -10.6%, due mainly to the sale of the Hamilton Mill. Statutory EBITDA increased 20.2% to AUD 72.1 million, while underlying EBITDA pre-AASB 16 grew by a faster rate of 32.2%, due to improving demand, further operational efficiencies, and cost control measures. The royalty payment from New Zealand to Australia, which represents a charge for various head office support and other services provided throughout the year, reduced by AUD 6 million for FY 2021, with a neutral outcome for the group. It is worth noting, inventory was very high coming into FY 2021 due to the lockdowns and resultant diversion of product to the freezer storage. We used export channels to good effect to successfully reduce inventories to normal levels. I move now to Strategy in Action. I'd like to spend some time looking at our Strategy in Action and some of the key outcomes delivered during the year. This program has been in Ingham's for several years, and more recently, we established a dedicated team which operates under the lean manufacturing rules and principles. The team has a whole of business responsibility, focused to drive accountability throughout the supply chain to identify process improvements, cost savings, waste elimination, and lowering overall operating costs. In FY 2021, the team managed approximately 200 improvement projects. In some cases, improvement opportunities will represent large-scale projects, while many others are found in the simple daily things that can yield efficiencies. Looking ahead, the business has identified 320 improvement project opportunities for FY 2022. I'd like to turn to look at a few examples. In March of this year, we opened our newest hatchery, located at Pakenham in Victoria. The hatchery takes eggs from our breeder farms and hatches the chicks before they are sent to our farms, who continue to support their welfare-led growth and care. The installation of HatchCare technology within the new hatchery is an Australian first, and leads the way with regards to animal welfare standards. HatchCare is an automated system that provides immediate access to light, feed, and water, with a generally more spacious environment for the chicks. In addition to providing improved health and welfare benefits and operational efficiencies, the hatchery is critical to ensuring that Ingham's has the capacity to meet future projected demand. We commenced operations at the Victorian hatchery in mid-2021, and we expect to commence the commissioning of the WA facility in the second half of 2021. We are investing NZD 17 million in a new further processing plant in Auckland, which is another great example of the group's ongoing focus on ensuring for future growth, capacity, and efficiency of the network. The plant, which is due for completion in the first half of this financial year, not only significantly improves our maximum potential production capacity, but it also greatly improves our processing capabilities in the provision of fully cooked product at scale. This in turn will support our partnering with customers in the development of new products for the market, with the new production line enabling us to drive higher production volumes in less time. While the plant is yet to commence production, our discussion with customers on new product opportunities has been very encouraging to date. Optimizing the core, I wanted to highlight a couple of other meaningful projects that have been underway across the business. The first project, one that you may have heard of us touch on previously, is the introduction of a spin chiller at the Osborne Park facility in WA. A spin chiller is like a giant water bath that chicken is put through and is a significant piece of equipment in our facility. The purpose of the machine is to reduce the temperature of chicken meat from around 34 degrees Celsius to less than four degrees Celsius within a few hours. There are a number of important benefits that come from the introduction of this piece of equipment. From a safety standpoint, the working environment for our team is greatly enhanced. The rapid lowering of meat temperatures improves the shelf life of our end products. As this process requires a significant amount of water, the introduction of this new equipment enables us to reduce our water usage, providing clear environmental benefits. Importantly, it supports throughput growth at this facility. The other big project we have underway is the development of a new distribution center in Victoria, which is a great example of how we're investing in our network, ensuring we maintain and improve the efficiency and capacity of our business into the future. The current Lyndhurst facility was deemed to be too old and has become too small for the needs of our Victorian process as we plan ahead. In 2020, we commenced planning for our move to a new facility, one that is located in closer proximity to our customers' distribution centers and closer to rail and transport infrastructure that provides nationwide distribution. In addition to these benefits, there are solid financial benefits that will accrue to the group over time. In addition to rental savings, we expect to achieve significant savings through reduced transport costs and labor efficiency gains. Similar projects are also planned for South Australia and Western Australia. Turning now to review our sustainability activities. At Ingham's, sustainability is about doing good for our people, our community, our environment, and our business. We have embedded sustainability into our business, and we have become recognized industry leaders in water stewardship, sustainable agriculture, and sustainable food production. We are committed to progressing our approach to environmental sustainability. This year, we have set 2030 targets, which include a commitment to science-based target setting for Scope 1 and Scope 2 emissions, which will ensure that we deliver meaningful reductions in greenhouse gas emissions, water usage, and landfill waste by 2030. In determining our approach and setting these targets, we work closely with our sites, suppliers, and customers to identify environmental and social risks. In collaboration with many of these same stakeholders, we also invest in research, which underpins our ability to identify and develop innovative approaches that result in sustainable practices, high quality and food safety practices, people safety, and the highest animal welfare standards. This year will also mark our first step in reporting against the Task Force on Climate-related Financial Disclosures recommendations. To be published in our annual report, we will also outline the steps we will take in the future to progress our reporting against TCFD recommendations. Our plan is to set meaningful targets and report on our progress transparently. In FY 2021, despite the ongoing disruptions caused by COVID-19, we have made good progress on a range of sustainability initiatives across the business. As you can see, our greenhouse gas emissions, water usage, and landfill waste generation have all improved year -on -year. We continue to take a leadership role in animal welfare with the launch of the Key Welfare Indicators. These indicators comprise 15 outcome-based welfare measures and are reported both internally and shared with our customers. The health, safety, and well-being of our people will always come first, and safety is integral to everything we do. Our Safety For Life program provides the foundation for driving safety performance across our business, and our safety performance improved for the second consecutive year. Tragically, however, in May of this year, one of our people died in a truck incident at our South Australian Bolivar site. We are assisting SafeWork South Australia in their investigations and continue to provide support to the affected employee's family. As an essential food production business during COVID-19 pandemic, we have taken additional steps to support our people, to protect well-being and our operational continuity. During FY 2021, we enhanced the paid pandemic leave, extending additional paid days off work for our people when they needed to get tested and self-isolate or care for someone else affected by COVID-19. We also recently introduced paid vaccination time, which removes a key barrier to our people getting vaccinated. I'd now like to make some comments on my time in the CEO seat and observations about the business. I commenced as CEO at the end of March, it has been an incredibly busy five months since. During that time, I've immersed myself in the business, visiting many of our Australian operations. I have not yet been able to visit our New Zealand operations due to travel restrictions. However, I've been able to spend a lot of time communicating with the New Zealand leadership team. I'd like to take a few moments to share some of my observations and thoughts with you. In addition to spending time on the ground across our operations, I've been working with members of the executive team to review our strategic priorities for the business. We are currently developing the next iteration of our strategic plan. We have a strong business platform and market position, and a key task for us will be to identify opportunities to leverage this into future growth opportunities. The growth will come from a number of different places, including doing our part to drive growth in the poultry category, including through product development and differentiation. In addition to internally driven opportunities, we will also seek to assess appropriate external opportunities aligned to our core business or suitable adjacencies to expand our existing operations. Operationally, we are in a strong position, and the business is focused on the right things. Our Optimize the Core strategy is performing well and will continue to be a focus for us. I see this strategy work stream as continuing to deliver meaningful benefits for the group into the future. There are good opportunities to further integrate and enhance both our business planning process and network optimization initiatives. As you have seen earlier in the presentation, the Optimize the Core program has delivered great outcomes for FY 2021, and we have significant pipeline of projects into FY 2022. I've also launched three key work streams across the business. The first is focused on our brand architecture with the goal of delivering a suite of brands that will be backed by appropriate investment. There are opportunities in all channels to further elevate our customer focus and bring more of a partnership approach to these key relationships, which will support the work under the next two work streams. Our product portfolio work stream is aimed at identifying pathways and strategies to grow profitable volume and create new products, while the growth roadmap work stream is focused on the poultry segment more broadly, supported by deep customer engagement, leadership, and insights. Overall, I believe we have a very capable and engaged team in place. I'm very happy with the composition of our leadership team, and I believe the skills and experience within both the executive team and across the business more generally leave us well-positioned to execute our strategy. In closing, we have delivered a strong set of financial results underpinned by solid poultry volume growth and recovery in key channels. The Ingham's balance sheet is strong, with leverage reducing by a material amount in FY 2021. I would like to take this opportunity to update you on the status of our supply agreement with Woolworths. I am very pleased to advise that Ingham's and Woolworths have an in-principle agreement for an ongoing supply agreement for poultry products. As I am sure you will appreciate, the details of this contract are commercially and competitively sensitive, and while we are not in a position to discuss it in detail, the new agreement replaces the existing supply agreement on broadly similar terms. The current lockdowns have created some uncertainty, and while it is difficult to precisely predict when they will ease, our performance in FY 2021 has proven the resilience and agility of our business and people to respond quickly and effectively to the challenges that COVID-19 continues to throw at us. As vaccination rates increase and restrictions ease, we would expect to see a normalization in consumer activity. Elevating sustainability across our business activities is a key focus area for us moving forward. While we have delivered good outcomes to date, we have more to do in embedding sustainability practices across the business, including enhancing our reporting of targets and outcomes. As we move into FY 2022, we expect volumes to show continued growth, also benefiting from new business across various channels. Feed costs have stabilized. However, volatility in international commodity markets has resulted in domestic pricing holding firmer. As we have discussed with you previously, our procurement procedures ensure we continue to hold between three to nine months of forward cover. Finally, our Optimize the Core program will continue to deliver meaningful benefits to the business through implementation of operational efficiencies across the business. We are also investing in our network through larger-scale projects, forgive me, including the WA hatchery, our Auckland Further Processing Plant, the Murarrie Red Area Replacement, a new breeder triangle service in Queensland, and a new water treatment plant at our Osborne Park facility. On behalf of the management team, I'd like to thank you for joining us today. With that, I will hand back to the operator to take your questions. Thank you. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. For the online webcast viewers, if you have questions, you may click and type in your questions on the Ask a Question located at the top right corner of the webcast page. We will pause for a moment as callers join the queue. Our first question comes from Alexander Patton of Citi. Please go ahead. Good morning, Andrew and Gary. How are you going? Good. Good. Thank you. Good to hear. Just a couple from me. Just on pricing, seems like Australian pricing was only very slightly up in the second half, despite what seems to be good growth in those QSR and food service channels and the cycling of a pretty COVID impacted PCP. Can you maybe talk about some of the moving parts there? Yeah, it's Gary here, Alex. We don't really go into the channels, in these presentations or publicly. You can see there's a bit of growth in there, which was promising in the QSR. Yeah, the mix of channels does move that number around a little bit, so I can't really expand too much. Okay. Just given there was, I guess, lower demand in the supermarket channel versus the PCP and a recovery in QSR and food service, it kind of seems like the recovery should've been a bit stronger. Yeah, okay. Yeah. Well, there's a balance. There's exports and there's wholesales as well. There's the balance of all of our channels. Okay, got it. No worries. I guess, keen to hear what you're currently seeing now in first quarter 2021. Have you seen a kind of a similar drop-off in demand, in those QSR and food service channels to the first wave last year? Has it not been as severe? I guess, your comment around volume growth, your expectations for that to continue, maybe just elaborate on what kind of customer wins you're seeing across the channels you might be able to point to. That doesn't seem to be as much of a supermarket retail surge this time around, also keen to hear about how the volume side of things as well into FY 2022. Sure. Pretty tricky to be talking about Q1 and FY 2022 at the moment. As you know, it's a moving target. Unfortunately, you'd be aware that New Zealand went into Level 4 lockdown this week. Which if you think back to Q4 last year, had quite a large effect on that business, and Level 4 lockdown in New Zealand means, the only thing open is supermarkets. Absolutely, from that basis you're going to see a drop-off in your food service, your QSR, et cetera, in New Zealand. Hopefully, that doesn't go on for too long. Coming back to Australia, probably the main difference here we've got, which what we've seen probably in the last 12 months, is a more widespread lockdown across the country, and affecting more people. We are seeing similar trends. We are seeing a bit more through retail, and a bit of a drop-off in some of the other channels. Then that supply, that ultimately is probably down a little bit due to COVID finds its way into the wholesale market. They are very similar trends to what we saw through various stages of COVID impacts along the way, but no one week is the same at the moment. Yeah, definitely seeing pretty similar impacts as before, slightly up in retail. New Zealand, severe impact. Australia, down a little bit with the volume finding its way into wholesale. Sure. I guess, is the magnitude of the impact similar or slightly less on a net basis? Well, compared to what is the problem in answering that in that question. We've had a number of impacts along the period of time. New Zealand, the impact is similar, albeit it's been less than a week at this point in time. Yeah. Okay. Sorry. In Australia. I wouldn't say, it's not as much as when COVID first hit back. Yeah. Sort of March, April last year, it's similar to what we've seen in those rolling lockdowns in Australia since, albeit, we've got it happening across more places at once at the moment than we've had in the past. Great. That's very clear. Thank you. I just. Our next question comes from Michael Peet of Goldman Sachs. Please go ahead. Oh, hi, Andrew and Gary. Congratulations on the result in a tough time. Thanks, Michael. Could I just ask the first question? Just on the provision on, Warren, from the oversupply issue you had previously, did you end up sort of getting out of that better than you thought? I'm just trying to think about, is there any sort of one-off margin benefit that you might have got last year that may not repeat this year? We called out the impact year-on-year, was that sort of AUD 13 million, AUD 14 million. If you recall, we made a provision around AUD 9 million last year, and we wrote back sort of AUD 4.5 million in the first half. We've called that out, so your math would tell you that we still retained some of that provision through at June 30. I would say it's fair to say that we had pretty orderly reduction of that inventory that we'd called out in the first half. We did probably end up a little better than we hoped in regard to that. Does that mean there's a one-off this year? Not necessarily, because what we sold that inventory for this year, we would sell those products for similar amounts into the future as well. The main impact's probably the change in the provision. Okay. Maybe just a comment, if you could, on industry consolidation. I think there's one of the smaller competitors you have up for sale at the moment. Do you believe that could Ingham's participate in that and then potentially take out that competitor? Do you think ACCC would be a block? As a general comment, we'd obviously assess any opportunities that come our way to advance the strategic agenda or create long-term value. I don't think it's appropriate for us to comment on that specific transaction at the moment. No problems. Understand, Andrew. Just final one from me. New Zealand, fantastic performance there, notwithstanding lockdowns right now, but I guess double-digit margin there in the second half. Is that sort of where you feel the business should be, or was there anything that you could call out that helped that margin that may not repeat? Just trying to get a sense of where that could be longer term. It was pleasing. Part of the reason for the increase in margin, but this doesn't detract that it will continue, is the royalty charge between Australia and New Zealand reduced. You saw a boost in the margin this year as a result of that. I would expect that royalty charge would be more similar to this year going forward. Not a reason to not think it'll continue. Great. Thank you very much. Our next question comes from Craig Woolford of MST Marquee. Please go ahead. Morning, Andrew. Morning, Gary. Hi, Craig. Hi, Craig. Hey, guys. Just wanted to clarify, there is always lots of movements in your channels, and I know you don't want to give us detail, but just trying to get a feel for how those channels contributed in 2021 versus where they were pre-COVID. Is there quite a difference in that channel mix in your business in both Australia and New Zealand still in the FY 2021 results compared with what it was pre-COVID? Big picture, not really. Not a massive change in big picture terms. Right. Is wholesale any sort of bigger or smaller or that tends to be a bit of a swing factor overall? Yeah. We've alluded to that we've been growing some share in wholesale. That's probably from the growth rather than cannibalizing other areas. You've got a customer like HelloFresh in wholesale as well, which is characterizing there, which is quite a strong growing business that we're participating in. Yeah. Understood. You mentioned, Andrew, in your comments on the business you'd consider adjacencies for Ingham's. I'm sure you don't want to go into too much detail, but is there anything you can help us understand? Where would you not play? Is it just proteins? Is it non-protein food products that you would consider? Is it upstream in the value chain? Is it downstream? There's quite a few things we could consider on that adjacencies? That's a pretty broad spectrum you've put there, Craig. Look, I think at the moment, our focus is going to be very much on the core business. I think that's where there are still very good opportunities for long-term growth and returns there. I think as we develop our strategy into the next phase, it'll be still very much around the core business. Okay. It's a broad question to ask on capacity utilization. There's a whole bunch of projects you've outlined there. Is there anything we should be mindful about over the next few years around capacity tightening up, given the strengths in volume growth for poultry? Is there any risk of another major CapEx project coming because you need to expand capacity? Andrew did call out, for example, that we were making some investments. One of those, for example, was the breeder triangle servicing Queensland. That's part of increasing ultimately our network, our end-to-end network, which we need to deal with that ongoing demand. Yes, we were making investments, the red line area, whilst the replacement will also help with that capacity. Ultimately, the hatcheries now coming online help with that capacity as well. Yes, but if your question is, are we about to announce the building of a new primary processing plant, then that's not on the agenda in the short term. Okay. Great. Thanks. Thanks, Gary. Thanks, Andrew. Our next question comes from David Pobucky of Macquarie Group. Please go ahead. Good morning, guys. Congratulations on the results. Just a couple from me. Just on your operational efficiencies, are you able to provide a bit more color around the quantification there? What benefit can we expect in the next few years? If I can ask in another way, what margins are you targeting and when do you expect to get there? Thanks, David. If you look at our margins, we got up to sort of just shy of 8% for the group. If you look back over the last few years, probably the highest margin I think might have been in FY 2018, was at 8.8%. We've certainly got sights on reaching the peak rates that we've had before. That's probably the best way of thinking about that. Now, operational efficiencies will be one part in increasing those margins. Yeah, we'll just try and make as big a margin as we possibly can. That's helpful. That makes sense. Thank you. I think you've touched on this a bit already, the last time we were in a serious lockdown, margins were impacted in the most seriously impacted periods. What are you seeing currently? Are you seeing any inventory issues pop up over the last month or so? What are you seeing this time around? What's different this time around? Is there anything that you've been doing internally that may offset those impacts? Yeah. I think what's different is we're better practiced at it. We're more nimble, we're more familiar with the things that we've done before, and then how to enact those things quickly. In saying that, we haven't had restrictions across the Eastern Seaboard for a while, since the first one. We are seeing a bit of extra supply in the market. As I was talking about to one of the earlier questions, so there it does have an overall demand impact and we are seeing some increase in our inventory post year-end as a result of that for the similar reasons. I think what is different is we're not seeing the same degree of panic buying. There's still supply changes, of course, but we're not seeing it to the same extremes as what we were seeing last time. Whilst the week when the panic buying set in and you sell a lot of chicken in that week, then there's a couple of weeks later where people have got fridges and freezers full of chicken and there's not so many sales in that period. It's a little more smoothed out now, which is easier from a supply chain and from an operational perspective to manage. Long and the short of it is, yes, we are seeing a bit of an increase in inventory again. The margin you referred to in the Q4 is probably more in, yeah, how do you dispose of that? How do you clear of that as the market comes back into balance? There's possibly a little bit of that coming. Thank you. Just one last one, if I may. Just on the R&D tax credit, it's typically been less than AUD 1 million. What can we expect in FY 2022? Oh, I wish I knew. That was in a prior period. It was in relation to principally husbandry and nutrition and feed research through that period of time. We have carried out similar activities to that through into more current periods. I think there's the potential for some further R&D claims, but that's not locked in and not certain at this stage. Great. Thank you very much. All the best in the year to come. Thanks, David. Thank you. Our next question comes from Phillip Kimber of Evans and Partners. Please go ahead. Hi, guys. I just have a few questions just clarifying some of the accounting. With the inventory provision, I know in your preso you've said that you utilized roughly AUD 14 million of it. If I look in the Note 9 in the accounts, the inventory obsolescence provision falls from AUD 14.8 million -AUD 10.6 million. It doesn't fall by that AUD 13 million or AUD 14 million that you talked about. Are there other things going on, so all we really benefited from was about AUD 4 million reduction in inventory provision because there's some other factors happening? I just wanted to be really clear on how much the inventory provision helped in FY 2021, sorry. Yep, happy to. You're correct. It did drop that AUD 4 million in FY 2021. Why I called out that 13.6, whatever it was, I think, is that in the prior year there was like an AUD 9 million provision that we made. When you compare the two years and the impact in total is how you add the two together and you get to the AUD 13.6. Right. In the actual year we're talking about, this year, all that you used. There was the four mill. In a net, it's four. Correct. Yeah. Okay. Just to be clear on how that works, you provide for it because you and the auditors are of the view that you're going to sell it below cost, effectively, to clear it. Is that effectively what happened? I think that's what Michael was asking, and I interpreted what you said that you might have done a bit better out of clearing that inventory than what you thought. Is that in a profit sense, i.e., you wrote AUD 100 down to AUD 80, and then you sold it for AUD 90? I guess that's the bit that we're trying to understand, too, because we're trying to work out what's maintainable earnings. Sure. You are correct. What you just said is correct. Yes, we make a provision because, in essence, we made it because we thought we're going to have to clear this possibly through channels that we don't normally use. Could be some distressed sales. In your example, you cost AUD 100 to make, you provide AUD 20 to bring it down to AUD 80. Then I would say on balance, on average, it's not the same for every product, but on average, yes, we did a little better than that AUD 80. Right. I know we're hypothetical numbers there. Is there any way to quantify that? Just because we don't want to. That's fine, and it's perfectly accurate to include that in your earnings this year. It's just, I guess from our point of view, if it's a particularly large number that isn't necessarily going to repeat, we probably wouldn't mind knowing about it. That's the bit. Is there a way to get a bit more color on how much that dollar amount was? Yeah. I think the material bit to focus on is that, if you're comparing year-over-year, is the AUD 13.6 that we've called out. On the other benefit that we're talking about, or the other difference we're talking about, I wouldn't say is significant. You got a AUD 14 million benefit in this year's result from. Just to repeat, and that was your first question. Just to repeat, in comparing FY 2021- FY 2020. Right. AUD 13.6 million improvement. Purely in the FY21 results, there was a AUD 4 million benefit from the reversal of inventory. Yeah. That is also offsetting some sales that we made. When in your example of going to 100- 80, and then say we sold them for 90, then we made, in essence, a loss on a bunch of those, and that reversal of inventory offsets that loss. Right. Okay. Basically what you're saying is the numbers as we see them are reflective of going forward. There's not some sort of unusual number that we have to think about to exclude from your reported EBITDA or underlying EBITDA because, you had this unusual situation where because of COVID, inventory basically built up and you had to clear it at lower prices, that's not artificially improving your profit in FY 2021. It would be somewhere between AUD 0 million and AUD 4 million of that impact. Okay. Yep. Cool. Sorry to harp on about this because I'm getting lots of questions on it myself, is on the R&D, I understand the tax credit and you've called it out. I know you didn't strip it out of your underlying numbers, but you've called it out. There was also another sort of provision, another matter that you said partially offset it. When you say partially, the vast majority of it, or is it still really an item that's benefited your profit this year by AUD 8-odd million, as you say, maybe you'll get some more in the future, maybe you won't, who knows. I'm just trying to get sort of a net benefit that you got from the R&D and the other provisions that you took this year. Sure. We called out the AUD 8.5 million. I'm not going to call out specifically the number on the other one, but I'd direct you to note five in the financial statements, and you'll see there's a prior year adjustment in there, and from memory, I think it's about AUD 2.9 million benefit. That I think gives you a pretty good indication. Okay. Yeah. No, that's good. That's very helpful. Thank you for all of that. No worries. Thanks. Our next question comes from Rod Sleath of Rimor Equity Research. Please go ahead. Hi guys. Thanks very much for taking my questions. I have a couple. First of all, I just want to come back to the question with regard to potential margin. I guess this is perhaps a qualitative rather than quantitative question, but to say that you are targeting potentially getting back to 8.8% margins, which is the previous peak that the business has made, doesn't seem a particular stretch when you're close to 8% this year, and we've also got some negatives in terms of lack of export of what is effectively higher margin sale of extra bits of the chicken. Also, given the de-bottlenecking that's been taking place, combined with the volume growth that we're seeing in chicken, and some of the larger capital investments such as the new hatcheries, that 8.8% doesn't seem a stretch at all. I guess there's a couple of questions. One of the comments made was with regard to perhaps improved brand visibility, which I'm reading as more spending on brand. Are you seeing this as an opportunity to reinvest at least some of the benefits from efficiency gains into product development and brand development? A more visible brand, perhaps? Yeah. Just before jumping into brand, and I'll let you decide whether that's a stretch or not, but it's about AUD 30 million, at a EBITDA level. Is that sort of delta if you just get the calculator out. I'll let you decide whether that's a stretch or not. On the brand question, I'll get Andrew to respond to that one. Yeah. Clearly, we would like to drive the contribution to volume from higher margin products over time, typically that's done with differentiated value-added branded product. Not always, because sometimes we can do that with some of our customers like QSR, where not necessarily it's branded. The general ambition we'll have as we think about our strategy and our product portfolio in the years ahead is how do we create a better mix from higher margin products? That will be certainly one of the things that we'll be looking very closely at. Okay. No sort of defined expectation to increase spend in that area? We're not looking at a shift of cost spending? If you're going to do that, at some point you need to make an investment, but that's not determined at this point. At the moment, the spend levels are largely where they've been historically. If they were to change, it would be because there was something worth investing in that was going to drive a better return. Sure. Okay. Sorry. Gary, just with regards whether AUD 30 million additional EBITDA is a stretch or not, I guess that depends on the timeframe, which we didn't quantify. I was assuming 8.8% over medium-term. Sure. Okay. Just one clarification. With regard to the inventory procurement trade payable facility reduction of AUD 11.7 million, is that showing a change in policy? Or do you see that as a general de-leveraging because you had available cash flow? It's probably more, I called out that we're holding some more feed inventory at year-end physically as well. It's a combination of what we hold physically versus what we have in forward contracts. No, not really a change. It's just a timing difference. I know that the level of that facility show has interest amongst some stakeholders within groups. Just being transparent as for how that had moved. Sure. Okay. That's something we should just expect year to year, there can be some fluctuation in your working capital. Yeah. As a result of the use of that facility. Correct. Great. Okay. Oh, just one more question. Sorry. Apologies. With regard to the new hatchery in Victoria, you mentioned that the capacity is 850,000 eggs, I presume. What are you actually running at in that hatchery today? I guess how much growth potential or growth capacity sits within that investment? The hatchery is still in the startup phase, so it's clearly not at 850,000 at this point because it only started operating a few months ago in June. I'm not exactly sure where it's at today, but it's not operating at full capacity. It has capacity to grow beyond 850 if we had need for that in time. Okay. All right. Is 850 sort of a level that you would expect to use within the relatively near term? I don't mean the next few months, but within the next couple of years? Yeah. Exactly. Yep. Yeah. Okay. Great. Thank you very much. Thanks, Rod. Do we have any questions from the webcast? We do have one question from the webcast relating to vaccinations at Ingham's. We have obviously been supporting our people in terms of a whole variety of measures in terms of how we deal with the COVID pandemic. One of them has been around vaccinations. We have provided paid leave, particularly for our frontline and factory people so that it makes it easier for them to take time off work and to get vaccinated. That's a good initiative, and people are taking that up. The other question was whether we would consider moving down the path of mandatory vaccinations. Look, we've got an open mind on that at the moment. We're doing all we can to encourage vaccinations. Certainly, our workforce by and large, is enthusiastic about getting vaccinated. At the moment, we don't feel the need to make that mandatory, but we'll keep a watching brief on it. There are no other questions online at this time. This concludes the question -and -answer session. I would like to turn the conference back over to Mr. Reeves for any closing remarks. Okay. Thank you very much. We hope that you've enjoyed what we've put in front of you today in terms of some very solid results. Hopefully we've been able to give you some clarity through the question and answer session. Look forward to further conversations. Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.