Good morning, everyone. My name's Mark Flesher. For those that don't know me, I'm with the Morrison & Co. Infratil team, and I look after the investor relations, with a big team around us in terms of able to put on today. For those of you who joined us last night, thank you. It was a fun evening, and I'm pleased we've had so many people turn up this morning, knowing some had a rather late night. I get to just do the housekeeping to start with. Again, I had some helpful hints from Boginski. He says to me, "Are you gonna do your thing?" I said, "What's the thing?" He said, "You know, do the thing about toilets and volcanoes." I said, "What do you mean?" Evacuation is the doors will open here. We'll go outside, either outside this bit or onto the grass. Toilets are down in the middle. My advice to Boginski if there's, if there's a volcano eruption, not to be on the toilet. You know, that's my roasting of him for today. The presentations for today are up on our website and have been released in the New Zealand Stock Exchange. We are videoing today, so we will ask when we get to Q&A if you could use a mic. It isn't being webcast live this year. We thought it was nice to have everyone here in person, which so thank you for joining us. Those videos will go up on our website from Monday. I think there's a Wi-Fi guest pass on the wall there for those who want to use it. I think I get to wrangle the speakers today a little bit on... They've got a big clock here that says when their time's up. We will look to do Q&A as we go through each session and would welcome obviously any questions. That's it from me. It's my pleasure to welcome Alison, the Chair of Infratil, to kick us off. Thank you. [Foreign] I'm Alison Gerry, I'm the chair of Infratil, and I'd like to welcome you to the first in-person Investor Day since 2019. We became very used to delivering our financial results and the Investor Day virtually, you know, it's just actually so nice to be back here in person. You know, the team does assure me that even though it is, you know, lovely to be here and sometimes it's a bit off-putting standing up in front of a crowd, it is much easier than talking to the camera for long periods of time. I'm sure that you'll agree that having interactive sessions is gonna be fantastic, and we have lots of people here today from Infratil, from Morrison & Co, and from our portfolio entities, and that's really going to add to the energy for the day. Today we've got execs from CDC Data Centers, Longroad Energy, Manawa, Qscan, RHCNZ Medical Imaging, Vodafone, and Wellington Airport. Take the opportunity to catch up with some of them. Everyone has got a name tag, so I really encourage you to meet some of the team. As Mark said, it was great to see most of you at the investor dinner last night. A fantastic venue and everyone certainly I think is going to go back to listening to choirs 'cause they were just absolutely outstanding. We enjoyed seeing the Prime Minister, Chris Hipkins, you know, he was very generous with his time and did quite a number of Q&A. He's also got fantastic hearing 'cause I certainly couldn't hear most of the questions from the back of the room. He did paint a great picture of opportunities and efficiencies that his government is keen to access. You know, with just eight weeks into the job, one can only admire the Labour Party's seamless trasition of prime ministership, and I imagine the New Zealand Rugby Board are taking notes and watching with a little bit of envy. In our first session today, we're going to have Jason and Phillippa, who are gonna give us an update on our Infratil portfolio and the outlook ahead. A particular focus of the Infratil board has been on our portfolio mix, the diversification, by geography and sector. Our portfolio was, you know, very resilient through the COVID period. Going forward, we just want to make sure we've got the right mix of growth assets and, you know, defensive assets to continue to deliver on our long-term target, returns to shareholders of 11%-15%. The team has been doing some detailed modeling of the portfolio to see how it's gonna perform over time. You know, we want to do that because we want to have reasonable certainty that we're going to meet these target returns. It's going to be no surprise to you that we are still very focused on a number of key sectors that we think offer attractive long-term opportunities that are supported by strong underlying fundamentals. Renewables, digital, healthcare, and airports haven't changed as our key investment sectors, but we are constantly looking within these sectors or within adjacencies for the next set of opportunities. These may be new ideas that matter or are options that are activated within our existing portfolio, and I think we're gonna give you a little bit of color on those today. I know that we've all been following closely the challenges in the global banking sector. You know, I'm just really pleased to be able to report to you that capital management and treasury activities have long been a focus for the Infratil board. We've got a strong internal team that are focused on ensuring that we've got the right levels of liquidity, including cash balances and undrawn facilities. We've got longstanding and strong relationships with high-rated lenders. Some of you are here today, welcome. We have our very long-running, mature, and consistent retail bond program. Together, those elements, you know, give the board comfort that we'll be able to face any uncertainties that do arise, and importantly, set us up to respond if we do see some interesting opportunities appear. Over the last two years, while we've been, you know, not seeing you face to face, we've actually had a number of people changes both at Infratil and at the manager. Jason has become our third CEO in 29 years. Paul Newfield became CEO at Morrison & Co. and is only the third CEO. At Infratil, we're not quite as good. I'm the fourth chair, and I succeeded Mike Tumay last May. We have two new Infratil directors joining us, Andrew Clark, who's here in the audience today, and also Anne Urlwin. Andrew joined the board last June. He is Melbourne-based and has recently retired as a senior partner at BCG. Anne Urlwin, a very well-known New Zealand director, joined us last December, and Anne is now the Chair of the Audit and Risk Committee. However, despite these people changes, as you would expect, Infratil's active approach to investment in ideas that matter is unchanged. I'm also really pleased to be able to tell you that our relationship with the manager, Morrison & Co., is very healthy. There's always healthy tension, but we think they continue to perform very strongly. You know, we're excited to see the investment that Morrison & Co. has made in its global team as the nature of our symbiotic relationship means that for Infratil to continue to grow and expand geographically, so too must our manager. One area I wanted to mention that we're probably not going to discuss too much today is Infratil's commitment to sustainability. While sustainability is integral to our strategy, portfolio, and investment management, we recognize the need to be more articulate in how we are gonna communicate this externally. A great example of this progress is that Infratil, together with Morrison & Co., recently committed to setting science-based emission reduction targets. Setting and achieving these targets won't be easy, and it's gonna require a great deal of collaboration and engagement with our portfolio entities. You know, given our global footprint and scale, we think that Infratil's got a real opportunity to make a positive difference, as well as being a market leader in sustainable infrastructure investment. Lastly, I'm just gonna set out a little bit of how the day might work. As I said before, we're gonna start with an update on the portfolio from Jason and Philippa. We're then going to focus on our healthcare platform. We'll hear from Rachel Drew and Michael Brook from Morrison & Co., who'll be followed by Chris Mundy, CEO of Qscan, and Terry McLaughlin, CEO from our RHCNZ Medical Imaging business. I've said to Terry it's quite a long name to say, we may work on that. After the break, we'll move to renewables to hear from Morrison & Co. energy experts, Vimal Vallabh and Deion Campbell, with our CEO of Longroad Energy, Paul Gaynor, leading us into the lunch break. After lunch, we're going to have a manager update from Paul Newfield before finishing the day with a focus on digital infrastructure and connectivity. First, hearing from Lewis Bailey from Morrison & Co., then from Greg Boorer, our CEO of CDC Data Centers, and lastly, from Jason Paris, CEO of Vodafone. Finally, if we are on time, around quarter to three, Jason, our Jason, is going to wrap up the day. [Foreign]. Have a great day. Thanks, Alison. [Foreign]. Great to see everybody. I just took a photo of you all before. You look amazing. Well done. Thank you, Alison. I think it's great you make yourself available to do these things, and I think you've continued a great tradition of being available to everyone here to see that, you know, the board is active. I 100% agree, the relationship is really strong, right, but it is a constructive relationship. I was gonna do a bit of an intro this morning to try and set the day up. Really, this is almost the only chance you guys will get to interact directly with particularly our CEOs and management teams, and that's not just through the Q&A and the exceptions, right? You should definitely take advantage of the gaps during the day around lunch, if you didn't already last night, to talk directly to them and see if what I tell you during the year matches up with what they tell you today. My job, I think, really is just to lay the framework for those sorts of discussions, and then I'll come back at the end of the day and try and wrap up anything you didn't feel was quite addressed and do it that way. Let's get started. This is a pretty familiar setup now. We open all our presentations with this kind of Infratil on a page. The things that are interesting on here to me are. How much investment we got done last year, and I don't think that's really slowing down. Remember, we calculate that. That's the $1 billion you've got there on the slide. We calculate that on a proportionate basis for Infratil, and really speaks to a lot of the theme you'll hear today, which is that the platforms that we've built and the positions we've got ourselves into give us a heck of a lot of options to continue to invest internally in attractive opportunities. Hold that thought. I'll come back to updated guidance as well. Next is another familiar setup slide. This is really the Infratil model and has been that way for a number of years, certainly for as long as I can remember. It speaks to what our definition of infrastructure is, which is quite broad, but still actually reasonably clear, certainly in our heads, that it needs to have defensive characteristics exposed to long-term trends and be capable of taking further and further reinvestment. That theme I mentioned at the outset. None of that has changed and feels like it will stand us in good stead in the future. It's really cool doing this slide. I enjoy it. Looking back at what, at what we said, last year in this forum and seeing what we actually got done. I mean, the big things last year were obviously the Longroad investment process, where MEAG joined us in that platform, we said we were going to look at that at the start of last year. We said last year we were assessing capital release options for Vodafone, which was our way of saying we'd look at selling the towers, which we completed as well. Two big things done last year, and I think pretty material for the portfolio. We talked last year in the healthcare section, which we'll hear more from them in a second, about looking quite actively at building out in Australia, because remember last year, we had finished building out our national footprint in New Zealand, which is a pretty key strategic move. We talked about looking at teleradiology and adjacent healthcare businesses. I think we might have called out cancer care. Actually, the way the year turned out, we experienced more longer headwinds, I think, in that space than we anticipated at the start of the year. We found it more difficult to find bolt-ons, I guess, for that business at attractive valuations. Valuations have been quite high in that space. We, we really only made one small move, which was buying Envision, which we thought was a good move and a good value. And it's kind of a similar theme in the adjacent healthcare businesses sector. The ones we looked at were too expensive for what we thought was value in the space. We were active on those things, but nothing really came off. We did look a lot at teleradiology, though, and you'll hear more about that in the future. It does look like an incredibly attractive idea, and some of the things we're doing today are not necessarily diving into that space, but getting ourselves set to have that option in the future. It looks really interesting, in particular for stretching beyond New Zealand. We have evaluated a number of markets offshore, which you might hear a little bit about from Rachel and Mike. Quite a lot of work in that space, but really the right thing it felt like to do last year was watch and wait a little more on these bolt-ons and do some of the prep work for some of the longer-term strategic goals we've got in mind there. The things we said last year, actually, that was quite amusing to look at again. We had room to add more core cash-generating assets. I've got a couple of charts later on to show you why we thought that and why we think we sit in that. That's probably not a major priority today. The thing we really didn't get done was the RetireAustralia strategic review. We obviously ran that, spent quite a lot of time working on it. In the end, it wasn't the right thing to do, and we're happy to be holding that, and that business is moving into its next phase, which I'll talk about in a second, as well. The other thing where we didn't get tangible results yet, but we're still very active on, we've talked actually all of last year about continuing to assess attractive investment opportunities in the data center and connectivity space. I'll talk a bit more about that too, but that still feels like a high priority task and quite attractive. Let's have a look at what the portfolio did over the year. This is what we showed you last year. Quite, quite a big overweight in digital. That's come down a bit. You see renewables stepping up to actually closer to what I think it ought to be in the portfolio. Now, it's now a quarter of the portfolio. A lot of that is the effect of the Longroad transaction and really speaks to the kind of embedded ability in the smaller platforms there to through some processes like this or tailwinds hitting them or just as they mature, to become a much more relevant part of the portfolio and to deal with the strong positions we have in digital to try and keep the portfolio, more and more diversified. You'll see Fortysouth on there now, which is our investment in the towers business. You'll see, Jase, we've got your new brand on there and Deion will be talking about Mint later on as well, which is the new member of the family. We feel quite good about that mix, and it speaks to the focus areas that we've talked about for a long time. Another interesting view of the portfolio is this, just seeing the global diversity we're starting to introduce and that should increase in percentage terms in the portfolio as well, right? As Galileo reaches, we hope, an inflection point like Longroad has and potentially Gurīn in the future as well. You'll hear from Paul later on about how Morrison & Co is investing ahead of Infratil's needs to make sure we've got the capability we need in those markets as the portfolio grows there. On sustainability, which Alison mentioned, we're continuing to update you on this as we make progress. I don't know if Louise and her team are here. Louise, there you are. I know you've been incredibly active in this space for us. The big news that we released earlier in the year was that Infratil and Morrison & Co have become one of the first, not quite the first, but almost today, to sign up as a financial institution to Science Based Targets initiative, which will mean that across our portfolio, all of our portfolio entities over time will need to sign up to emissions reduction targets that will be validated by the Science Based Targets initiative, which means they will be aligned to the one and a half degree goals that seem almost impossible now, but certainly from an... as a globe, but certainly from a individual company perspective, it's very clear, I think, actually, what those individual companies will need to do to at least get themselves sorted for those initiatives. We have our first sustainability report coming later this year. Pretty much straight after that, I think we'll be able to start publishing exactly where the targets are going to be and over what timeframe they are for our companies. I know certainly all the major ones who are well established are already well on their path to doing that themselves. Our job is for some of the smaller companies who are maturing and getting set up to get them on the path as well. It'll actually become a lot easier once we do the first of those, 'cause we'll have a really good template for the new ones as well. We're pretty proud of that progress, and you'll hear more on that later on. This is a pretty traditional graph, and Alison spoke about it before, how we go about blending higher and lower risk assets to achieve our target return. This is a graph we've been showing for a while. What the team have done this year is relook at how we cut the portfolio and present it to you as split between those risk-return ranges. We call them core plus and value add, and development. What we've gone and done is break down our valuation models for those businesses and actually pull apart something like Greg's business at CDC into the highly contracted core part of the business and put that in blue, and the under construction, say, data centers, and put that in the purple, and then the future build, we've put that in the yellow. Actually, when you run that theme across actually all of our businesses, it works. When you look at the target equity return for those grades of risk, it works and more or less falls in line with that. What it tells us is that actually in the highly contracted, highly reliable parts of the business, we are quite well set as a portfolio. I think last year when we showed this graph, when we were doing it the old way we used to do it might have had about 35% or something in that category, which is where that comment about having room to add to that came from. Now actually we feel quite set in that. I think there's still a little bit more work to do on the border between sort of blue and purple, and yellow and purple, if you like. That purple in the core plus value add feels slightly too narrow to me. It does also speak to how we're generating our returns, which is very much a steady state business like Greg's contracted data centers, blended with areas where we can apply more capital, like building new data centers, where we see still quite attractive returns on capital that fit within the ranges that we've always talked about in the past. That obviously takes a lot of our focus, making sure the portfolio and our teams and our strategy is pointed at areas where we think we can still make returns on capital in that 15%-25% range, and we feel really good that we are doing that. Have a look at that. We'll update that again on when we release the full year results, and we might talk about how those things move if you flex the calculation for, say, inflation or interest rates to give you a little bit more insight into how that all builds into our target return. That's kinda where we are and where we've been. I wanted to say a few things about where we think we're heading. This is kind of an interesting graph. I mean, the macro environment I think is clear to everybody and that it is unclear. And there are many people in this room who could speak to it better than I could. Certainly, volatility through interest rates, the likelihood that inflation, and both inflation and interest rates are higher for longer, is our reality. In theory, that should support infrastructure investment, right, as real assets with strong inflation protection relative to other assets. In reality, this year, I would say listed infrastructure's been a little bit disappointing. It's tended to trade with bonds, right? It's tended not to necessarily look like it was doing the job infrastructure's supposed to do. I think that's obviously relative to everything else. Certainly in private markets, that characteristic of infrastructure resonates incredibly strongly and resulted last year. It's a little hard to see. If you look at the last four bar graphs, I think that adds up to about $170 billion. That's how much money was raised for infrastructure funds in 2022 because everybody was seeing that theme. That was a record year for infra, and I think, Paul, the first year infra exceeded private real estate funds. Still behind PE obviously, but a monster year for infrastructure fundraising. Which is nice if you're looking to sell assets, but harder if you're looking to invest, right? That means more competition. A really interesting thing we've noticed is that in the second half of last year, really, that fundraising fell off a cliff, right? That's those last two graphs. It is definitely decelerating, I think, in the amount of money that's available free to allocate to infrastructure. We don't necessarily know why, but it's a fact. Deal numbers, which is the graph on the right, seem to be holding up. Our experience of deal processes is a bit different from what that graph says. Processes definitely feel like they're taking longer and it's for any number of reasons. You have investment committees who are worried about all sorts of different things in their portfolio, but everybody's worrying about something, and you just need one reason to mean that person pulls out and suddenly you don't have sales processes with five or six people and being driven to, you know, eight-week accelerated DD timelines so much anymore for a bunch of assets. Which means we feel actually that we could be entering that period we've talked about for a while, since a lot of this disruption started, where there might be opportunities that emerge, to get assets that fit our portfolio or that we really like the look of for the future at prices that don't feel, don't feel crazy at all, and could be quite interesting, unlike, say, the healthcare theme I talked about earlier on. Paul might talk about that a little bit more as well. With that backdrop, how are we thinking about, how the portfolio evolves, over this year and kinda longer term? Why don't I start with digital infrastructure. I think the first point that we wanna make for both digital and renewables is that the platforms we've got give us really great opportunities to either benefit from or invest either through those businesses or outside of them into the future trends that are shaping those areas, and that will provide attractive investment opportunities in the future. I think your job today is in the setups for those renewables and digital sessions, is to listen out for the areas that those businesses are thinking about for the future. We feel really good that, you know, we don't need to compete in the open market to access AI or the computing requirements for augmented reality and virtual reality, or edge computing or quantum computing. Actually, within our stable already, we have great access points to those things, and there are unique characteristics of the businesses we have and the teams that we have that give us really good access to those ideas in the future. We can talk about that as long as you like. I've put a couple on here to give you a feel for it. That, that is number one message. We've also learned through the year, as we've thought a lot about this, looked a lot around the world, as I mentioned earlier, for data center and connectivity opportunities, that a bunch of the things that we do within our businesses are not necessarily done the same way elsewhere in the world. We think means our capability can translate into other markets. The way Greg and his team provision their data centers isn't the way it's done elsewhere in the world. Actually, the way they do it is quite well suited to the way data centers will need to be architected and built in the future for some of these new computing use cases, as an example. We feel positive about that and the market environment to address some of these things feels like it could be heading our way as well. On renewables, it's a very similar story. The one addition I would say to that, though, is, Paul's gonna talk to this as well, right, guys? We transacted our transaction with MEAG before the Inflation Reduction Act, almost like a week before, I think it was something crazy like that. That has supercharged the industry in ways we never expected. To us, that means that the stronger outlook from that Inflation Reduction Act is definitely not reflected in valuations of Longroad, it's our job to explain to you a little bit today and during the year what that actually means. That, we feel really positive about that. As I mentioned before, this platform, like the others, are giving us ways of accessing future important technologies and themes in that sector. You'll hear from Paul today about an early investment we've made in a business that produces hydrogen for public transport and vehicles, light vehicles in California, for example, which will be a key technology, will be a key theme. They're doing it at incredibly attractive returns, probably in one of the more attractive markets in the world to do that, we can do that through Longroad, through their connections with people on the ground who can monitor that investment. The benefits of that can spread throughout the group. I think that's pretty exciting. Galileo, I think we were in Zurich last week. We had our annual strategy session with the team. They feel to me like they're set to demonstrate their potential. They've got their first set of projects in the market for sale this year. The market has moved very much to selling projects before financial close now because there's so much demand for projects and utilities and others are snapping up these projects at incredibly attractive returns. Even though we've switched to a greenfield development strategy, which would typically be longer, they look to me to be set to demonstrate how that can make money, how that can turn back through Galileo itself and return to shareholders. Europe itself is developing its own response to the Inflation Reduction Act. They do it a slightly different way there, which is a lot slower through sort of direct allocation through auctions and tariff regimes. That will all be a tailwind for that business, and it feels really well set now after quite a difficult time building that team at, initially through COVID. We feel positive about that. You know, add to that Gurīn, add to that Mint, add to that Manawa. We think we're well-placed through the portfolio to address all the kind of future or next generation renewable energy technologies that will come along. I've mentioned hydrogen before. We are looking at offshore wind through a couple of those platforms as well, early stage development. That's gonna be a major theme in Europe, but elsewhere as well. And storage is a huge theme that you'll hear about from Paul as well. Those, I think, are the big ones that we think about in terms of future or near term, I should say, reinvestment, investment opportunities at attractive returns. Turning to healthcare, I think this is the things that we're doing for the future. I mean, we could spend actually all our time and all our capital and make a lot of good returns for everybody in this room by just doing digital and renewables. But we always know we need to develop the next theme for Infratil as areas de-risk or change, and that's definitely what we're doing in healthcare, with our diagnostic imaging businesses in particular. We feel really great about the position we've got. We're at scale in A&Z in a way just about no one else is. Very high-quality businesses. In New Zealand, we're the only one with a national offering because of the quick work the team did straight after our initial investment in PRG. Qscan itself has always been and still is the PET- CT leader in Australia, which is so important for high value diagnostic imaging work. We like where we are. 2022, as you'll hear, has been a challenging operating environment. One of the things the team is doing is bringing forward IT and other kind of productivity investments. It's actually quite a good time to be doing that, if volumes are down. And other initiatives, that should mean we can actually take advantage of the scale that we have, which is impressive and hard for people to replicate. You'll hear a bit more about that from the team as well. As I said, we're remaining selective on additions. There was a transaction of a business in Sydney that I think was at multiples above our entry into Qscan, which just demonstrates, I think, the valuations have held up there. We don't need more scale at those valuations. We'll continue to look for the right partners and for those businesses at the right time. As I say, teleradiology, the initial work we've done there is actually really attractive still. Some of the IT stuff we're doing this year, which we would do anyway, will set us up to address that in the future as well. We continue to look at, I should play adjacent bingo, actually. I use that word quite a lot. Things that can grow out of our DI platforms, and actually Rachel is gonna talk to that. Retirement, I mentioned RetireAustralia. You know, the operating performance is still actually really good. Post strategic review, we're sort of nearly complete on setting the new plan for them and shifting to execution mode. We look forward to telling you more about that later this year. Right, Phil? Wellington Airport, I don't know if the team is still here. Yep. Down the back there. Haven't chat to them. They're performing incredibly well as well, well beyond where their budget was set at the start of the year. Obviously a really interesting pricing and CapEx environment with Auckland going through now and Wellington coming close behind later at the year. That feels like something we should be updating you more on later in the year as well as we learn where Auckland settles and what we want to do. The only reason these guys aren't up on the stage here today is more that we're still mid-flight and actually figuring out what to tell you about those businesses. They're doing really well. That's the outlook. I might just do this. Phil, you can stay there. Let me tidy up. Capital availability, this is traditional side. As anyone who watches us will know, we still have really good capital availability for our internal ideas and also anything externally we might want to do. That's obviously been topped up, I think, since half year, Matt, because of the Vodafone tower sales proceeds, right? As the main change, you'll be seeing on there. There's not too many maturities coming that would worry us as well. We have narrowed guidance now that we're, what? three days away from 31 March, right? We should know pretty closely what we're going to do if we're here at 520, 535. I think we've taken the top off. It was 540 last time. We're tracking to what I think is pretty good number given where we guided at the start of the year. You can have a look at that later and ask any questions, too. Happy about that. We're not giving FY 2024 guidance yet. I think we'll be doing that in at the full years, right? There's a bit there. Hopefully, that gets the juices flowing in your head for the setup for the sessions to come. I can take a few questions now, Flesher, do you think? It might be worth taking some of them at the end even once you've heard others. I think the headlines are, you know, infrastructure is still a really hot asset class in the environment we're in. There could be some opportunities emerging and deal processes just because of the volatility we're seeing. We feel like we're in a really strong position with, the mix of our portfolio and obviously the balance sheet. We could just spend all our time in renewables and digital if we wanted, but I don't think that's the right thing to do for you all here. We should be planting seeds for the future, and we are. The positions we've got give us quite privileged access, I think, to the things that are gonna be important in the future, some in the very near term, in digital and renewables. We are alert to what's going on, always when we're making a new investment, if we do, we'll be pretty disciplined, and we've turned down a bunch this year, which I think speaks to that. I'll finish there. Do we have time for questions or yeah? Yeah, if anyone's got any burning ones now. Yeah. Just a very technical one, I guess. Yes. True. Thank you. Thanks for sharing. I'll try. Yeah, I mean, you know, inflation is on 40-year high. You know, you mentioned it briefly Interest rates have gone from 1.5% in a straight line. It just feels that more should have changed in the thinking Mm. Than what we're hearing. I'm not saying it's a bad thing. No, no. I'm just curious, you know, has anything genuinely changed on your long-term thinking or medium-term thinking around attractive versus less attractive areas, ways to invest? I think a couple of things probably have. I think the areas of investment still feel really good. I think you've definitely seen us not bundle into auctions and buy things, right? I think auction prices are not reflecting those things, and we've been incredibly disciplined and patient on that, and we've prioritized capital to our internal opportunities, as a result. I often get asked, "Why don't you just send every dollar to Longroad and be done with it all?" Bit to Greg as well, obviously, mate. You know. That has definitely changed. I think when we look at cases now and we look at the use of acquisition debt, we're definitely nowhere near where we would have been two or three years ago, right? I think the cost of that debt and how long it stays that expensive is very uncertain, and probably means we're uncompetitive in these auctions as a result. I think those would probably be the main things in terms of our capital allocation, where I think it has changed. Yeah. Thank you. Yeah. Any other questions for now? Easy. Cool. I'll come back later. Now I'm looking for my next two speakers. Oh, they're out there. By short introduction, Rach and Mike. Some of you will know them, they're long-serving, Morrison & Co, employees and have had a big focus on healthcare and the wellbeing, which is obviously relative new sector for us. We've been doing a lot of work in years, before the investment. Both these guys are involved in the actual asset management business as well. They're gonna talk a little bit about sort of how we got to where we are and our thoughts about the sector, going forward. Welcome. [Foreign]. Good morning. My name is Michael Brook, and I'm involved, as Jason said, with our healthcare investments. I'm an executive director at Morrison & Co. I've been involved in our healthcare thinking, since as early as 2015, and led Infratil's investment partnerships into Pacific Radiology, Auckland Radiology Group, and Bay Radiology. I'm a director of what we call RHCNZ Medical Imaging. It is a bit of a mouthful, that one. That's just the parent entity for the three New Zealand radiology practices. I'm a former director of Qscan as well. I'm gonna briefly cover off some of the elements of our investment thesis, as well as an update on some of the sector tailwinds and then a few of the short-term headwinds that we're observing from an operating perspective, before handing over to my colleague, Rachel Drew. We've got Terry and Chris, who will speak from the specific assets as well. Let's see if I can get this to work. All right. Look, we covered the why in detail on our way into the investments in Qscan and the New Zealand radiology practices. We're still fairly early on the journey, but it's worth revisiting. I'm gonna borrow some language from two people who are a lot smarter and more articulate than I am. The first is our former chief executive, Marko Bogoievski. He's a strong advocate for private capital investment in healthcare. We talk about investing in ideas that matter. He called healthcare the ultimate idea that matters. That comment has really stuck with me and is really brought into sharp relief if you or anyone you know has ever had a healthcare crisis. The second person I want to paraphrase is Paul Newfield, the Chief Executive of Morrison & Co. He explains investing ideas and that matter really well. This is something you're gonna hear a lot of from the Morrison & Co. team in particular. We start with considering what are the really big challenges society needs to solve and then finding businesses that are particularly well-positioned to meet or help solve that problem. We try to keep reinvesting in those businesses. You also hear the term platform because you reinvest and you grow it over the next few decades. That thinking really underpins the entire Infratil portfolio. Healthcare clearly ticks the idea that matters box. As an infrastructure investor, I would then overlay certain characteristics that need to be present to be a good fit for our client capital. We like radiology, we like oncology, in particular because they tend to exhibit some of these defensive or infra-like characteristics. We can then continue to deploy capital into these platforms through new machines, building out greenfield clinics, expanding existing clinics, and then selective acquisitions. Jason mentioned, you know, we have looked at a lot of things over the past year. I would say it's probably been my busiest year, but we didn't actually execute on much. It's just the way it goes sometimes. It's quite intimidating with the clock there counting me down. I feel like I'm going to explode. Look, of the items listed here, I think the one to elaborate on a little bit is the barriers to entry. Now, one of the key barriers in the diagnostic imaging platform is the breadth of clinical expertise we have in the platform. Radiologists, they're a scarce resource. Then if you think about this in the context of increasing digitization, the scale of our platform means we can invest in the best technology. We can provide state-of-the-art equipment, create the best learning and development opportunities, create leadership opportunities for our doctors, also make it easier for our doctors to do what they do best, and that's practice medicine. All right. Is there any more? Look, I don't know about you, every day I read the paper. I read Herald Online, I'm seeing articles about our healthcare system. I'm seeing articles about healthcare system in Australia as well. The words crisis, broken, on the verge of collapse are often used. What we can observe is this isn't a New Zealand only phenomenon. We're seeing similar dynamics play out across the developed world, in the key markets where we're looking to deploy capital. What we know from being involved in these healthcare businesses is that healthcare is a highly complex ecosystem with myriad interconnecting elements. The issues the healthcare system are facing are equally complex, there's not a simple fix. There's workforce challenges, there's technology challenges, a lack of innovation, layers of bureaucracy, competing interests everywhere. What does this mean for private market investors? It's helpful to come back to the macro trends. Put simply, we can observe that people are still getting older, people are still getting sicker, the proportion of the population who are older and sicker is increasing. Governments are increasing their relative spend on healthcare, the number of clinicians simply isn't keeping pace. It isn't on the page here, this is actually something that Prime Minister Chris Hipkins covered off last night. The number of GPs, this is like your primary interface with the healthcare system or your initial contact point. Per 100,000 people, there was 81 GPs in 2001, it's projected to fall from 74 as at last year to 70 in 2031. It's really clear we're gonna need to do a lot more with a lot less, and the private sector must play a key role in delivery. To be honest, it already is. Within radiology alone, we're seeing a consistent trend of outsourcing of work as public systems struggle to cope with increasing demand for diagnostic tests. Jason touched on this earlier as well. Teleradiology, the read-only component, is gonna play a key role there as well. It isn't all plain sailing, so there's several short-term factors that are causing some disruption. Whilst it's easy to blame COVID and say it's the root of all problems, the evidence is pretty clear that it's had a profound effect on healthcare systems. It manifests in more ways than simply just impacting top line volume growth, which is actually coming back to more normal levels, you can see that on the chart. What we're also experiencing is factors like increased cancellation rates, often at the last minute, that creates gaps in activity lists. We're experiencing frontline staff shortages. In the past, if someone had a sniffle, they would turn up and keep doing their job, soldier on with Codral. You know, now they stay home. It's clear having systems in place that are adaptable and flexible is going to be a critical success factor. The biggest element of a healthcare services business cost base is people. Wage inflation is currently exceeding scan pricing indexation, and that's putting some pressure on margins. Lastly, I wanna just touch on briefly, and it's quite specific to New Zealand. We are observing an evolving competitive landscape. Some of the large Australian operators, I-MED, Integral Diagnostics, they've entered the market, they're buying practices, partnering with doctors, and we are seeing competition from practices involving specialists and surgeon ownership. Given these headwinds, we come back to that barrier to entry I discussed earlier. We are absolutely laser-focused on providing the best possible services to patients, on behalf of funders and referrers, as well as providing the best value proposition for our doctors and other clinicians. Thank you. I'll leave it there and hand over to Rachel. I believe Mike's left me just enough time to explode on stage. As referenced both by Jason and Mike this morning, yeah, healthcare has been a sector that Infratil's been actively looking at for, you know, at least a decade. I was working on stuff back in 2015 as well, and even earlier than that in the healthcare space. It wasn't until 2020 that we made our first investment into sort of what I call mainstream healthcare. Obviously, we were in RetireAustralia prior to that. That was through the investment into Qscan, a diagnostic imaging business. You know, why diagnostic imaging? Why that as a starting point? I think one of the things about diagnostic imaging, you know, alongside all the infrastructure-like characteristics that Mike talked to, is really understanding how integral it is to the healthcare system. You know, diagnostic imaging or radiology is both part of the preventative part of the system through screening programs, but it's integral to so many diagnoses across different disease types, but also across all medical specialties. We touch on here an example in oncology, where, you know, not only is it used in the diagnosis, but imaging is also a point of contact throughout a patient's journey, throughout their cancer journey. Today we have Qscan, we have Pacific Radiology Group, Auckland Radiology Group, and Bay Radiology. The latter three that come under that RHCNZ, et cetera, label. You know, that group consists of more than 140 clinics and delivering all modalities right through to the very high-end modalities of imaging. It's at 275 doctors, so we have deep sub-specialization expertise across the group to call on. What for us is really important about our partners, our partners with the doctors and also about our radiology businesses, is really that local leadership. For us, healthcare is a local business. It needs to be delivered locally, it needs to be owned locally, and we need our local leaders, our managing radiologists, and our regional managers to be identifying growth opportunities within their local regions. Those opportunities can be organic growth in the, in the clinics today, like expansion of existing clinics with different ways of delivering services and also, you know, some opportunities for a new clinic growth as well. We do continue to look at potential strategic acquisition opportunities and at strategic partnerships. You know, but as Jason indicated, very much where they make sense and at the right value point. Teleradiology, I think has already been mentioned multiple times, but it's really a core focus for us. When we look internationally, we see that as a real key opportunity for the group through, you know, some of our key markets like the U.K. And the U.S. I mean, the other thing having two strong businesses across the Tasman really does for us as well, is gives us a lot of opportunity to explore and identify best practice and use that across the group. Also, you know, real opportunities to exploit joint investment across the group as well. The other thing the platform does is, you know, back as, like what Jason was saying as well, is really gives us the opportunity to leverage off that platform. Where are those future opportunities that we'll be able to use our really strong operational expertise to leverage further from. You know, the operational experience Infratil has in radiology is of increasing interest to overseas players. We are having conversations in the U.K. and the U.S., which are markets under, you know, immense strain in healthcare, but also markets that are evolving in their delivery of service as well. Our operational expertise here across both the clinical and the radiology read side is of, you know, great interest internationally. We've talked about technology. We've talked about the role of technology, particularly in teleradiology. I won't actually go further on that, really actually what I wanted to highlight was that technology for healthcare is not just about the ability to read, you know, do remote reads. I think, you know, some of the real focus areas for us are workflow management, how we reduce wasted time, how we deliver better quality images and information to our radiologists, so they can be highly productive and effective. It's about automation of processes. We reduce the complexity in the clinical environment. Also, as Chris Hipkins last night mentioned, it's about the use of AI and that, you know, how we use AI to support radiologists in making diagnoses. These are all areas that we are piloting today and have plans to roll out through the future. Finally, you know, today, we've invested NZD 700 million approximately across the sector, giving us an extremely strong platform from which to leverage from. As we've said several times, teleradiology is one of those, you know, particularly attractive opportunities for future expansion. As I just mentioned on the technology side, it's our investment in IT that we're making today that will enable those opportunities. You know, looking forward, we see opportunities both within our existing platform to further our investment through radiology, but also in one of the reasons that I referenced that like, integration of DI into the broader healthcare environment is that platform that we have in DI also offers opportunities throughout other medical specialties as well. Oncology, pathology, you know, these are areas that we have been actively tracking, looking at for some time now, and hopefully will provide opportunity in the future. That's it for me, and I'll hand over to Chris Munday, who will talk you through more detail on Qscan. Thank you. Thank you very much, Rachel, Michael. Thank you, everyone. It's great to be actually here in person rather than on Teams, which I've done for the last few years. This is much nicer and great to be in Auckland. I'm gonna share a little story as a segue into my presentation. My morning started this morning with an email, it was about 6:00 A.M. this morning, and it caught my eye, so I read it. It was about an investment opportunity that Qscan has in Brisbane, and it involves some acquisition of some equipment. One of the pieces of equipment is a CT scanner. A big, white, donut-shaped machine that you lie in, and it takes pictures of your, well, any part of your body. I was particularly interested in the fact that this machine is cardiac capable. Cardiac capable CT. Means you can take really high-resolution photos of your heart. Why is that something of interest to me? Lots of reasons. I'm in the age demographic of a 50+-year-old male who is, you know, at risk of heart disease, the leading cause of death in men over the age of 50. Heart disease is not sexist. Females equally likely. That's something I'm very conscious of. In addition, as some of the board know, I'll only touch on this briefly, but I lost a great mate three weeks ago to a fatal heart attack at age 55. Just dropped dead, just like that. This is the guy's best man at my wedding and a very good friend. Had he had a cardiac CT, he would not be dead. Simple fact. Okay? Let's just put the cards on the table. Diagnostic imaging saves lives. Full stop. It just does. All right? If you have a photo of your heart done, and it shows you've got heart disease, they can do something about it. The second thing that happened this morning was, as I was literally finishing that email, is that Mrs. Munday sent me a text. It was 3:30 am in the morning in Brisbane, so in order to stay married, I decided I should respond to that text. The text said, "The pump is playing up." Angry face emoji. I knew what that meant, and it was going through my mind. That meant that the pump that some muppet plumber decided years ago to put under the main bedroom of the Queenslander house I live in was playing up. There was a blockage in the pipes, and the pump was cycling through, trying to push water through to our plumbing system, 'cause rainwater. I had a moment of brilliant wit for the morning, and I decided I would send back a text that said, "Maybe you should organize a cardiac CT." I knew this was poking the bear, but that's what keeps marriages alive and happy. The response came back. Well, actually, you know, when you see texts coming back, and it takes a long time, and you're kinda wondering what draft they're up to. It was like that. Eventually it came back. Very funny. The point of that very brief story introduction is that diagnostic imaging does save lives, and it doesn't cost a lot to save your life. The plumber will come out, and he'll tell me what I just told you, 'cause I diagnosed the problem already, even though I'm not a plumber. Then he's gonna charge me several hundred dollars to come out there and several hundred dollars to fix it, and I'll have a working pump. The single most important pump in this room, and every one of you have got one, is that pump. For less than the price of what that plumber's gonna charge me, you can go and get a scan and find out that your pump is perfectly healthy. There's the message for the day. Go get your pump checked. Okay? All right. Qscan. Now you're all thinking about diagnostic imaging. That's us. It's been an exciting journey. I laughed as I read that this morning. I thought, "Yes, there you go. I had my first cardiac CT at 2018 and the next one at 2022." M&A is another reason why you should have your heart checked. There you go, Paul. Have a think about that one. It's been a great journey. We've built a big company now, and it's fantastic to have Morrisons and Infratil involved. We are the market leaders in PET-CT. We have invested significantly in those high-end modalities, okay? MRI, CT, and PET- CT are where the growth opportunities are, because technology is so good that we can do things like take those great photos of your heart, or have these incredible images of your body and detect where the cancer is. That's the future of radiology. 150 doctors. I like most of them, but because there's probably no one here in the room, I don't like all of them. Radiologists can be a bit difficult. Generally, they're a good bunch, and we have over 1,000 staff, and we've grown nationally now with a great footprint. I'm very proud of that regional footprint that we have at Qscan. We're investing significantly in regional Australia, not just the metropolitan areas. Our vision is to be number one. Number one doesn't mean I necessarily want us to be the largest radiology group. That's not my personal goal. I absolutely want us to be the best at everything we do, and number one in each market in terms of the quality and the, to be the leading, you know, diagnostic imaging company. If we are able to do that, we're making a big difference in people's lives. I wanna be the employer of choice, not just for radiologists. I wanna be an employer of choice for clinical staff, clerical staff, for everybody. Innovation and medical research are really important to me and Qscan. Innovation through technology. To be frank, we are a technology company, okay. Everything we do is about technology and using the best technology to save your life. Medical research, which is something we haven't done as much in the last, certainly sort of four or five years ago. We've invested significantly in that space recently. It's a great opportunity for the brand. It's a great opportunity to encourage doctors to join us. Research and clinical trials, I think we're doing 120 clinical trials right now. Terry might talk a bit about more of that. They're actually in New Zealand, well ahead of us. They've been doing it longer. One of the great opportunities for the two organizations is we get to leverage off each other's experience, and which we're leveraging off RHC's experience in that space. That's a snapshot of the industry drivers. They remain there. We've had a couple of challenging years out of COVID. I'll talk a bit about that in a second. Simple fact is the population is growing. The median age of the population is growing. I mirror the first bullet point. The general health of individuals tends to deteriorate with age. Regrettably, at age 53, I've discovered that. Suddenly the dodgy knee and the dodgy this and the dodgy that seem to be happening. None of that is going away. The key industry drivers are there in diagnostic imaging. Federal funding remains. This year I'm hoping we'll get a little bit more in the indexation than we have previously because of inflation. We've budgeted a bit higher than previous years. Visits to a general practitioner, we anticipate to increase. We've had a difficult couple of years in this space, it's been a little bit hard to work out why referrals have dropped off. I think there's a number of cumulative reasons why we've had the challenges of FY 2021 and 2022. FY 2021 in particular, of course, GPs were somewhat busy vaccinating Australians and New Zealanders. That was one reason. In addition, we've seen quite an uplift in telehealth, and telehealth, I think, has resulted in a little bit of a drop in diagnostic imaging referrals immediately, because if the person doesn't walk into the GP's office and look at the GP, the GP may not immediately think, "Well, actually, let's have a quick look at that knee," or, "Let's have a quick discussion." In addition, mental health has been a growing challenge in society. More and more GPs are having consultations with telehealth. They tend to therefore be longer consultations. I think that's also slowed down some of our referrals. We are seeing a change in that, and even in the first three months of this year in particular, we're seeing quite an uplift. Finally, I, and I notice this personally, when I walk past the GP practice downstairs in Brisbane, GP practices haven't exactly been a welcoming place the last couple of years. You have the seats of shame out the front, and then there's signs everywhere saying, "Wear a mask," and everything else. You know, there'd be a younger demographic in this room who wouldn't think too twice about that. But the 70, 80, 90-year-olds think long and hard about whether they're gonna go and visit the GP when it looks a bit like it's some sort of concentration camp. I noticed the other day when I was walking downstairs past our GP, it's under the GP practice near our work, that it's significantly more palatable place to visit. Suddenly all those seats of shame have gone. Masks aren't around. We're seeing people going back to the GP. Graphs, I don't normally like to show graphs that have a downward trend unless it's my cholesterol level. In this instance, I guess it's an important one to show you what's been happening in the industry. I'm delighted to say that we've been outperforming the industry, so the purple line outperforms the gray. You can see that middle phase there, very much where GPs, who of course are one of the biggest referrers for us, GPs then refer to specialists, and they're the other big referrer to us. That downward trend in 20 21 and into 2022 has certainly impacted diagnostic imaging. That's started to flatten out, I think for some of the reasons I've just said. People are going back to the GP. We're starting to see that, and you can see that uplift is happening for us and the industry at the end there. I can tell you that the March year, month to date figures for us are the best we've had in a very, very long time. In fact, I noticed in WA, we're well above budget in the WA practice for the month of March. Oh, sorry, I didn't have those little pop-ups. Beg your pardon. I think I probably covered them. COVID, we've talked about. Oh, floods, yes. Well, it's no fun when Mother Nature also takes a shot at you. This time last year, of course, Northern New South Wales was heavily impacted by the floods, and we also had one of our major clinics in the Windsor Clinic in Brisbane, which is the original first ever Qscan clinic, and we had 1.5 meters of water go through that clinic. That doesn't help your EBITDA line when you lose a clinic. We've had a few challenges. Fortunately, that clinic has just reopened and is performing back above what it performed at prior to the flood. That's a great. Critically, surrounding clinics that referrers would have referred to and therefore cannibalized. We were worried that we'd lose there, but in fact, we're retaining most of those referrers. We're getting good growth in that region in Brisbane. COVID has restricted and delayed some of our greenfield sites. Again, we have scope to continue to grow those in the future. Good year-on-year improvement, particularly March. The financial highlights. Look, we'll look to do around just under NZD 300 million as a revenue line for this year. Then EBITDA will be sort of normalized, and it's around NZD 50. I want to talk about the EBITDA margin. It's been a real challenge. We have got a reasonable fixed cost base. If a sonographer is doing 12 scans a day, and the ultrasound scans a day because we've had that volume drop, the fact is to do 18 scans, I don't need to spend any more money. It's the same wage. As volume comes back, we get a lift in margin. The other one that lifts margin materially is the doctors. We deliberately invested in young doctors over the last four or five years. One, because we need to have the future cohort of subspecialist radiologists. In addition, we had pretty aggressive greenfield site growth. The challenge with that is that radiologists have a life cycle, if I can call it that. Junior radiologists are less productive and efficient as senior radiologists, we have a greater cohort of those. As they mature, as they become more experienced, they become more productive, and we benefit from that. That's one of the reasons why we're a bit more bullish about that margin getting back up to where it should be, over 20%. The next phase, that's our strategic pillars. I'm not gonna put all of them in there. There's a couple that I'll call out. Our vision and our values are very much linked to those strategic imperatives. I wanted to call out the managing radiologists' leadership structure. We've really got a mentality of locally led, centrally supported. That I'm passionate about in terms of success of how you run a radiologist business. You can't run it all from a support office or a head office. That's what it should be a support office. It should support the regions, which means you've got to have really good regional managers and then a regional managing radiologist and local leadership. That's the structure that we're building in Qscan. I think it's similar to what RHC have got. It does require an investment in leadership. We've got fantastic radiologists. That doesn't necessarily mean that they are brilliant at all aspects of leadership. We are continuing to invest in that area as we are with our regional managers. The teleradiology strategy, I mean, it's super exciting. It's been talked about already a little bit. A big investment in IT this year is all about bringing those businesses that you saw on slide one, all those different acquisitions, and integrating those as seamlessly as possible. And with disparate systems across them as we've acquired businesses, the technology that we're putting in place now, the big investment, is to ensure that the teleradiology across those businesses is seamless. If Paul is sitting in Perth and wants to access a scan in Sydney or quite frankly, in Auckland, in due course, he is able to seamlessly. And we are able to effectively, as the support office, operate as what I would call a flight traffic controller. I can push the work no matter where it's done to the right radiologist, because Paul might be a musculoskeletal expert, and maybe Mark is a cardiac expert. I can push those scans from anywhere in Australia to the right doctor in the right place. If Paul's doing a fellowship in something, I can grab scans that suit his fellowship and send them to him. It's a really exciting development. Significant investment, it is transformational. That is our intelligent radiologist workflow orchestrator that's called Clario. For your interest, if you think about, you know, the radiologist work list, which is a bit like an email list, most of us in this room feel like the email list, it never ends. That's what a radiologist work list looks like. This enables me to create an end. I could just give Paul 60 scans for the day, so he can see he's gonna get to the end. In addition, the technology that we're getting into these systems is clever and is able to see that a scan was just done of a motor vehicle accident, and it's an MRI brain. That's something I want Paul to report on right now. It'll bring that to the top automatically. It takes away the wrist X-ray that Chris' wrist X-ray, and it pushes that to the bottom. That's not gonna kill Chris. This MRI brain is really important. Automatically sends it to the top. A new Dr. Rem model. This really is led off the back of the IT. Okay. As you've bought these different businesses together, and those incredible systems I've just talked about, I've got to have a contracting and Rem model that works for the radiologist, so that if Paul, who previously didn't report from Perth, anything done in Sydney, and now he can, he needs to know he's being remunerated for that work, and that I've got a contract that facilitates that. There's a really exciting, Dr. Rem and contract model that we're working on at the moment. We're really just building on the success we've had with some of the fixed and variable Rem models that we've been using around the group. A lot of lessons in five years since the original Quadrant investment, in this space. It's really just taking it to the next phase. And particularly highlighting or improving the productivity and the efficiency that we get from some of those incredible IT systems that we're implementing. Where to in terms of future pillars of growth. Brownfield expansion is something I'm pretty keen on. I've got a lot of space in clinics. We often have clinics that are adjacent to shopping centers or have, you know, opportunities for space that comes up. I already have doctors on site. I already have staff on site. Actually adding a bit more space or using existing space and adding a modality is a better way for me to operate the business than if I add more greenfield sites, I've got to go and find the staff, and critically, I've got to find the doctors. Brownfield is actually something we're a little bit more focused on. We will continue to do Greenfield, but it's just strategically, and again, making sure we've got the doctors to be able to service that. The IT transformation, I think I've talked about. M&A, absolutely, we'll continue to look at opportunities that are accretive, but restricting that to top quality groups. We've walked away from some opportunities that others haven't. Although I noticed that Integral eventually walked away from something that I didn't wanna pursue. We want sub-specialty experts. We want quality. I want businesses that support my Q1 agenda. Lastly, left-hand side is not fun, and the right-hand side is fun. Left-hand side is one and a half meters of water going through your clinic. This time last year, twenty-eighth of February. The right-hand side is the rebuild. Just reopened. That is the most sophisticated MRI machine in the Southern Hemisphere, on the right-hand side. Windsor is now a center of excellence. That's something else I'm passionate about, is building centers of excellence in each capital city in Australia. I've already got one in Perth by the acquisition of the best radiology group in WA, which is Envision, and this is very much a center of excellence in Brisbane. That's very exciting. That's the MRI machine with the Philips Ambience package there, so that the patients get to see anything from Finding Nemo to anything else that might calm them as they have their scan. Lastly, a couple more photos to finish off some of the MRI scans. Middle one at the bottom, the staff wisely crane in the $2.5 million Machine at 2:30 A.M., when the CEO is fast asleep and doesn't know about it, 'cause otherwise that photo would terrify me, I suspect, as I watched that being lowered in. We're investing significantly in these high-end modalities. That's where the growth opportunities are. That's great for margin as well, and it's exciting. That's it for me. Thanks, everyone. We might, do a couple of questions maybe. Sure. We ask Terry to join us, 'cause there might be things specific to your business, and at the end, there might be something around sort of the Australasian environment. If there are a couple of quick questions now, we'll get Chris to take them. Yeah. I was just wondering if you could just give us a bit more information around the kind of changes to the Dr. Rem model. Yeah. Kinda, and the reasons why you're looking at changing it? Yeah, good question. Look, the main reason why we're doing it is because of that technology that enables us to have a doctor literally anywhere report a scan, and I want that done, okay. I want the subspecialist cardiac expert in Brisbane being able to report the cardiac scan that's done in Perth. Through the acquisition phase, we haven't got the identical Rem models or systems in place in each location. By having ultimately a single Rem model, it'll provide far greater clarity for the doctors and encourage them to report across the different, the different regions. At the moment, we do that, but it's a bit clunky. It's about fixing that clunkiness that we've got in the system, 'cause that is the future of how we're gonna operate the business. In addition, we've got in at least a couple of the areas, all of our areas have a fixed and variable Rem models. That's great, and we'll maintain that. That's really important to us. It works well. It means if we have a reduction in volume, like a pandemic, the doctor cost comes down with it. That's been a great advantage of Qscan that we've had over some of our competitors. We're retaining that, but there are within those different regions, different ways they operate the variable component. One of the ones in Brisbane, which has been most successful, is an RBU model, which drives productivity. We're looking at introducing that into some of the other regions. Working hand-in-hand with the radiologists on that is making great progress and it's an exciting transformation. Just a follow-up, are you seeing examples of like young radiologists setting up their own flags, you know, getting funding from Philips or Siemens? You know, is that more profitable to do that versus doing your model? No. Particularly not for young ones, because they need the referrer base, and they don't have that. No, what we're seeing young radiologists come into the larger corporates looking for the subspecialty expertise mentoring. Again, the systems that I'm talking about and the significant investment in IT is designed to further facilitate that. Quite literally, you know, I can have a doctor in Perth who wants access to a fellowship, and they can do that now with accessing subspecialty experts in all the other capital cities, rather than being isolated in one spot where they won't get access to enough scans to be able to fast-track their career. No, we're not seeing that in Australia. To the opposite, I'd say we're seeing more approaches to the larger groups who can provide that training and that mentorship, and I can't understate the mentorship. That's really, really important in radiology. We will continue to make sure we keep our radiologists working longer. Even if they reduce days at the latter stages of their career, for me, it's about keeping those people staying on longer to help coach junior radiologists. Could you just comment on what any major differences under ownership under Infratil Morrison & Co. versus Quadrant in the past? Of course. Yes. Where's the chairman? Well, it's an easy one to answer, 'cause I really enjoy working with him. I mean, Michael and Rachel, I've had a lot to do with. So, what are the differences? Well, I guess the answer to that is that Quadrant were a, from day one, very clear that they wanted to be involved for a three-four year, they said three-five-year window, which I took to be three years and one day. And that was crystal clear, the way they operated the whole way. One of the things I liked day one about Infratil, and we heard it today, was Infratil invests in ideas that matter. It was really interesting. I hadn't heard Michael, and I hadn't spoken to Michael before today about what he was gonna speak about, but he made the call-out that health matters, and I've said that in my talk, that health is the most important thing to everyone in this room. That would never have come out of the mouths of Quadrant. Okay? Never would they have used those words. To hear that they're long-term investors, they believe in health, that is something that's super exciting for CEO and that's continued through the process. Thank you, sir. Time to get off? All right. Yeah. Move forward. I'll invite Terry on to stage. I'll say to talk about the New Zealand business, 'cause a bit unfair the hard time you've been given about the acronym. There's good reason why there's several brands, isn't there, Terry? There is. Welcome to the stage. Thank you. [Foreign]. Good morning, everyone. Terry McLaughlin, Chief Executive of RHCNZ Medical Imaging Group. Who the hell is RHCNZ Medical Imaging Group, I hear you ask? Really, it's the three market-facing brands that a lot of you will be familiar with if you live in New Zealand: Auckland Radiology Group, Bay Radiology Group, and Pacific Radiology Group. Pacific was the first, cab off the rank to join the Infratil stable about 21 months ago. I was CEO of Pacific at the time. You know, one of our key drivers in seeking a new majority owner was our ability to become a full-scale national practice. As Jason indicated, and correctly so, Jason, RHCNZ Group, went on to acquire Auckland Radiology Group and Bay Radiology Group. You can see on the map there you know, a fantastic national footprint. Looking a little bit closer in terms of population demographics, there are probably three parts of the country where we don't have coverage. One would be North Auckland, Whangārei, and otherwise on the east and west coast of the North Island. I'll cover off later plans that we have to plug those slots. You know, I think we took a pretty strategic view of what was gonna happen with the health reforms in this country and wanted to position ourselves to be a national provider to work alongside Te Whatu Ora, and I think you can all see how that's playing out now. Yeah, national portfolio, 70+ clinics, reasonably evenly spread across North and South Island. Importantly, located with virtually all the private hospitals in the country. You know, excellent brand association with Southern Cross Healthcare, Evolution Healthcare by way of, you know, the Wakefield Hospital in Wellington, St. George's Hospital in Christchurch, Mercy Sisters in Dunedin. A long association with those private hospitals. 144 radiologists nationwide. That's one in three radiologists in New Zealand in both public and private sectors. The Scale presents us with an enormous opportunity to continue to grow and succeed. Some 1,300 staff nationwide. We do have a 24 by 7 teleradiology service. We've had that for a number of years. That's the outsourced reading of images from Te Whatu Ora. We had a London office for quite some time, and it got difficult to sustain and maintain during COVID. We moved to a contractor model and complementary time zones in South Africa, U.S. and Europe, but we're moving back to open up our London office again. We've got someone up there now, and that gives a specialist working in, you know, at 12:00 A.M. at night in Timaru the ability to pick up the phone and have a familiar voice. It's a real point of difference, we believe, in terms of our teleradiology offering. It will continue to grow. Financial performance. Look, Jason spoke about the headwinds. COVID has been a really confusing one for us in terms of the impact on volumes. Volumes normally grow. We enjoy volumes growth around 7% year on year. That's kind of a global phenomenon for diagnostic imaging. We enjoy that in RHCNZ group in New Zealand. It's flatlined a bit in the last 18 months because our health system has been gridlocked. You know, if you think about yourself, your families or friends who have tried to get to see their GP, as you know, the first point of contact, it's challenging. It's difficult. Prime Minister last night, you know, extolled the virtues of virtual consultation. You would think that a virtual consultation might lend itself to sending you off to get a scan. It's actually been the opposite, seemingly. We are seeing signs of the system recovering. You know, our general practitioners were hammered during COVID. They bore the brunt of it. They were tired and exhausted. You know, that seems to be getting better. There are a range of, there's a range of evidence that's corroborating a recovery back to the long-term growth trends. We can go back 15 years and see what the growth is. We're confident that that will return, our assumptions are that that will be the case. Volumes are reflected in the revenue side of it. The confluence of those headwinds turns into a bit of a cyclone actually. I think what-- The fact that we're able to maintain and in fact continue to grow, our revenues and our EBITDA, reasonably maintain margin is a reflection of the underlying strength of the business. Like Qscan, we have a commitment to operating in all parts of the country. We're not just cherry pickers that operate and some high-tech stuff in metropolitan New Zealand. We've had a long-term commitment to being an integral part of the health system in New Zealand. I'll give you three examples of that. This week I was down in Timaru looking at our new branch, which is co-located with Bidwill Private Hospital. Probably 10 years ago, we had a joint venture with the local hospital. They wanted to get MRI in place. They didn't have one down in South Canterbury. We worked collaboratively with them. We both got to the stage where our private volumes, their public volumes, meant another MRI machine was possible in the town. That's a fantastic facility. It's a, you know, beautiful tailor-made building. Our staff love working there, our patients love coming there. I guess as an example, again, if you think about what the Prime Minister was talking about last night, the frustration of getting things done, we're good at getting things done. We can have these clinics up and running from word to go in probably two years. Another example would be in Christchurch, a bunch of sports physicians getting together in a practice. You know, we identified the need and the opportunity to work with them. We've co-located downstairs from those sports physicians. A totally arm's length arrangement. We enjoy, you know, their presence, they enjoy being able to send patients down and just having an X-ray and ultrasound kind of straight away. We continue to plug the gaps. There's Chrises and Modality types. In Palmerston North, we opened a branch 10 years ago. It didn't have CT, that's gone. That would be a kind of a, you know, an illustration of how we continue to grow and expand. Our future planning capability and all these projects are in play now, and I think this is a really important example of the stuff that we are doing in helping the New Zealand population. If you take Whangarei, by the middle of this year, there will be a new branch operating there. We know there's demand for an alternate provider. We know there's demand for PET-CT. If you're a cancer patient in Northland now, and Northland has a high proportion of Māori, a high incidence of cancer amongst that community, 600 patients have to travel a very long distance from Whangarei to Auckland to have their PET-CT scan, that will be done now in Whangarei. We're working closely with that local community to introduce that facility. We keep a close eye on population demographics, North Hamilton is an example of that. Those of you familiar with the New Zealand environment, very fast-growing part of New Zealand, an opportunity to put a full-service branch in there. We'd like to at least, you know, match population growth and sometimes, you know, get slightly ahead of the curve. Whanganui, again, we work very closely with the local DHB there and helping that radiologist and that radiology department. They've got to a point where they need a second MRI. Actually, they were delighted that they said we're opening a clinic there because that saves them having to do it. It saves them having to go through the hassle of getting approvals, even under our new system. You know, it just takes a long time. That branch will be up and running in a year's time. Dunedin Central is gonna be a flagship branch. I guess for those of you, again, in New Zealand seeing the news, all the debate happening around, you know, what's gonna be the size and scale of the hospital. Are they gonna have three MRIs? Are they gonna have PET-CT? I suspect by the time we've had this clinic built in two years, that debate will still be going on. The population of Dunedin, of Otago, Southland will enjoy having PET-CT provided locally. Again, an example, those patients have to travel to Christchurch from Invercargill or Dunedin. These investments have a major impact on people's lives and people's health. Tauranga is gonna be another flagship branch. PET/CT, you're picking up as a bit of a theme for us, there is a major difference in terms of cancer outcomes for people in New Zealand compared to Australia. The funding regime in Australia is a lot more generous. The range of cancer tumor types funded in Australia is far more significant than New Zealand. Nonetheless, we believe that getting ahead of the curve in this modality is a good investment for us to make, because we know that whatever government will be under inordinate pressure to kind of level up those health outcomes between Australia and New Zealand. We think this is gonna be a really good thing. Auckland is gonna have a new flagship branch. Napier, I mentioned earlier, okay, it's a gap in our geographic footprint. We'll have that branch up and running either the end of this year or early in the new year. That just leaves Taranaki, and there'll be a range of options for us there. A complete, full national footprint that is really, well, we believe the jewel in the crown. We do this off the back of long-run industry drivers. I won't spend a lot of time going through this slide because I think Mike and Rachel Drew have covered that off well. New Zealand, like Australia, like the rest of the world, same trends, aging population, increasing incidence of chronic illness, increasing demand and social demand for diagnostic imaging is the best way of detection and prevention of disease. I've mentioned the oncology piece. The post-COVID context is an interesting one, right? I think the confluence of that and the creation of Te Whatu Ora creates a really significant opportunity for us, and I'll talk about that in a later slide. Our competitive advantage, I've alluded to. Scale enables us to invest, enables us to attract and retain the radiologists' expertise. Our breadth and depth of subspecialties is totally unmatched by anyone in New Zealand. Talent attracts talent. We've got a very strong focus on getting doctors right from med school to come into radiology, to come into the RHCNZ group, and really now a laser-like focus on securing that pipeline. We know we've got the best people in the industry. Investment in technology, fundamentally key. As Chris said, we are a technology company in the whole sector, really. We have a strong investment in research. Our stakeholder relationships are absolutely precious to us. Our strategic pillars. Be the key part of the health system, New Zealand, first choice for patients and referrers, a great place to work and grow, and be a leader in innovation and technology. A key partner in the health system, we had a meeting recently with the four new regional directors of Te Whatu Ora, like a very mature, sensible conversation, game changing from what we would have had 20 times over with the district health boards. They are seeking a true partnership. It's like, what does that mean? They want assurances around access for patients. They want assurance around or more guarantees around longer-term pricing arrangements. That's fantastic for us. We don't have to maintain 20 contracts, one contract, same quality of service. A longer-term contract, giving us a bit more assurance to invest wisely. Other things they are seeking are a partnership in recruiting and retaining staff. We're good at doing that. Actually, our staff turnover is very low. We don't have critical staff shortages. We are good at what we do. We believe we can share some of that with the system. We're very good at technology. We believe we can share some of that with the system. If Te Whatu Ora wanna recruit a radiologist in, say, a hard-to-recruit area of New Zealand, provincial New Zealand, somewhere, we can partner with them because they can have an opportunity to work in private practice. These are the things they're looking for. We're presenting our capability statement to Te Whatu Ora in the next couple of weeks, and I think that dialogue will continue in a very healthy way. That relationship with Te Whatu Ora, I think, also will influence the wider health sector. They're very keen for ACC to be a bit more part of that picture rather than perhaps, you know, out on the side here. Whilst we're all perhaps, you know, skeptical about these health reforms, I think you can see some glimmers of hope in terms of how it's going to manifest itself. In summary, and people have spoken about this, common characteristics, you know, great diversified funding streams. We've got excellent market share, 4 x as large as the next provider. We are their employer of choice, we've got fantastic future growth opportunities. I can see I'm right down to zero. Mark, happy to take questions. Happy to take questions. As a starter for Jen, can you tell me perhaps what you think the largest competitive threats are, whether that comes from public or private sector, and how you're positioned against those competitive threats? Yes. It's interesting. In New Zealand a couple of years ago, all of the private practices were largely in doctor ownership in some form. Pacific Radiology was the first large cat off the rank and that precipitated everyone else selling. I guess, you know, a slightly rhetorical thought in my mind is, was New Zealand actually ready for that? You know, it's created a lot of interest in how is it that a bunch of these people working in a dark room can create an asset of such major terminal value. That's, you know, a lot of people thinking, "Well, maybe I can get into this as well." It's, you know, for those of you in New Zealand, you would have seen, you know, a lot of debate last year, around the ethical issues of referrers going into this game. We have strong views on that. To be really clear, we are fully supportive of competition. Competition is a great thing. We have some ethical issues that others aren't accepting. You know, that referrer-owned magnet piece is occupying our minds. We're not sitting still on that. As Mike said, the key barrier to entry is where do you get the radiologist? Yes, you can go and lease a building, yes, you can go to Siemens and deck out the thing. How do you get the radiologist to read the images? How do you get the technical staff to run the machines? How do you get the quality systems in place? How do you get the technology to drive all that? This was a question for Chris earlier, right? Why don't young guys go out and set up practices on their own? It's actually very hard, and you need scale to invest in all of these areas. Nonetheless, a real threat. We're looking at what we do in those kinds of commercial relationships. We believe there's plenty of opportunity. We'd much rather partner with people who want to grow the pie rather than having a slice of our pie. We think that there's good opportunities to do that. There are a whole range of other specialists who wanna work collaboratively with us. I'm not at all complacent about, you know, your question. It's a really good one. Technology would be the obvious one. You know, artificial intelligence, we see as being our friend by far. We're rolling out a really good AI product this year. Chest X-ray, the most common form of diagnostic imaging. If it's successful, it will deliver the results that has been delivered elsewhere, which is a material uplift in quality and a material reduction, a material increase in speed. It was interesting, we had a radiologist conference here in Auckland a couple of weeks ago, and we were talking about this, and one of the rads said, "Well, look, one of the intangible benefits of this will be a reduction in my anxiety as a doctor that I'm gonna get it wrong, right?" If you take that away, we believe the benefits will be significant. We're gonna take a really robust, disciplined approach to investments in AI. There's enormous range of products out there, a lot of them not commercially viable, but we're at the bottom of that J-curve, we believe. We've got to get our doctors comfortable with using it, used to it. You know, globally, we will have to embrace AI simply because there aren't enough doctors to go around. That will be in kind of the lower tech areas. I've seen it in other professions. I've come from, you know, accountancy and law, and you think, "Well, how?" You know, are these the big disruptive threats? Actually, your business changes and adopts, then you move up the complexity curve in terms of the offerings you have and have AI to deliver the commodity stuff. You know, that's how we're seeing that as well. Great. Thanks. Last question from me. Going back to the REM model. Yeah Here in New Zealand, do you have the same fixed and variable kind of idea? Can you give us some kind of metrics? I spent the last week and a half going around the country and talking to our 140 radiologists. We've been working for the last year on a new REM model. We are moving to introduce a performance-based pay system on top of their REM. You know, like Chris said, that, you know, that is a key supporter of the technology that's being rolled out. It's a wonderful opportunity to reward people that perform better. You know, if you look at the distribution curve in our doctor group, it's wide, right? You know, like some very fast high performers. The next group that are, you know, well above the average line. A large group, slightly below the average line, and some ones that are slower. Our objective is to raise that average line a little bit, and that will have a tremendous impact on the business. You know, our modeling would indicate probably at least 10%-50% gain, productivity gain. Everyone gains there, right? The doctors get paid more. It costs us less because we need less doctor resource as we grow. You know, going back to the long-term growth trends of 7% volume growth year-on-year, you have to become more efficient. How's that been received? Look, I think they'll believe it when they see it, right? A high degree of skepticism. These are exceptionally smart people. I can see a range of them already thinking, "How do I game that system?" We've got a whole range of safeguards in there. Look, I think it'll go well. I think it'll actually go really well. Yeah. We've got time for one quick question. Sorry, just quickly. Given the backdrop of doctor shortages per capita, you mentioned you have one in three radiologists in New Zealand in the group. The kind of shortage of radiologists, is that more being felt in the public sector, given they can't pay as much as the private sector? Is it kind of being felt across the board, with you as well? So- With your group, sorry. Yeah. The supply of radiologists in New Zealand is not too bad. You know, your question is right, it's who gets them. Yeah. Right. You know, in terms of, in terms of what's in the pipeline, it's probably enough against the growth. It's how they're deployed. Our doctors are incredibly productive, because we've got supportive systems. We measure what they do, and they get rewarded for that. That's not necessarily the same in other systems, right? You know, maybe that's a factor on why supply is not quite enough. Is that Te Whatu Ora partnership gonna hopefully alleviate some of the pressures in the system more generally? Well- In terms of shortages of radiologists? [Uncertain]. Look, already most of our doctors work in both public and private. You know, we are an integral part of the system. I think that we just get things done faster, right? If you come to us, you get a scan within a week. Obviously, we just can't absorb overnight everything coming out of public. Stepping back, the key thing I forgot to mention in this partnership discussion is they wanna take a sensible approach to capacity in both public and private. You know, that was so reassuring to me that finally we're getting some sensible conversation starting to happen around how you can work with private. A lot of opportunity. Thanks. Okay. We might. Thank you very much, Terry. I know it feels a bit rushed. It's the nature of our, having multiple, investments within the portfolio. Thank you for your time. Pleasure. We're gonna take a 15-minute break just for a toilet stop, and then we're gonna be back to listen to the renewables section, which is pretty exciting. Thank you again, and we'll see you soon. Okay. Now we go global, which is very exciting. You've obviously heard the intro about where we feel we're positioned within the renewables sector and the opportunities we've got. You've got a number of people who are about to talk to us, who will give you, I think, a lot of confidence in this area. The first person I'm gonna introduce, I can see him down here, he's gonna come up behind me, is Vimal Vallabh, who's the global head of energy for Morrison & Co. Vimal was responsible for the introduction to the Longroad team six years ago, seven years ago, and then based himself in the U.S. for some time. As that business has matured, he's moved on to help establish the Galileo business in U.K. and Europe, as well as obviously, you know, coordinating what we're doing in a global sense, et cetera. I'm gonna get Vimal to open, and then, we're gonna have Dion, who many of you know from the Tilt days, and we're thrilled to have him and Clayton back in-house now. He'll get to talk a little bit about the markets here in New Zealand and Australia and Mint Renewables, which is obviously the newest vehicle to the family of renewables. With that, Vimal, welcome. Hi. Thanks, Mark. Hi, everyone. Sorry I can't be there in person for the Infratil Investor Day. I'm pleased to be here virtually with you and to talk to you about some of the activities that we're doing in the renewables space around the world as part of the Infratil global renewables businesses. Maybe just, if we can turn to slide one, and I can walk you through some of the highlights that we're seeing around the world. It's certainly been an active year. We're seeing increasing commitments from governments and increasing calls from society to do something about climate change. I was in Berlin this week meeting in the Infrastructure Investors Forum. There is a lot of chatter about more investment and increased enthusiasm about putting more renewables in the ground. That translates to government commitments and is driven by government commitments in some respects. Not just the countries that we normally hear from, but other countries and other continents, all increasing their targets to transition through to renewable energies. That is driven by a lot of different things, energy security being one of them, and that's being re-highlighted by the invasion of Ukraine. Also, an opportunity by a number of nations to redefine their re-industrial and re-industrialize their economies. A lot of that is driving reshoring of manufacturing facilities that will give greater energy security across Europe and across North America and Asia. That's quite exciting in the space. We are seeing unprecedented levels of investment going into the sector, primarily in wind and solar, but there are emerging technologies. A lot of money going into tech and trying to solve some of the issues that renewables creates on the systems. That's being driven by a lot of governments. Governments recognizing the challenges that the industry creates, but also trying to solve them simultaneously. We at Infratil are really quite well-positioned to take advantage of these opportunities. There are. The government says they come in with new policies and new ideas. They come in at different speeds. What we cannot do, as much as we look into our crystal balls, is figure out exactly when they're going to happen. What we've done in Infratil is build a series of options globally and allow us to take advantage of those markets when they become mature, to make investments and grow our business. That's partly by partnering, bringing our own expertise into these portfolios, but also partnering with our local teams. With Paul and Michael and Charles, who you'll hear from later on, we've backed one of the best teams in the market in North America, delivering gigawatts of power. We've got Galileo here in Europe doing the same thing. We've Gurīn in Asia, and you'll hear from Deion about Mint and how we've established that in Australia to address the Australian markets given our exit from Tilt. Those platforms together, we've got 3 GW GW of operating or under construction. We've got 30 GW of optionality in the pipelines within those businesses. Not all will be built, but they give us options in those markets. When those markets become mature and allow us to deploy that capital, it allows us to take advantage and optimize the returns that we have with the capital that we have to put to work in that space. Maybe I'll flip to this next slide. You would have seen versions of the slides, various markets, various places. We've presented versions of this story before. I guess the key message on slide 4four is that the growth in the market continues to grow, continues to expand. Every year, we're seeing more commitments from governments, those are just adding to the transition that we're seeing. Wind and solar remain the key technologies. They now maintain a quite a significant cost advantage on the other technologies. Sorry, slide four if you can. Just go back one. Wind and solar maintain cost advantages, I think those cost advantages are going to increase over time. Although we have seen with inflation the increase in costs of deploying that technology, we're also simultaneously seeing a reduction in the capital going into new gas supplies, particularly in Europe, less so in the U.S. That's going to then create a knock-on effect into the supply and the cost of fuel sources for gas technology and increase, ultimately increase the cost for gas to come onto the system. That then again gives renewables a cost advantage in the market and increase the demand for new capacity to come onto the system. Maybe I'll flip to the next slide. If we look at the four major markets or four major regions that we're in. I haven't included Asia on that one, but as we're still in development there, but the U.S. and Europe have all come out with very supportive policies. In Europe, they've committed NZD 400 billion to expanding out the renewables here in the market, including the development of new technologies, hydrogen, which I'll talk about in a moment. In the U.S., one of the major developments over the last 12 months has been the introduction of the IRA to accelerate new technologies and support the expansion of wind and solar, hydrogen, nuclear, and as I talked about industrialization, re-industrialization of the economies, including onshoring of manufacturing facilities. Maybe we'll flip to the next slide. What we're also seeing as I mentioned earlier, some of the problems that renewables does create as they enter the systems and governments are looking to address those. One of the most talked about technologies is hydrogen. Still in its infancy. Still overcoming some technical challenges, but likely to be vast in its applications. That's also then gonna create demand for more renewables. We're quite excited about that as emerging technology. Not too dissimilar to where we saw wind and solar in the early days, but probably under a more accelerated timeframe, given the problems that it needs to solve and the amount of money and technology going into the space. Let me flip to slide seven, if I can. Some of the highlights that we've seen across the portfolio. Longroad raised NZD 500 million, and we've valued that business at NZD 2 billion as a result of that transaction. Further strengthened its procurement strategy with local suppliers, and we have about 2 GW of construction in four ight states over the next couple of years. You'll hear more from Paul later on what's in more detail. In Galileo, we continue to expand our presence in various markets. We're across eight markets now, withGW two more to come over the next couple of years. We've increased our pipeline by a further 6 GW under development. We are looking at a few realizations this year in that portfolio. Very much following in the footsteps of not the journey that we saw in Longroad a few years back. We've established Gurīn last year, and it's done fantastically over the last period. It is a new market, and an emerging market. We see Asia following the same footsteps as North America and Europe in its policy maturity. Within Gurīn, we participated in the 4 GW tender program that the Singapore government's laid out, and we are starting our first construction project in that platform. Manawa, following the sale of its retail business, now the largest generator in New Zealand, still maintain a diverse asset base. Now with New Zealand's announcement of a 100% renewables ambition, we expect the development pipeline to grow over the next couple of years. You'll hear more from Deion on Manawa and Mint. Mint is our latest platform. We're excited to reenter the Australian market with that business, and you'll see a couple of familiar faces with Deion and Clayton on that business. That's quite an exciting development for the Infratil portfolio. Maybe I'll get Deion, if he's around, to have a few words about and introduce the Mint business. I'm not sure if anyone can see us, but thanks for more. They might be able to see us. You know, haven't seen them for a while. Look. Hello, everyone. Yeah, I'll start with Manawa. I'm probably not the best to talk about Manawa here, but you have a chief executive, you have the chairman somewhere in the... and they can talk more about it later. Manawa pretty much positions itself as the largest independent generator in New Zealand, right? It's got a unique opportunity ahead of itself and it's gearing up to make sure it delivers on that. It's quite an exciting positioning it's made and its platform, which you'll hear more from them later, personal today, but in due course about how that platform of opportunity is growing for them. I'm certainly happy to be on the board of Manawa. It feels a little bit like coming home, you know. Started there in 2001, I suppose. Anyway, it's an exciting business to be in and got a quite an energized team. They realize what they're there for now. There's no complication, and they've got a real sort of motivation to get on with it. Mint, though, is what I'm here to talk about more. You go, "Well, why did you do that?" Go back to Australia. The theme that Vimal talked about is we have to be ready to respond to markets internationally when the opportunities come up. If you look around markets around the world and you don't include Australia and that opportunity's there, you're making a mistake. The issue for them is huge. Transitioning away from their coal and how to do that with just bulk renewables development is a real problem. Finally, Australia has got federal support we've been wishing for for about 15 years. And it's got state government support for renewables, the transition in general. Of course, because of all that delay and the confusion and you know, huffery puffery from politicians over the last couple of decades, the rest of this electricity system is not ready for it. There's a bit of an emphasis or an oomph behind getting renewables in, but there's a delay. We've got time to reenter that market and catch up with the greenfield platform development before the transmission system can let us go ahead and deploy it, right. It's an opportunity that we've seen. We know the market really well. We've been there probably far too long, and we think we can do it differently. We know what might be holding some parts of the market up. We are through sort of the wider Inco relationship, associated with some of the transmission improvements that are or are not coming up. We've got some insights. What are we doing? First thing we've done is we've captured seven of the best people in the markets that we might have known in another platform we were involved with once over there. And they've come and joined us, really excited to try and do the journey again. We are greenfielding. We're looking at joint development opportunities across mainly the eastern states and a little bit in WA. Importantly, we're looking at what parts of the technology space is holding up Australia. Some people say it's just Australians, but it's not, it's not that simple, right? It's actually the construction resource. Lucky here, there's no one to build this stuff. How do we, how do we enlarge the construction resource or at least capture some of it so it's kinda ours to use? Grid connection. You gotta watch what's happening in Australia grid connection and think about how that's gonna come in other parts of the world like New Zealand. How do we get grid connection in-house? Is it worth it? What can we do with it? For example, if we take on the grid connection stuff ourselves, can we get different turbine suppliers into the market? When we say, "You just tell us what you can do with your gear, and we'll take care of the technical stuff." No one's done that yet because it's been so complicated. AEMO's changing in Aussie, and that sort of approach to the world might work if you're a bit brave and if you know what you're doing, which Clayton and I believe we do and can. We're looking in that area. Funny enough, governments do drive these things. Vimal's talked about all the support that's coming internationally. Australia is no different. They drive and stop. That's their job as politicians. There's federal and state government support for offshore wind in Australia, which without that support just simply wouldn't be looked at. Maybe there's a little opportunity for us to have a look at offshore in Australia faster than we thought we might have. We're sitting there as open-minded, nimble, little team with really, really good experience and an approach that people know, people have seen it work. We have had inbound interest from perhaps some of the large gentailers over there that have been otherwise occupied for a few years trying to do other things like sell themselves. It's a really exciting time. For Mint, I'm really excited to be the chair of that vehicle, and just get to sort of do what Bruce Harker used to do, just annoy the management team. I do it well. I think that's enough from Mint. Yeah. Thank you. I think we're open for questions. Vimal, if you can still hear us? Yeah, still here. Let's go for a couple of questions anyway. Just behind you. Yeah. I'm just really curious to hear your overall view on sort of the cost curve. You know, you've had a 30-year cost curve going down for wind and solar and, you know, we don't really know a lot of moving parts, but it looks like it's a reasonably significant kink in the curve. Do you think we're gonna go back to seeing, you know, wind and solar prices coming down? Are we flattening out? Is this a new normal? Can the equipment providers scale up for all of this demand that you're talking to? Thank you. I think the answer is yes. I think the manufacturers are starting to scale up. We're seeing a 3 GW plant being built in southern Italy to help supply solar panels to the European market. I think you're gonna see more content, local content requirements, prop up. This is going back to the reindustrialization that I talked about earlier of these economies. Yeah, significant investment is going back into expanding manufacturing capability. On the cost, I'm not sure you're gonna see a faster fall in pricing. I think you're gonna be seeing far more efficient equipment being put in for the same price. There is. You have to remember that all the components that go into the equipment all have alternative uses, right? The steel, the glass, the silicon, the labor, the land, they all have alternative uses. The capital, which is one of the biggest cost drivers of new capacity. Even we saw with solar over the last 20 years, it used to make up 80% of the total CapEx cost. If you saw a 20% reduction in the cost of a solar panel, it was quite a material component of the total CapEx of a new plant. That's now shrunk to about 30%. Thereabouts of the total CapEx cost. A 20% reduction in the price of the panel has a smaller effect on the total CapEx price. The rest of the components or components, as I mentioned, have alternative uses. I think that, you will continue to see some price reduction as the capacity, manufacturing capacity globally increases. I think we are gonna see a temporary uptick in pricing as the manufacturing's facilities are onshored inside of markets because of their concerns about energy security. I don't know if Paul is in the audience and Deion, if you have views that are different. I'm thinking I'm not mic'd up anymore, but yeah, pretty much I agree. What we're seeing at the turbine, wind turbine manufacturers anyway is probably, I believe, a consolidation for a few years on the current onshore platform size because they're reaching scales where they become difficult to build, and they can consolidate their kinda supply chains and everything a bit more, which they do. Maybe 10 years ago at about 3 MW platform size, and then they went again. I think we're in that zone. The good thing about the Infratil group with its global reach is that we are a significant customer for these suppliers, right? When you come up and say, "Please, can you come and join us somewhere?" They're likely to say yes faster than they would, say, a Mint Renewables standing there on its own as a little player trying to say, "Look at us. You know, we've got 100 MW down in Australia." They just wouldn't bother, right? I think the advantage is at the moment, can you get supply, not can you get it cheaply. That's, that's kinda where we're sitting at the moment. Sorry, just as more players are entering wind and solar development and investment, and some of them have lower return hurdles than potentially Infratil does, how do you think about investing in those assets versus firming assets? Obviously, renewables can be synchronized as well, wind and solar, and can affect pricing, so interested in your views. Well, it's very much to the heart of our strategy. When we set out on the journey, we set out to create optionality across various markets. The markets aren't homogenous, they're heterogeneous. In some markets, you know, you can still command quite good development premiums. You get, still get long-term contracts with attractive returns that do meet the Infratil hurdles. And other markets, that will change. Some markets are more competitive than others. Some are still emerging. Policies change. Regulations change, which alter the competitive dynamic. And by having our regional platforms, we're able to look quite locally at where those options are and exploit them, and optimize and meet our capital requirements, hurdle requirements. We're not in all the markets all the time, but we are creating a group of companies that allows us to find where the pockets of value are and meet our return hurdles. You'll see some of that coming out in Europe at the moment. I mean, Longroad went through that journey in the first few years, and it's got to quite a steady state. Galileo's about to hit that steady state over the next 18 months. With the first sales coming on this year. Oh, Vimal, just another question on Galileo, but I'm just wondering if you could give us a couple of sort of concrete examples of how you're actually expanding that pipeline, like how those development opportunities are coming to you. Yeah. You know, the financing of these projects is obviously critical. You know, is there any implication from the tightness in the credit markets now or what's as we look forward? Sure. Maybe I'll answer the first question. We are across eight different markets in Europe, all with each country having its quite significant targets, and those targets have been increasing. That's giving us some opportunities. We are expanding into two further markets this year. We expand the, I guess, the opportunity base. We have created a number of joint ventures and joint development agreements with folks in these markets because, again, renewables is a very local game, but you try and achieve scale at a regional level and optionality at a global level. Those joint development partners and joint venture partners, they have a great experience working with the Galileo team. Then they continue to feed more into the business. There is quite a lot of operational leverage in these businesses once you've actually established them. You know, the, the marginal cost of an additional megawatt into the pipeline is relatively low if you can find the right partners and opportunities. Sorry, I forget what the second question was. Sure. Well, just on the first question, Yeah. Just so I get it right. In all these situations, you're partnering with people who have already have the option on the land and for solar or whatever it might be. You Yeah, it's a combination of. Yeah. No, it's a combination of. Some of it you do in-house and some of it you partner. There are some markets that are quite tough to crack, and again, I'm gonna use Europe as an example, if you're not local. France, for example, the landowners very much like to talk to French people, so you need to have a partner in France to be able to access that market, and France is quite a, you know, quite a big market. Germany, somewhat similar. And those opportunities are actually increasing. I talked about the deregulation that's happening in these markets to increase new capacity to come on. In Germany, for example, the federal government has turned around and said, "Every state now has to allocate 2% of land to renewables." It wasn't the case before, you had some states doing more, and you had some states doing less. As that state in Germany has opened up, local people are finding opportunity sets, and those opportunity sets are coming to us because we have a local presence. We have two, three people on the ground in Germany. We've got a few people on the ground in France, and they're working with these partners and/or doing their own development in those markets. To grow that pipeline. Once you've got that central capability that it's kind of a hub-and-spoke model, it works quite well. You'll see this pipeline that we're sitting at now, ramp up quite fast over the next two years. Great. Look, just finally, it was just the credit markets with the tightening there and what it might mean. Oh, yeah. for financing a project. It's interesting actually. Again, at this conference, there's quite a few banks. There is no letup in the commitment to lend into the sector. In fact, it seems to be a priority in the banks relative to others. The cost is going up slightly, certainly what I'm seeing here in Europe. Yeah, certainly no lack of appetite. In fact, more allocation to it. In some places, some banks have actually given a, I guess, a discount to the cost of funding because it is a renewables project as opposed to any other type of project. Again, I mean, some of this, some of this, some of what we're seeing is, you know, still raw. I mean, Credit Suisse was only in the weekend, right? Some of it's probably still gonna filter through into the markets. Right. I mean, we could keep going 'cause it is still a fascinating area and a lot to talk about. I think when we hear from the Longroad team, I think you'll hear very real examples of what's happening in obviously one of the largest growth markets that we're exposed to. Thank you, Deion. Vimal. I should have said Vimal's based in Zurich, so it's an evening for him. You can see from the fascinating Morrison & Co background he's got there, and he probably has a better view from that from his window than that. Thanks, Vimal. No problems. Thanks, everyone. Right, the main event or one of the main events. I described it poorly. He's pointing at not long enough. Are we on the express train or do we have more time? We poorly described. We had Paul Gaynor down to speak, but of course, the senior partners are all here, actually, with the exception of Pete. You're gonna hear from all three of them, not just Mr. Gaynor. Thanks, Mark. Thank you. It's great to be here. My name is Paul Gaynor. I am joined by partner number one, Charles Spiliotis, partner number two, Michael Alvarez. The fourth musketeer couldn't make it, Pete Keel. He's got some school break this week. Anyway, it's great to be here. Mark, I just... We do have the full time? Yeah. Okay, good. It's great to be here, talk a little bit about what we've been up to the last 12 months. I think the last time I spoke to you all, I was in my office in Dover, Massachusetts, looking into some nondescript camera. It's great to see you all in person. For those of you who don't know much about our business, we are a U.S. We're based in the U.S. We're focused only on the U.S. We are a developer, owner, asset manager. We have about 160 people. We're doing primarily solar and wind. You'll see that we also have a very big emerging storage piece of our business. We are, If you remember last year, one of the things we talked about was making this quote-unquote, "strategic shift" towards ownership or more ownership. In order to do that, we needed some capital. We went out to the market last year, as Jason talked about earlier, and we're thrilled to bring on board MEAG, along with retaining the great partnership that we've had since day one with Infratil and New Zealand Super. It's a great team. We're all getting along and we're happy to have MEAG on the train. In terms of what we've done so far, we think about our business as. We've done about 4.3 GW total. We've developed some, we've acquired some, and we've also sold some. Right now, we sit at 2.4 GW of products that we own. We also have a third-party business that manages about 1.6 GW of wind and solar assets. One of the things that we're proud of for the last 12 months, particularly the market context. The market context is we thought we were getting this big Build Back Better program first thing last year. Didn't happen until August, and there's still some clarity that remains that we need. We had a big inflation index. Interest rates were up 300, 400 basis points. In the context of that macro environment, we're really proud of what we did in 2022. Seven projects that we financed, $3 billion of total capital. That includes the primary capital that we raised, and 1.3 GW of new project closing. It was a big year for us. One of the other things, Charles is gonna talk about this, is we made a minority investment in a DG developer called Valta. Something strategically that we're trying to get access to. We realized we weren't the right entity to do it ourselves, we did it through another entity. The other thing there is the first storage supply contract we signed. Now, that might seem like a, wow, what's the big deal signing a battery storage contract? Believe me, the battery market, and Mike will talk more about this, is tough. There's not a lot of depth. There's not a lot of expertise. There's not a lot of big AAA credit-rated suppliers. Trying to navigate that, and again, in the context of this inflation environment was really, really hard. We've now not only signed the first one, but we just recently, earlier this year, signed the second one. We simplified our portfolio a little bit by selling off early days of Longroad. We bought a distributed generation portfolio out of a bankruptcy of a previous company, 400 projects, about 300 MW. It was a great financial result for us, but from a simplification of our business model, our ability to now not have to deal with that is really kind of frees up our go-forward plan. We've had a good pipeline growth. Again, really tough year, macro context, really good results in terms of what we did in 2022. When you think about what is our kind of guiding principle now, we've made the strategic shift. We've done this first round of capital raising. Where are we going? The way that we're describing our business to our investors and to our co-workers and employees is we're trying to grow our OpCo to NZD 500 million of EBITDA. How are we gonna do that? We've got a combination of projects, capital, and execution. I'm gonna talk about the projects. Michael's gonna talk about execution. How do you actually do that year after year after year? Charles is also gonna talk about the capital sourcing and some growth. The one thing I'll say is that the fundamentals in the U.S. have never been better. When you think about the demand, and you've got these charts up here, you think about these are out to 2030. And the + 63 GW, the + 38, and the + 20 is all what has the Inflation Reduction Act done to the market, to the market demand. That's our job, is to kind of find with this great set of market, these market dynamics, our job is to find the best projects in the market, to find the capital, and to find the equipment that all makes sense and makes economic sense for us and our shareholders. That's where the magic is made at Longroad. It's been talked about by Jason, by Vimal, the Inflation Reduction Act of 2022. I've been in the renewable business for about 20 years. I'm an antique. This is a game-changing set of legislation. Never seen anything like it from the perspective of the duration, right? We're getting kinda 10 years of clarity. We've never had that since I've been in the business since 2000. Never had it in 20 years. And we're also what I'll call the scale or kind of the punch that it has, right? There's $370 billion of capital that is available from the government from a incentive point of view, ITC, PTC, and some other goodies, which I'll talk about. If you look at the addition, if you think about what the IRA has done in terms of adding to the total demand in the next eight years, you can see it's, you know, added basically, you know, 100 GW to the market, or we're just over 100 GW. It's been great. 65 GW a year. Think about that, like, when you're talking about we're trying to do... I'll talk about a little bit what we're trying to do per year. For the U.S. to hit this target by 2030, you've gotta do 65 GW a year. Right now, the market is doing about 25 to 30 in a good year. The market has to double in terms of the total capacity. We're trying to do one and a half. If you think about kind of what is our market share, what kind of penetration are we looking about? It's not. Look, one and a half gigawatts is a lot, but we're not trying to get 25% market share. There's a lot of players in it, in the U.S. The Inflation Reduction Act. Just to highlight some of the goodies in there. From a policy perspective, what the administration and the Congress was trying to do is incentivize domestic manufacturing. In order to do that, there are multipliers that you can get if you buy your panels from a U.S. manufacturer, if you buy your batteries from a U.S. manufacturer, et cetera. That is a very powerful tool, and what it's done since the Inflation Reduction Act has been passed is there's probably been 15 or 20 large announcements for new manufacturing across the U.S., batteries, panels, and other pieces of the supply chain. You can see what it does. It's an unlevered IRR boost of 4%, or we can sell the power cheaper. That's a pretty significant goodie for the renewable industry. The second one is called an energy community adder. This is for disenfranchised communities in the U.S. that have hosted, over the years, a coal mine, a power plant, a coal, or, you know, a coal plant, and they're trying to, again, from a policy point of view, they're trying to give back to the energy communities, mostly through jobs. That's another goodie. You can see what kind of impact that has. We've got a couple projects that are in energy communities. The final one is a solar PTC. Historically, the solar has only been the solar projects have only been able to use an ITC. Now that we can use this in PTC in certain parts of the U.S., that makes a tremendous amount of sense and gives us a little boost on the economics. In summary, game-changing legislation and the U.S. market right now is really hot. The one thing that I'll say is that the rules of the road, so to speak, from the Inflation Reduction Act are not out yet. We think we know what they're gonna look like, but until we see the details, which we expect soon, we just still need to see the details. Let's talk about the projects, then I'm gonna hand it over to Michael. The first thing is just where do we sit right now? We've got 2.4 GW, 30 projects. This map shows projects that are operating, projects that are in construction, and also the projects where we have third-party services. You can see a pretty good concentration in Maine, Texas, New Mexico, Arizona, California, and Utah is also a big piece of it. Our long-term vision is to get to, long term, three to four years, to get to $500 million of OpCo EBITDA. What our internal plans are is to do 1.5 GW per year. Right now, we're at 2.4 GW. If we do that for four more years, that gets us to 8.5 GW and about just over $500 million. The actual $500 million of EBITDA is kind of in between 2025 and 2026. That's kind of the long-term vision. And you can see that we have our 23 projects identified. The two projects there are called Serrano and Sun Streams. Both of those are in Arizona. Michael will talk a little bit more about those. Then we have a pool of projects in 2024, 2025, and 2026 to kind of pick and choose from. We've then, again, with the passage of what we thought was gonna be Build Back Better a few years ago, we started looking further downfield in our development portfolio. Different markets. We're also getting back into the wind development business. You can see in the last 12 months, we've grown our pipeline nearly 40%, and some great strides in kind of desert Southwest and in California. We've also got deals that are now out to 2027 and 2028. Right now, that's our total pipeline is 50 projects. Some of them go out to 2027 and beyond. You can see if we're trying to do 1.5 GW per year, that gives us we've got some cushion in our development pipeline. We're also constantly looking at acquisitions. Charles will talk a little bit about that as well. 2023-2025, you can see the projects are concentrated, a couple in Texas, one in Virginia. A big effort, a big push in Arizona, which has been a very big state for us, Utah and California. You'll see the red crosshatching is solar plus storage. We've done these two solar deals, storage deals so far. We have to buy every single project that we're doing there is gonna have a battery component to it. We're gonna be, like it or not, we're in the battery buying business. All right. Let me hand it over to Michael to talk about how we're actually gonna pull this off. Thanks, Paul. Hey, everybody. Michael Alvarez. I'm based in San Francisco for Longroad. I was a bit taken aback by Paul referring to himself as an antique, which makes me a bit of a fossil. I've known him for 25 years. We're gonna have a drink and talk about that. I'm gonna start off with some pictures here. I'm the COO of Longroad and responsible for, among other things, procurement. These guys like to tell me I'm the train runner. Keep the trains running. That's what I'm gonna talk about in terms of execution, principally. This picture is in Maine. You wouldn't think Maine was a really solar-centric place. We have a number of projects already operating there. Just to give you a visual of what we have to deal with taking down trees, it's very muddy in the spring. Those are timbers that we use to gain access to the site. This will be the largest solar project in Maine. This is a picture of our what we call Chocker Substation in Arizona. This is about an hour, 15 minutes west of Phoenix. This entire substation is ours. We do have one bay that is for another developer for a preexisting project. Everything else in this substation is ours. This is 1 GW. It connects to a 9-GW substation, which hosts, among other things, the largest nuclear plant in the U.S. called Palo Verde, 4.5 GW. What you see here is the bay being built out for Sun Streams 3. Sun Streams 2 is already operating. Four will be on the other catty-corner bay up there, and we're gonna start construction on that bay shortly. Another picture. This is Umbriel. You can see the first modules being installed here in Umbriel. One thing I wanted to mention is that these pictures are somewhat dramatic for those of you who have not seen a solar facility, but I understand we're trying to organize a visit to Arizona for those of you who can make it in September. If you can do that, I would encourage you to do it. There is nothing like seeing 700,000 pieces of glass in one place, and that's one project. It is an amazing site for you to understand the logistics of the execution of this type of project. Paul mentioned what we're trying to execute here. $3 billion worth of procurement, not for the faint of heart in a market like this, how do we go about doing that? Our essential thesis here is partnerships. EPCs, equipment suppliers, and relationships with banks, landowners, communities, and regulators, as well as obviously our customers. I only have 17 people currently working on execution of the construction program. I probably need another four or five to finish off Sunstream's four in Toronto. We do not build anything ourselves. We hire capable people to go do that. We have probably five construction contractors that assist us in this. They're tried and true partners. It's an interesting business over time. Construction companies need a lot of backlog in order to operate their businesses effectively. They have a lot of equipment, people. They like to be able to roll them on and off other projects. The way to accommodate that relationship is to give them serial work. There's always the challenge of, are they being competitive, or are they taking advantage of you? We have a contracting structure that we utilize, which is not lump sum turnkey. It is an alignment interest where we share risk around a target price, but they do guarantee a maximum exposure for us in the contracting structure, and it works quite well. It tends to drive down costs, and more importantly, results in us using very little, if any, contingency in any of our projects to date. How do we get around some of the regulatory aspects that have been affecting the U.S. industry? There is definitely a lot of friction with China currently in the U.S. It's been underway for quite some time. It's continuing on in other aspects of our economy. TikTok is under attack now, for example. There has been a focus on trying to restrict the access to Chinese-made equipment for a bunch of very good social reasons, slave labor among them, but also just the tendency that it feels as though the U.S. has given away its advantage in manufacturing to the Chinese. We had from a module perspective, which is really largely been the area where this whole industry has been impacted for the last two to three years. There were very significant tariffs imposed on equipment coming from China, and there's been an ancillary action dealing with trying to circumvent that, where stuff went offshore to Cambodia or wherever and was branded Cambodian, not Chinese. That didn't work out so well either. There's been a tremendous constraint on module supply in the United States, silicon modules to be specific. We've had a long-term relationship with a company, First Solar, which is a U.S. company, holds effectively a monopoly on thin-film solar technology in the U.S. and globally. We just acquired our sixth gigawatt, which will carry us through 2017, assuming we have a reasonably successful hit rate on our development pipeline. That is not subject to any tariffs, even though it comes from the U.S., Malaysia, and Vietnam. No tariff exposure. Battery side, Paul alluded to this, completely different story. The U.S. and I think globally, everybody relinquished the production of lithium batteries to China over the last several years. In November, actually, of the previous year, so that would be 2020, we signed a framework agreement with a company after we did an RFP called Powin, which is really an integrator, pretty much a startup, to be fair. What they do is they acquire cells, put them in a box, tie them all together, plug them in, presto change-o, you've got an operating battery. The problem is that the Chinese figured out that the EV demand globally, but in particularly the U.S. and for this utility scale storage, gave them opportunity to drive the price up. In January of last year, it increased substantially and forced a lot of renegotiation to make things happen. Focusing on partnerships, we disaggregated that relationship, went directly to a cell supplier. It's called Envision AESC. Envision is Chinese. AESC is a technology that was developed in Japan by Nissan for the Leaf, the Nissan Leaf EV. Envision bought it, established a U.S. presence, now is building factories in Kentucky and South Carolina to deliver 30 GWh rather, of batteries from Kentucky for Mercedes-Benz vehicles and 30-50 GWh in South Carolina for BMWs. We've talked to them about converting some of that capacity to utility scale format. They're going to do that. By 2025, expect we'll be buying U.S.-sourced cells from AESC for some of the work that's gonna come. A challenge, a huge challenge. Again, just a partnership to get through it. We do buy inverters, some inverters from China, but it's from a U.S.-based entity. There's some risk there, obviously. The cell thing is a risk for additional Chinese friction. We think we've got ourselves in a contracting position to avoid this in the near term, certainly. As manufacturing comes to the U.S., we'll be much safer. On the EPC side, I already talked about our contractors. There was a cost, I don't know who asked this about the, is this stuff getting cheaper? No, it's not getting cheaper. Part of the IRA, one of the features of it is that we're supposed to use, and our contractors are, the prevailing wage, whatever that means, in a particular region to execute these projects, or else you don't get the tax credits. That's an evolving situation because the labor markets are not currently structured to enable this volume of labor to come in at a prevailing wage. We've had experience in Maine, for instance, where the government thought it would be appropriate to have an electrician drive a pile. That's what the regulators are doing. There's an evolution going on here. Point is, labor costs are gonna go up. Prevailing wage is something that you can avoid by not using unions. It does not mean this is union work. In large measure it is, it just means you have to correspond to what folks in these categories make in the area in which you're building. That's gonna be an upward pressure. We've got a bunch of folks coming into the business trying to buy at the same time as we are. We've got a war in Ukraine with people trying to replace munitions and God knows what else out there. There's a huge demand on the commodity complex right now. What we're seeing is an increasing level, and we're starting to index our contracts to some of these commodities like steel, copper. There is some ability to pass that on to the, our ultimate customers. Upward pressure on the commodity complex as well. Now, going forward, we should be able to push a lot of this cost through to our customers through increased electricity rates, and that's we've been somewhat successful at doing that so far. It's not an insoluble problem. In general, I think we would expect in the U.S. the complex to be rising for some material period of time until all of the market settles down a bit. Whoever asked the question, our answer is, it's gonna be a bit higher. You're not gonna see a decline in cost. I would agree with Vimal's comment about increasing efficiency, however. A lot of this stuff is becoming more efficient. We're buying trackers with U.S.-based steel. We're trying to get domestic battery to get a 40% domestic content requirement. We're buying for solar modules. We should be relatively good shape for the foreseeable future. If you look forward, I'm talking about building $3 billion now, $10 billion from 2024-2026. That's a lot of procurement in a very short period of time, in a very volatile market. The way to do this is through partnerships. That's the way we execute. I'll turn it over to Charles to see how he's gonna get all the money that I can spend. Hi, everybody. I'm Charles Spiliotis, the Chief Investment Officer at Longroad Energy. Nice to see everybody in person. I'll talk a little bit, as Michael said, about raising the capital. We are in a very capital-intensive business. 1.5 GW per year is a lot. It's a lot of capital. We took a crack here at sort of what we think it may look like. It'll inevitably change, but our program here is about $8 billion between 2023 and 2026. We raised about $3 billion last year as Paul alluded to earlier, kind of across the capital structure. You know, the pieces are here sort of shown on the left-hand side of the screen. Project debt financing, the debt market is very deep. We generally don't have enough room for all the banks that would love to participate in sort of our standard project finance deals. You know, some of the bigger deals that we're doing generally have six to eight or more banks participating. For us, it's hard to manage all those banks, so we try to limit it, and sometimes banks are selling down. That's sort of part of the capital structure for us is, you know, we continue to see a lot of depth, a lot of new entrants. I think Vimal alluded to, you know, this space is a real growth area for a lot of these banks. It's a real profit center for a lot of banks relative to a lot of other industries. Not as much excitement about real estate, and other parts of the economy in the U.S. Ours is certainly an exciting part, on a lot of fronts, so that part is good. Tax equity financing, you know, over the whole time that I've been in this business has been sort of a complex, market to understand. I think the good news for Longroad, track record, is incredibly important, to the tax equity market. They generally have a limited amount of humans to do a certain amount of deals per year. They have a limited amount of tax capital that their treasury departments allow them to deploy. There's just not a lot of benefit, in bringing sort of smaller developers, smaller deals. That benefits somebody like us. We have sort of gone back, gone back to a lot of the same institutions again and again. Michael, I know, alluded to deep relationships. I mean, we certainly see the same thing on the financing side. You know, we're trying to do repeat business, with a lot of banks and investors over the years. KeyBank is one of our best banks. We recently cleared $4 billion of transactions with that bank alone, which is pretty amazing. On the tax equity side of the market, the trends that we've seen, you know, all the big banks, the Morgan Stanleys and U.S. Banks and JP Morgans of the world have been the big players. The next, the next sort of phase has been, bringing a lot of big corporates in the U.S., that wanna participate. The structures that tax equity requires in the U.S. are pretty complex. Partnerships and inverted leases and very sort of esoteric tax structuring, that's pretty hard if you're a big supermarket or a big electronics supplier or something like that to understand, to sort of justify spending the time on. That's been a big trend, is sort of syndicating, down to some of those corporates to allow them to participate in the market. That's been a pretty welcome change, because it does create more depth, which is something that is pretty valuable to us. I think the other big change on the IRA side with the tax equity market, the intent of the legislation is really to try to allow more participants into the market, those complex structures that I mentioned, and that is done through this concept called transferability, which really, you know, lots of different types of tax credits. It's a pretty simple construct, right? You wanna use a tax credit. I offer $0.90 or $0.95 on the dollar for that tax credit, and you can sell it to me, right? That has not been an option in the U.S. We are still waiting for this Treasury guidance to understand a lot of the details. I think our expectation is that will, if that market works, it'll benefit more of the smaller developers, smaller projects that don't have, the capability and sort of the economics aren't as exciting to do, you know, a 5-MW deal, tax equity deal. It's very complicated. There's a lot of lawyer fees and bank fees and all these things, and transferability would really create, a pretty efficient way for them to finance those deals. For a project like ours, a $500 million project, we expect that the current tax equity structures will likely remain, as the most economic, and viable option for us at this scale. You know, the other thing, I didn't mention, obviously $1 billion is sort of the equity requirement, the sponsor equity requirement that we need, in order to execute on this plan that we've laid out. It's a, it's a pretty big number. There's a lot of different ways for us to potentially finance that. Obviously, we could do it through corporate equity ability to. You know, we don't have a lot of debt on the corporate side of our business, so there's sort of OpCo debt capability. Obviously, we can sell down assets in part or in full, and we'll be, you know, as that OpCo grows, certainly more distributions for us to be able to reinvest. Next up, development. This is a little bit of how are we going to be able to execute on 1.5 GW a year over a long period of time. This is sort of the big strategic initiatives, strategic opportunities for us, that we're excited about. I think the first bullet on here, Paul alluded to it earlier. I think it was sort of 2021 where we sort of looked around and said, "You know, these interconnection queues across the country are getting so long, and we have this goal to try to do bigger volumes, own more, you know, how are we gonna be able to do this?" Really pushed our team to go deeper, and we really started to invest for projects that are very far out there. A lot of the queues in the U.S., tomorrow I have a piece of land, and I wanna get into an interconnection queue to be able to connect to the grid someday. A lot of the markets in the U.S., it can take seven or eight years to go from putting it into the queue and getting an interconnection agreement executed for a project. That's a long time. That's a long investment horizon. Obviously, the IRA, Paul talked about the duration. I mean, that's a big benefit. It's pretty hard to invest. Since I've been in this business since 2007, very hard to. We've never had probably more than three years at the most. Pretty hard to invest large dollars for a project that's eight years away, when we only have three years of certainty on an incentive regime. It's a big benefit for us. I mean, to give an example, you know, we're putting projects in the queue now in California, multi-gigawatt sort of opportunity, and I think we'll be very happy if those projects could achieve financial close before the end of the decade. I think that would be a, that would be a pretty good outcome. Certainly, that pipeline has grown a lot. It's also gotten sort of deeper, longer, duration. That's something that certainly has changed as we've approached, sort of this new strategic, these new strategic goals. Winds. Paul mentioned this as well. You know, over the last three or four years, sort of the wind versus solar versus wind versus solar and storage, sort of the economic proposition before the IRA was not very compelling in a lot of markets in the U.S. Certainly, there were some deals that folks have been working on for five, six years that were more mature, and tax credits were available that still were economic. In terms of starting today, investing in new projects that much more compelling from a dollar invested versus potential value to put those dollars into solar and battery storage. The IRA has really leveled that playing field. There's a lot of places in the U.S. where wind is a very attractive proposition. The economics are very attractive. The utility off takers have a strong desire for balance. That's certainly a big push. King Pine Wind is our biggest one. This is a project that we were actually working on before Longroad existed in a prior life, and it's going to come full circle. Just to give a sense, we're trying to go bigger, in a lot of places. King Pine Wind is about 200,000 acres, 1 GW wind project, which we were awarded by the state of Maine at the end of last year. A lot of risk, early stage, a lot of work to do, but 200,000 acres, just to give a sense of the size of these projects. I looked it up because I'm not great at the metric system. It's about 800 sq km. It's a pretty big project. Takes at least two hours to drive from one end of the site to the other. We're doing something similar in Arizona, not quite at that scale, but in terms of, you know, multi-gigawatt opportunities at the same site, much like we've done at Sun Streams, right? That Sun Streams has been an incredible success. Finding a really important area in the grid, really important area, where we can invest and kind of grow out multi-phases. I think that's sort of one keyway that we're able to achieve these growth objectives that are pretty large. I think standalone storage and hydrogen, you know, there's a lot of buzz. I'll talk about Valta in a minute. In terms of the Longroad side, we now have a pretty strong pipeline of standalone storage projects on our own. You know, many many companies in the U.S. are just focused on standalone storage. They're, they're building out sort of analytics and trading and doing merchant opportunities. You know, our approach has been a little more cautious. You know, we're focused on places like California, where utilities need storage badly for the system and are interested in doing long-term tolling arrangements. Some other parts of the country, Arizona, like, where we're doing the same thing, where it's a very similar regime. We're sort of doing the market analysis to see whether those sort of more merchant type of opportunities could be a fit as well. But it's, you know, it's a fast-developing market. Access to the equipment is very difficult in addition. That's something we're spending a lot of time on. The hydrogen side of the business, again, we're certainly in the infancy, but we are actively working on the renewable side of it, so building wind and solar to power hydrogen, right? There are some real opportunities already in construction, and they need lots of renewables to green up the hydrogen. That, I think, no doubt, will be part of our business over the next five-10 years. Whether we also wanna develop our own hydrogen, buy electrolyzers, and build a huge green hydrogen complex, I think that's TBD. Circle back next year, see if we've made any progress on that. These are sorta big-picture growth opportunities that the team is spending time on, excited about. The last one, again, how are we gonna get there? Arizona, we mentioned this. We've done three in a row, these three contracts in a row with Arizona Public Service. It doesn't seem possible to get to the volumes that we wanna get to without really deep relationships with utility, corporate counterparties. Arizona Public Service was the biggest utility in Arizona. These three projects, as we alluded to, you know, represent over $2 billion of investment within a relatively short period of time. The reason that they wanna do business with us is we've been able to execute, right? The U.S. is incredibly competitive. How do you differentiate yourself? You know, one big way is just actually to do what you're going to execute on what you said you would do, which a lot of companies in the U.S. are starting out and wanna prove themselves and commit to some things that they can't execute on. I think we're trying hard not to be that. I think so far that's been a pretty big competitive advantage of Longroad. I think I'm getting close to exploding. Is that 1 minute left I should be worried about? Yeah. Okay. Volta, you know, Jason alluded to this in his remarks, as did Paul. We spent a bunch of time evaluating should we do this in-house? We did, as you saw on the board earlier, the map. We've dabbled with some of these 5-MW projects at a time. I think we certainly found that our team is not that big, and we're cannibalizing our own utility scale business, and it doesn't make a ton of sense. However, this is a really big market opportunity in the U.S. The IRA, you know, we said that Jason said that we raised our capital sorta right before the IRA. We also made this investment before the IRA, which probably, which is probably beneficial to us. This is a company that has been around since 2009. They've never raised any outside capital, so they've been doing sort of one small deal at a time, recycling the money, go, go. They too saw this big market opportunity and were looking for a partner. We, you know, we really view it as they have a dominant position in Los Angeles market, which is a great market, one that we work in on the utility scale side. A ton of credibility in Massachusetts, where they've had a lot of success. Those markets are, you know, power prices have gone way up, which is great for, sort of unit economics, and the markets are very deep. We're excited about this business. The hydrogen piece, you know, I could probably spend a lot more time than zero seconds that I have left here to talk about it, but they're doing really interesting things in terms of, site by site in California. You know, putting solar next to the electrolyzer to make green hydrogen, selling that hydrogen for trucking, putting excess into the fuel cell. It's very cool. They received the first discretionary permit in California to build one of these facilities. Certainly the hope is build the first one and then talk about what a great outcome it was for a lot of other municipalities and repeat and repeat. Do we want to do questions or? Yes, we do. Yes. We just have one more slide, but I think. Sorry. Conclusion slide. Apologies. I think I won't go through these, but I think one of the things may be captain obvious here, but our ability to actually look further down the field and look at some of these adjacent ideas like Valta Energy and hydrogen, we couldn't do it without the perspective of our shareholders, right? That's what makes it, that's what makes it work. I do think that is one of our biggest competitive advantages in the U.S. There are a lot of developers that are owned by private equity, who that investor class typically has a shorter view on life or let's do as much as we can in two years and go public, right? We don't have that constraint. We've gotta go raise capital, of course, we also have the benefit of three very well capitalized, very sophisticated institutional investors behind us who are supportive of the strategy and are giving us the freedom to do it. That, to me, is a huge competitive advantage, and that's really what I think why we've been so successful. I'll stop there and maybe we take some questions. Flesher, are you- Yeah. You have to go on the stage. It's micro. Start it up. Yeah. Thanks, Paul and Finn. Just a couple of quick questions from me just on the 6 GW thin-film solar agreement that you've got with First Solar. Are you at risk on price and delivery timeframe there, or does it depend on their new plants coming on in 2023, 2026, or are they firm on price and delivery timeframe? Secondly, what percentage of that capacity will stack fully to the IRA benefit that, Paul, you talked about? Just last one on the MEAG transaction, can you give us some idea for whether or not they bought into specific projects or at a whole co level? Let me just do the last one. The last one is they came in at the whole co level. They're, they're invested across the entire company. I'll do the First Solar one. We have a framework agreement that is a very flexible instrument, and we can add capacity onto it by mutual agreement, obviously. It depends on the technology roadmap as we go forward as to what volume we want and what model we want. Most of what we're buying now is what's called Series Six Plus. There's a Series Seven coming out, a larger format, that we are interested in deploying, and there'll no doubt be Series Eight and Series Nine, et cetera. In terms of the price, that is fixed. There are a couple of adjusters that relate to the commodities I was referring to earlier. There's a little bit of aluminum in the frames of these things, a little bit of steel. It's not a large driver, but it is something that we work with. There's also a transportation adjuster, but I didn't mention when we go U.S. here, largely our transportation risk is mitigated. It's basically trucking and rail and not a lot of international exposure. The price is fixed, the volume's fixed. We work together on a quarterly basis to forecast the utilization, and we can then, as we get closer to deployment of the modules, we refine delivery schedules down to the week and how many modules per week and so forth. It's an extremely long and trusting relationship, and we accommodate each other. We're trying to marry, remember, a business that is spinning modules off like every two minutes, and they want some place to put them, and we're sitting here figuring out how to do a 500 MW project, and we've got a permit we gotta get. It's hard to marry those together without a partnership that has a lot of flex and trust. I just had a few questions around the IRRs and the benefit of the IRA. 'Cause you had the slide up there, which I think went through the three categories and. Yeah, there's more. Those are just t hree examples. Yeah. Three examples, yeah. 'Cause obviously the storage on top of that as well. And obviously those numbers are unlevered, right? Yeah. Obviously looking at the financing structure, there's quite a lot of debt in Longroad. I'd just be interested in kind of what is the kinda IRR kinda uplift when you're doing it on a levered basis? Then just some assumptions around that, like do you assume that some of those excess IRRs get competed away later on in terms of lower PPA prices? You know, in what kind of period would you kind of expect that to happen? You wanna do that one? Yeah. Yeah, it's more on a levered basis. Don't necessarily wanna flash that to the, to the folks that might be looking. We, you know, we do expect, you know, some portion of that gets passed through, right? We're not expecting to realize 10% additional for sort of new projects going forward. Obviously, the utility offtakers and folks are pretty well aware of what those numbers look like. I think there is some effort to try to share, right? That's generally been the way that it's operated so far. For example, domestic content is an unknown. What do the rules look like? How's the access to equipment? You know, those sorts of things. It's... Those are the types of things that we're trying to avail ourselves of and happy to share it with the offtakers. I think that's probably the right outcome, is some combination, right, of the PPA price differential that we flash and the IRR pickup. That's probably been, I think, most commonly what's happened thus far in the U.S. Of course, some projects just got the benefit. A couple of our projects just, you know, fortunate timing, right, where we were already contracted on the revenue side, close to starting construction, we've been able to avail ourselves with some of those benefits. That's certainly been. I think the other obvious, or maybe not so obvious, is that every single project that you see, every dot on the page, every single one of those projects is competitively bid, right? We're not doing... I don't think we've ever done a, just a bilateral deal, right? There always has to be some kind of a competitive process and therefore, that is what keeps you honest to figure out, okay, how much of that unlevered IRR am I gonna keep and how much price am I gonna share with the, with the customer? Just a follow-up. Are you expecting IRRs 4%-5%? Yeah. The question was, when does the detailed guidance, when is it expected to come out? Our expectation is that it's gonna happen sometime in the second quarter of this year, so soon. Sorry, just one follow-up on the 10% credit. Mostly because there's pockets. Yeah. Obviously, you know, you could have a 30% tax credit, but it could stack up to 50% plus. Yeah. Obviously, when you're competing on a project, if you've got local supply, and you've got one of those low-income areas, then you can obviously, you know. That what makes it. Yeah. That's what makes us competitive or can make the difference between if you're competing with someone who's not in an energy community, and you have then the pricing power to offer a lower price. That's, that's turning into a pretty key aspect of our development focus, finding those spots. Just back to the... I think one of the original photos was of a project in Maine, which I assume is the wind. It's solar. Solar, sorry. How do you sort of, I guess, counter the environmental argument about cutting down a forest for a renewable project and any backlash to that? It turns out in Maine, there's a lot of timber management already. Our sites are typically forest timber management sites. We're helping actually some of the logging going on by cutting down some of the trees. I think the wildlife argument is much more fundamental there. What are we doing with fish, bats, different species that are out there? There's a lot of work that goes into evaluating, doing testing and management of the site in order to accommodate everything that's already there. I think the question that I would say is, we're meeting much more resistance than in Maine cutting down trees than we are in some of the ag communities where there's a principal you know, agriculture as the dominant economic activity and are we taking land out of production. That is a kind of an interesting challenge that we're seeing. The King Pine project that Charles mentioned, the 200,000 acres, is one landowner who is one of the largest timber companies in the northeastern U.S. That site is not kind of virgin forest, right? It is an industrial. If you go up there and drive 40-foot wide roads, you know, a lot of environmental damage kinda already done through the logging operations. Those are typically the best sites that we're. That's what makes a lot of sense to, you know, to recycle some of those industrial logging operations into either solar or wind opportunities. Michael Porter with Smith Inc. You did a tour last year to Maine and Sunstream from Manawa, which was an outstanding. Thank you very much. I mean, the simple question I'd ask, it's not very sunny in Maine. Whereas, of course, down in Arizona, it's just an almost unlimited resource. I mean, how does that actually play out, really? We were a bit puzzled. I think the simple answer is it's not as sunny in Maine as it is in Arizona, for sure, factually. Power prices are a lot higher, and renewable energy credits are a lot higher. The product that you're selling is worth more, and it's worth more, to the extent... I mean, to actually make the projects economic. That's the big difference. I mean. It's that simple. The other irony is, yeah, it's sunny in Arizona, and at noon, there's a lot of sun, so there's a lot of power, and they don't need it then. Now you've got to put a battery in and move it from fouright-e, right? There's a time shifting that goes on. It's a pretty complex market driven in large measure by the prices. From Martin. If I do 2 more questions then we are going to go to lunch, and you can grab the guys then because I know there'll be lots of other questions. Neville? This might be going back to basics a little bit, but I'm wondering if you can help clarify when we're talking about the run rate for OpCo EBITDA, we're talking there about PPA revenue less cost of funding side less overheads. I presume that's the correct definition there. With the complexity of the tax structures, et cetera, how should we think about the run rate for operating cash flow for Longroad on that same time frame? Yeah. I mean, clearly a lot will depend upon the capital structures that we utilize. I think, I don't think we're sort of advertising specific numbers because those pieces are still in flux. For example, Paul talked about the solar PTC, right? If we do a project with the solar PTC, it has quite a different profile than the solar ITC, right? Tax equity investor takes less cash. The tax credit, right, is annualized, right? There's I think there's a fair amount of complexity for us to be able to forecast that. I think a little bit too early for us to have a really tight view on that. The sort of EBITDA number is much more straightforward. It's based on, as you said, actual PPA prices that we have a pretty good sense of, operating costs that we have a pretty good sense of. The capital structure and the tax credit regime, all this guidance that we're waiting on, I think that will have a pretty big effect on the operating cash flow piece. Thanks for that. Just to follow up, when should we think about the businesses effectively becoming unencumbered of those structures? You know, obviously they... you try to return guarantee returns to tax equity partners, et cetera. For lack of a better word, when does that flip occur on average across your portfolio? Yeah. I mean, we're for the solar and the storage, you know, we're generally expecting in year six or seven to buy out the tax equity investor and get them out of the way and have a very simple, nice and clean structure. For the PTC deals, right, we would expect at year 10 to be able to do that. That's been kind of the base case, and I think we'll continue to do so. Yeah. Thank you. Cheers. Actually, we might, I'm only conscious of time 'cause I know after the afternoon we've got some people who are presenting that need to be on flights, I don't wanna cut into that either. Thank you very much. Thank you. I know you could go on for some time, but thank you guys for presenting. Yeah. Thanks. Thanks for the good questions. We might make a start. Paul Newfield doesn't need an introduction from me, so thanks, Paul. I think I got a flatmate. My place has been treating everyone else today. To repeat the common theme, it is really good to be doing this in person after years of doing them on Zoom. I must admit I was nervous coming here this morning to see if Jason Boyes had remembered the need to wear long trousers. I can tell you it doesn't always remember in the office, but yeah, good that he remembered people would see his whole body today. When I was thinking back actually, when I saw the track record slide that Jason put up at the start for Infratil. In 2007 when I met Lloyd Morrison, and Infratil had been going for 13 years then, the track record was 18% per annum, post-fees and taxes since inception. It's really nice to see it at 18.5% now. I think in the years I have been at Morrison & Co., when I joined in 2008, people would say, "Oh, it's been 18% per annum, that's all Trustpower and Wellington Airport." Those are the two assets that matter. It was actually Z. Z gave you this little kicker, that's how you've done it. It was actually, it's all CDC, it was all Tilt, it's all Longroad, still CDC. What you look at when you look at actually all of that for 29 years is actually the biggest asset is the people. That's not just the Morrison & Co. people. Clearly, it's people and relationships, right? It's the Infratil board, it's the Morrison & Co. team, and it's the portfolio management. If you think about the relationships between those people running the portfolio companies, Morrison & Co. and the board, that's actually how you get that track record for so long. I want to spend 10 minutes talking to you about that asset in the portfolio, which is the people. Conscious that we don't talk about Morrison & Co. publicly very often, so give you a little bit of an update on our business. We, consistent with what you've heard today from Infratil, it feels very global. That's how our business feels today. Sort of touch over 175 people, probably head towards 200 this year. Those people are increasingly globally spread. I'll talk a little bit about where they are. Importantly for Infratil, that is one team. It's not like there's an Infratil team of 15 people in Wellington. Infratil has access to every one of those people, you can always get the right person on the right asset at the right time. As Deion alluded to, you also get all kinds of insights from the things you do that aren't just for Infratil. When you own part of a large transmission distribution network in New South Wales, you get insights into where you should be building renewables. If you own fiber businesses in Spain and in North America and Australia, you get insights into where's the value in the fiber that sits inside the Vodafone-Business, the One New Zealand business here. That is where, that is where the magic happens for us. It's that broad reach, seeing everything. What I want to share today is really two things. One was tell you a little bit more about that team and how it's grown. Secondly, share some insights we get from the fact that we now do have that global view and are looking at things so much more broadly. First of all, our board. These slides don't have every face in the firm on them. It's quite hard to keep them up to date, but I'll try and as we go through, try and highlight a few faces to talk about. Some of our board you all know well from their long involvement in Infratil. People like Duncan Saville, Rob Morrison, Anthony Muh, myself, and then we've added people more recently as we have globalized. Damien Roche, it's been his executive career in global roles for JP Morgan, now the Chair of the ASX. Kate Mingay, who I think I introduced in the virtual version of this last year, U.K.-based director, has spent her career all around energy, transport, and infrastructure in Europe, both on the government side and the private side. Newest director actually announced yesterday, officially starts first of April, Geraldine Buckingham. Geraldine's an Aussie who spent most of her career in New York, then Asia, is now based in London. Most recent job was being the head of all of Asia Pacific for BlackRock. Before that she was Global Head of Strategy there. Going from a perspective of being at the world's largest asset manager to sitting around the Morrison & Co. board really helps. Actually this week really helps because she's also director of HSBC globally. You get a little bit of insight into what's going on in the global banking system. Really we have tried to evolve and always stay ahead of where we need to be by getting that global expertise around the top table. Then maybe to step into some of the regions. This slide, the face in yellow here are the folks who are based around Europe. Most of them are based in London. We do, as you saw with Vim, we'll have folks in Zurich, Italy, and France now as well. If you think about the backgrounds of also, like our Head of Europe, Vincent, is a Dutchman who, like most Dutchmen, speaks about five languages and is very at home everywhere. A team now in London, which I think is at scale of any global infrastructure fund manager in the world. Similarly, if you look to our folks in the U.S., who are almost all on the island of Manhattan, a combination again of great Kiwis and Aussies who have gone up there to carry the culture with people from some of the best U.S. institutions. Perry, who runs our business, used to be the head of UBS Americas for infrastructure. We've got Melissa, who's just joined us from a very senior global role at Brookfield. Lauren, who joined us from Carlyle. You've kind of got all of the U.S. brand names, U.S. networks intermingled with this Morrison & Co. DNA. Increasingly for us in the next year, what you'll see is us adding the American version of a Bruce Harker or a Marko Bogoievski, if you can imagine such a thing existing. You know, those people with the real operational experience in the sectors that we deepen, and some of those faces are already on this page. It feels pretty cool actually. You think like, this is a New Zealand company, but is genuinely a global leader at what it does. When I think about Infratil, I always think about my mum, you know, the retired school teacher sitting there with her savings and Infratil shares, having access to what that global team of 175 brings, and then what the global team of portfolio CEOs and management teams brings. Like, you sit here listening to the Longroad team, and you're kind of amazed, you think like New Zealand retail shareholders have got access to that and exposure to that. That is very different from pretty much anything else you would see in the market. That's a little update on where we're at, and I think should just imagine that we will continue to keep investing in our team and talent to stay ahead of the demands of Infratil. Switch to the other side of the equation. You know, what are we seeing globally in the infrastructure market? This chart's the same data you saw from Jason earlier. This really big flow of institutional capital globally into the infrastructure sector. As Jay said, in the last year, actually more inflows into this sector than global real estate, which is quite incredible. It did really start to decline in the second half of 2022. 2022 was a world record historical year, but it was pretty much all in the first half. We definitely are seeing some of that slowdown. Why do institutional investors like infrastructure? Inflation protection, recession resilience, all of the things which you ought to want more of right now. We expect we'll keep seeing that. I think it will slow down a little bit. If you think about how institutional investors think about infrastructure, you've got real estate on one side of you and private equity on the other. I would say in the next 12 months, it's gonna be tough times in big parts of real estate and tough times in private equity. When your neighbors' houses are on fire, you'll get a little bit of smoke in your drapes. It might not be the best time to have an open home. I do think to the extent that infrastructure really delivers what it says on the tin, and not every infrastructure asset will, but the extent you can really deliver recession resistance at the same time as you give inflation protection, I think you'll start seeing more capital come from real estate and from private equity into this space. Expect that to really bounce, probably give it 12 months, 18 months, depending on how markets perform. If you flip that round from the institutional side to the fund manager side, why are fund managers getting into this space? This is something we're really seeing. You know, when we want to put someone from BlackRock on our board and just ask Larry Fink's permission, why does Larry Fink care about someone going to work in Morrison & Co? BlackRock, world's biggest fund manager, really wants to grow on infrastructure. KKR really wants to grow on infrastructure. All of these global fund managers wanna grow here. Why is it? Long time since I've been a consultant, but I still can't resist a two-by-two matrix. The chart on the left of this slide shows you average fees versus average growth in funds under management by product category. Managers who have been traditionally in that U.S. active equity space, finding a lot of fee pressure, slower growth, want to get into alternatives, and infrastructure shows out as the highest growth segment for them and still a high fee segment. I will point out that the Infratil one would be in the in a different quadrant there if you're looking at Infratil fees. Certainly, in the U.S., internationally, we're still seeing people commanding under private equity style fees, 125, 150 basis points, but with that massive inflow of a new product category. That's why they're all getting into it. On the right-hand side of that chart, you see some of the mega funds that closed just in the past year. You've got people like KKR closing an individual infrastructure fund at $17 billion. I think this year we'll see a Brookfield one that'll be north of $20 billion. Stonepeak will be pushing up to those numbers, Antin similar numbers. When people are raising individual funds with $15 billion, $20 billion, they want to do a lot of deals that are $1 billion, $2 billion, $3 billion dollar equity checks, which actually is a great thing for Infratil, because when you think about what Infratil does, often it builds and creates these businesses, like Deion and Clayton's business, Tilt Renewables, that then do reach that scale and become really desirable to some of that market. How do we remain relevant in that world? If I'm honest you as Morrison & Co, you think, you know, we're early to this space, how do you just avoid being crowded out? All we really have is our track record. It is your calling card, particularly if you think the Infratil track record is public, all of our worst deals are in it, and all of our best deals are in it. No one has to due diligence it for weeks to understand that. You can actually just look at that return. That's why no matter how big Morrison & Co ever grows, Infratil will always be incredibly important to us. It's that calling card, and I think if you ask any Infratil director, they will see this. Morrison & Co people will crawl over broken glass to deliver for Infratil because the rest of the business falls apart if Infratil doesn't deliver. We got data on as far as we could find every infrastructure fund in the history of the infrastructure sector. Interestingly, the dataset starts in 1999 and Infratil, of course, started in 1994. It tells you Infratil was early. If you look at Infratil's return since inception, that 18.5, it's right up at the 85th percentile of all funds ever. Remember, they've been doing it. These are typically funds that run for seven-10 years. To maintain that to 29 years is something really special. The last 10 years, obviously pushing towards 20%. To us, this is the most important thing, preserving that track record and enhancing that track record. That's why you see us invest into it. Last thing I was gonna cover and hopefully give a little bit of time back to the day was, given that we do now have this global breadth and we are seeing a lot of deals and we do deals that aren't just Infratil deals. You know, last year, the deals we did last year were probably a third, a third, a third across North America, U.K., Europe, and Australia, and New Zealand. Obviously a lot of that wasn't just for Infratil, but it does give us this privileged spot to view what's going on. Sitting here today, I would say we are in choppy waters globally. Clearly, we can all spot that. What does it mean for infrastructure assets? Rare high-quality demand assets are always gonna be in demand. Particularly if you can show you have inflation protection, you can show that your volumes won't go down materially in an economic downturn, and you can show that you're a platform that you can keep reinvesting in and growing. I'm not kidding ourselves that every asset we own will prove to be that, but the ones that do, I think will be really attractive to people. We're in a capital market like everyone else. What are we seeing right now? A lot of institutions, superannuation funds in particular, are talking about what they call the denominator effect, which is, you know, they aim to be, say, in Australia, it's normally 10% infrastructure. U.S. might be 3%, 5% infrastructure. When your equity portfolio goes down, your bond portfolio goes down, all of a sudden you're overweight infrastructure. That is slowing things down. We're seeing people say, "You know what? I'm not gonna pursue that opportunity." Talking to people who, you know, start a Monday with 10 deals on their list and say, "Actually, we can only really focus on three of them." That is definitely going on, and that is creating fragility in some transaction processes. We are seeing processes that in the past you'd say, "I'm not even gonna bother participating." Or some cases where you say, "I'm not gonna put an indicative bid." You write them a letter, "I'm not putting an indicative bid. We don't think you need us," and you get a call back a month or two later. That is definitely changing. To the extent that you're well capitalized as Infratil is, and where you're in sectors where you really can have conviction and confidence in what you're doing, I think you will get opportunities to take advantage of that, to act decisively when everyone else is nervous. I think probably if you think about the last few years, we've had this really strong bias, right, Jason, towards building businesses rather than buying them. Think about it. You know, we built Tilt, we built Longroad, we've built 80% of what CDC is today. I could imagine in the next little while, that could swing back and you say, "Actually, now is a great time to be buying, not just building." That remains to be seen. Who knows? Maybe the world somehow navigates this path. I don't think we're gonna see blood on the streets. I made the foolish error of moving to Australia in 2010. Remember Lloyd Morrison shaking his finger at me and saying, "There's going to be blood on the streets. Babcock's gone, Allco's gone, Macquarie's close to dying. You're going to buy all these assets cheap." We know those great assets, people don't give up if they don't have to. We're not expecting some kind of, you know, kid in a lolly shop experience. We do think there will be good opportunities if you've got capital and you've got conviction, and I think that's what Infratil has. That was all I was going to say Flesher. Happy to take questions if there's a minute or two. Yeah. Why don't we do a couple of questions if there are any, and then- Hey, Paul. Thank you for that. very insightful. I'm actually really curious how you sort of think about or decide what assets are suitable for Infratil versus some of your other, collaborative, you know, management mandates that you're having? Yeah. When do you think this is a good asset for Infratil, apart from obviously, if it's a great asset, it goes to Infratil. You know. Yeah. Any other considerations? Yeah. I think the first thing to say is, you know, you did right. Like, Infratil has the right to see everything we do. Infratil board never gets surprised about something. We do go to the Infratil board with a recommendation on do we think this makes sense for your portfolio or not, that's usually around, you know, all the things Jason described around the portfolio strategy, the return targets, how much yield do you need versus growth. There's always, you know, that shifts around. The other element of it is Infratil, to state the obvious, is a listed stock, there's only so many sectors and ideas you can have in that before you just start creating a discount because people aren't gonna do the work. You do see... I think Jason and the rest of the Infratil board set a really high bar on introducing new sectors relative to investing in your existing business or another business in the same spot. I think that's an overlay that's probably unique to Infratil. Other than that, it's, you know, that trade-off between how much yield do I want and how much growth, and how do you deliver that overall return target that Jason and Phil have to target. Thanks, Paul. The definition of infrastructure is kind of broadened over time. I was wondering what your thinking is on how it might continue to evolve over time for Infratil, the group. Yeah. I might first say how I think it might for the market and then how it might for Infratil. I think for the market, it has definitely broadened in the last few years, sometimes for good reasons, sometimes for bad. Just that weight of capital and free money has meant people have gone looking outside their normal areas. I don't think that will all end well. You know, whenever we break new ground, like diagnostic imaging, you know, we say, "We've gotta really work hard at making this work," 'cause if we do well, it will become mainstream, and you'll have a whole lot of people buying up these assets everywhere and valuation being pushed up. If we don't do well, everyone will say, "Look at those idiots. It was never infrastructure." You know, when we bought CDC, we got a lot of, "Look at those idiots. That's not infrastructure." Now data centers are the most sought after class because that's performed. We do need to make things perform. I think there probably will be a bit of cleaning out in the next few years of some things that don't go well for people, and they don't choose not to go back there. I think for Infratil, I'm more interested in those thematic spaces than really hard boundaries of risk-return. You know, like when Longroad was a great example, right? When you heard the guys talking about how they're starting to explore distributed generation and hydrogen. They do what they do so well, they can assess those things on the boundary, really understand them, take them in bite sizes, and expand. I think that's probably the way we'll expand. You know, we really have expertise with either within Morrison & Co or in a portfolio team, rather than saying, "Let's just pick out a whole brand-new space." As you also heard from some of the team, whenever we go into those new spaces, we've probably spent five years working on them already. You'll probably have heard in some of these sessions us talking a little bit about some of those ideas before they pop up. Certainly, the Infratil board usually has heard about them for several years, right, Alison, before we ever recommend an investment. Right. We might... Oh, sorry. eight At the beginning of the day, you know, the target return was 11%-15%, and then you've got a chart up there showing sort of 18.5%. Over the last 10 years, you know, it's been really strong. What's changed? What's changed in the market, particularly given that, you know, at the moment there's, you know, potentially opportunity that you might be able to pick up some assets cheap? Yeah. Yeah. I would say nothing. We targeted the same range back then. In fact, every investment committee paper that's ever come up for Infratil, I think the highest number I've seen an expected return was 16.5, which was CDC in 2016, and that's turned out to be, whatever it's been, 40%, 50% right. I think our job. If you start trying to push too far, you do take on risk and do silly things. Our job is usually to find businesses who we think will have a downside protection at about eight. You've got high confidence in the mid-teens, and then you've got optionality 'cause you're in a good space, which is what pushes you above that. Hopefully 10 years from now, we're still looking at 18.5, but I think if we told you we were gonna target that, there's a risk that we take on too much risk. Thank you. I like What was it? Drapes and smoke. I can just see a research analyst here. I don't know. You scared everyone, but okay. Thank you. Thanks, Lewis. Thank you, Paul. Right. I'm gonna welcome Lewis Bailey onto the stage. Lewis is, I think his title at the moment is acting head of strategy, but Lewis does a lot of things. As many people at Morrison & Co, your title seems to change daily a little bit with what's required to be done. Lewis has been involved in the digital and telco side of the business with us. We, including involved in transactions as well. He's gonna give us a little bit of background around thinking around this space and why we are still excited about it. Welcome. Thank you. Good afternoon, everyone. It's my pleasure to introduce the digital section of today... Oh, thank you very much. Give you a bit of a whirlwind tour. I've been told, keep it quick, my plan is just to talk very fast. I also will get the pleasure of introducing Greg Boorer, CEO of CDC, and also the Chair of Cricket ACT, who I've been told is going to hit it for six, and also Jason Paris, who's of course, the CEO of One NZ and our gracious host today, although I don't have a suitable sporting pun for him. Sorry. It's not just for the IE. Digital infrastructure assets now comprise over 50% of Infratil portfolio. That wasn't always the case, of course. When we started to invest, Infratil started to invest in CDC in 2016, it was really not recognized as a core part of infrastructure as an asset class. You can see the enormous growth there's been and the maturity in that sector, across data centers, fiber optic cables and towers and others. Of course, Infratil holds have really benefited from that recognition of these assets as essential to our societies and absolutely sort of defensive and having really kind of long-running demand drivers behind them. That sort of growth, we see it in every day part of our lives. That is part of our, the way we e-engage with our families and friends, our economies, our healthcare assets. You know, it's driven this exponential growth in usage of these assets over the last five years. The question is, when you look at smartphone penetration, you look at global internet penetration, you know, how many smartphones can you really have? How many tweets is one tweet too many? Is this a yesterday's news type story? You know, yes, there's growth to come, but is it slowing? I think our argument is no, it's not. The revolution here really is continuing, and if we just take a brief trip on the hype train for a second. You know, this is really the year that I think AI obviously captured the public consciousness and took hold. I mean, you look at ChatGPT and then GPT-4 that has just been released, you're seeing these amazing. For the first time, people sort of contemplating amazing use cases for this. You're also seeing AI search is about 10 times as energy and compute intensive as a traditional Google search. There was a paper published, I think, just today or yesterday by some Microsoft engineers who've been integrating that technology into Bing, saying, they believe, in their words, you know, "GPT-4 is showing the first sparks of generalized intelligence." That is beyond a specific use case to solve general, not well-defined problems, which is both exciting and terrifying, potentially. You know, you really see that growth and the huge impact that's gonna have on our societies going forward. In a more pragmatic, dirt under your fingernails type way, there's also this robotics and automation trend that we've seen. You can sort of see the enormous uplifts as people start installing both sensors and actuators at the edge of these digital networks to do the physical work that needs to be done. Casting our mind one step further over the horizon. Quantum computing, you know, it's still some time away, but the Google CEO recently said, you know, five-10 years, this is gonna transform the way we think about encryption, problems like the traveling salesman problem. How do I orientate my fleet and reorganize port and shipping actually are solvable and optimizable. Things like biology and protein folding. I think penicillin, for instance, has 10 to the 86 possible permutations of its atoms. Actually to sort of start thinking about, well, how do we crack some of those biological problems, they're just impossible under current computing constructs. Under those quantum computing constructs, actually these are now solvable problems. You can kind of see that next generation of technology and the impact it's going to have. I was talking with my nine and six-year-old in the car the other day, and I said, "Well, guys, Mr. Musk will wanna come and put a neural lace into your brain. How do you feel about that?" My wife said, "That's terrible parenting." She's right. You know, if you do... What was once science fiction is now reality, we only need to cast our minds forward a little bit to see this really is the dawn of a exciting and sometimes scary, new world. Bringing that back to Infratil's business and what opportunities that actually cast up in that infrastructure that powers these the edge of sort of these use cases. You think about there's actually evolving needs on the architecture and the business models of the infrastructure assets that's behind this. Not just bigger, i.e. more bandwidth, but more scalable, flexible, the ability to ramp up and down uses, latency concerns. Am I close to the edge? Security and sovereignty are increasingly important, and we're seeing a lot of those U.S. regulators talk about this, and how important that is becoming in their concept of how they choose not just the assets they operate on, but how they choose the capital that is behind those assets. Stability of the system and the power source of the system. You know, these data centers and networks are predicted to take up collectively, you know, more than 5% of energy demand or more by 2030. You think about that. That's really important to how we think about how we structure these assets. I'd sort of come up with this schema, bigger, faster, better, just to get everyone excited. Bigger, of course, the need for bandwidth. Originally driven by video, potentially by AR, VR, the compute resources needed for AI. Faster, that is closer to the edge. It can also mean beyond some of those real latency use cases like autonomous vehicles, which we've been promised every year since 2014, I think. You can even think about that faster as being the regional edge or the metro edge. That is, moving out from the major data center hubs to slightly closer to the customer where land is cheaper and also hyperscalers still needed to deploy content closer to the customer to improve customer experience. Better as a catch-all for that bucket of opportunity, which is around sovereignty matters, security matters, flexibility matters. We're seeing this in some investment opportunities we're looking at currently around, can I use software-defined networks to give you a security promise as a customer or a certainty of supply, or the ability to ramp up my performance on my network, but then not pay for it when I no longer need it. That's all been banging the sort of rah-rah drum on this is a really high-growth, exciting sector, and it is. There's of course, risk in this space and, you know, without sort of laboring a lot of these points, there's operational risk here. I think a good analogy I heard recently is data used to be oil. We used to store it, and the more of it I could bring, the better. It sort of changed to uranium. Still valuable, if I don't store that carefully, if I don't protect that, then I'm exposed. If you think about technology, there's of course disruption risk. You know, we always try and when we're thinking about the digital assets that Infratil invests in, we think about can we get an incumbent position where we have the privileged right to roll out that next generation of technology? We're not gonna have someone small come in and disrupt us. We can actually deploy that technology ourselves. Finally, sort of regulation and politics. You know, with the increasing geopolitical tension we're seeing, this is in of increasing importance to governments. They recognize as well how fundamental these assets are to every piece of their societies and the need to really control, who owns them and how they're operated. That brings me to Infratil itself. How do we think about the opportunities, the classes of opportunities which we're gonna face looking forward, and then, you know, some examples of those. I don't want to labor the point here on these too much. You know, the first one there is follow-on capital. I think it goes to what Jason spoke to right at the start of the day, talking about we've invested in assets and platforms that have organic growth within them. That is, we have that opportunity to deploy capital within those platforms, leveraging the expertise and the sort of natural incumbency advantages they have. There's a range of. There's also sort of range of sort of new development models as well there. You can kind of think about those as rolling out fiber to the premise or fiber to the basement if it's in a commercial setting. Dark fiber rollouts, you know, tower 5G builds. There's a lot of opportunities there that are on that edge of deploying capital into development, spaces. There's also, you know, a range of these others here. I won't sort of read through them all, but, you know, we can really think about them as those opportunities that are within our incumbent assets, and then also some of these opportunities that have been driven as the technology evolves, be it small cell, IoT networks, satellites, communication hubs. We've looked at some assets as well in this space where, you know, local communication needs are important. we can actually, if you can get a privileged piece of the value chain that communicates, you can really get a very defensive position. Further afield, you can really think about data itself as an asset. Are there from regulated data monopolies where you say, well, that data is defensive and the role is defensive inherently because of its monopolistic characteristic, up to okay, businesses that have high network effects in their dataset have really high unique and hard-to-disrupt positions where you think it's gonna have unique explanatory power in the long term. Often those type of assets are linked to sort of physical asset. A linked software and hardware asset or a linked software and sensor asset that means that it's very hard to break that connection. My final sort of point here is just around Infratil itself. As we see, these assets are becoming both more important and more critical and under increasing regulatory demands to be owned by the right people. Infratil is therefore, you know, quite privileged in its position where it sits. It sources capital, it's long term. Really being able to see through short-term fluctuations to long-term value, which really helps us in a lot of these, a lot of these positions we're building. At scale, often the nature of digital assets means they have a network effect in them. That is, the bigger your position, the more privileged your position, the more defensive your position is. You know, that ability to deploy at scale really helps us to access some of the more attractive opportunities. I think the third one there, trusted, is of increasing importance. That is you know, New Zealand is a Five Eyes member, and it's a very, I think will be increasingly so, a very important piece of our value proposition to the owners of these business and these opportunities that we come from a capital source that really can be trusted to act in the long-term interests of the governments that are regulating this space. I might wind up a little early there, give some time back. I presume, Fesh, you didn't want to do questions or? We can if. It's always interesting, the longer Lewis talks, either the more excited or the more scared you become. We've been lucky enough to hear him quite a bit lately at a couple other conferences. Maybe there is one or two quick questions we can do. Otherwise, I'm conscious the Mayor of Canberra is standing at the back, needs to get on a flight at some time soon, we'll get him on. If there is any particular burning questions for Lewis. No, just skip him. Okay. That's all right. No problem. Thank you all and, so I'll hand over to Greg now. Thanks. Well, hello everybody. Can you hear me okay? I feel like Madonna up here. Hopefully I don't look like her, although she's pretty fit. That would be all right. It's always nice to be amongst friends. I'd like to acknowledge and welcome all the people that took particular effort to come and visit us in Sydney last year. I think I really enjoyed it, and I think it was great for everybody to see rubber hitting the road, and what data centers do and how they're put together, and how therefore important they are. All the stuff... Thank you for the introduction, Lewis. That, all of the stuff that Lewis talked about, technology floating around, it's all around us, but eventually it hits the ground, and we're the ground. That's kind of how to think about things. I would also like to thank J.P. Thank you J.P. for hosting us here today, and yeah, go The Warriors. Except when they're playing The Raiders, of course. Hopefully, everyone here today will find this incredibly boring and there'll be no surprises, is kind of how I'm sort of thinking about it. Because that's kind of how we're thinking about the business. It continues to perform, and we've got a lot of tailwinds and like to talk through everyone, about that. I also would like to introduce a new concept at the Infratil Investor Day, and this is a little bit off-piste, so we'll go for it. Best question, but off-piste. You know. It's French, you know. The best question today gets a really, really nice bottle of wine that Jason will buy. Okay. I look forward to those questions. You know, previous performance does not indicate future performance. If we go to the agenda and we talk about performance then, there's probably one or two. Who doesn't know what CDC is or hasn't seen CDC or hasn't been bored to death by me previously? There's one or two. This is what we do. This is who we are. Australia and New Zealand's leading data center, digital infrastructure data center operator. We sort of differentiate ourselves in a number of ways around security primarily. We are very, very lucky. I didn't realize at the time, but you sort of weave it into people's thinking, so you appear smarter than you actually are. We started in Canberra. We started servicing government, you know, defense, intelligence agencies, things like that were our clients from day one. We thought what we were doing was normal and that was the baseline. Suddenly as you work through the various layers of less classified organizations, enterprise, and then into the cloud world, you realize what we were doing was incredibly special. Because the, you know, the direction of the prevailing political and geopolitical breeze and, you know, cyber challenges and all of these things off the back of a horrible COVID period, which survived mainly due to technology. As a result of all of that, the whole world has shifted even further towards us and away from traditional approaches to security and the security of data. As a result of that, we're just incredibly well-positioned. It's impossible to retrofit, you know, a security mindset into your DNA, let alone your infrastructure. Once you've got it, you've kind of got it. The other thing is, in terms of flexibility and optionality, Lewis spoke a little bit about that. It's actually a real thing. These buildings, you know, they're, they're bits of really, historically, really boring, less than dynamic, you know, pieces of real estate that have to adapt and accommodate changing technology, which is happening constantly. If you talk to any of the, the ICT hardware infrastructure manufacturers, none of their, none of their, CEOs can tell you what the footprint design possibilities of next year's infrastructure is gonna look like. You have to have this inherently built in to the facilities to be flexible enough to accommodate changing technology over time. All of the AI stuff that we kind of talked a little bit about, like there's always hype cycles and people get excited ahead of the curve. What I'm seeing is that the compute requirements are massively different. We're talking different types of chipsets, different types of cooling architectures, different densities, most importantly. All of those things mean that not many of the existing standard data center architectures that exist today will be able to comfortably or easily or cost-effectively accommodate those types of offerings. Whereas they will seamlessly slot in to, in many instances, into existing contractual arrangements, contracted footprints with our clients. That is a huge advantage, and that technical optionality is wonderful. Where did that come from? That come from the fact that I'm an IT guy, not a data center guy, who's historically hated data center people because data center people tell you what you can't do. we've just designed our data centers and continue to design our data centers with an IT down view of the world and future-proof in mind, rather than an infrastructure up view of the world. just means we're gonna be more relevant and more valuable for longer. Mission criticality, 100% availability. Like, that's a minimum. We're actually in a pretty, you know, it's a pretty tough gig because clients expect 100% availability, 100% uptime, and you don't get rewarded for that. That's a minimum expectation. as soon as you go, you know, 0.1% less than that, you get whacked with the most enormous stick you've ever seen. to tell you what, it's not fun, so you just don't wanna get hit by that. A 100% availability is what we offer, and we do that, and we deliver that, and we have delivered that consistently for nearly 17 years because of the unique designs. Also the standard operating procedures and different things that we do. Sustainability, you can't be in this industry without that being front and center of all the decisions you make. We're probably not great at sort of capturing and communicating all of our wins in this space, but 76% of our data center portfolio today is powered by 100% renewable energy. There's not many data centers, if any, operators of our scale on the planet that can claim that. We don't use any water. No data center operator on the planet can claim that. That's multifaceted in its benefits, but certainly resilience and the ability to continue to operate without water being available is huge. That's one of the things we do. We're moving to a zero-waste, and some of our largest data centers, like Sydney, for example, have already achieved a zero-waste certification. We will, over time, push that harder and harder, and we're very close to having a runway to being net zero. We've stated 2030, although we think we can get there earlier with a lot of the work that we're doing at the moment. Because I do envisage there'll be a date in the not too distant future where a prerequisite on any sort of business government tender or cloud arrangement will be, are you powered by 100% renewable energy, and what are all of your ESG metrics? It won't be pie in the sky, you know, people greenwashing, you know, all these things. It'll be certified metrics, just like official accounting standards, which are becoming more and more prevalent around the world, which is awesome. Finally, we don't try and defeat all things to all people. We have a really, really narrow focus, which is government, the public sector, the biggest technology platform providers on the planet, which service the most critical customers in the world, and also the critical customers in the world who, if they were not online and available, would have a similar impact if government was offline. Utilities, transport, financial industry, those types of organizations. That's all we do. The nice thing about that, as a result, as we sit here today, 99% of our clients and our counterparties are triple A credit-rated organizations. That's amazing. We've just raised some money in America on the USPP thing, and that was an experience. Getting grilled, you know, for eight hours a day on every possible thing that could possibly go wrong with your business makes this look like, you know, a bloody circus affair. It was, they couldn't believe that metric and also the fact that over time, our weighted average lease expiry has actually increased to nearly 14 years and then way beyond two decades in terms of options. We all know if we do a good job and with the flexibility, the optionality of our facilities, those clients will be with us for a long period of time because of the unique nature and value proposition that CDC has. Last time we spoke, this is what I said we're gonna do, and this is what we've done. What is it? What date is it? The 24th? We're very close to the famous end of the financial year. What we can say is all of the things that we promised we're on track. We have contracted, which is fantastic, a large number of national critical infrastructure type organization, banks and the like. That's diversifying more of our client base than ever before. We have invested in our people, we've grown the number of people, but we're also in a really constrained, a constrained resource world, we've established the CDC Academy. We're actually training people and investing more in career pathways and career development, as we tick over 200 staff now. It is really unique skill sets in our business. Highly trained electrical, mechanical, networking sort of skills with security clearances, with the right citizenship arrangements. That's both in Australia and New Zealand. These, these, we commit to these types of additional protections for our clients, and it really pays. Has been paying off well. As a result, our retention has improved remarkably, and we're in a good shape from a people perspective, which is really important. We have built facilities in Auckland in two locations which are now live. You can't underestimate the achievement. That's a new geography, new building regulations, particularly around seismic and other things. A huge learning experience for us. Different consenting laws and all of those things. Plus, we did it during COVID, plus we did it during lockdowns, plus we did it with supply chain constraint environment. We hit all of our, both cost and also time objectives. In addition to that, we've also brought new facilities on, in Sydney and Canberra, and we've got some great stories about what we're going to do in the future later today. I guess from an investor's perspective, that sort of 30% year-on-year sort of growth, we will hit those numbers this year, which is excellent. Again, hopefully, this is boring for everyone, because it's is as promised. I'm glad most people here weren't at the opening of our New Zealand data center 'cause I absolutely butchered the Māori language. You know, the local elder that was there gave me a big nod and patted me on the shoulder, and I almost fell over when he did it. He said, "Mate, you were hopeless, but full respect for having a go." That was good. We're up and running in Silverdale and Hobsonville. Great facilities. You know, 10 megawatt IT loads. You know, there's a lot more to come in that space as well. Eastern Creek. That is, you know, when I look back at my time with the business, I think, you know, the big... It was a big thing, like, and really we did it, you know, at a almost on the back of a coaster, talking, you know, on a, on the back of a bus in a, on a board trip to the U.S. to look at technology. We, you know, should we buy this site in Sydney? It will, time will probably prove that the investment and the purchase of that very small data center on a very large block of land in the western suburbs of Sydney was probably equally, if not more important, than starting the business in the first instance. Like, it's huge. We've spent $ 1.5 billion. We have multiples of that in contracts. We will spend another $1 billion building out the remaining capacity on that site. We're very excited about what that means, and that would be one of the biggest and best and certainly most secure and most impressive data center campuses in the world. If anyone, which you have done, has had the opportunity to go there, I would, you know, challenge you to argue with any of those statements. We had a terrific combination, both sides of politics, state and federal. It was, you know, it was quite interesting. I felt like it was a roast Greg day. Which shows the wonderful sort of trust and relationships we do have with all levels of government in Australia. What are we up to in terms of development? You can see, Silverdale and Hobsonville, they were too small when they opened, which is amazing. We're adding 6 megawatts of capacity onto both locations, which predominantly is contracted. That's the next thing we're going to do over the course of the next, 12 months. We've also purchased additional land in both locations and significant landholdings, just to provide us with a runway for future growth. I've been completely amazed at the reception we've received in New Zealand, from a broad range, from commercial organizations, from government, from certainly the cloud providers. Everyone's really leaning in. This country has experienced a lack of investment in infrastructure, digital infrastructure for so many years. We're like a breath of fresh air, and we're happy to help people breathe. That's in Auckland, continue to go. I tell you what, we've also. You know, I was lucky enough, I sound like a bit of a goose, but last night when I was speaking to the Prime Minister, I did sort of make the association with the fact, like, you've only been here for eight weeks and we've had, we've had floods affect our data centers, we've had storms, we've had earthquake, we've had a cyclone. Like we've fully road tested all of the design features of our facilities, and they've come through, you know, in perfect shape. We're very confident that although it can be a tough place to operate infrastructure, New Zealand, because of the weather conditions, that we're in really good shape. That's, that's great. Eastern Creek, the, you know, the flagship site in Australia, EC 5 and 6, 250 MW data centers, we're pretty confident that we will be building those pretty soon. They're under design at the moment. They're all approved, we're just working through the business case to kick those off. Certainly, the demand is there. We're starting a whole brand-new campus in Canberra. Fyshwick 3 will be the first data center on the new campus. That's, just again, 17 years of continual construction in Canberra. That goes to a new data center in Hume as well, Hume 6, on the other end of Canberra. Very, very exciting. We're sort of getting into, you know, AFL country, which is, it's a sport they play in Australia. We're in Melbourne with a, you know, huge campus down there, with the first building being a 20-megawatt data center, which hopefully if things go smoothly, we might have up and running in this calendar year. But, you know, there's a lot of, lot of things to get through before now. Huge development pipeline, and we have a lot of confidence around that. To give you an idea of what the acceleration has been, this chart shows the acceleration, which is remarkable. In 2016 or so, we started with Infratil, and you can see where we're at. I will note, and sort of 'cause I felt a bit weird, when Paul Newfield was speaking, he used the royal we, you know, when we built 80% of CDC. You know, I felt like it's been nice with my feet up on the desk you know, for the last 7 years or so. You know, but thank you. It was excellent. You can see the acceleration growth in Morrison & Co's defense and obviously, with Infratil's wonderful support, just having that ability to share a vision and to put your money where your mouth is with regards to, you know, backing the management team, very impressive. When people say to me in other settings, you know, 'What would you recommend around business and whatnot?' It's get some bloody good shareholders that are aligned with exactly how the business operates. Everything we do is long. It takes a long time to convince clients to move into your data center. Contracts are long, sales cycles are long, development takes a long time. Everything's long, so you've got to have shareholders which share that sort of perspective. Jason and Infratil certainly do. You can sort of see acceleration. 268 MW, we've got another 40 odd coming online. We've probably got another 150 MW to do in the not-too-distant future. You can kind of see we're kind of trending towards doubling the size of our business in the next few years, which is no mean feat when you think about building a data center is like building a hospital, and we all know how difficult that is from reading the news. ESG, just to sort of give you a sense of it. We sort of touched on it earlier, but the key things, you know, no water, 76% of our facilities today are renewable energy powered. We're going through energy procurement activities at the moment to lock in and to mop up the rest of that. New Zealand, absolutely a standout. The beautiful thing about coming to a country that respects sustainability as much as New Zealand does in starting with a green, a greenfield, is that we didn't have to deal with any legacy. From day one, the only data center operator in the world, CDC NZ, is 100% powered by renewable energy, and that's amazing. The team's doing a terrific job here locally. It's easy to say and harder to do, but we really do care about our community. We do invest back into our community on a massive scale. We also encourage all of our staff to invest and to volunteer and do all of those things. It's not. You know, we were doing this before, you know, I ever heard of ESG, but it's a, it's a, it's a good thing to do and, you know, happy to talk in much detail. There's obviously multiple layers to this, and it's getting more sophisticated and luckily, you know, more verifiable than ever before, as we sit here today. The, the outlook, what we're seeing is that our customers are just the best customers because they continue to grow, they continue to be relevant, they continue to service, you know, you know, governments. Governments aren't going anywhere. You, you know, you don't, you don't have a choice where you pay tax. We're very happy with the mix of customers, and they continue to grow, and they continue to evolve and into different technologies, you know, like we're talking about AI. But we've also got customers that we're talking to around their investments in quantum and hopefully it won't be too long where I'll be able to tell people that we're the home of the, you know, one of the first quantum computers that's in production kind of state. And the magic about that, and a lot of people, just to ruin someone's question, is that, you know, quantum is an additional layer to our offering. It is different to classical compute. It won't replace classical compute, it'll be an adjacency. That's the lovely thing about our business. Things just, new technologies just keep layering up on top of this amazing foundation. Amazing foundation is just the data. Lewis was talking about oil, and I was just thinking about it up the back, and it is true. Like data used to be, you used to collect it and hold on to it, but you didn't really do much with it. You know, nuclear submarines are big news at the moment around the world, which, you know, perversely is good for data and good for organizations that have such organizations as clients. A tiny, like a teaspoon of uranium can power a nuclear submarine almost indefinitely. Like, just think about that and how quickly, you know, gas is burnt or so oil is burnt. The way I think about it, and we've only, haven't even scratched the surface, is what can that data be used for, and what additional applications can that be applied to? I think it is like uranium, in that it's almost unimaginable what the future holds. What it does mean is more data, more compute, and all of those things. The organizations like ourselves that have scale and can continue to invest will continue to ride this amazing tsunami of technological progression that we're all the beneficiaries of, and the wonderful, you know, quality of life that we enjoy as a result. Sovereignty, you know, speaking to the Prime Minister yesterday, he's so excited about all of this infrastructure coming to New Zealand. It's no different. Our biggest customers in the world, they're saying to us that there's 30 countries that want sovereignty that we're not in today. You know, you can see there's so many increasingly global opportunities in this space. The sovereignty element, the really high security approach to securing the most important data and the most critical systems, there's not many people that have the experience that we do and that we've grown up with that, natively. We're really well positioned, you know, going forward, to surf, you know, these uncertain, you know, geopolitical times. I think we're, you know, in great shape and, you know, again, sustainability, we'll be working really hard on that. We've got great stories already, and we'll continue to foster that, and you'll hear more and more about that as we go from being, you know, Australia and New Zealand's best-kept secret to something a little bit more. Still not, you know, we're still not gonna be, you know, One NZ, in terms of, you know, that sort of mind penetration, but we'll be getting there. The customers. This is what we're doing in the next 12 months, and I'll come back and re-report on this. It's pretty boring, actually. It's more of the same, but faster. You know, and in a rising tide, everyone's going, "Well, your job's easy," because like everyone loves data centers, everyone wants data centers, everyone wants to finance data centers and all that stuff. I'd challenge anyone to try it. It's not that easy. You know, the competition's great because it makes you fitter and stronger and all those things. In a rising tide, all boats float higher. No doubt, all boats float higher, which is great, you know? It's great for the, you know, comparative valuations and all of those things. Some boats have bigger spinnakers than others. We've got a really big spinnaker, which is based on not fluff, you know? It's really a lot of substance and a lot of reference ability around what it goes into the size of our spinnaker. We are getting more market share than our competitors, and we don't see any pause in the growth story. I hate to surprise everyone, but it's a very boring story. It's nice and solid and reliable. We're talking about people, about infrastructure. I remember 'cause data centers used to be, you know, dodgy, risky real estate investments. You know, real estate investment trusts and, you know, all of these weird constructs. I can't think of anything more core in terms of infrastructure than data centers and digital infrastructure today. You have a pandemic, the country locks down. No one needs an airport. Sorry, airport people. I tell you what, they need their data centers. They need their data centers. They need their telco networks. You know, all of those things. If you think what's really important when push comes to shove, and people laugh because it's true, but people laugh because it's not so long ago that if you said a statement like that, people think you're, you know, a narcissistic megalomaniac, you know? It, you know, it's true. We'll continue to grow, hopefully at the same rate, which we plan to. The finance situation, we're so well positioned with the various capital arrangements we have at our disposal from multiple jurisdictions, more capacity than we actually need currently. We're in good shape, so that's not gonna hold us back. We've got a wonderfully supportive group of shareholders that are along for the ride. We've got incredible approach to development. Again, this is so important to understand that we... The development world and construction world has gotten really hard. Everything costs 30% or 40% more. For most people, because most people are really hands-off. We'll let the general contractor or some tier one construction firm build all that, and they just do it all. Then, you know, we pay the bills and argue over variations. We don't do that, and that's why our costs of construction haven't gone up 30%, 40%. 'Cause all day, every day, we've got the boots on, the helmets on. We're in the trenches making sure our developments are the highest quality. We're sharing risk with our construction partners, so we're not paying 30%, 40% risk premiums. and we intimately understand what's happening on our sites each and every day. As a result of that, we're faster, higher quality, and we deliver on a per unit basis cheaper than any competitor, which is remarkable. You know, Max is here today, who runs all of our developments, and he's done an outstanding job. And we're here every day. Our competitors, some of our customers are struggling with this whole development challenge and the cost increases and resourcing issues. We see that, but we don't experience it because of our approach. And that's really key because the thing that's gonna stop you from invoicing your next 100 MW of data center capacity is building 100 MW of data center capacity, which is good. All in all, it's going pretty well. We've got a lot of capacity under construction. You can see the extensions in Auckland, 6 MW in both locations. The new data center, 20 odd megawatts in Melbourne. We've started the design, that's not included. You can see on the far right there, that big, empty, multiple football field size hole, which is all flat and ready to go. That's more like 100 MW of data centers that we're pretty keen to build as soon as possible. Plenty happening. We'll be busy. You know, you can kind of see the trajectory. You know, my hope and aspiration is to maintain that for the foreseeable future. You can see operationally, people-wise, all of those things, they're the focus of what we're going to go for. I'll just pop that back and so people can have one last soak it in. Then we'll go to questions. Remember, Jason, I'm thinking something nice, Jason. What would you suggest? Say a French word again. Just give me. Jim Afeldreich. You know. You should've printed it. French. French. Okay. It's not very approachable of you know. I would've thought of some sort of Otago top end, you know, Pinot or something from Waiheke, maybe Syrah, Man O' War, you know. Should we go to questions? Ugh. How do you protect the secret sauce? Are there others out there who are, you know, upping their game and maybe not getting close yet, but on the trajectory? It's really hard, because our secret sauce was developed through extreme suffering and poverty at the start of the journey, and also from the fact that we came from a different space. It's kind of been built in naturally into the DNA, and I've passed that along to the management team today, and we live and breathe that every day. Every dollar is your dollar. Are you gonna spend it or not? Whereas the bigger organizations, they kind of just work off a global kind of design and global approach, which is great when everything's smooth and supply chains happen just in time and all of those things. If there's any disruption or any sort of left field challenge, like, you know, the ground conditions are different or whatnot, then suddenly that falls apart. You can't build these facilities over teams. That's kind of like the global, you know, view. You've gotta be in and amongst it. We do do things. We don't have all of our designs don't go to one general contractor. They have, you know, the civil and the base building design, but then we separately subcontract all the subsystems. So no one actually sees end to end all of our... How it all fits together. Because we come from a security background, we're really tight with our information security around, and nobody gets access to that that doesn't, as you know, doesn't have to see it. So we're. The best they say that the best entrepreneurs are incredibly paranoid and 'cause someone's gonna steal their idea. I'm that paranoid, like you wouldn't believe it. We're really focused on protecting it. That's why we keep things very tight. That's also why we incentivize the really important people the way we do so that they're completely aligned with the shareholders and myself for the longer term. That's the leading question, by the way. You're leading. You've got the microphone, sir. From a development pipeline perspective, in the context of your development pipe, how do you look at the trade-off between energy and electricity transmission losses and costs balanced with close to customer that Lewis talked about before and latency? Yep. The electrical delivery side of things is incredibly challenging. It used to be that you would get... You would say, "Oh, we need, you know," in those days, "two or three or five megawatts of power," and the network provider would come and install it for free, and away you go. Now, it would happen in about three months because that was in the days where, you know, they got a return on every dollar they put out the door and, you know, they put lots of dollars out the door, 'cause it was all locked in by the regulator. Whereas today, it can take you two or three years to get the power that we need. What you've got to do is... Again, this is why scale and track record is really important, because a lot of people talk a big game, but not many people actually do what they say in this space. We've got relationships with all of the large network providers, New Zealand and Australia, and we're talking five years ahead of what we think we'll need. We're co-investing in places to ensure that the energy reticulation or the power reticulation is optimized around our sites. We're buying land years in advance before we know we'll need it, but we know kind of where land will be required, and so we're working really proactively. If you do proactively, then you can minimize and optimize all of the challenges that you've just alluded to. Thanks. Over here. Hi. In your discussions with the Prime Minister. Yes, she is. In casual discussions. Very important. You know. Did you, did you get any hope for the consenting process? Uh- Do you- Well, I did actually, because he made a point that he's from some area called the Hutt region or valley or something. Apparently there's a lower and upper one. If you are on either side, like 50 meters apart, it's a completely different process. He said, "Well, that's madness," you know. You know, in a country of, you know, 5 million people and about 10 billion sheep, I think it's really important that you actually look for efficiencies. He talked about efficiencies all day, all night last night, about we've got to remove all these inefficiencies in our systems. It wasn't just around consenting, but that was kind. He's absolutely right. Like, you know, little pockets of areas in New Zealand doing things differently. It's the same, like there's only 25 million people. I'm about to take my sons to play cricket in Delhi, and there's 30 million people there, like in one city. They do things in a certain way for 30 million people, so why can't we do it, you know, here in a consistent way, for everybody? I actually had, like, high hopes, because I really enjoyed, everything, most of the things that he said. Look out, drum roll. No, this is not winning any bottles, I can tell you that. Yeah. You had. He's already drunk all the French ones. You put something up on your slide before the last one, which said, "Explore additional strategic growth opportunities aligned to CDC's core offering." What does that mean? Yep. If you look at... Well, it could mean anything really, you know? It's just hopefully. Are you going to buy something? Hopefully it makes me look really smart and thoughtful. No, no. What that kind of means is that when you have the momentum and the horsepower and the customer base that we have, more opportunities seem to emerge, whether that's in different geographies, whether that's with regards to development, support, development help in different places or indeed adjacencies. When I mean adjacencies, we have sold, you know, power and cooling for a long time. Most of the data centers that we compete with, maybe some of them, maybe that's 50%, 60%, 70% of their revenue, but it's not 100%, and the difference is made up through, you know, networking and different services and things like that. That's the exciting bit for us, is that to date, I think 1% of our revenue is around networking and other things. We've really, just because we've been so busy building buildings and, you know, keeping an eye on things, that we haven't really explored a lot of those adjacent strategic opportunities. Having said that, again, other jurisdictions, other. In Australia, New Zealand, and elsewhere are on our radar all of the time. We're 100% focused on our core business, which is what we've discussed today. If something was to come along that was too good to say no to, well, you'd be mad not to in a world that's becoming increasingly globalized. That's good. That was a good question. Yeah. Do you think so? Yeah, yeah. Greg, I suppose we're seeing like a lot of the hyperscalers report cloud revenue growth, which has been declining in the most recent results. That's probably like a lagging indicator. I suppose I was interested in your views on the leading indicator, which I suppose is just the reservation queues for the hyperscalers on some of your data centers. Yeah. Kind of what's happening with that. Yeah. I like you and sitting there amazed at sort of the nervousness in the world around the big technology providers with the amount of, you know, layoffs there are and, you know, all of those things. When you actually look at their end state financial results, they're pretty amazing, and you sort of think, "Well, you know, what's really going on here?" All I can see is what people are talking to me about, and they're not talking to me like things are slowing down. If anything, with new technology coming over, that doesn't mean the old technology goes away. This is additional requirements. If anything, there seems to be more in the pipeline and more opportunity coming through the industry than less. I think things will ebb and flow over time, and I think we might be for some of the operators. I think those some of the sort of the cloud revenues, perhaps what you're describing is some of the more consumer-facing organizations rather than the big, beefy, hardcore, 100% reliable organizations that deal with government and deal with critical services for business and other things. Perhaps some of the consumer-based organizations are struggling more because, you know, the cost of living and things impacts on consumers acutely. That's not what I'm seeing in terms of pipeline and future growth opportunities. I'm thinking how do we gear up even more to move faster? That's kind of what I'm thinking. Yeah. Because most consumers are buying. Yes. The contracted weighted average lease expiry, which is counterintuitive, continues to grow, which is remarkable. Okay, one more question at this one. Eddie. I haven't got an inflation question. Don't do it, Eddie. I've been preparing for this two weeks. Thanks, Greg. Did I hear you right when you said that 10 nations had approached you for a sovereign offering? How does that actually work? No, no. What do you bring to the table? What I said was the reason New Zealand is exploding is that New Zealand demanded, not demanded, but requested, sovereign capability, and then they changed regulations around banking and other things so that the data had to be onshore, which meant that to service that data, capability had to be onshore. You know, it's one of the reasons we're here and the business is going for gold. That notion in a post-pandemic world where when push comes to shove, everyone's on their own. A lot of nations have picked that up. Some of our largest, which is exactly what I said, some of our largest global customers have requests in from more than 30 countries around the world that are also requesting, like New Zealand, a sovereign onshore, compute capability for their country so that they're not dependent on information supply chains which could be disrupted in some end-of-day scenario. I'm gonna sneak a second entry in. The 200 people that you've got, always interested in people. I think you said you're going to double your capacity to 500 in the next few years based on what you've got on the runway. Double the capacity? Yeah. What happens to the 200 people? Can you do it with that number? We flog them to within an inch of their lives. You know? No, no, no. Operational leverage is a wonderful thing. You know, you can double the size of your data center business, but it's crazy, like the revenue per unit, per person type of metrics, because we have machines that do all the work. So you don't actually need tons more people to double the size of your business. We might go to 280, not 400 or 450 to double the size of the business in terms of capacity or revenue, which is why it's a infrastructure-like asset. Okay. Do we have a winner? What do you reckon, Jase? You choose, mate. You choose. I really like this bloke. Actually, I'm gonna give it to the first question because you were bold. Like, 'cause most people are nervous and are nervous to ask the first question. I was worried I wouldn't. You were up there, so. Okay. Way to go now. The gentleman with the remarkably nice hair. All right. Thank you. Cheers. All right. right. I'm off. He's off to Delhi now. Now he's gonna run the. Thank you, Greg. Always informative and always entertaining. Now we're moving on to actually our last presenter, who's taking instruction at the moment. It's our host, actually. I'd like to ask Mr. Jason Paris to come forward and talk about his new name, his new business. Welcome. Thanks, Lesh. Kia ora, everyone. There we go. Welcome to Vodafone New Zealand. Soon to be One New Zealand. I think I've said this before, but it's important for me to repeat it every time. I am your personal account manager for you, for your family, for your friends. I think I've given out my email address every single time. Jason.paris@vodafone.nz. You can now use jason.paris@one.nz. The best way for me and for the team to understand what is happening in our organization, good and bad, is to hear it firsthand. Genuinely, that's an offer to be your personal account manager. I offer that to everyone, so don't think you're especially special. Although I did say earlier today on social media that the people in this room helped bring and enable Vodafone to come back to New Zealand and focus 100% on Aotearoa. Some of the results that I'm gonna talk you through today are reflective of that ability. On behalf of our customers, thank you for supporting Infratil and therefore supporting us. I do send my email out a few times a year to our entire customer base, most recently it was about the One New Zealand change, where I said that I was the incoming CEO of One New Zealand. My favorite response was from Margaret, who said, "Congratulations on your new role. Thank God they've got a new CEO because the last one was bloody useless." Margaret and I are now on speaking terms versus email terms. She is a very loyal customer still, and when we had the conversation about all the things I'm talking to you about today that we have achieved, I reckon she's a customer for life. This is our pretty boring play on a page. The name is changing, but the strategy isn't. That's because the strategy is anchored in being the best at what our customers value the most. It's that simple. A lot of the themes that you'll hear from me are similar themes to what you've heard from Greg. We are benefiting from significant demand for our products, for our networks, and for the applications that run on them. Our customers want us to make sure that we provide the most secure, the most resilient network infrastructure. Greg's building the data centers. We build the pipes to the hyperscalers, and we have a relationship now with every single hyperscaler where we are providing that pipe. It's up to us to make sure it's secure, it's resilient, and so that not just that data, but the applications that that data enables are running on the most secure and resilient network. There's a lot of technology choices out there. People get confused. Doesn't matter how sophisticated you are or what segment you are, there are lots of choices. Having a partner like One New Zealand that simplifies those choices down by aggregating the best from around the world and making it easy for you to run your business or to run your life is another strategic advantage for us. When you do need some advice, whether it's about the next three and a half thousand dollar handset or how you migrate from your antiquated private cloud infrastructure to public cloud, then it's our job to be there to help you when you need it the most. If we do those things, we provide brilliant connectivity and resilience. If we make sure that it's really simple to use and buy those products, and then when you need advice, we're there, we win. The areas that we've been focusing on winning over the last three years have been in post-paid mobile and ICT and wholesale. No surprise, when you focus on three things, you normally deliver those three things. That's showing through in the results. We do have one awesome business. You've heard me talk about NetCo and ServCo before. We have completed a very successful infrastructure transaction where we sold our passive mobile towers to Fortysouth, now one of our biggest partners. We held on to the competitive advantage, which is the active part of that network. What remains is that active network, but also a reputation for being a leader in providing the best technology to this country first. 2G, 3G, 4G, IoT, and increasingly a focus on 5G and what that can enable as well. Again, around that security, around resilience, around private networks. That investment means it's showing up in customer experience. We are New Zealand's independently awarded best mobile network. Under Vodafone global ownership, the computer did say no for about five years when they were going through a series of transactions for hoping to exit this market. With new owners who are very aligned on long-term value creation, we've been able to invest the capital to make sure that we have upgraded our networks, especially in the regions. We're being recognized for it. The pathway is still being accelerated. We talked to you about our plan for upgrading 4G and 5G. That is on track. We're on track for 3G shutdown and to refarm that spectrum to deliver even better, faster experiences from a 4G and 5G perspective. It's important to note that the value creation isn't just in mobility. It's also in our fixed assets. For those of you who keep a close eye on our industry, you'll know that there's a lot of international interest now on FiberCo type conversations, and we believe there's ongoing value uplift, especially for us, given that we are the second largest owner of fixed infrastructure in New Zealand. We're perfectly positioned to evaluate the options and infrastructure. We're a scale infrastructure business. We're also a scale services business with over 2 million New Zealanders who trust us to provide them with mobility and over 100,000 businesses that trust us to provide a range of services. Yes, fixed services, but increasingly in all areas of ICT, whether it's security or contact center, or clouds or IO or IoT. The results that are coming through here from a scaled service provider are exceptional. These results are not by accident. They are the result of deliberate moves that this organization has made over a period of years to create momentum. In this organization, in this industry, momentum is hard to get, but it is also extremely hard to stop. We are very, very proud that we are the fastest-growing in post-paid mobile. Eight of the last nine quarters, we are outperforming the market. We're also the fastest-growing in ICT, albeit off a slow start and a lower base. The beauty of that is, again, we get to partner with brilliant organizations like CDC that don't have any incumbents dilemma, that can only do the absolute best for their customers and use the hyperscalers who are much better than anyone else in New Zealand at providing the technology future. We continue to have the best IT and customer service results that we have ever had. That basically means that our applications work and that if you need to get some help, you're waiting less time to get your call answered. When you do get answered, you get answered by an expert who can sort your issue out first time. We're doing that by removing complexity from the business, which is great for our customers because they have less need for service. That also reduces our cost. We are a lean, mean operating machine in this organization now. The first couple of years, you heard me talk about operational efficiency, and that was driving a lot of the gains that we were getting in the market. We've now got the perfect scenario of operational efficiency being sustained, further opportunity available, and top line revenue and margin growth. Both lines are running to deliver our EBITDA and our cash results. Reflective of our owners, they invest in assets that are essential for the communities that they serve. It's not just about the technology that we provide, it's what that technology that can enable that is also very important. We're very proud of our record around using technology and our privileged position as being one of the most important and iconic organizations in Aotearoa, that we use that technology to attempt to halve the number of disadvantaged youth in New Zealand, and at the same time, ensure that New Zealand is one of the greatest places on the planet to live and work for the next generation. We take our position in terms of how we impact the environment very seriously. One of the best kept secrets is the amount of money that we have invested and continue to invest into New Zealand around halving the number of disadvantaged youth. Also, we've got a Toitū review underway aligned with all the things you've heard from Infratil and Morrison and what you would hear from Brookfield around the responsibility that we have around sustainability. I also had the privilege of talking to the Prime Minister last night. I have to say, the experience from Greg, I only had about 10% of the conversation. He had about 90% of the conversation. One of the things that the Prime Minister did say was how delighted he was with the industry and Vodafone's response to the devastation that we had in Auckland and in the east coast of New Zealand. I'm extremely proud of the way that we responded, prioritizing our customers and our people. We think we did a very, very good job. That all comes down to an awesome team. You know, you're great in a crisis, but we're now becoming not just great in a crisis, but business as usual. The foundation of any organization is the quality and the capability of the people in it, and how passionate and clear they are around where you are, you are heading. We use a tool in this organization called the Organizational Health Index. It's used by most large, high, large corporations around the world. It's called OHI. We completed this piece of research about three years ago, and then we did it 18 months ago, and we've just completed it again in the last month. We've moved from middle of the pack to the top 25% performing organizations globally. Our ambition is to get into the top 10% of organizations globally. There's a very clear link to our organizational health being an early indicator of future commercial performance. The results that we're seeing in terms of the capability of this organization to execute through OHI gives us a lot of confidence that the momentum that we've achieved today is going to be very sustainable. The other highlight around an awesome team is it's not just the people that work in this organization as employees, it's also the partners. We don't have the arrogance to think that we can build any better than CDC or develop a application better than Microsoft. All of these partners are extremely important to the future for our customers, and therefore, they're extremely important for our future. Vodafone continues as part of One New Zealand to be an extremely important partner. All the products and services that our customers love today will remain. All we lose are the things that our customers don't. Vodafone is just one partner along with Amazon, along with Microsoft, along with Google, along with Harvey Norman, along with CDC, along with Defend. All these organizations make up the One New Zealand portfolio now. Again, another reason for the brand change. We are not just about mobility, we are about all leading technologies. That kind of strategy and momentum and capability within the organization leads to results. We've just, you know, I'll put in a few highlights here, but again, around those themes of mobility, around ICT, and around wholesale. The three areas which are the most profitable and that our customers love the most, we are winning. As I mentioned before, fastest-growing in post-paid connections. That's not just about connections, it's also about margin. Yes, roaming has come back even faster than we expected, but actually a lot of our improvement in mobile performance has been driven through ARPU growth, through pre to post migration, and through upsell. ICT, again, the fastest growing in the market with our partnerships with people like CDC, with our acquisition of Defend, with our posture as New Zealand's leading IoT provider. With our credentials and Amazon Connect as New Zealand's leading certified partner of that contact center platform, leaves us in a very strong position and the enterprise team are doing a brilliant job of increasingly selling more services and creating deeper relationships with our customers. You can see that ICT attachment rate, again, is industry leading. Wholesale, which are longer term contracts. We are getting some growth now. We've built the MVNO platform, and we're starting to expand the wholesale market. We're very active in that. We wanna make sure that our networks are the highest utilized in the market, not just by our own brands, but by others as well. As I mentioned before, our partnerships with hyperscalers, providing that resilient, secure connectivity to the hyperscalers is in our core DNA, and we are partnering in the provider of choice to all of them. Again, setting us up for the explosion and what those use cases are, and however they are, they come about through the use of data. They have to have a network to run on them, and that's where we are best positioned. A little bit not as boring as Greg's in that we are gonna exceed our guidance. We're very proud of that. Our guidance doesn't include any impairments or the costs of the Telco transaction. It has been driven by three things. In a small way, a kind of a reclassification of IT from OpEx to CapEx. In a big way, roaming returning, and in a big way, our market leading mobile performance. More customers at a higher ARPU have driven that increase in market market guidance. You can see that in the 8% growth under mobility. That's been driven not only by our our performance in acquisition and and in also in ARPU, but we have our lowest ever SME mobile churn in Vodafone's history. When I started in this industry, we were sitting at around a churn of, say, 17%. We are now less than half of that in this business. We are doing a brilliant job of not only attracting customers to our business, but when they're here, making sure that they love us so much that they stay. From a consumer and SME fixed perspective, back 11, seven of that is due to us getting out of Vodafone TV, an unprofitable product costing us too much. It was a margin loser. We knew that by removing ourselves from that market, over 100,000 customers, that we would cede some customers, but we're prepared to do that because it was the right decision from a simplicity perspective, but also from a margin perspective. The other 4% of the 11% is deciding not to compete in the commoditized consumer fixed broadband market. The winners in there are the energy companies who are growing at a faster rate than the incumbents because they're losing money on the acquisition. They're prepared to lose money on a broadband play to protect energy margins. That's their decision. We don't wanna do that. Instead, we've got flat ARPU, and we're prepared to cede a bit of market share to ensure that we're not putting unprofitable broadband offers in market. Different story on enterprise. We have fixed and ICT grew by 16%. I've talked about the momentum that we've got across all of those portfolios, but again, it's not a scattergun approach. We're very deliberate in ICT and exactly where the areas are we want to play. We are partnering with the hyperscalers. We are focusing on accelerated public cloud migration with partners like DCI, like CDC, like Azure, like AWS. In security, we're very proud of the acquisition or partial acquisition of DEFEND. We own 60% of that. It's on plan. It's integrated really well. We're basically just a massive sales channel to market for DEFEND. The worst case for DEFEND is for us to do anything to change anything that's made them already successful. We're just a channel to market for them, and it's going extremely well. I mentioned before our partnership with Amazon Connect. We've got a fantastic track record. In fact, New Zealand's best track record in migrating our customers off legacy contact center technology onto Amazon Connect or Genesys PureCloud. Again, in IoT, Lindsay and her team are very specific around where we wanna play in that space, which is around a mix of IoT connectivity and then also the aggregation of the insight and the data that they would have. We have decided we're not gonna be in that device monitoring part of the IoT business. Again in wholesale, I mentioned before 4%, 4% growth. That will continue to grow. We're increasingly confident in our wholesale trajectory on those long, long-term deals. From an OpEx perspective, back 9%, but underlying it was flat. There are two one-offs in there. One is the brand, and the other one is our retail store buyback. I think it's in the notes somewhere. We're managing to negate the high inflation that everyone is experiencing as costs coming into the business by again, running the business very profitably. That flows through our EBITDA. As I mentioned, the CapEx, that's a half on half difference, as you can see there, really on non-recurring spectrum costs. Any more questions on that, if you wanna get through it. We've got Jeremy, our CFO. We're very, very proud to have exceeded the guidance based on trading momentum and we're feeling really, really good about how the organization is positioned moving forward. One of the anchors of our move moving forward is gonna be simplicity. It's one of the kind of four pillars of our strategy. We're still focused on making sure that we are the most simple, most simplified telco within New Zealand. I've talked to you three or four times about the IT program called DX. We've pivoted. That didn't work. There's no such thing as an off-the-shelf IT solution, especially when you try and customize it as soon as you get it. We've pivoted to our existing vendors. We're still as ambitious as we were around bringing forward of simplicity dividends, both from an experience and a cost perspective. They're still banked into our corporate plan. How we will realize them is with our existing vendors like Salesforce, like Oracle, so upgrading our existing IT through our existing vendors versus a big bang approach with a new vendor. As I mentioned earlier, our existing IT has never been more stable, the team's done actually a great job of squeezing more out of our existing IT than we thought was possible, three years ago. Again, that's flowing through into our trading numbers. Then in business simplification, we've got our TO office, our transformation office, and they're focusing on four things. Product rationalization. We're already making big strides and moves there. We've migrated all of our consumer mobile customers onto a single stack. For those of you who have heard me before, Vodafone and One is a mix of Telstra and Saturn and Clear and ihug and WorldxChange. None of that simplification has been done. We've still got some of that complexity in the organization, but we're now moving our customers onto our best existing stack, and then we're upgrading it again with Salesforce and with Oracle. Improved digital experiences, as you'll be aware. Everyone is talking about AI and robotics and automation, and we're doing that here. In fact, yesterday I had ChatGPT give my senior leadership team speech on my behalf to the team. Just quietly, I think they enjoyed ChatGPT more than they enjoy my normal speeches. Again, you know, a big focus on simplification has never been more demonstrated by the public commitment that One is going to give to the country. It's not just a name change. It's a business change around one click, one call, one bill, one product, one process, one meeting, one decision maker. It's not just a business driver. It's a cultural driver in the organization. That's really leading to the benefits that the brand change will give us. Yes, it's gonna give us a cost advantage. It means that we're paying less money overseas to our group and more money is staying in Aotearoa, enabling us to invest in all of those things that our customers value the most. Secondly, it'll improve our mobile trading performance. You can see with the customers that we've got an existing relationship with, we are upselling them. We're getting higher ARPU. We're reducing our cost to operate. We're getting better margin. As many of you will know, over the last five or 10 years, any telco has pissed off its customer at some point in time, and everyone has said, "I'll never consider them again." It's a funny thing, I experienced this when we did the Telecom to Spark. Soon as you say you're a little bit different, you open up a conversation to see if you really are different. The pressure on this organization is you better be different and better be absolver when you have that conversation. Again, based on our metrics, whether it's network or service or value, we are very, very confident that we are well positioned. There'll be hundreds of thousands of Kiwis who previously were not gonna consider Vodafone that will consider One, and we are gonna convert them, and we are gonna keep them. Lastly, you know, the ICT growth. Vodafone is known as a mobility leader. It's how it entered and disrupted the New Zealand market. It's a foundation that we don't want to leave behind. As I mentioned before, Vodafone is just now one of our partners. Microsoft, Google, Amazon, DEFEND, Palo Alto, Nokia, they are all part of our partnership strategy now. All of the world's leading technology services we provide on New Zealand's leading most secure and resilient networks. Again, the One New Zealand position will open up a range of conversations that we haven't previously had with our existing customers and new customers around ICT. I'll just finish by saying, been in this industry for a long time. Been in this organization for now, you know, four and a half years, and I joined kind of at the same time as Brookfield and Infratil did. In fact, I think my first month as CEO, one of my first meetings was traveling overseas to meet the prospective new owners. I remember finding out a lot about this organization and realizing that there was a lot more risk, but a lot more reward than any of us anticipated. I think getting our backyard in order, first and foremost, focusing on what our customers value the most has been a winning strategy. Now we're seeing a lot more reward than risk. In this industry, momentum again is hard to get, but it's also hard to stop, and we're feeling hard to stop. I'll stop and pause there. A lot of information pretty quickly, and then go to any questions. Just conscious of time as well, Jason and Flesher. Yes, we forgot. Actually, there's a present for all of you. We have got a One New Zealand branded power bank. Take that away and make sure that, you know, when you or your teenagers or someone's running out of juice, you'll have One New Zealand to thank for ongoing connectivity. Yes, it is the Warriors year. We have five Warriors jerseys to give away. I said to Connor it should be the people that don't ask a question that should get one. That's 155. Yeah, I know. We've only got five of them. If you are a massive Warriors supporter or fan, Connor's at the back there. You can have a chat with him. Jase, just looking at the numbers, I was hearing the margin was around 26%, I think? Yeah. About half. Can you give us a bit of color when you think you will get to that 30% target, which I think was the approach? Gonna give guidance in May. All I would say is, we've got momentum as we exit this financial year based on cost and also on trading. We're excited about our exit point. Stable market structure, extremely competitive. We're setting ourselves some ambitious but achievable targets that we'll talk to you about in, in May. Backing away from that number and that target, you know, we're still focused on it. Just to follow up. When you're doing your kind of 2024 budgets, what are you assuming for the kind of economic impact, say, on the consumer? What's your assumptions around that? Not a lot. We're not seeing it, actually. We're probably a little bit more conservative on the enterprise segment than we are in consumer. If you look at our value offerings in market across any products or portfolio, we think we're there or thereabouts. If you need connectivity, which is becoming an essential service, we're just not seeing it. We put pricing up a couple of times through the year. Churn didn't move. Quite a loyal customer base. Even in enterprise, we were probably being a little bit more conservative because of the economic conditions and business confidence. We think it's temporary and as you know, Greg said before, and you'd hear if Lindsay was up here, the smart businesses are still making investments and focusing now on the long-term gains they can get from making those big technology moves. We're still having those conversations around public migration, contact center replacement, the importance of security. IoT is a game changer for businesses, and those conversations haven't stopped. Sorry. Since their merger, are you seeing 2degrees as a better competitor in any segments? We see the merger as market positive, an even more competitive but stable market structure, which is excellent. We're seeing 2degrees be most aggressive in the SME segment, mainly driven through price. As I mentioned before, lowest churn on record in SME. The relationships and the proposition that we've got seems to be able to counter any tactical price offerings that 2degrees might attempt in market. That's where we're seeing it most competitive in terms of offers, but not impacting our business. Neville, last. I'm not sure there's a worthy question for the last of the day. It is a detailed question. The fiber or the hybrid fiber network in Wellington, legacy network, gradually people coming off. Can you talk to sort of what the timing and sort of cost of dismantling that might be? Or would you have an alternative use for it? Yeah. We think that the ducts are extremely valuable 'cause they're very useful. Then you've got a range of options in Christchurch and Wellington around whether you upgrade with existing HFC technology or whether you upgrade to fiber using those same ducts or whether you shut it down. We've got a range of options that will be part of our Fiberco evaluation over the next kind of 12-18 months on how HFC plays a part in our Fiberco opportunity or not. All options are on the table at the moment, and we haven't made a definitive decision. The overhead lines, that's part of the same discussion as well. It is ...as [Uncetain], yeah. Correct. If we were thinking of dismantling cost, I mean, what kind of ballpark would we be talking about there? We haven't put a number on it because it's just one of many options that we need to investigate. My personal preference is that's the least likely. I still feel like it's a strategic asset of some benefit. Again, we need to, we need to see if that's how it plays out. Thank you. Okay, we're gonna call it a day there, so thank you. Connor, you got some jerseys. That you're handing out on the times. Got a few questions. Thank you. Thanks, Jason. Yeah. Thank you. Great. Well, let me give me a couple of minutes, and I'll try and wrap it up with a couple of thoughts and a few thank yous. I was standing there wondering a couple of things. One is, I said at the start of the day, this is your sort of one chance of the year, right? To see the management teams we get to see, almost every day. It's hard, but not be incredibly impressed, I think, how amazing they are. Hopefully you got a flavor of that today. I certainly did standing here listening to them. You should hopefully get a sense that, the standard for just existing in an Infratil or Morrison & Co. portfolio is actually really high. It gets higher. You're seeing the outputs of that today, right? Is there a better renewable energy developer in Australia and New Zealand than Deion Campbell and Clayton? Like, I challenge you to find a better one. Is there a better team in the North America, biggest market in the world? I challenge you to find a better one. You get to talk to them here, you know, Greg, Jason, one-on-one once a year. So hopefully you get a flavor of that and why we feel bullish. I should say, you know, the people who aren't on the stage today, you should get exactly the same feeling, and I bet you will if you talk to Matt and Jenna and his team, and David and his team, and actually Brett, who's on holiday. These are leaders in their industry with long-term visions for how their businesses will thrive, under our ownership with a long-term orientation in an ever-changing world. I felt that. I hope you did too. I talked at the start of the day about the opportunities we see to just continue to invest in the things we're already doing, and you would be missing the point to think that meant doing the same thing we did yesterday, tomorrow, but maybe a little bit faster. You should have heard today that actually, what it means is using the base of what we've got, which, the benefits of which are not always obvious, like the flexibility Greg talks about in his data centers, which no one else in the world has to the same degree he has, or the fiber footprint Jason has, or, you know. The list could go on to address things that are definitely going to happen in our sectors in a way that should continue to meet the return on capital, expectations that you saw in that box build-up. There are many opportunities, and it's really our job to make sure the individual businesses set themselves up to address those. The other part of our job is to pick the ones that we think offer the best risk return and back that. I think one of our real advantages as Infratil is that we're not only focused on one sector. We get to compare and contrast similar but different sectors. Actually as Morrison & Co, we're looking even broader, right? At a whole heap of things that don't fit Infratil. We do have really useful insight on which horse to back, and it won't be all the ones in our stable all the time. As Vimal said, "Some things are on, some things are off." The good thing for us is we don't have to go into one of them when it's off because it's not everything we do. We can move to something else. Management teams we've managed to work with, the long-term vision and our flexibility, I think continues to be a source of real advantage and value creation, and actually, I think quite a unique proposition in this market. That was my wrap-up. A few thank yous. I mean, thank you all for being here and being here for the afternoon as well. It's been amazing to get your questions and to see you all in person. Thank you, Jason, for hosting us. Thank you, Sharon aend Matt, especially for putting all of this together and last night as well, which went amazingly well. Please give them a hand. We'll see you again. Actually it's weird being up here without Philippa. Where are you? She is definitely my partner in crime in this, so we're never doing this again, by the way. You're gonna go up here. We'll see you together again, right, in May for full years, and we'll give you some guidance for next year. I think we've run out of time, so I'll let you go. If anybody wants to ask me any questions, I'll be over in the corner. Thank you.