Aurizon Holdings Limited

ABN 14 146 335 622

ASX Market Announcements

ASX Limited

20 Bridge Street

Sydney NSW 2000

BY ELECTRONIC LODGEMENT

12 October 2023

2023 Annual General Meeting Addresses

Please find attached the addresses by the Company's Chairman Mr Tim Poole and Managing Director & CEO, Mr Andrew Harding to be presented at today's Annual General Meeting commencing at 2.00pm (Brisbane time).

Kind regards

Nicole Allder

Company Secretary

Authorised for lodgement by the Aurizon Holdings Limited Board of Directors

T +61 7 3019 9000 | F +61 7 3019 0720 | CompanySecretary@aurizon.com.au

Level 8, 900 Ann St Fortitude Valley QLD 4006 Australia | GPO Box 456 Brisbane QLD 4001 Australia

Aurizon Annual General Meeting

Date: 12 October 2023

Chairman's Address

The last 12 months has seen the Aurizon team deliver several important initiatives.

Many shareholders joined the webcast for the Investor Day in July and also our FY2023 results presentation in August, where we shared detailed information on our business strategy and progress with these initiatives.

SLIDE: Strategic initiatives delivered

Here's a brief recap:

  • We successfully integrated the $1.4 billion One Rail acquisition into our business;
  • We sold East Coast Rail for $425 million, fulfilling a commitment we gave as part of the One Rail transaction. This sale also saw the purchaser assume all debt obligations;
  • We established a new Containerised Freight business unit after securing a long-term contract with Team Global Express. This is the largest non-coal contract in Aurizon's history; and
  • We built a business case - and a new growth opportunity - for the land-bridging of freight by rail from the Port of Darwin to southern capitals. We will take a staged, low-risk approach in developing this business.

These initiatives have been delivered by the business, despite a very challenging operational year for Aurizon.

SLIDE: Financial, Operational and Safety Performance

From an operational standpoint, prolonged wet weather affected many parts of our business during FY2023, particularly on the east coast of Australia. This was compounded by mine production issues for some customers, a major third-party derailment and labour shortages for critical roles such as train drivers. Collectively, these factors significantly reduced tonnes hauled by our trains and across our networks compared to the previous year.

As a result, Underlying Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for FY2023 of $1,428 million was at the lower end of our revised guidance range.

The Board declared a final dividend of 8.0 cents per share, 60% franked, which was paid to shareholders on 27 September. This took total dividends for FY2023 to 15 cents, representing a dividend payout ratio of 75% - at the lower end of our payout range. The dividend payout ratio is consistent with our commitment to maintain strong investment grade credit ratings during the current growth investment stage of our Bulk and Containerised Freight businesses. As a reminder, since FY2016 Aurizon has returned over $5 billion to shareholders through dividends and share buybacks.

The Board is pleased with continuing improvements in the safety performance of the Company, particularly in relation to potential incidents that may have serious consequences.

AGM 2023 - Chairman address

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There is also a significant program of work underway across Aurizon to support the health and well-being of our employees. This is important in continuing to build a healthy and resilient workforce, and appropriately supporting them in times of need. Andrew will provide more detail on safety and other initiatives in his address.

SLIDE: Strategic re-positioning

Returning now to the longer-termre-positioning of Aurizon. As mentioned, it has been a very productive 12 months as we have executed several key initiatives.

We see significant opportunity for growth in our Bulk and Containerised Freight businesses, and for continued high performance from our highly cash-generative Coal and Network businesses.

With the acquisitions we have made in recent years, Aurizon now has a national footprint with assets in every mainland state and the Northern Territory. We have more than 5,000 kilometres of rail infrastructure, Australia's largest fleet of rollingstock and a growing number of port and terminal assets.

Together with our highly-capable team, the Company is well-positioned to execute on our growth strategy. As we capitalise on growth opportunities in existing and emerging markets for the Australian economy, you will see new investments being made and contracts being secured with new customers in new geographies. Andrew will share some more detail in his address.

We all know this is a time of change for the global economy. The energy transition is driving demand for critical minerals such as copper, bauxite, nickel, lithium and rare earths. These are vital inputs for batteries and electric vehicles, solar panels and wind turbines, and telecommunications infrastructure.

Australia is rich in many of these resources and has the opportunity to become a leading global supplier of these commodities, in the same way we have developed world-class sectors in coal, gas and iron ore.

Likewise, we are seeing increasing demand for high-quality Australia food and agricultural products for export such as grain and phosphates. These growth dynamics are underpinned by Australia's proximity to the rapidly-growing economies and rising living standards in Asia.

SLIDE: Integrated rail-port supply chain through Darwin

Aurizon's operational footprint means we are well located to support the transport needs of these products moving to markets here in Australia and offshore.

This includes our newly-acquired rail corridor from South Australia to Darwin in the Northern Territory, which sits adjacent to more than 250 resource projects from exploration through to pre-production. Our railway goes right to the wharf at the port where we have a lease and a stevedoring licence.

This integrated rail-port supply chain opens up further opportunities for import and export traffic through Darwin, Australia's closest port for our Asian trading partners.

SLIDE: Regional visits

During the year, our non-executive Directors - including new Directors Tim Longstaff and Samantha Tough - have continued to get out into the business to meet our regional teams. We find this incredibly valuable in seeing operations first-hand and in being able to understand more about the business from employees.

AGM 2023

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We discussed and learned more from employees about that pipeline of opportunity for the new Bulk Central business in South Australia and the Northern Territory. Likewise in regional Western Australia, where our business is expanding to support growing exports such as grain and magnetite. While there, we travelled to the Karara Mine, east of Geraldton, to mark rail haulage milestones with our valued customer KML. Karara is the largest mining operation and the first major magnetite mine in WA's Mid-West. It produces a premium, high-grade concentrate which is less carbon-intensive during the steelmaking process and therefore is in high demand.

In recent weeks, we have been to Queensland's North and North-West - to Townsville, Cloncurry, and Mount Isa where Aurizon has a strong local presence. This is the corridor serving the Carpentaria Minerals Province - home to not only great reserves of copper, lead and zinc but also emerging new-economy commodities such as vanadium and high-grade phosphate.

Getting out to the frontline also re-affirms to me the high-level capability and assets we have in our Company; as well as the economic strength and significant opportunity that continues to exist in regional Australia. This is where more than 80% of our 5,000-strong employees live and work.

SLIDE: Closing remarks and acknowledgements

In closing, I would like to acknowledge the ongoing efforts and commitment of Aurizon employees in delivering safe and reliable services to our customers. The Company is fortunate to have such a dedicated and skilled workforce. I also thank Andrew and his senior leadership team for their work during the year, in leading strong operational performance in challenging conditions, while delivering on our strategic initiatives.

During the year, we announced changes to the Aurizon Board as we continue to renew and add diversity to our Board composition. Tim Longstaff, a chartered accountant with a 25-year career in investment banking, joined as a non-executive director on 1 June 2023. Samantha Tough, a lawyer with extensive experience in executive and director roles, joined as a non-executive director on 1 September 2023.

I would like to acknowledge two outstanding Directors for their contribution to the Company over many years:

  • Kate Vidgen who retired as a non-executive director on 31 May 2023 after seven years, and
  • Sam Lewis, here with us today for her last AGM before retiring after nine years on the Aurizon Board.

I thank Kate and Sam for their dedication, hard work and immense contribution over their many years of service to the Company and wish them all the very best for the future.

To you our shareholders, thank you for your continued support through a significant period of change and transformation. The strategic re-positioning of the business, supported by targeted investment, is providing Aurizon a solid platform for growth and success. The Board is excited about the pathway ahead and is committed to deliver on the opportunities before us.

Thank you. I will now pass to Andrew.

AGM 2023

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Aurizon Annual General Meeting

Date: 12 October 2023

Managing Director & CEO's Address

SLIDE: Introduction

Thank you Tim, and good afternoon ladies and gentlemen

I would like to build on the Chairman's comments and to share more detail on the work underway across Aurizon to grow and improve our business. This includes investments made to support growth in emerging markets; new contracts won by the business; and the significant work underway to decarbonise our operations.

SLIDE: Operational and safety performance

Firstly to operational and safety performance.

As the Chairman has detailed, our frontline teams experienced a challenging year with prolonged wet weather impacting our business and also our financial results. While we are disappointed with the reductions in tonnages and revenue during the year, our teams maintained their operating discipline and their focus on safety.

Safety is absolutely paramount for Aurizon, in protecting our people, our customers and the local communities in which we operate.

During FY2023, we saw a 2% improvement in the Total Recordable Injury Frequency Rate; a one percent improvement in the equivalent Lost Time measure; and a significant 56 percent improvement in the Potential Serious Injury and Fatality Frequency Rate.

Level crossing risk is one key area of focus for us at Aurizon, and the rail industry more broadly, with a range of measures in place and more initiatives underway. We are stepping up education and awareness activity in the communities where we operate, as well as advocacy and engagement with key stakeholders.

We are also extending our work to support health and well-being for our employees, including mental health initiatives. This recognises the benefit of investing in a healthy workforce and healthy local communities.

For example, we have supported the establishment of a network of volunteers qualified in providing mental health first aid. This network is now 160-strong in depots and offices across our national footprint. In times of need, you know you can reach out to a colleague, to have them listen and to help you access professional support.

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Aurizon Holdings Limited published this content on 12 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 October 2023 03:36:27 UTC.