Atlas Arteria Stock

Good day, and thank you for standing by. Welcome to Atlas Arteria First Half 2026 Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded.

Due to legal restrictions, we are only able to communicate directly with eligible security holders and investors with respect to the eligibility to invest in Atlas Arteria securities. Details in relation to the ownership restrictions that apply to persons in the United States and other U.S. persons that are not qualified purchases and qualify institutional buyers are set out on Atlas Arteria's website under U.S. ownership restrictions. If you are not a qualified purchaser and qualified institutional buyer, please refrain from asking questions in relation to our securities as we are legally restricted from answering those questions on this call.

I'd now like to hand the conference over to Mr. Hugh Wehby, Chief Executive Officer. Please go ahead.

Thank you, Amber, and good morning, everyone. Thanks so much for joining us today. It's great to be touching base with the market again.

I'm pleased to present Atlas Arteria's 2026 half year results alongside our CFO, Vincent Portal-Barrault. This is, of course, our first results presentation since the IFM takeover offer closed.

While it was a significant moment in our company's history and it resulted in material changes to the investor base, rest assured that our relentless focus on performance and value has not changed.

Today, I'll take you through the progress achieved across our business during the half, give you an update on the transition to the next phase in our relationship with IFM and share how we are thinking about our strategic priorities. Vincent will then take you through our first half performance in a bit more detail. And as always, we'll leave plenty of time for questions at the end.

So turning now to today's highlights. I'm pleased to say the underlying performance of our business was stable in the first half. Our operating free cash flow per security was $0.191, down 1.5% on the first half of last year. That result was mainly driven by unfavorable foreign exchange movements. And on a current -- constant currency basis, our proportional toll revenue was up 0.6% and EBITDA was up 0.9%.

We have reaffirmed our distribution guidance of $0.40 per security for 2026. And expect to pay $0.20 of that to investors in October. We made significant steps forward in our strategy to unlock cash flows at Dulles Greenway with some important developments on the 2025 rate case, and a positive piece of tolling legislation passed in Virginia.

In June, we were pleased to agree to the extinguishment of the put option held by our Chicago Skyway partner, Ontario Teachers since the original acquisition in 2022. I can confirm that payment was finalized on schedule earlier in August. That provided investors with much needed certainty that Atlas Arteria would not be compelled to acquire our partner share of this asset at a premium to fair market value.

On the sustainability front, we continue to make good progress. That's reflected in our MSCI ESG rating being lifted to AAA, marking us as a leader in the transportation industry. It's recognition of the work being undertaken every day by our people in the corporate team and on the ground.

So turning now to focus on the IFM takeover offer. On 27 April, Atlas Arteria received an unsolicited takeover offer from IFM, which at the time owns just under 35% of Atlas Arteria securities. Throughout the offer period, the focus of our independent directors, management and employees did not waver to maximize value for all security holders.

During the bid, the independent directors recommendation was that security holders reject the offer on the basis that it was undervalued the company and did not reflect an appropriate premium for control. This was supported by the independent experts conclusion. The offer period subsequently closed on 7th of July, with IFM acquiring around half of the securities it did not already own.

That takes its interest in Atlas Arteria to about 67%. IFM is now prevented from increasing its ownership of the company via the creep mechanism until early 2027.

Today, Atlas Arteria has approximately 15,000 investors on its register, including IFM and a number of other significant holders.

So while we are still working on the specifics of what our new security holder mix and IFM's increased ownership means for Atlas Arteria, our focus remains where it has always been creating value for the company as a whole, ultimately for the benefit of all security holders.

I wouldn't normally comment on board composition at a results presentation, but there were some significant changes in the period. At this year's AGM in May, Debbie Goodin flagged that she would not be standing for reelection beyond this term. This meant that ATLAX would begin a progress to appoint a new independent chair in due course.

The completion of the IFM takeover offer was a natural point for that transition to occur. So those succession plans were accelerated. Debbie retired from the Board on 7 July upon completion of the bid.

I want to thank Debbie for her immense contribution to Atlas Arteria. She joined the Board in 2017. And over that time, she brought enormous energy and commitment to the role for the benefit of all stakeholders and especially for our investors. On behalf of the Board and the whole team, thank you, Debbie.

John Wigglesworth, who some of you have met recently, has stepped in as Interim Chair, and the search for a permanent independent Chair is now well underway. This process is being undertaken by our boards and led by Fiona Beck and will consider both internal and external candidates.

So that leads me to our strategic priorities. The headline here is an important one. Whilst there are some areas where we have refocused our efforts, our strategy remains largely unchanged. Following the close of the IFM takeover offer, there are, of course, some new and immediate priorities we are working through. The first of these is team and stakeholder engagement. Having come through an extended period of uncertainty, we know that stability and continuity across the business is important for our team and our partners. My job and that of the leadership team is to regroup, recommit to our vision and motivate our team to deliver upon it. We are also ensuring that our partners know that our cooperative approach, priorities and values are unchanged.

On governance, we are engaging with IFM to discuss opportunities to work together for the benefit of Atlas Arteria to deepen understanding and share thinking and priorities.

While these discussions are ongoing, the principles guiding them are clear. The Boards of Atlas Arteria supported by an independent Chair of each Board and the majority of independent directors on each board, will continue to make decisions for the business with the interest of all security holders front of mind.

The third immediate priority is a strategic and operational review. This makes sense given the change in the investor mix. In the coming months, we will spend time with both IFM and other large investors, taking them through our strategy, gathering input and feedback and incorporating this into our regular strategic review cycle that we undertake with our boards.

So moving to the core business. There are a couple of areas where our thinking has evolved, and I want to address them directly. We have paused our exploration of brownfield opportunities and are focusing on attractive value creation opportunities within and around our existing portfolio. We are not pursuing a sale of either Chicago Skyway or Warnow Tunnel. Instead, we're laser-focused on how we help these businesses contribute additional value to the portfolio.

In terms of business and portfolio optimization, the majority of our French assets now have around 10 years of concession life remaining. Cash flow optimization across that period includes everything from operational performance and cost management, capital structuring, management of the debt amortization profile and CapEx requirements right through to how we prepare for retenders. This work is significant in terms of value impact and is core to our capability.

On associated growth, we continue to see opportunities in France, including the A412 option. At Dulles Greenway, we are progressing of projects to upgrade our existing tolling infrastructure with corridor-wide fiber optics. This will enhance resilience of the network and give a surplus capacity that may be commercialized over time. We are currently working on obtaining consents and I look forward to keeping the market updated as we progress towards approvals and then construction.

At Chicago Skyway, we recently completed a refinancing of the bank debt and working with our partner, Ontario Teachers, on options for future gearings. We'll also continue to explore the potential to collaborate with surrounding networks to create win-win outcomes.

Today, we have reaffirmed our $0.40 per share distribution guidance for 2026. And beyond that, we will focus on optimizing free cash flow and paying it to our investors in line with our distribution policy.

While we will no longer provide a quantified distribution target beyond the 1-year period, in practice, we will continue to distribute the substantial majority of the cash generated to our investors.

So turning now to the Dulles Greenway, where we continue to make progress on our multifaceted strategy to unlock cash flow. We've had a couple of positive developments this year. In April, the Commonwealth of Virginia adopted legislation that gives us and the regulator greater visibility and certainty over the rate case process. The change allows us to request rate increases for up to 2 years at a time rather than 1 and requires the SCC, our regulator, to issue a decision within either a 9- or 12-month period. Previously, there was no deadline at all for decisions.

On the 2025 rate case application, specifically the SCC staff report released in July acknowledge that our primary and secondary toll proposals meet the 3 regulatory hurdles required. Further reports have also been released from TRIP II, VDOT and Loudoun County. We anticipate that an evidentiary hearing will be held in the coming months, following which the hearing examiner will make a recommendation before the SCC makes its ultimate determination.

On the litigation side, we are appealing the grant of the defendant's motion to dismiss TRIP II's claims with respect to their alleged violations of the Virginia and United States constitutions.

As I mentioned a moment ago, we're also progressing the fiber project, which will add further optionality if progressed to construction.

Overall, it's clearly going to be a big few months for the Dulles Greenway teams as we make progress on our strategies to improve the business' contribution to security holder value. I look forward to sharing the outcomes of their hard work.

Turning now to France, where the major motorway concessions begin expiring from 2031. The regulatory and tax environment continues to evolve, but APRR is well positioned to navigate this. We think about our French portfolio in 3 ways: firstly, our current portfolio; secondly, associated additions, including the A412 opportunity, over which APRR holds an option; and finally, over the long term, our ambition for an ongoing substantial presence in France.

The framework law supporting the continuation of a motorway concession model was adopted by the French Senate in April and is progressing through the National Assembly. We continue to expect more clarity on the new concession regime after the 2027 presidential election.

Of the major concessions that are set to expire, SANEF is the first in 2031 and would expect tendering to begin in the late 2020s.

As our own concessions at APRR and AREA are among the last to expire, the APRR group is strongly positioned to consider the full range of opportunities as they emerge. And importantly, we believe we have a very supportive investor base behind us to pursue growth in this market.

With that, I'll hand over to Vincent to take you through our financial performance.

Thanks, Hugh. This has been an eventful half for Atlas Arteria, and you will see that reflected in the way we have presented our results today.

Putting aside the significant corporate activity, the underlying performance of our portfolio has been resilient with underlying net profit after tax of $94.3 million, up 29% on the first half of 2025.

The statutory result was a net loss after tax of $73.3 million, which was driven by nonoperating costs relating to the settlement of the OTPP put option and the IFM takeover offer. I will step through each of these when we get to the income statement.

Our proportional results were lower than the comparative period, the prior comparative period and the primary driver was foreign exchange. I will also cover that impact in more detail shortly.

As Hugh mentioned, we have reaffirmed our distribution guidance of $0.40 per security for 2026 and expect to pay $0.20 of that to investors in October.

As sign posted at the 2025 full year results, we expect the full year distribution for 2026 to be above our policy range of 90% to 110% of free cash flows. This reflects the impact of the French temporary supplemental tax, the TST, and now also the one-off costs related to the put option settlement payment and the response to the IFM takeover offer.

Looking beyond 2026, what has not changed is our drive for strong distributions. And while we no longer provide a quantified distribution target beyond the 1-year period, the building blocks of our distributions are clear: first, optimize free cash flows; and second, our distribution policy, under which we will continue to pay out 90% to 110% of free cash flow.

Finally, in keeping our -- with our regular practice, we continue to expect to provide 2027 guidance at our full 2025 -- 2026, sorry, full year results in February next year.

Turning now to capital management. We continue to focus on optimizing capital management at each individual business and have had some positive outcomes this period. In January, EUR 500 million of bonds were priced at APRR, strengthening its liquidity position.

At Chicago Skyway, bank debt facilities were refinanced in August on improved terms. This is an encouraging sign as we plan for future regearings with the next opportunity in 2027.

At the corporate level, in July, we established a new $150 million corporate debt facility to fund the USD 100 million settlement payment to extinguish the put option. The facility has a term of 3 years and we have options in our approach to its repayment, which could include refinancing.

And finally, we also retain our flexible $50 million working capital facility, which is undrawn.

Now as you can see on the right of this slide, there have been some large payments made since the end of the half. This relates to the settlement of the put option and costs relating to the IFM takeover offer. Taking those payments, together with the funds available from the new $150 million corporate debt facility, we have a pro forma corporate cash position of $100 million at the end of the first half. In the coming weeks, we will receive distributions from our businesses, and we'll use these funds to pay our first half 2026 distributions.

Moving to traffic and toll revenue performance. Total revenue remained resilient. Excluding the impact of FX movements, total revenues was up 0.6%, supported by inflation in tolls and despite a mixed traffic performance across our portfolio.

In France, higher fuel prices, particularly for diesel, impacted light vehicle traffic. The APRR group traffic was down 2.4%, although strong momentum in French and Spanish manufacturing supported a positive growth of heavy vehicle traffic. And traffic at ADELAC was down 1.4%, reflecting the same fuel price impact, together with disruptions from the G7 Summit in Evian.

In the second half to date, light vehicle traffic and APRR continues to be impacted by higher fuel prices, with performance in line with the trend since March, and heavy vehicle traffic remains robust.

In Germany, extremely cold weather in January and February negatively impacted traffic at the Warnow Tunnel. This was partly offset by favorable traffic flows from roadworks on a key arterial routes across the Warnow River, but these roadworks have since completed.

In the United States, Chicago Skyway traffic rose 2.7%, benefiting from roadworks on 2 sections of the main alternative route. Heavy vehicle traffic was down over the half, although the second quarter improved on the first and macroeconomic indicators are showing signs of recovery.

Dulles Greenway traffic continued to grow strongly, up 6.3%, as congestion continues to build on the alternative routes.

In the second half to date, traffic growth in the U.S. remains positive. Growth continues at Dulles Greenway, while traffic has slightly moderated at Chicago Skyway as some of the road works on the alternative route completes.

Now let's look at how traffic performance has translated into our proportional results. As I said earlier, this half our proportional results were significantly impacted by FX movements. On a constant currency basis, proportional toll revenue was up 0.6%. This reflects the impact of inflation-linked toll increases, partly offset by the mixed traffic performance. And still on a constant currency basis, proportional EBITDA was up 0.9%. However, the Australian dollar strengthened against the euro and the U.S. dollar during the period, and it resulted in proportional toll revenue and proportional EBITDA being down 3.9% and 3.6%, respectively.

Moving to our cash flow for the half. Let's start with the cash we received from our businesses. Positive performance at APRR and Chicago Skyway drove an increase in underlying distributions. Unfortunately, because of the adverse FX changes, what we received in Australian dollars, which was $296 million, was 1% lower than the prior comparative period. This does not include the benefit of the FX hedge program, which we implemented in 2025 that is captured in corporate cash flows, which includes $5.8 million of net proceeds received from the hedging program. But corporate cash flows are primarily corporate costs, and these were stable versus the prior comparative period.

In March, we paid the second half 2025 distribution of $0.20 per security to investors, representing a total of $290 million.

To conclude on cash flows, note that the significant nonoperating costs related to the put option extinguishment and the IFM takeover offer will come through in the second half of this year.

Moving to our income statement. First, it shows the performance of our underlying results, which you would be familiar with. And below that, we have presented separately the nonoperating costs, which are applicable to 2026.

As I said earlier, our underlying net profit after tax was up 29%. Total revenue, which is the roll-up of revenues from the Dulles Greenway and Warnow Tunnel businesses was down 4%, reflecting unfavorable FX as we have discussed. Business operation costs were flat on the prior comparative period and corporate and business unit costs were broadly stable.

The growth-related activities in the period, mostly related to the work we are doing at Dulles Greenway, which Hugh stepped through earlier, and as we continue to progress work on the federal litigation and the fiber project, we expect full year growth related costs to be around $5 million.

Separately, we do not anticipate incurring other project costs while we have posed consideration of the new brownfield opportunities. And as a consequence, we have withdrawn our cost guidance of $5 million to $10 million per year on average over the next 2 to 3 years.

Moving down the income statement. Finance costs were lower which includes the benefit of a $10 million mark-to-market gain related to the FX hedge program.

Now in addition to what I just described, this half included significant nonoperating costs. Firstly, cost of $24.1 million were incurred in relation to the IFM takeover offer, which ran from the end of April through to July. Most of these costs were incurred during the first half, and we expect approximately $1 million of further costs in the second half.

Secondly, there was $16.9 million of employee change of control costs. These arrangements were triggered by the change of control in Atlas Arteria and included cash payments and the vesting of short- and long-term incentives, a significant portion of which are equity incentives. No further costs are expected in relation to this matter.

Lastly, you can see costs relating to the put option settlement which are across 2 line items. The first item of $89.1 million is a change in the fair value of the financial liability. This corresponds to the movement in the carrying value of the put option between 31st December 2025 and 30 June 2026. The second item is a financial liability settlement expense of $37.5 million. It is the difference between the USD 100 million settlement and the fair value of the option. These costs are nonoperating in nature and do not change the underlying cash generation and earnings capability of our portfolio.

In conclusion, we are pleased with the underlying performance of our businesses this half which has been resilient through a period of significant corporate activity.

And with that, I'll hand back to Hugh to wrap up.

Thanks, Vincent. I recognize that we haven't got all the answers yet. As we work through this period of transition, there remains some uncertainty for our investors, our partners and of course, our team. Importantly, our vision, which we refreshed in 2025, partnering to deliver world-class road experiences remains unchanged. Delivering on that vision and living our values every day provides an excellent foundation for how we want to operate.

Overall, there's 1 key message I want to leave you with. What matters to us is investor value. So as we work through the optimization of our portfolio, capital allocation, governance arrangements and everything else you've seen on our agenda, you can be assured this is the lens through which they are being considered. We have a high-quality portfolio of assets with significant value still to be realized. And the team and I are committed to working closely with our partners to convert those opportunities into strong distributions and value for our investors.

Thanks for your time today, and we'll now open the floor to questions. Back to you, Amber.

[Operator Instructions] And we will now take our first question from the line of [ Tom Peyton ] from RBC Capital Markets.

Just a couple of questions for me on APRR. I think there's been some traffic over the summer period. Do you guys have a view of when that trend might start to turn around?

Tom. So traffic over the summer, as we've said, has continued to be in line with the traffic that we have observed in Q2, which means that on the LV front, it's been impacted by the high fuel prices, but we haven't seen such an impact on HV and HV has been positive and continues to be. It's hard to predict how it will behave by the end of the year, but there has certainly been a very clear impact from the fuel prices, and so that will heavily depend on how fuel prices evolve between now and the end of the year.

Yes. I appreciate that. And just 1 more for me, a question on the Dulles Greenway. I saw that there was a downgrade on the trip bonds from B+ to B. I guess, the key drivers around that and do that indicate how far you are from falling any further? And then I guess if the latest rate case gets up, does that sort of dramatically reverse?

So the rating agencies has flagged that the reason for the downgrade was the uncertainty around the toll increases. So yes, I suppose that any positive outcome on the rate case, the current rate case would help. However, I think rating agencies need to see a sustained perspective of rate increases to consider an upgrade. I will also remind you that the bonds at Dulles Greenway are wrapped and so do not impact -- the downgrade does not impact the company or the cost of the debt.

And our next question comes from the line of Andre Fromyhr from here from UBS.

I just had a question about the distribution guidance. And I understand the context that you haven't provided distribution guidance for FY '27 in today's presentation. But I did interpret the messaging as, let's say, a return to paying out within the targeted range relative to your free cash flow. And so I guess, pose a question as a scenario. If we were to see the TST extended beyond this year, does that put downward pressure on what has been a pretty steady run rate of $0.40 per security for some time now? And I guess an extension to that question is, do you -- can you confirm whether or not you consider distributions from Skyway derived from regearing activity as part of your underlying cash flow?

Thanks, Andre. A couple of parts to that. So we haven't changed our guidance, which is the 2026 guidance of $0.40. But you correctly point out that in terms of our longer-term target guidance of $0.40, we have reverted to not providing an absolute target and instead focusing on our ambition to maximize cash flow from our businesses, and then to pay that out, as you pointed out, in the range of 90% to 110% of that total.

In terms of what can impact underlying free cash flows, you're absolutely right. Your extended taxes can do that, traffic outperformance or underperformance. So it's the full range of cash flow impacts that will, therefore, feed into that calculation.

In terms of the second part of your question, which relates to the Chicago Skyway regearing proceeds. We've kept our calculation of free cash flow exactly the same as we've reverted to policy. And so that says that regearing proceeds can be used in free cash flow calculation, only to the extent they are used to offset amortization across the portfolio, debt amortization. So as an example, if we were to regear Skyway and those proceeds were used to repay part of the Financiere Eiffarie or APRR amortizations, that portion of the proceeds would be included in free cash flow only.

Yes. Perfect. And then I just had another question. I guess with reference to your Slide 7, the evolved strategy post the IFM offer. I'm curious to understand a bit more color around what new opportunities on the right-hand side means in the current context. And does that include potentially partnering and finding synergies in working with IFM? I guess it's no secret they've got an appetite to invest in infrastructure around the world. Are there -- have you talked yet about synergies of working together with them?

Yes, thanks. I think just to clarify what we mean on Slide 7, those right-hand side new opportunities and the brownfield opportunities are in a dotted box because we've actually paused those for the moment. So apologies if that was unclear. But the sort of solid boxes are continued priorities from previous periods. The dotted boxes are ones that we were pursuing quite openly and publicly, but we have paused for the time being.

I think -- I still think your question is completely valid in a sense that they're paused. We need to engage with our investors, including IFM, absolutely, as you say, to establish appetite and opportunities that would be of interest. But what we're really focused on at the moment is within and adjacent to our existing portfolio. So the biggest opportunities we see are clearly in France, both incremental concessions like the A412 but the very significant retender process that we're excited and about and we have investor support for that. I can confirm that.

In terms of -- when I look across to the U.S., networks around Chicago Skyway. Obviously, part of that is owned by IFM. So we would obviously consider any opportunities there. We haven't delved into those opportunities in detail. We are going to be conducting strategic and operational review, which will include consultation with investors, including IFM. And it's important that we take that feedback into account as we consider what to pursue going forward.

But just back on the slide, focused at and around our existing assets with brownfield opportunities in new regions to be tested as part of that longer-term strategy.

And our next question comes from the line of Ian Myles from Macquarie.

A couple of quick questions. When is the actual strategic review going to be completed?

So I thought there might be a second part of the question, Ian, that's why I was pausing in my response. So we have really commenced engagement with the investor base. I hesitate to put a firm finish date on it, but there will be very significant engagement over the next month, both IFM and other investors. And it will form part of our overall annual board cycle where we have a major strategy day and a strategic review day. So I don't think it's really useful to put an end date on it, but the very significant engagement will be in the next month.

Okay. So would you have an update for the market in the sort of like quarterlies? Or is that something we're going to wait to the first half or full year results?

I guess, like all our engagement with the market, it will be determined by materiality. I think when we look at Slide 7, obviously, our strategy is heavily unchanged in a lot of the areas, and that is facilitated by investor feedback to date from IFM and others. Where we have changed, including the asset sales in the brownfield pausing has been in response to investor feedback, including IFM. So I would be -- while I don't think nothing will change, I would be surprised if there was a very material pivot in our strategy post engagement with our major shareholder and others. If there was, we would obviously return to the market. But I think the confirmation wouldn't need to be reiterated to market. So my current assumption is we will give an update at full year results. If anything changes before that, we obviously commit to reverting to you.

Okay. Can you maybe just sort of run through the thought process about keeping the dividend flat this year, given you've actually had quite a few extra costs out there and you've exercised an option. You're actually now borrowing at holdco. Why not make that move to reflect cash flows going forward with the change of control and then implement that in FY -- calendar year '27?

So when we looked at our guidance and our target, we can absolutely afford to pay the $0.40 this year, and we decided given we have provided that guidance to the market consistently from February and through the takeover, it was very important given our balance sheet supports it to pay that out.

In terms of the target, so 2027 and beyond, we thought it was a really appropriate time to immediately revert to the distribution policy. And so that was the thought process, nothing more sinister or complex than that. It was purely -- we can deliver in line with our guidance, and we decided to, but we decided the target could be reviewed.

And the desire to hold -- holdco debt, is there some sort of -- it's a 3-year period, but I presume you can roll it over. Is there a desire to amortize that over a period? Or is it happy to have now a structural level of holdco debt?

Right now, we're completely comfortable with the structural level of debt with no intent to amortize before the maturity. What we'll do, and Vincent and I will we'll look at it, but -- is consider that at the time, but I would absolutely say there's no discomfort in having that debt there. It will just be determined by the market conditions and the balance sheet at the time.

Okay. And just 1 final one. On the French tax, is there -- do you have any sort of view about what might be happening over there? My French -- reading French is not particularly good in the politics of the continuation of that tax?

Yes. I think your analysis is as good as ours. We don't know. The government has indicated that they may have to extend the TST given the budgetary constraints, the level of debt and the additional cost this year. But obviously, that will have to be debated at the parliament as part of the budgetary process that is expected to happen before the end of the year. So we don't know and we expect more clarity on that in the next few months or in the beginning of next year.

Our next question comes from the line of Rob Koh from Morgan Stanley.

Can I ask in relation to the fiber project at the Dulles Greenway and you've given us some indicative budget there, which is not huge. But how will that be funded? Will that be funded at the Greenway level? And then assuming it goes ahead and generates a return, do those returns then add a little bit of support to the cover ratios and the ultimate release of cash there? Is that the right way to think about it?

Rob, thanks for that. Fiber project will likely sit outside the current ring fence of the debt at Dulles Greenway. So we are currently funding the growth costs through the line item that Vincent mentioned in terms of corporate growth costs and we assume that will continue, and the cash flows will therefore be available as opposed to within the ring fence and the lockup.

Okay. And then just thinking a little bit more strategically about that Northern Virginia area. I guess a number of the other toll roads in that area have put through quite material price increases. How does that impact on Greenway rate cases? Does that give you cover for increases? Or does it hurt? Or is it too far away?

Look, it's a really good question, Rob, because when you look across the 66 to 495 and the 95, they've all shown the ability to drive significant growth from variable pricing. Now the difference -- there's 2 main differences. Number one, they're express lanes, where you've got a choice between a free lane and a paid lane that is different to our toll road, which is just a straight toll road. And secondly, they are regulated by the Virginia Department of Transport. We are regulated by the State Corporation Commission under a very different regime.

I think it's helpful context to show there's limited elasticity and high demand for tolls in Northern Virginia. So that is helpful. But we still need to meet the hurdles that sit within our regulatory framework. As I mentioned, good news is the SCC staff have determined our primary and secondary proposals do meet the 3 hurdles. But I think the surrounding toll roads are a helpful tailwind without being specific to our rate case.

Okay. That's good. And then just, I guess, a question perhaps for Monsieur Portal-Barrault. Could you walk us through what kind of options you have to repay or refinance the $150 million holdco facility? I take on board to comment that you're comfortable with it and you've got plenty of time. But how should we think about options to repay and refinance?

Well, I think the options are the typical ones that you would expect. We could refinance it and push the maturity forward. We could amortize it over a period, and we could relate bullet, although wouldn't favor that solution right now. But as Hugh mentioned, there is no urgency to make that call. We're comfortable with it, sitting at the corporate level right now. We have a 3-year maturity. And so when we get closer to this maturity, we will assess our options, the state of the debt market and the underlying business requirements, and we will make a determination.

Okay. Should we be thinking that maybe there's Skyway regearing proceeds that maybe that's earmark for FE, but is there potential there to repay [ CVAE ] or?

Yes, that's an option as well.

That's an option. Okay. Great. Well, all the best with those options.

We will now take our next question from the line of Suraj Nebhani from Citi.

Just a couple of quick ones for me. Firstly, just review the comment on distribution going into FY '27, just to double check the intention still is to stick to the payout ratio range of 90% to 110%, but without necessarily committing to the [ 47 ] level of distribution. Is that the right way to interpret that?

Yes, it's absolutely correct, Suraj.

Okay. Perfect. Perfect. And then I guess the other 1 was just for Vincent on the hedging. Vincent, previously, we've discussed, I think it was like a cap and quarter arrangement in place for '26 on the French distribution. Can you give us an update on what you're expecting and how does that -- for the second half rather? And how does that look heading into next year, the hedging position?

Sure. And we have provided some more detail in the analyst notes on Page 36 of our presentation, but I can walk you through that. At the moment, our distribution for September is covered about 80%, 83%, and covers a range that is indicated in the slide. The March '27 distribution that we expect from APRR is covered about half, a bit more than half in a slightly broader range. The way those hedges work is we have exposure for large movement. We have protection against large movement in the FX, but we retain exposure for small movements.

Understood. I guess the question was more that if FX continues to be unfavorable on the -- I guess, on the free cash line, you're not hedging the free cash, just heading the distribution. Is that right?

That is correct, yes.

I am showing no further questions. I would now like to turn the conference back to Mr. Hugh Wehby for his closing comments.

Thank you, Amber, and thanks to the investors, the analysts and the interested parties you dialed in today, and we look forward to seeing you on our road show. Thank you.

Good morning, everyone. My name is Tess Palmer, and I'm the Group Director, Investor Relations and External Communications at Atlas Arteria. I welcome you to Atlas Arteria's 2026 Annual General Meetings. The meetings are being held as hybrid meetings, which means we have security holders and proxy holders attending both in person and online. As a result, there are a few important housekeeping matters to cover before we start.

First, for those attending in person. If the building fire alarm sounds or you are advised that there is an emergency in the building, please follow the directions of the warden. The exit will be via the stairs next to the lifts. The bathrooms are located in the halls on either side of the lift well. And please turn your mobile phones to silent during these meetings.

Now for everyone's information. Due to Atlas Arteria's stapled structure, there will be 2 meetings taking place this morning. One for Atlas Arteria Limited, the Australian parent company, that forms part of the Atlas Arteria Group, and 1 for its stapled entity, Atlas Arteria International Limited, the Bermudian parent company of the group.

For today's meetings, you will hear from the Atlas Arteria Limited Chair, Debbie Goodin; the Atlas Arteria International Limited Chair, Fiona Beck; and Hugh Wehby, the CEO of Atlas Arteria. You will also hear from each of the directors who are being considered for reelection at today's meetings.

In relation to the formal business of the meetings, voting on the resolutions is by way of a poll. To provide security holders and proxy holders with sufficient opportunity to vote, the chairs will declare the poll open on all items of business to be considered at the meetings after they formally open each meeting. I will provide further instructions on how to vote at today's meeting shortly.

The proxy positions, including open proxies, were released on the ASX earlier today and will be shown as each resolution is introduced. The final results for all resolutions considered at the meetings will be released to the ASX after the end of the meetings.

As mentioned in the Notice of Meeting, the chairs will vote all undirected proxies held by them in favor of the resolutions. At the conclusion of the meetings, we will invite those attending in person to join us for refreshments.

Security holders, proxy holders and corporate representatives may vote on the items of business once the polls are open. If you're here in person and entitled to ask questions and vote at today's meetings, you would have received a blue voting card. If you are entitled to ask questions but not vote at the meetings, you would have received a yellow card. If you haven't received a card and you think you should have or you think you've not received the correct card, please go to the registration area where a Computershare representative will assist you.

To vote on an item, please tick or mark the For, Against or Abstain box for the relevant item. You must only mark one box for each item. You will be given time to vote on each item following the discussion on that item.

For those attending online, when the chairs declare the polls open, a voting icon will appear on the screen and the items of business will be displayed. To vote, press the vote icon and the voting options will appear on your screen. You can then select your voting direction and a tick will appear to confirm receipt of your vote. There is no need to hit a submit or enter button as the vote is automatically recorded. You will receive a confirmation notification on your screen. You can change your vote up until the time I declare the voting closed.

Security holders, proxy holders and corporate representatives may ask questions during the meetings. To ask a question in person, please approach the microphone when prompted and show your investor card to the Atlas Arteria representative. Once you have done this, state your full name and any affiliation you have. If you're unable to approach the microphone, please raise your hand, so a microphone can be brought to you. We ask that you hold any questions on specific resolutions until we come to that item of business.

Online attendees can submit questions at any time. To do so, select the Q&A icon, type your question into the text box and press the send icon to submit. If you have a written question already prepared on any item of business, please submit it now so that as many questions as possible can be answered during the meetings. Please note that your questions may be moderated or if we receive multiple questions on 1 topic, amalgamated together. To ask a question verbally, please follow the instructions shown below the broadcast window. Please state your full name before asking your question and limit your questions to 1 to 2 at a time to allow others to ask questions.

If you are experiencing any technical issues, please call the help line within the online meeting guide.

And with all that, I'll hand over to Debbie Goodin, the Chair of Atlas Arteria.

Thank you, Tess, and welcome to Atlas Arteria's 2026 Annual General Meetings. My name is Debbie Goodin, and I am the Chair of Atlas Arteria Limited. I am advised that there is a quorum present, and so I declare the meeting of Atlas Arteria Limited open. I will open the polls now so you can commence voting.

Firstly, I would like to acknowledge the Wurundjeri people, who are the traditional owners and custodians of the land on which I am presenting today. I would also like to pay my respect to the Elders past and present of the Kulin Nation. We respect and value the importance of preserving our traditional owners, cultures and customs.

We are an Australian-listed staple group with operations over 3 continents, and I wish to acknowledge the traditional owners of all those lands.

Most of you will know the relationship between the 2 companies, but it is set out on the screen for ease of reference. This morning, I will refer to the Australian entity as ATLAX, the Bermudian entity as ATLIX, and the group as Atlas Arteria. In addition to chairing ATLAX, I am also a Director of ATLIX. The Chair of ATLIX is Fiona Beck, who joins us today from Bermuda. Hello, Fiona.

Good morning, everyone. I would like to extend a warm welcome to all investors and other visitors and reiterate Debbie's thanks to you for joining us and support today. Debbie and I are also joined by our fellow ATLIX directors, Kiernan Bell, here in Bermuda, and Andrew Cook in the U.S. and the U.K. I now declare the 2026 Annual General Meeting of the security holders of Atlas Arteria International Limited open, and on advice, declare that we too have a quorum. I also confirm the polls for the ATLIX items of business are now open, so you can commence voting.

While I chair the ATLIX meeting today, I have asked Debbie as a Director of ATLIX to assist with the running of the meeting to make the process smoother. I will now hand back to Debbie.

Thank you, Fiona. I would now like to introduce the ATLAX directors. Joining me in Melbourne today are Hugh Wehby, our Managing Director and CEO; David Bartholomew, Chair of our People and Remuneration Committee; John Wigglesworth, Chair of our Audit and Risk Committee; Ken Daley and Danny Elia. Also attending online are Jean-Georges Malcor, who is in France; and Laura Hendricks, who is in the United States. You can see Jean-Georges and Laura on the screen.

Also joining me on the stage are Daniel Krutik, Group Director Legal; and Tess Palmer, who you heard from earlier. Tess will be assisting me in the meetings by reading out any written questions.

Joining us in the audience are Geraldine Leslie, our Group Executive People and Culture; Sam Vorwerg from Deloitte, our Auditor. Also with us online are Vincent Portal-Barrault, our Chief Financial Officer, joining from Luxembourg; and Amanda Baxter, our Chief Commercial Officer, joining us from the United States. Finally, Michael Hutchison of Computershare, our share registry, who will be the returning officer for today's meetings.

One final point before I move to my chair address. A number of directors are up for reelection at today's meetings, and they will address security holders briefly when we come to those agenda items.

I will now move to my chair's address. There is significant interest in the hostile takeover offer that was announced by IFM 2 weeks ago. The independent directors of Atlas Arteria recommend that security holders reject the offer, and I will address that shortly. However, I wanted to start today's meeting by sharing some details on the significant progress achieved across the business in 2025.

2025 was a positive year for Atlas Arteria. This was Hugh's first full year as CEO. The Boards are very pleased with Hugh and the rest of the Atlas Arteria team and what they have achieved during the year. Hugh has swiftly built strong relationships with our partners and investors, refresh the company's vision and strategy, and reorganize the leadership team. Against the backdrop of a complex external environment, including political and regulatory uncertainty in several of our markets, our businesses were resilient and traffic performance remained steady in 2025.

Toll revenue grew at each of our businesses and Atlas Arteria's proportional EBITDA was up 9.3% on the prior year. We continue to deliver distributions of $0.40 per security, in line with guidance. This was achieved despite the impact of the French government's Temporary Supplemental Tax, the TST, which was levied on large French businesses in 2025. The TST has subsequently been extended to 2026.

In 2025, we also introduced greater clarity for investors on our approach to capital allocation. First, we established a clear distribution policy to pay 90% to 110% of free cash flow to investors. At the same time, we refined our definition of free cash flow to better align with operations at our businesses.

Next, we set out a capital allocation framework, which explains how we think about the deployment of cash flows between distributions, reinvestment and additional investor returns.

We have given 2026 distribution guidance of $0.40 per security as well as confirmed our target to maintain distributions of at least $0.40 per security. We know that distributions are extremely important to many investors, and these changes provide transparency over future distributions. As always, our distribution guidance statements remain subject to continued business performance, changes to current taxes, movements in foreign exchange rates and other future events.

In 2025, we reshaped our strategy around 3 clear priorities to optimize business performance and drive growth. Hugh will expand on these.

I want to be clear that optimizing the performance of our existing businesses remains key.

As we do every year ahead of the AGM, we have engaged with our investors on this strategy. The feedback has been supportive. Our strategy is the foundation from which future investor returns will be generated.

Atlas Arteria has a unique but effective governance structure. We have 2 boards and a combination of independent nominee and executive directors. I want to assure all investors that your interests are being represented by a group of individuals with deep corporate, financial, operational and toll road experience. We work well together to protect and enhance investor value.

I also want to emphasize that the 2 IFM nominee directors, Danny Elia and Ken Daley have been actively involved in shaping Atlas Arteria strategy and the way we communicate it to investors. So we find the criticism we are receiving from IFM on the strategic direction of Atlas Arteria perplexing. The contributions of Danny and Ken managed under the director's representation agreement entered into with IFM in August 2024 have been constructive and valuable. That agreement is aligned to the ASX's corporate governance principles and recommendations, and importantly includes the requirement for Atlas Arteria to have independent chairs and a majority of independent nonexecutive directors.

Today, 4 independent directors are standing for reelection, each with the unanimous support of all other directors. John Wigglesworth and I are standing for reelection to the ATLAX Board. Fiona Beck, Kiernan Bell and I are standing for reelection to the ATLIX Board. You will hear from each of us later in the meeting.

In early April, as a part of the notice of meeting, I confirm that this will be the last time I stand for reelection to either Board, having joined ATLAX as an independent nonexecutive director in 2017. I do not plan to serve out my full 3-year term. This means that ATLAX will be seeking a new chair in due course, and I am committed to supporting an orderly succession process. I have spoken with many of our partners and investors in recent weeks regarding the planned chair succession process. There is a strong shared view that a well-planned transition is important for the ongoing stability and independence of the Boards. Ensuring an orderly process is even more important now that we are facing a hostile takeover bid from our largest investor. And of course, in line with the director's representation agreement, any future chair would continue to be independent.

Moving to remuneration. Our framework is appropriately structured to support remuneration decisions and outcomes that deliver against Atlas Arteria's vision. We are confident the remuneration framework is fit for purpose. And I note that all 4 major proxy advisers have recommended a vote "FOR" all resolutions tabled at today's meeting, including the remuneration report.

I'm pleased to say that prior to this meeting commencing, we have received sufficient votes in favor of all items to indicate that each resolution will pass. This says to us that our investors, absent IFM, support our stated strategy and understand the need for our Boards to remain stable and independent as we respond to IFM's takeover offer. We thank our investors for their support, especially given the significant noise in the market and the media.

Now turning to the IFM takeover offer. On Monday, the 27th of April, we received an unsolicited and highly conditional takeover offer from our largest investor, IFM. There was no prior communication from IFM to Atlas Arteria before the takeover offer was announced or in fact before the bid was reported in the media. However, your boards are well prepared for this possibility. We have been working with management and our advisers focused squarely on 1 issue, maximizing value for all investors. ATLAX has set up an independent board committee, which excludes the IFM nominee directors and includes Hugh. That committee, along with the independent nonexecutive directors of ATLIX has considered the IFM offer. After detailed consideration, the independent directors unanimously recommend that investors reject the offer on the basis that it is too low, is opportunistic and highly conditional. This was detailed in a release made to the ASX on Wednesday, the 6th of May.

The independent directors intend to reject IFM's offer in relation to their Atlas Arteria securities. To reject IFM's offer simply ignore all correspondence from IFM. We note that IFM dispatched their detailed bidder statement on Monday, the 11th of May. We are preparing our target statement, which will set out the independent director's formal recommendation and the detailed reasons for it. The target statement will also include further information to assist investors in assessing the offer, including an independent expert's report. The target statement is expected to be released to the ASX on 26 May.

There are some things, however, that we already know. The offer is too low, opportunistic and highly conditional. Under the creep provision, IFM has increased its stake in Atlas Arteria from 19.2% in October 2022 to 34.5% in April 2026. Against this backdrop, the independent directors believe the offer is intended to accelerate IFM's creep towards effective control without paying an adequate control premium. The offer represents a premium of less than 10% to the last closing price prior to its announcement, which is well below the premium typically observed in control transactions.

The offer materially undervalues Atlas Arteria. It fails to adequately reflect the value of Atlas Arteria's high-quality global toll road portfolio and growth opportunities. It is clear that IFM is seeking control of Atlas Arteria without paying a fair price to other investors. The offer is subject to an extensive list of conditions that may never be satisfied or waived and some conditions are already incapable of being satisfied. These conditions expose investors who accept the offer to potentially prolonged uncertainty without commensurate value.

We are also concerned that IFM's conditions may constrain management from the day-to-day running of our business. We will take appropriate action to ensure that we continue to run the business and maintain and grow value in the best interest of all security holders. The offer is opportunistic. It comes at a time characterized by volatility in global equities, foreign exchange and interest rates.

I do want to acknowledge that our security price has been disappointing recently, and we share your frustration. As infrastructure owners, we take a long-term view of both challenges and opportunities and are focused on executing our strategy in order to create long-term value. We do not believe that selling below fundamental value is the right reaction to current security price performance. The months ahead are likely to be eventful. While we recognize the interest in our response to the IFM offer, the Boards have reinforced to management the importance of continuing to execute on the strategy and delivering the distribution and management is committed to that task. We are focused every day on creating value for all of our investors. I want to assure you we will continue to be transparent with you through this process and, as always, remain available to receive your feedback on any aspects of Atlas Arteria's business.

Thank you for your continued investment in Atlas Arteria and for your support. I will now hand you over to Hugh.

Well, thank you, Debbie, and good morning, everyone. It's great to be here with you today. While it's my second AGM, 2025 marked my first full year as CEO, and it was certainly a productive year from Atlas Arteria as we reposition the business, and started to build momentum on our plan to generate long-term value for our investors. During the year, we launched our new vision, refreshed our strategy and restructured our team as well as clear direction and alignment on our ambition we now have the right people in the right roles. Our new executive team took effect in November with experienced leaders running broader and more connected portfolios to enhance decision-making and execution capability. We also made 2 high-quality CEO appointments at our U.S. businesses. These changes have simplified how we work and sharpened our accountability. They are a big part of why I'm confident that we'll be able to deliver on our objectives. 2025 was a year of solid financial performance across our businesses, reflecting steady traffic growth supported by CPI-linked toll increases. On the sustainability front, we continue to make good progress. Particularly, we're embedding a strong safety culture across all of our businesses. It's a non-negotiable that our people get home safely to their families. We also know how important safety is to the customers and communities serviced by our roads. Providing a safe customer experience reinforces both our value proposition and our ability to work in trusted partnership with governments.

We are confident in our strategy and the priorities we're focusing on to optimize business performance and drive growth. And we are positive about how it all comes together to generate value for you, our investors.

But before I walk you through the detail of this, I'd like to share some of my observations after my first full year as CEO.

If I could distill Atlas Arteria's strength to 3 things, that would be performance, partnerships and resilience. Firstly, our business is made up of highly capable people who are driven by performance. Building and optimizing a world-class portfolio for the long term is at the core of what we do each and every day. Progressing strategies to unlock value in our existing businesses is a priority for everyone across the organization. This focus is led by our board, as you heard from Debbie, continually driving for performance and value. In the past year, the Boards have played a significant role as management has reshaped the vision, outlined the value-creation pillars and restated our strategic priorities. Their involvement in these processes and ultimate support of management strategy has been crucial and helps assure our investors that strong governance will remain a foundation of the Board's approach over the long term.

Secondly, we particularly value the strength of our partnerships. At last year's AGM, I referenced to specific and powerful change to our vision statement, partnering to deliver world-class road experiences. We recognize that high-quality partnerships can create opportunities for Atlas Arteria, opportunities that we could not capture on our own. And we understand that investing in partnerships strengthens our competitive position.

And thirdly, resilience. Despite global macroeconomic uncertainty and political disruption, our portfolio has continued to deliver. Diversity across our businesses, spanning multiple geographies, regulatory environments and currencies underscores this resilience, which brings me to our strategy.

As I said, our strategic priorities aim to optimize business performance and to drive growth. As we seek to strengthen our portfolio for the long term, it's important to emphasize that we start with a focus on the businesses we own. Overall, we think about enhancing our portfolio in 3 ways: first, unlocking value from our existing businesses in terms of operational performance and cash flows. Our multifaceted approach at Dulles Greenway to get the business out of lockup is a good example here.

Next, we are focused on opportunities for organic growth at or around our existing footprint. For example, progressing the A412 opportunity and preparing for a wave of major motorway concessions in France. And finally, we also explore new sources of value beyond our current portfolio.

I want to be clear that optimizing our current businesses and pursuing growth are not mutually exclusive activities. We can do both well and at the same time. In fact, it's crucial that we do because standing still is not an option given our ambition to deliver sustainable distributions over the short, medium and long term. One initiative we have progressed with the aim of unlocking value from our existing portfolio is to consider the option of selling the Chicago Skyway. Prior to receiving IFM's takeover offer, the Boards, including our IFM nominee directors, approved and issued a Right of First Offer, or ROFO, in respect of our stake in Skyway to our partner, Ontario Teachers' Pension Plan. If they were to accept the ROFO, we must sell our interest to Ontario Teachers'. If not, we may offer our stake to third parties.

In the context of the Chicago Skyway ROFO and to address recent market speculation, I confirm that we are not currently involved in any live acquisition processes.

Moving on to APRR, our largest business and biggest contributor to cash flows. While we continue to face political complexity in France, the long-term outlook for toll road operators remains positive. France's major motorway concessions begin expiring from 2031, and the government is currently considering the framework that will apply to our future concessions. So far, we're hearing that concessions could be shorter, geographically smaller and potentially subject to stricter regulation. But it is unlikely we will get clarity on the final model before the Presidential Election in 2027 at the earliest.

As renewal processes approach, the stability, clarity and certainty of concession and tax settings will be important inputs into any bidding decisions.

The strength of our partnerships definitely come into play as we consider the opportunity set in France. We jointly control APRR with our partner, Eiffage, with whom we've built a strong working relationship over the past 20 years. APRR itself benefits from experienced management, deep stakeholder relationships, a solid balance sheet and significant operational capability. All of this places us in a strong position to participate in the opportunities we see before us in France.

So now on to what we're doing to optimize latent value at the Dulles Greenway. We know that getting this business out of lockup is 1 of the most significant levers we can pull to generate incremental value from our current portfolio. We submitted our latest rate case in December 2025. And this time we've taken a different, more collaborative multi-stakeholder approach. We are working closely with the regulator, the SCC, to facilitate their discovery process ahead of public hearings in August. In March this year, we obtained a positive legislative change for both Atlas Arteria and the SCC. The Commonwealth of Virginia ultimately adopted a bill to allow the SCC to approve multiyear toll rate increases. And they also set a procedural deadline for a review of our toll rate case applications. Now that the bill has been approved, it allows us to move towards a more regular cadence of potential toll rate increases at Dulles Greenway.

As Debbie has mentioned, the IFM takeover offer in addition to being hostile, opportunistic and highly conditional is too low. It does not provide adequate premium for investors for the control that IFM will effectively gain nor does it reflect the potential value upside from the strategic initiatives that I've just discussed. We need time to crystallize the value of these options, and we want all investors to benefit from the value they can generate. Therefore, the independent directors continue to recommend that you reject the bid.

I'd now like to share a very brief update on year-to-date operational performance. During the first quarter, we saw limited impact from the current macroeconomic factors and rising fuel costs. Overall, toll revenue was up by 0.1% or 1.6%, including the impact of foreign exchange movements. Since the end of March, fuel prices have continued to rise. Our traffic data for April shows continued weakness in light vehicle performance at APRR, while heavy vehicle traffic has remained very stable. At Chicago Skyway, the trends from the first quarter have also continued with relative strength observed in light vehicle performance and relative weakness in heavy vehicles. And at Dulles Greenway, we continue to see strong traffic growth.

While price shocks can certainly have an impact on traffic in the short term, over the long term, traffic data has demonstrated relatively low elasticity to fuel prices. It is also worth noting that most of our roads have CPI-linked toll regimes providing protection to Atlas Arteria in any inflationary environments.

In closing, I'd like to say that we have set a firm foundation and clear direction to grow value in this business, and we look forward to the opportunity to continue to do so. We will do this by continuing to deepen our partnerships and by managing our capital efficiently. Importantly, our strategy and priorities continue to be based on the delivery of our $0.40 per security distribution guidance for 2026.

I want to take this opportunity to thank our people for their ongoing dedication and commitment. We achieved a lot together during 2025. And our entire team and our Boards are committed to our strategy and to delivering compelling returns for you. We have the high-performing people, partnerships and resilience to make that happen. Thank you, and back to Debbie.

Thank you, Hugh, and we will now move on to the formal business for today. The formal proceedings involve the 2026 Annual General Meetings for both ATLAX and ATLIX, which are being held concurrently as permitted by the constitutions of each company. I now table the notices of the Annual General Meeting for ATLAX and ATLIX and propose they be taken as read.

As we indicated earlier, I will Chair the ATLAX AGM, and Fiona Beck will Chair the ATLIX AGM. However, for the efficient running of the meetings, the ATLIX Board has agreed that I will take securityholders through all agenda items.

For the purpose of questions and to assist with the efficient running of the meetings, we will group resolutions related to the same subject matter together. I will answer or if appropriate, redirect any questions to my colleagues and may respond to a number of questions together if they cover the same subject. If it is not practical to respond to all questions, we will review the written questions submitted and seek to ensure that those read out are representative of the questions submitted.

I ask that your questions be kept to the resolutions at hand. We will have an open Q&A session at the end of the meeting. During this open session, we can take questions regarding the business's operation, strategy and the takeover offer. You may also ask questions of our Auditors, Deloitte.

You will now see on the screen all the agenda items, which form part of the business to be conducted at today's meeting.

I will introduce each item of business in turn, and then show the proxy position on that item before moving to questions and voting on them. I note that we released the proxy voting results for each item to the ASX prior to the meeting opening.

I will start with the items on the audited financial statements. As required by the Corporations Act, I now table the financial report, directors' report and auditor's report for ATLAX for the financial year ended December 31, 2025. On behalf of the ATLIX Chair, I also table the December 31, 2025 audited financial statements of ATLIX. The financial reports are included in the 2025 Atlas Arteria Annual Report, which is available on our website. There is no formal resolution required to approve the financial accounts and reports. Instead, this item of business provides security holders with an opportunity to ask questions in relation to the accounts. Our auditor, Deloitte, has not received any written questions in relation to the content of its report or the conduct of the audit. However, Sam Vorwerg of Deloitte is here today and will be able to address any questions that you may wish to put to him.

If you are attending in person and would like to ask a question, please approach a microphone and state your full name and your affiliation. If you are unable to approach the microphone, please raise your hand so that one can be brought to you.

Are there any questions on the item from those attending in person?

Tess, were there any written questions for our auditor, or are there any questions online?

Chair, there are no online questions in relation to this item.

Do we have any audio questions?

Chair, there are no audio questions.

Next, we turn to the resolutions dealing with the reelection of directors. We will start with my reelection to the ATLAX and ATLIX Boards, and then move on to the other reelections. I now hand the conduct of the meetings to Fiona for these items.

Thank you, Debbie. Item 2a of the ATLAX AGM, and 3c of the ATLIX AGM deal with Debbie's reelection as a Director of ATLAX and ATLIX, respectively. Debbie was appointed to the Board of ATLAX in September 2017 and to the Board of ATLIX in November 2020. Further Debbie's reelection to the ATLAX Board aligned with the Atlas Arteria Cooperation Deed, which contemplates that the ATLIX Board includes an ATLAX director to facilitate and promote cooperation and consultation between the ATLIX and ATLAX Board. Debbie's biography was included in the meeting materials that were circulated to security holders. Debbie is regarded as independent by both boards. The directors of ATLIX and ATLAX, with the exception of Debbie, unanimously support Debbie's reelection to the ATLAX and ATLIX boards.

We will now hear from Debbie on her proposed reelection.

Thank you, Fiona. This will be the final time I seek reelection of both the ATLAX and ATLIX Boards. It has been an immense privilege to represent security holders for the past 9 years. I will not go through my skills and experience and committee roles as is set out in my biography included in the Annual Report and the Notices of Meeting.

I will say I am proud of the company's achievements during my tenure. Atlas Arteria now has a high-quality global portfolio with significant opportunities and a clear strategy to maximize value for all security holders. Should security holders approve my reelection to the Boards, it would be my privilege to work with my fellow directors, Hugh and the executive team to continue to drive value for all of you.

Thank you, Debbie. The status of the proxy votes in relation to these resolutions are displayed on the screen. Do we have any questions or comments in relation to these items from those attending in person?

Sorry. We have 1 question online from Stephen Mayne. Does the outgoing Chair, Debbie Goodin, now concede that the Chicago Skyway acquisition hasn't added value, and it was inflammatory to pursue it against the wishes of our emerging largest shareholder IFM at the time. If Debbie had her time again, what would you have done differently in relation to the Chicago Skyway? Also, assuming IFM doesn't achieve control in the short term, does she believe that her successor as Chair is currently serving on the Board or are we looking outside for a new independent chair?

So Tess, I think I'll take it in 2 parts, if I can. So the question is around the acquisition of the Chicago Skyway. So I believe the acquisition of the Chicago Skyway was a very good acquisition at the time. The directors acquired Chicago Skyway at a time where we were looking for geographical diversification of our portfolio, and that was around the financial opportunity and the geographical opportunity that would provide for us by acquiring the Chicago Skyway.

In addition, the Chicago Skyway provides a much longer extension of our concession period for Atlas Arteria, and that was a key driver for the decision we made at the time. Since the time we've acquired Chicago Skyway, there has been material changes in our macroeconomic environment. So the strategy at the time from the Board, my view is that, that was an appropriate decision at the time to expand the portfolio of Atlas Arteria by acquiring the Chicago Skyway. I also believe that when we look at the strategy today and what we want to deliver as outlined by both Hugh and I at our AGM addresses, that this is the appropriate time to explore exiting Chicago Skyway, which is why we have issued a ROFO to Ontario Teachers'.

The other question is around our succession.

Yes.

Okay. So prior to the IFM offer, the Notice of Meeting was sent out to security holders. At that time, as I outlined in the -- and it was published in the Notice of Meeting, and as I've outlined today, I advise both Boards that it was not my intention to stand for reelection and to work through an orderly succession process. This has also been discussed with a range of our investors who are very supportive of that approach. With the IFM bid on foot, that succession will continue to be considered. But of course, the Board needs to maintain stability as we go through this very active period of time.

Thank you, Debbie. Tess, are there any other questions online in relation to this issue?

No, there are no further questions, Chair.

Thank you. Do we have any audio questions on the line?

Chair, there are no audio questions.

Thank you. I'll now hand back to Debbie.

Thank you, Fiona. Next, we turn to the remaining director reelections. Item 2b of the ATLAX AGM addresses the reelection of John Wigglesworth. Item 3a and 3b of the ATLIX AGM address the reelection of Fiona Beck and Kiernan Bell. The biographies of the directors standing for reelection were included in the meeting materials that were circulated to security holders. The respective Boards of ATLAX and ATLIX have considered the qualifications and experience of each of the candidates standing for reelection. The directors of ATLAX unanimously support the reelection of John as a Director of ATLAX. The directors of ATLIX unanimously support the reelection of Fiona and Kiernan as directors of ATLIX. John, Fiona and Kiernan are each regarded as independent by the relevant Board.

I would now like to invite John to address the meeting.

Good morning, ladies and gentlemen. My name is John Wigglesworth, and I'm really honored to address you today as a member of the ATLAX Board. I joined the Board in January 2023 when I assumed the role of Chair of the Audit and Risk Committee. In 2024, I also joined the newly convened Safety and Sustainability Committee. By way of background, I completed a 37-year career with KPMG in 2021. When I had the opportunity to work closely with a very large and diverse group of ASX-listed and leading global companies. I also have over 15 years' experience serving as a director on a number of listed private and public sector Boards. That's given me a really strong understanding of the practices and behaviors that underpin an effective and high-performing board. I firmly believe that my career journey equips me to continue to make a meaningful contribution to Atlas Arteria, and I also confirm that the other roles are hold outside ATLAX done in any way limit my capability or desire to serve the ATLAX Board for another term. With your support, I look forward to continue to serving both Atlas Arteria and its security holders.

Thank you, John. We now move on to the reelection of Fiona Beck and will play a prerecorded video address from Fiona.

Good morning, everyone. My name is Fiona Beck. It is a privilege to have the opportunity to speak with you today and to have served on the Board of ATLIX since 2019 and its Chair since 2023. I am a New Zealander, and have been a resident of Bermuda for over 25 years. I'm a Chartered Accountant, a member of Chartered Accountants Australia and New Zealand. Prior to joining ATLIX, I was the CEO of Southern Cross Cable Limited, a submarine fiber optic highway connecting Australia and New Zealand to the U.S.A. I held this position for 14 years.

I have extension of technology and infrastructure experience. And I believe technology helps frame and support great investment. More recently, I have expanded my experience into the ESG space with a focus on sustainability in cybersecurity. I am especially proud of the uplift in Atlas Arteria's Safety and Sustainability maturity in recent years as the inaugural chair of the Safety and Sustainability Board Committee convened in late 2024. Our development in this area can be seen in our 2026 annual report, which, for the first time, brings together our financial and sustainability reporting in the same cohesive document.

Another significant proof point is our strong performance in the various ESG benchmarks, including our MSCI ESG rating, which was lifted from AA to AAA last month, marking Atlas Arteria as a leader in the transportation industry. I currently serve on the Board of 2 other publicly listed companies, Oakley Capital Investments Limited, a private equity company with a focus on digital business models in Europe, and IBEX Limited, a provider of tech-enabled customer life cycle experience solutions for multiple Fortune 500 companies. I confirm I have the capacity and desire to serve the ATLIX Board for another term. My governance and business experiences, in particular, my skills in linking technology and infrastructure is relevant to Atlas Arteria as we look to build and optimize a world-class portfolio in a sustainable way. With your support, I look forward to continuing to serve on the ATLIX Board.

Thank you, Fiona. We now move on to the reelection of Kiernan Bell and we'll play a pre-recorded video address from Kiernan.

Good morning, ladies and gentlemen. My name is Kiernan Bell, I'm joining you from Bermuda. I am honored to address you as a member of the ATLIX Board, a Board that I joined in September of 2023. I am a lawyer by training and professional -- qualified as a barrister in England in 1994. I retired from the partnership of Appleby, a global offshore law firm in 2017, having served during my tenure as the Head of Dispute Resolution as well as the Managing Partner of the Bermuda office.

During the course of my professional practice, I've regularly advised boards of public and private companies on complex restructuring, legal and governance matters. And many of those companies and clients were -- companies with offices and operations in multiple jurisdictions. Over the past 20 years, I have been privileged to serve as an independent director on a variety of boards, both corporate and nonprofits. And I've served in that capacity on audit and risk committees, governance committees and latterly remuneration committees. I am on the panel as well of assistant justices of the Supreme Court of Bermuda, and I have completed recently a term as an independent senator on the Senate of Bermuda serving as the Vice President of the Senate.

Since my appointment to the ATLIX Board in 2023, I have endeavored to provide objective, independent and meaningful oversight, particularly with regard to Bermuda law matters and governance but also through my membership of the People and Remuneration Committee. I currently serve as well as a Nonexecutive Director of an LSE listed company, Oakley Capital Investments, and I also serve as a director on several unlisted Bermuda companies. I confirm I have the capacity and the energy to continue to serve on the ATLIX Board for another term. And with your support, I look forward to continuing to serve on the ATLIX Board. Many thanks.

Thank you, Kiernan. The ATLAX and ATLIX Boards with the exception of the respective directors in relation to their own reelection, unanimously recommend the reelection of John, Fiona and Kiernan. The status of the proxy votes in relation to these resolutions are displayed on the screen.

Do we have any questions or comments in relation to these resolutions from those attending in person? Can you get through? That's all right. There you go.

My name is Mike Muntisov. I'm a volunteer company monitor from the Australian Shareholders' Association. We advocate for transparency and fairness for retail shareholders. And, as a reminder, Atlas Arteria has about 20,000 retail security holders. First, I just want to make the comment, and thank you for continuing to hold your AGMs as hybrid meetings, which really maximizes shareholder engagement.

My question is to Kiernan Bell. Atlas Arteria has a minimum security holding policy for directors that requires them to hold the equivalent of 100% of their annual fee within 3 years of their appointment. Now Ms. Bell has a very small holding and is well short of that requirement. So I'd like to ask her what commitments she can make to satisfy security holders that she will maintain this policy, bearing in mind, she only has, according to the policy, 4 or 5 months to get her security holding up to the policy requirement.

Thanks, Mike, and thanks for coming today. We enjoy the engagement with the ASA. Now this is where we see the technology really works because we're going to go to Kiernan, who I hope has heard the question appropriately and is prepared to provide the answer.

Yes. Thank you. Thank you, Debbie, and thank you for the question. Yes, I absolutely intend to meet the policy within the time frame. I'm ready to go when the next trading window opens. And will buy the securities as and when the trading window opens. And of course, keeping into consideration any requirements from the unsolicited offer from IFM. So as I understand, yes, absolutely, I intend to comply with the policy well within the time frame. Thank you.

Okay. Can I just ask a follow-up question then. What -- and this is for the Chair, I'm not sure whether it's you, Debbie or Fiona. What would be the consequence to Ms. Bell if she fails to achieve that commitment?

Yes. So it was an interesting thing about the shareholding policy, right? And that crosses both directors and management. But it would be considered in a recommendation for reelection by the other directors if a director had not meet the policy requirements. I have a commitment from all the directors on the ATLAX and ATLIX Board that they will meet their policy requirement. And what I would say is we have a trading windows for ATLAX are closed a lot of the time, particularly with the activity that's been going on with regard to our strategy and now more recently with the IFM bid. When it opens up, you'll see -- I think you see that the trading does occur. But it would be enforced, but it would be enforced through recommendations to the AGM.

Tess, are there any questions online in relation to these items?

Yes, Chair. I have a question from Mr. Stephen Mayne. In her formal address, the Chair describe the behavior of the IFM nominees on the Board as perplexing. Could John Wigglesworth, as 1 of the Australian-based directors on the ground, please provide his perspective on this, he said, she said situation. Is he also perplexed and what does he think explains this situation?

And so before I pass over to John, I want to clarify exactly what I did say in my AGM address. And what I did say in the AGM address is that the strategy of Atlas Arteria is supported by all of our Board directors, including the IFM nominee directors. What I said was perplexing is a criticism we are getting from IFM itself regarding our strategy. They are two different entities. Can I make it clear, we see IFM in 2 parts. We see our directors Danny and Ken sit on our Board as our IFM nominee directors on the Board. Our IFM nominee directors are bound by the director's representation agreement, the conflicts of interest protocol, and also by their requirements of their fiduciary duties under the corporation's law. We have, at no time, question the integrity or the contribution of our IFM nominee directors on the Board. We support them wholeheartedly and we have value and we continue to value their contribution.

What I see separately is IFM-HQ. They are the shareholder who is responsible for the bid. And that is, when I refer to the perplexing narrative that we are getting regarding our strategy, it is coming from our IFM shareholder rather than our IFM nominee directors. With regard to what John can clarify, and I think the he said, she said, is I can confirm that the IFM directors have been fully involved in all board deliberations regarding our strategy. And that strategy has been provided to the market as a part of our public presentations and those public presentations are also signed up for the Board, of which they are part of that decision-making. But maybe if I can leave it, John, you've had time to think of your response?

So Stephen, thank you for the question. Look, the only thing I'd like to add to Debbie's comments is, I think, both Danny and Ken are making a tremendous contribution as directors of the ATLAX Board. And at all times, I've observed them working very hard to continue to act in the best interests of the company as they should do. I have no examples where I sitting in the room have felt like they're sitting in the room as IFM representatives on the contrary they're working very hard not to do that. So I'm extremely comfortable with how they're behaving. And the director's representation agreement was a very important stage in our process and gives us a great framework, which allows us to work closely with them, it helps us understand how the deal with issues around conflicts of interest, and it's working very effectively.

Thanks, John. Tess, do we have any more questions?

Chair, there are no further online questions.

Do we have any audio questions on the line?

There are no audio questions. Thank you, Chair.

Next, we will consider Item 2 of the ATLIX AGM. This item of business relates to the reappointment of Deloitte Touche Tohmatsu as the Auditor of ATLIX from the conclusion of the meetings. All companies to which the Bermudian Companies Act applies are required to appoint auditors at each Annual General Meeting to hold office until the close of the next Annual General Meeting. Deloitte has confirmed its independence and our Audit and Risk Committee and the boards are satisfied with this independence. The status of the proxy votes in relation to this resolution are displayed on the screen.

Do we have any questions or comments in relation to this resolution from those attending in person?

Tess, are there any questions online in relation to this item?

Chair, there are no online questions in relation to this item.

Do we have any audio questions on the line?

Thank you, Chair. There are no audio questions.

Next item of business is Item 3 of the ATLAX AGM, the adoption of the ATLAX 2025 remuneration report. The ATLAX 2025 remuneration report has been circulated to security holders, including a covering letter, which explains Atlas Arteria's remuneration philosophy and framework. The outcomes of executive remuneration in 2025 and the annual fees paid to directors. The report and the covering letter can be found in the 2025 annual report and are available on our website. Voting restrictions apply to this resolution and are set out in the ATLAX Notice of Meeting. The status of the proxy votes in relation to this resolution are displayed on the screen.

Do we have any questions or comments in relation to this resolution from those attending in person?

Tess, are there any questions online in relation to this item?

Chair, there are no online questions in relation to this item.

Do we have any audio questions on the line?

Thank you, Chair. There are no audio questions.

I'll now turn to Items 4 and 5 of the ATLAX AGM, which seek approval for the grant of performance rights and restricted securities to the Managing Director and CEO, Hugh Wehby. Details of the terms and conditions of the grants and the reasons for the grants are contained in the remuneration report and the ATLAX Notice of Meeting. Voting restrictions apply to this resolution and are set out in the ATLAX Notice of Meeting. The status of the proxy votes in relation to these resolutions are displayed on the screen.

Do we have any questions or comments in relation to these resolutions from those attending in person?

Tess, are there any questions online in relation to these items?

Chair, there are no online questions in relation to these items.

Do we have any audio questions online?

Thank you, Chair. There are no audio questions.

The next item of business are Item 6 of the ATLAX AGM and Item 4 of the ATLIX AGM, which seek approval to increase the Nonexecutive Director Fee Pools for ATLAX and ATLIX. The reasons for the proposed increases are outlined in the Notices of Meeting.

The status of the proxy votes in relation to these resolutions are displayed on the screen.

Do we have any questions or comments in relation to these resolutions from those attending in person?

Tess, are there any questions online in relation to these items?

Chair, there are no online questions in relation to these items.

Do we have any audio questions online for these items?

Thank you, Chair. There are no audio questions.

Thank you. That is the last of the resolutions. I will now take any general questions on the company's operations, strategy or the takeover offer from the floor and online.

Are there any questions from those attending in person? First, if you want to come up to the microphone, and we'll go first.

Chair, thanks for your presentation. Just a couple of questions...

State your name...

Oh, sorry, [ Mark Tobey ], representative of [ Bena Lisa ] Superfund shareholder.

Could you come closer...

Sorry.

And your introduction again.

Sorry, Mark Tobey, representing [ Bena Lisa ] Superfund, a long-standing shareholder. First question, just around the toll roads and your comments about a reduction in traffic. Maybe it's early, but are we seeing any detection of EV vehicles, i.e., BYD use that we're now seeing in Australia on some of the toll roadways to start to replace some of the diesel vehicles which might be being taken off the road.

Thanks very much for the question. In relation to our traffic performance, we're still seeing growth across the portfolio. In fact, very strong growth in Virginia. Slightly weaker performance in heavy vehicles in the Chicago Skyway and light vehicles in France, but overall growth. In relation to the penetration of electric vehicles, generally, a much higher take-up of electric vehicles in Europe than we do see in Australia, but that is not the same trend as we're seeing in the U.S. So it's a very high proportion on the APRR network in France, but still relatively low on our U.S. networks.

Right. And then just a second question in terms of French politics and a little hard to speculate on French politics. But in terms of even the cost of living pressures that we're seeing right across Europe, and the political landscape in France, how does that kind of frame the discussion around what might happen on setting the future if this situation prevails into the future sort of costs and feeding into the political background, if you like.

Yes, it is incredibly difficult to speculate on French politics, but the budget is a challenge. And so what we have seen in the last couple of years, which Debbie referenced in her address is, a temporary tax called the temporary supplemental tax or TST, which has impacted our cash flows. We expect that to be temporary, albeit we expect the budget challenges to remain.

In terms of what that means for the future opportunities and challenges in France, we have a 2027 Presidential Election. It is very uncertain who will prevail in that election and whether they have a balance of power to be able to implement their policies. One thing is quite clear, though, is we won't get clarity on the new concessions prior to that Presidential Election. What we have heard, though, from the bureaucrats after the conference that was held on this very matter last year, is private sector involvement going forward beyond the current concessions, continuation of the concession model, but perhaps smaller geographic boundaries in shorter terms than we've seen historically.

To put that in context, I think it's important. Our current network is 2,000 kilometers. So smaller geographic boundaries doesn't mean small, it just means smaller than they are today. And the current concession was around 60 years. So again, short it doesn't mean short. It means shorter than 60 years. So we're quite buoyed by the framework law that's being proposed for concessions, but we won't have certainty for another at least a year.

And then just lastly, if I could, a little perplexed, I guess, on the Chicago, the timing of the discussion around the sale of your interest. And also, could you confirm there's no provisions or the carrying value -- sorry, go back to financial accounts in relation to that asset and how it's being held in your accounts. And -- do you -- can you confirm there's no contemplation of provisioning against that asset value?

So I might take the first part. The decision to issue a ROFO and indeed was made by all of the directors, that's a first very important thing as part of our strategy. The other important part of it is that we issued our ROFO 5 days before we received the takeover bid from IFM, which we did not know about. And the other part of question was around...

Around the accounts...

The accounts, that's right. So the part around the account. So first of all, the ROFO is included in our accounts. And I might just ask John just to make a reference to as the Chair of our Audit and Risk Committee. It's in our accounts. And maybe just take the accounting question, John, and then in summary.

Yes. So in terms of the carrying value, I guess we -- as you might imagine, spending a lot of time looking at fair values of assets in the portfolios at the moment. But we do run a very conventional, but I think very sophisticated process in the lead up to each reporting date around impairment. There's kind of 2 phases to that. We look for indicators of impairment first and if they're present, then we would do a full-blown test of the fair value of the asset. Those processes haven't occurred yet because we're sitting here in May and where our half year is 30 June. But there's nothing on the table at the moment that would have any warning lights going off in relation to the carrying value of the Skyway.

My name is [ Bhu ]. I'm a corporate representative. My question is with regard to this hostile takeover. Have we given any thought of should it succeed? What happens to those who have voted not in favor of the hostile takeover?

So first of all, our recommendation to all our security holders is that you reject the offer. That's been set out very clearly. What I would tell you is that on the 26th of May, we will be releasing a very detailed target statement. And that target statement will provide much more detailed information from the company. It will also provide an independent expert's report. And therefore, you will be able to be much more fully informed about your decision at that time. But following that, the bid must stay open for a further 2 weeks. It could be extended for longer. But to be clear, the current offer before you is at $4.75, that is less than the current trading price, okay? I can't recommend you more than that, but I'd point out the current bid is $4.75.

I'm not asking for your recommendation with regard to my personal thing. I'm asking with regard in general. What happens, let us say, in 6 months' time, this takeover offer succeeds. And there will be plenty who won't have voted for it.

So first of all, it's an academic question that I can't answer, right? Because who knows what the situation could be in 6 months' time. So all I can say to you is if I look at the current bid in front of you, it is opportunistic, and it's low value, and it does not represent fundamental value for the company. And I would encourage you to reject it. That's all I can say. I cannot predict what will be the situation in 6 months' time.

Mike, we should have got you [ turning ] closer to the microphone?

Yes. That was a mistake here. I just want to follow up on the Chicago Skyway discussion and comments. You mentioned that, that was the right strategy at the time of the acquisition, and you mentioned that things have changed. But it's not clear to me exactly what the strategic basis for now putting it up for sale. What is the strategy behind putting it up for sale? If you could outline that.

Okay. And so -- Hugh, do you want to? Okay.

I'm very happy to take it, Debbie. Look, as Debbie mentioned, she covered the strategy around the acquisition. In terms of the current portfolio across the board, not just Skyway about 12 months ago, I've been in the seat for 6 months, and we conducted a strategy session with all directors looking at optimization of the existing portfolio. And when we looked at the Dulles Greenway, there were very clear and different approaches we're proposing to take on rates. We looked at APRR, very excited about network enhancements and then concessionary tenders. When we looked at Skyway, the biggest challenge we are facing is the delta between the market's view of value and analysts, in particular, and what our view of value is. And there weren't obvious short-term operational improvements to close that value gap. That value gap also exists in what we're seeing from IFM. And so as we look at it, after 12 months of consideration, we decided we would like to test the market. To test the market, the ROFO is a prerequisite, and that is a binding offer to sell. If teachers exercise it, we have to sell, as I said, if they don't, we then have the option to test the market. It's not a formal guaranteed sale process, but we believe it is 1 of the key options to consider in closing the gap between market perception of value and our perception of value.

Okay. I've got a second question, if I could. I assume that you've met with some of the larger shareholders regarding the takeover proposal. And if you have, could you -- is there anything you can share with us about those meetings and their views.

So yes, I can confirm. I've had lots of meetings with shareholders over the last few weeks. And we have a normal cadence of meetings with our security holders and leading up to the AGM indeed before we receive the offer. Fiona Beck and I were on our pre-AGM Chairman's roadshow. And in fact, we met with you at that time as well. So we have well-established relationships with our shareholders. When we received the bid, we again contacted all of our security holders, our large investors -- large investors and spoke to them about our holding position with regard to receiving the bid because we had not received any notice in relation to the bid. And we had an initial conversation and actually received some feedback from them. Subsequently, last Wednesday, we issued our ASX announcement, recommending that investors reject the bid on the basis that is too low, opportunistic and highly conditional.

What followed that is Hugh and I basically went and met and we couldn't physically met, we met in person with all of our large shareholders. What I would say is the position that the Board has taken is well supported by our largest investors.

Is there any more questions from people attending in the room today?

Tess, are there any general questions online?

Yes, Chair. I have a question from Stephen Mayne. Could Danny Elia please comment on why IFM hasn't voted in favor of the chair's reelection today, and whether IFM will abstain on all items in the poll like it did in the proxies or is IFM planning another AGM floor vote like it is done at Atlas Arteria AGMs in the past? If Danny is not in control of the IFM voting today, who is making those decisions? Is it Kyle Mangini, who has been quoted in the press or the IFM Board.

Thanks for the question, Stephen, and I will ask Danny to comment in a minute. As I was clear earlier, we look at IFM in 2 parts. We have our IFM directors. And as we've said, we believe the IFM directors are undertaking their roles on their board and acting in the best interest of all security holders. The IFM nominee directors voted in support of all of the resolutions. The 4 main proxy advisers recommended to investors in favor of all resolutions. IFM has taken the position to abstain. Now we find that disappointing given they have voted in favor of resolutions previously. We have no indication that the abstained vote will be changed. There's no indication that, that vote will be changed today in the meeting. We also know that our IFM nominee directors have not participated in what IFM's view are on how they vote on these resolutions. But perhaps, Danny, given the question was targeted at you, and as a question that you can just comment perhaps on your role in forming the vote to IFM as a shareholder might make?

I'm delighted to say I have no information to report. I certainly as a Director of the company don't take directions from IFM and IFM doesn't take directions from me, really strict arrangements regarding information flow. People are often curious around this, it does get all put at times. But Ken and I are absolutely aligned with the Board and many of the decisions that you've actually seen and spoken about today. So we're quite proud of our contribution to the Board, and that remains. We are not operating on the inside of IFM at all any part of their deliberations or their strategies. We read the papers with as much curiosity as the rest of you because that's all news to us.

I have a related question, Chair, from Stephen Mayne. Could Danny Elia, who has been on our Board since August 2024, please summarize who he has in the room at Dexus Tower for IFM today and exactly what he is playing at with his bizarely structured hostile takeover and the Takeovers Panel action that he, as the Global Head of IFM infrastructure initiated yesterday? Also, exactly how did you not know about the recent engagement Atlas has had with Ontario Teachers' around the Chicago Skyway asset when he is serving on this Board and wasn't excluded from discussions. The Chair has today described his behavior as perplexing. What is his response?

Sorry, Danny, just before you answer. First of all, what I want to clarify is that yesterday IFM made an application to the Takeovers Panel in relation to Atlas Arteria. The Takeovers Panel released a media release yesterday, and that clearly sits out the nature of the application from IFM to the Takeovers Panel. We are unable to discuss that application under strict requirements from the Takeover Panel rules.

What I would say is, I know that Danny and he will assure you, had no knowledge about the Takeover Panel action nor how the bid is being conducted by IFM-HQ. The other thing is I want to comeback around the strategy of the organization and indeed, the decision to release the ROFO. All directors participated in the decision to issue a ROFO to Ontario Teachers', and we saw that in line -- we see that in line with our strategy. And I'm sure Danny will be able to comment that he was also a part of the decision to issue a ROFO.

My comment around perplexing is that if you have your largest shareholder under a director's representation agreement that has 2 highly qualified directors on your Board that work with you informing the strategy of the company. Then it is interesting, and as I said, perplexing that the shareholder who indeed appointed those 2 individuals then criticizes the strategy of the company. So my comment around perplexing is for IFM-HQ as a shareholder, indeed not to our directors.

Danny, maybe if I can ask you to talk about the ROFO, and I'm sure you'll confirm that you didn't know about the bid or the Takeover Panel.

I can confirm that. I think it's really important. I mean, I think the word perplexing arises because you've got IFM nominees and you've got IFM as a shareholder. We don't do our homework together. So when Ken and I look at a decision that's before the Board like the ROFO decision and support it as we did, we did that work on our own and our capacity as directors acting on behalf of every security holder. And that's where we have arrived at. IFM has arrived at a separate decision to that or review to that. I could not give you any insight into that because I have no color or no insight into that. The separation I cannot stress is incredibly strong right down to minutia like what devices Ken and I actually put our information on it. There's a very strong separation.

Thanks, Danny. Do we have any more questions on line, Tess?

I have another question from Stephen Mayne. If we sell our 66% stake in Chicago Skyway, our business will be materially smaller. How would such a substantial reduction in our business intersect with Hugh's incentive arrangements? Also, how did the change of control arrangements work if IFM gets above 50% and seizes board control?

So I might comment on Hugh's incentive arrangements and Hugh can think about how we want to address the issue around change of control and how that interacts with Chicago Skyway. So Hugh's incentive arrangements are very clearly set out in the remuneration report. He has its STI criteria that he needs to meet after his KPIs 70% balance to financial criteria, 30% to nonfinancial criteria. That is clearly set out. The LTI also has clearly set out metrics about what needs to be achieved to satisfy in the normal course of the LTI testing and vesting. The change of control arrangements are also set out in our remuneration report, and they are there for all shareholders to review. I want to point out that directors maintain discretion around how STI and LTI arrangements vest in the event of a change in control, and that is also clearly set out in the remuneration report.

Hugh, I might refer to you around change of control in Chicago Skyway.

Thanks, Chair. So there is a put option in Chicago Skyway. And if I give a very brief background, when we bought Chicago Skyway, we brought into an existing business with an existing shareholders' agreement with change of control provisions. The change of control provisions were not able to be applied to a listed company. So there was a new put option. Practically, what that means is that if we have a change of control, if a shareholder gets more than 50% of Atlas Arteria, our partner, Ontario Teachers' is able to sell their stake, their 33% stake in Chicago Skyway to us at fair market value plus 7.5%. So a premium to fair market value. That has been in existence and disclosed in the acquisition documents. It is valued and disclosed in our accounts as a potential financial liability with probabilities associated with it, but the trigger for that is 50%.

I want to stress that there's nothing before 50%. It still requires a decision of Ontario Teachers' to sell their shares. And there are a number of strategies as part of our value optimization that we have pursued in order to protect shareholders and protect value in the case of that being exercised.

Thanks, Hugh. Tess, are there any other questions?

I have another question from Stephen Mayne. Could audit signing partner, Samuel Vorwerg from Deloitte, comment on whether he is getting involved in the decision-making process in deciding what information is made available to the 2 IFM nominees on the Board? If the auditor is not involved, who from outside the Board is providing the advice on where that line should be drawn? Could the Chair and IFM nominee, Danny Elia, both please comment on whether there has been any disagreement regarding the application of conflict of interest principles, the provision of information and requirements for the IFM nominees to leave Board and Committee meetings.

So Tess, I think I'm going to need you to break down because it's like multiple layers in that question. So can you just give me a bit at a time.

Sure. So we'll start with the question does the audit partner Samuel Vorwerg get involved in the decision-making process in deciding what information is made available to the 2 IFM nominees? And if it is not he, who was involved? Who from outside the board provides that advice?

So Sam, I'll get you to stand up at the microphone, but I can confirm that the auditor does not get involved on information that goes to the nonindependent directors being Danny and Ken. That is a decision that lies with me. And I have absolute control of that under the director's representation agreement and the conflicts of interest protocols. But Sam, did you want to comment?

That is correct. I have no involvement.

And the next part. Could the Chair and Danny Elia both please comment on whether there's been any disagreement regarding the application of the conflict of interest principles?

So a conflict of interest protocols importantly apply to all directors. And I think that, that's really important. So they're not specifically called out. And then we have the director's representation agreement which effectively assist us in governing the arrangements between the IFM nominee directors and the Board.

I can't recall any conflicts, or I mean, I think we obviously have meetings that do not include the 2 IFM nominee directors. We have them in the normal course. We had them before we received a takeover bid. Since we have received the takeover bid, however, we have formed an independent board committee, which is a requirement and the independent board committee of ATLAX excludes the 2 IFM directors, but does include the Managing Director. And the independent board committee of ATLAX together with ATLIX are considering all items in relation to the takeover offer. But indeed, we do do board deliberations that are defense-related in relation to how we would prepare for defense that has excluded the 2 IFM directors. But what I would assure you is if we're having a board meeting and that excludes the 2 IFM directors, I have the common courtesy to actually let them know that we're having that discussion.

Danny, do you want to comment any further or can you put...

It's really -- I think, Debbie, just as you've said, and I think the other thing I'd just be really clear about the dynamics of the Board have been really constructive. And so it's awkward when you sent out of room. But the dynamics have been really clear about that and I think, on all fronts. So its been a really high functioning board, I think, and when the board is needed to kick us out, that Debbie's call, we take no offense, and that happened on a number of occasions.

We have one final question from Stephen Mayne. Why don't Ken Daley and Danny Elia resign immediately from the Board. Surely, it is untenable to remain on the board given what their nominating shareholder is doing. This is like a political leadership challenges staying in cabinet. You need to resign until the leadership challenge is resolved.

Okay. And so first of all, I'm going to hand over to Danny and then I'll hand over to Ken. I mean, that's why I think it's important that we actually reiterate that Danny and Ken are undertaking their roles in accordance to the fiduciary duties outlined in the corporation's law. Those duties continue. We have the takeover offer, and we will continue to deal with the takeover offer with the independent directors. Separately, we're still got a company to run, and we are going to run that business in the best interest of all security holders, and we believe that Danny and Ken will continue to make contribution for all of our BAU decisions that we would have in the normal course of business. So Danny?

Yes, no intentions to resign. I think there's a lot of opportunities in the company, and I look forward to contributing as I have. Then Ken and I have to work doubly hard really to build trust at a Board, which is a fundamental part of any board working and that's going to continue. IFM nominates me to the Board. So that's their prerogative to do whatever they'll do, but I'll faithfully do my duties to the Board until otherwise.

Thank you. Ken?

Look, very little to add. I completely agree with Danny's comment. I think I would bring good operational experience across a long career in toll roads, and I'm very happy to work in the interest of all security holders.

We have one more question from the floor, of course. If you could just reintroduce yourself.

Yes, Mark Tobey from Bena Lisa Superfund, which are my 2 daughters. So given what I've sort of heard in terms of what's going on, I guess, conspiracy theories might say that IFM is seeking to put the company up for sale. Could you confirm that you haven't solicited any higher bids and/or had any discussions, which is disclosable, of course, in any event, but maybe some comments around that, whether you might see the companies or the whole entity is actually in play?

So what I would say is a few parts. As we disclosed to the ASX last week, we believe the IFM bid is designed to accelerate their creep of Atlas Arteria. We are also suggesting that -- we are recommending to investors to reject the offer. The offer is at $4.75. We recommend that you reject. And how that plays out going forward? I haven't got a crystal ball, right? And so I can't say. What I can say to you is that we will be releasing a target statement on the 26th of May. That target statement responds to the bid statement that was released on Monday by IFM. It also provides -- will provide a high level of disclosure that I think will satisfy some questions that investors will continue to have. But importantly, we'll have an independent expert's report. So you will also have that information to form your view.

Tess, is there any more questions?

No further questions, Chair.

Okay. Do we have any audio questions online?

Thank you, Chair. There are no audio questions.

That concludes the Q&A section of the meeting. Online voting will remain open for the next 2 minutes to allow time for security holders and proxy holders to submit any final votes. For those attending in person, please complete your blue voting cards. Computershare staff are in attendance to collect the voting cards. Has everyone now completed -- look, I'm just going to give a couple of minutes so that we get -- make sure I complete mine.

[Voting]

Has everyone now completed their voting card or do you need more time?

I declare the poll is now closed. As there are no further business, I declare the ATLAX 2026 Annual General Meeting closed, and thank everyone for attending and for your continued support of Atlas Arteria.

I also now declare the ATLIX 2026 Annual General Meeting closed. And on behalf of the ATLIX board, I thank everyone for your support. We wish you a good day.

The formal results of voting will be released to the ASX later today and posted on our website. With the meetings closed, we invite those attending in person to join us for refreshments. Thank you for your attendance, and I wish you a good day.

Good day, and thank you for standing by. Welcome to Atlas Arteria 2025 Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded.

Due to legal restrictions, we are only able to communicate directly with eligible security holders and investors with respect to their eligibility to invest in Atlas Arteria securities. Details in relation to the ownership restrictions that apply to persons in the United States and other U.S. persons that are not qualified purchasers and qualified institutional buyers are set out on Atlas Arteria's website under the U.S. ownership restrictions. If you are not a qualified purchaser and qualified institutional buyer, please refrain from asking questions in relation to the securities as we are legally restricted from answering those questions on this call.

I would now like to hand the conference over to Mr. Hugh Wehby, Chief Executive Officer. Please go ahead.

Thanks very much, moderator, and good morning, everyone. It's great to be speaking with you all again today. So I'm really pleased to present Atlas Arteria's 2025 results alongside our new CFO, Vincent Portal-Barrault. As most of you would know, Vincent took on the CFO role in November last year. And of course, he knows the business well, having been with Atlas since 2018, most recently as Group Executive, Europe Strategy and Portfolio.

First up this morning, I'll take you through some of the year's highlights before talking about our priorities to create long-term value. Vincent will then take you through the financials in more detail, and we'll leave plenty of time for questions at the end.

We're pleased with this set of results, which reflect steady traffic growth, particularly in France and on the Dulles Greenway. A 9.4% increase in proportional toll revenue, a 9.3% increase in proportional EBITDA were also supported by CPI-linked toll increases in several jurisdictions. While these numbers highlight the strong operational fundamentals of our businesses, you can see free cash flow per security was slightly down. This was mainly due to the impacts of the French government's Temporary Supplemental Tax or the TST, which was levied on large businesses in 2025. Despite this, we will deliver a distribution of $0.40 per security for 2025, in line with our guidance.

And today, we're announcing the same stable distribution of $0.40 per security for 2026. This outcome is testimony to the strength and resilience of the portfolio capable of delivering through varied economic and political conditions, thanks to its diversity in geographic, regulatory and currency exposure.

2025 was my first full year as CEO, and a key priority for me was ensuring we had the right people in the right roles, supported by a leadership structure that simplifies how we work, sharpens accountability and enables us to deliver sustainable value for all of our stakeholders. Our new executive team took effect in November with broader and more connected portfolios to enhance decision-making and execution. Amanda Baxter moved from a predominantly North American-focused role to Chief Commercial Officer. Amanda, who is based in Virginia, now has global accountability for business performance, corporate development and partnerships. Geraldine Leslie's role was broadened to Group Executive People, Culture and Sustainability, including leading the delivery of Safety, Risk and Corporate Support Services.

During the year, we also appointed 2 very high-quality CEOs at our U.S. businesses. Luis Tejerina was appointed CEO of Chicago Skyway in May, and Kara Lawrence joined Dulles Greenway as CEO in October. Many of you will know Kara from her time as CFO and acting CEO at the Skyway. Both have broad experience in leadership, business transformation and the road sector, and we are working closely with each of them to make sure we get the most out of our businesses.

So moving to Slide 7, and a simple but powerful change we've made this year is to our vision statement, partnering to deliver world-class road experiences. Most importantly, it makes it clear that partnerships are fundamental to our success. These partners include our co-investors, road management teams, host governments and local communities. Our vision is what guides the business and our ambitions. It is the basis on which we seek to deliver compelling long-term value for investors and all of our stakeholders. And by working towards this vision, we will create opportunities for ourselves and for our partners.

Underpinning our vision are 4 value creation pillars, which provide a clear framework for the way we make our decisions, manage risk and work with these partners. And you can see these pillars as we move to Slide 8.

The strategy pillar is about building and optimizing a world-class portfolio of road businesses to maximize cash flows and support sustainable distributions. We really think about this pillar in 3 ways: Firstly, unlocking value from our existing businesses, both in terms of operational performance and cash flows; secondly, creating more value by building on the existing portfolio's footprint; and finally, finding new sources of value beyond the current portfolio.

Our next pillar reinforces the importance of investing in high-quality partnerships which strengthen our competitive positions. In this context, by partnerships, we are talking about our operating teams who are vital to ensuring our roads are performing at their best and the partnerships with our co-investors. Our development pillar makes it clear that a disciplined approach to growth is nonnegotiable. Our existing roads can go through operational improvements in carefully planned projects, but we are also considering new opportunities to grow or refocus the portfolio. The key here is discipline. We will prioritize opportunities with the ability to deliver distribution accretion, create compelling investor value and to support a balanced global portfolio.

Finally, none of this is possible without effective capital management. Maintaining an optimal capital structure across our diversified portfolio gives us the flexibility to allocate capital efficiently and provides the basis both for stable distributions to investors and the facilitation of growth.

I want to give a little bit more color to the way we are thinking about unlocking value beyond pursuing operational efficiencies at our existing businesses. We have several organic growth opportunities in our existing businesses, including potential new concessions like the A412 in France and, of course, preparing for new major concession opportunities in France, which I'll cover further in a couple of slides.

We continue to assess new opportunities in OECD markets where we see attractive risk-adjusted returns. We are particularly looking for opportunities that complement and diversify the portfolio and we plan to maintain flexibility in how we fund any new investment. Of course, partnerships play a critical role in this strategy. And Slide 10 shows the lenses through which we prioritize partner selection and engagement.

Primarily, we recognize that high-quality partnerships can create opportunities that Atlas Arteria could not capture on its own. As a pure play investor in toll roads, we bring strategic leadership, deep sector expertise and streamlined decision-making processes. We're agile in how we structure and evolve partnerships, and we have strong access to capital, which makes us a reliable and value-adding partner. Importantly, though, quality partnerships create real benefits on both sides. Not only do they open new access to opportunities for us, but they also allow us to combine insights, capabilities and experience to create value at all stages of a business life cycle. They support capital efficiency, risk mitigation and stronger engagement with regulators, lenders and other stakeholders.

Importantly, we are also very clear on the fundamentals of a good partnership. It starts with a shared vision for how to create long-term value. Similar appetites for risk and a willingness to work genuinely collaboratively. Transparency, clear decision-making and escalation processes are also essential to ensuring partnerships remain constructive and focused on priority outcomes. These fundamentals are what we continuously go back to when identifying the right partner when deepening existing relationships and we're building new ones to strengthen the portfolio and support long-term value creation.

So now moving on to future opportunities in France. As you know, France's major motorway concessions begin expiring from 2031, and the government is currently considering the framework that will apply to future concessions. We believe the long-term outlook for toll road operators in France remains positive. The Ambition France Transports process reaffirmed the importance of tolling frameworks in funding the country's transport infrastructure needs. We jointly control APRR with Eiffage and have worked with them for the past 20 years. APRR itself benefits from an experienced management team, deep stakeholder relationships and a solid balance sheet.

In February, the French Parliament approved the 2026 finance law and extended the temporary supplemental tax for an additional year. Importantly for us, as renewal processes approach, the stability, clarity and certainty of concession and tax settings will be important inputs into our bidding decisions. However, overall, we are confident APRR is well placed to participate.

Moving to Dulles Greenway, and as I've mentioned, we're very excited to have appointed Kara Lawrence as CEO. Kara has come across from the Skyway and has spent time taking a fresh look at business performance and operations. She has supported the recent rate case, including providing testimony and representations on Dulles Greenway's financial performance and the role that sustainable rate increases play in this. In December, we submitted a rate case to the Virginia State Corporation Commission, requesting increases to the maximum toll rates and proposing alternative pricing options. The submission draws on multiple working group sessions with key stakeholders, including the State Corporation Commission, Virginia Department of Transportation, Virginia Attorney General's Office and Loudoun County, ensuring the record is informed by early engagement and a well-developed understanding of the key technical inputs. More broadly, we continue to pursue a multifaceted approach to unlocking value from this business.

I'll now hand over to Vincent to take you through our approach to capital allocation.

Thanks, Hugh. I'm pleased to be here today in Melbourne to present the full year 2025 results, my first as CFO at Atlas Arteria. Before we go into more detail on the financial performance for the year, I would like to start by reminding you of our capital allocation framework, and the approach we take to create sustainable distributions and drive long-term value for shareholders.

The capital allocation framework that you see on this Slide 13, explains how we allocate our cash flows between distributions and reinvesting in our businesses. It is unchanged from previous periods. This framework, combined with strong underlying performance is the base on which we can deliver stable distributions to investors in the short term and build opportunities which increase long-term value.

Let's now discuss the full year 2025 financial performance in more detail. In 2025, our businesses performed well with steady traffic across the group despite an uncertain global geopolitical environment. Increases in toll prices as well as positive movements in foreign exchange rates, supported higher revenues, up 9.4% and a steady EBITDA margin. The strength of the balance sheet and the solid underlying business performance give us the confidence to confirm the distribution guidance of $0.40 per share for 2025, and to provide guidance of $0.40 per share for the 2026 distribution. At the half year presentation in August '25, we noted that we expected that the full year distribution for 2025 would be above our policy range of 90% to 110% of free cash flow.

Given that the TST has been extended for a further year, we are also anticipating that 2026 could fall at the top or slightly outside of that range. Nonetheless, we continue to focus on optimizing our portfolio and unlocking cash flows, and we expect to be able to grow free cash flows over the next few years.

To further support stable distributions, we have continued our FX hedge program, protecting against significant currency fluctuations on a portion of the expected euro distribution from our businesses. These arrangements have had 0 upfront cost and the program is on a rolling 12-month basis. Going forward, we will continue to assess the appropriate coverage level and FX rate ranges.

The balance sheet across our businesses and at the corporate level remained strong. During the year, $1.4 billion of bonds and notes were priced at APRR and Chicago Skyway, supported by strong investor demand. We will continue to assess refinancing opportunities in 2026 to maintain optimal capital structures across our businesses. At the corporate level, the available cash balance is $151 million at the end of 2025. Managing our balance sheet and cash position carefully provides funding flexibility and a buffer to absorb temporary impacts to cash flows.

Before we go through the financial results in detail, let's look at operational performance. Traffic at the APRR Group rose 1.4% in 2025; at ADELAC growing commuter volumes to Geneva lifted traffic by 1.5% for the year; in Germany, at the Warnow Tunnel, traffic was down 3% compared to 2024 due to roadworks; and in the United States, Chicago Skyway hedged down 0.3%, reflecting the impact of U.S. tariff-related disruptions; and Dulles Greenway traffic continued to grow strongly, up 8.2%, despite the impact of the U.S. government shutdown, which ran for 6 weeks in the fourth quarter. The continued growth there demonstrates the value customers see in this road compared with heavily utilized alternatives.

So far this year, APRR traffic has been impacted by farmer strikes and difficult weather conditions. Similarly, there have been some weather-related disruptions at both our U.S. businesses, and whilst the influence of winter weather is not new, particularly in Chicago, winter storms have been unusual in their severity over the past 2 months. The roads have recovered well, and we will, of course, provide the full impact to the quarter in our quarterly traffic release.

On the next slide, we can see how traffic results have translated into our proportional results. We have continued to see solid growth in toll revenues and EBITDA into 2025, which grew by 9.4% and 9.3%, respectively, resulting in a stable EBITDA margin of 75%. This reflects the traffic growth explained on the previous slide, combined with inflation-linked toll increases and favorable movements in the euro and U.S. dollar exchange rates against the Australian dollar. Hugh mentioned earlier, the resilience and diversity of our portfolio in geographic, regulatory and currency exposure, and we can see this coming through in the proportional results.

Moving to our cash flows for the year on Slide 18. We have summarized this into 3 groupings. Firstly, cash we received from our businesses, which in 2025 was $549 million, this is 2% lower than 2024, mainly reflecting the impact on APRR distributions of the TST implemented in 2025 but partly offset by operational performance and favorable movements in the euro against the Australian dollar. The second category is corporate cash flows, primarily corporate costs, which I will discuss in more detail in the next slide. And capital injections and proceeds, if any.

The last category are the cash distribution paid to investors during the year, which was a combined $580 million or $0.40 per security across the second half 2024 and first half 2025 distributions. The last thing to note here is that our corporate cash balance remains strong.

With Slide 19, we are moving from the cash balance -- from the balance sheet, sorry, to the income statement and our financial performance compared to 2024. Total revenue, which is the roll-up of revenues from Dulles Greenway and the Warnow Tunnel businesses was up 10%. This reflects improved traffic performance at the Dulles Greenway, increases to toll rates, and the impact of the Australian dollar depreciation.

Business operation costs increased this year due to a higher maintenance provision at Dulles Greenway where the timing of asphalt rehabilitation has been brought forward, but this is simply a timing difference. Overall, corporate and business unit costs combined are within guidance, and we expect total cost in 2026 to be in line with 2025. Centralized costs in the period included some nonoperating costs such as CEO transition costs, which we had flagged at the half year presentation, and costs related to the organization restructure completed at the end of 2025. Going forward, we do not anticipate any material costs relating to restructuring or the CEO transition.

You will note an increase in costs associated with assessing growth opportunities during the period. This relates to both the work that we are doing to unlock value at Dulles Greenway, as previously flagged, as well as the consideration of new opportunities to build and optimize our portfolio in line with our stated strategy. By their nature, future costs related to executing our Dulles Greenway strategy and growth strategy will vary year-on-year. We expect cost of this type to be within the range of $5 million to $10 million per year on average over the next 2 to 3 years. We will update these expectations over time based on outcomes and as priorities evolve.

We will capitalize growth spend where appropriate, maintain a sharp focus on our cost base and intend for these growth-related costs to be funded from the corporate cash balance.

Now moving down the income statement. The share of profit from our equity-accounted investments, which include APRR and Chicago Skyway, was down mainly due to the impact of the French TST. Overall, we are pleased with the underlying performance of our businesses and our execution against our strategy, which positions the business well for long-term success.

And with that, I'll now hand back to Hugh to wrap up.

Thanks, Vincent, and it's been great to have you present this result with me in Melbourne today.

During the year, we've made some meaningful progress on simplifying our organization and clarifying the path forward. We have a list of priorities, and we are pursuing these with energy and discipline. These include unlocking and enhancing value of our existing businesses, optimizing capital allocation and structures, and building and deepening partnerships to create value-accretive growth opportunities. Through these efforts, we will continue to grow our free cash flow and deliver compelling returns for our investors.

Thanks for your continued support, and we'll now open the floor for questions. Thank you, moderator. Back to you.

[Operator Instructions] Our first question is going to come from the line of Andre Fromyhr with UBS.

First question I have was just -- maybe to general question about the profitability of operating, I guess, especially the APRR and Skyway. I'm just curious why we're not seeing any operating leverage across these 2 assets? The margins are sort of flattish at APRR and there's a bit of a decline in Skyway. But the revenue context is okay. So what do we need to see change in order to expect some margin expansion at these 2 roads?

Thanks, Andre. So on the APRR margin, you have to keep in mind that the TST is above the EBITDA line. So when you see a flat EBITDA margin, that means that actually operational costs have been decreased -- have been decreasing compensated by the increase in the TST. At the Skyway, we had some changes during the year with the new CEO coming, so there was some CEO transition costs, and some changes to the executive team as well, along with some legal costs associated with disputes with the grantor that are on the process to resolution, and we don't expect those costs to be maintained in future years.

Just thinking about the hedging program, can you say a bit more about sort of what prompted the strategy to use that as of sort of '25 and going into '26 because we've seen FX volatility historically, but I'm curious as to what's prompted you to actually proceed with that now? And are there net costs associated with managing that hedge book and the positions that you're taking?

So you actually sort of gave the answer as well. The volatility in FX rates historically is what prompted us to think about hedging our distribution. The vast majority of our distribution is coming from the APRR distributions in euros. And with volatility heavily impacts our ability to fund our $0.40 per share distribution. So what we have put in place has a 0 cost. It's a cap and collar hedging for a portion of upcoming distribution over the next 12 months.

Okay. And then last 1 for me. I understand the distribution payout range. And forgive me, the detail might be in the presentation. But is that really just a comment on 2026? Or is that now the new normal to think about free cash flow payouts? And then I guess as a part of that question, if there was some adverse change in earnings or if the TST was extended for another year. Have you got the flexibility for things like capital releases or other cash releases across the portfolio to maintain that $0.40? I mean thinking about Skyway more specifically in terms of the opportunity to release more capital from there?

Thanks, Andre. You're correct. The comment around being above the range or towards the very top of the range for 2026 is specific to that year. At this point in time, the TST has been extended for 2026 only. So it really only applies to that year. To the extent we get future cash flow disruption or one-off impact, we do have some buffer both in existing cash balance, but also in capital headroom at various parts of the portfolio, but you're actually right, including the Skyway over time, which generates ongoing capacity for additional debt as the toll formula comes into action each year. So we have flexibility. What we can see today would indicate we can revert to the payout range of 90% to 110% beyond 2026, but we will keep seeking to retain flexibility to provide buffer against any one-off impacts.

Our next question will come from the line of Rob Koh with Morgan Stanley.

Just a minor question about CapEx at the Skyway. Looks like in 2025, you came in under budget. Is that some of the expenditures now in this year's guidance? And maybe if there's any color you could share about what kind of longer-term run rate for CapEx at the Skyway, please?

Thanks, Rob. You are right. Some of the projects were rescheduled from 2025 to 2026. And that's the reason why the number came down in '25 and why we are guiding on '26 for a slightly higher number as well. Over the long term, I would send you back to the guidance that we gave at the time of acquisition, which is still valid of long-term $11 million per annum. But in the medium term, we expect to be slightly above that.

That's very helpful. Second question is, I guess, in relation to the new, I guess, call out of expenditure for growth-related activities, this is a $5 million to $10 million per annum. Can you maybe give us a sense in 2025 of what the breakdown of the $8.9 million was? And I guess, how we should be thinking about it for this year? Is it a similar amount for the Greenway and a similar amount for other opportunities?

Thanks, Rob. So yes, good question, and it is the first time we've called out those growth-related costs separately. While I won't give you the specifics of the breakdown, what I can say is that, we continue to spend an above run rate amount on our Dulles Greenway efforts, you saw that in 2025 -- 2024, apologies, and you can see that in the comparative period, which was almost all Dulles Greenway. And you've obviously seen a higher number this year is particularly once we reset the strategy, we did actively consider growth opportunities, inorganic growth opportunities beyond Dulles Greenway.

The guidance we've given is for 2 to 3 years. The reason we've given it for the reasonably short term and although a small number in total are quite a large range of $5 million to $10 million, is it does depend upon the opportunities and the timing of those emerging. The work we've done in 2025 isn't sunk cost. We'll continue to utilize that, and we'll continue to look at other opportunities. But really, the $5 million to $10 million funded by balance sheet cash is what we expect to spend in the next 2 to 3 years including both the Dulles Greenway efforts and inorganic growth opportunities.

Okay. Just a third question, probably a little bit more high level. I know you've done an enormous amount of work on your capital allocation framework, probably should have thought of this question earlier when you first introduced it. But $0.40 per share distribution targets or at least is very clear. But given that in the last couple of years, you're paying out some capital with that. How would you -- how would the Board think about maybe reducing the cash distribution, but doing the rest as a buyback or something like that, would that be perhaps more accretive?

At this point, Rob, we've looked at all opportunities for utilization of the cash on our balance sheet. And we've retested that when I started with significant amounts of assessment in detail, and not purely financial consequence, but looking at all consequences of various decisions. At the time and after consulting with investors, we decided the maintenance of the $0.40 was very important. And we do see a pathway to falling within the payout range in the very short term. Now that's been deferred because of the TST, I acknowledge that. But when we became comfortable that we could get back on the path to sustainable distributions within our targeted payout range, we did decide the best use of that cash was the $0.40 distribution into the medium term.

Next question will come from the line of Ian Myles with Macquarie Equities.

I just want to be able to provide us a little bit more color on the updated framework for the APRR and the retendering.

I'll start and I'll throw it to Vincent as well. There's no framework law as yet finalized. So we are taking the outcomes of the Ambition France Transport conference and various statements from ministers around the need for tolling and concession models into the future to support the maintenance of a high-quality major arterial road network. And you will see some comments in the [ IFRS ] results to the same end.

What we're expecting practically is that the formation of the law and the structure of the contracts or concessions but not to be finalized until beyond the Presidential Election in 2027. But Vincent, anything you'd like to add?

Just maybe that indeed what we are seeing emerging as directionally is that the next generation of contracts -- concession contracts would be for smaller perimeters, shorter durations than historically and would have a slightly different or reinforced economic regulation. So that's what we are seeing and what the government has been pushing forward.

Does that mean you're going to see like you could own like an APRR but you couldn't own an area even though you merge the 2?

No, no. What we mean by that is that APRR might not have the same perimeters as APRR has today, albeit that that's not been finalized. The 7 major contracts could be a different number of major contracts. It doesn't mean that you can't bid for multiple contracts at this point in time, albeit, again, the regime and the perimeters have not been defined, but Vincent is quite right. The commentary around the size of the concessions, the participants in the market and the economic regulation have all been made.

What we said in our presentation remains true with those contexts that we actually remain very interested. We believe that those parameters could indeed work for APRR as a well-positioned entity to participate in future opportunities, but we will need to assess the concession regime and importantly, the tax regime at the time to make sure the decisions we're making are consistent with our investors' expectations.

Okay. And then on Skyway, what's your sort of thought process around a capital release in FY '26 because you do have a bit of refinancing work to do?

Yes. So we have some debt maturing later in the year. At this stage, I would say we are not anticipating capital release. However, we'll continue to assess that opportunity in the next few months.

Okay. And that doesn't put any strain on the balance sheet to cover off the French long-dated the temporary tax staying around a bit longer.

No.

And in terms of Greenway, where are we in the process there in terms of the SCC? And when do they actually have to sort of set time lines for this process?

Thanks, Ian. The SCC or Virginia actually published a timetable this week, which has -- no, not correcting you there, it's brand new as of yesterday, I think it was. But it sort of culminates in a similar timetable to what we saw last time and with the public hearing scheduled for August. So that's the culmination of that. There's obviously many steps in the middle, which you can see on the website that public hearing scheduled for August at this stage remains subject to decision and change by Virginia.

And should we expect you to push your application for another price rise prior to the public hearings?

We continue to assess the right timetable, perhaps given we only submitted in December 2025, we've talked about submitting annually. So we got a little bit more buffer than before the hearings. However, you should expect that we remain disciplined and submit every year in order to get the runs on the board and get that process working more efficiently. We're obviously also working in the background with the state on things like legislation and litigation which could inform how that process works going forward. But right now, the expectation is we'll continue to do it annually.

Our next question will come from the line of Anthony Moulder with Jefferies.

If I could start with distribution is, obviously, the growth focus now will -- if there are growth opportunities, are you saying effectively that $0.40 is the base case and acquisition opportunities or growth opportunities will only be considered accretive to that level of distribution?

Thanks, Anthony. Yes, that's 1 of our key parameters. So we -- look, we really point to 3 parameters that will consider our growth opportunities through, distribution accretion being 1 of them, valuation being the second, and portfolio balance and optimization being the third. So you're absolutely right. When we think about the $0.40, that's the baseline for that assessment.

Good. And I wanted to check the -- there was a reserve consolidation at APRR company level. I think that was back in June last year. I think that was $533 million, just when -- how did that profile through the second half of fiscal '25, please? And how much is left effectively to support that distribution of $0.40 for FY '26.

We are distributing out of APRR on the basis of the cash flow and the statutory profits. So at the moment, we are not utilizing those reserves.

I guess that's still possible if you needed to going forward?

Can't exclude it.

[Operator Instructions] Our next question comes from the line of Suraj Nebhani with Citi.

Just 1 question on the free cash flow implied guidance based on the distribution is -- so, I guess, just can you run through the key drivers there? Obviously, you highlighted the costs, but any major changes are you expecting on the financing cost side of things over the next 12 months [ or so ]?

No. I mean not outside of interest rate movements. But as you know, most of the debt at our businesses is fixed rate.

At an APRR level with all the debt that is expiring as well. Can you just remind us is there any impact that you expect in the short term from a debt cost level?

No. I mean, I can come back to you on the exact debt maturing, and you can also find it in the investor reference pack. But generally speaking, the approach is that we refinance debt as it becomes due. And as I was saying earlier, we are not anticipating regearing for this year.

And on the hedging side of things, you also flagged managing the distribution. Does it mean that there could be a bit of a disconnect there with respect to cash flow recognition in the earnings? Like -- clearly, APRR will earn revenue through the period. And if the currency moves against you, is it possible that the payout pressure range flexes, but the -- that the distribution remains the same?

Yes, it's possible. But the purpose of the FX hedge is to minimize the disruption, particularly for material variation in the FX range. We're still exposed to small variations though.

Our next question comes from the line of Owen Birrell with RBC.

I just wanted to, I guess, delve into the comments around pursuing complementary growth opportunities and then also in particular, progressing the preparation for French concessionary tenders. Just wondering how you think you've got funding these opportunities and whether there's been any change in the attitude towards utilizing new capital to pursue these? Or should we continue to think this will be self-funded?

Thanks, Owen. We really refer back to our capital allocation framework when we think about funding both the small and large opportunities. When we think about the incremental opportunities in France specifically, things like the A412, generally speaking that will be funded within the businesses that exist and won't require injections of equity or debt from outside the group. So that's how we generally think about that. That does not apply to the retenders.

And in the context of what we were discussing with Ian, with uncertainty around size, structure and tenure of these opportunities, we still believe that will be significantly bigger than the incremental network expansions that have been occurring today. So they would likely require new capital. Now clearly, the first 1 is expiring in 2031. That's not our one, but the SANEF expires in 2031. So we've got some time to think about that in line with our partners in France.

When we think about the broader inorganic growth opportunities beyond the current portfolio, we really think about it in the terms of output. So not to harp on about the same things, but yield accretion, valuation and portfolio balance. The form of capital required will vary, but we will come back to those 3 outputs and say does it meet those 3 hurdles, if so, is it worth pursuing. We do have, obviously, balance sheet cash, we have debt capacity. So that is usable, but it depends on the size and it depends on the outputs of the project we're considering. So I can't give a generic example, but very much focused on the outputs as opposed to the inputs.

Thank you. And I would now like to hand the conference back over to Hugh Wehby for closing remarks.

Thank you, everyone, for your participation. Great to catch up with you, and we look forward to seeing you in our roadshow as we go forward. Have a great day.

This concludes today's conference call. Thank you for participating.