Sonic Healthcare Stock

Good day, and thank you for standing by. Welcome to Sonic Healthcare's Financial Half Year Ended 31 December 2025 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker, Dr. Jim Newcombe, CEO and Managing Director of Sonic Healthcare. Please go ahead.

Thank you, and good morning. My name is Dr. Jim Newcombe. I'm the CEO and Managing Director of Sonic Healthcare. I'm joined by Mr. Chris Wilks, Chief Financial Officer of Sonic Healthcare; and Mr. Paul Alexander, Deputy Chief Financial Officer of Sonic Healthcare. We will be available for questions after the presentation.

It's my pleasure this morning to give the financial and operational review for Sonic Healthcare for the half year ended 31st of December 2025. In the first half of FY 2026, Sonic Healthcare had revenue of $5.445 billion with EBITDA of $907 million and net profit of $262 million. Earnings per share were AUD 0.531.

We are on track to achieve full year earnings guidance with strong revenue growth, including organic growth of 5%. EPS is improving and remains a top management priority, which will drive improvements in return on invested capital.

Operating leverage and synergy realization are demonstrated by EBITDA margin enhancement for the majority of the business. Management has an ongoing focus on cost control across the business, including labor. An operating review of the U.S. business is underway, including rationalization of anatomical pathology operations. Several capital management initiatives are progressing, which we will update you on today.

Today, we are maintaining EBITDA guidance previously issued in August and reaffirmed in November of $1.87 billion to $1.95 billion on a constant currency basis. In other guidance, depreciation expense is forecast to be $770 million to $780 million on a constant currency basis, which has been reduced from previous guidance.

Interest expense has been tightened to be an increase of 15% on a constant currency basis versus the prior year with an effective tax rate of 27%. This guidance excludes any gains from sale of properties, includes completed acquisitions only with no regulatory changes assumed and current interest rates assumed to prevail.

Operating leverage and synergy realization is demonstrated by EBITDA margin enhancement for the majority of the business. This table shows adjusted EBITDA margins when accounting for, first, acquisition costs of $8 million in the first half of 2026; second, the German KV fee quota minimum level change, which took effect from 1 January 2025 and is now cycling through as of 2026 calendar year; the LADR acquisition, which settled on 1 July and has had a lower initial margin than Sonic's average as expected and previously advised.

The HWE, Herts and West Essex contract margin is improving, but still dilutive as expected and also previously advised. We experienced a margin decline in the U.S. operations due to low organic revenue growth and restructuring costs. This has less impact on the group margin expected to take place in the second half of this financial year, and we will provide further details later on in the slides. Overall, the adjusted EBITDA margins show a 30 basis point increase from first half 2025 to first half 2026.

Our capital management priorities remain: first, to maintain an investment-grade balance sheet; then to maintain a progressive dividend with medium-term target dividend payout ratio of 70% to 80% of net profit. We are focused on strategic selective synergistic acquisitions; and finally, on share buybacks using surplus capital, for example, from sale and leaseback or other property sales.

Today, we announced a progressive dividend of AUD 0.45, an increase of 2.3% on the previous financial year interim dividend. This interim dividend is 60% franked with a record date of 5th of March and a payment date of 19th of March.

Our credit metrics remain strong with a debt cover ratio at historic levels of 2.5x. Recent increases in net debt relate to the acquisitions of the LADR Group and Cairo Diagnostics. Our currently available headroom is at $1 billion before the interim dividend payment.

We would like to advise of several capital management initiatives, including a series of sale and leaseback transactions. A process is underway for the sale and leaseback of our Brisbane hub laboratory with a targeted completion of June 2026.

We are expecting a significant gain on sale with potential tax capital gain partially sheltered by past capital losses. Further property sale and leaseback transactions are under consideration also with potential gains on sale.

In addition, we have a conditional heads of agreement in place to sell a separate surplus Australian property with expected settlement next financial year. These capital management initiatives present an opportunity to use proceeds from property transactions to fund a possible on-market share buyback in the future.

Our first half FY 2026 revenue split highlights the diverse global portfolio of medical practices in Sonic Healthcare. All of our positions are leading in stable and growing markets, which all present attractive growth opportunities.

In Germany, we achieved 40% revenue growth on a constant currency basis with organic growth of 5%. Organic growth was impacted by the change to the minimum KV quota for statutory insurance fee schedule, or EBM, effective from the 1st of January with a 1% revenue impact as expected.

Our LADR Laboratory Group acquisition settled on 1st of July, and integration is proceeding well across 16 separate work streams and proceeding to plan, including our first laboratory merger completed in Berlin.

A large cycle of laboratory infrastructure investments has now been completed with the new Bremen National Reference Laboratory go-live planned for April 2026, and this follows laboratory projects and mergers in Biovis, Hamburg, and Munich.

The combination of strong organic growth, synergy capture and strict cost control is driving significant margin expansion in our German market. We are successfully diversifying into high-value medically led direct-to-consumer testing through our dedicated [indiscernible] brand, which importantly is leveraging existing national infrastructure.

We are aware of the proposed reform of the GOA private fee schedule. At this point, there is no certainty that reform will proceed nor its potential timing or impact.

Moving to Australian Pathology, where we achieved strong organic revenue growth of 5% in H1. Annual indexation of 2.4% occurred on 30% of the Medicare schedule fees for Pathology from the 1st of July. and we have had successful ongoing implementation of private billing for selected tests, including vitamin B12.

We are showing particularly strong growth in the specialist and hospital segments with the commencement of services at Australia's largest private hospital, the Hollywood Private Hospital in Perth from this month.

We have recently acquired and commenced fit out of our new hub laboratory in the Docklands region of Melbourne, which will consolidate 4 Sonic Healthcare facilities and create vital capacity for future growth in this important market. A major laboratory platform procurement process was completed in this half, delivering substantial savings, which will continue into the future.

We are awaiting the final determination from the Fair Work Commission's gender undervaluation review. Our industry association is in good faith discussions with the Department of Health on offsetting funding options.

In the U.S., underlying organic growth once adjusted for the Alabama major payer contract loss and planned restructuring of anatomical pathology operations was 2%. An operating review with multiple improvement initiatives is underway across all U.S. operations. This includes the rationalization of 9 anatomical pathology practices with the aim of improving profitability and completing this financial year. Our wind down of Alabama operations has now been completed.

The enhanced revenue collection system previously advised to the market is delivering benefits, but this is slower and likely less than previously expected. We are very excited to discuss our expanded advanced diagnostics division, which combines Cairo Diagnostics, ThyroSeq and other highly specialized reference and esoteric testing, which is maturing to a nationwide product offering.

In addition, our ongoing digital pathology rollout is supporting optimization of workload distribution and productivity and proceeding according to schedule. Over 60% of our dermatopathology volume is now on our proprietary PathologyWatch platform.

Finally, PAMA fee cuts were recently deferred and industry group lobbying for a permanent solution continues.

In Switzerland, we achieved organic growth of 2% on a constant currency basis. Important to remember, there was a very strong organic growth of 6% in the previous comparison period due to respiratory illness epidemic at that time.

Synergy realization in Switzerland is proceeding to plan with margin expansion achieved following the acquisitions of Synlab Suisse and the Dr. Risch Group. This includes laboratory mergers already completed in Geneva, Lausanne, Zurich and Ticino.

The 2 largest mergers in this schedule for the hub laboratories in Berne and Lucerne are on schedule, including Berne in the second half of this financial year and Lucerne next financial year. And these include major upgrades to laboratory infrastructure and automation.

As in Australia, we had continued strength in the specialist and hospital segments in Switzerland, including winning a new hospital contract in Zurich last month. We have harmonized core IT platforms, including our laboratory information system and ERP, standardized instruments and our logistics network, all of which lay the foundation for further integration and ongoing organic growth.

In the United Kingdom, strong organic growth of 24% was driven by the Hertfordshire and West Essex NHS contract, which commenced in March with integrations proceeding well to plan.

Our new hub lab in Watford is expected to go live in July, servicing the HWE contract and creating additional capacity for further growth in this important region.

We continue to successfully bid for new pathology contracts in both the public and private sectors. For example, the prestigious Royal National Orthopaedic Hospital, where we commenced service for another 11-year term in November, and we won a large private specialist outpatient group contract from October.

We announced the acquisition of Cellular Pathology Services, a small anatomical pathology laboratory in London, which completed in November. This creates important capacity for growth in the private AP market moving into the future.

In our Radiology division, we achieved organic revenue growth of 7% with EBITDA growth of 5% once normalized for IT cost reallocation. Annual Medicare fee indexation of 2.4% occurred from 1st of July, and we continue to have an ongoing focus on higher-value growing modalities such as CT, MRI and PET/CT.

7 greenfield sites opened last financial year and a further 3 are planned for this financial year with one already completed in H1, all of which are initially margin dilutive as expected. 23 of our existing MRIs became fully licensed from July 2025 following changes to Medicare licensing.

We are very proud to partner with the Australian government on the National Lung Cancer Screening Program, which has added to CT revenue growth from July 2025 and already has shown life-saving benefits for our population. We continue to invest in AI and other systems to drive productivity gains across radiology, including in CT chest scans.

Finally, Sonic Clinical Services showed revenue growth of 5%, primarily driven by the recent acquisition of the National Skin Cancer Clinics and EBITDA growth of 20% off a low base. National Skin Cancer Clinics are now integrated with our existing skin business and performing well.

Recent increases to Medicare funding for general practice from November are showing initial benefits to revenue and consultation numbers in general practice and increasing accessibility of general practice across our population.

Within Sonic Clinical Services, a range of cost management initiatives underway, including site rationalizations and realization of operational synergies, including in back-office functions.

To conclude, I'd like to discuss Sonic Healthcare's value proposition. Our value proposition is centered around our unique medical leadership culture. First, Sonic Healthcare's focus on and delivery of personalized service for doctors and patients makes us a trusted partner for doctors, patients and health care systems around the world.

Respect for our people leads us to being an employer of choice, including in highly competitive specialized labor markets and creates a passion for service excellence that helps our people go the extra mile.

Sonic Healthcare's company conscience is our mission to care for our global communities, making us an integral part of our communities and a critical component of health care systems.

Our well-known operational excellence drives operating leverage through organic growth, efficiency gains and innovation at a global scale. And finally, our unmatched professional and academic expertise creates a leading position in highly specialized diagnostics and personalized medicine, both of which are high-growth areas in a time of rising complex and chronic health care needs.

Before we go to questions, I would like to take a moment to thank our management teams and 45,000 staff for their dedicated service and commitment to patient care. Our amazing people care for our communities' day in and day out and have delivered these excellent results. Thank you for your attention, and over to you for questions.

[Operator Instructions] And I show our first question comes from the line of Andrew Goodsall from MST Marquee.

Welcome, Jim. Just starting with phlebotomist wages. I know you're still waiting on details there. Your competitors have given us a little bit of detail talking about the 1.8% impact in the fourth quarter. They've got variation between because of where their current EBAs are. I was wondering if you could talk to where your EBAs are versus Fair Work Commission, just talking more broadly.

Yes. Thank you, Andrew, for that question. So there's a few things to unpack there in that question. The first thing is to say that we have particular strength and growth in the specialist market in Australia, and that does mean that our volume and revenue growth are less tied to collection centers than perhaps our competitors are.

And we have gone through a strategic rightsizing of our ACC network, which has continued through H1 but slowed down. And during that process, significantly improved the productivity of our collection centers, including through our supercenter strategy.

And then finally, we do have a higher baseline of pay for our phlebotomists, and that comes from really valuing their contributions. They're very important frontline workers for us, caring for our communities. And we've also significantly invested in their skills training and development over decades.

So all of that leads to our expected impact for this financial year for the phlebotomist changes being sub-$2 million, and that includes a one-off readjustment for leave provisions. So that has been taken into account with the guidance we've just talked about. And we believe the impact is proportionately lower than competitors because of the reasons that we've just gone through.

And sorry, just to stick with that a little bit. Obviously, there's still the health service professionals to pick up. Are they sort of reasonably material to you? And I think that's more of a '27 impact. And just flagging overnight, I think we have a bit of crossover with an award that the Victorian government has generously made to their health services professionals of about 12.5% over 2.5 years. So just any color you can add there would be great.

Yes, it's a good question. As has been mentioned earlier in the week, we don't have a final determination from the Fair Work Commission on the health professionals component of the gender undervaluation review. We know it won't affect this financial year, as you've rightly said. So we await that determination before we can model out the impact and particularly the phasing of it is up in the air.

As we talked about, our industry body is in discussion with the Department of Health about possible offsetting funding options, and we know they've done that for other industries with similar changes.

And final one for me. Just maybe this one for Paul, but just trying to get a sense of FX impacted spot, just what that might look like in the second half, obviously, being a lot of movement in some of the key peers.

Andrew, yes, there certainly has been some movement in the exchange rates. So if we were to assume current rates prevail for the rest of the year, we certainly won't see the level of tailwind that we've seen in the first half. But we haven't sort of tried to express that in our presentation, et cetera, because the rates are moving around quite a bit. more recently. But yes, the tailwind will be less for the full year than it has been in the half based on current rates.

And I show our next question comes from the line of Sacha Krien from Evans & Partners.

Can I just clarify that answer to that last question, Paul. Are you saying that it will still be a tailwind. I think you were talking about a $70 million tailwind in August. It sounds like it's still going to be a tailwind, but a more modest one.

That's correct. Tailwind for the full year. I can just reiterate based on current rates, which can move every day, of course.

Yes, sure. My main question was just on some of the proposed German private market reforms. I'm just wondering if you can take us through some of the potential range of outcomes there. And is it fair to say this is going to be a bigger risk for you than the changes that came through for the public market on 1 Jan '25?

Yes. I mean thank you for the question. And to reiterate, there really is no certainty at the moment that, that reforms of the GOA, if we're talking about the GOA will proceed. And underlying that is also total uncertainty about any timing or potential impact. These are broader changes for health care remuneration than just pathology.

They have much broader implications for other health care professionals as well. And there's a political process underlying that, that needs to play out. So at this time, it is -- it will be premature to speculate on what those impacts might be.

And I show our next question comes from the line of Craig Wong-Pan from RBC.

Just wanted to ask about the German and Switzerland businesses. In the slide, it talks about margin expansion. I know you don't like disclosing actual margins, but could you talk about what sort of margin expansion you've seen in those markets?

Yes, Craig, you're right, we don't normally disclose that sort of information. And so I guess in this Q&A, we don't want to be providing information that hasn't been provided more broadly.

But I think what we have said is in both of those countries that the synergies that we expected to achieve are on target for both Switzerland and for the LADR acquisition in Germany. And when we did announce those transactions, we gave some indication of where we're aiming to get to. So I think probably I'd head you back to some of those previous disclosures and our confirmation now that we're on target to achieve those outcomes.

Could you remind us, when you expect to achieve those? I mean, I guess, I'm trying to get a sense of how much did you achieve in the second half [indiscernible] how much.

Yes. Look, there are some early wins that you get from things like procurement by bringing these businesses onto our purchasing contracts. I think with LADR, we said that we would get to an after-tax ROIC of something like 11% within 3 years. That's still our plan with that one.

With Switzerland, it's a bit more complicated because there's 2 acquisitions there, and they've each got kind of 3-year plans. We've spelled out in the slides a little bit about what we're doing there with mergers. Again, there's some benefits that come from procurement quite early, although in Switzerland, there needed to be some changes to platforms to achieve those. So that takes a little longer.

But look, I probably don't really want to be drawn into talking about margins, but all of that's on track, and you'll see more of it flow through into the second half, which then flows into our guidance.

Just second question, the sale and leaseback for the Brisbane site, I just wanted to understand why that site and yes, I guess, the potential for other ones? And what kind of, I don't know, details for that sale and leaseback, like kind of is like the time frame for that? Yes, if you could provide any color around that, that would be great.

Yes. Look, the Bowen Hills is one of our largest property holdings. We recently just spent $80 million doing an extension to that. So it's pretty -- that finished in 2024. And the project, the sale and leaseback process will be launched early next week. We've been preparing for it. You might see some press about it next week. And it comes down to just a broader capital management strategy with properties like this.

There's yields of kind of circa 5%. I think our view is that with that extra capital, we should be able to get a much better return than that. And with things like triple net leases, we can still effectively control the building. It's any repairs, maintenance. It's kind of like ownership without the capital tied up. So that's the first one.

We alluded to the fact that there could be others. I think you're probably aware that we've bought the old Costco site at Docklands. So that did have an effect on our CapEx in this period because it settled on the 1st of July, circa $100 million for the site.

The builders FDC are in there now. That's something like an $80 million spend between now and April, May '27. So that's another site when it's finished that we -- that might be a sale and leaseback. And likewise, with our site up here in New South Wales.

So we've had a fair bit of property on the balance sheet for a while. And I guess we've made a decision that we can control them as we need to operationally without having to own them and that will provide some nice capital to hopefully drive better returns to the shareholders over time.

And I show our next question comes from the line of David Stanton from Jefferies.

Perhaps we could talk to the U.S. Firstly, how much is anatomical pathology as a percentage of total U.S. revenue? Would you be willing to give us that number?

David, it's about 1/3 of our U.S. revenue. So something like $400 million out of $1.4 billion-ish.

And what's the longer-term view of those U.S. operations? Where do you see that going over the medium to longer term in terms of the splits and willingness to earn, please?

So our focus, as we've said today, is on the operating review there. There's a lot of work, really positive work going on there on that, including already completed work in terms of withdrawing from loss-making operations in Alabama, a lot of work in rationalizing those AP operations as well.

Important to point out, we've got a lot of strength there in advanced diagnostics with the recent Cairo acquisition, and we're expanding that in that advanced diagnostics division, cross-selling that in our geographic regions and markets to make sure we get this more national penetration of that offering, and it really is market-leading what we offer there in those areas. So there's a lot of opportunity for top line growth there.

The digital pathology rollout is really successful and a positive thing, not just in terms of quality of the medicine that we deliver, which is, of course, really critical in terms of particularly the AI tool with PathologyWatch, but also workload optimization. It's a great marketing tool as well to enable dermatologists in the U.S. to themselves see the slides virtually through the PathologyWatch platform. So we're seeing a lot of really good success there.

And again, just to go back to the organic growth, we've reported at 0% constant currency, but the underlying organic growth is still at 2%, and that's after adjusting for that Alabama major payer contract loss and the restructuring costs that we're doing there, and we expect that will continue to -- in terms of the impact of those changes, we'll continue to see improvements in terms of margin impact moving forward. So we're invested in that operating review and moving forward on that basis.

Understood. And I guess moving on to radiology, which I must admit I don't ask about that often, but organic revenue growth of 7%. But I do note that Medicare is talking to -- with a caveat here, review, Medicare is talking to a growth of 9% in the Medicare market in the 6 months. Firstly, where do you think you'll -- are you growing in line to above market? Or -- and if not, is it because the MRIs, you have less MRIs, as a percentage of total revenue in that space than perhaps your peers?

So we have seen strong growth in MRI revenue as well, and we'd say that 7% is in line with long-term growth rates for the industry. And we are, as you would know, cycling much stronger organic growth in recent years.

So we still see a lot of positivity. We believe the change in MRI licensing has effectively grown the market and not impacted our business negatively. And as I said, we actually are growing in that space as well.

Understood. And would you be willing to give us some CapEx guidance then, Chris, for the full year, please?

Yes. Look, in answer to a previous question, I've mentioned a few things. So our CapEx for this year was higher than the PCP, mainly because of property-related costs, the Docklands acquisition, which I mentioned, also some costs associated with building out the Watford facility for HWE in the U.K. and some of the Swiss lab work as well.

I think in the second half, there will still be some effect from property, particularly the build-out of Docklands. So over the course of the next 6 months, I don't know exactly know what that is, but it's probably $20 million, $30 million, something like that in the next 6 months.

But underlying CapEx, if you adjust for those properties, those property transactions, underlying CapEx is kind of growing at about the rate of the growth of the business. So I think that's probably the -- that's it in a nutshell.

And I think going forward, as we alluded to with the focus on some sale and leasebacks, the property cost side of things will probably start to in future years drop off a bit, and you probably get a bit more transparency on the underlying CapEx, the maintenance CapEx, if you like.

Understood. Sorry, just a follow-up just to make it clear for me. So first half is going to be slightly above second half, it sounds like in terms of CapEx, , total CapEx.

Yes, quite a bit above because it had the $100-plus million for the purchase of the Docklands site.

And I show our next question comes from the line of Laura Sutcliffe from Citi.

One on the U.S. to start with, please. You mentioned you're expecting margin improvement in the second half and you've mentioned a few things connected to that. But is that expected improvement mainly driven by the closure of the anatomical pathology centers that you've mentioned? Or are some of those other factors material? I'm just keen to understand the scope of the review in the U.S. and just to confirm that it's an operational review rather than a strategic review, where you might consider divesting all of the U.S.

Yes. Thank you for that question. There's a bit to unpack there. I think the first thing to say is that we it is indeed an operating review of the U.S. operations, and that's our focus.

In terms of the particulars, what we're talking about is less -- what we've unpacked in that slide in the presentation today is a decrement in margins impacted the group margins. And I think for not just for the U.S., but for the other points listed in that slide.

And the point we really want to make there is to really expose just how strong the majority of our business is in terms of operating leverage that we are exercising and that we are -- we have grown adjusted EBITDA margins of 30 basis points in the majority of those operations outside of those adjustments.

Looking at the U.S., what we're -- the point we're trying to make is that the decrement moving forward is expected to be significantly less because of that work that's been done in Alabama, and that's not just AP in Alabama, it's pretty much all operations because of the loss of that major payer contract loss. Two of those AP practices were in Alabama, but 7 were not.

And the important point to make there is that there may be some closures there, but really, what we're doing is rationalizing moving that work to other centers and retaining the top line as much as possible, whilst doing the cost control at the bottom. So that will have significant benefits to margin, as you would expect.

In terms of the top line, we are seeing great growth in the Advanced Diagnostics division that's really driving top line growth and margin growth. So they're all important. They're all reflective of great discipline in our management teams.

And the operating review is widespread. We're telling you today about some details, which have happened and are happening. So you have some detail around that, but it is across all U.S. operations as we've advised.

And if I may, one on the possible buyback that you've mentioned. Would you plan to put most of the cash from any property transactions that you could achieve towards a possible buyback? And if you don't know, what are the main decision-making factors for defining that?

Yes. Good question, Laura. Look, we haven't come to a landing on that, and that's something that would need to be discussed with our Board, obviously, once that transaction has completed, but that's a possibility that the majority of that could be used for that purpose.

But as things unfold, there might be -- we mentioned some of the prior capital management priorities. There might be acquisitions that we're considering that might change our view on the scale of a buyback. So it will be considered at the time when the cash is in the bank.

And -- but we just thought it was worthwhile letting the market know what we're planning with this because it will become public about the sale pretty quickly and to let people -- let the market know one of the thoughts we had in terms of the use of the proceeds.

And balancing the investment-grade structure of our balance sheet is also important. And I think our gut feeling is that with what we're expecting in the second half that we're going to be in good shape on that front. So it should probably free up that capital for the purpose we've mentioned.

And I show our next question comes from the line of Davin Thillainathan from Goldman Sachs.

Jim, maybe a question for you to start off with. Clearly, you've made some changes here with the U.S. review property sale and leaseback changes as well. But curious sort of what other observations you've perhaps come out with having looked at the business as CEO over the last few months?

Yes. Thank you for that question. I think the first thing to say, which is remarkable is that going around and meeting people and seeing our operations around the world, just how strong our medical leadership culture is and what a great competitive differentiator that is. I think so much of our value medically comes from our values internally and our culture, which drives this incredible contribution we make to our communities around the world. And it really is kind of humbling to go around and see the amazing work that we're -- that all of our staff are doing for their communities.

And building on that, really, our focus has to be -- has always been and has to be continuing delivering that high-value medicine, and that will drive continuing financial value and shareholder returns. I think as long as we're focused on that and looking after our people and looking after the medicine, the rest will flow.

But we are prioritizing margin accretion, as we mentioned at the AGM, which, of course, will drive EPS growth and improve return on invested capital. We've talked a lot today about the work that -- some details about the work ongoing in that area, which is really exciting and promising, and I've seen it firsthand in going into the operations that we're realizing the synergies from the past acquisitions, that we're having great organic growth.

We're partnering with governments and other health care systems around the world in a really positive way. And we're focusing on that operating leverage, which I think has been the cornerstone of Sonic Healthcare's success through cost control and a focus on innovation.

And you mentioned capital management, and again, that's -- we've talked a bit about that today. I think that's very important to understand that we have a very disciplined focus on capital management and looking at maximizing shareholder return through that capital management strategy as well.

And my next question is -- if I look at the EBITDA margin -- sorry, EBITDA guidance for the year, consensus numbers would suggest you would land towards the top end of that range. Can you perhaps sort of help us understand what drivers we should be thinking about from a half-on-half split for that guidance range, please?

Yes. Look, we don't want to put too much more detail into the guidance that we've already given. But I think you're probably well aware that there's a seasonality to our business, particularly with our Northern Hemisphere operations, where the summer period is fully in the first half.

And so look, I probably don't want to add too much more than the detail we've already given. We've given a bit more below the EBITDA line, some more detailed guidance on depreciation and interest. than we had -- have in the past.

But look, we remain confident that we should be in for a solid second half with the various initiatives. Jim has talked about some of the stuff that's happening in the U.S. Australia is looking very solid with its growth rates and some of them move to some private billing. So I probably don't really want to add any more than what we have given. Otherwise, we'd be changing the guidance we've set out in the deck.

Certainly, the biggest factor in terms of where we might end up within our range is, as usual, organic growth. If we see even stronger organic growth in markets, then that has -- the operating leverage will add that to the bottom line. And so that's probably the biggest swinger, if you like, in terms of where exactly we'll end up across the different markets.

And I show our next question in the queue comes from the line of Steve Wheen from Jarden.

I just wanted to go back to the U.S. At the time when it was originally raised that the Alabama contract was going to be lost. It was indicated that New Jersey was a potential offset to that. Just wondering what has played out within that state and whether you are actually seeing some offsetting factors there from that payer contract?

Yes. Thank you for that and for raising New Jersey. So we have won that contract, as you pointed out, and we're really excited about the growth in that quite large state, which has a fantastic location in terms of our operations there already with a lot of automation there that's looking for -- that can handle increased capacity.

So our local teams are really focused on that in the Northeast. We have a lot of business development efforts going on, particularly in the northern part of the state that we're excited about. So it's absolutely a focus there, and we're building up to move strongly into that state based on that contract win.

Can you give us an indication as to timing when we might actually see some benefit from that?

I think it's fair to say that we can't expose more at the moment in terms of exact timing. I think we just have to say that, listen, it's a real focus. We're seeing some early gains there in terms of contracts, but I can't give you more detail around that at this point.

Pretty fair to say, Jim, that it will take a little time to build up. One is lost immediately. The other one takes some time to build up. So it will take a little while before there's an offset there.

Second question was also in the U.S. And again, just sort of going back to earlier sort of commentary, there's been a fairly strong expectation that the revenue collection system was going to generate USD 20 million to USD 25 million of earnings benefit, which you're now, I guess, going a little bit more cautious on since the review. Just -- if you could help us understand why you're backing away from that guidance and what the issue is? And is this something that's even longer dated or it's just not going to happen?

Look, it is happening, Steve. It's taking a bit longer than we'd expect, and some of the benefits are offset by some other little changes that are happening in the market that affect PPA as well.

So the team -- we just spent some time over there a few weeks ago. The team is working with -- it's a product called [indiscernible] that I think we've probably mentioned before to work out the best ways to continue to push those benefits and optimize them.

It's quite -- it's not just a matter of using the software. It's a matter of us setting up customer portals and directing patients to those portals. So information is made available more easily. So it's quite an implementation process, and it's probably just taking in our biggest lab, CPL, which was the last to go live.

It's taking a bit longer than we thought. But we still remain optimistic that, that sort of benefit will ultimately flow through, but it will probably be more into '27 than what we're hoping was going to be into '26.

So we're not -- that's not part of the reason why you've got expectations of a stronger second half in '26. I just --

It's a little bit of -- but I think there's lots of initiatives. There's multiple initiatives that are happening. Even the acquisition of Cairo, which is performing well, we'll own that for the whole second half. So that will be contributing to the second half performance as well. Growth in ThyroSeq, there's multi factors that probably give us confidence that the second half should be reasonably strong.

Just while I got you, I wonder if with this sale and leaseback focus, I'm just curious as to [ your thoughts ] on what you're anticipating with regards to the terms of those arrangements. what that will do to the AASB 16 accounting for rent in FY '27. Is that likely to change the depreciation and right-of-use asset interest costs?

It's a good question. It's -- in terms of the --

The short answer is yes. I mean, clearly, part of the sale and leaseback is that we're taking on a significant lease in the case of the Bowen Hills one --

It's pretty -- it's circa $25 million is the rent. But I think the way we'll be structuring it is that I don't think there's not going to be an adverse impact on the AASB 16, but there will be more cost than we're currently paying because we own it now. And so there's just the interest associated to the cost. So there will be an impact going through that effect. But then we'll have the benefit of a chunk of money in the bank as well. So there's offsetting benefit.

Yes, that's clear. So roughly, we'd be anticipating $25 million for that lease alone potentially being a delta shift in depreciation and interest in FY '27?

The way AASB 16 works is that in the early years of a lease, your actual expense through the D&I lines is higher than the rent you pay. It obviously evens out over the period of the lease. But initially, the impact will actually be higher than the [indiscernible].

And I show our next question comes from the line of Andrew Paine from CLSA.

Just coming back to previous guidance that you had, I think, at the AGM where you were talking about a 45% to 46% split for EBITDA in the first half. Just wondering if that's still the case? And is that in relation to constant currency or reported expectations?

It's definitely on a constant currency basis. That's the basis of all of our guidance. And we said at the time, approximately 45%, 46%. And if you work on either of those 2 numbers and the result from the first half, you'll get a constant currency number that is within our guidance range. So yes, probably not much more to say.

Could I also just ask about -- I know you've touched on it, but the FX there. And just you mentioned before it will still be a tailwind for FY '26. But does that mean it's flat or negative or a little bit of a tailwind in the second half? Are you able to give any insights there?

It's -- you can look at the rate -- like we've given you the rates in the first half. It is a headwind in the second half, which is why the tailwind for the full year will be less than the tailwind in the first half if rates continue, where they are today.

And just on depreciation and interest, are you able to give us an indication of the magnitude of the FX there as well?

We -- again, you can look at what's happened in the first half, and we obviously do have our natural hedge in place, where our borrowings are largely in the currencies of our operations. And so the effect of the FX at net line is significantly less than at revenue or EBITDA, but we haven't given any specific numbers around that. So I probably can't help you too much further.

And just on the Swiss acquisitions, I know you didn't want to get drawn into margins around these businesses. But just keen to know how far you have progressed in terms of the integration of those businesses there. I believe you said there was a 0% margin business or acquisition to begin with. So just really trying to understand the ramp-up and the ramp-up into our outlook and get a sense of if you're a quarter way there, halfway there or further progressed in terms of that contribution to margin?

So yes, thank you for that. So the -- I think we said at the time that we would like to see the EBITDA margin heading towards 20% over 3 years for each of those acquisitions, and we are tracking to target on that. That's the 3-year time frame as advised and everything is proceeding on track.

Are you able to give us -- are you halfway there or more? Or you want to be drawn into that.

I think it depends on the acquisition. So I mean, Chris alluded to earlier that there's not a totally linear process. It's punctuated as well as probably weighted forwards rather than towards the front rather than the end. So it's really hard to give you that total detail.

But in terms of the broad analysis of it, we're tracking to target on track for that 3-year time frame for each of those acquisitions. And we've given you some detail today about some punctuations in terms of lab mergers and new hub labs, which will be important on that journey.

I think maybe just to add, Jim, that we mentioned in the slide that the 2 biggest mergers are still yet to come. So you probably appreciate that that's probably where you're going to get more bang for your back out of those larger mergers. And so there's one in late in the second half of '26. and then in '27. So there's still a bit of a journey to go.

And I show our next question comes from the line of Lyanne Harrison from Bank of America.

Thank you very much for solid result today. I was wondering if I could come back to the United States, 2% organic growth there. Do you think that's reflective of the market? And also with some of your initiatives that you have in place in the United States around operating review, do you think you could grow ahead of that for the second half?

I think -- thank you for that question. And of course, our focus is on driving organic growth. We do have a lot of -- in the U.S. and across the business, we do have some tailwinds, as we mentioned, in terms of our Advanced Diagnostics division, which is performing really well and the dermatopathology division. So it's -- we're not forecasting to organic growth, but certainly, we'd like that to grow over the 2%. And the efforts that we're making both at top line, in particular, will, we think, drive that.

I think it's probably worth mentioning that Quest and LabCorp sort of quote larger organic growth numbers, but we don't know for sure, but they also do quite a lot of hospital deals. And I think there's some aspects of those that find their way into organic growth that it might be the specialist referral testing and the like. So I don't think to the extent that you're looking at some of their growth numbers, you should think of that as necessarily the market growth.

And if I could come to Australia, 5% organic growth, that was certainly ahead of your peers, they reported this week. Can you comment on your pathology trading to date? I know some of your peers in their results commented on maybe some softness in January. Are you seeing the same thing? Or are you seeing solid growth through the first part of this half?

Well, I think we have -- we're very, very happy with the organic growth that we've seen. There's nothing to change in terms of that story that we can see. It does come, we believe, from a few different initiatives, which are really bearing fruit. I think at base, it's the fact that we are focused on the quality of the medical diagnostics that we deliver, and that's a true competitive differentiator.

But it also comes back to our logistics and operational excellence. Our collection center network and particularly that focus on supercenters in terms of a great patient experience has been a real differentiator in the market. And so, we continue down that strategy.

But that specialist market growth, we talked about the hospital market today and our partnership with Ramsay at -- in Perth is really exciting. And that's a real trend that we're seeing continuing and not slowing down at all. In fact, the opposite. So we're excited about that because we're focusing on that high-value medicine, and that's really delivering that growth that we're confident about into the future.

And I show our next question comes from the line of David Bailey from Morgan Stanley.

Just a very quick one for me. Paul, you mentioned those currency impacts. If I run the average of the second half, I'm getting an EBITDA headwind of $20 million in the second half. If I run spot, it's about a $35 million headwind. So can you just confirm for the full year, we should be thinking of an FX impact to EBITDA in the range of flat to maybe up [indiscernible].

We're not guiding to that. So I won't be drawn on a precise number. You've done the numbers yourself.

I think those are a bit overcooked. I think --

Well, I don't know what today's rates are.

I guess, it moves around. But if you're using today's rates or the last few days rates, I think that sort of headwind for the second half is a bit more than I think we were thinking.

But just to be clear, it's a headwind in the second half versus a benefit of [indiscernible] in the first half.

Yes.

Yes. Correct.

And I show our next question comes from the line of Saul Hadassin from Barrenjoey.

Just a quick question for me as well. The revenues that you generate in Germany, can you remind me what percentage is now funded through EBM versus the GOA?

So the GOA represents about 30% of our German revenue with the EBM more like 40% to 45%. And then the balance is a bucket, if you like, of work where we can effectively set or negotiate prices, hospital outsourced contracts, clinical trial works, work we source from outside Germany, et cetera. So that's kind of the split.

Sorry, Paul, you're a bit soft when you mentioned the GOA percentage. Can I just check what you said there for GOA?

About 30%.

And I show our next question comes from the line of David Low from UBS.

Jim, you commented on the Fair Work Commission and talking with the government. I mean, the impression I got from your answer was that you're pretty confident that the government will step up and help fund the additional wage pressure. Just wondering whether that's the right interpretation.

Thanks, David. Listen, I think that the -- these are good faith discussions. It's positive that there's engagement there from our industry body. I can't speculate about outcomes. I think it'd be very premature. We are focused on doing the right thing by our employees, always have been and we'll continue to do so.

We are focused also on the high-quality medicine and sometimes that will require increased funding in order to deliver that. So we're making those points. But at the moment, they're just good faith discussions.

I think you alluded to the fact there were some precedents in aged care and child care, but whether or not that's relevant, who knows? Time will tell.

Would you care to put a time frame on it? I mean, you said it's premature at the moment. I mean, are we talking about this budget coming up?

I honestly can't say. We're not -- personally in those discussions, they're being led by Australian Pathology, which is our industry group, and I think it would be unfair of me to speculate on those.

But the wage pressure come through pretty much back end of this financial and into next year. So frankly, if you're going to get -- if the industry is going to receive it, presumably, it needs to come in FY '27 for not to lead to that reduced quality of medicine that you've spoken about.

Yes. I mean that's the facts of the Fair Work Commission decision. We know the phlebotomist change comes in from 1 April and it's phased through 1 January next year. And then the facts as they are is that the health professionals is likely to come in on 1st of July this year and then be phased in an unknown way.

So we do have some uncertainty still around that, as we mentioned, in terms of the timing and impact. But absolutely, the initial impact that we know of is going to happen this financial year, and we've quantified that. So yes, it's something which we're keen to progress, but I can't comment on how that's progressing.

Just changing topics. Slide 5 sets out 140 basis points of headwinds, can I need to talk to what we should expect second half go forward? I mean, which of those items is going to no longer be a headwind? I think in particular, the U.S. looks like a 350 basis point or margin hit roughly on my numbers, but some of it's restructuring. So it's a little hard for me to unpick what's ongoing and what's perhaps really weighted towards the first half.

Yes, it's a great question, David. So we can go through them in turn. Clearly, acquisition costs were particularly high in H1 because of the LADR acquisition, in particular. The German KV quota change is cycled through. So we don't expect any margin decrement in H2.

The LADR acquisition, we've talked about some of the great synergy realization work that we're doing and there's improvements in margin there. And similarly, with the Herts and West Essex contract. So in the U.S., we've unpacked a lot today about what we're doing there. So all of them, we expect to improve in terms of the year-on-year margin decrement. I'm not sure if Paul or Chris, you want to comment.

Yes, that's a good summary.

Can I just push a little bit more on the U.S. because given there's a restructuring charge, are we going to see restructuring charges in the second half? Or is that done?

Yes is the answer to that. There is still work to do there that we're working hard to do. And so there will be some restructuring costs in H2.

But it's probably fair to say de minimis in the scheme of Sonic so.

Yes.

It's a few millions rather than anything more significant.

And that could commence on the first half or just on the second half?

That's the second half.

And I show our last question in the queue comes from the line of Sacha Krien from Evans & Partners.

Look, I just got a question on the balance sheet. It looks like net debt, excluding lease liabilities, is come in a fair bit above market expectations, and it looks like it's working capital and CapEx. I think you touched on the CapEx question. But if you could maybe remind us what you think maintenance CapEx is for the business mix you now have?

And then also address the big step-up in working capital as a percentage of sales, if there's anything that might reverse out there? Or is that just the new business mix?

Just maybe on the maintenance question. Look, I talked a bit about it in answer to a previous question, but I think the maintenance percentage of revenue, maintenance CapEx percentage of revenue ignoring properties is probably kind of somewhere between 3%, 3.5%, excluding intangibles as well. So that's probably kind of a little bit of a rule of thumb without excluding any property investments.

Just your second part of the question, just remind me.

Just looks like -- it just looks like working capital has stepped up and really on a big decent decline in payables. Just wondering if there's something that's going to reverse there? Or is that the sort of new normal?

Yes. So there are -- obviously, we've had the growth of the company, including the addition of LADR. But the other thing, and you'll see some discussion about this in the 4D in relation to cash flow, there is this Change Healthcare issue that is ongoing in our U.S. business, where Change Healthcare, which is an outsourced billing and payments provider that we use for a large part of our anatomic pathology business and in fact, has some connections with our clinical pathology business as well in the U.S. had a cyber breach way back in February 2024, which meant that parts of our business were unable to bill and/or collect revenue for a very extended period of time.

And so, our debtors balances and to some extent -- and so Change Healthcare and its related parties loaned us funds to offset that loss of debtors collections and those advances are sitting as a liability in our creditors.

We've repaid part of it, as you'll see in the commentary, but we've still got some sitting there. And our debtors balance is still inflated in relation to that. So we think that situation will resolve itself by 30 June, but that is an issue affecting the balance sheet at the moment.

And do you think that's still a drag on the organic growth of the U.S. business, that Change Healthcare issue?

There's no doubt it upset our referrers during that period when we couldn't bill. And so patients would get a bill late and they'd be upset by that and they complain to their referrers, et cetera. So it hasn't been helpful that that's true, but we're probably moving on from that now.

We've pretty much cycled collections and the effect that, that would have had.

This concludes the Q&A session and today's conference call. Thank you all for attending. You may all disconnect at this time.

Well, good morning, ladies and gentlemen, and welcome to the Sonic Healthcare Limited AGM for 2025. My name is Mark Compton and as Chairman of Sonic's Board of Directors, I will chair today's meeting.

Before we start the meeting, I'm aware that we are spread across different parts of the country and possibly the world today. And I'd like to begin by acknowledging the traditional custodians of the land on which we meet in person today, the Gadigal people of the Eora Nation and pay my respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples and especially those who are joining us at the meeting today.

I've been advised that there is a quorum present, and therefore, declare the meeting open.

As is usual practice, we've got a few procedural matters to get with me. So you need to do 2 things. One is be patient and the other is to pay attention because they're important.

This AGM is a hybrid meeting, providing the opportunity for shareholders, proxies and guests to attend in person or participate via our online meeting platform. Online attendees can watch a live webcast of the meeting and have the ability to ask questions and submit votes in real time.

We expect the meeting to proceed smoothly, but would appreciate your understanding of technological issues do occur.

I'd like to introduce my fellow Board members, all of whom are attending the meeting today. Our Chief Executive, Dr. Colin Goldschmidt; our Chief Financial Officer and Finance Director, Mr. Chris Wilks; Professor Christine Bennett; Professor Suzanne Crowe; Dr. Katharine Giles; Mr. Neville Mitchell; Ms. Kate Spargo; and Ms. Nicola Wakefield Evans.

Also present is our incoming Chief Executive, Dr. Jim Newcombe, who you will hear from later, and our Company Secretary, Mr. Paul Alexander.

For our online attendees, whilst you've just seen a photo of the Directors, you will be able to see each of them in real time if they are asked to speak as part of the meeting. I note that Aish Chandran, our partner from PricewaterhouseCoopers, our auditors, is also in attendance.

For our attendees who are here in person, in accordance with the admission card that you would have received at registration today, only holders of green and pink admission cards are entitled to speak and vote at the meeting. Shareholders and proxy holders attending online can submit written questions through the online meeting platform at any time during the meeting.

To ask a written question, select the Q&A icon. Select the topic your question relates to from the drop-down list, type your question in the text box and once you've finished typing, please press the send button. Very important, you press the send button. Questions submitted online during the meeting will be read out by the Company Secretary, Mr. Alexander. Paul will identify the shareholder who has asked each question unless you indicate in your question that you do not wish to be named.

If the same or very similar question is asked by more than one shareholder, we might combine these and will endeavor to identify all relevant shareholders, although this might become difficult if there is a high volume of questions.

Questions submitted online will be addressed at the relevant time in the meeting. Questions are limited to 2,000 characters in the question field. However, if questions are particularly lengthy, we might need to summarize them in the interest of time. I'm pleased that 2,000 characters are not 2,000 words.

For those shareholders who wish to ask a verbal question, an audio questions facility is available during this meeting. To use this service, please follow the instructions below the Broadcast Window icon. Please ensure your webcast is muted before joining the call.

[Operator Instructions] Depending on the question asked, Paul will direct it to the appropriate Director or to the auditor to respond. Consistent with best practice, all items of business will be decided on by poll. I will open the polls now and keep them open so that you can vote at any time during the meeting. If you are eligible to vote and have logged into the online platform, select the Vote icon at the top of your device screen. Once you click this, the resolutions will appear on your screen and you can select a voting option.

There is no need to hit submit or enter, as the vote is automatically recorded. You will receive a vote confirmation notification on your screen. You have the ability to change your vote during the meeting until I declare the polls closed.

Doris Grave, from Computershare, will act as the returning officer for the purposes of conducting and determining the results of the poll, and the results will be announced to the ASX later today. The voting icon should soon appear on your screen if it hasn't already. Please submit your votes at any time. Following questions and discussion, I will provide a warning before declaring the poll for all resolutions closed to allow sufficient time for votes to be submitted.

If you're having any difficulties in locating the voting icon, please refer to the detailed guide available on Sonic's website. Thankfully, that's all the housekeeping matters done for now, and I'll move on to the matters of the meeting.

The minutes of the company's last Annual General Meeting held on the 19th of November 2024 are tabled over here and available for inspection by shareholders, and I will take these minutes as read.

Now to my address. Today marks a very significant milestone in the history of Sonic Healthcare. For the first time in 32 years, Sonic is undergoing a transition of Managing Director and Chief Executive Officer. Dr. Colin Goldschmidt will retire at the end of this meeting, and Dr. Jim Newcombe will become Managing Director and Chief Executive Officer.

Colin's performance in the role has been extraordinary, as he has led Sonic's expansion from a single laboratory in Sydney onto the global stage to become the third largest pathology player in the world by developing and committing the company to the culture of medical leadership. We understand that he is the longest-serving CEO on the ASX 50, setting a record that is unlikely to ever be challenged.

Under his leadership, Sonic has truly become a great Australian global success story, achieving market-leading positions in 7 countries by focusing on the highest quality medical diagnostics and excellence in care and service, and in turn, creating enormous value for all of Sonic's stakeholders over a period of more than 3 decades.

Colin has set the company for ongoing success by firmly embedding the culture of medical leadership within Sonic, a culture that incorporates an understanding of doctors and the medical profession, linking directly to operational and cultural attributes focused on care for staff and the highest quality service to clinicians and patients and ultimately value for shareholders.

Thanks to Colin's vision, Sonic's medical leadership culture has reset the bar for service and quality levels in Sonic's markets around the world, including enabling access for patients to highly specialized testing that could be life-saving and/or life-changing. In addition, Sonic has been able to positively influence the way regulators and funders perceive our medical professions.

We have asked Colin to spend a few minutes in his presentation today, reflecting on the history of the company and its culture, which I'm sure you will find both interesting and informative.

On behalf of the Board, Sonic's 45,000 team members and all of the other stakeholders in the company, including shareholders, I thank Colin sincerely for his incredible vision, dedication and leadership over all these years. Well done, Colin.

When Colin advised the Board earlier this year that he was considering retirement, after I got off the floor, in the shorter term, the Board respected his intentions and the remuneration and nomination committee led a formal detailed process with the assistance of an external adviser to consider both external candidates as well as a group of potential internal candidates that Colin had been developing.

The outcome of that process was the selection of Dr. Jim Newcombe to lead the company going forward. Jim is a pathologist, indeed a rare breed. He is one of those rare breeds who has a double fellowship. He is a fellow of the college of physicians and the fellow the college of pathologists, specializing in clinical microbiology and an infectious diseases physician and a senior medical leader.

He joined Sonic Healthcare 8 years ago and up to today was the CEO of Douglass Hanly Moir Pathology. Sonic's founding practice of one of our largest laboratories globally. He has been very successful in that role, driving a significant uplift in earnings and margins through his strategic initiatives in areas of operations, marketing and people.

The Board is excited by the passion and strategy Jim has for the company and he and the senior executive team will have our full support as they implement prudent change over time whilst preserving Sonic's unique culture and values.

Colin mentored Jim, in the CEO role of Douglass Hanly Moir Pathology, and the two have been working intensely on handover matters since the succession announcement, including traveling together to visit Sonic's operations in the U.S., Europe and Australia. After today, Colin will be retained as an adviser to the Sonic Board in a part-time unpaid capacity and will continue to Chair the Sonic Healthcare Foundation Board.

In addition to Jim's appointment, Mr. Evangelos Kotsopoulos, who is in the audience today, he's been appointed to the newly created position of Chief Operating Officer of the Sonic Healthcare Group. Evangelos has been with Sonic for 18 years and is currently the CEO of Sonic Healthcare Europe and Sonic Healthcare Germany overseeing Sonic's operations in Germany, Switzerland and Belgium. We believe the addition of Evangelos to the global executive team further strengthens the team and his skill set and experience complements very well those of Jim.

Turning to the company's performance in the 2025 financial year. Sonic delivered solid results, reporting revenue of AUD 9.6 billion and a net profit of AUD 514 million.

Strong revenue growth of 8% included 5% organic growth plus the revenue contributions of synergistic business acquisitions. I must say, no doubt along with fellow shareholders, we were both surprised and disappointed by the share markets reaction to our FY '25 results and guidance for FY '26.

Each reporting season in Australia appears to be more volatile with the slightest variance from market expectation, leading to exaggerated share price movements as index and quant funds follow the momentum. Having said that, there are areas for management to work on to improve financial performance in the company, and our management teams, including Jim and Evangelos are acutely focused on these with their fresh eyes.

Sonic stands today in a robust, stable position with a deeply embedded culture, experienced and senior management teams around the world, leading market positions in 7 countries and an investment-grade balance sheet. The company continues to grow with revenue for FY '26 expected to significantly exceed the milestone of AUD 10 billion and possibly even reach AUD 11 billion. This growth comes both organically as Sonic continues to benefit from the ever-increasing growth in global demand for diagnostic health care services and through carefully chosen acquisitions, such as the important LADR acquisition that was completed in July '25, which Colin will describe in more detail in his presentation.

We continued our long-standing progressive dividend strategy rewarding shareholders with total dividends for the year of AUD 1.07 per share, up 1% on FY '24. The dividend payout ratio for FY '25 was unusually high. However, we expect this to reduce to more normal levels as earnings grow over the next few years.

Board development, renewal and diversity are ongoing topics for Sonic's Board. During the year, Nicola Wakefield Evans AM joined the Board as an independent Non-Executive Director and her election by shareholders is on our agenda today.

Nicola is a highly experienced director, Business leader and Corporate Finance lawyer. Her appointment has brought new skills, experiences and viewpoints to the Board. Lou Panaccio retired from the Board during the year, having served Sonic and its shareholders diligently for 19 years. Sonic's Board currently comprises 7 Non-Executive Directors, all of whom the Board considers to be independent plus 2 executive directors being the Chief Executive Officer and the Chief Financial Officer. Board members include a pathologist, 3 medical practitioners in keeping to the company's medical leadership culture.

The Board's gender diversity objective continues to be satisfied with 56% of Directors being female and 44% male. Kate Spargo advised last year that she will permanently retire from the Board by the end of the current 3-year term, which will be in 2027 and we intend to conduct a process to recruit 1 and perhaps 2 new independent Non-Executive Directors during 2026.

Sonic's 2025 sustainability report is now available for reading at your convenience on Sonic's website, and I commend it to you. Good progress was made with Sonic's ongoing sustainability strategy during the year, including achievement of milestones such as completion of a quantitative assessment of the potential financial impacts on Sonic of climate-related risks and opportunities.

The sustainability report sets out our strategy, progress, governance structure, material sustainability topics and our climate-related risks and opportunities. The report also describes how Sonic cares for our people, our communities and our medical profession as well as updating you on the activities of the Sonic Healthcare Foundation, which provides health care support for communities in dire need.

The Board is proud of Sonic's efforts and progress in these important areas and trust that shareholders will be as well. I also recommend to you, Sonic's 2025 modern slavery statement, also available on the company's website, which sets out our approach to human rights and our management of the risks related to modern slavery.

Sonic Healthcare has a clear strategy to create value for shareholders through growth in earnings and returns on invested capital in a sustainable manner. We have in place the management team, culture and operational and financial strength to deliver on our strategy. Key to the strategy is to continue to provide outstanding service to our clinical and medical colleagues and our shared patients, whilst enabling fulfilling careers for our people.

I would like to thank our doctors, scientists, technicians, management teams and other staff members and my fellow directors for the passion, commitment and expertise they all contribute to Sonic. I would also like to thank all shareholders for your continuing support of the company and the board.

I'd now invite Dr. Colin Goldschmidt and then Dr. Jim Newcombe to present to you and ask that those here in person hold your questions until both presentations are completed, at which time any questions will be directed to the appropriate respondent.

So Colin, over to you. And I'll invite my colleagues if they'd like to sit in the front row so that we don't end up needing a physio at the end of the meeting with our necks turned around.

Thank you very much, Mark, and a very warm good morning and welcome to everyone, not just in the audience, but online as well. It's a pleasure for me to be presenting today, my last AGM.

And the first part of my presentation will be the statutory part, giving you an update on our performance to date and the second will be some kind of reflection on my past 32 years as CEO. So giving you an update on where we are after 4 months of trading. First point to say is that we reaffirm our guidance given in August to achieve EBITDA of $1.87 billion to $1.95 billion at a constant currency level.

And just a reminder that, that guidance reflects up to about 13% of EBITDA growth. And also, if you extrapolate down to EPS, it's double-digit EPS growth. An important point that we want to point out is the half 1 and half 2 weightings. We forecast the first half of FY 2026 will be roughly 45% to 46% of the full year number, which is consistent with long-term historical differences due to seasonality and also, we're keen to point out that last year FY 2025 was an exception to this where the ratios were tighter.

So that's an important point come next February when we announce our half year result. And just to give an indication for this, it's all because of the end-of-year holidays, Christmas, New Year's holidays in H1, which are very quiet. And also in the Northern Hemisphere, the summer holidays, which are generally July, August, also in H1. Both of those factors contribute to a weaker H1 versus H2.

We provide revenue updates after 4 months of trading and our statutory revenue growth is at 17%, which at constant currency is 12% and in line with our expectations; and within that 12% growth, organic growth sits at 5%. The LADR acquisition in Germany and the Herts & West Essex NHS contract are contributing to our revenue growth, albeit at lower margins relative to Sonic's overall margins.

There are 2 other important updates in terms of our guidance relating to depreciation and interest expense. Firstly, depreciation. We forecast that to be at $780 million to $790 million for the year at a constant currency level, which is a lower percentage of revenue than we previously forecast.

And the reason for this is we've adjusted now for the LADR acquisition and fine-tuned a bit further after 4 months of trading. Our interest expense increase is also expected to be at the lower end of the guidance range that we provided of 15% to 20%. And again, that's been fine-tuned after 4 months of trading. Both of these are actually positive in terms of Sonic's predicted bottom line result for the year. And the other guidance considerations are as provided in August.

A few slides just to revise the FY 2025 year. This AGM is meant to be a revision of FY 2025. I'm not going to bore you too long because this is actually old news. I think everyone knows these numbers. But essentially, the revenue growth was 8%. And if we go right down to the bottom, earnings per share came in at 6%, that's after adjusting for a one-off in the year before.

Having a look at Sonic's pie chart revenue for FY 2025, the features to point out. I don't know if you can see this pointer. Switzerland has increased quite dramatically compared to the prior year, and that's through acquisitions made in the year and just before and just to flag that this LADR acquisition is going to add something up to AUD 700 million.

And therefore, in the next pie chart that you'll see, which will be in February and again in August next year, Germany will be Sonic's #1 market, which is not unexpected. Our balance sheet remains at investment-grade level, which is very pleasing. And just one point out, our debt cover history, which you see on this side.

Following these 2 acquisitions, LADR and Cairo Diagnostics in the U.S., our debt cover will trend upwards more towards that 2.4x level, which is our long-term number.

As far as dividends go, the chart on the right shows you a long-term history of a progressive dividend strategy and the Board is determined as best as possible to continue that progressive strategy. The dividend for the full year was 1% up and the final dividend was franked at 35%.

I'm not going to go through this slide, which is the same as we presented in August, other than to say that this is -- it's turning into a fantastic acquisition for Sonic Healthcare. It's 1 of the top 5 labs in Germany. And the final point down the bottom here, the work streams that are working on all the synergy associated with this. And you can see from the map, there's a huge amount of overlap and plenty of synergy that we've identified are working at full steam. There's something like 18 work streams that are working feverishly to achieve those synergies.

The 2 founding partners, the Kramer Brothers, Dr. Jan Kramer and Dr. Tobias Kramer are fully involved. And you'll be pleased to know that they are actually now big shareholders of Sonic as well. They took a substantial part of the consideration in Sonic shares rather than cash, which is unusual, but seriously, a vote of confidence in Sonic globally, which is very pleasing.

There's a few slides included here on our sustainability, and I'm not going to go through the details other than to say that our sustainability team is working incredibly well and making incredible progress. And the chart that you see here is heading in the right direction for a reduction in our Scope 1 and Scope 2 emissions, and we are on target to achieve our goal by FY 2030. I highly recommend people read the sustainability report, which is available either from this presentation on the ASX or Sonic website. It's a fantastic document, 1 that we're very proud of.

Okay. The second part of the presentation, as I mentioned, is actually something of an impossibility for me, to be honest. I've been asked by Mark and the Board to give some kind of summation of 32 years as CEO of Sonic. So I'm kind of making apologies upfront for anything left out. But I have -- because I haven't really had enough time to reflect on a long career. It's just been so busy all these years.

But there are some things which stand out for me, and I'm hoping to convey them to you this morning. The Sonic story actually began in 1987 with Douglass Laboratories. That's a lab that was based in top right Sydney and a company called Sonic Technology Australia acquired this lab.

Nobody had ever heard of Sonic Technology Australia. The company was formed in 1987 and in September, it acquired Douglass Labs. It just so happened that in that same year, I had taken my first job as a pathologist. And oh my goodness, look at that photo, but that was from 1987. And some 5 years later, and I'm going to leave out a lot of detail here, I was asked to become the CEO of Sonic Healthcare.

And in fact, a few months later, in January 1993, I accepted that role. Now to be honest, I was something of a reluctant acceptor. I was 38 and was really keen to pursue a career as a pathologist. But a set of circumstances also drove me to accept the role. And the one thing that I was quite passionate about at the time was this concept of medical leadership, which just simply meant at that stage that not necessarily a pathologist, but somebody who understands a pathology business should run one.

And I felt that was not quite the case in the lab that I was working over those past 5 years. The company at the time was losing money. The share price was $0.10, and I'd like to ask the audience today, is anyone here -- was anyone a shareholder of Sonic Healthcare in 1987 or '88. Wow!

So I was also aware that the pathology industry was pretty fragmented at the time, very much a cottage industry. And as a public company, which Sonic Technology was, we potentially had access to capital to potentially grow. That's what the annual report looked like in 1993. And these were the Directors, so a Board was formed. And I'm keen to point out my colleague, Chris Wilks down the bottom here; and Mark, thank you for publicizing the fact that I had this dubious honor apparently of being the longest-serving CEO on the ASX.

And I'd say it's dubious because I'm sure there's a lot of people who say, get these old buggers out. But I'm sure Chris would actually get the same honor as the longest-serving CFO on the ASX 50, and nobody has actually publicized that.

But thirdly, as a combination, CEO, CFO, we must hold the record. And I'm very proud of that, too. So we made a little acquisition in 1994, and we merged this business into Douglass, but it wasn't until the acquisition of Hanly Moir in 1995 actually is when it all started that things really got moving and the plan was to merge these 2 laboratories.

Now it very quickly became known as the merger from hell because, firstly, this was the first major pathology merger in Australia, highly complex and very high risk. We had to integrate overlapping systems and staff from each practice. We had to create a single IT system and merge databases. We had to unify the cultures. We actually had to build a new laboratory and move both labs into this new facility.

And of course, we had to capture financial synergies and get that 1 plus 1 equals 3, and make it seamless for our customers who were clinicians and patients. This is a tough ask. If you understand labs, which most people don't, and that's okay, they are very complex organisms or organizations. And so putting 2 together is tough.

And after a lot of work, a lot of people, it succeeded. I was the CEO of both companies because that's all Sonic was at the time. It was Douglass and now the 2 -- the merged entity. And I try to lead this very much as a merger of equals. And that meant sharing management positions, which was controversial.

And we had to come up with a new name. And not unsurprisingly, we chose Douglass Hanly Moir Pathology, a name that probably most of you know. It's a bit of a mouthful, but it was given to respect the goodwill of both practices and their antecedent history. We also had to come up with a new logo, and we ran a logo competition. This is the logos of the two labs.

That one -- this is a biconcave disk, that's what your red blood cells look like. And the half moons on each side is the old computer punch cards. And the Hanly Moir one is a stylized H&M in a monocular microscope, which is antique -- antiquated. So a new merger was -- a new logo was a good idea.

And we ran a competition in the company, and that was the winning entry. We gave it to a graphic design company and they came up with that. And the winner was one of our long-standing pathologists, Dr. Grahame Caldwell, and he got $500 for this. I understand in today's money, that's about $1,000. And Dr. Caldwell is one of our star performers. He's now the Director of Chemical Pathology at Douglass Hanly Moir Pathology, and he's been there a long time.

So there was the new name Douglass Hanly Moir Pathology, the name that you see today. We locked in the medical leadership concept in management. And it galvanized our pathologists and staff immediately. We enhanced our services through enrichment. And by that, I mean, there was talent from both entities. And if you use them both, you get enrichment of services, and that's very much what happened.

There can be no doubt that this was a hugely successful merger. And if you look back, growth, services, synergies have all been supercharged since then, DHM's revenue is now more than 10x what it was back in 1996, and it's almost all been organic market share growth and market growth combination.

And Douglass Hanly Moir has moved into the #1 position, not just in Sydney or New South Wales, but in Australia. Largest by revenue, largest by any measure. And you might be wondering why I'm spending some time on Douglass Hanly Moir Pathology? But if I look back on it, it was a critical event in Sonic's history. It was, even unwittingly at the time, a test site for medical leadership. Would that work? Because a lot of people told me when I got the CEO job that it will fail, they told me to my face.

It was a test site for operational excellence to get this thing done. How good were people in the lab and the whole operation. It was a test site for quality and service enhancements. Did it grow after that? Were synergies achieved, and did we deliver earnings and margin growth?

And really, it's been a triple-win situation for stakeholders, the staff, customers and shareholders. And if I look back, it's an absolute model and a platform or it became one for Sonic's future growth. And I do see it today as -- and I describe it as a fiery birth of Sonic Healthcare because it was tough.

If you look at the pathologists at Douglass Hanly Moir today, and I have shown this slide before, they've gone from 3 to over 100. And it's not just 100 any. These are the cream of the crop. You have here experts in every discipline of pathology and subdisciplines of pathology. And I can say upfront that if your specimen reaches Douglass Hanly Moir Pathology, it's going to be very well attended.

Now as we speak right now, Dr. Jim Newcombe is the CEO of Douglass Hanly Moir Pathology. And in about 1 hour or 2 hours, he will go on to higher duties. And I'm very pleased to say that Dr. Melanie Galea, is Melanie in the audience? Yes, she is, will be taking on the role of CEO of Douglass Hanly Moir Pathology. Melanie is one of the star performers in this group of pathologists. She is the Director of Genetics at DHM and a key member, if not leader of Sonic Genetics, which we operate nationally and is an outstanding institution, not just for Sonic, but for the whole of Australia. So congratulations to you, Melanie.

If you look at what happened after this. These are all the acquisitions we've made since going all the way through to the LADR acquisition, that's the top 1 and Cairo Diagnostics there. We had no idea back in 1996 that any of this would happen. So we changed the name from Sonic Technology to Sonic Healthcare fairly early. Nobody should remember Sonic Technology, it's gone.

But the Sonic name is quite well known. So we kept it and added healthcare. And we applied the Sonic logo to Sonic Healthcare as well, even though initially, it was for Douglass Hanly Moir. And you now see this logo everywhere. You'll see it in small country towns. You'll see it in big cities. It's in Dallas, London, Berlin, Zurich, everywhere.

And of course, we're extremely proud to have it. It's -- you'll see that we don't brand Sonic Healthcare in any of our operations for very good reason, but we do have a unifying logo, and this logo is getting more and more known as we go. After that merger, Sonic Healthcare led the consolidation of the Australian pathology industry. We acquired several other labs, including the SGS Group, which included labs like Sullivan Nicolaides in Queensland and Melbourne Pathology and Diagnostic Services in Tasmania and a bunch in New Zealand and a whole lot more, and we also entered radiology.

And at that point, we all said, take a deep breath, let's stop. And we held 2 important off-site meetings one in [ Coolum ] in the year 2000. And at this meeting, we locked in our federated model, and we also polled after the meeting a huge number of our staff to come up with our core values.

The federated structure is very important, and it simply means that a lab like DHM or Melbourne Pathology gets limited autonomy. We keep the name, we keep the goodwill, we keep the local flavors and keep the management, but that lab needs to work in tandem with its sister labs around a central office to achieve synergies. And of course, back then, it was only about a national structure.

But once we went global, it became a global structure as well. So each country is a federated member as well and we now do a whole bunch of things on a global basis to achieve synergies. For example, our purchasing consumables, there's a bunch of IT things, cybersecurity. There's a range of things that we do on a global scale.

And it's -- this is an important part of Sonic's, I guess, structure. The second meeting was 2 years later in Double Bay, Sydney, now with radiology included. And this was an electric meeting and a very important one because we locked in the principles of medical leadership, which had been operating basically since I started, but we wanted to formalize the principles.

And we came up with these pillars down the bottom. And I think we were a bit ahead of our time because that company conscience, which we put in, would now be called sustainability or ESG. And to be honest, medical leadership is, as Mark foreshadowed, or said, the essence of Sonic Healthcare.

It's interesting when people say, why is Sonic different from, I'm not going to mention any competitors, but in Australia or anywhere? Nobody actually comes up with the right answer. It doesn't matter because as shareholders, I can tell you that the difference is medical leadership. Some say, "It's because of automation or because they rolled up the industry." It's not that. This is what's given us the big product differentiation in every market that we operate in.

And it is very much the engine for quality, growth and financial performance. We came up with a definition, and I want to acknowledge Dr. Stephen Fairy here, Sonic's Global Chief Medical Officer, who's in the audience with us today because he worked with me to come up with this succinct definition, which was not all that old. Maybe we only came up with this definition something like that 5 or 10 years ago, not at the beginning.

It simply is what it says: medical leadership is leaders who understand and respect doctors and the medical profession. And generally, when I talk about this, people get glazed eyes and they say, "So what? Big deal. What's the big deal about this?" But I can tell you that the vast majority of health care companies, organization, systems do not have leaders who fit this diagnosis.

So they have CEOs who don't understand their businesses. I can talk freely now because this is my last day. It's very good. But I find that astounding. And this applies in private businesses, public institutions right around the world. It's given Sonic a leg up because to understand the business makes a big difference.

So you don't have to be a doctor to be a medical leader, and we have plenty medical leaders in Sonic who are not doctors. But I think if you are a doctor who has leadership capability, you will more readily fall into this definition. You will understand medicine, understand doctors and by understanding doctors, we're talking not just about doctors who refer their specimens to us, our own doctors, so understanding our pathologists, radiologists and GPs.

The downstream effects of medical leadership are powerful, and I'll start over here firstly with staff. The medical leadership concept resonates strongly with all staff, but especially with doctors. It actually engenders passion and also trust. And the word trust is very important for doctors.

So if a doctor joins a corporate organization, he or she wants to trust management so that no decisions are going to be made, which will compromise their professional integrity. It's huge for a doctor. This is something that is probably not readily understood generally. But if you ask doctors, they'll tell you, it's probably the most important thing for them and it's the reason why doctors have been attracted to Sonic Healthcare, trust in management through the medical leadership model.

And of course, that leads to high quality. So if you have engaged passionate staff and doctors you're going to -- people going the extra mile, you're going to get better quality and better service and of course, that's going to feed through to shareholders. And I'm afraid the order of events has to be in this direction. This is not putting shareholders number 3. And many companies say the customer is #1. We start at staff. And that's the way Sonic has been run since the beginning and it's for this reason.

And in my opinion, medical leadership is the appropriate, if not the optimal management system for any health care company, practice, organization system and I think the world would be so much better off if medical leadership was applied to the majority of health care companies and institutions, which do not have it. So there's my little message for today.

So time is not going to allow me to go into what happened after this. But in 2002, we took our first step offshore. And the reason was we had run out of growth opportunities in Australia in terms of acquisitions. We had topped out reaching something like 40% market share, so not able to make further acquisitions. And the U.K. was our first port of call followed by Germany followed by the U.S.A., then Switzerland in 2007, Belgium 2010 and now Poland in 2025.

We've inherited a small but very successful business in the south of Poland through the LADR acquisition. And amazingly, we're the market leader now, not just in Australia, but in the U.K., Germany and Switzerland as well. I look at this and I say, "Wow, that is incredible." We're the #3 player in the U.S.A. and the #2 player in Belgium. And in terms of radiology, we're #2 and in primary care, #1.

And so we have an incredible global footprint now, which has been driven by medical leadership and to a lesser extent by our federated model. I can tell you quite honestly that about 90% of these acquisitions would not have occurred without medical leadership or I could put it the other way, occurred because of medical leadership. And if you look at this pie chart, which I showed you a little earlier, just to look at the Australia versus international split, it's 63-37 at the moment. And if you add the LADR acquisition, it's 70-30.

And what is going to happen into the future inescapably is that number or the Australian number will get smaller and smaller. And that's to be expected and a good thing for shareholders and a good thing for the company. If we just look at the pathology, we're 85% pathology and 15% radiology and primary care, the split is 75-25. So 75% of our pathology is overseas, and if you add the LADR acquisition, it's going to be closer to 80%.

And as we make more acquisitions overseas, it's going to be 90% and 1 day, it's probably going to be 95%, who knows. But Australia is a small market relative to where we're operating overseas. And we're very proud to have these institutions, fantastic labs in Europe and in North America. And I have to say our labs are providing critical infrastructure. Infrastructure that is not just for communities and not even just for states, but in many cases for entire countries.

In Australia, Sonic provides critical infrastructure. We provide critical infrastructure in Germany and in Switzerland as well. Meaning that if our operations failed, the entire health care system in those countries would fail. And you can take that even down to state level. So just if -- if a bomb dropped on DHM, the entire health care system of New South Wales would fail. I'm not being overdramatic. This is true.

So last few slides. To try and summarize my 32 years as Sonic CEO, I would say first up that Sonic is a culture-rich company, and it's centered on medical leadership. The medical leadership resonated so strongly after I became CEO, that it became our culture. It was almost -- happened just almost by itself.

The culture -- that culture started working to attract top staff, and it became obvious that medical leadership drove quality. So if you have medical leaders, and you put doctors at the center of what we do, which is our practices, you're going to get better quality. And it also engendered passion to serve patients. And so the business plan actually fell into place by itself as well, effortlessly and logically.

And those sub-bullet points are actually quite important. So if you have the highest levels of quality, you're going to be driving market share growth, organic growth. And that's absolutely what has happened. If you attract other labs who want to sell to Sonic because of medical leadership, which I've just mentioned, that's going to drive M&A growth.

So those are 2, organic and inorganic growth taken care of. Those labs that sell to Sonic are like-minded. They believe in medical leadership just like we do, and that makes the integration of these businesses so much easier. You will read about how many mergers fail around the place. We have an excellent track record in our M&A and merger activity.

And of course, it avoids this integration dysfunction, there is no other word for it if people are like-minded. And of course, the passion and efficiencies and innovation that come through a culture like medical leadership optimizes efficiency, innovation, leading to earnings and margin growth.

If I think about my role over 32 years, my formal qualifications have been a huge help. That's just really how it is. I often say, well, it didn't need to be Colin Goldschmidt. It could have been anyone with these qualifications, it made a big difference. Being a medical doctor and being a pathologist gave me credibility. It also -- I could talk the language. There was a whole range of things that really made a difference.

It was also very useful that I was running 2 jobs for most of my 32 years. That means I was the CEO of DHM or Douglass at the start, then DHM and the CEO of Sonic Healthcare. People don't know this. I'm letting out a secret here. But that was enormously helpful for me because it kept me grounded. I was involved with day-to-day issues, and that gave me credibility talking to acquisition prospects, for example, other labs and our staff as well rather than being seen as somebody managing from an ivory tower.

It's important to know that our scale and financial strength have been built incrementally bit by bit, block by block over many years. I say to Jim and Jim has taken this job on incredibly. I've had the advantage of learning slowly over 32 years with -- starting off with little experience, but learning on the job and you reach a point where -- up here, where there's a whole lot of knowledge about the company. Jim is coming in and has to really make a big leap up, which he is doing amazingly well, and I have every confidence that it's going to be okay.

But that incremental building has been very important. We have attracted top talent and that top talent has stayed. We have very low churn at senior level, which is critically important. As Mark said, we have 45,000 people roughly in 8 countries. We see about 130 million patients per annum. That's massive.

And these are essential services. And what we do really is a force for good. When I started, the revenues were $33 million, and it's hard to believe that we're now tracking towards $11 billion. This kind doesn't really flush with me. But this has all been due to medical leadership when I look back.

Medical leadership is really -- it's an ideology or a movement. I don't know how best to describe it. It's our culture, and it's our higher purpose. And throughout my term, it's been the priority. And it's almost as if that prioritization has transcended individuals, including myself.

So in me, there's no charismatic CEO, I've never been that person, couldn't be that person. But medical leadership seems to have been the dominant feature of the company over a long period of time. But having said that, I'm very conscious that you're only as good as your team. And we, a team of people, have worked incredibly to achieve all the ends and to lock in medical leadership over a long period of time.

I have to say that the Sonic story, in my view, has only just begun, 38 years old, Sonic is today, and that's as long as I've been with Sonic, but there's a lot of work ahead and huge growth potential ahead, and obviously, no room for complacency. And I have to say it's been an absolute amazing honor for me over that period of time, 32 years to lead Sonic Healthcare.

Final slide is just a bunch of thank yous, which I feel are very, very important. I want to thank all Sonic people because I've got to know so many people over the years. It's interesting, a gentleman by the name of [ Colin Friend, ] is that the meeting? I don't know where Colin is. There he is. Colin used to work at Douglass. And Douglass and Douglass Hanly Moir, many years ago, I think it's 20 years ago.

There's so many people -- I recognized Colin immediately. But there's many others. Sorry, I can't mention too many names, but around the world. I want to thank our global office team here in Sydney with whom I work every day. We've got a brilliant team who do brilliant work and really are at the top of Sonic Healthcare's operations.

If I have to single out 2 people, it's Chris Wilks, my CFO; and Virginia Lloyd-Tait, who's in the audience as well. Chris, both of these have been at my side from the beginning. Chris, more on the corporate side, Virginia at the operational side, enormously valuable to me as CEO of Sonic.

I want to thank the Board of Sonic very much every single person, this Board and previous Boards. And I want to single out Mark Compton. I hope you don't get embarrassed Mark in front of you here. And I can just say in one sentence, Mark is an exceptional Chairman. I've worked with a number of Chairmen. But even besides the number, an exceptional Chairman.

I want to thank shareholders, too, because without shareholders, we'd be nowhere and that means retail shareholders just as much as institutional shareholders. We have a large number of retail shareholders here today and elsewhere and online. I don't know what -- it's a big number, and we hope to do you good into the future even though I won't be there. I hope the company will be.

I don't want to leave out health care analysts. It's a surprising addition to my thank you list. But many of the Australian health care analysts have been there a long time, even though they move between companies, they know Sonic very, very well. We love them even if they have recommendations to sell Sonic.

And finally, I want to congratulate 2 gentlemen. Firstly, Evangelos Kotsopoulos, who's here in the audience. And I'm so delighted that Evangelos has taken on the role of Global Chief Operating Officer for Sonic, a position that we have not had until now. Evangelos has been with Sonic for 20 years -- almost 20 years now, I know him extremely well, and he's a highly talented person. You can say that Evangelos has led Sonic strong growth in Germany and Switzerland, which has been our biggest growth area over the last 10, 15 years. And it's absolutely delightful that Evangelos is in this position.

And finally, to my successor, Dr. Jim Newcombe, I'm absolutely thrilled that the Board and Remuneration Committee came up with Jim as my successor. Jim has been with Sonic 8 years. I know him well, and I'm very, very confident that Jim will lead Sonic to great success into the future. Thank you very much.

Finally, it's going to be my pleasure now to hand the baton, actually, it will be a podium in this case, to Dr. Jim Newcombe for his presentation. Thanks, Jim.

Thank you so much, Colin, for that amazing presentation and another big thank you from me personally for your incredible service and what you've created here at Sonic Healthcare. I'd also like to add my thank you to Evangelos Kotsopoulos for joining the senior global team and look forward to working with you and the rest of the Sonic Healthcare team into the future.

It is a wonderful honor to join you as the incoming CEO and Managing Director of Sonic Healthcare today. I want to talk to you a bit more about the Sonic Healthcare difference and what makes a world-leading value proposition from that difference.

I'm a pathologist and infectious diseases physician, trained in Australia and also completed the U.S. medical licensing examinations. I've been with Sonic for 8 years, most recently as CEO of Douglass Hanly Moir Pathology, as Colin has said, with now the largest clinical and anatomical pathology laboratory in Australia.

Whilst the DHM, with a wonderful team of pathologists and senior managers, many of whom are joining us today, we grew market share significantly and post-COVID achieved strong realized margin on revenue growth. I've also held national and global leadership roles with Sonic, including as account manager for the national bowel cancer screening program here in Australia.

Our value proposition is both simple and incredibly important: We deliver high-value medicine and that high-value medicine drives growth and financial performance. We deliver high-value medicine embedded in the medical leadership culture, which attracts the best staff and retains them, often for their entire careers and in turn, attracts referring doctors and patients.

We have a global reach, serving millions of people every year with highest quality medicine, as a leader in specialized diagnostics, delivered at scale and providing a critical community service where we operate. In turn, this high-value medicine drives growth and financial performance through revenue growth as a specialist in personalized precision medicine and serving the increased complex and chronic health care needs of our communities.

We are driving margin expansion by a focus on specialized testing and realizing the efficiencies from our medical excellence and our scale. All of this is leading to enhanced return on invested capital, combined with disciplined capital allocation. I wanted to unpack for you some examples of just how we deliver high-value medicine because I think they're truly inspiring around the world.

And all of this is embedded importantly in that medical leadership culture. It makes us a truly medical practice. Even despite our size, we all consider ourselves to be working in a medical practice, which has the highest purpose and attracts the best people, inspiring them to go the extra mile to deliver high-quality medicine to their communities.

In turn, our customers, whether they be patients, referring doctors, governments, hospital systems are attracted to that high-quality service, understand the passion that our staff have. And that builds the trust and brand value, which is sustained over time. Attracting organic growth and also like-minded medical practices for partnership and acquisition opportunities. You as shareholders understand that our passionate staff and its loyal customer base has created and will continue to create long-term value through sustained strong financial performance.

All of this combined, we call the Sonic difference, it is what makes us different from other health care companies, although it should be common, it's not, and we are very proud and we will continue it into the future.

Our people around the world are at the heart of everything that we do. I was very pleased to travel with Colin and Evangelos recently around the world to meet many of our people in Europe, the U.K., United States and Australia. And it's truly inspiring to see their dedication, their passion, their commitment to highest quality medicine serving their communities.

Included in that group were the Kramer family and the Risch family, in Germany and Switzerland, respectively, 2 multigenerational pathology practice families that have recently joined Sonic Healthcare because they're attracted by a medical leadership culture and what we stand for as a company. And I'm very pleased to say that they have stayed on in senior management positions in Sonic Healthcare contributing at that national level and global level to our company, and we are so pleased to have them as part of our group.

Our global presence is unrivaled and is worth just going over again. We have a leading position in clinical services, radiology and pathology here in Australia and leading positions in pathology in Germany, Switzerland, Belgium, the U.K. and the United States. This enables us to deliver this high-quality medicine at great scale, but I wanted to give you some examples of what that means at a more local level as well.

In personalized precision pathology, our GynaePath practice in Australia is truly a world leader in providing specialist pathology as a women's health provider to obstetricians, gynecologists, GPs and their patients. Around the world, we are a leader in highly specialized diagnostics. For example, in Germany, our Medical Laboratory Bremen, which is a leader in advanced esoteric or very highly specialized diagnostics for Germany and attracting referrals from around Europe.

In the U.S., our thyroid pathology center of excellence is second to none, a combination of AP and CBLPath and genetic sequencing and ThyroSeq combining to create the best pathology solutions for thyroid disease, and again, attracting referrals from all around the United States.

We're extremely proud to partner with governments around the world to serve their local communities, most recently with the Herts & West Essex large NHS pathology partnership, and we are building a brand-new laboratory locally opening next year to serve the needs of that community.

Cancer is one of the highest burden diseases, not just on patients, their families and their referring doctors, but on health systems in general in terms of costs. And we are a leader in this space in cancer diagnostics and in Australia in treatment. We partner with governments to provide large-scale population screening, for example, cervical screening London in the U.K.; in Australia, the National Bowel Cancer Screening program and are a world leader in research and innovation in anal cancer screening, offering new solutions for early diagnosis of this high morbidity, high mortality disease.

One hundred percent of cancers are diagnosed by pathologists with pathology practices. And so we're extremely proud to have around the world subspecialized anatomical pathology practices offering the best solutions for those patients. For example, here in Australia, Sonic Uro Dx, a leading uropathology practice, offering prostate and bladder cancer diagnosis.

Through digital pathology and AI innovation, Pathology Watch is an important diagnostic tool for skin cancers, and we offer targeted cancer gene testing in many different ways around the world. For example, through our HSL advanced diagnostics laboratory in London offering blood cancer testing.

Once a patient is diagnosed with cancer, they and their doctor need to understand the prognosis so they can understand the natural history, the best treatment pathway for them, and we are a leader in this space as well. Our Radiology division offers the latest in PET CT scans to determine where cancer is spread. Our Oncotype DX partnership in Germany has leading genetic testing for breast cancers.

And around the world, we are a leader in comprehensive genomic profiling, next-generation sequencing of the entire genome of a cancer to best determine the treatment pathway for a particular patient with a particular cancer. And in Australia, we are so proud to have the IPN medical centers and a leading network of skin cancer clinics offering cancer treatments. This high-value medicine has driven and will continue to drive our growth and strong financial performance into the future.

Our revenue history is really remarkable and will continue to grow into the future, both in Australia and internationally. The reason for this is that we have benefited from and continue to benefit from strong inherent growth drivers in our markets. We are truly a cornerstone of modern medical practice in terms of our diagnostic abilities, now more so than ever in the way that medicine is practiced and are considered nationally critical infrastructure where we operate.

We are serving in our markets, aging populations and increased complex and chronic health care needs. And we are creating new markets including the medically guided customer market where physicians guide patients for their best pathology needs, whether that be in Germany through Mein Direktlabor or TDL Tinies in the U.K., where patients can collect the pathology in the comfort of their own home.

We're also a leader in personalized and precision medicine, for example, pharmacogenomics, sequencing a patient's DNA to understand their own personal reaction to a specific drug, for example, in the psychiatry space. And in microbiomics, we are very proud to offer patients the keys to unlock their gut health. All of this points to a trend globally to more complex, higher value diagnostics at which Sonic Healthcare is a natural leader.

In addition, we attract like-minded medical practices like the LADR or Kramer Group and the Dr Risch Group mentioned earlier, who wish to join us and further enhance our high quality and our growth.

In addition to top line revenue, we are focused on realizing the efficiencies from our scale and have a strong focus now and moving forward on growing our earnings per share and our return on invested capital through targeted cost base control and innovation, investing in laboratory automation in digital pathology and AI and leveraging the benchmarking and standardization that we are able to take globally and apply it locally. We have dedicated hard-working integration teams who are realizing the synergy from our acquisitions in Germany, Switzerland and the United States.

So to summarize, Sonic Healthcare is a world leader in high-value, highest-quality medicine. That high-value medicine has driven growth and will continue to because it attracts the best staff and, in turn, referring doctors and their patients; it places us at the forefront of innovation; it increases our market share organically, especially in the high and specialized market; and allows us to realize the efficiencies from our own medical excellence and our global scale.

Thank you very much for your attention. I look forward to working with all of you.

Thank you very much, Colin and Jim. I think they both deserve another little round of applause for 2 terrific presentations. We are as owners of the company as shareholders and those who work in the company, but most importantly, I think, our referring doctors and the patients who we have the privilege of sharing the care with are very privileged to have such great leaders in Sonic in its history and in its future. And we can all be very comforted and confident in that.

One of the things I did want to touch on is that and I'm going off piece, so the Company Secretary will worry because I'm not following the script is about legacy and honoring 32 years of extraordinary leadership and extraordinary company building. And there are many things that are already happening around the company, and Colin's being quite appropriately lauded by many Sonic people across the world as he's been handing over to Jim and making visits and there's more of that to come, and that is absolutely appropriate and more is better.

But 2 things I thought I might just touch on from a Board perspective that shareholders and others might find of interest. Secondly, the Board has resolved to do 2 things. One is to agree to continue to support in a very formal way, and there'll be some more detail about this in due course, education, scholarships in the area of medical leadership and health care leadership. So that we can continue to develop the up and coming leaders in Sonic and across the world, generally in health care in this very special area and very important area and very successful area of medical leadership.

The second thing that we've done is a bit more tangible. From Colin's presentation, he talked about the fiery birth of Sonic at Douglass Hanly Moir. So I'll use the metaphor of the crucible, which is where Sonic and indeed, where Colin was forged in flame in terms of his role. At Douglass Hanly Moir as a pathologist initially and then as Chief Executive and the Chief Executive of Sonic.

So the Board has also resolved that we will honor Colin by naming the building of Douglass Hanly Moir, our big lab out at Macquarie Park, as the Colin Goldschmidt Building. Exact title to be described, and we will have a proper event and things in due course, but there'll be a lasting memory of the person who really founded this place, who was forged in the fire and has given us these great shoulders on which to stand as we head into the future. So Colin, congratulations, again, thank you very much.

We now have time for some questions, and I'm looking to the Company Secretary if there's any? We might do with any on the floor first, nothing on the screen at this point. So questions from the floor? Any questions for Colin or for Jim. I'm happy to take questions of a general nature.

Clearly, on a day of reflection for Colin, so thank you for your efforts. I could say a lot more, but I'll leave it at that. Today is a day of reflection of looking back, which we've done well, but also we need to look forward.

And so my question is in the context of looking forward to Jim. Previously, at AGMs, I've talked -- have asked the question about artificial intelligence and where we are with that. Clearly, in the last 12 months, that seems to just be going ahead further and further. So can you answer these 2 questions? Can you talk about the usage rollout or what have you of AI going forward? And where do you see -- or what do you think you'll be saying to us in 5 years' time about what you've achieved in that time?

So thank you for the question. I think the -- in terms of AI, there is clearly a place in pathology for AI, but not just in terms of what we've talked about a lot is Pathology Watch, for example, which is an AI tool applied to anatomical pathology, and that's being rolled out at pace in Australia and in the U.S. and Australia. And it's a wonderful tool to improve the quality of what we do as well as efficiencies.

We are also looking at other AI tools within the laboratory and trying to embrace that. The future moving forward for AI is going to move so quickly in the next 5 years, it's very hard to say what that looks like. What we're always focused on, first and foremost, is the quality of what we do. If there is a quality dimension to it, that needs to be there to add medical value.

If it adds medical value with a medical leadership culture and adds financial value as well, then that's where we want to be aiming, that's the kind of thing we'll invest in into the future and that's what we'll continue to talk about to shareholders.

Thank you very much. Thanks for your question. There was a question down there that I just cut off at the past unintentionally, I'm sorry.

It's not for Jim or Dr. Goldschmidt. So if I've noted things correctly, all but one of our company's non-executive directors recently purchased shares on market and Professor Crowe paid the lowest price when she purchased over 2,000 shares at $2.12, so congratulations.

Might have been a bit more than $2.12 or I missed an opportunity.

Sorry, $21.12. So this is part of what we want to see from our Directors. When we see non-executive directors buy in market, particularly in such numbers, you clearly perceive value, and I agree. Sonic seemed like good value, maybe exceptional value at the moment. A key role of all directors is to efficiently allocate our capital, and it seems that you're allocating your own capital astutely.

The most recent buyback announcement, was sure it was late October 2022. The highest price paid was 37.45% and the lowest price paid was $30.10. And over 12.5 million shares were repurchased in total if I'm getting my numbers correct here.

So I'd like to address a 2-part question, if I may, to Professor Crowe, who allocates money so astutely. So what is a key determination in determining the price Sonic is willing to pay when repurchasing shares?

It might be a better -- Suzanne is welcome to comment of course or it might be a better question for the finance director. Chris?

Yes. I think you're probably right with those numbers, it was about $425 million, I think we did in the buyback back then. Obviously, with the benefit of hindsight, it would have been nice to be spending that money at today's price.

Look, it's something we -- when we're allocating capital, we look at acquisitions, we look at the returns we can get on the acquisitions like LADR or the Cairo, which we've just done recently. So it's a balance between whether those acquisitions are going to give us a better return or whether we think the return on buying back shares is going to give us a better return. So that's something that Board considers from time to time, and we will continue to do that and look at options. But -- so capital management is always very high on the agenda of the Board.

Does that answer your question?

Pretty well. I mean -- and I mean, a part of the challenge, of course, at the moment is because you are close to your debt targets or the debt levels that you want, your hands are somewhat tied, but also surely, that means that when you allocate capital, you've got to allocate it courageously really, and that generally means holding back some money in reserve for when you get these opportunities if they are indeed amazing at $21.12.

So perhaps even -- no one might want to join me for a couple of coffee after, but perhaps even the progressive dividend policy isn't appropriate because it's possibly restricting your capacity to buy back shares.

So maybe I'll just add that -- and this has already been made public in some presentations. We also are considering potentially some sale and leasebacks on our property, which gives us a bucket of capital. It's something like $1 billion worth of property that sits on our balance sheet right now that's -- if it was sold and leased back the yield on that is probably around about 5. So that's another opportunity to free up some capital on the balance sheet.

So -- but you're right, all of those things, the dividend levels are all considerations. The growth in our profitability should improve our capacity and reduce our debt to EBITDA just in the course of this year. So they're all -- it's a good question, but I think we've got a pretty good handle on the tiller right now.

There's a lot you do exceptionally well operationally, absolutely. And congratulations, Colin, and thank you for what you've done.

Thank you for excellent observations and the questions, we appreciate it. And very happy to have a cup of coffee afterwards. Thank you very much. Other questions from the floor?

Great presentation. Are you thinking of -- I noticed there's no expansion in Asia. Are you thinking of expanding in Southeast Asia and Asia and possible hospital acquisitions? That's the other question.

The brief answer is no and no. I think -- we always look at opportunities, obviously, for acquisitions. We're an acquisitive company as well as an organically growing company. There's much to do in the jurisdictions in which we already sit in terms of Europe, U.S., U.K., et cetera, and things that we look at around what are our local connections, sovereign risk, payment systems, talent, a whole range of things.

And we don't want to try and cover the world to the depth of a millimeter. We're good to stick where we are, understand where we are, understand the people, the way it works. And so I think there is nothing on the horizon for us to move into the areas that you've suggested. And certainly, nothing for us to move into areas of hospital ownership and such at this point. Steady as she goes, I think.

I've got 2 questions. First is the pathology and diagnostics is subject to a lot of regulatory risk and reimbursement risk. Can you give an idea going forward, how you see those risks evolving? Are they going to get worse or is the government going to be nice to us? I guess especially in Australia, I'm not too sure what happens overseas, but here, they sort of -- I think they're looking to privatize a lot of general practitioner practices and things like that.

And my second question is, you operate in a lot of countries around the world. And I'm just wondering if you could give some sort of overview of the currency hedging that you do, what you've got -- you're dealing in euros, British pounds, American dollars and Australian dollars and probably other currencies, I haven't heard of. So just what's your view, maybe your functional currency, is that really you're looking to Australian dollars, the profit or is it American or whatever?

It's not Trump coin. If I could just offer a quick comment about regulatory environments, then I might ask if Colin or Jim want to add and then perhaps, Chris, on the currency issue. In Colin's presentation, he used the term that we are critical infrastructure. And I think the governments, including the government of this country, realizes that the private operators like Sonic in not only in pathology, but in primary care and in private hospitals and so on are too big to let fail.

They've got to be properly reimbursed over time. Governments are sometimes reluctant to do that. But the harsh reality is that we are so important in terms of the health care of the nation and the other nations that we serve. The governments must pay attention to that and support that. It's tight, it's always difficult, reimbursement is always a big issue. It's a big budget issue for governments, but we need to continue to prosecute the cause because governments realize that we are too big to fail for them to let us fail.

So I think we have to just continue to have those very interesting discussions that happened at industry association level and government level and individual level to continue to push the right reimbursement for the value that is created for the health care of the nation. I don't know if Colin or Jim wanted to...

Yes. I could just add a few points. We've faced regulatory issues since the beginning. And it is correct that we are in an industry that is subject to government and health care insurers, sickness funds, et cetera, the whims of them. And we've managed very well through that period. It's interesting -- I think you're referring mainly to Australia with your question. In Australia, we now -- the government is slowly coming to a position whereby pathology testing should be indexed like every other medical specialty.

So we are the sole exception that has not had indexation like any other business or any other health care sectors. So commencing 1 July of this year, 1/3 of all our tests, 1/3 of the schedule is now indexed like every other medical specialty. And we're hoping that in the next few years that will extend to the full schedule. And this is how it evolved in radiology. For example, it started with a 1/3 and then went to the full.

So when that happens, I think that's going to make a big difference. I think they have woken up the government about the Medicare fee schedule because as most of you in this audience know the pathology you get is basically done at bulk bill level, meaning there is no gap. Some of our competitors are not coping very well. After so many years of no indexation, we're doing okay.

And so I think the position is probably slightly positive in the Australian context. There's probably not enough time to go into the individual situations in our other countries, like the U.S. is totally different the way it works. I think it's a little better than it is here. Germany is very similar to Australia, but a different kind of system.

And Switzerland is again different again. But just the bottom line of this is that we have -- we manage through this, mainly by getting efficiencies and growing our market shares. And it's worked well, and I don't expect it to be any different going forward.

Thanks, Colin. Chris...

You want to talk about the natural hedge...

Talk about the ForEx and -- yes.

Yes. Look, running our treasury operation is quite complex. But in terms of hedging, it's actually reasonably straightforward and simple. It's effectively us borrowing in the same currencies that we have assets. So in the case of Switzerland, we borrow Swiss francs and so we've got a liability and asset that are in the same country -- currency. And so there's no complications with hedge accounting. So it's quite a simple process. It's worked well for us for a long time.

Thank you for the question. Other questions from the floor? Mr. Jackson?

Can I just ask, I'm interested in the U.S.A., and it's a material part of the Sonic inventory of businesses. It's also a very volatile political situation over there with the issues relating to huge increases in insurance, access to care. And I just would like a view from anybody about what you feel about the situation in America, if there can be any feelings about it at all or is the answer, who knows? So over to anybody.

I'm going to ask Colin to comment here because he was there most recently. So he gives the most up to date view.

Yes. So thanks for the question. So a substantial part of our business is in the U.S.A. And as far as the political environment goes, we have not really felt any impact at all. It's a different market for us. And so if we're talking about Sonic's operations in the U.S., it's more about how we fit in with 2 big players. I did mention in my presentation that we're the third largest pathology company in the world.

We're certainly the biggest international company in the world, but the third in the world, the 2 biggest are in America, Quest and LabCorp and they are giants. And so Sonic being the #3 player in the U.S., we're in a different competitive dynamic compared to other countries.

So no effect from the political changes that have occurred recently, more about how we compete, how we structure our businesses, what are the inter referrals, how do we structure our, what we call, clinical pathology versus anatomical pathology, these are more relevant issues to us.

In terms of the way pathology is reimbursed, it's a complicated system, much more complicated than Australia. It's largely through insurers, but also there's Medicare and Medicaid, U.S. Medicare and Medicaid. And we work within that system. There's been talk about the so-called PAMA fee cuts, which are potentially on the horizon. But we're quite confident that these are going to be delayed again. They've been delayed 5 years in a row. And the very latest update that I've got is that they have been postponed until the end of January because of the government shutdown. And following that, there are now fairly optimistic signs that this is going to be put off. And again, I think in the U.S., there's a recognition that these cuts are just not going to be appropriate for essential services like we provide.

Does that help, Colin? Thank you. Thanks for the question. Any other questions from the floor? I'll just check with the company secretary anything on the screen. There's one on the screen, so we might just take that from shareholder who's not in the room.

There's a number here, Mark. The first one is from [ David Lymburn ] and [ Fiona MacDonald ], who asks, can you comment on the pipeline of potential acquisitions that may further add to growth in the next 2 to 3 years? And in particular, why have there been no acquisitions in Asia? Mark, I think you probably answered the second one already, but...

And thank you for the question. In terms of the pipeline, the Board has an active schedule of potential acquisitions that it examines at each Board meeting, and we discuss them as appropriate. Sometimes things are many years in the planning, many years in the discussions with potential acquisition. I mean, I think some of the ones that we mentioned today, there have been long conversations over many years to get to the right point.

So those things do -- there's a nuanced negotiation and discussion over time. And then sometimes things pop up somewhat unexpectedly, and we're able to -- in a position where we can move quickly. So I think we're obviously not going to publish the list of the things in the pipeline, but we -- shareholders should rest assured that we're constantly looking.

And indeed, because of the medical leadership culture that we've spoken about so much today, the quality of pathology practices and radiology practices and primary care practices that come to Sonic to say, we like what you're doing, we operate that way, should we have a chat.

So it is a very active and dynamic thing. But some of them -- some things take a long time as executives in this room know who are involved in that in a detailed way. There's sometimes a long dance before we get to a point where we all want to work with each other. Thank you for the question. Another one, Paul, we might.

Yes. Next question is from Stephen Mayne, Colin this one will be for you. Thank you to Colin for his incredible performance building Sonic over the past 32 years. What does Colin believe are the 3 best decisions he made during his time with the company and his biggest regret.

We'll just turn his microphone off now.

Paul, I have to decline this question impossible to answer seriously. To ask me 3 -- did you say best?

Best decisions. Yes, 3 best decisions.

Best decisions. I mean some of the decisions, I couldn't put in 3 best decisions. It probably relates to people. And there would be more than 3, there'd be probably 30 or even more. Biggest regret might be one to think about. That's why this question has stumped me for a change. I normally got plenty to say about questions. This one gets me.

So thank you, Stephen Mayne, for asking an impossible question. I don't have many regrets over the 32 years. Fortunately, I think that's a wonderful position to be in. There's nothing at a personal level, there's nothing dramatic that I can look back on and say, wow, why did we do that? There just isn't anything like that. I can point to some of the good decisions we made, which were to not go ahead with acquisitions, for example, because many people know Sonic for the acquisitions that we do.

And many people will say if they knew that Sonic is really what it is for the acquisitions that we didn't do. And so saying no to an acquisition, whilst it sounds a negative, it could be one of the best decisions. And I'm not going to give examples because nobody knows what they are, and I'm not allowed to disclose them.

But there have been some big nos along the way, which have been very significant because it's interesting, even though you might be upset in some way that we didn't do that deal. It turns out that they were a godsend. So that's all I can say about this question. Very difficult one.

I'll do my best Colin Goldschmidt impersonation and offer an answer to Mr. Mayne's question. I think the 3 best decisions, one was to take up the CEO role of the company 32 years ago. The second decision was to stay so long and build such an extraordinary thing.

And the third was to nurture and develop such an extraordinary group of medical leaders throughout Sonic that make sure the company is in a great position to handle the post Goldschmidt era and continue to grow. In terms of regrets, I'll simply paraphrase Frank Sinatra and say you've had a few, but too few to mention. Other questions?

Yes. A follow-on question from Stephen Mayne. This one is for you, Mark. Now that the CEO succession has been sorted, where are things with Chair succession? Professor Mark Compton has been Chair for a decade. Is he intending to seek another 3-year term when his current term expires at the 2026 AGM? And then as a follow-on question, did you ever get to the bottom of why there was a 13% vote against Kate Spargo's reelection last year as this was never properly explained and no proxy adviser recommended against Kate?

To answer the second part of that question, Stephen, first, no, I don't know why there was a 30% that there was -- we obviously have regular meetings with investors, with proxy advisers and so on in the lead up to AGM once resolutions are out and REM reports and things are there. And no adverse comment was raised, nothing. So I have no idea where that came from.

So I'm sorry, I can't answer that. In terms of Chair succession, look, that's a conversation for the Board that needs to go on. And yes, my current term expires at the end of next year. And so that will be a matter, I think, to discuss within the Board and what the Board's view is at the time. So it will be improper for me to have a view at this point as the incumbent. Other questions?

Last one on screen. This is from [ Adam Burnley ] and probably best addressed by Chris, but it's quite a detailed question. Sonic's German and U.K. sites use gas mainly for heating and have been -- have seen increased natural gas prices due to short supply caused by Russia's invasion of Ukraine. The company said some of the sites have been converted to electricity and further initiatives to reduce gas are being explored.

In Australia, sharp price increases are highly possible as the East Coast gas market is predicted to face a shortfall in supply by 2026 in states where Sonic has numerous facilities, exposing the company to gas price increases. Question, can you provide an update of your progress switching your European sites from gas to electricity? And if you think it is prudent to transition off gas in Australia given the risks just mentioned? Easy one for you, Chris.

25 words on this.

I'm not sure that I'm qualified to answer this one. I'm wondering, do you have a view on that of Evangelos given that you oversee our German operation.

Get a microphone for Evangelos.

This is very detailed indeed. So after the war started, we did indeed transition away from gas purchases as far as possible. But in many infrastructures, the gas supply cannot just be switched and something plugged into the socket. Where we could, we did. However, in the country itself, this gas price explosion has come down a lot after government switched away from Russian gas into LNG imports and these other things.

So the problem has become a little bit less prominent. More importantly, we've also switched all the electricity supplies to green energy where we could. And as the country is 60% plus renewable supplied already, that has had a really, really positive effect on our ESG stats. So we are quite pleased with how it's gone. We don't think it's a big risk at the moment that this will jump back up.

All clear on the screen. Thank you, Paul. Any other questions in the room? Down the back, sir. Thank you.

I think it's also the question how to open up the overseas market. I just saw your presentation says the latest market is Poland. But some markets like Asia, the Asian problem is Japan. You didn't try to export probably different medical system. But how about Singapore or Hong Kong, especially Hong Kong because Sonic Healthcare, the pathology is very good.

Most of the which Mainland Chinese, they try to go to Hong Kong to do a lot of pathology test or maybe some which Asian like Malaysian or Thailand people, they also move to Singapore to do this test because they trust. Why didn't you try to export Singapore? I mean, build up a little pathology clinic in Singapore or Hong Kong or Japan. Why also concentrate on America and Europe? No Asia at all.

Yes. Thanks for the question. This does go back several years, in fact, closer to the beginning of the turn of the century when we went offshore, Chris and I actually came up with a list of criteria that would be suitable to -- or that would make moving into a country suitable. It was a long list, about 15 points, and they weren't all weighted the same.

And so at the moment, because I take your question, and I agree with it entirely. At the moment, we're in Europe, North America and Australia. Yes, we've now inherited a small business in Poland, which is a suitable market for us based on those criteria. We have had a brief look at Hong Kong and Malaysia, both.

And our decision, and this is quite some years ago, probably 10 years ago now. And our decision was that the systems were not quite appropriate for us weighed against this list of criteria. I'm sure that in time, we will be considering Asia, future leaders will be when the markets are right for us. One of the issues with Japan, for example, is the language.

We've got to be able to communicate with people in the country. Not many people speak English in Japan. We don't speak Japanese. As opposed to, say, Germany, where just about everyone speaks English, and it's made it very easy or you go to Switzerland and everyone speaks English. This is a very important issue for us given that we are buying goodwill. So we're not buying a product, we're buying a service and goodwill.

We need to make sure that we can keep the business going after we've bought it. But in time, I'm sure this will happen. It's probably -- I think we've made the decision right now that at the moment, Asia is not quite right for us, and we've got such growth opportunity in Europe and North America that's keeping us very busy. So that's the answer to this point.

Thank you for your question. We also had some questions submitted by the Australian Shareholders' Association, which I might just quickly touch on a couple of them because of travel difficulties and other things, the representative wasn't able to join us today. So I'm just going to paraphrase a couple of the questions. Many of them -- most of them, in fact, have been dealt with either through the remarks I made or the presentation that Colin made and in answering other questions. So -- but let me touch on them.

So one was about acquisitions and about value that comes from acquisitions that the company makes and then led to a question about our guidance for FY '26. And we've reaffirmed our guidance today, as you know, and some detail behind that. There's a question about the issue of new shares as part of the remuneration awards to executives and staff and the questions about buying back shares on market. Why don't we do that? In fact, we do, do that from time to time to satisfy equity awards, but balanced against the impact on gearing and other factors as well.

There was a question which effectively was comparing our radiology business in Sonic with that of Pro Medicus and why Pro Medicus has got a market cap of 3x that of Sonic. And of course, the 2 companies are quite different. Pro Medicus is a radiology software business rather than a radiology provider of care and service. And so that's probably not the best comparison.

But rest assured, the other part of the question is what are we doing about growing radiology? And I know that Julian Adler, who leads Sonic Imaging and his team are doing a lot to grow radiology within the bounds of competition law and other things. There was a question about the succession process for the Chief Executive, which I think I've answered in my remarks earlier.

There was a question out of the remuneration about the issue of options as part of remuneration package about the LTIs. Kate, did you want to answer anything about that? You've seen that question?

Yes. I think the question related to the fact that we awarded the LTI where the hurdles are satisfied in 50% options and 50% performance rights. And some companies will award this LTI in all performance rights, which is quite common. We still believe in the 50-50 split of options and performance rights because where you do get -- it does incentivize growth in the share price, and we think it's a balanced approach to rewarding the executives.

Good. Thank you, Kate. So -- and that concludes those questions. And I thank the ASA for the questions and their interest. And I'm sorry that circumstances beyond their control have prevented them from being here today. Are there any other questions in the room? Otherwise, we might move on with the formal business of the meeting. Anything on the screen, Paul? No. Okay. Thank you very much. Well, thank you very much for those questions. We always appreciate them and welcome the discussion that they generate.

It's now time to move to the formal business of the meeting. The Notice of Meeting has been made available to all shareholders and is available on Sonic's website, and I propose to take the notice as read. As I mentioned before, you may submit or ask a question on any item of business via the online platform at any time during the meeting. Shareholders attending in person will also be given the opportunity to ask questions during the meeting, which we've just had.

The poll on all items, as you know, remains open until I announce it as closed. Proxy results for all items of business being voted on today will be displayed on the screen as we consider each resolution. I also note that in response to a shareholder question and recommendation last year, and I think it was Mr. Mayne, as I recall, we've actually released the proxy results as at the beginning of the meeting to the market this morning. So everyone had an opportunity to see where the proxies landed and of course, before final votes by shareholders in the room or those here by -- in person, by proxy or by attorney.

I note that I will read out each formal resolution to the meeting. The proxies have been reviewed by our share registry, Computershare Investor Services, and we thank Doris Grave and the Computershare team again for being here and providing great service for the company and managing our register. I note that I have cast undirected proxy votes given to me as Chairman in favor of all resolutions.

The first item of business as per the notice of meeting is the receipt and consideration of the financial report, directors' report and the auditor's report of the company and the group for the financial year ended 30 June 2025. If you've not already done so, please submit or prepared to ask any questions you might have regarding the financial statements and reports.

I mentioned earlier our auditor from PricewaterhouseCoopers is here if you have any questions for the auditor. We will first address questions on the accounts from the floor, followed by online questions and then any audio questions. So are there any questions on the accounts? For those online, I'm looking around the room -- there are no questions. Anything online, Paul, there was a question online?

Yes, 2 questions online. The first one is from [ Myles Cody ], who asks, yes, we have a progressive dividend policy, but the payout ratio was 99.4% last year and 101.8% in 2025. Without sustained growth in EPS, is this policy at imminent risk? And how high will you allow the payout ratio to go before you start to cut the dividend? I'd suggest Chris probably take this one.

Yes. Thanks, Paul. Look, those were 2 unusual years. We're keen on keeping the progressive policy, and we had the balance sheet capacity to be able to make that happen. In the previous years, the ratio was very low during the COVID years, where it was in the order of 30%. So look at the growth in revenue and the growth in profit will hopefully drive our ability to continue our progressive policy, but that -- that remains to be seen. So certainly, the Board's view is that we would like to maintain that policy, but it's -- I don't think we can really comment about next year's dividend at this point.

Thanks, Chris. Another question, Paul?

Yes. So the next question is from John [indiscernible]. And I suggest this one is for Colin. Labor's share of revenue has risen over the past years from 45.6% to 48.7%. Is there a plan to stabilize this as labor is a major operational expense and impacts profitability and returns to equity holders?

Yes. So the answer is yes. We -- all our labs around the world and radiology, we spend a huge amount of time on labor cost. It is our biggest cost by a long way, close to 50%. And I think we're all conscious around the Sonic world that highest efficiencies can bring that number down. So it's always been the goal to focus on that.

I've always said in the lab game in pathology, a good manager has to just be vigilant all the time about labor and looking for innovation and new ways to reduce and become more efficient, which we've been very successful at over the years. So just a final point.

In the post-COVID period, there was an increase in that proportion of labor to revenue. And we conducted a global initiative to bring it down and rightsize the company. And I believe we're basically there, but we will continue in that quest to keep it as low as possible. It's obvious that it drives bottom line more than anything else.

Thanks, Colin.

There's a follow-on question from the same shareholder, probably also for Colin. Return on equity has halved in the last couple of years and is now down to approximately 6%. Is there a plan to increase this back to the 12% that Sonic has been able to achieve in the past?

So in the management team, we are talking a lot about driving net profit and earnings per share growth. And I think in FY 2026, as per our guidance, that will occur. As I said, the post-COVID years were difficult for Sonic in terms of cost in general and particularly labor cost as -- and this was not just confined to Sonic.

I think given the amount of service we provided during the pandemic, there was a residual effect, which has now been cleared. So with respect to return on equity or return on invested capital, I think the position is going to be improving dramatically commencing this year.

Thanks, Colin. Anything else on the screen Paul? Thank you. Any other questions in the room on the accounts? If not, I'll move now to the formal resolutions. Resolution 1 is an ordinary resolution, which reads as follows: that Professor Christine Bennett, who retires in accordance with Article 71 of the company's constitution and being eligible, offers herself for reelection, is reelected as a director of the company.

Christine's biography is included in your notice of meeting. Christine is a Non-Executive Independent Director who has a broad range of skills and deep experience in health care leadership, policy and ethics as well as diversity and governance. Professor Bennett is a member of the Risk Management Committee, and I'll now invite Christine to speak to you and answer any questions you might have. Christine?

Thank you, Chair, and good morning, everyone. I'm Christine Bennett, and I'm delighted to offer myself today for reelection. As Mark said, I've served as an Independent Director for the last 3 years and also on the Risk Committee. As detailed in my curriculum data in the Notice of Meeting, I bring to the Board over 40 years of diverse experience in health care, combining clinical, commercial and extensive governance experience.

I have particular interest and expertise in clinical governance and risk management, digital health and ethical use of AI, government policy and health reform and translating research and innovation into health and commercial outcomes.

I've been incredibly impressed by learning about Sonic globally over the last 3 years and its important role in health care here in Australia as well as in Europe, the U.K. and the U.S. Pathology and diagnostic imaging are to me, critical specialties in medicine and provide the foundations for effective high-quality health care.

Sonic's medical leadership philosophy, which you've heard a lot about today, the federated model and the world-class expertise that we have position this company to take advantage of continuing innovation and invention, pioneering new horizons in diagnostic medicine, many of which Jim included in his presentation today.

My sincere congratulations to Colin for his outstanding achievements as MD and for his passion and commitment as a medical leader. He's built a world-class team, and I look forward to working with Jim, Evangelos and the global team while building value for a leading global health care provider while building value for our shareholders. It's an honor to offer myself for reelection today, and I'm proud to be part of one of Australia's leading and most dynamic health care companies. And with your support, I look forward to continuing to serve shareholders as a member of the Board of Sonic.

Thanks, Christine. Are there any questions for Christine? There are none from the floor. Any online? There is one online. Thanks, Paul.

Yes, so shareholder, [ Myles Cody] asks, shareholders in the market are looking at the chronic lack of earnings growth over time despite dozens of acquisitions that flatter the top line. Return on capital is falling over time and below cost of capital. Christine, in your view, what will it take to turn this business around?

Well, look, I would say that one of the things that strikes me is that some of our investments have been strategic investments that will take some time to see that return and that we're positioning for this shift in diagnostic medicine. Obviously, it's a complex geopolitical environment that we're living in as well. And I think actually, I'm really looking forward to the opportunities that Jim said as we see this incredible change into personalized medicine, the use of data, the use of new technologies, genomics.

It's going to, over time. And I think this is why I want to emphasize that we are at that forefront. We've got -- we can harness the global expertise and some of the things that we're already invested in like PathWatch, Thyroseq and others that Jim went through as well. So it's a big question, but that's something, I guess, I'd like to focus on and say is an important response to the year-by-year growth. Some of this will actually take time.

Thanks, Christine. Thanks, Mr. [ Cody ] for the question. No other questions online and nothing in the room. So the proxy results for this resolution are shown on the screen and will be recorded in the minutes of the meeting. I note that there are some 345,647 votes that are in the hands of the Chairman, I'll be voting those in favor of the resolution.

Resolution 2 is an ordinary resolution, which reads as follows: that Dr. Katharine Giles, who retires in accordance with Article 71 of the company's constitution and being eligible, offers herself for reelection and is reelected as a director of the company.

Katharine's biography is included in your Notice of Meeting. Kath is a Nonexecutive Independent Director who brings to the position medical expertise, investment experience and a strong background in medical innovation and health care technology. And I'll now invite Kath to speak and answer any questions you might have.

Thank you, Mark. It's an absolute honor to speak to you today and seek reelection to the Board of Sonic Healthcare. Over the past 3 years, it's been a privilege to contribute to an organization that exemplifies the highest standards of medical leadership, service excellence and corporate integrity. As both a doctor and a company director, I remain deeply aligned to Sonic's purpose, enabling clinicians to make informed decisions so that patients get the right treatment the first time.

This commitment to quality and patient care sits at the heart of Sonic's enduring success and continues to inspire my own professional endeavors in advancing medical innovation. Throughout my tenure, I've witnessed Sonic's remarkable resilience and growth in the face of global uncertainty. The organization has continued to strengthen its reputation for clinical excellence, operational discipline and sustainable performance.

And I'm particularly proud to have contributed to discussions on emerging technologies and innovation, areas that will be increasingly important as we navigate the next decade of the health care evolution. Looking ahead, I believe Sonic's federated model and values-driven culture remain our greatest competitive advantages, as Jim elucidated, the Sonic difference, enabling us to combine global scale with deep local presence and commitment to the communities we serve.

If reelected, I will continue to apply my experience as a clinician, founder and CEO to support the Board in identifying and managing opportunities for innovation and growth while maintaining our unwavering focus on quality, trust and service. Thank you very much for your consideration.

Thank you, Kath. Questions for Dr. Giles. Anything on screen, Paul? Questions in the room? If not, thank you. The proxy results for this resolution are shown on the screen and will be recorded in the minutes of the meeting. And I note in the open proxies, there are some 407,153 in favor of the Chair.

I'll move to the next resolution, Resolution 3 is an ordinary resolution, which reads as follows: that Ms. Nicola Wakefield Evans AM, who was appointed as a Director during the year and who retires in accordance with Article 69 of the company's constitution and being eligible, offers herself for election, is elected as a Director of the company. Nicola's biography is included in your Notice of Meeting.

Nicola is a Nonexecutive Independent Director, who brings a wealth of international business and leadership experience, particularly in mergers and acquisitions and in sustainability. And I'll now invite Nicola to speak and answer any questions you might have. Thanks, Nicola.

Thank you, Chair. Good morning, ladies and gentlemen. It's a privilege to be considered for election to the Sonic Healthcare Board at this Annual General Meeting, and I'm delighted to speak in support of my election. I would like to make the following points about how I can contribute to Sonic.

My main roles at the moment include as a Non-Executive Director of the ASX-listed Viva Energy Board and the Australian Government Clean Energy Finance Corporation. I'm also a Guardian of the Future Fund, Australia's Sovereign Wealth Fund, and I Chair MetLife Insurance in Australia. I have nearly 40 years' experience as a corporate finance lawyer where I'm qualified to practice in Australia, Hong Kong and the United Kingdom. I've also lived and worked in Asia and North America during my career and have worked with many global businesses across a number of sectors.

My global experience in senior leadership roles as a corporate finance lawyer, experienced senior executive and nonexecutive Director allows me to have an appreciation of the complexity and diversity of the global markets that are relevant to Sonic and enables me to contribute effectively to the Board's oversight of Sonic's operations and growth strategy.

I also have deep technical knowledge across many sectors, including critical infrastructure that are relevant to Sonic Healthcare, and I have a deep understanding of the listed company environment, corporate governance frameworks and the regulatory environment. My exposure to many high-performing organizations during my legal career and as a nonexecutive director has enabled me to understand the importance of having a great culture and values, which Colin and Jim have spoken about today, and importantly, organizational resilience.

I believe that I can bring this experience to my work on the Sonic Board. Sonic has a great Board with a broad mix of skills, diversity and experience, and I'm thrilled to be part of each and this very dynamic Australian company. Thank you for considering my election. I can assure you that I will continue to dedicate both the time and commitment to fulfill my duties to Sonic and its shareholders. And I, therefore, offer myself for election to the Board of Sonic and very much appreciate your support.

In closing, I want to thank Dr. Colin Goldschmidt for his outstanding contribution as CEO of this amazing Australian company. And I think that's one reflection I would like to make when you look at Sonic's contribution to the work it does on a global basis. There are very few Australian companies that can claim to do what Sonic has been able to achieve in the 32 years that Colin has been the CEO. And I really want to wish Colin all the best for the future and to thank you.

Thanks, Nicola. Are there any questions for Nicola's on the room? There are none. Any online, Paul? Last chance. Thank you very much. The proxy results for this resolution are shown on the screen, and we will record in the minutes. I note in the opening proxies, some 346,946 were given to the Chairman to deal with them. And as I indicated earlier, we'll be voting for the resolution.

Resolution 4 is an ordinary nonbinding resolution, which reads as follows: that the remuneration report for the financial year ended 30 June 2025 is adopted. As you are aware, remuneration reports are topical and sometimes controversial given the application of the 2 strikes rule, which is described in the Notice of Meeting.

There will always be differences in views on individual elements of the report and the pay structures it describes, but we'd ask that you consider the report as a whole as well as the performance of the company and its management team. I'll ask Kate Spargo as Chair of the REM and Nom Committee to address any questions from shareholders regarding this resolution. Are there any questions from the floor? No. Thank you online. Thank you, Paul.

So we have a question from [ Myles Cody ]. As a long-term shareholder, the obvious challenge with this business is not one of revenue growth. It's clearly the challenge of growing earnings. EPS this year is the same as in 2017. The share price is also back where it was in 2017. I would say that the market is sending Sonic a clear warning that growing revenue is not enough. What will today's management do to turn this business around?

I'm not sure that, that's a question for me on the remuneration report, but is there a remuneration type question there? Or is it about performance?

It is about REM questions and questions about performance. Look, I think -- thanks to Mr. [ Cody ] for his question. I think that in a number of the presentations, my remarks and the comments of others, we've made it very clear that we are also disappointed with share price performance and the need to focus on returns, however, measured and that Dr. Newcombe as the incoming Chief Executive with Mr. Kotsopoulos as the Chief Operating Officer and the others on the global executive team are absolutely laser focused on looking with fresh eyes at the business as to what needs to occur to boost those earnings and returns by whatever metric back to much better levels.

We all want that. We all desire that, and shareholders should feel confident that the Board and the senior management of the company are absolutely focused on doing that. We've indicated our guidance and reaffirm that today for FY '26, which is a happier picture in terms of growth, including, I think, an EPS uplift of about 19% based on the guidance.

So it's -- we agree with the assessment in terms of the level of returns and where they're at now, and we ask for the confidence of shareholders based on what we've said today and at other times that we're absolutely focused on that and the management team is thinking about it every waking moment.

And perhaps, Chairman, if I could add that the structure of the remuneration for Dr. Newcombe has been based around putting significant priority on the outperformance metrics and significant loading on the at-risk remuneration that he might receive. And I do know that Jim is very focused on returns. And so we're optimistic to see how that comes through.

Thanks, Kate. Any other questions on the remuneration report?

We have a question from Stephen Mayne, who thanks us for putting -- publishing the proxy summary prior to the meeting, as Mark mentioned earlier. He notes that there was a modest 9% vote against the remuneration report and 11% against CFO, Chris Wilks LTI grant.

Which proxy adviser recommended against and what was the issue? I might answer that one. So all of the major proxy advisers recommended in favor of our resolutions. The ASA, however, recommended against our remuneration-related resolutions, largely because they don't like the use of options, and I think that was mentioned earlier.

Thanks, Mr. Mayne, for your question. Thanks, Paul, for answering that. Any other questions on the remuneration report? Online, Paul? Then the proxy results for this resolution are shown on the screen and will be recorded in the minutes of the meeting. There were 337,993 proxies given to the Chair, which were voted in favor of the resolution.

Resolution 5 is an ordinary resolution, which reads as follows: that for the purposes of ASX Listing Rules 10, 14 and 7.1 and all other purposes, the grant of long-term incentives up to a maximum value of $2,138,356 to Dr. Jim Newcombe, the incoming Managing Director and Chief Executive Officer, under the Sonic Healthcare Limited Employee Option Plan and the Sonic Healthcare Limited Performance Rights Plan and the subsequent allotment of shares in respect of those incentives on the terms summarized in the explanatory notes be approved.

As described in the Notice of Meeting, the Board wishes to provide performance incentives for Jim and Chris Wilks in terms of the other resolution through the 2028 financial year by issuing options and performance rights. Listing of the rights and options is subject to challenging performance conditions, aligning their interests with ours as shareholders. Are there any questions on this resolution? Paul, anything online?

Yes. So there's a question of sorts from Stephen Mayne. It's a fair bit of commentary on it. So I guess it boils down to Stephen is asking whether Sonic would consider, as he's asked in previous years, advising how many shareholders have voted for and against specific proposals like this LTI grant proposal. He offers to give us a 2-year pass and not attend our AGM if we meet his request.

We miss you, Stephen.

Of course, we encourage our retail shareholders to attend our AGM. So I'm not sure we'll take him up on that.

Stephen, we thank you for your question. I know it's an ongoing conversation. Our view as a Board at this point remains one share, one vote, and that's the approach that we take. But we note your comments and your interest, and we will discuss it again, but that's our current position, 1 share, 1 vote. Thank you. Other questions?

There's perhaps the second part to Stephen's question. He does ask that we put a webcast of the AGM on our website, but we've been doing that for the last couple of years, and we'll do so again.

There is an additional question from [ Myles Cody ] who notes that in the remuneration report for the LTI plan, the ROIC target has been 9%, which has been missed by the executives for 3 years in a row. What does Sonic and the new CEO need to do to turn this around and achieve a ROIC above target and above cost of capital?

Well, I think we've probably answered that in knitting together the various comments that we've made answering other questions and presentations. So I think Mr. [ Cody ], always happy to meet and have a chat, if that's helpful. But I think, again, people should be confident that there's absolute laser focus on improving returns out of the business, which will lift those metrics that have been referred to.

Other questions on this resolution? If not, the proxy results for this resolution are shown on the screen, including a tick under 350,000 were given to the Chairman, which were voted in favor.

Resolution 6 which I think thankfully is the final resolution is an ordinary resolution, which reads as follows: that for the purpose of ASX Listing Rules 10.1471, all other purposes, the grant of long-term incentives up to a maximum value of $1,447,445 to Mr. Chris Wilks, Finance Director and Chief Financial Officer, under the Sonic Healthcare Limited Employee Option Plan and the Sonic Healthcare Limited Performance Rights Plan and the subsequent allotment of shares in respect of those incentives on the terms summarized in the explanatory notes be approved.

We've dealt with the purposes and the reasoning behind that earlier. Are there any questions on this resolution from the room? Anything online, Paul? All silent or done. Then the proxy results for that resolution are shown on the screen. including some 337,992 proxies given to the Chair, and they were voted in favor of the resolution. So that completes the formal business of today's meeting, and we've had a pretty good run with questions.

And in case there's any last gasp questions, I look around the room or online, anything there, Paul? Nothing? Thank you very much. I think everyone's had a good run and really appreciate the questions, some excellent questions and good discussion that they generated. So thank you very much.

For those attending and voting online, I will soon close the online voting system. Please remember to cast your votes by using the voting icon on your device screen or navigation bar. Once you have clicked this, the resolutions will appear on your screen and you can select the voting option. If there is any person physically in attendance who believes they are entitled to vote but has not yet registered to vote, would you please raise your hand and our friends from Computershare will come and help you with that.

The persons entitled to vote on the polls are all shareholders, representatives and attorneys of shareholders and proxy holders who hold green admission cards and who are not excluded from voting in accordance with the voting restriction for key management personnel and their closely related parties as set out in the notice. On the reverse of your green admission card is your voting paper and instructions. And I'll now go through the procedures for filling in the voting papers.

Proxy holders have attached to their admission card a summary of the proxy votes, which details the voting instructions for business items on the appointment documents that have been given in your favor. By completing the voting paper when instructed to vote in a particular manner, you are deemed to have voted in accordance with those instructions. In respect of any open votes, a proxy holder may be entitled to cast, you need to make a mark in a box beside the motion to indicate how you wish to cast your open votes. Proxy holders should refer to the summary of proxy votes form attached to your voting paper for further information.

Shareholders also need to mark a box beside the motion to indicate how you wish your votes cast. Please ensure you print your name where indicated when you have finished filling your voting paper, please lodge it in a ballot box to ensure your votes are counted. If anyone needs any assistance, please raise your hand. Is anyone still filling forms and needs a ballot box. Please wave at the Computershare people.

So everyone had a chance, last chance, everyone sorted Doris Grave, all clear for raise 7. I now will formally appoint Doris Grave as the returning officer to count the votes. And she will report the votes to me in due course, and we'll put the final results up onto the ASX later this afternoon. So I just confirm that I have now closed the poll for those who are voting online. We have now closed the poll as of now.

So on behalf of all of us on the Board, I'd like to thank you for participating in today's AGM. I hope you and your families stay safe and healthy and well in the weeks and months ahead. Enjoy the festive period, if that is your wish and certainly the summer holidays for those in this part of the world. And with that, I declare the meeting closed. Thank you very much indeed.