Investor Briefing July 2013 Presentation Transcript

Title

00 Month 2009

Start of Transcript

John Knowles: Good morning, ladies and gentlemen in the room, in Sydney and to those who are listening to this presentation on the webcast. My name is John Knowles from investor relations. I'll be ducking in and out and hosting this session today. I'd like to call on Chris to give us a brief safety briefing before we start.

Unidentified Female: Good morning, everybody, just a bit of a safety brief. So there's two alarms - or two sounds - [inaudible]. There will an announcement made just to say that we are investigating if there was a fire alarm. The fire exit is right there. The second sound will be a whoop whoop whoop. That would mean that we would have to evacuate somebody out of [unclear] and the fire warden for this area would come in and do a brief announcement and then check you all out. [Unclear] building, which our chief warden will be there to announce what are the next steps if there is a fire. That's everything, are there any questions? No? Thank you.

John Knowles: Just a couple of housekeeping matters. As you'll see in the agenda it's fairly long and it's fairly tight. So we have allocated an hour and a half for questions later in the day, and there will be a call available for people who are not in the room today to ask questions. So if you can please refrain from asking questions so we can have a bit of a free flow with the presentations. There may be an opportunity before lunch. If we get 15 minutes we'll open it up. Questions from the web - we will also try to cover those during the day. There will be lunch for about 45 minutes. Please make sure you're back in the room on the allocated time so we can, again, keep this session moving today.

I'd like to call on Lance to commence proceedings, and hope you'll enjoy the day.

Lance Hockridge: Thank you, John. Can I add my welcome - just trying to get myself organised here - particularly my welcome to my New South Wales colleagues, to whom we share commiserations after last night. It's great to see more than 60 people here joining us in the room. As John and I observe there's many more who are joining on the webcast. At the start though can I also acknowledge that I have a range of my Aurizon colleagues here? In a minute or two I'll introduce the executive team to you, but spread through the room there are a range of other Aurizon people here. John Knowles - John, of course - and the investor relations team, so Chris and Catherine and Nerida and Lauren are all here.

I just, at the start of the day, express my appreciation to them for the work that's gone into both the logistics and the substance of getting a day like this organised. Paul [Cronin] and Mark [Heirsein] are here, but from the businesses - from finance - James Beirne and David Collins are with us today as well. In Paul's area Hans is here, Hans Anneveldt is here, [Max Cruise], Andrew MacDonald is here as well from Mike Franczak's team. I've got to make sure I don't fall into the habit of talking about M1 and M2, but Mike Franczak's team - Chris Gregg, Ed [McKeever] and Patrick O'Donnell are here as well. So altogether you'll have the opportunity not just to hear from those of us who are presenting today, but in those opportunities that John just referred to at the lunch break and in questions at the end of the day with - when we hope that you'll be able to join us for drinks. You'll have the opportunity to talk to what is a broad sweep of the management of the company.

Also though we'll be talking about culture today - not in any great detail, but in various ways we'll be referring to the nature and the extent to which everything that we're talking about is part and parcel of a cultural journey in this Company, as many of you know only too well. An important part of the cultural change in this Company - a critically important part of that from my point of view is diversity, particularly gender diversity. In the last 12 months we've taken a number of initiatives in this area. Being that we'd reached the view that whilst we've had the targets and whilst we've had the programs - and, frankly, we'd made some good progress - we simply weren’t doing enough in this space in our Company.

As I say, there's been a range of initiatives. One though, for example, is an initiative which is aimed quite specifically at helping our high potential female workers who are in corporate or support roles to transition into operational roles. One of the other things though that we've done is to put in place an arrangement where we have high potential people working with the executive team. [Colleen Selby] is here today. Colleen in working with Mike Carter in that role, but I'd also like to introduce you to [Sarah Deerman]. Sarah started this week as the second generation of this program, working with me in the CEO office. Sarah's day job is as manager signalling and overhead construction, so you can get a sense of the nature of the quality of the people that we've got right across our organisation.

Today though then really is a continuation of that process that we've been putting in place of a higher and greater level of engagement and information sharing with the stakeholders in the business. I know that many, if not most of you, for example, have had the opportunity to meet with Mike Carter around, in particular, UT4 and progress around UT4. I know than many, if not most, of you have had the opportunity to meet with Paul Scurrah as Paul has had the chance to give you a greater level of information, detail and flavour about the contract renegotiation process that we went through in the last 12 months and that we'll refer to here in a minute or two.

This then, as I say, is the next step in all of that. It is a process that I can assure we do intend to continue. We do intend to engage on a different and more frequent - on a deeper basis with you around the matters and issues associated with the Company that I know will interest you. So, for example, we'll be talking today - Alex in particular will make some comments around our intermodal business. We propose, at the right time, to give you the opportunity to spend some time with Hans to talk in more detail about the strategy and the operations and the objectives of that part of the business. We certainly hope to be able to facilitate more and a greater level of depth around site visits across our organisation.

Today though is very much, as you know, about fleshing out the road map to 75. It's providing the strategic context in which we're doing that. We will talk to you about some of the overarching process that we've put in place to facilitate the kind of change that we're talking about to be able to track and to measure our progress. We'll be talking with you around some of the enabling capability, some of that cultural journey that I've spoken about, but most particularly relevant at the current time, of course, is the enterprise agreement renegotiation process. Stevo will talk to you a little more about that later on this morning.

More generally, we'll be talking to you, of course, about the work that's being done to deliver around all of that and, in particular, you will hear from the two Mikes. This being the first opportunity that many of you will have had to hear from Mike Franczak and to understand what it is, the nature of what we're doing, how we're going to do it and, of course, what the benefit is of being able to do that. My objective out of all of this is that we do demonstrate that as we're here today. We do have the team to be able to do it, the commitment to be able to achieve the goals that we are talking with you about today, the experience from a wide range of backgrounds to be able to take that which has been learned elsewhere and put in place in a company like Aurizon and, fundamentally, of course, the capability to be able to deliver on those objectives; and, in so doing, to transmit to you the level of confidence that we've got about being able to do the things, as I say, that we're talking with you about today.

If I can them move to introduce or, perhaps, in many cases, re-introduce the team; but particularly in this context to think a little bit about the extent to which this is a team which has global capability and global background. This is a team that has - both from a railroad point of view and from a manufacturing and general industry point of view - a track record of change and change management. Clearly, every situation is, at a certain level, different, but that's why we have such a complementary team of executives, both in terms of the EVPs and in terms of the sorts of people that I referred to before, who bring that background, that capability, to be able to do, as I say, what we're talking with you about today.

We do today have depth of railroad experience, both locally and overseas. We have in Keith, for example, somebody who's worked both in the UK and in Australia in consulting; spent eight years as CFO of Virgin Blue. So we welcome Keith's abilities in this area. Mike Carter, of course, has had an all of career experience in railroading, but not just with Aurizon and its predecessors, but also overseas, in the UK. Mike Franczak, as you know, is the newest member of the team. We'll talk a little more about his own background, so I won't steal his thunder; but a lifetime of experience in doing the sort of thing that we are talking with you about and promising to deliver today.

Similarly, Alex has had a broad range of experience, direct railroad experience in North America, as we look to what world class is about, having lived and breathed and been part of crafting what the world today believes is the best in the business; but not just in railroads, as Alex himself will talk about, in manufacturing, for example. Ken has a broad background across manufacturing, change management in an Australian environment, and certainly in marketing and business development, for example. Greg Pringle has a broad background as a South African in things that we talk about and things that we don't talk about, in fact, with respect to his background in South Africa; again, a track record of disciplined change and change management.

John Stephens, similarly, having worked as an HR practitioner for most of his career with BHP, not just here in Australia, but in Indonesia and North America. Again, somebody who knows what world class looks like and feels like and has been actively involved, in a dirt under the fingernails sense, in making change happen. Similarly, Greg Robinson - Greg's worked with me, probably, for more years than we'd prefer to acknowledge at this stage, but around, in particular, the raft of changes that we made, for example, at the Port Kembla steelworks, the raft of changes that we've made in steel in North America. You'll hear from Greg today as he talks about bringing that kind of background, that process, that discipline, the ability to be able to measure and track and, at the end of the day, to deliver.

Paul, of course, today is well known to you, with a diverse range of background, particularly in marketing and market related activity, and particularly across a wide range of experience in Australia and especially with a combination of Aurizon and Queensland Rail, where he was chief executive before rejoining us at the beginning of last year.

So altogether a team, as I said a few moments ago, that in my view without doubt has a global understanding of what world class really is, has a track record of capability and experience in being able to deliver. You will have the chance during today, and going back to what I was saying before about what we intend to do going forward, to interact with all of these individuals and their teams and to be able to see and feel and experience that thing for yourself.

As we think about what it is that we're seeking to achieve here without spending time going through the details of the words on this paper, in essence we are about being a world class customer focused organisation.

Since the IPO we have consistently set as the hallmark object of the Corporation to achieve an operating ratio of 75 by 2015. That in and of itself of course we've always said is not end game. That is a goal post on the way to achieving that world class outcome that I was referring to a moment ago.

What we will do today is broadly and at some level of detail indeed describe to you, flesh out for you what that roadmap is over the next couple of years to get ourselves to that 75 and beyond. We will talk to the specifics that you would have seen already from the presentation that you have in front of you about achieving beyond the market and the growth stuff that we've already spoken to you about, productivity and efficiency changes and improvements which will add to more than $230 million of benefit over the next couple of years.

This comes back to where we set out from. Over the last couple of years we have put in place, as you know, a range of initiatives, a range of initiatives across the five broad areas that you see on the left hand side of this slide. These are the things that I've been consistently sharing with you and describing since IPO. The things that are on this chart are merely meant to be short snapshots for examples of all of that. But it is a reminder that we have done much and many of the team in their presentations will refer in more detail to the sorts of things that we have done and that we have achieved over the last couple of years.