Seven Group Holdings Limited | ABN 46 142 003 469
Level 30, 175 Liverpool Street, Sydney NSW 2000 | Postal Address: PO Box 745, Darlinghurst NSW 1300
Telephone +61 2 8777 7574
14 August 2024
Company Announcements Office
Australian Securities Exchange Limited
20 Bridge Street
SYDNEY NSW 2000
2024 ANNUAL REPORT
Seven Group Holdings Limited (ASX: SVW) attaches the Annual Report for the year ended 30 June 2024.
This release has been authorised to be given to ASX by the Board of Seven Group Holdings Limited.
For investor information, please contact:
Daniel Levy - Head of IR and Communications
+61 2 8777 7106 |
investorrelations@sevengroup.com.au
For media enquiries, please contact:
Lauren Thompson | +61 438 954 729
Hayley Ashburner | +61 497 554 588
Seven Group Holdings Limited is an Australian diversified operating group, with market leading businesses
across industrial services, energy and media. In industrial services, SGH owns WesTrac, Boral and Coates.
WesTrac is the sole authorised Caterpillar dealer in Western Australia, New South Wales and the Australian Capital
Territory. Boral is Australia's largest and leading integrated construction materials business. Coates is Australia's
largest industrial and general equipment hire business. In Energy, SGH has a 30.0% shareholding in Beach Energy,
as well as interests in other energy assets in Australia and the United States. In Media, SGH has a 40.2%
shareholding in Seven West Media, one of Australia's largest multiple platform media companies, including the
Seven Network, 7plus and The West Australian.
Disciplined Execution
Annual Report
2024
Contents
Ryan Stokes AO
Managing Director & CEO
Our Businesses
2
Performance Highlights
4
Chairman’s Letter
6
MD & CEO’s Letter
8
Our Strategy
10
Our Businesses
10
WesTrac
12
Boral
14
Coates
16
Energy
18
Media
Sustainability Report
20
Sustainability
33
People
38
Data Tables
Performance Review
46
Operating and
Financial Review
52
Risk Factors
Directors’ Report
58
Board of Directors
60
Executive Management
62
Corporate Governance
Overview
68
Directors’ Report
71
Remuneration Report
95
Auditor’s Independence
Declaration
Financial Report
97
Primary Statements
101 Notes to the Financial
Statements
159 Consolidated Entity
Disclosure Statement
162 Directors’ Declaration
163 Independent Auditor’s
Report
Other Information
168 Shareholder Information
169 Investor Information
169 Company Information
BC Corporate Directory
We delivered a strong result in FY24,
achieved through disciplined execution
and delivery from our Industrial Services
businesses. Our 20% EBIT growth
and 10-year earnings CAGR of 18%
underscores both the strength of our
business and the leadership of our people.”
1
Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
18%
10-year EBIT CAGR
$1,419.2m
EBIT ($m)
20%
$10.6bn
Revenue ($bn)
10%
$2.31
Underlying EPS ($)
28%
Performance
highlights
Strong customer
activity in FY24
supported SGH to
deliver 10% revenue growth
to $10.6 billion, and 20% EBIT
growth to $1.4 billion.
SGH Annual Report 2024
2
The FY24 results highlight SGH’s
ability to consistently deliver growth
in varied market conditions, reflecting
the core-plus nature of our business.
The efficiency gains achieved through
operating and cost disciplines, combined
with strategic investments in our operations,
systems and technology, were instrumental to
delivering the strong result.”
Ryan Stokes AO –
Managing Director & CEO
Five year results $m
2024
2023
2022
2021
2020
Revenue
10,605.2
9,626.5
8,965.7
4,838.7
4,562.6
Underlying results(a)
EBITDA
1,929.9
1,688.5
1,465.0
1,052.4
1,001.2
EBIT
1,419.2
1,186.5
987.1
792.1
737.9
Profit before tax
1,125.7
903.1
733.5
634.2
587.8
Underlying EPS ($)
2.31
1.80
1.52
1.46
1.39
Statutory results
Profit before tax
765.8
855.3
773.5
762.7
231.1
Profit after tax
522.1
646.5
607.4
634.6
117.5
Reported EPS ($)
1.26
1.64
1.54
1.84
0.34
Operating cash flow
per share (b) ($)
2.19
3.29
1.41
1.81
1.59
Free cash flow per share (c) ($)
0.47
1.73
(0.28)
1.31
0.83
Full year fully franked ordinary
dividend paid per share ($)
0.46
0.46
0.46
0.44
0.42
(a) Underlying results comprise statutory results adjusted for significant items and are
separately disclosed in Note 3: Significant items of the Financial Report to assist
users in understanding the financial performance of SGH. Underlying results are
reconciled to statutory performance on page 46. They are a non-IFRS measure
and have not been audited or reviewed.
(b) Operating cash flow per share is calculated by dividing the operating
cash flow of SGH by the weighted average number of ordinary shares
outstanding during the year.
(c) Free cash flow per share is operating cash flow less net capital
expenditure, divided by the weighted average number of ordinary
shares outstanding during the year.
3
Directors’ Report
Financial Report
Sustainability Report
Performance Review
Our Businesses
Terry Davis
Chairman
Dear Shareholders,
On behalf of the Board, I am pleased to present to you the
FY24 Annual Report for Seven Group Holdings (SGH). SGH
has delivered an exceptional year both strategically, with the
acquisition of 100% of Boral, and financially, delivering 20%
earnings growth.
The successful acquisition of Boral underscores a decade of
evolution for SGH, transitioning from a small-cap investment
holding company to one of the largest diversified operating
companies on the ASX. We now have a focused portfolio
featuring some of the leading industrial businesses in Australia.
Through that journey, SGH has increased its market capitalisation
from $2bn to over $15bn and joined the S&P ASX100 and
MSCI Global Indices, driven by the disciplined execution of our
operating model and capital allocation framework. We deploy
both with absolute discipline, and as a Board, we see this as an
effective approach to support growth, drive results, and ensure
our businesses are delivering on their potential.
Operating Model and Capital Allocation
When looking at our operating model and capital allocation
framework, there are five core principles that guide our
decisions. First, our investments must generate long-term
value for stakeholders. To ensure this, all potential investments
undergo rigorous financial testing to make sure they meet our
long-term investment requirements.
Second, we are committed to ensuring our businesses perform
better under SGH ownership than they would independently.
Our operating model ensures we focus on our businesses’
performance as measured against best-in-class practice and
our peers, and we expect to outperform.
Third, any investment SGH makes should align with our
strengths and support our market leadership or competitive
advantage. The company has a strong track record with
industrial services businesses and the Australian market,
making these areas our primary focus for growth.
Fourth, all investments must align with our core demand
thematics of mining production, infrastructure and construction,
and gas to support the energy transition. Our targeted
investment into these sectors has been a key factor in
supporting our sustained performance against varying market
conditions, and all three sectors maintain a positive outlook.
Finally, all our investments must align with SGH’s capital
management strategy, which is centred on optimising capital
structure, beneficial use of leverage, preserving agility, and
ensuring our ability to pay a stable and growing dividend
over time.
The combination of these allocation principles and our operating
model has underpinned a decade of outperformance, and
delivery of 25%, 61% and 9% FY24 EBIT growth at WesTrac,
Boral, and Coates respectively.
Core Sector Outlooks
In WesTrac’s largest exposure of mining production, Australian
commodity export volumes grew 4% in FY24 and are expected
to continue growing into FY25 and beyond. The growth outlook
for key bulk commodity exposures supports our positive outlook
for services and fleet replacement activity. There is also over
$77bn of committed resources projects in WA and NSW that
underpin our positive capital sales outlook.
In infrastructure and construction, the primary exposure for
Boral and Coates, the $1.7t seven-year project pipeline is
robust and replenishing. While there have been air pockets in
customer activity in FY24 due to project commencement delays
and labour availability, these factors have deferred opportunities
rather than reduced them.
Chairman’s Letter
On behalf of the Board,
I am pleased to present
to you the FY24 Annual
Report for Seven Group
Holdings (SGH). SGH has
delivered an exceptional year
both strategically, with the
acquisition of 100% of Boral,
and financially, delivering
20% earnings growth.
SGH Annual Report 2024
4
Enfield, NSW
Looking forward, the sector is strongly supported by macro
thematics, such as the 240,000 new homes required annually
to achieve government housing supply targets, and the
associated transport and energy infrastructure.
Our exposure to transitional energy through Beach Energy (30%)
and SGH Energy is predicated on the idea that gas is the ideal
fuel to support, or “firm-up,” the increasing grid penetration of
variable renewable energy. These businesses are positioned to
sell gas into tightening East and West coast gas and global LNG
markets, where supply shortfalls are expected as early as next year.
SGH has strategically positioned itself in these growth sectors
through diligent capital allocation, and we are investing in our
people, technology, and capacity to ensure we effectively
capture the opportunity in these sectors.
Sustained Outperformance
While our capital allocation model is simple, it has proven
powerful in driving sustained outperformance. Over the past
decade, SGH has delivered a compound annual earnings
growth rate of 18%.
This sustained growth has supported the payment of stable
and increasing dividends for over 30 years, which we have
lifted by 30% in 2H FY24 to 30 cents per share fully franked.
The share price appreciation driven by earnings growth, along
with increasing dividends, has persistently delivered superior
returns for our shareholders. As a company, we have returned
more than 550% total shareholder returns (TSR) over the
past decade, compared to less than 120% for the ASX100.
Importantly, the delivery has been consistent, with SGH
achieving top decile TSR across 1, 3, 5, and 10-year horizons.
Despite SGH’s strong growth, we are confident there is further
value to unlock. As of July 2024, SGH was trading 2 times lower
than the ASX100 and 4 times lower than the ASX Industrial index
on a price to forward earnings ratio. This relative undervaluation is
inconsistent with our demonstrated core-plus growth and returns
profiles, which should logically command a valuation premium.
Sustainability
With the finalisation of the Boral acquisition on July 4th,
we have now included data and initiatives on Boral’s
decarbonisation journey in our reporting. We are assessing
and realigning our FY30 targets based on this inclusion, and
the anticipated changes in federal climate and sustainability
reporting requirements. We will look to update the market on
this in early FY25.
WesTrac and Coates made good progress on their respective
decarbonisation roadmaps in FY24, with both businesses
continuing their solar rollout programs. While at Boral, they have
completed the Berrima Chlorine bypass to increase the facility’s
alternative fuels usage, and their lower carbon concrete now
represents 33% of total volumes sold. I encourage you to read
more on these initiatives in the Sustainability Report on
pages 20-45 of this document.
Brand Evolution
There has been a shift in the way SGH presents our branding,
with the introduction of a new company brand-mark in
May 2024. The brand-mark depicts a seven-pointed star,
reflecting the company’s heritage of Seven, and the Australian
Commonwealth star or federation star.
The iconography has been designed to convey the strength and
history of SGH, and our focus on the Australian market. We have
also begun moving away from references to “Holdings,” with the
Boral transaction cementing our position as a leading industrial
operator; having fundamentally evolved from our early history as
an investment vehicle.
Looking Ahead
As we move forward, SGH remains committed to driving
sustainable growth and creating long-term value for our
shareholders. We have multiple attractive growth opportunities
in our current portfolio, including adjacencies at Boral in
recycling, and co-development and leasing of surplus property.
Our disciplined operating approach and capital allocation
have positioned us well to capitalise on opportunities in FY25
and beyond. We will continue to invest in our core strengths,
while maintaining financial agility to adapt to
changing market conditions.
The successes we have delivered are a testament to the hard
work and dedication of our team, and I extend my gratitude
to my fellow Board members, the SGH management team,
and all our dedicated employees for their efforts this year.
We are excited about the future and look forward to another
year of strong performance. Together, we will build on our
achievements and continue to deliver exceptional value for
all our stakeholders.
Finally, I want to thank you, our shareholders, including those
who have joined from Boral, for your ongoing trust in the
Board and management team and your continued support
of our business.
Thank you.
5
Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
Our Businesses
Ryan Stokes AO
Managing Director & CEO
Managing Director & CEO’s Letter
We are very pleased with
the outcomes delivered
in FY24, with strong profit
growth achieved through
disciplined execution and
delivery from our Industrial
Services business.
Dear SGH Shareholders,
We are very pleased with the outcomes delivered in FY24,
with strong profit growth achieved through disciplined execution
and delivery from our Industrial Services business. Our 20%
EBIT growth for the year and 10-year compound annual growth
rate (CAGR) of 18% highlights our consistently strong earnings
growth, and underscores both the strength of our business and
the leadership of our people.
Boral Acquisition
Increasing our ownership of Boral to 100% was a key strategic
outcome for SGH. Since taking control in 2021, SGH has driven
and supported Boral’s performance journey. With 100%
ownership, we now have complete access to Boral’s strong cash
flow generation, providing SGH shareholders the full benefits
associated with the ongoing successful performance journey.
The acquisition of Boral is strongly aligned with our capital
allocation principles. Boral has the core attributes necessary to
sustain a competitive advantage, including market leadership
and privileged, hard-to-replicate assets.
The acquisition is a significant step in our evolution towards
becoming Australia’s leading Industrial Services business, with
WesTrac, Boral and Coates among the highest-quality industrial
businesses in the country.
I am confident that Boral will continue to thrive as a wholly
owned subsidiary of SGH. We look forward to continuing our
support of their management team as they accelerate their
performance journey and deliver growth.
Operating Model
Boral faces into one of our core growth thematics of
infrastructure and construction, which along with mining
production and gas to support the energy transition, have
underpinned a decade of outperformance for SGH.
These three core investment themes are where we deploy
incremental capital, with a focus on investing exclusively within
Australia, where we have confidence in the economic outlook
and a proven competitive advantage. Our disciplined execution
of this investment strategy has driven SGH’s outstanding growth
and consistent top-decile TSR performance for over a decade.
Unlike organisations with a singular operating business, our
structure enables us to invest in adjacent opportunities, as
demonstrated by our divestment of WesTrac China to fund the
investment in Coates in FY18, and our initial investment in Boral
in FY20.
Our Industrial Services businesses generate strong and stable
cash flows, supporting SGH to take on leverage for growth,
and when required, the flexibility to use operating cash flow to
rapidly reduce debt. We continue to be strong proponents of
considered use of debt to support growth and create value for
shareholders.
We effectively demonstrated our ability to delever following the
takeover of Boral in FY22. This transaction resulted in year-end
post-transaction leverage (net debt to EBITDA) of 2.9x, which we
were able to reduce to below 1.9x by HY24.
Our significant earnings growth has propelled SGH into the Top 50
of the ASX by market capitalisation, providing the company with
higher market liquidity, more efficient access to capital, and
stronger investor support than ever before.
Following the completion of the compulsory acquisition of Boral
in July, our share register has further diversified, with the total
number of shareholders increasing from 15,600 to over 40,000.
We are pleased to welcome so many new shareholders to
SGH, and remain focused on driving continued TSR growth,
supported by our core values of Respect, Owner’s Mindset,
Courage, and Agility.
SGH Annual Report 2024
6
People and Safety
We continue to focus on safety throughout our operations.
It is pleasing to have delivered strong safety improvements
year-on-year, with a 26% improvement in both Lost Time Injury
Frequency Rate (LTIFR) and Total Recordable Injury Frequency
Rate (TRIFR) in FY24.
Our relentless progress on improving safety outcomes is
driven by a focus on visible leadership, collective accountability
culture, and enhanced WHS compliance and risk management.
In FY25 we will continue our pursuit of zero-harm, with a focus
on enhanced safety inductions and onboarding for new starters
and contractors, and technology-driven safety improvements.
The company also made significant progress towards our
diversity goals over the year, with overall female participation
increasing from 17% to 18%, toward our target of 25%,
and no distinguishable gender pay gap for like-for-like roles.
SGH Results
SGH delivered revenue of $10.6bn in FY24, an increase of
10%. This result was driven by strong customer demand and
underpinned by 19% revenue growth at WesTrac. The disciplined
execution of our operating model and ongoing cost focus saw our
EBIT margin lift 106 basis points to 13.4%, ultimately delivering a
20% EBIT expansion to $1.4bn. The strength of this result and our
confidence in our outlook enabled us to raise the final dividend to
30 cents per share, a 30% increase compared to last year.
WesTrac
As one of the largest Caterpillar dealers globally, WesTrac is
committed to supporting our customers. Our role is to sell,
service, and provide support for Caterpillar products across
the resources, construction, and energy power systems
segments in WA, NSW and ACT.
WesTrac delivered outstanding results in FY24, with revenue
of $5.8bn, up 19%. This performance resulted from strong
customer demand in both the resources and construction
sectors, particularly for our product support services.
Pleasingly, WesTrac also delivered EBIT margin expansion,
leading to 25% EBIT growth to $623m. Machine sales revenue of
$1.9bn was up 12%, primarily driven by expansion activities and
mid-cycle fleet replacement. Services revenue of $3.9bn was up
23% on parts volume growth and a favourable shift in product
mix towards larger components, driven by growing customer
activity, an ageing mining fleet, and increasing labour availability.
The significant growth in customer demand and activity
necessitated a $537m investment in working capital,
predominantly in inventory. With over 85% of the increased
resource inventory pre-assigned to customers, this investment
gives us confidence in WesTrac’s outlook for FY25.
WesTrac also continues to work with Caterpillar and global
mining leaders to develop and deploy battery electric solutions.
We are excited to be bringing the first Caterpillar battery electric
mining truck into our territories this year, where it will participate
in in-field trials with BHP and Rio Tinto in the Pilbara.
Boral
Boral is Australia’s leading vertically integrated construction
materials company, supplying products to support infrastructure
and construction investment. In addition to its core building
products, Boral is also growing its Construction and Demolition
recycling capabilities, while also exploring development
opportunities for its extensive property portfolio to generate
long-term, meaningful returns.
Boral’s FY24 revenue was up 3% to $3.6bn, with resilient
sales volumes impacted by project commencement delays
and a moderation in residential activity. The EBIT result of
$372m was up 61%, with significant EBIT margin expansion
of 376bps to 10.5%.
The continued progress on Boral’s performance journey has
been crucial to delivering this strong result. The core drivers
of the margin expansion were improved cost control and
pricing discipline. We recognise there is significant work ahead
to ensure Boral continues to improve towards delivering our
ambition of mid-teen EBIT margins through the cycle.
Coates
Coates is Australia’s leading industrial and general equipment
hire business, supporting the infrastructure and construction
sector with the nation’s largest hire-fleet. Coates’ extensive
network, quality equipment, and skilled people ensure that
our customers can rely on us to provide equipment solutions
for every stage of their projects.
Coates’ revenue of $1.1bn was marginally up year-on-year,
as the infrastructure and construction sectors continue
to operate at close to capacity. Our focus on operational
improvement delivered positive operating leverage outcomes,
with EBIT margins lifting 234bps to 28.6%, on par with global
leading rental services companies. This margin improvement
supported an EBIT growth of 9% to $327m.
Coates continues to grow its hire fleet to meet customer demand
through traditional means and programmatic M&A, funded in
part by capital redeployment from the sale of Coates Indonesia.
The fleet investment positions Coates to capitalise on the 7-year
$1.7t infrastructure and construction pipeline, with initiatives
underway to increase its market share of this opportunity.
Energy
Beach, where we own 30%, has compelling assets across
domestic gas and LNG export. Beach recently appointed an
operational leader, Brett Woods, with a focus on resetting the
company’s performance. Beach’s new strategy is centred on
operational performance, cost efficiency, and the quality of its
asset portfolio. SGH has assumed the Chair of the company
during this transitional period to support strategy execution
and ensure Beach delivers on the opportunities ahead.
The year ahead
The FY24 results highlight SGH’s ability to consistently deliver
growth in varied market conditions, reflecting the core-plus
nature of our business. The efficiency gains achieved through
operating and cost disciplines, combined with strategic
investments in our operations, systems and technology,
were instrumental to delivering the strong result. This provides
a solid platform to support customer activity and growth into
FY25 and beyond.
Our values, performance culture and operating model are
predicated on our people working effectively to support
our customers. I would like to recognise and thank the
14,000 people across SGH for their unwavering commitment
to this goal, and dedication to our businesses.
I would also like to thank the Board for their continued support
and direction of the SGH leadership team.
Finally, thank you to you, our shareholders, for your continued
support and commitment to SGH.
7
Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
Our Businesses
Strategic Growth Thematics
1
2
3
Our purpose
Strategic objective
Our Values
Our Pillars
Recognising
and serving
exceptional
businesses
Maximise return to
stakeholders through long
term sustainable value
creation
Respect
Exceptional
people
Operational
excellence
Financial
returns
Assets
Owner’s
mindset
Courage
Agility
Our Strategy and Value Creation
SGH is one of Australia’s leading diversified operating groups,
with market-leading businesses across Industrial Services,
Energy and Media. Our operating approach combines
disciplined execution and a strict focus on capital allocation
to support our exceptional businesses and people.
SGH’s purpose is to recognise and serve exceptional businesses, while meeting the strategic objective of
maximising returns to stakeholders through long-term sustainable value creation. We support this objective
with our four values: Respect, Owner’s Mindset, Courage, and Agility.
SGH’s objective is to deliver long-term sustainable returns to Stakeholders by exercising financial discipline
and decisive management of a diversified portfolio of operating businesses.
Mining production
through WesTrac
Infrastructure and
construction through
Boral and Coates
Transitional Energy
through Beach and
SGH Energy
SGH Annual Report 2024
8
Industrial Services
$623.4m
24.7%
100% Owned
$326.7m
8.8%
100% Owned
$371.6m
60.5%
95.1% Owned
$1,321.7m
28.1%
Media
40.2% Owned
$25.4m
-58.5%
Energy
100% Owned
30.0% Owned
$98.6m
-13.4%
EBIT
EBIT
EBIT
SGH’s operating model has four core characteristics:
1 Group and BU Delineation: Each business has a
dedicated Board structure, ensuring accountability
for delivering results. This promotes a clear
distinction between SGH Corporate and Business
Units, reinforcing absolute P&L ownership.
2 Front-line Focused: Decision-making is pushed
towards the front lines wherever possible, fostering
a lean, empowered workforce with accountability
at all levels.
3 Growth and Execution: Emphasis is placed on
execution and growth, integrating the Owner’s
Mindset into operating cadence, and prioritising
outcomes over excessive processes.
4 Inherent Scalability: Lean operating structures
and the focus on accountability make SGH
inherently scalable.
9
Directors’ Report
Financial Report
Sustainability Report
Performance Review
Our Businesses
KCGM Super Pit, Kalgoorlie WA
EBIT ($m)
$623.4m
25%
Revenue ($m)
$5,826m
19%
WesTrac is one of the largest and
best-performing Caterpillar® dealerships
globally, working closely with customers
to supply and support a wide range
of market-leading machinery.
10
SGH Annual Report 2024
Technology and Capacity
Over the year, WesTrac prioritised investments in facilities
and capacity within the existing footprint to enhance efficiency.
The automation of the Tomago Parts Distribution Centre and
expansion of in-house machining and component rebuild
capacity in both states resulted in record daily processing
volumes and component outputs.
WesTrac has also focused on investing in and leveraging
sophisticated software tools, analytics, and artificial intelligence
through systems like Palantir and Integrated Dealer Solutions.
These initiatives have improved workshop velocity, reduced
new machine build timelines, and boosted the productivity
of skilled technicians, all contributing to the record operating
performance for the year.
Recognising emerging electrification and battery opportunities,
WesTrac has established a dedicated Technology Centre
at the Perth Airport Precinct in WA. This centre will focus
on electrification projects involving power generation, lithium
battery storage, and support for pilot battery trucks.
WesTrac’s technology support remains a key competitive
advantage. The industry-leading technology training centres
in both states support the implementation of products like
off-highway truck automation, semi-autonomous drilling,
and autonomous dozing.
Safety
WesTrac’s safety focus in FY24 emphasised “Line of Fire”
hazard prevention, including reducing the severity of hand and
finger injuries. The company also conducted a comprehensive
review of its Critical Risk Controls and prioritised psychological
safety and psychosocial risk management for team members.
Other initiatives have focused on reducing fatigue-related risks,
with a pilot of in-vehicle fatigue monitoring technology in NSW.
These initiatives, along with the safety-first culture, delivered
a reduction in both Lost Time and Total Recordable Injury
Frequency Rates in FY24, and WesTrac will look to build on
this progress in FY25.
Market and Outlook
WesTrac continued to strengthen its position in the Resources
sector in FY24, delivering machines to and securing future
orders from global mining leaders. The company also introduced
the first Caterpillar 794AC “Ultra-Class” mining trucks into NSW,
delivering on expectations outlined in last year’s results.
These strong customer relationships position WesTrac to
capitalise on an expected increase in customer activity,
associated with the growing production outlook for key
commodity exposures. The company’s strong market share
and the aging mining equipment population are also expected
to support demand growth from resources customers.
The growth in customer demand observed in FY24 and
expected in FY25 required WesTrac to invest $537 million in
inventory over the year, to ensure the business could continue
to support customers and grow. Over 85 per cent of this
elevated mining machine inventory is pre-sold, reflecting the
historically strong resources capital sales pipeline.
In the construction sector, activity and demand remain strong
as WesTrac supports its customers to deliver the $1.7 trillion
infrastructure and construction pipeline. The company is also
benefiting from product releases from Caterpillar that provide
productivity and technology benefits to customers, making
WesTrac the preferred supplier of construction machines in
its territories.
WesTrac’s market-leading people, technology, and facilities,
coupled with its investment into working capital in FY24, position
the company to support growing customer demand in resources
and construction in FY25 and beyond. WesTrac will continue
disciplined investment and operational execution across these
themes to ensure continued delivery of results for all stakeholders.
WesTrac is the sole authorised Caterpillar dealer in
Western Australia, New South Wales, and the ACT.
As one of the largest and best-performing Caterpillar
dealerships globally, WesTrac works closely with customers
to supply and support a wide range of market-leading
mining machinery and construction equipment.
WesTrac’s comprehensive whole-of-life management solutions
ensure that owning and operating Caterpillar equipment
provides customers the best equipment, matched with the best
service. By providing market-leading new and used equipment,
along with extensive parts and service support, WesTrac’s
customers can rely on their Caterpillar equipment to achieve
their operational requirements.
WesTrac WA was recognised by Caterpillar in FY24 with a
Gold award as the number one global dealer for construction
industry services growth. This achievement is a testament
to the company’s dedication to innovation, superior service
delivery, and unwavering focus on meeting and exceeding
customer expectations.
FY24 Performance
WesTrac delivered another year strong operating and
financial results in FY24, with 19 per cent growth in sales
driven by customer activity in resources and construction,
and increased demand for parts and services.
Capital sales increased by 12 per cent, supported by robust
customer demand, predominantly associated with expansion
activities and fleet replacement.
Services revenue increased by 23 per cent, driven by parts
volume growth, a shift in product mix toward larger components,
and increasing R&M intensity associated with the age profile
of the extensive installed base. Together with Caterpillar and
WesTrac’s focus on growing parts and services across the
customer base continues to strengthen the underlying business,
as demonstrated by the 10-year compound annual average
growth rate in services revenue of 10 per cent.
WesTrac continues to focus on cost control while investing
in people, technology, and capacity to drive efficiencies.
This focus and investment underpinned margin expansion
over the year, ultimately delivering 25 per cent earnings growth.
Investment in People, Technology, and Capacity to
Drive Performance
People
The technical and leadership skills of WesTrac’s ~5,000
dedicated people are key differentiators in the company’s ability
to support its customers. Over the year, WesTrac continued to
invest in its industry-leading training programs to accommodate
higher demand and cater to emerging industry requirements,
including automation and electrification.
In the WesTrac Institutes in WA and NSW, the company is training
over 400 apprentices, preparing them for industry entry. WesTrac
also delivered over 250,000 hours of technical and leadership
training, ensuring the team is ready for the latest Caterpillar
products and capable of supporting customers in any location.
The business is well-prepared for the arrival of the Battery
793XE Pilot Trucks in Western Australia, expected later this
calendar year. The first of these machines will be deployed
into service at BHP’s Jimblebar Mine in the Pilbara. WesTrac
technicians have trained in the USA, assembling these machines
and collaborating with Caterpillar on maintenance and operation
processes for these industry-leading trucks.
In response to ongoing skilled labour challenges and strong
competition for talent, the business successfully implemented
targeted attraction and retention strategies, including
international recruitment and skills development programs.
The company has also expanded diversity and female
participation programs, particularly for component technicians,
workshop assistants, and warehouse skills development.
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$3,555m
3%
Revenue ($m)
Boral Concrete and Asphalt Facility, Enfield NSW
61%
EBIT ($m)
$371.6m
Boral has been integral in building Australia,
leveraging its extensive network of quarries,
cement infrastructure, bitumen, construction
materials recycling, asphalt and concrete
batching operations.
SGH Annual Report 2024
12
Markets
Conditions across Boral’s markets were generally positive
in FY24. Strong customer activity was impacted by project
commencement delays, and a moderation in residential activity,
ahead of an anticipated acceleration in the sector. Demand
from infrastructure end-markets remains robust, with the sector
operating at close to capacity. Customer activity in the sector is
expected to remain strong through this decade, supported by
increasing social and energy infrastructure investment.
The FY24 moderation in residential activity is expected to be
temporary, with macro-thematics supportive of the outlook
for the sector, including the 240,000 new dwellings required
annually to meet government housing policy ambitions.
Boral has improved its market interaction to more effectively
capture these sector opportunities, with the decentralisation of
the customer service and allocations teams. This allows customer
service teams to be closer to the markets they serve, ensuring
easy customer access and improved sales effectiveness.
The business’s focus on efficiency and investment in people,
technology, and capacity have positioned Boral to support
customers as market conditions improve in FY25.
Assets
Boral has the largest integrated asset base in the Australian
construction materials sector. The company’s asset-related goal
is to have safe, compliant, reliable, and optimised assets every
day, both for fixed and mobile assets. In FY24, Boral focused on
the implementation of the Auto Allocation project for concrete
transport across all metropolitan areas. The project has driven
more efficient mobile asset utilisation and customer service
across the network.
Boral also made good progress on its goal to strengthen its
integrated network through strategic upstream investments such
as the Booyal quarry near Bundaberg, Queensland, and quarry
land at Dunmore and Culcairn in New South Wales.
Boral’s property portfolio of owned operating sites represents
significant long-term value, as sites become surplus from a
traditional operations perspective. These surplus sites offer
a compelling long-term opportunity for the business to own
and co-develop industrial property. In FY24, Boral entered an
arrangement in relation to surplus land at Deer Park in outer
West Melbourne to progress a development opportunity, which
is expected to deliver material long-term value to stakeholders.
Outlook
Boral expects healthy market opportunities to continue in FY25.
The business’s performance journey will continue, executing
the Good to Great strategy, prioritising execution, price
leadership, and cost discipline. These initiatives, along with
Boral’s enhanced and agile go-to-market strategy will be critical
to effectively capturing the opportunities offered by both the
infrastructure and residential project pipeline.
There are also further opportunities to build upon the margin
improvement delivered in FY24. The business will continue
to invest in its integrated network to extend the life of prized
upstream assets, enhance its mobile fleet to drive operational
efficiency, and pursue organic growth opportunities in the
circular economy through its specialised recycling business.
Boral’s enhanced procurement practices and standardised
systems, supported by its leading technology and
accountability-focused performance culture, will lower
operating costs and improve customer outcomes in FY25,
underpinning confidence for continued earnings growth.
Boral is Australia’s largest integrated construction materials
company, operating over 360 sites, including 76 quarries
and 209 batch plants, supported by 4,600 employees.
Since 1946, Boral has been integral in building Australia,
leveraging its extensive network of quarries, cement
infrastructure, bitumen, construction materials recycling,
asphalt and concrete batching operations. Today, Boral
focuses solely on the construction materials sector
within Australia.
FY24 Performance
In FY24, Boral supplied materials for some of Australia’s most
important projects, including the Western Sydney Airport (NSW),
and the West Gate Tunnel (VIC). Demand from these major
projects, plus thousands of others, saw Boral’s sales volumes
remain strong over the year, slightly down compared to FY23.
Boral made significant progress on its performance journey
in FY24, including an improved go-to-market strategy and
enhanced customer service, enabling price realisation
across all products that helped to deliver three per cent higher
revenue. The business’s disciplined focus on cost reduction
and operational efficiencies delivered excellent outcomes
across the People Environment Markets Assets Financials
(PEMAF) framework.
These initiatives were critical to enhancing Boral’s profitability,
with EBIT margin expansion to 10.5 per cent, which ultimately
delivered EBIT growth of 61 per cent to $372 million, making
FY24 one of the most successful years in Boral’s history.
Other key priorities and progress delivered over the year
included improved procurement, the cement alternative fuels
program, internalising concrete and asphalt waste through
capture and processing, enhanced preventative maintenance,
and plant upgrades.
People
The people component of Boral’s operating model was enhanced
in FY24, focusing on the alignment of organisational behaviour
with the business’s primary objective of building a sustainable
future with safety, teamwork, ambition, accountability, and
respect. In pursuit of this, Boral rolled out the PEMAF scorecard
across the company, conducted multiple employee engagement
surveys, and improved its communications approach, including
direct CEO meetings with new starters, all the way down to
standardised staff engagement and education materials.
These initiatives not only resulted in improved engagement
and culture, as evidenced by positive results in employee
surveys, but also contributed to the business performance
uplift through price realisation, better customer service, cost
discipline, and cost base adjustments. The enhanced corporate
culture and working environment are reflected in improving
safety results, with a reduction in the TRIFR by 37 per cent to
4.5 occurrences per million hours worked. While this represents
a significant improvement in safety, Zero Harm remains the
overarching ambition.
Environment
Boral’s environment initiatives in FY24 focused on expanding
the cement alternative fuels program, with the commissioning
of a state-of-the-art chlorine bypass project at the business’s
largest cement facility in Berrima, New South Wales. The solid
waste-derived fuel (SWDF) facility has enabled the business
to increase alternative fuel usage to 30 per cent, representing
a 20 per cent increase from the previous year. In addition to
reducing emissions, the project delivers reduced kiln fuel costs
and diversion of waste that would otherwise go to landfill.
More broadly, Boral continues to advocate for a Carbon Border
Adjustment Mechanism (CBAM) to prevent carbon leakage,
and has actively participated in the Government’s review of
carbon leakage risks and solutions.
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Coates Moorebank Facility, Moorebank NSW
1. Adjusted for the sale of Coates Indonesia
EBIT ($m)
$326.7m
9%
$1,142m
<1%
1
Revenue ($m)
Coates is Australia’s largest industrial
and general equipment hire company,
providing market-leading equipment,
services and support.
SGH Annual Report 2024
14
Coates is well-positioned to support this activity with its
extensive fleet and national footprint, allowing the business
to reposition equipment to best meet market opportunities.
The business is also expanding its capabilities to increase its
total addressable markets. In pursuit of this, significant progress
has been made over the past two years to develop specialised
Engineering, Power & HVAC Solutions. Within this specialised
solutions business, Coates has successfully established supply
partnerships, specified machinery, procured equipment,
inducted fleet, and recruited specialists. These capabilities
have been showcased in strategic target markets through
successful projects in Emergency Services Response,
Engineering, and Industrial Shutdowns. Coates will continue
to build on this foundation to scale up the business and
support continued growth.
Safety and Sustainability
Coates delivered strong safety performance for the year, with
a 20 per cent improvement in TRIFR to 4.1, and a 41 per cent
improvement in LTIFR to 1.0. This progress follows an increased
emphasis on visible safety leadership, underpinned by the FY24
HSEQ Strategic Action Plan, which focused on implementing an
enhanced HSEQ Risk Management framework and education
programs across the organisation.
The business also made progress towards its sustainability
ambitions over the year, with a nine per cent reduction in
Scope 2 emissions. This improvement was largely driven by
the implementation of a solar installation program across the
network, with 26 branches now generating renewable energy
to power their operations.
FY25 Focus and Outlook
Leveraging market opportunities, Coates’ FY25 strategic growth
plan continues to focus on market penetration, the acceleration
of profitable solutions offerings, and incorporating additional
growth opportunities through small-scale acquisitions to
enhance the fleet and branch footprint.
Coates aspires to be the leader in ‘Easy to do business
with’ in the Australian rental market and is implementing
initiatives to drive a step change in Customer Experience (CX).
These initiatives include the “Customer360” program,
driving customer centricity, consistency through CX standards,
and CX accountability. The business is also expanding the
“Voice of Customer” feedback initiative to drive targeted action
to address customer pain points from call-to-cash.
After two fleet-focused acquisitions in FY24, Coates has
increased its hire fleet by $83 million to $1.9 billion on an original
cost basis. The business’s ability to leverage its fleet and the
scale of its market-leading network is a competitive advantage,
both in terms of providing a growth platform and moderating
incremental cost growth.
In FY25, in addition to growth, Coates will focus on enhancing
its core business with digital transformation and standardisation,
driving operating leverage and scale benefits. These initiatives
will include data-driven decision-making, continued productivity
improvements, and waste reduction across its network.
Coates’ investment in its market-leading hire fleet and network,
along with the enduring cost-out and efficiency gains delivered
in FY24, positions the business to capitalise on strong market
opportunities to deliver growth in FY25 and beyond.
Coates is Australia’s largest industrial and general
equipment hire company. The business provides
market-leading equipment, services, and support
to Australia’s infrastructure and construction sector,
leveraging its $1.9 billion hire fleet and 2,000 talented
people across 150 branches.
FY24 Performance
Coates delivered sales revenue growth in FY24, with
moderate expansion from the Australian business.
The growth was supported by strong customer activity from
infrastructure and construction projects, supported by the
sector’s robust and replenishing $1.7 trillion, seven-year
project pipeline. This revenue growth was delivered against
a backdrop of mixed market conditions impacted by project
commencement delays.
Coates’ disciplined execution, continuous improvement,
cost efficiency, and efforts to drive operating leverage and
agility resulted in a record EBIT margin of 28.6% per cent in
FY24, in line with global best-in-class peers.
Internal optimisation and margin expansion were pivotal
to Coates’ earnings growth in FY24. Key efficiency
initiatives included repairs and maintenance optimisation
through the ongoing roll-out of the hub-and-spoke branch
model, technology-driven transport and customer service
improvements, and targeted non-operational headcount
reduction. These efforts led to a nine per cent increase in
earnings for the year, aligned with the business’s ten-year
compound annual earnings growth rate.
Coates divested its Indonesian operations for US$50 million
over the year, resulting in an abnormal gain of $44 million.
While Coates Indonesia was a successful business,
the divestment is part of a strategy to focus on Australian
operations, where SGH has a competitive advantage and
its capital is likely to generate superior returns for stakeholders.
Market Dynamics
As the largest rental services company in Australia, Coates
is uniquely positioned to support customers undertaking
infrastructure and construction activities. The business’
combination of the largest and best-quality fleet, national
coverage, systems and processes, and the capability
of the Coates team, positions it as the clear market leader
for this end-market.
The percentage of rental equipment being utilised to complete
infrastructure and construction projects in Australia is increasing,
similar to trends in other international jurisdictions. As customers
increasingly opt for rental options to support their activities,
Coates is well-placed to meet this growing demand.
The business benefitted from high levels of customer activity
in infrastructure in FY24, participating in the development of
some of Australia’s most important projects, including the
Westgate Tunnel (VIC), Snowy Mountains Scheme 2.0 (NSW),
North East Link (VIC), Western Range Mine (WA), Sydney Metro
Rail (NSW), Gold Coast Light Rail (QLD), M7 & M12 Motorway
upgrades (NSW), Sky Waterfront Precinct (QLD), Cross River
Rail (QLD), Bunbury Outer Ring Road (WA), and the Western
Sydney Airport (NSW).
A multi-year surge in road and rail infrastructure, which
began in 2021, is expected to continue in 2025, and deliver
growth opportunities through to 2030. Further demand
growth is also expected from government investment in
social infrastructure, as well as a ramp-up in industrial and
warehousing investment driven by the expansion of online
commerce and data warehousing. Strong growth is expected
in residential construction as soon as late FY25, supported by
high migration, anticipated lower interest rates, and government
initiatives to increase housing supply.
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Energy
Otway Gas Plant, Otway Basin, VIC
EBIT ($m)
$98.6m
13%
Beach began generating positive operating
and earnings momentum in the final
quarter of FY24, with quarter-on-quarter
production and revenue increasing by
6% and 10%, respectively.
SGH Annual Report 2024
16
Beach facility, Moomba SA
With a robust portfolio of assets close to demand centres, and
a clear strategic vision, Beach Energy is well-equipped to play
a pivotal role in Australia’s energy transition while driving value
creation for shareholders.
SGH Energy
Seven Group’s wholly owned energy company, SGH Energy,
holds a 15.5 per cent interest in the Crux LNG project, located
in the Browse basin, offshore WA. Crux is operated by Shell,
who hold the remaining 84.5 per cent project interest, and its
production stream will backfill Shell’s Prelude Floating Liquefied
LNG (FLNG) facility. The project consists of a not normally
manned platform and five production wells, connected to
the LNG facility by a 160km export pipeline.
The project is two years into its development phase,
following Final Investment Decision (FID) in May 2022.
Drilling at the project has been ongoing since April 2024,
and the construction of infrastructure across the project is
well-advanced. SGH’s capital contributions to the project
development were $147 million in FY24.
First gas from the project is expected in CY27, aligned with
anticipated tightness in global LNG markets.
SGH Energy is also progressing commercial studies on
the Longtom Gas asset in the Gippsland basin, which
was independently verified in FY24 to hold over 80PJ of gas,
connected to existing production infrastructure. SGH Energy
has signed a Memorandum of Understanding (MoU) with
Cooper Energy to explore development pathways for the asset.
FY24 was a year of evolution for Beach Energy, with
significant changes in leadership and organisational
structure. These changes have positioned Beach to
effectively capture growing market opportunities, as the
critical role of gas in the energy transition is increasingly
recognised by government and the wider community.
The government’s Future Gas Strategy was released in FY24.
The policy acknowledges the vital role of gas in supporting
Australia’s energy security as we transition to a net-zero
economy. It also emphasises the need for continued investment
in gas supply, required to support increasing grid penetration
of variable renewable energy. This demand thematic forms the
basis for including transitional energy in SGH’s capital allocation
model, and presents significant opportunities for Beach over
the short, medium, and long term.
In addition to supporting Australia’s energy transition through
the supply of gas, Beach is also actively decarbonising its
operations with industry leading projects such as the Moomba
Carbon Capture and Storage (CCS) joint venture with Santos.
The Moomba CCS project is nearing first injection of CO2,
which is expected in FY25.
Beach financial and operating performance
Beach delivered FY24 production of 18.2 million barrels of
oil equivalent (mmboe), representing a slight decline from
the previous year. Sales volumes increased by 3 per cent to
21.3mmboe and revenue rose by 9 per cent to $1.8 billion, driven
by Waitsia cargo liftings and higher realised oil and gas prices.
Underlying EBITDA for the year was down 3 per cent to $950
million, while underlying NPAT decreased by 11 per cent to
$341 million, leading to an 11 per cent lower equity accounted
contribution to SGH EBIT of $103 million. Pre-growth free cash
flow was $163 million, which underpinned a full-year dividend
of 4cps, representing $27 million net distributions to SGH.
On the East Coast, completion of the Otway basin
Enterprise development was a significant milestone,
delivering much-needed new gas supply to the East Coast
market. Progress was also made on connecting the Thylacine
West wells, with first gas expected in the first half of FY25.
In the West, Beach provided critical support to joint venture
operator Mitsui in addressing quality issues at the Waitsia Gas
Plant in the Perth Basin, with first gas from the project targeted
for early 2025. The Perth Basin drilling campaign also yielded
two commercial gas discoveries at Redback Deep and Tarantula
Deep, alongside a successful development well at Beharra
Spring Deep, indicating promising future drilling prospects for
the Basin.
Beach strategic review and future outlook
A comprehensive strategic review conducted in the second
half of FY24 provided a clear pathway for Beach towards growth
and operational efficiency. The review focused on refining the
company’s organisational model, asset portfolio, and growth
opportunities. The refreshed strategy is built around three
core pillars: Core Hubs, High Margins, and Sustainable Growth.
The strategy aims to position Beach as Australia’s leading
domestic energy company by focusing on low-cost operations,
enhancing margins, and pivoting to longer-life assets.
Beach’s FY25 priorities include enhancing operational efficiency,
delivering major projects in the Perth and Otway basins, and
exploring new growth opportunities. The company is also
assessing the potential for gas storage and peaking power,
leveraging existing assets to support future energy needs.
Beach’s refreshed leadership team is focused on disciplined
execution and delivering on its strategic priorities. SGH will utilise
its Board and Chair representation at Beach to support the
execution of these objectives.
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58%
The West Control Room, Perth WA
EBIT ($m)
$25.4m
Media
SWM consolidated its position as the
number 1 total TV network in the country
with a 1.5% market share growth in
prime-time linear TV audiences, and a
39% increase in BVOD minutes in FY24.
SGH Annual Report 2024
18
Seven West Media (Seven West) retained its position
as Australia’s #1 total TV network for the fourth consecutive
year, reaching 91 per cent of Australian audiences in FY24.
The business continues to lead across the Australian
media landscape, with market-leading broadcast, print,
and digital platforms.
Seven West delivered FY24 sales revenue of $1.4 billion,
representing a 5 per cent decline year-on-year. This decrease
reflects an 8 per cent contraction in the Total TV advertising
market, partially offset by a 1.7 per cent growth in Seven West’s
advertising revenue market share. EBITDA of $187 million and
NPAT of $78 million were down 33 per cent and 46 per cent,
respectively, leading to a 45 per cent reduction in Seven’s
equity-accounted contribution to SGH’s EBIT of $42 million.
The company maintained financial discipline throughout
the year, resulting in a modest increase in net debt to
$301 million. Year-end net debt to EBITDA (leverage) was
1.6x, or 1.3x when excluding the impact of the ARN investment.
The FY24 result reflects the rapidly changing media
landscape and highlights the need to evolve traditional media
business models to effectively capture market opportunities.
Seven West is responding to this challenge with innovation
and discipline, implementing significant changes to its
organisational structure and leadership in FY24 to position
the business for future growth.
In April 2024, Jeff Howard was appointed MD and CEO,
bringing a refreshed leadership approach. Jeff was the prior
CFO and has brought a financial and disciplined focus to the
operational transformation of Seven West. The company has
conducted an independent review of its culture to understand
issues and help build a performance culture across the
organisation that is results orientated, safe, and inclusive.
Following that review and in response to challenges in
FY24, Seven West introduced several initiatives focused
on professional development and employee wellbeing.
These initiatives included training programs, leadership
development courses, and wellness initiatives, designed
to support employee growth and equip them with the tools
they need to succeed.
All allegations of misconduct are taken very seriously at
Seven West. Complaints are handled confidentially, and decisive
action is taken following any breaches. The business’s policies
are clear, and a zero-tolerance approach to any behaviour that
violates these standards will be maintained in FY25.
In June 2024, a new operating structure was established,
consisting of three divisions: Television, Digital, and Western
Australia. This reorganisation better aligns resources with
strategic priorities and reinforces a commitment to delivering
high-quality content across all platforms. Combined with an
ongoing cost-out program, this resulted in significant headcount
reduction across the business.
The new operating structure emphasises digital growth,
which accounted for over 50 per cent of earnings in FY24.
In FY25, for the first time in Australian history, Seven West
will stream AFL and cricket live and free across its digital
platforms, supporting growth in this key division.
In Television, Seven West’s current affairs and news programs,
general interest shows, and dramas continued to perform
strongly, while its sports programs dominated audience
numbers throughout the year.
In Western Australia, the company’s operations continue to
lead in digital and print, with key FY24 achievements including
the launch of a national digital newspaper, The Nightly, and a
sports platform, Streamer.
Seven West is also utilising industry-leading technology
to effectively monetise its content. By leveraging data analytics
and artificial intelligence, Seven West can now target key
demographics with tailored content, resulting in significantly more
efficient advertising for customers.
The changes to organisational structure, leadership, and culture
at Seven West have strengthened the core of the business and
positioned it to capture future opportunities in a dynamic and
evolving industry.
CMC and Other Media
SGH’s other media interests recorded an EBIT loss of
$6.5 million in FY24, consisting of a $7.8 million loss on CMC,
offset by $1.3 million in TV royalties. SGH’s investment in CMC
has historically been profitable, with an IRR exceeding 20 per
cent. SGH expects further distributions from CMC in FY25 from
assets already realised.
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Boral Peppertree Quarry, NSW
Approach and Coverage
Sustainability considerations are embedded in our business
strategy, risk management, and culture. Our approach is
focused on our wholly owned and operated businesses and
designed to deliver long-term value for our customers, people,
shareholders and the communities in which we operate.
WesTrac, Boral and Coates play a key role in the ‘circular
economy’, promoting the efficient use of resources, reducing
waste and environmental impact. This is achieved through
extending the lifecycle of products and minimising the demand
for the worlds finite natural resources while promoting a diverse
and inclusive working environment to service our customers
In FY21, our business identified 10 Material Issues based on
where we could have the most impact and/or mattered most
to our key stakeholders. Roadmaps were developed to guide
progress against these Material Issues.
Following the finalisation of the Boral acquisition on the 4th of
July and de-listing from the ASX, this report, for the first time,
now includes information on Boral’s performance against these
10 Material Issues, as well as updates from WesTrac and Coates.
In light of this change, we have now expanded the category of
Waste & Water to “Local Environment”, which better reflects the
broader context and consideration of Boral’s operations in our
communities.
This Sustainability report is focused on the business SGH
wholly own’s and controls. For ESG information regarding the
businesses where SGH holds a material stake but does not
wholly own – Seven West Media and Beach Energy – the reader
should consult the Sustainability Reports available on their
respective company websites.
UN Sustainable Development Goals
Our material issues align to over twenty UN Sustainable
Development Goal indicators, and cover twelve of the seventeen
Sustainable Development Goals.
–
Further information regarding SGH’s sustainability strategy
and actions, including a reconciliation to UN SDGs and the
GRI framework, can be found on SGH’s website.
At SGH, we recognise the
meaningful impact and
long‑term value our business
can contribute to the circular
economy and communities
in which we operate.
Sustainability
SGH Annual Report 2024
20
Safety
At SGH, safety is core to our approach to business, and we place great value on preventative
and protective measures that support our people. We recognise the need to protect the physical
and mental wellbeing of our people in the workplace, and our approach to physical health and safety
and mental health and wellbeing reflects this.
To be recognised by our teams, customers and regulators for safety excellence
Boral’s proactive approach to maintaining a safe and healthy
workplace for employees, contractors, and visitors led to a
27 per cent improvement in Lost Time Injury Frequency Rate
over the prior year with further initiatives and plans underway
to continue to deliver ongoing performance improvements.
Looking forward to FY25
Boral will focus on key hazard control effectiveness, continue to
drive Life Saving Rules, and continue to improve controls related
to manual handling and slip, trip and fall hazards. Additionally,
the focus on Visible Leadership will be further leveraged to drive
a Safety-First culture where team members look out for each
other and deliver on Boral’s commitment towards “Zero Harm.”
Coates
Coates’ Safety-First approach is all encompassing, ensuring
both physical and psychosocial hazards and injury prevention
is considered, and the safety management framework
appropriately identifies and mitigates physical and psychosocial
risks. In FY24, Coates lag safety performance indicators
improved with a 20 per cent reduction in the Total Reportable
Injury Frequency Rate to 4.1 and 41 per cent reduction in
Lost Time Injury Rate to 1.0.
Improvements were the result of several initiatives including
the delivery and implementation of the HSEQ Strategic Action
Plan, that focused on an enhanced HSEQ Risk Management
framework and education program across the organisation.
The program consisted of refreshed upskilling for all leaders
across the organisation in HSE Legal Duties and Obligations,
Psychosocial legislative changes as well as fundamentals in
HSE Risk Management. Central to this was the rollout, training,
and implementation of refreshed Life Saving Commitments for
Coates, and the introduction of Coates’ Top Ten Critical Risks
which are now embedded in all areas of operations. As part of
this framework, Expected Safety Behaviours for employees and
leaders were also developed and rolled out helping to set the
foundations for an effective safety culture.
Coates’ Health and Wellbeing program was launched in FY24
and is designed to encourage a healthier workplace environment
and support employees foster healthier lifestyles. The program
is delivered through monthly Townhall and Toolbox topics,
supported by guest speaker appearances. Some of the key
topics in FY24 included a focus on Male and Female Health
Issues, Sun Safety, Sleep Matters, Hearing Protection and
Mindfulness.
Looking forward to FY25
Coates will continue to progress company-wide education
and implementation of several initiatives across the business.
The rollout of training and implementation of enhanced
operational HSEQ and Transport Management systems will
remain a focus of the business with continued training and
development for leaders to support improved supplier and
contractor engagement and compliance.
WesTrac
In FY24, WesTrac carried out a comprehensive review of Critical
Risk Controls and prioritised embedding a Safety First culture
across all sites. The review concentrated on conducting job task
analyses, using wearable sensor technology fitted to WesTrac
team members to analyse and identify the critical risks of
high-risk manual handling tasks in the business.
WesTrac WA successfully launched its pilot safety culture
training program, “Built to Last”, designed around psychological
and psychosocial safety to more than 600 team members.
The program aims to empower and foster a speak-up culture,
building on WesTrac’s previous training with the addition of
educating team members on psychosocial hazards. The
employee onboarding program was also revamped and the in
person “Welcome to WesTrac” induction for all new starters and
mandatory health and safety inductions revised to create a more
seamless and engaging experience for WesTrac team members.
In NSW, WesTrac successfully completed its pilot of in-vehicle
fatigue management monitoring technology. The fatigue
management program included employee education on
strategies and practices to reduce fatigue risk. WesTrac’s risk
identification and intervention program, “What is the worst that
could happen?” was integrated into all new safety leadership
and mentoring programs in NSW.
Looking forward to FY25
Looking forward to FY25, WesTrac will continue to strengthen
management of critical risks through focusing on developing
renewed manual handling prevention strategies, targeted safety
training programs, and continued focus on monitoring and
compliance with safety systems. The business will also continue
to manage and control psychosocial risks and embed a Safety
First culture, rolling out the “Built to Last” program across the
WA business in FY25. For NSW, the rollout of the “What is the
worst that could happen?” program will continue as well as the
implementation of the in-vehicle monitoring system to improve
the management and prevention of fatigue related incidents
and risks.
Boral
Boral’s Health and Safety Program is centered around one of
Boral’s core values, “We look out for each other and aspire to
Zero Harm”.
During FY24, Boral’s risk-based approach included
strengthening and embedding:
–
chain of responsibility duties and compliance;
–
dust management plans across all sites;
–
improving the isolation and permitting processes; and
– improving employee and contractor wellbeing and
management of psychosocial risks through various policies
and programs.
Aspiration
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Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
Sustainability Report
Energy & Emissions
With the finalisation of the Boral acquisition, this report now includes data and initiatives on Boral’s decarbonisation
journey for the first time. SGH is in the process of assessing and realigning our FY30 targets. This assessment
will be based on Boral’s inclusion combined with a review of the current and future decarbonisation pathways
available to SGH. We will also consider the anticipated climate change and sustainability reporting requirements
that the Federal Government is currently contemplating. We will provide a further update in early FY25.
Across our businesses, we continue to look for opportunities to provide solutions for our customers and play a role
in their decarbonisation journey. We are offering fleets and developing products that can deliver both commercially
viable solutions and reduce emission, and see further opportunities in this area. We recognise the great challenge
and opportunity that a lower carbon economy presents, and will be working in FY25 to continue this journey of
decarbonisation with our business and customers.
To play our part in each of our sectors in meeting the Paris Agreement’s goal to
limit global temperature rises to well below 2°C
Boral
Decarbonising operations and supporting customers in
their decarbonisation journey through lower carbon products
is a key priority for Boral.
Boral is currently delivering key decarbonisation projects
including alternative fuels and kiln feed optimisation projects to
reduce Scope 1 emissions. Boral’s ‘Alternative Fuels’ program is
focused on transitioning cement manufacturing operations from
coal as the primary source of thermal energy to alternative fuels.
Boral has adopted an ambitious target to achieve 60 per cent of
Boral’s cement kiln’s thermal energy from alternative fuels.
In FY24, Boral successfully sourced approximately 28 per cent
of its kiln’s thermal energy from alternative fuel sources (utilising
waste materials), up from 24 per cent in FY23. To enable this,
Boral has recently completed major capital projects including
construction of a state of the art automated receival, storage and
blending facility for solid waste derived fuel (SWDF). In addition,
Boral also completed the construction of a chlorine bypass
which is a key enabler to ramp up the use of alternative fuels.
Utilising 72 kilotonnes of waste-derived alternative fuels enables
significant reductions in carbon emissions associated with the
heating processes in cement manufacturing while at the same
time supporting diversion of these waste materials from landfill.
Boral has taken a major step in its transition to renewable
electricity usage through a solar PPA. This agreement will
provide up to 60 GWh pa of renewable electricity.
Boral continue to advocate for the potential of recarbonation.
As recognised in the Sixth Assessment Report of the United
Nation’s Intergovernmental Panel on Climate Change (IPCC),
the carbon emissions from concrete and cement manufacturing
are partially absorbed by concrete during the life cycle of concrete
buildings and infrastructure. Studies estimate that the CO2 uptake
through recarbonation of concrete could range from 20 per
cent to 55 per cent of process CO2 emissions during cement
manufacturing. Boral believes that broader recognition of the
recarbonation process remains a significant opportunity for Boral.
Looking forward to FY25
Boral will continue to increase the use of alternative fuels at
its Berrima Cement Works facility to further reduce Scope 1
emissions. Additionally, Boral will continue to explore opportunities
to increase the use of renewable electricity across its operations.
Boral will also continue the exploration of the recarbonation
processes. Extensive research and development will continue,
with the carbon capture and storage demonstration plant at
Berrima Cement Works that is currently being commissioned.
WesTrac
WesTrac’s Scope 1 and 2 emissions primarily result from
fossil fuels within its internal vehicle fleet and electricity usage.
Emissions reduction efforts remain centered on these two areas.
The solar rollout program continued, with six sites to be
commissioned in CY24 including larger branches such as
South Guildford in WA and Tomago in NSW, and smaller
branches such as Casula, and Canberra in NSW. By CY24 close,
eight of WesTrac’s facilities will have installed solar panels.
WesTrac is actively seeking opportunities to secure access to
green power through commercial purchasing arrangements
across multiple sites.
In relation to fleet, WesTrac commenced the transition of it’s
internal fleet vehicles to hybrid/EVs, with a focus on transitioning
passenger vehicles in the short term. Through the WesTrac
operations area, a continued review and identification of further
ways to reduce the emissions footprint is ongoing, including
the commencement of the installation of full LED light fit out at
Tomago due for completion at the end of CY24. WesTrac has
also commenced the transition of the forklift fleet to electric,
seeking lower emission stationary fuel alternatives, and trialling
innovative concrete alternatives made by Boral Envirocrete®
for hardstands, reducing emissions by 85 per cent.
Looking forward to FY25
WesTrac’s focus will continue to be on the primary contributors
to emissions, through continuing to roll out its ‘Solar Program’
and transition its fleet to lower emission vehicles. WesTrac will
explore energy efficiency opportunities as recommended
by further energy audits at major sites and install hot water
heaters with heat recovery units at seven regional branches
in NSW. WesTrac will also continue to assess Scope 3 emissions
and begin to plan and work with suppliers and customers
to track, measure, report, reduce emissions. WesTrac WA,
in partnership with Caterpillar, is preparing to introduce the
first electric machines to the market, which is a key milestones
in the development to provide solutions to service WesTrac’s
customer ambitions of decarbonising their operations.
Aspiration
SGH Annual Report 2024
22
Boral’s five key decarbonisation levers
1
Energy
Alternative kiln fuels:
Transition Berrima Cement’s kiln fuel
away from coal by increasing the
thermal energy derived from alternative
fuels to 60% and exploring hydrogen
and renewable gas
Renewable energy:
Aim to transition to power from
renewable sources
Energy efficiency:
Improve energy efficiency by 5% to 10%
2
Cementitious
intensity
Lower carbon concrete:
Increase the use of supplementary
cementitious materials
Kiln feed and cement
plant optimisation:
Implement processes to increase
cement plant efficiency
3
Transport
Optimise supply chain:
Optimise supply chain logistics
and routes
Renewable fuels:
Explore and implement alternative fuels
for Boral and contractor fleets, including
electrification, biofuels, and hydrogen
4
Sourcing
Lower carbon supply chain: Prioritise
lower CO2-e intensity suppliers,
including for imported clinker
5
CCUS
Mineralised carbon products:
Pilot and implement a mineralised
carbon product stream
Carbon capture use and storage:
Explore and implement emerging
CCUS technologies
Coates
Coates’ Scope 1 and 2 emissions are predominantly driven by
consumption of fossil fuels from the internal vehicle fleet and the
use of grid electricity. Key activities completed during FY24 are
aligned with the Emissions Reduction Roadmap and primarily
focused on these two sources and governed by the Coates
Sustainability Committee, which is chaired by the Coates CEO.
In FY24, the Coates solar panel rollout program continued, with
26 branches now with installed rooftop solar PV totalling 1.1MW
and 2,297 panels (19 were completed in FY24). The benefit of
this portfolio program is approximately 1.15GW of reduction in
grid consumption and reducing approximately 861 tonnes of
Scope 2 greenhouse gas emissions annually. This work is a key
part of Coates energy roadmap to meet decarbonisation targets.
Coates has driven nearly 66,000 electric on-road vehicle
kilometres in FY24, saving approximately 5,500L of fuel and
11 tonnes of net GHG emissions. These trials have tested the
operability of EVs in the internal Coates vehicle fleet, with ongoing
feedback from pilot drivers assisting in the planning for fleet
transition strategies.
Coates increased the visibility of electricity consumption
at branches with solar installation providing invaluable data.
This real-time data has enabled a focus and identification
of activities to change behavior and usage to drive energy
efficiency. For example, areas of high overnight energy load were
identified with the ability to modify behaviour leading to a
reduction of waste energy sources. Using solar portal and the
newly created Energy & Emissions dashboard, data is visible at
branch and organisational level allowing the business to focus
on areas of highest benefit.
Looking forward to FY25
Coates will continue to prioritise the rollout of solar power to
its branch network, consider introducing net-zero property
specifications for new or upgraded properties, further develop
and implement emissions reduction actions via light vehicle,
heavy vehicle & transport strategies, continue electrification of
the branch equipment from combustion engines, and continue
quantifications of supply chain emissions in line with mandatory
climate-related financial disclosures.
WesTrac solar installation, Tweed Heads NSW
23
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Sustainability Report
Local Environment
Since FY23, all of SGH’s wholly owned businesses have actively pursued Local Environment targets and in
particular had action plans that are aligned with the Australian government’s National Waste Policy and focused on
reducing portable water usage in our operations. We expanded the key material issue in FY24 to also focus on the
local environment in which our businesses operate and interact.
To reduce our operational impacts on the land, water and the local environment in the
communities in which we operate
Boral are continuing to manage biodiversity offset sites at
Coolumburra, NSW as well as Narangba and Ormeau in
Queensland. The 960-hectare offset site at Coolumburra
supports five native vegetation community types that provide
a habitat for two threatened species, the koala and large-eared
pied bat (LEPB).
Looking forward to FY25
To further improve recycling and diversion of waste from landfill,
Boral will continue to focus on beneficially reusing waste products,
through implementing internal training, and working with its
operational sites and regulators. Further, Boral will continue
to actively rehabilitate quarries and manage biodiversity offset
sites. In addition, through Boral’s recycling business Boral will
continue to contribute to the circular economy and will aim to
further increase the amount of construction and demolition
waste diverted from landfills.
Coates
During FY24, Coates completed a detailed branch survey,
involving every site and property to provide a comprehensive
picture of all facilities, operational capability, and all environmental
activities, acting as an updated baseline for future improvements
and opportunities. Following the success of this survey, Coates
have committed to running a similar process on an annual basis
to help maintain oversight and enhance continuous improvement.
Progress has also been made on Coates Water Roadmap,
with the key activity being improvements in washbay maintenance
and compliance requirements. This has included a focused
audit of key facilities, the implementation of ongoing audit and
improvement projects, and internal capability improvements.
New wash bays and water treatment facilities have been
constructed at Ingleburn, Smithfield and Muswellbrook,
as new branch facilities have commenced operations.
Coates also continue to deliver against its Waste Roadmap.
In FY24, focused activities at several ‘top volume’ branches
commenced with an intervention process, development of
improvement priorities and training on waste reduction initiatives.
Coates continue to support the local community through
volunteering and donation of equipment in kind for local
environmental improvement projects where Coates can assist.
Some examples of this include volunteering at Foodbank,
Hospitals and National Parks.
Looking forward to FY25
Coates will continue enhancing wash bay maintenance and
compliance to meet operational and legislative requirements
as well as executing on plans to install water metering and
sub-metering to improve water use understanding. A revised
Spills Response Program will be launched, and a National
Waste improvement program will be implemented to target
top volume sites, focusing on waste reduction and diversion
of recyclable streams.
WesTrac
In FY24, WesTrac commenced the development of a Waste
Roadmap based on established targets in line with the National
Waste policy. Throughout the year, the focus was on further
expanding the opportunities identified for plastic reduction,
cardboard and wood waste optimisation within the Parts
Distribution Centres, implementing soft plastic, cardboard and
wood compaction technology. Continuing to reduce the amount
of soft plastic waste sent to landfill nationally and reducing
the frequency of truck movements through waste pick-ups.
WesTrac is trialling 100 per cent PCR recycled courier bags and
‘continuous’ plastic bag stands, which has resulted in reducing
waste bag usage by up to 60 per cent.
In FY24, WesTrac has continued to seek opportunities to reduce
the consumption of potable water. WesTrac WA installed live
remote water metering, which has reduced water consumption
by 10 per cent and WesTrac NSW continues to use non-potable
water in its wash bays and toilets at Tomago.
Looking forward to FY25
WesTrac will continue to pursue the goal of reducing waste
sent to landfill through: 1) extending the roll out of waste
compactors; 2) seeking opportunities and suppliers to
recycle waste; and 3) exploring alternative packaging options
that have a lower environmental impact, are easily recyclable
and / or are biodegradable.
Boral
Boral continues to drive improvements in recycling via diversion
of waste from landfill. In FY24 Boral diverted approximately
99 per cent of operational waste from landfill.
Boral is also playing an integral role in diverting a significant
amount of construction and demolition waste generated by
customers. In FY24, Boral Recycling processed more than
2.3 million tonnes of material, for direct sale to external
customers, as well as for use in Boral’s Quarries, Asphalt and
Concrete operations. Boral’s Recycling business sorts, crushes,
blends and sells recycled materials including crushed concrete,
bricks, glass and soils (from sandstone or excavated sand).
These recycled materials are used for road base and similar
products and are ingredients in concrete and asphalt mixes.
Water is an essential resource for all operations, but particularly
Boral’s Concrete, Cement and Quarries businesses. Boral
uses water to manufacture concrete and cement; for dust
suppression, particularly in the Quarries and Recycling
businesses; and for cleaning and sanitation across
operating sites.
Boral uses recycled water in its production processes across
many of its businesses, including Concrete, Quarries, Recycling
and Asphalt. While some sites use 100 per cent recycled
water for production processes, this proportion varies across
operations. Wash water, and first-flush stormwater at concrete
plants are regularly recycled back into the production process.
Boral continues to focus on increasing the use of recycled water
in the production process.
Aspiration
SGH Annual Report 2024
24
Materials
WesTrac, Boral and Coates play a key role in the ‘circular economy’ – promoting the efficient use of resources,
reducing waste and environmental impact for our customers and communities in which we operate.
To be a leading Australian corporate contributor to the circular economy
cent replacement of natural sand with crushed glass, up to
70 per cent replacement of aggregates with steel furnace slag,
as well as up to five per cent replacement of the aggregate
component and up to 18 per cent replacement of the binder
component with crumbed rubber.
Looking forward to FY25
Boral will work closely with customers to further increase the use
of lower carbon and recycled materials. In particular, Boral will
focus on increasing the awareness about the unique advantages
of its premium Envisia product which offers significant reduction in
embodied carbon of concrete without compromising performance.
Coates
Coates are focused on the leadership role they can play in
promoting circular economy practices due to the inherently
circular nature of the equipment hire and business solutions
business model. Coates provides solutions for Coates’
customers that drives the efficient utilisation of materials and
machinery in the Australian market.
In FY24, Coates have continued to build out the ‘Circular
Systems’ program, that seeks to reduce materials and improve
efficiencies across the lifecycle of products. Notably, Coates
recycled 5,000 plastic barriers – 221 tonnes of HDPE plastic
recovered, and recycled to new product, rather than landfill.
Coates have now recycled over 11,000 end of life plastic
barriers since commencement of the program in 2022,
including 10 per cent of the recycled content used in the
manufacture of new barriers procured by Coates. In addition,
Coates have also assessed the potential to recycle end-of-life
plastic portable toilets with the manufacturer and successfully
diverted 426 laptops and phones from landfill.
Through resale to local and overseas used equipment markets,
Coates have extended the life of over 12,000 assets ($105 million)
of divested fleet.
Looking forward to FY25
Coates plans to undertake a major circular project focused on
Site Accommodation to enhance material circularity in asset
refurbishment and appliance use, while expanding its recycling
program for plastic barriers and portable toilets. Using data from
climate-related financial disclosure reporting, Coates will also
assess fleet categories impacting customer Scope 3 emissions
and collaborate with equipment suppliers to reduce materials in
production in FY25.
WesTrac
The core of WesTrac’s business lies at the heart of the circular
economy; the bulk of the operations workforce is devoted to the
reclamation and rebuilding of parts, components and equipment
that would otherwise be regarded as having come to its end of
life. WesTrac have ‘rebuild’ teams in multiple workshops who
specialise in taking fully used equipment and rebuilding each
component to an ‘as new’ state. In FY24, WesTrac has delivered
a large number of refurbished and rebuilt parts:
Summary of refurbished and rebuilt parts FY24
Re-manufactured parts
Component rebuilds
Machine rebuilds
353
14,876
80,457
In FY24, WesTrac WA partnered with Caterpillar rolling out
a global initiative to recycle the metal duo seal rings from
overhauled final drives components, reducing the need for
raw materials. The Guildford branch has returned 11.25 tonnes
of steel for recycling.
In NSW, WesTrac is utilising its five-3D continuous carbon
reinforcement printers to supply over 250 parts per month to
new machines and workshops. This is a highly precise and
repeatable process replacing steel fabrication and reducing
supply chain logistics.
Looking forward to FY25
Looking forward, WesTrac will continue to expand its rebuild
capacity and continue to work in close collaboration with
Caterpillar on several circular economy initiatives. In addition,
WesTrac will continue to focus on sustainability and the circular
economy in its procurement practices.
Boral
Boral aims to lead the way in offering innovative and sustainable
material products that meet customers’ changing needs. In
addition to Circular Materials Solutions for construction and
demolition waste, Boral also offers a range of products with
improved sustainability attributes, including increased use of
recycled materials and lower carbon emissions.
Boral is prioritising lower carbon concrete innovation,
development and availability. Boral’s lower carbon concrete
combine distinctive proprietary binder ingredient ZEP
technology with expertise in concrete mix design to replace the
cement used in concrete with Supplementary Cementitious
Materials (SCMs). SCMs are typically ground granulated
blast-furnace slag and fly ash, which are by-products of steel
manufacturing and coal-fired power generation, respectively.
In FY24, there was a targeted campaign to promote lower
carbon concrete, which represented ~33 per cent of sales
volume for the year, up from 28 per cent in FY23.
Boral’s recycled products include INNOVO asphalt system
and Enviro-O-Agg Blended Sand. Boral has developed
the capability to provide customers with INNOVO mixes
containing up to 40 per cent replacement of aggregates and
binder with Reclaimed Asphalt Pavement (RAP), up to 10 per
Aspiration
Coates circular economy with road barrier recycling,
Ingleburn NSW
25
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Performance Review
Sustainability Report
Technology & Innovation
Technology and innovation remain key to the success of our businesses, our customers’ businesses and the
Australian economy. SGH continues to equip our businesses with the knowhow, capital and incentives to
continuously search for ways to adopt and leverage new technology driving efficiency for both our operations
and our customers.
To bring the benefits of technology and innovation, including digital, to our teams and customers
Boral also made further progress in roll-out of the
‘Auto Allocations’ system as a major step towards improving
the productivity of the Company’s fleet. Auto Allocations
digitises the process chain, connecting trucks, products, plants
and customer information and real-time traffic flow to create a
single source of consolidated data. The system then uses an
algorithm to recommend the best transport schedule, taking
into consideration customer service and transport efficiency.
The program has recently been implemented in metropolitan
concrete plants in QLD, WA, VIC, SA and NSW.
Boral’s commitment to Innovation is a key enabler of
decarbonisation, in FY24 Boral continued to explore a promising
Carbon Capture and Storage (CCS) technology based on
recarbonation of construction and demolition (C&D) waste.
This CCS technology leverages Boral’s unique vertically
integrated business model and strong C&D waste recycling
position to enable a low-cost carbon capture and storage
solution. Boral expects that the outcomes of this pilot trial will
enhance technical and operational readiness to scale this or
similar CCUS technologies when required.
Looking forward to FY25
Boral will focus on accelerating the roll-out of lower carbon
concrete products with higher SCM content. In addition,
Boral will further focus on R&D on the recarbonation process
and recarbonation-based carbon capture and storage through
extensive pilot scale trials in the demonstration CCS pilot plant
at Boral’s Berrima Cement Works facility.
Coates
Coates has a long and strong history of introducing new
technology to the Australian market to benefit customers,
and increasingly the area customers have focused on relate
to emissions reductions.
In FY24, Coates continued to increase the size of its lower
carbon fleet options, with $28 million in new equipment
approved for purchase, expanding this fleet to $147 million,
representing 8 per cent of total fleet value. This fleet included
100 low pollutant engine driven earthmoving and materials
handling assets. Coates additionally expanded its fleet of Battery
Energy Storage Systems (BESS), Hybrid Power Systems (HPS)
units, and electric Access and Material Handling equipment.
The provision of advanced digital solutions to customers
continues to be a focus. Internet of Things (IOT) devices are now
installed on over 10,000 assets, enabling customers to monitor
and redeploy equipment to increase utilisation and minimises
wastage (e.g. fuel and labour).
Looking forward to FY25
In FY25, Coates will begin transitioning its ‘own use’ forklift
fleet to electric drive to reduce Scope 1 emissions. Additionally,
Coates will trial sub-metering equipment to monitor and reduce
electricity usage and emissions in site accommodation. The
Greener Choices fleet will also continue to evolve in response to
customer demand and technological advancements and Coates
IoT rollout will continue in FY25, with anticipated coverage
increasing to 12,500 assets.
WesTrac
In FY24, WesTrac continued to play an integral role in bringing
the latest Caterpillar technology innovations to the Australian
construction and resource sectors. WesTrac NSW opened its
Technology Experience Centre (TXC) at Tomago, providing
customers with hands-on experience with the latest Caterpillar
technologies used in mining and construction. The TXC
allows customers to experience live demonstrations of the
Cat MineStar suite, automation, remote operation, fleet health
optimisation, fatigue monitoring, and Fluid Sampling 101. This
allows customers to gain a better understanding of the products
and how they can benefit their applications.
WesTrac WA, in partnership with Caterpillar, is preparing to
introduce the first electric machines to the market. WesTrac
has also established a dedicated WesTrac Technology Centre
in WA at WesTrac’s Perth Airport Precinct in FY24. WesTrac’s
Technology Centre will be the central location for electrification
projects related to power generation and lithium battery storage
in readiness for pilot battery operated trucks.
WesTrac also expanded its offering of drilling automation
products. Command Drilling enables consistency/repeatability
of drilling outcomes with operator in cab but autonomous
drill operation. This technology improves efficiency and fuel
consumption. WesTrac enabled one of its key customers to
reach one million meters of autonomous drilling in FY24.
Looking forward to FY25
Looking forward, in FY25 WesTrac will continue to focus on
collaborating with Caterpillar and WesTrac customers on
electrification opportunities, while building the critical skills
required to support electrified operations. WesTrac will also
focus on improving operating capability and delivering on
commitments made as part of the Caterpillar Electric Truck
early leaner program. WesTrac will expand the offerings at
the WesTrac Technology Training Centre Collie, particularly in
in Autonomous Dozing. Efforts will also be directed towards
creating a comprehensive Technology Roadmap, and launch the
WesTrac Vision Link Strategy with a focus on sustainability and
advising customers how to effectively manage fuel consumption.
Boral
In FY24, the key focus of Boral’s research and development was
on achieving further reduction in embodied carbon of Boral’s
lower carbon products, developing unique circular solutions for
customers, adopting new technologies to improve customer
experience and piloting innovative decarbonisation technologies.
Boral’s R&D program continued to explore further reductions
in the embodied carbon of lower carbon concrete. Boral has
now successfully developed mixes with approximately
70 per cent replacement of cement with slag and fly ash,
up from approximately 50 per cent replacement in current
lower carbon concrete product.
Aspiration
SGH Annual Report 2024
26
Diversity
SGH is committed to supporting open and inclusive workplaces that embrace and promote diversity and equal
opportunity. SGH considers building a diverse and inclusive workforce a key enabler for delivering superior returns
to all stakeholders across the business.
To ensure we have a diverse and inclusive workforce that increasingly reflects
the communities in which we operate
Boral
Boral’s Diversity and Inclusion Plan, “Belong”, outlines Boral’s
commitment to diversity with a specific focus on Gender Equity,
Reconciliation and Inclusion.
In FY24, Boral updated its hiring practices, policies and
processes to further strengthen equitable access to
opportunities and encourage greater participation of women
and Aboriginal and Torres Strait Islander people in its workforce.
Key actions included; 1) gender neutral and inclusive advertising;
2) broader role criteria; 3) hiring manager training; and 4)
updating policies to remove unintended bias and standardise
flexibility and leave provisions.
In FY24, Boral completed extensive employee programs to
improve employees’ awareness about diversity. Over 300
employees completed a cross cultural training program.
Further, all senior leaders participated in the ‘Working with
Respect’ training and action planning program.
Boral also launched its ‘Women’s Driving Academy’, providing
targeted training and a defined career pathway in driving for
inexperienced candidates. In addition, Boral further engaged
with multiple school, trade and career expositions to build brand
awareness and proactively engage high school students on early
career opportunities at Boral. Other events to celebrate Boral’s
rich diversity include recognising International Women’s Day,
National Reconciliation Week, NAIDOC Week and Pride Month.
Looking forward to FY25
Boral will continue prioritising Gender Equity through the
delivery of its ‘Gender Action Plan’, creating equitable access
to opportunities to increase diverse representation at Boral.
Over the course of FY25, Boral will also accelerate its investment
in women’s development and career progression, with targeted
campaigns and training opportunities for women to access
non-traditional career pathways and leadership opportunities.
This includes launching the ‘Women Leading Program’ as well
as establishing early talent programs including Undergraduate
and Apprentice Programs. Further, Boral have established
gender representation targets to increase the representation
of women in the workforce by 20 per cent by June 2025.
As part of Boral’s new ‘Innovate Bula Reconciliation Action Plan’
(RAP) which will commence in 2025, Boral will build on
Cross-Cultural Awareness with a formal cultural competence
program across its sites.
WesTrac
WesTrac continues to make meaningful strides in diversity and
inclusion towards achieving an aspirational female gender target
of 25 per cent in FY25. Diversity has increased year on year,
which has seen an increase in female representation across
the business, including leadership positions, with females now
comprising 20 per cent of the WesTrac workforce nationally,
up from 19 per cent in FY23.
WesTrac remains committed to fostering female talent pipelines,
promoting internal career pathways, and providing career
development opportunities remain steadfast. In FY24, this
included launching and offering several leadership development
programs for female team members such as the Women Rising
leadership development program for high-performing female
leaders in WA, complemented by the Male Allies program
for Male leaders, Women’s Mentoring program, and AGSM
Strategic and Commercial Management program in NSW,
achieving a 38 per cent female participation rate. Additionally,
as part of International Women’s Day 2024, WesTrac proudly
introduced the Women of WesTrac Trailblazers campaign.
WesTrac actively participated in several programs such as
Austmine’s Accelerating Women in METS program, ‘Girls of Steel,’
and ‘Girls Can Too’ in NSW, emphasising the commitment to
increasing female representation in both trade and leadership
roles. Likewise, monthly diversity-focused recruitment
assessment centres were conducted for entry-level trade
positions at WesTrac WA.
Significant improvements to attract more female candidates
and select the right applicants by streamlining the approach to
assessment centres were made in FY24. Since FY21, WA has
increased the number of female apprentices by 16 per cent year
on year, achieving a participation rate of 20 per cent in FY24.
Additionally, a mentor program and an engagement framework
that supports females in a male dominated work environment
was introduced. Whilst attracting female candidates is
important, the retention of female apprentices was also a key
focus given the higher attrition rates of this cohort. Targeted
Initiatives to improve workplace environments and safety for
this cohort helped improve retention rates drastically.
Looking forward to FY25
WesTrac will continue to drive progress towards the
25 per cent female participation by end of 2025. A review of
female development programs will be undertaken to ensure
they are fit for purpose in supporting career progression and
retention. Newly created training roles and the work experience
program will be reviewed to look at ways of increasing female
participation at an operational level. Increasing the number of
females in leadership will continue, leveraging the employee
value proposition to attract and retain female talent. WesTrac
will also embark on broadening the diversity agenda to focus
on visible and non-visible disability inclusion and commence
Disability Action Planning.
Aspiration
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Coates
In FY24, Coates refreshed its Diversity Equity and Inclusion
Strategy and Action Plan to have a two-year focus spanning
FY24 and FY25. As part of that plan, Coates established
frontline female participation targets, increased networking
and development opportunities, and improved flexibility of
hours at Branches.
Coates overall female representation has increased from
21.6 per cent in FY23 to 23.1 per cent (444 roles filled by
women). Coates representation for women in people leadership
roles has also grown by two per cent to 23.7 per cent with
84 women in leadership roles. Aboriginal and Torres Strait
Islander participation has remained largely steady at 2.1 per
cent, including in leadership. Bi-annual role to role Gender Equity
Pay Reviews continue to ensure zero per cent gap for base
salary and total fixed remuneration.
Coates efforts in advancing gender equality were recognised
through winning the NSW National Association of Women In
Construction (NAWIC) Crystal Vision Award and being a finalist in
the equivalent national award for advancing career progression
and promoting participation of women in the construction
industry. Specific development and networking activities have
taken place for female employees in all key operational business
units, taking a variety of forms from online group learning to
in-person activities, with positive feedback and requests for
further activities in FY25.
Coates has continued to achieve strong results from its LEAP
(Leadership, Excellence and Potential) program for women in
leadership, with 21 participants completing the program in FY24,
and five graduates experiencing promotions or new roles, with
a total of 33 per cent of graduates gaining promotions since the
program began in 2021.
Over 180 leaders attended Inclusive Leadership training
through the year, with the program scoring an NPS of over 49,
demonstrating strong engagement with the topic. A variety of
key events have also been celebrated nationally or locally across
its network during the year including International Women’s Day,
Harmony Day, National Reconciliation Week, NAIDOC and World
Down Syndrome Day.
Looking forward to FY25
The LEAP Program will remain a priority, alongside improving
female engagement, expanding female networking events, and
maturing inclusive leadership training for management teams,
as Coates work towards the goal of 25 percent participation
by 2025. This will involve further efforts to accelerate the
employment and retention of frontline female employees across
the business. Additionally, work will continue around Positive
Duties and reducing psychosocial risks in conjunction with
HSEQ. Cultural awareness training as part of the Innovate RAP
will also persist in FY25, enhancing its understanding of First
Nations culture. Furthermore, Coates plan to broaden diversity
and inclusion agenda beyond the current focus areas of gender
and First Nations to formally include other categories.
Coates Facility, Ingleburn NSW
SGH Annual Report 2024
28
Training
SGH remains committed to investing in leadership development and specialist training to improve the
technical and leadership capability of our people.
We have a particular focus on programs such as training, apprenticeships, and trade upgrades to ensure
we have access to the skilled labour we need in order to serve our customers. WesTrac, Boral and Coates
are Registered Training Organisations.
To engage, educate, develop and inspire our people
Over 2,900 employees participated in operational training with
over 1,500 people obtaining a nationally accredited certification.
The Boral RTO continues to play a key role in the development
of skills to ensure Boral employees and business are industry
leading in terms of service, efficiency and quality to meet the
needs of customers.
Boral continues to invest in the future through the engagement
of 45 apprentices and trainees.
Looking forward to FY25
Boral will launch its new leadership model with a competency
framework by leadership level and assure an internal pipeline of
talent for the future. This model and framework will be integrated
into the HR practices of leadership and business leadership
skills with a strong emphasis on the fundamentals of segment
performance and understanding and continually leveraging the
Boral value chain.
Coates
Coates continued to provide learning opportunities for its people
in a variety of areas, both to enhance job performance, develop
people and ensure compliance to essential skills and knowledge
required for its organisation. In total, over 32,500 hours of
training have been delivered in FY24 with a total investment
of $2.0 million. Some of the key areas are set out below.
Training to uplift the focus and capability across the entire
Coates workforce with respect to Customer Experience has
been a key activity in FY24. With training on each of its six
Customer Experience Principles, as well as other bespoke
and practical guides, tools and training across the various
aspects of the customer journey and involving all employees.
The ‘Equipped for Leadership: Branch Manager’ program
continued in FY24. The program has now been delivered to over
200 participants since 2022, receiving outstanding feedback from
participants and their leaders, with a Net Promoter Score of +80.
The program has also demonstrated a measurable impact on
leadership performance and employee engagement for this cohort.
During FY24, a full review of all sales training was conducted
and a strategy for the improvement of sales performance training
was recommended and endorsed by senior management.
Work is underway for the refreshed suite of training programs
which will commence delivery early in FY25.
Looking forward to FY25
Coates will support the new “Be our Best” cultural program that
will be launched with appropriate learning and training initiatives
for people across the business. The second year of the Frontline
Capability Program will also be delivered focusing on a newly
insourced apprenticeship program and preparing to undertake
suitable traineeships for FY26/27. The refreshed Equipped for
Sales Performance program will commence delivery aligning
the training of the sales teams more closely to Coates business
performance objectives and measures.
WesTrac
With the growth of emerging technologies, WesTrac continues to
prioritise and invest in the training and development of its people
to enhance the workforce capabilities and to ensure it meets
customer needs.
In FY24, WesTrac initiated the development of an electrification
curriculum, upskilling both customers and its own workforce,
developed new product courses including advanced drills
and next generation dozer courses, and launched a nationally
accredited surveying and spatial awareness skill set in
collaboration with TAFE NSW.
WesTrac have maintained its commitment to building the future
workforce with 295 apprentices across its business, of which 58
graduated to fully qualified tradespeople in FY24. This commitment
to growing the industry is supported by training a further 200
customer apprentices through WesTrac’s Registered Training
Organisation. Diversifying skill sets has continued with 132 new
trade up grades and dual trades being enrolled during FY24.
WesTrac’s Technology Training Centre (WTTC) in Collie
continues to support deployment of Mining Technologies,
having now delivered training to over 800 personnel throughout
the industry. The Collie facility also supports a non for profit
to deliver Construction training for disadvantaged and
underprivileged youth, with 25 students graduated during
FY24 and have successfully gained employment.
Looking forward to FY25
WesTrac will continue to expand the ongoing program offerings
to its team members and customers, and seek to further develop
Machine Control and Guidance programs for dozers and
graders, Learning management system/e-learning capability for
WesTrac systems along with the electrification curriculum and
training pathways to support the required skillsets for both Hybrid
and Battery Electric products. WesTrac will also continue to build
the reputation and success of the WesTrac Institute in WA and
NSW, delivering over 5,000 training sessions and aim to develop
and grow the apprenticeship and trade upgrade programs with a
target of over 500 students across WA and NSW.
Boral
During FY24, Boral strengthened its new starter experience
by introducing the ‘Boral Way’ induction program with regular
check-ins to ensure new employees are well prepared,
supported and improve retention rates.
Boral continues to invest in building leadership capability to
support and sustain its business transformation. In FY24, 165 of
its business and finance leaders completed the Boral Commercial
Acumen and Financial skills program. Additionally, Boral deployed
renewed Competition Law training to its extended leadership
team (ELT), sales, and customer experience employees.
Boral has streamlined and modernised operational training
systems and processes including new and innovative ways to
ensure that high risk activity and controls are at the forefront
of operator awareness, and continue to work with operational
teams to identify clear career pathways to broaden skills,
improve engagement and retention.
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Financial Report
Our Businesses
Sustainability Report
Performance Review
Sustainability Report
Employment
Our workforce contains a vibrant mix of skills and capabilities. Our people have the right to freedom of association
and collective bargaining, and we maintain constructive relationships with multiple unions that participate in the
sectors we operate in. Our SGH Employee Share Purchase Plan, launched in FY21, provides employees the
opportunity to share in the value that they help generate for shareholders.
To be an employer of choice across all categories of employment, known for fairness,
empathy, development and contribution
Boral has 57 active enterprise agreements, highlighting its
dedication to freedom of association, collective bargaining,
and maintaining positive working environments and outcomes
for its employees.
Looking forward to FY25
Boral’s focus will be on embedding employee engagement
initiatives into the usual operating rhythm of the business
and using insights from these processes to inform and drive
improvements in employee experience including targeted career
and training opportunities for its people.
Coates
During FY24 Coates undertook multiple organisational reviews to
streamline structures, especially within the Solutions businesses,
reduce overhead costs where possible and optimise and
improve operational efficiencies. Labour shortages in key skill
areas (such as customer service, trades, drivers, engineers)
have continued to create challenges especially in regional areas.
Coates welcomed over 50 international mechanics from the
Philippines and three African countries late CY22 through to
late CY23 to help address some of these gaps and will look to
employ a smaller cohort in FY25 as shortages continue.
Throughout FY24, in an effort to combat attrition, a series
of strategic initiatives aimed at optimising talent acquisition
processes and continuously improving the candidate and
employee experience were undertaken. Enhancements included
improving internal selection processes and the revitalisation of
its interview guides and advertising templates, ensuring they
aligned with current industry trends and effectively conveyed the
brand to potential candidates. Work commenced to improve the
Employee Experience starting with onboarding processes and
training, promoting benefits and services available to employees
and their families and refreshing the key employee recognition
vehicle being the monthly peer-to-peer John Coates Medal for
living the Coates values. Bespoke remuneration reviews have
also been conducted for some roles and locations.
The Coates Employee Engagement survey was conducted in
March 2024 with a best-practice participation rate of 80 per
cent. The overall engagement score however decreased from
61 to 53 per cent nationally. The leadership team is undertaking
site visits and listening tours to enable a greater understanding
of the key issues to enable effective and meaningful action plans
to be developed at both a national and business unit level. Work
has also commenced on a new cultural program called ‘Be our
Best’, to elevate and embed the Coates value of the same name,
and also increase employee confidence and engagement.
Looking forward to FY25
Coates will launch the “Be our Best” Program with associated
training, initiatives and leadership support to build greater
engagement and performance. Coates will also complete the
negotiation and implementation of a new Coates enterprise
agreement and undertake appropriate Engagement Action Plans
to address key issues raised by employees.
WesTrac
Several strategic initiatives were implemented in FY24, including
sourcing talent from international labour markets such as Africa
and the Philippines. WesTrac conducted various trade-focused
recruitment campaigns, such as the Train-to-Task Recruitment
Campaign, the light vehicle and agricultural mechanics
campaign, and the External Trade Upgrade Campaign, aimed
at broadening trade skills and qualifications. Additionally, a
focus on untapped talent pools, led to identifying and including
veterans and females in operational roles, particularly within
the Parts Distribution Centre. WesTrac continue to build talent
pipelines through multiple channels, including school-based
traineeships, and offered flexible rosters in the warehouse to
attract females with primary carer duties.
WesTrac also prioritised talent development, refining its
Employee Value Proposition (“EVP”) based on internal and
market feedback, and increasing investment in apprentices,
interns, and graduates, successfully filling 65 per cent of
leadership roles from within the organisation. WesTrac also
commenced utilising and exploring the use of AI, including
adopting a state-of-the-art data management and analytics
platform to facilitate strategic workforce planning, enabling
modelling and forecasting for recruitment needs, and explored
optimising existing and integrating automation systems to
reduce administrative tasks, improve productivity, optimise
resource allocation, and increase employee engagement.
This year also marked WesTrac’s 20th anniversary of operations
in NSW and ACT, celebrated at WesTrac NSW Family Day,
recognising the critical contributions of its team members.
In WA, team members and their families enjoyed a WesTrac
Adventure World Takeover night, complete with thrilling rides
and activities for all ages.
Looking forward to FY25
WesTrac will prioritise strategic attraction and retention through
focusing on internal talent identification and development
of clear career pathways. WesTrac will continue to build the
‘Built By Us’ initiatives, enhance onboarding experience, improve
employee experience through the automation/elimination of
inefficient manual processes and review workforce planning,
including roster review and skills gap analysis.
Boral
Boral is dedicated to providing a safe, engaging, and inclusive
workplace for all employees. Boral is directly employing
approximately 4,500 people and positively impact many more
by being a good employer.
In FY24, Boral launched several initiatives to enhance and
innovate the daily work experience of team members. Notably,
Boral introduced a new engagement survey to facilitate
more direct feedback between employees and their leaders.
Additionally, Boral rolled out a new Employee Assistance
Program (EAP) and established a Mental Health Champion
network, underscoring its commitment to supporting
employees’ well-being and prioritising their health and safety.
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30
Indigenous Inclusion
SGH recognises Aboriginal and Torres Strait Islanders as the traditional landowners of Australia, and we
acknowledge that listening to Indigenous voices strengthens our ability to positively contribute to the full realisation
of the rights of First Nations peoples.
We are particularly committed to providing support to the Indigenous communities where our work takes place,
and this support includes employing and training Indigenous workers and supporting Indigenous businesses.
We look to structure our actions in line with the framework espoused by Reconciliation Australia.
To make a meaningful contribution to the full realisation of the rights of Indigenous peoples
in the communities we operate in
With Boral’s Supply Nation membership, Boral was also able to
form business engagements through its procurement network
with over 45 aboriginal businesses and in the FY24 had an
Aboriginal spend of over $8 million.
Boral completed its first Innovate RAP with all 45 key deliverables
met the satisfaction of Boral and Reconciliation Australia.
Looking forward to FY25
Boral aims to build on its Cross-Cultural Awareness program
with a formal cultural competence program for staff and sites.
The success of Boral’s Aboriginal Heritage Management
Committees at major sites will see more joint Management
Committees formed at Boral sites and the ‘Innovate Bula
Reconciliation Action Plan’ (RAP) will be commenced in FY25.
Coates
In FY24, Coates continued its reconciliation journey, focusing
on driving outcomes for employment, education, community
engagement and increasing supplier opportunities for
Indigenous businesses nationally. The Coates Innovate
Reconciliation Action Plan (RAP) was completed during
FY24 and have progressed to Innovate RAP 2.0.
Coates continue to work closely with community partners.
Coates employees participated in over 250 community events
with these partners, and all staff were given the opportunity to
participate in a Cultural Awareness session. Coates has worked
closely with Indigenous communities to create suitable cultural
awareness training for all employees, which will be launched in
NAIDOC Week 2024.
Coates renewed a National partnership with The Clontarf
Foundation. During FY24, Coates employees attended over
20 employment forums across the country, which lead to
several groups of Clontarf students attending local branches,
completing work experience and also included two more
students commencing employment with Coates. Coates has
employed 15 Clontarf graduates since the partnership began.
Coates continues to forge meaningful partnerships with
Indigenous businesses, supporting employment opportunities
for Aboriginal and Torres Strait Islander people. With over
60 Indigenous businesses in its supply chain, revenue with
Indigenous businesses has grown approximately 40 per cent
from FY23 ($7.8 million for FY24).
Looking forward to FY25
Coates will continue to progress its ‘Innovate RAP 2.0’ and
provide opportunities for all employees to engage in community
and cultural awareness activities, including cultural immersions
“on country” experiences. Coates will also keep expanding the
opportunities for Indigenous partnerships in its supply chain and
customer pool.
WesTrac
In FY24 WesTrac successfully met the objectives outlined in their
Reflect Reconciliation Action Plan (RAP) and have submitted a
new Innovate RAP for endorsement by Reconciliation Australia.
A continued effort to promote reconciliation within its sphere
of influence by educating staff members, initiating Cultural
Competence training, recognising Reconciliation Week and
NAIDOC week, and enhancing employment outcomes for
First Nations people.
WesTrac NSW continued to donate to Deadly Science, to build
career pathways. In WA WesTrac continued to partner with
Nudge to provide employment opportunities for Indigenous
youth, designed to kickstart their careers and provide mentoring
and education. Additionally, continued involvement with the
Carey Bindjareb Program, which helps Aboriginal men from
the Bindjareb region who are currently engaged in the criminal
justice system to re-enter society with a viable career prospect.
This program offers nationally accredited industry-focused
training to Aboriginal men, while simultaneously reconnecting
them with their cultural roots and sense of identity.
Looking forward to FY25
WesTrac will commence with the celebration of NAIDOC
Week in July. For the remainder of FY25, WesTrac focus
will be on launching its Innovate Reconciliation Action Plan
and expanding the cultural competence training provided
to employees nationwide. WesTrac NSW will also explore
opportunities to partner with Career Trackers, an organisation
that supports pre-professional Indigenous university students
by connecting them with employers for internships and ongoing
employment opportunities.
Boral
In FY24 Boral successfully completed its Innovate Reconciliation
Action Plan (RAP). The innovate RAP was based on the
three Reconciliation principles of Respect, Relationships
and Opportunities.
Boral launched its Cross-Cultural Awareness online program for
all staff, initial responses show an extremely positive evaluations
from its staff. Boral’s meeting room office spaces at major sites
also changed names to reflect Aboriginal peoples’ and cultures
to ensure Aboriginal history and culture remains front of mind for
its office based and visiting staff.
Boral celebrated Reconciliation Week and NAIDOC events at
many of its sites with the highlight being as a Corporate Sponsor
of NAIDOC activities in Townsville.
Boral has strong alliances with local sites and Aboriginal
communities at priority sites forming Aboriginal Heritage
Committees that meet regularly. This has been an extremely
positive experience for both Boral and the Aboriginal
communities in which Boral operates leading to some fantastic
outcomes including the handing back of the Aboriginal
significant Duneed Res in Geelong from Boral ownership to
Aboriginal community ownership in a nations first event.
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Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
Sustainability Report
Local Communities
We operate and serve our customers both in capital cities and in remote and regional areas across Australia.
Wherever we operate in local communities, our teams aim to be actively involved in those communities.
As an organisation, SGH’s commitment to making a positive contribution to all these communities is
resolute, and we have a proud history of providing assistance and support to communities across Australia,
particularly in times of need.
To be an engaged and constructive participant in the communities in which we operate
Looking forward to FY25
Key community engagement activities planned for FY25
will include:
–
Contributions to selected community events adjacent
to Boral’s operations;
–
Supporting Landcare groups;
–
Establish a habitat corridor at Berrima Cement Works
with other neighboring property owners; and
–
Supporting local primary schools within the communities
we operate.
Coates
During FY24, Coates intensified its commitment to community
involvement through the Coates Foundation, raising over
$600,000 for charity partners and local communities. Coates’
dedication extended to enhancing the Coates Volunteering
Program, offering diverse opportunities for employees to
contribute and give back to the communities in which it operate,
resulting over 2,000 volunteering hours, a 200 per cent increase
on last year.
Continuing support for Mission Australia, Coates helped their
Christmas Appeal by donating 140 hampers to families in need
and organised a PINK concert ticket raffle, generating crucial
funds. Furthermore, Coates provided equipment donations
of $75,000 to the Humpty Dumpty Foundation, supporting
their Balmoral Burn event and donating a further $25,000 in
paediatric medical care nationwide.
Participation in Telethon helped raise $77,467,775 for ill children
in Western Australia and strengthened Coates partnership with
TIACS (This is a Conversation Starter) to promote improved
access to mental health counselling for blue-collar workers
and their communities.
Through strategic sponsorships with NRL, Coates Talent
League, Newcastle Jets FC, Perth Glory Liberty A-League,
and Supercars, including support for Indigenous Round,
Coates engaged regional communities and supported women
and youth. Emily van Egmond, Coates Ambassador and Matilda,
inspired audiences during the 2023 Women’s World Cup, and
her active promotion of what women in construction can learn
from women in sport has been felt across the industry.
In FY24, Coates initiated a two-year partnership with the Perth
Wildcats, supporting aspiring athletes and fostering basketball’s
growth. Additionally, Coates, like WesTrac supported the
Channel 7’s ‘Dream Home’ renovation series and was the
equipment supplier during the series.
Looking forward to FY25
Coates plan to expand its Volunteering Program with Mission
Australia and Foodbank Victoria, offering more opportunities
for employees to contribute. Coates will also participate in
Homelessness Week 2024 fundraising activities to support
Mission Australia’s initiatives and continue to support positive
mental health through RUOK? Day and the TIACS partnership.
WesTrac
WesTrac’s focus on community remains closely tied to the local
communities and organisations connected with its facilities.
In FY24, WesTrac continued to support these communities
through participation and donations both in time and money.
In WA, WesTrac team members participated in the MACA200
Ride for Cancer, raising ~$160,000 – surpassing last year’s
contribution. WesTrac also donated $50,000 during Telethon
Weekend, with team members volunteering at the call centre.
Additionally, the WesTrac Newman Branch was involved in the
McGrath Foundation Cricket Match in Newman, with team
members participating and donating prizes.
In NSW, WesTrac Tomago hosted multiple school groups as
part of the school outreach program. Students learnt about
WesTrac’s trade institute and how the role of coding and robotics
in their education may also assist their future employment.
NSW also participated in numerous customer’s mine open
days, fostering connections between customers, employees’
friends and families and giving back to the communities in which
WesTrac and its customers operate. WesTrac also supported
the Hunter Breast Cancer Foundation. Additionally, WesTrac
provided key equipment and supplies for Channel 7’s ‘Dream
Home’ renovation series, which assisted six struggling couples
across Victoria, New South Wales, and Queensland in their
time of need.
Looking forward to FY25
WesTrac will continue to support local charities in the
communities it operates, including continuing contributions to
the Telethon Weekend. WesTrac will also be partnering with
Telethon at the Perth Tradie Expo, donating $5,000 for every
new machine purchased over the weekend. WesTrac will further
be partnering with Black Dog Institute, donating $50 for every
feedback survey that construction industry customers complete
after the purchase of a new machine.
Boral
One of Boral’s stated objectives is to take a socially responsible
approach to all of its activities. Boral recognises the importance
of effective stakeholder engagement and communication
between each of its operations and the stakeholders associated
with them.
Boral uses a risk-based approach in determining its community
activities, taking into account a range of social, geographical,
environmental and legislative considerations. A profile is
constructed for each site which then forms the basis of a
community plan tailored to the site’s context.
Over the past 12 months, through its community investment
and partnership framework, Boral has contributed to several
important community led organisations and initiatives including
equipment for Bungonia Rural Fire Service, restoration and
ongoing upkeep of Berrima Remembrance Grove project,
donations of koala fodder to Australia Zoo, sponsorship
of Seaham junior netball club and Townsville NAIDOC
week celebrations.
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SGH Annual Report 2024
32
Boral Marulan Limestone Mine, Marulan NSW
Our people are our strength. We take pride in the
unwavering dedication and commitment of our frontline
workforce, who consistently strive to provide exceptional
value and outstanding service to our customers.
Commitment
People
Safety Performance
Visible leadership is the cornerstone of strong safety performance,
driving continuous improvements and measurable outcomes that ensure
a secure and thriving environment for all.
The full incorporation of Boral into our safety accountability and reporting
framework this year, together with a number of targeted safety improvement
initiatives, including a “Back to Basics” program and increased focus on visible
leadership, has delivered significant improvements in our safety performance
results. Boral’s Total Reportable Injury Frequency Rate (TRIFR) 4.5 and
Lost Time Injury Frequency Rate (LTIFR) 2.2 improved by 38 per cent and
27 per cent respectively, supporting an overall year on year improvement of
26 per cent in SGH’s overall TRFIR and LTIFR of 4.5 and 1.4 respectively.
Whilst these results are pleasing, and validation that our prioritised approach
to Safety is converting into improved results, there is still much more to be
done to achieve ongoing improvements including reduction in injury severity
and frequency.
WesTrac’s Safety for Front Line Leaders program has been aligned with
new leader induction, highlighting their role in leading a safety culture across
all sites. A personal “buddy” program is in place for the first three months
of employment to promote and integrate new starters with the high safety
standards expected from each task delivered. A trial program to commence
in Q1 FY25, will increase our use of live safety data using Wearable Sensor
Technology to identify solutions to reduce workplace musculoskeletal and
manual handling related injuries.
At Boral, visible leadership and a safety-led culture remain a key focus.
A new Dust Management Program and dust monitoring controls across
high-risk product lines has been introduced. The program focuses
on improving site reporting with Dust Management Plan Declarations,
Site Inspections, Program Training and personal protection
equipment compliance.
Coates has consistently focused on reducing injuries through a program
of task-based safety education as well as operational leadership being present
and visible, observing operations and interacting with team members to reinforce
safety behaviours. A focus on risk management framework training, top 10 critical
risks and induction enhancements has ensured a preventative safety culture.
Safety First Culture initiatives delivering safety
improvements and performance outcomes.
Safety First Culture
SGH is focused on delivering a differentiated customer experience and the
safety of our people is a key priority when delivering value for our customers
and shareholders. Our leadership and organisational values inculcate safety as
a key priority across all our businesses, with everyone responsible for playing
an active role in delivering on our Safety Critical Controls and Life Saving
Commitments. In addition, our multiple lead indicators such as safety audits,
hazard reporting and action closeouts and robust reporting framework, play an
important role in driving safe behaviours, preventing serious injury and ensuring
risk identification and mitigation. Deep dives and root cause analysis provide
meaningful insights into our continuous improvement processes. Regular
safety training for all employees, safety inspections, and audits to identify
and address potential hazards further enhance the safety framework and
compliance culture.
33
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Sustainability Report
Performance Review
Sustainability Report
People continued
TRIFR1
LTIFR2
FY23
FY24
FY23
FY24
WesTrac
5.0
5.2
0.4
0.3
Boral
7.2
4.5
3.0
2.2
Coates
5.1
4.1
1.7
1.0
SGH Total
6.1
4.5
1.9
1.4
1.
Total recordable injury frequency rate (TRIFR) = number of work-related recordable injuries per million hours worked.
2.
Lost time injury frequency rate (LTIFR) = number of work-related injuries that resulted in time lost from work per million hours worked.
Results for previous periods may be adjusted following post incident investigation and review.
^Boral is included from Jun ‘22
Rolling 12 Month TRIFR
Rolling 12 Month LTIFR
Focus on wellbeing and psychosocial safety
SGH’s Safety-First approach is comprehensive and leader-led,
addressing both physical and psychosocial hazards and injury
prevention. Consistent with our messaging last year, SGH has
elevated its focus on the psychosocial safety and wellbeing of
our workforce. Ensuring compliance with the recently amended
work health safety laws, with a continued focus on the appropriate
identification and mitigation of psychosocial risks, and addressing
all forms of harassment in the workplace has been a key focus
of our leaders across all of our business units. Businesses have
updated risk registers, hazard identification and key controls to
address key psychosocial risks in the workplace with ongoing
monitoring and effectiveness processes in place.
Further, to elevate engagement and workplace wellbeing,
a wide range of preventative health and wellbeing support
has been rolled out for our people through organisations
such as “This is a Conversation Starter” (TIACS), Mates in
Construction, R U OK?, and Employee Assistance Programs.
We also provide flexible working arrangements to support
staff with caring and other personal responsibilities and have
Mental Health First Aiders to support mental wellbeing and
workplace safety more generally.
Leading high performance teams with
an Owner’s Mindset.
SGH’s strong performance in FY24 and over the past few years
has been as result of SGH’s People Strategy that focusses
on leading high-performance teams with an Owner’s Mindset
and strong recognition culture. In addition to ensuring our
businesses are actively advancing towards creating a diverse,
equitable, and inclusive environment, SGH has made significant
progress in developing and promoting leaders from within and
expanding equity ownership across all levels of the workforce to
drive an Owner’s Mindset and allow employees to share in the
growth of the company. Pleasingly, participation in equity reward
programs increased by 40 per cent over the last three years,
with a further expansion of equity programs being rolled out
following the Boral acquisition, and to drive stronger retention
at WesTrac. Our employee share purchase plan has also been
delivered for three consecutive years with good take up rates
that will increase further as Boral comes on board following the
recent compulsory acquisition. The focus remains on ensuring
a differentiated people experience, characterised by career
development opportunities, training and development across
one of Australia’s leading industrial companies and workplace
environments that are diverse, and as a result, high performing
and highly engaging. Further details on our progress and
initiatives regarding Diversity, Equity and Inclusion (DE&I)
is set out below and in our Sustainability Report (refer page 27 of
this Annual Report).
Diversity, Equity and Inclusion
We continue to explore and implement targeted programs
and initiatives to promote a culture of equal opportunity
and inclusion across our workplaces. Through our sustained
focus on DE&I, FY24 saw an increase in overall female
participation from 17.2 per cent to 18.2 per cent, while there
was small decrease in the proportion of females in supervisory
and management from 18.7 per cent to 17.6 per cent (including
Boral). As part of our measurable diversity objectives, SGH’s
aspiration is to achieve 25 per cent female representation by
2025, while continually seeking ways to further our progress
in fostering a diverse and inclusive workplace for our
approximately 11,000 employees. There are multiple initiatives
in place to achieve this aspiration, ranging from grassroots
programs (such as increasing the number of females in our
apprenticeship programs) to the active development and
promotion of women into senior leadership roles.
Coates’ efforts in advancing gender equality were recognised
through winning the NSW National Association of Women
In Construction (NAWIC) Crystal Vision Award and being a
finalist in the equivalent national award for advancing career
progression and promoting participation of an women in the
construction industry.
WesTrac has introduced gender decoder in all job
advertisements that is resulting in higher volumes of females
in short-lists and assessment centres. A Male Allies Program
Safety is a shared responsibility, where each employee plays a crucial role in fostering a safe and secure workplace
SGH Annual Report 2024
34
People continued
highlighting the role men play in promoting gender balance has
been rolled out at WesTrac which includes sharing the female
work experience and challenging norms, that may be preventing
an improved work environment for a diverse employee base.
We have established tailored programs to cultivate the
pipeline of female leaders, such as the Leadership Excellence
and Performance (LEAP) program at Coates and the Women
Rising program at WesTrac, which is offered to high potential
and junior female leaders in a mix of formats to ensure they
have accessibility to business mentors and coaching to
support their career journey.
Boral launched a Women’s Driving Academy, providing targeted
training and a defined career pathway for inexperienced
candidates from non-traditional sourcing channels. This is in
addition to a new Women Leading Program being launched in
September, that will include 20 female emerging Boral leaders
and develop their cross-business leadership capabilities for
future leadership roles.
Gender pay equity remains a focal point, we continue to conduct
annual gender pay reviews to identify and address discrepancies
in base pay for comparable roles. Additionally, thorough analysis
of pay rates across job families and levels, informs adjustments
to our remuneration framework to uphold gender pay parity.
All our businesses have formalised flexible working policies
accessible to all employees. We have also conducted capability
sessions for managers to equip them with the skills needed
to facilitate discussions around flexible work arrangements.
While accommodating flexible work options for our site-based
employees presents challenges, we continuously explore
solutions such as flexible rostering, adjusted working hours,
different work patterns, and job sharing to accommodate their
family, caregiving, or other responsibilities. Boral is expanding
flexibility options in FY25, with a focus on role design to enable
increased female participation. This work will see great flexibility
in hours and job share arrangements. WesTrac has formalised
Job Sharing programs in FY24 along with a Return to Full Time
program which has been used by employees returning from
parental leave and longer-term sick leave.
Participation, reconciliation, and community engagement with
First Nations are integral to our mission. All businesses actively
participate in community initiatives. Boral was a platinum
sponsor of Townsville NAIDOC week celebrations and has
established alliances with Aboriginal Heritage Communities
which saw the handing back of Duneed Reserve in Geelong
to Aboriginal community ownership.
WesTrac’s involvement in the Carey Bindjareb Program
continued in FY24. The program helps indigenous men
engaged in the criminal justice system re-enter society with
career opportunities. In addition, and through the Indigenous
Nudge program, WesTrac has employed 3 trainees into its
West Australian operations.
As part of Coates’ partnership with Clontarf, staff have
participated in over 20 employment forums, hosted work
experience events with 15 Clontarf graduates being employed
by Coates. Work has also progressed in building partnerships
with Indigenous businesses with approximately 60 businesses
now in our supplier network.
Talent retention in a tight labour market.
The challenge of attracting and retaining key talent in a
tight labour market has emphasised the focus on our talent
succession, development, engagement and reward programs.
To supplement our workforce, we’ve tapped into global talent
pools, attracting over 140 international labour candidates over
the past year. We have also strategically managed our workforce
and resource allocation, looking at the current and future supply
and demand channels to inform our recruitment, training and
skills development programs. Initiatives include identification of
transferable skills and actively deploying staff into new hybrid
roles that offer career variability whilst filling key skills gaps.
Our attraction and reward strategies, including referrals,
recognition and incentives, have also proven effective attracting
and retaining talent, despite ongoing market competition.
Capability and Training
Our commitment to maintaining industry leading capabilities
and a highly skilled workforce, with attractive career growth
and development opportunities, remains a critical component
of our People Strategy and employee value proposition.
We continue to invest in training and development, including
operational, sales leadership, and technical training.
Leadership development and succession planning is an
important element of our talent management and capability
development framework. Internally promoting talent provides
career longevity with SGH, whilst preserving critical knowledge
and experience within SGH. A number of senior appointments
were filled internally in FY24 and development plans put in place
for future talent, including future female leadership programs and
appointments. Further details on Training and Employment are
set out in our Sustainability Report, including initiatives planned
for FY25 (refer to page 29 to 30 of this Annual Report).
Level
Number of
Women
Proportion of
Women1
Board
3 of 9
33.3%
Senior Managers/
Managers2
188 of 1,066
17.6%
Whole of organisation
1,917 of 10,558
18.2%
2024
Level
Number of
Women
Proportion of
Women
Board
3 of 9
33.3%
Senior Managers/
Managers
199 of 1,064
18.7%
Whole of organisation
1,791 of 10,407
17.2%
20233
1. Diversity numbers based on information reported to WGEA as of
31 March 2024.
2. Senior Managers/Managers includes Executive Directors of SGH as well
as other Managers as defined by WGEA.
3. 2023 restated to include Boral.
35
Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
Sustainability Report
Governance
The Board of Directors maintains oversight of climate and
sustainability matters, including impact on our strategy, risk
identification and management, and external reporting.
The Audit & Risk Committee (ARC) is responsible for satisfying
itself that a sound system of risk oversight and management
exists, and that internal controls are effective, in relation to
climate change risks.
Management is responsible for reviewing and monitoring,
and reporting to the Board on, matters including:
–
SGH’s performance in relation to sustainability and
climate-related matters, assessed by reference to agreed
targets and measures;
–
the effectiveness of SGH’s policies, systems and governance
structure in identifying and managing sustainability and
climate-related risks that are material to SGH;
–
the coordination and review of climate-related risks,
strategy, and reporting;
–
the development of targets and implementation of initiatives
regarding SGH’s material sustainability issues, including
emissions reduction;
–
the policies and systems for ensuring compliance with
applicable legal and regulatory requirements associated
with sustainability and climate-related matters; and
–
SGH’s reporting regarding sustainability and
climate-related matters.
In performing the above role and reporting to the Board of
Directors, management is supported by the internal Boards
of our operating businesses, which are comprised primarily of
members of SGH Executive Management team. Each operating
business Board is responsible for satisfying itself that a sound
system of risk oversight and management exists, and that
internal controls are effective, in relation to risks including climate
change risks. These Boards meet six times a year and receive
annual reports on business-wide risks.
Strategy
SGH’s operating model and diverse portfolio allows us to
be flexible and agile to redeploy assets as markets change,
to mitigate and manage our exposure to climate risks,
and to maximise any business opportunities that climate
change presents.
As part of SGH’s annual strategic planning process, each
business reviews and renews its assessment of business
risks including the potential impacts of climate change on
its business. At the SGH level, an exercise is undertaken
that includes a consideration of potential technological
and regulatory changes on our portfolio of businesses
and investments, also includes the identification of potential
future opportunities for these operations.
WesTrac and Coates have undertaken economic modelling of
carbon price scenarios in FY23. The exercise tested scenarios
where various levels of carbon price were imposed on a
widespread basis.
Each business estimated its upstream emissions, its carbon
intensity versus competitors, end-user elasticity to switch to
alternative products, and likely timing for introduction of low
and no-emissions products. The carbon price scenario
modelling exercises concluded that both businesses were
resilient to carbon price risk in the medium and long-term as
long as they remained towards the forefront of anticipated
technological developments in their sectors.
Boral completed a Taskforce on Climate-related Financial
Disclosures (TCFD) scenario analysis which was fully detailed
in Boral’s Sustainability Report 2021 and Sustainability Report
2022. Five climate hazards were selected for in-depth analysis
being bushfires, heatwaves, drought and water stress, number
of rainy days and heavy precipitation and riverine flooding.
The results of the scenario analysis indicate that three out of the
five hazards show a change that may result in increased risk
for Boral: heat stress, drought and water stress and bushfires.
However only two hazards, drought and water stress, and
bushfires, were identified as having the potential to have a
significant adverse financial impact for each climate indicator.
Following this, Boral commenced an all-of business review of
bushfire and extreme weather hazards, including flooding and
inundation, across it’s sites.
Emissions and Climate Change –
TCFD Disclosure
In this section, SGH reports in line with TCFD recommendations under the headings of Governance, Strategy,
Risk Management, Metrics and Targets.
Caterpillar 793F Arizona Proving Ground, AZ
SGH Annual Report 2024
36
Metrics
and Targets
Risk Management
Strategy
Governance
Core Elements of Recommended
Climate-Related Financial Disclosures
Governance
The organisation’s governance around
climate‑related risks and opportunities.
Metrics and Targets
The metrics and targets used to assess and manage
relevant climate‑related risks and opportunities.
Risk Management
The processes used by the organisation to identify,
assess, and manage climate‑related risks.
Strategy
The actual and potential impacts of climate-related risks
and opportunities on the organisation’s businesses,
strategy, and financial planning.
Risk Management
SGH’s overall approach to risk management is described in the
Corporate Governance Statement of this Annual Report.
Climate-related risks are factored into our risk management
approach as one of many fundamental source categories of
risk alongside technological, operational, regulatory, social and
geopolitical. We continued in FY24 the practice introduced in
FY21 of using the TCFD classification of climate-related risks to
ensure comprehensiveness in our approach to this source of risk.
Metrics and Targets
SGH accepts the Intergovernmental Panel on Climate Change
assessment of the science related to climate change and play
our role in each of our sectors in meeting the Paris Agreement’s
goal to limit global temperature rises to well below 2°C by the
end of this century.
With the finalisation of the Boral acquisition on 4 July 2024,
this Annual Report now includes data and initiatives on Boral’s
decarbonisation journey for the first time. We are in the process
of assessing and realigning our targets based on this inclusion
while considering the available decarbonisation pathways and
the anticipated changes that are now being considered by
the Federal Government as it relates to climate change and
sustainability reporting requirements. We will provide a further
update on these targets in early FY25.
Physical climate risks: Exposure assessment
In FY22, SGH worked closely with Katestone, a leading
meteorological advisory provider, to understand the extent to
which our operating locations might be subject to increased
hazards from future weather events related to physical
climate change.
The study applied climate modelling of the worst-case RCP
8.5 scenario through to 2050 across the 12 Australian regions
that Coates and WesTrac operate in.
Four climate-related hazards were modelled in each region:
extreme heat; extreme rainfall/flooding; bushfire; and cyclones.
Trigger parameters for each hazard were defined that are
relevant and appropriate for WesTrac and Coates’ businesses
The study found, amongst other things, that over the
projected period:
–
7 of our 12 regions will experience significant rises of
50 per cent or more in extreme rainfall events;
–
5 of our 12 regions will experience significant rises of
50 per cent or more in bushfire hazards; and
–
2 of our 12 regions will experience significant rises of
50 per cent or more in extreme heat events.
These results are now being used in each business to guide
further analysis of exposure and vulnerability at sites with
material exposure to increased hazard prevalence. The insights
will be used as inputs into our businesses’ operational decisions
and into their planning and risk processes
Scheduled Oil Sampling laboratory, Tomago NSW
37
Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
Sustainability Report
Data tables
Work-Related Injuries
WesTrac
FY22
FY23
FY24
Workers covered by OHS management system1
100% of 3,947 employees
100% of 4,449 employees
100% of 4,373 employees
Lost time injuries
1†
4†
3†
Lost time injury frequency rate2,5
0.10†
0.41†
0.3†
Recordable injuries3,5
67†
47†
51†
Recordable injuries frequency rate2,5
6.97†
5.00
5.20†
Fatalities
–†
–†
–†
Cases of work-related ill health4
198
83
120
Exposure hours
9,616,577†
9,669,235†
9,861,427†
Note: these measures align to GRI 403–9 a) i, iii, iv, v (2018).
1.
OHS management system covers all employees as identified in the table above as well as all contractors that supplement the workforce on company
locations under direct supervision.
2.
Rates have been calculated based on 1,000,000 hours worked. Rates include both employees and contractors.
3. The main types of recordable work–related injury are: body stressing, falls, trips, slips and hitting objects with parts of body.
4. Workers’ compensation claims lodged during the period.
5. During the period, contractors comprised 0% of Lost Time Injuries and 9.8% of Total Reportable Injuries at WesTrac. The contractor Lost Time Injury
Frequency Rate for FY24 was 1.0 and the contractor Total Recordable Injury Frequency Rate was 5.53.
† Bureau Veritas–assured metric.
Boral
FY22
FY23
FY24
Workers covered by OHS management system1
100% of 7,995 employees
and contractors
100% of 7,920 employees
and contractors
100% of 7,432 employees
and contractors
Lost time injuries
60
47
33†
Lost time injury frequency rate2,5
4.08
3.04
2.24†
Recordable injuries3,5
195
112
66†
Recordable injuries frequency rate2,5
13.25
7.24
4.47†
Fatalities
–
–
–†
Cases of work-related ill health4
–
–
300
Exposure hours
14,720,126
15,465,442
14,759,552†
Note: these measures align to GRI 403–9 a) i, iii, iv, v (2018).
1.
OHS management system covers all employees as identified in the table above as well as all contractors that supplement the workforce on company
locations under direct supervision.
2.
Rates have been calculated based on 1,000,000 hours worked. Rates include both employees and contractors.
3. The main types of recordable work–related injury are: body stressing, and slips, trips and falls.
4. Workers compensation claims lodged during the period.
5. During the period, contractors comprised 24% of Lost Time Injuries and 29% of Total Reportable Injuries at Boral. The contractor Lost Time Injury Frequency
Rate for FY24 was 1.52 and the contractor Total Recordable Injury Frequency Rate was 3.62.
† Bureau Veritas–assured metric.
Coates
FY22
FY23
FY24
Workers covered by OHS management system1
100% of 1,947 employees
100% of 2,098 employees
100% of 1,926 employees
Lost time injuries
15†
10†
6†
Lost time injury frequency rate2,5
2.82†
1.71†
1.00†
Recordable injuries3,5
46†
30†
24†
Recordable injuries frequency rate2,5
8.64†
5.12†
4.10†
Fatalities
–†
–†
–†
Cases of work-related ill health4
99
61
42
Exposure hours
5,325,313†
5,857,132†
5,832,483†
Note: these measures align to GRI 403–9 a) i, iii, iv, v (2018).
1.
OHS management system covers all employees as identified in the table above as well as all contractors that supplement the workforce on company
locations under direct supervision.
2.
Rates have been calculated based on 1,000,000 hours worked. Rates include both employees and contractors.
3. The main types of recordable work–related injury are: body stressing, falls, trips, slips and hitting objects with a part of body.
4. Workers compensation claims lodged during the period.
5. During the period, contractors comprised 67% of Lost Time Injuries and 50% of Total Reportable Injuries at Coates. The contractor Lost Time Injury
Frequency Rate for FY24 was 2.06 and the contractor Total Recordable Injury Frequency Rate was 6.18.
† Bureau Veritas–assured metric.
SGH Annual Report 2024
38
Diversity
WesTrac
FY22†
FY23†
FY24†
Ratio of basic salary and
remuneration of women to men
Basic salary 88.2%^
Remuneration 71.0%
Basic salary 85.9%
Remuneration 70.1%
Basic salary 84.7%
Remuneration 70.9%
Ratio for managers1
Basic salary 90.4%
Remuneration 81.8%
Basic salary 87.7%
Remuneration 81.2%
Basic salary 87.2%
Remuneration 84.3%
Ratio for non–managers
Basic salary 85.4%^
Remuneration 68.0%
Basic salary 85.5%
Remuneration 68.7%
Basic salary 84.4%
Remuneration 69.4%
Ratio for metro2
Basic salary 88.0%^
Remuneration 75.9%
Basic salary 87.9%
Remuneration 72.7%
Basic salary 86.8%
Remuneration 73.3%
Ratio for regional
Basic salary 86.3%
Remuneration 65.7%
Basic salary 79.8%
Remuneration 66.8%
Basic salary 79.1%
Remuneration 67.8%
Percentage of workforce who are women
16.4%
18.8%
20.3%
% for managers
18.1%
18.6%
19.9%
% for non–managers
16.2%
18.8%
20.4%
Note: these measures align to GRI 405-2 (2016).
1. Manager in line with Workplace and Gender Equality Agency (WGEA) definition.
2. Metro is defined as the greater metropolitan areas of State capital cities, with Regional being all other areas.
^ Restated comparative.
† Bureau Veritas–assured metric.
The above tables include all employees within the operating businesses, with the majority in the non-manager, metro and regional categories employed under
Enterprise/Collective Agreements, which do not always provide a direct opportunity to address gender pay gaps from a Basic salary perspective. In addition,
the payment of overtime for technical and trade roles, which tend to have a high representation of males, also has an impact on the Remuneration ratios in the
non‑manager, metro and regional categories.
Boral
FY22
FY23
FY24†
Ratio of basic salary and
remuneration of women to men
Basic salary 102.8%
Remuneration 88.2%
Basic salary 101.5%
Remuneration 87.9%
Basic salary 101.3%
Remuneration 84.9%
Ratio for managers1
Basic salary 103.4%
Remuneration 101.8%
Basic salary 107.0%
Remuneration 106.7%
Basic salary 105.8%
Remuneration 99.4%
Ratio for non–managers
Basic salary 102.0%
Remuneration 84.8%
Basic salary 100.0%
Remuneration 84.4%
Basic salary 101.7%
Remuneration 83.1%
Ratio for metro2
Basic salary 96.7%
Remuneration 84.7%
Basic salary 101.1%
Remuneration 86.3%
Basic salary 100.3%
Remuneration 82.7%
Ratio for regional
Basic salary 100.5%
Remuneration 88.4%
Basic salary 86.2%
Remuneration 80.3%
Basic salary 91.3%
Remuneration 82.1%
Percentage of workforce who are women
14.9%
14.5%
15.0%
% for managers
14.8%
13.9%
13.0%
% for non–managers
14.1%
14.6%
15.3%
Note: these measures align to GRI 405-2 (2016).
1. Manager in line with Workplace and Gender Equality Agency (WGEA) definition.
2. Metro is defined as the greater metropolitan areas of State capital cities, with Regional being all other areas.
† Bureau Veritas–assured metric.
The above tables include all employees within the operating businesses, with the majority in the non-manager, metro and regional categories employed under
Enterprise/Collective Agreements, which do not always provide a direct opportunity to address gender pay gaps from a Basic salary perspective. In addition,
the payment of overtime for technical and trade roles, which tend to have a high representation of males, also has an impact on the Remuneration ratios in the
non‑manager, metro and regional categories.
39
Directors’ Report
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Our Businesses
Sustainability Report
Performance Review
Sustainability Report
Coates
FY22†
FY23†
FY24†
Ratio of basic salary and
remuneration of women to men
Basic salary 100.7%
Remuneration 89.2%
Basic salary 103.3%
Remuneration 85.4%
Basic salary 102.7%
Remuneration 84.5%
Ratio for managers1
Basic salary 101.3%
Remuneration 107.3%
Basic salary 94.3%
Remuneration 89.0%
Basic salary 92.9%
Remuneration 89.0%
Ratio for non–managers
Basic salary 103.5%
Remuneration 83.8%
Basic salary 106.5%
Remuneration 84.4%
Basic salary 106.3%
Remuneration 82.7%
Ratio for metro2
Basic salary 98.6%
Remuneration 93.5%
Basic salary 101.6
Remuneration 88.0%
Basic salary 100.4%
Remuneration 86.6%
Ratio for regional
Basic salary 97.5%
Remuneration 79.0%
Basic salary 99.0%
Remuneration 77.1%
Basic salary 101.2%
Remuneration 77.1%
Percentage of workforce who are women
20.0%
21.8%
23.4%
% for managers
10.5%
15.1%
17.3%
% for non–managers
21.5%
22.4%
23.7%
Note: these measures align to GRI 405-2 (2016).
1.
Manager in line with Workplace and Gender Equality Agency (WGEA) definition.
2.
Metro is defined as the greater metropolitan areas of State capital cities, with Regional being all other areas.
† Bureau Veritas–assured metric.
The above tables include all employees within the operating businesses, with the majority in the non-manager, metro and regional categories employed under
Enterprise/Collective Agreements, which do not always provide a direct opportunity to address gender pay gaps from a Basic salary perspective. In addition,
the payment of overtime for technical and trade roles, which tend to have a high representation of males, also has an impact on the Remuneration ratios in the
non‑manager, metro and regional categories.
Employment
WesTrac
FY22†
FY23†
FY24†
New
Employee
Hires
Terminations3
New
Employee
Hires
Terminations3
New
Employee
Hires
Terminations3
Number
1,060
869
1,348
1,057
1,141
952
Rate
27.4%
22.5%
32.8%
25.7%
26.6%
22.2%
Male – Number
777
694
985
848
811
726
Male – Rate
24.7%
22.0%
29.3%
25.2%
23.5%
21.0%
Female – Number
274
174
354
209
328
223
Female – Rate
44.6%
28.3%
48.2%
28.4%
39.2%
26.7%
Metro2 – Number
677
511
1,025
735
795
615
Metro – Rate
32.3%
24.4%
36.0%
25.8%
29.2%
22.6%
Regional – Number
383
358
323
322
346
337
Regional – Rate
21.6%
20.2%
25.6%
25.6%
22.1%
21.5%
<30 years old – Number
426
241
545
293
466
298
<30 years old – Rate
48.6%
27.5%
55.6%
29.9%
44.6%
28.5%
30–50 years old – Number
537
499
653
601
586
534
30–50 years old – Rate
23.4%
21.7%
27.5%
25.3%
24.0%
21.8%
>50 years old – Number
97
129
150
163
89
120
>50 years old – Rate
14.0%
18.6%
20.0%
21.7%
11.1%
14.9%
Note: these measures align to GRI 401-1 (2016).
1.
All new hire and termination rates have been calculated based on an average headcount over the reporting period for the relevant population.
2.
Metro is defined as the greater metropolitan areas of State capital cities, with Regional being all other areas.
3. Termination numbers and rates include turnover of fixed-term employees and contractors.
† Bureau Veritas–assured metric.
Data Tables continued
SGH Annual Report 2024
40
Employment (continued)
Boral
FY22
FY23
FY24†
New
Employee
Hires
Terminations3
New
Employee
Hires
Terminations3
New
Employee
Hires
Terminations3
Number
989
1,161
1,134
1,192
1,025
1,210
Rate
21.6%
25.4%
24.5%
26.1%
22.0%
25.9%
Male – Number
787
932
899
944
806
1000
Male – Rate
20.2%
23.9%
22.7%
23.8%
20.1%
25.0%
Female – Number
202
229
235
248
219
210
Female – Rate
30.2%
34.3%
35.5%
37.5%
33.1%
31.8%
Metro2 – Number
604
765
709
759
628
762
Metro – Rate
22.2%
28.1%
25.5%
27.3%
22.1%
26.9%
Regional – Number
385
396
425
433
397
448
Regional – Rate
20.8%
21.4%
23.0%
23.5%
21.7%
24.4%
<30 years old – Number
268
199
296
204
247
213
<30 years old – Rate
50.1%
37.2%
50.6%
34.9%
40.8%
35.2%
30–50 years old – Number
512
574
583
583
560
626
30–50 years old – Rate
23.1%
25.9%
26.1%
26.1%
24.8%
27.7%
>50 years old – Number
209
388
255
405
218
371
>50 years old – Rate
11.5%
21.3%
14.2%
22.5%
12.1%
20.6%
Note: these measures align to GRI 401-1 (2016).
1.
All new hire and termination rates have been calculated based on an average headcount over the reporting period for the relevant population.
2.
Metro is defined as the greater metropolitan areas of State capital cities, with Regional being all other areas.
3. Termination numbers and rates include turnover of fixed-term employees and contractors.
4. Boral’s subsidiary named DMG is excluded from diversity data.
† Bureau Veritas–assured metric.
Coates
FY22†
FY23†
FY24†
New
Employee
Hires
Terminations3
New
Employee
Hires
Terminations3
New
Employee
Hires
Terminations3
Number
481
545
671
534
364
534
Rate
24.8%
28.1%
32.8%
26.1%
18.4%
26.9%
Male – Number
337
411
466
408
251
418
Male – Rate
21.6%
26.4%
29.2%
25.6%
16.4%
27.3%
Female – Number
144
134
205
126
113
116
Female – Rate
38.2%
35.5%
47.5%
29.2%
25.1%
25.7%
Metro2 – Number
275
312
423
320
219
303
Metro – Rate
23.6%
26.7%
33.8%
25.6%
18.0%
24.9%
Regional – Number
206
233
248
214
145
231
Regional – Rate
26.6%
30.1%
31.2%
26.9%
19.0%
30.3%
<30 years old – Number
146
101
194
111
99
102
<30 years old – Rate
57.5%
39.8%
67.1%
38.4%
36.3%
37.4%
30–50 years old – Number
263
291
362
280
199
287
30–50 years old – Rate
24.9%
27.6%
32.8%
25.4%
18.5%
26.7%
>50 years old – Number
72
153
115
143
66
145
>50 years old – Rate
11.4%
24.2%
17.6%
21.9%
10.4%
22.9%
Note: these measures align to GRI 401-1 (2016).
1.
All new hire and termination rates have been calculated based on an average headcount over the reporting period for the relevant population.
2.
Metro is defined as the greater metropolitan areas of State capital cities, with Regional being all other areas.
3. Termination numbers and rates include turnover of fixed-term employees and contractors.
† Bureau Veritas–assured metric.
41
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Sustainability Report
Emissions & Energy
WesTrac
FY222
FY232,3
FY241†
Scope 1 emissions (t CO2e)
9,417
9,599
10,483
Scope 2 emissions (t CO2e)
16,961
14,321
15,115
Total Scope 1 and 2 emissions (t CO2e)
26,378
23,920
25,598
Energy consumed (GJ)
222,360
221,312
238,165
Note: these metrics align to GRI 305-1a, 305-2a and 302-1e (2016) and the National Greenhouse and Energy Reporting Act 2007.
1.
FY24 includes a small amount of estimated data due to the timing of this report. Figures will be finalised prior to submission to the Clean Energy Regulator.
Changes are not expected to have a material impact.
2.
FY22 and FY23 Scope 1 numbers have been restated upward due to data methodology improvement made during FY24 estimation process.
3.
FY23 data has been updated to include full 12months of data aligned to Clean Energy Regulator submission.
† Bureau Veritas–assured metric.
Boral
FY222
FY232
FY241†
Scope 1 emissions (t CO2e)3
1,357,936
1,343,807
1,278,488
Scope 2 emissions (t CO2e)
282,767
273,828
259,519
Total Scope 1 and 2 emissions (t CO2e)
1,640,703
1,617,635
1,538,007
Energy consumed (GJ)
10,134,964
10,484,781
10,145,049
Note: these metrics align to GRI 305-1a, 305-2a and 302-1e (2016) and the National Greenhouse and Energy Reporting Act 2007.
1.
FY24 includes a small amount of estimated data due to the timing of this report. Figures will be finalised prior to submission to the Clean Energy Regulator.
Changes are not expected to have a material impact.
2.
FY22 Scope 1 numbers have been restated upward due to data methodology improvement made during FY24 estimation process.
3.
Historical Scope 1 emissions are restated to ensure diesel use associated with contractors under Boral’s operational control is now consistently applied.
† Bureau Veritas–assured metric.
Coates
FY222
FY232,3†
FY241†
Scope 1 emissions (t CO2e)
12,300
12,713
11,965
Scope 2 emissions (t CO2e)
5,750
4,736
4,135
Total Scope 1 and 2 emissions (t CO2e)
18,050
17,449
16,100
Energy consumed (GJ)
209,567
214,078
200,337
Note: these metrics align to GRI 305-1a, 305-2a and 302-1e (2016) and the National Greenhouse and Energy Reporting Act 2007.
1.
FY24 includes a small amount of estimated data due to the timing of this report. Figures will be finalised prior to submission to the Clean Energy Regulator.
Changes are not expected to have a material impact.
2.
FY22 and FY23 Scope 1 numbers have been restated upward due to data methodology improvement made during FY24 estimation process.
3.
FY23 data has been updated to include full 12months of data aligned to Clean Energy Regulator submission.
† Bureau Veritas–assured metric.
Waste & Water
WesTrac
FY231†
FY241†
Total waste generated – non-hazardous (t)
11,884
11,606
Total waste generated – hazardous (t)
4,338
4,473
Total waste generated (t)
16,272
16,079
Total waste diverted from disposal – non-hazardous (t)
8,418
8,119
Total waste diverted from disposal – hazardous (t)
3,497
3,554
Total waste diverted from disposal (t)
11,915
11,673
% waste diverted from disposal – non-hazardous
71%
70%
% waste diverted from disposal – hazardous
80%
79%
% waste diverted from disposal
73%
73%
Total water withdrawn from municipal water suppliers and utilities (ML)
91.8
101.3
Total water withdrawn from other sources (ML)
12.4
13.3
Total water withdrawn (ML)
104.2
114.6
Note: these metrics align to GRI 306–3, 306–4a and 303-5a (2018). Estimates have been used for some categories and time periods.
As we move to more continuous data collection, the use of such estimates is expected to decline and the basis for estimates is expected to improve.
1.
Data has been compiled from waste transfer notes from WesTrac’s main contracted waste collector, as well as specifically sourced data for additional waste
relating to e-waste and metal.
2.
Prior years in some instances may have been updated to reflect changes in methodologies when collecting data. Changes do not have a material impact.
† Bureau Veritas–assured metric.
Data Tables continued
SGH Annual Report 2024
42
Boral
FY231
FY242,3†
Total waste generated – non-hazardous (t)
243,495
595,851
Total waste generated – hazardous (t)
2,586
2,236
Total waste generated (t)
246,080
598,086
Total waste diverted from disposal – non-hazardous (t)
239,833
591,558
Total waste diverted from disposal – hazardous (t)
2,557
2,217
Total waste diverted from disposal (t)
242,390
593,775
% waste diverted from disposal – non-hazardous
99%
100%
% waste diverted from disposal – hazardous
99%
99%
% waste diverted from disposal
99%
99%
Total water withdrawn from municipal water suppliers and utilities (GL)
1.2
1.1
Total water withdrawn from other sources (GL)
–
0.3
Total water withdrawn (GL)
1.2
1.4
1. Historical data restated to include recycling of operational concrete waste.
2. Reported data includes some estimations and minor exclusions due to data availability, which do not materially impact the disclosure.
3. Non-hazardous waste diverted from disposal excludes asphalt recycled at Boral’s asphalt plants, however includes asphalt recycled at Boral’s Widemere
Recycling Plant.
† Bureau Veritas–assured metric.
Coates
FY231,2,†
FY24†
Total waste generated – non-hazardous (t)
4,509
4,102
Total waste generated – hazardous (t)
1,229
1,282
Total waste generated (t)
5,738
5,384
Total waste diverted from disposal – non-hazardous (t)
2,443
2,071
Total waste diverted from disposal – hazardous (t)
1,082
1,024
Total waste diverted from disposal (t)
3,525
3,094
% waste diverted from disposal – non-hazardous
54%
50%
% waste diverted from disposal – hazardous
88%
80%
% waste diverted from disposal
61%
57%
Total water withdrawn from municipal water suppliers and utilities (ML)
89.1
97.2
Total water withdrawn from other sources (ML)
–
–
Total water withdrawn (ML)
89.1
97.2
Note: these metrics align to GRI 306-3, 306-4a (2020) and 303-3a (2018).
1.
Data has been compiled from waste transfer notes from Coates’ main contracted waste collector, as well as specifically sourced data for additional waste
relating to tyres, metal and plastic.
2.
Restated to include coverage of additional branches measurements.
3. Where exact numbers have are not available, ‘best estimates’ from the business have been used. The difference to actual data is not expected to be
material.
† Bureau Veritas–assured metric.
43
Directors’ Report
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Sustainability Report
INDEPENDENT ASSURANCE REPORT ON SGH’ SUSTAINABILITY METRICS DISCLOSURES
To the Directors of Seven Group Holdings (SGH)
Limited Assurance Conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the
selected sustainability metrics and other information, methods, assumptions and estimation uncertainty (“the Information”), within the scope of our limited
assurance engagement (as outlined below) included in SGH Annual Report 2024 (“the Report”) for the Australian Financial Year 2024, are not fairly
presented and not prepared, in all material respects, in accordance with the Reporting Criteria.
Scope of the Assurance Engagement
We have undertaken a limited assurance engagement over the Information pertaining to SGH group of companies including Coates Group Holdings Pty
Ltd (“Coates”), WesTrac Pty Ltd (“WesTrac”) and Boral Limited (“Boral”) for the period of 1st July 2023 to 30th June 2024.
The complete list of assured disclosures and associated reporting criteria is referred to within the table below and is presented in the Data Tables of the
Report.
Sustainability Metrics Subject to Limited Assurance
Reporting Criteria
Work-Related Injuries
GRI 403–9 a. i. iii. iv. v. (2018)
Ratio of Basic Salary and Remuneration of Women to Men
GRI 405-2 (2016)
New Employee Hires and Employee Turnover
GRI 401-1 (2016)
Energy Consumption within the Organisation
GRI 302-1 e. (2016) and the National Greenhouse and Energy Reporting Act 2007
Direct (Scope 1) GHG Emissions
GRI 305-1 a. (2016) and the National Greenhouse and Energy Reporting Act 2007
Energy Indirect (Scope 2) GHG Emissions
GRI 305-2 a. (2016) and the National Greenhouse and Energy Reporting Act 2007
Waste Generated and Waste Diverted from Disposal
GRI 306-3 (2020) and GRI 306-4 a. (2020)
Water Withdrawal
GRI 303-3 a. (2018)
Our assurance engagement does not extend to any other information included in the Report or information in respect of earlier periods. We have not
performed any procedures with respect to the excluded information and, therefore, no conclusion is expressed on it.
SGH’ Responsibilities
Management of SGH was responsible for:
-
Selecting and establishing suitable criteria for preparing the Report and Information subject to our limited assurance.
-
Preparing and presenting the Report and Information subject to our limited assurance in accordance with the Reporting Criteria.
-
Designing, implementing and maintaining internal controls over the Information relevant to the preparation of the Report that is free from material
misstatement, whether due to fraud or error.
Our Responsibilities
Bureau Veritas was responsible for:
-
Planning and performing the engagement to obtain limited assurance about whether the Information included within the scope of assurance is
free from material misstatement, whether due to fraud or error.
-
Forming an independent conclusion, based on the procedures we have performed and the evidence we have obtained.
-
Reporting our conclusion to the Directors of SGH.
Bureau Veritas was not involved in the drafting of the Report and our independence has not been compromised.
Assurance Statement
SGH Annual Report 2024
44
Summary of Work Performed
Our limited assurance engagement was performed in accordance with the International Standard on Assurance Engagements (ISAE) 3000 Assurance
Engagements other than Audits or Reviews of Historical Financial Information issued by the International Auditing and Assurance Standards Board
(IAASB), and Bureau Veritas’ standard procedures and guidelines for external verification and assurance of ESG information and Sustainability Reports.
Our work was planned and executed in a manner designed to produce a limited level of assurance and to provide a sound basis for our conclusions. A
limited assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures,
including an understanding of internal control, and the procedures performed in response to the assessed risks.
The procedures we performed were based on our professional judgement and included enquiries, observation of processes performed, inspection of
documents, analytical procedures, evaluating the appropriateness of quantification methods and reporting policies, and agreeing or reconciling with
underlying records. In undertaking our limited assurance engagement, our procedures comprised:
-
Review of the suitability and application of the Reporting Criteria used as the basis for preparing the Information subject to assurance.
-
Enquiries of SGH representatives to gain an understanding and evaluate implementation of processes, systems and internal controls to collect,
aggregate, calculate, analyse and report the Information.
-
Enquiries of personnel responsible for the performance of the processes and preparation of the disclosures.
-
Review of documentary evidence produced by SGH representatives.
-
Comprehensive performance data testing, involving source verification, as well as mathematical accuracy of the calculations pertaining to the
Information.
-
Assessment of whether SGH’s methods for developing estimates are appropriate and had been consistently applied.
-
Review of the presentation and disclosure of the Information within the Report.
-
Obtain Management Representation Letter on key assertions.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance
engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have
been obtained had we performed a reasonable assurance engagement.
Inherent Limitations and Exclusions
Excluded from the scope of our work is any assurance of information relating to:
-
Activities outside the defined reporting period.
-
Statements of commitment to, or intention to undertake future actions by SGH.
-
Statements of position, opinion, belief and/or aspiration by SGH.
-
Financial data audited by an external third party.
-
Other sites and/or activities not included in the scope.
This independent assurance statement should not be relied upon to detect all errors, omissions or misstatements that may exist within the Report.
Statement of Independence, Impartiality, Competence
Bureau Veritas is a global leader in Testing, Inspection and Certification (“TIC”) services. The Group’s mission is to reduce its clients’ risks, improve their
performance and help them innovate to meet the challenges of quality, health, safety, hygiene, environmental protection and social responsibility.
Leveraging its renowned expertise, as well as its impartiality, integrity and independence, Bureau Veritas has helped build trust between companies,
public authorities and consumers for nearly 200 years.
Bureau Veritas operates quality management system across its activities and has implemented a robust Code of Ethics to maintain high ethical standards
among its personnel and business partners in their day-to-day business activities. We are particularly vigilant in the prevention of conflicts of interest.
No member of the assurance team has a business relationship with SGH, its Directors or Managers beyond that required of this assignment. We have
conducted this assurance engagement independently and there has been no conflict of interest.
The assurance team was selected based on its extensive Industry Sector knowledge and experience in conducting independent verification, validation
and assurance of Environmental Social and Governance (ESG) information and associated systems and processes.
Bureau Veritas Australia Pty Ltd
Jeremy Leu
8th August 2024
General Manager
Perth, Australia
45
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Sustainability Report
SGH has delivered significant earnings growth and strategic
progress, with a strong Industrial Services result, achieved
through enhanced operating leverage and financial agility.
Financial Performance
Continuing operations
UNDERLYING TRADING
PERFORMANCE(A)
SIGNIFICANT ITEMS(B)
STATUTORY RESULTS
2024
$m
2023
$m
2024
$m
2023
$m
2024
$m
2023
$m
Revenue
10,605.2
9,625.6
12.3
–
10,617.5
9,625.5
Other income
35.1
39.1
–
2.3
35.1
41.4
Share of results from equity accounted investees
157.5
195.0
(275.5)
4.6
(118.2)
199.6
Net gain on disposal of controlled entities
–
–
76.3
–
76.3
–
Impairment of equity accounted investee
–
–
(135.3)
(75.9)
(135.3)
(75.9)
Expenses excluding depreciation and amortisation
(8,867.9)
(8,172.1)
(34.1)
33.1
(8,902.0)
(8,139.0)
Profit before depreciation, amortisation,
net finance expense and income tax
1,929.9
1,688.5
(356.5)
(35.9)
1,573.4
1,652.6
Depreciation and amortisation
(510.7)
(502.0)
5.3
(9.6)
(505.4)
(511.6)
Profit before net finance expense
and income tax
1,419.2
1,186.5
(351.2)
(45.5)
1,068.0
1,141.0
Net finance (expense)/benefit
(293.5)
(283.4)
(8.7)
8.6
(302.2)
(274.8)
Profit before income tax
1,125.7
903.1
(359.9)
(36.9)
765.8
866.2
Income tax expense
(211.6)
(200.2)
(32.1)
(9.6)
(243.7)
(209.8)
Profit for the year
914.1
702.9
(392.0)
(46.5)
522.1
656.4
(a) Underlying trading performance is comprised of reported results adjusted for significant items. This is separately disclosed and reconciled to statutory
performance to assist users in understanding the financial performance of SGH. Underlying trading performance measures are non-International Financial
Reporting Standards (IFRS) measures and have not been subject to audit or review.
(b) Detailed information regarding the composition of significant items is provided in Note 3: Significant Items of the Financial Report.
Revenue
$10.6bn
10%
UEBIT
$1,419.2m
20%
Operating and Financial Review
SGH Annual Report 2024
46
SGH has delivered Underlying earnings before interest
and taxation (Underlying EBIT) of $1,419.2 million for
the year ended 30 June 2024, up 19.6 per cent on the
prior year, driven by the performance of the Industrial
Services businesses.
Revenue was up 10.2 per cent to $10,605.2 million, reflecting
the strong level of customer demand in mining, construction
and infrastructure. Enhanced operating leverage has driven
the favourable differential between Underlying EBIT growth
and revenue growth, improving EBIT margin by 106 basis
points to 13.4 per cent.
SGH’s balance sheet strength has supported the $606.8 million
cash outlay for the acquisition of Boral, $634.3 million in net
capital expenditure to drive future earnings growth and
$536.5 million in working capital investment to deliver
WesTrac’s committed sales pipeline. These investments
were delivered whilst maintaining an Adjusted Net Debt to
EBITDA ratio of 2.2 times.
All commentary below relates to underlying results from
continuing operations unless otherwise stated.
Industrial Services
Industrial Services revenue of $10,552.5 million was up
10.7 per cent and EBIT of $1,321.7 million was up 28.1 per cent.
Industrial Services now represents 93.1 per cent of SGH EBIT,
underpinning the growth of SGH enabling it to become one of
the largest industrial businesses in Australia.
WesTrac EBIT of $623.4 million increased by 24.7 per cent.
Revenue was up 18.8 per cent to $5,825.6 million, driven by
strong customer demand, particularly for parts and component
exchange. EBIT margin expanded by 51 basis points to
10.7 per cent through cost control, improved labour availability
and leveraging technology to drive operational efficiencies.
Industrial Services EBIT of
$1,321.7 million was up
28.1 per cent and contributes
93.1 per cent of SGH EBIT
In FY25, with mining production continuing at record levels,
combined with an increasing average fleet age, customer
demand is expected to remain strong for both product
support and capital sales. WesTrac is well positioned to
meet the demand through its recent investments in working
capital and capacity expansion projects.
Boral EBIT of $371.6 million was up 60.5 per cent whilst
EBIT margin expanded by 376 basis points to 10.5 per cent.
This reflects the ongoing performance turnaround of the
business through its “Good to Great” performance journey,
supported by SGH’s disciplined operating and capital allocation
models. Revenue of $3,554.6 million was up 2.7 per cent, with
resilient volumes complemented by price realisation across
all product lines. In FY25, Boral will continue to work towards
its mid-teen EBIT margin target through cost initiatives, price
leadership and process improvement. Boral will also be focused
on investing in its upstream network to improve future capacity,
extend quarry life and renew its heavy mobile equipment to
deliver operational efficiencies.
Coates EBIT of $326.7 million was up 8.8 per cent on revenue
of $1,142.3 million, which was up slightly when normalised for
the sale of Coates Indonesia for $64.4 million during the year.
EBIT margin improved by 234 basis points to 28.6 per cent,
reflecting direct cost management and optimisation of transport
and repairs and maintenance.
KCGM Super Pit, Kalgoorlie WA
47
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Performance Review
The ongoing hub and spoke branch rollout is also driving
operational efficiencies and improved customer service
outcomes. In FY25, macro thematics including the housing
undersupply and $1.7 trillion infrastructure and construction
pipeline, are expected to support customer activity.
Coates is well placed to capture the market opportunity
through its $1.9 billion original cost fleet combined with
fleet investment and programmatic M&A targeting selected
market segments and geographies.
Equity Accounted Investees
SGH’s share of results from equity accounted investees of
$157.5 million was down 19.2 per cent.
Beach Energy’s contribution of $102.5 million was down
11.7 per cent. Higher realised prices were offset by lower
production volume and higher operating costs. In FY25,
Beach expects Waitsia start-up and Otway expansion to
support a production guidance range of 17.5 to 21.5 MMboe,
whilst capital expenditure is expected to be $700 to 800 million
including Waitsia Stage 2 and Moomba carbon capture and
storage (CCS) projects.
Seven West Media’s contribution of $31.9 million was down
by 26.0 per cent, reflecting a weaker advertising market,
notwithstanding an increase in Seven West Media’s market
share. In FY25, Seven West Media will be focused on deploying
its new operating model, including a dedicated end-to-end
Digital business, combined with targeted cost savings of
$108 million.
SGH Result
Underlying net profit after tax of $914.1 million was up
30.0 per cent. Statutory net profit after tax of $522.1 million was
down 33.7 per cent. Refer to page 46 for a reconciliation of
statutory to underlying results.
The statutory result was impacted by Significant Items before tax
of $359.9 million, including $245.2 million relating to SGH’s share
of Beach’s impairment of production and exploration assets and
$134.3 million related to the impairment of SGH’s investment in
Seven West Media. Other Significant Items before tax provide a
net benefit of $19.6 million, including the net gain on disposal of
Sykes and Coates Indonesia, partly offset by restructuring and
redundancy costs, fair value adjustments on acquisition of Boral
and other items. Significant Items in net finance expense total
$8.7 million, whilst the tax expense on Significant Items of
$32.1 million results in total Significant Items expense of
$392.0 million after tax.
The robust outlook for each of SGH’s core sector
exposures, coupled with business-specific growth
opportunities and recent investment in working capital,
supports an expectation of high single-digit EBIT growth
in FY25.
Revenue and Other Income
Revenue of $10,605.2 million was up 10.2 per cent from
$9,626.5 million in the prior year. This growth highlights the quality
and core-plus nature of our Industrial Services businesses.
WesTrac continues to benefit from strong demand from both
mining and construction customers, combined with improved
market share in both WA and NSW across new sales, parts
and service. Demand for new machines was driven by mine
expansion projects and replacement of existing fleet, particularly
ancillary equipment, including wheel loaders, drills, dozers and
motor graders. Total product sales of $1,948.3 million was up
11.5 per cent. Demand for parts and services was driven by the
high level of customer activity, combined with an ageing mining
fleet, resulting in product support sales growth of 23.3 per
cent to $3,851.6 million. Customer demand for parts exchange
components was particularly strong, with revenue growing by
33.6 per cent.
Boral has seen robust demand through non-residential customer
activity, offsetting a moderation in the residential market.
Continued price realisation was achieved across all product
lines, offsetting slightly weaker volumes. Building material sales
of $3,272.8 million was up 3.5 per cent, including growth in
concrete and quarries, underpinned by the demand from metro
project activity in NSW and Victoria, combined with growing
WA activity and the continued strong trajectory of Boral’s
recycling business.
Coates generated equipment hire revenue of $1,132.1 million,
up 1.5 per cent, driven by strong customer activity in WA and
Queensland. Demand from customers in mining and oil and
gas was particularly strong. Product categories including
site accommodation and material handling also delivered
opportunities during the year. Total revenue for Coates of
$1,142.3 million was relatively flat year-on-year, reflecting one-
off product sales in the prior year. It is also noted that revenue
includes nine months of trading from Coates Indonesia prior to
the divestment of the business in April 2024 as compared to
12 months of trading reflected in prior year revenue.
Oil and gas revenue of $2.7 million was down $1.3 million due to
the natural decline in production from Bivins Ranch.
Other income of $35.1 million was down $4.0 million including
the impact of realised losses during the year relating to
investments in China Media.
WesTrac Facility, Tomago NSW
Operating and Financial Review continued
SGH Annual Report 2024
48
Expenses
Total expenses excluding depreciation and amortisation increased
by 8.5 per cent to $8,867.9 million. On a statutory basis, expenses
totalled $8,902.0 million after including $34.1 million in Significant
Items, including restructuring and redundancy costs, transaction
related costs and fair value adjustments relating to the Boral
acquisition and derivative movements.
Materials cost of inventory sold and used in product sales and
support increased by 20.5 per cent to $4,246.6 million, mainly
relating to the higher cost of machine and parts inventory to
support WesTrac’s increase in sales.
Materials cost of inventory sold and used in building
materials, rendering of services and contracting by Boral
reduced by 0.9 per cent to $2,515.8 million, reflecting cost
discipline, improved cost recovery, reduced subcontractor
cartage and other operational efficiencies.
The cost of repairs, maintenance and consumables used
in equipment hire of $132.3 million was down 8.4 per cent,
reflecting the continued effort by Coates to optimise repairs and
maintenance as a percentage of sales via its hub and spoke
model and drive transport cost efficiencies.
Employee benefits expenditure increased by 3.0 per cent to
$1,203.6 million, reflecting the higher level of activity across the
Industrial Services businesses combined. Wage cost inflation
was partly offset by higher productivity through improved
availability and retention of skilled labour and use of technology
to streamline tasks and redeploy experienced trade staff onto
higher value activities. On a statutory basis, employee benefits
expenditure was $1,215.4 million, including costs related to
redundancies in Coates and accelerated vesting of Boral’s share
based payments as a result of the takeover completing.
Other expenses reduced by 3.2 per cent to $769.6 million,
reflecting the ongoing focus on driving efficiencies across a
number of cost categories, including information technology,
facility costs, services vehicles and administration. On a
statutory basis, other expenses were $791.9 million which
includes costs relating to property sales, transaction costs and
fair value adjustments primarily relating to the Boral acquisition.
Depreciation and amortisation increased by 1.7 per cent to
$510.7 million, reflecting additional depreciation in relation to the
higher capital expenditure during the year.
Net finance expense increased by 3.6 per cent to $293.5 million,
reflecting higher interest rates on floating debt, partially offset
by reduced average debt levels. Statutory net finance expense
was $302.2 million, after including expensing of acquisition
facility establishment fees, unwind of discounts on provisions
recognised on the acquisition of Boral and fair value movements
in relation to cash-settled equity awards.
Statement of Financial Position
At 30 June 2024, SGH held $654.3 million in cash and cash
equivalents, down from $876.5 million. The reduction includes
the cash component of the offer price for Boral shares acquired
under the takeover offer and the share buyback undertaken by
Boral prior to its full acquisition.
Current trade and other receivables including contract assets
reduced by $108.0 million to $1,523.1 million. The reduction in
trade debtors reflected improved customer collections and
lower days sales outstanding in Boral and Coates. The reduction
in other receivables included the receipt of $65.6 million in
cash collateral relating to the Boral equity swap settlement in
June 2024.
Provisions for expected credit losses on trade receivables
increased by $6.2 million to $30.6 million, reflecting higher
exposure to customers who are operating on fixed price
contracts in the construction sector.
Current inventory increased by $490.1 million to $1,991.0 million,
including increases of $271.5 million in new machines,
$162.8 million in parts and $95.5 million in exchange
components held by WesTrac to support committed customer
sales. WesTrac has also leveraged technology to produce a
digital twin of key internal processes, driving improvement in
work flows and just-in-time inventory management.
Other current assets reduced by $29.3 million to $151.0 million,
principally due to a reduction in WesTrac’s machines in transit,
partly offset by an increase in slot fees received from WesTrac
mining customers.
Assets classified as held for sale increased by $4.1 million to
$7.3 million. These assets relate to equipment held by Coates
and approved for disposal.
Non-current receivables were reduced by $16.5 million to
$3.5 million, reflecting impairment of loans from equity accounted
investees of Boral.
Non-current inventory of $346.8 million relates to the fair value of
non-current land development projects recognised via purchase
price accounting on acquisition of Boral.
Investments accounted for using the equity method had a carrying
value of $1,325.5 million at 30 June 2024, down by $375.8 million.
The reduction includes the impact of SGH’s share of Beach’s
impairment of production and exploration assets, SGH’s share
of Seven West Media’s impairment of its investment in ARN and
impairment of SGH’s carrying value of the investment in Seven
West Media.
Other financial assets decreased by $30.1 million to $66.1 million
based on a revaluation of the unlisted investment in China Media.
Net mark-to-market movements in the unlisted investment portfolio
and realised loss has been recognised in the fair value reserve
consistent with the requirements of AASB 9: Financial Instruments.
Coates Facility, Moorebank NSW
49
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FY10
FY11
FY12
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
0.60
0.50
0.40
0.30
0.20
0.10
0
Ordinary dividend per share history
$/share
Property, plant and equipment increased by $144.2 million
to $3,642.1 million. The increase includes $82.7 million in net
additions by Coates to its rental fleet, taking the original cost of
its equipment to more than $1.9 billion, and $41.5 million in quarry
acquisitions by Boral. WesTrac also continues to invest in capacity
expansion. These investments provide significant competitive
advantages in meeting customer demand.
Right of use assets reduced by $5.1 million to $706.7 million
principally due to extension of leases within Boral.
Producing and development assets increased by $151.2 million
to $627.7 million. This includes $146.7 million relating to drilling
activities and fabrication of topsides and substructure for the
Crux LNG project, increasing its carrying value to
$508.1 million. The carrying value of SGH Energy’s Longtom
asset was unchanged at $119.6 million whilst the investment in
Bivins Ranch continues to be fully impaired at 30 June 2024,
with the movement in accumulated impairment reflecting
revaluation from exchange differences.
Intangible assets declined by $1.8 million to $2,220.4 million,
including. Goodwill paid by Coates on its hire business
acquisitions during the year was more than offset by
amortisation of software costs.
Current trade and other payables increased by $335.1 million
to $1.459.7 million. The movement includes a liability of $334.8
million relating to the cash and scrip consideration to be paid
to complete the compulsory acquisition of Boral. This was
completed on 4 July 2024 with all remaining cash and scrip
consideration paid to Boral shareholders or trustees acting on
their behalf.
Deferred income of $519.3 million reduced by $35.8 million,
principally relating to a higher rate of new machine deliveries to
WesTrac customers during the year. This was partly offset by
an increase in advanced payments and slot fees received from
mining customers.
Current provisions increased by $85.8 million to $187.6 million and
non-current provisions reduced by $30.9 million to $439.4 million.
The net increase in provisions includes $61.4 million of remaining
estimated stamp duty payable on the full acquisition of Boral.
Other movements include an increase in WesTrac’s provisions for
liquidated damages and workers compensation, whilst Boral has
increased its provisions for onerous contracts, legal settlements
and rehabilitation. This was partly offset by the release of various
provisions raised by SGH on acquisition of Boral.
Net debt and capital management
Current and non-current interest bearing loans and borrowings
totalling $4,986.5 million increased by $93.3 million during
the year. The current portion of interest bearing loans and
borrowings increased to $701.6 million.
Net debt at 30 June 2024 was $4,332.2 million, an increase of
$315.5 million during the year. SGH had access to cash and
undrawn borrowing facilities of $1,802.5 million.
Approximately 48 per cent (2023: 46 per cent) of SGH’s
drawn debt is fixed or effectively hedged. The average
effective borrowing cost is 5.7 per cent (2023: 5.6 per cent).
The weighted average facility maturity is 4.5 years (2023:
4.2 years) for drawn facilities.
During the year, SGH refinanced Tranche A of the corporate
syndicated facility, increasing its limit by $20.0 million and
extending its maturity to 2028. SGH also established a
$700.0 million bridge facility to facilitate the full acquisition
of Boral. This facility was utilised in May 2024 and was fully
repaid in July 2024.
WesTrac repaid US$55.0 million of its 2011 Series B notes
in July 2023. In January 2024, WesTrac completed a US
private placement, issuing A$178.0 million of 7 year notes,
A$121.0 million of 12 year notes and US$71.0 million of
12 year notes.
The $250.0 million Exchangeable Bond was settled by SGH
during the year. A principal amount of $249.8 million was
exchanged into Boral shares in May 2024 following the exercise
of Exchange Rights by noteholders. The remaining $0.2 million
principal amount was repurchased and cancelled in June 2024.
There are no remaining Exchangeable Bonds on issue.
Convertible Notes of $0.1 million due in 2025 remain on issue.
This follows the exercise of Conversion Rights by noteholders
during the year, resulting in the issue of SGH ordinary shares to
the noteholders and cancellation of $46.3 million of the notes.
The Boral equity swap with notional amount of $365.6 million
was settled in May 2024 as part of the full acquisition of Boral.
The net amount of derivative financial instrument assets and
liabilities of $79.6 million reduced by $39.5 million, mainly relating
to WesTrac’s US$55.0 million cross currency interest rate swap
which expired in-the-money in July 2023, having been hedged in
2011 at an AUD/USD exchange rate of 1.0265.
Operating and Financial Review continued
SGH Annual Report 2024
50
WesTrac’s Autonomous Training Vehicle “Stella”, Collie WA
Contributed equity increased by $1,387.1 million to
$4,762.4 million. This included $1,371.5 million related to
35.9 million ordinary shares issued as the scrip consideration
for Boral shares acquired. A further $44.7 million related
to 1.9 million ordinary shares issued for the settlement of
Convertible Notes. These were partly offset by an increase
of $29.1 million in treasury shares representing on-market
purchases to satisfy future executive share plan obligations,
offset by shares vested to employees.
Reserves of $3,031.3 million compare to $1,526.6 million
in the prior year. The movement of $1,504.7 million includes
$1,451.6 million in the acquisition reserve, mainly reflecting the
value of scrip issued, and other transaction costs incurred, for
the acquisition of minority interests in Boral. Other movements in
reserves include $5.8 million in the cash flow hedge reserve and
$14.1 million in the foreign currency translation reserve.
Non-controlling interests reduced by $676.6 million to
$28.4 million reflecting the elimination of Boral minority interests,
thus simplifying SGH’s capital structure. The remaining
non-controlling interests principally relate to entities controlled
by WesTrac.
Cash Flow Statement
Operating cash flow of $808.2 million was down $385.4 million
from the prior year. The strong trading performance of the
businesses and resulting increase in receipts from customers
was offset by additional inventory investment in WesTrac
to support the level of customer demand. Dividends and
distributions from equity accounted investees of $38.3 million
primarily included dividends from Beach, together with
dividends received by WesTrac and Boral from their equity
accounted investees.
Interest and other costs of finance paid of $294.7 million
increased by $14.3 million, mainly reflecting higher interest rates
during the year.
Income taxes of $235.7 million increased by $151.7 million,
reflecting the higher earnings of SGH, combined with Boral
returning to a tax-paying position during the year.
Net capital expenditure (excluding intangibles) of $631.7 million
increased by $67.9 million, mainly reflecting the commencement
of drilling activities at Crux in April 2024 and quarry acquisitions
by Boral. Other investing cash flows of $164.1 million primarily
related to $152.4 million in proceeds from the sale of Sykes and
Coates Indonesia, net of cash disposed and transaction costs,
and $45.2 million outlay for the acquisition of equipment hire
businesses by Coates.
Net financing cash outflows of $563.0 million primarily related
to $606.8 million paid during the year for the acquisition of
non-controlling interests in Boral, $167.6 million in SGH ordinary
dividends paid, $67.5 million in dividends paid to minority Boral
shareholders, partially offset by $444.4 million in net proceeds
from borrowings. Other financial cash flows included repayment
of lease liabilities and purchase of treasury shares.
Whilst SGH does not disclose a formal dividend policy,
decisions regarding future dividend payout ratios and franking
levels are made with reference to SGH’s medium term
underlying profitability, Australian tax payable position, total
number of ordinary shares on issue and alternative investment
opportunities available. Within these constraints, SGH aims to
maintain dividends per share through the cycle with a view to
increasing the dividend over the long-term. SGH’s FY24 interim
dividend of 23.0 cps during the year and a final dividend of
30.0 cps was declared in July 2024, both fully franked.
51
Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
The business activities of SGH are
subject to various risk factors that
may impact its future performance
and financial position.
These risks are both specific to SGH’s activities as well
as general commercial and economic risks. Such risks
may, either individually or in combination, affect the
future operating and financial performance of SGH and
the value of its shares.
Risk Management Framework
The Board has established a risk management framework to
actively identify, monitor and manage risks across SGH.
The framework is administered by the Audit & Risk Committee,
which is responsible for assisting the Board to identify and
manage financial and non-financial risks. The Committee’s
responsibilities are set out under “Principle 7 – Recognise and
Manage Risk” in the Corporate Governance Statement available
on the Company’s website.
The Committee maintains a Strategic Risk Assessment register,
established in collaboration with subject matter experts
throughout SGH’s businesses who identify and assess the
risk factors. The Committee evaluates the potential impact and
likelihood of each risk occurring and ranks these accordingly.
Risk controls including policies and procedures are established
for each risk factor, and the responsibility to manage, monitor
and report these risks is delegated to the CEO of each business
and appropriately skilled senior management. External advisors
are engaged to assist in this process where required.
Similar risk management processes are undertaken at WesTrac,
Boral and Coates with each subsidiary presenting to the
SGH Audit & Risk Committee (ARC) their consolidated risk
register at least annually. The material issues are then also
carried up into the SGH risk register with mitigation strategies
and are reported to the ARC semi-annually. Risks are also
considered throughout the Board’s strategic planning process
annually, particularly as they pertain to SGH’s portfolio
construction.
The composition of the Board has been specifically considered
to ensure that relevant expertise is represented at the Board
having regard to SGH’s material risks. Page 64 sets out the
relevant skills matrix.
Risks that are identified as material to SGH are summarised
below. This information should not be regarded as an exhaustive
list of all risks that affect SGH, furthermore, the items have not
been prioritised.
Material Business Risk
Commodity Price Risk
SGH has an operating interest in oil and gas assets located in
Australia and the United States of America. These investments
expose SGH to commodity price risk from fluctuations in the
prices of oil, natural gas and other condensates and natural gas
liquids. SGH does not currently hedge its direct exposure to
oil and gas commodity price risk.
The prices of oil and natural gas can be volatile as a result of
many factors outside of SGH’s control, including global supply
and demand, the level of economic activity in key markets,
investments supply, regional political developments and military
conflicts in oil and gas producing regions, as seen with the
impact of the Ukraine War and sanctions imposed on Russian
energy since March 2022, the price and availability of new
technology and the cost of alternative sources of energy.
A material and/or prolonged decline in the realised prices of oil
and gas may have a material adverse impact on the financial
results and future prospects of SGH and/or the ability to fund
future exploration, appraisal and development activities.
In addition, a prolonged decline in oil or gas prices may also
negatively impact the carrying value of SGH’s oil and gas
investments, joint ventures and operations.
Boral is directly exposed to commodity price risk on coal and
gas whilst also being indirectly exposed to commodity price risk
from prices of coal and gas that impact energy costs, as inputs
to lime, cement and asphalt manufacturing operations. Boral
partially hedges its exposure to coal and diesel fuel commodity
price risk and enters into energy contracts to partially hedge
exposure to energy costs including a solar generated power
purchase agreement.
SGH is exposed to increase in oil price on fuels that impact
transport costs, both as a direct cost of owned vehicles and
as an input cost for transport contractors and manufactured
products.
SGH is indirectly exposed to adverse movements in the prices
of iron ore, gold, copper, lithium, thermal coal and other
commodities through customers that operate in these sectors.
The profitability of these customers, the majority of whom are in
the lowest quartile of the global production cost curve, is a driver
of the level of demand for the equipment, parts and service that
is supplied by WesTrac and Coates.
Risk Factors
SGH Annual Report 2024
52
Mining Production
Parts of SGH’s business, especially WesTrac (and to a lesser
extent Coates), have an exposure to the Australian major miners
who export significant quantities of both iron ore and coal and
who represent a large portion of WesTrac’s annual revenue. The
medium to long-term future of both iron ore and coal exports
may be negatively impacted by changes in Asian markets
that are the traditional importers of these products, as they
potentially adjust their consumption and preferred suppliers
over time. In addition to changes in economic growth and
development in China, the possible changes to environmental
policy and the impact on thermal coal imports may negatively
impact coal prices, which could adversely impact the financial
performance of SGH. Any increased political tensions between
Australia and other foreign Governments could negatively impact
export volumes and therefore SGH’s financial performance.
Competition
The markets in which SGH’s industrial services businesses
operate are competitive. In some instances, customers have
alternative sources of supply, including imported supply,
therefore requiring competitive pricing and high customer
service levels to retain market share. The competitive
environment can be significantly affected by local market forces,
such as new entrants, production capacity, utilisation, disruptive
product innovation, customer strategies, new energy trends and
customer preferences, and changes in mining and construction
methods and construction materials. An increase in competition
could result in a loss of market share or decrease in prices that
could impact SGH’s profitability.
Boral has specific competition risks in relation to customer
concentration, production innovation and product substitution.
Many of the products sold by Boral are commodities that face
strong volume and price competition, with pricing impacted
by macroeconomic conditions, the competitive environment,
degree of utilisation of production capacity and the specifics
of product demand, among other factors. In addition,
competitors are increasingly innovative and cost competitive,
and products may face competition from substitute products
over time, including new products that Boral does not produce.
Any significant shift in demand preference to these alternate
products could adversely impact market share. Boral may also
experience downward pricing pressure across its different
markets and may not always be able to raise prices to offset
increased operating expenses and inflationary pressures.
Contract Risk
SGH is subject to the risk that material contracts with suppliers,
customers and others are terminated, expire, are not renewed
or are renegotiated on less favourable terms. This may have an
adverse impact on SGH’s financial performance and position.
SGH is party to agreements with service providers for a number
of ongoing services, which if terminated might have significant
financial and operational implications for SGH’s businesses.
SGH is also exposed to the risk that it does not manage, or that
third party service providers do not manage, obligations in line
with contractual or operational standards, which could result in
financial losses.
In some instances, business projects may have work delivery
challenges that manifest in actual costs increasing from earlier
estimates. Coates Engineering Solutions and Boral contracting
business may have normal contractor’s liability in relation to
projects and may have normal design liability for projects
where design is contracted. These liabilities may include
litigation against Coates or Boral. Coates or Boral may also
provide performance guarantees and indemnities for projects
and the value of these guarantees and indemnities
is indeterminable in amount.
Funding, Access to Capital Markets and Liquidity Risk
SGH relies in part on debt and debt-like instruments to fund
its business operations. SGH and its subsidiaries will need
to refinance debt and derivative facilities as they mature over
time and is exposed to adverse changes in global equity or
credit market conditions. There is a risk that SGH could have
difficulty obtaining financing on commercially reasonable terms
if there was a material deterioration in the cash generation of the
business operations, which may negatively impact SGH’s ability
to implement strategy or undertake investments, as well as
potentially increasing the cost of funding.
The ability to refinance can be impacted by many factors outside
of SGH’s control, including global supply of credit, level of
economic activity and credit defaults, perceptions of carbon
intensity and credit providers’ assessment of aggregated credit
risk to SGH and its investments.
Liquidity risk arises from the possibility that SGH may not be
able to settle or meet its obligations as they fall due. Failure
to meet applicable covenants or undertakings in its financing
arrangements could adversely impact SGH by accelerating
payment obligations or requiring the renegotiation of existing
financing. SGH manages this risk by maintaining sufficient cash
balances, liquid securities and undrawn bank facilities from a
variety of lenders to ensure these obligations can be met.
SGH also has policies in place to minimise and manage its
exposure to counterparty credit and duration risk.
Customer Default
SGH’s businesses have large and diversified customer bases
and are not reliant on any single customer. However, there is
the risk that customers may default due to bankruptcy or other
reasons, including general economic downturn. Such risks have
been manifested across the building and construction sector
due to the adverse impacts of inflation impacting builders who
have taken on fixed price construction risk.
A customer’s termination of, or default under, a contract could
result in a loss of expected revenues and additional expenses.
Accordingly, the termination of, or default under, a contract by
any of SGH’s customers could have an adverse effect on SGH’s
business, financial condition and results of operations.
Project Activity
Australian infrastructure policy has long been the foundation
for economic growth through the development and ultimately
investments of large-scale projects, e.g., Snowy Mountains
Hydro Scheme. The current forecast for infrastructure across
Australia, specifically the East Coast, is forecast to provide
a significant stimulus to the economy over the next decade.
WesTrac, Coates and Boral are exposed to the infrastructure
activity and have factored the increases in activity into their
strategic outlooks, any material change in this outlook as a
result of changes in Government policy, could have an adverse
effect on SGH’s financial performance.
Government Policy
Changes in government, policies, taxation and other laws and
government intervention in domestic markets, such as the
Gas price cap, can have a significant influence on the outlook
for SGH. In this regard, SGH has a significant exposure to
infrastructure, natural resources and environmental policy.
In Australia, natural resources are regulated by State and Federal
governments in relation to exploration, development, production,
exports, taxes and royalties, labour standards, occupational
health, waste disposal, protection and rehabilitation of the
environment, mine safety, toxic and radioactive substances,
native title, right to negotiate, indigenous heritage and a range of
other matters.
53
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Financial Report
Our Businesses
Sustainability Report
Performance Review
In regard to the infrastructure industry, SGH is exposed to a
variety of factors that may adversely affect its businesses or
operations, regulation by various governmental authorities,
service interruption due to environmental, operational or other
mishaps; the imposition of special tariffs and changes in tax
laws, regulatory policies and accounting standards; and general
changes in market sentiment towards infrastructure assets.
The environment is regulated in Australia by Local, State and
Federal governments in relation to activities impacting the natural
environment, including development conditions and approvals,
restrictions on operations and amount of carbon emissions that
may adversely impact SGH’s businesses or operations or those
of its customers.
The transition to a low-carbon economy with heightened focus
on carbon emissions is likely to result in changing customer
preferences, and a shift to less carbon-intensive construction
materials. Governments are also setting binding targets and
increasing actions to achieve carbon reduction. This may result
in a broader based price on carbon emissions, increasing the
cost of production and negatively impacting earnings of SGH.
Equity Market Risk
SGH’s listed and unlisted investments are subject to price,
liquidity and other risks associated with any investment in such
assets, including the risk that distributions paid to shareholders
will be reduced.
SGH’s financial performance may be impacted by fluctuations
in the value of its listed and unlisted investments due to
numerous factors. These include changes in Australian and
international stock markets and investor sentiment, domestic
and world economic conditions and outlook, consumer and
business sentiments, inflation rates, interest rates, employment
impairment of assets or fair value movements and taxation
legislation and other changes to government policy, legislation
or regulation.
Reserve, Exploration and Production Risk
Quarry, oil and gas reserves and resources are estimated
using subjective judgements and modelling based on available
geological, technical, contractual, licence, permit and economic
information. Estimates can change over time due to new
information from drilling or production, changes in economic
factors such as quarry product, oil and gas prices, technological
improvements, regulation or other events.
Quarry, oil and gas reserves and resources are finite and
are depleted on an ongoing basis through production, with
replacement only possible via the discovery of new resources
through successful exploration or the acquisition of resources.
Exploration for quarry products and hydrocarbons is inherently
risky and subject to geological interpretations and technological
uncertainties. Failure to secure access to licenses and permits
and sub-economic exploration results could lead to declining
reserves and resources impacting long term growth.
SGH Energy holds production rights to a number of onshore
and offshore oil and gas fields. Oil and gas facilities are exposed
to the risk of loss of containment of hydrocarbons. A loss of
containment could result in disruption to production, loss of
revenue and clean-up costs. SGH Energy has insurance policies
in place to minimise any losses incurred as a result of the loss of
containment of hydrocarbons.
Boral holds production rights to a number of quarries. Quarry
production may result in disturbance to the environment,
including ground stability, air quality, indigenous cultural
artifacts and noise. Any quarry, oil or gas project may be
exposed to production decline or stoppage, which may be the
result of facility shut-downs, mechanical or technical failure,
climate-related events and other unforeseeable events.
A significant failure to maintain production could result in lower
production forecasts, loss of revenue and additional operational
costs to restore production.
Foreign Exchange Risk
SGH is exposed to movements in foreign exchange rates.
WesTrac, and to a lesser extent Boral, Coates and SGH Energy,
are exposed to foreign exchange risk through the purchase of
plant and equipment, inventory and products denominated in
foreign currency, principally US Dollars. As part of its pricing
of equipment globally, Caterpillar periodically resets pricing for
mining equipment and parts which are denominated in
US Dollars reflecting exchange rate movements, transport costs
and underlying inflation.
Movements in the pricing of equipment impacts WesTrac’s cost
of machines and may also affect the overall profit earned on the
sale of equipment to customers which may be denominated in
either Australian Dollars, US Dollars or both.
Boral is exposed to foreign exchange risk through its remaining
international operations, and through imported products and
acquisition of plant and equipment.
The revenue generated and capital development costs associated
with SGH’s energy assets is partly denominated in USD. SGH
does not currently hedge the expected revenues or capital
development costs, resulting in the risk of lower earnings and/or
higher costs for SGH upon conversion to Australian Dollars if there
has been an adverse movement in the exchange rate.
Fluctuations in foreign exchange rates, including the AUD/USD
exchange rate could have an adverse impact on SGHs business,
financial condition and results of operations which are reported
in Australian Dollars.
SGH may from time to time hold cash and investments, including
investments in overseas equity funds, denominated in US Dollars,
exposing SGH to foreign exchange risk.
Interest Rate Risk
SGH is exposed to the risk of an increase in net interest costs
through the impact of adverse changes in market interest rates
on the cost of debt. SGH’s policy is to hedge a portion of this
risk by utilising a mixture of fixed and floating rate debt facilities
and through the use of derivatives including interest rate swaps
and options.
Inflation Risk
SGH is exposed to the risk of a significant increase in input
costs, both direct and indirect, through the impact of periods of
sustained high inflation. SGH seeks to recover increased input
costs from inflation by prices charged to customers for goods and
services and there is a risk some increased input costs are unable
to be passed on, adversely impacting SGH’s margins. Central
bank measures to mitigate high inflation by increasing interest
rates may result in reduction in economic activity and consumer
demand that may adversely impact SGH’s market outlook.
Investment Risk
Investment Opportunities
The financial performance of SGH will be affected by the
recognition and availability of suitable investment opportunities in
the future coupled with the operating performance of the existing
businesses to support this growth. There is no guarantee
that SGH will be able to identify and successfully implement
future investment opportunities. Investment opportunities, and
SGH’s ability to divest its existing investment are subject to
market conditions and other factors outside of the control of
SGH. With the ongoing focus on growth and diversification, the
next opportunity to significantly add to the current businesses
controlled by SGH will carry additional risk due to the size and
potentially the nature of those businesses. Given the complexity
of any transaction undertaken, SGH faces risks in undertaking
Risk Factors continued
SGH Annual Report 2024
54
sufficient due diligence and reaching a level of assurance as to
the merits of acquiring the potential target. Due diligence may
not reveal all material issues, which could impact on the returns
from the investment. If SGH does undertake further investments
in the future, there are risks associated with the integration of
any business into SGH, including potential delays and costs
in implementing necessary changes and integrating various
operations, and failure to achieve potential synergy benefits.
Minority Investments
SGH holds investments in a number of ASX-listed, and unlisted,
companies that it does not control, including Seven West and
Beach Energy. Where SGH holds an investment and is limited
in its ability to exert control over the investee entity, it may
become subject to the operational control of others and the
financial performance this may entail. Additionally, SGH will
be exposed to the price, liquidity and other risks inherent in
minority shareholdings, including the risk that distributions paid
to security holders will be reduced, adversely impacting the yield
of the broader portfolio. SGH may also not be able to achieve
an easy or profitable exit from its investments. This could lead
to a reduction in the financial performance of SGH. Listed
equity markets fluctuate with time, and the price of shares in
SGH’s portfolio may rise or fall due to numerous factors, which
may affect the market performance of SGH. These include
changes in Australian and international stock markets and
investor sentiment, domestic and world economic conditions
and outlook, inflation rates, interest rates, employment, taxation
and changes to government policy, legislation or regulation.
Media Investments
SGH’s investment in Seven West Media exposes it to the various
risks facing the media industry. Seven West Media competes for
audience share and advertising revenues with all forms of media
such as free-to-air television, newspapers, magazines, radio,
outdoor advertising, pay television, direct mail, cinema and
the internet, including Subscription Video On Demand (SVOD),
Transactional Video On Demand (TVOD), Advertising Video On
Demand (AVOD), Broadcast Video On Demand (BVOD), short
form video, social media and search.
The Australian media industry is highly concentrated and
competitive, with a number of operators competing for market
share and advertising revenue through the same or alternative
products. The actions of an existing competitor, the entry of new
competitors into the market, and the introduction of new forms
of media, or changes to Government regulation such as anti-
syphoning, may result in audience fragmentation in television,
BVOD and/or a reduction in newspaper readership, resulting in
advertising revenue declines and lower profitability for Seven
West Media. Third-party appropriation of content and other
intellectual property without compensation may also impact the
financial performance of the business.
Media reform may provide an opportunity to mitigate these factors.
Seven West Media has implemented changes to its operating
model and management structure to address cultural concerns,
drive a performance-focused organisation and help deliver on its
refreshed strategy.
Energy Assets
The development timetable of SGH’s energy assets is subject
to the decision making of controlling and operating partners in
relation to factors such as environmental and regulatory approval,
economic access to processing infrastructure, approval
of drilling programs, finalisation of development concepts,
development schedule and cost, operating cost including approach
to carbon emissions reduction or offset and weather.
Failure to secure and maintain access to processing infrastructure
on reasonable terms, or events that result in a significant
disruption to access, could result in the loss of revenue, delay
in development timetable, loss of investment income or require
additional costs to restore or find alternative access.
Contracts to access processing may involve take or pay
arrangements that could also result in costs where production is
either not supplied or not supplied in sufficient volumes.
Failure of SGH Energy’s Joint Venture Partners to meet financial
and other obligations may have an adverse impact on SGH
Energy’s business. SGH Energy works closely with its Joint
Venture Partners to minimise joint venture misalignment.
Management and Personnel
Loss of key management and other personnel, including board
directors, may have a negative impact on SGH’s businesses
and SGH faces the risk that it cannot promptly or adequately
replace key directors, management or personnel that leave SGH.
Difficulties attracting and retaining skilled employees may also
impair SGH’s ability to conduct its business.
A local or global shortage of suitably qualified and experienced
technicians and operational staff could impact the ability of
WesTrac, Boral and Coats to achieve their operational objectives
and also result in an increase in operational costs through higher
salaries required to attract and retain staff.
Many of SGH’s businesses’ employees, including permanent
and casual employees, are covered by awards, enterprise
bargaining agreements and other workplace agreements.
These arrangements are complex and require interpretation,
including in determining payments and accrual of employee
benefits, are subject to change in interpretation, government
regulation and periodically require renegotiation and renewal.
These arrangements could result in issues which may lead to
disruptions to operations and an increase in direct and in-direct
labour costs, which may have negative impacts on SGH and
SGH’s financial performance.
Network Optimisation
Any deterioration across SGH in branch network quality due
to outdated infrastructure, insufficient maintenance, increased
scale and complexity or changing geographic coverage, may
result in increased operational costs, longer response times,
and diminished customer satisfaction. This may limit the ability
to leverage fixed costs effectively across operations putting
pressure on SGH’s operating margin.
Manufacturing Operations
Boral’s manufacturing operations and related services depend
on critical plant. Any unanticipated failures, outages or
force majeure events could lead to failure to meet financial
performance that Boral partially mitigates via business
interruption insurance on key facilities. Boral’s performance is
exposed to inflationary impacts from rising input costs, including
energy. Disruption in the supply of raw materials or other critical
inputs for manufacturing as a result of force majeure type events
could impact Boral’s ability to manufacture products and meet
market demand. Specific business interruption risks for Boral
include plant and systems failure, severe weather, access to
future reserves and resource supply constraints.
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Sustainability Report
Performance Review
WesTrac Dependence on Caterpillar
WesTrac’s predecessor companies have been associated with
Caterpillar since the 1940s and WesTrac’s association with
Caterpillar has been since 1990. As is customary in dealer
agreements with Caterpillar, the WesTrac dealer agreements with
Caterpillar can be terminated by either party upon 90-day notice
at any time. The dealer agreements also contain provisions for
automatic or accelerated termination in certain circumstances,
such as material breach, insolvency events, and changes in
control without Caterpillar consent, and are not exclusive. The
Caterpillar dealer agreements are not, however, subject to
periodic renewal requirements and are perpetual in nature
(subject to the termination right noted above).
In the event Caterpillar terminates or appoints another dealer
or deals directly in the territories in which WesTrac operates,
it would have a material adverse effect on WesTrac’s business,
financial condition and results of operations as well as
trigger accelerated prepayments across SGH’s key funding
arrangements. In the event Caterpillar changes the scope of
current or future activities able to be provided by WesTrac
under the dealer agreements, it may have an adverse effect on
WesTrac’s business, financial condition and results of operations.
WesTrac is dependent on Caterpillar for timely supply of
equipment and parts from their global manufacturing factories
and distribution warehouses. During periods of intense demand
or in the event of disruption to Caterpillar’s business there may
be delays in the supply of equipment and parts to WesTrac.
In the event that Caterpillar is unable to supply its products in
the quantities and timeframes required by WesTrac’s customers,
it may have a material adverse effect on WesTrac’s business,
financial condition and results of operations.
Remediation and Restoration Costs
SGH holds provisions for the future remediation and restoration
costs of quarries and removal costs of offshore and oil and
gas production facilities and pipelines at different stages of the
development, construction and end of their economic lives.
Most of these restoration and decommissioning events are many
years in the future and the precise requirements that will have
to be met when the restoration event occurs are uncertain and
differences in actual requirements to assumptions made may
result in difference in costs. Decommissioning technologies and
costs are constantly changing, as are political, environmental,
safety and public expectations. The timing and amounts of
future obligations are subject to significant uncertainty and
estimation is required in determining the amounts of provisions
to be recognised. SGH maintains a provision for remediation and
restoration obligations representing SGH’s best estimate based
on current industry practice, current regulations, technology,
price levels and expected plans for end-of-life remediation.
Changes to current industry practice could result in increased
costs, which may have negative impacts on SGH and SGH’s
financial performance.
Supply Chain and Logistics
Key operational risks to SGH as a result of force majeure events
include the potential closure of locations such as branches and
workshops, disruption to field services, disruption to the supply
chain (including rail infrastructure), closure of customer locations,
and changes to government legislation and regulation. These
risks may impact customer demand and the ability of WesTrac,
Coates and Boral to schedule and complete the work required
to provide equipment, services and products to customers on
a timely basis. The ability of customers to pay for equipment,
product and services within agreed terms may also be
impacted, as may the solvency of a limited number of customers
which would in turn impact the financial performance of SGH.
SGH and its operating businesses have Business Continuity
Plans and material business interruption insurance and maintain
a level of crisis liquidity for force majeure events. Failure to
forecast, anticipate or react to material events in a timely manner
may however lead to loss of competitive position, inadequate
fleet and inventory mix and impact SGHs financial performance.
Should supply chains be impacted due to unforeseen events or
inadequate planning and management, SGH may experience
increased inventory levels in WesTrac, including increased orders
of long lead time parts and new equipment where increased
lead times necessitated going on risk to enable WesTrac to meet
expected customer demands. Coates may also experience
extended equipment delivery times and be required to slow its
fleet disposals to ensure they have sufficient rental fleet to meet
current customer demand.
Property Portfolio
SGH’s property strategy involves managing a diverse portfolio
of property. Fluctuations in property values due to economic
cycles, interest rates, and general market dynamics may impact
financial performance and asset management strategies
across SGH. Regulatory changes, including zoning laws and
environmental regulations, may restrict strategic decision making
and increase operational costs. Operational disruptions such
as natural disasters or infrastructure failures could also damage
properties, leading to downtime, repair costs, and potential
insurance claims. SGH, in certain instances, also relies on
third party developers to develop, sell and lease out properties
across the portfolio, and as a result may be impacted by the
performance and success of the developer.
Workplace Safety and Security
Employee safety is a fundamental principle in all SGH’s activities.
However, the nature of SGH’s operations involves a variety of
risks which could result in accidents or environmental incidents,
causing injuries or loss of life for its workforce, including staff and
contractors, and the public, and could result in regulatory action,
legal liability and damage to SGHs reputation. SGH has sought
to mitigate these risks by assessing, understanding and mitigating
the risk factors in each of its operating businesses by implementing
safety rules and safety commitments which provide direction and
guidance on these critical risks.
SGH is committed to providing a safe workplace and maintains
comprehensive workplace safety policies and systems which
are overseen by health and safety specialists within the human
resources departments and dedicated risk, safety and security
teams within each business. Procedures relating to security at
SGH’s business sites are prioritised and are subject to review and
continuous improvement.
Chain of responsibility also extends SGH’s obligations beyond
existing operations to contractors and potentially their sub-
contractors, over whom SGH has less control and there are
strategies to manage this risk within each operating business.
Crime, Technology and Cyber Security
SGH is subject to risk of fraud, misappropriation of assets or
information by individuals or organisations. SGH has controls
in place to mitigate these risks, including system controls,
segregation of duties, review procedures, bi-annual Financial
and Corporate Governance Self Assessment attestation
process, whistleblower reporting, internal and external audit.
SGH’s rental activities necessitate the loss of physical control of
assets increasing the risk of misappropriation, mitigated where
possible by identity checks and obtaining security deposits before
hire and on certain high value serialised equipment GPS tracking
devices. SGH secures assets within its control at locations using
a variety of physical measures including locks, alarms, fencing,
closed circuit television and security guards.
We rely upon information technology systems and networks
in connection with a variety of business activities. Information
technology security threats from user error to cyber security attacks
designed to gain unauthorised access to our systems, networks
and data, are increasing in frequency and sophistication. SGH
Risk Factors continued
SGH Annual Report 2024
56
Coates Facility, Moorebank NSW
secures business and customer information using information
technology security measures, including encryption, multi-factor
authentication and independent security penetration testing.
We have experienced cyber security threats and vulnerabilities
in our systems and those of our third‑party providers, and we
have experienced viruses and attacks targeting our information
technology systems and networks. Such prior events, to date,
have not had a material impact on our financial condition, results
of operations or liquidity. However, the potential consequences
of a future material cyber security attack include reputational
damage, litigation with third parties, government enforcement
actions, penalties, disruption to systems, unauthorised release
of confidential or otherwise protected information, corruption of
data and increased cyber security protection and remediation
costs, which in turn could adversely affect our competitiveness,
results of operations and financial condition.
Due to the evolving nature of such security threats, the potential
impact of any future incident cannot be predicted. Further, the
amount of insurance coverage SGH’s businesses maintain may
be inadequate to cover claims or liabilities relating to a cyber
security attack. In addition, data we collect, store and process
are subject to a variety of laws and regulations which may
carry significant potential penalties for non-compliance. SGH
businesses are increasingly exposed to risks arising from failed
cloud-based services, where providers fail to ensure continuity
of services. Continuity plans are in place for critical systems but
may not fully mitigate this risk.
Weather, Environment and Climate Change
Extreme weather is a risk for mining, quarry, oil and gas,
construction and construction materials industries. Periods of
extreme weather can interrupt SGH’s production, operations,
and ability to supply products to the market and limit customer’s
production and operations postponing demand. Prolonged
periods of wet weather can impact Boral’s performance through
lower productivity and loss of fixed cost recovery.
SGH operates in industries that may have a negative impact
on the environment, including in respect of land, air, and water
pollution and greenhouse gas emissions. SGH is investing in
solutions to reduce its energy consumption and greenhouse
gas emissions and is seeking to transition to a lower carbon
economy including an aspiration to net zero emissions.
Boral’s pathway to net zero is dependent on further development
and commercial viability of new and emerging technologies.
There are risks that new technologies are not developed or are
not viable or changes in regulation that may increase SGH’s cost
structure (including the cost of carbon offsets) or result in SGH
being unable to satisfy the future regulatory requirements relating
to these matters impacting SGH’s social licence to operate.
There is a risk that changes to applicable environmental
regulations can have direct impact, such as recent change to
the Safeguard Mechanism and carbon emissions baseline and
applicability of Trade Exposed Baselines Adjustments, or indirect
impact, such as policy impacting availability or cost of carbon
offsets, on SGH’s businesses that could adversely impact SGH’s
financial and business performance. Customers are increasingly
looking to lower their greenhouse gas emissions, which may
result in increased electrification or use of alternative fuels (such
as hydrogen) to power mining fleet, reducing future demand
for support (parts and service) of traditional diesel combustion
engines or use of alternative construction materials, reducing
future demand for aggregates, cement and concrete.
Strategic, regulatory and operational risks and opportunities
associated with climate change are incorporated into SGH
policy, strategy and risk management processes and practices.
SGH actively monitors current and potential areas of climate
change risk and takes actions to prevent and/or mitigate any
impacts on its objectives and activities including setting of
targets to reduce carbon emissions. Reduction of waste and
emissions is an integral part of delivery of cost efficiencies and
forms part of SGH’s routine operations.
Tax Risks
SGH may be subject to reviews by taxation authorities from
time to time in the ordinary course of business. These reviews
may result in the taxation authorities taking a different view on
the tax treatment of particular transactions from that of SGH,
which could lead to additional tax liabilities.
Reputational Risk
Reputational risk is the risk of failure to meet stakeholder
expectations as a result of an event, behaviour, action or inaction,
either by SGH itself, our employees or those with whom we are
associated, that may cause stakeholders to form a negative view of
SGH is fundamentally a by-product of another business risk such
as decarbonisation, ethics, security or tax.
The governance of reputational risk is integrated into SGH’s broader
risk governance framework. The Business Units manage risk as
an intrinsic part of their daily operations and are committed to
conducting activities in a way that generates sustainable growth
while enhancing the reputation of SGH.
There is an ongoing focus on continued investment in cyber
security, ongoing investment in sustainable water sources,
dust and wastewater management and meaningful focus on
Indigenous employment.
There may also be reputational risks associated with exposure
to fossil fuels and emissions-intensive businesses or businesses
which decarbonise slowly, which is potentially offset by the
opportunity to build a more climate-positive brand to better align
with consumer preferences, while also engaging with customers
on relevant concepts.
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Sustainability Report
Performance Review
2
4
6
7
9
1
3
5
8
1. Terry Davis
Chairman of Seven Group Holdings Limited
Since 17 November 2021
Director
Since 1 June 2010
Member of the Independent & Related Party Committee and
member of the Remuneration & Nomination Committee.
Group Managing Director, Coca-Cola Amatil Limited from
November 2001 to March 2014.
Director of St. George Bank Limited from December 2004 to
December 2008.
Over fifteen years’ experience in the global wine industry
including Managing Director of Beringer Blass (the wine
division of Foster’s Group Limited) and Managing Director
of Cellarmaster Wines Group between 1987 and 1997.
Council Member of the University of New South Wales
Council from June 2006 to June 2014.
2. Ryan Stokes AO
Managing Director & Chief Executive Officer
of Seven Group Holdings Limited
Since 16 February 2010
Mr Ryan Stokes AO is Managing Director & Chief Executive
Officer of Seven Group Holdings (SGH) and has been an
Executive Director since February 2010. He was previously
Chief Operating Officer of SGH from August 2012 to June 2015.
Mr Stokes is Chairman of WesTrac, Chairman of Coates and
a Director of Seven West Media since August 2012. He is
Chairman of Boral and a Director since September 2020.
He is Chairman of Beach Energy and a Director since July 2016.
He has extensive experience leading large private and public
organisations, including experience with corporate transactions,
operational discipline and performance.
Mr Stokes is Chief Executive Officer of Australian Capital
Equity Pty Limited (ACE). ACE is a private company holding a
major interest in SGH. Mr Stokes was appointed Chairman of the
National Gallery of Australia in July 2018. He is also a member
of the IOC Olympic Education Commission. Mr Stokes was
Chairman of the National Library of Australia from 2012 to 2018.
He was a member of the Prime Ministerial Advisory Council on
Veterans’ Mental Health from 2014 to 2019.
Mr Stokes holds a BCom from Curtin University and is a
Fellow of the Australian Institute of Management (FAIM).
Mr Stokes was appointed an Officer in the General Division
of the Order of Australia in the Queen’s Birthday honours on
8 June 2020.
3. Rachel Argaman (Herman) OAM
Director of Seven Group Holdings Limited
Since 7 February 2022
Member of the Remuneration & Nomination Committee and
member of the Independent & Related Party Committee.
Ms Argaman brings a wealth of operational experience and
proven leadership skills and capability across a number of
sectors. Ms Argaman has been the Chief Executive Officer of
Opal HealthCare, Australia’s largest private residential aged care
provider, since August 2018. Prior to this she held executive
roles at TFE Hotels, as Chief Executive Officer for 11 years,
Charter Training Group and Imperial Car Rental.
As the Chief Executive Officer of Opal HealthCare,
Ms Argaman has worked to create a customer and purpose
led organisational culture that focuses on the delivery of strong
social and commercial outcomes to enable the provision of
the infrastructure to support Australia’s aging population live
well. She has also led the business through its response to the
COVID-19 pandemic and the Royal Commission into Aged Care,
Quality and Safety.
Ms Argaman holds a Bachelor of Arts (Hons) and MBA in
Services Industries Management from the University of the
Witwatersrand.
4. Annabelle Chaplain AM
Director of Seven Group Holdings Limited
Since 24 November 2015
Chair of the Audit & Risk Committee; member of the
Remuneration & Nomination Committee and member of the
Independent & Related Party Committee.
Ms Chaplain brings to Seven Group Holdings extensive
experience in financial services and mining, engineering and
infrastructure services.
Ms Chaplain has been the Chairman of MFF Capital Investments
Ltd since August 2019 and a Non-Executive Director of Super
Retail Group Ltd since March 2020. Previously she was
Chairman of Queensland Airports Ltd and a Non-Executive
Director of a number of companies including Downer Group Ltd,
Coal and Allied Industries and Credible Labs Inc. In the public
sector she has previously served as a member of the Board
of Taxation and as a Director of EFIC, Australia’s export credit
agency. Since April 2017, Ms Chaplain has served as a Director
of the Australian Ballet and has been the Chair of The Society of
the Sacred Advent Schools Pty Ltd since July 2022.
Board of Directors
SGH Annual Report 2024
58
Ms Chaplain is a Fellow of the Australian Institute of Company
Directors. She holds an MBA from the University of Melbourne,
a BA majoring in Economics and Mandarin from Griffith University
and a diploma from the Securities Institute of Australia.
In 2016, she was awarded an honorary doctorate by Griffith
University in recognition of her service to banking, finance and
the community. Ms Chaplain was appointed a Member in the
General Division of the Order of Australia in the Australia Day
honours on 26 January 2020.
5. Katherine Farrar
Director of Seven Group Holdings Limited
Since 18 February 2019
Chair of the Remuneration & Nomination Committee, member
of the Audit & Risk Committee and member of the Independent
& Related Party Committee.
Ms Farrar was appointed as Brighter Super’s Chief Executive
Officer in April 2018. Ms Farrar has the growth of Brighter Super
from $10B with 70,000 members to now over $32B with 230,000
members through the merger of LGIAsuper and Energy Super
and the industry first acquisition of retail super fund Suncorp
Super in FY21.
Ms Farrar has 35 years’ experience in leadership roles across the
finance and energy sectors. Her previous roles include Managing
Director of business energy retailer QEnergy, Chief Operating
Officer at Ergon Energy Retail, and senior positions at Morgans
Stockbroking, Barclays de Zoete Wedd and Suncorp Investment
Management. Prior to joining Brighton Super, she was a Junior
Partner (equivalent) at McKinsey & Company.
Ms Farrar has a Bachelor of Music (Honours) Degree and a
Masters degree in Econometrics and Finance. She is also a
graduate of INSEAD’s Advanced Management Programme.
6. Christopher Mackay
Director of Seven Group Holdings Limited
Since 1 June 2010
Member of the Audit & Risk Committee and member of the
Independent & Related Party Committee.
Managing Director of MFF Capital Investments Limited since
1 October 2013.
Former Chairman of Magellan Financial Group Limited.
Mr Mackay co-founded Magellan after retiring as Chairman of
the investment bank UBS Australasia in 2006, having previously
been its Chief Executive Officer.
Considerable experience in business management, capital
allocation, risk management and investment. A former investment
banker and corporate and banking lawyer, with broad experience
in the financial and corporate sectors over many years.
A Director of Consolidated Media Holdings Limited from
March 2006 until November 2012, when the company was
taken over by News Corporation.
Mr Mackay was a member of the Federal Treasurer’s Financial
Sector Advisory Council and the Business Council of Australia,
and a Director of the International Banks & Securities Association.
7. David McEvoy
Director of Seven Group Holdings Limited
Since 27 May 2015
Member of the Audit & Risk Committee and member of the
Independent & Related Party Committee.
Mr McEvoy has been engaged in the upstream oil and gas
industry for over 40 years, in a variety of technical, senior
executive and non-executive director roles. He was employed
for almost 34 years with ExxonMobil concluding his executive
career as Vice President, Business Development, ExxonMobil.
Mr McEvoy graduated from the University of NSW with a degree
in Science and a graduate diploma in Applied Geophysics.
Mr McEvoy is a former Non-Executive Director of AWE Limited
(2006 – 2018), Woodside Petroleum Limited (2005 – 2017),
Acer Energy (formerly Innamincka Petroleum Limited) and
Po Valley Energy Ltd.
8. The Hon. Warwick Leslie Smith AO
Director of Seven Group Holdings Limited
Since 12 September 2014
Member of the Audit & Risk Committee and member of the
Remuneration & Nomination Committee.
Mr Smith has been Chairman of Advisory Board Australian
Capital Equity since November 2006. Mr Smith also holds the
position of Chairman at Ord Minnett; Wollar Solar Finance and
Aqualand Group. Mr Smith is also a Director of Jemena Energy:
Hive & Wellness (Capilano) and Marinus Link.
He has served as Chairman of the Australia-China Council for
over eight years and was the Founding Chair of the National
Foundation of Australia-China Relations. He is Chairman of
the Global Engagement Committee of the Business Council of
Australia of which he is a member.
Mr Smith is a former Senior Managing Director of the Australia
New Zealand Banking Group Limited (ANZ), of which he
was also Chairman of New South Wales & Australia Capital
Territory, Chairman ANZ Thailand and Chairman and Director,
ANZ Greater China and immediate past Chair of the National
Museum of Australia.
Formerly Executive Director with Macquarie Bank, Director
of Estia Health Limited, Chairman of E*TRADE Ltd and the
Australian Sports Commission. He was a Federal Government
Minister with a parliamentary career spanning 15 years. He was
also Australia’s first Telecommunications Ombudsman.
Mr Smith has also received a Centenary Medal and was
twice awarded the Order of Australia.
9. Richard Uechtritz
Director of Seven Group Holdings Limited
Since 1 June 2010
Member of the Remuneration & Nomination Committee and
Chairman of the Independent & Related Party Committee.
Chief Executive Officer and Director of JB Hi-Fi Limited from
June 2000 to May 2010. Mr Uechtritz has been a Director
of JB Hi-Fi since May 2011.
Over thirty years’ experience in retailing. Co-founder of
Rabbit Photo and Smith’s Kodak Express. Director of Kodak
(Australasia) Proprietary Limited from July 1998 to July 2000.
59
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Performance Review
2
3
4
10
5
6
7
8
1
9
1. Ryan Stokes AO
Managing Director & Chief Executive Officer –
Seven Group Holdings
B.Com, FAIM
Mr Ryan Stokes AO is Managing Director & Chief Executive
Officer of SGH and has been an Executive Director of the
Company since February 2010. He was previously Chief
Operating Officer of SGH from August 2012 until June 2015.
Mr Stokes is Chairman of WesTrac, Chairman of Coates,
Chairman of Boral, Chairman of Beach Energy and a Director
of Seven West Media. He has extensive experience leading
large private and public organisations, including experience with
corporate transactions, operational discipline and performance.
Mr Stokes has been involved with WesTrac since 2000, has
extensive experience in China with prior operations of WesTrac
and other interests, was a Director of Seven Network Limited
from 2005 and Executive Director and then Chairman of
Pacific Magazines from 2004 until 2008. He was previously
a Director of Yahoo7 from its inception in 2006 until 2013.
Mr Stokes is Chief Executive Officer of Australian Capital
Equity Pty Limited (ACE). ACE is a private company holding a
major interest in SGH. Mr Stokes is Chairman of the National
Gallery of Australia.
Mr Stokes was Chairman of the National Library of Australia.
He was a member of the Prime Ministerial Advisory Council on
Veterans’ Mental Health and was a member of the IOC Olympic
Education Commission.
Mr Stokes holds a BCom from Curtin University and is a
Fellow of the Australian Institute of Management (FAIM).
Mr Stokes was appointed an Officer in the General Division
of the Order of Australia in the Queen’s Birthday honours
on 8 June 2020.
2. Richard Richards
Chief Financial Officer – Seven Group Holdings
B.Com/Law (Hons), LLM (Hons), MAppFin (Hons),
CA and Admitted Solicitor
Mr Richard Richards has been Chief Financial Officer of SGH since
October 2013. He is a Director of SGH Energy and is a Director and
Chair of the Audit and Risk Committee of WesTrac and Coates. He
is a Director of Boral and is a member of their Audit and Risk and
Safety Committees, he is also a Director of Beach and is a member
of their Audit and Risk, Safety and Remuneration Committees and
he is also a Director of Flagship Property Holdings. Mr Richards is
also a Director of Chris O’Brien Lifehouse and Chair of their Audit
and Risk Committee.
Mr Richards joined SGH from the diverse industrial group, Downer
EDI, where he was Deputy Chief Financial Officer responsible for
group finance across the company for three years.
Prior to joining Downer EDI, Mr Richards was CFO for the Family
Operations of LFG, the private investment and philanthropic vehicle
of the Lowy Family for two years. Prior to that, Mr Richards held
senior finance roles at Qantas for over 10 years. Mr Richards is both
a Chartered Accountant and admitted solicitor with over 30 years of
experience in driving business performance and complex financial
structures, corporate governance, risk management and audit.
3. Gitanjali Bhalla
Chief People Officer – Seven Group Holdings
BA, LL.B. (Hons), MIB, MAICD
Ms Gitanjali Bhalla joined SGH in October 2017 and is
Chief People Officer responsible for human resources, culture
and safety across SGH. Ms Bhalla is also a Director of WesTrac,
Boral and Coates.
Ms Bhalla has significant experience leading and delivering
strategy and business transformational change in large
organisations.
Prior to joining SGH, Ms Bhalla spent a number of years
consulting to private and publicly listed companies at Ernst
& Young, both in Australia and overseas, before holding
senior executive roles at UGL and Cushman & Wakefield.
Ms Bhalla is an Ambassador for Good Return, a not for profit
organisation committed to empowering women through
microfinance. Ms Bhalla is also on the Board of Carriageworks.
4. Robert Cotterill
Chief Operating Officer – Seven Group Holdings
B.Eng, M.Com
Mr Rob Cotterill joined SGH in March 2024 as Chief Operating
Officer, working across the portfolio of industrial and energy
businesses within SGH. He is also a Director of WesTrac, Boral
and Coates.
Prior to SGH, Mr Cotterill held various positions within the CIMIC
Group since 2007, overseeing numerous business strategies,
M&A transactions and integrations of large organisations.
His most recent position was the EGM Strategy, Mergers &
Acquisitions at CIMIC from 2019 to March 2024, and was a
member the CIMIC Group Executive Leadership Team.
During his time at CIMIC, Mr Cotterill held various board director
roles overseeing the operational performance and strategic
direction of subsidiary businesses, including Director roles at
Ventia – ASX:VNT from 2015 to 2022, Thiess from 2020 to 2024,
Nextgen from 2015 to 2016 and Metronode from 2015-2016.
He holds a Bachelor of Engineering (Hons) and Masters of
Commerce from the University of NSW.
Executive Management
SGH Annual Report 2024
60
5. Warren Coatsworth
Company Secretary & Legal Counsel
BA, LLB (Hons), LLM, FCSA
Mr Warren Coatsworth has been Company Secretary &
Legal Counsel of Seven Group Holdings since April 2010.
Mr Coatsworth is a solicitor holding a current practising
certificate with degrees in Arts and Law (Hons) from the
University of Sydney. He holds a Master of Laws in Media and
Technology Law from the University of New South Wales as well
as a Graduate Diploma in Applied Corporate Governance. He
is a qualified Chartered Company Secretary and a Fellow and
member of the Governance Institute of Australia.
He has an extensive experience as Legal Counsel at the Seven
Network advising broadly across the company; and was
formerly a solicitor at Clayton Utz.
Mr Coatsworth has held the role of Company Secretary of Seven
West Media since April 2013 and Seven Network since 2005.
6. Jarvas Croome
Chief Executive Officer – WesTrac
B.Eng. (Mechanical) (Hons), B.Comm. (Management),
CPEng
Mr Jarvas Croome has been Chief Executive Officer of
WesTrac since March 2014. Mr Croome is a Director of
WesTrac and Allight.
Mr Croome joined WesTrac from Woodside Energy (USA)
where he was the President of the US organisation based in
Houston TX. Prior to that time, he had held various executive
management roles at Woodside Energy in Australia including
Vice President Australian Business Unit and Vice President
for Technical Services. Prior to Woodside, he had worked as
a global Product and Sales manager for Shell Australia and a
subsea engineer with Kvaerner RJ Brown.
He holds Chartered Professional Engineering (CPEng) status
with Engineers Australia and has been previously registered on
the National Professional Engineers Register. Mr Croome plays
an active role in his local community and is on the board for
Motivation Foundation, a not-for-profit organisation.
7. Adrian Howard
Chief Executive – WesTrac (NSW/ACT)
B.Comm, CA, GAICD
Mr Adrian Howard was appointed Chief Executive of WesTrac in
NSW and the ACT in July 2021 following six years working with
the company. Over that time, Mr Howard’s areas of responsibility
included sales, operations and strategic growth. He worked in a
range of executive positions including Chief Operating Officer.
Prior to joining WesTrac, Mr Howard worked in senior
management roles across various sectors including
manufacturing, distribution and logistics.
His previous experience included time with Patrick and OneSteel
Limited (now InfraBuild), with roles in general management,
strategy, business development and finance.
8. Murray Vitlich
Chief Executive Officer – Coates
B.Bus. (Econ & Fin)
Mr Murray Vitlich joined SGH in June 2017 as Chief Operating
Officer for the Group, working across the portfolio of industrial
businesses within SGH. In July 2019, Mr Vitlich was appointed
Acting Chief Executive Officer, Coates and was formally
awarded the role of Chief Executive Officer, Coates. He is a
Director of Coates and was formerly a Director of SGH Energy,
WesTrac and AllightSykes.
Prior to joining SGH, Mr Vitlich held senior executive operational
roles at Asciano Limited, where he was initially the Director,
Business Development & Strategy before being made the
Managing Director of Patrick Ltd, one of Australia’s leading
stevedoring and terminal operators with terminal operations
in Australia’s four largest ports, coupled with stevedoring and
logistics operations across Australia and New Zealand.
From 2007 to 2008, Mr Vitlich was the Chief Operating Officer
at UGL Limited and spent 15 years with Wesfarmers Limited,
an Australian based diversified conglomerate where he worked
in a variety of operational areas including railroads, forestry
and hardware retailing, as well as spending time in Wesfarmers
Business Development group covering corporate strategy and
mergers & acquisitions.
9. Vik Bansal
Chief Executive Officer – Boral
B.Sc (Eng) (Hons), PG Dip Eng, MBA, AMP, LLM
Mr Vik Bansal commenced as Chief Executive of Boral in
October 2022.
Prior to joining Boral, Mr Bansal was CEO & MD of InfraBuild,
Australia’s largest vertically integrated steel manufacturer
servicing the construction and infrastructure segment. Mr Bansal
is also Chairman of LGI Pty Ltd, a clean energy company based
in Brisbane.
Mr Bansal was Group CEO & MD of Cleanaway waste management
from 2015 to 2021. During his tenure, Cleanaway market cap
increased five times, earnings more than doubled, and the
company consistently delivered in the top quartile of TSR.
He is an Electrical Engineer and has an MBA and AMP from
INSEAD and has completed a Master of Laws in Enterprise
Governance.
10. Margaret Hall
Chief Executive Officer – SGH Energy
B.Eng. (Met) (Hons), GAICD, MIEAust, SPE
Ms Margaret Hall was appointed Chief Executive Officer of
SGH Energy in September 2015 and is also a Director of
SGH Energy.
The CEO role holds responsibility for delivering value from
the SGH Energy oil and gas assets within Australia and the
USA as well as driving growth of this business segment for
the parent company.
Ms Hall has over 30 years of experience in the oil and gas
industry, spanning both super-major and independent companies.
From 2011 to 2014, she held senior management roles in Nexus
Energy with responsibilities covering Development, Production
Operations, Engineering, Exploration, Health, Safety and
Environment. This was preceded by 19 years with ExxonMobil
in Australia, across production and development in the Victorian
Gippsland Basin and Joint Ventures across Australia.
Ms Hall was a Director of Beach from November 2021 to
July 2023, and from then became an Alternate Director.
61
Directors’ Report
Financial Report
Our Businesses
Sustainability Report
Performance Review
Corporate Governance Overview
For the year ended 30 June 2024
This Corporate Governance Overview outlines the
Company’s main corporate governance practices
that were in place throughout the financial year.
The Company’s full 2024 Corporate Governance Statement, which
sets out the Company’s compliance with the 4th edition of the ASX
Corporate Governance Council Corporate Governance Principles
and Recommendations (ASX Recommendations), unless otherwise
stated, is available in the “Corporate Governance” section of the
Company’s website at www.sevengroup.com.au/who-we-are/
corporate-governance. Board and Committee Charters and a
number of the corporate governance policies referred to in the
2024 Corporate Governance Statement are also available at the
above link.
Role and Responsibilities of the Board
The Board is empowered to manage the business of the Company
subject to the Corporations Act and the Company’s Constitution. The
Board is responsible for the overall corporate governance of SGH and
has adopted a Board Charter, which is available on the Company’s
website. The Board Charter sets out the role and responsibilities of
the Board as well as those functions delegated to Management.
Delegation to Management
Subject to oversight by the Board and the exercise by the Board
of functions which it is required to carry out under the Company’s
Constitution, Board Charter and the law, it is the role of management
to carry out functions that are expressly delegated to Management by
the Board, as well as those functions not specifically reserved
to the Board, as it considers appropriate, including those functions
and affairs which pertain to the day-to-day management of the
operations and administration of the Company.
Management must supply the Board with information in a form,
timeframe and quality that will enable the Board to discharge its duties
effectively, including information concerning the Company’s
compliance with material legal and regulatory requirements and any
conduct that is materially inconsistent with the values or Code of
Conduct of the Company.
Board Composition
The Company’s Constitution provides for a minimum of three Directors
and a maximum of 12 Directors on the Board. As at the date of
this statement, the Board comprises nine Directors, including eight
Non-Executive Directors.
The Independent Directors in office are:
–
Mr Terry Davis, Board Chairman;
–
Ms Rachel Argaman (Herman) OAM, Director;
–
Ms Annabelle Chaplain AM, Director;
–
Ms Kate Farrar, Director;
–
Mr David McEvoy, Director;
–
Mr Christopher Mackay, Director; and
–
Mr Richard Uechtritz, Director.
The Non-Independent Directors in office are:
–
Mr Ryan Stokes AO, MD & CEO; and
–
The Hon. Warwick Smith AO, Director.
The qualifications, experience, expertise and period in office
of each Director of the Company at the date of this report are
disclosed in the Board of Directors section of this Annual Report
on pages 58 and 59.
Chairman
The roles of the Chairman and MD & CEO are separate.
Mr Terry Davis is Non-Executive Chairman of the Company.
The Chairman is responsible for leading the Board, facilitating
the effective contribution of all Directors and promoting constructive
and respectful relations between Directors and between the Board
and Management.
The Board has approved the Company’s purpose as
“Recognising and serving exceptional businesses”.
The Company’s purpose is an aspirational reason
for being that inspires a call to action for our people,
operating businesses and stakeholders.
SGH Annual Report 2024
62
Board Independence
The Board comprises a majority of Independent Directors with
seven Independent Directors and two Non-Independent Directors.
In determining whether a Director is independent, the Board
conducts regular assessments and has regard to whether a Director
is considered to be one who:
–
is a substantial shareholder of the Company or an officer of,
or otherwise associated directly with, or represents or has been
within the last three years an officer or employee of, a substantial
shareholder of the Company;
–
receives performance-based remuneration (including options
or performance rights) from, or participates in an employee
incentive scheme of, the Company;
–
is, or has previously been, employed in an executive capacity
by the Company or another Group member, and there has not
been a period of at least three years between ceasing such
employment and serving on the Board;
–
has within the last three years been a principal of a material
professional advisor of, or a material consultant to, the Company
or another Group member, or an employee materially associated
with the service provider;
–
is a material supplier or customer of the Company or other
Group member, or an officer of or otherwise associated directly
or indirectly with a material supplier or customer;
–
has been a director of the entity for such a period that their
independence from Management and substantial holders may
have been compromised; or
–
has a material contractual relationship with the Company or
another Group member other than as a Director.
The Board determines the materiality of a relationship on the basis of
fees paid or monies received or paid to either a Director or an entity
which falls within the independence criteria above.
If an amount received or paid may impact the Earnings Before
Interest, Tax, Depreciation and Amortisation (EBITDA) of SGH in the
previous financial year by more than five per cent, then a relationship
will be considered material.
Due to his position as Managing Director & Chief Executive Officer,
Mr Ryan Stokes AO is not considered to be independent.
The Hon. Warwick Smith AO is not considered to be independent
as he is the chairman of the advisory board of Australian Capital
Equity Group of companies, the entities deemed to be controlled by
Mr Kerry Stokes AC and which are associated with the Company’s
major shareholder.
In the Board’s view, the Independent Directors referred to above
are free from any interest and any business or other relationship
which could, or could reasonably be perceived to, materially
interfere with the Directors’ ability to act with a view to the best
interests of the Company.
The Board believes the management of the Company benefits
from, and it is in the interests of shareholders for Directors on
the Board to have a mix of tenures as currently represented by
Directors on the Board, such that some Directors have served on
the Board for a longer period and have a deeper understanding
of the Company and its operations, and new Directors bring fresh
ideas and perspectives.
While the Board does not consider that independence can be
assessed with reference to an arbitrary and set period of time,
the Board has specifically considered the independence of
longer-serving Non-Executive Directors during the financial year.
The Board determined that these Directors are independent and their
periods of tenure do not interfere with the capacity of each of these
Directors to bring independent judgement to bear on issues before
the Board and to act in the best interests of the entity as a whole.
The Board also considers that given the Company has diverse
operations within a diversified industrials business that have
grown considerably over time, the Company’s performance
and shareholders benefit from having an appropriate number of
longer-serving Directors with detailed knowledge of the history and
experience of SGH’s operations as part of the overall composition of
Directors on the Board.
As part of succession planning on the Board, the Board’s
management of tenure of Directors on the Board also aims to
achieve a period of knowledge transfer between longer-serving
and more recently appointed Directors, prior to the rotation of
longer-serving Non-Executive Directors from the Board.
Appointment of Directors
The policy and procedure for the selection and appointment of
new Directors is set out in an attachment to the Board Charter.
Appointed Directors receive a formal letter of appointment which
set out the terms of their appointment. The date at which each
Director was appointed to the Board is announced to the ASX
and is provided in this Annual Report on pages 58 and 59.
Directors appointed to fill casual vacancies hold office until the
next Annual General Meeting and are then eligible for election by
shareholders. In addition, each Director must stand for re-election
at the third Annual General Meeting of the Company since they were
last elected. The Notice of Meeting for the Annual General Meeting
discloses material information about Directors seeking election or
re-election, including appropriate biographical details, qualifications
and other key current directorships.
Company’s Purpose and Strategic Objective
The Board has approved the Company’s purpose as “Recognising
and serving exceptional businesses”. The Company’s purpose is
an aspirational reason for being that inspires a call to action for our
people, operating businesses and stakeholders. “Recognising”
refers to the potential of our assets and people, understanding
the impact our actions and behaviours have, harnessing collective
capability across SGH to realise future opportunities and ensuring
operating businesses are accountable for delivering results. “Serving”
refers to our individual and collective contributions, being valued by
our people, customers and suppliers and facilitating problem solving
opportunities across the business and outside the Group.
“Exceptional businesses” applies to our investments, our substantive
holdings and to our customers who are critical to the Company’s
success.
The Board and Management believe that fulfilling the Company’s
purpose will create more value for the Company’s operating
businesses and will achieve the Company’s strategic objective
which is “Maximising returns to stakeholders through long-term
sustainable value creation.” The Company will deliver its strategic
objective and create stakeholder value through successful execution
across the following five key areas:
–
Diligent application of capital to maximise outcomes and returns.
–
Unlocking the potential of our people with effective processes
and systems.
–
Focused execution of our strategies and ability to adapt to
dynamic environments.
–
Harnessing SGH’s operating model to drive efficiencies and
effectiveness across sectors, support customers, and to realise
the full potential of our businesses.
–
Contributing to our societies through creating better outcomes
via our involvement.
Board Skills Matrix
The Board has developed a Board Skills Matrix set out in the table
on the following page which is reviewed and updated each year
to reflect the desired skills and experience required to be able to
deliver the strategic objective of the Company. The Board believes
that these skills and experiences are well represented by its current
composition which provides a mix of Directors with specialised
knowledge relating to particular industries in which SGH's
businesses operate as well as general corporate, executive and
Director experience which are appropriate for the Company.
The table also outlines percentage of current Directors possessing
those skills and experience on a weighted average basis.
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Financial Report
Our Businesses
Sustainability Report
Performance Review
Directors’ Report
Skills and Experience
Percentage
Executive leadership
Significant business experience and success at a
senior executive level.
100%
Financial analysis, risk management
and reporting
Executive or equivalent experience in financial
accounting and reporting, corporate finance and
internal financial controls and an ability to probe
the adequacies of financial and risk controls.
87%
Industrial services
Executive or Board level experience in the industrial
services industry, including aspects such as mining,
infrastructure, construction/building materials and
in-depth knowledge of the legislative and regulatory
framework governing this industry.
73%
Media industry
Executive or Board level experience in the media
industry, including in-depth knowledge of the legislative
and regulatory framework governing this industry.
63%
Energy, oil and gas
Executive or Board level experience in the energy,
oil and gas industry, including in-depth knowledge
of the legislative and regulatory framework governing
this industry.
73%
Information technology & cyber security
Executive or Board level experience in the strategic
use and governance of information management,
information technology, cyber security as well
as the oversight of implementation of major
technology projects.
80%
Strategy and corporate activity
Track record in identifying, developing and
implementing a successful strategy, including
appropriately probing and challenging Management
on the delivery of strategic objectives and developing
an asset or investment over the long‑term.
100%
Corporate governance, regulatory,
sustainability and community engagement
Commitment to the highest standards of corporate
governance (including sustainability and community
and stakeholder relations) and Executive or Board
experience with an organisation that is subject to
rigorous governance and regulatory standards.
97%
People, culture and safety
Board remuneration committee membership or
Executive experience relating to human resource
management, workplace health and safety, including
incentive arrangements and the legislative framework
governing employees and remuneration.
93%
Customer value proposition
Experience in entities where the profitability and
success is driven to a large degree, by the strong
customer experience, effective pricing and price
realisation, and superior customer value proposition.
93%
Board Committees
The Board is assisted in carrying out its responsibilities by the Audit
& Risk Committee, the Remuneration & Nomination Committee and
the Independent & Related Party Committee.
Each Committee has its own written Charter which is reviewed on
an annual basis. The Charter of each Committee is available on the
Company’s website.
The Directors’ Report on page 69 sets out the number of Board
and Committee meetings held during the 2024 financial year under
the heading “Meetings of Directors” as well as the attendance of
Directors at those meetings.
Audit & Risk Committee
The Audit & Risk Committee comprises the following
members, all of whom are Independent Directors except for
The Hon. Warwick Smith AO:
–
Ms Annabelle Chaplain AM (Chair);
–
Ms Kate Farrar;
–
Mr Chris Mackay;
–
Mr David McEvoy; and
–
The Hon. Warwick Smith AO.
Ms Chaplain possesses extensive professional experience
on Audit and Risk Committees of substantial Australian listed
companies and her career includes senior roles in investment
banking, financial services, mining, engineering and major
infrastructure services companies. Ms Farrar brings significant
finance, investment and management and board experience to
the Committee. Mr Mackay, a former investment banker and
corporate and banking lawyer, has financial expertise and
considerable experience in business management, capital
allocation, risk management and investment. Mr McEvoy brings
significant board experience and expertise in accounting matters
and operations, including relating to the oil and gas industries as
well as extensive risk management experience. Over the course of a
highly distinguished career, Mr Smith AO has held a variety of senior
roles in finance, banking and government and is considered to
possess financial expertise. For further details, see the biographical
details of the Committee members at pages 58 and 59.
The Board considers the Audit & Risk Committee is comprised
of high-quality members who individually and collectively possess
deep and invaluable knowledge and experience in financial and
audit matters gained across multiple complex ASX companies.
The Committee was further strengthened in August 2019 by
increasing the number of Committee members to five, providing
greater breadth and depth of highly relevant experience on the
Committee in executive, director and audit committee roles.
It is also noted that many CFOs in the ASX now come from a
diverse set of backgrounds but are not necessarily professional
accountants. Furthermore, most Chartered Accountants with Board
roles would have completed their professional qualifications many
years prior and may not necessarily have the most current expertise
across preparation of financial statements and interpretation of
international accounting standards.
Having regard to the experience of the Committee members,
the Board is confident of the Committee’s Chairman’s and
Committee’s strong capability to perceptively review financial
statements and engage constructively with the Company’s External
and Internal Auditors to ensure compliance with relevant reporting
obligations and for the Committee to together satisfy any guidelines
concerning audit and financial expertise on the Committee.
Corporate Governance Overview
SGH Annual Report 2024
64
Remuneration & Nomination Committee
The Remuneration & Nomination Committee comprises the
following members, all of whom are Independent Directors
except for The Hon. Warwick Smith AO:
–
Ms Kate Farrar (Chair);
–
Ms Rachel Argaman OAM;
–
Ms Annabelle Chaplain AM;
–
Mr Terry Davis;
–
The Hon. Warwick Smith AO; and
–
Mr Richard Uechtritz.
Attendance at Committee meetings by Management is at the
invitation of the Committee. Directors who are non-Committee
members may also attend any meeting of the Committee
by invitation.
Independent & Related Party Committee
The Independent Directors (identified on page 62 are members
of the Independent & Related Party Committee (IRPC), which has
Mr Richard Uechtritz as its Chairman.
The Committee provides a forum for the review of material
transactions between the Company and its related parties, including
transactions with Australian Capital Equity Pty Limited and interests
associated with Mr Kerry Stokes AC.
Review of related party transactions by the Committee occurs
without Non-Independent Directors present.
In August 2022, the IRPC reviewed the Committee’s function and
the Company’s governance requirements with regards to interests
associated with entities controlled by Mr Kerry Stokes AC, noting that:
–
Since the Company’s inception the Committee has overseen the
majority of the Company’s complex related party transactions,
being collapsed or externalised to unrelated third parties, with
only a number of branch and residential property leases, on
arm’s length terms, with entities controlled by Mr Kerry Stokes AC
remaining. This has principally involved the conclusion of legacy
service arrangements or the transfer of property interests and
leases relating to several key business sites to third parties.
–
The IRPC was established when the Company’s Executive
Chairman of the Board was Mr Kerry Stokes AC, a non‑independent
Director. As such, the IRPC provided a forum to meet without
non independent Directors present. Following the retirement
of Mr Kerry Stokes AC from the Board in November 2021, the
appointment of Independent Director, Mr Terry Davis, as Board
Chairman and the appointment of Ms Rachel Argaman OAM
in February 2022, the Board has been comprised of seven
Independent Directors and two non-independent Directors.
Accordingly, the Board has strong majority Independent
representation and is compliant with the recommendations of ASX
Corporate Governance Principles with regard to the composition of
the Board and appointment of an Independent Chair.
–
As part of the review of the IRPC’s function, the Board approved
a new SGH Related Party Transaction Policy (RPT Policy) which
sets out processes and procedures for considering related
party transactions whereby any such proposed transaction with
interests associated with the Company’s major shareholder is
referred to the Committee for consideration.
Having regard to the foregoing matters, the Board determined that
meetings of IRPC will be convened from time to time, as required,
to review any proposed related party transactions with interests
associated with the Company’s major shareholder in accordance
with the RPT Policy.
It is also noted that as a result of securities issued by SGH as
consideration for the acquisition of Boral Limited shares and
securities issued by SGH pursuant to the conversion of convertible
securities, the interests associated with Mr Kerry Stokes AC have
been diluted to 50.93 per cent.(1)
In view of the expected infrequency of such transactions, the IRPC
and the Board decided that from August 2022 IRPC members
do not receive separate IRPC fees.
Board, Committee and
Director Performance Evaluation
During the financial year, Directors completed a Board Evaluation
questionnaire concerning Board, Committee and Director, including
Chairman, performance from which aggregated data and responses
were provided to the Chairman and then presented to the Board for
discussion and feedback.
The aggregated questionnaire results also provide the basis of individual
discussions between Directors and the Chairman. The Chairman and
each Board member consider the performance of that Board member
in relation to the expectations for that Board member and consider any
opportunities for enhancing future performance.
During the reporting period, performance evaluations of the Board,
its Committees and individual Directors were carried out in
accordance with this process.
Assessment of Management Performance
The performance of the MD & CEO is formally reviewed by the Board
against the achievement of strategic and budgetary objectives in respect
of SGH’s operations and investments whilst also having regard for his
personal performance in the leadership of SGH. The Board’s review is
carried out annually in regard to certain goals against which he is
assessed, and throughout the year in regard to others, and forms the
basis of the determination of the MD & CEO’s performance-based
remuneration.
The performance of senior executives of the Company are reviewed on
an annual basis in a formal and documented interview process with
either the MD & CEO or the particular executive’s immediate supervisor,
who evaluates performance against agreed performance goals and
assessment criteria in relation to the senior executive’s duties and
material areas of responsibility, including management
of relevant Business Units within budget, motivation and development of
staff and achievement of, and contribution to, the Company’s
objectives. A performance evaluation of the MD & CEO and other senior
executives took place during the year in accordance with
this process.
Governance and SGH Subsidiary
Operating Businesses
The Company’s key operating businesses (subsidiaries), WesTrac,
Coates and SGH Energy are each subject to the additional oversight
of separate management committees which function as subsidiary
‘boards’ with the rigour and formality of a board structure involving
regular meetings and reporting.
These ‘boards’ each consist of Group Executives, including the MD &
CEO, CFO, COO, Chief People Officer and the subsidiary Chief
Executive and provide a forum to review the operations of
the business and to hold each subsidiary accountable. Following the
takeover of Boral, from July 2024 the subsidiary board structure
described above was implemented with respect to Boral.
The subsidiary business Chief Executive has overall operational
accountability for their individual businesses including performance
and day-to-day management, while the Company’s Group level
corporate resources provide central oversight of strategy, finance and
accounting, legal and human resources.
The subsidiary operating business ‘boards’ are supplemented
by specialised operating business committees which assist in relation
to the oversight of key aspects of the business, such
as finance, health and safety, remuneration and/or project
management, as required.
(1) See Notice of Change of Interests of Substantial Holder lodged with the ASX on 4 July 2024.
65
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Sustainability Report
Performance Review
Directors’ Report
–
Respect
–
Owner’s Mindset
–
Courage
–
Agility
Diversity and Inclusion
The Board is committed to supporting open and inclusive workplaces
that embrace and promote diversity and equal opportunity. SGH is an
Equal Opportunity employer and actively invests in programs
to build capability and foster a positive and inclusive culture. The
Board values diversity, including in relation to age, gender, cultural
background and ethnicity and recognises the benefits it can bring
to the organisation. The Board has adopted a Diversity and Equal
Employment Policy, which is available on the Company’s website,
that sets out the Board’s commitment to working towards achieving an
inclusive and respectful environment. Refer to pages 20 to 45 of this
Annual Report for reporting on the Diversity Policy and the measurable
objectives and initiatives relating thereto.
Female Directors comprise 33 per cent of the Board. The Board will
continue to review its composition to ensure that it remains appropriate
for the Company, including with regard to gender diversity, as it
manages succession on the Board.
The key accountabilities for the Board and Executive Team, to
support this agenda are outlined below:
Board
– Sets objective and works to ensure that organisational behaviour
is consistent with an inclusive workplace that embraces diversity.
Management
–
Sets objectives and demonstrates behaviour consistent with an
inclusive workplace that embraces diversity.
–
Adheres to the minimum standards of behaviour outlined in
the Code of Conduct and Diversity and Equal Employment
Opportunity Policies.
–
Reports unacceptable behaviour and appropriately deals
with any complaints made.
Please refer to pages 20 to 45 of this Annual Report for reporting
on Our People and Diversity, Equality and Inclusion initiatives.
The Company’s Workplace Gender Equality Act Public Reports for
2023–2024 is available on its website, which contains the
Company’s Gender Equality Indicators, in the ‘Corporate
Governance’ section of its website.
Code of Conduct and other Company Policies
The Board regularly reviews and approves the Code of Conduct,
including for Directors, available on the Company’s website,
which establishes guidelines for their conduct in matters such
as ethical standards and the disclosure and management of
conflicts of interests.
The Board has implemented a number of other policies and
procedures to maintain confidence in the Company’s integrity
and promote ethical behaviour and responsible decision-making,
including the following policies which are available on the
Company’s website:
–
Continuous Disclosure policy;
–
Share Trading policy;
–
Whistleblower policy;
–
Fraud and Corruption policy;
–
Modern Slavery statement;
–
Diversity and Equal Employment Opportunity policy; and
–
Workplace Health and Safety policy.
Communications with Security Holders
As disclosed in the Continuous Disclosure policy and
Communications policy, which are available on the Company’s
website, the Board aims to ensure that security holders are informed
of all major developments affecting the Company’s state of affairs
and that there is effective two-way communication with security
holders. Shareholders are encouraged to participate in general
meetings and are invited to put questions to the Chairman of the
Board in that forum.
Security holders are given the option to receive communications
from, and to send communications to, the Company and the
Company’s Share Registry electronically, to the extent possible.
It is the Company’s policy that all substantive resolutions at a
meeting of security holders are decided by a poll rather than by
a show of hands.
The Company’s website www.sevengroup.com.au provides various
information about the Company.
Risk Oversight and Management
The Board requires Management to design and implement a risk
management and internal control system to manage the Group’s
material business risks and report to it on the management of those
risks. During the reporting period, Management reported to the
Board as to the effectiveness of the Company’s management of
its material business risks.
Internal Control Framework and
Risk Management Policy
Throughout the financial year, the Company’s Internal Audit
and Process Improvement function evaluated the effectiveness
of the Company’s governance, risk management and internal
control processes by conducting detailed reviews in the areas of
accounting, technology, information and business processes and
operations. The Audit & Risk Committee reviewed and approved the
Internal Audit plan, its resourcing and monitored its independence
and performance.
External Internal Audit specialists have been appointed to conduct
the Company’s Internal Audit reviews under in-house oversight.
The Board considers that this appointment provides an enhanced
level of capability and technical depth which serves to embed
a stronger risk and compliance culture across the organisation,
whilst drawing on best practice and knowledge across operational
and emerging issues. Additionally, efficiencies are gained by the
externally resourced Internal Audit function working closely with
SGH’s external auditor, Deloitte, to ensure audit efforts are
not duplicated and Internal Audit work can be relied upon.
The Company’s Risk Management Policy is available on the
Company’s website.
Corporate Governance Overview
Each of the Company’s key operating businesses reports to
the Company’s Board through regular comprehensive ‘vertical’
business board reports as well as through aggregated ‘horizontal’
Group-level reviews, including finance, health and safety, risk,
human capital management, strategy and customer relations.
This management structure enables the Company to set Group minimum
standards, disseminate and reinforce SGH culture, implement
compliance controls and procedures across SGH and ensure SGH’s
businesses maintain focus on shareholder returns. It also appropriately
safeguards and reinforces the Group’s processes in relation to integrity in
corporate reporting, management of SGH’s disclosure obligations and
SGH’s ability to manage risk.
Core Values
In accordance with its Charter, the Board has reviewed and
approved the following core values of the Company below which function
as guiding principles and expectations for behaviour and
the culture the Board and Management are seeking to embed
across all of SGH.
SGH Annual Report 2024
66
Material Risks
Under the risk framework described above, the Company has
identified investment, financial, operational, environmental and
social risks which it manages and mitigates. Each of the foregoing
material business risks is monitored and managed by appropriate
senior management within the Company who are delegated
responsibility to manage or escalate issues to the Company’s senior
executive team. Where appropriate, external advisers are engaged
to assist in managing the risk. More detail concerning these risks,
and how the Company manages these risks is set out in the
Operating and Financial Review of this Annual Report on
pages 46 to 57 and the Company’s commentary on its
environmental compliance and human capital related initiatives
as well as its community engagement on pages 20 to 45 of this
Annual Report.
Environment and Sustainability
The Company is mindful of climate change and managing the
environmental impact of its operations. Environmental risks are
considered as part of the Company’s risk assessment processes.
Refer to pages 20 to 45 of this Annual Report for the Company’s
sustainability and climate change–related commentary, including
information on SGH’s environmental practices and efforts to minimise
the environmental footprint of its businesses.
External Audit Function
The Audit & Risk Committee meets periodically with the External
Auditor without Management being present. Each reporting
period, the External Auditor provides an independence declaration
in relation to the audit. Additionally, the Audit & Risk Committee
provides advice to the Board in respect of whether the provision
of non-audit services by the External Auditor are compatible with
the general standard of independence of auditors imposed by the
Corporations Act.
The Company’s External Auditor attends all Annual General
Meetings and is available to answer shareholders’ questions about
the conduct of the audit and the preparation and content of the
Auditor’s report.
Declarations by the MD & CEO and CFO
Before the Board approves the financial statements for each of
the half-year and full year, it receives from the MD & CEO and the
CFO a written declaration that, in their opinion, the financial records
of the Company have been properly maintained and the financial
statements are prepared in accordance with the relevant accounting
standards and present a true and fair view of the financial position
and performance of the consolidated group. These declarations
also confirm that these opinions have been formed on the basis of
a sound system of risk management and internal compliance and
control which is operating effectively.
The required declarations from the Chief Executive Officer and
Chief Financial Officer have been given to the Board for the half-year
ended 31 December 2023 and financial year ended 30 June 2024.
Verification of Integrity of
Periodic Corporate Reports
Corporate reports which are not audited or reviewed by the external
auditor are prepared by Executive Management by reference
to company records and systems, with external professional
assistance where appropriate. Such reports, as are included in
the non-audited sections of this Annual Report, are submitted to
a Committee or the Board for consideration.
Remuneration
The Directors consider that the attraction, retention and motivation
of its Directors and senior executives is of critical importance
in securing the future growth of the Company, its profits, share
price and shareholder returns. The aggregate remuneration
for Non-Executive Directors is approved by shareholders.
Fees for Directors are set out in the Remuneration Report on pages
71 to 93.
The objective of the remuneration process for Executive Directors and
senior executives is to ensure that remuneration packages properly
reflect the duties and responsibilities of employees and that
remuneration is at an appropriate but competitive market rate which
enables the Company to attract, retain and motivate people of the
highest quality and best skills from the industries in which the
Company operates.
This policy provides for the MD & CEO to consider the remuneration
packages paid within the industry and the impact these people are
expected to have on the operational and financial performance of the
Company.
Remuneration matters concerning WesTrac, Boral and Coates
Executives who are Key Management Personnel (KMP) of
the Company are brought to the Remuneration & Nomination
Committee for its consideration. Otherwise, WesTrac, Boral and
Coates’ remuneration arrangements and approvals are generally
overseen by their respective Subsidiary Boards and Executive
Committees within a budget approved by the Board and reported to
the Remuneration & Nomination Committee. Following the
Company’s takeover of Boral, from July 2024 the remuneration
processes described above were implemented with respect to Boral.
Hedging Policy
The Company’s Share Trading policy prohibits employees, Directors
and KMP from dealing in the Company’s shares,
if the dealing is prohibited under the Corporations Act.
Therefore, in accordance with this policy, all KMP are prohibited from
entering into arrangements which operate to limit the executives’
economic risk in connection with Seven Group Holdings securities
which are unvested or remain subject to a holding lock. The ability to
deal with unvested rights is restricted in the Employee Share Option
Plan and LTI Plan rules, which apply to any options over shares in the
Company which may be granted from time to time.
This Corporate Governance Overview and the Corporate Governance
Statement, which is available in the “Corporate Governance” section
of the Company’s website at
www.sevengroup.com.au/who-we-are/corporate-governance,
have been approved by the Board and are current as at
14 August 2024.
67
Financial Report
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Sustainability Report
Performance Review
Directors’ Report
Directors’ Report
For the year ended 30 June 2024
The Directors present their report together with the
consolidated financial statements of SGH,
consisting of Seven Group Holdings Limited and the
entities it controlled at the end of, or during, the year
ended 30 June 2024 and the auditor’s report thereon.
Board
The following persons were Board members of Seven Group
Holdings Limited during the whole of the financial year and up
to the date of this report, unless otherwise stated:
–
Terry James Davis (Chairman)
–
Ryan Kerry Stokes AO (Managing Director
& Chief Executive Officer)
–
Rachel Helen Argaman (Herman) OAM
–
Sally Annabelle Chaplain AM
–
Katherine Leigh Farrar
–
Christopher John Mackay
–
David Ian McEvoy
–
The Hon. Warwick Leslie Smith AO
–
Richard Anders Uechtritz
Particulars of their qualifications, experience, special responsibilities
and any directorships of other listed companies held within the last
three years are set out in this Annual Report under the headings
“Board of Directors” and “Corporate Governance Statement” on
pages 58 to 59 and from page 62 and form part of this report.
Mr Warren Walter Coatsworth has been Company Secretary of
Seven Group Holdings Limited since 28 April 2010 and has been
Company Secretary of Seven West Media Limited since April 2013.
Mr Coatsworth is a solicitor holding a current practising certificate
with degrees in Arts and Law (Hons) from the University of Sydney.
He holds a Masters of Law in Media and Technology Law from
the University of New South Wales as well as a Graduate Diploma
in Applied Corporate Governance. He is a qualified Chartered
Company Secretary and a Fellow and member of the Governance
Institute of Australia. Mr Coatsworth has extensive experience as
Legal Counsel at the Seven Network advising broadly across the
company and was formerly a solicitor at Clayton Utz.
Principal Activities
The principal activities of SGH during the financial year were those
of a diversified operating and investment group; with interests in
heavy equipment sales and service, equipment hire, construction
materials, media, broadcasting and energy assets.
Business Strategies, Prospects
and Likely Developments
Information on SGH’s operations and the results of those operations,
financial position, business strategies and prospects for future
financial years has been included in the Operating and Financial
Review (OFR) on pages 46 to 51.
The OFR also refers to likely developments in SGH’s operations in
future financial years and the expected results of those operations.
Information in the OFR is provided to enable shareholders to make
an informed assessment about the operations, financial position,
business strategies and prospects for future financial years of SGH.
Significant Changes in the State of Affairs
In the opinion of the Directors there were no significant changes
in the state of affairs of SGH that occurred during the financial year.
Matters Subsequent to the End of the Financial Year
In July 2024, SGH closed a $600 million Asian Term Loan maturing
in July 2030, the proceeds of which with surplus cash were used to
repay the $700.0 million Bridge facility.
In February 2018, William E Robinson, the former owner of a USA
windows business acquired by Boral, filed claims alleging losses to
that acquisition, seeking damages of US$450 million and punitive
damages. The claim went to trial and was dismissed. The matter
was appealed to the Dallas Court of Appeals, who in June 2024
ruled in favour of Boral. In July 2024, Mr Robinson petitioned the
Texas Supreme Court to allow an appeal. Should the Supreme
Court allow the petition, it will be heard by the Texas Supreme Court.
In July 2024, Boral commenced legal proceedings in the Supreme
Court against Landfill Operations Pty Limited (a Cleanaway
subsidiary) seeking damages for alleged breaches of the landfill
Operating Agreement governing operations at Deer Park in Victoria.
On 4 July 2024, SGH completed its acquisition of all outstanding
ordinary shares in Boral. As a result, 6,654,321 SGH shares were
issued subsequent to year end and cash of $85.9 million was paid
for the Boral shares. On the same date, Boral became part of
Seven Group Holdings Limited’s tax-consolidated group. Boral
shares were removed from the official list of the ASX on 5 July 2024.
Following the Enterprise gas field coming online in June 2024,
early pressure data indicates a smaller resource pool than originally
estimated. This has resulting in a 2P reserves revision of
11.5 MMboe being reflected in Beach Energy’s audited annual
reserves statement released 12 August 2024.
Subsequent to year end, there has been movement in the share
prices of listed investments. The value of SGH’s investments have
varied from what is presented in this financial report. Refer to
Note 28: Events subsequent to balance date for further detail.
Except for the above, in the opinion of the Directors no other
matters or circumstances have arisen since 30 June 2024 that
have significantly affected or may significantly affect:
(a) SGH’s operations in future financial years; or
(b) the results of those operations in future financial years; or
(c) SGH’s state of affairs in future financial years.
SGH Annual Report 2024
68
Meetings of Directors
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year ended 30 June 2024,
and the number of those meetings attended by each Director, were:
Board
Audit & Risk
Remuneration
& Nomination
Independent
& Related Party
Director
(a)
(b)
(a)
(b)
(a)
(b)
(a)
(b)
Terry James Davis
13
13
–
6
5
5
–
–
Ryan Kerry Stokes AO
13
13
–
8
–
5
–
–
Rachel Helen Argaman (Herman) OAM
13
13
–
1
5
5
–
–
Sally Annabelle Chaplain AM
13
13
8
8
5
5
–
–
Katherine Leigh Farrar
13
13
8
8
5
5
–
–
Christopher John Mackay
13
13
8
8
–
–
–
–
David Ian McEvoy
13
13
8
8
–
–
–
–
The Hon. Warwick Leslie Smith AO
13
13
8
8
5
5
–
–
Richard Anders Uechtritz
13
12
–
1
5
5
–
–
(a) The number of meetings held during the year when the person was a Board or Committee member.
(b) The number of meetings attended. Please note Directors may attend meetings of Committees of which they are not a formal member, and in these
instances, their attendance is also included in the above. A Director may also have been absent from a meeting, or part thereof, if there was a conflict
of interest.
Dividends – Ordinary Shares
Since the start of the financial year, a final fully franked dividend for the 2023 financial period of 23.0 cents per share, amounting to
$83.6 million, was paid on 13 October 2023.
Since the start of the financial year, an interim fully franked dividend for the 2024 financial year of 23.0 cents per share, amounting to
$84.0 million, was paid on 12 April 2024.
A final fully franked dividend for the 2024 financial year of 30 cents per share, amounting to $122.1 million will be paid on 2 September 2024,
based on the number of issued shares at the date of this report.
Environmental Disclosure
In respect of the environmental regulations under any laws of the States, Territories and Commonwealth of Australia, the significant
regulations that apply to the media operations of the entities the Company holds investments in are those guidelines and standards
issued by the Australian Communications and Media Authority.
It is the Directors’ understanding that SGH is fully compliant with the provisions of these guidelines and standards. Various State
Environmental Protection Authorities have issued licenses to the Company under the laws of the respective States. All requirements
and conditions of these licenses have been complied with to the satisfaction of the issuing authority.
The Company assesses SGH as part of its compliance with the National Greenhouse and Energy Reporting Act and will be reporting relevant
emissions and energy usage and production for SGH for the financial year to the Clean Energy Regulator.
SGH is also subject to significant environmental regulations in respect of resources exploration, development and production activities.
SGH is committed to undertaking all of its exploration, development and production activities in an environmentally responsible manner.
The Board believes that SGH has adequate systems in place for the management of its environmental requirements and is not aware of any
significant breach of those environmental requirements as they apply to the resources operations of SGH.
There are no other particular and significant environmental regulations under a law of the Commonwealth or of a State or Territory
applying to SGH.
69
Financial Report
Our Businesses
Sustainability Report
Performance Review
Directors’ Report
Directors’ Interests in Securities
The relevant interest of each Director in ordinary shares, options, performance rights or share rights issued by the companies within SGH at
the date of this report is as follows:
Directors’ holdings of Seven Group Holdings Limited securities
Ordinary
Shares
Options over
Ordinary
Shares
Performance
Rights
Share
Rights
Terry James Davis
104,000
Nil
Nil
Nil
Ryan Kerry Stokes AO
574,768
Nil
Nil
102,079
Rachel Helen Argaman (Herman) OAM
12,500
Nil
Nil
Nil
Sally Annabelle Chaplain AM
35,860
Nil
Nil
Nil
Katherine Leigh Farrar
17,587
Nil
Nil
Nil
Christopher John Mackay
11,521
Nil
Nil
Nil
David Ian McEvoy
32,860
Nil
Nil
Nil
The Hon. Warwick Leslie Smith AO
55,109
Nil
Nil
Nil
Richard Anders Uechtritz
335,063
Nil
Nil
Nil
Directors’ holdings of Boral Limited securities
Directors’ holdings of Boral Limited ordinary shares is outlined on page 90. No Director held an interest in options, performance rights or
share rights of Boral Limited during the year.
Options or Performance Rights granted over Ordinary Shares in Seven Group Holdings Limited
On 1 July 2024, 238,371 deferred share rights vested to Executives under the Company’s FY22 STI Plan and a further 180,272 deferred
share rights vested under the Company’s FY23 STI Plan.
An award of 111,898 deferred share rights was made to KMP Executives on 1 July 2024 under the Company’s FY24 STI Plan. A special
equity retention award of 60,144 deferred share rights was made to the Boral CEO on 4 July 2024.
Award
Grant date
Expiry
Number
2022 LTI Planl(a)
1 Jul 21
1 Sep 24
373,029
2023 LTI Plan
1 Jul 22
1 Sep 25
495,662
2024 LTI Plan
1 Jul 23
1 Sep 26
350,390
2024 Equity LTI Plan
4 Jun 24
1 Sep 26
136,075
2025 SGH Equity Retention Plan
4 Jun 24
1 Sep 26
110,538
2024 Equity LTI Plan
28 Jun 24
1 Sep 26
38,495
2025 SGH Equity Retention Plan
28 Jun 24
1 Sep 26
28,028
2025 LTI Plan
1 Jul 24
1 Sep 27
504,504
Total
2,036,721
(a) All performance rights granted under the 2022 LTI Plan will vest following testing of the performance hurdle.
These rights do not carry an entitlement to participate in any share issue. Rights were granted for nil consideration. No other options or rights
have vested or been exercised during or since the end of the financial year, nor have they expired.
Convertible Notes
The Company issued 3,500 Convertible Notes (Notes) in March 2018. The Notes are listed on the Singapore Stock Exchange and mature
seven years from their issue date at their nominal value of $100,000. At the date of this report, one Note remains.
Exchangeable Bond
The Company issued 2,500 Exchangeable Bonds (Bonds) in October 2022. During the year, $249.8 million (representing 99.9 per cent) of the
total principal amount were exchanged into Boral shares and cancelled. The remaining $0.2 million in principal amount was purchased by the
Issuer and cancelled. At the date of this report, there are no Bonds outstanding.
Directors’ Report
SGH Annual Report 2024
70
Message from the Chair of the Remuneration & Nomination Committee
Dear Shareholders,
On behalf of the Board and the Remuneration & Nomination Committee (RNC or the Committee), I am pleased to present the
Remuneration Report for the financial year ended 30 June 2024 (FY24). This report outlines our approach to executive remuneration
and provides an overview of the remuneration policies, practices and outcomes for our Key Management Personnel (KMP) Executives
and Non-Executive Directors (NEDs) during the year.
Acquisition of Boral
Pleasingly SGH was able to complete the acquisition of the remaining shares SGH did not own in Boral. This has resulted in SGH
taking full control of Boral with subsequent delisting. This is a significant milestone for SGH, and we look forward to integrating Boral
into our industrial operations and realising the strong earnings growth and synergies across our combined business. As part of this
work to integrate Boral, our approach will be to align employee remuneration structures and for those with Boral equity, to maintain our
undertakings to keep whole any lapsed equity rights. This approach has been reflected within this report.
Outstanding Performance
FY24 represented a record year of earnings growth up 20% vs FY23, with EBIT of $1.4 billion. This strong business performance
across SGH is the result of key initiatives around earnings growth, cost optimisation and a relentless focus on the customer taking
effect and delivering results.
We have been able to achieve these outcomes while maintaining our Net Debt to EBITDA of 2.2 times, below SGH’s stated ceiling
of 2.5. SGH’s Return on Capital Employed (ROCE) was another strong result at 12.8% which was above SGH’s Budget. This has
been reflected in the growth of SGH’s share price and supported SGH’s transition to ASX100 as well as being included in the MSCI All
Country World Index (ACWI).
Rewarding Performance Outcomes
Consistent with SGH’s demonstrated philosophy of paying for performance, incentives were awarded to executives for delivering
against targets set at the beginning of the year. Outcomes under the Short Term Incentive (STI) were differentiated for performance
and ranged between 89% and 150% of individuals’ on target award opportunities. The FY22 Long Term Incentive (LTI) was tested and
vested at 100% following top quartile Relative Total Shareholder Return (rTSR) performance with SGH’s share price increasing by over
85% over the three-year performance period ended 30 June 2024.
The above underlying EBIT growth result achieved was above the gateway target set under the STI plan. Performance was driven by
a combination of earnings growth, new business and effective cost management and optimisation initiatives. SGH also delivered on
non-financial performance measures, including a sustained uplift in safety improvements, progress against its diversity, equity and
inclusion agenda and sustainability targets.
Further details on the remuneration outcomes and link to performance are included at Section 3 and Section 6 of the Remuneration
Report, with additional detailed disclosures in the financial and sustainability sections of the Annual Report.
Although the remuneration framework for FY24 was largely unchanged to the previous year, updates previously communicated, such
as the introduction of an Earnings Per Share (EPS) hurdle alongside rTSR in the FY24 LTI award, were introduced.
The Boral acquisition and subsequent delisting resulted in equity vesting for the Boral CEO in accordance with the terms and conditions
of the Boral equity plans and consistent with his contractual arrangements. This along with our undertaking and approach to keep
transitioning employees whole, regarding unvested equity rights, is set out further in Section 3 of this report.
Engagement with Stakeholders
We value the input and feedback of our shareholders and their representatives and actively engage with shareholder advisory groups
to seek their views through regular communication outside and during the Annual General Meeting (AGM).
The Board and RNC continue to review and strengthen the performance and reward framework to ensure it supports the delivery
of SGH’s strategy, is aligned with good corporate governance and risk management, and ultimately, delivers sustainable value for
our stakeholders.
Kate Farrar
Chair of the Remuneration & Nomination Committee
Remuneration Report
Year ended 30 June 2024
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Financial Report
Our Businesses
Sustainability Report
Performance Review
Directors’ Report
Remuneration Report – Audited
The Remuneration Report for the year ended 30 June 2024 (FY24) outlines the remuneration arrangements of the Company and SGH in
accordance with the Corporations Act 2001 (Cth) (Corporations Act) and applicable accounting standards. This information has been audited
as required by section 308(3C) of the Corporations Act.
The Remuneration Report is presented under the following main headings:
1.
Introduction
2.
Remuneration Governance
3.
Summary of SGH Performance and FY24 Incentive Outcomes
4.
FY24 KMP Executive Remuneration Framework
5.
Chairman and NED Remuneration Framework
6.
Link Between Remuneration and SGH Performance
7.
Summary of Executive Contracts
8.
KMP Equity Holdings
9.
KMP Related Party Transactions
10. Remuneration in Detail
1.
Introduction
The Remuneration Report outlines key aspects of SGH’s remuneration policy and framework and provides details of remuneration awarded
to KMP during FY24.
KMP includes Executive Directors, NEDs and certain senior executives of SGH who have authority and responsibility for planning, directing
and controlling the activities of SGH (SGH Executives). Executive Directors and SGH Executives are hereafter collectively referred to in this
report as KMP Executives.
SGH’s KMP for FY24 are listed in the table below.
KMP
Title
FY24 Status
KMP Status
Executive Director
Ryan Kerry Stokes AO
SGH Managing Director & Chief Executive Officer
(MD&CEO)
Full Year
Current
Non-Executive Directors
Terry James Davis
Non-Executive Chairman/Director
Full Year
Current
Rachel Helen Argaman (Herman) OAM
Director
Full Year
Current
Sally Annabelle Chaplain AM
Director
Full Year
Current
Katherine Leigh Farrar
Director
Full Year
Current
Christopher John Mackay
Director
Full Year
Current
David Ian McEvoy
Director
Full Year
Current
Warwick Leslie Smith AO
Director
Full Year
Current
Richard Anders Uechtritz
Director
Full Year
Current
SGH Executives
Vik Bansal
Boral CEO & Managing Director (Boral CEO)
Full Year
Current
Gitanjali Bhalla
Chief People Officer
Full Year
Current
Robert Brian Cotterill(a)
Chief Operating Officer
Part Year
Current
Jarvas Ernest Croome
Chief Executive Officer, WesTrac
Full Year
Current
Richard Joseph Richards
Chief Financial Officer (CFO)
Full Year
Current
Murray John Vitlich
Chief Executive Officer, Coates
Full Year
Current
Former KMP Executive
James Nathan Goth(b)
Chief Operating Officer
Part Year
Former
(a) On 18 March 2024, Mr Robert B Cotterill commenced as Chief Operating Officer and KMP.
(b) On 8 March 2024, Mr James N Goth ceased as Chief Operating Officer and KMP.
Remuneration Report
SGH Annual Report 2024
72
2. Remuneration Governance
Role of the Remuneration & Nomination Committee
The role and responsibilities of the RNC are explained in detail in the Corporate Governance Statement available on the Company’s website
at www.sevengroup.com.au. The key responsibilities of the RNC are summarised below and include the following:
–
To make recommendations to the Board in relation to the remuneration of the MD&CEO and NEDs, as necessary, or as requested by the Board;
–
Review and make recommendations to the Board on all proposed equity offers and grants made pursuant to the Company’s equity plans
and the overall functioning of the equity plans; and
–
Review and advise on senior management remuneration, diversity and inclusion strategies, succession planning and employee
development policies, as requested by the Board or the MD&CEO.
Engagement of remuneration advisors
During FY24, no remuneration advisors were engaged by the Company to make any remuneration recommendations relating to KMP as
defined by the Corporations Act.
Remuneration Report approval at the 2023 Annual General Meeting
The FY23 Remuneration Report received positive shareholder support at the 2023 AGM, with 98.85 per cent of votes in favour of adoption.
3. Summary of SGH Performance and FY24 Incentive Outcomes
SGH delivered a strong FY24 financial result driven by the disciplined execution and delivery of our strategy, and profit growth from our
Industrial Services businesses and customer focus. Targets set at the commencement of the period were met, and exceeded in some cases,
opening the STI pool gate with differentiated incentives being awarded to KMP Executives and other senior managers across SGH and its
business units based on business unit and individual performance.
Key Highlights
Strong performance outcomes
–
Compulsory acquisition of Boral completed which resulted in SGH taking full control of Boral with subsequent delisting.
–
Strong earnings growth, effective cost and capital management.
–
Revenue of $10.6 billion up 10% on strong customer demand.
–
EBIT of $1.4 billion up 20% vs FY23, with EBIT margin of 13.4% up 106 bps reflecting strong cost discipline, asset utilisation and pricing
traction.
–
Fully franked ordinary dividend declared of 53 cents per share.
–
Share price growth of 53% over FY24.
–
Leverage at 2.2x.
Focus on sales and customer experience
–
Market share gains from deliberate focus and investment in improved sales capability and customer experience.
–
EBIT margins continue to grow across industrial businesses through a mixture of optimal product mix and pricing discipline.
–
Customer centricity at the heart of operating model design and improvements, including to systems and processes.
People, Safety and Sustainability
–
Safety performance improvements including SGH’s Total Reportable Injury Frequency Rate (TRIFR) improved by 26% to 4.5 for FY24
(including Boral).
–
Consecutive year on year TRIFR improvements in safety performance at Coates and Boral, including 20% and 38% respectively.
–
Diversity, Equity and Inclusion initiatives demonstrating improved female representation of 18.2% vs 17.2% in the prior year and 0% like
for like gender pay gap.
–
Coates winning the NSW National Association of Women In Construction (NAWIC) Crystal Vision Award and finalist for advancing career
progression and promoting participation of women in the construction industry.
–
10 core ESG categories outlined with initiatives to progress embedded in operating model, strategy and reward structure.
These results, together with careful capital management demonstrates the resilience of SGH’s operating businesses and strength
of management capability to continue to drive business momentum and deliver strong, sustainable, and commercial returns.
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Sustainability Report
Performance Review
Directors’ Report
Linking FY24 Incentive Outcomes to SGH Performance
SGH’s reward structure comprises a significant component of KMP Executive remuneration tied to financial performance outcomes. Under
the STI plan, award outcomes are adjusted for Group and Business Unit performance outcomes and differentiated for each individual using a
balanced scorecard approach. Key Performance Indicators (KPI) and Performance Measures used in the STI and LTI plan are approved
by the Board and aligned with SGH’s Strategy as outlined below:
Performance
Measure
STI
LTI
Alignment to strategy
EBIT
Underlying EBIT (EBIT) measures the underlying profitability and performance.
Cash Flow
Cash Flow is a key measure of SGH’s ability to generate cash to fund organic and acquisitive growth
and provide returns to our shareholders via dividends and share buybacks.
ROCE
ROCE is a key measure of SGH’s ability to create value through appropriate return on investments and
capital employed.
TSR
rTSR is a key measure of SGH’s returns to shareholders through business cycles.
EPS
Underlying Adjusted EPS measures the after-tax earnings attributable to shareholders after adjusting for
significant items not reflective of the ongoing earnings potential of the company.
Strategic
Objectives
Personal strategic objectives enable a focus on specific factors aligned with SGH’s short and
medium‑term strategic objectives that promote long-term performance.
People
People objectives take into account progress against clearly defined executive succession and transition
objectives including performance interventions; development of key talent; robust industrial relations
management; engagement objectives and progress against measurable diversity and
inclusion objectives.
Safety and
Sustainability
Safety and Sustainability objectives are included to drive progress against the Material Issues identified in
the SGH Sustainability Strategy as well as a Safety-First working environment.
Incentive Outcomes
FY24 STI
Based on performance for FY24, incentive outcomes for KMP Executives ranged from 89% to 150% of target, differentiated for executive
performance against key financial, strategic and operational objectives. Some executives were awarded above target incentives for
outperformance against key financial and strategic objectives. Further details on STI outcomes are included at Section 6.
FY22 LTI Vesting
Under the FY22 LTI plan, the rTSR performance hurdle was tested at the end of the three-year performance period ended 30 June 2024.
The Company’s rTSR was ranked above the 75th percentile of the comparator peer group resulting in full vesting of the FY22 LTI award.
Further details on the LTI outcomes are included at Section 6.
Treatment of Boral CEO’s equity arrangements following compulsory acquisition
Pursuant to SGH’s compulsory acquisition of Boral, the Boral Board considered and resolved to vest all of the deferred share rights issued
under Boral’s FY23 STI plan and vest a pro-rata number of Boral’s unvested performance rights issued under Boral’s FY23 and FY24 LTI
plans respectively. The Board considered time served and performance to date when determining the LTI vesting outcomes that resulted in
two thirds of the FY23 Boral LTI to vest and one third of the FY24 Boral LTI vesting. The remaining rights lapsed and are dealt with as part of
the SGH make whole awards included in the Bidders statement (further details provided below). From FY25 any equity awards issued under
the STI and LTI plans for Mr. Bansal will be consistent with those of other SGH Executive KMP. Further details on Mr. Bansal’s remuneration
and pay-mix are set out further in this report.
In addition to the vesting of the deferred STI and partial vesting of the LTI, the Boral CEO’s Sign-on award vested in full in line with his
contractual arrangements that provided for full vesting in the event of a change of control and delisting event. A summary of the vesting
outcomes for the Boral CEO is provided in the table below:
Boral Awards
Total
Rights Held
Number of rights
vested and converted to
Boral ordinary shares
Number of
Boral rights
lapsed(a)
Number of SGH rights
issued in lieu of lapsed
Boral rights(a)
FY23 STI Deferred STI – 100% vested
188,915
188,915
–
–
FY23 LTI – 66.6% vested
548,507
365,672
182,835
28,028(b)
FY24 LTI – 33.3% vested
376,667
125,556
251,111
38,495(c)
Sign-on Award – 100% vested
525,984
525,984
–
–
Total
1,640,073
1,206,127
433,946
66,523
(a) The number of SGH Equity Awards allocated was determined in accordance with the terms of the SGH Takeover Offer being the number of lapsed Boral
rights x $6.25/$40.77 (being the Boral and SGH share price respectively communicated in the Takeover Offer).
(b) A new FY25 SGH Equity Retention Award was issued in lieu of the one-third lapsed portion of the Boral FY23 LTI. Vesting under this award is subject to
continued employment over a two-year period, including no notice of termination up to and including 30 June 2026.
(c) A new FY24 SGH Equity LTI Award was issued in lieu of the two thirds lapsed portion of the Boral FY24 LTI. Vesting under this award is subject to the same
terms and conditions of the FY24 SGH LTI (i.e. subject to a 50% rTSR and 50% EPS performance hurdles with vesting determined in August 2026).
Following the completion of the compulsory acquisition and to encourage retention of the Boral CEO over the transition period, a special equity
retention award equivalent of 150% of the Boral CEO’s Fixed Remuneration was awarded in July 2024. Under the award 60,144 SGH share
rights convert to ordinary shares on 1 July 2027, subject to his ongoing employment and no notice of separation up to an including this date.
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4. FY24 KMP Executive Remuneration Framework
Remuneration Principles
SGH’s executive remuneration structure is designed to attract and retain high performing individuals, align executive reward to SGH’s
business objectives, and to create long-term shareholder value. The following diagram illustrates how SGH’s remuneration principles are
linked to, and support, the business’ objectives and their alignment to the long-term interests of shareholders.
Strategic Objective
Maximise return to stakeholders through long-term sustainable value creation
With a focus on disciplined execution, capital allocation and delivering value to customers
Industrial market leading businesses with defendable positions
Energy and Media
Remuneration Philosophy
Market competitive
remuneration which
enables SGH to attract,
retain and motivate people
of the highest calibre.
Remuneration structures
are equitable, and
aligned to the creation
of shareholder value,
implementation of business
strategy and delivering
results.
Targeted goals that
drive high performance
and establish a clear
link between executive
remuneration and
performance.
Remuneration structures
that appropriately balance
short-term delivery and
long-term sustainability.
Remuneration Strategy
Market aligned with listed
companies of a similar
size and complexity, with
individual remuneration
taking into account
capability and experience.
Strong governance
from the Remuneration &
Nomination Committee with
advice from independent
external consultants
as required.
The remuneration
mix properly balances
the responsibilities
of executives with
shareholder outcomes
and is appropriate and
competitive to attract,
retain and motivate.
Remuneration structures
reward performance
that is aligned to the
creation of shareholder
value, implementation of
business strategy and
delivering results.
Short Term Incentives – based on SGH/Business Unit
performance measured against a balanced scorecard, taking
into account individual performance, with no award granted if
a minimum level of financial performance is not attained.
Long Term Incentives – aligned to the long-term interest of
shareholders with any award based on the long-term performance
of SGH, with no award if a minimum level of performance is not
attained.
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Remuneration Framework
KMP Executive remuneration framework consists of both fixed and variable components, with the variable portion contingent upon meeting
financial and non-financial performance measures. This approach ensures that executives are appropriately rewarded based on their
position, responsibilities, and performance within SGH, while also aligning with shareholder interests.
Total remuneration is comprised of three main elements, Fixed Annual Remuneration (FAR), STI and LTI and are designed to enable
executives to earn rewards ranging from the median to the top quartile for outstanding performance against challenging stretch targets.
In order to determine the appropriate level of total remuneration for KMP Executives, SGH follows a policy of benchmarking against a peer group
consisting of Australian listed companies that closely resemble SGH in terms of financial and qualitative metrics.
The peer group analysis also takes into account factors such as market capitalisation, portfolio composition, and the complexity, diversity,
and breadth of the sectors in which SGH operates. By doing so, SGH ensures that its remuneration practices remain competitive within the
industry. A summary of the KMP Executive remuneration framework for FY24 is provided below.
FY24 Remuneration
Delivery
Structure and Mechanism
MD&CEO
Other SGH Executive
Fixed
FAR
$1,900,000
$650,000– $1,200,000
(Boral CEO $1,500,000)
Cash &
Superannuation
– Base Pay and Superannuation
– Aligned with market pay
comparators
– Set to reflect experience and role
complexity
– Ensures attraction and retention
of best candidate
Variable
STI
Target: 100% of FAR
Maximum: 133% of FAR
Target: 75% of FAR
(Boral CEO 100%)
Maximum 100% of FAR
(Boral CEO 150%)
50% Cash
50% Deferred Equity
Vesting after one year
– STI plan gateway is 90% of EBIT
– KPIs are set at the start of the
financial year
– KPIs are weighted between
financial metrics, delivery against
strategic initiatives and safety,
people and sustainability metrics
– 50% of STI paid in cash after the
financial year end
– 50% of STI deferred as equity, set
to vest after one year
LTI
100% of FAR
75–90% of FAR
(Boral CEO 100%)
Performance
3-year vesting
– Rights issued at the start of the
performance year
– 50% rTSR and 50% EPS hurdle
– Vesting awards count towards
Minimum Shareholding Guidelines
Minimum
Shareholding
Guidelines
To further align Executive KMP interests with shareholders, minimum shareholding guidelines are in place that
provide for up to 100% of FAR to be accumulated in equity over 5 years
Remuneration mix
The ratio between fixed and variable remuneration further incentivises Executives to focus on SGH’s short and long-term performance.
In reviewing remuneration for KMP Executives, the Board has remained cognisant of shareholder feedback and of the remuneration mix for
similar companies, with a greater focus on “at risk” reward that provides a strong link between shareholder experience and KMP Executive
remuneration outcomes.
Total Remuneration Mix
Fixed/At Risk
At Target
At Maximum STI
MD&CEO
33%/67%
30%/70%
CFO
38%/62%
34%/66%
Boral CEO
33%/67%
29%/71%
Other SGH Executives
40%/60%
36%/64%
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76
The diagram below shows the mix of cash and equity for at risk remuneration (STI and LTI).
Other KMP Executives
(Average)
Cash/Equity Mix at Target
At Risk Remuneration
Equity
Cash
SGH MD & CEO
25%
75%
25%
75%
Cash/Equity Mix at Maximum STI
28%
72%
29%
71%
Timing of Remuneration Outcomes
The amount an Executive KMP may earn in one financial year, may not become available until a later date, and may be subject to further
conditions including additional performance measures and continued employment. For example, under the STI plan equity awards are
deferred for one year and LTI awards have a three-year performance period.
The diagram below shows the maximum potential timing of remuneration outcomes with a significant component deferred up to three years
for KMP Executives.
Year 2
Year 3
Year 4
Fixed
FR
Base pay and
superannuation
Variable ‘At Risk’
STI
Measurement Period
STI – Cash Payment
STI – Share Rights
Vest after one year
LTI
Measurement Period
LTI – Shares Allocated
Benefit received by KMP
Measurement of STI/LTI Performance
Allocation of shares
FY25 Variable Remuneration Changes
Following a review of KMP Executive remuneration relative to comparable market peers and to increase the alignment of Executive
remuneration with that of shareholder interests and performance, the Board approved increases to variable remuneration from FY25 as
follows:
- For the MD&CEO his STI Maximum Opportunity will increase from 133% to 150% of FAR. His LTI opportunity will increase from 100%
to 150% of his FAR.
- For other KMP Executives their LTI and STI On Target Opportunity will increase to 100% of FAR with their Maximum STI Opportunity
continues to be capped at 133% of Target, with the exception of the CFO whose Maximum STI Opportunity will increase to 150%
of Target.
- There are no changes to the Boral CEO’s STI and LTI opportunities.
STI and LTI Plans
The Board considers the design of SGH’s STI and LTI plans on an annual basis to ensure they remain effective and aligned to SGH’s performance
and reward objectives. Further details on the STI and LTI are set out below:
STI Plan
KMP Executives participate in SGH’s STI plan, which provides the opportunity to receive an annual incentive subject to the achievement of
annual financial targets, strategic and operational performance measures and safety, people and sustainability objectives.
The plan is designed to reward for financial performance and to differentiate outcomes based on individual performance. In addition, 50% of
any STI awards are delivered as deferred equity to further align participant and shareholder interests. The deferral also provides a mechanism
for claw-back in the event of serious misconduct or other reasons determined by the Board.
Following the completion of the compulsory acquisition of Boral, Boral’s STI Plan will align with the SGH plan, including a one year
deferral period from FY24 with deferred share rights converting to SGH ordinary shares on or around 15 August 2025, subject to ongoing
employment up to and including 30 June 2025.
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Financial Gateway
Before any awards accrue under the STI, a minimum level of financial performance above the ‘gateway’ must be achieved across SGH.
This gateway helps to clearly align the interests of shareholders and executives by limiting STI awards where minimum financial performance
by SGH is not achieved.
The financial gateway applied is SGH underlying EBIT compared to target in accordance with the table below. SGH EBIT is SGH’s audited
statutory profit before significant items, net finance costs and income tax. If SGH does not achieve at least 90% of EBIT, no STI awards
become available, and any outcomes are subject to the discretion of the Board.
% of SGH EBIT Achieved*
<90
90–<95
95–<100
100–120
120+
Potential % of On-Target STI Achieved
0
25–50
50–100
100–133**
133**
*
% of Boral EBIT achieved for Boral CEO.
** The Boral CEO is eligible for outperformance of up to 150% of his target STI.
STI Key Performance Indicators (KPIs)
The performance KPIs of each KMP Executive are set and measured using a balanced scorecard approach, based on measurable and
quantifiable targets. The KPls for each KMP Executive are reviewed by the Committee and approved prior to the commencement of the new
financial year. KPls are set to be challenging and to focus management on strategic business objectives that ultimately create shareholder
value. KPIs include financial and non-financial measures that are differentially weighted to reflect the focus of each KMP.
Financial KPls are utilised as they represent value creation and reflect SGH’s core financial metrics. Non-financial KPls drive operational
efficiencies, focus on key customer/project wins and improved safety and productivity in the workplace. Safety targets are based on the
reduction of lead and lag indicators and fostering a Safety First culture through a number of safety lead initiatives. People related KPIs
consider progress against clearly defined turnover, executive succession, culture and engagement objectives and measurable progress
against diversity and inclusion targets. Sustainability measures consider progress against the Material Issues identified in the sustainability
strategy appropriate to each KMP Executive.
Performance Assessments
The RNC assesses the performance of the MD&CEO and makes a recommendation on the STI award to the Board for its consideration,
and if thought fit, approval. The MD&CEO assesses the performance of other KMP Executives against targets and recommends STI awards
for each to the Committee for consideration and, if thought fit, approval.
Target performance is set to ensure alignment with the Board approved budget for the financial year. The potential to receive an above-target
STI award, up to the maximum, is triggered by financial outperformance at the SGH or Business Unit level. The STI awards are then further
calibrated based on individual contribution to business performance and the delivery of strategic priorities. STI awards are not provided in
circumstances where individual performance is unsatisfactory, or the financial performance gateway is not met. The Board retains discretion
to determine whether STI awards are appropriate based on the overall performance of the KMP Executive and SGH, taking into account other
factors such as conduct, risk and behaviours that are aligned to SGH’s Values.
STI Deferred Equity Award
The STI is designed so that 50% of any awards accruing under the STI is delivered as cash and the remaining 50% is delivered as deferred
share rights subject to retention and claw back provisions. Equity awards are deferred for one year. Further details on the deferred share
rights under the STI plan are set out below. Boral’s deferred STI awards prior to the completion of compulsory acquisition were consistent
with the below unless otherwise stated. Refer to Section 3 for outcomes as a result of the compulsory acquisition. For FY25 Mr Bansal will
participate in the SGH STI with terms consistent with those set out below.
STI – Deferred Share Rights
Who will participate?
All KMP Executives will have 50% of their STI award deferred into share rights.
What will be granted?
Subject to the achievement of KPls for the relevant financial year, 50% of STI awards will be delivered as share
rights which will be granted for nil consideration. For SGH Executives, each right entitles the participant to one
ordinary share in the Company after a one-year deferral period.
How many shares rights
will be granted?
The number of share rights granted to each participating KMP Executive is equivalent to 50% of their
STI award divided by the five-day SGH VWAP (Volume Weighted Average Price) to 30 June prior to the
commencement of the vesting period. The SGH VWAP is adjusted for the value of expected dividends foregone
over the vesting period.
What will be the vesting
performance measures?
The share rights granted under the STI plan are subject to continuous employment up to and including
30 June 2025 (with respect to the FY24 award). Rights vest and convert to shares on or around 15 August 2025
following SGH’s FY25 results released to the market.
Do the share rights carry
dividend or voting rights?
The share rights do not carry dividend or voting rights.
What happens in the
event of a change in
control?
In the event of a change of control of the Company, any unvested deferred share rights will vest.
The Board will have discretion to determine whether, and the extent to which, another treatment for some
or all of the awards to lapse or vests, occurs.
What happens if the
participant ceases
employment?
If the participant ceases employment with the Company due to termination for cause or gross misconduct,
or other reasons determined by the Board all unvested share rights will lapse. If the participant ceases
employment other than for the reasons outlined above the share rights may not lapse, unless the Board
determines otherwise.
Vesting period
Deferred Share Rights issued under the STI will convert to ordinary shares following SGH’s results release for the
following financial year (on or around 15 August).
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78
LTI Plan
The purpose of the LTI plan is to drive sustained performance and long-term shareholder value creation, encourage retention of
KMP Executives, and ensure alignment of executive remuneration outcomes with shareholder interests. LTI awards are structured
as rights to acquire ordinary shares in the Company at no cost to the participant and are subject to a rTSR hurdle measured against
S&P/ASX100 companies (excluding financial services companies) and more recently, an EPS hurdle. Once granted, awards only vest if the
performance hurdles over a three‑year performance period are met. For the FY24 award, the three-year performance period commenced
on 1 July 2023 and will conclude on 30 June 2026. Any vested awards will convert to ordinary shares following SGH’s FY26 Results release
to the market (on or around 15 August 2026).
Introduction of second LTI performance hurdle from FY24 – EPS
As communicated in last year’s remuneration report, the Board approved the introduction of a second hurdle, namely EPS, alongside
relative TSR from FY24. Having two LTI measures provides a strong alignment with SGH’s strategy to drive sustainable earnings growth and
shareholder value over the long term. EPS hurdles are determined with reference to the Board approved business plan with commensurate
levels of stretch included. Performance will be assessed based on the aggregate EPS performance, adjusted for significant and other
non-recurring items as determined by the Board, over three years and compared to aggregate target EPS performance for the three-year
performance period. In setting the annual EPS targets, the Board considers a range of factors, including market expectations, and ensuring a
suitable balance to ensure targets are reasonable but sufficiently stretching to promote innovation, acceptable risk taking and superior levels of
performance delivery, as well as being adequately motivating for participants in the plan.
LTI Award
The table below sets out the key features of the SGH LTI Plan. During the year, Boral’s FY24 LTI plan was crystallised following the compulsory
acquisition by SGH. Details on the make whole awards issued to the MD&CEO of Boral are set out in Section 3 and the accompanying
remuneration tables and explanatory notes.
LTI – Performance Rights
What will be granted?
Performance rights are granted for nil consideration. Each right entitles the participant to one ordinary share in the
Company, with vesting subject to the achievement of the performance hurdles.
How many
performance rights
will be granted?
The value of LTI granted annually is:
MD&CEO – 100% of FAR.
Other KMP Executives – 75% to 100% of FAR.
The number of performance rights granted to each KMP Executive is equivalent to the value of the LTI grant divided
by the five-day VWAP to 30 June prior to the commencement of the performance period. SGH awards are adjusted
for dividends foregone.
What will be the
vesting performance
measures?
50% of the performance rights granted under the LTI plan will be dependent on a rTSR measure and the other
50% are subject to an EPS measure.
Why was the TSR
performance hurdle
chosen, and how
is performance
measured?
rTSR provides an indicator of shareholder value creation by comparing the Company’s return to shareholders
relative to other companies of similar size. TSR provides an external, market-based hurdle and creates alignment of
executive remuneration outcomes to shareholder returns. Participants will not derive any benefit from this portion
of the grant unless the Company’s performance is at or above the 51st percentile of the comparator group.
The comparator group chosen for assessing the Company’s rTSR consists of constituents of the S&P/ASX100
(excluding financial services companies). This comparator group was selected as it represents a broad base of
companies against which investors may benchmark their investment.
The comparator group is defined at the start of the performance period. The composition of the comparator group
may change as a result of corporate events, such as mergers, acquisitions, de-listings etc. The Board has agreed
guidelines for adjusting the comparator group following such events and has the discretion to determine any
adjustment to the comparator group.
The percentage of TSR performance rights that vest (if any) at the end of the performance period will be based
on the following schedule:
Proportion of TSR performance
comparator group companies
Company’s TSR ranking
relative to rights that vest
Equal to or above 75th percentile
100%
Between the 51st and up to 75th percentiles
50% vesting on a straight-line basis to 100%
At the 51st percentile
50%
Below 51st percentile
Nil
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Why was the EPS
performance hurdle
chosen, and how
is performance
measured?
EPS measures the after tax earnings attributable to shareholders after adjusting for significant items not reflective of
the ongoing earnings potential of the company. It is calculated by dividing the underlying net profit or loss
(i.e., excluding Significant Items) attributable to the Company for the reporting period by the adjusted weighted
average number of ordinary shares in the Company. The Board has the discretion to make further adjustments to this
figure for additional abnormal or unusual items it considers appropriate.
In each of the three years of the Performance Period, performance hurdles for Threshold EPS and Stretch EPS will
be determined. The Threshold EPS hurdle for each year of the three-year long-term incentive grant will be set with
reference to Budgeted EPS, approved by the Board, and Stretch EPS will be based on Threshold EPS plus 5% (or as
otherwise determined by the Board). The Threshold and Stretch EPS measures for each year will be determined by
the Board at the start of that year and will reflect the Board’s performance expectations for that year.
The percentage of EPS Performance Rights that vest (if any) at the end of the 3-year Performance Period
will be determined by reference to the Company’s aggregate EPS performance over the Performance Period
(i.e. year 1 EPS + year 2 EPS + year 3 EPS) against the aggregate Threshold EPS and Stretch EPS as follows:
Aggregate EPS over
the three-year Performance Period
EPS Performance Rights that vest (%)
Equal to or above the aggregate Stretch EPS
100%
Between the aggregate Threshold EPS and the aggregate Stretch EPS
Straight-line vesting between 50% and 100%
At the aggregate Threshold EPS
50%
Less than the aggregate Threshold EPS
Nil
When will
performance be
tested?
Awards will be subject to a three-year performance period. The three-year performance period commences at the
beginning of the financial year to which the award relates. In the case of the FY24 award, the performance period
commenced on 1 July 2023 and will complete on 30 June 2026. The Board will assess performance to determine
whether, and to what extent, awards vest following the finalisation of SGH’s results in August 2026.
Upon vesting of the rights, the Board has discretion to either issue new shares or acquire shares on market.
Any performance rights that do not vest following testing of performance hurdles will lapse. There is no retesting.
For Mr Ryan Stokes AO, who has an interest in shares in the Company which represents more than 10% of the
Company’s issued share capital, any vested LTI awards will be cash-settled.
Do the performance
rights carry dividend
or voting rights?
Performance rights do not carry dividend or voting rights.
What happens in the
event of a change in
control?
In the event of a change of control of the Company the Board will have discretion to determine whether, and the
extent to which, unvested performance rights vest. The Board will consider when making its decision the extent
to which performance hurdles have been achieved to the date of the event.
What happens if the
participant ceases
employment?
The LTI will only deliver benefits to participants if shareholder returns are achieved and the KMP Executive remains
employed by the Company over the three-year performance period. If the participant ceases employment with the
Company due to termination for cause or gross misconduct, or other reasons determined by the Board all unvested
performance rights will lapse. If the participant ceases employment other than for the reasons outlined above the
performance rights will not lapse, unless the Board determines otherwise.
It is important to note that LTI awards will only deliver benefits to participants if shareholder returns and EPS targets are achieved and the
KMP Executive remains employed by the Company over the three-year performance period. In addition, although awards may not vest
(as performance hurdles are not achieved), accounting standards require the expense relating to equity instruments (such as the performance
rights allocated under the LTI plan) to be reflected over the performance period, notwithstanding executives may never receive any actual
value from such a grant.
Prior LTI grants
Performance rights awarded at the commencement of the performance period to eligible KMP for prior years:
SGH LTI awards
Grant
Performance Measures
Performance Period
Vest Date
Vesting Outcome
FY22
TSR
1 Jul 21 to 30 Jun 24
2024 (3 years) plus 1 year
restriction
100%
FY23
TSR
1 Jul 22 to 30 Jun 25
2025 (3 years)
In progress
FY24
TSR and EPS
1 Jul 23 to 30 Jun 26
2026 (3 years)
In progress
Former Boral LTI awards
Grant
Performance Measures
Performance Period
Vest Date
Vesting Outcome*
2022 (FY23)
TSR
1 Jul 22 to 30 Jun 25
June 2024*
66.7% vested/33.3% lapsed
2023 (FY24)
TSR and EPS
1 Jul 23 to 30 Jun 26
June 2024*
33.3% vested/66.7% lapsed
* The Boral Board approved the vesting of a portion of unvested equity awards following the compulsory acquisition of Boral (refer Section 3).
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SGH MD&CEO Remuneration Arrangements
For FY24, there were no changes to the MD&CEO’s FY24 FAR of $1,900,000 and variable (at-risk) remuneration comprising an on target STI
opportunity of 100% of FAR (and 133% of FAR maximum opportunity) and LTI opportunity of 100% of FAR. For FY25, the Board approved an
increase to the MD&CEO’s Maximum STI Opportunity to 150% of FAR and an increase to his LTI Opportunity from 100% to 150% of FAR.
His FAR remained unchanged at $1,900,000.
The MD&CEO’s remuneration is aligned with SGH’s benchmarking approach to position total reward for KMP Executives principally within a
competitive range of peer group companies, of comparable size and complexity which includes S&P/ASX 100 (excluding financial services)
listed entities. The peer group also considers market capitalisation i.e., ASX100 companies, the portfolio construct and the complexity,
diversity and breadth of the sectors in which SGH operates.
Although the MD&CEO participates in the LTI plan on the same terms and conditions as the other KMP Executives, his award is cash
settled. This is because tax deferral on equity incentive plans is not permitted where an executive has an interest in shares in the Company
which represents more than 10% of the Company’s issued share capital. As such, an approach to achieve an equivalent outcome to other
executives participating in the plan is to cash-settle the rights using the same terms and conditions as for the performance rights that are
equity-settled under the LTI plan. As Mr RK Stokes AO has an interest in shares in the Company which represents more than 10% of the
Company’s issued share capital, should the LTI award rights vest, they will be cash-settled.
Impact of accounting for cash-settled awards
Accounting Standard AASB 2: Share Based Payments requires the fair value of cash-settled equity plans to be re-measured each year,
unlike equity-settled plans where the fair value is calculated at the start of the performance period. The fair value is re-measured taking
into consideration a number of inputs including share price from date of grant. The re-measurement of the fair value of the cash-settled
equity for Mr RK Stokes AO has resulted in an increase of $5,875,967 over the year due to the increase in share price in FY24 from $24.65
at 30 June 2023 to $37.68 at 30 June 2024. If the awards had been equity-settled, the total remuneration reflected in the remuneration tables
at 10.B would have been $5,813,235 as compared to $11,689,202 as currently stated in the table.
Minimum Shareholding Guidelines for KMP Executives
To drive a stronger alignment of executive interests with those of shareholders, and to foster an increased focus on building long-term
shareholder value, SGH has in place minimum shareholding requirements for KMP Executives. During the year, the Board revised
the minimum shareholding requirements to bring forward the timing of when KMP Executives are required to hold a minimum level of
shareholding such that after five years, executives are required to hold 100% of their FAR in SGH equity. As of 30 June 2024, all KMP
Executives were in compliance given time in role. Shareholding details for each KMP are included at Section 8.
5. Chairman and NED Remuneration Framework
NED Fee Pool
The current NED fee pool approved by shareholders at the 2022 AGM available for the payment of fees to the Chairman and NEDs is
$2.8 million. However, following the compulsory acquisition of Boral and subsequent delisting, the Board is reviewing the adequacy of the
fee pool to allow flexibility to appoint additional suitable qualified NEDs and to provide capacity for the Board to manage director succession
over the coming years.
Chairman and NED fees
The Chairman receives a fixed Director’s fee which is paid in the form of cash and statutory superannuation contributions. The Chairman
does not receive any additional fees for being a member of a Board Committee.
NEDs receive a fixed fee which includes a base fee and additional fees for being the Chair or member of a Board Committee. Board and
Committee fees are paid in the form of salary and statutory superannuation contributions. The Chairman and the NEDs do not receive any
variable remuneration or other performance related incentives such as options or rights to shares, and no retirement benefits are provided.
For FY24, the Board approved a 5% increase to Chairman and base NED fees in line with market movements. A $10,000 increase to Audit
Review Committee (ARC) member fees was also approved to reflect the increased responsibilities and requirements of the ARC.
The table below sets out the annualised base and committee fee structure inclusive of superannuation as it applied in FY24. NED fees
are benchmarked against ASX100 listed entities with similar revenues and market capitalisation as the Company. The benchmarking also
considers the complexity of SGH’s structure and the industry sectors in which we operate.
Base Fees
Committee Chair Fees
Committee Member Fees
Role
2024
2023
2024
2023
2024
2023
Chairman
$498,750
$475,000
–
–
–
–
Non-Executive Director
$189,000
$180,000
–
–
–
–
Audit & Risk
–
–
$80,000
$80,000
$40,000
$30,000
Remuneration & Nomination
–
–
$40,000
$40,000
$20,000
$20,000
Independent & Related Party(a)
–
–
–
–
–
–
(a) Effective 1 September 2022, fees paid to the IRPC committee were discontinued following the reduction of significant related party transactions and
consequently meetings held.
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6. Link Between Remuneration and SGH Performance
The Remuneration Framework of SGH is designed to reward superior performance including returns to shareholders. The table below shows
SGH’s performance in key areas for the last five financial years.
2024
2023
2022
2021
2020
Statutory NPAT ($m)(a)(c)
$522.1
$646.5
$607.4
$634.6
$117.5
NPAT (excluding significant items) ($m)(a/b)
$914.1
$702.9
$686.1
$504.6
$ 471.8
Significant items ($m)(a)
$(392.0)
$(56.4)
$(78.7)
$130.0
$(354.3)
Profit before significant items, net finance costs and tax
(SGH underlying EBIT) ($m)
$1,419.2
$1,186.5
$987.1
$792.1
$737.9
Dividends declared per ordinary share
$0.53
$0.46
$0.46
$0.46
$0.42
Share price at financial year end
$37.68
$24.65
$16.61
$20.35
$17.18
Statutory basic EPS(a)
$1.26
$1.64
$1.54
$1.84
$0.34
EPS (excluding significant items)(a)
$2.31
$1.80
$1.73
$1.46
$1.39
Diluted EPS (excluding significant items)(a)
$2.26
$1.78
$1.73
$1.45
$1.38
Total Shareholder Return
56.1%
53.2%
(15.8)%
22.3%
(3.0)%
Relative Total Shareholder Return
42.4%
38.9%
(10.1)%
(2.2)%
5.3%
Short Term Incentive Outcomes
KMP STI achievement against target (Average)(d)
118.5%
110.7%
95.7%
108.6%
91.8%
(a) 2023 and 2022 figures are for continuing and discontinued operations.
(b) NPAT (excluding significant items) is a non-lFRS measure. This measure is applied consistently year on year and used internally by management to assess
the performance of the business and hence is provided to enable an assessment of remuneration compared to SGH’s performance. Refer to the Operating
and Financial Review for a reconciliation to statutory net profit after tax.
(c) The 2024, 2023 and 2022 results include Boral Limited that was fully consolidated from 7 July 2021.
(d) Excludes Boral CEO for 2022 and prior.
FY24 KPIs
The KPI process is core to how SGH drives alignment on performance expectations and the delivery of key financial and strategic objectives
to create shareholder value.
The FY24 KPIs for the MD&CEO and KMP Executives are based on the outcomes of the annual budget and strategic planning process
that includes an in-depth review by the Board. The Board reviews the strategic focus and direction of SGH, taking into account market
opportunity, economic environment and shareholder expectations. This is a rigorous process which includes setting challenging
performance targets for management and directly aligns executive incentives to the achievement of those targets. Where performance does
not meet targets, executives derive no benefit from their variable incentive components. Conduct risk and alignment to SGH’s Values is also
considered when assessing individual outcomes.
The performance of each KMP Executive is measured against a balanced scorecard based on measurable KPI targets which are weighted
to appropriately reflect the focus of each KMP Executive in driving the overall business strategy. KPIs are set across three main areas of focus
namely Financial, Strategic and Safety, People & Sustainability priorities.
1. Financial KPls are utilised as they represent value creation and reflect SGH’s core financial metrics and are based on SGH Board
approved budgets for FY24.
2. Strategic KPIs include financial and non-financial targets to drive portfolio optimisation and operational efficiencies, focus on key
customer/project wins and improved safety and productivity in the workplace. For SGH Executives, measures are based on growing
the SGH portfolio, creating long-term value by maximising the performance of the operating businesses, capitalising on opportunities and
driving the performance of complex elements. For Business Unit CEOs, strategic objectives focus on delivering operational and strategic
projects within the business unit.
3. Safety, People and Sustainability related KPIs are based on the reduction of lead and lag indicators and fostering a Safety First
culture through a number of safety lead initiatives. People related KPIs consider progress against clearly defined turnover, executive
succession, culture and engagement objectives and measurable progress against diversity and inclusion targets. Sustainability measures
consider progress against the Material Issues identified in the sustainability strategy appropriate to each KMP Executive.
Remuneration Report
SGH Annual Report 2024
82
A summary of the key KPIs and assessment outcomes for the MD&CEO and other KMP Executives are included in the tables below,
specific targets are not shown due to their commercially sensitive nature:
MD&CEO and SGH Executive Performance against FY24 KPIs
Scorecard Measure
Weighting/Performance
Financial
50%/Above target
SGH Underlying EBIT
Free Cash Flow (FCF)
Working Capital as % Sales
SGH ROCE
- Delivered above target financial performance across all key metrics across WesTrac, Coates and Boral.
- Revenue of $10.6 billion, up 10% on the prior comparative period.
- EBIT of $1.4 billion, up 20% on the prior comparative period.
- Operating cash flow in line with target and strategic investment in working capital and inventory.
- SGH and BU ROCE delivered in accordance with targets.
Strategic
35%/At target
Boral Performance
Operational Discipline
Portfolio optimisation
Capital management
Customer focus
- Successfully completed full acquisition of Boral and subsequent delisting with full ownership and access to
Boral’s cashflow generation and quality assets.
- Delivery of Boral’s performance journey accelerated and delivering results.
- Effective execution of cost optimisation and efficiency initiatives at WesTrac and Coates.
- Portfolio simplification delivered - with sale of Sykes business and sale of Coates Indonesia completed.
- Capital management (including post Boral transaction) maintained in line with strategy.
- Adjusted Net Debt / EBITDA at 2.2x within target range of <2.5x.
- Delivery of customer focused initiatives with market share growth across all businesses.
Safety, people and
sustainability
15%/At target
Safety (LTIFR and TRIFR)
Culture and engagement
Diversity, Equity and Inclusion
(DE&I)
Sustainability/ ESG
- Significant safety improvements - TRIFR 4.5 and LTIFR 1.4, both improved by 26%.
- Focus on Safety First culture, reinforced by visible safety leadership and early intervention/ remediation plans
delivering results.
- Increased succession optionality across all BUs with promotions in key roles largely internal candidates.
- Engagement delivering positive outcomes.
- Critical skills attraction and retention programs delivered with positive results.
- Increased female participation in workforce with no pay gap in like for like roles. Improvements in operational
areas, apprentice programs and female leadership.
- Progress against delivery of key FY24 ESG commitments across all businesses.
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Sustainability Report
Performance Review
Directors’ Report
Business Unit CEO Performance against FY24 KPIs
Scorecard Measure
Weighting/Performance
Financial
50% Above target
Revenue and EBIT growth
Operating Cash Flow
(OCF) & (FCF)
Working capital as % Sales
ROCE
WesTrac
– Above target Revenue of $5.8 billion, up 19% on the prior comparative period.
– Above target EBIT of $623 million, up 25% on the prior comparative period.
– Disciplined cost control and optimisation of operating capacity delivering margin expansion.
– Effective working capital, cash flow and inventory management supporting customer demand.
– ROCE above target.
Boral
– Above target Revenue of $3.6 billion.
– Above target EBIT of $372 million, up 61% the prior comparative period.
– Positive cash flow and working capital management in line with targets.
– ROCE at target.
Coates
– On target Revenue of $1.1 billion, up on the prior comparative period.
– On target EBIT of $327 million, up 9% on the prior comparative period.
– Cost optimisation and efficiency projects effectively delivering EBIT margin above target.
– ROCE at target.
Strategic
30% At target
Strategic initiatives
including optimisation,
customer and other
strategic goals and
growth opportunities
WesTrac
– Market share growth and business development initiatives effectively delivered with above target performance in
both new machine sales and service revenue and optimal product mix.
– Services revenue delivered underpinned by parts volume growth and product mix towards larger components.
– Customer focused initiatives delivering improved customer value and recognition including WesTrac recognised by
Caterpillar (CAT) as the number one global dealer for construction industry parts and services growth.
– Capacity expansion project delivered including digital (e.g. Palantir) and automation progressing to plan.
– Effective management of skills shortages including international recruitment, strategic workforce management and
targeted training and development programs to areas most impacted (e.g. Train to Task).
Boral
– Solid progress on “Good to Great” performance journey delivering performance uplift.
– Delivered improvements in go-to-market strategy and internal optimisation of key drivers of earnings growth.
– Sales volume up and pricing traction achieved across all product lines.
– Progress on digital integration initiatives e.g. “Call to Cash” transaction process and Auto-Allocations.
– Effective delivery against People Environment Markets Asset Finance (PEMAF) goals to reduce costs and unlock
operational efficiencies and improve performance culture and alignment across all divisions.
Coates
– Effective direct cost management and operational efficiency gains delivered including timing of R&M and transport
optimisation through the “Hub and Spoke” operating model.
– Productivity objectives including asset utilisation, network optimisation, duration, and fleet management, Time
Utilisation delivered in line with strategic plan and targets.
– Focus on improved customer service and efficiencies delivering results.
– Successful sale of Coates Indonesia supporting the focus on primary businesses in Australia.
Safety, people
and sustainability
20% At target
Safety lag and lead
indicator.
Talent management incl.
key skills development,
retention and attraction.
Engagement, leadership
and diversity targets
Sustainability/ESG targets
– Significant uplift in safety performance across all BUs. Boral TRIFR improved by 38%, Coates’ TRIFR improved by 20%.
– Rollout of Safety-First culture initiatives, including visible leadership and on boarding programs delivering results.
– Increased succession optionality across all BUs with promotions in key roles largely with internal candidates.
– Multi-pronged approach to skills development and retention, including reward and recognition programs delivering
results - turnover stabilising with improvements in attraction and overall employee value proposition.
– Increased female participation in workforce with no pay gap in like for like roles. Improvements in operational areas
and apprentice programs and female leadership.
– Progress against delivery of key FY24 ESG commitments across all BUs.
Remuneration Report
SGH Annual Report 2024
84
STI Outcomes – differentiated for individual performance
The table below provides details of the level of performance achieved against balanced scorecard KPls and the resulting STI outcome
awarded for FY24. In the table, a clear link is demonstrated between individual KMP Executive performance and STI outcomes.
KMP Executive
Percentage
of Target STI
Awarded
Percentage
of Maximum
STI Forfeited
Outcome Against Maximum STI Target
0%
100%
RK Stokes AO
120.3%
9.8%
G Bhalla
119.1%
10.7%
JE Croome
125.3%
6.0%
RB Cotterill
105.6%
20.8%
RJ Richards
120.3%
9.8%
MJ Vitlich
89.0%
33.0%
V Bansal
150.0%
0.0%
Target STI
Max STI Forfeited
LTI Outcomes
The following graph shows SGH’s share price relative to the performance of the ASX100 over the performance period.
SGH share price vs S&P/ASX 100
SGH Price
S&P/ASX 100 (indexed)
$10
$15
$20
$25
$45
$40
$35
$30
30 Jun 21
30 Jun 22
30 Jun 23
30 Jun 24
FY22 LTI
The FY22 LTI award was tested following the end of the performance period on 30 June 2024. The Company’s relative TSR was ranked
above the 75th percentile of the comparator peer group resulting in 100% of the award vesting. The award is subject to an additional one year
holding lock with restrictions to be lifted on or around 15 August 2025, following the release of SGH’s FY25 results.
Award
Performance Period
Performance Hurdle
FY22 LTI
1 July 22–30 June 24 – 3 years
Relative TSR
85
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Our Businesses
Sustainability Report
Performance Review
Directors’ Report
7.
Summary of Executive Contracts
The key terms of the KMP Executives’ contracts including the term of the contract, the period of notice required to terminate the contract
(by either the Company or Executive) and any contractual termination payments are set out below.
KMP Executive
Contract Term
Notice period
required by
the Company
Notice period
required by
the Executive
Contractual termination payments
RK Stokes AO
On-going
6 months
6 months
No contractual termination payments
G Bhalla
On-going
6 months
6 months
No contractual termination payments
RB Cotterill
On-going
6 months
6 months
No contractual termination payments
JE Croome
On-going
6 months
6 months
No contractual termination payments
RJ Richards
On-going
6 months
6 months
No contractual termination payments
MJ Vitlich
On-going
6 months
6 months
No contractual termination payments
V Bansal
On-going
6 months
6 months
No contractual termination payments
Non-Executive Directors
There are no formal employment contracts for NEDs that provide notice provisions or contractual termination payments. Each NED has a
formal appointment letter agreed with the Company which confirms their appointment in accordance with the Constitution of the Company
and provides information in relation to the structure and practices of the Board and the Company.
Hedging policy
The Company’s Share Trading Policy prohibits employees (including KMP) from dealing in SGH shares, if the dealing is prohibited under the
Corporations Act 2001. Therefore, in accordance with this policy, all KMP are prohibited from entering into arrangements in connection with
Seven Group Holdings Limited shares which operate to limit the executives’ economic risk under any equity-based incentive schemes.
The ability to deal with unvested rights is restricted in the relevant equity plan rules which apply to the options over shares in the Company
which have been granted. The Company will continue to monitor the appropriateness of this approach.
Clawback and malus provisions
The Company maintains clawback and malus provisions within the variable pay plans. If in the Board’s opinion, an employee:
–
acts fraudulently or dishonestly;
–
is in breach of their obligations to the Company or another SGH company; or
–
received awards based on financial accounts which are later restated.
The Board may determine that unvested performance rights lapse and deem that any vested but unexercised performance share rights also lapse.
8.
KMP Equity Holdings
Equity granted as remuneration
Deferred share rights granted as remuneration
SGH offered certain KMP Executives the opportunity to participate in SGH’s deferred STI share rights plan in respect of performance and
awarded KMP Executives deferred share rights that vest after one year. Share Rights are generally settled through an on-market purchase of
SGH shares at the time of vesting.
Remuneration Report
SGH Annual Report 2024
86
Details of the vesting profile of the deferred share rights held by KMP Executives during FY24 under the STI plan are detailed below.
Deferred share rights
KMP
Grant
Date
Vesting
Date
Fair value
per share at
grant date
Held at
1 July
2023
Granted
Forfeited
Vested
Held at
30 June
2024
RK Stokes AO
1 Jul 23
1 Jul 24
$23.83
–
42,930
–
–
42,930
1 Jul 22
1 Jul 24
$15.34
59,149
–
–
–
59,149
1 Jul 21
1 Jul 23
$19.25
37,675
–
–
(37,675)
–
96,824
42,930
–
(37,675)
102,079
V Bansal(a)
28 Jun 24
1 Jul 26
$35.88
–
28,028
–
–
28,028
–
28,028
–
–
28,028
G Bhalla
1 Jul 23
1 Jul 24
$23.83
–
11,648
–
–
11,648
1 Jul 22
1 Jul 24
$15.34
14,717
–
–
–
14,717
1 Jul 21
1 Jul 23
$19.25
9,757
–
–
(9,757)
–
24,474
11,648
–
(9,757)
26,365
JE Croome
1 Jul 23
1 Jul 24
$23.83
–
18,004
–
–
18,004
14 Oct 22(b)
14 Oct 24
$16.74
46,946
–
–
–
46,946
1 Jul 22
1 Jul 24
$15.34
25,300
–
–
–
25,300
1 Jul 21
1 Jul 23
$19.25
16,828
–
–
(16,828)
–
89,074
18,004
–
(16,828)
90,250
RJ Richards
1 Jul 23
1 Jul 24
$23.83
–
20,335
–
–
20,335
1 Jul 22
1 Jul 24
$15.34
28,079
–
–
–
28,079
1 Jul 21
1 Jul 23
$19.25
25,901
–
–
(25,901)
–
53,980
20,335
–
(25,901)
48,414
MJ Vitlich
1 Jul 23
1 Jul 24
$23.83
–
18,142
–
–
18,142
1 Jul 22
1 Jul 24
$15.34
24,709
–
–
–
24,709
1 Jul 21
1 Jul 23
$19.25
12,358
–
–
(12,358)
–
37,067
18,142
–
(12,358)
42,851
Boral share rights
V Bansal(a)
1 Sep 23
4 Jun 24
$3.98
–
188,915
–
(188,915)
–
10 Oct 22
4 Jun 24
$2.88
262,992
–
–
(262,992)
–
10 Oct 22
4 Jun 24
$2.88
262,992
–
–
(262,992)
–
525,984
188,915
–
(714,899)
–
Former KMP Executive
JN Goth(c)
1 Jul 23
1 Jul 24
$23.83
–
12,986
–
–
12,986
1 Jul 22
1 Jul 24
$15.34
17,680
–
–
–
17,680
1 Jul 21
1 Jul 23
$19.25
13,378
–
–
(13,378)
–
31,058
12,986
–
(13,378)
30,666
(a) Following the compulsory acquisition of Boral by SGH on the 4 June 2024, Mr Bansal’s Boral share rights were vested by the Boral Board. Refer to Section 3
for further information.
(b) Relates to a one off equity retention award equivalent of 60% of Mr Croome’s FAR. These rights vest after two years continued employment in October 2024.
(c) Deferred share rights remain on foot in accordance with Plan rules following Mr Goth’s separation on 8 March 2024.
Performance rights granted as remuneration
SGH offered certain KMP Executives the opportunity to participate in SGH’s LTI. A summary of the LTI plans is provided below.
SGH LTI awards
Grant
Performance Measure
Performance Period
Vest Date
Vesting Outcome
FY22
TSR
1 Jul 21 to 30 Jun 24
2024 (3 years) plus 1 year restriction
100%
FY23
TSR
1 Jul 22 to 30 Jun 25
2025 (3 years)
In progress
FY24
50% TSR and 50% EPS
1 Jul 23 to 30 Jun 26
2026 (3 years)
In progress
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Sustainability Report
Performance Review
Directors’ Report
LTI awards are structured as rights to acquire ordinary shares in the Company at no cost or a cash-settled equivalent to the executive.
Details of the vesting profiles of the performance rights held by KMP Executives during FY24 under the LTI plan are provided below.
Performance rights
Fair Value per right at
grant date(a)
KMP
Grant
Date
Expiry
Date
TSR
Compo-
nent
EPS
Compo-
nent
Held at
1 July
2023
Granted
Forfeited
Vested
Held at
30 June
2024
V Bansal
28 Jun 24
1 Sep 26
$33.47
$36.64
–
38,495
–
–
38,495
–
38,495
–
–
38,495
G Bhalla
1 Jul 23
1 Sep 26
$13.73
$23.13
–
23,627
–
–
23,627
1 Jul 22
1 Sep 25
$8.62
–
35,788
–
–
–
35,788
1 Jul 21
1 Sep 24
$10.86
–
25,550
–
–
–
25,550
1 Jul 20
1 Sep 23
$11.46
–
26,018
–
(3,304)
(22,714)
–
87,356
23,627
(3,304)
(22,714)
84,965
RB Cotterill
18 Mar 24
1 Sep 26
$35.13
$38.14
–
10,970
–
–
10,970
–
10,970
–
–
10,970
JE Croome
1 Jul 23
1 Sep 26
$13.73
$23.13
–
40,503
–
–
40,503
1 Jul 22
1 Sep 25
$8.62
–
61,348
–
–
–
61,348
1 Jul 21
1 Sep 24
$10.86
–
44,191
–
–
–
44,191
1 Jul 20
1 Sep 23
$11.46
–
52,999
–
(6,730)
(46,269)
–
158,538
40,503
(6,730)
(46,269)
146,042
RJ Richards
1 Jul 23
1 Sep 26
$13.73
$23.13
–
48,604
–
–
48,604
1 Jul 22
1 Sep 25
$8.62
–
73,617
–
–
–
73,617
1 Jul 21
1 Sep 24
$10.86
–
57,850
–
–
–
57,850
1 Jul 20
1 Sep 23
$11.46
–
57,818
–
(7,342)
(50,476)
–
189,285
48,604
(7,342)
(50,476)
180,071
MJ Vitlich
1 Jul 23
1 Sep 26
$13.73
$23.13
–
33,753
–
–
33,753
1 Jul 22
1 Sep 25
$8.62
–
51,123
–
–
–
51,123
1 Jul 21
1 Sep 24
$10.86
–
36,156
–
–
–
36,156
1 Jul 20
1 Sep 23
$11.46
–
43,363
–
(5,507)
(37,856)
–
130,642
33,753
(5,507)
(37,856)
121,032
Performance rights (cash settled)
RK Stokes AO
1 Jul 23
1 Sep 26
$13.73
$23.13
–
85,507
–
–
85,507
1 Jul 22
1 Sep 25
$8.62
–
129,512
–
–
–
129,512
1 Jul 21
1 Sep 24
$10.86
–
101,772
–
–
–
101,772
1 Jul 20
1 Sep 23
$11.46
–
102,787
–
(13,053)
(89,734)
–
334,071
85,507
(13,053)
(89,734)
316,791
Boral Performance rights(b)
V Bansal
1 Sep 23
4 Jun 24
$3.74
$4.93
–
376,667
(251,111)
(125,556)
–
10 Oct 22
4 Jun 24
$1.59
–
548,507
–
(182,835)
(365,672)
–
548,507
376,667
(433,946)
(491,228)
–
Former KMP Executive
JN Goth(c)
1 Jul 23
1 Sep 26
$13.73
$23.13
–
28,690
(28,690)
–
–
1 Jul 22
1 Sep 25
$8.62
–
40,898
–
(40,898)
–
–
1 Jul 21
1 Sep 24
$10.86
–
32,139
–
–
–
32,139
1 Jul 20
1 Sep 23
$11.46
–
38,545
–
(4,895)
(33,650)
–
111,582
28,690
(74,483)
(33,650)
32,139
No amount is paid or payable by KMP Executives in relation to these LTI grants.
Further details about the LTI plan are set out in section 4 of the Remuneration Report.
(a) Reflects the fair market value of LTI Rights calculated using a Monte Carlo simulation analysis.
(b) Boral performance rights for LTI were granted subject to Boral performance for TSR and EPS as applicable. Details regarding subsequent vesting is outlined
in Section 3.
(c) Mr Goth ceased as a KMP during the year and as such forfeited performance LTI awarded in FY23 and FY24.
Remuneration Report
SGH Annual Report 2024
88
Equity granted as remuneration affecting future periods
The fair value of equity granted as remuneration is amortised over the service period and therefore remuneration in respect of equity grants
may be reported in future years. The following table summarises the maximum value of these grants that will be reported in the remuneration
tables in future years, assuming all vesting conditions are met. The minimum value of the grant is nil should vesting conditions not be satisfied.
Equity settled
KMP
2025
$
2026
$
RK Stokes AO
1,485,333
591,221
V Bansal
1,025,026
434,591
G Bhalla
408,811
163,363
RB Cotterill
232,033
190,238
JE Croome
813,127
280,050
RJ Richards
790,161
336,064
MJ Vitlich
527,629
233,377
B. Shareholdings and transactions
Movements in the holdings of ordinary shares and by KMP held directly, indirectly, beneficially and including their personally related entities
are set out in the tables below.
Ordinary Shares
KMP
Held at
1 July 2023
Purchases
and other
changes
during
the year
Shares
granted as
remuneration
during
the year
Rights
converted to
shares during
the year
Held at
30 June 2024
TJ Davis
104,000
–
–
–
104,000
RH Argaman (Herman) OAM
12,500
–
–
–
12,500
SA Chaplain AM
35,860
–
–
–
35,860
KL Farrar
17,587
–
–
–
17,587
CJ Mackay
11,521
–
–
–
11,521
DI McEvoy
32,860
–
–
–
32,860
WL Smith AO
52,180
2,929
–
–
55,109
RA Uechtritz
335,063
–
–
–
335,063
KMP Executive
RK Stokes AO
536,981
112
–
37,675
574,768
V Bansal
–
134,604
–
–
134,604
G Bhalla
9,764
(9,308)
–
32,471
32,927
RB Cotterill
–
–
–
–
–
JE Croome
90,956
(57,500)
–
63,097
96,553
RJ Richards
351,202
(130,926)
–
76,377
296,653
MJ Vitlich
50,052
–
–
50,214
100,266
Former KMP Executive
JN Goth
7,666
(392)
–
47,028
54,302
89
Financial Report
Our Businesses
Sustainability Report
Performance Review
Directors’ Report
Subsidiary – Boral Limited
Movements in the holdings of ordinary shares of Boral Limited, a related body corporate, by KMP held directly, indirectly, beneficially and
including their personally-related entities are set out below in the tables below. Other then as outlined below, no other KMP held shares in Boral.
Held at
1 July 2023
Purchases
and other
changes
during
the year
Shares
granted as
remuneration
during
the year
Rights
converted to
shares during
the year
Held at
30 June 2024
Non-Executive Directors and KMP Executive
WL Smith AO
26,250
(26,250)
–
–
–
RK Stokes AO
1,000
(1,000)
–
–
–
V Bansal
–
(1,206,127)
–
1,206,127
–
RJ Richards
1,000
(1,000)
–
–
–
Former KMP Executive
JN Goth
2,000
(2,000)
–
–
–
9.
KMP Related Party Transactions
A number of Key Management Personnel, or their personally related entities, hold positions in other entities that can result in them having
control or significant influence over those entities. A number of these entities transacted with the Company or its subsidiaries during the year.
SGH transacted with entities of which the Directors of the Company, were Directors or Officers (excluding equity accounted investees, which
are disclosed in Note 32 of the Financial Statements) or otherwise had an interest.
The aggregate value of the related party transactions with Director and Director related entities was as follows:
2024
$
2023
$
Revenue
Equipment sales and hire
141,261
440,134
Total revenue
141,261
440,134
Expenses
Lease of premises and related outgoings
3,833,744
3,611,053
Other net expense/(reimbursements)
74,506
98,966
Total expenses
3,908,250
3,710,020
Loans and other transactions with Key Management Personnel
During the year ended 30 June 2024, Mr RK Stokes AO was a Director on the Board of Seven West Media Limited and Beach Energy
Limited, representing Seven Group Holdings Limited. Mr RK Stokes AO received Director’s fees by Seven West Media Limited for services.
Under a consultancy agreement between SGH and Beach, SGH will nominate a company representative to act as a non-executive director.
The SGH representative is currently Mr Stokes AO. Fees in respect of services provided by Mr Stokes in FY24 of $132,635 (2023: nil) are
payable directly to SGH pursuant to this consultancy agreement. Mr Stokes does not receive any director fees or superannuation for his
services as a director to Beach. Mr RJ Richards receives director’s fees for his services provided to Beach Energy Limited. Mr RK Stokes AO
and Mr RJ Richards have elected to not receive Director’s fees for their services provided to Boral Limited. As the amounts are not paid or
payable by Seven Group Holdings Limited, they have not been included in the remuneration disclosures.
Other director fees (SGH Appointed)
2024
$
2023
$
RK Stokes AO
145,659
145,000
RJ Richards
157,075
157,075
Other transactions with SGH
A number of Directors hold directorships in other entities. Several of these entities transacted with SGH on terms and conditions not more
favourable than those available on an arm’s-length basis.
Remuneration Report
SGH Annual Report 2024
90
10. Remuneration in Detail
A. Remuneration earned by KMP Executives in FY24 (non-statutory disclosures)
The remuneration detailed in this table is aligned to the current performance periods and therefore is particularly useful in assessing pay
received in the current year and its alignment with long-term performance. The values in this table will not reconcile with those provided in
the statutory disclosures in table 10.B. For example, table 10.B discloses the value of equity grants which may or may not vest in future years,
whereas this table discloses the value of grants from previous years which vested in FY24.
KMP Executive
Year
Fixed Rem
$(a)
STI Cash
Bonus
$(b)
STI Vesting
$(c)
LTI Vesting
$(d)
Total
Ryan Stokes AO
MD&CEO
2024
1,900,000
1,142,850
1,003,621
–
4,046,471
2023
1,900,000
1,022,833
636,480
606,973
4,166,286
V Bansal(e)
CEO, Boral
2024
1,500,000
1,125,000
4,132,617
2,839,636
9,597,253
2023
1,095,740
752,794
–
–
1,848,534
G Bhalla
CPO
2024
700,000
312,559
259,916
–
1,272,475
2023
700,000
277,519
168,081
152,353
1,297,953
R Cotterill(f)
COO
2024
650,000
74,035
–
–
724,035
2023
–
–
–
–
–
JE Croome
CE, WesTrac
2024
1,200,000
564,000
448,279
–
2,212,279
2023
1,200,000
428,962
469,374
347,737
2,446,073
RJ Richards
CFO
2024
1,200,000
541,350
607,094
–
2,348,444
2023
1,200,000
484,500
393,423
379,356
2,457,279
MJ Vitlich
CE, Coates
2024
1,000,000
333,750
329,204
–
1,662,954
2023
1,000,000
432,250
188,847
260,807
1,881,904
Total Current
KMP Executives
2024
8,150,000
4,093,544
6,780,731
2,839,636
21,863,911
2023
7,095,740
3,398,858
1,856,205
1,747,226
14,098,029
Former KMP Executive
JN Goth(g)
COO
2024
850,000
–
356,375
–
1,206,375
2023
800,000
309,400
63,798
–
1,173,198
(a) Fixed Rem is the annual contracted remuneration that includes base salary, superannuation and any amounts salary sacrificed unless otherwise stated.
(b) The STI Cash is for the year it has been earned, which is paid in the following year.
(c) STI vesting in FY24 is for the FY21 deferred share rights which had holding restrictions lifted on 18 August 2023 (share price of $26.6389). For Mr Richards
the holding restriction lifted 10 July 2023 (share price of $23.439 was used to determine the vested value). For Mr Bansal his STI vesting in FY24 reflects the
vesting of Boral deferred STI and Sign-on awards on 4 June 2024 based on Boral 5-day VWAP of $5.7807. Refer also to Section 3.
(d) No SGH LTI vested in FY24 as the FY20 LTI plan rTSR threshold for vesting was not met. For Mr Bansal his LTI vesting in FY24 reflects the two-thirds vesting
of the FY23 Boral LTI and one-third vesting of the FY24 Boral LTI on 4 June 2024 (based on the 5-day Boral VWAP of $5.7807). Refer also to Section 3.
(e) Fixed Rem for Mr Bansal in 2023 is from 10 October 2022 to 30 June 2023.
(f) Mr Cotterill commenced as Chief Operating Officer and KMP on 18 March 2024. Fixed Rem reported represents the full year equivalent.
(g) Mr Goth ceased as Chief Operating Officer and KMP on 8 March 2024. Fixed Rem reported represents the full year equivalent.
91
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Directors’ Report
B. Remuneration earned by KMP Executives in FY24 (statutory disclosures)
The following table sets out the audited remuneration details for the KMP Executives for the year ended 30 June 2024, calculated in accordance with statutory accounting requirements.
KMP Executive
Year
Salary
& Fees
$
STI Cash
Bonus
$
Non-
monetary
benefits
$(a)
Super-
annuation
benefits
$
Termi-
nation
Benefits
$
Long
service
& annual
leave
$
Deferred
Incentives
$
Perfor-
mance
rights
$
Deferred
shares/
share
rights
$
Cash
settled
equity –
employee
expense
$(b)
Cash
settled
equity –
re-fair
value
$(c)
Total
$
Perfor-
mance
related
rem
%
RK Stokes AO
2024
1,900,000
1,142,850
23,872
–
–
177,825
–
–
1,385,252
1,183,436
5,875,967 11,689,202
82%
MD&CEO
2023
1,900,000
1,022,833
23,792
–
–
112,736
–
–
1,055,611
1,133,191
2,781,219
8,029,382
75%
V Bansal(d)
2024
1,451,884
1,125,000
–
48,116
–
82,066
–
1,367,542
2,412,128
–
–
6,486,736
76%
CEO, Boral
2023
1,125,296
752,794
–
18,969
–
17,695
–
240,312
418,000
–
–
2,573,066
55%
G Bhalla
2024
667,605
312,559
18,488
27,399
–
12,395
–
317,700
370,285
–
–
1,726,431
58%
CPO
2023
653,708
277,519
18,452
28,949
–
45,427
–
294,710
276,620
–
17,831
1,613,216
54%
RB Cotterill(e)
2024
181,444
74,035
3,373
6,850
–
14,423
–
38,843
14,807
–
–
333,775
38%
COO
2023
–
–
–
–
–
–
–
–
–
–
–
–
–
JE Croome
2024
1,172,601
564,000
24,934
27,399
–
88,064
–
546,033
1,018,728
–
–
3,441,759
62%
CE, WesTrac
2023
1,169,773
428,962
–
30,227
–
46,522
–
538,702
746,503
–
–
2,960,689
58%
RJ Richards
2024
1,172,601
541,350
13,492
27,399
–
84,614
–
672,691
656,476
–
–
3,168,623
59%
CFO
2023
1,174,708
484,500
13,452
25,292
–
66,587
–
641,807
552,033
–
–
2,958,379
57%
MJ Vitlich
2024
972,601
333,750
14,050
27,399
–
(2,436)
–
452,604
509,322
–
–
2,307,290
56%
CE, Coates
2023
974,708
432,250
–
25,292
–
(2,565)
–
443,424
421,758
–
–
2,294,867
57%
Total Current
KMP Executives
2024
7,518,736 4,093,544
98,209
164,562
-
456,951
-
3,395,413 6,366,998
1,183,436
5,875,967 29,153,816
2023
6,998,193
3,398,858
55,696
128,729
–
286,402
–
2,158,955
3,470,525
1,133,191
2,799,050 20,429,599
Former KMP
Executive
JN Goth(f)
2024
496,533
–
19,955
20,549
–
(31,244)
–
(1,170)
245,094
–
–
749,717
33%
COO
2023
774,708
309,400
13,452
25,292
–
(5,917)
–
381,099
330,944
–
–
1,828,978
56%
(a) Non-monetary benefits include costs relating to Company events and the associated fringe benefits tax.
(b) These values have been calculated under accounting standards. The values may not represent the future value that the KMP Executive will receive, as the vesting of the performance rights and cash-settled equity is subject to the
Company achieving pre-defined performance hurdles.
(c) Under AASB 2: Share Based Payments, the fair value of cash settled equity awards is re-measured each reporting period. The movement in the fair value of the cash settled equity awards is driven by the movement in share price
since grant date. As a result, the fair value of the cash settled equity awards for Mr RK Stokes AO increased by $5,875,967. If the awards had been equity settled, the total remuneration reflected in the remuneration table would
be $5,813,235 compared to $11,689,202.
(d) Mr Bansal’s 2024 performance rights and deferred share rights expense includes the expense related to the full and partial vesting of Boral issued equity as outlined in Section 3. The 2023 remuneration is included from date of
his appointment being 10 October 2022.
(e) Mr Cotterill commenced as Chief Operating Officer on 18 March 2024.
(f) Mr Goth ceased as Chief Operating Officer and KMP on 8 March 2024.
Remuneration Report
SGH Annual Report 2024
92
C. Remuneration for Non-Executive Directors in FY24
The following table sets out the audited remuneration details for the Non-Executive Directors for the year ended 30 June 2024,
calculated in accordance with statutory accounting requirements.
Non-Executive Director
Year
Salary
& fees
$
Non-
monetary
benefits
$
Super-
annuation
benefits
$
Total
$
TJ Davis
Chairman
2024
471,351
–
27,399
498,750
2023
449,708
–
25,292
475,000
RH Argaman OAM
Non–Executive Director
2024
188,288
–
20,712
209,000
2023
180,995
–
19,005
200,000
SA Chaplain AM
Non–Executive Director
2024
289,000
–
–
289,000
2023
270,687
–
12,646
283,333
KL Farrar
Non–Executive Director
2024
242,342
–
26,658
269,000
2023
229,321
–
24,012
253,333
CJ Mackay
Non–Executive Director
2024
223,327
–
5,673
229,000
2023
203,039
–
10,294
213,333
DI McEvoy
Non–Executive Director
2024
206,306
–
22,694
229,000
2023
193,062
–
20,271
213,333
WL Smith AO
Non–Executive Director
2024
249,000
–
–
249,000
2023
219,072
–
10,928
230,000
RA Uechtritz
Non–Executive Director
2024
188,288
–
20,712
209,000
2023
184,012
–
19,321
203,333
Total Non–Executive Directors
2024
2,057,902
–
123,848
2,181,750
2023
1,929,896
–
141,769
2,071,665
End of audited Remuneration Report
93
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Directors’ Report
Indemnity
The Constitution of the Company provides an indemnity to any
current or former Director and secretary of the Company against any
liabilities incurred by that person, or arising out of, the discharge of
duties as an officer of the Company or the conduct of the business
of the Company, including associated legal costs defending any
proceedings relating to that person’s position with the Company in
specified circumstances.
As permitted by the Constitution of the Company, the Company has
entered into deeds of access, insurance and indemnity with each
Director as at the end of the financial year.
No amounts were paid and no actions taken pursuant to these
indemnities during the year.
Insurance Premiums
The Company has paid insurance premiums in respect of a
directors’ and officers’ liability insurance contract insuring against
certain liabilities (subject to exclusions) of all current and former
officers of the Company and its subsidiaries, including all Directors
named in this report, the Company Secretary and all persons
concerned in, or taking part in the management of, the Company
and its controlled entities, and former Directors and officers who
have retired or relinquished their positions.
The insurance policies prohibit disclosure of the premiums paid in
respect of those policies and the nature of the liabilities insured by
the policies.
Non-Audit Services
During the year Deloitte Touche Tohmatsu, the Company’s
auditor, has performed certain other services in addition to their
statutory duties.
The Board has considered the non-audit services provided during
the year by the auditor and, in accordance with the advice received
from the Audit & Risk Committee, is satisfied that the provision
of those non-audit services during the year by the auditor is
compatible with, and did not compromise, the auditor independence
requirements of the Corporations Act 2001 for the following reasons:
–
all non-audit services were subject to the corporate governance
procedures adopted by the Company and have been reviewed
by the Board in terms of the Company’s formal Auditor
Independence Policy to ensure that they do not impact the
integrity and objectivity of the auditor; and
–
the non-audit services provided do not undermine the general
principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants, as they
did not involve reviewing or auditing the auditor’s own work,
acting in a management or decision making capacity for the
Company, acting as an advocate for the Company or jointly
sharing risks and rewards.
A copy of the auditor’s independence declaration as required under
section 307C of the Corporations Act 2001 is set out on page 95.
Amounts paid or payable by SGH to the auditor, Deloitte Touche
Tohmatsu, for non-audit services provided during the year are set
out in Note 33 to the Financial Report.
Rounding Off
The Company is of a kind referred to in ASIC Instrument 2016/191
and in accordance with that Instrument, amounts in the Directors’
Report and consolidated financial statements have been rounded off
to the nearest whole number of millions of dollars and one place of
decimals representing hundreds of thousands of dollars.
Signed for and on behalf of the Board of Directors and in
accordance with a resolution of the Directors.
Terry James Davis
Chairman
Sally Annabelle Chaplain AM
Chair of the Audit & Risk Committee
Sydney
14 August 2024
Directors’ Report
SGH Annual Report 2024
94
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95
Financial Report
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Sustainability Report
Performance Review
Directors’ Report
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
97
Consolidated Statement of Financial Position
98
Consolidated Statement of Changes in Equity
99
Consolidated Cash Flow Statement
100
Notes to the Financial Statements
101
Basis of Preparation
1
Basis of preparation
101
Results for the Year
2
Operating segments
103
3
Significant items
106
4
Revenue and expenditure
107
5
Net finance expense
108
6
Income tax
109
7
Earnings per share
111
Operating Assets and Liabilities
8
Trade and other receivables and Contract assets
112
9
Trade and other payables
112
10
Inventories
113
11
Investments accounted for using the equity method
113
12
Right of use assets and Lease liabilities
117
13
Property, plant and equipment
119
14
Producing and development assets
120
15
Intangible assets
123
16
Provisions
125
17
Employee benefits
127
Cash Management
18
Cash and cash equivalents
131
19
Notes to the cash flow statement
131
20
Interest bearing loans and borrowings
132
Financial Assets and Liabilities
21
Financial risk management
134
22
Derivative financial instruments
142
Capital Structure
23
Capital
146
24
Reserves
147
25
Dividends
148
Unrecognised Items
26
Contingent liabilities
149
27
Commitments
150
28
Events subsequent to balance date
150
Group Structure
29
Parent entity disclosures
151
30
Controlled entities
152
31
Disposal of businesses
157
Other
32
Related party disclosures
158
33
Auditor’s remuneration
159
Consolidated Entity Disclosure Statement
159
Directors’ Declaration
162
Independent Auditor’s Report
163
Shareholder Information
168
Investor Information
169
Company Information
169
Corporate Directory
Back cover
Financial Report
SGH Annual Report 2024
96
CONTINUING OPERATIONS
Note
2024
$m
2023
$m
Revenue
4
10,617.5
9,626.5
Other income
35.1
41.4
Share of results from equity accounted investees
11
(118.2)
199.6
Net gain on disposal of controlled entities
31
76.3
–
Impairment of equity accounted investees
3
(135.3)
(75.9)
Expenses excluding depreciation and amortisation
4
(8,902.0)
(8,139.0)
Profit before depreciation, amortisation, net finance expense and income tax
1,573.4
1,652.6
Depreciation and amortisation
(505.4)
(511.6)
Profit before net finance expense and income tax
1,068.0
1,141.0
Finance income
5
40.3
23.2
Finance expense
5
(342.5)
(298.0)
Net finance expense
(302.2)
(274.8)
Profit before income tax
765.8
866.2
Income tax expense
6
(243.7)
(209.8)
Profit for the year from continuing operations
522.1
656.4
Loss for the year from discontinued operations
31
–
(9.9)
Profit for the year
522.1
646.5
Profit for the year attributable to:
Equity holders of the Company
464.4
596.6
Non-controlling interest
57.7
49.9
Profit for the year
522.1
646.5
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Net change in fair value of financial assets at fair value through other comprehensive income
(17.4)
(8.0)
Income tax relating to items that will not be reclassified subsequently to profit or loss
4.4
(5.0)
Total items that will not be reclassified subsequently to profit or loss
(13.0)
(13.0)
Items that may be reclassified subsequently to profit or loss
Cash flow hedges: effective portion of changes in fair value
(9.9)
(40.9)
Foreign currency differences for foreign operations
24
(0.5)
1.9
Foreign currency translation reserve transferred to profit or loss
24
(13.6)
–
Income tax relating to items that may be reclassified subsequently to profit or loss
3.9
12.2
Total items that may be reclassified subsequently to profit or loss
(20.1)
(26.8)
Total comprehensive income for the year
489.0
606.7
Total comprehensive income for the year attributable to:
Equity holders of the Company
431.5
561.6
Non-controlling interest
57.5
45.1
Total comprehensive income for the year
489.0
606.7
Statutory earnings per share (EPS)
$
$
From continuing operations
Basic earnings per share
7
1.26
1.66
Diluted earnings per share
7
1.23
1.65
From continuing and discontinued operations
Basic earnings per share
7
1.26
1.64
Diluted earnings per share
7
1.23
1.63
The Consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to the
financial statements.
Primary Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2024
97
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Our Businesses
Sustainability Report
Performance Review
Financial Report
Note
2024
$m
2023
$m
Current assets
Cash and cash equivalents
18
654.3
876.5
Trade and other receivables
8
1,320.1
1,455.7
Contract assets
8
201.1
173.6
Inventories
10
1,991.1
1,501.0
Current tax assets
15.4
25.6
Other current assets
151.0
189.7
Derivative financial instruments
22
8.4
37.7
Assets classified as held for sale
7.3
3.2
Total current assets
4,348.7
4,263.0
Non-current assets
Other receivables
8
3.5
20.0
Inventories
10
346.8
345.7
Investments accounted for using the equity method
11
1,325.5
1,701.3
Other financial assets
66.1
96.2
Right of use assets
12
706.7
711.8
Property, plant and equipment
13
3,642.1
3,497.9
Producing and development assets
14
627.7
476.5
Intangible assets
15
2,220.4
2,222.2
Deferred tax assets
6
137.3
108.8
Other non-current assets
37.2
36.1
Derivative financial instruments
22
142.1
150.4
Total non-current assets
9,255.4
9,366.9
Total assets
13,604.1
13,629.9
Current liabilities
Trade and other payables
9
1,459.7
1,124.6
Lease liabilities
12
73.9
71.3
Interest bearing loans and borrowings
20
701.6
450.4
Deferred income
4
519.3
555.1
Current tax liability
83.2
25.2
Provisions
16
187.6
101.8
Employee benefits
17
200.0
199.5
Derivative financial instruments
22
3.0
7.6
Total current liabilities
3,228.3
2,535.5
Non-current liabilities
Other payables
7.9
2.0
Lease liabilities
12
916.2
913.2
Interest bearing loans and borrowings
20
4,284.9
4,442.8
Deferred tax liabilities
6
525.2
572.0
Provisions
16
439.4
470.3
Employee benefits
17
16.4
17.4
Derivative financial instruments
22
67.9
61.4
Total non-current liabilities
6,257.9
6,479.1
Total liabilities
9,486.2
9,014.6
Net assets
4,117.9
4,615.3
Equity
Contributed equity
23
4,762.4
3,375.3
Reserves
24
(3,031.3)
(1,526.6)
Retained earnings
2,358.4
2,061.6
Total equity attributable to equity holders of the Company
4,089.5
3,910.3
Non-controlling interest
28.4
705.0
Total equity
4,117.9
4,615.3
The Consolidated statement of financial position is to be read in conjunction with the notes to the financial statements.
Primary Statements
Consolidated Statement of Financial Position
As at 30 June 2024
SGH Annual Report 2024
98
YEAR ENDED 30 JUNE 2024
Note
Contributed
equity
$m
Reserves
$m
Retained
earnings
$m
Total
$m
Non-
controlling
interest
$m
Total
equity
$m
Balance as at 1 July 2023
3,375.3
(1,526.6)
2,061.6
3,910.3
705.0
4,615.3
Profit for the year
–
–
464.4
464.4
57.7
522.1
Net change in fair value of financial assets
measured at fair value through OCI
24
–
(17.4)
–
(17.4)
–
(17.4)
Cash flow hedges: effective portion of
changes in fair value
24
–
(9.6)
–
(9.6)
(0.3)
(9.9)
Foreign currency differences for
foreign operations
24
–
(0.5)
–
(0.5)
–
(0.5)
Recycling of foreign currency translation
24
–
(13.6)
–
(13.6)
–
(13.6)
Income tax on items of OCI
24
–
8.2
–
8.2
0.1
8.3
Total comprehensive income for the year
–
(32.9)
464.4
431.5
57.5
489.0
Transactions with owners recognised
directly in equity
Dividends paid
25
–
–
(167.6)
(167.6)
(67.5)
(235.1)
Shares issued from convertible notes
23
44.7
–
–
44.7
–
44.7
Non-controlling interest on partial disposal of
controlled entity without loss of control
–
24.1
–
24.1
30.2
54.3
Acquisition of non-controlling interest
1,371.5
(1,475.5)
–
(104.0)
(693.3)
(797.3)
Share based payments from controlled entity
–
(18.0)
–
(18.0)
(3.5)
(21.5)
Treasury shares acquired
23
(40.8)
–
–
(40.8)
–
(40.8)
Shares vested and transferred to employees
23
11.7
(11.7)
–
–
–
–
Share based payments
–
9.3
–
9.3
–
9.3
Total contributions by and distributions
to owners
1,387.1
(1,471.8)
(167.6)
(252.3)
(734.1)
(986.4)
Total movement in equity for the year
1,387.1
(1,504.7)
296.8
179.2
(676.6)
(497.4)
Balance as at 30 June 2024
4,762.4
(3,031.3)
2,358.4
4,089.5
28.4
4,117.9
YEAR ENDED 30 JUNE 2023
Balance as at 1 July 2022
3,410.5
(1,495.8)
1,634.8
3,549.5
734.2
4,283.7
Effect of accounting policy change
–
–
(2.7)
(2.7)
–
(2.7)
Adjusted balance as at 1 July 2022
3,410.5
(1,495.8)
1,634.8
3,546.8
734.2
4,281.0
Profit for the year
–
–
596.6
596.6
49.9
646.5
Net change in fair value of financial assets
measured at fair value through OCI
24
–
(8.4)
–
(8.4)
0.4
(8.0)
Cash flow hedges: effective portion of
changes in fair value
23
–
(33.6)
–
(33.6)
(7.3)
(40.9)
Foreign currency differences for
foreign operations
23
–
1.9
–
1.9
–
1.9
Income tax on items of OCI
23
–
5.1
–
5.1
2.1
7.2
Total comprehensive income for the year
–
(35.0)
596.6
561.6
45.1
606.7
Transactions with owners recognised
directly in equity
Dividends paid
25
–
–
(167.1)
(167.1)
(3.2)
(170.3)
Acquisition of non-controlling interest
–
(24.9)
–
(24.9)
(71.1)
(96.0)
Recognition of exchangeable bond
–
22.7
–
22.7
–
22.7
Repurchase of convertible notes
(27.5)
(0.2)
–
(27.7)
–
(27.7)
Treasury shares acquired
23
(11.1)
–
–
(11.1)
–
(11.1)
Shares vested and transferred to employees
23
3.4
(3.4)
–
–
–
–
Share based payments
–
10.0
–
10.0
–
10.0
Total contributions by and distributions
to owners
(35.2)
4.2
(167.1)
(198.1)
(74.3)
(272.4)
Total movement in equity for the year
(35.2)
(30.8)
429.5
363.5
(29.2)
334.3
Balance as at 30 June 2023
3,375.3
(1,526.6)
2,061.6
3,910.3
705.0
4,615.3
The Consolidated statement of changes in equity is to be read in conjunction with the notes to the financial statements.
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
99
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Our Businesses
Sustainability Report
Performance Review
Financial Report
Note
2024
$m
2023
$m
Cash flows related to operating activities
Receipts from customers
11,569.6
10,663.7
Payments to suppliers and employees
(10,299.5)
(9,142.1)
Dividends and distributions received from equity accounted investees
11
38.3
44.8
Other dividends received
2.9
4.0
Interest and other items of a similar nature received
40.1
22.3
Interest and other costs of finance paid
(294.7)
(280.4)
Income taxes paid
(235.7)
(84.0)
Restructure and transaction costs paid
(12.8)
(34.7)
Net operating cash flows
19
808.2
1,193.6
Cash flows related to investing activities
Payments for purchases of property, plant and equipment
(525.7)
(498.2)
Proceeds from sale of property, plant and equipment
40.7
37.7
Payments for purchase of intangible assets
(2.6)
(2.3)
Payment for production and development expenditure
(146.7)
(103.3)
Payments for other investments
(0.2)
(0.5)
Proceeds from sale of other financial assets
5.4
54.4
Return of capital from investment in equity accounted investee
–
13.9
Proceeds from sale of controlled entities, net of cash disposed and transaction costs
31
152.4
14.5
Acquisition of controlled entities, net of cash acquired
(45.2)
–
Acquisition of equity accounted investees
–
(45.1)
Proceeds from partial disposal of controlled entity without loss of control
31
54.3
–
Net investing cash flows
(467.6)
(528.9)
Cash flows related to financing activities
Payments for issue of shares
(0.1)
–
Ordinary dividends paid - SGH
25
(167.6)
(167.1)
Acquisition of non-controlling interest
(606.8)
–
Dividend paid to non-controlling interest - Boral and SiTech
(67.5)
(3.2)
Proceeds from borrowings
3,141.3
1,439.7
Repayment of borrowings
(2,696.9)
(2,387.9)
Proceeds from exchangeable bond
–
135.7
Repayment of lease liabilities
(90.3)
(85.1)
Repurchase of Boral shares for Boral employee share plans
(34.3)
–
Purchase of treasury shares
23
(40.8)
(11.1)
Net financing cash flows
(563.0)
(1,079.0)
Net decrease in cash and cash equivalents
(222.4)
(414.3)
Cash and cash equivalents at beginning of the year
876.5
1,254.6
Effect of exchange rate changes on cash and cash equivalents
0.2
36.2
Cash and cash equivalents at end of the year
18
654.3
876.5
The Consolidated cash flow statement is to be read in conjunction with the notes to the financial statements.
Primary Statements
Consolidated Cash Flow Statement
For the year ended 30 June 2024
SGH Annual Report 2024
100
1. Basis of Preparation
Seven Group Holdings Limited (the Company) is a for profit
company limited by shares and the shares are publicly traded on
the Australian Securities Exchange (ASX). The Company is domiciled
in Australia. These consolidated financial statements are in respect
of the year ended 30 June 2024 and comprise the Company and
its subsidiaries (together referred to as SGH) and SGH’s interest in
equity accounted investees.
The financial report was authorised for issue in accordance with a
resolution of the Directors on 14 August 2024.
The financial report is a general purpose financial report which
has been prepared in accordance with the Australian Accounting
Standards (AASBs) adopted by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. The
consolidated financial report of SGH complies with International
Financial Reporting Standards (IFRSs) adopted by the International
Accounting Standards Board (IASB).
The financial report is prepared on the historical cost basis except
for the following items:
–
financial instruments that are measured at amortised cost
or fair value through other comprehensive income;
–
derivative financial instruments are measured at fair value
through profit or loss; and
–
liabilities for cash-settled share based payments are
measured at fair value through profit or loss.
The Company is of a kind referred to in ASIC Instrument 2016/191
and in accordance with that Instrument, amounts in the Directors’
Report and consolidated financial statements have been rounded
off to the nearest whole number of millions of dollars and one place
of decimals representing hundreds of thousands of dollars.
Certain comparative amounts in this financial report have been
reclassified to conform to the current year’s presentation or to
correct a misstatement.
(A) Material accounting policies
Note 1 sets out SGH’s material accounting policies that relate to
the financial statements as a whole. Where an accounting policy
is specific to one note, the policy is described in the note to which
it relates. This note also outlines new accounting policies and the
expected impact on the financial position and performance of SGH.
The accounting policies set out in this financial report have
been consistently applied by group entities and equity
accounted investees.
(B) Critical accounting estimates and judgements
The preparation of financial statements requires that management
make estimates, judgements and assumptions that affect the
application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis and are based on historical
experience and other factors, including expectations of future
events that may have a financial impact on SGH and that are
believed to be reasonable under the circumstances. Revisions
to accounting estimates are recognised in the period in which
the estimates are incorporated and in any future periods affected.
Significant areas of estimation, uncertainty and critical judgements
in applying accounting policies that have the most significant effect
on the amounts recognised in the financial statements are outlined
in the relevant note.
(C) Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of SGH’s
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
The financial report is presented in Australian Dollars, which is the
Company’s functional and presentation currency.
(D) New or amended accounting policies
A number of new standards, amendments to standards and
interpretations were effective for the current reporting period.
(E) New accounting standards
Amendments to Australian Accounting Standards
A number of new standards, amendments to standards and
interpretations are effective for future reporting periods. These have
not been applied in preparing this financial report. Those which may
be relevant to SGH are set out below. SGH does not plan to adopt
these standards early, however, they are not expected to materially
impact SGH’s results.
i) Amendments to AASB 2023-2 – Amendments to
Australian Accounting Standards - International Tax
Reform - Pillar Two Model Rules
In December 2021, the Organisation for Economic Co-operation
and Development (OECD) published its Pillar Two model rules to
address the tax challenges arising from the digitalisation of the
global economy.
The Pillar Two model rules are designed to:
–
ensure large multinational enterprises pay a minimum
level of tax on the income arising in each of the jurisdictions
in which they operate; and
–
achieve a minimum effective tax rate of 15 per cent in
each jurisdiction.
SGH expects to be subject to the Pillar Two rules in Australia, which
are likely to apply from 1 July 2024. The Australian Government has
introduced draft legislation, but it is not yet substantively enacted.
SGH is continuing to assess the impact, if any, of the application of
the rules.
Based on current information available, SGH does not expect
the rules to have a material current tax impact on SGH’s financial
position. SGH has applied the temporary mandatory relief under
AASB 2023-2 from deferred tax accounting for the impacts of the
additional tax at 30 June 2024.
Several other amendments to standards and interpretations
will apply on or after 1 July 2024, and have not yet been
applied, however they are not expected to materially impact
SGH’s results. While these Amendments introduce new
disclosure requirements, they do not materially affect SGH’s
accounting policies or any of the amounts recognised in the
financial statements.
Basis of Preparation
101
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
1. Basis of Preparation (continued)
i) Amendments to AASB 101 – Classification of Liabilities as
Current or Non-Current
The amendments clarify that liabilities are classified as either
current or non‑current depending on the rights that exist at the end
of the reporting period. Classification is unaffected by the entity’s
expectations or events after the reporting date (for example, the
receipt of a waiver or a breach of covenant). The amendments also
clarify what it means when it refers to the ‘settlement’ of a liability.
These amendments apply from 1 July 2024, and is not expected to
have a material impact to SGH’s financial report.
ii) International Sustainability Standards
In October 2023, the AASB released the Exposure Draft (ED)
ED SR1 Australian Sustainability Reporting Standards – Disclosure
of Climate-related Financial Information, for disclosure of climate-
related information. ED SR1 includes three proposed Australian
Sustainability Reporting Standards (ASRS) that are aligned
internationally to the IFRS Sustainability Disclosure Standards:
–
ASRS 1 General Requirements for Disclosure of
Climate-related Financial Information;
–
ASRS 2 Climate-related Financial Disclosures; and
–
ASRS 101 References in Australian Sustainability
Reporting Standards.
In January 2024, the Australian Treasury released its Final Policy
position for climate-related disclosures, including ED legislation and
accompanying explanatory materials. This confirms the pathway
to mandatory reporting of climate-related financial disclosures
subject to the passage of legislation through Parliament. In June
2024, the AASB decided not to proceed with proposals to deviate
significantly from the requirements of IFRS Sustainability Disclosure
Standards, IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information and IFRS S2 Climate-
related Disclosures.
The Board instead decided to prepare ASRS 1 as a non-mandatory
(voluntary) standard to cover all sustainability-related financial
disclosures as well as deciding to incorporate all necessary
disclosures within the body of ASRS 2. The Board also decided to
backtrack on various proposals in
ED SR 1 which would have resulted in Australian entities applying
different rules for measuring greenhouse gas (GHG) emissions to
their international counterparts.
The Standards once issued are expected to be effective for annual
reporting periods beginning or after 1 January 2025.
While these standards are still draft and are not mandatory
for compliance with Australian Accounting Standards, SGH is
monitoring their development and working through the expected
requirements and the impacts on SGH’s financial statements.
Basis of Preparation
SGH Annual Report 2024
102
2. Operating segments
Recognition and measurement
Identification of reportable segments
SGH has identified its operating segments based on the internal reports that are reviewed and used by the executive management team
(the chief operating decision maker) in assessing performance and in determining the allocation of resources.
An operating segment is a component of SGH that engages in business activities from which it may earn revenues and incur expenses,
including revenues and expenses that relate to transactions with any of SGH’s other components. All operating segments’ operating results
are regularly reviewed by SGH’s executive management team and Board to make decisions about resources to be allocated to the segment
and to assess its performance.
Segment results that are reported to the executive management team and Board include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets and corporate expenses.
Cash and cash equivalents, derivatives, interest bearing loans and borrowings and income tax assets and liabilities are also unallocated,
except for Boral’s which are included within the Boral segment.
Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, producing and development
assets, exploration and evaluation assets and intangible assets other than goodwill.
The operating segments are identified by management based on the manner in which products are sold, the nature of services provided and
country of origin.
WesTrac
WesTrac is the authorised Caterpillar dealer in Western Australia, New South Wales and the Australian Capital
Territory, providing heavy equipment sales and support to customers.
Coates
Coates is Australia’s largest general equipment hire company and provides a full range of general and
specialist equipment to a wide variety of markets including engineering, building construction and
maintenance, mining and resources, manufacturing, government and events.
Boral
Boral is Australia’s largest integrated construction materials company, producing and selling a broad range of
materials, including quarry materials, cement, concrete, asphalt and recycled materials. Boral has operations
in all Australian States and Territories.
Energy
Energy relates to SGH’s joint operation in the Bivins Ranch basin in Texas USA, SGH's wholly-owned
interest in SGH Energy Pty Limited and SGH’s equity accounted investment in Beach Energy Limited
(Beach Energy).
Media investments
Media investments relate to investments in listed and unlisted media organisations, including
Seven West Media Limited and private equity investments in China.
Other investments
Other investments incorporates property, Allight and Sykes. Allight is a market leader in designing,
manufacturing, assembly, distribution and support of mobile lighting towers, distribution of FG Wilson
generators and Perkins engines. Sykes is a market leader in designing, manufacturing, assembly,
distribution and support of pumps and dewatering equipment. On 5 December 2023, SGH disposed
of its investment in Sykes.
SGH is domiciled in Australia and operates predominantly in Australia. Further details of other countries in which SGH operates is provided in
this Note.
Results for the Year
103
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
WESTRAC(a)
BORAL(a)
COATES(a)
ENERGY
MEDIA
INVESTMENTS(b)
OTHER
INVESTMENTS(a)
TOTAL
CONTINUING OPERATIONS
2024
$m
2023
$m
2024
$m
2023
$m
2024
$m
2023
$m
2024
$m
2023
$m
2024
$m
2023
$m
2024
$m
2023
$m
2024
$m
2023
$m
Segment revenue
Building material sales
–
–
3,272.8
3,163.6
–
–
–
–
–
–
–
–
3,272.8
3,163.6
Product sales
1,948.3
1,747.0
–
–
5.3
19.4
–
–
–
–
57.3
78.2
2,010.9
1,844.6
Product support
3,851.6
3,124.7
–
–
4.9
8.4
–
–
–
–
22.7
35.3
3,879.2
3,168.4
Hire of equipment
25.7
33.5
–
–
1,132.1
1,115.4
–
–
–
–
–
–
1,157.8
1,148.9
Rendering of services
–
–
89.7
94.8
–
–
–
–
–
–
–
–
89.7
94.8
Contracting businesses
–
–
192.1
202.2
–
–
–
–
–
–
–
–
192.1
202.2
Oil, gas and condensate sales
–
–
–
–
–
–
2.7
4.0
–
–
–
–
2.7
4.0
Other
–
–
–
–
–
–
–
–
–
–
12.3
–
12.3
–
Sales to external customers
5,825.6 4,905.2
3,554.6
3,460.6
1,142.3
1,143.2
2.7
4.0
–
–
92.3
113.5 10,617.5
9,626.5
by geographic segment
Australia
5,825.6
4,905.2
3,554.6
3,460.6
1,115.7
1,112.0
–
–
–
–
78.0
77.0 10,573.9
9,554.8
International
–
–
–
–
26.6
31.2
2.7
4.0
–
–
14.3
36.5
43.6
71.7
Segment result
Segment EBITDA excluding Significant items(c)
705.0
583.3
598.9
454.4
528.0
496.2
98.6
113.8
25.4
61.2
2.8
8.6
1,958.7
1,717.5
Depreciation and amortisation
(81.6)
(83.2)
(227.3)
(222.9)
(201.3)
(196.0)
–
–
–
–
(0.1)
(0.2)
(510.3)
(502.3)
Segment EBIT excluding Significant items(d)
623.4
500.1
371.6
231.5
326.7
300.2
98.6
113.8
25.4
61.2
2.7
8.4
1,448.4
1,215.2
Other segment information
Share of results of equity accounted investees
included in segment EBIT
5.0
2.8
18.1
18.9
–
–
102.5
116.1
31.9
57.9
–
(0.7)
157.5
195.0
Significant items
Impairment of assets
–
–
–
–
–
–
–
–
(134.3)
(75.9)
(1.0)
–
(135.3)
(75.9)
Acquisition and transformation (costs)/benefits
–
–
(14.4)
8.4
(6.7)
–
–
–
–
–
–
–
(21.1)
8.4
Share of equity accounted significant items
–
–
(16.3)
–
–
–
(245.2)
4.8
(14.2)
(0.2)
–
–
(275.7)
4.6
Fair value adjustments
–
–
(11.4)
12.9
–
–
–
–
–
–
–
–
(11.4)
12.9
Net gain on disposal of controlled entities
–
–
–
–
43.7
–
–
–
–
2.3
32.6
–
76.3
2.3
Property EBIT
–
–
–
–
–
–
–
–
–
–
4.6
–
4.6
–
Fair value movement on power agreement
–
–
(0.3)
2.2
–
–
–
–
–
–
–
–
(0.3)
2.2
Fair value movement on Boral acquisition
–
–
11.7
–
–
–
–
–
–
–
–
–
11.7
–
Capital expenditure
(31.1)
(36.5)
(232.7)
(204.1)
(222.3)
(221.8)
(146.7)
(103.3)
–
–
(0.7)
(0.3)
(633.5)
(566.0)
Equity accounted investments
42.0
37.8
97.1
185.8
–
–
1,069.7
1,239.4
111.4
232.0
5.3
6.3
1,325.5
1,701.3
Other segment assets(f)
3,757.1
3,224.6
4,861.2
5,078.1
2,583.4
2,510.1
628.3
477.3
66.2
96.2
22.8
94.6 11,919.0 11,480.9
Segment assets(e)(f)
3,799.1 3,262.4 4,958.3 5,263.9 2,583.4
2,510.1
1,698.0
1,716.7
177.6
328.2
28.1
100.9 13,244.5 13,182.2
Segment liabilities(f)
(1,673.2)
(1,641.6) (2,643.2) (2,663.1)
(453.5)
(473.2)
(92.4)
(85.6)
–
–
(22.1)
(29.4) (4,884.4) (4,892.9)
(a) Segment results above have been reduced in relation to the elimination of sales between SGH entities.
(b) Media investments comprise investments accounted for using the equity method and financial assets fair valued through other comprehensive income.
(c) Segment EBITDA comprises profit before depreciation and amortisation, net finance expense, income tax and significant items. Segment EBIT comprises profit before net finance expense, income tax and significant items.
(d) Segment EBITDA, EBIT and share of results of equity accounted investees excludes the share of results from equity accounted investees attributable to significant items.
(e) Coates segment assets includes assets classified as held for sale of $7.3 million (2023: $3.2 million) which relate to hire fleet assets available for immediate sale and are expected to be disposed of within 12 months.
(f) Boral segment assets/(liabilities) includes Boral’s cash holdings, derivative financial instruments, interest bearing liabilities and tax balances.
* Refer to Note 3: Significant items for further details on significant items.
Results for the Year
SGH Annual Report 2024
104
Analysis by geographical area
SEGMENT REVENUE
NON-CURRENT ASSETS(a)
Revenue and non-current assets by geographical area
2024
$m
2023
$m
2024
$m
2023
$m
Australia
10,573.9
9,554.8
7,584.4
7,289.1
United Arab Emirates
9.2
29.3
–
3.7
Indonesia
26.6
31.2
–
17.2
United States of America
7.8
11.2
–
0.2
Total revenue and non-current assets
10,617.5
9,626.5
7,584.4
7,310.2
(a) Non-current assets excluding other financial assets, derivative financial instruments, investments accounted for using the equity method and deferred
tax assets.
Segment revenues are allocated based on the country in which the customer is located. Segment assets are allocated to countries based
on where the assets are located.
Major customer
SGH did not derive revenue greater than 10 per cent of total revenue from a single major customer in either the current or prior year.
Segment reconciliations
Reconciliation of segment EBIT to profit before income tax per
Consolidated statement of profit or loss
2024
$m
2023
$m
Segment net operating profit before net finance expense and income tax (EBIT)
1,448.4
1,215.2
Corporate operating costs
(29.2)
(28.7)
Share of significant items relating to results from equity accounted investees
(275.7)
4.6
Impairment of equity accounted investees
(135.3)
(75.9)
Net gain on disposal of controlled entities
76.3
–
Fair value adjustments arising from acquisition of Boral
(11.4)
12.9
Property EBIT
4.6
–
Gain arising from investment in equity accounted investee
–
2.3
Costs incurred in relation to the Boral takeover
(14.4)
–
Transformation and restructure (costs)/benefits
(6.7)
8.4
Fair value movement of power purchase agreement
(0.3)
2.2
Fair value movement of Boral compulsory share acquisition liability
11.7
–
Net finance expense
(302.2)
(274.8)
Profit before income tax per consolidated statement of profit or loss
765.8
866.2
Reconciliation of segment operating assets to total assets per
Consolidated statement of financial position
Segment operating assets
13,244.5
13,182.2
Cash holdings (excluding Boral)
210.9
218.4
Deferred tax assets (excluding Boral)
13.7
1.1
Derivative financial instruments (excluding Boral)
123.2
163.2
Assets held at corporate level
11.8
65.0
Total assets per consolidated statement of financial position
13,604.1
13,629.9
Reconciliation of segment operating liabilities to total liabilities per
Consolidated statement of financial position
Segment operating liabilities
(4,884.4)
(4,892.9)
Interest bearing loans and borrowings – current (excluding Boral)
(701.6)
(84.9)
Interest bearing loans and borrowings – non-current (excluding Boral)
(3,408.3)
(3,568.9)
Current tax liability (excluding Boral)
(74.4)
(24.6)
Deferred tax liabilities (excluding Boral)
(300.0)
(350.2)
Derivative financial instruments (excluding Boral)
(55.7)
(48.3)
Liabilities held at corporate level
(61.8)
(44.8)
Total liabilities per consolidated statement of financial position
(9,486.2)
(9,014.6)
105
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Our Businesses
Sustainability Report
Performance Review
Financial Report
3. Significant items
Profit before income tax includes the following income and expenses for which disclosure is relevant in explaining the underlying financial
performance of SGH.
CONTINUING OPERATIONS
2024
$m
2023
$m
Share of results from equity accounted investees attributable to significant items
(275.7)
4.6
Impairment of equity accounted investees
(135.3)
(75.9)
Gain arising from investment in equity accounted investee
–
2.3
Net gain on disposal of controlled entities
76.3
–
Property EBIT
4.6
–
Transformation and restructure (costs)/benefits
(6.7)
8.4
Fair value adjustments arising from acquisition of Boral
(11.4)
12.9
Fair value movement of power purchase agreement
(0.3)
2.2
Fair value movement of Boral compulsory acquisition liability
11.7
–
Costs incurred in relation to the Boral takeover
(14.4)
–
Total significant items before net finance expense and income tax – continuing operations
(351.2)
(45.5)
Significant items in net finance expense
(8.7)
8.6
Total significant items before income tax – continuing operations
(359.9)
(36.9)
Income tax expense on significant items
(32.1)
(9.6)
Total significant items – continuing operations
(392.0)
(46.5)
DISCONTINUED OPERATIONS
Previously disposed businesses
–
(10.9)
Total significant items before income tax – discontinued operations
–
(10.9)
Income tax benefit on significant items
–
1.0
Total significant items – discontinued operations
–
(9.9)
Share of results from equity accounted investees attributable to significant items relates to SGH’s share of Seven West Media’s gain on lease
modification and settlement, offset by IT implementation costs, fair value adjustments relating to investments, redundancy and restructuring
costs and provision for onerous contracts. In addition, it includes SGH’s share of Beach Energy’s significant items for impairments recognised
by Beach, restructuring, tariffs and tolls and loss on disposal of non-current assets, offset by insurance recoveries as well as the impairment
of capitalised development costs within Penrith Lakes Development Corporation within Boral.
Impairment of equity accounted investees relates to the impairment of SGH’s investment in the ordinary equity of Seven West Media,
as well as SGH’s investment in an immaterial joint venture. Refer also to Note 11: Investments accounted for using the equity method.
Gain arising from investment in equity accounted investee relates to the change in SGH’s ownership interest in Seven West Media in the prior
year as a result of Seven West Media’s on-market share buy-back. Refer also to Note 11: Investments accounted for using the equity method.
Net gain on disposal of controlled entities relates to the realised net gain on the disposal of Sykes and Coates Indonesia entities.
Refer to Note 31: Disposal of businesses for further detail.
Property EBIT relates to the sale of properties (net of costs incurred) at Dianella in Perth WA. SGH does not consider this income stream
to form part of its underlying operations.
Transformation and restructure costs in the current year relate to the restructuring and transformation program undertaken by Coates.
The prior year benefit relates to Boral’s favourable settlement of onerous contracts recognised in prior periods.
Fair value adjustments on acquisition of Boral relates to the unwind of fair value purchase price accounting differences arising from
SGH’s initial recognition of its control of Boral.
Fair value movement of power purchase agreement relates to the (loss)/gain recognised on the mark-to-market movement in a virtual power
purchase agreement derivative contract in Boral.
Fair value movement of Boral compulsory acquisition liability relates to the movement in the SGH share price between 30 May 2024,
being the date of calling compulsory share acquisition and 30 June 2024 for the remaining Boral shares not yet acquired.
Costs incurred in relation to the Boral takeover relate to legal and advisory costs incurred by Boral in relation to the takeover as well as the
accelerated amortisation on their employee share schemes as a result of the Boral board pro-rata vesting of entitlements in accordance with
the plan rules.
Significant items in net finance expense includes the expense relating to the unwind of the discount on provisions recognised on the
acquisition of Boral, fair value movement from remeasurement of cash-settled equity awards and costs of establishing the bridge acquisition
facility. The prior year included a gain on Boral’s early repayment of US Senior Notes, offset by the unwind of the discount on provisions
recognised on the acquisition of Boral.
Significant items for discontinued operations in the prior year related to costs incurred for the exit of Boral’s North American operations.
Refer to Note 31: Disposal of businesses further detail.
Results for the Year
SGH Annual Report 2024
106
4. Revenue and expenditure
Accounting policy
Revenue from contracts with customers
Revenue from building
material sales
Revenue from the sale of goods is recognised at the point in time the customer obtains control of the goods,
which is typically at the time of delivery to the customer. Revenue earned from asphalt and spray seal
services are recognised progressively over the period of time that the performance obligation is satisfied
and the customer obtains control of the goods being provided in the contract, with SGH having a right to
payment for performance to date. SGH predominantly uses the output method, based on volumes delivered,
to determine the amount of revenue to recognise in a given period.
Revenue from
product sales
Revenue associated with the sale of goods is recognised at the point in time when each performance
obligation of the sale has been fulfilled and control of the goods has passed to the customer. Product and
service warranties and training provided on new product sales are distinct performance obligations and part
of the sale consideration is deferred and recognised over time as the performance obligation is met.
Revenue from
product support
Revenue from product support is recognised in the accounting period in which the services are rendered.
Revenue from contracts is recognised when distinct performance obligations under the contract are met.
For maintenance and repair contracts (MARCs), an assessment is made on a contract by contract basis,
except where a portfolio approach is adopted. The portfolio approach is applied to a group of contracts
(or performance obligations) with similar characteristics where it is reasonably expected that the effects
on the financial results are not materially different to the effects of applying the standard on a contract by
contract basis. Under the portfolio approach, the MARCs have been deemed as a distinct performance
obligation to continuously make available a fleet of machinery to a customer. WesTrac’s MARCs are assessed
to consider whether modifications or extensions create a separate contract for services. These obligations
are recognised in deferred income and taken to revenue as the future service is provided.
Revenue from hire
of equipment
The recognition of hire of equipment revenue commences on receipt of equipment by the customer which is
when control passes. Revenue is recognised over the period of the hire agreement, which in the majority of
cases is on a daily basis.
Revenue from rendering
of services
Revenue from the rendering of logistics and lab services is allocated across each service or performance
obligation based on their stand-alone selling price, and is recognised as the service or performance
obligation is performed.
Contracting businesses
Revenue from concrete placing and asphalt businesses is recognised progressively over the period of time
the performance obligation is satisfied and the customer obtains control of the goods being provided in the
contract, with SGH having a right to payment for performance to date. The business predominantly uses the
output method based on volumes delivered, to determine the amount of revenue to recognise in a given period.
When estimating the transaction price, variable consideration is considered, which typically relates to claims
or variations submitted in connection with the performance of a contract. Assumptions are made in order
to determine the amount of variable consideration that can be recognised, including assessing whether the
variable consideration is constrained. Claims and variations are included to the extent they are approved.
Contracts with customers, particularly in concrete and asphalt, may contain revenue items for ancillary
services such as mobilisation and demobilisation of plant, concrete testing and other related services.
These services are typically combined into the core performance obligation of delivering concrete, or the
supply and lay of asphalt. On occasion, ancillary services may be deemed to have a stand-alone value to the
customer, and are accounted for as a separate performance obligation.
Revenue from sale of oil,
gas and condensate
Revenue is derived from the sale of oil, gas and condensate and is recognised based on volumes sold under
contracts with customers at the point in time where performance obligations are considered to be met.
Generally, the performance obligation will be met when the product is delivered to a specified measurement
point (gas) or point of loading/unloading (liquids).
Other revenue
Other revenue is recognised at the point in time that all performance obligations have been met. In the case
of property sales, it is on completion of the contract and transfer of title.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Revenue recognition – Contracting businesses and MARC
Contract revenues and expenses are recognised over time for each identified component of the contract. In determining revenue and
expense, management uses judgement and makes assumptions and estimates regarding the work performed to date as a percentage
of the total work to be performed and estimated revenues and expenses over the life of the contract. Contract variations are accounted
for as modifications when they have been approved by the customer. Depending on the nature of the modification they are treated
as either a separate performance obligation or a modification of an existing performance obligation. Determining the amount of
variable consideration requires an estimate based on either the ‘expected value’ or the ‘most likely amount’. The estimate of variable
consideration can only be recognised to the extent it is highly probable that a significant revenue reversal will not occur in future.
107
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Our Businesses
Sustainability Report
Performance Review
Financial Report
4. Revenue and expenditure (continued)
CONTINUING OPERATIONS
2024
$m
2023
$m
REVENUE FROM CONTRACTS WITH CUSTOMERS
Building material sales
3,272.8
3,163.6
Product sales
2,010.9
1,844.6
Product support
3,879.2
3,168.4
Hire of equipment
1,157.8
1,148.9
Rendering of services
89.7
94.8
Contracting business
192.1
202.2
Oil, gas and condensate
2.7
4.0
Other
12.3
–
Total revenue
10,617.5
9,626.5
EXPENDITURE EXCLUDING DEPRECIATION AND AMORTISATION
Materials cost of inventory sold and used in product sales and product support
(4,246.6)
(3,524.5)
Materials cost of inventory sold and used in building materials, rendering of services and contracting
(2,515.8)
(2,539.9)
Repairs, maintenance and consumables used on equipment hire
(132.3)
(144.5)
Employee benefits
(1,215.4)
(1,168.4)
Other expenses
(791.9)
(761.7)
Total expenses excluding depreciation and amortisation
(8,902.0)
(8,139.0)
SGH disaggregates revenue by operating segment. Disaggregation of sales by geographic area is based on customer location.
Refer to Note 2: Operating segments for revenue by operating segment and geographical split. As at 30 June 2024, SGH has remaining
performance obligations to be recognised on MARCs with a duration of more than 12 months. SGH will recognise this revenue when the
performance obligations are satisfied. The aggregate amount of the transaction price allocated to the remaining performance obligations is
$400.1 million (2023: $128.0 million). Approximately 17 per cent (2023: 62 per cent) of remaining performance obligations are expected to
occur within the next 12 months, with the remaining expected to occur over a period of up to three years.
Other expenses includes $16.1 million (2023: $10.4 million) in relation to the net impairment loss on trade receivables.
Refer to Note 21: Financial risk management for further detail.
Deferred income includes amounts relating to maintenance and repair contracts, customer deposits for advance payments for major machine
deliveries and slot fees.
5. Net finance expense
Accounting policy
Interest income includes interest on funds invested and is recognised in profit or loss as the income accrues.
Finance expense comprises interest payable on borrowings and lease liabilities calculated using the effective interest method, including
borrowing costs, unwinding of discount on provisions and deferred consideration. Interest expense also includes the net fair value adjustment
for cash-settled share-based payments.
CONTINUING OPERATIONS
2024
$m
2023
$m
FINANCE INCOME
Interest income on bank deposits
39.9
10.8
Other
0.4
12.4
Total finance income
40.3
23.2
FINANCE EXPENSE
Interest expense
(267.0)
(223.7)
Interest expense on lease liabilities
(60.9)
(57.1)
Amortisation of capitalised borrowing costs
(5.0)
(6.5)
Unwind of discount on provisions
(9.6)
(10.7)
Total finance expense
(342.5)
(298.0)
Net finance expense
(302.2)
(274.8)
Other finance income in the prior year includes a net gain of $11.2 million recognised on the early repayment of Boral US Senior Notes.
Interest expense includes $5.9 million expense (2023: $2.8 million) in relation to the fair value movement for cash-settled share‑based
payments. Also included in Interest expense in the prior year is a fair value gain of $6.7 million recognised in relation to the early repurchase of
convertible notes.
Interest of $nil (2023: nil) was paid to other parties and capitalised in respect of qualifying assets.
Results for the Year
SGH Annual Report 2024
108
6. Income tax
Accounting policy
Tax exposures
In determining the amount of current and deferred tax SGH takes into account the impact of uncertain tax positions and whether additional
taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgements about future
events. New information may become available that causes SGH to change its judgement regarding the adequacy of existing tax liabilities
that will impact tax expense in the period if such a determination is made.
The Company and its wholly-owned Australian resident entities are part of a tax-consolidated group. As a consequence, all members of
the tax-consolidated group are taxed as a single entity. The head entity within the tax-consolidated group is Seven Group Holdings Limited.
Boral Limited and its wholly-owned Australian resident entities are part of a separate tax-consolidated group, with the head entity of the Boral
tax‑consolidated group being Boral Limited. On 4 July 2024, Boral became part of Seven Group Holdings Limited’s tax-consolidated group.
CRITICAL ACCOUNTING ESTIMATE AND JUDGEMENT
SGH is subject to income taxes in Australia and jurisdictions where it has foreign operations. Judgement is required in determining the
provision for income taxes and the tax cost base of assets and liabilities.
Management judgement is also applied in assessing the recoverability of revenue and capital losses recognised as deferred tax assets
by SGH. Deferred tax assets have been recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities and joint ventures where the parent entity is able to control the timing of the reversal of the temporary
differences and/or it is probable that the differences will not reverse in the foreseeable future.
Assumptions are made about the application of income tax legislation. These assumptions are subject to risk and uncertainty and there
is a possibility that changes in circumstances will alter expectations which may impact the amount of deferred tax assets, liabilities and
provision for income taxes recorded in the statement of financial position. In these circumstances the carrying amount of deferred tax
assets, liabilities and provision for income taxes may change impacting the profit or loss of SGH.
CONTINUING OPERATIONS
2024
$m
2023
$m
INCOME TAX EXPENSE
Current tax expense
(304.0)
(119.9)
Deferred tax expense
59.9
(102.9)
Adjustment for prior years
0.4
13.0
Total income tax expense
(243.7)
(209.8)
RECONCILIATION BETWEEN TAX EXPENSE AND PRE-TAX STATUTORY PROFIT:
Income tax using the domestic corporation tax rate 30%
(229.7)
(259.9)
Share of equity accounted investee's net (loss)/profit
(36.4)
58.3
Other assessable income
(31.5)
(1.8)
Non-assessable income
121.6
1.8
Non-deductible expenses
(9.9)
(1.7)
Impairment of equity accounted investees
(65.8)
(22.8)
Recognition of deferred tax assets on revenue losses
10.3
0.8
Other items
–
(1.1)
Adjustment for prior years
0.4
13.0
Difference in overseas tax rates
(2.7)
3.6
Total income tax expense
(243.7)
(209.8)
DEFERRED INCOME TAX RECOGNISED IN OTHER COMPREHENSIVE INCOME
OR EQUITY
Relating to financial assets at fair value through other comprehensive income or equity
11.8
(6.6)
Relating to cash flow hedge reserve
3.9
12.2
Total deferred income tax recognised directly in OCI or equity
15.7
5.6
109
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
6. Income tax (continued)
YEAR ENDED 30 JUNE 2024
Opening
balance
$m
Recognised
in profit
$m
Recognised
in OCI or
equity
$m
Acquisitions
and other
$m
Closing
balance
$m
DEFERRED TAX ASSETS AND LIABILITIES
Investments
(104.2)
19.1
11.8
–
(73.3)
Derivative financial instruments
0.6
(4.5)
3.9
–
–
Inventories and receivables
(121.0)
(6.3)
–
–
(127.3)
Property, plant and equipment
(375.6)
1.9
–
–
(373.7)
Intangible assets
(166.5)
–
–
–
(166.5)
Trade and other payables
23.4
8.8
–
–
32.2
Provisions
239.1
9.4
–
–
248.5
Interest bearing loans and borrowings
108.3
2.1
–
–
110.4
Transaction costs deducted over five years
1.3
–
–
–
1.3
Unrealised foreign exchange
(10.6)
36.3
–
–
25.7
Other
(58.0)
(6.9)
–
(0.3)
(65.2)
Net deferred tax liability
(463.2)
59.9
15.7
(0.3)
(387.9)
Deferred tax asset
137.3
Deferred tax liability
(525.2)
Net deferred tax liability
(387.9)
YEAR ENDED 30 JUNE 2023
DEFERRED TAX ASSETS AND LIABILITIES
Investments
(102.7)
5.1
(6.6)
–
(104.2)
Derivative financial instruments
(9.8)
(1.7)
12.2
(0.1)
0.6
Inventories and receivables
(122.7)
1.7
–
–
(121.0)
Property, plant and equipment
(320.6)
(43.6)
–
(11.4)
(375.6)
Intangible assets
(166.5)
–
–
–
(166.5)
Trade and other payables
20.4
3.0
–
–
23.4
Provisions
226.0
13.1
–
–
239.1
Interest bearing loans and borrowings
101.9
6.4
–
–
108.3
Tax losses
33.0
(33.0)
–
–
–
Transaction costs deducted over five years
1.8
(0.5)
–
–
1.3
Unrealised foreign exchange
47.9
(58.5)
–
–
(10.6)
Other
(61.6)
5.1
–
(1.5)
(58.0)
Net deferred tax liability
(352.9)
(102.9)
5.6
(13.0)
(463.2)
Deferred tax asset
108.8
Deferred tax liability
(572.0)
Net deferred tax liability
(463.2)
There are no uncertain tax positions as at 30 June 2024.
As at 30 June 2024, SGH had not recognised:
–
deferred tax assets of $353.5 million (2023: $327.9 million) for deductible temporary differences relating to unrealised tax benefits as it is
not probable that future gains will be realised against which it could utilise the benefits;
–
deferred tax asset of $748.2 million (2023: $651.2 million) for deductible temporary differences relating to Petroleum Resource
Rent Tax credits;
–
deferred tax assets of $110.9 million (2023: $120.8 million) for tax losses where recovery is not virtually certain; and
–
deferred tax liabilities of $92.3 million (2023: $140.9 million) in respect of assessable temporary differences in relation to investments
where management controls the timing of the reversal of the temporary difference and the temporary difference is not expected to reverse
in the foreseeable future.
Results for the Year
SGH Annual Report 2024
110
7. Earnings per share
Accounting policy
Underlying earnings per share is statutory earnings per share adjusted for significant items. The weighted average number of shares used
to calculate underlying earnings per share is the same as the weighted average number of shares used to calculate statutory earnings per share.
BASIC
DILUTED
2024
$
2023
$
2024
$
2023
$
STATUTORY EARNINGS PER SHARE
From continuing operations
1.26
1.66
1.23
1.65
From discontinued operations
–
(0.02)
–
(0.02)
Statutory earnings per share – total
1.26
1.64
1.23
1.63
2024
$m
2023
$m
EARNINGS RECONCILIATION BY CATEGORY OF SHARE – ORDINARY SHARES
Net profit attributable to equity holders of the Company – continuing operations
464.4
603.8
Net loss attributable to equity holders of the Company – discontinued operations
–
(7.2)
Net profit attributable to equity holders of the Company –
continuing and discontinued operations
464.4
596.6
Note
2024
Million
2023
Million
WEIGHTED AVERAGE NUMBER OF SHARES
Ordinary shares for basic earnings per share
Issued shares as at 1 July
363.3
363.3
Shares issued - conversion of convertible notes
1.9
–
Shares issued - Boral takeover
35.2
–
Issued shares as at 30 June
23
400.4
363.3
Weighted average number of shares (basic) as at 30 June
368.3
363.3
Weighted average number of shares (diluted) as at 30 June(a)
376.9
366.5
(a) Weighted average number of shares adjusted for effect of share rights issued under employee share plans net of treasury shares, shares issued under the
Boral takeover post 30 June 2024. In the prior year, it included share rights issued under employee share plans net of treasury shares and convertible notes
issued 5 March 2018. At 30 June 2024, there were 8.6 million potential ordinary shares that were dilutive (2023: 3.2 million).
BASIC
DILUTED
2024
$
2023
$
2024
$
2023
$
UNDERLYING EARNINGS PER SHARE (NON-IFRS MEASURE)
From continuing operations
2.31
1.80
2.26
1.78
Underlying earnings per share – total
2.31
1.80
2.26
1.78
Underlying earnings per share is a non-IFRS measure and is reconciled to statutory profit or loss as follows:
2024
$m
2023
$m
UNDERLYING EARNINGS RECONCILIATION BY CATEGORY OF SHARE –
ORDINARY SHARES
Net profit attributable to equity holders of the Company
464.4
596.6
Less: significant items attributable to equity holders of the Company
385.9
57.5
Net underlying profit attributable to equity holders of the Company –
continuing and discontinued operations
850.3
654.1
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Financial Report
8. Trade and other receivables and Contract assets
Accounting policy
Trade receivables are initially recognised at the fair value of the invoice sent to the customer and subsequently at the amounts considered
recoverable less provision for expected credit loss allowance (amortised cost). Trade receivables are generally due for settlement no more
than 30 to 60 days from the date of recognition with the exception of certain customers with alternative settlement terms.
SGH has an established credit policy under which new customers are analysed individually for creditworthiness before SGH’s standard
payment, delivery terms and conditions are offered. SGH’s review includes external ratings, when available. Purchase limits are established
for each customer and these limits are reviewed annually or upon request. Customers that fail to meet SGH’s benchmark creditworthiness
may transact with SGH upon lodging of a bank guarantee as a security document or on a strictly pre‑paid (cleared funds) only basis.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. Under the
expected credit loss model, an impairment provision for receivables is established based on the expected credit losses over the lifetime of
the financial asset. The calculation of expected credit loss considers the impact of past events and current and future economic conditions.
The amount of the loss allowance is recognised in profit or loss as the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not
discounted if the effect of discounting is immaterial.
2024
$m
2023^
$m
CURRENT
Trade receivables
1,253.6
1,305.4
Other receivables
97.1
174.7
Loss allowance
(30.6)
(24.4)
Total trade and other receivables – current
1,320.1
1,455.7
Contract assets
202.2
173.9
Loss allowance
(1.1)
(0.3)
Total contract assets – current
201.1
173.6
NON-CURRENT
Other receivables
3.5
20.0
Total other receivables – non-current
3.5
20.0
^ Comparative has been restated to align with current year presentation.
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value. The creation and release of
the allowance for expected credit loss has been included in other expenses in profit or loss. For further detail on SGH’s expected exposure to
credit risk refer to Note 21: Financial risk management.
In the prior year, Other receivables (current) included $65.6 million for cash collateral provided in relation SGH’s equity-settled swap for Boral
shares which has been settled during the year. Other receivables also includes amounts owing by associated entities, of which $12.9 million
is current and $2.5 million is non‑current (2023: nil and $19.0 million respectively).
Contract assets relate to revenue earned from ongoing service contracts in WesTrac and Boral. As such, the balances of this account vary
and depend on the number of ongoing refurbishment services at the end of the year.
9. Trade and other payables
Accounting policy
2024
$m
2023
$m
CURRENT
Trade payables
586.7
560.0
Other payables
154.6
187.1
Accrual for Boral share purchases through compulsory share acquisition
334.8
–
Accruals
380.2
375.3
Accruals – cash settled share based payments
3.4
2.2
Total trade and other payables – current
1,459.7
1,124.6
SGH’s trade payables and other payables are due to mature within one year. Due to the short term nature of these payables their carrying
value is assumed to approximate their fair value.
Payments received in advance of services being rendered by Boral are recognised as contract liabilities within trade payables of $28.1 million
(2023: $37.7 million), with the majority expected to be recognised as revenue in the next financial year.
The Company has entered into a Deed of Cross Guarantee with certain subsidiaries as described in Note 30: Controlled entities. Under the
terms of the Deed, the Company has guaranteed the repayment of all current and future creditors in the event that any of the entities party
to the Deed are wound up. Details of the consolidated financial position of the Company and parties to the Deed are set out in Note 30.
Operating Assets and Liabilities
SGH Annual Report 2024
112
10. Inventories
Accounting policy
Inventories are measured at the lower of cost and net realisable value. Cost is based on the actual costs, with the exception of exchange
component inventory and parts inventory for which cost is based on weighted average cost, and includes expenditure incurred in acquiring
the inventories and bringing them to their existing condition and location. Net realisable value is determined on the basis of SGH’s normal
selling pattern. Expenses for marketing, selling and distribution to customers are estimated and are deducted to establish net realisable
value. For land development projects, cost includes the cost of acquisition, development and holding costs during development. Costs
incurred after completion of development are expensed as incurred.
CRITICAL ACCOUNTING ESTIMATE AND JUDGEMENT
Management is required to make judgements regarding writedowns to determine the net realisable value of inventory.
These writedowns consider factors such as the age and condition of goods, machine population in service for parts as well as recent
market data and rights to return parts to original equipment manufacturers, to assess the estimated future demand for the goods.
2024
$m
2023
$m
CURRENT
Raw materials – at cost
104.4
126.6
Work-in-progress – at cost
238.2
147.2
Finished goods
– at cost
1,636.0
1,203.8
– at net realisable value
10.7
17.9
Total finished goods
1,646.7
1,221.7
Land development projects
1.8
5.5
Total inventories – current
1,991.1
1,501.0
NON-CURRENT
Land development projects
346.8
345.7
Total inventories – non-current
346.8
345.7
Land development projects includes $1.1 million (2023: $1.6 million) of development costs capitalised during the year.
11. Investments accounted for using the equity method
Accounting policy
Investments accounted for using the equity method comprise investments in associates and joint ventures (equity accounted investees).
Under the equity method, where SGH has in substance an ownership interest as a result of transactions giving access to returns associated with
ownership, such as equity settled swaps, SGH takes into account eventual exercise of potential voting rights in determining ownership interest.
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Financial Report
11. Investments accounted for using the equity method (continued)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Control, joint control or significant influence
Significant judgement and assumptions are made in determining whether an entity has control, joint control or significant influence
over another entity and the type of the joint arrangement. In considering the classification, management considers whether control,
significant influence or joint control exists, the nature and structure of the relationship and other facts and circumstances.
Beach Energy Limited (Beach Energy)
SGH holds a 30.0 per cent (2023: 30.0 per cent) interest in Beach Energy and has two representative directors on the Beach Energy
board, one of whom is the Chairman of Beach Energy. SGH continues to classify its investment as an associate. SGH has the ability
to significantly influence, but not control or jointly control, the financial and operating decisions through its investment and board
representation.
Seven West Media Limited (Seven West Media)
SGH has classified its investment in Seven West Media as an associate based on its 40.2 per cent (2023: 39.8 per cent) ownership
interest and equivalent voting rights. SGH has one representative director on the Seven West Media board. Management have
concluded that SGH has the ability to significantly influence, but not control or jointly control, the financial and operating decisions of
Seven West Media.
Impairment of investments accounted for using the equity method
In accordance with AASB 136: Impairment of Assets, the recoverable amount of assets is the greater of its value-in-use (VIU) and its
fair value less cost of disposal (FVLCD). In the absence of quoted market prices, an asset’s VIU is calculated by estimating the present
value of future cash flows using an asset specific discount rate. These calculations also require the use of assumptions regarding profit
margins, growth rates, discount rates and terminal value.
In determining the amount of impairment for equity accounted investees that are listed, management has made judgements in
identifying financial assets that are impaired due to industry factors or whose decline in fair value below original cost is considered
significant or prolonged. A significant decline is assessed based on the percentage decline from acquisition cost of the share, while
a prolonged decline is based on the length of the time over which the share price has been depressed below cost. Management
considers a decline of 30 per cent to be significant and a period of 12 months to be prolonged.
OWNERSHIP INTEREST
Investee
Principal activities
Country of
incorporation
Balance date
2024
%
2023
%
ASSOCIATES
Beach Energy Limited
Oil and gas exploration,
development, production
Australia
30 Jun
30.0
30.0
Bitumen Importers Australia Pty Limited(a)
Bitumen importer
Australia
30 Jun
50.0
50.0
ConnectSydney Pty Ltd(a)
Road maintenance
Australia
30 Jun
38.5
38.5
Energy Power Systems Australia Pty Ltd
Distribution and rental of
Cat engine products
Australia
30 Jun
40.0
40.0
Flyash Australia Pty Ltd(a)
Fly ash collection
Australia
31 Dec
50.0
50.0
Mo's Mobiles Pty Limited
Mobile phone retailer
Australia
30 Jun
25.0
25.0
Penrith Lakes Development
Corporation Limited(a)
Property development
Australia
30 Jun
40.0
40.0
Seven West Media Limited(b)
Media
Australia
30 Jun
40.2
39.8
South Australian Road Services Pty Limited(a)
Road maintenance
Australia
30 Jun
50.0
50.0
South East Asphalt Pty Limited(a)
Asphalt road maintenance
Australia
30 Jun
50.0
50.0
Sunstate Cement Limited(a)
Cement manufacturer
Australia
30 Jun
50.0
50.0
JOINT VENTURES
Flagship Property Holdings Pty Limited
Property management
Australia
31 Dec
46.6
46.6
Kings Square Pty Ltd
Property development
Australia
30 Jun
50.0
50.0
Kings Square No. 4 Unit Trust
Property development
Australia
30 Jun
50.0
50.0
(a) Ownership interest reflects Boral’s ownership, of which SGH had a 95.1 per cent interest, including Boral acceptances to 30 June 2024 (2023: 72.6 per cent
interest).
(b) During the year, Seven West Media bought shares on-market and subsequently cancelled the shares. This increased SGH’s ownership interest in
Seven West Media to 40.2 per cent.
The country of incorporation of the above associates and joint ventures is also their principal place of business.
Operating Assets and Liabilities
SGH Annual Report 2024
114
2024
$m
2023
$m
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments in associates
Beach Energy Limited
1,069.7
1,239.4
Seven West Media Limited
111.4
232.0
Individually immaterial associates
139.1
223.6
Investments in joint ventures
Individually immaterial joint ventures
5.3
6.3
Total investments accounted for using the equity method
1,325.5
1,701.3
Beach Energy is a listed oil and gas exploration, development and production company based in Australia with investments in the resource
industry. SGH’s investment in Beach Energy is held for strategic purposes and is disclosed within the Energy segment.
Seven West Media is the leading listed national multi-platform media business based in Australia. SGH’s investment in Seven West Media is
held for strategic purposes and disclosed within the Media investments segment.
2024
$m
2023
$m
SHARE OF RESULTS FROM EQUITY ACCOUNTED INVESTEES
Investments in associates
Beach Energy Limited
(142.7)
120.9
Seven West Media Limited
17.7
57.7
Individually immaterial associates
6.8
21.7
Investments in joint ventures
Individually immaterial joint ventures
–
(0.7)
Total share of results from equity accounted investees
(118.2)
199.6
In the prior year, a bargain purchase gain of $2.3 million was recognised as a result of the change in ownership of Seven West Media arising
from a change in the number of shares on issue. The share of results from equity accounted investees does not include this gain, which has
been separately included within the Media Segment in Note 2: Operating segments.
2024
$m
2023
$m
MARKET VALUES OF LISTED INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Beach Energy Limited
Book value
1,069.7
1,239.4
Market value
1,016.9
924.4
Seven West Media Limited
Book value
111.4
232.0
Market value
111.4
232.0
An impairment of $134.3 million (2023: $75.9 million) relating to SGH’s investment in Seven West Media was recognised in profit or loss during
the year. A further $1.0 million (2023: nil) impairment expense was recognised in relation to an immaterial joint venture. These amounts are
disclosed within Significant items.
During the year, SGH received cash dividends and distributions from equity accounted investees of $38.3 million (2023: $44.8 million).
115
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11. Investments accounted for using the equity method (continued)
The summarised financial information for SGH’s material associates is detailed below. The information disclosed reflects the amounts
presented in the financial statements of the relevant associate and not SGH’s share of those amounts.
ASSOCIATE
ASSOCIATE
BEACH ENERGY
SEVEN WEST MEDIA
2024
$m
2023
$m
2024
$m
2023
$m
SUMMARISED FINANCIAL INFORMATION OF INVESTEES (100%)
Summarised Statement of Financial Position
Current assets
Cash and cash equivalents
172.0
218.9
54.5
57.4
Other current assets
513.6
451.2
410.6
446.0
Total current assets
685.6
670.1
465.1
503.4
Non-current assets
Goodwill
6.1
57.1
–
–
Intangible assets
20.5
20.5
718.1
714.8
Other non-current assets
4,787.0
5,147.2
294.7
282.6
Total non-current assets
4,813.6
5,224.8
1,012.8
997.4
Current liabilities
Financial liabilities(a)
12.4
11.0
15.6
13.5
Other current liabilities
369.4
433.2
314.7
373.8
Total current liabilities
381.8
444.2
330.3
387.3
Non-current liabilities
Financial liabilities(a)
30.2
14.2
500.0
484.3
Other non-current liabilities
1,774.7
1,558.6
244.1
250.4
Total non-current liabilities
1,804.9
1,572.8
744.1
734.7
Net assets
3,312.5
3,877.9
403.5
378.8
SGH’s share (%)
30.02%
30.02%
40.20%
39.83%
SGH’s share of net assets
994.4
1,164.1
162.2
150.9
Share of impairment not recognised as previously impaired
–
–
571.0
571.0
Adjustment to align accounting policies
–
–
(18.5)
(18.5)
Share of rights issue not taken up
–
–
(125.2)
(125.2)
Change in ownership interest
73.3
73.3
153.0
153.0
Impairment
–
–
(646.4)
(512.1)
Other
2.0
2.0
15.3
12.9
Carrying amount
1,069.7
1,239.4
111.4
232.0
Summarised Statement of Comprehensive Income
Revenue
1,797.6
1,646.4
1,416.0
1,487.4
Depreciation and amortisation
(408.7)
(391.7)
(132.2)
(139.5)
Net interest expense
(33.3)
(27.0)
(39.2)
(35.2)
Income tax benefit/(expense)
179.1
(158.5)
(21.8)
(50.3)
Profit for the year
(475.3)
400.8
45.3
145.7
Other comprehensive income
(1.0)
3.0
(19.0)
(10.1)
Total comprehensive income for the year
(476.3)
403.8
26.3
135.6
Dividends received by SGH
27.4
20.5
–
–
(a) Financial liabilities excluding trade and other payables and provisions.
Operating Assets and Liabilities
SGH Annual Report 2024
116
12. Right of use assets and lease liabilities
Accounting policy
SGH assesses whether a contract is or contains a lease at inception of the contract. This assessment involves the exercise of judgement
about whether the contract is dependent on an identified asset, whether SGH obtains substantially all the economic benefits from the use of
that asset, and whether SGH has the right to direct the use of the asset.
SGH as a lessee
SGH recognises a right of use asset and a lease liability at the lease commencement date which is the date that the underlying asset is
available for use by the lessee.
The right of use asset is initially measured at cost, comprising the initial lease liability, any lease payments already made less lease incentives
received, initial direct costs and any dilapidation or restoration costs. The right of use asset is subsequently depreciated on a straight line
basis over the shorter of the lease term or the useful life of the underlying asset. The right of use asset is tested for impairment if there are any
indicators of impairment.
The lease liability is measured at the present value of the lease payments using an appropriate discount rate. Lease payments can include
fixed payments, variable payments that depend on a specified rate or index, extension option payments or purchase options if SGH is
reasonably certain to exercise the option and termination payments if the lease term reflects SGH exercising a break option.
The lease liability is subsequently measured at amortised cost using the effective interest rate method. It is remeasured with a corresponding
adjustment to the right of use asset when there is a change in future lease payments resulting from a rent review, a change in an index or
rate such as inflation, or a change in SGH’s assessment of whether it is reasonably certain to exercise a purchase or extension option or not
exercise a break option.
Leases of low value assets and short term leases of 12 months or less are expensed to the profit or loss, as are variable payments dependent
on performance or usage, ‘out of contract’ payments and non-lease service components.
SGH as a lessor
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
All other leases are classified as operating leases. Where SGH is an intermediate lessor, the sub-lease classification is assessed with reference
to the head lease right of use asset. Amounts due from lessees under finance leases are recorded as receivables at the amount of SGH’s net
investment into the lease. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on SGH’s
net investment in the lease. Rental income from operating leases is recognised on a straight line basis over the term of the lease.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Management exercises judgement in determining the likelihood of exercising break or extension options in determining the lease
term. Break and extension options are included to provide operational flexibility should the economic outlook for an asset be different
to expectations. At commencement of the lease, break or extension options are not normally considered reasonably certain to be
exercised, unless there is a valid business reason otherwise.
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12. Right of use assets and lease liabilities (continued)
Movement in right of use assets
YEAR ENDED 30 JUNE 2024
Land and
buildings
$m
Plant and
equipment
$m
Hire fleet
$m
Motor
vehicles
$m
Total
$m
Carrying amount at beginning of the year
606.6
35.1
3.1
67.0
711.8
Additions
13.8
2.6
0.9
31.6
48.9
Modifications
49.7
–
3.0
10.8
63.5
Impairment
(0.5)
–
–
(0.3)
(0.8)
Disposals
(1.6)
(0.8)
(0.2)
(3.6)
(6.2)
Depreciation
(65.7)
(7.4)
(4.0)
(30.0)
(107.1)
Amounts disposed in sale of business
(3.8)
–
–
(0.5)
(4.3)
Transfers
0.1
0.5
–
0.3
0.9
Carrying amount at end of the year
598.6
30.0
2.8
75.3
706.7
At cost
1,071.1
49.6
24.9
172.4
1,318.0
Accumulated depreciation
(472.5)
(19.6)
(22.1)
(97.1)
(611.3)
Total right of use assets
598.6
30.0
2.8
75.3
706.7
YEAR ENDED 30 JUNE 2023
Carrying amount at beginning of the year
605.0
34.5
8.0
59.4
706.9
Additions
15.8
5.0
0.2
32.0
53.0
Modifications
49.1
0.2
0.8
6.1
56.2
Impairment
(0.4)
(1.5)
–
(0.2)
(2.1)
Disposals
(0.3)
(0.3)
–
(2.1)
(2.7)
Depreciation
(62.7)
(5.1)
(5.9)
(28.2)
(101.9)
Transfers
–
2.3
–
–
2.3
Exchange differences
0.1
–
–
–
0.1
Carrying amount at end of the year
606.6
35.1
3.1
67.0
711.8
At cost
1,086.1
61.5
33.2
182.9
1,363.7
Accumulated depreciation
(479.5)
(26.4)
(30.1)
(115.9)
(651.9)
Total right of use assets
606.6
35.1
3.1
67.0
711.8
Note
2024
$m
2023
$m
Amounts recognised in profit or loss
Depreciation expense on right of use assets
107.1
101.9
Interest expense on lease liabilities
5
60.9
57.1
Expense relating to short-term leases
78.9
79.0
Expense relating to leases of low value assets
9.3
8.2
Lease liabilities
Amounts due for settlement within 12 months (shown under current liabilities)
73.9
71.3
Amounts due for settlement after 12 months (shown under non-current liabilities)
916.2
913.2
Total lease liabilities
990.1
984.5
Lease Liabilities (undiscounted) maturity analysis:
Not later than one year
136.6
133.2
Later than one year but not later than two years
124.2
115.3
Later than two years but not later than five years
303.4
291.0
Later than five years but not later than ten years
375.9
379.4
Later than ten years but not later than 20 years
616.7
625.2
Later than 20 years
49.3
92.4
Total undiscounted lease liabilities
1,606.1
1,636.5
Operating Assets and Liabilities
SGH Annual Report 2024
118
13. Property, plant and equipment
Accounting policy
Property, plant and equipment is measured at historical cost less accumulated depreciation and impairment losses.
Freehold land is not depreciated. The cost of improvements to or on leasehold properties is amortised over the shorter of the unexpired
period of the lease or the estimated useful life of the improvement to SGH.
Depreciation on the following assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual
values, over their estimated useful lives, as follows:
Buildings
10 – 100 years
Leasehold improvements
1 – 25 years
Hire fleet
3 – 13 years
Plant and equipment
2 – 20 years
Mineral reserves, licences and quarry stripping assets are depreciated over the expected life of the identified resources using the units of
production method.
Mineral reserves, licences and quarry stripping
1 – 100+ years
Residual values and useful lives of assets are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is
written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains or losses on disposals are determined by comparing proceeds with carrying amount and are included in profit or loss.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimation of useful lives of assets has been based on historical experience. In addition, the condition of assets is assessed at least
annually and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.
Movement in property, plant and equipment
YEAR ENDED 30 JUNE 2024
Freehold
land and
buildings
$m
Leasehold
improve-
ments
$m
Mineral
reserves,
licences
and quarry
stripping
$m
Hire
fleet
$m
Plant and
equipment
$m
Total
$m
Carrying amount at beginning of the year
1,076.7
67.0
292.6
940.0
1,121.6
3,497.9
Additions
3.6
3.6
55.5
272.1
226.5
561.3
Transfer
35.9
(0.1)
38.3
19.7
(71.4)
22.4
Disposals
(2.5)
–
–
(22.0)
(2.7)
(27.2)
Depreciation
(22.1)
(7.9)
(33.4)
(167.1)
(160.0)
(390.5)
Exchange differences
–
–
–
0.3
0.1
0.4
Amounts disposed in sale of business
–
–
–
(17.0)
(3.7)
(20.7)
Other(a)
–
–
–
–
(1.5)
(1.5)
Carrying amount at end of the year
1,091.6
62.6
353.0
1,026.0
1,108.9
3,642.1
At cost
1,321.3
148.0
667.4
2,068.5
3,834.6
8,039.8
Accumulated depreciation
(229.7)
(85.4)
(314.4)
(1,042.5)
(2,725.7)
(4,397.7)
Total property, plant and equipment
1,091.6
62.6
353.0
1,026.0
1,108.9
3,642.1
(a) Other includes net transfer from inventory, impairments or reclassifications.
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13. Property, plant and equipment (continued)
YEAR ENDED 30 JUNE 2023
Freehold
land and
buildings
$m
Leasehold
improve-
ments
$m
Mineral
reserves,
licences
and quarry
stripping
$m
Hire
fleet
$m
Plant and
equipment
$m
Total
$m
Carrying amount at beginning of the year
1,044.8
40.6
291.3
869.4
1,178.6
3,424.7
Additions
0.7
16.7
15.5
248.5
230.2
511.6
Transfer
65.1
16.9
13.8
7.8
(115.0)
(11.4)
Disposals
(0.1)
–
–
(20.6)
(3.1)
(23.8)
Depreciation
(33.9)
(7.2)
(27.9)
(165.7)
(166.1)
(400.8)
Exchange differences
0.2
–
–
0.5
0.1
0.8
Other(a)
(0.1)
–
(0.1)
0.1
(3.1)
(3.2)
Carrying amount at end of the year
1,076.7
67.0
292.6
940.0
1,121.6
3,497.9
At cost
1,283.4
145.1
573.9
2,046.1
3,724.6
7,773.1
Accumulated depreciation
(206.7)
(78.1)
(281.3)
(1,106.1)
(2,603.0)
(4,275.2)
Total property, plant and equipment
1,076.7
67.0
292.6
940.0
1,121.6
3,497.9
(a) Other includes net transfer from inventory, impairments and reclassifications.
14. Producing and development assets
Accounting policy
Producing and development assets are carried at historical cost less accumulated depreciation.
Development costs
Expenditure on the construction, installation or completion of infrastructure facilities such as platforms, pipelines and the drilling
of development wells, including any unsuccessful development or delineation wells, is capitalised within development assets.
Depreciation/amortisation
Producing oil and gas properties are depreciated/amortised on a unit of production basis over the total proved developed and undeveloped
reserves of the field concerned, except in the case of assets whose useful life is shorter than the lifetime of the field, in which case the
straight-line method is applied.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Assessment of recoverable amount and key assumptions used
Producing and development asset valuations are based on the expected production profile of reserves and resources and various
estimates and assumptions. For the purposes of assessing impairment, the recoverable amount of an asset or cash generating
unit (CGU) is based on the greater of its FVLCD and its VIU, using a discount rate specific to the asset. Where the carrying value is less
than the recoverable value, an impairment is expensed in the profit or loss.
The estimated future cash flows for the VIU calculation are based on various estimates, the most significant of which are reserves,
future production profiles, commodity prices, operating costs and any future development costs necessary to produce the resources.
The cash flow projections for Longtom reflect the expected production profile of reserves and resources, processing and tolling costs,
assumed capital expenditure required to maintain the asset and a long-term gas price assumption of $15/GJ. The discount rate
applied to the forecast cash flows is based on the weighted average cost of capital adjusted for risks where appropriate including the
functional currency of the asset and the risk profile of the country in which the asset operates. A post-tax discount rate of 9.1 per cent
(2023: 9.1 per cent) has been applied.
The cash flow projections for the Crux Joint Operation (Crux JO) include assumptions on the expected production profile of reserves
and resources, tolling revenue expected referable to third party processing of their reserves via Crux infrastructure, facility design,
project development cost (including input price escalation), a long-term oil price assumption and discount rate. A Brent oil price of
US$72/bbl (2023: US$72/bbl) has been used to estimate a long-term LNG price and post-tax discount rate of 8.2 per cent
(2023: 8.2 per cent) has been applied to the estimated future cash flows.
Project development costs
Estimates of project development costs are integral to cash flow projections. SGH’s best estimate of project development costs is
made with reference to internally derived cost estimates or joint venture project development budgets. These estimates and budgets
require assumptions to be made regarding cost of construction and installation of surface and subsurface assets, including design,
engineering, procurement and input price escalation, labour and vessel availability and the project schedule. The project schedule
may require modification for items including, but not limited to, task dependencies, changes in scope, seasonable weather factors and
timing of regulatory approvals. Cash flow projections include a level of cost contingency to account for project uncertainty. An adverse
change to SGH’s estimates of project development costs, if it were to occur, may require an adjustment to the carrying amount of
producing and development assets.
Operating Assets and Liabilities
SGH Annual Report 2024
120
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
Estimates of quantity and quality of reserves and resources
The estimated quantity and quality of reserves and resources are integral to the calculation of amortisation expense and the
assessment of the recoverable amount of assets. Estimated reserve and resource quantities and quality is based on interpretations
of geological and geophysical models and assessments of technical feasibility and commercial viability of future production. These
estimates require assumptions to be made regarding future development and production costs, commodity prices and exchange
rates. The estimates of reserves and resources may change from period to period, and as additional geological data is generated or
obtained from the operator during the course of the operations. Reserves and resource estimates are prepared in accordance with
relevant guidelines, including SPE-PRMS guidelines prepared by the Society of Petroleum Engineers.
Pipeline and gas processing availability
The Longtom gas and condensate field is connected to the Patricia Baleen pipeline and the Orbost Gas Plant. The estimated cash flows
are predicated on achieving contractual access to this infrastructure in order to transport and process gas and condensate produced
by the field. Discussions in respect of securing access to these facilities are ongoing, and should this not be secured, it is reasonably
possible that an adjustment to the carrying amount of the Longtom asset of $119.6 million (2023: $119.6 million) could be required.
Estimation of commodity prices
SGH’s best estimate of future commodity prices is made with reference to internally derived forecast data, current spot prices, external
market analysts forecast and forward curves. Future commodity price assumptions impact the recoverability of carrying values and are
reviewed at least annually.
Climate change
Current climate change legislation is considered in estimating future cash flows including the impact of current climate change
legislation, including the Safeguard Mechanism. Climate change risks may result in a proportion of reserves becoming incapable
of economic extraction, demand for hydrocarbons decreasing due to policy, regulation including carbon pricing, legal, technological,
market or societal responses to climate change and physical aspects related to extreme weather events or climate change. SGH
continues to monitor climate related policy and its impact on the Financial Report.
Movement in producing and development assets
2024
$m
2023
$m
Carrying amount at beginning of the year
476.5
365.7
Additions
151.2
110.8
Carrying amount at end of the year
627.7
476.5
At cost
772.2
620.9
Accumulated depreciation
(23.3)
(23.3)
Accumulated impairment
(121.2)
(121.1)
Total producing and development assets
627.7
476.5
SGH’s operating interests in producing and development assets are held through SGH’s wholly-owned subsidiaries as follows:
–
the Longtom gas and condensate field located in the Gippsland Basin off the coast of Victoria through SGH Energy VICP54 Pty Limited;
–
the Crux AC/L10 gas and condensate project located in the Browse Basin off the coast of Western Australia through
SGH Energy WA Pty Limited; and
–
the Bivins Ranch oil and gas asset located in the Texas Panhandle region of the United States through Seven Network (United States) Inc.
UNINCORPORATED
INTEREST
Asset
Operator of joint operation
2024
%
2023
%
Crux AC/L10
Shell Australia Pty Ltd
15.5
15.5
Bivins Ranch
Presidio Petroleum LLC
11.2
11.2
The Crux AC/L10 natural gas and condensate field is off the coast of Western Australia. The Crux asset is a primary source of back fill gas
supply to the Shell Operated Prelude floating LNG facility (Prelude) with which Crux has a documented processing agreement. Both the
Prelude and Crux projects are operated by Shell Australia. Final investment decision was reached in respect of the Crux asset in May 2022
and drilling commenced in April 2024.
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14. Producing and development assets (continued)
Impairment assessment
As at 30 June 2024, SGH performed an impairment review of its producing and development assets in accordance with
AASB 136: Impairment of Assets. The review concluded that legislative changes relating to the Safeguard Mechanism effective
1 July 2023, coupled with the revision of the Crux JO project capital expenditure estimate prepared by Shell as the operator in the year,
was an indicator of impairment. Accordingly, a full impairment test was conducted with the recoverable value of the Crux JO assessed
utilising a VIU discounted cash flow model.
The lack of agreement to date on access to third-party facilities to transport and process gas and condensate in relation to the Longtom
asset was also considered an indicator of impairment. Accordingly, a full impairment test was also conducted, with the recoverable value of
Longtom assessed utilising a VIU discounted cash flow model.
The estimated future cash flows for the VIU calculation for both Crux and Longtom are based on various estimates, the most significant of
which are resources, production profiles, commodity prices, operating costs, tolling and processing arrangements, any future development
costs necessary to produce the reserves, the capital cost of bringing the asset into production and timing of production.
The estimated Longtom cash flows are predicated on achieving contractual access to infrastructure to transport and process gas and
condensate produced by the field with discussions ongoing with the relevant counterparty. Contracted agreements are already in place
with Prelude JV for the processing of Crux JO volumes at the Prelude FLNG facility. The value of future cash flows were estimated using the
assumptions below which have regard to observable market data including forward curves, external market forecasts and specific target
market supply/demand dynamics. The following assumptions were used in the assessment of the recoverable amount for the year:
–
average of the JKM and Brent linked LNG forecast in CY27, which equates to an average LNG price for the Crux JO of US$9.50/MMbtu
indexed at 2.5 per cent;
–
uncontracted long-term East Coast gas price assumption of $15/GJ indexed at 2.5 per cent for the Longtom asset;
–
Brent oil price of US$72/bbl;
–
AUD/USD exchange rate of A$/US$0.65;
–
tolling revenue will be received by the Crux JO to allow the processing of third party volumes via Crux infrastructure;
–
Australian Carbon Credit Unit (ACCU) pricing assumption of US$40/tonne, escalated by 2.5 per cent;
–
weighted average cost of capital of 8.2 per cent for Crux and 9.1 per cent for Longtom; and
–
commencement of production in CY27 for Crux JO and restart of production in FY29 for Longtom.
The carrying value of the Crux and Longtom assets have been reassessed using these updated estimates and, based on this assessment,
there is no impairment required as at 30 June 2024. The carrying value of Bivins Ranch has previously been impaired in full and there have
not been any trigger events indicating that the Bivins Ranch impairment may be reversed.
Longtom sensitivity analysis
In the event circumstances vary from the assumptions used in the impairment assessment, the recoverable amount of the Longtom asset
could change and result in adjustment to the carrying amount of the asset. Sensitivity analysis has been performed applying the following
possible changes in key assumptions:
–
Reserves - 10 per cent decrease in reserves;
–
Gas and oil price assumptions - 10 per cent decrease in oil and gas pricing assumption;
–
Post-tax discount rate - one per cent increase in post-tax discount rate; and
–
Deferred restart of Longtom production by four years.
Based on sensitivity analysis performed, no reasonable change in the key assumptions above would give rise to an impairment of the
Longtom asset at 30 June 2024. Should infrastructure access not ultimately be secured by ~2051, it is reasonably probable that an
adjustment to the carrying amount of the Longtom asset would be required. The key assumptions (including access, restart and key
economic variables) used in the impairment model were reviewed by an independent oil and gas expert, who concluded that the critical
assumptions were reasonable.
Crux sensitivity analysis
In the event circumstances vary from the assumptions used in the impairment assessment, the recoverable amount of the Crux asset could
change and result in adjustment to the carrying amount of the asset. Sensitivity analysis has been performed applying the following possible
changes in key assumptions:
–
LNG pricing assumption - 10 per cent decrease;
–
Oil price assumption - 10 per cent decrease in Brent;
–
Post-tax discount rate - one per cent increase;
–
Crux capital expenditure - 15 per cent increase; and
–
Carbon price increase by US$10 per ACCU.
Based on sensitivity analysis performed, the 10 per cent decrease in either the LNG or Brent pricing assumptions, and/or one per cent
increase in post-tax discount rate would give rise to an impairment of the Crux JO asset at 30 June 2024.
Contingent liabilities in respect of joint venture operations are detailed in Note 26: Contingent liabilities and development expenditure
commitments and capital commitments in respect of joint venture operations are detailed in Note 27: Commitments.
Operating Assets and Liabilities
SGH Annual Report 2024
122
15. Intangible assets
Accounting policy
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of SGH’s share of the net identifiable assets of the acquired
subsidiary/equity accounted investee at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is not amortised, but instead tested for impairment annually or more frequently if events or changes in circumstances indicate that
it might be impaired, and is carried at cost less accumulated impairment losses. Gains or losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to CGUs (or groups of CGUs) for the purpose of impairment testing. Each of those CGUs (or groups of CGUs)
represents SGH’s investment in each country of operation by each operating segment.
Distribution networks
The distribution networks of SGH are considered by the Directors to be identifiable intangible assets.
The Directors are of the opinion that the distribution networks have an indefinite useful life, and as such the distribution networks are not
subject to amortisation but rather are tested annually for impairment or more frequently if events or changes in circumstances indicate
impairment. The basis for the classification of indefinite life is that the dealership agreements do not require specific renewal over set intervals
thus the distribution rights continue uninterrupted unless a cause to terminate is triggered.
Brand names
Brand names have been assessed as having an indefinite useful life and as a result are not amortised. Instead, brand names are tested for
impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired and are carried at cost less
accumulated impairment losses.
Impairment of intangible assets
Goodwill and intangible assets that have an indefinite life are not subject to amortisation and are tested annually for impairment or more
frequently if events or changes in circumstances indicate that they might be impaired. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount of an asset or CGU is the greater of its FVLCD and its VIU. In assessing VIU, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or CGUs. Subject to an operating segment ceiling test,
CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which
goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are
expected to benefit from the synergies of the combination.
Non-financial assets other than goodwill that have been impaired are reviewed for possible reversal of the impairment at each reporting date.
Impairment losses are recognised in profit or loss unless the asset has previously been revalued, in which case the impairment is recognised
as a reversal to the extent of that previous revaluation with any excess recognised in profit or loss.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Dependency on key suppliers
WesTrac is dependent on Caterpillar to maintain its authorisation as an authorised dealer of Caterpillar equipment and parts in
Western Australia and New South Wales/Australian Capital Territory. WesTrac has maintained a strong relationship with Caterpillar
and although WesTrac expects this relationship to continue, as is customary in dealer agreements with Caterpillar, the dealer
agreement can be terminated by either party upon 90 days notice at any time.
WesTrac is dependent on Caterpillar for timely supply of equipment and parts from their global manufacturing factories and distribution
warehouses. During periods of intense demand or in the event of disruption to Caterpillar’s business there may be delays in the supply
of equipment and parts to WesTrac. This has not in the past proven to be an impediment to WesTrac.
Management judgement is required to estimate the impact of the loss of key suppliers on future earnings, supporting existing goodwill
and intangible assets.
Impairment of intangible assets
In accordance with AASB 136: Impairment of Assets, the recoverable amount of an asset or CGU is the greater of its FVLCD and
its VIU. In the absence of quoted market prices, an asset’s or CGU’s FVLCD or VIU is calculated by estimating the present value
of future cash flows using an asset specific discount rate. These calculations also require the use of assumptions regarding profit
margins, growth rates, discount rates and terminal value.
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15. Intangible assets (continued)
Movement in intangible assets
YEAR ENDED 30 JUNE 2024
Goodwill
$m
Distribution
network
$m
Brand
names
$m
Other(a)
$m
Total
$m
Carrying amount at beginning of the year
1,652.4
328.8
207.6
33.4
2,222.2
Additions
4.3
–
–
1.8
6.1
Disposals
–
–
–
(0.1)
(0.1)
Amortisation
–
–
–
(7.8)
(7.8)
Carrying amount at end of the year
1,656.7
328.8
207.6
27.3
2,220.4
At cost
2,385.1
328.8
207.6
95.9
3,017.4
Accumulated impairment
(728.4)
–
–
–
(728.4)
Accumulated amortisation
–
–
–
(68.6)
(68.6)
Total intangible assets
1,656.7
328.8
207.6
27.3
2,220.4
YEAR ENDED 30 JUNE 2023
Carrying amount at beginning of the year
1,652.4
328.8
207.6
40.2
2,229.0
Additions
–
–
–
3.2
3.2
Disposals
–
–
–
(1.1)
(1.1)
Amortisation
–
–
–
(8.9)
(8.9)
Carrying amount at end of the year
1,652.4
328.8
207.6
33.4
2,222.2
At cost
2,380.8
328.8
207.6
94.2
3,011.4
Accumulated impairment
(728.4)
–
–
–
(728.4)
Accumulated amortisation
–
–
–
(60.8)
(60.8)
Total intangible assets
1,652.4
328.8
207.6
33.4
2,222.2
(a) Other includes the following finite lived intangibles; intellectual property, contracts from acquisition (useful life 5 years) and software (useful life 4–10 years).
Impairment of intangible assets
Impairment tests for goodwill, distribution network and brand names
Goodwill, distribution network and brand name costs are allocated to SGH’s CGUs identified according to the appropriate operating
segment. A segment level summary of the allocation is presented below.
YEAR ENDED 30 JUNE 2024
Goodwill
$m
Distribution
network
$m
Brand
names
$m
Total
$m
WesTrac
98.2
326.8
–
425.0
Boral
504.3
–
81.2
585.5
Coates
1,054.2
2.0
126.4
1,182.6
Total goodwill, distribution network and brand names
1,656.7
328.8
207.6
2,193.1
YEAR ENDED 30 JUNE 2023
WesTrac
98.2
326.8
–
425.0
Boral
504.3
–
81.2
585.5
Coates
1,049.9
2.0
126.4
1,178.3
Total goodwill, distribution network and brand names
1,652.4
328.8
207.6
2,188.8
Goodwill, distribution network and brand names
The carrying amount of goodwill and other indefinite life intangibles is tested for impairment annually at 30 June and whenever there is an
indicator that the asset or CGU may be impaired. Where an asset or CGU is deemed to be impaired, it is written down to its recoverable
amount. The recoverable amount is based on value-in-use calculations. These recoverable amount calculations use discounted cash flow
projections based on financial budgets and forecasts approved by management. Cash flow projections utilised for value-in-use financial
budgets cover a five year period with a growth rate used to extrapolate cash flow projections for subsequent years.
Operating Assets and Liabilities
SGH Annual Report 2024
124
Key assumptions used for value-in-use calculations
2024
Growth
rate(a)
%
2024
Discount rate
(pre-tax)
%
2023
Growth
rate(a)
%
2023
Discount rate
(pre-tax)
%
WesTrac
2.0
11.96
2.0
12.57
Boral
2.5
13.01
2.5
12.14
Coates
2.0
13.67
2.0
12.86
(a) The weighted average growth rate used to extrapolate cash flows beyond the budget or forecast period.
Growth rate assumptions have been determined with reference to historical company experience and expectations of long-term operating
conditions. The growth rates do not exceed long-term industry growth rates for the industry in which the business operates. Discount rate
assumptions above reflect SGH’s estimate of the time value of money and specific risks to the relevant segments and the countries in which
they operate. In determining appropriate discount rates, consideration has been given to the estimated Weighted Average Cost of Capital for
SGH, adjusted for business specific risks to the CGU.
Sensitivity analysis
Based on sensitivity analysis performed no reasonable change in the key assumptions above would give rise to an impairment for WesTrac,
Boral or Coates.
16. Provisions
Accounting policy
Provisions are recognised when SGH has a present legal or constructive obligation as a result of a past event and it is probable that an
outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for
future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required on settlement is
determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to
any one item included in the same class of obligations may be small. Provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Contingent liabilities assumed in a business combination where the fair value of contingent liabilities of the acquiree are present obligations
arising from a past event and the fair values can be reliably estimated, even if it is not probable that an outflow of resources will occur, are
included in provisions.
Restoration and
environmental
rehabilitation
A provision for restoration or decommissioning is recognised when there is a legal or constructive obligation to do so.
A corresponding restoration or decommissioning asset is created equivalent to the amount of the provision.
The amount recognised is the estimated cost of restoration, discounted to its net present value. This is reassessed
each year in accordance with local conditions and requirements.
The restoration and environmental rehabilitation provision comprises mainly:
–
rehabilitation obligations for decommissioning, removal and repair of site and restoration of quarries;
–
remediation obligations for any identified environmental contamination of sites owned by SGH, or contamination
that SGH has caused, to enable ongoing use of the land as an industrial property or future development;
–
makegood provisions included in the lease agreements for which SGH has a legal or constructive obligation; and
–
restoration and decommissioning costs associated with environmental obligations.
Claims
A provision is raised for liabilities arising from the ordinary course of business in relation to claims against SGH,
including self-insurance, workers compensation insurance, legal and other claims. Where recoveries are considered
virtually certain in respect of such claims, these are included in other receivables.
Other
Other provisions includes provisions for:
–
rationalisation and restructuring which are recognised when steps have been taken to implement a detailed plan,
including discussions with affected personnel, with employee related costs recognised over the period of any
required future service;
–
onerous contracts in which the unavoidable cost of meeting the obligations under the contract exceeds the
economic benefit expected to be received;
–
unfavourable contracts acquired in a business combination where the fair value of contracts are unfavourable
when compared with current market terms; and
–
fair value of make-whole costs for debt holders early repayment on fixed term debt on restructure.
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16. Provisions (continued)
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Restoration and environmental rehabilitation
Management is required to make judgements regarding content level of disturbance, remaining asset life, removal method, future
legislation, reclamation activities required, engineering estimating methodologies, future removal technologies and discount rates to
determine the present value of the cash flows.
Most of these decommissioning events are many years in the future and the precise requirements that have to be met when the
removal event occurs are uncertain. Changes in the estimates of restoration cost are dealt with prospectively by recording an
adjustment to the provision and a corresponding adjustment to the restoration asset.
Oil and gas
SGH holds provisions for the future removal costs of oil and gas production facilities and pipelines at different stages of the
development, construction and end of their economic lives. The provision includes the following costs:
–
for offshore assets, provision has been made for restoration plans including installation of permanent well barriers, sever casings
and conductors, recovery of nearshore subsea flowlines, umbilicals and manifolds. It is currently SGH’s intention to leave all subsea
pipelines in-situ on the basis of current restoration plans delivering equal or better environmental, safety and well integrity outcomes
than removal. In the event that removal of all or a substantial portion was required, SGH estimates the additional cost would lead to
an increase to the provision of approximately $23.0 million (2023: $22.0 million).
–
for non-operated joint venture assets, the provision recorded represents SGH’s share of the relevant Joint Venture operator
estimate as responsibility for the restoration will reside with the operator who has the best knowledge and understanding of the
assets. SGH regularly assesses the operator estimates with the assistance of experts appointed by SGH.
Actual costs and cash outflows can materially differ from the current estimate as a result of changes in regulations and their
application, prices, analysis of site conditions, further studies, timing of restoration, achievability of restoration efficiencies
(such as joint campaigning or use of vessels in the vicinity) and changes in removal technology.
The discount rate used to determine the present value of future cash flows was 4.0 per cent (2023: 4.0 per cent), based on applicable
government bonds with a tenure aligned to the tenure of the liability. If the discount rate was decreased by 0.5 per cent, it would lead
to an increase in the provision of approximately $6.7 million (2023: $6.8 million).
Quarries
SGH holds provisions for the future rehabilitation costs of quarries. SGH’s provision includes cost of demolition of quarry plant and
equipment and rehabilitation of pits.
Alternate end-use outcomes, such as earth exchange or landfill, is considered in the calculation of the rehabilitation provision.
This is based on a range of factors, including whether a current approval for earth exchange or landfill is in place, the location of the
quarry, ABS data supporting expected long-term urban development, and underlying demand for earth exchange or landfill over a
time period. Whilst SGH believe that the mitigation of outflows is probable, in the event that the expected earth exchange or land fill
mitigation of outflows are not fully realised or available, SGH estimates this would lead to an increase to the provision of approximately
$80.0 million (2023: $70.0 million).
Actual costs and cash outflows can materially differ from the current estimate as a result of changes in regulations and their application,
prices, analysis of site conditions, further studies, timing of demolition and restoration, potential for site for earth exchange or landfill
and changes in removal or restoration technology.
The discount rate used to determine the present value of future cash flows was 4.0 per cent (2023: 4.0 per cent), based on applicable
government bonds with a tenure aligned to the tenure of the liability. If the discount rate was decreased by 0.5 per cent it would lead to
an increase to the provision of approximately $14.2 million (2023: $12.7 million).
Operating Assets and Liabilities
SGH Annual Report 2024
126
Movement in provisions
YEAR ENDED 30 JUNE 2024
Restoration
and
environmental
rehabilitation
$m
Claims
$m
Other
$m
Total
$m
Balance at beginning of the year
305.3
76.1
190.7
572.1
Amounts provided for
12.9
35.4
89.4
137.7
Amounts used
(7.8)
(9.2)
(8.7)
(25.7)
Release of provision
(19.0)
(25.0)
(22.7)
(66.7)
Unwind of discount
7.5
–
2.1
9.6
Balance at end of the year
298.9
77.3
250.8
627.0
Current
16.1
51.1
120.4
187.6
Non-current
282.8
26.2
130.4
439.4
Total provisions
298.9
77.3
250.8
627.0
YEAR ENDED 30 JUNE 2023
Balance at beginning of the year
296.8
69.8
224.6
591.2
Amounts provided for
11.3
22.3
18.9
52.5
Amounts used
(12.3)
(10.4)
(14.0)
(36.7)
Release of provision
–
–
(47.2)
(47.2)
Exchange differences
1.4
0.2
–
1.6
Transfer
–
(5.8)
5.8
–
Unwind of discount
8.1
–
2.6
10.7
Balance at end of the year
305.3
76.1
190.7
572.1
Current
24.0
24.9
52.9
101.8
Non-current
281.3
51.2
137.8
470.3
Total provisions
305.3
76.1
190.7
572.1
17. Employee benefits
Accounting policy
Employee benefits
Employee benefits include provisions for annual leave and long service leave and their associated on-costs.
The current provision for long service leave includes all unconditional entitlements where employees have completed the required service
period and those where employees are entitled to pro-rata payments in certain circumstances. The majority of the amount is presented as
current, since SGH does not have an unconditional right to defer settlement. However, based on past experience, SGH does not expect all
employees to take the full amount of accrued long service leave or require payment within the next 12 months.
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields
at the reporting date on high quality corporate bonds with terms of maturity and currency that match, as closely as possible, the estimated
future cash outflows.
2024
$m
2023
$m
CURRENT
Annual leave
93.7
93.3
Long service leave
86.5
88.2
Other employee benefits
19.8
18.0
Total employee benefits – current
200.0
199.5
NON-CURRENT
Long service leave
16.4
17.4
Total employee benefits – non-current
16.4
17.4
127
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
17. Employee benefits (continued)
Superannuation contributions
SGH makes contributions on behalf of employees to defined contribution superannuation funds. The amount recognised as an expense was
$134.9 million (2023: $123.6 million) for the year.
Share based payments
The fair value of options granted under the Company’s cash-settled option plan is recognised as an employee benefit expense with a
corresponding increase in liability. The expense and the liability incurred are measured at the fair value of the liability. The liability is recorded
within Other payables.
The fair value at grant date is independently determined using Black-Scholes and Binomial option pricing models that take into account the
exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the
share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for
the term of the option.
The fair value of the options granted excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included
in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity remeasures the fair
value of the options, with any changes in value recognised in the profit or loss as a finance expense.
The fair value of equity-based entitlements settled in equity instruments is recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is estimated at grant date and recognised over the period during which the employees become
unconditionally entitled to the equity instrument.
The amount recognised as an expense is adjusted to reflect the actual number of entitlements that vest, except where forfeiture is only due to
share prices not achieving the threshold for vesting.
The amounts recognised as an expense for equity-settled share-based payments during the year was $9.3 million (2023: $10.0 million) and is
included within Employee benefits expense. A further $1.2 million (2023: $1.1 million) was recognised in relation to cash-settled share-based
payments and is included within Employee benefits expense and Other payables.
For further detail on the deferred shares under SGH’s Short-Term Incentive (STI) plan and the performance rights under SGH’s Long-Term
Incentive (LTI) plan refer pages 77 to 79 of the Remuneration Report.
YEAR ENDED 30 JUNE 2024
Plan
Grant date
Expiry/
Vesting date
Fair value
Balance
at start
of year
Granted
Forfeited
Vested
Balance at
end of year
Deferred shares
FY25 SGH Equity
Retention1,3
28 Jun 24
1 Jul 26
$35.88
–
28,028
–
–
28,028
FY25 SGH Equity
Retention1,3
4 Jun 24
1 Jul 26
$37.53
–
110,538
–
–
110,538
FY23 STI
1 Jul 23
1 Jul 24
$23.83
–
188,757
(3,724)
–
185,033
Retention Plan
14 Oct 22
14 Oct 24
$16.74
65,435
–
(9,780)
–
55,655
FY22 STI
1 Jul 22
1 Jul 24
$15.34
243,159
–
(1,983)
–
241,176
FY21 STI
1 Jul 21
1 Jul 23
$19.25
161,180
–
–
(161,180)
–
Total
469,774
327,323
(15,487)
(161,180)
620,430
Performance rights
FY24 SGH Equity LTI2,3
28 Jun 24
1 Sep 26
$33.47
–
19,248
–
–
19,248
FY24 SGH Equity LTI2,3
28 Jun 24
1 Sep 26
$36.64
–
19,247
–
–
19,247
FY24 SGH Equity LTI2,3
4 Jun 24
1 Sep 26
$34.74
–
68,038
–
–
68,038
FY24 SGH Equity LTI2,3
4 Jun 24
1 Sep 26
$37.86
–
68,037
–
–
68,037
FY24 LTI - TSR
18 Mar 24
1 Sep 26
$35.13
–
5,485
–
–
5,485
FY24 LTI - EPS
18 Mar 24
1 Sep 26
$38.14
–
5,485
–
–
5,485
FY24 LTI - TSR
1 Jul 23
1 Sep 26
$13.73
–
197,536
(27,826)
–
169,710
FY24 LTI - EPS
1 Jul 23
1 Sep 26
$23.13
–
197,535
(27,825)
–
169,710
FY23 LTI
1 Jul 22
1 Sep 25
$8.62
575,531
–
(78,462)
–
497,069
FY22 LTI
1 Jul 21
1 Sep 24
$10.86
381,843
–
(8,814)
–
373,029
FY21 LTI
1 Jul 20
1 Sep 23
$11.46
369,067
–
(46,842)
(322,225)
–
Total
1,326,441
580,612
(189,769)
(322,225)
1,395,058
Operating Assets and Liabilities
1. A new SGH Equity Retention Award was issued in lieu of the one-third lapsed portion of the Boral FY23 LTI - TSR rights. Vesting under this
award is subject to continued employment over a two-year period, including no notice of termination up to and including 30 June 2026.
2. A new FY24 SGH Equity LTI Award was issued in lieu of the two thirds lapsed portion of the Boral FY24 LTI - TSR and Boral FY24 LTI - EPS
rights. Vesting under this award is subject to SGH relative TSR and EPS performance hurdles with vesting determined in August 2026.
3. The number of SGH Equity Awards allocated was determined in accordance with the terms of the SGH Takeover Offer being the number
of lapsed Boral rights * $6.25 / $40.77 (being the Boral and SGH share price respectively communicated in the Takeover Offer).
SGH Annual Report 2024
128
Pursuant to SGH’s compulsory acquisition of Boral, the Boral Board considered and resolved to vest all of the deferred share rights issued
under Boral’s FY23 STI plan and vest a pro-rata number of Boral’s unvested performance rights issued under Boral’s FY23 and FY24 LTI
plans respectively. The Board considered time served and performance to date when determining the LTI vesting outcomes that resulted in
two thirds of the FY23 Boral LTI to vest and one third of the FY24 Boral LTI to vest. The remaining rights lapsed and are dealt with as part of
the SGH make whole awards included in the Seven Group Holdings Bidders statement for the acquisition of Boral. In addition to vesting of
the deferred STI and partial vesting of the LTI, the Boral CEO’s Sign-on retention award vested in full in line with his contractual arrangements
that provided for full vesting in the event of a change in control and delisting event and the Boral CEO no longer reports to the Board.
Plan
Grant date
Vesting date
Balance
at start
of year
Granted
Forfeited
Vested
Balance at
end of year
Boral equity
FY24 LTI - TSR6
1 Sep 23
4 Jun 24
–
951,044
(661,493)
(289,551)
–
FY24 LTI - EPS6
1 Sep 23
4 Jun 24
–
951,044
(661,493)
(289,551)
–
FY23 - Deferred STI2,5
1 Sep 23
4 Jun 24
–
842,178
(93,199)
(748,979)
–
CFO Sign-on4
30 Jan 23
30 Jan 25
92,969
–
(92,969)
–
–
FY23 LTI - TSR - CEO1
10 Oct 22
4 Jun 24
548,507
–
(182,835)
(365,672)
–
CEO Sign-on2,3
10 Oct 22
4 Jun 24
262,992
–
–
(262,992)
–
CEO Sign-on2,3
10 Oct 22
4 Jun 24
262,992
–
–
(262,992)
–
FY23 LTI - TSR1
1 Sep 22
4 Jun 24
2,560,544
–
(1,081,751)
(1,478,793)
–
Deferred equity
30 Jun 22
1 Jan 24
20,750
–
–
(20,750)
–
Deferred equity
1 Jan 22
1 Jan 24
28,496
–
–
(28,496)
–
TSR7
30 Jun 22
1 Sep 24
137,464
–
–
–
137,464
TSR7
1 Sep 21
1 Sep 24
188,777
–
–
–
188,777
ROFE
30 Jun 22
1 Sep 23
212,536
–
–
(212,536)
–
TSR
30 Jun 22
1 Sep 23
1,156,874
–
–
(1,156,874)
–
ROFE
1 Sep 20
1 Sep 23
291,878
–
–
(291,878)
–
TSR
1 Sep 20
1 Sep 23
1,588,598
–
–
(1,588,598)
–
Total
7,353,377
2,744,266
(2,773,740)
(6,997,662)
326,241
1. Following the compulsory acquisition of Boral by SGH on 4 June 2024, the Boral Board vested two thirds of the FY23 LTI - TSR rights.
The remaining rights lapsed and employees were granted SGH Equity Retention Awards as part of the SGH make whole awards set out
in the SGH Bidders Statement.
2. Following the compulsory acquisition of Boral by SGH on 4 June 2024, CEO Sign-on awards and FY23 - Deferred STI were vested in full by
the Boral Board.
3. Following the completion of the compulsory acquisition and to encourage retention of the Boral CEO over the transition period, a special
equity retention award equivalent of 150% of the Boral CEO’s Fixed Remuneration was awarded in July 2024. Under the award, 60,144
SGH share rights convert to ordinary shares on 1 July 2027, subject to his ongoing employment and no notice of separation up to and
including this date.
4. CFO Sign-on award lapsed following the resignation of Ms Shaw in January 2024.
5. FY23 - Deferred STI grant date fair value of $4.80.
6. Following the compulsory acquisition of Boral by SGH on 4 June 2024, the Boral Board vested one third of the FY24 LTI - TSR and FY24
LTI - EPS rights. The remaining rights lapsed and employees were granted FY24 SGH Equity LTI Awards as part of the SGH make whole
awards set out in the SGH Bidders Statement.
7. Under the Corporations Act vesting of these rights is subject to shareholder approval at an Annual General Meeting.
129
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
17. Employee benefits (continued)
YEAR ENDED 30 JUNE 2023
Plan
Grant date
Expiry/
Vesting date
Fair value
Balance
at start
of year
Granted
Forfeited
Vested
Balance at
end of year
Deferred shares
Retention Plan
14 Oct 22
14 Oct 24
$16.74
–
68,710
(3,275)
–
65,435
FY22 STI
1 Jul 22
1 Jul 24
$15.34
–
245,275
(2,116)
–
243,159
FY21 STI
1 Jul 21
1 Jul 23
$19.25
162,358
–
(1,178)
–
161,180
FY20 STI
1 Jul 20
1 Jul 22
$16.08
169,177
–
–
(169,177)
–
Total
331,535
313,985
(6,569)
(169,177)
469,774
Performance rights
FY23 LTI - TSR
1 Jul 22
1 Sep 25
$8.62
–
588,075
(12,544)
–
575,531
FY22 LTI - TSR
1 Jul 21
1 Sep 24
$10.86
397,891
–
(16,048)
–
381,843
FY21 LTI - TSR
1 Jul 20
1 Sep 23
$11.46
380,265
–
(11,198)
–
369,067
FY20 LTI - TSR
1 Jul 19
1 Sep 22
$10.53
296,808
–
(296,808)
–
–
Total
1,074,964
588,075
(336,598)
–
1,326,441
Boral equity
CFO Sign-on
30 Jan 23
30 Jan 25
–
92,969
–
–
92,969
FY23 LTI - TSR - CEO
10 Oct 22
1 Sep 25
–
548,507
–
–
548,507
CEO Sign-on
10 Oct 22
10 Oct 25
–
262,992
–
–
262,992
CEO Sign-on
10 Oct 22
10 Oct 24
–
262,992
–
–
262,992
FY23 LTI - TSR
1 Sep 22
1 Sep 25
–
2,824,839
(264,295)
–
2,560,544
Deferred equity
30 Jun 22
1 Jan 24
20,750
–
–
–
20,750
Deferred equity
1 Jan 22
1 Jan 24
28,496
–
–
–
28,496
TSR
30 Jun 22
1 Sep 24
274,927
–
(137,463)
–
137,464
TSR
1 Sep 21
1 Sep 24
377,553
–
(188,776)
–
188,777
TSR
30 Jun 22
1 Sep 23
1,621,537
–
(464,663)
–
1,156,874
ROFE
30 Jun 22
1 Sep 23
807,284
–
(594,748)
–
212,536
TSR
1 Sep 20
1 Sep 23
2,226,791
–
(638,193)
–
1,588,598
ROFE
1 Sep 20
1 Sep 23
1,108,593
–
(816,715)
–
291,878
TSR
30 Jun 22
1 Sep 22
955,201
–
(955,201)
–
–
ROFE
30 Jun 22
1 Sep 22
477,580
–
(477,580)
–
–
TSR
1 Sep 19
1 Sep 22
1,311,718
–
(1,311,718)
–
–
ROFE
1 Sep 19
1 Sep 22
655,856
–
(655,856)
–
–
Total
9,866,286
3,992,299
(6,505,208)
–
7,353,377
SGH Annual Report 2024
130
18. Cash and cash equivalents
Accounting policy
Bank balances includes cash on hand and deposits held at call with financial institutions. Call deposits include other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
2024
$m
2023
$m
Bank balances
380.8
288.6
Call deposits
273.5
587.9
Cash and cash equivalents
654.3
876.5
19. Notes to the cash flow statement
2024
$m
2023
$m
Reconciliation of profit for the year to net cash flows related to operating activities
Profit for the year
522.1
646.5
Income tax expense
243.7
208.8
Income taxes paid
(235.7)
(84.0)
Depreciation and amortisation:
Right of use assets
107.1
101.9
Property, plant and equipment
390.5
400.8
Intangible assets
7.8
8.9
Capitalised borrowing costs amortised
5.0
6.5
Employee share movements in equity
9.3
10.0
Gain on sale of property, plant and equipment
(17.2)
(15.1)
Gain on disposal of discontinued operations
–
(18.9)
Net gain on disposal of controlled entities
(76.3)
–
Impairment of equity accounted investees
135.3
75.9
Fair value adjustments on acquisition of Boral
84.0
–
Fair value movement of Boral compulsory acquisition liability
(11.7)
–
Gain arising from investment in equity accounted investee
–
(2.3)
Share of results from equity accounted investees
118.2
(199.6)
Gain on settlement of interest bearing liabilities
–
(11.2)
Dividends and distributions received from equity accounted investees
38.3
44.8
Unwind of interest on convertible note and exchangeable bond
6.1
8.5
Accrual for Boral share purchases through compulsory share acquisition
(334.8)
–
Accrued investing flows for property, plant and equipment and other investments
(212.3)
(78.0)
Other
(4.1)
6.1
Movement in:
Trade and other receivables
124.6
(114.6)
Inventories
(490.1)
(153.4)
Other assets
38.7
(50.7)
Trade and other payables and deferred income
305.2
414.1
Provisions and employee benefits
54.4
(11.4)
Net operating cash flows
808.2
1,193.6
The movement in Trade and other payables contains an increase in relation to the accrual for Boral share purchases through compulsory share acquisition.
This liability has been included as a reconciling item in the above table as it is not related to an operating activity. During the prior year, $96.0 million was incurred
as non-cash investing expenditure in relation to SGH’s investment in Boral. Refer to Note 20: Interest bearing loans and borrowings for further detail.
Cash Management
131
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
20. Interest bearing loans and borrowings
Accounting policy
Borrowings are classified as current liabilities unless SGH has an unconditional right to defer settlement for at least 12 months after the
reporting date.
2024
$m
2023
$m
CURRENT
Interest bearing liabilities
701.5
367.4
Fixed term US dollar notes and bonds
–
83.0
Convertible note
0.1
–
Total interest bearing loans and borrowings – current
701.6
450.4
NON-CURRENT
Interest bearing liabilities
1,258.1
1,565.4
Convertible notes
–
44.1
Exchangeable bond
–
221.4
Fixed term US dollar notes and bonds
3,095.5
2,687.5
Fair value adjustment – cross currency swaps
(54.0)
(58.2)
Less: capitalised borrowing costs net of accumulated amortisation
(14.7)
(17.4)
Total interest bearing loans and borrowings – non-current
4,284.9
4,442.8
At 30 June 2024, SGH had available undrawn borrowing facilities of $1,148.2 million (2023: $1,226.0 million). SGH’s interest bearing liabilities
(including derivatives) as at 30 June 2024 had a weighted average interest rate of 5.7 per cent (2023: 5.6 per cent) including margins and
unused line fees.
Details of the fair values of each of the borrowings as well as SGH’s exposure to interest rate, foreign currency and liquidity risk related to
interest bearing loans and borrowings is disclosed in Note 21: Financial risk management.
Interest bearing liabilities
Current interest bearing liabilities include SGH’s short-term working capital facilities, remaining convertible note and $700.0 million bridge
facility, which was fully repaid in July 2024. In the prior year, it also included SGH’s equity-settled swap for Boral shares which was settled
during the year.
Non-current interest bearing liabilities include amounts drawn from SGH’s revolving syndicated loan facility, long-term Inventory Rental
Assistance Program Facility and subsidiary bank debt.
Syndicated loan facility
The syndicated loan facility comprises four tranches. The facility is unsecured and is supported by guarantees by the Company and
certain subsidiaries within SGH. Tranche A of the syndicated loan facility provides a $578.0 million limit until September 2028, Tranche B
provides $1,030.0 million limit until September 2027 and Tranche C provides a $280.0 million limit until April 2027. Tranche D had a limit of
$700.0 million and was fully repaid in July 2024 utilising the proceeds from the new Tranche E which provides $600.0 million limit until
July 2030.
Convertible notes and Exchangeable bond
The Company issued 3,500 convertible notes (Notes) on 5 March 2018 at a nominal value of $350.0 million and paying a cash coupon of
2.2 per cent per annum. Shareholder approval was obtained at the Company’s 2018 Annual General Meeting. The Notes are listed on the
Singapore Exchange and mature in March 2025 at their nominal value. The fair value of the liability for the Notes was calculated with reference
to market interest rates for an equivalent corporate bond without a conversion feature. During the year, $46.3 million of Notes were converted
into ordinary shares. One Note remains outstanding at 30 June 2024, with a face value of $100,000, maturing in March 2025.
In October 2021, Exchangeable bond (Bonds) of $250.0 million were issued. The Bonds had a fixed coupon of 4.625 per cent per annum and
were exchangeable into fully paid ordinary shares of Boral Limited. The fair value of the liability for the Bonds was calculated with reference
to market interest rates for an equivalent corporate bond without a conversion feature with the equity component recognised in the Equity
reserve. The Bonds had a maturity of October 2027, with a note holder early redemption option in October 2025. In May 2024, $249.8 million
of the total principal amount of the Company’s Exchangeable bond (Bonds) were exchanged into Boral shares and cancelled due to the
exercise of Exchange Rights by Noteholders in accordance with the terms of the Bonds. In June 2024, the remaining $0.2 million in principal
amount was repurchased by the Issuer and cancelled. There are no Bonds outstanding at 30 June 2024.
Cash Management
SGH Annual Report 2024
132
20. Interest bearing loans and borrowings (continued)
Fixed term US dollar notes
The Private Placement notes are unsecured and issued in US Dollar and Australian Dollar. The US144A notes are issued in US Dollars.
Principal and coupon payments for the US Dollar denominated notes issued by WesTrac and Coates are hedged by cross currency
interest rate swaps. The US Dollar denominated notes issued by Boral are hedged by cross currency interest rate swaps. SGH has issued
USPP notes denominated in US currency of US $1,153.0 million (2023: US$1,137.0 million) and A$1,052.8 million (2023: A$753.8 million)
with maturities ranging from 2026 to 2041. US144A notes total US$200.0 million (2023: US$200.0 million), maturing in 2028. Interest is
payable half yearly in arrears. The amount and maturity of the notes, including the effective hedge position, is summarised below.
Notes
Agreement
2024
Amount
US$m
2024
Spot
amount
A$m
2023
Amount
US$m
2023
Spot
amount
A$m
2024
Hedge
amount
A$m
Interest
rate
(incl. margin)
%
Maturity
date
US$ PRIVATE PLACEMENT NOTES
WesTrac Series B
2011
–
–
55.0
83.0
53.6
6.60%
7 Jul 23
WesTrac Series C
2011
75.0
113.2
75.0
113.1
73.1
6.52%
7 Jun 26
WesTrac Series D
2011
100.0
151.1
100.0
151.0
97.4
6.67%
7 Jul 26
WesTrac Series A
2020
75.0
113.2
75.0
113.1
115.2
8.01%
7 Jul 27
WesTrac Series B
2020
75.0
113.2
75.0
113.1
115.2
8.19%
7 Jul 32
WesTrac Series C
2024
71.0
107.2
–
–
111.7
7.84%
7 Jan 36
Boral Series A
2018
41.0
61.9
41.0
61.8
61.9
4.16%
1 May 27
Boral Series B
2018
24.0
36.2
24.0
36.2
36.2
4.31%
1 Mar 30
Boral Series C
2018
225.0
339.7
225.0
339.4
339.7
4.05%
16 Apr 26
Boral Series B
2020
100.0
151.1
100.0
150.8
151.0
4.58%
28 May 27
Coates Series A
2022
125.0
188.7
125.0
188.5
171.9
3.84%
12 Jan 29
Coates Series B
2022
108.0
163.0
108.0
162.9
148.5
4.17%
12 Jan 32
Coates Series C
2022
134.0
202.3
134.0
202.1
184.2
4.38%
12 Jan 34
US$ 144A NOTES
Boral Series B
2017
200.0
301.9
200.0
301.7
307.1
5.15%
1 May 28
Total US$ Notes
1,353.0
2,042.7
1,337.0
2,016.7
1,961.3
5.27%
A$ PRIVATE PLACEMENT NOTES
WesTrac Series E
2011
–
48.8
–
48.8
48.8
7.96%
7 Jul 41
WesTrac Series C
2020
–
230.0
–
230.0
230.0
4.27%
7 Jul 30
WesTrac Series A
2021
–
75.0
–
75.0
75.0
3.12%
23 Aug 31
WesTrac Series A
2024
–
178.0
–
–
178.0
7.24%
7 Jan 31
WesTrac Series B
2024
–
121.0
–
–
121.0
7.73%
7 Jan 36
Coates Series D
2022
–
140.0
–
140.0
140.0
3.76%
12 Jan 29
Coates Series E
2022
–
130.0
–
130.0
130.0
4.09%
12 Jan 32
Coates Series F
2022
–
130.0
–
130.0
130.0
4.30%
12 Jan 34
Total A$ Notes
–
1,052.8
–
753.8
1,052.8
5.17%
Reconciliation of liabilities arising from financing activities
Changes in SGH’s liabilities arising from financing activities, including both cash and non-cash changes, are detailed below. Liabilities arising
from financing activities are those for which cash flows were, or future cash flows will be, classified in SGH’s consolidated cash flow statement
from financing activities.
At
Jun 2023
$m
Financing
cash flows
$m
Effect of
exchange
rates
$m
Other (a)
$m
At
Jun 2024
$m
INTEREST BEARING LOANS AND BORROWINGS
Interest bearing liabilities
1,932.8
92.4
–
(65.6)
1,959.6
Fixed term US dollar notes and bonds
2,770.5
357.4
(32.4)
–
3,095.5
Convertible notes
44.1
–
–
(44.0)
0.1
Exchangeable bond
221.4
(0.4)
–
(221.0)
–
Capitalised borrowing costs
(17.4)
(5.0)
–
7.7
(14.7)
Fair value adjustment
(58.2)
–
–
4.2
(54.0)
Total interest bearing loans and borrowings
4,893.2
444.4
(32.4)
(318.7)
4,986.5
LEASE LIABILITIES
Lease liabilities
984.5
(90.3)
0.1
95.8
990.1
Total lease liabilities
984.5
(90.3)
0.1
95.8
990.1
Total
5,877.7
354.1
(32.3)
(222.9)
5,976.6
(a) Other includes non-cash reduction to Convertible notes and Exchangeable bond related to early conversions into equity and discount unwind of Convertible
notes and Exchangeable bond. Refer to Note 12: Right of use assets and lease liabilities for further detail on leases.
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21. Financial risk management
Overview
Risk management policies are established to identify and demonstrate that SGH understands and manages risk and seeks to ensure
that there is consistency to the methods used in assessing, monitoring and communicating risks so that risk management efforts are aligned
with SGH’s strategic and business objectives.
SGH has exposure to the following risks through the normal course of its operations and from its use of financial instruments:
(a) Market risk
(b) Liquidity risk
(c) Credit risk
The following presents information, both qualitative and quantitative, about SGH’s exposure to each of the above risks, its objectives,
policies and processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board has established a sound system of risk oversight and management and internal control which includes the establishment of
the Audit & Risk Committee (ARC). The ARC has been constituted with the function of assisting the Board to ensure that its corporate
governance and oversight responsibilities are fulfilled in relation to risk management and compliance with applicable laws and regulations.
The ARC is responsible for reviewing, evaluating and making recommendations to the Board in relation to:
–
assessing the risk management, compliance and control environment as it relates to the external and internal audit plans;
–
overseeing financial reporting; and
–
evaluating internal and external audit.
Accounting policy
SGH classifies its investments in the following categories: financial assets at fair value through profit or loss, financial assets at fair value
through other comprehensive income (FVTOCI) and amortised cost financial assets. The classification depends on SGH’s business model
for managing the financial asset as well as its contractual cash flow characteristics.
Management determines the classification of its investments at initial recognition. In the case of financial assets classified as FVTOCI,
this designation is irrevocable.
Financial assets at fair value through other comprehensive income
SGH’s existing listed and unlisted equity securities have been designated as financial assets at fair value through OCI.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are either financial assets held for trading which are acquired principally for the purpose of
selling with the intention of making a profit or financial assets that are managed and have their performance regularly evaluated by management
and the Directors on a fair value basis. Derivatives are also categorised as held for trading unless they are designated as hedges.
Recognition and de-recognition
Regular purchases and sales of investments are recognised on trade date – the date on which SGH commits to purchase or sell the asset.
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss.
Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in profit or
loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred
and SGH has transferred substantially all the risks and rewards of ownership.
Subsequent measurement
Financial assets at fair value through profit or loss and financial assets at FVTOCI are subsequently carried at fair value. Gains or losses
arising from changes in the fair value of the financial assets at fair value through profit or loss category, are presented in the profit or loss
within other income or other expenses in the period in which they arise. Dividend income from financial assets is recognised in the profit
or loss as other income.
Gains or losses arising from changes in the value of financial assets at FVTOCI category are taken to the fair value through OCI reserve.
In accordance with AASB 9, any gain or losses realised on the sale of these assets remain in the fair value reserve rather than being
transferred to the profit or loss.
Financial Assets and Liabilities
SGH Annual Report 2024
134
21. Financial risk management (continued)
At the reporting date SGH held the following financial instruments:
Note
2024
$m
2023
$m
Financial assets/(liabilities)
Cash and cash equivalents
18
654.3
876.5
Financial assets/(liabilities) carried at amortised cost
Trade and other receivables and Contract assets
8
1,524.7
1,649.3
Trade and other payables (excluding accruals)
(749.2)
(749.1)
Fixed term US dollar notes
20
(3,095.5)
(2,770.5)
Fair value adjustment relating to US dollar notes
20
54.0
58.2
Convertible notes and Exchangeable bond
20
(0.1)
(265.5)
Interest bearing loans and borrowings
20
(1,959.6)
(1,932.8)
Financial assets carried at fair value through other comprehensive income
Unlisted equity securities
22
66.1
96.2
Derivative financial instruments designated and effective and carried
at fair value through profit or loss
Derivative financial assets
23
150.5
188.1
Derivative financial liabilities
23
(70.9)
(69.0)
Total financial assets and financial liabilities
(3,425.7)
(2,918.6)
(a) Market risk
SGH is exposed to market risk through foreign exchange, interest rate, equity price, commodity price and energy price risk.
(i) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is
not the entity’s functional currency.
SGH is exposed to fluctuations in foreign currency, predominantly in United States Dollar (USD).
SGH will seek to minimise exposure to foreign exchange risk by initially seeking contracts effectively denominated in AUD where possible.
Where this is not possible SGH will manage foreign exchange risk as follows:
–
in certain circumstances SGH invoices customers in USD. Where SGH invoices in USD it may seek to match the USD receipt with
USD denominated vendor payments. As a result, an economic hedge is created by minimising exposure to changes in the AUD/USD
exchange rate. Payments and receipts are made from and to SGH’s USD denominated bank account.
–
external forward contracts and options are used to manage foreign exchange risk. Contracts are entered into on a transaction
by transaction basis to hedge specific purchases, sales and borrowings.
SGH’s foreign exchange risk from recognised assets and liabilities arises primarily from long-term USD denominated borrowings
(refer to Note 20: Interest bearing loans and borrowings). SGH effectively hedges its long-term foreign denominated borrowings using a
combination of designated forward exchange contracts and cross currency swaps. At times, the Company may choose to hold cash
positions in USD to hedge against anticipated weakening in the AUD.
The financial statements for foreign group companies that have a functional currency different from Australian Dollars are translated into
Australian Dollars on consolidation. Exchange differences arising from the translation are taken to reserves and as such the individual
account balances of the SGH companies are excluded from the table below.
Excluding assets and liabilities for SGH’s foreign entities translated, SGH’s exposure to foreign currency risk was as follows, based on
notional amounts other than derivative financial instruments which are shown at fair value:
FOREIGN CURRENCY RISK
2024
US$m
2023
US$m
Cash and cash equivalents
57.8
31.0
Trade and other receivables
161.3
69.2
Trade and other payables
(262.9)
(391.8)
Borrowings
(1,353.0)
(1,237.0)
Unlisted equity securities
43.8
63.8
Derivative financial instruments
73.6
104.2
Closing exchange rates (a)
0.6624
0.6630
(a) Closing rate per the Reserve Bank of Australia at 4pm (AEST) on 30 June 2024.
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Sensitivity analysis
As at 30 June 2024, the closing AUD/USD exchange rate was 0.6624 (2023: 0.6630) as reported by the Reserve Bank of Australia.
A foreign currency sensitivity of +/- five per cent has been selected and is considered reasonable given the historical AUD/USD exchange
rates prevailing in the year ended 30 June 2024. During the year, the average AUD/USD exchange rate was 0.6556 (2023: 0.6734) and traded
within a range of 0.6278 to 0.6889 (2023: 0.6230 to 0.7150).
At 30 June 2024, had the AUD/USD exchange rate moved by five per cent, with all other variables held constant, post tax profit/(loss) and
equity would have been affected as illustrated in the table below:
JUDGEMENT OF REASONABLY POSSIBLE MOVEMENTS
2024
Profit/(loss)
$m
2024
Equity
$m
2023
Profit/(loss)
$m
2023
Equity
$m
AUD to USD +5%
3.8
0.1
15.5
(6.6)
AUD to USD -5%
(4.3)
0.4
(17.1)
11.8
A sensitivity of five per cent is considered reasonable given the current level of prices and the volatility observed both on a historical basis and
market expectations for future movements.
Adverse versus favourable movements are determined relative to the net underlying exposure. An adverse movement in exchange rates
implies an increase in SGH’s foreign currency exposure leading to deterioration in SGH’s financial position. A favourable movement in
exchange rates implies a decrease in SGH’s foreign currency exposure and an improvement in SGH’s financial position.
SGH’s exposure to other foreign exchange movements is not material.
(ii) Interest rate risk
SGH’s exposure to interest rate risk arises from AUD cash deposits and short to medium term borrowings which are at variable interest
rates in AUD. Generally, long-term fixed rate borrowings are obtained in the USA and Australia, while shorter term variable borrowings are
denominated in Australian currency and expose SGH to interest rate risk. SGH manages this risk by using derivative financial instruments
including interest rate swaps and collars to hedge interest rate exposure.
As at 30 June 2024, 48 per cent (2023: 46 per cent) of SGH’s total borrowings were subject to fixed interest rates or were effectively hedged
with derivative financial instruments.
At 30 June 2024, SGH had the following mix of financial assets and liabilities exposed to Australian and United States variable interest rate risk.
2024
$m
2023
$m
Financial assets
Cash and cash equivalents
650.7
288.6
650.7
288.6
Financial liabilities
Interest bearing liabilities
(2,600.5)
(2,656.9)
(2,600.5)
(2,656.9)
The following table shows the annualised impact on profit or loss and equity of interest bearing assets and liabilities if floating interest rates at
balance date had been one per cent (100 basis points) higher or lower for the year, with all other variables held constant.
2024
Profit/(loss)
$m
2024
Equity
$m
2023
Profit/(loss)
$m
2023
Equity
$m
If interest rates were 1% (100 basis points) higher with all other
variables held constant – increase/(decrease)
(13.8)
(9.6)
(17.6)
(16.9)
If interest rates were 1% (100 basis points) lower with all other
variables held constant – increase/(decrease)
13.8
10.1
17.6
18.0
As a result of the regulatory reform on benchmark rates, LIBOR was replaced by an alternative benchmark rate from 1 July 2023. Existing
interest rate derivatives that had referenced the US Dollar London Interbank Offer Rate (USD LIBOR) were replaced with the Secured
Overnight Financing Rate (SOFR). There is no change to SGH’s risk management activities as a result of the reform.
Financial Assets and Liabilities
SGH Annual Report 2024
136
21. Financial risk management (continued)
(iii) Equity price risk
Equity price risk refers to the risk that the value of a financial instrument or its associated cash flows will fluctuate due to changes in the
underlying share prices.
SGH has exposure to equity price risk arising from its portfolio of listed equity securities. SGH utilises derivatives to hedge this exposure as
well as to gain economic exposure to equity securities.
SGH may also be exposed to equity price risk through its holdings of listed investments accounted for using the equity method and as part of
SGH’s impairment assessment process.
The following table shows the impact on the profit or loss and equity of SGH if equity prices (excluding equity accounted investments) at
balance date had been 20.0 per cent higher or lower, with all other variables held constant (2023: 20.0 per cent). A sensitivity of 20.0 per cent
is considered reasonable given the current level of prices and the volatility observed both on a historical basis and market expectations for
future movement.
2024
Profit/(loss)
$m
2024
Equity
$m
2023
Profit/(loss)
$m
2023
Equity
$m
If share prices were 20% higher with all other variables
held constant – increase/(decrease)
–
4.2
–
7.6
If share prices were 20% lower with all other variables
held constant – increase/(decrease)
–
(4.2)
–
(7.6)
(iv) Commodity and energy price risk
Commodity price risk is the risk that SGH is exposed to fluctuations in commodity prices. SGH has an operating interest in oil and gas assets
located in Australia and the United States of America. These investments expose SGH to commodity price risk from fluctuations in the prices
of oil, natural gas and other condensates and natural gas liquids (NGLs). SGH does not currently hedge its exposure to energy price risk
relating to the future sale of these energy products. SGH is exposed to price risk relating to the purchase of electricity, diesel, natural gas,
coal, clinker and other oil and gas based products. SGH hedges a portion of these exposures using fixed price contracts, swaps and options.
The following table shows the impact on the profit or loss and equity of SGH if commodity prices at balance date had been 10.0 per cent
higher or lower, with all other variables held constant (2023: 10.0 per cent). A sensitivity of 10.0 per cent is considered a reasonable estimate
of a short-term commodity price dislocation.
2024
Profit/(loss)
$m
2024
Equity
$m
2023
Profit/(loss)
$m
2023
Equity
$m
If commodity prices were 10% higher with all other variables
held constant – increase/(decrease)
–
10.7
–
8.7
If commodity prices were 10% lower with all other variables
held constant – increase/(decrease)
–
(10.7)
–
(8.7)
In November 2022, Boral entered into a solar power purchase agreement for a period of ten years from the commencement of commercial
production expected from January 2025. The agreement is not a physical electricity supply contract. It operates as a contract for difference
where a payment is made between the parties based on the differential between the NSW electricity spot price and an agreed fixed price.
The contract is a derivative and is measured at fair value through profit or loss.
(b) Liquidity risk
Liquidity risk refers to the risk that SGH is unable to meet its financial commitments as and when they fall due.
SGH employs a prudent liquidity risk management approach. This involves maintaining a large amount of liquid reserves (cash deposits,
listed shares and available credit lines) that can be drawn or sold at short notice to meet SGH’s financial commitments. Management
monitors SGH’s ongoing cash flow requirements on a daily basis. Due to the dynamic nature of the underlying businesses, SGH aims to
maintain flexibility in funding by keeping credit lines committed and available.
SGH’s foreign exchange risk arises primarily from:
–
borrowings denominated in a foreign currency; and
–
firm commitments of highly probable forecast transactions for receipts and payments settled in foreign currency.
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Financing arrangements
SGH had access to the following undrawn borrowing facilities at the reporting date:
FLOATING RATE
2024
$m
2023
$m
Expiring within one year
253.2
304.3
Expiring beyond one year
895.0
921.7
1,148.2
1,226.0
ADDITIONAL LIQUIDITY
Cash and cash equivalents
654.3
876.5
Unutilised short dated lines of credit
9.1
6.5
663.4
883.0
Subject to continued compliance with facility terms, the facilities may be drawn at any time. The average maturity for drawn facilities is
4.1 years (2023: 4.6 years) and 2.3 years (2023: 2.9 years) for undrawn facilities.
Maturities of financial liabilities
The table below analyses SGH’s financial liabilities (including derivative financial instruments) into relevant maturity groupings based on the
remaining period at the reporting date to the contractual maturity date. Gross cash flows include principal, coupon and premium (on put
options) payments at contracted rates. The amounts disclosed are the contracted undiscounted cash flows.
YEAR ENDED 30 JUNE 2024
Within
1 year
$m
Between 1
and 2 years
$m
Between 2
and 5 years
$m
Over 5
years
$m
Total
contractual
cash flows
$m
Carrying
amount
$m
Trade and other payables
(excluding accruals)
741.3
7.9
–
–
749.2
749.2
Borrowings – variable rate
– principal (including derivative)
701.4
73.5
1,470.6
265.9
2,511.4
2,521.3
– coupon interest and derivative
141.4
110.3
177.5
81.4
510.6
–
Borrowings – fixed rate
– principal (including derivative)
0.1
–
311.9
2,097.3
2,409.3
2,394.5
– coupon interest and derivative
115.3
115.3
345.8
480.5
1,056.9
–
1,699.5
307.0
2,305.8
2,925.1
7,237.4
5,665.0
YEAR ENDED 30 JUNE 2023
Trade and other payables
(excluding accruals)
747.1
2.0
–
–
749.1
749.1
Borrowings – variable rate
– principal (including derivative)
422.2
413.6
1,436.4
265.9
2,538.1
2,548.9
– coupon interest and derivative
147.6
106.6
226.8
102.9
583.9
–
Borrowings – fixed rate
– principal (including derivative)
–
46.4
250.0
1,997.5
2,293.9
2,229.1
– coupon interest and derivative
96.9
96.9
281.9
411.8
887.5
–
1,413.8
665.5
2,195.1
2,778.1
7,052.5
5,527.1
(c) Credit risk
Credit risk is the risk of financial loss to SGH if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and
arises principally from SGH’s receivables, cash and cash equivalents and investment securities.
SGH’s maximum exposure to credit risk at the reporting date was:
Note
2024
$m
2023
$m
Cash and cash equivalents
18
654.3
876.5
Trade and other receivables and Contract assets
8
1,524.7
1,649.3
Unlisted equity securities
66.1
96.2
Derivative financial instruments
22
150.5
188.1
2,395.6
2,810.1
SGH’s and the Company’s exposure to credit risk is predominately in Australia.
Financial Assets and Liabilities
SGH Annual Report 2024
138
21. Financial risk management (continued)
Expected credit loss and ageing – trade receivables
SGH’s exposure to expected credit loss and ageing in relation to trade receivables is outlined below.
The ageing analysis of these trade receivables is as follows:
2024
$m
2023
$m
Past due 1–30 days
142.0
118.4
Past due 31–60 days
19.7
32.4
Past due 61–90 days
7.7
13.5
> 91 days
21.1
27.6
Total trade receivables past due
190.5
191.9
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
2024
$m
2023
$m
Balance at beginning of the year
24.4
18.8
Impairment loss recognised in profit or loss
16.1
10.4
Receivables expensed as uncollectable during the year
(9.4)
(4.8)
Amounts disposed in relation to disposal of businesses
(0.5)
–
Balance at end of the year
30.6
24.4
In certain circumstances SGH enters into guarantees as part of ordinary trading operations. These guarantees are included within financial
guarantees in Note 26: Contingent liabilities.
(d) Fair value measurements
Financial instruments measured at fair value
The fair value of:
–
financial instruments traded in active markets are based on quoted market prices at the reporting date. The quoted market prices used for
financial assets held by SGH are the closing bid prices for the assets. SGH has elected that the fair value adjustments on SGH’s listed and
unlisted equity securities recorded in other comprehensive income and not subsequently reclassified to profit or loss.
–
forward foreign exchange contracts are determined using quoted forward exchange rates at the reporting date.
–
interest rate swaps and collars and cross currency interest rate swaps are calculated using the present value of the estimated future cash
flows of these instruments.
–
commodity and energy derivatives are determined using quoted commodity prices and forward rates at the reporting date.
–
equity derivatives are calculated based on the closing bid price of the underlying equities.
SGH has a power purchase agreement with a fair value of $1.9 million at 30 June 2024 (2023: $2.2 million) included within Commodity swaps
and options used for hedging. This has valuation inputs in Level 3 of the hierarchy. Refer section (a)(iv) Commodity and energy price risk
within this Note for further detail.
Financial instruments not measured at fair value
The interest rates used to discount estimated cash flows relating to the fixed term US dollar notes were 5.5 to 6.7 per cent
(2023: 5.5 to 7.2 per cent) and are based on the government yield curve at the reporting date plus an adequate credit spread.
SGH uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – fair value is estimated using quoted prices in active markets.
Level 2 – fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability either
directly (as prices) or indirectly (derived from prices).
Level 3 – fair value is estimated using inputs for the asset or liability that are not based on observable market data.
The methods used in estimating fair value of financial assets and liabilities are disclosed on the following page.
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Note
Level in
fair value
hierarchy
2024
Carrying
amount
$m
2024
Fair value
$m
2023
Carrying
amount
$m
2023
Fair value
$m
Financial assets measured at fair value
Unlisted equity securities
3
66.1
66.1
96.2
96.2
Forward foreign exchange contracts
22
2
2.8
2.8
8.3
8.3
Commodity swaps and options
22
2/3
9.1
9.1
3.4
3.4
Cross currency swaps
22
2
138.6
138.6
176.4
176.4
216.6
216.6
284.3
284.3
Financial assets not measured
at fair value
Cash and cash equivalents
18
–
654.3
654.3
876.5
876.5
Trade and other receivables and Contract
assets
8
–
1,524.7
1,524.7
1,649.3
1,649.3
2,179.0
2,179.0
2,525.8
2,525.8
Financial liabilities measured
at fair value
Forward foreign exchange contracts
22
2
1.5
1.5
3.2
3.2
Commodity swaps and options
22
2
1.5
1.5
4.8
4.8
Cross currency swaps
22
2
56.6
56.6
49.0
49.0
Interest rate swaps and options
22
–
11.2
11.2
12.0
12.0
70.8
70.8
69.0
69.0
Financial liabilities not measured
at fair value
Trade and other payables
(excluding accruals)
–
749.2
749.2
749.1
749.1
Fixed term US dollar notes
20
2
3,095.5
3,000.2
2,770.5
2,530.5
Fair value adjustment relating
to US dollar notes
20
–
(54.0)
(54.0)
(58.2)
(58.2)
Convertible note and Exchangeable bond
20
2
0.1
0.1
265.5
265.1
Other borrowings
20
2
1,959.6
1,959.6
1,932.8
1,932.8
5,750.4
5,655.1
5,659.7
5,419.3
There were no transfers between the fair value hierarchy levels during the year.
Valuation techniques – Level 3
Unlisted equity securities
Unlisted equity securities comprise SGH’s investment in an unlisted investment fund (investment fund), which is accounted for as a financial
asset measured at fair value through other comprehensive income. Whilst this investment fund invests in both foreign listed and unlisted equity
securities, the investment is not quoted in an active market and accordingly the fair value of this investment is included within Level 3 of the
hierarchy.
Audited information is obtained from the investment fund regarding the fair value of the investment. SGH recognises any movement in the fair
value of the investment in equity through the fair value reserve. The methodology followed by the investment fund in fair valuing its underlying
investments is outlined below.
Under the market based method, the investment fund’s manager determines comparable public companies (peers) based on industry
size, leverage and strategy and calculates an appropriate trading multiple for each comparable company identified. The trading multiple
is then discounted for considerations such as illiquidity and size differences between the comparable companies based on company
specific facts and circumstances. The discounted multiple is applied to the corresponding earnings measure of the investee company
to measure the fair value.
Financial Assets and Liabilities
SGH Annual Report 2024
140
21. Financial risk management (continued)
Valuation process for Level 3 valuations
The valuation of unlisted equity securities is performed on a quarterly basis by the investment fund’s manager and reviewed by their
investment committee. The valuations are also subject to quality assurance procedures performed within the investment fund.
The investment fund manager verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation
to relevant documents and market information. In addition, the accuracy of the computation is tested. The latest valuation is also compared
with the valuations in the four preceding quarters as well as with the valuations of the two preceding annual periods. If fair value changes
(positive or negative) are more than certain thresholds set, the changes are further considered by the fund’s investment committee.
The fund’s investment committee considers the appropriateness of the valuation methods and inputs, and may request that alternate
valuation methods are applied to support the valuations arising from the method chosen. Any changes in valuation methods are discussed
and agreed with the investment partners. The investment fund presents the valuation results on a quarterly basis to SGH. The report includes
a discussion of the major assumptions used in the valuations, with an emphasis on the more significant investments and investments with fair
value changes outside of the relevant thresholds set out above. SGH’s investment committee regularly reviews this information and assesses
the performance of SGH’s investment.
Quantitative information on significant unobservable inputs – Level 3
Description
Valuation
technique
Unobservable input
2024
Range
2023
Range
Unlisted equity investments
Recent transactions
Not applicable
n/a
n/a
P/E multiple
Average P/E multiple of peers
27.0–31.7x
31.7x
Discount for lack of liquidity
25%
25%
EBITDA multiple
Average EBITDA multiple of peers
11.7
11.7x
Discount for lack of liquidity
25%
25%
EV/sales multiple
Average price/sales multiple of peers
2.2–6.2x
2.6–4.1x
Discount for lack of liquidity
25%
25%
Reconciliation – Level 3
The following table shows a reconciliation of movements in the fair value of unlisted equity securities categorised within Level 3.
2024
$m
2023
$m
Balance at the beginning of the year
96.2
110.7
Contributions, net of capital returns
(10.7)
(0.3)
Fair value losses
(19.4)
(14.2)
Balance at the end of the year
66.1
96.2
(e) Master Netting or Similar Arrangements
SGH enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master netting agreements. In general,
under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same
currency are aggregated into a single net amount that is payable by one party to the other. In certain circumstances, e.g. when a credit event
such as a default occurs, all outstanding transactions under the agreement are terminated, the termination value is assessed and only a
single net amount is payable in settlement of all transactions.
The ISDA agreements do not meet the criteria for offsetting in the statement of financial position. This is because SGH does not have any
currently legally enforceable right to offset recognised amounts, because the right to offset is enforceable only on the occurrence of future
events such as a default on the bank loans or other credit events.
(f) Capital management
SGH manages its capital to safeguard SGH’s ability to continue as a going concern and to maintain an optimal capital structure while
maximising shareholder value. As such, the Board regularly reviews SGH’s capital structure in order to take advantage of favourable costs of
capital and returns on assets. SGH maintains a diversified capital base with a mixture of equity and debt funding. Equity funding comprises
ordinary shares.
SGH’s dividend policy is to distribute cash from operating activities after financing costs, subject to the retention of adequate cash reserves
to capitalise on investment opportunities. Dividends are franked to the greatest extent possible.
Refer to Note 25: Dividends for details of dividends paid and proposed but not provided for during the year.
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22. Derivative financial instruments
Accounting policy
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair
value at each reporting date. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged.
SGH designates certain derivatives as either:
–
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or
–
hedges of the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges).
SGH documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its
risk management objective and strategy for undertaking various hedge transactions. SGH also documents its assessment, both at hedge
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly
effective in offsetting changes in fair values or cash flows of hedged items.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is
more than 12 months. It is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.
Trading derivatives are classified as a current asset or liability.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss, together with any
changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective
portion of interest rate swaps hedging fixed rate borrowings is recognised in profit or loss within interest expense, together with changes
in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion is
recognised in the profit or loss within other income or other expenses.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the
effective interest method is used is amortised to profit or loss over the period to maturity using a recalculated effective interest rate.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other
comprehensive income in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit
or loss within other income or other expenses.
Amounts accumulated in other comprehensive income are recycled in the profit or loss in the periods when the hedged item affects profit
or loss (for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of interest rate
swaps hedging variable rate borrowings is recognised in profit or loss within interest expense.
The gain or loss relating to the effective portion of forward foreign exchange contracts hedging export sales is recognised in profit or loss
within sales. However, when the forecast transaction that is hedged results in the recognition of a non financial asset (for example, inventory
or property, plant and equipment), the gains and losses previously deferred in other comprehensive income are transferred from other
comprehensive income and included in the initial measurement of the cost of the asset. The deferred amounts are ultimately recognised in
profit or loss as a cost of goods sold in the case of inventory, or as depreciation in the case of property, plant and equipment.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive income and is recognised when
the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was reported in other comprehensive income is immediately transferred to profit or loss.
Financial Assets and Liabilities
SGH Annual Report 2024
142
22. Derivative financial instruments (continued)
2024
$m
2023
$m
CURRENT ASSETS
Cross currency interest rate swaps
–
29.4
Forward foreign exchange contracts
2.8
7.7
Commodity swaps and options
5.6
0.6
8.4
37.7
NON-CURRENT ASSETS
Cross currency interest rate swaps
138.6
147.0
Forward foreign exchange contracts
–
0.6
Commodity swaps and options
3.5
2.8
142.1
150.4
CURRENT LIABILITIES
Forward foreign exchange contracts
(1.5)
(3.2)
Commodity swaps and options
(1.5)
(4.4)
(3.0)
(7.6)
NON-CURRENT LIABILITIES
Cross currency interest rate swaps
(56.7)
(49.0)
Interest rate swaps and collars
(11.2)
(12.0)
Commodity swaps and options
–
(0.4)
(67.9)
(61.4)
Net derivative financial instruments
79.6
119.1
SGH is a party to derivative financial instruments in the normal course of business in order to hedge exposure to fluctuations in interest rates,
foreign exchange rates, commodity and energy prices in accordance with SGH’s financial risk management policies. SGH also enters into
equity derivatives from time to time to hedge the value of listed investments or to gain exposure to certain market sectors. Refer to
Note 21: Financial risk management for further details.
Interest rate swaps
SGH’s policy is to hedge a portion of its interest bearing liabilities from exposure to changes in interest rates. The gain or loss from
remeasuring the hedging instruments to fair value is deferred in equity in the hedge reserve and reclassified into profit or loss when the
hedged interest expense is recognised. To the extent that the hedge is ineffective or undesignated, the fair value movement is recognised
as fair value through profit or loss.
Forward foreign exchange contracts
SGH has entered into forward foreign currency exchange contracts to hedge USD denominated debt in conjunction with cross currency
swaps. From time to time SGH also enters into forward foreign exchange contracts to hedge certain known trading commitments and capital
expenditure predominantly denominated in US Dollars. The terms of these commitments are generally shorter than one year.
Commodity swaps
SGH uses commodity swaps and options to hedge a component of exposure to commodity and energy price risk. The maximum permitted
term for a hedge transaction is two years.
Power purchase agreement
Boral entered into a virtual solar power purchase agreement (PPA) in November 2022 for a period of ten years from the commencement
of commercial production, expected from January 2025. The solar farm is situated in Wellington North, NSW. Boral has no involvement
in financing, operating or maintaining the solar farm. Boral will buy 7.4 per cent of total generation from LightsourceBP Solar farm with a
nameplate capacity of 330MWAC. Boral’s expected share is 60,000 MWhs which represents ~17 per cent of Boral’s current electricity
consumption. The PPA is not a physical electricity supply contract. It operates as a “contract for differences” (CfD) whereby the parties have
agreed to a ‘Bundled Price’. If the NSW electricity spot price is higher than the Bundled Price then the LightsourceBP will pay the difference
to Boral and vice versa. The CfD is a derivative and is required to be fair valued at each reporting date with any movements recorded in the
profit or loss. Boral will also obtain the related large-scale generation certificates (LGC).
The key inputs impacting the value of the derivative are the strike price, the contract period, forward NSW electricity spot prices (Level 3
unobservable input), future estimates of Boral’s share of solar output and the credit worthiness of the service provider. The 30 June 2024
PPA derivative payable was valued at $1.9 million (June 2023: $2.2 million). The profit impact from a reasonably possible movement in spot
electricity prices (+/- 10 per cent) is +/- $3.5 million.
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Cross currency swaps
SGH has obligations to repay the principal and interest relating to USD denominated debt. SGH enters into cross currency swap contracts to
hedge these obligations.
At 30 June 2024, SGH held various types of derivative financial instruments that were designated as cash flow hedges of future forecast
transactions. These were hedging of:
–
future foreign currency operational payments by forward exchange contracts;
–
future foreign currency principal and coupon payments by forward exchange contracts;
–
future commodity payments by forward exchange contracts;
–
future foreign currency capital expenditure by forward exchange contracts; or
–
future interest payments by interest rate derivative contracts.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments may not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not
qualify for hedge accounting are recognised immediately in profit or loss. The effective portion of the cumulative net change in the value of
derivative financial instruments designated as a cash flow hedge are included in the hedge reserve. The periods in which the related cash
flows are expected to occur are summarised below.
YEAR ENDED 30 JUNE 2024
Within
1 year
$m
Between
1 to 5 years
$m
Over
5 years
$m
Total
$m
Contracts to hedge
Future operational (sales and purchases)
1.3
–
–
1.3
Future principal and interest on borrowings
13.5
(54.3)
24.9
(15.9)
Future commodity and energy purchases
4.1
3.5
–
7.6
Total net gain/(loss) included in the hedge reserve
18.9
(50.8)
24.9
(7.0)
YEAR ENDED 30 JUNE 2023
Contracts to hedge
Future operational (sales and purchases)
4.5
0.6
–
5.1
Future principal and interest on borrowings
(20.7)
(38.5)
16.8
(42.4)
Future commodity and energy purchases
(3.8)
2.4
–
(1.4)
Total net (loss)/gain included in the hedge reserve
(20.0)
(35.5)
16.8
(38.7)
Boral’s power purchase agreement with a carrying value of $1.9 million (2023:$2.2 million) is not hedge accounted and is not included in the
above table.
Financial Assets and Liabilities
SGH Annual Report 2024
144
22. Derivative financial instruments (continued)
CARRYING AMOUNT
HEDGE ACCOUNTING
YEAR ENDED 30 JUNE 2024
Notional
amount
of hedging
instrument
& hedged
item
Hedge
rates
Assets
$m
Liabilities
$m
Change in
value of
hedging
instrument
$m
Change in
value of
hedged item
$m
Hedge
ineffective-
ness
recognised
in profit
or loss
$m
Amount
reclassified
from hedge
profit
or loss
$m
Cash flow hedges
Operational (sales and
purchases) – foreign
exchange contracts
(up to 1 year)
AUD 462.4
AUD/USD
0.69-0.64
2.2
(1.9)
(0.1)
0.1
–
(2.3)
Cross currency interest
rate swaps
(up to 3 years)
AUD 170.5
AUD/USD
1.03
94.0
–
(29.7)
31.8
–
3.5
Cross currency interest
rate swaps
(up to 7 years)
AUD 867.4
AUD/USD
0.68
16.6
(0.6)
(0.9)
0.9
–
2.8
Cross currency interest
rate swaps
(up to 10 years)
AUD 230.4
AUD/USD
0.65
–
(6.8)
4.8
(6.8)
2.0
(8.9)
Cross currency interest
rate swaps
(up to 11 years)
AUD 504.6
AUD/USD
0.73
28.0
–
45.5
(48.6)
–
(3.7)
Cross currency interest
rate swaps
(up to 12 years)
AUD 112.0
AUD/USD
0.64
–
(8.3)
(4.9)
5.5
0.6
–
USD diesel costs –
commodity swaps
(up to 2 years)
AUD 75.9
USD/
Barrel
86.84 - 109.29
4.7
(0.3)
5.7
(5.7)
–
3.2
USD coal costs –
commodity swaps
(up to 2 years)
AUD 10.7
USD/MT
144.7
–
(0.5)
(0.2)
0.2
–
(1.7)
Electricity costs –
commodity swaps
and options
(up to 2 years)
AUD 19.1
AUD/MWh
47.25 - 159
2.5
(0.2)
4.4
(4.4)
–
(8.0)
Natural gas costs –
commodity options
(up to 2 years)
AUD 2.4
AUD/Gj
19.5
–
(0.6)
(0.4)
0.4
–
(1.4)
Capital expenditure –
foreign exchange contracts
(up to 1 year)
AUD 0.2
AUD/EUR
0.60–0.61
–
–
–
–
–
–
Capital expenditure –
foreign exchange contracts
(up to 1 year)
AUD –
AUD/JPY
97.79
–
–
0.1
(0.1)
–
(1.4)
Capital expenditure –
foreign exchange contracts
(up to 1 year)
AUD 55.0
AUD/USD
0.65-0.68
0.9
(0.2)
0.8
(0.8)
–
0.1
Foreign currency
borrowings - 144A/Reg S
senior notes and
USPP senior notes
AUD 590.0
Fixed
3.75 - 4.58
–
–
–
–
–
–
Fair value hedges
Cross currency interest
rate swaps
(up to 3 years)
AUD 170.5
AUD/USD
1.03
–
(3.0)
(0.1)
5.3
(0.2)
–
Cross currency interest
rate swaps
(up to 10 years)
AUD 230.4
AUD/USD
0.65
–
(38.0)
(0.8)
2.8
1.2
–
Interest on USD borrowings
– interest rate swaps
(up to 7 years)
AUD 100.0
6.95-6.97%
–
(11.2)
0.9
(0.9)
–
(4.3)
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23. Capital
Accounting policy
Contributed equity
Ordinary shares, convertible notes and other equity securities are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in other comprehensive income and presented
as contributed equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares
or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs is
recognised as a deduction from equity.
Treasury shares
Treasury shares consist of shares held in trust for SGH’s executives in relation to employee equity benefits.
2024
$m
2023
$m
CONTRIBUTED EQUITY
400,343,655 ordinary shares, fully paid (2023: 363,260,588)
4,802.6
3,382.2
Convertible notes, fully paid
–
4.2
1,001,045 treasury shares, fully paid (2023: 459,450)
(40.2)
(11.1)
Balance at end of the year
4,762.4
3,375.3
MOVEMENT IN ORDINARY SHARES
Balance at beginning of the year
3,382.2
3,382.2
Shares issued during the year - convertible notes
44.7
–
Shares issued during the year - Boral takeover
1,371.5
–
Transfer of convertible notes within contributed equity
4.2
–
Balance at end of the year
4,802.6
3,382.2
MOVEMENT IN TREASURY SHARES
Balance at beginning of the year
(11.1)
(3.4)
Shares vested and transferred to employees
11.7
3.4
On-market share acquisition
(40.8)
(11.1)
Balance at end of the year
(40.2)
(11.1)
The Company does not have authorised share capital or par value in respect of its issued shares. All issued shares are fully paid. Holders
of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholders’
meetings. In the event of winding up of the Company, ordinary shareholders rank after creditors and are fully entitled to any proceeds
on liquidation.
Ordinary shares
During the year, the Company issued shares under the Boral takeover, with 0.1116 SGH shares being issued for each Boral share acquired.
As a result, 35,153,902 SGH shares were issued. Refer to Note 28: Events subsequent to balance date for further detail on shares issues
subsequent to year-end in relation to the Boral takeover.
Convertible notes
The Company issued 3,500 convertible notes (Notes) on 5 March 2018 at a nominal value of $350.0 million and paying a cash coupon of
2.2 per cent per annum. The Notes are listed on the Singapore Exchange and mature in March 2025 at their nominal value. Alternatively,
they can be converted into ordinary shares at the holder’s option at a conversion price of $24 per ordinary share (subject to adjustments
as stipulated in the terms of the convertible note). Shareholder approval was granted at the Company’s 2018 Annual General Meeting in
November 2018, thereby converting the derivative liability to shareholder equity.
During the year, 463 Notes were converted, resulting in 1,929,165 ordinary shares being issued at $24 per share. At 30 June 2024,
one Note remains (2023: 464 Notes). Refer to Note 20: Interest bearing liabilities and borrowings for further details.
Treasury shares
The Company acquired 1,025,000 shares on market for $40.8 million (2023: 458,000 shares on market for $11.1 million) to satisfy employee
share scheme obligations in future periods.
Capital Structure
SGH Annual Report 2024
146
24. Reserves
Nature and purpose of reserves
Acquisitions
reserve
The acquisitions reserve is used to record the difference between the fair value of consideration paid for the
non-controlling interest of subsidiaries and the book value of those subsidiaries’ share of net assets at date of acquisition.
Equity benefits
reserve
The equity benefits reserve is used to record the value of equity benefits provided to employees as part of their
remuneration.
Common control
reserve
The acquisition of WesTrac Group by the Company during the period ended 30 June 2010 was accounted for as a
common control transaction. As a consequence, the difference between the fair value of the consideration paid and
the existing book values of assets and liabilities of the WesTrac Group was debited to a common control reserve.
Upon disposal of all interests in WesTrac Group by SGH this reserve would be transferred to retained earnings.
Hedge reserve
The hedge reserve records the effective portion of the cumulative net change in fair value of hedging instruments
related to cash flow hedged transactions that have not yet occurred.
Fair value through
OCI reserve
SGH has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive
income under AASB 9. The net change in the fair value of financial assets measured at fair value through other
comprehensive income (FVTOCI) will be shown in this reserve and not be subsequently reclassified to profit or loss.
Foreign currency
translation reserve
The foreign currency (FX) translation reserve records the foreign currency differences arising from the translation of
the financial statements of foreign operations.
Equity reserve
The equity reserve records the difference arising on the Exchangeable bond embedded option to convert the liability
into equity.
YEAR ENDED 30 JUNE 2024
Acqui-
sitions
reserve
$m
Equity
benefits
reserve
$m
Common
control
reserve
$m
Hedge
reserve
$m
Fair value
through OCI
reserve
$m
FX
translation
reserve
$m
Equity
reserve
$m
Total
$m
As at 1 July 2023
(989.2)
(13.9)
(642.6)
(7.4)
100.8
3.2
22.5
(1,526.6)
Fair value movement on financial
assets measured at FVTOCI
–
–
–
–
(14.5)
–
–
(14.5)
Deferred tax effect of net gain on
financial asset measured at FVTOCI
–
–
–
–
4.4
–
–
4.4
Net loss on cash flow hedges
–
–
–
(9.6)
–
–
–
(9.6)
Tax effect of net loss on cash
flow hedges
–
–
–
3.8
–
–
–
3.8
Movement in reserves of equity
accounted investees
–
–
–
–
(2.9)
(0.7)
–
(3.6)
Acquisition of non-controlling interest
(1,475.5)
–
–
–
–
–
–
(1,475.5)
Non-controlling interest on partial
disposal of controlled entity without
loss of control
24.1
–
–
–
–
–
–
24.1
Recycling of FX translation reserve
–
–
–
–
–
(13.6)
–
(13.6)
Currency translation differences
–
–
–
–
–
0.2
–
0.2
Share based payments from
controlled entity
–
(18.0)
–
–
–
–
–
(18.0)
Share based payments
–
9.3
–
–
–
–
–
9.3
Share based payment options settled
–
(11.7)
–
–
–
–
–
(11.7)
As at 30 June 2024
(2,440.6)
(34.3)
(642.6)
(13.2)
87.8
(10.9)
22.5
(3,031.3)
147
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Sustainability Report
Performance Review
Financial Report
YEAR ENDED 30 JUNE 2023
Acqui-
sitions
reserve
$m
Equity
benefits
reserve
$m
Common
control
reserve
$m
Hedge
reserve
$m
Fair value
through OCI
reserve
$m
FX
translation
reserve
$m
Equity
reserve
$m
Total
$m
As at 1 July 2022
(936.2)
(20.5)
(642.6)
(12.0)
114.2
1.3
–
(1,495.8)
Fair value movement on financial
assets measured at FVTOCI
–
–
–
–
(14.3)
–
–
(14.3)
Deferred tax effect of net gain on
financial asset measured at FVTOCI
–
–
–
–
(5.0)
–
–
(5.0)
Net loss on cash flow hedges
–
–
–
(33.6)
–
–
–
(33.6)
Tax effect of net loss on cash
flow hedges
–
–
–
10.1
–
–
–
10.1
Movement in reserves of equity
accounted investees
–
–
–
–
5.9
1.1
–
7.0
Acquisition of non-controlling interest
(24.9)
–
–
–
–
–
–
(24.9)
Transfer
(28.1)
–
–
28.1
–
–
–
–
Currency translation differences
–
–
–
–
–
0.8
–
0.8
Recognition of exchangeable bond
–
–
–
–
–
–
22.7
22.7
Repurchase of convertible notes
–
–
–
–
–
–
(0.2)
(0.2)
Share based payments
–
10.0
–
–
–
–
–
10.0
Share based payment options settled
–
(3.4)
–
–
–
–
–
(3.4)
As at 30 June 2023
(989.2)
(13.9)
(642.6)
(7.4)
100.8
3.2
22.5
(1,526.6)
25. Dividends
YEAR ENDED 30 JUNE 2024
Date of
payment
Franked/
unfranked
Amount
per share
Total
$m
DIVIDENDS PAID
Ordinary shares
Final dividend in respect of 2023 year
13 Oct 23
Franked
$0.23
83.6
Interim dividend
12 Apr 24
Franked
$0.23
84.0
167.6
Subsequent event
Current period final dividend on ordinary shares proposed
but not provided for
Ordinary shares
Final dividend in respect of 2024 year
2 Sep 24
Franked
$0.30
122.1
Balance of franking account at 30%
450.4
YEAR ENDED 30 JUNE 2023
DIVIDENDS PAID
Ordinary shares
Final dividend in respect of 2022 year
28 Oct 22
Franked
$0.23
83.5
Interim dividend
5 May 23
Franked
$0.23
83.6
167.1
Ordinary shares
Final dividend in respect of 2023 year
13 Oct 23
Franked
$0.23
83.6
Balance of franking account at 30%
299.6
The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The impact on
the dividend franking account of dividends proposed after the balance sheet date but not recognised as a liability is to reduce it by
$52.3 million (2023: $35.8 million).
Capital Structure
SGH Annual Report 2024
148
26. Contingent liabilities
The nature of SGH’s and equity accounted investees’ activities are such that, from time to time, claims are received or made by SGH.
The Directors are of the opinion that no claims are expected to have a material adverse effect on the financial statements of SGH and
as such do not require disclosure as a contingent liability.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Environmental risk and regulation
SGH and the industries in which it operates are subject to a broad range of environmental laws, regulations and standards (including
certain licensing requirements) including air, soil and water quality, waste handling and disposal. This could expose SGH to legal
liabilities or place limitations on the development of its operations. In addition, there is a risk that property utilised by SGH from time
to time may be contaminated by materials harmful to human health (such as hazardous chemicals). In these situations SGH may
be required to undertake remedial works on contaminated sites and may be exposed to third party compensation claims and other
environmental liabilities. Management judgement is therefore required to estimate the impact of such factors on future earnings
supporting existing goodwill and intangible assets.
Performance guarantees
Performance guarantees of $113.2 million (2023: $113.1 million) relate to guarantees provided to customers in support of equipment and
contract performance.
Financial guarantees
SGH has issued a number of financial guarantees to third parties for various operational and financing purposes, totalling $33.4 million
(2023: $36.1 million). To the extent that the Directors expect these third party guarantees to be called upon, a provision has been recorded in
the consolidated statement of financial position as at 30 June 2024.
SGH has entered into a number of financial guarantees in relation to subsidiary debt facilities and other financing arrangements.
Bank guarantees
SGH has granted indemnities to banks to cover bank guarantees given on behalf of controlled entities to a maximum exposure of
$44.6 million (2023: $34.5 million).
Indemnities
The Company has provided a limited indemnity in relation to potential claims on Directors of acquired subsidiaries prior to them becoming
part of SGH. This obligation has been partially insured.
Environmental contingent liabilities
SGH’s activities involve the extraction of resources as well as the processing and subsequent handling of materials that could contaminate
the environment. As a consequence of these activities, SGH has incurred and may continue to incur costs associated with closure,
remediation, aftercare and monitoring. Provisions have been recognised for the sites where obligations are known to exist, and the cost
can be reliably measured. However, additional costs may be incurred due to factors outside SGH’s current knowledge or control, such
as changes in the laws and regulations that govern land use and environmental protection across the various jurisdictions in which SGH
operates.
Boral shareholder class action
Boral continues to defend two shareholder class action proceeds filed against it in the Federal Court of Australia by Maurice Blackburn and
Phi Finney McDonald which are currently being case-managed together. It is not possible to determine the ultimate impact, if any, of the
proceedings on Boral. Boral, in conjunction with its insurer, continues to vigorously defend the proceedings.
Unrecognised Items
149
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Our Businesses
Sustainability Report
Performance Review
Financial Report
27. Commitments
2024
$m
2023
$m
Capital expenditure commitments
Payable:
Not later than one year
160.8
185.4
Later than one year but not later than five years
4.6
4.5
165.4
189.9
Development and exploration expenditure commitments
Payable:
Not later than one year
95.1
101.3
Later than one year but not later than five years
111.8
120.0
206.9
221.3
The above commitments include development and exploration expenditure commitments relating to joint
venture operations in relation to Crux:
Not later than one year
95.1
101.3
Later than one year but not later than five years
93.1
101.3
188.2
202.6
Other commitments
Payable:
Not later than one year
1.1
1.5
1.1
1.5
Development commitments relate to joint operations for Crux. Exploration expenditure commitments relate to exploration permits
WA-377P (cancelled 22 December 2020). Estimates for future development and exploration expenditure commitments are based on joint
venture estimated contracted development costs and estimated exploration costs determined in current dollars translated into Australian
dollars on an undiscounted basis. The exploration obligations may vary significantly as a result of renegotiations with relevant parties,
including regulators in relation to any Good Standing agreement on expired or cancelled permits.
Other commitments includes SGH’s commitment to invest in an unlisted investment fund.
28. Events subsequent to balance date
Other than as outlined below, there has not arisen in the interval between 30 June 2024 and the date of this Report any other event that
would have had a material effect on the Financial Statements as at 30 June 2024.
In July 2024, SGH secured funding under a $600 million Asian Term Loan which matures in July 2030. The $700.0 million Bridge facility was
fully repaid by utilising the proceeds from this Asian Term Loan and surplus cash.
In February 2018, William E Robinson, the former owner of a windows business in the USA which was acquired by Boral in 2017, filed claims
against Boral alleging losses related to that acquisition, and seeking damages of not less than US$450 million as well as punitive damages.
The claim went to trial by jury, where it was dismissed as a matter of law. The matter was appealed to the Dallas Court of Appeals, who
in June 2024 ruled in favour of Boral. In July 2024, William E Robinson petitioned the Texas Supreme Court to allow an appeal of his case
against Boral. Should the Supreme Court allow the petition the matter will be heard by the Texas Supreme Court.
In July 2024, a subsidiary of Boral commenced legal proceedings in the Supreme Court of NSW against Landfill Operations Pty Limited
(a subsidiary of Cleanaway) seeking damages for alleged breaches by that company of the Operating Agreement which governs the
Cleanaway landfill operations at Deer Park in Victoria.
Following the Enterprise gas field coming online in June 2024, early pressure data indicates a smaller resource pool than originally estimated.
This has resulting in a 2P reserves revision of 11.5 MMboe being reflected in Beach Energy’s audited annual reserves statement released
12 August 2024.
On 4 July 2024, SGH via its controlled entity Network Investment Holdings Pty Limited, completed its acquisition of all outstanding ordinary
shares in Boral. As a result, 6,654,321 SGH shares were issued subsequent to year end and cash consideration of $85.9 million was paid in
cash for the Boral shares. On the same date, Boral became part of Seven Group Holdings Limited’s tax-consolidated group. Boral shares
were removed from the official list of the Australian Securities Exchange on 5 July 2024.
Movement in share prices of listed investments
Subsequent to year end, there has been movement in the share prices of listed investments and as a result, the value of SGH’s investments have
varied from what is presented in this financial report. The market value of listed investments at 13 August 2024 compared to their market value at
30 June 2024 is outlined below.
MARKET VALUE
13 August
2024
$m
30 June
2024
$m
Listed investments accounted for using the equity method
962.5
1,128.3
Unrecognised Items
SGH Annual Report 2024
150
29. Parent entity disclosures
As at and throughout the year ended 30 June 2024 the parent company of SGH was Seven Group Holdings Limited. The individual financial
statements for the parent entity show the following aggregate amounts.
COMPANY
2024
$m
2023
$m
Financial position of parent entity at end of the year
Current assets
2,496.9
875.7
Total assets
5,528.1
3,966.6
Current liabilities
80.7
32.3
Total liabilities
92.3
299.7
Total equity of the parent entity comprising of:
Contributed equity
4,762.4
3,375.3
Reserves
29.5
34.8
Retained earnings
643.9
256.8
Total shareholders equity
5,435.8
3,666.9
Result of the parent entity
Profit for the year
554.7
170.3
Total comprehensive income for the year
554.7
170.3
Other information
Contingent liabilities of the parent entity(a)
137.1
139.7
(a) Relates to financial guarantees provided to third parties by the parent entity for subsidiary debt facilities and other financing arrangements. These facilities
are held by entities that are outside of the Deed of Cross Guarantee disclosed in Note 30: Controlled entities.
Parent entity guarantees in respect of debts of its subsidiaries
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts with certain subsidiaries.
Further details of the Deed of Cross Guarantee and the subsidiaries subject to the Deed are disclosed in Note 30: Controlled entities.
In addition to the contingent liabilities shown above, the parent entity guarantees a number of debt facilities held by various controlled entities
who are part of the Deed of Cross Guarantee.
Group Structure
151
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
30. Controlled entities
Notes
Country of
incorporation
OWNERSHIP INTEREST
2024
%
2023
%
PARENT ENTITY
Seven Group Holdings Limited
(a)
Australia
SUBSIDIARIES
All Hire Pty Limited
Australia
100
100
Allen’s Asphalt Pty Ltd
(b)
Australia
95
73
Allight Holdings Pty Limited
(a)
Australia
100
100
AllightPrimax FZCO
(c)
UAE
–
100
Allight Pty Limited
(a)
Australia
100
100
AllightSykes SA (Proprietary) Limited
South Africa
100
100
Allplant Services Pty Limited
Australia
100
100
Alsafe Premix Concrete Pty Ltd
(b)
Australia
95
73
Australian Highway Plant Services Pty Limited
Australia
100
100
Barnu Pty Ltd.
(b)
Australia
95
73
Bayview Pty Limited
(b)
Australia
95
73
Bayview Quarries Pty Limited
(b)
Australia
95
73
Bitumax Pty. Limited
(b)
Australia
95
73
Bitupave Ltd
(b)
Australia
95
73
Boral (UK) Ltd
(b)(d)
UK
–
73
Boral Bricks Pty Ltd
(b)
Australia
95
73
Boral Bricks Western Australia Pty Ltd
(b)
Australia
95
73
Boral Building Materials Pty Limited
(b)
Australia
95
73
Boral Building Products Limited
(b)
Australia
95
73
Boral Cement Limited
(b)
Australia
95
73
Boral Concrete (1992) Limited
(b)
Thailand
95
73
Boral Construction Materials Group Ltd
(b)
Australia
95
73
Boral Construction Materials Ltd
(b)
Australia
95
73
Boral Construction Related Businesses Pty Ltd
(b)
Australia
95
73
Boral Contracting Pty Ltd
(b)
Australia
95
73
Boral Corporate Services Pty Limited
(b)
Australia
95
73
Boral Finance Pty Limited
(b)
Australia
95
73
Boral Holdings Inc.
(b)
USA
95
73
Boral Industries Inc.
(b)(d)
USA
–
73
Boral Insurance Pty Limited
(b)
Australia
95
73
Boral International Pty Limited
(b)
Australia
95
73
Boral Investments BV
(b)
Netherlands
95
73
Boral Investments Pty Limited
(b)
Australia
95
73
Boral IP Holdings (Australia) Pty Limited
(b)
Australia
95
73
Boral Limited
(b)
Australia
95
73
Boral Masonry Ltd
(b)
Australia
95
73
Boral Precast Holdings Pty Ltd
(b)
Australia
95
73
Boral Recycling Pty Limited
(b)
Australia
95
73
Boral Resources (Country) Pty. Limited
(b)
Australia
95
73
Boral Resources (NSW) Pty Ltd
(b)
Australia
95
73
Boral Resources (QLD) Pty. Limited
(b)
Australia
95
73
Boral Resources (SA) Limited
(b)
Australia
95
73
Boral Resources (VIC.) Pty. Limited
(b)
Australia
95
73
Boral Resources (W.A.) Ltd
(b)
Australia
95
73
Boral Shared Business Services Pty Ltd
(b)
Australia
95
73
Boral Timber Fibre Exports Pty Ltd
(e)
Australia
–
73
Boral Transport Limited
(b)
Australia
95
73
Boral USA
(b)
USA
95
73
C7 Pty Limited
(a)
Australia
100
100
Certane Pty Limited
Australia
100
100
Coates Fleet Pty Limited
Australia
100
100
Coates Group Holdings Pty Limited
Australia
100
100
Coates Group Pty Limited
Australia
100
100
Group Structure
SGH Annual Report 2024
152
Notes
Country of
incorporation
OWNERSHIP INTEREST
2024
%
2023
%
Coates Hire (NZ) Limited
New Zealand
100
100
Coates Hire Access SPV Pty Limited
Australia
100
100
Coates Hire Holdco SPV Pty Limited
Australia
100
100
Coates Hire Limited
Australia
100
100
Coates Hire Operations Pty Limited
Australia
100
100
Coates Hire Overseas Investments Pty Limited
Australia
100
100
Coates Hire Traffic Solutions Pty Limited
Australia
100
100
Concrite Pty Ltd
(b)
Australia
95
73
Covol Fuels No.2, LLC
(b)
USA
95
73
Dandenong Quarries Pty. Limited
(b)
Australia
95
73
Davegale Pty Limited
(b)
Australia
95
73
De Martin & Gasparini Contractors Pty Limited
(b)
Australia
95
73
De Martin & Gasparini Pty Limited
(b)
Australia
95
73
De Martin & Gasparini Pumping Pty Limited
(b)
Australia
95
73
De Martin & Gasparini Queensland Pty Limited
(b (b)
Australia
95
73
Direct Target Access Pty Limited
(a)
Australia
95
100
Dunmore Sand & Soil Pty. Limited
(b)
Australia
95
73
DWB (NH) Pty Limited
Australia
100
100
FGW Pacific Pty Limited
Australia
100
100
Flexi Industrial Services Pty Limited
Australia
100
100
Found Concrete Pty Ltd
(b)
Australia
95
73
Headwaters Energy Services Corp.
(b)
USA
95
73
Hebburn Pty Limited
Australia
100
100
Industrial Investment Holdings Pty Limited
Australia
100
100
Kimlin Holdings Pty Limited
Australia
100
100
Manooka Holdings Pty Limited
(a)
Australia
100
100
Miltonstar Pty Limited
(a)
Australia
100
100
Nahi Pty Limited
Australia
100
100
National Hire Equipment Pty Limited
Australia
100
100
National Hire Facilitation Pty Limited
(a)
Australia
100
100
National Hire Finance Pty Limited
Australia
100
100
National Hire Group Limited
(a)
Australia
100
100
National Hire Operations Pty Limited
Australia
100
100
National Hire Properties Pty Limited
Australia
100
100
National Hire Trading Pty Limited
Australia
100
100
Ned Finco Pty Limited
Australia
100
100
Network Investment Holdings Pty Limited
(a)
Australia
100
100
Point Pty Limited
(a)
Australia
100
100
Primax USA Inc
(c)
USA
–
100
PT AllightSykes
Indonesia
100
100
PT Coates Hire Indonesia
(f)
Indonesia
–
100
PT Coates Services Indonesia
(f)
Indonesia
–
100
Pump Rentals Pty Limited
(a)
Australia
100
100
Q-Crete Premix Pty Ltd
(b)
Australia
95
73
Realtime Reporters Pty Limited
Australia
100
100
Road Surfaces Group Pty. Ltd.
(b)
Australia
95
73
Seven (National) Pty Limited
(a)
Australia
100
100
Seven (WAN) Pty Limited
Australia
100
100
Seven Broadcast Properties Trust
–
100
100
Seven Custodians Pty Limited
(a)
Australia
100
100
Seven Entertainment Pty Limited
Australia
100
100
Seven Media Group Pty Limited
(a)
Australia
100
100
Seven Network (United States) Inc
USA
100
100
Seven Network International Limited
(a)
Australia
100
100
Seven Network Investments Pty Limited
(a)
Australia
100
100
Seven Network Limited
(a)
Australia
100
100
Seven Network Nominees Pty Limited
(a)
Australia
100
100
30. Controlled entities (continued)
153
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Our Businesses
Sustainability Report
Performance Review
Financial Report
Notes
Country of
incorporation
OWNERSHIP INTEREST
2024
%
2023
%
Seven Resources Pty Limited
(a)
Australia
100
100
SGH Communications Pty Limited
Australia
100
100
SGH Energy (No 1) Pty Limited
Australia
100
100
SGH Energy (No 2) Pty Limited
Australia
100
100
SGH Energy Aust. Pty Limited
Australia
100
100
SGH Energy NTP66 Pty Ltd
Australia
100
100
SGH Energy Pty Ltd
Australia
100
100
SGH Energy VICP54 Pty Ltd
Australia
100
100
SGH Energy VICP56 Pty Ltd
Australia
100
100
SGH Energy WA Pty Ltd
Australia
100
100
SGH Energy WA377P Pty Ltd
Australia
100
100
SGH Productions Pty Limited
(a)
Australia
100
100
Sitech (WA) Pty Limited
Australia
51
51
Sitech Solutions Pty Limited
Australia
51
51
SmartTech USA, Inc
(g)
USA
51
–
SMG Executives Pty Limited
Australia
100
100
SMG FINCO Pty Limited
(a)
Australia
100
100
SNZ Pty Limited
(a)
Australia
100
100
Specialised Investments Pty Limited
Australia
100
100
Sykes Fleet Services Pty Limited
(c)
Australia
–
100
Sykes Group Pty Limited
(c)
Australia
–
100
Sykes New Zealand Limited
(c)
New Zealand
–
100
Tallglen Pty Limited
(a)
Australia
100
100
The DWB Trust
–
100
100
Tile Service Company LLC
(b)(h)
USA
–
73
Tru Blu Hire Australia Pty Limited
Australia
100
100
WA Regional Asset Holdings Pty Limited
Australia
100
100
Warrah Engineering Pty Limited
Australia
100
100
WesTrac Holdings Pty Limited
(a)
Australia
100
100
WesTrac Pty Limited
Australia
100
100
(a) Pursuant to ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 these controlled entities are relieved from the Corporations Act 2001
requirements for the preparation, audit and lodgement of financial reports.
(b) This company was acquired as part of the Boral acquisition. SGH holds a 95.1 per cent interest in Boral, including acceptances to 30 June 2024,
with the remaining 4.9 per cent acquired on 4 July 2024. SGH’s ownership interest at 30 June 2023 was 72.6 per cent.
(c) This company was divested in December 2023. Refer to Note 31: Disposal of businesses for further detail.
(d) This company was deregistered in June 2024.
(e) This company was deregistered in February 2024.
(f) This company was divested in April 2024. Refer to Note 31: Disposal of businesses for further detail.
(g) This company was incorporated in October 2023.
(h) This company was deregistered in November 2023.
Group Structure
SGH Annual Report 2024
154
30. Controlled entities (continued)
Deed of Cross Guarantee
Pursuant to ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 (Instrument) the wholly-owned controlled entities marked
(a) in the preceding table are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports
and Directors’ reports.
It is a condition of the Instrument that the Company and each of the wholly-owned controlled entities (marked (a)) enter into a Deed of Cross
Guarantee. The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up
of any of the parties to the Deed under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the
Corporations Act 2001, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries
have also given similar guarantees in the event that the Company is wound up.
A combined statement of comprehensive income and combined statement of financial position, comprising the Company and controlled
entities which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, are set out below.
COMBINED
2024
$m
2023
$m
STATEMENT OF COMPREHENSIVE INCOME
Revenue
100.4
131.4
Other income
656.0
314.7
Share of results from equity accounted investees
(125.0)
177.9
Impairment of equity accounted investees
(135.3)
(75.9)
Expenses excluding depreciation and amortisation
(120.7)
(156.2)
Depreciation and amortisation
(2.7)
(0.6)
Profit before net finance expense and tax
372.7
391.3
Net finance expenses
(142.1)
(113.0)
Profit before tax
230.6
278.3
Income tax benefit
99.6
33.8
Profit for the year
330.2
312.1
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss:
Net change in financial assets measured at fair value through other comprehensive income
(2.8)
8.3
Income tax on items of other comprehensive income
(8.0)
(11.1)
Total items that will not be reclassified subsequently to profit or loss
(10.8)
(2.8)
Items that may be reclassified subsequently to profit or loss:
Foreign currency differences for foreign operations
(0.7)
1.1
Total items that may be reclassified subsequently to profit or loss
(0.7)
1.1
Total comprehensive income for the year
318.7
310.4
MOVEMENT IN RETAINED EARNINGS
Retained profits at beginning of the year
1,143.0
998.0
Profit for the year
330.2
312.1
Dividends paid during the year
(167.6)
(167.1)
Retained earnings at end of the year
1,305.6
1,143.0
155
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Our Businesses
Sustainability Report
Performance Review
Financial Report
COMBINED
2024
$m
2023
$m
STATEMENT OF FINANCIAL POSITION
Current assets
Cash and cash equivalents
93.8
6.6
Trade and other receivables
7.3
89.3
Inventories
–
39.6
Other current assets
6.1
0.6
Derivative financial instruments
0.9
–
Total current assets
108.1
136.1
Non-current assets
Investments in controlled entities
6,626.9
4,654.2
Investments accounted for using the equity method
1,186.4
1,477.7
Right of use assets
6.8
4.9
Property, plant and equipment
0.8
1.7
Intangible assets
0.6
0.6
Total non-current assets
7,821.5
6,139.1
Total assets
7,929.6
6,275.2
Current liabilities
Trade and other payables
394.1
54.7
Lease liabilities
1.4
1.5
Interest bearing loans and liabilities
700.1
365.5
Loans from related parties
484.9
571.5
Current tax liabilities
73.3
24.6
Provisions
66.6
4.9
Total current liabilities
1,720.4
1,022.7
Non-current liabilities
Other payables
7.9
2.0
Interest bearing loans and liabilities
1,251.7
1,819.6
Deferred tax liabilities
47.4
74.0
Lease liabilities
5.5
3.5
Provisions
8.1
0.6
Total non-current liabilities
1,320.6
1,899.7
Total liabilities
3,041.0
2,922.4
Net assets
4,888.6
3,352.8
Equity
Issued capital
4,762.4
3,375.3
Reserves
(1,179.4)
(1,165.5)
Retained earnings
1,305.6
1,143.0
Total equity
4,888.6
3,352.8
Group Structure
SGH Annual Report 2024
156
31. Disposal of businesses
Disposal of controlled entities
Coates Indonesia
On 2 April 2024, the sale of the following controlled entities to Mitsubishi Corporation (Mitsubishi) was completed.
PT Coates Hire Indonesia
PT Coates Services Indonesia
The total consideration for the sale was $64.4 million, resulting in a net gain on sale of $43.7 million being recognised in the consolidated
statement of profit or loss and other comprehensive income and net cash receipts of $62.8 million recognised in the consolidated cash flow
statement. Included within the gain is $11.6 million for amounts reclassified from foreign currency translation reserve, offset by transaction
costs of $5.9 million. The results from the disposed operations are immaterial to SGH and are included within the Coates segment.
Sykes
On 5 December 2023, the sale of the following controlled entities to Atlas Copco Sickla Holding AB (Atlas) was completed.
AllightPrimax FZCO
Sykes New Zealand Limited
Primax USA Inc
Sykes Fleet Services Pty Limited
Sykes Group Pty Limited
The total consideration for the sale was $100.8 million, resulting in a net gain on sale of $32.6 million being recognised in the consolidated
statement of profit or loss and other comprehensive income and net cash receipts of $89.6 million recognised in the consolidated cash flow
statement. Included within the gain is $2.2 million for amounts reclassified from foreign currency translation reserve, offset by transaction costs
of $4.2 million. The results from the disposed operations are immaterial to SGH and are included within the Other Investments segment.
Disposal of one per cent interest in Boral
On 30 August 2023, a wholly-owned subsidiary completed the sale of 11.1 million Boral Limited shares at an average price of $4.90 per
share. This reduced SGH’s ownership interest in Boral by one per cent to 71.6 per cent. However, subsequent to this transaction, SGH has
acquired the remaining shares in Boral. There is no recognition of gains or losses in SGH’s earnings as a result of the disposal transaction as
the reduction in ownership was reflected as an increase in the non-controlling interest. The net proceeds on disposal of $54.3 million were
received in cash. The difference between the disposal proceeds and the amount transferred to non-controlling interests has been recognised
directly in equity.
Discontinued operations
During the prior year, SGH received settlements and deferred consideration in relation to Boral’s previously divested businesses. In the
current year, $2.8 million was received in relation to these businesses.
2024
$m
2023
$m
Loss for the year from discontinued operations
Net loss on sale of discontinued operations
–
(10.9)
Loss before depreciation, amortisation, net finance expense and income tax
–
(10.9)
Depreciation and amortisation
–
–
Loss before net finance expense and income tax
–
(10.9)
Net finance expense
–
–
Loss before income tax
–
(10.9)
Income tax benefit
–
1.0
Loss for the year from discontinued operations
–
(9.9)
Loss for the year from discontinued operations attributable to:
Equity holders of the Company
–
(7.2)
Non-controlling interest
–
(2.7)
Loss for the year from discontinued operations
–
(9.9)
Cash flows from discontinued operations
Net operating cash flows
2.8
–
Net investing cash flows
–
14.5
Net financing cash flows
–
–
Net cash flows from discontinued operations
2.8
14.5
157
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
32. Related party disclosures
Key Management Personnel compensation
Detailed remuneration disclosures, including movements in equity holdings for Key Management Personnel, are disclosed in the
Remuneration Report section of the Director’s Report.
The aggregate compensation made to SGH’s Key Management Personnel is set out below:
2024
$000
2023
$000
Short-term employee benefits
14,285
14,025
Post-employment benefits
309
308
Termination benefits
–
1,928
Other long-term employee benefits
426
289
Share-based payments (equity-settled and cash-settled)
17,066
11,166
Total key management personnel compensation
32,086
27,716
No Director has entered into a material contract with SGH in the current or prior year other than those disclosed in the Remuneration Report
or this note.
Director related party transactions
Details of related party transactions with director related entities are outlined on page 90.
Other transactions with related parties
A number of Directors and KMP of the Company hold directorships in other entities. Several of these entities transacted with SGH on terms
and conditions no more favourable than those available on an arm’s length basis. Consulting fees of $0.5 million (2023: $0.5 million) were
paid to a related party, Mr KM Stokes AC, for strategic consulting advice.
Subsidiaries
Interests in subsidiaries are set out in Note 30: Controlled entities.
Other related party transactions
The aggregate value of transactions between SGH and its equity accounted investees is outlined below.
2024
$m
2023
$m
Revenue - Associates
42.6
55.5
Other income - Associates
0.1
–
Other expenses - Associates
(139.2)
(166.7)
Outstanding balances arising from transactions with equity accounted investees:
Trade and other receivables - Associates
15.4
19.0
Trade and other payables - Associates
(1.7)
(7.2)
Contingent liabilities at year end, arising from transactions with equity accounted investees:
Financial guarantees (refer to Note 26: Contingent liabilities)
–
–
Other
SGH Annual Report 2024
158
33. Auditor’s remuneration
The Company’s external auditor is Deloitte Touche Tohmatsu (Deloitte). The external auditor is only appointed to assignments additional to
their statutory audit duties where they are able to maintain their audit independence. All amounts payable to the auditors of the Company
were paid by SGH subsidiaries.
Amounts received or due and receivable by auditors of the Company are set out below.
2024
$000
2023
$000
Deloitte and related network firms
Audit or review of financial reports
1,794
1,766
Other assurance and agreed-upon procedures under other legislation or contractual arrangements
71
101
Other services:
Taxation services(a)
481
163
Other taxation services
–
24
Other advisory services(b)
162
–
Total auditor’s remuneration
2,508
2,054
(a) Taxation services relate to compliance, advice provided to Boral in relation to the takeover by Network Investment Holdings Pty Limited and advice and
compliance provided in respect of discontinued operations.
(b) Other advisory services relates to services provided in relation to verification of the proforma financial statements contained in the Boral Bidder Statement.
Other
Consolidated entity disclosure statement
Entity
Entity type
BODY CORPORATES
TAX RESIDENCY
Place formed or
incorporated
% held
Australian
or foreign
Foreign
jurisdiction
PARENT ENTITY
Seven Group Holdings Limited
Body corporate
Australia
100
Australia
–
SUBSIDIARIES
All Hire Pty Limited
Body corporate
Australia
100
Australia
–
Allen’s Asphalt Pty Ltd
Body corporate
Australia
95
Australia
–
Allight Holdings Pty Limited
Body corporate
Australia
100
Australia
–
Allight Pty Limited
Body corporate
Australia
100
Australia
–
AllightSykes SA (Proprietary) Limited
Body corporate
South Africa
100
Foreign
South Africa
Allplant Services Pty Limited
Body corporate
Australia
100
Australia
–
Alsafe Premix Concrete Pty Ltd
Body corporate
Australia
95
Australia
–
Australian Highway Plant Services Pty Limited
Body corporate
Australia
100
Australia
–
Barnu Pty Ltd.
Body corporate
Australia
95
Australia
–
Bayview Pty Limited
Body corporate
Australia
95
Australia
–
Bayview Quarries Pty Limited
Body corporate
Australia
95
Australia
–
Bitumax Pty. Limited
Body corporate
Australia
95
Australia
–
Bitupave Ltd
Body corporate
Australia
95
Australia
–
Boral Bricks Pty Ltd
Body corporate
Australia
95
Australia
–
Boral Bricks Western Australia Pty Ltd
Body corporate
Australia
95
Australia
–
Boral Building Materials Pty Limited
Body corporate
Australia
95
Australia
–
Boral Building Products Limited
Body corporate
Australia
95
Australia
–
Boral Cement Limited
Body corporate
Australia
95
Australia
–
Boral Concrete (1992) Limited
Body corporate
Thailand
95
Foreign
Thailand
Boral Construction Materials Group Ltd
Body corporate
Australia
95
Australia
–
Boral Construction Materials Ltd
Body corporate
Australia
95
Australia
–
Boral Construction Related Businesses Pty Ltd
Body corporate
Australia
95
Australia
–
Boral Contracting Pty Ltd
Body corporate
Australia
95
Australia
–
Boral Corporate Services Pty Limited(a)
Body corporate
Australia
95
Australia
–
Boral Finance Pty Limited
Body corporate
Australia
95
Australia
–
Boral Holdings Inc.
Body corporate
USA
95
Foreign
USA
Boral Insurance Pty Limited
Body corporate
Australia
95
Australia
–
Boral International Pty Limited
Body corporate
Australia
95
Australia
–
159
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
Entity
Entity type
BODY CORPORATES
TAX RESIDENCY
Place formed or
incorporated
% held
Australian
or foreign
Foreign
jurisdiction
Boral Investments BV
Body corporate
Netherlands
95
Foreign
Netherlands
Boral Investments Pty Limited
Body corporate
Australia
95
Australia
–
Boral IP Holdings (Australia) Pty Limited
Body corporate
Australia
95
Australia
–
Boral Limited
Body corporate
Australia
95
Australia
–
Boral Masonry Ltd
Body corporate
Australia
95
Australia
–
Boral Precast Holdings Pty Ltd
Body corporate
Australia
95
Australia
–
Boral Recycling Pty Limited
Body corporate
Australia
95
Australia
–
Boral Resources (Country) Pty. Limited
Body corporate
Australia
95
Australia
–
Boral Resources (NSW) Pty Ltd
Body corporate
Australia
95
Australia
–
Boral Resources (QLD) Pty. Limited(b)
Body corporate
Australia
95
Australia
–
Boral Resources (SA) Limited
Body corporate
Australia
95
Australia
–
Boral Resources (VIC.) Pty. Limited(c)
Body corporate
Australia
95
Australia
–
Boral Resources (W.A.) Ltd
Body corporate
Australia
95
Australia
–
Boral Shared Business Services Pty Ltd
Body corporate
Australia
95
Australia
–
Boral Transport Limited
Body corporate
Australia
95
Australia
–
Boral USA(d)
Partnership
–
–
Foreign
USA
C7 Pty Limited
Body corporate
Australia
100
Australia
–
Certane Pty Limited(e)
Body corporate
Australia
100
Australia
–
Coates Fleet Pty Limited
Body corporate
Australia
100
Australia
–
Coates Group Holdings Pty Limited
Body corporate
Australia
100
Australia
–
Coates Group Pty Limited
Body corporate
Australia
100
Australia
–
Coates Hire (NZ) Limited
Body corporate
New Zealand
100
Foreign
New Zealand
Coates Hire Access SPV Pty Limited
Body corporate
Australia
100
Australia
–
Coates Hire Holdco SPV Pty Limited
Body corporate
Australia
100
Australia
–
Coates Hire Limited
Body corporate
Australia
100
Australia
–
Coates Hire Operations Pty Limited
Body corporate
Australia
100
Australia
–
Coates Hire Overseas Investments Pty Limited
Body corporate
Australia
100
Australia
–
Coates Hire Traffic Solutions Pty Limited
Body corporate
Australia
100
Australia
–
Concrite Pty Ltd
Body corporate
Australia
95
Australia
–
Covol Fuels No.2, LLC
Body corporate
USA
95
Foreign
USA
Dandenong Quarries Pty. Limited
Body corporate
Australia
95
Australia
–
Davegale Pty Limited
Body corporate
Australia
95
Australia
–
De Martin & Gasparini Contractors Pty Limited
Body corporate
Australia
95
Australia
–
De Martin & Gasparini Pty Limited
Body corporate
Australia
95
Australia
–
De Martin & Gasparini Pumping Pty Limited
Body corporate
Australia
95
Australia
–
De Martin & Gasparini Queensland Pty Limited
Body corporate
Australia
95
Australia
–
Direct Target Access Pty Limited
Body corporate
Australia
95
Australia
–
Dunmore Sand & Soil Pty. Limited
Body corporate
Australia
95
Australia
–
DWB (NH) Pty Limited
Body corporate
Australia
100
Australia
–
FGW Pacific Pty Limited
Body corporate
Australia
100
Australia
–
Flexi Industrial Services Pty Limited
Body corporate
Australia
100
Australia
–
Found Concrete Pty Ltd
Body corporate
Australia
95
Australia
–
Headwaters Energy Services Corp.
Body corporate
USA
95
Foreign
USA
Hebburn Pty Limited
Body corporate
Australia
100
Australia
–
Industrial Investment Holdings Pty Limited
Body corporate
Australia
100
Australia
–
Kimlin Holdings Pty Limited
Body corporate
Australia
100
Australia
–
Manooka Holdings Pty Limited
Body corporate
Australia
100
Australia
–
Miltonstar Pty Limited
Body corporate
Australia
100
Australia
–
Nahi Pty Limited
Body corporate
Australia
100
Australia
–
National Hire Equipment Pty Limited
Body corporate
Australia
100
Australia
–
National Hire Facilitation Pty Limited
Body corporate
Australia
100
Australia
–
National Hire Finance Pty Limited
Body corporate
Australia
100
Australia
–
National Hire Group Limited
Body corporate
Australia
100
Australia
–
National Hire Operations Pty Limited
Body corporate
Australia
100
Australia
–
National Hire Properties Pty Limited
Body corporate
Australia
100
Australia
–
National Hire Trading Pty Limited
Body corporate
Australia
100
Australia
–
Ned Finco Pty Limited
Body corporate
Australia
100
Australia
–
Network Investment Holdings Pty Limited
Body corporate
Australia
100
Australia
–
SGH Annual Report 2024
160
Entity
Entity type
BODY CORPORATES
TAX RESIDENCY
Place formed or
incorporated
% held
Australian
or foreign
Foreign
jurisdiction
Point Pty Limited
Body corporate
Australia
100
Australia
–
PT AllightSykes
Body corporate
Indonesia
100
Foreign
Indonesia
Pump Rentals Pty Limited
Body corporate
Australia
100
Australia
–
Q-Crete Premix Pty Ltd
Body corporate
Australia
95
Australia
–
Realtime Reporters Pty Limited
Body corporate
Australia
100
Australia
–
Road Surfaces Group Pty. Ltd.
Body corporate
Australia
95
Australia
–
Seven (National) Pty Limited
Body corporate
Australia
100
Australia
–
Seven (WAN) Pty Limited
Body corporate
Australia
100
Australia
–
Seven Broadcast Properties Trust
Trust
–
–
Australia
–
Seven Custodians Pty Limited
Body corporate
Australia
100
Australia
–
Seven Entertainment Pty Limited
Body corporate
Australia
100
Australia
–
Seven Media Group Pty Limited
Body corporate
Australia
100
Australia
–
Seven Network (United States) Inc
Body corporate
USA
100
Foreign
USA
Seven Network International Limited
Body corporate
Australia
100
Australia
–
Seven Network Investments Pty Limited
Body corporate
Australia
100
Australia
–
Seven Network Limited
Body corporate
Australia
100
Australia
–
Seven Network Nominees Pty Limited
Body corporate
Australia
100
Australia
–
Seven Resources Pty Limited
Body corporate
Australia
100
Australia
–
SGH Communications Pty Limited
Body corporate
Australia
100
Australia
–
SGH Energy (No 1) Pty Limited
Body corporate
Australia
100
Australia
–
SGH Energy (No 2) Pty Limited
Body corporate
Australia
100
Australia
–
SGH Energy Aust. Pty Limited
Body corporate
Australia
100
Australia
–
SGH Energy NTP66 Pty Ltd
Body corporate
Australia
100
Australia
–
SGH Energy Pty Ltd
Body corporate
Australia
100
Australia
–
SGH Energy VICP54 Pty Ltd
Body corporate
Australia
100
Australia
–
SGH Energy VICP56 Pty Ltd
Body corporate
Australia
100
Australia
–
SGH Energy WA Pty Ltd
Body corporate
Australia
100
Australia
–
SGH Energy WA377P Pty Ltd
Body corporate
Australia
100
Australia
–
SGH Productions Pty Limited
Body corporate
Australia
100
Australia
–
Sitech (WA) Pty Limited
Body corporate
Australia
51
Australia
–
Sitech Solutions Pty Limited
Body corporate
Australia
51
Australia
–
SmartTech USA, Inc
Body corporate
USA
51
Foreign
USA
SMG Executives Pty Limited
Body corporate
Australia
100
Australia
–
SMG FINCO Pty Limited
Body corporate
Australia
100
Australia
–
SNZ Pty Limited
Body corporate
Australia
100
Australia
–
Specialised Investments Pty Limited
Body corporate
Australia
100
Australia
–
Tallglen Pty Limited
Body corporate
Australia
100
Australia
–
The DWB Trust
Trust
–
100
Australia
–
Tru Blu Hire Australia Pty Limited
Body corporate
Australia
100
Australia
–
WA Regional Asset Holdings Pty Limited
Body corporate
Australia
100
Australia
–
Warrah Engineering Pty Limited
Body corporate
Australia
100
Australia
–
WesTrac Holdings Pty Limited
Body corporate
Australia
100
Australia
–
WesTrac Pty Limited
Body corporate
Australia
100
Australia
–
(a) Boral Corporate Services Pty Ltd is the Trustee for Board Executive Share Plan and the Boral Employee Share Scheme trusts.
(b) Boral Resources (QLD) Pty Ltd is a participant in the Lytton joint venture which is proportionately consolidated.
(c) Boral Resources (VIC) Pty Ltd is a participant in the Heatherton and Delta joint ventures which are proportionately consolidated.
(d) Boral USA is a partnership between Boral International Pty Ltd (99 per cent) and Boral Limited (one per cent).
(e) Certane Pty Limited is the trustee for the Seven Group Equity Incentive Trust.
161
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
1. In the opinion of the Directors of Seven Group Holdings Limited (the Company):
(a) the consolidated financial statements and notes that are set out on pages 97 to 159 are in accordance with the
Corporations Act 2001, including:
(ii) giving a true and fair view of SGH’s financial position as at 30 June 2024 and of its performance for the financial year ended on that
date; and
(iii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2. As at the date of this declaration, there are reasonable grounds to believe that the Company and the group entities identified in Note 30
will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee
between the Company and those group entities pursuant to the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
3. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing Director &
Chief Executive Officer and the Chief Financial Officer for the financial year ended 30 June 2024.
4. In the opinion of the Directors, the attached Consolidated Entity Disclosure Statement is true and correct.
5. The Directors draw attention to Note 1 to the consolidated financial statements, which includes a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
SIGNATURE
Terry James Davis
Chairman
Sydney
14 August 2024
SIGNATURE
Sally Annabelle Chaplain AM
Chair of the Audit & Risk Committee
Directors’ Declaration
For the year ended 30 June 2024
SGH Annual Report 2024
162
>ŝĂďŝůŝƚLJůŝŵŝƚĞĚďLJĂƐĐŚĞŵĞĂƉƉƌŽǀĞĚƵŶĚĞƌWƌŽĨĞƐƐŝŽŶĂů^ƚĂŶĚĂƌĚƐ>ĞŐŝƐůĂƚŝŽŶ͘
DĞŵďĞƌŽĨĞůŽŝƚƚĞƐŝĂWĂĐŝĨŝĐ>ŝŵŝƚĞĚĂŶĚƚŚĞĞůŽŝƚƚĞŽƌŐĂŶŝƐĂƚŝŽŶ͘
ĞůŽŝƚƚĞdŽƵĐŚĞdŽŚŵĂƚƐƵ
EϳϰϰϵϬϭϮϭϬϲϬ
YƵĂLJYƵĂƌƚĞƌdŽǁĞƌ
ϱϬƌŝĚŐĞ^ƚƌĞĞƚ
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ǁǁǁ͘ĚĞůŽŝƚƚĞ͘ĐŽŵ͘ĂƵ
Independent Auditor’s Report to the
DĞŵďĞƌƐŽĨ^ĞǀĞŶ'ƌŽƵƉ,ŽůĚŝŶŐƐ>ŝŵŝƚĞĚ
ZĞƉŽƌƚŽŶƚŚĞƵĚŝƚŽĨƚŚĞ&ŝŶĂŶĐŝĂůZĞƉŽƌƚ
KƉŝŶŝŽŶ
We have audited the financial report of Seven Group Holdings Limited (the “Company”) and its ƐƵďƐŝĚŝĂƌŝĞƐ;ƚŚĞ
“Group”) which comprises the consolidated statement of financial position as at 30 June 202ϰ͕ƚŚĞĐŽŶƐŽůŝĚĂƚĞĚ
ƐƚĂƚĞŵĞŶƚŽĨƉƌŽĨŝƚŽƌůŽƐƐĂŶĚŽƚŚĞƌĐŽŵƉƌĞŚĞŶƐŝǀĞŝŶĐŽŵĞ͕ƚŚĞĐŽŶƐŽůŝĚĂƚĞĚƐƚĂƚĞŵĞŶƚŽĨĐŚĂŶŐĞƐŝŶĞƋƵŝƚLJ
ĂŶĚ ƚŚĞ ĐŽŶƐŽůŝĚĂƚĞĚ ĐĂƐŚ ĨůŽǁ ƐƚĂƚĞŵĞŶƚ ĨŽƌ ƚŚĞ LJĞĂƌ ƚŚĞŶ ĞŶĚĞĚ͕ ĂŶĚ ŶŽƚĞƐ ƚŽ ƚŚĞ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ͕
ŝŶĐůƵĚŝŶŐŵĂƚĞƌŝĂůĂĐĐŽƵŶƚŝŶŐƉŽůŝĐLJŝŶĨŽƌŵĂƚŝŽŶĂŶĚŽƚŚĞƌĞdžƉůĂŶĂƚŽƌLJŝŶĨŽƌŵĂƚŝŽŶ͕the directors’ declaration
ĂŶĚƚŚĞŽŶƐŽůŝĚĂƚĞĚ ŶƚŝƚLJŝƐĐůŽƐƵƌĞ^ƚĂƚĞŵĞŶƚ͘
/ŶŽƵƌŽƉŝŶŝŽŶ͕ƚŚĞĂĐĐŽŵƉĂŶLJŝŶŐĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŽĨƚŚĞ'ƌŽƵƉŝƐŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞŽƌƉŽƌĂƚŝŽŶƐĐƚϮϬϬϭ͕
ŝŶĐůƵĚŝŶŐ͗
•
Giving a true and fair view of the Group’s financial position as at 30 June 202ϰĂŶĚŽĨŝƚƐĨŝŶĂŶĐŝĂů
ƉĞƌĨŽƌŵĂŶĐĞĨŽƌƚŚĞLJĞĂƌƚŚĞŶĞŶĚĞĚ͖ĂŶĚ
•
ŽŵƉůLJŝŶŐǁŝƚŚƵƐƚƌĂůŝĂŶĐĐŽƵŶƚŝŶŐ^ƚĂŶĚĂƌĚƐĂŶĚƚŚĞŽƌƉŽƌĂƚŝŽŶƐZĞŐƵůĂƚŝŽŶƐϮϬϬϭ͘
ĂƐŝƐĨŽƌKƉŝŶŝŽŶ
tĞ ĐŽŶĚƵĐƚĞĚ ŽƵƌ ĂƵĚŝƚ ŝŶ ĂĐĐŽƌĚĂŶĐĞ ǁŝƚŚ ƵƐƚƌĂůŝĂŶ ƵĚŝƚŝŶŐ ^ƚĂŶĚĂƌĚƐ͘ KƵƌ ƌĞƐƉŽŶƐŝďŝůŝƚŝĞƐ ƵŶĚĞƌ ƚŚŽƐĞ
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
ŽƵƌƌĞƉŽƌƚ͘tĞĂƌĞŝŶĚĞƉĞŶĚĞŶƚŽĨƚŚĞ'ƌŽƵƉŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞĂƵĚŝƚŽƌŝŶĚĞƉĞŶĚĞŶĐĞƌĞƋƵŝƌĞŵĞŶƚƐŽĨƚŚĞ
ŽƌƉŽƌĂƚŝŽŶƐĐƚϮϬϬϭand the ethical requirements of the Accounting Professional & Ethical Standards Board’s
W ^ϭϭϬŽĚĞŽĨ ƚŚŝĐƐĨŽƌWƌŽĨĞƐƐŝŽŶĂůĐĐŽƵŶƚĂŶƚƐ;ŝŶĐůƵĚŝŶŐ/ŶĚĞƉĞŶĚĞŶĐĞ^ƚĂŶĚĂƌĚƐͿ(the “Code”) that are
ƌĞůĞǀĂŶƚƚŽŽƵƌĂƵĚŝƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŝŶƵƐƚƌĂůŝĂ͘tĞŚĂǀĞĂůƐŽĨƵůĨŝůůĞĚŽƵƌŽƚŚĞƌĞƚŚŝĐĂůƌĞƐƉŽŶƐŝďŝůŝƚŝĞƐŝŶ
ĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞŽĚĞ͘
tĞĐŽŶĨŝƌŵƚŚĂƚƚŚĞŝŶĚĞƉĞŶĚĞŶĐĞĚĞĐůĂƌĂƚŝŽŶƌĞƋƵŝƌĞĚďLJƚŚĞŽƌƉŽƌĂƚŝŽŶƐĐƚϮϬϬϭ͕ǁŚŝĐŚŚĂƐďĞĞŶŐŝǀĞŶƚŽ
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
ƌĞƉŽƌƚ͘
tĞďĞůŝĞǀĞƚŚĂƚƚŚĞĂƵĚŝƚĞǀŝĚĞŶĐĞǁĞŚĂǀĞŽďƚĂŝŶĞĚŝƐƐƵĨĨŝĐŝĞŶƚĂŶĚĂƉƉƌŽƉƌŝĂƚĞƚŽ ƉƌŽǀŝĚĞĂďĂƐŝƐĨŽƌŽƵƌ
ŽƉŝŶŝŽŶ͘
<ĞLJƵĚŝƚDĂƚƚĞƌƐ
<ĞLJĂƵĚŝƚŵĂƚƚĞƌƐĂƌĞƚŚŽƐĞŵĂƚƚĞƌƐƚŚĂƚ͕ŝŶŽƵƌƉƌŽĨĞƐƐŝŽŶĂůũƵĚŐĞŵĞŶƚ͕ǁĞƌĞŽĨŵŽƐƚƐŝŐŶŝĨŝĐĂŶĐĞŝŶŽƵƌĂƵĚŝƚ
ŽĨƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚĨŽƌƚŚĞĐƵƌƌĞŶƚƉĞƌŝŽĚ͘dŚĞƐĞŵĂƚƚĞƌƐǁĞƌĞĂĚĚƌĞƐƐĞĚŝŶƚŚĞĐŽŶƚĞdžƚŽĨŽƵƌĂƵĚŝƚŽĨƚŚĞ
ĨŝŶĂŶĐŝĂůƌĞƉŽƌƚĂƐĂǁŚŽůĞ͕ĂŶĚŝŶĨŽƌŵŝŶŐŽƵƌŽƉŝŶŝŽŶƚŚĞƌĞŽŶ͕ĂŶĚǁĞĚŽŶŽƚƉƌŽǀŝĚĞĂƐĞƉĂƌĂƚĞŽƉŝŶŝŽŶŽŶ
ƚŚĞƐĞŵĂƚƚĞƌƐ͘
Independent Auditor’s Report
163
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
<ĞLJĂƵĚŝƚŵĂƚƚĞƌ
,ŽǁƚŚĞƐĐŽƉĞŽĨŽƵƌĂƵĚŝƚƌĞƐƉŽŶĚĞĚƚŽƚŚĞŬĞLJ
ĂƵĚŝƚŵĂƚƚĞƌ
ZĞĐŽǀĞƌĂďŝůŝƚLJŽĨƉƌŽĚƵĐŝŶŐĂŶĚĚĞǀĞůŽƉŵĞŶƚĂƐƐĞƚƐ
ƐĚŝƐĐůŽƐĞĚŝŶEŽƚĞϭϰ͕ƚŚĞ'ƌŽƵƉŚĂƐƉƌŽĚƵĐŝŶŐ
ĂŶĚĚĞǀĞůŽƉŵĞŶƚĂƐƐĞƚƐŽĨΨϲϮϳ͘ϳŵŝůůŝŽŶ͕
ĐŽŵƉƌŝƐŝŶŐƚŚĞĐĂƌƌLJŝŶŐĂŵŽƵŶƚŽĨƚŚĞ>ŽŶŐƚŽŵ
ĂƐƐĞƚĂŶĚƚŚĞƌƵdž:ŽŝŶƚKƉĞƌĂƚŝŽŶ͘
DĂŶĂŐĞŵĞŶƚŚĂƐŝĚĞŶƚŝĨŝĞĚŝŶĚŝĐĂƚŽƌƐŽĨŝŵƉĂŝƌŵĞŶƚ
ŝŶƌĞƐƉĞĐƚŽĨďŽƚŚƚŚĞ>ŽŶŐƚŽŵĂƐƐĞƚĂŶĚƚŚĞƌƵdž
:ŽŝŶƚKƉĞƌĂƚŝŽŶŝŶƚŚĞĐƵƌƌĞŶƚLJĞĂƌ͕ĂŶĚĂƐĂƌĞƐƵůƚ
ŚĂƐĐĂƌƌŝĞĚŽƵƚŝŵƉĂŝƌŵĞŶƚƚĞƐƚŝŶŐƚŽĂƐƐĞƐƐƚŚĞ
ƌĞĐŽǀĞƌĂďůĞĂŵŽƵŶƚŽĨĞĂĐŚƉƌŽĚƵĐŝŶŐĂŶĚ
ĚĞǀĞůŽƉŵĞŶƚĂƐƐĞƚĂƚϯϬ:ƵŶĞϮϬϮϰ͘
DĂŶĂŐĞŵĞŶƚŝƐƌĞƋƵŝƌĞĚƚŽĞdžĞƌĐŝƐĞƐŝŐŶŝĨŝĐĂŶƚ
ũƵĚŐĞŵĞŶƚŝŶĚĞƚĞƌŵŝŶŝŶŐƚŚĞĂƐƐƵŵƉƚŝŽŶƐƚŽďĞ
ƵƚŝůŝƐĞĚǁŚĞŶĂƐƐĞƐƐŝŶŐƚŚĞƌĞĐŽǀĞƌĂďůĞĂŵŽƵŶƚŽĨ
ƉƌŽĚƵĐŝŶŐĂŶĚĚĞǀĞůŽƉŵĞŶƚĂƐƐĞƚƐ͕ŝŶĐůƵĚŝŶŐ͗
•
ŽŵŵĞƌĐŝĂůŽƉĞƌĂƚŝŶŐĂƐƐƵŵƉƚŝŽŶƐŝŶĐůƵĚŝŶŐ
ƉƌŽĚƵĐƚŝŽŶƉƌŽĨŝůĞŽĨĞdžƉĞĐƚĞĚƌĞƐĞƌǀĞƐĂŶĚ
ƌĞƐŽƵƌĐĞƐ͕ĨĂĐŝůŝƚLJĚĞƐŝŐŶ͕ƉƌŽũĞĐƚĚĞǀĞůŽƉŵĞŶƚ
ĐŽƐƚ;ŝŶĐůƵĚŝŶŐƉƌŝĐĞĞƐĐĂůĂƚŝŽŶͿ͕ƉŝƉĞůŝŶĞĂŶĚŐĂƐ
ƉƌŽĐĞƐƐŝŶŐĂǀĂŝůĂďŝůŝƚLJĂŶĚŵĂƌŬĞƚĚĞŵĂŶĚ͖
•
&ƵƚƵƌĞĐŽŵŵŽĚŝƚLJƉƌŝĐĞƐ͖
•
ůŝŵĂƚĞĐŚĂŶŐĞƌĞůĂƚĞĚƌŝƐŬĂŶĚƚŚĞŝŵƉĂĐƚƚŚŝƐ
ŵĂLJŚĂǀĞŽŶĂƐƐĞƚƵƐĞĨƵůůŝǀĞƐĂŶĚĨƵƚƵƌĞĐĂƉŝƚĂů
ĞdžƉĞŶĚŝƚƵƌĞĂŶĚĐĂƌďŽŶŽĨĨƐĞƚƌĞƋƵŝƌĞŵĞŶƚƐ͖
ĂŶĚ
•
ŝƐĐŽƵŶƚƌĂƚĞƐĂƉƉůŝĞĚƚŽĨŽƌĞĐĂƐƚĐĂƐŚĨůŽǁƐƚŽ
ĞƐƚŝŵĂƚĞƚŚĞƌĞĐŽǀĞƌĂďůĞĂŵŽƵŶƚŽĨƚŚĞĂƐƐĞƚƐ͘
KƵƌƉƌŽĐĞĚƵƌĞƐƉĞƌĨŽƌŵĞĚŝŶĐŽŶũƵŶĐƚŝŽŶǁŝƚŚŽƵƌ
ǀĂůƵĂƚŝŽŶƐƉĞĐŝĂůŝƐƚƐŝŶĐůƵĚĞĚ͕ďƵƚǁĞƌĞŶŽƚůŝŵŝƚĞĚ
ƚŽ͗
•
Critically evaluating management’s assessment
ŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞƐƉĞĐŝĨŝĐƌĞƋƵŝƌĞŵĞŶƚƐŽĨ
^ϭϯϲ/ŵƉĂŝƌŵĞŶƚŽĨƐƐĞƚƐĨŽƌĞĂĐŚ
ƉƌŽĚƵĐŝŶŐĂŶĚĚĞǀĞůŽƉŵĞŶƚĂƐƐĞƚĂƐĂƚϯϬ:ƵŶĞ
ϮϬϮϰŝŶĐůƵĚŝŶŐ͗
o
Evaluating management’s process to assess
ĨŽƌŝŶĚŝĐĂƚŽƌƐŽĨŝŵƉĂŝƌŵĞŶƚŽĨƉƌŽĚƵĐŝŶŐ
ĂŶĚĚĞǀĞůŽƉŵĞŶƚĂƐƐĞƚƐ͕ŝŶĐůƵĚŝŶŐƚĞƐƚŝŶŐ
ĚĞƐŝŐŶĂŶĚŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨƚŚĞƌĞůĞǀĂŶƚ
ĐŽŶƚƌŽůƐ͖
o
ZĞǀŝĞǁŝŶŐŵŝŶƵƚĞƐŽĨŵĞĞƚŝŶŐƐŽĨƚŚŽƐĞ
ĐŚĂƌŐĞĚǁŝƚŚŐŽǀĞƌŶĂŶĐĞĂŶĚƉĞƌĨŽƌŵŝŶŐ
ŝŶƋƵŝƌŝĞƐǁŝƚŚĞdžĞĐƵƚŝǀĞŵĂŶĂŐĞŵĞŶƚƚŽ
ƵŶĚĞƌƐƚĂŶĚƚŚĞďĂƐŝƐĨŽƌƚŚĞĐŽŵŵĞƌĐŝĂů
ŽƉĞƌĂƚŝŶŐĂƐƐƵŵƉƚŝŽŶƐĂŶĚĂŐƌĞĞŝŶŐƚŽ
ƐƵƉƉŽƌƚŝŶŐĚŽĐƵŵĞŶƚĂƚŝŽŶǁŚĞƌĞ
ƌĞůĞǀĂŶƚ͖
o
ŚĂůůĞŶŐŝŶŐŬĞLJŝŶƉƵƚƐĂŶĚĂƐƐƵŵƉƚŝŽŶƐ
ƵƐĞĚŝŶƚŚĞƌĞƐƉĞĐƚŝǀĞǀĂůƵĂƚŝŽŶŵŽĚĞůƐ
ǁŝƚŚƌĞĨĞƌĞŶĐĞƚŽĂŶLJŝŵƉĂĐƚŽĨĐƵƌƌĞŶƚ
ĞĐŽŶŽŵŝĐ͕ƌĞŐƵůĂƚŽƌLJĂŶĚŝŶĚƵƐƚƌLJĨĂĐƚŽƌƐ͕
ŝŶĐůƵĚŝŶŐĐůŝŵĂƚĞĐŚĂŶŐĞƌĞůĂƚĞĚƌŝƐŬĂŶĚ
comparing management’s forecast future
ĐŽŵŵŽĚŝƚLJƉƌŝĐĞƐ͕ŝŶĨůĂƚŝŽŶĂŶĚĚŝƐĐŽƵŶƚ
ƌĂƚĞƐƚŽŵĂƌŬĞƚŽďƐĞƌǀĂďůĞĂƐƐƵŵƉƚŝŽŶƐ
ĂŶĚƚŚŝƌĚƉĂƌƚLJƌĞƉŽƌƚƐ͖
o
ŐƌĞĞŝŶŐĨŽƌĞĐĂƐƚĐĂƐŚĨůŽǁƐ͕ŝŶĐůƵĚŝŶŐ
ĞƐƚŝŵĂƚĞĚĐĂƉŝƚĂůĞdžƉĞŶĚŝƚƵƌĞ͕ƚŽKƉĞƌĂƚŽƌ
ĂŶĚŽĂƌĚĂƉƉƌŽǀĞĚĨŽƌĞĐĂƐƚƐĨŽƌĞĂĐŚ
ƉƌŽĚƵĐŝŶŐĂŶĚĚĞǀĞůŽƉŵĞŶƚĂƐƐĞƚ͖ĂŶĚ
o
WĞƌĨŽƌŵŝŶŐƐĞŶƐŝƚŝǀŝƚLJĂŶĂůLJƐĞƐŝŶƌĞƐƉĞĐƚ
ŽĨŬĞLJĂƐƐƵŵƉƚŝŽŶƐ͘
•
Reviewing management’s basis and calculation
ĨŽƌƚŚĞƌĞƐƚŽƌĂƚŝŽŶůŝĂďŝůŝƚŝĞƐĂƚϯϬ:ƵŶĞϮϬϮϰ͖
ĂŶĚ
•
ƐƐĞƐƐŝŶŐƚŚĞĂĚĞƋƵĂĐLJĂŶĚĂƉƉƌŽƉƌŝĂƚĞŶĞƐƐŽĨ
ƚŚĞƌĞůĂƚĞĚĚŝƐĐůŽƐƵƌĞƐŝŶƚŚĞŶŽƚĞƐƚŽƚŚĞ
ĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͕ŝŶĐůƵĚŝŶŐƌĞůĞǀĂŶƚ
ƐĞŶƐŝƚŝǀŝƚŝĞƐ͘
Independent Auditor’s Report
SGH Annual Report 2024
164
KƚŚĞƌ/ŶĨŽƌŵĂƚŝŽŶ
dŚĞ ĚŝƌĞĐƚŽƌƐ ĂƌĞ ƌĞƐƉŽŶƐŝďůĞ ĨŽƌ ƚŚĞ ŽƚŚĞƌ ŝŶĨŽƌŵĂƚŝŽŶ͘ dŚĞ ŽƚŚĞƌ ŝŶĨŽƌŵĂƚŝŽŶ ĐŽŵƉƌŝƐĞƐ ƚŚĞ ŝŶĨŽƌŵĂƚŝŽŶ
ŝŶĐůƵĚĞĚŝŶƚŚĞGroup’sĂŶŶƵĂůƌĞƉŽƌƚĨŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϬ:ƵŶĞϮϬϮϰďƵƚĚŽĞƐŶŽƚŝŶĐůƵĚĞƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ
and our auditor’s report thereon.
KƵƌŽƉŝŶŝŽŶŽŶƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚĚŽĞƐŶŽƚĐŽǀĞƌƚŚĞŽƚŚĞƌŝŶĨŽƌŵĂƚŝŽŶĂŶĚǁĞĚŽŶŽƚĞdžƉƌĞƐƐĂŶLJĨŽƌŵŽĨ
ĂƐƐƵƌĂŶĐĞĐŽŶĐůƵƐŝŽŶƚŚĞƌĞŽŶ͘
/ŶĐŽŶŶĞĐƚŝŽŶǁŝƚŚŽƵƌĂƵĚŝƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ͕ŽƵƌƌĞƐƉŽŶƐŝďŝůŝƚLJŝƐƚŽƌĞĂĚƚŚĞŽƚŚĞƌŝŶĨŽƌŵĂƚŝŽŶĂŶĚ͕ŝŶ
ĚŽŝŶŐ ƐŽ͕ ĐŽŶƐŝĚĞƌ ǁŚĞƚŚĞƌ ƚŚĞ ŽƚŚĞƌ ŝŶĨŽƌŵĂƚŝŽŶ ŝƐ ŵĂƚĞƌŝĂůůLJ ŝŶĐŽŶƐŝƐƚĞŶƚ ǁŝƚŚ ƚŚĞ ĨŝŶĂŶĐŝĂů ƌĞƉŽƌƚ Žƌ ŽƵƌ
ŬŶŽǁůĞĚŐĞŽďƚĂŝŶĞĚŝŶƚŚĞĂƵĚŝƚ͕ŽƌŽƚŚĞƌǁŝƐĞĂƉƉĞĂƌƐƚŽďĞŵĂƚĞƌŝĂůůLJŵŝƐƐƚĂƚĞĚ͘/Ĩ͕ďĂƐĞĚŽŶƚŚĞǁŽƌŬǁĞŚĂǀĞ
ƉĞƌĨŽƌŵĞĚ͕ǁĞĐŽŶĐůƵĚĞƚŚĂƚƚŚĞƌĞŝƐĂŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚŽĨƚŚŝƐŽƚŚĞƌŝŶĨŽƌŵĂƚŝŽŶ͕ǁĞĂƌĞƌĞƋƵŝƌĞĚƚŽƌĞƉŽƌƚ
ƚŚĂƚĨĂĐƚ͘tĞŚĂǀĞŶŽƚŚŝŶŐƚŽƌĞƉŽƌƚŝŶƚŚŝƐƌĞŐĂƌĚ͘
ZĞƐƉŽŶƐŝďŝůŝƚŝĞƐŽĨƚŚĞŝƌĞĐƚŽƌƐĨŽƌƚŚĞ&ŝŶĂŶĐŝĂůZĞƉŽƌƚ
dŚĞĚŝƌĞĐƚŽƌƐŽĨƚŚĞŽŵƉĂŶLJĂƌĞƌĞƐƉŽŶƐŝďůĞ͗
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&ŽƌƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽĨƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞŽƌƉŽƌĂƚŝŽŶƐĐƚϮϬϬϭ͕ŝŶĐůƵĚŝŶŐŐŝǀŝŶŐĂ
ƚƌƵĞĂŶĚĨĂŝƌǀŝĞǁŽĨƚŚĞĨŝŶĂŶĐŝĂůƉŽƐŝƚŝŽŶĂŶĚƉĞƌĨŽƌŵĂŶĐĞŽĨƚŚĞ'ƌŽƵƉŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƵƐƚƌĂůŝĂŶ
ĐĐŽƵŶƚŝŶŐ^ƚĂŶĚĂƌĚƐ͖ĂŶĚ
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&ŽƌƐƵĐŚŝŶƚĞƌŶĂůĐŽŶƚƌŽůĂƐƚŚĞĚŝƌĞĐƚŽƌƐĚĞƚĞƌŵŝŶĞŝƐŶĞĐĞƐƐĂƌLJƚŽĞŶĂďůĞƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽĨƚŚĞĨŝŶĂŶĐŝĂů
ƌĞƉŽƌƚŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞŽƌƉŽƌĂƚŝŽŶƐĐƚϮϬϬϭ͕ŝŶĐůƵĚŝŶŐŐŝǀŝŶŐĂƚƌƵĞĂŶĚĨĂŝƌǀŝĞǁŽĨƚŚĞĨŝŶĂŶĐŝĂů
ƉŽƐŝƚŝŽŶĂŶĚƉĞƌĨŽƌŵĂŶĐĞŽĨƚŚĞ'ƌŽƵƉ͕ĂŶĚŝƐĨƌĞĞĨƌŽŵŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚ͕ǁŚĞƚŚĞƌĚƵĞƚŽĨƌĂƵĚŽƌ
ĞƌƌŽƌ͘
/ŶƉƌĞƉĂƌŝŶŐƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ͕ƚŚĞĚŝƌĞĐƚŽƌƐĂƌĞƌĞƐƉŽŶƐŝďůĞĨŽƌĂƐƐĞƐƐŝŶŐƚŚĞĂďŝůŝƚLJŽĨƚŚĞ'ƌŽƵƉƚŽĐŽŶƚŝŶƵĞ
ĂƐĂŐŽŝŶŐĐŽŶĐĞƌŶ͕ĚŝƐĐůŽƐŝŶŐ͕ĂƐĂƉƉůŝĐĂďůĞ͕ŵĂƚƚĞƌƐƌĞůĂƚĞĚƚŽŐŽŝŶŐĐŽŶĐĞƌŶĂŶĚƵƐŝŶŐƚŚĞŐŽŝŶŐĐŽŶĐĞƌŶďĂƐŝƐ
ŽĨĂĐĐŽƵŶƚŝŶŐƵŶůĞƐƐƚŚĞĚŝƌĞĐƚŽƌƐĞŝƚŚĞƌŝŶƚĞŶĚƚŽůŝƋƵŝĚĂƚĞƚŚĞ'ƌŽƵƉŽƌƚŽĐĞĂƐĞŽƉĞƌĂƚŝŽŶƐ͕ŽƌŚĂǀĞŶŽƌĞĂůŝƐƚŝĐ
ĂůƚĞƌŶĂƚŝǀĞďƵƚƚŽĚŽƐŽ͘
Auditor’s Responsibilities for the Audit of the Financial Report
KƵƌŽďũĞĐƚŝǀĞƐĂƌĞƚŽŽďƚĂŝŶƌĞĂƐŽŶĂďůĞĂƐƐƵƌĂŶĐĞĂďŽƵƚǁŚĞƚŚĞƌƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚĂƐĂǁŚŽůĞŝƐĨƌĞĞĨƌŽŵ
ŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚ͕ǁŚĞƚŚĞƌĚƵĞƚŽĨraud or error, and to issue an auditor’s report that includes our opinion.
ZĞĂƐŽŶĂďůĞĂƐƐƵƌĂŶĐĞŝƐĂŚŝŐŚůĞǀĞůŽĨĂƐƐƵƌĂŶĐĞďƵƚŝƐŶŽƚĂŐƵĂƌĂŶƚĞĞƚŚĂƚĂŶĂƵĚŝƚĐŽŶĚƵĐƚĞĚŝŶĂĐĐŽƌĚĂŶĐĞ
ǁŝƚŚƚŚĞƵƐƚƌĂůŝĂŶƵĚŝƚŝŶŐ^ƚĂŶĚĂƌĚƐǁŝůůĂůǁĂLJƐĚĞƚĞĐƚĂŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚǁŚĞŶŝƚĞdžŝƐƚƐ͘DŝƐƐƚĂƚĞŵĞŶƚƐ
ĐĂŶĂƌŝƐĞĨƌŽŵĨƌĂƵĚŽƌĞƌƌŽƌĂŶĚĂƌĞĐŽŶƐŝĚĞƌĞĚŵĂƚĞƌŝĂůŝĨ͕ŝŶĚŝǀŝĚƵĂůůLJŽƌŝŶƚŚĞĂŐŐƌĞŐĂƚĞ͕ƚŚĞLJĐŽƵůĚƌĞĂƐŽŶĂďůLJ
ďĞĞdžƉĞĐƚĞĚƚŽŝŶĨůƵĞŶĐĞƚŚĞĞĐŽŶŽŵŝĐĚĞĐŝƐŝŽŶƐŽĨƵƐĞƌƐƚĂŬĞŶŽŶƚŚĞďĂƐŝƐŽĨƚŚŝƐĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ͘
ƐƉĂƌƚŽĨĂŶĂƵĚŝƚŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞƵƐƚƌĂůŝĂŶƵĚŝƚŝŶŐ^ƚĂŶĚĂƌĚƐ͕ǁĞĞdžĞƌĐŝƐĞƉƌŽĨĞƐƐŝŽŶĂůũƵĚŐĞŵĞŶƚĂŶĚ
ŵĂŝŶƚĂŝŶƉƌŽĨĞƐƐŝŽŶĂůƐĐĞƉƚŝĐŝƐŵƚŚƌŽƵŐŚŽƵƚƚŚĞĂƵĚŝƚ͘tĞĂůƐŽ͗
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/ĚĞŶƚŝĨLJĂŶĚĂƐƐĞƐƐƚŚĞƌŝƐŬƐŽĨŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ͕ǁŚĞƚŚĞƌĚƵĞƚŽĨƌĂƵĚŽƌ
ĞƌƌŽƌ͕ĚĞƐŝŐŶĂŶĚƉĞƌĨŽƌŵĂƵĚŝƚƉƌŽĐĞĚƵƌĞƐƌĞƐƉŽŶƐŝǀĞƚŽƚŚŽƐĞƌŝƐŬƐ͕ĂŶĚŽďƚĂŝŶĂƵĚŝƚĞǀŝĚĞŶĐĞƚŚĂƚŝƐ
ƐƵĨĨŝĐŝĞŶƚ ĂŶĚ ĂƉƉƌŽƉƌŝĂƚĞ ƚŽ ƉƌŽǀŝĚĞ Ă ďĂƐŝƐ ĨŽƌ ŽƵƌ ŽƉŝŶŝŽŶ͘ dŚĞ ƌŝƐŬ ŽĨ ŶŽƚ ĚĞƚĞĐƚŝŶŐ Ă ŵĂƚĞƌŝĂů
ŵŝƐƐƚĂƚĞŵĞŶƚƌĞƐƵůƚŝŶŐĨƌŽŵĨƌĂƵĚŝƐŚŝŐŚĞƌƚŚĂŶĨŽƌŽŶĞƌĞƐƵůƚŝŶŐĨƌŽŵĞƌƌŽƌ͕ĂƐĨƌĂƵĚŵĂLJŝŶǀŽůǀĞ
ĐŽůůƵƐŝŽŶ͕ĨŽƌŐĞƌLJ͕ŝŶƚĞŶƚŝŽŶĂůŽŵŝƐƐŝŽŶƐ͕ŵŝƐƌĞƉƌĞƐĞŶƚĂƚŝŽŶƐ͕ŽƌƚŚĞŽǀĞƌƌŝĚĞŽĨŝŶƚĞƌŶĂůĐŽŶƚƌŽů͘
165
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
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KďƚĂŝŶĂŶƵŶĚĞƌƐƚĂŶĚŝŶŐŽĨŝŶƚĞƌŶĂůĐŽŶƚƌŽůƌĞůĞǀĂŶƚƚŽƚŚĞĂƵĚŝƚŝŶŽƌĚĞƌƚŽĚĞƐŝŐŶĂƵĚŝƚƉƌŽĐĞĚƵƌĞƐ
ƚŚĂƚĂƌĞĂƉƉƌŽƉƌŝĂƚĞŝŶƚŚĞĐŝƌĐƵŵƐƚĂŶĐĞƐ͕ďƵƚŶŽƚĨŽƌƚŚĞƉƵƌƉŽƐĞŽĨĞdžƉƌĞƐƐŝŶŐĂŶŽƉŝŶŝŽŶŽŶƚŚĞ
effectiveness of the Group’s internal control.
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ǀĂůƵĂƚĞ ƚŚĞ ĂƉƉƌŽƉƌŝĂƚĞŶĞƐƐ ŽĨ ĂĐĐŽƵŶƚŝŶŐ ƉŽůŝĐŝĞƐ ƵƐĞĚ ĂŶĚ ƚŚĞ ƌĞĂƐŽŶĂďůĞŶĞƐƐ ŽĨ ĂĐĐŽƵŶƚŝŶŐ
ĞƐƚŝŵĂƚĞƐĂŶĚƌĞůĂƚĞĚĚŝƐĐůŽƐƵƌĞƐŵĂĚĞďLJƚŚĞĚŝƌĞĐƚŽƌƐ͘
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Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
ďĂƐĞĚ ŽŶ ƚŚĞ ĂƵĚŝƚ ĞǀŝĚĞŶĐĞ ŽďƚĂŝŶĞĚ͕ ǁŚĞƚŚĞƌ Ă ŵĂƚĞƌŝĂů ƵŶĐĞƌƚĂŝŶƚLJ ĞdžŝƐƚƐ ƌĞůĂƚĞĚ ƚŽ ĞǀĞŶƚƐ Žƌ
ĐŽŶĚŝƚŝŽŶƐƚŚĂƚŵĂLJĐĂƐƚƐŝŐŶŝĨŝĐĂŶƚĚŽƵďƚŽŶƚŚĞGroup’s ability to continue as a going concern. If we
ĐŽŶĐůƵĚĞƚŚĂƚĂŵĂƚĞƌŝĂůƵŶĐĞƌƚĂŝŶƚLJĞdžŝƐƚƐ͕ǁĞĂƌĞƌĞƋƵŝƌĞĚƚŽĚƌaw attention in our auditor’s report to
ƚŚĞ ƌĞůĂƚĞĚ ĚŝƐĐůŽƐƵƌĞƐ ŝŶ ƚŚĞ ĨŝŶĂŶĐŝĂů ƌĞƉŽƌƚ Žƌ͕ ŝĨ ƐƵĐŚ ĚŝƐĐůŽƐƵƌĞƐ ĂƌĞ ŝŶĂĚĞƋƵĂƚĞ͕ ƚŽ ŵŽĚŝĨLJ ŽƵƌ
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
,ŽǁĞǀĞƌ͕ĨƵƚƵƌĞĞǀĞŶƚƐŽƌĐŽŶĚŝƚŝŽŶƐŵĂLJĐĂƵƐĞƚŚĞ'ƌŽƵƉƚŽĐĞĂƐĞƚŽĐŽŶƚŝŶƵĞĂƐĂŐŽŝŶŐĐŽŶĐĞƌŶ͘
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ǀĂůƵĂƚĞƚŚĞŽǀĞƌĂůůƉƌĞƐĞŶƚĂƚŝŽŶ͕ƐƚƌƵĐƚƵƌĞĂŶĚĐŽŶƚĞŶƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ͕ŝŶĐůƵĚŝŶŐƚŚĞĚŝƐĐůŽƐƵƌĞƐ͕
ĂŶĚǁŚĞƚŚĞƌƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚƌĞƉƌĞƐĞŶƚƐƚŚĞƵŶĚĞƌůLJŝŶŐƚƌĂŶƐĂĐƚŝŽŶƐĂŶĚĞǀĞŶƚƐŝŶĂŵĂŶŶĞƌƚŚĂƚ
ĂĐŚŝĞǀĞƐĨĂŝƌƉƌĞƐĞŶƚĂƚŝŽŶ͘
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KďƚĂŝŶ ƐƵĨĨŝĐŝĞŶƚ ĂƉƉƌŽƉƌŝĂƚĞ ĂƵĚŝƚ ĞǀŝĚĞŶĐĞ ƌĞŐĂƌĚŝŶŐ ƚŚĞ ĨŝŶĂŶĐŝĂů ŝŶĨŽƌŵĂƚŝŽŶ ŽĨ ƚŚĞ ĞŶƚŝƚŝĞƐ Žƌ
ďƵƐŝŶĞƐƐĂĐƚŝǀŝƚŝĞƐǁŝƚŚŝŶƚŚĞ'ƌŽƵƉƚŽĞdžƉƌĞƐƐĂŶŽƉŝŶŝŽŶŽŶƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚ͘tĞĂƌĞƌĞƐƉŽŶƐŝďůĞĨŽƌ
the direction, supervision and performance of the Group’s audit. We remain solely responsible for our
ĂƵĚŝƚŽƉŝŶŝŽŶ͘
tĞĐŽŵŵƵŶŝĐĂƚĞǁŝƚŚƚŚĞĚŝƌĞĐƚŽƌƐƌĞŐĂƌĚŝŶŐ͕ĂŵŽŶŐŽƚŚĞƌŵĂƚƚĞƌƐ͕ƚŚĞƉůĂŶŶĞĚƐĐŽƉĞĂŶĚƚŝŵŝŶŐŽĨƚŚĞĂƵĚŝƚ
ĂŶĚƐŝŐŶŝĨŝĐĂŶƚĂƵĚŝƚĨŝŶĚŝŶŐƐ͕ŝŶĐůƵĚŝŶŐĂŶLJƐŝŐŶŝĨŝĐĂŶƚĚĞĨŝĐŝĞŶĐŝĞƐŝŶŝŶƚĞƌŶĂůĐŽŶƚƌŽůƚŚĂƚǁĞŝĚĞŶƚŝĨLJĚƵƌŝŶŐŽƵƌ
ĂƵĚŝƚ͘
tĞ ĂůƐŽ ƉƌŽǀŝĚĞ ƚŚĞ ĚŝƌĞĐƚŽƌƐ ǁŝƚŚ Ă ƐƚĂƚĞŵĞŶƚ ƚŚĂƚ ǁĞ ŚĂǀĞ ĐŽŵƉůŝĞĚ ǁŝƚŚ ƌĞůĞǀĂŶƚ ĞƚŚŝĐĂů ƌĞƋƵŝƌĞŵĞŶƚƐ
ƌĞŐĂƌĚŝŶŐŝŶĚĞƉĞŶĚĞŶĐĞ͕ĂŶĚƚŽĐŽŵŵƵŶŝĐĂƚĞǁŝƚŚƚŚĞŵĂůůƌĞůĂƚŝŽŶƐŚŝƉƐĂŶĚŽƚŚĞƌŵĂƚƚĞƌƐƚŚĂƚŵĂLJƌĞĂƐŽŶĂďůLJ
ďĞƚŚŽƵŐŚƚƚŽďĞĂƌŽŶŽƵƌŝŶĚĞƉĞŶĚĞŶĐĞ͕ĂŶĚǁŚĞƌĞĂƉƉůŝĐĂďůĞ͕ĂĐƚŝŽŶƐƚĂŬĞŶƚŽĞůŝŵŝŶĂƚĞƚŚƌĞĂƚƐŽƌƐĂĨĞŐƵĂƌĚƐ
ĂƉƉůŝĞĚ͘
&ƌŽŵƚŚĞŵĂƚƚĞƌƐĐŽŵŵƵŶŝĐĂƚĞĚǁŝƚŚƚŚĞĚŝƌĞĐƚŽƌƐ͕ǁĞĚĞƚĞƌŵŝŶĞƚŚŽƐĞŵĂƚƚĞƌƐƚŚĂƚǁĞƌĞŽĨŵŽƐƚƐŝŐŶŝĨŝĐĂŶĐĞ
ŝŶƚŚĞĂƵĚŝƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŽĨƚŚĞĐƵƌƌĞŶƚƉĞƌŝŽĚĂŶĚĂƌĞƚŚĞƌĞĨŽƌĞƚŚĞŬĞLJĂƵĚŝƚŵĂƚƚĞƌƐ͘tĞĚĞƐĐƌŝďĞ
these matters in our auditor’s report unless law or regulation precludes public disclosure ĂďŽƵƚƚŚĞŵĂƚƚĞƌŽƌ
ǁŚĞŶ͕ŝŶĞdžƚƌĞŵĞůLJƌĂƌĞĐŝƌĐƵŵƐƚĂŶĐĞƐ͕ǁĞĚĞƚĞƌŵŝŶĞƚŚĂƚĂŵĂƚƚĞƌƐŚŽƵůĚŶŽƚďĞĐŽŵŵƵŶŝĐĂƚĞĚŝŶŽƵƌƌĞƉŽƌƚ
ďĞĐĂƵƐĞƚŚĞĂĚǀĞƌƐĞĐŽŶƐĞƋƵĞŶĐĞƐŽĨĚŽŝŶŐƐŽǁŽƵůĚƌĞĂƐŽŶĂďůLJďĞĞdžƉĞĐƚĞĚƚŽŽƵƚǁĞŝŐŚƚŚĞƉƵďůŝĐŝŶƚĞƌĞƐƚ
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Independent Auditor’s Report
SGH Annual Report 2024
166
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167
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
Substantial Shareholders – Ordinary Shares
The number of ordinary shares held by the Substantial Shareholders based on the most recent notifications contained in the Company’s
Register of Substantial Shareholders as at 26 July 2024 are as follows:
Shareholder
Number
of Shares
% Held**
KM Stokes; North Aston Pty Limited, Wroxby Pty Limited,
207,304,349
50.93
Tiberius (Seven Investments) Pty Limited and Ashblue Holdings Pty Limited;
Tiberius Pty Limited, Redlake Pty Limited and Tiberius group entities;
Australian Capital Equity Pty Limited, Clabon Pty Limited and
Australian Capital Equity Pty Limited group entities.*
*
Based on number of shares disclosed in the Notice of Change of Interests of Substantial Holder given to ASX on 4 July 2024.
** Based on the number of ordinary shares on issue at 4 July 2024.
Distribution of Ordinary Shares
Category (Number of shares)
Ordinary Shareholders
1 – 1,000
33,584
1,001 – 5,000
6,325
5,001 – 10,000
721
10,001 – 100,000
363
100,001 – and over
47
Total Number of Holders
41,040
Number of Holdings less than a Marketable Parcel
904
Twenty Largest Ordinary Shareholders
Name of Shareholder
No. of Shares
% Held
North Aston Pty Limited
137,841,807
33.87
Ashblue Holdings Pty Limited
69,462,342
17.07
HSBC Custody Nominees (Australia) Limited
67,203,951
16.51
J P Morgan Nominees Australia Pty Limited
49,992,648
12.28
Citicorp Nominees Pty Limited
26,535,302
6.52
BNP Paribas Nominees Pty Ltd
7,120,531
1.75
National Nominees Limited
3,691,321
0.91
Boral Limited
3,493,690
0.86
Certane CT Pty Ltd
1,622,598
0.40
Netwealth Investments Limited
802,575
0.20
IOOF Investment Services Limited
377,010
0.09
Palm Beach Nominees Pty Limited
314,692
0.08
UBS Nominees Pty Ltd
279,871
0.07
Uechtritz Foundation Pty Ltd
273,069
0.07
Mr Barry Martin Lambert
264,547
0.06
First Samuel Ltd
264,503
0.06
Woodross Nominees Pty Ltd
178,154
0.04
Ryan Kerry Stokes
170,848
0.04
Invia Custodian Pty Limited
161,237
0.04
Neweconomy Com Au Nominees Pty Limited
159,042
0.04
Total Twenty Largest Ordinary Shareholders
370,209,738
90.96
Shareholder Information
SGH Annual Report 2024
168
Voting Rights
Ordinary Shares
On a show of hands, every member present in person or by proxy
or attorney, or being a corporation, present by its representative,
shall have one vote. On a poll, every member present in person
or by proxy or attorney, or being a corporation, present by its
representative, shall have one vote for every share held.
Stock Exchange Listing
The Company is listed with the Australian Securities Exchange
Limited and the home exchange is Sydney.
The Company is also listed on the Singapore Exchange Limited from
6 March 2018.
Company Information
Company Secretary
Warren Walter Coatsworth
Share Registry
Boardroom Pty Limited
Level 8
210 George Street
Sydney NSW 2000
Auditor
Deloitte Touche Tohmatsu
Quay Quarter Tower
50 Bridge Street
Sydney NSW 2000
Legal Advisors
Herbert Smith Freehills
ANZ Tower
161 Castlereagh Street
Sydney NSW 2000
Investor Information
Shareholder Inquiries
Investors seeking information regarding their shareholding or
dividends or wishing to advise of a change of address should
contact the Share Registry at:
Boardroom Pty Limited
Level 8
210 George Street
Sydney NSW 2000
GPO Box 3993
Sydney NSW 2001
Telephone: (02) 9290 9600
Alternatively, visit the online service at boardroomlimited.com.au
Boardroom Pty Limited has an online service for investors called
InvestorServe. This enables investors to make online changes,
view balances and transaction history, as well as obtain information
about recent dividend payments and download various forms to
assist in the management of their holding. To use this service,
visit the Boardroom Pty Limited website or
www.investorserve.com.au.
For other general inquiries visit the website at
www.sevengroup.com.au.
Tax File Number Information
The company is obliged to record Tax File Numbers or exemption
details provided by shareholders. While it is not compulsory for
shareholders to provide a Tax File Number or exemption details,
Seven Group Holdings Limited is obliged to deduct tax from
unfranked dividends paid to investors resident in Australia who have
not supplied such information. Forms are available upon request
from the Share Registry or shareholders can submit their Tax File
Number via the Boardroom website.
The Chess System
Seven Group Holdings Limited operates under CHESS – Clearing
House Electronic Subregister System – an Australian Securities
Exchange system which permits the electronic transfer and
registration of shares. Under CHESS, the company issues a
Statement of Holdings to investors, instead of share certificates,
and the statement will quote the Holder Identification Number
(HIN). The HIN number should be quoted on any correspondence
investors have with the Share Registry.
The company will maintain investors’ holdings in an Issuer
Sponsored facility, which enables investors to maintain their holding
without the need to be tied to any particular stockbroker.
169
Directors’ Report
Our Businesses
Sustainability Report
Performance Review
Financial Report
sevengroup.com.au
Corporate Directory
Head Office and Registered Office
Seven Group Holdings Limited
ABN: 46 142 003 469
Level 30, 175 Liverpool Street
Sydney NSW 2000
02 8777 7574
Key Operating Businesses
WesTrac WA
128–136 Great Eastern Highway
South Guildford WA 6055
08 9377 9444
WesTrac NSW
1 WesTrac Drive
Tomago NSW 2322
02 4964 5000
WesTrac ACT
78 Sheppard Street
Hume ACT 2620
02 6290 4500
Coates – Head Office
Level 1, 201 Coward Street
Mascot NSW 2020
13 15 52
Coates – East Business Unit
6 Greenhills Avenue
Moorebank NSW 2170
13 15 52
Coates – South Business Unit
120 South Gippsland Highway
Dandenong VIC 3175
13 15 52
Coates – North Business Unit
56–61 Meakin Road
Meadowbrook QLD 4131
13 15 52
Coates – West Business Unit
18 Wheeler Street
Belmont WA 6104
13 15 52
Boral
Level 3, Triniti 2
39 Delhi Road
North Ryde NSW 2113
02 9220 6300
Allight
12 Hoskins Road
Landsdale WA 6065
08 9302 7000
SGH Energy
Level 4, 160 Harbour Esplanade
Docklands VIC 3008
03 8628 7277