Thank you. Good morning, and welcome to the SGH results presentation for the half year ended 31 December 2025.

I am Ryan Stokes, Managing Director and CEO of SGH. Joining me is our CFO, Richard Richards.

Slide 2. SGH is a leading Australian diversified operating business focused on industrial services and energy.

Our strategy is centered on owning and operating market-leading businesses with scale, privileged assets, and defendable competitive positions. We are deliberately Australian focused with exposure to long-duration demand thematics.

Our approach is driven by the SGH Way, which brings together disciplined execution, capital allocation, and an owner's mindset with a clear focus on delivering long-term value creation and TSR outperformance. This execution and accountability-led model underpins how we operate Westrac, Boral, and Coates, and guides our disciplined approach to capital allocation to drive growth.

Slide 3. SGH delivered a strong first half result highlighted by earnings growth, margin expansion, and improved cash generation.

EBITDA of $1.1 billion increased 1%, while EBIT was up at $844 million, and NPAT increased 2% to $518 million. Operating cash flow increased 32% to $1.1 billion, reflecting strong cash conversion across the business.

Slide 4. Revenue of $5.4 billion was broadly flat, reflecting the expected normalization of elevated Westrac capital sales in the prior period.

EBIT margin expanded to 15.6%, driven by ongoing profitability improvements at Boral and Westrac, supported by disciplined cost control. Industrial services EBIT increased 1% to $774 million, led by delivery of mid-teen EBIT margins at Boral and improved profitability at Westrac.

Operating cash flow increased 32% to $1.1 billion with EBITDA cash conversion of 98%. The strong cash flow nature of the businesses supported a 4% reduction in leverage to 1.91 times.

This level is below our target range, providing increased balance sheet flexibility. The strong result also supported payment of a 32 cent per share interim fully franked dividend, up 7%, and in line with our ambition to deliver stable and growing dividends over time.

Slide 5. Safety is an absolute priority for SGH.

In the 12 months to December '25, SGH delivered meaningful operational safety improvements with LTIFR reducing 36% to 0.7, and TRIFR reducing 31% to 2.7. These improvements were delivered across all business units, reflecting continuous improvement plans, a focus on critical risk management, and updated consequence management frameworks across SGH.

On sustainability, Westrac and Coates continue to play key roles in the circular economy through the remanufacture and rebuild of machines and components, and the provision of rental equipment. Boral also processed over 1.25 million tonnes of recycled product over the half, supporting both sustainability and financial outcomes.

Further progress was also made on our decarbonization journey with the increased use of alternative fuels at the Berrima cement plant. Slide 6.

Westrac delivered a strong result for the half, supported by services growth and margin expansion, and strong cash generation. Revenue of $3 billion contracted 6% following the expected normalization of elevated capital sales in the prior period.

EBIT of $348 million was broadly flat with higher services revenue and margin expansion offsetting the movement in capital sales. EBIT margin increased 60 basis points to 11.7%, driven by a higher services mix, disciplined cost management, and improved workshop and labor utilization.

Operating cash flow of $496 million increased 92% with EBITDA cash conversion of 129%, reflecting improved inventory and working capital management. Slide 7.

Services demand remains strong with the elevated rebuild activity in the first half expected to strengthen further in the second half. This demand is supported by the size of the installed base and aging fleet profile, driving demand for parts, rebuilds, and product support activity.

Capital sales demand is also robust, supported by a committed resource industry project pipeline. Construction equipment markets are also showing signs of positive activity.

Westrac is progressing technology and efficiency initiatives, delivering improvements in capacity, labor utilization, parts availability, and turnaround times, ensuring Westrac can continue delivering for our customers. Slide 8.

Boral delivered a record first half performance with revenue of $1.9 billion, up 7%, supported by volume growth, an improved go-to-market strategy, and value-led pricing traction. EBIT increased 10% to $284 million with EBIT margin expanding to 14.7%.

The performance journey initiatives are working to ensure the margin improvements are enduring and structurally embedded into the business. Operating cash flow of $336 million and ROCE increased to 19.1%, up 3.8 percentage points.

The financial result was underpinned by operational efficiency gains and cost discipline with highlights including a 4 percentage point increase in deliveries on time to 87% and a 3 percentage point lift in grade of service to 87%. The business will continue to focus on cost variabilization, asset and network optimization, and SG&A efficiencies to maintain operational and cost momentum.

Slide 9. Boral delivered growth across its core products with strengthening demand from the multi-residential and infrastructure sectors, driving volumes 8% higher for concrete, 7% higher for cement, and 3% higher for quarries.

The volume growth was underpinned by particularly strong customer activity in Queensland and Western Australia with stable activity in New South Wales and Victoria. The strengthening demand and enhanced customer value proposition enabled Boral to achieve a 2% higher average selling price across its core products.

Boral also continued to progress strategic network investment and growth opportunities, including quarry extensions, expanding the concrete network, and both organic and inorganic adjacent growth opportunities. Boral's CEO succession process is progressing well and is expected to conclude in March this year.

Our focus remains on ensuring leadership continuity and that the incoming CEO can support customers, deliver Boral's strategy through the Boral Way, and progress the performance journey. Slide 10.

Coates delivered a sequential improvement in operational and financial performance compared with the second half of FY '25, indicating a positive trend in infrastructure customer activity. Revenue of $520 million and EBIT of $142 million contracted 5% and 9%, respectively, on the prior corresponding period, reflecting the residual impact of the activity decline in the second half of FY '25.

Cost actions and operational efficiencies partially offset the revenue impact. Time utilization of 61% was strong with an improvement of 1.7 percentage points, and the RNM to sales ratio also improved to 17%, reflecting the ongoing operating leverage and network benefits from the hub-and-spoke model.

Slide 11. A dedicated focus on improving sales execution delivered higher quoting activity and improved win rates during the half with the win rate lifting by 6.2 percentage points to 33.8%.

This momentum is expected to build in the second half as demand for previously deferred major infrastructure projects, particularly in transport, is expected to continue recovering. Coates is well-positioned to capture the $1.6 trillion five-year infrastructure and construction pipelines, supported by operational and cost efficiency initiatives and the ongoing execution of the Grow 30 strategy to lift market share.

Slide 12. Beach Energy achieved a major growth milestone in H1 '26, delivering first gas from the Waitsia Stage 2 project in December.

In the Cooper Basin, flood recovery efforts supported a material restoration of production, and exploration and development activity has recommenced on the Western Flank. Production for the half of 9.5 million boe and NPAT of $219 million were down 7% and 8%, respectively, predominantly impacted by the Cooper Basin floods.

Beach also generated positive free cash flow over the half, supporting the period-end available liquidity of $925 million, demonstrating the strength of the Beach balance sheet. Slide 13.

At Crux, construction of the Shell-operated LNG backfill project continues to advance with substructure installation almost complete, pipelines laid, and the topside facilities ready for transit. SGH's share of the project investment for Crux was $96 million in H1 '26, and first gas remains target for FY '28.

At Longtom, SGH and Amplitude are undertaking a select phase study to assess restart options with a decision to enter FEED expected in FY '26. Slide 14.

In property, the competitive tender process for the 500-hectare Ravenhall logistics precinct is nearing completion. The development partner will be selected based on demonstrated capability, depth of management expertise, and alignment on the value creation opportunity.

Following this appointment, we will move quickly to formalize arrangements and actively progress planning and development to begin unlocking value from the site. In media, the merger of Seven West Media and Southern Cross Media Group was completed on 7 January 2026.

The transaction creates a leading integrated media platform with expanded reach across television, radio, and digital channels. Annual pre-tax cost synergies of $25 million to $30 million are expected to be delivered within 18 to 24 months with additional revenue upside over time.

SGH holds a 20.1% interest in the merged entity, Southern Cross Media Group. I will now hand you to Richard to run through the financials.

Richard.

Thank you, Ryan, and good morning. SGH achieved a resilient financial result for the period with margin and earnings growth.

Revenue of $5.4 billion contracted 2%, reflecting an anticipated normalization of exceptionally strong capital sales at Westrac in the prior comparative period, largely offset by a 7% uplift in revenue at Boral. Expenses of $4.4 billion reduced by 3%, supported by a reduction in Westrac COGS and lower employee expenses at Westrac and Coates.

The larger fall in expenses compared to revenue demonstrates SGH's focus on disciplined cost control and delivered a 30 basis point increase in EBIT margin to 15.6%. EBIT of $844 million was ahead of the prior period, while EBITDA of $1.1 billion was up 1% with the margin improvement more than offsetting revenue impact.

Net finance costs of $148 million fell 9%, reflecting lower drawn debt, enabled by strong cash flow, and refinancing locking in lower debt margins. The underlying tax expense of $177 million was up 3%, primarily reflecting higher income from controlled entities with a reduction in equity-accounted post-tax earnings.

Underlying NPAT increased 2% to $518 million, while statutory NPAT lifted 1% to $473 million, largely reflecting the increase in gross earnings and lower financing expense. Slide 17.

SGH's statutory result included $46 million in pre-tax significant items, including a $21 million share of Beach Energy's impairment and $4 million relating to SGH's share of Seven West Media's significant items. In addition, the mark-to-market of our investment in SWM resulted in an impairment of $20 million based on the market share price.

Other notable pre-tax items included a $7 million favorable fair value adjustment on the Boral acquisition, offset by $6 million in transformation costs associated with the restructuring of the asphalt business and cartage arrangements. Combined, these and other lesser items resulted in $46 million net reduction to after-tax statutory earnings for the half.

Slide 18. This slide presents an EBIT bridge, which details of the absolute movement period-on-period for each component of the SGH result.

It also includes a reconciliation the table to statutory EBIT. Westrac's EBIT was strong with the expected normalization of capital sales largely offset by volume and mix-led improvements in services, resulting in a flat EBIT.

Boral's EBIT grew $25 million, driven by volume growth across its core products and value-led pricing traction that supported significant margin expansion. Disciplined cost control and higher asset utilization at Coates partially offset the residual impact of the second half FY '25 activity decline, leading to a $14 million contraction in EBIT.

Energy EBIT contribution reflects the lower equity-accounted earnings from Beach. Increased realized gains from our CMC investment were offset by lower SWM earnings, driving a flat contribution from the media segment.

In aggregate, these movements delivered a $1 million increase in underlying EBIT to $844 million, or $797 million statutory EBIT after accounting for the $46 million of pre-tax significant items previously outlined. Slide 19.

Operating cash flow of $1.1 billion was a highlight of the result, lifting $263 million, or 32%, driven by a 23 basis point increase in EBITDA cash conversion to 98%. The lift was driven in large part to the $249 million higher operating cash flows from Westrac and $20 million higher cash flows from Boral, reflecting our clear focus on working capital optimization.

Dividends from equity-accounted investees also drove higher operating cash with $27 million increase primarily reflecting the higher dividend from Beach. Income taxes paid for the half were $198 million and were up $45 million, largely reflecting the prior period containing a one-off $26 million US tax refund received by Boral, higher taxable income, and a slight increase in the effective tax rate to 27.2%.

Net investing cash outflows increased by $134 million to $408 million, largely attributable to $96 million of capital investment in Crux, higher capital expenditure at Boral. The Boral investment includes catch-up capital on HME of $56 million and growth capital on new quarries of $62 million.

Net financing cash outflows were down $454 million on lower repayment of borrowings, lower net debt, and Boral acquisition payment in the prior comparative period, more than offsetting the increase in the SGH dividend payments. The resulting $85 million net increase to cash and cash equivalents, coupled with repayment of borrowings, led to $163 million or 4% reduction in closing net debt of $4 billion.

Slide 20. SGH's net assets increased by $353 million to $5.2 billion at 31 December, driven by investment in oil and gas assets, PP&E, lower trade and other payables, and lower net debt.

Producing and development assets increased by $136 million, reflecting SGH's continued investment to bring Crux LNG backfill project into development. Property, plant, and equipment rose by $86 million, largely reflecting Boral's quarry acquisition and investment in catch-up HME.

Inventory decreased by $254 million, primarily from targeted working capital initiatives at Westrac. Trade and other payables declined $213 million, driven by $80 million lower Cat and other payables at Westrac, $85 million lower payables at Boral stemming from fewer working days compared to the prior period, and $27 million lower payables at Coates, reflecting lower fleet capex.

Slide 21. Adjusting for $99 million in favorable mark-to-market of debt-related derivatives, SGH's adjusted net debt to EBITDA, or leverage, improved 4% to 1.91 times at 31 December.

At the period end, 70% of SGH's drawn debt was fixed with an average rate of 4.9% and average remaining tenor of 4 years. SGH's effective borrowing cost was 5.4% with average maturity of 4.2 years.

We continue to see strong lender support to fund growth objectives. During the period, the $600 million Asian term loan and $578 million corporate facility tranche were refinanced, extending tenor and at lower rates.

There are now no corporate bank facility maturities until FY '30. Finally, available liquidity was $2.1 billion at 31 December, including $575 million of uncommitted facilities.

The favorable movement in net debt and interest rates reflect our disciplined approach to balance sheet management and positions SGH to continue to pursue both organic and inorganic growth. I'll hand you back to Ryan.

Thank you, Richard. SGH's priorities for the remainder of FY '26 are clear.

We are focused on the disciplined execution of the SGH Way operating model to drive performance across the business. We are strengthening sales execution to capture customer activity, continue to target improved operational leverage and efficiency across all businesses, and to drive the adoption of AI and innovation initiatives for SGH and our business units.

We will continue to pursue accretive organic and inorganic growth aligned with SGH's disciplined capital allocation framework while maintaining a clear focus on long-term TSR outperformance. SGH enters the second half FY '26 with operational momentum and clear strategic priorities.

Our first half performance, together with a balanced outlook across our core sector exposures, supports the reiteration of our FY '26 guidance for low to mid-single-digit EBIT growth. Thank you.

Now open for questions.

good morning, Ryan and Richard. Just a couple of quick ones for me.

I guess just with the result, maybe if you can update us on how you're thinking about that first half, second half skew now. Previously, I think you pointed to a greater second half skew this year versus last year, but just keen to understand how you're thinking about that now.

I think historical, we look at the last couple of years, it's been sort of 56/44. I think in that kind of context, if we have a look at this stage, we expect it will probably actually be relatively consistent this year.

I think it's sort of in the last three years, it's sort of moved around by about 1 percentage point. Whilst I think we probably are seeing it being relatively consistent, Ramoun?

Yes. Great.

Then just another one, if I can sneak one in, just on the M&A, nothing in the press release about the BlueScope bid. It's been six weeks or so since the first approach and subsequent rejection.

I guess just anything if you've got to add there on this call, and then perhaps maybe just M&A in a broader context, and sort of where you're comfortable taking the balance sheet to if a transaction is successful.

Sure. I think probably address those questions a little bit independently.

Maybe start with the last aspect first. What was demonstrated in the half was the strong underlying cash generation of our businesses.

It was pleasing to be able to demonstrate that strength of our cash flow generation, the deleveraging of the business, and naturally we then look to the aspect of growth opportunities. We do feel very comfortable to take on leverage and manage leverage with the strength of the cash flow of our operating businesses.

That again is just reinforced in the half. In relation to the specific question, ultimately, if the board, but really the shareholders, don't see value in our proposal, then frankly we'll move on.

There's other compelling opportunities for SGH. We put our investment criteria quite specifically out there and clearly focused still around industrials, businesses with Australian-centric positions of privileged assets and scale.

We also need to see an opportunity for us to generate a return on our capital. I think we feel the offer at that $29 dividend-adjusted price is fallen fair, and we'll probably say that the bird in the hand versus the execution risk is one where we think the offer should be seen as compelling.

Ultimately, it's a decision for shareholders, all what seems to be in shareholders' hands.

Great. Thank you.

Leave it there.

Thank you.

Hi. Thank you very much.

I just want to ask about slide 7, please, the top right-hand chart. Your ongoing disclosure on the fleet age and things like that is great.

Thank you. I'm wondering whether you see any change to what the attitude of customers with respect to fleet age, and I guess on a three-to-five-year basis, what do you think are the primary criteria that your customers are thinking about with respect to fleet upgrades and refresh, recognizing that you get revenue from both?

How are you seeing your customer activity at the moment?

There's a lot in that question, and I probably need to preface that we've got some large customers that are put in the mix, but each has their own specific strategies. It's difficult to kind of lump them into a singular perspective there.

What I would say is if we look at the fundamental driver of activity for us remains that level of production. If we see across the major bulk commodities, the coal exports in Newcastle have been relatively consistent.

Iron ore exports similarly, we still see those fundamental opportunity drivers as a strong medium-long-term indicator for Westrac. Our customers have made no secret about their focus on adjusting cost structures to deal to what they may perceive as a lower commodity price outlook, but nonetheless, the activity for us is always going to be orientated to that overall equipment usage, which is that production level.

I think that demand profile we still see as providing us confidence going into the longer-term outlook for Westrac. As to decisions on fleet, yeah, I think that we have seen some fleet replacement, retiring old trucks, bringing new trucks, and that was a big part of what played through into the prior year with the completion of some of that large capital sales activity.

We've now got the fleet going through a rebuild process. It's a little contingent on customers.

I think today that they're probably seem less concerned around the fundamental fleet age as a key driver of decisions, and look at it on a pure economic basis as well as a technology basis. That's probably, in our view, going to be one of the key catalysts is what's the next wave of technology from a truck perspective that's going to orientate an opportunity to invest in fleet outside of expansion projects.

We still see a couple of those on the horizon as well. Hope that gives some context to that fleet question.

I'd say that the real key driver for activity for us will always remain that production volume, and we still feel very confident about that outlook.

That's perfect. Very comprehensive.

Thank you.

Morning, Ryan and Richard. Thanks very much.

Apologies. I'm going to drive that question from Scott just a little bit deeper into the economics of the business, Ryan, in the context of capital sales peeling off in this half.

Presumably, the trends remain relatively weak in the short run at the very least, and perhaps into FY '27. Could you give us a bit of a sense of just within the business the economic outcomes of relative sales performance in different revenue streams, and then what you did in an operating context to be able to achieve the margin expansion you did, and still hold bottom-line performance?

How much more of that you have if capital sales continue to peel away?

Yeah. It's always a complex aspect to try and unpick, given the nature of there is degree of operating leverage that comes through capital sales.

We've always said that the aspiration for a high-performing dealer is probably in that 10% to 12% EBIT margin range, and for us, that still remains our objective to be towards the upper end of that, not lower. Mix will play a big part of that.

We have seen a step up in that rebuild demand and activity. We had anticipated that, and we actually spoke to that normalization, that capital sales coming off what was a peaky period, and a step up in some of that rebuild activity playing through into this financial year.

We see that continuing to play out over the remainder of the year and beyond. I'd say that margin range is still right from an expectation perspective, but we definitely have a degree of operating leverage with what we have playing through with that rebuild activity, managing workshop capacity to keep that as busy as possible through in both WA and seeing some of that step up in New South Wales off what was a slower period from deferrals in the first half.

Feel that we should be able to kind of navigate that transition from capital sales to a more intensive kind of services support side.

Great. If I may sneak in just a very quick follow-up, could you give us a sense of what happened to parts pricing in the second half?

Because you were anticipating that to fall?

Yes, it has played through as anticipated. That's played through a little bit, but it's not as material for us in quantum.

We don't have a tailwind there. It arguably is a slight headwind, but not a material move in the half.

Right. That's for second half?

That's for second half, correct. That is, yeah, January to June.

Thanks, Ryan. Appreciate it.

Thank you. Two questions: one for Ryan and one for Richard.

Ryan, when we look at your landbank, right, especially at Boral, how do you think about it over the long term? Do you still prefer to be the landlord, or would you consider being a part owner of any of such future projects?

I'm thinking more on, especially some of the new infrastructure, which is very, very topical. I'm willing to go on that, and then I have a one for Richard.

Yeah. Yeah.

If I thinking through that, from our perspective, if it's an operational asset and a core part of our operating network, yeah, we definitely want to own that. We've found that the lease structure isn't preferable, where possible we actually have gone through to pivot from lease to acquire certain locations in quarry or concrete network, because there is a preference to have a freehold ownership of that site where possible.

That we think is, given the long-dated nature of the opportunity, we have to operate there, and the preference to have that ownership. That's probably the way we think through the land position within Boral.

When it comes to surplus property, and I think that might be the core to your question, we take a highest and best use viewpoint with an emphasis on how can we create value in a long-dated fashion? In an accounting context, if we dispose of the asset, it will sit below the line for us.

For us, if we can retain an ownership and partner and co-develop and have a rental income stream, that is an ideal outcome. Not all land is situated for that type of application.

It really does depend on the situation. In relation to our biggest opportunity, the one spoke to in relation to Ravenhall or Deer Park, that would be one where we are looking to co-develop, and so we would end up with a let's say a notional 50/50 partnership type dynamic, but have a rental income flowing through that.

We feel very comfortable with that, because we're be able to leverage a partner's capability as well as it ensures that we can do it in the most efficient capital manner as well. That's probably the way we think through the land opportunity, but we have to look at what's going to generate the highest and best use and best return, ultimately, for us.

Very helpful, Ryan. Richard, just quickly for you, right?

Just looking at the balance sheet, obviously in good shape. If there is no imminent M&A, right, that can be worked out, is there a view to think about shareholder returns via buybacks, dividends, or you prefer to keep the dry powder for the future?

I think we've worked very hard. If you think about it, we've effectively improved leverage by about $400 million over the last 12 months.

You're right. We have got it down underneath what we'd say is theoretical optimum.

The dividend is actually up 7% effectively year-on-year. We have respected shareholders in making that decision.

Genuinely, Shaurya, I would sort of sit there and say we do see opportunities. We've got a lot of duration in our debt portfolio.

Our funding costs with effectively 70% of our drawn debt being fixed, we're reasonably well-protected to a rising interest rate environment from a leverage perspective. We see ultimately maintaining the capacity to invest and grow the business as being the best way for us to enhance long-term shareholder value.

That's been our experience over the last decade. To be fair, I don't see it changing.

Now, if there was a significant dislocation, we also have the capacity to consider other capital management initiatives, but at this point in time, that hasn't been the focus.

That's super helpful. Just a quick follow-up, right?

You've said you're okay going three times. Is that still the line in sand?

Look, I think from our perspective, it will depend exactly on what we're acquiring. I think Ryan's been very clear with the market over the last 18 months around, I suppose, the attributes of the business that ultimately he would look at, and it would be quality business, but one of those qualities ultimately comes back to the free cash flow generation of that business.

Anything that we buy would ultimately support some level of leverage on a stand-alone basis. The strength of the group is, as we've demonstrated in the half, $1.1 billion of op cash, delever.

The strength of the existing platform gives us the capacity to take on leverage, acquire a business, and gives us time to actually improve the performance. What's been done with Boral is case in point.

We've got that flexibility, and I suppose it's our confidence around through the cycle what the cash flow generation of those businesses has been exceptional. The capacity to toggle capital at Coates, the optimization of working capital at both Westrac and Boral, and the focus of each of those BU leaders on driving those business performance has given us great capacity.

Thank you. Really helpful.

Thank you.

Morning, gents. Follow-up questions just in relation to Westrac.

Ryan, I think around the AGM you were highlighting that there was a degree of maintenance deferral activity, particularly with respect to some of your thermal coal customers. I just wonder if you could give us a bit of an update on that situation, just given the low single-digit volumes which you've seen in the parts and service business.

As a follow-on to that, just given recent improvement in the gold price, copper price, and whatnot, just interested to understand what level of demand recovery or just how you're sort of interacting with your customers with respect to future order activity and whatnot in the gold and copper space?

Thank you, Nathan. That's a theme that certainly has been playing through.

I wouldn't say it's completely resolved, but we have seen a step up in some of that maintenance. If it's maintenance deferral, we don't love it.

We have to live with it and have to work around it. Fundamentally, the activity will continue.

That we've always felt that it plays through, and we've seen some of that step up into the second half, and that's part of the commentary around that outlook. Certainly, in New South Wales, yeah, we do see that activity starting to come back.

I wouldn't say that deferral cost control is completely resolved, but fundamentally seeing some of that activity come through, the number of rebuild programs that Westrac is completing. WA has seen a bit of that come through in the iron ore space now, which are again if you look to the commentary made public by some of the large customers, they are focused on costs, and that again, you start to see some of those decisions around maintenance and deferment, reduce scope of activity on certain rebuilds, etc.

That does play through. We've had a little bit of that theme come through, but not of substantive concern.

Again, we still feel the overall production volume is still going to determine the end opportunity for Westrac over time. The activity across gold, lithium, we have got a number of kind of order and discussions around fleet process and fulfillment of fleet orders now in that space.

It's a different demand process. Again, one of the attributes to think through from a Westrac opportunity is the difference in an open-cut application versus underground, and just the equipment demand required for each.

There probably the difference in how to think about some of that. Seeing the rebound in lithium is positive, and that's certainly played through in some activity.

Gold is good for us, but it really does depend on the type of application: open-cut, that's really where you've got that much larger volume of earth required to be moved, and therefore, that linkage to the opportunity set for us. Overall, I'd say, yeah, it's resource activities, healthy at the moment, mainly from what we're seeing from an output perspective, but there is still an active process working with customers around how they make sure they're as efficient as possible.

Thank you. Finally, just an update on Crux.

Can I just get some insight into how much capital is left to invest there and the phasing around that before we move into production?

We're getting to the pointy end of that, but there's still some substantial kind of capital to work. In our view we think this is kind of an early FY '28 kind of first gas, probably cuspy financial year dynamic, but fundamentally, our focus will be on FY '28.

Effectively, just under 18 months to go in that process. I don't know offhand, Richard, the

I think there's another $150 million to go, and then there's one outstanding issue around walk-to-work vessels, which is being resolved. Other than that, we're at the exciting part of the process.

We're seeing it come out of the water, and top sides will soon be floated down. We're certainly moving into the completion of that project.

Perfect. Thank you.

Good morning, Ryan and Richard. Thanks for taking my questions.

Firstly, I'm keen to hear your view on the outlook for construction activity over the next 12 months across infrastructure and resi. Any color you can provide on a state-by-state basis would be great.

Thanks.

It's It's interesting. We'll have a degree of insight between Coates and Boral and Westrac to a degree, but frankly, our insights, limited to our activity, I don't think I'd say from Boral perspective, we're seeing a pretty strong activity, outlook and overall demand through for us into North Queensland, Queensland, Western Australia, New South Wales, and Victoria remain relatively stable, but overall at at at pretty substantive levels.

Still from a Coates perspective, seeing a strong outlook across New South Wales in in that that construction activity. Victoria feels like it's kind of settled.

It's It's has a base, and hopefully we'll start to see that that grow from there. We haven't yet seen a big step up in that that resi demand, but we are seeing it as a greater portion of that volume come through within within Boral.

Seeing signs of that come through, but not at at the volume that we would anticipate to see that that supply required to meet market. We do see that continue to play through.

The Queensland market's been relatively healthy across infrastructure and resi, and and I'd say similarly across other jurisdictions. It feels pretty It's a It's a It's a good market.

I wouldn't say it's it's elevated, but it's substantially But it's certainly a pretty healthy market dynamic at the moment across the construction space.

Great. That's good color.

Thank you. Second question, just around the Coates margin in the first half.

I see it dropped versus PCP, and that's despite time utilization at 61%, above the benchmark. Understand there is a high degree of operating leverage in the business.

Is there anything else, any moving parts that you can help me piece together just on the weaker EBIT margin? I was kind of expecting it could be over 28% just based on the utilization alone.

Our focus has been on driving utilization, because that is a key requirement for the business. Clearly, it's been competitive, and therefore, that's played through in price.

We need to continue to drive that price leadership value proposition that's always enabled Coates to remain a market leader, and that's been a focus. I'd say the pressure of activity in different markets has had a play through in price, and that's where we've seen time utilization hitting target, our financial utilization behind.

We've really focused on driving that. At the same time, there's been a lot of operational cost efficiencies we've taken out of business, but that factor on price is probably the real factor.

In our view, the more we can do to drive that, that will have a really positive translation to that EBIT margin, because the other cost aspects within the business have been well managed, and we've continued to refine the cost efficiencies. It's just that's been the differential from a margin perspective.

Still, the business is generating close to mid-teen return on capital is still healthy return, and I think it's also worth noting the free cash flow contribution from Coates is strong through the period. We balance that fleet profile to what we think's required, utilization's right, and that utilization's usually your precursor to drive price, and fundamentally, that's been part of the factors.

We are very focused on how we can kind of push that price realization.

That's clear. Thank you.

good morning. Thanks for taking my questions.

I missed some of the call earlier due to a clash, apologies if this has already been answered. I'm just wondering is the $29 adjusted bid price for BlueScope final as well as being full and fair?

Just on that topic, any comments on balance sheet capacity for an acquisition, how far above that target 2.5 times would you be comfortable pushing that to? Thanks.

Look, we think that offer's full and fair. We'd kind of provide that context around that in our view.

That's really up to the board and shareholders to consider the offer, and genuinely think that value today versus the execution risk required is something that should be a compelling perspective. If shareholders ultimately don't see that, we're comfortable to move on.

That's our perspective in relation to the opportunity. In relation to balance sheet, I think yeah, 2.5 times is where we'd like to be, as Richard kind of alluded to this earlier, that ultimately we're very comfortable to go beyond that, just given the cash flow nature of our businesses and our ability to manage and sustain leverage.

We understand the preference around that 2.5 times from a leverage perspective, we do think through that. If stepping above that, we would want to have some comfort around how we get down to that 2.5 times and under just through action that would enable that within a reasonable period.

I think that's probably the way we think about that leverage dynamic, and then from there I think the business' free cash flow would naturally delever. Richard, you had

I completely agree, Ryan. I think we've taken the business to over 3.8 times, but I suppose it is our understanding of the performance of the businesses gives us confidence.

It will be transaction specific, but in terms of covenant headroom and bank support, I suspect the eagerness of the banks to finance this is probably going to exceed our board's willingness to go to that level. When you talk in 3 times, 3 we would be 3 times we would be comfortable, but with a very clear plan as to what we're going to do to bring it back down to 2.5, and that's the absolute strength of the group.

Great. Thank you.

Just a follow-up on the infrastructure and construction environment. How long do you see that sort of air pocket you previously flagged playing out before sort of new demand comes online from projects such as the Olympics?

Thanks.

I think we do start to see that play through, and honestly we take a read on the external data points. Ultimately, it's what the macro monitors and the like who do the detailed work give us confidence about that outlook.

I think we'll start to see that through the kind of the early commencement of activity and civil infrastructure activity start to come through. We're still confident around that.

The Olympics will be a contributor, but I think that there are substantial number of other projects around the country that will continue to drive that infrastructure activity and outlook.

Great. Thank you.

Just sneak in another one in on Boral. Just wondering if you could discuss further the opportunity for cost-out going forward as we approach the mid-teens target, and notice some press on new workplace laws around Boral concrete truck drivers, wondering if that's sort of part of the margin story there.

It's it's for us, there's always a focus on cost efficiency and always a focus on how we can be better. That that is just fundamental to, the way we operate the Boral Way.

It is a a an ingrained culture and how how do we comfortably kind of improve. If you go to the core question, I'd say that the the bigger opportunity for us is is in getting better variabilization of our costs to activity.

If there there are swings and and and movements in that that volume demand, that we can variabilize our costs in a more dynamic way, that is going to drive that margin expansion. It isn't about stripping out costs.

It's about, getting that demand activity matched with, the the business' capacity, and and ensuring that that that is as aligned as possible. That's always has been or has been a key focus for us within Boral.

We're starting to see that work deliver the result, and there's still more to be done across the concrete network, across quarry opportunities, and how we continue to be the most efficient we can be across each each asset. It does, yeah, there are still opportunities.

We do still see that margin expansion occurring over time. Clearly, from these levels, that the next steps in margin expansion start to moderate, but we do see more potential within Boral.

Great. Thank you.

Morning. Just on that Boral commentary, Ryan, can you maybe give a little bit of color?

You've obviously done a good job driving EBIT margin and your EBIT dollar. When we go forwards, do you think that there's an opportunity to deploy organic capital in construction materials?

Or is it more a question of how hard you can run your existing assets?

It's a great question. Fundamentally for us, we definitely see the opportunity to invest in Boral to grow, and we have been doing that.

I'd say when we think about it, it's kind of in that probably semi-organic growth opportunity, but Boral definitely investing in quarries, investing in new quarry infrastructure assets, investing in concrete network either through greenfield or through acquisition, absolutely key priority for us. We're going to grow across different markets.

I think we've flagged the growth we want to make in WA. We know that's an opportunity for us because we're underrepresented from a share of market perspective, we do want to build some sites and grow there, and some of it we've been investing in the business.

The catch-up capital we spoke about is a factor. A lot of that is operational, but a big part of that capital going into Boral is in expanding the opportunity, and we'll continue to do that.

It's a business that we need to retain that discipline. If we do that right, we'll continue to drive growth for us.

In addition to that margin expansion is the ability to kind of grow that network to continue to grow Boral in a disciplined way. That absolutely we feel it's important that we need to grow in an accretive manner, and that's what we look for, and how to complement the network we have, which is it is the best concrete construction materials network in the country.

Excellent. Appreciate the fullsome answers.

Thank you. Thank you.