Thanks very much and hello, everyone. Welcome to our 2026 half-year results briefing.

I'm joined here today in Perth with all of our divisional managing directors and our CFO, Anthony Gianotti. I'll begin, as I always do, with a summary of the group's performance, highlights across the portfolio, and then Anthony will talk through the financial results in more detail, and I'll conclude with some comments on group outlook, and then all of us would be very happy to take your questions.

Starting on slide 4, a slide that will be familiar to most of you, Wesfarmers' primary objective is to deliver a satisfactory return to shareholders. We define satisfactory as a top-quartile total shareholder return over the long term.

We recognize that we can only achieve this if we continue to anticipate the needs of our customers, look after our team members, engage with suppliers in a fair and ethical manner, contribute positively to the communities where we operate, take care of the environment, and act with integrity and honesty. Over the last half, our teams and our divisions have made great progress in each of these areas, and you'll hear about this through the presentation.

Turning to slide 5, the financials. This half, Wesfarmers' net profit after tax increased 9.3% to $1.6 billion.

This growth was underpinned by strong earnings contributions from our largest divisions, including Bunnings and Kmart, alongside significant improvement in our newer growth platforms of lithium and health. I'd really like to thank the managing directors of these divisions—Mike Schneider, Aleksandra Spaseska, Aaron Hood, and Emily Amos what them and their teams have delivered in a challenging operating environment.

Now, our results really reflect strong operating performance and disciplined execution of the group's strategies. Productivity initiatives helped our businesses navigate these challenging market conditions, as higher cost of living pressures continue to weigh on many households.

Our businesses performed well in this environment, making good progress digitizing business operations and using technology to mitigate cost pressures and to keep prices low for customers. Our retail businesses continue to expand their addressable markets and improve in-store space productivity, whilst WesCEF progressed key expansion projects.

As a result of the higher profits, the board has determined to pay a fully franked interim dividend of $1.02 a share, which is a 7.4% increase on the prior year. Overall, I'm pleased that we've been able to deliver strong growth in profit while keeping prices low in our retail businesses.

This reinforces our long-standing commitment to delivering a win-win outcome for customers and shareholders, especially at a time when inflation is persistent. For some businesses, low prices can result in margin erosion, but for businesses such as Bunnings and Kmart, low prices drive sales growth and support operating leverage, with earnings growing faster than sales.

Turning to slide 6, which provides some of the divisional highlights for the half. I'll let Anthony talk in more detail to divisional performance, but I wanted to make a few comments.

All of our divisions, with the exception of Officeworks, grew earnings in the half. The strongest earnings growth was delivered, as I said earlier, by our new growth businesses, namely lithium and health.

These businesses have made good progress in the last half and are still very much at the early stages of realizing their potential. In Officeworks, the earnings decline was largely a result of costs associated with its business transformation program.

These changes are tough to make, and we've shown in the past that we're not afraid to make proactive changes and to take a long-term view to help our businesses realize their potential. We have given the new MD, John Gualtieri, a mandate to make these bold changes, and as one of our most experienced retail leaders, he understands and has driven retail excellence through his roles in Kmart over many years.

John can talk in more detail on the program and his strategies to unlock future growth in earnings. Turning to slide 7.

At Wesfarmers, we recognize the alignment between long-term shareholder value and sustainability performance. The group's TRIFR improved year-on-year from 9.9 to 9.6, with Bunnings delivering continued improvement in performance through its multi-year injury prevention program.

We contributed $59 million in direct and indirect support to communities across Australia and New Zealand. It was also really pleasing to see that group Scope 1 and 2 market-based emissions fell by more than 27% half on half, largely as a result of our retail businesses achieving their 100% renewable energy target in 2025.

This is a significant milestone demonstrating how the group's ambition to build climate resilience aligns with stronger business performance. Now turning to slide 8, you can see the summarized financial performance of the group.

I'll now hand over to Anthony, who can talk to this in more detail and provide more context on balance sheet and cash flow.

Thanks, Rob, and hello, everyone. On slide 10, we've provided details of the sales performance across the group for the half, but I'll speak to both sales and earnings across each of our divisions in a little bit more detail on slide 11.

At a total level, divisional earnings increased 6.8% for the half, supported by strong results in Bunnings, Kmart Group, and WesCEF, and good momentum in Health. In Bunnings, sales growth of 4% was supported by growth across all product categories, operating regions, and in both consumer and commercial segments.

Strong consumer sales growth reflected resilient demand for home repair and maintenance, pleasing performance from new and expanded ranges, and growth in digital sales. Sales growth across all customer types in the commercial segment reflected the strength of the offer during a period in which residential building activity has remained subdued.

During the half, Bunnings completed the rollout of its new warehouse tool shop format, now in 283 stores, which continued to support the higher sales in the tools category. Bunnings benefited from productivity improvements enabled by rostering and supply chain initiatives, and further investment in technology, supporting reinvestment in price, range, and customer experience.

Overall, excluding the net impact of property contributions, Bunnings' earnings increased 5% to $1.39 billion. Kmart Group delivered earnings of $683 million for the half, an increase of 6.1%.

Kmart Group continued to benefit from its strong value credentials and the uniqueness of the Anko product range, delivering growth in customer numbers. Product innovation in Anko's one-up and two-up price tiers generated strong customer demand, with home and general merchandise categories performing consistently well over the half.

Higher sales growth in Kmart was partially offset by lower sales in Target, which was impacted by more difficult trading conditions in apparel, particularly in seasonal categories, and the forced closure of a Target distribution center in Queensland due to a severe weather event, which impacted availability. The earnings result was supported by disciplined pricing and inventory management in a competitive environment, and an ongoing focus on productivity, which mitigated cost of doing business pressures and supported margin.

WesCEF's earnings increased 18.1% to $209 million, benefiting from a positive contribution from the lithium business for the first time. In Chemicals, earnings were broadly in line with the prior year as lower ammonia earnings were offset by ammonium nitrate, which benefited from strong WA mining demand.

In Kleenheat, earnings decreased due to a lower Saudi CP price, while fertilizer earnings benefited from improved margins. In Lithium, earnings of $6 million reflected strong operating performance from the mine and concentrator, with the plant achieving above nameplate capacity towards the end of the half, as well as a more favorable pricing environment.

Following the achievement of first product at Covalent's lithium hydroxide refinery, commissioning activity has been pleasing, with the refinery producing high-quality product, demonstrating that the underlying process is operating as intended. Production ramp-up has been affected by intermittent odor issues, with engineering works to address the issue underway and due to be completed by mid-calendar year.

While the ramp-up continues, excess spodumene concentrate is being sold profitably. In Officeworks, sales increased 4.7%, while earnings of $68 million were $19 million below the prior corresponding period, in line with our previous guidance.

As Rob's already mentioned, during the half, Officeworks commenced a significant transformation program as it transitions to a low-cost operating model to support low prices for customers and long-term earnings growth. Earnings were impacted by $15 million in one-off costs associated with the program, largely reflecting restructuring activities and ERP-related costs.

The balance of the earnings decline on the prior year was largely driven by clearance activity, completed to support the introduction of new and expanded product ranges, as well as lower sales in the furniture category. In the second half, the transformation program is expected to continue, with a further $25 million in one-off costs, reflecting continued restructuring activity and higher ERP spend.

Importantly, successful execution of the program will structurally lower the cost base and provide a foundation for improved performance, with benefits to positively impact earnings in the 2027 financial year. At Wesfarmers Health, earnings of $38 million included $7 million of amortization expenses.

Excluding these expenses and restructuring costs in the prior period, earnings increased 9.8%. Priceline Pharmacy's headline network sales increased 14.4%, supported by network expansion and a strong customer response to key initiatives executed during the half.

These included the promotional campaigns, investment in everyday value lines, differentiated skincare and beauty products, and an expanded private label range. MediAesthetics delivered profitable growth, supported by an improved operating model following network consolidation, and Digital Health maintained strong momentum, driven by growth in InstantScripts services.

Wholesale delivered a material improvement in performance, supported by new customer acquisitions, increased volumes from existing customer pharmacy partners, and continued demand for weight loss and high-value drug categories. In the supply chain, lower costs per unit were supported by increased automation in the DC network and the delivery of productivity initiatives.

In Industrial and Safety, excluding Coregas, revenue increased 1.3% to $869 million, supported by Blackwoods' growing share in a challenging market. Earnings were broadly in line after adjusting for $7 million of restructuring costs in the prior corresponding period, supported by proactive actions taken by both Blackwoods and Workwear Group in the 2025 financial year to reset their operating models and reduce their cost base.

Pleasingly, Workwear Group secured new strategic customer commitments in the defense sector, with these commitments to commence in the 2027 financial year and expected to support improved financial performance. Turning now to slide 12.

Our other businesses and corporate overheads reported a loss of $71 million, which was a $17 million improvement on the prior corresponding period. The key driver of this improvement was upward property revaluations in the BWP Trust and the contribution from BWP increasing from $35 million in the prior corresponding period to $52 million in this half.

Group overheads increased by $8 million to $86 million, while other corporate earnings were broadly in line with the prior corresponding period. Other EBIT includes our continued investment in OneDigital, including the OnePass membership program, the group's shared data asset, and retail media network.

This investment was slightly higher for the half, reflecting the establishment costs for the group's retail media business. As noted previously, the benefits from these investments through incremental sales and earnings are reported through our divisional results.

Turning to working capital and cash flow on slide 13. Our divisional operating cash flows were broadly in line with the prior corresponding period, and divisional cash realization remained solid at 103% for the half.

The divisional cash flow results reflected disciplined net working capital in WesCEF, which was partially offset by Bunnings' investment in working capital to support the rollout of its new tool shop format and further category expansions. At a group level, operating cash flows decreased 3.3% to just under $2.5 billion, primarily due to higher tax paid.

Free cash flows increased 35.6% to $2.75 billion, largely due to the proceeds received from the sale of Coregas and the sale of Wesfarmers' 100% interest in BWP Management Limited, which occurred during the half. Moving to capital expenditure on slide 14.

The group invested gross CapEx of $619 million during the half, which was 4.2% higher than the prior period. The increase reflected further investment in new omnichannel supply chain facilities in both Kmart Group and Officeworks, partially offset by reduced spend in WesCEF following the completion of the construction of the Kwinana lithium hydroxide refinery in the 2025 financial year.

Net capital expenditure decreased by 44% to $311 million, after allowing for the BPI sale proceeds of $274 million. For the 2026 financial year, we're expecting net capital expenditure for the group, excluding BPI sale proceeds, of between $1 to $1.3 billion.

Turning to balance sheet and debt management on slide 15. Following the capital return to shareholders which we executed at the end of the half, the group's balance sheet continues to provide significant flexibility and capacity to support investment in growth and productivity initiatives.

Net financial debt increased to $4.9 billion, following the distribution of $1.3 billion in fully franked ordinary dividends and a further $1.7 billion associated with the capital management initiative. We continue to actively monitor the group's debt mix and manage our exposure to variable interest rates.

The average cost of funds for the year decreased from 3.8% to 3.6%, and the weighted average debt term to maturity remained at 4.5 years. Other finance costs, including capitalized interest, decreased 14.4% to $83 million for the half.

The reduction in finance costs reflected the lower cost of funds and a lower average debt balance throughout the period. Higher net debt as a result of the capital management initiative paid in December will result in higher average net debt and higher finance costs in the second half.

While Wesfarmers' debt-to-EBITDA ratio increased from 1.7 to 1.9 times, we retain significant headroom against key credit metrics, and we've maintained our strong investment-grade credit ratings with both Standard & Poor's and Moody's. The group retains considerable funding headroom, and at the end of the half, we had available committed unused bank financing facilities of around $1.3 billion.

Finally, to shareholder distributions on slide 16. As you've previously noted, the capital management distribution of $1.50 per share was approved during the half and paid in December.

This distribution is consistent with our shareholder focus by providing surplus capital back to shareholders in a tax-efficient way and has enabled a more efficient capital structure while still maintaining balance sheet capacity to take advantage of opportunities as they arise. As Rob mentioned, the board has determined to pay a fully franked interim dividend of $1.02 per share, and this is consistent with our dividend policy, which has regard to available franking credits, our balance sheet position, credit metrics, and our cash flow generation.

In line with our recent practice, the group does intend to purchase shares on-market to satisfy shares issued as part of our dividend investment plan. I'll now hand back to Rob to cover off on outlook.

Thanks, Anthony. Turning to slide 18.

Before we discuss the outlook, I wanted to make three points on how the group is well-positioned to deliver on our objective. First, our portfolio of high-quality businesses offers a unique combination of growth and resilience.

Our retail divisions have broad customer appeal, strong value credentials, and a demonstrated capacity to scale. Our globally competitive industrial businesses provide key inputs to strategically important industries.

We're well-positioned to benefit from growing demand in the health and lithium sectors. Second, we are accelerating the execution of long-term growth and efficiency opportunities across the group.

We're expanding addressable markets, investing in store networks, leveraging omnichannel assets and capabilities, and progressing capacity expansion projects in WesCEF. Finally, the strength of our balance sheet supports continued investment across the portfolio and helps us remain agile in responding to risks and opportunities that arise.

Turning to slide 19. I wanted to spend a couple of slides just outlining a bit more how we are looking to accelerate our growth and productivity agenda before turning to the outlook.

I think this is particularly important given our aspirations to deliver a top-quartile TSR, that accelerating our growth opportunities is critical, but also in the current inflationary environment we face in Australia, accelerating productivity benefits has never been more important. Over the last 5 years, many of you have heard us talk about our elevated focus on productivity, and many productivity benefits achieved to date have been through digitizing business processes.

While this has been successful, new technologies such as generative and agentic AI create an opportunity for us to accelerate our progress. The great news is that this isn't about reinventing our strategies.

It's about executing our existing strategies much faster at a lower cost while delivering better outcomes for our customers and teams. This slide outlines the areas where we see the most opportunity, areas we talk to you about all the time.

I'm excited about how we can use this to extend our EDLP leadership in our retail divisions to support customers and grow earnings, since in a world of agentic commerce, value will continue to be a point of differentiation. There are understandable concerns in the community about the implications of new technologies to people's jobs, their data, and the service they receive from companies.

We're very mindful of the high levels of trust that the community and our teams have in Wesfarmers and our brands. Our approach will very much be driven by the principle of people-first, digitally enabled.

People-first recognizes that it's our team that will lead the changes, and we will always put our teams, customers, and other stakeholders at the center of decision-making. We're investing to train all 120,000 team members so they can be part of our journey.

Their judgment, teamwork, and empathy will continue to be a point of competitive advantage. Importantly, we'll also adopt a responsible approach to AI through data governance.

Digitally enabled acknowledges that the acceleration of our strategies will occur by leveraging investments in technology as well as the strategic partnerships I mentioned. Our approach is very much consistent with the Wesfarmers operating model.

Our divisions are responsible for implementation, owning delivery for their customers and teams, and we've already seen great progress across our divisions. Then with the support and access to common technology and tools through OneDigital and our strategic partners, all with the shared objective of delivering satisfactory returns to shareholders.

Turning to slide 20. This slide sets out our current areas of focus and the KPIs and outcomes associated with the areas of focus as we leverage these new technologies.

As you can see, it's all about enhancing customer experience, supporting team member productivity and engagement, and driving long-term earnings growth. We've highlighted a few of the opportunities that are already in play across the group.

We'll be talking more about this at our strategy day, but I just believe it's a very important point to emphasize in the current environment as we look to accelerate our growth and productivity agenda. Now turning to the group outlook on slide 21.

We recognize the impact of inflation and the recent increase in interest rates on households and businesses. In this context, our retail divisions play an important role in the community with their commitment to offering everyday low prices.

Their focus and progress driving productivity allows us to deliver market-leading value whilst also delivering returns for shareholders. At a macro level, Australian consumer demand is solid, but cost of living pressures are being felt unevenly and continue to impact many households.

Uncertainty regarding the outlook for inflation and interest rates is also affecting consumer and business sentiment. While operating expenses continue to weigh on business confidence and investment.

Looking ahead, our retail divisions are very well-placed to drive profitable growth, supported by strong value credentials, expanding addressable markets, and continuing to focus on the customer experience. As I've said, there are many areas within our control to accelerate growth and productivity.

For the first 6 weeks of the second half, the group's retail divisions continued to trade well. Bunnings and Officeworks' sales growth were broadly in line with the growth experienced in the first half of the financial year, and Kmart Group's sales growth was stronger compared to the first half, supported by its ongoing commitment to value.

Turning to lithium and WesCEF, as Anthony mentioned, the Covalent lithium joint venture's refinery is producing high-quality hydroxide, and we're excited to report positive earnings from our lithium JV for the first time. The production ramp-up is expected to be extended for the refinery, with work underway to address the intermittent odor issues that were mentioned.

In the meantime, WesCEF has the flexibility to sell spodumene concentrate in excess of refinery requirements. Based on customer contracts for the majority of our spodumene in the second half, earnings in the second half are expected to be profitable and slightly above the first half.

The Health division will continue to build on its strong momentum, focusing on accelerating growth in its consumer business and expanding on recent gains and improvement in wholesale. Across the group, the divisions will maintain their cost discipline and continued driving productivity to mitigate inflationary pressures, which enables us to provide low prices for customers and deliver shareholder returns.

We remain committed to investing to strengthen our businesses and accelerate the growth and productivity agenda I mentioned. With that, we'll now be very happy to take your questions.

Oh, hi, Rob, Anthony, and team. I think the rise in currency at the moment's quite topical, I was just hoping the key businesses could talk to how these benefits may flow after hedging, how you're looking to balance maintaining these benefits for EBIT versus passing them on to customers, given it's still a very competitive environment.

Thank you.

Thanks, Adrian. I might get Alex and then Mike can add some additional comments.

Thanks, Adrian. Obviously for us, a stronger Australian dollar is always helpful.

The one thing to remind us all about, though, is the fact that we have a pretty clear hedging policy in place, we tend to hedge up to 18 months in advance for our US dollar purchases, which means the spot rate improvements that you see in the market take some time to flow through our P&L. However, clearly it's better to have that as a deflationary outlook than not.

We tend to think about it within the overall mix of our margin profile as well, it's one factor which impacts amongst other things like the raw materials, imports, and our CODB inflation, and we're always looking at it in the context of our pricing policies as well. To the extent that it provides opportunities to continue to invest in lower prices for our customers, that's absolutely our priority, and you've already seen us talk about increasing our level of price investment as we head into the second half.

We've recently dropped prices on just over 1,000 products across Kmart, which we think is really important in the current environment as customers are really really focused on value, and we think, particularly in the current interest rate environment, that continues to be really important as part of our overall pricing strategy.

Adrian, just to sort of build on what Alex said, very similar perspective from the Bunnings global sourcing point of view. That's sort of accounting for around about 30% of our range, but incredibly focused there on entry-level products and commodity products, the real focus on value is strong.

Slightly different for our supplier base, and obviously we just continue to work with them because hedging policies will vary supplier to supplier, but always looking for opportunities to extract value from that to both drive our productivity agenda, but also support our customers.

Thank you.

hi, it's Shaun Cousins here, sorry. Just a question for Alex just regarding Kmart.

Revenue growth slowed from, I think, at the AGM running in line or thereabouts with the second half '25, which was 5%, that's say the first 17 weeks, and it's down at 3.2% for the half. Just some questions on the back of this.

While I don't expect you to break up the sales sort of by week, but did sales grow in the remainder of the half or did they fall? Then could you maybe specifically for Target, could you break down the relative impact of that?

You've called out apparel and the DC closures. Did Target revenue grow in the first half or did it fall?

Then regarding Kmart, was growth negatively impacted by competition from peers like Temu and Shein, and how did the supply chain handle that? Just Kmart was running at a good rate and the result on a revenue line was stepped down, just curious around the outcomes and digging into that, please.

Thanks, Shaun. There's a bit in that, I'll try and go through each of the individual components.

Clearly, Q2 step back for us relative to Q1 and the trading update we provided at the AGM. There's three key drivers of that.

The first one, which we've talked to, is on the 28th of October, we lost the Queensland DC for Target. Now, that impacted not just availability within Queensland, but also across the entire East Coast because we were down to one DC in Victoria really trying to service all of the East Coast.

It really did have quite material impacts on our availability in our key trading period for Target. The second component is we really saw a later start to summer relative to the prior year, and so our performance in seasonal apparel categories was impacted in the second quarter.

Target received a disproportionate impact of that just given the nature of the product mix within the Target business. Then the third factor I'd talk to is if we look at that November period in particular, it was highly promotional from a market perspective, and I'd say we saw kind of longer, deeper discounts running within the market.

Now, our model is not to participate in that. We're very focused in terms of everyday low prices for our customers throughout, and so while we maintained good pricing disciplines over that November period, that contributed to good profit conversion for our business, but it did impact our sales.

They're probably the three impacts in Q2. If I talk to the positive within that, our Kmart performance was good throughout the half and, as we mentioned, we saw a really strong customer demand for our one-up and our two-up categories in particular.

The extreme value that we continue to provide in those price tiers is really resonating strongly with our customers and that delivered good growth throughout the half and into that key December Christmas period where customers really responded to our value proposition. Our home and general merchandise categories again performed consistently well throughout the half, and if you look at our trading update, we've talked about the first 6 weeks of this half.

Now, always cautious to extrapolate from 6 weeks, it's a short trading period, but our trading momentum has improved and apparel has been a key driver of that. Specifically to answer your question of was Target positive or negative in the half, the DC impact was quite a material one on Target.

If you were to exclude the impact of that, the business was broadly flat year-on-year in terms of sales growth for the half, but the availability issues did mean our sales for Target were below the prior year.

Understood. Thanks, Alex.

Good morning, everyone in Perth, and afternoon elsewhere. Just a question on Bunnings.

We've now had about 5 years of average sales growth running around 4%, and that's a period where you had a couple of fairly substantial and successful product or category launches, as well as the relaunch of the tool shop. Through the cycle, would you hope to grow sales faster than that or is that a reasonable mid-cycle type growth number?

At sales growth of around 4%, is that enough to consistently get some operating leverage through the system or does it get difficult maintaining or growing margins with that backdrop?

Thanks, Michael, and great question. On sales, obviously we are absolutely committed to growing the top line, and I think that the investments we've made in expanding our addressable market both from the core, if you think of categories like tools, but also through adjacent categories and new growth categories, I think that's been a real hallmark of our ability to continue to sort of broadly outperform the market as we see it.

The thing to bear in mind is the period that you've sort of described has also been, it's very similar from a very flat to challenging commercial environment, and I think our ability to successfully grow commercial sales in that environment is a real credit both to our sort of merchandise and sales teams. I absolutely believe that, as the housing market recovers, we are incredibly well-positioned for quite significant growth on the commercial side of our business.

I think it just underscores the incredibly resilient business model that we've developed at Bunnings, that mix of discretionary and necessity across both consumer and commercial. On leverage, the short answer is yes, but the longer answer is that it absolutely remains a balance.

Fundamentally we have to earn the right to be chosen by our customers. They deeply deeply understand value, and there's absolutely no room for any trickery in that, as we know.

We're doing that through enhancing and expanding our offer. Our teams are buying better through our supplier partners, and our global sourcing program continues to ramp up, which is really exciting for us.

We're also investing significantly in price, in the half just completed, we invested over $120 million into price, which is quite up on about the $108, $109 million from the prior corresponding period. The reason we can do that, Michael, is because our productivity agenda is really diverse and it's giving us the opportunity to make those investments and continue to deliver through our productivity agenda to the bottom line.

When we think about that, our store productivity changes, supply chain support centers, which I know Rob touched on, are all working really well, but there's lots of runway still to come with those, and with technology powering quite a lot of things there, we're really excited by that. At the end of the day, we remain absolutely focused on our customer.

We know we've got to continue to expand addressable markets, and come strategy day, I think we'll be able to sort of share some quite exciting changes in the way we're thinking about a couple of core categories, but also some new growth categories as well. I think we've got a really great track record on delivering that over the period.

I'm confident in our long-term growth outlook from a total earnings point of view, but it really does come back to making sure that, when it comes to winning the customer, we're well-positioned for that, because without that, the rest becomes very difficult.

That all makes sense. Thank you.

Hi, Rob. Rob, I think Alex and Mike have explained beautifully issues in Kmart and Bunnings, I think that's really well-covered.

Can you describe now what's going on in Officeworks? Can John give us a bit of an overview there?

Because I must admit, when you look at JB Hi-Fi's performance and that, they're really doing very, very well. It looks like Officeworks have been left behind.

Now you're trying to get it on a low-cost model, transition to a low-cost model. What's the game plan with Officeworks at the moment?

I don't quite understand where you're at, how long it's going to take, and as a bit of a follow-up, these productivity initiatives that you're trying to drive, whether it be in Officeworks or whether it be in your other businesses with all this AI, is that an impediment to earnings or is that a tailwind to earnings? When I say is an impediment, this transitions that you're having to do, whether it be in Officeworks or other transitions, I was listening to Mike, I'm just worried that all this new technology that's coming on, you're wearing costs in your businesses rather than enjoying benefits from this transition of new technology.

I don't know if you understand the question there, but I'm just wondering is one thing that's holding you back a little bit is you're wearing more costs in transitioning than you're actually benefiting from the new technology coming in?

Sure, David. Look, I'll answer the Officeworks question and then I'll let John talk to it in more detail, and I'll also touch on your question around costs of transition around leveraging these new technologies.

Look, coming back to Officeworks, over the last 5 or 6 years, Officeworks, I'd say it's performed okay. We've grown our earnings, we've obviously grown the business, we now have a greater business in the technology category, but the reality is that we see a lot more potential in Officeworks, and there are areas where we felt Officeworks was lagging behind our other market-leading retail businesses.

A low-cost operating model is part of it. It's not the only part of it.

There are other aspects of merchandising processes, digital engagement, ranging, new categories that go to the broader offer, and I'll let John talk to all of that. Look, I want to give John a bit of a leave pass just for the moment that one of the things that we have shown over the years, David, as is we're not afraid to lean in and make proactive changes where we see an opportunity to step-change performance.

I've given John the license to go hard, make the changes that he needs to, not to be overly focused on short-term earnings, get through what you need to get through this year to really set the team and the business up for the future. Look, John's halfway through that process, he'll talk more about it at the strategy day, he can give you a bit of an update now on how it's progressing.

Look, I'll let him talk to relative performances and how he's thinking about technology, but we're making these changes because we see opportunity and potential. The final point, and look, when we get to the other divisions, we'll be able to talk more specifically to how they are leveraging technology to accelerate their productivity agenda, and once John's answered the Officeworks question, I might let Mike just give some practical examples for you.

One of the really exciting things about what's available with new technologies and what's available through our strategic partnerships, David, is that it's not large CapEx, super large costs of investment to drive the change. We are able to leverage quite cost-effective solutions here as part of our strategic partnerships.

We've been able to negotiate some very competitive terms and rates, and also access to investment funding and expertise that's not otherwise available in an Australian context. Look, we'll be able to demonstrate to you how this is flowing through to improvements in the business.

We were very deliberate in putting that slide in our pack showing you exactly what the KPIs are that we are working towards, because quite frankly, if we cannot see the commercial value of these initiatives, or if we cannot see a discernible benefit for our customers, we won't be doing it. I'll now hand over to John, and then after that, I might let just Mike talk to some of the more practical opportunities on the technology side.

Thanks, Rob. Thanks, David.

Coming into the business with a fresh pair of eyes, I see significant opportunity for the Officeworks business to really realize its growth potential and bring performance up to retail best practice. The opportunities are clear.

It's transforming our tech offer and service model, scaling our B2B and education, and also strengthening the omnichannel customer experience. For us to unlock these strategies, we really do need to kind of transition to that low-cost operating model, and it's important for two reasons.

The first is to provide low prices for customers, and they really are looking for low prices at the moment. The second is to support more substantial earnings growth over the longer term.

With the transition, which we've started in half one, it's got many different elements, but probably the first have been the restructuring activities to reset the cost base, and that's really focused in on simplifying the business and it's been focused at above-store, replacing the ERP to improve efficiency. Our ERP is over 20 years old, and by replacing that, it does create a whole lot of efficiency moving forward.

Strengthening the talent and capability, constructing a new automated DC in Queensland, which will actually help with throughput and lower cost of throughput over time, but also improving sourcing and expanding branding as we move forward. The major work that we did in half one was around restructuring of the support office and simplifying, it helps us remain competitive for the long term.

The new ERP, about the operational efficiency, and also the distribution center that I spoke about. I think if I just focus a little bit on I guess technology and how we're going to compete in technology, we've made good progress on our strategy to transform the tech offer, and there's a whole lot more that we need to do in this space to actually become retail best practice.

Today, our sales are made up of around 60% in the category of technologies. We've got a right to play.

We see strong growth in coming years as homes become more connected. Today, there are about 22 connected devices in the home, and over the next 5 years, that's going to double to 44.

There's lots of room for growth. As I said, the only way that we're going to be able to achieve the results that we require is structurally lowering our cost base to actually be able to deliver I guess a more sustainable model, but also lower prices to our customers.

Sorry, David, I'll give you the opportunity to follow up if you had any clarification questions for John before I hand over to Mike.

No, it just seems like it's the starting of a journey. That's probably the only clarification.

It's a journey that you're committed to it and it might be just you're going through this period where you just have to reinvest back into the business. That's what I thought answered it excellently, but it just looks like it's a journey rather than a one-off.

That would be my only clarification.

Look, I think that's right, David. I think just the point I'd mention from a portfolio point of view is we definitely share John's optimism about the opportunity here.

We do see this is a business across technology, office products, education, arts and crafts. It's a very broad market, and we really want to go after this with some intent.

We want it to be a best-practice operator. Look, time will tell, but you'll be able to track the performance in the coming halves.

I might hand over to Mike just to get to the practical issues to your question around AI and so forth.

Thanks, Rob, and hi, David. As Rob said, they're not insignificant costs, but they're not huge costs when we start to think about the transition to AI deployment.

Really, from a Bunnings point of view, that's largely built on what's getting to close to a decade of really high-quality disciplined work to develop the architecture, the tools, the systems, the process, and the training to be able to accelerate the things we want to do. We've moved beyond AI experimentation into scaled deployment right across the enterprise now, and that approach combines traditional AI, machine learning, generative AI, agentic AI workflow, and low-code automation.

All of that continues to drive our really deep productivity focus, and to the sort of response I gave Michael earlier, it's giving us a lot of confidence around how we can continue to drive productivity and obviously leverage. We've got team member productivity tools like our AI price markdown tool, which has now been integrated into internal apps.

That's saved our team around about 100,000 hours of duplicated team effort, helping to simplify what we do in stores and allow our team to focus more on serving their customers. Our team chatbot is live across our store network.

In the half just finished, it's answered close to 100,000 questions, reducing team time for looking for policies and procedures and the like. In our support function, we've got 620 or so live agents, 95% active Copilot usage across support functions.

Rob touched on this focus on training earlier, we're really committed to that. You'll have seen, no doubt, in our Bunnings app, the Bunnings Ask AI, which is allowing customers to have conversations with our app, and that's helping to drive the really strong lift that we've seen in our online performance in the first half.

We're trialing some things in AI for our trade customers, and we'll share that at strategy day. I think if you sort of thought 10 years ago Bunnings was sort of the slow learner in the digital space, we're right at the forefront now of launching with Google our AI platform, Gemini Enterprise for customer experience, which will really allow us to play in the agentic commerce space and really be one of the first retailers in Australia to be able to do that.

I think you can sort of see the leapfrogging work that's there, but they're very practical, tangible examples and we'll be driving that really hard in the years ahead.

Thank you, all. Your answers are really really impressed, and it's great to see a company really driving for the longer term rather than just trying to meet short-term earnings hurdles.

Thank you all for your answers. Excellent.

Thanks, all. One just back on Bunnings as well.

Just trying to understand the shape of the sales growth. I think Michael mentioned earlier about the tool shop and there was obviously a meaningful change within the stores.

I'm just looking at your bricks-and-mortar growth at about 2.6% in the half. I'd be interested in terms of the phasing that you saw from the tool shop in the PCP, I recall it was about 49 stores completed in 1H '25.

I think that might have been towards the back end of the half, but I'm not sure. I'd just be interested if you strip that out, what growth would look like, because you're about to start cycling it and I do look at that as probably one of the more meaningful improvements you've seen from a bricks-and-mortar perspective in the Bunnings stores for some time.

I'm not sure if you can shed any light on that dynamic.

It's a good question, Bryan. Look, I think it's certainly going to play an important role for us, and I think it demonstrates to our team, to our customers, to our suppliers, we can really innovate within existing space and space productivity and stock turn in there's been great.

The partners that have had the confidence to really back us like Makita and Stanley Black & Decker have reaped really significant benefits, and it's really given us credibility with the trade as well, I think. The pro customer is really responding very strongly to that.

I think there's going to be still some time to sort of understand what it looks like on an annualized basis, but I'd actually sort of reflect on the fact that if you looked at our barbecue, outdoor leisure category this season, it was really strong. Our festive performance was really strong.

Our automotive launch has been really pleasing. We're gearing up for round 2.0, which will launch from around about March with some great new brands coming online.

I do think it's a bit of a full-court press across the warehouse. Noting, as I made in my comments to Michael earlier, the continued challenge of commercial.

It's continuing to grow, but it is softer, and we're really anticipating some great opportunities as the housing market recovers.

Just as a quick follow-up on that. Is the tool shop continuing to grow, like where you did some of those earlier ones?

Are they continuing to penetrate in as trades or those that are sort of after that more premium experience from a tool perspective? Is there still growth underlying coming through or is it a step-change and then you just cycle over it and then that growth kind of goes once we get to, say, 2H '26?

I don't think that's going to be the case, Bryan. I think we've not only seen power tool growth, we've seen tool accessories and those sorts of things grow, because I think as I touched on it at strategy day last year, we took out automotive from the tool shop, that gave us the opportunity to introduce over 1,000 new SKUs in there, and our merchandising team never stands still.

They're always focused on new products, new categories. We'll have a couple of really interesting things to talk about in terms of brand and expansion come strategy day.

Constant renewal and evolution, particularly in our core categories, is a really really sort of deeply ingrained, disciplined at Bunnings.

Great. Thanks.

Oh, g'day, guys. Just a couple of questions on the Health division.

Firstly, yeah, just that the 14.4% growth, is that mostly comp growth? Then second, can you maybe just help us understand what's driving that?

Obviously GLP-1s are a popular one, but maybe growth outside of that particular category, please?

Sure, Tom. Thanks for the question.

That 14.4% is the Priceline headline sales number. We haven't traditionally released our like-for-like sales growth, but what you can assume is it's a couple of points behind that.

We're really pleased with the growth of Priceline in the half, really driven by a couple of things: the investment we've been making in the overall value proposition, and I would say some very strong execution of key promotional activity and the introduction of expanded and new ranges. We've benefited from network growth, we've also benefited from strong performance from refurbishments.

We've invested over the period in value, so that's everything from price reductions to enhancing benefits for our members in loyalty program, an expanded private label offer. This ongoing investment that we've been making in our value proposition is really starting to resonate.

I think the thing to note in that number is we're a full-service community pharmacy, it's not just, for example, the beauty range that's performing well, it's health and beauty are growing kind of in equal amounts. One of the ways that we've really been differentiating ourselves is this investment in health, everything from products to a very significant investment into women's health with the menopause campaign.

That's resonated really strongly not only with our customers, but also with our franchise partners. Every part of the shop, if you like, from the dispensary to the health category to the beauty category, is in growth.

From a dispensary point of view, whether it's in Priceline or wholesale, weight loss drugs are definitely driving growth. If your question is, is all the growth as a result of weight loss, it's not.

In the wholesale business, weight loss drugs are definitely in growth and they're definitely contributing positively right across the industry. When you look at medicines, a couple of years ago we had strong growth in COVID antivirals, we're now seeing these weight loss drugs start more than compensate for the loss of that.

I think the nature of drugs is that new drugs come in and others go off, sort of roll off, but they're clearly here to stay and they definitely are driving some headline growth right across the industry.

Thanks, Emily. Can I also just touch on Infinity, and just how I guess confident you are that you'll retain those stores in the Priceline network?

I think, look, it's really hard to speculate on what's going to happen. We'd worked really for a really long time with the Infinity Group to help them get themselves back into a better financial position, but at the end of the day, they took on sort of too much debt and we really lost trust in their ability to resolve the issue.

There's a really transparent process being run by the administrators. The important thing to note is that the stores are trading, they continue to trade, and our franchise agreements remain on foot.

You can see from the results today that Priceline Pharmacy and the brand is really resonating with franchise partners. We're comfortable kind of with our overall position, but we're not going to sort of speculate on what's going to happen because we're just sort of midway through a process at the moment.

Great. Thank you very much.

Hi, Rob, Anthony, and team. Another question on Kmart Group and appreciate some of the shorter-term commentary a bit earlier.

Just wanted to come back to some of those key categories you called out at the strategy day last year and how you sort of feeling about the opportunity there and any product development that's happened over the last few months. Particularly kind of the apparel, general merch, and home and living were called out as some pretty meaningful opportunities.

Any updated thoughts or how you're feeling you're tracking towards taking a greater share in those categories would be great, please.

Thanks for the question, Caleb. Look, I think if I look at our results through the half, what it has done for us is it's reinforced just the strength of the Anko product development capability, and we continue to be able to leverage that to extend our ranges in existing categories, to enter new categories, as well as to continue to deliver really extreme value for our customers, as I mentioned, at those one-up and two-up price tiers, which we're seeing really strong demand for.

The strategic categories that we've been talking about in terms of whether it's youth apparel, cleaning, furniture, kidult, we continue to see really strong growth within those over the half, and I think that reinforces our confidence around our ability to continue to grow the addressable market as we move forward. I think the thing I'd add to that is we still see quite considerable opportunity to continue to grow our share of wallet with our customers as well within the existing product ranges.

One of the things that we talk about historically is our ability to drive cross-shop across key departments, and we know that our average customer shops far fewer departments than our best customers do. What I've been really encouraged by is the performance that we've seen out of our plan C+ stores, where we're seeing really good items per basket and transaction growth, and this is really being driven by a high level of cross-shop within the store.

I'm confident that through the store investments we're making, we're finding ways to unlock the opportunity for customers to explore more of our range. Online is another one.

It's a really big part of our strategy. We know our online market share is considerably below our total market share across all of the categories that we participate in.

We're seeing good growth. We're investing quite heavily to improve the customer experience.

We've still got a way to go on that, whether it's through fulfillment or just our digital experience, but our customers are responding well. We continue to grow the number of omnichannel customers we have, and what we do see is when customers interact through one of our digital channels and, in particular, with our app, the in-store sales growth increases subsequent to that.

Again, customer share of wallet through our digital strategy is really key for us. Then the last one I'd mention would be our marketplace which saw us also launch Target on kmart.com.au.

Very early days, but we're pleased by the early performance of that. It's allowing us to further extend our addressable market into branded product categories where brands are important, but it's also actually seeing customer acquisition continue to be driven by that.

It's been quite interesting to see the performance of Target on Kmart, where we've been able to see a large proportion of the customers that are shopping Target on Kmart are new to the Target brand, and they are now shopping the Target brand more frequently than they were before. Across a number of our strategies, we're very focused on growing our addressable market in totality through our product development capability in Anko, but secondly, continuing to grow our share of wallet within the existing product categories that we participate in as well.

I hope that all covers your question.

That helps. Thank you, Alex.

Appreciate it.

Hi, Rob, Anthony, and team. I just wanted to explore the topic of operating leverage essentially, particularly as it relates to Bunnings and the Health division.

With Bunnings, the EBITDA margin excluding property was down slightly. You talked about that price investment, which I've calculated at about 17 basis points.

Are there any other margin headwinds we should be cognizant of in that Bunnings business? The question for Health is fairly similar.

Ultimately you had 8.4% sales growth, 9.8% EBIT growth adjusted for the amortization and restructuring, it's a little surprising there wasn't stronger leverage in that business, too.

Craig, it's Mike. I'll kick off and then hand to Emily.

As I said to Michael earlier, we've got an array of tools and sort of hopefully, when you heard my answer to David was, similarly on the AI front, there's an enormous range of things now starting to drive productivity, and we see particularly in the work that we're doing in supply chain, some significant productivity improvements, right through the supply chain from inbound supply chain in the way we flow stock to stores and freeing up labor and making it safer and more productive for our team through to outbound with our investment in rapid fulfillment centers and the work we're doing with delivery partners. On a sort of a margin front, we continue to work hard to identify the products across our network that make more sense for Bunnings to be sourcing directly, and we're doing that in partnership with suppliers where we're really relying on them to drive innovation and brand and work with us on the more technical products across building materials and consumer goods.

That's sort of giving us some opportunities to buy better and improve margin as we go forward. There's this arbitrage between making sure that we're really present for the customer.

I think you've heard both Alex and I refer to the importance of value in all of this, but we've got to have the productivity agenda right to be able to have that optionality. We've got to be able to win the customer and we've got to be able to reward our shareholders absolutely, both stakeholders critically important, and being able to do that over the long term, I think is what's really important.

We're doing that in what remains a pretty uneven and challenging market, particularly on the commercial side. I think as commercial continues to come back, our opportunity to really sort of drive top-line performance and flow more of that to the bottom line is going to be there, and we're really excited by the productivity initiatives that we have underway.

Our confidence and our conviction is very high on not only what we've got in front of us, but our ability to execute that and deliver for those key stakeholders.

Were

there any other—oh. Sorry, Craig.

Oh, we're

sorry, we cut you off. Go again.

No, Craig, I'm a bit confused. I guess the EBIT margin excluding property actually lifted for the half, and we actually had better leverage.

I'm not sure what was your question in relation to reduced leverage?

I've got the EBITDA margin was roughly flat, but maybe I'll—

I guess we're focused on EBIT margin because I guess bearing in mind that with the accounting standard and leases, you need to look at the interest component, which is only in relation to leased assets and the right-of-use asset. Overall, excluding property, we actually saw leverage improve, 5% growth in EBIT, EBIT margin actually grew from 12.9% to 13%.

Okay.

Hi, Craig, it's Emily here. Thanks for the question.

I think if you go back to our strategy, we're really focused on moving our business into higher-margin, less capital-intensive parts of the business, really focusing on our growth in consumer. If you look at our results and just look at the one-offs that we had last year, it was actually a 21% profit uplift.

I think what that is showing is that we are starting to see some operating leverage come through. We've always been pretty clear that this is a multi-year transformation journey, and we have been investing in our supply chain, and we've got a new warehouse opening shortly.

We've just opened a new warehouse in Cairns and another one opening in Adelaide. What's been pleasing in this half, certainly from our wholesale business, is we've really started to see the benefits of the automation investments come through.

We're getting good top-line sales growth, we're improving our service delivery to customers, and we're actually lowering our cost to serve. That is really coming through in that kind of core part of our business, and that's really important over the coming years to deliver this continuing sort of operating leverage as well.

That's going to be a key enabler, but we're midway through, if you like, the deployment, and those benefits will kind of roll out over the coming years.

Okay. Thanks, Emily.

Hi, guys. I've got a question for Alex just on Anko.

Just note the bottom of the outlook slide, you're talking about a review of the global expansion strategy and very focused on branded stores. There's a couple of questions sort of caught up in that.

Are you thinking more JV stores like you're doing in the Philippines? Would you entertain going 100% owned?

What does this mean for the existing sort of wholesaling approach you have been up until now? Is that being abandoned or is this just saying that you're considering both, but the priority is on the retail?

Thanks, Richard. There's a bit in that, I'll try and answer the different components.

I think if I go back to when we started, we started with three models to really test the Anko global strategy. We had white-label partnerships, we had wholesaling to retailers, and, of course, we had our direct-to-consumer business through our Anko branded stores in the Philippines.

I think what we have now is a period of operating history across each of those three that's allowed us to sit back and really assess, as we look forward, where do we see the most material opportunity for sales and earnings growth and where do we see a clear path towards being able to generate an acceptable return on capital on our investment? What we've concluded from that is really, out of the three, we think that Anko branded stores are where we see the greatest sales and earnings opportunity in the future.

That doesn't mean abandoning the wholesale piece entirely. We're very focused on continuing to support our retail partners and we've got some good partnerships in place, but in terms of where we want to really focus our capital and our energy for the Anko global strategy, that's really around the stores.

In terms of the stores specifically, we've got five trading now in the Philippines, that's through a joint venture arrangement, and one of the five has now cycled 1 year since it opened. I guess why are we encouraged by the performance of that business model is two things.

One is the sales per square meter that we've been able to deliver has been in line with our expectations and it reflects a really good customer response in the local market. Then the second part is, for the one store where we have cycled 12 months since opening, we're seeing good comparable sales growth, which gives us confidence around the ability to continue to improve sales density.

It is a completely new format for us, we've still got a lot to learn in terms of how we optimize the operating model, and that's really what we're focused on over the next 12 months to gain even further confidence around future investment and what the path to an acceptable return on capital look like, but I think an encouraging start. In terms of how to think about it is we're very much focused on being measured in our investment approach and we'll be led by the evidence and the trading performance.

Would like to be in a position in the next 12 months where we look to open another five stores in the Philippines and then that will give us additional trading information to inform any future investment plans. In terms of more broadly beyond the Philippines, I think if we can really prove out our model here and have an operating model and a format that's generating good returns, then the opportunity more broadly across Southeast Asia is one that we would look to evaluate over the longer term, whether that's through wholly owned stores or JV partnerships, I think would be dependent on the specific markets that we look at.

For the time being, we're very much focused on making the Philippines a success.

Yeah. Okay.

That's helpful. Thanks, Alex.

Good afternoon, team. Firstly, just appreciate the extra detail you guys are giving on the call, it's pretty helpful.

Maybe just one for you, Emily. Just interested in your comments just around the performance of Priceline and that acceleration that you've seen through the half.

Do you think that you're seeing market growth is strengthening or do you think you're taking some share in market? Because there's been some discussion around when we're going to start cycling through GLP-1s, for instance, when are we going to get to that point where the comps get more challenging.

Just interested, maybe first one, how you've seen the market. Do you think you're taking share in a fast grower or do you think the market's held or accelerated through the half?

Thanks, Ben. I think your question on the market, look, the pharmacy market, I think, is in growth.

I think the whole category and sector is in growth in general. It really is a reflection of the aging population and the complete consumer trend that really is focused on health and well-being.

I think there's really good underlying macro trends in health. I think definitely weight loss is really boosting script volume, but our businesses are not just scripts, they're front-of-store.

I think the growth that we've got, I think, is definitely through the investment in the front-of-store category. I think the market data is sometimes hard to see.

I think we're growing at least in line or probably slightly ahead in certain categories would be our view. Your specific question on weight loss, there's no question that it's in double-digit growth year-on-year from a drug perspective.

I think the demand will continue to grow as the effects really play out on people's health in the broader community. I don't quite know, I'm sure no one does, it will slow down at some point as we cycle it, but as a category, I think it will continue to be a strong contributor overall.

Is there a looks for just your opportunity to get more stores into your network, either under the Priceline banner or through just leaning in through into wholesale? Appreciate there's a bunch of stores probably coming available over the next sort of 12, 18 months from some of your competitors.

How competitive is that process? Have you got any ambitions around store growth targets in terms of the network that you're supplying to?

Sure. I think we definitely have an ambitious store network growth pipeline.

I think it is always really competitive. The pharmacy market really relies on switching, you got to convince someone to join your brand.

What we've been doing is really investing in our brand, and the investments we've made are really paying off because our customers and franchise partners are really pleased and seeing the growth. It's a dual answer.

We've been investing in the proposition and making sure that we've got a model that really works for franchise partners, and then, yeah, while it is competitive, we're pretty confident that we're going to be able to continue to expand the network.

Fantastic. Thank you.

Hi, all. I just wanted to ask a question about the Covalent business and in particular the lithium hydroxide plant.

You called out having a few issues that you're working through and the ramp-up will be slowed. We've seen one of the other players sort of step away from the market.

Longer term, how are you thinking about this project and the ability to be competitive in the global market sitting in Australia in a lithium hydroxide plant? Thanks.

Thanks, Phil, for the question. I think you've just got to first of all step back and look at the original investment thesis, which was obviously to produce a vertically integrated project.

First phase was to obviously get the mine and concentrator built and get that to nameplate capacity. We've been going at that for just over 2 years now since we opened the mine and shown a very consistent performance improvement over that period where we're now consistently month in, month out starting to hit nameplate capacity for that plant.

I think we need to acknowledge that for the team out there on site, that once you start doing that, you're starting to fractionalize all of the costs on the spodumene side and we're starting to narrow the gap with the more mature hard rock spodumene producers here in Western Australia. Mount Holland is starting to come into where it should be as a globally competitive hard rock producer just given the size and grade of the deposit.

We obviously then came into completing construction of the refinery and really commenced a similar kind of ramp-up and commissioning pathway for that plant, which is actually showing really promising signs. We often get compared to the other West Australian refineries.

I think the early signs for our project have been really positive in producing battery-grade product, which we announced we'd commenced that in August last year. Wesfarmers and our joint venture party, SQM, have actually now sold hydroxide into the market just to further prove that it was battery-grade product.

We were pleased with the pricing we achieved on those tons. We do have a short-term issue that we're working through that Rob touched on the odor side of things.

We're confident we've got an engineering solution that we can put in place there by the middle of the year, and then really that allows us to recommence and get back on that ramp-up pathway. Between now and that period, we are constrained in how much spodumene we're going to be able to feed the refinery.

I think by the May strategy day, we'll be able to give a good update on how that engineering solution is going and be more definitive on the timing. The good news is because of that performance back at the mine site and getting the cost down and really by then we'll be running at nameplate capacity much more consistently.

Any tons that we won't be feeding the refinery, we'll be able to make good money in the market at these current prices, obviously if they hold.

Yeah. Can I ask, I think there's a bullet point there saying costs incurred during the ramp-up will continue to be capitalized until commercial production is achieved.

Does that effectively take some otherwise costs that would have been in the second half, which you're now saying will be slightly more profitable than the six in the first half, and sort of push them into '27? Is that part of the reason why you're profitable in the second half or is it more around the pricing environment, which is way better now?

It's a couple of factors. The capitalization piece, we'd always assumed that the refinery was going to still be in a ramp-up path for the second half, there's currently no change to capitalization approach there.

That's well-defined on when the refinery has to ultimately be producing at a commercial scale before that will flip over into expensing. The real driver, to be honest, for the profit improvement has been two things: one, the mine consistently hitting nameplate capacity, lowering costs, we've been happy with that, and the rising price environment.

Yeah. That's great.

Thank you.

Oh, thank you. Mine's just a follow-up to that.

You've answered the first half of it. I'm just wondering, can you give us an update on when you believe you will start capitalizing and when ramp-up is done, please?

Scott, yeah, it's Anthony here. I think it will depend largely on what the ramp-up profile looks like.

As Aaron said, we need to get to a stage where the refinery is operating commercially, and at that point we'll start obviously expensing. As Aaron said, I think you can assume for the rest of this financial year that we will continue to capitalize costs.

As Aaron said, we'll give you an update at the strategy briefing day on where we're at in relation to the solution around the odor issue, and that'll give us a better line of sight around the ramp-up profile of the refinery and then what impact that might have on our capitalization or not.

Are you thinking when you operate commercially, is that the way you're thinking about it, is that a proportion of nameplate capacity or something like that?

It would be getting towards nameplate capacity. I'm not saying we would wait until we got to nameplate capacity, but certainly we need to be on that path.

I think given the sort of extension because of the odor issue, then that's why I think you can assume for this financial year we'll be continuing to capitalize those costs.

Sure. Okay.

Thank you. That's all I have.

Thanks for taking another one. Just further regarding Officeworks, maybe for John.

You were early in your tenure when you called out the $15 to $25 million of costs. There's now an extra $25 million of one-off costs.

Will there be any one-off costs in 2027 or will all of that be sort of quarantined to '26? Just more generally, how will you go about building the reputation of Officeworks as leading technology, particularly what do you need to do to get access to better brands, in that you don't have the best brands in technology, you don't have a store format or a team that know how to sell or a brand that's known for selling latest technology if we were to compare you say to JB Hi-Fi?

Just curious about what you need to do and have you got enough cost savings to fund that investment, because it looks quite a significant challenge to improve your credentials with customers in that broader technology and television space as well, please.

Thanks Shaun. What I might do is just break up the costs, I think, for this year and how they translate first half, second half and then how they'll land in '27 and onwards.

I think if you take in half one, we had $15 million in restructuring costs, partially driven by the ERP and the simplification of our structures. As we move into half two, there's higher ERP costs due to the phasing of the program and there's additional restructuring costs also.

The FY26 year is a transitional year, with the benefits starting to flow in FY27 and more material thereafter. Now, some of the benefits from the actions that we've taken this year, they're going to be partially offset for some of the ongoing transformation-related costs next year related to the new Queensland DC and the ongoing ERP costs.

Hope that gives you a flavor of those costs. Then as we think about, there's quite a lot to do, and come the strategy day, I'll be able to kind of talk to you a little bit more detail all the different elements.

We do today have over 60% of our sales are made up of technology. I think we've got a right to play in technology, and we do have quite a few large technology brands that our teams sell to customers, including Apple, you've got Samsung, Sony, and there's quite a few as you kind of go through.

The work that we're undertaking at the moment is how do we actually service the customers that are coming into store with our ability to sell product to those team members. That's through both, I guess, team members, but also through the use of technology, and that's the work that we've currently got under play with our teams.

With the restructuring and the moving to a low cost, it gives us a lot more opportunity to explore different ways to service those customers.

Does that involve sort of incentive selling in terms of commission-based selling that you need to do where they get part of it? Where will your team members get part of the economics?

Do you have the team at the moment to actually sell those products, or do you need to train and or bring in new sales team, the people on the floor?

Shaun, I will go into more detail at the strategy update on particularly around the incentives and the sell, the different things that we are looking. We have brought in 100 new team members, which we did talk about at the last strategy day, and they're in our stores currently.

We can see through the investment in training that they are delivering a higher sales than what would be with traditional sales assistants. The investment is paying off.

Shaun, Rob here. In addition to John's comments about the opportunities that he's facing into at the moment, I think it's important just to step back and realize that Officeworks has driven quite remarkable growth in technology over the last decade.

I don't think there's any questions that customers are comfortable buying technology in Officeworks. What John's flagging is that we see many opportunities to do more, many opportunities to improve our range, improve the service proposition.

I don't think there's any question that Officeworks has arrived and has indeed been quite successful in selling technology products over the last decade. Obviously a lot of work ahead.

Fantastic. Thanks, Rob.

Thanks, John.

Okay. Thank everyone for your time.

If you have any other follow-up questions, please call Dan and the team and we'd be happy to help. Good afternoon.