BlueScope Steel Limited

Good morning and thank you for joining us today. I'm Tania Archibald, Bluescope's Managing Director and Chief Executive Officer. With me is David Fallu, our Chief Financial Officer. We'll take you through the FY26 results, the progress we've made against the agenda we set at the half and how we're positioned for the future. We'll then take your questions. I'd like to begin by acknowledging the traditional custodians of the various lands on which we meet and work today and pay my respects to Elders past and present. I'll begin with safety. There is nothing more important than the health and safety of our employees and contractor partners. BlueScope has a strong safety culture built on a track record of extensive engagement with our workforce and an ongoing commitment to learn and improve. Throughout the year, our global safety refocus program guided our work on critical risks and the effectiveness of the controls that manage them. but our performance is not yet where it needs to be. The tragic loss of a contractor at Port Kembla in November is a stark reminder of the importance of our work in this area. Now that incident remains under investigation by the regulator and we're engaging fully with that process and we are determined to learn from it as we do with every serious incident across the business. Building on the progress we made in the year, We're continuing to drive a more systematic approach to managing critical risks and improving controls. This work is supported by our new functional operating model, which has brought all of our safety professionals into a single global team. This change is designed to bring the full force of the organisation's capabilities to the greatest areas of opportunity and challenge as we seek to strengthen our safety performance. Financial Year 26 has been a defining year for Bluescope in which we've accelerated the delivery of value which has positioned us well to capture the next phase of growth and returns. I'm proud of what the team has achieved and believe we're well placed for the years ahead. In February we committed to accelerate value delivery across four pillars. On growth, PID CapEx is now behind us and two of our major projects have just moved from construction to hot commissioning and ramp-up phase. That's the new state-of-the-art metal coating line in Western Sydney and the new low-emissions electric arc furnace at Glenbrook in New Zealand. On cost, in FY26, we fully delivered the initial $200 million cost-out program, which we commenced just over two years ago. And we've exceeded our targeted additional $150 million cost-out program with the reshaped cost base in place from 1 July this year. delivering a simpler, leaner, blue scope. On property, we've accelerated the delivery of value with a range of project deliverables through the year, highlighting the significant value in the surplus land portfolio. And finally, for shareholders, we've delivered a significant step up in returns whilst maintaining a robust balance sheet. Put simply, we've executed on our commitments. Turning to the headline numbers, FY26 demonstrated the strength of the portfolio as we shift from a heavy investment phase to one of ramping up shareholder returns. Underlying EBIT of $1.27 billion was materially higher than FY25, whilst second half EBIT of $716 million was above the top end of the guidance range, supported by a stronger North American contribution, record Southeast Asian performance, and delivery of cost and productivity targets more than offsetting cyclically low Asian steel spreads. Underlying net profit after tax for the year was just over $800 million and the balance sheet finished the period in a strong position at $600 million net debt. With the major investment program ramping down across the next 12 months, we're continuing to ramp up returns to shareholders. The board today approved an unfranked final dividend of 65 cents per share and an unfranked special dividend of 70 cents per share which when paid in just under a month's time will see us delivering on our calendar year 26 commitment of $3 per share in distributions. Shareholders have been patient through the investment phase and that patience is now being rewarded. Turning to guidance, we've entered the next half with solid momentum. We see continued strength in North America, a solid demand environment in Australia, and early signs of recovery in New Zealand. In China, overcapacity continues to weigh on regional steel spreads. For 1.527, we expect underlying EBIT in the range of $860 million to $960 million, subject to spread, foreign exchange and market conditions. Now, the assumptions that underpin this outlook are set out on the page, and David will take you through the regional detail shortly. Lusco today is a lean, modern manufacturer of high-quality steel products, systems and solutions that our customers know and trust. Our purpose and bond are enduring and grounded in care and respect for our people, our customers, our shareholders and the communities in which we operate. We're guided by three key strategic themes that focus on customer value creation, operational excellence and shareholder value delivery. Our decision-making is supported by our long-standing financial framework which drives a focus on resilience and returns, a disciplined approach to capital allocation and an unwavering commitment to deliver long term shareholder value. We're strategically differentiated by our ability to combine highly competitive manufacturing assets with deep customer relationships, leading product development, extensive channels to market and strong strategic marketing capabilities. With a long-standing presence in deep manufacturing and market expertise across Australia, New Zealand, North America and Asia, we bring decades of know-how to every market we serve. And our in-country, for-country approach keeps us close to customers and end-use markets. Through these elements, we aim to deliver resilient, through-cycle earnings, robust and growing cash flows and higher shareholder returns, all of which we're seeing in these results. Turning to growth. where we've been working hard to deliver our 2030 $500 million EBIT uplift target. In North America, we're continuing to target more than $200 million of improvement anchored by North Star de-bottlenecking and our coated and painted strategy including the BCP turnaround. In Australia, we're targeting more than $125 million supported by continued growth in Colourbond and Trucore Steel backed by the new metal coating line number seven. and the plate mill upgrade which will enable capability, service and quality improvements. In Asia, we're targeting a $75 million uplift through capital light growth of ARAD products and solutions across Southeast Asia and we're pursuing targeted growth segments in China. In New Zealand, continued growth in colour steel and the benefits of the newly commissioned electric arc furnace will enable the $75 million growth target. During the year we've made good progress on the major projects which underpin earnings resilience and growth. At Erskine Park in Western Sydney the new 240,000 tonne metal coating line number 7 achieved the significant milestone of metal on strip on the 4th of August. Production ramp up will continue through this half. Now this is a state of the art metal coating line with high levels of automation, process control and smart technologies. Now the project has taken longer and cost more than initially anticipated largely reflecting the high inflation environment for capital projects as well as the extensive wet weather delays throughout the construction period. Now, critically, this investment underpins our long-term supply of Trucore and substrate for Colourbond, both of which achieved record sales in the year. The new Lower Mixon's electric arc furnace at Glenbrook in New Zealand produced the first heat of steel on 3 August. Similar to the new metal coating line, Ramp up and transition to operations will occur across this half and this marks a key milestone for our New Zealand operations enabling a step change in our emissions profile and most critically a transition to a more flexible demand responsive production model. The North Star de-bottlenecking program is progressing well across all nine components unlocking an additional 300,000 tonnes per annum of capacity at one of the best positioned mini mills in North America. The overall program is running on schedule and in line with budget with three of the project components now complete. The Port Kembla plate mill project remains on track with the processing upgrades already delivered and in operation. With the first phase now complete, the next phase of the project, being the product quality improvements from the new furnace, are on track for delivery mid next coming year. Importantly, the plate mill upgrade delivers new heavy plate capability with broader application to defence, infrastructure and renewables projects. The transition schedule for the number six blast furnace realign project has been pushed back to early two half FY27, reflecting the scale and complexity of the project and similar to metal coating line number seven has experienced inflation in construction costs. Number five blast furnace continues to perform strongly, which gives us flexibility in cutover timing and no impact to our operating risk profile. but importantly the Number 6 Reline project secures Australia's domestic supply of iron for up to the next 20 years whilst we work through our decarbonisation pathway. On climate and sustainability we remain firmly committed to executing our strategies and delivering on our targets. In Australia we're exploring various pathways for decarbonisation. Now one of these is the Neosculpt project that we're leading in joint venture with Rio Tinto, BHP, Woodside and Mitsui Iron Ore Development. Neosmelt is an Australian industry R&D project designed to secure the long-term future of Australia's Pilbara iron ore industry and provides Bluescope a potential decarbonisation pathway. The project is aiming to build a pilot direct reduced iron and electric smelting plant designed to use blast furnace grade Pilbara ores in DRI production, a massive step forward from today's DRI technology. The partners are targeting a final investment decision by the end of this calendar year, subject to government support. In North America, the Milstar and Bluescut recycling teams are ramping up the production of low residual shred and reducing our reliance on pig iron without affecting product quality or mill efficiency. In New Zealand, the new EAF will deliver a step change in our site emissions The EAF, coupled with geothermal power supply, also enables new lower emissions product offerings, which we're delighted to bring to market. None of these investments have been straightforward, but they also underline two critical themes for manufacturing. Firstly, a reminder that capital is mobile and seeks the best risk-adjusted return. Stable, competitive and predictable policy settings attract long-term investment, while uncertainty and structural cost disadvantage discourage it. Secondly, where the manufacturing industry is today in Australia is largely the product of policy choices made over the decades. While other nations have competed intensely for manufacturing investment through a variety of strategies, Australia has largely stayed on the sidelines. Now is the time to change that. Australia's Future Made in Australia agenda is the most significant shift in industrial policy in a generation and it provides a very real opportunity to reshape Australia's future. Public policy settings should help create the conditions that allow globally competitive manufacturers to invest, grow and succeed. In turn, strong financial performance underwrites continued investment in capability and innovation, including lower emissions steelmaking. At Blue Scope, we remain committed to a vibrant and competitive manufacturing back in Australia for the long term. That's why we continue to advocate for structural reform of Australia's energy market. It's why we support a level playing field by an effective trade remedies regime. And it's why we continue to drive Project Neosmelt, which has the potential to lay the foundations for a green iron export industry. Moving to cost and productivity. We fully completed our initial $200 million cost and productivity program in the half which was a great outcome. Earlier this year we went further and established an additional cost reduction target of $150 million on a gross basis. Now we've exceeded delivery of this target so we now expect the full $150 million to flow into FY27 as a net benefit. The team has done a fantastic job executing on this target and resetting our functional operating model. The result is a simpler, leaner, more agile BlueScope. On property, our overarching objective is to accelerate the delivery of value from our 1200 hectare portfolio, which sits in sought-after industrial locations with proximity to port, rail and energy infrastructure. Now, as a reminder, over 60% of the total portfolio is already appropriately zoned and able to be developed. Across the year, we made great progress with activities ranging from planning and zoning to development activities and sales. Moving into FY27, our focus is on progressing the logistics hub at Western Port as we commence the process of shortlisting proposals and the commercial and structuring work that supports value delivery from this initiative. We're also progressing opportunities for Port Kembla that are complementary to our manufacturing operations, including a focus on the development of an energy precinct along with other planning and development activities. On shareholder returns, to quickly recap. In February, we announced a plan to deliver $3 per share in returns in calendar year 26, representing a material step up in distributions to approximately $1.3 billion, which is around 10% of Bluescope's market cap. With today's dividend announcement, this plan is being fully delivered. Given the ramp down in our major capital investment program, and the ramp up in cash generation, we've announced a plan to repeat the $3 share returns in calendar year 27. This plan is supported by a robust balance sheet. Before I hand over to David, let me step back and cover the macro and industry backdrop and the longer term opportunities across our business. In Australia, construction activity remains resilient, supported by housing, infrastructure and non-residential demand, and the medium-term outlook is underpinned by favourable demographics and a sustained housing shortage. Value-add and branded products remain key drivers of volume growth as our products and systems continue to gain traction. As for spreads, regional overcapacity driven by record levels of exports from China continue to pressure spreads and margins in the Australian business. The Australian business has proved to be extraordinarily resilient In the United States, demand remains supportive across our key markets of auto, non-residential construction and manufacturing. The data centre rollout and broader e-commerce infrastructure have underpinned solid non-residential construction demand. More broadly, North America continues to be a great place to make and sell steel. The regulatory and industry environment is favourable and supportive of the demand outlook across steel consuming sectors. And our footprint and quality of assets position us well to capture continued economic growth. We also have a clear runway to grow with the incremental expansion at Northstar, adding low cost capacity into a market that remains structurally short of steel. Across Southeast Asia, we have an outstanding footprint across every major economy. The region is becoming increasingly attuned to the value proposition that BlueScope has spent the best part of six decades embedding. Our positions are well established with latent capacity to capture growth in this fast-growing and dynamic region. In New Zealand, demand conditions have been soft, though we're starting to see signs of recovery. Much like Australia, favourable trends in demographics and demand will drive medium to longer term volume growth for our product suite, including the new low emissions offerings enabled by the EAF. Whilst I set out a constructive picture on demand across most of our regions, cost escalation remains the persistent challenge. It was compounded this year by the Middle East conflict flowing through to fuel, freight and input materials, and it underlines why a relentless focus on cost and productivity sits at the heart of how we run this business. Above all, it's the design of our portfolio that delivers value through the cycle, positioning us to capture our targeted growth while absorbing the headwinds along the way. I'll now hand over to David to take you through our regional performance and the financial framework.

Thanks Tania and good morning everyone. Turning to the regional performance, starting with Australia, which delivered underlying EBIT of $188 million in the financial year. with a second half EBIT of $66 million. Domestic dispatches increased to 1.15 million tonnes in the half, driven by residential and non-residential construction demand, with Colourbond and Trucore Steel hitting a record volume with 654 and 155,000 tonnes in a year respectively. The result reflects sustained low Asian steel spreads, and a non-repeat of one-offs partly offset by cost, productivity and value added volume gains. As an integrated modern manufacturer in Australia our priority is to keep growing domestic and value added volumes while reducing costs to support margins. With performance remaining challenged by soft regional spreads You can see the importance of focusing on shifting more volume to domestic sales and more of those sales toward value added and premium branded products and pleasingly that trend has continued with our record colour bond and true call volumes this year. Cost also remains critical and the operating model reset has helped in this space that our work here needs to be ongoing not only to offset inflation but to enhance our earnings profile in concert with the work on value added growth. Turning to North America, North Star delivered underlying EBIT of just over $800 million in FY26, with a second half EBIT of $484 million, up 50% on the prior half, on materially stronger realised spreads and increased production capacity. We expect to see further benefit of the significant benchmark spread increase flow into FY27 due to the nature of longer pricing lags and other pricing mechanisms cover around a quarter of Northstar's sales book. The business continued to operate at full utilisation and effectively managed its cost base to negate conversion cost increases in the half. Northstar remains an outstanding asset with its continued margin outperformance relative to peers due to operational capability, geographical location and a strong performance culture. We continue to unlock capacity in the mill to grow our volumes and earnings from this great business. Buildings and Coated Products North America delivered an EBIT of $230 million in FY26 with a second half EBIT of $101 million, 20% lower than the prior half. Across the segments, three component businesses Bluescope Buildings performance softened slightly in the half, with some seasonality and slightly lower volumes due to a temporary lull in new project work six to 12 months prior to the period as the market digested a range of trade policies and measures following Liberation Day. BCP performed in line with expectations, delivering a loss for the half, however an improving performance across the period. And Steelscape's performance improved on higher volumes as demand recovered from the Pryperia's tariff-related volatility. Across North America, our priorities are continue to maximise volumes at North Star, expand buildings where returns are clear, selectively grow downstream value and deliver the turnaround of BCP. We are well positioned for growth in the region and the successful execution of these priorities support the longer-term opportunity of bringing our painted steel value proposition to the North American market. Asia delivered underlying EBIT of $177 million in FY26 with a second half EBIT of $81 million, down around 15% on the prior half. The region is delivering strong returns with further upside to be realised from its unrivaled footprint for regional growth. Southeast Asia had a record year with all countries showing improvement from sales and marketing initiatives and operational excellence. The opportunity here is significant, not only from the strong positions our brands have in the market and the demographic tailwinds in the region, but also from the significant latency we have in the region to capture this growth, making it a very capital efficient opportunity. China was lower than the prior year on seasonality and weak domestic conditions. And as we've previously announced, we completed the sale of our 50% interest in Tata Bluescope Steel during the year. Our priority across this business is to strengthen customer propositions and selectively expand higher value downstream solutions as the markets continue to mature. New Zealand and Pacific Islands recorded an underlying EBIT loss of $1 million in FY26 with a second half EBIT of $16 million. The result was thanks to improved product mix as colour steel delivered a record performance despite softer conditions along with an improved cost performance. The EAF installation was largely finished at the end of the financial year which is a fundamental strategic reset of the business. The EAF will reshape the earnings and emissions profile of the business with the benefits starting to flow through and a full run rate following the FY27 transition year. Turning to the drivers of the year-on-year movements in underlying EBIT, looking at FY26 versus FY25, the largest contributor was a material lift in net spreads, driven predominantly by stronger realised pricing at Northstar. Volume and mix contribute positively, reflecting the stronger domestic volumes in Australia and continued growth in premium branded products including Colorbond, Trucore and Colorsteel. Conversion costs and other costs reflected the benefit of our cost and productivity program, offset with inflation and escalation. As a reminder, our cost and productivity program benefits are not just sitting in conversion costs. They're across a range of buckets, most notably raw material costs, which actually more than offset higher conversion costs in the year. Comparing the second half of FY26 to the first, similar dynamics applied. The guidance period across our regions, noting the group first half FY27 guidance range and assumptions Tania mentioned earlier, in North America we expect a result more than one third higher than the second half of FY26, with North Star benefiting from stronger benchmark spreads and improved cost performance. Within BCP&A, improved volumes and ongoing turnaround initiatives support a stronger result. In Australia, we expect a result around two thirds higher than the second half of FY26, driven by higher realised spreads, stronger domestic volumes and continued cost discipline, with impacts from major project transitions reflected in the outlook. In New Zealand and Pacific Islands, earnings are expected to be around one third lower than the second half of FY26, largely reflecting EAF commissioning impacts, partly offset by improved benchmark pricing. In Asia, we expect performance broadly in line with the second half of FY26, with seasonally softer conditions in Southeast Asia offset by stronger seasonality in China. Finally, corporate and group is expected to be approaching three times the second half of FY26 result. This primarily reflects a non-repeat of the $76 million Westapto land sale, profit recognised in the prior period. Turning to our financial framework which remains a critical guiding document and it's central to how we run the company. Framework remained unchanged, however we've evolved the settings within it to reflect a stronger, more resilient earnings base, materially improved cash generations and confidence in the trajectory of capital expenditure within our growth projects now nearing completion. As we've noted in recent years, Royce has been impacted by the once-in-a-generation capital program, adding to our operating asset base, while Asian spreads have held at bottom-of-the-cycle levels. In the year, Royce improved, thanks to improved contributions from North America and continued strength in Asia. On cash flows, in FY26, free cash flow was $140 million, impacted by our peak capex. As a reminder, shareholder returns are paid from operating cash flows less sustaining CapEx, with the commitment to distribute at least 75% of this number. Importantly, with peak CapEx now behind us, the cash flows available to fund distributions will be materially higher going forwards. Turning to our balance sheet, net debt at year end was $600 million, well within our target range thanks to stronger US spreads and specific timings of cash flows. We also have ample liquidity and we've taken the opportunity to enhance this position further in July to ensure a frankly rock solid maturity profile. The combination of the balance sheet position and liquidity gives us a great platform to support our planned returns in calendar year 27. Capital expenditure was $1.5 billion for the year in line with expectations with the second half being our peak capex for the half. The profile steps down from here. FY27 CapEx remains slightly elevated as we complete the remaining $500 million of the program before normalising further. As a reminder, our typical annual capital expenditure is approximately $600 to $700 million with around $450 to $500 million in sustaining CapEx and foundational spend and typically a further $100 to $200 million in organic and incremental growth investments. On shareholder returns, this calendar year saw us accelerate the step up in distributions with a plan to deliver $3 per share in calendar year 26 and $1.65 per share paid during the half. As noted, the board today approved the unfranked final ordinary dividend of $0.65 per share as well as a $0.70 per share unfranked special dividend. as an alternative distribution to the previously flagged $310 million buyback program which we've been unable to execute during the period. This sees us fully deliver our calendar year 26 plan with approximately $1.3 billion in distributions this calendar year. This level is significantly higher than the periods in the decades prior by a significant margin. As we look ahead, we've announced today that we plan to deliver at least a further $3 per share on the year 27 with the rebased ordinary dividend complemented by other methods such as special dividends and buybacks where available. Bluescope has always been a highly cash generative business with the last few years seeing this directed to our major investment program. Clearly we're getting back to more normal cash flow numbers which support the stronger return levels. As such, it's exciting to see that our approach in this space is designed to be sustained, not one-off. And with that, I'll hand back to Tania.

Thank you, David. Before we take your questions, I want to reiterate a number of points. The results today demonstrate the strength of the portfolio and our execution capability. Earlier this year, we committed to accelerating the delivery of value. We've delivered on our commitments over the last half and will continue this work into FY27. With the major investment period ramping down, we're ramping up returns to shareholders with a significant increase in calendar year 26 planned to be repeated in calendar year 27. BlueScope enters this next phase from a position of real strength as a lean, modern manufacturer of high-quality steel products, systems and solutions that our customers know and trust. I want to close by thanking our people for their dedication through a demanding year, our customers and partners for their trust and our shareholders for their continued support. And with that, we'll open the line for questions.