SMART Global Holdings, Inc.

Good morning and welcome to the SGH results presentation for the year ended 30 June 2025. I'm Ryan Stokes, MD and CEO of SGH and joining me today is our CFO Richard Richards. Slide two. SGH is a leading Australian diversified operating business focused on industrial services and energy. Our model is centred on owning and operating leading businesses, scale and privileged assets where we can drive results and support the delivery of our performance. Our performance is guided by the SGH way, which brings together our discipline operating model and capital allocation framework. This approach emphasizes focus, execution, and accountability, with the end objective being TSR outperformance and sustainable value creation. We target sectors with long-duration demand tailwinds, with current exposures across mining production, infrastructure and construction, and energy through Westrac, Boral, Coates, and Beach Energy. This strategy, coupled with our disciplined execution, supported our 46% TSR performance in FY25. Slide three. FGH delivered a strong FY25 result with revenue and earnings growth in variable market conditions. Revenue of 10.7 billion was up 1% on higher revenue at Westrack. EBIT of 1.54 billion was up 8% and in line with our guidance of high single-digit EBIT growth. The result was largely driven by a 6% increase in our industrial services segment EBIT. NPAT of 924 million was up 9%, and operating cash flow of 1.95 billion was up 49%, with Westrack, Boral, and Coat all delivering EBITDA cash conversion above 90%. Slide four. SJH's ongoing focus on operating leverage saw revenue growth amplified in earnings, with EBITDA and EBIT margins expanding to 19.1% and 14.3% respectively. The margin expansion was predominantly driven by increasing profit at borrow and higher contribution from equity-accounted earnings. MPAT was up 9%, while statutory MPAT was up 5%, impacted by impairments of equity-accounted interests. Strong cash contribution from the industrial businesses drove a 27% uplift in cash conversion to 95%. This result supported a 10% deleveraging of the business to under two times and below our leverage objective. The profit result supported payment of a 32 cents per share final dividend, bringing the FY25 dividends to 62 cents per share fully frank, up 17% year on year. SCH also completed the acquisition of the remainder of Borland early FY25 further cementing the business as a leading Australian diversified operating company. Slide five. This slide outlines the SGH wave, which is the articulation of SGH's disciplined and scalable operating model. It guides how we create long-term value and deliver TSR outperformance through consistent execution and accountability. The model is built around four concentric layers. At the centre is the SGH star, our logo, represents our purpose, objective, and values. The first layer reflects our outcome-based objectives focused on TSR outperformance and sustainable value creation. Second layer outlines how we deliver through discipline, capital allocation, and execution across our four performance pillars of people, operations, assets, and financials. Third layer defines our focused activities with a domestic orientation, privileged assets, long-duration demand exposure, and a strong culture of performance and accountability. The outer layer of the SGH way operating model in action with traits like pace, execution and growth, efficiency, continuous improvement, and frontline focus. Our approach is supported by the SGH4C drivers. Cadence, which defines the operating oversight and performance accountability with an emphasis on execution and results. Capital, with our disciplined capital allocation framework and newly defined opportunity criteria targeting the highest risk-adjusted returns culture, fostering accountability and an owner's mindset across SGH and capability, which builds technical depth, leadership strength and privileged asset base to support our competitive advantage. Slide six. Safety remains a core priority at SGH. We are deeply saddened by the two fatalities during the year and we extend our condolences to their families, friends and colleagues. These incidents have had a profound impact and reinforce our commitment to ensuring every team member and contractor returns home safely each day. Operationally, we delivered safety improvements in FY25 with LTIFR down 38% and TRIFA down 31%. We will continue to focus on injury prevention and early intervention programs which reduce incident severity and promote shared accountability for safety outcomes across our businesses. SJH also made progress on our sustainability ambitions over the year. Westrac commissioned a 1.7 gigawatt solar PV system at its Tomago facility, supporting lower emissions and energy costs. Boral increased its use of alternate fuels to 45%, up from 28% following the completion of the Barrowmont Chlorine Bypass. Coats also reduced its reliance on grid electricity by 1.1 gigawatts, continued rollout of rooftop solar across its branch network. On the slide 8, Westrac delivered a solid result in FY25, with revenue up 4% to $6.1 billion. Growth was led by strong capital sales, which increased 12% to $2.2 billion, reflecting significant fleet investment programs by major customers. Services revenue was largely flat at $3.9 billion, with underlying parts prices parts demand and growing rebuild activity offset by lower average parts pricing. EBIT increased 2% to $639 million, with EBIT margins remaining strong at 10.5%. EBITDA cash conversion of 108% was driven by improved inventory management. A working capital of $1.6 billion was $80 million lower, with working capital to sales improving by 3% to 26%. On to slide nine. The 12% capital sales growth was supported by major fleet replacement and expansion programs across WA and New South Wales. This is expected to normalize in FY26 as large project deliveries moderate. The stable services revenue was underpinned by continued demand from the growing and aging installed base average age of mining machines increasing to 7% to 12.4 years. Market fundamentals remain supportive for Westrac, with Australian commodity export volumes up 3% FY25. Iron ore exports are forecast to grow over the medium term, and coal volumes are expected to remain resilient. Construction activity also remains elevated, with a robust outlook expected to support customer demand into FY26. On to slide 11. Boral delivered significant earnings growth in FY25. Revenue of $3.6 billion was up 1%, with resilient demand from engineering and commercial sectors offsetting volatility in road and residential activity. EBIT rose 26% to $468 million, with EBIT margin expanding from 10.5% to 13%. The margin improvement reflects pricing discipline and continued progress on cost and operational efficiency elements of the good to great performance journey. Cash performance was also strong. EBITDA cash conversion was steady at 100%, and operating cash flow increased 11% to 690 million. The uplift was supported by a 1.6% improvement in SG&A to sales to 6.7%. CapEx of the year was 326 million, representing 146% of DNA. This includes 70 million of catch-up investment in heavy mobile equipment, to strengthen the network and support reliability and production efficiency. Slide 12. Concrete and cement sales volumes increased by 1% and 3% FY25, supported by resilient demand from the commercial and engineering sectors. Quarry volumes were lower, reflecting soft eroding activity, particularly in regional areas, and the impact of customer dispute. Borough's ongoing sales effectiveness focus continue to deliver pricing traction with uplift of 2% to 5% across the product suite. Improved customer outcomes supported this traction with grade of service up 5% to 85% and concrete deliveries on time improving 13% to 86%. Looking ahead, residential activity is anticipated to recover from calendar year 26, underpinned by government housing policy and interest rate expectations. Major infrastructure projects on the East Coast are also expected to continue to provide a steady baseline of activity. The cost efficiencies delivered in FY25 position borrow to drive operating leverage as volumes return in line with these market opportunities. Slide 14. Coasts delivered a resilient result in FY25 with revenue of $1 billion down 9% in variable market conditions. Performance was particularly impacted by lower customer activity in the south where we experienced a 19% revenue decline and softer conditions in other regions as major projects are completed. Looking ahead, we expected key major projects in residential construction to drive activity. EBIT of 290 million was 9% lower on a normalized basis with margins remaining strong at 27.8%. EBITDA margin was slightly up at 46%, reflecting continued cost discipline and operating efficiencies, including a reduction in R&M to sales to 17.5%, supported by the ongoing rollout of the hub-and-spoke model. Coates also completed workforce and network refinement to better align with activity and optimize costs. Slide 15. Time utilization of 59.4% was slightly below our high-performance target of 60% and was supported by fleet relocation, leveraging Coates' national footprint and strong market share. The year-end fleet value contracted slightly to $1.85 billion on an original cost basis. Long-term fleet planning remains focused on maintaining financial and asset utilization and market alignment. EBITDA cash conversion of 94%, was a strong result in the context of working capital, build and restructuring costs. Operating cash flow was 458 million. Coates launched its growth 30 strategy in July targeting incremental share of the 1.7 trillion infrastructure and construction pipeline. The strategy focuses on building capability and presence in growth sectors including renewables, utilities, defense and residential building. This will be supported by improved sales execution, operating leverage and enhanced use of technology and analytics. Slide 17. Beach delivered strong operational and financial results underpinned by improved execution across the business. Production increased by 9% to 19.7 million bullies, driven by a 64% uplift in the Otway Basin and a 91% uplift in the Bass Basin. Revenue rose by 13% to 2 billion, supported by higher production, stronger commodity pricing and contribution from the weightier LNG cargoes. Net profit after tax was $451 million, up 32% on higher sales and an 18% reduction in operating costs per BOE. Beech's result also includes a non-cash impairment primarily related to lower oil prices and reserve revisions. Beech declared a final FY25 dividend of $0.06 per share, up 200% on the prior comparative period. Operational improvements contributed to a lower pre-cash flow breakeven oil price, which is now below US$30 per barrel. The Moomba CCS project was also commissioned during the year with over 1 million tonnes of CO2 injected. For FY26, beaches provided guidance for production of 19.7 million buoys to 22 million buoys at capex of 675 million to 775 million. Slide 18. SGH Energy continues to progress its two key projects, Crux and Longtime. At Crux, SGH holds a 15.5% interest in the Shell-operated LNG backfill project for Prelude. Development is ongoing and SGH's share of CAPEX in FY25 was $238 million. First gas from the project is expected in CY27 and SGH intends to begin marketing our share of the LNG cargo in calendar year 26. At Long Tom, SJH holds an interest in the field and existing infrastructure located in the Gippsland Basin, offshore Victoria. The resource was independently verified at 87 PJs in 2024, and we are working with Amplitude Energy to progress pathways for the gas to enter the East Coast market. Slide 20. Seven West Media has maintained its position as the number one total television network in Australia now for a fifth consecutive year. Revenue declined 4%, reflecting a soft advertising market, partially offset by an increase in total television advertising share. The business maintained a focus on cost, delivering a 3% reduction in operating expenses. Digital performance remained a highlight, with 7 Plus revenue up 26%, active users up 27%, and streaming minutes up 41%. For FY26, 7 West is targeting EBITDA to exceed current consensus expectations of $161 million. SJH's historic US $100 million investment in the CMC funds has delivered US $122 million in cumulative capital returns and realizations to June 2025. In FY25, we received profit realizations of 19 million, with further realizations expected in FY26. To date, Fund One has achieved a gross IRR of 20.6% and a multiple of invested capital of 2.46 times. I now hand you over to Richard to take you through the FY25 financials. Richard.

Thank you, Ryan, and good morning. SGH achieved a record financial result for the year with revenue, margin and earnings growth delivered in mixed market conditions. Revenue of $10.7 billion was up 1% or 2% when adjusting for the sale of Coates Indonesia. This revenue growth was driven by 4% at Westrack and 1% at Boral. partially offset by a 9% contraction at Coates. Expenses rose 1% for the year, with higher machine COGS to support Westrac's capital sales growth, offset by cost reductions at Boral, reflecting cost disciplined, improved cost recovery, reduced subcontractor cartage, and other operational efficiencies. This relatively small uplift in expenses reflects the hyper-focused attention of SGH to drive operating leverage, promoted by the SGH operating model, which supported significant EBIT margin expansion to 14.3%. SGH delivered 6% higher EBITDA of $2.1 billion and 8% higher EBIT of $1.54 billion. The EBIT growth increased to 9% when adjusting for the sale of Coates Indonesia. Net financing costs of $316 million was up 8% reflecting the higher debt levels following completion of the BORAL acquisition, partially offset by lower interest rates on floating rate debt and the benefits of an early refinancing of our SFA. The underlying tax expense of $293 million was up 39%, primarily affecting higher earnings contributions from our wholly owned businesses in the year, as well as lower utilization of unbooked carry forward capital losses at BORAL. Underlying impact attributable to SGH members rose by 9% to $924 million, while statutory impact rose 13% to $523 million, primarily reflecting significant item losses from our equity-accounted investments. Slide 23. SGH's statutory result includes $410 million in pre-tax significant items, including $148 million share of Beach Energy's impairment of production assets, and $16 million relating to SGH's share of seven West significant items. Market-to-market adjustment on SGH's direct investments resulted in an impairment of $243 million for beach and $24 million for swim, based on listed observed prices. Other notable pre-tax items included $12 million in restructuring costs at Coates and $10 million relating to oral property. These and other lesser items resulted in a $401 million net reduction to after-tax statutory earnings for the year. Slide 24. This slide presents an EBIT bridge with details of the absolute movements year-on-year for each component of SGH's result. It also includes a reconciliation to statutory EBIT. Westrac's EBIT increased $14 million, overcoming pricing-related margin headwinds of more than $60 million. highlighting the robust underlying customer demand for new machines and services. Borals EBIT grew $97 million with a reduction in asphalt and quarry volumes, more than offset by volumes growth in cement and concrete, supported by cost efficiencies and pricing traction across its product suite. Coats EBIT declined $37 million, or $30 million adjusted for Coats Indonesian sales. The decline largely stems from the south, where softer customer activity led to a 19% contraction in revenue. Energy EBIT contribution increased 33 million, driven by a 32% rise in underlying end padded beach, supported by 9% production growth and an 18% reduction in OPEX per barrel. Meteor EBIT contribution grew 17 million, with lower earnings from SWIM, more than offset by increased realized gains from our CMC investments. In aggregate, these movements delivered a $118 million increase in underlying EBIT to $1.54 billion, or $1.1 billion in statutory EBIT after accounting for the $438 million of significant items. Slide 25. Operating cash flow increased by $609 million to $1.4 billion, reflecting a return to high cash conversion across SDH. Westrac operating cash flow improved significantly as inventory levels normalized following investments in prior year to support customer demand. This drove SGH's cash conversion of 95% up significantly year on year, though in line with historical averages. Dividends from equity-accounted investees totaled 50 million, including contribution from BEACH and distributions received from Westrac and Boral. Net financing costs were $317 million, up $62 million on prior year, reflecting higher average debt levels post the Boral acquisition. Income tax paid decreased by $33 million to $203 million, including Australian and US tax refunds received by Boral. Net investing cash outflows increased by $210 million to $678 million, reflecting higher capital capex payments on Crux, and investments to extend Boral's quarry portfolio, moderated by reduced fleet reinvestment in Coates, reflecting our disciplined approach to capital allocation. Net financing cash outflows rose to $1.2 billion, largely driven by $677 million in net debt repayments, $182 million to acquire the remaining minority interest in Boral, and $244 million in SGH dividend payments. Closing net debt decreased by 150 million to 4.2 billion on net repayment of borrowings. Slide 26. SGH net assets increased by 679 million to 4.8 billion, driven by investments in oil and gas assets and PP&E, as well as 150 million lower net debt. Inventory decreased by 90 million, primarily from lower new machines and parts stock at Westrack, followed by targeted working capital initiatives. Production and development assets increased by $255 million, reflecting continued investment to bring Crux into production. Property, plant and equipment rose by $125 million, largely reflecting Boral's quarry and plant acquisitions, coupled with their investment in HME catch-up capital. Equity-accounted investments decreased by $300 million, following SGH's recognition of its share of impairments at beach and swim, and marking to market our carrying value of each based on their prevailing share prices. Trade and other payables reduced by $262 million, largely reflecting the finalisation of the Boro compulsory acquisition. Slide 27. Adjusting for the $99 million of positive mark to market on debt-related derivatives, SGH's adjusted net debt to EBITDA, or leverage, was slightly below two times at June, down 10% and in line with our deleveraging target. We remain committed to maintaining a strong and flexible balance sheet. Available liquidity was $1.9 billion at year end, including $440 million of uncommitted facilities. We've continued to take proactive steps to strengthen and extend our funding base. During the year, we refinanced key syndicated facility tranches with tenors of five and seven years. There are now no corporate bank facilities maturing until FY29. 69% of SGH drawn debt is now fixed, up from 48% in FY24. The weighted average interest rate of fixed debt is 5.2%, with an average remaining tenor of 4.8 years. SGH is effective all in borrowing cost of 5.4%, and the weighted average facility maturity is 4.3 years. These actions reflect our disciplined approach to balance sheet management and position SGH well to support growth and capital allocation priorities into FY26. I will now hand you back to Ryan.

Thank you, Richard, on slide 29. In FY26, SGH will focus on delivering operating execution through four key focus areas. First is cadence. Through the SGH way, we'll continue to push a structured operating rhythm that drives accountability, consistency, and performance deep into our businesses. Second is sales effectiveness. driving stronger sales performance and results supported by data-driven market insights, stronger customer alignment, and sales discipline. Third is operating leverage, continuing the focus on costs and margins, applying a continuous improvement approach supported by clearly defined performance metrics. And fourth is innovation, focusing on how we can utilize technology to deliver operational enhancements and improve customer outcomes. These priorities build on the strong foundations already in place and reflect the next phase of discipline execution across SGH. That discipline has underpinned our performance over the past decade, delivering a 10-year EBIT CAGR of 20% and top decile TSR of over 1,000 compared to the ASX100 at 135%. Slide 30. Looking to FY26, Westrac is expected to continue delivering services growth supported by strong customer activity and an aging fleet profile. We expect this will be partially offset by normalization of capital sales as major fleet deliveries moderate from recent highs. At Boral, operating momentum has continued into FY26. Growth is expected to be underpinned by an improved go-to-market strategy and ongoing costs and operational efficiencies. Near-term market conditions will remain mixed for COATS. However, the medium-term outlook is positive, supported by macro settings and execution of the Growth30 strategy. At SGH, we remain committed to disciplined capital management and support our stable value creation and TSR outperformance objectives. Finally, margin expansion delivered in FY25 and outlook for our core sector exposure supports SGH's earnings guidance of low to mid single-digit EBIT growth expected in FY26. Thank you for your interest and continued support. We'll now open to questions.

Thank you. If you would like to ask a question via the phone, you need to press the star key followed by the number one on your telephone keypad. Your first question comes from Niraj Shah from Goldman Sachs. Please go ahead.

Good morning, Ryan and Richard. Just one on Westrack and parts pricing in particular. I think over the last 12 months, mapping Mapping against currency has been tricky given the timing leads and lags, but is there any color you could provide on sort of the 1 July pricing dynamics?

Yeah, we can. I mean, we see a, I mean, for 1 July that there's an increase kind of mid single digit, but we do expect that to reverse in second half as we look at currency mix. It is very difficult to pick it on a currency peg, but Our view is it'll be a slight increase in first half and probably moderate, a slight reduction in second half, but net through FY26 should be a low single-digit positive. But that, again, is our forecast and expectation.

Great. And this second one on coats, I saw a timelization in the second half. It looks like it sequentially at least improved. Could you just give us some color on how that progressed through the half and the exit rates there, if possible?

Yeah, the exit rate probably tracking closer over that continuation of improvement. So it's been a gradual chase. We had, honestly, hoped to hit 60 for an end result. But the factors in South probably were a bit more challenging. The movement of gear in and around the country A key factor in that, I mean, where we sit in a July context is certainly at that 60%. So we've seen that start to step up as we're focusing on utilization. So the trend looks positive, but it's slowly moving in that right direction. That's probably how we characterize it. Great. Thank you.

Thank you. Your next question comes from Peter Stein from Macquarie. Please go ahead.

Good morning, Ryan and Richard. Thank you very much for your time. Just to extend the questioning on Westrack for a second, services revenue certainly looked like it was fairly soft in the second half. Now, appreciating that the price deflation that you saw would have impacted that, but it feels like volumes probably were pretty flat. Could you perhaps just comment on your service experience and then what do you think or how will 26 unfold in the context of both price but also more importantly volume expectations?

Yeah, I'd say in a macro context the demand through what we're seeing customer activity remains strong. What we saw in second up is probably this position which we spoke about in February around a customer focus on costs and where that can play through is a rescheduling of work, deferment of work, and that's certainly a factor that played into that demand profile. So it's probably a factor of that price play through in the result, but also just a bit of work deferment as I played in half two. It's probably playing a bit into FY26. But there's only so long you can defer the work before it has to be done, so that process we expect to see play through, but overall net we expect services growth into FY26 supported by that overall customer activity.

Thanks, Ryan. And then, if I may sneak to the second one, in terms of Boral's outlook, it certainly seems like you've colored in 26 of the lot around efficiencies. Just curious what your expectations are for volume, particularly as you see RISI start recovering. You're commenting about that in the context of codes, but less so in Boral?

Yeah. If we look around the drivers of activity in FY25, it's still, I mean, nearly half the business relates to some form of kind of resi in the context of multi-res or alts and additions within Borrowed, but we're seeing a strong commercial and infrastructure activity. We expect that to continue to play through in 26, and don't expect a recovery in that that overall raising market in calendar year 2026, so not in the first half, but do expect to start to see that play through more in half two. But again, without seeing the indicators of that from a construction activity, that's just more a field perspective than any form of forecast at this point. But overall, we're expecting volumes to be relatively consistent going into through FY26. And if there is a step up in activity, that should support some volume growth, I'd say, in 26. But without seeing the early indicators of that, our base assumption is a pretty steady volume outlook for FY26. Great.

Thanks, Ryan. Appreciate the colour. I'll leave it there.

Thank you. Your next question comes from Ramon Lazar from Jefferies. Please go ahead.

Good morning, Ryan and Richard. continuation on the COATS discussion. Just the second half, you called out the softening conditions in the southern regions. Just wondering, what are you seeing in the first six weeks of the year? Has there been any signs in those southern regions to suggest the macro has stabilized or starting to stabilize there?

Probably For that context, it certainly feels like it's stabilized and hasn't deteriorated from where that runway was in southern regions. We're seeing overall pretty mixed conditions around timing of projects in other markets, but overall, we're seeing a similar half-two dynamic playthrough in first half, but we'd anticipate that such to recover more in half two than in half one, I'd say from a coach outlook perspective.

Okay, that's clear. And then just borrow on the mid-teen margin target, it sounds like 26, you're expecting relatively flattish volumes from your previous comments. Do you think with the self-help initiatives still there that mid-teen target can be achieved on a flat sort of volume out come next year or in 26?

Look, to be honest, the volume out result from a 24 to 25 perspective is relatively flat. So that itself shouldn't impact our ability to drive the performance improvement. And the plan is to continue to optimize the business and drive efficiencies, improve customer service, that ultimately should – are aimed to support that margin expansion, and we definitely see that playing through in that current volume outlook. So to the point earlier, if we're looking at a base assumption of a pretty consistent volume outlook for 26, we do think we can drive that margin improvement through those initiatives. Price will be a factor, but a smaller factor as we look at closer to CPI type increases. But fundamentally, our focus will be on holding that price that's been realised and then looking at what we can do to drive efficiency through the business. And there's still a lot of initiatives underway that should get us towards that ambition.

Okay, great. I'll leave it there. That's clear. Thank you.

Thank you. Your next question comes from Shoria Vison from Bank of America. Please go ahead.

Morning, Ryan. Morning, Richard. Just a quick follow-up on Boral. So second half margins of around 11.7%, you know, you compare that to the first half of 14%. Would that be just normal seasonality or anything else you would want to call out? And, you know, just as an extension, If that's normal seasonality, would we expect first half margins to trend back to the first half 25 margins? I had another follow-up post that.

Good morning, Sri. I think the answer is yes, it is consistent with that seasonal adjustment. I think we highlighted at the half year that the number of working days in the second half versus first half was certainly lower, and I think we also called out the fact that you had Easter and Anzac Day effectively merging meant that there was a couple of weeks of effectively lost production right through the construction industry. So in that context I think it certainly reflects those externalities and in terms we would expect effectively a strong first half this year consistent with first half last year.

Thanks Richard. Ryan, quick one for you on Borel. Can you just give us an update on the CEO transition? Where are you in terms of the process right now?

I mean, to be honest, we've got to announce that the changes are occurring in the year only in 1st of July. So I'd say it's pretty consistent with that prior announcement. We're working through that process. I mean, it's firmly in the chair driving. the business today, and the appointment of Matt McKenzie, the COO, certainly provides a bit of support in that process, but there's not really much more colour at this point in time.

Okay. Thanks, Ryan.

Thank you. Your next question comes from Brooke Campbell Crawford from Baron Joey. Please go ahead.

Good morning. Thanks for taking my question. I had one on Westrack Pirates. wanted to check and ryan you mentioned that overall for fy26 could be a low single digit parts price increase i guess in our calcs that should drive sort of low single digit group either growth alone which gets you to the bottom end of the range so just checking if that's the right way to think about it for this year uh kind of it's a bit simplistic in looking at it as a single driver i mean other factors play into it but overall

That's the right viewpoint from a parts perspective and the notion of overall services growth. But again, the point on customer focus on cost is another factor to play into that. So if there's a continuation of how they look at scheduling work, that does play into it. But again, more timing related than anything else. wouldn't want to just take a simple parts price plug and then assume the SGH kind of earnings as a result. I don't know, Rich, did you add to that?

Yeah, go on. I think you've also, as you highlighted, Ryan, first half we get a parts price increase, but we are actually just based on currency movements expecting a decreased second half, which will actually therefore ameliorate the impact of parts price increases in an absolute sense. So I think that also needs to be factored into your thought process.

Got it understood. And just maybe one on M&A. Do you mind just providing the latest thoughts around M&A there, just your thinking, and if it's changed at all over the last, I guess, several months. There wasn't a huge amount of sort of commentary on that part of the strategy in the result material. So just checking your latest thinking there. Thanks.

Thanks. I mean, look, I think, firstly, probably want to just emphasize, I mean, the strength of the operating cash flow of the group to get our leverage below that two times objective. We had that as a target, didn't set that as a specific target for FY25. We're very pleased to do that within this financial year. It certainly gives us opportunities, but we'll be disciplined in that context. I'd point you to the material we provided at the Investor Day, because we actually, I think, ran through that capital allocation framework in detail, plus the seven core criteria where we screen opportunities. I think that's extremely transparent as far as how we look at opportunities, and that's consistent today. I think that's the best way to try and frame that. At this point, we're focused on driving our businesses and deliver FY26, but we've certainly got capacity for opportunities to emerge.

That's clear. Thanks.

Thank you. Once again, if you would like to ask a question, please press Start 1 on your telephone and wait for your name to be announced. Your next question comes from Lee Power from JP Morgan. Please go ahead.

morning ryan richard um ryan just on on the quarry volumes like they were down again price is up again which seems to be consistent with the recent trends i know that they're you've called out some just some moving passes around a deer park dispute and i'm assuming there's some weather in there should we like is there something that this trend is going to continue or is it some sort of active decision that you've made i'm just trying to break out like quarry location versus the regional roading mix versus you holding back on volumes to try and push price?

They're definitely not the latter. I'd say the dispute was a big factor into the volumes and doesn't take a lot if you look at the the total impact in a volume context. So the dispute aspect, and secondly, the overall asphalt activity is another key factor. So that has quite a big pull through in the aggregate demand. So they're the two key contributors to overall volume from an aquarium perspective, but from a strategic perspective, we're continuing to try and optimize the assets. Our focus on how do we get the the quarry assets working more efficiently, more effectively, not about constraining volumes at all. It's really about how do we drive that and how do we keep that disciplined price, but ultimately get our quarry assets working more effectively. We've invested quite a bit through the period in quarry, in both sand and aggregate quarry, both extending life and new assets. So we continue to invest to build out the portfolio and have done, a team have done a lot of work on extending quarry life, so address the short life quarry issues that somewhat existed with them or also continue to drive quarry opportunity and we want to see that volume grow and it should grow off the back of that dispute being resolved and also expectations that asphalt will start to see growth.

Okay, excellent. And then just to follow up, going on from Brooks, like obviously if you mentioned leverage down again. How do you think about level of investor capital in things like Boral and just across the existing operating business? Like you've called out a couple of things around queries that you've done. Are there any kind of near-term opportunities that you think present themselves in the existing business? Or is it more just wait for something external?

Richard? I think seminal to the capital allocation framework is that the first use of capital is actually making sure that all of our businesses have access to sufficient capital to grow organically their businesses. So in that context, we did effectively at FI sort of 18 months ago sort of an extra $300 million in BORAL to effectively improve their query position to deal to short-life queries. as well as HME. I don't think that has changed at all. Are there other opportunities in the network? We will continue to look at markets where there are opportunities. I think there are some. But beyond that, I think we will continue to support Boral to grow organically through things like recycling, so we're making investments there and we're continuing to effectively progress the development of some of their property portfolios. We certainly continue to see deployment in capital in an organic context as being constructive for the group.

Excellent. Thanks for the cover.

Thank you. Your next question comes from Nathan Raleigh from UBS. Please go ahead.

Yeah, morning, gents. First one is in relation to coats. Ryan, keen to get your thinking on the current sort of outlook for the domestic infrastructure cycle. I'm also keen to understand how that sort of aligns with your thinking in terms of your grow 30 strategy in terms of what you're, I guess, chasing in terms of addressable market and also market share opportunities for coats. And I guess finally, just how that all plays through in terms of current decisions around fleeting in terms of the composition of your fleet.

So from an overall perspective, Opportunity context. And there are a number of different data sets that we look through to get a feel for what's happening across the market. And overall, the macro models or whoever else you use highlights that there's a dip in the acceleration of the infrastructure activity, which is a little bit what it feels like, what we're kind of seeing. Question mark of that is the outlook in Victoria is a little more complex to read, because I don't think it quite has the same recovery expectation, but certainly New South Wales, Queensland, WA and South Australia all have a pretty positive outlook and we're starting to see elements of that, although you can point to deferment of project commencements, but overall the pipeline of activity remains quite strong. So the Growth30 strategy for us is about how do we look at those different opportunity sets, be it other segments we're not quite as strong in that we need to be leaning into, couple that with a much stronger focus on sales execution, and we want to grow that share. And I'd say if I look through, I mean, certainly hasn't been a highlight in the second half of FY25. We've been pushing, but haven't seen that translation of that, that competitiveness in a sales context as much as we'd like, hence the focus now on how we drive that. We still think we can grow share, we still think we've got fleet positioned in the right location, the ability to move to where there's demand, and ultimately the right base of fleet and original cost basis. So all of which goes up to play into that market activity from a fleet, profile perspective, I don't see that there being a radical change. I think the unique nature of COATS is any capex of fleet is set to look at what that 10-year demand profile is for that gear. So it's not like the fleet profile will evolve over time, and we're very comfortable with how that's positioned. We still think we can go after those opportunities in those other segments with the existing fleet profile we have. So that's not a massive change in that context. So it for us feels like it's a lot about how we focus our resources from a capability perspective and ultimately that performance perspective, it will kind of drive some of those That's what we're expecting, and as a bit of organisational restructure, so the appointment of a Chief Revenue Officer to drive that accountability of sales has been some of the steps to help drive the performance of COATS into FY26.

Thank you, and switching gears and just talking about crux. Can you give us an update in terms of your plans for marketing those LNG cargoes? And if you can, maybe just an update in terms of your thinking on potential EBIT contribution into 27 and 28?

I'll talk to that first part, Anna-Richard. Yeah, we call that out. I mean, we've got time to market because it's relatively simple. There's two key products coming out, let's say, well, I mean, a number, but LNG and the liquids. The liquids, we're likely to, you know, co-market with Shell, just give them volumes, and, you know, we'll look to enter into an arrangement around the sale of that. of our proportion of the LNG cargo. So that's going to be a focus for us in 26. It's not hugely dissimilar to the dynamic that BEACH set up with its marketing of LNG cargoes from Waitsia. So our view is we've got some understanding about that process and we'll aim to pick the right timing to market the gas. Richard, talk to Financial.

In terms of Nathan, if I talk to EBITDA, so in a cash flow context, in full production, we would expect in an Aussie dollar context, crux to throw off in the order of between $200 and $250 million Aussie dollars of cash. So in terms of earnings, it'll throw off a little less in terms of EBIT, probably about $100 million of earnings, so it certainly will be a significant earnings contributor in full production. It's a unique asset to SGH in the context of you've got a tier one operator, you've got a reasonable reserve life, but in terms of capital reinvestment, unlike an EMP company, we would literally be able to liquidate off the position via production, which makes it very attractive to SGH.

Thank you.

Thank you. As there are no further questions at this time, that does conclude our conference for today. Thank you for participating. You may now disconnect.