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Operator: Thank you for standing by, and welcome to the Treasury Wine Estates (TWE) FY '26 Half Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Sam Fischer, Chief Executive Officer and Managing Director. Please go ahead. Samuel Andrew Fischer: Thank you, operator, and good morning, and thank you for joining Treasury Wine Estates 2026 Interim Results Briefing. Joining me on the call today is Stuart Boxer, our Chief Financial and Strategy Officer. You may notice that our divisional leaders aren't on today's call, which is a shift in how we would like to present our results moving forward, with Stuart and I to lead this forum while allowing the rest of the team to remain fully focused on the business and our commercial execution. Going forward, we will, of course, provide opportunities for you to engage with the broader leadership team, including at our Investor Day in early June and other engagement events that our Investor Relations team will lead. Turning now to the key messages that we'd like you to take away from today's announcement, which are an update on the key areas we laid out in our update in mid-December. In first half 2026, EBITS of $236 million was just ahead of the guidance range from December, and statutory NPAT was a loss of $626 million, driven by the noncash impairment of U.S. assets that again, we announced on the 1st of December. While the headline results announced today are clearly disappointing, they also reflect the decisive action we are taking to return TWE to a path of long-term sustainable profitable growth. In recent months, we've cleared some major hurdles, and I'm feeling optimistic and energized about the future business we are creating. A key driver of this optimism comes from the positive underlying performance of the business with depletions growth continuing in key markets and across key brands. Most notably Penfolds, continued delivery of strong depletions growth in China. And in the U.S., outside of California, where Treasury Americas depletions grew against broader market weakness. I'll talk in some more detail about depletions shortly. Retaining the strength of our capital structure is a key priority. We reported leverage at 2.4x in line with guidance. Our decision to suspend payment of the F '26 interim dividend is a temporary measure that reflects clear and definitive action to reduce our balance sheet gearing towards our target levels. Resumption of the dividends will be the subject of future financial performance and our leverage improvement trajectory. This action is just one element of an active program we are undertaking focused on meaningful capital preservation initiatives, elevating our focus on costs and cash, and we will cover this in greater detail later in the presentation. We are also taking decisive action to maintain the strength of our brands and the health of our distribution channels. In the half, we significantly reduced Penfolds shipments in order to restrict parallel import activity. We also commenced our planned reduction of U.S. and China customer inventory, which will continue over the next 2 years in line with the time line we presented in December. As announced last week, we reached a settlement agreement with RNDC, bringing clarity to our route to market in the U.S. We are pleased to have reached this conclusion with RNDC remaining a committed partner to TWE. We also look forward to partnering with Reyes Beverage Group in six states once that planned transaction takes place later this year. And finally, TWE Ascent. Our multiyear transformation program is progressing at pace and our confidence in our ability to execute the change required is high with plans and targets to be presented at our Investor Day in Sydney in early June. So it's been a busy couple of months since we last spoke with many positive developments as we work towards creating a stronger future TWE business. Turning now to the first half '26 financial performance. and some key metrics. Three key factors impacted top line performance, including category trends, particularly in the U.S. and China, our deliberate focus on restricting Penfolds shipments that were contributing to parallel import activity and the cycling of elevated shipments in the prior year period. NSR per case fell 5% and primarily impacted by reduced ultra-luxury sales in Penfolds, which were disproportionately impacted by our actions to reduce parallel and inventory in China. EBITS margin also decreased 7 percentage points to 18.2%, driven by the change in sales mix and higher cost of doing business from the operating model. ROCE declined 1.7 percentage points to 9.5%, driven by the decline in EBITS. Prematerial items, net profit after tax was $128 million and EPS of $0.158 per share. As I mentioned earlier, we have made the decision to suspend the F '26 interim dividend as an important temporary measure. Turning now to divisional performance, where final delivery in each division was slightly ahead of the expectations we set in December. Penfolds delivered EBITS of $201 million. The result reflected the restriction of shipments contributing to parallel import activity in China and the cycling of an elevated level of shipments in the prior period associated with the initial distribution build following the removal of tariffs on Australian wine. Pleasingly, demand for Penfolds brand remains strong across key markets with great in-market execution, driving continued depletions growth. The heartland of the portfolio Bin 389 and 407 continued to perform well. Penfold's F '26 EBITS is expected to be approximately $400 million with EBITS margin expected to be approximately 40%. Treasury Americas delivered EBITS of $44 million. The result reflected the moderation in U.S. luxury wine market sales disruption from the Californian distribution transition and cycling the excess of shipments to depletions in the prior period. We saw some good momentum outside of California, with key brands showing ahead of category depletions growth. TWE also outperformed the category in on-premise led by DAOU, Frank Family and Stag's Leap. Treasury Americas full year '26 EBITS is expected to be approximately $90 million, excluding the impacts of the RNDC settlement. Treasury Collective delivered EBITS of $28.1 million in the half. The result was driven by weaker sales in the U.S. with the softer U.S. market conditions and the impact of the California distribution transition also impacting performance here, in addition to the reduction of customer inventory by approximately 200,000 cases. The Treasury Collective portfolio continues to perform in line with expectations in Australia and EMEA with the impact of commercial volume declines, partially offset by the momentum behind the growth and innovation portfolio with gains led by Pepperjack, Matua and Squealing Pig. For Treasury Collective second half '26 EBITS is expected to be higher than the first half. Turning now to depletions performance. which provides a clearer view of the underlying momentum of the business. Depletions are well ahead of the reported NSR metrics with some great growth being achieved against the more challenging market conditions. For Penfolds, combined depletions of Bin 389 and 407 were up 11%, while China depletions continue to be strong despite recent changes in the market up 17% in the period, August to December. This positive momentum is continuing into the important Chinese New Year period, which officially starts tomorrow, where we expect to see good growth on the prior year. These are very pleasing outcomes, reflecting Penfold's strong brand equity in the market and continued strengthening of the brand health metrics with demand power increasing in all key markets over the last quarter. For Treasury Americas, California depletions were impacted by the distribution transition with some improvement in scan trends visible in January. Outside of California, we achieved a material increase in points of distribution in the half, driving depletions growth led by DAOU, Frank Family Vineyards and Stag's Leap. This is pleasing and a great sign of what we can achieve when we elevate our focus on execution and the opportunities that exist in the market. For Treasury Collective, we saw positive depletions in Australia, led by Pepperjack Squealing Pig and 19 Crimes. In the U.S., 19 Crimes continued to drive declines partially offset by the ongoing momentum behind Matua. While there are some clear areas we need to drive a step change in performance, namely in California and across the Treasury Collective portfolio in the U.S. There are some very positive underlying growth trends throughout the business, reinforcing the strength of our brands and what I see as the considerable potential for growth across our brand portfolio. Behind these positive results is the momentum that our teams are driving, again, focused on execution excellence to deliver depletions growth. I've been incredibly impressed by the standard of the brand activations that I've seen in my recent visits to Asia and the U.S. in the past couple of months. For Penfolds, category-leading activations are behind the strong depletions growth in China. Our recent collaboration with [ Maybach ] was a huge success building connection between two iconic luxury brands and providers and providing buyers of high-end luxury cars, direct engagement with the Penfolds brand. We will see more of this type of activation going forward, putting the Penfolds brand at the center of key gifting occasions, feasting occasions and collaboration opportunities with other luxury brands, all to cement the luxury icon positioning of the Penfolds brand. DAOU is an amazing brand. We've just scratched the surface from a growth opportunity perspective, with meaningful runway to expand distribution of the core portfolio and further grow the on-premise channel. The expansion in category weighted distribution has been the key to growth outside of California with considerable opportunities remaining. Frank family is another fabulous brand with huge potential. We are seeing strong depletions growth driven by on-premise strength. And like DAOU increased distribution outside of California as the brand continues to build its status with the U.S. luxury wine consumer. And in the premium space, Matua continues to grow ahead of the category in the U.S. A key driver of recent growth has been expanded distribution of Matua Lighter which has a strong presence in the better-for-you segment and growing at around double the rate of the core brand tier. We believe there is a big opportunity for the brand elsewhere with Australia an increasing focus delivering double-digit depletion growth, again, led by distribution expansion in the major retailers. Ensuring we remain focused on best-in-class execution is critical to our growth ambition. Turning to the short and medium-term agenda. We have a clear set of immediate priorities guiding our focus. First, in-market execution remains a critical area of focus. I mentioned it all the time, we are intensifying our depletions-led execution performance across all markets and sustaining momentum behind our core brands through disciplined activation and distribution. Second, we are taking an elevated focus on cash right across TWE. In addition to our decision to suspend the interim dividend, we have deferred all nonessential expenditure and capital investment. We are also accelerating the program of work supporting the divestment of noncore assets and actively managing 2026 vintage intakes lower. And finally, TWE Ascent, the multiyear enterprise transformation program to create a stronger TWE with a focus on delivering attractive returns and cash generation. We are moving at pace to maximize the delivery of the previously announced cost and cash benefits which will be realized from fiscal year '27. Talking about TWE Ascent in a little more detail. We have a high level of confidence in our ability to realize the $100 million in cost savings from F '27 over a 2- to 3-year period, as previously announced, in addition to the potential benefits of portfolio rationalization. As we laid out in December, TWE Ascent is a significant program of work focused on creating a stronger under three core pillars. From a portfolio perspective, we are focused on having a portfolio of brands that are both individually and collectively positioned to outperform the market. Critical to this is alignment to category, consumer and competitor trends as well as our competitive position, ensuring that we are best placed to grow our business in partnership with our retailers and distributors. Further, as part of the alignment of our balance sheet to our future strategy, we see an opportunity to release capital. Since December, we've made good progress on this work. And today, I'm pleased to share our expectations for the key components of our end-state portfolio, which will include: The strengthening of our luxury red wine leadership in key markets, led by our existing portfolio of acclaimed luxury brands like Penfolds, DAOU, Frank Family Vineyards, Stag's Leap and Beaulieu Vineyard. Building on that, we will be strengthening our position in luxury white wine, where we already have some great offerings across the luxury portfolio, but we will dial up our focus in what is a clear growth area for wine consumers. And third, we will elevate our focus on modern refreshment through Matua and Squealing Pig. We have a great platform in place and are well placed to continue driving growth through disruptive innovation. In addition to the operating model, it's all about increasing organizational speed consistency in everything we do and delivering flawless in-market execution. And from a cost lens, we are working to materially reduce operating costs. Our target of $100 million per annum in savings is benchmarked both from a cost and performance perspective. It will be enabled through maximizing our use of data and automation with significant programs of work well underway in this regard. In terms of process and time line, Ascent is being executed in three distinct yet integrated phases of work. As the slide shows, we are currently well into the defining the future phase with work expected to progress through to the end of March. At this point, we'll commence work on the detailed future state and design. We will then lay out our conclusions, plans and targets at our 2026 Investor Day to be held on the 4th of June in Sydney. We look forward to the opportunity to share with you our plans for a stronger future fit TWE event. I'll now hand over to Stuart to cover key components of the financial result. Stuart Boxer: Thank you, Sam, and hello, everyone. We'll start with material items. A post-tax material items loss of $751 million was recognized in the half, which primarily relates to the noncash impairment of U.S.-based assets as we foreshadowed in our announcement to the market on December 1. This impairment is the result of applying more conservative growth assumptions to our U.S. portfolio in response to the moderation of U.S. wine category trends. It includes the write-down of our U.S. goodwill to zero, which we are required to recognize first under accounting standards. I write-down of selected brands, including Sterling and Beringer, and inventory, the largest component of which relates to excess bulk wine from the most recent 2025 of vintage. I should point out that the DAOU, Frank Family Vineyards and Stag's Leap brands were not written down as part of this impairment. Now moving to the balance sheet. Net assets decreased $930.9 million on a reported currency basis, with $226.6 million of this decrease due to foreign currency movements and $771 million due to the U.S. impairment. Excluding these, the key balance sheet movements overall were in line with the usual seasonal variances other than inventory, which I will go through shortly. Net borrowings were higher by $91.2 million, driven by lower operating cash flows, partly offset by the foreign exchange translation benefit on our U.S.-denominated debt. So turning now to inventory. Against the prior corresponding period, total inventory volume reduced 2% while value increased 2% or $16 million, reflecting increased luxury inventory, largely offset by a reduction of premium and commercial inventory. Current inventory decreased $231.9 million, reflecting the moderated sales expectations in Penfolds and Treasury Americas. Noncurrent inventory increased $278.4 million, predominantly driven by this transfer of inventory from current to noncurrent together with the luxury intakes from the most recent vintages. In Australia, we made good progress towards our focus on rebalancing supply and demand with initial intake reductions already locked in for the 2026 vintage, and we remain confident that we will achieve a balance over the two to three vintage period. In the U.S., we are taking action to manage our intake, starting with the 2026 vintage, where key initiatives will include the falling of selected controlled vineyards and the reduction of grower intake. Moving now to cash flow and net debt. Net operating cash flow before interest, tax and material items was $264.6 million for the period, a decrease of 38.1% on the prior corresponding period, and cash conversion was 82.4%. We expect full year cash conversion to be lower than the first half outcome driven by the net inventory build post the Australian vintage, but notwithstanding the reductions of this intake I just mentioned. Capital expenditure was $76.8 million and included maintenance and replacement CapEx of $56.3 million and growth CapEx of $20.5 million. This growth CapEx largely related to the in-flight BV development in Napa, which is scheduled to complete at the end of this half. Full year CapEx is expected to be approximately $125 million, reflecting the completion of projects currently in progress and a tightening on all other nonessential CapEx. Turning now to capital management. Leverage was 2.4x in line with the guidance provided in December. We expect full year leverage to be higher predominantly due to the flow-through of the lower trailing 12-month EBITDA, together with the lower cash conversion. Our liquidity position remains healthy with $1 billion of cash and committed undrawn debt facilities on hand and a well-diversified debt maturity profile with no meaningful debt maturities until June 2027. And we retained significant headroom to the financial covenants under our borrowing arrangements. As we've already mentioned, we have an elevated focus on near-term cost and cash initiatives, including deferral of all nonessential or committed capital expenditure, divestment of noncore assets and managing vintage intake, and we are seeking to accelerate the realization of Project Ascent cost and cash benefits in order to reduce leverage towards target levels. The decision to not pay an F '26 interim dividend was a key part of this focus. With the resumption of dividends in future periods, subject to our financial performance, and its leverage improvement trajectory. Thank you. I'll now hand back to Sam. Samuel Andrew Fischer: Thanks, Stuart. In summary, our first half '26 performance and full year expectations reflect both the impact of conditions in our key markets and the deliberate actions we have taken to maintain brand strength and ensure healthy sales channels. Looking ahead, we expect second half EBITS to be higher than that delivered in the first half. Importantly, the underlying performance of our key brands remains positive as reflected in the depletion trends that we presented earlier. Our immediate agenda is focused on three key priorities: one, market execution; two, cash focus; and three, accelerating the TWE Ascent program of work with high confidence around expected future benefits. Combined with our strong business foundations, including a powerful portfolio of brands with leading market positions, the continued outperformance of our key brands in key markets underpins our confidence in returning TWE to the delivery of sustainable profitable growth. I'm full of optimism and energy around the progress we're making and the future we are shaping. While we have work ahead of us to address some key specific areas, it is the underlying strength of our brands and wealth of opportunities in our markets that continues to excite me. Thank you again for joining us today. I will now hand over to the operator to take your questions. Operator: [Operator Instructions] The first question today comes from Ben Gilbert from Jarden. Ben Gilbert: I was wondering if you could just talk around pricing and has there been much investment in wholesale pricing in the China market to clear inventory, and it does look like there's been some further weakness on the pricing front through January. Samuel Andrew Fischer: Yes. Thanks, Ben. I think we're still in the midst of Chinese New Year. We're just getting some more data. We haven't changed anything in relation to our wholesale pricing, and we haven't given any kind of extraordinary discounts that would allow there to be any change in pricing. I do think as parallel dries up and we are seeing the parallel drying up and kind of those parallel operators look to get volume elsewhere. There could be some increased competition in the market, and there may be some margins that distributors are using to get that business. But generally speaking, I'm feeling very positive about this parallel initiatives that we're taking. We're getting very positive feedback from all of the formal distributors inside of China, and I will expect to see more stability and elevation in our wholesale pricing going forward. Operator: The next question comes from David Errington from Bank of America. David Errington: Sam, look, I suppose the key issue, the most pressing issue for investors right now outside of the operating performance, is the balance sheet repair, and that's probably where I'll address my question. If I look, you've got -- you've literally got, what, $2.5 billion worth of inventory at cost your payables basically broadly meet your receivables. So it's literally -- you've got $2.5 billion of cost that is your future growth of the business. Now how do you manage that -- how do you manage the company? I'm really intrigued because as you know, I'm a massive bull on Penfolds and the less said about the U.S., the better. How do you manage this where -- two of your three priorities is cash management, cost control because to me, the most -- the best way out of this balance sheet predicament is to grow, get your earnings growth back you're going through this transition period at the moment where you're rebasing. But I would like to think that that's not what we base our earnings growth on. How do you get your growth back whilst maintaining and repairing your balance sheet. It's going to be a pretty hard act. I want to see growth coming back for Penfolds. So I want to see growth. I don't want to see cash management. I don't want to see -- I just -- that's -- I just expect that. I want to see you growing again. So how do you manage getting that growth back, but at the same time of being in these constraints of having to control your cash and having to cut costs because I worry about that as to whether you can do -- you can wear two hats. Generally, growth companies don't have to worry about cost control. They just manage their cost. They don't have the cost control. They don't have to cut costs. How can you get both, if you like? Because if you can, it will be fantastic, but can you do both? You've got all this inventory, your payables equal, your receivables, you're in a wonderful position, but you need growth. How do you get both Sam because that's the magic source for mine? How do you do both? How can you do it -- how do you do it? You've been there, what, 100 days? How are you going to do it for us? Samuel Andrew Fischer: So thanks, David, for your question. And I'm glad to see that we agree with each other because I think you're right about growth. And I don't know how many times through that presentation, I mentioned execution, activation distribution gains, momentum at a core brand level. And that's what underpins the whole of what we're focused on as we go in at an operating unit level in the business. . That's a cultural shift in relation to what we do on the shelf, what we do on the menu, what we do with wine consumers and activation across core components of the business. And I'm really encouraged by some of the early signs. You're right. I haven't been at this for very long. But we've wired depletions growth and execution standards into our performance rhythm. And that is the premise of the conversation we have with all of our teams every single month. The positive news coming out of China around momentum of the Penfolds brand is you just can't underestimate that impact for us. It's early days, and we're not even in the Chinese New Year, but lots of what happens at a brand level happens before the actual celebration. And we've got some great anecdotal feedback on the strength of the brand, how well it's being received from a gifting perspective in the year of the horse. So lots to be really pleased with there. I think DAOU and Frank family Stag's Leap, I've talked a little bit about in the U.S. and Matua again, all growing outside of this disrupted channel of California. And I've met with BBG on now twice in the two trips that I've had to the U.S. And I'm increasingly confident that they're really getting their arms around our California challenges so that H2 will be much more positive than we saw in H1. So we do need to focus on discipline inside of our organization. That discipline starts with how we execute and how we drive depletions, but it also starts with being fiscally responsible. And we just have to make sure that we spend all of our money on supporting the growth that you talked about and that we control our cash spend through CapEx. So that's the short term. And in the longer term, I've talked a lot about Ascent. It's difficult for me to bring real color to the momentum that Ascent is having inside of our business in clarifying exactly the portfolio that we will execute and ensuring that we've got a fit-for-purpose operating model to support that growth agenda and that we remove where possible, any duplication and wastage, so we can free up funds to support growth. So it's all really clear for us, but you're right, depletions sits really at the core of everything. David Errington: So clarifying, once, '26 transition year. I get that. Is '27 a transition year as well? Or can we -- can this start materializing getting some growth back? Look, Penfolds 17% depletions is terrific. Coming into Chinese New Year. But do we have to go through 2 years of transition. Is that what you're asking us, Sam? Or can we just go through 1 year and then we can reexpect to be coming back again. That's important because if you're asking for 2 years, that's fine. But what are you actually asking for 1-year transition plus we reignited? Or do you want 2 years? Samuel Andrew Fischer: I think, David, the process of Ascent, we've said is multiyear. This is a really big transformation program, and we'll continue to develop that project through that period of time, and we're dealing with some things inside of the business that are going to take longer than 1 year. And we've talked about some of those inventory challenges. But in relation to building momentum behind the core brands that we're going to focus on, I expect that momentum to continue to build through that period of time while we deal with some of those structural challenges that we've talked about. Operator: The next question comes from Shaun Cousins from UBS. Shaun Cousins: Just a question regarding Penfolds and this is possibly better for Tom King, but I learned he is not on the line. I think in October '25, the company admitted that sort of reallocating product previously you marked to China was less of a plan as there was risk of that product going -- ending back up into China by way of a gray market. Did Penfolds kind of lack curiosity around the ultimate end market demand for those non-China and non-Australian markets? Or was demand generation ineffective? Or was there just pressure reallocated? It just seems to be that this is another reason for your -- the challenges you have in Penfolds is that you haven't built enough demand in other markets and it looks like you've lost a little control of your supply, please? Samuel Andrew Fischer: I think those markets do look disrupted because of the really specific actions we're taking around operators that we've identified as contributing to parallel. But actually, when you look underneath that and we look at the performance in key markets like Malaysia, Thailand, Singapore, and we see how that brand is being developed actually is outstanding work. One of our Board members was up and saw an activation at a table in a restaurant where it was just full of Penfolds. So I really think the brand in the markets outside of China is in great health. The numbers are just being disrupted a little bit as we kind of normalize what is domestic consumption versus what is consumption that's been driven from outside of the markets. So I think that's the best answer. I think the brand is in a great place in all those markets that I've seen outside of China. Shaun Cousins: But how are you selling too much product in because -- are you not able to appropriately determine what the end market demand is because if you're worried about product going in that it ends up in China, then that would suggest you don't have your arms around the appropriate end market demand, even though the comment you've made is pleasing around the brand being developed well, but it looks like you don't appropriately understand how to size what that true demand is. Samuel Andrew Fischer: I mean, I've used this word before, but I think we have had a really forensic look at volumes in some of those markets. We've looked for anomalies. We've looked at what doesn't seem to add up to what we would expect to be in market consumption where we've seen sort of anomalies in specific channels we've taken corrective action. Difficult for me to speak about the past because I wasn't here, but certainly from now going forward, we've made really significant corrective actions to erase those anomalies and focus wholly and solely on in-market depletion and execution. Operator: The next question comes from Richard Barwick from CLSA. Richard Barwick: I just want to just clarify the commentary that you provided on Americas EBITS So about $90 million for FY '26. But you actually -- you've got -- I guess, you've got the caveat there, excluding any benefits and costs of the RNDC settlement. So can you just clarify exactly what those benefits and costs are as they relate to EBIT, please? Samuel Andrew Fischer: So I think -- Richard, I think the way that I'd sort of answer that one is that we've described that there's a benefit coming from the California settlement, and there will be some costs associated with that. The net of the benefits less the cost will be a positive number. So that's the first piece. And then the guidance we tried to give you around that $90 million is to say that is excluding the flow-through of any of that benefit. So treat it for the purposes of trying to think about your outlook is just excluding that net positive benefit from your numbers, if that helps you. Richard Barwick: All right. So -- but when we get around to August, Stuart and you're reporting Americas EBIT, therefore, we should be thinking about $90 million, then plus some small net positive. Samuel Andrew Fischer: That's probably right. And whether we ultimately treat that as a material item or in the income. We haven't finalized yet, Richard, but we'll be clear on that when the results come around. Richard Barwick: Okay. And then one other clarification on the Americas EBITS You also talked about as far as for the group, you mentioned obviously second half growth -- sorry, second half EBITS to be a little bit higher than first half. But the sort of the -- I guess, the reference or the description that goes along with that is improved momentum in California following completion of distributor transition. How -- where are we in that? Is the when do you sort of classify the distributor transition has completed? Has that occurred already? Again, just trying to get a little bit of better understanding there, please. Samuel Andrew Fischer: Yes, sure. Thanks, Richard. I think when we transferred the business to BBG, there were many others that transformed and there were some real operational challenges that they went through, which really impacted our ability to put product on the shelf. So having met with BBG, the CEO in January, I got great comfort that they've rigorously worked through some of those operating challenges. We saw some real improvement in January. It's only 1 month. We're not declaring victory. But I guess what we're saying is that we would expect to see continued improvement through the first half on the back of the significant interventions that BBG has made to their operation. Richard Barwick: Okay. All right. So for what you can see, it looks like it's progressing, but it's a process that will take place across the half. Samuel Andrew Fischer: Yes, I think that's fair. . Operator: The next question comes from Sam Teeger from Citi. Sam Teeger: Just another question on the U.S., please. How are you thinking about the potential disruption outside of California and the seven other states that RNDC is getting out of. I know none of them are as big as California, but looking at market data collectively, they are bigger. And I guess when will Reyes finalize their sales plans for your brands in these markets? And what the potential here that the sales plans could be lower than what RNDC? So you have the view and just how does the inventory transfer across Will that be clean or anything we should consider on this? Samuel Andrew Fischer: Thanks, Sam. I'll try and answer that. I just had a little bit of trouble hearing you, if not I'll get Stuart to supplement it. But Reyes is a business we know well. I've met with them and have known them in my previous life. So a huge distributor in the U.S. They've got multi-beverage capability, having taken on a large portion of the RNDC business in California. So we feel great confidence. I believe that the transaction is progressing. And I don't know exactly when it will complete, but we would expect in the half. So that's very positive and I think goes a long way to supporting and strengthening RNDC's overall balance sheet. I think from our perspective, it will be about 5% of our business, again, reducing our reliance on RNDC and they're taking over the RNDC business. So lots and lots of the capability that exists in those -- in RNDC is transferring to Reyes. And all of those people know our brands really well. So we're expecting really a much, much smaller disruption through transition. And we're already speaking to Reyes about kind of building plans. So again, we've got a really seamless transition once the transaction is complete. So I think we feel great confidence. We're working with the team already, and we've got lots and lots of respect for Reyes as a business. Stuart, anything to add? Stuart Boxer: Look, the only thing I'll say just to sort of further clarifies it's quite different to the California transition in the way that Sam described in that the arrays will pick up the business people, et cetera, from RNDC. So it picks up an operating business. which makes it a whole lot simpler from a transition perspective than what we've seen in California where BBG basically had to gear up from a zero start. So it's quite a different situation there. Obviously, these things always have elements of change associated with them. But fundamentally, we see us being significantly smoother than what we saw in California. Operator: The next question comes from Michael Simotas from Jefferies. Michael Simotas: First one from me, another question on the U.S., if I can. When you repurchase the inventory from RNDC in California, you're going to be holding it on your balance sheet at a cost which would effectively give you 0 gross margin. What confidence do you have in your ability to recover that cost? And is there a risk that you will need to impair that inventory? Samuel Andrew Fischer: Look, we're pretty confident about that. We're sort of well aware of the nature of that inventory, our team sort of working through that detail and that we are confident that inventory will be sellable in the way you described. Obviously, the shape of the P&L will be a bit of a challenge in the way you've described, but we'll sort of help you out with that when we get to the full year. So you can see through it. But certainly, what from what we see, it's going to be from a recovera perspective. Michael Simotas: And then a broader question as part of Ascent plans to evolve the portfolio further. There's a lot of debate around structural versus cyclical impacts or factors in wind. But one thing that seems pretty clear in every market around the world, including China as consumer preferences are shifting towards lighter red and white. Outside of Frank Family, none of your brands are really known for either of those styles. What does that evolving the portfolio look like? And is that organic? Or would you need to make more decisive -- or take more decisive action on the portfolio either exiting brands or potentially acquiring new brands? Samuel Andrew Fischer: Yes. Thank you, Michael. Yes, I think that's right. And the work we're doing is data led and future back. So we sort of have a look sort of 5 years down and look at the big trends we see at a category level and overlay our brands against those trends. And I guess that's where the luxury white came from. We sort of looked at that and said, "Gee, we can see luxury white wine having really interesting runway starting to get a lot of traction". And we looked at our portfolio and said, well, we've got some really incredible brands here led by Yattarna, can that play a much, much bigger role as we look into the future. Luxury red, of course, we can still see that whole premiumization trend over the 5 years, playing a real role as well. So they're playing right into the core. Again, when we look at some of these lighter styles, that's where we really looked at Matua and Sauvignon Blanc continues to play a real recruitment role for the category. It brings wine into new occasions on the back of Marlboro, Sauvignon Blanc and we've got an incredible brand and an incredible position in Marlboro. So that's one -- that's actually playing straight into that, what we call refreshment or lighter styles. And where we've got other gaps, you mentioned things like Rosé and perhaps Pinot Noir. We're very much looking into our portfolio and saying, how do we innovate or how do we bring a variant forward so that we can really play a much, much bigger role in those growth areas. So again, without getting into too much detail, a whole lot of opportunity there. We're already doing it with brands like Squealing Pig, they're disruptive. They're innovative but how we do that with our luxury portfolio, we're still working through. Michael Simotas: Okay. So it's more about scaling products that you've already got and potentially launching new products within existing brands rather than anything more dramatic than that. . Samuel Andrew Fischer: We're blessed with a wealth of brands and products and vineyards. So we've got everything we think we need to really play a much, much bigger role in the parts of the category that we see as having real growth potential. That's our priority. Operator: The next question comes from Tom Kierath from Barrenjoey. Thomas Kierath: Just a bigger picture one. I suppose like over the last 15 years or so, every 4 or 5 years, TWE have these kind of big write-offs, overstocking issues, how do you kind of improve your processes? And I suppose, understanding of where inventory is so that you don't have these issues going forward. I mean, it would just give people a lot more confidence that the reported numbers are actually a lot more reflective of what's going on. Do I have any color you can provide on that, Sam? Samuel Andrew Fischer: Sure. I mean difficult, again, just to talk into that past. But I do think this medium- to long-term strategy we're employing through the Ascent program is going to give us much more clarity. We're really looking at the category, understanding the trends and then understanding kind of how we wire ourselves to tap into those trends, but also to compete harder. And I really do see that as an opportunity. I've mentioned execution and activation and all these words so often, but culturally inside of our organization. what is going to underpin future and consistent growth is winning in the marketplace. And I keep talking about how blessed we are with the portfolio of brands that we've got, the market positions that we've got. We've got to take all of that DNA and turn it into winning in market through execution. That's what will underpin the consistency of the future. Some of that's a bit of a cultural shift inside the business. Some of that's taking a much, much longer-term view and making sure we're positioning ourselves against those trends. So I'm conscious of the change, and I'm conscious of this history. But I guess I'm thinking about it from a forward perspective and saying, how over the next 5 years, can we position ourselves to drive that consistency. Operator: The next question comes from [ Noah Hunt ] from MST Financial. Unknown Analyst: I just had a question on the composition of the Americas EBITS, so if I take down earnings out of the Americas earnings result, the rest of the luxury wines in the Americas looks to be close to, if not loss making. Is this the right way to look at this? And if so, why is this the case? And what's the fix going forward? Samuel Andrew Fischer: I would -- look, the reality is that, that Treasury Americas business is one business. It's not run as five individual P&Ls with different brands. So it's difficult to extract one brand out of it and look at the rest. But I certainly understand the mathematics that you've tried to do there. I think the component of the results we've already talked to around what's driven the top line performance and some of the issues there in California, et cetera. So you've got a result driven by the things we've talked about, which has resulted in an outcome that you've described in a way you have. But I think back to what we're focused on, we're focused on driving depletions growth across the entire portfolio to move through this period of distributor transition in California to be able to move through the period of working through that distributor stock that we've talked about over the last couple of calls. To get ourselves into a position where we've got a well-performing portfolio of brands in that market. And so at a point in time, I get your point, but we're sort of taking a long-term view as to the outlook of that business overall with that collection of brands. Operator: The next question comes from Caleb Wheatley from Macquarie. Caleb Wheatley: Just a follow-up on Penfolds and the depletions in China. I appreciate the earlier comments, there wasn't any material change from wholesale pricing or funding on that side that plus 17% depletion still looks relatively strong compared to PCP. I just came to understand if there's anything else to call out from your respect in terms of what drove that number? And any potential thoughts on how it may trend as you work through this destocking process, please? Samuel Andrew Fischer: Thanks, Caleb. I think, look, we've had Tom has been up in China in January. He's been in the south. He's been with distributors first, second and third tier distributors. And the brand is in great shape is his feedback, which is terrific. It's being mentioned in the same sentence as Moutai as being two of the brands through the Chinese New Year at that point that are doing really well. I think what's underpinning that performance is, one, the strength of the brand. And two, the strength of the team and the activation the team is working on in the market. And we talk about kind of that [ Maybach ] execution, but it's extraordinary to see what that drove on social media and at a brand level through that touch point. So I really think it is about kind of quality execution. It's about engaging with consumers where they are, our social media activations. And also the fact that we've got such confidence now coming from our Tier 1, Tier 2 and Tier 3 distributors. They've seen this really definitive action that is designed to strengthen their position in the market, and I think that's giving them confidence that they can continue to support and invest in Penfolds for the longer term. So there's just a suite of things here that are getting us excited about, one, this Chinese New Year, and two, kind of the future. And I guess the all of the things that underpin that depletions momentum to the half and the expectation that it's going to continue. Operator: The next question comes from Phil Kimber from E&P Capital. Phillip Kimber: I was going to follow up on that question on the depletion slide. I mean you quote outside of China, you've got some specific data points, whether it's Quantium or Nielsen or whatever, but it doesn't seem to have one for China. So where is that depletions data coming from? Is that, I guess, you asking our distributors about their depletions? Or is it actually sort of measured consumer data? I just wanted to understand that a little bit better just because 78.2% a very strong number, and it's no doubt the brand is strong, but it does seem a lot higher than the sort of feedback you're getting over the overall wine market in China? Stuart Boxer: Yes, Phil, it's the depletions from our distributors out. That's the data we get directly from them. And it's for us sort of the cleaner set of data. As you know, the market data is a little patchy in China. So we think that's just the best and cleanest number to use. And it tends to be its depletions from our Tier 1 distributors. And certainly, historically, we have found that the Tier 2 is are not holding a lot of stock. So therefore, those depletions are a pretty good guide. We do also compare and cross check with data points like e-commerce data in Nielsen as well, which tend to also be pretty supportive of those outcomes. But e-com is a smaller part of the market and Nielsen is not necessarily 100% reliable. So we think that depletions number is the best to share. Samuel Andrew Fischer: I would only add that it's -- the brand up in China is it doesn't really act like you would expect a brand from a wine category to act. It's a genuine status symbol that plays a key role in gifting. And as we go into this CNY period, it's countering all of the trends of wine. In fact, all of the trends of spirits, and it's really behaving like one of the status gifts that are given during the CNY period. So outside of just comparing it to the category, it's really leading the whole industry. Phillip Kimber: Yes. And then I guess my second question is -- and I don't expect obviously a hard number, but your second half EBITS flat Penfolds, but growing in the other two divisions. But then we've still got this sort of 2-year process of resizing shipments to depletion. So I think it's sort of along the line of David Errington's question. Just -- to the extent can earnings effectively drop down again in FY '27? Obviously, it depends a bit on the underlying growth rate, but just -- the underlying growth of the business. But just in terms of rightsizing depletions and shipments. I mean, is a big chunk of that still yet to happen and will happen in FY '27. So we should sort of have that in our thinking. Samuel Andrew Fischer: Yes, Phil, I understand what you're trying to do, and I know it's a difficult one, and you've sort of outlined some of the components of the challenge there. So I mean, the components and the building blocks of this, obviously, to your starting point is the underlying depletion performance, and you've heard a lot about what we're trying to do to drive that. So this half, and this year, you're aware that we've already dealt with a reduction of customer in Treasury Collective by about 200,000 cases. We've made good progress on the parallel piece in China in particular, only a modest impact on the inventory in Treasury Americas in the half. But obviously, in this half, we're now buying back that California piece, which is an important part of the overall equation. So we certainly feel like we're making good progress this year. But to your point, in terms of how it's spread between the 2 years and the impact on the year-to-year number, it depends ultimately on the depletion growth and how that is all balanced. And what we're trying to do is to sort of end up with a sort of pretty good landing, but there's a lot of variables. Operator: The next question comes from Michael Toner from RBC. Michael Toner: Look, I wanted to drill in a bit more in the U.S. And I just want to understand to what extent your Americas outlook might reflect the possibility of further disruption caused by some of the issues RNDC seems to be experiencing nationally even outside of California and the markets sold to Reyes because some of those issues seem to extend well beyond California. Apparently, they've lost a couple more suppliers. There's news reports of some layoffs kind of planned for Feb. And that seems on the face of things that's something that could cause quite a bit of disruption. And I know that Reyes -- sorry, RNDC still accounts for about 20% of your NSR ex California in Reyes accurate? Samuel Andrew Fischer: Yes. No, it's about 18% of the business once the Reyes transaction completes. And it's useful to note that actually outside of California, RNDC grew in the half for us by 2.7%. So that just gives us a bit of an indication of their operating health. I do think that the work they've done on the balance sheet by the refinancing has made a material difference. And the Reyes transaction, again, the sale will make a material difference. So this is still a really substantial business, particularly in Texas. And from what we can see through our intelligence on the ground, still operating really, really well. So they're doing some concrete things to shore up their own balance sheet. And I guess through the conversations I've had with their CEO, which have been multiple, we've got confidence they're going to continue to be a great operator for us in the remaining states once the RNDC deal is done. So I will continue to have close dialogue with them. We'll continue to work on all of the plans to continue to drive our business forward. And I think we've got confidence that they'll be a partner with us for the longer term. Michael Toner: Great. And just quickly on Reyes. I know it's a small proportion of your NSR, but my understanding is they don't have a huge amount of experience selling luxury wine. So I'm sort of wondering what you think needs to happen for them to scale up that capability? And sort of do you anticipate that being a hurdle for you guys because I sort of -- I don't imagine they can sort of just instantaneously pivot their sales force to sell luxury inventory, if it's not something they've had a lot of experience doing historically? Samuel Andrew Fischer: Yes. No, I mean I think they've predominantly been a beer distributor. And in California, obviously, that's extended into spirits. And I think they are more and more moving into being a multi-category distributor in the U.S., certainly in relation to the market, all of the channels, all of the accounts, they know them. And they've got reach that's probably beyond any other distributor because of that. So that actually creates a bit of an opportunity for us to look at potentially some new channels. . But very importantly, they are acquiring the RNDC business, which has got all of that capability and long history of distributing wine and spirits. So they see that as being one of the key benefits of the transaction is that they're bringing that capability into their organization and ultimately, that can be infused across their organization. So in some ways, that migration is giving us great comfort. Operator: The next question comes from Mark Southwell-Keely from Select Equities. Mark Southwell-Keely: We're seeing with respect to some Baijiu distributors and even including Moutai. We're seeing the -- some of the Baijiu brands adopting strategies to help with the distributors working capital. So the working capital of some of these distributors is still under significant stress. And we're seeing some of these brands, including even Moutai, adopt various strategies to assist, for example, selling on consignment and also adopting some pretty aggressive SKU rationalization and not overburden distributors with SKUs that are unpopular with consumers. I'm just wondering what your thoughts are around what you're seeing happening with the -- in the Baijiu sector and with the distributors and perhaps whether you might or to the extent that you guys might adopt similar strategies to assist the distributors? Samuel Andrew Fischer: Yes. Thanks, Mark. Obviously, we are watching the Baijiu category. There's been -- we got lots of noise and lots of challenge, including some innovation with lower [ ABV ] as they try and address some of the structural challenges in the market. But I think some of that announcement that came out from Moutai had a positive impact, actually brought confidence back in where they very proactively addressed some of the concerns of their distributors. And some of that's flowed on to confidence at a category level. And they've obviously shored up their pricing, which has also helped. We're not -- we have a very, very long history with our distributors. They've really been partners with us in growing our business in China. And I would say we're privileged to have their strength behind us. Where it comes to their working capital, I guess, the inventory reduction program that we're driving our depletions through is going to be material for them in relation to realizing some working capital but we haven't looked at any other support nor have they asked, and we're certainly not looking at consignment or anything like that. I met them in December. I would say it was a really terrific meeting. We took concrete actions on parallel. I think they've been really delighted by that. We're still working all of that volume through, but they're seeing some real positives in the market through that reduction. So I feel like the confidence that our distributors have in us is really strong, and we'll continue to leverage that as we build the brand going forward. Mark Southwell-Keely: What about in terms of secure rationalization, perhaps? Samuel Andrew Fischer: I think that through the Ascent program, when we talk about simplification and having clarity of roles, across the portfolio. That is in scope and where we can drive simplification, bring more focus to the portfolio to drive kind of that real upside potential. We will look at it and Penfolds will be one of them that we look at, but no decisions made as yet. Operator: The next question comes from Jason Palmer from Taylor Collison. Jason Palmer: Just in respect of the Cali and non-Cali redistribution of inventory, so the $100 million and the $125 million. How much of that occurred in 1H '26? And what's your assumptions around 2H '26 in your outlook? Samuel Andrew Fischer: Yes. So I sort of touched on it a little bit earlier. So in terms of the first half, it was a very modest reduction of inventory within the Treasury Americas portfolio. And whilst it's not relevant to the $100 million and $125 million numbers you just referred to, we did take 200,000 cases out in relation to treasury collective in the first. Half. In the second half, we are obviously completing the RNDC settlement transaction, including acquiring all that inventory. So that deals with the inside California component as part of that RNDC transaction, so that will occur during the half. In terms of what happens in relation to the rest, we remain committed to that 2-year program where we are working through that over the course of that period of time. But in terms of the specifics beyond that, ultimately, will be dependent on depletion growth as well. So we can't give you any further guidance on that at this time. Jason Palmer: Okay. Just to be clear, the hundreds in California is cleared with the RNDC transaction in the second half, is it? Samuel Andrew Fischer: Yes, it is. Sorry, I dropped out. Yes, it is. Operator: The next question comes from Bryan Raymond from JPMorgan. Bryan Raymond: One is just on the dividend and the balance sheet. Just interested if there's any sort of threshold you'd be looking out for when you reinstate the dividend? Is there a -- do you need to see that gearing level back in the target range or below a certain threshold to begin bring that dividend back? Samuel Andrew Fischer: So we haven't been as specific as that, Bryan. We've talked to this program of getting that gearing down over a 2-year period and the decision to reinstate will really be dependent on the progress we're making and that trajectory we've talked about down towards that 2x. Now the factors that will feed into that will be where we are at in terms of things like Project Ascent, the timing of the cash flow benefits that come out of that, both in terms of the cost benefits, net of any sort of cost to achieve those and any proceeds from the portfolio reduction. But it's too early to call at this stage the timing of those. But obviously, as we get closer to the end of the financial year, past the June Investor Day, we go through that, we'll have some greater clarity on the timing, which will help us to have a greater sense of the timetable. But ultimately, it will be a decision for the Board that they'll make on when the dividends are resumed. Operator: The next question comes from Shaun Cousins from UBS. Shaun Cousins: Just a question regarding the transaction you did with RNDC -- or one regarding the RNDC inventory in California. Can you discuss what the other options that were available for this inventory as it seems to have been a transaction where the Treasury -- TWE gearing has gone up? And can you I guess, discuss the risk around your broader EBIT, if these volumes crowd out higher-margin volumes and maybe further to Mike's sort of question, what's the risk that you actually need to invest more A&P that these become not just neutral gross margin or gross profit transactions, but you actually need to invest more in A&P. I just keen for you to sort of amplify the alternatives you looked at and then just sort of a little bit more why it was the right thing for TWE shareholders for you to add gearing and then the risk that these are actually crowd out higher-margin sales or are actually EBITS loss-making to sales, please? Samuel Andrew Fischer: I think the way that we've thought about that, and it really relates back to when we disclose sort of the $100 million and $125 million that we need to do with its excess stock. The distributors are holding that we need to get down over a period of time. And the impact of working that excess stock through the system, if you like, is that it replaces us sort of selling stock out of our own inventory to work through that. Now whether, in fact, that was achieved by virtue of RNDC transitioning or transferring that inventory from California into their other markets across America or whether we came to the position that we came to, which is where we bought that inventory back is effectively a timing difference anyway, Shaun, in terms of how that flows through. But our perspective there was that a sort of clean outcome for California, where we've got that inventory back in our control, and then we can control how it gets distributed and redistributed across the market. and doing that in a way that was beneficial for RNDC from a cash flow perspective was linked up with that settlement was actually well -- definitely the best decision for the company from a whole lot of perspective. Shaun Cousins: And the risk that you sell these actually these are negative EBITS loss-making sales, like you have to put more A&P behind these sort of sales to try and move it along? Samuel Andrew Fischer: I think it will be the same in that we're ultimately driving depletions in the marketplace. And the A&P that we put behind the brands is to drive depletions. And that focus on depletion growth, again, you've heard about today doesn't really change. Now clearly, the faster we can drive depletions growth across the business, the faster we can work through this inventory and that's the broader objective that we are focused on anyway. So it doesn't actually change our execution focus at all, Shaun, because we are definitely focused on just driving depletions growth. Operator: There are no further questions at this time. I'll hand the conference back to Sam Fischer for any closing remarks. Samuel Andrew Fischer: Thank you very much for your time this morning. We look forward to updating you at our Investor Conference on the 4th of June and through our full year results. Thank you very much. Have a very nice day.
Operator: Ansell Limited Fiscal Year 2026 Half Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Neil Salmon, Chief Executive Officer. Please go ahead. Neil Salmon: Thank you, and good day to you all. It's a pleasure to join you this morning from Melbourne on what is my last day as Ansell's Chief Executive Officer. And I hope you will agree that we're reporting to you a pretty good result to go out on. But more important than that, I also hope you'll hear through this presentation that I believe we have very solid foundations in place that should drive long-term shareholder value creation. So here, the matters we'll cover today. I'll give you the highlights of our performance overview. You'll see another half of double-digit earnings growth. And then against that critical goal, we are on track to offset the effect of tariff costs. I'll then dig a little deeper into the drivers of our growth and give you our usual sustainability update. I'll then hand over to Brian Montgomery, who will highlight the continued improvement in Ansell margins and a strong cash result. And then it will be my great pleasure to introduce Nathalie Ahlstrom, who is succeeding me today as Ansell's Chief Executive Officer and Managing Director. Although today is her first day as CEO, she's been with us the last 3 weeks, starting to get up to speed on the Ansell business. She'll talk to our decision to maintain guidance and continue our buyback program. And then Nathalie, Brian and myself will be available to take your questions at the end of the call. So let's move forward to the results summary. And we continue with our usual practice here of restating at the side of the slide, the goals that we outlined to you at our last reporting period, so August, as we began this fiscal year in the middle is my assessment of our progress against those goals and summary P&L on the right. Talking to organic constant currency sales growth, here, we committed to revenue growth. The reported organic constant currency was a moderate sales decline of 0.6%, but remember that we called out in this period last year, $27 million of sales, which at the time, we said would not be recurring sales. So when you adjust for those, we see a 2% overall organic growth on an adjusted basis versus the first half of last year. Critical, as you're well aware, was that we offset tariff costs through pricing. I'll comment on this in more detail in a moment. But for now, let me assure you that all price increases are in the market, and we see generally good customer acceptance. Strong results on earnings, improvement in GPADE margin. And even though the net tariff effects are slightly dilutive to GPADE margin percent, we still grew GPADE margin through continued strong performance by the KBU delivery of the synergies associated with that acquisition and a broad improvement in productivity arising from the final piece of APIP product savings but extending into what was generally a good result in terms of productivity improvement in operations. And then later, Brian will summarize a strong cash result and an overall good EPS delivery. And so to the right hand of the page, almost 20% adjusted EPS growth. In a world around us that didn't give us a lot of tailwinds, I think is a very creditable result. So let me now talk a little more detail to the effect of U.S. tariffs. On an annualized basis, a 12-month basis, we now estimate the additional cost to our U.S. business of $80 million. And we're on track to offset that in full through a combination of price increases and some other mitigating measures, too. Price increases are now in market, as I mentioned, the first wave was put in around June, July, and the second wave was completed by the end of calendar year 2025. Our intelligence at this point is there's generally good acceptance of those price increases. And so we feel we're well on track against this very important goal. And if I look overall at the equation of price increase, cost increase and volume effects, the net EBIT effect of all of those is in line with or even slightly ahead of where I thought we would be at this stage, which is very satisfying as clearly, that was a very ambitious goal that we set ourselves that we're on track to deliver. Outside of the U.S., we have seen some negative demand impacts from the second order consequences of tariffs, particularly in economies that are heavily dependent on exports to the U.S. So most notably, Mexico, where Ansell has a large market share, a large market presence. It's one of our top three or four countries. And there, we have seen negative demand effects. So some emerging market performance, a little weaker than expected in the half, but our mature markets performance tracking very well and very satisfied with where we are there. So now let me give you the breakout by the segments. So -- and for both Industrial and Healthcare, I'll talk to those adjusted year-over-year growth numbers adjusted for the figures we called out a year ago. So a good result for mechanical, almost 6% adjusted growth and new products continue to be a very strong contributor to our mechanical success, and I'll highlight some upcoming new release examples in a moment. Chemical, we did see a moderate sales decline in chemical. And this is coming more in the less differentiated products, particularly products that are sold into the food industry, where we see a general reduction in activity by our end-use customers and lower reductions in workforce employed in that sector as well. Our more differentiated product ranges within chemical continue to perform well. Once again, in industrial, really the standout result was the margin here. And I still see opportunity for us to continue to grow EBIT margin in this business. And it's a number of factors coming together. So the KBU business that's been -- the part of it that's been consolidated into industrial performed well. We saw lower freight costs than the prior period and generally a good result in terms of manufacturing productivity all contributing to almost 18% EBIT to sales in the half. Turning to Healthcare. And here, we saw on an adjusted basis, again, a good result for Surgical on the back of strong prior period growth as well. In the cleanroom business, it's now apparent that prior to the acquisition of Kimberly-Clark and prior to the completion of the transition period, transition services period, customers had been running at a higher than typical level of inventory. And so for those KBU products, we've seen some destocking come through in the last 6 months as we're now able to track that as following integration, we can see the sell-out data from our distributors and measure that against our sell-in. And for the Ansell products, equivalent products in clean room, we don't see that effect, and those continue to show good growth in the half. So overall, underlying, I'm very satisfied with the clean room growth. Within Exam/Single Use, as you're well aware, at the less differentiated end, that's where we do see some more price sensitivity. It's also lower margin for Ansell. So important that the more differentiated products with high margin, we saw continued growth within Exam/Single Use, and we did see some decline in the lower-margin segments within Exam/Single Use. Overall, also nice to see this improvement in EBIT sales ratio, EBIT margin for health care and certainly some further work to do to get this segment to where we want it to be, but on track to the improvement plan. And again, as for industrial, similar drivers. So the benefit of the KBU acquisition, consolidation, synergy delivery, lower freight costs and generally good productivity coming through in operations. So let me dive into a little more detail on the drivers behind this result. And if I step back a little bit on this day, to me, these are four key reasons why I believe you, as investors in Ansell should have confidence in our ability to deliver long-term consistent shareholder value creation. And I want to begin with the success of our digital transformation. We haven't talked about that too much on these calls, but I don't think it's fundamental to any business. And while there's a lot of talk about the ability of AI and advanced IT capability to drive productivity, if you don't have the foundation, then really you can't unlock the potential. So we've done substantial work over the last 4, 5 years, upgrading the underpinning systems on which Ansell operates, but also really improving our ability to manage data effectively. Data is the fuel of AI. And what's great about Ansell is that our data is proprietary, both the data that enables us to run our business more efficiently, but also the data that is critical to customer bank. We continue on this journey, but we have a strong track record of success here. So turning now to more productive and customer-focused organization. And just to clarify on the accomplishments of the last 4 years slide here. So as when we announced the APIP program back in 2 years ago, of course, the headlines were about the cost savings anticipated to come from this program. And we've delivered on those actually slightly higher than the original numbers we promised. But as I announced the APIP program, I did say that I felt the more important and longer-term benefits was that it would be a more efficient organization structure, also better aligned to customer interests. And that, in turn, would be supportive to our ability to deliver growth. And I think we have clear evidence of that coming through now. And most importantly, I see that the growth strategies we're developing that Nathalie will look to implement are better grounded in those customer insights. And that allows us to give better focus to the product innovations that really resonate with customers. The third aspect here is the strength of our business processes and our overall operating effectiveness. Perhaps during my 13 years at Ansell, this hasn't always been a characteristic that you would first think of when thinking of Ansell. But I think this has fundamentally changed. And we see this in a couple of ways. Firstly, our customers are very appreciative of the improvement we've made in service levels. In the past, they loved Ansell, they loved our products. They love innovation, and frankly, we're a bit frustrated at the inefficiencies of our supply chain. Now those good things are retained and still valued and our customers are recognizing us as one of the best for quality and reliability of supply chain. We see that in the service metrics we track. We see that in the awards that many customers have given us recently. And that operational effectiveness, that ability to deliver complex business processes also comes through in our ability to deliver on the key goals that we set for ourselves and that we commit to you. And the most prominent example of that, of course, is the delivery of the Kimberly-Clark acquisition, but especially the integration of that business within a record time for us and doing so in a way that was seamless to the customer experience. And then finally, I also believe Ansell is better positioned today, obviously, growth markets that often offer long-term sources of growth and also differentiation. The biggest move we've made is the move into the scientific business, where we see elevated growth potential and also elevated customer demand for differentiation. And I'll also talk on the next couple of slides about our ability to continue bringing new products and driving growth and the importance of our service differentiation. So let me now talk to sales supported by new product launches. And here on the right are a few examples. Let me summarize the message that these are illustrating. So already today, in our result, we see very strong growth from our HyFlex high-cap range from our Ringers impact range. What you see on the slide today are only just launching to the market now. So we're not resting on our laurels, where we can. We're continuing to improve on products that are already successful in the market. We're particularly excited by the technology AEROFIT that's behind the HyFlex range here. and then extending our Light Duty impact range, one of the biggest contributors to our recent growth to a range of products with also cup protection in belts. And then on the right, you see a couple of products that are new to the industry that are solving very important unmet needs that customers are eagerly anticipating as we ready them for launch. The 93-800 we talked to you about a few months ago, and this is the first disposable glove that's able to offer meaningful protection against acetone and other key tones, one of the most prominent hazardous chemicals used in workplaces worldwide and there is no disposable product today that offers any meaningful protection against those widely used solvents. And then I also believe we are the first to launch to market a PPAS-Free bioprotection suit for first responders that meets NFPA standards. And this, again, as you can imagine, is an item that is attracting a lot of customer interest and a very important launch. So examples of how we continue to grow against existing successful value propositions and also create new opportunities to the market. And if I summarize these innovation focus areas, the protection piece in the middle there is actually often the easier part of innovation. What's difficult is to combine protection with comfort with a product that enables workers to be productive and then also without asking customers to pay for a premium, but as we innovate products, we also make them more sustainable and better for the environment. When you do those four things together, that's both hard to do and also a long-term source of competitive advantage. But the next area on the next slide of competitive advantage, which I think is just as important as the product differentiation is our service differentiation. And here, we're investing significantly in improving the breadth and reach of these tools because it remains a complex environment for safety managers there eager for expert advice to simplify for them, the complex problem of what is the optimal PPE in a wide variety of manufacturing settings. So our core Guardian Platform is undergoing significant investment. That's about improving that underpinning data sets, unique proprietary to Ansell, as I mentioned, and also using AI and other methods to speed up report preparation so that our sales teams in future can do even more Guardian reports and potentially also broadening the reach of that tool to reach more end users than it has in the past. And you can see a very strong increase in orders completed in the first half. The chemical module within AnsellGUARDIAN, we continue to invest in. This is also unique Ansell data. It arises from our own testing at Ansell in-house labs and it's the most extensive database informing customers how particular materials protect against particular chemicals or combinations of chemicals. And we see very -- we saw very strong growth in the use of this tool, particularly in North America, and EMEA in the first half. And then we see a significant increase in the use of our right cycle waste management program. This came to us through the KBU acquisition. We saw something like a 30% increase in the tonnes recycled through the program. We're also able to substantially reduce the cost of that recycling process. Today, Ansell covers that subsidizes the cost of the program and we are through improved recycling and sorting techniques. We've been able to deliver that increase in volume and actually a lower cost and so, and that allows us to start thinking about broadening the number of customers that we introduce the program to, into industrial markets and also expanding its use in Europe. So these service differentiations are actually, in some ways, harder for competitors to match and offer very important long-term differentiation. So to my final slide, as usual, I'll give you an update on our sustainability goals as well. And certainly, I'm proud of our financial success over the last few years, but I'm equally proud of our progress against sustainability. And fundamentally, I've always believed that our sustainability program has to be aligned also to your financial objectives. They can't be in conflict with each other. And what we see here is both we have reduced Ansell's impact on the environment through measures that have also contributed to our financial success. And if we keep that formula going forward, then we will be able to do both bring benefit under both drivers for the long term. Beginning with our impact on people, of course, our top priority always at Ansell is our own internal injury rate. As you'll know, it's already low by international standards, and we were able to reduce again the number of injuries occurring within Ansell's operations. You're also aware we take very seriously our responsibility to ensure the employees of all our suppliers also operate in safe conditions that their rights are respected. We are extending further the number of suppliers who are covered by our supplier management framework to ensure that our due diligence methods go beyond and reach further into the market, and we know we're driving beneficial change to workforces across our supply base, and that remains a focus. For our impact on the planet, these are our long-standing goals on the left. On the right, you can see we did reduce our emissions. We also reduced our water withdrawals and we maintained our zero waste to landfill certification. So with that, with success against both financial goals and sustainability objectives, I'd now like to hand over to Brian Montgomery, who will give you a bit more detail on our financial results. Brian? Brian Montgomery: Thanks, Neil, and good morning, everyone. Great to be speaking with you today. Neil provided a few comments on the half year result already. But let me get into it in a bit more detail. Overall, we were pleased with the adjusted EPS coming in at $0.663. Sales were down 0.6% on an organic constant currency basis, which excludes the effect of foreign exchange and some minor product exits. We noted in our first half year results a year ago, and we benefited from $27 million of sales due to temporary order favorability and backorder clearance. So once you back these out, we delivered adjusted sales growth of 2.1%. Tariff-related pricing in the U.S. was the primary driver of adjusted sales growth in the half with the major offset being reduced volumes of medical examination gloves, which we report in the Exam/Single Use business unit within our Healthcare segment. Our first half GPADE margin improved by 220 basis points versus the first half of '25. We noted at this time last year that freight costs were elevated as we're choosing to air freight customer deliveries to clear surgical back orders and fast track shipments of new industrial products. With airfreight usage having returned back to normal, this gives us a good margin boost, which is further aided by sourcing savings that we're able to achieve across key raw materials and some outsourced finished goods. As Neil mentioned earlier, we successfully offset the effects of higher tariffs in the U.S. with price increases and to a lesser extent, sourcing actions. The net effect of incremental tariff-related pricing and cost increases was moderately dilutive to our GPADE margin rate at the half. Turning to SG&A. This is up 0.4% on an organic constant currency basis, with higher employee costs from both wage inflation and strategic hires, partially offset by improved SG&A productivity and approximately $6 million of KBU cost synergies in the half. If we look at foreign exchange, this was a headwind to EBIT of $1.6 million. Underlying currency changes were favorable to EBIT by 4.4%, with our hedge book offsetting some of this positive movement. We've seen quite some sharp currency moves in the past few months with the USD weakening against some of our key cost currencies, which will drive a greater hedge book loss for the full year than we previously anticipated. Now let me touch on this further in the outlook section. So wrapping up on EBIT. We finished the half with organic constant currency growth of 15.4% against the first half '25, as well as a 180 basis point improvement in our EBIT margin, which came in at 14.3%, a really positive outcome. If I move further down the P&L, we booked $7.3 million in significant items in this half, primarily APIP costs relating to our upcoming ERP system upgrades. As you will note, significant items are down materially versus the prior year. The interest line was broadly in line with the first half of '25, and our effective tax rate came in as guided at 24.1%. So on the whole, a solid result in some pretty subdued market conditions, and we look forward to building on this year in the second half. So I move on to the balance sheet. Things are looking in pretty good shape here. Working capital was lower than June '25 by approximately $23 million. Inventory decreased modestly despite the effect of capitalizing higher tariff costs in the U.S. and receivables were down largely due to the timing of collections in North America with a small decrease in payables acting as a partial offset. If you look down at returns, we delivered return on capital employed, or ROCE, of 11.9% and return on equity of 10.1%. The volatility you can see in ROCE over the past 12 months is due to the partial inclusion of KBU Capital employed in the denominator in December '24 and June '25 calculations noting that we calculate ROCE based on average capital employed over this trailing 12 months. If you normalize for KBU and the denominator, June '25, ROCE would have been 11.2% and translating to a 70 basis point improvement through to December 2025 on a like-for-like basis. So we turn over the cash flow here next. Net receipts were significantly higher in the first half -- than the first half of '25, driven by higher earnings and an improvement in working capital. The large increase in statutory EBITDA was driven by our double-digit organic earnings growth helped further by a reduction in cash significant items, noting that last year, we were booking KBU transaction and integration costs at this time. As I mentioned in my balance sheet comments, working capital was lower on improved collections and reduced inventory. This working capital cash inflow helped contribute to normalized cash conversion of 112%, which adjusts for the timing of insurance and incentive payments, which we make in the first half of the year, all in, a really strong result. Net CapEx was $28 million, in line with last year. This included the cost of installing dipping lines on our new surgical manufacturing facility in India with commercial manufacturing now underway there. And finally, we purchased $47 million of shares as part of our on-market buyback program, which was the key driver of the approximately $20 million increase in net interest-bearing debt over the past 6 months. So I move over to the funding profile here. Let me close by saying a couple of words on this slide. The strong growth we achieved in earnings translated to a reduction in net debt to EBITDA to 1.5x, even allowing for the $47 million we spent on the share buyback. The maturities on our debt are relatively long dated, and we have approximately 1/3 of our facilities at floating rates today. So all in all, our balance sheet is healthy and our maturity profile is well balanced, which gives us flexibility to continue to pursue high returning CapEx and further address M&A opportunities as and when we see them, along with continued capital management. So with that, I'll now pass it over to Nathalie to introduce yourself and talk about the outlook for the rest of the year. Nathalie? Nathalie Ahlstrom: Thank you, Brian, and good morning, everybody. It's -- I'm really exciting to be here in Melbourne today and talking to you as the first time CEO now for Ansell. But first of all, I want to thank Neil. I would say today's half year's result shows that Ansell is today a much more focused, efficient and really well positioned company to deliver long-term shareholder value. And at the same time, as you have seen today, and Neil and Brian has spoken about that. We are at all-time high net sales, absolute EBIT and also extremely strong cash flow. So really a big thank you to Neil and the whole team globally for making Ansell such a strong company. It's a privilege to be here taking over today. I'm really honored to be here with Ansell today. I spent my career a leading global industrial companies, and I have long admired Ansell. I have been a supplier to Ansell and also customer. So I have seen the global scale and also Ansell's commitment with its vision to leading the world to a safer future. And there's really this passion and this vision of leading the world to a safer future that excites me. What excites me with Ansell is it's a well-run company. We are extremely well positioned globally with our balanced portfolio and also with this strong financial results that we are talking about today. We have globally a very talented team. I met most of the teams around the world already in the last 3 weeks. And I must say, I'm really impressed by the talented team. And like Neil was talking about our differentiated value proposition, we really have a strong brand to continue to grow and to build out the company. And of course, like Brian was saying, a strong balance sheet for future growth in the future. So what I'm looking forward with this fantastic products, this fantastic brand, it's really to accelerate the profitable growth to continue to enable innovation that is close to the end user needs and really helps our end users to be safer in the future. I'm also passionate about our sustainability commitment and together with the team, together with Brian and the global team, we are continuing to deliver as we go forward. So it's all about winning with our customers, our end users with our talent and winning for the shareholders. Then if I look at the priorities for the remainder of the second half. Sales growth, as Neil was already talking, we are going to continue with a highly differentiated product launches, and we'll see that coming to the market. So it's all about the innovations. And like Neil was talking about, the Guardian tool also helping us to win and close businesses. And at the same time, it's a very dynamic market environment globally as we all know, and we'll continue to be very close with any changes there might be in tariffs, if anything comes. So we will swiftly react on them. We will continue our strong focus on productivity. And you can see that -- and Neil was talking to that, you can see that with a strong EBIT margin in first half and then continue to deliver on the KBU synergies and then the upcoming one ERP project that will also then drive efficiency as we go forward. On sustainability, we are the global leader in our business. So we have to be at the forefront. We always have to lead the business forward. And this is really our passion, like I said, leading the word to a safer future. This is so important for us. And we're going to continue to broaden the scope of supplier management framework to ensure that we are ahead of the game. Finally, we're going to maintain our track record of strong cash flow conversion. And as Brian mentioned, with the share buyback program also helping that. So those are the key priorities for the second half to deliver second half. Then talking about our guidance and the assumptions behind the guidance. Market conditions in the second half are going to continue to be fairly subdued and the market is dynamic. We are going to continue to drive opportunities on organic growth, the ones related to innovation being closer to customers, close with Guardian and the innovations. We've seen strong earnings in the first half, and we will continue that strong momentum and our track record of delivering in the company. At the same time, on the more negative side, we have -- since the AGM in October, we have seen some foreign exchange FX headwinds to our EBIT. So the FX headwinds on cost currencies is roughly $5 million for the full year. So therefore, with these assumptions, we are maintaining our guidance of adjusted earnings per share of $1.37 to $1.49. And I really look forward talk through the performance and in our results call in August when we talk about the full year together with Brian. And this concludes this presentation, and I open up now the conference line for questions. Over to you, [ Shery ]? Operator: [Operator Instructions] Your first question is from David Low with UBS. David Low: Neil, thanks very much for everything you've done. It's been -- you've certainly -- since you took over as CEO, the business went through some pretty challenging periods, but you certainly we've come out the other side of it with the business which does seem a lot more reliable. So really impressed and disappointed to see you leaving. So that's not my question. My question relates to tariffs. Can I get you to talk a little bit more about what you think the implications are for demand and particularly with how the competitors are reacting because it strikes me that price increases of this magnitude surely will see volumes come back a bit and perhaps provide opportunities for lower-priced competitors to at least push their efforts to gain share. Neil Salmon: Yes. So well, thank you for the comments, and thank you also for the question. I think actually the instance of customers refusing to accept a price increase is very limited. And it's only come in some of the more ancillary parts of the portfolio and also parts of the business that were anyway quite low margin. So it's a very small factor to this result. What we have seen is generally some more price competitiveness, not really directly related to tariff consequences, but in the more commoditized as the portfolio where, as you know, price is a bigger factor to customer decision making and we have seen some volume effects and Brian called that out earlier, particularly noteworthy within the remainder -- this is a small part of our business, but the remainder of our Exam/Single Use products that go to medical applications, we saw that. So generally, yes, certainly, Ansell has been at the forefront of communicating consistently and clearly with customers about the need to raise practices. I think the fact that we were well ahead of and gave customers plenty of notice and has actually been well appreciated by customers, we've been working this through with them on a phased approach. We stuck to our time lines and that's enabled our distributor customers to also manage the tariff impact to them. So certainly, you need a few more months of trading to see the full impact of higher prices in the market. But all the data points that I can see at this stage are very favorable to suggesting we have secured these increases. And of course, that goes back to the reason why 6 months ago, I said that this would be possible. I talked to the differentiation of our products, that those products themselves are a relatively low-cost item within the manufacturing health care settings in which they're used, that there are other far more prominent items of cost inflation that customers are managing. And then as we also wrap up solution around with the service offerings and particularly the waste management program at the chemical Guardian data just further cements the reason why continuing to work with Ansell is something that customers appreciate. So overall, as I said earlier, if I look at the total effect of price, cost and volume and translate that through to EBIT, it's tracking even ahead of what was an ambitious goal that we set out 6 months ago. So I hope that gives you a bit more color to that, David. And just to clarify, all price increases are now in the market. And so it's a question of maintaining those and then overall delivering what we expect to be a better volume year-over-year outcome in the second half as well, which I think is very much within our growth. David Low: Great. And maybe just one follow-on then. Just on the guidance. So effectively, there's a $5 million headwind from FX. And I guess one of you to remind us how seasonality is likely to play out? I mean, it's typically been a bit second half weighted. What should we expect this year? Neil Salmon: Yes. So I'll let Nathalie comment in a moment on that. But yes, at the AGM, we said FX would be favorable. Now it's turned out to be slightly negative. So you could interpret maintaining guidance as an operational upgrade after you adjust for that FX movement. Yes, first half, second half phasing is not challenging to us at this stage. But Nathalie, anything else you'd like to say about second half, yes. Nathalie Ahlstrom: Yes. Just on the headwinds on the FX, this is to the cost currencies. And as I said, it's roughly $5 million for the full year. So that's a change from the AGM and that's why we are maintaining our guidance as it is today. Operator: Our next question is from Vanessa Thomson with Jefferies. Vanessa Thomson: I also wanted to say thank you to Neil. It's been great working having you there. And also congratulations to Nathalie. I just wanted to follow through on the question around growth, subdued end markets this half. And you said that you feel that tariffs are broadly accepted. I wonder if we could get some more color around that subdued growth and how the start of 2026 has panned out. Neil Salmon: Yes. So I think if I separate mature markets in EMEA and emerging or developing markets, mature markets were really right where I thought they would be. If you look at PMIs or other forward indicators of demand, they're all indicating at best flat or even a slightly negative demand environment. And we see that borne out through a number of publicly available data sets, but also some of the market talk we hear about how others are doing in the industry. I mean, particularly in Europe, you see automotive production pressure, do you see chemical production pressured. Those are important markets for Ansell. The fact we've been able to achieve growth in those markets, talks to our ability to pivot to other more differentiated and higher growth verticals. So the energy transition, the defense industry and the aerospace industry, of course, contributing to defense, those are all opportunities that we've been able to tap into of offsetting growth that's contributed to what I believe is meaningfully outperforming the market in EMEA. North America, of course, also affected by automotive. But again, in North America, we're finding other areas to win and that very strong contribution of new products. So it's emerging markets where demand was in some emerging markets was a little bit softer than anticipated. I call that Mexico. That's the most prominent example. But in other markets, India, Brazil, China, and you'll be pleased to hear me talk about the largest of all, we still see double-digit growth in those markets. So plenty of opportunity that our value proposition works still in emerging markets, India, particularly encouraging because, of course, in the next few months, we're now bringing up to commercial production, our India surgical facility, and it remains the surgical business that is really the overall driver of Ansell growth in India. So I think second half versus first half, I wouldn't say we see any major change in those underlying demand trends at this stage. So it remains on Ansell to overperform versus those subdued market conditions. We've shown we can do that and that we need to continue doing that. Vanessa Thomson: And then just to follow on then from that. You've long spoken to medium-term organic growth of 3% to 5% per annum. You've now increased your scientific exposure, U.S. brand recognition. Do we stay with the 3% or 5%? Neil Salmon: Well, I'm sure this is a question that Nathalie is going to be considering, and it's also unfair to ask it to give you an answer on day 21 or whatever it is. Yes, I think as I highlighted earlier, foundations are in place that would allow us to be confident at least in that goal. And I think it's fair to allow Nathalie some time to assess the business before she comes back to you with her view as to what the growth potential is of the company. But it's a very relevant question and certainly see no reason why we can't consistently deliver on that previous range. And I'm sure Nathalie will be considering ways that we can do even better, but early at this stage, yes. Operator: Your next question is from Dan Hurren with MST Marquee. Dan Hurren: Did you just say that the markets ex U.S. were double-digit growth? Or are you saying that's the potential? Neil Salmon: No, I just called out three specific countries where we saw double-digit growth. But the market demand was not double digits in those countries. So Brazil, India, China, where the markets I called out. Other emerging markets, we saw double-digit declines. So it's been much more of a mix picture in emerging markets. And really, I would say, the performance that I'm most proud of in this half is our mature markets performance. And perhaps if you go back again in several years, Ansell was heavily reliant on emerging markets for our total company growth. And I think emerging markets continue to offer that promise long term, but we needed to get mature markets performing consistently as well clearly. And so that, to me, is the standout of this result and the last period of time is the improvement we've made in our ability to deliver continued growth and positive margin in our mature markets. So hopefully, that clarifies that point for you, Dan. Dan Hurren: Understood. We have seen at least some of the product that's been pushed out of the U.S. market by tariffs arriving into various other markets. Is that meaningful for any of your markets? If so, is it going to get better or worse? Neil Salmon: I'd say we see it in some spots, but I wouldn't go so far as to call it meaningful. And it tends to happen, as I was saying earlier, on the more price-sensitive parts of the portfolio. So certainly, at the commodity end of Exam/Single Use, as you know, we're a very small player in what's a very large market. Yes, we have seen some business outside the U.S. I'm talking now. We have seen some increased volume moves based on specific pricing. But that's quite a limited effect overall for Ansell. And I'd say, more generally, the effect of volume moving from China to other markets has been less perhaps than some would have expected. And so I don't see it as a meaningful contribution to our performance in the half and nor do I expect it to change into the second half going forward. Operator: Your next question is from Craig Wong-Pan with RBC. Craig Wong-Pan: My question is about some of the mature markets, Neil, that you talked about pivoting into like energy transition and defense. I just wanted to understand if you were not in those markets or if it's more that you're underrepresented and what has enabled you to kind of grow into those newer markets? Neil Salmon: Yes. So certainly, we've always been in those markets. And I would say, in the past, we had a few good products that sold well into, for example, aerospace. But this links back to that change in organization structure that I talked to. When you set your teams back from the market, you encourage them to think not about how do I sell this product portfolio and where can I find customers for it, but instead, what's the total solution that an aerospace, defense and energy company is looking for and how can we at Ansell provide that total solution. So -- and that means our customer-facing teams pulled together across the full Ansell portfolio is -- and then are able to benchmark from similar manufacturing sites across the world. So we can go in and we can say, we understand your workplace. Here's the complete answer solution that you need. Here's how it's backed by research that we've done, showing that our products perform better. So as I mentioned, it's not the collection piece. It's the overall performance piece. Here's our products benchmark against some competitive solutions that you may also be looking at. And here's -- and now we'll also offer other benefits to you we'll offer training, we'll offer webinar, we'll offer waste management solutions. So it's more bringing a tailored solution, portfolio solution to energy, to aerospace, to defense that we see a lot of problems behind. And we have a significant increase in the pipeline of -- in these verticals. I would say though, the decision cycles along funding is sometimes uncertain in terms of timing. And so it's always hard to predict exactly when that pipeline translates to sales revenue, but encouraging at this stage. And certainly, that has to be the name of the game at this stage is finding those verticals that still offer opportunities for growth at a time when other markets are subdued in demand as we have discussed. So lots of potential for the future there. Operator: Your next question is from Saul Hadassin with Barrenjoey. Saul Hadassin: Neil, just the first one, you called out in cleanroom sales within the health care GBU that there was destocking on the Kimberly-Clark product, but that the Ansell brand did well. And you mentioned good growth. I'm wondering, can you tell us what that growth was? And do you still expect growth in that category once we normalize for the destocking, do you still expect an upper single-digit rate of revenue growth for cleanroom gles within the Healthcare segment? Neil Salmon: Yes. So high single digits is what we've guided to for Scientific more broadly. And yes, that is consistent with what we saw for the products that were not affected by those destocking trends. Some of those destocking trends are now behind us, some I think, still have some months to run. It's also paradoxically the case that as Ansell service metrics improve, when customers run their algorithms of how much inventory they need to hold, they suggest, well, Ansell is such a reliable supplier. I don't need to hold quite as much inventory. So that's the sort of slightly broader effect, I would say, in the half of destocking, not big enough for me to call out and certainly nothing like destocking effects we've had. Our ability to see that is much improved versus where it was, and this is critical. We couldn't weren't able to quantify it for the Kimberly-Clark products because we didn't -- before we integrated, we didn't have that same visibility for those products. So -- but now we can see it, and therefore, we have the confidence that I'm able to describe. But yes, fundamentally, I view that scientific portfolio as having a higher than the Ansell average growth rate and potentially plenty of potential for the future. And that broader differentiation we're able to bring in challenging clean room manufacturing environments stands up very well with customers based on what they're looking to achieve, yes. Saul Hadassin: Just a follow-up. You also mentioned on the call that EBIT and EBIT margin, there's still work to be done. I mean, just cognizant of the benefits you got through the half distribution in terms of freight and also sourcing. Where do you expect those additional improvements to come from as it relates to that EBIT margin? I guess the question will be is in fiscal '27, and once you have the sort of fully embedded benefits from KC and also the APIP, there's going to be an expectation of ongoing operating leverage. So I'm keen to understand where do you see that leverage coming from into second half '26 and potentially to '27? Neil Salmon: Yes. So I think, again, in the shorter term, it's a continuation of the programs that we've already announced to you. So we still have another piece of synergies to deliver against our existing target and the APIP program is favorable this year against next year. I think longer term, Nathalie mentioned it already, but key to longer-term drivers of productivity are enhancing the ability that our stronger systems underpinning gives us and then also success with more step change automation projects within manufacturing. We're in the test and learn phase, building out new-to-industry capability in terms of automation. And if those concept lines prove successful, then we'll give you more details about those in the future. But Nathalie, would you add anything to productivity objectives here? Nathalie Ahlstrom: Well, then I would actually add the growth aspect that you Neil spoke to that we have some areas that are structurally higher growth areas and also higher margin. So moving the portfolio. But early for me to say. I'll come back more in then in August with the full year reporting. Operator: Your next question is from Andrew Paine with CLSA. Andrew Paine: On the result and reiterating the other comments, Neil. Congrats on what you've done and good luck for the future and to you, Nathalie as well. Look, just a question around the 1 half, 2 half weighting and I guess, your upgrade at the AGM. Can you provide a bit of information around the FX? Obviously, you're saying there's an FX headwind of $5 million to be included here. What were you including as a tailwind at the AGM? Just trying to understand the driver of more of an underlying upgrade here. Neil Salmon: Brian, do you want to take that one? Brian Montgomery: Sure. Yes. Thanks for the question. So as we started the year, we were assuming about a flat FX impact on EBIT. As we went to AGM, we saw that benefit somewhere in the neighborhood of $2 million to $3 million. That was factored in some of the upgrade that we had talked about at that time. And now for the year back down to minus 5%. Really, what we saw was the strengthening Malaysian ringgit and the Thai baht getting stronger versus the dollar and euro has kind of flatlined a little bit. It ran up earlier in '25. And so that's the dynamic now that we see going forward. Now from a first half, second half, I think the second part of that question, we saw about 1.5 million, give or take, of pressure in the first half of the year. And the balance of that 3.5 million will be in the back half based on what we know now, knowing that FX does move around a little bit. So hopefully, that answers your question. That's how we're seeing it at the moment. Andrew Paine: Yes. Okay. So just to clarify, so $3.5 million of that $5 million is in the second half and $1.5 million is in the first half of the headwind. Brian Montgomery: That's right. Yes. Andrew Paine: Yes. And so like if I run those numbers, it looks pretty similar to the upgrade that you pulled through in at the AGM. So you pull through a $0.04 upgrade at that AGM. So it sounds like you're giving that back in FX, but implying a $0.04 to $0.05 upgrade of the underlying. Brian Montgomery: Yes, I think you can look at it that way in the sense that we've been able to hold guidance despite FX going against us a bit. Andrew Paine: Yes. Okay. That's great. And then just any insights that you could provide around the -- where you push price increases through over the half? And if possible, the magnitude of these price increases? Neil Salmon: Yes. So I'll take that. We're not giving specific percentage amounts and they vary according to the specific tariff cost impacts that we're seeing and the nature of the products. But generally, I'd say it's been harder to get price increases through in the medical setting versus the industrial setting and it's in the medical space, where, as I mentioned earlier, some relatively ancillary parts of the portfolio, and these are not adding up to anything close to double-digit million. So a limited effect where we've not being successful in getting price through, and we've accepted to walk away from that business. And that's always what you have to do. I mean, you can never manage price for discipline without accepting that you have to be able to take some loaded volume risk as you were doing so. Otherwise, you won't achieve that overall pricing goal. But as I mentioned before, when I look at the net effect of the limit -- quite limited volume effect, what we've achieved in terms of price increase, over the cost increase and translate that through to the EBIT line, we're tracking slightly ahead of what was an ambitious goal when we set it out to in August. So hopefully, that gives you a little bit more color without giving you the exact percentages that perhaps you would have liked. Operator: Your next question is from Laura Sutcliffe with Citi. Laura Sutcliffe: First question is on Exam/Single Use. I think you called out in your materials some decline in volume. Is there any risk that there's a permanent pattern of declining use in those products? Neil Salmon: So I think the -- we called out decline in volume in the medical exam space. And this has long been a part of the market of lesser focus for us. It's where the product -- there's very limited product differentiation, and we see much larger players who have the benefits of economies of scale in the medical exam product, and it's generally a very standard product. So everyone -- many producers have it. There's limited product differentiation. In the past, Ansell was able to carry or offer to customers a limited portion of medical exam product where it was part of a broader package of other more differentiated products, most notably the surgical portfolio. And now in current conditions wherever -- where there are some savings to be had, customers will take those, then we've seen customers disaggregate. So maintain with Ansell on the more differentiated parts and accept some lower price points on the medical exam piece. Whether that comes back or not, Laura, it has done in the past. It's also not a focus of ours. It's not business that is -- it's certainly not a business that's going to be a long-term source of value creation. So what's encouraging is even with these higher areas of price competition in some parts of the portfolio, we continue to grow the differentiated portfolio. And that's -- this is the contrast we've always tried to draw in Exam/Single Use for our business versus other more commodity-oriented single-use businesses. And we continue to innovate in this space. So that product that I mentioned earlier, 93-800 goes into this and is a great example of how Ansell is the only company able to offer a level of protection and comfort and performance that just doesn't exist from other suppliers. So I see significant potential to continue growing more differentiated portfolio. And the areas where we're a little bit down on volume does not really concern me within Exam/Single Use. Laura Sutcliffe: Great. And then secondly, you mentioned the potential for elevated growth in the Scientific segment, some of the pieces you just mentioned. We've seen share prices of CROs in the U.S. suffer as the market takes a bit of a view that AI could mean less lab work in the future. I know it maybe feels like a bit of a stretch, but I was wondering if you'd ever contemplated that scenario from the perspective of a supplier to that segment. Neil Salmon: So I think, well, the lab industry generally right now actually is not seeing a lot of growth because government funding has also been affected as you're aware. So the lab market is not really where we place our confidence and can call out that opportunity for high growth. It's more the manufacturing environment. So this is where cleanrooms are used in the production of pharmaceuticals and production of medical devices, and increasingly, cleanrooms are being adopted in other settings as well. So the electrification of supply chains introduces cleanrooms into manufacturing settings where they weren't there before most battery assembly facilities use a cleanroom facility at some point. And these -- certainly, where possible, these facilities are already highly automated, as you would expect, but there's still a very important role for workers in these facilities. And the quality standards are critical, and I don't see this as a scenario where AI is going to make a difference. Yes, automation will be a factor, always has been, has been since my day 1, 13 years ago at Ansell and will be, I'm sure, throughout Nathalie's time. And what we've shown through my 13 years is for every site that reduces workforce through automation, there's another site that's growing. There's another site that's expanding. And so the number of hands needing protection in those clean room manufacturing environments, I would expect to grow. And certainly, when you consider the broader adoption of clean room facilities, including in emerging markets. So that to me is the more important space for us versus the more routine lab work. And that's where I have the confidence in the growth rates that I was talking about. Operator: Bailey with Morgan Stanley. David Bailey: Neil, adjusted sales growth of 2.1%, I'm sort of getting volume growth of minus 1% if you strip out the price increases coming through. Just wondering if you can just help us understand the phasing of those volume or volume growth trends over the half. I just sort of -- you sort of flagged that there were some price increases on a staggered basis. Was there any impact of inventory build in the September quarter or anything like that? Or is there any sort of nuances in terms of the volume growth pattern as we exit first half '26 into the second half of '26? Neil Salmon: I wouldn't call out any major phasing differences first quarter, second quarter in this period. There were some in the prior period because of the timing of that $27 million, which you've adjusted for renewal figures. So we haven't seen at any stage in our price increase, any major buying ahead of those price increases. And of course, then you want to track to make sure that the point of sale continues post price increase, and that's generally what we've seen and also as we start this year. So that's what gives us the underlying confidence in those statements. So I think generally, I do expect a bit more favorable volume trends into the second half, partly because of easier comparisons, but then also the continuing momentum of the growth drivers that we've talked about here today. So -- but no, to your original question, not a big difference, I would say, in first quarter, second quarter phasing other than the prior year effects that we talked about. David Bailey: Yes. Understood. And maybe one for Brian. Just SG&A was a pretty significant beat relative to our expectations. It looks like KBU synergies plus a bit of other internal initiatives doing quite well there. How should we think about that number into the second half, either as a percentage of revenue or absolute numbers, that would be useful. Brian Montgomery: Yes. We don't got anything specific on SG&A, but I would think about the trends being similar. Incentive, as we talked about incentives were paid out at a higher level in year-ending '25 payable and '26. This year, they're a little more normalized. So that's also an aspect of what you're seeing here in this particular half, and we'll have to see how that plays out here in the second half. Operator: And our final question is a follow-up from Vanessa Thomson with Jefferies. Vanessa Thomson: I just wanted to ask, you said that sales was supported by new products. I wondered on that Slide 11, I think they're all industrial products. I wondered if there was anything in health care or if there is anything coming? Neil Salmon: Well, the nitrile disposable glove, the 3800 on the right is actually reported under health care. It's one of those that goes into industrial. Yes, I know that's confusing. So I think within Surgical, it's generally not a market that wants a lot of new products. So we do see the products that we launched 4 or 5 years ago, continuing to perform very well, particularly our hybrid combinations of different polymers. The focus within Surgical more recently has been to manage through the supply chain disruptions of the pre- and post-COVID period and its consistency of quality that is the overwhelming requirement for customers. We are looking at again at whether we can achieve breakthrough polymer performance in the surgical business, there could be a meaningful differentiation of customers, but very much at the early stages. Again, within the scientific portfolio at this time, the priority has been consolidating the two -- the acquired and the existing Ansell range, communicating very clearly to customers what that -- how we tell that total range now that we have almost a complete head-to-toe solution. You can call all the KBU products, new products to Ansell, even though they're not new to the market. I think it's very encouraging how some of those products that we didn't previously have are also showing very strong growth. So eyewear is a range that Ansell didn't have historically. We acquired a strong North American market presence. Not one of the particular focuses, and we haven't talked about it much with you before, but we saw good double-digit growth in the eyewear range in the half as well. So that's an example of how we can rejuvenate a product that has been in the market some time. When you bring it under the Ansell brands, when you add to it that service offering, we can generate significant growth. So I think within the scientific space, it's not necessarily about brand new products to market. It is about simplifying that portfolio helping clean room environments, meet their quality and regulatory standards and then consistent delivery, and that's as much -- that's as important to share growth in that environment as new products. So yes, it is more of a focus in industrial than in health care. -- but it's innovation in different ways in health care that's leading to differentiation. Operator: There are no further questions at this time. I'll now hand the conference back to Nathalie for closing remarks. Nathalie Ahlstrom: Thank you. And thank you for the lively discussion and questions that you had today for both Neil and Brian. And just to close this session today. I really want to sincerely thank you, Neil. It's a privilege to take a company that's this well run and finishing at all-time higher net sales, absolutely EBITDA and strong cash flow and also with our fantastic teams globally. As said, we're maintaining our guidance with adjusted EPS of $1.37 to $1.49. So that's key. And I and Brian are really looking forward to seeing you all then in August when we are talking about the full year performance. And now we are focused on delivering our guidance. So thank you, everybody, and see you soon.
Operator: Thank you for standing by, and welcome to the Treasury Wine Estates (TWE) FY '26 Half Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Sam Fischer, Chief Executive Officer and Managing Director. Please go ahead. Samuel Andrew Fischer: Thank you, operator, and good morning, and thank you for joining Treasury Wine Estates 2026 Interim Results Briefing. Joining me on the call today is Stuart Boxer, our Chief Financial and Strategy Officer. You may notice that our divisional leaders aren't on today's call, which is a shift in how we would like to present our results moving forward, with Stuart and I to lead this forum while allowing the rest of the team to remain fully focused on the business and our commercial execution. Going forward, we will, of course, provide opportunities for you to engage with the broader leadership team, including at our Investor Day in early June and other engagement events that our Investor Relations team will lead. Turning now to the key messages that we'd like you to take away from today's announcement, which are an update on the key areas we laid out in our update in mid-December. In first half 2026, EBITS of $236 million was just ahead of the guidance range from December, and statutory NPAT was a loss of $626 million, driven by the noncash impairment of U.S. assets that again, we announced on the 1st of December. While the headline results announced today are clearly disappointing, they also reflect the decisive action we are taking to return TWE to a path of long-term sustainable profitable growth. In recent months, we've cleared some major hurdles, and I'm feeling optimistic and energized about the future business we are creating. A key driver of this optimism comes from the positive underlying performance of the business with depletions growth continuing in key markets and across key brands. Most notably Penfolds, continued delivery of strong depletions growth in China. And in the U.S., outside of California, where Treasury Americas depletions grew against broader market weakness. I'll talk in some more detail about depletions shortly. Retaining the strength of our capital structure is a key priority. We reported leverage at 2.4x in line with guidance. Our decision to suspend payment of the F '26 interim dividend is a temporary measure that reflects clear and definitive action to reduce our balance sheet gearing towards our target levels. Resumption of the dividends will be the subject of future financial performance and our leverage improvement trajectory. This action is just one element of an active program we are undertaking focused on meaningful capital preservation initiatives, elevating our focus on costs and cash, and we will cover this in greater detail later in the presentation. We are also taking decisive action to maintain the strength of our brands and the health of our distribution channels. In the half, we significantly reduced Penfolds shipments in order to restrict parallel import activity. We also commenced our planned reduction of U.S. and China customer inventory, which will continue over the next 2 years in line with the time line we presented in December. As announced last week, we reached a settlement agreement with RNDC, bringing clarity to our route to market in the U.S. We are pleased to have reached this conclusion with RNDC remaining a committed partner to TWE. We also look forward to partnering with Reyes Beverage Group in six states once that planned transaction takes place later this year. And finally, TWE Ascent. Our multiyear transformation program is progressing at pace and our confidence in our ability to execute the change required is high with plans and targets to be presented at our Investor Day in Sydney in early June. So it's been a busy couple of months since we last spoke with many positive developments as we work towards creating a stronger future TWE business. Turning now to the first half '26 financial performance. and some key metrics. Three key factors impacted top line performance, including category trends, particularly in the U.S. and China, our deliberate focus on restricting Penfolds shipments that were contributing to parallel import activity and the cycling of elevated shipments in the prior year period. NSR per case fell 5% and primarily impacted by reduced ultra-luxury sales in Penfolds, which were disproportionately impacted by our actions to reduce parallel and inventory in China. EBITS margin also decreased 7 percentage points to 18.2%, driven by the change in sales mix and higher cost of doing business from the operating model. ROCE declined 1.7 percentage points to 9.5%, driven by the decline in EBITS. Prematerial items, net profit after tax was $128 million and EPS of $0.158 per share. As I mentioned earlier, we have made the decision to suspend the F '26 interim dividend as an important temporary measure. Turning now to divisional performance, where final delivery in each division was slightly ahead of the expectations we set in December. Penfolds delivered EBITS of $201 million. The result reflected the restriction of shipments contributing to parallel import activity in China and the cycling of an elevated level of shipments in the prior period associated with the initial distribution build following the removal of tariffs on Australian wine. Pleasingly, demand for Penfolds brand remains strong across key markets with great in-market execution, driving continued depletions growth. The heartland of the portfolio Bin 389 and 407 continued to perform well. Penfold's F '26 EBITS is expected to be approximately $400 million with EBITS margin expected to be approximately 40%. Treasury Americas delivered EBITS of $44 million. The result reflected the moderation in U.S. luxury wine market sales disruption from the Californian distribution transition and cycling the excess of shipments to depletions in the prior period. We saw some good momentum outside of California, with key brands showing ahead of category depletions growth. TWE also outperformed the category in on-premise led by DAOU, Frank Family and Stag's Leap. Treasury Americas full year '26 EBITS is expected to be approximately $90 million, excluding the impacts of the RNDC settlement. Treasury Collective delivered EBITS of $28.1 million in the half. The result was driven by weaker sales in the U.S. with the softer U.S. market conditions and the impact of the California distribution transition also impacting performance here, in addition to the reduction of customer inventory by approximately 200,000 cases. The Treasury Collective portfolio continues to perform in line with expectations in Australia and EMEA with the impact of commercial volume declines, partially offset by the momentum behind the growth and innovation portfolio with gains led by Pepperjack, Matua and Squealing Pig. For Treasury Collective second half '26 EBITS is expected to be higher than the first half. Turning now to depletions performance. which provides a clearer view of the underlying momentum of the business. Depletions are well ahead of the reported NSR metrics with some great growth being achieved against the more challenging market conditions. For Penfolds, combined depletions of Bin 389 and 407 were up 11%, while China depletions continue to be strong despite recent changes in the market up 17% in the period, August to December. This positive momentum is continuing into the important Chinese New Year period, which officially starts tomorrow, where we expect to see good growth on the prior year. These are very pleasing outcomes, reflecting Penfold's strong brand equity in the market and continued strengthening of the brand health metrics with demand power increasing in all key markets over the last quarter. For Treasury Americas, California depletions were impacted by the distribution transition with some improvement in scan trends visible in January. Outside of California, we achieved a material increase in points of distribution in the half, driving depletions growth led by DAOU, Frank Family Vineyards and Stag's Leap. This is pleasing and a great sign of what we can achieve when we elevate our focus on execution and the opportunities that exist in the market. For Treasury Collective, we saw positive depletions in Australia, led by Pepperjack Squealing Pig and 19 Crimes. In the U.S., 19 Crimes continued to drive declines partially offset by the ongoing momentum behind Matua. While there are some clear areas we need to drive a step change in performance, namely in California and across the Treasury Collective portfolio in the U.S. There are some very positive underlying growth trends throughout the business, reinforcing the strength of our brands and what I see as the considerable potential for growth across our brand portfolio. Behind these positive results is the momentum that our teams are driving, again, focused on execution excellence to deliver depletions growth. I've been incredibly impressed by the standard of the brand activations that I've seen in my recent visits to Asia and the U.S. in the past couple of months. For Penfolds, category-leading activations are behind the strong depletions growth in China. Our recent collaboration with [ Maybach ] was a huge success building connection between two iconic luxury brands and providers and providing buyers of high-end luxury cars, direct engagement with the Penfolds brand. We will see more of this type of activation going forward, putting the Penfolds brand at the center of key gifting occasions, feasting occasions and collaboration opportunities with other luxury brands, all to cement the luxury icon positioning of the Penfolds brand. DAOU is an amazing brand. We've just scratched the surface from a growth opportunity perspective, with meaningful runway to expand distribution of the core portfolio and further grow the on-premise channel. The expansion in category weighted distribution has been the key to growth outside of California with considerable opportunities remaining. Frank family is another fabulous brand with huge potential. We are seeing strong depletions growth driven by on-premise strength. And like DAOU increased distribution outside of California as the brand continues to build its status with the U.S. luxury wine consumer. And in the premium space, Matua continues to grow ahead of the category in the U.S. A key driver of recent growth has been expanded distribution of Matua Lighter which has a strong presence in the better-for-you segment and growing at around double the rate of the core brand tier. We believe there is a big opportunity for the brand elsewhere with Australia an increasing focus delivering double-digit depletion growth, again, led by distribution expansion in the major retailers. Ensuring we remain focused on best-in-class execution is critical to our growth ambition. Turning to the short and medium-term agenda. We have a clear set of immediate priorities guiding our focus. First, in-market execution remains a critical area of focus. I mentioned it all the time, we are intensifying our depletions-led execution performance across all markets and sustaining momentum behind our core brands through disciplined activation and distribution. Second, we are taking an elevated focus on cash right across TWE. In addition to our decision to suspend the interim dividend, we have deferred all nonessential expenditure and capital investment. We are also accelerating the program of work supporting the divestment of noncore assets and actively managing 2026 vintage intakes lower. And finally, TWE Ascent, the multiyear enterprise transformation program to create a stronger TWE with a focus on delivering attractive returns and cash generation. We are moving at pace to maximize the delivery of the previously announced cost and cash benefits which will be realized from fiscal year '27. Talking about TWE Ascent in a little more detail. We have a high level of confidence in our ability to realize the $100 million in cost savings from F '27 over a 2- to 3-year period, as previously announced, in addition to the potential benefits of portfolio rationalization. As we laid out in December, TWE Ascent is a significant program of work focused on creating a stronger under three core pillars. From a portfolio perspective, we are focused on having a portfolio of brands that are both individually and collectively positioned to outperform the market. Critical to this is alignment to category, consumer and competitor trends as well as our competitive position, ensuring that we are best placed to grow our business in partnership with our retailers and distributors. Further, as part of the alignment of our balance sheet to our future strategy, we see an opportunity to release capital. Since December, we've made good progress on this work. And today, I'm pleased to share our expectations for the key components of our end-state portfolio, which will include: The strengthening of our luxury red wine leadership in key markets, led by our existing portfolio of acclaimed luxury brands like Penfolds, DAOU, Frank Family Vineyards, Stag's Leap and Beaulieu Vineyard. Building on that, we will be strengthening our position in luxury white wine, where we already have some great offerings across the luxury portfolio, but we will dial up our focus in what is a clear growth area for wine consumers. And third, we will elevate our focus on modern refreshment through Matua and Squealing Pig. We have a great platform in place and are well placed to continue driving growth through disruptive innovation. In addition to the operating model, it's all about increasing organizational speed consistency in everything we do and delivering flawless in-market execution. And from a cost lens, we are working to materially reduce operating costs. Our target of $100 million per annum in savings is benchmarked both from a cost and performance perspective. It will be enabled through maximizing our use of data and automation with significant programs of work well underway in this regard. In terms of process and time line, Ascent is being executed in three distinct yet integrated phases of work. As the slide shows, we are currently well into the defining the future phase with work expected to progress through to the end of March. At this point, we'll commence work on the detailed future state and design. We will then lay out our conclusions, plans and targets at our 2026 Investor Day to be held on the 4th of June in Sydney. We look forward to the opportunity to share with you our plans for a stronger future fit TWE event. I'll now hand over to Stuart to cover key components of the financial result. Stuart Boxer: Thank you, Sam, and hello, everyone. We'll start with material items. A post-tax material items loss of $751 million was recognized in the half, which primarily relates to the noncash impairment of U.S.-based assets as we foreshadowed in our announcement to the market on December 1. This impairment is the result of applying more conservative growth assumptions to our U.S. portfolio in response to the moderation of U.S. wine category trends. It includes the write-down of our U.S. goodwill to zero, which we are required to recognize first under accounting standards. I write-down of selected brands, including Sterling and Beringer, and inventory, the largest component of which relates to excess bulk wine from the most recent 2025 of vintage. I should point out that the DAOU, Frank Family Vineyards and Stag's Leap brands were not written down as part of this impairment. Now moving to the balance sheet. Net assets decreased $930.9 million on a reported currency basis, with $226.6 million of this decrease due to foreign currency movements and $771 million due to the U.S. impairment. Excluding these, the key balance sheet movements overall were in line with the usual seasonal variances other than inventory, which I will go through shortly. Net borrowings were higher by $91.2 million, driven by lower operating cash flows, partly offset by the foreign exchange translation benefit on our U.S.-denominated debt. So turning now to inventory. Against the prior corresponding period, total inventory volume reduced 2% while value increased 2% or $16 million, reflecting increased luxury inventory, largely offset by a reduction of premium and commercial inventory. Current inventory decreased $231.9 million, reflecting the moderated sales expectations in Penfolds and Treasury Americas. Noncurrent inventory increased $278.4 million, predominantly driven by this transfer of inventory from current to noncurrent together with the luxury intakes from the most recent vintages. In Australia, we made good progress towards our focus on rebalancing supply and demand with initial intake reductions already locked in for the 2026 vintage, and we remain confident that we will achieve a balance over the two to three vintage period. In the U.S., we are taking action to manage our intake, starting with the 2026 vintage, where key initiatives will include the falling of selected controlled vineyards and the reduction of grower intake. Moving now to cash flow and net debt. Net operating cash flow before interest, tax and material items was $264.6 million for the period, a decrease of 38.1% on the prior corresponding period, and cash conversion was 82.4%. We expect full year cash conversion to be lower than the first half outcome driven by the net inventory build post the Australian vintage, but notwithstanding the reductions of this intake I just mentioned. Capital expenditure was $76.8 million and included maintenance and replacement CapEx of $56.3 million and growth CapEx of $20.5 million. This growth CapEx largely related to the in-flight BV development in Napa, which is scheduled to complete at the end of this half. Full year CapEx is expected to be approximately $125 million, reflecting the completion of projects currently in progress and a tightening on all other nonessential CapEx. Turning now to capital management. Leverage was 2.4x in line with the guidance provided in December. We expect full year leverage to be higher predominantly due to the flow-through of the lower trailing 12-month EBITDA, together with the lower cash conversion. Our liquidity position remains healthy with $1 billion of cash and committed undrawn debt facilities on hand and a well-diversified debt maturity profile with no meaningful debt maturities until June 2027. And we retained significant headroom to the financial covenants under our borrowing arrangements. As we've already mentioned, we have an elevated focus on near-term cost and cash initiatives, including deferral of all nonessential or committed capital expenditure, divestment of noncore assets and managing vintage intake, and we are seeking to accelerate the realization of Project Ascent cost and cash benefits in order to reduce leverage towards target levels. The decision to not pay an F '26 interim dividend was a key part of this focus. With the resumption of dividends in future periods, subject to our financial performance, and its leverage improvement trajectory. Thank you. I'll now hand back to Sam. Samuel Andrew Fischer: Thanks, Stuart. In summary, our first half '26 performance and full year expectations reflect both the impact of conditions in our key markets and the deliberate actions we have taken to maintain brand strength and ensure healthy sales channels. Looking ahead, we expect second half EBITS to be higher than that delivered in the first half. Importantly, the underlying performance of our key brands remains positive as reflected in the depletion trends that we presented earlier. Our immediate agenda is focused on three key priorities: one, market execution; two, cash focus; and three, accelerating the TWE Ascent program of work with high confidence around expected future benefits. Combined with our strong business foundations, including a powerful portfolio of brands with leading market positions, the continued outperformance of our key brands in key markets underpins our confidence in returning TWE to the delivery of sustainable profitable growth. I'm full of optimism and energy around the progress we're making and the future we are shaping. While we have work ahead of us to address some key specific areas, it is the underlying strength of our brands and wealth of opportunities in our markets that continues to excite me. Thank you again for joining us today. I will now hand over to the operator to take your questions. Operator: [Operator Instructions] The first question today comes from Ben Gilbert from Jarden. Ben Gilbert: I was wondering if you could just talk around pricing and has there been much investment in wholesale pricing in the China market to clear inventory, and it does look like there's been some further weakness on the pricing front through January. Samuel Andrew Fischer: Yes. Thanks, Ben. I think we're still in the midst of Chinese New Year. We're just getting some more data. We haven't changed anything in relation to our wholesale pricing, and we haven't given any kind of extraordinary discounts that would allow there to be any change in pricing. I do think as parallel dries up and we are seeing the parallel drying up and kind of those parallel operators look to get volume elsewhere. There could be some increased competition in the market, and there may be some margins that distributors are using to get that business. But generally speaking, I'm feeling very positive about this parallel initiatives that we're taking. We're getting very positive feedback from all of the formal distributors inside of China, and I will expect to see more stability and elevation in our wholesale pricing going forward. Operator: The next question comes from David Errington from Bank of America. David Errington: Sam, look, I suppose the key issue, the most pressing issue for investors right now outside of the operating performance, is the balance sheet repair, and that's probably where I'll address my question. If I look, you've got -- you've literally got, what, $2.5 billion worth of inventory at cost your payables basically broadly meet your receivables. So it's literally -- you've got $2.5 billion of cost that is your future growth of the business. Now how do you manage that -- how do you manage the company? I'm really intrigued because as you know, I'm a massive bull on Penfolds and the less said about the U.S., the better. How do you manage this where -- two of your three priorities is cash management, cost control because to me, the most -- the best way out of this balance sheet predicament is to grow, get your earnings growth back you're going through this transition period at the moment where you're rebasing. But I would like to think that that's not what we base our earnings growth on. How do you get your growth back whilst maintaining and repairing your balance sheet. It's going to be a pretty hard act. I want to see growth coming back for Penfolds. So I want to see growth. I don't want to see cash management. I don't want to see -- I just -- that's -- I just expect that. I want to see you growing again. So how do you manage getting that growth back, but at the same time of being in these constraints of having to control your cash and having to cut costs because I worry about that as to whether you can do -- you can wear two hats. Generally, growth companies don't have to worry about cost control. They just manage their cost. They don't have the cost control. They don't have to cut costs. How can you get both, if you like? Because if you can, it will be fantastic, but can you do both? You've got all this inventory, your payables equal, your receivables, you're in a wonderful position, but you need growth. How do you get both Sam because that's the magic source for mine? How do you do both? How can you do it -- how do you do it? You've been there, what, 100 days? How are you going to do it for us? Samuel Andrew Fischer: So thanks, David, for your question. And I'm glad to see that we agree with each other because I think you're right about growth. And I don't know how many times through that presentation, I mentioned execution, activation distribution gains, momentum at a core brand level. And that's what underpins the whole of what we're focused on as we go in at an operating unit level in the business. . That's a cultural shift in relation to what we do on the shelf, what we do on the menu, what we do with wine consumers and activation across core components of the business. And I'm really encouraged by some of the early signs. You're right. I haven't been at this for very long. But we've wired depletions growth and execution standards into our performance rhythm. And that is the premise of the conversation we have with all of our teams every single month. The positive news coming out of China around momentum of the Penfolds brand is you just can't underestimate that impact for us. It's early days, and we're not even in the Chinese New Year, but lots of what happens at a brand level happens before the actual celebration. And we've got some great anecdotal feedback on the strength of the brand, how well it's being received from a gifting perspective in the year of the horse. So lots to be really pleased with there. I think DAOU and Frank family Stag's Leap, I've talked a little bit about in the U.S. and Matua again, all growing outside of this disrupted channel of California. And I've met with BBG on now twice in the two trips that I've had to the U.S. And I'm increasingly confident that they're really getting their arms around our California challenges so that H2 will be much more positive than we saw in H1. So we do need to focus on discipline inside of our organization. That discipline starts with how we execute and how we drive depletions, but it also starts with being fiscally responsible. And we just have to make sure that we spend all of our money on supporting the growth that you talked about and that we control our cash spend through CapEx. So that's the short term. And in the longer term, I've talked a lot about Ascent. It's difficult for me to bring real color to the momentum that Ascent is having inside of our business in clarifying exactly the portfolio that we will execute and ensuring that we've got a fit-for-purpose operating model to support that growth agenda and that we remove where possible, any duplication and wastage, so we can free up funds to support growth. So it's all really clear for us, but you're right, depletions sits really at the core of everything. David Errington: So clarifying, once, '26 transition year. I get that. Is '27 a transition year as well? Or can we -- can this start materializing getting some growth back? Look, Penfolds 17% depletions is terrific. Coming into Chinese New Year. But do we have to go through 2 years of transition. Is that what you're asking us, Sam? Or can we just go through 1 year and then we can reexpect to be coming back again. That's important because if you're asking for 2 years, that's fine. But what are you actually asking for 1-year transition plus we reignited? Or do you want 2 years? Samuel Andrew Fischer: I think, David, the process of Ascent, we've said is multiyear. This is a really big transformation program, and we'll continue to develop that project through that period of time, and we're dealing with some things inside of the business that are going to take longer than 1 year. And we've talked about some of those inventory challenges. But in relation to building momentum behind the core brands that we're going to focus on, I expect that momentum to continue to build through that period of time while we deal with some of those structural challenges that we've talked about. Operator: The next question comes from Shaun Cousins from UBS. Shaun Cousins: Just a question regarding Penfolds and this is possibly better for Tom King, but I learned he is not on the line. I think in October '25, the company admitted that sort of reallocating product previously you marked to China was less of a plan as there was risk of that product going -- ending back up into China by way of a gray market. Did Penfolds kind of lack curiosity around the ultimate end market demand for those non-China and non-Australian markets? Or was demand generation ineffective? Or was there just pressure reallocated? It just seems to be that this is another reason for your -- the challenges you have in Penfolds is that you haven't built enough demand in other markets and it looks like you've lost a little control of your supply, please? Samuel Andrew Fischer: I think those markets do look disrupted because of the really specific actions we're taking around operators that we've identified as contributing to parallel. But actually, when you look underneath that and we look at the performance in key markets like Malaysia, Thailand, Singapore, and we see how that brand is being developed actually is outstanding work. One of our Board members was up and saw an activation at a table in a restaurant where it was just full of Penfolds. So I really think the brand in the markets outside of China is in great health. The numbers are just being disrupted a little bit as we kind of normalize what is domestic consumption versus what is consumption that's been driven from outside of the markets. So I think that's the best answer. I think the brand is in a great place in all those markets that I've seen outside of China. Shaun Cousins: But how are you selling too much product in because -- are you not able to appropriately determine what the end market demand is because if you're worried about product going in that it ends up in China, then that would suggest you don't have your arms around the appropriate end market demand, even though the comment you've made is pleasing around the brand being developed well, but it looks like you don't appropriately understand how to size what that true demand is. Samuel Andrew Fischer: I mean, I've used this word before, but I think we have had a really forensic look at volumes in some of those markets. We've looked for anomalies. We've looked at what doesn't seem to add up to what we would expect to be in market consumption where we've seen sort of anomalies in specific channels we've taken corrective action. Difficult for me to speak about the past because I wasn't here, but certainly from now going forward, we've made really significant corrective actions to erase those anomalies and focus wholly and solely on in-market depletion and execution. Operator: The next question comes from Richard Barwick from CLSA. Richard Barwick: I just want to just clarify the commentary that you provided on Americas EBITS So about $90 million for FY '26. But you actually -- you've got -- I guess, you've got the caveat there, excluding any benefits and costs of the RNDC settlement. So can you just clarify exactly what those benefits and costs are as they relate to EBIT, please? Samuel Andrew Fischer: So I think -- Richard, I think the way that I'd sort of answer that one is that we've described that there's a benefit coming from the California settlement, and there will be some costs associated with that. The net of the benefits less the cost will be a positive number. So that's the first piece. And then the guidance we tried to give you around that $90 million is to say that is excluding the flow-through of any of that benefit. So treat it for the purposes of trying to think about your outlook is just excluding that net positive benefit from your numbers, if that helps you. Richard Barwick: All right. So -- but when we get around to August, Stuart and you're reporting Americas EBIT, therefore, we should be thinking about $90 million, then plus some small net positive. Samuel Andrew Fischer: That's probably right. And whether we ultimately treat that as a material item or in the income. We haven't finalized yet, Richard, but we'll be clear on that when the results come around. Richard Barwick: Okay. And then one other clarification on the Americas EBITS You also talked about as far as for the group, you mentioned obviously second half growth -- sorry, second half EBITS to be a little bit higher than first half. But the sort of the -- I guess, the reference or the description that goes along with that is improved momentum in California following completion of distributor transition. How -- where are we in that? Is the when do you sort of classify the distributor transition has completed? Has that occurred already? Again, just trying to get a little bit of better understanding there, please. Samuel Andrew Fischer: Yes, sure. Thanks, Richard. I think when we transferred the business to BBG, there were many others that transformed and there were some real operational challenges that they went through, which really impacted our ability to put product on the shelf. So having met with BBG, the CEO in January, I got great comfort that they've rigorously worked through some of those operating challenges. We saw some real improvement in January. It's only 1 month. We're not declaring victory. But I guess what we're saying is that we would expect to see continued improvement through the first half on the back of the significant interventions that BBG has made to their operation. Richard Barwick: Okay. All right. So for what you can see, it looks like it's progressing, but it's a process that will take place across the half. Samuel Andrew Fischer: Yes, I think that's fair. . Operator: The next question comes from Sam Teeger from Citi. Sam Teeger: Just another question on the U.S., please. How are you thinking about the potential disruption outside of California and the seven other states that RNDC is getting out of. I know none of them are as big as California, but looking at market data collectively, they are bigger. And I guess when will Reyes finalize their sales plans for your brands in these markets? And what the potential here that the sales plans could be lower than what RNDC? So you have the view and just how does the inventory transfer across Will that be clean or anything we should consider on this? Samuel Andrew Fischer: Thanks, Sam. I'll try and answer that. I just had a little bit of trouble hearing you, if not I'll get Stuart to supplement it. But Reyes is a business we know well. I've met with them and have known them in my previous life. So a huge distributor in the U.S. They've got multi-beverage capability, having taken on a large portion of the RNDC business in California. So we feel great confidence. I believe that the transaction is progressing. And I don't know exactly when it will complete, but we would expect in the half. So that's very positive and I think goes a long way to supporting and strengthening RNDC's overall balance sheet. I think from our perspective, it will be about 5% of our business, again, reducing our reliance on RNDC and they're taking over the RNDC business. So lots and lots of the capability that exists in those -- in RNDC is transferring to Reyes. And all of those people know our brands really well. So we're expecting really a much, much smaller disruption through transition. And we're already speaking to Reyes about kind of building plans. So again, we've got a really seamless transition once the transaction is complete. So I think we feel great confidence. We're working with the team already, and we've got lots and lots of respect for Reyes as a business. Stuart, anything to add? Stuart Boxer: Look, the only thing I'll say just to sort of further clarifies it's quite different to the California transition in the way that Sam described in that the arrays will pick up the business people, et cetera, from RNDC. So it picks up an operating business. which makes it a whole lot simpler from a transition perspective than what we've seen in California where BBG basically had to gear up from a zero start. So it's quite a different situation there. Obviously, these things always have elements of change associated with them. But fundamentally, we see us being significantly smoother than what we saw in California. Operator: The next question comes from Michael Simotas from Jefferies. Michael Simotas: First one from me, another question on the U.S., if I can. When you repurchase the inventory from RNDC in California, you're going to be holding it on your balance sheet at a cost which would effectively give you 0 gross margin. What confidence do you have in your ability to recover that cost? And is there a risk that you will need to impair that inventory? Samuel Andrew Fischer: Look, we're pretty confident about that. We're sort of well aware of the nature of that inventory, our team sort of working through that detail and that we are confident that inventory will be sellable in the way you described. Obviously, the shape of the P&L will be a bit of a challenge in the way you've described, but we'll sort of help you out with that when we get to the full year. So you can see through it. But certainly, what from what we see, it's going to be from a recovera perspective. Michael Simotas: And then a broader question as part of Ascent plans to evolve the portfolio further. There's a lot of debate around structural versus cyclical impacts or factors in wind. But one thing that seems pretty clear in every market around the world, including China as consumer preferences are shifting towards lighter red and white. Outside of Frank Family, none of your brands are really known for either of those styles. What does that evolving the portfolio look like? And is that organic? Or would you need to make more decisive -- or take more decisive action on the portfolio either exiting brands or potentially acquiring new brands? Samuel Andrew Fischer: Yes. Thank you, Michael. Yes, I think that's right. And the work we're doing is data led and future back. So we sort of have a look sort of 5 years down and look at the big trends we see at a category level and overlay our brands against those trends. And I guess that's where the luxury white came from. We sort of looked at that and said, "Gee, we can see luxury white wine having really interesting runway starting to get a lot of traction". And we looked at our portfolio and said, well, we've got some really incredible brands here led by Yattarna, can that play a much, much bigger role as we look into the future. Luxury red, of course, we can still see that whole premiumization trend over the 5 years, playing a real role as well. So they're playing right into the core. Again, when we look at some of these lighter styles, that's where we really looked at Matua and Sauvignon Blanc continues to play a real recruitment role for the category. It brings wine into new occasions on the back of Marlboro, Sauvignon Blanc and we've got an incredible brand and an incredible position in Marlboro. So that's one -- that's actually playing straight into that, what we call refreshment or lighter styles. And where we've got other gaps, you mentioned things like Rosé and perhaps Pinot Noir. We're very much looking into our portfolio and saying, how do we innovate or how do we bring a variant forward so that we can really play a much, much bigger role in those growth areas. So again, without getting into too much detail, a whole lot of opportunity there. We're already doing it with brands like Squealing Pig, they're disruptive. They're innovative but how we do that with our luxury portfolio, we're still working through. Michael Simotas: Okay. So it's more about scaling products that you've already got and potentially launching new products within existing brands rather than anything more dramatic than that. . Samuel Andrew Fischer: We're blessed with a wealth of brands and products and vineyards. So we've got everything we think we need to really play a much, much bigger role in the parts of the category that we see as having real growth potential. That's our priority. Operator: The next question comes from Tom Kierath from Barrenjoey. Thomas Kierath: Just a bigger picture one. I suppose like over the last 15 years or so, every 4 or 5 years, TWE have these kind of big write-offs, overstocking issues, how do you kind of improve your processes? And I suppose, understanding of where inventory is so that you don't have these issues going forward. I mean, it would just give people a lot more confidence that the reported numbers are actually a lot more reflective of what's going on. Do I have any color you can provide on that, Sam? Samuel Andrew Fischer: Sure. I mean difficult, again, just to talk into that past. But I do think this medium- to long-term strategy we're employing through the Ascent program is going to give us much more clarity. We're really looking at the category, understanding the trends and then understanding kind of how we wire ourselves to tap into those trends, but also to compete harder. And I really do see that as an opportunity. I've mentioned execution and activation and all these words so often, but culturally inside of our organization. what is going to underpin future and consistent growth is winning in the marketplace. And I keep talking about how blessed we are with the portfolio of brands that we've got, the market positions that we've got. We've got to take all of that DNA and turn it into winning in market through execution. That's what will underpin the consistency of the future. Some of that's a bit of a cultural shift inside the business. Some of that's taking a much, much longer-term view and making sure we're positioning ourselves against those trends. So I'm conscious of the change, and I'm conscious of this history. But I guess I'm thinking about it from a forward perspective and saying, how over the next 5 years, can we position ourselves to drive that consistency. Operator: The next question comes from [ Noah Hunt ] from MST Financial. Unknown Analyst: I just had a question on the composition of the Americas EBITS, so if I take down earnings out of the Americas earnings result, the rest of the luxury wines in the Americas looks to be close to, if not loss making. Is this the right way to look at this? And if so, why is this the case? And what's the fix going forward? Samuel Andrew Fischer: I would -- look, the reality is that, that Treasury Americas business is one business. It's not run as five individual P&Ls with different brands. So it's difficult to extract one brand out of it and look at the rest. But I certainly understand the mathematics that you've tried to do there. I think the component of the results we've already talked to around what's driven the top line performance and some of the issues there in California, et cetera. So you've got a result driven by the things we've talked about, which has resulted in an outcome that you've described in a way you have. But I think back to what we're focused on, we're focused on driving depletions growth across the entire portfolio to move through this period of distributor transition in California to be able to move through the period of working through that distributor stock that we've talked about over the last couple of calls. To get ourselves into a position where we've got a well-performing portfolio of brands in that market. And so at a point in time, I get your point, but we're sort of taking a long-term view as to the outlook of that business overall with that collection of brands. Operator: The next question comes from Caleb Wheatley from Macquarie. Caleb Wheatley: Just a follow-up on Penfolds and the depletions in China. I appreciate the earlier comments, there wasn't any material change from wholesale pricing or funding on that side that plus 17% depletion still looks relatively strong compared to PCP. I just came to understand if there's anything else to call out from your respect in terms of what drove that number? And any potential thoughts on how it may trend as you work through this destocking process, please? Samuel Andrew Fischer: Thanks, Caleb. I think, look, we've had Tom has been up in China in January. He's been in the south. He's been with distributors first, second and third tier distributors. And the brand is in great shape is his feedback, which is terrific. It's being mentioned in the same sentence as Moutai as being two of the brands through the Chinese New Year at that point that are doing really well. I think what's underpinning that performance is, one, the strength of the brand. And two, the strength of the team and the activation the team is working on in the market. And we talk about kind of that [ Maybach ] execution, but it's extraordinary to see what that drove on social media and at a brand level through that touch point. So I really think it is about kind of quality execution. It's about engaging with consumers where they are, our social media activations. And also the fact that we've got such confidence now coming from our Tier 1, Tier 2 and Tier 3 distributors. They've seen this really definitive action that is designed to strengthen their position in the market, and I think that's giving them confidence that they can continue to support and invest in Penfolds for the longer term. So there's just a suite of things here that are getting us excited about, one, this Chinese New Year, and two, kind of the future. And I guess the all of the things that underpin that depletions momentum to the half and the expectation that it's going to continue. Operator: The next question comes from Phil Kimber from E&P Capital. Phillip Kimber: I was going to follow up on that question on the depletion slide. I mean you quote outside of China, you've got some specific data points, whether it's Quantium or Nielsen or whatever, but it doesn't seem to have one for China. So where is that depletions data coming from? Is that, I guess, you asking our distributors about their depletions? Or is it actually sort of measured consumer data? I just wanted to understand that a little bit better just because 78.2% a very strong number, and it's no doubt the brand is strong, but it does seem a lot higher than the sort of feedback you're getting over the overall wine market in China? Stuart Boxer: Yes, Phil, it's the depletions from our distributors out. That's the data we get directly from them. And it's for us sort of the cleaner set of data. As you know, the market data is a little patchy in China. So we think that's just the best and cleanest number to use. And it tends to be its depletions from our Tier 1 distributors. And certainly, historically, we have found that the Tier 2 is are not holding a lot of stock. So therefore, those depletions are a pretty good guide. We do also compare and cross check with data points like e-commerce data in Nielsen as well, which tend to also be pretty supportive of those outcomes. But e-com is a smaller part of the market and Nielsen is not necessarily 100% reliable. So we think that depletions number is the best to share. Samuel Andrew Fischer: I would only add that it's -- the brand up in China is it doesn't really act like you would expect a brand from a wine category to act. It's a genuine status symbol that plays a key role in gifting. And as we go into this CNY period, it's countering all of the trends of wine. In fact, all of the trends of spirits, and it's really behaving like one of the status gifts that are given during the CNY period. So outside of just comparing it to the category, it's really leading the whole industry. Phillip Kimber: Yes. And then I guess my second question is -- and I don't expect obviously a hard number, but your second half EBITS flat Penfolds, but growing in the other two divisions. But then we've still got this sort of 2-year process of resizing shipments to depletion. So I think it's sort of along the line of David Errington's question. Just -- to the extent can earnings effectively drop down again in FY '27? Obviously, it depends a bit on the underlying growth rate, but just -- the underlying growth of the business. But just in terms of rightsizing depletions and shipments. I mean, is a big chunk of that still yet to happen and will happen in FY '27. So we should sort of have that in our thinking. Samuel Andrew Fischer: Yes, Phil, I understand what you're trying to do, and I know it's a difficult one, and you've sort of outlined some of the components of the challenge there. So I mean, the components and the building blocks of this, obviously, to your starting point is the underlying depletion performance, and you've heard a lot about what we're trying to do to drive that. So this half, and this year, you're aware that we've already dealt with a reduction of customer in Treasury Collective by about 200,000 cases. We've made good progress on the parallel piece in China in particular, only a modest impact on the inventory in Treasury Americas in the half. But obviously, in this half, we're now buying back that California piece, which is an important part of the overall equation. So we certainly feel like we're making good progress this year. But to your point, in terms of how it's spread between the 2 years and the impact on the year-to-year number, it depends ultimately on the depletion growth and how that is all balanced. And what we're trying to do is to sort of end up with a sort of pretty good landing, but there's a lot of variables. Operator: The next question comes from Michael Toner from RBC. Michael Toner: Look, I wanted to drill in a bit more in the U.S. And I just want to understand to what extent your Americas outlook might reflect the possibility of further disruption caused by some of the issues RNDC seems to be experiencing nationally even outside of California and the markets sold to Reyes because some of those issues seem to extend well beyond California. Apparently, they've lost a couple more suppliers. There's news reports of some layoffs kind of planned for Feb. And that seems on the face of things that's something that could cause quite a bit of disruption. And I know that Reyes -- sorry, RNDC still accounts for about 20% of your NSR ex California in Reyes accurate? Samuel Andrew Fischer: Yes. No, it's about 18% of the business once the Reyes transaction completes. And it's useful to note that actually outside of California, RNDC grew in the half for us by 2.7%. So that just gives us a bit of an indication of their operating health. I do think that the work they've done on the balance sheet by the refinancing has made a material difference. And the Reyes transaction, again, the sale will make a material difference. So this is still a really substantial business, particularly in Texas. And from what we can see through our intelligence on the ground, still operating really, really well. So they're doing some concrete things to shore up their own balance sheet. And I guess through the conversations I've had with their CEO, which have been multiple, we've got confidence they're going to continue to be a great operator for us in the remaining states once the RNDC deal is done. So I will continue to have close dialogue with them. We'll continue to work on all of the plans to continue to drive our business forward. And I think we've got confidence that they'll be a partner with us for the longer term. Michael Toner: Great. And just quickly on Reyes. I know it's a small proportion of your NSR, but my understanding is they don't have a huge amount of experience selling luxury wine. So I'm sort of wondering what you think needs to happen for them to scale up that capability? And sort of do you anticipate that being a hurdle for you guys because I sort of -- I don't imagine they can sort of just instantaneously pivot their sales force to sell luxury inventory, if it's not something they've had a lot of experience doing historically? Samuel Andrew Fischer: Yes. No, I mean I think they've predominantly been a beer distributor. And in California, obviously, that's extended into spirits. And I think they are more and more moving into being a multi-category distributor in the U.S., certainly in relation to the market, all of the channels, all of the accounts, they know them. And they've got reach that's probably beyond any other distributor because of that. So that actually creates a bit of an opportunity for us to look at potentially some new channels. . But very importantly, they are acquiring the RNDC business, which has got all of that capability and long history of distributing wine and spirits. So they see that as being one of the key benefits of the transaction is that they're bringing that capability into their organization and ultimately, that can be infused across their organization. So in some ways, that migration is giving us great comfort. Operator: The next question comes from Mark Southwell-Keely from Select Equities. Mark Southwell-Keely: We're seeing with respect to some Baijiu distributors and even including Moutai. We're seeing the -- some of the Baijiu brands adopting strategies to help with the distributors working capital. So the working capital of some of these distributors is still under significant stress. And we're seeing some of these brands, including even Moutai, adopt various strategies to assist, for example, selling on consignment and also adopting some pretty aggressive SKU rationalization and not overburden distributors with SKUs that are unpopular with consumers. I'm just wondering what your thoughts are around what you're seeing happening with the -- in the Baijiu sector and with the distributors and perhaps whether you might or to the extent that you guys might adopt similar strategies to assist the distributors? Samuel Andrew Fischer: Yes. Thanks, Mark. Obviously, we are watching the Baijiu category. There's been -- we got lots of noise and lots of challenge, including some innovation with lower [ ABV ] as they try and address some of the structural challenges in the market. But I think some of that announcement that came out from Moutai had a positive impact, actually brought confidence back in where they very proactively addressed some of the concerns of their distributors. And some of that's flowed on to confidence at a category level. And they've obviously shored up their pricing, which has also helped. We're not -- we have a very, very long history with our distributors. They've really been partners with us in growing our business in China. And I would say we're privileged to have their strength behind us. Where it comes to their working capital, I guess, the inventory reduction program that we're driving our depletions through is going to be material for them in relation to realizing some working capital but we haven't looked at any other support nor have they asked, and we're certainly not looking at consignment or anything like that. I met them in December. I would say it was a really terrific meeting. We took concrete actions on parallel. I think they've been really delighted by that. We're still working all of that volume through, but they're seeing some real positives in the market through that reduction. So I feel like the confidence that our distributors have in us is really strong, and we'll continue to leverage that as we build the brand going forward. Mark Southwell-Keely: What about in terms of secure rationalization, perhaps? Samuel Andrew Fischer: I think that through the Ascent program, when we talk about simplification and having clarity of roles, across the portfolio. That is in scope and where we can drive simplification, bring more focus to the portfolio to drive kind of that real upside potential. We will look at it and Penfolds will be one of them that we look at, but no decisions made as yet. Operator: The next question comes from Jason Palmer from Taylor Collison. Jason Palmer: Just in respect of the Cali and non-Cali redistribution of inventory, so the $100 million and the $125 million. How much of that occurred in 1H '26? And what's your assumptions around 2H '26 in your outlook? Samuel Andrew Fischer: Yes. So I sort of touched on it a little bit earlier. So in terms of the first half, it was a very modest reduction of inventory within the Treasury Americas portfolio. And whilst it's not relevant to the $100 million and $125 million numbers you just referred to, we did take 200,000 cases out in relation to treasury collective in the first. Half. In the second half, we are obviously completing the RNDC settlement transaction, including acquiring all that inventory. So that deals with the inside California component as part of that RNDC transaction, so that will occur during the half. In terms of what happens in relation to the rest, we remain committed to that 2-year program where we are working through that over the course of that period of time. But in terms of the specifics beyond that, ultimately, will be dependent on depletion growth as well. So we can't give you any further guidance on that at this time. Jason Palmer: Okay. Just to be clear, the hundreds in California is cleared with the RNDC transaction in the second half, is it? Samuel Andrew Fischer: Yes, it is. Sorry, I dropped out. Yes, it is. Operator: The next question comes from Bryan Raymond from JPMorgan. Bryan Raymond: One is just on the dividend and the balance sheet. Just interested if there's any sort of threshold you'd be looking out for when you reinstate the dividend? Is there a -- do you need to see that gearing level back in the target range or below a certain threshold to begin bring that dividend back? Samuel Andrew Fischer: So we haven't been as specific as that, Bryan. We've talked to this program of getting that gearing down over a 2-year period and the decision to reinstate will really be dependent on the progress we're making and that trajectory we've talked about down towards that 2x. Now the factors that will feed into that will be where we are at in terms of things like Project Ascent, the timing of the cash flow benefits that come out of that, both in terms of the cost benefits, net of any sort of cost to achieve those and any proceeds from the portfolio reduction. But it's too early to call at this stage the timing of those. But obviously, as we get closer to the end of the financial year, past the June Investor Day, we go through that, we'll have some greater clarity on the timing, which will help us to have a greater sense of the timetable. But ultimately, it will be a decision for the Board that they'll make on when the dividends are resumed. Operator: The next question comes from Shaun Cousins from UBS. Shaun Cousins: Just a question regarding the transaction you did with RNDC -- or one regarding the RNDC inventory in California. Can you discuss what the other options that were available for this inventory as it seems to have been a transaction where the Treasury -- TWE gearing has gone up? And can you I guess, discuss the risk around your broader EBIT, if these volumes crowd out higher-margin volumes and maybe further to Mike's sort of question, what's the risk that you actually need to invest more A&P that these become not just neutral gross margin or gross profit transactions, but you actually need to invest more in A&P. I just keen for you to sort of amplify the alternatives you looked at and then just sort of a little bit more why it was the right thing for TWE shareholders for you to add gearing and then the risk that these are actually crowd out higher-margin sales or are actually EBITS loss-making to sales, please? Samuel Andrew Fischer: I think the way that we've thought about that, and it really relates back to when we disclose sort of the $100 million and $125 million that we need to do with its excess stock. The distributors are holding that we need to get down over a period of time. And the impact of working that excess stock through the system, if you like, is that it replaces us sort of selling stock out of our own inventory to work through that. Now whether, in fact, that was achieved by virtue of RNDC transitioning or transferring that inventory from California into their other markets across America or whether we came to the position that we came to, which is where we bought that inventory back is effectively a timing difference anyway, Shaun, in terms of how that flows through. But our perspective there was that a sort of clean outcome for California, where we've got that inventory back in our control, and then we can control how it gets distributed and redistributed across the market. and doing that in a way that was beneficial for RNDC from a cash flow perspective was linked up with that settlement was actually well -- definitely the best decision for the company from a whole lot of perspective. Shaun Cousins: And the risk that you sell these actually these are negative EBITS loss-making sales, like you have to put more A&P behind these sort of sales to try and move it along? Samuel Andrew Fischer: I think it will be the same in that we're ultimately driving depletions in the marketplace. And the A&P that we put behind the brands is to drive depletions. And that focus on depletion growth, again, you've heard about today doesn't really change. Now clearly, the faster we can drive depletions growth across the business, the faster we can work through this inventory and that's the broader objective that we are focused on anyway. So it doesn't actually change our execution focus at all, Shaun, because we are definitely focused on just driving depletions growth. Operator: There are no further questions at this time. I'll hand the conference back to Sam Fischer for any closing remarks. Samuel Andrew Fischer: Thank you very much for your time this morning. We look forward to updating you at our Investor Conference on the 4th of June and through our full year results. Thank you very much. Have a very nice day.
Aidan Williams: My name is Aidan Williams. I'm Co-Founder and CEO at Audinate. With me is Chris Rollinson, our Chief Financial Officer. In the first part of the call today, we'll be talking through the investor presentation that accompanied our financial statements, both of which were lodged with the ASX earlier today. [Operator Instructions] I'd like to start by recapping Audinate's first half highlights before we move on to covering key operational and financial metrics and then look ahead for the remainder of the financial year. Later in the presentation, I'll be briefly covering the relationship between AI, Audinate's products and technology and the broader AV industry as a whole. Turning to Slide 3. It's pleasing to see 12% growth in U.S. and Australian dollar revenue over the prior period. We've seen strong bookings in the first half, supporting achievement of our full year FY '26 outlook. We've also continued to maintain strong gross margin percentage of 82.6%, and that's consistent, and it's been driven by favorable product mix shift between hardware and high-margin software products. Operationally, we have continued to execute with strong results in key operating metrics. Design wins, that is the number of manufacturers signing up to use Dante technology for the first time, is up 8% over the prior period with 66 design wins over that period. The Dante product ecosystem continues to grow with a further 344 Dante products coming to market during the half. This brings the total of Dante-enabled products on the market to just under 5,000, and that's coming from over 516 manufacturers. Each new design win and product coming to market is a leading indicator of future revenue for Audinate. Training for AV professionals is key to increasing the usage of Dante networking and AV projects and installations. We continue to train 4,000 AV professionals per month in our certification programs and training courses with a total exceeding 300,000 trained and Dante certified professionals globally. After the acquisition of Iris this year, we have achieved a key milestone with the commercial launch of the Iris platform in early December 2025. Iris is a cloud-first video camera control platform, which expands our ecosystem of video products and extends our product portfolio with deep camera control functionality. In the remainder of FY '26, we will be investing in go-to-market and driving the adoption of Iris. Strategically, it has been a big year for Audinate. To briefly summarize, our long-term strategy remains to capitalize on the growing installed base of networked AV devices and provide the software platform used by the industry to deliver projects globally. AV installations are generally understood to require 3 kinds of functions: audio, video and control. Today, including the Iris acquisition, more than 8 million audio/video devices are potentially available in our product ecosystem. Therefore, the time has come for us to invest in the third leg of the stool, that control function, and this has financial and organizational implications for Audinate. Over the last half, Audinate has made organizational changes to better align our cost base with our strategic objectives for the Dante platform. These changes reflect the natural progression of the product investment cycle with several major initiatives now complete. Operating costs for FY '26 were previously indicated to increase by 25% over FY '25, and that was reflecting continued investment in strategic initiatives, including Iris, Dante Director and the broader Dante platform. Following the organizational changes made in the first half, operating cost growth is now expected to be 20% over FY '25. With the completion of the Iris acquisition and the appointment of an industry veteran, TJ Adams, as Chief Product Officer, we have in place key capabilities and talent that will advance our long-term vision of providing an interoperable audio, video and control platform for the AV industry. Turning to Slide 5. You can see key financial metrics for the first half. Revenue for the half was USD 21.1 million, growing 12% over the prior period. In this context, this is around 3x the underlying growth rate of the AV industry according to AVIXA, which has slowed with the abatement of COVID and return to office tailwinds and also tariff uncertainty. Gross margin percentage has increased slightly to 82.6% due to an ongoing favorable product mix shift toward higher-margin software solutions. Post the acquisition of Iris, we have AUD 70 million remaining on the balance sheet, which enables us to prudently invest in our platform strategy. Slide 6 breaks down our product portfolio into 4 categories. Adapters are hardware products sold to end users and AV projects. Adapters revenue increased 51%, supported by the launch of Dante AVIOs for installation. These are a next-generation Pro S1-based adapter targeting the professional installer market. Embedded chips, cards and modules are electronic components sold to AV equipment manufacturers to connect their products with Dante Networking. CCM revenue reduced 4% due to lower demand for Brooklyn and Ultimo, and this is driven by the continued transition to embedded software implementations. Embedded software is royalty-bearing software used by AV equipment manufacturers to connect their products to Dante Networks. Embedded software grew by 17%, underpinned by increased OEM adoption of IP Core. Delivered on-demand, this embedded software reduces lead times and provides resilience against channel inventory cycles. Finally, platform software includes a range of PC and Mac desktop software and infrastructure products for AV installations. Platform software grew 9%, supported by the growing uptake of DVS Pro and early customer wins for Dante Director, our cloud-based AV management tool. Iris contributed USD 100,000 in the first half. Slide 7 shows continued strength in key operating metrics, each of which are leading indicators of future revenue. Audinate sales cycle to manufacturers of AV equipment involves an initial design win followed by a period of 12 to 24 months for product design to be completed, followed by repeat revenue derived from the ongoing purchase of chips or royalties as each new physical unit is manufactured, and that continues over the sales lifetime of the AV product. Design wins are the earliest indicator, and they represent manufacturers signing up to use Dante technology in their products. 66 design wins was a good and consistent result with prior periods, as you can see on the left-hand side of the slide. In the middle column, the number of manufacturer brands with Dante products in the market and importantly, the number of manufacturers developing their first Dante products continues to grow. There are now 723 AV manufacturers signed up to use some form of Dante technology in their products with 516 manufacturers shipping 1 or more Dante-enabled products today. The right-hand column contains a key indicator, which is the number of Dante-enabled products available on the market. During the half, an additional 344 new products came to market, making a total of 4,947 Dante-enabled products on the market. Since the Dante technology provides interoperability between competitive brands, the growing product ecosystem continues to strengthen the economic network effect of the Dante technology and its competitive moat. And I'll now hand over to Chris to talk through the financials. Chris Rollinson: Thank you very much, Aidan. So what we're looking at turning to the financial results for the first 6 months of the year, and so the year ended 31 December 2025. So for the first time, our results consolidate the performance not only of Audinate, but also of our studios after the completion of the acquisition in the first half of the year. So all numbers in this section are presented in Australian dollars. So firstly, if we look at the income statement for the first half, revenue was $32.2 million, gross profit at $26.6 million, and that represents for both of those key measures, 12% growth on the prior period. So revenue, again, was delivered at a strong operating margin of 82.5%, and this is really driven by the product mix between our chips, cards and modules and our higher-margin software products. If we look at our operating expenses, this has increased by 26% to $28.8 million for the first half. Now this reflects the ongoing investment in core capabilities, but also product innovation in products such as Iris, Dante Director and also the wider Dante platform. These operating costs in the presentation are excluding costs associated with organizational changes that we've made and also Iris acquisition-related expenses, both of these elements not reflective of underlying performance going forward. If we look at operating expenses and employment expenses, they've increased to $21.5 million for the period, and this compares to $16.6 million in the prior period, representing an increase of 29%. Now the increase in the underlying employment expenses is primarily reflected by the acquisition costs -- sorry, the acquisition of Iris. We've got higher variable performance-related incentive costs and also the increase in headcount in the second half of financial year '25, which helps support the further expansion of the Dante ecosystem. So what this translates to is underlying earnings before interest and tax into a loss of $2.3 million, and that compares to a gain of $0.8 million in the prior period. If we turn to the balance sheet, there's 2 key items to discuss on the balance sheet, which relate to our access to cash and also intangible assets. So a key item in the balance sheet that Audinate had access to is cash on hand of $70.9 million. Now that compares to $109.9 million at 30 June 2025. The change between the periods is driven by the investment in Iris, consisting of $31 million, which is net of cash received as part of the acquisition of Iris. And secondly, intangible assets increased to $68.7 million, which is up from $38.6 million and the key driver of that has been the acquisition of Iris in the first half of the year. And then finally, to the cash flow statement. Audinate has delivered operating cash outflow of $0.4 million in the period compared to $1.1 million in the cash inflow in the prior corresponding period. After intangibles -- investment in intangibles and fixed costs, our free cash flow for the period was negative $8.1 million, and that compares to negative $9 million in the prior corresponding period. So the choice to continue our strategic investment in new products, specifically Dante Director and Iris is there to drive our long-term performance and growth, and this has clearly impacted our free cash flow in the current period. But as Adam has outlined, the actions taken certainly on cost in the first half of the year gives us a much better balance of the investment run rate going forward. I'll hand it back to Aidan. Aidan Williams: Thank you. Okay. So the next slides are going to cover priorities, outlook for the remainder of the financial year, Iris and the implications of AI for Audinate and the AV industry. So this slide, Slide 14, is a single slide summary of Audinate. We have actually discussed many of the metrics on this slide earlier in the presentation, like the total number of Dante-enabled products and the ongoing growth in our training program. So I won't repeat those. Essentially, what I'd like to sort of highlight on this slide is that today, Dante is in over 7 million devices installed all around the world in an incredibly wide range of audiovisual applications. And so you can see a sample list on the right-hand side of the slide. This installed base and product ecosystem is a substantial opportunity for our platform products and services when we execute on our platform strategy. As you likely remember, we recently acquired Iris. As a product, Iris is a cloud-based control-first AV platform with a simple browser-based monitoring and control user interface. Like Dante, it is manufacturer agnostic, and it launches with advanced camera features, including AI auto tracking, color correction and cloud-based recording with a road map to expand into a range of encoder, decoder and vision mixing products. Ultimately, the way I think of Iris is that it aligns beautifully with our long-term vision for unified audio, video and control over networks. The Iris product launched commercially in December with a white label offering and also a direct-to-end user model. There are go-to-market synergies with Audinate's existing manufacturer OEM business and Iris' video capabilities and deep camera control functions complement the existing Dante product ecosystem with things like Dante Director. The slide actually contains quite a bit of information for your reference, and I don't plan to talk through it all right now other than to say that throughout the remainder of FY '26, we'll be investing in go-to-market and product development to drive adoption of Iris and scale with the ultimate aim of bringing audio, video and control closer together under a single interoperable platform. On Slide 16, you can see our priorities for the remainder of this financial year. Ecosystem expansion is our bread and butter. It generates revenue, but it also deepens our competitive moat and creates the foundation of installed products that will benefit ultimately our platform strategy going forward. Integrated solutions is about connecting our audio, video and control features and functions in useful ways for the AV project or AV installation. It means bringing support for next-generation control functions to a broad range of our manufacturing partner products and also our own products like AVIO. Iris market launch is about backing the team to deliver on their successful commercial launch with a coordinated go-to-market strategy and integrating ultimately the Iris and Dante product offerings together. Dante Director Evolution is about delivering Dante Director Pro functionality into enterprise applications with hundreds or thousands of Dante devices under management. Now given the recent commentary on the potential for AI to disrupt a variety of software and SaaS-based businesses, I thought it would be good to share some thoughts on the relationship between AI, Audinate and the broader AV industry. For Audinate, one thing I really want to point out is that the bulk of our revenue is linked to hardware devices that end up installed into physical locations. So here, you should think microphones, amplifiers, cameras and the like. So this revenue model is infrastructure-oriented rather than seat-based, and it is connected to the audiovisual equipment that's needed for physical environments. Another point to make is that the value of Audinate's key technology, Dante, is tied to the economic network effect created by interoperability between competing AV equipment brands. There are currently 7 million devices in the field with an ecosystem of 5,000 or so interoperable products from over 5,000 brands. As this ecosystem and installed base grows, the moat deepens since replacing or reworking the portfolio of Dante products and the installed base all around the world would be very expensive. Ultimately, I see Audinate's and Iris' technology, which is really about networking, APIs and platform services as enabling workflow automation and AI applications. Dante and Iris put audio and video signals onto networks. and they both provide APIs to control them. This creates a natural foundation for AI and workflow automation that can be done in a way that's not been possible in the industry before. More broadly in the AV industry, activity is often project-based with 3 broad phases: design, install and operate. AI is broadly applicable to all 3 phases. So for example, converting requirements to detailed design specifications during the design phase, lots of ways of doing that, either from English language or from automatic scanning of rooms. For system programming work during the installation phase, there's a lot of like programming work, which is kind of analogous to the sort of software work that people do today and for workflow automation and monitoring of audiovisual systems during operation. Furthermore, a technology transition is actually underway in the AV industry. So that's from traditional bespoke AV hardware boxes that get installed into rooms typically with looms of cables and these types of installations, the bespoke AV installation really has limited or no APIs at all. So there's a transition from that sort of physical boxes and wires approach to IT compute and AV software connected by networks like Dante with APIs to control them. The further that the industry travels down this transition, the easier it becomes to use AI technology in AV systems. In the AV industry, Audinate, Dante and Iris provide key networking and control technologies that ultimately end up enabling broader adoption of AI throughout the industry. So I think actually, ultimately, Audinate is uniquely positioned as a key technology provider enabling AI in the AV industry. Finally, Slide 18 summarizes the FY '26 outlook. I won't talk through all of the bullets on this slide. Big picture, ongoing strength in the core metrics cited earlier indicate continued progress in what we call our profitable land grab part of the business with U.S. dollar gross profit growth expected to be between 13% and 15% over FY '26. In context, this represents 2 to 3x the overall industry growth rate, which has been slowing. As I said earlier, our long-term strategy is to capitalize on the growing installed base of Dante devices and provide the software platform the industry uses to deliver audiovisual projects and services globally. The acquisition of Iris, the maturing of Dante Director and the onboarding of industry veterans, specifically to develop our platform business are strategic moves aimed at delivering our long-term vision. Making these moves involves investing prudently. Previously, we indicated that operating costs in FY '26 would increase by 25% over FY '25. But following the organizational changes made in the first half, operating cost growth is now expected to be 20% over FY '25. So to wrap up, there's a nice quote here on the slide, which I'm not going to read, but there is an industry shift underway from proprietary AV hardware to IT style networked and software-driven solutions. That industry shift will enable increased use of AI technologies quite broadly. I can't think of a company better placed than Audinate to drive and capitalize on this industry transformation. And I'm excited by the talent and the capabilities we now have at Audinate to make our vision a reality. And with that, I'll hand back to Chris to coordinate questions. Chris Rollinson: Thank you, Aidan. So let's just go to the questions. I think there was a question from Roy Van just in relation to, again, how does Audinate think about the potential threats and opportunities from AI as it relates to Dante and Audinate more broadly, given we've just gone over that, it might be just worthwhile. Aidan Williams: Yes. I guess I don't want to sort of repeat what I just said. I think that's -- what I just said is probably how I would think about it. So there's an element of Audinate's business, which is fundamentally connected with physical devices and physical spaces. And that's the software that goes into microphones and cameras and speakers and things like that. So what we are really engaged in is this industry transformation project. And as the industry actually shifts from bespoke physical bits of hardware with point-to-point cabling to much more in the way of networking, those physical devices like microphones and speakers don't go away. So there's still a need for the Audinate software stack to be inside them. But there's a huge opportunity to provide infrastructure to enable things like AI to be used for the design, configuration, installation of audiovisual systems and also to manage and monitor them in a way to really add value to the audiovisual user experience that people have. So I think we're in an interesting moment where it's very hard to predict what the future will actually turn out to be. But I think Audinate is in a great position because we have -- the bulk of our revenue currently comes from a business model, which is associated with physical environments, physical spaces and infrastructure. And as we build out the software and platform services, that's a different kind of software infrastructure that will enable things like AI automation to take place and it will actually add value to our product offerings going forward. So I think if we're smart, then we should be able to come up with business models that play into an AI future. And clearly, internally, we do a lot of software development. So there's plenty of upside and value to be had for us in terms of our ability to continue to develop, maintain and support the kinds of software products we have today. And so there's a lot of efficiencies for us internally in addition to the comments I was making about the overall industry. Chris Rollinson: Just a question from Sinclair. Can you provide a little more detail around the Iris go-to-market strategy? Is it focused on OEMs or channel relationships? And is there a need to face end user customers? Aidan Williams: Yes. So there's actually a few approaches to go-to-market with Iris. Today, Iris is actually in the market with a white label offering from a manufacturer. Going forward, we think that the primary go-to-market motions for Iris will be a channel-based or a distribution-based model where Iris gets bundled in with the purchase of cameras and also a direct-to-end user approach. With the launch of Iris, we've actually had plenty of people jumping on to the free part and actually starting to experiment, and we're seeing those conversions and camera onboarding onto the platform through the direct marketing to end users. It will mean some shift in terms of the organizational structure for Audinate. So it's not entirely foreign from what we've been doing to date. So we have been making products like AVIO adapters that get used in AV projects and installations. Iris is like a software solution that also will be used for projects and installations and/or event production. So going forward, we will be beefing up our go-to-market with respect to channels, bundling, getting the Iris product to be bundled with things like cameras, for example, at the place where people buy them, such as from a distributor or a retailer, but we'll also be continuing on the end user part of it as well, the conversion side of it. So it will have some implications, but that's not dissimilar to some of the platform things that we're thinking about. So selling Dante Director into installations. Iris has a similar, not the same, but similar go-to-market motion as that. Chris Rollinson: You want to talk about RØDE? Yes. So a question just in relation to Audinate signed an agreement with the Freeman Group and Freeman owns RØDE. So just to explain a little bit more about that partnership. Aidan Williams: Yes, for sure. So normally, what to say about that? So Audinate would not typically be disclosing things like road map stuff and what products might be coming out. But clearly, RØDE is a global company, providing a whole range of audio and video products. And RØDE has actually also acquired -- if you have a look, they've acquired a number of brands like Mackie and Lectrosonics and things like that, which are in the audio space. So they have a really interesting combination of both audio like microphone, mixers, radio microphones, things like that, but also a very successful range of vision switcher products with things like the RØDECaster and the RØDECaster Pro. So there's -- RØDE is a very interesting company with both audio and video needs. So they're actually also based here in Sydney, which is really nice to be able to go and have a chat with a local Australian company that's also with a global footprint. So that -- yes, I'm not sure what to add to that apart from to say that I think there's a broad range of RØDE products that can benefit from widespread adoption of the Dante technology. And obviously, we're working with them, various brands within the RØDE Group to accelerate and deliver Dante technology in a wide range of road products. Chris Rollinson: Question just in relation to chips, cards and modules units shipped fell from 243,000 units in the second half of 2025 to 205,000 in the first half. Just a question around how much does that relate to inventory rundown versus structural shifts in embedded software. I think the answer to that is it's a combination of the two. So certainly, we are seeing that structural shift, which we've spoken about previously from chips, cards and modules into embedded software products. And that shift, we expect will continue over the course of the next couple of years for reasons explained. I think in terms of the inventory challenges that were faced previously, I think it's fair to say that we're through certainly the worst of those inventory challenges, and it's really about getting customers back to what's a normal run rate. We've actually... Aidan Williams: I might be even stronger than that. I would say they're very much in the rearview mirror. Chris Rollinson: And we've had very strong, just to reinforce that point from Aidan, very strong forward bookings in the first half of this financial year as well, which gives us some confidence around going into the second half and also seeing a bit of a better result in the chips, cards and modules revenue component of the business. A question from Jules just in relation to the OpEx guidance. A question just around expectation around capitalized intangibles for the full year. Roughly, it's going to be around $13 million to $14 million in capitalized expenses going in -- sorry, for the full year is the expectation. Would you want to take that one? Aidan Williams: Yes. So it's an anonymous attendee. Hello, anonymous. So the question is, how do you see the uptake of AES67 from manufacturers like Crestron in the professional market? How do you address the lost market share? So probably a few ways of answering that question. Crestron is one of the larger companies in the industry who behaves essentially as a walled garden manufacturer. So they really like to use networking technology and also standards as a way of them continuing to deliver all of the components in an audiovisual system. So in a way, because they have that business model, they're not naturally aligned with Dante's world view of maximum interoperability. So even if they are using AES67, you shouldn't take it to mean that their business model is fundamentally about maximum interoperability. So Audinate's business model is about maximum interoperability. I don't consider that we've actually lost a massive amount of market share to -- for Crestron anyway with AES67, far from it. They actually do use Dante as well. And I'd make the point that I think Audinate provides 2/3 of the AES67 implementations in the AV industry as a whole. So we're a big provider of AES67. And AES67 is really one slice or one -- it's the lower layers of the total technology stack that's needed for an interoperable audiovisual system. And there's a lot more pieces to the puzzle that mean that Dante provides quite a lot of value to manufacturers for small, medium, large solutions for things that can run on a single local network, they can span across the campus and they can connect across the Internet. So those things are not within the scope of AES67. It's an important standard. Don't get me wrong. I'm a networking person. I actually was involved in writing some of the standards in the IETF that ultimately become part of AES67. So we understand it well. We're a networking company. We implement AES67 as part of our solutions, and we're actually the largest provider of AES67 to the industry. Chris Rollinson: So a question from Jules is just in relation to the assumptions around the U.S. dollar that you're using to support the 20% OpEx target. Obviously, we've seen a lot of fluctuations and variability in the U.S. dollar to Aussie dollar exchange recently. We have a mixture in costs of both Aussie dollars and U.S. dollars across our business. The reduction in operating costs in the overall guidance is really driven by the cost actions that we've taken in the first half of this financial year around, as Aidan has said, that transition from a build phase of the investments to more running them on and commercializing those investments. So yes, in terms of the 20% operating cost target, that's really driven by the hard costs that have been driven out of this business, and we have a mixture of Aussie dollar and U.S. dollar costs in our business. A question from Andrew just in relation to Iris costs contributed $100,000 in revenue in the first half of '26. And you flagged continued investment in Iris in the second half of the year. What's the Iris run rate on costs? So overall, if you take contribution of Iris costs, they were around $800,000 to $900,000 for the first half of this year. We started with 10 employees with Iris. We expect to get closer to sort of 15 employees by the end of the year as we build out our go-to-market strategy. So all of the costs and revenues of Iris are then factored into that full year guidance and full year outlook. Are there any questions there, Aidan. Aidan Williams: No. Chris Rollinson: Question just around negative cash flow in the first half of the year and the likelihood of a capital raise. Look, we've got $70 million in cash. So the expectation is not at all to use our existing cost base -- sorry, our existing resources and facilities to fund the investment that we've made. Aidan Williams: Maybe I'll add a couple of comments to that. So I guess one of the -- so if I think back to the previous results roadshow, we were in the slightly awkward position of having made the investment in Iris and had completed some strategic hires. So we had actually onboarded some talent. And so we had a number of -- we essentially had a lot of the costs associated with some significant strategic moves, but we hadn't yet finished the -- or we hadn't worked our way through some of the cost management side of things. So I see the actions we've taken in the first half as really setting us up for having a reasonable -- a sustainable kind of cash burn rate going into FY '27 and beyond, something that's sustainable according to our balance sheet that enables us to continue to prudently invest and not burn -- shed loads cash as we do it. Chris Rollinson: Question from [ Tim Ladin ], which I think you've already answered, but maybe worth to reinforce just in relation to how we're thinking about the destocking from our top 20 OEMs. Are they back ordering? And secondly, just around U.S. market conditions. So just views on the current U.S. market conditions given some of the tariff uncertainties that we expected going into the first half of the year. Aidan Williams: Yes. So when we were -- like earlier in this half, absolutely, I think tariffs were very much on the radar. It's funny. It seems like the sort of general sort of news cycle commentary has sort of moved on from it. But it's still there in the background, I would say. So I think even though people are not talking about it in newspapers and stuff, it's still out there, and there's still uncertainty around tariffs. And there's a bunch of supply chain reorganization taking place. The reason why -- I think I just -- I kind of name checked it during the presentation because it isn't, I would say, a hot topic of conversation with manufacturers at the moment. I think there's overall just sort of general softness in the market. People are not harping on about tariffs too much. But I do think that it is just another one of those things that increases the cost of audiovisual equipment, which does tend to cause people to think about deferring expenditures. So it's certainly out there. And it isn't -- I don't think we're in a final state yet. Chris Rollinson: A follow-up question from Tim just in relation to video products and partners. So in FY '25, we had 122 products, 64 partners. Just thinking through how that has progressed in the first half of this financial year. So I think in terms of the product count for video increased to 148. I think overall, they contributed 10 design wins in the first half of the year. So we still are seeing progression and progress in the video side of the business. So a question just from design wins, 66 design wins. So just an understanding of breakdown of audio and video. So I think we had in terms of design -- 10 design wins from video. So still the majority of design wins coming from the audio side of the business. Aidan Williams: Yes. So we're just sort of trying to collate questions here. So is Iris and Dante Director -- can Iris and Dante Director be integrated and have a single platform that control audio and video devices from the same platform through the cloud? Yes. And how does that relate to video product traction for Audinate? Yes. So Iris has a video component to it. So there's a large -- there's a strong OEM component to the Iris story. So having Iris-enabled cameras actually puts video signals on the network in the same way that Dante AV does. It's definitely our plan to integrate Iris and Dante Director, for example, into a common platform. An analogy I would give you is there are quite a few software platforms that have various modules in them. So one example that people are familiar with, and I'm slightly cautious of using this example because of the whole SaaS [indiscernible] narrative that's out there. But a company like Salesforce, for example, has a product offering, which is essentially a platform consists of a CRM module, but there's also a sort of financial module. There's an e-commerce module. You can sell things through Salesforce. There's a support module, so you can provide customer support and interact with your customers that way. So there's a whole series of modules and functions that are part of that overall Salesforce platform. That's how I see Dante Director and Iris actually being integrated over time. There will be a series of modules that are part of that platform, the infrastructure platform that people use to deliver audiovisual projects. Some projects will need 2 or 3 of them. Some projects will need all of them, but that's how I see ultimately the platform being integrated together. One of the nice benefits of Iris being a very strongly cloud-first platform is that it does mean that there are some simplifications in terms of the integration of that with our offerings like Dante Director. Chris Rollinson: Question from Sinclair just in relation to you guys mentioned orders underpinning second half sales. Can you provide some color and visibility as we go into the second half of the year? So we had a very strong result in terms of forward orders in the first half of the year. So that certainly gives us some confidence and also visibility going into the second half of the year around how those orders translate into revenue. Overall, we've got somewhere between 3 to 4 months of visibility in terms of our sales pipeline. So that's in terms of that. [indiscernible] Iris integration. Aidan Williams: Yes, I think I just talked about that. So that was my slightly awkward sales force analogy. Chris Rollinson: You want to talk about third-party software tool? Aidan Williams: Yes, there's a question in -- there's actually loads of questions in here from an anonymous attendee, which I can't quite work out whether it's a real person or some automated thing. But you guys plan to open the platform for third parties to develop tools and software. Yes, we do. Like -- and in fact, that's possible today with things like Dante Director. There are APIs for Dante Director and Dante Domain Manager. So -- and obviously, we provide a wide range of APIs to our manufacturing partners and customers. So there's lots of opportunities in here. And as we execute our platform strategy, the idea is to build more APIs and enable both traditional software developers or users who are installing AV systems to integrate with APIs or as I was saying earlier in the presentation, make use of things like API -- sorry, AI tools that can call those APIs, read documentation, read specifications and requirements and then automate a lot of the current sort of grunt work in terms of programming and delivering audiovisual systems and their workflows. Anything else? I think... Chris Rollinson: You can answer on the [ RØDE ]. Aidan Williams: Okay. All right. Well, with that, I think we will draw this presentation to a close. Thank you very much for your time. I appreciate your support. I know it's been a challenging year or so, but I'm looking forward to the next couple of years, and I think we've made a number of significant strategic moves that will set Audinate up for sort of long-term performance. So thank you very much. And with that, I think we'll call it a wrap.
Operator: Welcome to the GPT Group 2025 Full Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Russell Proutt, CEO and Managing Director. Please go ahead. Russell Proutt: Good morning to everyone who has joined our 2025 full year results call this morning. Today, I'm joined on the call by the GPT executive team. I would like to start by acknowledging the traditional custodians on which our business operates. We pay our respects to elders past and present and honor our responsibility for country, culture and community in the places we create and how we do business. 2025 was another year of delivering results and strategic progress for GPT. Earnings guidance was upgraded twice during the year from the levels initially communicated at the start of 2025. And ultimately, we delivered $650.5 million of funds from operations or $0.34 per security. FFO was up 5.5% on reported 2024. And after adjusting the impact of trading profits, this growth rate was even higher at 6.9%. The quality of our Investment portfolio is reflected in the performance metrics. Like-for-like net property income growth of 6.3%, occupancy level of circa 98% and an average cap rate of about 5.76%. We also made significant progress in building our investment management platform, ending the year at about $40 billion of assets under management. This contributed to nearly 11% income growth in our management operations. Now turning to the GPT platform. As illustrated, our platform structure is consistent and growing. We have scale across 3 lines of the largest and most investable property sectors in Australia, being Retail, Office and Logistics. And we were active in 2025 across all these sectors and Investment formats. As we expected and conveyed previously, our near-term growth has been driven by expansion in our mandates and partnerships. And as in 2025, we expect to continue to grow with existing partners as well as through the introduction of new institutional investors to the platform. In terms of our strategy, there is no change. Firstly, we must be great at the asset level, serving our customers and supporting their success, which is why we directly manage nearly every asset across the platform. Our second pillar speaks to our focus on results and the effective utilization of capital, recognizing that this is critical to truly create enduring value. And complementing this is our breadth of capability that allows us to mobilize capital and invest opportunistically to take advantage of opportunities as they arise. And lastly, aligned partnering. This is the concept of ensuring that there is true and demonstrable alignment of interest with our partners. Look, while we always seek to refine and challenge our assumptions, we see these 4 elements in combination as being our formula for success. Now as far as putting strategy into action, on the next slide, we outline clear examples of how each of these pillars have together contributed to this great result in 2025. In the first column, we continue to build on existing foundations, more than 6% like-for-like Investment portfolio NPI growth with all sectors maintaining high occupancy and strong leasing spreads. This underpins the high quality and resilience of our earnings and cash flow. We demonstrated our ability to mobilize capital when opportunities arose, such as with the Grosvenor investment as well as investing in our Retail portfolio. We also raised capital for reinvestment and growth in our Logistics division and in our Retail fund. The value of platform breadth was evident in our ability to grow in our core sectors, whether that was taking on management of 5 shopping centers in 3 separate transactions or growing our Logistics portfolio through development. And finally, the value of partnership and truly aligned partnering was reflected across multiple investments as well as with the successful restructuring of our pooled funds. Going forward, you can expect us to continue to aggressively pursue value creation in this way. I will now hand over to our Chief Financial Officer, Merran Edwards. Merran Edwards: Thank you, Russell, and good morning, everyone. Starting with our segment financial performance. Our Retail investment properties delivered strong 5.1% like-for-like growth, driven by rent reviews and positive leasing spreads. Strategic divestments resulted in headline growth of 0.8%, while enabling capital redeployment to higher return opportunities. Our Office investment properties delivered robust like-for-like growth of 8.3%, driven by higher occupancy and rent reviews, plus one-off income resulting in headline growth of 11.9%. Our Logistics investment properties delivered strong like-for-like growth of 5.1% from positive leasing spreads and structured rent reviews. The headline performance result of a 7% decline reflects portfolio plant divestments with proceeds reinvested in our co-investment strategy. Co-investment net income increased 29.2%, primarily driven by the successful Perron partnership. Management operations earnings grew a solid 10.8% as new assets came under management throughout 2025. Finance costs of $219.7 million reflect an increase in debt levels as a result of strategic growth initiatives during the year and a higher weighted average cost of debt. Corporate costs also increased, reflecting the full year run rate of strategic investment in talent to support our growing platform. And income tax reduced versus 2024, reflecting lower one-off nondeductible tax items in 2025. Overall, this delivered $650.5 million in funds from operations, up 5.5% from 2024 or 6.9% when excluding trading profits. AFFO delivered is $494.4 million, up 5.2% with maintenance and leasing CapEx remaining elevated due to office leasing. Our expectation for 2026 is that CapEx will be approximately $170 million. Our statutory net profit after tax was $981 million, reflecting positive revaluation gains across the Investment portfolio. Turning now to our financial position, which remains strong and flexible. During the period, we strategically grew our co-investments by 67%, primarily through $1.4 billion invested in new partnerships. Other assets have reduced by 17.9%, primarily as a result of movement in derivatives. Other liabilities have increased 18.7% as a result of movement in derivatives and the deferred payment for Grosvenor. Borrowings have increased as a result of strategic transaction and development activity throughout the period. We continue to take a disciplined approach to capital management with net gearing of 31.1%, within our target range of 25% to 35% and with material headroom to our 50% covenant. We have $1.2 billion of liquidity with no unfunded capital commitments, and we continue to maintain our A2 Moody's and A- S&P ratings. We've been proactive in managing our debt position, extending facilities at approximately 10 basis points lower margins, increasing hedging to 72% of average drawn debt and capturing attractive October pricing to restructure hedges in line with market at the time. This disciplined approach has had the effect of reducing our forecast average cost of debt for 2026 to 5% from 5.3%. I will now pass to Mark Harrison for the investments update. Mark Harrison: Thank you, Merran, and good morning, everyone. 2025 was a year of execution and investment momentum for GPT. As shown on Slide 11, property valuations for our $16.1 billion Investment portfolio increased by $308.5 million or 2% for the 12 months to 31 December. This uplift was primarily driven by income returns with the portfolio weighted average capitalization rate and discount rate largely stable for the period at 5.76% and 7.04%, respectively. We continue to see prime quality assets outperform with divergences across asset quality and submarkets. Market dynamics for each of our core sectors remain positive with healthy leasing conditions evident in the Retail and Logistics markets. The Office market remains asset and market-based with a flight to quality persisting in both leasing and capital markets. Now turning to Slide 12. In 2025, we executed strongly on our stated objective to curate our existing portfolios and create new funds and partnerships, leveraging our research-led capital allocation. During the year, we completed $4.9 billion of gross transactions across our platform active across each of our core sectors. Partnerships with like-minded capital have been the cornerstone of our transactional activity, illustrating our disciplined approach to capital management. Highlights for the year included the acquisition of 50% partnership interest in Grosvenor Place in Sydney and the Perron Retail assets, the divestment of noncore fund assets to provide investor liquidity and the repositioning of balance sheet, pooled fund and mandate partner investments to optimize portfolio construction. On the following slide, we demonstrate our aligned partnering, driving value creation for our investors and partners. Our strategic holdings in GWSCF and GWOF provide an alignment of interest and a keen focus on performance. Active investor engagement throughout 2025 saw the group raise equity for GWSCF and restructure the liquidity regime for GWOF, both of which focus on optimizing investor outcomes. Both GWSCF and GWOF have now outperformed their MSCI benchmarks over a 1-, 3- and 5-year period. New wholesale partnerships created across the Office, Retail, Logistics and alternate sectors in 2025 demonstrate GPT's capability to execute partnerships across core, core plus and value-add return profiles. Our focus remains on positioning GPT as the leading diversified investment manager in Australia, delivering exceptional value, innovation and sustainable growth for our investors and capital partners. Turning to sustainability. Our commitment remains to deliver sustainable long-term value across our owned and managed assets. All our ESG activities are aligned with our strategy to optimize asset performance and enhance our competitive position in the assets we own and manage. I will now hand to Chris Barnett, our Head of Retail, for an update on our Retail business. Chris Barnett: Thank you, Mark, and good morning, everyone. 2025 has been an exceptional year for our Retail business. During the year, we increased our assets under management by $5 billion with the introduction of 5 new assets seamlessly integrated into our business over a 5-month period. Our Retail platform now comprises 18 shopping centers, totaling $16.6 billion of AUM. These centers, which are owned and/or managed by GPT have over 4,300 retailer partners, generating $12.6 billion in annual Retail sales and are enjoyed by over 240 million visitors a year. The quality of the GPT portfolio when measured on a market value per square meter basis is market-leading and one of the reasons why our platform consistently outperforms. Our Investment portfolio has delivered comparable income growth of 5.1% for the year, predominantly as a result of strong rental growth and being able to deliver our 12th consecutive quarter of positive leasing spreads. Our centers have continued to enjoy strong sales with total center sales growing 4.2% and total specialties up 5.3% for the year. Specialty sales growth has been driven by both discretionary and nondiscretionary spending with the on-trend categories of Leisure, Health and Beauty, all continuing to benefit from high customer demand. We continue to evolve our assets with a specific focus on driving specialty sales productivity. We partner with our retailers to understand their core customer segments, and we align their shoppers with the corresponding trade areas of our centers. This discipline continues to attract the most relevant retailers, allowing us to curate the most productive shopping center portfolio in the country. Our specialty sales continue to grow strongly, now achieving almost $13,800 per square meter. And even with the addition of the new assets to our portfolio, our leasing team have been able to deliver outstanding results, maintaining a total center occupancy at 99.8%. Continued sales growth, high center occupancy and strong retailer demand has delivered leasing spreads of approximately 5% on the 565 deals completed for the year. Now looking at the drivers of our Retail platform. And as we highlighted at the half, we were optimistic that our Retail business will continue to outperform for the remainder of the year, and our results have delivered on that outlook. We commenced our redevelopment of Rouse Hill Town Centre in the beginning of the year, and we are pleased with both the leasing momentum and the builders' progress, and we look forward to successfully launching that project later this year. I'm also pleased to announce today that we have Board approval to commence our exciting redevelopment of Melbourne Central. This iconic center in the heart of the Melbourne CBD is the most productive retail space in the country, and our redevelopment will further enhance the center strength by introducing a first-to-market international major tenant, which will anchor a best-in-class dining and entertainment precinct. We will commence this project in the upcoming months. Our outlook for the year ahead remains positive. The fundamentals of the retail economy are strong. High employment, real wage growth, strong sales growth, high levels of retailer profitability, delivering continued retailer demand in a market with limited new GLA maintains our optimism for 2026. Our assets are in great shape and the quality of our portfolio and operating platform is well positioned for further growth. I now hand you to Matt for the Office sector update. Matthew Brown: Thank you, Chris, and good morning, everyone. 2025 has been a year of transformation across the GPT Office platform with a refreshed leadership team and refined structure, driving operational excellence and setting us up well for future growth in a recovering market. This transformation is reflected in the result we have been able to achieve across the Office portfolio over the last 12 months. The GPT Office platform has grown to $17 billion in assets under management, driven by the strategic acquisition of Grosvenor Place in December 2025 and positive revaluations. The acquisition of Grosvenor Place demonstrates our ability to invest in Office segments where we have high conviction. Turning to Investment portfolio performance. The Office portfolio has delivered a strong result with a continued positive trend in key metrics driven by sustained market recovery and focused execution. The Office portfolio has achieved like-for-like net property income growth of 8.3%, the strongest result in 10 years and a 640 basis point improvement when compared to 2024. During the year, we secured approximately 136,000 square meters of new leasing, including heads of agreement across 137 transactions with early leasing success at Grosvenor Place securing 6,000 square meters of lease transactions post settlement. We believe that tenant rightsizing post COVID is now generally completed with approximately 75% of renewing tenants in our portfolio leasing either the same or more space in 2025. We have also witnessed an increase in active deal inquiry amongst larger tenants, particularly in the second half of last year. Leasing spreads remain healthy at 7.2%, with gross leasing incentives continuing to trend downward when compared to the previous year with comparable portfolio occupancy, excluding Grosvenor Place, increasing from 94.7% to 95.6%. Looking ahead to 2026, we will continue to build upon 2025's success, prioritizing the letup of strategic vacancies across the portfolio, prudently managing capital expenditure and delivering outperformance for our investors. Turning now to Office platform growth drivers. The Australian office market is now clearly in early recovery. It should be noted, however, that some office submarkets are performing at different levels than others, and we believe that structural headwinds will persist for secondary Office product. Tenant customers remain focused on high-quality, well-located buildings with strong amenity. Recentralization remains a key theme across markets. Positive net absorption and constrained supply driven by elevated economic rents will continue to place downward pressure on lease incentives and drive positive rental growth in coming years. As Office capital market activity continues to gain momentum, driven by improved physical market conditions and positive revaluation growth, we will prioritize the creation of new investment products to broaden our existing investor base and grow the platform. Grosvenor Place proves our ability to secure exciting investment product at scale. Active portfolio curation will continue to help drive our performance with the recent exchange of contracts at 750 Collins Street Melbourne, demonstrating our ability to deliver successful divestment outcomes. For GWOF, following the successful vote to defer the fund's liquidity event from July 2026 to July 2028, we will continue to work proactively with existing fund investors to provide liquidity solutions as required. I will now pass to Chris Davis to present the Logistics result. Chris Davis: Thank you, Matt, and good morning, everyone. We have delivered excellent results from our $4.9 billion Logistics platform with 69 investment assets complemented by a $3 billion development pipeline. Partnerships and mandates now stands at $1.4 billion, inclusive of our second Logistics strategy with QuadReal. We are targeting continued expansion in the investment management component of AUM as we grow through acquisitions and the creation of new investment products. We're activating the development pipeline with 4 facilities currently underway. Three of these are in Western Sydney with a lease already in place over part of this space. In Melbourne, the Asahi pre-lease at UniSuper's Deer Park Estate commenced in the second half. Our focus remains on creating a portfolio weighted to growth corridors that attracts the highest levels of tenant demand, driving rents and superior returns. The portfolio is over 95% weighted to the Eastern states with nearly half located in the sought-after Sydney market. Our team has delivered outstanding leasing outcomes with high portfolio occupancy and an active management approach, achieving comparable income growth of 5.1%. Leasing deals totaling 188,000 square meters were agreed in 2025. Over 60% of this was renewals, which has substantially reduced our near-term expiry. Strong rent outcomes were achieved with face leasing spreads of 28%, led by Sydney and Melbourne at 34%. Leasing velocity has continued through the start of the year with an additional 50,000 square meters of terms agreed, bringing 2026 expiry down to 4.5% and 2027 to 10.4%. This progress demonstrates our proactive approach to customer engagement. We are seeing building momentum in leasing markets with inquiry increasing by 1/3 over the past 6 months, now sitting at over 3 million square meters nationally. Turning to growth drivers. Australian logistics ranks as one of the tightest markets globally and is favored by investors on the strength of its fundamentals. Looking ahead, we expect to see supply that is aligned with demand with vacancy rates to stabilize and start to contract. Structural tailwinds of population growth and rising e-commerce remain. Within the Investment portfolio, delivery of comparable income growth through leasing and high occupancy will be the priority. We will capitalize on our $3 billion pipeline with over $400 million of developments underway. We have a stable of shovel-ready projects and are engaging with tenants who are attracted to the delivery certainty these projects offer with DAs in place. Further growth will come through expansion of the investment management platform and creation of new products with aligned investors. I'll now hand back to Russell for his closing remarks. Russell Proutt: Thank you, Chris. Looking forward, we are excited and optimistic about the opportunities in front of us. We will be an active investor with the clear objective to deliver exceptional value to all stakeholders. In doing so, we will continue to set ambitious goals combined with disciplined execution. Barring unforeseen circumstances, in 2026, we expect to deliver FFO growth of approximately 4% or $0.354 per security. Now excluding trading profits, this represents growth of 5.7% above 2025 earnings. We also expect distributions in 2026 to be $0.245 per security or a 2.1% increase over 2025. Thank you for your time today. I will now hand over to the operator for questions. Operator: [Operator Instructions] Our first question today comes from Solomon Zhang from UBS. Solomon Zhang: Maybe first question for Matt. You previously had disclosed the actual or rent paying occupancy, which is sitting at 88.6%. Could we perhaps just get an update on where that sits today? And maybe just work through some of the 2026 expiries and how much have been derisked confirmed renewing and how much is expiring? Matthew Brown: Yes. Thank you for the question. As we stated, occupancy, including heads is 93.2%. If you exclude Grosvenor, it's 95.6%. We've actually now aligned our occupancy disclosures with industry peers to ensure consistency and comparability. So as a result, we've actually stopped disclosing that actual rent paying occupancy metric. But just a couple of points. Just given the nature of office leasing and that lag between signing leases and leases become rent paying, you're always generally going to see a lag between the 2 data points. That gap generally is around 300 to 400 basis points. And generally, we're tracking within that range. Solomon Zhang: Just in terms of your... Matthew Brown: We've made some good inroads in relation to those 2026 expiries. There are a number of conversations that we had late last year, which is now being opportunities that we're looking to convert within the first quarter of this year. As you know, no single expiry in '26 is really more than kind of 1.5% of total rent roll, but we are making good inroads. And hopefully, we'll be able to give some positive announcements over the course of the first quarter, as I mentioned. Solomon Zhang: And maybe sticking with the Office theme. Just from Grosvenor, I understand that the vacancy is around 30%, but could you provide any color as to the lease expiry and how much has been derisked for 2026 specifically? Matthew Brown: Yes. So we've made some good inroads on the leasing front post settlement in December. So the nature of deals that we've seen there, it's been a mix of existing tenants renewing and taking more space and actually new tenants leasing vacancy. So we've got roughly 20,000 meters of active inquiry running at the moment for that asset. We're tracking underwrite in those deals that we are signing, and we're hoping just given the positive market momentum that we're seeing that we'll continue to chop into that vacancy over the course of calendar year '26. Solomon Zhang: Great. And maybe just a final question for Merran. So you called out $8 billion of refinance debt. Could you just confirm what margins you're achieving on the new debt? And I guess, how much you saved versus the old debt? And maybe your spot debt margins across the entire platform as of December '25? Merran Edwards: Look, of the $8 billion, about $1.5 billion of that is actually at the group level. And what we've achieved there for line and margin is on average, we're getting around 115 basis points. What was your next question, Solomon? Solomon Zhang: Yes. So across maybe your balance sheet debt, where would your average margin be versus your 115 that you're getting on incrementally? Merran Edwards: Line and margin across the group debt is about 160 basis points. Operator: Our next question today comes from James Druce from CLSA. James Druce: Just on -- first question is probably just around the equity raise in Retail. I think you're looking at $500 million in August. Just how that went and just some color on that, please? Russell Proutt: Yes. Look, we highlighted that just under $300 million has been raised a combination of clearing secondaries as well as primary. They're still in the process of raising capital. We expect that to continue through the half. Remember, we just only restructured the fund at the very end of 2024 and started marketing into '25. So it's ongoing, and we're pretty positive on the pipeline that we've developed. James Druce: Okay. And can we just get some broad sort of drivers for '26, just in terms of like-for-like growth from the different divisions, what the cost of debt is doing? Just a bit of color on the makeup of the guidance, please. Russell Proutt: Yes. So why don't we just go macro across all 3, probably north of 5% like-for-like growth across the business on investment properties and our co-investments. And from a debt perspective, remember, about 72% hedged. And I think in the appendix, we -- for 2026, we're about 3.2% base rate. So a pretty predictable cost of debt for the year. And then really, it's about the transition to the management operations, how we can grow that during the year, year-on-year. But the guidance we gave was a reflection really of that underlying 5% growth and continuation of management operations around current levels, given that the restructuring at GWOF will have a minus $5 million to $6 million revenue hit. James Druce: Okay. And just one more, if I may, just on the payout ratio. So the DPS growth is slightly below where FFO growth is coming through this year. How do you sort of think about that going forward? Russell Proutt: Yes. Look, the range is 95% to 105% of free cash flow, and it's free cash flow based. And so the 2% growth seemed like the right number for this year as we have CapEx coming through on all divisions for maintenance and leasing, but also bringing Grosvenor on as well. We want to make sure we're conservative around that. So despite the very strong earnings growth, we thought distribution growth of 2% was appropriate and well managed within free cash flow. Operator: Our next question today comes from Simon Chan from Morgan Stanley. Simon Chan: I've got 2 questions today. One is focused on development, the other is focused on fundraising, perhaps development one first. Both in both your Retail and Logistics presentation today, you focused a lot on development. I was just wondering if you could give us a bit more color. I mean in industrial, we've been hearing that the market is probably not as easy or lucrative as 2 or 3 years ago. So just trying to get a feel for the sort of development return you're expecting there, the incentives you're handing out there. And likewise, in Retail, just after a little bit more color on Melbourne Central, please. Russell Proutt: Yes. Sure, Simon. It's Russ. What I'll do is I'll hand this over to Chris Barnett first and then Chris Davis for Logistics. Chris Barnett: Thanks, Russ. I'm always very happy to talk about Melbourne Central and really excited at the opportunity to announce the commencement of the project because I think we all know that Melbourne Central is the most productive shopping center in the country today, and that's actually no main feat because it doesn't have an Apple store and it isn't anchored by [Audio Gap]. We entertain the 55 million people a year that enjoy that asset. And as a consequence of that, we're able to kick off the development there. We're adding around about 7,500 square meters of new building. It will be on the rooftop of the existing Lonsdale building, where we'll add a Level 3 and a Level 4. And when we finish the development, it will be anchored by a first-to-market major tenant and a best-in-class dining precinct. And the other thing I think we should acknowledge here is that it is also anchored by the newly refurbed HOYTS Cinema which is really the only cinema in the country today that's got both luxury cinemas at D-Box, which is the 4-dimensional cinema mega screen that has the shaking seats. It has an IMAX and it also will have by the end of March, an Apex cinema, which is Australia's largest LED screen. So we think all the things that are great about Melbourne Central will continue with its development. The development is about $170 million, and we should be completed by mid-'28. Chris Davis: Yes. So in terms of the market, so I mean, the starting point in terms of vacancy of 3% is low. And as I mentioned in my presentation, we've seen a pickup of inquiry. And then when we look at the supply side, it's actually going to be a little bit lower than historic averages this year, circa 10% across the East Coast. So overall, the market is well positioned. We have seen normalization of incentives sort of -- in that sort of early 20s sort of range. And then our projects, we are well positioned. So we've got a lower historic land base in terms of cost, DAs in place. And as you've seen, we've started 4 new projects in the second half. And our returns are sitting in that sort of 6% to 6.5% range yield on cost. And obviously, that just depends on the particular submarket. Simon Chan: Great. That's very clear. Just my second and final question. Russ, you started this presentation today by flagging this year, you're expecting to grow with existing partners and new [ instos ] coming on to the platform. I would think that you actually have a pretty good idea as to where your ideas and propositions could be most responsive with partners, right? Perhaps could you give us some insights as to where you think some of your ideas are going to be most effective or taken up by [ insto ] partners? Or which one of your ideas are going to be leased taken up by [ insto ] partners? Russell Proutt: I don't really stratify my ideas that way, Simon, but at least the most. But it's absolutely essential, obviously, we service and serve our existing partners. And you've seen that opportunities come from doing so, whether that's adding Macquarie Centre in ACRT, adding Grosvenor in our CSC relationship or establishing a new one with Perron. So obviously, the relationship, the investment capability and the partnership is critical. As far as where the next stage goes, I would expect growth across multiple platforms, existing ones in the business, but also, look, you saw us start a new value-add partnership at the end of December, relatively modest first investment. We think that is an opportunity to grow. And there are a series of new investors that we're talking to about opportunities across all 3 sectors. So there's active dialogue in Office, in Logistics and in Retail. But where they hit and where they land, it really depends on the opportunity and whether we can reach agreement on terms and whether it makes sense for both organizations. And as you know, there's a long list of deals I think everybody has or hasn't done, but only those that get done get disclosed. So I would expect us to be active in all 3 sectors this year. So it's a very long way to say I'm not going to go into detail on any one particular opportunity. But like I said, I think we're very well positioned in 2026 to execute. Operator: Our next question today comes from Adam Calvetti from Bank of America. Adam Calvetti: I mean what's the assumed lease-up for Grosvenor in 2026? Russell Proutt: Yes. We're assuming a let-up period of between 12 and 30 months post settlement. That's how we've looked at it in our acquisition underwrite. As I mentioned earlier, we've made some good inroads in relation to early leasing post settlement. So we've got leasing either in heads or signed of around 6,000 meters with active inquiry of around 20,000 meters at the moment. Adam Calvetti: Okay. That's pretty clear. And then on the wider developments, where the precommitment levels sitting at? Russell Proutt: Well, right now, we don't have anything in Office that's underway. So speaking to Logistics and Retail. Retail really depends like on Rouse Hill. Maybe Chris, you can speak to Rouse Hill, Melbourne Central where we're at with respect to... Chris Barnett: Happy to. Adam, the -- at Rouse, as I said, we commenced the development there at the beginning of the year, and we are actually looking in really good shape from both a building perspective as well as leasing momentum. I think we've actually only got a handful of deals to complete there. And at Melbourne Central, the anchor tenant is obviously the most important thing, which we're just in the process of finalizing AFLs, but we'd look to have 30% to 40% pre-commit before we commence that development. Adam Calvetti: Okay. Great. Maybe just on the industrial side. Russell Proutt: Yes. So we have 4 buildings that are underway. They start in the second half of '25. So one of those is leased to Asahi in Melbourne, which is UniSuper's project. We've got 3 specs in Sydney, which are small buildings. One of those we leased last week and the remaining 2 will finish in the second half of this year. We've got good inquiry on those. Adam Calvetti: Okay. How is that lease that you've just done last week compared to underwrite or maybe where you assumed? Russell Proutt: It was slightly ahead. Adam Calvetti: Right. And last one for me. I mean, Yiribana Logistics Estate West has been delayed 6 months. What's the rationale or reasoning behind that? Russell Proutt: So that's a really good project for us. We've got the first 2 buildings finishing sort of mid this year, as I mentioned, and the final building will be next year. So there has been just general delays in the market generally because of authorities, but we're now well and truly on track. Operator: Our next question today comes from Andrew Dodds from Jefferies. Andrew Dodds: I'd just be interested following the announcement of the GWOF modernization last year, just how much of that upfront 25% liquidity window has been utilized so far? Russell Proutt: We had submissions in December, and so we'll be looking to satisfy that 25% over the course of the next 24 months. We have 750 Collins obviously already under contract, which should settle in April, and that will go a long way to partially satisfying that. But the 25% is the focus right now. Andrew Dodds: Okay. So is it safe to assume that the whole 25% gets hit? Russell Proutt: Yes, yes, absolutely. And that's what we expected. Andrew Dodds: Okay. Great. And then just on Grosvenor, sorry, are you able to talk to how much sort of capital you're assuming or you're expecting to spend in order to get it back up to sort of decent shape sort of quoting the 30% vacancy figure, which was asked about before? Russell Proutt: Yes. As you noted, the real opportunity here is to stabilize occupancy post settlement in improving markets. So when we look at our assumptions for year 1 CapEx, the assumption is around $30 million to $35 million. If you look at the split between maintenance and leasing CapEx, it's roughly a 70-30 split between leasing CapEx and maintenance CapEx. And as I mentioned earlier, we've made some good inroads in relation to the early leasing of vacant space within the building. Operator: Our next question today comes from David Pobucky from Macquarie. David Pobucky: Just the first question on the management operations results, really strong result and a large step-up in the second half versus the first half, I think about 18%. So if you wouldn't mind just talking to some of the moving parts in that half-on-half step-up, please? Russell Proutt: Sure. A lot of that movement came from the bringing on of the 5 shopping centers for the whole year. And obviously, they'll be fully operational in the second half. So a lot of that shift was there. And then also just general momentum in the business and the other growth. But it's really those Macquarie, Cockburn, Belmont, Sunshine, MacArthur coming on board for the full period. David Pobucky: And just a second one on MC and TI. Thanks for providing guidance for FY '26 in terms of that stepping up a bit. Have you seen -- or have we moved past the peak year in Office incentives, noting your incentives have reduced modestly? And when can we expect that to really start coming through in your earnings? Merran Edwards: I can take that, if you like. I think '26 will be the peak year from an Office perspective. What we can now see is there's been a nice shift with fit-out versus rent abatements, and we're seeing the rent abatements being predominantly the amount of the lease incentives now with that going to about 65%. So you should see '26 as the last peak year for Office. Operator: Our next question today comes from Daniel Lees from Jarden. Daniel Lees: Just in relation to FY '26 guidance, is there any skew that we should be assuming in that number, first half, second half? Merran Edwards: No. Look, it's expected to be quite even throughout the year. At this stage, we don't expect any skew first half, second half. Though I would note we typically always have a skew in CapEx to the second half, and that's just our average year. Daniel Lees: Great. And just one more for me. It looks like on the hedging front, FY '27 has dropped a little bit, but you've disclosed FY '28 for the first time. Is that new hedging or a bit of a blended extend? Or can you talk us through what's going on there? Merran Edwards: It's a combination of a few things. There's definitely new hedging. We were quite proactive with our hedge book in the second half of last year. We put a lot of new hedges on, which increased our hedge rate. We did do some blend and extends, both obviously done at no cost, and we did some restructures towards the end of the year as well, which increased our hedge rate. Our average hedge rate is 72%. We sit at 78% today, and it tapers off throughout the year and then the average for the next year is 55%. Operator: Our next question today comes from Liam Schofield from Morgans. Liam Schofield: Just on the balance sheet, can you just talk about interest rate sensitivity? Like obviously, you've outlined gearing, just the prospect of higher rates, how does that impact you guys going forward and your capacity to maintain distributions and fund developments? Merran Edwards: Liam, it's Merran. We have, as you can see, quite a high hedge rate. So we do have a little bit of risk with interest rate rises. We assume that there are no further interest rate rises in our '26 guidance. If there was an interest rate rise in August, for example, that would have a small impact of about $2 million. And in '27, you can see the same thing. We've assumed the cash rate. Liam Schofield: One final one. Just on Grosvenor... Russell Proutt: There's no unfunded liabilities in the business. Liam Schofield: Perfect. And just the final one there, just on Grosvenor, obviously, early days. What's the plan for like partial divestment of that type of asset? Is it going to be just held on balance sheet for the foreseeable future? Or should we think about some potential divestment? Mark Harrison: Yes, it's Mark. I think -- thanks, Liam. It's Mark. I would say, given the active inquiry that we have from a leasing front, we're working through that in the immediate term, but you can absolutely assume at the right time, we would look to bring capital partners into that investment opportunity. Operator: Our next question today comes from Adam West from JPMorgan. Adam West: I guess my first question today is just on the Office cap rate. Obviously, it's compressed 6 basis points, but I'm just wondering what assets were driving that? And if the 10-year was to hold at its current levels, do you expect cap rates to sort of stabilize? Or would you expect some expansion in the next year or 2? Mark Harrison: Yes. Thanks, Adam. It's Mark again. What we saw was, as Matt outlined in his presentation, we just saw differential behavior by assets and submarkets. So we saw higher quality assets like Grosvenor and 2 Park Street firm and secondary and noncore assets slightly softened. So I think overall, you can expect cap rates to remain stable from here based on what we're seeing in transactional activity, with a firming bias for better quality assets and potentially a softening bias for secondary and tertiary assets. Adam West: Yes. No, that's clear. And I guess just in terms of the leasing spreads in the Office portfolio, what assets were driving, I guess, the higher spreads? And then following on from that, where does the under-renting sit relative to FY '26 expiries? Mark Harrison: Thank you for your question. So on leasing spreads, it was actually relatively spread across the portfolio. If I look at it on a state base, really on a gross base basis, Brisbane and Sydney really led the charge. But interestingly, Melbourne also posted a relatively positive result at around 5.1%. Adam West: Yes. No, that's clear. I guess just final one for me. Just on the Retail trading performance, do you have any color you can provide, I guess, slower growth in quarter 4? Chris Barnett: Adam, when you say slower growth, our total centers still achieved 4% growth for the quarter. You can see that really we had an acceleration of performance in the second and third quarters, but the fourth quarter actually mirrored the first. And as I said, we're very happy that the total center sales growth for the period ended at 4.2%. Operator: Our next question today comes from Richard Jones from JPMorgan. [Audio Gap] We will try and reach out to Richard to see what's going on there. Our next question today comes from Peter Davidson from Pendal Group. Peter Davidson: Just a question for Chris Barnett. It's a pretty strong Retail results [indiscernible]. Chris, can you just tell me about Melbourne Central [indiscernible] Monopoly Dreams? How has that triggered in your results [indiscernible] with that because I think they [indiscernible] bankruptcy? Can you just walk through what's happening there? Chris Barnett: Peter, thanks for your question. Without wanting to speak about specific tenants, it is public that Monopoly Dreams went into administration at the beginning of the year. As a percentage of total GLA, it's reasonably insignificant contribution to the group or certainly to the center. What I'm happy to say is that we've been able to re-lease that tenancy with a flagship international retailer. And we would look to ensure that we have those tenants replaced and trading by the second half of this year. And the replacement has been accretive to both valuation and cash for '26. Peter Davidson: And what happens to the bank or the rent receivable, Chris, how do you treat that in the accounts? Chris Barnett: Peter, I'm sorry, I didn't hear that. Peter Davidson: How would you treat the... Chris Barnett: The total loss of cash will be covered by bank guarantees that the tenant had in place. And as I said, the new deals that we've replaced with are accretive and won't have any impact to '26. Operator: Our next question comes from Yingqi Tan from Morningstar. Yingqi Tan: I dropped off for 5 minutes before, so I hope my questions have already been covered. So my first question is on office leasing. I noticed that your lease term has averaged about 6.5 years in the past 12 months. And I noticed that it has generally slowly increased for the past 2, 3 years. Just wondered if you can talk about if you're observing this -- is this a general trend that the leasing terms have ticked up in the past 2, 3 years and whether there's anything changed structurally for the last 12 months or so? Mark Harrison: Thank you for the question. In relation to leasing terms, what we've seen at least over the course of the last 12 months is larger tenants now coming to market to either take more space or renew space. Generally, post-COVID, they have a lot more look through in relation to their forward space planning. And on that basis, they're looking to generally take longer lease terms. You still have those smaller tenants sub to 1,000 meters that generally take shorter lease terms than those longer tenants. So definitely a trend that we have witnessed over the course of at least the last 12 months. Yingqi Tan: And in regards to that 7.2% leasing spreads in your Office deals, just could you talk to what are the drivers to that 7.2%. Mark Harrison: Yes. So it's really a combination of increases and improvements in face rents achieved on relet and also a reduction in the incentive that's offered as part of that relet. They're really the key drivers. Operator: Our next question today comes from Howard Penny from Citi. Howard Penny: Just 2 questions on below the line. So I see income tax expense has reduced a lot. Could you just take us through what you've done and initiatives you put in place to get that down a little bit? And then the second question, just looking forward, we've seen across the sector some refinancing at better margins. Can we expect that to come through in GPT next year, perhaps? Merran Edwards: Howard, it's Merran. I can take both of those. First question in regard to income tax expense. There is a reduction from 2024 to 2025. In 2024, the FFO tax rate was about 36%, and that was driven -- so it was higher last year, and that was driven as a result of some one-off tax -- nondeductible tax items. In 2025, we have an effective rate for FFO of 30%. And in 2026, we expect that to continue. So you can expect a 30% effective rate for FFO again. In regard to -- what was your other question, refinancings? Howard Penny: Yes, refinancing margins. Merran Edwards: Yes. Okay. So what we have done is across our debt book, we've looked at our loans and whether or not we can refi and extend those loans. And as a result, we ended up with, on average, the ones that we have completed about a 10 basis points reduction in the line and margin fees, which you will see flow into '26, and you'll see our cost of debt for 2026. The weighted average cost of debt is expected to be 5%. Howard Penny: And maybe just a second question back on funds under management. Your conversations with both domestic and offshore investors, are any of them raising the fact that we're in a high interest rate environment or at least rising interest rate environment, that's becoming a deterrent? Or are they still very attracted to the fundamentals of your portfolio in Australia? Mark Harrison: Yes, Howard, it's Mark. I'll take that. I'd say in our recent discussions following some interest rate volatility, there's still really strong interest for capital from reallocation to real estate out of other sectors, primarily being driven by strong income fundamentals and like-for-like income growth. So given where we're seeing asset values at a discount to replacement cost, it still seems to be positive equity tailwinds for us. Operator: Thank you very much. There are no further questions at this time. I will now hand back to Mr. Proutt for closing remarks. Russell Proutt: Thank you again for everybody for being on the call this morning, and thank you for your questions. And I'll hand it back to the operator now. Operator: Thank you very much. That concludes today's event. You may now log out. That concludes today's meeting. You may now disconnect.
Michael Fuge: [Foreign Language] Hello and welcome to Contact's Interim Results presentation for FY '26. We're going to start by reflecting on highlights from the first half and we'll take you through the financial results. We'll then move onto a separate presentation on the $525 million equity raise announced this morning. And then we'll open for question and answers when both presentations have been made. We won't stop at the end of the results section. Turn to Page 4. First half of FY '26 was transformational for Contact. We completed the Manawa acquisition on the 11th of July 2025, welcoming the Manawa staff and assets to the fold. Integration has since progressed very well and we've secured more than 80% of the announced cost synergies in the first 6 months of ownership, that is on a run rate basis. Manawa hydro and renewable PPAs increased our renewable generation in the first half by 1.3 terawatt hours. And we generated 0.2 terawatt hours through our new Te Huka 3 geothermal power station. What that meant is that generation was 97% renewable in the first half '26, up from 89% in first half 2025. EBITDAF was also up 24% to $500 million as a result of the Manawa acquisition and our renewable investments. Profit was up 44% and the Board declared a dividend of $0.16 per share, consistent with our indication of $0.40 per share total dividend for FY '26. We continue to deliver for our customers. We started supplying electricity to New Zealand Steel's new electric arc furnace in December last year. We've also secured the all of government gas contract and are now supplying 2 petajoules of gas to support critical infrastructure and community assets throughout New Zealand. We continue to support our retail customers through innovative products like the time of use Good Plans, with more than 150,000 customers now choosing discounted or free off-peak power. Moving to Page 5 on to the market. We've seen significant hydro inflows across New Zealand in the first half with inflows at 128% of mean leading to lower spot prices for electricity. As a result, generation was more than 90% renewable across the market and hydro storage lakes filled up, with national storage ending the period at 128% of mean. Hydro storage together with gas storage at AGS being nearly full, and the Genesis stockpile replenished, has put the market in a very good position going into winter 2026 with reducing fueling risk. Gas scarcity remains a key issue with production down 16% in the first quarter of the financial year compared to the same period a year before. We're seeing an uptick in demand coming through. Demand was up 4% in first half '26, or 1% when normalized for the dry response of NZ Aluminium Smelters, which was activated in the dry conditions of first half 2025 if you remember. Lines costs stepped up significantly from the 1st of April 2025. As this is a pass-through cost to customers, this has created upward pressure on overall electricity tariffs across the market. On project execution, our renewable build program is tracking well. Contact has 1.1 terawatt hours of renewable generation and 100 megawatts of battery capacity currently under construction. Construction is complete on the Glenbrook-Ohurua battery and transfer and system integration is nearing completion as commissioning continues. Commissioning actually began in early February and we expect the battery online around about the end of March. At Te Mihi Stage 2, site construction by the EPC contractor is progressing to schedule with cooling towers on site and supporting civils complete. Kowhai Park, which is being built through our JV with Lightsource bp, over 50% of solar panels have been installed. We expect to have the solar farm online around the end of June. Putting this together with our recently completed geothermal builds, Tauhara and Te Huka 3, we have maintained a continuous build program since 2021. This has led to a continuity of our major project expertise, key staff, suppliers, contractors, setting us up well as we continue with our renewable build plans on the Contact31 strategy. Looking ahead, we have better clarity across the key market risks, giving us confidence to invest in line with our strategy. With New Zealand Aluminium Smelters now on a long-term contract which includes demand response, and the HFO now in place, the market is in a much better place to manage a dry year risk and support security of supply through the energy transition. We saw a measured response from the government alongside the release of the Frontier report in October. The review found that the current market design and the rules are working well to facilitate market entry and investment in generation. The industry commissioned an extensive report themselves on the sector from BCG which was published in November. It shows that we are developing renewable generation at the fastest rate in New Zealand history, and that the market challenges we are seeing are largely due to the rapid decline in the gas market. We expect to see resolution on further key market topics this year including the all of government energy procurement, LNG infrastructure and RMA reform, which there have already been announcements on. As always, the electricity sector is likely to be a focus in an election year. This is not new. However, we expect at least the mainstream parties to draw from the government led review and the BCG report to understand industry challenges and the investment required now and going forward. And with that, I'll hand over to Matt to take you through the results. Matthew Forbes: Thanks Mike. Kia ora, my name is Matt Forbes and I'm pleased to present Contact's 1 half '26 financial results. This half was defined by delivery. Good financial performance, the successful integration of Manawa Energy and continued progress across our renewable development program. This result reflects the deliberate choices we have made to reposition the business for larger scale, improved earnings quality, and lower risk, leaving us well placed for the next phase of growth under our Contact31 strategy. Before turning to the detail, I'll step through 3 key themes from the first half. The first key theme was the acquisition of Manawa. The $2 billion acquisition completed on the 11th of July 2025 and has already contributed as expected. Adding capability and scale, improving earnings quality and materially reducing portfolio risk from day 1. On an annualized basis, Manawa adds 1.9 terawatt hours of low cost, long life hydro generation and exposure to contracted renewable supply PPAs. This structurally reduces our exposure to Clutha hydro volatility, the gas market uncertainty that we faced, and aging thermal assets. Importantly, Manawa increases our expected earnings while reducing the level of overall risk. And underpinned by the early delivery of the cost synergies, with the majority already secured within the first 6 months. The second theme for the results is our sales discipline. The long-term PPAs with major counterparties were fully emplaced. The new supply to New Zealand Steel commenced and we benefited from the fixed price Mercury contract acquired with Manawa. These long-dated inflation protected arrangements now underpin a meaningful proportion of forecast generation. They improve our earnings visibility and cash flow confidence while continuing to invest in new renewable capacity. And so our approach to strategy channel management remains really deliberate. We prioritizing channels for stability and generation shape, while retaining some market exposure to ASX or market linked pricing. The third theme in the results is our operational delivery. Te Huka 3 was online in the period and has consistently generated above its business case. Planned statutory outages including at Tauhara were well managed and we strengthened our gas position, contracting an additional 7 petajoules annually from Greymouth on top of the gas from OMV. Together these actions support customers, underpin system reliability and reduce Contact's dry year risk. Turning now to financial performance. EBITDAF for 1 half '26 was $500 million, an increase of $96 million on the prior period, driven primarily by the portfolio scale from the new geothermal generation and the Manawa acquisition. Partially offset by a normalization of pricing, which reflects the unusually stressed conditions in 1 half '25. Renewable generation volumes increased by 1.5 terawatt hours contributing $123 million to EBITDAF versus 1 half '25. And this reflects the structural increase in geothermal output with Te Huka 3 online and the inclusion of Manawa, rather than any short-term market or hydrology effects. Pricing was a headwind. Long-term contracted channels reduced EBITDAF by $13 million, while market linked pricing reduced EBITDAF by $37 million. Importantly, this reflects the proportion of volumes in long-dated PPA channels and the normalization from elevated 1 half '25 pricing in market linked channels. Other income increased by $42 million driven by higher retail gas margins, Manawa income streams, insurance proceeds and the absence of the Methanex gas loss recorded last year. Fixed operating costs increased by $68 million, primarily reflecting the inclusion of the Manawa operating cost base and time-bound transaction and integration costs. Turning briefly to net profit, NPAT increased by $63 million driven primarily by the increase in EBITDAF. Depreciation and interest increased as expected following the Manawa acquisition, and the fair value movements were positive versus the prior period. These are noncash and do not affect underlying cash earnings. Looking at our segment performance, this highlights the impact of the Manawa acquisition and the strength of our wholesale business alongside impressively disciplined retail execution. Wholesale EBITDAF increased by $110 million to $577 million, driven by higher renewable generation volumes and the inclusion of Manawa. As mentioned, these benefits were partially offset by lower achieved prices, reflecting the normalization of market conditions. The retail business EBITDAF was a loss of $25 million consistent with the prior period. This is despite $79 million of network and energy cost inflation during the first half. Approximately 90% of these higher costs were recovered, reflecting the disciplined pricing and strong margin management. This is not only critical to supporting our financial performance, but underpins our confidence to fund such a large renewable growth program. Corporate costs increased by $15 million, largely reflecting the Manawa transaction and integration costs, higher incentive costs associated with Contact's outperformance, and targeted spend to support the development of Contact31. Starting with the wholesale business, renewable generation accounted for 97% of total output in the half, reflecting both the new geothermal capacity and the step change in portfolio mix following Manawa. Thermal generation declined to 178 gigawatt hours, which is the lowest level on record and reflected the increase in renewable generation. This is the portfolio we've deliberately been building towards. With the addition of the long-dated fixed price PPAs acquired through Manawa, average generation costs were higher in the period, but they also enabled us to contract a significant larger portion of fixed volume. And as I mentioned, these fixed volumes support earnings certainty and reduces exposure to market volatility. And you would have seen the benefit of that during the national inflows over the last 5 months, which have seen very low wholesale prices. Stepping back, since the launch of the Contact26 strategy in FY '21, renewable generation has increased from 81% to an expected 98% in a mean hydrological year. This is a structural transition that materially improves our portfolio resilience, asset quality and earnings quality. Looking at our wholesale contracted revenue, this reflects the theme around strategically shifting towards longer dated fixed price channels. Strategic fixed price sales increased by 1.7 terawatt hours in the half. This was driven by the acquisition of Manawa's long-term supply agreement with Mercury, a full period of the Tauhara linked PPAs, higher NZAS volumes and a new contract with New Zealand Steel. Pricing outcomes were as expected. Long-dated contracted prices now reflect structurally higher wholesale price levels, while short-term CFD pricing moderated as contracts rolled into a more normalized near-term market environment. Other wholesale income increased, reflecting non-electricity generation income from Manawa's hydro assets and the absence of prior period losses associated with the Methanex gas arrangements. Moving on to trading outcomes, our performance was solid and reflects our better positioned portfolio. Total merchant generation volumes were broadly flat as we were able to hedge up the Manawa merchant volumes in the period. The improvement in location losses reflects increased North Island generation following the Manawa acquisition and additional geothermal capacity which is closer to load. And in Q2, when very low prices saw us run shorter times, it was economically more attractive to purchase from the market than generate from our own assets. This resulted in very low LWAP to GWAP spreads and improved financial outcomes overall. Turning to the performance of our retail business. Performance in the first half reflects the strong cost recovery and disciplined execution in the face of significant input cost inflation. Retail margins were under pressure, and as noted earlier, the increases in network and transmission costs added $79 million during the first half. Despite this, strong pricing actions limited the EBITDAF impact, resulting in a loss of $25 million which was consistent with the prior period. And this outcome reflects a careful balance. One, supporting customers through a challenging economic environment. Two, maintaining the financial sustainability of our retail business. And three, continuing to have the confidence to continue to invest in renewable generation. Within retail, gas gross margins improved from $7 million to $15 million supported by higher sales volumes enabled by the additional supply from Greymouth. Our telco business continues to perform with connections up 16% and gross margin increasing to $8 million, while cost to serve remained well controlled. You see the multi-product offerings continuing to support our customer growth and our retention across the retail portfolio. Moving on to other operating costs. The increase in the half largely reflects the acquisition of Manawa rather than underlying cost pressures. Operating costs increased by $60 million, primarily reflecting the Manawa operating cost base along with transaction and integration costs. General inflation contributed around $5 million, with operating cost headwinds above this driven by higher insurance, labor costs, enhanced employee benefits and the relentless march of council rates. Importantly, we're already delivering on the expected Manawa synergies. We achieved a $7 million in-period reduction in operating costs during the half, with 80% of the synergy target achieved on a run rate basis after the first 6 months. Under the Contact31 strategy productivity remains a core focus. In total we're targeting $38 million of operating cost savings by FY '27. That is $28 million from the Manawa synergies, which includes $13 million we expect to deliver in year within FY '26, and an additional $10 million from broader productivity initiatives in FY '27. Maintaining cost discipline across the rest of the business is essential to ensure that these productivity benefits translate fully into earnings. Looking at cash flow which strengthened materially in the half. Operating free cash flow was up to $249 million, an increase of $111 million on the prior period, driven by higher EBITDAF and working capital outcomes. Partly offset by higher interest costs following the Manawa acquisition. Working capital was still a $68 million outflow in the first half and this reflects the timing of payments associated with the newly signed HFO fuel supply arrangements and our geothermal spares procurement. These movements are timing related and not reflective of underlying performance. Stay in business CapEx was $59 million in the half, but with FY '26 guidance of between $170 million and $185 million we expect a heavier second half spend. Operating free cash flow conversion was 50%, in line with guidance. For the next 2 slides I'll stay focused on the 1 half '26 performance and execution run through, with the investment decisions we've taken today and the strategic funding plan to be addressed later in the presentation. Starting with growth capital expenditure, we see strong activity across our Te Mihi 2, JV to deliver solar at Kowhai Park, and the completion of our first battery at Glenbrook. Overall projects are tracking as expected with guidance for FY '26 growth Capex of $500 to $510 million. Again, pointing to a significant acceleration in the second half of this financial year. Turning to the balance sheet, net debt has increased as expected, reflecting both renewable investment and the Manawa acquisition. During the period we issued a new $500 million Euro EMTN note, further diversifying our funding sources and extending our debt maturity profiles. Pro forma net debt EBITDA was 2.8x at 31 December, supported by expected earnings equity credits from our hybrid bonds, and remains well within target ranges. Dividends for 1 half '26 is set at $0.16 per share, consistent with the prior year and in line with our dividend policy. For FY '26 we continue to target a full year dividend of $0.40 per share which represents a 3% increase on FY '25, with the interim dividend representing 40% of the full year target. The increase in absolute dividends reflects the number of shares on issue following the Manawa acquisition. Looking ahead, our FY '26 expected reported EBITDAF is now $965 million which is an increase of $15 million on our expected reported EBITDAF we announced in August, reflecting the first half outperformance. There have been no change to second half assumptions which use mean hydro expectations and the guidance upgrade is driven entirely by delivered performance in the first half. This consistency reflects the quality of the portfolio we're now running. One that is more resilient, more predictable and better positioned to fund the next phase of renewable growth. With that, we'll conclude the presentation of the results and I'll hand back to Mike to lead on the equity raise. Michael Fuge: Thank you Matt. Hello again. Look, before we get into the presentation, we have to acknowledge that due to legal restrictions we are unable to discuss any details around the equity raise other than the basic terms referred to in the announcement and investor presentation released on the NZX and ASX today this morning. During this presentation we'll provide an overview of the equity raise, the use of proceeds, financial impacts and basic offer details before opening up the call to Q&A. So we're pleased to announce today that Contact is launching a $525 million equity raising to accelerate the Contact31 strategy. As New Zealand's most diversified generator with the largest national development -- renewable development pipeline, we are well positioned to capture the large and growing New Zealand energy market opportunity. Our Contact31 strategy is focused on leading New Zealand's renewable energy future and delivering the highest value outcomes for our investors and New Zealand. The equity raise will advance the execution of potential upsizing of renewable energy projects which would accelerate the Contact 31 strategy. The capital raised will be used to commence the pre-FID drilling on Tauhara 2 to advance steam field development and explore upsizing the target capacity from 50 megawatts to 60 to 70 megawatts. It will be used to fund our investments in the Glenbrook battery 2.0 and Glorit solar development projects. The proceeds are also expected to enhance our ability to bring forward development pipeline opportunities which were in line with the Contact31 capital allocation framework. The equity raise is expected to reduce the first half 2026 S&P net debt to EBITDAF ratio from 2.8x to 2.3x, enhancing our ability to accelerate further development opportunities from the broad opportunity set now in front of us. The raise is structured as a fully underwritten placement of $450 million and a non-underwritten retail offer of up to $75 million, with the ability to accept oversubscriptions at Contact's discretion. Our portfolio is well positioned in the New Zealand market. Diversified across geothermal, hydro, wind PPAs, thermal and emerging solar and battery capacity. We have the largest renewable development pipeline in New Zealand, giving us strong development optionality to meet growing demand. We are the leader in geothermal energy, operating seven geothermal stations producing around 5 terawatt hours per annum, around 50% of New Zealand's annual geothermal generation. In addition, we have continued to build out our self, our competitors strength in battery development through securing prime locations near growing customer bases, investing in in-house development capabilities and leveraging our complementary generation portfolio mix. This combination, a diversified portfolio, deep development optionality, and a strong track record of delivery underpins our ability to capture the growing market opportunity. New Zealand's national energy transition is in flight and electricity demand is expected to grow by 3 to 5 five terawatt hours by 2030, driven by electrification across data centers, dairy, transport and industry. Increasing renewable penetration is also creating greater intraday volatility, lifting the value of flexible firming solutions such as batteries and stored hydro. Customer behaviors are also evolving. Large C&I users are seeking price certainty and residential electrification is shifting load patterns. With enhanced clarity on market fundamentals including the New Zealand Aluminium Smelter operations and winter energy security, the environment now supports long-term investment with confidence. In this sense our Contact31 strategy was developed to play to Contact's strengths and lead New Zealand's renewable energy future. We're committed to extend our advantage New Zealand's geothermal leader, lead on new flexibility in New Zealand, build into new demand with wind and solar, and lead the energy transition at home. In that context, today's capital raising will advance the execution and potential upsizing of renewable energy projects which will -- would accelerate the Contact31 strategy. Matt. Matthew Forbes: Thanks Mike. Now over to the use of proceeds. Proceeds from this equity raise will be invested to advance the execution and potential upsizing of renewable energy projects and will continue to invest in line with the Contact31 capital allocation framework. The combination of geothermal, batteries and solar investments positions us to deliver flexible, low-cost supply as demand continues to grow. The capital raised is expected to be invested across 3 pillars. Pillar 1. We're investing $30 million to start pre-FID drilling on Tauhara 2 to advance steamfield development and to explore options to upsize the project from 50 megawatts to 60 to 70 megawatts. Updated reservoir modeling has indicated that a plant of between 50 to 70 megawatts can be supported, compared to the original 50 megawatt plant we identified at our Investor Day. The drilling program will help confirm these modeling estimates. This investment aligns with the Contact31 strategic commitment to extend our advantage as New Zealand's geothermal leader. In pillar 2, today we have approved investment in the Glenbrook battery 2.0 and the Glorit solar projects. We expect to invest $235 million in the Glenbrook battery on balance sheet and around $45 million to fund Contact's share of the off-balance sheet Glorit solar project. Once complete, the Glenbrook battery project will increase our battery capacity to 300 megawatts, strengthening our ability to manage market volatility, shift renewable output into higher value periods, and lead on our strategic commitment to lead on flexibility in New Zealand. The Glorit project secures 230 gigawatt hours per annum of contracted output under PPA to Contact while retaining the capital efficiency and adhering to the Contact strategy of building new demand with wind and solar. The remaining proceeds are expected to enhance our ability to bring forward development pipeline opportunities under pillar 3. We believe that we have great optionality across our development pipeline and believe that having a greater ability to bring these accretive developments sooner if market conditions and project economics are supportive will strengthen our competitive position and support an acceleration of the Contact31 strategy. The following slides provide additional information on each of these pillars. Geothermal generation provides an attractive, long life, base load, reliable renewable generation and is an anchor to intermittent renewable growth. Geothermal energy development and operations is a cornerstone of Contact's operational capabilities and key to our competitive strength. We are New Zealand's largest geothermal producer and have a strong track record of identifying, securing, constructing and operating geothermal opportunities. As part of the Contact31 strategy, we've outlined our targets to have an additional 250 megawatts of geothermal capacity either operational or under construction or at FID by 2031. The updated Tauhara 2 reservoir modeling has indicated that a plant of 50 to 70 megawatts can be supported, versus the additional the 50 megawatts identified and disclosed to the market at our Investor Day. That additional 20 megawatts equates to 165 gigawatt hours per annum of output, or around $18 million of potential incremental EBITDA in FY '31 based on our long run wholesale price expectations and the indicative costs to build. This outcome would increase the expected project cost by $130 million to $150 million based on our assumed costs of $6.5 million to $7.5 million per megawatt. The $30 million drilling program that we have committed to today is expected to help confirm modeling estimates, help us to better determine the optimal capacity and plant configuration prior to final investment decision in FY '27. Our target returns for geothermal investment remain in line with the Contact31 capital allocation framework of between 10% and 12%. Batteries will play a crucial role in the New Zealand energy system by providing important flexibility to accommodate thermal generation displacement and retirement, intermittent renewable growth and rising peak demand. As renewable penetration continues to increase, intraday volatility will grow. Batteries provide the firming and capacity required to maintain reliability of the system and to optimize value for Contact. Over time, the sources of value that we will get from a battery will evolve. Early returns are expected to come from reserves and arbitrage, but longer-term benefits include portfolio shaping, hedging flexibility and integration with our base load geothermal. Novel battery developments for projects are created equally. Attractive battery developments are driven by a small number of factors: site proximity to load, strong grid connectivity, having experienced development partners and efficient deployment sequencing. All areas where Contact has proven development capacity. And the Glenbrook battery 2.0 has a number of these attractive attributes. It's strategically located close to the Auckland demand centers and transmission and increases the value from stored energy, enhancing GWAP capture and reduces Contact's reliance on thermal peaking. The project has not been exposed to the recent spike in lithium prices with the lithium price fixed in December 2025. We've also been able to leverage our development experience from the first battery at Glenbrook with a replicated technology, design and contracting approach, supporting our cost and confidence in delivery. These attributes combined with the strong interest from the third party offtakers are expected to support project returns in line with our capital allocation framework. The Glenbrook battery 2.0 lifts our total battery capacity to 300 megawatts and is expected to cost $235 million, with a fully ramped EBITDAF of around $35 million to $40 million per annum. The Contact Board is also approved investment in the Glorit solar project, subject to final funding arrangements. The project was granted consent following an appeal to the process in 2025 and the solar farm is expected to provide around 285 gigawatt hours of upper North Island generation close to load, supporting grid stability and improving Contact's GWAP. We have committed to a 15-year PPA arrangement for 80% of the generation from this project. The project's off balance sheet JV structure reduces the upfront capital requirement while preserving access to the important renewable output with a long-term PPA. The project is expected to cost $305 million, with our equity contribution estimated to be around $45 million, and achieve Contact IR in excess of our 12% target return. Michael Fuge: Moving on to this slide on demand. Look, Contact31, we modeled 3 New Zealand electricity market demand scenarios to support the development of the strategy. The strategy and the development targets within the Contact31 assumes a disorderly decarbonization scenario, which is represented by the red line second from the bottom on the chart on the left-hand side. Any additional proceeds from the equity raise are expected to enhance our ability to bring forward development projects in our development pipeline if a more aggressive New Zealand electricity market demand scenario eventuates. We have a broad set of attractive development opportunities in front of us, beyond what is included in the Contact31 development targets. Maintaining large and diversified pipeline helps drive development efficiently and improves our ability to respond dynamically to market signals. Matthew Forbes: Onto the financial impacts from the raise. We built a balance sheet which is diversified by funding source and tenor to support financing flexibility with an attractive cost of capital. The equity raise is expected to enhance development acceleration flexibility through increase in investment capacity, with the equity raise expected to reduce 1 Half '26 S&P net debt to EBITDAF ratio from 2.8x to 2.3x. Leverage is expected to remain in our target 2.6x to 2.8x over the medium-term in line with our capital allocation framework. Our FY '31 targets remain in place, with the potential upside from the upsizing of Tauhara 2 and the acceleration of future growth opportunities drawing nearer. Onto some details of the offer. The $525 million equity raise comprises of $450 million fully underwritten placement and a non-underwritten retail offer of $75 million. The structure has been chosen to provide almost all existing shareholders the opportunity to subscribe for at least their pro rata portion on a best efforts basis. New shares under the placement will be issued at $8.75 per share, reflecting a 7.2% discount to the dividend adjusted last close, and a 7.9% discount to the ex-dividend adjusted 5-day VWAP. The retail offer allows eligible shareholders to apply for up to NZD 100,000 for New Zealand eligible shareholders or AUD 41,000 for those in Australia that are eligible. The retail offer will be set at the lower of the placement price and a 2.5% discount to the 5-day VWAP up to and including the last day of the retail offer period, with additional information on the retail offer will be made available once the retail offer opens on the 19th of February. Onto the time table. The new shares issued under the placement is expected to commence trading on the Friday 20th of February. And as mentioned, the retail offer opens on the 19th of February and due to close on Friday the 6th of March. With trading of new shares on both the NZX and the ASX expected to be Monday the 16th of March. As outlined in the NZX release, the Board has exercised its discretion to adjust the DRP strike price to be the lower of the DRP strike price calculated as per the usual DRP methodology, which is the 2% discount, and the retail offer price. The DRP strike price will be announced on 12th of March 2026 and allotment of new shares is expected to occur on the 25th of March 2026. Okay. Michael Fuge: Look, New Zealand's ITR's is energy transition continues to create a compelling market opportunity with demand increasing in the market requiring new renewable generation and firming capacity. Contact's context is well positioned as New Zealand's most diversified generator, supported by the largest renewable development pipeline in the country. This equity raise of $525 million is expected to advance the execution and potential upsizing of renewable energy projects, which accelerate the Contact31 strategy. These investments support meaningful renewable generation growth, expanding our flexibilities and storage and positions us to deliver customer-focused solutions as demand evolves. We anticipate making further announcements with respect to the equity raising in accordance with our NZX and ASX continuous reporting obligations in due course. We will communicate directly with investors with respect to their eligibility to participate in the equity fund raising. We really do appreciate your engagement today, and we welcome any questions. Thank you. Shelley Hollingsworth: We'll now open to questions, starting with questions from the room and then moving to those online. [Operator Instructions] I'll open to questions from Andrew Harvey-Green for Forsyth Barr. Andrew Harvey-Green: And I guess quite exciting with the equity raise, and I think that all makes sense. I guess my first question though is at the Investor Day there was a fairly strong impression that you were trying to get through this period without raising equity. Can you just sort of talk through what's changed in your thinking from late November through to today? Michael Fuge: Okay. So there's a number of things there. One, the upsizing in Tauhara 2; we were talking 50 megawatts, we're now talking 60 megawatts to 70 megawatts, which in and of itself is $130 to $150 million of additional capital. Glorit and the battery have both happened faster than we anticipated. And for instance the battery, we're locking in a very sharp lithium price with Tesla. And the deal with Forest & Bird was a welcome development just before Christmas. Sort of things seemed to happen just before Christmas. But I think more broadly, the point around -- we premised Contact 31 on the red line. And there is a reasonable potential for the black line to eventuate. And if I take you back to our last equity raising in 2021 when we raised funds for Tauhara, because we went with the equity raise, we were able to fund Te Huka 3 without a blink. And I think that ability to respond to changing market dynamics and conditions is absolutely critical going forward. Matthew Forbes: Yes, Andrew, we absolutely could have delivered the Contact31 strategy on balance sheet. We were very clear around our expected project costs and the sources and uses of that funding. That's effectively a base case. We're thinking about an expected case of outcomes, and raising this equity now gives us the ability to meet higher-than-trend outcomes, and that's why we believe it's a good opportunity for shareholders now. Andrew Harvey-Green: And I guess kind of linked to all of that, I think at Slide 27 sort of outlines your list of projects. And I think there's 6 that you're looking at potentially getting to FID in FY '27, which feels quite ambitious. I was toting that up to be around about a $1 billion of capital assuming all the wind and solar is done off-balance sheet circa 800 megawatts of capacity plus the battery on top of that. I mean realistically, how much of that do you think you might be able to get away? And sort of -- can you sort of talk to, I guess, the size of that opportunity relative to the market? Michael Fuge: So I think there's just stepping back. The latest suite of projects Glorit, Kowhai Park solar farm, we've been able to link to the Fonterra conversion of Fonterra. And it's fair to say that Southland Wind, the wind projects, will have that same linkage back to another discernable event on the demand side. So the geothermal, we've built the execution muscle. They are first-class baseload projects. And the trick there is to maintain that muscle and to continue to exercise with a good healthy cadence in the running through the execution. Batteries, we'll wait and see. Andrew Harvey-Green: Okay. Next couple of questions I have, I guess, is linked to the most recent development in the market which is the LNG announcement from last week. I mean TCC is now being decommissioned. My interpretation, I guess, is that looks like we need some more gas plant capacity to be -- if a sort -- I guess to achieve the government's goals of generating 1.5 terawatt hours over 3 months. Is that consistent with your views? And then maybe talk to a little bit around the Ahuroa storage opportunity as well. Michael Fuge: Okay. So there -- again, let's unpack those questions. I think the question of additional gas-fired capacity, yes, we'll still have our peakers, obviously we have the diesel at Whirinaki. There is also potential opportunity with behind-the-meter gas turbines still in a variety of industrial facilities in New Zealand. Whether we need more after that is another question, mindful that you've got Todd and the Genesis assets as well. AGS is going to be critical to the gas supply market whether it's indigenous gas or LNG, because of its ability to store gas over summer and take gas at volume to be discharged back to the market. So obviously it will play a critical role going forward with or without LNG. Andrew Harvey-Green: And last question from me is just around the guidance upgrade, this is for you Matt. So of the $15 million, how much would you describe as structural from the first half versus just one-off related to favorable operating conditions? Matthew Forbes: No, no, that's all structural. Our hydro generation, even though national conditions were very oversupplied, was actually down year-on-year. So it reflects our geothermal capacity and the acquisition of the Manawa assets. Obviously, we're seeing really good price recovery in the retail channel, which is probably tracking slightly better than we expected. So that gives us the confidence to retain our guidance for the second half of the year, noting that market conditions are very volatile out there. Andrew Harvey-Green: Okay. So -- but if it's all structural on the first half and you haven't changed second half assumptions, doesn't that imply we've got some structural follow-through coming through in the second half? Matthew Forbes: Well, I mean structural is known structural elements as opposed to sort of outperformance elements. These things are always - we're always looking at the mean hydrological conditions coming into the period. We don't guide on short-term changes to hydrology or short-term changes to storage. But we come well prepared into this calendar year with fuel and storage. Shelley Hollingsworth: We'll open to questions online starting with Vignesh Nair from UBS. Vignesh Nair: Congrats on the strong results. Couple of questions first, again following from Andrew on the gen-dev pipeline. One thing I noticed was you've pushed Argyle from earliest FID FY '26 to earliest FID FY '27. Can you get a bit more color on this to begin with? Is it because the cost of smaller scale farms are just getting too high? Sort of what's driving that? Matthew Forbes: Yes. So as you'll recall we had some snafus, to use Mike's term, around the Glorit solar farm and an appeal to the consent that we achieved there. So we reprioritized the pipeline to advance Argyle up the agenda. With Glorit being a larger scale project with better returns, we have prioritized that project now that we've come free of that consenting snafu. And therefore, it was just a time and resources and attention question as opposed to an economic question, Vignesh. Vignesh Nair: Okay. Very clear. Batteries next. You mentioned the sharp lithium price, Mike. Prices have moved a fair bit in the last couple of months. Is this project confirmed today should that be read as trough battery CapEx per megawatt? Michael Fuge: That would require me to speculate on the lithium price. It is significantly lower than our first battery and other batteries being built in the New Zealand market currently. Since then prices have spiked. So there could be a period where it represents a very sharp price. But that's not to say that lithium prices come down again. So never say never. And I think more broadly we -- our teams are continually challenging the costs of the associated works, the transformer switchgear, the civils. And so yes, I would not want to speculate on that. It is a sharp price, we're very proud of it. But the team will continue to work hard to control costs going forward. Vignesh Nair: Okay. Just last question on the gen-dev section. On Tauhara Stage 2, obviously the increase to 70 potentially megawatts, does that impact the opportunity set for Stage 3? Just keen to get more color on the size of the field. Michael Fuge: No look, Stage 2 is about using up a fair chunk of the remaining resource consent. Stage 3 will be about -- if there is upside potential in the field, we'll need additional resource consent for the offtake. It will be about any neighboring resources as well. So we don't see it as impacting Stage 3. It's just taking the opportunity of what is available to us now given the favorable reservoir reaction. Vignesh Nair: Okay, that's understood. Sort of last question just on the broader market. You know Transpower last week talked to 700 megawatts of capacity scheduled to be out of the grid in the first half of this calendar year. Yourself and your peers are still ramping up development. Are you able to talk about I suppose the confidence on demand growth not until FY 2030 but perhaps in the next 2 to 3 years? Michael Fuge: So yes, well FY '30 is only 1 year out from the next 2 to three 3 so. Look, take the 3 to 5 terawatt hours which we set out in the pack as being pretty firm. But there are obviously other opportunities with further potential conversions, potential new industries, potential -- yes, there are a range of opportunities which would start to move you up towards that black curve. Matthew Forbes: Vignesh, we've been very clear, the pillar of the strategy around wind and solar is connected to demand from customers. And the Glorit solar farm that we've invested, the Kowhai Park solar farm, that is just there to meet new demand from Fonterra coming to market. So we were getting the projects prepared to be able to meet the demand from customers. This is a demand-led strategy. Shelley Hollingsworth: We'll now take questions from Grant Swanepoel at Jarden. Grant Swanepoel: First question, have you raised enough capital that we can now create the expectation that by FY '28 you can move towards that mid-payout ratio of your 4-year trading dividend? Matthew Forbes: Grant, the primary purpose for the capital raise is effectively to be able to meet the market conditions that we see ahead of us. We see them as highly conducive. We see lots of customers looking to move off of gas onto electricity. And therefore, it's around being prepared for above expectations around the Contact31 pipeline of projects. Yes, as you mentioned when we outlined our pathway to funding those development projects on balance sheet we did have some retained earnings through that funding mix. And therefore, sort of, as demand evolves, as the projects become clearer, we'll have a clearer view as to where in that dividend payout ratio we can expect. But because of the way the projects that are coming to us are above our target returns, we want to continue to develop those projects to get better long-term outcomes for shareholders rather than just short-term dividends. Grant Swanepoel: Well, can I just follow-up on that, how your Board is thinking. Why would they only raise $525 million if they still think that an 80% to 100% payout ratio is reasonable as a dividend policy and not raise enough to make sure you're into the mid part of that payout ratio? Matthew Forbes: I mean the dividend payout ratio is a function of earnings and cash flow delivered through the prior periods and therefore is relatively mechanical. There's been no discussion at the Board level about where the most appropriate target within that range is. But you know it will be set at that specific time. Grant Swanepoel: Next question just on your battery growth. So you got 500 megawatts by 2031, 300 megawatts in the near-term, and you're pointing to, as is the market, to about 900 megawatts in the market by 2030. Does your modeling on batteries give you confidence that $35 million is a type of return you can make on this 200 megawatt investment? But does that presuppose that your competitors aren't going to push now to just cover their own portfolios and get past that 900 megawatts? And do you see that fall off quite quickly once you move past 900 megawatts by 2030? Michael Fuge: I think there's a number of dynamics in there Grant. 900 megawatts was the BCG number that was put out. But remember if we end up with more demand and more intermittent wind and solar being built, then obviously as you go up towards the black curve you're going to need more batteries. And so that dynamic will continue to play out. So we do see first-mover advantage, all experience overseas is there's a significant first-mover advantage. So we're moving as quickly as we can. I can't speculate on what our competitors will be thinking. But I think the thing to hold in your mind is that there could be upside to that if that higher demand scenario comes off. Matthew Forbes: And Grant our, sort of, fundamental belief is that over the medium-term batteries will be required in the market as more intermittent renewables come online. And those batteries will have to get a return, and we believe participants will act rationally with that expectation. Now because we've got what we believe is a very low-cost battery in the context of the market and a very strong site, we think that will be protected under a number of market scenarios. But batteries are quite a useful tool in the toolkit. The sources of value from them can change through the cycles, from reserves and frequency keeping in the early stages to more arbitrage as we phase out thermal generation. And then later on, in a battery's life, it's going to be able to bring in more intermittent renewables. So from a market perspective we think this is the right asset and the portfolio benefits that we get from it are just cream on top. Grant Swanepoel: Fantastic. It's really good to see that Contact has now continued this continuous performance and we don't get the old Contact of always finding some little fault somewhere along the line. Congratulations. Shelley Hollingsworth: We'll take questions from Josh Dale at Craigs Investment Partners. Joshua Dale: Just first 2 questions relate to the balance sheet. I think I know the answer to this but in light of wanting to accelerate development time lines, does raising capital change your thinking at all around maybe taking wind and solar developments on balance sheet even if only initially to get projects underway? Michael Fuge: We've been delighted with -- it's not just the off-balance sheet, the capacity and capability that Lightsource bp have brought to this country and to us has been fantastic. Their supply chain management, their contractor management has been fantastic. When we go out looking for a wind partner, we're looking for something similar. Yes, we want to take the finance off balance sheet, but we're also looking for something special. We're looking for the capacity and capability to go faster, build at lower cost, make these projects more economic for all Kiwis. So it's not just about -- in short, wind will be off balance sheet initially. Joshua Dale: And at your Investor Day given your balance sheet constraints at the time, you looked at -- you talked to looking at hybrids for equity credit. I assume that's off the table now but will still sit as an option? Matthew Forbes: No, no, hybrids are still a good source of funding. Obviously we have 2 hybrids currently issued which provides us with $475 million of total balance of which we get a 50% equity credit. Throughout the refinancing of these options, you can upsize those so you can get marginally more equity credits. As we mentioned during the Investor Day, having capacity to use those types of instruments in an unexpected downside is also valuable and useful, so potentially not as much needs to be pulled on those. But having levers across the DRP, hybrids and retained earnings, we see as very valuable because we're not trying to do less here, we're trying to do more. So the baseline is the baseline so we don't expect any less equity required. Joshua Dale: And last question. Would the development of an LNG terminal raise the prospect of decommissioning for Whirinaki at all? Or do you have any thoughts on the future of Whirinaki in light of LNG? Michael Fuge: No, we're very happy with Whirinaki, it serves its purpose for us in terms of a diversified portfolio both in terms of location and fuel. The LNG terminal is more about NZ Inc ensuring the resilience and security of supply for New Zealand. We have the Huntly HFO, we have the demand flex from major industries like New Zealand Aluminium Smelters. We would like to get increased operating ranges on hydros and LNG plays into that mix. I don't see it -- the problem with retiring something like Whirinaki is you take a string away and particularly for periods of stress that's not an appropriate action. Shelley Hollingsworth: We'll take questions now from Stephen Hudson at Macquarie. Stephen Hudson: Congratulations on the result. Most of my questions have been posed, but just on the pillar 3 sort of bucket and the demand sources there, Matt, you sort of alluded to gas to electricity migrations as being the key source of demand there. I would have thought metals might be a little bit more prospective in the near-term. I just wondered if you can comment on that one. Michael Fuge: The decline -- the conversion of gas to electricity is a key driver. Metals, obviously, there's the EAS starting up in New Zealand Steel. The smelter -- aluminum prices do appear very strong, but it would be speculation if we put a marker in the ground on that, what we are -- what we do see are the facts in front of us. And so those sources of new demand, I think we've encapsulated quite well. Matthew Forbes: Yes, Stephen, it's all the usual suspects that we'll be looking at to bring these projects forward really. Stephen Hudson: Fair enough. And just on I suppose, a longer-term horizon, just remind me, Matt, the trigger point at which the credit rating agencies would sort of force you to move any off-balance sheet PPA offtake on balance sheet. From memory, it was sort of 20% of your total generation might be a trigger point to on balance sheet. Matthew Forbes: Yes. So I don't have a specific trigger, but it does come down to sort of a few of the elements around how important the contracts are to you and your willingness to keep those as sort of off-balance sheet vehicles if they run into trouble. But we're very far away from that at the moment, Stephen. So nothing to change our strategy around the development of the solar wind projects. Stephen Hudson: Would 20% be a decent sort of threshold to keep in mind? Matthew Forbes: Yes. It seems reasonable. Stephen Hudson: Yes, okay. useful. Last one I'll sneak in just on LNG. Government would have us believe that the sort of the triangular form of the trilemma no longer exists and they can win on all 3 fronts with LNG. I guess some cynics in the market might sort of think that an improvement in sustainability and security of supply might come at the cost of higher price. Where would you be in this debate? Michael Fuge: I think LNG is a security play. We don't see it materially altering our expectations of price and the modeling because both the Huntly HFO, the strategic coal reserve and, let's say, the smelter demand flex are priced roughly at what landed LNG would probably be dispatched. So we don't see it as a price conversation. We see it as a security conversation. Stephen Hudson: But if you were to have a conversation about price, would you be closer to $200 coal HFO or $300 LNG number? Michael Fuge: Well, in that case, you would dispatch the coal first. I think the whole idea of LNG, it's not we're going to undercut coal and never dispatch coal. It will be something happened in the market, a very dry year, a major asset failure, we need 1.5 -- 1.2, 1.5 terawatt hours of energy for this winter and you would bring it in or the gas market has declined faster than expected and you can't fill. So it's one of those other stress factors. Yes, it's probably the best way. Matthew Forbes: Yes, you have to continue to follow the market signals that are being set for the right generation types to be built. And I think with the combination of all of those sort of backup generation, we'll be able to confidently continue to build into renewables. Shelley Hollingsworth: No more questions from online. Matthew Forbes: Would you like to close, Mike? Michael Fuge: Okay. Right. With that, I'll just make some concluding remarks. Thank you, everyone, for coming online today. That is appreciated. I will note that obviously, the conversations will continue with the announcements today, but it is a proud day for Contact Energy in terms of the FIDs which announced. It's a proud day for Contact Energy in terms of the transformation, which has been delivered in terms of the Manawa acquisition and the delivery of the synergy benefits. And it's a proud day for Contact Energy in terms of the confidence that we're expressing in the equity and our confidence in the New Zealand market and go forward and the investment opportunities which are emerging. Thank you again.