Standing by, welcome to the Boral Limited FY23 results call. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key, followed by 1 on your telephone keypad. I would now like to hand the conference over to Mr. Vik Bansal, CEO and Managing Director. Please go ahead. Thank you, operator, and good morning, ladies and gentlemen. Vik Bansal here. Thanks for joining the call today. I'm joined by Belinda Shaw, our CFO, who will co-present with me, and Luke Thrum, our Head of Investor Relations. I'm pleased to be presenting Boral's FY 2023 results today as its ninth CEO in a history spanning 77 years. Before running through the presentation, I will encourage participants to refer to our ASX release annual report with 40 financial statements, which was also released this morning. I will also take disclaimer on slide two of this pack as read. If I can ask you to please move to slide three. We will aim to work through the presentation as quickly as we can to allow time for as many questions as possible. In terms of the agenda, I'll run through our business, first part of the performance overview, and then Belinda will cover CapEx, cash flow, and balance sheet. I'll follow with our network strategy and property update. Belinda will conclude the presentation with our priorities and outlook before opening the line for questions. Moving on to slide 5. Allow me to reintroduce Boral. We are the largest integrated construction material company in Australia, with a rich legacy and importantly, a significant social contribution. Our operational reach spans 360 sites across each state and territory, employing approximately 7,500 employees and contractors. The business proudly serves almost 14,000 customers and works with close to 8,500 suppliers. We move approximately 50 million tons of product and pave circa 4,000 km of road every year. Rarely a day goes by that you won't pass one of our sites or 3,500 vehicles, or enter a building, use a road, bridge, tunnel, footpath, or other piece of critical infrastructure that our people and products are responsible for. Moving on to slide 6. Boral's vertically integrated network of upstream and downstream operations provide competitive advantage. Upstream cement and quarries are difficult to replicate. These are large investments that take many years to secure, develop and optimize, and hence provide barriers to entry. Midstream is our recycling operations. With customers asking for more and more repurposed material, this business unit offers an opportunity for Boral, in addition to supplementing our quarry life. Downstream is our concrete batching operations and concrete placement network, which delivers high-performing product closest to the customer's requirement. Here, customer proximity is a leverage and vast footprint is a strength. Our actual business as part of vertical integration with bitumen JV and quarries is growing and remains a preferred partner on major infrastructure projects. The degree of integration is demonstrated with 50% of upstream volumes being supplied to downstream operations, which account for their 90% of materials sourced. Moving on to slide 7, industry value drivers. This slide identifies the key industry value drivers: Boral's strategic alignment, Boral's strategy alignment, and our opportunity for business and earnings growth. Value drivers include building integrated networks, both upstream and downstreams. Driving customer loyalty through relationships and service delivers better value outcomes. Ensuring key operational and logistics capabilities are critical to optimize assets, life, and helps reducing cost per unit. This, in turn, helps with value capture, leading to operating leverage. ESG credentials provide license to operate while meeting the needs of all our stakeholders, for example, regulators and communities we operate in. Boral's PEMAF strategy has strong alignment with these value drivers. From an opportunity perspective, we see upside in all areas, which is what we are trying to execute. Moving on to performance overview on slide 9. Safety is the highest priority at Boral. Our TRIFR performance improved by 47% compared to FY 2022 and significantly reversed the trend of recent years. More importantly, more important than the safety stats is the 83 fewer people were injured at Boral in FY 2023 compared to FY 2022. Several key safety initiatives have driven this outcome, including the simplification of safety discussions and metrics, combined with accountability, engagement, and ownership at all levels within the organization. We're also working on our organization, health, and culture at Boral. Tangible artifacts that provide clarity of purpose, direction, accountability with supporting tools, are being rolled out as Boral Way to ensure alignment across the organization. Significant improvement in Boral will come from engaged leadership at all levels, which should and must have an operator and an owner mindset. Moving to our FY 2023 financial highlights on page 10. Like safety, I'm pleased to announce significant FY 2023 improvement across all financial metrics. Revenue up 17%, EBITDA up 38%, EBIT up 106%, delivering an EBIT margin of 6.7%, up 289 basis points. Second half margin of 7.7%, up 200 basis points on first half FY 2023, and up 566 basis points on second half FY 2022. ROFE was 10.4%, up 515 basis points. We have been able to demonstrate improvement in a challenging cost environment. I remain of high conviction that, among other things, Boral's success will be underpinned by our ability to standardize and simplify our business. Moving to Slide 11. The financial details tell the story of significant improvement across all key metrics. While I will limit my comments to underlying results, it is also good to see strong statutory results from continuing operations. Net revenue up 17% to AUD 3.5 billion, with improved price and volume across all regions and products. EBITDA rose 37.6% to AUD 454 million, enabled by volume, price, and cost abatement. Underlying EBIT was AUD 231.5 million. NPAT was up 304% to AUD 143 million, with an adjusted EPS up 303% to AUD 0.129 per share. Operating cash flow was up 65% to AUD 358.7 million. ROFE and ROCE both delivered material year-on-year improvement. I'm moving on to Slide 12. Our financial trends reflect a recovery from recent years and give an assurance that we are on track. All numbers are for continuing operations to provide a proper comparison and demonstrate clutter-free improvement in our core business. What is pleasing is the improvement in both earnings and margin expansion, indicating improved operating leverage through operating discipline. Also to note is a slight loss from property segment, which was expected. We are working on executing a good strategy for our properties, which will set us up for long-term, sustained accretive earnings. Hence, results this year does highlight a strong improvement in our core construction material business. Moving to Slide 13. We saw a moment in our sales segmentation with a decline in detached housing, multi-resi, and commercial in FY 2023 over previous years. We're expecting this trend in residential part of our business to continue in the first half of FY 2024 as a minimum. We should remember that the long-term average growth of concrete in key markets in Australia has been approximately 2.5%. While volume has increased, mix changes are impacting our average selling price, average selling price. We saw improvement in volume across each segment at varying levels. Cement, concrete, and quarries grew by 5%, 6%, and 7%, respectively. Ashwell also performed well for the year, growing its volume by 7%. Recycling growth was 13%, albeit coming off a low base. The business has started to work closer with the market, we have a significant more work to do to regain our leadership positions. Moving on to page 14. Boral saw price escalation in FY23 across all segments. Price escalation was different by region, reflective of the competitive tensions. Very strong focus on price and price-related discipline helped us to recover flat price over the past 4-5 years. Our commercial and sales team did a good job in working with our customers, who, like us, were facing cost pressures, pressures on all fronts. Price escalation was desperately needed to recover the cost inflation we have faced over the last 12-18 months. As you can see, all key cost lines in our P&L faced significant headwinds, increase that we have not seen in decades. We did all we could to mitigate cost pressures, making adjustments to our cost base through overhead reduction, procurement initiatives, and price escalation. It is very important that we appreciate that while rate of inflation growth might subside in FY 2024, we are not in a deflationary environment, meaning cost increases seen so far are here to stay. We will have to remain highly price disciplined to just stand still. Price discipline becomes all the more important if volume comes under pressure, as cost per unit will only get worse. There is only so far we can work as a business on cost and productivity in short term, without damaging the long-term sustainability of the business. I'm also pleased to hear that the construction industry is finally having lots of conversation of moving away from fixed price contracts. Fixed price contracts will always squeeze somebody lower in the construction value chain. It only gets worse in high inflation environment. We will continue to work with our customers to improve our service and engagement on volume and pricing. I hand over to Belinda on Slide 15. Thank you, Vik, and good morning, everyone. Moving on to capital expenditure. CapEx for the full year totaled AUD 223 million, down 29% versus the 2022 corresponding period. As a percentage of revenue, CapEx was 6.4%, and as a percentage of depreciation amortization, CapEx was 100%. This is in line with previous expectations that we would be keeping cash CapEx spend below or close to depreciation amortization. We've been very pleased with the completion of our Geelong cement facility and the capacity expansion it provides, as well as our progress on the implementation of the chlorine bypass at Berrima, which will enable us to grow our alternative fuels for cement manufacturing and reduce our emissions. As previously discussed, we're being very disciplined on the way that we are spending capital, and we'll continue this discipline in 2024. Turning to cash flow on page 16. Operating cash flow of AUD 359 million is an increase of AUD 142 million, primarily driven by improved operating performance and lower interest in tax payments, partially offset by some net working capital increases. The financing outflow of AUD 654 million primarily relates to the previously discussed debt repayment of AUD 629 million, whereas the prior comparable period primarily relates to the capital return to shareholders. From a statutory perspective, it is worth highlighting that in the prior comparable period, investment cash flow includes net proceeds from business disposals, primarily related to the North American Building Products. Turning to the balance sheet on page 17. Boral's balance sheet continues to be extremely strong. Given the strength of the balance sheet, during the year, we've been able to execute a number of measures to optimize liquidity, including debt repayments as well as cancellation of undrawn committed bank facilities. With AUD 658 million of cash at the 30th of June and a net debt ratio of 0.7 times underlying EBITDA, which is well below our target range, optimizing our capital structure will continue to remain a focus. Funds employed at the 30th of June is AUD 2.3 billion, which is a slight increase from 2022, driven by a slight build of networking capital. I'll now hand back to Vik to provide an update on our network, starting on slide 19. Thanks, Belinda. On slide 19, a key upstream business is our significant cement operations. With 17 operating sites on the East Coast of Australia, Boral Cement has around 4 million tons per annum capacity. Our operations include clinker manufacturing at Berrima, our Middle Limestone Mine, our Maldon and Geelong facilities, and the Tarong Fly Ash facility. The New South Wales assets, in particular, are privileged assets with differential rail access, providing operational and network flexibility. With manufacturing and importation on East Coast, combined with strategic partnership in South Australia and WA, we believe we have an optimum upstream cement operations. Ensuring that these operations are optimized operationally and utilized fully with right economics of price and volume, is critical to develop through FY 2024. Moving to quarries on slide 20. We have 76 quarry operations that supply around 30 million tons of product annually to downstream operations and external customers. With significant supply capacity across key regions, our high quality, long life, hard rock, and sand resources are truly priced assets. Our operations are efficient, cost competitive, and well located close to key demand centers and rail networks. We have significant opportunities to improve utilization and overall equipment efficiencies, or OE for short, for our quarries. Getting commercial and cost economics right for each of our quarries will drive margin improvement. Improving our asset position, bridging network gaps will continue as an important strategic play. Moving to concrete on slide 21. Boral's downstream concrete operations have delivered proven technical solutions for customers through a significant network of 209 operational sites. Our concrete team's proven technical ability is industry-leading, providing high strength and specialty mixes capable of solving the most complex engineering challenges. Proximity to customers is critical value driver. Our diverse footprint assists us in optimizing both Boral and customer outcomes. We will continue to review our network and plant capability to deliver optimum performance and volume outcomes. Exploring options for new locations and upgrades to existing locations is ongoing. Reducing operating costs per cubic meter at a plant level is critical. Rollout of Auto Allocations, our logistics technology tool, has been successfully completed in four metro cities across the nation. As expected, it is improving our logistics cost and service levels. Moving to Asphalt on slide 22. Asphalt is one of our businesses with wide scope and capability. Scope of works range from road maintenance, new residential and industrial subdivisions, through to head contractor work, such as laying the tarmac for the new Western Sydney Airport. The Western Sydney Airport provides an example where our depth of technical experience and knowledge is a value differential and why customers award us such prestigious contracts. There are fair few complicated, large infrastructure projects planned for the near future. The pipeline is strong, and Boral is well-placed to capitalize on these opportunities. Improving operational performance, contract discipline, and securing right margin opportunities will deliver more value for this business. Moving to recycling and concrete placing on slide 23. Boral's recycling operations receive and recycle over 2 million tons of construction and demolition, and excavation materials for reuse in construction, making it one of the largest C&D recyclers in Australia. With a broad range of inbound materials and a high recovery rate, the operations are both efficient and supply much-needed circular solutions to both internal and external customers. A recycling business makes strong strategic sense for Boral. It produces products suitable for quarries, concrete and asphalt mixes, and can even assist with the clean fill to rehabilitated end-of-life quarries. Moving slightly upstream through well-located transfer stations to receive the higher part of levy awardance is the next phase of our recycling business. The right side on this slide highlights our concrete placing business. We have concrete placing business in New South Wales and Queensland, which extend our integrated supply chain with customers, providing concrete placing services. It brings Boral closer to the end customer in execution of projects. Moving to slide 25 on strategic update. I first introduced PMAF in my address at AGM back in November 2022. I will update you on the progress we have made towards achieving them. On people, the new flatter organizational structure is driving both alignment and accountability across the business. I talked about progress on people and safety earlier. Our new operating model deployment is in progress, including regional P&Ls and standardized back office, which will and should improve agility and accountability across the business. On environment, the circular economy represents a great opportunity for Boral. We have a clear decarbonization pathway to execute pragmatically. On markets, we are focusing on improving our customer experience to offer the best possible service outcomes. Work is underway to revamp our call to cash process, and considering the multi-year nature of this initiative, the aim is to break it into deliverable elements before proceeding to the next phase. On assets, we want safe, compliant, reliable, and optimized assets to create a true competitive advantage. With cost escalating across repairs and maintenance, plant and equipment, we are looking closely at how we can do better. The new simplified and standardized framework will drive fleet and equipment utilization. There is significant work to do on our assets, but when we get it right, we will see considerable benefits to flow through. As you can see from the progress arrows, we have somewhere to go. With clear plans in place and execution mindset, we are confident we can deliver. I'll dig deep into environment and assets in coming pages, starting with environment on page 26. To understand our key focus in decarbonization, it is important to understand the key contribution to our carbon footprint. As shown in the left chart, almost 80% of our Scope 1 and 2 emissions originate from cement and lime operations in New South Wales. Further, it is worth noting that approximately 70% of our Scope 1 and 2 emissions originate at a single site, which is our cement manufacturing site at Berrima, the home to New South Wales' only remaining cement kiln. The figure on the right provides a breakdown of emissions by key drivers. A key point to note is that approximately 43% of our Scope 1 and 2 emissions are process emissions resulting from the decomposition of limestone into key cement components and carbon dioxide. This means that more than 40% of our Scope 1 and 2 emissions are very hard-to-abate process emissions, which are unlikely to be addressable in a short term and require further development in relevant technologies, including carbon capture storage and its utilization. Therefore, our key decarbonization focus in the short term will be reducing the emissions from thermal fuels as the second-largest contributor to our scope emissions, and emissions from purchased electricity as a source of our Scope 2 emissions. We are making significant investments to address these emissions, highlighted on next slide, 27. In particular, we are making good progress in reducing our electricity-related emissions by taking firm steps in our journey to transition to renewable electricity. To date, we have secured a major power purchase agreement, which will begin delivering renewable electricity in FY 25. The upgrade investment to expand our alternative fuels program is well progressed. While we are investing on alternative fuels program, we've also made significant progress in reducing the cementitious intensity of our products. In FY 2023, lower carbon concrete represented approximately 28% of our concrete sales volume, up from 7% in FY 2022. Our focus on reducing the emissions from our supply chain are underway, implementing technologies, including Auto Allocations, which optimize our truck deliveries. We are also expanding our participation in the circular economy through growth of our recycling business. In FY 2023, we diverted more than 62% of our operational waste from landfill, completed the rehabilitation of approximately 118 hectares of land, and continued to manage three biodiversity off-site sites in New South Wales and Queensland. We want recarbonation to be broadly recognized as acceptance of 20%-55% carbon capture naturally changes the whole narrative for us and the industry in general. Moving to slide 28. While we are making good progress in our decarbonization project, we also note our decarbonization priorities need to be optimized to meet our external obligations. A key external factor affecting our decarb priorities is the Safeguard Mechanism reforms. The Safeguard Mechanism reforms, commenced as of July 2023, require significant decrease in emissions baseline of Safeguard Mechanism facilities, which are approximately 215 facilities in Australia that produce more than 100,000 tons per annum of carbon. Our cement manufacturing facility at Berrima, covered under the Safeguard Mechanism, produces 1 million tons of Scope 1 emissions per year. We believe that prioritizing further investment in key cement decarbonization pathways, which is our main focus, will well position to meet our Safeguard Mechanism obligations. We, however, believe that complementing the Safeguard Mechanism reform with an effective carbon border adjustment mechanism is absolutely critical to ensure that Safeguard Mechanism reforms do not lead to carbon leakage and do not disadvantage the local manufacturing, especially in trade-exposed industries like cement manufacturing. Moving to slide 29. In line with changing ecosystem, we are updating our intermediate FY 25 targets to establish an achievable, yet ambitious goal of 12%-14% absolute reduction from FY 29, 2019. We are also reviewing our FY 2030 targets to ensure our targets are aligned with our obligations under the Safeguard Mechanism and globally recognized pathways for cement industries. Our current FY 30 targets are absolute targets set using SBTi absolute contraction approach, which is acknowledged by SBTi, is one size fits all target. SBTi, by the way, stands for Science Based Targets initiative. Our new targets will consider the globally recognized pathways for the new cement for the cement sector. The unique pathways applicable to cement sector is recognized by SBTi as newly released Sectoral Decarbonization Approach, which acknowledges that due to its process emissions from limestone calcination in clinker production. The rate at which the sector can decarbonize will differ from the overall rate of decarbonization possible by society as a whole. We will transition to intensity-based targets for FY30, while progressing towards meeting our net zero ambition by 2050. We will confirm the new targets for FY30 in the next 12 months. Moving on to assets update on slide 30. I spoke earlier about our vertically integrated network. The competitive advantage of a network comes from its ability to remain current, and hence, our commitments to optimize our price upstream infrastructure remains strong. We are making it a strategic priority to invest in our price, cement, quarry, and recycling assets. We have delivered the Geelong cement facility and a Geelong Fly Ash facility. Over at quarries, we have acquired Dunmore Hard Rock Reserve in New South Wales and Hillview Sand in Victoria. In recycling, we have established our Adelaide base and expanded into product material solutions. In Asheville, we have completed the Deer Park wrap upgrade and upgraded our bitumen tanks in Toowoomba, Queensland. There's a long list of work-in-progress initiatives, including new plant and upgrade to sites across the network. Moving to property on slide 32. Boral remains committed to applying a fixed asset lifecycle approach to property. A more deliberate and strategic approach to managing fixed assets through its lifecycle from core construction material to its property phase is now being taken. While within the constructions material segment, the team secures locations and approvals necessary to operate our leading integrated network. We then operate and optimize the assets to strengthen performance, profitability, and position Boral for long-term success. Once it is determined that a site is surplus to operations, the team shifts the focus to repurposing the asset to the best combination of recurring and divestment earnings. We have a surplus property portfolio of close to AUD 1 billion, made up of about 30 properties over about 3,800 hectares. Moving to slide 34. 33. The two secure opportunities are properties at Donnybrook and Scoresby in Victoria. These sites are being repurposed at the end of their operating life. Donnybrook is rezoned, with development and sales underway. Boral's land is expected to support about 3,000 dwellings upon completion of the development. We expect to receive payment of AUD 10 million per annum in FY 2025 through to FY 2027. This is followed by more than AUD 300 million of undiscounted net cash flow from FY 2029 until the development currently expected to be late 2030s. At Scoresby, approximately half of 171 hectare site is rezoned for residential development. Rezoning to be completed in 2024, which could lead to more than AUD 600 million of undiscounted net cash flows expected over the life of development. Turning now to some existing opportunities and progress on slide 35. In addition to the opportunities secured, we continue to progress opportunities for several other, other properties. Some of those are shown here on slide 35, 34. Warren Pontch has been identified as a future possible area to bring forward rezoning by up to 10 years. In addition to Warren Pontch, the Western Sydney Lakes, or formerly PLDC, of which Boral is a 40% shareholder, and Bombo Quarry, with the significant work continuing on both properties to progress the development opportunities on each site. We are also assessing the long-term and highest value proposition for our Deer Park property, which is adjacent both to industrial and residential areas. The existing use of this land now have some serious limitations. While the timeline for the repurposing of many of these properties is dictated by various factors, including rezoning and rehabilitation, they represent significant value to the business that will deliver substantial earnings in the future. I will now hand back to Belinda to wrap up the presentation with priorities and outlook on slide 36. Thanks, Vik. Moving on to our priorities and outlook. Safety continues to be our highest priority, and we'll continue to build on our improvements from 2023. We'll continue our focus on achieving our decarbonization targets with the initiatives that Vik has just highlighted. Commercial discipline and rigor, customer service, and sales effectiveness will continue to remain a focus and will be important to ensure we achieve price realization beyond cost recovery and service our customers extremely well. We'll continue to invest in our assets, and we'll maintain a strong capital discipline. We'll continue to build on our capabilities across operations and logistics for optimization and cost reduction. Improved earnings need to reflect on cash, and hence our cash conversion cycle will continue to be a focus. We'll continue to focus on our strategic PEMAF pillars, particularly our integrated network. In terms of outlook, assuming no significant shift in market demand or price environment, we expect to deliver an underlying EBIT in the range of AUD 270 million-AUD 300 million for full year 2024. That concludes our presentation. We'll now invite you to ask questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. We ask that you please limit yourself to two questions per person, after which you may then rejoin the queue. Your first question comes from Shaurya Visen with Bank of America. Please go ahead. Hey, good morning, Vik. How are you? Hi, Belinda. Good. Hi, Luke. Great. Congrats on a very good quarter, very good set of results, Vik. Just on pricing, right? Clearly very strong. Could you give us a sense of how the pricing moved as we moved through the second half when demand was softening? Put another way, right? How did the pricing fare as demand softened? Were there, were there any pushbacks? I have one more, but perhaps you want to take that first. Sure. Pricing moved in the second half across the board, Shaurya, and I think the Q3 volume, which is, was very good. We did see a bit of demand softening in Q4 of the financial year. Q3 demand and price was strong. Q4 was softening, price carried on. Remember, price is, is a lever, you know, we need to push because of the cost pressures we are facing, right? All the demand softened, you, you can also see our revenue went up by 17%. Volume was ahead of last year, you're right, the Q4 saw a bit of softening, softening over Q3. Remember, volume has gone up significantly year-on-year, and so has price. Yeah. Yeah, that, that's helpful. Just on the costs, right, perhaps one for you and one for Belinda. Vik, on the cost side, right, clearly, you've done quite well on controlling the fixed costs, right? Just curious from here, what's the best way to think about costs? Do you think most of the fixed cost reductions are done and the costs going forward will sort of be driven by your, your input costs or variable costs? I have one for Belinda, but perhaps you want to go first. Okay, listen, I think in our, in our, in our business, cost is directly proportional to demand, Shaurya. I think, you're never done, I guess. You know, as I've said it before, you know, cost discipline, I mean, the only way to run an industrial business is cost discipline, and cost management should not be an event. It should be how you run a business, and that's what we're trying to do. We will, you know, the cost pressures will carry on, as I said in my presentation, the inflated cost, which has come to bear with us, is gonna stay. The rate of inflation might go down, so we've got to constantly work on cost issues like procurement, getting better productivity, simplification. That all carries on. I don't think that stops. Yeah, that, that, that's helpful. Belinda, this one is perhaps for you. Could you give us an update on your hedging positions across your key inputs, or, or they are very similar to what you told us on the Investor Day? Yeah, they continue to be really similar to what we had on Investor Day. We obviously look at all of our commodities. The accounts actually does a really good recap of all of our hedging positions, and you can see them quite clearly. I'd be happy to take you through that later today. Yeah, pretty much in line with what we talked at Investor Day. Okay, great. Thanks. I'll jump into the queue. Thank you. Your next question comes from Lee Power with UBS. Please go ahead. Hi, Vik, Belinda, Luke. Vik, just in terms of your, your outlook, the, the commentary around no significant shift in market demand or price environment, can you? I know you made some comments earlier around longer term concrete volumes. Can you, can you give us an idea of what you're actually assuming in terms of volumes across the business in, in FY 2024? Yeah. I think for FY 2024, our assumption is flattish to slightly up, mate. We will see a resi drop in FY 2024 first half, but we do think it'll either come back, may not come back, with full gusto, but it'll come back in second half. We do believe the infrastructure investment will move from big engineering infrastructure to social infrastructure. For FY 2024, we kind of assume flattish volume over FY 2023. Okay, thank you. Then in terms of the price outlook, like you talked about the need to offset costs, like what, what level of pricing do you actually think you need to achieve in 2024 just to, to offset the level of cost inflation that you have? It's, it's, it's directly proportional to the cost pressure we're going to face, Lee, right? You know, if the energy price jumps by 10, 15%, again, you, you, you have to do something about that, right? If it's... I think that's what we are looking to do. I think that's why, you know, I, I talk about fixed price contracts all the time. We should be able to move the price in relative to the cost. Otherwise, you end up the situation we are facing, if you look on page 11, cost in this business has not moved for 4.5 years, and that's just not doable when everything else moves, right? The other pressure is, I just want to, again, make a point. We are not going into deflationary environment. The cost which we have faced, it stays. The EBAs we have signed are now signed. you know, I don't see diesel going backwards. The rate of growth might slow down, but it's not going, going backwards. Hence, price discipline is critical, and then over, over and above, we've got to recover our price. That's just a good business to do, I think. Okay. maybe, maybe asked another way, like your, your, your point around the legacy of fixed price contracts, like what contribution to ASP do you think you get from just those legacy projects rolling off and coming onto a new pricing dynamic? We don't give that information, Lee. We never have. I think, remember, we got 5 different product lines, and, and different product lines have different permutations, combinations. 1, I don't have the number handy. 2, we don't give that anyway. Of course, every time a fixed price comes off, you have a better ASP indication, clearly. Yeah. Excellent. Thank you. Appreciate the call. Thanks. Your next question comes from Peter Steyn with Macquarie. Please go ahead. Hi, Vik, Belinda, Luke, thanks for your time. Vik, could you give us a bit of a sense of the competitive context that you're seeing, around all these dynamics we've just discussed, you know, and how you think the environment could continue to support the price context that you so clearly put out there? I mean, in general, Pete, obviously every industry has outliers, but in general, we are seeing a rational behavior across the country now. I think, but obviously there are always outliers, and I guess they have to do what they have to do. I think the way I would say, Pete, is the reason of putting those cost slides out there, is that's a pressure we are facing. Quite often price takes the headline, but you can see the cost pressure: cartage, material, labor, energy. I mean, this is unabating for us for 12 to 18 months, right? I'm sure our customers are facing the same, and so are our competitors. If you are not rationally planning, you know, doing something about your price, then I can only imagine you're going backwards. In response to that, we are seeing some rational behavior on price right now. Thanks. Can I then approach just a related, segueing from that? Around customer service and that leading to better commercial outcomes, you talk about this a fair bit. Could you give us some examples, and how that is flowing through for you and how you see it continuing to improve? Yeah. I mean, if you do a call to cash process in any business, Boral is no different, there is a multiple points where customer interacts with Boral, I mean, we call it, we call it moments of truth. When you look at those moments of truth, they start with when the first time customer call. How quickly are we picking up the phone call? What's our grade of service? How quickly are we confirming the order? How quickly are we delivering? When a truck goes to the site, when our truck doesn't arrive on site, that affects builder, his customer, and his customer further down because there are multiple men and women standing at site waiting for the trucks. That's a moment of truth. Then we invoice the customer. That's a moment of truth. Then we call them for money. That's a moment of truth. If you have disputes, that's an issue. All of these issues need to get improved in our business, and I just want to make sure our people are doing a very good job. They work very hard. It's the processes which are letting them down, and that's what we're working through right now. Our grade of service has improved, our delivery has improved, but nowhere close to where I would like to see. Our disputes are improving, but nowhere close to where we now need to improve. I want to make sure by improving the process, our people's life becomes easier, but as importantly and more importantly, our customers' lives get important. That work is underway, and we're working it through. It'll take about a couple of years, but we will get it right. Right. Thanks. We can leave it there. Thank you. Your next question comes from Lisa Huynh with J.P. Morgan. Please go ahead. Hi, morning, everyone. Vik, I guess you alluded to, four quarter volumes being a bit softer than the third quarter. Can you just talk about the exit run rate, for volumes into June, I guess, and, and also into July so far? It hasn't changed, Lisa. It's been, as I said, quarter four is slower than Q3, but nothing dramatic, I would say. Still in line with last year, but Q3 was very good for us, and I think so was generally, if I hear the marketplace. It's been steady as compared to last year. Okay, sure. I guess, you know, you also kind of talked about volumes being flat to slightly up next year. Can you just comment around just capacity utilization for Boral and where that kind of stands at the moment in terms of the cycle? Well, again, it's a, it's a wide question, Lisa. Capacity utilization obviously differs for cement quarries and concrete batching plants and all that stuff. Average of an average probably wouldn't make any sense, I guess. At the end of the day, you're spot on. If the volume is down, then, the capacity comes down and utilization comes down, and then you've got to take a stand. The stand could include parking trucks on the batching plant or could include, taking shifts out or could include, reducing a working capital. All of those initiatives are in place, but you can only do those initiatives, if you are managing the business with an operator mindset. You're constantly looking at those metrics and reacting to them fast, because in this business, if the volume shifts, as you know, then you have to move fast, and we are pretty ready to do that. Yeah, sure. That sounds great. I just had a follow-up question on just cash conversion, maybe one for Belinda. Can you just remind us whether there's any seasonality linked with the cash conversion number? You've talked about improving it, but just kind of give us some context around what you're doing and what that cash conversion target might be on the medium term. Yeah. The cash conversion target is quite high. We, we won't share the exact number, but, but quite high, and I do think we can improve from where we are today. We're very focused on all elements of working capital, so obviously receivables, inventory, and payables. We have a lot of visibility and reporting out at the segment level. A lot of good, I think, action items from the segments that are continuing to improve and, and a, a big focus. It's things like looking at our inventory levels and saying: Is that the optimal inventory level? Can we do better? And we're very focused on that. Sure. I guess you've talked about introducing, you know, I guess, sales incentives linked to cash conversion, in July, I guess. When, when will we see? Should we see the benefit of that start to flow through in the next 12 months? Yes. Yep. Yeah, for sure. They are definitely linked to cash now, all of the sales plan. Okay, sure. I guess I'll leave it there. Thanks, guys. Your next question comes from Andrew Scott with J.P., sorry, with Morgan Stanley. Please go ahead. Good day, Vik and team. Vik, I, I might start with a, a compliment. I think I gave you grief last time for the, the disclosures. There's a, a lot more information in this pack, so credit where credit's due. Thank you for that. Yeah. I might just kick off with an easy one. Maybe Belinda, the guidance you've given, I presume from the way you're talking, that's an ex-property number there? That's no. We don't talk about ex-property, Andrew, anymore. Might check net number. We are not expecting anything major, and if we do anything major on property, hypothetically, we sell it, we'll put that out separately and significant. Perfect. Thanks for clarifying. Just a second one for me. Leverage 0.7 times, no dividend. Can you help me understand that? It suggests maybe you've got something in mind for some uses of cash. simply on dividend issues, franking credits, Andrew. We don't have enough franking credits, and the idea is to collect enough franking credits before we put it to the board to resolve what they wanna do with the dividend. Now, there's no secret plan here, just to be clear. All right. Thank you. I'll jump off. Your next question comes from Keith Chau with MST Marquee. Please go ahead. Good morning, all. Thanks for your time today. Vic, just a first question to get a bit of context on... Yeah ... you know, how well each of your business units or profit centers are, are tracking at the moment. What I understand is, for each of your asset sites, you're now monitoring the progress towards targets. Can you give us a sense of, you know, on a proportionate basis, how many of those sites now are operating to targets? How does that compare to three, six, 12 months ago? Can you give us a sense of the sites that are effectively green and those that are still amber or red? Thank you. Yeah. I think what, what, Keith, you're referring to, what we call the drag index of the concrete batching plants. I think that's what you're referring, mate. Yep. In our quarries and cement and recycling sites are all good, Asphalt's all good. I think, out of the total concrete batching plants, obviously, we've talked about last time, there are some sites which are not making money. There's a significant improvement in those, of course, on back of price and volume. If you remember, we didn't give the number last time, so we're not giving actual numbers, but I can tell you it has been a significant improvement on those. Otherwise, we won't be able to deliver the results we delivered. There are still some sites left, and I think I've come to the conclusion that we might have to live with some sites being in amber, because for the strategic reasons. I think ultimately, that work has delivered significant benefits and will continue to do so. Okay, thank you. The second one is a follow-up on Lee Power's question, just on price. I know, you know, for commercial reasons, you don't wanna disclose, you know, customer contract details, but perhaps if you can give us a sense of whether Boral is, let me say, catch up mode on price, price increases or price realization, or what proportion of contracts are still rolling onto current market prices? Matt, I can't give you that information, as you can appreciate, Keith. We are working through them. Again, it's a very customer relationship or product line by product line, as you can imagine, right? Cement is generally where you find we sign most the long-term contracts, Cement and Asphalt, and I think we just got to work that through. I think we'll get it, we'll get it right. We're not creating the problem by signing new ones now, so it's obviously a depleting number, we don't have the number handy. In any case, I wouldn't give that to the public domain anyway. Okay, thank you. I'll circle back. Thanks, Matt. Your next question comes from Brook Campbell-Crawford with Barrenjoey. Please go ahead. Yeah, thanks for taking my question. Just, 1 final 1 on, on the price topic, I guess. 1 way to, I guess, ask the question would be: If, if there was no further or additional price increases across your, your products, from here, what do you think the, the average sort of ASP increase would be in FY 2024, just I guess, given the timing of the increases that you put through in FY 2023? Thanks. I think there are two, sorry, Matt, there are two wrong assumptions here. I think that I would not assume that there will be no price increase in FY 2024. It's like probably saying there will be no cost increases in FY 2024. We know that's not gonna happen. I've said it very clearly, the rate, the rate of increase of FY 2023 is not what is gonna get duplicated in FY 2024, but there will be price increases because cost will increase, right? That's just wanna make sure that's very clear. The second thing is, it is worth reflecting that price increases started up in October, November of FY 2023, FY 2022. That's when it started. Now if you do the math, the first four months, price increase didn't go up. If you do the math, there will be an ASP increase naturally, even if you just stand still on FY 2024 over FY 2023. I'm saying, I'm not saying that the price is gonna remain steady. All I'm saying is the rate of increase will slow down. Yeah, we definitely have an ASP coming through. Again, I wouldn't put an actual number out anyway, as you would appreciate, Brook. Yeah, no, fair enough. That, that's all right. Just the, the second one. You, you mentioned earlier on about sort of more work to do to regain leadership positions across your, across your business. Could you just elaborate on that, and perhaps a headline where you think you might have lost share and what you're doing to sort of regain this? That'd be great. Thanks. Yeah. There's no independent data which can tell us we have an X amount of market share or Y amount of market share. What I do have a line of sight of the volume which we used to sell, or Boral used to sell over the last 10 years. If I just take that into account and apply a certain amount of GDP growth, which has happened over the last 10 years, I would say today that we have lost market share. I think that's a factual statement. The degree of loss has been in different states at different places. We have to make sure that we want to regain that leadership, we don't want to regain that leadership by giving up silly price in the marketplace and just buying volume for volume's sake. We are not interested in that. There is no desire on Boral to get volume for volume's sake. That's bad business. We want to do that by improving our customer service. We want to do that by, you know, making sure there's a customer loyalty and a, and a factor for them to come back to Boral. The intention obviously would be Anybody coming into my shoes would be looking for a historical volume and say, "Okay, well, clearly we lost that, and market has grown, so we got to go back to that, at least minimum that volume." I, I repeat, again, not volume for volume's sake. That is not Boral, what Boral is about anymore. Got it. Thanks. I guess a follow-up just on, on the volume. The aspiration for double-digit EBIT margins, no timeline around that. Let's just call it medium term. Does that, does that need a, a pickup in, in volumes from the current levels? I guess you've said therefore 2024 is similar demand to 2023, but to get to that double-digit EBIT margin level, do you, do you think you need a step up in, in volume and the operating leverage that comes along with it? I think ultimately, Brook, you will need, in any business, you need 3 things: volume, price, and cost, right? We've got to move lever in all of those. I can't tell you today mathematically that volume needs to go by 1, and price needs to go by 3, and cost needs to come down by 4. I just don't know. We know enough now, we've done enough work to know that the permutation combination of 3 will get us to double-digit. I'm not walking away from that. That That is an absolute doable. We can see the pathway to it. To predict that we need... Of course, of course, absolutely. Every time you reduce your cost and get an extra cubic meter of volume atop, that gives you operating leverage, right? I'm just basing on the fact that the concrete has grown up by, say, 2, 2.5% long term, in Australia, over long term. I think we are happy with that. If that comes through, we're good. I think I'm not worried about going... In fact, market behaves silly if the volume shifts too much in the top or the bottom. A normal GDP for us is good enough for us to deliver. That's great. Thanks. Your next question comes from Simon Thackray with Jefferies. Please go ahead. Thanks. Thanks, Vik. Can you hear me okay? I can, Simon. Thank you. I can, Simon. Thank you. Yep, no, no problem. Thanks for taking the question. You can see the obsession, volume and price, you know, from, from the, from the Q&A, and I'm not going to be any different, to be honest with you. There's AUD 190 billion worth of work out there at the moment to be done. The, the roads pipeline has doubled since pre-COVID. The building pipeline is up by 50%. I'm just opining or, or trying to ruminate on your comments about sort of volume flat to, to maybe slightly up in 2024 against that pipeline, particularly given your, your roads revenue exposure increased by 2, 2 percentage points to 45% of revenue. Unless you're seeing project cancellation or project delays or something, how do you reconcile the pipeline of work with your commentary about flat volume? Yeah. I want to make a clarify. Thank you for raising that, mate. I appreciate that. I am bullish about starting FY 2024, second half onwards. I think the project pipeline is good across the business. I think resi is gonna come back as well. Commercial is gonna come back, and so is infrastructure. Infrastructure will move both in engineering infrastructure as well as social infrastructure. All I'm saying is, you can only see volume, what you can see. Our quotation is high, our pipeline is strong. Question is when the projects drop in, and in that context, what we are seeing today, we are saying that the first half FY 2024, first half FY 2024 could be slower considering the way we are coming out of quarter four of FY 2023, but I remain very optimistic for future. Generally, I'm not worried about the volume in medium to long term at all. No, that's, that's helpful. Nor, nor would I expect you to be, given the, the amount of work, notwithstanding there's a big dollop of inflation in those numbers already. Right. When you, when you talk about first half of 2024, sorry to be, obtuse, are you comparing that to second half 2023 or to first half 2023? No, I was comparing to first half 2023. First half 2023. You think it'll be sort of flat on first half 2023 or is that really what you want us to get to? Yeah. Yeah, Yeah, I, I think, I think we are saying, and this is what I was trying to say, I think, to Brook before as well, when he talked about the price. If you do mathematically, you'll see the price didn't go up since October. We should remain, get the price benefit in first half, and if the volume remains flat on first half FY23, we're still looking at, okay, right? Yeah, yeah. Then the volume comes back closer. I think that's how we, that's how we are thinking about it, Simon, but, you know, we can all sit here and kind of speculate on volume, but that's how we are thinking it, right, so. Yeah. Maybe, maybe just within that, that question, I said, you know, any experience on seeing any of your projects that have been canceled? I mean, there's a lot of capacity constraint in the industry broadly, but both building and infra. Mm-hmm. Have you had seen any experience of that, of people having to cancel contracts or, or novate contracts to other contractors? I have not seen a single canceled contract, let me put it that way. Yeah, terrific. It might- Thank you. It might be slowing down for funding, or it might be slowing down for planning reasons, but I've not seen a single project, major project being canceled. They're all there, and our customers are telling us their pipeline is full. Yeah, so. Yeah. They're all fixed price at the moment? No, they will not be. Thanks, Vic. Your next question comes from Daniel Kang with CLSA. Please go ahead. Oh, morning, everyone. Just to continue that discussion, Vik, you commented earlier on social infrastructure projects picking up. Do you expect it to offset the big infrastructure projects that are likely to slow down? No, not we are, we are not seeing that, Daniel. I think the question, we have not seen any project canceled, as I was telling Simon before. What I am applying is that there is. If you look at the announcements made by the Labor, with the government in Queensland, government in New South Wales, we are picking up thematics that money will shift to what we call social infrastructure, schools, hospital, et cetera. The announcements we have seen, along with the projects which has already been announced, by the way. Apart from Victorian government, I have not seen any government either shelving any project or even thinking of delaying the project. I think the message coming through is, what is happening is going through, but the next phase is gonna be social infrastructure. Remember, at some point, the Queensland Olympics investment comes through as well. From that all perspective, we are not, we are not kind of negative on that. Okay, got it. Just a question on your guidance, AUD 270 million-AUD 300 million EBIT in 2024 implies over 20% growth from 2023. Just want to unpack the key buckets that will drive that outcome. You mentioned that volume will be flat to up. Then are we looking at pricing momentum and costs to drive that outcome? It'll be a combination of all three, Daniel. It'll be a combination of volume, price, and cost, right? Remember, the cost initiatives we have taken this year will benefit FY 24. The price initiatives we have taken this year will benefit. I'm not saying, and I'm still saying pricing is volume flat to up. Depends on half and half, right? I'm still saying flat to up. Combine that with better pricing for the full year, combined with the lower cost, gives you a very significant operating leverage. Right? That's how we're thinking about it. Got it. The risk... It will be a combination of all three. I just want to make sure it's clear. Yeah. The risks on the top end and the lower end of that range, where, where do you see the greatest risk? Is it, is it volume? I don't know, Daniel. Seriously, I think it'll be, they're all three equally up and down. I mean, when we did our risk and opportunities, they all come through. I wouldn't, I wouldn't put a particular number on any one of those, mate. We gotta work through all three anyway, so. Absolutely. Okay. Thank you. Thank you. Your next question comes from Sam Seow with Citi. Please go ahead. Oh, hey, guys. Thanks for taking my question. Yes, Sam. Just, a simple one from me. Just when we think about the comp, can you perhaps talk to the volume that you lost from the weather? Mate, I, I don't know. We don't talk about weather. It is what it is. Our volume was up, price was up. I don't. We haven't done the calculations on how much volume we lost for weather. Okay. Then maybe to mix things up, on, on the cost side, your energy looked up 21%, implying that was sequentially flat, half and half. Just wondering, 1, is that right? Then, 2, from all your hedging initiatives, should we think of your cost base as more fixed going forward and more operating leverage in the business, both up and down? You're talking about purely energy, Sam? Yeah, I think it was 21% there on page 14, and it was up 50 or something at the first half. Just wondering if, if that, if that was like for like. It was up on FY 2023, but previous year by FY 2022 by 21%. You're asking, your question is, in the second half of FY 2023, was it flat over second half of FY 2022? First half, 2023. Flat on first half, 2023. Yeah, it'll be flat on first half 2023. Yeah, that'll be right. Yeah. I think- Flat to slightly up. It, it's definitely up, but not materially up. Yeah. I think the other thing I would just add is, probably an important part of that question was the hedging. We're not 100% hedged. Yes. We have a, we have a hedging strategy, but I wouldn't think of it as fixed cost because we, we're not hedged at 100%. Okay. Sweetie. Thanks, guys. Appreciate it. Thank you. Your next question comes from Rohan Gallagher with Jarden Group. Please go ahead. Hi, Vik. It's... Good morning, everybody. You, you must be almost finished, so, you're almost there, mate. Hey, one question for clarity. I think everyone's tried to sort of ask the question about 53 times, and it's not volume related. Can I just confirm whether any of your segments were in losses in FY 2023, and the way you're planning on running this business on a go-forward basis, do you believe all segments can be profitable across the portfolio? 100%. 100%. They should be, they must be, they will be profitable. Yes. In FY 23, the status is? Yeah, they, they are profitable. I mean, you know, everybody made money, everybody was profitable. Obviously, prior to me starting, the allocations was sitting in center and all, but I won't bore you with the detail. The simple question is, they all made money, and they will all make money. Okay. Thank you. The second question in regards to the guidance, obviously recognizing the lumpy nature of property profits. Can you sort of unpack any assumptions associated with property profits as part of your outlook statement relative to FY 23, et cetera? No, nothing material on property in FY 24 months. If we do, do any property deal, if, and I'm saying if, board has resolved that it'll go under significant items anyway, so we can clearly show you. Our aim here, that's I'm glad you kind of pointed that out, Matt. It is our aim here is to create a recurring revenue and cash flow coming from our property strategy. Selling properties short term is not our strategy. If it happens, that'll be significant because that does not help the business. I mean, it helps the business, but doesn't necessarily help the long-term earnings. It'll take some time, but I'm very confident over the next couple of years you will see that come through. Then we'll have a long-term recurring revenue as for this segment. Yeah. No, this in our earning guidance for next year is pretty clean. All right. There will be a modest recurring property profits as part of that EBIT target? We definitely don't wanna make a loss in FY 2024 on property, Matt. I think. Yeah. No, no, no. No, it's more the case of, you know, if it's AUD 10 million, AUD 20 million, that's fine. No, no, no. Whether it's a material change on last year, it's just more identifying the quality of your EBIT outlook more so than anything else. There's no material, there's no material uplift we're not expecting there. We just want it to be breakeven to positive this year. Appreciate that. Thank you very much. Thank you. That is all the time we have for questions today. I'll now hand back to Mr. Bansal for any closing remarks. Great. Thank you, operator. Listen, thank you, guys, for ladies and gentlemen, for everybody's support. Thank you for all the good questions. Makes us sharper, and look forward to seeing you on the road show. Appreciate the support. Have a good one. Thank you. Bye. That does conclude our conference for today. Thank you for participating. You may now disconnect.