Thank you for standing by, and welcome to the Boral first half 2024 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 the number one on your telephone keypad. I would now like to hand the conference over to Mr. Vik Bansal, MD and CEO. Please go ahead. Thank you, operator, and good morning, ladies and gentlemen. Vik Bansal here. Thanks for joining our call today. I'm joined by Belinda Shaw, our CFO, who will co-present with me. Also present in the room is Luke Thrum, our Head of Investor Relations. Before running through the presentation, I will encourage participants to refer to our ASX release and Appendix 4D financial statement, which was released this morning. I will also take disclaimer on slide two of this deck as read. In that case, can I ask you to please move to slide three. This slide is a good overview of Boral's presence and capabilities, especially for folks who are new to Boral. We are the largest-- Sorry, slide three. I'm gonna go to agenda. Apologies, I went to slide five. In terms of the agenda, I will run through our business and the first part of the performance overview, and then Belinda will cover cash flow and balance sheet. I will follow up with the strategy, update, including sustainability and property. We will then conclude with our... Pardon me, we've just lost connection with the speaker for this call. Please hold while we get them back on the line. Hello, are we online? Operator? Pardon me, Vik. Please go ahead. Good morning, ladies and gentlemen. Sorry about that. I understand we were at agenda slide when it got disconnected. We are on slide three, if that's okay, and we sincerely apologize for this. In terms of the agenda, I will run through our business and the first part of the performance overview, and then Belinda will cover cash flow and balance sheet. I will follow up with the strategy update, including sustainability and property. We will then conclude our outlook before opening for questions. I move on to slide five. This slide is a good overview of Boral's presence and capabilities, especially for folks who are new to Boral. Our operation reach spans 360 sites across each state and territory, and we employ around 7,500 employees and contractors. We serve almost 14,000 customers and work with close to 8,500 suppliers. We move approximately 50 million tons of product and pave circa 4,000 kilometers of road every year. We have over 3,500 heavy road vehicles moving to all states and territories and delivering product to our customers. I move to slide six. It is worthwhile appreciating that while we are an industrial construction materials company, we have six integrated but distinct asset classes. Our upstream prized infrastructure assets being quarries and cement, our downstream manufacturing units being concrete batching and asphalt plants, our contracting assets being concrete placing, asphalt laying, and spraying. A large logistics asset base, fleet that moves between our different assets, carrying about approximately 50 million tons a year. Fast-growing recycling business and assets with its related licensed sites, and are developing property assets. Optimizing each class of these assets while extracting synergies as an integrated unit is the complexity in managing Boral, but more importantly, it is the inherent value in Boral. Talking about individual assets in the network, upstream cement and quarries are very difficult to replicate and are getting harder every day. These are large investments that take many years to secure, develop and optimize, and hence provide barriers to entry. These barriers are only getting higher as quarry approvals get difficult to get every day. On top of that, newly approved assets are generally far away from population hubs of construction activities, which increases the cost of service. 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 placing network, which delivers high-performing product closest to the customer requirements. Here, customer proximity is a leverage, and vast footprint is a strength. Our asphalt business, as part of a vertical integration with Bitumen JV and quarries, remain our preferred partner on major infrastructure projects. Our degree of integration is illustrated with 50% of upstream volumes being supplied to downstream operations, which account for their 90% of material sourced. Converting this integrated network into a seamless and a simplified market offering is a, is a real competitive advantage. Moving to slide seven, industry value drivers. This slide identifies the key industry value drivers, Boral's strategic alignment with those, and an opportunity for business and earnings growth. Value drivers include building integrated networks, both upstream and downstream. Driving this customer loyalty through relationship and service delivers better value outcomes. Maintaining first-rate operational logistics capabilities is critical to optimizing the lives of our assets and helps reduce the cost per unit. This, in turn, helps with operating leverage and value capture. All assets needs to be safe, compliant, reliable, and optimized every day. This is critical for reliability, and frankly, only way if these investments are to become a competitive advantage. ESG credentials provide a license to operate while meeting the needs of all our stakeholders, for example, regulators and communities we operate in. I mentioned before that optimizing each asset class individually while extracting synergies as an integrated unit is the complexity, but, more importantly, the value driver in Boral. Doing this consistently is the secret sauce, and hence the operating model and related cadence is very critical. Boral's PMF strategy has a strong alignment with these value drivers, and from an opportunity perspective, we see significant upside in all of these areas, which is what we plan to execute. I move on to performance overview section, starting with safety on slide nine. Like most industrial businesses, safety is our highest priority. In first half of 2024, our TRIFR performance was 4.1, a good improvement on recent periods, and that is across the board through medical injury frequency rate as well as lost time injury frequency rate. We're achieving this through the simplification of safety discussions and metrics, combined with accountability, engagement, and ownership at all levels. We are also working on our engagement and culture. We have a toolkit called Boral Way, and with tangible supporting tools, it provides our teams with clarity of purpose, direction, and accountability. Recently, we conducted an all-employee survey, which resulted in 82% participation and an engagement score of 66%. The survey gave us the baseline and a very encouraging insight. We are committed to keep working on our employee engagement, and our immediate focus, based on feedback, is on organizational alignment, change management, supporting professional development, and career growth for our people. Moving on to first half 2024 financial highlights on page 10. To avoid repetition, I will cover the financial details on the next slide, but I do wish to make two points here: operating leverage and operating model cadence. You will see clear operating leverage coming through. A 9.4% increase in revenue has led to 52% growth in EBITDA and 111% improvement on EBIT compared to the same period last year. We did see expansion on margin and improvement on return on funds employed. We have been able to achieve this improvement despite volumes being flat to slightly up and in a challenging cost environment. I previously talked about the challenges and opportunity of optimizing each part of Boral while extracting synergies. If not careful, it is easy to make company like Boral overcomplicated, while what is needed is exactly the reverse of that. I also mentioned converting this integrated network into a seamless and a simplified market offering can be really competitive advantage. This is only possible through the clarity and discipline of our operating model.... Our operating model is make, to make us decentralized but standardized while simplifying. This is critical self-help we are working every day. We have a way to go, and I have a high conviction on the value this can create for our employees, customers, and shareholders. Moving to slide 11. The financial details tell the story of improvement across all key metrics. I will focus on underlying results in my commentary in context of the competitive, competitive period of FY 2023. Starting with net revenue, as I said, this was up 9.4% to AUD 1.8 billion, with improved price and volumes. EBITDA rose 52% to AUD 314 million, enabled by volume, price, and cost abatement. EBIT was AUD 201 million, and EBIT margin was 10.9%, up 520 basis points. NPAT was up 144% to AUD 139 million, and EPS was up 147% to AUD 0.126 per share. Operating cash flow followed EBITDA and was strong, up 197% to AUD 349 million. ROFE and ROCE also improved substantially. Reconciliation from underlying to statutory is shown in the appendix. To summarize, during the period, we recognized an equity accounting loss of AUD 16.3 million on our investment in Pendrell Lakes Development Corporation. This was a one-off non-cash adjustment and the result of an impairment of an urban capitalized development cost within PLDC. Moving to slide 12. Our financial trends reflect a continued recovery from recent lows, but also give context to our results in light of Boral's performance over the medium term. All numbers are for continuing operations to allow a proper comparison of the core business. While comparing results to previous year, it is also demonstrates the improvement in both quantity and quality of earnings in first half 2024. You will note that the property is not currently contributing to our results. This perhaps gives a more defined, defined view of improvement in Boral's construction material business compared to previous years. On property, we do have a longer-term strategy to develop our surplus assets, and this is expected to generate sustained earnings in the future as projects are developed. Moving on to slide 13. Two key takeaways on this slide: market segmentation and volume story. First of all, we are comparing segmentation of first half 2024 with the full year 2023. We saw some expected movement in our segmentation with an increase in alts and adds and multi-residential and a decline in non-resi. We have seen some timetable slippages on certain infrastructure projects, leading to segmentation change compared to FY 2023, but still in line with long-term trends. We cannot emphasize enough the need for infrastructure projects to get going after reviews by government at all levels. On volume, the best comparison is to first halves of previous years. As we mentioned at the full year, we expected FY 2024 volume to be flat to slightly up. Unfortunately, that is exactly what has played out so far. Quarries, recycling, and asphalt spray were all up, while cement and asphalt lay, ex-bin were both down. Recycling continued to grow strongly with volumes of 31%. However, noting this is coming off a relatively low base. Concrete was flat. Moving on to page 14. Just for clarity, we are comparing price and cost to sequential halves to give a better understanding of the progress made. We saw price escalation across all segments in first half 2024. The level of escalation was different by segment and region, which reflects the competitive dynamics that are unique to each area. We continue to maintain a very strong focus on price discipline to recover high input cost and recover lost margin that has resulted from flat pricing over the past four to five years, impacting Boral's performance. While we saw growth of inflation slowing down, we did not see deflation. As you can see, inflationary pressures from recent years have continued, and inflated cost is the new reality. We are doing everything as part of the self-help to mitigate cost prices. We did not rely only on price, but mitigated some of the cost pressure by adjusting our cost base through overheads and improved productivity in our direct labor. Needless to say, we cannot be doing that forever, and hence my comment around price discipline not being an option. Moving over to slide 15. CapEx for the half year totaled AUD 99 million, down 5% PCP. As a percentage of revenue, CapEx was 5.4%, and as a percentage of depreciation amortization, it was 88%. This was in line with the previous expectations that we would be keeping business as usual cash CapEx below or close to depreciation and amortization. We progressed or completed several key projects during this period, including the Townsville Asphalt Plant upgrade, completion of Berrima Chlorine Bypass project, which will enable us to grow our alternate fuels for cement manufacturing and concrete plant mobilization on key infrastructure projects. We also upgraded plant and equipment across several key quarry sites and continued to invest in our mobile fleet. Our BAU CapEx also includes overburden stripping and maintenance of our assets, example, annual shutdown of Berrima, which I will talk about in a minute. We are being very disciplined with the way we are spending capital, and this will continue to continue in the second half and beyond. We will continue to develop upstream assets as part of, or parts of our opportunities and strategy. We do expect to invest circa AUD 300 million-AUD 400 million over the next four years as a catch-up CapEx, mainly in three categories. Replacement of old HME, which is costing us high through high R&M, low productivity, and low reliability. Optimizing the mix between owned versus contracted heavy road fleet. And three, upgrade development of our network, mainly upstream in quarry space. These three investments will set Boral up for cost, reliability, technology, and service for the coming decade, which will enable our growth. We believe this cash outlay will be spread over one to four years, starting in FY 2025 and in line with build times of the equipment post-orders placement. We will keep you informed, and we will show this separate from a BAU CapEx. Turning to Berrima annual shutdown on page 16. We have called out this project to give you an insight in the area where we have an annual spend around AUD 20 million per year, per annum every year. Each year, during January and February, we shut down our Berrima Cement plant and kiln for an extensive round of annual maintenance. The process typically takes three weeks to complete, with over 300 employees and contractors on site at any one time, at a cost of around AUD 1 million a day. It is a complex process that requires specialist expertise and advanced diagnostics. It is also vital for our operations and broader network, as it ensures our kiln can continue to run at a high level of OEE for the remainder of the year. The photos at the bottom of this slide shows the kiln both during and after the maintenance process, with bricks lining the inside kiln wall. This is a specialized work, and having personally seen our team in action, I have nothing but the admiration of the folks who do it every year, all the time. This is also important why CBAM is very so critical for Australia. The risk of losing this type of talent and capabilities if local manufacturing keeps coming under pressure from high carbon emitting countries remains high. CBAM is the other side of safeguard mechanism, and you can't have one and not the other. Turning to Belinda for slide 17. Thanks, Vik. Operating cash flow in the first half of 2024 was AUD 349 million, an extremely strong result and an increase of AUD 231 million when compared to the first half of 2023. The AUD 231 million increase was driven by increased earnings of AUD 107 million, and a rigorous focus on working capital management and cash conversion, which resulted in a AUD 124 million increase. The focus that the team has had on cash conversion has been across multiple areas of accounts receivable, accounts payable, and inventory. All of these efforts have resulted in multiple days out of our cash conversion cycle. Turning to the balance sheet on page 18. Our balance sheet continued to improve in the first half and is in an extremely strong position. We saw a significant increase in cash, driven by higher earnings and working capital management. Net debt at the 31st of December was AUD 84.5 million, down substantially from AUD 338 million at the 30th of June. Net debt was comprised of AUD 973 million of gross debt, including lease liabilities, offset by AUD 889 million in cash, and our net assets at that balance date were AUD 2.1 billion. I'll now hand back to Vik to provide an update on strategy on slide 19. Thanks, Belinda. On slide 19, I first introduced PEMAF in my address at the AGM back in November 2022. I will update you on the progress we have made to date and some of the key priorities. On people, we are continuing to embed our operating model, leveraging our scale with agility and increased accountability. On environment, we have a clear decarbonization pathway to execute it pragmatically. We also believe Boral will play a key role in Australia's circular economy. It represents a great opportunity for our business. On market, significant work is underway to improve our customer service and engagement. We are heavily focused on our call to cash process and maintaining a rigorous and disciplined approach to pricing. This will be a long-term and a sustained process, and we have now started that. On assets, we want safe, compliant, reliable, and optimized assets to create a truly competitive advantage. With costs elevated across repairs and maintenance, plant and equipment, we are looking closely at how we can do this better, how we can extend our asset life, and better integrate our network. We are rolling out our auto locations across metro areas. As you will see from progress arrows, we still have some way to go, but we're heading in the right direction, and I'm confident we can continue on this path. Moving to detailed environment on slide 20. We are making good progress on our decarbonization and other sustainability initiatives. Since FY 2019, we have reduced our Scope one and two emissions by approximately 10%, and we have a detailed pathway to reduce emissions further, with initiatives in energy, cementitious intensity, transport sourcing, and carbon capture and storage. Replacing coal with alternative fuels is a key opportunity for Boral and is being enabled by our chlorine bypass project at Berrima. 24% of our kiln's thermal energy was derived from alternate fuel source in FY 2023, and we expect this to grow to 30% in FY 2024. Our target is to get to 60% alternate fuels by FY 2026. We are currently finalizing a pilot carbon capture and storage plant based on mineral carbonation technology at our Berrima site. Our carbon capture and storage pilot plant is based on capturing carbon dioxide from cement manufacturing and storing them permanently in our recycled concrete and aggregate products. It is also a demonstration of accelerated decarbonization process, which we talked about last year. Boral also continues to play a major role in Australia's circular economy through its recycling business, selling more than 2 million tons of recycling C&D material in the last financial year. Moving to slide 21 on property. I spoke at our full year results about Boral's commitment to applying a fixed asset lifecycle approach to property. We're taking a deliberate and strategic approach to managing our portfolio of surplus property assets. As we have shown in the diagram, the life cycle starts in our construction materials segment, with our team securing the locations and approvals necessary to operate our integrated network. We then operate and optimize our assets to strengthen performance, profitability, and position Boral for long-term success. When it is confirmed that a site is surplus to operations, the team shifts focus to repurposing it, repurposing this asset. Underlying driver and repurpose is to ideally create a long-term recurring earnings stream for Boral. Deer Park, west of Melbourne, as a current example, it is a large site with around 450 hectares for potential development, and the Victorian State Government has identified it as a state significant industrial land. We are now working with Logos, a leading logistics specialist, pursuing potential industrial development of opportunities with the intent to deliver long-term recurring income. This is, of course, subject to planning and other conditions. We will continue to provide updates on Deer Park and our other surplus property sites as these development opportunities progress. Moving to slide 22. We are today upgrading our FY 2024 underlying EBIT guidance to AUD 330 million-AUD 350 million, which was previously AUD 300 million-AUD 330 million. This reflects a stronger weighting to our first half results, which is in line with Boral's typical seasonality. This is largely due to quieter January and Easter periods that occurred in second half. FY 2023 was a recent exception to this trend, with the introduction of the new operating model and strategy starting in first half 2023. It is expected Boral's typical seasonality, that is, first half weighting, will resume in FY 2024. Volume trends are expected to remain unchanged in FY second half 2024. We will absolutely maintain a strong discipline on pricing and cost. Assuming no significant shift in the market demand or price environment, we expect to deliver underlying earnings before interest and tax, EBIT, in the range of AUD 330 million-AUD 350 million in FY 2024. This wraps the presentation, and we will now open the lines for questions. Operator? 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 speakerphone, please pick up the handset to ask your question. In the interest of time, we ask that you please limit yourself to two questions per person. If you would like to ask further questions, please requeue. Your first question comes from Shaurya Visen from Bank of America. Please go ahead. Hey, Vik. Hey, Belinda. Good morning, and thank you for taking my questions. Vik, I had two questions for you. First, something on the near term, and second, perhaps more medium to long term. So first of all, look, congrats on another great set of results. But actually, I don't want to nitpick, but just want to get some more color on your guidance, right, for FY 2024. Now, at the upper end, your guidance sort of implies second half EBIT of AUD 150 million, versus first half of AUD 200 million. Yeah. Now, can you talk about what is driving that? I understand seasonality that you mentioned, but what is driving that steep decline? Is it, And also, when you say volumes being flat in second half 2024, are you saying that's versus first half 2024 or second half 2023? Yeah. Okay. Thank you. That's the first one. Okay, you wanna go with the second one as well? Then I'll answer both. Maybe I'll take this first. Okay, sure, sure. Sorry. So I think here's a couple of things. You know, first of all, there's a seasonality issue, Shaurya, which, you know, there's less number of working days. We've got a January, which was slow. You know, people are not turning up in January till now, 26th of January. So January is a total write-off, and then you have in April, which is Easter coming. So that's number one. Number two, last year in the second half, which was a good second half, Shaurya, we did AUD 144 million, if you remember. So we're slightly up on that. Now, our comps on half and half will get less intense if you make it there, because the last half, prices already started to go up in the second half. So what you're comping against now is the second half of last year, where volume is gonna be... We're expecting volume to be flat. Seasonality comes in. Price, we are holding up, and obviously, we have put a January price up. And of course, we are expecting that price to realize, but, you know, when you plan for these things, you take all those things into account. So from our internal perspective, we are holding price. We'll be very confident. We, you know, we'll manage our cost pretty strongly, and volume is remaining flat. Now, there are external conditions which are outside our control, and that could be how competitors react, how much dOEEs volume slow down. So you took all of that into account, and we said we are up on second half slightly, and so that's where we ended up. That's quite helpful. I just move on to the second one. Look, so just curious to get your thoughts on what you think the industry dynamics or competition will look like. And I think that, you know, given the background, that CRH has got a takeover offer for one of your key competitors, do you expect that will further improve industry pricing discipline, or that's thinking too far ahead? Well, I think- Actually. Yeah, thank you. A couple of things on that. Yes, so there are two things I wanna make a point. If you are sitting in Barro's seat, your competitive compa- from a, from a competitive landscape, keeping pricing aside, Shaurya, just park pricing aside, the amount of infrastructure, the amount of competitive landscape dOEEs not necessarily change. It's just the, now there's a new nameplate. If that acquisition is subject to that going through, there'll be a new nameplate. So from... That remains static. Now, you come to the pricing piece. I mean, to be fair, CRH is a global player. CRH is a smart player... they are driven by earnings, which is a good thing. And if you look at the global result, they have been- I mean, for any, you, you have nothing but admiration for a competitor like that. So when you have a competitor like that coming in, I can only think good thing for the industry, because that. And if you have a company which is driven by earnings for a long term, that is good for us. So that's what we trying. So I do think it's a good thing for the industry, and if it's a good thing for the industry, then it's a good thing for Boral as well. Thanks. You're very helpful. I'll jump back in with you. Thank you. Thank you. Thank you. Your next question comes from Lee Power from UBS. Please go ahead. Morning, Vic. Morning, Belinda. Morning. The first question is kind of a follow-up from Shaurya. So if I think about the top end of your, your EBIT guidance, it sounds like, from the comments you just made then, that revenues will be, up rather than down, despite the kind of the seasonality piece, given you got some pricing coming through. And so if even if you're running kind of a flat top line in the second half, the top end of guidance is only an 8.1% EBIT margin- Mm-hmm. -which is kind of in line year-on-year. I think the second half 2023 did 7.7%. Right. So I'm just trying to unpick like what else, what else is there? And is that, is that, like, am I missing anything, big there in this? No, no. You're not, no. So you're not missing anything. Look, I think, you know, as you leave, you appreciate when you're doing a guidance, you look at the set of circumstances which you see at the moment in time, right? So from our perspective, we know what we can control. But, you know, the biggest variable factor for us is the economy and the volume, right? And then if the volume is, if it remains under pressure or gOEEs further into pressure, which is what we need to be mindful of, then, from our perspective, we are absolutely committed to remaining disciplined on pricing. The expectation is with the others will remain as well. So when you do the forecasting, you look at all those things and you say, "You know what? We did 7.7, we get to 8.1." I think that's the right forecast to be done. But of course, I mean, you know, we just did double digit in first half. We love to do double digit again, but when you do a forecast, you look at all those things which are outside your control more than what is in your control. No, no, I understand. I understand. Thanks for that. And then the second question, 50% of your upstream volumes are being supplied to downstream operations. Like, my recollection was that used to be quite a bit higher. Can you just tell me if that's right or wrong? And then is there some sort of number that you would like that to get to, and the amount that you think should be flowing through your downstream business versus what you think you can realistically sell to external players? Yeah. So first of all, I don't know when it was higher, mate. I can only remember when I started, we did the works on that because I really wanted to understand this. So I'll go and I'll get the team to check on the previous number, but I think 50% was one since I've been started. So I'll check on that. Your second question is an interesting one. So I actually do believe it is a right number. Pardon me. We just lost disconnect... sorry, we're disconnected from the host again. Please stand by while we get them back on the line. Okay. Sorry about that, guys. I don't know what's going on today. Lee, so I was answering Lee's question. So it should be 50%-60% is right. And upstream assets do provide a competitive advantage. And if you are a disciplined player, which we want to be, you would make sure your transfer pricing to your downstream assets as well as outside, is at a similar level. And that's just the kind of the value of the business. So I'm okay with that, Lee, and I think that's the way we want to deal with it. Thank you. Thank you. Thank you. Oh- The next question comes from Simon Thackray from Jefferies. From Jefferies, please go ahead. Oh, morning, Vic. Morning, Belinda. Just a question on quarries' excellent performance, obviously, in quarries. You've referenced it before, Vic, you know, in terms of offshore operators. And if I take Martin Marietta or Vulcan and their margins in aggregates versus, you know, clearly margins for you guys, which are substantially lower, do you believe that that... You know, how will that value be unlocked? Do you think there are any local or structural reasons that stop you from getting towards those margins over time in Australia, in quarries? Yeah. Yeah. Operator, there's an echo coming. Simon, can you hear me well? Yes, on and off. Try, just try again, Vik. Okay. I'll repeat again. Hopefully, you can hear me. Yes, sir. Yeah, thank you. So when you compare yourself with the world's best players, and I think you mentioned a couple of those names, they are in high single digit. You are absolutely spot on. There are two things here. One, as you know well, and a lot of people on the call know, the whole construction industry in Australia has been, for a long term, driven by volume rather than driven by value. And that is obviously changing, and we obviously wanna make sure from our perspective, we focus on value as well as the, you know, value and volume. Now, that obviously changes the profitability profile, and that's number one. Number two, when you compare those companies, it is really important to compare the mix. So in Boral's case, our downstream business has a higher revenue base compared to the upstream businesses. Some of these organizations which you mentioned, Simon, and worthwhile doing the work because we have, you will see they're about 70%-80% upstream, and they're 20%-30% downstream because they either use a, as you know, in America, they use a de-franchising model for downstream. So there's a, that's a strategic question for us, but not for today. But the question for us is, if you take that out, there's an opportunity for us to get somewhere between where we are today and where they are, and then there's a whole structural issue in the market, how all the players go to the market, whether directly owning or through the franchise. But keeping that aside, keeping that aside, that's what we've done. Okay. Sorry, just dropped in and out a little bit there at the end. Thanks, Vik. That's helpful. Just looking at the building industry, we're putting aside infrastructure and engineering just for a second. The building industry's obviously clearly still got some indigestion at the moment at the plan that's been built over the last few years, and we're seeing a notable absence of builders prepared to take on, for example, you know, private high-rise, multi-family work, and they're opting for better-margin social infrastructure projects with, you know, with government, where it's safer and payment is more reliable. Can you, if you can, I know you've always said you're agnostic to end markets and exposures, but can you just talk to your final sort of customer exposure between what's government and what's private at this stage? Yeah. So there is a... Operator, there's an echo coming. Simon, can you hear me well now? Yes, I can. I can, Vik. Okay, thank you. So if you look on slide 13, on the left-hand side actually shows a market segmentation, right? So you'll see that infrastructure, resi, non-resi, et cetera. And our social infrastructure can come under either commercial or resi. But your question is, I think what I heard, understood your question and all this disturbance was that, we do see. I am bullish about the volume coming in in medium to long term because the macro factors will drive those. There's a definite shortage of social infrastructure, there's a shortage of resi market, there's an infrastructure pipeline, which even after government having looked at it, it has been approved, but it's taking a long time. So we are, I've always called it, always said FY 2024 will be an air pocket. How long this air pocket lasts, I just can't tell you, but all macro signs are this is coming. So we—and you're right—we will be exposed to all of the different segments, of course, yeah? So. That's great, Vik. Thanks, Vik. Thanks, Belinda. Thank you. Your next question comes from Lissa Hein, from JP Morgan. Please go ahead. Hi. Morning, team. Hi. I just guess, I had a question around the cost inflation outlook for the rest of the year. I guess just particularly in the context of procurement, the hedging efforts, and particularly for energy, just given that's been a bit more volatile and a drag in the past, it just looks like based on forward pricing, that that's now coming off. Yeah. So just on hedging and commodities, a couple of things, Lisa, on that front. So obviously, you're spot on. We are hedging now. The policy of unhedging is gone. Now, the, the hedging, one thing is a fascinating thing is the so we had to decide in an organization and ask, what is the fundamental principle we are doing hedging for? And the principle reason you do hedging for, as we now buy, is to take out the volatility in your P&L. But so that, that's a starting point, and then you give instruction to your commodities team to go and hedge based on as far as what they can see. The problem then happens is, if the commodities are very volatile and you are seeing a price of, say, coal or electricity starting the year in a particular forward-looking curve, and you hedge it, and then, of course, that gives you security in your P&L, which we have now, but you could end up with small hedging losses because, prices move totally in a different direction what the forward curve was showing nine months. So that is all in... By the way, all our hedging losses are included in the energy pricing, so we've taken into account all of that stuff. So you can see that is flat, right now, but we are absolutely hedging to 50%-80% to make sure, we kind of want to remain on top of that. Yeah, that's great color, Vik. And I guess just a question around the balance sheet, now that the business has stabilized. I'd just be interested in your thoughts around the approach to the balance sheet and how you might deploy some of that excess capital. Yeah. So a couple of things here. If you notice on slides 15, I do talk about what I call a catch-up CapEx over the next four to five years. So we'll remain very disciplined about both BAU CapEx and catch-up CapEx. That will sit on top of that, and that will set up us for long term. So there's money to be spent on getting our heavy mobile equipment right. You know, we have a mix of owner-drivers and third-party vendors running our road vehicles, so we're gonna absolutely look at that, we got to get that mix right. The third one is we obviously, we always said we will work, continue to work on our network and upstream assets and quarries and all that stuff. And that, you will see that come through as well. There's a whole digital piece going around auto allocations. So basically, we believe we can generate our own cash, which the earnings should, and then using that cash properly with discipline and structure is gonna be critical, and that's what we're trying to do. Belinda, anything you want to add? Yeah, the only other thing I was gonna add is just remember our franking account balance is quite low at this point in time. But we will look to pay cash, you know, cash tax later this year, and that franking account balance then will go up in order for us to consider and think through the dividend piece of that, too. Subject to board, of course. Subject to board, obviously. Yeah. Great. Thanks, guys. Over there. Thank you. As a reminder, if you're on a handset, please pick up the handset to ask your question and take yourself off of speaker. Your next question comes from Peter Stein from Macquarie. Please go ahead. Hi, Vic and Belinda. Thanks very much for your time. Very quickly, Vic, just on some of the delays you've seen in the infrastructure space, around the flow of work, could you give us a sense of what visibility you have of an improvement there? And you were fairly forthright with your, your comments in, in the prepared remarks about some of the concerns you have. Just, just keen to get your, your sense at a deeper level of what you're seeing. Yeah. So when we talk to our big customers, Pete, who are involved in the infrastructure space, they all have a pipeline which looks healthy and good pipeline. The problem we are facing now is, it's—they're not necessarily on hold, but it's just taking a long time to get through the system or whatever the system you want to call it, right? So as you appreciate the fact there, you know, there was change of government in multiple states, and then obviously at the federal level, I do understand that they wanted to look at all these spent commitments. I get all that stuff, and it's respectable, I understand that. But subsequently, that it all just seem to have slowed down. So everybody knows they are coming, everybody knows they can see the pipeline, people are tendering, but it's just frustratingly slow. So that's the point I was trying to make. So, you know, if, if you know it's not coming, then, yeah, you can actually redefine your business accordingly. You can say, "Okay, it's not coming, so we know that. We can work it out, and we can work on our cost or whatever it is." When you know it's coming, you then it's quite frustrating because sitting in a limbo, knowing it'll come at some point, and so what actions you take? So I think that's the remark which I made around, and that's... And then on top of that, you got resi, which we all know coming, you know, there's Olympics, which is coming, there's a social infrastructure, which Simon talked about before, is coming. So we know those things are happening. It just from our perspective, it will be good to get them going so we can phase out our cost and commitment and CapEx over a long period of time as the business, as the construction flows through. So that's, that's the point. Is this materially enough to be raising concerns for you from a performance perspective in the short term? Well, I mean, the fact that we are flat on volume is a concern, right, Peter? Like, and this is what I said before, is that we, we've done, we've done everything on our part. We're, we're doing on our cost. We'll continue to manage costs as part of industrial businesses. You know, we're doing things on price, but, but the magic in business is when you get all three going. That's where the operating leverage happens. That's the magic we want, and that's, that's good for the economy, good for our employees, good for the shareholders, good for the communities. It's all around good stuff. You know, we create jobs. And so that magic with all three pillars coming is what we are hoping to get, and we are doing everything possible, what we can control, and expecting some support from the people who can do the others for us. Perfect. Certainly looks like you've been doing a fantastic job thus far, so, well done to the team. Thank you. Thank you, Peter. Thank you. Our next question comes from Brook Campbell-Crawford, from Barrenjoey. Please go ahead. Yes, thanks for taking my question. Just around slide 14 and the price increases, and I appreciate these are sequential, but the quarry price increases are pretty consistently stronger than concrete, for example. So just wondering if this is driving your earnings mix more towards your quarry business versus your concrete business. Is that sort of a deliberate approach, or something else driving that? And would you expect those trends to continue with quarry pricing outperforming concrete? Thanks. Yeah, thank you. Good question. Just on that, I, I do wanna make a point, and, and then I, I hope I'm able to kind of weave it for us effectively, but a couple of things. One, you all know how hard it is to get a quarry. There is. It takes 10 years time to even replicate a quarry. They are moving away and away from where the production or the construction sites are, or the population is. So there's a cost going up. So there's a very high barrier to entry. And I think we, as a company, and our board shape, we as an industry, need to be mindful of the fact that the replicate of every ton we sell should be... Like, the point is, every ton we sell today, it has to match what it will cost to replicate that if we get from new. And I think for too long, we have given what I call jewel in the crown too cheaply in the marketplace, knowing very well that the barriers are going up every single day, and we are living with it. Whether it's an approval for any for even a noise wall. Like, seriously, look, everything barriers are high. So we need to. This is an asset with a limited life. These are assets with a high barrier to entry, and they need to be priced accordingly. They cannot be taken for granted. So that's the driving force, and that's what we're looking at, and that's what we want to do, because this is a limited resource. So that's what you're seeing, what you're saying. Yeah, understood. Thanks. And just one on Deer Park. So just looking at your slide there, 450 hectares of land. Can you provide some more color there on perhaps how long it would take to develop? And I guess at this very, very early stage, are you able to provide some sort of indication on what recurring earnings could be from that side? Thanks. Yeah, too early to provide earnings or cash flow on that, unfortunately, Matt, but these are long-term things. As you know, I was talking about planning delays and all that stuff. So this still needs to go through. There are some conditions we are going to work through with Logos on that and with other parties on that. So we'll keep you informed, but pretty excited about this project. It's a big project. You know, this site, 17 km's, or I think 20 km's, with Melbourne CBD, a large industrial hub, close to rail network, so close to population and the railway station. So it's quite a valuable hub for us and quite a exciting project for Boral. So we'll keep you informed, but too early to give you any extra financial detail on that. Understood. Thanks. Thank you. Our next question comes from, Keith Chau from MST Marquee. Apologies, please go ahead. Good morning. Morning, Belinda. Great results. Thanks for taking my questions. So the first one is just on the realization of double-digit margins. So, you know, a year ago, we were all sitting here asking ourselves when or if Boral could get to double-digit margins. You know, and at the time, the discussion was whether it was going to be FY 2025 or FY 2026. You've hit it in the first half of FY 2024, and PMF is only, call it, halfway through. So, you know, if we forget price and volumes for a second and just assume they remain constant as a hypothetical going forward- Yeah. If you were to deliver the remaining benefits from PEMAF, what's the potential uplift from your internal strategy to margins? Yeah. So, thank you. Thank you. Good question, Keith. So a couple of things, mate, is, one, you get the number at the start, you get the EBIT margin today. The idea here, and I just want to be very clear, we are not there, where we can say, I can put hand on heart and can tell you that this business is a systemized double-digit EBIT business through the cycle. Right? So our job as a management team and through PMF, what you're seeing, the gap between where we are today and we need to get to, is that we can produce consistently double-digit numbers through the cycle, whether it's a low volume cycle or high price cycle. That is what good looks like, right? And that is the gap. Now, whether it's 10%, Keith, or 12% or 15%, obviously, you know, we'll keep driving that as far as we practically can and without compromising our strategic, long-term view. But we're not there as yet. So I want... While we're happy, and thanks for the compliment, we are there on the first half. I can't put hand on heart and say, this is a consistent double-digit business, so that's the work still needs to be done. Okay, maybe if I put the question another way. So your domestic peers, you know, at a guess, are probably operating at closer to mid-single-digit margins. Is there anything precluding Boral from doing the same? Is there anything structural within the businesses, the differential between yourselves and your peers that, you know, may prohibit that from happening? Do you mean mid, mid double digits? Is that what you're saying? No, sorry, is- Mid-teens. Call it- Mid-teens. I'm just putting a range of numbers out there, but like, say, 13-15. Got it. Got it. Got it. Mate, listen, I mean, I've always believed, whatever, whatever business I've run, is that if somebody else can do it, then so can we. So I don't know what their actual numbers are. But I mean, you know, we could, we do look at international players globally. We look at their mix. We know what that looks like. But I won't put a number out there, of course, as you can appreciate, mate, but, but my faith is, if somebody else can do it, so can Boral. Okay, excellent. Thanks, mate. Thank you. Our next question comes from Daniel Kang, from CLSA. Please go ahead. Morning, Keith. Morning, Belinda. Congrats to the team on a strong performance. Just a couple of questions from me. Firstly, I just wanted to extend the discussion on costs on slide 14. Yeah. I just want to hone in on energy, Dan. Yeah. So, if I look at spot prices on some of the key items like coal, diesel, electricity, notwithstanding the hedging that you spoke about, is there any reason why we shouldn't expect to see energy deflation coming through over the coming periods? Well, not as per the forward curves our people are looking at, Daniel. So... But of course, if it happens, great. But obviously, when we do hedge, we do look at next couple of quarters, and we actually just did a commodity review, full review a couple of days ago. We would love to get it down, but can't, don't have enough kind of confidence at this point it'll come down. It is very volatile out there, Daniel. I mean, electricity moves. Look at diesel prices. Coal started somehow finished back up there. So I won't - too early for me to say. Too early for me to say. ... the volatility go. And just on the topic of volume on slide 13. Yeah. So overall, the group is flat to up, but we can see some slippage in cement and concrete. Can you just elaborate on the factors driving this, or dOEEs it reflect more the value versus volume strategy that is playing out here? Well, first of all, it's not a slippage in concrete. Concrete is, I mean, it shows flat, but in actual sense it is slightly up, but let's call it flat. The cement is a separate issue. There's a couple of things going on in cement, is that one, we have a joint venture in Queensland, and there was some hiccup there, which has probably resulted to that. But fundamentally, the narrative which we are confident of, this is flat to up, and that's what we are looking at for second half as well. Asphalt lay is directly related to some of the projects getting delayed, which is the infrastructure projects. But you see the asphalt scraping up, because that's where the regional councils are doing a bit of work now, rather than the big projects. So what is reflective, what you're seeing here, is a market segment rather than us. This is not. We are not going back to unit dimensional go-to market. So as you know, in past, Boral was volume at all cost. We are not going price at all cost. This is, everybody in Boral knows, we talk about its volume and price story, not volume or price story. And so what you're seeing is a reflection of the market, nothing more. It is not one or the other, mate. Excellent, Vik. Thank you. Thank you. Thank you. Your next question comes from Joseph House, from Bell Potter Securities. Please go ahead. Hi, Vik and Belinda. Congrats on putting out a great result update, and thanks for taking my questions. I've got two. Firstly, I'm keen to get a better understanding of some of the productivity benefits and operational efficiencies during the half that led you to improve your margins. Are you able to provide some examples of these operational efficiencies? Yeah, I mean, you know, we are looking at stuff like, you know, obviously, we talked about auto allocation aside. You know, interestingly, we decentralized our customer service center, and we actually got a less headcount, with the headcount reduced. You know, we are looking at flattening management layers. We are looking at the operating model efficiency. We are looking at standardizing of organization structure. We're looking at OEEs at the site. We're looking at maintenance at our sites. So every single P&L item, Joseph, in a line, is up for debate and up for checking, and we do that every month, and we're gonna carry on doing that, right? So that is an absolute. Do you wanna add something to that, Belinda? The only thing I was gonna add is we also have extensive reporting on all of these metrics- Correct. that we look at, and the team looks at it every single month. We do as well when they report up to us. So extensive metrics, extensive reporting, and thorough review of all of them. Correct. So every line item is up for question, debate, and accountability. That's how we're looking at it. Great, understood. And secondly, you've noted your focus on improving customers' experience to assisting volume retention. Just keen to get an understanding of what the initiatives that you've implemented to improve that customer experience. And, you know, have you seen an improvement in the default measurement? Yes, it's a good question, so thank you for giving me a chance to talk about that. You know, we talked about volume, price, cost equation before. I absolutely believe the customer service can lead to a better volume situation while keeping price up, because people and customers will pay us premium if we service them on time. Imagine a situation where a builder is standing at a site and with all his or her crew, and our trucks take longer to deliver. I mean, if you can confirm that to that customer that we can deliver on time, we know we will get premium. So I'm very, very passionate about call to cash process. In our call to cash process, there are multiple moments of truth. One is when customer calls in, calls to business, so we measure that as grade of service. Then we have a whole bunch of technical stuff where our people decide and work with the customer, what kind of mix they want. The second moment of truth. The third moment of truth is when the customer gets delivered, which is your default measure. The fourth is when there's a dispute or we haven't invoiced them properly, and that is another moment of truth. The fifth is when we collect. Are we collecting it right? Are we collecting it on time, or are we being nuisance? There are five, six moments of truth in our business, and we are abs- I am personally, and we are absolutely committed to fixing each of that moment of truth, so default being just one of those. So what is happening is, we are doing auto allocation in metro areas, and where we have put auto allocations in metro, we can see the improvement in default. We are seeing an improvement in grade of service. We are seeing an improvement in disputes. Now, is it there where we want to be? Absolutely not. Absolutely not. So right now, improvements are happening because of we are putting measure and sunlight on an issue which has been sitting there for a long time. What I was telling somebody, but I think Keith asked the question before: What will make us happy is when we can systemize it. So then, so we don't have to worry about it, it happens automatically. That's where we are not there, but right now we are putting a lot of sunlight on that. Our default has improved, to answer your question, Joseph, but it's not systemized, which is where we want to go. That's really clear. Thank you very much. Thank you. Your next question comes from Rohan Gallagher, from Jarden Group. Please go ahead. Hey, Vik. Hey, Belinda. Good morning, everyone. Just, most questions have been already covered, so, a couple of quick ones. Strategically, with the proposed ownership changes at Adelaide Brighton, and assuming that gOEEs through, what happens with the Sunstate JV you have, Vik? I mean, we carry on with it. Of course, we obviously haven't had a discussion. There's a lot of hypotheticals here. I mean, we love Sunstate, and I'm sure they have a similar type of liking for that asset. It's a great asset. We're glad we are part of it. So, I mean, there has been no discussion, and there will be none whatsoever at this point. We'll talk to them when the whole thing gets through, and we'll have a chat with them. But we are very committed to Sunstate as Barro. Fantastic. And, costs, I think it was Lisa, and Keith may have touched on it earlier, but fantastic job on cost management, with, you know, things like, labour costs flat, despite, you know, EBAs and wage cost inflation. How much of that is natural attrition, and how much of that is sustained? So, for example, we're seeing a CapEx catch-up program. Will we see that in the cost situation going forward? No, I don't think so. No, no, no. This is the labour overhead is part of that operating model work we talked about, so I'm very confident once we systemize that, you will not see a catch-up overhead. You should not see it. You should see a labour increase, of course, if the volume gOEEs up and all that stuff. But no, not at all. This is not... We're not doing a one-off things here. We are fundamentally trying to change the operating model. I mean, we have a lot of discussion in the business about fixing the established charts in the system, which fundamentally means that we change the system and process, so you know, so the moment we look other way, it dOEEsn't come back again. Just to give you assurance, that's what we're working on, that one, yeah. Thanks, Vic. And, Belinda, just a quick one, just for more clarity than anything else. I noticed that, CapEx has been below D&A, and then, Vic, you spoke about, you know, the AUD 300 million-AUD 400 million of catch-up CapEx spend over the next three to four years. Can you just clarify where you see the stay in business CapEx sitting relative to depreciation, and then, presumably, we're adding AUD 100 million of, of catch-up after that? Yeah. Is that right? That's right. So stay in business, we'll continue with what we've previously said, 100% of depreciation and amortization, and then the catch-up CapEx is in addition to that. Fantastic. Thank you. Thank you. Your next question comes from Sam Seow, from Citi. Please go ahead. Morning, all. Congrats on the results. Just a quick question on quarry growth there. It looks particularly strong, I guess, compared to kind of the sales and concrete and other divisions. Just, I guess, wanted to understand some of the drivers there, the relative outperformance, in particularly on the volume side, because I guess it's, you know, you've made some comments already on the price and the quality of the assets. Yeah, I think there is a couple of things. I mean, I don't want to understate that, but it's only up by 2%, so it's by these standards, I would call it within a flat category, if that's okay. But, I think it depends on, you see the asphalt spray being up as well, so, you would see a, we would see an increase on a road-based product. So it depends on which segment we are supplying to. And that's what is coming through, probably. But, I mean, as I said, you know, our upstream assets are really high-quality infrastructure-type assets, and we are very, in my mind, I'm very protective of those. We don't give it away cheap, and I'm making sure we get the right value for the right type of assets. So, that's where we are focused, and we expect to remain so. Thanks. Just quickly following on from that. I mean, currently, I mean, I appreciate some of your comments around the margin opportunities, but just currently, how should we think about the relative differential between, I guess, quarries' margins versus the rest of your business? Well, it's a good question. I mean, very straightforward. Your upstream assets, considering the high barrier of entry and the capital employed, they should be absolutely. We don't obviously show you individual earnings and individual EBIT margins for each one of them, but they should be relatively paying you much, much higher margin than downstream assets. And that is, you know, all our internal budgets are around that, and that's what they deliver. Our upstream assets are delivering or should deliver, and they are delivering what an upstream infrastructure asset should be delivering, both on returns and EBIT, and that's our expectations. Could you perhaps give us some context, maybe if it's, you know, 1x or 2x greater than some of your downstream businesses? Well, I can't, but we are in line with what you would see good practices. Okay. Thanks, guys, appreciate it. Thank you. Thank you. That dOEEs conclude our question session. I'll now hand it back to Mr. Bansal for closing remarks. Thank you. Thank you, operator. Sorry for all the technical hiccups we have. I don't know where that is coming from, but thank you for your patience, and we generally look forward to meeting you one-on-one during the result roadshow. Thank you for your support. Much appreciated. Thank you. That dOEEs conclude our conference for today. Thank you for participating. You may now disconnect.