Thank you. Welcome everybody, I'd now like to present the first half year results for Vulcan. First of all, let's turn to the performance highlights page. You'll see the revenue of NZD 638 million compares to NZD 463 million equivalently in FY22. I think the key element there is we've obviously got higher product pricing driven by international price and obviously the exchange rate deterioration from New Zealand and Australia. Secondly, we've got Aluminum. Aluminum is 5 months of that result. The underlying run rate is actually higher than the NZD 638 million. In addition, just to highlight the EBITDA of NZD 115 million, that compares to NZD 118 million in the prior period. Our profit after tax of NZD 54 million, and that compares to NZD 70 million underlying NPAT in the prior period. We achieved sales with over 11,940 customers. That excludes Aluminium, but it indicates that we've maintained those customer numbers, and we've actually grown fractionally by 1%. An interim dividend of NZD 0.245 is to be paid. If I go to the next page, what you'll see there is that the metals and steel divisions are now approximately equal in size. With the addition of Aluminium, we've now got much increased diversity in both products, geography and market segments we can access. Of course, Aluminium and metals, they obviously can cross-sell as they can with steel. We're pleased to see a more balanced and more diverse portfolio emerging. If I go to the next page, it sort of illustrates what I'm talking about here in terms of diversification and geographic spread. There's now 72 sites across Australasia. For example, Darwin, Cairns, Tasmania, multiple sites we are just in Aluminium. That presents us with the opportunity of expanding our other products into those regions. It gives us a beachhead. It also gives us access to a wider geographic spread. Key element here has got 1,440 employees, 12,000 active accounts, excluding Aluminium, as I indicated earlier. The 1,440 employees, that is on the base that we're still in the process of. We've completed the process of analyzing and understanding how to improve the Ullrich business, and we will progressively implement that in the coming calendar year. If I go to the next slide, it's our traditional growth strategy update. You can see brownfields expansion's all about calling on new clients, winning new business and existing products. It's also about entering new geographies. We've expanded to 10 regional markets through greenfields and initiatives across Australasia, and we've identified other areas we can improve our footprint. We've also talked historically about expanding our product range, and we've done that, you know, in the last seven years in stainless, then engineering, and now we've done it in Aluminum. The Aluminum acquisition was completed and the first trading month was August 2022. It's very early, but we're very pleased with progress to date. I'd also like to call out the fact that 11 of our 17 growth initiatives previously identified are now in revenue generation phase. As you no doubt appreciate, you start something initially it doesn't make you money for the first few months, then it progressively gains steam and you obviously make money down the track. We're in that phase where we're starting to get some of those moving. I'd also just like to highlight that Vulcan was proud to achieve the Deloitte Company of the Year award in New Zealand, which represent the outstanding contribution of our employees to the value creation of the company. With regard Aluminium business integration, we're very pleased with the progress to date. As we indicated when we purchased Ullrich Aluminum, we had a great relationship with the Ullrich family, and Gilbert was very, very helpful in terms of the process of making sure it was an orderly transition. We're working hard on transitioning to our business culture. We've got dedicated teams of leaders working with the Ullrich team, getting them to understand where the opportunities are, where the improvements are, also where there's cross-selling opportunities where we can expand. Also how and why and what our culture stands for and the performance standards, the inventory management skills that are needed, a whole variety of improvements that have been identified in that area. The progress to date is that we've got the IT system operating in New Zealand. That went seamlessly, very smooth transition. In Australia, we're planning on implementing it in Easter, and we'll be fully live across the whole company by Easter. The only caveat I'd have on the Easter go live is we're relying on some outside suppliers, so they've got to perform and deliver. We absolutely believe we'll be well and truly up and running by June 30. I think the key element about this is that we remain confident that the synergy benefits we've identified, NZD 10 million, are well in hand and will continually improve this business over the coming few years. In terms of health and safety, big focus on that. They have provided the outlier number that's increased slightly on that LTI. But the underlying improvement in the business is real and we're continuing to focus on that. We're doubling down on that. In turn, we're working very hard with the Ullrich team to make sure the Aluminum safety standard's up to play as well. We believe it is. We believe it's well run in that regard. With regards to the environment, we're progressively moving to hybrid cars. We're working hard with our key suppliers. We've got a genuine commitment to a greener future for the world. We're very confident that that will pay dividends over the long term. If I look at the operating backdrop in the first half year, it's been a very strange period. As we indicated back in August, we saw New Zealand as being quite an uncertain environment with a likely reduction in demand. That was the case. As you saw, you know, inflation was a lot higher than people understood at one point, and then you've seen a rapid escalation in interest rates, and that's created a real knock-on effect with business confidence and the like. It's certainly been a challenging economic environment in both New Zealand and Australia, but particularly New Zealand. Weather-related activity has been disruptive, particularly in New South Wales and Auckland recently. We believe those weather-related activities just delay demand. Demand will actually occur, it'll just be at a later date and possibly into the new financial year. We've seen a lot of destocking activity. Effectively, what was happening right across the supply chain, people were worried about supply and were overstocking and carrying more stock, so some of our clients had stocks. They've now destocked or are in the process of destocking, and in turn, our supply chain partners, our mills, they started to catch up. Orders we were expecting to take 3 to 4 months arrived early. We've effectively, there's been a real catch-up in demand, the underlying demand is probably returning to the underlying real number. There was a bit of a false element of demand during that COVID period with extremely low interest rates. The strong dollar, and New Zealand dollar against the US dollar since October 2022, but in that period, the dollar has been weaker than the prior year, so the product prices have reflected that. Inflation pressure on operating costs has been very high in both countries. Labor costs, fuel costs, you know, we run a large trucking fleet. There's numerous costs across the board that have gone up. In terms of global sector indicators, the Ukraine War and China being a bit harsh lockdown until recently has certainly reduced the demand. The demand for global steel has reduced and lowered again. Aluminium we expect to grow at 3% in the medium term, and that reflects the fact that Aluminium is very much a key product for greening the world economy. We expect that to continue. Short-term production declines in Aluminium and steel reflect the fact, you know, China and the Ukraine War has subdued short-term demand. With regard to the underlying drivers of some of these product costs, hot-rolled coil fell 20% in the first half of 2023 compared to the second half of 2022. Quite a significant drop, one of the larger drops we've seen for some time. It's recovered 7% since December. This is a reflection, no doubt, of China coming out of lockdown. The outlook there on that price, hard to read. Clearly if China comes out strongly and recent news, Europe is coming back a bit more strongly, you could easily see that product price improve further. There's a similar trend in Aluminium which came off a high, down by 14% and it's recovered somewhat. It's still at a higher level, as is steel, than the historic averages, principally because of the cost of energy, freight, et cetera. Nickel price is an interesting one, as is molybdenum. Molybdenum is a key product used for 316 stainless. Both those product prices are very, very high. They haven't been fully recovered by the stainless steel mills. We anticipate those stainless steel mills in due course to recover those true costs. We believe they haven't done that to date simply because of the absolutely shocking demand in China through the lockdown. As China comes out of the lockdown, it's highly likely that stainless pricing will recover those true costs. In terms of Australia and New Zealand economic trends, a lot of commentary in both countries. The key surveys in Australia indicate forward orders are still positive on a declining trend, but positive. We're nervous about Australia, but we see it as the demand being maintained. Whereas in New Zealand, it's a very hard-to-predict outlook. We've got the own activity outlook, very negative, as negative as it's been since COVID. You're starting to see a lot of anecdotal feedback about a rapid slowdown occurring, particularly in building and construction. We're quite nervous about the outlook of New Zealand. It may not be as bad as people think, but on the other hand, there could be quite a sharp correction. It's very difficult to predict. As I've indicated, building activity, very hard to predict in both countries at this point. We believe that we need to have a cautious outlook and we're applying a lens of being very, very cautious and judging results as they come forward. I'd now like to hand over to Kai-Yu to go through the group financial performance. Thank you, Rhys. Good morning to everyone. At a high level, when you take Aluminium contribution out, which accounted for about 5 months in the first half of the financial year, underlying revenue was 9% higher. The composition was simply a 28% increase in terms of average revenue per ton achieved, year-on-year basis, whilst volume declined by 15%. As Rhys mentioned earlier on, underlying active trading accounts, which is a proxy in terms of how we view our market share position to be, has improved slightly in this first half of financial year '23 compared with financial year 2022. Overall gross profit per ton, when you do back out the contribution from Aluminium, which obviously increased the favorability of our revenue mix, the overall number in terms of dollar-per-ton margin was actually quite robust, which is a in the context of the current trading environment, quite a strong achievement in our view. As a result of that, the EBITDA margin was down slightly. EBITDA was down slightly at NZD 115 million compared with NZD 118 million. If you again back out the contribution from Aluminium of NZD 23 million, our underlying business, steel and other metals, segment accounted for about NZD 79 million compared with last year of NZD 118 million. Return on capital employed as a result of higher working capital requirement, declined to 24%, compared with 36% in the corresponding period. Turning on to key drivers of EBITDA change, three things I would like to call out from this chart. One is the volume factor that had reduced our overall EBITDA by NZD 29 million, offset by better margin per ton outcome of NZD 14 million on a year-on-year basis. As I mentioned earlier on, the contribution from the five months in following our acquisition of our aluminum business contributed NZD 23 million in the first half. Turning to the segmentals, steel. The key comment here in this table is that gross profit of the ton was steady, compared with this time last year. As I mentioned, this is probably one of the more challenging segment of the market that we face both across Australia and New Zealand for the reasons that Rhys had outlined earlier on. In the metal segment, overall EBITDA excluding aluminum was steady, with better margin offsetting the impact of lower volume. Just wanting to highlight to you that, post the integration completion of our integration for aluminum business into the metal segment, we will no longer be in a position to provide separate disclosure of aluminum, and will be incorporated into our metal segment discussion going forward. Due to the fact that the hybrid site will increasingly... hybrid model that we have will increasingly makes it more challenging and difficult to dissect the operating costs across various parts of the business for a given location. As Rhys mentioned earlier on, our OpEx was up NZD 11 million on a year-on-year basis when excluding the impact of our acquisition of our Aluminium business. The key again is underlying inflation. That has been quite broad-based in terms of impact on our business across not just headcount, but also all the external services and product that we buy. That's obviously not not relating to raw material. Integration costs, just to provide some update for you. At the time we made the acquisition, we had indicated that the integration cost in total may end up approximately about NZD 5 million. In the first half of the current financial year, we had expense about one and a half million dollars. As we indicated around the changes in average price or cost per ton of raw material that we source, that's effectively increased the working capital requirement that we did have in financial year 2022, and that level of working capital requirement because of timing of payment for the stock and also timing of arrival of stock, have basically boosted the working capital requirement that we needed. We do expect that working capital requirement to start to come off in the current financial year and going into financial year 2024 as well. Turning to our balance sheet and dividend. As Rhys mentioned earlier on, we have declared twenty-four and a half cents of dividend per share for our first half of financial 2023. As you can see from those charts and tables, our balance sheet financially remains in a very strong position to continue to support our future growth opportunities. I'd like now to turn it back to Rhys for concluding comments on outlook and guidance. Thanks, Kai-Yu. In terms of outlook, as I've indicated, we've got a very uncertain outlook in Australia and New Zealand. We're anticipating no real material improvement in demand in the existing environment. Our current monetary policy settings, economic conditions are likely to remain fluid and uncertain in the near term. We are holding our position that we believe that the current demand is likely to stay where it is or possibly decline fractionally. In terms of our margin performance, we're encouraged by that. We've managed to improve our margins and we've got an unusual situation where there's a lot of uncertainty about what China's going to do. If China comes back strongly, they could have a positive impact on our pricing. We're not assuming that, we'll just wait to see what happens there. That's more likely to impact in the middle to later part of this calendar year. The ongoing inflation battle, wage, and employment cost pressure, fuel cost pressure and general inflationary pressures remain. We're very conscious of that, and there's gonna be a huge effort across the board to maintain and reduce our cost base. Clearly we, with our restructuring plans at Ullrich, we've got a number of opportunities to access there, which we'll work on in coming months. Overall in Aluminium, we've been extremely encouraged by progress to date. We haven't lost any customers. We've maintained good relationships with all the employees, and we're starting to get real buy-in to the Vulcan culture and way of doing business. There's numerous opportunities to improve that business and also to cross-sell. We believe there's a significant opportunity for improvement on an ongoing basis. Based on our current view of market conditions and recent trading, we've narrowed our FY23 EBITDA guidance range from NZD 215 million-NZD 235 million to NZD 215 million-NZD 230 million. Combined with depreciation, amortization, and funding costs, we now expect NPAT to be between NZD 95 million and NZD 109 million, and we'd previously guided towards NZD 93 million and NZD 107 million. It's fractionally higher. As is an uncertain market, and an economic outlook that's volatile, we are making sure that we keep the market updated to any changes or updates as they occur. Thank you for listening to the presentation. Now we're welcome for any questions. Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad, and we'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Lee Power from UBS. Your line is open. Morning. Thank you for that. Can you just maybe talk a bit about the difference in the selling price versus kind of the underlying commodity price for the products? Like, is there something that you're doing around, you know, processing? Is there more processing in this half or something around mix that it's driving what seems like a bigger gap? Okay. What I think I'm hearing from you, Lee, if I rephrase your question, you're talking specifically maintaining our gross profit per ton in a challenging environment. Is that what you're asking? Yes. Correct. Correct. I think the key thing is, I'll make 3 quick observations. One observation is that, some of our volume drop off was actually in very low margin products, which were relatively opportunistic. Probably about 6% or 7% of our 15% comes from that area. It was discretionary whether we took those orders or not. I park that to the side, Lee. The second point would be that we certainly have invested in more processing equipment, and we've also been very mindful of ensuring that we sell at the right margin, and we're not chasing down uneconomic orders. There has been a bit of aggressive behavior, particularly in Australia, from one competitor on a clear stock, so we haven't chased those prices down, Lee, at the expense of some volume, but it was uneconomic. That partly accounts for it as well. The third piece is, really, we've put a lot of emphasis and development on sales force effectiveness and pricing and margin management, improving our DiPoP. If we've improved our DiPoP further, we've improved our overall service level and availability further. I think those are all positive indicators. We're getting a lot of orders from clients, small ones and twos, all add up at our better margins. I think there's a combination of mix of product, mix of processing, and being more selective when there, when there's just no return on some large contract orders. Okay. Thanks. The volume piece in the first half, is it possible to strip out what you think, whether in kind of one-offs? Oh, okay. I'm just trying to. Yeah. Okay. I think the prior period, we were in the privileged position of having better stock availability than a number of competitors. We got some one-off orders from their customers. You could probably account for a couple of% there, thereabout. There might. Then on top of that, you've got, at least, I've calculated back of the envelope about 6%-7% of discretionary larger orders in our coil particular that we've exited effectively because they're not economic. Then the other element I think would be, I just think the weather and the like is probably around 4%, Lee. The clients have. Mm-hmm. Clients have got work, but they haven't been able to process it, so a number of it, a lot of it's been delayed. The last thing I would emphasize is, we've got 2 less working days, so that's part of it as well. There's quite a few factors there. Look, one thing I would add, which is a bit of an unusual one, is that we haven't seen this before, a number of clients took on more stock because they were panicked and actually hoarded quite a lot of material. That slowed up demand as well for some key clients. Excellent. Thank you. Yeah. Thanks. Okay. Thank you. Thank you. Your next question comes from the line of Matthew Abraham from Credit Suisse. Your line is open. Hi there. Thanks for taking my question. I might just follow up on Lee's query, relating to, you know, ASP and gross margin. Just to unpack a couple of those points, maybe before even diving into them, should we expect going forward there to be a dislocation between, you know, the underlying price, the commodity price and, you know, the price that Vulcan records? What we seek to do, Matthew, is to make sure that our gross profit per ton is held at an appropriate level and we try to improve it on an ongoing relentless basis. That principally means we drive it up through the value chain. That might mean you bundle a product, so it's more convenient for a client. It may mean that you process it, so you can charge a higher price for it because it's added value. It might mean that you're in a slower environment where people need really urgent, reliable delivery service, they buy a few in preference for other people. There's a number of factors here, but our focus is always on this, and it is relentless on it. My gut feel on this is that our competitors, their expectation of margin has probably improved somewhat as well, simply 'cause the inflationary pressure in this industry has been quite high. The old model of what you could achieve with cost plus pricing has to be adjusted in their minds because they can't make an adequate return without adjusting it higher. There's a few factors in there. That's helpful. Just on the point on investing in more processing equipment. That processing percentage, I think you have disclosed before to be around, you know, 47% is the number that I think you've disclosed. Could you potentially just quantify what that has increased to? You know, as a percentage of total revenue or otherwise, just so we can get an understanding of the. Yeah quantum of that benefit on margin. Okay. We've commissioned three brand-new processing machines in the last 6 months. The total sales incremental out of those off the top of my head would be in the order of, yeah, 2%-3%. Just to add to that, Matthew, it's Kayu here. Sometimes we go through certain period where distribution sells a significant portion of volume that doesn't do value add. You can see from, one month to the next or one quarter to the next, that there is a decline in terms of% of value-added services that we provide. There are other times, if it's commissioned on the basis of a value-added project, it could bump it up substantially above 50%, in a given period. It can move around, but on the whole, our goal is to continue to improve the% of value add, of our sales volume. Our new equipment does add 2%. That's true. ...when sold out. That's what it is at one. Yeah. Right. Okay. Okay, that's helpful. Just on cash flow, you know, the inventory which you've indicated has been distorted by the acquisition, which makes complete sense. Going forward, how should we think about inventory and, you know, what might be like a run rate balance to consider for forecasting? Well, I'll make a quick comment and hand over to Kayu. I'd make two quick comments on Ullrich Aluminium was effectively a debt-free company with a lot of inventory. We bought NZD 140 million of inventory, and we've obviously got to reduce some of that, and some of that's on a deferred payment basis. That's first point. We've got way more inventory in Aluminium than we actually need. Second point is, Aluminium's got a massive product range which we're narrowing down, so there's more inventory to come out of that. Thirdly, in our core product ranges, a lot of our steel mills, they were months and months late with shipping and the like. Suddenly everything closed up. Yeah, give you a classic example, our local mills went from 3 months delivery to delivering everything, you know, within 1 month again. Suddenly they wanted to play, deliver every single order. We suddenly got a surge of orders that we didn't necessarily want all at once, all arriving. All of that compounded, and those issues drove up our inventory quite significantly. Of course, what we're doing since is we're just working through that. Now I'll hand to Kayu to give you a sense of what the underlying inventory will end up being. Matthew, thanks, Rhys. At the time of the acquisition, I think we added close and up to around that NZD 140 million mark in terms of inventory acquired. We're working through the process of two things. One, reducing the level of inventory that's held because there was certain amount of overstocking of the key items that we want to keep. Partly because the previous owner of the business had a take-or-pay arrangement for some of the stock. In the second half, we expect to work down those and as the take-or-pay had sunset in the month of December as well. Secondly, there is a range of product that we've identified that we would like to rationalize and reduce as well. Those are the other elements that we expect within the Aluminium business to continue, for overall stock requirement to continue to come off over the course of the next 6 and 12 months. The second component for the existing business is across steel and metal segments. We're very confident that, based on the current price environment, current market conditions, and our ability to flex, the level that we want to order in terms of replacement stock volumes, that we should expect to see the tons to come off in the coming 6 to 12 months as well. Okay. That's helpful. Thank you. Just one more, if I may. We've spoken about gross profit per ton. It looks as though the gross profit margin in percentage terms, you know, has come off against the PCP, primarily due to steel, the steel segment. Would you mind just unpacking that a little bit? Is that potentially the product of competitive forces or otherwise? Okay. I'll give you a quick couple of comments on that. We highlighted this time last year that we had some benefit, some tailwind of around 3% minimum on margin percentage due to the fact we were selling old product prices at new replacement costs. You probably remember that. There's about 3% associated with that. Then there was a sudden, which I referenced, suddenly a massive drop in steel price early on in this first half year, which particularly in Australia, led to some people panicking and trying to ditch stock. Then, of course, the product prices jumped back up again by 7%. There's a couple of factors there. I don't think they're typical. I think the margin we're currently achieving is probably a little bit on the low side to what we'd like long term. The one this time last year was 3%-4%, probably overstated due to the impacts of selling, you know, the pricing going up as we sold. Okay. Thank you. That's helpful. I'll pass it on. Thank you. Before moving on to the next question, I would like to remind everyone, if you would like to ask a question, please press star, then the number one on your telephone keypad. Your next question comes from the line of Rohan Koreman-Smit from Forsyth Barr. Your line is open. Morning, guys. Congratulations on getting through what looks like a pretty interesting first half. Just a couple of questions. First one, just on this OpEx, just trying to look at the divisional level here. When I look at steel EBITDA of NZD 64.3, and you give us a gross profit margin of 32.2% for that division, it suggests that, you know, you've had a pretty big uplift in OpEx within that division. Then backing out ex-Ullrich, what is implied in metal suggests there's a bit of a decline. Can you just talk to the dynamics there? Okay. I can talk to that. I'll let KU have a crack as well. I think that's correct. We've had significant increase in costs, you know, particularly fuel, 'cause we run a big trucking fleet. We've been slightly down on volume, so the truck goes out and it delivers to a client 4 items, not 5. You don't get the freight recovery even though you're incurring the same cost. You probably appreciate that part of our company culture is we always make sure our employees are absolutely appropriately looked after. We paid a significant one-off payment prior to Christmas. It was a deliberate strategy to make sure that people were made whole, and we ensure that, you know, they're not disadvantaged in this highly inflationary environment. We also have policies where we make sure that people's pay rates and overtime availability is maintained even during a downtime. We've talked about this before as part of our core culture, and it really pays dividends long term. The other aspect I would say, though, is that we had a number of vacancies in that when we started the year. We've basically filled some of those vacancies. There's been a bit of a marked drop-off in demand in some areas in the last few months. We're clearly gonna be looking at our cost base in steel generally. Okay? You know, it's definitely a challenge. We're working on it. We've got a number of programs to reduce the costs, and they're already underway. You've got to appreciate, of course, we're busy integrating a major business in Ullrich Aluminium, and they've got all sorts of restructuring opportunity as well. We wanna make sure if people are displaced, that they are given the opportunity for a role somewhere within the company if that occurs. You can probably appreciate, Rohan, it's a bit of a moving feast, so it's been quite hard to manage to a really high standard. We think that'll settle down in the new year and work out. The other point I'd make is, look, we've been locked down. We've done a lot of travel. We've done a lot of integrating with our employees, number of conferences. We've really got people motivated and to see the vision of where the company's going because we've had two years of, you know, Teams-only contact. There has been a bit of that and a little bit of contact with clients that, you know, more than usual. There has been some one-off costs associated with that. Look, my general theme would be, look, inflationary pressures across the board have been quite high, so we're gonna work hard to offset them. Does that cover it from your viewpoint? Yep. Yeah, that's a very thorough answer, Rhys, as always. Yeah. The next question is, just, you know, I guess if you look at what Ullrich has been running at and your comments around, maintaining that in the second half, and if you take the prior guidance for Ullrich, that sat within the full guidance, it suggests you probably lowered the view on the core or base business by, you know, NZD 10 million-NZD 15 million at the EBITDA line. Can you talk us through, I guess, your thinking around that in terms of volume and price or gross margin dollars? Well, I suppose the comment I'd make is that we see the, particularly in the New Zealand environment, is, you know, since Reserve Bank announcement we've just been hit by a storm of very bad press and a lot of uncertainty. We're naturally conservative. We are being very cautious in our outlook, Rohan, very deliberately. You're starting to see, you know, we don't wanna come back to the market and do a downgrade, we're being very careful and conscious of being conservative in our outlook. Equivalently, we've done that in aluminum. We think we bought a good business. We said that, we're working hard to improve it. We've been pleasantly surprised by how well it's gone so far. We haven't really unleashed all the full potential of the business. You know, there's some puts and takes there. We think, you know, with an uncertain environment, there could be ups and downs. We think we're covered overall. Do you want to comment on that, KU, 'cause you're- Sure. sure of that. Thanks, Rhys. Yeah. As Rhys mentioned earlier on, the market environment, the economy, even the interest rate environment and the inflation environment is quite uncertain. With that, you would appreciate that we're taking a cautious approach. That's not to say conditions can't get any worse. They could. If you look back in that business confidence, especially the own activity survey outlook, which has been particularly negative, suggest that there could be additional downside. At this point, this is our best guess, our best estimate of what the outcome would be based on all of those things that we try and distill into our forecast. If condition changes, we will obviously be obligated to come back and advise the market. Yeah. Thanks. Thanks, Kai-Yu. Perfect. Two more quick ones. Just more around your strategy in the softer environment. I noticed you said active trading accounts are up. Can you just talk to I guess, how you plan on tackling the cycle? You know, is it find pockets to grow in? Is it rationalize and sit tight and wait for a better operating backdrop? What we typically do, we're quite aggressive. We've got a highly motivated workforce. We've got a highly incentivized sales force, as we've indicated previously, so you're aware of that. We will definitely chase new business. We're also the bundling opportunities we have and the new opportunities in Australia where, you know, I'll give you an example, Cairns, you know, we've got an Aluminium business up there, but we don't sell much stainless or engineering steel, so clearly we've got a base we can work from. We're looking at, we indicated in the presentation a number of sites are in growth mode. I'll give you a specific example. Albury, we've doubled the size of that site and Aluminium's going in there and it all starts in May, June. That is a classic example where all that Central Victoria area, we're gonna be able to offer a really good service and a new product range completely. We've got a number of organic growth opportunities. Our default is always to grow organically and press ahead. I don't think we'll be taking a breather, put it that way. Perfect. Thanks. Last one, just circling back to inventory, can you give us an indication of, I guess, how many or how long the inventory position is? You know, I think typically you talk to, is it four months of inventory on hand is where you feel comfortable. Can you just give us an idea of where it currently sits in the core business? Well, it depends on. Okay. Core business, depends on what division you're in and where we're buying it from. If it's from Asia, you'll have 4 and a half months inventory. If it's from local, say New Zealand Steel or from InfraBuild, it's only 2 and a half months. Our typical inventory hold is around 4 months. Stainless, it's longer 'cause it's a longer lead time, so that's typically 4 and a half months. Engineering steel is more like 5 months. Aluminum, we're well and truly overstocked because. Just 2 points here. The old party, 1, carried a lot of stock, and 2, they also bought it all by cash. They didn't have terms on it. There's a couple of positive benefits there that we'll get when we sort all that out. Our gut feel, or not gut feel, our planned program is we'll have made major reductions and be a much better balanced stock position in the midyear period. Do you wanna comment, Caillou? Sure. Thanks, Rhys. In the context of average across the whole entity excluding Aluminium, you should expect us to be at around that 4 month. Right now, we are higher than that, obviously higher than what we normally would carry. Given the price expectations and the current price dynamics in the market, I think to be fair, we feel that we're in a good position. Yeah, we're not unhappy with that. Okay, cool. Thanks. I'll pass on to someone else. Cheers. Okay. Cheers. Your next question comes from the line of Grant Swanepoel from Jarden. Your line is open. Good morning, Vulcan team. My question is really around Ullrich. At the start of the year with your guidance range, you had Ullrich doing NZD 26 million at the midpoint and then NZD 5 million of integration costs. Having done NZD 23 million plus NZD one and a half of integration in the first half, if you're saying that runway is gonna continue, can you give some sort of color firstly on what Ullrich is gonna do in your guidance range for this year? An update on that, please. Okay. Yeah. Okay. Grant, I'll make a quick couple of comments. Look, we're in a situation where, you know, we've only owned the business for five months. We've started well. We've identified a whole lot of opportunities. We said we've got some consultants in to help us. We're in the process now of really starting those implementation plans in the next four to six weeks. There will be some significant costs associated with that. You know, deleting lines that are unprofitable, you do it at a lower margin, rationalizing some product ranges yeah, and spending a lot of money getting the equipment and the sites sorted out. There's all sorts of ongoing improvement opportunities. I would hesitate to give a forecast for the second six months. What I would say, the underlying trend will be an improvement trend. Your comment, Kai-Yu? Yeah, sure. Grant, there's also seasonality involved here. Firstly, second half of our financial year has, on average in any given year, five less trading days. Also in the context of the disruption, I'm sure you appreciate based in New Zealand and especially in Auckland, with the flood issues that we've had in much of January and then I guess, in the recent past 48 hours will continue to disrupt our business, not just aluminum, but also for steel, stainless and engineering steel as well. Really when you look at it, not just in the context of aluminum, but the wider business, I think New Zealand in the second half, we do need to factor in some of these elements involved. What I might do is actually turn it over to Adrian to comment specifically on aluminum because he's been driving a lot of the initiatives. Yeah Hi, Grant. If we have a look at the aluminum business as a whole, Australia, New Zealand, without pulling them apart. As Rhys and Kai-Yu have mentioned, some of the restructuring programs, they are 1-2 months old. We're doing a very detailed program of improvement plans. And we're in no real rush. We wanna do it properly and just make sure that the restructuring goes well and sets it for the future. That's a combination of the branches, the people and the culture, and it's all integrated into one. Really our business model at Vulcan, integrating that with Ullrich will be the key driver going forward. That's basically the service model that we discussed, the customer mix, the product mix, and understanding what we should and shouldn't sell. That's a very detailed program, but it is a lot of work. It's been 5 or 6 months now. We're probably about a month or two away from implementing. The trading earnings on that business when you bought it was, I think it was close to almost NZD 40 million, NZD 39 million of EBITDA. You guys were saying that there was a COVID impact. It looks like the run rate has continued at that. Are you now saying that actually this business is better and actually the COVID impact wasn't real and this is a more normalized, much stronger business than the NZD 25 odd million business you guys were talking us down to before synergies? Grant, just to clarify, a couple of points you made there. The NZD 38 million, NZD 39 million EBITDA that you called out is pre-IFRS. The post-IFRS number is more like, I think NZD 49 million, or NZD 50 million from memory. The NZD 23 million that we outlined for the 5 months of contribution is on a post-IFRS basis. The NZD 50 million drops to NZD 25 million in the old guidance, you're sticking with that? Sorry, I know we're going in circles here, but it looks as though the first half shot the lights out on Ullrich, and it looks like your guidance downgrade on the core business is actually quite material. I'm just not getting my head around your numbers because it seems that we're going in circles on this. Yes, the business for Aluminium has performed better than what we expected. We, you know, certainly in the second half, as I said, we do see some challenges coming through. Yes, our goal is to try and maintain the momentum in the business, not necessarily in financial dollar terms, but certainly in terms of initiatives that Adrian had outlined earlier on. If you're asking us to provide you with a number in terms of what EBITDA contribution might look like in the second half, that's probably not appropriate point because we're still working through. I was really pushing that. What I'm pushing for is there was a COVID hole that was going to be ripped back out of the business, that hasn't entirely occurred. Is that still gonna occur before synergies and all the other stuff you're doing? I think it will occur. If you look at the volume numbers that we talked about, Grant, the decline in Aluminium on a like-for-like basis, although we only owned it for five months, we specifically called out the decline in volume of about 17% year-on-year. Our expectation is that that year-on-year volume will continue to come through in that trajectory. If you then look at the, and acknowledging that this industry in general is still a very much a cost-plus model with the impact of decline in Aluminium prices until recently, therefore your selling price per tonne would be expected to come down. Because this is largely has been a cost-plus model approach, we are obviously working really hard to convert the mindset of our own business and customer that we're actually a value and user value service model. Hence, that process actually takes time. In the interim, what you have is a% margin on potentially lower pricing per ton. That then gives you, at least in the short term, a lower gross profit dollar. With a rising cost environment in terms of OpEx, you would expect to see some compression at the EBITDA level. Does that help you? Oh, that's very helpful. Very helpful. Thanks, Cayou. My final question, just in terms of working capital. Of that almost NZD 140 million increase in inventory, what exactly was Ullrich? I know you're slowly bringing the Ullrich in. How much of that 140 is Ullrich? Secondly, what should we be expecting for a release in working capital over the next 18 months? We were looking for about NZD 150 million. Is that still realistic? Yes, sure. I can pick up that subject. This is in note 15 of our interim report where we outlined the acquisition dollar value of various category of assets that we took over from the previous owner. The inventory there was NZD 126. There is another NZD 9 million worth of prepayment. Some of these prepayments are actually a stock rather than prepayment for operating expenses. That's to try and reconcile to my comment around NZD 140 million order of magnitude for stock that we acquired. Effectively, as I mentioned to you, they were locked in into some arrangements to acquire a certain type of stock, which obviously, and being the new owner, we continue to honor. Hence, in the second half, we expect that order of magnitude, NZD 140 million of stock to start unwinding in the second half of the current financial year and into FY24 as well. In total unwind for the whole business? In total unwind for the whole business. If you think about the increases, vast majority of the step up in stock does really relate to the aluminum. Look, there is some underlying increase in our other, non-aluminum stockholding. As I mentioned earlier on, because of the lead time, because of the cost increases per ton basis, we're pretty comfortable with where we are. Thanks, Kai. That's all from me. Your next question comes from the line of Marcus Curley from UBS. Your line is open. Good morning, guys. Just two quick ones from me. Just back on Ullrich. Kai, I just wondered if you could sort of talk to the potential magnitude of the outperformance in the first half relative to your expectations. Might be an easier way to sort of talk to, you know, how this business is traveling. If you're gonna call out the key sources, you know, of that, you know, obviously relative to the NZD 23 million, you know, that came through the results. I think, Marcus, it's a combination of, kind of just we were anticipating as generally to be the case when you buy a business, with an opportunity a reasonable amount of opportunity, but not entirely open book exercise to comb through the customer base. You make certain assumption around potential customer loss, right? As Rhys mentioned earlier on, we were quite pleased that the team pulled together and were able to largely keep the customer base relatively steady. It's one factor that contributed to better volume outcome, despite it going down by 17% year-over-year. We were expecting maybe even more than that. Secondly, the margin outcome has been better than what we thought at the Aluminium level. I'm talking about margin dollar per tonne, again, not necessarily in terms of percentages. The third point is we had made certain assumptions around OpEx, and also in terms of integration cost being front end loaded. That has not come through the way we profiled it in our own mind when we set up that budget or, when we set up, what we thought how that earnings would unfold in the first 5 months. Can I just make one quick comment, Marcus, which may give some illustration of what was going on. This was an uncontested acquisition, where we worked very confidentially with the family to buy the business. We, in terms of detailed due diligence, culture, practices, approaches, was very limited. What we've been pleasantly surprised by is the buy-in of the employees to the new environment, and their response to that. Again, you probably appreciate when you buy a new business to get people on board and working with you, generates, you know, significant improvements. Yeah. We're seeing some of that as well. You would typically be very conservative in the first period because a lot of people are heading in the wrong direction or need to be corralled. You know, you're trying to change things. It becomes problematic, distracting, expensive, and errors get made. We haven't had much of that at all. It's been a really good attitude from all the Ullrich employees and been well handed over by the Ullrich family. I think there was a subjective element that we underestimated that's been positive for us. Yeah. Are you willing to call out what, if you added all that up, you know, what the ballpark sort of outperformance was in the half? If you... Maybe as a reference point, Marcus, if you think about what we had explicitly talked about at our full year result when we guided to our earnings range, we said that on a post-IFRS basis, that earnings, we expected in the, for the full year for the 11 months, was going to be in the range of, from memory, in the range of about, NZD 25-NZD 27, with point being NZD 26. We wanted to provide you and the rest of the market with some transparency as to what the progress that we've made. The dynamics are slightly different. They contribute to this NZD 23 million EBITDA, that we achieved in the first half, our first 5 months of our ownership. Maybe that provides you with a sense of, where we're tracking to the other question from the other person earlier on, around what sort of, run rate could we expect going forward. I think it's premature. Yeah ... to talk about it because we are still in very early phase of our ownership and wanting to understand the business and the industry. Yeah. Okay. Then just, yes, completely separately, you know, Rhys, you talked about, you know, some of the higher operating costs, you know, related to transport. You know, do you have any mechanisms, you know, to pass, you know, these things on to customers? Has that been part of, you know, I suppose why the pricing achievements been stronger? Is the ability to sort of, you know, let's say add these, you know, let's say higher costs, you know, onto customers? Is that? Well, Yeah. Well, I was just using it as an example, freight's a good one though, Marcus, because we pass on freight costs. If your truck is only three-quarters full, not 100% full, you basically, the last quarter is free, right? Straight revenue benefit. That goes against effectively a cost recovery, right? We haven't reduced our trucking service deliveries. In fact, we've probably done the opposite. We're in an environment where we organically grow. We add trucks to areas that we're trying to develop. I use that as one example of where as volume comes off, you do get a hit on costs because you can't recover as much. The other one would be straight out rent increases. You know, we've got a large network of buildings, and there's annualized rent increases, which you can't escape. Another one is insurance. The insurance companies are all going crazy trying to charge everybody a lot more. There's a lot of sort of hidden costs that have really reared their heads with inflation. The ones we have most control over are productivity. We track productivity well. There has been a dip in demand recently, so the productivity is slightly below what it was. We're gonna get it back to where it needs to be. You probably appreciate, Marcus, with just acquiring a business with spare positions likely to be available, we wanna make sure we place people appropriately and don't go into any rash decisions. Our approach is always to think long-term culture, doing it carefully considered, but we will achieve the right cost base. Obviously we're a bigger business and we're gonna improve our productivity going forward. Then just finally, Rhys, you know, one of your peers yesterday, you know, called out, you know, their early expectations for next financial year for activity levels in New Zealand to be down somewhere between 10% and 15%. You know, do you think you're sort of seeing some of that now in your business? Or is that something, you know, that's a risk to the industry still to come? Marcus, I see it in quite different segments. Say for a water infrastructure, heaven help us, Three Waters, that is obviously gonna go full steam, which use a lot of product. You have export-oriented industries that are still getting good volumes out the door, which drive product demand. On the other side, you see people, you know, building garage extensions and houses and the like that are all gonna suffer with the higher interest rates, so that's gonna be reduced. I think it's quite uncertain. We've got a quite a different profile than our competitor, and I think we've got a more diverse and appropriate profile to weather the storm because we're far more exposed to export-oriented and rural industries than them. We're not overly concentrated in high-rise or residential construction in Auckland and Wellington. Look, my gut feel though is I think, you know, we've sort of stabilized at the moment, and we've seen a few projects canceled or slash postponed. Then we've seen a few come back. I think what's gonna happen is you could have a hiatus period where some projects are postponed, then they come back post-election or after the election. If I'm worrying at all, this is mid-year period, we're in winter, and we've got an election coming and there's a lot of uncertainty, and people are likely to postpone investment decisions which would affect demand. I can't see that lasting for too long a period of time, Marcus. I'm probably more optimistic than they are from my commentary there. Okay. Thank you. You have a further question from the line of Matthew Abraham from Credit Suisse. Your line is open. Sorry, just one more, if I may. Thanks for taking the query. Just back on pricing. If we look at lagged benchmark pricing, it would be suggestive of an expectation for a decline in, you know, East Asia HRC prices in the next sequential half. Given there is this increased processing capability, and you also mentioned a bit of a mix factor playing out, what should we expect in terms of the average selling price in that steel segment in the next half relative to this? Before I start, like hot-rolled Co is just like a benchmark everybody uses. Actually, the individual steel prices vary significantly, have different drivers. The key point I would point out is China's coming back. China has already driven the price up, we believe, by 7% by more demand. What you're probably gonna get is price increasing in the near term, but when that occurs and how much, we just don't know, so we haven't put it into our forecasts. If I was, you know, I'm doing one hand on the other. One hand we're saying, "Well, there could be a slight decline," on the other hand, we say there could be, you know, an increase. We're probably going middle of the road and probably saying it's probably likely to stay where it is. Would you agree with that, Adrian? No, look, I would. As Rhys said, hot rolled is just an index. It's not that accurate for the suite of products we sell. If you have a look at that $470 roundabout October, November, US was the bottom. It's at about $630 now. It's actually trending up. Obviously since China opened up, not just hot rolled, other products have as well. It's bearing in mind the lead times for 3 or 4 or 5 months, we're talking mid-year before we'd have a better idea of what's happening there. Matthew, overall, I think the way to think about this is, what's your view of the China startup? If China startup's strong, then steel price and commodities will go up. If it's not, it'll be weaker. Our underlying strategy is we always go for more processing, we always go for more organic growth, we always go for higher value sales. We're trying to maintain our gross profit per ton in that environment. Okay. That's helpful. Thank you. There are no further questions at this time. I would like to turn the call back over to Rhys for closing remarks. Thanks, everybody. I know it's been quite an unusual period in the last 6 months, and I think with the weather and economic conditions, it's weather both financially, economically, and physically. Look, we're confident about the future. We think, quite frankly, we think we've had a very solid first 6 months. We've made a major acquisition, which has settled down really well. We've got our teams lined up. We know what our issues are to improve. We know we've got to offset cost inflation. We know we've got to manage margins hard, and we know we've got to keep growing our business. We're pretty confident about the future, and we're gonna take a forward and positive view forward. Thanks everybody for attending and listening in. Thank you very much.