Full Year 2026 Bluescope Steel Ltd Earnings Call

August 17, 2026

Speaker #1: Good morning, and thank you for joining us today. I'm Tanya Archibald, BlueScope's Managing Director and Chief Executive Officer. With me is David Feliu, our Chief Financial Officer.

Tania Archibald: Good morning, and thank you for joining us today. I am Tania Archibald, BlueScope's Managing Director and Chief Executive Officer. With me is David Fallu, our Chief Financial Officer. We will take you through the FY26 results, the progress we have made against the agenda we set at the half, and how we are positioned for the future. We will then take your questions. I would like to begin by acknowledging the traditional custodians of the various lands on which we meet and work today and pay my respects to elders, past and present. I will begin with safety. There is nothing more important than the health and safety of our employees and contractor partners. BlueScope has a strong safety culture built on a track record of extensive engagement with our workforce and an ongoing commitment to learn and improve.

Tania Archibald: Good morning, and thank you for joining us today. I am Tania Archibald, BlueScope's Managing Director and Chief Executive Officer. With me is David Fallu, our Chief Financial Officer. We will take you through the FY 2026 results, the progress we have made against the agenda we set at the half, and how we are positioned for the future. We will then take your questions. I would like to begin by acknowledging the traditional custodians of the various lands on which we meet and work today and pay my respects to elders, past, and present. I will begin with safety. There is nothing more important than the health and safety of our employees and contractor partners. BlueScope has a strong safety culture built on a track record of extensive engagement with our workforce and an ongoing commitment to learn and improve.

Speaker #1: We'll take you through the FY26 results, the progress we've made against the agenda we set at the half, and how we're positioned for the future.

Speaker #1: We'll then take your questions. I'd like to begin by acknowledging the Traditional Custodians of the various lands on which we meet and work today, and pay my respects to Elders past and present.

Speaker #1: I'll begin with safety. There is nothing more important than the health and safety of our employees and contractor partners. BlueScope has a strong safety culture, built on a track record of extensive engagement with our workforce, and an ongoing commitment to learn and improve.

Speaker #1: Throughout the year, our Global Safety Refocus Program guided our work on critical risks and the effectiveness of the controls that manage them. But our performance is not yet where it needs to be.

Tania Archibald: Throughout the year, our Global Safety Refocus program guided our work on critical risks and the effectiveness of the controls that manage them, but our performance is not yet where it needs to be. The tragic loss of a contractor at Port Kembla in November is a stark reminder of the importance of our work in this area. That incident remains under investigation by the regulator, and we are engaging fully with that process, and we are determined to learn from it as we do with every serious incident across the business. Building on the progress we made in the year, we are continuing to drive a more systematic approach to managing critical risks and improving controls. This work is supported by our new functional operating model, which has brought all of our safety professionals into a single global team.

Speaker #1: The tragic loss of a contractor at Port Kembla in November is a stark reminder of the importance of our work in this area. That incident remains under investigation by the regulator, and we're engaging fully with that process. We are determined to learn from it, as we do with every serious incident across the business.

Speaker #1: Building on the progress we made in the year, we're continuing to drive a more systematic approach to managing critical risks and improving controls. This work is supported by our new functional operating model, which has brought all of our safety professionals into a single global team.

Speaker #1: This change is designed to bring the full force of the organization's capabilities to the greatest areas of opportunity and challenge, as we seek to strengthen our safety performance.

Tania Archibald: This change is designed to bring the full force of the organization's capabilities to the greatest areas of opportunity and challenge as we seek to strengthen our safety performance. Financial year 2026 has been a defining year for BlueScope, in which we have accelerated the delivery of value, which has positioned us well to capture the next phase of growth and returns. I am proud of what the team has achieved and believe we are well-placed for the years ahead. In February, we committed to accelerate value delivery across four pillars. On growth, peak CapEx is now behind us, and two of our major projects have just moved from construction to hot commissioning and ramp-up phase. That is the new state-of-the-art metal coating line in Western Sydney and the new low-emissions electric arc furnace at Glenbrook in New Zealand.

Speaker #1: Financial year '26 has been a defining year for BlueScope, in which we've accelerated the delivery of value. This has positioned us well to capture the next phase of growth and returns.

Speaker #1: I'm proud of what the team has achieved and believe we're well placed for the years ahead. In February, we committed to accelerate value delivery across four pillars. On growth, peak capex is now behind us, and two of our major projects have just moved from construction to hot commissioning and ramp-up phase.

Speaker #1: That's the new state-of-the-art metal coating line in Western Sydney, and the new low-emissions electric arc furnace at Glenbrook in New Zealand. On cost—in FY26, we fully delivered the initial $200 million cost-out program, which we commenced just over two years ago.

Tania Archibald: On cost, in FY26, we fully delivered the initial AUD 200 million cost-out program, which we commenced just over two years ago, and we have exceeded our targeted additional AUD 150 million cost-out program with the reshaped cost base in place from 1 July this year, delivering a simpler, leaner BlueScope. On property, we have accelerated the delivery of value with a range of project deliverables through the year, highlighting the significant value in the surplus land portfolio. Finally, for shareholders, we have delivered a significant step up in returns whilst maintaining a robust balance sheet. Put simply, we have executed on our commitments. Turning to the headline numbers, FY26 demonstrated the strength of the portfolio as we shift from a heavy investment phase to one of ramping up shareholder returns.

Speaker #1: And we've exceeded our targeted additional $150 million cost-out program, with the reshaped cost base in place from 1 July this year, delivering a simpler, leaner BlueScope.

Speaker #1: On property, we've accelerated the delivery of value with a range of project deliverables through the year, highlighting the significant value in the surplus land portfolio.

Speaker #1: And finally, for shareholders, we've delivered a significant step up in returns whilst maintaining a robust balance sheet. Put simply, we've executed on our commitments.

Speaker #1: Turning to the headline numbers, FY26 demonstrated the strength of the portfolio as we shift from a heavy investment phase to one of ramping up shareholder returns.

Speaker #1: Underlying EBIT of $1.27 billion was materially higher than FY25, while second-half EBIT of $716 million was above the top end of the guidance range, supported by a stronger North American contribution, record Southeast Asian performance, and delivery of cost and productivity targets more than offsetting cyclically low Asian steel spreads.

Tania Archibald: Underlying EBIT of AUD 1.27 billion was materially higher than FY25, whilst H2 EBIT of AUD 716 million was above the top end of the guidance range, supported by a stronger North American contribution, record Southeast Asian performance, and delivery of cost and productivity targets more than offsetting cyclically low Asian steel spreads. Underlying net profit after tax for the year was just over AUD 800 million, and the balance sheet finished the period in a strong position at AUD 600 million net debt. With the major investment program ramping down across the next 12 months, we are continuing to ramp up returns to shareholders. The board today approved an unfranked final dividend of AUD 0.65 per share and an unfranked special dividend of AUD 0.70 per share, which, when paid in just under a month's time, will see us delivering on our calendar year 2026 commitment of AUD 3 per share in distributions.

Speaker #1: Underlying net profit after tax for the year was just over $800 million, and the balance sheet finished the period in a strong position at $600 million net debt.

Speaker #1: With the major investment program ramping down across the next 12 months, we're continuing to ramp up returns to shareholders. The Board today approved an unfranked final dividend of $0.65 per share, and an unfranked special dividend of $0.70 per share, which, when paid in just under a month's time, will see us delivering on our calendar year '26 commitment of $3 per share in distributions.

Tania Archibald: With the major investment program ramping down across the next 12 months, we are continuing to ramp up returns to shareholders. The board today approved an unfranked final dividend of AUD 0.65 per share and an unfranked special dividend of AUD 0.70 per share, which, when paid in just under a month's time, will see us delivering on our calendar year 2026 commitment of AUD 3 per share in distributions.

Speaker #1: Shareholders have been patient through the investment phase, and that patience is now being rewarded. Turning to guidance, we've entered the next half with solid momentum.

Tania Archibald: Shareholders have been patient through the investment phase, and that patience is now being rewarded. Turning to guidance, we have entered the next half with solid momentum. We see continued strength in North America, a solid demand environment in Australia, and early signs of recovery in New Zealand. In China, overcapacity continues to weigh on regional steel spreads. For H1 2027, we expect underlying EBIT in the range of AUD 860 million to AUD 960 million, subject to spread foreign exchange and market conditions. The assumptions that underpin this outlook are set out on the page, and David will take you through the regional detail shortly. BlueScope today is a lean, modern manufacturer of high-quality steel products, systems, and solutions that our customers know and trust.

Speaker #1: We see continued strength in North America, a solid demand environment in Australia, and early signs of recovery in New Zealand. In China, overcapacity continues to weigh on regional steel spreads.

Speaker #1: For 1H FY27, we expect underlying EBIT in the range of $860 million to $960 million, subject to spread, foreign exchange, and market conditions. Now, the assumptions that underpin this outlook are set out on the page, and David will take you through the regional detail shortly.

Speaker #1: BlueScope today is a lean, modern manufacturer of high-quality steel products, systems, and solutions that our customers know and trust. Our purpose and bond are enduring and grounded in care and respect for our people, our customers, our shareholders, and the communities in which we operate.

Tania Archibald: Our purpose and bonds are enduring and grounded in care and respect for our people, our customers, our shareholders, and the communities in which we operate. We are guided by three key strategic themes that focus on customer value creation, operational excellence, and shareholder value delivery. Our decision-making is supported by our longstanding financial framework, which drives a focus on resilience and returns, a disciplined approach to capital allocation, and an unwavering commitment to deliver long-term shareholder value. We are strategically differentiated by our ability to combine highly competitive manufacturing assets with deep customer relationships, leading product development, extensive channels to market, and strong strategic marketing capabilities. With a longstanding presence in deep manufacturing and market expertise across Australia, New Zealand, North America, and Asia, we bring decades of know-how to every market we serve. Our in-country, for-country approach keeps us close to customers and end-use markets.

Speaker #1: We're guided by three key strategic themes that focus on customer value creation, operational excellence, and shareholder value delivery. Our decision-making is supported by our long-standing financial framework, which drives a focus on resilience and returns, a disciplined approach to capital allocation, and an unwavering commitment to deliver long-term shareholder value.

Speaker #1: We're strategically differentiated by our ability to combine highly competitive manufacturing assets with deep customer relationships, leading product development, extensive channels to market, and strong strategic marketing capabilities.

Speaker #1: With a long-standing presence and deep manufacturing and market expertise across Australia, New Zealand, North America, and Asia, we bring decades of know-how to every market we serve.

Speaker #1: And our in-country/four-country approach keeps us close to customers and end-use markets. Through these elements, we aim to deliver resilient through-cycle earnings, robust and growing cash flows, and higher shareholder returns, all of which we're seeing in these results.

Tania Archibald: Through these elements, we aim to deliver resilient through-cycle earnings, robust and growing cash flows, and higher shareholder returns, all of which we are seeing in these results. Turning to growth, where we have been working hard to deliver our 2030 AUD 500 million EBIT uplift target. In North America, we are continuing to target more than AUD 200 million of improvement, anchored by North Star debottlenecking and our coated and painted strategy, including the BCP turnaround. In Australia, we are targeting more than AUD 125 million, supported by continued growth in Colorbond and TRUECORE steel, backed by the new metal coating line number 7 and the plate mill upgrade, which will enable capability, service, and quality improvements. In Asia, we are targeting a AUD 75 million uplift through capital light growth of value-add products and solutions across Southeast Asia, and we are pursuing targeted growth segments in China.

Speaker #1: Turning to growth, where we've been working hard to deliver our 2030 $500 million EBIT uplift target. In North America, we're continuing to target more than $200 million of improvement, anchored by North Star de-bottlenecking and our coated and painted strategy, including the BCP turnaround.

Speaker #1: In Australia, we're targeting more than $125 million, supported by continued growth in Colorbond and Truecore steel, backed by the new metal coating line number seven and the plate mill upgrade, which will enable capability, service, and quality improvements.

Speaker #1: In Asia, we're targeting a $75 million uplift through capital-light growth and value-add products and solutions across Southeast Asia, and we're pursuing targeted growth segments in China.

Speaker #1: In New Zealand, continued growth in colorsteel and the benefits of the newly commissioned electric arc furnace will enable the $75 million growth target.

Tania Archibald: In New Zealand, continued growth in COLORSTEEL and the benefits of the newly commissioned electric arc furnace will enable the AUD 75 million growth target. During the year, we have made good progress on the major projects which underpin earnings resilience and growth. At Erskine Park in Western Sydney, the new 240,000 ton metal coating line number 7 achieved the significant milestone of metal on strip on 4 August. Production ramp-up will continue through this H2. This is a state-of-the-art metal coating line with high levels of automation, process control, and smart technologies. The project has taken longer and cost more than initially anticipated, largely reflecting the high inflation environment for capital projects as well as the extensive wet weather delays throughout the construction period. Critically, this investment underpins our long-term supply of TRUECORE and substrate for Colorbond, both of which achieved record sales in the year.

Speaker #1: During the year, we've made good progress on the major projects, which underpin earnings resilience and growth. At Erskine Park in Western Sydney, the new 240,000-tonne metal coating line number seven achieved the significant milestone of metal-on-strip on the 4th of August.

Speaker #1: Production ramp-up will continue through this half. Now, this is a state-of-the-art metal coating line, with high levels of automation, process control, and smart technologies.

Speaker #1: Now, the project has taken longer and cost more than initially anticipated, largely reflecting the high-inflation environment for capital projects as well as the extensive wet-weather delays throughout the construction period.

Speaker #1: Now, critically, this investment underpins our long-term supply of TRUECORE® and substrate for COLORBOND®, both of which achieved record sales in the year.

Speaker #1: The new low-emissions electric arc furnace at Glenbrook in New Zealand produced the first heat of steel on the 3rd of August. Similar to the new metal coating line, ramp-up and transition to operations will occur across this half.

Tania Archibald: The new low-emissions electric arc furnace at Glenbrook in New Zealand produced the first heat of steel on 3 August. Similar to the new metal coating line, ramp-up and transition to operations will occur across this H2. This marks a key milestone for our New Zealand operations, enabling a step change in our emissions profile and, most critically, a transition to a more flexible demand-responsive production model. The North Star debottlenecking program is progressing well across all nine components, unlocking an additional 300,000 tons per annum of capacity at one of the best-positioned mini mills in North America. The overall program is running on schedule and in line with budget, with three of the project components now complete. The Port Kembla plate mill project remains on track with the processing upgrades already delivered and in operation.

Speaker #1: Now, this marks a key milestone for our New Zealand operations, enabling a step change in our emissions profile and, most critically, a transition to a more flexible, demand-responsive production model.

Speaker #1: The North Star debottlenecking program is progressing well across all nine components, unlocking an additional 300,000 tons per annum of capacity at one of the best-positioned mini mills in North America.

Speaker #1: The overall program is running on schedule and in line with budget, with three of the project components now complete. The Port Kembla Plate Mill project remains on track, with the processing upgrades already delivered and in operation.

Speaker #1: With the first phase now complete, the next phase of the project—being the product quality improvements from the new furnace—is on track for delivery mid-next calendar year.

Tania Archibald: With the first phase now complete, the next phase of the project, being the product quality improvements from the new furnace, are on track for delivery mid next calendar year. Importantly, the plate mill upgrade delivers new heavy plate capability with broader application to defense, infrastructure, and renewables projects. The transition schedule for the number 6 blast furnace reline project has been pushed back to early H2 FY27, reflecting the scale and complexity of the project, and similar to metal coating line number 7, has experienced inflation in construction costs. Number 5 blast furnace continues to perform strongly, which gives us flexibility in cut-over timing and no impact to our operating risk profile. Importantly, the number 6 reline project secures Australia's domestic supply of iron for up to the next 20 years whilst we work through our decarbonization pathway.

Speaker #1: Importantly, the plate mill upgrade delivers new heavy plate capability, with broader application to defence, infrastructure, and renewables projects. The transition schedule for the Number Six Blast Furnace reline project has been pushed back to early second half of FY27, reflecting the scale and complexity of the project, and similar to Metal Coating Line Number Seven, has experienced inflation in construction costs.

Speaker #1: Number five blast furnace continues to perform strongly, which gives us flexibility in cutover timing and no impact to our operating risk profile. But importantly, the number six reline project secures Australia's domestic supply of iron for up to the next 20 years, whilst we work through our decarbonisation pathway.

Speaker #1: On climate and sustainability, we remain firmly committed to executing our strategies and delivering on our targets. In Australia, we're exploring various pathways for decarbonisation. Now, one of these is the NEOSMELT project, where we're leading a joint venture with Rio Tinto, BHP, Woodside, and Mitsui Iron Ore Development.

Tania Archibald: On climate and sustainability, we remain firmly committed to executing our strategies and delivering on our targets. In Australia, we are exploring various pathways for decarbonization. One of these is the NeoSmelt project that we are leading in joint venture with Rio Tinto, BHP, Woodside Energy, and Mitsui Iron Ore Development. NeoSmelt is an Australian industry R&D project designed to secure the long-term future of Australia's Pilbara iron ore industry and provides BlueScope a potential decarbonization pathway. The project is aiming to build a pilot direct reduced iron and electric smelting plant designed to use blast furnace-grade Pilbara ores in DRI production, a major step forward from today's DRI technology. The partners are targeting a final investment decision by the end of this calendar year, subject to government support.

Speaker #1: NEOSMELT is an Australian industry R&D project designed to secure the long-term future of Australia's Pilbara iron ore industry, and provides BlueScope a potential decarbonisation pathway.

Speaker #1: The project is aiming to build a pilot direct reduced iron and electric smelting plant designed to use blast furnace-grade Pilbara ores in DRI production, a major step forward from today's DRI technology.

Speaker #1: The partners are targeting a final investment decision by the end of this calendar year, subject to government support. In North America, the North Star and BlueScope recycling teams are ramping up production of low-residual shred and reducing our reliance on pig iron without affecting product quality or mill efficiency.

Tania Archibald: In North America, the North Star and BlueScope Recycling teams are ramping up the production of low residual shred and reducing our reliance on pig iron without affecting product quality or mill efficiency. In New Zealand, the new EAF will deliver a step change in our site emissions by almost 50% and reduce New Zealand's overall country emissions by 1%. The EAF, coupled with geothermal power supply, also enables new lower-emissions product offerings, which we are delighted to bring to market. None of these investments have been straightforward, but they also underline two critical themes for manufacturing. Firstly, a reminder that capital is mobile and seeks the best risk-adjusted return. Stable, competitive, and predictable policy settings attract long-term investment, while uncertainty and structural cost disadvantage discourage it. Secondly, where the manufacturing industry is today in Australia is largely the product of policy choices made over the decades.

Speaker #1: In New Zealand, the new EAF will deliver a step change in our site emissions by almost 50%, and reduce New Zealand's overall country emissions by 1%.

Speaker #1: The EAF, coupled with geothermal power supply, also enables new lower-emissions product offerings, which we're delighted to bring to market. None of these investments have been straightforward, but they also underline two critical themes for manufacturing.

Speaker #1: Firstly, a reminder that capital is mobile and seeks the best risk-adjusted return. Stable, competitive, and predictable policy settings attract long-term investment, while uncertainty and structural cost disadvantages discourage it.

Speaker #1: Secondly, where the manufacturing industry is today in Australia is largely the product of policy choices made over the decades. While other nations have competed intensely for manufacturing investment through a variety of strategies, Australia has largely stayed on the sidelines.

Tania Archibald: While other nations have competed intensely for manufacturing investment through a variety of strategies, Australia has largely stayed on the sidelines. Now is the time to change that. Australia's Future Made in Australia agenda is the most significant shift in industrial policy in a generation, and it provides a very real opportunity to reshape Australia's future. Public policy settings should help create the conditions that allow globally competitive manufacturers to invest, grow, and succeed. In turn, strong financial performance underwrites continued investment in capability and innovation, including lower-emission steel making. At BlueScope, we remain committed to a vibrant and competitive manufacturing base in Australia for the long term. That is why we continue to advocate for structural reform of Australia's energy market.

Speaker #1: Now is the time to change that. Australia's Future Made in Australia agenda is the most significant shift in industrial policy in a generation, and it provides a very real opportunity to reshape Australia's future.

Speaker #1: Public policy settings should help create the conditions that allow globally competitive manufacturers to invest, grow, and succeed. In turn, strong financial performance underwrites continued investment in capability and innovation, including lower-emissions steelmaking.

Speaker #1: At BlueScope, we remain committed to a vibrant and competitive manufacturing base in Australia for the long term. That's why we continue to advocate for structural reform of Australia's energy market.

Speaker #1: It's why we support a level playing field via an effective trade remedies regime, and it's why we continue to drive project NEOSMELT, which has the potential to lay the foundations for a green iron export industry.

Tania Archibald: It is why we support a level playing field via an effective trade remedies regime, and it is why we continue to drive Project NeoSmelt, which has the potential to lay the foundations for a green iron export industry. Moving to cost and productivity. We fully completed our initial AUD 200 million cost and productivity program in the half, which was a great outcome. Earlier this year, we went further and established an additional cost reduction target of AUD 150 million on a gross basis. We have exceeded delivery of this target, so we now expect the full AUD 150 million to flow into FY27 as a net benefit. The team has done a fantastic job executing on this target and resetting our functional operating model. The result is a simpler, leaner, more agile BlueScope.

Speaker #1: Moving to cost and productivity, we fully completed our initial $200 million cost and productivity program in the half, which was a great outcome.

Speaker #1: Earlier this year, we went further and established an additional cost reduction target of $150 million on a gross basis. Now, we've exceeded delivery of this target, so we now expect the full $150 million to flow into FY27 as a net benefit. The team has done a fantastic job executing on this target and resetting our functional operating model.

Speaker #1: The result is a simpler, leaner, more agile BlueScope. On property, our overarching objective is to accelerate the delivery of value from our 1,200-hectare portfolio, which sits in sought-after industrial locations with proximity to port, rail, and energy infrastructure.

Tania Archibald: On property, our overarching objective is to accelerate the delivery of value from our 1,200-hectare portfolio, which sits in sought-after industrial locations with proximity to port, rail, and energy infrastructure. As a reminder, over 60% of the total portfolio is already appropriately zoned and able to be developed. Across the year, we made great progress with activities ranging from planning and zoning to development activities and sales. Moving into FY27, our focus is on progressing the logistics hub at Western Port as we commence the process of shortlisting proposals and the commercial and structuring work that supports value delivery from this initiative. We are also progressing opportunities for Port Kembla that are complementary to our manufacturing operations, including a focus on the development of an energy precinct, along with other planning and development activities. On shareholder returns, to quickly recap.

Speaker #1: Now, as a reminder, over 60% of the total portfolio is already appropriately zoned and able to be developed. Across the year, we made great progress with activities ranging from planning and zoning, to development activities and sales.

Speaker #1: Moving into FY27, our focus is on progressing the logistics hub at Western Port, as we have commenced the process of shortlisting proposals and undertaking the commercial and structuring work that supports value delivery from this initiative.

Speaker #1: We're also progressing opportunities for Port Kembla that are complementary to our manufacturing operations, including a focus on the development of an energy precinct, along with other planning and development activities.

Speaker #1: On shareholder returns, to quickly recap, in February we announced a plan to deliver $3 per share in returns in calendar year 2026, representing a material step up in distributions to approximately $1.3 billion, which is around 10% of BlueScope’s market cap.

Tania Archibald: In February, we announced a plan to deliver AUD 3 per share in returns in calendar year 2026, representing a material step-up in distributions to approximately AUD 1.3 billion, which is around 10% of BlueScope's market cap. With today's dividend announcement, this plan is being fully delivered. Given the ramp down in our major capital investment program and the ramp-up in cash generation, we have announced a plan to repeat the AUD 3 share returns in calendar year 2027. This plan is supported by a robust balance sheet. Before I hand over to David, let me step back and cover the macro and industry backdrop and the longer-term opportunities across our business. In Australia, construction activity remains resilient, supported by housing, infrastructure, and non-residential demand, and the medium-term outlook is underpinned by favorable demographics and a sustained housing shortage.

Speaker #1: With today's dividend announcement, this plan is being fully delivered. Given the ramp down in our major capital investment program and the ramp up in cash generation, we've announced a plan to repeat the $3 share returns in calendar year '27.

Speaker #1: This plan is supported by a robust balance sheet. Before I hand over to David, let me step back and cover the macro and industry backdrop, as well as the longer-term opportunities across our business.

Speaker #1: In Australia, construction activity remains resilient, supported by housing, infrastructure, and non-residential demand. The medium-term outlook is underpinned by favourable demographics and a sustained housing shortage.

Speaker #1: Value-add and branded products remain key drivers of volume growth, as our products and systems continue to gain traction. As for spreads, regional overcapacity driven by record levels of exports from China continues to pressure spreads and margins in the Australian business.

Tania Archibald: Value-add and branded products remain key drivers of volume growth as our products and systems continue to gain traction. As for spreads, regional overcapacity, driven by record levels of exports from China, continue to pressure spreads and margins in the Australian business. The Australian business has proved to be extraordinarily resilient in the face of the sustained low-spread environment, with a firm focus on cost and productivity and continuing to grow the value-add portfolio, providing tremendous upside operating leverage. In the United States, demand remains supportive across our key markets of auto, non-residential construction, and manufacturing. The data center rollout and broader e-commerce infrastructure have underpinned solid non-residential construction demand. More broadly, North America continues to be a great place to make and sell steel. The regulatory and industry environment is favorable and supportive of the demand outlook across steel-consuming sectors.

Speaker #1: The Australian business has proved to be extraordinarily resilient in the face of the sustained low-spread environment, with a firm focus on cost and productivity, and continuing to grow the value-add portfolio, providing tremendous upside operating leverage.

Speaker #1: In the United States, demand remains supportive across our key markets of auto, non-residential construction, and manufacturing. The data centre rollout and broader e-commerce infrastructure have underpinned solid non-residential construction demand.

Speaker #1: More broadly, North America continues to be a great place to make and sell steel. The regulatory and industry environment is favourable and supportive of the demand outlook across steel-consuming sectors.

Speaker #1: And our footprint and quality of assets position us well to capture continued economic growth. We also have a clear runway to grow, with the incremental expansion at North Star adding low-cost capacity into a market that remains structurally short of steel.

Tania Archibald: Our footprint and quality of assets position us well to capture continued economic growth. We also have a clear runway to grow with the incremental expansion at North Star, adding low-cost capacity into a market that remains structurally short of steel. Across Southeast Asia, we have an outstanding footprint across every major economy. The region is becoming increasingly attuned to the value proposition that BlueScope has spent the best part of six decades embedding. Our positions are well-established, with latent capacity to capture growth in this fast-growing and dynamic region. In New Zealand, demand conditions have been soft, though we are starting to see signs of recovery. Much like Australia, favorable trends in demographics and demand will drive medium to longer-term volume growth for our product suite, including the new low-emissions offerings enabled by the EAF.

Speaker #1: Across Southeast Asia, we have an outstanding footprint across every major economy. The region is becoming increasingly attuned to the value proposition that BlueScope has spent the best part of six decades embedding.

Speaker #1: Our positions are well established, with latent capacity to capture growth in this fast-growing and dynamic region. In New Zealand, demand conditions have been soft, though we're starting to see signs of recovery.

Speaker #1: Much like Australia, favourable trends in demographics and demand will drive medium- to longer-term volume growth for our product suite, including the new low-emissions offerings enabled by the EAF.

Speaker #1: While I set out a constructive picture on demand across most of our regions, cost escalation remains a persistent challenge. It was compounded this year by the Middle East conflict, flowing through to fuel, freight, and input materials, and it underlines why a relentless focus on cost and productivity sits at the heart of how we run this business.

Tania Archibald: Whilst I set out a constructive picture on demand across most of our regions, cost escalation remains the persistent challenge. It was compounded this year by the Middle East conflict, flowing through to fuel, freight, and input materials, and it underlines why a relentless focus on cost and productivity sits at the heart of how we run this business. Above all, it is the design of our portfolio that delivers value through the cycle, positioning us to capture our targeted growth while absorbing the headwinds along the way. I will now hand over to David to take you through our regional performance and the financial framework.

Speaker #1: Above all, it's the design of our portfolio that delivers value through the cycle, positioning us to capture our targeted growth while absorbing the headwinds along the way.

Speaker #1: I'll now hand over to David to take you through our regional performance and the financial framework.

Speaker #2: Thanks, Tanya, and good morning, everyone. Turning to the regional performance, starting with Australia, which delivered underlying EBIT of $188 million in the financial year, with second half EBIT of $66 million.

David Fallu: Thanks, Tania, and good morning, everyone. Turning to the regional performance, starting with Australia, which delivered underlying EBIT of AUD 188 million in the financial year, with a H2 EBIT of AUD 66 million. Domestic dispatches increased to 1.15 million tonnes in the half, driven by residential and non-residential construction demand, with COLORBOND and TRUECORE steel hitting a record volume with 654 and 155,000 tonnes in the year respectively. The result reflects sustained low Asian steel spreads and a non-repeat of one-offs, partly offset by cost, productivity, and value-added volume gains. As an integrated modern manufacturer in Australia, our priority is to keep growing domestic and value-added volumes while reducing costs to support margins. With performance remaining challenged by soft regional spreads, you can see the importance of focusing on shifting more volume to domestic sales and more of those sales toward value-added and premium branded products.

Speaker #2: Domestic dispatches increased to 1.15 million tonnes in the half, driven by residential and non-residential construction demand. With COLORBOND and TRUECORE steel hitting a record volume, with 654,000 and 155,000 tonnes in the year, respectively.

Speaker #2: The result reflects sustained low Asian steel spreads and a non-repeat of one-offs, partly offset by cost, productivity, and value-added volume gains. As an integrated, modern manufacturer in Australia, our priority is to keep growing domestic and value-added volumes while reducing costs to support margins.

Speaker #2: With performance remaining challenged by soft regional spreads, you can see the importance of focusing on shifting more volume to domestic sales, and more of those sales toward value-added and premium branded products. Pleasingly, that trend has continued with our record COLORBOND and TRUECORE volumes this year.

David Fallu: And pleasingly, that trend has continued with our record COLORBOND and TRUECORE volumes this year. Cost also remains critical, and the operating model reset has helped in this space. Our work here needs to be ongoing, not only to offset inflation, but to enhance our earnings profile in concert with the work on value-added growth. Turning to North America, North Star delivered underlying EBIT of just over AUD 800 million in FY26, with a H2 EBIT of AUD 484 million, up 50% on the prior half on materially stronger realized spreads and increased production capacity. We expect to see further benefit of the significant benchmark spread increase flow into FY27 due to the nature of longer pricing lags and other pricing mechanisms that cover around a quarter of North Star's sales book.

Speaker #2: Cost also remains critical, and the operating model reset has helped in this space. But our work here needs to be ongoing—not only to offset inflation, but to enhance our earnings profile in concert with the work on value-added growth.

Speaker #2: Turning to North America, Northstar delivered underlying EBIT of just over $800 million in FY26, with a second half EBIT of $484 million, up 50% on the prior half on materially stronger realised spreads and increased production capacity.

Speaker #2: We expect to see further benefit from the significant benchmark spread increase flow into FY27, due to the nature of longer pricing lags and other pricing mechanisms that cover around a quarter of North Star's sales book.

Speaker #2: The business continued to operate at full utilisation and effectively managed its cost base to negate conversion cost increases in the half. North Star remains an outstanding asset, with its continued margin outperformance relative to peers due to operational capability, geographical location, and a strong performance culture.

David Fallu: The business continued to operate at full utilization and effectively managed its cost base to negate conversion cost increases in the half. North Star remains an outstanding asset with its continued margin outperformance relative to peers due to operational capability, geographical location, and a strong performance culture. We continue to unlock capacity in the mill to grow our volumes and earnings from this great business. Buildings and Coated Products North America delivered an EBIT of AUD 230 million in FY26, with a H2 EBIT of AUD 101 million, 20% lower than the prior half. Across the segment's three component businesses, BlueScope Buildings' performance softened slightly in the half, with some seasonality and slightly lower volumes due to a temporary lull in new project work six to 12 months prior to the period as the market digested a range of trade policies and measures following Liberation Day.

Speaker #2: We continue to unlock capacity in the mill to grow our volumes and earnings from this great business. Buildings and Coated Products North America delivered an EBIT of $230 million in FY26, with a second half EBIT of $101 million, 20% lower than the prior half.

Speaker #2: Across the segments, three component businesses, BlueScope Buildings' performance softened slightly in the half, with some seasonality and slightly lower volumes due to a temporary lull in new project work six to twelve months prior to the period, as the market digested a range of trade policies and measures following Liberation Day.

Speaker #2: BCP performed in line with expectations, delivering a loss for the half; however, there was an improving performance across the period. Steelscape's performance also improved on higher volumes as demand recovered from the prior period's tariff-related volatility.

David Fallu: BCP performed in line with expectations, delivering a loss for the half, however, an improving performance across the period. Steelscape's performance improved on higher volumes as demand recovered from the prior period's tariff-related volatility. Across North America, our priorities are continue to maximize volumes at North Star, expand buildings where returns are clear, selectively grow downstream value, and deliver the turnaround of BCP. We are well-positioned for growth in the region, and the successful execution of these priorities support the longer-term opportunity of bringing our painted steel value proposition to the North American market. Asia delivered underlying EBIT of AUD 177 million in FY26, with a H2 EBIT of AUD 81 million, down around 15% on the prior half. The region is delivering strong returns, with further upside to be realized from its unrivaled footprint for regional growth.

Speaker #2: Across North America, our priorities are to continue to maximise volumes at North Star, expand buildings where returns are clear, selectively grow downstream value, and deliver the turnaround of BCP.

Speaker #2: We are well positioned for growth in the region, and the successful execution of these priorities supports the longer-term opportunity of bringing our painted steel value proposition to the North American market.

Speaker #2: Asia delivered underlying EBIT of $177 million in FY26, with a second half EBIT of $81 million, down around 15% on the prior half.

Speaker #2: The region is delivering strong returns, with further upside to be realized from its unrivaled footprint for regional growth. Southeast Asia had a record year, with all countries showing improvement from sales and marketing initiatives and operational excellence.

David Fallu: Southeast Asia had a record year, with all countries showing improvement from sales and marketing initiatives and operational excellence. The opportunity here is significant, not only from the strong positions our brands have in the market and the demographic tailwinds in the region, but also from the significant latency we have in the region to capture this growth, making it a very capital-efficient opportunity. China was lower than the prior year on seasonality and weak domestic conditions. As we previously announced, we completed the sale of our 50% interest in Tata BlueScope Steel during the year. Our priority across this business is to strengthen customer propositions and selectively expand higher-value downstream solutions as the markets continue to mature. New Zealand and Pacific Islands recorded an underlying EBIT loss of AUD 1 million in FY26, with a H2 EBIT of AUD 16 million.

Speaker #2: The opportunity here is significant, not only from the strong positions our brands have in the market and the demographic tailwinds in the region, but also from the significant latency we have in the region to capture this growth, making it a very capital-efficient opportunity.

Speaker #2: China was lower than the prior year due to seasonality and weak domestic conditions. As we've previously announced, we completed the sale of our 50% interest in Tata BlueScope Steel during the year.

Speaker #2: Our priority across this business is to strengthen customer propositions and selectively expand higher value downstream solutions as the markets continue to mature. New Zealand and Pacific Islands recorded an underlying EBIT loss of $1 million in FY26, with a second half EBIT of $16 million.

Speaker #2: The result was thanks to improved product mix, as CallaSteel delivered a record performance despite softer conditions, along with improved cost performance. The AF installation was largely finished at the end of the financial year, which is a fundamental strategic reset of the business.

David Fallu: The result was thanks to improved product mix, as COLORSTEEL delivered a record performance despite softer conditions, along with an improved cost performance. The EAF installation was largely finished at the end of the financial year, which is a fundamental strategic reset of the business. The EAF will reshape the earnings and emissions profile of the business, with the benefits starting to flow through and a full run rate following the FY27 transition year. Turning to the drivers of the year-on-year movements in underlying EBIT. Looking at FY26 versus FY25, the largest contributor was a material lift in net spreads, driven predominantly by stronger realized pricing at North Star. Volume and mix contributed positively, reflecting the stronger domestic volumes in Australia and continued growth in premium branded products, including Colorbond, TRUECORE, and COLORSTEEL.

Speaker #2: The EAF will reshape the earnings and emissions profile of the business, with the benefits starting to flow through and a full run rate following the FY27 transition year.

Speaker #2: Turning to the drivers of the year-on-year movements in underlying EBIT, looking at FY26 versus FY25, the largest contributor was a material lift in net spreads, driven predominantly by stronger realised pricing at North Star.

Speaker #2: Volume and mix contribute positively, reflecting the stronger domestic volumes in Australia and continued growth in premium branded products, including COLORBOND®, TRUECORE®, and GALVSTEEL®. Conversion costs and other costs reflected the benefit of our cost and productivity program, offset with inflation and escalation.

David Fallu: Conversion costs and other costs reflected the benefit of our cost and productivity program, offset with inflation and escalation. As a reminder, our cost and productivity program benefits are not just sitting in conversion costs. They are across a range of buckets, most notably raw material costs, which actually more than offset higher conversion costs in the year. Comparing the H2 of FY26 to the H1, similar dynamics applied. Looking at the guidance period across our regions, noting the group H1 FY26 guidance range and assumptions Tania mentioned earlier. In North America, we expect a result more than one-third higher than the H2 of FY26, with North Star benefiting from stronger benchmark spreads and improved cost performance. Within BCPNA, improved volumes and ongoing turnaround initiatives support a stronger result.

Speaker #2: As a reminder, our cost and productivity program benefits are not just sitting in conversion costs. They're spread across a range of buckets, most notably raw material costs, which actually more than offset higher conversion costs in the year.

Speaker #2: Comparing the second half of FY26 to the first, similar dynamics applied. Looking at the guidance period across our regions, and noting the Group first half FY27 guidance range and assumptions Tanya mentioned earlier, in North America we expect a result more than one-third higher than the second half of FY26.

Speaker #2: With North Star benefiting from stronger benchmark spreads and improved cost performance. Within BCP&A, improved volumes and ongoing turnaround initiatives support a stronger result. In Australia, we expect a result around two-thirds higher than the second half of FY26, driven by higher realised spreads, stronger domestic volumes, and continued cost discipline, with impacts from major projects transitions reflected in the outlook.

David Fallu: In Australia, we expect a result around two-thirds higher than the H2 of FY26, driven by higher realized spreads, stronger domestic volumes, and continued cost discipline, with impacts from major projects transitions reflected in the outlook. In New Zealand and Pacific Islands, earnings are expected to be around one-third lower than the H2 of FY26, largely reflecting EAF commissioning impacts, partly offset by improved benchmark pricing. In Asia, we expect performance broadly in line with the H2 of FY26, with seasonally softer conditions in Southeast Asia offset by stronger seasonality in China. Finally, corporate and group is expected to be approaching three times the H2 of FY26 result. This primarily reflects a non-repeat of the AUD 76 million West Dapto land sale profit recognized in the prior period.

Speaker #2: In New Zealand and the Pacific Islands, earnings are expected to be around one-third lower than in the second half of FY26, largely reflecting EAF commissioning impacts, partly offset by improved benchmark pricing.

Speaker #2: In Asia, we expect performance broadly in line with the second half of FY26, with seasonally softer conditions in Southeast Asia offset by stronger seasonality in China.

Speaker #2: Finally, Corporate and Group is expected to be approaching three times the second half FY26 result. This primarily reflects a non-repeat of the $76 million West APTO land sale profit recognised in the prior period.

Speaker #2: Turning to our financial framework, which remains a critical guiding document and is central to how we run the company. The framework remains unchanged; however, we've evolved the settings within it to reflect a stronger, more resilient earnings base, materially improved cash generation, and confidence in the trajectory of capital expenditure within our growth projects now nearing completion.

David Fallu: Turning to our financial framework, which remains a critical guiding document and it's central to how we run the company. Framework remained unchanged. However, we've evolved the settings within it to reflect a stronger, more resilient earnings base, materially improved cash generations, and confidence in the trajectory of capital expenditure within our growth projects now nearing completion. As we've noted in recent years, ROIC has been impacted by the once-in-a-generation capital program, adding to our operating asset base, while Asian spreads have held at bottom-of-the-cycle levels. In the year, ROIC improved, thanks to improved contributions from North America and continued strength in Asia. On cash flows, in FY26, free cash flow was AUD 240 million, impacted by our peak CapEx.

Speaker #2: As we've noted in recent years, Roike has been impacted by the once-in-a-generation capital program, adding to our operating asset base, while Asian spreads have held at the bottom-of-the-cycle levels.

Speaker #2: In the year, Roike improved, thanks to stronger contributions from North America and continued strength in Asia. On cash flows, in FY26, free cash flow was $240 million, impacted by our peak capex.

Speaker #2: As a reminder, shareholder returns are paid from operating cash flows less sustaining capex, with the commitment to distribute at least 75% of this number.

David Fallu: As a reminder, shareholder returns are paid from operating cash flows less sustaining CapEx, with the commitment to distribute at least 75% of this number. Importantly, with peak CapEx now behind us, the cash flows available to fund distributions will be materially higher going forwards. Turning to our balance sheet, net debt at year-end was AUD 600 million, well within our target range, thanks to stronger US spreads and specific timings of cash flows. We also have ample liquidity, and we've taken the opportunity to enhance this position further in July to ensure a frankly rock-solid maturity profile. The combination of the balance sheet position and liquidity gives us a great platform to support our planned returns in calendar year 2027. Capital expenditure was AUD 1.5 billion for the year, in line with expectations, with the H2 being our peak CapEx for the half. The profile steps down from here.

Speaker #2: Importantly, with peak capex now behind us, the cash flows available to fund distributions will be materially higher going forward. Turning to our balance sheet, net debt at year end was $600 million, well within our target range thanks to stronger US spreads and specific timing of cash flows.

Speaker #2: We also have ample liquidity, and we've taken the opportunity to enhance this position further in July to ensure a, frankly, rock-solid maturity profile. The combination of the balance sheet position and liquidity gives us a great platform to support our planned returns in calendar year '27.

Speaker #2: Capital expenditure was $1.5 billion for the year, in line with expectations, with the second half being our peak capex period. The profile steps down from here.

Speaker #2: FY27 capex remains slightly elevated as we complete the remaining $500 million of the program before normalising further. As a reminder, our typical annual capital expenditure is approximately $600 to $700 million, with around $450 to $500 million in sustaining capex and foundational spend, and typically a further $100 to $200 million in organic and incremental growth and investments.

David Fallu: FY27 CapEx remains slightly elevated as we complete the remaining AUD 500 million of the program before normalizing further. As a reminder, our typical annual capital expenditure is approximately AUD 600 to AUD 700 million, with around AUD 450 to AUD 500 million in sustaining CapEx and foundational spend, and typically a further AUD 100 to AUD 200 million in organic and incremental growth investments. On shareholder returns, this calendar year saw us accelerate the step-up in distributions with a plan to deliver AUD 3 per share in calendar year 2026 and AUD 1.65 per share paid during the half. As noted, the board today approved the unfranked final ordinary dividend of AUD 0.65 per share, as well as a AUD 0.70 per share unfranked special dividend as an alternative distribution to the previously flagged AUD 310 million buyback program, which we've been unable to execute during the period.

Speaker #2: On shareholder returns, this calendar year saw us accelerate the step-up in distributions, with a plan to deliver $3.00 per share in calendar year '26 and $1.65 per share paid during the half.

Speaker #2: As noted, the Board today approved the unfranked final ordinary dividend of 65 cents per share, as well as a 70 cent per share unfranked special dividend, as an alternative distribution to the previously flagged $310 million buyback program, which we've been unable to execute during the period.

Speaker #2: This sees us fully deliver our calendar year '26 plan, with approximately $1.3 billion in distributions this calendar year. This level is significantly higher than the periods in the decades prior, by a significant margin.

David Fallu: This sees us fully deliver our calendar year 2026 plan with approximately AUD 1.3 billion in distributions this calendar year. This level is significantly higher than the periods in the decades prior by a significant margin. As we look ahead, we've announced today that we plan to deliver at least a further AUD 3 per share in calendar year 2027. With the rebased ordinary dividend complemented by other methods such as special dividends and buybacks where available. BlueScope has always been a highly cash-generative business, with the last few years seeing this directed to our major investment program. Clearly, we're getting back to more normal cash flow numbers, which support the stronger return levels. As such, it's exciting to see that our approach in this space is designed to be sustained, not one-off. With that, I'll hand back to Tania.

Speaker #2: As we look ahead, we've announced today that we plan to deliver at least a further $3 per share in calendar year '27, with the rebased ordinary dividend complemented by other methods, such as special dividends and buybacks, where available.

Speaker #2: BlueScope has always been a highly cash-generative business, with the last few years seeing this directed to our major investment program. Clearly, we're getting back to more normal cash flow numbers, which support the stronger return levels.

Speaker #2: As such, it's exciting to see that our approach in this space is designed to be sustained, not a one-off. And with that, I'll hand back to Tanya.

Speaker #1: Thank you, David. Before we take your questions, I want to reiterate a number of points. The results today demonstrate the strength of the portfolio and our execution capability.

Tania Archibald: Thank you, David. Before we take your questions, I want to reiterate a number of points. The results today demonstrate the strength of the portfolio and our execution capability. Earlier this year, we committed to accelerating the delivery of value. We have delivered on our commitments over the last half, and we will continue this work into FY27. With the major investment period ramping down, we are ramping up returns to shareholders with a significant increase in calendar year 2026, planned to be repeated in calendar year 2027. BlueScope enters this next phase from a position of real strength as a lean, modern manufacturer of high-quality steel products, systems, and solutions that our customers know and trust. I want to close by thanking our people for their dedication through a demanding year, our customers and partners for their trust, and our shareholders for their continued support.

Speaker #1: Earlier this year, we committed to accelerating the delivery of value. We've delivered on our commitments over the last half, and will continue this work into FY27.

Speaker #1: With the major investment period ramping down, we're ramping up returns to shareholders with a significant increase in calendar year 2026, planned to be repeated in calendar year 2027.

Speaker #1: BlueScope enters this next phase from a position of real strength as a lean, modern manufacturer of high-quality steel products, systems, and solutions that our customers know and trust.

Tania Archibald: BlueScope enters this next phase from a position of real strength as a lean, modern manufacturer of high-quality steel products, systems, and solutions that our customers know and trust. I want to close by thanking our people for their dedication through a demanding year, our customers and partners for their trust, and our shareholders for their continued support. With that, we will open the line for questions.

Speaker #1: I want to close by thanking our people for their dedication through a demanding year; our customers and partners for their trust; and our shareholders for their continued support.

Speaker #1: And with that, we'll open the line for questions.

Tania Archibald: With that, we will open the line for questions.

Speaker #3: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.

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 are on a speakerphone, please pick up the handset to ask your your question. Your first question today comes from Ramoun Lazar with Jefferies. Please go ahead.

Operator: Thank you. Your first question today comes from Ramoun Lazar with Jefferies. Please go ahead.

Speaker #3: If you're on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Ramon Lazar with Jefferies. Please go ahead.

Speaker #1: Morning, Ramon.

Tania Archibald: Morning, Ramon.

Ramoun Lazar: Hi, Tania. Hi, David. How are you? Hi, David. Hi, Tania. Just a couple of quick ones from me. Maybe if we can dive into the ASP performance a bit more in the H1. Look, revenue per ton was a step up across that business. I am just trying to break down, what were some of the drags in that H2 that you saw impacting those results? Then for the H1, if you could maybe just outline your expectations around the transitional impacts from the BF6 delays and the MCL7 ramp-up. That would be helpful in trying to get to a baseline earnings number for this business going forward.

Speaker #4: Hi, Tanya. Hi, David. How are you? Hi, David. Hi, Tanya. Just a couple of quick ones from me. Maybe if we can dive into the ASP performance a bit more in the half.

Speaker #4: Look, revenue per tonne was a step up across that business, so I'm just trying to break down what were some of the drags in that second half that you saw impacting those results.

Speaker #4: And then, for the first half, if you could maybe just outline your expectations around the transitional impacts from the BF6 delays and the MCL7 ramp-up, that would be helpful in trying to get to a baseline earnings number for this business going forward.

Tania Archibald: Yeah. Sorry, you go.

Speaker #1: Yeah. Sorry, you go.

Speaker #4: Yeah, no, Ramon. Look, I guess just in terms of the specifics around some of the ASP performance, I mean, there was a component of one-off benefits not being repeated in the second half.

David Fallu: Yeah, no, Ramon, look, I guess just in terms of the specific around some of the ASP performance, there was a component of one-off benefits not being repeated in the H2. You will recall that H1, we had a one-off tax benefit in the H1 period, which wasn't reported. Then, as we are working through the stages of Blast Furnace 6 transition, that has an implication for some of the operational costs that we saw in that H2.

Speaker #4: You'll recall that in the first half, we had a one-off tax benefit in the period, which wasn't repeated. And then, as we're working through the stages of the Blast Furnace 6 transition, that has an implication for some of the operational costs that we saw in the second half.

Speaker #1: Probably what's also worth adding in terms of the performance in the second half— we're working with the law of low numbers; there are a lot of moving parts within the ASP.

Tania Archibald: Probably what is also worth adding, in terms of the performance in the H2, we are working with the law of low numbers. There is a lot of moving parts within ASP. It only takes a few things to occur, and it looks like it sort of has a significant impact. If I sit back and look at the business, the cost and productivity performance in Australia has been very, very strong. The fact that we are selling record levels of Colorbond and TRUECORE. Thankfully, we have managed to start up metal coating line number 7. It is now in the ramp-up phase. That has got to underpin that long-term growth. In Colorbond and TRUECORE, we think there is a lot of upside there. What we are dealing with is reasonably solid demand in Australia, but we have a very low spread environment, probably a bit of an impact from FX as well.

Speaker #1: It only takes a few things to occur, and it looks like it has a significant impact. If I sit back and look at the business, the cost and productivity performance in Australia has been very, very strong.

Speaker #1: The fact that we're selling record levels of Colorbond and Truecore—thankfully, we've managed to start up metal coating line number seven. It's now in the ramp-up phase.

Speaker #1: That's going to underpin that long-term growth in Colorbond and Truecore. We think there's a lot of upside there. What we're dealing with is reasonably solid demand in Australia, but we have a very low spread environment—probably a bit of an impact from FX as well.

Tania Archibald: In Colorbond and TRUECORE, we think there is a lot of upside there. What we are dealing with is reasonably solid demand in Australia, but we have a very low spread environment, probably a bit of an impact from FX as well. We are dealing with the lag impacts. The way the lag spreads work is probably one of the toughest spread environments that we have seen. The fact that the Australian business is still profitable, it has demonstrated enormous resilience, and it says to me that we have tremendous upside in the business. In terms of the outlook into the H2, there are a few factors, again, dealing with the low numbers.

Speaker #1: But we're dealing with probably a—with the lag impacts, the way the lag spreads work, it was probably one of the toughest spread environments that we've seen.

Tania Archibald: We are dealing with the lag impacts. The way the lag spreads work is probably one of the toughest spread environments that we have seen. The fact that the Australian business is still profitable, it has demonstrated enormous resilience, and it says to me that we have tremendous upside in the business. In terms of the outlook into the H2, there are a few factors, again, dealing with the low numbers. There are a few things like we ran a particular trial, in Q4 2026, around using some higher pellets and lump. It was part of a decarbonization trial. That drove up the cost, which then lagged into the H2.

Speaker #1: So the fact that the Australian business is still profitable has demonstrated enormous resilience, and it seems to me that we have tremendous upside in the business.

Speaker #1: In terms of the outlook into the second half, there are a few factors again dealing with the law of low numbers. There are a few things, like we ran a particular trial in the fourth quarter of '26 around using some higher pellets and lump.

Tania Archibald: There are a few things like we ran a particular trial, in Q4 2026, around using some higher pellets and lump. It was part of a decarbonization trial. That drove up the cost, which then lagged into the H2. There is probably a little bit of disruption, I think, in terms of how to think about the lags on iron ore and coal, because what we are doing is building up a bit of stock, in terms of the transition for the blast furnace. That will disrupt what you would have as the normal lags for iron ore and coal.

Speaker #1: It was part of the decarbonisation trial, and that's driven up the cost, which then lagged into the second half. There's probably a little bit of disruption, I think, in terms of how to think about the lags on iron ore and coal, because what we're doing is building up a bit of stock in terms of the transition for the blast furnace.

Tania Archibald: There is probably a little bit of disruption, I think, in terms of how to think about the lags on iron ore and coal, because what we are doing is building up a bit of stock, in terms of the transition for the blast furnace. That will disrupt what you would have as the normal lags for iron ore and coal.

Speaker #1: And so that'll disrupt what you would have as the normal lags for iron ore and coal.

Speaker #4: Got it. Any sort of quantification of those impacts, Tanya or David? That could help us into the first half.

Ramoun Lazar: Got it. Any sort of quantification of those impacts, Tania or David, that could help us?

David Fallu: Well, I think-

David Fallu: Well, I think- into the H1. Well, I think what we will look to do, Ramon, is probably more an overall review once we have gone through the transition of BF6, to see if we can provide you with additional help around the lags that you are seeing. But in terms of the overall impacts from what Tania was referring to specifically, that is about between AUD 20 to AUD 30 million impact.

Ramoun Lazar: into the H1.

Speaker #2: Look, I think what we'll look to do, Ramon, is probably more an overall review once we've gone through the transition of Blast Furnace 6, to see if we can provide you with additional help around the sort of lags that you're seeing.

David Fallu: Well, I think what we will look to do, Ramon, is probably more an overall review once we have gone through the transition of BF6, to see if we can provide you with additional help around the lags that you are seeing. But in terms of the overall impacts from what Tania was referring to specifically, that is about between AUD 20 to AUD 30 million impact.

Speaker #2: But in terms of the overall sort of impacts from what Tanya was referring to specifically, that's about a $20 to $30 million impact.

Speaker #4: Okay, well, that's helpful. All right, and then just the second one—just on North America and the pricing lags there. My understanding is there's a proportion of those tonnes that are now contracted on a fixed price basis or on formulas under a fixed price basis.

Ramoun Lazar: Well, that is helpful. All right. Then just the second one, just on North America and the pricing lags there. My understanding is there is a proportion of those tons that are now contracted on a fixed-price basis or on formulas under a fixed-price basis. Can you maybe just touch on those, Tania or David, how they are impacting the H1, and then when those potentially get reset, and I guess, is that a tailwind or a headwind into the H2?

Speaker #4: Can you maybe just touch on those, Tanya or David—how they're impacting the first half? And then, when those potentially pass, is that a tailwind or headwind into the second half?

Speaker #1: Yeah, so the fixed price or fixed spread contracts, they've actually always been there. They've always been part of the mix. It's something that we decided to ramp up a little bit more post the expansion.

Tania Archibald: Yeah. So the fixed-price or fixed spread contracts, they have actually always been there. They have always been part of the mix. It is something that we decided to ramp up a little bit more post the expansion, and it just goes to how we target and partner with customers for the long term. For the longer-term perspective, it does reduce volatility, but I appreciate that when you have movements in the index in the short term, it can create a bit of more of the near-term volatility. So it is more pronounced when you have got these higher movements. I do not think they are necessarily going to go away. I think they will be an important part of the book going forward, not necessarily changing the component, but I think they are going to be there.

Speaker #1: And it just goes to how we target and partner with customers for the long term for the longer term perspective. It does reduce volatility, but I appreciate that when you have movements in the index, in the short term, it can create a bit of more of the near term you've got these high movements.

Speaker #1: I don't think they're necessarily going to go away. I think they will be an important part of the book going forward—not necessarily changing the component, but I think they're going to be there.

Tania Archibald: I think they will be an important part of the book going forward, not necessarily changing the component, but I think they are going to be there. But I think it is also about how we think about the longer term, how we protect in down cycle conditions as well. So it is really just a bit of longer-term thinking. Now, they do reset at the end of each calendar year. So it is not like they are a permanent structure. There is a renegotiation that occurs every year. Would you like to add anything there, David?

Speaker #1: But I think it's also about how we think about the longer term, how we protect in down-cycle conditions as well. So, it's really just a bit of longer-term thinking.

Tania Archibald: But I think it is also about how we think about the longer term, how we protect in down cycle conditions as well. So it is really just a bit of longer-term thinking. Now, they do reset at the end of each calendar year. So it is not like they are a permanent structure. There is a renegotiation that occurs every year. Would you like to add anything there, David?

Speaker #1: Now, they do reset at the end of each calendar year, so it's not like they're a permanent structure. There is a renegotiation that occurs every year.

Speaker #1: Would you like to add anything there, David?

Speaker #2: No, look, effectively, Ramon, it's a bit of a component of how we hedge the sales book. These are typically contracts that are a lot stickier.

David Fallu: No. Look, and effectively, Ramon, it is a bit of a component of how we hedge the sales book. These are typically contracts that are a lot stickier. There is quality and qualification requirements, and yet it kind of forms part of how the North American team manage the risk around sales.

Speaker #2: There are quality and qualification requirements, and yet it kind of forms part of how the North American team manages the risk around sales.

Speaker #4: Right. And presumably, I mean, if they've said at the end of the calendar year, they'd be well out of the money compared to where spot prices are currently trading.

Ramoun Lazar: Right. And presumably, if they have set at the end of the calendar year, they would be well out of the money compared to where spot prices are currently trading.

Speaker #2: That's right.

David Fallu: That is right.

Speaker #1: Yep.

Tania Archibald: Yeah.

Speaker #4: Yep. Okay. All right, I'll leave it there. Thanks.

Ramoun Lazar: Okay. All right. I will leave it there. Thanks.

Speaker #1: Thanks, Ramon.

Tania Archibald: Thanks, Ramon.

Speaker #3: Your next question comes from Owen Verrell with RBC. Please go ahead.

Operator: Your next question comes from Owen Birrell with RBC. Please go ahead.

Speaker #5: Yeah, good morning. Thanks, guys. I just wanted to ask a question around the $150 million cost reduction program. You provided a good split between, I think, 60% headcount reduction for FY27, and then 40% external spend.

Owen Birrell: Yeah, good morning. Thanks, guys. I just wanted to ask a question around the AUD 150 million cost reduction program. You provided a good split between, I think, 60% headcount reduction for 2027 and then 40% external spend. I just wanted to understand, I guess, on the external spend area, are there any sort of key target areas that are obvious to reduce the cost there? Similarly, with the headcount reduction, if you can provide a bit of color around which divisions or which regions you are expecting to see that cost reduction from the headcount.

Speaker #5: I just wanted to understand, I guess on the external spend area, are there any sort of key target areas that are obvious to reduce the cost there?

Speaker #5: And similarly, with the headcount reduction, if you can provide a bit of colour around which divisions or which regions you're expecting to see that cost reduction from the headcount.

Speaker #1: So I'll start off with the headcount reductions, and then David can give you a bit of flavour on the external spend. In terms of the headcount reductions, what we've done is basically put in place a 4% headcount reduction across the global portfolio.

Tania Archibald: I will start off with the headcount reductions, and then David can give you a bit of flavor on the external spend. In terms of the headcount reductions, what we have done is basically put in place a 4% headcount reduction across the global portfolio. Now, it is slightly less than that in Australia, just because of the ongoing rounds of optimization that we have been doing over many years now. But broadly, it is about 4%. It is primarily centered around corporate, functional, and administrative roles. Now, there is a number of operational roles in parts of the portfolio where we have gone a bit deeper, in terms of uplifting the level of performance. But by and large, what it reflects is a reset of our functional operating model, whereby we have taken the functional teams, which were previously nested within each business unit and each sub-business unit, and we have moved them into global teams.

Speaker #1: Now, it's slightly less than that in Australia, just because of the ongoing rounds of optimisation that we've been doing over many years now. But broadly, it's about 4%.

Speaker #1: It's primarily centred around corporate, functional, and administrative roles. Now, there are a number of operational roles in parts of the portfolio where we've gone a bit deeper in terms of uplifting the level of performance.

Speaker #1: But by and large, what it reflects is a reset of our functional operating model, whereby we've taken the functional teams, which were previously nested within each business unit and each sub-business unit, and we've moved them into global teams.

Tania Archibald: But by and large, what it reflects is a reset of our functional operating model, whereby we have taken the functional teams, which were previously nested within each business unit and each sub-business unit, and we have moved them into global teams. What that does is drive greater scale and efficiency, better focusing of effort. It means that we have been able to take out a little bit of duplication that might have occurred over the last couple of years. That is probably the best way to explain it, I think. Is it external spend?

Speaker #1: And what that does is drive greater scale and efficiency, better focusing of effort, and it means that we've been able to take out a little bit of duplication that might have occurred over the last couple of years. And, yeah, so that's probably the best way to explain it, I think.

Tania Archibald: What that does is drive greater scale and efficiency, better focusing of effort. It means that we have been able to take out a little bit of duplication that might have occurred over the last couple of years. That is probably the best way to explain it, I think.

Speaker #1: And it's external spend.

Owen Birrell: Is it external spend?

Speaker #2: Yeah, look, so that's across a range of areas, as we talked about through the FY25 to FY26 walkthrough. So, probably the largest component actually came from raw materials and IT.

David Fallu: Yeah. Look, so that is across a range of areas as we talked about through the FY25 to 2026 walkthrough. So probably the largest component actually came from raw materials and IT. Within the SG&A functions, it has really been the opportunity to drive that in a much more coordinated way through having those functions come into a central area of practice. Then from a raw materials perspective, it is primarily around productivity and efficiency in raw materials utilization, which has enabled the teams to drive an improvement in external spend in that space.

Speaker #2: Within the SG&A functions, it's really been the opportunity to drive that in a much more coordinated way through having those functions come into a central area of practice.

Speaker #2: And then, from a raw materials perspective, it's primarily around productivity and efficiency in raw materials utilisation, which has enabled the teams to drive an improvement in external spend in that space.

Speaker #5: And can I ask just a question on the increase in Middle East cost? You called out fuel and freight. Are you expecting a reversion in some of those costs if we do see a settling of the Middle East issues?

Owen Birrell: Can I ask just a question on the increase in Middle East costs? You called out the fuel and freight. Are you expecting a reversion in some of those costs if we do see a settling of the Middle East issues?

Speaker #1: Well, I think there'll be some benefit—there has to be. I mean, it has settled a little bit. I mean, we've slimmed it in, obviously, in the fuel, the freight rates, raw materials, including paint.

Tania Archibald: Well, I think there will be some benefit. There has to be. It has settled a little bit. We have seen it obviously in the fuel, the freight rates, raw materials, including paint. The biggest area of heartburn that we have had has been around the aluminum supply. We have now resolved that one. So I think it will come off and we will see it principally in those headline numbers around fuel and freight, most specifically. But again, inflation is an area that we have obviously got to watch very carefully. We are not alone in this. It is probably a bit more pronounced in Australia than elsewhere. But it just goes back to that relentless focus on cost and productivity.

Speaker #1: The biggest area of heartburn that we've had has been around the aluminium supply. We've now resolved that one, so I think it'll come off, and we'll see it principally in those headline numbers.

Speaker #1: Around fuel and freight, most specifically. But again, inflation is an area that we've obviously got to watch very, very carefully. We're not alone in this.

Speaker #1: It's probably a bit more pronounced in Australia than elsewhere, but it just goes back to that relentless focus on cost and productivity.

Speaker #5: And I know that you haven't—unlike many other companies—you haven't called out that cost inflation impact. Do you have a sense of what that has been in FY26 and how much it could revert in '27?

Owen Birrell: I know that you have not, unlike many other companies, you have not called out that cost inflation impact. Do you have a sense of what that has been in FY26 and how much it could revert into 2027?

Speaker #2: Oh, look, I think in terms of the overall impact in FY26, the Middle East reversion wouldn't be material. I think, as Tenya said, we've actually seen it cause a lot of challenge around making sure your supply chain was resilient in that space.

David Fallu: Look, I think in terms of the overall impact in FY26, the Middle East reversion wouldn't be material. I think as Tania has said that we have actually seen it caused a lot of challenge around making sure your supply chain was resilient in that space. We had a couple of suppliers who were based in the Middle East that obviously was the apex of challenge for us. We have resolved those. But I am not expecting that. That was more ensuring supply as opposed to it being something where I think we get an improvement in price year on year.

Speaker #2: We had a couple of suppliers who were based in the Middle East that obviously had a—was the apex of challenge for us. We've resolved those.

Speaker #2: But I'm not expecting that. That was more about ensuring supply, as opposed to it being something where I think we'll get an improvement in price year on year.

Speaker #5: Okay. Do you mind if I ask the same question, just on the sales side? Out of ASP and New Zealand, we noticed a bit of an uplift in the export volumes in the second half.

Owen Birrell: Okay. Do you mind if I ask a second question just on the sales side? Out of ASP and New Zealand, we noticed a bit of an uplift in the export volumes in the H2. I am just wondering, where are these volumes going, and are these volumes still profitable given some of the trade tensions that we are seeing at the moment?

Speaker #5: I'm just wondering, where are these volumes going? And are these volumes still profitable, given some of the trade tensions that we're seeing at the moment?

Speaker #1: Yeah, the uplift in the second half is pretty much normal seasonality. But you see, we often end up with a bit of a stock build in the first half, and then a release in the second half.

Tania Archibald: Yeah. The uplift in the H2 is pretty much normal seasonality that you see. We often end up with a bit of a stock build in the H1 and then a release in the H2. Yes. Given all the trade actions that have been occurring globally, you have obviously got the tariff wall around the US, you have got Europe has put up the tariff wall. So yes, that does dampen overall returns that we earn on the export market. We did deliberately put some slab over into New Zealand, and that was really just backup planning as we start the new electric arc furnace, we go through the transition there. We just wanted to make sure that there was no operational disruptions to our iron and steel making. So there is a little bit of extra slab there.

Speaker #1: Yes, given all the trade actions that have been occurring globally, you’ve obviously got the tariff wall around the U.S., you’ve got Europe has put up the tariff wall.

Speaker #1: So yes, that does dampen overall returns that we earn on the export market. We did deliberately put some slab over into New Zealand, and that was really just backup planning as we start the new electric arc furnace.

Speaker #1: We go through the transition there. We just wanted to make sure that there were no operational disruptions to our iron and steelmaking, so there's a little bit of extra slab there.

Speaker #1: I think, though, what it does underline is, again, the incredible importance in Australia of continuing to grow the domestic franchise, and continuing to grow the value-add components in particular.

Tania Archibald: I think though what it does underline is, again, the incredible importance in Australia of continuing to grow the domestic franchise, continuing to grow the value add components in particular. Again, that is why the start-up of metal coating line number 7 is just so important to us. We still see ongoing growth in Colorbond. We still see ongoing growth in TRUECORE, and continuing to grow that and reduce over time the reliance on the export market, as a release valve for the production volumes that we have coming out of the blast furnace is quite important to us.

Speaker #1: And again, that's why the startup of Metal Coating Line Number 7 is just so important to us. We still see ongoing growth in Colorbond.

Speaker #1: We still see ongoing growth in Truecore, and continuing to grow that, and reduce over time the reliance on the export market as a relief valve or release valve for the production volumes that we have coming out of the blast furnaces, is quite important to us.

Speaker #5: Okay. Thank you.

Owen Birrell: Okay. Thank you.

Speaker #3: Your next question comes from Harry Saunders with E&P. Please go ahead.

Operator: Your next question comes from Harry Saunders with E&P. Please go ahead.

Speaker #2: Morning, Tanya, David. Thanks for taking my questions. Firstly, just to follow on from Romaine's, I just wanted to clarify that $20 million to $30 million quantified about the first half guidance for Australia.

Harry Saunders: Morning, Tania, David. Thanks for taking my questions. Firstly, just to follow on from Ramon's. Just wanted to clarify that AUD 20 to 30 million quantified about the H1 guidance for Australia. Is that across all the impacts from the blast furnace and MCL7? Is that sort of expected to be confined largely to the H1, as a sort of one-off, so should reverse, like maybe how much of that is that depreciation transitional charge? Thanks.

Speaker #2: Is that across all the impacts from the blast furnace and MCL7? And is that sort of expected to be confined largely to the first half as a sort of one-off?

Speaker #2: So should reverse… like, maybe, how much of that is that depreciation transitional charge? Thanks. No, no. Sorry. Harry, I was referring to the impacts of cost into inventory through various trials that have been utilised within ASP as part of their ongoing decarbonisation work.

David Fallu: No. Sorry, Harry. I was referring to the impacts of cost into inventory through various trials that have been utilized within ASP as part of their ongoing decarbonization work. In terms of transitioning from to blast furnace 6 into full ramp-up, we would treat that as FY27 as largely being that transition year.

Speaker #2: In terms of transitioning from blast furnace 6 into full ramp-up, we would treat that as FY27, as largely being that transition year.

Speaker #5: Okay. So you're not quantifying how much is a one-off across the blast furnace and MTL7?

Harry Saunders: Okay. You're not sort of quantifying how much is sort of one-off across the blast furnace and MCL7?

Speaker #2: No, no, not at this point.

David Fallu: No, not at this point.

Speaker #5: Okay. And, yeah, maybe just on the working capital outlook—given we talked about some potential builds of raw materials ahead of the transition there—yeah, across the first half and the full year.

Harry Saunders: Okay. And, yeah, maybe just on the working capital outlet, given we talked about some potential builds of raw materials ahead of the transition there across the H1 and the full year.

Speaker #2: So, yeah, look, in terms of work, I think the team's done a good job in terms of managing that in the context of those.

David Fallu: Yeah, look, in terms of working capital, I think the team's done a good job in terms of managing that in the context of those inventory builds. Again, in terms of the release of that, we would see that coming through towards the end of FY27 as a release. But the reality is that there will still be a degree of elevated working capital to support the transition of both BF6 and the EAF through the course of FY27.

Speaker #2: Inventory builds, again, in terms of the release of that, we would see that coming through towards the end of FY27 as a release.

Speaker #2: But the reality is that there will still be a degree of elevated work and capital to support the transition of both Blast Furnace 6 and the EAF through the course of FY27.

Speaker #5: Got it, thank you. And maybe just to follow on, if there's any view on North American steel spreads beyond the first half—are they sort of settling at mid-cycle?

Harry Saunders: Got it. Thank you. And maybe just to follow on, if there's any view in North American steel spreads beyond the H1. I guess, do you eventually see that settling at mid-cycle? How long do you think this current strength could be sustained, and what do you think are the key drivers behind the strength?

Speaker #5: And how long do you think this current strength could be sustained? And what do you think are the key drivers behind this strength?

Speaker #1: It is an interesting question. Around North America, I mean, obviously, we have a very positive trade and macro environment that we're looking at at the moment.

Tania Archibald: It is an interesting question around North America. Obviously, we have a very positive trade and macro environment that we are looking at at the moment. More broadly, it is hard to come up with a better place to make and sell steel globally. If you put aside the tariff wall, you have a very large market. It is a very resilient market. We still see healthy demand there. What you have is very strong supply side discipline. It is obviously dominated by electric arc furnaces, so wonderful supply side discipline in terms of the ability to pull back in the face of demand swings. I think for North Star, obviously, we have a very high-performing asset, probably the highest performing asset in North America. In terms of how long it sustains for, we cannot really control that.

Speaker #1: More broadly, it's hard to come up with a better place to make and sell steel globally. If you put aside the tariff wall, you've got a very large market.

Speaker #1: It's a very resilient market. We still see healthy demand there. What you have is very strong supply-side discipline. It's obviously dominated by electric arc furnaces.

Speaker #1: So, wonderful supply-side discipline in terms of the ability to pull back in the face of demand swings. And I think, for North Star, obviously we have a very high-performing asset—probably the highest performing asset in North America.

Tania Archibald: I think for North Star, obviously, we have a very high-performing asset, probably the highest performing asset in North America. In terms of how long it sustains for, we cannot really control that. What we are focused on is maintaining the performance of North Star and continuing to grow that very valuable asset.

Speaker #1: In terms of how long it sustains for, we can't really control that. What we're focused on is maintaining the performance of North Star and continuing to grow that very valuable asset.

Tania Archibald: What we are focused on is maintaining the performance of North Star and continuing to grow that very valuable asset.

Harry Saunders: Thank you.

Speaker #1: I would say, Harry, what we see at the moment is auto is quite healthy. I was asked previously around the impact of EVs coming out of China, but what we see is pretty robust demand.

Tania Archibald: I would say, Harry, what we see at the moment is auto is quite healthy. I was asked previously around the impact of EVs coming out of China, but what we see is pretty robust demand in the US. The construction part of the market is reasonably strong. There is quite a bit of demand that has been put in there by data centers. We know that part of the order book, in the BlueScope Buildings area, is about 20% part of their backlog that they have into this half. About 20% of that would be made up by data centers. So we know that data centers is driving a degree of strength into the US demand environment as well.

Speaker #1: In the US, the construction part of the market is reasonably strong. There's quite a bit of demand that's been put in there by data centers.

Speaker #1: And we know that part of the order book in the BlueScope Buildings area is about 20%, part of their backlog that they have into this half.

Speaker #1: About 20% of that would be made up by data centres. So we know that data centres are driving a degree of strength into the US demand environment as well.

Speaker #5: Understood. Thanks.

Harry Saunders: Understood. Thanks.

Speaker #1: Thanks, Harry.

Tania Archibald: Thanks, Harry.

Speaker #3: Your next question comes from Lee Power with JPMorgan. Please go ahead.

Operator: Your next question comes from Lee Power with J.P. Morgan. Please go ahead.

Lee Power: Morning, Tania, David, and team. Tania, there has been a few questions on it, but the AUD 150 million into FY27 just on the cost side. Where do you think the kind of escalation of conversion and other costs kind of tracking? Because I think that was AUD 98 million in FY26. So I am just trying to work out, you obviously got a lot of cost pieces, but it feels like I kind of was probably a little bit overly optimistic into FY26. So what are you seeing from an escalation side into FY27?

Speaker #2: Morning, Tanya, David, and team. Tanya, just on the—I mean, there have been a few questions on it—but the $150 million into one, into FY27, just on the cost side.

Speaker #2: Where do you think the kind of escalation of conversion and other costs kind of tracking? Because I think that was 98 million dollars in FY26.

Speaker #2: I'm just trying to work out—you've obviously got a lot of cost pieces—but it feels like I was probably a little bit overly optimistic into '26.

Speaker #2: So, what are you seeing from an escalation side into '27?

Speaker #1: I might give you the escalation question, David.

Tania Archibald: I might give you the escalation question, David.

Speaker #2: Yeah, no. So, look, in terms of escalation into '27, Lee, outside of escalation that we've seen into sort of delay and cost in major projects, broadly, it's been sort of within more normal, usual expectations.

David Fallu: Yeah. So look, in terms of escalation into 2027, Lee, outside of escalation that we've seen into sort of delay and cost in major projects, broadly, it's been sort of within more normal usual expectations. So, low to mid-single digit across most of the areas of the portfolio. Team's been doing a particularly good job around sort of management of energy costs. We've largely reset to market in that space. So it's not the same degree of impacts that we've seen over the last couple of years.

Speaker #2: So, low- to mid-single digits across most areas of the portfolio. The team's been doing a particularly good job around management of energy costs.

Speaker #2: We've largely reset to market in that space, so it's not the same degree of impacts that we've seen over the last couple of years.

Speaker #2: Okay, thank you. And then your comments just then, Tanya, around the demand and supply outlook in the US—clearly, it's a very strong time at the moment.

Lee Power: Okay. Thank you. And then your comments just then, Tania, around the demand and supply outlook in the US. Clearly, it's a very strong time at the moment. You're still running a 750 spread in your assumptions for North Star, so that's still down from kind of spot levels. Is it more on the supply side or the demand side that you think drives that reversion?

Speaker #2: And you're still running a 750 spread in your assumptions for North Star. So that's still down from kind of spot levels. Is it more on the supply side or the demand side that you think drives that reversion?

Speaker #1: It's probably a little bit of both, I guess. I mean, we simply take the standard formula. What I would say is that demand is really quite resilient.

Tania Archibald: It's probably a little bit of both, I guess. We simply take the standard formula. What I would say is that demand is really quite resilient. I think the other factor to note is that the service centers, they don't have a lot of inventories at the moment. They're relatively light on inventories. Do you have anything to add?

Speaker #1: I think the other factor to note is that the service centres don't have a lot of inventories at the moment. They're relatively light on inventories.

Speaker #1: Is there anything you would like to add?

Speaker #2: No, look, I think the reality is it's largely a contract market fundamentally at the moment. People have contracted volumes, they're taking them, and there's not a lot in the spot.

David Fallu: No. Look, I think, the reality is it is largely a contract market fundamentally at the moment. If people have contracted volumes, they are taking it, and there is not a lot in the spot. I think realistically, there is an element of lag that is playing into that. Ultimately, as we go through sort of recontracting, you will see that play into price, assuming that spreads remain where they are.

Speaker #2: And so I think, realistically, there's an element of lag that's playing into that. Ultimately, as we go through sort of re-contracting, you'll see that play into price—assuming that spreads remain where they are.

Speaker #1: No, we are also watching the new supply that's coming online. Of course, the US continues to be structurally short. We know that West Virginia will come online over the next two years.

Tania Archibald: Now, we are also watching the new supply that is coming online. Of course, the US continues to be structurally short. We know that West Virginia will come online over the next 2 years. We are watching that very carefully. Broadly speaking, I think it is quite a positive demand environment.

Speaker #1: We're watching that very carefully. But broadly speaking, I think it's quite a positive demand environment.

Speaker #2: Okay, perfect. And then just one final one, if I can—just on BCP. It seems like you've made some decent traction there. How should we think about that in the US going forward?

Lee Power: Okay. Just one final one, if I can. Just on BCP, it seems like you have made some decent traction there. How do we think about that in the US going forwards?

Speaker #1: Yeah, so the ambition remains absolutely undiminished, Lee. I think we've made no secret of the fact that we're a couple of years behind where we wanted to be originally.

Tania Archibald: Yeah. So the ambition remains absolutely undiminished, Lee. I think we have made no secret of the fact that we are a couple of years behind where we wanted to be originally. But we still see a very large market opportunity for the value proposition and capability that we have. We have a relatively new management team. Whilst they might be new to BlueScope, their deep experience in the industry, they are doing a lot of heavy lifting on improving the quality of the assets, the manufacturing performance and the lead times, and basically, bringing the lines up to the standard of BlueScope. So we are making sure that we are competitive to the tolling alternative. Still very focused on bringing in the single bill option, and ultimately the branded offer. So we can still see the pathway there. We still are targeting an appropriate return on the original invested capital.

Speaker #1: But we still see a very large market opportunity for the value proposition and capability that we have. We have a relatively new management team.

Speaker #1: And whilst they might be new to BlueScope, they have deep experience in the industry. They're doing a lot of heavy lifting on improving the quality of the assets, the manufacturing performance, and the lead times.

Speaker #1: And basically, bringing the lines up to the standard of BlueScope. And so we're making sure that we're competitive to the tolling alternative. Still very focused on bringing in the single-bill option, and ultimately the branded offer.

Tania Archibald: So we are making sure that we are competitive to the tolling alternative. Still very focused on bringing in the single bill option, and ultimately the branded offer. So we can still see the pathway there. We still are targeting an appropriate return on the original invested capital. But yes, we are a couple of years behind, but we are making good progress. I spend a lot of time engaging with the BCP team, and I am very confident in that team, and I can see the progress that is being made in the business.

Speaker #1: So, we can still see the pathway there. We still think, or we still are targeting, an appropriate return on the original invested capital. But yes, we are a couple of years behind, but we're making good progress.

Tania Archibald: But yes, we are a couple of years behind, but we are making good progress. I spend a lot of time engaging with the BCP team, and I am very confident in that team, and I can see the progress that is being made in the business.

Speaker #1: I spend a lot of time engaging with the BCP team, and I'm very confident in that team. I can see the progress that's being made in the business.

Speaker #2: Excellent. Thanks, appreciate the colour today.

Lee Power: Excellent. Thanks. Appreciate the color today.

Speaker #1: Thanks, Lee.

Tania Archibald: Thanks, Lee.

Speaker #3: Your next question comes from Peter Stein with Macquarie. Please go ahead.

Operator: Your next question comes from Peter Stain with Macquarie. Please go ahead.

Peter Stain: Hi, Tania. Thanks very much for your time, and David. I was going to ask along the same lines as Lee. I was just curious, in the fullness of time, what would your broad expectation be, presuming you are still going to make midstream investments?

Peter Steyn: Hi, Tania. Thanks very much for your time, and David. I was going to ask along the same lines as Lee. I was just curious, in the fullness of time, what would your broad expectation be, presuming you are still going to make midstream investments?

Speaker #2: Hi, Tanya. Thanks very much for your time. And David, I was going to ask along the same lines as Lee. I was just curious, in the fullness of time, what would your broad expectation be, presuming Bluescope is going to make midstream investments?

Speaker #1: Yeah, it's an interesting question, Pete, as to whether or not you actually need to integrate from the pipelines back through to metal coating and coil rolling, and ultimately to North Star.

Tania Archibald: Yeah, it is an interesting question, Pete, as to whether or not you actually need to integrate from the paint lines back through to metal coating and cold rolling and ultimately to North Star. I think it is an option that sits there. I think there is a different set of mix that exist in the US, which may mean that that is ultimately not required. I think that we can have a highly competitive business without necessarily needing to be fully integrated, but it is a question that we will continue to test. What we are very focused on right now is uplifting the performance of BCP and making sure it is competitive, again, in the tolling market and then ultimately in the single bill and ultimately the branded market. So I think it is an interesting question that sits there, Pete.

Speaker #1: I think it's an option that sits there. I don't—I think there's a different set of mix that exists in the U.S., which may mean that that's ultimately not required.

Speaker #1: I think that we can have a highly competitive business without necessarily needing to be fully integrated. But it's a question that we will continue to test.

Speaker #1: What we're very focused on right now is uplifting the performance of BCP and making sure it is competitive again, in the tolling market, and then ultimately in the single-bill and, ultimately, the branded market.

Speaker #1: So, I think it's an interesting question that sits there, Pete.

Speaker #2: Gotcha. Thanks, Tanya. And then maybe just on the property side of things, could you share your perspective on how you're thinking about balance sheet utilization in the context of that business?

Peter Stain: Got you. Thanks, Tania. Then maybe just on the property side of things, just a perspective on how you are thinking about balance sheets utilization in the context of that business. Do you generally see it as only a sale? Or is there an opportunity for on-balance sheet development to maximize value? If so, which properties are you most likely to go down that route with?

Peter Steyn: Got you. Thanks, Tania. Then maybe just on the property side of things, just a perspective on how you are thinking about balance sheets utilization in the context of that business. Do you generally see it as only a sale? Or is there an opportunity for on-balance sheet development to maximize value? If so, which properties are you most likely to go down that route with?

Speaker #2: Do you generally see it as only a sale, or is there an opportunity for on-balance sheet development to maximize value?

Speaker #2: And if so, which properties are you most likely to go down that route with? Yeah, thanks, Pete. Look, in terms of how we look to approach that, the most important thing for us is to sort of remove any of the uncertainties that kind of bring a discount to that property value.

David Fallu: Yeah, thanks, Peter. Look, in terms of how we look to approach that, the most important thing for us is to remove any of the uncertainties that bring a discount to that property value. That is why the overall rezoning at Port Kembla is a huge benefit to us. To the degree that we need to utilize our balance sheet to help support that, we obviously can. But I would say that there are many ways that we can look to ultimately realize or monetize the opportunity that sits there. It would not be the first port of call to utilize our balance sheet to be the primary supplier into that space where we can leverage off capability elsewhere.

Speaker #2: That's why the overall rezoning at Port Kembla was a huge benefit to us. To the degree that we need to utilize our balance sheet to help support that, we obviously can.

Speaker #2: But I'd say that, kind of, there's many ways that we can sort of look to ultimately realize or monetize the opportunity that sits there.

Speaker #2: And it wouldn't be, kind of, the first port of call to utilize our balance sheet to be the primary supplier into that space, where we can leverage off capability elsewhere.

Speaker #2: So, one could think about specific partnerships, I guess. Exactly. So, yeah, exactly. You've seen us, obviously, where it's already effectively at full value, like our residential property at West Apto—yeah, that probably just lends itself towards a straight sale.

Peter Stain: So one could think about specific partnerships, I guess is what you

Peter Steyn: So one could think about specific partnerships, I guess is what you

David Fallu: Exactly

Peter Stain: just spoken of.

Peter Steyn: just spoken of.

David Fallu: Yeah, exactly. You've seen us, obviously, where it's already effectively at full value, like our residential property at West Dapto. That probably just lends itself towards a straight sale. There's not much point partnering in that space. Where there's still more opportunity for value uplift, that's where we will consider the partnership opportunities.

Speaker #2: There's not much point kind of partnering in that space. Where there's still more opportunity for value uplift, that's where we will consider the partnership opportunities.

Peter Stain: Yeah. If I could, just a little bit of an extension on the energy option at PK. Could you maybe just color that in ever so slightly just to understand better what your thought process there is?

Peter Steyn: Yeah. If I could, just a little bit of an extension on the energy option at PK. Could you maybe just color that in ever so slightly just to understand better what your thought process there is?

Speaker #2: And if I could just get a little bit of an extension on the energy option at PK, could you maybe just color that in ever so slightly?

Speaker #2: Just to understand better what your thought process is there.

Speaker #1: So we're very mindful that, with the land—the surplus land that sits around the manufacturing operations—we're very focused on how we can drive synergy for our existing operations.

Tania Archibald: We are very mindful that with the surplus land that sits around the manufacturing operations, we are very focused on how we can drive synergy for our existing operations. We have been doing quite a bit of executive work around energy precincts, and that could form a variety of options, including, for example, batteries. We are also very mindful with Port Kembla of the long-term energy infrastructure that would be required for an eventual change in steel making. I am obviously thinking longer term here. Just in terms of the infrastructure that would need to be put in place, the easements that need to be preserved, that is all part of our longer-term planning around property portfolio.

Speaker #1: So we've been doing quite a bit of extensive work around energy precincts, and that could form a variety of options, including, for example, batteries.

Speaker #1: We're also very mindful, with Port Kembla, of the long-term energy infrastructure that would be required for an eventual change in steelmaking. So, I'm obviously thinking longer term here.

Speaker #1: So just in terms of the infrastructure that would need to be put in place, the easements that need to be preserved, that's all part of our longer-term planning around the property portfolio.

Speaker #2: Perfect. Thanks, Tanya. I'll leave it there.

Peter Stain: Perfect. Thanks, Tania. I will leave it there.

Peter Steyn: Perfect. Thanks, Tania. I will leave it there.

Speaker #1: Thanks, Pete.

Tania Archibald: Thanks, Pete.

Speaker #3: Your next question comes from Scott Ryle with Rymore Equity Research. Please go ahead.

Operator: Your next question comes from Scott Ryle with Rymor Equity Research. Please go ahead.

Scott Ryle: Hi. Brilliant. Thank you. Just two quick ones, hopefully. MCL7, you have talked about now being in ramp over the course of the next six months or so. I guess what I am wondering here is, have you felt constrained in TRUECORE and Colorbond steel volumes over the last 12 months? I guess what I am really asking there, is there a chance of a nonlinear ramp-up relative to the targets you put out on slide 9?

Scott Ryall: Hi. Brilliant. Thank you. Just two quick ones, hopefully. MCL7, you have talked about now being in ramp over the course of the next six months or so. I guess what I am wondering here is, have you felt constrained in TRUECORE and Colorbond steel volumes over the last 12 months? I guess what I am really asking there, is there a chance of a nonlinear ramp-up relative to the targets you put out on slide 9?

Speaker #2: Hi. Brilliant, thank you. I just have two quick ones, hopefully. MCL7—so you've talked about it now being in ramp over the course of the next six months or so.

Speaker #2: I guess what I'm wondering here is, have you felt constrained in Truecore and Colorbond steel volumes over the last 12 months? And I guess what I'm really asking there is, is there a chance of a non-linear ramp-up relative to the target you put out on slide 9?

Speaker #1: Yeah. The challenges that we've had have been going on for a while, over the last couple of years. And it became extremely pronounced during the COVID period.

Tania Archibald: Yeah. The challenges that we have had have been going on for a while over the last couple of years, and it became extremely pronounced during the COVID period. You actually need to almost break it down to production weeks. We have experienced periodic shortfalls in supply. What it does is create a not great customer experience. We are very focused on making sure that we have got the volumes there as and when our customers need them. So it is more about addressing the periodic shortfalls that do occur that create frustration for our customers. More broadly, we see good upside potential. More than potential. We see the upside coming with continued growth in TRUECORE. We know that metal framing has grown across the Australian residential space. It is sitting just below 20%. We would have the lion's share of that.

Speaker #1: And really, you actually need to almost break it down to construction weeks, production weeks. We have experienced periodic shortfalls in supply, and what it does is create a not-great customer experience. So we're very, very focused on making sure that we've got the volumes there as and when our customers need them.

Speaker #1: So it's more about addressing the periodic shortfalls that do occur, which create frustration for our customers. But more broadly, we see good applied potential—or more than potential.

Speaker #1: We see the upside coming with continued growth in Truecore. Now, we know that metal framing has grown across the Australian residential space—it's sitting just below 20%.

Speaker #1: We would have the lion's share of that when you think about where it was 10 years ago. It was sub-10%. So we've made good inroads.

Tania Archibald: When you think about where it was 10 years ago, it was sub 10%. So we have made good inroads. I see no reason why we cannot go significantly higher. I also see the opportunity with Colorbond and continuing to grow there, not just in the roofing space, but walling. One of the things that we did not actually announce in this pack, because it came slightly too late, but we have also just commissioned the new digital print capability, down at Western Port in Victoria. That is a very exciting addition to the portfolio. We think that is probably going to play an important part in the residential space, including in walling applications. So there is a lot of exciting stuff going in terms of the growth more broadly, of the metal-coated product.

Speaker #1: I see no reason why we can't go significantly higher. I also see the opportunity with Colorbond and continuing to grow there, not just in the roofing space but walling. One of the things that we didn't actually announce in this pack, because it came slightly too late, we've also just commissioned the new digital print capability down at Western Port in Victoria.

Speaker #1: And that's a very exciting addition to the portfolio. We think that's probably going to play an important part in the residential space, including in walling applications.

Speaker #1: So there's a lot of exciting stuff going on in terms of the broader growth of the metal-coated product.

Speaker #2: Okay. Great, thank you. And my second one—obviously, a few months ago you pulled out of the Whyalla process, in terms—well, pulled out. Obviously, you're not still in it.

Scott Ryle: Okay, great. Thank you. My second one, obviously a few months ago, you pulled out of the Whyalla process in terms of. Well, pulled out. Obviously you are not still in it. I guess what I am wondering, you have got that has gone. You are obviously ramping up your capital management activities. Whether it is reactive or proactive, I am not really looking for a view on that so much as could you just make sure, just describe how you make sure you do not miss out on valuable medium-term investment opportunities in the context of trying to reward shareholders for, as you say, an extended period of CapEx.

Scott Ryall: Okay, great. Thank you. My second one, obviously a few months ago, you pulled out of the Whyalla process in terms of. Well, pulled out. Obviously you are not still in it. I guess what I am wondering, you have got that has gone. You are obviously ramping up your capital management activities. Whether it is reactive or proactive, I am not really looking for a view on that so much as could you just make sure, just describe how you make sure you do not miss out on valuable medium-term investment opportunities in the context of trying to reward shareholders for, as you say, an extended period of CapEx.

Speaker #2: I guess what I'm wondering—you've got, that has gone, you're obviously ramping up your capital management activity. Whether it's reactive or proactive, I'm not really looking for a view on that so much as, could you just make sure—just describe how you make sure you don't miss out on valuable medium-term investment opportunities in the context of trying to reward shareholders for, as you say, an extended period of CapEx?

Speaker #1: Yeah, yeah. I think there's probably two questions in there. So, firstly, on Whyalla, the reason we're primarily looking at Whyalla is because of the very high-grade magnetite ores that are sitting there.

Tania Archibald: Yeah. I think there is probably two questions in there. Firstly on Whyalla, the reason why we are primarily looking at Whyalla is because of the very high-grade magnetite ores that are sitting there and whether or not that provides an opportunity for Port Kembla down the track. We remain interested in it. The consortium remains firm. We did not progress into the current phase, but we are obviously sitting there with our rider blast offer. We are watching the process with interest, but I have been very consistent that whatever we do, it would absolutely have to make sense for shareholders. If we cannot get that to work, then we will continue looking at other options. Just in terms of the ramping up in capital management, we have been engaged in a very extensive investment program for quite a number of years now.

Speaker #1: And whether or not that provides an opportunity for Port Kembla down the track, we remain interested in it. The consortium remains firm. We did not progress into the current phase, but we're obviously sitting there with our right-of-last offer. We're watching the process with interest.

Speaker #1: But I’ve been very consistent that whatever we do, it would absolutely have to make sense for shareholders. And if we can’t get that to work, then we’ll continue looking at other options.

Speaker #1: Now, just in terms of the ramping up in capital management, we've been engaged in a very extensive investment program for quite a number of years now.

Speaker #1: And so, that obviously puts a degree of constraint, in terms of the shareholder returns. What we're seeing now, as we've passed through CapEx, we've now got the benefit of the improved cash flows now, and also coming through in the next couple of years.

Tania Archibald: That obviously puts a degree of constraint in terms of the shareholder returns. What we are seeing now as we have passed through peak CapEx, we have now got the benefit of the improved cash flows now, and also coming through in the next couple of years. So it is a deliberate design to ramp up the shareholder returns. We are not constraining ongoing growth opportunities. I think David mentioned in a couple of his earlier comments that we generally set aside AUD 100 to AUD 200 million for growth opportunities on an ongoing basis outside of the major projects. There are some ongoing opportunities that we have in North America. We are looking at some potential options around BlueScope Buildings. We have got some capital light options sitting up in Asia. We have got some ongoing opportunity for growth in Australia, which is not necessarily CapEx related.

Speaker #1: So it's a deliberate design to ramp up the shareholder returns. We're not constraining ongoing growth opportunities. I think David mentioned in a couple of his earlier comments that we generally set aside $100 to $200 million for growth opportunities on an ongoing basis. Outside of the major projects, there are some ongoing opportunities that we have in North America.

Speaker #1: We're looking at some potential options around BlueScope Buildings. We've got some capital-light options sitting up in Asia, and we've got some ongoing opportunity for growth in Australia, which is not necessarily CapEx-related.

Tania Archibald: We are looking at some potential options around BlueScope Buildings. We have got some capital light options sitting up in Asia. We have got some ongoing opportunity for growth in Australia, which is not necessarily CapEx related. It is more around how we continue to grow our market share. So I do not see that we are, in any way, compromising our ability to grow. It is really about resetting the balance between investment spend and reallocation of capital to, or returns to shareholders.

Speaker #1: It's more about how we continue to grow our market share, so I don't see that we're in any way compromising our ability to grow.

Tania Archibald: It is more around how we continue to grow our market share. So I do not see that we are, in any way, compromising our ability to grow. It is really about resetting the balance between investment spend and reallocation of capital to, or returns to shareholders.

Speaker #1: It's really about resetting the balance between investment spend and the reallocation of capital to, or returns to, shareholders.

Speaker #2: Okay, great. Thank you. That's all I have.

Scott Ryle: Okay, great. Thank you. That is all I have.

Scott Ryall: Okay, great. Thank you. That is all I have.

Speaker #1: Thank you.

Tania Archibald: Thank you.

Speaker #3: Our next question comes from Keith Chow with MST Marquee. Please go ahead.

Operator: Your next question comes from Keith Chau with MST Marquee. Please go ahead.

Speaker #2: Good morning, Kenya and David. Kenya, maybe a first question for you on capital structure and capital returns. Given those franking credits at the moment, it's not necessarily the most efficient way to return.

Keith Chau: Good morning, Tania and David. Tania, maybe a first question for you on capital structure and capital returns. Given no franking credits at the moment, it is not necessarily the most efficient way to return capital via special dividend. The buyback, I think has been extended to the end of August 2027 now. Just want to be clear, what are the factors that prevent BlueScope from buying back shares on market outside of corporate activity potentially going on in the background, or review on internal valuation? Is there something else that we should consider when assessing the prospects of that buyback being active?

Speaker #2: Capital via special dividend. So, the buyback, I think, has been extended to the end of August 2027 now. Just want to be clear: what are the factors that prevent BlueScope from buying back shares on-market, outside of corporate activity potentially going on in the background, or a view on internal valuation?

Speaker #2: Is there something else that we should consider when assessing the prospects of that buyback being active?

Speaker #1: Thanks, Keith. The buyback is always an option—it's sitting there for us to use. The decision to go with the special dividend has a very simple premise.

Tania Archibald: Thanks, Keith. The buyback is always an option. It is sitting there for us to use. The decision to go with the special dividend has a very simple premise. It is the most straightforward and clear way of delivering value directly to our shareholders. It is highly visible, and therefore, that is the basis that we have gone with for this particular half. We do not want to be accused of doing anything inappropriate. So obviously the buyback was inactive for a period of time whilst that corporate activity played out in the year. But again, it is also reinforced to us the need to be very clear about the value that we are delivering to shareholders.

Speaker #1: It is the most straightforward and clear way of delivering value directly to our shareholders. It’s highly visible, and therefore, that’s the basis that we've gone with for this particular half.

Speaker #1: We don't want to be accused of doing anything inappropriate, so obviously, the buyback was inactive for a period of time whilst that corporate activity played out in the year.

Speaker #1: But again, it's also reinforced to us the need to be very clear about the value that we are delivering to shareholders.

Speaker #2: Okay. And maybe I'll follow on to that, Kenya. Is there anything at the moment that constrains you from reactivating that buyback?

Keith Chau: Okay. And maybe a follow-on to that. Tania, is there anything at the moment that constrains you from reactivating that buyback?

Speaker #1: No, there's nothing that would cause us to stop reactivating the buyback.

Tania Archibald: No, there's nothing that would cause us to stop reactivating the buyback.

Speaker #2: Okay, thank you. And then, the second one—I know there have been quite a few questions asked on Blast Furnace 6 transition and also MCL 7.

Keith Chau: Okay. Thank you. Second one, I know there've been quite a few questions being asked on BF6 transition and also MCL7. Maybe just put it simplistically, when is MCL7 expected to be fully commissioned and producing at capacity, or sorry, producing at a level that you're happy with from an efficiency standpoint?

Speaker #2: Maybe just to put it simply, when is MCL 7 expected to be fully commissioned and producing at capacity—or, sorry, producing at a level that you’re happy with from an efficiency standpoint?

Keith Chau: Then the transition from BF6, how far into FY28 could that persist?

Speaker #2: And then the transition for Blast Furnace 6—how far into FY28 could that persist?

Speaker #1: So, MCL 7, I think the fastest that we've actually done in terms of ramping up a metal coating line is about three months. It can take a bit longer.

Tania Archibald: MCL7, I think the fastest that we've actually done in terms of ramping up a metal coating line is about 3 months. It can take a bit longer. It can take 3, 4, 5 months. Having said that, I've been hugely impressed with the commissioning stats that we're seeing. This really is a state-of-the-art facility, but it is early days. So, across this H2, basically, and then we should be hitting our straps into the next H1. In terms of the BF6 transition, so what will occur there is that in the next H1, so in that January to June period, that's when we'll see the cutover from number 5 to number 6. Blast Furnace 5, I think we mentioned Blast Furnace 5, which is the current operational blast furnace, is running extremely well for where it is in its campaign life.

Speaker #1: It can take three, four, five months. Having said that, I've been hugely impressed with the commissioning stats that we're seeing. I mean, this really is a state-of-the-art facility.

Speaker #1: But it is early days, so across this half, basically, and then we should be hitting our straps into the next half in terms of the Blast Furnace 6 transition.

Speaker #1: So what will occur there is that, in the next half—so in that January to June period—that's when we'll see the cutover from number 5 to number 6.

Speaker #1: We Blast Furnace 5, I think we mentioned Blast Furnace 5, which is the current operational Blast Furnace, is running extremely well for where it is in its campaign life.

Speaker #1: So we've actually got full flexibility in terms of the timing of the cutover. I would like it to be earlier in the half, but we just need to—basically, we just need to do the cutover as and when we're ready. If the cutover was to sort of occur—if it looked like it was occurring at the end of December, for example—we would probably push it out into January, just because it's important that the teams get a rest.

Tania Archibald: So we've actually got full flexibility in terms of the timing of the cutover. I would like it to be earlier in the H1. But basically we just need to do the cutover as and when we're ready. If the cutover was to occur, if it looked like it was occurring at the end of December, for example, we would probably push it out into January, just because it's important that the teams get a rest. They've obviously been at this project for a number of years now. It's a very large project. We've got around 800 people on site, so it's very complex. But I would think some point early-ish in the next H1 is what we're targeting for the cutover. That cutover, by the way, will generally take about a month, in terms of ramping down number 5 and ramping up number 6.

Speaker #1: They've obviously been at this project for a number of years now. It's a very large project. We've got around 800 people on site, so it's very complex.

Speaker #1: But I would think some point early-ish in the next half is what we're targeting for the cutover. That cutover, by the way, will generally take about a month in terms of ramping down Number 5 and ramping up Number 6.

Speaker #2: Okay, thanks, Kenya. And then the last one, maybe for David. There have been a lot of discussions on cost-out today, but it seems the corporate cost guidance for the next half, at least, was higher than expectations.

Keith Chau: Okay. Thanks, Tania. And then the last one, maybe for David. There've been a lot of discussions on cost outs today, but seemingly the corporate costs guidance for the next H1 at least is higher than expectations. David, is there anything to call out on corporate costs that have ramped over the last period? And should we assume that the run rate for the H1 of FY27 is something that builds from next H1 onwards? Thank you.

Speaker #2: David, is there anything to call out on corporate costs that have ramped over the last period? And should we assume that the run rate for the first half of FY27 is something that builds from next half onwards?

Speaker #2: Thank you.

Speaker #4: Yeah, no. So primarily, the main piece there is the investment in property capability is sitting within that corporate number. So, kind of like-for-like, it's actually a reduction in corporate costs, Keith.

David Fallu: Yeah, no. So primarily the main piece there is the investment in property capability is sitting within that corporate number. So like to like, it's actually a reduction in corporate costs, Keith. But primarily what's sitting in there is effectively the build of property capability to drive the acceleration Tania was referring to.

Speaker #4: But primarily, what's sitting in there is, effectively, the build of property capability to drive the acceleration value Kenya was referring to.

Speaker #1: There's a little bit of tech spend in there as well. That change in the accounting standard obviously means that tech spend now goes from capex to opex.

Tania Archibald: There is a little bit of tech spend in there as well. That change in the accounting standard obviously means that tech spend now goes from CapEx to OpEx. Because of the change in our functional operating model in the first instance, we have got a little bit of cost, I am going to call it AUD 5 to AUD 10 million that is sitting in that corporate cost that will actually end up being reallocated out to the businesses. Just that functional model change has probably had a bit of an impact as well.

Speaker #1: And because of the change in our functional operating model in the first instance, we've got a little bit of cost—I'm going to call it $5 to $10 million—that's sitting in that corporate cost.

Speaker #1: That'll actually end up being reallocated out to the businesses. So just that functional model change has probably had a bit of an impact as well.

Speaker #2: Okay, thank you. So, the go-forward level on a half-yearly basis is whatever the guidance was for the first half of FY27, less the 5 to 10 going back into the divisions.

Keith Chau: Okay. Thank you. So the go-forward level on a H1 basis is whatever the guidance was for H1 FY27 less the AUD 5 to AUD 10 going back into the divisions?

Speaker #4: That's right.

David Fallu: That is right.

Speaker #1: Again, depending on the level of property activity.

Tania Archibald: Again, depending on the level of property activity.

Speaker #4: Yeah.

David Fallu: Yeah.

Speaker #1: Yeah.

Tania Archibald: Yeah.

Speaker #2: Okay, that's great. Thanks very much.

Keith Chau: Okay. That is great. Thanks very much.

David Fallu: Probably just for complete clarity, Keith, we have not incorporated any sort of property realizations in guidance. We will do that if we are reasonably proximate.

Speaker #4: And probably just for complete clarity, Keith, we haven't incorporated any sort of property realizations in guidance, right? We'll do that if we're reasonably proximate.

David Fallu: Probably just for complete clarity, Keith, we have not incorporated any sort of property realizations in guidance. We will do that if we are reasonably proximate.

Speaker #2: Okay. Thank you. Thanks both.

Keith Chau: Okay. Thank you. Thanks, guys.

Speaker #1: Thank you.

Tania Archibald: Thank you.

Speaker #5: Our next question comes from Paul Young with Goldman Sachs. Please go ahead.

Operator: Your next question comes from Paul Young with Goldman Sachs. Please go ahead.

Speaker #2: Yes, thanks. Morning, Kenya and David. Hope you're both well. First question, just to reflect on, I guess, the last six months and the approach from Steel Dynamics, and also Sev.en.

Paul Young: Yeah, thanks. Morning, Tania and David. Hope you're both well. First question, just to reflect on, I guess, the last six months and the approach from Steel Dynamics and also Seven, and looking at your response and today with the announcement of AUD 3 planned of capital returns for next year. David, can I just look at the moving parts around your forecast operating cash flow for next calendar year, your forecast CapEx and looking at effectively what the implied free cash flow is. Is basically the AUD 3 imply that you're going to pay out around 100% of free cash flow when you look at your scenarios?

Speaker #2: And looking at the—yeah, your response and today with the announcement of $3 billion planned of capital returns for next year. David, can I just look at the moving parts around your forecast operating cash flow for next calendar year, your forecast capex, and looking at effectively what the implied free cash flow is?

Speaker #2: I mean, is basically the $3 implying that you're going to pay out around 100% of free cash flow when you look at your scenarios?

Speaker #4: Yeah, so in terms of capex for next year, we've effectively— that's just over $1 billion, which largely reflects some of the delay and increase from the major projects flowing into FY27.

David Fallu: Well, in terms of CapEx for next year, effectively that's just over AUD 1 billion, which largely reflects some of the delay and increase from the major projects flowing into FY27. A bit over AUD 600 million of that is expected in the first half of FY27. Ultimately, as I said, we'll have a minimum of 75% of cash flow going back to shareholders. So ultimately, that kind of sets the base and depending on how we're seeing the sort of outlook more broadly, we'll take a view as to whether we increase that level.

Speaker #4: A bit over $600 million of that is expected in the first half of FY27. Ultimately, as I said, we'll have a minimum of 75% of cash flow going back to shareholders.

Speaker #4: So ultimately, that kind of sets the base, and depending on how we're seeing the outlook more broadly, we'll take a view as to whether we increase that level.

Speaker #2: Okay, all right. And then a question maybe for you, Kenya. Just when you look at the portfolio and, again, your response to that approach.

Paul Young: Okay. Right. And then a question maybe for you, Tania, just when you look at the portfolio and, again, your response from that approach, and you're doing everything you can on the cost out. Cost out's not easy. I think the AUD 150 million represents circa 3% of your AUD 5 billion annual cost base when you exclude raw materials. But that program is going quite well. If you look at the non-core assets you sold, you sold India for a decent price above relative to book value. When you look at the portfolios, anything in the portfolio that you look at and go, well, there's ongoing opportunities to monetize. And maybe calling out, for example, China, where the carrying value is hard and it sort of underperformed in the period or anything in the US with respect to BlueScope Properties.

Speaker #2: And you're doing everything you can on the cost out. Cost out's not easy. I think the $150 million represents circa 3% of your $5 billion annual cost base when you exclude raw materials.

Speaker #2: But that program is going quite well. If you look at the non-core assets, you sold India for a decent price, above relative to book value.

Speaker #2: When you look at the portfolios, is there anything in the portfolio that you look at and go, "Well, there are ongoing opportunities to monetize," and maybe calling out, for example, China, where the carrying value halved and it has underperformed in the period? Or anything in the US with respect to BlueScope properties? I mean, just stepping back, when you look at the portfolio, is there anything that you look at and think, "Well, we continue to see, in addition to cost, opportunity to unlock value for shareholders"?

Paul Young: When you look at the portfolios, anything in the portfolio that you look at and go, well, there's ongoing opportunities to monetize. And maybe calling out, for example, China, where the carrying value is hard and it sort of underperformed in the period or anything in the US with respect to BlueScope Properties. But just stepping back, when you look at the portfolio, is there anything that you look at and go, we continue to see in addition to cost out an opportunity to unlock value for shareholders?

Paul Young: But just stepping back, when you look at the portfolio, is there anything that you look at and go, we continue to see in addition to cost out an opportunity to unlock value for shareholders?

Speaker #1: Yeah, it's a good question, Paul. It's something that we engage on on a very regular basis. And obviously, the India example is the most prominent one.

Tania Archibald: Well, it's a good question, Paul. It's something that we engage on in a very regular basis. Obviously the India example is the most prominent one. We have already wound down the properties business in the US, so we've released pretty much now all of the cash flows. There's one project to go, I'm sorry, in the BlueScope Properties Group in the US. When I look across the portfolio, at the moment I see a strategic rationale for all of the assets in the portfolio. What I've been particularly impressed with, I think the real gem of this year's performance has actually been our Southeast Asian business.

Speaker #1: We have already wound down the properties business in the US, so we've released pretty much now all of the cash flows, with one project to go.

Speaker #1: I'm sorry. In the BlueScope Properties Group in the US, when I look across the portfolio at the moment, I see strategic rationale for all of the assets in the portfolio.

Speaker #1: What I've been particularly impressed with, I think the real gem of this year's performance has actually been our Southeast Asian business. Often, we get questions around the value of that business.

Tania Archibald: Often we get questions around the value of that business, and I think the efforts that we've been putting into that business over the decades are now finally starting to shine through, and I think it's got a big role to play in the portfolio going forward. The China business is an interesting one. It's an intensely competitive market. It's a very weak macro environment. There's a lot of very exciting things going on in China. It's extremely innovative. There's a lot of IP sitting in China. We think it's a good business to have. It's obviously impacted in the last half with the cyclical impacts, and it is quite extreme in China in terms of the seasonality, I should say. We still think it's a good business. We think there's a lot of upside to be had with that business. So, we're very keen to retain that business.

Speaker #1: And I think the efforts that we've been putting into that business over the decades are now finally starting to shine through. I think it's got a big role to play in the portfolio going forward.

Speaker #1: The China business is an interesting one. It's an intensely competitive market. It's a very weak macro environment. There's also a lot of very exciting things going on in China.

Speaker #1: It's extremely innovative. There's a lot of IP sitting in China. We think it's a good business to have. It's obviously been impacted in the last half with the cyclical impacts.

Speaker #1: I mean, it is quite extreme in China in terms of the seasonality, I should say. We still think it's a good business. We think there's a lot of upside to be had with that business.

Speaker #1: So we're very keen to retain that business. And I think more broadly, when I look at the US, again, the ambition with the BCP business remains absolutely undiminished.

Tania Archibald: I think more broadly when I look at the US again, the ambition with the BCP business remains absolutely undiminished. Again, we are two years behind where we wanted to be, but we see a very large market. We think that we can adapt to have a value proposition that'll look a little bit different to Australia. It'll look a little bit different to New Zealand. It'll look different to what we do in Asia. It'll be adapted for that environment. But we believe that there is significant upside opportunity there. So we're very comfortable with the set of assets that we have. I think I'd earlier called out the performance of the pre-engineered buildings business in the US. It's been performing at a very strong level. They've put a lot of time and attention into how they manage their backlog and their margins.

Speaker #1: Again, we are two years behind where we wanted to be, but we see a very large market. We think that we can adapt to have a value proposition that looks a little bit different to Australia, a little bit different to New Zealand, and different to what we do in Asia.

Speaker #1: It'll be adapted for that environment. But we believe that there is significant upside opportunity there, so we're very comfortable with the set of assets that we have.

Tania Archibald: But we believe that there is significant upside opportunity there. So we're very comfortable with the set of assets that we have. I think I'd earlier called out the performance of the pre-engineered buildings business in the US. It's been performing at a very strong level. They've put a lot of time and attention into how they manage their backlog and their margins. They've got a good, healthy market that they're dealing with. We're very comfortable with the portfolio as it currently stands.

Speaker #1: I think I'd earlier called out the performance of the pre-engineered buildings business in the US. It's been performing at a very strong level. They've put a lot of time and attention into how they manage their backlog and their margins.

Speaker #1: They've got a good, healthy market that they're dealing with, so we're very comfortable with the portfolio as it currently stands.

Tania Archibald: They've got a good, healthy market that they're dealing with. We're very comfortable with the portfolio as it currently stands.

Speaker #2: Yeah, that's clear, Kenya. Can I then ask just a quick comment on Australian demand at the moment? I mean, volumes were good in the half.

Paul Young: Yeah, that's clear, Tania. Can I then ask just a quick comment on Australian demand at the moment? Volumes were good in the H1. TRUECORE volumes were good. I'm hearing about a Colorbond price increase possibly flowing through in the December H2. A&A volumes and just work on hand across the industry is strong exiting the H1. But then we've got obviously the uncertainty around the new Australian government policy with respect to negative gearing and housing. Your sales teams generally have a 1 to 3-month view on order books on Colorbond here domestically. What are they seeing on the ground, particularly in the last couple of months?

Speaker #2: Truecore volumes were good. I'm hearing about a Colorbond price increase possibly coming through in the December half. A&A volumes and just work on hand across the industry were strong exiting the half.

Speaker #2: And then we've got, obviously, the uncertainty around the new Australian government policy with respect to negative gearing and housing. Your sales teams generally have a sort of one- to three-month view on order books on Colorbond here domestically.

Speaker #2: What are they seeing on the ground, particularly in the last couple of months?

Speaker #1: Yeah, good, healthy, solid demand. It's been quite resilient, probably more than expected. I think the approvals have continued to trend upwards. I think what we do see, Paul, is a bit of a two-speed economy, in the sense that Queensland and WA are performing very, very strongly.

Tania Archibald: Yeah, good, healthy, solid demand. It's been quite resilient, probably more than expected. I think the approvals have continued to trend upwards. I think what we do see, Paul, is a bit of a two-speed economy in the sense that Queensland and WA are performing very strongly. Melbourne and Sydney are a little bit more challenged, but I think that provides us upside opportunity, in terms of the growth that we're going to see there. If I look more broadly, industrial commercial is also quite positive. I think the outlook for infrastructure is also quite positive. There's a bit of strength in demand actually coming from data centers. This one we find it difficult to quantify, but we do know that there's Colorbond going in as roofing and walling part of insulated metal panels. We also know there's a lot of beams going in there.

Speaker #1: Melbourne and Sydney are a little bit more challenged, but I think that provides us upside opportunity. In terms of the growth that we're going to see there, I look more broadly—industrial commercial is also quite positive.

Speaker #1: I think the outlook for infrastructure is also quite positive. There's a bit of strength in demand, actually coming from data centers. Now, this one we find difficult to quantify.

Speaker #1: But we do know that there's Colorbond going in as roofing and walling, part of insulated metal panels. We also know there's Welcome Beams going in there.

Speaker #1: So we see there's reasonable strength in demand. What we also see in the distribution channel is a fair degree of resilience. We don't think customers are sitting on a lot of inventory.

Tania Archibald: We see there's reasonable strength in demand. What we also see in the distribution channel is a fair degree of resilience. Don't think customers are sitting on a lot of inventory. I think they're buying very cautiously. But I think we've been impressed with the way that underlying demand has actually held up. In terms of the government changes, I find it an interesting one. I'm sure it'll have some positive impact. But at the end of the day, it doesn't really alleviate the supply problem. What really needs to happen here is we need the land to be freed up, the approvals to occur. We need the infrastructure to be put in place. Trades availability is a critical issue. I think until we address what sits at the fundamental heart of supply, I think it's going to be a little bit of a challenge.

Speaker #1: I think they're buying very cautiously, but we've been impressed with the way that underlying demand has actually held up. In terms of the government changes, I find it an interesting one.

Speaker #1: I mean, I'm sure it'll have some positive impact. But at the end of the day, it doesn't really alleviate the supply problem. What really needs to happen here is we need the land to be freed up, the approvals to occur, we need the infrastructure to be put in place. Trades availability is a critical issue.

Tania Archibald: What really needs to happen here is we need the land to be freed up, the approvals to occur. We need the infrastructure to be put in place. Trades availability is a critical issue. I think until we address what sits at the fundamental heart of supply, I think it's going to be a little bit of a challenge. But at the end of the day, we have got a structural shortfall in housing. The more that we can do on the supply side levers, the better we will be.

Speaker #1: And I think until we address what sits at the fundamental heart of supply, it's going to be a little bit of a challenge at the end of the day.

Tania Archibald: But at the end of the day, we have got a structural shortfall in housing. The more that we can do on the supply side levers, the better we will be.

Speaker #1: We've got a structural shortfall in housing, and the more that we can do on the supply side levers, the better we'll be.

Speaker #2: Maybe I can add a point, Paul. Obviously, we've got a reasonable exposure to A&A, and those budget changes really don't have an impact in that space.

David Fallu: Maybe another point to add, Paul, is obviously, we have got a reasonable exposure to A&A, and those budget changes really do not have an impact in that space.

David Fallu: Maybe

Paul Young: Okay

David Fallu: Another point to add, Paul, is obviously, we have got a reasonable exposure to A&A, and those budget changes really do not have an impact in that space.

Speaker #3: Yeah, I noticed that line's trending up. Okay, thank you. That's all positive.

Paul Young: Yeah, I noticed that line is trending up. Okay, thank you. That is all positive.

Speaker #1: Thanks, Paul.

Tania Archibald: Thanks, Paul.

Speaker #4: Your next question comes from Tianjiang with Bank of America. Please go ahead.

Operator: Your next question comes from Chen Jiang with Bank of America. Please go ahead.

Speaker #5: Good morning, Tanya and David. Thank you for taking my question. Some of my questions have already been asked. Just a few follow-ups, if I can.

Chen Jiang: Good morning, Tania and David. Thank you for taking my questions. Some of my questions have been asked. Just a few follow-ups, if I can. Firstly, on the Australia business, you mentioned the demand is strong in Australia. In contrast, the Asia steel spread remains subdued, and actually the spot spread has been declining, and China net steel exports remain elevated to the rest of countries. I am just wondering, for the TRUECORE and the Colorbond volume growth, is that demand or strong demand across all of your steel products or just for the TRUECORE and Colorbond, like a value-added product? I guess I am just trying to understand the volume growth in the TRUECORE and the value-added. Is that driven by the demand, strong demand in Australia, or driven by you are growing the market share, like you mentioned, over your competitors? I have a few after this.

Speaker #5: Firstly, on the Australia business, you mentioned the demand is strong in Australia, but the income tracks in Asia still remain subdued. And actually, the spreads there have been declining.

Speaker #5: And China net still exports remain elevated to the rest of countries. So I'm just wondering, for the Truecall and the color bond volume, growth, is that demand or strong demand is across all of your steel products or just for the Truecall and the color bond like a value-added product?

Chen Jiang: I am just wondering, for the TRUECORE and the Colorbond volume growth, is that demand or strong demand across all of your steel products or just for the TRUECORE and Colorbond, like a value-added product? I guess I am just trying to understand the volume growth in the TRUECORE and the value-added. Is that driven by the demand, strong demand in Australia, or driven by you are growing the market share, like you mentioned, over your competitors? I have a few after this. Thank you.

Speaker #5: I guess I'm just trying to understand the volume growth in the Truecall and the value-added. Is that driven by strong demand in Australia, or is it driven by your growing market share, like you mentioned, over your competitors?

Speaker #5: I have a few after this. Thank you.

Chen Jiang: Thank you.

Speaker #1: Yeah, it's a good question, Chen. Look, I would say that we have absolutely been growing share in Truecore and Colorbond. But I think the demand is reasonably strong across all of our steel products.

Tania Archibald: Yeah. It is a good question, Chen. Look, I would say that we have absolutely been growing share in TRUECORE and Colorbond. I think the demand is reasonably strong across all of our steel products. I do not think there is any areas of particular weakness that we would see. Certainly, some of the added strength that we would see in TRUECORE and Colorbond would be around that share growth. It goes, again, to the strategy that we have been driving for many years now, which is make sure we grow the domestic market, make sure we grow the value add component of the domestic market, make sure that we have a quality product, a premium branded product that we support through the channel, including pulling through the end demand by the work that we do in marketing, advertising, et cetera.

Speaker #1: I don't think there are any areas of particular weakness that we would see. But certainly, some of the added strength that we would see in Truecore and Colorbond would be around that share growth.

Speaker #1: And it goes, again, to the strategy that we've been driving for many years now, which is: make sure we grow the domestic market, make sure we grow the value-add component of the domestic market, make sure that we have a quality product—a premium-branded product—that we support through the channel, including pulling through the end demand by the work that we do in market advertising, etc.

Tania Archibald: It goes, again, to the strategy that we have been driving for many years now, which is make sure we grow the domestic market, make sure we grow the value add component of the domestic market, make sure that we have a quality product, a premium branded product that we support through the channel, including pulling through the end demand by the work that we do in marketing, advertising, et cetera. There is a big extensive program that sits behind all of that.

Speaker #1: So, there's a big, extensive program that sits behind all of that.

Tania Archibald: There is a big extensive program that sits behind all of that.

Speaker #5: Your thanks, Tonya. Is that across all your products, or just for the Truecall and the Colorbond you have strong demand?

Chen Jiang: Sure. Thanks, Tania. Is that across all your products or just for the TRUECORE and Colorbond you have strong demand?

Speaker #1: So demand is reasonably solid across all products and all product segments. There are no particular areas of weakness that we're seeing.

Tania Archibald: Demand is reasonably solid across all products, all product segments. There is no particular areas of weakness that we are seeing.

Speaker #5: Okay, right. Got it. That's good to know, thank you. And then for the blast furnace transition to your newly-reliant blast furnace fix—I know a lot of questions have been asked.

Chen Jiang: Okay. Right. Got it. That is good to know.

Tania Archibald: Yeah.

Chen Jiang: Thank you. For the blast furnace transition to your newly realigned BF6, I know a lot of questions have been asked, but I am wondering how long is the transition period.

Chen Jiang: Thank you. For the blast furnace transition to your newly realigned BF6, I know a lot of questions have been asked, but I am wondering how long is the transition period. I understand you mentioned the cut over is next H2 and then about a month to move to blast.

Speaker #5: But I'm wondering, how long is the transition period? I understand you mentioned the cutover is next half, and then it's about a month to move to the blast furnace fix.

Chen Jiang: I understand you mentioned the cut over is next H2 and then about a month to move to blast.

Tania Archibald: Yeah

Speaker #5: I'm just wondering, generally speaking—I mean, you haven't done, I mean, BlueScope haven't done a blast furnace transition for a while, really. So, are you expecting any volume impact?

Chen Jiang: furnace 6. I am just wondering, generally speaking, BlueScope has not done blast furnace transition for a while, realigned, so are you expecting any volume impact as well as cost?

Chen Jiang: furnace 6. I am just wondering, generally speaking, BlueScope has not done blast furnace transition for a while, realigned, so are you expecting any volume impact as well as cost? Are you running two blast furnaces at the same time until your newly realigned one is going to run smoothly? How should we think about that beyond the H1 of FY27? Thank you.

Speaker #5: And as well as cost for—are you running two blast furnaces at the same time until your newly relined one is going to run smoothly?

Tania Archibald: Yeah

Chen Jiang: Are you running two blast furnaces at the same time until your newly realigned one is going to run smoothly? How should we think about that beyond the H1 of FY27? Thank you.

Speaker #5: How should we think about that, beyond the first half of FY27? Thank you.

Speaker #1: Yeah, yeah. No, it's a good question. So, I think the last time we did a reliant was back in 2009, and that was when we had a two-blast-furnace situation.

Tania Archibald: Yeah. No, it is a good question. I think the last time we did a realign was back in 2009, and that was when we had a two blast furnace situation. Back then, what you have to do is go like mad and realign the furnace at pace, because you are not using and you obviously need that volume. Now, since that time, we have shut down one of the blast furnaces. So blast furnace 6 has actually been sitting there as a mothballed blast furnace, which we have sort of kept carefully under wraps. It is that blast furnace and the broader precinct around blast furnace 6 that we have been doing all of the upgrade work on. So this is, to be fair, it is not just a realigning the blast furnace itself, the furnace proper.

Speaker #1: And so back then, what you had to do was go like mad and relight the furnace at pace, because you're obviously out, you're not producing, and you obviously need that volume.

Speaker #1: Now, since that time, we've shut down one of the blast furnaces. So blast furnace six has actually been sitting there as a mothballed blast furnace.

Speaker #1: Which we've sort of kept carefully under wraps. And it's that blast furnace and the broader precinct around Blast Furnace 5 that we've been doing all of the upgrade work on.

Speaker #1: So, just to be fair, it's not just relining the blast furnace itself—the furnace proper. There is a huge amount of work that's been going into the whole infrastructure that sits around that facility.

Tania Archibald: There is a huge amount of work that has been going into the whole infrastructure that sits around that facility. We can no longer run dual blast furnaces for any extended period of time. We simply do not have the infrastructure in place to do that. So what we will be doing is building stock ahead of the transition. That is some of the disruptions that you will sort of see being impacted in the numbers right now. So we build stock, and then we will basically run down number 5 blast furnace. We will ramp up number 6. That will occur over the space of about a month, all being well. Then we will basically just do the full cut-over, and number 5 will then become mothballed.

Speaker #1: We can no longer run dual blast furnaces for any extended period of time. We simply don't have the infrastructure in place to do that.

Speaker #1: So, what we've been doing, or will be doing, is building stock ahead of the transition. And so, that's some of the disruption that you'll see being impacted in the numbers right now.

Speaker #1: So we build stock, and then we will basically take down—we'll run down—Number 5 Blast Furnace. We'll ramp up Number 6. That'll occur over the space of about a month.

Speaker #1: All being well, and then we'll basically just do the full cutover in number five. We'll then become mothballed.

Speaker #5: Right, thanks. And that is going to happen in the second half of FY27, like how you are going to run down blast furnace five, and then ramp up blast furnace six.

Chen Jiang: Right. Thanks. That is going to happen in H2 FY27, like how you are going to-

Tania Archibald: Yes

Chen Jiang: running down blast furnace 5-

Tania Archibald: Yes

Chen Jiang: and then ramping up BF6. I guess that 1 month will give you enough time to commission FY26 from an engineering perspective.

Speaker #5: And I guess that one month gives you enough time to commission FY26 from an engineering perspective, smoothly.

Tania Archibald: Yes

Chen Jiang: actually smoothly.

Speaker #1: Yes. Yes. Yes. So they'll do all of the pre-work that they can, and then they'll basically blow in the Reliant blast furnace. Hopefully, it'll occur early in the half.

Tania Archibald: Yes. They will do all of the pre-work that they can, and then they will basically blow in the realigned blast furnace. Hopefully, it will occur early in the half. There is a lot of moving parts. What we will do in November at the AGM is we will give an update then as to the timetable. We will have a much clearer view then on the exact timetable for the transition.

Speaker #1: Although there are a lot of moving parts, what we'll do in November at the AGM is give an update then as to the timetable.

Speaker #1: We'll have a much clearer view then on the exact timetable for the transition.

Speaker #5: Great, that'll be helpful. Can I squeeze in one last question about your US business, the BCP? BCP guided one-third higher—just at a high level, that's one-third higher than the second half?

Chen Jiang: Great. That will be helpful. Can I squeeze in a last question about your US business, the BCP? BCP guided 1/3 higher than the H2. On a high level, I am wondering how much is due to your turnaround strategy. Are you gaining market share in volume? How much is due to better demand in US? Well, you mentioned a couple of times that the demand is solid in US which probably led to better coating pricing or coating margin. I am just trying to think how you think about your turnaround strategy to continue, or it is just that overall, the industry, the US steel industry is solid. Thank you.

Speaker #5: Just on a high level, I'm wondering how much is due to your turnaround strategy? Are you gaining market share in volume, and how much is due to better demand in the US?

Speaker #5: Well, you mentioned a couple of times that the demand is solid in the US, which probably led to better coating pricing or coating margins. I'm just trying to think about how you think about your turnaround strategy—to continue, or is it just that overall, the US steel industry is solid?

Speaker #5: Thank you.

Speaker #1: Just to be clear, the reporting segment and the outlook segment are for BCP&A, not just BCP. There are three businesses that sit within that.

Tania Archibald: Just to be clear, the reporting segment and the outlook segment is for BCPNA. It is not just BCP. There are three businesses that sit within that, and there is a broadly equal uplift across each component of those businesses. That includes the Buildings business, BlueScope Buildings, so Butler, Varco, Pruden. It is the Steelscape business, Steelscape ASC, that sits on the West Coast, and the BCP business. The BCP business, that is much more around operational improvements in the business. It is not off the back of growing market share. It is fundamentally improving the performance of the underlying assets.

Speaker #1: And there's a broadly equal uplift across each component of those businesses. So that includes the Buildings business, BlueScope Buildings—so Butler, Varco Pruden; it's the Steelscape business, Steelscape ASC, that sits on the West Coast; and the BCP business.

Speaker #1: And the BCP business, that's much more around operational improvements in the business. It's not off the back of growing market share; it's fundamentally improving the performance of the underlying assets.

Speaker #5: Great, good to hear. Thank you so much, Tonya. I will pass it on.

Chen Jiang: Great. Good to hear. Thank you so much, Tania. I will pass it on.

Speaker #1: Thanks,

Tania Archibald: Thanks, Chen.

Speaker #4: Your next question comes from Brooke Campbell, Corporate, with Baron Joey. Please go ahead.

Operator: Your next question comes from Brooke Campbell-Crawford, corporate, with Barrenjoey. Please go ahead.

Speaker #6: Yeah, good morning. Thanks for taking my questions. Just on the US pricing environment—you talked about the fixed price contracts, which is helpful. But just on the shorter term, almost spot volume, I guess, things that are on, like, a one-month lag.

Brooke Campbell-Crawford: Yeah, good morning. Thanks for taking my questions. Just on the US pricing environment, you talked about fixed price contracts, which is helpful. But just on the shorter term and almost spot volume, I guess, things that are on a one-month lag, how are you seeing the sort of discounts to the benchmarks playing out? Is it tightening up through the course of this year and at the moment, just given, I guess, service center inventory is pretty low and lead times are sort of ticking up a bit? Any commentary around that would be good. Thanks.

Speaker #6: How are you seeing the sort of discounts to the benchmarks playing out? Is it tightening up through the course of this year and at the moment?

Speaker #6: Just given, I guess, service center and we're just pretty low, and lead times are sort of ticking up a bit. Any commentary on that would be good, thanks.

Speaker #1: Thanks, Brooke. What I'd say is it's stable—it's in line with longer-term history. I think the discounts elevate during uncertain times, but there's nothing really uncertain around the current strong prices.

Tania Archibald: Thanks, Brooke. What I'd say is it's stable. It's in line with longer-term history. I think the discounts elevate during uncertain times. But there's nothing really uncertain around the current strong prices. So I would say relatively stable, Brooke.

Speaker #1: So, I would say relatively stable, Brooke.

Speaker #6: Okay, that's helpful. Tonya, maybe just a follow-up. You mentioned earlier on some options for growth in the U.S. Buildings business, and in Asia capacity as well.

Brooke Campbell-Crawford: Okay, that's helpful. Tanya, maybe just a follow-up. You mentioned earlier on some options for growth in the US Buildings business and in Asia capacity as well. You mentioned that in response to another analyst's question. Do you mind just providing a little bit of color around the two of those would be good. Thanks.

Speaker #6: You mentioned that in your response to another analyst's question. Do you mind just providing a little bit of color on those? That would be good, thanks.

Tania Archibald: We just think there's some relatively low CapEx options to free up a bit more capacity and get some more throughput through our facilities in North America at Buildings. So we're actively looking at some options there. When I look at Asia, when I look at the performance of those businesses there, we've actually got one metal coating line that's mothballed, another one that's reasonably inactive. It wouldn't take much effort to restart those metal coating lines. We've also got some in-line painting capability that we're thinking about doing some modifications to. Again, that gives us some relatively low capital opportunities to continue to grow that business. Again, I think that business where we've got a fantastic position across every major Southeast Asian economy, we've been at it for decades. We understand what it takes to be successful there.

Speaker #1: We just think there are some relatively low-capital options to free up a bit more capacity and get some more throughput through our facilities in North America and at buildings.

Speaker #1: So we're actively looking at some options there. When I look at Asia, when I look at the performance of those businesses there, we've actually got one metal coating line that's mothballed, another one that's reasonably inactive.

Speaker #1: It wouldn't take much effort to restart those metal coating lines. We've also got some inline painting capability that we're thinking about doing some modifications to.

Tania Archibald: We've also got some in-line painting capability that we're thinking about doing some modifications to. Again, that gives us some relatively low capital opportunities to continue to grow that business. Again, I think that business where we've got a fantastic position across every major Southeast Asian economy, we've been at it for decades. We understand what it takes to be successful there. All of those items that I mentioned, they are all within that capital envelope that David mentioned.

Speaker #1: And again, that gives us some relatively low-capital opportunities to continue to grow that business. So again, I think that business, where we've got a fantastic position across every major Southeast Asian economy—we've been at it for decades.

Speaker #1: We understand what it takes to be successful there. And all of those items that I mentioned—they're all within that capital envelope that David mentioned.

Tania Archibald: All of those items that I mentioned, they are all within that capital envelope that David mentioned.

Speaker #6: Thank you very much.

Brooke Campbell-Crawford: Thank you very much.

Speaker #1: Thanks, Brooke.

Tania Archibald: Thanks, Brooke.

Speaker #4: There are no further questions at this time. I'll now hand back to Tonya Archibald for closing remarks.

Operator: There are no further questions at this time. I will now hand back to Tania Archibald for closing remarks.

Tania Archibald: Thank you everyone for joining us today. I know you have very busy days, and we look forward to catching up with you all individually over the coming week.

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