Q2 2026 Ampol Ltd Earnings Call

August 24, 2026

Speaker #2: Thank you for standing by, and welcome to the Ampol Limited half-year 2026 results briefing. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session.

Operator 2: Thank you for standing by, and welcome to the Ampol Limited H1 2026 Results Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Matt Halliday, Managing Director, and CEO. Please go ahead.

Operator: Thank you for standing by, and welcome to the Ampol Limited H1 2026 Results Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Matt Halliday, Managing Director, and CEO. Please go ahead.

Speaker #2: If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Matt Halliday, Managing Director and CEO.

Speaker #2: Please go ahead.

Speaker #3: Thank you very much, and good morning, everyone. My name is Matt Halliday. I'm the Managing Director and CEO of Ampol. Welcome to our 2026 half-year results call.

Matt Halliday: Thank you very much, and good morning, everyone. My name's Matt Halliday. I'm the Managing Director and CEO of Ampol. Welcome to our 2026 half-year results call. During the presentation, we'll be referring to the documents lodged with the ASX this morning, including our results, presentation, and supporting materials. Before we begin, I'll draw your attention to the important notice on slide 2. As usual, today's presentation does include forward-looking statements and non-IFRS measures, and I encourage you to read the notice carefully. I'm joined today by our Group CFO, Greg Barnes, who will take you through the financial result in more detail. After the prepared remarks, Greg and I will take your questions. Also joining us on the call are members of the executive team who will support the Q&A. I'll start, as always, with safety.

Speaker #3: During the presentation, we'll be referring to the documents lodged with the ASX this morning, including our results presentation and supporting materials. Before we begin, I'll draw your attention to the important notice on slide 2.

Speaker #3: As usual, today's presentation does include forward-looking statements and non-IFRS measures. I encourage you to read the notice carefully. I'm joined today by our Group CFO, Greg Barnes, who will take you through the financial results in more detail. After the prepared remarks, Greg and I will take your questions.

Speaker #3: Also joining us on the call are members of the executive team who will support the Q&A. I'll start, as always, with safety. Across the group, we had no Tier 1 or Tier 2 process safety incidents in the first half of '26, and none since July '25.

Matt Halliday: Across the group, we had no Tier 1 or Tier 2 process safety incidents in the H1 2026, and none since July 2025. That is an important outcome and reflects the continued embedding of our integrated operational risk management framework. On personal safety, the picture is more mixed, with total recordable injury frequency rate increasing. However, we have also introduced a serious case frequency rate to better capture cases that result in more than a week away from work, including musculoskeletal and psychosocial matters. This gives us a clearer view of where we need to focus. Turning now to the integrated platform on slide 5. Ampol has built the leading Asia Pacific physical fuel optimization platform that leverages our infrastructure, logistics, and trading capabilities and market intelligence to generate resilient earnings through the cycle.

Speaker #3: That is an important outcome and reflects the continued embedding of our integrated operational risk management framework. On personal safety, the picture is more mixed.

Speaker #3: With the total recordable injury frequency rate increasing, however, we have also introduced a serious case frequency rate to better capture cases that result in more than a week away from work, including musculoskeletal and psychosocial matters.

Speaker #3: This gives us a clearer view of where we need to focus. Turning now to the integrated platform on slide 5, Ampol has built the leading Asia-Pacific physical fuel optimization platform that leverages our infrastructure, logistics, trading capabilities, and market intelligence to generate resilient earnings through the cycle.

Speaker #3: The first half of '26 really demonstrated the value of Ampol's integrated supply chain and trading capability. While the market conditions were certainly exceptional, the result also reflected the strength of our supply position, our risk management capability, our customer relationships, and our ability to optimize product flows throughout the value chain.

Matt Halliday: The H1 2026 really demonstrated the value of Ampol's integrated supply chain and trading capability. While the market conditions were certainly exceptional, the result also reflected the strength of our supply position, our risk management capability, our customer relationships, and our ability to optimize product flows throughout the value chain. The important takeaway is that this capability has been built over many years. It comes from investment in supply optimization, terminals, Lytton, risk management, and our retail networks. Therefore, the strength of the H1 result is the demonstration of our integrated platform working as intended, maintaining fuel security for customers, and creating value for shareholders, especially when markets are tight and disrupted. Turning to the performance overview on slide 6. Ampol delivered a very strong H1 result on an RCOP basis, with EBITDA of AUD 1.64 billion, EBIT of AUD 1.39 billion, and NPAT of AUD 860 million.

Speaker #3: The important takeaway is that this capability has been built over many years. It comes from investment in supply optimization, terminals, Lytton, risk management, and our retail networks.

Speaker #3: Therefore, the strength of the first-half result is the demonstration of our integrated platform working as intended, maintaining fuel security for customers and creating value for shareholders, especially when markets are tight and disrupted.

Speaker #3: Turning to the performance overview on slide 6, Ampol delivered a very strong first half result on an ARCOP basis, with EBITDA of $1.64 billion, EBIT of $1.39 billion, and NPAT of $860 million.

Speaker #3: Statutory NPAT was $1.36 billion, including inventory gains and significant items. The result reflects both favorable market conditions and the structural benefits of our integrated platform.

Matt Halliday: Statutory NPAT was AUD 1.36 billion, including inventory gains and significant items. The result reflects both favorable market conditions and the structural benefits of our integrated platform, with underlying performance improved across multiple segments. Convenience retail continued to grow, commercial and wholesale customer relationships were further strengthened, and our trading and shipping capabilities supported supply security, and therefore earnings, during a period of major market disruption. Turning now to the key group metrics. Total sales volume was resilient at 12.3 billion liters and up ex net-sell. Net borrowings increased to AUD 3.52 billion, principally reflecting the completion of the EG Australia acquisition on 30 June, including our decision to cash settle the scrip component of the consideration. Even with that acquisition funding, leverage remained below our target range at around 1.8x, supported by the very strong RCOP EBITDA outcome and inventory gain.

Speaker #3: With underlying performance improved across multiple segments, convenience retail continued to grow, commercial and wholesale customer relationships were further strengthened, and our trading and shipping capabilities supported supply security and therefore earnings during a period of major market disruption.

Speaker #3: Turning now to the key Group metrics. Total sales volume was resilient at 12.3 billion liters and up ex-net net sell. Net borrowings increased to $3.52 billion, principally reflecting the completion of the EG Australia acquisition on 30 June, including our decision to cash settle all the scrip component of the consideration.

Speaker #3: Even with that acquisition funding, leverage remained below our target range at around 1.8 times, supported by the very strong ARCOP EBITDA outcome and inventory gain.

Speaker #3: That balance sheet strength, together with the cash generated in the half, underpins the Board's decision to declare an interim dividend of 185 cents per share.

Matt Halliday: That balance sheet strength, together with the cash generated in the half, underpins the board's decision to declare an interim dividend of AUD 1.85 per share. Now on slide 8. Given the important role that Ampol plays in the communities where we operate, a financially strong Ampol benefits all our stakeholders. We were able to maintain uninterrupted supply to customers and dealers through wholesale and retail supply chains. This includes the Ugo discount brand, which provided lower cost fuel to customers during the peak of the crisis each and every day. We had a clear focus on supply to the regions, with supply volume increasing by 30% in March. And we have expanded our partnership with Rural Aid for 3 years, backing farming families and the regions more generally.

Speaker #3: Now on slide 8. Given the important role that Ampol plays in the communities where we operate, a financially strong Ampol benefits all our stakeholders.

Speaker #3: We were able to maintain uninterrupted supply to customers and dealers through wholesale and retail supply chains. This includes the Hugo Discount brand, which provided lower-cost fuel to customers during the peak of the crisis, each and every day.

Speaker #3: We had a clear focus on supply to the regions, with supply volume increasing by 30% in March, and we have expanded our partnership with Rural Aid for three years, backing farming families and the regions more generally.

Speaker #3: We played a key role in Australia and New Zealand in building additional national inventory levels, with the support of the governments of both countries.

Matt Halliday: We played a key role in Australia and New Zealand in building additional national inventory levels with the support of the governments of both countries. And I am proud to say that our people worked safely and tirelessly in the midst of the crisis, showing tremendous commitment to keeping Australia and New Zealand moving. I will now hand over to Greg to take you through the detail of the group and segment financial performance.

Speaker #3: And I'm proud to say that our people worked safely and tirelessly in the midst of the crisis, showing tremendous commitment to keeping Australia and New Zealand moving.

Speaker #3: I'll now hand over to Greg to take you through the details of the group and segment financial performance.

Speaker #2: Thank you, Matt. Good morning, everyone. As Matt said, this was a very strong half. In fact, for the first half of 2026, our earnings exceeded any full-year result we've ever reported.

Greg Barnes: Thank you, Matt. Good morning, everyone. As Matt said, this was a very strong H1. In fact, for the H1 2026, our earnings exceeded any full year result we have ever reported. This reflects the extraordinary disruption that took place and our team's ability to navigate this and keep fuel flowing to our customers. I will take you through the group level results and then into the detail of each segment on subsequent slides. If we turn to slide 10, you can see the detail behind group sales volumes. Overall, group sales volumes were up 1.5% at 12.3 billion liters for the H1, once you look through the net-sell volumes, which will move around from period to period. Convenience retail volumes increased 2.4%, supported by product availability and the continued expansion of Ugo.

Speaker #2: This reflects the extraordinary disruption that took place and our team's ability to navigate this and keep fuel flowing to our customers. I'll take you through the group-level results, and then into the detail of each segment on subsequent slides.

Speaker #2: So, if we turn to slide 10, you can see the detail behind group sales volumes. Overall, group sales volumes were up 1.5% at 12.3 billion litres for the half, once you look through the net sell volumes, which will move around from period to period.

Speaker #2: Convenience retail volumes increased 2.4%, supported by product availability and the continued expansion of Hugo. Australian wholesale volumes, excluding the Net Sell, also grew by 2.9%, reflecting the consistency of our supply chain in keeping fuel flowing during this disrupted period.

Greg Barnes: Australian wholesale volumes, excluding the net-sell, also grew by 2.9%, reflecting the consistency of our supply chain in keeping fuel flowing during this disrupted period. Z Energy volumes were lower, down 2.5%, as local market dynamics impacted demand and the ability to pass through higher fuel costs to customers. Looking at product mix, middle distillates continue to represent more than 70% of our transport fuel sales volumes. Within this, jet was up more than 10% year-on-year, driven by growth in Australian and international markets. We go to slide 11. It sets out our group's financial performance. RCOP EBITDA was AUD 1.6 billion. That is up 152% on the prior corresponding period, and RCOP EBIT was AUD 1.4 billion, up 245%.

Speaker #2: Z Energy volumes were lower, down 2.5%, as local market dynamics impacted demand and the ability to pass through higher fuel costs to customers. Looking at product mix, middle distillates continue to represent more than 70% of our transport fuel sales volumes.

Speaker #2: Within this, Jet was up more than 10% year on year, driven by growth in Australian and international markets. If we go to slide 11, it sets out our group's financial performance.

Speaker #2: ARCOP EBITDA was $1.6 billion, up 152% on the prior corresponding period. ARCOP EBIT was $1.4 billion, up 245%. As I mentioned earlier, we obviously benefited from very favorable market conditions.

Greg Barnes: As I mentioned earlier, we obviously benefited from very favorable market conditions, but we also executed very well throughout the value chain, and this is reflected in a high quality and broad-based result. I am going to step through each segment in a moment, but before doing so, if we look at RCOP NPAT, it was AUD 857 million for the period, reflecting the strong underlying result. Our effective tax rate was 30% on a higher earnings contribution from Australia, as well as some minor one-off adjustments. The underlying rate was about 28.5%. Lower interest expense was a result of lower debt levels prior to the acquisition of EG, which took place on 30 June, and was net of AUD 24 million of interest that was capitalized in relation to multi-year capital works. Statutory NPAT was AUD 1.4 billion.

Speaker #2: But we also executed very well throughout the value chain, and this is reflected in a high-quality and broad-based result. I'm going to step through each segment in a moment, but before doing so, let's look at RCOP NPAT.

Speaker #2: It was $857 million for the period, reflecting the strong underlying result. Our effective tax rate was 30%, due to a higher earnings contribution from Australia, as well as some minor one-off adjustments.

Speaker #2: The underlying rate was about 28.5%. Lower interest expense was a result of lower debt levels prior to the acquisition of EG, which took place on the 30th of June.

Speaker #2: And was net of $24 million of interest that was capitalized in relation to multi-year capital works. Statutory NPAT was $1.4 billion. This includes inventory gains reflecting rising product and crude costs over the six-month period.

Greg Barnes: This includes inventory gains reflecting rising product and crude costs over the six-month period. Statutory NPAT also included significant items, including costs associated with the acquisition of EG. If we turn to each business, slide 12 shows you the size and the breadth of the F&I EBIT result. The Lytton Refinery had an extraordinary result. Margins were very strong due to regional supply constraints and the cost of importing equivalent product during the period. The result also reflects an extremely consistent operating performance, a credit to the hard yards of the team, led by Michele Bardy and Stuart Simons, and what they have put in to improve reliability over the period. Likewise, our sourcing and distribution businesses perform well, and you can see that in the Australian and international results.

Speaker #2: Statutory NPAT also included significant items, including costs associated with the acquisition of EG. So, if we turn to each business, slide 12 shows you the size and breadth of the F&I EBIT result.

Speaker #2: The Lytton Refinery delivered an extraordinary result. Margins were very strong due to regional supply constraints and the cost of importing equivalent product during the period.

Speaker #2: The result also reflects an extremely consistent operating performance—a credit to the hard yards of the team led by Michelle Bardi and Stuart Simons, and what they have put in to improve reliability over the period.

Speaker #2: Likewise, our sourcing and distribution businesses performed well, and you can see that in the Australian international results. Securing term supply, ensuring supplier performance, optimization across markets, and price risk management all played their part in delivering a very strong operating result and ensuring that our customers got the fuel they needed.

Greg Barnes: Securing term supply, ensuring supplier performance, optimization across markets, and price risk management all play their part in delivering a very strong operating result and ensuring that our customers got the fuel they needed. Energy solutions also benefited from the focus of that team on public charging following the restructure last year. Slide 13 looks at the key operating metrics for Lytton. I have already talked to the reliability of operations at the refinery, and that is reflected in the graph on the right-hand side. On the left-hand side, you can see that the Lytton refiner margin averaged US$28.26 per barrel for the H1, compared with US$7.44 per barrel in the prior corresponding period. Remembering every US$1 is worth about AUD 30 million per H1. You can also see the uptick in the July margin, where we also ran at full production before heading into the major maintenance efforts in August.

Speaker #2: Energy Solutions also benefited from the focus of that team on public charging, following the restructure last year. Slide 13 looks at the key operating metrics for Lytton.

Speaker #2: I've already talked to the reliability of operations at the refinery, and that's reflected in the graph on the right-hand side. On the left-hand side, you can see that the Lytton Refiner margin averaged US 28 dollars 26 per barrel for the half, compared with 7 dollars 44 per barrel in the prior corresponding period.

Speaker #2: Remembering every US one dollar is worth about 30 million Aussie dollars per half. You can also see the uptick in the July margin, where we also ran at full production before heading into the major maintenance efforts in August.

Greg Barnes: Remembering every US$1 is worth about AUD 30 million per H1. You can also see the uptick in the July margin, where we also ran at full production before heading into the major maintenance efforts in August.

Speaker #2: And while we're on this slide, I just wanted to remind people of the government's revision to the Fuel Security Services Payment, or the FSSP, which took place earlier this year.

Greg Barnes: While we are on this slide, I just wanted to remind people of the government's revision to the Fuel Security Services Payment, or the FSSP, which took place earlier this year. My sense is this got a little lost in the noise of the Iran conflict, which followed shortly afterwards. The revision sees the cap and collar lifted from a previous range of 4.6 cents to 6.4 cents per liter, and has increased that to 8.2 cents to 10 cents per liter. As the red line on that graph on the left-hand side shows, this moves the cap to be broadly in line with the average performance over the last five years. This will make a big difference to stability of refining earnings in future years. It also comes ahead of a second phase review, which we will be looking to progress over the remainder of this year.

Speaker #2: My sense is this got a little lost in the noise of the Iran conflict, which followed shortly afterward. The revision sees the cap and collar lifted from a previous range of 4.6 to 6.4 cents per liter, and that has been increased to 8.2 to 10 cents per liter.

Speaker #2: As the red line on that graph on the left-hand side shows, this moves the cap to be broadly in line with the average performance over the last five years.

Speaker #2: This will make a big difference to the stability of refining earnings in future years. It also comes ahead of a second-phase review, which we'll be looking to progress over the remainder of this year.

Speaker #2: Slide 14 shows the drivers of Lytton's earnings year on year. Frankly, I've touched on the refining margins and production, which were the key drivers already, so I'm just going to move to slide 15.

Greg Barnes: Slide 14 shows the drivers of Lytton's earnings year-on-year. Frankly, I have touched on the refining margins and production, which were the key drivers already, so I am just going to move to slide 15. Slide 15 talks through the F&I international result. As most of you are aware, we operate one supply optimization or trading and shipping team out of Singapore and Houston. The primary role of this team is to support physical supply, sea freight, price risk management of refined products into our Australian and New Zealand businesses, as well as crude oil to the Lytton Refinery. The benefits of these activities is included in Lytton, F&I Australia, and New Zealand results. The scale of our physical short into Australia and New Zealand, and the insights we gain by being a major buyer in the region, enables Ampol to derive additional value via our international business.

Speaker #2: Slide 15 talks through the F&I International result. As most of you are aware, we operate one supply optimization—or trading and shipping—team out of Singapore and Houston.

Speaker #2: The primary role of this team is to support physical supply, sea freight, and price risk management of refined products into our Australian and New Zealand businesses, as well as crude oil to the Lytton Refinery.

Speaker #2: The benefits of these activities are included in the Lytton F&I Australia and New Zealand results. The scale of our physical short into Australia and New Zealand, and the insights we gain by being a major buyer in the region, enable Ampol to derive additional value via our international business.

Speaker #2: This can come from sales of fuel to third parties, fuel blending and storage, managing time charters, or capitalizing on pricing dislocation between markets. In many respects, we are unique in an Australian–New Zealand context in our ability to do this at scale within tightly controlled risk settings.

Greg Barnes: This can come from sale of fuel to third parties, fuel blending and storage, managing time charters, or capitalizing on pricing dislocation between markets. In many respects, we are unique in an Australian-New Zealand context in our ability to do this at scale within tightly controlled risk settings. It is a source of significant outperformance in periods like what we have just seen. While the source of the result might vary year to year, possessing the capabilities to leverage these market insights that we generate and adapt to changing market conditions means we can create value that others cannot. This capability has taken over a decade to build, requires little capital, and supplements the benefits we see flowing through the rest of our system. Slide 16 shows the F&I Australia result. The business delivered a very strong H1, with RCOP EBIT increasing to AUD 309 million.

Speaker #2: And it's a source of significant outperformance in periods like what we've just seen. So, while the source of the result might vary year to year, possessing the capabilities to leverage these market insights that we generate and adapt to changing market conditions means we can create value that others cannot.

Speaker #2: This capability has taken over a decade to build, requires little capital, and supplements the benefits we see flowing through the rest of our system.

Speaker #2: Slide 16 shows the F&I Australia result. The business delivered a very strong first half, with ARCOP EBIT increasing to $309 million. In a period where less reliable supply chains came under pressure, Ampol was able to supply customers, including through periods of pull-forward demand.

Greg Barnes: In a period where less reliable supply chains came under pressure, Ampol was able to supply customers, including through periods of pull-forward demand. The result also includes supply benefits from term supply, favorably priced ahead of the conflict, and the optimization by trading and shipping of barrels flowing into the Australian market. If we turn to energy solutions on slide 17, I think it is fair to say with the exit from retail electricity, we have simplified our approach to energy solutions and are now very focused on electric vehicle charging. Across Australia and New Zealand, we delivered 79 public charging bays in the H1, up from 49 in the prior corresponding period. Charging sessions and energy sold continue to grow, particularly in Australia. We are keeping a close eye on this market, and we are positive about the potential for EV charging demand to accelerate.

Speaker #2: The result also includes supply benefits from term supply, favorably priced ahead of the conflict, and the optimization by trading and shipping of barrels flowing into the Australian market.

Speaker #2: If we turn to Energy Solutions on slide 17, I think it's fair to say that with the exit from retail electricity, we've simplified our approach to Energy Solutions and are now very focused on electric vehicle charging.

Speaker #2: Across Australia and New Zealand, we delivered 79 public charging bays in the first half, up from 49 in the prior corresponding period. Charging sessions and energy sold continue to grow, particularly in Australia.

Speaker #2: We're keeping a close eye on this market, and we're positive about the potential for EV charging demand to accelerate. The two charts on the right-hand side tell some of that story.

Greg Barnes: The two charts on the right-hand side tell some of that story. We are seeing rising EV sales as a percentage of new car sales, driven by the availability of more affordable Chinese vehicles. Noting that EVs represented 20% of new car sales during the Q2 of this year. Secondly, the industry is seeing constraints in getting access to new sites and grid capacity to build chargers to meet this demand. This should support utilization and reward those with access to good sites and to power. That puts Ampol in a strong position to leverage its capabilities and assets in the years ahead. Moving now to our Australian convenience retail business on slide 18. This was yet another strong result, extending the earnings growth that we have seen for a number of years now. Total retail fuel sales volume was up 2.4%, with growth in Ampol Foodary and Ugo.

Speaker #2: We're seeing rising EV sales as a percentage of new car sales, driven by the availability of more affordable Chinese vehicles. Notably, EVs represented 20% of new car sales during the second quarter of this year.

Speaker #2: And secondly, the industry is seeing constraints in getting access to new sites and grid capacity to build chargers to meet this demand. This should support utilization and reward those with access to good sites and to power.

Speaker #2: That puts Ampol in a strong position to leverage its capabilities and assets in the years ahead. Moving now to our Australian convenience retail business on slide 18.

Speaker #2: This was yet another strong result, extending the earnings growth that we have seen for a number of years now. Total retail fuel sales volume was up 2.4%, with growth in Ampol Foodary and Yugo.

Speaker #2: We extended the half with 47 sorry, we ended the half with 47 Yugo sites, and Yugo fuel volume growth was 64%. While premium fuels are down as a percentage of total fuel volume sold, this has largely due to growth in base-grade fuels, be it Yugo growth or market share gains in a period where less stable supply chains were really challenged.

Greg Barnes: We ended the half with 47 Ugo sites, and Ugo fuel volume growth was 64%. While premium fuels are down as a percentage of total fuel volume sold, this is largely due to growth in base grade fuels, be it Ugo growth or market share gains in a period where less stable supply chains were really challenged. Shop performance was also strong, with headline shop sales up 0.4 of 1%. Excluding tobacco and sites converted to Ugo, network shop sales grew 3.5%. Shop gross margin increased to 40.1%, and average basket value increased by 2.6%. Slide 19 really highlights the long-term trend of the retail performance. You can see the improvement in shop gross margin over time, the consistent improvement in average basket value despite the impact of tobacco, and the continued growth in convenience retail EBIT.

Speaker #2: Shop performance was also strong, with headline shop sales up 0.4 of 1%. Excluding tobacco and sites converted to Yugo, network shop sales grew 3.5%.

Speaker #2: Shop gross margin increased to 40.1%, and average basket value increased by 2.6%. Slide 19 really highlights the long-term trend of the retail performance. You can see the improvement in shop gross margin over time, the consistent improvement in average basket value despite the impact of tobacco, and the continued growth in convenience retail EBIT.

Speaker #2: The consistency of performance in convenience retail puts us in a great position as we integrate the EG Australia business in the coming months. This provides a clear pathway to scale for the Yugo format, while extending the network and improving customer experience at Ampol Foodary.

Greg Barnes: The consistency of performance in convenience retail puts us in a great position as we integrate the EG Australia business in the coming months. This provides a clear pathway to scale for the Ugo format while extending the network and improving customer experience at Ampol Foodary. Slide 20 shows the bridge for convenience retail earnings. EBIT increased by AUD 21.8 million year on year. Fuel income was the largest driver, reflecting volume growth and premium fuel mix. Shop income held broadly flat despite tobacco and disciplined cost management helped support overall earnings outcomes. Turning to New Zealand on slide 21, it is fair to say Z had a more challenging half, primarily due to the way the market reacted to the Iran conflict. Retail fuel volumes were lower in the half, reflecting softer conditions and the slower pass-through of rapidly rising input costs.

Speaker #2: Slide 20 shows the bridge for convenience retail earnings. EBIT increased by $21.8 million year on year. Fuel income was the largest driver, reflecting volume growth and a premium fuel mix.

Speaker #2: Shop income held broadly flat, despite tobacco, and disciplined cost management helped support overall earnings outcomes. Turning to New Zealand on slide 21, it's fair to say Z Energy had a more challenging half, primarily due to the way the market reacted to the Iran conflict.

Speaker #2: Retail fuel volumes were lower in the half, reflecting softer conditions and the slower pass-through of rapidly rising input costs. This impacted demand and also margins, as board prices lagged the rising cost of refined fuels.

Greg Barnes: This impacted demand and also margins as board prices lagged the rising cost of refined fuels. The underlying retail platform performed well. Average basket value increased to AUD 15.45, and store gross margin continued to improve. You can see on slide 22, it shows the New Zealand earnings bridge, and this chart is in New Zealand dollars. You can see we have normalized FY 2025 results to remove earnings from businesses we have since exited, including Flick Energy and dividends from Channel Infrastructure. The underlying business performance highlights the demand and temporary fuel margin impacts I just mentioned a moment ago.

Speaker #2: The underlying retail platform performed well. Average basket value increased to $15.45, and store gross margin continued to improve. You can see on slide 22, it shows the New Zealand earnings bridge.

Speaker #2: And this chart is in New Zealand dollars. You can see we've normalized FY25 results to remove earnings from businesses we have since exited, including Flick Energy, and dividends from Channel Infrastructure.

Speaker #2: The underlying business performance highlights the demand and temporary fuel margin impacts I just mentioned a moment ago. And while the chart above is presented in New Zealand dollars, it's also worth noting that the Kiwi dollar weakened year on year, and as a result, the translation to Aussie dollars was impacted by approximately $6.5 million year on year.

Greg Barnes: While the chart above is presented in New Zealand dollars, it is also worth noting that the Kiwi dollar weakened year-on-year, and as a result, the translation to Aussie dollars was impacted by approximately AUD 6.5 million year-on-year. If we go to our balance sheet and cash flow on slide 23. The result is a great reminder of just how cash generative this business can be. Our record earnings converted into a healthy cash generation, despite the need to carry more inventory given the supply chain challenges our industry was facing. It is important to note, however, that these cash flows do not include the tax on earnings generated in the period. These taxes will not be paid until the middle of 2027, and will be an uplift of approximately AUD 500 million.

Speaker #2: Okay, so if we go to our balance sheet and cash flow on slide 23, the result is a great reminder of just how cash-generative this business can be.

Speaker #2: Our record earnings converted into healthy cash generation, despite the need to carry more inventory given the supply chain challenges our industry was facing.

Speaker #2: It's important to note, however, that these cash flows do not include the tax on earnings generated in the period. These taxes will not be paid until the middle of 2027, and will be an uplift of approximately $500 million.

Speaker #2: Now, the reality is we should be able to unwind working capital at a similar rate. The all-cash acquisition of EG on the 30th of June added approximately $1.1 billion to net debt.

Greg Barnes: The reality is, we should be able to unwind working capital at a similar rate. The all-cash acquisition of EG on 30 June added approximately AUD 1.1 billion to net debt. The timing of the EG acquisition was fortuitous and given the strength of our performance during the H1, we elected to cash out the scrip component of the EG consideration for AUD 315 million. You will also note that Ampol is carrying AUD 148 million of additional inventory in an arrangement with Export Finance Australia to further bolster fuel reserves in Australia. Ampol takes no price risk on these categories, or these cargoes, I should say, and will be compensated for the cost of carry and handling costs associated with managing the volume.

Speaker #2: The timing of the EG acquisition was fortuitous, and given the strength of our performance during the half, we elected to cash out the scrip component of the EG consideration for $315 million.

Speaker #2: You'll also note that Ampol is carrying $148 million of additional inventory in an arrangement with Export Finance Australia, to further bolster fuel reserves in Australia.

Speaker #2: Ampol takes no price risk on these categories—or these cargos, I should say—and will be compensated for the cost of carry and handling costs associated with managing the volume.

Speaker #2: As a result of all of that, net borrowings ended the half at $3.5 billion, and leverage on net debt to EBITDA was 1.8 turns, reflecting the strong earnings result.

Greg Barnes: As a result of all of that, net borrowings ended the H1 at AUD 3.5 billion and leverage on net debt to EBITDA was 1.8x, reflecting the strong earnings result. Lastly from me, slide 24. The strong earnings and cash flow performance has enabled us to declare AUD 441 million of dividends or a AUD 1.85 per share interim dividend. This is our largest dividend ever and is in addition to the AUD 315 million cash out of the EG scrip consideration during the period, which you could argue is akin to a buyback. More broadly, we are committed to our capital allocation framework, that is maintaining a strong investment-grade credit rating, paying dividends within our targeted range of 50% to 70% of RCOP NPAT, deploying capital where we see returns and growth opportunities that are on strategy, and returning surplus capital to shareholders where we do not.

Speaker #2: And then lastly from me, slide 24. The strong earnings and cash flow performance has enabled us to declare $441 million of dividends, or a 185 cent per share interim dividend.

Speaker #2: This is our largest dividend ever, and it is in addition to the $315 million cash out of the EG script consideration during the period, which you could argue is akin to a buyback.

Speaker #2: More broadly, we're committed to our capital allocation framework. That is, maintaining a strong investment-grade credit rating, paying dividends within our targeted range of 50% to 70% of our COP NPAT, deploying capital where we see returns and growth opportunities that are on strategy, and returning surplus capital to shareholders where we do not.

Speaker #2: As the chart on the left-hand side illustrates, we have a strong track record of doing this, and you should expect the same from us in the future.

Greg Barnes: As the chart on the left-hand side illustrates, we have a strong track record of doing this, and you should expect the same from us in the future. With that, I will hand back to Matt to take you through the strategy update and the outlook. Thank you.

Speaker #2: So with that, I'll hand back to Matt, who will take you through the strategy update and the outlook. Thank you.

Speaker #1: Great. Thanks very much, Greg. We're now moving to the strategy update. So before turning to the outlook, I want to step back and explain how the results we have just walked through fit with the broader strategic direction of the group.

Matt Halliday: Great. Thanks very much, Greg. We are now moving to the strategy update. Before turning to outlook, I want to step back and explain how the result we have just walked through fits with the broader strategic direction of the group. The H1 result shows the value of the platform we have been building and strengthening over several years. That represents a larger transport energy business, a more resilient earnings base, stronger retail growth options, and meaningful capability in supply trading and risk management. The next few slides set out how we intend to keep building on that platform. Slide 26 sets out the strategic journey we have been on. Since 2019, we have progressively strengthened the core, restored the Ampol brand, expanded regionally through Z, built capability in retail segmentation, productivity and energy transition, and then added scale and earnings quality through the EG Australia acquisition.

Speaker #1: The first-half result shows the value of the platform we've been building and strengthening over several years. That platform represents a larger transport energy business, a more resilient earnings base, stronger retail growth options, and meaningful capability in supply trading and risk management.

Speaker #1: The next few slides set out how we intend to keep building on that platform. Slide 26 sets out the strategic journey we've been on.

Speaker #1: Since 2019, we've progressively strengthened the core, restored the Ampol brand, expanded regionally through Z Energy, built capability in retail segmentation, productivity, and energy transition, and then added scale and earnings quality through the EG Australia acquisition.

Speaker #1: This is an accumulative strategy, where each step builds on the one before it. The result is a broader transport energy platform with a stronger, more resilient earnings base, more retail growth options, greater supply chain capability, and that means more optionality as customer energy needs evolve.

Matt Halliday: This is a cumulative strategy where each step builds on the one before it. The result is a broader transport energy platform with a stronger, more resilient earnings base, more retail growth options, greater supply chain capability, and that means more optionality as customer energy needs evolve. The future earnings profile will be increasingly supported by convenience retail, Ugo, commercial fuels and EG integration, supported by a more reliable refining earnings underpinned by FSSP. We have materially grown non-refining earnings over this period, including in this half, and that is the direction of travel, which provides context for both the H1 result and our priorities for the remainder of the year. Turning now to our 2026 priorities. The framework is consistent with a strategy we have spoken about now for some time. Enhance the core business, expand from our rejuvenated fuels platform, and evolve the energy offer for customers.

Speaker #1: The future earnings profile will be increasingly supported by convenience retail, UGO, commercial fuels, and EG integration, supported by more reliable refining earnings underpinned by FSSP.

Speaker #1: We have materially grown non-refining earnings over this period, including in this half, and that is the direction of travel, which provides context for both the first-half result and our priorities for the remainder of the year.

Speaker #1: So, turning now to our 2026 priorities. The framework is consistent with the strategy we've spoken about for some time: enhance the core business, expand from our rejuvenated fuels platform, and evolve the energy offer for customers.

Speaker #1: Under Enhance, the focus is on maximizing Lytton value. We expect to start up the low sulfur fuels project towards the end of the year, having completed the Lytton turnaround and inspection early in the fourth quarter.

Matt Halliday: Under enhance, the focus is on maximizing Lytton value. We expect to start up the Ultra Low Sulfur Fuels project towards the end of the year, having completed the Lytton turnaround and inspection early in Q4. We expect the regional scarcity of the revised gasoline specification to be supportive of a quality premium. We are also progressing the FSSP review with phase I complete, with a substantial increase in the level at which it kicks in, and phase II aiming to address the conditions required to secure the refinery operations for the longer term. Acknowledging that oil markets remain tight and volatile, we will continue to prioritize supply to Ampol’s key markets to provide supply security during market disruptions, while maintaining flexibility to use insights gathered to manage risk and capture value creation opportunities. Notwithstanding the strong financial performance, productivity remains a priority.

Speaker #1: And we expect the regional scarcity of the revised gasoline specification to be supportive of a quality premium. We are also progressing the FSSP review.

Speaker #1: With phase one complete, with a substantial increase in the level at which it kicks in, and phase two aiming to address the conditions required to secure the refinery operations for the longer term.

Speaker #1: Acknowledging that oil markets remain tight and volatile, we will continue to prioritize supply to Ampol's key markets to provide supply security during market disruptions, while maintaining flexibility to use insights gathered to manage risk and capture value creation opportunities.

Speaker #1: Notwithstanding the strong financial performance, productivity remains a priority. We are targeting a further $50 million of nominal cost reduction across '26 and '27, including annualized benefits from energy solutions simplification, productivity across the fuel supply chain and Lytton, and UGO in convenience retail.

Matt Halliday: We are targeting a further AUD 50 million of nominal cost reduction across 2026 and 2027, including annualized benefits from energy solution simplification, productivity across the fuel supply chain in Lytton, and Ugo in convenience retail. Under expand, the focus is on EG integration and continuing our segmentation strategy across the Australian network, including premium stores, hero product development, and the scaling of Ugo. In New Zealand, the priorities are to grow the convenience store business, leveraging the Z Rewards loyalty program, which will also provide learnings for us in Australia. Under evolve, we will continue to expand EV public charging in Australia and New Zealand with a focus on tier 1 locations with grid access. Two things are becoming clearer to us. Firstly, that connecting quality locations to the grid is only becoming more expensive.

Speaker #1: Under 'Expand', the focus is on EG integration and continuing our segmentation strategy across the Australian network, including premium stores, hero product development, and the scaling of UGO.

Speaker #1: In New Zealand, the priorities are to grow the convenience store business, leveraging the Zed Rewards loyalty program, which will also provide learnings for us in Australia.

Speaker #1: And under Evolve, we will continue to expand EV public charging in Australia and New Zealand, with a focus on tier-one locations with grid access.

Speaker #1: Two things are becoming clearer to us. Firstly, connecting quality locations to the grid is only becoming more expensive. Secondly, public charging is an increasingly important part of the charging solution, with attractive margins in the right locations.

Matt Halliday: Public charging is an increasingly important part of the charging solution, with attractive margins in the right locations. We will also continue to participate in shaping the policy settings needed to progress a renewable fuels industry in Australia. Moving now to EG Australia. Completion occurred on 30 June, and we elected to cash settle the scrip component of consideration. The final cash consideration was approximately AUD 1.165 billion. Cash acquired was approximately AUD 29 million. The combined company operated network is now around 1,080 sites, net of the 41 sites to be divested. The strategic rationale remains compelling. EG strengthens Ampol's investment case, gives us a pathway to scale Ugo and other convenience formats, and provides attractive EPS and free cash flow accretion after synergies.

Speaker #1: We'll also continue to participate in shaping the policy settings needed to progress a renewable fuels industry in Australia. Moving now to EG Australia. Completion occurred on 30 June, and we elected to cash settle the scrip component of consideration.

Speaker #1: So, the final cash consideration was approximately $1.165 billion. Cash acquired was approximately $29 million, and the combined company-operated network is now around 1,080 sites, net of the 41 sites to be divested.

Speaker #1: The strategic rationale remains compelling. EG strengthens Ampol's investment case, gives us a pathway to scale UGO and other convenience formats, and provides attractive EPS and free cash flow accretion after synergies.

Speaker #1: We continue to have high confidence in the $65 to $80 million per annum synergy opportunity, which is largely cost-related and expected to be delivered within two years post-completion.

Matt Halliday: We continue to have high confidence in the AUD 65 to AUD 80 million per annum synergy opportunity, which are largely cost related and expected to be delivered within two years post-completion. Importantly, this is a business we know well in a market we know well. It gives us scale to expand Ampol Foodary, accelerate Ugo, and improve the consistency and effectiveness of our customer offer right across the network. It is very much an extension of, and a logical bolt on to, the strategy we have been pursuing for several years. We also have confidence in execution because EG builds on capabilities Ampol has already demonstrated. Retail segmentation, Ugo rollout, Foodary development, cost discipline, and the successful integration of Z. I would now like to close today with a view of current trading conditions and the outlook.

Speaker #1: Importantly, this is a business we know well, in a market we know well. It gives us scale to expand Ampol Footery, accelerate UGO, and improve the consistency and effectiveness of our customer offer right across the network.

Speaker #1: It is very much an extension of, and a logical bolt-on to, the strategy we have been pursuing for several years. We also have confidence in execution, because EG builds on capabilities Ampol has already demonstrated.

Speaker #1: Retail segmentation, UGO rollout, Footery development, cost discipline, and the successful integration of Z Energy. I'd now like to close today with a view of current trading conditions and the outlook.

Speaker #1: The first half was clearly a very strong result. But we're focused on what it means for the business going forward—the earnings quality we're building, the cash generation that supports it, and the opportunities we have to continue growing shareholder value.

Matt Halliday: The H1 was clearly a very strong result, but we are focused on what it means for the business going forward, the earnings quality we are building, the cash generation it supports, and the opportunities we have to continue growing shareholder value. Turning now to slide 30. We have had a strong start to the H2. Lytton's realized refiner margin in July was $27.11 per barrel, with production of 524 million liters, so much stronger than the same time last year. Convenience retail and New Zealand fuel margins are experiencing a period of rising landed costs, which tend to lag through to retail board pricing. The store is performing well, with tobacco having stabilized and in fact growing following some stronger enforcement activity. Ex-tobacco sales are also experiencing encouraging growth.

Speaker #1: Turning now to slide 30. We've had a strong start to the second half. Litten's realized refiner margin in July was US 27 dollars and 11 cents per barrel, with production of 524 million liters.

Speaker #1: So much stronger than the same time last year. Convenience retail and New Zealand fuel margins are experiencing a period of rising landed costs, which tend to lag through to retail board pricing.

Speaker #1: The store is performing well, with tobacco having stabilized and, in fact, growing following some stronger enforcement activity. Ex-tobacco sales are also experiencing encouraging growth.

Speaker #1: EG Australia will contribute to convenience retail earnings in Australia, and both F&I Australia and international are up year-on-year. The FCC turnaround at Litten commenced in late July, with startup expected in October.

Matt Halliday: EG Australia will contribute to convenience retail earnings in Australia, and both F&I Australia and international are up year-on-year. The FCC turnaround at Lytton commenced in late July, with startup expected in October. Lytton will produce at approximately 70% of normal levels during this period. The Ultra Low Sulfur Fuels project is expected to be ready for startup towards the end of the year. Looking to the medium term, the H1 demonstrated the structural benefits of our integrated value chain in navigating geopolitical disruption. We have earnings catalysts at Lytton through Ultra Low Sulfur Fuels and the FSSP2 review, and in fuel and convenience through the delivery of EG synergies. Importantly, the overarching context is that oil product markets are expected to remain tight as global refinery runs continue to be impacted by the ongoing conflicts in both the Middle East and Russia.

Speaker #1: Litten will produce at approximately 70% of normal levels during this period. The low sulfur fuel project is expected to be ready for startup towards the end of the year.

Speaker #1: Looking to the medium term, the first half demonstrated the structural benefits of our integrated value chain in navigating geopolitical disruption. We have earnings catalysts at Lytton through low sulfur fuels, and the FSSP phase two review, and in fuel and convenience through the delivery of EG synergies.

Speaker #1: Importantly, the overarching context is that oil product markets are expected to remain tight, as global refinery runs continue to be impacted by the ongoing conflicts in both the Middle East and Russia.

Speaker #1: Russia has resorted to gasoline imports and a diesel export ban due to intensified and increasingly capable Ukrainian drone attacks. The Atlantic Basin is already maximizing runs and delaying autumn turnarounds, increasing the risk of unplanned outages.

Matt Halliday: Russia has resorted to gasoline imports and a diesel export ban due to intensified and increasingly capable Ukrainian drone attacks. The Atlantic Basin is already maximizing runs and delaying autumn turnarounds, increasing the risk of unplanned outages. East of India, ex-China, refinery runs are above June levels, but still about 500,000 barrels per day lower than 2025, with the release of trapped Hormuz barrels during June having allowed Asian refiners to temporarily replenish their inventories. All of this is compounding very low product inventory levels for middle distillates in particular, with limited new refining project capacity in the global pipeline, and in fact, with some rebuilding required. Recent events have highlighted concerns about fuel security for all countries dependent on imports of crude and refined products. Similar to Australia, we are seeing announcements to rebuild or extend strategic reserves.

Speaker #1: And east of India, wrecks China. Refinery runs are above June levels, but still about 500,000 barrels per day lower than 2025. The release of trapped Hormuz barrels during June allowed Asian refiners to temporarily replenish their inventories.

Speaker #1: And all of this is compounding very low product inventory levels, for middle distillates in particular, with limited new refining project capacity in the global pipeline, and, in fact, with some rebuilding required.

Speaker #1: Recent events have highlighted concerns about fuel security for all countries dependent on imports of crude and refined products. And, similar to Australia, we are seeing announcements to rebuild or extend strategic reserves.

Speaker #1: This will take some time, given the tightness of the available refinery capacity and the level of current inventories. All of this points to a tight refining supply market going forward, and the forward curve for product cracks certainly reflects this.

Matt Halliday: This will take some time given the tightness of the available refinery capacity and the level of current inventories. All of this points to a tight refining supply market going forward, and the forward curve for product cracks certainly reflects this, holding up much higher for much longer and shifting up between $10 to $20 between July and August for the 10 PPM diesel crack. This context is all very positive for Lytton and also a positive market dynamic for the trading and shipping capability that we have built over many years. Given these factors, we are confident about our future earnings potential, with a number of tailwinds likely to persist, albeit not at the same levels as in the H1. Now on slide 31, I would like to close out with why we believe Ampol remains a compelling investment proposition.

Speaker #1: Holding up much higher for much longer, and shifting up between US$10 to US$20 between July and August for the 10 PPM diesel crack.

Speaker #1: This context is all very positive for Litten, and also a positive market dynamic for the trading and shipping capability that we have built over many years.

Speaker #1: So, given these factors, we are confident about our future earnings potential, with a number of tailwinds likely to persist, albeit not at the same levels as in the first half.

Speaker #1: Now on slide 31, and I'd like to close out with why we believe Ampol remains a compelling investment proposition. We are not suggesting that the exceptional market conditions experienced in the first half represent a new normal.

Matt Halliday: We are not suggesting that the exceptional market conditions experienced in the H1 represent a new normal. However, those market conditions do now appear tighter for longer. What the H1 did demonstrate is that the value of the capabilities we have built over many, many years continues to deliver strong value for shareholders. Our integrated supply chain, trading platform, customer relationships, retail strategy, all contributed to that outcome. The first point is that Ampol has already built a structural base for earnings that is broader and more resilient. The earnings mix has shifted meaningfully over time, and with EG Australia now completed, the contribution from fuel and convenience will continue to grow. Second, while the half benefited from exceptional market conditions, the supply, trading, and infrastructure capability we have built supports customers, protects supply, generates cash, and creates value through the cycle.

Speaker #1: However, those market conditions do now appear tighter for longer. What the first half did demonstrate is that the value of the capabilities we have built over many, many years continues to deliver strong value for shareholders.

Speaker #1: Our integrated supply chain, trading platform, customer relationships, and retail strategy all contributed to that outcome. The first point is that Ampol has already built a structural base for earnings that is broader and more resilient.

Speaker #1: The earnings mix has shifted meaningfully over time, and with EG Australia now completed, the contribution from fuel and convenience will continue to grow. Second, while the half benefited from exceptional market conditions, the supply, trading, and infrastructure capability we have built supports customers, protects supply, generates cash, and creates value through the cycle.

Speaker #1: And thirdly, we have clear growth opportunities through convenience retail, UGO, and EG, and in areas where Ampol has already demonstrated strong execution capability. We expect to see a recovery in trading conditions in New Zealand, and opportunities to arise in EV charging, as EV uptake steps up, and in renewable fuels over time.

Matt Halliday: And thirdly, we have clear growth opportunities through convenience retail, Ugo and EG, and in areas where Ampol has already demonstrated strong execution capability. We expect to see a recovery in trading conditions in New Zealand and opportunities to arise in EV charging as EV uptake steps up and in renewable fuels over time. In addition, there are further potential catalysts from supportive policy shifts for fuel resilience and the energy transition. I think it is fair to say the national strategic importance of our infrastructure, including the Lytton Refinery and our trading and supply capability, has in fact never been clearer. And finally, we remain disciplined in capital allocation. We have a strong balance sheet, a track record of returning capital to shareholders, while also investing in the core business and value accretive growth.

Speaker #1: In addition, there are further potential catalysts from supportive policy shifts for fuel resilience and the energy transition. I think it's fair to say the national strategic importance of our refinery, and our trading and supply capability, has in fact never been clearer.

Speaker #1: And finally, we remain disciplined in capital allocation. We have a strong balance sheet and a track record of returning capital to shareholders, while also investing in the core business and value-accretive growth.

Speaker #1: A strong earnings backdrop, as the business moves beyond its current elevated capex by the end of this year, positions Ampol very strongly for cash distributions to our shareholders.

Matt Halliday: A strong earnings backdrop as the business moves beyond its current elevated CapEx by the end of this year, positions Ampol very strongly for cash distributions to our shareholders. In closing, we feel good about the position Ampol is in. The H1 demonstrated the strength of the platform we have built, which can support customers, generate cash, and create additional value when markets are tight and disrupted. As conditions normalize over time, we believe investors should focus less on whether individual cyclical earnings streams repeat, and more on the fact that Ampol exits the half with a stronger earnings base, stronger cash generation, and more avenues for growth than at any point in the last decade.

Speaker #1: So, in closing, we feel good about the position Ampol's in. The first half demonstrated the strength of the platform we have built, which can support customers, generate cash, and create additional value when markets are tight and disrupted.

Speaker #1: As conditions normalize over time, we believe investors should focus less on whether individual cyclical earning streams repeat, and more on the fact that Ampol exits the half with a stronger earnings base.

Speaker #1: Stronger cash generation and more avenues for growth than at any point in the last decade. As you assess Ampol, we'd encourage you to focus on that stronger platform, greater retail scale, proven supply and trading capability, and strong cash generation, with multiple pathways to growth and value creation.

Matt Halliday: As you assess Ampol, we would encourage you to focus on that stronger platform, greater retail scale, proven supply and trading capability, and strong cash generation with multiple pathways to growth and value creation. Thank you. That concludes the presentation. Greg and I will now take your questions, and we also have members of the executive team on the line to support. With that, we will take the first question, please.

Speaker #1: Thank you. That concludes the presentation. Greg and I will now take your questions, and we also have members of the executive team on the line to support.

Speaker #1: So, with that, we'll take the first question, please.

Speaker #2: 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.

Operator 2: 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. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Michael Simotas with Jefferies. Please go ahead.

Operator: 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. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Michael Simotas with Jefferies. Please go ahead.

Speaker #2: If you're on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Michael Samotis with Jefferies. Please go ahead.

Speaker #3: Hi, good morning everyone, and well done on executing so well and making the most of the buoyant conditions. The first question from me is related to the outlook that you present on slide 30.

Michael Simotas: Good morning, everyone, and well done on executing so well and making the most of the buoyant conditions. The first question from me is related to the outlook that you present on slide 30. The positive or continuation of positive conditions in refining, I guess, is fairly obvious, and the charts you've got on that slide are intuitive. Does it make sense to hedge any of your exposure to refining, given where the forward curves are? Just interested to understand qualitatively what this dynamic means for the trading and shipping business as well as F&I Australia, given they've clearly benefited from this dynamic in the H1 as well.

Speaker #3: So the positive, or continuation of positive, conditions in refining, I guess, is fairly obvious, and the charts you've got on that slide are intuitive.

Speaker #3: Does it make sense to hedge any of your exposure to refining, given where the forward curves are? And just interested to understand qualitatively what this dynamic means for the trading and shipping business, as well as F&I Australia, given they've clearly benefited from this dynamic in the first half as well.

Speaker #1: Yeah, thanks. Thanks, Michael. Look, we certainly contemplate and review refiner margin hedging from time to time. We typically don't do a lot of it.

Matt Halliday: Yeah, thanks, Michael. We certainly contemplate and review refiner margin hedging from time to time. We typically don't do a lot of it. We do do some, and it's something we'll continue to review. I think part of the message we're trying to convey, in delivering this result is, it's obviously strong. The trading and shipping capability that Ampol has into this market is quite unique. It's been built over many years. Not only does it capitalize on tight market conditions, but refining benefits from those tight market conditions, so too can trading and shipping. I think it's that capability that was on show in delivering supply security through periods of market disruption. As markets remain tight going forward, I think that capability equally comes to the fore.

Speaker #1: We do do some, and it's something we'll continue to review. I think part of the message we're trying to convey in delivering this result is it's obviously strong.

Speaker #1: The trading and shipping capability that Ampol has in this market is quite unique. It's been built over many years, and not only does it capitalize on tight market conditions, but refining benefits from those tight market conditions—so too can trading and shipping.

Speaker #1: And I think it's that capability that was on show in delivering supply security through periods of market disruption. But as markets remain tight going forward, I think that capability equally comes to the fore.

Speaker #3: Okay, thank you. And then the second one from me is just relating to the turnaround in refining and how we should think about it.

Michael Simotas: Okay. Thank you. The second one from me is just relating to the turnaround in refining. How we should think about it. Normally, turnaround periods are pretty horrible for earnings, but given the dynamic, you're still going to be making very good profits during this turnaround period. Should we just think about, most of the volume impact being in gasoline, where crack spreads are weaker, having normal OPEX and pretty close to normal levels of middle distillate production through that period?

Speaker #3: I mean, normally turnaround periods aren't pretty horrible for earnings, but given the dynamic you're still going to be making very good profits during this turnaround period.

Speaker #3: Should we just think about most of the volume impact being in gasoline, where crack spreads are weaker, having normal sort of opex, and pretty close to normal levels of middle distillate production through that period?

Speaker #1: Yeah, I think the impact is mainly in gasoline, not entirely. But as I mentioned in the comments, we'll be producing at about 70% of normal levels of capacity, and obviously margins remain very strong, including particularly for middle distillates which are less impacted.

Matt Halliday: Yeah, I think the impact is mainly in gasoline. Not entirely. As I mentioned in the comments, we'll be producing at about 70% of normal levels of capacity, and obviously, margins remain very strong, particularly for middle distillates, which are less impacted. So it's about the right way to think about it.

Speaker #1: So, it's about the right way to think about it.

Speaker #2: Your next question comes from Ewan Manoe with Baron Joey. Please go ahead.

Operator 2: Your next question comes from Ewan Minogue with Barrenjoey. Please go ahead.

Operator: Your next question comes from Ewan Minogue with Barrenjoey. Please go ahead.

Speaker #3: Yeah, good morning, Matt, Greg, and the broader team, and congratulations on the record result. I just want to focus on Yugo. Given how strong the economics and early performance appear to be, can you just remind us how you actually evaluate sites for conversions?

Ewan Minogue: Yeah, good morning, Matt, Greg, and the broader team, and congratulations on the record result. I just want to focus on Ugo. Given how strong economics and early performance appears to be, can you just remind us, how do you actually evaluate sites for conversions, and what do you think the total size of the opportunity set could be on a longer-term basis?

Speaker #3: And what do you think the total size of the opportunity set could be on a longer-term basis?

Speaker #4: Yeah, thanks, Ewan. It's Greg here. So, look, we are really pleased with the way you guys are performing, that's the first thing I'd note. I think we've spoken earlier about the potential of this and the one-year kind of payback on the economics that's around that.

Greg Barnes: Yeah, thanks, Ewan. It's Greg here. Look, we are really pleased with the way Ugo is performing, is the first thing I'd note. I think we've spoken earlier about the potential of this and the one-year payback of the economics that surround that. We're certainly seeing economics that are that or more favorable. It got a bit of a tailwind, as you can imagine, when fuel prices were higher. Consumers were very price sensitive. So a well-positioned and fully stocked Ugo performed well when other supply chains were struggling. We had slated 60 under our own network. We see EG producing at least 125 additional sites to that. So that's a network of 185. That'll take about two years to deliver, and that was our commitment over that two-year timeframe.

Speaker #4: We're certainly seeing economics that are that or more favorable. It got a bit of a tailwind, as you can imagine, when fuel prices were higher. Consumers were very price-sensitive.

Speaker #4: So, a well-positioned and fully stocked Yugo performed well when other supply chains were struggling. We had slated 60 under our own network. We see EG producing at least 125 additional sites to that.

Speaker #4: So that's a network of 185. That'll take about two years to deliver, and that was our commitment over that two-year timeframe. I have to say, when we look at, you know, we're probably more looking at EG, I should say, now that we've had ownership of it for six or seven weeks.

Greg Barnes: I have to say, when we look at Ugo, we're probably more. Look at EG, I should say, now that we've had ownership of it for six or seven weeks. We're probably thinking that Ugo number will creep up over time. But of course, our commit was around a two-year time horizon. So to answer your question directly, it was 185. Ugo's is where we expect it to be post the integration of EG in two years' time.

Speaker #4: We're probably thinking that your GO number will creep up over time, but of course, our commit was around a two-year time horizon. So, to answer your question directly, it was 185.

Speaker #4: You guys, is this where we expected to be post the integration of EG, two years in—two years' time?

Speaker #1: I might just see if Kate—anything you want to build on that?

Matt Halliday: I might just see if Kate. Kate, anything you want to build on that from a Ugo point of view?

Speaker #5: From a yield curve point of view?

Kate Thomson: We are really happy with the progress of Ugo. Selection comes down to a site-by-site decision where we are confident that we have got the opportunity to remove operational costs and provide a value offer to customers.

Speaker #2: We're really happy with the progress of U-Go. Selection comes down to a site-by-site decision where we're confident that we've got the opportunity to remove operational costs and provide a value offer to customers.

Speaker #4: Yeah, Ewan, so think of it as labor out, net of store margin foregone, tends to be a positive, and then we would then expect fuel growth from a more aggressive pricing position.

Greg Barnes: Yeah. Ewan, so think of it as labor out, net of store margin foregone tends to be a positive, and then we would then expect fuel growth from a more aggressive pricing position.

Speaker #3: That's clear. Thanks, guys. And then secondly, a lot of media articles recently as enforcement activity on illicit tobacco has stepped up across service station networks.

Ewan Minogue: That is clear. Thanks, guys. Secondly, a lot of media articles recently, as enforcement activity on illicit tobacco has stepped up across service station networks. Are you seeing any benefits from this? Do you have a view on whether tobacco can actually be sustainably removed from the independent networks?

Speaker #3: Are you seeing any benefits from this? And do you have a view on whether tobacco can actually be sustainably removed from the independent networks?

Speaker #1: Yeah, we've certainly seen, and as we mentioned in our comments, tobacco not only stabilized but moved back into growth on the back of some stronger enforcement action.

Matt Halliday: Yeah, we have certainly seen, and as we mentioned in our comments, tobacco not only stabilize, but move it back into growth on the back of some stronger enforcement action. I think also some disruption, frankly, from the Middle East in terms of supply chains. But in certain states in particular, we have seen the enforcement be quite effective. So that is certainly playing through the numbers, in the H1 and certainly more recently over the recent probably, two or three months, we have seen quite a marked adjustment.

Speaker #1: And I think also some disruption, frankly, from the Middle East in terms of supply chains. But in certain states in particular, we've seen the enforcement be quite effective.

Speaker #1: And so that is certainly playing through the numbers in the first half. And certainly, more recently, over the last probably two or three months, we've seen quite a marked adjustment.

Speaker #2: Your next question comes from Tom Allen with UBS. Please go ahead.

Operator 2: Your next question comes from Tom Allen with UBS. Please go ahead.

Operator: Your next question comes from Tom Allen with UBS. Please go ahead.

Speaker #3: Good morning, Matt, Greg, and the board of team. Congratulations also on a record earnings over the half. Just as the market interprets the potential upside for Ampol from a sustained pricing and global oil and product prices and particularly how it might support Ampol's balance sheet.

Tom Allen: Good morning, Matt, Greg, and the board team. Congratulations also on record earnings over the half. As the market interprets the potential upside for Ampol from the sustained pricing in global oil and product prices, and particularly how it might support Ampol's balance sheet and just provide for stronger outcomes under your capital framework. I was wondering if you could just guide a range on where you expect Ampol's leverage might finish the year, perhaps with a sensitivity for us if current product prices do hold at elevated levels through October.

Speaker #3: And just provide for stronger outcomes under your capital framework. For any figure, just guide a range and where you expect Ampol's leverage might finish the year, perhaps with a sensitivity for us if current product prices do hold at elevated levels through October.

Speaker #4: Yeah, that's walking into a challenge for me there, Tom. What I would say as a steer is, well, a couple of things to note.

Greg Barnes: Well, that is walking into a challenge for me there, Tom. What I would say, as a steer is, well, a couple of things to note. We are sitting on a reasonable amount of inventory, both price and volume at the half. Depending on what happens over the next six months with fuel availability, you would expect that to unwind over time. So I am not talking specifically with year-end in mind. You would expect generally, positive cash generation in the H2 that should further improve our leverage ratio below the 1.8 turns, notwithstanding the dividend. So that would be the first steer I would give you.

Speaker #4: We were sitting on a reasonable amount of inventory, both in price and volume, at the half. Depending on what happens over the next six months with fuel availability, you would expect that to unwind over time.

Speaker #4: So I'm not talking specifically with year-end in mind. And you would expect generally positive cash generation in the second half that should further improve our leverage ratio below the 1.8 turns, notwithstanding the dividend.

Speaker #4: So, that would be the first steer I'd give you. I think when you then cast forward to 2027, what we've always had in mind and what guides us is, on a mid-cycle basis, we would expect leverage to be back within our targeted range of 2 to 2.5, and we'd be aiming to land somewhere in the middle.

Greg Barnes: I think when you then cast forward to 2027, what we've always had in mind and guides us is in a mid-cycle basis, we would expect leverage to be back within our targeted range of 2x to 2.5x, and we'd be aiming to land somewhere in the middle. That's a mid-cycle range that implies average refining margins and with the charts you've seen on slide 30, I think it is. Or yeah, slide 30 that Matt Halliday talked to. The market is signaling that it's likely to be quite a bit stronger than that. From a sensitivity perspective, every USD 1 of refining margin uplift per annum on average is AUD 60 million. And we don't have any major maintenance planned for 2027, so all that drops to the bottom line.

Speaker #4: Now, that's a mid-cycle range that implies average refining margins, and with the charts you've seen on slide 30—I think it is, or yeah, slide 30 that Matt talked to.

Speaker #4: Yeah, the market is signaling that it's likely to be quite a bit stronger than that. From a sensitivity perspective, every one US dollar of refining margin uplift per annum, on average, is $60 million.

Speaker #4: And we don't have any major maintenance planned for 2027, so all that drops to the bottom line. And of course, we're coming to the end of our low sulfur fuels project.

Greg Barnes: And of course, we're coming to the end of our Ultra Low Sulfur Fuels project, so you should see CapEx start to step back down towards that sort of AUD 450 million sustainable level. So it does all set up for a very strong cash generation over the next 18 months. And as I said in my comments, when we find ourselves in that position, our track record is pretty clear.

Speaker #4: So you should see capex start to step back down towards that sort of $450 million sustainable level. So it does all set up for a very strong cash generation over the next 18 months.

Speaker #4: And as I said in my comments, when we find ourselves in that position, our track record is pretty clear.

Speaker #3: Thanks, Greg. I appreciate that; that's clear. Perhaps, just as we interpret whether or not there's a basis there for conservatism on the balance sheet, we should consider if there is the potential for higher capex in the medium term.

Tom Allen: Thanks, Greg. Appreciate that. That's clear. Perhaps just as we interpret whether or not there's a basis there for conservatism on the balance sheet, just if there is the potential for high CapEx in the medium term. I thought, was interested in your comment in the presentation that you thought the market might have missed the outcome of the new phase 1 support level under the FSSP, and that turns on when refining margins average USD 15.90 a barrel in Australian dollar terms. I can see consensus estimates are not far above that level at the moment in 2028 and beyond.

Speaker #3: I thought it was interesting in your comment during the presentation that you thought the market might have missed the outcome of the new Phase One support level under the FSSP.

Speaker #3: And that turns on when refining margins average $15.90 a barrel in Australian dollar terms. I can see consensus estimates are not far above that level at the moment in 2008 and beyond.

Speaker #3: So, I don't think you could comment, perhaps, on the timeframe, any key milestones, or potential outcomes for the industry and Ampol that might come from the fuel security and resilience package that the Commonwealth Government is currently consulting on.

Tom Allen: Just wondering if you could comment perhaps on the timeframe, any key milestones, potential outcomes for the industry and Ampol that might come from the Fuel Security and Resilience Package that the Commonwealth government is currently consulting on, how Ampol might participate in additional fuel storage going forth, potential funding mechanisms for that. And even if there were potential for more investment in an expansion at Lytton, and what it might look like.

Speaker #3: How Ampol might participate in additional fuel storage going forward, potential funding mechanisms for that, and even if there were potential for more investment in an expansion at Lytton and what it might look like.

Speaker #4: Yeah, so maybe I'll make a couple of comments to kick us off. So, there's a couple of points in there. The revision to the existing FSSP, I think, was a little bit overlooked, and I think it's just because within a couple of weeks, the whole events in Iran started to unfold.

Greg Barnes: Yeah. So maybe I will make a couple of comments to kick us off. There is a couple of points in there. The revision to the existing FSSP, I think, was a little bit overlooked. I think it is just because within a couple of weeks, the whole events in Iran started to unfold. That is something in the order of a 3.6 cent a liter step up in where the entry point is into that mechanism. It also included a revision to the calculation of the marker itself that improved in a further 0.6%. So it is a 0.6 of 1 cent. So it is a 4.2 cent uplift in what the minimum is, which I think is, as the graph shows in the presentation, a really healthy increase in the level of support.

Speaker #4: But that is something in the order of a 3.6-centiliter step up in where the entry point is into that mechanism. It also included a revision to the calculation of the marker itself that improved it a further 0.6%.

Speaker #4: So it's 0.6 of one cent. So it's a 4.2 cent uplift in what the minimum is, which I think, as the graph shows in the presentation, is a really healthy increase in the level of support.

Speaker #4: Now, when we roll into FSSP2, I won't get into the specifics of that engagement, and the government has put some consultation papers out there on fuel security more broadly.

Greg Barnes: Now, when we now roll into FSSP2, I will not get into the specifics of that engagement, and the government has put some consultation papers out there on fuel security more broadly. You can imagine the things on our mind are the tenor of that arrangement. The arrangement at the moment is to 2030. I think by any analysis you would say demand for middle distillates in particular is going to go well out into the 2040s at strength. So you are interested in the tenor of that agreement. You are interested in what you can achieve in the events that you have a reliability event, some sort of issue at the refinery. Obviously, our peers have had a difficult time at their refinery recently.

Speaker #4: But you can imagine the things on our mind are the tenor of that arrangement. The arrangement at the moment is to 2030. I think by any analysis, you would say demand for middle distance in particular is going to go well out into the 2040s at strength.

Speaker #4: So you're interested in the tenor of that agreement. You're interested in what you can achieve from it in the event that you have a reliability event, some sort of issue at the refinery, and obviously our peers have had a difficult time at their refinery recently.

Speaker #4: You want to make sure there's a level of protection on that basis. And ultimately, make refining as investable as possible in the knowledge that its strategic importance to the country has risen.

Greg Barnes: You want to make sure there is a level of protection on that basis, and ultimately, make refining as investable as possible in the knowledge that its strategic importance to the country has risen. Naturally, the nature of equity markets, and the value for predictable ratable earnings increases as well, and that we want to bridge that gap as best we can. So that is the focus. The government are well aware of our views on these things. We are having very constructive dialogue. I dare say, our competitors are likely, or the other refinery in Australia, I should say, is likely very aligned around similar sort of drivers.

Speaker #4: But naturally, the nature of equity markets and the value for predictable, rateable earnings increases as well. And we want to bridge that gap as best we can.

Speaker #4: So that's the focus. And the government are well aware of our views on these things. We're having very constructive dialogue. And I dare say our competitors—or the other refinery in Australia, I should say—are likely very aligned around similar sort of drivers.

Speaker #2: And just on the storage point, Tom, the government released its consultation paper for storage last week. So I think there's an absolute commitment to build out more MSO and establish a national fuel reserve.

Matt Halliday: Just on the storage point, Tom. The government has released its consultation paper for storage last week. I think there is an absolute commitment to build out more MSO and establish a national fuel reserve. I think, probably obvious, but those large storage locations where you can get product in efficiently, where you can get it to market, where you can sort of cycle it, commingle it, and then get it to market efficiently, is going to be the way to get that in place most efficiently, most quickly. So I think Ampol's infrastructure is really well-positioned from that point of view, and we will continue to engage with the government through that consultation process.

Speaker #2: I think probably obvious, but those large storage locations, where you can get product in efficiently, where you can get it to market, where you can sort of cycle it, co-mingle it, and then get it to market efficiently is going to be the way to get that in place most efficiently, most quickly.

Speaker #2: So, I think Ampol's infrastructure is really well positioned from that point of view, and we'll continue to engage with the government through that consultation process.

Speaker #1: Your next question comes from Craig Woolford with MST Marquee. Please go ahead.

Operator 2: Your next question comes from Craig Woolford with MST Marquee. Please go ahead.

Operator: Your next question comes from Craig Woolford with MST Marquee. Please go ahead.

Speaker #3: Good morning, Matt and Greg. I just wanted to get a feel for the way you are positioned—the F&I benefits from the situation. How do you see that going forward, not just for this six-month period, but do you see the business as being positioned for volatility in both directions?

Craig Woolford: Good morning, Matt and Greg. Just wanted to get a feel. I like the way you positioned the F&I benefits from the situation. How do you see that going forward, not just for this six-month period, but do you see the business as being positioned for volatility in both directions? How should we judge the earnings base for that F&I international in a lower volatile oil price environment?

Speaker #3: How should we judge the earnings base for F&I International in a lower volatility or pricing environment?

Speaker #2: Yeah, so I think—I mean, Greg covered it in his presentation—that we've built a capability that I think is a significant strategic capability, and that has a demonstrable track record now of managing risk and downside exposure, and being able to position to capitalize on market opportunities when markets are disrupted.

Matt Halliday: Yeah. I think Greg covered it in his presentation that we've built a capability that I think is a significant strategic capability that has a demonstrable track record now of managing risk and downside exposure and being able to position to capitalize on market opportunities when markets are disrupted and are tight. The second point, though, is equally important, which is when we look at markets and inventory levels and the context in refined product markets at the moment, it looks pretty tight and the curve is pricing that. We've got the capability and we continue to build on it. It's been built over a long period of time, and we've got pretty tight markets now, given this has played out for a while, drawn down stocks, and has every prospect of continuing to drag out. That's how I'd frame it. We've got Brent here.

Speaker #2: And are tight. The second point, though, is equally important, which is that when we look at markets and inventory levels and the context in refined product markets at the moment, it looks pretty tight.

Speaker #2: And the curve is pricing that. So we've got the capability, and we continue to build on it. It's been built over a long period of time.

Speaker #2: And we've got pretty tight markets now, given this has played out for a while, drawn down stocks, and has every prospect of continuing to drag out.

Speaker #2: So that's how I'd frame it. But we've got Brent here, so Brent, I might just ask you for any observations on that question.

Matt Halliday: Brent, I might just ask you for any observations on that question.

Speaker #3: Yeah, I'll add just a little bit. Obviously, the role in managing inside the market means you need to be able to operate whether it's a strong market or a weak market.

Brent Merrick: Yeah, I will add just a little bit. Obviously, the role in managing inside the market means you need to be able to operate in whether it is a strong market or weak market. I think if you look globally at how profits are driven, you normally see outsized profits when there is a sudden shock, then step up in markets. However, our ability as a business is one to manage all markets. As the presentation today says, focusing on efficient delivery and management to supply our customers is our goal. Across all cycles, we should be able to perform. Different markets do present larger opportunities. Each circumstance is different.

Speaker #3: I think if you look globally at how profits are driven, you normally see outsized profits when there is a sudden shock and step-up in markets.

Speaker #3: However, our ability as a business is one to manage all markets. And as the presentation today says, focusing on efficient delivery and management to supply our customers is our goal.

Speaker #3: But across all cycles, we should be able to perform, but different markets do present larger opportunities. Each circumstance is different, I guess.

Speaker #3: Thank you. Second one, just on the convenience statement: it's a year that tobacco markets might be stabilizing. We have often been into the detail of the gross margin ex-tobacco.

Craig Woolford: Thank you. Second one, just on the convenience segment, it is good to hear that tobacco markets might be stabilizing. We often get into the detail of the gross margin ex tobacco, and I have calculated it might have been down slightly. Maybe just a broader question on that. Is the convenience gross margin percentage, the shop gross margin percentage likely to be stable from here, or do you see upside? Maybe it is associated with Ugo or any other mix effects.

Speaker #3: And I have calculated it might have been down slightly. Maybe just a broader question on that: is the convenience gross margin percentage, the shop gross margin percentage, likely to be stable from here?

Speaker #3: Or do you see upside? Maybe it's associated with Q2, or any other mix effects?

Speaker #2: Thanks, Craig. Okay.

Matt Halliday: Thanks, Craig.

Speaker #1: Yeah, margin is broadly flat. We've seen some benefits from mix improvement. We've seen some slight detraction with wastage, which is just reflective of the bakery range that we have invested in in some stores.

Kate Thomson: Yeah. Margin is broadly flat. We have seen some benefits from mix improvement. We have seen some slight detraction with wastage, which is just reflective of the bakery range that we have invested in some stores. I think over time, we will see our performance in margin continue. We have seen the full benefit of Metcash flow through, but obviously over time, there will be benefits that we can realize in EG as well.

Speaker #1: I think, over time, we'll see our performance in margin continue. We have seen the full benefit of MET cash flow through, but obviously, over time there'll be benefits that we can realize in EG as well.

Speaker #2: Yeah, and the other thing I'd build on that, Craig, is sort of and in the outlook, look, in terms of how we've started the second half and the performance in the shop, not just from a margin, not from a margin point of view, but really in terms of mix and sales x tobacco, put the tobacco trend to one side, we've actually seen some really encouraging trends in the store in terms of those higher margin categories, which is consistent with the execution and the strategy the teams had in place and continues to progress very well.

Matt Halliday: The only other thing I'd build on that, Craig, is in the outlook, in terms of how we've started the H2 and the performance in the shop, not just from a margin point of view, but really in terms of mix and sales ex tobacco, put the tobacco trend to one side. We've actually seen some really encouraging trends in the store in terms of those higher margin categories, which is consistent with the execution and the strategy the team's had in place and continues to progress very well.

Speaker #1: Your next question comes from Mark Wiseman with McQuarrie Group. Please go ahead.

Operator 2: Your next question comes from Mark Wiseman with Macquarie Group. Please go ahead.

Operator: Your next question comes from Mark Wiseman with Macquarie Group. Please go ahead.

Speaker #4: Okay, Matt and Greg, congratulations on the result today and making the most of the market. I just wanted to ask a couple of questions.

Mark Wiseman: Good day, Matt and Greg. Congratulations on the result today, and making the most of the market. I just wanted to ask a couple of questions. Firstly, on the EV charging network, could you just perhaps unpack that point of break even? Are you thinking about shop sales that those customers are engaging in while their vehicle's charging as part of that? Or when you talk about break even, are you simply talking EBITDA on the charging itself? And could you just clarify the F&I energy solutions EBITDA, so the -12.7, is that the line item that you're referring to? Is that what we're expecting to move into positive territory? Thanks.

Speaker #4: Firstly, on the EV charging network, could you perhaps just unpack that point of break-even? Are you thinking about shop sales that those customers are engaging in while their vehicles are charging as part of that?

Speaker #4: Or when you talk about break-even, are you simply talking about EBITDA on the charging itself? And could you just clarify the F&I Energy Solutions EBITDA—so the negative $12.7 million, is that the line item that you're referring to?

Speaker #4: Is that what we're expecting, to move into positive territory? Thanks.

Speaker #3: Yeah, thanks, Mark. It's Greg. So, there's a couple of bits to that, but we definitely see upside on Ampol sites from charging over time.

Greg Barnes: Yeah. Thanks, Mark. It's Greg. There's a couple of bits to that. We definitely see upside on Ampol sites from charging over time. That dwell time drives more custom in store. But when we're talking about break even exiting 2028, we're really looking at that from an energy sold perspective, so just charging. Remembering, of course, our network and the potential here for EV charging extends well beyond our own convenience retail network. And we have relationships with a number of the big retail property businesses and the like. So, that's the guts of the question. And yes, that is the line we're talking about. That is our Australian EV charging business. It includes some wholesale energy management. We have PPA arrangements and things like that where we source power for the group through there as well. There's some modest benefit from that.

Speaker #3: That dwell time drives more custom in-store. But when we're talking about break-even, exiting 2028, we're really looking at that from an energy sold perspective.

Speaker #3: So, just on charging—remembering, of course, our network and the potential here for EV charging extends well beyond our own convenience retail network. And we have relationships with a number of the big retail property businesses and the like.

Speaker #3: So that's the gist of the question. And yes, that is the line we're talking about. We do—that is our Australian EV charging business.

Speaker #3: It includes some wholesale energy management. We have PPA arrangements and things like that, where we source power for the group through there as well.

Speaker #3: There's some modest benefit from that. But essentially, what we're referring to is that this is the result that you are looking at, which is an EBIT loss of around $15 million for the half.

Greg Barnes: But essentially what we are referring to is the result that you are looking at, which is an EBIT loss of around AUD 15 million for the H1.

Speaker #4: Okay, great. And just a bigger-picture question on capital allocation. As a team, you've really proven yourselves as among the strongest capital allocators in the sector.

Mark Wiseman: Okay. Great. Just a bigger picture question on capital allocation. As a team, you have really proven yourselves as among the strongest capital allocators in the sector. I wonder if we could just unpack the next phase of growth for the company. It sounds like having done Z, having done the rebrand, having done EG Group, and the compliance CapEx on fuel, it sounds like there is actually not that much out there in terms of calls on capital. Is there a world, do you think, post FSSP phase II, where your leverage metrics and payout metrics need to adjust? Do you think we are heading into a period where you can run a little bit more debt and a higher payout?

Speaker #4: I wonder if we could just unpack the next phase of growth for the company. It sounds like, having done Z, having done the rebrand, having done EG Group, and the compliance capex on fuel, there's really—

Speaker #4: It sounds like there's actually not that much out there in terms of calls on capital. Is there a world, you think, post-FSSP Phase Two where you'll leverage metrics, and payout metrics need to adjust?

Speaker #4: Do you think we're heading into a period where you can run a little bit more debt and have a higher payout?

Speaker #3: Yeah, thanks, Mark. It's Greg again. Look, I'm probably not of a mind yet to consider changing our targeted leverage range. I think it has served us pretty well.

Greg Barnes: Yeah. Thanks, Mark. It is Greg again. Look, I am probably not of a mind yet to consider changing our targeted leverage range. I think it has served us pretty well. We are, as we have seen in the last couple of years, entering slightly more volatile periods. I think that creates really significant opportunities for us, and this result exemplifies that. What I would say is, if we can secure the FSSP2 in a way that removes some of the downside risk associated with that asset, that may be a catalyst. It was last time with the introduction of the first FSSP. I think our range with Moody's stepped up about 0.2 of a turn, from memory, because we increased the stability of that asset. So that could be a catalyst. I think your underlying or overarching point is the right one.

Speaker #3: And we are, as we've seen in the last couple of years, entering slightly more volatile periods. I think that creates really significant opportunities for us, and this result exemplifies that.

Speaker #3: But what I would say is, if we can secure the FSSP2 in a way that removes some of the downside risk associated with that asset, that may be a catalyst.

Speaker #3: It was last time with the introduction of the first FSSP. I think we are out of range, with Moody's stepped up about 0.2 of a turn from memory, because we increased the stability of that asset.

Speaker #3: So that could be a catalyst. But I think your underlying or overarching point's the right one. We're coming through in the middle of a significant acquisition and integration now.

Greg Barnes: We are coming through in the middle of a significant acquisition and integration now. I think we have signaled we are positively disposed to electric vehicle charging over time. We will see what comes out of the policy and consultation on storage. That could certainly lend itself to incremental investment. Having said all that, this business, in an environment where refining margins are higher and your trading business is well-positioned to capitalize on some of these dislocated markets and product flows, we should be a very cash-generative business. I think our track record is there to say that if we are tipping back below the range, and that looks sustainable, and we are not sitting on an attractive investment opportunity, then that tends to find its way back to shareholders pretty quickly.

Speaker #3: I think we've signaled we're positively disposed to electric vehicle charging over time. We'll see what comes out of the policy and consultation on storage.

Speaker #3: That could certainly lend itself to incremental investment. But having said all that, this business, in an environment where we're finding margins are higher and your trading businesses are well positioned to capitalize on some of these dislocated markets and product flows, should be a very cash-generative business.

Speaker #3: And I think our track record is there to say that, if we're tipping back below the range, and that looks sustainable, and we're not sitting on an attractive investment opportunity, then that tends to find its way back to shareholders pretty quickly.

Speaker #1: Your next question comes from Robco with MS. Please go ahead.

Operator 2: Your next question comes from Rob Koh with Morgan Stanley. Please go ahead.

Operator: Your next question comes from Rob Koh with Morgan Stanley. Please go ahead.

Speaker #5: Good morning. Yes, congratulations on the result. Can I ask a question about the proposed divestment of 41 or so sites to Metro? Is there any update on the status of that buyer?

Rob Koh: Good morning. Yes, congratulations on the result. Can I ask a question about the proposed divestment of 41 or so sites to Metro Petroleum? Is there any update on the status of that buyer, and is there an alternative that could be lined up?

Speaker #5: And is there an alternative that could be lined up?

Speaker #3: Yeah, thanks, Rob. It's Greg again. Look, we are in the early phases of that process. We've obviously got a buyer who has been approved by the competition commission.

Greg Barnes: Yeah. Thanks, Rob. It is Greg Barnes again. Look, we are in the early phases of that process. We have obviously got a buyer who has been approved by the Australian Competition and Consumer Commission. We have a deeper pool than that, naturally, at the time. We have some conditions precedent to work through, and our expectation is that that divestment process will conclude towards the end of this year. For some reason, there were an issue than we would adapt, but I am not expecting one.

Speaker #3: There, we had a deeper pool than that, naturally, at the time. We have some conditions precedent to work through, and our expectation is that that divestment process will conclude towards the end of this—end of this year.

Speaker #3: If, for some reason, there were an issue, then we would adapt, but I'm not expecting one.

Speaker #5: Okay, good to hear. Thank you. And then may I ask, within the F&I Australia result, obviously there's a benefit from termed supply in there.

Rob Koh: Okay. Good to hear. Thank you. May I ask, within the F&I Australia result, obviously there is a benefit from termed supply in there. Are you able to give us any kind of extra color on quantum of that and help us adjust for current period?

Speaker #5: Are you able to give us any kind of extra color on the quantum of that, and help us adjust for the current period?

Speaker #3: That's a trickier one to do without sort of diving into the specifics. But we typically go into a half—about 50% termed is what we try to do across our cargoes, across different products.

Greg Barnes: That's a trickier one to do without sort of diving into the specifics. We typically go into a half, about 50% termed is what we try to do across our cargoes, across different products. It really does vary a bit year to year depending on market conditions. What you're seeing play out in that result is a few things. One, we gained some share because there were less resilient supply chains out there. That is in part because of investments we've made. We have term customer base as well as termed supply. Where we could meet the market for those that were more reliant on sort of traded and spot volumes, we did.

Speaker #3: It really does vary a bit year to year, depending on market conditions. But really, what you're seeing play out in that result is a few things.

Speaker #3: One, we gained some share because there were less resilient supply chains out there. That is in part because of investments we've made. We have a term customer base, as well as termed supply.

Speaker #3: And where we could meet the market for those that were more reliant on sort of traded and spot volumes, we did. And we have deep relationships with suppliers who stood behind their obligations, in large part because of the hard work of our team in Singapore.

Greg Barnes: We have deep relationships with suppliers who stood behind their obligations, in large part because of the hard work of our team in Singapore, who've got a decade or so of long-term relationships. Beyond that, it's hard for me to get into, but it's a combination of those factors that drive the outsized result in the period. I think you've seen a fair degree of consistency prior to the conflict in that part of the business. That's the delta is driven by a combination of those factors. We go in well-supplied into the H2.

Speaker #3: We've got a decade or so of long-term relationships, but beyond that, I wouldn't—it's hard for me to get into. But it's a combination of those factors that drive the outsized result in the period.

Speaker #3: And I think you've seen a fair degree of consistency prior to the conflict in that part of the business. So the delta is driven by a combination of those factors.

Speaker #3: And we go in well-supplied into the second half.

Speaker #1: Your next question comes from Adam Martin with E&T. Please go ahead.

Operator 2: Your next question comes from Adam Martin with E&P. Please go ahead.

Operator: Your next question comes from Adam Martin with E&P. Please go ahead.

Speaker #4: Yeah, morning, Matt, Greg and team. Last result—just the first question is EG Group. Can we get a trading update on how that business is going over the last six months or so, please?

Adam Martin: Morning, Matt, Greg, and team. Nice result. Just the first question, just EG Group, can we get a trading update how that business is going in the last six months or so, please?

Speaker #3: Yeah, so it's performed okay. I would say it's performed in line with our expectations. It's a business that has, in our view, priced higher than necessarily the quality of the proposition in market, and has ceded share as a result.

Greg Barnes: Yeah. So it has performed okay. I would say it has performed in line with our expectations. It is a business that has, in our view, priced higher than necessarily the quality of the proposition in market and has ceded share as a result. I think you can see that is reflected in our strategy, which is we believe there is an opportunity to both upgrade and deliver a more consistent proposition through Ampol Foodary and those smaller sites, which are often retail car park sites that have a very small retail store footprint. They are often high fuel volume sites and tend to be low AmpolCard sites. They can be a really attractive proposition to Ugo. That business has been unsurprising in the last six months. Probably benefited a little bit from our supplier arrangements into that business, which would have been to F&I's detriment.

Speaker #3: And I think you can see that reflected in our strategy, which is that we believe there's an opportunity to both upgrade and deliver a more consistent proposition through Ampol Foodary and those smaller sites, which are often retail car park sites that have a very small retail store footprint.

Speaker #3: They are often high fuel volume sites and tend to be low Ampol Card sites. They can be a really attractive proposition to you, going forward.

Speaker #3: But that business has been unsurprising in the last six months, probably benefited a little bit from our supply arrangements into that business, which would have been to F&I's detriment.

Speaker #3: But we look through those things and look at it on an integrated basis going forward.

Greg Barnes: But we look through those things and look at it on an integrated basis going forward.

Adam Martin: Eddie, you are still confident on the You talked about high single-digit EPS, double-digit free cash increase in the time of deal. I think you have changed the wording slightly. I do not know if that is me looking into it too much or still happy with that.

Speaker #4: Eddie, you're still comfortable on the—I mean, you talked about high single-digit EPS and double-digit free cash accretion at the time of the deal. I think you changed the wording slightly.

Speaker #4: I don't know if that's me looking into it too much, or if I'm still happy with that.

Speaker #3: Probably by accident, Adam, to be honest. Our view has not changed, and we are very confident the combination of that business with ours will be better for it, and we stand behind the metrics we put forward at the time of the deal.

Greg Barnes: Probably by accident, Adam, to be honest. Our view has not changed, and we are very confident the combination of that business with ours will be better for it, and we stand behind the metrics we put forward at the time of the deal.

Operator 2: Your next question comes from Gordon Ramsay with RBC Capital Markets. Please go ahead.

Operator: Your next question comes from Gordon Ramsay with RBC Capital Markets. Please go ahead.

Speaker #1: Your next question comes from Gordon Ramsay with RBC Capital Markets. Please go ahead.

Speaker #4: Oh, thank you very much. And a great result, John. And ladies. Slide 23—Greg, you highlighted $148 million of additional inventory from EFA. What is the outlook for the relationship with Export Finance Australia and for Ampol's supported inventory volumes by them?

Gordon Ramsay: Thank you very much, and great result, John and ladies. Slide 23, Greg, you have highlighted AUD 148 million of additional inventory from EFA. What is the outlook for the relationship with Export Finance Australia and for Ampol's supported inventory volumes by them? Does this involve Ampol taking on any risk?

Speaker #4: And does this involve Ampol taking on any risk?

Speaker #3: Yeah, thanks, Gordon. So your last point first; no, under the arrangement, we effectively act, if you like, as a, for want of a better term, a buying agent.

Greg Barnes: Yeah. Thanks, Gordon. To your last point first, no, under the arrangement, we effectively act, if you like, as a, for want of a better term, a buying agent. We source the product, hold it, and that is important because you want it to flow to customers quickly. When asked by the government to release that inventory, you want it close to your infrastructure so it can reach market. We are not taking price risk on that product. The relationship has been good with EFA, I think, and with the department. I think putting politics aside, they certainly responded quickly when events started to unfold, and we are in regular dialogue with them, and I think they, I would describe them as standing ready to go if the need arises.

Speaker #3: We source the product, hold it, and that's important because you want it to flow to customers quickly when asked by the government to release that inventory.

Speaker #3: You want it close to your infrastructure so it can reach market. We're not taking price risk on that product. The relationship has been good with EFA.

Speaker #3: I think, and with the department, I think putting politics aside, they certainly responded quickly when events started to unfold. And we're in regular dialogue with them.

Speaker #3: And I think they would, I would describe them as standing ready to go if the need arises. And it's always a trade-off of, is it easier to have a physical supply constraint, or is it, when things tighten, are you getting fuel and it's just getting more expensive to land that product in Australia.

Greg Barnes: It is always a trade-off of is it our physical supply constraint, or is it when things tighten, are you getting fuel and it just getting more expensive to land that product in Australia? They seem ready to go if required, and there is a couple of us have a reasonably frequent dialogue with a number of the government departments to just keep them abreast of what is happening with regional fuel supply and flows.

Speaker #3: But they seem ready to go, if required, and there's a couple of us who have a reasonably frequent dialogue with a number of the government departments to just keep them abreast of what's happening with regional fuel supply and flows.

Speaker #4: Thank you. And a question from Matt: Do you have a view on the preliminary proposal to build another refinery in Australia versus adding more product storage capacity?

Gordon Ramsay: Thank you. A question for Matt Halliday. Do you have a view on the preliminary proposal to build another refinery in Australia versus adding more product storage capacity?

Speaker #2: Thanks, Gordon. Look, I think it's fair to say our efforts and focus with government is clear, and they would agree the two remaining refineries are absolutely critical.

Matt Halliday: Thanks, Gordon. Look, I think it is fair to say, our efforts and focus with government is clearly, and they would agree, the two remaining refineries are absolutely critical. They need to be investable for the long term, so getting FSSP2 locked away to ensure that is where the absolute focus is. I would not comment on the specifics of the other announcement, but that is where our focus is, and I think that is absolutely critical alongside the efforts on storage.

Speaker #2: They need to be investable for the long term, and so getting FSSP2 locked away to ensure that is where the absolute focus is. So, I wouldn't comment on the specifics of the other announcement.

Speaker #2: But that's where our focus is, and I think that's absolutely critical alongside the efforts on storage.

Speaker #1: Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Scott Ryle with Rimma Equity Research.

Operator 2: Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Scott Ryall with Rimor Equity Research. Please go ahead.

Operator: Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Scott Ryall with Rimor Equity Research. Please go ahead.

Speaker #1: Please go ahead.

Speaker #5: Well, thanks very much, Matt. I might just continue on with the comments that you've just made there. I was wondering—you've given a little bit of colour through the presentation on phase two of the discussions as to timeline and all of that.

Scott Ryall: Well, thanks very much. Matt, I might just continue on with the comments that you have just made there. I was wondering, you have given a little bit of color through the presentation on phase 2 of the discussions as to timeline and all of that. But I was wondering if you could get a bit more specific. Do you expect resolution this calendar year? Is that what you are saying? What do you actually think investable means from your perspective, please?

Speaker #5: But I was wondering if you could get a bit more specific. Do you expect resolution this calendar year? Is that what you're saying? And does that— what do you actually think "investable" means from your perspective, please?

Speaker #2: Yeah, sure. So that's certainly what we're aiming for—an outcome, or at least a clear understanding of the direction of travel—to be then implemented, probably through next year.

Matt Halliday: Yeah, sure. That's certainly what we're aiming for, is an outcome or at least a clear understanding of the direction of travel to be then implemented probably through next year. Yes, achieving that by the end of this year. I think what it means is when you step back from where we are, I think there's clear alignment that the refineries are going to be required for the longer term. That means we need to be investing over a longer horizon, and that means we need to have confidence in returns to be able to do that. That may sound simple. There are different ways you can achieve that, but I think there's good alignment on that being the context that we're trying to solve for. I think that means there needs to be more downside protection beyond the margin protection.

Speaker #2: But yes, achieving that by the end of this year, I think what it means is, when you step back from where we are, I think there's clear alignment that the refineries are going to be required for the longer term.

Speaker #2: That means we need to be investing over a longer horizon, and that means we need to have confidence in returns to be able to do that.

Speaker #2: And so, while it may sound simple, there are different ways you can achieve that. But I think there's good alignment on that being the context that we're trying to solve for.

Speaker #2: And I think that means there needs to be more downside protection beyond the margin protection. And Greg, I think, alluded to this in his comments.

Matt Halliday: Greg, I think, alluded to this in his comments, that we need to make them investable, to have those confidence in returns over the longer term. That's what we're aiming for. I can't be more specific than that at this stage, but I would say there is very good alignment on that's what we're trying to solve for here.

Speaker #2: That we need to make them investable, to have that confidence in returns over the longer term. So that's what we're aiming for. I can't be more specific than that at this stage, but I would say there is very good alignment on that's what we're trying to solve for here.

Speaker #5: Okay, great. And then, excuse me, my second question—just on slide 15, sorry—which is hugely helpful in terms of looking at the F&I international history.

Scott Ryall: Okay, great. Then, excuse me. My second question, just on slide 15, which is hugely helpful in terms of looking at the F&I international history and some of the factors behind more limited earnings in 2024, 2025. In your prepared remarks, Matt Halliday, you commented on the likelihood of longer-term disruption, and maybe it's not as severe as the H1 was, but you're clearly looking and setting the business in place for disruption that goes beyond this calendar year. I don't want to put words in your mouth, but is what you're saying with this chart that when there are periods of disruption, that's when the F&I international business has an opportunity to earn? So you're thinking about the fact that higher levels of earnings than what we saw in 2024 and 2025 are sustainable into the medium term for this business?

Speaker #5: And some of the factors behind more limited earnings in '24, '25. In your prepared remarks, Matt, you commented on the likelihood of longer-term disruption, and maybe it's not as severe as the first half was, but you're clearly looking at and setting the business in place for disruption that goes beyond this calendar year.

Speaker #5: I don't want to put words in your mouth, but is that what you're saying with this chart—that when there are periods of disruption, that's when the F&I international business has an opportunity to earn?

Speaker #5: So, you're thinking about the fact that higher levels of earnings than what we saw in '24 and '25 are sustainable into the medium term for this business?

Speaker #2: Yeah, I think we're trying to convey a message that Ampol's capability, which has been built up over quite a long period of time, is quite distinctive.

Matt Halliday: Yeah, I think we're trying to convey a message that Ampol's capability, which has been built up over quite a long period of time, is quite distinctive in our sector and certainly in our market. It manages risk and has very tight settings around risk management, which means it protects us against any material downside. I think the chart on 15 demonstrates that where there are well-supplied markets, is the terminology, there'll be some money to be made at a baseline level, and Brent alluded to that. But when markets are tight, those conditions are absolutely suited to that business being able to make money.

Speaker #2: In our sector, and certainly in our market, it manages risk and has very tight settings around risk management, which means it protects us against any material downside.

Speaker #2: And I think the chart on 15 demonstrates that. Where there's—where there are well-supplied markets is the terminology. There'll be some money to be made at a baseline level, and Brent alluded to that.

Speaker #2: But when markets are tight, those conditions are absolutely suited to that business being able to make money. And this is the money—or the profit, just to be clear—that's over and above that relating to the barrels that go into Australia and New Zealand, our core markets, and that core supply focus is what Brent and the team focus on.

Matt Halliday: This is the money or the profit, just to be clear, that is over and above that relating to the barrels that go into Australia and New Zealand, our core markets, and that core supply focus is what Brent and the team focus on. When markets are tight, and those charts on slide 43, I think it was, for product inventories, indicate things are tight. That is what the market is pricing, and the geopolitical volatility is certainly ongoing, as we can all see, on now very, very tight product inventory levels. We went into this at the start of the year in terms of crude and product inventories with plenty of stock. As this continues to go longer, both in the Middle East and in Russia, you can see that product stocks have drawn down to tight levels. That is hard to rebuild quickly.

Speaker #2: But when markets are tight—and those charts on slide 43, I think it was, for product inventories indicate things are tight—that's what the market's pricing in. The geopolitical volatility is certainly ongoing.

Speaker #2: As we can all see, we're now at very, very tight product inventory levels. We went into this at the start of the year in terms of crude and product inventories.

Speaker #2: With plenty of stock, as this continues to go longer—both in the Middle East and in Russia—you can see that product stocks have drawn down to tight levels.

Speaker #2: That is hard to rebuild quickly, and so you’ve got tighter markets, and they are good conditions for our trading business.

Matt Halliday: You have got tighter markets, and they are good conditions for our trading business.

Speaker #1: There are no further questions at this time. I'll now hand back to Matt Halliday for closing remarks.

Operator 2: There are no further questions at this time. I will now hand back to Matt Halliday for closing remarks.

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

Speaker #2: Thanks very much for joining the call. Obviously, a really strong result for Ampol, as a result of, I think, capability and investment that's been made in the business over a long period of time.

Matt Halliday: Thanks very much for joining the call. Obviously, a really strong result for Ampol as a result of, I think, capability and investment that has been made in the business over a long period of time. I think the business now is really well set strategically to continue to build on that platform, as we have mentioned. Thanks for joining. Look forward to talking to you all soon.

Speaker #2: And I think the business now is really well set strategically to continue to build on that platform, as we've mentioned. So, thanks for joining.

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Q2 2026 Ampol Ltd Earnings Call

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