Full Year 2026 AGL Energy Ltd Earnings Call

August 12, 2026

Speaker #1: Thank you for standing by, and welcome to the AGL Energy full-year results briefing conference call. All participants will be in listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to the AGL Energy Full Year Results Briefing conference call. All participants will be in listen-only mode. There will be a presentation followed by a question-and-answer session. I would now like to hand over the conference to Managing Director and Chief Executive Officer, Mr. Damien Nicks. Please go ahead.

Speaker #1: I would now like to hand over the conference to Managing Director and Chief Executive Officer, Mr. Damien Nicks. Please go ahead.

Speaker #2: Good morning, everyone. Thank you for joining us for AGL's 2026 full-year results webcast. I'd like to begin by acknowledging the traditional owners of the land I'm on today, the Gadigal people of the Eora Nation, and pay my respects to their elders past, present, and emerging.

Damien Nicks: Good morning, everyone. Thank you for joining us for AGL's 2026 full year results webcast. I'd like to begin by acknowledging the traditional owners of the land I'm on today, the Gadigal people of the Eora nation, and pay my respects to their elders past, present, and emerging, and from the various lands from which you're all joining. Today, I'm joined by some members of my executive team, Gary Brown, Jo Egan, Dave Moretto, and Matthew Currie. I'll get us started, and we'll have time for questions at the end. Our strong full-year results reflected excellent business performance across AGL, with the strength of our integrated business helping to mitigate the impact of softer market conditions and a very mild May and June. Customer markets delivered a great result driven by growth in customer services, excellent customer satisfaction outcomes, and a return to more sustainable margins.

Speaker #2: And from the various lands from which you're all joining, today I'm joined by some members of my executive team: Gary Brown, Joe Egan, Dave Moretto, and Matthew Curry.

Speaker #2: I'll get us started, and we'll have time for questions at the end. Our strong full-year results reflected excellent business performance across AGL, with the strength of our integrated business helping to mitigate the impact of softer market conditions and a very mild May and June.

Speaker #2: Customer markets delivered a great result, driven by growth in customer services, excellent customer satisfaction outcomes, and a return to more sustainable margins. The improved availability and flexibility of our generation asset portfolio—including the continued strong performance of our batteries—supported earnings resilience in a period of low volatility in the NEM.

Damien Nicks: The improved availability and flexibility of our generation asset portfolio, including the continued strong performance of our batteries, supported earnings resilience in a period of low volatility in the NEM, which was driven by a combination of unusually milder weather, higher renewable generation, battery capacity growth, and lower transmission constraints. We also maintain strict cost discipline in a period of persistent inflation, holding operating costs broadly flat on the prior year, including delivering AUD 30 million of our targeted AUD 50 million FY27 net operating cost reduction a year earlier in FY26. Our FY26 results are a function of consistent strategic delivery over the last four years to build a strong, resilient, and flexible business with incredible pipeline optionality that positions us very favorably today and through the transition.

Speaker #2: This was driven by a combination of unusually mild weather, higher renewable generation, battery capacity growth, and lower transmission constraints. We also maintained strict cost discipline in a period of persistent inflation, holding operating costs broadly flat on the prior year.

Speaker #2: Including delivering $30 million of our targeted $50 million FY27 net operating cost reduction a year earlier, in FY26. Our FY26 results are a function of consistent strategic delivery over the last four years to build a strong, resilient, and flexible business, with incredible pipeline optionality that positions us very favorably today and through the transition.

Speaker #2: Overall, EBITDA was 2% higher, and underlying net profit was marginally lower due to an anticipated increase in depreciation and amortization. This reflects the continued investment in the availability, flexibility, and growth of our asset portfolio, coupled with higher finance costs.

Damien Nicks: Overall, EBITDA was 2% higher and underlying net profit marginally lower due to an anticipated increase in depreciation and amortization, reflecting the continued investment in the availability, flexibility, and growth of our asset portfolio, coupled with higher finance costs. An improved operating cash flow performance supported our material growth outlay and an increase in dividends. Today, we've declared a final ordinary dividend of AUD 0.26 per share, fully franked, bringing the total fully franked dividend for the 2026 financial year to AUD 0.50 per share, AUD 0.02 per share higher than FY25. This equates to a 53.3% payout ratio for the full year.

Speaker #2: An improved operating cash flow performance supported our material growth outlay and an increase in dividends. Today, we've declared a final ordinary dividend of 26 cents per share, fully franked, bringing the total fully franked dividend for the 2026 financial year to 50 cents per share—2 cents per share higher than FY25.

Speaker #2: This equates to a 53.3% payout ratio for the full year. As you can see, we are targeting a higher payout ratio of between 55% and 60% for the FY27 dividend, within our existing policy, delivering shareholder returns whilst we press ahead with our growth agenda again in FY27, including the construction of the Tomago battery and the K2 project.

Damien Nicks: As you can see, we are targeting a higher payout ratio of between 55% and 60% for the FY27 dividend within our existing policy. Delivering shareholder returns whilst we press ahead with our growth agenda again in FY27, including the construction of the Tomago Battery and the K2 Project. Overall, a great set of operational and financial results. We have had another excellent year of strategic execution, generating long-term value and strengthening the resilience, flexibility, and optionality of the business through the energy transition. Firstly, we continue to put customers at the center of our strategy, supporting them through ongoing cost of living pressures whilst transforming our customer business to deliver better experiences, innovative products, and a lower cost to serve. We achieved higher customer satisfaction outcomes in a competitive market and delivered disciplined, well-executed acquisitions, including Ampol Energy's Australian energy customers.

Speaker #2: Overall, a great set of operational and financial results. We've had another excellent year of strategic execution, generating long-term value and strengthening the resilience, flexibility, and optionality of the business through the energy transition.

Speaker #2: Firstly, we continue to put customers at the center of our strategy, supporting them through ongoing cost-of-living pressures, while transforming our customer business to deliver better experiences, innovative products, and a lower cost to serve.

Speaker #2: We achieved higher customer satisfaction outcomes in a competitive market and delivered disciplined, well-executed acquisitions, including Ample Energy's Australian energy customers. During the year, we also met our FY27 target to increase decentralized assets under orchestration to 1.6 gigawatts.

Damien Nicks: During the year, we also met our FY27 target to increase decentralized assets under orchestration to 1.6 gigawatts. Our strategic acquisition of South Australia's Virtual Power Plant, combined with material growth in customer-controlled hot water under orchestration, drove a 250 megawatt increase in decentralized assets under orchestration to 1.74 gigawatts. in February, we also announced a long-term strategic partnership with Aussie Broadband, alongside the divestment of our telecommunications business for approximately AUD 115 million. The divestment allows us to simplify customer markets operations, reduce ongoing operating costs, and maintain a bundled customer proposition through the AGL brand. We also continue to benefit from our 20% investment in Kaluza. Kaluza is generating strong momentum and expanding its global presence, headlined by the signing of Engie. Turning now to the transition of our energy portfolio.

Speaker #2: Our strategic acquisition of South Australia's Virtual Power Plant, combined with material growth in customer-controlled hot water under orchestration, drove a 250-megawatt increase in decentralized assets under orchestration to 1.74 gigawatts.

Speaker #2: In February, we also announced a long-term strategic partnership with Aussie Broadband, alongside the divestment of our telecommunications business for approximately $115 million. The divestment allows us to simplify Customer Markets operations, reduce ongoing operating costs, and maintain a bundled customer proposition through the AGL brand.

Speaker #2: We also continue to benefit from our 20% investment in Calusa. Calusa is generating strong momentum and expanding its global presence, headlined by the signing of ENGIE.

Speaker #2: Turning now to the transition of our energy portfolio. Our flexible asset fleet advanced by roughly 400 megawatts to 8.7 gigawatts, largely driven by an increase in decentralized assets under orchestration, as I mentioned earlier.

Damien Nicks: Our flexible asset fleet advanced by roughly 400 megawatts to 8.7 gigawatts, largely driven by an increase in decentralized assets under orchestration, as I mentioned earlier. This is spread across a diverse range of assets, including batteries, hydro, and 3.3 gigawatts of thermal coal unit flexibility, enhancing our ability to respond to evolving market conditions throughout the energy transition. Construction has commenced on the K2 Project in Western Australia, and I am pleased to report that the 500 megawatt Liddell Battery commenced operations in July, with construction of the 500 megawatt Tomago Battery advancing and at LTESA secured.

Speaker #2: This has spread across a diverse range of assets, including batteries, hydro, and 3.3 gigawatts of thermal coal unit flexibility, enhancing our ability to respond to evolving market conditions throughout the energy transition.

Speaker #2: Construction has commenced on the K2 project in Western Australia, and I'm pleased to report that the 500-megawatt Liddell battery commenced operations in July, with construction of the 500-megawatt Tomago battery advancing, and at El Tessa, secured.

Speaker #2: AGL was also awarded a SIS contract for the proposed 600-megawatt Hexam Wind Farm in Victoria, and signed two long-term power purchase agreements with Tilt Renewables, adding further diversity to our electricity supply portfolio and supporting our target to add 6 gigawatts of renewable and firming capacity by 2030.

Damien Nicks: AGL was also awarded a CIS contract for the proposed 600 megawatt Hexham Wind Farm in Victoria and signed two long-term power purchase agreements with Tilt Renewables, adding further diversity to our electricity supply portfolio and supporting our target to add 6 gigawatts of renewable and firming capacity by 2030. The Tilt divestment was a prime example of our disciplined approach to capital allocation and recycling, monetizing developments for strong realized premiums, with the proceeds redeployed towards our higher returning firming projects and transition opportunities. We have also commenced engagement with a range of potential capital partners regarding the development of more than 2 gigawatts of renewable projects from our pipeline. This process is focused on identifying structures that improve capital efficiency while maintaining strategic and operational flexibility, and we look forward to providing further updates as this work progresses. Overall, a big year of strategic delivery and execution.

Speaker #2: The Tilt divestment was a prime example of our disciplined approach to capital allocation and recycling. Monetizing developments for strong realized premiums, with the proceeds redeployed towards our higher-returning firming projects and transition opportunities.

Speaker #2: We have also commenced engagement with a range of potential capital partners regarding the development of more than 2 gigawatts of renewable projects from our pipeline.

Speaker #2: This process is focused on identifying structures that improve capital efficiency while maintaining strategic and operational flexibility, and we look forward to providing further updates as this work progresses.

Speaker #2: Overall, a big year of strategic delivery and execution. In FY26, I'm proud that we achieved a significant improvement in business performance, demonstrating the resilience of our strategy.

Damien Nicks: In FY26, I am proud that we achieved a significant improvement in business performance, demonstrating the resilience of our strategy. Starting on the left-hand side, we continued to grow our customer base, delivered great customer satisfaction outcomes, and improved consumer margin during a period of elevated market activity. These results demonstrate the strength of our retail portfolio. In particular, our customer markets business recorded excellent growth in overall customer services, primarily in electricity services, including the acquisition of Ampol customers, with telecommunication services also higher. Some clear examples of AGL's strong brand and our focus on delivering superior customer outcomes include the increase in our customer satisfaction score, or CSAT, to 84.1, an uplift in strategic NPS to +10, and spread to market churn improved by 4.9 percentage points. At the same time, we have generated an 11% improvement in consumer margin, reflecting a return to more sustainable levels.

Speaker #2: Starting on the left-hand side, we continued to grow our customer base, delivered great customer satisfaction outcomes, and improved consumer margin during a period of elevated market activity.

Speaker #2: These results demonstrate the strength of our retail portfolio. In particular, our Customer Markets business recorded excellent growth in overall customer services, primarily in electricity services, including the acquisition of Ampol customers, with telecommunications services also higher.

Speaker #2: Some clear examples of AGL's strong brand and our focus on delivering superior customer outcomes include the increase in our customer satisfaction score, or CSAT, to 84.1, an uplift in strategic NPS to plus 10, and spread-to-market churn improved by 4.9 percentage points.

Speaker #2: At the same time, we’ve generated an 11% improvement in consumer margin, reflecting a return to more sustainable levels. On the right-hand side, I’m pleased that our continued investment in our asset portfolio delivered a 4.3 percentage point improvement in fleet availability and positions us well to generate when market conditions are favorable.

Damien Nicks: On the right-hand side, I am pleased that our continued investment in our asset portfolio delivered a 4.3 percentage point improvement in fleet availability and positions us well to generate when market conditions are favorable. In a period of lower volatility, our growing flexible asset fleet generated an excellent premium of 118% to the time-weighted market price, five percentage points above FY25, with our continued investment in flexible assets supporting us to grow this premium over time. Finally, our operated battery portfolio delivered great performance with an EBITDA contribution of AUD 57 million, AUD 10 million higher, even with a year of lower market volatility. Touching on safety performance, our total injury frequency rate did increase slightly. However, this metric remains significantly lower than FY23 and FY24, and well below industry averages.

Speaker #2: In a period of lower volatility, our growing flexible asset fleet generated an excellent premium of 118% to the time-weighted market price, 5 percentage points above FY25, with our continued investment in flexible assets supporting us to grow this premium over time.

Speaker #2: And finally, our operated battery portfolio delivered great performance, with an EBITDA contribution of $57 million—$10 million higher—even with a year of lower market volatility.

Speaker #2: Touching on safety performance, our total injury frequency rate did increase slightly. However, this metric remained significantly lower than in FY23 and FY24, and well below industry averages.

Speaker #2: This is a good outcome given the significant amount of operational and maintenance activity undertaken across our sites during the year. I've already spoken to customer satisfaction, and we acknowledge the lower employee engagement score of 70%.

Damien Nicks: This is a good outcome given the significant amount of operational and maintenance activity undertaken across our sites during the year. I have already spoken to customer satisfaction, and we acknowledge the lower employee engagement score of 70%. However, this score remains broadly in line with industry benchmarks, and we remain focused on fostering an inclusive, empowered, and connected workforce through the energy transition. I will now turn to how the business will continue to create value as the market evolves. I want to begin by reaffirming the strength of our integrated business and our ability to deliver value as the market evolves, underscored by the strength of our customer base, the quality and the flexibility of our energy portfolio, and deep optionality embedded within our development pipeline.

Speaker #2: However, this score remains broadly in line with industry benchmarks, and we remain focused on fostering an inclusive, empowered, and connected workforce through the energy transition.

Speaker #2: I'll now turn to how the business will continue to create value as the market evolves. I want to begin by reaffirming the strength of our integrated business and our ability to deliver value as the market evolves.

Speaker #2: Underscored by the strength of our customer base, the quality and flexibility of our energy portfolio, and the deep optionality embedded within our development pipeline.

Speaker #2: We deliver 4.6 million customer services nationally—a large and diversified customer base that underpins the transition and rebuild of our energy portfolio, supported by great customer satisfaction and low cost to serve.

Damien Nicks: We deliver 4.6 million customer services nationally, a large and diversified customer base that underpins the transition and rebuild of our energy portfolio, supported by great customer satisfaction and low cost to serve. This is backed by a high-quality integrated portfolio of generation assets, which is becoming increasingly flexible, delivers earnings resilience, and allows us to capture value from changing demand patterns and intraday market dynamics. Our market-leading development pipeline provides significant optionality, and our well-defined capital allocation framework ensures we only deploy capital to projects with the strongest portfolio fit and risk-adjusted returns. We are seeing value increasingly shift towards flexibility, firming, and orchestration services, while the shift to electrification, higher EV penetration, and a significant forecasted uplift in data centers coming online are creating durable sources of long-term demand growth.

Speaker #2: This is backed by a high-quality, integrated portfolio of generation assets, which is becoming increasingly flexible, delivers earnings resilience, and allows us to capture value from changing demand patterns and intraday market dynamics.

Speaker #2: Our market-leading development pipeline provides significant optionality, and our well-defined capital allocation framework ensures we only deploy capital to projects with the strongest portfolio fit and risk-adjusted returns.

Speaker #2: We are seeing value increasingly shift towards flexibility, firming, and orchestration services, while a shift to electrification, higher EV penetration, and a significant forecasted uplift in data centers coming online are creating durable sources of long-term demand growth.

Speaker #2: We are well positioned with a compelling suite of EV plans, propositions, and partnerships, and continue to see increasing uptake in electrification products across our consumer and large business customers.

Damien Nicks: We are well-positioned with a compelling suite of EV plans, propositions, and partnerships, and continue to see increasing uptake in electrification products across our consumer and large business customers. Importantly, retail transformation will drive lower cost to serve, improve customer experience, and accelerate product innovation, all of which are critical as our customers move to a more electrified future and seek a broader suite of products. Finally, our capital-light approach to renewable development preserves vital balance sheet capacity for higher returning firming investments. Taken together, these business fundamentals and strategic priorities provide confidence in our ability to generate long-term returns for shareholders. The FY26 outcomes on this slide demonstrate those fundamentals in practice.

Speaker #2: Importantly, retail transformation will drive lower cost to serve, improve customer experience, and accelerate product innovation—all of which are critical as our customers move to a more electrified future and seek a broader suite of products.

Speaker #2: And finally, our capital-light approach to renewable development preserves vital balance sheet capacity for higher-returning firming investments. Taken together, these business fundamentals and strategic priorities provide confidence in our ability to generate long-term returns for shareholders.

Speaker #2: The FY26 outcomes on this slide demonstrate those fundamentals in practice. Firstly, we are seeing the benefits of increased fleet asset flexibility, which has grown by 1.3 gigawatts to 8.7 gigawatts over the past two years.

Damien Nicks: Firstly, we are seeing benefits of increased fleet asset flexibility, which has grown by 1.3 gigawatts to 8.7 gigawatts over the past two years, delivering improved realized supply-side pricing premiums, as well as higher quality and more resilient earnings. We expect to improve these premiums as we grow our flexible asset capacity. Secondly, our continued investment in our coal-fired fleet is delivering the great outcomes you can see on the top right-hand side, with higher availability and greater coal-fired unit flexibility also contributing to the enhanced supply side portfolio pricing outcomes. We are also delivering customer value and improved margins in a tighter retail environment, while keeping operating costs broadly flat since FY24. This has been achieved despite inflation and continued investment in growth, demonstrating great cost discipline with the full implementation of our cost-out program to occur in FY27.

Speaker #2: Delivering improved, realized, supply-side pricing premiums, as well as higher-quality and more resilient earnings. We expect to improve these premiums as we grow our flexible asset capacity.

Speaker #2: Secondly, our continued investment in our coal-fired fleet is delivering the great outcomes you can see on the top right-hand side, with higher availability and greater coal-fired unit flexibility also contributing to the enhanced supply-side portfolio pricing outcomes.

Speaker #2: We're also delivering customer value and improved margins in a tighter retail environment, while keeping operating costs broadly flat since FY24. This has been achieved despite inflation and continued investment in growth, demonstrating great cost discipline, with the full implementation of our cost-out program to occur in FY27.

Speaker #2: Together, these outcomes reinforce the resilience of our business fundamentals and our ability to deliver through various market conditions. Turning now to a discussion on current market dynamics, the recent events of the 21st and 22nd of June in South Australia provide a timely reminder that electricity and markets remain finely balanced and are highly susceptible to unexpected changes in supply and demand.

Damien Nicks: Together, these outcomes reinforce the resilience of our business fundamentals and ability to deliver through various market conditions. Turning now to a discussion on current market dynamics, where the recent events of 21 and 22 June in South Australia provide a timely reminder that electricity markets remain finely balanced and are highly susceptible to unexpected changes in supply and demand. Over those two days, as an example, you can see that South Australia experienced extended periods of extremely low wind generation. While batteries play an important role in supporting the market, the duration of these low wind events limited their ability to discharge adequate supply during the Sunday evening peak and recharge again before Monday morning.

Speaker #2: Over those two days, as an example, you can see that South Australia experienced extended periods of extremely low wind generation. Whilst batteries play an important role in supporting the market, the duration of these low wind events limited their ability to discharge adequate supply during the Sunday evening peak and recharge again before Monday morning.

Speaker #2: The combination of these factors contributed to the significant price volatility outlined on Sunday evening and Monday morning, demonstrating how quickly market conditions can change when key sources of generation are unavailable for an extended period.

Damien Nicks: The combination of these factors contributed to the significant price volatility outlined on Sunday evening and Monday morning, demonstrating how quickly market conditions can change when key sources of generation are unavailable for an extended period. As I discussed at the Macquarie Conference in May, alignment can easily break in five key instances: extreme weather, low solar irradiation, thermal generator outages, interconnected issues, and this particular example, lack of wind generation. Overall, the current picture is one of a system functioning well, however, with limited margin for error during these peak periods. Demand is growing, peaks are rising, and volatility remains a feature under strained conditions. These dynamics underline the importance of adequate firming capacity and business resilience, both key focus areas for AGL as the NEM continues to navigate the energy transition.

Speaker #2: As I discussed at the Macquarie Conference in May, alignment can easily break in five key instances: extreme weather, low solar irradiation, thermal generator outages, interconnection issues, and, in this particular example, lack of wind generation.

Speaker #2: Now, overall, the current picture is one of a system functioning well; however, with limited margin for error during these peak periods. Demand is growing, peaks are rising, and volatility remains a feature under strained conditions.

Speaker #2: These dynamics underline the importance of adequate firming capacity and business resilience, both key focus areas for AGL as the NEM continues to navigate the energy transition.

Speaker #2: As mentioned at the beginning, we had a year of lower volatility, which reflected a combination of the factors you can see on the screen.

Damien Nicks: As mentioned at the beginning, we had a year of lower volatility, which reflected a combination of the factors you can see on the screen, and this is driving the softer FCAS pricing you will see on one of the following slides. As the energy transition progresses, we do expect volatility to be a feature of the NEM as it has been historically. This is due to the withdrawal of coal-fired generation, new renewable generation, and the grid navigating new transmission build-out. Now to a more detailed discussion on fleet performance, where higher commercial availability and plant flexibility help mitigate the earnings impact of lower market volatility. On the left-hand side, you can see we recorded a solid increase in coal-fired commercial availability, driven by stronger reliability and a lower unplanned outage factor.

Speaker #2: And this is driving the softer caps pricing you'll see on one of the following slides. As the energy transition progresses, we do expect volatility to be a feature of the NEM, as it has been historically.

Speaker #2: This is due to the withdrawal of coal-fired generation, new renewable generation, and the grid navigating new transmission build-out. Now, to a more detailed discussion on fleet performance, where higher commercial availability and plant flexibility help mitigate the earnings impact of lower market volatility.

Speaker #2: On the left-hand side, you can see we recorded a solid increase in coal-fired commercial availability, driven by stronger reliability and a lower unplanned outage factor.

Speaker #2: As I alluded to, the lower volatility captured was primarily attributable to the lower spot price volatility recorded in the NEM this year. Generation volumes overall were 3.4% lower, largely driven by lower thermal generation utilization in response to these market conditions.

Damien Nicks: As I alluded to, the lower volatility captured was primarily attributable to the lower spot price volatility recorded in the NEM this year. Generation volumes overall were 3.4% lower, largely driven by lower thermal generation utilization response to these market conditions. Despite the lower thermal generation volumes, higher thermal fleet availability, combined with 3.3 gigawatts of thermal fleet flexibility, enabled AGL to generate when market conditions were most favorable, delivering the strong realized supply-side pricing premiums I spoke to earlier. Continuing the discussion on market conditions, the divergence we are seeing between FY27 and FY30 forward curves largely reflects recent cyclical factors, whilst the medium-term outlook points to a progressively tighter system and returning to pricing levels, which will ultimately be required to underpin investment requirements. The forward market is increasingly recognizing numerous structural changes underway across the NEM.

Speaker #2: Despite the lower thermal generation volumes, higher thermal fleet availability combined with 3.3 gigawatts of thermal fleet flexibility enabled AGL to generate when market conditions were most favorable, delivering the strong realized supply-side pricing premiums I spoke to earlier.

Speaker #2: Continuing the discussion on market conditions, the divergence we are seeing between FY27 and FY30 forward curves largely reflects recent cyclical factors, while the medium-term outlook points to a progressively tighter system and a return to pricing levels which will ultimately be required to underpin investment requirements.

Speaker #2: The forward market is increasingly recognizing numerous structural changes underway across the NEM. Planned coal-fired retirements in both New South Wales and Victoria from FY29 will remove significant baseload capacity from the system.

Damien Nicks: Planned coal-fired retirements in both New South Wales and Victoria from FY29 will remove significant baseload capacity from the system. Importantly, if those retirements are delayed, reliance on aging and less reliable baseload generation is likely to increase volatility, further reinforcing the value of the portfolio flexibility. At the same time, demand forecasts continue to strengthen, underpinned by the growth of data centers and broader electrification across the economy. Crucially, strong market and commercial signals are required to support the delivery of new renewable generation at pace required by the system. Overall, AGL is well-positioned against this market backdrop, and we are largely hedged for FY27, providing earnings resilience in the near term, noting the FY27 VWAPS indicated by the horizontal dotted lines on the screen.

Speaker #2: Importantly, if those retirements are delayed, reliance on aging and less reliable baseload generation is likely to increase volatility, further reinforcing the value of portfolio flexibility.

Speaker #2: At the same time, demand forecasts continue to strengthen, underpinned by the growth of data centers and broader electrification across the economy. Crucially, strong market and commercial signals are required to support the delivery of new renewable generation at the pace required by the system.

Speaker #2: Overall, AGL is well positioned against this market backdrop, and we are largely hedged for FY27, providing earnings resilience in the near term, noting the FY27 VWAPs indicated by the horizontal dotted lines on the screen.

Speaker #2: Our diversified and high-quality integrated portfolio positions us to capture value from any uplift in forward prices and volatility, with a growing flexible asset portfolio delivering enhanced, realized supply-side pricing outcomes.

Damien Nicks: A diversified and high-quality integrated portfolio positions us to capture value from any uplift in forward prices and volatility, with a growing flexible asset portfolio delivering enhanced realized supply-side pricing outcomes. As mentioned at the start, customer markets performance was headlined by growth in customer services by higher customer satisfaction outcomes as well as margin improvement in a competitive market. Total services to customers increased by 92,000, with energy services growth both organic and attributable to the acquisition and successful integration of Ampol Energy's customer base. Importantly, we have maintained strong customer satisfaction, supported by our leading energy brand, digital offering, and loyal customer base. Our churn advantage to the rest of the market also improved 0.9 percentage points. These are great results in a highly competitive market.

Speaker #2: As mentioned at the start, Customer Markets performance was headlined by growth in customer services, higher customer satisfaction outcomes, as well as margin improvement in a competitive market.

Speaker #2: Total services to customers increased by 92,000, with energy services growth both organic and attributable to the acquisition and successful integration of Ample Energy's customer base.

Speaker #2: Importantly, we've maintained strong customer satisfaction, supported by our leading energy brand, digital offering, and loyal customer base. Our churn advantage to the rest of the market also improved to 2.9 percentage points.

Speaker #2: These are great results in a highly competitive market. You can see the improvement in consumer gross margin on the right-hand side, driven in part by customer growth and reflecting a return to more sustainable levels.

Damien Nicks: You can see the improvement in consumer gross margin on the right-hand side, driven in part by customer growth and reflecting a return to more sustainable levels. We are reshaping customer markets to focus on our core energy business, modernize our product offerings, and back a leading platform in Kaluza, which continues to expand its domestic and global appeal. I have already touched on our long-term strategic partnership with Aussie Broadband and the divestment of our telecommunications business, which allows us to simplify operations and sharpen our focus on our core energy business. Our 100% subsidiary, OVO Energy Australia, is currently utilizing Kaluza and Salesforce and continues to see rapid growth, innovation, and positive satisfaction outcomes supported by these modernized platforms and AI capability. Our retail transformation program will unlock these capabilities across AGL Energy as our customers shift towards a more electrified future.

Speaker #2: We are reshaping customer markets to focus on our core energy business, modernize our product offerings, and back a leading platform in Calusa, which continues to expand its domestic and global appeal.

Speaker #2: I've already touched on our long-term strategic partnership with Aussie Broadband and the divestment of our telecommunications business, which allows us to simplify operations and sharpen our focus on our core energy business.

Speaker #2: Our 100% subsidiary, OVO Australia, is currently utilizing Calusa and Salesforce and continues to see rapid growth, innovation, and positive satisfaction outcomes supported by these modernized platforms and AI capability.

Speaker #2: Our retail transformation program will unlock these capabilities across AGL, as our customers shift towards a more electrified future. This program continues to make progress, with key capabilities deployed and savings of $25 million delivered ahead of plan.

Damien Nicks: This program continues to make progress, with key capabilities deployed and savings of AUD 25 million delivered ahead of plan. We are focused on delivering the program successfully and following a detailed review of the next phase of implementation, we now expect the transformation program to extend by up to 12 months and cost to increase by an additional AUD 100 to AUD 150 million. This reflects the scale and complexity of the program, bolstering of our delivery approach and additional investment to de-risk implementation, and we believe this additional investment will support the effective delivery of a modern, scalable retail platform and underpin long-term customer and shareholder value. The anticipated strategic and operational benefits of the program remain unchanged, and we expect the full benefits of annual pre-tax cash savings of AUD 70 to AUD 90 million from FY30.

Speaker #2: We are focused on delivering the program successfully, and following a detailed review of the next phase of implementation, we now expect the transformation program to extend by up to 12 months and the cost to increase by an additional $100 to $150 million.

Speaker #2: This reflects the scale and complexity of the program, the bolstering of our delivery approach, and additional investment to de-risk implementation. We believe this additional investment will support the effective delivery of a modern, scalable retail platform, and underpin long-term customer and shareholder value.

Speaker #2: The anticipated strategic and operational benefits of the program remain unchanged, and we expect the full benefits of annual pre-tax cash savings of $70 to $90 million from FY30.

Speaker #2: Calusa continues to expand its local and global presence, with AI now utilized across its entire product and software development lifecycle. This expedites both delivery and entry into new markets.

Damien Nicks: Kaluza continues to expand its local and global presence, with AI now utilized across its entire product and software development lifecycle, expediating both delivery and entry into new markets. Kaluza's second retail implementation is underway in Australia and is making excellent headway in Europe. The landmark agreement with Engie is its largest deployment to date, and migrations are underway in Belgium and France localization has commenced. Overall, we believe Kaluza's AI-native operating model, maturing platform, and rapidly expanding global appeal underpins the long-term value potential of our strategic investment. We are taking a disciplined approach to investing in flexible asset capacity to position us very favorably through evolving energy markets. Our strategy is premised on building a firming portfolio diversified by technology and asset type.

Speaker #2: Calusa's second retail implementation is underway in Australia, and it is making excellent headway in Europe. The landmark, engraved with ENGIE, is its largest deployment to date, and migrations are underway in Belgium and France. Localization has commenced.

Speaker #2: Overall, we believe Calusa's AI-native operating model, maturing platform, and rapidly expanding global appeal underpin the long-term value potential of our strict investment. We are taking a disciplined approach to investing in flexible asset capacity to position us very, very favorably through evolving energy markets.

Speaker #2: Our strategy is premised on building a firming portfolio diversified by technology and asset type. Batteries and demand response enable us to respond to peak demand events in a matter of milliseconds.

Damien Nicks: Batteries and demand response enable us to respond to peak demand events in a matter of milliseconds, whilst gas peakers and hydro assets provide longer duration firming capacity to support grid stability. This broad mix enhances our ability to respond to changing market conditions and capture value across a wide range of operating environments. As we grow our flexible asset capacity, we expect to strengthen realized supply-side pricing outcomes and deliver higher quality, more resilient earnings over time. The middle graph breaks this down by asset type, also showing the solid premiums we are achieving for our coal-fired generation assets through our investment in flexibility. Importantly, we will continue to sequence new developments in response to market signals, prioritizing investments in regions with higher renewable penetration and near-term coal-fired withdrawals.

Speaker #2: Whilst gas peakers and hydro assets provide longer-duration firming capacity to support grid stability, this broad mix enhances our ability to respond to changing market conditions and capture value across a wide range of operating environments.

Speaker #2: As we grow our flexible asset capacity, we expect to strengthen realized supply-side pricing outcomes and deliver higher-quality, more resilient earnings over time. The middle graph breaks this down by asset type.

Speaker #2: Also, showing the solar premiums we're achieving for our coal-fired generation assets through our investment in flexibility. Importantly, we'll continue to sequence new developments in response to market signals, prioritizing investments in regions with higher renewable penetration and near-term coal-fired withdrawals.

Speaker #2: We'll also seek to grow demand-side flexibility, with a focus on batteries and electric vehicles, while pursuing our strategy to own and operate a gas peaker in each mainland state.

Damien Nicks: We'll also seek to grow demand-side flexibility with a focus on batteries and electric vehicles whilst pursuing our strategy to own and operate a gas peaker in each mainland state. Our market-leading development pipeline of over 10 GW provides significant optionality for our portfolio transition. This pipeline is diversified across location, technology, and asset type, including grid-scale batteries, pumped hydro, gas, wind, and solar. We have opportunities spanning every mainland state, which is complemented by approximately an additional 5 GW of early-stage opportunities. This breadth of options allows us to remain disciplined and responsive, sequencing new developments in line with market signals, customer needs, and system requirements. Importantly, we'll leverage this optionality to only deliver projects with the best strategic fit and risk-adjusted returns. Gary will elaborate further on our disciplined approach to capital allocation.

Speaker #2: Our market-leading development pipeline of over 10 gigawatts provides significant optionality for our portfolio transition. This pipeline is diversified across location, technology, and asset type, including grid-scale batteries, pumped hydro, gas, wind, and solar.

Speaker #2: We have opportunity spanning every mainland state, which is complemented by approximately an additional 5 gigawatts of early-stage opportunities. This breadth of options allows us to remain disciplined and responsive, sequencing new developments in line with market signals, customer needs, and system requirements.

Speaker #2: Importantly, we'll leverage this optionality to only deliver projects with the best strategic fit and risk-adjusted returns. Gary will elaborate further on our disciplined approach to capital allocation.

Speaker #2: As I've mentioned before, this pipeline will continue to evolve as projects are added, removed where uneconomic, and where projects reach. Data centers are one of the most significant emerging sources of electricity demand.

Damien Nicks: As I've mentioned before, this pipeline will continue to evolve as projects are added, removed where uneconomic, and where projects reach FID. Data centers are one of the most significant emerging sources of electricity demand. Before I hand over to Gary, I want to spend a few moments talking about how our energy hubs and energy portfolio present a unique opportunity to support regional data center expansion. What differentiates these sites is not just the scale of the land available, but the combination of water infrastructure, grid connectivity, and generation capacity that already exists today. Not to mention the sheer breadth of optionality and development pipeline, which I just spoke to. These sites were built to underpin large-scale industrial operations and have the potential to support over 7 GW of data center capacity over the long term, largely based on grid connection potential.

Speaker #2: And before I hand over to Gary, I want to spend a few moments talking about how our energy hubs and energy portfolio present a unique opportunity to support regional data center expansion.

Speaker #2: What differentiates these sites is not just the scale of the land available, but the combination of water infrastructure, grid connectivity, and generation capacity that already exists today—not to mention the sheer breadth of optionality.

Speaker #2: Development pipeline, which I just spoke to. These sites were built to underpin large-scale industrial operations, and have the potential to support over 7 gigawatts of data center capacity over the long term, largely based on grid connection potential.

Speaker #2: Importantly, data centers require reliable and increasingly low-emission supply at scale. This is where our integrated portfolio becomes a real advantage. We can support customers with a combination of renewable generation and firming solutions.

Damien Nicks: Importantly, data centers require reliable and increasingly low emission supply at scale. This is where our integrated portfolio becomes a real advantage. We can support customers with a combination of renewable generation and firming solutions. At the same time, future developments have the potential to attract new investment into regions where AGL has operated for decades, creating new job opportunities for our highly dedicated workforce, supporting both economic transition and long-term regional growth objectives. Collectively, these energy hubs provide a unique platform to enable Australia's digital-led growth whilst creating long-term value from AGL's strategic land and infrastructure portfolio. Now over to Gary.

Speaker #2: At the same time, future developments have the potential to attract new investment into regions where AGL has operated for decades, creating new job opportunities for our highly dedicated workforce and supporting both economic transition and long-term regional growth objectives.

Speaker #2: Collectively, these energy hubs provide a unique platform to enable Australia’s digital-led growth, while creating long-term value from AGL’s strategic land and infrastructure portfolio. Now, over to Gary.

Speaker #1: Thank you, Damien. And good morning, everyone. This slide shows an overall summary of our financial results, which I'll cover in more detail shortly. As Damien mentioned, our strong full-year financial results reflected excellent business performance across the organization, with EBITDA of $2.1 billion and underlying net profit of $631 million.

Gary Brown: Thank you, Damien, and good morning, everyone. This slide shows an overall summary of our financial results, which I'll cover in more detail shortly. As Damien mentioned, our strong full-year financial results reflected excellent business performance across the organization, with EBITDA of AUD 2.1 billion and underlying net profit of AUD 631 million. Net debt ended the year broadly flat with our significant outlay for growth, strategic acquisitions, sustaining capital, and AUD 330 million worth of fully franked dividends, more than offset by strong operating cash flow generation and the Tilt divestment proceeds. As Damien also noted, the Tilt divestment was a prime example of our ability to recycle capital when timely and prudent. Monetizing developments for strong realized premiums, with the divestment resulting in a realized post-tax gain on sale of AUD 268 million.

Speaker #1: Net debt ended the year broadly flat, with our significant outlay for growth, strategic acquisitions, sustaining capital, and $330 million worth of fully-franked dividends more than offset by strong operating cash flow generation and the Tilt divestment proceeds.

Speaker #1: As Damien also noted, the Tilt divestment was a prime example of our ability to recycle capital when timely and prudent, monetizing developments for strong realized premiums, with the divestment resulting in a realized post-tax gain on sale of $268 million.

Speaker #1: We've also commenced engagement with a range of potential capital partners regarding the development of more than 2 gigawatts of renewable projects from our pipeline and look forward to updating the market as this work progresses.

Gary Brown: We have also commenced engagement with a range of potential capital partners regarding the development of more than 2 gigawatts of renewable projects from our pipeline and look forward to updating the market as this work progresses. Our balance sheet remains in a healthy position with our Baa2 investment-grade credit rating maintained. Today, we have also announced a fully franked dividend of AUD 0.26 per share, up AUD 0.01, taking the full-year dividend to AUD 0.50 per share. Return on invested capital remained above 10%, and I will speak to our disciplined framework for deploying capital through the transition. Overall, a great set of financial results. Let me first take you through underlying profit in more detail. Starting on the left, the stronger customer markets performance was primarily driven by margin growth across the consumer electricity and gas portfolios, with consumer electricity margin benefiting from solid customer growth and portfolio optimization.

Speaker #1: Our balance sheet remains in a healthy position, with our Baa2 investment-grade credit rating maintained. Today, we've also announced a fully franked dividend of 26 cents per share, up 1 cent, taking the full-year dividend to 50 cents per share.

Speaker #1: Return on invested capital remained above 10%, and I'll speak to our disciplined framework for deploying capital through the transition. Overall, a great set of financial results.

Speaker #1: Let me first take you through underlying profit in more detail. Starting on the left, the stronger customer markets performance was primarily driven by margin growth across the consumer electricity and gas portfolios, with consumer electricity margin benefiting from solid customer growth and portfolio optimization.

Gary Brown: Starting on the left, the stronger customer markets performance was primarily driven by margin growth across the consumer electricity and gas portfolios, with consumer electricity margin benefiting from solid customer growth and portfolio optimization.

Speaker #1: The growth in other margin bar reflects the first year of gross margin contribution from South Australia's Virtual Power Plant, which we acquired from Tesla last year, as well as margin from the sale of battery hardware, which has been supported by government initiatives.

Gary Brown: The growth and other margin bar reflects the first year of gross margin contribution from South Australia's Virtual Power Plant, which we acquired from Tesla last year, as well as margin from the sale of battery hardware, which has been supported by government initiatives. The increase in customer markets' OPEX was mainly driven by higher net bad debt expense following the cessation of government relief support in conjunction with elevated cost of living pressure. These drivers were partially offset by the ongoing delivery of operating model benefits related to the retail transformation program. Moving further to the right, as we now focus on the integrated energy business, you can see in the initial bar being flat that stronger fleet availability and flexibility helped mitigate the earnings impact of lower market volatility, as well as a reduction in thermal generation volumes.

Speaker #1: The increasing customer market's OPEX was mainly driven by higher net bad debt expense, following the cessation of government relief support, in conjunction with elevated cost-of-living pressure.

Speaker #1: These drivers were partially offset by the ongoing delivery of operating model benefits related to the retail transformation program. Moving further to the right, as we now focus on the Integrated Energy business, you can see in the initial bar being flat that stronger fleet availability and flexibility helped mitigate the earnings impact of lower market volatility, as well as a reduction in thermal generation volumes.

Speaker #1: The positive $10 million bar for batteries reflected a stronger performance from the Torrens battery, and we continued to be very pleased with the overall performance of our 300-megawatt operational battery fleet, which delivered a $57 million EBITDA contribution for the year—a great financial result.

Gary Brown: The +AUD 10 million bar for batteries reflected a stronger performance from the Torrens Island Battery, and we continue to be very pleased with the overall performance of our 300-megawatt operational battery fleet, which delivered a AUD 57 million EBITDA contribution for the year. A great financial result. Note, this is a 20% CapEx yield since operation of this growing battery fleet. As previously advised, the lower gas gross margin was driven by higher-priced gas purchases as our lower-cost legacy contracts gradually rolled off. Integrated Energy's OPEX improvement was attributable to the ongoing productivity and optimization initiatives across our various sites. As previously flagged, the AUD 19 million uplift in depreciation and amortization was largely attributable to the continued investment in our thermal assets with a shortening useful life and growth.

Speaker #1: Note, this is a 20% capex yield since the operation of this growing battery fleet. As previously advised, the lower gas gross margin was driven by higher-priced gas purchases, as our lower-cost legacy contracts gradually rolled off.

Speaker #1: Integrated Energy's OPEX improvement was attributable to the ongoing productivity and optimization initiatives across our various sites. As previously flagged, the $19 million uplift in depreciation and amortization was largely attributable to the continued investment in our thermal assets, with a shortening useful life and growth.

Speaker #1: For FY27, we do expect an uplift of roughly $50 million for depreciation and amortization, which will include a full year's worth of depreciation for the Liddell battery.

Gary Brown: For FY27, we do expect an uplift of roughly AUD 50 million for depreciation and amortization, which will include a full year's worth of depreciation for the Liddell Battery. We also note the increased net finance costs, which reflected higher average net debt balances prior to the receipt of the Tilt Renewables proceeds, coupled with an increase in interest rates. We have our costs well under control, and we will deliver on our AUD 50 million cost out program for 2027. We previously indicated a 2% increase in FY26 operating costs in February. However, through our recent cost out initiatives and tight cost controls, operating costs have remained flat, with the impacts of inflation more than offset by the significant productivity initiatives implemented across the organization.

Speaker #1: We also note the increased net finance costs, which reflected higher average net debt balances prior to the receipt of the Tilt proceeds, coupled with an increase in interest rates.

Speaker #1: We have our costs well under control, and we will deliver on our $50 million cost-out program for 2027. We previously indicated a 2% increase in FY26 operating costs in February.

Speaker #1: However, through our recent cost-out initiatives and tight cost controls, operating costs have remained flat, with the impacts of inflation more than offset by the significant productivity initiatives implemented across the organization.

Speaker #1: More broadly, as you can see, we've made significant progress on managing our cost base over the last few years. With operating costs remaining flat since FY24, despite significant inflationary pressures and our material investment in growth, this trend is expected to continue into FY27.

Gary Brown: More broadly, as you can see, we have made significant progress on managing our cost base over the last few years, with operating costs remaining flat since FY2024, despite significant inflationary pressures and our material investment in growth. This trend is expected to continue in FY2027. Just a reminder that our cost out program in FY2027 is targeting an overall sustainable cost benefit of AUD 50 million per annum after CPI. Due to productivity initiatives undertaken in FY2026, we were able to deliver some of these benefits earlier than originally stated, with AUD 30 million of benefit delivered in FY2026. We again expect to fully absorb CPI through productivity benefits in FY2027. This targeted cost out program reflects our ongoing focus on minimizing operating costs in an inflationary environment whilst continuing to invest in growth. Briefly touching on CapEx.

Speaker #1: Just a reminder that our cost-out program in FY27 is targeting an overall sustainable cost benefit of $50 million per annum, after CPI. Due to productivity initiatives undertaken in FY26, we were able to deliver some of these benefits earlier than originally stated, with $30 million of benefit delivered in FY26.

Speaker #1: We again expect to fully absorb CPI through productivity benefits in FY27. This targeted cost-out program reflects our ongoing focus on minimizing operating costs in an inflationary environment, whilst continuing to invest in growth.

Speaker #1: Briefly touching on capex, in line with our strategy, approximately $700 million were spent on growth this year, with the majority of capital deployed to advance our high-returning firming projects of approximately $600 million.

Gary Brown: In line with our strategy, approximately AUD 700 million was spent on growth this year, with the majority of capital deployed to advance our high returning firming projects of approximately AUD 600 million. This growth outlay comprised roughly AUD 70 million for the remaining project cost of the Liddell Battery, approximately AUD 360 million of the estimated AUD 800 million total project cost for the Tomago Battery, with roughly AUD 370 million expected in FY2027 and AUD 70 million in FY2028, and approximately AUD 140 million of the estimated AUD 490 million total project cost for the K2 Project, with roughly AUD 270 million expected to be spent on in FY2027 and the remainder in FY2028. As you can see on the right-hand side, FY2027 forecast growth capital spend is roughly AUD 800 million and will follow a similar trend as we press ahead with the construction of high returning firming projects.

Speaker #1: This growth outlay comprised roughly 70 million dollars for the remaining project cost of the Lydell battery, approximately 360 million dollars of the estimated 800 million dollar total project cost for the Tomagow battery, with roughly 370 million dollars expected in FY27 and 70 million in FY28, and approximately 140 million of the estimated 490 million dollar total project cost for the K2 project, with roughly 270 million expected to be spent on in FY27 and the remainder in FY28.

Speaker #1: As you can see on the right-hand side, FY27 forecast growth capital spend is roughly $800 million, and will follow a similar trend as we press ahead with the construction of high-returning firming projects.

Gary Brown: As you can see on the right-hand side, FY2027 forecast growth capital spend is roughly AUD 800 million and will follow a similar trend as we press ahead with the construction of high returning firming projects.

Speaker #1: FY27 sustaining capital spend is expected to be broadly in line with FY26, at approximately $700 million, and includes roughly $500 million for our thermal fleet, as we have two major planned coal-fired unit outages again in FY27.

Gary Brown: FY2027 sustaining capital spend is expected to be broadly in line with FY2026, approximately AUD 700 million, and includes roughly AUD 500 million on our thermal fleet, as we have two major planned coal-fired unit outages again in FY2027. This prudent spend is to maintain the availability and reliability of our thermal asset fleet in a transitioning market, as evidenced this year through a great availability result. Turning now to cash performance, headlined by strong operating cash flow generation and a 97% cash conversion rate, which supported our material investment in growth. It is important, as we have demonstrated, to continue to generate strong cash flows in our business to support ongoing investment in growth initiatives. I will run through some of the key movements.

Speaker #1: This prudent spend is to maintain the availability and reliability of our thermal asset fleet in a transitioning market, as evidenced this year through a great availability result.

Speaker #1: Turning now to cash performance, headlined by strong operating cash flow generation and a 97% cash conversion rate, which supported our material investment in growth. It is important, as we have demonstrated, to continue to generate strong cash flows in our business to support ongoing investment in growth initiatives.

Speaker #1: I'll run through some of the key movements. Underlying operating free cash flow was $110 million higher, driven by stronger EBITDA and the unwind of government bill relief to customers in the prior year.

Gary Brown: Underlying operating free cash flow was AUD 110 million higher, driven by stronger EBITDA and the unwind of government bill relief to customers in the prior year, partly offset by higher margin calls. The majority of the significant items relate to the continued implementation of the retail transformation program. You can see the receipt of the Tilt proceeds of AUD 739 million, and the other investing activities line primarily comprises SAVPP acquisition investment of roughly AUD 80 million. Operating free cash flow, excluding the impacts of bill relief timing, was AUD 42 million higher, largely driven by lower income tax payments. Encouragingly, our cash conversion rate, excluding margin calls, rehabilitation, and the timing of bill relief, ended the year at 97%, a brilliant result. Turning now to net debt, credit metrics, and our solid funding position. We continue to maintain a strong balance sheet supporting our investment-grade credit rating.

Speaker #1: Partly offset by higher margin calls. The majority of the significant items relate to the continued implementation of the retail transformation program. You can see the receipt of the Tilt proceeds of $739 million, and the 'Other Investing Activities' line primarily comprises the SAVPP acquisition investment of roughly $80 million.

Speaker #1: Operating free cash flow, excluding the impacts of bill relief timing, was $42 million higher, largely driven by lower income tax payments. Encouragingly, our cash conversion rate, excluding margin calls rehabilitation and the timing of bill relief, ended the year at 97%—a brilliant result.

Speaker #1: Turning now to net debt, credit metrics, and our solid funding position, we continue to maintain a strong balance sheet, supporting our investment grade credit rating.

Speaker #1: Starting with net debt, which ended the year broadly flat, noting that our significant outlay for growth, strategic acquisitions, sustaining capital, and $330 million worth of fully franked dividends was more than offset by strong operating cash flow generation and the Tilt divestment proceeds—a great outcome.

Gary Brown: Starting with net debt, which ended the year broadly flat, noting that our significant outlay for growth, strategic acquisitions, sustaining capital, and AUD 330 million worth of fully franked dividends was more than offset by strong operating cash flow generation and the Tilt divestment proceeds, a great outcome. Importantly, we also maintain our Baa2 investment-grade credit rating with headroom to covenants. Our funding remains in a great position following the AUD 510 million Asian term note refinancing in May, with all tranches extended by 2 years at lower margins. I have already touched on the Tilt divestment and spoke to the AUD 500 million AMTN issuance in February, which was over 10 times oversubscribed, an excellent endorsement of our business fundamentals and strategy. Our liquidity position remains very healthy at almost AUD 1.6 billion in cash and undrawn committed debt facilities.

Speaker #1: Importantly, we also maintain our Baa2 investment grade credit rating, with headroom to covenants. Our funding remains in a great position following the $510 million Asian term note refinancing in May, with all tranches extended by two years at lower margins.

Speaker #1: I've already touched on the Tilt divestment and spoke to the $500 million AMTN issuance in February, which was over 10 times oversubscribed.

Speaker #1: An excellent endorsement of our business fundamentals and strategy. Our liquidity position remains very healthy at almost $1.6 billion in cash and undrawn, committed debt facilities.

Speaker #1: Average debt tenure is stable at just over five years, and we don't have any major debt maturing until FY29. I will now take you through our capital allocation framework that we apply within the business.

Gary Brown: Average debt tenure is stable at just over 5 years, and we do not have any major debt maturing until FY29. I will now take you through our capital allocation framework that we apply within the business. We remain disciplined in how we allocate capital, balancing investment in our core business with targeted opportunities that position AGL to create long-term value through the energy transition. On the left-hand side, you can see that our capital allocation principles remain consistent, robust, and flexible to respond in an evolving energy market. Moving to the right-hand side, where we target an IRR of 10% across the portfolio for all growth investments developed on our balance sheet. Just to be clear, this is post-tax, ungeared, and at a project level, leveraging our material portfolio optionality to deliver projects with the strongest portfolio fit and risk-adjusted returns.

Speaker #1: We remain disciplined in how we allocate capital, balancing investment in our core business with targeted opportunities that position AGL to create long-term value through the energy transition.

Speaker #1: On the left-hand side, you can see that our capital allocation principles remain consistent, robust, and flexible to respond in an evolving energy market. Moving to the right-hand side, where we target an IRR of 10% across the portfolio for all growth investments developed on our balance sheet.

Speaker #1: Just to be clear, this is post-tax, ungeared, and at a project level, leveraging our material portfolio optionality to deliver projects with the strongest portfolio fit and risk-adjusted returns.

Speaker #1: In Customer and C&I, we're concentrating on new product offerings and the expansion of our Commercial and Industrial Energy as a Service business, particularly behind-the-meter projects that deliver ongoing recurring revenue.

Gary Brown: In customer and C&I, we are concentrating on new product offerings and the expansion of our commercial and industrial energy as a service business, particularly behind the meter projects that deliver ongoing recurring revenue. We are also progressing almost AUD 2 billion worth of firming projects, adding to our flexible asset capacity, which remains key in a transitioning energy market. I have already spoken to our near-term imperative to create an investment partnership for the development of a 2-gigawatt plus wind farm portfolio. Finally, our Australian business CapEx priorities continue to focus on maintaining safe, flexible, and reliable operations within our energy portfolio, whilst driving efficiencies and meeting regulatory compliance requirements within customer markets. These investments are essential to supporting the performance and resilience of our core business.

Speaker #1: We're also progressing almost $2 billion worth of firming projects, adding to our flexible asset capacity, which remains key in a transitioning energy market.

Speaker #1: I've already spoken to our near-term imperative to create an investment partnership for the development of a 2-gigawatt-plus wind farm portfolio. And finally, our stay-in-business capex priorities continue to focus on maintaining safe, flexible, and reliable operations within our energy portfolio while driving efficiencies and meeting regulatory compliance requirements within customer markets.

Speaker #1: These investments are essential to supporting the performance and resilience of our core business. We continue to maintain our dividend policy of 50% to 75% of underlying NPAT, noting that we have the flexibility to pay within this range, of course, at the Board's discretion.

Gary Brown: We continue to maintain our dividend policy of 50% to 75% of underlying NPAT, noting that we have the flexibility to pay within this range, of course, at the board's discretion. This dividend policy provides the flexibility to allocate capital in a disciplined way, balancing shareholder returns with investment in growth across a range of market conditions. This year's total fully franked dividend of AUD 0.50 per share equates to a payout ratio of 53.3%, which is AUD 0.02 per share higher than the prior year. We are also targeting a higher payout ratio of between 55% to 60% for the FY27 dividend. This is within our existing policy range and demonstrates that we have the ability and flexibility to pay dividends within the broader range from our strong operating cash flow. Thank you again, and handing back to Damien.

Speaker #1: This dividend policy provides the flexibility to allocate capital in a disciplined way, balancing shareholder returns with investment in growth across a range of market conditions.

Speaker #1: This year's total fully franked dividend of 50 cents per share equates to a payout ratio of 53.3%, which is 2 cents per share higher than the prior year.

Speaker #1: We're also targeting a higher payout ratio of between 55% to 60% for the FY27 dividend. This is within our existing policy range and demonstrates that we have the ability and flexibility to pay dividends within the broader range from our strong operating cash flow.

Speaker #1: Thank you again, and handing back to Damien.

Speaker #2: Thanks, Gary. I'll now conclude by talking to FY27 guidance, which reflects earnings resilience through evolving market conditions. Our confidence in the durability of our earnings, cash flows, and balance sheet means we are targeting, within our existing policy, a higher dividend payout ratio for the FY27 dividend of between 55% and 60% of underlying NPAT, with the expectation this will be fully franked.

Damien Nicks: Thanks, Gary. I will now conclude by talking to FY27 guidance, which reflects earnings resilience through evolving market conditions. Our confidence in the durability of our earnings, cash flows, and balance sheet means we are targeting within our existing policy a higher dividend payout ratio for FY27 dividend of between 55% and 60% of underlying NPAT, with the expectation this will be fully franked. FY27 underlying EBITDA guidance reflects an expected stabilization in consumer energy margins, a full year of earnings contribution from the Liddell Battery, and lower operating costs across the business, driven by our cost out program.

Speaker #2: FY27 underlying EBITDA guidance reflects an expected stabilization in consumer energy margins, a full year of earnings contribution from the Lidell battery, and lower operating costs across the business driven by our cost-out program.

Speaker #2: This also reflects an increase in gas costs as low-cost legacy contracts roll off, together with the impact of lower wholesale electricity prices rolling through our contract ends, noting that this is at a premium to the current market prices to our largely hedged generation position, as I alluded to earlier, and our flexible asset fleet.

Damien Nicks: This also reflects an increase in gas costs as low-cost legacy contracts roll off, together with the impact of lower wholesale electricity prices rolling through our contract terms, noting that this is at a premium to the current market prices to our largely hedged generation position, as I alluded to earlier, and our flexible asset fleet. FY27 underlying NPAT guidance reflects an increase in depreciation and amortization of roughly AUD 50 million, partially offset by a reduction in finance costs of approximately AUD 30 million. Thank you for your time, and we will now open for any questions.

Speaker #2: FY27 underlying NPAT guidance reflects an increase in depreciation and amortization of roughly $50 million, partially offset by a reduction in finance costs of approximately $30 million.

Speaker #2: Thank you for your time, and we'll now open for any questions.

Speaker #1: Thanks. Yep.

Gary Brown: We will now open for questions. To ask a question, press the star key followed by the number 1. Can I please ask you to mute any other devices before asking questions over the conference line. We will take one question at a time, and if time permits, we will circle back for any further questions. First question comes from Tom Allen from UBS. Go ahead, Tom.

Operator: We will now open for questions. To ask a question, press the star key followed by the number 1. Can I please ask you to mute any other devices before asking questions over the conference line. We will take one question at a time, and if time permits, we will circle back for any further questions. First question comes from Tom Allen from UBS. Go ahead, Tom.

Speaker #3: We will now open for questions. To ask a question, press the star key followed by the number one. Can I please ask you to mute any other devices before asking questions over the conference line?

Speaker #3: We'll take one question at a time, and if time permits, we will circle back for any further questions. The first question comes from Tom Allen from UBS.

Speaker #3: Go ahead, Tom.

Speaker #1: Good morning Damien, Gary, and the board of teams. You’ve pointed out today that the factors driving lower near-term electricity prices and volatility are likely cyclical, and not structural.

Tom Allen: Good morning, Damien, Gary, and the broader team. You have called out today that factors driving lower near-term electricity prices and volatility are likely cyclical and not structural. I would just like to explore that further. Consensus earnings estimates for AGL over FY27 to 2029 are broadly flat. It appears that despite the backwardation in price curves today, you are hinting an expectation that the market will tighten as thermal assets exit the market, which would imply greater upside than downside risks to price curves over the next few years. Can you comment, Damien or Gary, on how and when the planned exit of your Yallourn in calendar year 2028 and AGL's own Torrens plant might be increasingly reflected in price curves over the next two years as the volume of those futures contracts to calendar year 2028 increases?

Speaker #1: I'd just like to explore that further. So, consensus earnings estimates for AGL over FY27 to FY29 are broadly flat. And it appears that, despite backwardation in price curves today, you're hinting at an expectation that the market will tighten as thermal assets exit the market, which would imply greater upside than downside risk to price curves over the next few years.

Speaker #1: So can you comment, Damien or Gary, on how and when the planned exit of Yallourn in calendar year 2028 and AGL's own Torrens plant might be increasingly reflected in price curves over the next two years, as the volume of those futures contracts for calendar year 2028 increases?

Speaker #1: If you could also include a comment on how the continued operation of the Tomago smelter might impact AGL, and the broader market outlook also.

Tom Allen: If you could also include a comment on how the continued operation of the Tomago smelter might impact AGL and the broader market outlook also.

Speaker #2: Thanks, Tom. I might start—I’ll work backwards maybe on that one and come back. So, as you’re aware through the media, the Tomago smelter for us comes to an end at the end of FY28.

Damien Nicks: Thanks, Tom. I will work backwards maybe on that one and come back. As you are aware through the media, the Tomago smelter for us comes to an end at the end of FY28. That enables us to have some length into the market into FY28. That is a net positive. In terms of the arrangement between Tomago and Snowy, that is for them to discuss in conjunction with government. What I would say is our result today demonstrates the resilience of our business as we navigate this transition. It is going to be complex, it is going to be bumpy, it is going to evolve. But what you are seeing today is the premium to the market that we can achieve through the assets we have. We will keep building out those assets.

Speaker #2: That enables us to have some length into the market into FY28, so that's a net positive. In terms of the arrangement between Tomago and Snowy, that's for them to discuss in conjunction with government.

Speaker #2: Look, what I would say is our result today demonstrates the resilience of our business as we navigate this transition. It's going to be complex.

Speaker #2: It's going to be bumpy. It's going to evolve. But what you're seeing today is the premium to the market that we can achieve through the assets we have.

Speaker #2: And we'll keep building out those assets. We'll keep bringing those assets to the market at the right time, using the capital discipline we've displayed over the last couple of years.

Damien Nicks: We will keep bringing those assets to the market at the right time using the capital discipline we have displayed over the last couple of years. In terms of where those forward curves are going to finish, should I say, I am not going to comment on where I think that market will end up, but what you have seen over 2026 is a very mild year. You have seen some great thermal performance of the broader NEM and a really mild year. What we are saying is we see the market as finely balanced. It is working right now, it is operating, but it does not take much for it to, if you like, get stretched. Again, for us, that is why we are investing in that flexible plant, investing in batteries and gas peakers and so forth. At the same time, bringing into play more wind, but using capital partners to do that.

Speaker #2: In terms of where those forward curves are going to finish, I should say, I'm not going to comment on where I think that market will end up.

Speaker #2: But what you have seen over '26 is a very mild year. You've seen some great thermal performance of the broader NEM, and a really mild year.

Speaker #2: So, what we're saying is we see the market as finally balanced. It's working right now, it's operating, but it doesn't take much for it to, if you like, get stretched.

Speaker #2: So again, for us, that's why we're investing in that flexible plant, investing in batteries and gas peakers and so forth, and at the same time bringing into play more wind, but using capital partners to do that.

Speaker #2: So for me, the question is more about bringing the right assets into the market at the right time. When coal eventually exits the market—and I say it like that because it will—

Damien Nicks: For me, the question is more about bringing the right assets into the market, at the right time when coal eventually exits the market. I say it like that because it will, it will get to the end of its life, and we will have to have new assets in.

Speaker #2: It'll get to the end of its life, and we'll have to have new assets in.

Speaker #1: Thanks, Damien. Just following on this point around volatility and pricing—there had been some concern from investors on the resilience of AGL's battery earnings.

Gary Brown: Thanks, Damien. Just following on this point around volatility and pricing. There has been some concern from investors on the resilience of AGL's battery earnings. Can you comment on how investors should interpret that downside case of AGL's battery earnings in a market scenario that might see lower volatility for longer, particularly with respect to the difference between the battery earnings in a vertically integrated portfolio like AGL's being different perhaps from a standalone merchant battery?

Tom Allen: Thanks, Damien. Just following on this point around volatility and pricing. There has been some concern from investors on the resilience of AGL's battery earnings. Can you comment on how investors should interpret that downside case of AGL's battery earnings in a market scenario that might see lower volatility for longer, particularly with respect to the difference between the battery earnings in a vertically integrated portfolio like AGL's being different perhaps from a standalone merchant battery?

Speaker #1: Can you comment on how investors should interpret that downside case of AGL's battery earnings in a market scenario that might see lower volatility for longer, and particularly with respect to the difference between the battery earnings in a vertically integrated portfolio like AGL's being different, perhaps, from a standalone merchant battery?

Speaker #2: Yeah, and I think that's exactly the point, Tom. I mean, we are an integrated vertical player, for us. And you can see that through the battery result this year.

Damien Nicks: Yeah, I think that is exactly the point, Tom. We are an integrated, vertical player. For us, you can see that through the battery result this year. It is up AUD 10 million, on the back of what was a mild year, there was not a huge amount of volatility. Again, we are not merchant into the market. We can utilize that battery to prevent us having to buy caps and manage our hedging positions and so forth. On top of that, you will see the Liddell Battery coming into the market into FY27. It is now operational. That project went extremely well from a construction and operational perspective, so we will see that benefit into future years. In terms of how those batteries play in our portfolio, it is a portfolio of assets, that is exactly the point.

Speaker #2: It's up $10 million on the back of what was a mild year, and there wasn't a huge amount of volatility. But again, we're not merchant into the market.

Speaker #2: We can utilize that battery to prevent us from having to buy caps and manage our hedging positions and so forth. And on top of that, you'll see the Liddell battery coming into the market in FY27.

Speaker #2: It's now operational. That project went extremely well from a construction and operational perspective, so we'll see that benefit into future years. In terms of how those batteries play in our portfolio, it is a portfolio of assets, and that's exactly the point.

Speaker #2: And so you see that by playing through the premium, we can get to market through that flexibility. We've got a slide on that to demonstrate—about 18% up on where, I suppose, the base market is.

Damien Nicks: You see that playing through the premium, we can get to market through that flexibility, and we have got a slide on that to demonstrate, about 18% up on where the base market is. That premium will continue to grow over time. That enables us to manage through the cycles. We are going to see cycles. I am not going to sit here and say we will not. What I would say is that premium that we can earn through both our assets and also the breadth of our customer base sets us up incredibly well.

Speaker #2: So that premium will continue to grow over time. That enables us to manage through the cycles. We are going to see cycles—I'm not going to sit here and say we won't. But what I would say is, that premium that we can earn through both our assets and also the breadth of our customer base sets us up incredibly well.

Speaker #1: Thanks, Damien. And just clarifying your comment on the ongoing operation of Tomago being net positive—that being, if AGL doesn't sell the same volume of electricity under contract to Tomago as it has in recent years, there is an electricity portfolio EBIT uplift by putting that capacity into higher-value contracts and markets.

Gary Brown: Thanks, Damien, just clarifying your comment on an ongoing operation of Tomago being net positive, that being that if AGL does not sell the same volume of electricity under contract to Tomago as it has in recent years, there is an electricity portfolio benefit uplift by putting that capacity into higher value contracts and markets.

Speaker #2: That's broadly correct, yeah. And the other thing I would say right now—and I think this opportunity is also significant—is just where the dataset alone, and potential load, goes.

Damien Nicks: That is broadly correct, yeah. The other thing I would say right now, and I think this opportunity is also significant, is just where the data center load and potential load goes. I think it is enormous. From an AGL perspective, that provides some length into the market for us as we think about where we are going to be contracting that energy. That contracting energy could be on a range of things, whether it be into the customer base, data centers, but having that length is not a bad position to be in this market right now.

Speaker #2: I think it's enormous. And so, from an AGL perspective, that provides some length into the market for us as we think about where we're going to be contracting that energy.

Speaker #2: And that contracting energy could be on a range of things, whether it be into the customer base, data centers, but having that length is not a bad position to be in in this market right now.

Speaker #1: Thanks, Damien.

Gary Brown: Thanks, Damien.

Tom Allen: Thanks, Damien.

Speaker #3: Thanks, Tom. Next up, we have Tom Wellington from Citi. Go ahead, Tom.

[Company Representative] (AGL Energy): Thanks, Tom. Next up, we have Tom Wallington from Citi. Go ahead, Tom.

Operator: Thanks, Tom. Next up, we have Tom Wallington from Citi. Go ahead, Tom.

Speaker #4: Thanks, team. Thanks for the update. I just wanted to touch on those battery returns, further to Tom Allen's question. You provided that indicative medium-term guidance for those grid-scale batteries within the portfolio.

Tom Wallington: Thanks, team. Thanks for the update. Just wanted to touch on those battery returns, further to Tom Allen's question. You provided that indicative medium-term guidance for those grid-scale batteries within the portfolio. Obviously, these have been downgraded as we have seen those forward swaps and caps sell off over the last 12 months. Just wanted to get a gauge as to how exactly you are thinking about those returns profiles relative to the 7% to 11% internal rates of return that you have talked to previously. I guess further, what would be needed, from the market perspective, in order to see a reversion back towards the upper end of that guidance range? Thanks.

Speaker #4: Obviously, these have been downgraded, as we've seen those forward swaps and caps sell off over the last 12 months. But I just wanted to get a gauge as to how exactly you're thinking about those returns profiles relative to the 7% to 11% internal rates of return that you've talked to previously.

Speaker #4: And I guess, further, what would be needed from the market perspective in order to see a reversion back towards the upper end of that guidance range?

Speaker #4: Thanks.

Speaker #2: Yeah, look, I think right now—I mean, if you look at the results, and I think, I can't remember which slide it's on—but the return, the EBITDA to capex, is sitting on average at around about 20%.

Damien Nicks: Yeah, look, I think right now, if you look at the results, and I cannot remember which slide it is on, but the return, the EBITDA CapEx is sitting on average around about 20%. So that would be well above those levels. We have always provided a long-term view IRR on the return of those batteries. They will move through cycles. However, the important piece, as I answered Tom's question, is these are integrated batteries to the integrated portfolio so that we can, they are not merchant batteries, right? Yes, there will be some volatility, there will be some reduction in various years, but it is the value they provide through our portfolio that provides us the greatest value through the portfolio. But Gary, maybe you just want to touch on those returns.

Speaker #2: So that would be well above those levels. We've always provided a long-term view—IRR—on the return of those batteries. They will move through cycles.

Speaker #2: However, the important piece, as I answered Tom's question, is these are integrated batteries. So, it's the integrated portfolio so that we can—they're not merchant batteries, right?

Speaker #2: Yes, there will be some reduction in various years, but it's the value they provide through our portfolio that gives us the greatest volume, the greatest value through the portfolio.

Speaker #2: But, Gary, maybe you just want to touch on those returns.

Speaker #4: Yeah, look, so those projects to date have returned a 20% capex yield, which is clearly really strong. We've also talked in our current results about an incremental $10 million of EBITDA.

Gary Brown: Yeah. Look, so those projects to date have returned a 20% CapEx yield, which is clearly really strong. We have also talked in our current results about an incremental AUD 10 million of EBITDA. But I would just remind everybody, there are four revenue streams here. We have FCAS, arbitrage, portfolio benefit, and caps or avoided caps. And depending on the particular period, depending on the particular market, we find that some of those revenue streams perform better than others. We are still really confident that they will perform in the upper end of that 8% to 11% range over the 20-year period.

Speaker #4: But I would just remind everybody there are four revenue streams here. We've got FCAS, arbitrage, portfolio benefit, and caps—or avoided caps. And depending on the particular period, depending on the particular market, we find that some of those revenue streams perform better than others.

Speaker #4: We're still really confident that they'll perform at the upper end of that 8% to 11% range over the 20-year period.

Speaker #1: And maybe just to add to that, those markets are evolving, so we're seeing additional revenue streams from those evolving markets as well.

Damien Nicks: And maybe just to add to that, those markets are evolving, so we are seeing additional revenue streams from those evolving markets as well.

Speaker #4: Thanks, team. I'll jump back in the queue. Thank you.

Tom Wallington: Thanks, team. I will jump back in the queue. Thank you.

Speaker #3: Thanks, Tom. Next up, we've got Ewan Manaud from Barrenjoey. Go ahead, Ewan.

[Company Representative] (AGL Energy): Thanks, Tom. Next up, we have Uwan Minogue from Barrenjoey. Go ahead, Ewan.

Operator: Thanks, Tom. Next up, we have Uwan Minogue from Barrenjoey. Go ahead, Ewan.

Speaker #5: Good morning, Damien. Gary on the broader team. We've started to see some media reports of some of the smaller retailers struggling. Can you just talk us through the competitive dynamics you're seeing in the retail space at the moment?

Uwan Minogue: Morning, Damien, Gary, and the broader team. We have started to see some media reports of some of the smaller retailers struggling. Can you just talk us through the competitive dynamics you are seeing in the retail space at the moment?

Ewan Minogue: Morning, Damien, Gary, and the broader team. We have started to see some media reports of some of the smaller retailers struggling. Can you just talk us through the competitive dynamics you are seeing in the retail space at the moment?

Speaker #2: Yeah, look, sure. Look, I won't talk about other retailers in the market, but what I would say is it has been a really competitive year.

Damien Nicks: Well, look, sure. Look, I will not talk about other retailers in the market, but what I would say, it has been a really competitive year. It has been highly competitive. You saw the churn rate step up for us almost 1%, but our spread to market, which is the important piece for us, also grew. So that is a positive. During that competitive market, we were able to grow almost 90,000 customers, that included the acquisition of Ampol. So for us, it is the resilience of our portfolio, it is the product suite we are putting out there that puts us in the best position. What I would say, though, in this environment, is you want to make sure you are incredibly well-hedged, and you have got great risk management through this market, because an evolving market, it will always throw something up at us. For us, we are really well-positioned to manage that risk.

Speaker #2: It's been highly competitive. You saw the churn rate step up for us almost 1%, but our spread to market—which is the important piece for us—also grew.

Speaker #2: So that's a positive. And during that competitive market, we were able to grow almost 90,000 customers, which included the acquisition of Ample. So for us, it's the resilience of our portfolio.

Speaker #2: It's the product suite we're putting out there that puts us in the best position. What I would say, though, in this environment, is you want to make sure you're incredibly well hedged.

Speaker #2: And you've got great risk management through this market, because in an evolving market, it will always throw something up at us. And for us, we are really well positioned to manage that risk.

Damien Nicks: For us, we are really well-positioned to manage that risk.

Speaker #5: All right, thanks. And then, secondly, can you just talk us through what gave you the confidence in tightening the payout ratio for next year, and then what we should think about in terms of the moving pieces there, looking further out?

Uwan Minogue: Great. Thanks. Secondly, can you just talk us through what gave you the confidence in tightening the payout ratio for next year? What we should think about in terms of the moving pieces there looking further out?

Ewan Minogue: Great. Thanks. Secondly, can you just talk us through what gave you the confidence in tightening the payout ratio for next year? What we should think about in terms of the moving pieces there looking further out?

Speaker #2: Yeah, sure. I mean, I think, clearly, it was a strong set of results in what is a milder year. We saw great cash flow.

Damien Nicks: Yeah, sure. I think, clearly it was a strong set of results in what was a milder year. We saw great cash flow. We see a strong balance sheet. That's what gave us the ability to not only pay a little bit higher in FY2026, but tighten that range into the 2027 year. That tightening was 55% to 60%. That just provides that confidence for shareholders, but also confidence where we see cash in the balance sheet.

Speaker #2: We see a strong balance sheet, so that’s what gave us the ability to not only pay a little bit higher in FY26, but also tighten that range into the 2027 year.

Speaker #2: So that tightening was 55 to 60. That just provides that confidence for shareholders, but also confidence when we see cash on the balance sheet.

Speaker #5: Great, thanks, guys.

Uwan Minogue: Great. Thanks, guys.

Ewan Minogue: Great. Thanks, guys.

Speaker #3: Thanks, Ewan. Next up, we have Gordon Ramsay from RBC. Go ahead, Gordon.

[Company Representative] (AGL Energy): Thanks, Uwan. Next up, we have Gordon Ramsay from RBC. Go ahead, Gordon.

Operator: Thanks, Uwan. Next up, we have Gordon Ramsay from RBC. Go ahead, Gordon.

Speaker #6: Oh, thank you, everybody, for the presentation. Damien, just a question about wholesale electricity prices and the June quarter. We've seen a flattening of the intraday price profile.

Gordon Ramsay: Well, thank you, everybody, for the presentation. Damien, just a question about wholesale electricity prices and the June quarter. We've seen a flattening of the intraday price profile and lower evening peak pricing. You've been saying that you think volatility will be going up. Is that more a longer-term statement from your viewpoint? Is that more reliant on Yallourn closing in 2028 and basically structural changes in the market? Because certainly near-term, it looks like volatility is actually decreasing from my viewpoint.

Speaker #6: And lower evening peak pricing. You've been kind of saying that you think volatility will be going up. Is that more a longer-term statement from your viewpoint?

Speaker #6: And is that more reliant on New Liddell closing in '28 and basically structural changes in the market? Because certainly, near-term, it looks like volatility is actually decreasing from my viewpoint.

Speaker #2: Yeah, look, I think the way to think about '26 and what we're saying is, we think there will be volatility in this market. There are going to be periods where it's not there and periods where it will be.

Damien Nicks: Yeah, look, I think the way to think about 2026, and what we are saying is, we think volatility will be in this market. There are going to be periods where it is not there and periods where it will be. Risk from this market has not disappeared. Risk will still exist in this market. We did see 2026, though, as an incredibly mild year. To your point on that last quarter, I think you made, May and June were some of the warmest months we have seen in a long while. So for us to print the number we printed as well with a very mild May and June was really pleasing in terms of that breadth of how the assets operated and the flexibility. Our point in the slides are the market is finely balanced. We do believe volatility will continue to exist.

Speaker #2: Risk from this market hasn't disappeared. Risk will still exist in this market. We did see '26, though, as an incredibly mild year. And to your point on that last quarter, I think you mentioned May and June were some of the warmest months we'd seen in a long while.

Speaker #2: So for us to print the number we printed, as well—with a very mild May and June—was really pleasing in terms of that breadth of how the assets operated and the flexibility.

Speaker #2: Our point in the slides are the market is finally balanced. We do believe volatility will continue to exist. And there will be years, depending on weather, depending on network constraints, depending on thermal generation, it will drive where volatility exists.

Damien Nicks: There will be years, depending on weather, depending on network constraints, depending on thermal generation, it will drive where volatility exists. Thermal generation, let me just call it, I think for the 2026 year, was incredibly strong, not just at our end, but across the whole market as well.

Speaker #2: And thermal generation, let me just call it—I think for the '26 year, was incredibly strong, not just at our end, but across the whole market as well.

Speaker #6: Excellent. And just one other question about the Calooza. I guess it's Calooza and Salesforce—the cost increase and the expansion by 12 months. Can you just give a little bit more detail in terms of what's behind that?

Gordon Ramsay: Excellent. Just one other question about the Kaluza, I guess it is Kaluza and Salesforce, the cost increase and the extension by 12 months. Can you just give a little bit more detail in terms of what is behind that?

Speaker #2: Yeah, look, through a review, this is a big, broad, complex program. It's across the whole ecosystem of customer markets. It's effectively rebuilding that ecosystem such that, for electrification and customer products and services of the future, it's a decision we made a couple of years ago. Through a review, we've made the decision to, if you like, delay that for 12 months or take 12 additional months.

Damien Nicks: Yeah, look, through a review, this is a big, broad, complex program. It is across the whole ecosystem of customer markets. It is effectively rebuilding that ecosystem such that, for electrification and customer products and services of the future, it is a decision we made a couple of years ago. Through a review, we have made the decision to, if you like, delay that for 12 months or take 12 additional months. The reason for that is the complexity in the market that we are dealing with, the regulatory and the policy overlay. We wanted to take more time to get this right for our customers. So it is largely a time issue. It is not a Kaluza or a Salesforce issue. This is about taking us more time to get it right for our customers.

Speaker #2: The reason for that is the complexity in the market that we're dealing with—the regulatory and the policy overlay. We wanted to take more time to get this right for our customers.

Speaker #2: So, it is largely a timing issue. It is not a Calooza or Salesforce issue. This is about taking us more time to get it right for our customers.

Speaker #6: Excellent. Thank you.

Gordon Ramsay: Excellent. Thank you.

Speaker #3: Thanks, Gordon. Next up, we've got Rob Coe from Morgan Stanley. Go ahead, Rob.

[Company Representative] (AGL Energy): Thanks, Gordon. Next up, we got Rob Koh from Morgan Stanley. Go ahead, Rob.

Operator: Thanks, Gordon. Next up, we got Rob Koh from Morgan Stanley. Go ahead, Rob.

Speaker #7: Oh, good morning. Congratulations on the result. Can I please ask about slide 38 in your pack, which is your FY27 strategic targets? There's amazing progress on a lot of those targets.

Rob Koh: Good morning. Congratulations on the result. Can I please ask about slide 38 in your pack, which is your FY27 strategic targets? There is amazing progress on a lot of those targets. Being the perfectionist that I am, I just wanted to ask what your FY27 plans are on the NPS and EAF. There is a big jump up on EAF, and I presume you will make an economic decision there.

Speaker #7: But being the perfectionist that I am, I just wanted to ask what your kind of FY27 plans are on NPS and EAF, as there's a big jump up on EAF.

Speaker #7: And I presume you'll make an economic decision there.

Speaker #2: Yeah, thanks, Robin. Appreciate you calling that out. I think you’re right. Over the last four years, I think the team’s done a great job to deliver on our strategic targets.

Damien Nicks: Well, thanks, Rob, and appreciate you calling that out. I think you are right. Over the last four years, I think the team has done a great job to deliver on our strategic targets. There is clearly still more work to do. I will start maybe on the asset availability, and I will come back to customer. The asset availability and importantly, the flexibility of those assets, has come about the last four or five years investing back in that fleet, making sure we can flex those units and availability, and big credit to the teams. I will call out Bayswater. We hit 99.9 over a quarter. First time we have done that in that plant for 40 years, which is an incredible outcome. Will we get that every day of the week? No, we will not.

Speaker #2: There's clearly still more work we have to do. I'll start maybe on the asset availability, and I'll come back to customer. The asset availability and, importantly, the flexibility of those assets has come about over the last four or five years, investing back in that fleet.

Speaker #2: Making sure we can flex those units and availability. And big credit to the teams, and I will call out Bayswater—we hit 99.9% over a quarter, first time we've done that in that plant for 40 years, which is an incredible outcome.

Speaker #2: Will we get that every day of the week? No, we won't. But it's always about that trade-off decision—the economics of how much you invest versus the availability you want to get.

Damien Nicks: But it's always about that trade-off decision, the economics of how much you invest versus the availability we want to get. It's more about, Rob, it's not just equivalent availability, it's actually the commercial availability we want, so having the plants there when the system needs it and when we need it. Again, we'll continue to drive for the direction of upwards performance, but it will be an economic trade-off all the way through. Then on customer NPS, I think this is a record for us, which is a great result. Still more to be done. I think, to get from 10 to 20 will be a good stretch for Jo this year.

Speaker #2: And it's more about, Rob, it's not just equivalent availability. It's actually the commercial availability we want—so having the plants there when the system needs it and when we need it.

Speaker #2: So again, we'll continue to drive in the direction of upward performance, but it will be an economic trade-off all the way through. And then on customer NPS, I think this is a record for us, which is a great result.

Speaker #2: There's still more to be done. I think to get from 10 to 20 will be a good stretch for Joe this year. But I think what we're seeing—through both having a leading brand, having great customer satisfaction, and also an increase in our RepTrak score—really goes to the quality of the business and the quality of the products and services we're putting out there.

Damien Nicks: I think what we're seeing through both, having a leading brand, having great customer satisfaction, and also an increase in our RepTrak score really goes to just the quality of the business and the quality of the products and services we're putting out there.

Speaker #7: Okay, sounds good. Can I ask a question about slide 37? I asked a strategic question. Now, I'm going to ask you probably a low-quality question.

Rob Koh: Okay. Sounds good. Can I ask a question about slide 37? I asked a strategic question, now I'm going to ask you probably a low-quality question. Slide 37 is a chart you've had before, and you've now added a FY30 battery earnings contribution. Are the heights of those columns changed since your last disclosure, or is it still the same underlying CapEx and timing and targeted returns driving those nice fuzzy columns?

Speaker #7: Slide 37 is a chart you've had before, and you've now added an FY30 battery earnings contribution. Have the heights of those columns changed since your last disclosure, or is it still the same underlying capex, timing, and target returns driving those nice fuzzy columns?

Gary Brown: As you mentioned the word fuzzy, Rob, we deliberately obviously keep that relatively translucent because it depends on where different positions are at the time. They're materially similar to prior periods. It's deliberately translucent, because they're not numbers that we're specifically guiding to, much more directional in nature. I think what we do there, which is quite clear, is we show the really strong performance in FY26, and then we're showing when the various batteries are going to commence operations. Just as importantly, you can see the significant growth in that EBITDA profile as well.

Speaker #5: As you mentioned, the word "fuzzy," Rob. We deliberately, obviously, keep that relatively translucent, because it depends on where different positions are at the time.

Speaker #5: But they're materially similar to prior periods. And it's deliberately translucent, because they're not numbers that we're specifically guiding to—much more directional in nature.

Speaker #5: I think what we do there, which is quite clear, is we show the really strong performance in FY26. And then we're showing when the various batteries are going to commence operations, and just as importantly, you can see the significant growth in that EBITDA profile as well.

Speaker #2: And Rob, that's just the batteries. It doesn't include the K2 project, which would also come in—what is it?—roughly December '27. So there'd be half a year there on top of that.

Damien Nicks: Rob,

Rob Koh: Great

Rob Koh: Great.

Damien Nicks: that is just the batteries. It does not include the K2 Project, which would also come in, what is it, roughly December 2027. So there would be half a year there on top of that. The other thing I would say, Rob, is the question we got for some time was, will the battery earnings more than offset the change in coal and gas? That position still holds.

Speaker #2: And the other thing I'd say, Rob, is, the question we got for some time was, will the battery earnings more than offset the change in coal and gas?

Speaker #2: That position still holds.

Speaker #7: Okay, sounds good. Seeing as you brought up K2—and I'm glad to hear that's going well—and I guess you've got ICM payments there.

Rob Koh: Okay. Sounds good. Seeing as you brought up K2, I am glad to hear that that is going well, and I guess you got RCM payments there. I mean, WEM intra-day volatility is somehow negative, midday to peak. Midday prices in the WEM are higher than evening peak. Do you see that happening in the NEM from time to time, or is there something special about the WEM?

Speaker #7: I mean, when intraday volatility is somehow negative, midday to peak—like, midday prices in the WEM are higher than the evening peak—do you see that happening in the NEM from time to time, or is there something special about the WEM?

Speaker #2: Let me try and answer that broadly. I might pass to Dave. I don't know if Dave will know the answer off the cuff. But the reason that asset is there, and the reason you're getting paid capacity payments for the asset, is largely an insurance product.

Damien Nicks: Let me try and answer that broadly. I might pass to Dave. I do not know if Dave will know the answer off the cuff. The reason that asset is there and the reason you are getting paid capacity payments for that asset is largely an insurance product. That is what it is there for, to kick in when the market needs it. We can operate that asset commercially as well. Again, we will use that within the portfolio that we have today to operate. Dave, do you want to comment on the WEM?

Speaker #2: That's what it's there for—to kick in when the market needs it. We can operate that, obviously—that asset—commercially as well. So again, we'll use that within the portfolio that we have today to operate.

Speaker #2: But Dave, do you want to comment on the WEM?

Speaker #4: Yeah, so on the WEM, really interesting market. I think maybe a little bit less mature than we are over here on the East Coast.

David Moretto: Yeah. So on the WEM, a really interesting market. I think maybe a little bit less mature than we are over here on the East Coast. You have had a lot of batteries come in very quickly, and I think they are still trying to figure out exactly how to operate. They are required to discharge during the evening peak, and so there is quite some competition for charging in the middle of the day. You would need quite a lot more penetration over here on the East Coast to get that sort of thing to happen consistently out over time. But this is why continued build-out of energy is so important, in addition to the storage that is happening at the moment.

Speaker #4: You've had a lot of batteries come in very quickly, and I think they're still trying to figure out exactly how to operate. They are required to discharge during the evening peak.

Speaker #4: And so, there is quite some competition for charging in the middle of the day. You would need quite a lot more penetration over here on the East Coast to get that sort of thing to happen.

Speaker #4: Consistently out over time. But this is why continued build-out of energy is so important, in addition to the storage that's happening at the moment.

Speaker #7: Okay, great. Thanks, Mr. Ritter, sounds good. Appreciate it.

Rob Koh: Okay. Great. Thanks, Mr. Murdoch. Sounds good. Appreciate it.

Speaker #1: Thanks, Rob. Next up, we've got Cameron Nadam from Bank of America. Go ahead, Cameron.

[Company Representative] (AGL Energy): Thanks, Rob. Next up we have got Cameron Natum from Bank of America. Go ahead, Cameron.

Operator: Thanks, Rob. Next up we have got Cameron Natum from Bank of America. Go ahead, Cameron.

Speaker #7: Yeah, good morning, all. Thank you for the presentation. First question, just on gas procurement: you've highlighted higher gas costs as the lower-cost legacy contracts roll off.

Cameron Natum: Yeah, good morning, all. Thank you for the presentation. First question just on gas procurement. You have highlighted higher gas costs as the lower-cost legacy contracts roll off. Could you just give us an indication or a bit of a reminder on how far through that repricing process you are? Should we expect a further step-up in gas costs through FY28? Assuming so, can you just quantify the impact for us as well? Thanks.

Cameron Needham: Yeah, good morning, all. Thank you for the presentation. First question just on gas procurement. You have highlighted higher gas costs as the lower-cost legacy contracts roll off. Could you just give us an indication or a bit of a reminder on how far through that repricing process you are? Should we expect a further step-up in gas costs through FY28? Assuming so, can you just quantify the impact for us as well? Thanks.

Speaker #7: Could you just give us an indication or a bit of a reminder on how far through that repricing process you are? And should we expect a further step-up in gas costs through FY28?

Speaker #7: And assuming so, can you just quantify the impact for us as well? Thanks.

Speaker #2: Yeah, look, let me kick it off. What you're seeing play through the FY26 results is some, and just a little, of the low-cost gas contracts rolling off.

Damien Nicks: Yeah, let me kick it off. What you are seeing play through the 2026 results is some, and just a little of the low-cost gas contracts rolling off. It was roughly December. So into FY27, you are sort of seeing the full-year impact of that occur. Then, largely we will be continuing to contract out our gas book. I think right now, with both the reservation scheme out there and so forth, we will continue to use discipline as to when we contract that gas. Right now, we are more than sufficient into 2027. Dave, maybe you want to add some more comments there on that one as well.

Speaker #2: It was roughly December, so into FY27 you're sort of seeing the full-year impact of that occur. And then, largely, we'll be continuing to contract out our gas book. I think right now, with both the reservation scheme out there and so forth, we'll continue to use discipline as to when we contract that gas.

Speaker #2: But right now, we're more than sufficient into '27. But Dave, maybe you want to add some more comments there on that one as well.

Speaker #4: Yes, I mean, yes, we are well set up for FY27. That's all been put away. We signed about 65 PJ of gas contracts over the course of FY26.

Gary Brown: Yes, so we are well set up for FY27. That has all been put away. We signed about 65 PJs of gas contracts over the course of FY26. Looking out beyond FY28, we are just taking a moment as the gas reservation policy comes through and crystallizes. I think directionally for us, lower gas prices are a benefit. We are not an exporter, we are just trying to provide gas to our customers and to our GPG, so it is directionally going in the right way for us.

Speaker #4: Looking out beyond FY28, we're just taking a moment as the Gas Reservation Policy comes through and crystallizes. I think, directionally for us, lower gas prices are a benefit.

Speaker #4: We're not an exporter. We're just trying to provide gas to our customers and to our GPG. So it's directly going in the right way for us.

Speaker #5: I'd probably just.

Damien Nicks: I would probably just add.

Gary Brown: I would probably just add.

Speaker #7: Sure, thanks for the color. Sorry, go ahead.

Damien Nicks: Sure. Thanks for the color.

Cameron Needham: Sure. Thanks for the color.

Gary Brown: Yeah, I'd probably just add, if you look

Cameron Natum: Sorry, go. Go.

Cameron Needham: Sorry, go. Go.

Speaker #5: Yeah, if you look through the PMI, you can see even though we might see a small increase, as we've flagged previously, in the cost, you can also see the revenue rates going up as well.

Gary Brown: Yeah, if you look through the PMR, you can see even though we might see a small increase as we've flagged previously in the cost, you can also see the revenue rates going up as well. So the actual portfolio margin has pleasingly stayed really stable.

Speaker #5: So the actual portfolio margin has, pleasingly, stayed really stable.

Speaker #2: Just to add to that, if you look at—if you combine the gas result in the customer business versus the integrated business—the net of that is roughly down for '26, 20, or 30 million dollars.

Damien Nicks: Just to add to that. If you combine the gas result in the customer business versus the integrated business, the net of that's roughly down for 2026, 20, or AUD 30 million. So the net of that is not a significant decline.

Speaker #2: So, the net of that is not a significant decline.

Speaker #7: Sure. Okay, thanks for the color. Just a second quick one, if I may. On the retail transformation, obviously you've extended implementation by 12 months and then guided to the additional $100 to $150 million investment.

Cameron Natum: Just second quick one, if I may. On the retail transformation, obviously, you have extended implementation by 12 months and then guided to the additional AUD 100 to AUD 150 million of investment. Can you just give us a little more color in terms of, I guess, A, what is driving that? Could you just, I guess, B, talk through as well what total program cost is, what the remaining cash spend is from here, and I guess how your expected payback or return profiles change following the revision. Thanks.

Cameron Needham: Just second quick one, if I may. On the retail transformation, obviously, you have extended implementation by 12 months and then guided to the additional AUD 100 to AUD 150 million of investment. Can you just give us a little more color in terms of, I guess, A, what is driving that? Could you just, I guess, B, talk through as well what total program cost is, what the remaining cash spend is from here, and I guess how your expected payback or return profiles change following the revision. Thanks.

Speaker #7: Can you just give us a little more color in terms of, I guess, A, what's driving that? And then, could you just, I guess, B, talk through as well what total program cost is, what the remaining cash spend is from here, and, I guess, how your expected payback or return profiles change following the revision?

Speaker #7: Thanks.

Speaker #2: Yeah, the key here on this one is the complexity and the scale of this program led us to make a decision to extend for that 12 months.

Damien Nicks: Yeah. The key here on this one is the complexity and the scale of this program led us to make a decision to extend for that 12 months. The retail environment, the compliance, the regulatory environment is incredibly complex. We wanted to make sure we got that right on day one when we are bringing our customers in. Our benefits on this program have not changed. They have just been pushed back one year. The total increase goes to an additional AUD 100 to AUD 150. From a market point of view, the original program was AUD 300 million. If you think about those are the broad numbers that we are working within. What is important, again, this transformation needs to take place, right? It is a big, broad transformation. The last time we did something like this was many, many years ago.

Speaker #2: The retail environment, the compliance, the regulatory environment is incredibly complex. We wanted to make sure we got that right on day one. When we're bringing our customers in, our benefits on this program have not changed.

Speaker #2: They've just been pushed back one year. The total increase goes from an additional $100 million to $150 million. From a market point of view, the original program was $300 million.

Speaker #2: So that's sort of, if you think about it, those are the broad numbers that we're working within. But what's important, again, is that this transformation needs to take place, right?

Speaker #2: So, it is a big, broad transformation. The last time we did something like this was many, many years ago. And whilst we've done a lot of work around digitization and automation and so forth, this is the next frontier—to be AI native and to then, in time, look to drive further benefits out of having a system and a process and an integrated ecosystem which delivers for our customers.

Damien Nicks: Whilst we have done a lot of work around digitization and automation and so forth, this is the next frontier, to be AI native, and to then, in time, look to drive further benefits out of having a system and a process and an integrated ecosystem which delivers for our customers.

Speaker #5: Yeah, what I'd also add, which I think is really good, is we've actually pre-delivered some of the $70 to $90 million of benefits.

Gary Brown: Yeah. What I would also add, which I think is really good, is we have actually pre-delivered some of the AUD 70 to AUD 90 million of benefits. There is AUD 25 odd million that we have flagged that was delivered across 2025 and 2026. We will continue to focus on delivery of those benefits throughout that period, with the full run rate, as Damien talked about, delivered at the end.

Speaker #5: So, there's $25-odd million that were flagged, that was delivered across '25 and '26. So, we will continue to focus on delivery of those benefits throughout that period, with the full run rate, as Damien talked about, delivered at the end.

Speaker #7: Great, thanks for the colour. Appreciate it.

Cameron Natum: Great. Thanks for the color. Appreciate it.

Cameron Needham: Great. Thanks for the color. Appreciate it.

Speaker #2: Thank you.

Gary Brown: Thank you.

Speaker #1: Thanks, Cameron. Next up, we have Ian Miles from Macquarie. Go ahead, Ian.

[Company Representative] (AGL Energy): Thanks, Cameron. Next up, we have Ian Myles from Macquarie. Go ahead, Ian.

Operator: Thanks, Cameron. Next up, we have Ian Myles from Macquarie. Go ahead, Ian.

Speaker #6: Yeah, can we just sort of harp on that retail? You're talking about $100 to $150 million of more expense or investment, yet you're telling the reason is more time delay and planning.

Ian Myles: Yeah. Can we just harp on that retail? You are talking about AUD 100 million to AUD 150 million of more expense or investment. Yet you are saying the reason is more time delay in planning. It just seems really weird. That is a very large number for a 12-month delay. I was wondering what else is in there.

Speaker #6: It just seems really weird—that's a very large number for a 12-month delay. I was wondering, what else is in there?

Speaker #2: Yeah, when you think about a program, Ian, of this size and this scale, it is time that's driving it, right? So if you think about us taking, effectively, the additional 12 months, that is the time to run a program like this. But maybe, Joe, do you want to sort of provide a bit more color?

Damien Nicks: Yeah. When you think about a program, Ian, of this size and this scale, it is time that is driving it, right? If you think about us taking, effectively, an additional 12 months, that is the time to run a program like this. But maybe, Jo, do you want to just provide a bit more color?

Speaker #3: Yeah, yeah, sure. Hi, Ian. So, yeah, as Damien said, there's time with run rate, but also additional investment in capability over the next two years as the program nears completion.

Jo Egan: Yeah, sure. Hi, Ian. As Damien said, there is time with run rate, but also additional investment in capability over the next 2 years as the program nears completion. As Damien mentioned, we are replacing our entire technology ecosystem. We have a really high benchmark in terms of compliance requirements here in Australia. We want to make sure we get that right. So significant investment in our data platforms, in our credit and collections capabilities, beyond just the core retail platform.

Speaker #3: So, as Damien mentioned, we're replacing our entire technology ecosystem. We've got a really high benchmark in terms of compliance requirements here in Australia, and we want to make sure we get that right.

Speaker #3: So, significant investment in our data platforms, in our credit and collections capabilities, beyond just the core retail platform.

Speaker #6: Okay. On the gas side again, you've talked about 65 PJ of recontracting. How exposed are you if the government pushes hard on this reservation, that you've got contracts which might be tied to JKM or just whole international gas prices, and the domestic market's pushed into oversupply?

Ian Myles: Okay. On the gas side again, you have talked about 65 PJs of recontracting. How exposed are you if the government pushes hard on this reservation that you have got contracts which might be tied to JKM or just international gas prices that the domestic market is pushed into oversupply?

David Moretto: That's-

Speaker #4: Yeah, so look, I mean, that was the sort of risk that we had to take into account when we were going through that contracting.

Damien Nicks: Yeah. So look, that was the sort of risk that we had to take into account when we were going through that contracting, and we are just trying to find a balance. So we are very happy with the levels that we have contracted at in that 65 PJs, and we are very comfortable with the risk that we have taken on there. To the extent that the whole gas complex sort of shifts down a level lower out over time, then we will be able to blend that into our portfolio going forward.

Speaker #4: And we just try to find a balance. So we're very happy with the levels that we've contracted at, and that 65 PJs, and we're very comfortable with the risk that we've taken on there.

Speaker #4: To the extent that the whole gas complex sort of shifts down a level lower, out over time, then we'll be able to blend that into our portfolio going forward.

Speaker #2: I think the bigger risk, Ian, would be to do nothing, also through this market. You do need to be contracting; you do need to be in a position—you wouldn't want to be sitting there completely unhedged going into a year as well.

Gary Brown: I think the bigger risk, Ian, would be to do nothing also through this market. You do need to be contracting. You do need to be in a position. You wouldn't want to be sitting there completely, if you like, unhedged going into a year as well. I think that point of contracting gas through cycles, bringing it in and ready for the portfolio is important.

Speaker #2: So, I think that point of contracting gas through cycles, bringing it in and ready for the portfolio, is important.

Speaker #6: Okay. And then, look, just—you talk about the volatility, the market and the likes, and the opportunities there. I'm curious to understand: you actually haven't taken, I don't believe, any FID decisions on any firming assets in the NEM in the last 12 months.

Ian Myles: Okay. Then look, you talk about the volatility, the market and the likes, and the opportunities there. I'm curious to understand, you actually haven't taken, I don't believe, any FID decisions on any firming assets in the NEM in the last 12 months. Yet you talk in a very positive fashion about these decisions. Can you explain why you haven't been able to bring any of the firm assets or your solar acquisition portfolio to market or to FID in the last 2 years?

Speaker #6: Yet you talk in a very positive fashion about these decisions. Can you explain why you haven't been able to bring any of the firm assets or the acquisition portfolio to market or to FID in the last two years?

Speaker #2: So I think, Ian, when you think about it, the last one we took was K2. That was, I don't know, six months ago. The one before that was Tomago.

Damien Nicks: So I think, Ian, when you think about the last one we took was K2, that was, I don't know, 6 months ago. The one before that was Tomago. That might have been, I don't know, 12 months ago. What's important through this whole piece is capital discipline, right? My point being, you want to make sure you get these projects. So we're not pausing on development pipeline, right? So be really clear about that development pipeline. You want to continue to move these projects through the various planning cycles and the various phases you need to get through, so you can make the right decision at the right time to place those assets in the market to get the best returns. So right now, we've got almost AUD 2 billion of construction underway.

Speaker #2: That might have been 12 months ago. What's important through this whole piece is capital discipline, right? So my point being, you want to make sure you get these projects.

Speaker #2: So we're not pausing on the development pipeline, right? So be really clear about that. Development pipeline—you want to continue to move these projects through the various planning cycles and the various phases you need to get through, so you can make the right decision at the right time to place those assets in the market to get the best returns.

Speaker #2: So right now, we've got almost $2 billion of construction underway, plus we have a range of conversations underway in terms of getting wind projects up and underwritten.

Damien Nicks: Plus, we have a range of conversations underway in terms of getting wind projects up and underwritten. So they're the sort of things you're doing the whole time. It's not about just bringing the next asset to market as an FID. You want to bring the right asset to the market at the right time, depending also how some of these, if you like, government, contracting schemes are also playing out. They're all the things that play into our decision, always with discipline.

Speaker #2: So they're the sort of things you're doing the whole time. It's not about just bringing the next asset to market as an FID. You want to bring the right asset to the market at the right time, depending also on how some of these, if you like, government contracting schemes are also playing out.

Speaker #2: They're all things that play into our decision, always with discipline.

Speaker #5: Yeah, and I'd just add, we've got two significant builds going on in the year. You've got the Tomago battery, which is about $370 million of spend, and we've got K2 at about $270 million of spend as well.

Gary Brown: Yeah, I would just add, we have two significant builds going on in the year. You have the Tomago Battery, which is about AUD 370 million of spend, and we have K2 at about AUD 270 million of spend as well. Capital discipline and allocation is obviously fundamental as well.

Speaker #5: So, capital discipline and allocation is obviously fundamental as well.

Speaker #6: Can I just, can I just push that a little and say, are we seeing a situation, because of where markets are and what government policies are, that there's more of a deferral?

Ian Myles: Can I just push that a little and say, are we seeing a situation because of where markets are and what government policy are, that there is more of a deferral, that you do not need to be early to have these plants in place?

Speaker #6: You don't need to be early to have these plants in place?

Speaker #2: I think what I’d say—and right now, this market absolutely needs more wind built, right? I’ve been pretty public in saying it. In terms of the proponents out there, it’s either use it or lose it, because we need the right wind being built in the system.

Damien Nicks: I think what I would say, and right now, this market absolutely needs more wind built, right? I have been pretty public in saying it, in terms of.

Ian Myles: Yep

Ian Myles: Yep.

Damien Nicks: The proponents out there, either use it or lose it, because we need the right wind being built in the system. The other thing I would say is when we are bidding into these type of arrangements, and there are many of them, we bid to build. We want to make sure that if we are bidding to build, we have the economics that stacks up behind it. I would say some of this is a function of the various schemes that are out there, making sure you are best positioned, from a shareholder point of view, to get the best and the appropriate returns that we can. Dave?

Speaker #2: And the other thing I would say is, when we're bidding into these types of arrangements—and there's many of them—we bid to build.

Speaker #2: So we want to make sure that if we're bidding to build, we've got the economics that stack up behind it. So I would say some of this is a function of the various schemes that are out there, making sure you are best positioned from a shareholder point of view to get the best outcome.

Speaker #2: And the appropriate returns that we can. But Dave?

Speaker #4: Yeah, I mean, maybe just a little bit more color on that. It's very hard to take investment cues from current spot or current forward curves because, by the time you make the decision, pull the trigger, and actually construct it, you're in a totally different market altogether.

David Moretto: Yeah, maybe just a little bit more color on that. It is very hard to take investment cues from current spot or current forward curves, because by the time you make the decision, pull the trigger, and actually construct it, you are in a totally different market altogether. For us, we are always just trying to make sure that we actually have a purpose for what we are building. It is actually serving a function within our business, and we are just trying to put it in the right place at the right time. Really interesting market at the moment, but we are really trying to look at what is coming in the next phase.

Speaker #4: For us, we're always just trying to make sure that we actually have a purpose for what we're building. It's actually serving a function within our business.

Speaker #4: And we're just trying to put it in the right place at the right time. So, really interesting market at the moment, but we're really trying to look at what's coming in the next phase.

Speaker #2: Yeah.

Damien Nicks: Yeah.

Speaker #6: Thanks. Thanks, Ian. Next

Ian Myles: Thanks.

[Company Representative] (AGL Energy): Thanks, Ian. Next up we have Adrian Atkins from Morningstar. Go ahead, Adrian.

Operator: Thanks, Ian. Next up we have Adrian Atkins from Morningstar. Go ahead, Adrian.

Speaker #5: Next up, we have Adrian Atkins from Morningstar. Go ahead, Adrian.

Speaker #7: Good morning, guys. Just about depreciation—I think you were expecting something like $900 million in FY26, and it came in a lot lower. Just wondering if you can explain that and any implications for the future.

Adrian Atkins: Good morning, guys. Just about depreciation, I think you are expecting something like AUD 900 million in FY26 and it came in a lot lower. Just wondering if you can explain that and any implications for the future.

Speaker #5: Yeah, so yes, depreciation did come in a bit lower than initially expected. That was due to a range of different reasons. And some of that is in relation to the phasing of our capital as well as it is deployed.

Gary Brown: Yeah. Yes, depreciation did come in a bit lower than initially expected. That was due to a range of different reasons, and some of that is in relation to the phasing of our capital as well as it is deployed. We have also guided in FY27 to say that we expect depreciation and amortization to go up by about AUD 50 million as well, and that is as a result as we continue to deploy that capital.

Speaker #5: We've also guided in FY27 to say that we expect depreciation and amortization to go up by about $50 million as well, and that's as a result as we continue to deploy that capital. Thanks, Adrian.

Adrian Atkins: Okay.

[Company Representative] (AGL Energy): Thanks, Adrian. Next up, we have Anthony Moulder from Jefferies. Go ahead, Anthony.

Operator: Thanks, Adrian. Next up, we have Anthony Moulder from Jefferies. Go ahead, Anthony.

Speaker #5: Next up, we have Anthony Mulder from Jefferies. Go ahead, Anthony.

Speaker #8: Yeah, good afternoon, all. I just want to go back to that slide 37 that Rob asked about. So, Gary, if I'm clear in your answer, that hasn't changed from last year, is your way of thinking.

Anthony Moulder: Yeah, good afternoon, all. I just want to go back on that slide 37 that Rob asked about. So Gary, if I'm clear on your answer, that hasn't changed from last year, is your way of thinking. Obviously, we've taken some scale from FY25 and now FY26, and it looks like things have changed significantly lower, for those battery earnings into the forward years. But from your perspective, because there is no Y-axis, they haven't changed. Did I hear that correctly, please?

Speaker #8: Obviously, we've taken some scale from FY25. Now, FY26, it looks like things have changed significantly lower for those battery earnings into the forward years. But from your perspective, because there is no Y-axis, they haven't changed.

Speaker #8: Did I hear that correctly, please?

Speaker #5: Yeah, I wouldn't take these graphs too literally. They are deliberately translucent because it depends on where those curves settle at those points in time.

Gary Brown: Yeah. I wouldn't take these graphs too literally. They are deliberately translucent, because it depends on where those curves settle at those points in time. What we can say is we are still really confident with the return profiles of those assets towards the upper end of that 8% to 11% range.

Speaker #5: What we can say is we are still really confident with the return profiles of those assets towards the upper end of that 8% to 11% range.

Speaker #2: I think the answer—Ian, I mean, sorry, Ian, not Ian—it hasn't changed materially, is the answer. Every year they'll bump around a little bit, but there's no material change.

Damien Nicks: I think the answer, Ian. I'm sorry, Ian. Not Ian. It hasn't changed materially is the answer. Every year they'll bump around a little bit, but there's no material change.

Anthony Moulder: Okay. All right. That is good to understand. Thank you. Just quickly, Gary, if you could tell me what is the capitalized interest that you had from Liddell in FY2026 and just as a guide for how much that will contribute to FY2027, please.

Speaker #8: All right, that's good to understand. Thank you. And just quickly, Gary, if I could, if you could tell me, just to the capitalized interest that you had from Liddell in FY26, and just as a guide for how much that'll contribute to FY27, please?

Speaker #5: Sorry, capitalized interest alone on Liddell? I'd have to come back to you on that one—the specific number.

Gary Brown: Sorry, capitalized interest alone on-

Anthony Moulder: Yeah

Anthony Moulder: Yeah.

Gary Brown: On Liddell?

Anthony Moulder: On Liddell.

Gary Brown: I'd have to come back to you on that one, the specific number.

Speaker #8: Okay.

Anthony Moulder: Okay.

Speaker #4: Well, I would say, what I would say on Liddell, though, is it is delivered under budget as well, which has been a good thing for the market and for the team.

Damien Nicks: What I would say-

Anthony Moulder: Perfect. Thank you very much.

Damien Nicks: What I would say on Liddell, though, it is delivered under budget as well, which has been a good thing for the market and for the team. They've done a great job of delivering that one.

Speaker #4: They've done a great job of delivering that one.

Speaker #5: Yeah, perhaps the easiest way is just $800-odd million at roughly five to six percent. That type of number.

Gary Brown: Yeah. Perhaps the easiest way is just AUD 800 odd million at roughly 5% to 6%, that type of number.

Speaker #8: Thank you.

Anthony Moulder: Thank you.

Speaker #1: Thanks, Anthony. We've got time for one more call—Rob Coe from Morgan Stanley.

[Company Representative] (AGL Energy): Thanks, Anthony. We have time for one more call. Rob Koh from Morgan Stanley.

Operator: Thanks, Anthony. We have time for one more call. Rob Koh from Morgan Stanley.

Speaker #7: Oh, hi, guys. This is a bit of a modeling question, so if you wanted to take it offline, that would be fine. But I guess with you, retail transformation—originally 300, and now an extra 100 to 150.

Rob Koh: Oh, hi, guys. This is a bit of a modeling question, so if you wanted to take it offline, that would be fine. But, I guess with your retail transformation, originally 300 and now an extra 100 to 150, so that is on the cost side. Then the benefits, did I hear that you are delivering 50 of the 70 to 90 in FY26 and 2027, such that we should only be looking for an extra, I guess, 20 to 40 by the time the project is complete? Is that the right way to think about that?

Speaker #7: So that's on the cost side. And then on the benefits, did I hear that you're delivering $50 million of the $70 to $90 million in FY26 and FY27, such that we should only be looking for an extra, I guess, $20 to $40 million by the time the project's complete?

Speaker #7: Is that the right way to think about that?

Speaker #3: Not quite, Rob. We've delivered around 25 already. So you may recall that the transformation program also looked at the operating technology. We've already delivered three-quarters of the operating model change, which is delivering those labor benefits of $25 million.

Jo Egan: Not quite, Rob. We have delivered around 25 already. You may recall that the transformation program also looked at the operating model, in the customer markets business alongside the technology. We have already delivered three-quarters of the operating model change, which is delivering those labor benefits of AUD 25 million.

Speaker #5: Yeah, the balance, you would assume, would come at the back end of the program, as we've talked about.

Gary Brown: Yeah, the balance, you would assume would come at the back end of the program as we have talked about.

Speaker #2: And I think the opportunity, Rob—like with any of these programs, and why we're doing this—is being AI native. I think, in time, there'll be further benefits.

Damien Nicks: I think the opportunity, Rob, like with any of these programs and why we are doing this, is being AI native. I think in time there will be further benefits. We will look to extract from this in terms of the way we use data and insights in our business will continue to evolve for sure.

Speaker #2: We'll look to extract from this in terms of the way we offer. The way we use data and insights in our business will continue to evolve, for sure.

Speaker #7: Okay, thank you. Yeah, sorry, I'm in no way questioning what you're doing and how you're doing it.

Rob Koh: Okay. Thank you. Yeah, sorry, I am in no way questioning what you are doing and how you are doing it.

Speaker #5: I'm just trying to work out a model.

[Company Representative] (AGL Energy): Are you just trying to get another meeting?

Operator: Are you just trying to get another meeting?

Rob Koh: Even after all of Gary's approved the budget. I guess I just want to make sure I haven't got too aggressive numbers in my model. So of the 17 to 90, 25, and the rest backended, is that the rough timing?

Speaker #7: Approved the budget. I guess I just want to make sure I haven't got too aggressive numbers in my model. So, of the 70s to 90, 70s to 90.

Speaker #7: Twenty-five, and the rest back-end? Is that the rough timing?

Speaker #3: Yep, that's it.

Damien Nicks: Yes.

Gary Brown: That's it.

Jo Egan: That's it.

Speaker #7: Okay, great. Thank you so much.

Rob Koh: Okay, great. Thank you so much.

[Company Representative] (AGL Energy): Thanks, Rob. That is all we have time for today. Thank you everyone for dialing in.

Operator: Thanks, Rob. That is all we have time for today. Thank you everyone for dialing in.

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