Financial Performance and Key Metrics - The company reported earnings per share of $0.93 in the second quarter, exceeding market expectations [4] - The company is on track to achieve $200 million to $300 million in cost reductions this year, part of a broader goal of $500 million to $750 million over the next three to five years [8][10] Business Line Performance - The Ag Services and Oilseeds segment delivered results in line with expectations, benefiting from improved plant networks and regulatory certainty [4] - The Nutrition business showed sequential improvements, particularly in the flavor and probiotic segments, and has resumed production at a previously down protein plant [5][33] Market Conditions - The company anticipates a strong fourth quarter driven by better crush margins and a large crop harvest in the U.S. [12][28] - Commodity prices are low, affecting farmer willingness to sell, but a large crop is expected, which should support processing capacity [25][27] Company Strategy and Industry Competition - The company is focusing on portfolio simplification and has exited non-core units to enhance returns [6][9] - There is a strong emphasis on capital allocation towards productivity and innovation, with a commitment to maintaining and growing dividends [9][51] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about finishing 2025 strong and is excited about the opportunities in 2026, despite ongoing uncertainties [11][60] - The company is actively working on operational excellence and improving supply chain management to meet growing demand [62] Other Important Information - The company has been investing in regulatory clarity for biofuels, which is expected to support future growth [10][56] - The Nutrition segment is focusing on innovation and expanding capabilities in flavors and probiotics, with a strong emphasis on R&D [41][66] Q&A Session Summary Question: What is the outlook for the second half of the year? - Management indicated that Q4 is expected to be significantly better than Q3, driven by improved crush margins and harvest timing [12][14] Question: How is the company managing cost savings? - The company is on track to deliver substantial cost savings through operational improvements and technology [20][22] Question: What are the expectations for the Nutrition segment? - The Nutrition segment is expected to see a quarterly impact of $20 million to $25 million as operations ramp up, with a focus on rebuilding market share [38][39] Question: How does the company view its capital allocation strategy? - The company prioritizes capital allocation towards productivity and innovation, maintaining a balanced approach to dividends and strategic acquisitions [51][54]

Financial Data and Key Metrics Changes - The underlying NPAT A for FY 2025 was $279 million, a 33% increase from FY 2024, while statutory NPAT increased by 82% to $149 million [5] - Underlying EBITDA rose to $474 million, a 25% increase from FY 2024, with a cash conversion rate of 98% [5][25] - The pro forma revenue for FY 2025 was $10.6 billion, reflecting a 2.5% decline adjusted for divested businesses [20][21] - The net debt to EBITDA ratio improved to 0.9 times, down from 1.4 times in FY 2024 [5][25] Business Line Data and Key Metrics Changes - The Transport segment saw earnings increase by 11.1% to $278 million, with an EBITDA margin of 5.2% [9] - Energy and Utilities earnings increased by 43.9% to $122 million, despite a revenue decrease of 7.7% to $3 billion [12] - Facilities revenue remained stable at $2.2 billion, with earnings increasing to $151 million and a 7% EBITDA margin [14] Market Data and Key Metrics Changes - The government allocated funding increased by almost 6% in 2025, supporting infrastructure projects [3] - The energy sector is experiencing growth driven by decarbonization and network resilience needs, particularly in New South Wales, Queensland, and Western Australia [13] - The transport sector in New Zealand is expected to benefit from significant infrastructure programs, with $6 billion in projects announced [11] Company Strategy and Development Direction - The company is focusing on portfolio simplification and enhancing revenue quality, targeting a 4.5% average EBITDA margin for FY 2025 and 2026 [4][21] - The strategic focus is shifting from turnaround to sustainable growth, with an emphasis on organic growth within core markets [34] - The company plans to invest in modernizing work practices and technology to enhance productivity and customer experience [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving ongoing improvement across key metrics and maintaining balance sheet flexibility for growth [4] - The outlook for FY 2026 anticipates flat to slightly lower underlying revenue, with a focus on quality revenue and margin improvement [42] - Management highlighted the importance of being selective in pursuing opportunities to ensure quality revenue [46] Other Important Information - The company announced an on-market share buyback of up to $230 million and increased its dividend payout ratio to 60%-70% of underlying NPATA [36][37] - Safety metrics improved, with a 20% reduction in injury frequency rates [5][18] Q&A Session Summary Question: Can you elaborate on the flat to down revenue guidance for next year? - Management emphasized the focus on quality revenue and being selective about opportunities, leading to a comfortable assessment of flat to slightly down revenue for FY 2026 [46][47] Question: What is the confidence level for achieving greater than 4.5% average margin? - Management expressed confidence in achieving the 4.5% target, citing progress in price, cost, productivity, and quality improvements [48][50] Question: Will there be a cleaner year in terms of significant items next year? - Management indicated that while some legal matters may continue, the nature of significant items is expected to decrease, transitioning towards sustainable growth [51][52] Question: What are the expectations for road activity in Australia? - Management noted that road maintenance spending needs to increase, with expectations for gradual improvement in volumes [57][58] Question: How does the $4.5 billion preferred business status influence revenue guidance? - Management confirmed that the preferred bidder status typically indicates a high likelihood of contract awards, which are expected to be multi-year projects [62][68] Question: What portion of FY 2026 revenue guidance is already secured? - Management stated that typically around 75% of revenue would be secured at this stage, incorporating expectations for contract awards [75] Question: What earnings benefit is expected from the cost-out program in 2026? - Management indicated that approximately two-thirds of the gross annualized cost benefits would contribute to FY 2026 results, helping to offset cost escalation pressures [79] Question: Will there be any net cash impact from divestment activity in 2026? - Management expects proceeds from the sale of the Keolis Downer business to impact FY 2026, estimating cash inflows between $60 million to $65 million [81][83] Question: What types of M&A opportunities are being considered? - Management clarified that any potential M&A would focus on complementary businesses that enhance current capabilities, particularly in transport and energy sectors [85]