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Tania Archibald: Good morning, everyone, and thank you for joining us. I'm Tania Archibald, BlueScope's Managing Director and Chief Executive Officer. And with me today is David Fallu, our Chief Financial Officer. Together, we'll take you through our results materials before we take your questions. I'd like to begin by acknowledging the traditional custodians of the various lands on which we meet and work today and pay my respects to elders past and present. Before I go any further, I need to address the most important issue for our company. In November, a young contractor, Jack McGrath, tragically lost his life whilst working on the #6 blast furnace reline project at Port Kembla. The impact has been profound. A family lost someone they loved and the BlueScope community lost a colleague. I want to acknowledge how deeply this has affected everyone, our employees, our contractor partners and the local community. The Safe Work New South Wales investigation into the incident is continuing, and we're cooperating fully. I won't comment further on the specifics. But what I will say is this, nothing matters more than the safety of our people. Every person who comes to work at a BlueScope site has the right to go home safely. That is nonnegotiable. Our global safety refocus program continues and further improving our safety performance is my highest priority. Before I run through results, let me address the recent acquisition proposal. As I said 2 weeks ago, the Board rejected that proposal, and I supported that rejection. The Board remains open to any proposal that genuinely reflects BlueScope's fundamental value, but we are not sitting here waiting. We're getting on the front foot to unlock BlueScope's value. Two weeks ago, I laid out my agenda as BlueScope transitions into a new era. Let me bring you up to date on the progress and where I'm leading the company. BlueScope is a manufacturer built with strength and built to win. We're now approaching an inflection point as our investment phase ramps down and we ramp up delivery of value to our shareholders. To do this, we're becoming simpler, leaner and more agile. We're accelerating the realization of value from our 1,200-hectare surplus land portfolio. We're increasing our shareholder distribution target to 75% of free cash flow, and we're planning to deliver $3 per share returns this calendar year. Shareholders have been patient through our investment phase. That patience is now being rewarded. Turning now to first half results. BlueScope delivered underlying EBIT of $558 million in the first half, up $249 million on the prior corresponding period. This result demonstrates the strength and diversity of our portfolio. We achieved solid profitability despite historically low Asian steel spreads. ROIC remained stable at 8.1% as we progress our major capital investment program. Reported net profit after tax was $391 million, and we finished the half with net debt of just $2 million, essentially an ungeared balance sheet. On capital management, and I'll come back to this in detail. As I noted earlier, we're planning to deliver $3 per share in shareholder returns in the 2026 calendar year. Looking ahead to the second half, we expect underlying EBIT in the range of $620 million to $700 million. The improvement on 1 half FY '26 is on the back of stronger U.S. steel spreads and improved sales volumes, which offset the impacts from softer Asian spreads and higher foreign exchange rates. I'd also like to call out that our guidance is predicated on a $0.70 FX rate. As always, these expectations are subject to spread, foreign exchange and market conditions. As I said earlier, BlueScope is a manufacturer built with strength and built to win. We have high-quality assets, leading brands and exceptional people with deep steelmaking and manufacturing skills. Our job is to accelerate execution and ensure we capture and deliver the full value of what we've built. We're organizing our work around 3 core themes. First, customer value creation. Customers are at the heart of everything we do, our products, our service, technical capability and reliability. We must continue to earn our customers' trust and repeat business. Second, operational excellence. We'll continue to focus on productivity at every level of the organization, revenue, manufacturing, functions, capital efficiency, every dollar counts. Third, shareholder value delivery. As we move from investment to returns, we're strengthening cash generation, putting our resilient balance sheet to work and rebasing shareholder returns substantially higher. Our major project pipeline is nearing completion, and this is what sets us up for the future. The North Star debottlenecking is progressing well across all 9 project components. Now this will unlock an additional 300,000 tonnes per annum of capacity at our best-in-class mini mill. The new Western Sydney metal coating line, MTL 7, is nearing completion following weather delays with start-up expected around the middle of the year. The new metal coating line adds 240,000 tonnes of coating capacity to support continued strong demand growth for COLORBOND and TRUECORE Steel. The Port Kembla plate mill upgrades are on track and will enhance our product and service quality, enabling us to provide our customers the product specifications and quality they demand. The New Zealand electric arc furnace is in cold commissioning with hot commissioning expected in the coming months. The EAF will transform the operating model for New Zealand, improving demand response capability and lowering costs. The #6 blast furnace reline and upgrade is progressing well. Outperformance of #5 blast furnace provides us with strong commissioning flexibility targeted for the second half of this calendar year. And we're getting ourselves ready for the future. The NeoSmelt joint venture, which BlueScope is leading, aims to develop the technology that allows Pilbara iron ore to be converted into molten iron using lower emissions direct reduced iron technology rather than the traditional blast furnace route. The feasibility study for the project is progressing well. This slide captures the core of our value proposition. We have high-quality assets, a resilient business model and significant upside. There are 5 key drivers of our accelerated value delivery across growth, operational excellence, land realization and shareholder returns. This is really what sets us up for the future. Let me take you through each of these value drivers. Our growth initiatives are targeting a $500 million EBIT uplift by 2030. In North America, we're targeting more than $200 million in earnings improvement. And as I mentioned, the North Star debottlenecking is well underway, and we're progressing our coated and painted strategy, including the BCP turnaround. In Australia, we're targeting more than $125 million in earnings improvement. COLORBOND and TRUECORE steel demand continues to grow and will be supported by the new capacity for Metal Coating Line #7. This is consistent with our broader strategy of premium and branded products. And also, just let me make the point that this year marks the 60th anniversary of COLORBOND and nearly 100 years of steelmaking at Port Kembla. In Asia and New Zealand, we're targeting around $150 million of improvement, particularly through value-added products. And in New Zealand, the EAF model creates new opportunities as it's commissioned. Our existing $200 million cost and productivity program is progressing well. We've now delivered $190 million of annualized benefit, up from $130 million at the end of FY '25. And you can see the breakdown of the cost initiatives for the half just gone on the pie chart. Our new $150 million cost reduction program is now underway, and this is about creating a simpler, leaner, more agile BlueScope. We're streamlining leadership teams and functional areas and rationalizing activities across the business. The full set of initiatives are targeted to be in place by 30 June this year with the full run rate delivered in FY '27. Importantly, this work provides a platform for further simplification and productivity improvements. Now on to property. I want to make the point that our surplus land portfolio of around 1,200 hectares is in sought-after industrial locations with port logistics and energy infrastructure. And the majority of the land is already appropriately zoned and able to be developed. We're accelerating realization through a dual work stream approach, firstly, by accelerating the early wins. In the first half of this year, we agreed to sell 33 hectares of West Dapto for $76 million, which will deliver more than 350 residential lots. We've also put in place a ground lease at Glenbrook in New Zealand for a 100-megawatt battery storage facility. And we're now commencing a process for a 65-hectare logistics hub at Western Port. This is already appropriately zoned with attractive logistics infrastructure, and we're underway in our process to find a development partner. In parallel, our second work stream, we're advancing broader partnership structures, including assessing a master developer partnership across the balance of the surplus land portfolio. This brings me to capital management and shareholder returns. BlueScope's more resilient earnings base and stronger cash flows allows for an evolution of the settings in our financial framework. We're putting the balance sheet to work and rebasing shareholder returns substantially higher. We'll now target net debt of up to $1.5 billion with the ability to move above that if needed. And we've revised the shareholder distribution target to at least 75% of free cash flow, up from 50% previously. That means we're enabling strong returns on an ongoing basis. For this calendar year, we're planning to distribute $3 per share. This includes the $1 per share special dividend announced in January, $1.30 annual ordinary dividend level, starting with a $0.65 per share interim dividend in the first half. And this will then be topped up with a $310 million on-market buyback program or other return method equivalent to $0.70 per share. I'll now hand over to David Fallu to take you through the regional performance and detailed financials. David?
David Fallu: Thanks, Tania, and good morning, everyone. Before running through the detail of the business unit performance, you can see from an overall group perspective, the benefit of our diversified portfolio, placing us in a strong position, both financially and operationally. That's also thanks in no small part to the incredible efforts of all our people across the regions, which continues every day. Turning to ASP. Australia delivered underlying EBIT of $122 million, down from $130 million in the prior half. The result reflects softer realized spreads on lower domestic and export pricing with benchmark Asian steel spreads remaining depressed through the half on the back of export levels from China. In this environment, we were still able to grow domestic dispatches, increasing to 1.1 million tonnes, largely driven by residential and nonresidential construction. COLORBOND steel sales performed well, remaining robust at 322,000 tonnes. Cost escalation was offset by improvement initiatives and supported by a one-off $22 million retrospective tax credit. Moving to construction demand. Both dwelling and non-dwelling now represent over 3/4 of our domestic volumes. We continue to see strong demand in alterations and additions and the nonresidential pipeline across a range of industrial uses remains solid. We've spoken previously about the importance of mix and our strategy to shift more volume to domestic sales and more of those sales towards value-added and premium branded products. And you can see we've continued to make progress in this respect. Pleasingly, the long-term trend is apparent, particularly with COLORBOND steel volumes, which are up 25% on the first half of 2016 and TRUECORE steel is up 155% over the same period. And these have been critical to supporting ASP's earnings at low spread levels. North America showed the strength of this market and our strategic position within it, with underlying EBIT of $447 million, up $115 million on the prior half. North Star delivered EBIT of $321 million on significantly stronger realized spreads. The business again operated at 100% utilization of available capacity and achieved a new daily production record during the half as debottlenecking projects increased capacity. Buildings and Coated Products North America delivered EBIT of $129 million. BlueScope Buildings improved materially on higher volumes. BCP's performance improved as turnaround efforts continue. However, it remains loss-making in line with expectations. The U.S. economy is steady with resilient consumer activity and key end markets showing demand at healthy levels. Nonresidential construction is plateauing near historically elevated levels. Auto demand remains solid and manufacturing indicators are showing positive signs. Turning to Asia. We delivered underlying EBIT of $97 million, up $27 million on the prior half. The stronger result was driven by improved cost performance and effective pricing management in Southeast Asia, combined with higher premium volumes across the region. Pleasingly, this performance was broadly based across our geographies with improved performance in Indonesia, Malaysia and Vietnam and continued strong performance in Thailand. China's results were higher on typical seasonality, although softer than the prior corresponding period given China's soft domestic economic conditions. And on the 31st of December, we completed the sale of our 50% interest in Tata BlueScope Steel to our joint venture partner, successfully concluding our investment in this region. New Zealand and Pacific Islands recorded an underlying EBIT loss of $18 million. Performance was impacted by the EAF transition, including increased raw material consumption and stock build activity to cover commissioning. Electricity costs remained elevated, which will be addressed once the EAF is operational with the first power contract, which commenced in December this year. Domestic dispatches were stable as macroeconomic conditions remain soft. Pleasingly, we've seen a similar dynamic to what we see in Australia with an improved mix of value-added product sales, particularly the likes of COLORSTEEL. Turning to group EBIT variance. The slide shows the key drivers for our first half result compared to both prior corresponding period and the prior half. Both comparisons show similar dynamics with stronger spreads, particularly in the U.S., improved volumes and lower conversion costs, including from our cost and productivity program. Looking now to the second half outlook across the regions. North America is expected to deliver a result approximately 15% up on the first half of FY '26, largely on the benefit of higher spreads at North Star. Australia is expected to deliver a lower result against a backdrop of challenging regional spreads and nonrepeat one-off items. Asia is expected to deliver a softer result on typical seasonality with Chinese New Year, and we expect New Zealand will return to profitability as the EAF is brought online. Corporate costs are expected to be the same, noting the West Dapto sale now sits separate from ASP in this area of our reporting. Now to the financial framework elements. Our financial framework is designed to drive performance and disciplined capital allocation. This has been critical during a unique period of capital investment. As we now have line of sight to the conclusion of this CapEx program, we have the opportunity to adjust settings with a shift to substantially higher cash flow and shareholder returns. On returns, we're targeting ROIC above our cost of capital through the cycle and maximizing cash generation. Group ROIC has improved to 8.1% with North America at 13.6% and Asia at 17.5%. Cash flows are lower, reflecting the capital investment program, which is beginning to roll off. From a balance sheet perspective, it remains robust to support investment and returns. We will now target up to $1.5 billion in net debt, up from the previous $400 million to $800 million range. This reflects our confidence in the earnings base and cash generation of the business. At the half, net debt was just $2 million with liquidity of approximately $3.2 billion. As Tania noted, on our major project pipeline, we are investing in our business to deliver sustainable earnings and growth. Capital expenditure was $681 million in the half as we commence -- as we progress our major projects. You can see CapEx peaking for the full year this year and stepping down in the first half of FY '27 as these projects complete. As flagged earlier, on capital management, we're rebasing shareholder returns substantially higher, commencing with $3 per share in the calendar year for 2026 and targeting at least 75% of free cash flow to shareholders going forward. As you can see on the slide, this is a substantial step-up in returns and will deliver overall distributions of more than $1.3 billion to shareholders in the 2026 calendar year, with the expectation for an ongoing higher level of shareholder returns moving forward. And with that, I'll hand back to Tania, and we'll be here for Q&A at the end.
Tania Archibald: Thank you, David. Before we close, let me thank Mark Vassella for building the foundation for BlueScope's new era. His exceptional leadership over the past decade leaves BlueScope in outstanding shape with a transformed portfolio, a robust balance sheet and a clear strategy for growth. I'm honored to build on that foundation. I'd now like to summarize our presentation this morning. We're approaching an inflection point at BlueScope. The investment phase is ramping down and delivery of value to shareholders is ramping up. BlueScope is becoming simpler, leaner and more agile. And we're accelerating the realization of value from our 1,200-hectare surplus land portfolio. As a result, we're increasing our shareholder distribution target to 75% of free cash flow, starting with a plan to deliver $3 per share in returns this calendar year. This really is a new era for BlueScope, and we've only just started. We'll now open up for questions.
Operator: [Operator Instructions] Your first question comes from Ramoun Lazar from Jefferies.
Ramoun Lazar: Just a couple of questions for me. Just maybe starting off with ASP and that result in the first half. I think on an underlying basis, it looks about $100 million of EBIT ex GST benefits versus the $130 million in the June half of last year. Spreads were pretty similar around that $200 a tonne level and domestic volumes are also pretty similar. Just wondering what's the -- what are you seeing there that's driving that step down in the earnings sequentially? And then obviously, there's a weaker guide into the second half. Just keen to get a bit of color on what you're seeing in ASP a bit more.
Tania Archibald: Ramoun, nice to chat. The -- I think fundamentally, it's the macro environment that we're dealing with, and it's fundamentally having pressure on prices. And it goes back to the point that we've made around very large amounts of product coming out of China, exports coming out of China. Normally, you would see something like 50 million, 60 million tonnes coming out on export markets. I think we're now well north of 120 million tonnes. That ongoing pressure, which has been there for a couple of years now, it has a fairly significant impact. on the environment, just the general environment that we're operating in. I should also point out there's an element of impact to export prices that we can also achieve, and it goes back to the same issue. So I actually think if you put it in context, the Australian performance has been outstanding because to be at bottom cycle spreads for such an extended period of time and still maintain the level of profitability that we have is a great result.
Ramoun Lazar: Yes. Got it. And just on that, I guess, those realized prices that are being impacted, are they also at sort of cyclical lows in terms of import parity price or export parity price that you're achieving?
Tania Archibald: Yes. So what I'm referring to is the more IPP-based products, the commodity products clearly linked to the regional pricing, and they are at low levels in line with the benchmark prices that we put out there.
Ramoun Lazar: Okay. Good. And then just one, maybe, Tania, keen to get your perspective. It's been about 6 weeks now since the Board rejected the SGH approach. You've obviously come out with a number of initiatives to step up shareholder returns since then. Just wondering maybe on asset realization or running a process to sort of break up the business or try and realize value from parts of the business. Is there anything you can share with us around that and what the Board is doing at the moment?
Tania Archibald: Probably the way I think about it is in 2 streams. One is we are fundamentally focused on running the business well, and there's clearly a series of initiatives that we've laid out in the materials. Of course, there's the cost and productivity targets that we've set there. There's the delivery on the growth and there's the acceleration of the land value. And of course, then as we ramp down the CapEx -- that obviously frees up quite a bit of capacity in the balance sheet when we've got the benefits of that earnings improvement coming through, and we want to put that into the hands of the shareholders. But of course, more broadly, yes, we continue to evaluate all options and whatever it is that we can to realize value for our shareholders.
Operator: Your next question comes from Harry Saunders from E&P.
Harry Saunders: Firstly, just wondering if you can provide more color on where the $150 million of additional cost out would come from? And perhaps what could we expect in FY '27 itself? So not the run rate, but what you could see dropping through and whether we should be viewing this as -- some of it is an inflation offset or fully incremental?
Tania Archibald: Thanks, Harry. So in terms of the $150 million, it will come from right across the entire portfolio. This is actually something that we've been working on for quite some time. We started at the back end sort of in the second half of last year. It comes from right across the portfolio. It's not targeted at the operational, the frontline teams. It's more around corporate administrative support and functions. It will be a combination of headcount and spend. But really, what it reflects, Harry, is we've been making investments in capability across the business for quite a number of years now. There's a lot of capability that's now embedded within the business units. And what that allows us to do is simplify some of the corporate structures and take advantage of the capability that we have established across the organization. In terms of the run rate, the plan is that we'll basically be at the full run rate of $150 million by FY '27, the start of FY '27. It is a gross number. So there will be some level of inflation that impacts that over time. But basically, we're targeting to have that $150 million by FY '27, start of FY '27.
Harry Saunders: Start of '27. So the majority of that should actually be seen in the P&L. And therefore, where could you take that corporate cost line to?
Tania Archibald: I can't comment specifically on the corporate cost line.
David Fallu: Yes. Harry, I might jump in. As Tania mentioned, that cost support is across all of the businesses. So I won't specifically sit within the corporate cost line, particularly areas like external spend reviews and things of that nature. But I guess we would expect a typical inflation build within the FY '27 year. And so this will be obviously well in excess of that.
Harry Saunders: Got it. And just a follow-up. Wondering if you could provide a time frame on giving a surplus land valuation across the group and potentially what could that Western Port value gain on sale look like potentially if that is to be sold?
David Fallu: Yes. So look, in terms of that parallel pathway that Tania referred to, Harry, the most immediate steps have been the West Dapto sale and then the process will run across the 65-hectare logistics hub in Western Port. As you've seen with the West Dapto sales, these are from our surplus lands and have been held at historical costs. So it's a very low cost base and the majority of consideration falls to the bottom line as profit. In terms of an overall valuation for the surplus land, I've seen various reports out there. As we go through the second limb that Tania outlined around the master planning and partnership process across the balance of our surplus land. That will give us an opportunity to provide a more detailed view around valuation of that land, but we need to go through that process first.
Tania Archibald: And maybe if I can just add to that, Harry, just in terms of the Western Port parcel, there's some data points that I think you can access some relevant development around Cranbourne, some logistics activities around there. So if you have a look at the developments around Cranbourne, which I think is just to the north, that will give you some good data points in terms of the Western Port potential valuation.
Operator: Your next question comes from Daniel Kang from CLSA Australia.
Daniel Kang: Just wanted to hone in on the sustained low Asian spreads and the domestic Aussie business, which continues to be weighed down by it. Just wondering if you can discuss where you see any available opportunities to lower the breakeven cost at Port Kembla and to reduce that earnings drag.
Tania Archibald: Thanks, Dan. Nice to hear from you. I think in terms of the sustained low Asian spreads, I mean, at the end of the day, I think it will eventually recover. I mean the steel industry does tend to be quite cyclical, and this is a longer-than-normal cycle that we are seeing. In terms of lowering the breakeven cost, that's something that we work on every day. The cost and productivity programs, particularly in the manufacturing space do a lot of the heavy lifting, and it comes from a broad number of areas, whether it's raw materials, optimization, whether it's energy optimization, whether it's the spend that we incur, how we manage our maintenance spend, et cetera. So -- and the functional costs and the corporate costs overall. So there's a lot of work that goes on around cost and productivity. But from our perspective, what we're also focused on is growing the value-add part of the portfolio. So it's one thing to have that highly competitive cost base. It's another thing to make sure that we continue to invest and grow the value-add part of the portfolio. And that's why Metal Coating line #7 coming on later this year is very important to us because it's a critical lever in supporting the growth we have, the ongoing growth we have in COLORBOND and in TRUECORE.
Daniel Kang: Swinging over to the U.S. Just interested in your thoughts on the U.S. potentially scaling back on steel tariffs. And then just more broadly on the U.S. market, thoughts on upcoming new capacity and, I guess, potential further U.S. industry consolidation.
Tania Archibald: Yes. So I think on the tariffs, that was a bit of a curious one that popped up over the weekend. I think the first headline said something like the steel tariffs were going to be rolled back. And I would stress, I think it's all speculation at this point. And then there was a little bit of detail that started to float around across Saturday. It's really focused on what's referred to as derivative products, which is products imported into the U.S., which contain steel. We've seen various reports, which would suggest that for those products that contain small amounts of steel, they would potentially have a lower tariff. I saw one number of 15% -- but then, of course, going up to products that contain essentially almost 100% steel, so steel pipes could potentially have a tariff of 100%. So it was a little bit curious. At the end of the day, it's a bit of a peripheral issue. North Star does not compete based on tariffs. It's a privileged asset. It's a highly productive asset. It's well located. It's close to its customers. It's close to its raw material source, and it competes on its merit, not based on tariffs. So again, I think it is a bit of a peripheral issue. In terms of the U.S. market, in terms of new capacity. The U.S. is still fundamentally short of steel. It's still an importer of steel. And so -- and it's a very large, I would call it, a large rich, deep market. It's relatively well protected even today's standards might be relatively high, but it's still always been a relatively protected market, and it's one that we see a lot of opportunity and notwithstanding some of the additional capacity that's coming online. And of course, there's always been capacity that's come offline over the years, including a number of the blast furnace operations. So I think it's a great place to make and sell steel.
Operator: Your next question comes from Chen Jiang from Bank of America.
Chen Jiang: First question on your capital management program, the target of the net debt target up to $1.5 billion with the ability to move higher when needed. I guess you will be finishing your investment cycle, heavy CapEx cycle end of FY '27. I'm just wondering what's the rationale of increasing net debt target from the previous $400 million to $800 million, given your CapEx will be off in 18 months' time. Is this mainly driven by, I guess, increasing capital return program to shareholders? If you can provide any color on that, that would be great.
Tania Archibald: Thanks, Chen. I think what it goes back to is we've been involved in a large-scale capital program across many years now. And if I go back to 2018, when I first became the CFO, we started putting a bit of capacity onto the balance sheet back then. You may recall we ran net cash for quite a number of years because we were very mindful of the reline coming up. We're very mindful of the major expansion projects that we had in the pipeline in the U.S. and other activities that we wanted to undertake, including, for example, the metal coating line #7 in Australia. So as we've gone through that very major capital program, we can now see the light at the end of the tunnel. We're coming into the final phases of the reline project, Metal Coating Line #7. We've obviously passed through the major expansion at North Star. There's still some level of expansion activity that's obviously still going on at North Star. We've built the new pipe and tube mill at Unanderra. The plate mill is advancing well. But we can see the back end of that unusually large and long-term capital program starting to ramp down. And as we ramp down the spend, what we're looking to do is ramp up the returns to shareholders. And we felt it was a nice thing to signal as part of the CEO transition. Mark obviously put a lot of effort into those investments, those capacity expansions and improving the resilience of the business right across the portfolio, including New Zealand. But as we -- I'm now the beneficiary of that. So we're ramping down the CapEx and ramping up the returns to shareholders. And of course, when you come to the balance sheet, you simply don't need that level of capacity sitting on the balance sheet given the reduction that we see in the CapEx profile. We've got plenty of capacity to fund the remaining capital investments that we do have, notwithstanding the low spread environment that we have in Asia. So I think really the CEO transition, we see it as a bit of a change in the era as we ramp down the CapEx and we ramp up returns to shareholders. And clearly, what we're trying to signal here is that we want to place more value into the hands of our shareholders. Our shareholders have been very patient for a long period of time as we've undertaken those very significant investments. So it's a good position to be in.
Chen Jiang: Sure. I understand, Tania. So to summarize, you are willing to leverage up your balance sheet a little bit. It is mainly because the CapEx cycle is off, return will be higher. Is that how I should summarize?
Tania Archibald: It's probably worth pointing out, as much as it's $1.5 billion, that still includes leases. And on a normal mid-cycle basis, it's only about 1x leverage. So this is a pretty prudent balance sheet. At low cycle spreads, it will be something like 1.5x. So this is a very prudent balance sheet. I think it's what you should expect for a company of the size and nature of ourselves, particularly as we come into the back end of a major capital investment program.
Chen Jiang: Sure, sure. Maybe a last question on your -- the new annual ordinary dividend per share increased -- well, just more than doubled from the previous $0.60 per share per annum now to $1.30 per share. I'm just wondering if this $1.30 per share annual ordinary dividend is derived from the new capital allocation framework, returning at least 75% of free cash flow to shareholders. I guess that 75% of free cash flow to shareholders also includes buyback. Is my understanding correct? Is that $130 plus buyback, which kind of equals to 75% of free cash flow?
David Fallu: Yes, that's right, Chen. Although I'd say the ordinary dividend positioning is still very much in line with a view of a level of ordinary dividends that we're able to pay at all points in the cycle with alternative forms of distributions enabled to achieve that minimum level or go beyond should we determine. So really, the ordinary dividend component is set around being paid at any point in the cycle.
Operator: Your next question comes from Paul Young from Goldman Sachs.
Paul Young: Good to see you're on the front foot with the step-up in shareholder returns, which all makes sense. Tania, first question is on the Aussie business and the downstream and actually the $125 million EBIT target by 2030 within the $500 million total at the group level. Just looking at the COLORBOND and TRUECORE sales in the half, which were pretty resilient considering that resi is not really firing in Australia at the moment. And actually, I think your volumes in the half were actually run rating at a higher rate than your CY '26 volume targets. I understand Metal Coating and MSM is late a little bit late, but neither here nor there. But just curious around the volume forecast you put out a bit to the market. And also what margin you have actually in that number? Because it actually, to me, actually seems a little bit conservative. Just wanted you to comment just on the $125 million and how you think about considering you're on the front foot, just how conservative you think that is or et cetera?
Tania Archibald: Thanks, Paul. Nice to chat. Look, it's clearly a core part of our growth strategy for the Australian business is continuing to grow the premium branded value-add part of the portfolio. We're making fantastic inroads with COLORBOND. I think there's a really big opportunity for TRUECORE. We're obviously making very good progress there. We like to think that over time, that with TRUECORE, which is a very large potential market, addressable market, we'd like to think that we can get to similar share levels over time as what we have with COLORBOND. We've got a very compelling value proposition. But of course, we do need metal coating line #7 to be in place because at the end of the day, we're periodically short on capacity now. And so this is really about addressing the shortfalls that we have at the moment and underpinning the growth going forward. In terms of whether they're conservative, I don't know. We sometimes do get being accuse of conservative. I think we're quite comfortable with the growth projections that we have out there. There's probably some other elements that also sit there beyond just straight COLORBOND and TRUECORE, but they're the main ones that sit within that growth outlook.
David Fallu: Yes. I think, Paul, the only piece I'd add is when we put these targets forward, we've done that with a sort of mid-cycle view of market. So to the extent to which you have a view that market continues to grow or expand, that will be an opportunity for us.
Paul Young: Okay. And then secondly, just on the portfolio tenure. I know you made some comments on how you look at or how the Board is viewing the strategy going forward and just the review. But just specifically on the Asian business, and it's been really a conversation for the last decade about whether BlueScope keeps this or not. You've just sold India, I think, for a pretty decent premium to book or probably a decent premium to NPV. So if you look at the carrying value of the Asian business, sits around $1 billion or so. How do you think about possible monetization of that business through either JV partner, Nippon or someone else? And/or how do you think about from a replacement value perspective, just to sort of see how you look at the potential hidden value of that Asian business?
Tania Archibald: Yes. It's interesting you use that phrase hidden value. the ASEAN business, in particular, sits in one of the fastest-growing regions of the world. And what we have is a footprint that is unparalleled. It would be extraordinarily difficult to replicate that today. I think Connell and the team are doing a fantastic job in terms of the strategy that they have. It's very much a premium branded value-add strategy. We think there is enormous opportunity that sits in that market. I, of course, am very familiar with that part of the world. I spent 8 years within the ASEAN region. And so we're actually quite confident with the value that can be derived from that part of the portfolio. I think what's also important to add is there's plenty of capacity that sits within that business. It doesn't need any significant amounts of capital to be injected in it. There's a lot of upside there. So we're quite confident in how we think about the business. I think the India exit, I think at the end of the day, India is a good market -- was a good market to be in, but we felt it was time to move away because there was more value to be had in the hands of Tata, and it was time for us to step back and simplify the portfolio across Asia. So I think at this point in time, we are very comfortable with the position that we have. We're well positioned in every major Asian economy. And I think that's going to stand us in good stead going forward.
Operator: Your next question comes from Peter Steyn from Macquarie.
Peter Steyn: Perhaps just keen to color in the property partnership process a little bit better. If you could give us a bit of a status update on how you're thinking about partnerships, what level of engagement, how far along the process you are and whether that sort of means that some of the realization opportunities are perhaps a little bit closer than what market participants would tend to think. Just keen to understand at a deeper level of detail, please.
David Fallu: Yes. Thanks, Peter. In terms of -- from an overall perspective, the -- I guess, the short term has been around those parcels of land that have been readily available. And that was West Dapto, and we've announced today the 65 hectares at Western Port, which is a discrete logistic hub opportunity. And obviously, we've been progressing for a number of years opportunities within the site adjacent to Port Kembla and Glenbrook in New Zealand. And you've seen the benefit of some industrial leases that we put in place there. In terms of the master planning and partnership opportunity, that's a process that, again, we've been largely working internally, and we will look through the course of this half moving to external engagement with potential partners to work through what that may look like. Now that will be a full spectrum of opportunities in terms of how we approach partnership there from ownership and development, joint venture to potentially some other realizations. But it's quite important to recognize that as we've said for a while, those sites are co-located to our operational sites that will continue to be operational sites. And so we'll want any sort of activity there to be sympathetic and ideally adding value to those regions through leveraging off the infrastructure that we have at those sites. So that's really how we sort of plan to dual track the property opportunity.
Peter Steyn: I guess it's fair to say that you do seem to have a greater sense of urgency on trying to bring these to some form of realization. Does that mean that your strategy potentially alters in favor of realization as opposed to development in any way?
David Fallu: I don't think so. I mean, clearly, the shorter-term opportunities have been more opportunistic in nature, and you've got the ability to do so. But by and large, those -- the majority, the vast majority, the sort of remaining 1,100 hectares is something that we will continue to take a very important long-term approach because of its proximity to the operational sites. I think in terms of timing, we've had the ability to leverage off work that's been going on for a number of years now, much in the same way as we've got the opportunity to leverage off the capital investment side that's coming to a conclusion.
Tania Archibald: It's probably fair to say that having Michael Yeend on the team has really helped turbocharge everything. I think Michael has been with us for a year now. He's a very experienced property developer, and he's been the driving force behind the acceleration that you've seen. So this is not something that we dreamed up over the last couple of weeks. This has actually been in the works for the last 12 months and again, leveraging off the work that has been going on for a number of years.
Peter Steyn: Tania, perhaps a last quick question. Just thinking about your medium-term CapEx outlook, how do you think about the guardrails of what you'd be spending '27, second half and beyond?
David Fallu: Yes. So look, I guess we've kind of sent out the guardrails for next half and the half thereafter. As we -- you will continue to see the sort of glide path of that coming down to more normalized levels. That being said, to the degree to which we can find opportunities for growth, we will consider those investments with the business. But effectively, you're seeing that CapEx reverting to more of a sustaining level of CapEx given the significant investment that we've undertaken through that period.
Operator: Your next question comes from Lee Power from JPMorgan.
Lee Power: Tania, I think you mentioned about the 150 that you said it was a gross number. Are you willing to give us a net number? And then maybe for ASP specifically, do you think this gets steel cash breakeven below $200 a tonne?
Tania Archibald: No, I can't give you a net number. Thanks, Lee. But it's obviously a very significant opportunity that sits in front of us. In terms of ASPs component, yes, there will be a weighting towards ASP. That's obviously a large part of the portfolio. I think the key thing is that we're quite confident or very confident in our ability to deliver on that net number, and you should expect to see that in the results at the start of FY '27.
Lee Power: I had to ask. And then you've had a couple of questions on realization ASP. Like if I look at the -- it was a pretty big headwind in the second half. Like it looks like on commodity product, it was down $100 a tonne from where we were in August 2025. I get like the moves in freight and you've obviously got a value-added business. But like what are the other dynamics we need to think about with the realization piece. So is it just literally when HRC recovers, you get more freight and therefore, the realization recovers at the same time? I just kind of struggle a bit with the moving parts because it's clearly been a bit of a headwind on the last 6 months.
Tania Archibald: Part of the issue, I think we deal with Lee, is you're dealing with the law of low numbers. It doesn't take much of a swing in any one of a number of moving parts, and it can have a fairly significant impact. I think FX is the other component that needs to be considered. So there's FX impacts. There's freight movements that go up and down. And again, it is an intensely competitive environment given the sheer scale of exports coming out of China. So any number of those factors or a combination thereof can have a significant impact on the numbers.
Lee Power: Okay. That makes sense. And then just a final one. I mean it doesn't sound like you think that the $1.5 billion net debt target is particularly like a stressed balance sheet and not out of whack with your peers. Can you just to give a range, like where do you think the other end of the acceptable range would be nowadays, if you're willing to talk to that?
David Fallu: I think if you look at a sort of broad view of the industry, Lee, you'd be sort of seeing 2x is probably where the average sits. We've sized this at 1.5x at the bottom of the cycle, about 1x through mid-cycle.
Tania Archibald: Really the other -- I think the key principle here is we're very well aware of the nature of the industry in which we operate, the cyclical nature of it. We recognize that we need to maintain a resilient balance sheet, and we're certainly not going to be confusing or compounding financial leverage with operational leverage. So we believe that we're taking a typically prudent approach to the amount of leverage that we can put on the balance sheet. If we had to go further, I think we could readily do that. We'd simply have a plan to bring it back in over time. So we're quite comfortable that what we've put out there is readily achievable.
Lee Power: Your next question comes from Scott Ryall from Rimor Equity Research.
Scott Ryall: Hopefully, my 2 will be relatively quick. Tania, you -- in the -- well, and maybe, David, I guess, on Slide 26, you talk about the BCP business expected to deliver reduced loss through ongoing improvement. I guess I'm just wondering what -- in terms of the glide path for that business, is there a time where you'd be willing to say you can take that out of being a loss-making business, please?
Tania Archibald: Thanks, Scott. Nice to chat. The reality with BCP is we're probably a couple of years behind where we wanted to be. I've spent quite a bit of time in the U.S. recently. I've been there twice in about the last 8 weeks and spent a lot of time with the BCP team. They've got a new leadership team. I'm very happy with the team that's been put together. They've got a very clear plan in terms of what they're working on. The market is still there. There's absolutely a good market that's sitting there, but we've got to get some investments. And when I say investments, I'm talking mainly about resource investments and sort of low-level things that we need to fix, but there's just a number of them. And so we're very, very focused on uplifting the operating performance of the lines to improve and get to the quality and service delivery performance that we want. I'm expecting to see significant progress made across the next 6 months. And so we'll obviously give you an update at the next results. I should say that we have pretty clear expectations about what that business should be contributing as part of the 2030 growth targets as well. The value there is -- the value opportunity there is very significant. So BCP largely operates at the moment as a tolling business. What we've been introducing is the single bill offer. In terms of the opportunity to introduce the branded offer, again, this is a very large market, and we see very significant opportunity there over time.
Scott Ryall: Yes. But you're still -- the reality is to get the volume growth, which is what you need presumably to turn it around, you're still doing the quality investments and that will just take some time, right? You'll update us every 6 months, but that will take some time.
Tania Archibald: We will. And I should say there's been a lot of hands on deck, in particular, over the last 6 to 12 months has been a huge effort in terms of supporting the business and drawing upon the broader BlueScope network. So we're quite -- I'm quite pleased with where we are. I think we see quite an improvement. We just got a way to run yet.
Scott Ryall: All right. Good. And then you've obviously had a lot on your plate since you took over, reformulating strategy and working with the Board on approaches, et cetera. In none of this, I've seen any mention of Whyalla. So I was just wondering if you could update in terms of what BlueScope's view on the Whyalla process is at the moment, please?
Tania Archibald: Yes. So Whyalla still remains an option for us. We're still participating in the process. We're still engaged with that process. But at the end of the day, it still has to make sense for shareholders. I mean the primary reason why we're looking at Whyalla, of course, is because of the resource base that sits there, the types of ores there that could be consumed down the track in some form of direct reduced iron technology. So it is an interesting option. We continue to be very engaged with the consortium that we put in place a while back now. So we're continuing to have some good conversations. But at the end of the day, we need to think about Whyalla as an option that ultimately has to make good commercial sense.
Scott Ryall: And do you have a timing for when that -- is that expected to play out over the course of this calendar year, as an example?
Tania Archibald: Potentially. I think at the end of the day, there is quite a way to run with the Whyalla process. The process itself is being run by the administrator. It is probably quite a large complex issue that they're dealing with. And I think any solution will also be dependent on funding that would need to be provided by government and also the finalization of feasibility studies because you can't obviously make a decision to invest in something if you ultimately really understand the economics of it. So there's quite a way to go, I think, in the Whyalla process.
Operator: Your next question comes from Owen Birrell from RBC.
Owen Birrell: I just wanted to drill into some of the wording that you've put into Slide 12, which is that targeted growth to 2030. And mostly just that headline, which says that the $500 million EBIT uplift to 2030 is to be supported by macro normalization. I just want to understand what you mean by macro normalization. I'm assuming that doesn't include any sort of spread recovery, but I am assuming that, that includes some sort of building or construction market recovery. Just wanted to confirm that that's actually the case. And then we look at that $500 million EBIT target, how much of that is actually reliant on a building market or construction market recovery?
David Fallu: Yes, Owen. So in terms of the $500 million uplift, that's separate to spread recovery. And what it assumes is a mid-cycle end market use. So primarily where you would be seeing the material change would be in relation to the Australia and New Zealand markets, which would still be at a relative low point in terms of residential construction activity. So really, that's what's meant by that comment there.
Owen Birrell: Are you able to go into that number then? You're talking about, call it, $300 million from Australia and -- or actually, what's that -- you're probably looking at around about $200 million from Australia and New Zealand. Of that $200 million recovery, how much of that is just housing market recovery versus operational change that you guys are undertaking?
David Fallu: The majority of that delivery will be operational change. So the way to think about it, Owen, if you look at total domestic volumes, I'd describe that as at a relatively low level of activity now, kind of if we were to sort of move towards where it's been historically, it's been at sort of that more of that 2.4 million, 2.5 million tonnes. The increased volume over and above that is really a reflection of share.
Owen Birrell: I'm not sure if you get where I'm going at, but like in terms of -- if the market just normalizes by itself, won't you deliver the $200 million target ex any other sort of investment you make?
David Fallu: Look, if the market normalizes, you will get a benefit from the fact that we've got a higher share position, but there is still an element of growth in share volumes. If you look at what we're trying to achieve in TRUECORE, within New Zealand, I agree, the majority of that is coming from the normalization in the market given the investment in the EAF has largely been completed.
Tania Archibald: Of course, we do need the capacity expansions to be in place to support that growth as well.
Owen Birrell: Okay. And just to confirm that this $500 million EBIT is relative to -- is it calendar '24? That's the base year.
Tania Archibald: That's it. Yes.
Owen Birrell: And can you give us an update on how much of that $500 million is actually be achieved? At this point now that we're coal at almost 2 years?
David Fallu: Look, the majority of that is really coming from sort of the North Star expansion. That's really the one that's kind of progressively comes online. The other ones really are reflective of a step change once the capacity comes online through the course of this year and next.
Owen Birrell: Essentially nothing out of Australia and New Zealand at this point.
Tania Archibald: Pretty much.
Owen Birrell: Okay. And then just I wanted to just touch just on the following slide, Slide 13, where you talk about your working capital reduction target. You're targeting a $200 million to $300 million release by the end of FY '26. Half-on-half, it's a little bit difficult for us to sort of back calculate how much of that you've actually achieved. But I'm wondering if you can give us an update on how much is to go in second half '26 to hit that target?
David Fallu: Yes. Look, the majority of that target will largely be achieved through the progressive realization of land in the BlueScope Properties Group. In terms of -- from an other area of focus is going to be around inventory. But for the FY '26 period, there's obviously the build of inventory as we go into the cutover for blast furnace 6 and the EAF commissioning in New Zealand. So following FY '26, more of that opportunity will be delivered through inventory reduction.
Tania Archibald: Yes, that footnote on 2 is very important. Yes, there will be an impact as a result of the transition. I mean it's -- you do have a bit of operational disturbance there with the transition with the blast furnace and the EAF...
Owen Birrell: Okay. So it's not necessarily going to flow through into the accounts that we will see.
David Fallu: With the exception of obviously, the realization of the properties portfolio.
Owen Birrell: Yes. Can you give us an update on that? Apologies if I missed that anywhere. But how much has been realized at this point?
David Fallu: That's being progressively realized. And in terms of that target, it would be sort of around $180 million to $190 million of that target.
Owen Birrell: Just to confirm, is that the U.S. entities that you're discussing there?
David Fallu: It is. The U.S. properties group effectively sits in stock in terms of their investments, which is obviously not where the historical cost of our Australian land bank sits.
Tania Archibald: I think there was one project that was realized in the half.
David Fallu: Correct.
Operator: Your next question comes from Charles Strong from Jarden.
Charles Strong: Just on skills and the West Coast environment, could you comment on what you've seen there? What gives you confidence about improvement into the second half and how you see that medium term?
Tania Archibald: Do you want to take that one, David?
David Fallu: Yes. So look, I think the team has seen a good opportunity in terms of managing that business through a fairly volatile level of activity. It's an import market. So it obviously had probably the most interruption from the tariff volatility. They've done a good job working through that position. And what we're seeing is they've had an ability to be able to manage the margin in their book in a far more effective way than they've been able to do it at previous periods where they've gone through weakness in their end markets. So I think that position is set up well as we move into the second half under more normalized levels of activity.
Charles Strong: Great. And then just on the North Star guidance, what are the moving parts from a conversion cost perspective? And how much should we be thinking about in terms of the energy cost impact?
David Fallu: Yes. So the team have done a good job in terms of how they've worked on raw material costs, and we've seen an improvement in those non-benchmark conversion costs that you see in sort of alloys and fluxes. And I think that's been really important in terms of how they manage to offset the increase in energy costs that they had transitioning to their new energy contract. So that's all been incorporated in that space.
Operator: Your next question comes from Will Wilson from UBS.
William Wilson: Quick one from me. It looks like healthy TRUECORE volume growth and also COLORBOND to a lesser extent in the half. Just on the new Western Sydney metal coating line coming on soon, can you just remind us of the ramp-up here from a tonnes produced perspective? And also just your ability to manage that up or down with market demand?
Tania Archibald: Yes. So the total capacity that will come online in Western Sydney is around about 240,000 tonnes. In terms of the ability to ramp it up or down, metal coating lines are pretty straightforward. I mean you can switch them on and switch them off. That's the beauty of them. So we'll obviously have a look at the market conditions as we get closer to the ramp-up. We've also got to think about crewing levels and time frames that it takes to recruit and train new crews. We've obviously got a plan that we'll start off with as we go through the ramp-up period. Generally, there's a period of around about 3 months once you get metal on strip and you work your way towards full operating conditions. But again, there's a lot of flex capability that sits within that model.
David Fallu: And Will, I think it's important to point out that we run these metal coating lines as a network. And so the opportunity is not just how we manage MCL7, but how we manage the network that MCL7 enables us to unlock with our newer lines typically being more efficient.
William Wilson: Yes. Okay. So if you wanted to, you could effectively bring on the 240,000 tonnes within 6 to 12 months.
Tania Archibald: Yes, taking into account the network comment that David just made, yes.
Operator: Your next question comes from Keith Chau from MST Marquee.
Keith Chau: First one, Tania, maybe I'm hoping this isn't just a matter of semantics, but your answer to Ramoun's question earlier in the briefing around evaluating all options to realize value for shareholders. Is it possible for us to confirm with you that you are actively engaged with third parties as suggested by the media? And I only ask just given there is another offer or there has been another offer for the group. So if we can get a clearer answer, that would be great.
Tania Archibald: Sorry, Keith, I might be about to disappoint you because we just simply don't comment on anything that might go to any conversations with any party. I think all I can do is reiterate that we continue to evaluate all options to accelerate the delivery of value to our shareholders.
Keith Chau: Okay. Second one, just on your property, maybe one for David. But David, you mentioned before that you've seen a couple of valuations or I guess, a tens of valuation on BlueScope's property portfolio. BlueScope's indicated itself that it could be worth up to $2.8 billion using West Dapto as a read-through. I guess maybe the debate is just around the sensibility of using that as a proxy for as value. So if you can comment on why that $2.8 billion has been published and whether it is sensible for A value? If not, why not? And also one of the key points of contention for property is the level of remediation costs required to get those land lots to market. So I mean my understanding is that remediation has taken place over the years as those properties have come surplus to requirements. But just if you can give us an indication of what remediation expenditures are required across the surplus property portfolio, please?
Tania Archibald: Keith, I might start off with a couple of comments, if I can. Where the $2.8 billion comes from very simply was we wanted to highlight that there is very significant value that should be attached to the surplus land portfolio. And all we did was point to what we sold Dapto for and just applied that to the rest of the portfolio. But it wasn't meant to be saying that it's absolutely $2.8 billion on the mark. What it was pointing to is that there is very significant value that sits here. And there's a broad range of opportunities. This is prime industrial land. It has fantastic infrastructure associated with it, road, rail port, energy, et cetera. And so we think there is significant value associated with that. The majority of the land has already been appropriately zoned. In terms of remediation, it's probably worth pointing out, I think it's about 1,000 hectares is actually just buffer lands. It's pads. And so it's not necessarily former sites. So yes, there is -- part of it is former sites. That's the #1 works. And the area around Port Kembla, but there's a lot more land than just that. So the remediation costs, I don't think we could give you a clear number, but I feel like they might be a little bit overblown if there's a conversation going on around remediation costs at this point, bearing in mind that most of the land is -- has not been previously used for -- in an operating environment. David, did you want to add anything to that?
David Fallu: No, look, I think that's right. And obviously, sort of the 2 areas that create a challenge around the property realization piece is rezoning and rehabilitation costs, given there hasn't been -- given it's already zoned appropriately for development, and there haven't been intense activities on any of the sites. That's why we feel we're in a position now to actually undertake those master planning partnership discussions to -- and that, I think, Keith, then gives us the opportunity, as I say, to present a more robust view around potential valuation and realization pathway.
Keith Chau: Okay. And maybe last one, if I can. The step-up in net debt, obviously, that's a big change from prior targets. We've gone from net cash position to a range of $400 million to $800 million to $1.5 billion. certainly take the point that CapEx requirements and loads ending after this year. But given the significant change in the debt target, are there any changes to the costs associated with the debt, whether that be debt or any changes in covenants on the debt load?
David Fallu: Yes. No. So this all sits within existing facilities, Keith. And if you have a look at the maturity profile that we've got, particularly with a recent extension, that's not going to have an implication for us over the short or medium term.
Tania Archibald: And let's be clear, we're still aiming to maintain investment grade here, and it's still a pretty prudent level of debt for an organization of our scale.
Operator: There are no further questions at this time. I'll now hand back to Tania Archibald for closing remarks.
Tania Archibald: Thank you, everyone, for joining us today. I know you've got an exceptionally busy day. Please reach out to the IR team for any questions. And of course, David and I and the team, we look forward to engaging with you over the coming weeks. Thank you.