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Graham Andrew Chipchase: Good morning, everyone, and welcome to Brambles Full Year Results Presentation for FY '25. I'll begin our presentation today with an overview of our results for the financial year, including key highlights and achievements. I'll then give an overview of the operating environment before sharing an update on our transformation program, including progress with Serialisation+. Finally, I'll cover our FY '26 outlook before passing to Joaquin's to take us through a detailed review of our financial performance. Starting with our FY '25 highlights. We have again delivered a strong set of results with our financial performance, highlighting operating leverage and a step change in cash flow generation. For the full year, we achieved sales revenue growth of 3%, with a 10% increase in underlying profit and exceeded USD 1 billion in free cash flow before dividends for the first time. Our sales revenue comprised a mix of cost to serve recovery and a return to volume growth, where momentum in net new business wins helped offset lower like-for-like volumes as consumer demand remains subdued. Meanwhile, our underlying profit continues to benefit from asset efficiency and supply chain initiatives and ongoing discipline around overhead costs. These higher earnings as well as lower capital expenditure from the benefits of our asset productivity initiatives contributed to the significant improvement in free cash flow before dividends. The strength in our performance has allowed us to declare a total dividend of $0.3983 per share, representing an increase of 17% from FY '24 and a payout ratio of 62% in line with our dividend policy. We're proud of what we've achieved in FY '25 and attribute much of our success to our transformation program, which has made us a more resilient business and delivered structural improvements across the organization. I will cover our transformation progress in greater detail shortly, but among the most notable improvements was a stronger customer value proposition to retain and grow our customer base. This was further enhanced through our expanding digital capabilities and ongoing asset efficiency improvements, which led to reductions in the capital intensity of our business with these benefits also being shared with our customers. This reduction in capital intensity and the strength of our financial position supported additional capital returns to shareholders in FY '25 with USD 403 million of share buybacks completed during the year. In line with our investor value proposition, we are pleased to announce additional buybacks of up to USD 400 million in FY '26. Finally, we are proud of the many positive impacts achieved through the course of our 2025 sustainability program. Building on this success, we're stepping up our regenerative ambition for our 2030 sustainability program to be released in September. Turning to the operating environment. During the year, we saw a return to more normalized pallet market dynamics following inventory optimization initiatives undertaken by retailers and manufacturers during FY '24. Overall, inflationary pressures moderated this year with modest increases in labor and transport costs, partially offset by deflation in fuel and lumber. The capital cost of a pallet was down approximately 6% year-on-year, although it remains above pre-COVID levels. Importantly, we maintained commercial discipline with our pricing recovering modest cost to serve increases that benefited from lower pallet loss rates. This was driven by the normalization and pallet market dynamics and progress we have made through our asset efficiency initiatives. Whilst our business is reasonably defensive in nature, increasing macroeconomic uncertainty, and the ongoing tariff concerns had a noticeable effect on consumer demand, leading to lower like-for-like volume growth, particularly in the second half of the year. This demand impact was more than offset by an acceleration in new business wins particularly in the U.S. and Europe, with more manufacturers recognizing the value of our high-quality pooled solutions. This momentum benefited from broader market developments including the reduced availability and rising cost of quality whitewood pallets as well as increasing levels of automation across manufacturing and retail supply chains. Operationally, inventory optimization by manufacturing and retail customers in FY '24 led to higher pallet returns in key markets and contributed to additional costs across our network in FY '25. This included additional repair requirements due to higher pallet damage rates and incremental transport and storage costs in the U.S. due to excess plant stocks. We have approximately 4 million excess pallets at the end of FY '25 in the U.S. and anticipate a return to optimal levels by the first half of the 2027 financial year. From a CapEx perspective, utilizing excess plant stock in the U.S. contributed to a 0.5 point benefit to the pooling CapEx to sales ratio this year and should also result in a similar benefit in FY '26. Let's now look at the Shaping Our Future transformation program in greater detail. Starting with our customers. We have continued to enhance all facets of the customer experience from improvements to service levels and investing in platform quality to simplifying the way we interact with our customers and retail partners. Many of these initiatives are also being enabled by our growing digital capabilities. This includes the significant upgrades to our customer portal that have increased the efficiency and capabilities for customers to self-serve, including electronic order placement and introducing AI-driven messaging in some of our markets to provide swifter customer support. These improvements have helped lift key customer performance metrics, such as Net Promoter Score, delivery in full and on time and customer satisfaction scores which have all continued on an upward trend for the past 2 years. Our focus on asset efficiency has boosted the resilience of our business by reducing capital intensity lowering the cost to serve and enhancing the circularity of our assets to deliver even greater sustainability advantages. Technology investments, including pallet tracking, together with our growing data analytics capabilities, and expansion of our asset recovery capabilities have fundamentally changed how we are able to track and recover our assets. This enabled us to reduce 2 key asset efficiency metrics, being the pooling CapEx to sales ratio by 8 points and uncompensated pallet losses by approximately 50%, both measured against the FY '21 baseline and well ahead of our transformation target. In network productivity, our focus has been on continuous improvement to enable our business to operate more effectively and with greater agility. The initiatives are wide-ranging and include automating, inspection and repair processes, optimizing service center locations to reduce transport distances, investing in platform and innovation to improve durability and optimizing procurement across our operations. The efficiencies from these initiatives have been critical in offsetting cost headwinds while also enabling reinvestments to enhance the customer experience through platform quality and improving the cost to serve. Finally, in our digital transformation, we have continued to extract and analyze valuable insights from the increasing amounts of data generated through our autonomous tracking devices across 34 countries and our maturing data analytics capabilities. Our advancements in digital have enabled new business opportunities, for example, turning unauthorized reusing to new customers, better commercial decision-making and asset efficiency improvements. The work to date in digital has also laid the foundation for the Brambles of the Future and our vision to connect and illuminate global supply networks. One of our strategic priorities that underpins this vision is bringing greater visibility and insights to our customers that drive efficiency, resilience and regeneration. Progress towards this vision is being made through our efforts in digital, including Serialisation+, which I'll provide an update on shortly and also developing our innovative digital customer solutions. To date, we have developed 3 distinct solutions, which we are currently piloting with several global customers in key markets, including the U.S., U.K., Spain, Portugal, Germany, Australia and New Zealand. Turning to our ESG achievements. I'm incredibly proud of the work we've accomplished under our 2025 sustainability program. Over the past 5 years, we have strengthened our inherently circular share & reuse model through transformation to deliver greater positive impact for the planet, business and communities. Starting with safety, we have achieved our best year on record with a Brambles injury frequency rate of 2.2 in FY '25. The strong safety culture we have built has allowed us to bring our BIFR down in every year of our program and it is now 56% below where we started in 2021. Another key achievement has been the progress of our waste targets under our planet positive pillar with almost 94% of sites now diverting product waste from landfill up more than 10 percentage points in FY '24, although under the 100% we were aiming to achieve by the end of FY '25. We have also surpassed our target of 30% recycled or upcycled plastic in new platforms, again in FY '25 by 11 percentage points. For communities, we continue to leverage our central role in supply chain and logistics expertise to support those in need through food bank partnerships globally, a program that addresses the dual challenge of food waste and food insecurity. In FY '25, we again supported 20 million people receiving meals through our support for food rescue organizations including food banks. It is always a source of great pride when Brambles and our employees are recognized for our sustainability efforts. In FY '25, we have continued to reaffirm our global leadership across major ESG indices and rankings, including the Dow Jones Best-in-Class Indices, Corporate Knights Global 100 and TIME magazine. Turning to our transformation scorecard. I won't go into the details. But as you can see, a majority of the targets we set in September 2021 have been achieved and have played a key role in driving our performance over the past few years. For the few areas where we did not quite meet our goals, action plans are in place to continue making progress with further details available in our annual report. I'll now spend some time covering our Serialisation+ program, including the progress of our rollout in Chile and the operational testing underway in North America and the U.K. as well as our deployment of smart assets globally. In Chile, we have fully serialised our pool and refined our operational approach, driving efficiencies through automated in-line tagging. We have also introduced an effortless service model that eliminates major friction points such as pallet declarations and audits. We've been very encouraged by the positive customer response with more than half our customers in Chile having transitioned to this new model with remaining customers expected to convert by the end of this calendar year. Importantly, learnings from this market had evolved our understanding of the full value potential of Serialisation+, which we have captured in a value score card that I will outline shortly. In North America and the U.K., we have added service center infrastructure, explored the best tagging approach and developed auto- tagging technology specific to each market's requirement. We have developed and are currently testing a lower cost tracking device that has the potential of supplementing visibility and depth of insight from our current autonomous trackers in a more capital-efficient way. Throughout this operational testing, we have been taking learnings from Chile and continuing to evaluate the optimal technology mix, investment requirements and potential benefits of operating a serialised pool in North America and the U.K. Lastly, we have continued to scale smart assets globally, expanding their scope and deepening our use of insights from this technology. These smart assets have enabled increased visibility and control over our platforms, improved our understanding of the cost to serve, and we're exploring the potential to use these insights to create a simplified offer for smaller customers, opening new opportunities for collaboration and growth. Turning now to insights from Serialisation+ in Chile. This slide shows the value scorecard for Chile, which is guiding our efforts as we prove the full value potential of Serialisation+. As you can see, we have identified 5 key potential value pools each with specific sources of value that we have either already identified or will test and prove out during FY '26. Starting with customer experience. We have made significant inroads with the launch of our effortless service offer. We have clear examples of reduced administrative burden for the customer as serialised data and insights eliminate the need for pallet declarations and audits. We have also proven a significantly simplified billing model with 1 example seeing customers shrink their invoice from 12 pages to 4. Examples like this are supporting our overall customer experience with further potential to improve NPS and long-term relationships by shifting our relationship with the customer to one that's focused on growing shared value. In Chile, the effortless service offer has also delivered growth benefits with 3 customers having returned to us or converted to CHEP based on the effortless service offer promise. As we look ahead, the increased visibility of Serialisation+ could increase our addressable market by illuminating new lanes. In addition, we expect to develop a more accurate understanding and visibility of pallet dynamics across different segments, grounded in specifics rather than averages, generating valuable insights for existing customers while also expanding the universe of commercially viable lanes. Serialisation+ also delivers benefits across pricing and asset productivity. Smart asset insights allow us to identify and monetize reuse as well as noncompliant flows and unauthorized exchanges of our pallets. In asset efficiency, we've been able to identify and mitigate sources of loss. However, the real value potential lies in using Serialisation+ insights to focus on identifying sources of inefficiency and collaborating with customers to solve cycle time and demonstrate challenges and to optimize their cost to serve. We see immense potential for our customers and us from this collaboration. Furthermore, we see significant opportunities from equipping our supply chain teams with granular insights to reduce the cost of our operations, which we are yet to test. With this framework in place, we will systematically test these initiatives and our focus in FY '26 will be to move from insight to action across the value scorecard, explore opportunities for more dynamic pricing and determine how to deliver the effortless service offer on a global scale. Looking now at the learnings from FY '25, which are also informing our areas of focus in FY '26. As we progress, we are continually building on valuable areas of learning across both operations and technology. Our biggest learning to date is that we can start generating valuable customer insights from our tech pallets only after the read infrastructure is in place. This has prompted us to take a different path in the U.S. Rather than running investments in read infrastructure and tagging in parallel, we have rephased our plan to prioritize investment in read infrastructure, which will materially reduce our time to value, avoid operational cost of replacing damaged tags, while we're still putting a read infrastructure in place. And create opportunities to improve the performance of the tag while bringing the cost down as this is the predominant driver of CapEx. Our second set of learnings has come as we continue to refine our approach to tagging. We now have automated taggers for each market that will allow us to scale at pace. Similarly, we have developed the technology to tag for each market, adapted for performance in local conditions. Finally, we have uncovered specific challenges in our current approach in the U.K., whereby the movement of our pallets back and forth between customers without returning to a service center reduces the insight available from our data. We have identified an alternative approach involving a higher device density created by supplementing insights from our current autonomous trackers with a lower cost option. Given these learnings, we have identified separate paths for North America and the U.K. In North America, we will implement read infrastructure to cover 2/3 of asset flows in FY '26 while improving operational performance, and we'll continue to evaluate the optimal technology mix and investment required to serialise the pool in this market. In line with our disciplined approach to capital allocation, we continue to target a ROCI hurdle for Serialisation+ investments of at least 15% once the market pool is fully serialised. The U.K. plan is different. During FY '26, we will test a lower cost tracking device to both test the viability of capturing the data required to build complete Serialisation+ insights and to explore the broader benefits of a mixed approach with lower cost devices complementing our current autonomous tracking devices. Consequently, we'll be selective with further infrastructure investments and tagging until this trial is complete. Looking ahead to FY '26. We expect sales revenue growth of between 3% and 5% through a balanced contribution from net new business wins and price. The lower end of our sales revenue growth is below our investor value proposition of a mid-single-digit increase in revenue. This reflects uncertainty about the macroeconomic environment which could continue impacting consumer demand and in turn, our like-for-like volumes in FY '26. As you can see, this potential challenge to revenue has not impacted our expectations for strong profit growth and continued margin expansion, with underlying profit growth expectations of 8% to 11%. We also expect to deliver strong free cash flow before dividends in the range of USD 850 million to USD 950 million. Finally, we are pleased to announce an on-market share buyback in FY '26 of USD 400 million. The Board has determined this to be the appropriate amount for FY '26 given the expected levels of surplus capital available and will be subject to market and other conditions customary for a buyback. With that, I'll hand over to Joaquin to go through the financials and more details on our expectations for FY '26.
Joaquin Gil: Thanks, Graham, and good morning, everyone. Before diving into the details of our FY '25 financial performance, I wanted to touch on the key drivers of the result as these will be recurring themes as we move through the slides that follow. In line with Graham's comments, the key drivers of our FY '25 financial performance were volume growth of 1%, which reflects the strong momentum with new customers in key markets that helped to offset the impact of macroeconomic headwinds on demand from existing customers, particularly in the second half of the year. Our ongoing focus on productivity improvements across asset efficiency, supply chain and overheads, which delivered strong operating leverage with underlying profit growth of 10% and margin expansion of 1.3 percentage points. Our initiatives to improve asset efficiency, combined with improved overall pallet market conditions, continued to reduce the capital intensity of our business. In FY '25, we saw a 45% reduction in uncompensated losses resulting in an $86 million reduction in the IPEP expense. And further improvements in our pooling CapEx to sales ratio, which reduced to 12.3%. This improvement in capital efficiency was also the key driver of the strong free cash flow generation of over $1 billion. Collectively, these outcomes saw us deliver on our investor value proposition, generating total value creation for shareholders of 17% with EPS growth of 14% and a dividend yield of 3%. The strong FY '25 performance is testament to the progress of our transformation program and the business' ability to deliver on the items within its control. Turning to Slide 15 and an overview of our full year results. On this slide, I wanted to call out the key drivers of our profit after tax and EPS performance, as I will cover revenue and underlying profit in more detail in the slides that follow. Profit after tax from continuing operations increased 13%. This was ahead of the 10% growth in underlying profit due to the reduction in net finance costs, which more than offset the higher hyperinflation charge and tax expense during the year. The 6% decrease in net finance costs reflected lower average borrowings supported by strong cash flow generation and the proceeds received from the sale of CHEP India in January 2025. While tax expense increased 7%, our effective tax rate fell by 1.2 percentage points at an actual FX rates to 29.5%, reflecting the geographical mix of earnings. Profit from discontinued operations totaled $31.8 million for the year, primarily relating to the gain from the divestment of CHEP India. EPS from continuing operations of 14% included a 1 percentage point benefit from the FY '25 share buyback program, which reduced the number of shares issued. Importantly, our continued capital allocation discipline and our focus on driving productivity resulted in ROCI increasing 1.4 percentage points to 21.9%. Moving to Slide 16. Group sales revenue increased 3%, coming in slightly below our FY '25 guidance of 4% to 5% growth. This was due to the impact of the challenging macroeconomic environment on like-for-like volumes with net new business and pricing in line with our expectations. Price realization was 2%, both for the full year and the second half, reflecting the recovery of cost to serve increases driven by inflation. This increase was partially mitigated by improvements in asset efficiency, which reduced the level of price increases required to recover the cost to serve. Net new business growth was 2% for the year, led by strong contributions from the CHEP Americas and the CHEP Asia Pacific segments with additional support from the European pallets business. We saw increased momentum towards the end of the year in key markets with fourth quarter net new wins in the U.S. and European pallet businesses growing by 4% and 2%, respectively. This highlights our strong value proposition relative to the whitewood alternative and the tangible improvements we have made to the customer experience. Like-for-like volumes decreased 1%, impacted by challenging macroeconomic conditions in key markets, the timing of U.S. harvest season and the normalization of the average pallets-on-hire in Australia. These factors were partially offset by the benefits of cycling inventory optimization in FY '24. Turning to Slide 17. Looking at the key drivers of our underlying profit performance. Sales revenue contributed $148 million to profit growth. While North American surcharge income decreased $23 million in line with movements in market indices for lumber, transport and fuel during the year. Plant and transport costs collectively rose by $99 million despite savings of $207 million delivered through supply chain productivity initiatives focused on reducing transport miles through network optimization, driving continuous improvement through operational excellence, and optimizing procurement across our operations. These savings were more than offset by input cost inflation of $87 million, additional repair, transport and storage costs due to higher damage rates and excess plant stock in the U.S. and incremental investments to support quality, asset efficiency and digital initiatives. These investments in asset efficiency and digital initiatives combined with improved pallet market conditions were key contributors to lower loss rates across the group, which drove the $86 million IPEP expense reduction in FY '25. Lastly, other costs decreased $24 million with overhead cost management and early benefits from productivity initiatives, more than offsetting wage inflation and an $11 million in incremental Shaping Our Future investments, primarily relating to the digital transformation. For more details on the Corporate segment, please refer to Appendix 5E. Turning to Slide 18 and the key drivers of our underlying profit margin performance. At our Investor Day in September 2024, we outlined our target to deliver at least 2 percentage points of margin expansion compared to FY '24 by the end of FY '28. And as you can see on this slide, we had a strong start to delivering against this target, achieving 1.3 percentage points of margin improvement this year. There were several key drivers contributing to our performance, which I'll cover now. Starting with asset efficiency and the IPEP to sales ratio, which halved from 2.8% in FY '24 to 1.4% in FY '25 and contributed 1.4 percentage points of margin improvement in the year. This improvement is well ahead of the 0.5-plus percentage points target we had set for FY '28, reflecting a faster-than-expected realization of benefits from enhanced commercial frameworks, deeper collaboration with retailers and expanded asset recovery capabilities we have built through transformation and enabled by digital initiatives. These have structurally improved asset control across the group. And in the absence of further advancements in digital initiatives such as Serialisation+, we believe them to be fully mature as indicated on the slide. Moving to overhead productivity, which delivered 0.8 percentage points of margin improvement in FY '25. While this is also ahead of the 0.5-plus percentage point target we set for FY '28, we see further opportunities to deliver efficiencies by streamlining our operations to better utilize existing resources and using technology to improve processes and support broader cost control initiatives. Finally, supply chain productivity, as measured by our plants and transport cost to sales ratio was a 0.9 percentage point headwind to margins despite significant savings delivered this year. That said, the table on the left shows a clear improvement in supply chain performance in the second half as increasing benefits from supply chain initiatives minimize the margin impact as the year progressed. With an early maturity stage, supply chain productivity has the most runway left and we expect it to become a positive contributor to margin expansion from FY '26 onwards. Turning to Slide 19. Considering the asset efficiency improvements already achieved and opportunities across supply chain and overheads. We now expect to deliver at least 3 percentage points of margin expansion by FY '28 compared to the FY '24 baseline. An increase of 1 percentage point compared to the previous target. We expect supply chain productivity to be margin accretive from FY '26, supported by ongoing benefits from network optimization, operational excellence, procurement and automation initiatives. As we progress towards FY '28, we expect further margin improvements as the cost headwinds linked to U.S. excess plant stock are no longer in place and digital insights become a key enabler of further efficiencies across our operations. In asset efficiency, we expect to maintain the structural reduction in uncompensated pallet loss rates. However, we do expect the IPEP sales to increase to approximately 1.6% in FY '26 and remain around these levels through to FY '28, driven by an increase in the FIFO cost of pallets written off. And in overhead productivity, we have identified restructuring opportunities in FY '26 that are expected to deliver a net benefit of $15 million in the year with the full benefit of $55 million expected to be realized in FY '27. Turning to Slide 20, which shows the impact asset efficiency improvements have had in reducing the capital intensity of our business. As shown through both the IPEP to sales ratio reduction I mentioned earlier and the group's pooling capital expenditure to sales ratio, which improved by 0.7 percentage points to 12.3% in FY '25. 0.4 percentage points of this improvement was related to sales revenue growth, with the balance driven by lower capital expenditure despite a 1% growth in volumes. On an accruals basis, capital expenditure decreased $20 million year-on-year as a $45 million benefit from the lower capital cost of new pallets was partially offset by the impact of 1 million additional new pallets purchased this year. This increase in pallet purchases was driven by volume growth and the impact of cycling a higher capital expenditure holiday benefit in the prior year, driven by inventory optimization. These impacts were largely offset by asset efficiency initiatives which recovered an additional 9 million pallets in FY '25 that would have otherwise needed to be replaced. In the current year, the capital expenditure holiday was limited to the U.S. where the business continues to carry excess plant stock levels, while the prior year also included a CapEx holiday in Europe. FY '25 pooled in capital expenditure to sales ratio includes an approximate 0.5 percentage point benefit from utilizing excess plant stocks in the U.S. with a similar percentage point benefit also expected in FY '26 in line with continuing to utilize excess plants. Moving to Slide 21, these asset efficiency improvements, combined with higher earnings and lower financing and tax costs supported strong cash flow generation with free cash flow before dividends increasing by $212 million to $1.095 billion in FY '25. Capital expenditure on a cash basis decreased $204 million year-on-year, supported by asset efficiency gains, lower capital cost of new pallets in the current year and the timing of pallet purchases in the prior year. Financing and tax cash payments were lower year-on-year, primarily driven by the timing of Australian tax installments and timing of interest payments following the maturity in issue of European medium-term notes. These benefits offset $30 million in adverse working capital movements, which were driven by natural variations in creditor payments, and a $61 million increase in other cash movements, largely related to provisions for employee benefits and increased spend on intangible assets, particularly technology initiatives aimed at enhancing customer experience, digital capabilities and supply chain activities. Importantly, excluding the CapEx benefit from utilizing excess plant stocks in the U.S., free cash flow after dividends would still be over $1 billion, reinforcing the strength of our underlying cash flow performance. Turning to Slide 22 and looking at our regional performance, starting with CHEP Americas. The Americas segment delivered sales revenue growth of 4%, with a balanced contribution from both volume and price, reflecting new customer wins in the pallet business and recovery of cost to serve increases across the segment. Margins improved by 0.5 percentage points, supported by significant gains in asset efficiency and productivity across supply chain and overheads. These benefits more than offset incremental costs related to repair, transport and storage, largely stemming from higher damage rates in the region and excess plant stock in the U.S. due to the prior year inventory optimization. These benefits also enabled the investments to enhance customer experience, including quality improvements and digital investments such as Serialisation+. ROCI increased 0.2 percentage points as profit growth more than offset a 5% increase in average capital invested driven by pallet purchases to support volume growth in Latin America and increased service center lease costs in the region. Looking now at U.S. pallet revenue on the next slide. The U.S. pallets business delivered increased revenue growth of 3%, supported by price realization of 2%. Price realization was aligned with cost to serve as contractual pricing to recover input cost inflation was partly offset by lower contributions from asset efficiency linked pricing, reflecting improved loss rates during the period. Net new business volume growth of 2% was largely driven by small to medium enterprises and produce and beverage sector transitioning from whitewood to our share and reuse solutions. This momentum accelerated in the fourth quarter of FY '25 with net new business growth reaching 4%, supported by enhanced sales capability and digitally enabled initiatives that simplified and improved the customer experience. The strength in net new business wins helped offset a 1% decline in like-for-like volumes due to macroeconomic headwinds in the second half of FY '25 and the impact of an earlier U.S. harvest season, which shifted produce volumes into the fourth quarter of FY '24, impacting growth in the first quarter of FY '25 and creating a stronger comparative base for the fourth quarter of FY '25. These headwinds more than offset the benefit of cycling inventory optimization from the prior year. Turning to the CHEP EMEA region. Revenue increased 2% with both price realization and net new business wins each contributing 1%. Net new business wins were primarily driven by the European pallets business with additional contributions from the RPC and containers business. Like-for-like volumes remained flat as the impact of challenging macroeconomic conditions on European pallets and the automotive business offset growth with existing customers in Africa and the benefit of cycling inventory optimization in FY '24. Underlying profit increased 14%, with significant margin expansion of 3 percentage points driven by asset efficiency, supply chain and overhead cost savings. These gains were partly offset by inflation and investments in customer experience and asset efficiency initiatives. This strong profit performance, combined with asset efficiency benefits drove a 3.6 percentage point increase in ROCI this year. Moving on to CHEP APAC, where we delivered revenue growth of 3% and primarily driven by price realization of 4% to recover cost to serve increases and the impact of customer mix. Volumes declined 1% as new business growth of 2%, reflecting contract wins across Australia and New Zealand pallets and RPC businesses helped offset a 3% decline in like-for-like volumes. This included the impact of lower daily higher revenue in the pallets business as the average number of pallets on higher normalized from peak levels in the first half of FY '24. Underlying profit margin improved 0.4 percentage points at actual FX rates. As supply chain and overhead cost savings were partially offset by inflation and increased repair, handling and relocation costs associated with higher pallet returns. ROCI increased 1.1 percentage points as profit growth more than offset a 1% increase in average invested capital. Turning to our outlook considerations for FY '26. We expect sales revenue of between 3% to 5% and with a balanced contribution from volume and price. Price realization is expected to be in line with both cost to serve increases and the level of growth realized in FY '25, while volume growth will be driven by net new business wins across key markets. Given the current macroeconomic uncertainty, we anticipate a slight decline in like-for-like volumes, though, as Graham mentioned, this may vary depending on how the macroeconomic environment develops throughout FY '26. We expect underlying profit growth to be between 8% and 11%, supported by continued momentum in supply chain and overhead productivity initiatives. Margin expansion is anticipated across the group and all regions. As outlined earlier, IPEP to sales is expected to increase to approximately 1.6%, primarily due to the higher FIFO unit cost per pallet. While we expect to see improvement in the overhead to sales ratio, FY '26 includes overhead restructuring costs of approximately $30 million primarily incurred in the first half of FY '26 and expected to deliver a net benefit of approximately $15 million in FY '26 with the benefits weighted to the second half of the year. These changes are expected to deliver an annualized benefit of approximately $55 million in FY '27. Moving to Slide 27. In FY '26, we expect to deliver free cash flow before dividends of between $850 million and $950 million with a pooling CapEx to sales ratio of approximately 14% to 16%, which includes a 0.5 percentage point benefit from utilizing excess pallets in the U.S. Nonpooling capital expenditure is expected to be between $250 million and $300 million including digital investments of $90 million, primarily related to Serialisation+ as well as supply chain investments relating to automation and quality enhancements. Dividends are expected to be franked at 20%, which is a 10 percentage point down from the current 30%. And in FY '26, quarterly sales trading updates will be discontinued. Lastly, in summary, I would like to reiterate our commitment to our investor value proposition, which you will see on the left-hand side of the chart. Reflecting on FY '25, we are pleased with our performance, which reflects meaningful progress across key areas of our business, underpinned by the Shaping Our Future transformation program. While the macroeconomic environment remains challenging, we are continuing to deliver and focus on the items we control, which is delivering net new business wins, enhancing productivity and realizing efficiency gains. These actions are supporting the operating leverage across the group and underpinning strong sustainable free cash flow generation. Combined with our strong financial position, this has enabled us to announce further capital management initiatives in FY '26, consistent with our investor value proposition and focus on shareholder value creation. We exit FY '25 with positive momentum across the business, reinforcing our confidence in the outlook for FY '26. I will now hand over to the operator for Q&A.
Operator: [Operator Instructions] Your first question is from Andre Fromyhr from UBS.
Andre Peter Fromyhr: My first question is for Joaquin and making reference to the free cash flow bridge on Slide 21. Can you just expand a bit on the impact of the $173 million reduction in CapEx creditors. Are you suggesting that, that amount was sort of extra paid versus CapEx during the period in which case, if you normalize for timing, it would look -- the free cash flow would look better. And is that relative -- is the timing impact of that -- something that sort of we would compare with last year? Or is it something that sort of pushes into FY '26?
Joaquin Gil: Andre, thanks for that. Yes, just to answer your second part first. It's something that relates to the prior year. So you don't need to push that into FY '26. Essentially, what it relates to is just the timing of fourth quarter pallet purchases. So in FY -- in FY '23 or the fourth quarter of '23, we purchased pallets when the capital cost of a pallet was increasing significantly, and we also had much higher loss rates. And then you obviously pay for those in FY '24. And then in FY '24 fourth quarter, you had the reverse where pallet prices had come down and we'd improved our loss rate. So it's essentially just a timing issue between those 2 years. And then as we move into FY '26, things go back to normal.
Andre Peter Fromyhr: Okay. Great. And then my next question was just about Serialisation+. I appreciate the sort of extra details shared on that opportunity today. I'm just curious, have you narrowed down into what the scale of these investments would be if you were to roll out, say, a U.S. model at scale and how soon are we to hearing some decisions around that?
Graham Andrew Chipchase: Perhaps I'll take that one as I'm totally unqualified to talk about CapEx creditors, so I'm glad Joaquin took that one. So I think we are increasingly confident based on what we see in Chile that Serialisation+ is going to work for us. And that's why we've made the sort of, call it, no regret decision to invest in the read infrastructure in the U.S. I think a bit that's trickier for us to finalize at the moment is the mix of technology that we're going to use when we fully serialise a pool. So that's what I mean by that is we're continually refining and improving the performance of things like the auto taggers, the taggers themselves. The technology is changing quite quickly at the moment. So what we've realized is that actually the fastest way to get value is to do the infrastructure because whatever the form of the tag, you still need to be able to read it. So by getting 2/3 of the flows covered in '26 in terms of read infrastructure, when we then proceed with whatever the tag form is, we'll get that value much quicker. So let's -- for the sake of argument, assume then that's '27, '28 type of time frame. That's why we're doing what we're doing. So I think the sort of the direction of travel is clear. We definitely want to do this. We think there's value. Being able to put a number on it is hard at the moment because as I said, the technology is changing, we haven't finalized the technology mix or the type of technology for sure that we're going to use. So I think it's premature to do that. And I think what we then say is 2 things perhaps in order to set boundaries there. One is any investment we make, we still are expecting to get 15% plus in terms of return. And secondly we'll keep the market informed as we progress through the year. So we will keep updating people. I would then go back to what we said about Chile. What we've seen from Chile is very encouraging. And that's why we're sort of very happy to make those investments in FY '26 in the read infrastructure in the U.S.
Andre Peter Fromyhr: Great. If I can just sneak one more in and maybe this is back to Joaquin specifically on the new margin target with the 3 percentage points expansion. Is it fair to assume that, that 1.6% IPEP to sales that you've guided to for next year is sort of -- that's the stable view as part of that 3 percentage point expansion?
Joaquin Gil: Yes, that's right, Andre. That's -- we expect it to broadly be that same percentage out to FY '28.
Operator: Your next question is from Justin Barratt from CLSA.
Justin Barratt: I was interested if you would be willing to share a bit more about the new wins that you've got in the U.S. and Europe. Keen to understand how has that come from 1 or 2 key customers? Or has it come from quite a few more than that? And are the new wins with, I guess, existing customers in new lanes or new products? Or are they completely new customers?
Graham Andrew Chipchase: Thanks, Justin. So let me give a broad answer to that. So I think the key things to say are the majority of them have come from converting current whitewood users onto blue. So it's not about a big share -- a market share movements between us and our competitors, our pooling competitors. And then when we look within those whitewood conversions, a lot of them are coming from SMEs, food, beverage, other sort of fast-moving consumer good type categories, converting on to blue for all the reasons that we've always said were the benefits of using a pooled solution. So if you look at the lifetime cost analysis, if you look at the sustainability benefits, all the sort of reasons you would expect. There is also an element where we are -- for a couple of reasons. One, that we've got much better visibility of what's happening in this -- what work could be defined as higher-risk lanes but also, again, our customers wanting to have 1 type of pallet rather than using whitewood and pooled within their own operations. We are seeing some lanes convert from whitewood to blue within some of our bigger customers. So those are the ones which in the past we would have classified as MPD channels, and we would have charged a premium for, we can now because of the better understanding and lowering of the cost to serve, those become more attractive to our customers to switch to blue. So it's a mixture, but I would say the majority are whitewoods users in those SME categories who are switching. There are some bigger customers switching as well, but the majority is the whitewood SMEs.
Justin Barratt: Fantastic. And then the other one I just wanted to ask is you're planning or I think you can get an annualized benefit from an overhead restructuring of $55 million, which is quite a significant number, I think. So I just wanted to understand or ask if you're willing to share a little bit more about what that planned overhead restructure includes?
Graham Andrew Chipchase: Yes. So -- if you look at the quantum of dollars, it sounds like a lot, but it's about 4% of our overhead base. So I just want to put that into context, and this is not some massive restructuring. It is about head count reduction, and it's in response to a couple of things. I think 1 is if you look at our head count over the last 3 or 4 years, it's gone up a lot because we've invested in, in things around the transformation, so digital capability, project management capability. And we always said when we started Shaping Our Future that at some point, we would scale back on that as we started delivering on the transformation, so it's partly that. And the other part is, I think it's incumbent on us to recognize that if volumes are going to level off and be a bit more difficult to predict, it's much better for the organization to make some tougher decisions now and be fit and lean for the future than doing it waiting 6 months and having to do much tougher things in 6 months' time than doing them now. And I think our customers would expect us to do that. We all know that the brand owners and retailers are facing a tough time at the moment. And so it's much more sensible for us to be able to say to them, look, we are taking self-help here. And that's why you don't need to be coming after us aggressively because we are trying to do our best to help you keep your cost down by lowering our own costs. And I think that's sort of the other element to it.
Operator: Your next question is from Jakob Cakarnis from Jarden Australia.
Jakob Cakarnis: I'll just direct the first one at Joaquin if I could, please, specifically focused on Slide 23 for the U.S. pallets business. At the third quarter trading update, you told us that the U.S. pallets business was doing constant currency revenue growth around 4%. At the full year, you've told us that's 3%. That gives me an implied flat fourth quarter. And if I work through the individual items that you've disclosed on Slide 16, you tell us net new wins contributed 4% in the fourth quarter. That gives me declines of around 3% for like- for-like volumes versus where you were run rating for the 9 months. But also interestingly, price looks like it's down 1% in the fourth quarter on the information that you've disclosed on Slide 23. Can you just flesh that out for me, please? I appreciate you're going to say some of this is rounding, but I'm just interested in how you've exited particularly on like-for-like volumes and that pricing item, please.
Joaquin Gil: Thanks very much. And yes, I was a bit worried when you said you're going to target me, but that's a fair question. So look, I guess what I'd say is a little bit of what you said about rounding, and it's a little unfortunate. But I think when you look at like-for-like volumes in the fourth quarter, they were down a little less than the number you quoted. And then I think when you look at pricing again, I think it's important to understand the cost to serve here. So we've talked a lot about sharing the benefits of asset productivity and incentivizing customers on asset productivity to help us there. So although that is a headwind to price realization and has offset inflation, the benefits come through operating leverage.
Jakob Cakarnis: Okay. So then the sources of operating leverage for FY '26 your guidance narrows the spread of that operating leverage. So in FY '25, you delivered a spread of 7%. The guidance gives us a range of kind of 5% to 6%. You've told us that IPEPs lessening as an incremental contribution. You've told us that price is probably lessening as an incremental contribution. And you've just told me then that you've exited fourth quarter with some softer like-for-like volumes. So outside of cost reductions, how do we think about the natural leverage in the business, please?
Joaquin Gil: Yes. So I think a couple of things I think about it. At a group level, we've again guided to a price realization broadly the same as FY '25. So again, we're committed to that recovery of cost to serve, and we continue to be in an inflationary environment. And I think that was the importance of Slide 18 that we put in about underlying profit margin, and it's in line with what you said that, obviously, asset efficiency, and we put in those maturity levels to say, look, we think until there's a step change in digital or we roll-out for S+, then the benefits from asset efficiency are probably maximized. But then you can really see the opportunity both in overhead productivity and supply chain productivity. And we broke it down by half, so you can see the acceleration in those benefits. So overhead went from 0.5 point to 1 point improvement in the second half. And supply chain productivity, while a headwind, that headwind reduced from 1.6% to 0.2%. So the sources of operating leverage as you move into FY '26 are really going to come from productivity improvements.
Jakob Cakarnis: Okay. And then one for Graham, if I could please. Slide 28, you reiterate the investor value proposition at the top there. You say that sales revenue is going to be mid-single-digit growth. If I go to the annual report on Page 67, there's been what looks like a change to the lower bound of your sales revenue CAGR LTI. The ROCI obviously has increased. It seems like it's where you are, but the sales CAGR that you're investing on the low end is now 3%. I think previously that was sitting around 5%. Can you just explain to me how the comp structure is congruent with what you've reiterated as the investor value proposition on Slide 28, please?
Graham Andrew Chipchase: Not straightforward. I mean I think that's -- and that is something we -- because also, if you look in that REM report, there is a paragraph which suggests that we're going to really look at it over the next 12 months because it's diverging from what we're trying to do with the investor value prop. I think the one area where I think if you look at the revenue grid, that is actually now much more aligned with the investor value prop than it was in the previous versions where, in fact, I think the revenue was going from 2 to sort of up to 7 at one point. And I think what we've tried to do is say, okay, let's recognize that we need to get the revenue more aligned with what we think is happening and the investor value prop. And on the ROCI side, it's not really where we want it to be, but we can't go to the market with lower targets on ROCI's. So we think it's time now to really think about the whole structure of the LTI and have it much more aligned with both revenue growth, operating profit leverage and cash generation rather than just looking at ROCI. Because if you can imagine trying to continue to increase ROCI is actually not the right message when you're trying to invest in the future and things like Serialisation+. So that's something we'll look to change over the next 12 months and go back, obviously, to investors with that.
Jakob Cakarnis: Yes. Sorry, just to be clear though, the FY '25 to '27 sales CAGR used to be 5% to 9%, you've instructed the market. And from what I can tell, consensus is kind of taken your investor value summary as kind of gospel for its forward forecast. Then in this year's recap for '26 to '28, the low end is 3% sales CAGR up to 6%. It seems quite a large shift is all I'm highlighting there.
Graham Andrew Chipchase: I don't think it is because if you think that -- if you look at the midpoint of 3% to 6%, that's kind of where the investor value prop is saying we want to be. So if anything, we've tried to get the revenue grid more aligned with the investor value prop this time around. And you could argue that last year, it wasn't. But that -- but I think you've got to understand a little bit where these LTI grids, what drives them, and it's driven largely by a feeling that you can never go backwards year -- when you change it from year to year. So at some point, if you're having good years, they keep on getting stretchier and stretchier and stretchier. And actually, that starts becoming unaligned with reality. I think that's what we're trying to address now and say, our investor value prop is really, really clear. It's mid-single digits, and we want everyone to understand that and realize actually, that's quite stretching in the very short term, given what's happening with the macroeconomic environment. But we think that, that is the right place to set it, not going up to the 5%, 6%, 7% because that clearly is not in line with what we're saying in terms of the longer-term view on revenue growth.
Operator: Your next question is from Anthony Moulder from Jefferies.
Anthony Moulder: If I could start with IPEP, famous topic. IPEP as a proportion of sales is going higher in FY '26. I understand that drove a lot of that benefit through FY '25 was higher compensated losses. Why isn't that structural that you get a benefit continuing through FY '26, please?
Joaquin Gil: Anthony, I'll take that one. It's Joaquin here. It's really just a function of pallet write-off costs or FIFO values. So obviously, we -- as lumber inflation has increased in the past, as we write-off pallets, they're more expensive. So it's not a sign that we're going to lose more pallets. It's a sign of the FIFO value.
Anthony Moulder: That FIFO value was increased into the future as well though, right?
Joaquin Gil: That's right. So in effect, as you move out to FY '27 and '28, we expect to lose less pallets to compensate for the increase that we're going to see in FIFO. But don't forget also that revenue grows. So that's why I think a percentage of revenue is a fair way to look at it.
Anthony Moulder: Sure. But it's also higher. You're still expecting a similar level of compensated loss as you achieved in FY '25.
Joaquin Gil: Yes. So I think what we're -- that metric is uncompensated losses, Anthony. So exactly right, if we were going to get less pallets compensated, then they would fall into that uncompensated metric.
Anthony Moulder: Okay. Can I follow on from Jak's comment about revenue growth and obviously, stronger growth in net new wins exiting FY '25. That seems cautious on the outlook at that lower end of sales revenue growth at 3%. Are you seeing something more difficult through the operating environment through FY '26 that gives a bit more caution on that lower end of the revenue growth rate that your forecasting for FY '26, please?
Graham Andrew Chipchase: Anthony, it's Graham. So I think that's -- I mean, that's a very fair, I think, analysis of our mindset. And let me just try and put it into context a little bit. As you know, we don't have a 12 months forward visibility of what our customers are thinking, number one. And secondly, I think there's an element of people's mindsets are always conditioned a little bit by what's happening to them in the moment. And at the moment, the conditions in most of our markets are from a consumer demand perspective are pretty challenging. Now I think the performance we've delivered in the last quarter is actually pretty good when you look at some other companies in sort of adjacent types of industries. But I think everyone is thinking it's quite tough out there. Now my view is that, yes, it is, and therefore, we should plan for the worst, but expect or hope for the best. And I think that is -- that's sort of a justified view because -- or position to take because we went -- got into difficulty or tougher conditions quite quickly, and I think it could actually change quite quickly as well. So our comments around it depends a little bit on what the macroeconomics do over the course of FY '26 are to try and to reflect that and say, based on what you can see today, you would be relatively cautious, but it could change quite quickly. And therefore, I would agree with you that we're being -- we're guiding towards the bottom end of what we think is likely. But I mean, if anyone can predict what's going to happen with macroeconomics globally at the moment, then they're a better person than me. So I think it's a tough one to call at the moment.
Anthony Moulder: Fair enough. And if I take from that, that it's more likely to see stronger growth in this business relative to -- in the second half relative to the first half?
Graham Andrew Chipchase: Well, I think if you just look at the comps, you would probably say that anyway. So that's a fair statement.
Anthony Moulder: Last one, if I could. Asset efficiency has been a focus for a long time, of course. But if I look at pre-COVID levels of number of pallets in the pools around the world and maybe a maybe an unfair comparison for EMEA given that set volume growth, but if we look into the U.S., there's a lot more pallet still in the business through the Americas than what there was in FY '19. Adjusting for the fact you're still carrying 4 million extra pallets in that -- in the U.S. market. And obviously, volume growth hasn't been strong through that part of the world. How should we think about the number of pallets needed in an optimized pallet environment, optimized asset efficiency environment given that high level of pallets relative to fiscal '19, please?
Joaquin Gil: Yes. So I think, Anthony, we are making good progress on asset productivity, as you mentioned. I think the thing here is different sectors that we might play in may have different cycle times. And obviously, we price accordingly for that. So at times, you're going to see variations or the number of pallets as you just mentioned because some customers may have a longer cycle time. And a good example of that is what we've been seeing in the Australian market where customers and retailers held higher inventory levels for a period of time. And then we saw that unwind. And that was different to what we saw in Europe and the U.S., which unwound earlier. So I think for me, that's where the benefits of our business of the digital initiatives that we've got underway, the autonomous tracking devices, Serialisation+, et cetera, really help us be able to improve cycle time as we look out.
Anthony Moulder: So new customers effectively have a longer cycle time and that's why we're not seeing that reduction in a key market like the Americas?
Joaquin Gil: I would say it's just customers. I wouldn't say that was just necessarily new. It depends. You might have an existing customer that moves into something different. I think also one of the real benefits of the investment in asset productivity in digital is that what we may have considered high-risk lanes before are now not high-risk lanes and open up new opportunities to us.
Anthony Moulder: Yes. Okay. And lastly, just a question on the reasoning behind not giving a quarterly trading update since I would have thought it was useful to continue release the quarterly trading update first and third quarter?
Joaquin Gil: Yes. Look, I think, Anthony, it's really what we said in the ASX release that when we release reporting, we really want to make sure it's meaningful and helps the user. And I think the challenge when you look at revenue is it's not a good view of our financial performance in general, particularly in a situation where we were just touching on the U.S. where you're sharing asset productivity benefits with customers and that moderates revenue. So what we found is that it's in a way, people were getting the wrong idea from our quarterlies. And so we think it's much better to be able to give fulsome information, which is the full P&L and cash flow. And hence, we've decided to go for the halves.
Operator: Your next question is from Matt Ryan from Barronjoey.
Matthew H. Ryan: I saw that the pallet salvage went up again to $25 million. So just trying to get some thoughts on, I guess, whether there's any form of natural cap or it just seems like a number that keeps exceeding, I guess, in a positive way for you guys?
Joaquin Gil: Yes. I think, look, Matt, we have a range of initiatives that in asset productivity, I don't think what we've been -- had an upside surprise on is the benefits that we're getting from those initiatives. So I think one thing in particular that's really helped us is we've been using machine learning to be able to better target collections and also leveraging that autonomous tracking data for locations, where pallets might be. And obviously, the more data we're putting through that model, the better the accuracy of that model is, and that's really those algorithms have really improved our collections. But we continue to target improvements, but what that improvement might be is hard to predict.
Matthew H. Ryan: I guess if we're linking that benefit to, I guess, data analytics, et cetera, and your -- you seem to be, I guess, reaching an inflection point with Shaping Our Future in regards to more investment in the Northern Hemisphere, presumably, we could sort of be at the earlier stages of where that could get to? Is that a fair comment?
Graham Andrew Chipchase: I mean I think -- I mean, yes, is the short answer to that. But if I just go back to Joaquin's slide with the maturities. I think what we're saying is until we see a significant step-up in our insights from data when we do a Serialisation+ on, for example, the North American market, we shouldn't really expect to see a big step change. But in the future, that is something that without wanting to commit to it, we are hopeful that, that will give us -- be able to move on another level. And there's no reason to believe that's not going to be the case.
Matthew H. Ryan: And just a last one. Just hoping if you could give us some thoughts on I guess, the longer-term like-for-like environment. We've got negative numbers coming through at the moment, but we know that your business model sort of caters to products that are a little bit less discretionary in nature or more stable. So I think it's what you've talked about in the past. So I guess if we look back through history, can you give us any guide on, I guess, what's a reasonable length of time that these types of numbers can be incurred negative for?
Graham Andrew Chipchase: Well, I mean, I think the obvious time is to look back are things like '08, '09. And it -- I mean, I think it's very -- I mean, I am not a leading world expert on macroeconomics, so I don't -- I definitely don't want to make too many stupid statements here. I mean, in the past, it could be 24 months. It could be up 36 months. That's what -- it's been that sort of time period. But I do think what we're facing at the moment is somewhat unusual when you think about how it's being driven by 1 person and their tweets and other statements. So I think it's quite difficult to predict. But fundamentally, you are correct in that what goes on our pallets tends to be food, beverage and fast-moving consumer goods. And one would assume that after a period of time, unless there is a prolonged global recession, which I don't think anyone is calling at this stage, then we should be seeing below single-digit like-for-like growth were, I think, in a very, very good position to continue converting whitewood uses into our own pooled solution and then a little bit of pricing to recover cost to serve. So that gets you back not quite -- it's comfortably back into that mid-single-digit revenue growth proposition.
Operator: Your next question is from Owen Birrell from RBC.
Owen Birrell: Just a couple of questions from me. Just the first one first. Just wanted to step back to the fourth quarter of '25. Based on the guidance that you provided in the third quarter trading update, it was suggesting a much stronger fourth quarter. And based on what you've revealed today, you effectively sort of had a small miss to that outcome. I just want to get a sense as to what happened versus your expectations in those last couple of months in the period, particularly across the areas where you have a bit more control, i.e., price and net new business wins.
Joaquin Gil: Owen, it's Joaquin here. Look, I think in terms of the comments I made earlier. So from price and a net new wins perspective, fourth quarter performance was in line with what we had expected, really where it was below our expectations was like-for-like growth and in particular, in the U.S.
Owen Birrell: Are you able to clarify what you're assuming for like-for-like for that fourth quarter just to help us sort backfill work models?
Joaquin Gil: We give a range. So it's a little bit hard to quantify. But I guess what I would say is we touched on this earlier in the call, the like-for- like volumes were negative, and we probably would have expected them to be broadly flat.
Owen Birrell: Okay. And just second question from me, and it's a bit of a follow-on from Justin's question earlier on. I just wanted to get a bit of color and a bit of guidance, I guess, around the corporate cost line. You've called out corporate costs -- corporate costs were $92 million in FY '25, you're calling out a reduction of $15 million. So purely corporate costs it's Shaping Our Future. Should that be around, call it, $77 million, that's the essentially the math there. And then can you give us a bit of guidance around, I guess, what you expect Shaping Our Future to be for '26?
Joaquin Gil: Look, Owen, I think just one thing for everyone to note is we're sort of would like to move to more guiding overheads in general because, obviously, where we might choose to invest or we've talked about some restructuring and where that might happen, might be different to where we expect or forecast at a point in time. But I think to answer your questions, we broadly expect overheads to be flat. And then in line with what we said at our Investor Day, we expect Shaping Our Future costs to grow essentially in line with revenue.
Owen Birrell: Right. So the cost reduction of $15 million effectively is going to get absorbed by additional costs coming through Shaping Our Future. It's going to be reinvested essentially as you...
Joaquin Gil: Yes, that's right. .
Operator: Your next question is from Sam Seow from Citi.
Samuel Seow: Just one from me. I just want to understand some of your answers on the call a bit better and perhaps ask the question in a different way. Your operating leverage has obviously increased in the business, 8% to 11% guide from 3% to 4% sales. And a couple of guys are mentioning sales of LTI has taken a bit of a step down. Is it fair to say as technology or S+ rolls out, you lower your cost to serve and this should see lower sales growth going forward, but actually better operating leverage? Or is that just totally the wrong read?
Joaquin Gil: Can I rephrase that slightly, Sam, if that's all right. How I think about it is the amount of price that you take changes. And I think while we're talking about the grid having changed, I think the grid was adjusted because we went into a high inflation period and the expectation was to take pricing. So if you go back to pre-COVID, the grid was actually, I think, 2 to 5 or 2 to 6. And we thought going back there wasn't the right place to go given our investor value proposition. So we removed the 2%. So I think for me, it's not about that we shouldn't expect the volume growth, et cetera, it's about that price realization. And exactly what you said, Sam, as we lower the cost to serve, then that helps offset inflation and obviously, the price increases that then happen or price realization is lower than it has been in the past.
Samuel Seow: Got it. And so structurally, embedded in your kind of 3-year LTI view is pricing will probably be a bit softer, but your operating leverage or natural operating leverage in the business should actually take a step up, if you're successful with S+?
Joaquin Gil: Yes, I think that's a fair assumption.
Operator: Your next question is from Scott Ryall from Rimor Equity Research.
Scott Ryall: Firstly, this is really for Graham, I think. I guess in the last 6 months, we've seen certainly the most mental trade environment I can remember with all sorts of risks emerging. And so I guess what I'm wondering out of that is you've got the retailers, there's some concern over shifts in inventory, whether that's up or down due to the tariffs and trying to time various inventory movements. You've mentioned already a couple of times on your own end, customers seeing some softness in demand. You've weathered the storm really, really well over the last 6 months that the financial results are clear on that. I guess what I'm wondering, Graham, is what do you worry about. What keeps you awake at night? Is it the fact that customers are getting more price sensitive and you have to make sure that you are delivering value to make sure -- or either your perception of value add to a customer has to go up? Is it inventory holding from retailers again, I mean, that causes a lot of inefficiency in your system. I'm just trying to get a sense of what your -- what keeps you awake at night at the moment?
Graham Andrew Chipchase: Yes. At the moment, it's a bad cough, it's keeping me awake at night. But I think generally, I would say, the things like the inventory optimization, deoptimization is a -- it's a temporary dislocation. So over a period of time, that sorts itself out. I think a prolonged period where consumers are feeling like they need to hold on to their money rather than spending it. That's an issue. But really, it doesn't keep me awake at night because eventually, people need to eat and drink, and that's kind of what affects our volumes. I start thinking more about ensuring that we are delivering value for our customers. And I think we have this conversation in the past when everything was very conducive to us being able to get price increases in the industry getting price increases. I always said that at some point, we're going to have to show that we are delivering superior value for our customers compared to their other options. And we were working on that. And what I'm pleased about is we are beginning to deliver on that. So if you look at all our customer- related metrics that are moving in the right direction then it's things like being able to say, if we have better behavior, for want of a better word, in terms of people returning the pallets back quicker, we will be able to give them a lower price and create new value for them. And if we can get the insights from data we can work together with customers, retailers and manufacturers to eliminate waste from the supply chain and share that value. I think the 1 area where I think we still got a bit of works to do is quality. So we are reinvesting some of the benefits we're getting from productivity into quality because I think that is something, not only from just the -- we all know the Brambles and CHEP story of the past. We do have to keep an eye on quality. But I think also there's a systemic move, which is as more and more of the customers and the retailers have automated processes within their DCs. I don't think, you need a higher quality standard pallet than we've got, but you need to make sure that consistently, you are delivering the quality that we're meant to be delivering to our customers, and that's something we're making investments in now to ensure that we do that. So that's the thing that sort of keeps me awake a little bit at night is if we don't do that, then we have got a bigger problem with our customers, and it's just with the business model. But we are on top of that and are working on it. Beyond that, I think it's -- clearly, I want to make sure that we deliver on and really change the business through digital. And that's -- I'm not -- again, it doesn't keep me awake night, but it's something that's top of mind.
Scott Ryall: And lucky in for what it's worth. Good on you for reaching the quarterly revenue numbers.
Operator: Your next question is from Peter Steyn from Macquarie.
Peter Steyn: I was keen to just explore the x-axis of your table on Page 67 of the annual report, move up in your ROCI intentions or at least the targets. Could you sort of step us through, given all the conversation about balancing price and value with customers, how you see the key drivers of that improvement over the next few years. It's obviously still a fairly meaningful step-up from where we are just under 22% today?
Graham Andrew Chipchase: Yes. So when we're looking at REM targets, there's another sort of factor which comes in, which you don't really want to set a threshold below where you actually are. So one of the drivers for that grid now is we're at 22% now pretty much. And therefore, our [ REMCO ] decided -- and I think it's a very acceptable practice that the threshold then starts at 22%. You can then argue and we've said -- we've guided to the fact we think ROCI will go up a bit this year. So target 23% and to give us a bit of stretch, max at 24%. Now that's fine. That's, if you like, a pretty mechanical way of setting the grid. What we are very conscious of is that ROCI doesn't just keep on exponential increasing because then you start driving the business and running the business into the ground, and we do need to reinvest in things like digital, but quality as well and other things. So you go below that grid and you see the paragraph, which says that we are going to look at it again over the course of the next 12 months because I think it makes much more sense to tweak that part of the LTI and have it much more closely aligned to the investor value prop, which I think we need to really launched that in '24. So it's taken a bit of time for people to get comfortable with it. But I think having something that's related to mid-single-digit revenue growth, which is not that far away from obviously where the revenue part of that grid is at the moment with ULP leverage and with delivering cash flow. That for me, strikes me as a better place to go than just to focus on ROCI. And as we've said, we expect to invest in things like S+ and quality over the next few years. Therefore, without wanting to give any numbers, you would expect the ROCI not to be increasing by leaps and bounds over the next few years.
Peter Steyn: Got you. That was useful. Joaquin, just a very quick one, a small detail, but your interest guide certainly looks like it's headed up driven by leases. Perhaps if you could just step us through very quickly your expectations for '26 on interest?
Joaquin Gil: Peter, so in terms of our interest costs under the FY '26 considerations on Slide 27, we outlined that we expect net finance costs to increase by $30 million. So that's the number. And it's essentially exactly what you said, largely lease renewals as well as some new leases. Obviously, at higher rates particularly, we're seeing that in real estate in the U.S.
Operator: Your next question is from Jakob Cakarnis from Jarden.
Jakob Cakarnis: Just a follow-up for Joaquin. Slide 26. Just on the overhead cost reduction, the restructuring. Can I confirm that, that $30 million in the first half is going to be taken below the line. But I just wanted to check the wording, you're saying a net benefit of $15 million in '26. Am I right in thinking the total above-the-line benefit from restructuring was $45 million. So the $30 million cost plus a $15 million benefit. And can you just clarify for me the restructuring costs are taken below the line, but the benefits are taken above?
Joaquin Gil: Jakob. No, look, just to be clear, we don't take anything below the line. You saw that also when we did our Shaping Our Future. So what we were just trying to guide there is to help people understand that there would be a $30 million of costs incurred in the first half. Then that -- the net benefit over the full year is $15 million. And then when you get into the following year, obviously, -- you not only don't have to spend that $30 million, but obviously, the timing means that you generate extra savings. So we were just helping people be able to guide first half full year and then what are the benefits in the following year. Does that help?
Operator: [Operator Instructions] There are no further questions at this time. I'll now hand back to Mr. Chipchase for closing remarks.
Graham Andrew Chipchase: Great. Thanks very much for all of you for dialing in and for the questions. Look forward to seeing you over the coming days and weeks. But I hope you will agree that another really strong set of results for us for '25 and looking forward with lots of confidence and optimism for the next 12 months. Thanks a lot.