Downer EDI Limited (DOW) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Downer Group FY '26 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Peter Tompkins, CEO. Please go ahead.

Thank you, Drew. Good morning, and welcome to Downer's 2026 Full Year Results Presentation. I'm here today with our Group CFO, Mal Ashcroft. And after our prepared remarks, we will open up for questions. Turning to Slide 2 and the Downer Advantage. Downer is a leading provider of integrated services. We plan, deliver and maintain essential infrastructure that enables communities to thrive. Our capabilities span all stages of an asset's life cycle, supported by our Australian and New Zealand presence, our scale, local supply chains and established positions in sectors with long-term demand drivers. 4 tailwinds underpin these strengths. First, the energy transition and data centers, where investment in grid transformation, network resilience and digital infrastructure creates opportunities for our power, water, telecommunications and civil infrastructure businesses. Second, in defense, where we've been a trusted delivery partner for more than 80 years. Recent wins reinforce our strengths in professional services, planning, constructing and maintaining defense assets. The third is population growth, which continues to drive demand for transport, waste, water, social, housing, health, education and other essential services. And finally, local industry revitalization and the realization by governments that we need to have a higher level of self-sufficiency and industrial capacity. Downer is a sovereign prime contractor with a technically focused workforce of approximately 23,000 people and an extensive network of suppliers and subcontractors. And you'll see these themes throughout today's presentation as we cover our performance and our future opportunities. So turning to our key messages on Slide 3. FY '26 saw earnings growth, margin expansion and cash conversion above our target from a higher quality, more resilient portfolio. The result reflects our focus on operational discipline, revenue quality through the application of our risk guardrails and a more consistent project execution, generating higher margins. As a result of this focus, we're seeing a pattern where profits are growing year-on-year. The portfolio is demonstrating increasing resilience. Earnings are improving and shareholder returns are strengthening. This resilience was reinforced in the final quarter of the financial year with the backdrop of the Middle East conflict and our ability to navigate the majority of commercial and cost pressures. Slide 4 illustrates that track record of consistency that is delivering. FY '26 underlying NPATA increased 10% to $306.7 million, which was within our guidance range and statutory NPAT increased 51%. Underlying EBITA increased 6% to $503 million. These earnings were cash backed with a normalized conversion of 91%. Our balance sheet strengthened further with net debt to EBITDA reducing to 0.8x. Another illustration of progress is our margin trajectory shown on the right-hand side of the slide. Underlying EBITA margin improved to 5.1% in FY '26 compared with 4.4% in FY '25 and 3.2% in FY '24. And over the 2 years for FY '25 and '26, we averaged a 4.7% margin, which exceeded our management target of 4.5% that we set for ourselves at the beginning of our transformation program. Turning now to Slide 5. Our balance sheet, cash generation and earnings have allowed us to invest in future growth while returning capital to shareholders in a measured way. The final dividend of $0.163 per share is 100% franked, taking total dividends for the year to $0.292 per share. We also grew earnings per share to $0.429, representing a 3-year CAGR of 26%. In September '25, we commenced a share buyback program of up to 5% of issued capital. Approximately 37% of the program has been completed, and it will continue in FY '27. Since July 2023, Downer's 3-year total shareholder return of 118% has outperformed the median TSR of the ASX 100, excluding financials by approximately 6x. Turning to Slide 6. Revenue was in line with our expectations, reflecting our focus on quality and margin expansion. '26 revenue was $9.9 billion against FY '25 pro forma revenue, which excludes those businesses exited as part of our portfolio optimization program, revenue declined by 4.6%. And when taking into account the foreign exchange translation of a weaker New Zealand dollar, revenue was down 2.8% on the prior corresponding period, and Mal will speak to the specific drivers of the remaining differences shortly. Turning now to our margin performance on Slide 7. Underlying EBITA increased to $503 million with an EBITA margin of 5.1%. On a pro forma basis, EBITA increased 9.3%. This result speaks to the benefits of a higher-quality portfolio, more disciplined contract selection and improved operational delivery with a cost to serve that is reducing as a result of our transformation initiatives. While there is still more work to do, the result demonstrates good foundations to make progress towards our FY '30 management ambition of achieving an EBITA margin towards 6%. To Slide 8, during the year, we secured a number of high-quality contract wins in our core markets. And I note here that the values do not exclude -- do not include extension options, which apply to a number of these contracts. These were headlined by the $3 billion property and asset services contract, which expands our geographic footprint from the previous EMOS contract to cover 2 of defense's largest regions, which, by number, represent more than half of defense's total physical footprint. Our water business secured $1.5 billion in new work across Australia and New Zealand, including a very significant urban utilities contract, which reinforces our strong position in the growth corridor of Southeast Queensland. In Transport, we secured 4 NZTA State Highway maintenance contracts worth approximately NZD 1.5 billion, and we commenced the Atai Road Alliance worth NZ $310 million. In Australia, we were awarded the Transurban Northern New South Wales contract, which comprises the NorthConnex Tunnel, which we have maintained since 2020 as well as adding the M2 motorway and Lane Cove Tunnel. Facilities secured a new long-term partnership with Stockland to deliver integrated facilities management for all of their assets and communities in New South Wales, Victoria, Queensland and Western Australia. Energy & Utilities won a long-term contract worth $500 million to maintain Chevron's Western Australian assets, and we also secured power projects worth approximately $450 million. Now on to Slide 9. These awards contributed to the $12.2 billion of new work in hand secured during the year, which is a 10% increase on work in hand to $38.5 billion. This is a high-quality order book with around 93% being services-based and 90% government-related. Combined with the long-term nature of many of our customer relationships, this provides strong earnings visibility and resilience. And we start FY '27 with over 70% of secured revenue, which is ahead of where we started FY '26. Now on to Slide 10, which is an update on the Middle East conflict and its impact on fuel, bitumen and our broader supply chain. Our direct fuel exposure remains limited at less than 1% of our cost base. Fuel cost inflation caused some earnings leakage during the year. However, this wasn't material to the result and the vast majority was recovered through pass-through mechanisms. Bitumen prices rose about 50% in April and remained elevated through the fourth quarter. The commercial frameworks for cost pass-through and repricing were also effective in protecting margins against most of this exposure. Our reclaimed asphalt pavement capability also provided a competitive advantage. By utilizing recycled content of up to 70% compared with around 30% for many peers, we reduced reliance on imported bitumen, helped customers manage cost pressures and improve their sustainability outcomes. I'll now move to the segment updates, starting with Energy & Utilities on Slide 11. Energy & Utilities delivered strong earnings and margin improvement in FY '26 with EBITA up 20% to $140.9 million off the back of a significant improvement in EBITA margin, which was up 1.5 percentage points from 4.2% to 5.7% in FY '26. Revenue was $2.5 billion and work in hand increased 12% to $5.7 billion. The improvement came from disciplined project selection, a lower cost to serve and the continued application of our risk guardrails. We also benefited from higher activity in power projects and growth in water. These gains were partly offset by the previously flagged lower volumes in telecommunications following the consolidation of suppliers and lower volumes, which was the principal reason for our lower revenue in the period. We see strong structural demand across markets where we hold leadership. The water infrastructure pipeline remains positive. The energy transition is driving investment in transmission, renewables, battery storage, gas and critical minerals. Turning to Slide 12. Transport delivered EBITA of $297 million, up 6.8% on '25 and an EBITA margin of 5.7%, which was up 0.5 percentage point. Revenue of $5.2 billion and work in hand of $17.2 billion remained relatively flat. Revenue reflected lower volumes in New Zealand, the application of risk guardrails for Hawkins and the completion of several major projects in the first half. This was partly offset by strong delivery from the Queensland train manufacturing program. We made a significant leadership change in April with Doug Moss joining as Chief Operating Officer of Transport & Infrastructure. Doug is a highly respected industry leader with over 25 years' experience, and he will lead our strategy to realize the significant potential in this business. Operationally, we saw signs of stabilization in the Australian Road Services business in the second half, while our New Zealand business kept improving contract performance despite some softer volumes. The Auckland City Rail Link project reached practical completion in June ahead of its official opening next month. And this was a major achievement for Downer delivered under an alliance contracting model that is world-class, and it opens soon. We achieved a key milestone on the Queensland train manufacturing program with completion of the Torbanlea facility in June, marking a shift to rolling stock manufacturing activity. The first train prototype is currently being tested ahead of its arrival to site later in the year. We also completed the divestment of our interest in Keolis Downer, which generated $69.5 million in sale proceeds and $27.3 million in dividends. Two facilities now on Slide 13, which delivered another period of steady performance. Revenue was relatively stable at $2.1 billion and EBITA of $143.5 million delivered a margin of 6.8%. And as expected, the PAS mobilization moderated earnings in the second half, and our focus continues to be on building volumes to the targeted run rate in the first half of FY '27, which is tracking to plan. And outside of defense, we saw solid performances across government and integrated FM and further benefits from operating model improvements and investment in work management systems. Importantly, work in hand increased 20% to $15.6 billion in the year, which reflects our success in securing several long-dated contracts, including PAS and Stockland. We remain confident about facility's medium-term outlook with a pipeline underpinned by defense, government and commercial outsourcing. Turning to Slide 14. Downer operates in growing markets that are aligned to our core capabilities and experience. Across all our segments, we estimate our addressable markets at around $127 billion, underpinned by maintenance, renewal and modernization of essential infrastructure. These opportunities are spread evenly, reducing reliance on any single market and supporting more resilient growth over time. We focus on those opportunities where our scale, strong customer relationships and technical capability provides an advantage. These opportunities are assessed against our risk appetite, return requirements and delivery capability. And Slide 15 shows our pipeline of some specific opportunities we're tracking. We continue to see positive demand profiles, which underpin our FY '30 management ambitions and give us confidence in returning to top line growth. In Energy & Utilities, we see high growth in transmission, grid expansion, network resilience and water infrastructure. Growth in AI, cloud and data centers is driving demand for the power, water and telecommunications and other infrastructure that underpins them, creating opportunities that closely match our capabilities, which I'll expand upon more in a moment. In Transport, we see opportunities in maintenance, asset renewal and network resilience. In rail, we are targeting the Melbourne MR5 train franchise and the future fleet initiative in New South Wales. And for Road Services in Australia, we saw markets stabilize through the second half of FY '26, and we are anticipating further improvement in FY '27. In New Zealand, we are preparing tenders to target key opportunities that sit within the New Zealand $14.8 billion road maintenance and construction pipeline. In Facilities, we see opportunities in defense, health, education and social housing. These are long-dated duration partnerships where customers value trusted providers with scale and a track record of managing critical assets. We are now seeing these opportunities come to market, including key infrastructure programs supporting AUKUS. Now Slide 16 highlights the emerging opportunities in data centers, where capacity is projected to grow from around 1.7 gigawatts today to over 9 gigawatts by 2030, and this is supported by approximately $150 billion of projected investment. This is not a new market for Downer, and we have delivered around $1 billion of data center-related work over the past 5 years across building, power, telecommunications, water, civil infrastructure and facilities management. That breadth is really important and allows us to participate across the full value chain and operating life cycle of these assets. We are currently engaging with customers about their future development programs. And with a large opportunity pipeline, we believe this can become a meaningful growth contributor over time, pursued under disciplined commercial models that appropriately balance risk and return. Turning to Slide 17 and ESG. On safety, our total recordable injury frequency rate of 2.21 per million hours worked stayed below our target of less than 3, and we progressed our critical risk control and safety improvement plans, and we are continuing to challenge ourselves as an organization to consistently improve. However, a workplace fatality in New Zealand during the year was a tragic incident that overshadowed this progress and was felt deeply across our business. And our thoughts remain with the family, friends and workmates of our colleague. On emissions, we cut absolute Scope 1 and 2 emissions by 7.6% and remain on track for our target of a 50% reduction by 2032 and net zero by 2050, subject to assumptions. We released our ESG impact report this morning as part of our reporting suite. I encourage you to read this and learn more about these strategies, the programs and initiatives that support our targets. We have continued to invest in leadership capability, people engagement, people services, including our belonging, our sustainable procurement programs, cyber resilience and AI and data capabilities. I will now hand over to Mal, who will take you through the group financials and capital management initiatives.

Thanks, Peter, and good morning, everyone. FY '26 was another year of consistent delivery with earnings growth, margin expansion and cash conversion ahead of target. Importantly, the result reinforces the improved quality of earnings across the portfolio and the operational and financial discipline we've embedded over the past 3 years. We have delivered ongoing consistency in our delivery and our period-on-period improvement with margin expansion, cash back earnings uplift in our profitability and strengthening of our balance sheet. For comparability today, I'm referring to pro forma results, which adjust for the contribution of divested businesses and individually significant items as these present the most relevant and comparable view of our business performance. Pro forma revenue of $9.8 billion was lower year-on-year, in line with our expectations. This reflects the deliberate actions we've taken to improve the quality and risk profile of the portfolio, including disciplined contract selection, application of risk guardrails and the impact of previously flagged themes impacting our first half results. The top line result also reflects previously raised telco headwinds, the application of the guardrails in Hawkins, the mobilization profile of new contracts, notably in defense and water and the $182 million impact of FX translation from the New Zealand dollar deterioration against the Aussie dollar, most of which occurred during the second half. EBITA increased 9.3% on a pro forma basis to $497 million with the underlying EBITA margin lifting to 5.1%, up approximately 70 basis points period-on-period. Over the 2-year FY '25 to FY '26 period, Downer achieved an average margin of 4.7%, exceeding our greater than 4.5% management target established as part of the transformation program. EBITA improvement was underpinned by a 20% increase in Energy & Utilities, a 6.8% uplift in Transport despite market conditions and a reduction in our corporate costs of 6.2%. Our statutory NPAT increased by approximately 51% to $225 million. Our underlying NPATA was up 9.8% to $307 million, and our pro forma NPATA was up 15.4% to $301.5 million. Depreciation and amortization, excluding the amortization of intangibles, reduced by 16% to $263 million in the period, reflecting our capital expenditure discipline, the cost optimization program benefits, particularly on property and fleet reductions and IT rationalization. D&A is expected to be lower again in FY '27. Our net interest expense reduced by approximately $15 million to $68 million in the period due to lower net debt and reduced lease liabilities, which was better than expected. And our effective tax rate was 29.5%, which was broadly in line with expectations. Interest is expected to be higher in FY '27 due to higher weighted average cost of debt and higher net debt levels in FY '27. While adjusted operating cash flow was slightly lower year-on-year, this was primarily impacted by the FX translation on cash of $38 million. Importantly, we delivered another cashback result with normalized cash conversion of 91.1%, ahead of our target of greater than 90%. We expect cash conversion in the first half of '27 to be lower, driven by a larger-than-normal weighting of earnings to the second half, the timing of milestone-based payments on our QTMP project, the impacts of Payday Super and additional cash taxes taxable earnings increase and the mobilization profile of facilities contracts, including the PAS and Stockland contracts. Turning to Slide 20, the reconciliation of pro forma to statutory results. Pro forma is our underlying earnings, excluding contributions from divested businesses to enable a like-for-like comparison between 2 periods. Pro forma EBITA was $497 million, up 9.3%. Underlying earnings represents the statutory result adjusted for individually significant items. Underlying EBITA for the year was $503 million, up 6.1%, while statutory EBITA was up 30.1% to $404 million. Our total ISIs were $99 million, which was 40% lower than the prior period, with the nature of adjustments being consistent with prior periods. With our portfolio simplification program largely complete, we anticipate underlying and pro forma to converge in FY '27, simplifying our reporting. Our ISIs primarily relate to 2 categories, $46.9 million transformation and restructuring costs, including ongoing investment in technology and operating model changes. These programs continue to deliver strong financial returns for shareholders, which are exceeding our internal investment return hurdles and delivering significant ongoing cost reductions supporting our margin improvement. Second category was $33.9 million of impairments and asset-related charges, which primarily relate to $14 million for a rail facility previously impaired in the prior year and $11 million related to impairment of property on site rationalizations and asphalt plants in Tasmania, which have been loss-making. Moving to Slide 21, our cash result. Our statutory operating cash flow was $503 million, which when adjusted for the impact of the increased tax payments of $29 million, the negative FX translation of $38 million, partially offset by the improved interest payments of $15 million was 1.2% lower year-on-year. When operating cash is normalized for ISIs, we delivered a cash conversion of 91.1%, exceeding the 90% target, reflecting our ongoing strong focus on cash. Investing cash flow reflected the early stages of our return to an investment cycle with gross CapEx up by 18% or $21.9 million to $144.9 million, which was partially offset by $70.7 million of net divestment proceeds largely from the sale of our interest in Keolis Downer completed in December of '25. Repayment of leases reduced by $19.3 million to $128.3 million due to our cost optimization focus on fleet and property. We also invested approximately $58.9 million in transformation activities, which aligned with our guidance at the half year. We returned $286 million to shareholders through $189 million of dividends and $96.5 million from our share buyback program. Our share buyback program will be ongoing in FY '27. Together, these actions reflect the strength of our capital position, our confidence in the medium-term outlook and our continued discipline in balancing investment in growth and returns to shareholders. We enter FY '27 in a strong position with approximately $770 million in cash, $1.8 billion in liquidity, providing significant headroom to fund growth and to optimize shareholder returns. The balance sheet is well positioned to support our transition to growth. Net debt-to-EBITDA was 0.8x, well below our 1.5x target and improved from 0.9x at 30 June 2025. Interest cover increased to 10.6x. Stronger capital position reflects continued profitability improvement and disciplined cash generation with net debt reducing 2% year-on-year to $254 million at 30 June '26. We maintained our Fitch BBB investment-grade rating and remain compliant with covenants with headroom across key credit metrics. Funding has also been simplified and extended the repayment of our USD 100 million and AUD 30 million USPP notes in July '25, together with our $400 million AMTN issuance in April 2026, extended the weighted average maturity profile to 4.1 years from 3.1 years at December '25, while diversifying funding sources and lowering fees. The weighted average cost of debt was 5.7% in FY '26, slightly up from 5.4% in FY '25 and is expected to increase in FY '27, reflecting a full year run rate of the refinancing completed during FY '26, high average debt and higher weighted average cost of funds. We also retained substantial bonding capacity with around $680 million available under a $1.8 billion facility. This financial flexibility supports future growth opportunities whilst maintaining balance sheet discipline and capital returns. Turning to our portfolio and capital return choices on Slide 23. Our capital allocation framework remains unchanged, invest where returns exceed our cost of capital, maintain balance sheet discipline and return surplus capital to shareholders. We govern our investment decision-making through an investment committee where business cases are reviewed and tested for alignment with strategy, cost estimates, risks are assessed and the achievability of targeted benefits are assessed against minimum return thresholds. In FY '27, we commenced the transition to sustainable growth. And with leverage below our target, we have capacity to invest in growth whilst continuing to deliver attractive shareholder returns. Our investment is increasingly focused on 2 areas. First, organic and growth CapEx will be aligned with our view of markets, our opportunity pipeline and will be focused on improving efficiency, capacity and productivity across fleet, asphalt plants and operational technology. During the period, our gross CapEx was $145 million, up 18% as we return to an investment cycle where we expect our gross CapEx in FY '27 to increase towards our historical average range of 1.8% to 2% of revenue. We're also targeting capability investment into priority growth markets. From FY '27, this is expected to require approximately $20 million of additional operating expenditure to enhance capability, support increased business development and tendering costs and where appropriate, expand our addressable market in support of our market ambitions or management ambitions. Our second area of focus is our transformation initiatives, which are focused on our drive for cost leadership by simplifying operations and modernizing platforms, tools and data foundation to improve our execution, productivity and decision-making. During the period, approximately $58.9 million was invested towards our transformation program, and we expect this to increase to approximately $70 million for FY '27. The total program spend beyond FY '27 is under review to assess the impact of AI on proposed and in-flight programs with an update to be provided later in the year. I'll discuss the transformation program further on the next slide in a moment. On M&A, our approach remains selective and disciplined, having divested 11 businesses and contracts since FY '23, the portfolio simplification program is now largely complete. The focus now is on targeted opportunities that strengthen capability in core or adjacent markets are appropriately sized and deliver attractive risk-adjusted returns. We have completed a market scan review of potential targets by each of our segments and have participated in processes for a number of targets during the year, which we have ultimately not pursued to date. Shareholder returns also remain a priority. We continue to target a fully franked dividend within our 60% to 70% NPATA payout range alongside the on-market share buyback program, of which we've completed 37% to date. Overall, our strong balance sheet provides the flexibility to invest to grow while maintaining disciplined capital allocation and shareholder returns. Moving to Slide 24. Our transformation program remains focused on practical outcomes, improving our ability to attract, retain and develop our people, our contract delivery capabilities, lifting workforce productivity, strengthening performance insights and reducing cost to serve. As part of this, we are continuing to modernize our core platforms and data foundations, including our enterprise data lake, which will support more effective use of AI over time. We have made good progress during FY '26, including the implementation of updated work management and project management platforms. We continue to invest in our Databricks-powered enterprise data lake, giving us a single trusted foundation for data, which will be key for accelerating our adoption of AI-driven insights. We launched our new project performance reporting platform, which provides improved transparency of contract performance. We've upgraded a number of end-of-life ERPs and aging IT infrastructure to simplify our technology landscape. And we've invested in lifting our AI capabilities around data foundations, engineering, tooling and training with a greater enterprise strategic focus on the impact of AI in our business. In summary, FY '26 demonstrates the continued strengthening of the group. The portfolio is higher quality, margins have improved, earnings are cash back and the balance sheet provides flexibility. We're now moving from turnaround to disciplined growth with the financial capacity and operating focus required to support delivery of our FY '30 management ambitions. I'll hand back to Peter to close with priorities and outlook.

Thank you, Mal. On Slide 26 and our updated balance scorecard, which outlines our management ambitions for FY '28 and FY '30. The next phase of transformation is intended to enable sustainable growth. Each of our businesses have defined target areas of opportunity and initiatives, including funded investment to lift capability and support business development. At a group level, we're targeting underlying EPS CAGR of 9% from FY '25, which is reflected in our management LTI scorecard and measured through to FY '28. We're also targeting revenue growth of 4% to 5% CAGR from FY '26 to FY '30 and continued margin expansion towards 6% in FY '30. And finally, turning to outlook on Slide 27. We enter FY '27 having delivered another year of improved operational and financial performance. And for FY '27, on an underlying basis, we are targeting revenue and earnings growth and EBITA margin improvement. However, with a larger-than-normal skew to the second half, with first half revenue, earnings and EBITA margin lower than the prior corresponding period with a return to growth in the second half. And this reflects the anticipated timing and outcome of key contract awards in power projects and social housing. The ramp-up profile of secured work in water, defense and integrated facilities management, the improvement outlined in Australian road services volumes skewed to the second half and QTMP transitioning from construction to rolling stock manufacturing, which reduces transport revenue. Looking beyond FY '27, we remain positive on the medium-term outlook and our FY '30 management ambitions. Our strong market positions and exposure to attractive sectors, including the energy transition, data centers, defense and transport infrastructure provide a solid growth platform. We'll now open the call up to questions.

[Operator Instructions] Your first question comes from Rohan Sundram with MST Financial.

Just 1 from me. Just -- Peter, I take on board your comments earlier around the greater than 70% of budgeted revenue secured. Maybe if you can just talk through how you rate your visibility over FY '27 and maybe how you're seeing the road services environment as well? That would be great.

I think the level of confidence in being able to see the visibility speaks to the way in which we have provided the outlook statement. And as we said throughout the commentary, we see those projects that are being awarded shortly and have a feel for the timing of those. And I think more importantly, too, is the ramp-up of those jobs, we mentioned water, defense and some of those facilities management contracts. where they are secured and we've got a good visibility of run rate. And we spoke in the presentation about that trajectory and ramp-up that we've got good line of sight on. So that's probably a long way of saying, yes, we've got good visibility of all of that. If we then go back to the second part of your question, which is Australian roads, you've been following this for a while, and '23 was a bit of a peak and then '24, '25, '26, we've been providing commentary about transport agency spend. And in the second half of '26, we actually saw that stabilize and saw a bit of improvement coming out of Victoria, in particular, which is the one that has had quite a bit of downturn. We think, though, that based off the second half performance in '26 that we're going to see those volumes continue to improve and return to that more seasonal SKU where we are out on networks delivering budgets for customers with that better weather pattern. So, we'll see that come through, I think, in the second half at a more historical level of performance.

Your next question comes from Nicholas Daish with RBC.

Just building on that last question. I mean, just the guidance itself does feel contingent on those 4 dot points in the presentation. I suppose the one that I'm really curious on is the anticipated timing and outcome of key contract awards. I mean, I feel like you wouldn't have that comment in there with a reasonable degree of confidence in success. Can you try and help us with that a little bit, perhaps a little bit of color on the projects themselves and understanding a little bit more around timing to the extent you can comment, please?

Look, I think, again, reinforce the point just around that view of what's ramping up. And in relation to those areas where we're waiting the timing and outcome of key projects, they are the more significant ones where we're in the last parts of a process. We're 1 of 2. We've got a reasonable track record of winning more than our fair share in those areas. Certainly, it's not binary, binary, but significant enough for us to be able to call out because of the impact and ramp-up into the second half and the announcement of award, which won't be until the end of the first half.

Got it. Okay. And the second one is just around the revenue targets and EPS targets that you have EPS ahead of revenue. I'm just curious to understand, is that reflective of an elevation in risk appetite for the business? Or is that more so a reflection of the rebasing of the business and commercial -- the method in which you engage with your customers from a commercial perspective improving over the last 3 years. I'm just curious about the shift between the EPS growth targets and revenue growth targets, please, and how that relates.