Fletcher Building Limited (FRCEF) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Fletcher Building FY '25 Full Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Andrew Reding, Managing Director and Group Chief Executive Officer. Please go ahead.

Good morning, and welcome to the presentation of our full year results for the 12 months ended 30th of June 2025. And I must firstly apologize if I cough and splutter a little bit, as I picked up an allergy overnight. And if you're in this room, you'd notice everybody is at one end and I'm at the far end. So moving to the agenda on Slide 3. I will provide an overview of FY '25 as well as the operating performance of our divisions, and then Will Wright, our Group CFO, will talk through our financial performance. I'll then cover the stakeholders that are so important to our business and close with how we are planning and thinking on the year ahead, and we'll take questions after that, but please keep these to 2 each. Though you are welcome to send through any more or additional questions to the media team. Turning to Slide 5, a summary of our financial performance. F '25 was a challenging year across all sectors with revenue and margin for the group, both down. Net loss for the year was $419 million, which includes $702 million of significant items, and Will is going to speak about these in more detail shortly. On a more positive note, we made substantial progress on our balance sheet reset including net -- reducing net debt to $999 million following the successful capital raise and divestment of Tradelink. CapEx was down, reflecting on our disciplined approach to capital allocation and although net cash from operating activity was down, it was still robust given the trading environment. While the macro backdrop remains tough, we are positioning the business for the realities of the current market. Moving to Slide 6, our medium-term strategy. At our Investor Day in June, we presented a clear focused strategy to improve performance and deliver sustainable shareholder returns. This outlined a medium-term focus on manufacturing and distribution of building products and materials. The strategy rests on 4 key pillars: Firstly, taking immediate action and executing our turnaround plan to restore profitability and cash flow to target levels; secondly, ensuring high performance in every part of the organization; thirdly, empowering our leaders to make faster and more effective decisions closer to the customer; and fourthly, ensuring we have a resilient capital structure that supports investment while protecting against volatility. This is a deliberate and disciplined road map that will lead to a more focused, profitable and resilient Fletcher Building. Moving to Slide 7. Over the past 12 months, we have acted decisively to reshape the business with many key priorities already implemented and clear actions for the short and medium term. In Australia, steel and corporate, we've undertaken structural changes that will deliver around $15 million a year in annualized savings. We have closed underperforming operations, halted the SAP rollout and reduced forward capital commitments. Our corporate functions are being decentralized to give divisions and business units more autonomy and accountability. While the divisional restructures, which are now completed, position us to focus our resources on the divisions and the projects that would generate the highest returns. We are progressing a number of potential divestments, including our Construction division, CSP and our 13.4% equity stake in the Puhoi to Warkworth toll road. Today, we are also announcing that we're moving to undertake a strategic review of our Residential and Development division, which could result in divestment options being presented to us. We still have more work to do. Over the medium term, we will embed the new operating model and continue simplifying the portfolio. And as balance sheet targets are met, we will reset our dividend policy in order to deliver sustained shareholder returns. Slide 8, operational highlights. To now look at some highlights from the year, which illustrate the underlying operational strength of the group. First, has grown its ready-mix market share to approximately 40% nationally and more than 50% in Auckland, a position that will be further strengthened when our new 882 Great South Road batching plant comes online in FY '26. Winstone Wallboard's Tauriko plant has consistently achieved A-grade recovery yields above our 95% target. And Waipapa Pine is now operating at full capacity and is demonstrating the benefits of vertical integration with place makers. These achievements demonstrate that despite market challenges, we are holding operational momentum. Slide 9, progress on legacy risks. In parallel with improving our day-to-day performance, FY has been closing out historical legacy issues that have consumed management attention and balance sheet capacity. While some process are ongoing, during FY '25, we have materially reduced the number and scale of legacy risks, allowing us to focus more fully on the future. At NZICC, construction works are effectively complete. Acceptance testing and compliance processes are well underway with client handover expected during calendar year 2025. We intend to vigorously defend ourselves against SkyCity's legal proceedings and are confident in the position that we hold. And court proceedings against the roofing subcontractors on NZICC are nearly complete with judgment expected in the second half of FY '26. No benefit has been assumed for this. On the Western Australia pipe matters, the industry response has made meaningful progress and the remediation work of the around 40 participating builders is starting to build momentum. As at 30th of June, 996 ceiling pipe replacements were complete, 55 homes had been fully remediated and over 2,000 homes had leak detector units installed. Costs remain consistent with our provision estimates. For the Puhoi to Warkworth project, full works completion was approved in May 2024, and we've now settled our COVID-related claims with NZTA and the weather-related in landscape events with insurers. Slide 10. Moving to Slide 11, divisional performance. There are a lot of numbers on this page, so I won't talk to this slide as I will be covering the divisions individually later in the presentation, but it should be a useful dashboard going forward and also 1 that will get smaller as our divisional structure simplifies. The number of red arrows highlight just how widespread and difficult the current stage of the cycle is for the building and construction industry. Moving to Slide 12, Building Products. The Building Products division was impacted by cost inflation, softer residential demand and lower volumes, but key business units still maintain high operational performance. EBIT for Winstone Wallboards held up well with tight pricing controls and a well-executed plant production ramp-up. Laminex New Zealand maintained resilient sales in Melteca and particleboard and Comfortech saw solid demand for Pink Batts and PinkFit though challenged by higher energy costs and competitive import pricing. Moving to Slide 13, concrete. Concrete delivered a resilient result given the market backdrop and Golden Bay MVAC breakdown. Golden Bay's EBIT was impacted by both logistics challenges and lower pricing, but asset reliability remained high and cost control was strong. Winstone Aggregates delivered a stable performance despite weather and project disruptions. First was able to make market share gains with demand from the Auckland Airport expansion and other major infrastructure projects, providing solid volume support in the second half. Moving to Slide 14, distribution. Distribution delivered a disappointing result with a general market decline in historic loss in share impacting volumes, while intense price competition has compressed margins. Frame and Truss volumes did see positive momentum, rising nearly 5% on last year, and PlaceMakers and Mico maintained strong customer engagement and service levels. By year-end, we had largely implemented an operating model adjustment and cost out program, which are aimed at footprint optimization, better cost efficiency and restoring margins in FY '26. Pleasingly, both PlaceMakers and Mico grew their market share in the latter half of the year. Slide 15, Australia. Australia experienced mixed performance. Laminex Australia achieved strong growth in premium product categories, particularly the next-generation wood grains range. Fletcher Insulation delivered record monthly output and launched 16 new products. However, Iplex Australia and Stramit faced headwinds from declining activity in their respective markets and pricing pressure. Slide 16, residential and development. F '25 saw the Residential and Development division navigate persistent demand headwinds, cautious buyer behavior and pricing pressures. Major milestones included the completion of Matai Springs in Canterbury and the launch of The Hill, in Auckland, which has achieved strong pricing for its flagship Belvedere apartments. Three Kings also reached a major transformation milestone with new housing, sports fields and roading network now opened. Lastly, the exit from Clever Core is now complete with over 50% of its staff redeployed into PlaceMakers new Frame and Truss plants. Slide 17, Construction. The Construction division delivered a meaningful improvement in FY '25, driven by successful delivery of key projects, disciplined cost management and resolution of legacy issues. Higgins contributed material to margin growth and is meeting or exceeding NZTA KPIs, while Brian Perry Civil worked on critical infrastructure projects at both Auckland Airport and Seaview Wharf in Lower Hutt. Major projects continue to deliver the Eastern busway project with the critical Ra Hihi flyover 5 months ahead of schedule, and they also secured the Riverlink Alliance project in Lower Hutt during the year. And just to recap on divisional changes on Slide 18. As many of you will recall, we announced in May FY '25 that from FY '26 onwards we will report under a simplified divisional structure. There will be 5 divisions: Light Building Products, Heavy Building Materials, Distribution, Residential and Development, and Construction. The new structure better reflects how we will operate today, focuses more accountability and increases transparency for investors. It also aligns our reporting more closely with how capital is allocated and performance is measured internally. Now I'll hand over to Will Wright and ask Will to make some comments.

Thank you, Andrew, and good morning, everyone. It's been a year of significant challenge and change. While market conditions remain tough, we've taken decisive action to reset the business, strengthen our balance sheet and position ourselves for long-term performance. Moving to Slide 20, let me begin with some updates to our reporting framework. These changes improve clarity and comparability between periods and better reflect how we manage the business. This year, we've enhanced our segment reporting to provide greater transparency. You'll see clearer breakdowns across EBIT and cash by segment and revenue, and this can be found on Note 2.2 of the annual accounts. We've also moved to align our cash flow presentation with IFRS 18, providing additional detail on operating, investing and financing activities. In particular, we are now clearer on where interest paid, interest received and dividends received fall within the cash flow statement. Turning to the income statement. Revenue for the year was $6.99 billion, down 9% from FY '24 with the largest decline in the Residential and Development division, which was down 30% from FY '24. Gross margin held relatively steady at $1.95 billion, supported by cost-out initiatives, including changes to shift patterns and procurement savings. The results benefited from a total of $200 million in gross cost-out initiatives, including a net $75 million reduction in SG&A and warehouse and distribution expenses year-on-year. There was also a series of negative impacts above the EBIT line, which will not continue into FY '26. These included the settlement of the historic P2W claim with NZTA for $16.4 million less than previously recognized, $9 million in losses relating to the Clever Core panelization facility, and $6 million of costs relating to the MVAC breakdown. Significant items from continued operations totaled $644 million, primarily driven by impairments, restructuring costs and legacy project provisions. These are covered in more detail on Slide 32. Turning to Slide 22. This waterfall chart illustrates the key drivers of EBIT movement year-on-year. As you can see, while cost initiatives delivered meaningful savings, they were not enough to fully offset the impact of lower volumes and cost inflation. The key driver of EBIT decline was volume contraction. In our manufacturing businesses, this was most pronounced in Laminex Australia and Humes, whose volumes were down 10.6% and 15.1%, respectively, in the June quarter relative to 12 months earlier on a rolling 12-month basis. And similarly, our steel businesses contracted between 10% and 15% on a rolling 12-month basis. There were some positive signs with Iplex New Zealand seeing improved volumes off the back of strong rural sales and PlaceMakers' Frame and Truss volumes improving over the last 6 months due to improving market share. Balance sheet strength was improved by the capital raise, but we have more work to do. The normalization of working capital is ongoing. However, we saw less volatility at 30 June than in prior years. Net debt fell to $999 million, down from $1.77 billion with the proceeds from the equity raise used to repay $680 million of debt. We remain above our target net debt range of $400 million to $900 million. However, we have several levers to reduce debt over time and move towards our target range. Firstly, shareholder distributions, we will use retained earnings to pay down debt. The dividend will remain suspended until we reach the lower half of our target range. Secondly, our ongoing optimization of capital expenditure, ensuring it is rightsized and not based on peak volume assumptions. We continue to review projects from across the portfolio for lower cost solutions or better phasing of expenditure. Thirdly, land. We're actively managing our portfolio of sites to release capital from underutilized or inefficient sites. This includes not only our manufacturing and distribution sites, but also our land bank within the Residential and Development division. And lastly, as Andrew has discussed, we're pursuing strategic divestments. Operating cash flow was $501 million, down from $588 million in FY '24, largely due to lower earnings. However, the impact of this was partially offset by reduction in legacy construction cash outflows and reduced cash flows relating to significant items. Investing cash flow improved significantly year-on-year, even as adding back the impact from divestments of Tradelink and the 50% share of Construction Fiji. Net outflows of $61 million compared to $398 million last year, this reflected a strong focus on disciplined capital allocation, including the scaling back of a number of projects and/or improved phasing of those projects through time. On Slide 25, you can find a breakdown of our central costs. As discussed at Investor Day, we will provide greater transparency on the quantum and nature of corporate costs moving forward. We see corporate overhead as a key medium-term opportunity for us to remove structural cost from the business. As signaled at Investor Day, we have taken approximately $30 million of structural central costs out of the business late in FY '25. This will flow into FY '26. However, much of the central costs relate to longer-term contracts and licenses that will take longer to unwind. Working capital is an area where we see significant opportunity for improvement. While we've traditionally focused on year-end cash flows, we're now shifting to a more proactive year-round approach. Our working capital cycle is too wide with too much volatility throughout the year. This leads to us having to carry greater levels of headroom in our banking facilities. And this ultimately comes at a cost. FY '25 year-end removed the volatility that has been by design. For example, we ensured all of our suppliers were paid in June. The Residential and Construction divisions have also been large drivers of near volatility. In many ways, this cycle is tied to the industries in which they operate, and this will be harder to address in the short term. Moving to Slide 27. In FY '25, we invested $313 million in CapEx and investments, down from the $420 million spent in FY '24 as we continue to focus on the scale and phasing of expenditure. $5 million of investments relates to contributions into construction JVs and the final purchase price adjustments on Waipapa Pine. $16 million was spent on stripping costs in Winstone Aggregates, which are capitalized into stock and amortized as the resource is sold. Other growth CapEx relates predominantly to the new first batching plant at 882 Great South Road and the new PlaceMakers Frame and Truss plant. The OSB plant under construction in Taupo is progressing well and remains on track for initial production mid next year. We continue to work closely with the business on the scaling and phasing of CapEx. At this early stage, we expect FY '26 CapEx to be between $320 million and $340 million. This includes $130 million on the OSB plant. Additionally, we expect to invest approximately $30 million in quarry stripping and land acquisitions and approximately $13 million on the construction of retirement village units. Moving to Slide 29. We continue to manage our lease portfolio actively with a focus on reducing liabilities and ensuring lease impacts are reflected in divisional return on invested capital calculations. Lease liabilities totaled $1.5 billion at year-end and represented 57% of group gross debt. Land and Buildings accounted for the majority of leases with plants and machinery responsible for the remainder. The increase in lease liabilities year-on-year primarily related to 2 transactions: the sale and leaseback of Steel division land and buildings at Hunua and Laminex Australia entering into a new warehouse lease agreement in Victoria. We will be more active in managing lease liabilities moving forward with an understanding that these place debt-like obligations on the business. We remain focused on reducing leverage and simplifying our funding mix. This will allow us to maintain investment-grade credit metrics and lower funding costs which currently average around 5.6% pre-line fees, down from 6.1% at the half year. The current group funding profile as at 30 June 2025, had circa $2.1 billion of total credit facilities, a reduction from $2.8 billion from a year earlier. During the first half of the financial year, the group repaid and canceled $569 million in borrowings. Additionally, in the second half of the year, we elected to redeem $80 million of capital notes that fell due in March. We have $1.1 billion in liquidity, including $916 million in undrawn credit lines. The average maturity of our debt is 2.2 years. Pleasingly, Moody's reaffirmed our credit rating in July. Moving forward, our future capital structure will focus more on domestic senior funding sources and will likely include a mix of bank, wholesale and listed debt. Slide 31 has a chart showing the components of the reduction in net debt from FY '24 to FY '25. The capital raise was the primary driver but we also saw $88 million in additional deleveraging from operating cash flows and assets. As discussed earlier, ongoing debt reduction remains a key focus. Moving to Slide 32, significant items. There are significant items of $702 million for FY '25. In the first half of the financial year, we reported $251 million in significant items. This primarily related to the joint industry response in Western Australia, which will translate into cash over a number of years and the Tradelink disposal. The NZICC additional cost to complete announced in June added another $15 million. From the strategic review, there is $380 million in noncash items and $44 million in cash items. These cash items include onerous contract provisions for SAP licenses and the costs associated with cost out and site closures. There is an additional $12 million in nonstrategic review items from the second half. This relates to legal costs incurred from legacy construction projects and the WA pipes matters. These numbers are substantial, but they reflect our commitment to reshaping the business for long-term success. The strategic review is not just about cost. It's about clarity, focus and positioning ourselves for sustainable growth. I'll now hand back to Andrew.

Thank you, Will. Our success depends on our stakeholders, our people, our customers, our communities and our shareholders. In FY '25, we worked hard to strengthen these relationships, not just through a financial lens but through a consistent commitment to safety, environmental leadership and community engagement and we'd like to enlarge on these in the coming slides. So moving to Slide 34. First, I want to acknowledge the tragic loss of Max, a team member who passed away following a crane incident in Vanuatu at the start of FY '26. This event and the 15 high-potential incidents we see each month reinforce that we can never be too comfortable. Safety remains our highest priority, and we continue to work towards our promise that everyone goes home safe every day. In FY '25, our TRIFR was 2.9%, the lowest ever recorded for Fletcher Building. Leaders completed over 19,000 critical control verifications and 25,000 leader walks. We were proud to be named Safety Leader of the Year by the Australian Institute of Health and Safety and who have been finalists in 5 categories at the National SafeGuard Awards. Amongst the many initiatives focusing on operating more safely while outstanding action is the piloting of AI technologies to improve dynamic exclusion zones around mobile plant with PlaceMakers and EasySteel achieving significant reductions in breach rates. Our people. Our people are at the heart of Fletcher Building. In FY '25, we provided 45 welfare grants, supported diversity initiatives such as Girls in High Vis and women in construction and celebrated the achievement of our Whakatupu graduates. We also launched the Sonder app across New Zealand businesses, doubling the number of employees accessing 24/7 medical, safety and mental health support. Moving to Slide 36, our environment. We have reduced scope 1 and 2 carbon emissions by 24% compared to FY '18 with 78% of our revenue now coming from sustainably certified products. Initiatives such as Plasterboard recycling with local councils, coal substitution at Golden Bay and renewable energy generation in Australia demonstrate our commitment to supporting the environment and leading in sustainable building practices. Our community. We are proud to support the communities we operate in. Across our business units, there are a wide range of grassroots sponsorships, donations and volunteering initiatives that can't be encompassed on a single page, but we've included some examples here where our teams have helped make a difference in their local communities. Slide 38 and 39, our customers. We are proud of the products and people that help our customers build New Zealand and Australia's future. Again, these are just a snapshot of the work we do every day. At Auckland Airport, Firth and Brian Perry Civil completed their largest ever concrete pour. The NZICC will be a meaningful asset for both Auckland and New Zealand, bringing large numbers of convention attendees from 2026. Humes and Iplex supported the White Kainga Ora link road project securing long-time water and power infrastructure in Eastern Porirua. At Christchurch Stadium, we supplied the full spectrum of GIB products. Iplex supplies modular form maintenance holes to new Western Sydney International Airport. And at the Te Waka Aorangi Child Wellness Centre, Laminex products were used to create durable, high-performance spaces for children with complex needs. These projects reflect the strength of our customer partnerships and the quality of our products. Now a few words about the outlook going forward. Slide 41, where in the New Zealand cycle are we? Looking ahead in New Zealand, we expect a prolonged period of subdued demand in the residential and commercial construction markets. Building merchant sales remain a reliable proxy for the sector activity and our current data shows nominal sales have fallen across the wider merchant sector tracking below prior year levels, even before adjusting for inflation. This weakness has persisted over the past 18 months with monthly rolling 12-month figures well off the peak of the last cycle. The softness is broad-based affecting both residential and nonresidential segments. We are planning on the assumption that these lower levels of activity will continue through FY '26. So our operating model, cost structure and capital plans have been set with this conservative view in mind, ensuring we remain resilient if the downturn endures while also positioning us to move quickly should demand recover. And Slide 42, where in the Australian cycle are we? In Australia, we're seeing early signs that gap between completions and commencements is beginning to close. For total dwellings, approvals and commencements are starting to align, indicating a potential stabilization in the pipeline. New house activity, however, remains slower to respond with commencement still lagging approvals. Market conditions remain mixed, while some segments show resilience, others continue to face headwinds from interest rates, labor constraints and elevated input costs. Against this backdrop, we maintain a cautious outlook and are focused on driving operational efficiency and product-led growth across our Australian businesses. So moving on to the outlook. As we look ahead to FY '26, the operating environment remains challenging, and our plans reflect that reality. In New Zealand, we expect volumes to remain low and demand subdued. While in Australia, there are some early positive indicators, it is too soon to say whether they will translate into materially higher activity or volumes. We will continue to execute our cost reduction initiatives, which will provide important support to profitability in the face of these volume headwinds. These are not just short-term measures, they're designed to structurally improve our cost base, giving us lasting efficiency gains. Our portfolio simplification work is progressing with divestments and strategic reviews underway. While these will strengthen our balance sheet, the full cash flow and cost out benefits are more likely to be realized in FY '27. Slide 45, conclusion. As we close, I want to leave you with 5 key messages. We have taken immediate action. We have renewed our focus on our operating performance and customer needs. We are on track with net debt and have clear priorities for FY '26. While the New Zealand and Australian markets are likely to remain weak in FY '26, our focus is for disciplined actionable execution, maintaining cost discipline, protecting margins, delivering operational excellence and positioning the business to accelerate when market conditions improve. Thank you for your time, and we're happy to take any questions you might have, remembering that we would like to restrict it to 2 per person.

[Operator Instructions] Your first question today comes from Kieran Carling with Craigs Investment Partners.

Andrew, well, thanks for the presentation. First question is just around the outlook statement where you've said the construction sale process and residential strategic review unlikely to result in any cash flow or cost benefits until '27. Can you just elaborate on that point? And talk us through why the construction sale process could take that long, given the inbound inquiry seem to be quite strong?

Look, it's a very complex transaction that we have to go through. So first of all, we need to engage with parties who are showing interest. And secondly, there is a lot of details that have gone through here in due diligence and so on. So I think it's quite realistic to assume that the timetable is going to push out somewhat.

Okay. And is it fair to assume that you're more looking down the path of divestment for the residential business as opposed to more of a JV model?

So it's -- we don't know the answer to that yet. So we're carrying out a strategic review. The reason we're undergoing this is because -- as we've said, the aim for the business going forward is to be the manufacturing distributor of building materials and products, and patently, residential and development doesn't fit within that model. So what we're doing is just trying to find out what options we have for the business going forward. And that, again, could be quite a complex exercise and take a period of time.

Your next question comes from Rohan Koreman-Smit with Forsyth Barr.

Thanks for the additional color in the presentation and annual reports, very helpful. Just on your outlook slide as well. The third bullet down, you talked about cost initiatives continuing and will help support profitability within operating leverage impacted by current run rates. If you add up all the kind of things that you've done so far, Aussie divisional restructure, Clever Core gone, there's the cement issue. There was a subsidiary closure in Laminex, Puhoi to Warkworth. That gets still a pretty decent number. And I guess you're expecting all of that kind of to be offset by, I guess, lower exit run rates from this year than on average. And does that mean that you're kind of suggesting here that earnings will be broadly flat despite all the cost gains?

Yes. Look, it's still pretty early in the year for us to be making a call on year-end. The outlook and environment are still very uncertain. And so what we're doing, trying to do is focus on the things that we can control. And so we're taking cost out where we can. We're getting our businesses operating as efficiently as possible and pulling all the mitigants to make sure that we've got a strong balance sheet that will see us through the cycle as well.

And then maybe just on that balance sheet, net debt was a little bit lower than you suggested a couple of months ago. Can you just talk us through what other capital calls there are in FY '26, the remainder of the legacy projects, how much you expect to come out of WA land that you need to buy, et cetera. Just want to get an idea of the kind of other headwinds that there are there in terms of pulling that number down further?

Yes, sure. So we're still working through a lot of that. So we've given a good update in the appendix to the presentation on just the run rate on WA Pipes. And we expect that to continue to gain momentum. It had a slow start but we think that will continue to gain momentum. Construction legacy cash outflows are reducing through time. We've put some photos in the results presentation, which you can have a look at, which is all of what I would call a completed building at the convention center. There's not a road cone or piece of scaffolding and site. And so they will reduce as we go through the year. We're still working through some of the residential land payments that are due. So as you can imagine, we have a number of commitments to purchase land that we're committed to in prior periods and also deferred settlement as well. So we still have some of The Hill, for example, to pay for in this financial year. We're still working through the exact timing of those payments and what can be deferred and what we can potentially move on, that will be well north of $150 million this year as well.

Your next question comes from Stephen Hudson with Macquarie Securities New Zealand.

Andrew and Will. Just a question on the Sig items. Can you give us the cash outflow that you're expecting for FY '26 from the provisioning that you made and to what extent you'd expect further provisioning to occur in '26 on Sig Items?

Yes, sure, Stephen. So I think of the restructuring cash costs, which were about $44 million, a large chunk of that relates to SAP licenses. And most of those don't actually hit the financials until FY '27, '28 and '29. So the cash component of that $44 million will flow predominantly in those years. There will be about 10 to 15 of those restructuring costs that flow in both the tail end of FY '25, a small amount and FY '26.

I'll just sneak in another 1 because I think that was 1 question. Just on consensus, I guess, there was an earlier question on whether or not a flat outlook looks a bit more realistic. The Street's got you at close to $450 million for next year and $547 million of EBIT the year after, so 42% increase over a 2-year period. Can you just give us a sense how realistic do you think that is as a management team?

Yes. Look, I think what we're seeing right now, Stephen, is a very challenging market. And so what we've undertaken to do is release our quarterly -- our volumes of our key products on a quarterly basis, and that should help to inform the market on a go-forward basis as to the situation as we see it. You would have seen in the June quarter that volumes continue to decline across a lot of our businesses. And where they didn't like in PlaceMakers Frame and Truss, it was really share gain and not market. And so I think we're still seeing a pretty tough market at the moment, and we're not seeing anything different in this quarter as it's tracking so far. But obviously, we'll provide that update in sort of early to mid-October. So pre-AGM, you'll have a pretty good read on where we see this year tracking as well.

Your next question comes from Dylan Adrian with JPMorgan.