Genesis Energy Limited (GEL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Genesis Energy Full Year Results 2025 Analyst Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Malcolm Johns, Chief Executive. Please go ahead.

Welcome, everybody, and thank you for your time. It's a pleasure to be here today to walk you through our FY '25 results. My name is Malcolm Johns, Chief Executive, and I'm pleased to be joined today by Julie Amey, our CFO. Turning now to our first slide. Let me first recap our executive team and update you on some minor changes to our business unit structure as we accelerate strategy delivery. Before I do, can I congratulate our team on receiving the electricity Retailer of the Year Award at the recent New Zealand Energy awards. Pleasingly, the judges noted the retail transformation, customer innovation and strong cost control demonstrated by Genesis. As we have mentioned before, the energy transition requires us to stay nimble and adapt as the market changes. As such, we have made minor adjustments to our executive accountabilities to accelerate strategy delivery and commercial outcomes across Genesis. Stephen England-Hall, having successfully driven our retail transformation, now leads our commercial business unit, focused on driving margin growth through the energy-only market. Tracey Hickman, having delivered both 2- and 10-year HFOs, continues to lead our operations and development business unit, focusing on development of new renewables, capacity products and Huntly firming options. HFOs are setting a pathway for us to leverage our high levels of dispatchable generation and stored energy. Ed Hyde, who is successfully delivering our technology program continues to lead technology and transformation, but with added waiting on deploying data and AI to drive further improved productivity. Ed will now also lead group strategy and our LPG business, which we are moving into a new business unit. Julie Amey joined us as CFO in November 2024 and has immediately made a material impact, accelerating our powered finance transformation work program lifting risk and capital management and driving commercial performance across the business. Matthew Osborne continues to lead corporate services, navigating a busy policy and regulatory environment along with successfully completing the 10-year HFO agreements. Claire Walker continues to successfully lead our people, culture and safety functions, Claire has guided Genesis to excellent culture resilience and talent development during what has been a major period of structural change and commercial culture development, while also delivering safety outcome uplift across the business. What is also important to note is the material capacity uplift across our senior leadership team, where we have invested heavily in developing our existing talent and move to bring in new talent to strengthen our bench across the business. Our executive team is delivering strategy, building uplifts in commercial culture and improved like-for-like EBITDAF outcomes. Moving to our agenda today. We will cover FY '25 results, a brief strategy update, group and business unit performance before finishing with our outlook to FY '26 and then taking questions. Moving to our first slide. As many know, this past year was a story of 4 distinctly different quarters. It was a year of profound volatility with each quarter offering different challenges and opportunities. This environment demanded not just resilience but cultural agility to adapt and respond. Our highly flexible generation fleet, fuel -- flexible fuel options and strategy activations to date served us well. We delivered a reported normalized EBITDAF of $470 million and reported EBITDAF of $454 million after adjusting for nonroutine expenses incurred during the year, which Julie will touch on later. This includes a net negative EBITDAF impact of $23 million from Methanex gas in quarter 1 as we outlined at our half year results. We continue to drive planned investment in our technology upgrades. These involve replatforming our billing and CRM systems, financial management system and core trading systems. These remain within the investment envelope and time lines indicated at Investor Day '23. We can clearly see the benefit from this investment flowing into current like-for-like EBITDAF and our FY '28 outlook. At Investor Day 2023, we indicated we were targeting mid-$500 million for FY '28 EBITDAF. Today, we are updating this to mid- to upper $500 million. We have successfully completed 150 megawatts of 10-year HFOs, which will come into effect from January 1, 2026, subject to regulatory review. This brings total HFO capacity contracts to 235 megawatts, providing strong fixed annual premium income for Huntly Power Station regardless of hydro cycles. Health and safety is a key focus for the Board and executive team. So it was pleasing to see the business achieved ISO 45001 accreditation this year and safety incidents declined across FY '25. We have continued to simplify our business through the rationalization of Frank and Ecotricity into Genesis, and we will see the operational benefits of this in the years to come. With the resilient earnings outcome from FY '25 and the outlook to earnings for FY '28, the Board has declared a dividend of $0.143 per share for FY '25 in line with expectations. Moving to our next slide. Delivering our Gen35 shareholder proposition means focusing on earnings growth, earnings multiple growth and strong capital management. We are laser-focused on these 3 objectives. We are also conscious of maintaining our social license to operate. And this slide covers our 3 key pillars of performance. NPAT was $169 million, up 29% on the prior year off the back of how we leveraged our portfolio flexibility producing 30% more electricity than planned during winter '24, in addition to cost out and valuation changes. The modest improvement in debt leverage ratio to 2.6 from 2.7 demonstrates disciplined capital and cash flow management even as the company invested in growth initiatives. Our stable Net Promoter Score was delivered during a challenging period in the industry and a time of great change across our business. It is also symbolic of the way we have supported our customers and protected them from last winter's wholesale electricity market challenges. This is how customers directly benefit from an integrated model. Employee engagement remains a key strength at 79%, which is notably above the 75% industry benchmark. This reflects a highly engaged workforce that is aligned to our mission and values even as we navigate transformation across the business and transition across the sector. The launch of our Community Investment Framework sets a 10-year horizon designed to create real positive change for the people and places closest to our power schemes. We have lifted our investment to $5.6 million annually, doubling prior year investments and reflecting our commitment to partner for real long-term impact. Under our planet deliverables, we can see tangible progress in delivering new renewable generation, including new generation assets, new storage assets and new renewable PPAs. Winter 2024 proved that when it doesn't rain and the wind doesn't blow, New Zealand still relies on thermal generation, and our emissions profile will continue to be driven by this for a few years to come. Moving to our next slide. If I can now move to how we have leveraged our competitive advantage in flexible assets and fuels to deliver our FY '25 gross margin outcomes. A notable aspect of this is how our teams have driven impressive gas flexibility across FY '25 by leveraging our overall fuel flexibility, taking advantage of multiple fuel markets and avoiding being a hostage to any one fuel type. Coal now influences the forward curve for marginal thermal fuel pricing more than gas does. And we believe the ASX forward curve has now reset to this change. Our asset and fuel flexibility has allowed us to move our generation mix across hydro, wind, solar, gas, coal and diesel to take the opportunities each quarter offered while managing our risks effectively. The gas market is challenging and will remain so over the next few years. However, overall fuel portfolio will allow us to continue to take margin opportunity and manage risk as we have in FY '25. We intend to keep our portfolio structured to open our ability to leverage our flexibility for earnings growth and resilience over the long term. This graph also shows the generation profile from HFOs. Subject to regulatory review, this will grow from 2026 onwards. Moving now to our next slide. Moving to our strategic positioning of Huntly. There is a difference between generation LCOE and system LCOE, which appears to be widely misunderstood in recent discourse on the electricity sector. Focusing solely on generation LCOE overlooks the real cost of energy security and the fact that one way or another, this has to be paid for by the system to be available. Our view is system LCOE is between $125 and $135 a megawatt real today or between $30 and $40 a megawatt above generation LCOE. This slide illustrates how we are transitioning Huntly from monetizing through just the energy-only market to greater income certainty through both the energy and capacity contract markets. We now have 235 megawatts of capacity contracts or HFOs in market, and we intend to expand the HFO product range over the next year or so, bringing more new products to market to produce energy security and price stability options for all market participants, gentailers, independent retailers, independent generators and industrials alike. However, energy security has a real cost and to deliver increased peaking and firming products to the market will require real cash investment. Investment will only be made if the market settings are supportive and all market participants accept there is a real cost to secure the energy system. This graphic illustrates how existing versus future energy position under our current strategy will play out. On the left, we have FY '25 demand across our customer segments from residential and small businesses through to commercial and industrial, plus our new energy security capacity contracts, HFOs. In the middle, our current FY '25 supply mix shows our portfolio structure anchored by our hydro generation, complemented by renewables and flexed using our flexible generation and fuels. The key insight in the right column, our FY '28 targeted supply position. Here, we can see how we will monetize renewables and Flexgen through both the energy-only market and HFO capacity contracts. Value growth in the energy transition is weighting more towards dispatchable generation and energy storage across minutes, hours, days, weeks and months. Huntly Power Station is the Swiss Army knife of firming in New Zealand, and we will be monetizing it across both the energy-only market and the emerging capacity contract market we have created with HFOs. Genesis has long-term competitive advantages in both dispatchable generation and energy storage, and this is where we will prioritize deploying our own capital. We will have more to say about this at our November Investor Day. Intermittent renewables are important to grow with the market, and we will deliver our new renewable supply through leveraging third-party capital and long-term PPA contracts. Moving now to our 8 by 28, where we are on track to deliver mid- to upper $500 million EBITDAF by FY '28. This, of course, assumes P50 hydro, no major unplanned plant outages or unforeseen changes in our operating context. While we have made significant progress across all key deliverables in 8 by 28, including delivering our EV market share target and the majority of our pre-technology retail transition. However, I would like to comment specifically on our flexibility cog at the bottom of the slide. Stage 1 BESS construction is now well underway, and we can update project CapEx to $135 million, a reduction from our initial indication of $150 million. This reflects the benefits of building on an established site with a resident, skilled and experienced workforce and a strong procurement function. We are now actively working on BESS Stage 2. Fuel flexibility is our overall strategic objective. Gas flexibility and gas storage are part of this overall objective, and we continue to explore gas flexibility options, including gas storage. We continue to progress commercial discussions to establish an initial supply of biomass with multiple parties. We will have more to say about all of these and our objectives beyond FY '28 at our November Investor Day. Moving to our next slide, the customer business unit. Our teams are well into delivering our retail transformation strategy. Our objective remains margin growth by focusing on value over volume and our netback uplift, cost out and productivity improvements are current evidence of this being delivered. We continue to make progress on the billing and CRM replatforming and expect our first small customer cohort go-live trial to occur in quarter 2 FY '26. Moving to our renewables cog. As mentioned above, we are prioritizing our own capital to dispatchable and storage assets, intending to deliver new renewables long term through directly leveraging third-party capital and indirectly through contracting value-accretive PPAs. FY '25 is a working example of this. Stage 1 BESS is being delivered on balance sheet. Lauriston solar farm was developed with third-party capital in a joint venture and Tauhara geothermal is a value-accretive PPA. The Board declared a dividend in line with expectations and our debt leverage ratio improved to 2.6. We do not plan to develop assets that aren't funded through one of these options. This approach is the foundation of how we will deliver yield plus growth outcomes for shareholders. Looking forward, Edgecumbe FID is targeted for quarter 2 FY '26 and Leeston in late quarter 3 or early quarter 4 FY '26. Moving now to how we will transition baseload gas through building new renewables and leveraging our assets and fuel flexibility. We have previously indicated that we expect baseload gas generation to decline from 2 terawatt hours per annum in FY '24 to around 1 terawatt per annum by FY '28 and to be around 500 gigawatt hours by FY '30. FY '25 was 1.8 terawatt hours of baseload gas generation. We are assuming a base case gas scenario of Kupe Gas, noting we have 3.65 PJ contracted outside of Kupe for calendar year 2026. Renewables growth in this illustration will come from our planned solar developments and the Kaiwaikawe wind PPA. Beyond this, we will leverage our fuel flexibility as we have in FY '25 to position ourselves to take advantage of fuel market upside opportunities as they present while managing downside risks in our portfolio. In line with this, we will be maintaining an increased operational coal stockpile of between 350 to 500 kilotons out to at least FY '30. This will take the total coal stockpile to between 950,000 tonnes and 1.1 million tonnes, 450 kilotons of this will exist and be funded by counterparties as part of the 10-year HFOs, which remains subject to regulatory review. Can I now hand to Julie to talk through the performance in more detail. Julie?

[Foreign Language] Malcolm and [Foreign Language] to everyone listening in. It's certainly been quite a journey since I joined Genesis a few months ago with my initiation being during a very intense period for Genesis and actually for the whole sector. But it is great to have come through the year with such strong financial performance, which is a true testament to our business' navigation of a very challenging and volatile operating environment. I refer you to Slide 15 in the presentation. And as Malcolm mentioned earlier, we delivered a reported EBITDAF of $454 million and a reported net profit of $169 million, both financial outcomes being materially higher than the previous financial year. This performance becomes even more meaningful when we look through our financial results to a more like-for-like basis. This takes our EBITDAF up to around $488 million after we adjust for a few nonroutine expenses, as noted in the slide, and also adjusting for the significant but temporary ramp-up in our digital investment OpEx, well above our normal annualized levels of around $15 million. This outcome has been delivered across a year that has seen 4 quite distinct quarters and demonstrated the flexibility and resilience of our operations and our people to respond to significant volatility. We capitalize on tailwinds and offset as many of the headwinds as we could in order to minimize the downside impact on our customers and on our bottom line. Other items of note from our group financial performance include a 21% increase in revenue, which reflects the higher electricity spot prices and also includes the uplift from the Ecotricity sales since our acquisition in November 2024. This revenue uplift also includes a 12% increase in transmission and distribution charges that we have passed through to our customers at a total cost of around $695 million for the 2025 financial year. Before I move to our group gross margin and operating costs, I want to call out that as Malcolm has mentioned, our board declared a final dividend, taking the full year dividend for 2025 to $0.143 per share in alignment with our dividend policy and reinforcing our commitment to balance our growth investment trajectory with yield returns for our shareholders. So moving now to Slide 16 and our value drivers behind our group gross margin and OpEx performance. Of note for gross margin, we experienced a significant increase in fuel costs against the previous financial year, largely driven by the higher gas and coal costs experienced within a very constrained gas market, which, of course, was heightened by winter 2024, resulting in a net gross margin loss of around $59 million. This effectively represents the level of the impact that we were unable to fully mitigate during the winter period. However, you will note that across the financial year, we were able to flex our portfolio to optimize our long and short positions and deliver meaningful gross margin upside against the prior financial year. In addition, we realized more margin from higher netbacks across our retail segments, reflecting our ongoing focus on more valuable volumes. Importantly, these results also reflect our continued focus on investing in our assets to ensure they are available when needed. You will see more details of this later in the presentation. Moving to operating costs. Around 40% of our total OpEx spend was on our baseline workforce. The increase from the previous financial year also reflects our acquisition of Ecotricity in November 2024, as I referred earlier. We are now in the process of fully integrating Ecotricity to ensure that the synergies we have identified are fully realized. On a like-for-like basis, we have a 7% reduction in our core FTEs, reflecting the transformation activity that has been underway across our business to streamline our operations for further efficiency. We delivered around $14 million of annualized cost takeout in the financial year 2025, and this is an area of continued focus for the business. Finally, an important callout is the ramp-up in our investment in digital projects that I mentioned earlier and that we initially spoke to you about at Investor Day 2023. This investment is pivotal to realizing future value from critical technology, digital systems and solutions across Genesis and the investment will ramp up and continue to ramp up with a peak in financial year 2026 before reducing back to an annualized average baseline of around $15 million. And while you will see some of the spend in CapEx, the bulk of this spend is reflected in our OpEx as it is largely classified as Software-as-a-Service in compliance with IFRS accounting conventions. Moving across to capital management on Slide 17 and 18. We continue to focus on the financial strength of our balance sheet, our cash generation capabilities and the utilization of the self-help from our operations free cash flow, which you will see is directed towards our growth investments and our dividends. We are making good progress on our capital management strategy and firming up credible options for our capital planning in support of Gen35 and our many growth opportunities. And we look forward to sharing further details of this with you later in the year at our Investor Day 2025. As you will see on Slide 17, we committed a significant amount of our free cash flow during the year to replenish our coal stockpile and secure a strong energy reserve. The new HFO contracts that we entered in July will now enable us to share the cost of the stockpile, moving around 600 kt to our reserve, of which 450 kt is for our HFO counterparties. Our stay-in business CapEx spend of around $86 million is slightly above the prior financial year and reflects some of the ramp-up in digital projects that I referred to earlier. From a debt and liquidity headroom and leverage perspective, we continue to manage our financial resilience closely with a strong focus on our balance sheet and, of course, ensuring we maintain our investment-grade credit rating, which pleasingly was reaffirmed by S&P at BBB+ in December 2024. I now want to speak about the performance of our businesses. Our retail strategy activation continues to progress at pace with focus on radical simplification of our operating model and driving higher margins through the optimization of our portfolio and channels. As you saw on the previous gross margin slide, we delivered a $65 million margin uplift during the financial year, demonstrating growth across all of our segments from a focus on valuable volumes and achieving a 22% improvement in our netback per FTE metric. The team led through a number of cost takeout initiatives, delivering some $12 million of annualized savings, representing a sustained reduction in core retail OpEx. Our retail rooftop solar ICPs grew by around 68% during the financial year, reflecting our customers' increasing adoption of low-carbon technologies and the Genesis stronghold position as the largest distributed solar energy retailer in New Zealand. We also prioritized gas supply to our existing home and business customers during the year, putting our own customer needs ahead of the new commercial and industrial customer acquisitions and a head of new network connections. We will only revisit this position when additional gas supply availability is certain. Our EV plan connections rose 39% year-on-year, and we continue to see growing demand for these plants as EV sales rebound. This EV plan growth complements and strengthens our decision to invest in public charging through ChargeNet and for Genesis to be the #1 provider of EV charging for customer journeys. We are now well into the second stage of delivering our retail strategy, moving to a single brand, a simplified range of products and a single operating structure across Genesis, Frank and Ecotricity. This will deliver the next wave of uplifts from across netback, customers and productivity, which then leads to the third wave of our retail strategy, bringing the scale that is enabled by technology, data and AI, which will deliver further value from the strong foundation that our new retail billing and CRM platform will bring. Genesis is delivering on its strategy in retail, and our shareholders and customers are benefiting. Moving now to our operations. We continue to see strong reliability from our generation assets with both hydro and thermal reaping the benefits of our continued and proactive investment in asset maintenance and asset life cycle management. With the exception of Rankine Unit 2, our hydro and thermal assets remained highly reliable during the financial year. Over the past few years, Unit 2 has only been invested in as a backup unit. And in late financial year 2024, it suffered a significant turbine failure. Our team were able to skillfully complete a complex and courageous transplant of the turbine from the decommissioned Unit 3. We highly commend this team for their vision, for their dedication and the overall success of this operation. This ensured that all 3 Rankine units were available and running 24/7 for several weeks during the back end of winter '24 when the market was in a very stressed state and clearly needed them. And likewise, with the significant gas constraints in Winter '24, the team also took the initiative to carry out minor modifications to Unit 6 to enable a rapid switch from gas to diesel, if required. And in fact, this has been required for several days during stressed market conditions. In addition, we also undertook further investment in all of our rankings in advance of Winter '25 to ensure they were all available should the market require them. Once we have the regulatory approval to progress our new HFOs, we will be embarking on a significant program of work to prolong the life of all of our Huntly Rankines out to 2035. So overall, our operational CapEx spend during the financial year remained in line with our annualized average target of around $50 million to $60 million, which included several major hydro asset upgrades with more significant upgrades planned for the upcoming financial year, and we've included more details in the appendix. I also want to take this opportunity to make special mention of our fuels and operations teams who really did bear the brunt of the record dry period that was compounded this year by the gas supply slump. These people really did take one for the team. And most importantly, through all of this, they achieved a reduction in the number of safety incidents and a lower injury severity rate than in prior years. This is truly exceptional performance. So before I hand back to Malcolm to speak to our outlook and guidance, I do want to call out our businesses and investments that are commercially significant and have a strong value proposition, even though they sit outside of our core electricity business. Our highly resilient LPG distribution business consistently delivers strong margins and the reduction in natural gas availability has positioned LPG as a credible transition energy source for the future. Our focus remains on continuing to drive margin growth from ongoing optimization across our key customer segments. And of significant importance is the close management of the risks that are inherent in this business. We have experienced an increase in recordable injuries and are now actively addressing this through process improvements, training and other safety message -- measures such as equipment upgrades. Now moving on to the Kupe joint venture. Our equity share participation secures our access to Kupe's natural gas and LPG reserves, which also -- while also providing a consistent source of earnings that are underpinned by solid reliability and a credible safety record. The JV remains focused on optimizing late-life field performance and managing costs effectively to maximize value for all participants. Turning to Slide 23. Our forestry investments will provide us with access to around 300,000 NZUs annually from 2030, providing us with a valuable future carbon cost hedge. And finally, I want to call out again our investment in ChargeNet as an enabler for Genesis to accelerate our customer electrification strategy with EVs being a key high-value customer segment for rapid growth and ensuring that Genesis is well positioned for the future. So with that, I will now hand back to Malcolm to speak to our outlook and for his closing remarks.

Thank you, Julie. Looking ahead to FY '26, we have started the year with a strong July, driven mainly by North Island hydro conditions. As the table indicates, FY '26 will continue to see progress in uplifting like-for-like EBITDAF, which we expect to be in a range of $470 million to $510 million. Normalized EBITDAF is guided in a range of $430 million to $460 million. The difference is digital investment peaking in FY '26 as outlined at Investor Day '23. We have also provided $22 million for increased fuel and carbon costs driven by lower opening lake levels in the South Island and Genesis' weighted average carbon cost. To summarize where we're at in our strategy delivery, we remain on track for yield plus growth investor propositions, delivering both consistent returns and sustainable long-term growth for our shareholders. We are progressing our capital management strategy and remain focused on strong capital management. We are demonstrably delivering strategy across BAU and our 8 by 28, and we can see the underlying uplift in like-for-like EBITDAF that is emerging. FY '26 will see digital technology investment peak before declining back to stay in business levels, and we can see the benefits from this flowing into future earnings. We can also see a pathway to mid- to upper $500 million EBITDAF by FY '28 based on P50 hydro, subject to no major unplanned plant outages or material changes in our operating context. We look forward to hosting you at our Investor Day in Taupo on the 26th and 27th of November to set out this in more detail. Thank you for your time today. We will now move to questions.

[Operator Instructions] And our first question comes from Grant Swanepoel with Jarden.

So my one question is one of many, many parts. It's on your guidance. So digital spend that you guys have put together, the extra $60 million for this year. When you add up the last 3 years, it comes to about $123 million, including this year. While your guidance in FY '23 for these 3 years was only $105 million. What has occurred in these costs and why the pickup is so materially.

So thanks for that, Grant. So the digital spend that we're referring to is that $146 million that we mentioned at Investor Day, that envelope for those 3 or 4 big rock projects. So we are within that envelope and our spend. The uplift isn't $55 million to $65 million. That's a total spend because we spent around $33 million in financial year '25. So the uplift is around $30 million on that. So we are tracking to that. We're just peaking in '26 at the moment, and then we go back down to our normal average spend of around $15 million.

So you can see it more as phasing grant rather than any movement in overall spend. We just got more in FY '26 than we outlined at Investor Day '23.

Our next question comes from Andrew Harvey-Green with Forsyth Barr.

My question, I just want to focus a little bit on the FY '28 targets and the increases that you've signaled there. Can you just give us a sense of what your base is -- I'm sorry, just getting to the page, Page 10. So you've got, I think, in the 3 buckets, $105 million to $160 million. Is that increasing on the FY '25 year? And I guess, how much of those COGS have you actually delivered so far and how much is still to go?

So the base year hasn't changed, Andrew. The base year is as we outlined in Investor Day '23, and neither have the totals. So at a like-for-like EBITDAF of around $500 million, you can say that we've delivered about 50% of that at the moment, and we can see a clear pathway to mid- to upper $500 million now, particularly once the technology projects have rolled through.

And I think I can add to that as well, Andrew. The challenge with this slide a little bit is that those are the 8 by 28 initiatives. Of course, there are initiatives outside of this slide as well, which are in our baseline, which is around our portfolio, which is also contributing to the EBITDAF target that we have as well. So it's not a straight mathematical calculation across there.

So what we plan to do at Investor Day this year, Andrew, is to rebase the next couple of years to make it clearer and to bring in those non 8 by 28 initiatives as well.

[Operator Instructions] We'll go next to Joshua Dale with Craigs Investment Partners.

Just on the move from going -- guiding to mid-$500 million to upper or mid- to upper $500 million, was the sole driver of that the 10-year HFOs being signed? Or were there other movements around that?

That was a contributor, but not the sole driver. So strategy delivery, we -- if you look at the 8 by 28 page, we always set down a range, and we're tracking on the mid- to upper end of those ranges, plus we've got other factors in play like the HFOs that are now coming into the mix, which weren't in the mix when we gave our initial outlook in Investor Day '23.

We go next to Vignesh Nair with UBS.

Just I suppose following on from the previous questions on OpEx. Post FY '26, which you've highlighted as a peak, I suppose can you just provide a bit of color on what the normalized level of OpEx will be in the business post FY '27. And I suppose maybe you can talk a little bit about what success actually looks like post all this digitization spend in that line.

Yes, sure. So as per Investor Day '23, we've got a target of $360 million core OpEx by FY '28. Noting that, that was pre the acquisition of Ecotricity and bringing Ecotricity in. That won't have a material impact on that $360 million, but we will update that at Investor Day with more accuracy, but it's probably more in the range now of $360 million to $370 million is where that target is sitting. Now in terms of the benefits of the digital transformation work that's being done, that's in the order of $38 million per annum once those are fully completed. And so by the time that's completed, by the time we're at $38 million of benefit, that will be around FY '30. But you'll see the benefits start to come in and ramp up from FY '28 onwards.

Moving on next to Stephen Hudson with Macquarie.

Just the wording around your final dividend seem to suggest that you're happy with the dividend policy that you have in place, whereas I think at the interim, you were sort of saying that the capital review would include a review of the dividend policy. Can you just clarify what is inbounds and out of bounds for the November Investor Day, what we should expect to hear on dividend policy?

Yes. Thanks for that, Stephen. So 2 things. We are certainly committed to the dividend and growing the dividend. So I think that's a given, and that is reflected in the dividend decisions the Board is making. The capital management strategy that is looking holistically at our options for being able to optimize across both yield and growth. That will, of course, consider what that dividend looks like and the trajectory around that and then the right policy around enabling that. But the dividend commitment is definitely there.

There are no further questions at this time. I'll now hand it back to Mr. Johns for closing remarks.

Thank you very much, everyone, for listening. I look forward to speaking more in the coming weeks and also updating everybody further at our Investor Day in November. Thank you. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.