Wesfarmers Limited ($WES)

Good morning, everyone. Thank you very much for joining us here in Sydney. And I'd also like to welcome the many people that will be dialing on -- dialing in online to listen to our Strategy Day. So I'm joined -- my name is Rob Scott. I'm the Managing Director of Wesfarmers, and I'm joined here today by many of our leadership team, including our divisional managing directors. So I will start with some high-level comments about the group and our strategies. And then I'll be joined by our CFO, Anthony Gianotti; Head of Corporate Affairs, Naomi Flutter; and Head of OneDigital, Leah Balter, to take any questions you may have on my opening remarks. And then we'll move on to the divisional presentations and Q&A for all of our divisions. So I'll start on Slide 4, a slide very familiar to all of you. So since listing on the ASX in 1984, Wesfarmers' primary objective has been to provide a satisfactory return to shareholders. And we define satisfactory as a top quartile shareholder return over the long term. And we believe it's only possible to create long-term value by anticipating the needs of our customers, looking after our team members, engaging with suppliers in a fair and ethical manner, contributing positively to the communities where we operate, taking care of the environment and acting with honesty and integrity. And these areas are embedded in our strategies and how we manage our businesses. And you'll hear more about this as we step through our divisional presentations through the day. So turning to Slide 5. This shows Wesfarmers' total shareholder returns since listing in 1984 relative to the total returns from the broader market. And in line with our objective, over the last 10 years, Wesfarmers' TSR performance has been in the top quartile of the ASX 100. And since listing in '84, Wesfarmers has delivered total shareholder returns of nearly 20% per annum compound, almost double the market over that period. Now our focus on the long term means that we're always investing in and developing our businesses with an eye to the future. And it follows that the returns that we've delivered even in the last 5 years have not been at the expense of investing in the future. Indeed, we've made significant investments in recent years in new growth platforms with the aim of improving returns over the next 5 years and notable areas, lithium, health, retail, media and Anko Global. Now the Wesfarmers model is both focused and dynamic. It drives superior operating performances in our divisions through the concept of divisional autonomy. It also allows us to adapt to changing markets and structural changes through active portfolio management and capital allocation. And given the pace of change and disruption that we're seeing across broader markets, the Wesfarmers model is as relevant today as it ever has been before in terms of driving superior and sustainable shareholder returns. Now turning to Slide 6. We continue to make good progress on various broader initiatives, particularly in the climate and environment space, acknowledging it's linked to long-term shareholder value creation. And notably, nearly a 28% reduction in Scope 1 and 2 emissions in the first half. For our team members, the priorities remain safety, career development, maintaining our performance culture and advancing reconciliations, with some positive examples of outcome set out on this slide. We're also focused on building long-term relationships and partnerships with suppliers. And as our businesses grow, so too do thousands of smaller businesses. This supports jobs and broader economic growth. We also pride ourselves on engaging deeply with the communities in which we operate, and a large amount of this engagement is driven by our operating businesses with more than $59 million of direct and indirect financial contributions to community organizations in the first half. We're also really proud that we have 2 of the top 3 most trusted brands in Australia in our portfolio with Bunnings and Kmart. And we don't take this trust for granted, and you'll hear today how we're looking to build on this in the future. So turning to Slide 7. This sets out the Wesfarmers operating model. And once again, you should be very familiar with this slide. We have 4 overarching strategies that inform our focus at a group level and at a divisional level, and it's all about driving the delivery of our corporate objective. We seek to strengthen our existing businesses through operating excellence and a focus on the customer, secure growth opportunities through entrepreneurial initiative, look to renew the portfolio through value-added transactions and ensuring sustainability through responsible long-term management. Now it's these strategies that guide our focus and support our teams to execute their plans and the growth of their businesses across different industries. And at the bottom of the slide are our core values that obviously underpin our strategies and our ways of working. Now turning to Slide 8. I wanted to emphasize some of the key messages that we want to share with you today. Now those that have listened to our Strategy Day in recent years and listened to our half year and full year update will hopefully feel that there's a very high degree of consistency in what we are saying today to what we have been saying. I think you'll hopefully also see some proof points of delivery on the strategies. I hope you will also sense a greater sense of both ambition and a desire to accelerate our strategies. And as a leadership team, we are really pleased that we are building momentum through these strategies, and we are now starting to see a compounding of the benefits and also new opportunities arising today that didn't exist last year. And this is, I guess, part of the beauty of the Wesfarmers model, that focus, consistency over the long term that can ultimately drive a compounding of returns. So the first key message is that we are accelerating the execution of our growth and productivity agenda across the group. And this is very much supported by new technologies and also leveraging the investments we've made in recent years now, data and digital platforms. Secondly, I wanted to reinforce that our portfolio of high-quality businesses continues to strengthen with new growth opportunities and also providing a very unique mix of growth and resilience. And I think the data speaks for itself when you think about businesses, notably Kmart or Bunnings or WesCEF, our larger businesses have showed an incredibly high degree of earnings resilience through multiple cycles over the decades. And then finally, our strong flexible balance sheet provides capacity to invest. And also as a group, we have the opportunity to reallocate capital to support shareholder returns. Now while these have been consistent areas of focus for some time, as I said, we are starting to see the benefits start to translate into new revenue streams and more resilient businesses. So moving to Slide 9. I wanted to just call out some of the key growth projects that we're advancing across the group. Now our divisional managing directors will bring this to life in more detail through their presentations. But if I was to summarize some of these growth projects, the first is very much about divisions continuing to grow and expand their addressable markets. And we've seen this over many decades within Bunnings and more recent initiatives within automotive, smart home and commercial continue to expand our addressable market. We're seeing that within Kmart through the Kid-all category and furniture, a really exciting category. And these businesses entering into categories where customers are increasingly looking for our brands to add value. And we certainly have a right to play in broader categories. The recent announcement of our investment in modular construction through the Built Living joint venture also creates a new market opportunity that didn't previously exist. Our omnichannel assets and capabilities are a key source of competitive advantage. And with the growth of our marketplaces and our loyalty programs, our retail media businesses in express delivery, these are all starting to deliver incremental growth. And in WesCEF, we have a track record of investing incremental capital at attractive returns across our various products. And we've made -- and Aaron will talk today about the good progress we've made completing the debottlenecking of the first phase of our ammonium nitrate plant. We're very well progressed with our sodium cyanide capacity expansion. And we're also working towards a decision on the expansion of our Mt Holland mine and concentrator in lithium in the first half of next financial year. Now we're also finally investing -- we're continuing to invest across our store network, whilst also developing new concepts and offers to better serve customers. I guess in a world where there's a lot of focus on the digital side of retail, one should never forget the importance of maintaining inviting and vibrant store environments, which do account for the majority of our sales. And we've made some great progress there, continuing to expand and develop the Bunnings network, continuing to upgrade our Kmart stores and some exciting new formats that are in a trial phase, whether it's K Home, atomica and so forth, each which represent new and exciting ways of better serving our customers. Turning to Slide 10. So over the last 5 years, you've heard a lot from us about our focus on digitizing our businesses. We've invested a lot in our data assets, our digital -- and also digital processes to improve productivity and to ultimately set our businesses up for long-term growth. And I've outlined some of the areas that not only have we been talking about, but we're expanding on over time. We're already seeing many of the commercial benefits from these investments. But it's also important to know that a lot of our investment in data and digital platforms are actually foundational capabilities for the next phase of growth and productivity as we start to leverage new generative and agentic technology solutions. Those solutions are only as good as your data and your digital platforms. So this slide, as I said, highlights some of the key initiatives that are underway, and our divisional MDs will talk about it. So the further expansion of our RFID capabilities within the Kmart Group, Bunnings continuing to develop their electronic shelf-edge labeling. And also, there's been a big focus and investment in new demand planning systems in Bunnings, Kmart and Officeworks, which ultimately will improve stock flow and availability. Turning to Slide 11. So as I mentioned, new technologies such as agentic and generative AI allow us to accelerate our progress and deliver even better outcomes for our customers and our teams. Now there are understandable concerns in the community about the implications of these new technologies and what it may mean for people's jobs and their data. Now we are determined to provide our customers and our teams with access to the best available technologies. However, we will be considerate in our application of these technologies and adopt a value-based approach. Now we've spent a lot of time as a leadership team in Wesfarmers in recent years talking about the principles we should adopt as we roll these new systems into our businesses. And the principle that we've committed to as a group is the principle of people-first, digitally enabled. And I'll explain a bit about what this means. Firstly, this approach is consistent with the high level of trust that the community and our teams have in Wesfarmers and our brands. People first recognizes that we are first and foremost in the people business. Our teams will ultimately lead the changes, and we will always put our customers, our teams and other stakeholders at the center of decision-making. Now today, we'll talk about some very practical examples. And I hope that you will agree with me that we can provide very tangible evidence of how these new initiatives will fundamentally improve the service we're providing our customers, the tools that we're providing our teams and ultimately, the benefits that will accrue to our shareholders. Now most of our team already use AI in their personal life. So they expect us to provide them with capabilities and tools to enhance their work. Now whilst there's some tasks that will be automated and there will be some jobs that will change, we can already see new growth opportunities and new roles that will be available in the future that don't currently exist. Now digitally enabled acknowledges that digital is becoming part of Wesfarmers' DNA. We are accelerating our strategies by leveraging investments in technology and better harnessing the power and the insight from our data assets. Now our approach to the deployment of AI ultimately aligns with the Wesfarmers operating model. This isn't something new. This is a continuation and a reinforcement of the effectiveness of the Wesfarmers operating model. Now divisions are ultimately responsible for the implementation of initiatives, owning the delivery in a way that is relevant for their customers and their teams. But we also have fantastic opportunities to leverage common technologies, best practice tools and also the benefit of strategic technology partnerships, which are very much coordinated by our OneDigital team. And we've seen really strong engagement across the group associated with that. And Leah would be happy to talk more about that in our Q&A. So turning to Slide 12. I mentioned that I'll talk more about some of the tangible and measurable outcomes. So this slide just simply tries to articulate where we see the most opportunity for these emerging technologies in our businesses. Now these are areas that we talk about all the time, and as I said, reinforcement of our core value-adding strategies. I mentioned that our approach will not only be focused on -- or underlined by our values, but will also be subject to the same commercial and capital discipline we expect at Wesfarmers. This is not about just chasing after the new shiny thing or focusing on technology for the sake of it. This is about enhancing the benefit for our customers, our team members and ultimately delivering a return on the investment. We are focused on addressing existing pain points where it supports our strategies and where there are measurable outcomes that matter. This means focusing on the outcomes for our customers, our team, improving the efficiency of our businesses, all of which helps us keep our prices even lower in our retail businesses, reinforcing the importance of EDLP, supporting our margins, and also, as I mentioned, delivering returns to shareholders. We see -- we also see this as an opportunity to enhance competitive advantage. So if I turn to Slide 13. This outlines some of the practical examples that our businesses are using at the moment to accelerate our strategies. And this is enabling us to execute faster and at a lower cost. And on the customer side, I think a really key initiative that we're very excited about. We've been the first market in Australia with agentic commerce solutions. And also, we see opportunities to provide even better customer service through leveraging these technologies. For our teams, we've developed AI assistants to unlock personal productivity to help our team members easily access the vast amounts of information and insight across our businesses and to free our teams up to spend more time with customers and less time on repetitive tasks. And across our operations, some exciting use cases across merchandise effectiveness, marketing efficiency and supply chain optimization. So I won't cover this now because our divisional MDs will talk to this as they step through their presentations. So moving to Slide 14. The combination of our extensive store network, our digital platforms, our distribution centers allow us to serve customers across virtually all communities in Australia and New Zealand in a way that suits them. And when we think about some of the points of difference we have across our broader retail businesses, in total, there is more than 7.5 million square meters of space across our network. Whether it be through our stores, our warehouses or distribution centers, all that are leveraged to support omnichannel sales, whether it is through our stores, our store base fulfillment, click and collect or even direct delivery. And this fulfillment capability is just one of the ways in which our retailers truly stand apart relative to some of the pure play online competitors. Now after trialing various approaches to marketplace opportunities in recent years, our online marketplaces in Bunnings and Kmart are really starting to resonate with customers, delivering strong growth and, importantly, are also profitable. This is also about leveraging capability that has been developed as we've been trialing different marketplace opportunities in recent years. Now this leverages the move of expanding our marketplace opportunities within Bunnings and Kmart, leverages the significant digital traffic and brand awareness and trust of Bunnings and Kmart with a curated range of brands and products that are complementary to their core ranges. Now Bunnings and Kmart now have more than 400,000 additional SKUs across their marketplaces, bringing even more choice to customers. And I'm sure that Alex and Mike will talk more about that today. So moving on to Slide 15. I just wanted to share more of the data points that demonstrate the ways that our omnichannel strategy is creating real value for customers and our shareholders. So our various loyalty programs across the group are increasing sales by driving frequency, incremental spend and supporting cross shop activity. OnePass members are choosing to spend more and are shopping 3.4x more frequently than nonmembers. Our marketplace capabilities, as I just mentioned, are also delivering strong results. An interesting data point is that roughly 1 in 4 Bunnings online transactions now includes a marketplace item, and 1 in 6 transactions within the Kmart Group. And that's a pretty impressive number when you think that the Kmart Marketplace has only been up and running a matter of months. On the retail media side, we now have more than 1,500 in-store screens across Bunnings, Officeworks and Priceline, and we're seeing strong growth in supplier partnerships and advertiser demand across a broadening range of sectors. And this also includes advertising from companies that are not existing suppliers, but see value in the customer reach that we can offer. We've also seen strong demand from customers for our express delivery offer, which is now live across Officeworks, Bunnings and some Priceline stores, and this is attracting new customers and incremental sales. And as I mentioned earlier, the agentic commerce opportunities within Bunnings and Kmart are also new and exciting value-adding opportunities for our customers. Turning to Slide 16. So over the last decade, our return on equity has significantly improved. And as I mentioned, our total shareholder returns have outperformed the market. Now not only does this reflect very strong execution within our existing businesses, it also is the cumulative impact of portfolio management decisions we have made along the way. Now we are not a private equity company that transacts businesses every year or every month. We are investors for the long term. But we recognize that to create sustainable value through the decades, it makes sense to be actively managing the portfolio to ensure that our capital is allocated in those businesses that have the potential to deliver superior returns. Now we've established new growth platforms through our Covalent lithium joint venture. Wesfarmers Health has also been a significant investment where we see a lot of long-term opportunity. And it's great to see Emily and the team start to deliver some real wins in that division of late. Now these provide growth -- these businesses, whether it's lithium or health, don't really feature that prominently in our P&L at the moment, but over the next 5 years, will start to have a more meaningful impact. I mentioned the Built Living joint venture. Now if you judge the success of this business over a 1- or 2-year basis, it's not going to show much. But over the next 5 to 10 years, I think it has the potential to be quite exciting and meaningful. We've also enhanced the value within existing businesses. And on the right-hand side of this slide, you'll see the various changes we've made through store conversions within Kmart and Target and then integrating the back offices of those businesses. This is all about us facing into structural changes that are evolving, changes in the way that customers are shopping and also taking advantage of unique assets and capabilities we have to ensure that our businesses are always remaining relevant. And we're really excited recently to announce that the Blackwoods and Workwear Group businesses will move within to the Bunnings Group. And this is another example of bringing together highly complementary customer bases and capabilities to unlock growth across small and medium-sized businesses. Now Mike Schneider will talk more about that, but I wanted to note that this opportunity has only been possible as a result of the successful and long term and somewhat painful implementation of a new modern ERP system within Blackwoods and a material strengthening of the capabilities within Blackwood's digital capabilities. There are hundreds of thousands of technical product SKUs and world-class fulfillment solutions, which are now able to be used to better support the broader Bunnings and Blackwoods proposition in the SME market. So I'm really pleased about how the portfolio is shaped at the moment and the opportunities for the future. So moving to Slide 17. So as a result of the developments and strategies I've discussed, the portfolio is in good shape. We're well positioned to generate superior returns through the cycle. And as I mentioned, I think we have the capacity to withstand fair degree of market volatility better than most companies. As we sit here today, the portfolio offers 3 distinct, but complementary sources of competitive advantage. Our market-leading retail businesses with a diverse range of customers, everyday products at lower prices provides a key source of resilience across different economic conditions. Our globally competitive industrial businesses also provide products that support critical industries. And then we have exposure to the growing demand through the newer platforms and businesses I mentioned earlier. Now moving to Slide 18. I won't spend a lot of time on this, but just to reinforce the strength of our balance sheet, the continued and ongoing focus on capital and operating discipline that is a core part of our model. Then finally, on to Slide 19. Before I close with the key messages and move to Q&A, you should have noticed today that most of my discussion has been focused on long-term value creation. Today is not a trading update. There are plenty of opportunities we have through our half year results and our full year results to talk about trading and to share those insights with you. But today is a focus on how the investments, the portfolio management, the business transformation decisions that we are making are going to sustain better performance to shareholders over the next 5 to 10 years. Now this is deliberately aligned with our shareholder objective. It's also a very exciting time to be operating a business when you think about the significant technological, demographic and geopolitical changes that are unfolding. And in Wesfarmers, we have a portfolio of businesses that are well positioned and an operating model that is highly agile and adaptable to such changes. And as I mentioned, we have unique data and digital platforms that will be even more relevant and important for future growth. So let me close by reinforcing those 3 messages. First, we are accelerating the execution of our growth and productivity initiatives. Secondly, we have a portfolio of high-quality businesses with a unique mix of growth and resilience. And then finally, our balance sheet remains strong, and our financial discipline and the flexibility to continue to invest in our businesses and consider new opportunities will serve us well going forward. So I'll now invite Anthony and Naomi and Leah to join me, and I look forward to taking your questions.

Just the question for me is around supply chain. And specifically, if you look globally, you'd argue probably some of the best supply chains globally being democratized in the sense that you've got 3PL capabilities shared, et cetera. I'm just wondering, is that something that you've considered at a Board level in terms of aggregating the back end? And I appreciate the front-end silo structure. If you look at Amazon will do $11 billion plus this year, you've got your competitors are obviously looking to consolidate. And why isn't that something you're considering or thinking about?

Look, I think a couple of comments on that. First of all, we need to recognize that our business is an omnichannel business. And when we think about fulfillment, we also need to recognize the importance of our store network for fulfillment. That is something that the online specialists or the pure-play online companies don't have. And as I mentioned, we shouldn't overlook the benefit of the Wesfarmers retail businesses collectively possessing 7.5 million square meters of space across our stores and our distribution centers to help fulfill deliveries to customers. So I think that's the first point. The second point is that we also need to recognize that the supply chains and the back-end processes of our businesses are very different. So when you think about the products that Bunnings sells, particularly when you start getting into areas like commercial building products, hazardous products, green life, the supply chain capabilities are fundamentally different to what one might see in a Priceline or a Kmart. That being said, we have been collaborating across the group on some last mile opportunities, particularly focusing on parcel delivery. And that has helped with improving route densities, lowering the cost and improving the quality of delivery or the speed of delivery. You also recall that about a year ago, we announced that Kmart would start to leverage the old Catch centralized fulfillment centers to improve the delivery proposition across the East Coast of the country. And we're also starting to use those distribution centers in different ways. The other final point is that I talked about our express delivery offer that looking at ways in which we can leverage third parties to materially improve and differentiate our delivery proposition through the partnership with Uber Eats, for example, is another great example. So I suspect that we will continue to look at ways in which we could leverage last mile. But I think it's hard to see that there is a lot of incremental value trying to more deeply integrate distribution centers across the group, given the fundamental difference of the products that we are selling to customers.

But isn't that the opportunity as well, you talk about big and bulky and doing more things like electronics, these sort of things like some of the trials here in Victoria? And Bunnings and obviously you got the Officeworks where it is fun. Is there a world where you could create a thick pillar and you effectively have a capital cost for the supply chain you pull out and you rent out space within store across stores? Because that could really accelerate the 3PL capability and open up a whole bunch of categories that leverages that point that you're talking to.

Well, look, potentially, the one point I'd make, and the MDs could add to this, is that we -- in recent years, particularly off the back of this -- the trial I mentioned around last-mile parcel delivery and collaborating with the volumes across the various divisions, we have got really good collaboration across our supply chain teams. And that has really started to increase and accelerate as a result of starting to leverage some of the new agentic solutions in supply chain. So we have a number of use cases now on the agentic side where we have cross divisional teams focusing on common solutions that we will roll out. So look, perhaps over time, there are some opportunities. You mentioned big and bulky products. Bunnings is quite unique in terms of how they fulfill big and bulky items. And I know that our Kmart team and our Officeworks team that also have some big and bulky products also take some of the learnings from the Bunnings Group in that space. So perhaps over time, Ben, there are opportunities. But I'd say, collectively, there are so many opportunities that we have to better leverage our very unique store and distribution networks, drive route density on the parcel side and collaborate more on the technology and agentic side. That's where we see the bigger opportunities over the next couple of years.

It's Bryan Raymond, JPMorgan. Just -- I think the big difference this year versus last year's Strategy Day, at least in your opening comments there, Rob, is the focus on agentic and AI and all the different ways that will play through your organization. So I'd like to pick up on some of those points. How are you thinking more on the customer-facing side of the agentic commerce area, which you have touched on? Just interested in how you think about that from a sort of, let's call it, internal using your own data assets. You've talked about your Bunnings and Kmart tools there. What about more like partnerships with LLMs, so with either OpenAI, Google or Claude, whoever it might be, to drive some more customer acquisition through that funnel? And how do you think about that sort of discovery research, product comparison piece? Which you haven't really touched on that, but I'll be interested if that's part of your strategy there as well.

Yes. Well, I might let Leah talk more to that, Bryan. But just the first point I'd make is that the point I was trying to emphasize today, the opportunities through agentic and generative AI, are certainly -- they are certainly new opportunities. They clearly didn't exist to the same extent 3 or 4 years ago. But the point I was trying to make is it's not as if this is a new strategy. This is actually just reinforcing our existing strategy, but just through tools that didn't exist. So we are genuinely quite excited about it. And we just wanted to share the ways in which we are bringing these to life and try and talk in more practical terms about how is it actually going to benefit our customers? How is it going to benefit our team? And also emphasizing that we retained a very strong ROI focus. So look, the agentic commerce area is an area where we have been within our divisions. Bunnings was the first material business to bring that to market in Australia. And it couldn't have been possible without the capabilities of our Bunnings team and the support of some of these international partners. So I might just let Leah talk a bit about how we are thinking about agentic commerce and leveraging those partnerships.

Thanks, Rob. Thanks for your question, Bryan. In terms of agentic commerce, we're looking at how customer behavior is shifting. So it's shifting from traditional search. It's shifting in terms of LLMs, it's also changing in terms of how our customers are searching on our website. So where you might have searched for, say, a hammer, customers are now searching for, say, 20 words on average in terms of the product. As what we did last December is strategic partnerships to actually secure for all of our retail divisions access to the best agentic search technology. And as Michael talked about with Buddy rolled out first to market in Australia, we're taking that technology and rolling it out. Kmart have just launched Joy. We're rolling that out across Officeworks and then OnePass across all of the divisions. We're seeing that customers who are using agentic search are actually have a higher conversion and are spending more per shop. And we can see that customer behavior is actually changing on the LLMs as well. And we're in through our partnerships, looking to link up our loyalty to the LLMs. And some of this technology isn't available in Australia yet, but through our partnerships, we're looking to secure that for our customers so that they can search on an LLM and go back to our website to complete the shop.

Okay. Interesting. And just as a follow-up, is there any sort of impact on the cost line from a corporate cost perspective around OneDigital cost from -- there's obviously a lot going on here. Is that going to meaningfully move the dial? Or is it all within the envelope that you've already spoken to?

There's a bit of -- I mentioned the last couple of years that we would expect that as we move from the setup phase to the delivery phase, the OnePass cost that we report at a group level ultimately decrease. We have seen over the last year, some additional investment as a result of fast tracking and implementing some of these projects. So it's likely that over the next year or so, we'll see a continuation of those costs as we're building some capability and setting it up. But at least the evidence that we've seen is that a lot of the initiatives should deliver a good return on investment. So we're very -- so most of the -- other than some of the initial setup costs and capability costs to get this stuff going, most of the costs will ultimately just sit within the divisions and be a core part of their digital and customer-related cost base.

It's Michael Simotas from Jefferies. So look, Wesfarmers has continued to do a very good job clearly of delivering on its total shareholder return objectives. I guess, mathematically, the drivers of that are trading multiple growth and shareholder distributions. How do you think about the role of growth going forward over the next 5 or 10 years? Do you think growth needs to do more of the heavy lifting to drive those shareholder returns, acknowledging that those individual drivers are somewhat competing with each other?

Yes, yes. I think there is an opportunity to deliver better growth. I think in a few different ways. I think the first point I mentioned today, this theme of accelerating our productivity and growth agenda. We're more excited about the opportunities that present themselves today to move faster than we were a few years ago. So that hopefully should translate to a bit better growth. And growth is both through the top line and also through improving productivity, obviously. The second thing I mentioned is that over the last 5 years, we've made some pretty substantial multibillion-dollar investments across our lithium business, our Health division, some of the foundational investment we've made more at an OpEx level in retail media. Now those business opportunities are yet to really translate to earnings. So over the next 5 years, we would expect there to be much stronger growth there. And then as I mentioned, there have been -- there are new opportunities that our divisional MDs will talk about today that are growth opportunities that didn't exist before. So we are very focused on delivering growth, not growth for the sake of growth, growth for the sake of growth in shareholder returns.

And just as a follow-up, in the past, you've made it clear that there's a preference or better opportunity for deploying capital within the existing businesses. Is that still the case? Or is it more that you've already deployed the capital and you need to reap the benefits from here?

Well, look, we're really open on whether we deploy capital on new opportunities or within our existing businesses. We're just very objectively focused on where we see the best returns. And probably not surprising that when we're investing in our existing businesses, we see a lower risk profile. We also have greater confidence in the ability to unlock value. And as I said earlier, that I think we are really blessed that we have a number of businesses, whether it's our retail businesses, whether it's through our data and digital platforms, whether it's through our WesCEF, our WesCEF production capabilities, where these businesses are platforms where we can invest capital and create new revenue streams through expanding addressable market through growing retail media through debottlenecking the various plants that we have within WesCEF. So it's not -- we are seeing great opportunities to invest in those. Probably the reason why we haven't done more significant investments in external opportunities is just simply because the returns haven't stacked up. And as I said, I think we're in a fortunate position that we don't have to necessarily go chasing external growth for the sake of it when we have such good growth prospects within our core businesses.

Caleb Wheatley from Macquarie here. Just wanted to pick up on that theme of digitization, but more on the sort of back end in the data asset side. So you had the sort of 3 programs up there in terms of Flybuys and obviously OnePass and the Sister Club. How do you sort of see, I guess, the interaction and the roles of each of those programs this year sort of building the importance on the value of that data? And then particularly any update on the Flybuys side just in terms of the JV there and sort of data sharing arrangements, et cetera?

Sure. Look, I might just touch on the Flybuys side, and I'll let Leah talk more about the broader programs. And look, recognizing that each of our programs, they are highly complementary, but they all service with a slightly different purpose. But look, we're really pleased with the Flybuys joint venture. We think that the value that we provide customers and Flybuys members across the broader Wesfarmers retail businesses together with Coles is really unique. And I think we've now structured the joint venture in a way that is working much better for the retail participants. So we have -- ourselves and Coles have an appropriate amount of access to the insights. So -- and also, we recognize that a lot of the initiatives that were using the Flybuys data for to drive more value for members and to drive incremental sales are best undertaken closer to the customer rather than from a central Flybuys team. So that has been the data sharing capabilities and mobilizing offers closer to the customers, I think, has been a real win-win for Flybuys because it's growing the program, making the program more relevant, and it's also been great for our retail business and great for our customers. So look, I think loyalty is a very dynamic area. What good looks like today won't be good enough next year or in 3 years' time. So we will need to keep innovating and evolving, but we're really pleased with how Flybuys is tracking. But I'll let Leah talk to the other programs and how they all feed into our data capabilities.

Thanks, Rob. Thanks, Caleb. We've got the privilege of having some of the most trusted brands in Australia and the most loved loyalty programs, and that's building up our shared data asset where we've got more than 12 million customers in the shared data asset. And we're able to give that -- access to that data back to divisions where they're able to personalize to the customers with more insights on the customer than they would from their own customers' purchases within a division. We're also looking at how we can make that experience more seamless for customers because of the interaction between Sister Club and Flybuys, where you sort of build up points then through the link to the paid subscription with OnePass. So we're working on making that more seamless for customers. And as we talked about earlier, with the shift to agentic commerce, we're also looking at how you can leverage agentic search, say, across the brands through OnePass and working with the divisions on that as well. So really looking to evolve the loyalty, where loyalty is the outcome where customers who are searching across LLMs or across the websites are choosing our brands and retail products.

So when you're looking at that sort of broader data bank and I appreciate for the folks on retail media and clearly, customer communication, et cetera, are you sort of comfortable with, I guess, the level of interaction and, I guess, the see-through that you have across the customer base? Or is there sort of more work that might need to be done there to sort of fully engage those relative data sets?

We're also stitching that data together with third-party data as well so that we can, as I said, give divisions -- more of an enriched view of a customer and also as customers are searching through agentic search, also adding in the contextual data as well to the view of customers to get back to the divisions as well.

Shaun Cousins, UBS. Just a question regarding investment outside of Australia. I think after the budget, you highlighted there were -- taxes were rising. And so as a result, it became possibly less attractive to investors. Should we anticipate that there could be more international investment rather than domestic investment, given the current sort of, I guess, a situation on how capital is going to be taxed in Australia?

Well, as I touched on earlier, Shaun, I would say the bigger opportunity that we see is to continue to invest in our existing businesses. We are mindful that when you invest offshore, there are different risks that you need to be aware of. And although for us, recognizing that we are largely in a -- well, we're an Australian, New Zealand and Asian-based business. The areas where we have greater confidence to invest internationally really relates to the Kmart Group because we have very significant teams and capabilities already embedded within Asia. So the investments we're making through Anko Global and in the Philippines, I guess, are based on some very strong local understanding and capabilities. So yes, that will continue to focus on that. I think the -- when I reflect on the tax changes and what does it mean for Australian investment versus international investment, I'm probably most concerned about the second-order implication. So if you think about our businesses and our country, we are a real beneficiary of some very strong and significant resources companies. Certainly, our WesCEF business benefits from the ongoing investment in development and success of the Pilbara iron ore businesses, the gold companies and our lithium businesses. And I do worry that a number of those companies, be they Australian companies or international companies that invest in resources or oil and gas, will be more encouraged to invest offshore by virtue of the less hospitable tax settings and regulatory settings within Australia. So I think the issue is probably more a second order impact for us in Australia rather than necessarily a deliberate shift for us to invest offshore.

Great. And secondly, regarding Health. Is that business at a scale now where it can become material for the group and the requirement for it to become material is just existing investment to develop? Or will you need to actually add more businesses to what is already somewhat of a health conglomerate sort of anyway to sort of provide it to have sufficient scale? Because when we think about the earnings trajectory we have at the moment, it's 1% of earnings, maybe goes to 2% to 3% for it to become meaningful. Either things need to go a lot better than we're forecasting or you might need to add more to it. So how do you think about that in the longer term, please?

Well, we -- the earnings at the moment, you're right that although they're increasing at a higher rate, they're increasing off a low base. And the other important point to recognize with the health earnings is there's a fair bit of investment that is flowing through the P&L that is holding down the earnings. So look, I'm happy that we continue to grow the business off that low base and to be opportunistic as new opportunities come along. I see this as we are very -- Emily and the team are very focused on getting the return on capital up above the 10% mark as fast as possible. So that's a short to medium-term objective there. But I'm prepared -- well, we are prepared to play the long game with health. And that this is the type of business that I think over the next decade could become quite meaningful. And maybe at some point in time, new bolt-on acquisitions will arise. But at the end of the day, I'm comfortable that so long as the business continues to improve its returns as -- I think a really key breakthrough for the health division this year is the price line franchises are really starting to perform. So it was really hard for us to scale up the network until we actually had a franchise model that was actually working for customers and working for franchisees. So that is now starting to work, and we can really start to leverage that. So there's a fair bit of organic growth that I think we could expect from the Health division, independent of any M&A.

It's Adrian Lemme from Citi. I had a question for OnePass, might be a question for Rob or Leah. A month ago, I actually got a text on my phone for 6 months free membership of OnePass. And I do frequently see a discounted half price off the $40 membership. I don't see the same kind of offers from Amazon, for example. So I was just wondering, how you think about the program? Is it that you maybe need to give more value to customers, so you're not having to discount the program? Or should you just give it for free just to build up the data and the customers? Just interested in your thoughts on that, please?

Leah, do you want to touch on that?

Yes, sure. Last month, as you said, we did launch the 6 months free. That was partially in response to the cost of living crisis in Australia and as a way of us doing our bit for every household in Australia so that they could access free delivery and not -- and save on fuel in going to the store. That said, we did have one of the largest acquisitions, months that we've ever had. And so we did really drive subscribers. We are looking as part of our strategy, to your point, Adrian, how we can add more value to customers. We're looking for third parties, and we're looking at how the offer can evolve. In particular, how it can evolve within the next 6 months as these customers roll off the free 6-month period and how we can really demonstrate value back to them. We do that, and we can see that if we drive customers from just shopping at one store, one retail brand to a number of divisions, we know that the churn really goes down to those customers. And so we're sort of driving that on an individual basis to really drive their behavior. So yes, that's definitely something we're looking for, in particular before Black Friday.

This is Peter Marks from Goldman Sachs. My question is just on AI adoption across the retail businesses again. I'm just interested in your big picture thinking here. It sounds like you've really made the decision that you're going to lead in this wave of digital adoption, whereas prior waves, it felt like you were happy to sort of lag the market and test and see and adopt what worked. Just why is that? Why -- firstly, is that true? And how do you think about that? Is it because you see this as a big shift and you want to get ahead of the curve? Or do you think you've now just built the capability within the organization to adopt some of this stuff a bit faster?

Well, Peter, I think there's a couple of things. You are right that if I look back 10 to 15 years ago, fair to say, we were a bit of a slow adopter. We were slow to move on the e-commerce side. And a number of us in the leadership team were around back then, albeit in different roles, and we observed a lot of the debate in the discussion. And we're very keen to not kind of go through that again. But at the end of the day, what is driving our focus is a commercial focus and a focus on the customer and the team. So it's not only the fact that we want to be a leader in this space, but we want to be a leader in this space because we think it is going to have measurable benefits for how we engage with customers, the support we provide our team, the ability to accelerate productivity. So there is absolutely a commercial lens on this. And across the group, the point I mentioned about digitizing business processes over the last 5 to 8 years. We have phenomenal data assets. We have really strong digital platforms. We have thousands of very strong data, technology, digital people across our group. We're far better able to lean into this today than we were. If I kind of go back a decade ago, well, we hardly had any data on our customers. Our technology teams were quite traditional, technology infrastructure-type support teams. So I think as a team, we're better capable. We have better data and digital platforms to leverage it. And we see good ROI from the opportunities.

It's Craig Woolford from MST Marquee. I'm interested. I know it's not a big dollar amount, the Built joint venture that you talked about. Can you just elaborate what that program is about, what sort of capital we might see over time? And is it a sign of the type of future investments you make?

So what we've done with the joint venture -- so ultimately, it will be a 50-50 JV between Wesfarmers and Built. And we think that both parties are highly complementary in terms of what we bring and what they bring. We've made an initial investment of $100 million, initial commitment of $100 million in the joint venture, which will be focused on developing the first high-tech automated modular construction factory predominantly designed for residential construction, but also will have the capacity to support other commercial developments. And that first project will be in Neerabup in Western Australia. It's been a project that has the very strong support of the West Australian government. And the opportunity we see here is that there is a significant shortage of residential properties. It is a major problem we have in Australia. And traditional construction methods, in many cases, are not commercially viable. So as a result of the significant work that the Built team have been doing in recent years, together with our team over the last year, we've identified a technical solution that is highly proven in other markets. And with a high degree of confidence, we believe will deliver 20% lower cost of construction at up to 50% faster speed of completion. So this is, I guess, just an example of ourselves and Built looking at pain points in the market, opportunities to address supply constraints and leveraging proven international technologies and with complementary partners coming together. So look, I'd like to see other factories develop in other states, and there's already discussions progressing with other states that are very keen to try and bring this new capability to their market. And if you look at there are certain markets in Europe where this exact technology is already accounting for the majority of construction within their countries. And when you look at the challenges around construction costs in Australia, this should be a no-brainer. But lots of work to do, and we'll obviously really leverage some of the Bunnings capability to provide support to the JV, particularly when we think about the fit out. So that will be complementary. And we think that Built is just a fantastic partner and is arguably one of the most progressed and innovative building companies, construction companies in Australia in terms of their digital capabilities. So very small investment in the scheme of the group, but something that over the long term could be an interesting investment.

Great. And is that part of the Bunnings business? Or does it sit in other in terms of this?

We will keep it in other initially, but there will be very strong connectivity with Bunnings particularly. So we'll have Bunnings representatives on the Board. And we also will have arm's length arrangements between Bunnings and the Built Living joint venture as it relates to the fit out of a lot of these developments.

If I can just squeeze in one for Anthony. The margin -- the average borrowing cost of 3.56%, what would be your marginal borrowing cost?

So in that debt position, you're probably aware, about half is fixed on long-term bonds at an average rate of about 3%. And then we've got a half in bank debt effectively at -- mostly floating. So the other half is obviously subject to what's been going on with interest rates. So I'd expect that 3.56% will move up. But on an average basis, probably closer to 4% in terms of average cost of debt.

Richard Barwick from CLSA. Got a question around OneDigital. We can -- we obviously get to see what it costs, at least the unallocated component. So my question is about how you value it. So a question for Anthony or Leah. So I'd just be keen to -- I know it's easy to say the value is demonstrated through the divisions. But from an investor and an analyst perspective, then perhaps if there's any direction you can point us and how you value it and then we might approach it as well? Because, as I say, we get to see the cost, but it's actually very, very difficult to try and disentangle the benefits and the value.

Yes. Look, it's a good question and I appreciate. Look, it is difficult for you to tell or look or see through the value that comes from the divisions. But I think what we do is we look at the kind of economic value add across the divisions. So we do and we're starting to develop a more detailed line of sight. What we are focused on is the incrementality that's creating in terms of sales growth and earnings growth in our divisions. So you're right in that you see the costs, all of the benefits, including the retail media as well as what's happening with OnePass is all sitting in the division. So we have a, what we call a shadow P&L. And we look at where we're looking -- and we try to measure incrementality across the division. So where we're using OnePass, our royalty programs, where we're getting incremental retail media revenues and earnings from our divisions. And we look at it on a holistic basis to understand is it driving value. I'd say it's still fairly early days in the development of that, but that's absolutely what we're focused on. We don't want to be spending more and more money on OneDigital, it's not actually adding value. Leah talked before about the insights we're now starting to create from looking at that 12 million customer base we have across the entire group and how do we actually utilize that better to provide more personalized offers to our customers. I would say that we've started that, but this is a long-term journey. We now have a way of measuring that internally, and we're focused on making sure that over time, that incrementality is higher, and we're generating strong returns off the back of that.

Okay. And sorry. One sort of -- almost sort of follows on from there. I think you've talked before in terms of the sort of the mix of your businesses and mix of investments. And if I think about health and lithium, they have been longer term sort of spent the money and it's sort of incubating coming through. Lithium is obviously about to come through. Health, as you said, is sort of ramping up of a smaller base. If lithium is now on the cusp of actually delivering for you in terms of earnings, then arguably, it's moved from the investment phase into a delivery phase. So does that -- do you think about that in terms of, right, your investment opportunities, again, you are prepared to perhaps go down a path and choose another one, whereby it's sort of longer dated?

Well, the great opportunity with the Mt Holland project is that, yes, we are very much in the harvesting phase of generating a return from the investment we've made, but it's an incredibly long-life mine, high-quality mine, and we are looking to invest incremental capital in the next phase of the development to double the capacity of the mine and concentrator, as I mentioned. So Aaron will talk more to that. So we still see that there's more opportunity to invest and develop that asset. But we would expect, as I said, we do expect the earnings to start to flow through in the coming years to generate the return on the capital we've already invested. Well, thank you all very much for the questions. If we haven't covered questions you have, please feel free to chat to us through the break. And then there'll obviously be lots of opportunities to ask questions to the divisional MDs through the session. So we'll break now for lunch and be back at about a quarter to 2 -- sorry, for morning tea, not lunch. It feels like lunch time. It's been a long day. Break for morning tea. Thanks. [Break]

Well, good morning, everyone. For those who don't know me, my name is Mike Schneider, I'm the Managing Director of Bunnings, and it's always a great joy to share our plan and ambition for the growth of the Bunnings business. At Bunnings, we have some key foundations, growing our addressable market, expanding existing categories and growing markets across -- growing across new markets and channels. We're also accelerating our productivity agenda increasingly enabled through AI, automation and data-led execution. The momentum we have has been the result of years of disciplined execution and planning across all parts of the enterprise, along with investment in the right skills and development for our incredible team. Turning to Slide 22. 140 years ago, the Bunning Brothers saw an opportunity. They were running a successful contract building practice when gold was discovered in Western Australia. They quickly turned their know-how and relationships into a timber brick and building materials business to supply the gold rush. And in that moment, our company changed forever. And while the rest might be history, that instinct for identifying growth opportunities anchored by a deep understanding of our customers continues to this day. With such strong roots, the Bunnings of today is a diverse, resilient organization across customer segments, channels and markets. And our focus on doing the right things the right way hasn't changed, care for our team, our customers, suppliers and the communities we serve, remaining committed to lowest prices, widest range and, of course, the best experience, underpinned by rigorous cost and productivity disciplines. Looking to the future, we are incredibly excited by our ambition to unlock further growth opportunities, and we'll be expanding -- doing this by expanding our addressable market, growing from the core of the business and participating in new and emerging channels like agentic commerce and embracing data and tech to become more relevant to our customers. Our model is a unique blend of proven principles and disciplined execution, along with ambition for what comes next. And as our tagline reads, that's just the beginning. Turning to Slide 23. At the heart of our business model is a simple idea, creating shared value, and we work hard to deliver for our customers every day. Customer advocacy remains high, supported by deep trust and engagement. That starts with doing the basics well every day, delivering lowest prices, widest range and a consistently positive experience across all our channels. Our large and deeply committed team are central to this, and we continue to invest in safety, inclusion, development and long-term career pathways and our strong ever-evolving culture remains a genuine differentiator and a long-term source of competitive advantage. We're supported by a broad and diverse supplier base with over 2,000 suppliers across Australia and New Zealand. These strong long-term relationships are deeply valued, helping us deliver for our customers. And our connection to community remains fundamental with our team supporting tens of thousands of local activities every year. Together, these create sustainable long-term value for shareholders, reflected in our world-class return on capital of over 70%. We'll turn now to Slide 24. Bunnings has established a track record of delivering sustained growth over time across a wide range of economic, geopolitical and financial conditions. Over more than 3 decades, the business has operated through the Asian global financial crisis, the mining boom and subsequent slowdown, COVID-19 and of course, the more recent geopolitical conflicts. And across these, we've adapted to ensure our business model and diverse customer proposition have remained strong. In softer conditions, we know customers lean into value, reinforcing the importance of our lowest prices, convenience, bulk offerings and breadth of range. Our exposure across both B2C and B2B segments provides additional diversity, supporting resilience through the cycle. Being highly disciplined on capital allocation creates confidence to invest for growth and improvement across stores, supply chain, inventory, digital capabilities and team remain -- keep us well positioned to respond to changing market conditions. We'll turn now to Slide 25. Our addressable market continues to expand. Today, across Australia and New Zealand, it's around $113.5 billion and continues to grow as we evolve our offer, channel and footprint. We've taken a disciplined approach to category expansion informed by detailed customer and market research along with global insights. We start with small test-and-learn models before scaling quickly through the strength of our team alongside new and existing supplier partners. Our expanded pet and automotive offers are great examples, along with growth in 4-wheel drive accessories, lighting, motorcycle batteries and a new cycling range. We also continue to grow and evolve core categories supported by strong supplier partnerships. In the last year or so, the confidence shown by DeWALT and Makita through their expanded commercial tool ranges highlights how Bunnings and its suppliers, along with its customers can grow together while challenging traditional assumptions about what products will work in which channels. This year, we will launch the Einhell professional tool range exclusively in our stores. As one of Europe's leading power tool brands, Einhell will give our trades access to a comprehensive professional range whilst leveraging the broader Ozito ecosystem across lifestyle and camping applications. We also have trials underway in categories such as paint and garden tools to explore new layouts and adjacencies. And of course, we're not stopping there. We're engaging with several strong brands to broaden our major appliance range, building on the success of our small appliance categories, which we launched several years ago. As our homes become increasingly connected, reliable Internet and data services are becoming a core part of the smart home ecosystem. Building on our leading position across smart home electrification and tech categories, we will expand our offer to include WiFi and mobile services supporting increasingly connected homes, complementing our broader offer across energy generation, storage and usage through a compelling proposition backed by Bunnings. Beyond this, we have a strong pipeline of future category expansion opportunities, including rural, workwear, assisted living, camping and lifestyle to just name a few. We're also opening up new geographic and digital pathways, which I'll speak to shortly. We'll turn now to Slide 26. Competition today is broader and more intense than ever, fragmented across players, categories and channels. Customers have countless options with technology making market entry easier across almost every category. So we've adapted by meeting customers wherever they are in stores, online through our marketplace, at home on job sites and increasingly through agentic commerce. Turning to Slide 27. Our market continues to be supported by strong long-term fundamentals, many of which remain resilient across the cycle. Population growth across Australia and New Zealand continues to support housing demand at a time when supply remains constrained. Repairs, maintenance and alterations also provide a resilient demand base across homeowners, investors and increasingly renters as rental laws continue to evolve. At the same time, demographic and lifestyle shifts, including an aging population, changing household formation and growing demand for more sustainable and energy-efficient living solutions are creating new growth pathways across mobility, electrification and services. Changes in how people live and work are also creating new opportunities for the business. Greater flexibility in work patterns and increased time spent at home support engagement across a broad range of home improvement, lifestyle and project categories. We'll turn to Slide 28. Our sustained success over more than 3 decades is anchored in our 3 core pillars. Lowest prices every day remains critical, supported by a deep supplier relationship and a disciplined focus on cost and productivity. It's never been more important to provide price transparency and trust whilst avoiding gimmicks. We invest heavily in price and our price match policies allow us to react quickly to changing market conditions. Our widest range continues to expand with over 0.5 million products available in-store, online and through marketplace, spanning home, commercial and lifestyle categories, including the brands that we know our customers know and trust. This is also supported by best experience regardless where customers are, whether they're at home, on the job site through our team, our stores, digital platforms, supply chain and making sure that we are consistent in our delivery and execution regardless of when or where our customers choose to shop. These pillars underpin our customer value proposition and remain a clear source of competitive advantage and deep brand trust. We'll turn now to Slide 29. Building on these strategic pillars, our culture and community connection set us apart. This starts with maintaining a safe and inclusive workplace where our team can contribute and perform at their best. Our strong links to the communities in which we operate remains a defining feature of Bunnings. In the last financial year, we helped raise close to $68 million for community groups over 77,000 local community activities. Sustainability-wise, we're now powered by 100% renewable electricity, supported by over 215 rooftop solar installations across the Bunnings network. And of course, we remain well on track to achieve net zero Scope 1 and 2 emissions by 2030. Turning to Slide 30. As I mentioned earlier, our plan has multiple growth drivers across a diverse customer base, supported by a strong record of disciplined execution. At the core, we continue to expand our offer through range expansion, new categories and evolving how our customers shop with us. We're optimizing our network, improving layouts and accelerating space productivity. In commercial, we're driving growth through changes to loyalty and target capability investment, strengthening how we support trade and business customers. We're also building adjacencies with significant long-term potential, including the $3.3 billion home electrification market through solar, battery and EV-related solutions. These complement our broader expansion across solar and energy storage through lighting, water and cleaning as well as EV charging. Blackwoods further adds to our range, accelerating our participation in the greater than $10 billion SME market through enhanced sales management, industrial-grade products and fulfillment capability. AI, data and digital capabilities are increasingly enabling the business by improving personalization, expediting decision-making, simplifying our operations and supporting productivity at scale. These initiatives are supported by a strong productivity focus, enabling reinvestment in our business, maintaining price leadership for our customers and supporting strong shareholder returns. Many of these initiatives are already delivering strong results, giving us incredible confidence in both our execution capability, but the opportunities that lie ahead as well. Turning to Slide 31. Driving growth from the core comes from disciplined range renewal and targeted category expansion. While I touched on some earlier examples, this extends across our whole offer. By evolving the look and feel of our stores from a merchandising and service perspective, we can now better showcase new and existing ranges, improve our customer experience and enhance space productivity. And of course, no department or category is static or immune. Changes such as the introduction of lead-free tapware and plumbing is helping us renew ranges and bring greater style and innovation along with better value to our customers. And similarly, our new lighting grids create more of a showroom environment, making it easier for customers to explore our ranges. We've also launched rural ranges across marketplace and 140 regional stores in Australia and New Zealand. With over 800 SKUs, including fencing, animal feed, irrigation and rural hardware, this materially expands our addressable market in our regional catchments. We continue to evolve and accelerate our range review process by leveraging AI and improved data capabilities to support decision-making and speed up execution. The same is, of course, is happening online with improved range curation and AI-enabled tools to help our customers more easily complete projects and bring their ideas to life. Turning to Slide 32. Our store network remains a significant growth driver for the business with opportunities to expand the network and improve productivity. Over the past 5 years, we've grown sales almost 4x faster than space growth, driving improvements in sales density and return on space. This is achieved -- this has been achieved in a disciplined way through range changes and category expansion, particularly in higher consumable categories that also increase customer shopping frequency. Looking ahead, we see a strong and disciplined pathway for network growth of around 10% over the next 5 years, supported by expansion opportunities, particularly in regional areas and a pipeline of over 100 property projects spanning new replacement and upgraded stores. A great example is our small format store optimization program. Our pilots delivered uplifts in sales and gross margin density and a rollout is now underway across the whole network. This includes reallocating space from lower productivity categories into stronger performing ranges. Curated assortments simplify our operations and reduce the need for ongoing range adjustments. And another example is the Beaumont Tile store-in-store concept, which we launched as an initial trial at French's Forest here in Sydney when the store opened late last year. The performance of the concept has exceeded expectations as has the performance of the traditional Bunnings flooring offer in the store with a planned multi-store trial now following. For those interested, a video fly-through of our French's Forest store is available on the Wesfarmers website. Turning to Slide 33. Commercial is a key growth driver for the business with sales continuing to track towards 40% of revenue. This addressable market is large, fragmented and growing, and we see a significant runway ahead, including clear opportunities to scale our commercial operations across our 3 segments: builders, trades and organizations. To support the next phase of growth, we'll soon launch the next generation of our PowerPass loyalty program. PowerPass is a key enabler of our commercial business supporting over 1 million customers, creating a strong competitive advantage through deeper customer relationships. Our trade customers have told us they value greater recognition for their spend and more personalized experiences, and we've listened carefully. PowerPass Pro Rewards will introduce spend more, get more rewards, along with exclusive member offers and tools and services designed to help our customers to run their businesses more effectively. We expect this to accelerate growth by increasing engagement and shopping frequency, boosting share of wallet and improving customer retention. More broadly, we have continued to strengthen our commercial offer through faster delivery, specialist service teams and AI-enabled quoting tools that are already materially improving response times, team productivity and conversion outcomes. We're also excited by the opportunity to support the Wesfarmers Built Living joint venture through the supply of joinery, fit-out and landscaping products, creating incremental growth opportunities for our trade and commercial capabilities. Turning to Slide 34. I touched earlier on some of the opportunities from working with Blackwoods. This move will accelerate our growth with commercial customers and strengthens our opportunity to broaden our offer to business customers across Australia and New Zealand. For Bunnings customers, this also creates access to a wider range of specialist products and more tailored solutions for SMEs and commercial customers. It also strengthens our scale across sourcing and supply chain capability, creating opportunities to share expertise and leverage complementary strengths across the businesses. Importantly, Blackwoods and Workwear Group will continue to operate as stand-alone businesses, retaining their customer-facing brands and continued focus on their core service proposition. We'll turn now to Slide 35. We're well positioned to grow through a number of compelling adjacencies to our core business. I touched earlier on smart home and solar. While solar adoption has grown rapidly, it remains complex and costly in the market for our customers. So we're seizing the opportunity to simplify that experience and improve affordability. In May, following a successful trial here in Sydney and Newcastle, the Zelora offer was also made available to our customers across New South Wales and into Victoria, Queensland and South Australia, bringing more affordable solar and battery solutions to households. With energy costs continue to rise and demand for solar and battery solutions increasing, Zelora provides a cost-effective pathway for our customers to access home electrification without the significant upfront costs. Customers will pay through a subscription model and own the system outright at the end of a 10-year term. In the Pacific Islands, we're growing our commercial export relationships while unlocking new customer channels through Bunnings Pacific. Our digital store is now fulfilling orders directly to customers in Fiji, a market of close to 1 million people. This initiative builds on existing export demand and creates a scalable platform for broader Pacific growth, representing initial home improvement and lifestyle market of more than $1 billion. We also see strong opportunities to expand our commercial wholesaling presence across the region, particularly within the visitor economy where hotels, resorts and supporting infrastructure are major drivers of economic activity. We'll turn to Slide 36. The Bunnings marketplace continues to scale as a growth engine for the business with gross merchandise value growing by nearly 50% per annum on average over the last 5 years. Marketplace allows us to expand range rapidly, particularly across long tail and specialist categories while improving customer choice and availability. For example, our rural marketplace range has grown GMV by more than 33% over the past year, helping us better serve customers in regional and remote areas. And it's a similar story in automotive, where GMV has increased by more than 70% since July last year. We see significant opportunities ahead across this channel. We've now launched our trade marketplace, and we'll continue expanding into New Zealand later in the year and have plans underway for a services marketplace that builds on the dozens of installation services we already provide for trade and DIY customers. Turning to Slide 37. At Bunnings, we see AI as key to delivering the best customer experience through conversational commerce and agentic AI. The launch of Buddy in April demonstrates the speed and scale of our digital transformation, cementing us as a global retail leader in the use of this technology. Buddy is already delivering strong engagement outcomes, including more than doubling online conversion rates and increasing basket size through project-based shopping behavior. Buddy helps our customers take on DIY projects with confidence by bringing expert advice into the home through a more personalized experience across browsing, planning and purchasing online. Importantly, the solution complements the trusted advice that our incredible team provides in-store every day, giving our customers more ways to engage with us. We also know customers are increasingly searching their products directly through generative AI platforms. In the next 2 weeks, we will be among the first retailers in Australia to launch a shoppable range through Google AI mode. Customers will be able to research products, select recommended items from our catalog and complete transactions directly through AI mode across Google Search, Chrome and the Google app. Turning to Slide 38. Bunnings is emerging as one of the leading retailers in Australia in applying AI at scale across customer experience, commercial operations and productivity. AI is now embedded across the business, helping our team work smarter, freeing up time to focus on customers and higher-value activities. At our core, we are a people-led business, and our team remains central to the customer experience. So when we think about AI in our stores, the focus is on how tech can help our team serve our customers better. A great example is the team chatbot, which we rolled out across our store network last year. This is accessed through handheld devices, giving our team members fast access to product information, policies and service advice while helping them serving their customers on the floor. The chatbot now answers over 1,500 queries a day and has analyzed more than 4 million product, policy and Internet entries to support the way our team engage with customers. More recently, we introduced visual search capability, which allows our team to photograph a part brought into the store and quickly identify whether we have a stock replacement. We've also introduced AI into our commercial quoting processes, significantly reducing workload and enabling same-day responses, helping our team to win more business. And we're using a new AI elasticity model to help maintain strong EDLP pricing while optimizing our inventory. And we've introduced Janie, an AI tool developed by our team that draws on product reviews to help our merchandise team identify trends, improve product decisions and strengthen supplier conversations while also supporting our move into agentic commerce. These capabilities are already delivering measurable outcomes across sales, productivity and team efficiency with a substantial runway ahead as adoption continues to grow. Moving to Slide 39. Personalization at scale is a key driver of customer loyalty and earnings growth. Today, around 65% of our sales are linked to a loyalty platform across OnePass, Flybuys and PowerPass, giving us a significant advantage in understanding the needs of our customers. This allows us to better understand shopping behavior and deliver more targeted offers, driving higher engagement and stronger customer lifetime value. Through our investments in data and AI, we're evolving personalization to better understand customer projects and deliver more relevant advice, content and solutions. We also see further upside from expanding these capabilities into New Zealand, where we don't have that capability today. This represents a clear opportunity to increase engagement and drive incremental growth over time, and we look forward to launching the program later in the year. Overall, our ability to leverage data and loyalty at scale is becoming a key differentiator, supporting higher basket value, stronger conversion and more efficient customer investment. Turning to Slide 40. We are rapidly scaling our retail media platform into a higher-margin, capital-light earnings stream. The Hammer Media network now spans more than 560 in-store screens across more than 250 stores in Australia and New Zealand, including paint and tool shop screen trials in Victoria. We're also exploring additional digital opportunities across our store and Pulse sign assets. And in November last year, we launched it, our ad server platform, enabling supplier advertising across websites and apps and strengthening our digital media capability. We've also launched our own DAB radio station, Tradio, extending our audience reach. DeWalt is the primary sponsor of Tradio Commute, an early morning drive program with brands such as Mercedes and Amex already participating as non-endemic advertisers. Together, these initiatives and our unique customer mix are strengthening our retail media network, enhancing the propositions for both endemic and non-endemic advertisers and positioning Bunnings as one of the leading media retail platforms in Australia. We're enabling productivity -- sorry, turning to Slide 41, I should say. We are enabling productivity through disciplined investment in tech and team capability. Across our store network, technology is simplifying workflows and improving customer service. As I touched on earlier, our enterprise-wide approach to AI and the broader tech agenda is delivering significant benefit right across the business. Electronic shelf labels, which we continue to expand across more categories, give us faster price changes, improved accuracy and reduced manual activity in store. Rostering and execution management tools are also helping to improve service, focus -- I'm going to start that again, my apologies. Rostering and execution management tools are also helping improve in-store service while optimizing team coverage and supporting our ability to offset inflationary pressures across the cost base. And across our supply chain and fulfillment, we're investing in order management systems and productivity initiatives to improve visibility, efficiency and fulfillment capability. Across our customer contact centers, technology is helping to resolve queries faster, reduce repeat contact and improve efficiency with a strong focus on customer outcomes. Together, these initiatives are delivering meaningful productivity benefits, supporting stronger operating leverage across the business. Turning to Slide 42. As our network and e-commerce offer continue to grow, we're evolving our supply chain in a logical and incremental way, improving productivity, customer experience and safety. Our long-term road map focused on enabling greater direct sourcing, simplifying store replenishment, enhancing fulfillment and last mile capability and leveraging technology, data and AI to drive a more connected and scalable network over time. Importantly, our approach remains highly disciplined from a capital perspective. We are focused on targeted investments that improve our network while leveraging strength in the proximity advantage of our existing store network. As our customer expectations evolve, our agility positions us well to support future growth across stores, e-com marketplace and commercial while continuing operating -- to improve operating leverage across the business. Turning to Slide 43. Over the past 2 years, we've expanded our inbound freight model with a growing cohort of suppliers, enabling Bunnings to directly manage freight movements into stores from supplier pickup through to back dog delivery. This has reduced in-store congestion, improved safety, given us stronger fleet utilization and more predictable delivery flows. And we're now rolling this model out across more of our suppliers and categories, giving us greater control and visibility across the supply chain while unlocking further efficiencies for both Bunnings and our suppliers. As e-commerce continues to scale, we're also building a leading fulfillment offer through expanded delivery options, including same-day, next-day and 2-hour delivery, our Uber Eats partnership and of course, 2-hour click and collect. These capabilities help us better serve customers wherever they shop, whilst leveraging the advantages of the store network being located so close to where our customers live and work. And finally, to Slide 44. To close, Bunnings has consistently delivered sustainable revenue and earnings growth over the long term. That resilience is underpinned by an expanding addressable market, growing our core categories and introducing new channels and markets. Supporting this are long-term demand drivers that are really favorable and a diversified mix of customers, channels and categories. Looking back over the last 20-so years that I've been at Bunnings, I can't recall a time where we have been more energized by the opportunities ahead. Some of that comes from the step changes delivered through our significant tech transformation and some from the energy and innovation we continue to see from our team and our suppliers. The success of our category expansion, new channels and new markets has further strengthened our confidence that we are well positioned for our next phase of growth. When I think about the time, cost and productivity opportunities that we're unlocking, I'm increasingly confident in both our ambition and our ability to execute. Our offer continues to evolve. We are growing and optimizing our space. We are accelerating our digital data, AI and tech capabilities and delivering tangible productivity outcomes right across the business. Together, our growth plan positions us to build on our momentum and continue to deliver long-term sustainable and profitable growth. Thanks so much, and I'll now hand over to Aleks from Kmart.

Good morning, everyone. I'm Aleks Spaseska, Managing Director of Kmart Group. So today, I'd like to cover our strategy, the progress we've made over the last 12 months and how we are positioning the business for sustained growth in sales and earnings. Our strategy is clear. We're scaling a structurally advantaged value-led model. We're reinvesting productivity gains in price and growth initiatives, and we're doing this with disciplined capital allocation. Turning to Slide 46. Last year, I set out a refreshed strategy focused on strengthening our core and scaling two growth platforms, digital and global. Over the past 12 months, we have made strong progress. In our core business, Anko remains central to our product strategy. We have leveraged our differentiated product development capability to expand strategic growth categories while also using our scale advantages to deliver even lower prices for our customers. In response to ongoing cost of living pressures, we have reduced prices on more than 2,500 products just this financial year. And we expect value to remain an enduring trend and are very well positioned within this environment. Our store network also remains a significant competitive advantage. We're continuing to evolve our format to drive higher visitation and sales productivity, with 16 stores now trading in the new Plan C+ format. We have also continued to progress the transformation of our supply chain, including the ongoing construction of our Next Gen omnichannel fulfillment center while advancing productivity initiatives across the whole business. In our growth platforms, we have accelerated progress in digital. The Kmart digital ecosystem now extends across Target and third-party marketplace sellers, supporting customer acquisition, increased traffic and stronger product engagement. We have also made significant investments in fulfillment capacity and capability, creating a solid foundation for long-term growth. And in global, our five stores in the Philippines have further validated our customer value proposition and help refine our areas of focus. Building on the progress we have made, our future strategy remains focused on the customer and specifically, two things. Firstly, value remains an enduring trend across all customer segments, and this has become even more pronounced in recent months. Secondly, younger, digitally native consumers are growing fast in retail spend share. Engaging these customers early through the evolution of our product offer and shopping experiences is a strategic priority. Turning to Slide 47. Our competitive position is built on a set of structural advantages that are difficult to replicate at scale. Firstly, Anko gives us a differentiated product engine, combining design, sourcing and product development capability to deliver quality products at low prices. Second, our Low-cost operating model allows us to reinvest in price and maintain value leadership. This is supported by scale, simplified ranging, strong supplier partnerships and growing productivity across our business. Third, our Store network gives us reach, convenience and a powerful omnichannel advantage. Stores remain our largest channel, but they also play an important role in digital fulfillment. And finally, our digital ecosystem is becoming a more meaningful driver of growth, deepening engagement, expanding our addressable market and strengthening how customers shop and discover our offer. Importantly, it's the combination of these advantages that matters most. Together, they create a resilient, value-led model that positions us well to respond to changing customer expectations and supports growth over time. Turning to Slide 48. This slide brings together the strategy we are executing across Kmart Group. At the center of that strategy is our enduring purpose, making everyday living brighter. In an environment where value matters more than ever, that purpose remains highly relevant for customers. Our retail brands, Kmart and Target, play distinct and complementary roles. Kmart is focused on delivering the lowest prices on everyday items for families. Target is focused on quality at low prices in apparel and soft home. Together, Kmart and Target can capture a larger share of the addressable market than either brand alone, while both benefit from a common operating model that leverages the combined scale of the group. We have five strategic pillars that will drive growth in sales and earnings over time, and I'll now step through the progress we've made and our priorities within each pillar. Turning to Slide 49. Delivering better products at even lower prices remains one of our most important growth levers. Our opportunity is to grow share of wallet in a large and expanding addressable market. We are doing that by combining our product development capability with the scale advantages of the group. Over the past year, we have continued to broaden and improve our ranges in areas where we see the strongest growth potential. As just one example, our youth apparel ranges continue to perform well, representing an increasing proportion of womenswear and menswear sales. This success has been underpinned by faster design to shelf lead times enabled by digital tools and supply collaboration. Elsewhere, we continue to build on our first mover advantage in the Kidult category. With the category continuing to grow, we see further potential from product innovation. And furniture is another good example where we see a significant opportunity to expand into a large category by bringing high-quality on-trend products to market at extreme value price points. Within this strategic pillar, Kmart and Target played differentiated and complementary roles. As I mentioned, Target remains focused on quality at low prices in apparel and soft home, helping us broaden our reach across the total market. Across both brands, we continue to invest in digital product development capabilities to improve speed to market, optimize our ranging and further strengthen product innovation. This includes embedding AI across the product design and quality life cycle, for example, in faster insight generation, trend analysis and more streamlined supplier collaboration while keeping the human judgment and curation that differentiates our ranges. Over time, we expect to move toward even more agentic AI applications. Underpinning all of this is disciplined focus on manufacturing best practice, automation and collaboration, which allows us to keep prices low for customers. Turning to Slide 50. Stores remain one of our most important structural advantages, and we're investing in format innovation and digitization to improve productivity, customer experience and our omnichannel capabilities. A good example is our Kmart Plan C+ store format. We have 16 stores trading in the format today, and it is delivering improved space allocation, better visual merchandising and an enhanced beauty experience. Importantly, the format is driving higher sales through increased cross shop between departments, more items per basket and strong engagement from younger customers. As a result, we are scaling investment in the format and expect to have around 40 Plan C+ stores trading by the end of FY '27. We're also trialing some brand-new concepts, including a K Home store, which I will cover in more detail on the next slide, and a partnership with Officeworks to trial a tech hub in a Target store, which John will cover in his presentation. Alongside format innovation, digitization of our stores remains a major priority. Our focus is on improving inventory accuracy, product availability and team efficiency while also building a stronger foundation for omnichannel fulfillment. RFID has already delivered better on-shelf availability and inventory integrity in apparel, and now we're extending that capability across additional categories and into Target. In parallel, we're using AI-enabled solutions to improve inventory integrity in general merchandise while the broader RFID rollout continues. Earlier this year, we also completed our first RFID-enabled stock take in apparel, demonstrating a faster and more accurate alternative to our manual processes. Taken together, these initiatives are making the store network more productive and more relevant to how customers want to shop. Turning to Slide 51. K Home is a new concept store we are trialing as a stand-alone home and furniture destination. The first one will open in Box Hill, Victoria next week, and the video behind me gives you a first look at how the store is coming together. Strategically, it is designed to test whether we can unlock a bigger home opportunity through a more immersive format that showcases the breadth of the Anko range in a way our full-line stores cannot. The store has been designed to present the offer differently with curated displays, room-based inspiration and a more immersive home environment that helps customers discover the range in a more engaging way. There are two reasons this format is attractive. Firstly, it allows us to physically showcase a broader furniture and home range, including products that today are online only because of space constraints and strong sales densities in our full-line Kmart stores. Second, it gives us access to stand-alone locations that would not support a full line Kmart, helping us reach more customers with our low-price home offer. We will use the trial to learn quickly, refine the model and assess the longer-term opportunity. As you would expect, we will be disciplined in how we evaluate the format with a particular focus on sales density, cost structure and understanding how customers engage with the offer in this new environment. Turning to Slide 52. Our Low-cost operating model remains a core competitive advantage, and we're continuing to strengthen it through supply chain modernization, productivity initiatives and inventory optimization. This is what allows us to keep investing in lower prices for customers while also supporting sustainable growth in earnings. A key part of this strategy is our supply chain modernization program, which is designed to improve availability, reduce cost and build a safer and more scalable network. We have already made good progress. Centralized fulfillment for online orders is now scaled across New South Wales and Victoria, improving inventory availability, reducing complexity in our stores and supporting a better delivery for our customers. We've also upgraded our online order management system, providing a stronger foundation for future growth. Construction of our automated Next Gen omnichannel fulfillment center in New South Wales remains on time and on budget. The site is expected to become operational in FY '28 and will be a critical enabler of a more resilient, efficient and scalable domestic supply chain over time. The cost of commissioning the facility, including a period of dual site operation in New South Wales, will be reflected in our FY '27 earnings, with benefits expected to commence from FY '28 onwards. Alongside this, we're also upgrading our warehouse management systems across our network. Together, these investments are creating a more resilient and agile supply chain platform that can support both growth and efficiency over time. In parallel, we continue to focus on productivity, inventory optimization and cost efficiency across the end-to-end operating model. We have now scaled RFID at source to more than 60% of purchase order volume in apparel, improving item level visibility and accuracy and building the foundation for end-to-end supply chain visibility over time. Looking ahead, AI will become an increasingly important layer of optimization across forecasting, inventory positioning and replenishment. This has the potential to further improve speed, consistency and cost outcomes across our network. Taken together, these initiatives are strengthening our low-cost operating model and improving our ability to further invest in price availability and long-term growth. Turning to Slide 53. Digital is one of our most important growth platforms, and we're continuing to build a more compelling omnichannel ecosystem for customers. Our objective is to expand the addressable market, deepen engagement and further improve conversion. The clearest example of that is our marketplace, which brings together Kmart, Target and curated third-party products in one highly discoverable platform. The marketplace materially expands customer choice and makes it easier for customers to complete more of their shopping with us in the one place. We now have more than 130,000 products available on the marketplace from 90 sellers, and the early trading results have been really encouraging. Since launch, 40% of our marketplace customers had not transacted with Kmart in the prior 12 months, demonstrating the strong customer acquisition through this channel. We're also seeing larger baskets from marketplace customers, which indicates the positive halo effect into our own brand offer. The launch of Target on Kmart has also been successful as a customer acquisition channel for Target. The Kmart app is becoming the primary gateway to our digital ecosystem. Customers using the app are more engaged overall, and we see the app as the natural platform for Discovery, Loyalty and omnichannel shopping. Over time, we will continue to use OnePass, Flybuys and Kmart Group data together with AI to create a more personalized customer experience. That includes improving onboarding, tailoring content and strengthening loyalty and retention across the entire customer life cycle. AI is also becoming an increasingly important enabler of digital growth. Today, it is helping improve search, product discovery and customer service. A good example is Joy, our AI-powered shopping assistant, which is beginning to support more intuitive shopping journeys through guided product discovery, conversational assistance, virtual try on and see it in your space experiences. Over time, agentic capabilities will play a broader role in supporting conversion, personalization and post-purchase experience as our digital ecosystem scales. Taken together, these initiatives are helping us build a more personalized, more engaging and more scalable online offer. Turning to Slide 54. Global expansion remains one of our long-term growth platforms with the opportunity to grow Kmart Group's addressable market and build the value of the Anko brand in international markets. Our ambition is to develop Anko Global into a business of meaningful scale over time, but we are doing so in a measured and disciplined way. Over the past 12 months, the five Anko stores in the Philippines have provided important proof points on the strength of our customer value proposition. The customer response has been encouraging, giving us greater confidence that the Anko offer can resonate in international markets beyond Australia. Just as importantly, the pilot has helped us to refine our model and better understand where we see the strongest path to profitable growth. As a result, we have sharpened our channel strategy. Future investment will be focused on Anko-branded stores where we see the greatest opportunity to build brand awareness, deepen customer engagement and create a stronger long-term platform for growth. At the same time, we will continue to support our large retail partners, which remain an important part of how we extend the reach of the Anko brand globally. Our approach remains disciplined. We will continue to learn, refine the model and scale deliberately with a clear focus on profitability and capital discipline over time. While Anko Global will not be material in the near term, we continue to see the potential for it to become a meaningful contributor to Kmart Group over time. Turning to Slide 55. Delivering the strategy requires targeted investment in a number of high-priority capabilities, with FY '27 to represent a significant year for investment. The largest single driver of that will be the commissioning of our Next Gen omnichannel fulfillment center in New South Wales, which is an important enabler of a more efficient, scalable and resilient operating model over time. Beyond supply chain, our investment priorities are focused on three areas: Store format renewal and digitization, digital ecosystem capability and core technology and operating platforms that will improve speed productivity and decision-making across the group. Our investments prioritize capabilities with clear strategic relevance, sequencing spend over time and balancing near-term earnings impacts with the long-term benefits these capabilities are expected to deliver. Taken together, these investments are designed to support a more productive more scalable and higher growth business over time. Turning to Slide 56. I'll now close with four key messages. Firstly, Kmart Group is scaling a structurally advantaged value-led model. Our differentiated product capability, low-cost operating model, store network and growing digital ecosystem position us well to respond to customer needs and grow over time. Second, customers remain highly focused on value in the current environment, which makes our low price positioning especially important. That is why we remain focused on price productivity and disciplined execution while continuing to invest in the capabilities that will strengthen the business over the long term. Third, we're investing in a disciplined way to scale our model. FY '27 will represent a year of material investment, and those investments are targeted at strengthening our structural advantages, improving productivity and scalability and supporting sustainable growth in sales and earnings over time. Taken together, we believe this positions Kmart Group for sustainable growth in sales and earnings over time. Finally, I'd like to take a moment to sincerely thank the teams across Kmart, Target and Anko for their continued hard work and dedication to delivering for our customers every single day. Thank you, and I will now pass to John Gualtieri.

Good morning, everyone. I'm John Gualtieri, the Managing Director of Officeworks. Having commenced in August last year, I'm pleased to be here today to present our refresh strategy. Moving on to Slide 58. I'd like to start with some key observations from the comprehensive strategic review we conducted that has shaped this strategy. It is clear that Officeworks is a strong business built on the foundations of a trusted brand, loyal customers and a passionate team. More importantly, these are significant opportunities ahead of us. The first is our cost base. While we have continued to grow our top line over recent years, this hasn't consistently translated into earnings growth. Standing at a pivot point with AI and digitalization, we now have the perfect opportunity to fundamentally reset our cost base. Second, we are seeing a distinct evolution in customer needs and shopping behaviors. This gives us an opportunity to strengthen our customer value proposition, particularly in the technology categories. Third, we have a major opportunity that lies within the large and fragmented B2B and Education markets, where Officeworks is strongly positioned to scale and gain market share. Lastly, we want to evolve our culture to support our new strategic ambitions. To unlock this full potential, we have reset our strategic direction and have commenced a multiyear transformation late last year. Moving on to Slide 59. Our transformation started with the refreshed purpose, we bring big ideas to life at low prices. This is grounded in what we're hearing from our customers that value is increasing front of mind when they shop. Underpinning this purpose are our new values, deliberately designed to reinforce the behaviors and culture required to deliver our transformation to drive a relentless focus on customers, accountability and our ways of working together. Moving on to the five strategic priorities. Our first priority is to become a low-cost operator. This enables us to reinvest in lower prices while continuing to deliver earnings expansion. Second, we will reset merchandise and value fundamentals to reclaim price leadership. Third, as we know, customers are changing shopping habits. We want to meet them where they are, provide frictionless and connected journeys, however they choose to shop. In terms of growth, we remain focused on the largest opportunities where we have the strongest right to win by becoming the first choice for complete tech solutions and a market leader in B2B and Education. To deliver a transformation of this scale and to win in a fast-paced digital world, we'll need to build foundational capabilities. The first is our data, digital and AI capability. Our ambition is to become a digital native retailer. For us, being a digitally [ novel ] retailer means transforming data, digital capabilities and AI into our ultimate competitive advantage. We treat every customer interaction, operational activity as a strategic data asset, utilizing technology as the core engine for decision-making across our stores, supply chain and support office. Rather than simply using AI to chase incremental efficiencies, we are leveraging it to fundamentally orchestrate new ways of working, completely redefining how customers shop, how we sell and how we operate from end to end. Combining this capability with the Wesfarmers share data asset of 12 million customers creates a platform for a powerful and hard to replicate competitive advantage. We will also expand our talent pool, both in Australia and globally to access core expertise in retail, digital, AI and automation. I'll share more detail on the next slide. This is our overview of our strategic framework. We expect to complete our core reset activities by calendar year 2027, providing us with a clear runway from that point forward. With that, I now will take you through each of the strategic priorities, beginning on Slide 60. Our first priority is to become a low-cost operator. Starting with our support office operating model. Over the past 10 months, we have applied a critical lens to rightsize our organizational structure. We have already made significant progress in restructuring our Australian support office to simplify how we work. We have also reviewed our executive team with deep transformational and global retail experience, equipping us with the capabilities needed to execute this strategy with pace. Globally, we have established the Officeworks operator Global Capability Center, or GCC, in India. As I noted earlier, global talent is a critical foundation of our strategy. This initiative not only unlocks significant efficiency, but more importantly, gives us access to world-class talent. We will also relocate a large proportion of our customer contact operations to the Philippines. In conjunction with these structural changes and to accelerate our journey to become a digital native retailer, we are focusing on digitalizing end-to-end support office tasks. An example at our recent AI-powered coding system, which is in the early phase has already resulted in a productivity uplift of 40% across the software development cycle. In making these decisions, we are guided by Wesfarmers' principles of being people-first and digitally enabled. This allows us to build a more resilient and efficient business while keeping our teams, customers and stakeholders at the core of our decision-making. In our stores, readily available and knowledgeable team member assistance is critical to the customer experience. To maximize our customer facing time, we're digitalizing manual tasks like rostering and inventory management, freeing up our teams to focus on delivery service on the sales floor. Moving on to global sourcing and supply chain operations. As a major strategic move this year, we will transition our sourcing operations to Anko sourcing. By plugging into Anko world-class sourcing capabilities, we gain immediate access to its global scale, unlocking significant structural cost efficiencies while accelerating our private brand innovation and speed to market. Alongside this, we're embedding AI-driven analytics in our end-to-end supply chain, including advanced demand forecasting and optimized last-mile routing. Lastly, we are actively optimizing our store property portfolio. We will continue to expand in profitable areas. We will also consolidate locations where it makes sense. This ensures our networks aligns with our evolving shopping habits and customer expectations while delivering optimal financial returns. Now turning to Slide 61 for our next strategic priority. Our second priority is to reset our merchandise and value fundamentals. As I mentioned early -- earlier, our new purpose is anchored in delivering low prices to our customers. While our first priority focused on reducing our cost of doing business, this second priority focuses on improving our offer for customers and enabling us to reclaim price leadership in the Australian market. During our recent review of merchandise performance, we identified a long tail of products that are no longer our customers' top preference. To address this, we are actively rationalizing our range and brand architecture. An example, we recently rationalized about 50% of the brands in cables and chargers category. By reinvesting efficiency gains back into our pricing, we have delivered double-digit percentage price reductions. Despite a lower ASP, we achieved a significant margin improvement driven by strong volume growth. Across all categories, we have delivered price drops on close to 2,000 products, with more in the pipeline. We are also accelerating private brand penetration. This is a strategic advantage, allowing us to drive innovation and value for our customers. We aim to double our private brand penetration over the coming years. Simultaneously, we will build deeper, more meaningful partnerships with our core national and international brand suppliers, with a primary objective of achieving greater shared commercial accountability and outcomes. Turning to Slide 62. Our customers' shopping behavior are rapidly changing, with about 80% of shopping missions now starting online. We must evolve to meet these new expectations of established omnichannel as a key competitive advantage. This shift isn't about keeping pace today. It is about preparing for the future and achieving our ambition to become a digitally native retailer. We are in the process of building agentic commerce capabilities across both our own digital platforms and third-party networks. Supported by partners like Google, we are preparing for a future of agent to agent commerce, where the customer's agent interacts with Officeworks agents to fulfill their shopping needs. We're also expanding our range to new customers across both digital and physical channels. Digitally, we are scaling our presence on third-party marketplaces and driving adoption of our new mobile app. Our recent launches in the Kmart and Uber marketplace are delivering strong commercial outcomes and show a material headroom for growth. These marketplaces enable us to profitably reach new customer demographics, such as a younger convenience-driven shoppers. Physically, we are actively trying new formats, beginning with a small tech shop within a Target, with our first trial store opening last month. Looking ahead, these small format trials will inform our longer-term vision for the network. Finally, we know the bar for immediacy has been raised. Today, over 90% of consumers consider fast delivery to mean same-day service, not just to meet but exceed those expectations. We have launched new fulfillment options, including sub-1 hour delivery through Uber. At the same time, we are continuing construction of our new automated omnichannel supply chain facility in Queensland, which will unlock a step change in productivity and immediacy. Now turning to Slide 63. For our growth priority. Win is the first choice for complete tech solutions. We are transforming from a retailer that simply sells tech solutions into a solutions-led service-enabled technology partner. To be first choice, our immediate focus is on earning their deep trust and becoming their top-of-mind destination for genuine advice and service. I'll walk you through the details of this model on the next slide. To support this ambition, we continue to evolve and innovate our tech range. We're expanding further into two high-growth lifestyle categories, the smart home and health tech market and the gaming and kidult market. While our primary target remains the mainstream everyday consumer who already shop with us, these lifestyle categories act as a powerful acquisition engine to attract younger and more tech-savvy demographics. By engaging these customers earlier, we have a clear opportunity to grow their customer lifetime value across our broader ecosystem. We are prioritizing these categories because we have a clear defensible right to win, built on three core strategic assets. First, our strong partnership with market-leading international and national brands. Second, our unique ability to bundle those brands with adjacent categories and the Geeks2U service to provide a complete solution. And finally, the trust and convenience delivered by our national omnichannel network. Geeks2U plays a key role in providing complete solutions and driving customer lifetime value. To build on this, we will continue to broaden our offer to cover service required throughout the tech life cycle. We'll also launch a refreshed postpaid telco offer which complements our hardware categories and creates lasting high-value customer relationships. Now turning to Slide 64. I'll elaborate on the details of our new in-store service model. We have fundamentally restructured our store operations model to focus on customer experience above just task and transaction. Our clear differentiated in the market will be our commitment to providing trusted service and advice that builds genuine, long-lasting customer relationships. Our first step is to increase our tech team and their coverage. By reinvesting productivity gains from store digitalization, we are deploying specifically recruited and trained tech team members into every single store. Second, in line with our digital native ambition, we are uplifting our team sales capability and product knowledge by fundamentally change how we put them on the sales floor. Alongside updated training programs, we are deploying AI-enabled recommendation tools directly into their handheld devices. This provides them with instant access to product comparisons, solution build and advice, empowering every team member to be confident tech experts on the sales floor. Lastly, we are launching product-agnostic team member incentives. This will ensure our team members are focused on providing unbiased, trusted advice that solves customer needs rather than just selling products. We're executing this initiative with pace, with the first tranche of stores launched and the full national rollout in FY '27. Now turning to Slide 65. The B2B and Education sectors represent a large, highly fragmented market. Our ambition is to capture that fragmented spend and become the #1 player in the market. We know the businesses, schools and early learning centers have broader needs than our core offering. To close these critical gaps, we expand into workplace facilities and education resources categories. Furthermore, we will extend our Geeks2U service to meet the increasing tech demand from SMEs becoming the go-to partner for complete tech solutions. We will continue to broaden our customer base, particularly in the large government, corporate and education segments, by attracting them through our strong value credentials, expanded range and service offerings. This will also be supported by a high-performance AI-enabled Sales engine in our global customer service center. For instance, we are deploying AI to monitor live interactions. It will automatically feel real-time product knowledge and services targeted upsell opportunities, empowering teams to capture demand in the moment. In terms of strengthening customer loyalty, we relaunched our Officeworks Business Program in late 2025 and has already delivered rapid transaction and strong engagement across the B2B market. Building on that success, we recently launched our Officeworks for Education sub-brand. This creates a single unified destination for all education needs across Officeworks and Box of Books. By making the experience simple and connected, we will become deeply embedded in our customers' workflows, driving powerful and long-term stickiness. Now moving on to the last slide. To capture the opportunities ahead of us, Officeworks has embarked on a comprehensive multiyear transformation. The first three priorities of this strategy are focused on the fundamentals. We'll become a low-cost operator, which creates the financial capacity we need to reinvest in lower prices and deliver earnings expansion. We'll reset our merchandise and value fundamentals to drive innovation and reclaim our price leadership credentials, and we will create inspiring omnichannel experiences to deliver a frictionless and connected journey. With those strong fundamentals in place, we'll accelerate penetration in our three most significant growth categories, tech and B2B in education. Finally, this entire plan is underpinned by our team, a relentless customer-first mindset, our expanded global capabilities and the power of digital, data and AI. We are confident in our ability to deliver this strategy. We have assembled the right team. We are leveraging world-class global capabilities and partnerships, and our early initiatives are already delivering tangible results. We will execute this strategy with absolute discipline, focus, pace to unlock Officeworks' full potential. Thank you. And with that, I'll now invite both Mike and Aleks back on stage to take questions.

I'm just going to go first. It's Tom from Barrenjoey. A fair bit has changed in the world since February since you last spoke. Can you maybe talk about what you're seeing in terms of customer behavior in store? How are you pivoting the offer? And then lastly, just on costs, what you're kind of seeing there, please? I don't know if you want to start, maybe Mike?

I've just reflected on Rob's comments about strategy day versus trading update, so I'll be very mindful. But look, I don't think the customer is any less value conscious than they were at this time last year, and perhaps that's intensified a little bit more. And there is definitely some uncertainty, but I think what the Bunnings business has been able to do is very quickly sort of understand what's going on, work very closely with its suppliers and make the pivots we've needed to make. But I think that the exposure we have as an EDLP retailer has positioned us really well to be there when the customer needs it. We are seeing, as I said before, that sort of drift towards value. But it hasn't been sort of as much disruption maybe as I'd anticipated. I think some of that initial shock was just are stopping pausing and reflecting on the impacts, particularly fuel costs and things like that, but haven't seen any sort of material impact to supply chain or stock flow or inventory availability. And that flows through the sort of products that are on water now. So the sort of seasonal and lifestyle products for the summer 2026, '27. So from that point of view, it's very much play on for us.

Yes. Look, from our perspective, I think we've talked about value as an enduring trend. I think that's definitely strengthened in recent months. And we can see from all of our customer data, households are very much focused on cost of living. It is the #1 issue on their mind and thinking about how they make household budgets work and how they find more value is really critical. So for us, the priority around low prices remains the really key strategic asset that we're focused on and maintaining in that environment. And I think it should position us well from a relative perspective. In terms of what we're seeing, I mean, we're still seeing our total active customer base continue to grow, so that hasn't changed. But we are seeing customers become much more discerning when they're in store. And I've talked previously about a reduction in items per basket. That trend continues to grow. So while our transactions now holding up, customers have been quite discerning about what they're putting into the basket, and we expect that to continue to grow. We are seeing growth across all customer cohorts in terms of affluence and demographic profiles. But I would say it is getting slightly tougher at that lower end of the market from an affluence perspective while the mid- to higher affluence is holding up a bit stronger. From a cost and a supply chain perspective, I think it's fair to say we've moved into an inflationary environment domestically and globally as well. So whether it's ocean freight, whether it's input costs for our suppliers, it is an inflationary environment. Now the offsetting impact to that is clearly the Australian dollar is materially stronger than it was a year ago. So that's playing a mitigating impact in terms of those costs. And it just means we're working even harder to continue to drive productivity, work with our suppliers to offset the cost that we can and go back to our immediate priorities, which are continuing to maintain low prices for customers and continue to invest in what are really strategic and critical growth platforms for us for the long term.

Thanks, Aleks. Very similar to Alex and Mike. Customers are becoming more savvy. They're doing a little bit tougher than what they had in the past, and they're looking for value. So for Officeworks, we've delivered 2,000 price drops and that engage strongly with the price drop. So that's been good for us. From a demographics and who's shopping with us. We've gone on to two different -- we've gone with the marketplace on both Uber and Kmart. And there are different demographics. So we normally -- 25 to 55 is where we over-index and being in the marketplace, that's added new customers for us at Officeworks has been quite good. From a cost -- and we're going through a transformation. So we're looking at all the different elements of cost at the moment. So we are in an inflationary period, but we're also looking at cost and productivity and some of the initiatives that we've always spoken about with AI, data, analytics is really helping us to eliminate some of those costs.

Sorry, Bryan from JPMorgan. I might just continue on with the cost theme. Just the Fair Work Commission came out at 4.75%. You also got the 18- to 20-year old cohort stepping up over the next 3 or 4 years. I'd just be interested in how each of you think about the wage cost outlook in your businesses? I recall Bunnings had an EBA where they paid above awards. I'm not sure if you got the 4.75%, if that's still the case? And if it would be possible just to run through how you see wages and if you need to cut back on store hours potentially to sort of manage that cost headwind?

Yes, I'll start. So from the perspective of our business, that decision clearly will flow through directly in terms of the wages for our store-based team members. And clearly, our first and foremost commitment is to ensure that we pay our team fairly. So from how do we manage that within the P&L, very much the same way that we manage every other cost inflation line across our P&L. I talked through the strategy in terms of productivity is something that we've been driving really hard across our end-to-end model. And we never look at just one line of the P&L. It very much is across all of the things that feed into our gross margin as well as all of the things that feed into our cost of doing business. And I think the visibility we have as a business across all of those cost lines means we can be very targeted in terms of where our opportunities are to continue to drive productivity. And as I said, I think they're quite material across our supply chain and also across our business domestically, not just in stores, but also within all parts of our above store operations as well. So yes, no different to any other costs we've managed in the past.

I might just pick up from there, Bryan. So yes, Bunnings does have an EBA that is distinctly different from GRIA. So some slightly different outcomes, and the fact we're in the process of negotiating that EBA at the moment. And the way that our workforce is structured is quite different. But we want to make sure that we continue to differentiate as an employer of choice for our team. But part of that is also making sure that we've got other productivity savings and opportunities across the business. And I think we've done a really good job of that. In my remarks earlier, we touched on some better rostering and some better execution management tools, which are making time in store simpler, but also more purposeful for team members. So I think our ability to offset increasing wage costs is there without any impact to our focus on delivering the best experience in store for customers.

I'm very similar, the wage increase will flow through to our team members, which is a good thing for our team members. And then we look for productivity like we do every year across our whole ecosystem to try to offset some of those increases.

Sorry, just to be clear, Mike, you guys have an expired EBA. Is that correct? And you're renegotiating? What's the wage rate increase this year for Bunnings?

We are still in negotiations. So we're working through with the team and the [ SDA ] at the moment. So -- but if those negotiations drag on, then we will pass on an increase and then true that up depending on how those negotiations go.

It's Michael Simotas from Jefferies. One for you, Mike, if I can. The chart, I think, on Slide 24, highlighting the resilience of Bunnings through various economic cycles. Just interested in terms of how you think housing specifically could play into that? So we've had a fairly weak construction environment for a while. But some of the lead indicators are suggesting that house prices may start to come under pressure, established housing turnover, potentially renovation, remodel activity. Globally, they seem to be quite strong drivers of your category. What do you think that looks like in Australia, if we do have that situation start to play out? I know in the past, you've pointed to some dynamics in local markets. So maybe you could just remind us how Bunnings has fared through times when housing gets tough?

Yes, sure. And I've seen a couple of those over my time. And I think if you look at probably the most sort of direct correlation being, say, us and Home Depot, us and Lowe's, the nature of the interest rate -- the way interest rate work for housing in the U.S. is one of the reasons why housing churn has stagnated there more so than some of the structural changes perhaps that we are going to face. What we're seeing is even in those times where people aren't able to sort of sell a home, if they're living in that home for longer, repairs and maintenance, renovations, those sorts of things are there. And I think that what we've seen over the long term is the Australians are a believer in the home is a really important asset within sort of the family wealth structure. So for us, we sort of see continued sort of investment in alterations and additions, repairs and maintenance, those sorts of things. And as I touched on earlier, the other thing that we're starting to see quite positively is with changes to rental laws, renters being able to do more R&M and improvement to the property, albeit minor, but that's also starting to drive some growth. But you're quite right in your points around construction, albeit that's a story of state to state. It's really strong, for example, in Western Australia, really weak in Victoria, a little bit in between here in New South Wales, but some of the other markets are quite strong. So at this point in time, we're confident that the offer that we're delivering to customers resonates. It will allow them to continue to improve their home. There's real interest in home electrification and obviously, solar, smart home, those sorts of things, but also our expansion to other categories, I think, is giving us another layer of resilience in the model.

So if you put all that together, are you confident that Bunnings can continue to grow the top line in the environment we're heading into?

Yes. I think as I sort of said in my closing remarks, Michael, I think the plan we're putting forward is a really ambitious plan. And I think we've demonstrated now really strong capability to expand our addressable markets, and they're very logical expansions. And I only touched on some today. There's a lot more that we've got, not only that we've got in train now, but will then come after those next round of expansions come. I think we're getting much greater space productivity out of our stores through that change in assortment. And I think the work that we're doing in commercial through PowerPass Pro Rewards and things like that to more deeply engage the commercial customer gives me a lot of confidence that we've got a great growth runway in front of us.

Craig Woolford from MST Marquee. Just a question for Kmart and Officeworks. In the remarks on Kmart, you suggested a material investment in FY '27. Can you give some quantification or understanding on what that means for the outlook for that year? Will we see earnings growth? I think Officeworks it was a slightly different comment, but of a similar ilk that maybe you don't see growth in Officeworks until '28, maybe, if I interpreted that right?

I'll kick off, Craig. So my comments in terms of the material investment year, we're looking at total cash investment. The primary increase is really going to be a CapEx year. So as we commission the new facility next year, there will be a significant amount of CapEx that comes through FY '27 related to that. The other part will be, as I mentioned, we're scaling the rollout of our Plan C+ format. And clearly, there'll be capital attached to that as well as the other strategic initiatives that we discussed. In addition to that, if I think about the OpEx, the dual running costs of the NextGen facility within the year, we're commissioning the new site and all the rents and costs that go with that, but we won't get the benefits until FY '28. That's probably the year-on-year difference in terms of OpEx investment within our base. Are we targeting earnings growth for next year? Absolutely, we are. So our agenda is very much focused on continuing to drive sales growth, continuing to drive productivity initiatives and those productivity initiatives will allow us to fund the investment in price for customers and also the strategic program that we have for FY '27.

So is there a guidance on the dual running costs?

Not at this stage, but I think we'll revisit as part of the full year results and see whether we provide any at that stage.

Thanks, Craig. So as we've already mentioned, we have -- this year is a transitional year where we've taken some one-off costs. You'll start to see the benefits of those in FY '27, but we do have some additional one-off costs in FY '27 with our new DC as well as our ERP implementation. But we do see earnings growth on this year as we move forward into next year.

Shaun Cousins, UBS. Maybe just a question on K Home. I think Home & Living sales look to have been based on your TAM and your share conscious that it's different periods, but looks to have grown some 23%. Is that the way -- is that what's driving the decision to have a stand-alone format such that you can sort of further grow into that? And is this similar to Anko in Seattle, where it was a trial with an end date? Or is this a trial that could continue on, assuming the economics are attractive?

Yes. Look, I think in terms of what's driven the growth in our overall Home & Living, Shaun, and we can get into your numbers after in terms of surrounding all the other things on those big numbers. But Home & Living has performed exceptionally well for us as a category over that period of time. If you look back, it's growing strongly within Kmart. And within Kmart, it's been driven by continued expansion into new categories. And importantly, it's been driven by what I talked about at the half year results as well, which is our product innovation at that up price point has meant that we've been able to enter categories and offer product innovation at extreme value price points, but that are a tier above what we've sold in the past, and that's been an incredibly successful strategy for the last couple of years. The second part has been obviously the introduction of Anko into Target over that period as well. And that's performing really well and is a material part of the Target business. I know you've had questions about that in the past. Anko in Target is about 20% of the total Target business today. So it is a material number and Anko is a material number outside of Kmart alone. Furniture is a category we see as really exciting. So furniture is growing above the Home & Living average. And we see that as a, first of all, a large market; and secondly, one where through innovation and technology advancements across our supplier base, it's allowing us to really bring extreme value price points into market at a quality proposition that we probably wouldn't have been able to access even 2 years ago. And that's really where we've seen the opportunity. We leveraged online first as a way to test and the response has been really positive. So the online penetration of furniture is quite high within our business, and we see good growth in that. Interestingly, it's also one of our best performing and most dominant categories on the marketplace as well. So online is performing well in terms of Anko. It's performing well as the marketplace. Why the K Home? I think I mentioned our Kmart stores run market-leading sales density. Our space is optimized to within an inch of its life. So the ability to create the space to give furniture what customers need, which is the opportunity to touch and feel is difficult to do without foregoing other high-returning space within the store, which is why we went down the online path. The second part is catchments. So we've got a mature store network, but we know that there are catchments where we're either overtrading or are a gap because they don't facilitate a full-line store. A lot of that is due to zoning restrictions across different geographies. And so we see an opportunity to actually be able to access incremental catchments over and above what we can with our full-line store. We're really -- I mean, we haven't opened the store, so it's next week. But I think we're going into it with lots of reasons to be confident that it is a scalable model and that it can deliver sales per square meter and a cost structure that would make it attractive, but clearly to be proven out when we launch the first store next week. We're already in discussions being transparent with landlords about other potential opportunities across the country, both Australia and New Zealand. So it is something that if the early trading results validate our initial hypothesis, it's something we would look to subject to property availability and being able to access commercially attractive rents, one that we would go after.

Great. And just for John, just around the transformation you're seeking to embark on in tech. Just how easy is it to get the appropriate access to brands and the ranges of -- within the brands. And then also Officeworks hasn't had a reputation for some of the technology products that you've had in the how do you go convince customers and market to that? And should we anticipate there's a degree to which you have the offer right, but then you have to sort of let the consumers know and get them to visit again.

There's a bit in that. So look, I'll start with 60% of the sales that we do today, close to 60% are actually technology sales. So already today, quite a few of our customers come to us for technology. We do have all the major brands, major leading brands in our portfolio. And we do have more brands now that are actually talking to us kind of want to come on the journey, which is positive for us. As we establish the ranges as we move forward, we won't have every single product from every single brand. Our job is to create ranges that make sense for customers as they come in so they can quickly make a decision with our team if they need support to actually be able to buy into the products that they need. So I guess, in short, we are already known. We've got some high market shares in a couple of the categories is how we expand into the other categories, which will be really important. We do have the benefit of 12 million customer contacts that we have through OnePass. And we, in the past, have been able to create different platforms to be able to communicate with customers. So I don't think that will be the issue.

It's Adrian Lemme from Citi. A question for Mike, please. Look, I know you already have a strong share in Bunnings in the barbecue category and a strong offer. But there was reporting overnight that Barbeques Galore is going to close. And I'm just wondering if you can speak to the opportunity in this category particularly with respect to the chance to maybe add a control brand like a Ziegler and Brown that might fit the mid- to upper end of your range or other sort of third-party brands that you might be able to attract, please?

Yes. Obviously, firstly, our thoughts with the team that are going to lose their jobs there. It's very sad. And obviously, Barbeques Galore has been an important part of the network. And I think it just speaks to the competitive nature of the market. I think what Bunnings has been particularly successful at doing over the last 20 or so years is developing brands like Matador and Jumbuck that are well known and trusted in the market despite the fact that they're actually private label brands. And I think that's been a real credit to the team. We continue to evolve that end of the store quite significantly. You'll see some quite different ranges in our outdoor furniture in the '26, '27 period and also starting to understand the opportunities to unlock these ranges into parts of the country where spring comes earlier or actually sort of spring is almost in winter time like the tropical North. Where it makes sense, we'll have conversations with brands. As I've said in previous strategy days, we work hard to attract brands to the Bunnings business, and we respect the fact that some brands choose different channels. So at a point in time, you sort of get to a moment where you go, is the juice worth the squeeze on bringing the brands in. But there are some brands there that if they're interested in talking to us, we would definitely talk to. And equally, we'd be interested in talking to some of the team because we know that there's some real depth of talent in there, and it would be great to pick up that into the Bunnings family.

And can I just pick up on that theme of attracting brands? You talked earlier about Makita and DEWALT had real success with the expansion of the tool shop. Is that encouraging other brands that maybe didn't initially partner with you to join? Or is it still too early there?

Look, I think if you spoke to either of those brands, they were blown away. And I think what it's done is really taken this traditional notion that the only place that a trade wants to shop for a pro tool range is a specialist and tipped it completely on its head. It's why we've been able to partner successfully with the Einhell business to introduce the Einhell pro range. If you look at our European peers across Groupe Adeo, across Jumbuck, Bauhaus and OBI, it is the leading power tool brand in those markets and absolutely dominates, and we're really excited to bring that in. And I think that's what it sort of shows us is that the strength of what we're doing is actually giving some global brands confidence to actually make the investment on the other side of the world. And again, as I said, we've successfully challenged the notion that the only place to buy a specialist tool product is a specialist store. They have a role to play, absolutely, but we've been really pleased with that outcome.

It's Peter Marks from Goldman Sachs. Just a question for John Officeworks. Just interested in what you're seeing in terms of inflation in the tech category at the moment. Maybe you can talk through like what you've seen already, what you're expecting in '27, how your customers are dealing with it? Interesting in [indiscernible] business. And then any availability issues.

So I think for everybody, there's been -- it's well documented, there's been memory and storage issues. And -- it probably started last October and it's gone all the way through. And it's still a long way -- it's got a little while to go still before that comes to an end. But we've seen price increases anywhere between 20% to, I guess, 50% at this stage. With how we're handling it, we knew about this early on. And so we've been working with suppliers and made some investment buys over time. So we've been able to mitigate a lot of the increases that others potentially have seen up until this point. As we move forward, what we're really conscious of is making sure that we have devices, whether it's laptop phones at the right price points for customers. So we're working with our suppliers to make sure that customers can come in, may not have the same memory or may not have the same storage as what we had a year ago, but they can have the choice and they can kind of trade up if they need to or if they've still got something at the entry price point. I probably see another 6 months of the elevated memory and the storage, and then we'll get to some type of normal after that.

And any issues on availability?

Not at this stage. No, we've been working with our suppliers forward forecasting and planning with them. There will be computers now, particularly on the computer, but generally, customers can come in, they can get themselves a computer at the entry mid or the premium at this stage.

That's great. Maybe just a quick similar one for Alex. With oil and plastic exposure in Kmart, can you give us a sense of how big that is and what you're doing to mitigate that?

Yes. I mean, clearly, there's product types across our entire range from polyester and apparel through to homewares, toys and across the board. The way that we work through that is, firstly, we make forward commitments with suppliers. So if you think about where that rolls through for the next kind of 6 months, first half of the financial year, the impacts of that won't be flowing through in terms of our cost base. The second part of it then is as we look further out, our team are just working proactively with our supplier base in terms of, first of all, because we look at the whole product development cycle, the first question is where are there opportunities to substitute. So for example, within apparel, natural fibers start to become more attractive versus polyester fibers. And from a customer perspective, that's a win-win in some instances. So looking at the whole end-to-end product development cycle with our supplier base to say what are the decisions we can make in terms of inputs to mitigate that? And secondly, what are the efficiencies within our supply chain and the way that we're working with our supplier base to be able to mitigate those impacts. So our priority is absolutely to keep the cost as low as possible and therefore, to keep the prices as low as possible for our customer base.

Do you think you'll need to lift price on the back of that or you can manage it?

Look, our priority is to, firstly, drive productivity. Secondly, continue to engineer the products with our supplier base to make sure that we continue to keep our prices as low as possible. That's absolutely our #1 priority. Our second priority is to continue to drive efficiency across our entire cost base in the pursuit of being able to continue to keep prices low. Will price adjustment be required at a period of time if this becomes sustained, that's just something we'll need to manage over time. But our priority is to keep prices low. And we think we've got enough across all of our strategies to be able to do that, whether it's working with suppliers, whether it's looking at the product design process or whether that's driving productivity across all parts of our business. I think with the strategy we outlined today and the impacts over the next year, we can hold prices without needing to do that. FX is clearly a really big mitigant in the short-term in terms of some of those raw material costs. Now if we go into a period of sustained inflation beyond the next 6 to 12 months, how that plays out, I think everyone in the market will be in the same boat, and we'll need to look at that. What I can confidently say is with the visibility we've got in our supply chain, we'll be the best-placed in the market to be able to work through that and deliver the best value for our customers.

Taylor Wheatley from Macquarie here again. Another one is for Alex. If I wind back 12 or so months, and apologies if I'm paraphrasing here, but I think you said something along the lines of ambitions to double the size of Kmart. Just any updated thoughts on sort of growth ambitions for the Kmart business? And then thinking about sort of the more meaningful tangible opportunities given how much is going on, yes, what you see as the sort of meaningful stepping stones to that growth over the next 3, 4, 5 years, please?

Yes. So absolutely, that is still our long-term aspiration. And again, to use the language of last year, aspiration, not forecast in the long term, so more than 5, less than 10. But very much our strategy, our business, our team are all anchored and I think inspired by the size of the transformation and the size of the aspiration we're going after. If I chunk down the strategy then in terms of the building blocks to do that, we clearly see still quite material opportunity to grow in our domestic market in Australia and New Zealand. And the buckets around that are, firstly, addressable market. I think our product development engine with Anko has demonstrated we can continue to enter new categories. We can continue to innovate our ranges and innovate our products and continue to grow our share of wallet of our customer base. Our store format innovation, we're increasingly seeing and hopefully what came through today as an accelerator and an amplifier of that product strategy. So within our existing store network, we're seeing the format unlock additional cross-shop and therefore, that statistic that we talk about around our average customer only shops about 20% of our departments, the opportunity to grow share of wallet through further engagement across our categories is a really material one, and we see our store format investment as an unlock of that. The new concepts that we're trialing in K Home is one that opens up incremental new catchments and incremental new opportunities in something like furniture that can be quite a material contribution over time as well if they're successful. So that's one part. The second building block is definitely digital. So our online market share is materially below our total market share as a business. And so we see really material opportunity to continue to grow online, both in terms of our first-party business, but also through the third-party marketplace. And the customer acquisition and the additional basket engagement that we're getting through our digital strategy speaks, I think, to the size of the opportunity to continue to grow online over time, unlocking additional revenue opportunities like retail media clearly come into play as well within that digital strategy. And then supply chain transformation is really big for us. So yes, it's a productivity play. It's one that helps us get to the earnings aspiration, but it's also a revenue opportunity as well. It gives us scale to continue to grow, but it gives us actually far greater agility to continue to improve our product availability for customers, both in-store but online. We know online product availability is a key pain point for our customers and our supply chain investments are a real unlock of that. And then finally, global. That's -- if you take a 10-year view of our business, can global be a material contributor to that aspiration to double? Absolutely. That's what we think and why we're continuing to invest whether it's in the stores or our retail partners overseas, and I keep saying it's not material now, but very clearly, over a 10-year view, you look at the addressable market opportunity, we do see a path to that contributing meaningfully to that aspiration.

Maybe just a quick follow-up on Anko Global. It might be a simple question, but why the Philippines? Is it sort of act as a bit of a guide to the other parts of Southeast Asia...

Yes, 2 reasons. Firstly, it's an attractive market in terms of the consumer demographics, they are quite favorable and a very large population and that's growing fast with favorable demographics. So that was one. We liked it as a market. Interestingly, it's -- I don't know if you've been there, but from a competitive perspective, it's a very mature, very competitive, very high-quality retail market as well. So in some ways, I think being able to prove out a successful offer in the Philippines also gives confidence around the offer translating into other highly competitive markets as well because you're up against some of the best retailers globally and some of the best Asian retailers as well, which we don't have in the domestic market. So market was one. And the second reason was really opportunistic around our joint venture partner clearly has derisked market entry and brings a lot of valuable knowledge to the partnership in terms of doing business in the Philippines as well as they have shopping center assets in the country. So clearly, the synergy between a retailer and a property owner in the local market was a nice opportunity for us to dip our toe in.

Ben from Jarden. Just a question around electronics. And you look at the electronics category and a brand and a retail level, it's typically very concentrated with a few and I appreciate doing there and as well in terms of where it sits. But EDLP, because if you hold true to the EDLP offer, you're going to have to come in with prices significantly lower than the competitors on branded items, which I imagine the suppliers probably wouldn't like. How are you navigating that in terms of getting the brands in? And are you finding that you're bringing pricing down in the market when you're pushing into more electronics categories?

So I think the first part would be that we are in an EDLP business. But there are times where we do get special deals from suppliers, and we pass those deals on to our consumers. So there will be times where consumers -- and take this end of financial year is a perfect time where we get the deals, we pass them on to the consumer. So -- are we compressing prices? No, we're kind of looking at market prices. We scan the market 2 to 3 times a day. We make sure that we're the lowest price, so the customers get the lowest price. And we pass that on if at any point during the day that we find cheap -- prices cheaper. But no, we haven't reduced prices. What we are doing is bringing in the technology category, particularly with accessories, we're bringing our own branded product, which will be at a different proposition, a different value proposition than potentially some of the national brand. And you will see some compression there in price.

Maybe just from a Bunnings Smart Home point of view, we have seen price fall in the market, which I think is a great outcome for the consumer. I think what sets Bunnings apart in that category -- and this comes from speaking directly to suppliers is the way the supplier is being treated by the business and the sort of support that's there. There is differentiation in products. So as with anything technological, you can sort of nuance the products quite effectively. But we're also finding that a range of things now. We've got suppliers actually just wanting primarily to deal with Bunnings and almost on an exclusive basis, not completely, but certainly with unique products that are differentiated to the market. Similar to John, it's very active monitoring of pricing. These are categories where electronic shelf labels and things like that are really helpful because you can react and respond to, say, a promotion or a sale at a competitor, and we will react in the moment to that, and then we'll revert to the sort of everyday low price after that as well.

The electronics trial you talked about, Mike, is that the Monee Ponds? Or is that going to be -- is this [indiscernible], which you got a bigger electronics offer in that? Or is this a broader trial across...

Yes, we're well through trial now. So we're into the rollout of our new smart home range. So it's about 160 new SKUs that are coming into the store. So I was in China recently talking to a couple of our major smart home suppliers, and they've been blown away by the growth of it. And I think there is a broader trend to not only smart home products, but smart security products. And smart home isn't just cameras and locks and things like that in vacuums in watering, and lighting, all these areas. So we're sort of seeing a real proliferation of this technology across our format. and great engagement from suppliers to want to work with us and help introduce new categories and ranges into the market as well.

So sorry, the major domestic appliances you mentioned at the start.

Sorry, my apologies.

That's what coming next?

Yes, that's going to come next. So we're in negotiations with a couple of really good brands that we'll launch. We've actually expanded out into some white goods now, and we're mostly under sort of private label brands and seeing fantastic responses through our promotional campaign, which is a testimony. We signed off the concept for the appliance rollout, and that will just continue over the next 12, 18 months. All right. I think that's a wrap. We're going to go to our next break, which is for about 20 minutes or so. Thank you very much. [Break]

Welcome back, everyone. It's still good morning. So today, I'm going to walk through the strategic focus areas of WesCEF, but really focus on a number of the production expansions that have been underway the last few years and also provide an update on some of the future opportunities that we think we're well placed to deliver on. So I'll turn to the first slide now. It's obviously -- it's a pleasure to be here again to present on behalf of the WesCEF team. Today, I'm going to take you through our strategic focus areas and the progress we've made on a number of those expansions to unlock the future growth for WesCEF. I'll begin with an overview here of our -- of the 4 business units across WesCEF. Our vision at WesCEF is to create long-term value for critical industries and everyday life. This is delivered through our portfolio of leading businesses, each with strong positions in their respective value chains. Importantly, many of the Australian industries we support have global competitive advantages and are critical to the national economy, including iron ore, gold, lithium and agriculture. Before stepping through our divisional focus areas, I'll start with a brief update on our key business segments. Firstly, on the left, starting with lithium. We achieved first lithium hydroxide production early in the financial year, alongside consistent nameplate production at the Mt Holland mine and concentrator. The Covalent Lithium project continues to progress towards refinery ramp-up, which I'll cover in more detail shortly. This is occurring at a positive time for the lithium market with a strong rebound in prices. In our Chemicals business, we delivered 2 major capacity expansion projects during the year. The nitric acid ammonium nitrate or NAAN plant debottlenecking and the first phase of the sodium cyanide expansion, whilst at the same time, continuing to provide high-quality supply to our customers during those expansion projects. Next, our Energy segment, which includes our LPG and LNG production facilities as well as our Kleenheat natural gas retailing business in WA has continued to deliver award-winning customer service and drive customer growth. And then on to fertilizers. CSBP responded to significant disruption arising from the Middle East conflict, causing sourcing issues, and we had to provide alternative product from our own manufacturing facilities in Kwinana. We also continue to work with government to advocate for opportunities to strengthen supply chain resilience for West Australian agriculture. I'll now turn to Slide 70. This slide represents our strategic focus areas and the model through which WesCEF creates value. We have a strong track record of leveraging a uniquely positioned asset base to drive growth, combining our operational excellence with a disciplined, repeatable approach to deploying incremental capital at attractive returns. This model is underpinned by our access to the WA gas market, our continued progress on decarbonization and the strength and capability of our team members and our focus on keeping them safe. That strength was evident in the way our team responded with agility and resilience during the Middle East disruption. Across our 4 strategic focus areas, you can see the benefits of this approach, both in unlocking production upside from existing assets and in investments in new growth platforms. Firstly, lithium delivery. Our focus at the moment is on ramping up the lithium hydroxide refinery in Kwinana, sustaining and building on the performance at Mt Holland and progressing towards a final investment decision on the mine and concentrator expansion. Lithium will be a significant platform for earnings growth for WesCEF in the coming years. Secondly, on operational excellence. Our focus remains on achieving industry-leading performance across plant reliability and yield across all of our production assets. This reduces earnings volatility and positions us to capitalize on expansion opportunities when they arise. This has long been part of the WesCEF DNA and looking ahead, AI presents the next wave of opportunity to improve production growth and plant reliability. Thirdly, customer focus. This remains central to how WesCEF operates. We continue to strengthen our capabilities as a reliable and trusted partner across all of our customer segments, including how we approach additional areas of investment. These relationships provide resilience across the cycle, flexibility in navigating challenges and the ability to capitalize on opportunities when they arise. And then finally, major project growth delivery. We see this as a repeatable capability for WesCEF. Across our businesses, we have a rich pipeline of expansion opportunities, supported by the technical capability and track record to deliver these. WesCEF operates in a supportive environment for local manufacturing, and there is a positive outlook for our key industries. These factors give us continued confidence to invest locally and support further supply chain independence. I'll now turn to the lithium slide on 71. The Covalent lithium project continues to progress well. At Mt Holland, spodumene concentrate production will meet nameplate capacity for FY '26, a strong outcome, reflecting the focus on reliability, rate and recovery at the mine site. At the Kwinana refinery, we achieved first lithium hydroxide production during the year, which is a major milestone for our project. Product quality has been consistently high on the chemical specification basis with low defect rates. The customer qualification process is underway, although it has progressed more slowly than planned due to the instability in the refinery ramp-up driven by the odor-related issues. Engineering solutions are now being implemented with construction of new emission stacks underway in Kwinana, and those are expected to be operational in the first few months of FY '27. This is expected to support a more stable ramp-up profile through FY '27 with nameplate hydroxide production targeted in the second half of calendar year 2027. With respect to the lithium market, conditions have evolved considerably since last year's Strategy Day. Market balances tightened during FY '26 and spot prices have increased sharply due to the strong demand from energy stationary storage and supply disruptions across the industry. Spodumene concentrate production at Mt Holland is expected to maintain nameplate capacity into FY '27. WesCEF's share of around 190,000 tonnes is anticipated to be broadly split between feedstock for the refinery and product available for the spot market. As with the FY '26 sales, we've continued to progressively forward sell into the market, the spodumene concentrate volumes for FY '27. In addition, we reached agreement in April 2026 to sell some of the gold mining tenements at Mt Holland acquired with the Kidman acquisition, taking advantage of strong gold prices. These tenements were part of the original acquisition, and we retain access to additional gold resources. We'll continue to look at how to best realize value for those gold assets over time. Also, as you may have seen, Stuart McNaughton will join Covalent Lithium as its new CEO on 1 July 2026. Stuart is a highly experienced mining and downstream processing executive with 3 decades of experience across global resources operations and new development projects. I look forward to working closely with him, and I'm sure he's going to make a significant contribution to the business. His appointment follows the announcement that the current CEO, Ross Martelli, has decided to retire. I wanted to acknowledge here and thank him for his outstanding contribution to the WesCEF business over the last 45 years. Ross has been instrumental in the growth of Covalent and WesCEF more broadly and will continue to provide expertise through an ongoing advisory role. I'll now turn to the next slide, 72. The expansion project for Mt Holland is well progressed with a decision expected in the first half of FY '27. The project represents a value-accretive pathway to double the production capacity and further strengthen Mt Holland's cost position as a Tier 1 asset. The proposed expansion would double the nameplate production to around 760,000 tonnes per annum of spodumene concentrate with WesCEF's 50% share at around 380,000 tonnes. At the same time, we're also assessing the inclusion of an ore sorter to improve the recovery from the Mt Holland asset. First product for the expansion project is targeted for calendar year 2030. The scale efficiencies and design improvements will lower our unit costs and better position Mt Holland on the global cost curve. Any decision to proceed with this decision will obviously be subject to our final Board approvals and our JV partner, SQM. I'll now turn to Slide 73. We believe our focus at WesCEF on operational excellence and our customers is a core enabler of the earnings resilience for our business across the cycle. This slide highlights our track record in ammonium nitrate, or AN, as an example of this approach. Production levels have consistently improved over time, supported by successive debottlenecking programs that lift output beyond the original nameplate capacity in a capital-efficient way. As the chart on the right shows, our plants have maintained average availability above 90% for more than a decade. This is a level we believe is industry-leading based on our benchmarking. Operational excellence at WesCEF is a continuous process, not a destination for us. As part of this, we see increasing use of AI as the next wave of opportunity that will offer new avenues to maximize production and improve the yield from these plants. I'll now move to our major project slide. WesCEF has delivered on 2 major capacity expansion projects in FY '26 that have been in development for several years. We're now entering the harvesting phase where we can begin to realize the benefits of these investments with earnings expected to grow as these expansions mature. Firstly, starting with the NAAN debottlenecking project. We completed debottlenecking on the NAAN3 plant in the first half of FY '26. This increased ammonium nitrate capacity by approximately 40,000 tonnes to a total of 865,000 tonnes per annum. There is also potential to increase capacity by a further 80,000 tonnes across the 2 remaining NAAN plants at the Kwinana site. It's another highlight of WesCEF's ability to maximize value from existing assets through targeted low capital investment. Tertiary abatement catalysts were also installed at the same time as the NAAN3 shutdown as part of that debottlenecking project, significantly reducing the emissions intensity of our production. It's a great outcome for our decarbonization journey, but at the same time, delivering strong commercial benefits by reducing the potential future liability under the safeguard mechanism. The second project to call out is the sodium cyanide expansion, which again is a strong example of how we unlock additional value from our existing plants, delivering meaningful earnings growth and improved ROC through this targeted capital-efficient investment. With this expansion, the sodium cyanide will become one of the largest globally. It's a significant achievement when you consider back in 1988, the plant had a capacity of only 15,000 tonnes. I'm going to show a video. I'll show you the progress on the project. [Presentation]

As we move forward to completion in around November, we're excited about the role the cyanide project is going to play in enhancing our reliability for our gold customers and continuing to create long-term value for the WesCEF business. Plant expansions and project delivery are a powerful and repeatable capability for our team and to deliver growth. We've got half a dozen or so other key project opportunities like this currently on our agenda, and you should get a sense for the longer-term growth potential we see for WesCEF. I'll now turn to Slide 76. As I mentioned at the start of the presentation, the conflict in the Middle East has had a significant impact on key commodity pricing for WesCEF and on the international supply chains for our fertilizer team. I'll start with ammonia. We've seen prices increase sharply in the last few months, and this is expected to have a significant impact on earnings in FY '26 and FY '27. As we've noted before, our import costs reflect spot pricing, while sales contracts are based on the average pricing in the prior quarter. In the current context, the significant rise in the ammonia price will negatively impact earnings in the fourth quarter of FY '26 with the contract lag mechanism providing a benefit to earnings in FY '27. More broadly, however, given WesCEF is a manufacturer of around half of the ammonia it uses, higher ammonia prices will flow through to higher earnings for the business. Turning to the CSBP Fertilisers. The Middle East conflict in March and April disrupted a number of international shipments with delays and cancellations impacting supply. In response, the CSBP Ferts team increased domestic production of liquid fertilizer in partnership with our chemicals business. Combining that with alternative international supply, this has helped maintain availability for WA farmers. CSBP also worked closely with industry participants and the federal government to support the establishment of the fertilizer import facility mechanism through Export Finance Australia or EFA. And I'll turn to my last slide now. In closing, WesCEF's unique asset base and capacity to invest at attractive returns gives us confidence that we can deliver continued growth and resilience in earnings over time. We remain confident in the Covalent lithium project supported by a nameplate performance at Mt Holland and the robust long-term demand outlook for lithium. The ramp-up of the refinery, together with the initial -- sorry, the final investment decision on the concentrator expansion is expected to drive value and improve our cost position over the medium term. The expansion of the sodium cyanide business will begin to deliver benefits in FY '27 with a full year contribution in FY '28. And then the NAAN expansion will help support a tighter AN market with further benefits in the recontracting cycle. These growth projects build on a long history of successful expansions at WesCEF, and we remain confident in both the pipeline of opportunities ahead and our capability to deliver them. Thank you very much, and I'll now hand over to Emily Amos for Wesfarmers Health.

Well, good afternoon, everyone. At Wesfarmers Health, we have a clear mission that drives our team every day to make Australians health, beauty and wellness experiences simpler, more affordable and easier to access. The health, beauty and wellness markets are large, growing and underpinned by strong fundamentals. In Australia, we have an aging population with increasing chronic disease and consumers who are becoming more health conscious. There's growing demand for consumer-led health and beauty and customers engaging more with their health across digital platforms and devices. As a consumer health and beauty business, supported by a unique portfolio of physical and digital assets, we're well placed to deliver real value to our customers and to leverage growth opportunities across the business. Our multiyear journey to transform and grow is well progressed. We have 3 priorities: the first is growing share and scale in consumer, where Priceline Pharmacy has a unique position and our new formats are broadening our market opportunity. The second is investing in and leveraging our unique loyalty, data and digital assets to grow engagement and drive omnichannel revenue. And the third is improving wholesale performance and operating efficiency. While there is more to do, we have great momentum and the benefits of our hard work are showing through. We see significant opportunity to grow earnings and returns over the coming years. In retail, we've continued to invest in our value proposition, and we are growing Priceline stores while also building out differentiated formats to support broader network growth. Investments in e-commerce and deeper engagement with loyalty members are driving strong omnichannel growth. Our MediAesthetics business has been transformed and is now positioned for further growth. And in wholesale, a focus on service, availability and pricing is delivering profitable growth. And while we're making good progress on reducing cost to serve through our investments in automation. Priceline is a full-service community pharmacy with a strong retail offer that is clearly differentiated. We have Australia's largest health and beauty loyalty program, a curated range of great brands, and we're well known for terrific service and our market-leading women's health proposition. Our stores are a destination for health, beauty and wellness, so our customers can come to us for a trusted advice for everything from medicine to mascara. We have multiple growth drivers across the Priceline business. Customers are responding well to our clearer price positioning and breadth of offer with the expansion and investment in key value lines and growth in private label alongside our range of exclusive brands such as Booth and SWIISH. We continue to attract high-quality franchise partners wanting to open new stores or invest in refurbishments to grow our network. This year, we're on track to open 24 new Priceline stores and complete 23 refurbishments. Priceline is also well positioned for the scope of practice expansion and growth of health services. Customers are responding really well to our Anything Menopause campaign, which is bringing together accessible advice and a curated product range. And we're also going to continue to invest to support the growth in online retail, which has grown over 40% in the last year. We've made investments in our website and our new app and improved last mile options with a better click and collect experience and an on-demand delivery partnership with Uber. New stores and refurbishments are also crucial to our network growth and have helped reinforce our position as a destination for health and beauty. We're seeing strong results in both new and refurbished stores, especially for those that are in pockets of significant population growth. And our new layouts and consulting rooms enable franchisees to deliver on an expanded health services offer. And while Priceline is our core offer to franchise partners, our new propositions such as Pharmacy 4 Less and InstantScripts Pharmacy gives them more options to grow in locations where discount-led or small format stores are a benefit. One of the clear differentiators in our Consumer Health business is our unique combination of physical, digital, data and loyalty assets. We now have over 10 million loyalty members. And this year, we will expand the program into a health and wellness coalition. We'll relaunch the program as Pulse Rewards with an enhanced value proposition so customers can earn points and get rewarded across Priceline and our other brands such as Atomica, Silk Laser Clinics, InstantScripts and our SiSU Health stations. And we're also making good progress commercializing retail media. We now have more than 150 suppliers on board and new digital assets coming online. Our retail media assets provide a great opportunity to showcase our merchandising offer and highlight important health trends like menopause and weight loss. Atomica is an aspirational and affordable beauty business that provides us with a growth opportunity in the attractive and growing beauty, wellness and skin care market. The format is resonating with customers who are responding really well to our service-led proposition with an average NPS above 90. We are now opening a further 7 stores, taking the learnings from our first cohort of trial stores. And next month, our e-commerce website goes live and further integration with the new loyalty program will follow shortly after that. Private label and own brands are a significant area of opportunity across the business. Over recent years, we've invested in building our capability across brand and product development, sourcing and merchandise, and customers are responding really well. We've seen growth this year of more than 20% and much more upside to come. In Priceline, we're growing our range in categories that resonate with customers, including FRAIM hair care, which provides salon grade products without the big price tag and iLLi, which offers a broad range of essential beauty and grooming products at great prices that our customers really love. AestheticsRX is our premium cosmeceutical brand available in retail, aesthetics clinics online. It's been a huge success and is one of the fastest-growing skin care brands in the market. Our team is continuing to focus on building and refining the health journeys that help customers live better lives. The priority right now is on building connected services in those areas with growing needs such as menopause and weight loss. So for example, our assets when connected play an important role for weight loss customers, all the way from discovery, consultation, pharmacy fulfillment and ongoing care. We're supporting their holistic health needs right across our businesses from dedicated consults with an InstantScripts doctor, all the way to advice on skin care and supplements when they pick up a script at Priceline. And our new app will also help to connect and integrate these journeys with the ability for customers to book health services, have a telehealth consult, manage their scripts, shop for the right products and earn rewards all in one place. And in wholesale, we're continuing to improve the customer proposition through competitive pricing and great service. We see more opportunity to continue to reduce our cost to serve through the investments in automation in our DCs and in technology that will improve order management, service reliability and productivity. Our upcoming core systems investment, combined with the productivity opportunities AI offers will enable us to continue to reduce our cost to serve while making ourselves easier to do business with for our customers, our suppliers and our team members. At InstantScripts, we have a proven telehealth offer underpinned by strong clinical governance. And across MediAesthetics, the hard work over the last couple of years has seen the business grow and gain share in key markets. The relationships we have with clinicians, underpinned by the shared ownership model is helping us retain great people and support network growth. Customers are responding well to the brand revitalization, sharp promotional offers, the rollouts of new treatment and a great merchandising offer that includes AestheticsRX. So in summary, over the last 4 years, we've made significant progress on the transformation. We are excited to keep the momentum going and are focusing the business on delivering a great offer that resonates with customers and franchisees, driving operational leverage throughout our business and continuing to put in place strong foundations that will unlock further growth in digital, loyalty and private label. So in short, we see a significant opportunity to continue to grow earnings and returns. Thank you. And I'd now like to invite Aaron up, so we'll be happy to answer any questions.

Just on the WesCEF side, just be interested in the exposure you have to spodumene prices in FY '27. You talked about 60,000 tonnes contracted of the half of the 190,000. So it's about 2/3 look like they're contracted. I'm assuming that's been progressively through the period. So I'd just be interested in sort of how we should be thinking about spodumene versus what you guys might realize in '27, please?

Yes. I'll just -- I'll start with the first 60,000 that's being contracted forward. That's been done over a number of months over the -- in the second half as prices have been rising. They're obviously -- they've now sort of seem to have come off that trend. I'd say, on average, that 60,000 will go across a couple of shipments, but it will broadly be better than today's spot price, but not nowhere near the peak. So it will be somewhere in that range for if that helps. Out of the 190,000 tonnes that for our share next year, we're assuming at this stage that it's broadly half the spodumene spot sales, half to feed the refinery. The refinery piece, it's obviously as we come out of sorting out with this new engineering solution for the emissions, we'll have a better sense in the coming months on how that ramp-up profile and how quickly we're going to be able to feed it. So there is going to have to be some flex on that. The good news is if we do have to sell more spodumene, we're obviously making good money. And at today's pricing in that environment, there won't be an issue in trying to move that into the market.

Right. And just a follow-up to that is, if that -- half of that spodumene is going to feedstock, how should we think -- and there's ongoing -- if there's any ongoing issues on the refining side, could that get pushed out maybe into '28? Or could we see a bit of a hole there where you're not actually realizing much in terms of sales?

I think we'll always be in the market. If we've got the product, there's only limited storage, you want to continually be in the market selling. We're not going to be, I think, prolonging the stockpiles of spodumene for the refinery because we've got confidence in the Mt Holland mine and concentrator that that's now at a stable footing. So as soon as the refinery is ready to receive it, we know we've got the confidence we're going to be able to deliver into that.

Aaron Tom from Barrenjoey. A couple more. Can you help us understand the cap and collar arrangements on hydroxide? It's obviously like really hard to forecast, but the cap and collar kind of smooth things out a bit. Can you maybe just...

I obviously can't go into the specifics of individual contracts. But I would say, and I think I've said in this forum before, we do have a floor price mechanism for our hydroxide agreements. They are becoming pretty common in the industry, both for chemical, but you're starting to see more and more of the pure spodumene producers also receiving floor price protection. They were structured. They were above our cost base of production. So it provided a baseload level of return for the project. It's not something -- if it was down at those levels, we wouldn't be meeting our aspirations for the project. On the upside, I think I've said before, they're set at levels that if we're starting to hit those levels, we would be very happy across Wesfarmers on how the lithium asset is performing. So I think that will be a very good problem to happen if that occurred in the market.

And do you have a good idea of what the cost per tonne of the refinery will be like when it's at maturity? Or are you still kind of figuring that out with obviously the ramp-up that's going to happen?

Look, I mean, ultimately, time will tell where that's going to land. I think we're very confident in the cost stack of what goes into the refinery, labor, reagents. Obviously, one of the biggest cost inputs and why we're so proud of what's being achieved at the mine is obviously a feedstock cost of spodumene and not having to ship that to China. So I think for us, the real focus at the moment will be getting the yield or the recovery. So the number of spodumene units required to deliver a hydroxide unit is probably the #1 yield focus for the plant. The second biggest impact on the cost base will be fractionalizing the cost of getting our tonnages up. And I think that's what you're really seeing the challenges with other players that are in the Australian refining market is you've got to get the tonnage to be competitive.

Caleb from Macquarie here again. Just had a question for Emily on retail media in the health business. How are you sort of thinking about the scope for additional growth to come from here? And particularly with respect to the franchise model from a pharmacy point of view, what's the sort of outlook for investment versus returns versus reinvestment just alongside Wesfarmers compared to your franchise partners?

Yes. Look, I think this has been our first year where we're bringing together all the assets. So in franchise company stores and right across all our digital assets, we've got screens in our stores and really connecting our digital assets. I think the changes that we'll make with our loyalty program really kind of give us a lot more traction with suppliers. So we've been pleased with the responses so far. But we do see that it will continue to grow. I mean, I think for us, we already work with suppliers on a range of things that they do to support us and our franchise partners, and this will just be another element in the toolkit. So feeling really positive. But like anything, it will take time to build, but we're trying to bring all the assets together so that we're really leveraging the opportunity to its full capacity.

And on the return side, to the extent that you are getting returns at the moment, how are these shared between.

Yes. So look, that is a shared model that will morph and evolve over time. So I'm not going to go into the exact split here, but yes. We're very happy with how it's going so far.

Shaun Cousins, UBS. Just a question for Aaron. Maybe just to discuss the chemicals and the access to ammonia in the fourth quarter. I'm just curious how you went about getting ammonia given Yara was offline for a period of time. Did you have to pay the international spot? Or was there a risk you actually had to pay more than the international spot? I'm interested around how you actually -- there's a fourth quarter '26 headwind that you identified, but in the event you had to pay more, you might not be able to recover that. So just around how you handle the ammonia access issues.

Yes. So our agreement with Yara obviously, their key source of supply is from the Burrup plant, but Yara is a large ammonia producer with a number of facilities worldwide. And they're a large -- they own their own shipping fleet, large trading participant in the ammonia business. So I think for the first part of that crisis, we relied heavily on their international network to be able to continue to provide supply, and we have that under our contract framework. So I would assume for the purpose of modeling that basically we pay the international import parity price for our business. We also managed to shift our shutdown so that we could continue to produce or maximize the ammonia production from our own facilities for that period of time as well to navigate that.

And a few years ago, ammonia expansion was a growth project. Can you talk a bit about where that's at and if that was an issue with gas content, gas -- the Dampier Bunbury pipeline or if it was the price of gas or if there were EPA issues, just that when you took us to Kwinana some years ago, that was one of the key sort of projects, and you're very good at delivering that, but you're a little silent on that in this presentation.

Yes, certainly no issues with -- I think you mentioned gas content and those -- and Dampier Bunbury pipeline, no issues around that. It's really -- it's still a live project within assessment. We've actually received the EPA approval. So no concerns around ultimately building the facility in Kwinana. It's really the commercial kind of vectors of like a long-term stable WA gas price that you can assume. I think building large capital items in Kwinana, we're pretty attuned to the escalation costs that we've seen across the strip at the moment. And then the other, I think, difficult to forecast is sort of where government policy is going to land on -- across carbon and how Australia fits in with international carbon pricing and regulations because ultimately, that's -- we have to be competitive on those fronts as well.

Craig Woolford from MST Marquee. Just coming through on the lithium side. With the expansion, just trying to get a sense of how significant the reduction in average cost per tonne could be with that expansion, maybe a sense of what a fixed and variable in that part of the business and the push to expand the lithium mine.

Yes. I think you should have a look at some of the other companies that have kind of gone before us, and you can really get a sense of the scale benefits when you look at some of the large producers up in the Pilbara, both Wodgina and PLS, obviously, larger operations and how they've fractionalized the fixed costs in mining. We've always positioned Mt Holland. I've said at this forum before that it's kind of at the upper end of the second quartile cost position. The good news is, I think post expansion, Mt Holland will return back to being kind of well inside the second quartile for hard rock producers.

Got it. And Emily, just on the wholesaling component of health, there's an intimation that there's a cost benefit that will help margins or return on investment for that part of the business, but also how much is going to be required in terms of revenue growth in wholesale to ensure that it delivers a satisfactory return?

I think the investments that we've been making in our warehouse over -- our warehouses and automation over the last couple of years are really paying dividends. So we have started to see this year the cost per unit start to decline. So we're feeling more confident that we'll be able to manage the profile, the cost profile. I think in terms of total revenue, we are, I think, high single digits. I mean a lot of the wholesale revenue is determined because the prices are fixed by drug prices. So we need to maintain, I would say, consistent revenue growth. The challenge for us is, obviously, we're on an earnings uplift journey. So the real trick is really the fractionalizing our costs. We've got our next warehouse opening in Adelaide in October and Perth next year. So that journey, it's good to see the performance that we're getting out of the new ones, but that journey will play out over the next couple of years.

It's Michael Simotas from Jefferies. One for you, Emily, if I can. You spoke a little bit about being able to attract franchise partners into Priceline on the back of the economics. Is there anything you can give us in terms of some sort of detail on how much you've managed to improve the 4-wall economics of Priceline? And I'd be interested as well in the difference between the franchise Priceline pharmacy boxes versus the corporate Priceline stores and what the future of those corporate Priceline stores is in the business?

Sure. There's a few things in that. So Priceline is a strong brand and it's growing. So if you look at the results that we're getting just in the pharmacy channel at the half, we were achieving 14.5% growth. And the Priceline format really wins when we're leveraging both our health expertise and our differentiated front of store. The work that we've done over the last couple of years on value and transforming that front of store offer, whether it's investment in price, new and exclusive ranges, the expansion of loyalty program is really driving fantastic foot traffic to that part of the business and customers are noticing and franchise partners are noticing. But it's our ability to really lean into over the last year, the health component because what matters to a franchise partner is they're trained to be health care professionals, and they really like that complementarity that comes with being a full-service community pharmacy. So we -- this year, we did a huge campaign we called it Anything Menopause where we've trained all of our health professionals as well as our front of store in this really complementary program where customers are kind of coming in, talking to pharmacists and then also able to access front of store. Those initiatives have been really well recognized by our franchise partners and are really the reasons that people are both investing in current refurbs and wanting to come to us. So we feel really confident that franchise partners are seeing the returns. We've also increased and in exchange for them coming with the journey on things like investment in price, we're also sort of increasing the rebates to them. So it takes a little while, but you start to see that sort of self-fulfilling circle. All of our Priceline corporate stores are profitable. Over the last 2 years, we've trimmed the network. We've made them really perform well. They're getting great e-commerce growth. So the offer is working in those stores as well. We -- Atomica is our sort of, I suppose, new beauty pilot stores. But as I said, we're really pleased with how they're going. We're very happy for our corporate stores to continue to do what they'll do. We'll put new stores down where they make sense basically.

And can I just ask a quick follow-up for Aaron. I just want to make sure I understand the dynamic given the number of moving parts in the WesCEF business. So we can push aside the expansion projects and the earnings that they'll add. But in terms of the dynamic that the Middle Eastern conflict has caused around fertilizer shortage having to self-manufacture more fertilizer as well as ammonia price. So that's clearly a headwind for FY '26, and you've called that out. Does that then become a tailwind for the business on an aggregate basis once you add up all of those factors in '27?

Yes. I think as per my slide, it's pretty clear for the biggest impact out of those is the ammonia price curve. That's why we called that out. With respect to fertilizer, I'd say it basically has brought it back to being more of an average season for ferts. We were set up for a really strong season in Western Australia because of the strength in July and August last year. Basically, there was demand destruction and there's going to be impacts for import prices, et cetera, for this current season. But coming through to FY '27, I can't call a fertilizer season this early for next year, but one thing that is clear is a stronger ammonia price is good for WesCEF as a manufacturer. And then we also get the benefit of that quarterly lag mechanism.

Ben from Jarden. One for Emily. Just interested in the Pulse, the new loyalty program. And I'm just interested in when you look forward 5, 10, 15, 20 years, what do you see the health business being? Do you see it being this broader ecosystem we could look at an amalgamation of United Discovery, whatever offshore? I'm just trying to understand what next. Do you need an insurance platform? Do you need to go into GP centers? Presumably, hospitals will be something you wouldn't look as too capital intensive. This feels like a big opportunity, but there's still a few missing pieces of the puzzle. And when do you have the confidence to plug those pieces in, I suppose the question?

I might just answer those separately, if that's right. So on loyalty, -- as I said in my earlier remarks, we've got 10 million people in Sister Club. It's been an important platform for the Priceline brand and has actually really helped drive engagement with customers and franchise partners because we've been investing in it. So for example, since we bought the business, we've seen scan rates go from about mid-40s to 60% because we're attaching more and more value to the program, whether it's through promotions, sort of our goody bags. And so we just saw this opportunity across our health business to really turn it -- take it to the next level and turn it into a health and beauty and wellness coalition. So really giving our members and customers just more ways to earn. We've obviously changed the name based on a whole lot of research and lots of feedback, which probably won't surprise a lot of people in this room, but we had a lot of feedback that it was a little bit gendered. And actually, when you go to my earlier remarks, we're a full-service community pharmacy. I'm sure that if I came and spoke to half of you in this room, you could tell me all your latest health statistics. So we want to be able to serve all customers. We're incredibly proud of our Pink heritage and the fact that we really are playing a significant role in women's health, but we need to service everyone. And so changing the name really allows us to lean into that sort of coalition. So hopefully, that's quite logical. In terms of what's next, I mean, I think I'll come back to something that Rob said earlier. I mean, we've got opportunities in the business. So what is my job today is to really grow earnings and returns in the business that we've got. We've got lots of opportunities to expand our addressable market, some of which I outlined right across our businesses today. We'll continue to look at other opportunities in health. Some of them will make sense. Our focus would be on things that are incremental or would enhance one of the existing businesses today. But really, it will depend on the opportunity, how much they cost and be subject to any returns, normal returns metrics.

So do you see yourself as a health retailer, first and foremost, it happens to have a bunch of services around it that helps enhance that? Or do you see yourself longer term as a broader health ecosystem, appreciating the ecosystem.

Yes. Look, I think we are a health and beauty business today. We've got elements of some platform investments through our digital health businesses that will allow us to play more into the health ecosystem, but we're not in necessarily any hurry to bring those to life. So I don't think we need to be so definitive. It's really about seizing the growth opportunities we've got today, continue to improve earnings and returns and taking the opportunities as they present themselves in the future.

Sorry, last one on those. In terms of the willingness of the Board to provide capital into health business at the moment, is there a willingness? Or are you still bedding everything down with the DTs, et cetera, you're talking to lawyers, et cetera?

I think I'll go back to what Rob said this morning. If we can demonstrate to whatever investment that we provide, whether it's systems investment, investment into digital or certainly our DCs, and they've shown good support around making significant investment in DCs, they've got to generate a return. So we're not -- we're subject to all the same criteria that everybody else is subject to.

It's Peter Marks, Goldman Sachs. Just another one for you, Emily, on Priceline. How are you thinking about the pharmacy category growth from here? Obviously, it's been very strong in recent years. There's some GLP-1 tailwinds. How do you -- I guess when you look forward, do you think that's sustainable? How do you think about inflation in the category and the launch of oral GLP-1s?

Yes, sure. Look, I think we're fairly optimistic about the health category and especially pharmacy overall. And that's driven by a couple of things. I think GLP-1s have been a fantastic tailwind, absolutely. But if I look at Priceline and I look at our script growth, we're outgrowing the market in script growth. And it's not just GLP-1s, it's across all of our drug categories. And why is that? It's because the population is aging and people are taking more preventative medications such as blood pressure medications to really live with chronic conditions. So I think the aging population will be a natural -- another natural tailwind that will support category growth. The growth of things like GLP-1s will continue. And the reason they'll continue to drive strong demand is that they work and they're having really positive health outcomes for the people who are taking them. And that gives us an opportunity to really play into the fact that we're this full-service community pharmacy. So if you're on a GLP-1, your pharmacists can come and talk to you about you should be taking other vitamins or supplements. So I think investment, whether it's drug investment, health investment and the aging population will drag the whole category forward and being able to complement that with up-to-date ranges and really relevant offers in the front of store means that I think kind of a good category from that perspective. And it's also relatively a bit resilient at times where cost of living pressures, things like medicines have actually become cheaper. So we've talked a lot about inflationary pressures. Actually, pharmacy is the one category where prices have come down, which is obviously supported by the government.

Just a follow up on that one. How are you thinking about inflation? Or are you seeing, I guess, in the front of store?

Look, I think very consistent with what everyone else has said. We're fundamentally a very affordable and value-focused sort of front-of-store offer. We want to make sure that we keep our prices as competitive as possible because that's really important to customers. But I think in the core retail part, it's very similar to what you heard here today.

Scott Ryall from Rimor. I just want to follow up on your comment on demand destruction on the fertilizer side. And I just get a little bit more color around whether the agricultural customers that you're talking to, is it priced now? Is it priced through the season? Is it a risk around availability? Do you see risk around availability of product itself over the next 6 months? And if I was to tell you that the Middle East situation finishes now, how long is it until all these things are flushed through the system, please?

That would be great news for the world if it wasn't to finish now. Just I think you got to probably put your mind back to late February, early March, which is a critical time. I'll just focus on WA agriculture because I don't really -- we don't sell into the East Coast. But that's obviously a critical time for growers to be choosing how they're going to lay out their farming program, what crops they're going to actually target for that year and their fertilizer program. And it was right at that moment that obviously, the crunch hit. On top of that, they're also facing certainly in WA, we were really worried about diesel supply in our mining business, but also for our agricultural customers being able to commit to diesel to actually come and pick up fertilizer product, let alone what they were going to do for harvest time later on in the year. So there was definitely, we think, a maybe 5% to 15% kind of reduction, whether it was the type of crops planted or what was actually whether paddocks were left fallow for the year, there was a component that we think of demand that will be gone for FY '26. In terms of availability and your question there, actually feel pretty good about that. The combination of us as the largest player in Western Australia, what we did with our manufacturing footprint, being able to pivot to alternate product supply, then working with the government and EFA on this facility, there isn't a shortage of urea at the moment. It's available. Prices are coming back down, both for import, but also what we're then able to pass on to growers in the market.

Okay. Great. And so I guess in terms of if the Middle East situation continues, you're comfortable now that you've been able to put out the fires and keep supply moving subject to some.

Look, I think you can't take that volume of fertilizer or close off that area of the world and think it's not going to have an impact in the long term if that was to sustain because it's a material producer of nitrogen into the market. But at least in the short term, Australia and Australia's capacity to pay and what's economic for our farms because they are well placed on a global supply chain, we've been able to secure availability and make it work for everyone.

Okay. Well, thank you, Emily and Aaron. Thanks, everyone, for joining us here today in Sydney. That brings us to the end of the session. I hope you found it -- the day informative. Any questions that you may have in the room or online, please feel free to reach out to Michelle and the Investor Relations team. And we do actually have lunch now available for those that want to stay here. And our leadership team will be here for a bit longer. So look forward to answering any further questions you may have over lunch. But thanks again for joining us, and speak soon.