Brambles Aktie

Good morning, everyone, and thank you for joining our presentation of Brambles' first half results for the 2026 financial year. Today, I'll be sharing the highlights of the first half a detailed look at the operating environment as well as our progress against our strategic priorities.

I'll then outline our revised outlook for FY '26 before handing over to Joaquin to take you through the financials in more detail.

Let's start with our first half performance highlights. Our first half result reflects the resilience we've built into the business and our disciplined execution on factors we can control to drive efficiencies across our operations and improve the customer experience. We achieved sales revenue growth of 2%, with strong net new business growth offsetting consumer demand pressures on like-for-like volumes and pricing recovering cost to serve increases.

Underlying profit was up 7%, reflecting meaningful operating leverage driven by supply chain and overhead productivity improvements, together with disciplined cost management across the business. Higher earnings and sustained improvements in asset efficiency delivered robust free cash flow before dividends of USD 482 million.

As a result of this strong cash flow generation, we are pleased to declare an interim dividend of USD 0.23 per share up 21% on the prior corresponding period. Our strong financial performance has enabled strategic reinvestments to strengthen our customer and investor value propositions over the long term. Chief among them are enhancements to the customer experience, encompassing platform quality, service reliability and responsiveness.

These improvements continue to position us as the partner of choice for existing customers while supporting considerable new business momentum in all regions. Customers are also benefiting from our ongoing focus on collaboration to drive efficiencies across their supply chains alongside productivity improvements in our own operations. Together, these initiatives are making our business more agile and ensure we deliver strong value for customers relative to alternative solutions.

The FY '26 on-market share buyback is on track for USD 400 million by the end of June 2026, with USD 191 million of shares purchased during the first half of the year. Finally, we are proud of our ambitious 2030 sustainability program launched in September last year. The program guides the next phase of our regenerative ambition, building on our success to date while extending our focus on nature and deepening our net positive impact across the value chain.

Let's turn now to the key operating dynamics and their impact on our business in the first half. Our operating environment was characterized by moderating rates of inflation and challenging consumer demand conditions across key markets. Inflationary pressures were modest and primarily driven by labor and transport, while fuel prices remain stable. Lumber prices were varied across regions, while the average capital cost of a pallet for the group, excluding mix, was broadly aligned with the first half of FY '25.

Against this backdrop, our price realization reflected modest increases in the cost to serve with inflationary pressures tempered by the efficiencies and benefits we generated across customer supply chains and our own operations in the period. This included benefits from the overhead restructuring program we announced last year, which positioned us well to manage the impact of the demand headwinds we experienced in the half.

Consumer demand remained weak, particularly in the U.S. and Europe due to ongoing cost of living pressures and increasing labor market uncertainty with the U.S. further affected by a prolonged government shutdown. As a result, pallet volumes with existing customers declined across both markets in the first half.

We also saw lower like-for-like volumes in Australia as retailers and manufacturers reduced inventory levels in response to normalizing consumer demand patterns and stable supply chain dynamics. Importantly, there was no material inventory optimization in other key markets where optimization largely occurred during FY '23 and FY '24.

Despite softer demand from existing customers, our overall volumes were supported by continued success in winning new business, building on the momentum established in the second half of FY '25 and reflecting our sustained investment in sales capabilities and a compelling customer value proposition. As automation becomes more prevalent across supply chains, customers are increasingly recognizing the quality, reliability and efficiency benefits, Brambles and its platforms can offer in navigating complex operating environments.

Broader market dynamics in whitewood, including price increases and challenges to the availability of quality recycled pallets in the U.S. during the first quarter also supported new business conversions in the period. From a cost perspective, we continue to see increased costs driven by excess pallets in the U.S. and inventory optimization in Australia. These included incremental transport costs in both markets. while the U.S. continued to incur storage costs and additional repair activity due to ongoing increases in pallet damage rates.

Finally, we ended the period with approximately 4 million excess pallets in the U.S. in line with levels at the end of FY '25 as softer consumer demand conditions and pallet inflows from Latin America, meant surplus plant stock was not absorbed as quickly as anticipated for the half. However, we still expect to return to optimal plant stock levels by the end of the first half of FY '27.

Turning to our Brambles of the Future strategy and the progress made in the half. Delivering an effortless customer experience remains a core pillar of this strategy. And we are pleased with the ongoing improvements across key customer metrics, including reducing the time for complaint resolution and improving our performance in both the delivery and collection of pallets. This contributed to a 9-point gain in our Net Promoter Score against the first half of FY '25, which has also been supported by our ongoing investment in pallet quality to help meet the evolving requirements across customer and retailer supply chains.

Initiatives, including incremental repairs, enhanced quality checks and audits and automated end-of-line inspections are all helping to ensure quality remains a core part of our customer value proposition. We continue to make steady progress in digital and data to build solutions that ultimately drive efficiency in connection by illuminating supply networks to solve supply chain problems.

Our portfolio of digital customer solutions, including proof of delivery, reusable asset optimization and end-to-end fresh continues to gain momentum as we scale pilot programs and engage additional customers during the first half of FY '26. We now have engagements with a wide range of retailers, manufacturers and fresh producers, spanning 9 countries, including the key markets of the U.S., the U.K., Spain and Australia.

Within our own operations, our focus is on building a leaner, more agile circular model that can set new standards in safety, efficiency and resilience and to do that at scale. This starts with safety, where we delivered meaningful improvement against key measures.

Our sustained commitment to a safety-first culture has translated to a lost time injury frequency rate improvement of 38% against the prior corresponding period. At the same time, our supply chain initiatives ranging from procurement transport and plant network optimization and operational excellence have supported an 80 basis point margin improvement.

We have also steadily progressed our plant of the future program, which includes our long-term ambition to develop touchless repair capabilities and identify opportunities for the integration of modular technology across our service center network.

Finally, we are progressing our regenerative ambition to build supply networks that deliver positive outcomes for the environment, communities and economies. We recognize that in applying regenerative principles to meaningful areas across our operations, we are working at the forefront of sustainability strategies. As a result, our early focus has been on developing a road map with stakeholders throughout the business and in collaboration with leading nongovernment organizations to deliver our 2030 targets. This includes leading-edge metrics and measurement systems that help drive and track our net positive impacts while ensuring we maintain credibility and the confidence of all stakeholders.

Among early achievements of our 2030 program has been the continued steady progress in decarbonization with a 5% reduction in our Scope 1 and 2 emissions while we lowered Scope 3 emissions by 1%. Our leadership in sustainability continues to be recognized externally. We are proud to have retained CDP's maximum A-List rating for both climate change and forest while also achieving global top employer certification for the fourth consecutive year.

Turning now to an update on our serialization Plus program, which has the potential to deliver significant incremental value across all pillars of our strategy. In Chile, our pilot market for serialization plus the focus remains on delivering value to our customers through the end-to-end visibility of supply chains enabled by our pallets. In the first instance, this is about offering a new effortless service offer that significantly enhances the customer experience by removing the burden of pallet declarations and audits.

At the end of the first half, 95% of customers have converted to this effortless service offer. And we remain on track to convert the remaining customers to this model by the end of FY '26. At the same time, we continue to systematically explore additional sources of value, serialization+ can unlock for customers and our business, which I'll address in more detail on the next slide.

Operational testing continued in North America and the U.K. as we seek to optimize the key cost and operational factors that are critical considerations for any future decision to roll out serialization+ in these markets. In North America, we continue to build the base read infrastructure across our service center network that underpins the serialization+ operating model.

During the half, we instrumented an additional 10 service centers and remain on track to have read infrastructure in place to cover 2/3 of planned flows by the end of FY '26. We also took meaningful strides in reducing the cost of tags in the period. After training 48 different tag types in the half, we reduced tag costs by over 20%, with exploration of further optimization opportunities underway.

In the U.K., we continue to explore the feasibility of lower-cost tracking devices. Performance to date has been encouraging, particularly in how these lower-cost devices complement the autonomous tracking devices already deployed. Together, these technologies are expected to capture data and insights in a more cost-effective manner.

Turning to Mexico. We are scaling our continuous diagnostics program by deploying our autonomous tracking devices with full functionality. While the primary benefits from continuous diagnostics is improved asset control and network visibility, we have also been encouraged by our early success in our end-to-end fresh subscription offering.

Finally, we are leveraging our smart asset base in North America and Europe to enable new customer propositions. We are encouraged by the positive feedback received to date and look forward to further developing this offering to enhance the customer experience by reducing the administrative burden as well as expanding the lanes we can potentially service.

Turning to the value insights from Chile this half. We continue to refine our understanding of value across the serialization plus scorecard outlined in August, which is guiding our efforts to prove out the value potential of serialization+.

From a customer experience perspective, as we have converted our customers to the effortless service offer, we have seen the number of transactional queries from customers reduced by 1/3 with the greatest decrease seen in audit-related cases. As one of the major friction points in our traditional pooling model, this result gives us comfort about the improved customer value proposition that serialization+ enables.

On growth, the effortless service offer continues to facilitate new business growth in Chile with 5 new customer conversions and 2 lane expansions in the first half. Particularly pleasing was the fact all 7 customers attributed their decision to choose CHEP to the simplicity and benefits of the effortless service offer.

For pricing, serialization+ continues to identify unauthorized reuse across the supply chain, providing opportunities for us to monetize this in line with the cost to serve. We know that by optimizing the cost to serve, including asset efficiency, we can deliver value for both Brambles and our customers.

To advance this, we have released our first version of our serialization+ app. The app allows us to interrogate damage rates and cycle time in a visual manner, presenting us with the opportunity to partner with our customers to support asset performance in their supply chains. These insights are also being combined with additional data to identify leakage points across the network to improve asset efficiency.

On generating value from supply chain insights, we are looking at our own service network to determine the benefits of being able to identify an individual pallet at additional stages of the integrated repair line, including understanding the additional efficiencies this can create.

Secondly, we are trialing the ability to scan pallets at manufacturer sites to assess opportunities to optimize pallet reuse. We aim to further develop these capabilities in the second half to understand the value potential from these areas and other supply chain insights.

Finally, I would also like to reiterate that any full market rollout is contingent on achieving the previously communicated hurdle of greater than 15% return on capital invested once the market pool is fully serialized.

Let's turn now to our FY '26 outlook before I hand over to Joaquin for the financial overview. Based on our performance in the first half and expectations for the balance of the year we have revised our full year guidance. We have narrowed our expectations for revenue growth to 3% to 4% previously 3% to 5%. And this reflects our view that consumer demand is likely to remain subdued while also recognizing there is uncertainty in how sentiment evolves during the year.

Our guidance for underlying profit growth remains unchanged at 8% to 11%. As the anticipated supply chain and overhead cost efficiencies, we expected at the beginning of the year, accelerate in the second half, delivering operating leverage despite modest volume growth. We have upgraded our guidance for free cash flow before dividends by USD 100 million and now expect free cash flow generation of USD 950 million to USD 1.1 billion for the full year. This reflects reduced pooling capital expenditure in line with volume growth expectations alongside the rephasing of the automation and digital investments.

We expect total dividends for FY '26 to remain in line with Brambles dividend payout policy range of 50% to 70% of underlying profit. Finally, we remain on track to complete the USD 400 million on market share buyback by the end of FY '26, subject to the full range of conditions customary for buybacks.

I'll now hand over to Joaquin to take you through our financial performance in greater detail.

Thanks, Graham, and good morning, everyone. Before getting into the details, I wanted to touch on the key highlights of our first half performance. These were the strong new business momentum across our Power businesses in the Americas, Europe and Asia Pacific as we continue to convert new customers away from the whitewood alternatives.

Our ongoing commercial discipline that recovered cost to serve increases in the period. The continued focus on supply chain and overhead productivity, which delivered strong operating leverage with margins expanding by 1.1 points. and the sustained improvement in the capital intensity of our business, which underpinned the strong free cash flow generation in the first half.

Overall, our results highlight the resilience of our business as we continue to deliver on our investor value proposition despite like-for-like volume softness with total value created for shareholders of approximately 16% and including EPS growth of 13% and a dividend yield of 3%.

Turning now to Slide 12, which provides an overview of our first half results. I will focus on our profit after tax and EPS performance here as I will address revenue and underlying profit in the slides that follow. Profit after tax from continuing operations increased 11%, ahead of the 7% growth in underlying profit as lower net finance costs and a reduction in the hyperinflation charge more than offset the increase in tax expense during the half.

Net finance costs decreased 7% reflecting strong free cash flow generation that reduced the average balance of floating rate borrowings during the period. Despite a 3% increase in tax expense, our underlying effective tax rate decreased by 1 percentage point at actual FX rates, primarily due to the reduced impact of the base erosion and anti-abuse tax in the U.S.

EPS growth from continuing operations increased 13% and included a 2 percentage point benefit from the on-market share buyback undertaken during the 2025 calendar year.

Finally, our continued capital allocation discipline and focus on driving productivity improvements resulted in ROCE increasing 1.1 percentage points to 24.3%.

Moving to Slide 13. Group sales revenue increased 2% in the half, as continued momentum in net new business and ongoing commercial discipline to recover cost to serve increases more than offset the impact of weak consumer demand on like-for-like volumes.

Price realization of 2% was primarily driven by price increases to recover inflation, mainly in labor. As you'll see throughout the presentation, price outcomes varied by region, reflecting local inflation and sharing cost to serve efficiencies and productivity benefits with customers, as Graham outlined earlier.

Net new business growth increased 2% as the strong rate of new business wins achieved in the fourth quarter of FY '25 continued into the first half of FY '26. The Americas and European Pallets businesses delivered net new business growth of 4% and 2%, respectively, across quarter 1 and 2, providing an encouraging platform as we headed into the second half.

Like-for-like volumes declined 2% reflecting the consumer demand and inventory optimization dynamics Graham outlined earlier. Performance across all components of revenue growth was broadly consistent in both quarter 1 and quarter 2. In the second half of '26, like-for-like volumes are expected to benefit from cycling a weaker second half '25 comparative period.

In addition, we expect some improvement in U.S. consumer demand in the remainder of the year, subject to prevailing market conditions.

Turning now to Slide 14. Underlying profit increased by 7%, including approximately $15 million of one-off restructuring costs. Excluding these costs, underlying profit grew by 9% as sales revenue growth and benefits from supply chain and overhead productivity initiatives offset inflationary pressures and increased investments to enhance the customer experience and progress digital initiatives.

Looking at the key drivers of profit growth. Sales revenue growth contributed $72 million to profit, while North American surcharge income increased $5 million, in line with prevailing market indices for lumber, transport and fuel. Plant and transport costs collectively increased $19 million as cost savings of $73 million from procurement transport and plant network optimization initiatives were more than offset by several cost increases across the group.

These included input cost inflation of $53 million and costs associated with higher damage rates in the U.S., driven by increased asset utilization in line with improved asset control in the region. In addition, we also saw higher transport activity in the first half as we optimize pallet balances across North America and average a longer length of haul in Europe.

IPEP increased by $1 million as continued asset control improvements in the Americas were more than offset by higher IPEP expense in Europe in the first half, driven by increased pellet loss rates and a higher first in, first out unit cost of pallets written off. The first half '26 IPEP expense also included a $5 million charge relating to the timing of audits in Europe, with a higher percentage of annual orders conducted in the first half of '26 compared to the first half '25. This is expected to normalize in the second half of the year.

Other costs increased $5 million as cost management initiatives were more than offset by a reduction in asset compensations in Europe due to lower losses in compensated channels and increased scrap pallets in the U.S. due to the impact of higher damage rates. The overhead restructuring program was a net expense of approximately $1 million in the half. As $15 million of costs were largely offset by the realized benefits of $14 million.

Central transformation costs reduced by $8 million, reflecting the receipt of government research and development incentives relating to our digital program and the capitalization of serialization plus equipment in Chile following the successful customer adoption of the ASR.

Turning now to margin performance on Slide 15. At our FY '25 results announcement, we revised our FY '28 margin expansion target to 3 percentage points plus, up from 2 points plus compared to the FY '24 baseline. As shown on this slide, we continue to make good progress towards this goal, delivering 1.1 percentage points of margin improvement half-on-half, and we remain on track to deliver our FY '28 margin improvement target.

Several key drivers contributed to our first half margin performance, which I'll cover now. Supply chain productivity, measured by the group's net plant and transport cost to sales ratio contributed 0.8 percentage points to the improvement in margin. This was driven by cost savings from procurement, enhanced transport productivity and plant network optimization initiatives.

Overheads and other cost productivity contributed 0.3 percentage points to margin improvement, reflecting the ongoing benefits associated with streamlining operations, improving processes, leveraging technology and reducing discretionary spend. Following a strong contribution to margin expansion in FY '25, asset efficiency remained stable this half and did not provide incremental margin benefit. This outcome reflects continued improvements in asset control in the Americas, driven by digital insights and enhanced data analytics, which offset the higher IPEP expense charge in Europe I outlined earlier.

Turning to Slide 16. You can see the impact of asset efficiency improvements in stabilizing the capital intensity of our business, reflected in both the IPEP to sales ratio and the group's pooling capital expenditure to sales ratio. These outcomes demonstrate that the gains we have delivered in asset efficiency are structural in nature.

The pooling capital expenditures to sales ratio remained broadly in line with first half '25 at 11.8%, as the increase in pooling capital expenditure due to pallet purchase mix was offset by sales revenue growth.

Power purchase units remained in line with first half '25 as higher volume growth in first half '25 was largely supported by the utilization of excess pallets in the U.S. in that period. There was no capital expenditure benefit from access pallets in first half '26. Given excess pallet balances in the U.S. remained in line with the FY '25 level.

Growth in replacement requirements in the U.S. business in the first half will manage through pellet inflows, primarily from Latin America. While the IPEP to sales ratio remained in line with first half 25% at 2%, it is expected to be approximately 1.6% for the full year, driven by ongoing improvements in asset control and the normalization of the audit timing impacts in Europe in second half '26.

The increase of 0.2 percentage points on the FY '25 ratio reflects the impact of higher FIFO unit cost of pellets written off and an increase in uncompensated losses primarily in the EMEA segment.

Moving to our cash flow performance on Slide 17. Free cash flow before dividends increased $53 million to $482 million in first half '26. This increase was driven by a combination of higher earnings and lower working capital outflows and primarily due to normal variations in the timing of creditor payments. These benefits were offset by a $73 million increase in capital expenditure on a cash basis mainly reflecting the timing of pallet purchases in the period.

A $20 million net increase to finance and tax payments due to earnings growth, partially offset by lower finance payments due to strong free cash flow generation. A $7 million decrease in proceeds from sale of property, plant and equipment due to lower losses in compensated channels, particularly in Europe, and a $3 million net increase in other movements, primarily due to increased spend on intangible assets relating to technology investments to support customer experience, digital and supply chain initiatives. This is partly offset by lower outflows from employee provisions.

As outlined on Slide 16 on asset efficiency, there is no cash benefit from the utilization of excess pallets in first half '26.

Turning now to Slide 18 and looking at segment performance, starting with CHEP Americas. The region delivered new business momentum and meaningful margin and ROCE improvements driven by efficiencies across all aspects of the business. Revenue growth of 2% reflected a balanced contribution from price and volume.

Price realization of 1% recovered cost-to-serve increases while volume growth of 1% was driven by a 4% increase in net new business across all pallet businesses, which more than offset a 3% decline in like-for-like volumes. This decline reflected weak consumer demand in the U.S. and Latin America across most consumer staple sectors as well as weather-related impacts on the beverage and produce sectors in Mexico.

Margins increased 2.1 points as asset efficiency improvements and benefits from supply chain and overhead productivity initiatives more than offset incremental repair costs linked to higher damage rates in the U.S. increased relocation activity to optimize pallet balances across North America and one-off restructuring costs. These benefits also supported further investments to improve the customer experience. notably quality investments, including enhanced end-of-line quality control and pallet durability as well as digital investments, including serialization+.

ROCE increased 2.3 points as profit growth more than offset the 2% increase in ACI with asset efficiency improvements in the region, partially offsetting increased pallet purchases in Latin America and investments in automation.

Looking now at U.S. pallet revenue on the next slide. The U.S. Pallets business delivered revenue growth of 1%, supported by volume growth as strong net new business momentum offset consumer demand headwinds to like-for-like volumes. Price realization was in line with the cost to serve as price increases to recover inflation, primarily in labor were offset by sharing benefits of better asset control and other cost to serve efficiencies with customers.

Net new business volume growth of 4% was driven by enhanced sales capabilities and an improved customer value proposition, as well as favorable market trends, including increased automation in customer supply chains and retailer advocacy for pooled pallets. This sustained momentum offset a 3% decline in like-for-like volumes, reflecting weaker consumer demand due to persistent cost of living pressures, together with prolonged U.S. government shutdown in the period and increased labor market uncertainty.

We continue to have a strong new business pipeline in this region and expect this rate of net new business growth to continue in second half '26.

Turning to CHEP EMEA. While first half margins in ROCE were impacted by one-off items and timing, we still expect profit growth and margin expansion for the full year. Revenue increased 2% driven by 2% price realization to recover modest inflation. Net new business wins increased 1% as a 2% growth in European pallets more than offset the impact of a large customer contract loss in the automotive business.

Like-for-like volumes decreased 1% due to weak consumer demand in Europe across both pallets and the automotive business. This was partly offset by growth in South Africa and Tokai. Margins declined by 1.6 percentage points as sales growth and supply chain and overhead efficiencies were more than offset by one-off restructuring costs of $5 million, input cost inflation, higher pallet collection activity and a $15 million increase in the Europe IPEP expense. This increase included the $5 million timing impact I mentioned earlier, which is expected to normalize in the second half of the year.

The balance of the IPEP increase reflected higher uncompensated losses and increased for unit cost of pallets written off. Return on capital invested decreased 1.9 percentage points reflecting lower underlying profit and a 2% increase in average capital invested driven by higher lease costs associated with service center additions and renewals and investments in service center automation.

Moving to CHEP Asia Pacific on Slide 21, where productivity initiatives and commercial discipline supported investments in customer experience and financial returns. Revenue increased 3%, reflecting price realization of 4%, offset by a 1% decline in volumes. Volume performance was driven by a 3% decline in like-for-like volumes reflecting a lower average number of pellets on hire due to inventory optimization of retailers and manufacturers in Australia as well as weaker consumer demand in New Zealand impacting RPC volumes. This was partly offset by contract wins across the Pallets and RPC businesses.

Underlying profit margin improved by 0.9 percentage points, reflecting operational efficiencies including supply chain and overhead productivity initiatives. These benefits were partly offset by inflation, investments to improve customer service and quality as well as increased repair, handling and relocation costs associated with higher pallet returns due to inventory optimization.

ROCE increased 2.2 percentage points, reflecting profit growth and a 1% decrease in average capital invested, which included the benefit of asset productivity improvements across the region and lower lease service center assets.

Moving now to the corporate segment on Slide 22. Where central transformation costs decreased by $8 million. This primarily reflects the receipt of government research and development incentives related to digital investments and the capitalization of serialization+ equipment following the successful conversion of the market in Chile to the FLS service offer. While other corporate costs decreased $1.5 million, reflecting productivity and cost management initiatives.

Turning to our updated outlook considerations for FY '26 on Slide 23. We now anticipate full year sales revenue growth of between 3% to 4% with contributions from both price and volume. This reflects our view that consumer demand will remain subdued while recognizing there is uncertainty around how demand will evolve through the remainder of the year.

Second half '26 price realization is expected to be broadly in line with the first half. While second half volume contribution is expected to increase reflecting continued net new business momentum as well as the benefit of cycling weaker like-for-like comparatives in second half '25 and some improvement in U.S. consumer demand in second half '26.

Underlying profit growth guidance of 8% to 11% remains unchanged and includes expansion in group and all 3 segments profit margins. At a group level, the FY '26 combined plant and transport cost ratio is expected to improve approximately 1 point compared to FY '25, reflecting benefits from supply chain efficiency initiatives.

As I previously mentioned, we continue to expect the IPEP to sales ratio for the full year to be approximately 1.6%. The FY '26 overhead and other cost contribution to margin is expected to be broadly in line with the first half of '26. This includes the net benefit from the overhead restructuring program of $15 million and further investments in central transformation costs, including serialization+, digital customer solutions and IT upgrades.

Importantly, we remain on track to deliver an annualized benefit of $55 million in FY '27 from the overhead restructuring program.

Moving to Slide 24. For the full year, we expect to deliver between $950 million to $1.1 billion in free cash flow before dividends. This $100 million upgrade to the lower end of the prior outlook is primarily driven by 2 factors: firstly, a reduction in the pooling CapEx to sales ratio range by 1 point to between 13% and 14%, reflecting lower volume growth and lower-than-expected pallet prices.

Secondly, a $50 million benefit from lower nonpooling capital expenditure driven by delayed spend on service center automation equipment and rephasing of serialization plus expenditure as the business continues to refine the optimal technology approach and mix in the U.S. and U.K. based on learnings from Chile.

In terms of other considerations, while I do not propose to go through each item, we do expect net financing costs to be lower than our original expectations due to strong cash flow performance. In summary, we are pleased with our first half performance. which reflects the resilience of our business and disciplined execution on factors we can control. While the consumer demand environment remains weak, our focus remains on driving net new business wins in all markets. and enhancing efficiency and productivity across our business. We expect these actions to support margin expansion and sustainable free cash flow generation, while enabling us to continue investing in strategic initiatives that underpin our long-term success.

I will now hand over to the operator for Q&A.

[Operator Instructions]. Your first question is from Justin Barratt from CLSA.

Two questions. First one, I just wanted to understand if you could talk a bit more actually about your net new business growth cadence throughout the first half of FY '26. I guess I'm just also asking that reference to, if we look at the cadence of your growth in new business wins a couple of halves, it looks like it moderated a touch in this first half.

Thanks, Justin, you're talking at an overall group level. Is that right?

Yes.

I'd say moderated very, very slightly. So you can see that essentially when you look at Europe and the U.S., our exit rates at the half were the same as how we exited Q4.

I think one thing to note on sorry, just 1 thing to note, Justin, on new business is to a lesser extent, but it still is impacted by consumer demand. So obviously, as you see weakness in consumer demand, then the new business that you win, you get slightly lower volume than you would have otherwise got.

Yes. Okay. And then net new business initiatives in the first half. Anything to call out there?

I think continued conversion from whitewood across both the U.S. and Europe and also Asia Pacific. So I think strong new business pipeline and the team continue to do a great job of converting in my view.

Okay, fantastic. And then I just wanted to ask, again, you've got still the 4 million pallet surplus in the U.S. But you're still expecting to get the same benefit in FY '26 and you're still expecting to reach optimal levels in FY '27. I was just wondering if you could, I guess, reconcile those comments for me, please?

So in the first half, we finished, as you said, the same level of excess pallets, which was $4 million in the U.S. as we finished FY '25. And and essentially, any pellets required for both replacement and growth came from Latin America, the flows from Latin America. As we've talked about a little bit in our outlook considerations in the second half, we expect some improvement in U.S. consumer demand. And so based on our current forecast, we'd say by the end of first half we would expect to have worked our way through the 4 million excess pallets.

And that obviously hasn't changed since the first -- into August?

Yes, that's right. It's just based on the forward look at demand and also expectations on Latin American flows.

Your next question is from Peter Steyn from Macquarie.

At full year '25, there was considerable conversation about measurement and measurement intent gone. Is there any update on progress around your thinking there?

So management intends on what.

Just management measurement?

The LTIs and things like that. Yes. Okay. Yes. So the issue was if you look at the metric -- one of the metrics that's used for -- it's that grid of sales growth and ROCE performance. And it was clear that -- and again, 1 of the pressures that Remco is always under is to ensure that the you're not paying for backwards performance, however unrealistic that is sometimes. So the grid was increasing the range on sales growth. We're at yet at the same time, we were saying, look, look at our investor value proposition, which is saying low- to mid-single-digit growth on top line and then leverage on the bottom line.

So there was clearly becoming a bit of a disconnect between that grid and the investor value prop. So what we are going to try and put in place for next year, so FY '27 onwards, is a revised LTI sort of a setup whereby there's still the RTSR piece in there. But there's also -- rather than that ROCE sales grid, there will be something much more closely aligned with the total value creation that comes out of the investor value prop. But that is, of course, subject to us, in fact, not as it be the Chairman and the Chair of the Remco going around to the investors and the proxies and getting their buy and that obviously then go to a vote at the AGM in October.

So that's the plan, which I think from a management perspective, much more closely aligns with what we're trying to do with what we promised to deliver on the investor value prop. So that's -- yes, that's what we're working on at the moment.

Yes, which I suppose an comes back to the comments you made about customer value proposition and Net Promoter Scores and U.S. pallet repair costs and damage rates. I'm just curious to draw the line to that and get your perspective on your repair status at this point. Joaquin made the point that it's really about incremental utilization. Just wanted to be really certain there that you guys are very comfortable that you've got that balance right and that there's not a perhaps a backlog in repair building at all?

Yes. I mean I think -- in the past, the distant past, hopefully, there's been an opportunity or it a play to not spend the money on repairing pallets to boost the P&L in the short term. But I think that lesson has been well and truly learned and that we cannot sit here and say that in terms of our customer value proposition that we are going to deliver the premium service with the premium product when our customers need it if the pallets aren't up to the spec. So we are putting every effort we can to make sure that, that is front and foremost of everyone's minds. Almost the point of treating product quality along the same lines as safety.

So there will be no delaying of spend, both capital if it means putting quality at risk. So that's our philosophy. And I think that's sort of very much what akin was talking about in terms of we're continuing to push that through because as we start seeing volume and demand pick up, we need to make sure we have enough high-quality pallets ready for the customers, and that's always been what we try to do now.

And I think sorry, Peter, I was just going to say the proof point of that, I think, is our pooling CapEx to sales number at that 11.8%. So if we were buying pellets, if I call that unnecessarily or to avoid repair, then you'd see a spike in that KPI.

Your next question is from Owen Birrell from RBC.

Just to start with it. I just wanted to ask a question about the $4 million of surplus parts at the moment. you confirm whether they are repaired in the service or still yet to be repaired. And I just wanted to get a sense as to what the current storage costs of keeping those pallets -- and you did mention relocation costs of pallets at the moment. I'm just wondering, are they costs that are going to unwind into the first half of '27?

Thanks, Alan, and good morning. So pellets are stored not being repaired. So as they come out of storage, they're repaired. In terms of plant and transport ratio, what you can see is that despite obviously continuing to incur storage costs at a slightly higher level than we expected. We're still being able to deliver really good margin improvement and efficiency in that ratio. I think for me, the step change that you're talking about, to do with storage comes after we've worked our way through those pallets. So I would see that happening post first half '27. Does that help?

I just try to give guess what the magnitude of that would be.

I think, Owen, as you'd appreciate, there's a lot of moving parts. So I think what we really tried to do to help everybody was give you what we expect the full year plant and transport ratio to be, and hopefully, that allows you to work back.

Sure. So that's about 1 percentage point improvement that you're sort of talking to.

Exactly, Alan. Yes.

So just second question for me, just looking at the growth splits in the Americas, at 10 and 9% sales growth, Canada, 6% sales growth significantly rising that Americas, I guess, percentage. Just wondering if you could give a sense of a sense as to what was happening within price and net new wins across both of those regions. Was it all price across both? Was it all in wins across both -- just give us some flavor there?

Yes. So I think, Owen, obviously, when you look at at Lat Am, what we saw a dynamic of, obviously, strong price realization to recover cost to serve increases, saw good momentum in net new business. but then some challenges around consumer demand or organic like-for-like volumes. If you then look at Canada, again, pleasingly, against strong net new business wins. -- in Canada. And again, that recovery of cost to serve or inflation. So they were the key drivers, whereas like-for-like volumes in Canada were more or less flat.

Okay. That's great. Just 1 final question while I've got you. There's been a lot of in the market around AI impact on companies. Just wondering if you can give us a sense as to whether you think Brambles has I guess, great opportunities or greater threats from the AI?

I mean I think 1 of the good things is we've been using AI for a while. So this is not like there's a a big step change we have to make. So we -- if you look at some of the -- because it also obviously it depends on your definition of AI. It can range from everything from machine learning, use of digital optical capabilities when you're looking at plant repairs. So all that stuff we've been doing obviously, the stuff we're doing around S+ and the whole digitization of the supply chain relies a lot on algorithms and AI.

So we think there's plenty of opportunity. I think particularly when you start looking now at back office processes, there is a lot to be done. And the interesting thing is the technology is changing so far that you just got to try and pick your moment to start implementing it. And our approach has been very much let's look at the processes that we think have got the most opportunity to streamline and then apply AI to improve that process.

And we've been -- we started to work on that. I think it's 1 of those things that will be going on probably for a very long time as particularly as the tools get more sophisticated, but we're certainly embracing that and seeing benefits from it already, I would say.

Your next question is from [ Jacob Cakarnis ] from Jordan Australia.

Well done on a good result in a tough operating market. I just had 2 questions, if I could, please. Just on CHEP EMEA. Can you just help us through the dynamics through the second half? It looks like the timing or realignment, I guess, on the audits will give 1.5 percentage points of growth. But I just wanted to drill in on the expectation that, that will be back into EBIT growth through the second half. Can you just help us -- what are the other initiatives there some cost savings? How do we think about that, please?

Yes. Thanks for the question. You're exactly right. So 1 thing is that IPEP timing reversal. We expect a slight acceleration in net new business wins and then improvements in the plant and transport ratio in the second half. So there's the 3 key drivers, I'd say, of the improvement in the EMEA performance.

Okay. And while I've got you, Joaquin, just given the strength of the free cash flow as interested in the outlook that you're basing some of the nonpulling CapEx items, particularly ones that we could maybe argue are more important to the longer term just on automation and serialization flats. I appreciate it's at the margin there. But -- can you just give us a sense of why those programs have shifted to the right a little bit? How do we think about that going forward as well?

Yes. And I want to assure you, we're very much committed to investing in the business and building the business for the long term. It's a combination of things really in terms of that non-higher stock CapEx. So the first one is -- when you look at some of our things like end-of-line quality systems that we're putting in at the moment, there's technology changes that are coming rather than invest now, we've just delayed that slightly, that will be into the first half of '27.

So I think, again, what that shows is a good disciplined approach to capital allocation. But I think for me, what's pleasingly is we've been able to find other initiatives that are either CapEx light or don't involve CapEx to still make sure we're delivering the financial performance.

And then on S+, it's again just timing of rollout. I think as Graham touched on, we've essentially moved the market to the effortless service offer. But to make some further investments, we -- as we work through the U.S., for example, we need to see some terms of those pallets to get a better understanding, and we continue to work through technology mix. So for me, it's not about us not wanting to invest. It's more about making sure the technology and the availability of that technology for that investment.

And then just to follow up on SPs in the U.S. Joaquin, is that going to be supported by customers initially? Or is that off, I guess, a proof and evidence sort of arrangement and then that conversation happens later on?

Yes, Jake, I think it's very much Chile will be a great example then to be able to take 2 customers and say, look, we've done this in Chile. Here's what we think the benefits are both to you and to us. And here are the improvements we can get in your efficiency. So we can use Chile as a sort of a reference case, if you like. But the other good -- of course, good news is being a global company with global customers. Some of the customers in Chile are also customers in the U.S. So already, we're pretty sure that some of them are talking to the counterparts in the U.S. saying this is working really well. And that will help again with the introduction of S+ if we decide to roll this out in the U.S.

Your next question is from Matt Ryan from Barrenjoey.

Just had a question on the new business wins. I think from what you've said that sort of offsets the volume decline to the second half -- so just hoping if you could give us some color on the wins that you're getting either by size or geography.

Yes. I mean it's pretty evenly spread across the geographies. I mean everyone is doing a great job. And I think for us, the confidence is around looking at the pipeline. So one of the investments we made a few years ago around -- into Salesforce, it gives you that much more granular view about what is coming down the pipe and what the probabilities of converting it -- and I think that's -- I think we made some predictions about 18 months ago about the conversion of the pipeline, which has been pretty accurate. So it was a bit slow to start off with.

So I think we've got a very good view now about what's happening. And the majority of it is converting whitewood users into CHEP pallets. So again, it's not going to disturb any competitor balance in the major markets. It's about these new customers you want to to move into a pooled environment. So I think we're pretty confident about it. We've got pretty good visibility for the next 6 months. So we wouldn't be saying what we're saying. We didn't have some pretty good visibility.

The only caveat is a point that Joaquin made earlier. if you win a new customer, you assume the existing level of activity, but if consumers generally are buying less, then it just takes longer to get up to the level you assumed when you won the business, but we haven't really seen it as a material issue so far.

And just a follow-up on that effortless service model. Are there any differences between Chile and the other markets that you're looking at?

I mean I would say the biggest 1 is just scale. I mean, so 1 of the reasons we chose Chile was it's a fairly contained market. And therefore, getting a good view about just how the data works in terms of using the algorithm to come up with the effortless service offer. Things like, for example, if you have a very small customers in Chile, you can't necessarily look at them customer by customer. You might have to aggregate them into subsector groups and segments.

Now in theory, that might be a lot easier in the U.S. because you don't have quite so many -- there's even small customers are quite big compared to July. But other than that, yes, you've got some operational differences like the the climate makes the performance of the glue and the tag different, but that's stuff that we'll just crack on through and sort out. And that's one of the reasons we're doing -- the trials we're doing in the U.S. already is to get ahead of those sorts of issues.

Other than that, no, I think pretty similar. Clearly, you've got some slightly different dynamics of the retailers versus U.S. versus Chile. But other than that, we don't see it as a major difference.

Your next question is from Anthony Moulder from Jefferies.

If I can start with the U.S., you've said that you're scrapping more pallets in the U.S. and -- you've also talked about a higher damage rate. I'm wondering if those 2 issues are related. And specifically, what's driving that higher demethanthe U.S. fleets?

Yes, you're exactly right. What we're seeing is the pallets are experiencing more damage and that means more scrap. -- pallets. And that's a combination of things, obviously, as you inject less new pallets into the pool, then while they fit for purpose for customers as they come back, the damage tends to be a little higher.

And picking up on the previous comment about the geography of growth. I think you said during the comments that the growth in net new wins in the Americas was Latin American-focused. What why aren't you growing into the white pellet space in North America, please?

No. Sorry, Anthony, may be my fault here -- the question was around the Americas and given that we already split out the U.S. I covered Canada and Lat Am. But if you look at the U.S., we had net new wins of 4% in the first half.

Right. I bet you're not using those surplus million pallets in the U.S. Would you use those if growth was originating in the U.S.

You would, 100%. And the impact was really because we saw consumer demand or like-for-like volumes down. So the in the first half, the volume that the U.S. needed for either replacement or to meet growth came from Latin America. And the difference is really that decline in like-for-like volumes of 3%. So then as you look out to the second half and into first half '27, we expect obviously like-for-like volumes to improve good momentum on net new business, and so we'll work our way through those 4 million pallets.

Okay. The overhead costs, you've called out is it $15 million savings for FY '26 on top of the $35 million from FY '25 and next year, 105 of what we thought was about $189 million of overhead. Is that the appropriate level of overhead to keep in the business beyond FY '27, please?

I think I look at it a different way, Anthony, rather than have a target for what does overhead need to be. It's about making sure we invest to drive the growth in the business and long-term success. So similar to the answer we gave during transformation, we're investing where it's right. But as we touched on, we are also looking for productivity initiatives and making sure that we're doing what we can. So how I would more look at it, Anthony, if I was you, is we gave our margin improvement target of 3 points plus by the end of of the FY '24 baseline. So you can see how we're progressing on that. And then we've set asset productivity, we're more or less where we're mature in that with still some opportunities to go. We know overheads and supply chain.

Okay. And lastly, if I could, the cost to serve benefits now being shared with customers since the Absa price impact, how specifically should we think about cost to serve benefits for customers impacting price going forward, please?

Yes. I think, Anthony, this is one we've chatted a little bit about which it really is about us recovering the cost to serve. So where a customer can help us lower the cost to serve, then we share that benefit. So I think how I would look at it is, ultimately, this is about margin, profitability and free cash flow generation. So depending on the cost to serve, we'll recover it through pricing. But obviously, it's a win-win if we can lower that cost to serve and customers pay less.

Less to going down into NPDs and the like. Is that a key component of that transit, please.

Now I think what it's more about is 2 things that I think are really great. Obviously, the investments in technology like Ultra devices have turned NPD lanes that were initially very high cost to serve lower cost to serve. And then obviously, customers assisting in converting customers or improving controls at MPD customers, so there are less losses. So it's not about not servicing customer demand here. It's just how can we all do it at a lower cost.

Your next question is from Andre Fromyhr from UBS.

First question is just about the composition of sales and in particular, in the guidance commentary. So if I understand, you're suggesting that net new business would sort of track similarly in the second half at around 2% price similarly around 2%. So at the 3 to 4 group level implying sort of a like-for-like in the minus 1% to flat environment. So is that a fair read?

And that implies actually positive like-for-like in the second half, not just improving. So what gives you that confidence on the -- at especially on the consumer side of like-for-like following the last few years that we've seen in like-for-like trend.

Yes. Thanks, Andre. And look, your interpretation of theFY '26 outlook considerations is broadly in line with ours. I think the things that give us confidence as you look out as we get to the second half, we are cycling easier comparatives from the prior year. So that's essentially 2 points of decline, the recycling. And then you look at expectations on the U.S. consumer demand as obviously, there's been some tax changes, et cetera, you have the World Cup -- so what we wanted to do in the outlook considerations is very clearly lay out our assumptions and then people can form their own judgments as well as ours in terms of what they expect to happen to consumer demand.

Okay. And then expanding that into the EBIT guidance, can you help us understand what has changed in your expectations since August by -- and just in terms of the ability to still be able to attain the top end of the underlying profit range given we're now expecting the sort of lower end of the sales. Does that make sense?

Yes, that does. I think a couple of things, Andre. One is obviously, it depends where you sit on the sales revenue guidance of 3 to 4 million -- then when you look at our productivity and efficiency improvements, in particular, in supply chain, it depends how successful we are at those. So if we were to overdeliver then that gets you to the top end of the range. And I think IPEP is another one, I think, really pleasing progress continuing in the Americas, some challenges in Europe. We're confident in our plans for the second half, but that is also a swing factor. So a range of moving parts, but we're still very confident with our guidance.

Okay. And then last one for me is just on serialization plus, in particular in the U.S. You've referred to continued rollout of the REIT infrastructure there at the moment. So how much of a sort of precommitment is that on the project? Like are we still considering a scenario where you decide not to go ahead with S+ is it more like you'll do it at some point, but it will take your time to make sure you sort of learn the most you can out of Chile another example.

I mean I think when we talked about the -- putting the read infrastructure into the U.S. in the first place, I think there were a couple of considerations there. One is -- there's a lot of the spend, we think, is no regret or little regret because we can use a lot of the cameras, for example, in the repair line if we wanted to, if we start not to go ahead with.

The other thing, though, is that I think the initial readout from Chile is looking very promising. So this would be to get to value quickly putting the read infrastructure in, given that it's is low regret makes a lot of sense because then when you put the instrumented and tagged pallets into the U.S., you'll get value much quicker. So that was sort of where we were coming from. I think that was 6 months ago, roll-forward now we had this target of trying to convert 100% of the customers to the file service offering in Chile, we're at 95% at the half of the year -- first half last night, we got another 1 converted, so we're pretty close to 99% now. So again, that is great.

But to really prove out some of the use cases and the value cases. We need the assets in those converted customers to turn 2 or 3 times -- so -- and that therefore means 9 months-ish. So I think we're talking now about let's just make sure we've got the data to absolutely cross the Ts, dot the eyes on the value cases -- we're getting a much closer, better idea about the cost because we've now gone through various situations of that.

And then we can make the decision. So we're not -- we haven't decided to roll it out yet, but it's fair to say we are getting close to that point. And all the green shoots are there, but we still want to the capital discipline point that Joaquin mentioned earlier, we're not going to do this unless we're very sure that we'll get the 15% return on investment.

Your next question is from Sam Seow from Citi.

Just a question on margins, in particular, Slide 15 there -- on supply chain, the productivity is about 80 basis points. So that looks like a up almost 240 basis points year-on-year. So just wondering, one, if you can talk about what the big drivers there were? And two, as we think about the future, do we expect that additional margin expansion, call it, 120 basis points to come incremental to normal operating leverage? Or is that just included in it?

Okay. I'll have a crack at the first question. The second one was a little tougher. But I think your read of the supply chain productivity is right. And essentially, what has driven that is, I would say, procurement initiatives. So we've got enhanced processes in terms of our procurement. -- transport productivity and plant optimization. So I think the team have done a great job of looking at the network, understanding structures, where could we make improvements in our plant network.

And obviously, we continue to get the benefits from automation and the durability investments where we've invested. Your question, I think, was on the margin improvement as we look out.

Yes. Is it going to be incremental? Or do you think it's just normal operating level?

Yes, I'd sort of bring you back to just our investor value prop and how we think about it, which is that we would expect to be delivering high single digits UOP growth. SP-13 Got it.

Okay. Okay. That's helpful. And then maybe on that asset efficiency line, IPP not a contributor to this result. You said that lever is mature and plus or minus we expect as a percentage of sales that's going to be largely flat. So just wondering with S+ yet to really fully roll out, is that going to be incremental to your press kind of PEP to sales commentary? Or should we see the benefits as S+ in those line of things?

Sam,, you're exactly right. So we've been talking about that sort of target of Pepta sales at 1.6% of sales. That is pre-roll -- and then the benefits of SPs, I say we'll see not only in asset efficiency, but we'll see it in all lines of the P&L. So helping with revenue in terms of attracting that new business, retaining existing customers, supply chain productivity. So I think there's a broad range of benefits that could come from S+, but asset efficiency is definitely 1 of those.

Got it. Got it. And then lastly, on net new win. Is there like a number or percentage or a stat you can give us that kind of explains the wins coming from white wood from NPD or expanded lanes, as you call it. Just trying to get some insight into these new customer wins that basically aren't coming from competitors and you're seeing the benefit of those expanded lane?

Yes. I mean I can give you an indicator, which is most of it's not coming from competitors. That's your indicator. We're telling you it's not -- it's coming from competitors. It is the majority, as you just said, is white words and then there's a chunk of new loans. I think if you look -- if we look back over the last 18 months in the U.S. market, for example, our estimate of the market share movement between us and PECO, who obviously the major competitor, it's minimal. I mean it's almost 0.

So yes, there have been some ups and downs, but over that 18-month period, the relative market shares haven't changed. And that's obviously our analysis is hard to get the numbers because they're not a public company, but that should give you some confidence that it's largely coming from whitewood and other lines.

.

Your next question is from Cameron McDonald from E&P.

Two questions from me. Firstly, just in that outlook with the improved volumes that you're expecting to see gather the -- we've got the point about the weaker PCP in the second half as well. But we've seen a range of companies come out in that CPG space. talking about having to discount to drive volume growth. What are you seeing and what engagement are you having with some of those customers around their expectations around discounting or promotion?

So when we talk to them, I mean, one of the interesting things is we're interested in what their volume view is and whether it's coming from discounting or not, is not irrelevant to us, but certainly, we just want to know what they think the volume pattern is going to be like. And I have to say the majority of the ones that we talk to don't actually know. I mean I think it's such a volatile environment out there that it's very hard for them to predict and therefore, it's hard for us to predict.

The only sort of signs that we see are that there seems to be a slight uptick in U.S. consumption. It was looking very good in January and then they had the big winter storm snowstorm, which may put a bit of funds into the equity of the data. But again, looking into February, I think it's beginning to look good back on track again. So that's very, very green shoots, I wouldn't want to call that yet, but it feels like -- if you put that in conjunction with potentially some of the tax changes in the U.S. and the World Cup coming up, which sort of gives us a bit more confidence that the U.S. certainly appears to be going the right momentum.

Europe is very difficult because it's not 1 market. Some parts of the continent doing pretty well like Iberia, others not so well like the U.K. and Germany. So it's very mixed in Europe, much harder to predict. But that's -- and yes, our customers are saying the same thing it's hard for them to predict.

And you've mentioned the weather, Graham. I mean a few companies have called that out. What do you think that headwind for the has been in terms of sales in -- early in the second half?

I don't think -- so it's U.S., clearly. I don't think it's been more about disruption to the supply chain and cost to then catch up. I think -- some of the sales I've been hearing you, they are catching up in February. So they're not lost forever. Some of them will be, undoubtedly. But it's not going to be material from what I see at the moment.

Okay. And can I also ask about serialization+ in Chile. And thanks for the examples of some of the benefits. Joaquin, you're probably going to expect this question, but can you actually give me some quantification of what those benefits have been either numeric or operationally in terms of what the improvement in either the turn rates or the margin or anything other than just anecdotes?

I'll do my best here, although as Graham talked about, we're really keen to see a few more turns in the Chile market. But I think Slide 8 was our attempt to give you when you look at the serialization plus value scorecard areas where you might see value. And I think, Graham, in the answer to one of his earlier questions, is a really good example of that. If you think about damage rate in the market, -- it's been very hard to know where has damage occurred.

So it comes back, but that pallet may have gone from a manufacturer to a retailer and back to us. what the team have now been able to do in Chile is you can map essentially the flows so you can understand in this leg of the journey, the pallets being damaged. So then that allows us to take action either training of staff, thinking about how we do it. So I think that's one. Net new wins. We've seen some progress there, where customers have converted to our offering in that market because of the lessening of the administration burden and the insights that we can provide.

So I think for me, there's a whole range of benefits, but before we wanted to put numbers on a page and say this is what it looks like, we need to see a few more turns. And then obviously, before we made it full decision to roll out in the U.S. will present an update on what's happening in Chile and why we have confidence in returns. So it may not have fully helped to Cameron, but hopefully a start down that journey.

Yes. Well, I think to put you on notice, you're going to -- if you come back and ask for a couple of hundred million dollars worth of support investment, you're going to have to give us some actual data, right, in terms of what the returns have actually been.

And so just in terms of the hurdle of presumably because you haven't either had enough turns or you have not decided yet to execute the full rollout -- can we read that as being you have not reached a 15% return or you do not see an immediate pathway to 15%.

So a couple of things, if I can just chip in. One was, firstly, I'd expect nothing less than the staff to give you a really solid proposal. And let's be honest, Cameron, I wouldn't approve it if there wasn't a solid proposal. So I think that's a very reasonable ask go and you have our commitment on that.

And then I think what we talked about on the 15% return is that was annualized after a pool that's been fully serialized. So when you think of Chile, Graham touched on it earlier, we're essentially fully at the ESO offering. So that's why we think we need another 9 months or so to be able to show the returns and have confidence in that number.

Okay. Great. So halfway through first half '27. So at half year '27 results, you're going to have -- it's a decision point effectively. SP1 Yes, I'd say somewhere between sort of that point and 30th of June, let's say, roughly, right? So very hard to be fully specific. 9 months from now, it's a little longer. But obviously, if we had enough information at the February results, we would share it. I mean, we're very conscious that once we're in a position and we have the information, then we will share it with the market.

Your next question is from Scott Ryall from Rimor Equity Research.

Perfect. -- an -- can just noted down 19 November, just so you -- now I had a question on Slide 8 as well, and it's not for quantification, but I think Casson the right-hand side of your progress today, you talk about customer conversions and mine expansions. You've talked about the customer experience, and I'm wondering if this -- and then you've also talked about insights. Could you just talk about the noncustomer experience. And I guess that the reduced admin burden simplified billing model, I get that, that's pretty clear when you do serialization. But -- just what are the other benefits that you're seeing in the early stages that customers are finding that's helping you win business, please?

I think, Scott, the main one is it's easier to do business with us. I think that is the main one. I think as we start using the tools at S+ and ESO is giving us in terms of working with the customers to show them exactly where some of the damage is occurring or where some of the losses occurring so that we can then work with them to improve their supply chains, their businesses, take waste out of their operations. That is what I think that will start making a big difference for them and for us. But at the initial go-to-market proposition is -- you don't have to do with these audits and declarations. That's what's got us to the business so far.

Okay. So it's still pretty preliminary on those further assets around helping customers take out ways for most things.

Yes.

And then I'm just coming back to the pallet balance being optimized in your comments about the U.S. pallet balance being optimized by the end of first half '27, so end of calendar year. Does that -- what's the implications with respect to CapEx levels once that happens, please?

Yes. I think we -- that's why we've really tried Scott to quantify the CapEx benefit. So -- in this half, we haven't had any. I think if you look back on what we said for the full year FY '25, roughly quantified that as 0.5 point. But obviously, that will vary depending on volume growth, et cetera. But I think the key message that I would take away from this is the asset productivity and cash flow performance is sustainable. It's not driven by the use of excess pallets.

So Joaquin, just to follow up on that. So because I remember that feedback you gave at the full year. And that was I was a bit confused with the fact you've still got surplus pallets, but you've had no benefit in this half, but yet that the surplus will be will be optimized by the end of this calendar year. So why is it.

So that means relative to the fiscal '25 number, it's kind of 0.5% or is it -- is there another way of thinking about it on now? Just confused about what you're saying.

Yes. I think another way maybe that might be simpler is we've often quoted a rough rule of thumb that is 1% of volume growth is 1% of pooling CapEx to sales. So the way I look at it is the business delivered 11.8% pooling CapEx to sales with essentially flat volume. So then if you forecast volume growth at a group level, let's say volume was 2%, then you would add 2%.

So -- for me, it's got another way just linking back to that is if you think about Investor Day, what we said is you should expect pulling CapEx to sales to be in the $15 million to $17 range, and that was based on 2% to 4% volume growth. So were essentially in line with that, if that takes all the noise away of excess pellets, et cetera.

Your next question is from Niraj Shah from Goldman Sachs.

Just another question on Chile, following up on Matt's earlier question on the differences between Chile and say, the U.S., for example. Graham, I think you said that the biggest difference is scale, I guess, both of the market and the competitors. Does that mean the market structure is similar like is the pooled solution roughly half the market and you guys are kind of 80% of that? I'm just curious.

Our -- we are -- of the pooled market, we are bigger than 80%. We've got a small competitor in July, not a PC-like competitor. And the penetration of the market, I'd have to double check, but I would think it's probably a bit more penetrated actually, maybe it's not. I mean maybe it's probably about the same as U.S., I would guess, but we'll have to check that out.

[Operator Instructions]. There are no further questions at this time. I'll now hand back to Mr. Chipchase for closing remarks.

Well, thanks, everyone, for your questions and for joining the call. Looking forward to seeing, I think, most of you over the next few days. So we'll have more questions then I'm sure. Thank you very much.

Well, good afternoon, ladies and gentlemen. So my name is John, John Mullen, and it's a great privilege as Chair of Brambles to welcome you to the 2025 AGM and to declare the meeting open.

There are copies of the notice of meeting and of the minutes of our last AGM in the registration area. And our Company Secretary has advised me that there is a quorum for the meeting, and I propose to take the notice of meeting as read. Thank you.

I'll start by introducing your directors. I will then take you through the process for asking questions. Our CEO, Graham Chipchase, is not with us today. This is due to the exciting news of a very recent arrival of a baby daughter, for which we congratulate him and his wife, Sarah. As a result, instead of a separate Chair and CEO address, as would normally be the case, I will try to cover both agendas myself. However, Graham will be available via telephone during the Q&A session, if there are any questions that are directed specifically to him.

Maxine Brenner, Chair of our Remuneration Committee, will also address the company's remuneration policy, and I will then take you through the voting procedure and answer questions from shareholders. We'll then move to the formal part of the meeting.

So I'd now like to introduce your Board. So joining me here today on my far left is Cameron McIntyre; Kendra Banks; Ken McCall; Elizabeth Fagan; and Maxine Brenner, Chair of our Remuneration Committee. On the right is Vik Bansal; Priya Rajagopalan; Jim Miller; Nora Scheinkestel, Chair of our Audit and Risk Committee; and Carina Thuaux, our Company Secretary. Tony Palmer, as our other director, he will not be joining us today as for personal reasons, unable to travel from the U.S. today. Also with us today sitting in the front row, are Debbie Smith and Natalie Maxwell from our external auditors, PwC.

Then please see on the screen, the evacuation map for the Paradox Hotel. I would note that there are no planned evacuation tests scheduled for today. But in the event of any alarms or emergencies, all attendees, obviously, should follow the instructions of the Paradox Hotel supervisors and staff. They are fully trained to manage any such situations and ensure everybody's safety.

Now we are webcasting this meeting for the benefit of shareholders who could not attend in person, and we will retain an archived version of that webcast on our website.

There are 2 ways to ask a question today. If you're attending in person, you can ask a question from the floor. If you'd like to do that at the relevant time, please approach the microphone, show your green voting card or blue nonvoting shareholder card and give the attendant your name. When the attendant announces you to the meeting, you may then ask your question. If you're unable to get to a microphone, then please raise your hand and an attendant will bring a microphone to you.

If you're a shareholder viewing our webcast, you can ask a question by selecting the blue hand icon at the top right-hand side of the webcast window. This function is available now, and questions can be submitted at any time. You will not be able to vote on any of the items of business via the webcast. So although you may start submitting questions via the webcast at any time from now, I will not answer those questions until the relevant time in the meeting. And the company secretary will read out questions verbatim on your behalf. Although questions may be moderated, and if we receive multiple questions on the same topic, amalgamated together. We do appreciate the time that it takes to type in a question. So if we move on in the agenda before you've submitted your question, we will answer it at the end of the meeting.

And as I mentioned earlier, Debbie Smith from PwC is in attendance and available if any shareholder wishes to ask her any questions about the conduct of PwC's audit, their audit report, the company's accounting policies or the auditor's independence. You can ask Debbie a question using the same function, which I just outlined.

We will be holding a poll on all the resolutions before this meeting. Any shareholders attending the meeting in person and who wish to leave early, may place their completed voting cards in the ballot boxes by the exit doors. I'll explain the voting procedures when we get to the formal part of the meeting. So I'll now open the poll and turn to my address.

So as we reflect on the past fiscal year, I'm really truly proud of the progress that we have made in transforming Brambles into a digitally enabled organization that is more customer-centric, financially robust and sustainable than ever. Through our Shaping Our Future Transformation program, which we announced back in 2019, we have structurally improved the fundamentals of our business, enhancing Brambles' value proposition to our customers, increasing our competitive advantage and resilience while establishing the foundations in data and digital that are critical to our future success.

This year also marked the conclusion of our ambitious 2025 sustainability program, which has demonstrated the clear and enduring business value of our circular model, reaffirmed our leadership in sustainability and paved the way for the next phase of our regenerative ambition as embodied in our 2030 sustainability targets. Together, the benefits of our transformation and sustainability programs not only delivered strong financial, operational and sustainability outcomes in 2025, but also created a step change in the value that Brambles creates for our stakeholders.

Starting with the value that we have created for you, our shareholders, a core commitment was made for our transformation to ensure that Brambles consistently delivered operating leverage and sustainable free cash flow generation. I'm very pleased to report that we have delivered on that promise. Over the past 4 years, at constant currency, we have achieved a compound annual growth rate in revenue of 8% and an underlying profit of 14%. In the same period, we generated an average annual free cash flow before dividends of USD 640 million, up USD 170 million on the average of the 4 years prior to the transformation. And for the first time this year, free cash flow before dividends exceeded USD 1 billion. So this sustained improvement in financial performance translated to total value creation for shareholders of approximately 17% in 2025. This was achieved through growth in basic earnings per share from continuing operations of 14% at constant currency, which included a 1 point benefit from USD 403 million on market share buyback that we completed during the year.

In addition, the dividend yield for the year was approximately 3%, with total dividends declared increasing 17% year-on-year to USD 0.3983 per share.

Of course, these financial outcomes would not be possible without increasing the value that we create for our customers, our employees and the environment and communities which we serve. Our commitment to our customers has been unwavering. And while there is more to do, we have significantly improved their overall experience and increased the value that we bring to their supply chains. We have enhanced service levels, simplified customer interactions and use data analytics to deliver insights that enhance the efficiency of their supply chains. Importantly, we also continue to invest in the quality of our platforms and are increasingly applying digital insights to identify opportunities for collaboration to unlock shared value and efficiency. And this focus on enhancing the customer experience has led to strong improvements across core customer performance metrics, including a significant increase in our Net Promoter Score against the FY '21 baseline.

For our people, safety is paramount. And the reason we focus on the critical importance of having the right culture around it. Our safety-first strategy and investments in our service center network have reduced Brambles' injury frequency rate by more than half since FY '21. And we continue to target zero harm for all our employees.

We have also strengthened the diversity of our business, including a 7% increase in the percentage of women in management to 38.8% at the end of FY '25 as compared to FY '21. We're very encouraged that our efforts to make Brambles a safer, more diverse and rewarding place to work have been recognized globally, with Brambles named a top global employer for a third consecutive year and maintaining this certification in 26 countries.

For the environment and the communities we serve, our transformation, combined with our 2025 sustainability targets, have strengthened the inherent sustainability of our circular share and reuse model and delivered more positive impacts in every region that we operate. During the year, we maintained the use of 100% certified timber globally. We enabled the sustainable growth of 2 trees for every tree that we use in our business, and we continue to actively work to expand forestry certification uptake in all regions.

Strong progress has also been made against our decarbonization plans, and we remain on track to achieve our 2030 science-based targets.

Having reduced our Scope 1 and 2 emissions by 32% and Scope 3 emissions by 17% against an FY '20 baseline, we continue to progress towards our ultimate ambition of reaching net zero emissions by 2040.

Over the course of our 5-year program, we've also demonstrated the value that our sustainability leadership brings to customer engagement. The number of customers collaborating with us on sustainability projects has more than doubled since FY '21, while the number of sustainability certificates provided to customers has grown from 684 in FY '21 to more than 11,000 in FY '25. And while we judge our performance based on how we track and measure against our ambitious targets, it's always validating and a deep source of pride for our people to see the ongoing external recognition of Brambles' sustainability credentials, including by TIME Magazine, which ranked Brambles the third most sustainable company in the world.

These results underscore the collective benefits of our transformation and sustainability programs in delivering structural improvements across our organization that support value creation over the long term.

Looking ahead, our vision for the Brambles of the future is to connect and illuminate the world's supply networks, making them more resilient and regenerative. Customers remain at the center of our strategy as we continue building an unrivaled experience that is truly effortless, reliable and anticipates their needs. From quality platforms and exceptional service to our use of technology to create effortless interactions, we will ensure our offering is seamless, flexible and fosters collaborative partnerships with our customers.

Our ongoing focus on operational efficiency will see us continuing to raise the standard for our share and reuse model that minimizes waste and improves the cost to serve. Advanced technologies, digital insights and best practice processes will help drive improvements in platform quality, increased productivity and enhance safety across our operations.

In continuing our sustainability journey, we will further integrate regenerative thinking across our value chain and move beyond zero impact to create supply networks that aim to replace what we take and create more than we need. We will also leverage our unique position at the center of global supply networks to better use our data to illuminate the flow and movement of our assets and our customers' goods. And this strategic element includes the work that we are undertaking to develop innovative digital customer solutions that reduce waste in supply chains, enhance operational performance and support the long-term sustainability of our customers' operations.

In fact, data and digital capabilities are integral to every aspect of this strategy and to our future success. And for this reason, we're encouraged by the progress that we're making with our serialization+ program. In Chile, where the read infrastructure is in place and the pool is now fully serialized, our focus has shifted to value creation. In this market, we have introduced an effortless service offer, which removes the need for pallet declarations and audits, eliminating a major friction point for our customers. Today, approximately 85% of our customers in Chile are already using this new model with the balance expected to move to the model by the end of this calendar year.

And in addition to transforming the customer experience, we have identified 4 additional sources of value across the business, including net new business growth and pricing optimization as well as asset and supply chain efficiency, which we plan to test and prove out during FY '26. We also continue to advance serialization+ in North America, where good progress has been made to date. In FY '26, we will expand our read infrastructure to target 2/3 of our asset flows as we evaluate the optimal technology mix and the associated investment required to implement serialization+ in this market.

The valuable learnings from Chile have reinforced the benefits that serialization+ can deliver for both our customers and our businesses and its potential to further strengthen our competitive advantage and reinforce our position as leaders in supply networks. We look forward to keeping the market updated on our progress with this very exciting initiative.

Building on the success of the 2025 sustainability program, we are proud to be renewing our regenerative ambition under the new 2030 sustainability program. While our vision remains the same, we now deepen our focus on nature-positive outcomes as a core principle of regeneration, while also pushing to expand our scope and impact beyond our operational boundaries.

This approach is reflected in our main targets, including the regeneration of 2 hectares of land for every 1 hectare required for our timber needs, shifting from the 2025 program's tree-based metrics to holistic nature-based metrics. Our focus on boosting circularity in our assets has seen us set a target of turning 80% of product waste into net positive solutions while substituting 80% of virgin plastics in new products with circular materials or solutions.

Turning then to our business positive goals and reflecting our desire to broaden the reach of our program. We will continue activating sustainability collaborations, aiming to reach 1,000 partners across Brambles Supply Network by building on collaborations achieved to 2025.

In our workplace, we are embedding diversity, equity and inclusion at the core of a new employee experience framework that boosts efforts to further increase the representation of women across all roles and levels, ensure equity and transparency in pay and strengthen accessibility and inclusion throughout our workplace. For communities, we will aim to drive positive policy impact by engaging and advocating on issues central to our business. And this includes promoting and accelerating the adoption of policies and programs that advance the circular economy and promote responsible business practices. Building on the core regenerative themes of the 2025 sustainability program, we're very excited about our ambitions and delivering our 2030 targets to extend our global leadership in sustainability.

Looking then at FY '25 financial performance in a bit more detail. Sales revenue on a constant currency basis increased by 3% and was achieved through price realization of 2% as cost to serve increases moderated across all regions and a 1% increase in volumes. Encouragingly, volume growth was driven by net new business growth of 2%, which accelerated to 3% in the fourth quarter as more manufacturers recognize the benefits of switching to Brambles' pooled solutions. This growth in new business offset a 1% decline in like-for-like volumes as increasingly challenging macroeconomic conditions led to softening consumer demand, particularly in the second half of FY '25.

Despite softer-than-expected revenue growth, the business generated significant operating leverage with underlying profit increasing 10% on a constant currency basis and margin expansion of 1.3 percentage points in FY '25. This reflected significant benefits from asset efficiency initiatives and activities to improve supply chain and overhead productivity.

Considering the strong margin improvement this year and the further efficiency opportunities across supply chain and overheads, we now expect the business to deliver at least 3 percentage points of margin expansion by FY '28 compared to the FY '24 baseline. And this represents an increase of 1 percentage point compared to the margin improvement target we set at our Investor Day in September last year.

Finally, free cash flow before dividends of USD 1.095 billion increased USD 212 million. This was primarily driven by lower capital expenditure, which benefited from a significant improvement in uncompensated pallet losses.

Despite ongoing macroeconomic uncertainty in key markets, we remain focused on key factors within our control, including maintaining our focus on commercial discipline, converting new business and delivering efficiencies across our operations. We are very pleased to reconfirm our FY '26 outlook expectations outlined in August 2025 of constant currency sales revenue growth between 3% to 5%, underlying profit at constant currency growth between 8% to 11% and free cash flow before dividends between USD 850 million to USD 950 million.

These financial outcomes, of course, are dependent on a number of factors. These factors include prevailing macroeconomic conditions, customer demand, the price of lumber and other key inputs, the efficiency of global supply chains, including the extent of retailer and manufacturer inventory optimization and movements in foreign exchange rates.

Before closing them, I want to touch on Board renewal. The stewardship of Brambles in support of its long-term strategic goals is obviously a vital part of the Board's role. To this end, we are grateful to have had 3 new nonexecutive directors join the Brambles Board in FY '25, who are up for election today. Vik Bansal, Maxine Brenner and Tony Palmer, offering their diverse perspectives and experience. We're very confident that their contributions will enhance our Board's effectiveness and support our long-term strategic goals.

As advised in September, Cameron McIntyre will step down from his role as nonexecutive director at the conclusion of our meeting today. We thank Cameron for his tremendous contribution to Brambles in a short time, and he leaves us with our best wishes for his new executive responsibilities as the CEO of the REA Group.

With the transformation journey, having delivered enduring benefits, our focus now turns to building the Brambles of the future, and we are more confident and excited than ever about the role our business will play in leading global supply networks over the years to come. We extend our gratitude to our dedicated team of 12,000 employees for their contributions and commitment to our customers, this business and each other every day.

To our loyal customers, we deeply appreciate your ongoing support and trust in our partnership.

And finally, we acknowledge our shareholders for your confidence in the work that we do and the value that we deliver. You can be assured that our focus remains on delivering value for our customers, our shareholders and our employees.

Thank you.

Good morning. At Brambles, we have a remuneration structure and set remuneration levels to ensure we can attract, retain and motivate high-caliber executives and talent throughout the company. Our objective is to align executive reward with the creation of sustainable shareholder value and align executive behavior with Brambles' strategic objectives, our code of conduct, our shared values and our risk appetite.

Remuneration is divided into 2 components, being fixed and at-risk remuneration. Fixed remuneration is not directly linked to performance, while at-risk remuneration is variable and directly linked to Brambles' performance.

At-risk remuneration has 2 elements. The first is the short-term incentive, half of which is received in cash, with the other half being received in deferred shared awards, which vest 2 years from the date of grant.

The second is the long-term incentive share rights, which vest 3 years from the date of grant, subject to the satisfaction of performance conditions, but they remain subject to a further 12-month holding lock period after vesting.

Half of the LTIs are subject to financial performance conditions. The other half are subject to relative total shareholder return performance against 2 external indices. As part of our review of 2025 remuneration outcomes, the Remuneration Committee carried out its annual assessment of any behavioral events or incidents, which occurred during the year that might warrant adjustments to all or part of an executive's incentive-based remuneration. I am pleased to report that no such incidents or events were identified through this process.

Given the strong operational performance and transformation momentum this year, the STI outcomes reflecting underlying profit, cash flow from operations and personal objectives were assessed at up to 127% of target. Similarly, given significant increases in total shareholder return and sales growth to return on capital invested performance, an outcome of 95% of the long-term incentive opportunity vested.

For executive leadership team roles, the Remuneration Committee undertakes an annual benchmarking exercise to ensure that executive pay is aligned to the company's objectives and performance while also maintaining our ability to attract and retain the right talent in the geographies in which we operate.

Following the annual benchmarking exercise and a 2-year base salary freeze covering F '24 and F '25, the committee approved an average increase to base pay of 3%, aligned with relevant geographical market movements. This applied to the CEO and members of the executive leadership team, including executive key KMPs.

During F '26, the Remuneration Committee will undertake a comprehensive review of the appropriateness of our current executive remuneration framework, particularly in the context of our operations and earnings in both the European and U.S. markets. In addition, consideration will be given to how a revised remuneration framework supports our investor value proposition and future business growth.

For those of you who would like more information on our remuneration strategy, further details can be found in the remuneration report on Pages 56 to 77 of our annual report, which is here and which will be subject to shareholder approval later in the meeting. Thank you.

That wasn't the result of a disagreement in the boardroom. Great. Thank you. Thank you very much, Maxine.

So I will now take you through how to vote. If you're entitled to vote, you will have been given a green voting card. You can vote on each resolution by placing a cross in the for, against or abstain box for the resolution.

And ladies and gentlemen, before moving to the formal part of the meeting, I will now answer questions from shareholders. I remind you that only shareholders or their proxies or company representatives that are attending here in person are entitled to speak at this meeting. And to maximize the opportunity for all shareholders, I request that you ask only one question at a time.

For our shareholders viewing the meeting via our webcast, I remind you that you can ask a question by clicking on the blue hand icon at the top right-hand corner of the webcast window.

I will answer questions in the following order. First, from those attending the meeting in person; and second, those asking questions via the webcast.

So let's start here with the room. Are there any general questions in the room?

Mr. Chairman, we have a question from Mr. Don Adams. He's a proxy holder representing the Australian Shareholders' Association.

Thank you. Yes. Well, you've heard my name. I've got proxies from 180 retail shareholders today. Mr. Chairman, I wanted to ask you a question. Before we met you, we researched your background and saw that you have a very impressive record as a company chairman, and it's no wonder that you're in high demand as a company chairman.

Nevertheless, last week at the TWE Annual General Meeting, there was a 14-odd percent voted vote against your reelection to the Board. Do you think this was just a tick a box exercise? Or do you think there's a substantive issue involved there?

Well, thank you. I anticipate you might ask me that. Look, last year, I said that I would reduce my workload. And while I have finished 2 commitments during the year, being those of my time at Toll and also the National Maritime Museum, for a number of reasons, some public and some private, I did not reduce as far as I had intended. I intend to continue to further reduce my workload during this coming year. But in the interim, I'm very comfortable that I can fully discharge my responsibility as Chairman of Brambles. And this is a Brambles meeting, not a TWE meeting, but the comments I made at TWE were that there are really 2 issues. My workload and that of other directors is a very valid subject for discussion with all stakeholders.

The point at the time was my election as a Director and Chairman of TWE, where the industry is going through a very difficult time. We have just had some challenging economic conditions in China and elsewhere. Our CEO had retired, and the new CEO doesn't start for another month -- at the time, another month. And then it was suggested that it would be in shareholders' interest that the Chairman left as well. I just found that rather strange to understand and a very different issue from whether one should have 1 Board, 5 Boards or the rest.

I have another question, but...

Yes, fire away, fire away.

The other question is concerns another unrelated company, namely Woolworths. I understand that Brambles is a large provider of pallets to Woolworths. The Wilderness Society has accused Woolworths of using dodgy certification to harvest native timbers to make pallets. Can you refute that allegation as far as Brambles is concerned?

Well, I don't think it's for me to speak on behalf of Woolworths. I don't know exactly what they do or don't do. What I do know is that 100% of our lumber is fully certified. And that includes the lumber that is provided to -- in pallets provided to Woolworths. And we have 2 -- there are 2 -- I think there was a mention I read there. There are 2 certification authorities, which I think PEFC and FSC. And some people feel that one is less reputable perhaps than the other. We use both societies. They -- and we need to do that because we have operations all around the world, and they're not both present in all regions. So approximately across our worldwide operations, we're around 50-50 certification from both of those 2 organizations. But I can absolutely assure you, sir, that our number is 100% certified. Please?

We have our next question from [ William Prince ].

Thank you, Mr. Chairman. I just want to say congratulations on doing such a fine job. And I love Brambles because it's a simple product and even I can understand it. Like a lot of other things, you can't understand. And in relation to that first question, with your workload, I have come to the conclusion you're not a mere mortal like the rest of us, that you're able to do all these different things. I was just wondering if you could -- can I ask 2 questions or...

Yes.

He did. The first is on the buyback. Just what's your criteria for the buyback? Is it at a certain price or a certain level or whatever? And is that going to continue? And I guess with the buyback, what you're sort of saying, well, this is surface to add our needs. And so we don't really have any other, let's say, capital management initiatives that we might be looking at, adding on acquisitions, that sort of thing. So that's the first question.

Can I answer that first? So I can...

Yes, you can reply.

I'll forget what you said. So yes, look, you're right on the money there. So the criteria for a buyback -- at first, obviously, that you have the cash available. You're not stretching the balance sheet. You're not preventing the company from making other investments and doing things that it should be doing to sustain ongoing performance. So if you are in that fortunate situation, then you've got a number of options, and like increasing dividends or doing other things, but we think that a share buyback, provided you're buying shares at a value that's accretive to what we believe is the long-term value of the company, then it makes very good sense for shareholders that we buy back shares.

And so we will continue with that policy. I mean, occasionally, in the event of -- like if you have a major sale of a business part or something, you might use a special dividend or something like that. But I think on the regular course of business like we are today, the buyback is the best solution.

Just a follow-up on that then. Sorry.

Can you stand a little close?

A little closer. Sorry. Just a follow-up on that. Does that mean that at this stage, you have no, let's say, acquisitions you're looking at or other growth? Like at the moment, we're a fairly focused company in one area. Is there plans to diversify Brambles? Or where is the growth coming from? Is it just basically well, we're going to continue on pallets to do that well, and we're going to have that natural growth there.

Yes. Again, I think you're quite right there. So if you don't see long-term value in your core business, then you perhaps would look at acquisitions, et cetera. We still see a huge amount of value in our core business. particularly as we move into this digital age of the digitalization of our pallets, we think there's a lot of growth from our core business. So we will continue to focus mainly on that. That said, we're always looking at opportunities. And if the right one comes along, it makes sense for shareholders, we would consider it. But that's not the case at the moment.

Just a question on the digitalization of your pallets. Can you just give an idea of the life cycle of a pallet? There's someone that got a hammer and nail and he builds a bit of a wooden pallet, and then at the end of its life, it probably ends up in New York in a 44-gallon drum fire, keeping people warm there in winter. And how is the digitalization working out? Are you able to track -- better track your pallets? Have we had significant -- because a lot of the times, the pallets went missing and many a time, I had a barbecue with a good Brambles pallet, a chef pallet or something like that. And...

I'll let people run at your place next week.

No, you're always welcome. But that was always like a standing joke that -- and also I guess most are made out of wood. Has there been any thought of different types of materials used? Or maybe there are already, and what sort of R&D do you do in that respect?

Yes. No, really good questions. So I mean, theoretically, a pallet will last forever if you keep replacing the boards on it and ultimately, down the track, it's basically a new pellet. But we depreciate them working over 10 years, I think, yes. And they -- after each cycle, it's been out in the field, they come back into our repair and maintenance centers where broken boards are replaced, locks are changed, et cetera. So they're actually very durable and last a long time.

How many go missing that? Like how many pallets have you got at the moment? Do you know that? How many pallets you have? And do you know where they are? And has the digitalization program helped you sort of say, well, Woolworths has got so many of them and Coles has got so many and somebody else has got so many. So do you have that level of specificity on that?

So that's the holy grail and it's been talked about in this industry for decades. And it's very easy to put some form of a tracker on a pallet, but to do so cost effectively has been the challenge. Pallet costs, say, $20 and you can buy a GPS tracker for $80. But if you put $80 on every $20 pallet and continue to charge $20, I wouldn't be standing here in front of you for very long. So that's been the dynamic. But we've made huge progress in the last few years.

The team have been really working over time on different technologies. So what I referred to in my speech in serialization+ is where there is, in our case, a QR code, so an individual identifier on every single pallet in the pool. And we've done that now in the whole pool in Chile. So we now know every pallet where it goes, who it goes to, when it comes back.

Is that a $80 digitization thing? Or is it a...

No. So it's a combination. So that is just an identifier, which is basically a QR code stuck on the side of the wood. But we also put -- we do put the $80 trackers in periodically, if we see that there's an issue arising in a certain part of the supply chain or a certain customer. We can put some $80 tracker pellets in that will actually tell us real time, like following an Uber blip on your phone or exactly where that pallet goes. It's obviously expensive, but it returns a huge benefit because you now know and you can sit down with the client and say, I can tell you why you're losing so many pallets, this is where they're going.

I'm very impressed with your level of detail, Mr. Chair.

Yes, no problem.

And just what was the last question. Congratulations to Graham on his child. Well, I'm trying to think of the other thing, but I'll leave it. I can't remember it so...

Come back if you do. Good. Any more questions in the room? No, it looks like no. Carina, are there any questions on the webcast?

No, there are no questions.

Wow. Okay. So we will now then turn to the items of business. Items 2 to 10 on the agenda will be proposed as ordinary resolutions. As stated in the notice of meeting, I will be casting any discretionary proxy votes that have been given to me in favor of each of the items of business. The proxy and direct vote position for each resolution will be shown on the screen. I remind you that if you're attending here today, please cast your vote by marking your green voting card. We will announce the poll results to the ASX later today and also post them on our website.

Steve Hodkin of Boardroom has been appointed returning officer.

The first item of business is to consider and receive the financial report, directors' report and auditor's report for Brambles and for the group for the year ended 30th of June 2025.

There's no vote on this item. Are there any questions for item 1 from the floor?

Can I just ask the other question?

Absolutely. No problem.

I was just going to ask you -- and I mean, I'm sure there's been no corporate approaches to the company. Otherwise, you'll tell us about that. But can you just sort of comment on that, who would be interested in Brambles? It seems to be a very specific type of business. And would a Microsoft or something like that, they have their pallets everywhere. Is Brambles an attractive business to some corporations or none?

Well, we think it's an attractive business. No, yes, look, it is because I liken Brambles to being the sort of biggest company that no one's ever heard of. So you guys as shareholders probably have, but the average person in the street has never -- has unlikely -- they may have heard of the word CHEP, but they probably haven't heard of Brambles, and yet it's a very large, successful global success story for Australia.

So yes, we are obviously attractive. I think that's why we've got a large institutional set of investors in our stock and why the share price has risen as strongly as it has over recent times. And I think we're seeing there's probably a mix between the defensive stock and a growth stock. And we sort of depending on cycles and times, that the orientation moves a bit more one way or the other. But our basic business is in FMCG dependable commodities that people eat and drink, which obviously go up and down with economic growth, but people don't stop eating.

And so it's a secure investment, and it's an investment that's been returning through thick and thin, a very good return to shareholders. And increasingly, I think we're seeing there's a little bit of growth stock. And I'm really, really excited about this digitization story. I'd probably want my colleagues not talking about it. But if we get this right, I think the growth potential for Brambles out into the next decade is second to none.

So no more questions out there? Carina, anything from the webcast?

No, nothing from the webcast.

No. Okay. Item 2 asks shareholders to adopt the remuneration report for Brambles and the group for the year ended 30th of June 2025. Are there any questions for item 2 from the floor? I take that as not. So Carina, any questions from the webcast?

No, nothing from the webcast.

Fine. The resolution and the direct vote and proxy positions are now on the screen. Please now cast your vote for item 2.

[Voting]

Item 3 asks that Vik Bansal be elected to the Board of Brambles. Vik's biographical details are set out in both the notice of meeting and the annual report. And I now invite Vik to speak briefly on his election.

Thank you, John. Fellow directors and valued shareholders. It's a privilege to stand before you today -- or sitting before you today, seeking your support for the election to the Brambles Board. Having served as a director over the last 6 months, I've developed a deep appreciation for the strength of this company, its purpose, its people and its culture.

Over the past 3 decades, my career has spanned the industrial manufacturing, distribution and logistics sectors, leading large and complex organization through the periods of transformation and growth. I've had the opportunity to serve as the Chief Executive Officer of Boral, Cleanaway Waste Management and InfraBuild and a Chief Operating Officer of New York's NYSE-listed Valmont based out of Omaha. I've lived and worked in U.S., Asia and Australia. I'm also a current nonexecutive director at Washington Soul Patts and Orica. I'm a Chair of LGI Limited.

These experiences have shaped my commitment to industrial excellence, sustainability, value focus and good governance, all of which I see as central to Brambles' long-term success. Brambles' circular business model, as John just mentioned, is one of the most compelling in the industrial world. It demonstrates that sustainability and commercial performance are not opposing forces, but in fact, complementary strengths.

As a Board member, I'm focused on contributing to continue to build on this foundation, scaling our sustainability leadership while maintaining the operational rigor that drives shareholder value. In my Board and executive experience, I've seen how transparency, accountability and clarity of purpose enable organizations to navigate complexity and build trust with all stakeholders. I am committed to upholding those standards at Brambles.

Finally, I believe digitization will define the next phase of our growth, leveraging data and technology to optimize supply chains, enhance customer value and improve asset efficiency will be key to keeping Brambles at the forefront of our industry. If elected, I will continue to bring an industrial operators mindset, global outlook, sustainability and governance to the Board, ensuring Brambles remains a global leader and continues to deliver value for shareholders, customers and communities alike. Thank you for your trust, and I look forward to the opportunity to contribute to this exceptional company's ongoing success.

Thank you, Vik. Are there any questions for item 3 from the floor? I take that as no. Carina, any questions from the webcast?

No questions.

The resolution and direct vote and proxy position are now on the screen. So please now also cast your vote for item 3.

[Voting]

Item 4 asks that Ms. Maxine Nicole Brenner be elected to the Board of Brambles. Maxine's biographical details are set out in both the notice of meeting and the annual report. And I'll now invite Maxine to speak briefly on her election.

Good afternoon, again. It's a great privilege to have the opportunity to put myself forward for election to the Brambles Board. Brambles is one of Australia's leading global companies, a business that fuels the world's supply chains while leading the way in the circular economy. Brambles moves millions of pallets and containers every day and does so in a way which reduces waste, improves efficiency and helps customers meet their own sustainability goals. This combination of scale, purpose and innovation is what really drew me to Brambles and what continues to inspire me today.

My executive career included acting as Managing Director of Investment Banking at Investec Bank, working as a lawyer at Herbert Smith Freehills and various other governance roles. These roles taught me how strategy, capital and governance intersect to create long-term value and sustainable outcomes and are key to many of the Board discussions we share at Brambles. Over the past decade, I've also had the privilege of serving on some of the largest Australian companies, including Origin Energy, Woolworths, Qantas, Telstra and Orica.

Companies like Brambles that operate globally or at scale face rapid change and must deliver both on performance and purpose. Through that experience, I hope to contribute to our ongoing focus around disciplined growth, innovation and sustainable outcomes. In my role as Chair of the Brambles Rem Committee, I'm particularly focused on culture, performance and leadership. Brambles has a strong values-based culture. And the alignment between purpose, performance and reward is an area we will continue to test going forward.

Brambles stands on firm foundations, operationally strong, strategically ambitious and grounded in purpose. I have been very impressed with the strength and values of the management team led by Graham Chipchase. With your support, I look forward to working with management and my Board colleagues to help Brambles remain the global leader it is today. Thank you for your support.

Thank you, Maxine. Are there any questions for item 4 from the floor? It looks like there are not. Carina, are there any questions on the webcast?

No questions.

Thank you. So the resolution and direct vote and proxy position are now on the screen. Please also now cast your vote for item 4.

[Voting]

Item 5 asks that Anthony John Palmer be elected to the Board of Brambles. Tony's biographical details are set out in both the notice of meeting and the annual report. And as Tony is unable to join us here today in person, he has prerecorded an address on his election.

As an Australian-born son of a sheep shearer, who spent most of my career outside Australia, I really have difficulty expressing in words just how excited I am to serve on the Board of Brambles, which I regard and always have as an iconic Australian-listed company. I started my business career in operations, consulting and strategy consulting at [ Alikay ] Partnership and PA Consulting, respectively. Over the course of my career, I've had the good fortune as an executive to serve in the chocolate wars as a brand leader at M&M Mars and more recently as a Board member at Hershey.

I served in the juice wars as the General Manager of Kids Beverages at the Minute Maid division of the Coca-Cola Company in the U.S. I served in the cola wars as Managing Director, Australasia for Coca-Cola Company; and the cereal wars as Managing Director of Kellogg U.K. and Ireland; and most recently, in the diaper wars as the very first global CMO and then Global President of Brands and Innovation at Kimberly-Clark in the U.S.

I had the very good fortune to found a digitally driven re-friendly high-performance sunscreen business, which gave me hands-on digital and entrepreneurial experience.

Over the past 3.5 years, I've served as a senior adviser to One Rock Capital, a mid-market private equity firm with offices in New York, London and Los Angeles; and my focus at One Rock is on diligence and value creation in the food and CPG industries.

Over my career, I've lived and worked or studied in Japan, in Hong Kong, in the U.S., the U.K., France, Switzerland and of course, Australia.

With regard to governance, for 14 years, I was an Independent Director of the Hershey Company, which is a Fortune 500 sweet and salty snacks company. I served as the Chair of the Compensation and Executive Organization Committee. I spent 5 years as Lead Independent Director and Chair of the Executive Committee. And at various times, served on the Finance and Risk, the Governance and the Audit committees.

The course of my career has given me an in-depth perspective of government and value creation in CPG across the globe, and it's included strategy, capital management, M&A, general management, marketing and innovation, human capital management and supply chain.

I want to leave you with the thought that if elected, I would be honored and privileged to apply this experience to the singular focus of helping make the Brambles team spectacularly successful. And as a result, the Brambles investors, you, extremely happy and satisfied.

Thank you for your time, and I hope to be working with you in the future.

Great. Thank you, Tony. Are there any questions for item 5 from the floor? Looks, again, not the case. Carina, any from the webcast?

No questions.

Wow. Breezing through it. The resolution and direct vote and proxy position are now on the screen. Please now cast your vote as well for item 5.

[Voting]

Item 6 asks that Ms. Kendra Fowler Banks be elected -- reelected, sorry, to the Board of Brambles. Kendra's biographical details are set out in both the notice of meeting and the annual report. And I now invite Kendra to speak briefly on her reelection.

Thank you, John, and good afternoon, Brambles shareholders. I'm very pleased to be with you today to have served on the Board for the last 3 years and to be standing for reelection to your Board.

I'm currently the Chief Financial Officer of SEEK Limited, an ASX 100 company, which operates market-leading digital employment marketplaces in Australia, New Zealand and across Southeast Asia. I have spent nearly 10 years at SEEK as a digital executive, first as Marketing Director and then as the Managing Director for Australia and New Zealand, prior to my appointment as CFO in 2024.

Before SEEK, I spent 11 years working in the retail sector at both Coles here in Australia and at Tesco in the U.K. across various senior commercial and marketing roles, including in digital marketing and pricing. I started my career in strategy consulting with McKinsey & Company.

Over the last 3 years, it has been a privilege to serve on the Brambles Board and to support the ongoing transformation of the business. The trajectory of the business on financial, customer, people, sustainability and shareholder metrics has been extremely positive, and there still remains so much opportunity. If reelected, I look forward to being part of the next phase of Brambles transformation, bringing further value to our customers, communities and shareholders. I will continue to bring my skills, experience and insights in retail and digital markets in realizing these opportunities on behalf of all of you, Brambles shareholders. Thank you.

Thank you, Kendra. Are there any questions for item 6 from the floor?

Sorry, I just want to clarify something. You've got a full-time job at the moment?

Perhaps I can answer that. Has Kendra got a full-time job at the moment? That very highly as a Chair to have serving executives on your Board is invaluable. You get out of date very quickly when you retire from a full-time executive position. Although you may have many years of wisdom and experience, hopefully, you can lose to...

Most of your Board have retired from their full-time job, haven't they?

Sorry?

Most of your Board have retired from their full-time jobs?

Yes, yes. But I think it's really important you have a balance. And I know sometimes guidelines in Australia are that you shouldn't have a full-time serving executive on your Board. I disagree with that. I think it brings huge value.

Okay.

Thanks. Okay. Carina, any questions from the webcast?

No questions.

No, very good. The resolution and direct vote and proxy position are now on the screen. So please again, cast your vote for item 6.

[Voting]

Item 7 asks that Mr. James Richard Miller be reelected to the Board of Brambles. Jim's biographical details are set out in both the notice of meeting and the annual report. And I now invite Jim to briefly speak on his reelection.

Thank you, John, and good afternoon, everyone. I'm delighted and honored to stand for election as a Director of Brambles. In addition to Brambles, I am on the Board of Directors of The RealReal, a U.S.-based e-commerce company. Additionally, I serve on the Board of Directors of LivePerson, a U.S.-based customer care software company; and serve on the Board of Directors of ServiceExpress, a private equity-owned company that provides third-party maintenance services to large data centers. I'm also a senior adviser to the Boston Consulting Group, where I provide consulting services related to digital transformation and artificial intelligence. Previously, I was the Chief Technology Officer for Wayfair, a large U.S.-based e-commerce company where I also served on the Board of Directors.

Prior to my roles at Wayfair, I was responsible for the worldwide operations at Google where I had responsibility for procuring, building, deploying and operating Google's worldwide compute capacity and cloud infrastructure. Additionally, I was the Managing Director of Google Energy LLC and had responsibility for sustainability and corporate and social responsibility at Google and its parent company, Alphabet. Additionally, I held executive roles at Cisco, Amazon.com, Intel and IBM in the areas of technology, operations, supply chain management and general management.

If reelected, I look forward to putting my global experience in the areas of strategy, sustainability, supply chain management and operations, information technology, artificial intelligence and data science to support Brambles in the next phase of our digital transformation. Thank you.

Thank you, Jim. Any questions for item 7 from the floor? Please, we have one here.

Mr. Chair, we have a question from a shareholder, Mark McCoy.

I'm very happy to support you and have already voted for your reelection. But I just wanted to clarify, you mentioned, if I understood correctly that you're on the Board of an e-commerce company. I'd just like to clarify whether that e-commerce company is a customer of Brambles?

The e-commerce company is The RealReal, and we are not a customer of Brambles.

Is that okay? Yes. Great. Thank you for the question. Carina, any questions from the webcast?

No questions.

No questions. Thank you. I have to say before we go to the next point, I feel very privileged to have a Board of the highest possible quality and to work with these teams. I think they're doing a good job on your behalf.

So the resolution, direct vote and proxy position again on the screen. Please cast your vote for item 7.

[Voting]

Item 8 asks shareholders to approve that the Brambles Limited MyShare Plan, as amended in the manner described in the explanatory notices accompanying the notice of meeting, the amended MyShare plan and the issue of shares under the amended MyShare Plan be approved for all purposes, including for the purposes of Australian Securities Exchange Listing Rule 7.2, Exception 13.

Are there any questions for item 8 from the floor? I take that as a no. Thank you, Carina. Any questions on the webcast?

No questions.

The resolution and direct vote and proxy position are now on the screen, and please, therefore, again, cast your vote for item 8.

[Voting]

Item 9 asks shareholders to approve the participation by Mr. Graham Chipchase until the 2026 Annual General Meeting in the Brambles Limited Performance Share Plan in the manner set out in explanatory notes accompanying the notice of meeting, and that be approved for all purposes, including for the purposes of Australian Securities Exchange Listing Rule 10.14. Are there any questions from item 9 on the floor? It looks like no as well. Carina, anything from the webcast?

Nothing from the webcast.

Thank you. The resolution and direct vote and proxy position are now on the screen. Please now cast your vote for item 9.

[Voting]

Item 10 asks shareholders to approve the participation by Mr. Graham Chipchase until the 23rd of October 2028 in the: a, Brambles Limited MyShare Plan, if approval to the amendment to the MyShare Plan under Resolution 8 is not obtained, which is not the case; and b, the amended MyShare plan, again, if the approval is obtained in the manner set out in the explanatory notes accompanying the notice of meeting be approved for all purposes, including for the purposes of Australian Securities Exchange Listing Rule 10.14.

Are there any questions for item 10 from the floor? It looks like there are not. Carina, any questions from the webcast?

No questions.

Let me go. The resolution and direct vote and proxy position are now on the screen. So please again, now cast your vote for item 10.

[Voting]

Are there any further questions from the floor? It would seem not. Carina, anything from the webcast?

We have a question from the webcast. From shareholder, Michael Cobin. The Chairman is very supportive of the digitization of Brambles. Perhaps he could share with us what is digitization as far as Brambles is concerned and the reason why it is so good for the company?

I'll have a go. Yes, certainly. Thank you for the question. So I think, to an earlier question, this holy grail of pallet industry has been to be able to digitally identify every pallet in the system. And that's been the goal for many years. We've now finally started to do that. And what does that mean? And what does that -- what benefit does that give? Well, we'll break probably into 3 layers.

Firstly, by actually knowing rather than having to guess or estimate as best you can how many pallets you have in a certain pool, you obviously start to get much better control of your business. I mean, as an example, in Chile, when we serialized all of the pallets, we finally actually had more pallets in the system than we thought we had because we were trying to make conservative estimations, all the time of losses and those sort of things. And with serialization+, we can actually now count how many we have. So that's the first benefit, operational at our level.

Second benefit is for the customer. Using Brambles over the years has been a very manual and generating a lot of work for customers. You have to physically count all the pallets and then they enter them into Excel spreadsheets. And then we come along 6 months later and now they can't find some of them. As a gentleman here said, some of them end up in the local garden center, et cetera. So for the management of the pallet pool for the customer is quite tedious, time consuming, labor intensive. By moving to a fully digital interaction, it takes all of that away from them, which is a huge positive for the customer.

And then the last layer is what we're calling digital customer solutions, and that's where we are actually associating a particular load with a numbered pallet, and we're following that pallet through the supply chain. We -- the whole Board, we were in New Zealand a couple of days ago, observing a movement of strawberries from the paddock all the way through to Woolworths DC and ultimately to the shelf. And with a digitally enabled pallet, we can tell both the grower as well as Woolworths and any other retailer exactly what's happened to those strawberries from start to finish, how long it took to get to the DC? Was it in temperature all the time? What was the humidity? All of those sort of details. So that then gives the retailer a much better control, quality control over the product that they receive. And we can now -- we can charge for that service because it's a real value add to the customer.

So those 3 levels of digitization, when you add them together, that's why I'm excited about the future. I hope that answers your question. Any others?

No further questions.

Ladies and gentlemen, that concludes our discussion on the items of business. Now please remember to place your voting cards in the boxes beside the exits. The poll will remain open for another 10 minutes. When the poll closes, you will be notified on the screen behind me. And we will announce the results of the poll to the ASX later today.

Ladies and gentlemen, thank you very much for your attendance today. I'm really grateful. And I remind you that copies of the sustainability review are available in the foyer. And I now declare the AGM closed, and I invite you to join us outside for tea and coffee. Thank you.

Good morning, everyone, and welcome to Brambles Full Year Results Presentation for FY '25. I'll begin our presentation today with an overview of our results for the financial year, including key highlights and achievements. I'll then give an overview of the operating environment before sharing an update on our transformation program, including progress with Serialisation+.

Finally, I'll cover our FY '26 outlook before passing to Joaquin's to take us through a detailed review of our financial performance. Starting with our FY '25 highlights. We have again delivered a strong set of results with our financial performance, highlighting operating leverage and a step change in cash flow generation. For the full year, we achieved sales revenue growth of 3%, with a 10% increase in underlying profit and exceeded USD 1 billion in free cash flow before dividends for the first time.

Our sales revenue comprised a mix of cost to serve recovery and a return to volume growth, where momentum in net new business wins helped offset lower like-for-like volumes as consumer demand remains subdued. Meanwhile, our underlying profit continues to benefit from asset efficiency and supply chain initiatives and ongoing discipline around overhead costs. These higher earnings as well as lower capital expenditure from the benefits of our asset productivity initiatives contributed to the significant improvement in free cash flow before dividends. The strength in our performance has allowed us to declare a total dividend of $0.3983 per share, representing an increase of 17% from FY '24 and a payout ratio of 62% in line with our dividend policy.

We're proud of what we've achieved in FY '25 and attribute much of our success to our transformation program, which has made us a more resilient business and delivered structural improvements across the organization. I will cover our transformation progress in greater detail shortly, but among the most notable improvements was a stronger customer value proposition to retain and grow our customer base. This was further enhanced through our expanding digital capabilities and ongoing asset efficiency improvements, which led to reductions in the capital intensity of our business with these benefits also being shared with our customers. This reduction in capital intensity and the strength of our financial position supported additional capital returns to shareholders in FY '25 with USD 403 million of share buybacks completed during the year.

In line with our investor value proposition, we are pleased to announce additional buybacks of up to USD 400 million in FY '26. Finally, we are proud of the many positive impacts achieved through the course of our 2025 sustainability program. Building on this success, we're stepping up our regenerative ambition for our 2030 sustainability program to be released in September.

Turning to the operating environment. During the year, we saw a return to more normalized pallet market dynamics following inventory optimization initiatives undertaken by retailers and manufacturers during FY '24. Overall, inflationary pressures moderated this year with modest increases in labor and transport costs, partially offset by deflation in fuel and lumber. The capital cost of a pallet was down approximately 6% year-on-year, although it remains above pre-COVID levels.

Importantly, we maintained commercial discipline with our pricing recovering modest cost to serve increases that benefited from lower pallet loss rates. This was driven by the normalization and pallet market dynamics and progress we have made through our asset efficiency initiatives. Whilst our business is reasonably defensive in nature, increasing macroeconomic uncertainty, and the ongoing tariff concerns had a noticeable effect on consumer demand, leading to lower like-for-like volume growth, particularly in the second half of the year. This demand impact was more than offset by an acceleration in new business wins particularly in the U.S. and Europe, with more manufacturers recognizing the value of our high-quality pooled solutions.

This momentum benefited from broader market developments including the reduced availability and rising cost of quality whitewood pallets as well as increasing levels of automation across manufacturing and retail supply chains. Operationally, inventory optimization by manufacturing and retail customers in FY '24 led to higher pallet returns in key markets and contributed to additional costs across our network in FY '25. This included additional repair requirements due to higher pallet damage rates and incremental transport and storage costs in the U.S. due to excess plant stocks.

We have approximately 4 million excess pallets at the end of FY '25 in the U.S. and anticipate a return to optimal levels by the first half of the 2027 financial year. From a CapEx perspective, utilizing excess plant stock in the U.S. contributed to a 0.5 point benefit to the pooling CapEx to sales ratio this year and should also result in a similar benefit in FY '26.

Let's now look at the Shaping Our Future transformation program in greater detail. Starting with our customers. We have continued to enhance all facets of the customer experience from improvements to service levels and investing in platform quality to simplifying the way we interact with our customers and retail partners. Many of these initiatives are also being enabled by our growing digital capabilities. This includes the significant upgrades to our customer portal that have increased the efficiency and capabilities for customers to self-serve, including electronic order placement and introducing AI-driven messaging in some of our markets to provide swifter customer support.

These improvements have helped lift key customer performance metrics, such as Net Promoter Score, delivery in full and on time and customer satisfaction scores which have all continued on an upward trend for the past 2 years. Our focus on asset efficiency has boosted the resilience of our business by reducing capital intensity lowering the cost to serve and enhancing the circularity of our assets to deliver even greater sustainability advantages. Technology investments, including pallet tracking, together with our growing data analytics capabilities, and expansion of our asset recovery capabilities have fundamentally changed how we are able to track and recover our assets. This enabled us to reduce 2 key asset efficiency metrics, being the pooling CapEx to sales ratio by 8 points and uncompensated pallet losses by approximately 50%, both measured against the FY '21 baseline and well ahead of our transformation target.

In network productivity, our focus has been on continuous improvement to enable our business to operate more effectively and with greater agility. The initiatives are wide-ranging and include automating, inspection and repair processes, optimizing service center locations to reduce transport distances, investing in platform and innovation to improve durability and optimizing procurement across our operations. The efficiencies from these initiatives have been critical in offsetting cost headwinds while also enabling reinvestments to enhance the customer experience through platform quality and improving the cost to serve.

Finally, in our digital transformation, we have continued to extract and analyze valuable insights from the increasing amounts of data generated through our autonomous tracking devices across 34 countries and our maturing data analytics capabilities. Our advancements in digital have enabled new business opportunities, for example, turning unauthorized reusing to new customers, better commercial decision-making and asset efficiency improvements. The work to date in digital has also laid the foundation for the Brambles of the Future and our vision to connect and illuminate global supply networks. One of our strategic priorities that underpins this vision is bringing greater visibility and insights to our customers that drive efficiency, resilience and regeneration.

Progress towards this vision is being made through our efforts in digital, including Serialisation+, which I'll provide an update on shortly and also developing our innovative digital customer solutions. To date, we have developed 3 distinct solutions, which we are currently piloting with several global customers in key markets, including the U.S., U.K., Spain, Portugal, Germany, Australia and New Zealand.

Turning to our ESG achievements. I'm incredibly proud of the work we've accomplished under our 2025 sustainability program. Over the past 5 years, we have strengthened our inherently circular share & reuse model through transformation to deliver greater positive impact for the planet, business and communities. Starting with safety, we have achieved our best year on record with a Brambles injury frequency rate of 2.2 in FY '25. The strong safety culture we have built has allowed us to bring our BIFR down in every year of our program and it is now 56% below where we started in 2021. Another key achievement has been the progress of our waste targets under our planet positive pillar with almost 94% of sites now diverting product waste from landfill up more than 10 percentage points in FY '24, although under the 100% we were aiming to achieve by the end of FY '25.

We have also surpassed our target of 30% recycled or upcycled plastic in new platforms, again in FY '25 by 11 percentage points. For communities, we continue to leverage our central role in supply chain and logistics expertise to support those in need through food bank partnerships globally, a program that addresses the dual challenge of food waste and food insecurity. In FY '25, we again supported 20 million people receiving meals through our support for food rescue organizations including food banks.

It is always a source of great pride when Brambles and our employees are recognized for our sustainability efforts. In FY '25, we have continued to reaffirm our global leadership across major ESG indices and rankings, including the Dow Jones Best-in-Class Indices, Corporate Knights Global 100 and TIME magazine.

Turning to our transformation scorecard. I won't go into the details. But as you can see, a majority of the targets we set in September 2021 have been achieved and have played a key role in driving our performance over the past few years. For the few areas where we did not quite meet our goals, action plans are in place to continue making progress with further details available in our annual report. I'll now spend some time covering our Serialisation+ program, including the progress of our rollout in Chile and the operational testing underway in North America and the U.K. as well as our deployment of smart assets globally.

In Chile, we have fully serialised our pool and refined our operational approach, driving efficiencies through automated in-line tagging. We have also introduced an effortless service model that eliminates major friction points such as pallet declarations and audits. We've been very encouraged by the positive customer response with more than half our customers in Chile having transitioned to this new model with remaining customers expected to convert by the end of this calendar year. Importantly, learnings from this market had evolved our understanding of the full value potential of Serialisation+, which we have captured in a value score card that I will outline shortly.

In North America and the U.K., we have added service center infrastructure, explored the best tagging approach and developed auto-tagging technology specific to each market's requirement. We have developed and are currently testing a lower cost tracking device that has the potential of supplementing visibility and depth of insight from our current autonomous trackers in a more capital-efficient way. Throughout this operational testing, we have been taking learnings from Chile and continuing to evaluate the optimal technology mix, investment requirements and potential benefits of operating a serialised pool in North America and the U.K.

Lastly, we have continued to scale smart assets globally, expanding their scope and deepening our use of insights from this technology. These smart assets have enabled increased visibility and control over our platforms, improved our understanding of the cost to serve, and we're exploring the potential to use these insights to create a simplified offer for smaller customers, opening new opportunities for collaboration and growth.

Turning now to insights from Serialisation+ in Chile. This slide shows the value scorecard for Chile, which is guiding our efforts as we prove the full value potential of Serialisation+. As you can see, we have identified 5 key potential value pools each with specific sources of value that we have either already identified or will test and prove out during FY '26. Starting with customer experience. We have made significant inroads with the launch of our effortless service offer. We have clear examples of reduced administrative burden for the customer as serialised data and insights eliminate the need for pallet declarations and audits. We have also proven a significantly simplified billing model with 1 example seeing customers shrink their invoice from 12 pages to 4.

Examples like this are supporting our overall customer experience with further potential to improve NPS and long-term relationships by shifting our relationship with the customer to one that's focused on growing shared value. In Chile, the effortless service offer has also delivered growth benefits with 3 customers having returned to us or converted to CHEP based on the effortless service offer promise. As we look ahead, the increased visibility of Serialisation+ could increase our addressable market by illuminating new lanes. In addition, we expect to develop a more accurate understanding and visibility of pallet dynamics across different segments, grounded in specifics rather than averages, generating valuable insights for existing customers while also expanding the universe of commercially viable lanes.

Serialisation+ also delivers benefits across pricing and asset productivity. Smart asset insights allow us to identify and monetize reuse as well as noncompliant flows and unauthorized exchanges of our pallets. In asset efficiency, we've been able to identify and mitigate sources of loss. However, the real value potential lies in using Serialisation+ insights to focus on identifying sources of inefficiency and collaborating with customers to solve cycle time and demonstrate challenges and to optimize their cost to serve. We see immense potential for our customers and us from this collaboration.

Furthermore, we see significant opportunities from equipping our supply chain teams with granular insights to reduce the cost of our operations, which we are yet to test. With this framework in place, we will systematically test these initiatives and our focus in FY '26 will be to move from insight to action across the value scorecard, explore opportunities for more dynamic pricing and determine how to deliver the effortless service offer on a global scale.

Looking now at the learnings from FY '25, which are also informing our areas of focus in FY '26. As we progress, we are continually building on valuable areas of learning across both operations and technology. Our biggest learning to date is that we can start generating valuable customer insights from our tech pallets only after the read infrastructure is in place. This has prompted us to take a different path in the U.S.

Rather than running investments in read infrastructure and tagging in parallel, we have rephased our plan to prioritize investment in read infrastructure, which will materially reduce our time to value, avoid operational cost of replacing damaged tags, while we're still putting a read infrastructure in place. And create opportunities to improve the performance of the tag while bringing the cost down as this is the predominant driver of CapEx.

Our second set of learnings has come as we continue to refine our approach to tagging. We now have automated taggers for each market that will allow us to scale at pace. Similarly, we have developed the technology to tag for each market, adapted for performance in local conditions. Finally, we have uncovered specific challenges in our current approach in the U.K., whereby the movement of our pallets back and forth between customers without returning to a service center reduces the insight available from our data.

We have identified an alternative approach involving a higher device density created by supplementing insights from our current autonomous trackers with a lower cost option. Given these learnings, we have identified separate paths for North America and the U.K. In North America, we will implement read infrastructure to cover 2/3 of asset flows in FY '26 while improving operational performance, and we'll continue to evaluate the optimal technology mix and investment required to serialise the pool in this market.

In line with our disciplined approach to capital allocation, we continue to target a ROCI hurdle for Serialisation+ investments of at least 15% once the market pool is fully serialised. The U.K. plan is different. During FY '26, we will test a lower cost tracking device to both test the viability of capturing the data required to build complete Serialisation+ insights and to explore the broader benefits of a mixed approach with lower cost devices complementing our current autonomous tracking devices.

Consequently, we'll be selective with further infrastructure investments and tagging until this trial is complete. Looking ahead to FY '26. We expect sales revenue growth of between 3% and 5% through a balanced contribution from net new business wins and price. The lower end of our sales revenue growth is below our investor value proposition of a mid-single-digit increase in revenue.

This reflects uncertainty about the macroeconomic environment which could continue impacting consumer demand and in turn, our like-for-like volumes in FY '26. As you can see, this potential challenge to revenue has not impacted our expectations for strong profit growth and continued margin expansion, with underlying profit growth expectations of 8% to 11%. We also expect to deliver strong free cash flow before dividends in the range of USD 850 million to USD 950 million.

Finally, we are pleased to announce an on-market share buyback in FY '26 of USD 400 million. The Board has determined this to be the appropriate amount for FY '26 given the expected levels of surplus capital available and will be subject to market and other conditions customary for a buyback.

With that, I'll hand over to Joaquin to go through the financials and more details on our expectations for FY '26.

Thanks, Graham, and good morning, everyone. Before diving into the details of our FY '25 financial performance, I wanted to touch on the key drivers of the result as these will be recurring themes as we move through the slides that follow. In line with Graham's comments, the key drivers of our FY '25 financial performance were volume growth of 1%, which reflects the strong momentum with new customers in key markets that helped to offset the impact of macroeconomic headwinds on demand from existing customers, particularly in the second half of the year.

Our ongoing focus on productivity improvements across asset efficiency, supply chain and overheads, which delivered strong operating leverage with underlying profit growth of 10% and margin expansion of 1.3 percentage points. Our initiatives to improve asset efficiency, combined with improved overall pallet market conditions, continued to reduce the capital intensity of our business. In FY '25, we saw a 45% reduction in uncompensated losses resulting in an $86 million reduction in the IPEP expense. And further improvements in our pooling CapEx to sales ratio, which reduced to 12.3%.

This improvement in capital efficiency was also the key driver of the strong free cash flow generation of over $1 billion. Collectively, these outcomes saw us deliver on our investor value proposition, generating total value creation for shareholders of 17% with EPS growth of 14% and a dividend yield of 3%. The strong FY '25 performance is testament to the progress of our transformation program and the business' ability to deliver on the items within its control.

Turning to Slide 15 and an overview of our full year results. On this slide, I wanted to call out the key drivers of our profit after tax and EPS performance, as I will cover revenue and underlying profit in more detail in the slides that follow. Profit after tax from continuing operations increased 13%. This was ahead of the 10% growth in underlying profit due to the reduction in net finance costs, which more than offset the higher hyperinflation charge and tax expense during the year. The 6% decrease in net finance costs reflected lower average borrowings supported by strong cash flow generation and the proceeds received from the sale of CHEP India in January 2025.

While tax expense increased 7%, our effective tax rate fell by 1.2 percentage points at an actual FX rates to 29.5%, reflecting the geographical mix of earnings. Profit from discontinued operations totaled $31.8 million for the year, primarily relating to the gain from the divestment of CHEP India. EPS from continuing operations of 14% included a 1 percentage point benefit from the FY '25 share buyback program, which reduced the number of shares issued. Importantly, our continued capital allocation discipline and our focus on driving productivity resulted in ROCI increasing 1.4 percentage points to 21.9%.

Moving to Slide 16. Group sales revenue increased 3%, coming in slightly below our FY '25 guidance of 4% to 5% growth. This was due to the impact of the challenging macroeconomic environment on like-for-like volumes with net new business and pricing in line with our expectations. Price realization was 2%, both for the full year and the second half, reflecting the recovery of cost to serve increases driven by inflation. This increase was partially mitigated by improvements in asset efficiency, which reduced the level of price increases required to recover the cost to serve.

Net new business growth was 2% for the year, led by strong contributions from the CHEP Americas and the CHEP Asia Pacific segments with additional support from the European pallets business. We saw increased momentum towards the end of the year in key markets with fourth quarter net new wins in the U.S. and European pallet businesses growing by 4% and 2%, respectively. This highlights our strong value proposition relative to the whitewood alternative and the tangible improvements we have made to the customer experience.

Like-for-like volumes decreased 1%, impacted by challenging macroeconomic conditions in key markets, the timing of U.S. harvest season and the normalization of the average pallets-on-hire in Australia. These factors were partially offset by the benefits of cycling inventory optimization in FY '24.

Turning to Slide 17. Looking at the key drivers of our underlying profit performance. Sales revenue contributed $148 million to profit growth. While North American surcharge income decreased $23 million in line with movements in market indices for lumber, transport and fuel during the year. Plant and transport costs collectively rose by $99 million despite savings of $207 million delivered through supply chain productivity initiatives focused on reducing transport miles through network optimization, driving continuous improvement through operational excellence, and optimizing procurement across our operations. These savings were more than offset by input cost inflation of $87 million, additional repair, transport and storage costs due to higher damage rates and excess plant stock in the U.S. and incremental investments to support quality, asset efficiency and digital initiatives.

These investments in asset efficiency and digital initiatives combined with improved pallet market conditions were key contributors to lower loss rates across the group, which drove the $86 million IPEP expense reduction in FY '25. Lastly, other costs decreased $24 million with overhead cost management and early benefits from productivity initiatives, more than offsetting wage inflation and an $11 million in incremental Shaping Our Future investments, primarily relating to the digital transformation. For more details on the Corporate segment, please refer to Appendix 5E.

Turning to Slide 18 and the key drivers of our underlying profit margin performance. At our Investor Day in September 2024, we outlined our target to deliver at least 2 percentage points of margin expansion compared to FY '24 by the end of FY '28. And as you can see on this slide, we had a strong start to delivering against this target, achieving 1.3 percentage points of margin improvement this year. There were several key drivers contributing to our performance, which I'll cover now.

Starting with asset efficiency and the IPEP to sales ratio, which halved from 2.8% in FY '24 to 1.4% in FY '25 and contributed 1.4 percentage points of margin improvement in the year. This improvement is well ahead of the 0.5-plus percentage points target we had set for FY '28, reflecting a faster-than-expected realization of benefits from enhanced commercial frameworks, deeper collaboration with retailers and expanded asset recovery capabilities we have built through transformation and enabled by digital initiatives. These have structurally improved asset control across the group. And in the absence of further advancements in digital initiatives such as Serialisation+, we believe them to be fully mature as indicated on the slide.

Moving to overhead productivity, which delivered 0.8 percentage points of margin improvement in FY '25. While this is also ahead of the 0.5-plus percentage point target we set for FY '28, we see further opportunities to deliver efficiencies by streamlining our operations to better utilize existing resources and using technology to improve processes and support broader cost control initiatives.

Finally, supply chain productivity, as measured by our plants and transport cost to sales ratio was a 0.9 percentage point headwind to margins despite significant savings delivered this year. That said, the table on the left shows a clear improvement in supply chain performance in the second half as increasing benefits from supply chain initiatives minimize the margin impact as the year progressed. With an early maturity stage, supply chain productivity has the most runway left and we expect it to become a positive contributor to margin expansion from FY '26 onwards.

Turning to Slide 19. Considering the asset efficiency improvements already achieved and opportunities across supply chain and overheads. We now expect to deliver at least 3 percentage points of margin expansion by FY '28 compared to the FY '24 baseline. An increase of 1 percentage point compared to the previous target. We expect supply chain productivity to be margin accretive from FY '26, supported by ongoing benefits from network optimization, operational excellence, procurement and automation initiatives.

As we progress towards FY '28, we expect further margin improvements as the cost headwinds linked to U.S. excess plant stock are no longer in place and digital insights become a key enabler of further efficiencies across our operations. In asset efficiency, we expect to maintain the structural reduction in uncompensated pallet loss rates. However, we do expect the IPEP sales to increase to approximately 1.6% in FY '26 and remain around these levels through to FY '28, driven by an increase in the FIFO cost of pallets written off. And in overhead productivity, we have identified restructuring opportunities in FY '26 that are expected to deliver a net benefit of $15 million in the year with the full benefit of $55 million expected to be realized in FY '27.

Turning to Slide 20, which shows the impact asset efficiency improvements have had in reducing the capital intensity of our business. As shown through both the IPEP to sales ratio reduction I mentioned earlier and the group's pooling capital expenditure to sales ratio, which improved by 0.7 percentage points to 12.3% in FY '25. 0.4 percentage points of this improvement was related to sales revenue growth, with the balance driven by lower capital expenditure despite a 1% growth in volumes.

On an accruals basis, capital expenditure decreased $20 million year-on-year as a $45 million benefit from the lower capital cost of new pallets was partially offset by the impact of 1 million additional new pallets purchased this year. This increase in pallet purchases was driven by volume growth and the impact of cycling a higher capital expenditure holiday benefit in the prior year, driven by inventory optimization. These impacts were largely offset by asset efficiency initiatives which recovered an additional 9 million pallets in FY '25 that would have otherwise needed to be replaced.

In the current year, the capital expenditure holiday was limited to the U.S. where the business continues to carry excess plant stock levels, while the prior year also included a CapEx holiday in Europe. FY '25 pooled in capital expenditure to sales ratio includes an approximate 0.5 percentage point benefit from utilizing excess plant stocks in the U.S. with a similar percentage point benefit also expected in FY '26 in line with continuing to utilize excess plants.

Moving to Slide 21, these asset efficiency improvements, combined with higher earnings and lower financing and tax costs supported strong cash flow generation with free cash flow before dividends increasing by $212 million to $1.095 billion in FY '25. Capital expenditure on a cash basis decreased $204 million year-on-year, supported by asset efficiency gains, lower capital cost of new pallets in the current year and the timing of pallet purchases in the prior year.

Financing and tax cash payments were lower year-on-year, primarily driven by the timing of Australian tax installments and timing of interest payments following the maturity in issue of European medium-term notes. These benefits offset $30 million in adverse working capital movements, which were driven by natural variations in creditor payments, and a $61 million increase in other cash movements, largely related to provisions for employee benefits and increased spend on intangible assets, particularly technology initiatives aimed at enhancing customer experience, digital capabilities and supply chain activities. Importantly, excluding the CapEx benefit from utilizing excess plant stocks in the U.S., free cash flow after dividends would still be over $1 billion, reinforcing the strength of our underlying cash flow performance.

Turning to Slide 22 and looking at our regional performance, starting with CHEP Americas. The Americas segment delivered sales revenue growth of 4%, with a balanced contribution from both volume and price, reflecting new customer wins in the pallet business and recovery of cost to serve increases across the segment. Margins improved by 0.5 percentage points, supported by significant gains in asset efficiency and productivity across supply chain and overheads. These benefits more than offset incremental costs related to repair, transport and storage, largely stemming from higher damage rates in the region and excess plant stock in the U.S. due to the prior year inventory optimization.

These benefits also enabled the investments to enhance customer experience, including quality improvements and digital investments such as Serialisation+. ROCI increased 0.2 percentage points as profit growth more than offset a 5% increase in average capital invested driven by pallet purchases to support volume growth in Latin America and increased service center lease costs in the region.

Looking now at U.S. pallet revenue on the next slide. The U.S. pallets business delivered increased revenue growth of 3%, supported by price realization of 2%. Price realization was aligned with cost to serve as contractual pricing to recover input cost inflation was partly offset by lower contributions from asset efficiency linked pricing, reflecting improved loss rates during the period.

Net new business volume growth of 2% was largely driven by small to medium enterprises and produce and beverage sector transitioning from whitewood to our share and reuse solutions. This momentum accelerated in the fourth quarter of FY '25 with net new business growth reaching 4%, supported by enhanced sales capability and digitally enabled initiatives that simplified and improved the customer experience. The strength in net new business wins helped offset a 1% decline in like-for-like volumes due to macroeconomic headwinds in the second half of FY '25 and the impact of an earlier U.S. harvest season, which shifted produce volumes into the fourth quarter of FY '24, impacting growth in the first quarter of FY '25 and creating a stronger comparative base for the fourth quarter of FY '25. These headwinds more than offset the benefit of cycling inventory optimization from the prior year.

Turning to the CHEP EMEA region. Revenue increased 2% with both price realization and net new business wins each contributing 1%. Net new business wins were primarily driven by the European pallets business with additional contributions from the RPC and containers business. Like-for-like volumes remained flat as the impact of challenging macroeconomic conditions on European pallets and the automotive business offset growth with existing customers in Africa and the benefit of cycling inventory optimization in FY '24.

Underlying profit increased 14%, with significant margin expansion of 3 percentage points driven by asset efficiency, supply chain and overhead cost savings. These gains were partly offset by inflation and investments in customer experience and asset efficiency initiatives. This strong profit performance, combined with asset efficiency benefits drove a 3.6 percentage point increase in ROCI this year.

Moving on to CHEP APAC, where we delivered revenue growth of 3% and primarily driven by price realization of 4% to recover cost to serve increases and the impact of customer mix. Volumes declined 1% as new business growth of 2%, reflecting contract wins across Australia and New Zealand pallets and RPC businesses helped offset a 3% decline in like-for-like volumes. This included the impact of lower daily higher revenue in the pallets business as the average number of pallets on higher normalized from peak levels in the first half of FY '24. Underlying profit margin improved 0.4 percentage points at actual FX rates. As supply chain and overhead cost savings were partially offset by inflation and increased repair, handling and relocation costs associated with higher pallet returns. ROCI increased 1.1 percentage points as profit growth more than offset a 1% increase in average invested capital.

Turning to our outlook considerations for FY '26. We expect sales revenue of between 3% to 5% and with a balanced contribution from volume and price. Price realization is expected to be in line with both cost to serve increases and the level of growth realized in FY '25, while volume growth will be driven by net new business wins across key markets. Given the current macroeconomic uncertainty, we anticipate a slight decline in like-for-like volumes, though, as Graham mentioned, this may vary depending on how the macroeconomic environment develops throughout FY '26.

We expect underlying profit growth to be between 8% and 11%, supported by continued momentum in supply chain and overhead productivity initiatives. Margin expansion is anticipated across the group and all regions. As outlined earlier, IPEP to sales is expected to increase to approximately 1.6%, primarily due to the higher FIFO unit cost per pallet. While we expect to see improvement in the overhead to sales ratio, FY '26 includes overhead restructuring costs of approximately $30 million primarily incurred in the first half of FY '26 and expected to deliver a net benefit of approximately $15 million in FY '26 with the benefits weighted to the second half of the year. These changes are expected to deliver an annualized benefit of approximately $55 million in FY '27.

Moving to Slide 27. In FY '26, we expect to deliver free cash flow before dividends of between $850 million and $950 million with a pooling CapEx to sales ratio of approximately 14% to 16%, which includes a 0.5 percentage point benefit from utilizing excess pallets in the U.S. Nonpooling capital expenditure is expected to be between $250 million and $300 million including digital investments of $90 million, primarily related to Serialisation+ as well as supply chain investments relating to automation and quality enhancements.

Dividends are expected to be franked at 20%, which is a 10 percentage point down from the current 30%. And in FY '26, quarterly sales trading updates will be discontinued. Lastly, in summary, I would like to reiterate our commitment to our investor value proposition, which you will see on the left-hand side of the chart. Reflecting on FY '25, we are pleased with our performance, which reflects meaningful progress across key areas of our business, underpinned by the Shaping Our Future transformation program. While the macroeconomic environment remains challenging, we are continuing to deliver and focus on the items we control, which is delivering net new business wins, enhancing productivity and realizing efficiency gains.

These actions are supporting the operating leverage across the group and underpinning strong sustainable free cash flow generation. Combined with our strong financial position, this has enabled us to announce further capital management initiatives in FY '26, consistent with our investor value proposition and focus on shareholder value creation. We exit FY '25 with positive momentum across the business, reinforcing our confidence in the outlook for FY '26. I will now hand over to the operator for Q&A.

[Operator Instructions] Your first question is from Andre Fromyhr from UBS.

My first question is for Joaquin and making reference to the free cash flow bridge on Slide 21. Can you just expand a bit on the impact of the $173 million reduction in CapEx creditors. Are you suggesting that, that amount was sort of extra paid versus CapEx during the period in which case, if you normalize for timing, it would look -- the free cash flow would look better. And is that relative -- is the timing impact of that -- something that sort of we would compare with last year? Or is it something that sort of pushes into FY '26?

Andre, thanks for that. Yes, just to answer your second part first. It's something that relates to the prior year. So you don't need to push that into FY '26. Essentially, what it relates to is just the timing of fourth quarter pallet purchases. So in FY -- in FY '23 or the fourth quarter of '23, we purchased pallets when the capital cost of a pallet was increasing significantly, and we also had much higher loss rates. And then you obviously pay for those in FY '24. And then in FY '24 fourth quarter, you had the reverse where pallet prices had come down and we'd improved our loss rate. So it's essentially just a timing issue between those 2 years. And then as we move into FY '26, things go back to normal.

Okay. Great. And then my next question was just about Serialisation+. I appreciate the sort of extra details shared on that opportunity today. I'm just curious, have you narrowed down into what the scale of these investments would be if you were to roll out, say, a U.S. model at scale and how soon are we to hearing some decisions around that?

Perhaps I'll take that one as I'm totally unqualified to talk about CapEx creditors, so I'm glad Joaquin took that one. So I think we are increasingly confident based on what we see in Chile that Serialisation+ is going to work for us. And that's why we've made the sort of, call it, no regret decision to invest in the read infrastructure in the U.S. I think a bit that's trickier for us to finalize at the moment is the mix of technology that we're going to use when we fully serialise a pool. So that's what I mean by that is we're continually refining and improving the performance of things like the auto taggers, the taggers themselves. The technology is changing quite quickly at the moment. So what we've realized is that actually the fastest way to get value is to do the infrastructure because whatever the form of the tag, you still need to be able to read it.

So by getting 2/3 of the flows covered in '26 in terms of read infrastructure, when we then proceed with whatever the tag form is, we'll get that value much quicker. So let's -- for the sake of argument, assume then that's '27, '28 type of time frame. That's why we're doing what we're doing. So I think the sort of the direction of travel is clear. We definitely want to do this. We think there's value. Being able to put a number on it is hard at the moment because as I said, the technology is changing, we haven't finalized the technology mix or the type of technology for sure that we're going to use. So I think it's premature to do that.

And I think what we then say is 2 things perhaps in order to set boundaries there. One is any investment we make, we still are expecting to get 15% plus in terms of return. And secondly we'll keep the market informed as we progress through the year. So we will keep updating people. I would then go back to what we said about Chile. What we've seen from Chile is very encouraging. And that's why we're sort of very happy to make those investments in FY '26 in the read infrastructure in the U.S.

Great. If I can just sneak one more in and maybe this is back to Joaquin specifically on the new margin target with the 3 percentage points expansion. Is it fair to assume that, that 1.6% IPEP to sales that you've guided to for next year is sort of -- that's the stable view as part of that 3 percentage point expansion?

Yes, that's right, Andre. That's -- we expect it to broadly be that same percentage out to FY '28.

Your next question is from Justin Barratt from CLSA.

I was interested if you would be willing to share a bit more about the new wins that you've got in the U.S. and Europe. Keen to understand how has that come from 1 or 2 key customers? Or has it come from quite a few more than that? And are the new wins with, I guess, existing customers in new lanes or new products? Or are they completely new customers?

Thanks, Justin. So let me give a broad answer to that. So I think the key things to say are the majority of them have come from converting current whitewood users onto blue. So it's not about a big share -- a market share movements between us and our competitors, our pooling competitors. And then when we look within those whitewood conversions, a lot of them are coming from SMEs, food, beverage, other sort of fast-moving consumer good type categories, converting on to blue for all the reasons that we've always said were the benefits of using a pooled solution.

So if you look at the lifetime cost analysis, if you look at the sustainability benefits, all the sort of reasons you would expect. There is also an element where we are -- for a couple of reasons. One, that we've got much better visibility of what's happening in this -- what work could be defined as higher-risk lanes but also, again, our customers wanting to have 1 type of pallet rather than using whitewood and pooled within their own operations. We are seeing some lanes convert from whitewood to blue within some of our bigger customers. So those are the ones which in the past we would have classified as MPD channels, and we would have charged a premium for, we can now because of the better understanding and lowering of the cost to serve, those become more attractive to our customers to switch to blue. So it's a mixture, but I would say the majority are whitewoods users in those SME categories who are switching. There are some bigger customers switching as well, but the majority is the whitewood SMEs.

Fantastic. And then the other one I just wanted to ask is you're planning or I think you can get an annualized benefit from an overhead restructuring of $55 million, which is quite a significant number, I think. So I just wanted to understand or ask if you're willing to share a little bit more about what that planned overhead restructure includes?

Yes. So -- if you look at the quantum of dollars, it sounds like a lot, but it's about 4% of our overhead base. So I just want to put that into context, and this is not some massive restructuring. It is about head count reduction, and it's in response to a couple of things. I think 1 is if you look at our head count over the last 3 or 4 years, it's gone up a lot because we've invested in, in things around the transformation, so digital capability, project management capability. And we always said when we started Shaping Our Future that at some point, we would scale back on that as we started delivering on the transformation, so it's partly that.

And the other part is, I think it's incumbent on us to recognize that if volumes are going to level off and be a bit more difficult to predict, it's much better for the organization to make some tougher decisions now and be fit and lean for the future than doing it waiting 6 months and having to do much tougher things in 6 months' time than doing them now.

And I think our customers would expect us to do that. We all know that the brand owners and retailers are facing a tough time at the moment. And so it's much more sensible for us to be able to say to them, look, we are taking self-help here. And that's why you don't need to be coming after us aggressively because we are trying to do our best to help you keep your cost down by lowering our own costs. And I think that's sort of the other element to it.

Your next question is from Jakob Cakarnis from Jarden Australia.

I'll just direct the first one at Joaquin if I could, please, specifically focused on Slide 23 for the U.S. pallets business. At the third quarter trading update, you told us that the U.S. pallets business was doing constant currency revenue growth around 4%. At the full year, you've told us that's 3%. That gives me an implied flat fourth quarter. And if I work through the individual items that you've disclosed on Slide 16, you tell us net new wins contributed 4% in the fourth quarter. That gives me declines of around 3% for like-for-like volumes versus where you were run rating for the 9 months. But also interestingly, price looks like it's down 1% in the fourth quarter on the information that you've disclosed on Slide 23. Can you just flesh that out for me, please? I appreciate you're going to say some of this is rounding, but I'm just interested in how you've exited particularly on like-for-like volumes and that pricing item, please.

Thanks very much. And yes, I was a bit worried when you said you're going to target me, but that's a fair question. So look, I guess what I'd say is a little bit of what you said about rounding, and it's a little unfortunate. But I think when you look at like-for-like volumes in the fourth quarter, they were down a little less than the number you quoted. And then I think when you look at pricing again, I think it's important to understand the cost to serve here. So we've talked a lot about sharing the benefits of asset productivity and incentivizing customers on asset productivity to help us there. So although that is a headwind to price realization and has offset inflation, the benefits come through operating leverage.

Okay. So then the sources of operating leverage for FY '26 your guidance narrows the spread of that operating leverage. So in FY '25, you delivered a spread of 7%. The guidance gives us a range of kind of 5% to 6%. You've told us that IPEPs lessening as an incremental contribution. You've told us that price is probably lessening as an incremental contribution. And you've just told me then that you've exited fourth quarter with some softer like-for-like volumes. So outside of cost reductions, how do we think about the natural leverage in the business, please?

Yes. So I think a couple of things I think about it. At a group level, we've again guided to a price realization broadly the same as FY '25. So again, we're committed to that recovery of cost to serve, and we continue to be in an inflationary environment. And I think that was the importance of Slide 18 that we put in about underlying profit margin, and it's in line with what you said that, obviously, asset efficiency, and we put in those maturity levels to say, look, we think until there's a step change in digital or we roll-out for S+, then the benefits from asset efficiency are probably maximized. But then you can really see the opportunity both in overhead productivity and supply chain productivity.

And we broke it down by half, so you can see the acceleration in those benefits. So overhead went from 0.5 point to 1 point improvement in the second half. And supply chain productivity, while a headwind, that headwind reduced from 1.6% to 0.2%. So the sources of operating leverage as you move into FY '26 are really going to come from productivity improvements.

Okay. And then one for Graham, if I could please. Slide 28, you reiterate the investor value proposition at the top there. You say that sales revenue is going to be mid-single-digit growth. If I go to the annual report on Page 67, there's been what looks like a change to the lower bound of your sales revenue CAGR LTI. The ROCI obviously has increased. It seems like it's where you are, but the sales CAGR that you're investing on the low end is now 3%. I think previously that was sitting around 5%. Can you just explain to me how the comp structure is congruent with what you've reiterated as the investor value proposition on Slide 28, please?

Not straightforward. I mean I think that's -- and that is something we -- because also, if you look in that REM report, there is a paragraph which suggests that we're going to really look at it over the next 12 months because it's diverging from what we're trying to do with the investor value prop. I think the one area where I think if you look at the revenue grid, that is actually now much more aligned with the investor value prop than it was in the previous versions where, in fact, I think the revenue was going from 2 to sort of up to 7 at one point. And I think what we've tried to do is say, okay, let's recognize that we need to get the revenue more aligned with what we think is happening and the investor value prop.

And on the ROCI side, it's not really where we want it to be, but we can't go to the market with lower targets on ROCI's. So we think it's time now to really think about the whole structure of the LTI and have it much more aligned with both revenue growth, operating profit leverage and cash generation rather than just looking at ROCI. Because if you can imagine trying to continue to increase ROCI is actually not the right message when you're trying to invest in the future and things like Serialisation+. So that's something we'll look to change over the next 12 months and go back, obviously, to investors with that.

Yes. Sorry, just to be clear though, the FY '25 to '27 sales CAGR used to be 5% to 9%, you've instructed the market. And from what I can tell, consensus is kind of taken your investor value summary as kind of gospel for its forward forecast. Then in this year's recap for '26 to '28, the low end is 3% sales CAGR up to 6%. It seems quite a large shift is all I'm highlighting there.

I don't think it is because if you think that -- if you look at the midpoint of 3% to 6%, that's kind of where the investor value prop is saying we want to be. So if anything, we've tried to get the revenue grid more aligned with the investor value prop this time around. And you could argue that last year, it wasn't. But that -- but I think you've got to understand a little bit where these LTI grids, what drives them, and it's driven largely by a feeling that you can never go backwards year -- when you change it from year to year.

So at some point, if you're having good years, they keep on getting stretchier and stretchier and stretchier. And actually, that starts becoming unaligned with reality. I think that's what we're trying to address now and say, our investor value prop is really, really clear. It's mid-single digits, and we want everyone to understand that and realize actually, that's quite stretching in the very short term, given what's happening with the macroeconomic environment. But we think that, that is the right place to set it, not going up to the 5%, 6%, 7% because that clearly is not in line with what we're saying in terms of the longer-term view on revenue growth.

Your next question is from Anthony Moulder from Jefferies.

If I could start with IPEP, famous topic. IPEP as a proportion of sales is going higher in FY '26. I understand that drove a lot of that benefit through FY '25 was higher compensated losses. Why isn't that structural that you get a benefit continuing through FY '26, please?

Anthony, I'll take that one. It's Joaquin here. It's really just a function of pallet write-off costs or FIFO values. So obviously, we -- as lumber inflation has increased in the past, as we write-off pallets, they're more expensive. So it's not a sign that we're going to lose more pallets. It's a sign of the FIFO value.

That FIFO value was increased into the future as well though, right?

That's right. So in effect, as you move out to FY '27 and '28, we expect to lose less pallets to compensate for the increase that we're going to see in FIFO. But don't forget also that revenue grows. So that's why I think a percentage of revenue is a fair way to look at it.

Sure. But it's also higher. You're still expecting a similar level of compensated loss as you achieved in FY '25.

Yes. So I think what we're -- that metric is uncompensated losses, Anthony. So exactly right, if we were going to get less pallets compensated, then they would fall into that uncompensated metric.

Okay. Can I follow on from Jak's comment about revenue growth and obviously, stronger growth in net new wins exiting FY '25. That seems cautious on the outlook at that lower end of sales revenue growth at 3%. Are you seeing something more difficult through the operating environment through FY '26 that gives a bit more caution on that lower end of the revenue growth rate that your forecasting for FY '26, please?

Anthony, it's Graham. So I think that's -- I mean, that's a very fair, I think, analysis of our mindset. And let me just try and put it into context a little bit. As you know, we don't have a 12 months forward visibility of what our customers are thinking, number one. And secondly, I think there's an element of people's mindsets are always conditioned a little bit by what's happening to them in the moment. And at the moment, the conditions in most of our markets are from a consumer demand perspective are pretty challenging. Now I think the performance we've delivered in the last quarter is actually pretty good when you look at some other companies in sort of adjacent types of industries. But I think everyone is thinking it's quite tough out there.

Now my view is that, yes, it is, and therefore, we should plan for the worst, but expect or hope for the best. And I think that is -- that's sort of a justified view because -- or position to take because we went -- got into difficulty or tougher conditions quite quickly, and I think it could actually change quite quickly as well. So our comments around it depends a little bit on what the macroeconomics do over the course of FY '26 are to try and to reflect that and say, based on what you can see today, you would be relatively cautious, but it could change quite quickly. And therefore, I would agree with you that we're being -- we're guiding towards the bottom end of what we think is likely. But I mean, if anyone can predict what's going to happen with macroeconomics globally at the moment, then they're a better person than me. So I think it's a tough one to call at the moment.

Fair enough. And if I take from that, that it's more likely to see stronger growth in this business relative to -- in the second half relative to the first half?

Well, I think if you just look at the comps, you would probably say that anyway. So that's a fair statement.

Last one, if I could. Asset efficiency has been a focus for a long time, of course. But if I look at pre-COVID levels of number of pallets in the pools around the world and maybe a maybe an unfair comparison for EMEA given that set volume growth, but if we look into the U.S., there's a lot more pallet still in the business through the Americas than what there was in FY '19.

Adjusting for the fact you're still carrying 4 million extra pallets in that -- in the U.S. market. And obviously, volume growth hasn't been strong through that part of the world. How should we think about the number of pallets needed in an optimized pallet environment, optimized asset efficiency environment given that high level of pallets relative to fiscal '19, please?

Yes. So I think, Anthony, we are making good progress on asset productivity, as you mentioned. I think the thing here is different sectors that we might play in may have different cycle times. And obviously, we price accordingly for that. So at times, you're going to see variations or the number of pallets as you just mentioned because some customers may have a longer cycle time. And a good example of that is what we've been seeing in the Australian market where customers and retailers held higher inventory levels for a period of time. And then we saw that unwind. And that was different to what we saw in Europe and the U.S., which unwound earlier. So I think for me, that's where the benefits of our business of the digital initiatives that we've got underway, the autonomous tracking devices, Serialisation+, et cetera, really help us be able to improve cycle time as we look out.

So new customers effectively have a longer cycle time and that's why we're not seeing that reduction in a key market like the Americas?

I would say it's just customers. I wouldn't say that was just necessarily new. It depends. You might have an existing customer that moves into something different. I think also one of the real benefits of the investment in asset productivity in digital is that what we may have considered high-risk lanes before are now not high-risk lanes and open up new opportunities to us.

Yes. Okay. And lastly, just a question on the reasoning behind not giving a quarterly trading update since I would have thought it was useful to continue release the quarterly trading update first and third quarter?

Yes. Look, I think, Anthony, it's really what we said in the ASX release that when we release reporting, we really want to make sure it's meaningful and helps the user. And I think the challenge when you look at revenue is it's not a good view of our financial performance in general, particularly in a situation where we were just touching on the U.S. where you're sharing asset productivity benefits with customers and that moderates revenue. So what we found is that it's in a way, people were getting the wrong idea from our quarterlies. And so we think it's much better to be able to give fulsome information, which is the full P&L and cash flow. And hence, we've decided to go for the halves.

Your next question is from Matt Ryan from Barronjoey.

I saw that the pallet salvage went up again to $25 million. So just trying to get some thoughts on, I guess, whether there's any form of natural cap or it just seems like a number that keeps exceeding, I guess, in a positive way for you guys?

Yes. I think, look, Matt, we have a range of initiatives that in asset productivity, I don't think what we've been -- had an upside surprise on is the benefits that we're getting from those initiatives. So I think one thing in particular that's really helped us is we've been using machine learning to be able to better target collections and also leveraging that autonomous tracking data for locations, where pallets might be. And obviously, the more data we're putting through that model, the better the accuracy of that model is, and that's really those algorithms have really improved our collections. But we continue to target improvements, but what that improvement might be is hard to predict.

I guess if we're linking that benefit to, I guess, data analytics, et cetera, and your -- you seem to be, I guess, reaching an inflection point with Shaping Our Future in regards to more investment in the Northern Hemisphere, presumably, we could sort of be at the earlier stages of where that could get to? Is that a fair comment?

I mean I think -- I mean, yes, is the short answer to that. But if I just go back to Joaquin's slide with the maturities. I think what we're saying is until we see a significant step-up in our insights from data when we do a Serialisation+ on, for example, the North American market, we shouldn't really expect to see a big step change. But in the future, that is something that without wanting to commit to it, we are hopeful that, that will give us -- be able to move on another level. And there's no reason to believe that's not going to be the case.

And just a last one. Just hoping if you could give us some thoughts on I guess, the longer-term like-for-like environment. We've got negative numbers coming through at the moment, but we know that your business model sort of caters to products that are a little bit less discretionary in nature or more stable. So I think it's what you've talked about in the past. So I guess if we look back through history, can you give us any guide on, I guess, what's a reasonable length of time that these types of numbers can be incurred negative for?

Well, I mean, I think the obvious time is to look back are things like '08, '09. And it -- I mean, I think it's very -- I mean, I am not a leading world expert on macroeconomics, so I don't -- I definitely don't want to make too many stupid statements here. I mean, in the past, it could be 24 months. It could be up 36 months. That's what -- it's been that sort of time period. But I do think what we're facing at the moment is somewhat unusual when you think about how it's being driven by 1 person and their tweets and other statements. So I think it's quite difficult to predict.

But fundamentally, you are correct in that what goes on our pallets tends to be food, beverage and fast-moving consumer goods. And one would assume that after a period of time, unless there is a prolonged global recession, which I don't think anyone is calling at this stage, then we should be seeing below single-digit like-for-like growth were, I think, in a very, very good position to continue converting whitewood uses into our own pooled solution and then a little bit of pricing to recover cost to serve. So that gets you back not quite -- it's comfortably back into that mid-single-digit revenue growth proposition.

Your next question is from Owen Birrell from RBC.

Just a couple of questions from me. Just the first one first. Just wanted to step back to the fourth quarter of '25. Based on the guidance that you provided in the third quarter trading update, it was suggesting a much stronger fourth quarter. And based on what you've revealed today, you effectively sort of had a small miss to that outcome. I just want to get a sense as to what happened versus your expectations in those last couple of months in the period, particularly across the areas where you have a bit more control, i.e., price and net new business wins.

Owen, it's Joaquin here. Look, I think in terms of the comments I made earlier. So from price and a net new wins perspective, fourth quarter performance was in line with what we had expected, really where it was below our expectations was like-for-like growth and in particular, in the U.S.

Are you able to clarify what you're assuming for like-for-like for that fourth quarter just to help us sort backfill work models?

We give a range. So it's a little bit hard to quantify. But I guess what I would say is we touched on this earlier in the call, the like-for-like volumes were negative, and we probably would have expected them to be broadly flat.

Okay. And just second question from me, and it's a bit of a follow-on from Justin's question earlier on. I just wanted to get a bit of color and a bit of guidance, I guess, around the corporate cost line. You've called out corporate costs -- corporate costs were $92 million in FY '25, you're calling out a reduction of $15 million. So purely corporate costs it's Shaping Our Future. Should that be around, call it, $77 million, that's the essentially the math there. And then can you give us a bit of guidance around, I guess, what you expect Shaping Our Future to be for '26?

Look, Owen, I think just one thing for everyone to note is we're sort of would like to move to more guiding overheads in general because, obviously, where we might choose to invest or we've talked about some restructuring and where that might happen, might be different to where we expect or forecast at a point in time. But I think to answer your questions, we broadly expect overheads to be flat. And then in line with what we said at our Investor Day, we expect Shaping Our Future costs to grow essentially in line with revenue.

Right. So the cost reduction of $15 million effectively is going to get absorbed by additional costs coming through Shaping Our Future. It's going to be reinvested essentially as you...

Yes, that's right. .

Your next question is from Sam Seow from Citi.

Just one from me. I just want to understand some of your answers on the call a bit better and perhaps ask the question in a different way. Your operating leverage has obviously increased in the business, 8% to 11% guide from 3% to 4% sales. And a couple of guys are mentioning sales of LTI has taken a bit of a step down. Is it fair to say as technology or S+ rolls out, you lower your cost to serve and this should see lower sales growth going forward, but actually better operating leverage? Or is that just totally the wrong read?

Can I rephrase that slightly, Sam, if that's all right. How I think about it is the amount of price that you take changes. And I think while we're talking about the grid having changed, I think the grid was adjusted because we went into a high inflation period and the expectation was to take pricing. So if you go back to pre-COVID, the grid was actually, I think, 2 to 5 or 2 to 6. And we thought going back there wasn't the right place to go given our investor value proposition. So we removed the 2%. So I think for me, it's not about that we shouldn't expect the volume growth, et cetera, it's about that price realization.

And exactly what you said, Sam, as we lower the cost to serve, then that helps offset inflation and obviously, the price increases that then happen or price realization is lower than it has been in the past.

Got it. And so structurally, embedded in your kind of 3-year LTI view is pricing will probably be a bit softer, but your operating leverage or natural operating leverage in the business should actually take a step up, if you're successful with S+?

Yes, I think that's a fair assumption.

Your next question is from Scott Ryall from Rimor Equity Research.

Firstly, this is really for Graham, I think. I guess in the last 6 months, we've seen certainly the most mental trade environment I can remember with all sorts of risks emerging. And so I guess what I'm wondering out of that is you've got the retailers, there's some concern over shifts in inventory, whether that's up or down due to the tariffs and trying to time various inventory movements.

You've mentioned already a couple of times on your own end, customers seeing some softness in demand. You've weathered the storm really, really well over the last 6 months that the financial results are clear on that. I guess what I'm wondering, Graham, is what do you worry about. What keeps you awake at night? Is it the fact that customers are getting more price sensitive and you have to make sure that you are delivering value to make sure -- or either your perception of value add to a customer has to go up? Is it inventory holding from retailers again, I mean, that causes a lot of inefficiency in your system. I'm just trying to get a sense of what your -- what keeps you awake at night at the moment?

Yes. At the moment, it's a bad cough, it's keeping me awake at night. But I think generally, I would say, the things like the inventory optimization, deoptimization is a -- it's a temporary dislocation. So over a period of time, that sorts itself out. I think a prolonged period where consumers are feeling like they need to hold on to their money rather than spending it. That's an issue. But really, it doesn't keep me awake at night because eventually, people need to eat and drink, and that's kind of what affects our volumes.

I start thinking more about ensuring that we are delivering value for our customers. And I think we have this conversation in the past when everything was very conducive to us being able to get price increases in the industry getting price increases. I always said that at some point, we're going to have to show that we are delivering superior value for our customers compared to their other options. And we were working on that. And what I'm pleased about is we are beginning to deliver on that. So if you look at all our customer-related metrics that are moving in the right direction then it's things like being able to say, if we have better behavior, for want of a better word, in terms of people returning the pallets back quicker, we will be able to give them a lower price and create new value for them.

And if we can get the insights from data we can work together with customers, retailers and manufacturers to eliminate waste from the supply chain and share that value. I think the 1 area where I think we still got a bit of works to do is quality. So we are reinvesting some of the benefits we're getting from productivity into quality because I think that is something, not only from just the -- we all know the Brambles and CHEP story of the past. We do have to keep an eye on quality.

But I think also there's a systemic move, which is as more and more of the customers and the retailers have automated processes within their DCs. I don't think, you need a higher quality standard pallet than we've got, but you need to make sure that consistently, you are delivering the quality that we're meant to be delivering to our customers, and that's something we're making investments in now to ensure that we do that. So that's the thing that sort of keeps me awake a little bit at night is if we don't do that, then we have got a bigger problem with our customers, and it's just with the business model. But we are on top of that and are working on it. Beyond that, I think it's -- clearly, I want to make sure that we deliver on and really change the business through digital. And that's -- I'm not -- again, it doesn't keep me awake night, but it's something that's top of mind.

And lucky in for what it's worth. Good on you for reaching the quarterly revenue numbers.

Your next question is from Peter Steyn from Macquarie.

I was keen to just explore the x-axis of your table on Page 67 of the annual report, move up in your ROCI intentions or at least the targets. Could you sort of step us through, given all the conversation about balancing price and value with customers, how you see the key drivers of that improvement over the next few years. It's obviously still a fairly meaningful step-up from where we are just under 22% today?

Yes. So when we're looking at REM targets, there's another sort of factor which comes in, which you don't really want to set a threshold below where you actually are. So one of the drivers for that grid now is we're at 22% now pretty much. And therefore, our [ REMCO ] decided -- and I think it's a very acceptable practice that the threshold then starts at 22%. You can then argue and we've said -- we've guided to the fact we think ROCI will go up a bit this year. So target 23% and to give us a bit of stretch, max at 24%.

Now that's fine. That's, if you like, a pretty mechanical way of setting the grid. What we are very conscious of is that ROCI doesn't just keep on exponential increasing because then you start driving the business and running the business into the ground, and we do need to reinvest in things like digital, but quality as well and other things. So you go below that grid and you see the paragraph, which says that we are going to look at it again over the course of the next 12 months because I think it makes much more sense to tweak that part of the LTI and have it much more closely aligned to the investor value prop, which I think we need to really launched that in '24. So it's taken a bit of time for people to get comfortable with it.

But I think having something that's related to mid-single-digit revenue growth, which is not that far away from obviously where the revenue part of that grid is at the moment with ULP leverage and with delivering cash flow. That for me, strikes me as a better place to go than just to focus on ROCI. And as we've said, we expect to invest in things like S+ and quality over the next few years. Therefore, without wanting to give any numbers, you would expect the ROCI not to be increasing by leaps and bounds over the next few years.

Got you. That was useful. Joaquin, just a very quick one, a small detail, but your interest guide certainly looks like it's headed up driven by leases. Perhaps if you could just step us through very quickly your expectations for '26 on interest?

Peter, so in terms of our interest costs under the FY '26 considerations on Slide 27, we outlined that we expect net finance costs to increase by $30 million. So that's the number. And it's essentially exactly what you said, largely lease renewals as well as some new leases. Obviously, at higher rates particularly, we're seeing that in real estate in the U.S.

Your next question is from Jakob Cakarnis from Jarden.

Just a follow-up for Joaquin. Slide 26. Just on the overhead cost reduction, the restructuring. Can I confirm that, that $30 million in the first half is going to be taken below the line. But I just wanted to check the wording, you're saying a net benefit of $15 million in '26. Am I right in thinking the total above-the-line benefit from restructuring was $45 million. So the $30 million cost plus a $15 million benefit. And can you just clarify for me the restructuring costs are taken below the line, but the benefits are taken above?

Jakob. No, look, just to be clear, we don't take anything below the line. You saw that also when we did our Shaping Our Future. So what we were just trying to guide there is to help people understand that there would be a $30 million of costs incurred in the first half. Then that -- the net benefit over the full year is $15 million. And then when you get into the following year, obviously, -- you not only don't have to spend that $30 million, but obviously, the timing means that you generate extra savings. So we were just helping people be able to guide first half full year and then what are the benefits in the following year. Does that help?

[Operator Instructions] There are no further questions at this time. I'll now hand back to Mr. Chipchase for closing remarks.

Great. Thanks very much for all of you for dialing in and for the questions. Look forward to seeing you over the coming days and weeks. But I hope you will agree that another really strong set of results for us for '25 and looking forward with lots of confidence and optimism for the next 12 months. Thanks a lot.