Preliminary Final Report

Results for announcement to the market
for the year ended 30 June 2025
Appendix 4E
20252024%
$’m$’mchange
REPORTED
Revenue from ordinary activities 10,481.5 10,979.5
Other income 50.0 71.3
Total revenue and other income from ordinary activities 10,531.5 11,050.8 (4.7) %
Total revenue including joint ventures and other income 10,885.7 11,967.6 (9.0) %
Earnings before interest and tax 283.2 180.5 56.9 %
Earnings before interest and tax and amortisation of acquired intangible assets (EBITA) 310.7 203.6 52.6 %
Profit from ordinary activities after tax attributable to members of the parent entity 136.7 69.1 97.8 %
Profit from ordinary activities after tax and before amortisation of acquired intangible assets (NPATA) 168.4 98.3 71.3 %
UNDERLYING
Earnings before interest and tax and amortisation of acquired intangible assets (EBITA) 474.2 380.8 24.5 %
Profit from ordinary activities after tax and before amortisation of acquired intangible assets (NPATA) 279.4 210.1 33.0 %
20252024%
centscentschange
Basic earnings per share 20.4 10.3 98.1 %
Diluted earnings per share
(i)
20.4 10.3 98.1 %
Net tangible asset backing per ordinary share 38.0 28.9 31.5 %
Dividend2025
Final
2024
Final
Dividend per share (cents) 14.1 11.0
Franked amount per share (cents) 14.1 5.5
Dividend record date04/09/202516/09/2024
Dividend payable date02/10/202515/10/2024
Redeemable Optionally Adjustable Distributing Securities (ROADS)
Dividend per ROADS (in Australian cents)6.226.52
New Zealand imputation credit percentage per ROADS 100 % 100 %
ROADS payment dateQuarter 1Quarter 2Quarter 3Quarter 4
Instalment date FY202516/09/202416/12/202417/03/202516/06/2025
Instalment date FY202415/09/202315/12/202315/03/202417/06/2024
Downer EDI's Dividend Reinvestment Plan remains suspended.
(i) At 30 June 2025 and 2024, the Redeemable Optionally Adjustable Distributing Securities (ROADS) were deemed anti-dilutive and consequently, diluted EPS remained at 20.4 cents per share (2024: 10.3 cents per share).
Loss of control over entities
Details of loss of control over entities are disclosed in Note F6. Disposal of businesses in the Consolidated Financial Report.
Details of associates and joint venture entities
Details of associates and joint venture entities are disclosed in Note F1(a) Interest in joint ventures and associate entities in the Consolidated Financial
Report.
Auditor qualification or review
The reports have been audited and contain an independent auditor's report.
For commentary on the results for the year and review of operations, please refer to the Directors' Report and separate media release.

=== IR PAGE TRANSCRIPT: Transcript ===

DG-CA-TP009-AU Page 1 of 17
Version: 1.2
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FY25 Full Year Results, Investor webcast transcript 21 August 2025, 10am
Peter Tompkins: Good morning and thank you for joining Downer's 2025 full year results
presentation. With me is our Group CFO Malcolm Ashcroft.
Over the past two-and-a-half years we've been executing a portfolio simplification
strategy to focus on the most attractive end markets where we can deploy technical
capability across the lifecycle of critical infrastructure. With the simplification
program largely complete, you can see on Slide 2 the interconnectedness of our
businesses that build and maintain assets across metropolitan and regional
networks.
Turning to Slide 3, our portfolio logic is supported by four long-term tailwinds where
we have strong competitive advantage and key differentiators. The first of these
trends is transitional energy and the need for new power infrastructure and the
electrification of assets to support a lower carbon economy. The second tailwind
is government outsourcing and new infrastructure driven by population growth.
This includes essential services for governments in areas where demand will grow
including roads, rail, health, education, social housing and Defence.
This ties in with the third tailwind, Defence spending and the government's
commitment to lift spending to 2.3% of GDP by 2033. In 2025, this saw the total
funding allocated by the government increase by almost 6% alone. Finally, the
need to build local industry capability against a backdrop of global economic
uncertainty. Downer is one of the very few Australian prime contractors with core
IP in asset management, technology integration, manufacturing and the ability to
mobilise a large skilled workforce of 26,000 people and a supply chain of more
than 20,000 delivery partners.
Now turning to Slide 4, the main takeaway from this result is that we continue to
make steady progress in our turnaround, underpinned by our back-to-basics
approach and year-on-year improvement across our key metrics. Our focus has
been on building consistency and performance based on a quality order book,
aligned to our risk guard rails and lowering our cost to serve for our customers.
We have also announced an on-market share buyback today as well as ongoing
improvement in our dividend payout ratio and a return to fully franked dividends.
We are confident that we are on track to continue to deliver ongoing improvement
across our key metrics and have balance sheet flexibility to grow in our core
markets over the medium term.
Moving to Slide 5, which picks up the theme of continuous improvement just
mentioned, we previously set a management target of achieving an average 4.5%
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1.2 Page 2 of 17

EBITA margin across FY25 and FY26. For FY25, the 4.4% margin was ahead of
our target of 4.2% and puts us in a good position to achieve our FY26 target. For
operational context, our 4.4% margin for this year is our best performance in more
than a decade.
Underlying NPATA of $279 million was a 33% increase on FY24 and at the top
end of our guidance range, while statutory NPAT increased 82% to $149 million.
Underlying EBITA of $474 million increased by 25% on FY24, driven by earnings
improvement across our three segments. EBITA was backed by strong normalised
cash conversion of 98% and our balance sheet continued to strengthen with net
debt to EBITDA of 0.9 times, which is down from 1.4 times in FY24 and does not
include the sale proceeds of our Keolis Downer joint venture which we expect to
complete by the end of 2025. Safety metrics continued to improve with a 20%
reduction in our injury frequency rates across operations.
Turning to Slide 6, excluding businesses sold or reclassified as held for sale, FY25
revenue was 2.5% lower on a pro forma basis. As shown in this waterfall, the total
revenue contributed from businesses that were either divested or reclassified in
FY25 reduced by $816 million against FY24, of which $496 million related to the
Keolis Downer joint venture.
After taking into account these divestments, the 2.5% revenue reduction reflects
our ongoing strategic focus on the quality of revenue and the application of our risk
guardrails. It also includes the runoff and non-renewal of low margin contracts and
also some market softness including Transport Agency spend in Australia and
general activity in New Zealand that we discussed at the Half Year results. When
we analysed the revenue performance of select go-forward businesses, we had
overall net revenue growth of approximately 2% across a number of areas
including power projects, water, specialist pavements, government, integrated FM
and rail. This was partially offset by lower activity in Industrial & Energy and
Telecommunications.
A key focus of our transformation has been a disciplined approach to reshaping
the portfolio. We've divested and exited contracts that were either low margin or
not aligned to our enhanced risk guard rails or where we didn't hold strong market
position, scale or technical differentiators. Our goal is that a simplified and
disciplined focus on revenue quality will enhance the predictability of our earnings
and reduce volatility going forward. This reset will complete through FY26 with a
transition back to absolute growth expected after that.
I will now look at our segment performance on Slide 7, starting with Transport.
Transport which includes Roads, Rail and our New Zealand Projects business,

1.2 Page 3 of 17

delivered year-on-year improvement with earnings increasing by 11.1% to $278
million, at an EBITA margin of 5.2%, which is up 0.5%. Revenue was stable, driven
by improvement in Rail and Roads; New Zealand offset by ongoing softness in
Roads Australia. The Queensland Train project contributed higher earnings
despite some weather impacts and is now 33% complete by value. Good volumes
from airport pavement projects were also achieved. New Zealand Roads had an
improved second half on the back of increased Transport Agency activity for both
maintenance contracts and projects.
The $800 million Auckland Airport project awarded in September last year has
mobilised well with solid progress being achieved. The lower work-in-hand reflects
the progressive completion of these larger projects, QTMP, Auckland Airport and
other runway projects, partially offset by some recent wins including maintenance
contracts for Wellington and North East Link, as well as the Otaki Road Alliance
and Phase 1 of the Mill Road project. In Road Services and Projects, we are
currently bidding approximately $11 billion of new work in Australia and New
Zealand, including the New Zealand network contracts which operate for a term of
up to 10 years and will be announced around the end of the calendar year.
Turning to Slide 8, in transport there's a growing optimism in the forecast for New
Zealand Roads and Rail with government announcing an updated infrastructure
program that includes $6 billion of projects to commence progressively from this
financial year. In Australia, while the road surfacing business has been affected by
subdued volumes over the past two years, In the medium term we expect this to
turn.
When looking at the ideas being discussed at the productivity roundtable and by
governments these past few days, the prioritisation of more public infrastructure,
building cooperation between the Commonwealth, States and Territories, is one of
the most compelling propositions and lowest risk options to increase economic
output, to open up new areas for residential development, provide greater mobility
and deliver long-term skills and training for economic expansion.
Turning now to Energy & Utilities on Slide 9 which comprises our Power, Water,
Gas, Telco and Industrial & Energy businesses. Our turnaround focus has
delivered improved project outcomes resulting in a 43.9% increase in earnings to
$122 million. The result was supported by a strong performance in Power Projects,
including the successful delivery of key transmission lines and substations. We
also completed all legacy water projects in line with forecast in the period.
Revenue decreased by 7.7% to $3 billion which was largely due to the application
of our enhanced risk guard rails and selective tendering, while growth in Power

1.2 Page 4 of 17

and Water was offset by Industrial & Energy which was impacted by the deferral
of some maintenance shutdown and closure of underperforming depots. We also
experienced a reduction in Telecommunications revenue as larger programs
concluded in the second half.
The merger of our Utilities and Industrial & Energy teams has strengthened our
position to capture more opportunities with the combined technical capabilities
supported by refreshed leadership. Energy & Utilities increased its work-in-hand
by 6.3% during the period with some key wins and we are confident of our position
on a number of material opportunities to be awarded in the first half.
If we look at the market insights on Slide 10, we see opportunities for a sustainable
level of growth as a market leader across Australia and New Zealand. The energy
sector is being reshaped by decarbonisation and the need for greater network
resilience. Government policies are accelerating near-term energy investment,
particularly in New South Wales, Queensland and Western Australia. Ageing water
infrastructure in most urban centres is driving upgrades and maintenance
programs. Whilst the Telco build phase has passed the peak of 2024 levels,
ongoing augmentation work to keep pace with digital and data demand will
continue.
Turning to Slide 11, it was another steady result from Facilities, which includes our
Health, Education, Defence, Integrated FM and Government businesses. Revenue
remained stable at $2.2 billion while earnings increased to $151 million with a 7%
EBITA margin continuing a positive trend for this business. Integrated FM, Defence
and Government delivered year-on-year revenue and earnings growth through
higher volumes as did the Health and Education Public Private Partnerships, which
continued to perform consistently well.
We completed the divestment of our remaining share in the Laundries business.
We sold the New Zealand Catering and Australian Cleaning businesses and whilst
only very small profit contributors, these divestments have reduced headcount by
more than 5,000 FTEs or approximately 40% of total headcount. This will allow
additional bandwidth for management to focus on our core business and growth
opportunities. In March of this year we were awarded a six-month extension to the
Defence EMOS contract to the end of January 2026 and we anticipate that the
successful bidders for the new contracts will be announced in Q1 FY26.
Looking at market insights on Slide 12, and we continue to see good opportunities
in Integrated FM and large-scale outsourcing and partnering. In the Defence
sector, strategic policy initiatives, infrastructure investment and shifting geopolitical
priorities are supporting a solid outlook for volumes. Demographic changes are

1.2 Page 5 of 17

increasing demand for health, education and social housing, while higher asset
usage means large businesses and governments are needing value-for-money
solutions from their partners in asset management to optimise end user experience
and reliability.
Moving to work-in-hand on Slide 13, our contracted revenue is long-dated,
diversified and resilient. It is also more than 90% government-related and
approximately 90% services, most of which are long-term maintenance
arrangements. Our strong work-in-hand of $35.1 billion only includes initial terms
and does not include extension options that are generally exercised by our
customers in full or part. In addition, Downer is currently preferred bidder on a
number of larger opportunities for over $4 billion, which we are awaiting award.
Turning to ESG on slide 14, in FY25, our leaders undertook more than 67,000 field
safety engagements focused on Critical Risk identification. Downer's safety
indicators improved in FY25, our Total Recordable Frequency Rate improved by
20% to 2.04 and our Lost Time Injury Frequency Rate decreased from 0.88 to 0.83.
On the sustainability front, we continue to invest in programs that support ongoing
energy efficiency and reductions in absolute Scope 1 and 2 emissions with a 7.7%
reduction achieved on FY24 levels.
I will now hand over to Mal, who will talk you through the Group financials and
capital management initiatives.
Mr Ashcroft: Thanks Peter and good morning everyone. FY25 marks a clear step forward in our
financial and operational reset. We've delivered another period of consistent
performance driven by disciplined execution and steady improvement in margin
expansion, cash generation and shareholder returns. Our focus on portfolio
simplification, enhancing the quality of revenue, cost optimisation and project
delivery has improved margins across all segments. Our earnings are cash backed
and we have further strengthened our balance sheet through improved operating
cash flow and capital discipline.
We've accelerated our cost-out initiatives, exceeding the targets of our upsized
program and have commenced the next phase of our improvement initiatives to
drive further efficiencies in future periods. In addition, we've announced a share
buyback and increased our dividend payout ratio with fully franked dividends,
signalling confidence in the business, demonstrating disciplined capital
management and reinforcing our commitment to prioritising shareholder returns
while maintaining the capacity to invest in growth opportunities.
Looking at our financial performance, pro forma revenue of $10.6 billion, adjusted
for the contribution of divested businesses and assets held for sale, declined by

1.2 Page 6 of 17

2.5% on FY24. This reflects our continued focus on revenue quality, selective
tendering as a result of enhanced guardrails and the runoff or exit of low margin
and underperforming contracts and non-core businesses. The greatest impact on
our statutory and underlying revenue in the period was driven by our portfolio
simplification program with divestments and reclassifications to held for sale,
notably the cessation of recognising revenue for the Keolis Downer after the first
quarter.
Peter has already covered the segment revenue performance and moving parts
from underlying to pro forma. Importantly, with the portfolio simplification program
being finalised, we anticipate underlying and pro forma revenue to converge in
FY26, simplifying our reporting. In FY25, pro forma EBITA increased 19.8% to
$459 million and pro forma EBITDA margin increased to 4.3%. Our underlying
EBITA margin improved to 4.4% up from 3.2% in FY24, exceeding our 4.2%
management target minimum threshold in FY25. Notably, the second half margin
reached 5%, up from 3.9% in the second half of FY24. This uplift reflects earnings
growth across all segments underpinned by the successful turnaround of the
Energy & Utilities business, improved Transport performance despite market
variability and another strong margin contribution from Facilities.
Gains were further supported by contract margin improvements through improved
operational delivery, commercial resets, cost-out initiatives, and the completion
and divestment of underperforming low-margin businesses. Our transformation
program continues to deliver, with cumulative gross annualised cost reductions
increasing to $213 million, exceeding our revised $200 million target, with $83
million delivered in FY25. These savings stem from a combination of operating
model changes which have driven efficiencies in our corporate and business
support costs, technology simplification and changes to our shared services
delivery model. We have made significant progress in resetting our performance
culture with an ongoing focus on cost leadership and cost to serve.
Pro forma NPATA growth was 25% and underlying NPATA growth was up 33%.
Depreciation and amortisation was relatively flat. Interest declined due to the lower
net debt and the Effective Tax Rate was slightly higher than we expected due to
the increase in non-deductible expenses and unrecognised capital losses. The
performance highlights the progress made over the past two years in reshaping
the portfolio, embedding the disciplines and driving sustainable cost efficiencies
and, importantly, the earnings growth was matched by strong cash distribution.
We've achieved a significant improvement in free cash flow to $324 million with
FY25 operating cash of $563 million and cash conversion at 98% above our 90%
target. We remain committed to our target of at least 90% cash conversion in FY26,

1.2 Page 7 of 17

however, we do expect in the first half of FY26 conversion to be potentially lower
due to forecast timing differences in payments and receipts associated with some
long-term contracts but, by the Full Year, expect to be back in line with our targets.
We also continue to strengthen our balance sheet with leverage reduced to 0.9
times, down from 1.4 times. This positions us well for FY26 with capacity to invest
in a range of opportunities to support continued growth in the medium term and
has provided us with capital management flexibility to improve shareholder returns
by commencing the share buyback and lifting our dividend payout ratio.
We've provided a bridge from pro forma to statutory EBITA. Underlying earnings
represent statutory profit adjusted for individually significant items, or ISIs, while
pro forma is our underlying earnings excluding the contributions from divested
businesses and assets held for sale, both in the current and prior period, to enable
a like-for-like comparison. In FY25, we reported $459 million in pro forma EBITA,
up 19.8%. Underlying EBITA rose 24.5% to $474 million. Statutory EBITA was
$311 million after accounting for $164 million in ISIs and was up 52.6% against
FY24.
These ISIs are largely consistent in nature and type, with previously reported
categories including portfolio simplification, which includes divestments and assets
held for sale, transformation and restructuring costs, which supported our cost
savings program, including operating model changes, redundancies and
severance and IT transformation program spend, legal and regulatory costs
relating to known significant matters, including the shareholder class action and
ACCC and asset impairment related charges including accelerated amortisation
and write downs associated with discontinued IT programs.
In the second half, notable new or significant ISIs included in the category of net
loss on divestments: a $39 million impairment of our 49% stake in Keolis Downer,
classified as held for sale, which adjusts the carrying value to reflect the terms of
our transaction with Keolis and includes indemnity and warranty commitments; and
$8 million in exit costs from the demobilisation of the Victoria Power Maintenance
contract, which is akin in substance to a divestment of a business with employees,
depots, fleet and plant transferring back to the customer at the conclusion of the
contract in July. There was also a $41 million charge in relation to rail facility costs,
which comprised a $47 million impairment charge against fixed assets due to
revised customer demand, $10 million in site rectification costs, partially offset by
$16 million in insurance proceeds.
Moving to our cash result, we are pleased with steady progress in embedding our
cash-focused culture, reflecting a significant increase in free cash flow and

1.2 Page 8 of 17

delivering cash backed profits. Our disciplined approach to capital allocation is
evident in our cash flow movements, driven by our contracting back-to-basics
focus, enhanced billing and cash collection practices and the resolution of
variations and claims. Operating cash rose to $563 million with an 8.1%
improvement before interest and tax, partially offset by increased tax payments
that have enabled the return to 100% franking.
Free cash flow increased 14% to $324 million compared to the prior period,
reflecting the progress we've made. Net CapEx spend was $111 million, down 21%
on the prior year, reflecting a deliberate shift towards capital discipline and a
measured response to market conditions, particularly in Transport. The reduction
was supported by improved asset utilisation, appropriate sweating of assets and
the timing of maintenance cycles and contract awards and renewals. We expect
CapEx to return towards historical levels in FY26 with anticipated higher levels of
investment in plant, fleet, technology and growth opportunities.
Payment of lease liabilities fell 9.7% to $148 million due to lease terminations on
fleet and property consolidations as part of our cost savings programs. Proceeds
received from divestments in FY25 were $62 million, with additional proceeds to
come in FY26 from the sale of our interest in Keolis Downer. Advances and
receipts of $20 million from other parties included settlement of the Keolis Downer
loan following the conclusion of the MR4 Yarra Trams contract. We ended the year
with over $830 million in cash and $2.5 billion in liquidity, providing significant
headroom to fund growth and capacity to return capital to shareholders.
Turning to our debt profile, portfolio quality and balance sheet strength are critical
during periods of economic and market uncertainty. We entered FY26 well
positioned on both fronts. We remain compliant with all financial covenants with
substantial headroom and have maintained our BBB stable credit rating from Fitch,
reflecting continued improvement in profit margins and strengthened balance
sheet. Notably, we achieved Fitch's EBITDA margin threshold in FY25, and our
leverage remains below their target range for BBB credit.
In June, we successfully extended our $1 billion syndicated Sustainability Linked
Loan, reducing capacity by $200 million, and in July we repaid USPP notes, further
simplifying our debt structure and reducing future interest obligations. Our
weighted average debt maturity has extended to 3.5 years, up from 2.5 years at
December 2024, providing greater stability and flexibility in our funding base. The
weighted average cost of debt for FY25 was 5.4%, consistent with the prior year.
Net debt reduced by 45% to $259 million at 30 June from the prior year, further
strengthening the financial position. We also took proactive steps to optimise our

1.2 Page 9 of 17

bonding facilities. We rationalised surplus bonding limits, resulting in a $200 million
reduction in total facility limits, delivering further cost savings. We expect our total
debt limit to reduce further in FY26 once the AMTN bridge expires in the second
half and with the repayment of the USPPs which occurred in July of 2025. This
positions us well to manage future refinancing requirements, maintaining flexibility
in our capital structure and support of our capital management initiatives.
Moving to capital allocation, our capital allocation framework continues to guide
disciplined decision making, balancing reinvestment, strengthening of the balance
sheet and delivering returns to shareholders. We remain committed to the
consistent application of sustainable business principles where our businesses
self-fund their capital expenditure, their share of corporate costs, taxes, dividends
from their operating cash. Our management of our investing activities has reflected
our back-to-basics focus as we stabilised the business with an earn-the-right-to-
grow mentality in FY25. This extended to heightened governance of maintenance
CapEx, ensuring optimisation of asset management and extending the life of
assets where appropriate.
Our investment levels were also adjusted in some businesses as we completed
strategic reviews and responded to market conditions. This resulted in our CapEx
reducing well below historical levels. As I mentioned, looking forward, we can
expect CapEx levels to trend back to historical levels, with an uplift in maintenance
CapEx on plant and fleet, investment required on contract renewals and in IT and
some growth CapEx linked to tender outcomes. Our portfolio simplification is
largely complete, with the remaining divestment proceeds from Keolis Downer
expected by the end of this year.
As our performance improvement builds momentum, our strategic focus shifts from
turnaround to sustainable growth, with our primary focus on driving organic growth
within our existing cause, with the capacity to support the investment required. We
will selectively consider inorganic opportunities, typically bolt-ons to our cause,
assessed through the lens of market conditions and shareholder value creation,
remaining disciplined and balanced from a risk/return perspective.
We have completed a strategic review of our sources of capital and funding
requirements over the business plan period. We continue to monitor the role of our
ROADS securities in our capital structure. With recent declines in New Zealand
interest rates, they remain a relatively cost-effective funding source, but we'll
continue to monitor them. Our leverage has materially improved, as mentioned,
providing greater flexibility for capital management.

1.2 Page 10 of 17

Moving on to shareholder returns, in alignment with our commitment to
shareholder returns, we've increased our dividend payout ratio range to 60% to
70% of underlying NPATA and we are targeting to fully franked dividends going
forward. The final dividend of 14.1 cents per share is 100% franked and
represented an increased payout ratio of 65%. This brings the FY25 total dividends
to 24.9 cents per share, an increase of 46.5% on the prior year and representing
a full year payout ratio of 63%. The uplift in both franking and the payout ratio this
year demonstrates our ability to return more value to shareholders while
maintaining balance sheet strength. In addition, we've announced an on-market
share buyback of up to $230 million, representing approximately 5% of issued
capital. This complements the dividend uplift and provides an additional pathway
to return capital to shareholders.
Balance sheet is well positioned to support capital returns, higher dividends and
investment in organic growth, with leverage forecast to remain within our target of
around 1.5 times. We're also investing in the next phase of transformation with
strategic initiatives focused on investing and modernising how we work, upgrading
technology and supporting business processes which will enable and enhance
productivity, realise cost efficiencies and deliver on our customer- and people-
strategic priorities. This includes upgrading and standardising our work
management, project management and payroll systems and streamlining
processes to better support our frontline teams. Our plans enable us to retain a
level of optionality and capacity to enable us to sensibly consider growth options
in the future.
I'll now hand back to Peter to close with priorities and outlook.
Mr Tompkins: Thanks, Mal. First, looking at the segment outlook for FY26 on Slide 23, in
Transport, we expect Australian Roads volumes to remain subdued and whilst we
see signs of some improvement, we anticipate the return to historical spend levels
to be gradual. In New Zealand, national and regional road programs are supporting
demand, with NZTA's significant IDM contract tenders also expected to conclude
this year. The built environment phase of the QTMP project peaked in FY25 with
local rollingstock manufacturing to commence at the end of FY26.
In Energy & Utilities, we anticipate further growth in Power Projects and more
broadly, we see a healthy pipeline across the energy sector. Strong demand in
Water is also expected to continue. As stated earlier, the non-renewal and
demobilisation of the $200 million per annum Victorian Power Maintenance
contract completed in July 2025. Combined with the closeout of legacy Water
projects, this will support margin performance but have a revenue impact. In

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facilities, we're targeting growth in Defence, Integrated FM and Government,
backed by a solid opportunity pipeline.
Finally, to the Group outlook on Slide 24, we enter FY26 with good momentum,
confidence in our market positions and greater stability in our business following
the completion of our portfolio simplification. In the short term, market conditions
are expected to be stable with Australian Transport Agency spend expected to
remain subdued. In the medium term, the outlook is for sustainable growth and it's
positive, assisted by New Zealand transport infrastructure programs and
favourable sector exposures.
The next phase of our transformation will include investments in modernising our
work practices with further standardisation, digitisation and AI to drive productivity,
improve our customer experience and cost efficiency benefits. In FY26, we are
targeting both underlying earnings and EBITA margin improvement with underlying
revenue forecast to be flat to slightly lower than FY25 pro forma revenue.
I will now open the call up to questions.
Operator: Thank you. If you wish to ask a question, please press star, then one on your
telephone and wait for your name to be announced. If you wish to cancel your
request, please press star/two. If you are on a speakerphone, please pick up your
handset before you ask your question. We will now pause momentarily to
assemble our roster. Your first question comes from John Purtell with Macquarie.
Please proceed.
Mr Purtell: (Macquarie, Analyst) G'day Peter and Mal. Hope you're well. Just a few questions,
if I can. Thanks for the outlook commentary there by sector and maybe just to add
further to that in terms of the moving parts for either the flat to down revenue for
next year, I mean it very much sounds like those subdued volumes in Road
Services and obviously you've got the AusNet contract there, but just keen to
understand maybe some of the moving parts there within that and then how you're
feeling about medium-term revenue growth.
Mr Tompkins: Yes, thanks, John. So I think first point in all of that is coming back to the key
principle of our turnaround, which is quality revenue, quality revenue, quality
revenue. Therefore, when we look at our end markets, we are being very selective
about the opportunities we pursue and we're targeting the right work, right
customers and hopefully with better win rates. You pointed out probably the two
standouts there just in terms of Roads and then the runoff of the Power
Maintenance contract, you've got the runoff of those Water projects as well. So in
the short term, FY26, we're pretty comfortable with that assessment of flat to
slightly down.

1.2 Page 12 of 17

But as we have attempted to articulate throughout the pack, in the medium term,
opportunity sets aren't our problem. We just need to be very selective. You've seen
in there the focus on earnings quality, you've seen EBITA margin uplift and they
will continue to be our focus for FY26.
Mr Purtell: (Macquarie, Analyst) Thank you. The second question on margins, can you talk to
your confidence for either greater than 4.5% average margin target and what the
key drivers are of that?
Mr Tompkins: Yes, I mean you'll remember a couple of years ago when we set the target, it felt
like a pretty big hill to climb. So you've seen good progress across those levers
that we've been speaking consistently about, price, cost, productivity, quality and
we've good gains early on in all of that. I think some of the easier wins, we've
extracted that value and you're seeing the run rate from things like restructuring
coming through and getting baked in. So sitting here right now, feeling good about
our average of 4.5% target and first point for us will be to deliver on that
commitment, that promise that we've made. As I said before, we've just got to keep
focusing on the quality.
I guess a little bit of context I'd add to that for you is it was a good second half
performance and just remind everybody of the seasonal skew that we have in our
business, so the 5% exit rate isn't a start rate for FY26. So long way of answering
your question John, I think we're feeling much better about our target than we were
a couple of years ago.
Mr Purtell: (Macquarie, Analyst) Thank you and just a final question for Mal if I can, there's
obviously a range of significant items there that you talked through in FY25, are
you expecting a cleaner year next year?
Mr Ashcroft: Yes, most certainly. So I think in terms of the ISI side if you look back, we've had
a couple of categories that have either linked to some of the legal matters we've
been dealing with, the portfolio simplification, and the restructuring activity to drive
the cost-saving outcomes. So from a portfolio simplification perspective, clearly
we're saying that's coming towards a close. We do have some runoff and tail off of
some of those legal matters that continue and some of the costs that will go into
FY26, but certainly directionally in terms of the nature of those types of costs,
directionally we would expect to see them going down.
Then what you would have heard Peter speaking about, is the next phase of
transformation for us is now less about that stabilisation and turnaround piece and
much more about how we transition over the coming periods to a path to
sustainable growth. So what we're announcing today is that we are starting
planning to look at modernising some of the work practices and that will involve

1.2 Page 13 of 17

some investment in technology and related support processes that really are
aimed at supporting the frontline, but will give us productivity benefits and support
structure efficiencies, but there's quite a bit of work still to be done to frame that
up. So they're probably the key moving parts as we look forward.
Mr Purtell: (Macquarie, Analyst) Thank you.
Operator: The next question comes from Megan Kirby-Lewis with Barrenjoey. Please go
ahead.
Ms Kirby-Lewis: (Barrenjoey, Analyst) Morning. My first question just on the subdued road activity
in Australia, I guess we've been talking about this for a number of periods now, so
just keen to get your latest thoughts on, I guess, the bottleneck and what we need
to see, to see that lift again.
Mr Tompkins: I think, Megan, you're right. It's a broader market set of conditions, at both client
side and supplier side and then obviously road users see a lot. The network
maintenance is not currently keeping up with what is required to maintain network
condition. So quite simply, we do expect to see just a natural opening up of
volumes. We've said this for a little while now and you'd say that the levels that
need to be spent will need to be spent fairly soon.
From a volume perspective, we estimate we're at around 3.8%, 4% down on
volumes last year. We think though that is turning and we've provided some
commentary on those early signs of shift, but we don't expect it to be an FY26 rapid
run rate story. We think it will be more gradual, but we certainly don't expect things
to deteriorate further.
Ms Kirby-Lewis: (Barrenjoey, Analyst) Thanks. Then just on the provisions, a bit of movement there.
Can you just call out which projects are related to?
Mr Ashcroft: Yes, look, we don't for commercial sensitivity reasons talk to the provision
movements and the specifics of them, but there's a range of moving parts. Some
of it relates to divestments and provisions that relate to divestments. Some of it
relates to provisions that we take around risks and warranty items in relation to
those divestments. Then I would say more broadly, it's more business as usual
changes. So they're the key moving parts.
Ms Kirby-Lewis: (Barrenjoey, Analyst) Anything on the Power Net and the water project still coming
through there?
Mr Ashcroft: Sorry, on the power maintenance project?

1.2 Page 14 of 17

Ms Kirby-Lewis: (Barrenjoey, Analyst) Yes, just the fact that that's now exited, would that have been
captured?
Mr Ashcroft: Yes.
Ms Kirby-Lewis: (Barrenjoey, Analyst) Okay, cool.
Mr Ashcroft: Yes, that's right. So you'll see that, that was called out and that contract concluded
in July and so we've taken estimates around the exit costs that we're working
through. There's some minor things just to resolve there, but yes, that's included.
Ms Kirby-Lewis: (Barrenjoey, Analyst) That's fantastic. Last one from me, just the preferred bidder
status on $4.5 billion of work, can you just help me think about the normal likelihood
that you actually would be awarded that and how long would that normally take to
come through?
Mr Tompkins: The $4.5 billion is evenly spread and they're the larger opportunities. Typically
when you're preferred bidder, you would say far, far more likely than not that there
will be an award. We've said in the next month or so, I think that's all relatively
consistent with usual practise around preferred bidder status.
Ms Kirby-Lewis: (Barrenjoey, Analyst) Perfect, thank you.
Operator: The next question comes from Nic Daish with RBC. Please proceed.
Mr Daish: (RBC, Analyst) Thanks, Peter. Thank you, Mal. I'm just curious, building on that
last question, I'm just curious as to how that $4.5 billion plays into the guidance,
the top-line guidance that you've provided today. I would imagine you make some
assumptions around that and how it influences your guidance, so just curious about
that, please.
Mr Tompkins: When you say guidance, you mean just in terms of directionally what we're saying
about revenue?
Mr Daish: (RBC, Analyst) Yes, I suppose the $4.5 billion, I mean obviously it ultimately
depends on the time period that those – should you win them.
Mr Tompkins: Yes, it does.
Mr Daish: (RBC, Analyst) Yes, so I'm just curious about are they two-, three-year projects or
to Peter's point, I think he's alluding to perhaps Defence, which would imply longer-
dated contracts. So just trying to tie the two together, please.
Mr Tompkins: You can confidently call those multi-year, longer-term, across a number of areas.

1.2 Page 15 of 17

Mr Daish: (RBC, Analyst) Okay.
Mr Ashcroft: I guess when you just think about the revenue outlook, we've taken a weighted
view on the pipeline and revenue opportunities, so it would incorporate the
expectation that we have that they will be secured.
Mr Daish: (RBC, Analyst) Thank you. The other one is just around the balance sheet. I know
generally you've spoken to a target of 1.5 times net debt to EBITDA. Given the
transformation that you've gone through and the step toward lower risk, repeat
services style work within your guardrails, I'm curious about whether or not your
view on that 1.5 times target shifts at all, please.
Mr Ashcroft: Yes, I think when we took that view, it wasn't a single period or a short-term view.
It was a medium-term view of what we thought the right balance for the business
was. We've obviously drifted quite a way below that and I guess in thinking through
our capital management, I would say we've had a conservative posture as we work
through the turnaround and get our performance momentum underway. So that
still remains an appropriate target for us and we'll be at or around those levels or
plan to be in the medium term.
Mr Daish: (RBC, Analyst) Got it. Okay, very clear. Thank you very much.
Operator: The next question is from Rohan Sundram with MST Financial. Please proceed.
Mr Sundram: (MST Financial, Analyst) Thank you. Hi, Peter and Mal, just the one from me. I'm
curious as to what portion of the FY26 revenue guidance that you have already
secured at this point in time, I'm just curious as to whether are you assuming more
wins or is it more a case of executions? Thanks.
Mr Tompkins: Look, again, just talking how these sorts of contracts play in terms of what you bid,
what you win, what you burn, typically you'd want to be about 75% plus secure at
this stage of the year to provide guidance on outlook. Then obviously there's a
range of work that is bid and won and delivered in the short term and so that's
typically how we would operate and assess revenue planning at this stage of the
year.
Mr Sundram: (MST Financial, Analyst) Thanks, Peter.
Operator: Once again, if you do wish to ask a question, please press star/one on your
telephone and wait for your name to be announced. Your next question is from
Nathan Reilly with UBS. Please proceed.

1.2 Page 16 of 17

Mr Reilly: (UBS, Analyst) Hi, good morning. Just a question on the cost-out program.
Obviously, that's being actioned, just interested in understanding what earnings
benefit you'd expect from prior actions in terms of the FY26 result.
Mr Ashcroft: Yes, thanks, Nathan. So you would have seen in the results, we talk about a gross
annualised benefit, so we look at that on a full benefit, full year basis. We had $213
million, which as you know references back to our original starting point a few years
back, but in period, $83 million of gross annualised costs, $50 million in the first
half and $33 million in the second half. So in round numbers, if you think about it,
probably about two-thirds of that sits in the FY25 result, with the balance due to
come through in FY26. I guess the way we think about it internally is we've got cost
escalation pressures from the overhead base that we've got to overcome and that
will certainly go a long way to contributing towards that. So yes, that's the desktop
analysis on that.
Mr Reilly: (UBS, Analyst) Okay, thanks for that. Just in terms of divestment activity
undertaken in FY25, is there likely to be any net cash impact in FY26?
Mr Ashcroft: Yes, so the proceeds from the sale of the Keolis Downer business likely land
towards the end of ‘25. There's a little bit of uncertainty around the way that that
will come back to us, but just to give you an order of magnitude, somewhere
between $60 million to $65 million is generally the cash number we're expecting.
How we receive that, there'll be a pre-completion, a franked dividend which has
still got to be agreed and the balance will come in the consideration for the sale.
So there'll be an update on that as we get closer to that time.
Mr Reilly: (UBS, Analyst) Okay, thanks. So that's ’26?
Mr Ashcroft: Yes, sorry, just to be clear, we expect that before Christmas this calendar year, but
it will be in the ‘26 year.
Mr Reilly: (UBS, Analyst) Okay, yes, thank you. Finally, just that point on bolt-on M&A, can I
get you to elaborate on what type of M&A or what types of businesses you think
would be good fits for your current portfolio?
Mr Tompkins: Yes, I think having gone through the process and indigestion at times of divesting
non-core businesses, we're not about to bolt on anymore non-cores, so it's got to
be complimentary, accretive to what we already do, but perhaps provide a little bit
more value or expertise into positions where we're currently really well placed and
you see those sorts of logical areas, particularly across Transport and in Energy &
Utilities. I think as an extension of that, with that indigestion piece, not just non-
core, but also massively transformative or complex acquisitions, we're not
interested in those and anything we do has to be worth the indigestion, but at the

1.2 Page 17 of 17

moment, we're very much focused on just those logical bolt-ons that give us
supplementary capability.
Mr Reilly: (UBS, Analyst) Perfect, thank you.
Operator: Once again, if you wish to ask a question, press star/one on your telephone and
wait for your name to be announced. There are no further questions in the queue
at this time. I will now turn the call back over to Mr. Tompkins for closing remarks.
Mr Tompkins: Thank you and thanks to everybody for joining the call and finally, just wanted to
call out all of our frontline and management teams for their support and contribution
to the result. Have a good day everybody.