Dyno Nobel (ASX:DNL) Q4 2026 Earnings Call

0:00 Good morning and welcome to Dano Nobel Limited's 2026 full year results briefing. This is Tom Dixon speaking and I'm joined this morning by our CEO and Managing Director, Mauro Neves, and our Group CFO, Nitesh Naidoo. Materials we will be covering today have been lodged with the Australian Securities Exchange and are available on the ASX and Dano Nobel websites. At the end of the presentation, we'll have time for questions and an audio recording will also be made available on the company's website. I'll draw your attention to the disclaimer on slide two. and slide three of the presentation. And before we move into the main presentation, I'd like to begin with an acknowledgement of country. I acknowledge the first peoples of the land, sea and waters across the various locations that we are living and working from today. I pay my respect to elders past and present.

0:46 Thank you. I'll now hand over to Mauro.

0:49 Thank you, Tom. Good morning, everyone, and welcome. Nitesh and I are pleased to present Dino Nobel's 2026 full year results. I'll start with our 2026 highlights and the outlook for fiscal year 27. Then I'll cover our progress on safety, our transformation, and the next drivers of growth, new markets, premium technology, and energetics. Nitesh will then take you through our financial performance, capital investment, balance sheet, and shareholder returns. I'll return with our closing remarks on why we believe in Dino Nobel's future, then we'll take your questions. Let me begin with the results and how we are building a stronger base for growth. Fiscal year 26 was a strong year for Dino Nobel.

1:35 Our explosives business delivered a record result with underlying EBIT of $485 million, up 12% year-on-year. We delivered on our financial year 26 commitments. Our transformation program generated $51 million in net benefits. At the end, our exit run rate stood at 70% of our $300 million EBIT uplift ambition. We completed our move to a pure-play explosives company. The sale of Fossard Hill marked the final step in separating our fertilizer business. Safety and reliable delivery remain our foundation. In the second half, we recorded zero process safety incidents and saw a clear improvement in TRIFA.

2:22 In our growth markets, We won new customer projects in Ghana, Tanzania, Brazil, Canada, and Western Australia. Our privileged assets and vertical integration continue to create advantage. The Morambar de Boroneking project is complete, and Cheyenne remains on track for completion in the first quarter of financial year 27. We also made tangible progress in energetics, with approximately US$1 billion of US government-funded TNT and IMX projects, now progressing at Dray and Kentucky. Such results keeps us on track for our $600 million EBIT ambition in financial year 28. By the end of financial year 27, we expect our exit run rate to reach about 85% to 95% of our uplift ambition.

3:18 Safety comes first, today and always. Our full year TRIFA was 1.01 compared with 0.95 in financial year 25. That's not where we want to be, but it does not tell the full story of our progress throughout the year. TRIFA fell from 1.25 in the first half to 0.77 in the second half. Strong leadership in the field, early identification of hazards, and a sharper focus on high-risk work began to deliver results. Process safety also improved. Incidents fell by 81% and we recorded zero process safety incidents in the second half. No incidents were classified as serious harm in financial year 26.

4:06 At 80% of our sites, there were no recordable injuries. Injury severity fell by 41%. We also recorded no major environmental incidents. We welcome this progress But the work is not done. Our triple target remains 0.76. We will keep building the leadership, systems, and behaviors required to achieve zero harm for everyone, everywhere. Now to the financial results. Group revenue was $3.941 billion. EBIT was $504 million excluding individually material items. Our statutory profit after tax, including IMI's, was $66 million.

4:56 That compares with a loss of $53 million in the previous period. Group revenue and earnings reduced year on year, as we reshaped our portfolio through the sale of the fertilizers. The keyest measure of the ongoing business is the Diamond Nobel explosives result. Explosives revenue rose 10%. to $3.406 billion. EBITDA rose 8% to $759 million. Underlying EBIT increased 12% to a record $485 million. ROIC, excluding fertilizers, rose from 5.2% to 6.7%.

5:42 This reflects a strong explosives business and the impact of turnarounds in financial year 25. We returned $574.4 million through our buyback program, at an average price of $3.01 per share. We have announced a final dividend of $0.05 per share, bringing total financial year 26 dividends to $0.096 per share. $0.096 per share. At the end, net debt to EBITDA was 2.1 times within our policy range. For financial year 27, we expect underlying EBIT of about $515 to $555 million, subject to the assumptions and risks set out in this presentation.

6:36 The transformation program delivered $51 million in net benefits during financial year 26. Commercial actions made the largest contribution. New customer wins, repricing, and more the use of our premium technology delivered $51 million. Priority growth markets added $19 million. Changes to how we operate, buy and manufacture also delivered gains across our cost base. These gains were partially offset by $55 million in temporary headwinds and other impacts. This included about $14 million from foreign exchange and $11 million in added depreciation. Inflation also has an impact. Unplanned downtime at Cheyenne and supply limits from the Waller turnaround accounted for about $16 million.

7:30 The core drivers of our transformation remain intact. Better contracts, firm pricing discipline, stronger manufacturing, and growth in markets where we can win are delivering results. In financial year 27, we expect another $30 to $70 million in net transformation benefits. Priority growth markets offer the largest opportunity. New contracts will start in Africa and Latin America with further growth in Canada, Asia, and WA. We expect a further $20 to $30 million from our commercial actions. These include commercial customer wins, repricing, better product bundling, and wider use of premium technology.

8:18 Manufacturing, supply chain, and procurement actions are expected to add up to $15 million. We will unlock more production capacity through the bottlenecking and improved efficiency. About $25 million in offsets will reduce those gains. These include the scheduled maintenance at Muromba and our foreign exchange assumptions. In this table, you can see our progress since financial year 23. From financial year 24 to 26, we delivered $185 million in net transformation benefits. Commercial benefits totaled $154 million gross.

9:04 Operations added $83 million. And growth markets added $59 million. Against those gains, we had $111 million in offsets. Depreciation, stranded costs, inflation, and temporary operating impacts are examples of such offsets. Underlying explosives EBIT rose from $300 million in financial year 23 to $485 million in financial year 26. We exit financial year 26 with a run rate of $510 million. That puts us at 70% of our $300 million uplift ambitions. By the end of financial year 27, we expect that run rate to reach about 85% to 95%.

9:55 We remain on track for the $600 million ambition in financial year 28. This is not the result of any single action. It comes from stronger commercial delivery, lasting change to our operations, disciplined growth, and a more focused business. As we show it in our recent Invest Today, we see five powerful megatrends supporting long-term growth across our markets. Electrification and the energy transition are driving critical minerals demand, with copper material moved expected to grow by around 50% from 2021 to 2031.

10:41 Supply chain security is also driving investment, with around $30 billion mobilized for critical minerals reshoring in the United States. At the same time, more than 1 trillion of AI-related infrastructure investments is projected over the next three to five years, supporting demand for commodities, material, and energy. Declining oil grades, down an estimated 6% to 8%, are increasing the need for productivity, technology, and technical expertise. And in defense energetics, The market is expected to double by 2035, creating a compelling adjacent growth opportunity. Importantly, each of these trends aligns closely with our capabilities and competitive strengths we have, giving us confidence in the long-term outlook for our business.

11:39 Our growth is gaining traction through customer wins in metals and in the priority regions we share at our investor day. Metals rose 70% in 26 measured by revenue. The share of Exposys revenue grew by 4 percentage points. In North America, Metals revenues rose 29% as we brought in new customers. Canada delivered revenue growth of more than 40%. New operations including Agnico Eagle's Hope Bay and Skinner's SK Creek In Australia, we won more than 10 new Hasbrox sites over the past 12 months. We continue to grow our presence in WA.

12:25 In Asia, the Capital Light model is now operating in Malaysia. We see further opportunities in PNG, the Philippines, and India. Across Africa and Latin America, we won four new sites, including projects in Ghana, Tanzania, and Brazil. These wins show that we can achieve when we bring together global customer ties, strong local delivery, and technology that sets us apart. In Africa and Latin America, we are moving from winning contracts to setting up operations and delivering services. In Ghana, services began in September at Anglo-Global shanties Oboazi and the Doapriene operations.

13:11 Local emulsion production in Nidua Priene is planned for the first quarter of financial year 27. In Tanzania, services at Gita are expected to begin as the on-site unit is brought into service this quarter. In Peru, we aim to bring the ILO emulsion plant into service also in the first quarter of financial year 27. In Brazil, operation at Vale's Fabrica site are also expected to begin before the end of calendar year. These leading global customers give us a firm base for growth in these regions. Our approach is disciplined and makes careful use of capital.

13:58 Premium technology helps us deliver more value to customers, better quality revenue and stronger earnings. Electronic initiation system volumes increased 11% in financial year 26, as customers continue to convert from legacy systems and new customer wins support of further adoption. Our premium products earn margins about 1.2 times those of standard products. They help customers improve productivity, rock fragmentation, and operating performance. Use of Nobel Fire rose 19%. Customers are making greater use of digital tools to plan, carry out, and improve their blasting.

14:43 The aim is not simply sell more product. It's to deliver more value to customers and build earnings that are stronger and more resilient. The autonomous bench shows technology strategy in action, solving real problems for customers. The solution is designed to automate dipping, priming, loading and stemming while allowing operations to be supervised from a control room. This keeps people away from high-risk areas, supports continuous operations, and uses data to deliver more consistent blasting results. The autonomous equipment has now been built. With our partner, Mariana Minerals, we plan the first site trial by mid-2027.

15:32 This solution is a key part of a fully autonomous mining operation. Other customers are already showing early interest in the technology. This is a practical demonstration of how our proprietary technology, digital capability, and customer partnerships can create a meaningful competitive advantage. Energetics opens a new path for growth alongside our core business. Our assets, expertise, and operating systems gives a strong base to compete. At Graham Kentucky, two U.S. government-funded projects are building that new growth platform. The TMT project is worth $435 million U.S.

16:18 dollars. The IMS project is worth $581 million U.S. dollars. Together, they represent about $1 billion U.S. dollars in government-funded investments at Graham. The IMS projects being delivered through Nitrodyne are a 50-50 joint venture with Palagine. Combining Dino Nobel's manufacturing capability with Paragen's defense contracting expertise. The value goes beyond a new source of earnings. The TNT and IMX facilities will strengthen U.S. security of supply, increase vertical integration, and reduce our reliance on imported critical raw materials. The model is designed to deliver recurring earnings through product margins on offtake or tolling fees on government demand.

17:10 The TNT projects moving through detailed engineering, permits, and site preparation. First production is expected in late 2028. First IMX production is expected by 2030. Our financial year 31 group ambition of 800 million EBIT includes about 30 to 40 million from North American energetics. At Graham, the IMX project takes us into advanced energetics materials. The project includes five small plants, making materials such as RDX and HMX. These can be used on their own or as components of IMX-104. This gives us more ways to serve governments, defense contractors.

17:57 It also allows us to supply raw materials for our own commercial use or for sale. In Europe, Vonges gives us an established base with a long history in energetics. and Deep Technical Expertise. European demand for energetics is expected to roughly double between 2026 and 2035. More manufacturing capacity will be needed. We are exploring a new energetics facility at Vanges. Off-site talks are moving forward with potential customers in Europe and NATO-aligned customers. Process and engineering options remain under evaluation and in the next stage we will define the preferred concept, development pathway and commercial approach.

18:45 We will remain disciplined and progress opportunities where our capabilities create a clear advantage and where the returns justify the investments. I will now hand over to Nitesh who will cover the financials. Thank you Mauro and good morning everyone.

19:05 In this section, I'll take you through the FY26 financial performance, investing activities, and the balance sheet. I'll finish with the FY27 Dino Nobel outlook. On slide 22, FY26 was a strong year for the Dino Nobel business, and we exit the year on crack to deliver the $600 million EBIT ambition in FY28. We spoke to you about the next horizon of growth to FY31, and our 800 ambition but recognize the first step is 600 by FY28. Underlying explosives EBIT increased 12% to $485 million driven by record performances in DNA and DNAP.

19:54 Our strategic joint ventures also performed strongly. JV income increased 16% year on year to $93 million and JV Tax Adjusted EBIT across the explosives business reached $518 million. I'll talk more about JV Tax effect later in the section. The transformation program delivered $51 million of net benefits in FY26, taking the exit run rate to 70% of the $300 million uplift ambition. Explosives revenue increased 10% supported by long-term customer relationships and a forward contract order book of around two times FY26 revenue.

20:46 That forward coverage does not include energetics and provides a strong visibility over the underlying revenue base. Moving to 23. The business has built strong momentum since FY23. Underlying EBIT has increased from $300 million to $485 million, representing compound annual growth of around 17%. ROIC has improved by approximately 90 basis points over the same period, with FY26 explosives ROIC at 6.7%. Underlying EPS for the explosives business has increased from around 7 cents in FY23 to 18 cents in FY26, supported by earnings growth and the share buyback program.

21:42 Our forward contract value is an important metric for us. It reflects the trust our customers place in us and the resilience of our earnings through committed contracts. This stands at approximately two times FY26 revenue. These indicators show the combination of transformation-led earnings growth, disciplined capital allocation, improving returns, and strong revenue stability. Moving to slide 24. At a group level, revenue was $3.9 billion, down 26%, reflecting the sale of Phosphate Hill in FY26 and the IPF distribution business in FY25.

22:29 Explosives revenue was $3.4 billion which grew 6% year on year with operating margin increasing 3% to just over $1 billion. Group EBITDA excluding individually material items was $778 million and EBIT was $504 million. Within that result, Explosives EBIT increased 17% to $485 million, reflecting the underlying momentum of the transformation program and the impacts of the FY25 turnaround in the comparator. NPAT excluding individually material items was $331 million.

23:15 Individually material items were $265 million after tax, mainly relating to the sale of phosphate hail, fertilizer exit costs, and the impairment of loans associated with the receivership of QPM, a gas supplier to DNAP. I want to reiterate that through comprehensive security arrangements, gas supply to Murumba is secure, and we are working with the receiver to maintain a sustainable supply to Murumba. After those items, statutory net profit was $66 million, up from a $53 million loss in FY25.

24:04 Moving to slide 25. Now moving on to the underlying explosives business. No adjustments have been made for FY26 reported XIMI numbers. We have normalized for turnarounds in FY25, which is why headline EBIT growth was 17%. Underlying explosives EBIT increased 12% to 485 million dollars with record performances from our two largest business units. Excluding foreign exchange impacts, explosives revenue increased 14% and EBIT increased 16%. DNAP revenue increased 11% to 1.3 billion dollars and EBIT increased 10% to 281 million dollars.

24:57 The metals segment was the primary driver of growth contributing approximately 66% of the total revenue increase supported by strategic customer wins and successful renewal of key contracts. DNA revenue increased 13% to $1.9 billion and EBIT increased 19% to $224 million. FX has impacted the translated results for DNA In local currency, the performance is better reflected, with revenue growth of 21%, operating margin growth of 8%, and EBIT growth of 28%. The standout growth was supported by sales of surplus ammonium nitrate during a period of tight supply, the resumption of booster sales following TNT shortages in FY25, and continued demand across key customer segments.

25:56 Demand was also higher as several major customers entered periods of increased pre-stripping activities. The operating margin was impacted by tight AN markets in half two, with higher third party purchased AN to meet customer demand in the US. DNEL experienced a more challenging trading environment. Revenue reduced 12% to $287 million. This is mainly driven by the European performance which was impacted by disruption to key shipping routes arising from the Middle East conflict which constrained international exports as well as economic conditions in France and Turkey.

26:48 Latam declined 2% due to severe weather conditions in Chile. DNEL EBIT reduced to $18 million, reflecting the revenue impacts mentioned, together with investments in market entry. This remains a strategic focus for Diana Nobel, with new customer mobilizations expected to recover this result. Across the group, transformation initiatives in pricing, procurement and operations delivered structural cost reductions and efficiency gains. JV income increased 16%, reflecting strong performance from our North American partners and rocked record earnings from QNP for its financial year ended 30th June.

27:42 JVs remain a vital part of our strategy and it's important to note that the post-tax impact to our earnings diminish our EBIT. and has a material impact due to the strategic choice of operations through JVs. This impact is $33 million in FY26 due to the growth in this channel since FY23 and into the future with our defense JV, Nitrodyne. This needs to be considered for valuation purposes. We have included a slide in the appendix to illustrate this. On a tax-adjusted basis, Total explosives EBIT was $518 million up 12% from $464 million in FY25. Moving to slide 26. FY26 capital expenditure was $282 million within our guidance range of $265 to $285 million.

28:46 The program included $124 million of sustenance capex, $60 million of digital and technology, and $86 million of capex supporting customer growth. For FY27, capital expenditure is expected to increase to approximately $370 to $420 million. The range reflects scheduled turnaround expenditure, customer growth, technology investment, and the next phase of our energetics program. This includes approximately 40 million US dollars for the Cheyenne turnaround and approximately 20 million US dollars for defense and energetics investments. The FY27 range also allows for potential customer wins and growth initiatives with capital continuing to be deployed selectively against expected returns and strategic priorities.

29:42 These investments are consistent with the capital allocation framework we discussed at our investor day in September. Moving to slide 27. Overall, the balance sheet remains solid with both ratings agencies acknowledging the improved credit quality post the completion of separation. We retain investment grade credit ratings of BBB from S&P and B882 from Moody's with both increased leverage headroom to 2.75 times in the year. Trade working capital was 19.2% of revenue, broadly stable against 19.5% in FY25, while cash conversion at 36% has been impacted by fertilizer separation and higher inventories to manage the volatility in the year. Going forward, we expect the long-term cash conversion post-interest and tax to be in the range of 60% to 75%.

30:49 Explosives earnings per share, excluding IMIs, increased 56% to 18 cents, reflecting the transformation, non-turnaround year, and the successful buyback program. This is clearly visible in the explosives ROIC, which improved to 6.7% from 5.2% in the prior year. Net debt was $1.5 billion and net debt to EBITDA was 2.1 times within our 1.75 to 2.25 policy range. On-market buybacks returned $574 million through the program, purchasing 191 million shares at an attractive average price of $3.00.

31:38 We have announced a final dividend of 5 cents per share, 50% franked, taking the total FY26 dividends to 9.6 cents per share. Now turning to the outlook for FY27 on slide 28. We currently expect underlying EBIT in the range of approximately $515 to $555 million. We expect underlying The outlook assumes borrowing costs of approximately $105 to $120 million, an effective tax rate of approximately 20 to 25%, and capital expenditure, as mentioned, approximately $370 to $420 million. It also assumes AUD to US dollar exchange rate of 70 cents Corporate costs of approximately $45 to $50 million and an FY27 transformation exit run rate of approximately 85 to 95%.

32:49 In Asia Pacific, we expect the benefit of higher Murumba production volumes following de-bottlenecking partly offset by the QMP turnaround in the first half. In North America, the Cheyenne turnaround is scheduled for the second half with deep bottlenecking projects at Cheyenne and Lomo expected to complete during FY27. In EMEA and Latin America, we expect operations to scale in Ghana, Tanzania and Brazil. Net debt to EBITDA is expected to remain at the top end of our guided range of 1.75 to 2.25 times. I'll now hand over to Mauro to close.

33:38 Thanks Nitesh.

33:40 Let me close with a clear message. These results show why we have confidence in Dino Nobel's future. We are now a focused, peer-play, explosives business. We have resilient growth, strong contractual protections, and leading positions in attractive markets. Safety and reliability comes first. They earn our customers' trust, support our performance, and give us the foundation to grow. Long-term demand is working in our favor. The world needs critical resources, infrastructure, and smarter mining solutions. We are building growth across multiple pathways, which include our established North American and Asia-Pacific businesses, priority markets in Canada, Western Australia, Asia, Africa, and Latin America.

34:32 Our strength lies in what we bring together, premium technology, A network of privileged assets, deep customized and experienced people who can deliver. Our transformation is building stronger earnings, better margins and better ways of working. At every step, disciplined capital allocation guides our growth decisions. 2026 was a strong year. We completed our move to a peer-play explosives company and enter financial year 27 with clear momentum. The ambition is clear, $600 million in EBIT by FY28. We remain on track, and we're laying the foundations for the next phase of growth beyond FY28.

35:18 Thank you for your time and your continued interest in Dino Nobel. I'll now hand back to the operator. Operator, can you please remind callers how to ask a question in the Q&A? Thank you. For those listening by phone and would like to ask a question, please press star followed by 1 on your telephone keypad to raise your hand and join the queue. To withdraw your question, simply press star 1 again. When called upon, please use your handset or headset, ensure your line is unmuted and be ready to ask your question. Again, that is star 1 to raise your hand and join the queue. And your first question is from the line of Ramoon Lazar from Jefferies. Please go ahead.

36:06 Good morning, Mauro and Nitesh.

36:08 A couple of questions for me, just maybe starting with the 27 guidance.

36:12 If you could just talk through some of the end markets, some of the moving parts. I know corporate costs are higher than I think what the street was expecting. Perhaps there's some temporary factors in there as well. And then also, you know, your first half, second half split is... More to the second half than normal. Maybe just talk through that as well, please.

36:34 Yeah, I'll leave. Thanks, Ramon. Good to talk to you. Look, the second half, first half, has to do with the turnaround on Cheyenne. Other than that, all the usual weather-related events in the first half remain. So we guided to that with and without the turnaround for people's reference. In terms of end markets, look, we still see strength in our core markets of Australia and U.S. So if I start with the U.S., we still see tight markets for ammonium nitrate. That hasn't changed, and we hope that we can see continued growth in that market. In Australia, we have seen, again, strength on the domestic markets.

37:22 The market is very well balanced, probably as balanced as I've seen. And we see still spot trading when you look at the import tariffs at around $1,000 landed in Morimba. So those are the fundamental bases of our forecast for financial year 27, where we see that $30 to $70 million opportunity to keep growing our earnings year on year. I'll let Nitesh answer on corporate costs, and much of that has to do with some sticky stranded costs year on year to do with the divestment of fertilizers.

38:08 But Nitesh will give you a bit more detail on the corporate costs. Thanks, Mauro.

38:13 Thanks Ramon for the questions. Just to touch on your first half, second half split, as you know we do have lots of weather impacts in our business so we've used the basis of our long term average so that's an estimate from outside at this point in time. As far as corporate costs, we updated Some of the offsets in our 26 results to demonstrate that we had approximately $5 billion impact this year. Next year, we also have the challenge of stranded costs as we've completed the fertilizer separation work. We are working through the IGNITE program, our transformation program, to ensure that some of our operational initiatives work hard to offset that. but largely it's to do with stranded costs.

39:10 Okay, is there any other, I guess, temporary factors that you've assumed you've got for 2017 that you expect to impact the result?

39:20 Yeah, so Ramon, on slide 25, I think the two key ones to note is we've got a little bit of FX working against us, about $5 million, with an average of 69 cents this year, and next year we're planning for 70. We've also called out that included in our FY27 transformation offsets, $10 million related to scheduled maintenance at Murumba, so that's separate to that is separate to the turnarounds that we've called out specifically that impact our underlying result that scheduled maintenance of $10 million we've not taken it to underlying we've just assumed that that is part of the course of operations it's scheduled and it's not a normal factor that we would experience every year so that's two offsets to our program this year

40:21 Okay, got it. And while I've got you, maybe just on your leverage guide as well, that's also expected to come in at the top end of your range. Maybe just if you could talk through some of those factors. I guess what's driving that high CapEx number relative to expectations and do your assumptions also make any allowance or contribution from Pertman and the Geelong proceeds?

40:52 Thanks, Ramon. I think the main difference in terms of leverage being at a higher level is the separation. One major cash outflow in FY27 is the ARR payment. and we expect to make in FY27 so that is the timing of that is obviously relevant versus some of the other proceeds that we expect from the first separation so it's really the timing of some of the payments we're making in first separation one on the ARO for Phosphate Hill and second some of the remediation work that we're doing in GI in Geelong and the timing of the The expenses versus some of the proceeds that we're getting from the separation is driving that temporary heightened level of leverage. We also need to note that this is a turnaround year for Cheyenne and some of our energetic expenses are also proving to increase our capital expenditure and that leverage.

42:08 Okay, good. I'll leave it there. Thanks. Your next question is from the line of Mark Wilson of RBC. Your line is open.

42:20 Thank you very much, Mauro and Nitesh. Just interested in some of the new contract wins that you've actually spoken to. Just sort of wondering if you could elaborate upon those and how material they are likely to be as we progress and I also had a question about contract value being double that of fiscal 2016. What does that actually mean and how are you quantifying that? Thanks very much.

42:51 Good morning Mike and thanks for the question. Look, the contract wins are really exciting because they play to many of our Thank you very much. It's all predicated on our Delta E differential energy technology with electronic detonators. So it proves the point of, you know, we win when we generate additional value through technology to our customers.

43:37 The site in Brazil is smallish. The sites in Africa are very large and provide us a good opportunity for earnings growth. They set operations in countries that have traditional mining operations, especially in Brazil, Ghana, and Tanzania. So I would expect that once you have set up shop and establish an operation, that would create pathways for further growth from there. In terms of the overall... Can you ask again the second question? Sorry, I lost my train of thought.

44:18 Yes. No, that's okay. No, just in relation to contract value, you've sort of put in there that it is fiscal 27, it's double that of fiscal 26. Just trying to understand how you are quantifying that. What does it all mean? And I'll add another one there. Where was that figure 12 months ago and two years ago?

44:39 This is something that we disclosed for the first time in our recent investor day, Mark. This is the size of our forward contract book. So the way we measure that is what is the revenue that we have contracted if you look the full business forwards divided by the revenues of our previous financial year. So essentially gives you a sense of the amount of forward revenue that's pre-contracted the business. Obviously, it varies from market to market, varies from customer to customer. So you have contracts ranging from five years in your metals mining customers typically to more like one year renewals in your current construction US and you have everything in between.

45:26 So with the two years we try to give you a sense of the quality of our forward contract book. This is a new statistics that we provided for the first time in Invest Today and that's something that we expect to keep informing the market as we're moving forward. to keep a track of the quality of our ongoing contract book.

45:49 OK, thanks very much, Mauro. Your next question is from the line of Jacob Koukanis of Jardins Australia. Please go ahead.

45:58 Hi, Mauro. Hi, Nitesh. I just wanted to pick up just on Mark's question there on slide 23. Just on that forward contract value, can you break down maybe for us how much is price and mix versus volume just contributing to that place?

46:15 Maybe I'll take this one, Jacob. So this combination of both, but the intention of this is less on the proportion of price and volume, more so the fact that this is the contract value that we have in commitments from our customers. that is not reflected in our past earnings. So this will come through as revenues, as contracted revenues into the future. So it's a combination of one, the commitment in the contract and the volume and price that we've already signed with those committed contracts. So it's bringing back Mauro's point around the quality of the investment proposition here at Dyna because we have a high Thank you very much.

47:26 What it should look like next year. When do we get to steady state on the working capital side of things and then cash conversion? Is that now from FY27 and that's kind of the right 60 to 75% to think about moving forward, please?

47:42 Yes, and that's the intention. I know we've had lots of feedback from analysts and investors around volatility, around cash conversion, so going forward this year we don't utilise working capital facilities which have an impact on cash conversion historically as we had the fertilisers business. So going forward we have a far more stable perspective on cash conversion and it's consistent with the and guidance I've provided which is in the 60 to 75 percent range from FY27 onwards.

48:20 Okay and then just the difference Mauro just in the growth assumed in the guidance range it doubles the either growth year on year between the low end and the high end. I think Ramon kind of hinted on this but what are the key moving parts for the differences in the assumed growth? Is it a matter of the turnarounds falling in that $25 million expectation or are there other items outside of that place?

48:47 Well, look, it's just we're getting used to the idea of having earnings guidance and we want to provide for a budget that has different levels of risk on the implementation. So those that we're calling out that are starting now, They are all in the base, so they are the contract wings that are already booked and you should expect them to be cash flowing now in the first quarter of financial year. In the other extreme, on the high end, you have those where we have started commercial activity, the teams are confident, but again, you have a range of confidence levels. So as we do our budget, we try to have a center point where we look at those things that have decent likelihood and then obviously we allow for The next question is from the line of Lee Power of JP Morgan.

49:38 Your line is open. Hi Mauro and Nitesh.

50:00 Following on from Ramon's question around the 2-H view and the outlook, I get what you're saying and it seems like your story is pretty consistent and you've got the contract book commentary there. What are your customers actually telling you about the backdrop post the midterms, particularly in the U.S.?

50:25 Thanks. A great question, Lee. And look, we haven't seen, it's probably too recent to tell, but we haven't seen any sign of change on the megatrains or any indication that the fundamentals that were driving them would change, whether it's in the defense energetics, whether it's in the AI investments. All indications, even pre the elections, suggested those things were in a way bipartisan and you wouldn't see those fundamental changes about reshoring critical minerals or reestablishing sovereign capacity in ammunition. We don't see those things fundamentally change by either side of the aisle. But obviously we'll keep an eye on that and report back as we see the progress. But so far our bigger customers, many of which were represented on Invest Today, remain Quite positive about the long-term outlook.

51:27 Okay, that's useful, thank you. And then just on the energetic side, are there any differences in off-take contracting in Europe versus the US? Like I'm thinking about things like are they take-or-pay commitments? Like how do you actually, you know, how do you think about the certainty of an off-take

51:53 It's a great question, Ali. We typically, it will be a different model from the U.S. The U.S. model is what we call the Gold Coal where the government has invested in the facility and they naturally take all the needs, the desire for their own capacity. Whilst in the Europe market where first you have multiple countries relying on capacity and they and they tend to not have the same scale as the U.S. comparatively. What typically happens is we would make the investment and then we would rely on off-take arrangements typically with the primes, the people that will be dealing with the different governments on their ammunition planes. So you would expect us to in time come with a number of off-take agreements with prime companies in Europe that would Thank you. Appreciate the call.

53:17 The next question comes from Harry Saunders of E&P. Please go ahead. Good morning. Thanks for taking my questions. Firstly, just wondering with the weaker DNEL results, can you talk through your expectations for the business baked into the FY27 guidance and contribution maybe to the $600 million target now, please? Thanks, Harry.

53:42 Look, I would start by saying 26 has been a disappointing year on D&L, and we were very direct that we would expect for 26 a bigger contribution coming from the asset. There's probably three things that, as Nitesh pointed in his presentation, underline why we had somewhat disappointing results. The weakness on the French and Turkish infrastructure domestic markets, much like the story of other European countries that saw infrastructure investment declining. We also had some difficulties exporting products out of Vonges into other markets in Europe, much driven by shortage of shipping given the trade of almost crisis.

54:32 We would hope that those things reverse throughout this year and we have a more normal based European business. And other than that, really, the growth that I outlined, whether it's from the new built ELO plant in Peru, the start-up of Gita, Oboazi, and Indoprien in Africa, and the business in Brazil growing now with the first announced contract with Fabrica. So all those things give us confidence that financial year 27 should be a better year for the NEL, but we accepted the financial year 26 results were not what we expected. Can you give us any more? Would we get back up to, say, 25 levels there or too early to tell?

55:22 We don't guide, Harry, by end market, but you should expect us to be reversing the reduction from this year. Okay, thank you. I'm just wondering on CapEx, how we should perhaps think about more normalised CapEx in 28 when delivering that 600 million targeted EBIT. You know, are we just pulling out the 40 million of turnaround CapEx this year or other things to consider there, thanks?

55:55 Thanks Harry. I think when you look at some of the material we shared at our investor day, we would see capex intensity reducing over the next five years. So I think next year is kind of pulling back the turnaround spend for Cheyenne is key. We show a turnaround schedule in our appendix for some major and minor turnarounds so that will help you out on some of the longer term outlooks as far as turnarounds are concerned. But generally and on the slide we show that capex intensity from a capex to revenue basis was around 8% and we would expect that to decline in the coming years. Thank you. Final question, just if you could talk about and how the supply-demand and A&S pricing backdrop in the two major geographies panned out over the last six months. How it's currently tracking when you expect that North American tightness to persist until and I mean does the guidance anticipate sort of a headwind comping the one-off spot sales in 26 or are you sort of expecting a similar benefit? Thanks.

57:14 As I described earlier, Harry, we expect the ammonium nitrate market to remain very balanced, so we don't see the transfer we described earlier in the half-year results reversing into financial year 27. The plant that was down in the US is still not back, and to my best knowledge, there's no plan to bring it back in the short term. Obviously, the market finds new sources and has been... A number of imports into the U.S., which is not usual. And in the Australian market, there hasn't been any change. So you're still seeing import parity at Australian ports at around $9, $9.50 per ton, and then landed in Morambar at about $1,050. So, look, that's the premise of our planning. Really no major change from financial year 2016.

58:11 which was a strong year. Just as we grow in the U.S., we need to understand that some of the volumes that we serve in the U.S. is on trading. So we will have the tailwind of prices as we re-contract new customers into the U.S. But we only take the short-term opportunity for any spot funds we have available. So obviously that will be a Thank you. Your next question is from the line of Brooke Campbell Crawford of Baron Joey.

59:05 Yeah, good morning. Thanks for taking my question. I just had one on the $25 million estimated turnaround impact. Just want to check if that's a fairly locked-in number that wouldn't have much variance around it. You know, maybe it's only a couple of mil, or if this is something that you've needed to make some estimates around A&M producing and ammonia, and the variance could be, you know, 5 to 10 mil or so around that 25 mil estimate. That would be great, thanks.

59:34 Thanks, Brooke. Look, we have been, it's not the first time we are forecasting turnaround. So I think we have some decent level of understanding of what that looks like. So I would say we have a good handle on that number. And that's essentially the Cheyenne, plus the impacts of the QMP turnaround that is also happening these years. As Nitesh said in his presentation earlier, QNP and the other those in the SOF JVs we have is an important part of our money so every time that one of those JVs have a one-off it has an impact on our numbers so yeah we have a good handle of those and I don't expect that to be very much outside this 25 million that we got.

1:00:28 That's great, thanks. And just on market share, I mean, you guys seem to be winning more contracts than you're losing, and there's lots of good anecdotes you provided today, and I'm sure you'll invest today. Is there a way you can sort of simplify it for us, maybe like a market share number that you would estimate you have at the moment, and maybe comparing that to a couple of years ago, perhaps, before some of these games started to slow through? Any thought on that would be helpful, thanks.

1:00:56 Thanks, Brooke. As we disclose more, obviously, there's obviously an appetite for more and more information. So we do our best to give you a sense and give you data where it's relevant. I would say that, especially on the growth markets, that's where I would put your attention. We told, for instance, that we have increased our metal revenue in Canada by about 40%. Some of that comes out of new operations, greenfields, brownfields, but also and many more. In the mature markets, we have been very disciplined in price. We win on the basis of value creation.

1:02:03 So we win some, we lose some, and we have seen some growth year on year. But fair to say, not as market as the markets that we highlighted in our presentation.

1:02:17 That's great. And then just one last quick one. Indonesia was a soft market and That's all 26. I know it's not a huge market for you, but it was sort of one of the kind of weak points globally, I think, for all players. What's your assessment at the moment? Are the conditions sort of recently picked up and look a little bit better, or do you think it's still going to rain pretty challenging in Indonesia for the year ahead?

1:02:40 Look, Stuart was there last week, and we have been investing in the country, including some emotional manufacturing with a partner. Our view of the market is it's firming up. I won't comment on the strength of the currency. Obviously, that has been a big factor for this past year. So it's really difficult to forecast what will happen. But those recent situations where they have done some exports and bans which impacted the market to some extent, we've seen those things tempering down and we expect a more normal year out of Indonesia. Your next question is from the line of Nirad Shah of Goldman Sachs.

1:03:29 Please go ahead. Good morning, Mauro and Nitesh. I might come at the D&EL questions a different way. You've called out 35 to 50 million priority growth markets in terms of the contribution to FY27 transformation. I guess how much of that should go to D&EL versus, say, Canada, for example? And how much of that is underpinned by contracts you've already signed?

1:03:57 Again, you're asking the same question in a different way. I appreciate that, but we haven't guided by end market. Giving earnings guidance for us was a big step, Neeraj. I think we'll probably stick to group level earnings guidance, but to your second question, think about the $35 million at the bottom of the range being the run rate of financial year 26 plus the ones that we have This flows that are in the process of starting operations, so what we'd call low-risk growth. So we're pretty confident on those. And the top side of the range are activities, commercial activities that are underway with various degrees of probability. So we try to give you a range of success.

1:04:47 And typically what we do is we put the low-risk growth opportunities in the bottom end and the more high-risk opportunities in the top range. Fair enough. And just a quick one for me on DNA. It looks like QNC and metals held pretty solid momentum in the second half, but I could be wrong, but coal seems to have slowed a bit. I was just wondering if you could comment on that and how you're seeing that coal and market in the U.S. in particular into FY27. Yeah, I think your comparison is right.

1:05:24 The way you're portraying that metals in quarry construction have been strong year on year and half on half, not as strong as coal, which is not surprising. We saw coal having a bit of a comeback in the first half, and we described that some of that had to do with prescripting activity that people do in advance of resuming mining operations. We saw that now more often. more tempered half-and-half. Year-on-year, it was a 10% growth for coal, which, again, is a change on a declining year-on-year trend that we've seen for a few years. But I agree with you that compared to quarrying construction in metals, not as impressive growth as we saw in those other two markets, which is not necessarily a bad thing. As you know, Neeraj, comparatively, quarrying construction in metals are Our best mix give us the best yield, the best margins per ton. So we don't mind when the mix moves into more quarry construction and metals.

1:06:31 That makes sense. And then final one for me. From memory, Kentucky TNT was still pending definitization before construction could commence. I guess in addition to the pre-engineering work, what sort of milestones need to be hit before you actually start construction on that TNT facility?

1:06:49 No, I'm happy to confirm the definitization is now complete and we are starting construction early next calendar year. So it's all systems go in that space, right? Great, thank you. And a reminder, before we move on to the next question, if you would like to join the queue, press star 1. And your next question is from the line of Scott Ryle of Primal Equity Research. Please go ahead. Hi, thank you very much. Hey, Nitesh, I'm just giving you a heads up. My second question is going to be on Note 17 from your account, just so you can get that up. The first one is to Mauro.

1:07:34 Mauro, you've set out the industry megatrends for the business. You've set out your investment priorities for the next year or two and you've stressed the investment discipline. If I look at slide 25, which is where you've got the summary of the splits between the different geographic divisions, I was wondering if you could look out a little bit further on a kind of three- to five-year basis and just... Talk us through the investment decision making that you're thinking about now, just in terms of where the more attractive geographic markets are for you to invest for the longer term, please.

1:08:22 Thanks, Scott. Let me start to answer your question in a different way. Let me tell you what we're not investing in. We're not investing in low returns. have infrastructure business like ammonium nitrate in the next three to five years. We believe the market long term is well balanced and we need to return better returns on our existing infrastructure and play on capital-like growth opportunities, especially on markets where ammonium nitrate is naturally traded. In case in point, I made all this preamble to talk about things like ILO in Peru. This is a growing market for mining globally. I have been there just a few months ago to cut the ribbon on our new emulsion plant. But when you think about a new ammonia nitrate plant, you're talking about probably $1.2, $1.3 billion if you were to bring new capacity of the scale that we have. Whilst a new emulsion plant is about tens of millions of dollars, and as everyone else, you are importing ammonia nitrates in the country. So you're really competing on the basis of technology and the quality of emulsion. Thank you very much.

1:09:57 We see Europe Energetics doubling in the next five years, and there is a window opportunity to fulfill that necessary growth that we'll see in the manufacturing capacity. Obviously, we'll do that in disciplined ways. As I got a question just a few minutes ago, we won't be doing that unless we have some security of supply and some understanding of offtake from people that are interested in the plant, and we'll have more to say about that in the next few months. Now, in terms of technology, the thing that makes me most proud is when we make investments over the years and it pays back like what happened with the autonomous bench. We this year launched industry first ability to make autonomy a reality in the last moving part on the mining segment, which is the ability to do everything we do in a bench without any Any people involved. And that investment is now a reality.

1:11:00 It's starting to be tested next year in Mariana Minerals. And with lots of interest of the big miners globally, to be honest, we have more demand than we can probably deal with in the short term. We're really now coming back to the drawing board to think about how we can accelerate the implementation of what has been a very successful launch. So think about technology. Think about... Thank you very much. Just on any particular geography that you're seeing as attractive, it's more the end market and where you see the opportunities for those end markets you've just described.

1:11:50 Is that a fair way of thinking about it?

1:11:52 Yeah, think about following our customers and following growth. So, for instance, I don't want to discriminate against our mature markets because as much as they are mature, there's lots of growth in Asia Pacific and in America. In case in point, places like Malaysia where we've grown from nothing to a somewhat meaningful presence in quarrying construction, or Canada that grown year on year 40% in metals. So even the mature markets have lots of opportunity to continue to grow. But fair to say that on a very low base, Latin and Africa remain the biggest relative opportunities for us. So we're not shy to put down capital on, and again, on the basis of tens of millions of dollars of emotion plants, in places like Peru, in places like Brazil, in places like Ghana and Tanzania.

1:12:43 Those are likely to be disproportionately important given what's happening on the mining activity on those markets. But notwithstanding those growth markets, more mature markets are not shy of opportunity in places like Canada and WA. Okay. That's a really helpful answer. Thank you. So Nitesh, hopefully you've got the provisions note up. I'm looking at the footnote number one, just on the Fossate Hill sale agreement. Just after some confirmation as to the provisions and potential ongoing liability, have you now ruled this off? So this payment... that you've made the $125 million of funding support for future rehabilitation and remediation. Does that rule off Dino's exposure to the phosphate bill, please?

1:13:41 Yeah, that obligation following the payment of that asset retirement obligation passes to Mayfair. Okay, great. So no kind of potential... You know, residual liability or anything like that as far as they're concerned.

1:14:01 I think when we concluded the sale, our assessment is that that concludes our residual liability. Okay, excellent. Thank you. That was all I had on that one. Thanks very much. Your next question comes from the line of Ben Wed of Macquarie. Please go ahead. Hi both, thanks for the time. Just a couple of quick ones from me. Just in the DNAT business there, any observations on Indonesian cold vans going into FY27? I know you've detailed how it's a pretty soft market in FY26.

1:14:39 Hey Ben, as I mentioned before, we expect the FY27 situation to be normalised. So volume-wise, we expect the financial year 27 to be a normal year for us. As I said, difficult to comment on The translation impacts on Aussie dollars, but in terms of volume and price, we don't see any change year on year. Yeah, great. Thanks, Bruno. And then also just looking, thinking about the contract or re-contracting cycle here. So what are your sort of expectations for pricing and predominantly speaking in the DNAT business into the next year? And maybe you can frame that in terms of what percentage of the contract book is up for renewal if it's possible.

1:15:24 Yeah, thanks, Ben. Consistent to what I discussed before, we're not up for renewal next financial year. So we have, and that's part of the two years contract life that we mentioned earlier today. But the DNAP sustaining price stays very healthy at about $1,000 landed in Morimba in terms of import parity. I would say that if the conditions remain unchanged, I would expect that the next recontracting cycle would give us another opportunity to play catch up and to have another bite of the cherry. Probably not as substantial as the last one where there was a correction, but it's still an opportunity to get nearer that current spot price level.

1:16:14 Thanks very much. Appreciate the talk. And that concludes our Q&A session for today. I would like to turn the call back over to Mauro for closing remarks.

1:16:26 Thanks for your interest. I look forward to meeting many of you the next two weeks as we go in our roadshow. Couldn't be prouder of the year we just finished. It was our first year giving any guidance to the market coming to full year, being able to report being squarely within the guidance. having just come out of investor day showing the capability of our team and if I could just drop a last line here to thank everyone in Dino Nobel for their efforts team that wouldn't be possible with each of you so now I'm speaking to the 25% of our workforce that's chosen to be with you investors part of the investors of our company so my big thanks for the Dino Nobel team and their efforts to bring together these results and We are ready in delivery mode for the next year.

1:17:16 So thank you everyone and see you in the road.