• Robust earnings and margin growth, with EBIT margin of 15.6% up 30bp
• Increasing operating cash flow, with EBITDA cash conversion of 98% up 23pp
• Leverage reduced to 1.91x, below target range
• Strong performance across Industrial Services businesses, led by Boral and WesTrac

SGH Ltd reported its H1 FY26 results, with revenue of $5.4 billion, roughly flat in variable market conditions. EBIT margin improved to 15.6%, up 30 basis points, driven by ongoing profitability improvements at Boral and WesTrac. EBIT of $844 million was flat, delivered against abnormally high WesTrac capital sales in the prior corresponding period. Early-stage demand recovery was observed in core sectors. The Industrial Services division reported EBIT of $774 million, up 1%, led by Boral and supported by margin expansion at WesTrac. Operating cash flow increased 32% to $1,084 million, with EBITDA cash conversion of 98%, up 23 percentage points. Leverage, as measured by adjusted net debt to EBITDA, improved 4% to 1.91x, below the target range. Safety performance improved, with LTIFR of 0.7 and TRIFR of 2.7, down 36% and 31% respectively. WesTrac reported revenue of $3 billion, down 6% on expected normalisation of elevated capital sales, with EBIT of $348 million flat. Boral reported record first-half EBIT of $284 million, up 10%, with margin expansion to 14.7%. Coates revenue contracted 5% to $520 million, with EBIT of $142 million, down 9%. The company's energy and property investments also contributed to the overall result.

SGH expects the strong demand and operational momentum across its Industrial Services businesses to continue, supporting further margin expansion and cash flow generation. The company's energy investments are also expected to contribute positively, with the Waitsia gas project ramping up production and the Crux LNG project advancing.

SGH is well-positioned to capture the significant infrastructure and construction pipeline in Australia, underpinned by its market-leading businesses, operational excellence, and disciplined capital allocation. The company is also focused on pursuing value-accretive growth opportunities, both organically and inorganically, to further strengthen its diversified portfolio.