CAR Group (ASX:CAR) Q4 2026 Earnings Call

0:00 Thank you for standing by and welcome to the Car Group Limited FY26 results. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. William Elliott, CEO. Please go ahead. Good morning, everyone, and thank you for joining us for Car Group's FY26 results presentation. Over the next 30 minutes, I'll provide a summary of our results and strategic progress. Car Group's new CFO, Jeff Trumbull, will take you through our financial highlights, and then we'll finish with a Q&A session where we'll be joined by members of our global leadership team. And joining Jeff and me in the room here today in Melbourne are Craig Fraser, Managing Director of Car Sales Australia, Eduardo Josevic, CEO of our newly established region, the Americas, which I'll talk to shortly, S.B.

1:01 Kim, the Chief Executive Officer of NCurrent South Korea, and Rachel Scully, our Executive General Manager of Investor Relations. Turning first to slide five, from a financial perspective, the group delivered another excellent year with 12% growth in both pro forma revenue and EBITDA and constant currency. Adjusted net profit after tax increased 11%, which was also in constant currency. Margins were strong at 56%, and EBITDA operating cash conversion was also excellent at 100%. The next chart reflects the consistency of our financial performance. Across the last five years, we've delivered compound double-digit growth in pro forma revenue, pro forma EBITDA, adjusted net profit after tax, and adjusted EPS.

1:48 And that consistency comes from our strong market positions as well as continued reinvestment in new product development and our brands. And that track record extends well and truly beyond five years. Car Group has an incredible history of delivering growth through multiple economic cycles and this reflects our history of sustained innovation as well as the strength of our business model as well as our M&A strategy of moving into high growth markets. On to our strategy, which remains consistent and it all centres around delivering exceptional experiences for the buyers and sellers who are on our platforms. We are strengthening the core of our business. We're extending it into new products and experiences and we're investing in future growth. And underpinning everything is our relentless focus on operational excellence with AI increasingly becoming the enabler of this.

2:42 Turning to our operational highlights. The core of our business is consumer engagement, and all of these metrics remain exceptionally strong. We've seen healthy levels of vehicle inventory across our key markets, which provides great choice for our buyers. Our dealer base has grown nicely, which proves that our value proposition is resonating with our customer base, and our audience metrics are also very strong, particularly in the US market. Our diverse portfolio continues to be a key strength of our business. and this year we brought together North America and Latin America into a single America's operating region. Eduardo Josevic is leading this new region with the leaders in each country now reporting into him. And as we grow our role in the ecosystem across Brazil, the US and Chile, bringing these markets under common leadership makes sense.

3:31 They're in similar time zones and they face common challenges and it also allows us to carry product and technology innovation from Brazil into the non-auto vehicle segments in the U.S., where the market is less digitally mature and the opportunity is massive. Congrats to Eduardo on his new role, which he thoroughly deserves and reflects the incredible growth that he's delivered in Brazil over many years, and I'm sure he'll deliver into the Americas over the coming years. To our outlook statement, and based on the momentum we've seen through FY26, and our performance over the first five weeks of FY27, we expect another year of excellent growth. We are guiding to revenue growth of 11% to 14%, adjusted EBITDA growth of 10% to 13%, and adjusted impact growth of 9% to 12%, and all growth metrics are in constant currency. And we remain confident in both quality of our business as well as the multiple growth opportunities we have in front of us.

4:30 Turning now to some of the strategic highlights from the year. There are four key areas that underpin our market leadership. First, it's our number one brand and the significant audience advantage that we have in every market. Second, we are deeply embedded in the vehicle ecosystem across dealers, consumers, OEMs and other commercial partners. We've also strengthened that ecosystem through organic product development as well as targeted acquisitions and we're going to keep doing this. Third, those market positions and integrations give us our proprietary data at a significant scale. We're already using this data to create better outcomes for customers, whether that's simplifying payments and financing, helping dealers manage and convert leads through CRM tools and lead nurturing.

5:18 We're creating safer transactions through verified buyers and sellers, and we're delivering more personalized solutions for customers, including recommendations. And this leads to the fourth advantage. AI is accelerating our ability to turn our data into better products, better tools and customer experiences. And taken together, these strengths are incredibly hard to replicate. They've been built over many, many years and are tied directly to the scale and depth of our marketplaces. In terms of our audience, every month more than 52 million people use our platforms and we hold clear leadership positions in every major market that we operate in. That scale creates real value for our dealers for our OEM partners and for our consumers, and it generates the data that we use to keep making that experience better.

6:11 Our advantage is built on the depth of our marketplaces and the infrastructure that sits beneath them, which you can see on this slide here. Over many years, we've built deep integrations across CRM, dealer management systems, finance providers, and other platforms the vehicle industry runs on, and our recent acquisitions in Brazil and the US extend that capability, giving dealers better operational tools and market insights and making our ecosystems even harder to replicate. And for dealers, that means sharper decisions on inventory, pricing, and lead conversion. And to consumers, it means more accurate inventory, more relevant recommendations, easier finance solutions, and more confidence in the transaction. And every one of the interactions that people and dealers have on our marketplaces create richer proprietary data across our ecosystem.

7:03 And that data is what now powers CG Engine, which is our own AI built on data that no competitor can replicate, which I'm going to talk to on the next slide. CG Engine is a key part of our AI strategy. It brings together proprietary marketplace data together with AI models, and it runs on our own infrastructure. That matters because it puts us in control of how we develop and deploy AI across the group rather than depending on any single external model or provider. And it also protects our intellectual property, improves cost efficiency, and it also gives us the flexibility to move quickly between models as technology changes. It also means the products we build are shaped by how buyers, sellers, and dealers behave within our marketplaces.

7:50 And it uses data and insights that no one else has. We're going to move now to some of the products that we've launched across our business over the last year. The way consumers research and explore is changing, and it's absolutely broadening the role that we play in the journey. We're deepening our role at the top of the funnel in the research and discovery phase, and we're pairing that with our strength at the bottom of the funnel in the transaction. So we are with the buyer across the whole journey. When someone's looking for a vehicle, they'll be able to search however they want across our sites. They can use filters, they can type in plain language, or just have a conversation. The consumers using these experiences, we're already seeing higher conversion rates across the board, which you can see on this slide.

8:35 Conversion is up 26% on car sales. We've got four times greater lead submission on web motors, and we have 20% higher engagement on in-car. And what that really means is the buyers are finding the right car for them faster. We're also using AI across merchandise and sourcing to help our dealer customers be more successful and help them find the right stock faster, prices better and present every listing at its absolute best. Each one of these tools does one of two things. It grows the dealer's profit or it takes out costs from their business. Smart inquiry qualification is now live across all of our markets. It keeps dealers engaged with buyers through the whole journey, from the first inquiry through to the purchase. And it gives faster answers for buyers to high-quality leads for dealers. And the results are strong. More inquiries converting to sales and the stock is turning over faster.

9:36 For the next slide, CG Lab is our dedicated AI hub based in Brazil and it's building the next wave of opportunities across the group. The focus is absolutely simple. for CP Labs to solve real customer problems and make transactions easier. And what's in development, including things you see on this slide, which are buyer and seller agents, one-touch listings, and video listings, which we want to see as ubiquitous across our platforms. Over time, these will make a real difference to our customers' experience on our platforms. Turning now to some segment highlights from the year, and on to Australia first. Australia delivered another very impressive result with revenue up 7% and EBITDA up 8%. The growth was broad-based and was across all segments of dealer, private, media and data. And as we've all observed, the shift to alternative drive trains is certainly well and truly underway, as you can see on the chart on this slide, with EV and hybrids gaining real traction in markets.

10:37 This is playing out well for us in two ways. First, the used car market for EVs and hybrids. is starting to form nicely, and these vehicles are trading through our platforms very similar to internal combustion engine vehicles, as they always have. Second, we're seeing strong media spend from new OM entrants coming to market, and we're building a very sharp go-to-market approach to win them as advertising customers. And that growth in media revenue from new entrants, what you can see on the next slide, which is very impressive growth, And on the right-hand side of the page, C2C Payments continues to scale very well. It's now live across all our verticals and it's processed over $440 million in transactions since launch.

11:24 C2C Payments gives buyers and sellers a secure way to pay with funds protected until the deal is complete. And because the buyers and sellers verify their identity to use the payments platform, and we show that on their listings, trust goes up across the whole platform. Over the last two years, we've been transforming our dealer software, and that work has come together in a new platform. Autogate is now known as Nextgate. It's a next-generation operating system for dealers built with AI and real-time market insights drawn from live pricing, demand, and inventory data from all across the country. Nextgate brings all our tools into one place, sourcing AI pricing in time to sell insights, conversational decision support, and AI-powered lead management all together in one platform.

12:16 Dealers that mean smarter buying, faster inventory turnover, and better lead outcomes. Earlier I talked about our ecosystem at the group level, and this is what it looks like on the ground in Australia. You're going to see the same model with each of our markets, although it is nuanced and looks a little different in every one because it's shaped by the intricacies of each local market. For dealers, we're there through sourcing, pricing, inventory, and lead management. And for consumers, we're alongside them from discovery all the way through to payments and ownerships. And every one of those interactions generates proprietary data. And because we sit on both sides of the transaction, each interaction feeds the next, with dealer and consumer data compounding into a better experience for everyone to use that platform.

13:03 Now on to North America, which delivers another strong result with revenue and EBITDA both up 12% in constant currency, which is a great result. Growth was driven by product improvements in our dealer business, which resulted in yield uplifts, excellent growth in media, also delivered excellent growth in our market-leading data business, SSI, as well as growth in our marine segment. And pleasingly, our continued investment in advertising and marketing, together with a significantly improved user experience, has driven material growth in both audience and leads, particularly in Q4 of FY26. And what this does is position as well as we begin FY27. Our media business has excellent momentum in the US, which is powered by both growing customer base and as an R&D agency business.

13:55 Marine is also performing very well with leads for dealer and audience engagements. both growing nicely and we're also being very targeted with our advertising investment as we're focused on key markets like Florida, which is the largest US voting market. Both represent strong growth opportunities for us in FY27 and beyond. Same ecosystem that works in Australia, we're building in North America and we're extending our role across more of the vehicle transaction journey. For dealers, we provide them tools to help run their businesses, including CRM, lead management inventory management digital retailing and financing solutions and then for consumers but with them through the whole journey from research and comparison through to a completed and finance transaction which is really difficult in these non-auto verticals now onto Latin America and once again we've delivered outstanding growth in fy26 revenue up 19 and even up 23 in constant currency and that growth is even more impressive given we exited some very low margin manufacturing revenue in our Car 10 business during the second half of the year.

15:03 Our very strong underlying growth was underpinned by audience expansion, our enhanced media business, premium dealer products and continued yield growth across all parts of our business. While our loyalty product in Santander is scaling incredibly quickly, we've got more than 11,600 dealers participating and it's a very powerful loop. Our deal is financing through Santander and credits, and then those credits are spent on WebMotors, and the deal has become even more engaged with our services. And as you can see on the right-hand side, OEM media revenue is growing very strongly, which is being driven by the rollout of our Australian media strategy and products, and also by the success that we're getting with Chinese OEMs that are advertising for this.

15:50 Each year, WebMotors is covering more of the buying and selling journey. For dealers, that now extends to sophisticated tools across their whole business, which results in better inventory decisions and more qualified leads. And for consumers, we're making it easier for them to list and transact. What we're building in Brazil is an incredibly powerful ecosystem for dealers, OEMs and consumers. Now onto Asia, which delivered another strong result, with revenue up 15% and EBITDA up 14% in constant currency. Growth was driven by our three flagship products, which are Guaranty, NCAR Home, and Dealer Direct. We continue to evolve and improve all these three products for both dealers and consumers, and that's what's driving the growth in the business.

16:37 Onto the next slide, adoption of our Guaranty++, Dealer Direct, and NCAR Home products, as mentioned before, all continue to accelerate. and these products are certainly strengthening NCAR's role throughout the transaction journey and they create a significant future runway for growth in this business for many years. Now onto the NCAR ecosystem. NCAR is clearly the number one vehicle marketplace in South Korea and it's evolved from a lifting business into a transaction platform for a continued product evolution. And for dealers, we help them sell faster and with more profit through our trusted inspections And for consumers, we deliver an end-to-end transaction which includes clients and warranties.

17:22 Now that's the end of the segment section. I'll hand over to Jeff to take you through the financials. Yes, Will, and good morning, everyone. I'll take you to slide 36 and the summary financials. As Will highlighted, the group delivered another year of excellent performance in FY26 with 12% growth in pro forma revenue and EBITDA, An 11% growth in adjusted net profit after tax on a constant currency basis, in line with our FY26 guidance. Low EBITDA, all items were within our previously guided ranges for the year. Depreciation and amortization primarily relates to software development, leases and building fit-outs. The increase in FY26 reflects our continued investment across all key markets to support future growth.

18:10 Net finance costs were lower than the prior year, with lower interest rates more than offsetting the increase in borrowings. The effective tax rate in FY26 was 20%, marginally higher than FY25, due to the growth in higher tax regions and the timing of US tax loss utilisation. So we did receive some incremental tax benefits in the US as a result of the One Big Beautiful Bill Act. The board has declared a final dividend of 43.5 cents per share, taking full-year dividends to 86 cents per share, representing an 8% increase on FY25 dividends in line with adjusted NPAT growth in Australian dollars. Full-year dividends equate to an 80% payout of adjusted NPAT.

18:58 Turning now to the segments, and as discussed earlier, revenue and earnings increased across every major segment. In line with our guidance at the start of the year, Australia delivered high single-digit growth in revenue and EBITDA, and North America, Latin America and Asia all delivered another year of double-digit growth across both of these metrics. These results demonstrate the strength and diversity of our global portfolio. Turning now to EBITDA margins. Group EBITDA margins remained strong at 56%, consistent with FY25, and we continued investing in future growth. We have strong operating leverage within our business model and we continue to maintain our disciplined approach to capital allocation and cost management.

19:44 We did see efficiencies in the business during FY26, particularly within our development teams, which allowed us to accelerate product delivery and invest in our brands and other initiatives to drive future growth. On a segment basis, we saw margin improvements in Australia and Latin America. North American margins remain stable at 60% as we invest in marine expansion, and Asia declines slightly to 45% as we open new inspection centres and scale dealer direct. Overall, we're very pleased with the balance between growth and profitability. Turning now to the cash flow and balance sheet. Cash generation remains a major strength of Car Group, and our cash conversion for FY26 finished at 100%, which was an excellent outcome.

20:34 Our balance sheet remained in a strong position, with leverage steady at 1.7 times net debt to EBITDA, providing flexibility for future investment. After the end of the financial year, we completed a refinancing of our bank debt facilities, which extended tenor and added some additional capacity for future growth. Growth capex associated with internal software development remained stable at 10% of revenue. We did see a small increase in other capital expenditure associated with new leases in the US, Brazil and Korea. Turning finally to Outlook in a bit more detail, we expect another year of excellent growth in FY27. On a constant currency basis, we're guiding to revenue growth of 11% to 14%, adjusted EBITDA growth of 10% to 13%, and adjusted NPAC growth of 9% to 12%.

21:29 In the market, we expect Australia to deliver high single-digit revenue growth, and we expect continued double-digit revenue growth in North America, Latin America, and Asia. In margins, we expect operating leverage in Australia and Latin America, offset by slight margin contraction in North America and Asia, as we continue to focus on building out our investment in marine in the U.S. and dealer-directed in car homes in Korea. Below EBITDA, We expect net finance costs to be between 66 and 72 million. Appreciation and amortization is expected to grow at between 16 and 19%. And the group effective tax rate is expected to be between 20 and 21%.

22:15 On CapEx, AI is helping us develop software more efficiently. We're currently reinvesting those benefits into accelerating our product growth. And whilst that creates flexibility over time, We continue to expect software development capex to be around 10% of revenue for FY27. I'll now hand you back to Will to wrap up. Thanks, Jeff. FY26 was another excellent year for Car Group. We delivered strong financial results, expanded our market leadership positions, and more importantly, continued investing in future growth. AI is increasingly improving customer experiences on our platforms, and it's also helping us to operate more effectively across the group. We enter FY27 with strong momentum and confidence in the opportunities ahead.

23:03 And now I'm happy to open up the Q&A. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. We ask today that you please keep to three questions per person, after which you may then rejoin the queue. Your first question today comes from Encho Rakowski with E&P. Please go ahead. Morning, Will. Morning, Jess. Hi, guys. So my first question is just looking at TI, and there was a slight revenue deceleration in the second half, so I think it was 11%.

23:56 or 10% to 11% in 2H given rounding versus over 13% in the first half. I guess, can you talk to some of the reasons behind that deceleration? I don't know if it was the market which drove it, whether it was other factors, and then your comfort level around delivery of double-digit growth into FY27, especially given that you won't have the acquisition benefit. And I've got a couple of others, but do you want me to give them to you now or wait for the answer? Why don't we take that one first, Encho, and I'll get Eduardo to answer that, given his new role looking after the Americas. Hi, Encho. Just to summarize here, in terms of the difference between the second half and first half, it's a small difference.

24:45 We are talking about media campaigns, mostly this. That's an impact, so no other reasons. And the other question was? Confidence around. Sorry. And the confidence, I'm very confident, to be honest. I just assumed the role, but I'm very excited with the U.S. and all the opportunities that we can have there, you know, in terms of the market, in terms of the company that I face it. So I'm very confident to deliver this double-digit growth. Eduardo, I may be asking a question slightly differently. Is there, I mean, do you see Any specific changes in what might happen between second half 26 and into 27? Or is it, from your perspective, I don't know, is it more of the same?

25:32 We are probably doing, expanding a little bit more in terms of the ecosystem, the strategy over there in the US. I think the plan is very good, to be honest. But the ecosystem is the main strategy. And right now, we have the DP360, the CRM, all these connected in the marketplace, all the things that we are doing in terms of AI connecting the marketplace with the DP360. So to be honest, I think TI is going to be the same playbook that we did in WebMotors with a lot of things in terms of products that we can develop. But for sure, the main strategy is going to create and build and to get stronger in terms of the ecosystem. Okay, great.

26:17 And then my second question, probably for you as well, Eduardo, are you able to quantify the impact of the sale of the Car 10 business on WebMotors? It probably would help us just understand how much it's impacted revenues. And can you talk about the rationale for the sale? Oh, we want to give a specific number. We didn't disclosure this, but in terms of the rationale, it's very clear. You know, it's a business. When we acquired CARTEN, came with the credit card machine business. and it's a business that has low margins so it doesn't make any sense to keep it with a business with this low margin so that's the decision why we changed it. It's not going to impact anything the rest of the company and all the strategy with the products for the ownership of the car but of course considering that it's a low margin product and I'm not seeing in Brazil looking ahead that the market's going to change in terms of spreads of this market and this kind of thing. That's the reason that our decision was to close.

27:26 Okay, thank you. My final question is just another one on the second half trajectory. Sort of private in the domestic operations also slowed down a little bit in the second half. I suppose I'm just conscious that inventory also on the site has slowed come back quite a bit over the past six to 12 months. So can you talk about the reasons for that private deceleration? And again, similar to my first question around DI, how do you think about the private trajectory into FY27? No worries, Andrew. I assume that's talking about Australia, so I'll give that one to Craig. Correct. That's right. Yeah, good morning. So just to quickly cover up on inventory, we're definitely seeing a shift now into the dealer ecosystem in terms of total inventory.

28:15 And as of today, we're about 147,000 listings for dealer inventory. So there has been a shift. Another thing to call out there is we had a very strong year with our instant offer business, which is bringing private listings and blowing that through to our dealer ecosystem. We think about total inventory. One of the key areas that we've been heavily focused on over the last six months is really making sure we're delivering optimal consumer experience. And what that means is we've tidied up a lot of listings. So if the ads weren't updated within a 30-day period, we were removing those from the site. And so we've had a lot of focus on that. And while we've done that is to make sure that sellers are returning buyer inquiries and we've made sure that we've improved the overall consumer experience with making sure that inventory is updated every 30 days.

29:08 Okay, got it. And sorry, that's quite useful to understand the dynamic. Are you finding a sort of a weak underlying market as well contributing or is it mainly that initiative? Yeah, I would say that the market conditions overall have improved. We had a period there in the second half where, you know, consumer experience and sentiment and we've now seen that rebound. So, lead volumes have been strong in the start of 27. Site traffic's been really quite buoyant. So, overall, we have a very healthy marketplace currently. Okay, great. Thank you. Thank you. Your next question comes from Eric Choi with Baron Joey. Please go ahead. Hey, morning team. Could I do three as well?

29:53 I might double up a bit with intro, but I sort of just had to do some math around some of it. So yeah, if I could step you through some of it. Maybe on the US, you guys are guiding to double digit US revenue growth in FY27. But if you think about what you guys did in FY26, I think you guys did 12%. maybe there would have been a couple of percent in there from M&A, maybe a percent from pull forward of price increases as well. I guess what that means is, from like an organic standpoint, in regards to an acceleration in the US business in FY27 versus 26, and you sort of talked around it earlier, but can you comment specifically, is there like a new product that's helping the 27 growth rate, so media and marine data, are they all getting bigger and kind of bigger percentages on a bigger base?

30:46 Could you help us with that, please? Hi, Eric. In terms of growth, and of course, we have the price increase that contributes, of course, marine, media. Media grew very strongly, and I really believe that we can keep this growth for the financial year 27. So it was a combination between price increase and, of course, the other segments that I mentioned before, media and marine. a softer business. It's growing in a very good level. So that was the reason in terms of the segment for 26. And talking about 27, I think we can keep growing because we have a lot of things to develop in terms of products.

31:32 I'm going just to give some of them. For example, we have a lot of things to do in terms of websites, in terms of iMotors that we are going to implement, the D3 360 with AI, a lot of things that we are doing in terms of improvements. in the platform, lead nurturing that we can still keep growing, G2 360 that we are going to develop for the next year, all the AI search improvements, CRM blind version, SSI. So I have a list of products. I'm going to stop here, but I have a lot of levers to keep growing the business in financial year 2017. That's great, Eduardo. I noticed you didn't mention M&A at all. So do we just assume M&A isn't a contributor in 20 segments for the US?

32:23 We are not considering this. We are very open all the time. You should see opportunities for sure. But I'm considering, I'm just focused right now in the development products and the organic growth. Sorry, that wasn't actually my second. Sorry, but can I just follow up on that? I know you said you wouldn't. comment on a specific number it's just kind of trawling through your historic disclosures and like we know Car 10 and Loop together were probably about 15% of WebMotor revenues and I know you're not divesting all the Car 10 just the factoring or sort of exiting the factoring bit within that but I don't know if we assume like Car 10's half of that 15% and maybe factoring a portion of that maybe it's worth low single digit to mid single digit so the point is would that second half WebMotors growth rate, I think you guys probably about 15%, would that have been closer to kind of 20% if you didn't factor, if there wasn't that exit of the factoring business?

33:22 I think that's right, Eric. I'll take that one. So I think the best way to describe it would be, you know, the growth rate the first half, underlying growth rate was pretty similar in the second half if you exclude the exit of the cart 10 factoring revenues. Nice one. Can I just take a step back on a question? Sorry for all the minutiae, but if I were to, you know, good result, and if I were to pick out anything, sort of like Encho was flagging, people kind of looking at the second half growth rates versus first half growth rates. But if I just look at everything that you've mentioned, they all appear non-structural, like kind of cartoon volumes in Asia, but in the US. Is that right? Like, do you think the... brought me the differences in the second half versus the first half rates all pertaining to macro and have you, sorry to make you comment again, is this what gives you confidence in that 27 re-acceleration?

34:21 I think that's fair comment, Eric. I mean, obviously the overall performance for the year we think was strong. Second half was marginally lower than first half and the main difference was the exit of Car 10, which was intentional. And then in the last quarter of the financial year, we saw the impact of the Iran war somewhat mainly in Australia and South Korea. And these were relatively small, but things have certainly improved since then. And that's clearly giving us the confidence to go out with the outlook statement that we've got. And then outside of that, you know, the product development, the initiatives and all of the growth developer we have in the business is all giving us the confidence.

35:07 So we've hit about 27. Good one. Thanks, Will. Thanks, Eric. Your next question comes from Sriharsh Singh with Bank of America. Please go ahead. Hey, Will and team. A couple of questions from my side. One on private listings. Very steady performance, 4% growth for the full year in context of concerns around declining private listings in Australia. My question is, when we think about FY27 growth rate for private listings, to what extent should the growth rate be driven by pricing versus volumes and then instant offer adoption into FY27? And then are you pricing different?

35:53 Can you talk a little bit about your pricing strategy as well? Are you pricing more expensive cars differently than cheaper cars on the private side? Second on, just second one on Brazil, given that you have now exited Cartan's low margin business, how should we think about the margin profile of the LATAM business? It's around 38% this year. You've got it for margin expansion in that geography. Should we expect closer to 40% margins at the LATAM level? Thank you. No worries. Thanks for asking questions. I'll let Craig say the first one, then in Iwata, you can do the second one. Yeah, thanks for your question. So in terms of dynamic pricing, and we're constantly looking at our pricing structures for private sale, and to answer your question, based on the asset value, we'll adjust pricing accordingly.

36:48 If we think about average yield, I mean, we are over $200 on average yield in private sale at the moment, which is very healthy. And if we think about momentum as we're going into 27th, IO is performing well for us and overall volume on marketplace is performing quite well as we head into 27. And the second question is about the margin expansion. What I can say about this is that it's the main goal that I have in terms of when motors should keep, of course, increasing the margin expansion. things that we have been doing in the last few years. But of course, we still have opportunities in Brazil to keep reinvesting the money. So my short answer is yes, we can expect to keep expanding the margin. But of course, I'm not going to accelerate in a way that we are going to lose opportunities in terms of market investments and all this.

37:46 Understood. Eduardo, one last question on Brazil. Santander is talking a little bit about their change in strategy with respect to Brazilian loan growth. They seem to be prioritizing credit quality of loan growth based on the investor day. Any color on that? Are you seeing like what kind of finance income growth in Brazil should we expect into FI27 to the extent you can talk about it? Thank you. Thanks for the question. In terms of credits and financing markets in Brazil, of course, we mentioned in the last meetings about this, you know, we expect with this increase of interest rate that has been doing the last years, could impact in the market. But we didn't see this, you know, the market is very resilient in Brazil. The credit market is still strong.

38:41 in my view. And now we are in a completely different mood. As you know, we decreased interest rates for 14% in the last central bank meeting, which opens an opportunity looking ahead in terms of keep growing the finance in the market. So when I look at all the last 12 months, for sure that the toughest period stayed behind. And looking ahead, I see more opportunities in terms of financing than and in terms of keep growing the business. So no issues in my side. You know, it's normal volatility. We have been seeing this in Brazil for a long period of time and, you know, this interest rate coming up and down. And I still believe that could be a huge lever for the future.

39:26 That's super clear. Thank you. Thank you. The next question comes from Siraj Ahmed with Citi. Please go ahead. Thanks. Maybe a first one just on Australia. I mean, dealer did slow down in the second half. Could you just break down the growth between lead volumes and, I guess, depth in the second half? And just in terms of looking at 27, given you're seeing improving trends, are you pushing through similar price increases for next year? And just clarifying as well, your guidance does say private volumes are expected to grow next year. Just confirming that as well. Yeah, so it's cranky. So I'll cover that off. So if we think about the second half, we did see lead volumes come off for a short period of time off back of the RR war, but we've seen that rebound nicely as we head into 27. If we think about price, potential price change for 27, the number of factors that we take into consideration, dealer health, general market conditions, product innovation, et cetera, we haven't finalised any position in terms of price change for 27 at this stage.

40:34 will work through that in the coming months. Sorry, and the second part of your question was around private sales. Just around private volumes and expectations into next year. Yeah, so if we think about private volumes as we start at 27, average daily has been really quite strong and we see that momentum continuing as we accelerate the value of providing to private sales. Second one, maybe we'll just do the high level. I mean, interesting that you are, you know, you operate a debt facility. Just keen to understand how you think about M&A on the back of that or whether that's signaling something. And in terms of M&A, it's interesting that you are buying some of these dealers, sort of CRMs, right, in the U.S. And also, I think it looks like you bought something in Brazil as well. Just keen to understand how you think about that ecosystem.

41:20 Is that dealer side something you want to strengthen, especially given AI? Yeah, thanks for the question, Siraj. I think, I mean, definitely from an M&A perspective, over the last two years, we have had a more concerted focus thinking about our role in the ecosystem and how we embed ourselves even closer with our dealer customers and our OEM customers. And part of that is reflected in some of those small acquisitions of the CRM businesses because we can provide services, not just as a marketplace, as an advertising source, but through the whole life cycle of the transaction for a dealer. And the other thing is, it's not just an M&A strategy, it's also an organic strategy.

42:05 So if you think about what Craig is doing with Nexgate, that's really extending our dealer operating system into more parts of the dealer's business to essentially help them take cost out and maximize profitability. So that's the focus for us. In terms of our overall M&A strategy, you know, no signalling from the debt refinance. That's just business as usual and our overall M&A strategy hasn't changed. Got it. And last one, just from TI for Eduardo. So that traffic growth in the fourth quarter, that's extremely strong. what's driving that and do you reckon I mean market conditions seem quite soft right especially in RVs right now but given the traffic growth does that give you more confidence in the price increases for next year or is that something else that actually helps with thanks thanks Shiraz in terms of the markets what I'm very happy to see is the last half the last quarter sorry that we are seeing improvement in terms of lead volumes audience visits so That's the reason that I'm feeling that we are very close probably to the bottom. And we can expect, you know, that it's going to start to recover.

43:20 You know, of course, a lot of things going on in this moment. But my first feeling, what we are seeing in terms of all these leads and all this is positive. So that's the reason that I can believe that we can deliver a very good financial year 27. Thank you. But can you just touch on what's driving that? I mean, this is not just marine, right? What's driving the traffic growing? Is it just you're doing better marketing or something like that or targeting? Thanks. No, I think that's... I'm happy to take that one, Siraj. I mean, one of the focuses for us as a business is, you know, we're trying to find operational efficiency and you would see that appear in our strategy and we're trying to find operational efficiency in all of our markets. And one of the things we're doing is reinvesting that back into...

44:07 brand and advertising and clearly that's been a focus in the US for a while so I think that's generating part of the strong outcomes you're seeing in Q4 there as well as consumer experiences that we're making to the site which is driving higher lead volumes and better outcomes for dealers. Thanks. The next question comes from Roger Samuel with Jefferies Australia. Please go ahead. Hi, Monty. I've got three questions as well, please. First one, just on the margin, I think you previously got a margin to tick down slightly in FY26 given the investments in marine and the new products. And given that you managed to maintain your margin at 56%, I'm just wondering what's the driver of that.

44:59 Is it because of... some of the benefits that you're getting from AI Lab in Brazil or the general cost controls? Thanks, Roger. It's Jeff here. I'll take that one. So you're quite right. I mean, we guided at the start of the year slight margin contraction in Korea and the US. I think US holding margins pretty consistent was a great outcome. And yes, a good chunk of that was cost efficiencies. As Will said, we've been able to reinvest a portion of that into brand and other initiatives. But yeah, certainly good cost control over the years was a big part of that. There's not so much the benefit from AI investments. Well, no, that's part of it. I mean, I think CGLab obviously drives benefits across the group, but there's also AI investment in each of the regions as well, but just being more efficient across the board.

45:58 But AI is definitely part of it. Okay, okay. Second question, maybe for you as well, Jeff, in terms of the currency impact and obviously his result, we've seen some headwinds from foreign currency. Is there any ways that you were thinking of to mitigate the currency headwind going forward? Yeah, thanks for the question. So you're quite right. I mean, we saw about a 2% FX headwind for FY26 at about sort of a 5% headwind in the second half. We're probably seeing similar around a 2% headwind for next year, mainly sort of first half driven, again, our sort of US and Korea. I mean, when we think about FX exposures, you'll see that we've got sort of cross-currency swaps in place for Korea, which sort of helps on the interest rate side, but also is a net investment hedge for us.

46:56 and also the start of FY27 looking at USD cross-currency swaps as well. Now, that doesn't necessarily show up in the P&L, but certainly we see that as, from a commercial perspective, helps us with that FX explosion. Excellent. My third question is on the Australian business. Do you have any feedback you can share with us in terms of the new product, so NexGate and also the trade-in products, and how would you quantify the revenue earnings impact from these two products? Yeah, it's Craig here. I'll answer that one. So we launched NexGate to the industry at the AADA convention last Tuesday evening.

47:42 and it's been well received. Nextgate goes live to all of our dealer customers on the 1st of September. So we will only be starting to roll that out at the back end of this month. But one thing to really call out about Nextgate is it's really been an outside-in design and development. And what I mean by that is we've worked with our dealer partners to develop the solutions to help them today and into the future. So we're very confident it's going to actually really help dealers and create efficiency in their business. There's a lot we're doing in terms of AI integration to help them with pricing, sourcing, as well as lead nurturing to help manage conversions. So there's a lot happening in that space, and, yeah, we're very confident when that goes live in the coming weeks, it will deliver great results for our dealer partners. Sorry, mate, what was the second question?

48:29 Oh, it's just around the trade-in product that you launched a while ago now. I think that was just the next question. Sorry, was that a new car question, Roger? Yeah, I think you launched the trade-in product, right? Trade-in product, yeah. Yeah, so trade-in's performing well for us and it was really to complement and drive greater value for new car buyers and their path of purchase. So we're working on a broad range of initiatives when it comes to new cars. We see a significant increase by demand for new cars on platform as well as obviously the Chinese entrances they scale in Australia and so there's a lot that we're doing in that space and in terms of trading it's driving greater value for our dealer partners and so far it's performing well.

49:20 Got it, thank you. Your next question comes from Lucy Huang with UBS. Please go ahead. Thanks, team. So I've got three questions as well. Just my first one, you made a comment on North America saying that you've seen dealer growth from new product launches. So I'm just wondering, you know, kind of what sort of dealer growth numbers did we actually see in the second half and would we expect dealer growth to continue into FY27 despite, I guess, potential weakening of macro sentiment? Yeah, Lucy, it's Will. I'll happen to take that one. So I think the comment around... Dealers was more that we're seeing good growth in the dealer segment. In terms of the overall dealer base, that's been relatively stable in the second half.

50:06 I think in terms of what gives us confidence into next year is obviously all of the product development that we're doing. Eduardo talked about the ecosystem that we're building there with DP360, which is the new CRM tool, and we're going to launch that into market as part of our overall subscription package. throughout the year. And then clearly, you know, the investments we're making in branded marketing is growing our audience and the value we're delivering to our customers. And so I think that's probably where we see the growth coming from next year alongside obviously the media and marine parts of the business. Yeah, that makes sense. Ben, in terms of domestic media, we did see a slight slowdown, but given the strength that you're seeing in the OEM thing, should we expect media revenue growth to reaccelerate into 27?

51:00 No, no worries. So I think the media business in Australia performed very well in 26. You would have seen The new entrant OEMs are delivering outsized performance for us, which is great to see. We're sharpening the way we go to market with these new entrants, and we believe we've clearly got a great playbook that we can roll out. What's interesting for us is that we're actually seeing the ability for us to build a go-to-market approach across our global business for these OEMs because we're they are entering into Brazil, South Korea and Australia all around the same time. And so we're starting to build an approach across the whole group to go to these new OEMs entering the market.

51:51 And in terms of product delivery and innovation, we've got some great things in the pipeline over the next 12 months for the media business, which gives us the continued confidence to grow. Thanks, Will. And then just maybe one last one about the Australian business. Can I just confirm just whether that 8% revenue growth between volume, yield and price, I think you mentioned like volume saw a little bit of a step down in the second half. So outside of that, would the debt drivers be relatively similar to the first half? Yeah, so it was roughly 4% yield, 3% volume and 1% debt. Wonderful. Thank you so much. Thank you. Thanks, Lucy.

52:37 Your next question comes from David Fabris with Macquarie. Please go ahead. Oh, I will. Hi, Jeff. Just my first question. Just wondering, with the revenue growth guidance across the regions, can you unpack the contribution or actual percent benefit of the price increases in any timing? And just to clarify, is it one price increase annually per region generally? No worries, I'm happy to take that. I mean, we approach pricing differently in every market, David. So, you know, in Brazil, for example, the pricing tends to be ongoing throughout the year, region by region. In the US, it's been more of an annual base, but the timing has varied and then it varies across which products. So, again, the price increases.

53:25 South Korea, similar in terms of we have done some price rises on some of our smaller products but haven't done it on our flagship guaranteed product for a while and we're always looking at that as an option there in Australia clearly the main price rise we normally do is around October and we look at that across you know all of our product portfolio and dealer portfolios so it is very localized region specific in terms of our approach for pricing and Clearly, it'll be one of the contributors to our growth next year. It won't be the main contributor. The main contributors will be volume growth in dealers, volume growth in leads, new product development, penetration, greater penetration of existing products, and then yield is just another component on top of that.

54:23 Yeah, got you. Thanks. And then, I guess, just looking at North America and Asia, you've still got revenue growth exceeding EBITDA growth. Can you provide any scaffolding or thoughts around an inflection point where that might cross over and we start to see benefits coming through from the investment? So, yeah, look, I think that South Korea, we've been, you know, very deliberate around investing in dealer direct and also in branding. Dealer Direct, we have a competitor, a dealer. It's quite formidable in that space. And that has been a decent investment we've made over the last few years. And what we're seeing now is some good growth in that product, which is great to see.

55:10 And so we're very happy with both the product itself, but also that we're starting to market it and that's delivering good returns. And then, you know, in North America, we've been investing, in the marine business, which we've talked to before. So the marine's a massive market. We've got a strong right to play in that market. It's not profitable currently, but it's got the potential to be nicely additive to our business going forward. And we're seeing some good signs in the last quarter on that. Gotcha. And so just one last question for me. Just on the Australian business, I'm just curious whether you see any opportunities or new opportunities to move up or down the value chain? Are you pretty comfortable with the lanes you sit in?

55:56 I mean, there are options out there, I guess, if you consider balance sheet intensity and channel risk. But yeah, your thoughts would be appreciated on whether you think there are ways to move up or down that value chain. No, I think, David, we're happy at the moment just in terms of our organic ecosystem play with Nexgate, which in some ways is moving into new areas of the dealer's business to help provide incremental value across sourcing and lead nurturing, those sorts of things. So it's a natural organic extension rather than any form of M&A. We think that's the right approach at the moment and the one that's going to generate the best return on capital for us. Okay. Thank you. Thanks, David.

56:42 Your next question. Might have time for one. This might be the last one. Your final question today comes from Wei-Wing Chen with RBC Capital Markets. Please go ahead. Hey, team. Thanks for sneaking in. And I literally only have one question, so I'll keep it quick. So just relating to kind of your EBITDA adjustments in FY26, you reported 15 mil in the first half, which included the exit of the tyres business. In the second half, the adjustment was 18 mil. Can you maybe help me just reconcile what the 18 mil in the second half was? Yeah, thanks, Wayne. I'm happy to take that one. So, I mean, as we always do, we look to present an adjusted number which we believe sort of reflects underlying performance of the business.

57:27 So the buckets haven't really changed. The main ones in the second half and the full year, for that matter, are M&A activities. So as we'll touch on, we've had several bolt-on acquisitions in the last 18 months. A lot of those are about expanding the ecosystem. So the integration efforts on those are probably higher than they have been in the past. and that also includes some efforts on M&A that hasn't necessarily come to fruition. On the restructuring side, a lot of that was picked up in the first half in terms of things like leadership transition, but we've also had some other restructuring across the business as well. Okay, cool.

58:12 Thanks, Byway. Thanks, everyone, for your questions and I look forward to catching up with many of you across the next few days. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.