CAR Group Limited (CG1.AX) Earnings Call Transcript & Summary

Good morning, everyone, and thanks for joining us this morning for the Car Group FY '25 Results Conference Call. This morning, Will and I we're going to walk you through the presentation over the next 30 minutes like we usually do, and we'll read out the slide numbers as we go along. After the presentation, we'll do a Q&A session like we always do as well. And I'll introduce you to the rest of the team that are here to answer your questions as well in the room today. So with us, we've got Craig Fraser, Craig, the MD of our Australian business. We've got SB Kim, CEO of our South Korean business, Encar; Dave McMinn, CEO of Trader Interactive in the United States; Eduardo Jurcevic, CEO of webmotors in Brazil; and we've got Rachel Scully here, our Head of Investor Relations. So we'll start with Slide 5. And as you can see, it's been another excellent year for the group. But these results continue to -- they really continue our track record of long-term growth and demonstrate the strength of our global diversified business model and the commitment that we have to our customers. The pro forma results on the left side of the page, they're really the best reflection of our underlying performance as they really normalized for our Australian tire business that we've recently exited. In constant currency on the right-hand side, the group delivered 12% growth in pro forma revenue, 12% growth in pro forma EBITDA, and that was both an excellent outcome. We've maintained strong EBITDA margin performance at 56%. Adjusted NPAT was up 11% in constant currency, and that was also an excellent outcome. So a great year overall. So let's go to Slide 6. And that constant track record of excellent financial performance is really demonstrated here again. And it just reflects, I guess, the disciplined delivery of our strategy that we have and to make vehicle transaction processes faster and easier and more seamless for our buyers and sellers alike. This slide also reflects the diversification of our business across geography, product verticals and our ability to grow in all market conditions across time. On to Slide 7. And look, like we normally do some operational highlights that show our global marketplace environment remains strong, underscoring our leadership and the resilience of our diversified business model. I'm looking at inventory and inventory levels probably slightly lower than over the course of the year, and that just reflects a robust used car market environment that we're in, in Australia, Brazil, Korea and Chile at the moment. Looking at dealer numbers in the middle of the page at the top, they remain stable at around 49,000. So our dealer proposition continues to be strong across all regions reflected in our solid results here and despite some more challenging consumer environments in past. On to Slide 8, and Slide 8 shows our strong and diverse retail brands here, as you can see, across our regions and key market segments. We've exited our tires business. As I mentioned a minute ago, we've taken tire sales out of this slide, and we've included our small data businesses in LatAm and South Korea that you can possibly see there as well. Look, for many years, our strategy centered around investing in large high-growth markets where we can leverage our intellectual property and our tech to deliver long-term sustainable value for our shareholders. and our international investments, they've delivered outstanding financial returns, and we remain highly confident that they're going to continue to grow nicely into the future. On to Slide 9. And look, this provides us with an overview of our group strategy, which has been -- we've been working through this as a leadership team over the last 6 months and have roads showed it with the broader business. And it really is our focus for the next 3 years. And what is on this slide is really the outline of the agenda around that strategy. So we see this very much as an evolution of our previous strategy, which you'll all be very familiar with on the call. Across the globe, our teams, they continue to excel in delivering on our purpose, and our purpose is about making buying and selling a great experience. Our vision also very bold and clear here to become a global leader in online vehicle marketplaces. So as you can see, our strategic priorities or pillars on that -- on the slide there are really to strengthen our core, which is to enhance the scale and the strength of defers today. The second one there is extend our marketplaces, which is really to create new experiences for consumers, products and to deepen our value proposition for dealers, private sellers and OEMs. Third one is around diversification and growth, and we're pursuing strategic M&A, we're investing in innovative offerings while also developing products and technologies that are going to drive sustainable long-term growth for the company. And the fourth one there is finally around delivering operational excellence, and that's about driving growth through collaboration, high performance and cutting-edge technologies, including AI that you'll see through the deck. Above all, our strategy is really underpinned by the great culture that we have in this organization, which guides how we operate, collaborate and innovate across the globe and ensuring consistency in our values and excellence in our execution as an organization. On to Slide 10. And this slide here, it outlines a change in how we present our outlook and which sees us moving to provide an outlook at a group level across revenue, earnings and NPAT. So you can see here by executing against our strategic pillars at the top of the slide that we expect to deliver another excellent year of growth in FY '26. So we expect to see pro forma revenue growth of between 12% and 14% in constant currency, pro forma EBITDA growth of between 10% and 13% constant currency and adjusted NPAT growth of between 9% and 13% in constant currency. And this outlook reflects our confidence in our strategy and the momentum that we're building across our global operations. Now Will will take you through some more content and detail on that in the financial slides coming up very shortly. On to Slide 11. And look, I mean, most of you guys will recognize this slide, and it really just highlights the breadth and growth levers across each of our businesses. So our core growth drivers, they're all in great shape. Our new initiatives are gaining traction and contributing to more significantly, I guess, over time. As you can see from the bottom of the slide, we do operate in large attractive markets with substantial TAMs. And with our current share is still well below 10%, I guess we see significant long-term growth potential across every region that we serve. I'll also now spend a little bit of time just talking about some of the new products and technology investments that are really driving better customer experience and engagement through the business. So if we turn to Slide 12, and one of the ones that I'm particularly passionate about is the Australian C2C payments product. It's a solution that's been developing -- we've been developing to offer consumers a safer and more seamless way to transfer between private buyers and sellers. And since launching this late last year and late last calendar year, the product has really gained great traction with significant uptake in both buyers and sellers and in probably a very short period of time, we've already facilitated over $130 million of payments or transactions. Beyond C2C, we've talked a lot about this over time. Payments really unlocks some exciting future opportunities across the transact and ownership phase of the car buying journey. So if we can execute this well here, the financial upside longer term could be substantial. The technology is also built in such a way that it's globally scalable, and we see strong potential to roll this out in other markets that we have across time as well. Looking at Slide 13. And during FY '25, we have successfully completed what we referred to internally as Project Merlin. And Merlin brings together our previously separate desktop and mobile experiences into a single responsive platform across web, iOS and Android platforms. And this not only simplifies our tech stack in the business, but it also enables faster, more consistent delivery across all devices and lays the groundwork for a more personalized consumer experience. At its core, I guess, Merlin really introduced the M design system and it's there to enhance delivery speed and really improve SEO. And that was a key objective for us as well. It creates a more intuitive and engaging user experience too. On the right side of the page there is another program of work we've been working on for some time. It's called Bello, and that's about making it easier for the dealers, private buyers and sellers to connect via car sales. And with this update, users of the car sales, they can now see the dealership name and the specific car of interest when receiving a call, making them more likely to answer the call and less likely to make for a scam call, which you can see on the slide there is a pretty good example of how that appears to the consumer. On to Slide 14. And looking at our Premium Select performance in North America with increases in both the average number of deals utilizing the product and the number of transactions, the growth has been driven by a product that delivers a lot of value, particularly in a more challenging market environment. Media has been a strong growth area for Trader Interactive with direct media revenue up 167% year-on-year, reflecting really the strong advertising engagement and investments we're making there and also the launch of our media agency in Xenara. And on the right-hand side of that slide, you can see the SSI continues to gain momentum. It's doing really well. It's accelerating growth since we completed the TI acquisition. And SSI provides dealers and OEMs with a valuable set of market insights to benchmark performance and make really good informed decisions. Just looking at Slide 18 and talking about LatAm. The national expansion in Brazil has continued to pace with the gap really between webmotors and the #2 player there in vehicle marketplaces continue to grow significantly in. Look, our strong partnership with our major shareholder partner, Santander has been excellent and has enabled that product you've heard us talk about wallet. And that product is really driving with around 9,000 dealers now on it. and the accelerated adoption that, that brings around premium webmotors products, including depth CRM inspections, things like Vision 360 and other enhancements have really helped build dealer engagement and platform value for webmotors and it's been very handy too. On to Slide 16 and just talking about Asia and the guaranteed product continues to go really well for us. And I guess it's going from strength to strength with AI utilization now unlocking additional efficiency and accuracy for the Encar business. Guarantee inspections are up 20% year-on-year, driven by the opening of new centers and enhanced efficiency in our existing ones through that use of AI. On the right side of the slide there, you can see that we continue to improve on our home delivery experience for our Korean car buyers with the introduction of a 24/7 AI agent now facilitating an improved customer journey, particularly for those customers inquiring on cars outside of hours. On to Slide 18 now. So we'll just jump over to Will to talk about the financial performance.

Thanks, Cam, and good morning, everyone. The group has delivered another great result in FY '25, and it marks another year of double-digit revenue and earnings growth. Before we go into the segment revenue and EBITDA performance in detail, I'll talk through the items below EBITDA, which you can see here on Slide 18. Depreciation and amortization primarily relates to software development, leases and building fit-outs and the increase you see here reflects the continued investment in software development, which supports our long-term growth. And some of the key initiatives that we've worked on over the last 12 months, C2C payments in Australia, the wallet product in Brazil and our new Marine website in the U.S. Finance costs declined marginally year-on-year, and this reflects stable debt levels and a largely unchanged interest rate environment. Our effective tax rate in FY '25 was about 18%, which was consistent with last year. And this reflects the applicable tax rates in each of our markets, except in the U.S. where we pay minimal tax due to the amortization of purchase price intangibles and as well as us utilizing our prior period tax losses. Adjusted net profit was $377 million, which was up 11% on a constant currency basis, which was an excellent result. And the strength of our financial performance as well as our cash generation has underpinned the Board's decision to declare a final dividend of $0.415 per share, which is up 8% on PCP, representing a payout ratio of about 80%. And to provide a clearer view of underlying performance, our adjusted results exclude some one-off and noncash items, which we show on the slide here. In FY '25, this is primarily related to noncash amortization of intangibles and one-off costs related to the exit of our Tyres business, and we provide a full reconciliation in the appendix. Moving on to Slide 19. This slide highlights the excellent growth achieved across all our operating segments. Latin America and Asia again standouts with the highest growth rates, reflecting our strong execution in what are very high potential markets. Performance in Australia and U.S. was also really impressive, particularly given the ongoing pressure of higher interest rates in these markets. And Cam is going to talk in more detail about each of the segments later in the presentation. On to Slide 20 now and pro forma EBITDA margin summary. This highlights another really strong result from a margin perspective with group EBITDA margin being similar to last year at about 56%. Our business model continues to demonstrate operating leverage, which is supported by our disciplined approach to capital allocation as well as cost control. We're strategically reinvesting some of this leverage back into product development growth initiatives, which we're going to cover later in the presentation. And on a segment basis, it was great to see margins increase across all of Australia, LatAm and North America. And in Asia, as we've called out previously, there's been a small decline in margins due to the opening of new branches as well as the increased investment we're making into our dealer direct products. Now on to Slide 21. And this slide highlights another strong year of free cash flow generation at 98%, and this underscores the strength of our capital-efficient operating model. Our balance sheet remains robust with leverage at 1.7x net debt to EBITDA. And then on the right-hand side with our CapEx, we also continue to reinvest in product innovation and technology with CapEx as a percentage of revenue holding steady over the year, which is shown on the right-hand side. Then on Slide 22. And as Cam noted, we've updated our approach to the outlook statement, and we're now providing specific growth ranges at a group level across revenue, EBITDA and NPAT on a constant currency basis. And look, these considerations that are outlined on the slide here are intended to provide context around the outlook. They highlight the key factors and the directional inputs that inform our view without being entirely prescriptive or exhaustive. And while the growth may vary across individual markets versus what you see on the slide here, it's the breadth and diversification of our portfolio, which positions us well to deliver against the overall group level expectations. And look, that's it from a financial section perspective, and so I'll hand back to Cam to talk further about the performance in each market.

Thanks, Will. That was great. Okay. So on to Slide 24 and just focusing on the Australian market. So automotive industry, I guess, as I mentioned before, has remained robust, and that reflects the strong audience engagement we've seen and the sustained demand for cars over the car sales platform. Over the past 12, 24 months, we have observed a shift and you can see that on the top right-hand side there in customer behavior with buyers becoming a little bit more price sensitive, as you'd expect due to elevated interest rates. And that trend is illustrated in purchasing intent on the top right-hand side of the slide there, where growing preference for used cars over new cars over the last couple of years. And that has seen lead volumes continue to grow nicely for us through the year. Pricing for used cars on the bottom right-hand side of the slide there remains below the peak levels that we saw, but still well above pre-COVID level benchmarks as shown on that slide on the bottom right-hand side of the page there. And I guess importantly, because the decline has been slow and steady, dealers have been able to maintain healthy gross margins, which are supporting the confidence in the used car market that we've seen continue. And time to sell, that's returned to pre-COVID levels, driven largely by a slight slowing in the private market after what's been a very buoyant few years. So just a couple of other things there. Clearly, very happy with the Australian business revenue performance growth of 8% and EBITDA growth of 9%, just looking at each of those segments. So dealer growth of 10%. That was driven by strong demand for used cars, resulting in increased lead volumes, improved yield and greater penetration of our depth product. It was also particularly pleasing to see depth penetration delivering excellent value in market with more inventory reinforcing its role in helping dealers promote effectively. Private seller, we continue to deliver strong outcomes for private sellers, maintaining robust market share in what's been a slightly softer private seller market. At the same time, we've continued to grow private yield through pricing optimization and by scaling our product. Media revenue grew by 10%, reflecting the competitive new car market and strong advertiser demand. This growth has been supported by a significant investment that we've talked about for some time in our media business, enabling us to deliver more innovative and personalized advertising solutions that resonate with the audience we have. And then DRS is our data business, and that reflects the continued demand for trusted vehicle data and insights and reinforcing is a key contributor to the broader data services that we offer. Moving to Slide 25. It's been an excellent year for TI with revenue growth of 10% and earnings growth of 11% in constant currency. And this is a very good result given the North American market for leisure vehicles remain a little bit challenging with RV and Powersports registrations for both new and used units showing small declines in 2025 versus 2024 as you can see on the right-hand side of the slide there. And there's been some recent uptick in transaction volumes, but still early days. We remain focused on growth regardless of market conditions. So look, meanwhile, the truck equipment markets have had -- they've been very robust, highlighting the benefits of our diversified portfolio across multiple industries. Our customer numbers remain similar year-on-year, which demonstrates the strength of our value proposition. Growth continues to come from multiple sources, including an uplift in premium select transactions yield increases, for instance, the recent dealer price rise, that went very well as well, growth in media, data and insights and then a small but growing contribution from our Marine business. And look, our ongoing investment in our dealer value proposition puts the business in a good spot to capture further growth as market conditions continue to improve in the U.S. On to Slide 26, and LatAm continues to deliver outstanding performance with revenue growth of 26% and EBITDA growth of 28% in constant currency, largely driven by webmotors. In Brazil, while interest rates have increased there, but we've seen no material impact on vehicle trading. There's been some softening in credit availability, but it's been quite marginal, and that's affected our finance revenue. The Brazilian auto market remains strong with 14.6 million new and used car transactions over the past 12 months, presenting a significant growth opportunity for us. Our national expansion strategy continues to deliver adding new dealers and growing our audience. The digital advertising market in Brazil is still a much less mature market than Australia, and that positions us well for growth too longer term. Talked about it before, but the new loyalty program has been extremely successful for us and that's accelerating the adoption of premium products such as depth CRM inspections and Vision 360. Average revenue per dealer is increasing too, so driven by a greater premium product penetration and price increases. We're also seeing revenue diversification with strong growth in finance volumes and media, which should emerge as key growth drivers over the next 12 to 24 months. These results include contributions from webmotors' adjacent market subs, which are Car10 and Loop, both of which have grown nicely over the past year. Additionally, Chile Auto, they had an excellent performance as well with strong growth in both revenue and earnings. On to Slide 27 and looking at South Korea. And you can see on the right-hand side there, top right-hand side, consumer confidence has increased recently and used car transactions remained stable over last year, year-on-year, underscoring the real strength in the stability of the Korean car market. And that was supported by the macro backdrop. Encar had another excellent year with revenue up 16% and EBITDA up 11% on a constant currency basis. We've added 4 new branches and extended our operating hours in our select inspection centers, which is, as we mentioned before, beginning to leverage AI for efficiency improvements. And these initiatives have driven an increase in penetration of guarantee inspection products, reinforcing its value in market. Revenue growth was further supported by a 10% price rise in guarantee ads, and we introduced that gradually from August last year. Encar, they also continue to make really great progress on their mission to facilitate online buying, which is reflected in the growth of Encar Home and Dealer Direct also continues to scale with further investments in advertising and marketing. So I'll just talk a little bit more now about some of our FY '26 focus areas. So we'll jump to Slide 29. And look, coming to Australia on the left side of the slide there, we're unveiling a refreshed suite of carsales' consumer brands, so featuring updated logos, imagery and advertising campaigns. And this brand evolution is designed to elevate the user experience while harnessing the strength of our brand portfolio. And by doing so, we will reinforce our competitive advantage, unlock new avenues of growth and solidify our position as forward-thinking and customer-first leader in the market. On the right-hand side there, we're also expanding our prime seller offering with the launch of train with car sales, giving customers greater flexibility to control or choose how they want to sell their vehicle or upgrade their vehicles. And this new option enhances choice, convenience, reinforcing our commitment to that seamless digital experience that we pride ourselves on. Go to Slide 30 and sort of talk about Autogate revolution. So that marks a really -- this particular slide marks a really transformative leap in for our dealers, in particular, evolving from what has been a publishing-only tool in Autogate to a powerful omnichannel SaaS platform. And with the integration of AI capabilities, dealers gain access to predictive insights on time to sell pricing and inventory optimization tools like live market and promote type products. Auto now includes a marketplace scouting feature that helps dealers identify high-value vehicles, natural language interfaces for actionable guidance, I guess, and automatic transcription of buyer conversation service intent signals in those conversations, such as budget and finance eligibility. Look, all these innovations really streamline operations for our customers. They reduce fragmentation through third-party integrations and they really help empower our dealers to move stock faster while delivering a rich customer experience, which is what we're really pushing for. And this is certainly one of the larger investments that we've made in enhancing our dealer capability for this core part of our business for some time now. On to Slide 31. And just looking at TI, and we're enhancing our dealer experience in North America as well. And through Xenara, which I mentioned before, our new in-house media agency, we manage end-to-end digital advertising now from search engine marketing to social and location-based campaigns for our dealers to really drive traffic back to the TI network. We've strengthened lead inventory management by implementing car sales, telephony systems, fraud filtering and our new CRM tools within Trader Traxx, which is the equivalent of Autogate, and that's all bolstered by the acquisition of DP360. And then on a data front, we're improving attribution and audience distribution via ZIP code, matching post-inquiry surveys and search algorithm upgrades. Just looking at Slide 32, and we're also enhancing our private seller experience by launching a new concierge service, and that's enabled the acquisition of a small -- enabled by the acquisition of a small business called Pop Sells, which provides services in that area. Cash offerings to option gives our sellers a fast way to achieve a dealer back path to sell with certainty. The concierge service provides a full end-to-end solution handling everything from listing and photography to negotiation and paperwork. And these additions offer sellers more choice, convenience and confidence while helping dealers access quality inventory and improve conversion for professionally managed leads. Looking at Slide 33 and sticking with North America, we're also targeting the $1 billion marine market opportunity that we have through the launch of Boatmart that many of you are aware of and the rollout of a pay per lead model, which we're very happy with how that's going. And this approach really aligns dealer spend with performance, and it's already driving a really strong early traction through dealer participation and lead volumes that we're seeing. And so with these enhanced tools and the redesigned marketplace experience, Boatmart is really well positioned now as a key growth driver for Trader Interactive and their portfolio. And we'll be investing more money into marketing here in FY '26 to continue that -- to grow value for our dealer customers. So just on to Slide 34 now and looking at LatAm and Brazil and webmotors, they've introduced a product called Altron, which is a generative AI solution that automates early buy interactions. What it does, it delivers instant context to wear responses, scores leads for dealers based on engagement, summarizes conversations as well. And this should increase conversion rates for dealers over time, which will significantly add to webmotors value prop. webmotors is also accelerating media growth in Brazil, targeting the $1.5 billion media market, which like Australia has over 60 OEMs. On to Slide 35 and looking at South Korea. Guarantee 2.0 is an evolution of our original inspection-based guaranteed product designed to deepen consumer trust and drive dealer performance. So what we're doing is introducing Guarantee Plus+ listings, which provides differentiated listings, more detailed inspections, things like underbody photos, extended warranties and a 7-day money back guarantee. And this strategy really builds on the success of the original guaranteed product, which now reaches 59% penetration of new listings on the Encar side. Then looking at Encar Home and the focus is going to be on scaling adoption, expanding inventory, enhancing automation through AI and deepening integration across the Encar ecosystem to drive -- really drive trust efficiency and growth. And look, lastly, on the right-hand side there, just looking at Dealer Direct, and we've increased our advertising spend there that many of you would be familiar with over the last couple of years, and that's been to really accelerate awareness adoption of the Dealer Direct product, supporting our goal to grow market share in the country's largest and underpenetrated or large and underpenetrated online trading segment. Okay. On to the final slide. As I wrap up my final results conference call, I'm proud to reflect on the group's excellent performance. Our growth in revenue and earnings by multiple growth levers. We've continued to build on our market leadership position, strengthening our core competitive advantage and removing those friction points in buying and selling, unlocking new monetization opportunities along the way. Our international markets present significant upside with new products driving customer acquisition and take rates across the board. We're also leveraging our IP and technology across our regions of base with much more to come. We've got an experienced and focused team who're really energized by the potential growth in our business, and this gives me great confidence in the future that we have. Importantly, we remain a strong generator of cash flow with a robust balance sheet, enabling us to invest for the future while delivering attractive returns to shareholders. So -- and the last thing I'll say is a big thanks to all of you on this call for all your support and friendship over many years. It's been a massive privilege for me to lead this incredible company. I'm proud of the value that we've delivered to shareholders and really the fun that we've had and personal growth, too, I guess, that we've had along the way. I'm also really extremely confident in the business that we have. It's in great hands with an incredible leadership team being exceptionally well led by Will, and it's really well positioned for the continued success that we've seen into the future. So with that, I will hand over to questions.

[Operator Instructions] Your first question comes from Eric Choi from Barrenjoey.

Rachel, did you want me to ask them all at once or one by one?

Just ask them all at once, mate.

All right. Well, maybe first one for you, Cam. I don't know if you remember at the August '17 conference call, which was your first CEO. But at that time, you said it was your job to plant acorns that grow into Oak trees. And if I reflect on some of the Oak trees, you've helped grow, obviously, cars more than half international to double-digit earnings grower. There's a culture of cross-pollination. So my first question is, what are some of the acorns that you and Will and the rest of the team are only just starting to plan and investors will benefit from in the next, say, 5 to 10 years? Second question is for David, just on the U.S. I think even if we exclude M&A, you're guiding to double-digit revenue and double-digit EBITDA growth. But there's some in the market who are questioning if you can actually achieve that. That's not us. But my question is, can you give us some color on how subscribing dealers and initiatives like Marine Leads, Xenara, SSI, all of those things are tracking in early FY '26 that gives you the confidence to guide in a reacceleration? And then just a third question for Eduardo. For CARS Group guidance to work, I think it implies LatAm grows revenues in the 20s again, probably similar to FY '25. This is better than consensus, which has it falling to the teens. So just wondering, Eduardo, can you comment if any of the key drivers in FY '25, and there's too many to name, media, wallet, finance, et cetera, et cetera. Are any of them actually materially slowing in FY '26?

Thanks, Eric. I'll do the first one, and thanks for reflecting on acorns to oak trees, mate. I mean there's plenty of oak trees around this table sitting with me today. And look, I think 10 years out is a long way to project. But if I think about what we've got in the deck in terms of the things that we're working on around 2026 and beyond, I mean, there's an incredible amount of innovation going on throughout the business at the moment. The product pipeline is the best I've seen it in a long, long time. And you hit the nail on the head, mate. I mean the collaboration across the group in terms of caring IP and technology is elite at the moment as well. And I think that's going to set us up nicely. I think it was Slide 7 or 8 where we talk about the markets that we're in and the TAMs that we have available to us. I mean, if I reflect on our TAM penetration, we're only single digit across the globe. And if we keep executing the way we are and we project over 2026 and beyond, I mean, this business is going to continue to grow very, very nicely for shareholders. So I think for me, there's many, many different opportunities that we've got and the team that we've got here, I think we will continue to execute for many years to come. David, if you want to talk the next one?

Sure, Cam. So yes, look, Eric, good question. But if I think about the way we finished the FY '25 year, I mean, -- we -- traffic and connections has really ticked up, which has been nice. The price rise that we did in Q4 went very, very well. So that was really pleasing. Our Premium Select product continued to outperform. Our private volume notably lifted, which was nice because we hadn't seen that for a while. So that coupled with the yield work that we've done is really beneficial. From a media standpoint, we had an exceptional sort of finish to the year, and we take that into FY '26. And our data business went from strength to strength as well as lay down a really strong foundation as it related to marine. And as you know, we've worked really hard to diversify our business. And I just think we're well set. We've got a great product road map as it relates to our dealer business. with premium AI, as I said, as well as Xenara, the digital agency. The media business is growing from strength to strength. We launched Xenara, so we've not only built a media business, but we've also got a new in-house agency, which is going to be really strong for us moving forward. Our OEM relationships continue to improve. And yes, that's been what we've been doing over the last 18 months, and I feel really confident moving into FY '26. The other thing is that our biggest segment, RV has really started to show signs of improvement in Q4 and into FY '26, which is pleasing for us. Retail sales have grown for the first time in a long time. Dealers are looking for inventory now, which is the first time they wanted that for a long time, used inventory, so via our cash offer product. Our OEMs are very active. The tariff impact for RV is also a lot less because a lot of it is locally sourced and produced. And from a customer perspective, big customers and smaller customers are starting to do well. So that -- all in all, that's why we're looking for double-digit growth in revenue and why we're targeting double-digit growth for profit even with the marine investment.

Can I ask a quick follow-up, David, just because there's a lot of, I guess, chatter around margins. But obviously, you've made some U.S. M&A. Can you comment on whether the revenue contributions are greater than the EBITDA contribution from that M&A? And therefore, would you have seen margin accretion if not for that M&A? Sorry.

Yes. So look, without the investment in Marine, we would have seen margin improvement, okay? And in terms of the investments, yes, we've got some revenue coming from that, but only small and marginal profit.

Thanks, Eric, for the question. What I can say, look, of course, as the base growth is going to become harder and harder to keep this 25% level of growth. But I think that we have several levers to keep growing strongly, and I'm very confident of that. Asking your question about slowing down, I'm not seeing right now any slowing down in this segment. I still believe that we have opportunities in terms of premium products and the integration with Wallet is working very well and a lot of things to evolve. Media also, we developed a lot of products that we shared the knowledge with Craig's team in Australia. It's working very well, and it's a great opportunity looking ahead. Financing, of course, we have the highest points in terms of interest rate, we are seeing the market some impact, but not -- Santander is really resilient in terms of that because they are more focused on high-end clients, and we are not seeing a relevant impact of that. And Loop and Car10, still a lot of things to do and to grow. So that's my expectation and the reason that I'm bullish looking ahead.

Cracking 18 years, Cam, you'll be missed.

Thank you.

The next question comes from Entcho Raykovski from E&P.

Just before I start, Cam, well done on a great tenure. On to my questions. Can I just focus on the acquisitions at TI? I mean, obviously, you responded to this to some extent in response to Eric's question. But are you able to give us the expected contribution from acquisitions to revenue growth in '26? And I wonder if you can disclose what you've acquired and whether those acquisitions will be a positive contributor to EBITDA. It seems from the guidance that they're not, but sort of if you can clarify, that would be great. Then secondly, in the guidance for TI in '26, what are you assuming for the pricing contribution? And if you can, in particular, talk about whether it's likely to be a smaller contribution, greater contribution than FY '25. I'm conscious that the ultimate impact may be dependent on the macro environment next year when you decide to increase price again. And have you -- do you now expect to move to an April price increase cycle? Is that sort of the new normal? And the final question, a question on private yield. I know you've mentioned it as one of the drivers for Australia growth. But specifically, our track is picking up some decreases in prices in some regions, particularly in Queensland. So I'm just interested in how you think about yield as a growth driver at the aggregate level in private and whether you expect to slow down?

Yes, I'll start. So look, just on the acquisitions, I mean, they're small businesses, they're strategic, okay? So if I think about the Pop Sells business, it really provides our private sellers and buyers with a concierge service to RV as well as the boat market, which is nice for us. We'll spend a good part of this year integrating that into our private selling experience, okay? So we'll also introduce a thing called closing services. So in the U.S., actually closing a sale and transferring title registration, making sure there's no lean on the asset. It's a very complicated process. So we'll introduce that to our private sellers, which I think will be a good benefit, but will take us time to execute. From a DP360 perspective -- and finally, sorry, this gives us a great point of difference versus Facebook and our competition as well. As it relates to DP360, so the CRM business is a massive cut across our recreation verticals, which is really good. So we expect to drive synergies from obviously, their business and our business together in terms of customers and customer penetration. We're going to be really focused on lead nurturing. So really taking marketplace leads, warming them up with AI and then ultimately helping the dealer to get the consumer further down the path. So again, not really huge revenue-generating things, but things that absolutely help our marketplace business reinforce the value that we drive there and help the business and help dealers with a pain point. Yes. So in terms of revenue, revenue will be a small amount and profit will be marginal in this year for those 2 businesses. And as it relates to price, look, the way we're thinking about it as we do every year, it's obviously August, we'll assess the market, we'll assess value, but we're really happy with how the year started out. So June was really strong. July and August really started off well in terms of visits and connections. So that's obviously a key driver of value. We'll continue to look at that and consider that over the next few months and then ultimately make a call probably just after Christmas. I don't expect it to be any less than last year.

Entcho, I'll cover off on the private question. So we are always adjusting our price on the value-based pricing and expect to see a little bit more of that into the future. We're always testing certain price brackets in different markets. A couple of things. We have seen a slight improvement in private yield in the back half in H2 in the '25 financial year, and we expect that to carry into the '26 financial year with a pretty strong start in July, August. And there's also a number of other things that we've got happening behind the scenes in terms of private with some new brand activations to really drive greater awareness of C2C, which is really exciting. And that will go live on the 20th of August, which again will drive greater value to private sellers, and we should also see a slight improvement in yield.

Your next question comes from Kane Hannan from Goldman.

Three from me as well. I mean maybe one for you, Will, to start with just reflecting on the transition to being the CEO, how car strategy might evolve. Is there any sort of early comments you can make here around at the margin where we might see things start to evolve, whether that's your appetite for M&A, monetizing your current market positions? Just any comments there would be helpful. Secondly, the Trader margin outlook next year. I mean that is, I think, the first time since the acquisition that you're expecting margin declines. Do you think it's still possible for Trader to do double-digit EBITDA growth next year with the investment and that M&A? Or do you think that investment is more about maintaining the double-digit revenue growth going forward? And then lastly, just the product pipeline, Cam, I think you said it's as good as you've seen it. Talk about how we think about the monetization time line of these products, when they might be commercialized. I suppose what's captured within the '26 outlook versus, say, more of a '27 story would be helpful.

Thanks, Kane. I'll kick off with strategy. Look, first, I just wanted to acknowledge Cam's contribution. He said some nice things about me on the call, and I didn't get an opportunity to respond, but he's done an amazing job with the business. And the best present that he can leave is obviously a legacy of an amazing leadership team and as you said, a business that's poised for continued growth. So it's unsurprising given I've been here for 10 years and the last 5 as CFO that it's going to be a strategy of continuity and evolution. We have so many growth levers in front of us. And your second question was around product pipeline. But you can see in the FY '26 focus areas that we're just scratching the surface in terms of our involvement in the full transaction journey. And so the strategy going forward is going to be to continue to get more heavily involved in that full transaction journey. We're going to be using AI more and more to accelerate that experience, the consumer experience. That's certainly going to be a part of our strategy going forward, but it is certainly going to be one of continuity. M&A strategy, unchanged, where an acquisitive business, we've delivered a lot of shareholder growth through M&A, and we think we can continue to do that going forward, but we have a very high for our investments. That's probably a good summary. Maybe I'll hand over now to Dave just to talk about U.S.

Yes. So I mean, look, as I said earlier, so we're targeting double-digit growth. Is it possible? It's absolutely possible. If you heard what I was speaking about before, I mean a lot of those products are very, very high margins. So that's nice. The second thing is the team has done some really great work as it relates to our cost base over the course of FY '25 as well, in particular, around software, obviously, the utilization of AI inside our technology environment and ultimately, working with Will and Jason and the team around group deals to drive cost down. So it's absolutely possible, and that's what we're targeting. And just on the monetization time line, Kane, I mean, just with all the focus areas that we've got in 2026, I mean there'll be some of those products and innovations that will go to things like price and other things that will just continue to evolve like Boatmart and the investment that we're making in Boatmart, both product and commercial models and the traction that the team is getting there. There'll be continuation of ongoing monetization, those sorts of things. So I think you'll see a combination of ' 26 monetization and then you sort of look out a little bit further with things like C2C and how the business will monetize that over time as we continue to get traction there, I guess, it's probably more a '27-plus story. But yes, expect to see certainly some cool things coming through in '26 that we'll be monetizing.

The next question comes from Roger Samuel from Jefferies.

I've got 3 questions as well, please. First one, just looking at your FY '26 guidance, if I look at the range for revenue and EBITDA growth, it implies a 1 percentage point decline in the margin. Is that how we should be thinking going forward as the proportion of your earnings from offshore is growing relative to the domestic business? Second question is more around long-term threat to the business. We've seen that Amazon is starting to sell used cars in the U.S. It's only for Hyundai at the moment, but do you see any potential disruption to your business? -- in the horizon? And then third question is on South Korea. It seems like the penetration of guaranteed inspection is still stuck at 59% of new linked things. So that's consistent with the last result. Is that the core focus of the business now? Or you're sort of leaning more towards Dealer Direct in Korea?

Yes. I'll take the first one, Roger, just in terms of the margin performance. So you're right, we are calling out the range of revenue growth to be a little bit higher than EBITDA growth. There's 3 things there. One is investment in Marine next year, we're going to step up a little bit because we see a huge opportunity there. The second one is we're continuing to invest in marketing in Dealer Direct in Encar and also the small deals in the U.S. that we've acquired will add some revenue, but minimal EBITDA. And so all of those mean that there will be a slight gap between revenue and EBITDA growth likely. The thing that is pleasing is you're seeing the top end of the revenue growth range being higher than what we delivered in FY '25, and that reflects us targeting growth. We are a growth business. And as we discussed before, we've got so many opportunities in front of us. That doesn't mean we don't have operating margin expansion potential going forward, which we certainly still have, but we reserve the right to continue to invest in things to drive growth going forward. In terms of the threat question around Amazon, look, we've encountered many competitors over the journey where a paranoid business at our core, and we're always looking to try and make sure that we avoid being disrupted. This is just another one of those competitors that we need to watch. We're not concerned about this versus any other competition that we have. And so we're very confident in our ability and our market position to keep growing. And then I might hand over to SB just to the third question around South Korea and the guarantee.

Sure, upon your question on guarantee. I think, I mean, about a year ago, our penetration of guarantee was -- can you hear me?

So you spoke about -- you said that was...

Sorry, someone go on mute. We can hear someone on the line.

All right. Upon the penetration of guarantee, I remember there was a relatively early 50% about a year ago. Now it's 59%. So I still believe that I mean there's no reason why we cannot make it grow until 70% or above 70%. Of course, it will be harder to increase compared with when we are at the beginning stage to make it grow from the 10% to 20% or 20% to 30%, but still we can grow that. And at the same time, I mean, in addition to make the guarantee to be more contributing to our revenue growth. I mean, there are 2 things that we have been focusing on. The first one is to launch the Guarantee 2.0, as you may be seen in the past because there must be a customer who are willing to pay more in the Guarantee 1 customer segment. So I mean, we would like to provide the better services for them to be able to pay more on that. And the second one is in order to increase 50% to the 70% penetration, we need to be a little more innovative to address the inventories of dealers in the rural area with a lighter brand format. So to make our brand format a bit more lighter and innovative is the second thing that we have been focusing on that. So by doing these 2 things, I mean, there's no reason why we cannot reach higher percentage as well as capturing more value of the Guarantee in the future.

We have time for one more question.

Your last question comes from Siraj Ahmed from Citi.

I'll ask 2. Maybe first one, David, just in terms of the guidance for next year, can you just touch on both specifically? Are you assuming much for both? Maybe just in that, if you can just give an update as to how it's tracking as well after you turned on the leads pricing model? And second one, just maybe one on Australia, Craig. I mean, you talked about the Autogate revolution. Just keen to understand whether you assume much for that in terms of depth increase and price in the FY '26 guidance? Or is that into '27 and beyond? And then second part on that, just in the private, I mean, it did slow to sort of 3% growth in the second half. You are saying it's a strong start, and I think guidance assumes volume growth as well. Can you just touch on what the drivers for private into '26 is...

So, as it relates to Boatmart, look, I'm really pleased with the guys and with the business in terms of the launch of CPLs, we launched that essentially in Q4. As you guys know, as a challenging brand and with a model that's different to the U.S., it's the Australian leads model, and we're really standing behind what we sell, which in that competitive landscape like a smart thing to do. So customer growth has been moving along really, really well. We signed MarineMax. We're the biggest marine dealer in the world. So that's really pleasing and obviously helps other customers take note of the platform. Our traffic is growing rapidly. So we're nearly -- we're approaching 2 million visits a month. So -- and the nice thing about that is that our organic traffic is really starting to accelerate now, which is pleasing based on a lot of the strong SEO work that the company has done. And with that, clearly, leads are at record highs. And there's some real interest from the industry itself in terms of dealers really just craving an alternative. And the nice thing is with both acquisitions, so DP 360 has a lot of really large overlap with our marine dealers and POP sell is the second part of their business is RV and then boats. So we'll introduce that into that environment as well. So still really good about where we're at with boats and with the investment, really optimistic about what we can continue to achieve.

Yes. Regarding Autogate Revolution. So we co-created Autogate Revolution with our dealer council partners, which to make sure that we're really focusing on an outside in and developing solutions for the future that really help our dealer customers with onboarding, acquiring of vehicles. and making sure that they're pricing them to market to turn stock in a timely manner. So there's a number of additional features that have gone live within Autogate Revolution, which is essentially to create greater value for our existing customers, and there will be some additional features into the future, which we will look to monetize. In terms of commercial upside in the '26 financial year, we see that Revolution will very much be supporting our existing base in the '26 financial year.

Was last question, Siraj, you asked about private seller. Do you want to repeat the question?

Just private, I mean it slowed to 3%, right, in the second half. Just I think volumes were negative, but it sounds like you're assuming volume growth in '26. Is that what you're seeing in July and August?

Yes. We see volume remaining pretty steady. But what we are seeing is instant offer is performing well for us. And we -- with all of our pricing adjustments in terms of value add and what we're about to kick off on the 20th, we see volume remaining fairly steady in the '26 financial year.

Excellent. Well, that takes us to the end of the call. Thanks, everyone, for joining this morning. Really appreciate it. And best luck for the rest of earnings season and for the team that we'll be going around talking to everyone over the next couple of days. So thanks for joining.