Corporate Travel Management Limited (CTD) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Corporate Travel Management Limited Half Year Results 2025. [Operator Instructions] I would now like to hand the conference over to Mr. Jamie Pherous, Executive Director, Managing Director. Please go ahead.

Thanks, Kylee, and good morning, everyone. My name is Jamie Pherous. I'm the CEO of CTM. I'm also joined today by James Spence, Global CFO, and we are pleased to deliver our 1H '25 results. This presentation should take around 30 minutes plus Q&A. So if we can go straight to Slide 4, please, the 1H '25 highlights and if we can -- or straight to Slide 5. As we've said previously, -- we made 3 assertions. Firstly, that FY '25 is going to be a transition year for CTM as Europe cycles off the one-off war-related projects that we did last year. Secondly, we also shared that this is the first year of our 5-year strategy, where our goal is to double EPS in 5 years. So our third assertion was given Europe is in transition in FY '25, we said the rest of world, which is -- which represents over 80% of our group revenue, would best underscore effective strategy execution. As a result of this, we have separated Rest of World from Europe in coming slides to best highlight this underlying performance of the business. So let's get into the results on this slide. First, we are pleased to advise that our group 1H EBITDA was $77.4 million, better than we expected. In order to look through the one-off impacts of Europe last year, we presented on this slide the compound growth from FY '23 to FY '25 and I'm pleased to say we are on track to meet our long-term goals of doubling EPS over 5 years. You can see on this slide, compound revenue growth over the last 2 years is 8% and EBITDA is compounding at 24%. So our 1H '25 result is led by the rest of the world, particularly Australia and New Zealand and North America, as you'll see on coming slides. Secondly, this result is underpinned by sound execution to our capital management strategy, which James Spence will talk to in a little bit more detail later in this presentation. We have no debt. We expect strong long-term cash conversion at historic rates of circa 80% to 90% and have returned $52.3 million to shareholders in the half through share buybacks and dividends, which will continue in the second half. So let's go to Slide 6, our strategic goals. I want to take this opportunity here on this slide to revisit the strategic goals and commitment we made to the market. Firstly, the Rest of World, where we said, we would grow market share, increase revenue per transaction and leverage our scale for productivity gains. Secondly, in Europe, where we said FY '25 would be a transition year as we cycle off those one-off war related project work. We said we would have a strong focus on growing market share through leveraging our Lightning tool, which we believe is best in market. And by doing so, we would set up Europe for long-term growth into CY '25 or calendar '25 and FY '26. And lastly, to our long-term goal of doubling FY '24 EPS in 5-years. A key plank to this plan was to establish a capital management program that optimize returns to shareholders to ensure we had an executive team in place that could best execute this plan. So throughout this presentation, James and I will clearly demonstrate that we are executing to this plan. And because of our execution and the line of sight we have into future momentum, we will also outline our FY '26 expectations later in this presentation. So let's go on to Slide 7, Rest of World performance. As I said earlier, the Rest of World ex Europe best underscores effective execution given Europe is in a transition year. And as you can see here, we are executing to plan. 1H EBITDA is up 38% to $66.7 million, and EBITDA margins actually expanded 500 basis points from 18% last year to 23% in 1H '25. Revenue was up 8% on the PCP. Importantly, this result is led by our largest regions of Australia, New Zealand and North America, which we will highlight shortly. Secondly, through a combination of momentum and the normal seasonal skew we get in this business, we expect both revenue growth to be higher than the 8% and profit margins to be higher than the 23% in the second half, as James will reinforce later when we talk about our FY '25 metrics. So if we can go to Slide 8, this is an important slide. Really, this will underpin what's driving our performance. So as we've said, you can see there in terms of the Rest of World in the first half, we had 86% conversion of incremental revenue to EBITDA, which is above our expectations of our 5-year strategy to do around 50% -- and this was achieved through 2 key initiatives of strategy that set us apart from our competitors. Firstly, we have very high adoption of CTM's proprietary technology, and we'll talk about the advances we're getting in North America shortly. And secondly, we have a strong focus on automation, AI and machine learning to leverage scale. As I've said before, and I'll say it again, both these initiatives are our competitive advantage in the marketplace. But importantly, this isn't to the detriment of our customers. In fact, customers win through this strategy and enjoy the benefits of our cost base efficiency. It's our superior automation delivering a very competitive cost base that is driving our profit contribution, not the revenue we make or derive from customers. The revenue margins derived from customer TTV is, in fact, the lowest of all of our benchmark peers being the big 5 TMCs. That's important to note. Further, high uptake and satisfaction with our technology and eliminating manual processes leading to high customer and staff satisfaction. Happy staff, of course, means happy clients. And the outcome is we are winning business at or above expectations with $0.6 billion or $600 million of annualized clients won at 31 December, and we continue to retain clients at our long-term retention rate of 97%. It's also nice to note here, you can see the wins as of last Friday have since climbed to $0.88 billion, a pleasing achievement by mid-February. And in fact, I can say today, they surpassed $900 million as of yesterday, and that's versus a full year forecast of $1 billion. So we're tracking really well this year on the wins. If we can go to Slide 9, Europe. As stated previously, this is always going to be a year of transition as we cycle off the one-off war-related project work of FY '24. So to best demonstrate the underlying business performance, we have presented FY '25 against FY '23 metrics because FY '23 was a similar period that had little to no project work in it. So as you can see on this slide, in 1H '25, we achieved an EBITDA of $21.8 million at a really healthy 38.6% EBITDA margin. This represents 13% compound annual EBITDA growth on FY '23. But what was most pleasing was that this EBITDA result was achieved despite reduced government spend as previously flagged at our AGM, and whilst carrying 80 staff transitioning from servicing that project work last year to be ready to service the record corporate wins that commenced in the second half that we've already flagged earlier in the year. So when you consider the cost of carrying this workforce in the first half, you can extrapolate a much larger profit compound annual growth rate from FY '23 to FY '25, which is more representative of the business and how it's going to look going forward. So further to this, we were appointed sole provider of Lot 1 being the U.K. government's TMC travel services framework from January, where previously we were a panel of 3 TMCs servicing that panel, that lot. At the time, it was difficult for us to assess the impact of the business given the U.K. government indicated a reduction in travel spend. But now it is becoming apparent that this will have a positive impact to the volume and scale of services we'll provide in the future. And just again, to reinforce this incremental business that we've won by winning the whole TMC panel had no contribution in the first half result. So James Spence will talk to this impact of the momentum into 4Q '25 and to FY '26 guidance in coming slides. Then if we can go to Slide 10, the executive team. Again, my commitment by the end of calendar 2024 was to establish the right team to execute our 5-year strategy that could enhance the key initiatives of our strategy, namely: one, market share and revenue growth; 2, productivity; and 3, strong capital management. So you can see on that, that James Spence came in as CFO to bring a much more disciplined and strong capital management behavior in our business, and that's working well. Secondly, on the right-hand side, you can see Eleanor Noonan. She was uplifted to COO, and her focus is on productivity and project execution. You can see through this presentation, both those facets of our business are doing very well. So the last thing to round out this team was to shore up our long-term market share and revenue growth. And what you can see on this slide that we've added a few people. So we welcome Ana Pedersen in a new role of Chief Commercial Officer, who joined in October. And in January, we welcomed Darren Toohey, previously the Global Head of Sales and Account Management at CWT and elevated Joel Bailey to the Global CTO role. The whole purpose is to underpin and sustain long-term revenue growth and long-term market share growth. So I'm really pleased with the team we've got moving forward. So now, if we can go on to Slide 11 and then straight to Slide 12, Australia and New Zealand, let's get straight into the regions. So firstly, with Australia and New Zealand, look, we are just delighted with this performance in the region. 1H revenue was up 18% in what was a very flat corporate market to $96.1 million, and EBITDA was up 53% to $28.5 million with 1H margin uplift up 700 basis points from 23% to 30%. But firstly, revenue growth is through a combination of winning clients and as we flagged clients returning to CTM and the ongoing success of Sleep Space, our proprietary accommodation content and aggregation tool. Important to note, that what you're seeing in these results that Sleep Space is not yet rolled out anywhere except Australia, but we expect Sleep Space to roll out the rest of CTM in the coming months. The margin expansion is the leverage we have in the business through automation gains and the benefit of the Atlas project, which we've completed to merge 4 regional back office support areas into one, which again, James will touch on a little later. On to Slide 13, if we can North America. We're also delighted with this result, and it's a testament to the new leadership team being led by Anita Salvatore. 1H EBITDA was up 49% to $30.5 million, again, what was a relatively flat market in North America with EBITDA margin uplift up 500 basis points from 14% to 19%. Similar to Australia, this is a result of the Atlas project and automation gains. But additionally, the margin expansion was attributed to the scale of the business, but also in North America, a rapid increase in ongoing online penetration of our proprietary booking tool Lightning. So whilst revenue is only up 6%, as you can appreciate, when we move clients through our OBT, 2 things happen. When they come from offline to online, we get lower fees. It doesn't affect TTV, but affects lower fees and revenue. And also as we move off third party, we have lower fees, but we don't have the cost of the third-party OBT fee. So when you look at that 6% revenue, this is why it's more than made up through efficiencies, elimination of third-party OBT fees and productivity, leading to a very strong margin expansion. What's really important here is Lightning is really getting good traction, but it has a long runway to go yet. We expect Lightning uptake to continue strongly into CY '25 and be on the same trajectory, which is a really good thing for this business. This is also a reminder that North America has a historically strong skew to the second half due to seasonality. As a result of all the things I've said, we expect North America to have a strong second half, but also be a major contributor to both FY '25 and FY '26 performance. So now if we can go on to Slide 14, Asia. As we previously flagged, Asia was impacted by material price deflation of 25%, particularly with our exposure to Greater China, which is really a remnant of COVID. This is a region where we are more reliant on supplier revenues and having ticket price of 25% had a direct impact to supplier revenues and revenue per transaction. But because it's only 9% of group EBITDA, it had little impact to the group and the Rest of World result we outlined earlier. But what is difficult to see in these numbers is the success in market share gains. Despite a 25% price deflation, revenue was only down 7% and EBITDA down 15%, an outcome of 11% transactional growth through continued market share wins in corporate. But importantly, post half, ticket prices appear to have steadied. Supplier revenue targets that we're setting for new contracts are a lot more realistic moving forward and supplier payments that weren't being paid are now returning in our contracts. If this remains, we expect a strong second half as a result. But to round out the regions, we have Europe on Slide 15, which I've already talked to earlier on Slide 9. So now I'll pass over to our CFO, James Spence, who will run through the financial highlights as well as FY '25 target metrics and FY '26 metrics. If we can move to Slide 17, and over to you, James.

Thanks, Jamie, and good morning, everyone. Slide 17 summarizes the group numbers versus the PCP. So the headline metrics are largely negative given that we're transitioning off the strong Europe numbers, which were driven by one-off war-related project work. I'm not going to run through the line items, but we'll highlight the following points while on this slide. Firstly, the effective tax rate, you can see, has dropped to 23.9% as the U.K. benefited from previously unrecognized tax losses. We expect a similar level at the full year. Secondly, in the transition cost table in the top right, you can see that costs, which relate almost entirely to Project Atlas, our standardization and efficiency project for back office and finance are in line with the $7 million we indicated back in August. The transition is now largely complete, and we do not expect any further significant transition costs in FY '25. Turning to the cash flow summary on Slide 18. You can see net cash outflow in the period of around $60 million. The 2 key outflow items are the change in working capital and returns to shareholders. In terms of working capital, we had supplier payments in the final days of December across multiple regions, resulting in unfavorable timing of working capital moves. This is consistent with first half moves in previous years, and can be seen quite clearly in Note 7 of the accounts where client payables have dropped by almost $100 million versus June 2024. Also consistent with previous periods, we expect this to reverse sharply in H2 with full year cash conversion forecast within our normal range of 80% to 90%, implying very strong cash inflows in H2 FY '25. And since year-end, we've seen a buildup in our cash consistent with this forecast. You can also see on this slide the cash returned to shareholders in 1H '25 in the form of $19.2 million of dividends paid and $33.1 million of buyback, which I'll deal with further on the next slide. Note also that CapEx was $20 million in the half. As previously communicated, we've increased the focus on ROI discipline. We expect to see the full year FY '25 CapEx trend below the original guidance of $48 million, closer to $42 million overall. So looking now at capital management on Slide 19, I'll highlight where we've got to on the buyback. In 1H '25, we bought 2.7 million shares at an average price of $12.15 per share, totaling $33.1 million. This brings our total cash spend on the buyback since inception in 2023, $59.2 million and around 3% of total outstanding shares bought back. Our intention is to continue the buyback during 2H '25, consistent with the plan announced in August 2024, purchase up to $100 million over and above amounts purchased in the previous financial year. As we said, this is subject to Board discretion and will depend on various factors, including trading performance and other potential uses of capital. Commitment to buy back shares reflects our view that the strategic value we see in the business is greater than the current market price. Overall, the balance sheet remains strong with net cash of $75 million and an undrawn facility of $100 million, which we intend to refinance in the coming months. So now moving to the FY '25 target metrics slide on Page 21 of the presentation. We have the same format in our market information, as we think this is the most helpful way to share the underlying drivers of the business and to highlight expected performance. As you've already heard from Jamie, we see Rest of World ex U.K. as underscoring the group strategy, noting that these 3 regions represent over 80% of group revenues. And we're confirming today the same FY '25 metrics as we provided in August and October at the AGM for expected performance across these 3 regions of revenue increases versus the prior year of around 10% and EBITDA margin at around 27.5%. The strong revenue growth metric is driven by customer wins and revenue uplift as a result of improved products and technology. The EBITDA margin uplift is from cost discipline and efficiency, the scalability of revenue growth and the contribution of new projects, particularly Atlas, which I referred to earlier on, our back-office improvement project. This implies 35% EBITDA growth on FY '24 for the Rest of World regions. As previously flagged, revenue growth is negative in Europe, where we transition off comps, which included significant project work. In October, at the time of the AGM, we highlighted that the expected revenue reduction was at risk due to U.K. government reviews of expenditure. Now we have greater clarity on U.K. government expenditure reductions. We estimate that the revenue change versus FY '24 for Europe will be approximately negative 24%. We've been carrying around 80 staff to service the record new corporate wins expected to come on during 2H and into FY '26. EBITDA margin in Europe is expected to remain strong at around 43% overall for FY '25, but lower than the previously indicated level due to the effect of reduced activity on a higher cost base during this transition period. We have said that FY '25 is a transition year as we move from heavy government weighting to a more BAU balance between corporate and government. We expect to see an uplift in margin in 2H versus 1H, particularly in the last quarter due to 2 main factors. Firstly, we've won a record amount of corporate business in EU, as these clients progressively onboard in 2H, we'll see greater utilization of the fixed cost base c80 staff, providing strong leverage to EBITDA. And secondly, as we outlined at our AGM, we were appointed sole provider of the U.K. government TMC travel services framework from January, previously a panel of 3 TMCs. At the time, it was difficult to assess the impact of the business given the U.K. government indicated a reduction in travel spend. It's now apparent that this will have a positive impact to the volume and scale of services we'll provide into the future. Moving on to group metrics. You can see that CapEx is trending lower than previously indicated at around $42 million with the enhanced focus on ROI, a trend we expect to continue into FY '26. We also see that group costs and nonrecurring costs are in line with previous indications. Moving to growth metrics. The client TTV wins metric, as you heard earlier from Jamie, is tracking at $880 million as of last Friday versus our original indications of around $1 billion for the full year, and that's obviously pleasing to see. Customer retention remains at our long-term historic average of 97%. Turning now to Slide 22, where we're sharing indicative metrics for FY '26. The reason for providing this now is that we've completed in January a bottom-up group forecast region by region, which is useful to inform a view on the growth metrics of the group following completion of the FY '25 transition period in Europe and to illustrate where we see the run rate of the business. We anticipate in FY '26 that group revenue growth will be around 10%, following strong year-to-date sales wins, we continue to see in FY '25. This complements the initiatives we're rolling out this year and to support further revenue expansion such as Sleep Space. Europe is expected to be a significant contributor to growth in FY '26, as we mentioned earlier. Forecast group EBITDA margin of around 30%, which will be an uplift on FY '25 with the benefit of efficiency and automation projects combined with the scale impact of new revenue growth. This implies around a 20% EBITDA growth on FY '25. CapEx in FY '26 is currently forecast at around $40 million with the increased focus, as previously mentioned. In addition to the ROI focus, we're reviewing our tech delivery model and increasingly expect to use a global as opposed to a regional model to facilitate further efficiencies. We will, of course, continue to update these metrics as we move into FY '26. So with that, I will hand back to Jamie. Thank you.

Thanks, James. If we can move to Slide 23. As we said before, we set our strategic goals. And in closing, we think we're demonstrating we're delivering the strategy versus the Rest of World. We've demonstrated we are growing market share, increasing revenue per transaction and leveraging our scale with productivity gains to better service customers. Rest of World first half revenue was up 8% and 1H EBITDA is up 38% with margin expansion up 500 basis points to 23%. Australia, New Zealand and North America are the highlights, up 53% and 49%, respectively, on EBITDA. And as James said earlier, on a full year growth basis, Rest of World is going to grow at 35% EBITDA of FY '24, we believe is quite a way above our peers. Secondly, to Europe. As part of the transition, we've had record corporate client wins that have continued into the second half. And we've maintained margins all the way through this despite carrying the cost because of automation. As revenue increase against the fixed cost base, we expect a strong 4Q '25, improved margins and a strong FY '26 as we annualize this performance. Of course, we talked about the incremental gains we're going to get from the government contract as well. And lastly, to our strategy to double EPS in 5 years. James has highlighted the capital management strategy to enhance shareholder returns. Since the announcement of this strategy, we bought back $59.2 million shares, paid out $77.2 million of dividends and are achieving a better return on our CapEx investment. These initiatives will enhance future EPS growth. And additionally, we also point out we've built a team to execute the long-term strategy. So lastly, it's important to share again the momentum we are seeing and the runway we are seeing gives us confidence to outline our FY '26 indicative metrics, growing revenue by 10%, increasing EBITDA margin to 30% from circa 27.5% and reducing CapEx to $40 million from $48 million in FY '24. Again, this will add up to strong EPS growth that supports our 5-year strategy. Please go to Slide 24. This is again, just to leave you with the glossary of terms that we've shared in this presentation. But now if we can move to Slide 25, I'll now hand over back to Kaley, our moderator, for any questions.

[Operator Instructions] Your first question comes from Tim Plumbe with UBS.

Just 2 questions from me. First one, please. Can you discuss -- and apologies if I missed this, I joined a little bit late. But just how are you seeing the overall underlying health of the corporate travel markets, particularly in ANZ, U.K. and the U.S. When you're talking to clients and discussing individual budgets or spend per client, how are you seeing that? And then the second question, when you're thinking about your FY '26 number, it looks to be underpinned by strong new contract wins. You're currently sitting pretty comfortably at $880 million. If you got more than $1 billion worth of new contract wins in FY '25, would that give you more upside to FY '26?

Okay. Thanks, Tim. First question of activity. Demand is strong, it's positive across the board. And in FY '26, the wins, just to put perspective on how wins usually work, it's a momentum gain. So last year, we won $980 million or so wins, and you're seeing that play out. You saw that momentum, particularly in Australia and North America. You can't see that in the U.K. because of what's going backwards in terms of coming off the project work. But like I said today, we've just passed through $900 million. In fact, someone who's on Board as of this morning, we're at $930 million. So that's going really well. But what that suggests, it does underpin next year. So if we're getting the results we want out of $980 million, just to put perspective on it, we're going -- we're doing well on the wins, right? I hope that's really evident. Secondly, we haven't rolled out Sleep Space the rest of world. That's got an incremental play to it. And you can see the investment we've made in a Chief Commercial Officer. We've just got the Global Head of Sales and Account Management, CWT. That says much about our long-term investment. So it's too early to call. We're putting out metrics today, but I think the fact that we are should suggest we have a conviction on next year. But really, what we're trying to do, the market should be looking at our run rates for next year, not because of the -- we're going through this transition through Europe, and that's what we're trying to make clear.

Your next question comes from Bob Chen with JPMorgan.

Just a follow-up on the new client win side. I mean, it sounds like the run rate is very impressive. And to me, it sounds like you're on track for well over $1 billion this year. Is that -- is there any sort of seasonality to how client wins happen? Or are you expecting any slowdown in that momentum into the second half that we should be cautious of?

Yes. Thanks, Bob. I mean, I think it's not really about the seasonality you think about the pipeline. So if we've got a really strong pipeline and discipline in the pipeline, we know that you can't cheat that. So it's how many meetings turn into wins. And that's where with Ana coming on Board, we've improved that significantly in terms of the discipline around that. We're chasing the right clients. We got so much time in a day per salesperson that when you combine that with the improved value proposition, we're just getting better results out of our sales team. And further, the technology right now with all the changes in NDC and other things is becoming a really big advantage -- a really big advantage of your own technology, and we're seeing that come through.

Yes. And just a final one. There's obviously been a lot of news around the MX GBT and CWT merger, and they seem to have run into some competition concerns. I mean, is that creating opportunities for you, just that uncertainty with that transaction there?

Well, we did talk about our new appointment, Australian sales, global sales from CWT. I mean, I think it probably will. I mean, I think as I saw the note today is that CWT, it appears is a much lesser business than what it was 12 months ago because of this transition. So we see it as a big opportunity. We know what happened to us when we acquired Helloworld, we were held up with competition bodies and the impact of the business. So we're well aware of that. But look, for us, look, we said it over and over, it's a USD 1.5 trillion U.S. market. We're still a small player in that with a huge runway. But as you can see with our wins, we're really pleased with what we're doing. And the investment we're making in that part of our business is to ensure that the market share wins, as we've outlined earlier when we talked about our strategy, have to grow each year, and that's the purpose. So it's pretty simple, our value prop now in terms of our strategy, want to win business, get more revenue and keep using our automation AI/ML to make sure that our cost base is super efficient.

Your next question comes from Mitch Sonogan with Macquarie.

Just on the FY '26 target, you've talked to Europe being a significant contributor to the growth. And I think James talked to the second half EBITDA margin of 43%. So can you provide any color on what we should expect in FY '26 in terms of EBITDA margin or a range or what's implied in that FY '26 target?

Mitch, you jump in again a bit there. I mean we're putting our FY '26 metrics across the whole group. I think a couple of points to make is that 43% for Europe is the full year. So it goes to show the momentum in that business. That's -- so I think we did -- what did we say, 38.6% in the first half, so you can appreciate that the second half is coming home with a tailwind. And as James said before, it's because as we've said, we really have won a lot of business in Europe in corporate, so much so that we kept those 80 staff, right? That's clearly going to be soaked up as we get through to June on a full run rate next year. And of course, we've also talked about that incremental government business, which we're starting to become apparent that that's going to be pretty good for us as well. So the idea of these run rates will set up pretty nicely in FY '26. And that's what gives us 2 things, just the confidence and conviction in what we're putting out, but also just to give you guys in the market a bit more understanding of the momentum in the business. We're not going to talk to margins next year. I mean, I think our philosophy now is we're trying to double EPS in 5 years. We're on plan to do that. We know what that's going to do in EBITDA. We can see the things we're doing to enhance EPS whether that's share buyback, whether it's better capital management, we're getting much better return on our technology build without compromising our value prop. So we're doing a lot of things right. I think we'll talk to those things as and when the time is right.

Very clear. I'll ask it again in 6 months. Just a second one.

Yes, no...

On the incremental EBITDA conversion, that was pretty high in the first half. You had about 100% in North America and 70% in ANZ. Can you maybe just give us an update or a refresh on what we should be expecting over the next couple of years, FY '26, '27?

Yes. I think our metrics sort of indicate that. So you can see -- I mean, you can chart your own course, I guess. But we're making pretty clear 10% revenue. And I think we've given you 3 or 4 good reasons why we've got conviction on that. We've talked about margin being circa 30% next year, which is an uplift of 250 basis points. So when you look through that, obviously, those projects are continuing. I think we've made revenue really clear. At the cost side, if you look at Asia, clearly, Asia underperformed, and we've talked about that getting better. And Europe is a different beast next year. So in terms of revenue per cost base, we're carrying a cost base. So I think when you sit down and do a little bit of work, extrapolate it, I think you can support what we're saying.

Your next question comes from John Campbell with Jefferies. We'll just move to the next question, John O'Shea with Ord Minnett.

Just 2 things from me. Firstly, if you can give us an idea on the head count. I noticed the employee benefits went down about $5 million compared to the corresponding half. And secondly, the reduction in CapEx and your comment in the presentation or the announcement that the reduction has not compromised your technology output and customer service. And maybe if you can give us some further color on that as to how that's kind of possible when what you manage competitors are actually doing the opposite?

Thanks, John. I'll hand over to James for this one, for both ones on the people and the CapEx.

Thanks, John, for the questions. Look, in terms of the people costs, the impact of Atlas, which was the project focus on our back-office optimization and our finance administration standardization and optimization, that has resulted in a reduction in staff costs. And the -- we've previously referred to a $10 million annual benefit from Atlas. And that's where you see it coming through the P&L and the staff costs line. Moving to your second question on CapEx. Look, we've really focused -- we've delivered in the last few years some critical technology projects. Obviously, Sleep Space, the upgrades to Lightning, other upgrades we've had, which have delivered excellent returns and some of the growth metrics you're seeing are underpinned by that historic technology investment. The focus now really is on the going-forward projects and really applying a high level of discipline to how we look at the returns on those and not just in terms of the returns themselves, but also how can we manage our costs as efficiently as possible to make sure that we are optimizing our spend. So it's been those 2 factors, both the ROI and looking at the tech delivery model that have enabled us to make our CapEx more efficient.

Your next question is from John Campbell with Jefferies.

Sorry about those technical difficulties. Just in terms of the IT rollout of Sleep Space and other sort of proven tech into the Rest of the World. Can you just give us a sort of rough timetable when that is going to be effectively or when the Rest of the World will effectively be at the same -- on the same IT platform as Australia?