IDP Education Limited (IEL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the IDP Education Limited FY '23 Financial Results Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome to Tennealle O'Shannessy, Chief Executive Officer, to begin the conference. Tennealle, over to you.

Thanks, operator. Good morning. For those of you I haven't met, my name is Tennealle O'Shannessy. I started as IDP's CEO in February this year. It's an honor to be with you today to present the results the team has delivered for the financial year 2023. Joining me on today's call Murray Walton, our Chief Financial Officer; and Craig Mackey, our Director of Corporate Development. I'm pleased today as we present such strong results for the full year. This year, we helped more students and test takers than ever before as our customers realize their global ambitions for the study, career and migration. We delivered record performance on all key financial and operational metrics, reflecting IDP's industry leadership, our commitment to a strategy that builds on our competitive advantages and the depth of our experienced and talented global team. Along with our financial statements, this morning, we lodged with the ASX our investor presentation, which we'd like to take you through now. In doing so, we will review the highlights of our financial performance for the full year 2023. We will provide an update on the market opportunity and the positive macro settings that are underpinning through-the-cycle growth for IDP. We will summarize our strategic areas of focus and the key developments in those during the period. And at the end of the call, we will be very happy to take your questions. So let's get into it. I'll start on Slide 5 with a summary of the key operational and financial statistics for the year. The headline is that the business has had a strong year, delivering a record full year performance that reflects IDP's leadership position and innovation in a structurally growing industry. We delivered revenue at $982 million, up 24% on the prior period, with a 63% increase in student placement revenue is a highlight. Adjusted EBIT of $228 million, up 40% versus the prior period. Margin expansion, which has been a theme of recent results was a key driver of this outcome. Adjusted NPAT at $154 million, up a very strong 45%. We also announced a final dividend of $0.20 per share, taking full year declared dividends up to $0.41 per share, which is an increase of 52% versus FY '22. This reflects the unique characteristics of IDP, a growth company with a strong balance sheet that generates free cash flow. The key messages from today's results are that IDP has delivered record performance this year. The business has a track record of delivering strong earnings and generating strong free cash flow, supported by balance sheet flexibility to fund disciplined reinvestment, whilst delivering ongoing shareholder returns. It has a leading market position in large and structurally growing markets. Positive macro drivers continue to underpin long-term growth with ongoing demand for international study and migration and a highly supportive policy environment. Our diversified business model across both business line and geography, supports sustainable performance through-the-cycle, and we remain focused on executing a compelling strategy that is delivering results with an extensive runway for continued growth. I'll now hand over to Murray to take you through the detail of our financial results.

Thanks, Tennealle. I'm very pleased to be presenting the financial results for FY '23, which was a record result for the company. These results represent a continuation of the long track record of strong growth. As we've shown on Page 7 of the presentation, the FY '23 results take our 10-year CAGR for revenue to 16% and EBIT to 22% average annual growth over that 10-year period. We've delivered these results through disciplined and strategic investments across the business to establish long-term sustainable returns for shareholders. I'm going to move on to Slide 8 on the financial summary. Revenue for the year was $982 million, up 24% and is a record result for the group. English language testing revenue at $546 million was up 7%, primarily a result of the increase in average price, with volumes increasing by 1% above the PCP. student placement revenue at $351 million is up 63% with a strong rebound in Australian revenue underpinning the result, which was 86% higher than last year. Multi-destination revenue is up 49% as the U.K., Canada and the U.S.A. all delivered strong volume growth. Digital Marketing and events revenue was up 10% with clients investing in student events, but reducing their spend on digital marketing. English language teaching revenue was up 50% as volumes rebounded and teaching return to classroom-based learning. EBIT on an adjusted basis was $228 million, up 40% with a nice increase in margins reflecting the underlying operating leverage in the business. Net profit after tax adjusted was $154 million and was up 45%. I'll move on to Slide 9, the operational summary. These metrics are underpinning the record financial results. IELTS volumes for the year were 1,932,500, an increase of 1%, with a decline of 9% of India, offset by the strong growth of 18% for the rest of the world. The decline in India was due entirely to lower volumes for Canada. Canadian down volumes for the year were down 25 bps for FY '22 with test takers' volumes [indiscernible] to all other destinations growing. The softer testing for Canada reflects a consolidation after very strong growth in FY '22 of over 70% and reflects a period, which featured visa processing delays and elevated rejection rates that contributed to a decline in sentiment towards Canada. This was clearly a market issue and not related to competition. The 18% growth outside of India was widespread, but the highlights were strong performances from key growth markets like Vietnam, Pakistan and Nigeria, which all delivered growth above 40%. Student placement volume -- our growth accelerated to 53% with 84,600 APFs recorded for the year, with Australian volumes up 77% to 35,400. This was delivered by a rebound in volumes from India, which was up 129, China up 68% and Vietnam up 80% as the key growth countries. Multi-destination volumes were up 39% to 49,200 with the U.K. up by 44%, Canada up by 34% and the U.S.A. up by 33%. Again, India was a strong performer with volumes up 36% and the addition of the volumes from the Intake acquisition supplementing the growth for the U.K. If I move on to the average fee performance. The average test fee for IELTS increased by 6%, with the majority of that coming from price increases applied in many markets during the year. The average student placement application processing fee increased to $4,151 a 7% increase with both Australia and multi-destination average prices increasing from higher commission rates and higher tuition fees. I'm going to move to Slide 10 and talk to the student placement business model. The very strong performance from our student placement business reflects the nice diversification we have from over 30 source countries, 6 destination markets and more than 900 clients. This diversified business model has enabled us to deliver through-the-cycle growth at above market rates for many years. This slide highlights how we've been able to grow volumes at a 10-year CAGR of 15%, increased average placement fees by a compounded average of 6% per annum, which combined have delivered compound annual growth of 22% per year. This demonstrates that through-the-cycle growth that Tennealle will talk to in more detail later in the presentation. I'm going to move to Slide 11, and this slide highlights our rising margins. The business model exhibits natural underlying operating leverage, and this has been reflected in increasing margins over time despite the significant investments we've made in the business. Gross profit margins continue to increase this year as we extracted cost to candidate reductions in IELTS through driving efficiency with technology investments and things like on-screen marketing, video speaking and computer delivered testing. In student placement, the investment in technology and geographical expansion allows to scale the business from both a gross profit and bottom-line perspective. Our group EBIT margin for the year was 23.2%, 250 basis points higher than last year. We've been able to deliver rising margins despite ongoing investment in the business. This has been a feature of the company for many years and reflects our disciplined approach to investing for long-term sustainable growth, but doing so in a manner that ensures we can show near-term operating leverage. Now I'm going to move to Slide 12 and talk to the investments we've made in the business over the last 12 months. Our overseas growth in FY '23 reflects the investments made in the student placement business to continue to scale. With the acquisition of the Intake group and extension of the IDP student placement office network and counseling terms. The Intake acquisition added 25 student placement offices and IDP opened 21 new student placement offices and expanded to larger footprints, a further 16 student placement offices increasing our student placement capacity for FY '24. Headcount increased by approximately 1,500 with just over 1,000 of those engaged in the student placement business, including almost 300 from Intake. The increase in marketing spend was 35% as we invested in strategic IELTS marketing programs for Canada and India. Marketing spend overall, however, remained at less than 3% of revenue for the year. Moving on to Slide 13, the gross operating cash flow. Gross operating cash flow for the year was strong with $231 million, reflecting an 85% conversion from reported EBITDA. As expected, the second half cash flow conversion was strong at 140%. And combined with the $37 million of July student placement collections, which related to FY '23, the conversion to EBITDA would have been 99%. Our CapEx program for the year was focused on key strategic initiatives. The $39 million program delivered the FastLane innovations and the broader IDP Live functionality that Tennealle will talk to in more detail. The modernization of the IELTS platform, which was a precursor to the launch of IELTS Online and One Skill Retake, ongoing extension of our student placement office network and our computer-based shifting capability. I'll move on to Slide 14 on the balance sheet. IDP's balance sheet remains very strong with net debt of only $42 million and with cash on hand of $166 million. The movements in contract assets reflect the strong growth in student placement revenue, which is booked ahead of university invoicing and taken to the balance sheet. I'm going to hand back to Tennealle now.

Thanks, Murray. Moving on from the financials we'd now like to look ahead and take some time to highlight the significant market opportunity. On Slide 15, from a macro perspective, IDP is operating in a large growing industry with over 6 million international students enrolled globally and structural demand for international education and migration continues to benefit from long-dated global demand drivers. On the supply side, our source markets have large and growing youth populations and underdeveloped higher education systems. And on the demand side, we are seeing aging populations in destination markets, forcing governments to focus on attracting international students to their support education systems and to grow skilled workforce pools. These growth drivers have underpinned growth of 7% CAGR for over 20 years for IDP source markets. Here we can clearly observe the strong through-the-cycle structural growth that IDP is aligned to with our global network. Going deeper into the addressable market opportunities for each of our major business lines. Starting with the English language testing market. Slide 17 demonstrates the long-dated growth we have observed. This chart shows the growth for overall IELTS test volumes over the past 16 years, with the timeline of government recognition changes and the associated competition levels mapped out across the bottom. Now there is a bit going on in this chart, so I'd like to take a bit of time to talk through the key highlights. Firstly, the market is sizable with the annual IELTS test volumes now in excess of $4 million a year. Secondly, the IELTS test volumes show consistent through-the-cycle growth with a 16-year CAGR of 10%. Importantly, this growth has been delivered even as destination markets have evolved government recognition of tests and opened up to limited competition. You can see down the bottom of the chart, for example, that Australia opened up in FY '11, New Zealand in FY '16, the U.K. in FY '21 and most recently Canada in FY '24. Competition has been a feature of this market for an extended period of time. And over this period, the IELTS market has continued to grow. Moving finally to IDP's position within the market. You can see that today, IDP has around a 50% share of the IELTS market with a strong track record of taking share, growing at a CAGR of 13% over the same period. So the summary here is that IELTS is the leading test in a large global market exposed to the same positive macro growth drivers. The industry structure is attractive with a few global competitors and high barriers to entry. Turning now to the student placement side of the business. Slide 18 demonstrates the broad-based occurring across the global system and international mobility returns. This chart shows the aggregate student visa data for each of our major destination markets showing a large addressable market of 1.8 million new students annually. Importantly, growth is from all markets, with IDP's exposure to a large number of both source and destination markets, a key feature of our diversified business model. The call out here is that a large -- we have a large growing diversified market with a long runway of shared growth available given the fragmented nature of competition. Shifting gears on Slide 20. We've highlighted the market opportunity. I'll now spend some time outlining our strategic areas of focus and the key developments during the period. For the past 50 years, IDP has been committed to putting our customers first. At the heart of our approach lies the trusted human connection. Today, IDP is leading the transformation of our industry, leveraging our digital capabilities and our unique data assets to enhance this human connection. This enables us to offer more tailored recommendations to fast track the student application process and to deliver a high-quality experience for test-takers, all at an unmatched scale. But we continue to execute strongly on this strategy, and it is really pleasing as part of this set of results to demonstrate the progress here. Our highly trusted brands built to over decades through local human connections is now powered by our global scale and digital capabilities to deliver an experience that is life-changing for our customers. Looking now at the strategic pillars for each of our business lines. Starting with IELTS, as a reminder, IELTS is the world's most recognized, reliable and secure English language test for study and migration. It is a test that uses both human examiners and digital technology for the best customer experience. Our strategy is focused on 4 pillars. We're focused on building an unmatched physical and digital footprint and providing the widest choice of flexible test delivery options. IDP administered IELTS across more than 80 countries and 2,100 locations. We provided choices paper-based, computer-based and online formats of the test. In FY '23, we rolled out IELTS online, which is now available in more than 50 countries. In FY '23, we also continue to scale our IELTS by IDP app, delivering 815,000 downloads. Secondly, we continue to build the most credible trusted brands, now recognized by over 11,500 organizations and leveraging industry-best brand awareness, we are investing to build engagement and conversion through strategic brand campaigns. All of this is underpinned by a scalable and flexible technology platform. Together with our partners, British Council and Cambridge University, we are undertaking a complete modernization of the underlying technology infrastructure that supports test creation and delivery. This new platform will enable us to deliver significant enhancements to our customer experience and has already allowed us to launch new products, including IELTS and One Skill Retake. Supported by this flexible platform, we continue to focus on customer-centric product innovation. Our aim with IELTS is to be at the forefront of innovation, and we have a strong track record of delivering this. An example of this is IELTS One Skill Retake. This is a new product that allows the candidate to retake one of the 4 skills where improvement is needed in just one area. This changes the test-taker experience dramatically and represents a very strong proposition for candidates. As we're able to retake the component of the test without jeopardizing their scores in the other 3 skills. We launched One Skill Retake in FY '23, and it will continue to be introduced globally throughout FY '24. Moving to Slide 22. As I spoke about earlier in the presentation, structurally, the IELTS test market remains unchanged, with high barriers to entry and only a few global competitors. With governments changing their recognition requirements regularly over the past 16 years, limited competition has been a feature of this market for an extended period of time. And over this period, IELTS has consistently grown at a historical CAGR of 10%. Linked to the strategic pillars I outlined on the slide earlier. The 3 levers that underpin our competitive response includes firstly, leveraging our brand and marketing leadership. IELTS has the highest prompted and unprompted brand awareness, and we are investing to grow engagement and conversion through strategic brand campaigns, tactical marketing campaigns and community building activities. Second, IDP has an extensive established referral partner ecosystem that drives our adoption and distribution. Here we are focused on growing and amplifying this channel through refreshed loyalty programs, enhanced recognition and incentive programs and the introduction of value adds that improve our partners' business models. Examples of this include training, programs, access to test preparation materials and co-branding opportunities. And lastly, we continue to drive differentiated product innovation. As I mentioned, One Skill Retake delivered flexibility for test-takers. Our focus here remains on scaling the rollout of this product and securing government recognition. Importantly, in FY '23, government recognition was achieved in Australia. And I'm very happy to announce that the U.K. government has formally granted approval for OSR. The management team are highly experienced in leveraging the considerable strategic modes that have been built to enhance our leading position in competitive markets as well as continued disciplined investments to build new [ modes ] around product innovation. Moving to Slide 23. Our student placement strategy is focused on delivering differentiated customer experiences on an unmatched digital and physical scale. We're doing this by leveraging our unique customer insights and digital capabilities to create services that allow us to both delight our customers and to increase productivity. Our student placement strategy is focused on 4 pillars: first, building an unmatched physical and digital scale. As Murray touched on earlier, we continue to innovate and invest to enhance our global footprint. In FY '23, we added 46 new student placement offices and we also acquired Intake Education to accelerate our growth in a strategically important African region. Second, building unique data assets. We continue to build out the most comprehensive dataset related to international education globally. Our data lake today is large in its scale with more than 4 billion customer actions captured on the platform in FY '23. And as we are growing our new products, we are increasing the unique data assets associated with them. Today, we leverage data to power proprietary algorithms to drive real-time lead scoring and prioritization to improve conversion as well as next best action recommendations to enhance the productivity of our counselors. We also provide sophisticated course and content recommendations to enhance the experience for our students. Our comprehensive data set and data science capabilities ensures we're well placed to exploit emerging technologies as new use cases emerge aligned to solving our customers' most important problems. We also continue to focus on driving productivity and efficiency to ensure our counselors can spend as much time as possible speaking with our students. With ongoing investment in our centralized application processing hubs and lead prioritization driving conversion improvement, we were pleased to see a 24% increase in counselor productivity in FY '23. And finally, we are relentlessly focused on transforming the customer experience. Even with our growing scale and volume, our customers are increasingly pleased with our service. This is reflected in an increase of our student net promoter score, which was up 4 points in FY '23 and 13 points over the past 4 years. Moving now to Slide 24. I'd like to spend some time providing a little more detail on the innovation that is transforming the customer experience in student placement. An example of this innovation is the digital functionality we have incorporated within our app IDP Life. A major focus here has been a scale in the FastLane. FastLane harnesses IDP's global data set and client relationships to enable students to receive real-time in principle losses from leading institutions. We've been very pleased with the adoption by our customers with 860,000 app downloads this year alone and 17,500 students receiving formal offers after using FastLane in FY '23. This was up from 3,000 in FY '22. We've made 4,200 courses available as of year-end, up from 1,200 at the same time last year. With these new products, we're also building our unique data assets. To date, we've created 50,000 FastLane student profiles and 56,000 structured client admission rules. These can be used to power solving key customer pain points. And most importantly, FastLane is delivering 6% higher conversion and a better experience with an 11-point increase NPS above our traditional channels and is delivering all of this at scale. And we're just getting started here with a future pipeline of functionality plans as we build out the student placement ecosystem. An example of this is our acquisition of the Ambassador program, a technology platform that aligns with our strategic vision to build out digital peer community. This acquisition is just one of many ways we are investing in new technologies and digital innovation to deliver beyond expectations to help students achieve global success. It's also another point of difference in our proposition that we can offer our student customers and our university clients. I'd now like to move on to the summary slide, Slide 26. And to wrap up, I'd like to call out the business has delivered record results this financial year with revenue up 24% and adjusted EBITDA up 40%. These results reflect IDP's industry leadership, our commitment to a strategy that builds on our competitive advantages and the depth of our experienced and talented global team. The business has had a track record of delivering operating leverage that supports ongoing margin expansion, generating strong free cash flows and supported by significant balance sheet flexibility to fund disciplined reinvestment or providing ongoing shareholder returns. It has a leading market position in large and structurally growing markets with ongoing demand for international student and migration and a supported policy environment. Our diversified business model across both business line and geography support sustainable performance through-the-cycle. IDP remains focused on executing a compelling strategy that is creating a unique combination of digital and physical services for our customers through ongoing innovation and disciplined investments. Finally, I'd like to acknowledge our Chief Financial Officer, Murray Walton, who acted as Interim CEO during the period. IDP's global leadership team and its broader global staff. IDP is an exceptional business driven by extraordinary people. It is a privilege to be part of an organization that fundamentally changes the lives of its customers through access to global education and careers. I'd like to thank you all for your time today. Murray, Craig and I will now take questions. I'll turn you back to the operator.

[Operator Instructions] And your first question comes from the line of Chris Gawler from Goldman Sachs.

So first question for me, just on the IELTS business. I appreciate the commentary you provided on volumes in India and outside of India. You called out India to Canada as being a bit of an issue in FY '23. Is that now starting to resolve itself, which you could see India return to growth this financial year?

Yes. So as we called out, the sort of entering growth we saw in India was driven primarily by the lower testing volumes. -- was due entirely to lower volumes for Canada. And so what we said there was within India, moving to all its other destinations were up. And just to provide a little bit more color on the driver there. The softer testing for Canada reflects both consolidation after a very strong growth in FY '22, where we were up over 70%. But also reflects a period where what we saw in Canada was processing delays and elevated rejection rates that contributed to a decline in sentiment towards Canada. This was clearly a market issue and not related to competition. What we can say is over the last couple of months, we have seen an improvement in visa processing times, but it's not yet flowed through to a material pickup in testing volumes in Canada.

And then on the student placement business, strong results there this financial year. Can you talk a little bit about the lead indicators that you're seeing that could support continued growth in that business this year?

Yes, absolutely. So we included a slide in the appendix of our presentation, which shows that continued strong pipeline build. I think the key point to note here, however, when we look at that pipeline is through the various strategic initiatives that we are focused on, including our lead prioritization, lead conversion. We are seeing very good improvements in conversion rates to the various stages of the funnel. And the key to these improvements that we're seeing has been the increasing use of AI. So I touched on in the call, there are several proprietary lead, propensity algorithms that we're using. What we do is they score our leads in real time and allow us to drive significantly greater conversion, so give a bit of color there. So 30% of scores leaves under this model, we have seen that these leads are 5 times more likely to apply. So the summary is strong pipeline filling us with confidence but the various strategic initiatives we're focused on are also looking at how we drive conversion improvements through the pipeline.

Your next question comes from the line of Tim Plumbe from UBS.

Just wanted to ask a question about FastLane, 4,200 courses, looks like you've had a pretty decent uplift in the second half in terms of courses added to the platform. How do we think about that as a percentage of courses now on the platform? And maybe how do we think about the pathway to start leveraging that platform in the second half '24 or FY '25?

Yes, great question, Tim. So for FY '23, we achieved our goal you touched on having almost 50% of our courses for which students applied for from Tier 1 countries. And I think just to provide a bit more color there, we're a little behind the curve after half 1. So really pleased to see that uplifting momentum in the second half. This equates to having around 93 clients on the platform. In terms of what that means for where we're landing and the scale that we're seeing, the 17,500 final offers by FastLane for us today represents about 12% of our total offers for FY '23. And conversion results, as I touched on earlier in the call, are very encouraging as FastLane students converting at 6.3% higher rate. So looking forward, how we think about that in future years, we've spoken about FastLane as being a multiyear strategic program. And so we will continue to focus on that inventory build across Australia, U.K. and Canada for both postgraduate and undergraduate. What that means for FY '24 is we're targeting around 25,000 to 30,000 full offers via FastLane and we'll also be focused on adding additional functionality, which will, I guess, enhance the value that is available for both students and clients. So types of innovation that we're looking at in FY '24 include exploring the opportunity to give clients the functionality to proactively extend offers to students who match their admission rules. Now this will be done in a very student-first, student centric way with the students controlling that process. And then over time, we will also look to functionality, including making available things like attaching scholarship offers to those proactive reach-outs from universities. But we believe this type of functionality will be very appealing to those highly ranked top brands, who will value the ability to be able to target students to drive strategic diversity and efficiency. So I think you can probably hear from the tone in my voice, we're incredibly excited for the potential for FastLane, both as a differentiated proposition that we can offer to students and to clients, but also as we touched on, the ability for us to collect and build unique data assets that help power drive -- that power further innovation in the student placement.

Great. And then the second question is just on some of the improvements that you made throughout FY '23, 24% improvement in productivity in council of productivity, 60% of the applications via centralized processing hub. How do we think about that rolling into FY '24? I'm not sure if that's a question for you or more for Murray, but how do we think about that flowing through to potentially improved margins across the student placement business, please?

Yes, certainly. So I'll talk a little bit about some of the initiatives that underpin the results and then I'll hand over to Murray for the view looking forward. And so we were incredibly pleased with the results as we touched on a 24% increase in council of productivity, which delivered above expectations. And the driver there really was expanding out the use of our centralized application processing hubs as well as the ongoing work we've spoken around, which includes the use of AI and lead propensity modeling to really drive conversion through the funnel. And so really pleased to see those initiatives in place, and we'll continue to focus on that and scale as we move into Slide 24. Murray, I'll hand over to you to shed a bit of color on margin.

The student placement EBIT margins, we do expect that we will continue to see strong growth in the student placement business. Obviously, overall margins, EBIT margin will see a little bit of increase with the IELTS business just softening a little bit with some of our additional costs and the direct cost line. But overall, we should see some margin expansion.

Your next question comes from the line of Piers Flanagan from Barrenjoey.

Can I just ask on IELTS of world growth at 18% in a strong growth in the second half. Can you talk to the drivers behind that and expectations into FY '24?

Yes, certainly. So again, just what we spoke about is we were really pleased with the strength of the IELTS portfolio more broadly in FY '23. And we touched on an 18% growth outside of year. I think it's fair to say that the growth was widespread outside of India. But to call out a couple of key highlights there. It was really the strong performance in its key growth markets that we have called out historically. And frankly, where we've been investing over multiple years to build out our student placement network. And so that is markets like Vietnam, Pakistan and Nigeria, which all delivered growth above 40%. And so I think the key message here is that we have been speaking about through consecutive results is the disciplined investment in building out our student placement network that we've been undertaking for multiple years, provides the foundation not only for growth in the current year, but in forward-looking years. So the growth that you're seeing here reflects the investments we've made on prior periods.

Great. And then just on One Skill Retake. Can you talk to the current feedback from test-takers in the U.K. and Australia? And also, is there any update on the potential to Canada to approve One Skill Retake?

Yes, certainly. So we have been undertaking tests across the network in a limited capacity, including in India since May. We have had great feedback so far. So great feedback in terms of, I guess, not only the product itself, but the opportunity is presented to students to, as we've touched on, maximize their score opportunity by resetting one component without jeopardizing the scoring in their other 3. So I think it's fair to say that volumes are still small, but we expect to be the volumes to ramp up as recognition bills. We've been really pleased to have secured recognition from both the Australia, and as I announced in the call today, the U.K. government, and that client recognition is progressing strongly. That's something that we're focused on. In relation to Canada, we're currently in discussions with IRCC but we don't have a definitive time line for recognition with OSR, but that clearly remains a priority for us.

Your next question comes from the line of Darren Leung from Macquarie.

Congratulations on the results. Just 2 as well for me, please. Maybe the first one on the IELTS volumes piece, extension of this question earlier, but keen to understand how you're thinking about growth in the next sort of 1 to 3 years, particularly given the growth profile seen in one of your major competitors, please?

Yes, certainly. So I mean, look, what can I say about -- let's start with FY '24. The recognition changes for the Canada market only came into effect on the 10th of August. So it's too early to provide any meaningful comment on the impact of these changes. So what I can say for FY '24 is and hopefully you've heard this through the call, we remain confident that we're well placed to compete in the testing market for Canada. We have the fundamentals in place and believe that we will continue to be the leading test for the market. And I think that comes against the context and 2 important things to call out. Firstly, is in the Canada situation, highlighting that what has been delivered is quite appropriate score equivalency, relative score equivalencies between our test and competitors. And what we have celebrate, which is a very strong distribution footprint and the widest range of test taking flexibility for our test-takers. In FY '24, we will continue to focus on those levers around the competitive response, which is continuing to leverage what is a ubiquitous, very strong leading brand and brand awareness through investing in both strategic and tactical marketing campaigns with some new brand marketing messages that we can take around the equivalences coming in at the overall fix for IELTS, which is resonating strongly with our test-takers. We'll continue to focus on building that engaged community and partner network through our referral partner network. Now our referral partner network continues to perform strongly, and this is something that's very embedded and ingrained. These are test preparation businesses that have built entire ecosystems and businesses around supporting the IELTS test. We'll continue to enhance and amplify the value of those networks. And then lastly, and we've talked through this quite a bit on the call, we're very excited by the opportunities presented through the product differentiation that will come through to One Skill Retake. So that's how we're thinking about FY '24. I guess if we look further ahead in terms of future growth, what we would say there is that the long-dated structural growth drivers for the English language testing remain in place, and the industry has strong barriers to entry. And so we continue to believe that over that 3 to 5 years, IELTS should continue to deliver that single high-digit volume growth in the medium to long term. As I've touched on, FY '24 will be more subdued as we navigate these one-off changes associated with the Canada market, but we remain very confident in our ability to respond to those changes reflected in the fact we've been operating in competitive markets for many years.

Got it. And in order to achieve that high single-digit growth, do you think the real level of pricing competition either from you guys or from the market level?