Infomedia Ltd (BGLOBAL.BO) Earnings Call Transcript & Summary

Hello, everyone, and thank you for joining the Infomedia Full Year Results Briefing. We will begin with a presentation by the Infomedia management team, followed by Q&A. [Operator Instructions]. Now over to the CEO of Infomedia, Jens Monsees. Jens, over to you.

Thank you, Kiara. Good morning, everyone. This is a very nice beautiful spring morning. Welcome to Infomedia's Results Webcast for FY '24. I'm Jens Monsees, the CEO and Managing Director of Infomedia. Firstly, I would like to acknowledge the traditional owners of the land on which we meet today, the Gadigal people on the Eora Nation. We pay our respects to the elders, past and present, and extend this acknowledgment and respect to the first people in all countries in which we operate. Joining me on the call is my fellow colleague, Chantell Revie, our CFO. She will take you through the detailed financials today. You can follow along on the slides for the presentation, which was released earlier on the ASX. I will refer to the slide numbers as we move through the deck. Please note the legal disclaimer on Slide #3. On the agenda for today on Slide #4, I will share the highlights and the business update before handing over to Chantell. For those who are not familiar with our company, the glossary provides definitions of the terms used in the presentation and the appendix contains further details on our company. We welcome your questions after the presentation. Before I move on to our results highlights, I would like to thank our global team for a very successful and diligent execution of our transformation strategy. Having generated operating leverage in our change phase in FY '23, we set a 2-year goal of building muscle memory and our strengthening phase. And the team did exactly that in FY '24. We remain laser focused and are confident that we will continue with our momentum in FY '25 and drive profitable growth. To take a part from one of my favorite TV series, BA Team, I love it when a plan comes together. We have the right strategy, the right team in place, and we are pleased with the results we achieved for this year. So, let's dive into Slide #6. Our long-term transformation strategy -- our long-term transformation strategy is to drive profitable growth measured in annual recurring revenue, ARR, with a moderate and controlled increase in our annual recurring cost, ARC. Over this year, we have again consistently delivered positive results. We have achieved profitable growth across all products and regions. Total revenue was up 8% with 99% of it recurring. Our exit ARR in constant currency was up 9%. Underlying cash EBITDA increased by 17%. Year-on-year, we delivered on a percentage point improvement on underlying cash EBITDA margin. Our net profit after tax was up 32%, now $13 million. We have a strong balance sheet position with no debt and 70 million cash on hand -- and our dividend is up 5% for the full year. We declared a $0.02 per share dividend in the second half of FY '24, fully franked. In summary, the company is in a very good shape, and the strategy is delivering excellent results. Let's move to Slide #7. We stated we will further enhance our scalable ecosystem and grow our global footprint. Infomedia is focused on the 3 core areas: revenue growth, operational excellence and global expansion. First, let's touch on the revenue growth. We accelerated growth in our mature products with super service up 14%. This demonstrates the continued strength of our sales pipeline and demand for our mission-critical solutions. Another proof of strength for our mission-critical solutions is the successful renewal of a number of major contracts. This includes significant price increases, which will kick in for the second half of FY '25. These successes are moderated by a customer churn. We are expecting in SimplePart in the e-commerce business, which will have a small impact on the first half FY '25. We will further drive our premium price strategy and hold firm on our ability to generate profitable returns on our superior products. As outlined at the half, we are starting to establish a new solution group with analytics. This will be a driver of further double-digit growth and product diversification for Infomedia. To touch on how we are strengthening our operational excellence, we have streamlined our systems and processes over the year, including working to enable a future joint data lending to reduce data handling and further improve efficiencies. Importantly, we strengthened our cybersecurity measures. This includes cyber detection and penetration testing, and we received the ISO 2007 and 1 certificate. In 2 years, we have established a global diverse and dedicated executive leadership team with 5 internal promotions and 2 new appointments. In EMEA, we are working on appointing a new head of region in Continental Europe. I'm very pleased with the progress we have made towards an accountable and data-driven collaborative team, and I could not have done it without the leaders we have now in place. To quote and report, "Coming together is the beginning, staying together as progress and working together a success." Finally, on global expansion. Last half, we outlined our progress on increasing our footprint across various regions. We have achieved a 5% increase in DMS integration globally. We have grown our revenue and product offerings in Canada and Mexico and secured new business partnerships, both in Malaysia and Japan. We have rolled out Infodrive globally, servicing new customers across the globe. We have doubled our Chinese OEM brand partners with the inclusion of LDV and -- great Wall Motors, Haval in addition to Sheri and MG. We have also successfully expanded our offerings into light commercial vehicles, a new category where we have signed deals with ISUZU and Hino. Our order books are full. We are now keeping our heads down and focusing on delivering the first half of FY '25. With the current momentum, we expect the new revenue to land in Q3 and Q4 FY '25. On Slide 8, I will expand further on our achievements over the year. As you know, our strategy is focused on the 4 Ps: people, product, performance and processes. This slide highlights what we have completed over the year. I won't go through each of the items, but I will call out a few. On product and innovation, we have upgraded Microcat with innovative features, and we have invested in Superservice Connect to provide a more scalable product across all regions. We are building a payment feature in Superservice to enable a smooth end-to-end customer experience in the service line from booking to pick up. For the second people, I already touched on the ELT, but I wanted to make a note of our improvement and our global employee engagement survey, which is a testament of the positive performance culture we are building. We have further improved our diversity and increased our female representation and received a certification as family-friendly workplace. On the third P, process, we have improved our speed of backlog implementation, and we have established our Biz-Dev-Ops operating model, improving the quality of our product releases. Finally, on performance, we have standardized our contracting, which takes into account our return product releases, enhanced our ecosystem and accelerated DMS integration. On Slide 9, we have listed our global Tom in a fragmented market of single-point solution providers, Infomedia have successfully built an integrated global ecosystem with significant market potential. The serviceable market offers a lot of white space for our solutions to further enhance our footprint across various automotive markets. For Microcat and Superservice, we see large opportunity to be addressed in each market. We have a strong position in APAC, especially in Australia with both products, and this region offers huge growth potentially in and outside Australia. On Infodrive, we are able to conquer significant proportion of the customer experience market, the data market and the connected car market. And for e-commerce, we are in the early stages of rolling out this product out beyond the U.S. market where it was developed. Global expansion will stay top of the priorities -- top of the priority list to continue our growth journey. With our 3 strong beachheads in all major regions and the balanced revenue split, we are well positioned to capture these opportunities. I will now hand over to Chantell to take you through the detailed financial results for FY '24. Chantell, over to you.

Thank you, Jens, and good morning, everyone. I'm delighted to share with you our outstanding performance in the past year. We have achieved good results in terms of revenue, profit, staff engagement and customer satisfaction while continuing to invest in research and development. Turning to Slide 11. Here, you can see the actual results in annual recurring revenue and annual recurring costs in constant currency from FY '22 through to FY '24. The change phase of our strategy began at the start of FY '23, where the focus was to improve the profitability of the company. During this phase, you can see the gap between the 2 lines grew, showing an increase in profit margin and positive operating leverage. In FY '24, the ARR line continues to steepen as a result of the growth in revenue. And the ART line remains parallel to it showing that we have maintained our profit margins. In line with our strategy, we're using annual recurring revenue and annual recurring costs as key metrics to inform business decisions that improve long-term business performance. Moving now to Slide 12. This is a snapshot of Note 1 of the annual report, the operating segment note. In FY '24, we delivered recurring revenue growth of 9% from FY '23 and total revenue growth of 8%, illustrating that the focus remains on recurring revenue. During the year, 3 major contracts were renewed, securing another 3 to 5 years of revenue. Moving to costs. We contained the cost growth to 6% as a result of the efficiencies from the workflow management system we upgraded. The synergies realized while integrating SimplePart and the program of work process, we implemented, which drives better resource allocation to those workflows that bring the most value to the business. An 8% increase in revenue created with only a 6% increase in costs, resulted in an additional percentage point on our underlying cash EBITDA margin to 23%, and the growth in the underlying cash EBITDA of 17% from FY '23. Let's turn to Slide 13. This highlights the strong uplift we achieved in all of our profit measures. Underlying cash EBITDA is up 17%. Underlying EBITDA is up 9%. Net profit after tax adjusted is up 26%. Reported NPAT is up 32% and EPS is up 33%. Net profit after tax adjusted or NPATA is a new measure we introduced during the year. It is calculated by taking the reported NPAT and adjusting it for acquisition expenses, purchase price accounting impacts such as the amortization of acquired intangible assets and earnouts. It provides a true reflection of the company's performance before the impact of any M&A. As a result, the company no longer discloses underlying impact, which excluded all accounting adjustments such as ASP 16 and share-based payment expenses, but included the acquired intangible asset impact. However, we have provided a reconciliation of what underlying NPAT would have been for FY '24 versus FY '23 in the appendix of the slide deck, and this shows the underlying NPAT increased 35% on FY '23. Looking at the capitalization of development costs. This declined slightly from FY '23 to 14% of revenue, in line with the guidance given at the half year. Amortization remained relatively flat on FY '23 and is higher than capitalized development costs in FY '24. This has negatively impacted NPATA by $6 million for the year. There was a decline in the share-based payments expense or LTR costs for the year as a result of the release of the FY '22 LTI performance rights, which did not best. Business restructuring costs are made up of the costs incurred to set up the offshoring pilots and other redundancies during the year, the ELT structure. Acquisition costs of $324,000 in FY '24 or for M&A due to lytic to the fees undertaken during the year. Finally, EPS increased from $0.255 per share to $0.038 per share, an increase of 33%. Moving now to Slide 14. This highlights Infomedia's revenue diversity and strong revenue contribution from each region across the globe. Revenue and profit are split approximately 1/3 between each of our 3 regions. This diversity is a key strength of the business, showing intermediates global reach and reduced regional concentration risks. In FY '24, the strongest growth was seen in APAC with a 14% increase in revenue and underlying cash EBITDA on FY '23. The largest product contributing to the growth was super service, the accelerated delivery driving the earlier revenue recognition. In EMEA, revenue grew 9% in Australian dollars and 3% in local currency from FY '23. Underlying cash EBITDA grew 8% in Australian dollars and 2% in local currency. In America, revenues grew 3% in Australian dollars and 1% in local currency and underlying cash EBITDA grew 6% in Australian dollars and 3% in local currency. The majority of SimplePart integration synergies being seen in this region. Turning to Slide 15. Infomedia has a robust balance sheet with $70 million in cash and 0 debt, which provides flexibility for continued growth. We continue to prudently allocate capital between organic investment, strategic growth opportunities, including M&A and to ensure sustainable returns to shareholders. Looking at current liability. The employee benefits liability grew by $3.3 million during the year as a result of the final earn-out accrual, the acquisition of SimplePart. This is expected to be paid in September. Now turning to Slide 16. This slide shows the cash movement for the year. Underlying free cash flow of $27.2 million declined by $1.7 million on FY '23. This was impacted by an increase in the tax paid of $3.5 million during the year. In FY '23, the company received a tax refund, which reduced the overall tax payment in that year. Free cash flow was impacted by one-off cash outflows for business restructuring and system upgrade costs of $2.9 million. Free cash flow increased by 31% from FY '23, resulting in a cash balance growing to $70 million. I'll now hand back to Jens. Thank you.

Thank you, Chantell. It's an impressive set of results. Even the finance team have done a fantastic job in supporting the profitable growth of our business. On Slide 18, I will now touch on some key automotive industry trends and macroeconomic developments that are positively impacting Infomedia's results in the long-term. We anticipated the change of the years within the industry, and it's working well in our paper or OEMs as revenue and margins come under continued pressure with lower new vehicle sales and aging customer vehicles. They have now an attention to their core operations and turning back to just the moving metal and not building IT. This is creating further demand for our products that improve efficiency, increase productivity and deliver improvements in the service lane to optimize operations at the dealership level. We continue to observe a slowdown in the sale of EV vehicles and increasing complexity in the powertrain mix, coupled with the rise of the Chinese EV OEMs, we are seeing overcapacity, rebates and pressure on the OEMs bottom line. This is driving demand for our solutions that are fit-for-purpose and addressing the customers' needs. Scalable offerings from Infomedia are going to win over a customized in our solution, especially when we consider the ongoing investment maintenance and technical know-how required to keep the announced products up to date. The focus for dealerships is changing from new car sales to aftersales, particularly in the agency model, increasing the importance of aftersales services to retain older vehicle customers in their value chain. Staff shortage and the demand for high-paid technicians at the leaderships are further driving the need for our products that are delivering increased productivity for the dealerships. Lastly, we are seeing increased demand from car owners for digital-first communication. Infodrive solutions are in high demand to enable data-driven marketing, marketing as a service and leveraging connected car data for seamless customer experience at the dealership. Our innovative and integrated solutions are winning, and we are well placed to see ongoing demand for our products from these trends over the coming years. In this next section, we will share our strategic priorities and outlook for FY '25. Let's move to Slide #20 to recap where we are on our transformation journey. As Chantell mentioned, we successfully completed the change rates in FY '23 and generated operating leverage. In FY '24, we started the strengthen phase and with the good progress we have made we are now looking at a much stronger and more scalable business. And there is still further work to be done in FY '25 to continue the strengthening of the business. In many ways, we can compare Infomedia's journey since 2022 to being an athlete that builds muscle memory. As we move through our first phase, we put ourselves on a diet and went through a bootcamp with a very disciplined approach, driving results, and they came quickly. In FY '24, we practiced our new ways of working and are building muscle memory by accelerating growth at the top line. We benefit from our consistent training and strengthening of our team. In FY '25, we are better in shape and now we are preparing for the scale phase. That means during the second part of the strength in phase, we will train hard to invest in our energy and scaling our tech stack, rolling out a new go-to-market approach in EMEA and Americas and doubling down on our global market presence and at the same time, maintaining our margins. On Slide 21, you see our strong improvement of Infomedia's organic revenue growth that is seen here in the bar chart, moving from 6.7% in the first 3 years to now 8.3% since 2022. The line graph shows the growth in the underlying cash EBITDA. Since 2022, we have accelerated our profitability with 15% CAGR. We have delivered strong and profitable annual growth on both revenue and cash EBITDA in the last 3 years, and we will continue to do so. On Slide 22, you can see the movement over the time towards a globally and diversified portfolio. These achievements can be seen in 3 dimensions: customers, products and regions. Our revenue by customer is distributed with over 62% sitting outside the top 20 customers. In our product portfolio, we developed from a single solution to a strong and integrated ecosystem. We have increased our product mix and expanded our global footprint. Our truly global revenue streams and high profitability is position us well for the future and for success. On Slide 23, I have listed our main focus areas for the next 12 months. For people, we are focused on strengthening our global talent suite with a hub-and-spoke model in the regions. As mentioned, we are working on strengthening the EMEA team, which will include appointing a new head of region. And we continue to bolster our data software and AI development capabilities while maintaining strong margins. For processes, we will continue to upgrade and strengthen our enterprise systems, integrate our joint data lending for Civil Porter Microcat and strengthening our cybersecurity to protect our valuable data assets. For products, we are investing in Infodrive to prepare for global scalability. We are expanding our existing products into new markets and segments, and we are focused on monetizing of our analytics, data and AI projects. On performance, we will focus on increasing sales productivity in EMEA and Americas. We will accelerate our global expansion, and we will complete our global rollout of our customer success team. We have achieved a lot in FY '24 and will continue to deliver shareholder value in FY '25. The next part of the strengthened phase is clearly defined. On our outlook, we expect our total revenue for financial year 2025 to be between EUR 140 million and EUR 154 million. The Board has also declared a dividend of EUR 0.02 per share, which is fully franked. We expect margins to be stable and have provided the above guidance subject to unchanged macroeconomic environment. Turning to Slide 24. I want to reiterate, based on the strong results in FY '24, how Infomedia is consistently creating value for our shareholders. We are leveraging our leading global market position. We are delivering on our strong track record of profitable growth and driving recurring revenue. We are deepening our global partnerships with our customers across the ecosystem based on our scalable solutions, and we have established a dynamic leadership team with exceptional domain knowledge across the globe. I want to thank the entire Infomedia team. Together, we can be proud of what we have achieved and be confident that we have the right focus for the future. I want to thank our shareholders and the Board for the trust and the continued support. Finally, I would like to express my appreciation to our valued customers for their continued trust and business. I'm looking forward to an exciting journey ahead. Thank you. I now hand back to Kiara to open the line for any questions. Thanks a lot. Back to you, Kiara.

Thank you, Jens. We will now begin the Q&A session. [Operator Instructions]. Our first question comes from Tim Plumbe. Tim asks, can you talk to geographic expansion opportunities? Do you drive further into Latin America in FY '25? And can you talk to the opportunities in China, please?

Yes. So, let's focus, Tim, on LatAm first. So, we have a very good momentum in Mexico, and then we will go further down in Latin America because there's also a big country called Brazil and also Peru. We have done our work for the DMS integrations or Infodrive with 17 new integrations for the Mexican DMS, and we are quite confident that we will win further business there. For me, Mexico is an interesting place because the Chinese, and this is a bridge to your second part of the question, the Chinese OEMs are seeing Mexico as a hub to enter North America. So, to avoid some very heavy import tax, they are starting to build plants into Mexico, and they obviously are rolling out their current brands into Mexico, and they are looking for a very strong solution provider, which we are as Infomedia, and therefore, there are further partnerships on the horizon. For China itself, it's the biggest auto market in the world, obviously. But the operations in Mainland China seems to be quite difficult. And also, we have to be careful that we can protect our IP, our data and our value assets because when you are operating in China, you are not always 100% sure that you can protect your software and the data the way you would like to do it in other regions. Therefore, our strategy is very simple and actually quite successful. We are meeting the Chinese brands that have, as I said earlier, overcapacities. And they need to export. We are meeting them in Mexico, in India, in South Asia, in Australia and demonstrating the strong use and productivity of our products. And then we are pulled into China. That is currently the way that we see the China business further growing. We also need to be careful because not every one of the 95 OEMs that we see currently in China will survive the consolidation process.

Thank you. We have a follow-up from Tim who asked, can you talk to your sales pipeline, what you're seeing in terms of conversations and time to revenue generation? Any major larger than usual EPC contracts up for renewal in FY '25, either within your portfolio or competitors?

Yes. We are very pleased. Currently, we have renewed quite major contracts with a very strong price increase. We have to deliver the innovative features now and also some of our clients who are asking not for a weekly update of all the catalogs and data but daily. That's what we are currently building. So, I would see or suggest that we get the upside of the increased revenues in the second half of FY '25 when we have done our work.

Thank you. And one more from Tim, who is asking, thinking about the moving parts. Can you give us a sense for that headwind in rev terms from the customer loss? And what sort of percentage price increases are you getting in this straightaway or over 3 years. Typical revenue skew is 49% to 51%. How much do this factor in the change for the usual SKU, please?

Yes. So, the major contracts that we were renewing for another 3 to 5 years have an increased spend between 5% and 17%. Obviously, there's not one number. We have to adapt to some requests from our partners. And as I described, we are currently building towards these requirements to be then on top of the game, and again, being scalable. I see a very strong partnership. I also see that there might be other OEMs from China, understanding more and more how much more value we deliver, especially in a very complex environment. We have the hybrids in the market. We have the ICE engines in the market, and we obviously have the EVs in the market. That makes our catalogs bigger and richer and more complex. And therefore, we can also ask for a superior price compared to any other solution.

Our next question comes from Robert Bruce. Can you please elaborate on the customer churn event in the first half FY '25, please? What were the reasons for churn price and/or functionality?

Yes, Robert. Thank you. So, we are not yet 100% sure. We said we expect a churn that is at least 3 months out. There is a contract renewal in our e-commerce business, which is sitting in Americas. And the current negotiations are very much towards price. We believe in the superior strength of our e-commerce solutions. If there is one competitor that is loss-making and trying to undercut because some desperate people want to sell their business, then it is not the right strategy to follow them down to the ground. So, we are also prepared to walk away if the price is too low. As I said, it's a careful holding pattern. We have not lost the business. We will see if the competitors able to deliver and when. But for the moment, we stay at our premium price strategy.

Our next question comes from Olivier who asks, can you please comment on how you are balancing customer retention and achieving required returns, particularly in SimplePart? And we have a follow-up question on SimplePart from Sinclair Cario asks what is the process to secure our new business for SimplePart? And what does this imply for the timing of global expansion?

Yes. Many questions, where do I start? So, we are currently developing against a signed backlog of new contracts in the U.S., in Mexico as well as in Canada and also one in Europe. This work is ongoing. We believe that we will be finishing the implementation at the end of the first half. So, there are new contracts coming in. The data is sitting partly already in Microcat, so not that heavy lifting. The competitiveness of our e-commerce solution is, I think, without any doubt, because every year, we are growing our GMV, and we have more traffic on our platform. The expected churn that I was talking about is towards an undercut in price or somebody who is quite desperate to win business and to sell them the business. I don't want to rehear any names, but I think it is obviously the right thing to do that we don't raise the price to the bottom.

Thank you. Can we have a follow-up from Olivier. You asked when do you expect Superservice payment functionality as being in market materials, material. How do you see material for this driving growth in this underpenetrated market, i.e., U.S. Superservice?

Yes. Superservice is -- especially in Americas, demanded as an end-to-end solution. That means the payment part of the payment feature is absolutely necessary to have an end-to-end solution. Actually, we are working also on a chat function because we see that more and more digital natives would like to interact with the dealerships on digital terms, which are driving our demand in the dealership, we are done from my perspective with the blueprint of the payment solution. And now it is just implementation with and for our clients to get this working. But you can see already prototypes in some of the U.S. dealerships. It is very important that we have an end-to-end solution in the U.S. And therefore, we are implementing the payment solution at the moment. But not only for the U.S., that's important, but also for other markets, we can have a competitive edge. And therefore, it's a global scalable feature that we integrate in Superservice. And as I said, we are very pleased with the current development. Superservice is up 12% versus last year. So, it seems we are on the right track. What was the other question?

The other question...

On Superservice? Or was that it?

That was it. That was it on Superservice. So, we do have another question from Olivier who asks, when do you expect new EMEA leadership to accelerate the top line there? Are you already down to a preferred candidate?

Yes. We are very close. Obviously, I wish I could already announce something, but that is down to now some noncompete clause, and so final negotiations. We have seen very strong candidates. We are not fixed on one, but I think in the next 4, 6 weeks, we are able to appoint somebody, and then this person will probably be invited very soon into beautiful Sydney to have a boot camp and an onboarding procedure, and then every good candidate has a notice period. And therefore, we would be, I think, very confident of getting somebody in before the first half is ending. That means in December somewhere.

Our next question comes from Tim who asks, can you talk to us DMS integration? How meaningful is this towards accelerating growth? Did this generation incremental sales -- did this generate incremental sales in the second half of 2024 or is this an FY 2025 story?

Yes. The DMS integration, Tim, is not in FY '24 or FY '25 story. It's an ongoing rollout for our ecosystem. We need bidirectional integrations into the DMS in various fields in Australia. We have done a few more. In Europe, we have done a lot more, in the U.S. and in Mexico. We have done much more. But you also need to then consider what product lines because we need integrations, not only for Infodrive, but also for Superservice. So, we are very pleased. When we came here, we could do 1 or 2 BMS integration per year. Now if you put a 0 behind the 1 or 2, then you may be at half of what we have achieved this year.

[Operator Instructions]. Our next question comes from Tim who asks, my question was around North America. The major DMS providers. Are there any more on the cards for FY '25, please?

Yes. Currently, we have a coverage roughly around the 50% mark. We are in deep discussions with some other big providers. And yes, it's a question under what commercial agreement, we are coming to terms. But I don't want to put any pressure on the current ongoing negotiations. So, it will be rather sooner than later on.

Thank you. I'll just take a brief pause to see if there are any additional questions from our attendees. Just as another reminder, if you would like to ask a question, please submit any questions through the Q&A box. We do have an e-mail from Wei Sim, who asked if you could talk to your confidence in completing the strengthen phase and how that can set informed up of the scale phase, please?

Yes. We are very confident. I mean, when we started Shanda, we were discussing the support if we put out such a long and very ambitious strategy to the market, because normally, Infomedia is just informing the market once a year. But we are ahead of our strategy. Also, this year, FY '24. In terms of margin points, we did another margin point which is a great result because we were talking about stable margins. We are now going in the second part of the strength in phase. We still work to do, which is good, but also then preparing for the scale phase that starts in FY '26. That's what we are committed to, and that's what we are also confident about. It's a great new team. It's much more collaboration, more scalable products, more footprint globally. More integrated solution, more data. So yes, I'm very, very happy. Actually, the team is celebrating a little bit. And for the first time that I'm here, we had some applause in the boardroom when we presented our results. So, we are very happy with where we are.

Our next question comes from Patrick who asked, are you able to discuss the net revenue retention expectations for the group for FY '25 and the medium-term, given considerations for the strategic R&D being undertaken and the ability to reprice customers on renewal?

Yes. I think Infomedia historically was always very high, and we're always targeting the 95% overall.

Thank you. A follow-up from Tim Plumbe, who asks, bottom-end guidance suggestions on no growth on ARR, what conditions would you see this eventual add to?

Well, we have, as far as I know, 85% of our revenue outside the Australian dollar, and we see some volatility in the different currencies and markets, especially now with the change of inflation and the change of the interest hikes. And I feel that we had that discussion last year. When we put out our guidance, we obviously don't want to put something out in the market that we have to catch later. So, we feel very confident with the current guidance and the midpoint. The lower end is obviously then with some unexpected influences happening in our revenue streams. And there is a higher end, which is in a very positive side. So that's why we give a corridor. And if you are assuming somewhere at the midpoint in the corridor, then you are under the current condition on the right track.

Thank you. Our next question comes from Sinclair Curry, who asks, can you please highlight the product development priorities for the upcoming year, in particular, which are the most linked to near-term revenue opportunities?

Yes. So, we have a lot of backlog signed contracts sitting in input live, which is great. We are entering a new segment, a new category, which is the light vehicles. If you envision the e-commerce growth and the demand of little transporters, we're delivering packages to end customers. It's a huge market and a strong growing market. We have successfully signed up now with ISUZU and with Hino. Both are now starting to develop together with us these new and, again, scalable solution groups, and we see that we can drive that opportunity much further than with the 2 brands and also much further into other regions. There's a lot of demand for it because the commercial vehicle needs to be on the road. And not waiting for a part or for service. I think it's a great development for the light vehicles, and it's also further driving our profitable growth. But we first have to develop that, and we have to deliver on that. So, don't overtake yourself. I think that will come into billing and revenue in the second half of FY '25 and then it kicks in strongly. Infodrive is one of our key priorities because when we took over the business, it was more consulting business and the consulting nature of the business. Currently, the team is working twofold, one is on delivering all the signed deals and the backlog. And on the other side, we are also rewriting the core code base of that product to make it more scalable. So, they are all hands-on deck. We were successfully doing the same thing with Connect a year ago. And now the team, especially towards the new Biz-Dev-Ops agile operating model, we are able to shift resources quickly and Infodrive is one of the big focus areas in FY '25. The other area is more in the data and in the back end we are thinking about having one catalog for both for Microcat and for SimplePart, which is a big undertaking, but we see already some very good results and some pilots. So, I think the data landing for Infodrive and Microcat joint data lending will show further efficiencies and synergies over time. But then it is needed to rewrite part of the current data lending software into a more integrated and compelling solution.

We do have one question from Tim that's just come in, who asks how should we think about the CapEx and R&D investment in FY 2025 versus FY 2024, please?

Tim, so the FY '25 CapEx, we're suggesting it will mean relatively the same, may increase slightly. We don't expect it to further decrease. We have started to invest, as Jens mentioned, in further product features and abilities, and that will truly drive the CapEx up slightly.

That brings our Q&A session to a close. I'll hand back to Jens for closing remarks.

So, it was a great year, heavy lifting, but I'm very pleased that we have now a very enthusiastic dynamic and collaborative team. We have streamlined our ELT and Chantell and me; we are very happy where we are. So, let's go into the next year.

Thank you very much. That brings our call to a close. You may now disconnect.