oOh!media Limited (OML) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the oOh!media Limited H1 '21 Results webcast. [Operator Instructions] I would now like to hand the conference over to Ms. Cathy O'Connor, CEO. Please go ahead.

Thank you. Good morning, and welcome, everyone. I'm here today with oOh!media's Chief Financial Officer, Sheila Lines, and together, we will take you through the 2021 half year results for the company. For today's agenda, please go to Slide 2. I'll start today with an overview of the highlights and our revenue and audience performance. Sheila will cover the financial results, and I'll return to provide some comments on our plan for growth and, of course, the current outlook. Before we move to highlights, I'll start today by saying that this results period has coincided with my first 6 months in the CEO role. I joined the Out of Home sector back in January as I held the belief that it was the best place of the established media continue to grow in a changing media landscape with the increasing impacts of digitization. And my conviction and belief on the strong position of Out of Home has only really built with the benefit of more time in the role. oOh!media is the industry's largest Out of Home player is well placed to benefit from sector growth. Our business has a strong culture and a talented and experienced workforce who share a belief and a passion for the sector and oOh! is placed within it. Our strategic review of the business is now complete, and I look forward to taking you through our future plans in just a few moments time. To set some further context before we turn to the slides. oOh!media is certainly operating in a dynamic market prone to short-term audience shifts as a result of COVID-19 lockdowns. On a positive note, as we'll demonstrate today, despite the short-term disruptions, we see strong revenue growth when audiences recover. And this gives us confidence for the underlying health of our business and our future growth. I'll now take you through today's presentation. And if you are working with the slides, I'll ask you please to move to Slide 4. Let me start with the highlights. Our first half revenues are up 23% versus the prior half -- or our first half, I should say, with Q2 revenues more than doubling over Q2 in 2020. This has led to strong EBITDA growth, which more than tripled and margin expansion as a result of revenue growth. Advertisers have certainly been less cautious than for the same period in 2020, quickly returning at the end of lockdowns. The Road format and our New Zealand business have delivered revenue performance ahead of 2019 pre-COVID levels. It is worth noting that oOh!media has the largest inventory in road of both large-format digital and large format classic assets, and that's in both metropolitan regional Australia. So we are certainly very well placed to capitalize on this Road-led recovery. And this is why we've continued to invest in high-quality digital assets in the Road network. The third quarter is currently pacing at 138% of the third quarter in 2020. Over on Slide 5, we highlight the first half key financials. As a result of recovered audiences and a disciplined approach to running the business, we saw significant improvements, as we said, in revenue and EBITDA in the first half. This has resulted in an underlying EBITDA of $33.3 million, which is 209% above pcp on a pre-AASB 16 basis. Revenue growth of 23%, with COGS and OpEx growth at 12% on pcp. Free cash flows returned to more normalized levels relative to EBITDA after the significant accounts receivable unwind in the first half of 2020, which Sheila will cover later. The balance sheet is in a strong position with only 1.1x gearing at June and no interim dividend has been declared. Moving on to the revenue and audience update. I'll ask you now to move to Slide 7. As I outlined at our AGM in May, the Road formats and our New Zealand business are the strongest contributors to oOh!'s recovery in the first half. And as you can see from the detail on this slide, not all formats are recovering at the same pace, And this is where oOh!media's audience scale and the breadth of its assets serve it very well in this recovery journey. Now I'll just draw your attention to some further details on this slide. Because of the strong performance of Road, I'll firstly just talked about. The Road assets performed 16% above revenues of the first half of 2019. Returning now to the balance of the format. In the top line within commute, rail passenger declines impacted the pace of recovery although pleasingly, that is offset somewhat by large exposure to suburban street furniture, which remains strong by comparison. Another prominent channel for us that of retail approached the first half of 2019 levels for the half. Fly and Locate, which for us is largely office towers continue to be impacted by lower audience numbers. Across the combined Australia, New Zealand market, we had a market share of 47% with the footnote in the slide outlining how this has been calculated. This market share cements us as the clear scaled leader across both Australia and New Zealand, and I will talk further to this later in the presentation. Over on Slide 8. We look further into our key formats, Looking to the right of this chart, we see that the formats of Road, Retail, Street Furniture and New Zealand contribute to 75% of the overall revenue to oOh! and this format in aggregate performed in line with the first half of 2019. Rounding out the chart on the right, we can see that Office and Rail formats contribute a further 15% of those revenue and the remaining 10% comes from Fly. And as a reminder, the bulk of Fly's revenues are domestic passenger oriented. Now it's important to note that in these more audience impacted environments of Fly, Office and Rail, our rents have a larger variable component than the broader business and have benefited from key concession partners providing rent relief, and this in turn has lessened the impact of audience decline to oOh!'s earnings in these formats. Some further comments on the nature of our recovery over on Slide 9. Having dealt with various forms of COVID lockdown for over a year now, what we do know is that advertisers are very quick to return once restrictions are eased or lifted. And these graphs show the revenue returns for Road post-lockdown in our 2 major markets of Sydney and Melbourne. From each graph, we can see an emphatic return of advertising spend once lockdowns are eased. And this advertiser conviction is an encouraging sign for an eventual recovery once conditions normalize. In the Appendix on Slide 25, we also provide a representation of the Australian geographic split of our revenues from pre-COVID FY 2019, and that's to help you better understand the potential impact of state lockdowns and subsequent recoveries on our revenue base. And finally, over on Slide 10. To round out our comments on revenue recovery, we'll take a quick look at the New Zealand market. As we know, the New Zealand market when compared to Australia for the first half was less disrupted by lockdown, with audiences generally at 100% of 2019 levels as a minimum. Now I draw your attention to the fact that the New Zealand revenues experienced growth beyond 2019 within the half, where the business performed at record levels. demonstrating growth beyond the pre-COVID 2019. So that concludes our comments on our first half performance. And so to recap, while Out of Home has been impacted by audience declines, we now see the pace and shape of positive revenue recovery as these lockdowns are lifted. oOh!media has a strong exposure to those formats of road, retail and street that are leading this recovery and has accordingly delivered a much improved result for the half. I'll now hand over to Sheila, who will take you through some further detail on the financials, and then I'll be back to talk about our future plans, and then we'll go to questions. Sheila.

Thank you, Cathy, and good morning. Before I provide commentary on the interim financial report, I would highlight that these are principally presented on a pre-AASB 16 basis, which is consistent with the presentation of the prior half comparators. We believe this is appropriate as most analysts and shareholders analyze the company on this basis. Our statutory reported results, including AASB 16 are provided in the interim report and a reconciliation of the key profit and loss items between our statutory results, and these pre-AASB 16 results is provided in the Appendix to this presentation as well as in the operating and financial review. Turning first to our income statement on Slide 12. Revenues increased by $47 million, 23% compared to the first half of 2020. The COVID-19 pandemic onset severely affected revenue for the second quarter of the prior period. When comparing our revenues for the half to the pre-pandemic 2019 year, in total, our first half 2021 revenues performed at circa 80% of 2019 with the key format of Road, Street Furniture, Retail in New Zealand performing in aggregate at a similar level to the pre-pandemic 2019 period. Rail and Fly are 2 environments where audiences and revenues continue to be impacted this year by government mobility restriction measures. Our commercial partners in both environments include rent abatements to mitigate these impacts, which I will address in more detail on the next slide. The other most audience and revenue impact environment for the half is office included in our Locate business. Rent in office is variable and low compared to other formats. So gross profit remains positive, notwithstanding the challenging external conditions this year for office. Improved revenue for the first half contributed to a gross margin uplift of 8.8% to 42.5% compared to the same period last year and a gross profit of $107 million, a 55% improvement on the same period last year. Operating expenditure, excluding depreciation and amortization, increased by $15 million with $12.3 million of temporary savings measures reported in the first half of 2020, not repeating in 2021 as we foreshadowed at the full year results in February. These temporary savings comprised $5.9 million in JobKeeper and New Zealand wage subsidies and $6 million in total from reduced sales commission and incentive expenses, a 2-week Easter company shutdown in April last year, and the adoption of a 4-day work week across the company from mid-May to mid-August last year. Annualized structural cost reductions of $10 million announced this time last year reduced OpEx $3.5 million and nonrent cost of goods sold of $1.5 million for this first half of 2021. Further cost actions after August 2020 offset office rent increases of $1.5 million in the current half as the company moved into new head office leases in both Sydney and Melbourne. As we highlighted on previous calls, cost increased as expected by annual inflation. As we have a December year-end, we adjust wages, including for award staff in January instead of July. Unlike other companies, we experienced significant D&O increases. In addition, $1 million of existing costs were accounted for as expenses in this half and will continue to be so treated, in part due to new accounting standards. In prior periods, these costs have been accounted for as CapEx and are not new cash costs. $3 million of costs in the first half relate to unusually high levels of annual lease not taken, employee separation costs and duplicate periods of rent on the head office moves. These are nonrecurring or costs we expect will reduce in the second half. We are able to support full revenue recovery to pre-COVID levels on our current employee head count, and cost discipline remains a focus. The tripling of underlying EBITDA to $33 million demonstrates the operational leverage in our business. Depreciation and amortization of $33 million, while higher than the prior period, are consistent with the annualized run rate of 2020. Net finance costs decreased $5.5 million, driven by lower average debt for the half. NPAT was a loss of $4 million for the period compared to a $23 million loss in the prior period. Underlying NPATA was a profit of $2.4 million compared to an underlying NPATA loss of $17 million in the prior period. And in the Appendix of this presentation, we provide a reconciliation of NPAT to underlying NPATA. Moving to Slide 13. $19 million of rent abatements received during the half relate to the Rail and Fly environment, with a split shown in the pie chart on this slide. At the AGM in mid-May, Cathy noted the abatements to that date were $12 million. We continue to receive abatements, and the total for the half reflect actual passenger number data that we received after the pack from our partners. As previously reported, the company had either pre-existing arrangements negotiated during 2020, adjustment to its rent obligations, the factor in its combination of passenger numbers versus a pre-COVID base as well as revenues earned during the period versus a pre-COVID base. We are appreciative of the position taken by our long-time partners in reaching these agreements. The quantum of abatements we will receive in the second half in Rail and Fly will continue to depend on passenger numbers and revenue against the agreed pre-COVID base. Moving now to our cash flow on Slide 14. The half was another strong period of cash generation for the business following strong operating cash flows in 2020 and further strengthened our balance sheet position. Operating cash flow conversion of 82% of EBITDA included $14 million of rent payments related to 2020, which were deferred into this half with commercial partner consent, as we outlined when we presented the interim and full year '20 results. This was partly offset by $5 million in rent abatements, which were received in the current period, which also related to the prior year. Excluding these net $9 million cash payments relating to prior year, operating cash flows were 110% of EBITDA for the half. Working capital at 30 June '21, is consistent with 31 December 2020. In the prior period, first half 2020, working capital reduced $76 million, mainly as a result of the pandemic concept in the second quarter. As revenue recovery commenced in the second half, approximately $50 million of this working capital reduction reversed by the end of 2020, and the remaining circa $25 million can be expected to reverse as revenues recover to pre-COVID '19 levels. Also, the typical working capital seasonality we see in 1 half versus 2 half with higher revenue typically in the second half needs to be considered. Tax payments were $1.4 million higher this half due to increased net payments to New Zealand income tax and other non-income taxes in Australia, such as GST and fringe benefit tax. Capital expenditure of $8 million was focused on the digitization of key Road sites and our corporate requirements. It is expected that full year CapEx will be at or below $25 million and will predominantly consist of digital assets supporting revenue growth. No final dividend was declared for FY '20, and therefore, no dividends were paid in the current half. This half demonstrates that notwithstanding the unwind of temporary measures for 2020, we remain cash positive on both operating and free cash flow. The first half is historically lower for cash and EBITDA generation, given advertiser demand is typically stronger in the second half, increasing our revenues and earnings. Turning now to the balance sheet on Slide 15. Gearing continues to reduce due to both reduction in absolute net debt and improved EBITDA. We report 1.1x at June '21 versus 1.8x at December 2020. This is significantly below our gearing covenant of 3.5x to which reduces to 3.25x in September 2021 for the remainder of the facility firm. In July 2021, reflecting the permanent reductions in debt, we reduced $50 million of interest rate hedges for a $2.4 million payment. At July -- at 31 July 2021, net debt is $89 million. The business is in a very strong balance sheet position to deal with the impacts of continued government mobility restrictions, and we remain able to manage CapEx effectively to the current environment given the extensive existing scale of our network assets going into the pandemic. I will now hand back to Cathy.

Thanks, Sheila. And we'll now look to the future. Please move to Slide 17. From a longer-term point of view, the structural growth of Out of Home remains intact. The recent PwC outlook report projects the medium to restore its share of the overall market to 7.3% in 2025. Out of Home has several factors that underpin this strong growth outlook. The medium has enviable mass reach audiences, and these are not under threat from fragmentation. In fact, they are enhanced by population growth and the planned growth to our cities. The Out of Home industry is working closely together now to standardize and make the medium easier to buy. And of course, the sector is investing heavily in the advancement of its move measurement system, bringing it into the digital era. We expect the digitization of assets to continue in the sector. And while we know that Out of Home is a highly effective medium for building brand awareness, the real-time, flexible and adaptive nature of digital Out of Home is presenting new usage cases for existing and new advertisers. Looking at our future areas of focus over on Slide 18. As I mentioned previously, we conducted a strategic review of oOh!media to isolate the key growth drivers for our business. As a result of that review, our focus will remain within the high-growth Out of Home sector, and we will bring a stronger focus on improved execution right across the business. I'll briefly touch on the main elements of our plan. Our first pillar on the left is about optimizing our network by building an asset mix, which delivers profitable growth and improve our return on investment. This will mean continued investments in digital inventory and because of our scale, taking a disciplined approach to contract renewals. Due to our focus on Out of Home, as announced last month, we will be divesting the Junkee Media digital publishing business. To the right, our next pillar is increasing our focus on audience selling as the future of Out of Home. Historically, Out of Home in Australia and New Zealand has been transacted on the basis of format and location. While these attributes remain important, audience selling is the currency of digital advertising. And when this way of planning and buying is applied to oOh!media's large audiences across the breadth of our formats using sophisticated data sets such as Quantium biographics, the improvements we can deliver in ROI are compelling. We intend to increase our efforts to lead this education through the buy program, which launched last month. And I'll take you through a quick case study in a moment, which better demonstrates the success we are delivering for our advertisers with this approach. Moving to the right of the chart again. In the third column, we outlined a program of continued digital transformation of those systems and processes, and this is essential in an environment where we have an evolving and increasingly digital marketplace. The recent appointment of a new Chief Technology and Information Officer for oOh!media is the next step in accelerating this transformation to meet changing customer needs. As part of our transformation program, we will look to simplify the planning and buying process, participate in the emerging programmatic digital Out of Home marketplace and further develop systems for improved yield management. And finally, we are taking a disciplined approach to OpEx, prioritizing our investments into critical areas, redeploying capital from noncritical areas and working within existing head count to capitalize on the positive operating leverage that comes with revenue growth. So to recap, we will be a more disciplined, more digital and more digitized Out of Home business and better leverage our existing assets and investments to deliver growth. Before I conclude and we move to the outlook, Slide 19 outlines a case study where we delivered compelling ROI for our client, Ingham's Chicken, through taking an audience-selling approach, to the client. The campaign was a product launch for their new product, the Free Ranger. The case study outlines how oOh!media achieved sales uplift for Ingham's of 30% against the category that grew only 3% by using an audience-first approach. And 72% of sales achieved were brand-new buyers of the product. Central to the concept of audience selling, the campaign was planned against a specific biographic that of top chicken buyers, using oOh!media's unique Quantium SmartReach product. Only oOh!media assets with the highest exposure to these audiences were used in the campaign. The campaign only ran in Out of Home and oOh!media was used exclusively and provided pre- and post-campaign results using actual transactional data as part of the campaign. The case study demonstrates the way in which our media can target and deliver specific audiences by panel using its data in this way and demonstrate clear ROI. This accountability is valued highly by advertisers and will assist in growing our share against other media including digital media. So we'll conclude now with comments about our outlook over on Slide 21. While the external environment remains uncertain, we are confident in our ability to control what we can control and to take advantage of audience recovery. Certainly, it is our view and the general view of the media sector across the board, but we are dealing with more optimism from our advertisers than we were in 2020. Currently, Q3 revenues are pacing up 38% versus this point last year. We'll continue to manage our cost base, and we'll keep head count flat for the second half. Our experience reassures us that there will be a quick audience recovery when current restrictions ease. Our business is positioning itself to take advantage of this through rate and occupancy management of its existing inventory and by continuing to invest in high-quality digital locations. As Sheila mentioned, the business expects to spend up to $25 million in CapEx in this financial year. So that concludes today's presentation. And I'll now hand over to any questions that you may have.

[Operator Instructions] Your first question comes from Desmond Tsao with Goldman Sachs.

First question is just on Slide 8. I thought that chart was quite interesting, showing the strong pacing of revenues in April and May. Just came to dig a bit deeper into that. So I guess with that chart in mind and given your comments that advertisers are less cautious this time around. To what extent does this stand through those months where, obviously, there was improvement given the easing of restrictions and as well as the case study from New Zealand and offshore showing that these things can rebound quite quickly? To what extent does that provide you with the confidence that once we get through this current lockdown and vaccination rates get to 70%, 80% that the recovery in calendar '22 would be much stronger than it has been over the past 12 months?

Thank you. Yes, it's a good question. I think it really does underpin the basis upon which we've presented the data to really be able to demonstrate that, that recovery is quite emphatic once the audience numbers build, which is obviously what happens when restrictions are eased. So we have a high level of confidence that as vaccination rates continue to increase and of course, the government has stated that they do intend to open up the economy once those vaccination thresholds are met, we've got a really high level of confidence that, that responsiveness will remain. And also to your comment about advertiser confidence even in these current lockdowns that we're experiencing at the moment, the majority of requests from advertisers when they were talking to them about their campaigns are either deferring spend by moving it 2 or 3 weeks or in fact, reverting it to Q4 of the calendar year. So we're seeing nothing like the strong cancellations that we saw last year. And equally, when we're looking at Q4, in many cases, we are requiring advertisers that we are re-rating some of those campaigns, and they're accepting of that, I think generally, they believe, as we do, that the demand will flow with the restrictions being eased, and they're prepared to work with us to ensure that, that out in an environment where demand is picking up at a rapid rate, which we expect will happen with the removal of restriction.

Great. I actually had a question on Q4, but maybe just a quick follow-up on picking up on some of your comments. So staying on Slide 8. That July month pacing seems to be quite strong versus June and May, and obviously, New South Wales were in lockdown in July. So can you just provide a bit of color around how you got that quite strong July performance.

Yes, July was a much improved month for the sector as you can see there. The steel environment still remains uncertain. So we need to be careful about hard and fast predictions about what happens between now and the end of the year other than to say that we do see that the revenue response quickly when the restrictions are eased. So in July, it was really only the very beginning of the launch. And so we could see that momentum from the first half continue into the month of July, which is great to see. So I think it does -- really, it's a continuation of the same of the first half, which is that the more prolonged the improvements, the more acceleration of the revenue recovery that we do see.

Great. Fantastic. And then maybe just a final question on costs then. If you could provide a bit more color around the cost performance in the half and the drivers. And how we should think about the cost base into the second half given, I guess, your comments around continued prioritization of costs and as well as the fact that you're not anticipating to increase head count in the face of, I guess, the current lockdown that remains quite uncertain.

Yes, I think just generally, the approach is a conservative one around cost, understanding the environment that we're in is pretty fluid. So we are certainly doing everything we can in terms of pulling the short-term levers on discretionary costs. With the oOh!media business, 70% of our OpEx is people, and it's sort of judgment call that you're making trying to ensure that you're doing what you can to improve short-term performance, which I think we're doing well, while you're also keeping your eye on the recovery and making sure you have the resource and support behind what is effectively a reset of business demand. So I think we've got that balance right. And for that reason, over the recent history of the company, the head count has been reducing. And we think that we have that -- the resource about right. And that means that as the revenue does start to recover in future months, we'll be sort of looking to really capitalize on that operating leverage by not making more investments in people not needing to do that.

Thank you question comes from Entcho Raykovski with Crédit Suisse.

So my first question sort of picks up on Slide 8 in your outlook comments. I wonder if you're able to give us a breakdown of how those categories are pacing in Q3 relative to 2019, in particular, where's Road sitting? I mean you've obviously given us sort of the July indications, but if you can give us an indication of how that's looking for Q3, that would be really useful.

I think that it's probably fair to say that the dynamics of the first half are playing out into Q3. So Road is certainly the strongest-performing of our formats, particularly in relation to last year in relation to recovering to 2019 levels. And that dynamic has continued. And of course, the office and rail and fly environments somewhat trailing just because of the audience impact on those as well. So you can assume that the same trends we've shown you for the first half are very much playing out in the dynamics of Q3. And we have said that the Q3 quarter is pacing at 38% ahead for the same time last year.

Okay. Got you. And sorry, I don't mean to hold you to a number, but do you expect Road will maintain a level where it's higher than 2019 in Q3? Or is that likely given the restrictions to be down a little bit?

I think we have to be practical and realistic that the current restrictions are putting downward pressure on all audiences, although over the history of the pandemic, which is recent history, Road has been remarkably resilient. And then also, what I would overlay over that is we are dealing with national advertisers in many cases as well. So I think what we demonstrated in 2020 is the ability to move where the audiences are. So in some markets where you have stronger audiences, there is still a national road audience there to be capitalized on. But yes, we are seeing some short-term downward pressure on the road audiences. But as we've seen in the first half, we think that will bounce back pretty quickly as the restrictions start to be eased.

Okay. Great. And then just some of your earlier comments on re-rating when advertisers get pushed into Q4. Just to be clear on that, are advertisers happy to take a higher rate if they push into Q4? Is that how I should understand that comment? Or -- and just related to that, just a broader comment on rates, how you've seen them play out since the restrictions came in Sydney towards the end of June.

Of course. So yes, I think it's an interesting comment that advertisers are happy to pay higher rates. I would say they're accepting of paying higher rates, and that's been certainly the dynamic. I think the market is fairly attuned to the quarter 4 of any calendar year being a very high demand time for most media, and Out of Home is certainly no different. And there -- I think it does indicate that there is optimism in the customer base that high demand times in media bring higher prices, and most advertisers are saying that is the more acceptable condition than missing out on being able to rebook into Q4 should they cancel campaigns. So they're working very constructively with us, and that dynamic is not unique to Out of Home. I understand you might find some TV networks taking a similar approach to their pricing. We are obviously working with a short-term environment and where we are feeling the need to negotiate or review our price in the short-term marketplace. And by that, I mean, August, early September. We're doing so in a very considered way and certainly only doing it in a very short-term basis. But for the most part, my overriding comment about yield is I'm really happy with the progress we've made in stabilizing and improving our rate management over 2020, and that's incredibly important for the business as we prepare to move into the high-demand months and ultimately recover toward the 2019 levels that we saw.

That's great. And just a final one for me. I wonder if you could give us an update on the progress of the tender process for Sydney Trains? And I mean in particular, could the current conditions be an opportunity to extract perhaps even a more favorable outcome?

So the Sydney Trains contract has been extended through to the end of this calendar year, and we don't know the outcome of the recent tender process. So I think we have nothing more to say on Sydney Trains than we said in our February results, which is we've obviously made a bid for the Sydney contract. And we've done so in full view of the breadth and scale of our assets and what that contract represents to us in terms of our network. I'll sort of restate some of the really important things to consider around oOh!media, and that is that no one contract represents more than 6% of our revenue. And in Sydney Trains case, even less in EBITDA terms. And even when you look at the breadth of our assets across retail across street furniture, even without the Sydney Trains' contract, our reach of the Sydney metropolitan area is 98%. So that's the beauty of the own model and the scale that we've built. And so we're very confident that we'd like to retain the contract and in the event that it moves to another Out of Home companies, and we stand with still a very convincing reach proposition across Sydney Metro. And of course, 2024, the Metro line contract is coming on into the Out of Home space, and there is quite a lot of consistency between many of those areas that the new line is covering and Sydney Trains contract.

[Operator Instructions] Your next question comes from Darren Leung with Macquarie.

Just wanted to follow up on that major contract's question. So obviously, you can't say how much on Sydney Trains, but I think previously, you had a slide talking to 20-odd percent of your 2019 revenue basis coming out for expiry this year. So obviously, a good outcome today. But is there anything we should be thinking about throughout the second half of the year? So that's the first one. And the other one was sort of outlook based as well, but just on your outlook slide, you don't seem to have included Fly and Locate in terms of your reversion comment or I suppose, audience rebounding. So it's a bit of a crystal ball question, but where do you think this settles post-COVID world? And is it as simple as us adopting a view on where audience or food traffic is compared to pre-COVID levels?

Thanks, Darren. There's nothing in the second half to be thinking of that's material in terms of contract renewals. And in terms of your questions around the Fly and office environments, I'll probably talk to those in turn. I think the Fly environments as we know, that we're really -- the external factors will drive the decisions around when the borders open up. And of course, what we did see earlier in the year when we did have a brief respite from border restrictions that domestic market started to really loosen up quite quickly. And we saw some advertisers starting to respond accordingly. With the airports, what we do know is that the majority of Australian passenger movements are domestic-oriented. And the majority of our advertisers to that space are also domestic. So the international board is of less concern to us, although we would like them to be open. And of course, all of those contracts now as a standard part of terms do have the audience abatements in them. So it will be about the pace of vaccinations, the health restrictions and the government and national cabinets views on borders that really determine when Fly starts to open up. I think it makes sense that anyone operating those types of environments would want to see an opening up before Christmas. But again, these factors are out of our control and so we're in the hands of what happens externally there. But I think what I will say to summarize is the fly environment should respond quite quickly in audience numbers and therefore, revenue once the borders are opened. In terms of office, it's obviously difficult when the government has meant that no one is able to work from offices or work from home to the extent that they are capable of doing so. But it's probably fair to say, I think with office that in the markets where we have had a reasonably free period from restrictions and at South Australia and Western Australia at the moment, the audiences to offers have recovered quite well around the 80% to 85% mark, and that's before the confidence of vaccinations is yet to be a reality in those 2 markets. So on that basis, I think we will see a return of audiences to office. I think what I'd also say about that is it's a very lucrative customer, the office tenant and its high value. And I think we'll continue to have a very appealing advertiser product, whether that audience is varying 10% or 15% or not. And it's also a very low fixed cost business for us. So when the revenue does return, there's very strong margin on the office product. So hopefully, that gives you just a little bit of color to those 2 environments.

And just to clarify your comment on airports. It sounded like any rental negotiations will be variable going forward. Was that a 2021 comment? Or was that a future contract's comment as well?

Sorry, can you just ask that again, Darren, so I make sure that I understand the question.