SG Fleet Group Limited (SGF) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. And welcome to SG Fleet 2020 Half Year Results. [Operator Instructions] After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Mr. Robbie Blau, Chief Executive Officer. Thank you. Please go ahead.

Thank you. Good morning, everybody, and thank you for joining us on what's a very, very busy reporting day. My name is Robbie Blau. I'm the CEO of SG Fleet; and with me today is Kevin Wundram, our CFO. For the benefit of those dialing in, I'll refer to the slide numbers as I go through the presentation. And could you please turn to Slide #3 for a quick overview of our results. At our F '19 full year results announcement, we flagged the positive performance of our Corporate business as well as some signs of improvements in Consumer. I think the first half of 2020 again saw good activity in our Corporate business, and I'll talk more about it a bit later. The improvement in Consumer though didn't carry through to the second quarter of this half, and more detail about that through the presentation. I think Consumer sentiment and private new car sales weakened again late in the period, as you all know, and certainly, none of this was helped by the bushfire crisis and all of the external factors driving consumer confidence. In the U.K., the underlying performance of the U.K. business was again very positive. A challenging RV environment in the lead-up to the election negated some of that progress, but we've seen that reversing again now. So that was a very temporary thing in the political environment over there. In New Zealand, we recorded the win of the year in that market, winning Northpower, and our business there is attracting some strong interest on the back of that and so I'm happy with that performance. So in summary, while we achieved some growth in total revenue, we did face a number of external pressures, including from the financial services environment and the pro-motor vehicle sales environment in the consumer side, and we'll talk more about that. This obviously did impact our financial performance, particularly novated. We did foreshadow this to you in our August presentations, and it's materialized as we thought it might. However, the good news is we're making good progress with decreasing our reliance on upfront income, and penetration of annuity-style product is increasing, helped by strong relationships we have within our customer base. At the full year, we announced the move towards an annuity income-generating insurance product as well as the introduction of more on-balance sheet funding in our business. Whilst the implementation of securitization has taken longer than planned, it's fair to say that the impacts of changes to the insurance product has been greater-than-expected at this stage, and I'll go into more detail on that in just a moment. As I said in August, the goal of these initiatives is to create a more stable and lower-risk revenue profile and reduce sensitivity to external factors, such as the ones we are encountering in the Consumer business at present. We remain on track to achieve these objectives, and that certainly will add to the health of the business in the medium and the long term. It's been a challenging time for the consumer part of our industry. There's certainly a shift away from the way income was generated in the novated sector historically. But we also believe that this is a massive opportunity to strengthen our position in the market by building on our diversified portfolio and our technology business and emerge from this period a stronger and more resilient business. If you'd now turn to Slide #4 for review of the period in Australia, I'll start with the Corporate sort of trade business. We continue to see a strong pipeline of opportunities in that business. These opportunities are coming from existing customers that got a tender, from customers that are just renewing with us without going to tender and also from a number of organizations that are yet to outsource. So we're still seeing about 1/3 of the tenders we compete in are for internally managed and funded fleets. That obviously plays strongly into our thesis that there's a continued structural shift towards outsourcing in our space. This has been accelerated by the increasingly complex nature of managing fleets, the increasingly complex nature of the technology solutions that are used to achieve savings and other benefits in fleet management. And that is all playing into the outsourcing theme very positively. Having said this, while we've got a very busy tender pipeline, and I'll talk in some detail about that a little later and give you some numbers, we are seeing decisions taking 6 to 12 months to materialize on the bigger end of town. This is longer than we saw a few years ago. I think a key reason for that increased time for opportunities to drop is the fact that we are selling an increasingly complex set of services to our customers, much more technology. It's not just basic fleet management anymore. And in the long run, we actually welcome that because it makes our customers more sticky once they're on the book. The product range we're selling them and the solutions we provide, I mean, they are long-term solutions for our customers. We do expect a number of these to drop in the second half. We saw some of these dropping already very early on in this half. And so we're comfortable with where our pipeline is in the Corporate business. We've seen in this environment a continued high level of extensions. It's not different to what it's been over the last 18 months, but it has continued at that sort of level. And that obviously impacts delivery numbers during the period, but it's a temporary impact because we see the deliveries later on. As I've said, we've recorded some good wins later in the reported period and a couple of good wins early on in this period. A lot of those were renewed contracts that didn't go back to tender, so they are customers we have had in the book for a long time. They're buying additional services from us. This is a strong endorsement of our product range and our service quality and further evidence of the stickiness of our customer base. Again, I'll provide some statistics later on in the presentation about that stickiness and how we're going on that front. So a lot of those wins in renewals will start running on in the current period, and we'll see the benefit coming through in future periods. In the commercial segment, we've been less active in the half. We didn't compete for business where we thought the margins weren't big enough for us to sustain the levels of risk. And so where margins were just not high enough, we just did not compete. So as I've always said with that business, it's an easier business to switch on and off. It's much more transactional, and so we're able to pick and choose the areas where we want to compete there. On the product front, our offering continues to shift away from pass-through products such as broker or commission products, for example, to match more high-tech solutions. A lot of those were developed and devised in-house by our own innovation team. And we've also made some investments in some interesting technology start-ups in our space. We're starting to sell those products through to our customers and getting some great traction in that regard. And customers are increasingly appreciating the benefits of those solutions to optimize their fleets. And I think it's probably worth calling out that in the last 6 months, the number of innovation presentations that we've done for customers has -- well, has gone up by multiples. It's -- in both existing and prospective customers. So it's both a retention tool and an interaction tool for customers and going very well for us. All of these presentations obviously position us well for future business. We build relationships with those potential customers and create lots of interest for solutions that are somewhat unique in the market. An example of this is our leadership in the electric vehicle space. We've taken it and appoint ourselves to get involved in the infrastructure side of that business. We've installed tens of chargers for one big government customer, for the ACT Government. They've started taking up electric vehicles because we've been able to put that infrastructure in for them. So we've got dozens of electric vehicles into them now. And while it's really early days for this technology, we are seeing much more interest in takeup. In fact, we're about to start a hydrogen project for one of our key customers as well. So customers are increasingly recognizing that we understand the technology. We're at the forefront of it and talking to us about these cutting-edge solutions. Having said all of that about electrics and hybrids, they are still only about 5% of our tool-of-trade fleet, but that is a doubling of what we had 6 months ago on the book. And that's about double what the car park is in Australia for those vehicles as well. So it's still picking up very slowly in the market, and that's about infrastructure and about government support around those products. We can only work with what we can within the environment. But certainly, we're firmly established as leaders in both the private and public sector in that space. And while the mine is nascent now, it certainly will pick up. And we've seen that in our other markets. I'll talk a little bit about the penetration in the U.K., and you'll see what the trend looks like over there. I think another example of how pushing through with technology benefits our customers and our business is our Bookingintelligence product. You've heard me talk a lot about that over a number of years. We first launched that product in 2013. We were really pushing it to customers rather than seeing any pull for it. In 2017, we really started seeing demand take off. And since then, the increase has been prolific. We've got some major government customers on the product now. We've got major corporates on the product. We're seeing a doubling of the number of transactions we do on that platform every year now, and we should be way above 0.5 million transactions by the end of this current period. And that's from kind of almost outstanding start in '17. So good momentum there. Similarly, our Inspect365 chain of responsibility management product, while it's in the very early stages of adoption, interest is spiking every month. And every time we demonstrate the product, we're starting to see stickiness with customers around that product. Just late last week, the first sort of prosecution on this change of chain of responsibility legislation happened in the Victorian market. It was actually around fatigue management rather than management of the vehicle, which this particular product deals with. But the point we've been making to the market for 2 reporting periods now is as soon as this legislation starts being enforced and there's prosecutions on directors, there will be a massive takeup of the product for protection. We're starting to see that happen. And so in summary, a really positive outlook for our Corporate business on both the Customer and Product front. As I said, I'm probably hampered a little bit by longer-decision time frames. This obviously does impact deliveries in the short term, but not in the long term. And so we're at it. We continue to sign up new customers. We're growing our offering to existing customers, and so the rewards will certainly very much be there. And I think the fact that we've got this diversification in our business will certainly help us a lot in these more difficult sort of times in the Consumer market. Turning to Slide #5 now for some comments on the Consumer business. I think I want to start off by saying that the improvements we saw in business activity in the early months of the half just did not carry through in the back end for a number of reasons, which I'll talk about in the next few minutes. Again, some more negative consumer sentiment drove weakness in private new car sales. This was certainly made worse in January after the period by bushfires, natural disasters, concern about corona. Just a lot of very best consumers. So that did result in low novated sales during the period. We performed better than the broader consumer market from a perspective of the numbers. But certainly, our novated sales were down. Obviously, the flip side of that weakness in new car sales is our natural hedge in our business of stronger RVs. And again, because of the fact that we've got a large Corporate business and take operating lease risk on a large part of that book, we've got that natural balance built into the book and that certainly helps in these periods. Secondhand is going really strongly. There's no reason to think it's not going to continue going that strongly, and so we do get this natural balance in our book through the operating lease fleet. I think the other point, just as a structural point to point out to you, is that when we see this indecisiveness in the novated book, it's slightly different between the Corporate book. What happens in the Corporate book is the vehicles march down the book longer. We see extensions go longer, as I called out earlier, but they still remain on our book. What you see in the novated market is sometimes a customer leaves the book for a period. So they've paid out the lease. They hold the vehicle for another year. They leave the book for their due and then come back when they want a new one. And so structurally, it's different to -- than just staying on the book, paying an extension. We invariably get them back for the next vehicle, but they are holding on to the vehicles right now slightly longer because of all the decisiveness. So just worth calling that out. I think we saw slow credit decisioning continuing from the banks during the period. That obviously affects our ability to close deals at the pace we'd like to close them. And I think I really do have to call out that we saw massively elevated credit rejection levels late in the period in the last quarter of the period. And some of that was probably driven by the turmoil out of WestPac, et cetera. While it wasn't directly WestPac that we saw it from, I think that uncertainty again created credit turmoil. It's somewhat irrational to us because, as I pointed out last time, we're selling novated vehicles to drivers that are employed, creditworthy. We're taking it straight out of their salaries. So it's not -- we haven't seen the risk profile change. We haven't seen bad credit increase in any way, so default in any way on the novated book. It's just the credit decisioning in the banks has become a lot more cookie cutter, and so that certainly did have some [ impacts. ] We're actually seeing it get better again now, certainly, with some of our providers, but it's a bit tightened. And then to talk about the insurance world. We're certainly not immune to the insurance product margin pressure experienced by our whole industry. You've heard some of our competitors call it out in the last few months in the run-up to their results. And I think all the pressure on insurance products from the regulators means that it's an uncertain time in that product, and that certainly has hurt our P&L in this period. We exited a couple of small add-on insurance products, as we called out in the last 2 periods, and we've been doing that. They were not massive in our business, but we did exit them and it all adds up. And the new product mix, including that annuity-style product that I talked about at the full year, they're still being fine-tuned and still being accepted by our customers. And so penetration levels just have not settled in our account with certainty, say, too, they'll be here or there. It's still a bit of a moving piece, and that certainly has hurt our additional products and services line in this half. And Kevin will talk in detail about that. We are -- remain and are very confident that the changes we've made to the portfolio will deliver the benefits we want to see in the medium and long term. We think it's the right strategy. We continue down the path, but obviously, in the short term, there is a little pain around it. I think our TradeAdvantage taking in vehicle sale offerings performed really well in the period, and it's worth calling out, again, an additional sort of benefit we offer to our Consumer side of our business -- well, to both sides of the business, really. But in the context of Consumer, it's just a little additional benefit. It's getting momentum. Again, that will be a good income stream for us in the long term. We continue to see strong price competition in the Consumer side. Given muted demand, you'd completely expect that, and so we do continue to see that. So a lot of external factors all playing together to make Consumer a pretty tough gig in the last half. We did, however, manage to get some sizable wins of employees, new customers on our book. And we have a strong tender pipeline in the consumer business. So from a point of view of bringing on new opportunities, that's continued to go well. We obviously continue to cross-sell between Corporate and Consumer. We've seen some good benefit coming through there, given all the technology opportunities. So certainly, not all bad news at all. But driver conversion does remain challenging. What we are seeing is very high sort of customer -- our customer surveys, we've seen high levels of customer appreciation of our products and service. So customer advocacy remains very high. And so we are holding on to the customers we've got there. It does put us in a great position when customer sentiment improves, and so penetration starts to improve through word of mouth and obviously, further penetration of our employee pool. So that is another positive in the business. So in summary, a challenging period in Consumer with some headwinds, but with some positive shoots coming through. We're dealing with these by growing the portfolio and certainly laying the groundwork for improved conversion over time. Turning to Slide #6 for an overview of our U.K. business now. Obviously, an eventful 6 months in the U.K. on a macro level. Some uncertainty surrounding the elections did flatten yuletide confidence for a period. We're certainly seeing that settling down, and we're seeing an increase in interest in new business. It certainly does feel more positive. The early uncertainty in the half kept overall fleet registrations flat in the U.K. However, we managed to back their trend, and we've graphed lead by about 4% in a flat market. So we're happy with that outcome, given the macro environment over there. As I say -- as I said during the run-up to the election, we saw some weakness in residual values and in demand for short-term rentals as the uncertainty was playing out. But that temporary oversupply sort of moved to the market pretty quickly, and we're seeing all these hold up much better as well as increased takeup in our rental space. A real positive out of that market, the love affair with hybrid and electric continues in that market. A pretty significant 7.5%, 7.4%, to be exact, of new registrations in the 2019 calendar year were electric and hybrid. That's a massive swing. It's positive for our business. We've got some great product and technology in that space. We recently won an award in that space. So we're seen as a bit of a leader in that space in the U.K. market. So that will certainly help our push into that market in the coming periods. The government is supporting the push into electric. There will be no benefit in context paid on company cars from April this year until April 2021. If you're driving an electric vehicle, that can save hundreds of pounds a month for dollars. And that's certainly going to push the asset class again forward in that market. We're obviously trying to capitalize on that trend with our personal car leasing product -- suite of products in that market. In terms of other activity, new business pipeline continues to grow. Fully maintained contract hire wins were achieved for sizable fleets in a -- across a number of different industries over the period. So we're happy with how the balance of that book is growing. We're adding a significant number of vehicles for some of our key customers. We've got a couple of major players in the last-mile delivery segments over there. Their businesses, as you'd expect, are growing exponentially, and we're getting a lot of benefit with that. But interestingly, we're putting electric vehicles into those fleets. So those guys are looking to go more green and they're looking for cutting-edge technology, and that's a great opportunity for us. So product and service going well there. We're obviously working hard to penetrate existing customers further. We've set an internal target of getting a minimum of 3 products to every customer to which we provide fully maintained contract hire. That's going pretty well. Again, I'll share steps of how well that's going in a few minutes with you. And again, another good example of increased customer stickiness and penetration in our U.K. business. Turning now to Slide #7 for some comments on our New Zealand business. Our business confidence has been somewhat muted in that environment, but that hasn't stopped the corporate world from issuing a lot of fairly significant tenders in the context of the size of that market. We're pursuing these, selectively making sure that we're not competing on pure price competition. We try and sell a very high-quality technical solution in that market. And so it's not -- we're not -- we won't just compete on price over there as is the case in all of our business. Government tender activity seems to be on the up again. It was a bit quiet towards the end of the previous period, so 6 months ago. The big development for us in that market, as I called out earlier, was the win of what was the largest RFP in that market. It was for Northpower, which is the majority provider of power on the North Island. It's about 1,200 assets, which is a big win for us in the context of the New Zealand market. The contract has come onto the book in the last few weeks. It was a seamless take on. Customer, very happy with how that's gone. Given that it is a smaller market and everybody talks to each other, it's created a lot of momentum for us from a business development perspective. We've had a lot of inbound inquiry on what we can do on those technical fleets for customers. And so our business development team is really busy there, looking at potential opportunities. Again, a small business that punches way above its weight. We're taking full advantage of these benefits now, and we will grow that business. So happy with how that's gone. As I say, we keep that office really lean. The vast majority of people in that office are customer-facing people, winning business for us. A lot of the back office happens out of our Australian operations. So lean from a cost perspective, and so a massive leverage when we do win reasonable-sized customers. That's it on New Zealand. I'll now hand over to Kevin to take you through the financials, and then I'll return to comment in more detail on some of the products comments I made earlier. Thanks.

Thanks, Robbie. If you could please turn to Slide 9. It goes without saying that this has been a very challenging period for us. At a high level, revenue increased by 0.6%, but net revenue decreased by 4.5% as the business felt the impact of lower new vehicle deliveries as well as changes to our add-on insurance portfolio, including the conversion from upfront income to annuity income on some of our products. The operating leverage that benefits us when we are growing obviously hurts us on the downside, and as a result, underlying NPAT decreased by 16.6% versus pcp. Turning over to Slide 10 and looking at the fleet size. The fleet grew by about 1,200 vehicles in the 6 months to December. Growth largely came from unfunded vehicles in the Corporate side of the business. Turning to Slide 11 and looking at the fleet mix. There hasn't been any material change in the fleet mix. It continues to be very well-diversified. We saw a slight decrease in novated and a slight increase in unfunded as a result of the contract wins in that space in the first half. Over to Slide 12 and looking at the key categories of revenue. Management fees were impacted by a reduction in the funded fleet of 2.8% versus pcp. Maintenance income was impacted by a reduction in the number of fully maintained vehicles as customers continued to opt for doing charged or budgeted maintenance products. The additional products and services line was impacted by changes to our insurance portfolio. We rationalized this product portfolio exiting some products, tightening margins on other products in line with the industry trends as well as changing the revenue recognition to an annuity basis. Our funding commission income felt the impact of the soft retail car sales environment and the elevation in credit rejections. Private sector passenger car sales in Australia declined by 6.2% for the 6 months to December. In this environment, our novated deliveries declined by 5%. Turning to Slide 13. Net end-of-lease income grew by 3.4% off the back of continued strong disposal results in Australia. Unfortunately, the soft market in the U.K. offset a large portion of it. However, we did start to see some improvement in the U.K. towards the end of the reporting period. The TradeAdvantage product performed well, notwithstanding the lower volume of new deliveries. Net rental income reduced as a result of lower short-term rental volumes in the U.K. Fleet management costs reduced due to the reduction in the number of fully maintained vehicles, but particularly fully maintained commercial vehicles. So please turn to Slide 14 for a look at the net revenue position after deducting direct costs. On an overall basis, net revenue declined by 4.5% due to the factors explained on the previous 2 slides. The reduction in new deliveries and changes to the insurance product portfolio have resulted in an increase in the proportion of annuity income in the business and has shifted the weighting of our revenue towards the corporate channel. Looking at the OpEx on Slide 15. Operating expenses increased due to the continued investment in technology. Employment costs did increase during the period, but we are taking steps to address this. As I said earlier, the operating leverage that benefits us when we are growing, thus tend to hurt us on the downside due to the high proportion of fixed costs in the business. The employment cost line does include approximately $600,000 worth of redundancy costs. Turning to Slide 16 for an update on our securitization project. The first half results presented today have not been materially impacted by this project. The only impact has been a small increase in headcount due to the increase in the size of our treasury and credit teams. The introduction of securitization is a significant project, touching all areas of the business, and we've made really good progress in the past 6 months. It's critical to get the foundation right before going live, so we've been very methodical in our approach. We've made 2 senior appointments in treasury and credit, both well credentialed and highly respected in their field. After a comprehensive RFP process, we selected a senior funder, and transaction documents are at an advanced stage. We're progressing discussions with potential mezzanine funders. The selection and implementation of the consumer credit bureau services and an automated credit decisioning system is a critical part of this project. Unfortunately, this piece has taken more time than planned. Our aim is to originate the first lease in Q4, and from then on, there will be a gradual ramp-up. As previously stated, our aim is to get to the point where 1/3 of our originations are via securitization and the balance via a select number of P&A partners. But it will take several years to achieve this objective. Touching on the balance sheet and outlook on Slide 17. The group has net corporate debt of $43.2 million at 31 December versus $36.8 million 12 months ago. Our corporate leverage stands at 0.4x, and our total leverage, including the lease portfolio, stands at 0.7x. Cash conversion came in at 106% of EBITDA. Looking forward, we previously indicated that we expected the changes to our insurance product portfolio and the introduction of securitization to impact our FY '20 numbers by $15 million to $20 million. Whilst the implementation of securitization has taken longer than planned, it's fair to say that the impact of insurance has been worse than we expected. As a result of this, we expect the impact to be at the top end of the range previously provided, and we are therefore forecasting FY '20 underlying NPAT to be in the range of $48 million to $51 million. So at an NPATA level, that guidance range translates to $55 million to $58 million. I'll now hand back to Robbie.

Thanks, Kevin. If you could turn to Slide #19, please? We're often asked in these presentations and in our one-on-one meetings with investors how we protect and grow our customer base and how we're able to increase the lifetime value of individual customers. And I think our ability to do this is obviously even more important in the environment that we currently find ourselves in, where margins on traditional low value-add products are somewhat under threat. Our approach is to add customers to what is already a strong and very sticky core book, by bringing companies to outsourcing for the first time and, of course, by taking market share from others where possible and profitable, as I said. We then develop those relationships by becoming more embedded with the customer, both through the service quality we offer but also because of the number of product touch points that we create with those customers over the last cycle. We are constantly actively increasing the number of product touch points by growing our offering. That's through the evolution of existing products. It's through the creation of new products in-house and our innovation capability has really been ramped up, and more on that a little bit later in the presentation. And thirdly, as I said, by entering to ventures with other parties that allows to broaden the span of products offered to our customers in our niche areas. So we both try to grow the share of our potential customer pool as any business tries to do, but as importantly, we try and grow the spend that we -- of each customer that we do have on the book by adding products and services. So it's about growing our share of customer wallet as well as growing the actual size of that wallet by bringing new products to the market. And I'm going to spend a little bit of time sharing some data points around that with you today, as has previously been asked of us. So on Slide 20, let's first look at our customer retention rates. Happy to report that over the last 12 months, we retained 100% of our top 100 tool-of-trade customers, and only lost 2 top 100 novated customers, one of which was in the top 30; and the other one, way below that. So very strong customer retention in our business. Amongst our top 20 customers, the average length of relationships is 13 years in our business. That's sometimes through 5 or 6 tender cycles or renewal cycles, depending on the length of those contracts. And so if all we could do was reduce the price every time we try to win that tender again, we wouldn't be sitting here today. We just couldn't -- that's not a sustainable model. So for us, it's very about -- very much about adding value to those customers, understanding their unique needs, providing solutions that benefits them and cater to those needs. And so building stickier, more profitable relationships with those customers but which are also significantly more beneficial to those customers. And that's why they're sticking in our book. So -- but I suppose the good news of that graph on the top right-hand side of that page is also that in that top 20, there's some newer customers in there. So you can see our ability to win sizable customers on a regular basis continues as well. They're not all old customers that have been there for a long time. So why are the customers sticky in our business? What is it that we do to make them sticky? And I think it's a combination of factors that we work very constructively with those customers on to achieve this outcome. And I suppose the ticket to the game before we even start the conversation is product and service quality. What was unique products in the market a decade ago from the fleet management perspective is just the basic ticket to a game that we have to provide today. And often, we see some of our competitors actually letting themselves down on that basic stuff, and that's often why customers start to go back to market. So a continued focus on our business to do the basics right, that's the foundation block. And then on top of that, the ability to add tailored solutions to our customer-specific needs often bespoke solutions, but those bespoke solutions are very often technology-driven. So they don't drive inefficiencies. They actually drive efficiency, both in our business and for the customers. And as we innovate, we add layers to those bespoke solutions. So the end result is that the customer interacts with us through an ever-increasing number of product touch points through each vehicle's life cycles, gets used to those services, values them and has very little reason to look elsewhere for other providers. I think that strong relationship-building ethos has helped us both be successful in both the retender space but also a lot of customers don't even bother going to market and rather come directly to us. We talk about what we're going to do for them in the next cycle of the contract. We agree a set of parameters and we get on with it. And the obvious question is, well, do you drop your rates every time that happens in order to hold them. And pleasingly, I'm really happy to say that in the very vast majority of cases, it's not about -- that it's actually about value-add. I can't say 100% of cases. Yes, there was customers that come for a price chip and sometimes, strategically, it's worth doing. But in a very, very, very vast majority of cases, it's about value-add and product additions as customers, which adds value to them. So it's about us selling a value proposition rather than a price proposition in short. So protecting our customer base, we are very good at. We pride ourselves on being very good at it, and we have done a really great job there. But the second growth enabler is, how do we increase that customer base, how do we bring new customers to the table and how do we increase product -- customer and product penetration. So I want to talk a little bit about that on Slide 21, if I can. And again, we've had numerous requests over the years to provide a little more hard data on some of these metrics because we often sit and talk about how our business is turning into much more of an annuity-style business, and as investors, you want to see the proof of the stickiness of that and how you can value that, those income streams. So this is the start of a journey to try and give you more information on that front and share the details. So on Slide 21. So we've stepped up the rate of new product launches massively in the last 5 or 6 years. These are increasingly technology-driven. And so we work hard to bring new solutions to the market on a constant basis. These are high value-add products. They're proprietary. They're less margin-sensitive because they're proprietary and are much more sticky, therefore, in our client base. They obviously also helped to strengthen customer relationships, as I said. So a few data points on that penetration. Worth noting that several hundred of our customers are both tool-of-trade and novated accounts in our business. That's an important metric that we measure, and we're always trying to cross-sell more and more to those customers. We're consistently thinking about ways to realign our business development teams and optimize that cross-sell opportunity. So that's a constant metric we measure. In the Australian and New Zealand tool-of-trade business, 36% of our customers take up 2 or more products, and that's, of course, in addition to the multiple product touch points that we routinely sell them with basic fleet management. So there'd be north of a dozen products in that basic fleet management suite before we start talking about these additional products. So that -- those traditional products are in addition to those basic products. If we look at our top 40 customers, that percentage rises to 75%, with over 1/3 taking 3 or more products in that space. So again, a metric we measure, and that's growing. A lot of those products have only recently come to market, like Inspect365 and eStart. So we're still pretty early on the journey and making really good strides. And then, of course, the products that we're able to sell from those investments we've made in start-ups, such as DingGo and Carly add to that suite. And so those are double opportunities for us. The opportunity is to sell their product into our customer base, but it's also, in some cases, opportunity to increase the penetration of those businesses through our customers. So it's kind of a double win. We're early in those days, but both of those products have gone national in the last few weeks. So both Carly and DingGo will be national. And so we're able to sell it to our big corporate and government customers. We're seeing interest from our big corporate and government customers in those products. And so that will be a good win for us. In the U.K., the penetration percentages are even higher. More than 80% of our sole supply corporate customers take up multiple products in our U.K. business. So that is -- that's clearly a stat that we're very happy with. This penetration trend will continue. We continue to bring a widening range of product to the market. That does create more stickiness and does help us grow our base. So in conclusion, the combination of a quality-growing customer base with the diversification and increasing penetration of our products establishes what we think is a very secure growth path for our product suite. Turning now to Slide 22 for a summary of the presentation. Again, a tale of 2 worlds for us, I think. A positive outlook for our Corporate business. It's a little more difficult on the Consumer front, lots of external factors driving that. But we think the diversity of our business allows us to manage that really well and emerge as a leader in our space. We continue to sign up new customers in both ends of the business. We're growing offering in both ends of the business. And so we think we'll come out the other side, as I say, much better. Lots of groundwork has been done to improve conversion in the Consumer business when we see that sentiment turn. So we've put the building blocks in place, and we think once that sentiment starts to turn, we'll ramp conversion up pretty strongly. The depressed residual values we saw in the U.K. seems to be passing. We're very busy operationally in that market, and our new business pipeline continues to look very healthy. In New Zealand, we picked up, as I said, that marquee customer, and that's creating a lot of interest for us. So overall, lots of business development opportunity in the business. The objective remains for us to build growth on what is a very sticky customer base. We're obviously doing that by maintaining our above-market share win rates and by achieving greater penetration for a widening high value-add -- set of value-add products and services. We've again stepped up our tech-driven product launches during the period. And our most recent investments, as I said, in DingGo and Carly are growing very nicely indeed. In terms of inorganic growth, I think the current industry conditions continue to favor consolidation. As always, we aim to be part of that value-creating M&A activity, and we are consistently, obviously, evaluating those opportunities. As I said earlier, have experienced some margin pressure on the insurance front. That certainly has come through in the numbers. But we are promoting a new mix of products in that space, including that annuity-style product. It is in its early stages, so I can't -- I don't have enough certainty on exactly where that's all going to land, but it's absolutely going in the right direction. And again, in the long term, we think it's absolutely the right strategy. In the short term, as Kevin highlighted, we think our year-end will end up at the top end of the range we highlighted in our F '20 outlook statement because of those challenges. But I think on the positive front, all the initiatives I've talked a little bit about and announced has put us in a much stronger position for the medium and long term, and certainly, we're not immune to the headwinds that we're going through at the moment. But in the end, in the long term for us, it's about making sure the building blocks are in place to reduce our sensitivity to those kind of headwinds. And I think we're doing a good job on that front. Our increasing range of products, as I said, is adding to that sustainable growth, and I personally am very excited about some of those products and where that's going for growth in the future and in the shared economy. As I said, I think there is some change happening in our industry. I think there's no doubt about that. The environment is somewhat tough, but for us, that's an opportunity to then improve, come out better and come out leading. And I think we've positioned ourselves with the diversification of our business really well to do that. We're sticking to our guns. We're sticking to our strategy. We're working hard to counter some of those external forces. And we will come out in a better place. So with our strong customer base, the growth in our products offering and a strong and stable leadership team, I think we will emerge a much stronger business and leading the industry. That really is it for me on the formal presentation. Happy to take any questions now, and thank you again for your time on what's a very busy day.

[Operator Instructions] Your first question comes from the line of Tim Lawson from Macquarie.

Thanks for the additional data you're providing. It should be helpful. And also just on the fleet mix and the value mix of any Holden vehicles. Just like to know what that sort of exposure is.

Thanks for that question, Tim. I was pondering this morning whether to go straight into that because it's probably the elephant in the room for everybody was to wait for the question because it really isn't a massive issue in our business, but it's worth launching. We have an uncanny knack for deciding to talk to the market on days when motor manufacturers make big decisions in their world. The day we opened our book to list SG Fleet, Toyota decided to pull out of manufacturing in the country an hour before we opened our book build. And the credit wholesale panic, which never materialized, and I think that's exactly what's going to happen with Holden. I think while it's a very sad day for the automotive industry in Australia, and let's recognize that it's really part of Australian automotive tradition and it's really sad to see them go, I think, unfortunately, the writing has been on the wall for a long time. Pretty much from the time they decided to cease manufacturing in 2017, it became clear that it would be a struggle to see how they'd find their new feet in the market. And while I can't say any of us expected them to leave this rapidly, certainly, we've all been planning for the demise of them as a major player in the market. Let me give you some statistics. When we bought our first business from the CBA in 2004, Holden, was 40% of the fleet, Ford was another 40% of the fleet and the rest made up about 20%. Today -- when Holden made their decision in 2017 to stop manufacturing, they were 16-odd percent of the fleet, call me a liar, 4% or 2%, but that's roughly the number. And that -- those numbers then were roughly what the car park in Australia was. So it's pretty much 40% of the market, 15% or 16% of the market. So we mirrored that. Today, they're not -- it's not 2% of our fleet. To give you a feel for what we've got in the pipeline, we did 23 in November and 12 in December. That's sort of the measure of where the brand has got to sadly. We've been managing residual value risk on that product since about 2017. What we've seen historically -- and I'm not going to make predictions on residual value as I always tell you, but I can share historic experience. When Mitsubishi pulled out of the market, and again, we seem to have a knack for timing, they pulled out of the market 3 days before we bought our first business from the CBA quite literally, we made a lot of money on Mitsubishi over the years and did till about 2 or 3 years ago as they ran out because there's a scarcity. So there's a supply-demand issue that arises, and so the values actually go up on the second [ end one ]. And we've seen the same as the demise of every vehicle manufacturer has happened. So we don't think we've got any risk on our book. We're certainly not doing very many of them. The government was the major buyer of them in the last 7 or 8 years in this market anyway. And when the manufacturing decision was made, the government stopped procuring them because they didn't have a vehicle to procure. So we think there's very little risk on the book. But that's not to minimize that it's a massive change kind of to the industry.

Okay. That's very helpful. So was it just -- you're saying less than 2% of the current book. Is that what you said?

Yes. Yes. Significantly less than 2%.