Avis Budget Group, Inc. Price & Performance (CAR)

Good morning, everyone, and thanks for joining us today for our CAR Group H1 FY twenty twenty five results conference call. This morning, we've got and myself here, really, and we're going to run you through the presentation in around thirty minutes. We'll also read out the slide numbers like we usually do. And after that, we'll jump into Q and A session. In the second half of the call with the rest of the team that's either here with us in the room or on the call at the moment. So here with us, we've got Paul Marlow, who runs Carsales here in Australia. SB Kim is on the line. SB runs Encar in South Korea. David McMin runs Trader Interactive in The United States, and he's also on the call. Eduardo Pacific, Eduardo runs with Boaters in Brazil. Ines Quitete, you don't probably met before. Ines runs Chile Auto in Chile. And Scully's here as well, Head of Investor Relations with us great start to the year as a group. This half's result really builds on the consistent growth that we've delivered over the past many years now and reflects the strength of our globally diverse business model and the value prop that we have for our customers Proform results on the left side of the page there really are the best reflection of the underlying performance of the company as they they normalize for recent exit of our Australian tire business.

And in constant currency there, you can see we've delivered 12% growth in pro form a revenue and 12% growth in pro form a EBITDA, which an excellent outcome. We've maintained strong EBITDA margin performance of 55%. Adjusted NPAT was up 4% in constant currency as well, which was a great result. Turning to Slide six, you can see here the [indiscernible] the execution of our strategy to remove the friction points from the vehicle transaction process, you can We're investing in a new technology and product, which really helps position as well to continue delivering long term growth in all of our key markets. [indiscernible] continue to see excellent engagement in our marketplaces across the globe. To demonstrate the strength of our marketplace leadership positions in each of the categories. And the resilience of our our diversified business model. [indiscernible] the first half FY 'twenty four, which reflects the strong competitive position that we have These tell me stock levels that helped us deliver good uplifting in-depth penetration across all of our businesses. And customers are really looking to seek to move inventory and differentiate their vehicles online. Growing number of subscriber dealers of 49,000 really highlights the strength of the value prop we have.

And for our dealers and high interest rate environment that we're even in a higher interest rate environment that we're in at the moment. We delivered 11,000,000 leads to dealers, which was an increase of around 1,500,000 leads versus PCP and that really reflects the growth in leads across Australia, Brazil and South Korea off offset by some softer demand in The United States for recreational vehicles. On to Slide eight, and you can see here the breadth of our retail brands that we operate with good diversification across the geographies and verticals that we're in. As we've exited the tire business, we've taken tire sales out of the Australian portfolio. And we've also added some small data business that we've got in LatAm and in South Korea. Part of our strategy here for many years has been about invest large high growth markets where we can leverage our intellectual property and and our techs to create long term sustainable value to shareholders. And we've been highly effective at that with our international investments over many years with more to come in the future. [indiscernible] you guys have seen this before, it remains consistent. Now our teams across the globe, they're doing an exceptional job in delivering on that purpose.

Which is to make buying and selling a great experience. And that helps to create the number one digital marketplaces for vehicles around the world that we're that we're chasing in our vision. So look, to deliver on our purpose our first focus area is to simplify everything about buying and selling vehicles. And as we remove friction points we open up new opportunities to monetize and extend our role in vehicle buying and selling and that journey around all that. So great example of this is Australian example where we're making excellent progress in C2C payments. And that initiative is going really well for us and has huge potential, opens up many new opportunities in our other large addressable international markets as well. Over time. And look, I'll come back to that a little bit later in the presentation Our second focus area is to continue investing in new opportunities, which which are going to really drive growth and reduce risk of disruption longer term. This includes growing organically with the in house product development innovation stuff that we do launching new verticals like marinas in The United States as you've seen us do. We're also continuing to step up on our focus with AI and to enhance our consumer experience to really drive efficiencies where and we're making good progress here.

But again, I'll talk about a little bit later in the press And complementing all that organic growth, Hardest strategy for many years is [indiscernible] about investing in large high growth markets where we can leverage our IP and our technology to create long term [indiscernible] shareholders, as I've just mentioned before, and we've been highly effective at that with The U. S. Brazil and South Korean investments. Slide 10, if I won't spend any time on this, just say that these are our strategic priorities. And to be clear where they are. We've made great progress with each. And what I'll now do is just run you through each of those bullet points and what we've done. So just looking at Slide 11, and and delivering a CAR and engaged audience to our customers is really really critical to the success of our company. And we've maintained or grown our very strong market leadership in our four key markets, as you can see here on the left. Our strong market positions driven by the compelling combination of audience, technology and data on the right side of the slide. And it just really showcases the progress that we're making in Brazil there.

We've continued to grow our lead against the number two market [indiscernible] And in December, our traffic was actually four times greater than our nearest vertical peer. But historically, we've had a very strong master ship in our two largest cities in Capalaba and Rio, but in the last four years, we've increased our focus on growing our market share in Tier two cities, particularly in those ones around the Southeast and Northeast of Brazil. And you can see the investment continues to pay off through the outsized growth we're seeing in achieving lead volume expansion in those national regions. On to Slide 12, and it looks looking at the left side of the slide there, we've continued to make great progress in digitizing transactions across each of our markets. One of the highlights has been the rollout of new seamless finance integration with our partner Santander in Brazil. This improved experience is improved experience for for our customers, but better credit availability in Brazil has also helped deliver the 34% uplift in auto finance revenue in the first half of [indiscernible] the last twelve months and the partnership stand down remains incredibly strong. Looking at the right side of the slide there with depth and we've seen great production of of our depth products across the world as dealers look to differentiate their stock in a more challenging market environment.

In Korea, which is what's on that side of the slide there, they're making great progress around Guaranty and penetration. As most of you can on the call know, the product provides exceptional value for dealers through improving their gross margin and reducing the type of sell by providing increased is in the vehicle. So growth has been supported by the continued rollout of those inspection centers that we have and increasing utilization of existing centers through things like extending operating hours and the use of AOI And that strategy is really helping us to underpin our growth [indiscernible] to be sort of circa 70% of all of our inventory And we're also working on new guaranteed products as well, which is going to help us with that that ambition. [indiscernible] and C2C payments, yes, we talked about this in August, but really helps provide us our consumers with a more secure option the transfer of funds between private buyers and private sellers. And the recent launch, this product has gone really, really well for us And we've seen significant uptake from buyers and sellers using payments as a solution to easily and securely transact We've already facilitated very close to $30,000,000 worth of with the payments.

And we launched the products for the late last Calendly And as CAR as payments go, they really open up significant opportunities for that ownership phase of buying and the journey that people go on If we can get that right, there's huge upside potential for us from a financial perspective. A really good live example around that probably to mention is just the insurance deal that we've done recently with a large insurer. Where they're targeting buyers are really in the pointy end of the transaction funnel here when they're driving the car off the driveway and through our payment solution as you can imagine, we're able to offer a very targeted audience for them. So look, the technology has been built with the capability to roll it out globally, and we believe Scott really great potential in our other markets as well. Just looking at Slide 14, Through the acquisition of Trader Interactive, media has been a significant opportunity that we've been talking about And we think it's got great long term, great potential, particularly given the business hasn't had much investment in this area prior to our commitment to the company a couple of years ago and it's been really, really in new talent, in products and technology and and the stronger go to market approach that we've had to really pay off for us.

And I think we're only really scratching the surface here with what we've achieved over the last six months. And plenty of upside to come over the coming years, particularly as the mark continues to improve in The United States. So just looking at Slide 15 and talking about future horizons and we're really amplifying our focus on AI across each of our businesses. And this gives you a little bit of a snapshot And again, a group level, we're looking at ways to improve improve the search experience for consumers and the beginning to utilize natural language search options across our sites. In webborders, we've developed an AI powered agent to engage with consumers to pre qualified leads really and that's delivering better lead interaction with our customers and resulting in a much more qualified lead being delivered to our to our dealer, which is important to us. At Ekaar, we've put in place an AI assisted [indiscernible] support for Encar Home, which is improving consumer experience through reducing the wait times and enabling twenty four hour operation of our home delivery product that we've got there. At Trader Interactive, we've launched an AI spam and fraud lead blocker.

Which similar to what we have here in Australia, And that's blocking thousands of leads and fraudulent messages and it's building trust confidence and demonstrates our value to private sellers through high quality leads and so across the group, we're using AI to detect branding, and that could result in lead leakage. And lost value attribution, which is important that we maintain that. So expect to say us continue leveraging our retirement and delivering enhanced consumer experience process efficiency and really try to improve those trust and safety elements. Onto Slide 16, and look, I mean, you've seen us showcase this before, but the sheer number of growth levers that we've got, I'm really pleased with. Traditional growth drivers continue to deliver good growth and our new growth drivers are contributing more and more over time. We operate large large markets with attractive attributes and our current penetration is still under 10%, which gives us significant long term growth opportunities in each market. Look, with that, I'll hand over to Will to talk to you about the financials. Thanks, Cam, and good morning, everyone. The group delivered another great result first half of FY twenty twenty five with another half of double digit revenue and earnings growth And importantly, we continue to make great progress from a strategic perspective.

As you can see on Slide 18, the growth we've achieved across all segments. Latin America and Asia are clearly the standout performers from a growth perspective. But we were really pleased with the performance of the Australian and North American business particularly given the impact of higher interest rates in those markets Cam is going to go into more detail on each of the segments later in the presentation. Turning to Slide 19. Now the purpose of this slide is to talk to the items below EBITDA in a little more detail. So moving to depreciation and amortization. This largely comprises costs associated with software development, leases and building fit outs, The increase you can see here in the period largely reflects the digital investment we're making in software development. And this has been key in helping us to sustain double digit revenue growth. Some of the key initiatives we're working on are things like C2C payments, in Australia that CAR mention before the wallet product in Brazil, which has been a great success and also our new Bahrain On finance CAR, there was a small decrease, which reflects largely similar debt and interest rate levels between periods. On tax.

The group's effective tax rate in the first half was similar to the same half in FY 'twenty four at around 18%. This reflects the corporate tax rates in each of our jurisdictions in Canada, where we're paying minimal tax And this is due to the fact that we get deductions for purchase price intangible amortization and also we yet to utilize prior period tax losses. Adjusted net profit of $177,000,000 great to see that up 12% on a constant currency basis. And if this combined with our strong free cash flow generation, that supported the Board's decision to declare a dividend, of $0.385 per share, which is up 12% on PCB. The group's adjusted results differ from reported results which we show at the bottom of the page. And that's due to excluding one off or non cash items. And in the first half, it's mainly reflected the non cash amortization of intangibles at one off costs associated with our exit of the Australian tires business. We've got a detailed reconciliation in the appendix. Moving on to Slide 20, And it's been another great margin performance from the business with improved EBITDA margins at 55%, can see on the right hand side of the page the impact of our decision to exit the tire business It's resulted in a 3% uplift in EBITDA margins.

Excluding Tyres, our margins were consistent between periods We've got great operating leverage in the business. And we continue to maintain our disciplined focus around capital allocation and cost management. We're investing some of this operating leverage back into the future growth of the business. On a segment basis, it's great to see three of our segments all growing their margins in Australia, North America and Latin America. And then in Asia, think there was a small decline in margins as we've opened new branches and continue to invest in marketing our dealer direct product as credit conditions continue to improve in that space. Moving on to Slide 21 now. Our asset light business model consistently generates great free cash flows and this half was no exception with another good over the last six months, The balance sheet is in good shape with leverage at 1.8x net debt to EBITDA. Debt levels were slightly higher than June 2020 to the FX impact that we had on our U. S. Denominated debt, the USPP facilities that we have, On the right hand side of the page, you can see that we also continue to invest in new products [indiscernible] similar to what I mentioned before, and this is really reflected in our CapEx spend on the right hand side.

It's remained consistent as a percentage of revenue over the last Then on to Slide 22, which is our outlook And look after an excellent first half, it's pleasing to reiterate our group outlook [indiscernible] which is we expect to deliver good growth in pro form a revenue pro form a EBITDA and adjusted NPAT in FY 2025. On a constant currency basis. In terms of margins, with some reinvestment into the business, we expect to see similar pro form a group EBITDA margin in FY 2025. And then some observations on each market. First to Australia, In dealer, we expect to deliver good growth in dealer revenue in FY 2025. Which is supported by growth in lead volumes depth In private, we anticipate solid revenue growth supported by dynamic pricing optimization and installer growth.

In media, we expect good revenue growth supported by the continued expansion of our native ad products programmatic capability and non automotive diversification, And then looking at our international businesses, and all of these, again, are on a constant currency basis. In North America, we expect solid growth in revenue and good growth in EBIT in FY 2025. Changing wording on revenue growth was a marginal call. As the business is performing really well as you can see in the first half results. Reflects our decision to slightly delay our annual price rise until peak season for our recreational verticals given these markets have been a bit more challenging. But we will do a price rise before the end of the second half of the financial year. In LatAm, we expect strong growth in revenue and strong growth in EBITDA in FY 2025. And in Asia, we expect good growth in revenue and solid growth in EBITDA in FY And now I'll hand back to Cam to talk further about our operational and financial performance in each market.

Thanks, Will. Look, before we give you all the financial details, I just want to if it's useful to provide a bit of context around the operating environment in each of our markets. So we'll start with Slide Slide 24. And the automotive industry in Australia continues to be robust and reflected by the strong audience engagement and demand [indiscernible] One of the things that we're continuing to see is Compass becoming a little bit more price sensitive. In the last twelve months to twenty four months, interest rates have remained elevated And that's really reflected in the purchasing intent chart on the top left hand side. Of the slide there, which shows an increase in preference for used cars versus new cars. As a result of that, our car lead volumes have continued to grow nicely over the last six months. There's also some interesting data around EV preferences on that slide as well. You can see on the right hand side. Shows a consistent reduction in consumer consideration for EV And that goes all the way back to really COVID And probably, I think it's just a market normalizing [indiscernible] they have been in other markets. So 30%, that's probably not too bad.

But just the mining preference has been interesting. Pricing of used cars is below peak levels, but still well above pre COVID levels. And you can see on the chart here, the decline in in prices moderated more recently and given pretty slow and steady. Deals have been able to make and retain pretty good gross margins. And time still has kicked up a little bit marginally over the over the last six months, which has been driven by a slight slowing in the private markets after a very point in the years, And maybe I'll just Slide '25, and it's been a great start to FY '25 for the Australian business with revenue and EBITDA growth of 9% supported by continued strength of our marketplace audience metrics, [indiscernible] sub segment there and deal growth of 10% was driven by good demand for used cars, resulting in an increase in lead volumes yield and increased penetration of debt product. Pleasing to see our depth penetration continuing to deliver excellent value in a market with more inventory at the market. So private sell off continue to deliver good outcomes for private sellers here, maintained strong market share in what is a flat private market.

We've also continued to grow our private yield through dynamic pricing optimization and continuing to [indiscernible] of our instant offer product too. Media revenue grew 10% and that's indicative of a competitive new car market. And that's been supported by the significant investments we've made in our media business to deliver more innovative and personalized advertising solutions And then DRS, I mean, digital data services, I mean, that's just 5% up and as a result of our Red Book business. Slide 26. And again, for talking about the financials, just reflect on some of the the things highlighted in the market data here on this slide. And as you can on the left hand side of the slide, RBM passport registration for both new and used units. In these recreational verticals in the last two years, they've been challenging from a volume perspective, which is why we're really pleased to the continued growth that we've delivered in each of these verticals over that same timeframe. And also gives us confidence in our growth potential, particularly as these markets emerge from this cyclical downturn Audience metrics on the right hand side of the slide demonstrates that the consumer traffic to our recreational sites has most certainly stabilized.

And the truck and equipment markets are been very robust, which highlights the benefits of having a diversified portfolio, I guess, of industries across our business. Turning to Slide 27 now, and it's been an [indiscernible] revenue and earnings growth of 9%. Despite the challenging macro backdrop in our recreational verticals So customer numbers here have remained consistent since June, which demonstrates value proposition Growth continues to come from multiple sources This includes an uplift in premium select transactions yield increases, dynamic pricing and growth in media revenue. We'll also continue to invest in our value proposition for dealers which means that the business is really very well positioned to drive more growth once market conditions improve over time. On to Slide 28 and Brazil And I'll again make some observations here. Interest rates in Brazil, you can see there on the top left, reduced in the first half of the calendar year, which which helped drive increased credit availability for vehicles. There have been a couple of recent interest rate increases, but what we haven't today seen any real impact on vehicle trading as a result of those. Brazilian economy is strong with unemployment as low as 6% and consumer confidence remaining high.

And Brazilian auto market is also strong with we did, what, 7,700,000 new and used car transactions in the past half, which provides significant opportunity for growth going forward. Slide 29, [indiscernible] And again delivered another outstanding result with is a credit to the teams in LatAm. Revenue growth 30% and EBITDA growth 34% in constant currency, and that's largely reflecting the performance of Webb Motors. National expansion strategy I mentioned earlier and that's continued to deliver excellent growth through adding new dealers, growing our audience and increasing private seller volumes with We've observed the continued development of our digital advertising market in Brazil and still much less mature than the Australian market, which produces really well going forward. Average revenue per dealer is increasing and that's through increased premium product penetration and price rises. The new wallet loyalty program that many of you are familiar with That's gone exceptionally well over the last six months and accelerated we've seen accelerated adoption there of premium products such as debt CRM inspections and Envision three sixty all being helped by Wallet. [indiscernible] And media is also a key growth driver for that business now too. So results also exclude the contribution of Webona's CAR adjacent market subs being Cartina Loop CAR they've expanded rapidly over the last six months to.

Chile Auto's also a good mention, they've had an excellent half. We with strong growth in revenue and earnings too. On to Slide 30 and just against some observations in Korea CAR. As the Korean used car transactions have grown over the past three calendar years, while new car transactions have declined Interest rates in Korea are in a low 3% and the remainder is quite a long period of time now. And being very stable, which is really a testament to such a strong and stable economy. Look, over the last three years, I guess, yes, there's been a significant increase in the size of the export market increase, too, which estimated to be worth about US5 billion dollars CAR I think that really presents a some future opportunity for growth possibly as well. Looking at the numbers on Slide 31 and clearly supported by the macro backdrop But Encar had an excellent start of the year with revenue and EBITDA up 1512% respectively on a constant currency basis We added four new branches over the last six months and extended our operating hours in certain inspection centers to guarantee. And And that's really supported another really nice uplift there, but also it's modest with the price rise we've done recently too.

So revenue growth supported by that 10% price rise you've mentioned that was done from August and takes effect gradually over time. Enercare continues to make really strong progress on its mission to facilitate the online car buying transactions. And that's reflected in the strong growth. You can see on the slide there talking about Encar home digital retailing services. [indiscernible] Teal Drinks also is another one to talk to. With their continued improvement there. The team's investing more in that product in half two and that's also going to include uplift in some marketing as we ramp up ramp up in that space. On to Slide 32, and just talking about short term shareholder value, and this really summarizes the group's performance here. So look, we've delivered another excellent half in growth with revenue and earnings. Both are double digit. We've got multiple growth levers across the group, which gives us confidence in our ability to keep growing as a business model in the future. We've made significant progress around some of our strategic things that we're focused on C2C payments, talked about like that, got great opportunities for us in the future. Making great progress in rolling out our global media strategy, which we talked to our trade of interest has really delivered a resilient performance.

And is really in a great position to grow further once the market conditions in The U. S. Get a little bit better. We've bought Market leadership has been fantastic and there's great opportunities ahead for us in that business too. And Korea also had a great start to the year and potential to grow further in guaranteed dealer direct and in car homes. And finally, we continue to build on our market leadership positions building competitive advantage. We remain really focused on removing those friction points in buying and selling, which is creating new monetization opportunities for us. Some of which we talked about. And we know we've got great opportunity in the products that we're bringing to market there. Also focused on growing acquisition and take rates here over time. We're really happy with the rate of IP and tech that we're leveraging across all these competencies and the different markets that we're in with more to come. And And finally, you heard from Will, we're a great generator of cash and with a very strong balance sheet. And you'll see us continue to make that a feature of the business. And but we're also investing in future growth and paying the track as you've given us at the same time.

So with that, look, I'll hand over to Thank you. Your first question comes from Eric Choi from Berenjelly. Please go ahead.

Hi, good morning, team. I was wondering if I could do three, maybe one for Cam, one for David, one for Eduardo. Just Just for campus, just on price increases, As a general statement, I think you guys try and maintain dealer goodwill rather than pushing the envelope on price increases. So if I look at Australia, you guys do 4% to 5% and the dealer feedback is you guys probably could do a lot more I'm just wondering if the same logic is applying you in The U. S. Like are you guys just trying to support the dealers while the macro is a bit soft and it's not necessarily that you can't push up prices, And if that's the case, then there isn't really any reason why the 6% to 7% price increases you guys used to do for TI. Can't continue. That's the first. [indiscernible] Thanks, Eric, for the question. And yes, your logic is sound. So we run the business, as you know, mate, for the long term, not the short term. And dealers are our core customers. So So when it comes to price, we do think about market conditions. We do think about the value that we're adding to the dealer network.

And we try to strike a balance. And so the market clearly in The U. S. Has been challenging in terms of where they are. They're out of season at the moment as well. They're coming into season. And so it's been about making sure that we're we're acting responsibly and not pushing too hard unnecessarily. So that's definitely a part of our thinking when it comes to price, whether it's in The U. S. Australia or anywhere. So that's probably the response to the first question. If you got another one?

And I'm guessing you deliberately didn't want to comment on Quantum A Camp. I'm just going because the take rating TI still remains low. So is there any reason why the quantum should accelerate? [indiscernible] there's no reason Got you. Maybe one for David. [indiscernible] Just looking at guidance for The U. S, it feels like it was a pretty line ball call between sticking with good moving to solid, I reckon maybe one or two percentage points of difference. So if FY 2025 almost made it to good with uncooperative macro is it fair that good U. S. Growth from FY '26 is possibility. Dave, you should do that, mate. Yes. Look, good question, Eric. [indiscernible] It really was a line board decision. I think Cam articulated very well in terms of the rate increase and the deferral of the timing. In terms of how we think about the world, clearly, we think about growing our business double digit revenue and double digit profit every single year and we set a plan up accordingly, if you like and If I think about the things that are running through the business at the moment, we just launched a brand new RV retail platform, which is which is really positive and pretty much across all metrics is driven positive results.

So that's going to be really good for our consumers as well as our dealers. We just attached CAR to our Premium Select so we can now optimize that Premium selects, if you like, an auto pick. So that's great for dealers and really help them get more leads, which is what the game is all about. We launched a business known as Zemara CAR, which is our regional agency business, which is a real opportunity for us to utilize our audience, which is clearly our strength and then find people off portal, whether it's for other agents dealer community. So that's really exciting and bodes really well for the future. We see strong growth in partnerships, particularly surrounding an F and I, so more to come there. As you've already as it's well documented, I mean, with marine, so we've seen really positive growth with SEO as that improves in SEM. So traffic is positive, leads are strong. And what we're doing right now is converting dealers across to our cost per lead model. We should start to see that make a contribution in 2026 and then materially in 2027. So all in all, look, I feel good about whether the plan for the half and really FY20 and those goals for the future.

Nice one. Thanks, David. I'll put in the last one for Just on LatAm revenue growth, looks like it accelerated to 30% from the mid-20s and I assume Web Motors must have driven the bulk of this even despite the rate hikes. I'm just if you take a step back, obviously, when you guys lifted the stake to 70%, you guys were looking to implement more things like media, finance and wallet. I'm just wondering does that acceleration reflect those initiatives? Now? And if that's the case, like is this accelerated revenue growth more of the baseline? Rather than what what we kind of saw from WebMotors through history.

Thanks, Erik, for the question. Yes, you were right. I think we have very important dealers [indiscernible] It's running very well. We are exchanging a lot of things It's media financing, products for dealers, experience for the private seller. So across the board, we have a full collaboration with the the countries and with CAR Group. So I think they know very well how to add value for a business and how to make this exchange this knowledge exchange. So it's one of the key key parts of our growth. The other one, of course, is the partnership with Saint Anaire I'm going to say again about Skar Group CAR it's subject to what Motors car group and CAR Anaer are working very well together. The collaboration is in a very high level. So it's another thing. And the third one is it was the execution of the team that it was a very good half in terms of execution. Looking ahead, about the growth, what I can say is that the momentum for sure is excellent and we will have another strong second half I don't have doubts about this. But of course, continue to grow as at 25% becomes harder as the base grows particularly in our small high growth business as Cartan and Lupe CAR.

But I'm very confident that in our ability of the team to keep growing strongly. Thanks, Eduardo. My pleasure.

Thank you. Your next question comes from Kane Hannon from Goldman. Please go ahead.

Maybe talk a little bit more about, I suppose, some of the dealer trends you're seeing across the TI verticals.

You said it's basically flat at group level in the last six months, but in fact things have taken a bit of a turn for the worse post the AGM where you reiterated [indiscernible] talk a little bit more about what we're seeing across the verticals? [indiscernible] I presume it's me again. So Just Just in terms of customer numbers, look, we've said they've held up in what has been a tough market, Kain. So very pleased with that. And really, those numbers do include Camping World. Okay? So we have seen is we've seen some deterioration at the lower level of customers across the board and as well as some of our non CAR So pleased to be holding the number. And with with an improvement in the macro environment, the market over here, hopefully, we'll start to see that start growing again in the next six months to the next eighteen months. So sort of headline numbers saying that in the 2Q, did were there any noticeable difference to what came during the first quarter?

Any noticeable difference in what, Mains? Sorry?

In dealer numbers, just obviously, regarding the guidance of the AGM deferring the price rise because of some macro uncertainty. Just trying to work out if things took a turn for the worse at all 2Q relative to the first quarter?

No, look, I think dealers are steady. And as Cam sort of pointed out earlier, the reason why we moved to Thrice Rise was because of all those things that we talked about that we consider in terms of the market, dealers the value we drive to dealers. And we just thought it was prudent to sort of line up out of decision around price with the recreation industry and when it comes on season.

Yes, that's helpful. Maybe on NCAR, want to think about the revenue outlook into the second half.

Think the timing of the guaranteed price rises means it's going to be obviously more significant in the second half.

So is there anything I should think about that slows that rate of revenue growth second half versus first half?

Yes. I think given that we raised the price wise for the guarantee July and August.

In CY24. I think the effect in the second half will be pretty much similar to the first half.

Other than that, I mean, would it be the potential for the second half revenue growth would be pretty much similar that have been leading the revenue growth in first half.

We highly rely on the guarantee volume as well as price as well as home services and Dilo Direct partially as well. So the premium we would like to looking at that as well. And then lastly, just payments in Australia. And it looks on those charts that it did 15,000,000 transactions in January, not growing very strongly. What does that need to get to? What do you think that could get to across the course of this year before you want to I suppose really monetize and more explicitly sort of launch into some of the other things you've spoken about?

Okay. Yes, Karen, thanks for that. I mean, the early feedback that we've had from the product has been excellent. That's from the verbatims that we've got. From an EPS perspective, we've seen sellers that sell using the C2C products have been double that that haven't used the C2C. So that's been encouraging from a user experience perspective. Our goal with C2C is to remove that's remove a friction point in the C2C process So that's we see the opportunity from a monetization perspective in in building the value continuing to build the value and removing the friction points in that process, which over time will enable us to to be able to increase the yield in private sale. We don't have a timeline on when we look to do that. We're seeing the rate of C2C take up improving virtually every day, certainly month on month. We've got a lot of initiatives to come with that. So we'll We'll continue to monitor that. And when it gets to a point from a trust and confidence and from a value perspective, we're able to to increase the yield through our dynamic [indiscernible] [indiscernible] Thank you. Your next question comes from Entire Rykovski from E and P. [indiscernible] I'm going to keep the trend and my first question is on TI.

So I'm wondering if you can provide us with the building blocks to second half twenty twenty five revenue growth Obviously, price increase will only have a couple of months impact. Call it 2%, maybe 3% depending on when you might increase. Are you able to give us then a broad guide on the other contributors any particular, how should we think about the contribution from media private debts, so the relative contribution from those Yes, Mike.

Yes, let's [indiscernible] Can you hear me?

Yes. [indiscernible] The question is growth in the second half.

So I mean, outside of price, which clearly that's deferred but will happen in Q4. There's money coming out of dealer depth because of Premium Select, that product continues to perform well year on year which is pleasing. As I said earlier, we've just attached the AI piece to that a product standpoint. So that really should help our sales guys as well as drive more value to dealers.

We're seeing really good growth coming out of our media business. [indiscernible] Suzuki, Yamaha, Really good conversations going on in there as well as non OEMs okay. So good growth coming out of that The Zanara business that's literally just started, so and that's growing quite rapidly [indiscernible] Now we expect media to really give us a strong H2 as well. And then some oddson odds and sides coming out of our data business. Essentially. So that's where we'll see the growth. So we'll see it in rate as per usual, we'll see it in dealer depth. Is Premium Select and we'll see it come out of media Okay, great. Thanks, David. Is that the sort of order quantum we should be thinking about? In terms of depth, media, other? [indiscernible] quantum. I just thought where it was going to come from. So the So there are other things, Mike, that are going to drive. So partnerships are going to drive revenue going to see a little bit from marine, we're going to see a little bit from our data business. But But look, it's nice that it's coming out from a more of a diversified product hierarchy, if you like, and not just completely relying on marketplace.

So So yes, but that's how you should think about this half and think that really sets us up well for next year.

Okay, great. And then I've got a question on the domestic operations. Particularly in private, So revenue growth was 6%. I mean, it was consistent with the guidance. But that looks to mainly be price driven given you put an increase of about that quantum in June. Mean is that the case with if you can confirm and [indiscernible] I think you put in place just over six months ago. Is that driving better instant offer volumes or in is instant offer fairly flattish? [indiscernible] you're right. Volumes have been a little soft from a private perspective. You can get slightly down on TCP. Yields been the main driver of of the growth there. So we've been able to to flex between different categories of cars and location, etcetera. IO continues to be an important piece in our private offering. And we're certainly seeing the one cell initiative directing people towards instant offer and balancing the needs, still their needs in that private sale process. So That's still the point.

Okay, great. And final one on Korea. Just looking at your guidance, for solid EBITDA growth after you delivered 12% in the first half, Do you expect some slowdown in second half earnings I'm just interested in whether there is some conservatism built in or whether the marketing spend will materially pick up in 2H, which is why you're still guiding for solid whereas it seems like you're tracking ahead of that in the first half?

Yes. And so you're exactly right. I mean, we don't expect to be much change in revenue. But in the second half, we expect it to spend a somewhat the investment particularly around the marketing given the competitors marketing spending gets aggressive and aggressive? Okay. And are you able to give us a rough sense of the quantum of that marketing spend? Or is it just something that's captured in the guidance?

It is already captured in the guidance. I mean, exact amount of spending on the marketing will be will be flexible depending on our financial performance and conditions. So, market spending is all about the sort of the leverage that we can flexibly maneuver and control to protect our expected profitability and profit.

Okay, that's great. Thank you.

Thank you. Your next question comes from Shrash Singh from Bank of America.

Please go ahead. Hi. Three questions from my side. One on The U. S. Could you talk a little bit about the trends you're seeing in the commercial truck segment? Understand the cyclical pressures in the discretionary verticals, but in the truck segment, you've seen strong website growth in website visits. Are you finding more success in adding truck dealerships customers and also some success in upselling packages. On Brazil, looks like your national expansion strategy is working pretty well with strong growth in leads coming from the regional areas. Can you talk a little bit about the competitive landscape in the regional areas? And any thoughts around Whether your horizontal competition or LX and MercadoLibre, are they a little bit distracted with competition from Temu? And Therefore Better Runway For You In Regional Areas To Add More Dealerships? And Lastly, On Korea CAR, you've done these price increases in Korea after a long time. You called out in your presentation that there has been no volume impact. So should we see more of these price increases because your CAR rates are lower? Thank you. Yes, please, Mike. [indiscernible] [indiscernible] Yes.

We're still here, Matt.

Go ahead.

Okay.

Sorry, there's some distortion at this end. Yes, look, good question. And truck really has been the shining light as it relates to marketplace over the last six to twelve months, okay. So provided us with really good growth. In the half and customer numbers have been really solid with truck. We have been adding small amounts of customers But we've done really well from a premium select in that environment. From a traffic perspective, when you look at our internal metrics, our visits are really, really strong and have started this year strong and interestingly since post election, have been performing really, really well. So I would say high level This is an audience in a really strong place. And what we need to see now is we want to see more of that convert. But yes, but trucks in a good position. I think over the next six to twelve months, it should continue to provide good growth for our business.

Yes, yes, for sure. [indiscernible] working very well. As soon as we We start to do in Wednesday, we have the knowledge of course Brazil CAR you have completely different regions. The Northeast is different from the Southeast and from Sao Paulo, for example, when different strategies. But as soon as we evolve the strategy, We are getting better and better in terms of what to do in some cities and the learnings of the process that we had in the previous city. Which as you saw the results that we are having with leads and not just leads, but in terms of also in terms of [indiscernible] So it's running very well. And I think that is it has the space to keep growing because it's a huge market and I see to be on it, I see opportunities everywhere. In all the regions And talking about the landscape and competitors, we have a very unique competition here in Brazil because you have all the banks with market places, you have the horizontals, talking about the horizontals, it's about your question. What I'm seeing right now that no relevant investment reaction in this cities that we are working. And of course, we have other segments inside these platforms and maybe the focus is more connected with the other segments and not with cars and vehicles.

So what I can say up to now so far is that no significant investments are coming from the horizontal players. And to be honest, I think that we have a very unique model in terms of ecosystem with Santander, with Cartan, with Luki it's not so easy to CAR but we are very, very aware the power of our competitors and we are all the time monitoring all the activities. But so CAR, no relevant reaction. [indiscernible] Yes. For the volume impact, from a price wide [indiscernible] we did was usually the volume was impact, but it will be and has been recovered within a two to six month gradually.

Including the guarantee this time as well. Regarding your question that, I mean, we continue to looking at an opportunity to increase the price more often and more size. We were looking at that. But in the competitive dynamics here in Korea is getting more intensified. Because of the HANDDAO, because of other players getting to the B2C market. And most of them are advertisement prices free of charge, while the NCAR charge a lot. So I mean, we'll be extremely careful about the price wise. But historically, we have been very successful in doing that while we're protecting the volume as well.

Thank you.

We've got time for one more question.

Thank you.

Last question comes from Suraj Ahmed From Citigroup. Please go ahead.

Thanks, everyone. Maybe I'll just kick off with Web Motors, if that's okay for a change. Just, Eduardo, just can I just confirm rate hikes had no impact on finance conversion? And secondly, on that as well, just on wallet which has driven strong yield growth. Did that have a full impact in first half or should we be thinking that wallet impact into this year.

Thanks.

Sorry, if I understood [indiscernible] the question, sorry, I lost. Could you repeat Just on the rate hike, Eduardo, have you seen any impact on the finance conversions or finance? Okay, okay. Perfect. So in terms of interest rate, we are not seeing so far any impact Of course, it's going to arrive in some moments ahead But the good news here in my my opinion is that the Central Bank is showing to the market that independent and keep the strategy to keep the inflation under control and that you have all the benefits that we are having because it's very recently in Brazil that the Central Bank is independent. So that's the good side because the economy is in a very strong pace and the Central Bank is acting So I expect that you have some impact, of course, But in Brazil, we are so used to have this volatility in the interest rate to be honest. And in the past, we had this. We didn't have a huge impact in terms of finance, but even when we have this, we compensate with other lines. So what I can say right now is to keep observing how it's going to affect the market.

As I said before, so far nothing. And here in Brazil, you need to take in account that the most important is the the installments that the consumer pays. The interest rates, of course, it's something that is behind this. But up to now the interest rate increases the three points is going to increase one point more is going to achieve 14.25 But when you see these in terms of installments and when I we're talking about the economy growing and all this, so sometimes compensate and compensated and the consumer keeps getting credits and all this. So let's see. In summary, I expect some impact but not a huge impact And in terms of wallet, it it's working very well. It's one of the highlights that I would like to share about this half. Because the combination with Santander CAR working very well. We are having benefits also for Santander. The deposit money inside the wallets and they can buy products from web motor. So We had almost right now more than 50,000 transactions and more than 7,000 dealers using the product. So a huge contribution and I think it was a win win product that we launched together with Santander.

Great. Thanks. Can I just ask a quick question on TI as well? Just on maybe I'm reading too much into the line ball comment from Will. If that's the case, if it's going to be similar growth rates to the first half and the second half, then what's offsetting that delayed price increase? David, is there something else? I know you mentioned media and the things, but what's stepping up to fill that gap in the second half? Or should we be thinking there's a slowdown?

Given the price rises are delayed? [indiscernible] Yes. And I think I sort of covered them off before, but really the OEM business and the media business is accelerating. So that's positive for us. Our data business is going really, really well. As well as our partnerships. So that would be the items And then the final thing really is the launch of Zemara, which is the regional agency business. I think that's all I've got time for. Thanks everyone for joining the call. Today. We're a little bit over the hour, but I look forward to catching up with most of you over the course of the next few days. Thank you. [indiscernible]