Webjet Group Ltd

Thank you Darcy and good morning everybody and thank you for your time. Joining me this morning is Leighton Shanoff, our Group CFO and today we're very pleased to take you through the first half results for Webjet Group. We'll turn to the first page please. I'm looking at page number three in the bottom right hand corner. So last week we updated the market on our preliminary first half results, which are now confirmed as provided last week. So given the market has the key figures already, I just wanted to start first with the key messages, as I always like to do, what we think you should take away from this morning. I think that is that despite a pretty tough domestic market, we've shown resilience and stayed disciplined in executing on our strategic priorities. This half result definitely reflects softer trading conditions that we've experienced in the half and also some unique conditions faced by Woodjet given the ACCC impact I spoke about in detail last week. So for those of you that did miss that, last week our EBITDA delivered is a 9% decrease on a prior comparative period to $14.4 million. But importantly, statutory impact is up 51%, and that's a very strong signal of the underlying health of the business. I think throughout the half, we've really continued to invest for growth and done so responsibly and delivering on what we said we would. A great example of that is the cost out and the automation we've delivered in our cars and motorhome business. The balance between investing and obviously managing costs is critical in this environment. You can also see that balance sheet remains a real strength with a net cash of $111.9 million, still no borrowing and net assets of $150.2 million. So that gives us the flexibility and the confidence to keep moving forward. Most importantly, I think a key message is we're accelerating our strategic plan with strong execution. International flight bookings are up. We said we would do that. We've expanded our tours and our packages offering. We said we would do that. We've launched our WebJet business travel and the early engagement with that business has been very encouraging. I'll talk more about that shortly. And importantly for our OTA brand, we've refreshed the brand, the website experience and a brand new creative marketing campaign that is already resonating with customers, and I can't wait to share with you some of the results from that. So we're doing the right things, investing where it matters, managing costs, and delivering on the potential of these brands that we have and our promises to shareholder, and most importantly, leveraging and maximizing the opportunity that our demerger over a year ago brought. We're building the foundations for sustainable growth, and we're doing it in a really disciplined way. Lastly, for those of you who have already read ahead on the ASX announcement, we're very excited to declare our inaugural interim dividend of $0.02 per share. That's a payout ratio of 100% of underlying impact and well above our stated target range of 40% to 60% payout range. But that's consistent with our previously stated intention at our four-year results in May and our AGM in August. that the board has the intention to maximize the distribution of banking credits as they become available to the company. Again, we had planned to commence an on-market buyback following these results after our blackout period. But that is now on hold due to receipt of an NBIO, which would be another release you would have seen on the ASX this morning from ourselves. And the details you can see in that announcement, I won't comment on that further. Turning now to page four, let's look at the key metrics. Underlying EBITDA, as I said, at 14.4 million. But the key things here are bookings at 724,000, TTV was 726 million, and revenue was 67.9 million. So if I look back on that half between April and September, as I said, trading was in a heavily subdued customer environment, particularly the April to June quarter, which I think was universally acknowledged across the travel industry as a very difficult leisure sector time. And we also saw global uncertainty, some cost of living pressures, and persistently high domestic fares following Rex's exit last year. In the second quarter, leisure still remained subdued through winter. International demand has strengthened, but as I mentioned last week, We've really seen this skew towards short-haul destinations rather than those higher-yield, long-haul routes. But despite this, for most of the half, our underlying results were tracking broadly in line with our budget and expectations. However, there did come some impact for us late in the half owing to the ACCC infringement notice on our OTA site that related to an investigation from 2023 and the choices that we made thereafter. In the decline we saw in site metrics across that 60-day period, we made two strategic decisions. One, to delay the OTA brand refresh and the launch of that by two months, and to pull back our underlying market efforts just to make sure that we kept our powder dry, basically to ensure financial efficiency and how we're spending the marketing dollar. So this did lead to a decline in, obviously, searches, bookings, and also leads, the leads that we develop each month that we then nurture into the following months. So whilst unfortunate, this is a temporary impact. You can see here, though, that on the revenue margin, we've strengthened our revenue margin to 9.4%. And I think that's a direct result of the hard work the team have been doing to optimize revenue. So that, for us, is focusing on higher margin products and ancillary attachments, both air and non-air, and growing our share of international flights as part of our booking numbers. I think the key thing is here is this is an investment year, and we've been very clear about that. We're deliberately investing in initiatives that will drive long-term growth, and I'll talk to some more of those next. Turning over to our strategic plan, this is our strategy on a page, and just wanted to recap on this, because this plan really is the foundation for everything we're doing. This has been helmed by our board of management, and I've told the market that we're going to keep coming back to it to measure success. It's very clear and it's designed to double the business by FY30. And most importantly, our long-term trajectory remains intact. We're confident that this plan provides the right frameworks and the right path to maximize long-term shareholder value. So within this sort of four big strategic priorities, you can see very much around the brand, international flights, and capturing more of the travel wallet, and always underpinning that by our operational excellence. We're making strong progress against each of these strategic priorities. We'll turn now to the next page. You can see there's a lot of detail on here on page six, but this captures all the work that's been done by an incredible team across the last half in terms of driving the strategic plan forward. And arguably, some of these things have taken a huge amount of effort and are the right things to do. And the team is so excited to be now finally delivering on them, taking advantage of the opportunity of the demerger and the individually focused board and management team. So if I look first on the first pillar there on page six, brand leadership, I'll talk more about OTA shortly, but we did refresh the airport rentals and the motorhome brands, and those businesses are now offline and signing new partners. In terms of capturing more of the travel wallet, we've done some deep work on our loyalty strategy, and that's an announcement for later. and later in the year, but we've really implemented paid seats across 30 airlines with a target of 50 by the end of the year. So that's adding extra revenue to each time a customer interacts with us. More importantly, we re-platform two key marketing platforms, and that is essential stuff to allow us to have more personalized engagement and develop those cross-sell opportunities. Third, on addressing and expanding the total addressable market, We knew that business was a massive opportunity for us based on the analysis of the customer base. And rather than building it at a lower cost, we have accelerated that widget business travel mission by three years through the locomote acquisition completed on the 1st of October. In addition, we've secured key patches for tours and exclusive packages, which are now live. Finally, on operational excellence, we have absolutely, the team in New Zealand absolutely over-delivered in terms of cars and motorhome. I'll talk more about that. OTA has continued to improve its customer service to record levels, and a huge focus of the group has been continuing to advance our tech and our AI roadmap. So the execution is strong, and these initiatives are absolutely setting the foundation for growth and reinforcing why our long-term trajectory remains unchanged. Let's dive now into the core business unit. First, I'll deal with widget OTA. So I'm now on page eight. So let's have a look at the key metrics here. So despite everything I've spoken about to the market conditions, the ACCC notice and the overall softer April to June, our first half revenue was flat. and that's a good achievement. I think that's really shown by the growth in our international bookings, despite mainly short haul leisure, but that stronger revenue per booking and that margin growth by focusing on our high-end margin projects, products, and ancillaries. You can see that there in the revenue margin lifting to 9.2. If I turn to the next page, got the the core numbers here i won't go through all this so but therefore for consumption later but you can see the bookings are at 593 000 ttv at 637 million in revenue at 58.3 really pleasing that the revenue came in flat uh and the eva data for that business at 21.2 moving on now to unpack some of the things behind that i'm turning now to Page 10. So international flights, as I mentioned, this is a critical growth leader for us, and we're making really strong progress towards our FY30 targets. As you can see from the small chart on the right-hand side, we're continuing to increase year on year the total number of international bookings as a percentage of our total flight bookings. And why is that important? One, we're predominantly a domestic flight business. So international flights is the easiest extension of the brand. And with the tech that we're doing, the AI tools that we're implementing, this means that booking multi-stop, difficult international trips is far easier online. So that's the second reason. The third reason is it really just mitigates that domestic market dependency risk. So that's why this has been such a crucial focus of the team. In terms of the other kind of core momentum we're building to support this, the first piece, one of the key things we wanted to do was expand the product. And what I mean by that is expand the flight or flight options that we have available. So we've broadened our NDC adoption, continuing to add more airlines for the new distribution capability. If you haven't got across that industry acronym yet, we can do that in Q&A. but we've broadened our adoption across more airlines that give us better content at more competitive fares from premium carriers. Importantly, and as signaled in February and March, we've also selected a new flights aggregator to integrate over 400 low-cost carriers in the second half. That's going to be huge. The next thing, expand the product, improve pricing. So Trip Ninja, this is our internal incubator, our AI hub, our experimentation unit. This unit that we purchased a few years ago has a few different pieces of technology. And the one we're really excited about that has been implemented in this half is now live across long-haul routes. What that does is take a really complex multi-stop trip, long-haul, and returns back a unique itinerary, combining airlines that just don't sit normally together. And what that delivers is better prices for customers. It also makes it really hard to compare. You're not going to get that on an airline site or another OTA. And it's unique to us with this TripNinja technology. In addition to that piece, we're developing a predictive AI solution and a dynamic pricing engine, two different projects that the team has been working hard on. designed to sharpen competitiveness and lift our conversion rates. So some really great progress in the half there. And as stated, capturing that whole travel wallet. And this is about ancillary attachment. As I said, paid seat selection. We only had 18 airlines that you could buy a seat with in FY25. Now we've got 30. And then by 50 by the end of the year end. So this non-air ancillary revenue continues to grow and now represents over 30% of our total revenue, and this gives us a more diversified revenue mix, again, mitigating risk. So looking ahead, we also plan to launch paid bags as an additional air ancillary in the second half, so further strengthening our offer there. So that's international clients. I want to just now move on to hotels and packages, a stated area of focus, so I'm now on page 11. They're a big part of our growth story, and that is because 74% of customers in our deep brand research last year told us they want to book it all in one place. They said they were frustrated with booking their flights with us and then going somewhere else to book their hotel. And most of them didn't know that if you book it with us, you can get up to 20% discount on that hotel. So that's a marketing challenge for us and a messaging challenge. And that's one we're really happy to take on. So again, you can see here some really pleasing progress in the half around sort of our core pillars, expand the product, ensure people know that we do this, expand our brand awareness and acquire new customers to these products and make sure we're setting up the tech to deliver on this. So in terms of products, we've launched new exclusive packages. There's some really great ones on the site now if you want to go buy. And we've also launched over 3,000 new tour products are available on our site. We've got some really exciting, what I call the killer deals coming up across this next six months. So we've done our first dedicated marketing campaigns on hotels, on tours, on packages, and this will feature more in the next coming months. Most importantly, we've done the work on the tech and the platforms that are needed to deliver on our FY30 strategy. Now that's going to be a a process of development, but we're also doing some smart things using white label solutions in the meantime, and that's enabling us to deliver static packages now. So while it's early days, the strategy's in place, and the momentum is building around this really core ancillary product. Lastly, I'm on page 12. We can't not cover today what I think is one of the most compelling highlights for the OTA business, which is our customer experience. It's a core part of the strategy and operations, and we've made, again, great progress. In October this year, we were super proud to be recognised with two major awards. You can see they're the most outstanding OTA, the National Travel Industry Awards, and the leading online travel agency for Oceania, the World Travel Awards. They're not easy to win. But during this, That's great, but it's really, I think, a testament to the transformation that the team have been leading. You can see some key metrics there in terms of the improvements in our first contact resolution, agent satisfaction, and our Net Promoter Score, which we're really, really proud of. I think underpinning all of this and why we've been able to achieve such improvement in the area where it's notoriously hard to continue to improve is we've built a centre of excellence in Manila. So not outsourced, but actually with the employees. And, you know, we're really creating that as a centre of excellence in addition to our Australian team. We're expanding our AWS Connect, and now we handle over 90% of our back office activities through AWS Connect. That means it's a really far better compliance, visibility, control of average handling time, just how the operational bolts fit together. And I think these results show how our core metrics are up. So, yes, we're a tech company and we're continuing to invest in that, but there's always someone at the end of the line or at the end of the chat if you need, and we're continuing to deliver measurable improvements in that. Going to move now to cars and motorhome, our two businesses based out of our New Zealand office. So let's have a look at the key figures here on page 14. EBITDA came in at 1 million. Now that is up from 0.2 million in the first half of 25. So it's a fivefold increase, we'll take that. But that is really being driven by the simplification of the product offering and the increased automation and then the cost out. You know, we worked really hard on that this time last year. And the results from that are now delivering. Importantly, you can see a revenue margin there at 10.6. The market is soft. If you are not flying, you're not attaching a car or a motorhome. And so you can see that in the bookings or the TTV. But we knew that going into the year. So that's why we had a clear plan early and made those tough but necessary calls. So we did restructure. We optimized the costs. And then we used our technology and leveraged our technology to drive automation. In short, we see what we're going to do there and the results are shown. So if I go into the detailed numbers on the next slide, again, I'll leave you to digest those. But I think what this business is showing now, it's on a much stronger footing and it's positioned for profitable growth. And now we have a very strong new management team and a CFO and a GM down there who are really focused on growing the top line. So I'm pleased with how that business is starting to perform. You can see there the expenses were down 13%, reflecting that successful delivery of headcount and IT savings as planned. In terms of just highlighting and reinforcing that point, As I said, I think the key progress for this business, now I'm on page 16, is that this automation has been driving efficiencies. I do want to draw your attention to the chart on the right-hand side. It's small. It should be bigger, given the amount of effort the team have gone into. So you can see here, half on half across a year, what the team have done to automate this business. So, you know, for a motorhome, no amendments could be done online or by a customer self-service. No cancellations could be processed. Now, you can see there over a third can be done, a third are now done online by self-service and 50% of cancellations. Now, that all takes efficiency out of the processing. So that's, I think, really impressive. As I said, we did the hard work, we did it, now it's delivering. And now, most importantly, it's set up to grow, and that's what the team are very much focused on. You can see here the other achievements in the half across the pillars around the product, the brand, and the customer acquisition. And then this is a scale-based business. So all about 50% of the revenue comes from affiliates. So it's about continuing to add affiliates and then making sure you've got the best supply for all those affiliates. So in terms of product, The key thing here is introducing Apple Pay, Google Pay, WeChat, Alipay. You know, motorhome market is core in the Asian markets, actually, and we're doing ourselves a disservice. We're not on WeChat and Alipay. So we've nailed that, and that's crucial to support growth in those markets. One of the, you know, coolest uses of AI, we're saying, who needs to pay for imagery these days? We're just having AI create it. So there's just a small example of all the efficiency pieces we're trying to use with AI to drive across all our different platforms. On this network, as I said, the business needs scale. So we have signed a new Meta affiliate for cars, signed a new supplier in motorhomes, and a real focus on that European market. So we have delivered a new German aggregator that will be coming in in the second half. Looking ahead, just while I'm on this business, We will relaunch the app, the airport rentals app shortly, and that'll be after some analysis. We have a channel incentive to really drive that repeat rate. So we've identified, obviously, clearly those repeat customers are our most valuable, and we're not making the most of them, so we'll be doing that. Pardon me. So all these initiatives build the scale, we've improved the automation, We have improved the customer experience, and now this business is positioned for growth. All right, so that is the half that was, and all the incredible achievements from our team in the half. I'll now turn over to Leighton to talk through the financials.

Thanks, Katrina, and good morning to everyone dialed in. All right, turning now to slide 18. And look, just before we go into the detail here, I just want to take a quick moment to recap on the accounting policy change that came into effect during the half. In terms of timing, after the transition to a standalone business last year, and once we'd completed the FY25 full year results using predecessor accounting back in May, we undertook a comprehensive review of our accounting policies. And as a result of that review, the accounting policy for the de-recognition of gift card liabilities was revised. Previously, this was based on historical redemption patterns, but under the revised policy and really aligned with prevailing industry practice, we now only recognise breakage revenue once a gift card has expired, which under Australian consumer law currently occurs after three years. Now, in line with the accounting standard, this change has been applied retrospectively, meaning prior periods have been revised as if the new policy had always been in place. This has resulted in a $3.6 million reduction to revenue and EBITDA in the first half of FY25 and an $800,000 reduction in the second half of FY25. Now noting this change was specifically related to the WebJet OTA business and you'll find the full details in the appendix at the back of this presentation. And now importantly, this is purely a timing adjustment. There is no cash impact, but what it does is really improve the comparability and consistency of our reporting as there's no longer that estimation element that was used previously. So with that context, let's turn our attention to the first half financials. Now, as I flagged at our FY25 results back in May, we've now moved past all of those one-sided demerger-related accounting items that previously made that statutory result a bit noisy, which now means the difference between the statutory result and underlying operations simply reflects share-based payments, and a small number of one-off non operating expenses, which I'll cover off on the next slide. For the half, total revenue was down to 1%, coming in at $67.9 million, and underlying EBITDA was down 9% to $14.4 million. And that really reflects the planned step up in growth OPEX that we flagged at our strategy day back in March. Moving down the page, depreciation and amortisation for first half 26 is marginally lower than prior year, which is in line with expectations. And you also see that net interest has now swung into a positive position, driven by interest earned on our strong cash balance, no debt, and also the absence of the related party interest expense posted to merger, which is still present there in that first half 25 comparative. In terms of tax, Our effective tax rate is now starting to normalise around that 30% mark, and that reflects our predominantly Australian-based earnings profile. And lastly here, underlying net profit after tax for the half came in at $7.8 million, up 16%, and statutory NPAT of $6.2 million, which is up 51%. Let's move on now to the next slide and take a look at Trip Ninja, corporate overheads and non-operating expenses. Starting with Trip Ninja, the 1.7 million loss for the heart really just reflects an increase in headcount in that business as we continue building out the technology and expanding its capabilities, and really particularly within the WebJet OTA business. Pleasingly, Trip Ninja is now fully live across all long-haul return routes on WebJet OTA, which Katrina touched on earlier. earlier and really giving us those unique mix and match itineraries and some really great pricing options there and we also signed six new customers during the period which takes the total now to 11 each of those are progressing through different stages of the onboarding process but look the focus here really remains on continuing to support the growth of the webjet ota business Moving now to corporate overheads, these came in at 6.1 million for the half, and we expect the second half to be at a somewhat similar level as we continue to maintain a strong and disciplined focus on cost control right across the business. And finally, just to cover up on non-operating expenses, These are all one-off in nature, and we exclude them from underlying operations so we can really present a clear view of the business's underlying and ongoing performance. The two key items here, firstly, the due diligence costs associated with the recent locomotive acquisition, and secondly, the final demerger-related staff payments, which conclude in December this year. Turning now to the balance sheet, that's on slide 20. Cash reduced over the half in line with expectations. Now that mainly reflects the 9.1 million payment to the ACCC during the period, along with our first corporate tax payment. The small increase in trade receivables and other assets is predominantly timing related, and that really reflects the bulk of our annual prepayments, currently nearly all fall in that first half. Now, on the other side of the equation, the decrease in trade payables and other liabilities, that not only reflects the ACCC payment, but also the timing of our BSP payments. Now, for anyone not familiar with BSP, that relates to our air ticket sales, and payments for these are direct debited weekly from our bank account, and they represent our most significant supplier outflow. Depending on where the period cutoff falls, we can have anywhere from seven to 14 days of sales outstanding. And you'll see the corresponding impact of that in the restricted cash balance, which is directly related and decreased from 30.8 million to 21.7 million during the period. And the other main item here is other current liabilities which reduced during the period and that simply reflects the tax payment I mentioned above. So overall no debt and net cash of circa 112 million as at 30th of September and just to be clear that net cash number excludes the 21.7 million of restricted cash. It's a very robust balance sheet and capital management certainly remains a key focus for us. All right, let's move on to the cash flow. Now operating cash flow for the half and the change in working capital you see here, that simply reflects that ACCC payment and the timing of the BSP settlements that I just discussed on the previous slide. So once we adjust for those two really large and lumpy items and along with non-operating expenses, underlying cash conversion for the half was at 98%. In terms of investing and financing activities, I'll cover CapEx in more detail on the next slide, but the dividend you see here paid to non-controlling interest, that simply relates to a dividend within our Search Republic business. And as Katrina mentioned earlier, we're delighted to have declared our inaugural FY26 interim dividend, and that's a fully franked dividend at $0.02 per share, representing 100% of underlying NPAT, again, well above our stated 40% to 60% target range, and consistent with the board's intent to maximise the distribution of franking credits as they become available. And lastly here, again, as Katrina mentioned earlier, our on-market share buyback has been put on hold, given the receipt of that NBIO from Hello World. And finally here, let's take a quick look at CapEx. Now, over the half, we deliberately stepped up our investment, as we'd previously flagged, keeping momentum behind our strategic plan, but doing so in a disciplined manner. 7.4 million, which includes 1.1 million of investment capex attributable to our strategic initiatives. Underlying capex was in fact down year on year with the recent restructure of the New Zealand business. And you can expect total capex to lift again slightly in the second half as we continue to build out those initiatives. Lastly, just a quick update as well on the previous guidance around the $5 million of strategic capex investment for FY26. Now, that figure was originally based on the assumption that we would internally build the new business initiative, but with the acquisition of Locomo, that build requirement has effectively fallen away, which means the strategic capex investment will be lower than we had originally planned. So overall, we're continuing to invest where it matters, and doing so in an efficient and responsible manner. And with that, thank you. And I'll hand back to Katrina.

Great. Thanks, Leighton. Thank you for that. So a very resilient half and a tough market and very strong financials there, particularly on the balance sheet. So thank you. All right. Now let's turn to look forward. Let's look forward to the next half. So I'm on 24 now. So I think the key messages here are we are expecting an ongoing subdued domestic market going into our second half for FY26. Those interest rates will be higher for longer. Don't see any change in domestic airfares. They're going to remain elevated. And from our analysis, there is no extra international airline capacity coming in. And we do have to just slow down the impact the ACCC and how that impacted us across late August, September, October, et cetera. So look, we're being conservative on that pace, but I think the key thing is we are continuing to invest the growth behind that FY30 strategic plan. We are on track and committed to that. It provides a very clear roadmap for us to strengthen our market position so we can continue to invest in that. And the OTA brand refresh is pivotal in that journey. But what we are doing is taking a very disciplined approach to timing and the investment and continuing to reassess every dollar to make sure it's deployed responsibly, but also while we're still unlocking the long-term benefits. As I said last week, I said the easiest thing to do here would be to not invest in the strategic plan and make ourselves look really good. That is not the right thing to do to create long-term shareholder value. So just reiterating our guidance from last week, for FY26 full year, we anticipate being in the range of an EBITDA of $30 to $32 million, and that excludes locomote and any further deterioration in trading. The locomote piece is forecast to deliver a modest loss in this half as we ramp and extract the synergies. but that business is well on its way. So we are committed to maintaining very good discipline around the margin and making sure we're financially resilient. And as previously announced, we intend to continue, certainly the board's intention to continue to maximize the distribution of franking credits as they become available, including payment of special dividends above the company's target ratio as appropriate. And we'll update on that at the full. Just wanting to touch on a little bit as we look into the next half, and I'm turning now to 25. And as I said, this refresh of the OTA brand, WebJet OTA brand, is pivotal in this journey. And I think what we're seeing here really gives us strong conviction moving into the second half. It is the most significant brand refresh the OTA has done in 27 years and I talk regularly to our founder and even he's in love with our Go Somewhere creative campaign. This isn't just a new logo or a cosmetic change. This is a complete transformation of our brand and our marketing strategy and our online experience. So we've modernized the iconic identity just to make Webjet more relevant for today and tomorrow's traveler and new generations, and ensuring that we represent an option for the full travel wallet, so shifting from a flight-centric OTA to your trusted local travel companion. And that is what this is all about. So we've introduced new verticals like tours and static packages, great packages to Fiji or Bali, et cetera, and business travel. And we're flipping our marketing mix to be brand first. So the purpose is clear there around becoming the first choice, building familiarity, earning a greater share of our customers, their booking spend, and driving profitable growth. So I think this key thing here is that Aussies and Kiwis have trusted Webjet for nearly three decades. And this refresh is about strengthening that connection. And we haven't invested in this brand marketing for a long time. So this is really about powering our next chapter of growth. Now, why are we so focused on that? If you turn to the next page, brand marketing unlocks long-term value. Now, if you look at the stats here on the left-hand side, I've covered these before, but they're really significant in terms of how the research that underpins the investment we're making in brand. So if you look at our own balance sheet and our own P&L, 69% of our total TTV for a 12-month period from April to April 24 to 25 was earned from brand channels or brand marketing. So that means people coming direct to the brand or searching direct for WebJet, not stumbling across us on us having to pay to find a new customer. They have a one and a half times higher conversion rate than other customers. and a far higher TTV from those customers as well. So that's why we're focusing on this and why we're investing in brand marketing for the long term, rather than it would be easy to chase short-term performance metrics. The most important thing about brand marketing, it is a long-term play. You have to stick with it, but it does create the flywheel effect and builds momentum and recognition through the consistent campaigns. most importantly, increases efficiency in your paid marketing and your paid search channels. So let's have a look. Now, it is early days and my CMO keeps telling me, Katrina, we've only been live for a few weeks. But, you know, we are really excited that we're getting widespread brand visibility and engaged viewership since the OTA brand relaunch. So our prompted brand awareness in just a very short period of time a couple of weeks has increased 5% in Australia and 3% in New Zealand. That is statistically significant. New visitors to the site. One of our key objectives here was to reach new audiences, to make sure we're bringing in sort of younger audiences. And so the growth, this growth, we're having a 19% uplift in new visitors to the Webjet OTA site. And that's really driven by premium placements on Meta and TikTok, channels we're historically underinvested in. And in paid search, we're starting to get far more efficient. Brand marketing makes that far more efficient. So our cost per click has improved by 13% just in the first five weeks. You can see down the bottom here, social, our sort of invested and real new focus on social media is really driving reach and views. Now, that takes time to lead into results. But this is the key piece that we need to do to drive efficiency and strengthen our brand engagement, setting us up for long-term growth. So these are really exciting results. On 28 there, there's just a look for all the creative lovers in the room. That's just our new websites. And you can click through there if you'd like onto the new ads. And hopefully you'll be seeing them everywhere. Lastly, just a comment on business travel. We started out in March after we'd done a lot of research and knowing that this was a sector that loves WebJet, that we underserved. And it was one of our big four moves that we wanted to deliver on and build on. But we officially launched WebJet business travel on the 14th of October, and we did that by leveraging the locomote acquisition. And now this is a modern and proven platform, completely rebuilt in 2023. for digitally-led business travel, rather than the old, expensive human capital models of the past that are really bolt-ons of two or three different platforms. This is one slick, clean platform, and that's one integration for a customer. And these first six weeks have shown great momentum. So we've had a 76% increase in our average monthly TTV one since transitioning to Webjet business travel. So people are keen. And we've also seen 187% increase in new sales deals into the WebJet business travel pipeline. And our 30-person team automatically implanted, so we've got deep expertise, fast, strong supplier ties, and the operational know-how to make this happen. So we're really excited about this. This is not a one-year strategy, so we're not worried about it. a small loss for year one. This is not a one-year strategy, this is a long-term strategy and I think we're very pleased with what we're seeing early on. Lastly, Webjet is and always will be a tech company and it's the heart of what we do. We've been leading this space for 27 years and everything we've always done with robotics and ticketing and Trip Ninja you know, early to the party on that one a few years ago in terms of how to use AI to create and break down flight searches and deliver really unique itineraries. But, you know, this year has very much been focused on AI and we've been testing lots of AI solutions and designing different engines to deliver cheaper pricing for our customers and which for us gives a lift in conversion rates for flights. Beyond pricing and the key users there, we're focused on being really practical with this. And that means where do we get efficiencies? So we partner with AWS to implement AI in our customer service. That means better response times, improved efficiency, but also we're also using it to build internal capability and prompt engineering and data readiness, et cetera. We're also working with Microsoft on our AI planning agent tool. So we're creating the roadmap for these modular AI components that forms the building blocks for what we believe is an agentic AI future. We've got the governance and tooling frameworks around it to ensure responsible use, but most importantly, it's our history of tech innovation, and we're positioned, I think, to lead really well in that. So I'll just wrap up with this on behalf showed resilience, but what we're really excited about is forward. We laid out a plan and now we're delivering it. We said we're going to grow international flight market share, international flight bookings, tick. We said we're going to focus on our revenue for booking, that's up, tick. The strategy was to grow our ancillaries and expand hotels packages, capture the full trailer, done and more coming. We wanted to deliver a tailored business travel solution that replicated what OTA, how that transformed travel, done. And we did that with reduced time and cost and execution risk. We've relaunched the OTA brand. That was well overdue and we're excited about it. We're going to be building on that brand legacy, tech. And positive early indicators from all of that work and also what I haven't spoken about in detail and will be a feature in the future is our deep work on the loyalty strategy. So we've been doing a lot of work on that. So we'll turn over to Q&A now, but I just would like to say a huge thank you to our shareholders. We're really grateful for your continued support of the long-term strategy, and we thank you for your ongoing positive engagement. And lastly, I'd like to acknowledge my incredible team. You guys make it happen, and you're all working above and beyond with just great energy and excitement and diligence to drive this transformation plan, and you guys have achieved these results today. So thank you. With that, I'll hand over to you, Darcy, for some Q&A.

Thank you. If you would like to ask a question, you'll need to press the star key followed by the number one on your telephone keypad. If you would like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Ksenia Chadeyeva from Jarden. Please go ahead.

Thanks for taking my question. Is your 3.2 billion TCP target for FY surge still in place? And then looking shorter term, you didn't give any numbers on what TTV looked like in second half to date, but can you give us a bit more color on how forward bookings might look like at the moment and whether you are seeing any improvements there?

Sure. So yes, our FY30 strategy remains intact, and that is still the absolute priority for the business. In terms of forward bookings, as I said, we've given our guidance in terms of where the full year will land, and that is built on our profiling of bookings as they go over the half. As said, we think we're expecting a softer half into the next few months, and we'll wait to see, obviously, how that consumer confidence responds, interest rate cuts, et cetera. But that's what we're seeing flowing into our bookings. What I can say is, The brand work and OTA particularly is really foundational. We're really excited about, you know, the early indicators on that. So we look forward to benefiting off that. Probably not as much in this half, but definitely in later in the half and into next year.

Thank you. And secondly, on FY26 EBITDA guidance, understand it's imported by one of brand investment and Can you please remind us how much is that and whether your guidance also includes some marketing investment needed? If you can also share long-term EBITDA margin aspirations and key drivers for it to improve, that would be great as well. Thank you.

Hi, Ksenia. It's Leighton here. So we haven't sort of specifically called out the second half marketing investment. Like we called out last week, we have moderated that slightly from the $6 million. That's sort of a reduction that we'll just push into next year, just given the current trading conditions. In terms of EBITDA margins, as we've previously communicated, we'll see some compression throughout this three-year investment period, but then we expect them to recover and exceed sort of previous levels from FY29 onwards as we scale the business and start to drive some operating leverage.

Okay, thank you.

Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Wei-Wing Chen from RBC Capital Markets. Please go ahead.

Hey, Wei-Wing. Wei, your line is now live.

Sorry, I was mute. Hey, guys. Hey, GenSync AI in the travel sector, obviously that was front of mind recently for investors. How do you guys view the threat at the moment to your business, you know, like what Google, et cetera, have presented? Maybe we'll start with that.

Yeah, sure. Look, I mean, I think, you know, years gone by, I'm told widget's been quite, you know, it was quite a bit of, existential crisis around what Google Flights was going to do to the business. And that obviously didn't eventuate. And I think there's a couple of reasons for that. One, you know, it's not their core. Two, we'd always lead in tech. We had, you know, superior technology around how you do robotics and ticketing, et cetera. But more importantly, we had a brand and there was someone to call at the end of the line. You know, we're fundamentally an online business, but for that 2% fail rate, you got someone to call 24-7 and you know they're going to have your back. And that wasn't the case with many, you know, Meta or Google flights, et cetera. So if I think about that in this context, All the research that we're doing in terms of AI and agentic AI and what that means, look, is definitely, it's ubiquitous now. It is hygiene that you need to be able to plan that itinerary. But, you know, how we're thinking, and, you know, we'll play in that space, absolutely. That's a state of play. You know, everyone needs to do that. That's just hygiene. But where we see the future is AI is an enabler for us to do what we do really well. Big brands will do well in an agentic AI world. Small brands won't survive. And so that's why a key part of the strategy has been reinforcing and strengthening our brand for this next era. So, you know, our roadmap is ridiculously extensive. But we're being smart about that. We're seeing a lot of companies blow up a lot of cash for stuff that doesn't actually deliver. We're focused on efficiency, but also knowing where the industry is going, what is table stakes, and therefore building that out. And therefore, what are the big bets that we're making in that space?

Yeah, okay. Does it fragment what you guys are trying to do, which is, you know, package up flights, hotels, capture kind of a larger slice of the wallet? Does AI make it easier for consumers to kind of like fragment their booking, so book direct with hotels, but then book with you guys for flights? Yeah, for flights?

I think if you do any search on any LLM now and you get all the different options that you can't click through and the ones that you can click through, then you're left with putting together seven different items for your holiday. It was very clear in our research. We had 3,500 people and we assessed each of their last three trips and what they came back, a resounding 74% of them said, this is boring and a waste of my time. Can someone please pull it all together? So I think that is the power of knowing that all of these pieces are trusted, pulled together and collated for you. What we do in terms of serving up those flights and serving up the package, it's not easy. And, you know, LLNs are just going to sort of, you know, look towards brands who pull that together. But more importantly, we see a world, and I think most people see a world where people are going to continue to go back to brands for safety and that flight to it's all in one place it's all organized for me it's well put together and i can trust it and there's somebody at the end of the phone if i need a call yeah cool thanks and then i guess you mentioned scale which which i guess is interesting given the backdrop of the offer from uh from hello world today but like did you think that um

In this world of kind of AI, you know, whether it be through, you know, Hello World or whatever, but it could be you guys seeking out scale through acquisitions of your own. Do you think scale becomes a lot more important going into the future?

Yeah, I think it depends on your business. So if I look at our car and motor home business, you know, that is absolutely scale driven. And that's what we're focused on to grow the top line for those businesses. Whereas OTA, you know, we have a really unique model that's very attractive to the industry. And with that, that sort of underwrites what we do. And I feel like we're always looking for scale. And, you know, we've seen drop in bookings this year in a softer market. So that's because we're primarily focused on domestic flights. So that's why it's critical for us to expand on our own scale, which means different products across there to capture that full dollar. We know we're leaving money on the table with customers. They come to us, they get their flights, and then they go off elsewhere to book their hotel or book this, book that. And they told us they want to do it all in one place. So there's two breads to that question, which is number of customers. That's why we're doing the brand work, bring in new customers, particularly in that generation Y and Z to the brand. That equals scale. but also the size of the dollar to make that really efficient. And that's about capturing the full travel wallet.

Cool. Thanks so much. That's all from me. Thanks.

Thank you. There are no further questions at this time. I'll now hand back to Katrina Barry for any closing remarks.

Oh, only two questions today. That is exciting. Maybe it's because we spoke to you all last week. Look, just summarizing the half, I think it's clear that we're really focused. We have a plan and we are delivering and we've got the right capabilities to execute. So we're pretty excited about what lies ahead and confident that what we're doing today will deliver sustainable long-term growth. And really we're about maximizing shareholder value. So it's a near-term softness doesn't really change the strength of our business. but we're pretty excited about the forward opportunity, and we see here incredible potential and incredible shareholder value. Thanks so much for your time, and we'll talk again soon.