Good day and welcome to the Flight Centre Travel Group Limited half year result presentation. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star followed by one on your telephone keypad. If you would like to withdraw your question, press the star one again. For operator assistance throughout the call, please press star zero. Finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome our speakers to start the presentation. Good morning everyone. Thanks for joining us today for Flight Centre's half year result presentation. As flagged in our preliminary trading update a few weeks ago, it's been a fairly solid start to the new fiscal year. Shortly, you'll hear more about this from Adam Campbell, our CFO, Chris Galanty, our Corporate CEO, James Kavanagh, our Leisure CEO, Melanie Waters-Ryan, our Supply CEO, and finally, our head honcho, Graham Turner. As usual, we'll take questions. I'll now hand over to Adam, our first speaker, for the lowdown on first half results and highlights. Thanks Hayden. Given we released high-level unaudited results a few weeks ago with the Scott Dunn acquisition, there shouldn't be too many surprises in the financials this morning. Our EBITDA for the first half of AUD 95 million is above the guidance that we issued at the time of our AGM in November and provides a solid foundation for us during the ongoing recovery and growth phase. It's worth noting that just 12 months ago we reported an EBITDA loss of AUD 184 million for the first half. So I'll say AUD 280 million turnaround in profit over just 12 months is a great testament to the company and all of our people. Our sales have been strong during the half with TTV of just under AUD 10 billion, more than tripling TTV for the prior corresponding period. Those sales are generally being converted to revenue within our brands at better rates than the last couple of years. The overall blended revenue margin for the group has improved as leisure share of overall TTV has increased from 24% last year to 44% in the first half of this year. Pre-COVID, around two-thirds of TTV came from the higher revenue margin leisure brands. We would expect group revenue margins to remain below pre-COVID levels, primarily due to channel mix changes that our leisure strategies in particular are delivering. We've spoken to previously, we're very comfortable with the impact these mix shifts will have on revenue margin, as they'll also deliver reductions in our cost margin. Having said that, we do expect revenue margin within brands and channels to continue to improve as we see greater capacity and competition, particularly in the ANZ segment, and as the current short-term impacts on margins start to abate. These short-term impacts include higher than usual airfares, given some revenue is based on fixed dollar fees, a heavier than normal corporate sales weighting, and high VFR and short-haul weightings, which we're beginning to see reduce. Cost margins has fallen below 10% for the first time, which is reflective of both the channel mix shifts mentioned previously and also the structural changes to our cost base made over the last three years. We continue to see our businesses operating far leaner than they did pre-COVID. As you can see on slide eight, our costs for the half are tracking 30% down on pre-COVID levels and the investments that we've made to date mean we have capacity to service further sales volumes without materially increasing our cost base. On a segment basis, our corporate brands have continued their focus on growing to win and have outpaced the broader industry recovery. With AUD 5 billion in sales for the half, corporate has recognized record TTV globally, as well as in both the ANZ and EMEA segments. Our US corporate business had TTV of just below the record FY 20 first half results and has had a very strong start to the second half. Our corporate business remains geographically diverse, with just over 30% of sales generated in both ANZ and the Americas, 27% in EMEA, and 11% in Asia. Our leisure brands, which JK will talk to shortly, have continued to see lower cost models gaining scale during the half and capturing a larger share of sales. TTV for the half was more than 5 times the prior corresponding period and grew by more than 30% over the seasonally stronger second half of FY22. The leisure business also had a significant profit turnaround with EBITDA of AUD 43 million versus an AUD 140 million loss last year. From a geographical basis, ANZ and EMEA segments were both profitable on an underlying PBT basis, and the Americas profitable on an EBITDA basis. On the balance sheet, cash and investments of around AUD 1.1 billion give us a really strong foundation to build from. Our operating cash outflows for the half were reflective of the traditional seasonality in cash flow patterns, where we typically accumulate cash in the peak booking season in the second half of the financial year, and then pay our suppliers after financial year-end, resulting in cash outflows for the first half. The stock trading conditions in July increased the impact of this seasonality in the current half. We do expect to see cash accumulate in the second half of this financial year. Skroo will talk to the outlook. It is pleasing to see that the momentum that both our corporate and leisure businesses finished the half with has continued through January and the first couple of weeks in February. This strong sales momentum, the structural changes made to our cost base, the pre-investment that we've made for future growth, the recent acquisition of Scott Dunn, and the strength of our balance sheet all combine to give us a really solid foundation for the next 12 to 18 months. I'll now hand over to Chris to share his thoughts on our corporate business. Thanks Adam. Adam's given the headline numbers. I'll give a bit of color to those numbers and also touch on some of our corporate strategies. As Adam said, we've had a very strong recovery trajectory in corporate in the first half, and we believe we've outperformed the market across most of the key sales metrics. We've seen a first half 88% revenue recovery versus pre-COVID, 90% transaction recovery, and because of the increase in average transaction value, a 104% TTV recovery. This means a record first half TTV of over AUD 5 billion for the first time ever in the first half. Slightly ahead of financial 20 pre-COVID and 150% up on the first half of 2022. Pleasingly, this means we're on track to deliver comfortably over AUD 10 billion of TTV during this financial year, which will significantly surpass our full year record of AUD 8.7 billion, which we saw in financial year 2019. Again, our geographic diversity is a strength with roughly 30% of TTV generated in Australia, New Zealand, Americas, and EMEA, and around 10% in Asia. Obviously, this is depends on seasonal adjustments. We are gaining market share, and we have done this largely organically. What we mean by organically is retaining customers and winning and onboarding new customers. We've got excellent customer retention rates again this year and a very large number of new account wins. For the first half, we've signed new accounts with annual spend of around AUD 1.25 billion, and this skews 57% towards SCM, 43% Corporate Traveller. The wins again are divided between the regions with the first time since the beginning of COVID, APAC actually recording the highest number of wins, but also strong wins in both the Americas and EMEA. That means we're very confident about future growth continuing in both brands. We also expect to be entering a period of more rapid profit recovery. We're seeing a return on investment in some of the key investments we've made in both SCM and Corporate Traveller over the last two years, including brands, platforms, products, and obviously bringing back a lot of people to service our customers, particularly in the last 6 to 9 months. We've invested heavily ahead of the recovery. That's been our strategy of grow to win over the last two and a half years. What that means is we bring back invest costs to invest in our ability to win customers, to onboard them, to design their solutions, to make sure they have a great trading experience with us ahead of really generating all the revenues. That's enabled us to have such a strong recovery trajectory. We have continued to invest in both technology and people consultancy to help our customers achieve their sustainability goals. This is very important to some of our customers, and we believe we've got a very strong sustainability offering in both brands globally, and again, one of the reasons we're retaining customers and winning new customers as well. Again, we do expect to see improved returns, flowing from economies of scale and efficiencies. We spend a lot of time and money onboarding new customers, particularly in the first 6-12 months. As their travel programs settle down, we optimize them, we're able to get good economies of scale, and we expect to see good returns over the next 12-24 months. Finally, just to touch on Asia reopening. Asia obviously is the last region to fully reopen with both Japan and China opening up recently. We've seen some really pleasing numbers coming back in January and particularly February after the Chinese New Year. Just to touch on very quickly where we play, we have a two-sided model, with travel customers on the one side. They're the corporations and the SMEs whose travel programs we manage. Then our supply customers on the other side, the airlines, hotel chains, et cetera, and it's us bringing those two customers together that we generate value in our business model. Again, we address the market with two brands, SCM in the large market and enterprise space, and Corporate Traveller in the SME space. It's that two-brand strategy that we believe has enabled us to grow back very successfully since COVID. I'm actually going to touch on the SME market first. Last two years, I've spoke a lot about SCM and some of the large market prestigious wins we've had. The great news is that Corporate Traveller is back, and I'm gonna touch on that. Just a reminder, one, that Corporate Traveller is, we believe, the world's largest SME-only TMC, committed to SME customers with average spend around AUD 200,000. Every customer gets a dedicated expert travel consultant. No call centers. A dedicated person every time. We have launched successfully our proprietary digital platform, Melon, which gives customers great technology, purely dedicated and designed for SME customers. Unlike some of our larger customers, our SMEs don't have access to private contracts with airlines or hotel chains. Our combined buying power gives those customers great content, great pricing, on all sorts of travel content. For the first half, Corporate Traveller is back, it has performed very well, and does continue to win business from both competitors, and is really disrupting that space with the new technology we've launched. CT operates in six markets, our traditional leisure markets. Although we saw an initial slower recovery trajectory-Compared to SCM, the last few months have seen a really strong recovery in the SME space. I think part of the reason for the slow recovery was a lot of the cuts we had to make to the business to achieve our cost objectives during COVID. We've been really strongly investing in bringing back people, getting the brand out there, making sure our salespeople are seeing more customers, and of course, launching our new products. That's really led to some significant growth in the brand. For the first time ever, we're on track to secure new accounts with annual spend of over AUD 1 billion in this financial year, which is, which is a record. The good news is that, those customers that we're winning are spread pretty evenly across all three regions, with North America, our most important future market, being a lead market just in sales. We can see it's hyper-invest in North America to fast-track growth, and w e're so excited about particularly the U.S. business opportunity. It's such a large SME market, we're growing really fast again there. One of our commitments to growth is to reopen or to open a corporate village, as we call it, to house people in central Manhattan, to really take advantage of the growth opportunities in the New York area. We have a central Manhattan location opening in the next few weeks. To touch on Melon our proprietary digital platform, which, as many of you will know, we launched firstly in North America. I'm pleased to say that today, over 85% of new customers joining corporate travel are now in the USA, go straight onto our Melon platform, and it's getting excellent NPS scores of over 50, which I think is an absolute leader in the sector. All in all, a great first half for CT, and that we expect that trajectory to continue. Moving on to SCM. Just a quick summary of the strategic journey we've been on with SCM. Prior to COVID, we decided in 2017 to really position SCM as one of the few truly global TMCs, meaning that it's one of the very few TMCs that could actually successfully win and transact global business across the world, SCM operates in 100 markets globally. We moved into the grow to win phase, where we really focused throughout COVID on winning business and retaining customers. We ended up with excellent customer retention rates of 98%, we won billions of dollars of new annual wins for customers, which has enabled SCM to grow back much faster than the market today. Now we're entering a new phase of really getting the benefits of this new scale. We're investing in customer insights and new voice of customer programs to really make sure we can understand customer needs and therefore adjust our investments based on those needs. A really big focus on productivity and cost per transactional reduction. Really getting economies of scale and really making sure that we continue to invest on digitization, particularly in the service experience for customers. Some of the details behind SCM. Very strong TTV recovery in the first half, largely driven by customers, travel programs bouncing back, but more importantly, new wins and new customers being onboarded. SCM's transaction volume is at 95% of pre-COVID levels now over the first half. The only reason we didn't get to 100% was probably Asia not opening up. We're confident we'll get to 100% in the second half. A very strong pipeline of new accounts won across the world, but particularly in Asia, which is good to call out, is doing very well on customer wins. Good signs of recovery, as I said earlier, in both China and Japan, and last six weeks have been very strong since the new year. Should call out here SCM USA, a very strong performance. Yes, the U.S. and North American, particularly USA market, has been challenged in some areas with disruption and various other issues. Actually our USA business has performed very strongly. Pleased to say that, for the first time ever, last month, SCM USA topped over $100 million of TTV in a month, which is great to see and a testament to all the new business that's gone into that market. Really the investment in proprietary differentiated technology, the SCM platform has been a key driver. Every new customer goes straight onto our new SCM platform globally, and all customers, all existing customers are in the process of being migrated. We believe it really is a key differentiator. It's one of the reasons we win new customers is our technology offers customers a superior experience and we're getting again, great reviews on that. We're launching our new next generation service hub model in Europe and Asia at the moment, which gives us really great customer consistency, but also good economies of scale, which will improve our unit economics in those two regions. Finally, we do expect to see further improvements in income per transaction and cost per transaction reductions over the next year. Increasing income per transaction as the business grows, but more importantly, reducing cost per transactions to get economies of scale. All in all, a pleasing first half for both brands and for corporate overall. At that point, I'll hand over to JK to give you an update on Leisure. Thank you Chris, and g ood morning, everyone. I'm pleased to give you an update on the Leisure portfolio. I'll focus on three core areas being trends, a look at our results, and an update on the progress of some of our strategic initiatives. Firstly, looking at trends. Well, customer demand continues to grow, which is really pleasing to see. January alone saw a record post-COVID in inquiry numbers coming through. We track our customer numbers month-on-month, and we're delighted to see that they are growing every month, both in store and online. What's also interesting to see is that repeat customers who are returning are actually spending up to 17% more on their holidays. The Flight Centre brand is now appealing to a younger demographic. We've seen a drop in the average age from 59 down to 51, being a lot of new customers who are actually bringing the average age down. When we look at airfares, what was pleasing to see was some signs of airfares reducing from December through to January. Here in our major market, out of Australia, we saw domestic fares drop 12%, albeit they're still higher than pre-COVID. International, we saw a decrease of 7%. Again, also more expensive than pre-COVID. What this signals though is that airfares are starting to normalize. They have a long way to go. We expect this to actually have an impact, to have an effect on increased customer demand as prices normalize a bit more. Earlier in the year, we shared with you some stats about visiting friends and relatives being more being larger than holidaymakers in terms of our sales performance. That shift has now changed, where holidaymakers now make up about 48% of traffic out of Australia, one of our major markets, versus visiting friends and relatives at 37%. This is still not as high as pre-COVID, which is about 57% holidaymakers, but it's pleasing to see that this is changing, because what it means is that we sell more higher margin product sales when people go on holiday. To put into context, looking at July, 76% of our sales mix was air travel, whereas in December it dropped to 69%. That has a corresponding effect through to our revenue margins, which we saw increase as the year went on. We expect to see more price tension as the Chinese carriers reenter the market, we look forward to seeing prices drop further so that it can stimulate more demand. When we look at our results, Adam has touched on a few of these already, but I'll just repeat that it's great to see that our performance is now 5 times greater than the first half 2022. We've also seen an online record sales of AUD 770 million across the brands of Flight Centre, StudentUniverse, and the Jetmax brands. The GDS statistics that we show and that we look at from market share, evaluation shows that we're gaining share in our major markets and quite a lot of share growth in the last couple of months. Onto our strategy. Just to recap, things haven't changed too much in this space. We have progressed quite a lot. What hasn't changed is that our main objectives in leisure are to differentiate and grow the Flight Centre's market-leading position in Australia, New Zealand, and South Africa and fast-track our growth plans in the U.K. and Canada. Number two is to grow rapidly in the luxury segment, which is evident through the recent acquisition of Scott Dunn, where integration is underway now. We're also keen to rapidly expand in the independent agent community, and I'll touch on that in a moment. Other areas of growth for us in the leisure business means we're focusing on accelerating our investment in our portfolio of complementary brands, which really reflects the student market, the package holiday market with Ignite Travel, and also the foreign exchange business with Travel Money. In leisure, we operate a diverse portfolio of brands to address different segments of the market. What we like about this strategy is that it provides consumers with the widest range of products, services, and value in travel. In turn, it also gives our supply chain access to the most diverse range of valuable customers. It also gives our people the opportunity to have a great career path across different segments of the market. Going back to our strategy, well, our stated strategy, which started in 2020, was to really transform the operating model. This is starting to pay dividends, going from a heavy bricks-and-mortar store model with a fixed-cost employee business to a thriving multi-channel business that has a diverse range of highly scalable and complementary independent and luxury offerings. These businesses now make up close to 40% of our sales contribution, alongside our flagship mass market brand, Flight Centre. On the chart, you'll actually see in the deck here the real shifts, whereby in FY 2019, 84% of sales came from employees in-store, whereas today it's 68% in-store that's complemented with online at 19% and independent agents at 13%. When we look to the future and areas that we're continuing to invest in, the three core areas that I wanna share with you around the progress now, one is global expansion. We continue to focus on investing in physical growth of our brands and networks. To do this, we aim to build out a luxury collection, and Scott Dunn is evidence of this, focused on the U.K., U.S., and Singapore, which will complement Travel Associates in Australia and New Zealand. We'll continue to focus on growing our network and sales staff, and in the last six months alone, we've reopened 37 Flight Centre stores, and Travel Money is now up to 60 stores. Across the network here, we've added 1,000 new sales consultants, which is a great achievement from our recruitment team. The independent division is now operating across five countries, which really is a highly scalable model that draws across the entire strength of the Flight Centre Travel Group capability that allows us to provide services to the independent community. This division alone is now 150% bigger than pre-COVID. Other areas that we're investing in is capability building. We shared with you that our focus was on digitalizing the customer experience. Well, within the Flight Centre brand, our omni program is evolving quite rapidly now, which enables customers to seamlessly shop across all channels. In the past six months, we've rolled out a new CRM, new single global website. Holiday packages are now bookable online and in store, and my account functionality is being rolled out globally. The outcome of this is that within Flight Centre, we saw record sales of AUD 445 million, and we know that we are outpacing the competition with regard to website visits. In other brands, we are investing in our digital capability and in the foreign exchange business of Travel Money, we're investing in click and deliver, which will allow us the functionality and capability to click and deliver and reach more customers. Our independent division is also investing in digital capabilities with the launch of a new home portal. This really is a marketplace platform that allows our independent agents access to product, technology and services all within the one application, making it far easier to deal with the Flight Centre Travel Group and more efficient to be able to service their customers. We continue to invest in extending our product ranges. The purpose here is to make sure that we've got the widest range of product to be able to actually deliver exclusive services to our customers, wonderful holidays and great experiences. Some of the areas of focus in this space really is expanding our cruise range, our package holiday range within Flight Centre and expanding our luxury product range. Ancillary sales has also been a huge focus of the group with the Captain's Pack now rolling out globally outside of Australia and already exceeding sales contribution of ancillary services of over 50%. The My Holidays business and My Cruise business, which is holiday in a box travel brand, is now one of the leading cruise specialists in Australia and also one of the largest suppliers of holidays into Fiji. The business has achieved great success over this period and is now almost two and a half times bigger than pre-COVID. We also continue to invest in the talent of our business and the capability that we need to ensure we've got a thriving business of the future. Doing this means we're investing in, we've recommenced our talent management pathways, which includes our industry-leading staff development programs. Finally, what's important to actually stay true to is because we've transformed our business, simplifying the business will remain a core objective in the leisure business to ensure that we drive capital efficiency and productivity. At this stage, we've got an unbelievable amount of demand coming through, and we are twice as productive as we were pre-COVID. Some of the moves that we've made to actually continue to drive this productivity is that we've actually reduced the number of applications that our consultants use, which has improved their workflow, and it's actually resulting in excellent productivity. The results of this now is that 70%-80% of sales are coming from around 30%-35% of our traditional workforce. I'd like to thank all of our people across the leisure business who are doing a fantastic job at continuing to look after our customers and sending them on their way to have an incredible travel experience. I'll now hand over to Mel Waters-Ryan, who'll give you an update on supply. Thank JK. Uncanny a lot of your numbers are in the thirties, isn't it? Good morning, everyone as well. Just to remind everyone, our supply area was really only formalized as its own division late last financial year, I think about April. We did this in recognition of the strong proposition we can take to our suppliers globally and all our portfolio businesses inside Flight Centre Travel Group of providing one doorway into the group and then distributing that content to our multiple brands and businesses. We have moved from being a part globalized procurement function to a core business service able to make broad investments like we've done with TP Connects, create scalable, industrialized, shared capabilities and improve group returns, and we're well on that journey. The supply division, I think, well and truly allows Flight Centre Travel Group to become a leading global travel marketplace. The functions that we manage on behalf of the group, so both corporate and leisure, are listed at the bottom of that slide and really cover the gamut of procurement, content distribution, revenue and pricing management, or really creating a capability that's used by brands locally in market and fulfillment. That is, tickets get issued, bookings are made, and suppliers are paid. The aggregation of the function globally is in turn leading to additional developing capabilities. Data analytics and robotics are particularly exciting and being embraced in the supply division, leading to better insights for our brands to derive improved customer offerings and deal at scale with the vast amount of process work required in this industry, which is notorious for that bureaucracy. We are now in planning with our corporate and leisure management teams to help create better products for their customers and aid brand differentiation. What have we been doing since we formalized? Over the first half of this year, our supply team has driven many initiatives across the range of activities that I listed on the previous slide, and results have been strong. We have signed many deals. We have pursued NDC capability. We have created additional revenue opportunities purely through aggregation. For example, the way we pay our supply chain is now leveraging some additional revenue. Whilst dealing with a slightly broken and recovering travel industry and embedding some of the transformational platform changes we made during COVID. I'm not going to talk to them all, but two specific areas I think worth mentioning are firstly, our procurement and supplier relations area where our supplier margins are performing to expectation. I can safely say I don't think I've witnessed a busier time in the last six months in our supplier relations area. We remained very active throughout COVID. We have been busy signing many deals. Yes, it's true. Board-based front-end commission cuts in this market, so specifically Australia and New Zealand, became effective this year. On the slide here, you can show broadly the positive territory we have achieved with the majority of our supply chain. We are seeing the return of volume targets. We are seeing an embracing of our global reach across a diverse portfolio with more global deals coming into play. We are seeing improved returns across our land portfolio and stabilizing travel patterns that JK spoke about lead to better margins by the product mix sold. Secondly, in the next slide, our efforts in creating a new air capability and integrating our new air platform with TPConnects has been front of mind for us in supply over the last year as we strive to position FCTG as a leader in air content freedom. Now, whilst we are still GDS first for air, we have invested in TPConnects, taking a majority ownership late last financial year, and are now working to deploy this platform globally. Being technically ready, however, to access NDC content allows us to work with key air partners as to exactly when, where, and how we might actually choose to flip the switch. I think this is important to note. The commercial offering and also the servicing capability which lags behind offer creation for many airlines and can therefore negatively impact the customer experience, especially in corporate where there are high change rates, are all part of our decision-making process. We're currently targeting the end of this financial year for both B2B and B2C. That's not across all our corporate OBTs, but quite a few, for technical accessibility of NDC content. We welcome the opportunity to work with airlines on this long-term strategy who have the right technology, including servicing and the commercial offer. The supply division also houses our travel services area, which you may or may not be aware of. This is our collection of at-destination and external product distribution businesses. I'm just gonna give a very brief whistle-stop tour of those businesses. Discova, our DMC, has returned to monthly profitability post-Asia opening at the latter half of 22, Americas transformation, and a very strong pipeline of sales won over the COVID period. Grasshopper, which was a small acquisition we made during COVID, has been busy bringing to market an active experiential and sustainable range. They recently launched, as one example, Japanese e-bike tours, and the first season is imminently about to be sold out, which is great. Grasshopper is already at 25% up on pre-COVID TTV. Cross Hotels & Resorts now have 20 hotels and 1,500 keys under management. They've also launched a new white label hotel management solution. Again, post the Asia opening, we are seeing strong ADR or average daily rate and occupancy levels. We look for a good future with our Cross Hotels. Our wholesale and external bed bank businesses, formerly or now currently, I should say, GOGO, Infinity, and The Travel Junction, are undergoing transformation, including an integration. In July, we will completely relaunch our new trade supply model. Our touring brands of Topdeck and Back-Roads Touring are also set to return to profitability this calendar year following a limited 2022 season where we tested the market post 2 years of hibernation. Our forward sales are very strong. We're seeing a lot more of those sales direct, which is a better margin. Again, during COVID, we were able to make the required changes rapidly across the product offered, the operations and costs to ensure these businesses contribute profitably to the group moving forward. AVMIN, our air charter business, continues to win contracts and business in a strong demand period for FIFO work, the music industry, sports, and government. Finally, I'm leaving you with a picture of our new eco-village in Bali, Kora, which will open in April and is a fabulous collaboration between Flight Centre Travel Group, Discova, our Asia-based DMC, and the local village of Manggis in Bali to create sustainable and locally run amazing travel experiences for our customers, but also to put money back into that community. I'm very proud of that, and it'll be the first place I stay in my retirement years. Over to you, Skroo. Thanks Mel. Yes after 35 years, Mel's retiring. She's what? You must be nearly 50 now. This is her last roadshow, I think, isn't it? Yeah. Thank you Mel. I might be a bit naughty. Mel has been a big influence on Flight Centre Travel Group overall, and particularly in the last year or so in supply. Thank you. Just, you've heard all the information. I'll just give you a little bit of a wrap-up. Guidance, as you heard, I think, from Adam, is in the AUD 250 million-AUD 280 million underlying EBITDA. This excludes Scott Dunn. And generally this means it's about 65% of our EBITDA, which is the normal seasonality. Also, you know, we've won a lot of accounts in the corporate area. Asia's opening up again. Of course, you know, we had that acquisition of 50% in Japan, which is coming back strongly. Obviously China, where we've been for about 13 or 14 years, is starting to really come back as well. Leisure is recovering well. We'll speak a little bit more about that. Generally, with growth, we'll be growing organically. A little bit of M&A. Scott Dunn's one of the recent examples of it. This slide, opportunities in a recovering mountain market. Yeah, not everything's great. If you look at Australia, outbound from Australia hasn't recovered since pre-COVID. Short-term resident departures is about 80%. A lot of it's lack of airline capacity. We're still only at about 65%-70% of seats. Obviously, airfares are still quite expensive, so they're starting to run quite a few seats empty still because they're not discounting. Remember the Chinese carriers returning to Australia, I think 5 carriers coming back in currently. This will make a significant difference both in freight and once. Yeah, a lot of these are inbound travelers. At the moment, we're probably only getting only 50% back to inbound tourists. These Chinese carriers will probably make a significant difference to that. Other carriers like Emirates is now back to, like, for example, three flights a day. That's Brisbane coming up. I think three in Sydney and Melbourne. Most of these are A380s flights. That's making a really significant difference. Even Qatar that's been really struggling is back, I think to 17 flights a week in into Australia now. This is all coming back, but it's gonna take a bit of time. One of the positives for a organization like us is a heightened demand for assistance, which is on this slide. Obviously, as travel comes back, there's a lot of reasons that people need assistance. Most people who've done any traveling in the last two or three years realize that you do need a good travel advisor to help you, whether it's in corporate or leisure. This complexity does play into our hands to a certain extent. It obviously plays against the online players because you're generally left on your own with that. The next slide is about the resilience of the global travel market. This is a bit of a conundrum. The reality is that although travel is considered discretionary, when you have a look at There's a slide there that shows you that international and domestic travel, which are considered discretionary, are two of the leading things that people actually do. It's probably not really discretionary. The resilience of that global travel market is there for everyone to see. It's if you look at There's another graph there that shows you even with hiccups, like I think there's three major hiccups there. Four, actually. One is the first Gulf War in 1991, then obviously 9/11 in 2001, the GFC in 2008, obviously COVID, which had a huge impact, and it's coming back there. We haven't got the rest of the graph there yet. Ada? All right. We're on now. God, I've been through all four of those. Now it is time to retire. Exactly. We believe in the outlook that there's gonna be strong ongoing demand. You know, we have, the world generally has low unemployment. You see the graph there, South Africa, which has traditionally has quite high unemployment, still is a lot lower than it normally is. One of the positives for Flight Centre, obviously with the high interest rates, help our cash, the fact that we have over AUD 1 billion in cash at any one time. Household savings generally are pretty good and really the demand is not gonna be an issue over the next 12 months from what we can see. That's about it for me. Thank you, Ada. Thanks everyone. Let's now go to some questions. At this time, if you'd like to ask a question, press star followed by the number one on your telephone keypad. Your first question comes from the line of Benjamin Gilbert with Jarden. Your line is open. Good morning, team. It's actually Keegan Boyce from Jarden. I'll be taking the questions today. Just first one from me. Just wanna understand, if you've whether or not you've seen a large acceleration in January TTV, in line with some of the other players, Expedia, et cetera, reporting internationally, please? Yeah. Adam here. We've certainly seen January and into February trade has been really positive for us. We had a really good month in January in both leisure and also corporate. Actually I might just get JK and Chris just to give a bit of flavor around both of those. JK, do you wanna go first? Sure, yeah. Well, firstly, I'll just talk about the macroeconomic factors because if you look at household spending, a lot of the signs signal to spending intentions actually being down, whereas travel is the actual outlier. I think it's evident in some of the Commonwealth Bank reports and that you'll see that travel is the outlier in that space. That's actually showing up in the inquiry numbers that we're seeing coming through. December was actually a record inquiry number for us in leisure post-COVID. Sorry, January was a record, and now February is picking up again. It just goes to show that inquiry is still very strong. This obviously gives into the busier second half for us as well. Things are looking reasonably positive. Chris, do you wanna give a view of corporate? Yeah, sure. Look, a similar story actually. Both January and February, good top line numbers, pretty much around the world actually. I think as I mentioned in that earlier recording, the pleasing thing is that Asia was the last region for us to really open up. Even up until the end of December, Asia was quite suppressed, but we've seen that really pick up quite strongly in the last six, seven weeks as well. Yeah, it's a similar story. No. That's great. Just second one. Looking at the revenue margins and the trend going to the second half, keen to see or get an understanding of where you see them getting back to. Just particularly if you look across the regions, there's obviously a bit of movements both up and down across all the geographies. If you just put some color on that, please. Yeah. I'll start with that. Adam again Keegan. Look, I'll start at a total group level. Certainly what we've seen and will continue to see, I suspect, is as leisure's share of the total TTV continues to increase, it's now at about 44%-45% of total TTV. That will continue up, and we expect to get to a point probably where leisure and corporate are circa sort of 50/50 in terms of TTV. You know, give or take 5% either way from time to time. As that happens, we'll see the blended revenue margin increase. Within leisure, there's been a movement with the strategies that JK has been putting in place to the lower cost and lower revenue margin channels. Importantly, what we have seen, particularly in Flight Centre brands, across most of our channels and brands themselves within those, is an improvement and ongoing improvement in the revenue margins. Revenue margins are improving, the mix that we're seeing as a result of the strategies being deployed and being successfully deployed mean that the blend is gonna be different going forward. We're very happy with that and very comfortable with that because the other side of that I think is important to hone in on is the cost margin. Cost margin is below 10% for the first time, I think, in our history. That is largely to do with both that channel mix that we're talking about there, but also, the structural changes that we made over the last three years and the ongoing discipline that we're seeing in our cost base. It's important to look at both of those together. I don't know, JK or Chris, do you guys wanna add any more color to that? JK? Thanks Adam. I think you've covered it really well. The business is different now and it's by design. If you look at sales contribution from one of our businesses like the independent model, which is now making up between 13%-14% sales contribution, the revenue margin in that business is significantly less, but the cost margin is even, it is a lot less as well. On a brand-by-brand basis, when we look at the Flight Centre business, we actually saw revenue margin uplift as the year went by. I mentioned in some of the commentary there that one of the changes is that we're starting to see a lot more holidaymakers travel. That means that we're seeing a mix in the product that we're selling. We're actually selling some higher margin product in there as well as the shift goes from a significant amount of air in the product mix, and that's reducing now to air, cruise, land, etc. It's just looking at a brand-by-brand basis and also at a product mix within the brand. That's fantastic. Thank you guys. Just to say, just from a corporate perspective, we do expect to see a gradual increase in revenue margin. That's largely because of the increased speed of the Corporate Traveller brand recovery because our SME brand does operate at a higher margin than SCM. That's great. Thanks team. Your next question comes from the line of Wei-Weng Chen from RBC Capital Markets. Your line is open. Hi there. Just a question on your PBT. I guess more recently, you guys have been guiding to EBITDA. Just wondering how we should be thinking about PBT. And maybe a good starting point is to talk about your corporate division. On your slide, it looks like you're 88% revenue recovered. PBT margin of that business is still materially below pre-COVID. Just wondering if you could speak to why we're seeing profitability still so low and when we should think about maybe a recovery to sort of FY19 levels of profitability. Well, it's Adam here. I might just start with that at a high level, then I'll get Chris to talk to corporate in particular in terms of the second part of your question. I think the PBT and EBITDA, the difference that we've got there, obviously, for the first half is about AUD 94 million, which is why we're effectively at break even or give or take break even for PBT. We expect that in the second half to be slightly better, probably guiding towards the AUD 90 million impact in the second half mainly because of some of the impact of interest rates coming onto the cash that we're holding. If you're looking out for the full year, that's where we're sort of guiding to in relation to the bridge between EBITDA and PBT. In terms of conversion into EBITDA or PBT in corporate, Chris, do you just wanna talk to that? Yeah, sure Adam. Yeah, look, I think the reason our profit's trailing our revenue recovery is pretty simple in corporate. I think we've invested a lot of money in bringing back the business to make sure we grow. We made the decision not to maximize short-term profitability, but to really grow the size of the business. We've, you know, as I said before, won and now implemented, AUD billions of new customers, trading customers now over the last 12 months, the last 18 months. There is a cost to do that. For the first year of an account, it is the highest year of running the account, because we don't just trade it, we have to solution design and implement it. What we've done is made sure we invest to grow, to take market share. An important reason we do this is when we win these customers, particularly large market, but even SME, this is reoccurring revenue. We keep these customers for a number of years. Our typical account, signed account is a three-year account or a five-year account. We normally expect them to trade at least twice. If we win a three-year account, that should be reoccurring revenue for 6 years. We've invested to make sure we can grow, we can scale, and we have borne the cost of that this year. You know, again, we looked at the medium-term growth rather than maximizing short-term profitability. That makes sense. Just to follow up on that last comment then, maybe. Does that mean at a 100% revenue recovery in corporate, we should still think about a PBT sort of below that AUD 267 million pre-COVID number? I think this year you would, yes. I mean, again, the aim of winning this business is to optimize the business. That's why we talk about economies of scale and really digitizing more, and that's what my team are working on now, is making sure in the coming period, over the next year or so, we really focus on optimizing that revenue. If it was this year, if we got to 100% this year with the additional cost of growth, that would be the case. Okay. Medium term, you're not expecting any reduction in profitability sort of versus pre-COVID? I mean it all depends, again, on the balance of the two brands. SCM has grown much faster over COVID. SCM trades at a lower profit margin than Corporate Traveller, we're now seeing Corporate Traveller really getting back into its growth engine again, which is great to see. If you had the same balance of SCM and Corporate Traveller as pre-COVID, we'd expect very similar profit returns. Okay great. Thanks. Just the next question, just on some of the significant items that have been taken below the line. The employee retention costs have gone from AUD 11 million last year to AUD 16 million. What should we expect going forward? Can you maybe speak to the rationale for excluding these costs from underlying EBITDA? Yeah. Again, it's Adam. The second half expectation should be around $14 million. In full year, FY 2024 should be $14 million as well, that's for the full year. The reason that is is the two plans that are in place tail off over that next 18-month period. The rationale for this is really two areas in there. There's one employee plan, retention plan, called the Post-COVID Recovery Plan. A second one called the Global Recovery Rights Plan. What they are is they're retention plans basically for both our senior executives which is the Post-COVID Recovery Plan. The GRR, the Global Recovery Plan, is for all of our employees globally, where we issued all of our employees who were with us during COVID at set points, share rights that would vest. The first set vest in as of today, I think actually, with these results being released. The second set vests this time next year when we release the half year, December 23 accounts. The rationale for putting it below the line is that our pure retention, one-off retention plans that we put in place to keep our key people all through the COVID period, they're not an ongoing cost to the business, so don't sit as part of our previous cost base. They're simply there to be the one-off plan to see us through COVID. Like all of the areas that get put below the line, Wei, we pull it out of the number. You can do what you feel is most appropriate with it when you're analyzing it. For us, because of the one-off nature of it, they don't form the basis of the ongoing results. Yeah, sure. Then just last question from me. Just wanted to talk about slide eight, your cost efficiencies. Your costs are now 70% of first half 2020. I note that your revenue is sort of 65% of first half 2020. I guess simplistically looking at that, your costs are actually probably running ahead of your recovery. I guess my question is, you know, when should we start seeing leverage coming through from this cost base? What do you think that ultimate cost efficiency number will be? Yeah, it's a good question. I'm not sure that the revenue is the right number because there is a difference in the margins even without the channel mix there that we've spoken to previously. Volume perspective, our volumes are still above tracking a bit above that 70% overall, which is probably a better comparative for it. The answer to that is probably linked a little bit to what Chris was talking about earlier in terms of a lot of the costs that we've got there in pre-investment in bringing on board new clients through Corporate. It's also a lot of those costs are built around some of the investments we've made in our technology streams in particular. Within leisure, we've been heavily investing in technology to assist with productivity for our people. We've been investing in technology to further enhance and enable the website. We've been doing similar things throughout our mail supply area, feeding into our corporate and leisure business and our risk folks to the corporate business itself. We see that we're at a bit of an inflection point now where we should be starting to see more of the benefit from that those cost base coming through as the volumes start to pick up. Just remember as well, a lot of the cost base for a company like ours is a fixed cost base in terms of support and structures around that, which through COVID, we weren't able to cut as deeply as we would otherwise. As the volumes come back, we shouldn't see significant increases going forward as well. Where do we think we'll get to? We haven't guided on that specifically, but we do expect that costs will come up further than where they are now as we continue to get volumes up to pre-pandemic levels. Certainly we expect that the cost base will be operating less than 100% of pre-COVID levels at that point in time. I guess the answer is somewhere between where we are now, 70%, and where we were pre-COVID. Yeah okay. Thanks so much. No worries. Your next question comes from the line of Mitch Sonogan with Macquarie. Your line is open. Yeah. Good morning everyone, and thanks for taking the questions. Just looking at the FY23 guidance, reconfirmed there for AUD 250 million-AUD 280 million underlying EBITDA. Can you maybe just provide a little bit of color about how you're thinking about what would drive the result to either end, and I guess how that second half 2023 is tracking versus your base case there in the middle? Yeah. You obviously talked about some pretty high activity levels in January and Feb. Consumer spending's been better. Just trying to understand your basis behind that and how you're tracking. Thank you. Yeah Mitch. Adam here. Look, I think the reality is that we've given a fairly wide range, as you'd expect, there's still a bit of, you know, volatility in the market in terms of growth coming through, more generally. Which is why we've given that wide range. Frankly, you know, the last couple of years have shown that we probably need to be prepared for various things. If I look at both ends of it, the bottom end is really probably assuming that there's a bit more of a tightening and an impact from some of the macro conditions that we're not seeing at this point in time. That could be across both corporate in particular, both corporate and leisure. If we saw those things tightened more than we're anticipating, then that could bring us down to the lower end of that guidance. From an upside risk look, I think it's really about, you know, not having any of that impact coming through. Everything really continuing to grow at a slightly higher rate than we're expecting. Perhaps capacity coming back in the ANZ market a little bit more quickly than we're anticipating. We'd probably see that as well as probably a bit more of a better result in some of our non-core or core brands that aren't spoken about as much, such as our touring and other experience businesses which have a peak period in the sort of May-June period. Some of those are probably the swing factors. In terms of the January, February trading to date, as we've said, it's been pretty strong for us. We're pretty happy with what we're seeing in both leisure and corporate over the first 6 or 7 weeks of the year, of the calendar year. It is still early days, I've probably been in this gig long enough not to read too much into the first 5 or 6 weeks of any period. It's certainly heading in the right direction for us at the moment. Yeah g reat. Thank you. Maybe just one for JK. Just thinking about the Australian outbound business. Obviously overall seats, I think Skroo was talking about you're seeing that still constrained out of Australia, but we are seeing increasing capacity coming from other airlines. Are you able to give us any color about what you're seeing within your business, in terms of forwards, outbound bookings, say over the rest of calendar year 2023? Thank you. Yep. Thanks. Look, the forward bookings are in line with our projections, which is why we're reasonably comfortable with the performance so far at the beginning of the year. Our forecast and projections are based on capacity returning to what's actually projected. If you look at, say, domestic outbound out of Australia, it's still about low 90% of pre-COVID and it's getting up to that magic 100% towards the middle of this year. There's a lot of unknown factors as to whether we'd achieve that. If you look at international, that's starting to certainly move now, where if you look at, say, pre-Christmas was sub 70% and now it's kinda the month of February is expected to be around the mid-70% of pre-COVID capacity and increasing, still not getting up to 100% this year, based on some of the forecasts. Even if you go out to June, we expect to get closer to about, you know, high-80% of capacity. If all things going well and that with capacity levels, we're reasonably comfortable with the range that Adam's put out. Yep. Excellent. Just a final one from me. Just on the corporate business, AUD 1.25 billion won in the first half, and you're talking about Corporate Traveller on track to win over AUD 1 billion over the full year. I guess can you just touch on the broader environment that you're seeing for tenders across both parts of that corporate business? Are they still coming out at a pretty similar rate? I guess can you also touch on the key reasons why you're seeing this elevated tendering environment? Thanks guys. Yeah, well, I mean, the tendering environment is carrying on as per usual. We actually saw quite an increase in tendering over the COVID period, actually. A lot of travel managers put their business up, out for tender over COVID. There have been some customers who decided not to, and they're coming up this year. There's nothing exceptional we're seeing in terms of tendering on the contracted side. Obviously, the way corporate travel operates, it doesn't tend to go through a tendering or RFP process because it's winning smaller accounts. The average customer size is around AUD 200,000, and it typically works in a non-RFP environment. What that means is those customers can be won at any time, at any period. I think across the four regions, probably the only change we're seeing is more activity in the last few months in Asia. The other regions have been pretty consistent. We expect that activity in Asia to continue to pick up, particularly now with, as I said earlier, Japan and China opening. Really, overall, we're not seeing any differences in the market than would be expected. Your next question comes from the line of Hailey Kim with JP Morgan. Your line is open. Okay m orning guys. Thanks for taking my question. My first question is just on the staff. I think you mentioned that you're investing in your staff base and you've restarted the staff development programs as well. Can you just talk about the travel agent shortfalls in corporate and leisure segments? Maybe perhaps within the leisure segment, the breakdown between mass market and luxury, and then how many additional staff would you actually realistically need to be able to service the strong demand that's coming through? Just lastly, you know, given the increased travel agent productivity with investments that you made in technology, where do you see your employee costs getting to when you actually get to a full revenue recovery? Chris, do you wanna start with corporate and give a flavor around where you're up to with your staff numbers and productivity? Yeah sure. Look, we're pretty much fully staffed now. We brought a lot of staff back in the last 12 months. I mean, the real ramp-up in recovery started pretty much 12 months ago, and we've been in a recruitment, a rapid recruitment period in most parts of the world over the last 12 months. We're pretty much fully staffed. There may be some additional headcount brought on if we win some big accounts and we need staff to service that particular account. Beyond that, you know, we're really in a process now of training staff who've been on board in the last six months rather than recruiting any more staff. Yep. Thanks Chris. Hi Hailey. From a leisure perspective, over the last 6 months alone, we've hired over 1,000 sales staff. I think it's a great achievement from our recruitment team. I know there was a lot of questioning as to whether we had the capability to do it, but we're pretty good at this experience of bringing on new people, training them up into the system. The fact that we've implemented new systems, our new staff members are twice as productive on a booking level as what they were pre-COVID. In terms of future staff growth, we are still continuing to recruit, and we expect to have at least 200 new people join the organization on a month-by-month basis. Also factor in that we will have some people leave the organization, which is just normal course of business. The investments that we've made in the system means that we're aiming to actually sustain some levels of the productivities that we've got right now. From an overall cost place, we see that the target economics will be in line with employees as a cost will be proportionate to the actual volume growth that we see returning back. All right. Thanks guys. My next question is just on the corporate segment. Can you just, you have a lot of color around the regional breakdown of the corporate clients, but can you just provide some details around your leverage to different industries in the corporate division, in various region? You talked about the tendering activities are still happening in the FCM brand, but would it be fair to assume that the incremental account wins going forward is likely to be driven by the SME accounts through your Corporate Traveller brand? Well, starting with the customer base, one thing we've maintained, from a pre-COVID period, we've maintained it throughout our wins, is that we're very diversified. Actually there's no one sector that we are, that we over-index in any region. We really remain fully diversified. It's more about finding customers who, you know, appreciate our customer value proposition. They can be from any, from any sector. Yeah, we've done well in, for example, in Australia this year, winning a lot of universities. We've had a good run of that in the education sector. We've also done well in the same market in retail, and in mining and other areas as well. We, we actively have always in both brands pursued a customer diversification strategy and we stick to that. I think that the resurgence of corporate travel, actually FCM is having a very strong year for wins as well. I think that, you know, we see FCM carrying on winning. We're not slowing that down at all. The only thing that's happening is that Corporate Traveller is now back winning. In fact, one of the challenges we had for the first few months of this year was, although we were signing customers in our North American business, because we were so understaffed, we couldn't actually place the business, which is kind of an odd problem for us to have. Because we're now fully staffed in most parts of the world, we're having no problems there now, and hence we're seeing corporate travel growing fast again. I think, you know, we carry on investing to grow in both brands. We don't wanna slow that down at all. I am pleased to say that, you know, CT is back again, which is good news. Thank you. My last question is just on the incremental revenue to EBITDA margin conversion. I could have missed it, but I haven't really seen any commentary on targeting 50% incremental revenue to EBITDA margin, especially during the recovery phase, in the second half as well as heading into FY 2024. Can you just talk about this a little bit, whether there's been any change to this, target? Yeah Hailey, no change to it. We're aiming for 40%-50% conversion during the recovery phase. Effectively, we're taking that sort of 6 months by 6 months. Certainly for the next 6 months, our expectation is that we'll be in that range and we were at 39% for that first half. Your next question comes from the line of Tim Plumbe with UBS. Your line is open. Hi guys. Most of my questions have been asked, so I might just ask one or two. The first one's just around leisure, if possible, please. I mean, thinking about the productivity improvements and maybe the stronger performing consultants that have remained. Once we return to business as usual and just thinking about, you know, the employee-based model part of leisure, how do you think about, you know, TTVs to sales staff versus pre-COVID levels? Is, you know, 1.2 times the right kind of level? James, I know that you were talking about two times, but is that sustainable? No. Look, the two times is more related to novices that join our business, overall productivity levels now across the group would be about 50% greater. I suspect because of the investments that we've made, we wanted to sit at around, you know, 30%-50% greater, subject to overall inquiry levels coming through. Great. Thank you. Just the second one on corporate. Appreciate, you know, January, February, pretty strong. Are you able, Chris, to talk at all about any discussions that you're having with your major FCM and Corporate Traveller clients in terms of their travel budget expectations for the year? Yeah, I mean, we Most of them are gonna carry on traveling, as they have for the last few months. There was talk coming into the end of calendar year of people running out of budgets because airfares were much higher earlier in the year. You know, what we've seen in January is that they've just restarted their budgets, those who are working on calendar years. What we are seeing is that there's a couple of interesting trends. One is that people are often now taking longer trips, and actually going for longer stays, and that's maybe doing fewer trips but longer ones. We're also seeing conversely, particularly in countries like the USA, where you've got a much more distributed workforce now, so a lot of people have, you know, moved out of the office. They've even, you know, moved back to a home state. They carry on working. We're seeing customers organize more meetings and events for their staff, as part which is travel that really just didn't exist to that extent pre-COVID. I think the budgets, you know, remain pretty consistent from what we've seen before, and the January, February trend seems to reflect that. Right. Apologies if I missed it, but just final one in terms of Corporate Traveller. Can you talk to us about what percentage of new customers are coming from previously unmanaged pool, versus those won from other competitors, please? Yeah, we don't actually report on that as a, as a global KPI. Typically, it does depend on the market, actually. If you look at something like the USA, they're winning more from other agencies typically. If you look at a market like Australia, there's actually quite a large proportion of unmanaged business being won. We don't actually measure it as a percentage. It does vary by market, but both categories are pretty well represented in the brand's wins. Got it. Thanks guys. Your next question comes from the line of Mark Wade with CLSA. Your line is open. Good morning, team. Solid turnaround. Well done. Keep it going. Question for Mel, perhaps. Can you comment on the company's ability that you've had to better convince the general public and the suppliers of the value-add services that Flight Centre can provide? I'm thinking of, you know, ways you can better monetize this and how that might impact with your departure and Greg coming in. Yeah, just on the working with suppliers and the public to convince them of the services. I actually might get JK to answer some of the or Chris around some of the services because that's their job to sell to the customers. Sorry, Mark, I didn't quite hear you. Thank you. As you said, between me and Greg, there might be some sort of, well, I don't think so, to be honest, because Greg and I have worked together for a long, long time, and Greg has been managing the supplier relations part of our business for years actually. Kind of a bit of a general question. I think one thing to point out is we remained very active with the supply chain during COVID, even though there wasn't much happening in terms of, you know, flights, et cetera, particularly in this marketplace. I think that continuous high level of engagement we have with our supply chain is a real positive for the group. You know, we certainly have had a lot of feedback, and that's why I think we've been busy signing deals, I'd like to think busier than anyone else because. This concept of coming in through one doorway, which was sort of formalizing through the supply division and getting the entire group's business, including now some new segments like JK's independent strategy and leisure, et cetera, is really proving, I think, to be valuable even more so to the supply chain, because through one deal, they can get, you know, this multiple portfolio of corporate leisure brands, and we can actually actively work with them to chase down the customers they want. I'll use Chris's example with the SME space. The supply chain probably is more happy to work with us on getting an SME customer than they are a TMC customer, which often just move around different TMCs. To that point, a lot of them are unmanaged. A lot of them have an opportunity to buy more, to upsell into higher categories of fares and to have more ancillaries, if you like, sold to them. I'm not quite sure what the question was, but I think we will do well and continue to do well at having better or optimal market sort of deal and then work with. That's what I mentioned, we're now working with corporate and leisure in terms of how do we actually grow that sort of product mix? How do we get more components attached, not just in leisure, but in corporate as well. It's quite a good sort of symbiotic relationship. We show where there's opportunities, and they come to us where they think there is as well. I think that will help push that conversation further than it ever has been. Apologies Melissa, if it broke up. I think that touched on it. I mean, I was really just trying to get a handle on how you conceptualize, you know, monetizing better, you know, the supply that you provide to the travelers, you know, whether it's with booking fees or, you know, you mentioned the ancillary services and just really how to try and maximize that. That was useful. Thank you. Yeah o kay, thanks Mark. Secondly, look, I'm not sure who, maybe one for Skroo or Hayden. Look, so far demand has been really solid despite these higher ticket prices. I know you've spoke about them coming off, and I guess intuitively that'll be a positive through a response to volume. Just, you know, are you able to try and give a sense of how responsive do you think the leisure and business travelers really will be to lower price tickets? Can you offset that price decline with volume? his is gonna be a difficult one, but I think that the, you know, probably the mix of business is still skewed towards VFR. You know, the holidaymakers haven't, you know, haven't come back to pre-COVID levels yet. And of course, that's where our, particularly our mass brands like Flight Centre make a lot of their money out of. There, there is. You know, the airlines obviously, particularly the airlines fuel prices, as you saw from Alan, are relatively high compared to pre-COVID. But I think the higher ticket prices are generally there because there's not as much capacity back yet. As the capacity comes back, as airlines want to sell all their seats, there will be these discount airfares come back, particularly in the international routes. Already, you know, you will have seen, flying to New York or L.A. in particular, it was around that AUD 20,000 mark or AUD 18,000-AUD 20,000 for business class and, you know, AUD 4,000 or AUD 5,000 sometimes for economy. Generally, if you look into the future, even at reasonably peak times, that's come back a lot to more normal. It's still 30%-40% above overall, but we think this will come down, not to pre-COVID levels probably in the next six months, but certainly it'll be a lot closer to that, you know, perhaps 10%-20% above pre-COVID by the middle of the year or certainly the end of the year. I think that will stimulate demand, particularly for the, you know, for the international traveler, the holidaymaker, which will be, is quite important for leisure, particularly in the mass brands like Flight Centre. Yeah I agree. Last one, just perhaps one for Adam. I mean, with over 110 shareholders on the registry at August last year, if they all put in 30 grand into this SPP, you'd raise over AUD 3 billion. How do you kind of toss that up against the idea that you're reviewing the capital structures to try and optimize those? Look, the SPP's very well received. It's still open until the 6th of March, from memory. It's been well received, as was the placement itself. Really good to see that. The thing we need to keep in mind is the placement price is looking like it'll be around that AUD 14.60. There's a way up there. I don't think we wanna necessarily be trying to raise too much additional cash out of that at a fairly low share price and diluting our existing shareholder base. We've got a pretty healthy balance sheet there, Mark. We've got AUD 1.1 billion of cash that should grow over the next 6 months with the operating cash inflows that we're expecting. I would suggest that we're not gonna be looking to over raise by much, if at all, out of that share placement. Yeah o kay. All right. Thanks so much. No worries. Thanks. Your next question comes from Darshana Nair Syama with Goldman Sachs. Your line's open. Hi guys. Thanks for taking my question. Maybe for JK, just in terms of Americas in leisure, I noticed that the momentum is probably weaker than the rest of the regions. Can you give some color on any notable trends that you're seeing from the consumers as you're recovering in this region? Sure. Our Americas division is performing to our expectations. Remember that we made some tougher calls in that market during COVID to restructure the business and the operating model. The mix of brands that we operate out of the Americas, one is the student market with StudentUniverse. Some of the challenges they had with recovery was a large part of their business was actually Chinese students, which made up about 25% of the profile. We also operate the independent marketplace. That's performing to expectations, and we expect it to grow. We've really shifted now our intention with the acquisition of Scott Dunn, that we'll be looking at the luxury segment. In terms of our focus, it's performing to our expectations. Okay t hank you. Secondly, maybe about the conversation with suppliers as well. Given that ANZ recovery is now pretty strong, can you give us a sense of how is the conversations proceeding in specifically in the ANZ region, and how do we expect revenue margins to compare on versus pre-COVID, you know, from a volume incentive perspective? Darshana, we're having really productive discussions with the majority of our, I think you mentioned in your intro, the ANZ region, with all suppliers. I mean, as I said, remember, there was a blanket reduction in the marketplace that became effective one July this year here in New Zealand. We've had good discussions about, okay, it has had an impact on our revenue margin, there's no doubt. Do we now have other mechanisms to help recoup and recover, whether that's through volume-based deals, which we are seeing again. It was very hard at the beginning of this financial year because we had two years of a completely disruptive travel pattern in Australia, particularly. We put in place relatively, let's call it, generic flights and travel group deals. We're now revisiting a lot of those. We're getting a bit of a pattern. We can see capacity, you know, into the future. We're having very good discussions about retaining volume deals, balancing the old guarantees versus growth targets, et cetera. I don't, you know, it's hard to sort of pick out anything particular, but yeah, most airlines are working with us. Again, as I said, I think they see that because we're recovering perhaps a bit faster than market in many instances we're having. Sorry. Sorry. I was just gonna say, do you wanna talk NDC as you said- Oh yeah. Well, the other one is NDC. I think that's one of the things I pointed out in the deck. We have been very proactive in this space. We've spent a lot of money. We're trying to make sure that we are a market leader, and I think we are. We will be technically fairly ready by about middle of this year for fairly broad distribution to be able to access NDC content with an airline that gives us the right commercials. Again, as I said, remember, the servicing capacity has to be there as well. Again, we're trying to position ourselves as an air leader. I think we have been for the 30-odd years I've been in the group, and I think we're coming out of COVID in that space again, and I think that's showing in our supplier, relations and procurement area. Okay. Thank you. Lastly on, you know, the ANZ business and corporate. Thanks for the color for the breakdown of new account wins in different regions. Can we understand if there's any major business spending onboarding in ANZ, and how should we think about corporate outlook in this region? It's a good question. Actually, very strong this year. There's no one huge customer being onboarded at the moment. We've got a collection of great brands being onboarded across different industries. Actually, ANZ's performed very well in the last 6 months from a sales perspective, and many of those customers are being onboarded as we speak. That's in both brands. Obviously, more of the household brands you've heard of typically trade in SCM, but in both large market and SME, ANZ, you know, particularly Australia, is performing very well. Okay. Thank you. Your next question is from the line of Brian Han with Morningstar. Your line is open. Thanks. Couple from me. Adam, a question on cash flow seasonality. The expected conversion in the second half, would it be materially different to historical trends pre-COVID, or will there be any unusual factors we need to be aware of? No, I don't think there should be anything too unusual in there, Brian. I mean, the only, the only thing you'll see if you look at the balance sheet, the contract assets that we've got, are a bit larger and have grown fairly significantly during the, during this first half. We should recover those. There might be a slightly more positive skew than what you would typically see in that first half. Other than that, I don't think there should be too much else that would be a significant difference. Fantastic. Chris, in the corporate division, what% of the TTV do you think is on a fixed fee basis? Do you remember what it was pre-COVID? We have two types of fee in corporate. We have a management fee, which is typically a cost-plus model, and then we have a transaction fee. Actually, neither are really fixed. One is a percentage over cost, and the other one is a fee for a service. We can have different types of service fee, a booking fee, a change fee, an account management fee, a consultancy fee. The change between Transaction fees and management fees. In SCM's gone more towards management fees, but transaction fees still remain overall in corporate, the majority of the fees that we charge. Okay. James, I understand that Chris probably has more visibility to provide a TTV picture for the full year. Do you wanna have a go at what TTV might be for leisure for this year? Look, I think it depends on capacity coming back, but I think our the forecast of TTV, you can probably reverse engineer it back from the numbers that are in the guidance level there. We're performing to expected TTV. We'd expect it to be to the tune of about AUD 10 billion, thereabout. Great. Okay, before I go, congratulations Mel, on your retirement. I take it that you'll be adding a lot to Scott Dunn's TTV over the next few years. They haven't paid me that well throughout my career here. I don't know. Thank you very much, Brian. I appreciate that. Thank you. Your next question is from the line of Abraham Akra with Credit Suisse. Your line is open. Thanks. I think my first question relates to Adam. Within the leisure result, I'm just curious whether the brick-and-mortar online channel and independent agents channel are all profitable on the profit before tax line in the first half of 2023? You want to take that one, JK? The profitability of each channel? Yes. Yeah. They. When we look at profitability of the channels, independent, that they're all profitable at this stage. We've got one or two of the online brands, within the overall portfolio, that are actually at a break-even level. Overall, that's on a year-to-date basis. When you look at them on an individual month, coming out as demand has picked up in the last quarter and going into the new year, they're profitable. Yeah. I just want to confirm. Brick-and-mortar is also profitable for the six months? Yes. Yeah. Perfect. Also on the back of Wei-Weng Chen's question in regards to corporate. At what level of revenue recovery in corporate do you expect for the profit before tax margin to exceed the FY19 level of 3%? We don't expect that this year. No. What, what time period are you referring to? Since for the four or six-month period or for the year. Revenue recovery is due to exceed pre-COVID levels soon. At what level does the revenue recovery have to be in corporate for the profit before tax margin on TTV to be 3% or above, like in FY19? Yeah. We, it would certainly need to get, at this stage, above 100%, simply because of the increased costs we've got this year. What we expect to see over time is that, you know, our ability to optimize the trading volume means that we should get back to that level of profitability. I think the one challenge we're gonna have this year with getting to 3% is the fact that SCM has come back as a bigger portion of the business than Corporate Traveller. If we get to 100% revenue today or in the next few months, SCM is a larger percentage of that, and SCM has always and continues to operate at a lower profitability level. Again, we are seeing Corporate Traveller growing rapidly. Over time, we should see that percentage of CT with overall volume increasing. Great. Thanks for that Chris. I guess, lastly from me, for the leisure business, maybe pass to Adam again. What level of flight credits remain in the system? Will they continue to be extended by the airlines? Yeah. Well, actually, I'm not sure on the exact number. We've watched through most of them now at this stage. We've got some remaining still that have been extended out a little bit further. Most of the bookings coming through now are mostly kind of new sales. Awesome. Thanks for that, Adam. That's it from me. Thanks guys. Thanks. Thanks Abraham. Your next question is from Sam Seow with Citi. Your line is open. Morning guys. Thanks for taking my question. Just quickly, volume-based revenue, talk about it coming back. Can you maybe just provide us some clarity around how soft that line currently is, and maybe the shape of the recovery profile, maybe second half 2023 versus first half 2024? Sam, I don't think. We're sort of all looking at it with a bit of a puzzled look. I don't think we caught what you actually said there. Could you just run us through that again? Overrides or backend revenue. Oh, overrides. Overrides. Yeah. Yeah. The overrides that we've got for the first six, remember that, particularly in the Australia-New Zealand market, where we're basically closed down with international travel for two odd years, we're starting to see a recovery of the override profile back to pre-COVID levels for pretty well most categories. Air has still got a little bit to get there, but that's, as I said, as a result of we're just starting to see the increase in volumes coming through. We're pretty confident over the next 6-12 months we'll return to a similar level that we were seeing pre-COVID. Yeah, air is still probably the one that's just, it was a bit softer in the first 6, but we're starting to see that change. The latter part of that last six months, the volumes start to grow, and then into this year as well. The Australia-New Zealand market is still in a very unique situation because of the capacity constraints that JK mentioned as well. By the way, we're starting to talk to some of the Chinese carriers. We're seeing at the moment about two of them out of four are similar in the system. Those sorts of things will impact these conversations. Yeah, slightly softer on air, but recovering, and most other categories were pretty well as per where we were pre-COVID. Got it. Then the AUD 0.12 and AUD 0.07 ticket price decreases that you mentioned in January. What base is that? Is that December? Does that impact your kind of, you know, supplier override bucket agreements if the ticket prices are coming off? Just trying to think, is that? Just trying to see how that plays out. Are you referring to our price reduction month-over-month? Yeah. Yeah. That was December. The January average ticket price is lower than the December ticket price. Yeah. In terms of the ticket price and the volume, you would expect if the ticket prices start to drop, the volume starts to pick up. Bear in mind, too, that the airlines, by and large, control the pricing. If the airlines are dropping the pricing, it's probably to stimulate a bit of volume, we think that volume will flow through. Yeah. last time- Sorry, go on. I was gonna say, Sam, it's an age-old problem, the trade-off between cheaper prices, more volume. When we do our override deals, we have a really good look at what's in the system, capacity, airfare expectations. We already have those conversations with the suppliers. If there was something ridiculously happened, you know, that would cause us to come back to the table if that dramatically affected the volume, particularly obviously for us on a downward trajectory. We do a lot of, number, modeling, pre any discussions and make sure we're talking with the carriers about what they're seeing as well. Yeah. Just to add to that, Sam, even though there's been a price reduction month-on-month, we've actually seen volume growth as we've gone into the new year, which is increased demand coming through and seasonality trends that are actually driving greater volume coming through. It's, by the way, it's a very different profile destination by destination, you know, you know. Again, that's a blended average. It's hard to read much into. We don't think there'll be too much further price reduction if we're honest, for the next sort of six months, I think, which is what's very soon. Yeah. Yeah. That's cool. Then just quickly, housekeeping on cost margin obviously looks good below 10%, but inflated TTV, I'm guessing, helps in taking out those employee retention costs. Just wondering, did you have any level of overstaffing or a number that you'd call out? What kind of cost margin will you need to hit to get your 2% PPT? No, we didn't have any overstaffing. I don't think overstaffing's been too much a problem other than in corporate where, you know, Chris has probably, you know, pre-invested, as he was talking about earlier in some of the implementation teams and that's probably kind of ahead of the curve. I don't think I'd call it overstaffing in as much as we wouldn't see that reduced, but it's those levels are now there ready to handle future volumes coming through. In terms of the margin, I mean, look, there's no doubt that cost margin's being impacted a bit by the inflated airfares, as has the revenue margin when we're comparing the reductions that we see there. It's also been impacted by the success of our strategies, particularly in leisure of really driving forward our low-cost channels. It's also been impacted by the structural changes that we've fundamentally made to the business. Lastly, the ongoing discipline that I've got to say has been pretty impressive internally, in terms of how we're managing that cost and getting the right balance between cost reduction or cost stability, and investing in the areas that we need to keep a line of sight, not just on our monthly or six-monthly results, but over the next three- five years as well. I think all those things have played a bit of a part there, Sam. Again, we haven't broken down where we believe that the revenue margin or cost margin need to get to to hit the 2%. I would say that my expectation is that our cost margin will continue to fall from where it is right now. Whilst we'll also see revenue margin in brands continuing to improve, it'll be a mixture of the two that really get us to that combined 2%. There's a mix, a bit of a mixed bag between the two. Got it. Thanks for the color. Appreciate it, guys. No problem. Your next question is from Belinda Moore with Morgans. Your line is open. Okay. Good morning everyone. If I could potentially ask three questions. First of all, Chris, around corporate, you've delivered AUD 80 million today. Are you sort of expecting that sort of 35%-65% EBITDA split like group guidance? Maybe then a couple of questions for Adam. Adam, the other division, negative AUD 28, can you give us a little bit of a break up around corporate costs versus the other mix in there and how we sort of see that division for the full year? Then, you know, this net interest line, you know, today the corporate costs alone, AUD 41 versus AUD 27, how are you seeing that for the full year? That, that would be my questions. If I could just, yeah, reiterate, congratulations to Mel on all the success you've had in the travel industry over the last many years, and all the best in the future. Thanks Belinda. Chris, do you wanna start? Do you want to talk about your AUD 80 million EBITDA and where you see that going over the second half at a high level? Yeah, sure. Well Belinda, I don't think we're breaking out guidance based on corporate and leisure at this stage. I think, you know, typically what I will say is that the second half of the year in corporate is generally stronger than the first half. We see that trend continuing. Just in terms of the other division there, Belinda, and the main sort of drivers in that number, particularly as I look at it compared to last year, I mean, we've now got TPConnect investment in there. TPConnect is a really important strategic investment for us, particularly as we're adapting to and implementing our strategies around NDC capability. That business had a net investment or loss of around AUD 4 million for this half, which wasn't there last year, because the acquisition full control only took place in late April, I think it was, of 2022. That's in there. Our Pedal Group is in there. The Pedal Group has, as expected, had a much softer start to this financial year than previous year. You'll remember, I think, Belinda, that over that COVID period, Pedal Group really outperformed. As the market there has started to stabilize, results are less than what they were last year. That's about an AUD 9 million impact in that other segment from the Pedal Group change in results. We had a good chat with them last week actually. I think the team there at Pedal got some really good strategies of how they continue to generate sales in the market. They've got a lot of stock there. They've got some new product coming in, which is the really high-end and e-bikes and those sort of things. The next couple of years looks pretty good, I think, for Pedal. Certainly at the moment, they've come off first where they were in the 2022 year. The other bit that sits in that pillar now is our experiences businesses. Topdeck, Back-Roads Touring, Discova, Cross Hotels, Grasshopper, a few of those, AVMIN. Some of those other businesses sitting there, they've actually improved like for like versus last year, which is great to see. Still in a loss position overall, but we're hoping to see that flip to a small profit in the second half in that experiences business as well. The other piece that sits in there outside of the sort of head office corporate costs is our GOGO wholesaling business over in the Americas. That's had a couple of million loss for the six months as it's starting to increase and the leisure business over there, as JK spoke about, starts to build. They're the key things that sit outside of the head office costs. As you said, AUD 28 million loss for the first half. We expect that over the course of the second half, that'll improve a little bit. I'm expecting around about an AUD 50 million full year loss in that segment. The main things that should swing that a little bit for us, I suspect, are gonna be in the Pedal Group. We will see a second half seasonality swing there. We'll get a bit more profit AUD 2 million of more profit coming through, as our share of that result. We'll also see the touring and in-destination businesses hit their peak period late this year. We should get some upside there versus the first half as well. There'll be a bit of a swing in those non-corporate or non-head office costs in the second half that should see it land somewhere around about that AUD 50 million mark. Thanks. That's very helpful. Just a bit of color around this, you know, net interest that sort of is obviously blowing out quite materially. Hang on. Let me just have a look at that. Net interest is made up of a couple of things in there, Belinda. You've got interest income, obviously, on the cash holdings that we've got. That's largely offset by direct interest expense on the debt facility. They're both around about AUD 12 million, which largely offset each other. Our lease interest is about AUD 4 million, and amortization of convertibles, which is the big one in there of AUD 24 million. That move, in particular the amortization of the convertibles, has increased by about AUD 8 million half on half. This one we've now got the full impact of the second set of convertibles flowing through. I expect the net interest will actually, again, improve a little bit in the second half. Just as our cash builds, we'll get a bit more of a return. Clearly interest rates when you're holding cash is a positive, so we'll get a slight improvement coming through there. Again, I would expect that net interest will be a slightly better number for the second half versus first. Thank you. Thanks Belinda. There are no further questions at this time. I will now turn the call back over to presenters for closing remarks. Thank you very much everyone for joining us today. A bit of a marathon effort, this one. We're around obviously, give us a call if there's anything you need. We'll try and get back to you as quickly as we can. Thank you, Mel. Do you wanna make any closing remarks, Your Highness? No, but it's been very nice speaking to you all over the years. I've been trying to work out how many years I've been doing this roadshow. It's about 12. I'll see some of you over the next few days, but thank you. I think Flight Centre Travel Group is very well placed to capitalize over the next year or two. I, you know, I'm certainly gonna be a self-funded retiree looking for my shares to deliver a return too. I feel very comfortable investing in this company as I leave it. Thank you. Thank you, Mel. Thank you, everyone. Thanks everyone. Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect.