Thank you for standing by, welcome to the Hansen Technologies FY 2023 results conference call. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key, followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Richard, sorry, Andrew Hansen, Managing Director. Please go ahead. Thank you. Good morning, everyone, thank you so much for joining the call and your interest today in what is always a very busy time around results. My name is Andrew Hansen, I'm the Managing Director of Hansen for some 35 years, and I'm joined today with Graeme Taylor and Richard English. Just as a bit of background, you'll know during the year, we appointed Richard English as the new Chief Financial Officer of the company, more recently, with Graeme assuming the role of CEO, which is really overseeing the, some of the day-to-day operations for me. I'm still heading the company up and really driving the strategy, some of our interest in M&A, et cetera, allows me some more time to focus and concentrate on the company. This transition has been in plan for some time, with both, certainly with Graeme, who worked very closely together for the last 10 years. That's a bit of a background on who's actually joining on the call today. I'll run through a number of slides today. Just on some housekeeping matters. If we have any technical issues, we'll just take a short break, and if anyone's affected, and then we'll advise you accordingly when we kick off the call. We have a reasonable, busy agenda today, but there'll be plenty of time for questions at the end. For those, I know a lot of people have listened in to Hansen before, but it's be remiss of us not to actually go back to what Hansen actually does. As we know, we really take complicated products and services and, and build them. We provide that via, you know, Configure, Price, Quote, across really the gas, electricity, water, and communications industry. Basically, guys, we're at the heart of the cash cycle of our customers. We're close, basically, really, to the cash register to our customer, and it's all mission critical. What the services we do is all about the cash generation of all of our customers. We own our IP, and we have-- we're very, very proud that we have less than 2% churn of our customers, and that's really based on the continual investment we make in our products and really trying always never to give our customers a reason to want to leave us by maintaining very fresh software applications and meeting their requirements on an ongoing basis. We have a diversification location. It's one of the, the beauties of Hansen. When we think about it, when I first came here, our business was just an Australian-based company, whereas now probably only 10% of our revenues derive from Australia. We are a true global company, you know, led by a great team of management, have been here a long time to globalize our organization. We also enjoy predictable revenue streams. I think the other thing about Hansen, which we're extremely proud about, we've always been cash generative. That's a nice thing. We've always made money as we go forward. Just a little bit further on the background of Hansen, you probably know that Hansen, the business, was really founded back in 1971, we listed in the stock market back in 2000, some 23 years ago. We have customers which operate in over 80 countries, the two main industries we service really is the utilities and telecoms. Really for those industries, as you'd understand, are going through rapid change and evolution of those two respective industries, which we don't probably need to go into at this point now. We'll cover that later. Basically, we are the essential ingredient for all our customers' commercial business model. You know, obtaining a customer, selling them a product, provisioning that product, looking at their usage and billing, it's the end-to-end life cycle that we get involved in. Certainly, I know that there is a lot of questions about M&A, which I'll touch on a bit more, but we've always been found a pragmatic approach to really looking after the organic growth of our business. You know, we don't believe in profitless prosperity. We're constantly trying to find ways that we keep on looking after our customer base. The inorganic M&A is also something which Hansen focuses on, and to one we've been very, very successful and never had a failed implementation of a new acquisition. We'll give you a bit of a brief run-through of some of the financials, and then we'll drill into a little bit more detail via Richard and Graeme as we go. Guys, this has been an amazing year for us. You know, we, we think about COVID as a, as a past, the, the transition of Hansen and most businesses to actually go through COVID and come out the other side and being a delivery renewed business. I think you'll see that by our results because it, it is an outstanding result, really based on the hard work of a lot of people. In a normal, typical year, we'll be securing new logos, we're enjoying lots of upgrades and renewals to existing customers during the year, which is very much just a business as usual for Hansen. We've certainly uplifted our approach to ESG. This is certainly a, a, a cost to cut this through, but we all see the benefits of ESG have, as any global organization does, and it's something which means a lot to our staff as well, about our green, about our emissions, et cetera, and that Hansen is doing the right thing. I must thank Peter Beamsley, who's actually our Head of Investor Relations, who's actually been chairing that and the hard work that Peter's been doing in that area. Expected organic growth in 2024 has been the best yet, certainly taking advantage of those rapid changes. When we say taking advantage, it's just being making sure our software is current, it's relevant for the, the modern times. Whether that's our software sitting on premises, it's sitting in the cloud, it's a SaaS. At the end of the day, our application is our application, and the way we house that is totally up to ourselves as we do that. Continue to rapidly pay down debt. I think that's probably the most outstanding thing about this business, and anyone would have seen. I think I'll touch on it later, but, you know, in the last few years, you know, between paying out to our shareholders and paying down debt of AUD 200 million in cash, for a business our size, I think, is second to none. Our balance sheet's never been, never been stronger, and once again, we, we talk about acquisition. I think we invest the money on the behalf of all shareholders. Every person in Hansen spends money like it's their own, and I think it's the mainstay of our business, always moving forward. Our next, next acquisition will be just around the corner, but we will never buy a business which is not going to be earnings accretive, is not gonna be strategic, and is not going to be a business which is going to harbor or hinder the business as we have it today. As far as the results, certainly on the revenue side, organically, you know, 5.2, which certainly has exceeded guidance for the year. EBITDA margin was, was great. I know that we announced at the half year that we're gonna have a stronger second half. For those who took note, who bought shares in Hansen, have been rewarded for taking us on what we said, and I think that's come through with our second half EBITDA margin of 33.5%. When you think that's way above our historical margins. NPAT $32.1, earnings per share up 1%. Dividend, reflecting once again, a strong cash position, we have returned 47% of our NPAT to our shareholders this year. Hansen paying dividends, once again, there's some reliance on the fact we're a cash-generative business. The most important thing, you know, effectively, well, today, we are net debt, so we have, you know, our cash is very strong at the moment, and we're just working through some of those remaining loans which we have overseas. To be net debt, as quick as what we have over, over that last acquisition of Sigma a number of years ago is fantastic. I've got on page 11, just some work, which is something we don't normally-- we, we, we probably don't have a lot of direct peers in the world because Hansen's a bit unique as we compete against the, the IBM and Oracles and the SAPs. We wouldn't say they are direct competitors, but I think we've just outlined here just how we've actually gone against the Small Ords and the All Tech index and Hansen's performance against that. That's probably coming down to probably the perceived dependency which people can have on Hansen, that's cash-generative nature, why people think that we're a pretty safe bet on, and we thank everyone for their investment. Earnings per share up 18% on a compound annual growth since 2019. We think we're in a great position, really, to take advantage of opportunities as we go, just based on our cash position. There, there I go, I understated. I said it was nearly AUD 200 million. In fact, I think on the note there, it's AUD 211.5 million that we have repaid back in debt and to our shareholders. Maybe a little bit more detail. Would you like to take them around, Richard, and just talk a little bit more about that? Sure. Thanks, Andrew, and thank you all for joining the call. I think, in the last 12 months, there's been an increased level of interest in Hansen, and we now have circa 10 analysts covering our stock and renewed interest in the shareholder base as well. It's been a great year and between Andrew, myself, and Graham, we'll walk you through the financials and the FY 2024 guidance. First up, revenue, we've had a record year. For those that have followed Hansen, circa AUD 312 million of revenue, the highest we've ever had in Hansen and 5.2% growth rate. Pleasingly, that was ahead of both of our guidance and also the consensus in the market. At the start of the year, we had talked to a growth rate of 3%-5%. We reiterated that at the half, and pleasingly, have come out at 5.2% for the full year. We are, as always, robust, predictable, and I think Graeme will talk to you shortly, the exciting FY 2024, where we certainly have some tailwinds and some momentum behind us. From a revenue standpoint, our key metric, all heading in the right direction. Underlying EBITDA, so again, we came out at the half and also last year, and advised that we would be looking to guide to 30% margin plus, and great today to be able to say that we've come in at just under 32%, maintaining margins well and truly above our historical averages. For those that follow Hansen, 25%-28% margin is sort of typically where we land, and to come in at 32% for the year, during what has been a pretty challenging period around the world, is just outstanding. You can see our CAGR growth rate of 12% since FY 2019, just really speaks volumes to the profitability and predictability of Hansen. For those who want to look into the detail from a reported basis, our EBITDA has come in at 103.4% versus 97.6% last year. Hansen always talks to EBITDA excluding the FX swings that go through the P&L. Overall, 99.5%, well, and truly above our guidance, and we're thrilled with the result. From a NPAT level, obviously, when it's all said and done, net profit after tax were up 2.1%. It's worth highlighting here that the tax impact year-on-year plays a part in this number. Last year, our effective tax rate was 18%. This year, it's 21%. Last year, we had some tax losses, we soaked up, we had some tax strategies in place, which we don't have in FY 2023. Twenty-one percent effective tax rate does impact the bottom line, but nonetheless, profit before tax up 6%, after tax, up 2.1%. The number to draw out here clearly is the CAGR growth of 18.8% over the last 4 years, which we think is outstanding and great shareholder value. If you'd like to move on to slide 14, the earnings per share is obviously a critical metric for all shareholders looking for shareholder value and accretion. This is where Hansen really succeeds. The reason we succeed here is our ability to leverage our balance sheet. I'll talk to borrowings in a second, but the ability to use debt to acquire companies, Hansenize those companies, improve their margins whilst paying down debt, is the clear reason why earnings per share is up from 10.9 in FY 2019 to 21.1% or AUD 0.211 in FY 2023. We will continue to use our balance sheet. We have banks that are very supportive. We have an appetite for leverage that will support the next acquisition. we anticipate that earnings per share will continue to improve. Now, net debt is an area that we always talk about cash in Hansen, and I'm so pleased to say today that at the half, we had, we had talked to a full year net debt position of heading towards zero. and it's actually turned out that way. We paid down AUD 34 million for the year. As of July, we were in a net cash positive position. we, of course, still have borrowings, but our cash exceeds our borrowings, and we've exceeded where we thought we would be. to be in a position where effectively our leverage ratio is now zero, after what's been four years of rapidly paying down debt is, is quite something. moving on to dividends per share. Look, we've declared a AUD 0.05 interim dividend and a full year dividend of AUD 0.05 as well. It's partially franked, and for those that know Hansen, you will know that our profits are largely derived offshore, where we don't get the benefit of franking credits. In the last year, we've returned circa AUD 20 million to our shareholders via, via, dividends or DRP. When I look at these two charts here, I'm particularly proud of the fact that in the last 12 months, we've returned circa AUD 54 million to either the banks or our shareholders. Moving on to slide 15, and this, I'd like to spend a bit of time on slide 15 because it does talk to a level of revenue transparency that we've been talking about disclosing this year. There are three key revenue streams for Hansen, the first one being support and maintenance. This is really the lucrative, underlying, predictable, steady cash flow of the business. Every one of our contracts around the world has support and maintenance built into the contracts. You can see here that progressively over time, there is a steady growth pattern of 3.5% since FY 2019. The small one-off blip that you'll see in FY 2021 is due to a previously disclosed unprofitable call center client that we returned, and of course, since then we've recovered our numbers up to $75.3 million in the second half of this year. Up 5.2% year-over-year. As I said, a very, very predictable, robust revenue stream for the business. Moving on to license revenue. We think it's very important to highlight that licenses play a part in our business from a revenue standpoint. Obviously, 10% of our revenue is derived from licenses. The real, the real point that I wanted to draw out here is, there is some fluctuations in our revenue year-over-year and half-on-half based on license revenue. This comes down to accounting standards that were introduced back in FY 2018, and therefore, revenue is often taken at a point in time as opposed to over the length of the contract. We often have to spend a bit of time talking to shareholders and analysts around the volatility in the revenue. The reality is, we can't control this. We don't try and sign contracts to take revenue upfront. Sometimes accounting standards play a part in that. Nonetheless, we're up 12% CAGR on license revenue. It remains a part of our business, but at only 10%, it doesn't swing the revenue number as much as it might have in the past. The most important area that I wanted to spend a bit of time on is our services revenue. In, in other businesses that we've looked at, there is a lack of predic- predictability in services, but it's actually not the case with Hansen. We own 100% of our IP. The applications we work on are, are ours, and as, as a result, there are four key areas of services revenue that we spend all of our time working on. 90-95% of our revenues and services are fully predictable and known well and truly in advance, which is very uncommon in the tech space. The first area is around upgrades, and we talk to our clients two, three years out regarding upgrades. They are known, we, we resource them suitably, and we consider them to be highly predictable in nature as they recur on a recurring nature. The second area is around market regulatory changes, and within the energy industry in particular, there are market changes happening every month, every quarter. We know about these changes in advance. We ensure that we have resourcing in place. They are, in our minds, 100% predictable in nature. The third area is around embedded dedicated teams, and in many of our longstanding customers that have been with us for 10+ years, we have a mix of staff that actually sit within their buildings, working really as an extension of their IT department. They are 100% dedicated, 100% predictable in nature, which really leaves only one quarter of the services revenue, one part of services revenue as unpredictable, and that is the implementation of new logos. Of course, we have new logos every year. Some we disclose, some we don't. The overall services revenue makeup is highly predictable in nature, and I thought it was worthwhile explaining that on today's call, that three of the four buckets of services we know well and truly in advance. The other area that we'd like to disclose today is customer diversity. There's a number of reasons for this. Obviously, having 33% of our clients in our top 10 is, it speaks volumes to our not having all the eggs in one basket. It's more than that. Our biggest client is 7% of our revenue. However, our top 10 clients make up different products, different industries, different geographies, different currencies. The, the, the strategy with Hansen has always been to never have all your eggs in one basket. This pie chart here clearly highlights that there is no 1 client that can cause any significant stress to, to the Hansen financial numbers. We have long-standing tenures with these clients. Our top 10 clients on average, have been here for longer than 10 years. We remain heavily engaged and invested with their businesses. I hope that's been helpful to those listening in on the call to understand a bit more about the revenue. If you then move on to slide 16, nothing here is particularly new on the left-hand side. We just wanted to disclose the revenue by vertical between the energy sector and the communication sector. You can see back in FY 2019, we're obviously skewed towards the energy business. Speaking to our strategy around never having all of our eggs in one basket, we then diversified and invested heavily in a new product in the Canadian market. This then rebalanced our communications and energy revenue verticals, which you can see thereafter. I think in the year that's gone, it's circa 53%, 47% between both verticals, which is, which is a great split. In the bottom left-hand table, you can see then the revenue make up by region. Of course, the EMEA remains a key part of our business. They are very dynamic, very progressive. There's a lot happening in that space, and we're at the forefront of that. Of course, in Asia Pac and Americas, business continues. There are plenty of upgrades and new logo opportunities as well. Across the board, in both of these two charts, you can see again, the diversity that is Hansen. Finally, in the revenue on the right-hand side, we've always talked to an over number of circa 5.2%. The reality is, when we look at what I've just described on the previous page, the business has grown by 7.3%, excluding license fees. Now, considering that these are highly predictable in nature, this is, this is an outstanding result. Hansen has typically talked to a 2%-4% growth rate. 7.3% for these two revenue streams is outstanding. Obviously, licenses will vary year on year, depending on when the revenue recognition lands. We're anticipating license fees in FY 2024 to be slightly higher than where they, where they've landed in FY 2023. Nonetheless, 7.3% on those two revenue streams is something that we are particularly proud of. Finally, moving on to slide 18, please. Cash and capital management, this goes to the core of, of why we are Hansen. We talk to our-- One of our key mottos is: spending the money like it's your own. There's no point being in business unless you're generating substantial cash flows. We are a tech company that's done this for a very, very long time. We're very proud of it. We see plenty of tech companies that are growing, that don't necessarily generate the sort of cash flow that, that Hansen does. In the past 4 years, we've returned just under AUD 212 million to our shareholders or our banks, which is just outstanding from our, from our point of view. In the cash flow at the bottom of the page, you can see underlying EBITDA of about AUD 100 million. There is a modest buildup in working capital of AUD 7.8 million. At the half, it was $16.1 million. We did say that would be unwinding, and it has. Obviously, there is some growth in our business of circa $15 million of revenue that contributes to a small portion of that, of that working capital buildup. We have two very, very large implementations underway that have clearly defined billing schedules. I think it's very, very important to say here that we have no bad debt issues. We deal in the tier one, tier two space, so no concerns from a, from a bad or adaptable debt provision. From a CapEx investment, last year we invested $6 million, this year, $4.8 million. We continue our hardware refresh in, in all parts of the world, but in particular in EMEA. We think, depending on how the business cases stack up in FY 2024, CapEx will be in the range of $4 million-$5 million again. Graeme will shortly talk to product development, R&D is core to why we are successful. $21.1 million is our largest investment to date. Last year was $16 million. Part of the increase is the catch up, due to a lack of capacity during the COVID years, we've managed to catch up our capacity and invest in our products in FY 2023. We have a very, very clearly defined roadmap, next year, we will guide to an investment of circa $20 million. Every product receives some type of investment. There is a clear roadmap in place. We have plenty of opportunities to grow our products and retain existing clients. We think that AUD 21.1 million is, is clearly money well spent. Just quickly on interest on debt and tax, the AUD 12.1 million. Everybody's aware that interest rates are rising, and we are in the fortunate position where, because of our ability to pay down debt so quickly, our interest burden is, is perfectly manageable, and we think in the next 18 months, the, the interest component will be, will be extinguished altogether. Moving across to the right, our debt repayments. Last year, we returned AUD 34 million to the bank. Again, AUD 33.8 million this year. You know, a two-year payback to the banks of AUD 68 million is, is something we're particularly proud of. Then, of course, dividends back to our shareholders net of DRP is AUD 18.4 million. Overall, an outstanding year from a cash flow perspective. Final slide. Thanks for your patience. Slide 19 on borrowings. This is one of the charts that I always enjoy talking to. FY 2019, we started with AUD 186 million of debt. Fast-forward four years, we've got AUD 54 million of debt. We are now net debt zero, retiring another AUD 34 million in the year. We continue to have bank support from, from many of our very supportive banks, two in particular that have been on the journey with us. With a leverage ratio of effectively 0, we are now in a position to find the right asset, leverage accordingly to acquire them, integrate them, and then drive earnings per share. Final point, dividends per share. Again, AUD 0.10 declared this year, AUD 80 million returned to shareholders since FY 2019. Again, very, very proud of our numbers and the ability to, to reward our shareholders that have been on the journey with us. Thanks for listening to the financial section. I know there's a bit to get through today. I'll now hand over to Graeme Taylor, our new CEO, to talk through R&D and AI. Over to you, Graeme. Thanks, Richard. A little bit more color on research and development. I think that it's clearly an area that we continue to invest in our products, as Richard mentioned. I think it's very important we recognize the significant state of churn that we find both of our sectors in at the moment. We've got technology changing with 5G and the adaption and the monetization of 5G within the telecoms. Of course, that's driving a need for us to continue to invest in our products and work with our customers to be that loyal technology partner. Also, within the energy sector, I think we all see it every day of the week as we move about doing our day-to-day activities. Green energy is becoming very much part of our lives, there's various challenges around introduction of electric vehicles and so on throughout the globe. Of course, Hansen remains at the forefront of making an investment in our products to ensure that our energy customers are in the best position they can be to support that ongoing activity in the market. This has seen our investment grow somewhat over more recent times. I think it's important also to note, as Hansen's a global company, we get the advantage of seeing many of these adoptions overseas before they hit some of our other markets. Hansen's in a unique opportunity to really leverage this investment quite well as it looks to service its customers from around the world. I think it's something we will certainly continue to see in our business. Technology companies need to keep investing to stay just in the best position possible to support its customers. Of course, we've got a proven track record with a very low customer churn rate. I think research and development and investing in our products is, is part of that equation. Moving on to a piece of technology that's very much out there in the marketplace at the moment, artificial intelligence. Of course, you know, it's something that we are very conscious of and are looking and working with as we speak today. I think it's one of those things that Hansen's very much aware that it's an area of future development where we need to move carefully and make very, very well-thought-through recommendations to our customers around the adoption of this technology. It's a very, very exciting space. We're working on a number of proof of concepts at the moment as we look to see how this technology could benefit, not just ourselves, as we look to, to find more efficient ways to do business, but also to make recommendations to our various customers around the world, how this technology could be adopted to better service their customers, and deliver a great experience into their respective businesses around the globe. There's a lot of reading out there. I'm sure people have taken it and used the technology themselves to perhaps draft a letter or do something at, at the very basic levels of this. As the industry looks to, to adopt it, of course, we're wanting to make sure that the strengths of our business around IP and so forth, continue to be maintained, and we're able to we're able to protect our customers as we move forward in this space. Lots of exciting developments to come here, and we look forward to bringing this into the industry over the coming 12, 18 months. We'll continue to make that investment as appropriate. Look, I'll now hand back to Andrew. I'm sure he's got some more news in respect to M&A. Thanks, Graham, for setting me up. Andrew's got some more news on M&A. We've always said you could actually do the, the, the guidance. I might take that off you for setting me up. Look, I think it's important when we, we talk about the position of Hansen and the fact that we've actually paid down the debt and our strong balance sheets. Look, we've never really changed our mantra, the way we actually look at things, to be honest. We know what's happened in the last three or four years. The, the valuations which are being put on businesses and transactions which have been taking place, were valuations far greater than Hansen, and even businesses we saw would be quite strategic for Hansen, where valuations didn't make any sense for our investors. We remain very, very- ... focused on achieving an outcome for shareholders, a great outcome for the Hansen. That's the way we're looking. Guys, we are busy, we are looking at businesses. I think it's an important point, probably, where we sit at the moment now, some quite specific targets, which we think we are the natural home, have not been transacted. We know, which it just comes down to valuation, that we sometimes, I think, the, a seller can ask whatever they want for the businesses, but the price is always set by the purchaser and what we're prepared to go and pay. I think whilst we actually see we've got the money and we can quickly do it, we're not particularly perturbed about the cost of money at the moment now, 'cause we think that provides a better opportunity. I think when cash was so cheap, we certainly had some assets which were attracting the interest of private equity with a low cost of debt. We think that we've always believed very strongly that Hansen organization has enabled us to quickly turn businesses around, and as we've said, every business we've bought, we've probably increased the profitability by 50% as we've actually gone. We think that the markets for us. Look, we're pretty attracted to the North American, European markets, primarily because we're already there. One of the advantages Hansen has is we've had operations in those countries for a long time, so we understand the culture, we understand the legalities and certainly the financials and many of those things. Dealing with staff and churn just really helps us. We're always focusing on that. I think the other one is we are, certainly have interest in what would be a third vertical for the company, and I can assure you, we're doing a lot of background work because the idea of buying into a new vertical and taking one of the fundamentals of Hansen, about dealing with, with data, regulatory, and all those things that we know we're very good at. We're gonna make sure if we are to buy into a new vertical, that the effect is gonna be a long tail, that we see other acquisitions which we can build on top of. I think we should be rewarded for being patient and not wasting shareholders' money. We're all here, I'm certainly here for the long haul, and any investment we do, we want to get a really good return on it. Be assured, guys, I just want everyone to know we are not refusing to transact. We need to transact, which is earnings accretive and also is gonna be a strategic benefit to our organization. The M&A pipeline is actually quite well advanced and we certainly look forward, and when we do that announcement, I'm sure everyone will be very delighted with that when we bring that announcement to marketplace. Graham, you one, we'll let you talk about the one everyone's only joined the call to listen to the guidance. Thank you, Andrew. Well, I think most of you have just seen, seen the guidance out there. Look, on the back of a great year this year, I, I think we're in a good position to move forward in FY 2024 with a high degree of confidence behind us. It's, it's been great that we've been able to stabilize the business. You know, I, I, I see our ability to attract talent as having improved over the last 12 months. We're now, have got a reduced level of labor churn, and I think we've got our people back in the best position we've probably been in the last three years. You know, we've, we've got a very loyal and strong staff to assist us as we move through FY 2024. I think we continue to make investments. We, we feel that with the industries in the state they are at the moment, getting ready for further, further development opportunities, we're predicting somewhere between 5%-7% of organic revenue growth for, for the FY 2024. We believe that we can maintain costs and continue to deliver a margin, slightly in excess of 30%. I think just to put that into context, you know, for a business that's growing around the world and having things and costs imposed upon us, and being able to maintain that margin, I think, is something that takes a lot of effort, and we work on literally every day of our, our working week to make sure that those costs are maintained. You know, we, we take, our obligations to the environment quite responsibly, but of course, they bring cost to the business as well as we, as we look to, reduce our footprint. Then to look at our ongoing expenditure, you know, this is one of the most important things when you're, you're able to generate cash in a business, is to be able to come back and invest in yourself to ensure your future. I think it's really important not only to our customers, but to our staff, that we continue to make those investments that see a strong future ahead of us. Of course, you know, Andrew's already spoken to other opportunities that we look to leverage, as we, we continue to generate profits and cash for the business. A great year ahead. You know, I'm looking forward to, as the CEO, making that a reality, and with a great executive team that we continue to develop, working with me, I'm sure these results will be achieved across FY 2024. I think that really concludes the formal part of the presentation for this morning. We can open the floor now to any questions that might be out there. Please, put your questions forward. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star, then two. If you're on a speakerphone, please pick up your handset to ask your question. Your first question is from Evan Karatzas with UBS. Please go ahead. Hi, morning, all. Look, great results, guys, especially that second half was pretty impressive. If I can just put the license sales for 2024 just to aside, if I can. What sort of revenue growth, even if it's a, a range, should we expect for that, you know, that support maintenance services revenue stream? Yeah, Evan, thanks for the, thanks for the feedback. Look, I did talk to license revenue being circa AUD 34 million next year, so I think back of the envelope, you can figure that one out. We're, we're comfortable with the, the broad range of 5%-7% across all makeups. You know, it depends on obviously when, when certain deals fall. If you, if you guide to that AUD 34 million from a license perspective, I think you'll, you'll get your number. Yeah, brilliant. Oh, that's, that's super helpful. Then maybe just second one, just on the EBITDA margin. Obviously, now you've, you've given us some, some good color on the licenses, which has implications for the margin. Maybe just putting all that to aside, in terms of the operating cost expectation, I think it was about AUD 212 million in FY 2023. What sort of growth do you expect on that in FY 2024? Again, even if it's of some sort of range as well. You know, naturally we like to exceed or meet the market on our guidance. We've talked to +30, Evan. Last year, we talked to +30 as well and came in at 32. The board and the executives were comfortable to a margin of 30 and revenue of 5%-7% growth. Again, in your modeling, you'll get the number that you need. Okay. All right, no problem. Thanks, guys. Thanks, Evan. Your next question is from Garry Sherriff with RBC. Please go ahead. Yeah, morning, Andrew, Graeme, and Richard. Always nice to be putting through upgrades during reporting season. Again, maybe just following on from what Evan was saying, that second half EBITDA margin, I mean, that expanded 3 percentage points, right? Went to about 33% versus 30% first half. I guess, looking into FY 2024, do you think that second half margin level can be sustained, or do you think there might be some level of normalization as you continue to invest? I guess that's, that's the question on EBITDA margin for, for, for next year. Yeah. Thanks, Gary. Look, the second half has indeed been strong. We did forecast that in February when we came out with our half-year results. We knew it would be off the back of predicted and contracted license fees. Again, the business has some seasonality in it. FY 2024, we're not going to disclose the half-on-half comparison, but we are comfortable with the revenue guidance and the margin of +30%. Again, the license fees obviously play a part on half-on-half, and whether or not they land in the first half or the second half, we don't typically disclose that. Yep, understood. 2 questions on M&A. I know you've been talking a lot about a third vertical. Can we get a sense... I mean, assuming they're likely going to be defensive, you know, regulated industry targets, does that mean that, you know, we should be thinking around the health medical field, financial services type verticals or, or others that you can articulate? Yeah, Gary, I think that's a, that's a good question. We, we, we seem to think, you know, what is, is Hansen, what are our strengths? What we deal with, you know, what we measure very high volumes, you know, important data, which covers so many aspects, as you can say, regulated industries. They're normally things which we think that we have something to add to. You take it out of our marketplace, nobody is buying into an industry, we have nothing. Look, you're 100% right. We would see financial sector, healthcare or other industries which are, are regulated, would be all areas which we have some interest in. A lot of the work in the background, Gary, is trying to understand those businesses, you know, who's available, you know, whether they're just a regional product or whether they're international products. They are the things we all take on board, but it is mainly around the pension, superannuation, financial, healthcare, insurances, all those are the industries where we, we think, we can bring something to the table other than just good, old-fashioned, operational efficiencies. Understood. The final one, in terms of the deployment of, capital for M&A, you've given a large range in terms of, target sizes between AUD 30 million and AUD 500 million. Do you envisage that, that third vertical is more of a smaller step out with, with larger M&A deals, I guess, reserved for those existing verticals? How are you thinking about the deployment of that M&A and, back into existing rough sizing versus, you know, stepping out into a new vertical? Yeah, look, a bit of a combination answer because, you know, we, we, we can't be assured of the timing, Gary, when these things happen. I think we're just trying to give an indication of where the board, and I feel comfortable of where we could actually spend our money. It could be a combination. I think it's important to note, we would only embrace a new third vertical if we thought we will be able to do other deals on the back of it. We don't need to go and do a deal and pick up $10 million of revenue if we don't think it's gonna go anywhere. To be honest, we've looked at a number of businesses which we just could not find what the recurring deals on the back of it would be to try and, and grow it. In an ideal situation, aspirationally, in five years, we'd love to have a third vertical, which equals the other two verticals, because I think Richard stolen my, all the air in the basket. We don't like to really have a country, a currency, a customer, or a product which actually could cause great harm to the organization. It's the same thing when looking at one of these, these third verticals. Understood. Thank you. Thanks, Graham. Thanks, bye. Your next question is from Josh with Barrenjoey. Please go ahead. Hi, Andrew, Graham, and Richard. Thanks very much for taking my questions and well done on the results. First one, just on the organic growth guidance, can you give us an indication of what currency assumptions you're using to sort of underpin that? Thanks, Josh, and thanks for showing interest in, in Hansen in the last 12 months. Look, we've taken some prevailing exchange rates from, around the average back in April and May. Of course, there are, as you would all know, some tailwinds at the moment. We don't know if they'll continue, so, we've taken a conservative approach based on, on rates back in April and May. Perfect. That's great. Just within that target, like in the context of what you've got there, how, how should we look at what visibility, I guess, you've got over that? Like, is it consistent with the, you know, 95+% that you've been talking about, and obviously gave that extra transparency around in those line items? How should we be thinking about what visibility you have on 24 out of 2? Yep. That's exactly like you say. We're in a fortunate position where we can predict with, with near certainty, basically 90% of our revenues, and we're now into nearly September. There's nothing at this stage that, that is highlighting any concerns with, with what we put out today. Brilliant. Just second one, obviously, stronger organic growth profile, and you've talked about investing more in the sales motion and, and obviously some good products in R&D. How should we think about maybe rather than 2024, just, you know, post 2024? Is it too early to sort of see that, you know, the historical ranges that you've talked about in terms of growth may step up in terms of confidence in the sort of broader outlook outside of 2024? How, how should we sort of be looking at, some of those themes continuing beyond FY 2024? Yeah, it look, the reality is in the sales is a slow burn. You know, these very large energy and communications customers are not making decisions in three months. The investment that Graeme and Andrew have talked to, we started in FY 2023 and continues in FY 2024, will deliver strong results in 2024 for sure. The 2025-2026 pipeline is key to landing some of these big deals. They are big, big implementations. They are risky for customers to take them on, so they obviously take time to deliver. Okay, that's great. Thank you very much, guys. Thanks, Josh. The next question is from Lars with MST Financial. Please go ahead. Hi, good morning, everyone. Just a few follow-up questions, and if I could start on the revenue side. If you look in the last year, it's almost entirely the growth has been driven by the energy division. I think, Richard, you talked to a few large implementations you're working through. I guess for both, the last financial year and the guidance you're setting for the next financial year, can you give us a little bit more color as to what's driving it? Is it net new customers that you, you've got on board or? I know in the past you've talked about, there's inflation component included in your contracts and, and, with your clients, and are you passing on those inflation increases, or are they still on hold? If we look to 2024, is it, is it largely going to be energy driven as well? I thank for your question. Just, just to address that, that, that question around holding on price increases. We're, we're definitely not doing that. We, we take a long-term strategic approach with price increases. We're not necessarily passing on 10% CPI increases just because that's what the market is doing. We've, we've got clients for 15, 20 years, so we'll look at potentially doing, in, in that example, a 5% price increase, but longer tenure and including an upgrade. Just to be clear, for everybody on the call, we are certainly passing on price increases. From a vertical perspective, a lot of that is timing related. Of course, you've seen energy growing in, in FY 2023, but right now, without disclosing the customers, we have two very, very large upgrades happening for the two customers in the communication space. Again, for that diversity, revenue will bounce between both verticals year on year, but there's nothing to read into to the numbers that would suggest that one is growing at a faster rate than the other. And in fact, you could argue that communication is a very exciting space now with IoT, 5G, there's a lot happening in that space, so we feel pretty bullish. Yeah, okay. Thanks for the extra color. Can I just move on to some M&A, and some of the commentary you've made so far is, it, it almost seems like pricing is improving on some of the targets. Your balance sheet's a lot stronger, and you, and you talk to getting, you know, say, a 50% uplift from the targets you've had in the past. You know, look, an outsider looking in, it, it does beg the question, are your hurdle rates too high for what you're looking at with these targets to, if you could just give us a little bit more color as to what you're actually specifically looking at as your hurdle rate for the transaction. Is it EPS growth, and, and what level are you looking at, and, and is it pre-synergies or is it post synergies? How do you think about these transactions, and, and, could you give us a little bit more insight into, into, into the process? ... look, we probably always don't want to give away our, our negotiation tactics, but we're a public company, so the very first thing we look to is our valuation. It would be wrong for us to pass fully across the synergy we bring to the table, to the vendor, because the synergies we bring to the table should be in the hands of our shareholders. We would normally look to our valuation metrics, and we would say, "Here is a company successful, growing for 50 years. That's the valuation we have." I think you've, you've just got to sometimes there, there is no doubt, pricing, we set the price. It would be wrong of us to pass it on. We're not completely foolish to think that some of the synergies we could probably afford to pay a bit of an uplift for, but you don't give them all away because they're not guaranteed, and they always should be in the hands of our shareholders, not in the hands of the person selling the business. At the end of the day, if someone wants to sell the business, it's, there's got to be, in all aspects of life, in business, there's got to be a compelling event. If someone wants to sell, then they have to meet the mark. If you're a private equity firm and you want to put it into a continuation fund, if you, if you are a, a big conglomerate and you want to hold on to that asset because it's paying out cash, everyone's got their own reasons, I think, when actually looking at things. We, we would look at our valuation as really being the, the pencil or the line in the sand for coming up with the valuation of the companies we're buying. As I've said, once again, I think the benefits we bring to the table, our hard work, our investment, our synergies should be back in the pockets of our shareholders and not the vendor. Yeah, okay. With your share price bounce today and, and, and your likely higher rerating, you would say that that increases your likelihood of doing a transaction in the year ahead, if it's maintained? Now, you're making me look-- Now, you're making me look up to see what our, our share price is. Okay. I just want to. I'll, I'll have a look after the call. Oh, look, it certainly helps, there's no doubt. You know, look, we're probably valued by shareholders, as we know, and we thank everyone for their support of where we are. It does become a bit of a, it's not a hurdle, but, it, rightly so, we want to pay it. Clearly, if our share price goes up, then it would make some things certainly more affordable to us. Okay, sure. Just one final question, just on the cost base. In the past, you've talked to there being some inflationary pressures and even hiring pressures and even staff turnover issues. Can you just elaborate? Because it's still, from an employee side, still looks like it's running pretty high. Is it from net increase in staff numbers, or is it from the inflation that's around, or can you just talk a little bit more around the, on the employee expense line? Oh, look, I think, right, probably a little bit. It's probably a combination of those things, mate. Where we're, we're talking about, you know, post-COVID, employees are a little bit easy to come by again now. Hansen probably being an employer of choice because they, that, that stability we can offer to people when they're actually going. I think the combination always is probably what we're prepared to pay for people. So there's a bit of pressure on wage, a bit of pressure, there's a bit of increase in people, mate. No, I think it's, it's, it's really. We've, we've put staff on. We've got, we've got people at a level now that we're completely comfortable with as far as servicing our growth. I think that, you know, new business as it comes on, we'll, we'll, we always try and manage that workforce. Look, it, it's quite clear, you know, wage inflation has been there, and we've not been immune to that. I think it's, it's, it's clearly a credit to the management, particularly the delivery and the team of software folk out there, that we've been able to, to manage our resources well. We've been able to keep productivity at a level to be able to deliver a result with, you know, a margin, you know, higher than 30% in this sort of environment. It's certainly stabilizing. I, I don't see that continuing on through the next 12-18 months. You know, we're seeing a lot of stability come back into the industry as we're seeing some of the big, big tech players lay off staff. And certainly, we're really happy that we've seen some, some employees come back to us saying that they want to rejoin the company, and we've been happy to take them back into the fold. You know, I think that labor costs will, will stabilize now, and, you know, as we, we predict, margins will be greater than 30%. Okay, excellent. Thank you. Our next question is from Chris Gawler with Goldman Sachs. Please go ahead. Yeah, good day, Andrew, Graham, and Richard. Can you hear me okay? Yes. Yes, great, bye. Yes. Beautiful. Just want to ask a quick question, a follow-up on one of the questions earlier, just on FX. At your point on the FX rate, you're assuming it's FY 2024. Are you able to give us a sense for, I suppose, the benefit that you got in FY 2023? Like, can you give us, I guess, a constant currency growth rate for this year? Chris, thanks for the question. Look, I did say it was immaterial. It really is immaterial. I think at the half, we had disclosed FX being AUD 20,000. We're trying to get away from talking to constant currency versus reported currency where it's immaterial. I won't go into it, mate, but you don't need to worry, it was, it was immaterial for the full year. Yep, very clear. Just on the R&D outlook, I appreciate the guidance on R&D as a percentage of sales. Will there be any change in split of that between what's recognized through the P&L versus what's recognized in the cash flow in 2024 versus 2023? I, I would assume largely the same. Of course, we, we do expense some R&D through the P&L that we don't disclose, and the rest is obviously capitalized. Broadly, FY 2023 was our biggest year on record. We think there'll be a slight decline in R&D investment next year, and you can build that into your model, Chris. Sure. Gotcha. Then lastly, just on the 5%-7% organic growth outlook, sounds like there are a couple of big upgrades in the communication space happening at the moment. Do you envisage this growth rate being the new structural growth rate beyond FY 2024, or are there any, I guess, bigger deals or projects happening at the moment that might be tough to compare into 2025? Oh, no, I think, I think, when Richard called that out, that's business as usual for us. You know, some of our customers have bigger upgrades sometimes that might be going multi-jurisdiction, multi-countries, et cetera. That's pretty business as usual for us. We've been constantly doing upgrades for our customers. I wouldn't look too much into two particular deals. There's no storm in a teacup at all. Okay, great. Thank you. That's all for me. Thank you. Your next question is from Nic Burgess with Ord Minnett. Please go ahead. Yeah, good morning, gents. Good morning, gents. Thanks for the additional revenue disclosure. Certainly, that was helpful. I think all my questions have been answered. Just one follow-up on repricing. You mentioned, Richard, repricing a couple of questions ago, and it was something you called out specifically on the release. Are you able to tell us how much of the 5% growth you've achieved this year was due to repricing, and what the assumption is on repricing for, for the guidance, 5%-7%? I was waiting for your question, Nick. Welcome back from holiday. Thank you. We don't disclose, we don't disclose that. It's a combination. Again, there is, there is price increases. It varies on customer, products, jurisdiction, even currency, to be honest. We, we talk to a growth rate of this year, obviously 5%, next year, 5-7%. It is a combination of multiple factors, of which pricing is one of them. And a lot of it comes down to timing of, of new logos that we've won, that we don't disclose, and also significant upgrades that are underway. Maybe next year, Nick, we might disclose more, but for now, for now we can-. I'll try. I'll try one more time. I mean, you've called it out, so I we should assume that it's a, it's a material contributor to the overall growth of the company at the moment, yeah? I wouldn't say I believe it's material. Andrew just talked to business as usual, and pricing is passed on every single year, depending on the nature of the client contract. I wouldn't, I wouldn't say it's the broad makeup of the revenue growth, for sure. It's something- Okay. We always probably frustrate shareholders, and it just seems such a lazy thing just to keep on putting. Companies have an obligation to provide value for what they charge, and you just can't pass along without doing value. We've always had a much longer-term view of the world, of the longevity of a customer, perhaps an upgrade coming through, the value or the efficiencies we bring into the business. One of the proudest things we have is a step change in a business like Hansen to continue to make money at the same level when you're growing. Go and find another company which has done what Hansen's doing, and I think our customers appreciate that. We just don't become lazy and pass it on. We've normally shown through labor efficiency, you know, great cuts on AI. We're constantly working at ways, we've never become lazy by trying to keep on reinventing ourselves and our relativity to what we're charging our customers. I think you understand that. I've probably said before. Yeah. No, I understand. Anytime. Thank you very much. Thanks, mate. Your next question is from Vic Lee with Blue Ocean. Please go ahead. Good morning, guys. Thank you for the presentation. My question is just around the R&D spend, and obviously been a proponent of, you know, R&D spend and trying to help the customer, you know, grow their business. Can we just talk to the R&D in terms of? Is that, is that R&D spend in, in that space, sort of playing offense or defense? Do, do you think there's opportunities and, and, and, and also risks to the business as well? Or, how do you think about it? Do you have examples on that? Look, I, I think there's a little bit of both, Vic. At the end of the day, our R&D spend is very, very focused, and it's very, very targeted on either a customer's specific need with a little bit of direction, if you like, or value that we bring from markets potentially overseas, because we like to see our customers just sit a little bit in front of the curve. It's, you know, that's where the risk comes in sometimes. We, we might be making a small, small strategic change to something. Look. R&D investment is something that we review regularly. We, we are always looking to make sure that we stay on point. You know, this is why I think when you, you look at what we put on the balance sheet, it is very, very well controlled and certainly, something we're comfortable will continue to bring revenue into the future. Okay. That helpful, thank you. Then I suppose the other question, probably more for Richard then, just, just on the cash flow conversion, it looks like it's normalized. Then sort of going forward, it's gone from sort of 50% EBITDA conversion in the first half to 100% in the second half. How do we sort of look through on an annual basis? What, what sort of conversion can we talk, think about going forward? I think, if you-- the last thing is have been a little bit difficult to analyze, I think, because you have the large inflow of Telefónica landing in FY 2022 of AUD 18 million, then, of course, some buildup in working capital this year. I think that the only advice and guidance we can give you is to look at the five-year historical run, excluding that one-off Telefónica adjustment. Nothing has changed in the underlying makeup of the business or the cash flow of the business. Customers are still continuing to pay us on time. We've always had bill schedules that run, you know, 90 days. I can't be any more helpful than just looking at the historical number, to be honest with you. Okay. They have to be questions to be answered by the others. Thank you. Well done. Thank you. Thank you. There are no further questions at this time. I'll now hand back to Mr. Hansen for closing remarks. Thank you very much. Look, once again, thank you, everyone. It's been a longer call than normal, but, very proud of the hard work of the team in Hansen for the last 12 months. Let's face it, the 50-year history to get us to where we are today, it's a great result. We certainly appreciate all the stakeholders in the business and our customers, but also the shareholders alike, which, you know, support us as we go. It's great to be able to put some guidance out as an organization of where we're going and other tough times out there. Hansen's always pride itself to what we provide as an essential service, and we've been able to always navigate these uncertain times out there at the moment now. Thank you all for joining, and I look forward to talk to you again soon. Thank you. That does conclude our conference call for today. Thank you for participating. You may now disconnect.