Thank you for standing by, and welcome to the oOh!media HY 2023 results call. All participants are in a 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 one on your telephone keypad. I would now like to hand the conference over to Cathy O'Connor, MD and CEO. Please go ahead. Thank you. Good morning, everyone, welcome. I'm here today with oOh!media's Chief Financial Officer, Chris Roberts, together we'll take you through the company's interim results for 2023. For today's agenda, we'll turn to slide two. I'll start with some opening remarks today then go to the highlights and the revenue performance. Chris is going to cover financial results, I'll return to take you through an update on our lease maturity profile, our strategy, and the current outlook. I'd like to start today by emphasizing what I think are the key takeouts from today's results, the things that underpin our continued confidence in both the out-of-home sector and for oOh!media, given the unique position of scale that we hold within the sector. On this, I'd like to emphasize five key points from today's results. Firstly, the growth story for the Out of Home sector against other media. It's now a convincing trend, and as we'll see today, Out of Home has delivered sustained growth against other media and is the fastest-growing media channel. Compared to Out of Home's 15% agency revenue growth on the PCP, television declined 15%, while radio was down 8%. There is a lot that underpins this growth, and we'll talk more about that within the presentation today. Secondly, relating to oOh!media's results. Our first half revenue grew by 7% on the PCP, and this was in line with the overall market if we exclude the City of Sydney contract, which saw a significant increase in digital inventory since its relaunch in late 2022. OOH's road performance was particularly strong, as you'll see later on. The third point I'd like to emphasize relates to new contract wins. We were pleased to announce three significant contract wins that will strengthen our audience coverage in the critical Sydney market. We have new digital assets planned as part of contract wins for Sydney Metro Trains, Woollahra Council, and the new Metro Martin Place precinct. These new assets will bolster OOH's coverage in the all-important Sydney CBD and the eastern suburbs. This has been a key ambition of our network strategy, so it's great to see those wins coming to fruition. My fourth point relates to existing contract renewals, which are ongoing. As we noted in our full-year results in February, we had several large contracts that were up for renewal this year, and we continue to engage in positive and active dialogue with those commercial partners. The final point of focus in today's result is an expectation of continued revenue growth into H2, with Q3 media revenue pacing at 7% on the PCP and gross margin traditionally stronger in the second half. With those key points in mind, we'll move into the presentation over on slide five. The out-of-home sector continues to take share from other media, and in the first half of 2023, out-of-home grew 12% on the PCP, as reported by the OMA. This growth is due to a combination of factors, resulting in the significant transformation of the out-of-home sector in a digital era. There's a long list of credentials that are driving this share towards out-of-home. Investments by the industry in new digital assets, measurement improvements that better capture the performance of digital out-of-home, programmatic trading, and increased innovation around dynamic creative campaigns, and the sophisticated increase of data-led targeting. These credentials, coupled with our mass reach in a fragmenting market, are compelling, this has driven digital revenue to 68.1% of out-of-home media, up from 58.7% in the PCP. Out-of-home has now passed a new threshold in terms of its share of media, capturing a record 14% of Australian agency media spend in SMI data for the first half. This surpasses the prior peak in first half performance of 13.7%, that was in 2019. This is the structural shift towards out-of-home that we've been predicting for some time, it's great to see it continue to play out in industry data. SMI data reflects the majority of agency revenues, and these are a large part of sector revenues. We expect that the ongoing investment in the out-of-home sector will continue to drive this shift, both in the short and the medium term. I'll now take you through the broader highlights of today's results for oOh!media over on slide seven. Against a backdrop of a declining media market, OOH increased revenue by 7% in the first half. Although April was soft, as we outlined at the AGM, May and June experienced double-digit growth, resulting in a stronger second quarter than the first. As mentioned earlier, I was pleased to have announced our new commercial contracts for Sydney Metro, Woollahra Council, and Metro Martin Place. These three contracts combined are projected to generate circa AUD 30 million of annualized revenue upside from mid-2024. Securing all of these three new contracts also gives us confidence that oOh!media provides a compelling proposition for commercial partners when it comes to our renewal negotiations. Finally, our balance sheet remains strong, with gearing at 0.9 x following the completion of the on-market share buyback in June. This is within our medium-term target of 1 x, and we anticipate that gearing will decline now that the buyback has been completed. Coupled with a slight growth in our adjusted NPAT and a 6% increase in reported NPAT on the PCP, the share buyback generated stronger EPS and adjusted NPAT per share. The board of oOh! have declared an AUD 0.0175 per share, fully franked interim dividend, and this is up 17%. Moving over to slide eight, our revenue grew by 7% compared to the prior year. Adjusted gross margin was down 3.4 percentage points for the first half. Chris will talk more about gross margin later in this presentation and give you some important further context. Our adjusted underlying EBITDA was down 4% on the PCP. However, adjusted NPAT was flat to the PCP, following a decline in finance costs and income tax expense. Following the share buyback, adjusted NPAT per share was up 6%, and we ended the half with our gearing, as mentioned, at 0.9 x. Moving over to slide nine, we'll take a look into the revenue by format. Road continues to be a star performer, with revenue increasing 12% on the prior year and exceeding 2019 revenues by 53%. This channel is rising in prominence as a cost-effective, mass-reach alternative to TV and radio in a fragmenting media marketplace. oOh!media drove the total Australian road market in the first half, with nearly 70% of the OMA's reported roadside billboard growth coming from oOh!media, and gaining market share compared to the PCP. Street and rail revenue was down 3% on the PCP. This was mainly concentrated in the first quarter. May and June saw strong year-on-year growth, and we are continuing to see this momentum into Q3 as we lap the City of Sydney inventory. Retail revenue was up 3% on the PCP, with share gains in Australia offsetting the macroeconomic challenges in the New Zealand retail market. Fly increased in revenue by 73% on the PCP. Growth moderated in the second quarter compared to the first, as we lapped the recovery growth over the course of 2022. Locate declined 7% for the half. However, after adjusting for the impact of the sale of our cafe and venue business in January 2023, locate revenue grew by 4.2%. oOh!media's share of the Out of Home market in Australia and New Zealand for the first half was consistent with the share for the second half of last year. I'll now hand over to Chris, and he'll take you through some further details on the financials before we're back to talk briefly about strategy and go to questions. Chris? Thank you, Cathy, and good morning. Turning to slide 11. As a reminder, when presenting our results, we make references to adjusted results, which accounts for the distortionary impacts of fixed lease cost accounting under AASB 16 on gross profit, EBITDA, NPAT, and our operating margins. We believe that the focus on adjusted results is appropriate as management, most analysts, shareholders, and indeed, our lending banks, analyze the company on an adjusted results basis. You can see from the chart on the left the performance of the business on this basis. A 7% growth in revenues in the half over the prior first half delivered a one percentage point decline in gross profit and 4% decline in adjusted underlying EBITDA. The chart on the right outlines the relative changes in profitability in the first half on a statutory basis, in this case, are similar. As noted in the slide, adjusted EBITDA is a much better proxy for understanding the underlying cash flows generated by the business in the reporting period. Our statutory reported results, incorporating AASB 16, are provided in the interim report, a reconciliation to our adjusted results is provided in the appendices in this presentation. Moving on to slide 12. As just outlined, revenue increased by AUD 21 million or 7% compared to the first half of 2022. The gross margin percentage decreased by 3.4 percentage points to 41.4%. This margin compression was driven by several factors as previously flagged earlier this year and at the AGM. These include a reduction in rent abatements agreed during the COVID-19 impacted period, the step-up in fixed rent relating to renewals of contracts in the second half of 2022, and an adverse profit mix as the lower fly margin business grew its share of total revenues from 4%-7% of total revenues. Additionally, there was an unfavorable sales channel mix from direct to agency, as smaller direct clients reduced their spend in the face of economic headwinds. Further details on the movement of cost of goods sold is provided in the appendices on page 31. We continue to be disciplined on cost. Operating expenditure increased modestly by 1% to AUD 73.1 million. The relative performance versus the prior first half benefited from both an accounting release in connection with the prior year's long-term incentive expense accrual, and the first half of 2022 included AUD 1.3 million of employee termination payments. On an underlying basis, operating costs increased by 4%, which is consistent with what was flagged in the FY 2022 results release in February. The business believes its cost base is appropriate for the size of the revenue opportunity, and continues to fund revenue growth initiatives within an inflation-adjusted cost envelope. The 1% operating cost increase moderated the gross margin 3.4 percentage points decline. The resulting adjusted EBITDA of AUD 49.6 million represents a 16.7% EBITDA margin, a 1.9 percentage points margin decrease on the prior first half. Net finance costs decreased by AUD 0.3 million, despite the higher net debt levels and rising interest costs, due to the benefits of the interest rate hedges. The business has AUD 150 million of interest rate hedges remaining on the books, which it took out in October 2018 when it acquired Adshel. NPAT, before amortization of acquired intangibles, was a profit of AUD 13.6 million for the period, slightly down on the AUD 13.9 million achieved in the prior first half. Adjusted NPAT increased by AUD 0.1 million to AUD 20.5 million, and benefited from a lower effective tax expense versus the PCP. The increase in adjusted NPAT was enhanced at an adjusted earnings per share basis to 6% earnings growth versus the PCP, due to the lower shares on issue following the completion of the on-market buyback in the half. The buyback was completed at an average cost of AUD 1.37 per share. As Cathy outlined earlier, our AUD 0.0175 per share interim and fully franked dividend, representing 46% of the first half-adjusted NPAT, has been declared and is payable in September. This is a 17% uplift on the interim dividend last year, and is consistent with the board's policy of a 40%-60% of adjusted NPAT payout ratio. In the appendix to this presentation, we provide a reconciliation of statutory NPAT to adjusted NPAT. I will now briefly cover the statutory results over on slide 13. The group produced a statutory profit of AUD 6.4 million, versus a profit of AUD 6.1 million in the prior first half. Turning to the cash flow statement on slide 14. The free cash flow generated by the half was impacted by the payment of the FY 2022 tax liability, where the prior first half of 2022 benefited from the COVID-impacted lower tax expense relating to 2021. There was a return to provisional tax payments in the second half of 2022, where there had been none in the prior first half. Operating cash flow conversion of 52% is below what the business would normally expect, and it's expected to revert to typically seasonal patterns going forward. Capital expenditure of AUD 16 million increased towards pre-COVID trends as the business invests in growth. Continued delays in securing development applications, however, results in the business currently expecting full-year CapEx of between AUD 35 million-AUD 45 million, versus the AUD 40 million-AUD 50 million range previously provided. Now turning to the balance sheet on slide 15. Gearing increased to 0.9 x as a function of the buyback program, which was completed during the half, as well as the elevated amount of tax payments, as outlined earlier. The business expects this gearing to decline over the second half of 2023, given seasonally stronger cash flows, and was at 0.8 x as of mid-August. The business retains the goal of seeking to remain under 1.0 x gearing in the short term, barring any strong investment opportunity, which the company can access via its existing debt funding lines. I will now hand back over to Cathy. Thanks, Chris. I'll now take you through an update on our lease maturity profile, which is over on slide 17. We're providing an interim update today on our lease maturity profile, which you would be familiar with from the full-year results presentation. The chart on the left provides a comparison of those contracts that were set to expire in 2023, and the 2022 revenue attached to those contracts. As you can see from the chart, there is minimal change since our full-year results. Importantly, we are having active and positive dialogue with these commercial partners, and remain confident in where we are currently at with our conversations. For further context, oOh!media has historically had a solid track record of renewing commercial contract- tracts where we have a high intent to do so, our success rate in this regard is over 90% in attaining these renewals. As we've demonstrated with 3 recent new contract wins, oOh!'s scale, depth of expertise, and record of delivery is of high appeal to commercial partners, be they new or existing. Now moving on to an update on how OOH has made strong progress in delivering on our strategy. Over on slide 19. Just to recap, OOH's strategy has 3 pillars: to lead out-of-home to a digital-first future, to capture audience attention in public spaces at scale, and make it easy for our customers to achieve better outcomes. On the next three slides, I'll update you on some key achievements in the first half that have delivered on this strategy. Turning to slide 20, digitization and building scale are key elements of oOh!media's strategy, and this comes down to having great digital assets in the right locations. Our latest contract wins strengthen our ability to do this in Sydney's most prestigious locations. Our three new recently won contracts will deliver all-new 100% digital assets that will reach premium audiences across Sydney's CBD and the affluent eastern suburbs. These contracts are projected to deliver AUD 30 million of annualized revenue upside from mid-2024 onwards. The Sydney Metro Trains contract includes eight brand-new stations on the Sydney Metro City & Southwest line, including prime Sydney CBD and Lower North Shore locations, such as Barangaroo, Pitt Street, North Sydney, and Crows Nest. The high-frequency services on this line will deliver high-value business and commuter audiences to advertisers on fully digitized assets. This rail network will complement OOH's existing rail portfolio in Melbourne, where we also hold the Metro Trains contract. This will allow advertisers to strategically target audiences in both major capital cities. Woollahra Council, this contract sits in Australia's most affluent area, and it's the first time out-of-home advertisers have been able to reach this exclusive audience. OOH will be rolling out a 100% digital network and brand-new bus shelters that will provide public amenity to the residents and visitors to the Woollahra area. The new Sydney Metro, Martin Place precinct. This will be a spectacular financial and luxury retail hub in the heart of the Sydney CBD. It not only encompasses a new Sydney Metro station for Martin Place, but also 3,000 sq meters of shops, restaurants, cafes, and bars. This will attract a wide array of advertisers. Again, OOH will be rolling out a 100% digital network that includes attention-grabbing, large format screens that can deliver 3D anamorphic creative, and we know these products are in high demand by advertisers. Turning to slide 21. This slide really demonstrates the strengthening of OOH's Sydney portfolio, with the crimson dots showing the additional coverage achieved by these three new contracts. These are all, as I've said, in highly desirable suburbs, which will be added to OOH's existing network, which you can see in the orange. OOH will be able to package locations across these three new contracts to create an incredibly compelling Sydney CBD audience offering, additionally, packaging across Sydney Metro Trains and Metro Trains Melbourne, offering that dual CBD offering in the two largest cities. As mentioned, the AUD 30 million of projected annualized revenue upside mentioned earlier makes up at least half of the AUD 40 million-AUD 60 million pipeline of new opportunities that we outlined to you in our full-year results back in February. Of course, that pipeline is always being updated and expanded as and when new tenders are released or new opportunities are identified. Turning now to slide 22. In our Outfront showcase last year, we announced a new business called reo, designed to capture a new addressable market for out-of-home, that being the high-growth in-store retail media space. Retail media is media created by the retailers themselves. Retail media takes on many forms in store, as well as websites and apps. As part of an in-store offering, digital screens are allowing retailers to unlock incremental trade revenue from their suppliers or to directly advertise their own products to consumers in store. In-store retail media is predicted to grow to AUD 2.1 billion in revenue in 2026. This compares to AUD 1 billion of out-of-home revenue in Australia in 2022. reo has been set up by oOh!media to deliver a turnkey solution for retailers to an in-store screen network to derive revenue from suppliers. reo will install and maintain the screens. Additionally, provide the platform for retailers to manage their content on their in-store screens. This new business leverages and complements OOH's existing core capabilities in retail to a separate, new, and adjacent market. We're pleased to be able to offer these services to retailers. reo has now signed its first customer, a major retailer group in New Zealand, with the contract beginning in November this year, providing an important proof of concept for this business. This contract will unlock two types of annual recurring revenue for oOh!media. Firstly, the leasing of the screens, and secondly, the ongoing servicing, maintenance, and monitoring of the screens over the tenure of the contract. Over the long term, the financial objective of reo is to diversify the revenue stream of the company to include recurring revenue that is not as sensitive to the media market volatility. Turning to slide 23, we announced recently a new and expanded data partnership that unlocks additional capabilities for audience-led campaign planning and reporting, enhancing our ability to deliver on our third strategic pillar of making it easy for customers to achieve better outcomes and proving ROI in out-of-home. The new partnerships allow oOh! to access transactional data from 9 million Flybuys members through Unpacked by Flybuys and over 2 billion annual Westpac transactions through Westpac's DataX offering. These new agreements replace our former partnership with Quantium. These datasets will be mapped to oOh!'s Australian network of over 35,000 static and digital assets, and empowers data-led planning across more than 800 audience segments, covering all major advertiser categories. Additionally, the offering provides attribution capability so that advertisers can measure shifts in consumer behavior and sales to gain valuable proof points on the power and effectiveness of oOh!'s network and of out-of-home as a mass reach channel. Finally, now onto our outlook on slide 25. Our view on the outlook for out-of-home is confident, with the sector expected to continue to take share from other media. Q3 media revenue for oOh! is currently pacing at 7% up on the PCP. Media revenue growth and pacing are provided as a proxy for total revenue performance. Ooh! has other non-media revenues, such as cleaning and maintenance revenue, bus shelter builds, and Cactus printing revenue, that can drive a slightly different growth result. Gross margin is traditionally stronger in the second half due to the seasonal skew of revenue, coupled with oOh!'s operating leverage from the largely fixed cost base. This is expected to drive a stronger EBITDA margin in the second half over the first half of 2023. OpEx in the second half is expected to be broadly in line with the first half. Of course, the company will continue to exercise disciplined cost control, with the objective of containing OpEx growth to below CPI. CapEx, as mentioned, for the full-year, is expected to be between AUD 35 million and AUD 45 million, as outlined by Chris earlier. Finally, please turn to slide 26 for a wrap-up. Today's key messages: The out-of-home sector is experiencing strong structural growth, taking revenue share from other media. oOh! has had success in winning three contracts in the prestigious Sydney CBD and eastern suburbs. oOh! is delivering higher returns to investors, with a 12% increase in earnings per share and a 6% increase in adjusted NPAT per share. The board have declared an interim dividend of AUD 0.0175 per share, an increase of 17% on the PCP. Our current Q3 pacing up 7% on the PCP. This will be the third quarter of growth this year. With that said, thank you. That concludes the presentation. We're now happy to take any questions you may have. 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 two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Brian Han, Morningstar. Please go ahead. Oh, thanks. couple of questions, if I may. The new contract wins that you announced today, can you say anything about the margins on these contracts compared to current group average? Are there any material costs we should be aware of in onboarding these new concessions? In terms of the latter part of that question, there are no material cost increases or OpEx increases that come as part of these new contract wins. I think the important point to note there is, therefore, that, notwithstanding the gross margin impact, the EBITDA margin impact will be positive over the contract term. Yeah, exactly right. Brian Han, generally, as we said in the past, where you've got really high valuable audience contracts, typically you compete harder for those at a, at a rent level. It would be logically assumed that these would be at a lower gross margin than the existing gross margin of the group. However, as Cathy said, we're not adding any OpEx to support this. What you then get is operating leverage enhancement when you go to an EBITDA margin perspective. Essentially, it, it is accretive at the EBITDA margin level? At an EBITDA margin. Correct. That's exactly right. Gotcha, Okay, you've spoken a lot about oOh!media's own concession expiry profile, but can you share with us any other material concessions that are coming up for your competitors, that you're excited about going after? Or is that all included in that AUD 40 million-AUD 60 million pipeline you mentioned? The AUD 40 million to AUD 60 million pipeline is about new contract opportunities, they would not be contracts that are held by competitors. We don't ever comment individually on contracts, Brian. Obviously, they are commercial and in confidence, and therefore, we tend to just talk more generally about the lease expiry profile, which we provided in the presentation today. That's very noble of you, Cathy, because all your other competitors seem to talk about your concessions quite a lot. Well, I can't really speak for them, but to the comments we made in the presentation, the dialogue is, is active with partners, and we feel very confident if we look at our track record in renewing big contracts where we have a high intention to do so, it's over 90%. That's probably all I can say in that regard. Just on your CapEx guidance then, the CapEx guidance reduction due to tender delays, now, that's all in reference to tenders in that AUD 40 million-AUD 60 million pipeline you're talking about? No, Brian Han. There's two things attached. The, the bulk of that rather retains to some of those bigger contracts that are due for renewal this year. Clearly, the longer it takes to renew those, where they generally associated with digitization, is gonna reduce the CapEx. The other thing that we also saw is that last year we won Ryde and Adelaide, and we haven't installed any new digitals in the first half of this year because they're being delayed in development applications, which are referred to on the call. It's got nothing to do with the 40-60 pipeline. Gotcha. Okay, thank you very much. Thank you. Your next question comes from Kane Hannan, from Goldman Sachs. Please go ahead. Morning, guys. I just had three questions, please. Just the first half-year, quite a bit of variability in that monthly performance. You know, 2Q ended up a lot stronger than you were seeing back at the AGM. Just talk about what, I suppose, what drove that stronger 2Q for you guys. Is that variability in the market? Did you make some changes in terms of sales strategy, execution, or things we should be thinking about? Thanks, Kane. All good questions. Yes, we certainly saw a strengthening of performance throughout Q2, as you rightly call out. We do note that the market is somewhat volatile, so it's not unusual to see fluctuations within a quarter. You know, we note that other media companies have spoken to the same dynamics. There was nothing significantly different in sales strategy relative to our May and June performance. I think we competed very well. We saw our street furniture revenue turn into positive pacing year-over-year, which was a very welcome sign, given that that's been our most competitive channel. As you can see, the road performance was particularly strong. When demand for out-of-home is building, as we've seen across the course of the year, you tend to find that most operators are very front foot, holding on to good yields and riding that demand and getting maximum value. That's effectively what we did in May and June. Perfect. Just to comment around the success you've had on, on high-intent contract renewals, can you talk about how you define a high-intent renewal, and I suppose, how you deliver that conversion rate? Is there changes, say, in the hurdle rates that you use on a, on a contract? High-intent contracts would be the ones that provide significant coverage to our aggregate audience footprint, and the larger concessions obviously tend to be those with the highest audiences. We're always going to be very competitive, in those processes. We take, a view of value over the lifetime of the contract. We are familiar with the dynamic that the larger concessions tend to be lower margin, but they do build important audience reach. Then, of course, the long tail of contracts, across the broader portfolio, are often, you know, higher margin. Of course, in oOh!media's case, because we have such a breadth of assets, we're able to sort of leverage, margins into some of our higher-margin products as well. That's, probably the dynamic that's playing out. I think any large audience contract will be lower margin, and we're going to always be very competitive where it matters to our audience footprint. In terms of hurdle, hurdle rates, we always seek to clear our hurdle rates in terms of our cost of capital, regardless of the audience that is attracting. Clearly, on those contracts, which for whatever reason we think are less important to us, normally there's increased margin above our hurdle rate that we're prepared to accept a deal at. Yeah, perfect. Just lastly, just the, you're talking to the typically stronger GP margins in the second half. I mean, is 2022 a good starting point, or does the, you know, the oOh!media, you know, some of those contract re- renegotiations mean this, you know, the uploads might be a little bit less than last year? The way I'd look at it generally is over many years, the relativity between the second half and the first half is probably a good run rate to go with. Because as we touched on the call there, there have been delays in some of the bigger 2023 contracts. Any impact, I think this year, is really probably going to start rolling off into 2024. So I'll just go back and take a look at 2022, 2019, 2018. Yeah, that's great. Thanks, guys. Thank you. Your next question comes from Darren Leung from Macquarie. Please go ahead. Morning, guys. Thanks for the opportunity, and congrats on the good results. I just have 3 as well, please. Maybe just the first one on the gross margins and maybe tackling it another way. What do you think the industry-level gross margins are, please? From what we understand, Darren Leung, and this is a bit challenged because we're the only listed entity, but from accounts that are available from ASIC, at a margin level, what we see is we at the top end of the industry, but not necessarily by country mile. It, it is difficult to tell. We, you know, there aren't results from QMS beyond 2021 at this point. If, if we look more, more broadly in terms of overseas at what other competitors do, we're broadly there or thereabout. Got it. Thank you. Just to follow up on maybe the question earlier, you know, it looks like if you look at 2018, 2019, 2022, gross margins are around about that 45% mark. Obviously, a pretty, pretty much, immediate peak ever achieved. Is that the number we should be thinking about into 2024? Well, as we touched on, I think, in February and at the AGM, it really depends exactly what happens on some of these renewals. As we did flag, we're expecting margin compression in 2023 and 2024. Now, clearly, with delays of some of these bigger contracts into 2024, we would need a incredibly strong revenue environment next year in order to outweigh that margin compression into 2024, Darren. You know, importantly, this is only when we think about margin compression, it's really in those first 18 months to maybe two years of renewals, and then what we see is, is margin expansion at a, at a gross margin level. Got it. That makes sense. Thank you. Just the second one. We're hearing a bit of feedback around the audience, metrics of City of Sydney is sort of lower than the amount that they're monetizing. Do you think that they're having any success in terms of impacting your street furniture business, and do you think this will normalize in the near term? Thanks, Darren. I think, there was certainly a momentum with launching that product, and, you know, as often happens with new contracts, and this will be a dynamic that we benefit from in the year ahead, advertisers often like to experiment with new, new assets, and we certainly saw that in the first term of the second half of last year with the City of Sydney launch. We have seen that normalize. If I look at our own revenue, we're the largest operator in that roadside other channel. From May onwards, we've seen our year-on-year pacing move into positive territory, and that contract normalizes in September. We think that the launch was very successful, and we acknowledge that, but we will see it normalize to your very point there, the further out we go through this year. Great. Just a final one from me. Just on the fixed rent increases, that AUD 6.5 million, when you call out in the appendix slide, when we compare it against the base of about AUD 80 million, it looks like it's about an 8% uplift. What are the drivers here, please? Yeah. There are a couple of things in there. Firstly, that's, as I would assume that was existing asset base. We added 17 sites in EiMedia at the beginning of this year, so you've got additional assets, and there's also a bit of movement in and around ASB accounting and rent abatements. On a like-for-like basis, it's about 4%. Got it. Thank you, guys. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from John Campbell, from Jefferies. Please go ahead. Thanks very much. Thanks, guys, for taking my questions. Just firstly, you sort of called out that there's, at least in terms of, gross margin, there's been that, one of the, one of the aspects around the, higher cost of media sites was, a sort of negative mix shift towards agency, I think is one of the things you, you talked about. Can you just give us an update on how the direct, sort of market is looking going forward, given that it's been one of the sort of weaker parts of the business in the last six months? Yes, it's certainly... Hi, John. Certainly more sensitive to the economic environment. We've had a, a very strong record of, of good shares in direct. It's obviously the smaller part of what we do. But we do feel that, consistent with the overall performance of out-of-home, that generally the support from small business is more positive than with out-of-home than it might be in other media channels. Again, there's increasing sort of understanding of the mass reach appeal and the creative potential of digital out-of-home. And we're finding, particularly in that sort of independent agency and boutique area, which we classify as part of that direct segment, increasing shares, and we're trading very well, we've very strong NPS in that group, so we do have a reasonably good understanding of how they're viewing the market and how they're viewing out-of-home as a channel. Increasingly, it's part of the consideration set. I think, too, that in a tough market, when advertisers are thinking more in a short-term basis, the whole evolution of digital out-of-home has really allowed us to compete, more effectively in a short-term market, and this does appeal to small business. They're often more tactical. If you just look in particular at the growth in the retail category across out-of-home, you know, both small and large retailers, this is really driving some of that performance. Small retail is, is obviously a staple of that direct market. Cathy, do you think, I mean, when you did the trading update sort of in May or whenever it was, and, and direct was, you know, clearly performing worse than an agency, do you think it's sort of, that sort of, it's ameliorated a bit in the last couple of months? Like, it's sort of reached a level, and it's, sort of not deteriorating further? Look, I, I think direct, as I said, it's more sensitive to, to economic shocks. Certainly agency is driving the growth, and in a short-term market, it's very hard to predict, you know, which way it will, it will turn. Yeah. We're seeing both improve, but certainly agency driving the recovery, into Q3. Yeah. Yeah. It, it still remains a drag on our overall performance. You know, our agency revenues are, are, are growing quite a bit stronger than direct. Yeah. Okay, thanks for that. Just two other quick ones. Firstly, those new contract wins in and around the Sydney CBD were obviously, you know, very appealing demographics, I guess. What, what sort of would you put down to why you managed to win those, those particular contracts, like in places like Woollahra and the Sydney Metro, et cetera? I mean, what, what was the key selling point, if you like? Well, I, I mean, every commercial partner will have their criteria, but in, in the end, contracts are awarded based not only on the economics of the offer but also judgment around capacity to deliver. Reputation does play into it. Being a very large player, having such a breadth experience in street furniture, the designs that we place into the tender process, and our vision really for, for the particular contract is really what, what comes into the process. These are very well-run tender processes. Things are scored. There is obviously a very, you know, significant amount of process. We would have won that contract on several fronts. Not- no one criteria would've, would've got us over the line. Yeah. Yep, certainly I take it from what you're saying, that, that the actual design and the sort of concept that you're putting to those, those, markets is, is a big part of it. Yeah. Every, every commercial partner will have their criteria. What we are seeing is, you know, things like ESG and the, the sustainability approach that we apply to our assets, and, you know, the local offering of street furniture, in particular, is incredibly important. These things are given weights within any tender process, and you're scored accordingly. You consider that to win, you know, a highly desirable concession like Woollahra, that you're gonna have to be performing strongly about, across just about every, every part of that tender. Yeah. Okay, thanks. Just the last one from me: so obviously, you've been very tight and, and, and run a really good ship in terms of OpEx and sort of cost inflation, if you like. 4%, I think you called that 4% as the underlying growth rate in the half. Is that a, Do you see that roughly as a sustainable level of OpEx going forward? I mean, obviously, you're getting some interesting new contracts that are coming in, and I think you've said that that won't be associated with any increase in OpEx. Do you see that 4% as, as a sort of sustainable growth rate for us to use going over the next year to year or two? John, I'll, I'll take that. The biggest part of our OpEx base, which is payroll, is about two-thirds, and our payroll increases were undertaken at the beginning of the year, so you don't expect a, a movement in that, certainly over the second half. Going into 2024, it's gonna be a function of where the market is at from, from a labor perspective. Although we continue to invest in areas like data, for example, digital sales capability to fulfill our revenues, we're still really focused on doing that within a cost envelope. There's nothing that looks at us today that indicates that we need any more really over the medium term than 4%, but, you know, obviously, we, we do have to be able to meet the market on a labor perspective. Yeah, thanks for that, Chris. Thanks, guys. Thank you. Your next question comes from Conor O'Prey, from Canaccord Genuity. Please go ahead. Morning. Just a question on that chart you shared with share of Out of Home as a total SMI. I'm wondering if you've done any benchmarking or thinking on where is there a natural ceiling for that share of Out of Home? Can that go to 20%, I don't know, something like that? It's a good question. We think it'll continue to grow. You know, we think 18%-20% is a reasonable benchmark, and a few reasons sort of underpin that. I think we really are starting to see Out of Home being viewed as a safe bet, a safe bet in terms of mass-reach audiences, which aren't being fragmented, and I think increasingly, a very cost-efficient way to a mass-reach audience. A couple of obvious points. The freeway television market is 3 x the size of the Out of Home market, so a little bit of disruption goes a long way there. We increasingly see the 60% of the ad market that is pure digital as the obvious place where Out of Home will do a better job of participating and competing, given the advent of new measurement, with MOVE 2.0. There are a range of things that underpin our optimism, and, it's great to see that the trend is supporting the confidence. Thank you. Thank you. There are no further questions at this time. I'll now hand back to Cathy O'Connor for closing remarks. Thank you, for that and your questions. In closing, as we said, these are positive results for oOh!media and for the Out of Home sector. As always, we'll look forward to talking to many of you in a lot more detail, about the results throughout the course of the week. Thank you very much for your time today. That does conclude our conference for today. Thank you for participating. You may now disconnect.