Thank you for standing by, and welcome to the Temple & Webster Group Limited 2024 Full Year 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 the number 1 on your telephone keypad. For anyone following on the webcast, slides can be progressed on the right side of the webcast player. I would now like to turn the conference over to Mr. Mark Coulter, Chief Executive Officer. Please go ahead. Thanks, Rachel, and good morning, everyone. Thank you for joining us today. I'd like to begin by acknowledging the traditional owners of, and custodians of the country throughout Australia. I'm joined today by our CFO, Mark Taylor, and together we will be taking you through our FY 2024 performance. Please see the investor deck for more detail. We are exceptionally pleased with another great set of results this year. Temple & Webster has once again bucked the trend, delivering strong growth and market share gain in the face of tough headwinds to our category due to cost of living pressures. However, our revenue increased 26% to AUD 498 million, driven by growth in both repeat and first-time customers. FY 2025 continues to trade well, with growth of 26% year-on-year in the financial year to date. Importantly, our market share grew 31% and is now 2.3% of the overall furniture and home goods market, showing the strength of our product offering and the value we offer, but also the significant runway ahead. Pleasingly, we were able to deliver these results with AUD 13.1 million in EBITDA, excluding one-off costs, which is at the high end of our guidance. With all margins within or above our target ranges. We had a closing cash balance in excess of AUD 100 million, with no debt, meaning we're fully funded to execute on all of our growth plans. Page 3 of the investor deck shows our key performance indicators for the year. As you can see, our growth was driven by an increase in active customers, which was up around 33%. This growth was in turn driven by healthy growth in both first-time customers and our repeating customers. In fact, orders from repeat customers was actually up 36%. However, we are still facing the headwind of lower average order values as customers have migrated to lower-priced items, and the level of promotional activity remains high. On the plus side, our less discretionary furniture categories continue to outperform most of our homewares categories, which provides support to our basket size. As expected, we've seen a bump in our CAC, customer acquisition costs, due to the AUD 10 million we spent on brand marketing activities across the year. And given these channels are more expensive and have a longer payback period, our ROI was 1.7 for the year. Excluding this investment, our ROI on our digital channel has held at around 2. I'll talk more about our efforts around marketing a bit later. We still have a leading conversion rate out of the Australian large retailers dedicated to the home and have maintained a strong customer satisfaction level as we scale. A key strategic focus of the group has been to take advantage of our leadership position to drive market share. On page 4, you can see, our market share graph. This is our market share of the total furniture and home goods category, which includes both online and offline. In FY 2024, our market share hit an all-time high, and as I said before, it grew 31% to reach 2.3% of the total category. The share gain speaks to the strength of our proposition, particularly around our range, our pricing, and our service offering, and to the flexibility of our supply chain, which has allowed us to rapidly meet customer product and price preferences as those preferences have changed. Now, my favorite bit of the chart is that it also shows we have around almost 98% of the market left to conquer, so lots and lots of upside. Pages 5 through 7 are the investment thesis for Temple & Webster, including an explanation of why we believe now is the time to put our foot down and accelerate our market share growth, and our plan to get to AUD 1 billion in sales revenue in the midterm. Most of you will be familiar with this content and plan, so I'm not gonna go into too much detail. But I do think it's worth repeating that while it may feel like online retail is a mature channel and not that exciting anymore, the truth is that we're still very early in the adoption cycle, especially in our category. Even at 20% penetration, which is the latest Euromonitor estimate for the category, we still lag other markets such as the U.S. and U.K., which are already nudging 30%. TPW's market share is also behind comparable category-leading businesses, which shows the upside if we execute well. The other point worth reiterating is that like many digital platforms, there is a flywheel effect for Temple & Webster. As we get bigger, our range gets bigger and better, our prices get better, our service levels get higher, our data lakes get bigger, and therefore predictive algorithms get more accurate. The investments we can make into areas such as technology, AI, and content increase in size. In short, the bigger we get, the better Temple & Webster becomes. Turning to page 8. In line with our first goal of becoming the top-of-mind brand in the category, FY 2024 was a year of experimentation at scale to get a statistically significant read on the benefit of adding incremental marketing channels. In total, we spent close to AUD 10 million, starting at the back end of the first half, to run 3 campaign bursts across TV, out-of-home, audio, display, and social in different markets around the country. As many of you will have seen, this campaign centered around the imagined territory, reinforcing Temple & Webster's role in helping our customers imagine and then achieve a more beautiful home within their budgets. And while it's still early days, we saw good growth in direct traffic, and our share of brand searches increased by more than 20%.... However, our unprompted brand awareness remains below 10%. So over the last 4 months, we've been working with an external data agency to put media mix modeling in place to get a more accurate, accurate view on what channels are contributing to customer growth and awareness. Those insights are being developed this quarter. We will then use those insights to optimize the next burst of campaigns, still with the objective of increasing sales and brand awareness. We're tracking well against our second goal, with revenue from exclusive products growing to 43% of the total revenue. This includes growth in both private label and exclusive dropship products. Over 70% of our top-selling 500 products are now exclusive to Temple & Webster, which is a good leading indicator of where our catalog is heading to as we scale, and more and more products reach the volume tipping point to obtain exclusivity. During the year, we also launched our internal industrial design team, which we've paired with our data science team to allow data to inform the designs. The results of this partnership are already bearing fruit, with over 100 product designs working their way through the various stages of production, with the first products on sale this year. During the year, we also partnered with the University of New South Wales Honors Industrial Design to reimagine bedroom furniture, and selected students will now have their designs put into production and offered internships within our design team. Our vision is to make the world more beautiful, one room at a time, and having our own beautiful designs are an important part of realizing that vision. Before touching on AI and data, you will see that our fixed costs as a percentage of sales continues to decrease as we scale, even though we've added people and capability to the group. Lastly, we continue to build our future growth plays in order to diversify our revenue mix, and I'm pleased to report that the B2B segment, which we call Trade & Commercial, grew 27% to AUD 45 million. This year, we invested in targeted brand and marketing efforts within growth sectors such as accommodation and early education. We also added a dedicated sourcing team to procure commercial grade and sector-specific ranges. Home improvement achieved AUD 29 million in revenue and a 26% growth rate, which is a strong result given we were focused on only 1 website versus 2 in the prior period. Pleasingly, we were able to reduce our ad costs due to this focus. We successfully launched private label collections of tapware, ceiling fans, cabinets, and vanities. We also developed our delivery capabilities of fragile, bulky goods for products such as stone vanities, ceramic sinks, and bathroom mirrors. Page 9 highlights progress with some of our recent AI initiatives. We focused on developing our internal capabilities this year, adding new hires to the team to mine our machine learning and generative AI knowledge. This team has focused on building our internal solutions, which are now often outperforming external vendor solutions. Our AI solutions, such as product recommendations and on-page content generation, are now driving, in aggregate, more than 10% conversion rate improvements across the site. We've realized around AUD 4 million in annualized cost savings just from our customer pre- and post-sales support. Additionally, this year, we trained the whole company on AI with the deployment of an internal AI assistant, which we call Pearl, to help with day-to-day tasks and workflows. Our app continues to be the fastest growing platform and highest converting in terms of traffic, and we now have around 900,000 lifetime downloads and excellent customer ratings. Before I hand over to Mark Taylor to run through the financials, I would like to take a moment to talk about our update this morning on the appointment of Cameron Barnsley as our new Chief Financial Officer, effective from the second of September. Cameron joins us from Morgan Stanley, where he spent the last 16 years, most recently as Executive Director and Head of Technology for Australia in its investment banking division. We're delighted to welcome Cameron to the Temple & Webster team. His experience in capital markets and advising companies on growth strategies, locally and internationally, will be invaluable in our next phase of growth. We've known Cameron professionally for years and know he'll work seamlessly with the team. Cam will be supported by Mark Taylor, who is moving to a role focused on investor relations and growth, and our Deputy CFO, Chris Berner, who has been at Temple & Webster for many years and knows the finance function inside out. I'd like to thank Mark once again for his more than 8 years of hard work and dedication to the business as CFO. He's been a huge part of our success to date. Most of you know MT as a hard-hitting finance executive, but behind the scenes, he's a self-confessed interiors lover and on occasion, frustrated buyer. The good news is that MT's knowledge of the business and category and passion for beautiful products is not going anywhere as he transitions to that new role within Temple & Webster. I'll now hand over to Mark, the man himself, to take us through the results in more detail. Thanks, Mark. Thank you, Mark. I'm not sure how to follow on from that, but I appreciate that. Morning, all. I'm gonna start on page 11. This time last year, we outlined a very specific and, I suppose, a deliberate plan focused on high growth and market share gains to achieve our next target of over AUD 1 billion in annual sales, while building on our strategic moats of being a top-of-mind brand, building out our exclusive product ranges, AI, data, technology expansion, driving the low fixed cost base, and also building out our future growth horizons. We also outlined a financial profile for 2024 and 2025 to facilitate this plan. This profile was predicated on building scale, incremental margin improvements, and investing 2%-3% of revenue into our, into our first significant brand campaign, to drive awareness and also to drive market share. As you can see from the table on page 11, we are tracking either within or above our target ranges outlined in the plan, which shows the effectiveness of our customer proposition and the scalability of our cost base, in particular, some of the gains we're already starting to see from generative AI.... We believe our growth strategy as a category disruptor is working, and we are tracking to our plan. Page 12 provides a more detailed breakdown of the group's profit and loss results. Revenue for FY 2024 came in at AUD 498 million, representing a 26% increase on the prior year, which was driven by both growth in repeat and also first-time customers, as Mark mentioned earlier. Growth and delivered margin gains were led by improved shipping recovery, decreased refund and replacement costs, continued support from our suppliers, funding promotions, and mix gains as customers shifted spend into lower discretionary, higher-margin categories such as bedroom, dining, and also living room furniture. This strong margin performance sustained our contribution margin, which was higher year-on-year in dollar terms, even after the brand investment of AUD 10 million, which was in line with our stated 2%-3% of revenue. Customer service costs and merchant fees were down around 30% year-on-year as a result of AI tools powering over 40% now of our customer care interactions. Our fixed costs as a percentage of revenue were down to 11% from 12% last year, due to measured fixed cost investments being outpaced by revenue growth. But this, which is in line with our stated goal of reducing our fixed costs as a percentage of revenues to below 6%. Given our significant focus on internalizing our AI effort that Mark talked to earlier, we made the decision to write down our investment in our external AI software associate, Renovai. From 2020, we made a number of investments in Renovai to drive our competitive advantage in AI and machine learning. However, with the advent of Gen AI in 2022, 2023, and a real, I suppose, democratization of this technology, it provided us with an opportunity or a catalyst to start building out our own internal team here in Sydney. As we ran a field track strategy, quite quickly, our internal team had overtaken the capabilities of Renovai, culminating in a decision to move in another direction, as we would no longer be providing funding to Renovai. Now, from an accounting perspective, we made the decision to write down the value of these investments to zero, which for FY 2024 is a non-cash, one-off item in our P&L of AUD 4.7 million. However, if you exclude this one-off cost, our EBITDA margin of 2.6% was at the higher end of our stated range of 1.3%. So a very pleasing result. You'll also notice an effective tax rate, which is a bit higher than usual. This is the effect of the Renovai write-down not being income tax deductible, and also the timing of deferred tax asset recognition for certain share-based option plans. If you normalize for these two items, then the effective tax rate is closer to 30%. Page 13 reflects our strong financial position as our balance sheet continues to grow, given the cash-generative nature of the business, with a closing cash balance of AUD 116 million and no debt. This was primarily driven by cash from operations and the benefit of the group's negative working capital model. We continue to manage our inventory levels well, with a negative working capital model, funding further private label investment, a dynamic, we expect to continue. Our balance sheet position allows us to take advantage of prevailing market conditions, both positive and weaker, and puts us in a position where our organic and in-inorganic plans are fully funded, with optionality to return surplus capital to shareholders in the absence of more accretive options. Turning to page 14, which sets out our financial profile for FY 2025 and reiterates our longer-term margin and cost-based targets. As we did in FY 2024, FY 2025 will be a year predicated on high growth and disrupting the markets we're operating in, and taking advantage of the once-in-a-generation migration from offline to online, led by younger cohorts. Improving margins and the strength of our of our financial position is allowing us to push hard by continuing to invest an additional 2%-3% of revenue into marketing over FY 2025, which will be spread across both brand and performance channels to increase awareness and become the go-to brand in our category. We will continue to invest in our current future growth plays to diversify our revenue mix and increase our total addressable market. These growth plays allow us to gain operating leverage in our fixed cost base by leveraging people and platforms. Our AI and data capabilities will continue to be a key focus to enhance the customer experience, but also to improve our cost base metrics, a focus we expect to materially disrupt our cost base longer term. Our EBITDA target range for FY 2025 remains unchanged from our plan, and as does our plan to start incrementally building our earnings profile from 26 towards our longer-term margin target of over 15%, a level we are very confident in. So some housekeeping metrics for FY 2025, expect the following: CapEx of between AUD 500,000 and AUD 1 million, depreciation and amortization expense to be materially in line with FY 2024, around that AUD 5.8 million mark, and a more normalized effective tax rate closer to 30%. So all in all, a set of results I'm really proud to deliver. As I hand the reins over to Cameron, who joined us in early September, and although I will be staying on board to support the group's growth aspirations and assist in a number of areas, including investor relations, so can I say it's been a great privilege to have served as CFO of T&W over the last eight and a half years, working with some incredibly talented and passionate people. I truly believe with the platform we have built, the brand we are building, coupled with our financial strength and the team we have in place, we're in a great position to reach our goal of becoming the number one retailer in our category.... So thank you all, and I'll hand you back to Mark. Thanks, MT. So as previously mentioned, the positive momentum has continued into the new financial year, with revenue up 26% versus PCP, which is a great start to the year, given the environment we are still operating in. We are firmly on track to our midterm target of AUD 1 billion in annual sales. At this point, our strategic moats will be firmly entrenched. We will then leverage the significant scale benefits that follow. However, we still remain committed to our longer-term goal of becoming Australia's largest retailer of furniture and homewares. The group's current AUD 30 million on-market buyback will continue to improve shareholder returns in the absence of more accretive opportunities. With around 200,000 shares bought back at a total cost of AUD 1.8 million since the 17th of June this year. As always, I'd like to say a massive thank you to our Temple & Webster team. In my experience, customers can always smell if a brand is insincere. In our case, the team's commitment and passion for our customers weaves through everything we do. Thank you, everyone. We'll now 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 James Wang of Citi. Please go ahead. Morning, team, and congratulations on the great result and the solid trading update. Welcome to Cameron, and also thanks to Mark T. To kick it off, I had a question around conversions, which remained the same as last year. So to what extent were there gaps in the product range that meant the business couldn't translate a visit to the website to a transaction? And going to 25, are there opportunities to push conversion higher through a broader range or entrance into new categories, please? Yeah. So James, thanks for the question. It's a good question. I think I'd like to start by saying, be careful of comparing year-on-year conversion rates, because obviously there's a lot of background noise and things like macro environment can influence the conversion rate more than anything. That's the first point. When we look at conversion rates, in practice, what we're looking at is has that particular initiative increasing conversion versus a sample of traffic, which is not exposed to that particular initiative. It's a true A/B test, in which case we're kind of taking out background noise and actually getting a statistical read on a conversion rate initiative. When we say things like our conversion rate has improved by 10%, given all our efforts around AI in aggregate, that's because we're looking at those samples of traffic which don't have those initiatives in relation to AI, and then, and looking at the improvement versus bits of traffic that do. And that's how we can get confidence around those, those improvements. Even though you don't see it in aggregate, because in aggregate, where, you know, this year has been a tough year versus this year, and there's a lot of noise in, in the stats, so you know, you may not see in aggregate. That's, that's the first point. The second point in terms of product gaps and price gaps, I mean, very simply, I mean, if, you know, we're running at a 2%, 2-something% conversion rate, that means 98%. I mean, there's lots of noise in traffic, you know, bots and everything else. Very simply, you can say 98% of the visitors that hit Temple & Webster didn't buy anything. So that's a huge opportunity in terms of product gaps and price gaps and, you know, you know, you know, everything else we can do to improve that conversion rate. Now, our category, you know, it's a longer decision purchase category. So people may come, they may have a look, they may look at competitors, they may go offline, they may do a bit of research, talk to their partner, think about it a while, because you're going to be living with our items in your house for a long time and looking at them every day. So people do take a little bit of time, and hence, our conversion rate is never going to be, you know, like conversion rate on batteries at 15% or 20%. It will never be that because of the nature of the category. But definitely in terms of opportunity for our conversion rate, we think there's significant opportunity and, you know, and that's, yes, product and price gaps across the category, but also making sure people find what they're looking for quickly. You know, they can see the item in their home, use things like augmented reality and virtual reality to get a sense of size and look and feel in the house. Things like swatches to improve touch and feel, shipping standards and levels of service around shipping, returns policy. There's a lot to give people more confidence so that they buy when they hit the site. Great. Oh, that, that sounds really, really encouraging. And I think just to pick up on that, the app usage among the customer base has been growing quite substantially. That's my understanding. How different do they behave to customers who just predominantly use the website? Do they kind of have different purchase frequencies and also basket sizes, and how do they respond differently to promotions? Yeah, they do. They're a good customer, the app customer, and it's a bit self-selecting, obviously. You know, the customer that goes to the effort of finding Temple & Webster in the App Store, downloads it onto their phone, and then uses it to buy something, is always going to be a better customer than someone just, you know, a customer that just hits the mobile site or desktop site. However, having said that, as far... We've done a lot of work to understand what does a customer look like pre-install and post-install, so the same customer. So we take a sample of the same customers and look at how they interact with Temple & Webster on the different platforms versus control groups, which, you know, stay on the mobile site or desktop site. What we can see is that the actual download of the app and use of the app improves the customer behavior. So they transact with us more, they have higher lifetime values, they have higher conversion rates, and higher engagement rates. So the app itself is leading to a better customer behavior. Now, we think that's because it's faster. You know, we can cache things ahead of time, high-resolution images. It's a really nice search experience. You know, you can save where you are, search experience. There's, you know, the checkout's nice and easy. It's a nicer experience. So the experience itself is leading to a better, better, to a better outcome, and you can see that across all the metrics, they're better customers. Now, as I said, it's a bit self-selecting because of the customers are... The good customers are installing it, but it's also the app itself. Right. No, that's, that's also sounding pretty encouraging. And I think, so I'll ask the question, just follow with the last one, the GP margin. If I look at the second half, it declined by 40 basis points. Can you please go through how much of that was cyclical in terms of, freight rates, which, I think there's a lot of, talk about in the market, and also, also supply pricing versus kind of underlying changes in terms of decreased return rates and, greater sales mix towards exclusive range? Yeah. Hi, James, Mark here. Mark Coulter, I should say. Look, yeah, there's a little bit of movement. What I would say is the first half was probably a little bit ahead of where we expected things to be. I would say the second half is probably more of a normalized gross margin and even down the delivered margin as well. In terms of what we're seeing on factory pricing, on dropship pricing, and on freight. Dropship pricing, we're getting really competitive pricing from our dropship suppliers, both on the product side, but also on the promotional support, which we've mentioned previously. On the factory side of things, look, it's been an interesting period. So we've gone through a period of inflation throughout COVID, back end of COVID, then a period of deflation off the back of that. Now we're sort of back into a normal cycle. This is what it feels like. But we're continuing to get really good, really good pricing from, from our, from our factories from a private label perspective. But it kind of feels like if you, if you, if we kind of normalize to that whole COVID period, we are where we would have been but for, but for that period. Definitely freight rates are, are coming up, there's no doubt about that. Again, there's been quite a cyclical movement in terms of freight rates, where we saw a significant increase during COVID, then a period of deflation where freight rates were actually below pre-COVID levels. Now, we're, we're seeing things tracking up again. The good thing for us is, one, we only have a direct impact on inbound freight on our private label, which is about 30% of our business. 70% of the business is dropship, where we don't see that direct impact. You know, so we need to obviously, it's something that we need to continue to monitor and watch closely, but we are contracted through to FY 2025 as well. So that does give us a bit of coverage throughout this period, but we do anticipate, you know, some overs and unders. The next question comes from Ed Woodgate with Jarden. Please go ahead. Oh, hi, team. Congratulations, just a cracking result. Can we just talk through the trading update? So I think that's particularly pleasing. Is it in any particular momentum in new customers, repeat rates, or rev pack that's been driving that? Can you just talk through maybe what the, the key, key component to the, the revenue growth is? Yeah, it kind of is a continuation of FY 2024. There's no significant movement to any of the underlying drivers, so kind of more of the same to be honest. Okay, thanks. And then just as far as your marketing investment, is there any change as far as, like, the timing you're looking to to spend the investment into non-traditional marketing channels? Will this be a similar kind of marketing campaign to last year, or will you be looking to do anything different? Have you learned anything new on the back of that year of investing in that channel? Yeah, I think the timing will be a little bit different to last year. So last year, once we announced the strategy, we, you know, ran very fast to get into market, in, to the November peak. And so that was the first burst was in November, and then we were on again in the January, you know, post-New Year period, and then again in May, June. So we had the burst, but it was really... I mean, if you think about it, it's a bit of a half that we've been in market. And the whole point of it was to invest enough to get a read on which channels work. So we did, you know, spend of the AUD 10 million, some of it's reduction dollars, et cetera, but most of the media spend into TV, out-of-home was a big chunk, you know, audio, et cetera, in different markets. So some of the campaigns were just Sydney, Melbourne, and Brisbane. Some of the campaigns were national to try and get a sense of also geographic split. Now, what we've done is for the last few months, we've been working with a Media Mix Modeling agency, and they do this work on behalf of clients around the world. So they have a really good, great data set as a benchmarking, you know, as a baseline. And we've been feeding them the results around our traffic and our sales, and everything else, for them to get to give us a read on which channels are working. Now, where are we in the market at the moment? We're on TV, that's the primary channel now. So you may have seen our ads. After this campaign, we want to let the model work, run a bit more, to get to get a better sense of, as I said, which channels are working. And for example, the sort of outputs you get from this work is: you should be upweighting TV or downweighting, you know, Google, or downweighting out of home, or, you know, like, it gives you a channel, an optimal channel mix to get your outcomes you're after. But it takes time to run the model, and it takes time to get the results. So I think what you'll see is after this TV campaign, we'll let the model work for a bit, pause, understand what's the optimal channel mix, and then go again, in H2. And so then, the campaign weight will be weighted more heavily towards H2 than last year, given that we want to make sure that we're, you know, we're optimizing our spend. Okay, thanks. So then maybe just one more on home improvement. So that was very pleasing to see the strong revenue growth there, given that you've shut down The Build or you're not investing in it. Yeah. Can you just talk about whether you're still seeing the same type of customer, whether you, whether you've lost any, say, certain customer demo that might have been visiting The Build over Temple & Webster and or whether they've all translated across pretty consistently? I think it was too early to really get a sense of was The Build attracting totally different demographics to Temple & Webster. As far as we could see, it was a... We were picking up new customers, but it was very still much an end customer rather than a intermediary customer. So that end customer was buying on Temple & Webster, and there were new customers into the group. So yes, there's a chunk that have been customers before, which is great, but the majority of customers that are buying home improvement Temple & Webster on Temple & Webster were new customers like The Build. So in terms of demographic profile, they kind of look like our a normal online retail customer. They are, majority of them are new to the group. We're not, as I said, we're not so much getting the intermediaries, like the tradies and the plumbers, et cetera. It is definitely more the end customer doing the renovation, themselves. Obviously, they're getting tradies in, but they're buying the products themselves. So that's great. In terms of growth rates, yes, we're very happy that we were able to deliver that growth with only one site versus two. And the good news, obviously, that the whole year, so as we popped out from, that comping anomaly, actually, the second half, was even better than the first half. Okay, great. Thanks very much, and congrats once again. Thanks. The next question comes from Tim Piper with UBS. Please go ahead. Hey, morning, Mark and Mark. Just given the number of analysts, I'll just ask two quick ones. Clearly a good start to FY 2025, +2026%. Apologies for the short-term nature of the question, but I guess the question will be: moving into the second quarter, 40% comps, how are you thinking about that growth rate through the first half as you get into that much tougher comp, maybe keeping in mind what that was based off the year before? Yeah, I mean, I'll start, M.T., why don't you, why don't you jump in? Yeah. So, I mean, we're getting the 26% that we're doing at the start of FY 2025, that is off a positive comp already. We were already growing this time last year. You're right, the comps are getting a bit harder for a little while. However, those comps last year were off significantly negative growth the year before. So look, as far as we can see, you know, our category is holding up better than a lot of people thought and better than other categories, furniture and home goods markets around the world. You know, there is, in terms of, you know, headwinds, yes, of course, the cost of living. However, there's some tailwinds as well, you know, migration potentially, and tax cuts potentially, you know, interest rates cut sometime in the next 12 months. You know, a lot of these things are cyclical, and we have been doing these growth rates in quite tough conditions. So we are expecting over the next, you know. And we don't think in terms of months or quarters, right? We're thinking in terms of years. Obviously, over the period that we think about, the cycle will return in our favor. I mean, the thing is, I just want to reiterate, we're doing 26%, we did 26% last year. That is firmly smack bang in the middle of our midterm target to get us to that AUD 1 billion in sales within four years rather than five years. So provided we can keep doing this growth, we will reach our plan of AUD 1 billion in sales within our target period. You know, some periods under, some periods over, of course, that's going to be the case. But we're just focusing very much firmly on that goal. Yeah. Look, I'd just summarize to what Mark said there. I think, pleasingly, the market is seeing some green shoots. So you've got to remember that twenty-six percent growth rate that we did in FY 2024, that was in a market that was down 4%. So when we put out the 20%-36% range in terms of our 3- to 5-year plan, that was predicated on a market that was flat. So we're ahead of where we thought we would be, in a really tough environment. But May and June returned to growth for the furniture and homewares market. So if that continues, that will be a cyclical tailwind for us heading into FY 2025. I think also last year with the brand spend, the brand spend only kicked off in sort of late October, early November, whereas H1 FY 2025 will have not only the spend in the first half that will be supportive of revenue growth, but we'll also have some residual leverage coming from that investment, that brand spend that came through FY 2024. And to Mark's point also, those 40% growth rates that we were running across November, December, January, they were in negative comps. So those periods were, you know, single-digit negative comps, whereas we're doing 26% at the moment, and we're comping anywhere between sort of 10%-15% growth on the prior year. So from a net-net perspective, it's actually not too sort of dissimilar. If you look at our seasonal flighting, we're feeling confident that, you know, we'll continue to run strong double-digit growth, you know, throughout the financial year. Got it. Thanks. And just a quick follow-up. I think earlier in the year, you sounded a bit more explicit about being at the midpoint of the 1%-3% EBITDA margin range, and you came in at the top end. Can only assume that given the strong end to the year in the fourth quarter, more operating leverage dropped through, driving that higher EBITDA. So, I mean, that does give you, right, more ammo in terms of marketing heading into the first half of 2025. I mean, should we think about you actually accelerating more of that brand investment towards the top of the-- sort of the upper end of that range that you've provided to, to keep that revenue growth rate going? Look, it certainly provides optionality to do that. So we were guiding to a midpoint of the range. But you're right, Tim, we ended Q4 in a very strong position. So revenue growth was strong, but also the margin profile throughout Q4, particularly towards the back end of Q4, was even stronger than what we expected. Stronger than what I expected, to be fair. So, you know, for us to be playing closer to that sort of midpoint in FY 2025 with an anticipated improvement, I would say, in terms of further leverage, we should be seeing on our fixed cost base going into 25. At a minimum, we should be maintaining our gross margin, delivered margin levels. So you start playing that out with a decent growth rate, quite clear, quite clearly, that will drop a fair bit of leverage to the, you know, into the unit economics of the business model. Which will then allow us some flexibility and optionality to either invest that back into pricing and promos, into brand marketing, or even back into performance marketing, which will be a bit more short term, but will certainly help us, you know, potentially get through some of the trickier periods throughout the financial year. So you're 100% right, it provides optionality and flexibility in 2025. Great stuff. Thanks for taking the questions. The next call comes from Wei-Weng Chen with RBC Capital Markets. Please go ahead. Hi, guys. Congrats on the results. A couple of questions from me. So margin guidance next year, it's kind of flat from this year. You've seen a 1% reduction in customer service OpEx, but that's been offset by BAU marketing spend. So just wanted to understand whether that marketing spend is actually BAU spend, or is that kind of accelerating, is that accelerating your spend to take advantage of, I guess, the opportunity out there? Are you talking in regards to 2025 or 2024, Wei-Weng Chen? 2025. Well, look, I think what the profile that was put out for 2025, you know, we've been pretty prescriptive. So if you look at page 14, I think it is, or maybe it's 15. 14. So that's the profile that we put out. It's a very similar profile to 2024, but I suppose where we expect to get further leverage in a few areas and essentially then provide us that optionality to reinvest that leverage into certain areas, right? So it could be, if we're seeing significant opportunities from a price and promo perspective, then potentially we put some of that back into there. If we're seeing some opportunities on the brand spend or on the performance marketing, potentially we can reinvest some of that leverage back into those lines. Or it could be things that are going to be building out some more foundational elements of our business for longer term more platform-based investments. So it's giving us some opportunities there and some flexibility to, you know, to divert some of those funds. But certainly from a DM perspective, we're saying 30%-32%. We ran at 31.6% in FY 2024. You know, with scale benefits and with private label exclusive product expansion, there should be, at a minimum, we should be sort of maintaining those sorts of levels. I think with our customer care and our merchant fees, as you said, we should continue to see improvements in that line. And we have a stated goal of reducing our fixed cost as a percentage of revenue down to below 6%. So in theory, we should be, you know, continuing to see some leverage on that line. So that provides a bit of a bucket for us to then use as a bit of a discretionary fund for 2025 to be investing in potentially short term, more than likely longer term, you know, investments in the business. ... Yeah, okay. But we shouldn't read the BAU marketing cost increase to mean that you've, you've decided or you've realized that you actually need to spend more into marketing? Well, we're not, we're not seeing significant CPC increases in the business at the moment. So, so, so I think that's really the underlying question, which is: What are we seeing as a B- BAU cost base? And, you know, we-- when we look at our longer-term margin profile, when we look at our longer-term marketing costs as a percentage of revenue, we forecast, we forecast an element of inflation in CPCs going forward. They're not being obviously offset by an increase in repeat, in repeat orders. So we anticipate each year there's going to be a level of in, of inflation in CPCs, and it's, you know, those, those, those increases are within our sort of acceptable levels at the moment. Okay. I think- And then- Yep. Sorry. Yeah, no, go for it. Just, just to add, the other point is that in practice, how we manage the business is not through this P&L, obviously. So it's, you know, when we're buying. In BAU, what we're talking about is really performance channels, primarily, so the digital channels. When we're buying digital media, most of it is done on a cost per click, which then translates to a, you know, a CAC. And we're measuring, you know, the return on sales, ROI, of that, a bid, and then the CAC, and then we're looking to make sure that the customers are profitable in our performance channels still on really the first order. So that constraint is how we manage the business. The actual percentage is an outcome, right? So because the percentage of the total marketing cost in terms of sale depends on how much, what percentage of the business we got through performance, what percentage came through SEO, what percentage came through email, the whole lot. And everyone has different cost of sale and CAC, all those different channels. What we're saying in terms of the BAU marketing cost of 12%-13%, is that in a tougher market where some of those free channels may be struggling a little bit because the market demand is not there, actually, we've got opportunity to improve, increase our performance spend, and the customer is still profitable in the first order, why not take it? Even if that means that the marketing cost moves to more like 12%-13% versus 11%, because it's a, it's a, as an average. So what we're saying is, we've still got the marketing discipline to make sure our customers are first, profitable in their first orders in our performance channels. However, we will let Google and we'll let the performance marketing team spend to as much to that constraint. Whatever pops out, pops out. But given the current marketing conditions, it may look more like 12-13 than our longer-term goal of 11. Okay, cool. Thanks. And then just a question on the CFO appointment. Should we read into the decision to hire an investment banker as the CFO, to mean that M&A is now incrementally more likely? And then also, is M&A factored into the billion-dollar target? It's not. So we think we can get to AUD 1 billion organically. So most of that will be through furniture and homewares online, and a chunk of that will be through the growth plays we've already got in place for the B2B and home improvement. But that AUD 1 billion, we think we can get without M&A. Now, potentially M&A de-risks some of that or adds to some of that. We've been very clear in our strategy that M&A is a way to achieve a strategy. And as long as it makes strategic sense, the target makes strategic sense, you know, from a financial point of view, an operational point of view, a cultural point of view, we know how we can add value to target, all the stars line up, then yes, we have the financial capability to do it. You know, obviously, Cam has a lot of experience in the sector. He's not being hired for that. He's been hired because he's a very smart guy we've known for a while, and will be an excellent CFO. Looking at M&A will be part of his job, but so will, you know, everything else from, you know, the organic path to AUD 1 billion happens. The next question comes from Sam Haddad with Petra Capital. Please go ahead. Hi, good morning, gents, and congratulations on a great result. Well, congratulations, Mark Taylor, for your significant contribution over the years to Temple & Webster. Thanks, Sam. Just, on the margin outlook again, just to be clear, is the midpoint of the 1.33%, 1%-3% range a starting point that you recommend that we in terms of our forecasting? Well, look, we haven't been that prescriptive, Sam, as you know. So what we've said is between 1% and 3%. I think what will happen is, I think as we progress through the first half, that'll give us a pretty good read on what's happening out there, right? In terms of the market dynamics, in terms of the margin profile, in terms of, you know, some of the leverage that we're getting off our marketing investment. It's a little bit too early for us to provide more prescriptive, I suppose, guidance for FY 2025. I think once we get through the first half, that'll give us a pretty good read on what's happening out there. And just to clarify, in terms of your planned marketing burst through 2025, will there be one through Black Friday and Christmas? Because Mark, you were saying that there'd be more of a greater weight into the second half. I just wanted to get clarification as to what the burst will be through the course of 2025. Yeah, Sam, to be the honest answer to that is it's a little bit TBD. The issue is media buying timeline. So, we're on TV at the moment, and if we give it a couple more months to understand really how that washes through, you know, sales, over the next few months, fed into this, the media mix modeling data, we probably won't have time to buy TV for November. And that's just the practical reality of when you have to buy these channels. It's a much longer lead time. But that's okay. If we miss this peak, that's I still think it's a better business outcome to ensure we're spending the money in the right way and in the right channels. So, you know, while, you know, and my marketing team, you know, is ecstatic with the results, and then, you know, the agency says, you know, unbelievable results and everything else. You know, I've always been a little bit: "Yeah, sure, but let's see what the data says." You know, naturally, I'm a natural skeptic when it comes to anything unfamiliar. So, you know, I wanna make sure that we run the Media Mix Modeling, we understand the data, and then we're buying the next burst with as much science as possible. Now, the reason why I can't tell you when the bursts are necessarily going to be is because I haven't got the results of that model, and that model will determine where we spend the money. Where we spend our money may also determine when, because if it's TV, there are different periods in the year to buy TV based on costs and viewership and everything else. So it's a little bit... You just need to leave it with us, and we'll come back to you, you know, in future updates to let you know how we're going with the campaign planning. Yeah, that's good to know. Just so, you know, the comp set, as we've talked about, the comp's becoming more challenging through October, November, and last year did benefit from that, that burst of marketing. So, it's good just to be mindful of that, but that helps. And just on the, yeah, any commentary around the traction you're seeing with your private label range and, you know, tapware and fans and cabinets and vanities. It sounds like that's got off to a strong start in your home improvement segment. Yeah, it, it really has. I think, I think home improvement, what we've learned so far is home improvement will probably look similar to Furniture & Homewares, where we have a really strong private label division, and then we'll have, complemented by a healthy drop ship range, and as much of that range, exclusive to Temple & Webster as we scale. There are a few more branded products in home improvement that will also, you know, help, help the offering. But really, we're seeing really strong traction with, our private label products. And, you know, some of these products are very expensive, and so for us to be bringing in products of a great quality, significantly cheaper than the, comparable products in market, you can see customers are responding to. For example, you know, some of our bathroom vanities are selling out before they even land in the country. So the demand is there. Obviously, we don't want to go out, spend a whole truck of money on inventory that doesn't move, so we will do it like we've always done, which is slowly use data, you know, order small amounts in the beginning, increase order sizes as we test demand, you know, try new product categories carefully. You know, all those kind of general rules that we've managed the Furniture & Homewares business, we're applying to home improvement. But yeah, so the products we've been importing, so things like ceiling fans are flying out the door, our private label ceiling fans. You know, we even now sell Temple & Webster toilets, kitchen sinks. I think there's opportunities across the board in home improvement for private label, and I think like in Furniture & Homewares, it's going to be a bit of a golden nugget for that, for that area. The next question comes from Joseph Michael with Morgan Stanley. Please go ahead. Yeah. Good morning, Mark. And, Mark, congrats on a great result. I just had two questions. So just firstly, around margins. So I guess you've been very clear about FY 2025 margins, 1%-3%. You've been clear about the long-term margins, 15%, but I guess what's less clear is the ramp up from FY 2026. So what are the key swing factors we should be thinking about, which will determine whether the margins are up, say, 100 basis points, 200, 300? Can you sort of talk us through how to think about that? Hey, Joe. Yeah, good question. That's the million-dollar question really, isn't it? Look, I think it's gonna be—it's a difficult one to answer because it would be somewhat dictated by what we want to do and sort of the profile of the business that we want to be running. But it'll also be somewhat contingent on what the market is doing as well, right? So, you know, if we're seeing continued online adoption over the course of, you know, 26, over the course of the next decade, then, you know, potentially we, you know, slow down, I suppose, our migration towards that longer-term profile to take advantage of those market opportunities. But on the flip side, if we're seeing, you know, a faster rate towards a market that is a bit more mature, then that would mean that we would more than likely accelerate our plans to be eking out more margin points and then sort of start to grow with the market. So look, it's a little bit, it's a tricky one, right? What we have said today, and what we also said in August was... Look, we know where the business can get to in terms of its margin profile. We know where it's been historically in terms of its margin profile. We've run between 5%-10% EBITDA margins historically, right? 25, we've been very prescriptive in terms of the marginal economic outcomes that we think we can achieve and will achieve. And then what we've also said is from 2026 onwards, expect that sort of, I suppose, that incremental build towards those longer-term profiles, which is over 15% EBITDA margins. But within that, you've got different segments within that as well, right? Because B2B will be running at a different growth rate and will be in a different life cycle than what home improvement will be. And similarly, home improvement, then B2C, furniture and homewares, you know. So even within that, there's going to be some that are accelerating faster and others that are gonna be... And by that stage, obviously, we'll be overlaying things like international and other segments as well. So to pare it back to, you know, what does long term mean and, you know, what sort of timeline are we talking? Clearly, long term is not in the next couple of years, but it's clearly not going to be in 20 years either. It's a difficult one to answer, but it will be. We'll continue to monitor the market, you know, the market conditions, and, you know, react accordingly to those conditions. But I'd love to be able to give you a more concise answer, but it is a little bit and somewhat dependent on those market conditions that we're facing. Okay, great. Just to follow up there, like, when do you expect to sort of communicate your plans for FY 2026 margins? Like, are we - do we sort of need to wait till August next year to understand that a little bit better? Or do you think you'll be communicating that to the market over the course of this financial year? Look, it will either be at the end of this half, Joe, or in August, at the end of the full year results, yeah. Okay, great. And then I just had one other question just around M&A. So obviously, the cash balance looking really healthy, still above AUD 100 million. Just interested in, I guess, your sort of latest thoughts around M&A in terms of what segments you're interested in, the size of deals you're interested in, if you're interested in deals outside of Australia. If you could just give us a bit more color on your latest thinking there, that'd be great. Yeah. Again, another good question. Look, it could be a slightly boring answer, I suppose, but nothing's really changed in terms of our M&A aspirations. As you know, we look at M&A as a tactical response, you know, to our strategies. It's not the strategy. We're in an enviable position given where our cash balance is and where it's projected to get to, given the negative working capital model, the fact that we are going to be profitable. We're running an asset-light model. You know, and we don't have big lifts of infrastructure that we need to be investing into over the long term. So yes, it's an enviable position. M&A is definitely something that we've been looking at for a while, and in terms of the target areas, again, they remain largely unchanged. The B2C core business is set up very, very well in terms of people, platforms, product range. You know, we're executing very strongly on our organic strategy. But certainly in the home improvement and B2B areas, yes, there are definitely potential opportunities to either add capabilities in those areas or to accelerate growth in those two areas. Nothing's really changed. You know, we're out there. We're having conversations, as always. We've been close last year, but you know, fundamentally, this is TW. As Mark mentioned earlier, fundamentally, TW is going to be an organic growth story. If M&A can help and assist and de-risk our 3-5-year plan of reaching AUD 1 billion from FY 2023, then obviously, you know, we're in a great position to execute on that. The next question comes from Chami Ratnapala with Bell Potter Securities. Please go ahead. Hi, team. Congratulations on a solid result, firstly. Two quick questions from me in the interest of time. Firstly, I think on the AI side, I mean, currently servicing the customer on that pre-post sort of sale interaction at around 40%. I believe the long-term target here was around probably in the 70s. I mean, annualized cost savings of AUD 4 million at the moment. How are we thinking about the fixed cost leverage more into those long-term or medium-term targets? I mean, are the current sort of fixed cost leverage baked into the expectations more conservative, do you think, taking this benefit into consideration? Hey, Chami. Yeah, again, really good question. Look, it really is, as outlined on our longer-term margin profile target. You've got to remember, when we put those targets together, generative AI and the potential impacts and benefits that we could get from that, you know, from that tool set, really wasn't factored into those numbers. So our goal is to get our fixed cost base below 6% of revenue. We're about 11% at the moment from 12% last year. Interestingly, we're already starting to see some pretty material cost base benefits, not in the fixed cost line, but actually in our customer care line, which we variableize above our contribution line. And as you said, we're already seeing circa AUD 4 million worth of annualized improvement there, and potentially that gets larger and larger as we continue. Our goal is actually closer to 80% of our care interactions, as opposed to 70%. So there's a long way to go there, but that's the first department that we've really tackled in terms of the whole business. We've got a number of other areas and divisions and departments to go after, in terms of improving efficiency in all those different areas, to make it easier for our people, you know, to work and be more productive. So, look, I think how that plays out between now and our longer-term projections, you know, my sense is we'll more than likely start to see an acceleration of the benefits of our fixed cost base. And look, part of it will be on the AI side, right? And part of it will be on efficiency, part of it will be on productivity, but it'll also, part of it will be predicated on scale as well. So scale is a big, big driver of the leverage that we're going to be getting. We spent a lot of time over the course of 2020, 2021, scaling up our business, scaling up our platforms, scaling up our people to ensure that, you know, we're building a business to be a much, much bigger business than what we are today. So, you know, there was a big investment that went into that period, and really from this point forward, you know, we should be leveraging that. So look, we're very confident of getting to that end goal of fixed cost as a percentage of revenue below 6%, but also seeing cost efficiencies in the other lines as well, in our P&L. We have come to the end of our Q&A session. I'll now hand it back to Mr. Coulter for closing remarks. Thank you, everybody, for your time today. As you can see, another cracking result from Temple & Webster. Not only did we grow the business to AUD 500 million in sales, but we did so in a shrinking market by significantly expanding our market share. If you were to take anything away from today, it's that we are still only 2.3% of the total furniture and homewares market. There's lots of growth ahead of us, and we have the team, resources, and market position to capture that growth. Thanks, everyone. That does conclude our conference for today. 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