Q4 2026 EML Payments Ltd Earnings Call

August 17, 2026

Speaker #2: Thank you for standing by, and welcome to the EML Payments Limited full-year 2026 results briefing. All participants are in listen-only mode. There will be a presentation followed by a question-and-answer session.

Operator 2: Thank you for standing by, and welcome to EML Payments Limited Full Year 2026 Results Briefing. 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. I would now like to hand the conference over to Mr. Anthony Hynes, Executive Chairman. Please go ahead.

Operator: Thank you for standing by, and welcome to EML Payments Limited Full Year 2026 Results Briefing. 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. I would now like to hand the conference over to Mr. Anthony Hynes, Executive Chairman. Please go ahead.

Speaker #2: If you wish to ask a question, you will need to press the star key, followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Anthony Hines.

Speaker #2: Executive Chairman, please go ahead.

Speaker #3: Thank you, Moderator, and good morning, everyone. Welcome to the EML Payments Limited FY26 results telecall. As stated, I'm Anthony Hines, Executive Chairman. It's great to be here with Stuart Willow, CFO, to report our results for FY26 and provide an update on EML 2.0 progress.

Anthony Hynes: Thank you, moderator, and good morning, everyone. Welcome to the EML Payments Limited FY26 results telecall. As stated, I am Anthony Hynes, Executive Chairman. It is great to be here with Stuart Will, our CFO, to report our results for FY26 and provide an update on EML 2.0 progress. Following our presentation, we will open the call to questions. I refer you first to the ASX announcements, which were issued by EML Payments Limited this morning, which form the basis for this call. If we can move to slide 4, please, moderator.

Speaker #3: Following our presentation, we'll open the call to questions. I refer you first to the ASX announcements, which were issued by EML Payments Limited this morning and form the basis for this call.

Speaker #3: If we can move to slide 4, please, Moderator. It's been an incredibly busy and important 12 months at EML as we passed the halfway point of EML 2.0.

Operator 2: Sure.

Operator: Sure.

Anthony Hynes: It has been an incredibly busy and important 12 months at EML as we passed the halfway point of EML 2.0, the transformation strategy we presented to shareholders and the investment community in November 2024. As always, I am going to be upfront with you all. Our financial performance this year did not meet our expectations. There are a bunch of reasons, but thematically, onboarding of new customers and thus new revenues was slower than we could have anticipated, and we had softer trading in parts of Northern Hemisphere in the second half. I will unpack those drivers shortly. That said, let me be equally clear on this point. EML is a much stronger business today than it was a year ago, and that is down to the dedication and execution of our team.

Speaker #3: The transformation strategy we presented to shareholders and the investment committee in November 2024. As always, I'm going to be upfront with you all. Our financial performance this year didn't meet our expectations.

Speaker #3: There are a bunch of reasons, but thematically, onboarding of new customers and us needing revenues was slower than we could have anticipated, and we had softer trading in parts of the Northern Hemisphere in the second half.

Speaker #3: I'll unpack those drivers shortly. That said, let me be equally clear on this point: EML is a much stronger business today than it was a year ago.

Speaker #3: And that is down to the dedication and execution of our team. The sheer volume of things, and the size of some that we've had to deal with—including the ones I believe nobody could have seen coming—should not be underestimated.

Anthony Hynes: The sheer volume of things and the size of some that we've had to deal with, including the ones I believe nobody could have seen coming, should not be underestimated. This group of people has shown and continues to show a resilience and determination that I haven't seen before, and it underpins my absolute confidence in EML's future. Combine that with new product and technology capability we're enabling, and I'm excited about EML and where we're headed, including running on the path of meaningful free cash flow in the not-too-distant future. Let me touch on the key themes of the year. On operations, our restructuring program was largely completed by 30 June. Frankly, it's annoying that many of the masters of design of these issues have all been able to move on while we clean up. It's been a significant undertaking, let me tell you.

Speaker #3: This group of people has shown, and continues to show, a resilience and determination that I haven't seen before. It underpins my absolute confidence in EML's future.

Speaker #3: Combine that with the new product and technology capability we're enabling, and I'm excited about EML and where we're headed, including running on the path of meaningful free cash flow in the not-too-distant future.

Speaker #3: Let me touch on the key themes of the year. On operations, our restructuring program was largely completed by 30 June. Frankly, it's annoying that many of the masters of design of these issues have all been able to move on while we clean up.

Speaker #3: It's been a significant undertaking, let me tell you. It's also pleasing to be able to tell you that 51 senior positions were refreshed during the year, and we're better led and more effective as a result.

Anthony Hynes: It's also pleasing to be able to tell you that 51 senior positions were refreshed during the year, and we are better led and more effective as a result. Our global operations center reached 31 full-time employees by year-end, delivering a 35% like-to-like saving. An implementation of our new CX platform is underway. This will unify service management globally and power self-service, which is a great leap forward for our people and our customers.

Speaker #3: Our global operations center reached 31 full-time employees by year-end, delivering a 35% like-for-like saving, and implementation of our new CX platform is underway. This will unify service management globally and power self-service.

Speaker #3: This is a great leap forward for our people and our customers. On the commercial front, our pipeline is strong and wins are flowing. It's been fantastic to see the revolution in our relationships with regulators, partners, and customers alike.

Operator 2: Sure.

Operator: Sure.

Anthony Hynes: On the commercial front, our pipeline is strong and winds are flowing. It's been fantastic to see the revolution in our relationship with regulators, partners, and customers alike. Implementation timelines, however, have caused much frustration, and unfortunately, they've had impact on revenue pull-through. While some contract opportunities have been resized, there are a number of program activations that have been delayed due to client factors such as resourcing and readiness. Most notably, however, we continue to experience, as do other market participants, activation challenges with a key payment infrastructure partner in Australia. We've talked about this for a little while now, and its impact is growing. These are topics we've discussed over the last 6 months and something we need to unlock. But rest assured, we're taking every step to do so.

Speaker #3: Implementation timelines, however, have caused much frustration, and unfortunately, they've had an impact on revenue pull-through. While some contract opportunities have been resized, there are a number of program activations that have been delayed due to client factors such as resourcing and readiness.

Speaker #3: Most notably, however, we continue to experience, as do other market participants, activation challenges for the key payment infrastructure partner in Australia. We've talked about this for a little while now, and its impact is growing.

Speaker #3: These are topics we've discussed over the last six months and something we need to unlock. But rest assured, we're taking every step to do so.

Speaker #3: The encouraging stories that our key clients continue to renew, courtesy of better operational performance and vastly more effective relationship management—including some of my team being involved in those relationships.

Anthony Hynes: The encouraging story is that our key clients continue to renew courtesy of better operational performance and vastly more effective relationship management, including some of my team being involved in those relationships. On product development, this is now embedded across the group under new executive leadership. Our mobility solution is advancing at pace alongside our technology partner, Tendren, and our BAU product development is now active. As an example, our APAC team launched an end of year, end of FBT year benefit maximizer card that saves approximately 16,000 Salary Packaging cardholders almost AUD 3 million in PAYG tax. A great result first up for something we hope becomes an automatic process across all of our Salary Packaging programs moving forward. Financially, a mixed result. EBITDA didn't reach target because of the delayed activation of new contracts and softer trading in the H2, partially offset by good control of our overheads.

Speaker #3: On product development, this is now embedded across the group under new executive leadership. Our mobility solution is advancing at pace alongside our technology partner, Tendran, and our BAU product development is now active.

Speaker #3: As an example, our APAC team launched an end-of-FY benefit maximizer card that saved approximately 16,000 Cell Pay cardholders almost $3 million in PAYG tax.

Speaker #3: A great result first up for something we hope becomes an automatic process across all of our cell pack programs moving forward. And financially, a mixed result.

Speaker #3: EBITDA didn't reach target because of the delayed activation of new contracts and softer trading in the second half, partially offset by good control of our overheads.

Speaker #3: I've got to tell you, I don't like the end number, and I'm sure you don't either. But I don't want you to underestimate the cost control.

Anthony Hynes: I've got to tell you, I don't like the end number, and I'm sure you don't either, but I don't want you to underestimate the cost control. It's been a very heavy lift beyond our thinking, as I've indicated, and to do so in this overhead envelope is remarkable. In short, the restructuring is largely done. A stronger EML is emerging, and our commercial momentum is becoming infectious. Can move to slide five, please. Financial performance for the year was in line with our revised guidance. Stuart will take you through the details shortly, but at a headline level for continuing operations. Revenue was AUD 206.8 million, down 6% on FY 2025, with customer revenue of AUD 150 million, down 4%. That decline reflects the expected non-recurrence of previously exited customers and foreign exchange movements. Excluding these, the portfolio actually grew by 3.8%.

Speaker #3: It's been a very heavy lift, beyond our thinking, as I have indicated. And to do so in this overhead envelope is remarkable. In short, the restructuring is largely done.

Speaker #3: A stronger EML is emerging, and our commercial momentum is becoming infectious. We've moved to slide 5, please. Financial performance for the year was in line with our revised guidance.

Speaker #3: Stuart will take you through the details shortly, but at a headline level for continuing operations: revenue was $206.8 million, down 6% on FY25, with customer revenue of $150 million, down 4%.

Speaker #3: That decline reflects the expected non-recurrence of previously exceeded customers and foreign exchange movements. Excluding these, the portfolio actually grew by 3.8%. Interest revenue declined 11% to $56.7 million, as central bank rates reduced across all regions, with our bond program partially tempering the impact.

Anthony Hynes: Interest revenue declined 11% to AUD 56.7 million as central bank rates reduced across all regions, with our bond program partially tempering the impact. We think FY 2026 represented the bottom of the cycle for the foreseeable future. Underlying EBITDA was AUD 48.3 million, and within our revised guidance range, and overheads were well managed at AUD 104.1 million, down 3% on the prior year. Our statutory result improved materially, with a net loss after tax from continuing operations of AUD 19.7 million, compared to a loss of AUD 53 million in the year prior. Cash at year-end was AUD 37.8 million, down AUD 21.6 million over the year. This reflects outflows for legacy matters, and yes, I'm as sick of these as you all are, including the class action settlement, repayments to the PFS liquidator, and investments in Project Arlo and Tendren, our mobility technology and go-to-market partner.

Speaker #3: We think FY26 represented the bottom of the cycle for the foreseeable future. Underlying EBITDA was $48.3 million and within our revised guidance range, and overhead was well managed at $104.1 million, down 3% on the prior year.

Speaker #3: Our statutory result improved materially, with a net loss after tax from continuing operations of $98.7 million, compared to a loss of $53 million in the prior year.

Speaker #3: Cash at year-end was $37.8 million, down 21.6% over the year. This reflects outflows for legacy matters and, yes, I'm as sick of these as you all are, including the class action settlement, repayment of the PFS liquidator, and investments in Project Arlo and Tendran.

Speaker #3: Our mobility technology and go-to-market partner. Importantly, these outflows are largely non-recurring, and their conclusion underpins the free cash flow trajectory I'll come back to in the outlook.

Anthony Hynes: Importantly, these outflows are largely non-recurring, and their conclusion underpins the free cash flow trajectory I'll come back to in the outlook. We can move to slide six, please, moderator. Moving to EML 2.0 and our progress, I want to walk you through each pillar. Starting with our global operating model and strengthening leadership. We've significantly strengthened the leadership across all of our markets. Our global HRIS platform has been deployed, replacing five separate systems, and a single global performance management framework is embedded, aligning individual accountability with our strategic objectives. As I mentioned, our global operations center in Sofia is realizing a 35% cost saving with 31 FTE now in place. This sort of thing really ought to be BAU, but the state that we found this company in versus where it is at today is akin to comparing a fork mower in success.

Speaker #3: We can move to slide 6, please, moderator. Moving to EML 2.0 and our progress, I want to walk you through each pillar, starting with our global operating model and strengthening leadership.

Speaker #3: We've significantly strengthened the leadership across all of our markets. Our global HRIS platform has been deployed, replacing five separate systems, and a single global performance management framework is embedded, aligning individual accountability with our strategic objectives.

Speaker #3: And as I mentioned, our global operations center in Sofia is realizing a 35% cost saving, with 31 FTE now in place. This sort of thing really ought to be BAU, but the state that we found this company in versus where it is at today is akin to comparing a quagmire and success.

Speaker #3: Moving to the revised revenue engine. The pipeline continues to build—$109 million at report date—with pleasing conversion rates. Top 30 renewals are continuing, with 9 extensions during the year.

Anthony Hynes: Moving to the revived revenue engine. The pipeline continues to build, AUD 109 million at report date, with pleasing conversion rates. Top 30 renewals are continuing, with nine extensions during the year. We've strengthened our commercial and product leadership, with new regional heads appointed in Europe and APAC late in the second half. Local leadership, particularly in commercial, remains a critical performance enabler, and while we didn't get this right at the start of last year, we have now, and it's reflecting in our new business performance. The final pillar, our single platform, AKA Project Arlo. Arlo is advancing at pace through the build phase. An initial pilot has been deployed in the UK, with testing underway, including client testing. A migration planning team is established and indeed planning, with UK migration commencing FY 2027. I'll say more about Arlo in the outlook. Can move to slide seven, please, moderator.

Speaker #3: We've strengthened our commercial and product leadership with new regional heads appointed in Europe and APAC late in the second half. Local leadership, particularly in commercial, remains a critical performance enabler, and while we didn't get this right at the start of last year, we have now—and it's reflecting in our new business performance.

Speaker #3: And the final pillar, our single platform—also known as Project Arlo: Arlo is advancing at pace through the build phase. An initial pilot has been deployed in the UK, with testing underway, including client testing.

Speaker #3: Our migration planning team has been established and is indeed planning, with UK migration to commence in FY27. I'll say more about Arlo in the outlook. We can move to slide 7, please, moderator.

Speaker #3: Let me now give you a more granular view of the business development, which I know is front of mind for many of our shareholders.

Anthony Hynes: Let me now give you a more granular view of the business development, which I know is front of mind for many of our shareholders. A new program pipeline stands at AUD 109 million, as I said, of annualized revenue at report date. AUD 69.6 million in North America, AUD 23.5 million in Europe, and AUD 16 million in Australia. Approximately AUD 50 million of that pipeline, and this is important, is in client tender or final decision phases. Turning to contract flow. Since 1 July 2025, we've won contracts with an annualized revenue forecast of AUD 15.8 million. Of that, AUD 7.2 million has launched, is already generating revenue, and a further AUD 8.5 million is to launch, with AUD 6.3 million or 74% of it due to launch within 60 days. A portion of this will be realized this financial year based on start dates and ramp dynamics. What's working? Pipeline build remains on track.

Speaker #3: A new program pipeline stands at $109 million, as I said, of annualized revenue at report date: $69.6 million in North America, $23.5 million in Europe, and $16 million in Australia.

Speaker #3: Approximately $50 million of that pipeline—and this is important—is in client tender or final decision phases. In terms of contract flow, since 1 July 2025, we've won contracts with an annualized revenue forecast of $15.8 million. Of that, $7.2 million has launched and is already generating revenue, and a further $8.5 million is to launch, with $6.3 million, or 74% of it, due to launch within 60 days.

Speaker #3: A portion of this will be realized this financial year, based on start dates and ramp dynamics. So, what's working? Pipeline build remains on track, our FY26 conversion rate of 35% is strong, margins are holding, and our digital programs have been re-energized, mainly in North America.

Anthony Hynes: Our FY 2026 conversion rate of 35% is strong. Margins are holding, and our digital programs have been re-energized, mainly in North America. Digital program revenue is probably the most difficult to pin down. We've had a number of opportunities that we softed and first thought in FY 2027, but are ultimately bigger revenue opportunities over the three-year cycle by a number of factors. What's not working. Signed the revenue timing. It's a mixture of partner and client dependencies as I flagged, but enhancement work is well underway. Europe was lagging, but we've appointed a new regional commercial lead there who is joining shortly, and we've recalibrated the opportunity size for several accounts. Contracts we believe will, over time, prove at least as valuable as originally anticipated. Can move to slide 8, please. This slide speaks to our existing client base or getting more from the core.

Speaker #3: Digital program revenue is probably the most difficult to pin down, and we've had a number of opportunities that we've softened and first sorted in FY27, but are ultimately bigger revenue opportunities over the three-year cycle by a number of factors.

Speaker #3: And what’s not working? Signed a revenue timing instead of a mixture of partner and client dependencies, as I’ve flagged, but enhancement work is well underway.

Speaker #3: Europe was lagging, but we've appointed a new regional commercial lead there who is joining shortly. We've also recalibrated the opportunity size for several accounts—contracts we believe will, over time, prove at least as valuable as originally anticipated.

Speaker #3: We can move to slide 8, please. This slide speaks to our existing client base, or giving more from the core. Our renewal performance continues to be strong.

Anthony Hynes: Our renewal performance continues to be strong. Nine of our top 30 contracts were renewed in the last 12 months, including three of our top five. That is testament to improved operational performance and a step change in our relationship management. Product innovation is now front and center with many of our key clients, which we see as a leading indicator of the quality of these partnerships. Our customer Salary Packaging benefit maximizer in the opening. We're also very active with merchant reward and discount solutions as an additional benefit for programs in Australia, and this will feature in Arlo for global rollout. On trading, the H2 was softer in the northern hemisphere across our gift and incentive programs and some UK government programs. Existing client customer revenue, excluding interest and previously reported terminations, was down 4% half on half. Concentration remains well managed.

Speaker #3: Nine of our top 30 contracts were renewed in the last 12 months, including three of our top five. That is testament to improved operational performance and a step change in our relationship management.

Speaker #3: Product innovation is now front and center with many of our key clients, which we see as a leading indicator of the quality of these partnerships.

Speaker #3: I'll touch on our Sell Pack Benefit Maximizer in the opening. We're also very active with merchant reward and discount solutions as an additional benefit for programs in Australia.

Speaker #3: And this will feature in Arlo for global rollout. On trading, the second half was softer in the northern hemisphere across our gift and incentive programs, and some UK government programs.

Speaker #3: Existing client customer revenue, excluding interest and previously reported terminations, was down 4% half-on-half. Concentration remains well managed. Our top client represents around 8% of revenue; our top five are around 23%, and our top 30 around 47%.

Anthony Hynes: Our top client represents around 8% of revenue, our top five around 23%, and our top 30 around 47%. Moving to slide 9, please. Turning to mobility, our first strategic product initiative and one I'm spending a good deal of my time on. We're building a digital first global mobility solution that replaces legacy fuel cards with a state-of-the-art open loop offering. No more plastic cards. No more three fuel cards in your car, even when it's an EV. No more 3.5% surcharging. This is a large and growing market. Global mobility payment volumes represented around AUD 1 trillion in 2023, is forecast to reach AUD 2.1 trillion by 2033. It's an 11% compound annual growth rate. It's a hot space, and EML is active not just in Australia, but globally and with the right partners.

Speaker #3: Moving to slide 9, please. Turning to mobility, our first strategic product initiative and one I'm spending a good deal of my time on. We're building a digital-first, global mobility solution that replaces legacy fuel cards with a state-of-the-art, open-loop offering.

Speaker #3: No more plastic cards, no more free fuel cards in your car, even when it's an EV. No more 3.5% surcharging. This is a large and growing market; global mobility payment volumes represented around $1 trillion in 2023, and are forecast to reach $2.1 trillion by 2033.

Speaker #3: It's an 11% compound annual growth rate. It's a hot space, and EML is active not just in Australia, but globally, and with the right partners.

Speaker #3: We've partnered with Tengren, a digital-first enterprise mobility tech group, to revolutionize this market. The solution combines what each partner does best. EML brings program management, issuing and processing across closed and open loop, regulatory and payment rail licensing, ledger and funds management, and a large existing client base.

Anthony Hynes: We've partnered with Tendren, a digital first enterprise mobility tech group, to revolutionize this market. The solution combines what each partner does best. EML brings program management, issuing and processing across closed and open loop, registry and payment rail licensing, ledger and funds management, and a large existing client base. Our partner, Tendren, brings global fuel retailer integrations, enterprise solutions for own brand programs, control and configuration capability, and deep domain expertise. Together with a new business pipeline through its go to market. Reflecting the strategic importance of this capability, EML made a AUD 7 million equity investment in Tendren during the H2, representing a 28% interest, which may grow over time as the solution market develops. With that investment comes joint go to market and co-development of market leading functionality. Platform build is well underway and launch client engagement is advancing the plan.

Speaker #3: Our partner Tengren brings global fuel retailer integrations, enterprise solutions for own-brand programs, control and configuration capability, and deep domain expertise, together with a new business pipeline through its go-to-market.

Speaker #3: Reflecting the strategic importance of this capability, EML made a $7 million equity investment in Tengren during the second half, representing a 28% interest, which may grow over time as the solution market develops.

Speaker #3: With that investment comes joint go-to-market and co-development of market-leading functionality. Platform build is well underway, and launch client engagement is advancing the plan. We will use FY27 to test the platform ahead of a full commercial launch towards the end of the year.

Anthony Hynes: We will use FY27 to test the platform ahead of a full commercial launch towards the end of the year. Beyond mobility, we see large scale product opportunities across several verticals, which speaks both to the positive market dynamics and to EML's capability to engage at this level. Can we move to slide 10, please, moderator? As Arlo moved into the second phase of core build, vendor integration and readiness planning, new executive and project leadership was injected. We're now deployed for testing in the UK region and will be underway with migration in the H2. We expect Australia deployment mid next calendar year and a similar process of initial testing ramping up to new client onboarding and migration of existing customers. As I've said before, we're taking a measured and staged approach to migration to avoid disruption, both internally and for our clients.

Speaker #3: Beyond mobility, we see large-scale product opportunities across several verticals, which speaks both to the positive market dynamics and to EML's capability to engage at this level.

Speaker #3: Can we move to slide 10, please, moderator? As Arlo moved into the second phase of core build, vendor integration, and readiness planning, new executive and project leadership was injected.

Speaker #3: We are now deployed for testing in the UK region and will be underway with migration in the second half. We expect Australia deployment mid-next calendar year, and a similar process of initial testing ramping up to new client onboarding and migration of existing customers.

Speaker #3: As I've said before, we're taking a measured and staged approach to migration to avoid disruption, both internally and for our clients. Based on an updated view of migration time and the core functionality we want to build in—which now includes mobility and bringing a number of external vendor capabilities in-house—the timeline extends, and with it, the investment profile.

Anthony Hynes: Based on an updated view of migration time and the core functionality we want to build in, which now includes mobility and bringing a number of external vendor capabilities in-house, the timeline extends and with it, the investment profile. Between the Arlo core build and operational implementation, we forecast non-recurring expenditure of approximately AUD 15.7 million this financial year, AUD 2.4 million next year, and AUD 1 million the year after. Importantly, our updated planning assumes not less than AUD 12 million of annualized overhead savings on full Arlo deployment. The payback is near to medium term. In summary, we've accomplished a lot in 12 months, but have a lot to get through, in FY27, with a big focus on commercial performance and Arlo, as I've mentioned. We're encouraged by green shoots and the opportunities ahead of us. I'll now hand over to Stuart to take you through the financial details.

Speaker #3: Between the Arlo core build and operational implementation, we forecast non-recurring expenditure of approximately £15.7 million this financial year, £2.4 million next year, and £1 million the year after.

Speaker #3: Importantly, our updated planning reference is not less than £12 million of annualized overhead savings on full Arlo deployment. The payback is near the medium term.

Speaker #3: In summary, we've accomplished a lot in 12 months, but have a lot to get through in FY27, with a big focus on commercial performance and Arlo, as I've mentioned.

Speaker #3: But we're encouraged by Brainshoots and the opportunities ahead of us. I'll now hand over to Stuart to take you through the financial details.

Speaker #2: Thank you, Anthony. I'll start with slide 12, beginning with the group's key operating metrics. FY26 was a challenging year from an earnings perspective, with underlying EBITDA declining 18% to $48.3 million.

Stuart Will: Thank you, Anthony. I'll start with slide 12. Beginning with the group's key operating metrics. FY26 was a challenging year from an earnings perspective, with underlying EBITDA declining 18% to AUD 48.3 million. Revenue was impacted by three key headwinds, the non-recurrence of AUD 10.8 million of FY25 customer revenue for programs previously terminated, but in run-off mode, which have been communicated to the market previously. Foreign exchange movements and lower interest revenue following reductions in global cash rates. As Anthony noted, our expectation is that FY26 was the bottoming out of the yield curve for the medium-term cycle. Our European business also felt the impact of softer trading across two large customers in the H2 of FY26. Trading with these customers has stabilized and is expected to remain at current levels into FY27. Excluding these factors, underlying performance remained broadly resilient, underpinned by strong cost discipline.

Speaker #2: Revenue was impacted by three key headwinds: the non-recurrence of $10.8 million of FY25 customer revenue for programs previously terminated but in runoff mode, which have been communicated to the market previously; foreign exchange movements; and lower interest revenue following reductions in global cash rates.

Speaker #2: As Anthony noted, our expectation is that FY26 was the bottoming out of the yield curve for the medium-term cycle. Our European business also felt the impact of softer trading across two large customers in the second half of FY26.

Speaker #2: Trading with these customers has stabilized and is expected to remain at current levels into FY27. Excluding these factors, underlying performance remained broadly resilient, underpinned by strong cost discipline.

Speaker #2: On a reported basis, customer revenue declined 4%, driven by Europe and North America, partially offset by growth in Australia. Excluding the headwinds noted earlier, the portfolio was up 3.8%.

Stuart Will: On a reported basis, customer revenue declined 4%, driven by Europe and North America, partially offset by growth in Australia. Excluding the headwinds noted earlier, the portfolio was up 3.8%. Moving to interest revenue, we saw an 11% decline, reflecting lower central bank rates across all regions. Our bond portfolio continued to perform as expected, and we plan to make wider use of bond instruments to drive interest yield over the coming year. Net overheads decreased by AUD 3.5 million as efficiencies were realized in both internal and external resourcing, while investment continued in commercial capability and the go-to-market team. Cash decreased by AUD 21.6 million from June 2025, with outflows relating to the class action settlement, repayment to the PFS liquidator, Project Arlo bills, investment in Tendren, and restructuring payments. These outflows were funded through operating cash flow and a drawdown of debt. More on that later.

Speaker #2: Moving to interest revenue, we saw an 11% decline, reflecting lower central bank rates across all regions. Our bond portfolio continued to perform as expected, and we plan to make wider use of bond instruments to drive interest yield over the coming year.

Speaker #2: Net overheads decreased by $3.5 million as efficiencies were realized in both internal and external resourcing, while investment continued in commercial capability and the go-to-market team.

Speaker #2: Cash decreased by $21.6 million from June 2025, with outflows relating to the class action settlement, repayment to the Peaceful Liquidator, Project Arlo build, investment in Tengren, and restructuring payments.

Speaker #2: These outflows were funded through operating cash flow and a drawdown of debt—more on that later. Moving to Slide 13, we show the financial performance of Europe.

Stuart Will: Moving to slide 13, we show the financial performance of Europe. Europe remains our largest segment, with just under 500 customers across the UK and the broader European region, operating across government, financial services and human capital management. Europe revenue was down 14% on FY25, reflecting the non-recurrence of certain customer programs and lower interest revenue. Customer revenue itself declined 16% to EUR 65.4 million. This reflected EUR 9.7 million of non-recurring FY25 revenue from exiting customers and a EUR 3.2 million impact from softer trading across two large customers, which were down 21% versus the prior corresponding period. Trading has stabilized in Q4 and is expected to improve over FY27. Against those headwinds, key existing customers, which comprise 65% of FY26 revenue, delivered 7% underlying growth, demonstrating the strength of the portfolio. Interest revenue declined 11% as falling central bank rates were partly extended by a shift towards higher yielding bonds.

Speaker #2: Europe remains our largest segment, with just under 500 customers across the UK and the broader European region, operating across government, financial services, and human capital management.

Speaker #2: Europe revenue was down 14% on FY25, reflecting the non-recurrence of certain customer programs and lower interest revenue. Customer revenue itself declined 16% to $65.4 million.

Speaker #2: This reflected $9.7 million of non-recurring FY25 revenue from exiting customers, and a $3.2 million impact from softer trading across two large customers, which were down 21% versus the prior corresponding period.

Speaker #2: Trading has stabilized in Q4 and is expected to improve over FY27. Against those headwinds, key existing customers, which comprise 55% of FY26 revenue, delivered 7% underlying growth.

Speaker #2: Demonstrating the strength of the portfolio, interest revenue declined 11%, as falling central bank rates were partly tempered by a shift towards higher yielding bonds.

Speaker #2: Net overheads reduced 10% in the region, following the Group's transition to a more centralized operating model. And overall, underlying EBITDA for Europe was $35.7 million, down 22% on FY25.

Stuart Will: Net overheads reduced 10% in the region, following the group's transition to a more centralized operating model. Overall, underlying EBITDA for Europe was EUR 35.7 million, down 22% on FY25. Gross profit was in line with the prior year, while EBITDA margin was impacted by the revenue pressures. Moving to slide 14, we show the performance of the Asia Pacific segment. This comprises our Australia and New Zealand business, which are predominantly general-purpose reloadable products with a strong human capital management presence and just under 200 customers overall. Total revenue was up 8% in FY26 to AUD 56.5 million. Customer revenue increased 14% to AUD 47.6 million, with the human capital management vertical leading the growth.

Speaker #2: Gross profit was in line with the prior year, while EBITDA margin was impacted by the revenue pressures. Moving to slide 14, we show the performance of the Asia-Pacific segment.

Speaker #2: This comprises our Australia and New Zealand business, which are predominantly general-purpose reloadable products with a strong human capital management presence, and just under 200 customers overall.

Speaker #2: Total revenue was up 8% in FY26 to $56.5 million. Customer revenue increased 14% to $47.6 million, with the human capital management vertical leading the growth. Salary packaging active benefit accounts were up 14% on FY25, and this is a strong, developing vertical for EML. We're pleased to have secured several key client renewals over the last 12 months, which creates a great runway for the team to advance their innovation agenda with this growth-oriented client group in FY27 and beyond.

Stuart Will: Salary Packaging active benefit accounts were up 14% on FY25, and this is a strong developing vertical for EML Payments, and we are pleased to have secured several key client renewals over the last 12 months, which creates a great runway for the team to advance their innovation agenda with this growth-orientated client group in FY27 and beyond. Interest revenue was down 14%, reflecting reserve bank rate reductions through FY26. Net overheads increased in Asia Pacific as part of the group's transition to a more centralized operating model. Overall, group costs reduced, so the increases in Australia reflect a rebalancing of the operating model rather than an increase in the group's overall cost base. Underlying gross profit increased 5% to AUD 35.9 million, while underlying EBITDA declined 19% to AUD 10.4 million. Gross profit margins were in line with the prior corresponding period, while EBITDA margin was impacted by the uptick in overheads.

Speaker #2: Interest revenue was down 14%, reflecting Reserve Bank rate reductions through FY26. Net overheads increased in Asia-Pacific as part of the group's transition to a more centralized operating model.

Speaker #2: Overall, group costs reduced, so the increases in Australia reflect a rebalancing of the operating model rather than an increase in the growth in the group’s overall cost base.

Speaker #2: Underlying gross profit increased 5% to $35.9 million, while underlying EBITDA declined 19% to $10.4 million. Gross profit margins were in line with the prior corresponding period, while EBITDA margin was impacted by the uptick in overheads.

Speaker #2: Moving to slide 15, we show the performance of the North American segment. North America operates predominantly in retail gift and incentive products, with participation in financial services via the VAN product and some exposure to gaming.

Stuart Will: Moving to slide 15, we show the performance of the North American segment. North America operates predominantly in retail gift and incentive products, with participation in financial services via the VAN product and some exposure to gaming. The segment has just under 500 customers. Customer revenue declined 2% to AUD 37.1 million, and this was driven by a AUD 1.6 million foreign exchange impact when using FY2025 rates and a AUD 1.2 million impact of non-recurring FY2025 revenue from exiting customers, partially offset by solid growth from the remaining portfolio. Consistent with other regions, North America experienced lower interest revenue as cash rates declined. Underlying gross profit increased 1% to AUD 28.6 million and net overheads fell 12% following the group's transition to a more centralized operating model, and the underlying EBITDA rose 74% to AUD 7.1 million. Moving to slide 16, which provides further detail on the group's overheads.

Speaker #2: The segment has just under 500 customers. Customer revenue declined 2% to $37.1 million, and this was driven by a $1.6 million foreign exchange impact when using FY25 rates, and a $1.2 million impact of non-recurring FY25 revenue from exiting customers, partially offset by solid growth from the remaining portfolio.

Speaker #2: Consistent with other regions, North America experienced lower interest revenue as cash rates declined. Underlying gross profit increased 1% to $28.6 million, and net overheads fell 12% following the Group's transition to a more centralized operating model. Underlying EBITDA rose 74% to $7.1 million.

Speaker #2: Moving to slide 16, which provides further detail on the group's overheads. Underlying overheads were $104.1 million, $3.4 million lower than the prior corresponding period.

Stuart Will: Underlying overheads were AUD 104.1 million, AUD 3.4 million lower than the prior corresponding period. This reflects cost optimization measures and benefits from EML 2.0 efficiencies continuing to be realized. Cost savings were delivered across employee entitlements and professional fees, partly offset by investment in ICT and higher recovery of VAT than GST charges. Employee entitlements were AUD 3.7 million lower than the prior period, reflecting operational efficiencies and lower short-term incentive costs. As shareholders would expect, there is a clear link between performance achieved and incentives paid. These costs are expected to normalize in FY2027 to around AUD 110 million, consistent with previous guidance. Technology cost increases reflect targeted investment in the current platforms and the broader new global operating model. All other costs remain broadly in line with the prior year.

Speaker #2: This reflects cost optimization measures and benefits from EML 2.0 efficiencies continuing to be realized. Cost savings were delivered across employee entitlements and professional fees, partly offset by investment in ICT and higher recoverable VAT and GST charges.

Speaker #2: Employee entitlements were $3.7 million lower than the prior period, reflecting operational efficiencies and lower short-term incentive costs. As shareholders would expect, there is a clear link between performance achieved and incentives paid.

Speaker #2: These costs are expected to normalize in FY27 to around $110 million, consistent with previous guidance. Technology cost increases reflect targeted investment in the current platforms and the broader new global operating model.

Speaker #2: All other costs remain broadly in line with the prior year. Project Arlo cost expense in FY26 was $4.2 million, related to the build, and these were excluded from net overheads and underlying EBITDA, consistent with previous guidance.

Stuart Will: Project Arlo costs expensed in FY2026 were AUD 4.2 million relating to the bill, and these were excluded from net overheads and underlying EBITDA consistent with previous guidance. Moving to slide 17, we show the group's treasury management position and interest income performance. Stored float was AUD 2.2 billion at 30 June 2026. By currency, the largest exposures were GBP at 46%, followed by the AED at 24% and EUR at 21%. Interest revenue decreased 11% to AUD 56.7 million. This reflects, as previously mentioned, lower cash rates and a 6% reduction in float balances, with Europe accounting for the majority of the decline as a result of its trading headwinds. Of the total stored float, AUD 1.5 billion was held in cash and AUD 0.7 billion in bonds. The bond portfolio contributed 52% of total interest revenue, or AUD 29.4 million, with an average term of 2.5 years and an average yield of 4%.

Speaker #2: Moving to slide 17, we show the group's treasury management position and interest income performance. Stored float was $2.2 billion at 30 June 2026, and by currency the largest exposures were GBP at 46%, followed by AUD at 24%, and euro at 21%.

Speaker #2: Interest revenue decreased 11% to $56.7 million; this reflects, as previously mentioned, lower cash rates and a 6% reduction in float balances, with the euro accounting for the majority of the decline as a result of its trading headwinds.

Speaker #2: Of the total stored float, $1.5 billion was held in cash and $0.7 billion in bonds. The bond portfolio contributed 52% of total interest revenue, or $29.4 million, with an average term of 2.5 years and an average yield of 4%.

Speaker #2: The annualized yield in FY26 was approximately 3.2%, compared with 3.6% in FY25, with an exceeding yield of approximately 3.3% at 30 June 2026. Moving to slide 18, we show the key cash flow movements for FY26.

Stuart Will: The annualized yield in FY2026 was approximately 3.2%, compared with 3.6% in FY2025, with an exiting yield of approximately 3.3% at 30 June 2026. Turning to slide 18, we show the key cash flow movements for FY2026. As mentioned, cash decreased by AUD 21.6 million during the year. Key outflows included the class action settlement of AUD 40.9 million, one-off items, including restructuring costs of AUD 20.4 million, and Project Arlo investment capitalized of AUD 13 million. These were partly offset by strong underlying operating cash flow of AUD 47.8 million, with the balance funded by AUD 54.8 million debt drawdown. There remains AUD 35 million of undrawn debt capacity under the syndicated debt facility, subject to covenant compliance in the ordinary course. The facility is due for renewal September 2028 through September 2029.

Speaker #2: As mentioned, cash decreased by $21.6 million during the year. Key outflows included the class action settlement of $40.9 million, one-off items including restructuring costs of $20.4 million, and Project Arlo investment capitalized of $13 million.

Speaker #2: These were partly offset by strong underlying operating cash flow of $47.8 million, with the balance funded by a $54.1 million debt drawdown. There remains $35 million of undrawn debt capacity under the syndicated debt facility.

Speaker #2: Subject to covenant compliance in the ordinary course, the facility is due for renewal September 28 through September 29. Underlying EBITDA of $48.3 million translated into underlying operating cash flow of $47.8 million, demonstrating solid cash conversion by favorable working capital movements, including but not limited to the collection of previously secured interest and some improvement in aged debtors.

Stuart Will: Underlying EBITDA of AUD 48.3 million translated into underlying operating cash flow of AUD 47.8 million, demonstrating solid cash conversion underpinned by favorable working capital movements, including but not limited to the collection of previously accrued interest and some improvement in aged debtors. With historical one-off outflows behind us and following the strategic actions taken over recent periods, we remain focused on improving cash conversion and strengthening cash flow management to support financial stability and improve shareholder value creation. In FY2027, we will maintain a strong focus on cash flow management alongside continued investment in the Arlo project. In concluding and in summary, FY2026 was impacted by known revenue and interest rate headwinds, some late in the year trailing softness in specific Northern Hemisphere programs. However, the business delivered strong cash conversion, reduced net overheads, and continued to invest in the operating model and platform needed to support future growth.

Speaker #2: With historical one-off outflows behind us, and following the strategic actions taken over recent periods, we remain focused on improving cash conversion and strengthening cash flow management to support financial stability and improve shareholder value creation.

Speaker #2: In FY27, we will maintain a strong focus on cash flow management alongside continued investment in the Arlo project. In conclusion and in summary, FY26 was impacted by known revenue and interest rate headwinds, with some late-in-the-year trailing softness in specific Northern Hemisphere programs. However, the business delivered strong cash conversion, reduced net overheads, and continued to invest in the operating model and platform needed to support future growth.

Speaker #2: As noted earlier, on a pro forma basis, absent non-recurring cash outs expected to roll off in FY28, the business would generate $30 to $35 million of free cash flow, and an equivalent reduction in net debt, moving it to the range of $15 to $20 million by the end of FY28.

Stuart Will: As noted earlier, on a pro forma basis, absent non-recurring cash outs expected to roll off in FY2028, the business would generate AUD 30 to 35 billion of free cash flow and equivalent reduction in net debt, moving it to the range of AUD 15 to 20 billion by the end of FY2028. I will now hand back to Anthony to cover the FY2027 outlook and key priorities.

Speaker #2: I will now hand back to Anthony to cover the FY27 outlook and key priorities.

Speaker #1: Thank you, Stewart, and I'm sure everyone, like myself, is waiting till this scripted part is over so we can get into the business of Q&A.

Anthony Hynes: Thank you, Stuart, and I am sure everyone, like myself, is waiting until this scripted part is over and we can get into the business of Q&A. We look to FY2027. Our priorities are pretty simple. Turn wins into revenue, activate Arlo, and renew our key clients. On the commercial front, success is closing new business deals, improving contractor revenue time, growing the pipeline to circa AUD 150 million by year-end, renewing several key contracts, continuing our innovation drive across the top 30, and a new mobility solution being live by mid-calendar year. On efficiency, we will continue to grow our global operations center, working closely with our Arlo implementation team on a workforce shape into the future, mindful of digitization and automation benefits we expect. We are also accelerating GenAI and unified risk management across our operational teams.

Speaker #1: We've looked to FY27. Our priorities are pretty simple: turn wins into revenue, activate Arlo, and renew our key clients. On the commercial front, success is closing new business deals, improving contractor revenue time, growing the pipeline to around $150 million by year-end, renewing several key contracts, continuing our innovation drive across the top 30, and having a new mobility solution live by mid-calendar year.

Speaker #1: On efficiency, we'll continue to grow our global operations center, working closely with our Arlo implementation team on workforce shaping into the future, mindful of the digitization and automation benefits we expect.

Speaker #1: We'll also accelerate agentic AI and unify business management across our operational teams. On technology, we're taking a measured and staged approach to Arlo to optimize its adoption.

Anthony Hynes: On technology, we are taking a measured and staged approach to Arlo to optimize its adoption. The UK migration will advance during the year with new clients onboarding directly to Arlo, and our APAC deployment is planned for the last quarter, ready for FY2028. On guidance, we are guiding to underlying EBITDA in a range of AUD 50 to AUD 54 million. This factors in improvement in both customer and interest revenue, with interest yields forecast to improve around 20 basis points and overheads at the longer term average of approximately AUD 110 million. Importantly, as the bulk of the Arlo transformational legacy remediation expenditure falls away, we forecast pro forma free cash flow of AUD 30 to AUD 35 million in FY2028. That is the prize, and we see a clear path to it.

Speaker #1: The UK migration will advance during the year, with new clients onboarding directly to Arlo, and our APAC deployment is planned for the last quarter, ready for FY28.

Speaker #1: On guidance, we're guiding to underlying EBITDA in a range of $50 to $54 million. This factors in improvement in both customer and interest revenue, with interest yields forecast to improve around 20 basis points, and overheads at the longer-term average of approximately $110 million.

Speaker #1: Importantly, as the bulk of the Arlo transformational legacy remediation expenditure falls away, we forecast pro forma free cash flow of $30 to $35 million in FY28.

Speaker #1: That is the prize, and we see a clear path to it. Naturally, if we shift from a pro forma lens to an actual FY28 earnings forecast, underpinned by ticking off the objectives I've shared today, then we would expect that to be higher.

Anthony Hynes: Naturally, if we shift from a pro forma lens to an actual FY28 earnings forecast underpinned by ticking off the objectives I have shared today, then we would expect that to be higher. Our focus is the here and now, and we have lots to close out this year. Transformations of this scale are never easy, and they never run perfectly to plan. We are more capable today than at any point in EML's history, and we expect our commercial performance to improve through FY27, laying a solid foundation for FY28 and beyond. Alongside the unflashy foundation build, we are also working on exciting near and longer term opportunities with some great clients, partners, and brands.

Speaker #1: But our focus is the here and now, and we've had a lot to close out this year. Transformations of this scale are never easy, and they're never run perfectly to plan.

Speaker #1: But we're more capable today than at any point in EML's history, and we expect our commercial performance to improve through FY27, laying a solid foundation for FY28 and beyond.

Speaker #1: Alongside the unflashy foundation build, we're also working on exciting near- and longer-term opportunities with some great clients, partners, and brands. Before I open the floor to questions, I want to take this opportunity to thank our hardworking team.

Anthony Hynes: Before I open the floor to questions, I want to take this opportunity to thank our hardworking team, including members of our local and global boards, our partners, our customers, and of course, our shareholders for their continued support of EML.

Speaker #1: Including members of our local and global boards, our partners, our customers, and, of course, our shareholders for their continued support of EML. Thank you for listening to our presentation this morning.

Anthony Hynes: Thank you for listening to our presentation this morning. We are happy to take questions. Thank you, moderator.

Speaker #1: We're happy to take questions. Thank you, Moderator.

Speaker #3: Thank you. If you wish to ask questions, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2.

Operator 2: 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 are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Elise Kennedy with Petra Capital. Please proceed.

Operator: 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 are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Elise Kennedy with Petra Capital. Please proceed.

Speaker #3: If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Elise Kennedy with Petra Capital.

Speaker #3: Please proceed.

Speaker #1: Hi, Elise.

Anthony Hynes: Hey, Elise.

Anthony Hynes: Hi, Stuart. Hey. Quick question on your free cash flow forecast for 30 to 35 for FY28. What do you expect the FY27 base to be and some of the moving parts that fall away in that year?

Elise Kennedy: Hi, Stuart. Hey. Quick question on your free cash flow forecast for 30 to 35 for FY28. What do you expect the FY27 base to be and some of the moving parts that fall away in that year?

Speaker #4: Hi. Quick question. On your free cash flow forecast, it is 30 to 35 for FY28. What do you expect the FY27 base to be, and what are some of the moving parts that fall away in that year?

Speaker #1: Sure. So, for FY27, Elise, we will continue to invest in Arlo to the tune of about $17 million. We also have a range of liabilities already recorded on the books that will result in cash outflow in FY27, and they total approximately $19 million.

Stuart Will: Sure. FY27, Elise, we will continue to invest in Arlo to the tune of about AUD 17 million. We have a range of liabilities already recorded on the books that will result in cash flow out in FY27, and they total approximately AUD 19 million. So of the guided number of 50 to 54, they are the two largest components. On top of that, below EBITDA, we clearly have interest expense of in the order of AUD 8 to AUD 8.5 million.

Speaker #1: So, of the guided number of 50 to 54, they are the two largest components. I mean, on top of that, below EBITDA, we clearly have interest expense of in the order of $8 to $8.5 million, a range of other capital projects, but essentially we expect cash generated by the business in FY27 to largely be utilized in cash outflows and operating costs.

Elise Kennedy: Yeah

Stuart Will: a range of other capital projects. But essentially, we expect cash generated by the business in FY27 to largely be utilized in cash outflows and operating costs. So no expected borrowing drawdown and no expected material improvement in net debt in FY27.

Speaker #1: So, no expected borrowing drawdown and no expected material improvement in net debt in FY27.

Speaker #4: Noted, thank you. And then, just talking about some of the other investor proof points that we can get as investors—I know previously there were a few cobblers that were under the floor when you were looking at cleaning up the business.

Elise Kennedy: Noted. Thank you. Just talking about some of the other investor proof points that we can get as investors. I know previously there were a few cobwebs that were under a foot when you were looking at cleaning up the business. How confident and what are some of the signs that we can take that we know what we're looking for in FY27?

Speaker #4: How confident are we, and what are some of the signs that indicate we know what we're looking for in FY27?

Stuart Will: Are you asking if there is any more surprises? Is that essentially what-

Speaker #1: Are you asking if there are any more surprises? Is that essentially what you're saying?

Speaker #4: Yeah. I'm just—you're just confidence. Can you really go on through the business and...

Elise Kennedy: Just your confidence, because you have really gone through the business and put-

Anthony Hynes: The AUD 450 question, all this. Look, as best we can tell, honestly, as best we can tell, I mentioned this in my script, it has been a lot of hard work and some real heavy lifting. Of all of the things that we saw initially and the things that we have uncovered, we think we have bottomed out.

Speaker #1: The $400 million question, or this? Look, as best we can tell—honestly, as best we can tell, and I mentioned this in my script—this has been very… there’s been a lot of hard work and some real heavy lifting. Of all of the things that we saw initially, and the things that we've uncovered…

Speaker #1: We think we've bottomed out. Yeah. But we had, in the first quarter of last financial year, this issue with a platform, which we talked about previously.

Anthony Hynes: Yeah.

Anthony Hynes: But we had in the first quarter of last financial year, we had this issue with a platform which we talked about previously. I have been doing this for 25 years, Elise.

Speaker #1: I've been doing this for 25 years, Elise, so there's no way that we could have seen that coming. And so my only caveat is, we don't know what we don't know, but I swear to you—look, we have got, I think, world-class people in all of our key roles. We have done an incredible amount of assessment and digging to try and uncover as much as we possibly can.

Elise Kennedy: Yeah

Anthony Hynes: That we could have seen that coming. My only caveat is we do not know what we do not know. But I swear to you, we have got, I think, world-class people in all of our key roles. We have done an incredible amount of assessment and digging to try and uncover as much as we possibly can. Of the things that would be genuinely knowable, we know about them, we fixed them. We are as well prepared as anybody, I think, to be able to deal with whatever comes at us. The reality is we do not know what we do not know. I do not think there is anything enormous that gets thrown our way, but, I do not know what else to add to that.

Speaker #1: Of the things that would be genuinely knowable, we know about them, we fix them, we are as well prepared as anybody, I think, to be able to deal with whatever comes at us.

Speaker #1: The reality is, we don't know what we don't know. I don't think there's anything enormous that gets thrown our way, but I don't know what else to add to that.

Elise Kennedy: That is huge. Yeah. All right, then one last question.

Speaker #4: Yeah, right. And then one last question.

Speaker #1: You can see, right? We're prepared to talk about— we're prepared to talk about how we return to a free cash flow. And we wouldn't be doing that unless we thought we've solved for all of the key issues, and I think you should take that as a positive.

Stuart Will: You can see, right? We are prepared to talk about how we return to free cash flow.

Elise Kennedy: Yeah.

Stuart Will: We would not be doing that unless we thought we have solved for all of the key issues. I think you should take that as a positive.

Elise Kennedy: Mm-hmm. Just on the customer conversion, because it is a key way of getting there. You say the conversion rate is on target, but then there were some client delays and challenges in this H2. Is that finished now?

Speaker #4: Just on the customer conversion, because it's a key way of getting there. You say the conversion rates are on target, but then there were some client delays and challenges.

Speaker #4: In this half, is that finished now?

Speaker #1: The client delays?

Stuart Will: The client delays.

Speaker #4: I understand the combination. Yeah, the customer conversion predominantly, and the pipeline, and how much that's going to convert to revenue.

Elise Kennedy: If I understand the combination. The customer conversion predominantly.

Stuart Will: Yeah

Elise Kennedy: and the pipeline and how much that's going to convert to revenue.

Speaker #1: Yeah. So, over the past year, I would have talked a bit about the three things that have an impact on our run to revenue from contracts.

Stuart Will: Yeah. Over the past year, I've talked a bit about the three things that have an impact on our run to revenue from contracts. Our conversion in the pipeline from pipeline to contract is definitely on target. The move from contract to implementation, and I've talked about this before, but there are typically three things that impact that. One, which was a real problem a year ago, which was us. That's no longer really a problem. The second one is client readiness or capability. It could be anything from an internal project timeframe gets moved or a priority changes or whatever it might be. The things that are totally outside of our control that are customer-led.

Anthony Hynes: Yeah. Over the past year, I've talked a bit about the three things that have an impact on our run to revenue from contracts. Our conversion in the pipeline from pipeline to contract is definitely on target. The move from contract to implementation, and I've talked about this before, but there are typically three things that impact that. One, which was a real problem a year ago, which was us. That's no longer really a problem. The second one is client readiness or capability. It could be anything from an internal project timeframe gets moved or a priority changes or whatever it might be. The things that are totally outside of our control that are customer-led.

Speaker #1: So our conversion in the pipeline from pipeline to contract is definitely on target. The move from contract to implementation—and I've talked about this before—but there are typically three things that impact that.

Speaker #1: One, which was a real problem a year ago—which was us—that's no longer really a problem. The second one is client readiness or capability.

Speaker #1: So it could be anything from an internal project timeframe getting moved, or a priority changing, or whatever it might be. These are things that are totally outside of our control, that are customer-led.

Speaker #1: And they will always be an issue, and the size of that issue will ebb and flow depending on the customer and the time of year.

Anthony Hynes: That will always be an issue. The size of that issue will ebb and flow depending on the customer and the time of year. We know there are certain timeframes where nothing's going to happen. For example, over the Christmas-New Year period, we know we're never going to implement anybody new in the GNI space because that's when they're really busy. We know that, in Australia, we're not going to add anyone new in the March timeframe because of FBT years. There are windows where we know nothing's going to happen, but there are equally windows where, despite the best of planning and communications, and our relationships are immensely, immeasurably better than they used to be commercially. Sometimes plans change within customers, and that has an impact on implementation. So that's a perpetual state, as in it'll ebb and flow, and we can't control it.

Speaker #1: We know there are certain timeframes where nothing's going to happen. So, for example, over the Christmas–New Year period, we know we're never going to implement anybody new in the G&I space, because that's when they're really busy.

Speaker #1: We know that in Australia, we're not going to add anyone new in the sort of March timeframe because of FBT years. So there are windows where we know nothing's going to happen, but there are equally windows where, despite the best of planning and communications—and our relationships are immensely, immeasurably better than they used to be—commercially, sometimes plans change within customers, and that has an impact on implementation.

Speaker #1: So that's a perpetual state, as in, it'll ebb and flow and we can't control it. The third impact in the last half is our partners—some of our partners.

Anthony Hynes: The third one, which has really had quite some impact in the last half, is some of our partners. I've joked before that if something goes wrong at Visa or Mastercard, I can get on the phone to the C-suite, but I can't get on the phone to Tim Cook at Apple. There's just certain partnerships that we rely upon, and we can't influence the way we'd like to. There's a difference between conversion of pipeline to contract and then contract to implementation, and the implementation-

Speaker #1: And I've joked before that if something goes wrong at Visa or MasterCard, I can get on the phone to the C-suite, but I can't get on the phone to Tim Cook at Apple.

Speaker #1: So, there are just certain partnerships that we rely upon, and we can't influence them the way we'd like to. There's a difference between conversion of pipelines to contract, and then contract to implementation.

Speaker #1: And the implementation has those three elements that can impact. The positives are the ones that we can impact, we've solved for, and we're a lot better at today than we used to be.

Elise Kennedy: Yeah

Anthony Hynes: has those three elements that can impact. The positive is the ones that we can impact, we have solved for, and we are a lot better at today than we used to be. The other two are in the hands of our customers or our partners, and we cannot always control those things.

Speaker #1: But there's a cut, the other two are in the hands of our customers or our partners, and we can't always control those things.

Speaker #4: Right. Appreciate your time, Anthony Stewart.

Elise Kennedy: Great. Appreciate your time, Anthony, Stuart.

Speaker #1: Thank you.

Anthony Hynes: Thank you.

Operator 2: Thank you. Your next question comes from Richard Harrisberg with Canaccord Genuity. Please proceed.

Operator: Thank you. Your next question comes from Richard Harrisberg with Canaccord Genuity. Please proceed.

Speaker #2: Thank you. Your next question comes from Richard Harrisburg with Canaccord Genuity. Please proceed.

Speaker #3: Hey, Anthony. Hey, Stewart. Congrats on getting through. It's been a difficult restructuring and getting the business to where it is now, and ready for growth going forward.

Richard Harrisberg: Hey, Anthony, it's Stuart. Congrats on getting through what's been a difficult restructuring and getting the business to where it is now and ready for growth going forward. Just a few questions from me. Firstly, just to comment on the pipeline. You're sitting at AUD 109 million now. I believe your previous target was AUD 125 million at June. Is that slightly below your expectations, or is the delta there just some of the wins that you've announced which obviously get taken out because that pipeline is as of today, right?

Speaker #3: Just a few questions from me. So firstly, just a comment on the pipeline. I see you're sitting at $109 million now. I believe your previous target was $125 million at June.

Speaker #3: So, is that sort of slightly below your expectations, or is the delta there just some of the wins that you've announced, which obviously get taken out because that pipeline is as of today, right?

Speaker #1: Yeah, it's more about the wins, mate. It's not like we're—I don't think we're—we're certainly not going backwards. I think the pipeline's growing, and we're converting as well as we would have hoped.

Anthony Hynes: Yeah, it's more about the wins, mate. It's not like we're certainly not going backwards. I think the pipeline's growing, and we're converting as well as we would have hoped, as I said, from pipeline to contract. Some of that's reflected in the new leaders that we've put in place in APAC and Europe.

Speaker #1: From, as I said, from contract to—sorry, from pipeline to contract. And some of that's reflected in the new leaders that we've put in place in APAC and Europe.

Speaker #3: Yeah. That's helpful clarification. Yeah. I guess just on that, so the new sales team that you've put in, obviously, that's kind of really taken place over the last 12 months and there's a lag to sort of seeing the fruits of that as they get momentum.

Richard Harrisberg: Yeah, that's helpful clarification. I guess just on that, the new sales team that you've put in, obviously that's really taken place over the last 12 months, and there's a lag to seeing the fruits of that as they get momentum. Would you say the team's now in place for what you need to do to execute? How much of a difference are you seeing in that translation to pipeline growth and conversion from them? How much of a difference are they really making?

Speaker #3: But would you say, sort of, the team's now in place for what you need to do to execute? And how much of a difference are you seeing in that translation to pipeline growth and conversion from them?

Speaker #3: How much of a difference are they really making?

Speaker #1: Look, it's relatively early days. The person we've got in APAC has been in the seat for three months, and the new European lead is still a few weeks out from starting.

Anthony Hynes: Look, it's relatively early days. The guy that we've got in APAC has been in the seat for 3 months. The new European lead is still a few weeks out from starting. Mate, look, I think we got it wrong in Europe a year ago, and we knew that. I think we've taken our time seemingly to get that right, but I'm confident we've got it right. We should expect to see some positive uplift from that. I think we're already seeing some positive uplift from our APAC hire.

Speaker #1: So, mate, look, I think we definitely got it wrong in Europe a year ago, and we knew that. I think we've taken our time, seemingly, to get that right.

Speaker #1: But I'm confident we've got it right, so we should expect to see some positive uplift from that. And I think we're already seeing some positive uplift from our APAC hire.

Speaker #3: Absolutely, that's really good to hear. And then, also on the pipeline, so the $50 million sort of close to tender completion that you referenced—that sounds really exciting.

Richard Harrisberg: Absolutely. That is really good to hear. Also on the pipeline, the AUD 50 million close to tender completion that you referenced, that sounds really exciting. How competitive are some of those opportunities? What is your confidence on and timeline of when you might be able to make some announcements over the next 6 to 12 months? Is that the right way to think about it?

Speaker #3: How competitive are some of those opportunities? What's your level of confidence on the timeline of when you might be able to make some announcements—over the next sort of six to twelve months?

Speaker #3: Is that the right way to think about it?

Speaker #1: Yeah, I think thematically it is. Yeah, there's a mix—some of that is in tender, and that's obviously competitive. And there's others that are in the contract phase.

Anthony Hynes: Yeah, I think thematically it is. There is a mix of some of that is in tender, that is obviously competitive, and there are others that are in contract phase. We feel pretty good about the next 60 days. In terms of announcements, the only thing I will flag to you is many of our significant customers don't want us making announcements about them, because they themselves operate in competitive spaces. It is a little bit of a challenge to be able to name names, for example. I feel like the methodology or the things that we have got in the pipeline and the way the guys are managing it and the better quality people that we have today is starting to show the fruits, which is really positive. I think the conversion piece I talked about is from pipeline to contract. That is important.

Speaker #1: So we feel pretty good about the next 60 days. In terms of announcements, the only thing I'd flag to you is many of our significant customers don't want us making announcements.

Speaker #1: About them, because they themselves are operating in competitive spaces. So it's a little bit of a challenge to name names, for example. But I feel like the methodology, or the people, the things that we've got in the pipeline, and the way the guys are managing it, and the better-quality people that we have today is starting to show the fruits, which is really positive.

Speaker #1: I think you'll find that the conversion piece I talked about is from pipeline to contract. That's important. Our real focus has got to be on the point from contract to implementation.

Anthony Hynes: Our real focus has got to be on the point from contact to implementation and how we solve for that. As I said, in respect of Australia in particular, there is a partner here that we can't influence, and timelines for what was challenging previously has probably gone from 3 months to 4 and is hurting us. There are other markets where we don't necessarily have that problem, and we have got activities in place to try and solve for some of those things that are otherwise outside of our control. We are continuing working with customers to ensure that, as best we can, we can plan around what they believe they can do. We have been doing that all year, but every now and then, something happens at a customer level and we can't solve for it.

Speaker #1: And how we solve for that. And as I said, with respect to Australia in particular, there's a partner here that we can't influence, and timelines for what was challenging previously have probably gone from three months to four.

Speaker #1: And it's hurting us. But there are other markets where we don't necessarily have that problem. And we've got activities in place to try and solve for some of those things that are out there, otherwise, that's out of our control.

Speaker #1: And we're continuing to work with customers to ensure that, as best we can, we can plan around what they believe they can do. I mean, we've been doing that all year, but every now and then, something happens at a customer level and we can't solve for it.

Speaker #1: So, we'll continue working with customers to ensure that we've got clarity around when and how we can implement. And we'll keep working with our partners to try to ensure a smoother execution.

Anthony Hynes: We will continue working with customers to ensure that we have got clarity around when and how we can implement. We will keep working with our partners to try and ensure a smoother execution. I think right now, the way that we feel about that AUD 50 million that we talked of, we feel pretty good. The tender piece, you never know. Generally speaking, I would say to you that we are in a much better state than we have been. Our relationships are better, our product is more stable, our offering is better, our pricing is always competitive. As I sit here today, we feel pretty good about it.

Speaker #1: But I think right now, the way that we feel about that $50 million that we talked of, we feel pretty good. The tender piece, you never know.

Speaker #1: But generally speaking, I would say that we're in a much better state than we have been. Our relationships are better, and our product is more stable.

Speaker #1: Our offering is better. Our pricing is always competitive. So, as I said, we feel pretty good about it.

Speaker #3: That's great. That really covers the growth prospects nicely. I guess on the client renewals—congrats on the renewals you've secured so far. There's obviously a lot to get through.

Richard Harrisberg: That's great. That really covers the growth prospects nicely. I guess on the client renewals, congrats on the renewals you've secured so far. There's obviously a lot to get through. Could you just comment on the size of the two that didn't renew? Obviously, you mentioned they didn't go to competitors, so that's always positive, but what were a couple of the reasons for that? Also, just on the conversations that are underway for FY27, how those are progressing. Also, if you're going to try and smooth out the lumpiness for future in terms of contract lengths, so you don't have this big renewal year happening again.

Speaker #3: Could you just comment on the size of the two that didn't renew? Obviously, you mentioned they didn't go to competitors, so that's always positive.

Speaker #3: But what were a couple of the reasons for that? And then also, just on the conversations that are underway for FY27, how those are progressing, and also if you're going to try and smooth out the lumpiness for the future in terms of contract lengths, so you don't have this big renewal year happening again.

Speaker #1: Yeah, yeah. So both of those are sort of, I think, $1 to $2 million bucks a customer. One closed the program down, and the other one has gone to a self-issuing.

Anthony Hynes: Yeah. So both of those are I think AUD 1 million to AUD 2 million a customer. One closed the program down, and the other one has gone to self-issuing, which is a prospect for a small subset of our customers, I guess. They are self-issuing here in Australia, which frankly is a whole lot easier than trying to do it elsewhere. I don't think it's a huge or a systemic threat to us. The rules in Australia around licensing are different to anywhere else that we know of or operate in, and that is that the schemes themselves are responsible for licensing as opposed to, in all of the other markets we operate in and anywhere else I can think of, the regulators are involved. So it's not a systemic threat to us.

Speaker #1: Which is a prospect for a small subset of our customers, I guess. They are self-issuing here in Australia, which, frankly, is a whole lot easier than trying to do it elsewhere.

Speaker #1: And so, I don't think it's a huge or systemic threat to us. The rules in Australia around licensing are different from anywhere else that we know of or operate in.

Speaker #1: And that is that the schemes themselves are responsible for licensing, as opposed to in all of the other markets we operate in—and anywhere else I can think of—the regulators are involved.

Speaker #1: So, it's not a systemic threat to us. And I mean, since I've been here, I think we've had one customer that's closed down an entire program.

Anthony Hynes: Since I've been here, I think we've had one customer that's closed down an entire program, and that's the one we're talking about. So again, not a systemic threat.

Speaker #1: And that's the one we're talking about. So, again, not a systemic threat.

Speaker #3: Great, thanks. Really appreciate the color. Maybe just one last one, just on the mobility product—that obviously sounds really exciting and just sort of...

Richard Harrisberg: Great. Thanks. Really appreciate the color. Maybe just one last one just on the mobility product. That obviously sounds really exciting.

Anthony Hynes: It is nice.

Speaker #1: It is nice.

Richard Harrisberg: the go-to-market strategy and when that all starts to kick off, and your client engagements. What is the opportunity? Obviously, it is a AUD 1 trillion market, but in terms of, let us say over the next five years, how big do you think this can really get, like percentage of revenue for you guys?

Speaker #3: The go-to-market strategy and when that all starts to kick off — in your clients’ engagements, what’s the opportunity? Obviously, it’s a $1 trillion market, but in terms of, let’s say, over the next five years, how big do you think this can really get as a percentage of revenue for you guys?

Anthony Hynes: Well, let me go in reverse order. My CFO is sitting here going, "Turn it down. Turn it down, Aaron. Turn it down." Let me go in reverse order. I have said this before, that I think that the business that we run today or have been running becomes a segment of our reporting. So that gives you a sense of where I think mobility takes us. What is really exciting, particularly in the last month or so, is the engagement we are having in multiple markets. I said probably 18 months ago that you shouldn't think about EML entering new markets. I recant that now and tell you that we will. What is particularly exciting about this capability is that it doesn't rely upon us necessarily being in the money flow. This is a particularly relevant product offering that is largely software driven.

Speaker #1: Well, let me go in reverse order. And my CFO is sitting here going, "Turn it down. Turn it down again. Turn it down." Let me go in reverse order.

Speaker #1: I've said this before, that I think the business we run today, or have been running, becomes a segment of our reporting. So that gives you a sense of where I think mobility takes us.

Speaker #1: What's really exciting, particularly in the last month or so, is the engagement we're having in multiple markets. I said probably eight months ago that you shouldn't think about the EML entering new markets.

Speaker #1: I recant that now and tell you that we will. What's particularly exciting about this capability is that it doesn't rely upon us necessarily being in the money flow.

Speaker #1: This is a particularly relevant product offering that is largely software-driven and solves a whole bunch of problems that occur in this industry, not just moving away from magnetic stripe cards.

Anthony Hynes: It solves for a whole bunch of problems that occur in this industry, not just moving away from magnetic stripe cards, and going to a digital capability where we go to a credit-only offering to a prepaid or debit or a credit offering, a physical, but most importantly, a digital-first offering. It is a capability that we have an integration with. To our knowledge, is unrivaled in terms of the integration with forecourt controllers and the data that is required to solve issues in this industry. But equally, the fuel card industry on its own, you could talk about for a little while and highlight the current deficiencies in it. And in that it is all closed loop, and it really only relates to fuel, so you can't necessarily understand total cost of ownership of a vehicle unless you have got probably half a dozen systems in today's world. That all changes.

Speaker #1: And going to a digital capability, where we go to sort of a credit-only offering, to a prepaid or debit or a credit offering, a physical.

Speaker #1: But most importantly, a digital-first offering. It's a capability that we have an integration with that, to our knowledge, is unrivaled in terms of the integration with four core controllers and the data that's required to solve issues in this industry.

Speaker #1: But, equally, the fuel card industry on its own—you could talk about it for a little while—and highlight the current efficiencies in it. And, in that, it's all closed loop.

Speaker #1: And it really only relates to fuel. So, you can't necessarily understand the total cost of ownership of a vehicle unless you've got probably half a dozen systems in today's world.

Speaker #1: That all changes. But equally, there's opportunity around not just solving for the data and the controls of spend, particularly in an open-loop environment—which, by that I mean, Visa or MasterCard or something similar.

Anthony Hynes: But equally, there's opportunity around not just solving for the data and the controls of spend, particularly in an open loop environment, which, by that I mean Visa or Mastercard or something similar, which typically hasn't happened before. I've talked in the past about things like customizable reporting for our customers. So think fleet managers and controls for corporate expenditure. Equally, customizable offers for our cardholders. So think drivers being able to be directed to a particular brand of service station on a particular day, given a particular discount from that vendor. There's a whole bunch of capability that we bring to bear or we'll start to bring to bear here that the industry just hasn't seen before. You're right to be excited about it, because I'm pumped.

Speaker #1: Which typically hasn't happened before. But I've talked in the past about things like customizable reporting for our customers. So, I think fleet managers and controls for corporate expenditure, equally customizable offers for our cardholders.

Speaker #1: So, I think drivers being able to be directed to a particular brand of service station on a particular day, given a particular discount from that vendor.

Speaker #1: There's a whole bunch of capability that we bring to bear, or will start to bring to bear here, that the industry just hasn't seen before.

Speaker #1: And you're right to be excited about it, because I'm pumped.

Speaker #3: Yeah, it sounds like it. Definitely love the enthusiasm. Thanks so much for taking the questions and all the color. I look forward to hearing more, and well done again on getting the business ready for an upwards trajectory.

Richard Harrisberg: Yeah, sounds like it. Definitely. Love the enthusiasm. Thanks so much for taking the questions and all the color, and look forward to hearing more. Well done again on getting the business ready for upwards trajectory. Thanks, guys.

Speaker #3: Thanks, guys.

Speaker #1: Yeah, the other thing I just wanted to pick up on, sorry, was the comment about the customer that we lost to self-issuing. Not only is it difficult outside of Australia, but I think inside Australia, it's about to become much harder under stored value changes that are coming.

Anthony Hynes: Yeah. The other thing I just wanted to pick up on, sorry, Rich, was the comment about the customer that we lost to self-issuing. Not only is it difficult outside of Australia, but I think inside Australia, it's about to become much harder under stored value changes that are coming. As I said, it's not a systemic threat, but I'm feeling increasingly confident that it's a one-off. We're not going to see much of it at all.

Speaker #1: So, as I said, it's not a systemic threat, but I'm feeling increasingly confident that it's a one-off. We're not going to see much of it at all.

Speaker #3: Yep. Good one. Understood.

Richard Harrisberg: Good one. Understood.

Speaker #2: There are no further questions at this time. I'll hand back to Mr. Hines for closing remarks.

Operator 2: There are no further questions at this time. I will now hand back to Mr. Hynes for closing remarks.

Operator: There are no further questions at this time. I will now hand back to Mr. Hynes for closing remarks.

Anthony Hynes: Well, thank you, everybody, for your time. As I said a couple of times during my script, not a fantastic year financially in terms of our results, but this company is in a much better state today than it has ever been, in my view. Certainly much better state than it has been in my time here. We have a cracking team of people, not just at the executive level, but now below them, that are executing, collaboratively working together, operating as one team, which again, did not occur until we arrived. There are, we hope, no skeletons left in any closets. We feel like we have cleaned the place up. We have got some exciting opportunities ahead of us in terms of our new product capability and our new technology, which is awesome.

Speaker #1: Well, thank you, everybody, for your time. As I said a couple of times during my script, it was not a fantastic year financially in terms of our results, but this company is in a much better state today than it's ever been, in my view.

Speaker #1: Certainly, much better state than it's been in my time here. We have a cracking team of people, not just at the executive level, but now below them, that are executing collaboratively, working together, operating as one team, which, again, didn't occur until we arrived.

Speaker #1: We hope there are no skeletons left in any closets. We feel like we've cleaned the place up, but we've got some exciting opportunities ahead of us in terms of our new product capability and our new technology, which is awesome.

Speaker #1: But some of the things that we're seeing in new verticals, which I've talked about in the past, are super exciting. And you can feel the energy and enthusiasm among our team.

Anthony Hynes: Some of the stuff that we are seeing in new verticals, which I have talked about in the past, is super exciting, and you can feel the energy and enthusiasm amongst our team. With a bit of luck, you will start to see that, A, in our results, B, in our share price, and certainly, for those of you attending over the next couple of days, you should see it in our faces and our voices as we come to meet you all over the coming days. So thank you all for your time. Look forward to seeing those of you we are going to see, and otherwise, we will talk to you in November for our AGM. Thanks, everybody.

Speaker #1: And with a bit of luck, you'll start to see that: A, in our results; B, in our share price; and certainly, for those of you attending over the next couple of days, you should see it in our faces and our voices.

Speaker #1: As we come to meet you all over the coming days, thank you all for your time. I look forward to seeing those of you we're going to see.

Speaker #1: And otherwise, we'll talk to you in November for our AGM. Thanks, everybody.

Operator 2: That does conclude our conference for today. Thank you for participating. You may now disconnect.

Anthony Hynes: That does conclude our conference for today. Thank you for participating. You may now disconnect.