The Eastern pany(US:EML)2025-08-27 00:00Financial Data and Key Metrics Changes - Revenue for FY 2025 increased by 9% to $220.9 million, with customer revenue (excluding slight interest income) up 3% to $157 million [7][16] - Underlying EBITDA rose by 13% to $58.6 million, at the upper end of the guidance range of $54 million to $60 million [16][19] - Statutory loss after tax for continuing operations was $53 million, impacted by nonrecurring items including a class action settlement [7][19] - Cash balance improved by 46% year-on-year to $59.3 million, reflecting strong operating cash flows [7][19] Business Line Data and Key Metrics Changes - The European segment, the largest, saw total revenue increase by 18% to $128.6 million, driven by a 6% uplift in customer revenue and a 40% increase in interest revenue [20][21] - Asia Pacific segment achieved a modest customer revenue growth of 2%, with existing customer revenue growth at 5% [23][24] - North American segment experienced a 3% decline in total revenue, attributed to lower breakage and soft incentive product performance [26][27] Market Data and Key Metrics Changes - Gross Debit Volume (GDV) in Europe increased by 7% to $6.1 billion, reflecting a return to growth post-restrictions [20][21] - GDV in the Asia Pacific segment decreased by 7%, influenced by a change in customer and product mix [24] - North American GDV grew by 10%, primarily due to increased volume for Vans products [28] Company Strategy and Development Direction - The company is focused on the AML 2.0 transformation strategy, aiming for sustainable double-digit growth over the long term [3][8] - Key initiatives include rebuilding the leadership team, enhancing customer relationships, and expanding the commercial team [4][9] - Project Arlo aims to deliver a single global platform to streamline operations and improve service delivery [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformation agenda and the ability to drive growth despite challenges [14][39] - The outlook for FY 2026 anticipates underlying EBITDA in the range of $58 million to $63 million, factoring in new business and historical client terminations [40][41] - The company expects to grow its pipeline to over $90 million by December 2025, with a focus on improving conversion dynamics [41][45] Other Important Information - The company has settled the Shine class action provisionally, with court presentation expected in October [6] - A yield lock program has been structured with Citigroup to provide income certainty through a forecast down cycle, covering approximately 45% of floating interest income [5][19] Q&A Session Summary Question: Thoughts on demand from different regions heading into FY 2026 - Management noted seasonality impacts in Australia and consistent growth in government programs in Europe, with new client additions contributing to GDV [47][48] Question: Factors affecting guidance range for underlying EBITDA - Key factors include winning clients from the pipeline and the speed of onboarding, alongside flat overhead costs [50][52] Question: Market growth rates in main verticals - The markets are expected to grow at CAGRs of 10% to 12%, with the company aiming to match this growth over the next few years [56][57] Question: Clarification on top line growth and revenue translation - Management indicated that the growth trajectory is based on financial years, with a better sense of conversion dynamics expected by the end of the year [81][83] Question: Exclusion of Project Arlo costs from underlying EBITDA - Project Arlo costs are excluded due to being a significant one-time investment aimed at transforming existing platforms [86][87]