Welcome to the COG Financial Services Limited FY '26 Financial Results Webinar. My name is David Franks.

I'm the Company Secretary of COG. Before I hand over to Andrew Bennetts, the CEO of COG, and to Richard Bowser, the CFO of COG, just a few housekeeping matters.

As this is a webinar where Andrew and Richard are going to be doing a presentation along with Frank. Um, but we are taking questions, written questions.

Questions can be submitted at any time. To ask a question, press on the Q&A icon on your screen.

This will open up a new screen. At the bottom of that screen, there is a section for you to type your question.

Once you are finished typing, please hit enter on the keyboard to send the question through. Please note that while you can submit questions from now on, we will address them at the relevant time in the presentation.

Please also note that your questions may be moderated. If we receive multiple questions on a similar topic, they'll be amalgamated together.

If, for any reason, we run out of time today, we'll happily answer those questions via email or posting responses on our website. We will do our best to answer all the relevant questions raised, noting that we need to adhere to our ASX obligations as an ASX-listed company in respect to continuous disclosure.

I now like to welcome and hand over to Andrew and Richard for their presentation. Frank will be joining us at different points in the presentation, as well.

Andrew.

Thank you, David. I'm Andrew Bennetts, Group CEO for COG.

Uh on my left, I've got Richard Bowser, the Group CFO. Frank Agostino, who's the head of uh CEO of Paywise, our salary packaging business, will also be presenting a few of the slides today.

To to quote a former politician, at one time Treasurer and subsequently Prime Minister, Paul Keating, these are a beautiful set of numbers. All the key metrics are up on last year.

Revenue up 9%. EBITDA to shareholders up 28%.

Final dividend, $0.035 per share, taking the total for the year to seven um uh cents per share. Earnings uh per share before amortization, $0.1563, up 27% on the prior year.

Overall, it's an exceptionally good result and reflects the unrelenting work and dedication of the people of COG. It's a team effort.

This re- reflects the successful execution of our strategy over the last 12 months. Or, in other words, we've done what we said we were going to do, and we will continue to do so.

What's driving it? Um the group net net assets financed through salary packaging and broking and aggregation is up 8%.

Net assets financed is the aggregate of all the trucks, cars, bulldozers, excavators, novated leasing on motor vehicles that we've done through the period. Um Underlying group revenue, up 9%, and underlying group EBITDA up 28%.

Turning to the bottom left, salary packaging is the biggest contributor here. Um lease settlements up 66%.

That's the number of motor vehicles, the number of units that we've um put through novated lease through our um platform this year. Now, part of that is fueled um by that 60% 66% growth is fueled by um our acquisition partway through the period of ezifleet.

A majority or the majority of that is through organic growth, which is an amazing result. That um our ability to deliver this result is a function of the significant investment in technology and people that we've made over the preceding years.

We now have our own state-of-the-art proprietary software systems, which stands us apart from our competitors. On the other side of the page, our broking and aggregation net assets finance was up 5% compared to the prior period.

Um Broking and aggregation has a number of component parts. We have peer-to-peer lending.

We have broking services where we provide services to other brokers, and where we have aggregation, which is where the name suggests, we aggregate businesses from a number of brokers to get better cost funding costs. Think of it like a buying group.

Finally, we have our actual brokers, people who own client relationships and source finance or insurance for their customers. In the asset finance component, we had $8.5 billion of flow through the platform, which is up 5% on the prior period.

Strong underlying EBITDA to shareholders. This slide sets out the segment results.

You can see uh salary packaging up um 88%, which, again, um has three components: true organic growth, the acquisition of the ezifleet business, and then last later in last calendar year, where COG increased its ownership share of um Paywise, which is our salary packaging business. Broking and aggregation was flat.

Lending, which is a minor part of our business, was down uh off the back of some prudential uh prudent um loss reserve provisioning that we took. The other component you can see is down uh quite materially.

What used to sit in that segment was our interests in two listed entities, uh Centrepoint Alliance and Earlypay, which we sold during the period, those profits have dropped out of that segment. Um The chart on the left, the key one to focus on the last three years is a 13% um compounding average growth rate.

Um 28% in the last year, uh given where the business is. We've achieved that over the last three years, and we don't have any expectation that it's going to change in the future.

Um Then on the right-hand side, the two charts uh the EBITDA contributions of the various segments. The thing to call out there is the obviously significant jump in the contribution from novated.

Uh last year in the FY '25 year, it was 41%. Uh this year, it's 60%, reflecting that the the strong organic growth and the acquisition of ezifleet.

Um Next slide here. Uh we've had strong growth in earnings before share uh earnings per share before amortization.

Uh as I said, $0.035 per share, fully franked dividend, um to be paid for this half, taking the total for the full year at 7%. That gives us a payout ratio there you can see of um 45.5%.

If if you those of you are existing shareholders, we made a couple of acquisitions in the last period. We used $12 million of surplus balance sheet cash.

Um so, uh we're just not paying out all our profits as dividend because we're building up cash reserves on in the business for future M&A activities. Um The um turning to uh my favorite slide in the deck.

Um that's all good. What's been before us, but that's all in the past.

It's what's coming in the future. Um We're targeting better than 10% uh EBITDA growth in the coming year.

Given what we've achieved in the last couple of years, that's a very reasonable claim to make. Um We've um If we turn to what's going to drive that, firstly salary packaging.

There is abundant organic and acquired growth opportunities in front of us. Over time, average vehicle prices will continue to decline with the greatest greater penetration of Chinese electric vehicles.

Um this as vehicle prices decline, this will obviously generate more demand. It's going to become a volume game.

We expect to see a doubling of our addressable market over the near term. As at December '25, there were 22.5 million registered motor vehicles and light vehicles in Australia.

Of these, 257,000 are electric. We are only at the start of this electric vehicle journey.

Higher volumes will be at lower per-unit profit. The future environment is all about efficiency.

We have proven that we can successfully compete against our larger competitors, and we're confident that this will continue. We to continue to invest heavily in technology and processes to make our sales, delivery, and funding of novated leases and ongoing member management as as efficient as possible.

In addition, we continue to consume to pursue more acquisition opportunities on the assumption that they're accretive to COG's shareholders. Which brings me to capital management.

The point to call out here is that we worked to a 1:1 debt ratio, debt equals to EBITDA at a maximum. If EBITDA is roughly $70 million on a 100% basis, including minority interests in our minorities, we can borrow a maximum of $70 million.

On this basis, as we sit here today, COG could borrow circa an extra $40 million. Together with surplus cash, we have we have future acquisition firepower of circa $50 million.

In broking and aggregation, we continue to invest in technology to improve productivity of our brokers. This reduces churn and attracts new brokers.

I'll now kick ask Richard to talk through the financials in detail.

Thanks very much, uh Andrew. Um look taking the chance to explore a bit further on uh on some of the points Andrew's already touched on, but uh we had good revenue momentum at the top of the P&L, clearly the fuel for the underlying business, and that that strength has then played down the P&L.

Um It was positive to see that that came both from a uh an organic perspective as well as the acquisitive pieces that we had undertaken during the year. The second thing I'd call out on this slide is just in relation to the EBITDA margin improvement.

There's uh there's certainly a mix benefit for us given the growth in the novated business at slightly better margins. Um but we're continuing and continuing to work with Frank and his team on uh improving that and investing for the future as we go, while also scaling for today.

Um In addition, the other call-out I'd like to make is just the shape of the EBITDA number and growth at 100% at 14% down to the EBITDA to shareholders, obviously at uh at 28% as we've discussed. That effectively is primarily driven by the buyout that a lot of you'll be aware of in September last year, which involved the equity raise of um uh a minority in the novated leasing business, thus driving that shape.

Um Finally, in in relation to this slide, I think we take away the fact that down through the rest of the P&L, we've also continued to achieve strong results right through the bottom line. Um Look, a different way of looking at the EBITDA here, uh I think the three things that I'd call out, I'd go to the biggest one in the center straight off.

We've we've had acquisitive and acquisition growth of minorities basically in the novated business, as well as the strong contributions from our AAA Finance business within the broking space that we've now lapped the acquisition of that on. Um Secondly, Andrew's already touched on the uh the sale of noncore assets back in May 2025, which is to the far right there, that $3 million effectively being recycled into other investments that have driven a lot of the $10.5 million you see there.

Then in addition, just reinforcing the fact that underlying to the business activity, there is organic growth going on outside those activities, which we as as we've called out, continue to expect to continue over time. Um We've just uh provided here a bit of an insight into the cash generation in the business uh through EBITDA.

Some visibility to our leasing costs, obviously, and then a range of items that are fairly typical for a business such as ours: tax paid, uh into rent paid, and so on. You'll note also the fact that the associates' investments that we had in EPY and CAF in the prior year generated revenue, but didn't convert to cash.

That cash being used to, as Andrew's already mentioned, fund the dividend. We've invested this year into acquisitions.

We continue to build a war chest for future deferred payments and acquisitions that we have upcoming.

Okay.

Yep. Um so this uh final slide, I just uh dwell here uh just to call out the fact that we've had very strong performance, as we've already heard, out of our novated business.

Uh the way I'd think of that growth aspect is is there's effectively 30% of that growth underlying is organic, there's the benefit of the ezifleet acquisition, and then there's the buyout of the minorities taking us from there, the 30 underlying organically up to the 88, which is good, strong performance. Um The shape of this slide uh is very consistent with the shape you saw at the half year with the resegmentation in relation to broking and aggregation, and the movements between lending, continuing to call that out to provide disclosures.

All comparatives have been restated, as you can see, to provide comparability year on year. Um and we continue to uh show the long-term uh incentives now outside the underlying performance, having made that adjustment also reflected in our half year.

Um Thanks very much, Andrew.

Frank, over to you.

Thank you, Andrew. Richard's taking you through the broader financial result.

For salary packaging, it was a a very strong year, as you can see on the screen. Uh Revenue up 51%, uh EBITDA EBITDA up uh 55%, and and margin improved as well.

The important uh the important point for me, though, is the quality of that growth. Uh As Richard mentioned, uh $15 million from uh came from uh the existing business and 14.6 came from the acquisition.

Organic EBITDA growth was at uh 32%. Ezifleet has added to the scale, but the underlying business is growing strongly in its own right.

That hasn't happened overnight. It's it's been We've been building foundations over a number of years: uh service, people, uh process, systems, and brand.

We're now starting to see the benefit of that work in the quality and the size of the uh the opportunities we've been considered for. At the same time, we're continuing to invest in that technology, uh the data, the automation, and the AI.

The the objective is is pretty simple: uh improve the customer experience and and volume, and allow the volume to grow faster than our cost base. Uh I might get you to flick over to the next slide, Andrew.

This slide gives you a sense of the scale uh behind that growth. Salary packaging customers up 31%.

Uh Novated leasing cost customers almost doubled. Uh settlements up 66%.

Uh The obvious question is whether that can continue. What gives us confidence is that some of that uh some of the significant government and corporate clients that we've won 12 to 18 months ago uh are only now starting to mature.

Winning the employer is the very start. It takes time to build awareness and trust with the employees and then take-up grows.

Some of the growth that you're seeing today is actually the result of contracts we've won well before this financial year. We've had some, lots of recent wins sitting behind those, and we continue to compete for for new opportunities.

Uh we win the employer once, but the take-up across the employee base can continue growing for years. Um So, I suppose that the four things I'd like you to take away If I step step away from the individual numbers, this there's four things that I'd like you to take away from from these two slides is: we remain very positive about the industry and the runway ahead.

There's still significant opportunities in in salary packaging and novated leasing. Uh We believe that the market remains structurally attractive.

We've built The second point is, we've built the foundations to compete at a much larger scale. The growth you're seeing today is is several years of investment in our people, our processes, our our systems, uh service capability, and brand.

It just hasn't happened overnight. Uh The third point is that we're taking market share in two ways.

We're winning more employers, but we're also taking increasing our take-up across the employee bases we've already we we already service uh as those relationships mature. The fourth point is is that we believe we can scale the model better from here uh whether that be better tendering, uh more sophisticated marketing, uh better use of our data, modern technology, uh automation, and AI.

The objective is to grow volume faster than we can grow cost. Uh Thanks, Andrew and Richard.

Thanks, Frank. Sweet.

Um okay. That's uh salary packaging.

I'll turn back now to broking and aggregation. Uh Previously, I said that the the net asset finance was up 8% through our platform, so that's the value to to um 8.5 bill.

That's the value of, again, all the trucks, tractors, excavators, bulldozers, scissor lifts, light commercial vans that we financed through our platform. Um But the revenue was up 3%, there's a bit of a that that our retention of it is is not um linear.

The other part to to note here is that, even though we end up at a um at effectively um EBITDA to shareholders flat, the question I frequently get is, well, why is that? The aggregation component of the business has done well, but uh peer-to-peer lender that we had was soft during the period, uh reflecting just uh slower activity in that segment.

That sort of cancels out that benefit and leaves us flat. Um So, we've provided here a little bit more detail in terms of on this slide in terms of um looking below the hood, so as to speak, on the broking and aggregation businesses.

The way we think about it is we break it up into sort of two broad, overarching categories. On the left-hand side, we talk about financial intermediaries.

This is um aggregation, um our peer-to-peer lending business, Equity-One, and Mildura um Finance, which is our broking services. The the the difference there is that um uh they're service providers to different players in the group rather than actually being brokers themselves.

On the right-hand side, you can see we list the actual um the retail brands that we have that people deal with um uh across asset finance, which is QPF Group, Linx, AAA Finance, Centrepoint Finance. Um And we also undertake uh insurance broking underneath those uh within those brands as well.

At the bottom there, you can see the relative uh EBITDA contribution of of of those groups. The financial intermediaries is 43% uh with the balance um made up of insurance broking and asset finance broking.

Lending, um uh steady state, um steady state business. Obviously, slightly backwards uh on last year as a result of um some increased uh provisioning for credit losses.

Um Strong uh managed investment growth. Um You can see here in the the top right-hand corner here, the tables the key part of it.

Um You can see the um the growth in the uh investments in the Westlawn managed investment scheme to 125-odd million, up from $61 million. Part of that is is a movement from the Westlawn balance sheet uh into the off-balance sheet vehicle.

Um Uh that accounts for some of that increase, but there's real, true organic growth in the MIS, which is pleasing to see. Um The other segment, which is a collection of head office costs, board costs, registry costs, audit costs, all that's um admin sits in here.

Again, the $2.6 million movement compared to last year is because, in preceding years, we had the minority interests in Centrepoint Alliance and Earlypay sitting there, and those profits were equity accounted into this segment. Um Uh as Richard said, those in- interests have been sold, and we've recycled the capital into our increased investments in or our acquisition of ezifleet and our increase in our stake in uh the Paywise salary packaging business.

Um This is sort of a conclusion slide. This is really um a repeat of the slide earlier that I put up.

Um We expect EBITDA growth of over 10% over the next 12 months. We have strong tailwinds in salary packaging with the con- continued government incentives for electric vehicles financed via novated lease.

This, coupled with the declining uh car prices, will see significant growth in our addressable market. We continue to investigate invest in our aggregation platform to solidify our position as the leading broker uh aggregator and broker, and it attracts um it stops churn of existing brokers and attracts new brokers.

Um And finally, our balance sheet is lowly geared, and we have plenty of debt cap- capacity with surplus cash to continue our acquisition pathway. In conclusion, the future looks bright, and we will continue to strive to deliver on the into opportunities in front of us.

That's the end of the formal presentation. Are there any questions?

Uh

thanks, Andrew. Um yeah, we do have some questions.

Um I'll sort of break them um there's sort of two topics: one's around share price and um market capitalization, one's around more operational issues. I'll do the the operational ones uh first.

Um Questions from uh from Ian Munro at Ords. Um "How have the broker margins trended throughout the second half in the FB&A segment?

Have the margins rebased for the higher rate environment?" Uh

I think the question is have we seen margin compression in the face of of of um Look, I think we've probably seen a tiny little bit, but not not material. Like it's it's the activity is um uh uh robust, um and margins are are broadly broadly holding.

The And

within the novated leasing segment, are there any larger contract wins that are yet to contribute to volumes?

Uh I'll let Frank answer that, but we we um we won contracts during last year, but it it takes a while for them to filter through. We're always pitching and winning new in the hopper to win new contracts.

Frank, I'll I'll let you answer that one in more detail.

It's It's a very competitive industry. What I'm noticing now is Paywise is certainly being uh certainly in the conversation when a when a tender comes.

Rather than and when I said in my uh in in my presentation that uh a number of years ago, uh we had really had to bang down doors to get a seat at the table. Now we're we're being asked uh to tender for things that we would never have had uh 3 or 4 years ago.

That's come come about because of the way that we've managed our our big contracts. We've got access now uh in in our portfolio: WA government, Northern Territory government, Queensland government, uh ACT government, and Tasmanian government.

Some really reputable uh state government contracts that give us a lot of weight and um capability to bring some of those those other uh state government departments and and larger corporates on as well. Uh answer to your question is that these do take time uh to to materialize, but um we're constantly, more so now than ever, in the conversation when these tenders do arrive.

Frank, do you want to talk around our experience in WA gov?

I can do. Without uh giving away too much um IP, the the our our brand promise is a is a really simple one.

It's it's highly personalized service and care in the fastest response times imaginable. What we've noticed in our industry is that there are some gaps into the way uh what we call members uh um are serviced.

Uh our whole model is uh is is around that brand promise. Everyone from myself down um throughout the whole organization, when we're dealing with our membership, treat them highly personalized service and care in the fastest response times imaginable.

When we go out, we've got a model where it's it's very personalized, and people go out to our account managers go out to um site. WA government, when we first uh bought Paywise, when COG bought Paywise, was about uh circa and circa 20% market share.

It's now uh within uh some agencies up around 70. We do share um share the panel in in Western Australia, for example, across uh two or three other providers.

What we know is that that uh that that recipe works. What we've started to do, and when I speak about laying the foundations over the last 2 to 3 years, it's exactly what we're doing in the other states, and that's why we're getting the traction we're getting, and that's why you're seeing the results you're seeing.

It obviously doesn't happen overnight. It's been a long journey, but we're in a really fortunate position because we are, no um disrespect to the um to the other providers, but we have learned from some of those the mistakes that they've made, and we're able to capitalize in a world where technology is much easier to build build.

Uh we have come from a low base. Coming from a low base, the trajectory uh ha- has been quite fast.

More importantly, the people within the business uh uh are having a lot of fun doing it.

Thanks, Frank. Um A final question from Ian was, "In relation to the targeted 10% uh EBITDA um a target or better than um for FY '27, does that include contributions yet to be from announced acquisitions, or is this purely organic?"

Uh that's just organic on the roll-on. Acquisitions will add to it.

Thank you. Um "In respect to uh once again salary packaging, was the market growth for salary packaging What was the market growth for salary salary packaging, and what was your organic sales growth for this segment?"

I think they're trying to um ask

I think they're saying we took if you take ezifleet ezifleet out of it, the acquired growth of ezifleet out of it. Um I'll throw that to Richard.

Sure. If you if you look at it from a units perspective, we've disclosed the number of units there.

Basically, if you took ezifleet acquisition out of the units year on year, uh we'd be basically plus uh plus 30% in units underlying for the Paywise business organically. Um So, uh that that's the underlying growth relative to the total growth you see there.

Got a question in relation to to the financials. "Are we through financial restatements?

Will prior-year comparatives be the same in the future years?" Uh

yeah, I can take that one, Dave. Uh yeah, uh we we obviously went through more broadly a uh a change uh at a board level uh this uh this sort of time or or April last year.

Uh The board reviewed the straight shape of the business model. We then applied a number of segment changes.

They were first uh disclosed to the market in uh February last year on a half year, and we've continued to replicate that same segment disclosure. Um At this point in time, there's no intent that that segment uh disclosure will will shift again in the future.

Um We'll obviously keep people informed were that to occur.

I think we've already touched on this a little bit, but can we talk about the earning drivers for FB&A into FY '27? Uh

the earning drivers. It's it's um it's really the the economic activity in the broader economy.

Our business is is leveraged to uh infrastructure, construction, housing construction. A big one where we're doing a lot of work is is in um energy transition, building, uh power lines, solar farms, wind farms, all that sort of stuff that that construction flows through to um uh subcontractors and SMEs.

Um That remains uh robust and and growing, and that's what is fuels our growth into the future.

Yeah.

I think just taking the chance to build on what Andrew's said, obviously he mentioned this year that there were um the peer-to-peer lending business that sits in that segment was uh a little softer than we'd hoped for. We expect that to return uh to a stronger level of growth in future periods, as well, just building outside the direct broking piece.

Are there any options being investigated to run off asset management quicker, or will it just be a slow rundown? Um

Well, I think the the the the question there is on the on the that the Westlawn balance sheet, on on assets and liabilities, are on the balance sheet. It's it's been I mean it peaked 2, 3 years ago at $220 million, it's down to 170.

I think it's just going to trend down slowly over the next couple of years. Uh question

a couple of questions around share price, market capitalization. Um First one is, "Given the corporate activity for FleetPartners, what is COG's novated and salary packaging worth using comparable multiples?

Would it be correct to say that this part of the business is worth more than the existing market capitalization?" Um

Well, hmm the only the only pure-play novated business that's listed out there is is obviously Smartgroup. Uh It's an ASX 200 company.

I think last year it made circa $100 to December, had made 140-odd million of EBITDA. Its market cap is 1.7, 1.8, somewhere there, it's trading at whatever that is, 11 or 12 times EBITDA.

I don't think a business our size would trade at that sort of multiple, but I think a 10 times EBITDA would be would be a feasible number. Um We've off last year's EBITDA of 31, add in full-year contribution from ezifleet, we probably get close to 32.

Multiply that by 10, you're getting to sort of $320 million, if you were to value it that basis, which is basically our market cap. I would agree with that proposition, basically.

I would I would argue strongly that we're massively undervalued.

Thanks, Andrew. Um "Why has the share price suffered over the last 12 months whilst we have seen the business, as shown today, growing nicely?"

Oh, um I

I think um if you look at the register, um we've got a number of really high-quality um institutions that own um, if you look at the substantial shareholder notices, there's there's was it six investors that own 50% of the register? Um uh So, given where we sit in the in the ASX, we're not we don't have a lot It's a liquidity issue, I think.

Uh we went as high at one point, $2.20 or $2.30. At that point, there were a few more buyers than there were sellers, lack of liquidity helped us.

Then when things spin around and there's more um sellers than buyers, the lack of liquidity hurts us. The underlying business is growing, the underlying business is good.

Um It's It's more around just the where we sit in the ASX and and temporary excess or lack of liquidity.

Thanks, Andrew. Um so that's the questions that have come through um from from our audience.

Um maybe we'll just leave it for another 30 seconds to see if anybody has any final questions, but I think we're uh nearing the end. If anybody's got any final questions, if they could enter it into the system, and and we'll try to address those for you.

We'll just give you 30 seconds or a minute to see if anything final comes through. Uh "Who would be the most synergistic competitor to combine your salary packaging business with?"

Oh. That's a hard one.

Um I'm I'm probably going to duck this one and throw it to Frank.

Um Thank you. What There's There's two big players.

There's two big players, and we know who they are. Um We We see ourselves uh um a little while off them, but on the right path.

Um And everything that we're doing in in our business is to grow for scale. If the some of the contracts that are coming up uh for tender over the next 2 years or year and a half, um they're the ones that we're setting ourselves for, which are some of the the two bigger players have got access to.

We're somewhere I would think that we're somewhere in the top five. How high in the top five we are, I'm not sure.

Who you can compare us to um look, I'm I'm not sure of that either, to be honest. Um I don't think you can compare the way we do it um with with others.

Um Yeah, from a from an earnings, Andrew and and and Richard, I'm not sure if you guys have a better answer than what I do, but from a pure where we sit in the market now and where we want to be, um that's probably the best answer I could give.

Thanks, Frank. We don't have any more questions coming through.

Andrew, maybe any final comments, and we'll close the webinar after that. Um

no. Thanks everyone for uh for participating.

Um Just to conclude, it's been a great year. Uh I want to thank uh the Frank and his team, Richard and his team, and everybody else in the business.

Um Uh The the tailwinds that are behind us will continue, and we're we're expecting another good year in front of us. Thank you everyone.

Thanks, Andrew. Thanks, Richard.

Thanks, Frank. Thanks, everyone, for participating today.

Um We'll now close the webinar. Thank you.