Morning, everyone, thanks for, for joining us today on the Carsales FY 2023 results conference call. This morning, on the call, Will and I are gonna run you through our presentation in around 30 minutes. And we'll, we'll read the Slide numbers as we go, like we normally do. After that, we'll have Kane Hocking, Head of Investor Relations, who's here with us as well, to moderate a Q&A session on the second half of the call. With Kane, Will, and myself, we've also got here Paul Barlow, MD of carsales Australia. SB Kim is on the line. He's the CEO of Encar in Korea. Lori Stacy is also on the line.
She's CEO of Trader Interactive in the United States, and Eduardo Jurcevic in, in the office here with us in Melbourne, and he's the CEO of Webmotors in Brazil. Let's make a start on Slide 5. As you can see here, it's been a, a, a fantastic year for the business. We're very pleased with, with what our teams have, have all accomplished. We've delivered excellent financial outcomes for shareholders, as you can see, whilst making really strong progress at executing our, our strategy and our long-term priorities. We also acquired controlling stakes in, in Trader Interactive and Webmotors, which was a real milestone for the business, as as more than 50% of our revenue now comes from outside of Australia.
Just looking at the numbers and, and the, you know, pro forma results on this page are the best reflection of, of the underlying performance of the company, as they rebase our FY 2022 to, to fully include Trader Interactive and, and Webmotors. On that basis, it was great to see 18% revenue growth and 19% growth in EBITDA. Just as pleasing was the double-digit revenue and, and EBITDA growth across each of our Australian, US, Brazilian, LatAm, and Korean operations. So, in all, a, a very good year. Onto Slide 6, we've also delivered very strong operational performance over the last 12 months.
We continue to see good levels of trading activity on our vehicle marketplaces, which reflects the strength of our business model and the value that we deliver to our customers, particularly given we're operating in a higher interest rate environment at the moment. It's also a testament to our sustained investment in new product and marketing. Globally, what we're seeing is inventory levels are increasing as supply chain constraints may start to moderate, which is, you know, positively impacting customer growth and revenue. In Australia, used car prices have plateaued and have marginally declined, but, you know, they remain materially above pre-pandemic levels.
Audience activity and engagement on our non-automotive vehicle sites in the United States are materially above pre-COVID levels, reflecting strong return on investment we, we deliver to our, our dealers and private sellers there. On to Slide 7, you know, as a business, we've, we've invested in markets with significant long-term growth potential, and you're seeing us consistently realize that potential once again this year. We've, we've, we've built an incredible business in Australia over the last sort of 27 years now, and it's, it's complemented with, with what, you know, what is an enviable portfolio of international assets. We s- we see substantial growth opportunity in these large, attractive, addressable markets over many years to come.
On the right-hand side of that Slide, you can see that while we've doubled our share of TAM over the last eight years, we were still only holding around 9% share of the overall estimated opportunity that we have. We're well placed to continue to grow that over time, given the strength of our capability and the quality of our marketplace businesses that we have. Onto Slide 8, and look, we're very pleased with the progress of the Trader Interactive business since completing the 100% acquisition in September last year. We bought the remaining 51%. We're ahead of our own expectations in terms of executing on the investment thesis and delivering against the synergies that we identified as part of that transaction.
This has included the delivery of new product, good customer acquisition, and investing in tech, and, yeah, to really drive future growth for us. The strong execution of new product, combined with the excellent customer acquisition, seen our revenue growth rates actually increase in half to, to 16% on PCP. We really feel like we're only just scratching the surface still, with plenty of opportunity to grow our customer base and the penetration of premium product. In particular, we're very encouraged by the performance of Premium Select, which is driving real value for our customers in helping them showcase the inventory to potential their inventory to potential buyers. We're also beginning to see good early outcomes from deploying carsales media technology and IP as well.
We'll discuss that in a little bit more detail in the presentation further on. Onto Slide nine, yeah, whilst we've only recently transitioned to a controlling stake in Webmotors, we're, we're, we're already starting to deploy some great new product initiatives there. We launched dynamic pricing in May and, and, and have already seen a strong uplift in, in private yield similar to the experience in Australia and the U.S. and Chile. Our investment in increasing brand awareness in the regional areas that we've been talking about for some time, which are highly populated cities, is also really starting to pay dividends for us, which you can see in the graph on the left-hand side of that, of that Slide.
Our focus in early FY 2024 will be on the media business as well, which I just mentioned, where there's, you know, a significant opportunity to improve monetization through better use of our IP and product suite that we hold. On to Slide 10, yeah, this Slide captures the revenue and EBITDA performance of the business. Now, yeah, all the business that we've owned back on a pro forma basis since 2007. The message here is that the company's consistently delivered growth through all economic cycles. The business actually has a lot of countercyclical attributes. We're more geared to used vehicle, sell, buy, sell transactions.
Dealers always need to move inventory, and we offer a really good return on investment compared to other forms of advertising sources. Look, despite higher interest rates, more recently, we're seeing good growth in both our operational and financial metrics, and this gives us a lot of confidence going into FY 2024, which we'll talk about now as well. On to outlook and Slide 11, and we've got excellent momentum heading into FY 2024, which is really reflected here in our outlook statement. On a pro forma basis, we expect to deliver good growth in revenue and EBITDA on an actual basis, given the inclusion of Trader Interactive and Webmotors for a full year.
We expect to deliver very strong growth across revenue and EBITDA and strong growth in NPAT. In terms of margins, we expect to see margins improve again in FY 2024 on a pro forma basis as well. That'll probably cover that one. Now I'll hand over to Will to talk about the financial performance.
Thanks, Cam, and good morning, everyone. Carsales has delivered an excellent result again in FY 2023, generating strong revenue and earnings growth. The results outlined on Slide 13 are a testament to the ongoing strength of our business model, as well as the long-term investments we've made in our people, brands and products. The results we've delivered here show continued growth momentum and demonstrate our resilience against what's been a more complex macroeconomic backdrop. As you've heard from Cam today, we're confident in our ability to continue delivering good results, given the size of the opportunities we have in front of us and our multiple levers for growth. Moving on to Slide 14, which shows a summary of our P&L.
Look, the strong increase in revenue, EBITDA, and depreciation and amortization reflects the impact of consolidating Trader Interactive and Webmotors for the first time in FY 2023. The underlying revenue and EBITDA performance of the business is best reflected on the next Slide, which normalizes for those acquisitions. The increase in finance costs that you can see on the Slide comes from additional debt taken on to fund the TI acquisition, and also the increases in base interest rates we've seen over the last 12 months. The group's tax rate in FY 2023 was lower than last year, reflecting minimal tax payable on Trader Interactive's earnings. This is largely due to Trader Interactive utilizing tax deductions for the amortization of purchase price and tangible assets. The group delivered adjusted net profit of AUD 278 million, which was 43% higher year-on-year.
An adjusted EPS growth, which is a better representation of underlying performance of the business, as it includes the increase in shares on issue from recent capital raise. On this basis, it was pleasing to see growth of 17%. This, this strong outcome, combined with the excellent free cash flow generation that we've had this year, supported the board's decision to declare a final dividend of AUD 0.325 per share, which is up 33% from last year. As you can see down the bottom left-hand side of the Slide, the group's adjusted results differ from reported statutory results, largely due to one-off items relating to Webmotors and Trader Interactive transactions completed in the last 12 months. We provide a, a more detailed breakdown in the appendix. Turning now to Slide 15.
This Slide shows the business on a pro forma basis, which, as mentioned, consolidates Trader Interactive and Webmotors, both in the current and comparative periods. We believe this view provides the best representation of the underlying performance of the business. I won't go into any detail here on this Slide, as Cam will talk to each segment in more detail later in the presentation, but it is fantastic to see double-digit revenue growth across all regions, which really reflects the strength of our operational performance in the last 12 months. Moving on to Slide 16, we've delivered another strong margin performance in FY 2023, with EBITDA margins increasing to 52.6%.
This highlights the inherent operating leverage in our business model, our ability to deliver yield increases, and also the discipline we have in managing our cost base in what's been a more challenging inflationary environment. We're continuing to invest in new products and initiatives to drive current and future growth. From a segment perspective, if you look at Australia and the US, it's been pleasing to see margin expansion in those regions. In Asia, we've got a strong EBITDA margin of approximately 50%, and there was a small overall improvement in that margin in FY 2023. The small drag on margins from Latin America is a mix effect. Underlying margins grew in Brazil, but because the margins there are lower than the overall group margin, it's had a negative impact in this in this view.
There was also a small drag on margin from carsales investments, due to the challenges we've had with higher freight costs in our tires business. Moving on to Slide 17, we generated strong operating cash flows in FY 2023, with an EBITDA to cash flow conversion ratio of 99%. This highlights our strong working capital, capital profile and discipline in cash flow management. It's also supported the strong dividend we mentioned before, for the second half. From a funding view, we've delivered pro forma leverage of under 2 times, which is where we feel most comfortable from an ongoing leverage perspective. Finally, looking at CapEx, the business continues to invest in key products and technologies to drive our growth. As you can see, we've made some great progress over the last 12 months in terms of product development.
CapEx, as a percentage of revenue, has remained consistent over the last year. Look, thanks, and now I'll hand back to Cam to talk further about our operational performance and strategic priorities.
If we just move on to, to Slide 19. Look, before we talk about financial performance by segment, just useful to provide a bit of context around our operating environment. From a, from a traffic and lead perspective, we've seen these metrics come off COVID pandemic highs, but they still all remain nicely above pre-pandemic 2019 levels. From an inventory perspective, we've seen inventory levels rise, as mentioned earlier, across all major markets. The Trader Interactive and Webmotors are still below 2019 levels. Australia's on par pretty much, while Encar inventory is, is higher than, than pre-COVID levels.
Onto Slide 20, and, I mean, this is, this is the best financial result in our Australian business we've seen since around 2013, I reckon, and with double-digit growth in revenue and EBITDA, and we continue to invest in building an increasingly online buying and selling experience. We've extended our market leadership from both an audience and inventory point of view, reflected in the double-digit revenue growth in each of our key dealer, private, and media revenue segments. Maybe just to talk a little bit about each of those segments quickly. Dealer revenue grew by 10%, which was a good outcome overall. Demand for new and used cars is robust, and dealer margins remain elevated versus pre-pandemic levels.
Revenue growth of 10% largely came from yield uplift and increased penetration of premium product, and pleased to see depth penetration increase in H2 as inventory levels have steadily grown and dealers look to move stock on. Just looking at private there, we've, we've continued to deliver outstanding outcomes in private seller over the last 12 months, and that's reflected in the 30% revenue growth that you see here. Our, our competitive position's strengthened in the last 12 months as we continue to invest in making the selling process as efficient as possible. Key drivers of growth have been buoyant private seller ad volumes, execution of our dynamic pricing strategy, and increasing Instant Offer volumes.
Our Instant Offer selling option continues to really scale nicely, which demonstrates the benefits of continued user improvement, better pricing, adding more dealers to the platform, and developing consumer awareness through our advertising campaigns that we run. Now, media's impressive performance with good double-digit revenue growth, once again, was excellent, and this has been a real testament to the execution of that strategy that we put in place a couple of years ago to really broaden our commercial relationships with non-automotive customers and to deliver innovative, native, and programmatic products, which we'll give you a little bit more color on a little bit later.
Just looking at data research and services revenue up there slightly by 4%, which we felt was resilient effort and growth coming largely from our RedBook data business. Onto Slide 21, just looking at Trader Interactive and outstanding performance over the last 12 months with revenue and earnings up 14% and 17% on PCP, respectively, on a constant currency basis, with, you know, growth rates increasing in H2, like I mentioned earlier. EBITDA margins expanded through the benefits of continued operating leverage, with margins growing from 57% to 59%. We observed growth in all verticals, with RV and Powersports, the standouts, through growth in yield, customer penetration, in particular.
Truck segments improving nicely, reflected in improving inventory levels that we're seeing there, and consistent levels of growth in customer acquisition each month. In fact, across the business, we've added net around 300 paying dealer customers over the last 12 months, which across all of our major verticals. That's been good, and there's excellent momentum at TI heading into 2024. The business is gonna benefit from higher customer numbers, clearly, and the full year impact of recently implemented product initiatives and yield uplifts. This, this includes the benefit of dynamic pricing, growing penetration of our Premium Select depth product, dealer yield uplifts, and media product improvements that are all gonna start to come online as well.
Onto Slide 22, Webmotors has had another outstanding 12 months, with revenue growth of 29% and EBITDA growth of 31% on PCP on a pro forma basis and on a constant currency basis as well. We've increased our market share in large areas outside of São Paulo and Rio de Janeiro through acquiring new dealers, growing our audience, and adding more private sellers. Webmotors is uniquely positioned to capture market share with exceptional buyer and seller engagement metrics and a sophisticated suite of digital products that some of you will get to see at some point in September. The implementation of dynamic pricing in May also showing positive signs with good yield growth being observed since its introduction.
The results shown on the table there, as you can see, include the contribution of Webmotors adjacent market subsidiaries, being Car10 and Loop, which are both great businesses and have demonstrated really excellent growth in revenue and earnings over the last 12 months, too. Onto Slide 23. Just looking at Encar, they've delivered another excellent performance this year, with double-digit growth in revenue and EBITDA, up 11% and 12%, respectively, on a constant currency basis. You know, this was driven by the continued expansion of the guarantee inspection product, with another four sites added, and growing customer penetration within the existing branches.
Encar also continues to make strong progress on its mission to facilitate online car transactions, which is reflected in the strong growth of its Encar Home digital retailing service. Dealer direct volume improved in H2 versus H1 as the macro credit challenges that we've been talking about for a little while started to ease, and that improvement's expected to continue into FY 2024. Onto Slide 24, start with the left-hand side of that Slide there. You know, this is LATAM excluding Brazil. We've seen a much improved 12 months performance for our Chilean operations as inventory levels have increased materially from the pandemic lows. As a result, Chile's delivered outstanding revenue growth in the dealer and private segments in particular.
The other thing to say about this Slide is, after 8 years or so, we've decided to exit our unprofitable Mexican business, soloautos. The thinking here is, with COVID behind us and having acquired a controlling stake in Webmotors, we felt our efforts were better served elsewhere in Latin America. On the right-hand side there, just looking at carsales investments, and these include businesses which we consider to be standalone from our core marketplace businesses and include adjacent services. The biggest contributor to this segment is our tyres business, which saw underlying revenue grow 8% on PCP, which we thought was a solid outcome. Profitability, as we also talked about before, was more challenging due to continued elevation in freight and labor costs.
Our RedBook Inspect business demonstrated good growth in underlying inspection services and volumes, particularly in our pre-purchase and rideshare segments. So maybe let's talk a little bit about our global priorities on Slide 26. You know, we're really passionate about delivering the most frictionless buying and selling experience for our customers around the world, and we remain very alive to the competitive dynamics in each market. We're sharply focused on execution as we head into FY 2024. This focus is particularly targeted in five key areas that are articulated on that Slide, as you can see. Over the next 12 months, we've made...
Over the last 12 months, I should say, we've made excellent progress in, in each of these areas, which you know, I'll provide you some more details on in a second as we go through. onto Slide 27, just starting with market leadership, our goal here is to solidify and extend our market leadership position in all of our markets. As you can see here, we're, we're doing a good job in this area, as demonstrated by the audience lead versus our nearest competitor in each of our jurisdictions. We're well placed as the, as the network effects that we have continue to deliver the strongest possible value proposition for our, our customers and dealers going forward.
onto Slide 28, and just looking at digital transactions, and given, given our, our huge global vehicle audience and digital capabilities across the group, we're, we're very pleased with how this, this is shaping up for us, and we're well placed to facilitate the increasingly digital buying and selling experience that people are looking for. While, whilst most consumers probably aren't currently willing to complete the entire process of a car buying journey online, we're focused on providing consumers with the option to pick and choose which parts of the process they'd like to complete digitally. As you can see here, we're, we're making excellent progress in reducing the friction that we see across each step of the buying process on this digital journey in each of our key markets.
Just a, a few key highlights to call out in terms of progress over the last six months. In Australia, we launched a digital finance application process. In the U.S., we're now facilitating safe and secure payments. In Brazil, we're improving the finance integration with Santander, and we've integrated Car10, which is our repair and service marketplace business, into Webmotors. Look, I mean, overall, there's still a long way to go, but the benefits of this strategy are already paying off for us, and that's reflected in the growth we're seeing here, which is giving us the confidence to keep investing in these areas.
onto Slide 29, just looking at dynamic pricing, over the last 7 years, we've been able to evolve our pricing strategy for private sellers in Australia, from a simple fixed price model to value and location-based pricing, and this has delivered strong yield growth. more recently, we've included metro rural-based pricing to optimize volumes and yield in FY 2024. Really pleasing to see the dynamic pricing strategies being replicated in Brazil and the US, with strong early results and plenty of upsides still to be delivered there over time. onto Slide 30.
Look, I mean, as, as most of you are aware, in Australia, we modified our, our media strategy a couple of years back now, and that was to diversify more heavily into non-automotive customer segments, and introduce more innovative audience programmatic and, and native product solutions. The evolution of, of our carsales Match, and carsales ID products is, is really an extension of this more sophisticated product offering, which enables our advertising partners to, to, to better target specific audiences, as well as purchase our media products in, in a, in a much more convenient way. Both these initiatives have, have contributed to excellent growth that we're seeing in, in our Australian media business segment, and have significant potential for, for further revenue upside longer term.
We're also seeing the potential to deploy this tech that we have into, into our global markets. In Q4 of FY 2023, we deployed our carsales programmatic advertising technology into Trader Interactive, which, which has driven a significant increase in ad viewability and monetization, and we expect this will provide decent financial upside for TI into FY 2024. This programmatic advertising solution that we have, we also think has potential to scale into other markets that we've got, like, like Brazil and potentially Korea, with, with minimal additional, additional work. Just onto Slide 31, and look at future horizons.
I guess the vehicle industry we operate in, is undergoing a lot of change, as you all know, you know, including, growth in EVs, and the adoption of, of EVs, new OEM operating models, and, and increasing digitization of the buying and selling process. I think, you know, as a business, we're uniquely positioned to respond, and to benefit from many of these trends, which, you know, is the key thesis of our, our future horizon strategy, where we're constantly looking to explore new ideas and opportunities to grow. As shown on this Slide, we think, we think about 4 future horizons across 4 key pillars. The first is ensuring that we're, as a business, continually fueling internal innovation through in-house product development.
You can see things like, you know, hackathons are really important to us here. Second pillar includes us extending our audience and competitive advantage into, into new markets. A good recent example of that is the release of our caravan and camping accessories e-commerce store, and you'll see more of that, if that works well for us, into other verticals over time. The third pillar is continuing to explore M&A opportunities, where we can deploy our IP and tech into attractive new markets. Finally, the fourth pillar is about making small investments into very select early-stage businesses, to make sure that as a company, we're leveraging insights and trends from the most innovative early-stage businesses operating in our industry.
Key focuses there are around, you know, electrification, autonomous vehicles, and, and fintech at the moment. Onto Slide 32, just talk a little bit about AI. Look, I guess for us, AI isn't anything new. As you can see from this Slide, we've been investing in and, and using AI for a long time. The three pillars in our AI strategy are around enhancing our consumer experience on site, enhancing elements of trust and safety, and optimizing our, our business process. You can see a number of, you know, use cases we currently have in play amongst the, the group today on that Slide.
I guess the other thing to say is AI has become more topical recently, as we all know, given the prevalence of and, yeah, and increased adoption of large language models, there's undoubtedly a significant opportunity for, for us as a business to better utilize our, our data through AI. We see ongoing opportunity around assisted, assisted experiences for customers, like personalized conversational search, experience AI, AI-assisted content generation for new ads, and so on. Other areas that might be of further optimizing our software engineering processes to, to help developers write code faster and, and, and more accurately, or automating other manual processes that we have in the business. Look, I mean, in short, AI is helping us to build better solutions and, and improve productivity through the company.
Now onto Slide 33, I guess, as a business, we're committed to being responsible corporate citizens and taking action on Environmental, Social, and Governance issues, which is almost... you know, it's important in ensuring that, as a business, we, we maintain our ongoing success. Our teams are, are dedicating more of their, their focus to ESG issues, given the growth in our, our group's global footprint. As you can see from the Slide here, we've made some excellent progress in this space over the last 12 months. This includes the, the publishing of our first TCFD report, and implementing a subsidiary-based, board risk management framework, which will be critical in helping us manage global country risk and business performance, ongoing.
On to Slide 34, and this is the last Slide in the deck. Look, just to summarize, again, we've, we've had an excellent 12 months on all fronts. We're really looking forward to FY 2024 and the opportunities that that's gonna present to us. Some of the, some of those opportunities include, but aren't limited to, yeah, our desire to continue to, to build on our market leadership positions, building competitive advantage, and delivering long-term sustainable growth for, for shareholders. We're, we're, we're focused on removing friction points, as you hear us talking about all the time in, in buying and selling, and you can see how that continues to play out for us in the context of the earlier Slide around digital retailing.
We know we've got a great opportunity in our international markets with new products being delivered and where we're also focused on growing customer acquisition and take rates over time there. The last 12 months, you've probably more noticeably seen our IP and technology transfers within the group, which isn't anything terribly new for us, but there'll be more of that to come. Finally, the last thing to say is, you know, we're a good generator of cash, and as our EBITDA margins continue to expand over time, you'll see this continue to be a feature of the business, whilst also investing in future growth and continuing to pay attractive dividends to shareholders. I guess that's probably it, and we'll hand over to questions from there.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Eric Choi with Barrenjoey. Please go ahead.
Good morning, guys, and good result as always. I just had 3. First one on private and maybe for PB. Just wondering, could you give us a bit of a steer on the splits between volumes, price, and IO in, in FY 2023? Then in early FY 2024, is it around 11% for price so far and, and volume still up pretty strongly on a, on a weaker first half PCP base? Second one on Lori, or for Lori, sorry. It feels like that good revenue growth, in FY 2024 guidance could be delivered by price and product alone. Just thinking about the volume outlook, you know, we, we can see power sport dealer penetration's really strong, that maybe RV inventories are, are softening ever so slightly.
I'm just wondering what you're seeing so far, Laurie, and what you've assumed into FY 2024. Then the third one for SB. Just on dealer direct, just wondering if that's improving month-on-month now. I ask because dealer direct was worth 5 percentage points to revenue growth in 2022, but not much in 2023. I'm just wondering, if those headwinds reverse in FY 2024, could there be a bit of upside? Thanks very much.
Thanks, Eric. I'll start with the private in Australia. As you can see from the volumes on the site, the volumes were strong in FY 2023. Ad yield, we had double-digit growth there and a good mixture between ad yield and IO, which continues to perform well. We've started the year well. From a volume perspective, it's still strong. It's where we expected, and we expect the same as what we saw last year from a yield and from an IO perspective, just a good mix there, contributing to the overall private number. Thanks, Lori. Lori, do you wanna take that second question?
Yes. Yes, Eric. Yeah, you know, we've had really good momentum on the product initiatives that you mentioned, and we've definitely had good customer growth as well. When we look at the inventory volumes, we do actually see the RV industry appears to be near the end of a destocking cycle and actually looking to be setting up for a growth year. Overall, we should expect shipments to pick up again and, you know, start to see inventory levels grow over the next year. That said, you know, our model is not that sensitive to them, so, you know, that really isn't heavily reflected. When we do set our annual expectations, we always look at the market. We take those dynamics into consideration and ultimately wanna make sure we hit our outlook.
That's kind of how we've looked at that.
SB, do you want to take the third question from Eric?
Sure. The FY 2023, the dealer direct is, was not as good as we hoped, particularly around the beginning of this year and the end of last year, calendar year, because of the financial market crunch. If you look at the last few months, I mean, it has been improving month by month. I mean, we cannot exactly predict the future, but in the next FY 2024, we hope that it's going to be better.
Thanks, SB.
Thank you. Your next question comes from Kane Hannan with Goldman Sachs. Please go ahead.
Morning, guys. I've got 3 as well. Just dealer depth. I think you guys were calling out the improvement in that through the first half. Just interested, you talk about how the dealer depth contribution tracked in the second half, and how we think about that carrying into FY 2024. And then 2 on Webmotors. Obviously a big acceleration in the second half revenue growth, and you've called out finance dynamic pricing as tailwinds into 2024. Are there any offsets we should be thinking about from a rev perspective that, that might slow things down on the outside of just a larger base? And then specifically on the associates, I mean, they look like they did nearly 50% top-line growth. I mean, are they breakeven yet, or how far away do we think they are from being EBITDA breakeven? Cheers.
Yeah, thanks, Kane. Just on the, on the dealer depth, it did well, as we expected. We had a pretty good lift in, in the run, run rates with the, with the increase in, in inventory. We, we expect in, in FY 2024, a 1%-2% increase from a, from a whole dealer perspective. Yeah, as, as inventory keeps increasing and the market changes, we, we expect that to become more important.
Thanks, Paul, and I'll let Will take the second one.
Just on Webmotors. Obviously, we've had a fantastic FY 2023 and heading into FY 2024, you can see, the guidance is for strong growth in revenue and EBITDA. You know, no headwinds there, Kane. We're just seeing continued momentum. They've just had an interest rate drop in Brazil, which we think is gonna be helpful overall. All the things that have been driving growth around national expansion and some of the product development that we're doing, we expect to continue into FY 2024. In terms of the associates, they're not actually associates, they're consolidated subsidiaries, which is Car10 and Loop, I think you're referring to. As you, as you mentioned, they're growing very nicely, quite strongly top line, and their EBITDA performance is improving.
Now, combined, they are better than breakeven, and we expect that to have an upside into next year as well.
Perfect. Thanks, guys.
Thank you. Your next question comes from Entcho Raykovski with E&P. Please go ahead.
Morning, all. My first question is on just on the dealer segment domestically. I was wondering if you can provide us with the components of the 10% dealer revenue growth, obviously leads, yield and other. Just as part of that, on just on dealer depth as well, I think you've disclosed in your annual report that dealer depth growth accelerated to 12% in the second half, up from 7% in the first half. I appreciate you've given us sort of guidance about the dealer segment as a whole, but is that 12% indicative of the run rate for dealer depth in FY 2024, or do the comps make this more difficult to maintain? I've got a couple of others, but maybe I'll wait for the answer to that one first.
Yeah. Thanks, Entcho. From a for this year, from a revenue growth perspective, most of the growth has come from yield. The volume's been good. It's been pretty flat on PCP, most of that came from yield growth. From a depth perspective, yeah, I think that 12%, we expect to maintain that for this year with the increased inventory and the added functionality that we have put into the depth program.
Okay, great. Second question, also domestic on private. I'm conscious that private listings are now sitting at over 100,000, which is, I mean, the, I think, highest you've had ever. To what extent is this driven, in your view, by market share gains, given that Gumtree inventories are down since they started charging early this calendar year? To what extent do you think it's cyclical? I mean, you've obviously guided to further growth in private ad volumes in 2024, but just interested to how you think about the, the risks to the private volume number going forward.
Yeah, well, I think from a competitive point of view, we've, we've, we've certainly taken a lot of market share, and we, we put a lot of it down, down to that. I mean, it's also, it's also where, where the market has, has skewed since COVID, to that, to that private. You know, there's, there's a good mix between that. We're... I mean, the way we've started this year is as expected, and, and we feel pretty comfortable where, where we're at for, for this year.
Okay, great. A final one, this is probably for SB on Encar. Why the guidance for slightly lower EBITDA growth versus revenue growth? You're obviously guiding to good revenue growth, solid EBITDA growth. Is there any specific investment that's required in FY 2024 at Encar?
There's no specific investment, but I mean, overall, I mean, going forward, for us to lead our journey to the transaction model and digital retailing, we would like to enhance a bit of a investment, I mean, to strengthen our market position in the longer term.
Okay, great. nothing temporary, just more business as usual?
Yes.
That's great. Thanks a lot.
Thank you. Question, Darren Leung with Macquarie. Please go ahead.
Morning, guys. Thanks for the opportunity. Congrats on a good result. I'll just set 3 as well, please. Maybe just the first one for Laurie on Trader Interactive. Looks like you're getting some pretty good traction in terms of deploying the Australian IP, in terms of yield uplift and new products. Given where the market's sitting in terms of the RV market, how should we think about the balance between volumes as in further dealer penetration, against further yield uplift? Then maybe as an extension of that, how should we think about the longer-term margins for this business, please?
Yeah. I think as we think about, as we were talking about with the prior question, you know, in terms of the shipments in, in RV specifically, you know, it's definitely been. You know, we had a lot of units that were pushed out for 2022. Those have been straggling. They're selling them. It's been a lower sales year, but we really do feel like we are at the end of that, and those are going to start to lift up. There's a lot of uncertainty in the market, so we are conservative in our, in our estimates around, around the forecast with that. In terms of, of what, you know, what that means, but we wanna continue to grow on volume. We wanna, you know, we've had great customer gains this year.
We wanna continue to push on that, but I would say we probably weren't aggressive in our, in our model. Like I said before, we wanna make sure we hit our outlook. We are sensitive to things going on in the market and, you know, wanna make sure we take that into consideration.
Thank you. I might ask my other two in succession. Just on Brazil, that dynamic pricing piece in private, will we see the same amount of uplift that we've seen in the Australian business so far? I guess, you know, the question is, are we too conservative to assume it's only gonna be a strong revenue growth? Then the third one was just the question on Slide 23. You know, we talk about market leadership, but, you know, if we look at sort of where the audience metrics are, how should we be thinking about the amount of increased investment in, you know, Brazil and Korea in particular? Thanks.
Thanks, Darren. I might let Will tackle the one on Webmotors and then Cam, on market leadership.
I think on Webmotors, yeah, I, I think we see ongoing upside. We've only just started, Darren, in terms of deploying dynamic pricing into Webmotors. That's really just an early read on that deployment. I think we see, you know, significant upside ongoing from a private perspective. Having said that, private in Brazil is obviously a much smaller part of their overall revenue mix versus, versus Australia, but we're seeing very similar outcomes to what we've seen in other markets.
and Encar. I mean, yeah, clearly we see significant opportunities in those markets. They're, they're great markets, and, you know, there's, there's a lot of opportunity for us to, to win in those regional areas, in particular in Brazil, and in the C2B space in Korea as well. Look, I, I don't see anything out of the ordinary, yeah, over the course of the next 12 months. You know, Korea is a market that is showing signs of improvement, as SB had talked to, and we wanna make sure, sure that we're at the forefront of that. And we're, we're getting behind our dealer direct business there, but I, I don't see anything extremely out of the ordinary. It'll be ongoing investment.
Got it. Thanks, guys.
Thank you. Your next question comes from Siraj Ahmed with Citigroup. Please go ahead.
Thanks. I'll just ask 3 questions. The first one on dealer. The guidance is a bit weaker than we expected, especially when you think 1%-2% from depth. Just keen to understand how you're thinking about price and lead volumes into next year. Secondly, and also just lead volumes grew this year as well. Secondly, in terms of private, the volume guidance, is it fair to assume that the guidance assumes first half is volumes are up pretty strongly, but second half could be soft to slightly down? Thirdly, in terms of TI, the Premium Select, the 400 dealers, I mean, what would the penetration be in Australia for the Premium Select offering? Thanks.
Thanks. Thanks, Siraj . From dealer, from a dealer perspective, we, we expect this year to be good. From a price point of view, from a yield point of view, we'll, we'll see similar sort of yield to what we saw this year. Volumes, we, we expect volumes to increase on PCP with an increase in inventory. We, we feel pretty good about dealer for this year. The private volumes, volumes were strong this year, which we saw. We've started the year really well, as we expected. We probably don't expect the same level of volume, but we do expect it to be strong.
Where, where we are from a yield and from an IO perspective, we, we expect that mix to, to, to hold us in, in good stead. From a select perspective, we are-- we, we have really concentrated on, on the product side and, and the customer journey rather than trying to penetrate our, our dealer, our dealer penetration. That's, that's still, that's still a journey we're, we're, we're undertaking, but, but it's more so on the, on, on the consumer side rather than pushing volume on, on the dealer side.
Siraj , I was just gonna also add in just on your, in terms of Premium Select penetration in comparison to Australia, it's, it's probably not a great comparison because the product set is, is completely different. So I think there, there's not really a meaningful way to compare Australian penetration and US penetration on that product.
Thanks.
Thank you. Your next question comes from Lucy Huang with UBS. Please go ahead.
Good morning. Thanks, team. I've also got three questions. Just firstly, in the private division, just wonder if you can give us a sense as to where Instant Offer currently sits from a contribution perspective to private revenues? Then just two questions on TI as well. Just with the dealer subscription, I think you mentioned you've added 300 subscriptions this year. Any color you can provide on which verticals they're mainly coming from, whether it's trucks, RVs or powersports? Then also maybe just some comments on the relative performance we've seen this year across trucks, RVs and powersports? That would be great. Thank you.
Thanks, Lucy. From an Instant Offer perspective, we're not giving commentary around where the volume sits, but we are happy where it's performing, and we're really happy with the way it mixes in with our private sellers that go from trade of the Instant Offer product to private. It's performing really well.
Then, Lori, did you wanna take the second question?
Yeah. Talking about the subscription gains that we've had, I mean, we've put a very concerted effort on growing our powersports customer share as well as our truck customer share, and we're seeing good gains there. We've also grown in equipment. I mean, that's really where our focus has, has been. If you look at the relative performance, assuming you mean more industry-wide, you know, as we were saying, RV definitely had a bit of a slower year, and we hope that that's on the uptick. The other verticals are performing very, very well, and particularly the, the truck segment has really started to kick off. It was one that, that was slow to rebound after COVID and, is, is definitely strong right now.
Thank you. Thanks.
Thank you. Your next question comes from Roger Samuel with Jefferies Australia. Please go ahead.
Good morning, all. I'll stick with three questions as well. Firstly, in Australia for the dealer segment, so Cam mentioned that the used car prices have plateaued, i- right now. Just wondering, does that affect your ability to raise prices in FY 2024? We should see the yield growth mainly coming from depth. Second question is on Korea. Your penetration of guaranteed listings, y- is very high now at 46%. Do you think there's much upside from here? Maybe it's getting harder to grow the penetration from this point onwards. Last one on your tax rate. Obviously, you've got a benefit from TI in this result, but just wondering if you can give us the guidance for your tax rate in FY 2024. Thanks.
Thanks, thanks, Roger. On the, on the dealer, yeah, used car prices have plateaued a little, but where they're-- I mean, we've, we've we're still seeing dealers doing, doing very well. From a, from a price price rise perspective, we feel we've, we've, we've got some room to move there. We're always focused on, on the value that we deliver the dealers, so that's, that's at the front of our mind there. You know, we, we, we expect our, our yield increases to be, to be similar or, or a little bit less than where, where we were last year.
SB, did you want to take the second question? Oh, we might have lost SB. I might take, let Will take that question.
No worries. Just in terms of... You there, SB? Yeah, you far away.
I was on mute. Sorry. Do I, do I wanna go first, or, Will, do you wanna go first?
no, you go, SB.
Okay, sure. Sorry about that. I was on mute. I mean, 46% penetration of the guarantee, we do still believe that there's a room to grow farther. Of course, there is a couple of efforts that we have to do. First one is we need to, varietize, I mean, our branch format, to go to the farther penetration above the 50%, but at the same time, in order to improve the yield of the existing branches, of the guarantee. I mean, we do still believe that there is room to grow farther.
Will, on the tax rate?
Yeah. Just on tax rate, Roger, you're right. We've, you know, obviously, our tax rate overall is, is much lower than where it has been due to the upside we get from Trader Interactive. Into next year, we expect a similar tax rate as a percentage of profit before tax, because we're gonna continue to see upside from a Trader Interactive perspective.
Thank you. Your next question comes from Subhash Singh with Bank of America Securities. Please go ahead.
Hi there. Three questions from my side. One, on the Australian business, could you provide some commentary on the changes in time to sell in the second half of fiscal year 2023 versus first half on the private side? Then two questions on the US TI from Lori. One, given, given the low level of inventory in RVs, have you seen any of the dealers downgrading their subscription tiers in FY 2023? How is the conversation flowing into the next year? Second, on the powersports motorbike segment in the US, can you talk about the competitive dynamics with Harley-Davidson's HD1 Marketplace? They have ramped up to 30,000 bikes on the marketplace and targeting Harley-Davidson dealers. How are you seeing that bit of competition? Thanks.
That was the time, time to sell, wasn't it, in private. Yeah, we've, we've seen from, from the first half to the second half, a slight increase in the time to sell from a private inventory, which leads to a little less churn and a higher inventory count, which you can see on the site. Just a slight increase in time to sell.
Lori, did you wanna take the two questions?
Yes. In terms of the low inventory in RV, I mean, like we've talked about, we really don't we're not heavily impacted by the inventory levels. I mean, it in COVID, it was very extreme in terms of inventory gaps, but in this kind of dynamic, it's just not very impactful to our subscription model. It hasn't been, been huge. I think we're seeing the opposite in some of the other industries, that they have rebounded from COVID, like truck. We're able to get more new customers, but we're not losing the customers on the RV side. We're, we are handling that quite well.
In terms of the HD, the Harley-Davidson site, I mean, we definitely watch them. They're an OEM partner. We work with them very, very well in a lot of ways. From a dealer perspective, though, it is an option to sell their inventory, but what we're hearing is it's fairly low lead volume coming from them. It's not their only exclusive option. They're promoting it as part of their OEM relationship, and they're pushing their inventory over. But I think it's more not attracting the consumers at this stage. I think that's, you know, we're watching them, but I wouldn't really say we're viewing them competitively at that same level right now.
Understood. Thank you.
Thanks, Lori. We might have time for one more call, please, operator.
Thank you. Your final comes from Wei Weng Chen with RBC Capital Markets. Please go ahead.
Hi, guys. Yeah, just a couple of questions from me. First one, on the Mexican business. Just wondering whether that was a sale process or you were just gonna wind that business up? Just on tires, I guess, you know, in light of your recent write-down, tires was, and, and I guess still is a pretty large TAM opportunity. How are you thinking about this segment of the market in, in the near and longer term? Yeah, I'll leave it there. Okay.
Thanks, Wei. Cam, I'll let you take those.
Yeah, thanks. Great questions. Look, just with, with Mexico, I, I guess, you know, we've been in Mexico for eight years. It, it burned a hole in our pocket for eight years. With the acquisition of the additional 40% Webmotors, you know, the view was taken with, you know, there are other things that we wanna spend our time and, and effort on, and we decided to, to close it. Whether we can sell it or not, it's a different story, that's where things are at there at the moment. Then with, with tires, we still believe in the, in the tires business. It's a great way to keep consumers engaged outside of the buy and sell cycle. It's an AUD 5 billion industry. It's worth, it's worth ongoing investment in.
Yeah, I, I think we, we just took the, the position that given where things had been at recently, that it was, yeah, conservative to, to take that impairment there. We still, we still believe in, in the tires industry.
Cool, thanks.
I guess that's, that's it, guys. Thank you for joining the call this morning. We look forward to catching you all during the course of the next couple of days. Thanks, operator.