Enero Group Limited · ASX:EGG
Enero — Photon Group — FY2009 Earnings Presentation
41 slides from Enero's earnings presentation, Aug 17, 2009
Slide 1: ASX/Media Release: Photon announces FY2009 net revenue growth of 17%
17 August 2009 ASX/MEDIA RELEASE PHOTON ANNOUNCES FY2009 NET REVENUE GROWTH OF 17% AND EBITDA GROWTH OF 14% Photon Group Limited (ASX:PGA), Australia's leading marketing services and communications group today announced a record full year result, highlights of which include: • Strong performance in
Slide 2: Media release continued: outlook and equity raising announcement
exposure to the fastest growing market sectors, we are cautiously optimistic that 2010 will be another record year in terms of revenue and earnings”. Chief Executive Officer, Mr Matthew Bailey said “We have delivered strong organic growth in the financial year 2009. We made a number of acquisitions
Slide 3: FY 2009 Results Presentation and Equity Raising
FY 2009 Results Presentation and Equity Raising 17 August 2009 NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES OR TO U.S. PERSONS
Slide 4: Disclaimer
Disclaimer This document has been prepared by Photon Group Limited (Photon) and comprises written materials/slides for a presentation concerning Photon. This is not a prospectus, disclosure document or offering document. This document is for information purposes only and does not constitute or form
Slide 5: Definitions & Assumptions
Definitions & Assumptions • Pro Forma (PF) – throughout the document pro forma FY 2008 and FY 2007 net revenue and EBITDA are calculated assuming ownership of all companies in the group at 30 June 2009 for the full 12 month period. Pro forma calculations are based on unaudited management accounts an
Slide 6: Contents
Contents Section 1 – Executive Summary Section 2 – FY 2009 Results Section 3 – Operational Update and Divisional Performance Section 4 – Equity Raising Appendix
Slide 7: Executive Summary
Executive Summary
Slide 8: Strong results for Photon Group in the worst economic climate in decades
We are announcing strong results for the Photon Group in the worst economic climate in decades. Photon has been a beneficiary of the structural …and built a robust business, strategically changes currently taking place in the marketing and positioned to deliver growth in good advertising industry …
Slide 9: We Engage Where The Customer Is
We Engage Where The Customer Is FY 2009 underlying EBITDA by division Field Marketing Division Outsourced sales execution and merchandising group – defensive, counter-cyclical, weighted towards FMCG and Telco clients Integrated Communications and Digital Division Internet and E-Commerce World class
Slide 10: Like-for-Like Growth
Like-for-Like Growth Like-for-Like Net Revenue Like-for-Like EBITDA +8% +7% $93.0MM $440.6MM +11% +16% $86.1MM $413.0MM $77.3MM $356.7MM 2007PF 2008PF 2009A 2007PF 2008PF 2009A 8
Slide 11: FY 2009 Global Peer Analysis
FY 2009 Global Peer Analysis Revenue Grew in a Tough Market Best in Class Margin FY 2009 Organic Revenue Growth1 FY 2009 Underlying EBIT Margin 16.4% 16.6% 16.1% 5.8% 15.3% 12.1% 12.2% 7.3% -1.0% -1.3% -2.1% -2.4% -4.1% -4.0% 2 2 2 3 3 3 Omnicom IPG Aegis Publicis Havas WPP Photon IPG Havas Omnicom
Slide 12: FY 2009 Financial Highlights
FY 2009 Financial Highlights • Strong performance in challenging market conditions • Net revenue increased 17% year-on-year to $440.6 million (7% like-for-like) • Underlying EBITDA increased 19% year-on-year to $93.0 million (8% like-for-like) • Underlying net profit after tax increased by 30% year-
Slide 13: Equity Raising and Outlook
Equity Raising • Photon is undertaking a $114.6 million fully underwritten equity raising comprising a $26.6 million placement and a $87.9 million 1 for 2 non-renounceable rights issue • Proceeds will be used to retire debt and strengthen the balance sheet • Following the equity raising, pro forma d
Slide 14: FY 2009 Results
FY 2009 Results
Slide 15: FY 2009 Profit and Loss summary
FY 2009 Profit and Loss summary 2009 Pro Forma YE 30 June, A$m 2009A 2008A Change for Equity Raising Gross Revenue 653.5 574.4 14% 653.5 Net Revenue 440.6 376.8 17% 440.6 EBITDA 89.3 78.2 14% 89.3 Underlying EBITDA 93.0 78.2 19% 93.0 Underlying EBITDA Margin 21.1% 20.8% 30bps 21.1% Underlying EBIT 7
Slide 16: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary • As at 30 June 2009 Photon had drawn debt facilities of $273 million and deferred consideration payment obligations estimated at $111 million • The equity raising will assist Photon to reduce debt and fund deferred consideration payments • No off-balance sheet fi
Slide 17: Debt Profile at 30 June 2009
Debt Profile at 30 June 2009 • The equity raising will reduce pro forma leverage at 30 June 2009 to 1.8x debt/EBITDA and increase interest cover to 7.6x 30 June 2009 Pro Forma for 30 June 2009 Equity Raising Av. A$ million Facility Limit Term Drawn1 Interest Rate Drawn1,4 Facility A1 $88m April 10 $
Slide 18: Earn-outs
Earn-outs • Photon has earn-out payables on its balance sheet in relation to previous acquisitions • Estimate of the liabilities at 30 June 2009 was $116 million (net present value $111 million) • The size of the payments is dependant on the earnings growth of these companies over, typically, a four
Slide 19: Operational Update and Divisional Performance
Operational Update and Divisional Performance
Slide 20: FY 2008 – FY 2009 Net Revenue by Division
FY 2008 – FY 2009 Net Revenue by Division Reported Like-for-Like AUD ’000s FY 2008A FY 2009A Growth FY 2008PF FY 2009A Growth Field Marketing 125,774 141,178 12% 129,061 141,178 9% Internet and E-Commerce 40,018 51,065 28% 43,164 51,065 18% Specialised Communications 76,726 79,320 3% 87,289 79,320 (
Slide 21: A Highly Diversified Company
A Highly Diversified Company FY 2009A Underlying EBITDA by Division FY 2009A Revenue by Industry Integrated Comms & Digital 15% Professional Field Marketing Services 2% 27% Travel, Tourism, Property and and Transport 2% Strategic Construction 2% Intelligence 13% Pharmaceuticals 3% Energy, Oil, and M
Slide 22: Field Marketing Division
Field Marketing Division Outsourced sales execution and merchandising group - defensive, counter-cyclical, weighted towards FMCG and Telco clients What the Division Does Examples of Customers • Leading outsourcing group for FMCG and Telco clients Sainsbury’s Sainsbury’ Sainsbury’s Waitrose Waitrose
Slide 23: Field Marketing Division: FY 2009 Performance
Field Marketing Division Outsourced sales execution and merchandising group - defensive, counter-cyclical, weighted towards FMCG and Telco clients FY 2009 Performance Like-for-Like Results YE 30 June, A$m 2008PF 2009A Change Significant growth across key businesses in FY 2009 – EBITDA up 21% on FY
Slide 24: Internet and E-Commerce Division
Internet and E-Commerce Division High-growth combination of long-term contracted services, innovative product sales and transaction based marketing What the Division Does Examples of Customers • Website management and online publishing services for high volume Optus Optus AFL AFL Travelex Travelex a
Slide 25: Internet and E-Commerce Division: FY 2009 Performance
Internet and E-Commerce Division High-growth combination of long-term contracted services, innovative product sales and transaction based marketing FY 2009 Performance Like-for-Like Results YE 30 June, A$m 2008PF 2009A Change Strong growth in division with EBITDA up 15% on FY 2008 like-for-like Ne
Slide 26: Specialised Communications Division
Specialised Communications Division Supported by less cyclical, retainer PR consultancy work – impacted by cyclical corporate communications and events budgets What the Division Does Examples of Customers • PR and public affairs: consultancy work for corporate clients on Nestle Nestle RIM RIM Optus
Slide 27: Specialised Communications Division: FY 2009 Performance
Specialised Communications Division Supported by less cyclical, retainer PR consultancy work – impacted by cyclical corporate communications and events budgets FY 2009 Performance Like-for-Like Results YE 30 June, A$m 2008PF 2009A Change Very different performance across different parts of the bus
Slide 28: Strategic Intelligence Division
Strategic Intelligence Division Division driven by independent communications advisory business with largely contracted global client base What the Division Does Examples of Customers Vodafone SC SC Johnson Johnson • Qualitative and quantitative market research Vodafone Adidas Adidas • Communication
Slide 29: Strategic Intelligence Division: FY 2009 Performance
Strategic Intelligence Division Division driven by independent communications advisory business with largely contracted global client base FY 2009 Performance Like-for-Like Results YE 30 June, A$m 2008PF 2009A Change Strong support for Naked’s strategic consulting offering in current environment –
Slide 30: Integrated Communications and Digital Division
Integrated Communications and Digital Division World class advertising agencies, recognised for creative talent, delivering growth in very difficult advertising markets What the Division Does Examples of Customers • Leading advertising agencies – bmf and bwm top tier agencies. “World GIO GIO Gatorad
Slide 31: Integrated Communications and Digital Division: FY 2009 Performance
Integrated Communications and Digital Division World class advertising agencies, recognised for creative talent, delivering growth in very difficult advertising markets FY 2009 Performance Like-for-Like Results YE 30 June, A$m 2008PF 2009A Change Very strong performance for leading agencies with s
Slide 32: Equity Raising
Equity Raising
Slide 33: Summary of the Equity Raising
Summary of the Equity Raising • Photon is undertaking a fully underwritten equity raising to repay debt and strengthen its balance sheet • At the time the proceeds of the equity raising are used to repay debt, the current estimate of future earn-out liabilities will be matched by available headroom
Slide 34: Key Investment Highlights
Key Investment Highlights • Overweight exposure to segments where marketing dollars are being directed • Approximately 80% of FY 2009 net revenue generated from: Strategically well • Field Marketing – driven by direct to consumer marketing / in-store expenditure positioned to capture shift in market
Slide 35: Key Investment Highlights
Key Investment Highlights • Equity raising will significantly de-lever the business • Pro forma leverage will be reduced to 1.8x at 30 June 2009 (excluding estimated future earn- Strengthened balance outs liabilities) sheet post equity raising • Pro forma interest cover of 7.6x • At the time the pro
Slide 36: Key Offer Statistics
Key Offer Statistics Institutional Placement Amount to be raised under the Institutional Placement Approximately $26.6 million Number of New Shares offered under the Institutional Placement Approximately 14.4 million Issue Price of $1.85 per New Share 21.6% Discount to Last / 18.0% Discount to 5Day
Slide 37: Timetable
Timetable Event Date Offer Document lodged with ASX 17 August 2009 Record Date for determining Entitlements 25 August 2009 (7.00pm AEST) Offer Document Dispatched to Eligible Shareholders 27 August 2009 Offer Opening Date 27 August 2009 Offer Closing Date 14 September 2009 (5.00pm AEST) Trading on A
Slide 38: Appendix
Appendix
Slide 39: Key Risks
Key Risks Photon is subject to a number of risks and other factors that may impact on both its future performance and the market price at which its Shares trade. Broadly, these risks can be classified as risks general to investing in the stock market and risks specific to an investment in Photon. Th
Slide 40: Key Risks cont'd
Key Risks cont’d (c) Dependence on key personnel The advertising and marketing services industries are highly dependent on the talent, creative abilities and technical skills of the personnel of the service providers and the relationships their personnel have with clients. Photon believes that its O
Slide 41: Key Risks cont'd
Key Risks cont’d (i) Systems risk A number of Photon’s Operating Companies rely to a significant degree on its information technology systems and from time to time incur significant expenditure on systems upgrade and maintenance. IT systems are an essential part of a number of businesses in the grou