Slide 1: Enero Group FY24 Results
ENERO GROUP FY24 RESULTS 15 August 2024
Slide 2: Agenda
AGENDA - FY24 highlights - Key financial metrics - Strategy and outlook - Q&A PAGE 2
Slide 3: FY24 Highlights
FY24 HIGHLIGHTS Brent Scrimshaw CEO PAGE 3
Slide 4: Like-for-like net profit growth
Like-for-like net profit growth UNDERLYING RESULTS % Change SUMMARY FY24 FY23 % Change FY23 LFL1 (A$M) LFL1 • Prior year figures have been presented on a like- for-like (LFL) basis which adjusts for the rebase2 Net revenue1 189.7 241.6 (21.5%) 202.3 (6.2%) of OBMedia in FY23 Q4 Expenses (152.4) (162
Slide 5: Economic interest
1 Economic interest RESULTS ON ECONOMIC INTEREST % Change SUMMARY FY24 FY23 % Change FY23 LFL1 (A$M) LFL1 • Given the high contribution of our non-wholly Net revenue 1 167.1 197.8 (15.5%) 177.7 (6.0%) owned subsidiary, results are also presented on an economic basis. This reflects 51% of Expenses (1
Slide 6: Technology, Healthcare and Consumer Practice reflects contrasting performance of agencies
Technology, Healthcare and Consumer Practice reflects contrasting performance of agencies Overall THC Practice Sub-sector performance Share of YoY % change Overall Key brands Geography THC Practice Commentary thematic Reported Continuing revenue business1 -6% -4% • Compressed margins with additional
Slide 7: Diversified revenue mix in our practices
Diversified revenue mix in our practices Practice revenue by industry Practice revenue by geography Practice revenue model Shared client revenue Finance 3% Consumer Transport, Goods Other Airlines & 1% 4% Auto 4% Services USA 10% 33% Retainer - 1 brand/ Technology country Fixed Project & Telco 34% A
Slide 8: Winning blue-chip clients of scale in FY24
Winning blue-chip clients of scale in FY24 Enero now has 34 clients with $1m+ revenue TECHNOLOGY HEALTHCARE CONSUMER FY24 NEW CLIENT WINS 34 clients with annual revenue greater than $1m (FY23: 27 clients) PAGE 8
Slide 9: OBMedia improved in Q4 with sale process ongoing
OBMedia improved in Q4 with sale process ongoing Revenue and EBITDA (A$M) Commentary Strategic Review Update • LFL1 revenue decreased 8% with market-wide • Multiple non-binding indicative offers were received, weakness in Q3. Q4 revenue saw some recovery, and a preferred bidder selected. growing qua
Slide 10: Key Financial Metrics
KEY FINANCIAL METRICS Carla Webb-Sear CFO PAGE 10
Slide 11: Statutory profit & loss
Statutory profit & loss SUMMARY PROFIT AND LOSS SUMMARY (A$M) FY24 FY23 % Change • 22% year-on-year net revenue decline with Net revenue 189.7 241.6 (21.5%) rebased OBMedia revenue from Q4 FY23 Other income 0.1 0.1 • Staff costs ratio for THC Practice of 75% (FY23: 75%) with ratio for OBMedia of 39%
Slide 12: Significant items
Significant items SUMMARY SIGNIFICANT ITEMS (A$M) FY24 FY23 • $70.8m impairment loss relates to ROI DNA and Impairment loss (70.8) - GetIT intangibles Contingent consideration fair value gain 22.4 34.6 • Fair value gain relates to contingent consideration true up due to lower earnings Restructuring
Slide 13: Ongoing focus on cost management
Ongoing focus on cost management Expense by segment (A$M, cons curr) Commentary Technology, Healthcare and Consumer Practice • Material cost reduction initiatives in FY23 H2 & FY24 H2 • Remain focused on enhancing capabilities with investment in -14.1% strategically important areas OBMedia • Savings
Slide 14: Cash flow
Cash flow SUMMARY (A$M) FY24 FY23 • Cash conversion at 88% of EBITDA EBITDA 37.4 78.8 (FY23: 102%) with economic interest cash conversion at 97% (FY23: 96%) Movement in working capital (0.5) 2.7 • Decrease in net interest payment due Equity incentive expense 1.1 2.5 to lower debt balance Restructuri
Slide 15: Strong capital position
Strong capital position SUMMARY (A$M) 30 June 2024 30 June 2023 • Net cash of $38.2m (June 2023: $13m Cash 46.7 52.4 net cash) Trade and other receivables 78.0 • $47m of $50m bank loan facility 74.8 undrawn at June 2024 Other assets 24.6 25.8 • Intangibles reduction largely relates to Intangible ass
Slide 16: Balanced approach to capital management
Balanced approach to capital management ZERO LEVERAGE FY24 DIVIDEND PAYOUT SHARE BUYBACK Dividend payout Net Debt / EBITDA1 44% ~2m 0.0x of NPAT Enero shares acquired (excl. one-off items) • Dividend payout within guided • Buyback program commenced on range of 40% to 60% 9 May 2023 and completed on
Slide 17: Strategy & Outlook
STRATEGY & OUTLOOK Brent Scrimshaw CEO PAGE 17
Slide 18: Delivering a more focused strategy
Delivering a more focused strategy The partner for forward-thinking Our Vision What do we want to be known for? marketers embracing a world of change Global Technology Global Healthcare Aus Consumer Global AdTech Battlegrounds What markets are we choosing to compete in? Strategic review in progress
Slide 19: Progress on key strategic priorities in FY24
Progress on key strategic priorities in FY24 1 2 3 4 Portfolio Tech and AI Enhance Core Accelerate Health Optimisation Capabilities • Strengthen Australian • OBMedia strategic • AI thought leadership • Continue to build our agency margins review underway, with at leading global healthcare capabiliti
Slide 20: We have long term belief in the tech sector
We have long term belief in the tech sector Example Enero tech clients seeing share price improvement in 2024 VC dry powder remains elevated and ready to deploy Dry powder by vintage Sources: Daily closing share price for example tech client stocks; Pitchbook NVCA Venture Monitor PAGE 20
Slide 21: Building innovative products and services
Building innovative products and services We are developing tangible AI-focused We will continue to modernise our products and services capabilities in FY25 • Continued investment in tech and consulting solutions – ‘Hotwire Futures’ • GAIO.tech (and new AI tools) • IQ data suite • New ABM solution •
Slide 22: Positioned to deliver on long-term growth plan
Positioned to deliver on long-term growth plan Tech, Healthcare & Profitability and Clear portfolio Strong Consumer Practice capability focus vision fundamentals opportunity • Continued momentum in • FY23 & FY24 structural cost • Sale of CPR and OBMedia • Low levels of debt and Australian agencies B
Slide 23: Outlook
Outlook • Trading for July remained broadly consistent with the end of FY24 H2 • Technology, Healthcare & Consumer Practice continues to operate in a challenging technology industry internationally. The segment is benefiting from cost initiatives taken in FY24 Q4. • OBMedia revenue broadly in line w
Slide 24: Q&A
Q&A Brent Scrimshaw Carla Webb-Sear PAGE 24
Slide 25: Appendix
ee Appendix enero
Slide 26: Segment results on underlying basis
Segment results on underlying basis Net Revenue EBITDA EBITDA Margin % Chg in % Chg in % % (A$M) FY24 FY23 Constant FY24 FY23 Constant FY24 FY23 Change Change Currency Currency Technology, Healthcare and 143.5 152.1 (5.6%) (7.8%) 22.8 25.1 (8.8%) (11.0%) 15.9% 16.5% Consumer Practice OBMedia 46.2 89
Slide 27: Results by geography
Results by geography % Change ECONOMIC INTEREST Continuing Business FY24 FY23 % Change (A$M) in Constant Currency Net Revenue USA 70.1 102.0 (31.3%) (33.1%) Australia and Asia 66.4 64.5 2.9% 5.8% UK and Europe 30.7 31.3 (2.0%) (8.2%) Total 167.1 197.8 (15.5%) (16.5%) EBITDA USA 16.4 42.4 (61.2%) (62
Slide 28: Definitions
Definitions Net revenue: gross revenue recognised in accordance with AASB 15 less directly attributable cost of sales EBITDA: profit before interest, taxes, depreciation, amortisation and any significant items EBITDA margin: EBITDA / Net revenue EBIT: profit before interest, taxes, and any significa
Slide 29: Thank you
THANK YOU All content, concepts and ideas contained within this document are private and confidential. They must not be reproduced and remain the property of Enero. PAGE 29
Slide 30: Disclaimer
Disclaimer This document has been prepared by Enero Group Limited Except for any statutory liability which cannot be excluded, (Enero) and comprises written materials/slides for a each of Enero, its related companies and their respective presentation concerning Enero. This is not a prospectus, offic