Enero Group Limited · ASX:EGG
Enero — FY2022 Earnings Presentation
38 slides from Enero's earnings presentation, Aug 12, 2022
Slide 1: Enero Group FY22 Full Year Results
Enero Group FY22 Full Year Results 12 August 2022 1
Slide 2: Agenda
Agenda • Growth trajectory continues • Strong growth across key financial metrics • Delivering on strategy • Positioned for continued growth in FY23 • Q&A 2
Slide 3: Growth trajectory continues
Growth trajectory continues — Brent Scrimshaw CEO 3
Slide 4: Our strategy delivers strong growth in earnings
Our strategy delivers strong growth in earnings Delivering on our strategy Strong financial results ✓ Well diversified revenue base across ✓ Net revenue growth of 20% continues the businesses; all contributing profit track record of strong growth ✓ Active reshaping of Enero portfolio through ✓ Brand
Slide 5: Strong track record of growth
Strong track record of growth HIGHLIGHTS • Net revenue continues to grow both organically and through GROWING NET REVENUE (A$M)* GROWING OPERATING EBITDA (A$M) AND MARGIN (%)* acquisitions over the past 5 years. Acquisitions include 45 30% Orchard in FY18, MBA in FY21 180 40 • GetIT and ROI DNA to 1
Slide 6: Consistent performance across all key metrics
Consistent performance across all key metrics HIGHLIGHTS • Operating EBITDA growth of 36.4% YoY. Adjusting for impact of JobKeeper in FY21, operating EBITDA growth of (A$M) FY22 FY21 % Change 40.1% Net revenue1 193.4 160.6 20.4% • NPAT growth of 18.8% Expenses (131.2) (115.0) 14.1% impacted by: - Hi
Slide 7: Growth in all segments
Growth in all segments HIGHLIGHTS • Brand Transformation: - ’18-22 Net revenue CAGR of GROWING NET REVENUE (A$M)* GROWING OPERATING EBITDA (A$M) AND MARGIN (%)* 5.2% - ’18-22 Operating EBITDA 180 30 30% CAGR of 9.9% 160 25% • Creative Technology and Data: 24 140 - ’18-22 Net revenue CAGR of 120 20%
Slide 8: Balanced contribution in FY22
HIGHLIGHTS Balanced contribution in FY22 Brand Transformation • Hotwire growth in all Strong operating EBITDA performance in both segments geographies, ‘Reputation to Revenue’ service offering gaining momentum • BMF strong performance with government clients in H1 FY22 Operating Net revenue Operatin
Slide 9: Diversified revenue with deep client relationships
Diversified revenue with deep client relationships Net revenue is diversified across industry and geography High client longevity Consumer Goods % of clients by length of relationship Finance Other 3% 2% 1% Transport, Airlines & Auto 4% 6 years or more 46% Services 10% Information 4 years or more 20
Slide 10: Brand Transformation
Brand Transformation CREATIVE AGENCY: THE GLOBAL TECH HOME OF THE LONG IDEA – ENDURING, COMMUNICATIONS CONSULTANCY EFFECTIVE, EMOTIVE END TO END IDEAS Key • Double digit top and bottom-line growth • Double digit top and bottom-line growth • 110bp EBIT margin improvement YoY • 170bp EBIT margin impro
Slide 11: Creative Technology and Data
Creative Technology and Data PROGRAMMATIC MARKETING PLATFORM: DIGITAL AGENCY: HELPING BUSINESSES ACCESS ONLINE TRANSFORMING BUSINESSES THROUGH ADVERTISING MARKETS BETTER CONNECTED EXPERIENCES • Substantial top and bottom-line growth Key • Net revenue and EBITDA growth YoY • ~120% increase in custome
Slide 12: Strong growth across key financial metrics
Strong growth across key financial metrics — Carla Webb-Sear CFO 12
Slide 13: Record profitability in FY22
Record profitability in FY22 HIGHLIGHTS • 20% year-on-year net revenue growth demonstrating ongoing PROFIT AND LOSS SUMMARY (A$M) FY22 FY21 % Change strong momentum Net revenue 193.4 160.6 20.4% • Staff costs ratio lower at 58% Other income 0.3 1.6 (FY21 - 61%) despite investment in OB Media. Staff
Slide 14: Strong cash balance supports growth plans
Strong cash balance supports growth plans HIGHLIGHTS • Increased cash position of $98.7m due to debt draw down ($36.3m) (A$M) 30 June 2022 30 June 2021 at 30 June 2022, consistent strong cash collection at period end and Cash 98.7 50.7 offset by higher tax payments following utilisation of tax losse
Slide 15: Balance Sheet & Capital Management
Balance Sheet & Capital Management HIGHLIGHTS • Contingent consideration balance relates to MBA acquired in April CASH AND CONTINGENT CONSIDERATION (A$M) FY22 FY21 2021. Maturity profile is over the FY23 to FY25 periods Contingent consideration 20.1 25.6 Opening 1 July (at present value) • Actual pa
Slide 16: High cash conversion
High cash conversion HIGHLIGHTS • Cash conversion at 96% of EBITDA (excludes right-of-use (A$M) FY22 FY21 asset depreciation charge) as compared to 121% in FY21 Operating EBITDA 62.2 45.6 resulting from expected unwinding of working capital. The Group Right-of-use asset depreciation charge 4.0 4.3 t
Slide 17: Delivering on strategy
Delivering on strategy — Brent Scrimshaw CEO 17
Slide 18: Refining our offering at scale
Refining our offering at scale 1 Further expansion into digital transformation 2 We are well positioned in growing segments 3 We offer what clients want 4 We are investing in modern capabilities 18
Slide 19: Further expansion into digital transformation
1. Further expansion into digital transformation $488 billion historic $1.2 trillion new addressable market addressable market Note: Excludes Market Research industry (est. $66bn market size) as Enero has exited this industry with sale of The Leading Edge in FY22 Source: Market size calculation base
Slide 20: We are well positioned in growing segments
2. We are well positioned in growing segments Marketing automation and Programmatic advertising Healthcare marketing data analytics US Programmatic Digital Display Ad Spend (US$bn) Data analytics spend (US$bn) Life Sciences US 2022 Budget marketing budgets intentions (% of (US$bn) respondents) Marke
Slide 21: We offer what clients want
3. We offer what clients want Our model provides integrated services and deep vertical expertise Clients need (and want) integrated support … Enero’s operating model • Client roles/buyers are merging (CMO=CRO) • Communications specialties no longer work in siloes WHO WE ARE • Procurement’s role is e
Slide 22: Investing in modern capabilities
4. Investing in modern capabilities • On 1 July 2022, Enero acquired two leading digital marketing businesses to strengthen Hotwire’s Reputation, Relationship and Revenue service offering Overview • ROI DNA: a leading B2B digital marketing agency in the US • GetIT: APAC’s leading B2B technology mark
Slide 23: Transforming the Hotwire offering
Transforming the Hotwire offering Acquisitions materially change B2B tech marketing is a growth business Hotwire’s business Historic net revenue growth of ROI DNA, GetIT and Hotwire pro-forma FY22 business mix (% of net revenue) McDonald Butler Associates Note: Historic non-fiscal years net revenue
Slide 24: Expanding Hotwire's Global Reach
Expanding Hotwire’s Global Reach Europe & Middle East North America Asia Pacific 500+ London Amsterdam Frankfurt Dubai Singapore San Francisco Madrid Copenhagen Malaysia New York Employees Milan Helsinki Beijing Minneapolis Munich Istanbul Shanghai Mexico City Paris Oslo Hong Kong Toronto Stockholm
Slide 25: Delivering on our key strategic priorities
Delivering on our key strategic priorities STRATEGIC PRIORITIES + + + TALENT CAPABILITY PRODUCTIVITY INNOVATION Enhance leadership Undertake M&A to Implement technology Create an innovation and diversify skillsets strengthen current and processes to engine to drive new to drive organic portfolio imp
Slide 26: Positioned for continued growth in FY23
Positioned for continued growth in FY23 — Brent Scrimshaw CEO 26
Slide 27: FY23 key priorities
FY23 key priorities Capability Commercialise Drive Magnet for Focus on Core Enhancement Investments Efficiency Talent • Drive key • Continued • Complete • Systems and • Refine post- initiatives to investment in new integration of processes to COVID workplace strengthen and capabilities recent improv
Slide 28: Trading Update
Trading Update • While still early in FY23, the first 5 weeks have seen a continuation of the Group’s growth trajectory. • The Creative Technology segment has continued its strong financial performance. • The Brand Transformation segment pipeline remains robust with some near-term impact from macro
Slide 29: Q&A
Q&A — Brent Scrimshaw Carla Webb-Sear 29
Slide 30: Appendix
Appendix — 30
Slide 31: Reconciliation of statutory (4E) to continuing business results
Reconciliation of statutory (4E) to continuing business results Statutory FY22 Less Significant excluding Continuing (A$M) 4E items significant items Less Disposals businesses Net revenue (statutory gross profit) 193.4 - 193.4 (1.8) 191.6 Other income 0.9 (0.6) 0.3 - 0.3 Expenses (129.8) 2.3 (127.5)
Slide 32: Reconciliation of statutory (4E) to continuing business results
Reconciliation of statutory (4E) to continuing business results Statutory FY21 Less Significant excluding Continuing (A$M) 4E items significant items Less Disposals businesses Net revenue (statutory gross profit) 160.6 - 160.6 (8.0) 152.6 Other income 1.6 - 1.6 (0.3) 1.3 Expenses (135.5) 23.2 (112.3
Slide 33: USA
USA US PORTFOLIO (A$M) AS REPORTED FY22 FY21 % Change Constant Currency Variance Net revenue 88.0 60.1 46.5% 42.3% Operating EBITDA 51.5 32.4 59.2% 54.7% Operating EBITDA margin 58.5% 53.8% 470bpt (A$M) ECONOMIC INTEREST* FY22 FY21 % Change Constant Currency Variance Net revenue 59.6 42.7 39.5% 35.5
Slide 34: Australia
Australia AUSTRALIA PORTFOLIO (A$M) AS REPORTED FY22 FY21 % Change Constant Currency Variance Net revenue 68.8 65.0 5.7% - Operating EBITDA 13.3 13.1 1.5% - Operating EBITDA margin 19.4% 20.2% (80bpt) - The Leading Edge/Digital Edge were sold in FY 22. (A$M) EXCL. JOB KEEPER and TLE FY22 FY21 % Chan
Slide 35: UK and Europe
UK and Europe UK/CONTINENTAL EUROPE PORTFOLIO (A$M) AS REPORTED FY22 FY21 % Change Constant Currency Variance Net revenue 36.6 35.5 3.1% 3.8% Operating EBITDA 8.0 7.6 5.4% 2.7% Operating EBITDA margin 21.9% 21.4% 50bpt (A$M) CONTINUING BUSINESSES* FY22 FY21 % Change Constant Currency Variance Net re
Slide 36: Results by Geography
Results by Geography (A$M) FY22 FY21 % Change Constant Currency Variance Net revenue USA 88.0 60.1 46.5% 42.3% Australia 68.8 65.0 5.7% 5.7% UK and Europe 36.6 35.5 3.1% 3.8% Total 193.4 160.6 20.4% 19.2% Operating EBITDA USA 51.5 32.4 59.2% 54.7% Australia 13.3 13.1 1.5% 1.5% UK and Europe 8.0 7.6
Slide 37: Results by Geography
Results by Geography Geographical contribution from operating companies* FY22 FY21 30% 36% 42% 45% NET NET REVENUE REVENUE USA 22% 25% Australia UK and Europe 26% 33% OPERATING 48% OPERATING EBITDA EBITDA 58% 16% 19% Note: *Reflects Enero’s 51% ownership of OB Media 37 37
Slide 38: 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