Enero Group Limited · ASX:EGG
Enero — H1 FY23 Earnings Presentation
41 slides from Enero's earnings presentation, Feb 16, 2023
Slide 1: ASX Announcement: 39% increase in net revenue and EBITDA for H1 FY23
Enero Group Limited ABN 97 091 524 515 Level 2, 100 Harris Street Pyrmont NSW 2009 Australia ASX ANNOUNCEMENT Enero Group continues strong growth trajectory with 39% increase in net revenue and underlying EBITDA for H1 FY23 SYDNEY, AUSTRALIA, 16 February 2023: Enero Group Limited (ASX: EGG) has repo
Slide 2: Creative Technology & Data continues to accelerate
Creative Technology & Data continues to accelerate, with Brand Transformation impacted by challenging macroeconomic conditions Creative Technology & Data The Creative Technology & Data segment’s net revenue was up 57% to $61.8 million (46% increase in constant currency terms) which was primarily dri
Slide 3: Enero remains focused on managing near term margins
Enero remains focused on managing near team margins and will continue to take appropriate steps to address current macroeconomic headwinds while positioning the business to capture client demand. Commenting on Enero Group’s achievements in creating a long-term growth platform, Brent Scrimshaw said:
Slide 4: Forward Looking Statements
Forward Looking Statements Certain statements made in this release are forward-looking statements. These forward-looking statements are not historical facts but rather are based on Enero Group's current expectations, estimates and projections about the industry in which Enero Group operates, and bel
Slide 5: Enero Group FY23 Half Year Results
Enero Group FY23 Half Year Results 16 February 2023 1
Slide 6: Agenda
Agenda • FY23 H1 highlights • Key financial metrics • Delivering on strategy • Trading update • Q&A 2
Slide 7: FY23 H1 Highlights
FY23 H1 Highlights — Brent Scrimshaw CEO 3
Slide 8: Executing on our strategy to deliver strong growth
Executing on our strategy to deliver strong growth Strategic growth drivers Underlying financial results • Investments in OBMedia delivering strong returns • Net revenue growth of 39% to $129.5m continues 5 years of strong growth • Diversified portfolio all contributing profit despite accelerated ma
Slide 9: Key metrics snapshot
Key metrics snapshot HIGHLIGHTS • EBITDA growth of 39% YoY UNDERLYING RESULTS FY23 H1 FY22 H1 % Change • NPAT growth of 8% reflects (A$M) accelerated growth of 51%- Net revenue1 129.5 93.2 38.9% owned OBMedia Expenses (85.1) (61.3) (39.0%) • EPS growth of 2% reflects shares issued relating to EBITDA
Slide 10: Growth story continues despite macroeconomic challenges
Growth story continues despite macroeconomic challenges HIGHLIGHTS • Net revenue continues to grow NET REVENUE - ECONOMIC INTEREST 1 (A$M) EBITDA - ECONOMIC INTEREST 1 (A$M) & EBITDA MARGIN (%) both organically and through three acquisitions over the past 3 years 120 30 30% • Significant EBITDA CAGR
Slide 11: Segment results
HIGHLIGHTS Segment results Creative Technology and Data • OBMedia continues to grow with Creative Technology and Data continues to accelerate with traffic diversification and economies of scale Brand Transformation impacted by challenging macro conditions • Orchard softening in US Health; new client
Slide 12: Diversified portfolio provides resilience in challenging macros
Diversified portfolio provides resilience in challenging macros NET REVENUE – ECONOMIC INTEREST1 (A$M) EBITDA – ECONOMIC INTEREST1 (A$M) HIGHLIGHTS 80 30 • Creative Technology and Data: - ’20-23 Net revenue CAGR of 33% 25 60 - ’20-23 EBITDA CAGR of 61% 20 • Brand Transformation: 40 15 - ’20-23 Net r
Slide 13: Mixed impact from market dynamics
Mixed impact from market dynamics Technology Healthcare Growth Consumer • Global Tech industry slowdown • Largely resilient to recent • Varies by segment: and cost reduction initiatives macroeconomic conditions as • Low-cost grocery seeing have impacted marketing marketing budgets typically strong d
Slide 14: Diversified revenue mix
Diversified revenue mix Revenue1 by industry Revenue1 by geography Agency2 revenue model Shared client revenue1 Transport, Finance Consumer Goods Airlines & Auto 2% 1% Other 3% 1% Services 7% Health Care Australia 2 brands 8% Technology & Asia 25% Project & Telco 31% Retainer - USA 42% 43% Fixed 1 b
Slide 15: OBMedia delivers high-intent customers to advertisers
OBMedia delivers high-intent customers to advertisers 1 Acquire customers from omnichannel traffic sources 2 Qualify customer intent and quality using proprietary tech 3 Monetise by delivering quality customers to search advertisers Customer Customer clicks clicks Customer taken to OBMedia landing p
Slide 16: Technology and partnerships power a simple business model
Technology and partnerships power a simple business model Acquire Qualify Monetise customers customers customers Advertisers Customer Customer clicks AdMarket clicks (OBM’s programmatic Advertiser optimisation platform) pays search engine Organic (content) Data analytics Display (direct) Search Emai
Slide 17: Growth fuelled by diversification and investment
Growth fuelled by diversification and investment Acquire customers Qualify customers Monetise customers PROGRAMMATIC PLATFORM Uses AI and automation to Native enhance efficiency in optimising Social traffic and detecting fraud Organic (content) DATA WAREHOUSE Display Display Automated customer acqui
Slide 18: 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 net revenue and EBITDA growth • Single digit net revenue decline impacted by Health client del
Slide 19: Brand Transformation
Brand Transformation CREATIVE AGENCY: THE GLOBAL TECH HOME OF THE LONG IDEA – ENDURING, COMMUNICATIONS CONSULTANCY EFFECTIVE, EMOTIVE END TO END IDEAS • Single digit decline in net revenue excluding acquisitions • Net revenue cycling one-off pandemic health support in FY22 Key • ROI DNA net revenue
Slide 20: Key financial metrics
Key financial metrics — Carla Webb-Sear CFO 16
Slide 21: Record profitability in FY23 H1
HIGHLIGHTS Record profitability in FY23 H1 • 39% year-on-year net revenue growth benefiting from acquisitions and strong momentum in OBMedia PROFIT AND LOSS SUMMARY (A$M) FY23 H1 FY22 H1 % Change Net revenue 129.5 93.2 38.9% • Staff costs ratio maintained at 58% despite investment in OBMedia Other i
Slide 22: Strong capital position supports growth plans
Strong capital position supports growth plans HIGHLIGHTS • Lower cash due to purchase of ROI DNA and GetIT, repayment of (A$M) FY23 H1 FY22 $10.3m of debt in December Cash 38.0 98.7 • Intangible assets and contingent consideration increase relate to Trade and other receivables 99.0 63.9 ROI DNA and
Slide 23: Balance Sheet & Capital Management
Balance Sheet & Capital Management (A$M) FY23 H1 FY22 HIGHLIGHTS Contingent consideration • Contingent consideration balance 10.1 20.1 relates to ROI DNA and GetIT Opening 1 July (at present value) acquired in July 2022 and MBA Recognition on acquisition – ROI DNA and GetIT 53.5 - acquired in April
Slide 24: Cash flow & cash conversion
Cash flow & cash conversion HIGHLIGHTS (A$M) FY23 H1 FY22 H1 • Cash conversion impacted by EBITDA 44.3 31.9 timing of two customer payments in OBMedia and BMF with Movement in working capital (27.9) (1.4) payments subsequently received post Christmas. Adjusting for these Equity incentive expense 1.0
Slide 25: Delivering on strategy
Delivering on strategy — Brent Scrimshaw CEO 21
Slide 26: Enero's operating model
Enero’s operating model WHO WE ARE A CREATIVE TECHNOLOGY COMPANY BRAND TRANSFORMATION CREATIVE TECH & DATA PORTFOLIO GROWTH PRIORITY VERTICALS TECHNOLOGY HEALTHCARE CONSUMER CENTRES OF PEOPLE AND FINANCE TECHNOLOGY STRATEGY LEGAL EXCELLENCE CULTURE 22
Slide 27: Acquisition integration progress
Acquisition integration progress Brand • Retaining ROI DNA brand as Hotwire subsidiary • Transition GetIT brand to Hotwire in H2FY23 Commercial • Hotwire and GetIT jointly won two cyber security • Co-pitching on joint opportunities, with growing clients pipeline of work • Co-pitching on joint opport
Slide 28: Progressing on our FY23 key strategic priorities
Progressing on our FY23 key strategic priorities Capability Commercialise Drive Magnet for Focus on Core Enhancement Investments Efficiency Talent STRATEGIC • Drive key • Continued • Complete • Systems and • Refine post- PRIORITIES initiatives to investment in integration of processes to COVID stren
Slide 29: Trading update
Trading update — Brent Scrimshaw CEO 25
Slide 30: Trading update
Trading update • While still early in calendar 2023, the first 6 weeks of H2 has delivered a continuation of the macroeconomic headwinds experienced in FY23 H1. • The Creative Technology & Data segment has continued to achieve a strong financial performance albeit with lower growth rates as it cycle
Slide 31: Building a long-term growth platform
Building a long-term growth platform Strong financial OBMedia growth story Strong Culture as a results in H1 FY23 continues fundamentals competitive advantage ✓ Flexible talent model ✓ Traffic diversification Macro headwinds +39% net revenue enabled us to ✓ Investment in strong ✓ Tech investment acc
Slide 32: Q&A
Q&A — Brent Scrimshaw Carla Webb-Sear 28
Slide 33: Appendix
Appendix — 29
Slide 34: Reconciliation of statutory to continuing business results
Reconciliation of statutory (4D) to continuing business results Statutory FY23 H1 Less Significant excluding Continuing (A$M) 4D items significant items Less Disposals businesses Net revenue (statutory gross profit) 129.5 - 129.5 - 129.5 Other income 0.1 - 0.1 - 0.1 Expenses (86.7) 1.5 (85.2) - (85.
Slide 35: Reconciliation of statutory to continuing business results
Reconciliation of statutory (4D) to continuing business results Statutory FY22 H1 Less Significant excluding Continuing 1 (A$M) 4D items significant items Less Disposals businesses Net revenue (statutory gross profit) 93.2 - 93.2 (1.3) 91.9 Other income 0.1 - 0.1 - 0.1 Expenses (61.4) - (61.4) 1.1 (
Slide 36: USA
USA US PORTFOLIO (A$M) % Change in UNDERLYING RESULTS FY23 H1 FY22 H1 % Change Constant Currency Net revenue 80.6 39.8 102.7% 89.0% EBITDA 42.3 23.8 78.1% 63.5% EBITDA margin 52.5% 59.8% (740) bps (A$M) % Change in ECONOMIC INTEREST1 FY23 H1 FY22 H1 % Change Constant Currency Net revenue 56.3 27.5 1
Slide 37: Australia and Asia
Australia and Asia AUSTRALIA PORTFOLIO % Change in (A$M) Constant UNDERLYING RESULTS FY23 H1 FY22 H1 % Change Currency Net revenue 32.8 35.4 (7.2%) (7.4%) EBITDA 5.6 8.5 (34.2%) (34.3%) EBITDA margin 17.0% 23.9% (700) bps % Change in (A$M) Constant CONTINUING BUSINESSES1 FY23 H1 FY22 H1 % Change Cur
Slide 38: UK and Europe
UK and Europe % Change in UK/CONTINENTAL EUROPE PORTFOLIO (A$M) Constant UNDERLYING RESULTS FY23 H1 FY22 H1 % Change Currency Net revenue 16.0 18.0 (11.1%) (6.2%) EBITDA 2.4 4.6 (47.8%) (45.0%) EBITDA margin 15.1% 25.6% (1,060) bps 34 34
Slide 39: Results by geography
Results by geography UNDERLYING RESULTS % Change in (A$M) FY23 H1 FY22 H1 % Change Constant Currency Net Revenue USA 80.6 39.8 102.7% 89.0% Australia and Asia 32.8 35.4 (7.2%) (7.4%) UK and Europe 16.0 18.0 (11.1%) (6.2%) Total 129.5 93.2 38.9% 33.9% EBITDA USA 42.3 23.8 78.1% 63.5% Australia and As
Slide 40: Results by Geography
Results by Geography Geographical contribution from operating companies1 FY23 H1 FY22 H1 31% 34% NET NET 44% 54% REVENUE REVENUE 15% USA 22% Australia and Asia UK and Europe 18% 31% 8% EBITDA 52% EBITDA 75% 17% 1. Reflects Enero’s 51% ownership of OBMedia 36 36
Slide 41: Disclaimer
Disclaimer This document has been prepared by Enero Group Except for any statutory liability which cannot be Limited (Enero) and comprises written materials/slides excluded, each of Enero, its related companies and for a presentation concerning Enero. This is not a their respective officers, employe