Enero Group Limited · ASX:EGG
Enero — H1 FY2024 Earnings Presentation
32 slides from Enero's earnings presentation, Feb 28, 2024
Slide 1: Enero Group FY24 Half Year Results
For personal use only ENERO GROUP FY24 HALF YEAR RESULTS 28 February 2024
Slide 2: Agenda
AGENDA For personal use only - FY24 H1 highlights - Key financial metrics - Trading update - Q&A PAGE 2
Slide 3: FY24 H1 Highlights
For personal use only FY24 H1 HIGHLIGHTS Brent Scrimshaw CEO PAGE 3
Slide 4: Positive underlying result on like-for-like basis
Positive underlying result on like-for-like basis UNDERLYING RESULTS % Change FY24 H1 FY23 H1 % Change FY23 H1 LFL1 (A$M) LFL1 SUMMARY For personal use only Net revenue1 100.4 129.5 (22.4%) 105.3 (4.6%) • Prior year figures have been presented on a like- for-like (LFL) basis which excludes the contr
Slide 5: Economic interest key metrics
1 Economic interest key metrics RESULTS ON ECONOMIC INTEREST FY23 H1 % Change SUMMARY FY24 H1 FY23 H1 % Change (A$M) LFL1 LFL1 • Given the high contribution of our non-wholly For personal use only 1 Net revenue 87.9 105.2 (16.4%) 92.8 (5.3%) owned subsidiary, results are also presented on an economi
Slide 6: Enero Group has updated its segments
Enero Group has updated its segments to better reflect business drivers and operational synergies For personal use only Previous BRAND TRANSFORMATION CREATIVE TECH & DATA segments New TECHNOLOGY, HEALTHCARE AND CONSUMER PRACTICE OBMEDIA segments Group PAGE 6
Slide 7: Strong profit growth in Technology, Healthcare and Consumer Practice
Strong profit growth in Technology, Healthcare and Consumer Practice Revenue and EBITDA (A$M) Commentary Achievements For personal use only • Won Telstra Global with work led from Singapore • Revenue decline of 6% largely due to the Group and utilising new data and analytics offerings challenging te
Slide 8: Diversified revenue mix in our practices
Diversified revenue mix in our practices For personal use only Practice revenue by industry Practice revenue by geography Practice revenue model Shared client revenue Finance 4% Consumer Transport, Goods Other Airlines & 1% 4% Auto 3% Services USA 9% 34% Retainer - Technology Fixed Project 2 brands/
Slide 9: We continue to win and expand our services with blue-chip brands
We continue to win and expand our services with blue-chip brands For personal use only TECHNOLOGY HEALTHCARE CONSUMER PAGE 9
Slide 10: A solid OBMedia result in a challenging market
A solid OBMedia result in a challenging market Revenue and EBITDA (A$M) Commentary Highlights For personal use only Google RSOC Launch • ~150% YoY increase in customers to advertisers and 5% YoY improvement in traffic conversion • Launched new Google Related Search on Content (“RSOC”) feed, enabling
Slide 11: Key Financial Metrics
For personal use only KEY FINANCIAL METRICS Carla Webb-Sear CFO PAGE 11
Slide 12: Statutory profit & loss
Statutory profit & loss SUMMARY PROFIT AND LOSS SUMMARY (A$M) FY24 H1 FY23 H1 % Change • 22% year-on-year net revenue decline For personal use only Net revenue 100.4 129.5 (22.4%) with rebased OBMedia revenue from Q4 FY23 Other income 0.0 0.1 • Staff costs ratio of 67% (FY23 H1: 58%) Staff costs (67
Slide 13: Significant items
Significant items SUMMARY SIGNIFICANT ITEMS (A$M) FY24 H1 FY23 H1 • $25.3m impairment loss relates to ROI DNA and For personal use only Impairment loss (25.3) - GetIT goodwill and onerous lease relating to CPR Fair value adjustments 8.8 - • Fair value adjustments in FY24 H1 relate to gains on contin
Slide 14: Ongoing focus on cost management
Ongoing focus on cost management Expense by segment (A$M) Commentary For personal use only Technology, Healthcare and Consumer Practice • Cost reduction initiatives in FY23 flowing into FY24 H1 cost base • Remain focused on retaining key capability with investment in strategically important areas -9
Slide 15: Cash flow
Cash flow SUMMARY (A$M) FY24 H1 FY23 H1 • Cash conversion at 108% of EBITDA For personal use only EBITDA 23.0 44.3 (FY23 H1: 74% adjusting for impact of timing of customer payments) Movement in working capital 1.7 (27.9) • Decrease in net interest payment due Equity incentive expense 0.6 1.0 to lowe
Slide 16: Strong capital position
Strong capital position SUMMARY (A$M) 31 December 2023 30 June 2023 • Net cash of $27.4m (June 2023: $13m For personal use only Cash 54.5 52.4 net cash) Trade and other receivables 82.2 • $41m of $50m bank loan facility 74.8 undrawn at December 2023 Other assets 26.3 25.8 • Contingent consideration
Slide 17: Optimising our capital position
Optimising our capital position For personal use only ZERO LEVERAGE FY24 H1 DIVIDEND PAYOUT SHARE BUYBACK Dividend payout Net Debt / EBITDA1 41% ~1.4m 0.0x of NPAT Enero shares bought back (at 28 Feb) (excl. one-off items) • Dividend payout within guided • Buyback program commenced on range of 40% t
Slide 18: Strategy & Outlook
For personal use only STRATEGY & OUTLOOK Brent Scrimshaw CEO PAGE 18
Slide 19: Focused on delivering on our strategy
Focused on delivering on our strategy For personal use only A CREATIVE TECHNOLOGY COMPANY … of the most modern … specialising in the An integrated offering… marketing services … verticals that count Build deep expertise in Develop end-to-end offerings with Known as the go-to specialists in Digital,
Slide 20: Strategic priorities for FY24
Strategic priorities for FY24 For personal use only 1 2 3 4 Portfolio Tech and AI Enhance Core Accelerate Health Optimisation Capabilities • Agency margin • OBMedia strategic • AI thought leadership • Continue to scale our recovery review at leading global events healthcare capabilities • Rebuild Ho
Slide 21: Continued portfolio optimisation
Continued portfolio optimisation For personal use only Strategic Review Update Divestment • Strategic review initiated in August 2023 • Executed on portfolio strategy to divest non-core businesses • Several potential scenarios evaluated to maximise shareholder value • Sold to key competitor, The Civ
Slide 22: Expanding our AI and Tech capabilities
Expanding our AI and Tech capabilities Positioning Hotwire as a thought leader on AI Accelerating Enero’s offshore Tech Hub For personal use only 2 • “Brands in the Age of AI” white paper developed to showcase Hotwire thought leadership to the world’s most powerful leaders at the World Economic Foru
Slide 23: Trading update
Trading update For personal use only • Enero’s Australian agencies continued to perform well in January while international market conditions remained challenging • Australian agencies BMF and Orchard delivered strong revenue growth in January, up 20% YoY, benefiting from favourable timing of projec
Slide 24: Positioned to deliver on long-term growth plan
Positioned to deliver on long-term growth plan For personal use only Tech, Healthcare & Profitability and OBMedia strategic Strong Consumer Practice capability focus review fundamentals momentum • 8% EBITDA growth with • FY23 structural cost reductions • Competitive sale process of • Low levels of d
Slide 25: Q&A
For personal use only Q&A Brent Scrimshaw Carla Webb-Sear PAGE 25
Slide 26: Appendix
For personal use only Appendix PAGE 26
Slide 27: Segment results on underlying basis
Segment results on underlying basis Net Revenue EBITDA EBITDA Margin For personal use only % Chg in % Chg in (A$M) FY24 H1 FY23 H1 % Change Constant FY24 H1 FY23 H1 % Change Constant FY24 H1 FY23 H1 Currency Currency Technology, Healthcare and 74.8 79.9 (6.3%) (9.0%) 13.5 12.5 7.6% 4.4% 18.0% 15.7%
Slide 28: FY23 restated segment results on underlying basis
FY23 restated segment results on underlying basis Net Revenue EBITDA EBITDA Margin For personal use only (A$M) FY23 FY22 % Change FY23 FY22 % Change FY23 FY22 Technology, Healthcare and 152.1 135.4 12.3% 25.1 33.2 (24.6%) 16.5% 24.5% Consumer Practice1 OBMedia 89.5 58.0 54.4% 65.4 44.0 48.6% 73.1% 7
Slide 29: Results by geography
Results by geography ECONOMIC INTEREST % Change in FY24 H1 FY23 H1 % Change (A$M) Constant Currency For personal use only Net Revenue USA 38.2 56.3 (32.1%) (33.8%) Australia and Asia 33.5 32.8 2.0% 1.8% UK and Europe 16.2 16.0 0.7% (8.1%) Total 87.9 105.2 (16.4%) (18.8%) EBITDA USA 10.3 23.8 (56.8%)
Slide 30: 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 For personal use only EBITDA margin: EBITDA / Net revenue EBIT: profit before interest, ta
Slide 31: Thank you
For personal use only 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 31
Slide 32: Disclaimer
Disclaimer This document has been prepared by Enero Group Limited Except for any statutory liability which cannot be excluded, For personal use only (Enero) and comprises written materials/slides for a each of Enero, its related companies and their respective presentation concerning Enero. This is n