Enero Group Limited · ASX:EGG
Enero — H1 2020 Earnings Presentation
24 slides from Enero's earnings presentation, Feb 11, 2020
Slide 1: ASX Announcement: Results for the half year ended 31 December 2019
Enero Group Limited ABN 97 091 524 515 Level 2, 100 Harris Street Pyrmont NSW 2009 Australia t. +61 2 8213 3031 ASX ANNOUNCEMENT Results for the half year ended 31 December 2019 11 February 2020 Enero Group Limited (ASX: EGG) today announced its results for the half year ended 31 December 2019. Summ
Slide 2: Chair commentary, operating performance and dividend
Enero Group Chair, Ann Sherry said: “The Group delivered a very strong set of results for the half year, most importantly achieving organic revenue growth of 7% and delivering above benchmark margins. In my short time in the role, I have met many of the teams, particularly those in Sydney, and have
Slide 3: enero
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Slide 4: Enero Group FY20 Half Year Results
ENERO GROUP FY20 HALF YEAR RESULTS 11 FEBRUARY 2020
Slide 5: Half Year Highlights
FY20 HALF YEAR HIGHLIGHTS Delivering growth Net Revenue up 6.8% to $68.0m. Operating EBITDA up 10.0% to $11.0m. Operating EBITDA margin at 16.2%, up 0.5%. Net Profit before significant items to equity holders down 4.9% to $5.8m¹. Earnings Per Share (EPS) before significant items down 5.6% to 6.8 cps
Slide 6: Half Year Highlights: Strategy
FY20 HALF YEAR HIGHLIGHTS Strategy Simplify, evolve and grow. The vision of Enero Group is to offer a client-centric alternative to traditional marketing holding companies and technology consulting companies by delivering bespoke end-to-end integrated solutions spanning the three most critical areas
Slide 7: Operating Companies
OPERATING COMPANIES Insight, Strategy, Creative & PR & Integrated Digital & Data & Analytics Content Communications Technology 5
Slide 8: Key Financial Metrics
FY20 KEY FINANCIAL METRICS Half year ended 31 December ($M) Key Financial Metrics 2019 2018 Variance Net Revenue 68.0 63.7 6.8% Operating EBITDA¹ 11.0 10.0 10.0% Operating EBITDA margin² 16.2% 15.7% 0.5bp Net Profit after tax before significant items to equity holders³ 5.8 6.1 (4.9%) Statutory Net P
Slide 9: Group Financial Performance
FY20 GROUP FINANCIAL PERFORMANCE Revenue and Operating EBITDA Half year ended 31 December ($M) • 7% Organic revenue growth (5% net of currency 2019 2018 Variance assistance). • Staff costs ratio holding at 68.6% (1HFY2019 - Net Revenue 68.0 63.7 6.8% 68.4%) Staff costs includes all fulltime employee
Slide 10: Group Financial Performance: Profit and Loss Summary
FY20 GROUP FINANCIAL PERFORMANCE Half year ended 31 December ($M) Profit and Loss Summary 2019 2018 Net Revenue 68.0 63.7 Other Revenue 0.3 0.1 Staff costs (46.7) (43.6) Operating expenses (8.2) (10.2) Right-of-use assets depreciation charge⁴ (2.4) - Operating EBITDA¹ 11.0 10.0 Depreciation of plant
Slide 11: Group Financial Performance: Significant Items
FY20 GROUP FINANCIAL PERFORMANCE Half year ended 31 December ($M) Significant Items 2019 2018 Contingent consideration fair value loss¹ (1.8) - Total significant items (1.8) - 1. The contingent consideration fair value loss is in relation to the re-assessment of future payments for the Eastwick Comm
Slide 12: Geographical Results
FY20 GEOGRAPHICAL RESULTS Operating Companies only Half year ended 31 December ($M) Constant 2019 2018 Variance Currency Variance • International operations accounted for 52% of total revenue and 59% of Operating Companies EBITDA. The Net Revenue Group’s exposure to overseas markets continues to Aus
Slide 13: Geographical Results: Contribution from operating companies
FY20 GEOGRAPHICAL RESULTS Geographical contribution from operating companies Net Revenue 1HFY2020 Net Revenue 1HFY2019 Australia 27% 22% 45% 48% UK and Europe 28% 30% USA Operating EBITDA 1HFY2020 Operating EBITDA 1HFY2019 32% 40% 41% 47% 19% 21% 11
Slide 14: Geographical Results: Australia
FY20 GEOGRAPHICAL RESULTS Australia Half year ended 31 December ($M) Constant Highlights 2019 2018 Variance Currency Variance • Organic revenue growth, and despite slight margin decrease year-on-year margins continue to be in line Net Revenue 30.7 30.4 1.0% - with expected sector range. Operating EB
Slide 15: Geographical Results: UK and Europe
FY20 GEOGRAPHICAL RESULTS UK and Europe Half year ended 31 December ($M) Constant Highlights 2019 2018 Variance Currency Variance • Steady revenue year-on-year as investments made at senior levels across the UK and Europe settle into roles. Net Revenue 19.0 19.2 (1.0%) (3.3%) • Hotwire in line with
Slide 16: Geographical Results: USA
FY20 GEOGRAPHICAL RESULTS USA Half year ended 31 December ($M) Constant Highlights 2019 2018 Variance Currency Variance • Material revenue improvement in USA market including constant currency impacts along with significant margin Net Revenue 18.3 14.1 29.8% 22.6% acceleration from greater scale. Op
Slide 17: Client Analysis
FY20 CLIENT ANALYSIS Revenue diversification Revenue by industry • Strong client diversification with mix of clients Banking, Finance & Utilities & Energy Insurance 1% Property & Construction across market industries and sectors. Telecommunications 4% 1% 4% • Largest client represents 11% of group N
Slide 18: Balance Sheet & Capital Management
BALANCE SHEET & CAPITAL MANAGEMENT Summary Balance Sheet As at ($M) 31 Dec 2019 30 Jun 2019 • Refer to slide 17 for Net Cash analysis. Cash 37.0 43.8 • Refer to slide 18 for analysis of contingent Net Working Capital 0.3 0.8 consideration including maturity profile. Other Assets 3.1 2.7 • Interim di
Slide 19: Balance Sheet & Capital Management: Leverage
BALANCE SHEET & CAPITAL MANAGEMENT Leverage As at ($M) • Net Cash of $12.5m (30 June 2019 - $9.5m) at 31 Dec 2019 30 Jun 2019 balance date. Cash 37.0 43.8 • Balance sheet retains flexibility to pursue further Hire purchase liabilities - (0.5) acquisitions enhancing geographical presence in hubs or e
Slide 20: Contingent Consideration
BALANCE SHEET & CAPITAL MANAGEMENT Contingent Consideration – movement during period ($M) Contingent • Recognised contingent consideration relating to Consideration both the Eastwick Communications and Orchard Opening 1 July 2019 (at present value) 33.8 Marketing acquisitions. FX revaluations/ prese
Slide 21: Cash Flow & Working Capital
CASH FLOW & WORKING CAPITAL Half year ended 31 December ($M) 2019 2018 Operating EBITDA 11.0 10.0 • Small working capital unwind in the period however working capital remains comparatively Right-of-use asset depreciation charge 2.4 - low. Movement in working capital 0.4 (0.9) • Cash conversion at 10
Slide 22: AASB Transition
AASB 16 TRANSITION Effective 1 July 2019 Single application of leases with no distinction between finance and operating leases. Impact for the Group is in relation to its property leases. All leases are recognised on balance sheet with exceptions for short term leases and low value leases. Right of
Slide 23: AASB Transition: Reporting changes
AASB 16 TRANSITION Reporting changes Fundamental shift in the way results are reported however no economic impact to the Group, its cash flows or shareholder value. Income statement presentation: Operating rental expense (in occupancy costs) of $2.8m replaced with right-of-use depreciation asset cha
Slide 24: Disclaimer
DISCLAIMER This document has been prepared by Enero Group Limited (Enero) and comprises written materials/slides for a presentation concerning Enero. This is not a prospectus, disclosure document or offering document. This document is for information purposes only and does not constitute or form par