Enero : Half Year Results Announcement and Presentation

Enero Group Limited

ABN 97 091 524 515

Level 2, 100 Harris Street

Pyrmont NSW 2009 Australia

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ASX ANNOUNCEMENT

2022 Half Year Results Announcement

Enero growth momentum continues with FY22 H1 revenue up 15% and Operating EBITDA growth of 23% (29% on an underlying basis).

17 February 2022: Enero Group Limited (ASX: EGG) today announced its results for the half year to 31 December 2021.

Enero reported net revenue of $93.2 million, up 15.1% on the prior year and Operating EBITDA of $29.9 million, up 23.3% on the prior year. Adjusting for the JobKeeper subsidy in FY21 H1, underlying Operating EBITDA grew 29%. Net profit after tax was $13.7 million and grew 3.3% on prior year. A dividend of 6.0 cents fully franked was declared by the Board.

Enero's underlying results (excluding significant times) ²

($M)	FY22 H1	FY21 H1	% Change

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Net Revenue

Operating EBITDA¹

Operating EBITDA margin

Net profit after tax attributable to equity holders

Earnings per share (EPS)

93.2	81.0	15.1%
29.9	24.3	23.3%
32.1%	30.0%	210bps
13.7	13.3	3.3%
15.7 cents	15.4 cents	2.0%

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Notes:

1. Operating EBITDA is net profit before interest, taxes, depreciation of plant and equipment, amortisation, impairment of intangibles, contingent consideration fair value gains/losses and gains/losses on disposal of controlled entities. Operating EBITDA includes depreciation of Right of Use Assets recognised in accordance with AASB16. Operating EBITDA is the primary measure used by management and the directors in assessing the performance of the Group. It provides information on the Group's cash flow generation excluding significant transactions and non-cash items, which are not representative of the Group's ongoing operations.
2. The results announcement and attached presentation includes the following measures used by the Directors and management in assessing the ongoing performance and position of the Group: Operating EBITDA, NPAT before significant items and EPS before significant items. These measures are non-IFRS and have not been audited nor reviewed. Refer to attached results presentation for detailed analysis on significant items and a reconciliation to statutory results.

Enero Group CEO, Brent Scrimshaw said: "Enero Group continues to deliver a consistent and impressive growth story, building on FY21's strong base and benefiting from the establishment of our new operating framework and significant progress in new client wins around the world. We are particularly pleased to deliver on our commitment to maintaining Enero's industry-leading margins, with group operating EBITDA margins now at 32.1% in H1 FY22 compared with 30.0% in FY21 H1.

"Enero Group has accelerated its reputation for industry innovation and creating a progressive home for world class talent with the acquisition of a number of key hires in the USA at OB Media, and in Australia at Hotwire, Orchard and BMF. Our NPS scores continue to grow, despite the challenge of a highly competitive hiring environment, which reflects our commitment to our team and our high-performance culture. We are also proud that the creativity of our team is reflected in numerous global awards, most recently for creative agency BMF which was, in December 2021, named the most effective

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creativity agency in Australia and number three in the world by one of the most prestigious global rankings, WARC's Effective 100."

"In addition, we are seeing the benefits of our FY21 acquisition of McDonald Butler by Hotwire UK, with its fully integrated client proposition and suite of services delivering new business wins and cross-selling opportunities. We have a full pipeline of M&A activities, and this important priority is supported by a flexible balance sheet with net cash of $47 million, adjusted for contingent consideration," said Scrimshaw.

Business Operating Performance:

Net Revenue increased 15.1% and Operating EBITDA was up 23.3% on FY21 H1. International markets represented 56% of the Group's Net Revenue and 71% of the Group's Operating EBITDA on an economic interest basis, up from 55% and 65% respectively in the prior period. Despite the ongoing backdrop of COVID conditions across our global network, and the impact of Omicron lockdowns, we delivered pleasing results across all three geographic regions.

USA

The USA business continued to benefit from the global acceleration in technology adoption and industry transformation with a 37.5% increase in net revenue and 47.4% growth in operating EBITDA on a reported basis. Performance on a constant currency basis was even stronger, with revenue and operating EBITDA up 39.1% and 49.1% respectively.

On an economic interest basis, which adjusts for Enero's 51% ownership of OBMedia, revenue increased 32.6% and Operating EBITDA grew by 42.6%. OBMedia continues to benefit from a structural shift in consumer behaviour to digital channels, contributing to operating EBITDA margins increasing from 47% to 50% during the first half.

Hotwire benefited from its high-quality technology client base, with positive momentum in new client wins and organic growth from its existing client portfolio. New client wins included Peloton, Sage and SoundHound.

Australia

The Australian business delivered net revenue growth of 8.2% and operating EBITDA reduced by 6.4%, reflecting the benefits of the JobKeeper subsidy received in FY21 H1. Adjusting for JobKeeper, Operating EBITDA increased 9.8%, and margins increased to 20.3%. BMF benefited from its exposure to the consumer and government sectors, while Orchard delivered organic growth from its healthcare client base. Momentum with new clients continued, notably Orchard's win of the Tourism Tasmania digital transformation account which is expected to contribute in H2.

UK/Europe

The UK and Europe reported a 6.8% decline in revenue and 7.5% lower EBITDA reflecting the impact of the sale of Frank PR in March 2021 and a challenging environment, with COVID uncertainty remaining in the UK and key continental European markets. On a continuing business basis, revenue increased 12.5% and Operating EBITDA by 22.5%. Tech sector specialist McDonald Butler was acquired in April 2021 and is now fully integrated into Hotwire, with cost efficiencies from the merger underpinning an increase in operating EBITDA margins from 20.7% to 22.5%.

Balance Sheet and Cash Flow:

Operating cash flow for the half year was $25.3m and the Group is in a Net Cash position (allowing for contingent consideration payable) of $47.0m as at 31 December 2021.

Dividend:

The Directors declared an interim dividend of 6.0 cents per share, fully franked. The interim dividend will have a record date of 25 February 2022 and a payment date of 16 March 2022.

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Trading Update:

• Enero continues its track record of sustainable revenue and EBITDA growth.
• FY22 H2 has started off with strong growth in the US and a solid performance in Australia and UK/Europe.
• We remain focused on maintaining Enero's high margins across our strong and diversified portfolio.
• A strong pipeline of M&A opportunities remains a priority in FY22 to continue the growth and transformation of
  Enero's portfolio.
• There remains ongoing uncertainty around COVID conditions globally with industry-wide challenges around hiring which may lead to wage cost pressure. With travel opening globally, discretionary travel costs are expected to increase from FY22 H2 onwards

Investor Conference Call details

An investor webcast conference call with Brent Scrimshaw (CEO) and Carla Webb-Sear (CFO) will be held today at 9.30am AEDT.

Participants may register here. Registered participants will be able to participate in the Q&A.

Unregistered participants may join here. Unregistered participants will not be able to participate in the Q&A.

This announcement was authorised for release by the Board of Directors.

About Enero:

Enero Group is a creative technology company operating a global collective of marketing and communications specialist agencies listed on the Australian Securities Exchange (ASX). Its portfolio includes: digital agency Orchard; creative agency BMF; brand, marketing and PR comms consultancy Hotwire; programmatic marketing platform OBMedia; issues management comms advisory CPR; and strategic data consultancies The Leading Edge and The Digital Edge.

www.enero.com

For further information, please contact:

Investors:	Media:
Jolanta Masojada	Abigail Dawson
Investor Relations	Group Communications Director
m. [phone]	m. [phone]
[e-mail]	[e-mail]

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Enero Group

FY22 Half Year Results

17 February 2022

Agenda

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Group Financials

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