Thank you for standing by, and welcome to the Enero Group Limited FY 2022 Full Year Results Webcast. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Brent Scrimshaw, Chief Executive Officer. Please go ahead.
Thank you very much, and good morning everyone. Thank you for joining CFO Carla Webb here and myself for the Enero Group FY 2022 results conference call. Firstly, I'd like to begin by acknowledging the traditional custodians of the land on which we work, the Gadigal people of the Eora Nation, and pay our respects to their elders past, present, and emerging. Now, the agenda for today's call is outlined on slide two. Firstly, I'll provide an overview of Enero's business performance, covering the record financial results we're delivering today. Carla will then take you through the group financials, and I'll return and provide some deeper insight into how Enero is well-positioned to continue to grow. We then look forward to taking your questions at the conclusion of our presentation. Moving on and starting with our business performance, on slide four.
The strong financial performance we've delivered in FY 2022 is a direct result of the deliberate and focused execution of our operating strategy. Pleasingly, our growth was supported by our well-diversified revenue base around the world and across our portfolio, with all businesses in the group contributing profit. In addition, we also continued to refine our portfolio throughout the year with the acquisition of ROI DNA in the United States and GetIT in Asia-Pacific via Hotwire, while also divesting of The Leading Edge and The Digital Edge businesses, which no longer align with our strategic direction and our ambition as a global creative technology company. In FY 2022, revenue grew by 20%, continuing our strong track record of sustainable growth.
This included the brand transformation segment revenue up 11% to AUD 106.7 million, while our creative technology and data segment was up 34% to AUD 86.7 million. Overall, we improved our operating EBITDA margin by 380 basis points to 32.2%. Turning now to slide five, where our FY 2022 results continue to build on our strong trajectory of revenue and EBITDA growth over the past five years, taking into account our 51% economic interest in OBMedia. Our net revenue CAGR of nearly 13% has included both organic and inorganic growth. An operating EBITDA CAGR of 32% has been delivered over that period, with operating EBITDA margin expansion underpinned by growth from higher margin businesses and an increasingly efficient operating cost base.
Turning to slide six, which shows Enero's financial highlights for the year, which is slightly above the guidance we provided on June 8. Net revenue increased 20% to AUD 193.4 million, and operating EBITDA was up 36.4% to AUD 62.2 million, noting that the actual growth rate here is 14.1% if you adjust for JobKeeper in FY21. Net profit growth of 18.8% to AUD 27.1 million was impacted by a higher tax rate and increased non-controlling interest due to the strong growth in OBMedia. Lastly, a final dividend of AUD 0.065 per share fully franked has been declared, representing a payout ratio of 43%. This takes our total dividend for FY22 to AUD 0.125 per share.
Turning to slide seven, which shows Enero's consistent growth across our business segments over time. Brand transformation net revenue has grown at a four year CAGR of 5.2%, while operating EBITDA has grown by 9.9% per annum. The four year revenue CAGR delivered by the creative technology and data segment is an impressive 40% in terms of, net revenue, as I mentioned, and 81.6% at the operating EBITDA line. On slide eight, we've broken down our FY 2022 performance now by segment for the first time. Brand transformation achieved 11.3% growth in net revenue to AUD 106.7 million and an increase in operating EBITDA of 13.6% to AUD 24.2 million.
The strong growth was driven by Hotwire's differentiated reputation-to-revenue service offering, which is resonating across all geographies and also reflects a strong performance, particularly in the first half for creative agency BMF. In our creative technology and data segment, revenue was up 34% to AUD 86.7 million, and operating EBITDA grew 52.8% to AUD 48.6 million. This was driven by the ongoing high performance of programmatic marketing platform OB Media, as well as strong growth in Orchard's healthcare business in Australia and additional key wins in the consumer division of the business.
While corporate costs as a percentage of revenue have continued to decline over time through economies of scale, in FY 2022, costs of AUD 10.6 million were up from AUD 7.5 million in the prior corresponding period due to investment in new capability to support our global growth, group system implementations, travel that pleasingly reconnected us to our teams around the world, as well as SAR, or share appreciation rights program. On slide nine, we demonstrate the diversification of our revenue streams and the longevity of our client relationships.
Our revenue continues to reflect our focus and is well diversified by industry with our largest categories of information technology and digital media. If we double-click into this technology-based revenue, we're largely operating in the B2B marketplace, and we're well-positioned with a relevant offering to capture opportunity in growth segments, including cloud computing, cyber security, and digital transformation. In terms of geographic diversification, nearly 60% of our revenue is now delivered offshore, so that's outside of Australia. Our sticky services and strong and deep client relationships continue to drive repeatability in our revenue. With 66% of our clients having been within the Enero Group family now for 4+ years and almost half at six years or longer, which is a great insight into the relationships we enjoy. Slide 10 provides a high-level summary of the achievements of our brand transformation segment during the year.
Starting with Hotwire, who have consistently delivered against their vision to be the preeminent global tech communications consultancy operating at the speed of tech. During FY 22, we deepened our reputation, relationship, and revenue services. We deepened that offering to the marketplace, and we captured the global digital transformation opportunity as we completed the full integration of the McDonald Butler team out of the U.K. The addition of ROI DNA in the USA and GetIT's performance marketing capabilities in Singapore, India, Malaysia, and Japan provide a truly global network for the Hotwire Group from July 1 this year, as well as a platform for owned office expansion into Asia-Pacific for the very first time. Onto BMF, which is a globally renowned creative agency, famous as the home of the long idea and their commitment to enduring, effective, and emotive end-to-end ideas.
Creating some of Australia's most high-profile and talked about campaigns in FY 22, and might I add, celebrating its 25th birthday. BMF delivered its best year in the last six years, led by the creation of the First Things First COVID vaccine campaign for the Australian Government, and was also named the third most effective creative agency in the world by WARC Creative 100. That's an amazing achievement for BMF on the global stage. Both Hotwire and BMF experienced double-digit top and bottom-line growth, with margin improvement during the year. They were also the recipients of numerous other prestigious industry awards, demonstrating the success of their work and the resonance of that work around the world during FY 22. Now moving to creative technology and data on slide 11.
OBMedia deepened its AI and its automation skills to enhance overall campaign efficiency and its effectiveness in FY 22. OBMedia experienced a 120% increase in customers delivered to advertiser web destinations, and a 30% improvement in traffic conversion, which is a remarkable achievement by the team year-on-year. Throughout FY 22, OBMedia also experienced strong growth from the continued enhancement of its media buying capabilities, machine learning, and an improvement in its data science capabilities. Additionally, the OB team made some strategic investments in a number of key new hires to fuel the business. Orchard delivered both revenue and EBITDA growth in FY 22, with margins consistent year-on-year. Significant highlights included client wins such as Epson, Tourism Tasmania, and amaysim, which is Australia's fourth largest telco. In addition to the continued strong performance from the Australian healthcare business unit.
Orchard was also the most awarded agency at the 2021 PRIME Awards, reflecting its innovative thought leadership in the healthcare marketing space. That's it from me. I'll take a little break. With that, on slide 12, I'll hand over to Carla, who's gonna run us through the group financials for FY 2022.
Thanks, Brent, and thanks everyone for joining the call today. I'll begin with a profit and loss summary on slide 13. It's worth noting that OBMedia, for which Enero holds a 51% interest, has been consolidated in the accounts. Enero Group reported net revenue of AUD 193.4 million, which reflected year-on-year growth of 20%, demonstrating ongoing strong momentum. Staff costs of AUD 111.7 million represented a ratio of 58% of revenue, which improved from 61% in FY 2021, even after our investment in OBMedia. While staff costs rose 13.6% in the current year, a reduction in the staff cost ratio was achieved given the increase in global headcount was relatively low as compared to the revenue growth.
The operating cost ratio to revenue, including right-of-use asset charge, reduced to 10% from 11% in the prior year. Overall operating costs rose due to travel expenses, increasing as COVID-19 related restrictions eased and staff in offices around the world sought to reconnect after several years apart. Investment also continued in implementing our group-wide HR and finance systems. Right-of-use asset depreciation of AUD 4 million reduced year-on-year due to the sale of Frank in the prior year. Looking forward to FY 2023, we expect this charge to increase slightly to FY 2021 levels to account for the small footprint of GetIT offices. ROI DNA will continue to remain a virtual office. Operating EBITDA of AUD 62.2 million increased 36.4% year-on-year.
Net finance costs of AUD 1 million reduced year- on- year due to lower present value interest charges relating to contingent consideration payments for Orchard acquisition. In FY 2023, we expect these costs to increase to reflect the present value interest charges on contingent consideration for our recent acquisitions and costs associated with our new debt facility. Our effective tax rate for the year was 25%, up from 21% in FY 2021 due to Australian tax losses being fully recouped. For FY 2023, we expect a similar tax rate of 25%. Non-controlling interests of AUD 16.8 million increased from AUD 10.1 million in FY 2021, reflecting the minority interest associated with OBMedia. Net profit after tax, before significant items to equity owners and after non-controlling interest was AUD 27.1 million, up 18.9%.
The final point to note is that the depreciation of the Australian dollar had a positive impact of AUD 1.6 million on net revenue and AUD 0.9 million on operating EBITDA. The balance sheet on slide 14 highlights the strong financial performance of the group. Our increased cash position of AUD 98.7 million was due to a debt drawn of AUD 36.3 million for 30 June 2022, and consistent strong cash collection at the period end, offset by higher tax payments following utilization of tax losses in Australia. Debt drawn and held in cash at year-end was subsequently dispersed on 1 July for the acquisition of ROI DNA. With strong balance sheet, we retain flexibility to pursue our growth plans as we capture opportunities in high-growth verticals while navigating current macroeconomic conditions.
Company's strong financial position has enabled declaration of a fully franked final dividend of AUD 0.065 per share, payable in October 2022, consistent with a payout ratio of 43%. The franking credit balance at 30 June was AUD 9.9 million. The details of contingent consideration are outlined on slide 15. The contingent consideration balance of AUD 10.1 million relates to MBA acquired in April 2021, which has a maturity profile over FY 2023- FY 2025 years. The final contingent consideration relating to Orchard Marketing was paid in September 2021. Adjusting for contingent consideration, net cash was AUD 52.3 million at 30 June 2022, an increase of AUD 30 million as at 30 June 2021. Contingent consideration payable for ROI DNA and GetIT acquisitions have not been disclosed in these tables, given the acquisitions occurred subsequent to year-end close.
Enero's cash flow on slide 16 highlights the strong cash conversion of our model. Cash conversion of EBITDA was 96%, reducing as expected from 121 in FY 2021 due to unwinding of working capital. Gross cash flow increased to AUD 63.7 million, up from AUD 60.3 million in the prior year. Operating cash flow of AUD 48.8 million was down from AUD 53.2 million, reflecting higher tax paid. Tax payments were made in all jurisdictions, with the increase predominantly relating to the U.S. and Australia, where operations commenced paying tax in the second half of FY 2021. After cash-funded CapEx and lease payments, free cash flow was AUD 42 million. I now hand back to Brent to cover the company's growth strategy and outlook.
Thanks for that, Carla. I'll continue now. Just turning everybody to slide 18 in order to provide a little bit of deeper context for the continued delivery of our strategy around the world. Enero will continue its expansion towards serving the digital transformation and the analytical needs of our clients globally, which we believe represent significant incremental opportunity for the group. With a clear focus on healthy and growing segments, our brands have built deep industry experience and are well-positioned within each of those segments, and we'll continue to refine our offering with modern capabilities. I'm now gonna cover each of these themes in slightly more detail. If you turn to slide 19, as we continue to broaden our offering to include digital transformation and analytics services, it's important to understand the size of the prize.
Historically, our addressable market of $488 billion covers the traditional marketing services industry. Traditional concepts like advertising, media buying, PR, content, and digital marketing. As we rapidly evolve our capabilities to serve the needs of forward-thinking brands, we also unlock the digital transformation and analytics marketplace over time, which then, combined with the marketing services market, provides a total addressable market of $1.2 trillion. Lots of room for potential future opportunity. On slide 20, you can see that our businesses are operating in segments that are forecasted to grow into the future. Programmatic advertising is expected to continue along its CAGR of 23%. Data analytics and marketing automation spend are both forecast to continue to grow at 13% per annum over the next five years.
Healthcare marketing and life science budgets grew strongly in 2021, while the vast majority of advertisers expect to maintain or increase their spend in 2022. Clearly, our strategy of building deep expertise in growing verticals is paying off, and we continue to remain relentlessly focused here in order to win. On slide 21, we provide an insight into clients' needs for integrated services, but most importantly, not at the expense of deep vertical expertise, which is now reflected in our operating model. Today's CMOs are tomorrow's chief revenue officers or chief growth officers, and they're looking for a single integrated provider that knows their business inside out.
That portfolio approach we have and subject matter experts enable us to deliver integrated and relevant functional capabilities, but combined with deep vertical expertise and industry-specific experience. On slide 22, given the importance of offering deep vertical experience, we continue to invest in modern capabilities to stay ahead of the curve. We acquired ROI DNA and GetIT to accelerate the revenue delivery services for our clients. Connecting revenue delivery capabilities to Hotwire's reputation and relationship skills in B2B tech is a transformational play for the Hotwire business globally. ROI DNA is a leading B2B digital marketing agency in the U.S., while GetIT is APAC's leading B2B technology marketing agency. Now in addition, we've also acquired an impressive list of technology-led clients such as AWS, Cisco, Elastic, Google Cloud, and of course, that complements Hotwire's existing industry penetration.
It's important to note that both acquisitions will be accretive to earnings from year one and the earn-out is self-funding and depend on management hitting specific earnings targets over a three year period. On slide 23, B2B tech marketing continues to be a growth business. The historic net revenue of ROI DNA, GetIT, and McDonald Butler Associates, which you'll remember was acquired in 2021, has grown at a CAGR of 25%, establishing a strong platform for us to build from. These acquisitions have materially changed Hotwire's business to now primarily be focused on reputation, relationship, and revenue. It's that combined contribution that can be seen on the right side of this slide, which shows a pro forma of Hotwire results combined with the three acquisitions, ABM services, and their contribution. Lastly, Hotwire's global reach has been substantially expanded.
On slide 24, you can see that the business now employs more than 500 people through 15 owned offices operating in 11 countries, and that's excluding our partner network. This global geographic presence combines scale and the new capabilities I've just spoken about and enables the Hotwire group to serve significantly larger global RFPs where they were previously unable to compete. Turning to slide 25 and our FY 2022 key strategic priorities. In 2022 we continued to create a home for world-class talent with onboarding of key roles in OBMedia, Orchard, and BMF. We're excited to welcome the teams at ROI DNA and GetIT into the future. Our NPS scores have remained consistently strong despite the challenge of a highly competitive global hiring environment.
As we've discussed this morning, our Hotwire and MBA proposition from 2021 has now delivered joint wins and cross-selling in the UK and Europe. While ROI DNA and GetIT have added sophisticated performance marketing capabilities in North America and APAC into the future, which should position us well in FY 2023. Our relentless focus on improving productivity and profitability through the implementation of technology and simplified and streamlined processes is reflected in the strong financial results we've delivered today. We're particularly pleased to continue to deliver on our goal to maintain our already industry-leading margins with group earnings growing faster than revenues. Lastly, our ambition to create an innovation engine within Enero in order to deliver new business opportunity is supported by an ongoing assessment of technology and data opportunities in today's global marketplace, combined with the flexibility to support our strategic plans.
Moving to slide 27 and turning to our key priorities for FY 2023, which we've broken down into five key areas. Firstly, is a primary focus on our core. We'll continue to drive initiatives that strengthen and accelerate our existing businesses, as well as for the first time, develop a clear ESG approach that underpins our business framework. Secondly, it's all about capability enhancement. It's critical for us to continue to develop and invest in new capabilities. We have to stay relevant, and we need to ensure that that relevance, is maintained and even exceeded in a dynamic and changing global marketplace. Thirdly, it's critical we integrate and most importantly commercialize our recent investments. We'll complete the integration of a clear global go-to-market strategy for Hotwire as part of our recent acquisitions and remain relentlessly focused on driving commercial success.
We'll continue to drive efficiency through systems integration and simplify processes that improve our productivity and of course, diligent cost management to preserve profitability. Finally, as always, as a people business and a people-led portfolio, we strive to be a magnet for talent. We'll continue to lead a post-COVID workplace model for the future through both global L&D and further diversity, equity, and inclusion initiatives around the world. Turning now to slide 28 to provide you with a trading update. While it's still very early in FY 2023, in fact, the first five 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 conditions in the U.S. and the U.K. that may contribute to slower client decision-making.
We remain focused on managing our staff cost ratios and continuing to achieve strong margins across our diversified portfolio of businesses and geographies. Enero is well positioned for organic growth in FY 2023 along, of course, with the full year benefit of ROI DNA and GetIT as part of the Hotwire group. That concludes our prepared remarks this morning. We thank you for your attention, and I'll now hand it back to the operator for any Q&A.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Hayden Lieu from Evans and Partners. Please go ahead.
Hi, Brent and Carla. Thanks for taking my questions, and
Hi, Hayden.
Congratulations on the great set of results. Hi, Brent. Maybe if I could just start on the trading update. I mean, you called out continued momentum in the first five weeks and a robust pipeline. I mean, how much visibility do you have on the pipeline, and how does this sort of pipeline look now versus, say, a few months ago, compared to six months back? Are you able to give some color on that? Thanks.
Yeah. Well, obviously, it's only been five weeks, so in terms of being able to provide more insight to some degree, clearly we've done that today. In terms of pipeline, for us, you know, it is a robust pipeline across the business, and the brand transformation segment continues to see that visibility. Probably, you know, one to two months out is the normal visibility that we would have on that pipeline. For us, you know, we remain confident about the robustness of that in the period of the next couple of months.
Great. Thanks, Brent. Maybe on the acquisition pipeline, I mean, you just made the two pretty significant acquisitions of ROI and GetIT, but still got plenty of balance sheet capacity left, with net cash of AUD 50 million. Is M&A still a priority for the group, or are you focusing on the integration of those two businesses?
Yeah, I think there's two key priorities that I touched on as part of, you know, FY 2023. Number one was around focusing on the core. Clearly, you know, our ability to continue to invest and identify opportunities within our core businesses is, you know, first on the list of our priorities. Then secondly, to your point, you know, we've made some significant investments, and we are relentlessly focused in the first five weeks and from an ongoing perspective to commercialize those. We've brought, in fact, even in that short period of time, our leaders together in San Francisco and here in Australia, so that's ROI, McDonald Butler folks who are now Hotwire marketing UK, and GetIT together with the Enero team.
We've been able to move rapidly to focus on what our global go-to-market offering looks like. In fact, we've even had two global RFPs land, you know, on our desks as a result of these acquisitions, and significantly, even two joint wins between GetIT and Hotwire here in Australia already in that first five weeks. I guess to answer your question, our focus is on the core. It's around commercializing those investments. Of course, we will continue to maintain close connections to global marketplace to be opportunistic with regards to any investments that we think can enhance the business over time.
Makes sense. Not sure if I'm reading too much into it, but just assume, given you've taken out the debt for ROI, for the ROI acquisition, but still got a bunch of cash on the balance sheet, just assume you're sort of keeping the firepower for further acquisitions. Is that sort of fair to say?
Hayden, I think we're remaining flexible. We've got cash, and you can see the levels we've got at the end of the year. I think we've consistently talked about having a bit of flexibility. In the current macro environment, we retain that flexibility. It's not to say where that'll get spent at this point, but it just gives us options.
Yeah. Okay, great. Maybe just on the balance sheet again, do you see any scenario where Enero will possibly be in a net debt position at all?
No, not at this point in the midterm.
Okay, great. Thanks. Maybe just lastly on the acquisitions. I mean, you highlighted, Brent, the full year benefit expected from the contribution in FY 2023. Are you able to quantify the expected contribution? I know ROI has a similar headcount to Hotwire North America. Is it sort of fair to assume a similar profile to the U.S. agencies business? Able to give any color on that? Thanks.
Well, maybe I'll talk to the strategy, and Carla may be able to talk to some of the financials around that. But both today and in other analyst calls at the time of the acquisitions, you know, we've disclosed some further historical performance, I think on slide 23 today, and contribution to Hotwire. You get a sense of, you know, the glide slope of the combined performance marketing capabilities over time, which I think I called out as, you know, plus 25% CAGR as you combine those three businesses together.
I think you also have some insight into headcount within that business, which normally forms a little bit of a proxy for how you would think about the size and scale of the ROI opportunity, in this case being the largest of those acquisitions. From a strategy point of view and from a way to think about those businesses operating together in 2023, maybe that's a couple of data points to think through and to connect on. I don't know if, Carla, you have anything you want to add there.
Yeah, I guess, Hayden, the other part is you've obviously at points in time looked through our US geography in terms of your assumptions around OB and Hotwire US. I guess one of the important data points in a people-led business is giving you a sense of the headcount of that business when acquiring it. Staff ratios that we follow is again a bit of a proxy to understanding and looking through at that business in terms of how you would expect those earnings to look in comparison to a Hotwire US business. Probably the other point I'd note.
Thanks.
Thanks, Hayden.
Your next question comes from Andrew Johnston from MST Access. Please go ahead.
Good morning, Brent and Carla. Congratulations on the result. It's good to see the strategy that I think was put in place when you joined, Brent. Good to see that's really coming through this year, and probably the first year we've seen that really start to come together with both the divestments of a couple of businesses and the acquisitions on the first of July. So if I can just focus in on a couple of things. Brent, the traffic conversion metric for OBMedia. Can you just comment on that and what that actually means?
Well, it means that, the conversion of the traffic that OBMedia deliver through their programmatic platform to advertise at destinations has grown.
In other words, the difference between the number of ads they bid on and win, and then the number of ads that people click through on. Is that sort of what?
It's actually consumers that click through to the end destination. If you were to measure that at any point in time, there's a you know dropout rate or conversion rate.
Sure
of consumers that don't follow the entire process. What that in effect means is that, you know, consumers that are now following through to the entire end point of the process have improved by 30%, which means that you've got more high-intent traffic being delivered, which in turn obviously delivers better results for customers. That's really how you should think about that traffic conversion statistic.
Wow. That could well be the most extraordinary number in your result, actually. That's a huge increase in conversion. I'm sure that's done.
Yeah. As you know, Andrew, that's been driven by, you know, investments that we've made over the last two years in terms of both technology, continued focus around optimization of our platform and how it, in real time, provides intelligence for better decision-making.
Yeah
the more you can optimize the traffic that you're driving, you know, through to drive a better result for clients, the better that conversion. Obviously, the better results that you can deliver, which in turn is a self-fulfilling, you know, cycle.
Yeah, absolutely. No, that's a great result. Carla, can I just focus in on the cash conversion rate of 96%? That's pretty impressive cash conversion number. I can't recall what that was last year, but what's been driving that, and what's your outlook for that going forward?
Well, that's a good question, Andrew. I'm just trying to remember quickly what it was last year.
I think it's 121. Something like that.
Look, a lot of it is translating through from OBMedia's results. That's probably the primary driver of it.
Okay.
I guess the profile within the agencies is reasonably similar.
Okay. All right. If I can just come back to the balance sheet. Now, just a really rough back-of-the-envelope measurement of what that balance sheet actually looks like now. We've got AUD 52 million cash, net cash on the balance sheet. That's excluding the contingent considerations relating to Orchard, is it? With the acquisitions of those ROI DNA and GetIT, there's total contingent consideration of up to AUD 53 million spread over about three years. Roughly, if that was to play out evenly over three years, that's what? AUD 16 million or AUD 17 million odd. But that compares to a free cash flow this year of about AUD 42 million. Even after that contingent consideration, you're still looking at what?
20-odd, AUD 20-AUD 25 million of free cash flow, assuming that those three businesses perform to what's expected and you make those and that contingent consideration spread over three years. Is that sort of the right way to be thinking about it?
Obviously, there're assumptions in there around it being evenly spread, but I guess in following the logic through.
Yeah
that you've suggested, yes. That's the way of looking at it.
Okay. Yeah, okay, that's great. No, I mean yeah. Obviously, there's some—it's a real back-of-the-envelope look at it. All right. Terrific. Just lastly-
Actually,
Yeah
Andrew, sorry, just reflecting back on Hayden's question as well and thinking about that timing of contingent payments and how they phase throughout a period, just reflecting back on that net debt conversation. Because I guess depending on the timing of when a contingent consideration fell, you could have points in time where we did move into a net debt position. That would be reflective of the timing. That's obviously a best guess on those contingent payment estimates. Depending on what they ended up being and how those fell within the years, the phasing of that could impact us moving from a, you know, net cash position to debt position.
That could actually be a very good thing. If those businesses shoot the lights out, and you have to pay out more of that amount. I don't know how it's structured, but you have to pay out more of it earlier. It pushes you into a net debt position. That means those underlying businesses are actually performing much better, much better. If that's the cause of it, bring on the net debt.
Well, yes, that's the main thing.
Yeah. Okay. Finally, on the Australian margins, looks like there was a bit of a slip in the margins from the Australian business. Did I read that correctly?
Just quickly.
Excluding JobKeeper in Australia, margin went from 18.6% in 2021 to 20% in FY 2022.
I think you're referring to.
Okay. Yeah.
Slide 54.
Yeah.
We have got those decks. We have got those slides at the back of the deck, so you can still keep tracking by geography. We've continued to disclose the impact of JobKeeper and TLE so that you can see what Australia as a geography did. Brent's right.
140 basis point growth.
Yeah. No, correct, Brent. I saw the JobKeeper there, then forgot to include it in my numbers. There's actually an ex-JobKeeper. There's actually improvement in Australian margins.
Yes, also, the divestment of TLE and TDE as well are part of that.
Right. Okay. Terrific. Got it. Okay. Thanks very much. Congratulations again.
Thank you.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from John Zemek from CCZ. Please go ahead.
Hi, Brent. Hi, Carla. Great detail. Thank you very much. Great result. Just a question on data privacy and OBMedia's great performance. I mean, you talk about its advantage that it's had because it's got first-party data supplied to the advertisers and that's probably been a tailwind given the changes that happened a year or so ago. Is that still a tailwind for you given you know the sort of things that have been screamed out from Jeff Green from The Trade Desk criticizing Google with its continuing to kick down the road the closure of third-party cookies? Is that? The question is really just is that still a tailwind for you and you know how do you see that playing out for you?
I would say it's been a small tailwind. You know, we continue to see some benefit of that. Clearly, it's not the only driver of OBMedia's performance, but as you know, based on them operating in a cookieless world and working with search engines around anonymized data, there's definitely been some benefit there. But I'd be, you know, careful to peg their performance specifically to that benefit.
Okay. Thank you. Just one other little bit, just related there. Once again, this relates to The Trade Desk talking about, you know, the sort of growth and the tailwinds they expect from the move more into Connected TV as broadcast TV declines. The advertising opportunities are so much better for those with better performance measurement, et c. Do you see that as a similar tailwind for you, for your agencies and in working with your agencies?
I think it just changes the product, the creative product or the creative execution of the product. You know, if you're thinking or referencing specifically BMF or Orchard or even Hotwire to some degree, you know, the content and creative ideation that they provide clearly in a modern world needs to be made for and relevant in many, many different media channels. You know, in years gone by, that was very much focused around broadcast. As audience have shifted to more on-demand viewing and/or many other digitally led channels, you know, the creative optionality of their ideas has needed to be expanded accordingly. You know, that's been happening for a number of years.
I don't see it being, you know, any sort of hurdle to the way that we think and work, but it does mean that the capability and the types of skill sets that we have within those businesses have consistently changed to be ahead of, you know, demands from a client needs with regards to formats of creative execution, and that is part of us continuing to invest for modern marketing capabilities that clients really are looking for.
Great. Thanks very much, Brent.
Thanks, John.
There are no further questions at this time. I would like to hand back the conference to Mr. Scrimshaw for closing remarks.
Okay. Well, thank you. That concludes our conference call today. As I mentioned, we're obviously thrilled with the numbers and the performance of the business over the last 12 months, and we thank you all for your attendance at today's call.
That does conclude our conference for today. Thank you for participating. You may now disconnect.