for the year ended 31 December 2015 - ADvTECH Presentations/December 2015...annual financial results for the year ended 31 december 2015 ... 25 062 0 4 000 8 000 12 000 16 000 20 000

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ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2015

Accelerated growth – ACADEMIC EXCELLENCE

Introduction

Results

Financial highlights

Prospects

Questions

Introduction

Results


Prospects

Questions

`


OUR BUSINESS MODEL OF VALUE

ATTRACT

AND RETAIN

BEST STAFF

› Competitive rewards

› Great people

to work with

OUTSTANDING

QUALITY

AND VALUE

› Dynamic improvement

› Great service

› Relevance

SUSTAINED

INCOME AND

MARKET

LEADERSHIP

› Rewards to

stakeholders

› Community

engagement

STRONG DEMAND

› Great reputation

› Career success

› Employer recognition

› Alumni success

SUPERIOR RETURNS

RELATIVE TO PEERS

› Efficiencies

INNOVATION

INVESTMENT

`


OUR PEOPLEExco team

ROY DOUGLASChief Executive Officer

DIDIER OESCHGroup Financial Director

ALEX ISAAKIDISChief Executive Officer,Schools Division

FAY AMARALChief Executive Officer,Tertiary Division

LENN HONEYChief Executive Officer,Resourcing Division

FELICITY COUGHLANGroup Academic Director

JACO LOTZAfrica BusinessDevelopment Executive

ERIC SHIPALANAHuman ResourcesExecutive

GIDEON VAN NIEKERKProperties Executive

STEVEN VAN ZYLCIO Officer

Introduction

Results


Prospects

Questions

`


EXCELLENT RESULTSPerformance at a glance

HEADLINE EARNINGS PER SHARE

27%2014 : 7%

REVENUE

40%2014 : 9%

DIVIDENDS PER SHARE

29.5 cents2014 : 26.0

OPERATING PROFIT

75%2014 : 16%

`


EXCELLENT RESULTS

TOTAL ENROLMENT

43%2014 : 33 654

TERTIARY FULL-TIME ENROLMENT

21%2014 : 20 113

SCHOOL ENROLMENT

75%2014 : 13 541

EDUCATION SITES RESOURCING BRANCHES

92014 : 19

JOB CANDIDATES PLACED

3 7592014 : 3 182

2015 : 48 053

2015 : 96

332014 : 63

2015 : 23 721 2015 : 24 332

2015 : 28

SCHOOLS DIVISION

57% Revenue to R1.4 billion

85% Operating Profit to R299 million

`


SCHOOLS DIVISION

10

Market segmentation

Estimated fee

averagesPre-primary Primary College

Premium fee R35 000 – R70 000 R35 000 – R95 000 R60 000 – R120 000

Mid fee R20 000 – R35 000 R20 000 – R40 000 R30 000 – R70 000

Low fee <R15 000 <R18 000 <R20 000

`


SCHOOLS DIVISION

11

Competitive environment

ADvTECH

brandsPre-primary Primary College

Premium fee • CrawfordSchools™

• Centurus Colleges

• Maragon Ruimsig and

Avianto

• Charterhouse

• Trinityhouse

• CrawfordSchools™


• Maragon Ruimsig and

Avianto

• Charterhouse

• Trinityhouse

• Abbotts College

• CrawfordSchools™


• Maragon Ruimsig

• Trinityhouse

Mid fee • Founders Hill College

• GIS

• Maragon Olympus

• Maragon Raslouw

• Kathstan College

• Summit College

• Junior Colleges

• Founders Hill College

• GIS

• Maragon Olympus


• Summit College

• Founders Hill College

• GIS

• Maragon Olympus


• Summit College

Low fee • Maragon Edendale • Maragon Edendale • Maragon Edendale

`


SCHOOLS DIVISION

12

Academics

3 137total distinctions

2average

distinctions/candidate

1 728matrics

56

matrics

6 distinctions7 distinctions

51

matrics

8 distinctions

32

matrics

9 distinctions

11

matrics

10 distinctions

3

matrics

Government

NSC

ADvTECH

NSCIEB

ADvTECH

IEB

ADvTECH

Group

Matric pass rate 71% 99% 98% 99% 99%

`


SCHOOLS DIVISION

13

Beginning of 2015 (Pre-acquisitions)

4brands

6 schools 20 schools 11 schools 8 schools

45schools

13 900students

`


9schools

SCHOOLS DIVISION

14

Acquisitions

3 244students

IEB

Boarding

`


IEB

NSC

12 Maragon

schools

2 Charterhouse

schools

Cambridge

SCHOOLS DIVISION

15

Acquisitions

14schools

4 445students

`


3schools

SCHOOLS DIVISION

16

Acquisitions

Gaborone

International

School

1 900students

Cambridge

International

Entry into

Africa

(Botswana)

`


3schools

SCHOOLS DIVISION

17

Acquisitions

Kathstan

College 344students

* Boleng school rebranded

IEB

2schools

Trinityhouse*Northriding

56studentsIEB

`


SCHOOLS DIVISION2016

Capacity: Initial 150 Ultimate 1 300

2schools

95students

3schools

590students

Founders Hill

College

Summit College

IEB

NSC

`


SCHOOLS DIVISION

19

Current status

4

7

0

1

2

3

4

5

6

7

Begin 2015 Feb 2016

Brands

45

81

0

10

20

30

40

50

60

70

80

90

Begin 2015 Feb 2016

Schools

13 900

25 062

0

4 000

8 000

12 000

16 000

20 000

24 000

28 000

Begin 2015 Feb 2016

Students

`


SCHOOLS DIVISION

20

Capacity

13,5

23,725,1

16,0

28,229,9

20,5

35,4

38,0

10

15

20

25

30

35

40

Feb 2014 Feb 2015 Feb 2016

Students enrolled Built Capacity Ultimate potential site capacity

‘000

`


SCHOOLS DIVISION

21

Growth targets

R650mEBIT

40 000enrolments

R3bnrevenue

2020

TERTIARY DIVISION

19% Revenue to R982 million


`


TERTIARY DIVISIONGrowth

3 359 Students graduating

2 924 Graduates placed in 1st jobs through the Graduate Placement Programme

`


TERTIARY DIVISIONBeginning of 2015

*VEGA and DSSA share sites

18registered sites

24 332full-time students

7brands

`


TERTIARY DIVISIONThe IIE

South Africa's leading private higher education

institute

Curricula relevant to the modern world of work

Innovative and supportive teaching

methodologies

We focus on building student careers

THE IIE IS THE ONLY

SOUTH AFRICAN

EDUCATIONAL INSTITUTION

ACCREDITED BY

THE BRITISH

ACCREDITATION

COUNCIL (BAC)

`


TERTIARY DIVISIONRosebank College

Affordable

Quality, high demand qualifications

Employability

`


TERTIARY DIVISION

27

Rosebank College

7 593students

mega-campus

Braamfontein

`


TERTIARY DIVISION

28

Rosebank College

Blended learning

Digitally enabled

Enrolments:

418 students

Polokwane

`


TERTIARY DIVISION

29

Rosebank College

Polokwane

`


TERTIARY DIVISIONVEGA

Able to solve complex challenges with

innovative and meaningful business, brand and

communication solutions

Qualifications in brand building, creative

communication, and media

Masters level

Vega’s mantra – wisdomwithmagic –

communicates its belief in creative

strategic thinking

`


TERTIARY DIVISIONVEGA new campuses

Cape Town

Durban

Pretoria

`


TERTIARY DIVISIONVEGA

• D&AD – London, UK

Student exchange

• FONTYS University – Netherlands

• University of Art and Design in Offenbach - Germany

• TEDxVega

International agreements

• Loeries – 26 awards – Top honours

• Pendoring Awards – Silver

• Creative Brains – 1st and 2nd place

• Winner 2015 AdFocus Student of the Year Award

• Pencil Awards, D&AD New Blood Award

Awards won by students

`


TERTIARY DIVISIONVarsity College

Premium brand

Uniquely progressive approach to teaching,

learning and development

Student-centric approach

UNISA B.Ed.:

foundation, intermediate & senior

phase students

distinction rate of 54%

average of 3.4 distinctions per student

Faculties

• Humanities

• Commerce

• Social Sciences

• Information

Technology

`


TERTIARY DIVISIONBusiness School at Varsity College

Short learning programmes

Part-time study

Adult learning –

theory and practical application

`


TERTIARY DIVISIONForbes Lever Baker

Premier tuition support provider for the UNISA

accounting qualifications

Superb pass rate

95%pass rate for 2015

SAICA ITC board

exam achieved by

CTA students

FLB –

top Unisa CTA

level 2 student

in 2015

`


TERTIARY DIVISIONDesign School of Southern Africa

Vocational preparedness via academic

excellence and industry experience

Education in design

– graphic, fashion and interior

Well planned, contemporary design and, above

all, creative design – that’s our philosophy at

DSSA

Small classes allow for an inspirational,

adaptable and innovative learning environment

`


TERTIARY DIVISIONDesign School Southern Africa

1st

groupof Honours

degree students

graduated

• One of the top eight finalists at the

SA Fashion Week (SAFW) Student

Competition

• Winner, by public vote, of the 2015

MMT by Design Competition

• 2015 Gauteng Sansui Summer Cup

Young Designer Award

Student accolades in 2015

`


TERTIARY DIVISION

38

The IIE

Digitally enabled

blended learning

QR code

linked to social profile + CV

+ authenticated qualifications

LMSIIE Learn

Innovative

Enabler

Students Employer

Supported by

face-to-face

instruction

4 faculties

91 accredited

qualifications

11 accredited

distance qualifications

5 new qualifications

`


TERTIARY DIVISIONThe IIE Marque

`



`



`


TERTIARY DIVISION

42

Growth

17 210

20 113

24 332

29 138

10 000

15 000

20 000

25 000

30 000

2013 2014 2015 2016

Tertiary enrolment (Full Qualifications) – End Feb

`


TERTIARY DIVISION

43

Growth

18

20

15

16

17

18

19

20

21

Feb 2015 Feb 2016

Sites

24 332

29 138

21 000

22 000

23 000

24 000

25 000

26 000

27 000

28 000

29 000

30 000

Feb 2015 Feb 2016

Students

7brands

`


TERTIARY DIVISION

44

Growth targets

R450mEBIT

R2.2bnrevenue

2020

RESOURCING DIVISION

53% Revenue to R297 million


`


RESOURCING DIVISION

46

Beginning of 2015

19branches

3 182placements

9brands

`


RESOURCING DIVISION

47

Strategic acquisitions

• Africa partner

• 90% activities are

in the rest of Africa

• Mining, engineering,

oil & gas, finance and

banking

• Payroll and

compliance solutions

• In 40 African countries

• Boutique financial

recruitment agency

• Strength: niche financial

recruitment

Majority shareholding

CA Global HR Africa Solutions Contract Accountants

Cape Town Mauritius Cape Town

`


RESOURCING DIVISION

48

Development

newdepartment

Providing recruitment

processing outsourcing

LinkedIn

Leverage off LinkedIn

and increased

licence volumes

Priority learnership

programme

Develop critical

scarce skills

in SA employment

sector

`


RESOURCING DIVISION

49

Industry trends

Renewed emphasis on the power of relationships

Employers demand quality

hires

Using social professional networks to

source candidates

Finding candidates in high

demand talent pools

Source: LinkedIn: Global Recruiting Trends 2016

CompensationTop challenges in

attracting top talentCompetition

`


RESOURCING DIVISION

50

Year end 2015

28branches

12brands

3 759placements

OUR PEOPLE

`


OUR PEOPLE

Our intellectual capital and our skills are our greatest assets

44%of staff are professionally qualified

44 Doctorates

421Masters degrees

593Honours degrees

1 334Degrees

`


OUR PEOPLE

Our intellectual capital and skills

are our greatest assets

`


OUR PEOPLE

5 441staff

(2014: 4 036)

35%growth in staff numbers

R46.8mspent on skills development in last 5 years

Our intellectual capital and our skills are our greatest assets

`


OUR PEOPLEManagement Development Programmes (MDP)

2015:

159people

attended MDP

42people

attended LDP

1 650people

attended management

toolkit

Last 5 years:

43MDP

(2014: 24)

143mentorship programme

760management

toolkit programme

Introduction

Results


Prospects

Questions

`


FINANCIALSIncome statement

Rm2015 2014 % change

% change at mid-year

Revenue 2 708 1 932 40% 33%

Operating profit 448 256 75% 73%

Diluted normalised earnings

per share – cents53.9 42.3 27% 30%

`


FINANCIALS

1 6061 687

1 7661 932

2 708

0

500

1 000

1 500

2 000

2 500

3 000

2011 2012 2013 2014 2015

Group revenue

Rm

`


FINANCIALS

230200

222

256

448

0

100

200

300

400

500

2011 2012 2013 2014 2015

Operating profit

Rm

`


FINANCIALS

14,3%

11,9%

12,6%

13,3%

16,6%

10%

12%

14%

16%

18%

2011 2012 2013 2014 2015

Group operating margin

%

`


FINANCIALS

40

35

3940

51

30

35

40

45

50

55

2011 2012 2013 2014 2015

HEPS

Cents

`


FINANCIALS

334 332363

286

556

0

100

200

300

400

500

600

2011 2012 2013 2014 2015

Cash flow generation

Rm

265 271

297

196

350

0

50

100

150

200

250

300

350

400

2011 2012 2013 2014 2015

Free operating cash flow before capexRm

`


FINANCIALSBalance sheet highlights

Rm2015 2014 % change

Tangible assets 2 593 1 492 74%

Trade and other receivables 193 154 25%

Fees in advance 276 210 31%

Shareholders’ equity 2 255 929 143%

Net borrowings 1 157 436 165%

`


FINANCIALS

Rm

-24-62

-202

-436

-1 157

-1 400

-1 200

-1 000

-800

-600

-400

-200

0

2011 2012 2013 2014 2015

Net borrowings position

`


INVESTMENTS

Investment Rm

Acquisition of the Centurus Colleges 699

Acquisition of the Maravest Group 497

Other school acquisitions 80

CA Global, Africa HR Solutions and Contract Accountants 41

Capital expenditure 406

Total 1 723

`


FINANCIALSCapital structure

Rm – 31 Dec 2015As

reported

Excluding

rights issue

Equity 2 255 1 420

Net borrowings 1 157 1 992

Gearing 51% 140%

EBITDA 558 558

Net borrowings to EBITDA 2.1 3.6

Long term covenant 3.5 3.5

Head room 800 -

`


FINANCIALSNew banking facilities

Rm

New 5 year facilities 1 500

Consisting of:

Long term loan 750

Revolving credit facility 750

Ability to increase facilities if required

SEGMENTAL ANALYSIS

`


REVENUE

47%

43%

10%

Revenue 2014

Schools Tertiary Resourcing

53%

36%

11%

Revenue 2015


`


OPERATING PROFIT

61%

32%

7%

Operating profit 2014


65%

29%

6%

Operating profit 2015


`


SCHOOLS

Rm

123

148157 162

299

0

50

100

150

200

250

300

350

2011 2012 2013 2014 2015

Schools operating profit

Rm

658739

819915

1 432

0

200

400

600

800

1 000

1 200

1 400

1 600

2011 2012 2013 2014 2015

Schools revenue

`


SCHOOLS

18,6%

20,0%

19,2%

17,7%

20,9%

14%

16%

18%

20%

22%

2011 2012 2013 2014 2015

Schools operating margin

%

`


TERTIARY

Rm

90

32

48

84

135

0

20

40

60

80

100

120

140

2011 2012 2013 2014 2015

Tertiary operating profit

Rm

742 739 751

827

982

0

200

400

600

800

1 000

1 200

2011 2012 2013 2014 2015

Tertiary revenue

`


TERTIARY

12,2%

4,4%

6,4%

10,2%

13,7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

2011 2012 2013 2014 2015

Tertiary operating margin

%

`


RESOURCING

Rm

19

22

18 18

29

0

10

20

30

40

2011 2012 2013 2014 2015

Resourcing operating profit

Rm

207 211200 194

297

0

50

100

150

200

250

300

350

2011 2012 2013 2014 2015

Resourcing revenue

`


RESOURCING

9,3%

10,4%

9,1%

9,4%

9,8%

8%

9%

9%

10%

10%

11%

2011 2012 2013 2014 2015

Resourcing operating margin

%

Introduction

Results


Prospects

Questions

`


ENROLMENTSADvTECH Group enrolments

FEB 2014 FEB 2015 % increase FEB 2016 % increase

Schools total enrolments 13 541 23 721 75% 25 062 6%

Tertiary full qualification

enrolments20 113 24 332 21% 29 138 20%

Group total 33 654 48 053 43% 54 200 13%

`


CAPACITY Capacity doubled in the last 5 years

50%

3%3%

5%

11%

28%

Capacity and year of development 2015 (%)

Older capacity Capacity created in 2011 Capacity created in 2012

Capacity created in 2013 Capacity created in 2014 Capacity created in 2015

`


INVESTMENTSInvestment programme 2011 – 2015

74%13%

6%

7%

R2.3bn infrastructure investments made

School properties Tertiary properties ICT equipment Other infrastructure equipment

`


PROSPECTS

81

Industry trends

Oxford University: International Trends in Higher Education 2015; Deloitte on Africa: The Rise and Rise of the African

Middle Class; Africa’s urbanisation: Challenges and Opportunities (Freire, Lall, Leipzeiger) & Africa Progress Report 2010

African Higher Education market –

expected to double: 400m

people by 2045

The middle class

in Africa will grow

to 42% of the

population by 2060

Africa has a

disproportionately

young population

with 62% under

age 25

Sub-Saharan

population will

grow from 1bn to

2.4bn by 2050

Africa has the

fastest growing

middle class in

the world

African

urbanisation

expected to soar

to 60% by 2050

`

ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 82

30% Revenue

2020Africa

`


PROSPECTS

Positive performance trends

Continued growth

Growth targets

`


PROSPECTS

35

39

41

51

30

35

40

45

50

55

2012 2013 2014 2015

HEPS

33 654

48 053

54 200

30 000

35 000

40 000

45 000

50 000

55 000

60 000

2014 2015 2016

Total enrolments

`


PROSPECTS

2 609 2 612 2 768

3 665

7 728

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

2011 2012 2013 2014 2015

Market cap @ year end

`


PROSPECTS

Stretch target

100 cps

(NEPS)

2018

Introduction

Results


Prospects

Questions

Documents

for the year ended 31 December 2015 - ADvTECH Presentations/December 2015...annual financial results for the year ended 31 december 2015 ... 25 062 0 4 000 8 000 12 000 16 000 20 000