INTERIM FINANCIAL RESULTS for the six months ended 30 June 2016 Accelerated growth ACADEMIC EXCELLENCE INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 1
Financials Strategy Acquisitions - Oxbridge and Capsicum Prospects and Targets Questions
HEADLINE EARNINGS R m 200 189,6 150 100 66,5 71,5 81,2 104,4 50 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 3
NORMALISED EARNINGS R m 200 165,4 150 100 50 67,5 72,2 82,5 109,2 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 4
EXCELLENT RESULTS Performance at a glance Revenue 28% Trading operating profit 33% Normalised earnings per share 24% Interim dividends per share 13.5 cents INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 5
EXCELLENT RESULTS Total enrolment 2016: 54 200 13% 2015: 48 053 School enrolment 2016: 25 062 6% 2015: 23 721 Education sites 2016: 101 5 2015: 96 Tertiary full-time enrolment 2016: 29 138 20% 2015: 24 332 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 6
GROUP REVENUE R m 1 800 1 200 600 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 7
GROUP TRADING OPERATING PROFIT R m 350 300 250 200 150 100 50 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 8
GROUP TRADING OPERATING MARGIN 20% 15% 10% 5% 0% 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 9
CASH FLOW GENERATION R m 700 600 500 400 300 200 100 0 2012 2013 2014 2015 2016 Cash generated from operations Cash from operations (after working capital) INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 10
SCHOOLS REVENUE R m 900 800 700 600 500 400 300 200 100 0 2012 2013 2014 2015 2016 ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 11
SCHOOLS OPERATING PROFIT R m 200 150 100 50 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 12
SCHOOLS OPERATING MARGIN 25% 20% 15% 10% 5% 0% 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 13
TERTIARY REVENUE R m 700 600 500 400 300 200 100 0 2012 2013 2014 2015 2016 ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 14
TERTIARY OPERATING PROFIT R m 120 90 60 30 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 15
TERTIARY OPERATING MARGIN 20% 15% 10% 5% 0% 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 16
RESOURCING REVENUE R'm 250 200 150 100 50 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 17
RESOURCING OPERATING PROFIT R'm 15 10 5 0 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 18
RESOURCING OPERATING MARGIN 15% 10% 5% 0% 2012 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 19
REVENUE 14% 8% 39% 2015 53% 50% 2016 36% Schools Tertiary Resourcing INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 20
OPERATING PROFIT 3% 37% 31% 6% 2015 2016 63% 60% Schools Tertiary Resourcing INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 21
Schools below 1% of revenue Tertiary average 4% of revenue Bad debt levels remain consistent Well managed Strong emphasis - collections Mindful of consumer INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 22
Financials Strategy Acquisitions - Oxbridge and Capsicum Prospects and Targets Questions
TECHNOLOGY REGULATIONS ECONOMY RISK MANAGEMENT Excellence through Specialisation > Niche market focus > Benchmarking > Database development Growth > Organic and Acquisitive > Channel > Product > Segment > Geographic Academic Excellence > Teaching & Learning > Benchmarking our performance > Learning analytics > International & Employer recognition Africa REPUTATION & STAFF Customer Focus > Easy to do business with us > Understanding needs Innovation > Business Process > Product / Market Development Human & Capital Productivity BEE DESTRUCTIVE TAKEOVER INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 24
TECHNOLOGY REGULATIONS ECONOMY RISK MANAGEMENT Excellence through Specialisation > Niche market focus > Benchmarking > Database development Growth > Organic and Acquisitive > Channel > Product > Segment > Geographic Academic Excellence > Teaching & Learning > Benchmarking our performance > Learning analytics > International & Employer recognition Africa REPUTATION & STAFF Customer Focus > Easy to do business with us > Understanding needs Innovation > Business Process > Product / Market Development Human & Capital Productivity BEE DESTRUCTIVE TAKEOVER INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 25
TECHNOLOGY REGULATIONS ECONOMY RISK MANAGEMENT Excellence through Specialisation > Niche market focus > Benchmarking > Database development Growth > Organic and Acquisitive > Channel > Product > Segment > Geographic Academic Excellence > Teaching & Learning > Benchmarking our performance > Learning analytics > International & Employer recognition Africa REPUTATION & STAFF Customer Focus > Easy to do business with us > Understanding needs Innovation > Business Process > Product / Market Development Human & Capital Productivity BEE DESTRUCTIVE TAKEOVER INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 26
TECHNOLOGY REGULATIONS ECONOMY RISK MANAGEMENT Excellence through Specialisation > Niche market focus > Benchmarking > Database development Growth > Organic and Acquisitive > Channel > Product > Segment > Geographic Academic Excellence > Teaching & Learning > Benchmarking our performance > Learning analytics > International & Employer recognition Africa REPUTATION & STAFF Customer Focus > Easy to do business with us > Understanding needs Innovation > Business Process > Product / Market Development Human & Capital Productivity BEE DESTRUCTIVE TAKEOVER INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 27
TECHNOLOGY REGULATIONS STRATEGIC IMPERATIVES ECONOMY RISK MANAGEMENT Excellence through Specialisation > Niche market focus > Benchmarking > Database development Growth > Organic and Acquisitive > Channel > Product > Segment > Geographic Academic Excellence > Teaching & Learning > Benchmarking our performance > Learning analytics > International & Employer recognition Africa REPUTATION & STAFF Customer Focus > Easy to do business with us > Understanding needs Innovation > Business Process > Product / Market Development Human & Capital Productivity BEE DESTRUCTIVE TAKEOVER INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 28
RESOURCING TERTIARY SCHOOLS OUR BRANDS INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 29
SCHOOLS DIVISION 20% Revenue to R822 million 25% Operating Profit to R164 million
SCHOOLS DIVISION 1 728 matrics 3 137 total distinctions 2 average distinctions/candidate Government NSC ADvTECH NSC IEB ADvTECH IEB ADvTECH Group Matric pass rate 71% 99% 98% 99% 99% 3 matrics 11 matrics 32 matrics 51 matrics 56 matrics 10 distinctions 9 distinctions 8 distinctions 7 distinctions 6 distinctions INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 31
SCHOOLS DIVISION CrawfordSchoolsTM Every child a masterpiece Outstanding academic reputation Contemporary education Extensive subject choice International benchmarking Ivy league alumni 20 schools 89% existing built capacity utilised 84% ultimate capacity utilised ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 32
SCHOOLS DIVISION CrawfordSchoolsTM USA College Visits Tuesday 13 September 2016 ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 33
SCHOOLS DIVISION Trinityhouse An education beyond expectation Christian ethos Traditional values Excellent growth Focus on academics, sports & culture 13 schools 78% existing built capacity utilised 44% ultimate capacity utilised ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 34
SCHOOLS DIVISION Abbotts College Your Future, Our Passion Recognise individual needs Specialised methodology A unique solution for students who struggle in a traditional environment Incredible results, not previously anticipated 6 schools 75% existing built capacity utilised 68% ultimate capacity utilised ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 35
SCHOOLS DIVISION Junior Colleges Building the world, one child at a time Early childhood development International curriculum Safe, secure, stimulating environment 8 schools 70% existing built capacity utilised 67% ultimate capacity utilised ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 36
SCHOOLS DIVISION Centurus Colleges Preparing enlightened minds for life Holistic educational experience Strong academics, sport and culture Development of weekly boarding concept 9 schools 87% existing built capacity utilised 70% ultimate capacity utilised ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 37
SCHOOLS DIVISION Maravest Investing in the Education of our future (Maragon) Building the life of a child (Charterhouse) Strong Christian focus Traditional values Varied curriculum Focus on academics, sports & culture 14 schools 81% existing built capacity utilised 61% ultimate capacity utilised ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 38
SCHOOLS DIVISION ADvTECH Academies Community based schools Affordable education Core academic offering 11 schools 84% existing built capacity utilised 59% ultimate capacity utilised ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 39
TERTIARY DIVISION 20% Revenue to R593 million 57% Operating Profit to R100 million
CONTACT HIGHER EDUCATION VALUE PREMIUM NICHE INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 41
HIGHER EDUCATION Distance education Higher education Contact VALUE PREMIUM NICHE Training INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 42
TERTIARY DIVISION End Feb 2016 7 brands 20 registered sites 29 138 Full-time students INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 43
TERTIARY DIVISION INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 44
TERTIARY DIVISION South Africa's leading private higher education institute Our registered academic authority: Develop & submit qualifications for accreditation Assess, monitor and develop academic and lecturing staff Oversee assessment Confer degrees INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 45
TERTIARY DIVISION The IIE 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) 4 faculties 60 + accredited qualifications 11 accredited distance qualifications 5 new qualifications INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 46
TERTIARY DIVISION Growth INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 47
TERTIARY DIVISION Student success 3 359 Students graduating 2 924 Graduates placed in 1 st jobs through the Graduate Placement Programme ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 48
TERTIARY DIVISION Rosebank College Affordable Quality, high demand qualifications Employability Digitally enabled Blended learning Enrolments: 418 students INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 49
TERTIARY DIVISION VEGA Vega s mantra wisdomwithmagic Qualifications in brand building, creative communication and media High industry credibility and reputation INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 50
TERTIARY DIVISION Varsity College Premium brand Applying the best of teaching and learning methodologies Student-centric approach 4 Schools: Humanities Commerce Social Sciences Information Technology INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 51
TERTIARY DIVISION Business School at Varsity College Short learning programmes Part-time study Adult learning theory and practical application INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 52
TERTIARY DIVISION Forbes Lever Baker Premier tuition support provider for accounting qualifications Superb pass rate Top CTA level 2 student in 2015 95% pass rate for 2015 SAICA ITC board exam achieved by CTA students INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 53
TERTIARY DIVISION The Design School of Southern Africa Education in design graphic, fashion and interior Vocational preparedness via academic excellence and industry experience Inspirational, adaptable and innovative learning environment INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 54
TERTIARY DIVISION Enrolment Growth: Full Qualifications 35 000 30 000 29 138 25 000 24 332 20 000 17 210 20 113 15 000 10 000 5 000 0 2013 2014 2015 2016 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 55
RESOURCING DIVISION 116% Revenue to R224 million 30% Operating Profit to R9 million
RESOURCING DIVISION 2016 12 brands 28 branches 3 759 2015 placements INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 57
CALIBRE AND QUALITY OF OUR PEOPLE Our intellectual capital and our skills are our greatest assets 44% of staff are professionally qualified 44 Doctorates 421 Masters degrees 593 Honours degrees 1 334 Degrees INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 58
INTERNATIONAL FINANCE CORP World Bank Group R320m Invested in ADvTECH = R190m + R130m Share issue Acquired in market INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 59
INTERNATIONAL FINANCE CORP World Bank Group Support our expansion strategy in Africa Their mandate Invest and develop in Africa Benefits: Existing footprint in Africa Established relationships with private and government Local market knowledge Credibility INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 60
Financials Strategy Acquisitions - Oxbridge and Capsicum Prospects and Targets Questions
SOUTH AFRICAN DISTANCE EDUCATION MARKET Distance Education growth 420 000 360 000 300 000 2009 2010 2011 2012 2013 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 62
ESTIMATED SIZE OF DISTANCE EDUCATION IN SOUTH AFRICA 938 201 total students in South Africa Higher Education Contact Distance Africa and India fastest growing markets for distance E-learning trends 15,2% growth in Africa Distance: 381 506 Contact: 556 695 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 63
ACQUISITIONS 20 000 students (approx.) distance education Call centre Student support Logistics Marketing 51% acquired 50+ courses offered INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 64
ACQUISITIONS Oxbridge growth R 000 120 000 25 000 100 000 80 000 20 000 15 000 60 000 40 000 20 000 10 000 5 000 0 2014 2015 2016 0 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 65
HOSPITALITY AND TOURISM Employment in SA: Direct and indirect jobs in the sector are estimated to be 1.2m. World Economic Forum estimates Sub-Saharan Africa will create 3.2m tourism jobs between 2012-2022. WEF expects African tourism employment to grow by 2.3% per annum. WEF report: 8m people in Africa are currently employed by tourism. Sector has been identified by the SA Government as a key area for job creation. The catering industry makes up about 17% of the R43bn expenditure in SA on Food and Beverage. (Source: South African Tourism 2013 Annual Performance, PWC 2013 industry report, PWC Hospitality Outlook, STATSSA Food & Beverage Stats 2014, Frontiermarketnework.com; Business Day, www.howwemadeitinafrica.com) ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015 66
ACQUISITIONS Culinary arts education 600 Full-Time 600 Part-Time 6 campuses Endorsements: City and Guilds, World Association of Chef s Societies Acquisition status: 100% acquired by ADvTECH INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 67
ACQUISITIONS Capsicum historical performance R 000 70 000 60 000 50 000 40 000 30 000 20 000 10 000 0 2014 2015 2016 700 680 660 640 620 600 580 560 540 520 500 Enrolments Revenue INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 68
Financials Strategy Acquisitions - Oxbridge and Capsicum Prospects and Targets Questions
SCHOOLS DIVISION Growth targets 2020 R3bn revenue R650m EBIT 40 000 enrolments INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 70
TERTIARY DIVISION Growth targets 2020 R2.2bn revenue R450m EBIT INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 71
AFRICA 30% Revenue 2020 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 72
NEPS 100 cps (NEPS) Stretch target 2018 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 73
PROSPECTS Total enrolments HEPS 60 000 55 55 000 54 200 50 51 50 000 48 053 45 45 000 41 40 000 40 39 35 000 33 654 35 35 30 000 2014 2015 2016 30 2012 2013 2014 2015 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 74
DIVIDEND Interim dividends per share 13.5 cents Significant investments in pipeline Recent fundraising activities Retaining cash to support capex pipeline and investments Above inflation in dividend INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 75
DIVIDEND HISTORY Cents 20 15 10 14 15 15 10 10,5 11 12,5 17 13,5 5 0 2012 2013 2014 2015 2016 Interim Final INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 76
ADVTECH = GOOD INVESTMENT Strong performance Good Growth Opportunities Return on investment ahead of cost of capital Clear focus on Academic Excellence Cash Generation INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 77
ADVTECH SHARE PRICE INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 78
Financials Strategy Acquisitions - Oxbridge and Capsicum Prospects and Targets Questions
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