INTERIM FINANCIAL RESULTS · interim results for the six months ended 30 june 2016 3 headline earnings 66,5 71,5 81,2 104,4 189,6 2012 2013 2014 2015 2016 0 50 100 150 200 r’m `

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INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016 1

INTERIM FINANCIAL RESULTS for the six months ended 30 June 2016

Accelerated growth – ACADEMIC EXCELLENCE

Financials

Strategy

Acquisitions - Oxbridge and Capsicum

Prospects and Targets

Questions

`


HEADLINE EARNINGS

66,5 71,581,2

104,4

189,6

2012 2013 2014 2015 2016

0

50

100

150

200

R’m

`


NORMALISED EARNINGS

67,5 72,282,5

109,2

165,4

0

50

100

150

200

2012 2013 2014 2015 2016

R’m

`


EXCELLENT RESULTSPerformance at a glance

Revenue

28%

Trading

operating profit

33%

Normalised earnings

per share

24%

Interim dividends

per share

13.5 cents

`


EXCELLENT RESULTS

Total enrolment

2016: 54 200

13%2015: 48 053

School enrolment

2016: 25 062

6%2015: 23 721

Education sites

2016: 101

52015: 96

Tertiary full-time enrolment

2016: 29 138

20%2015: 24 332

`


2012 2013 2014 2015 2016

0

600

1 200

1 800

GROUP REVENUE

R’m

`


GROUP TRADING OPERATING

PROFIT

2012 2013 2014 2015 2016

0

50

100

150

200

250

300

350

R’m

`


GROUP TRADING OPERATING

MARGIN

2012 2013 2014 2015 2016

0%

5%

10%

15%

20%

`


2012 2013 2014 2015 2016

0

100

200

300

400

500

600

700

Cash generated from operations Cash from operations (after working capital)

CASH FLOW GENERATION

R’m

`

ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015

SCHOOLS REVENUE

R’m

11

0

100

200

300

400

500

600

700

800

900

2012 2013 2014 2015 2016

`


SCHOOLS OPERATING PROFIT

2012 2013 2014 2015 2016

0

50

100

150

200

R’m

`


SCHOOLS OPERATING MARGIN

2012 2013 2014 2015 2016

0%

5%

10%

15%

20%

25%

`


TERTIARY REVENUE

R’m

14

0

100

200

300

400

500

600

700

2012 2013 2014 2015 2016

`


TERTIARY OPERATING PROFIT

2012 2013 2014 2015 2016

0

30

60

90

120

R’m

`


TERTIARY OPERATING MARGIN

2012 2013 2014 2015 2016

0%

5%

10%

15%

20%

`


RESOURCING REVENUE

0

50

100

150

200

250

2012 2013 2014 2015 2016

R'm

`


RESOURCING OPERATING PROFIT

0

5

10

15

2012 2013 2014 2015 2016

R'm

`


RESOURCING OPERATING MARGIN

2012 2013 2014 2015 2016

0%

5%

10%

15%

`


REVENUE

53%39%

8%

50%

36%

14%

Schools Tertiary Resourcing

2015 2016

`


OPERATING PROFIT

63%

31%

6%

60%

37%

3%

Schools Tertiary Resourcing

2015 2016

`


Well managedStrong emphasis

- collectionsMindful of consumer

• Schools below 1% of revenue

• Tertiary average 4% of revenue

• Bad debt levels remain consistent

Financials

Strategy



Questions

`


Innovation

> Business Process

> Product / Market

Development

Africa

Customer Focus

> Easy to do business with

us

> Understanding needs

Academic Excellence

> Teaching & Learning

> Benchmarking our

performance

> Learning analytics

> International & Employer

recognition

Growth

> Organic and Acquisitive

> Channel

> Product

> Segment

> Geographic

RISK MANAGEMENT

RE

GU

LAT

ION

ST

EC

HN

OLO

GY

ECONOMY

RE

PU

TATIO

N&

STA

FF

DESTRUCTIVE TAKEOVERBEE

Human &

Capital

Productivity

Excellence through

Specialisation

> Niche market focus

> Benchmarking

> Database

development

`


Innovation

> Business Process

> Product / Market

Development

Africa

Customer Focus


us


Academic Excellence


> Benchmarking our

performance



recognition

Growth


> Channel

> Product

> Segment

> Geographic

RISK MANAGEMENT

RE

GU

LAT

ION

ST

EC

HN

OLO

GY

ECONOMY

RE

PU

TATIO

N&

STA

FF


Human &

Capital

Productivity

Excellence through

Specialisation


> Benchmarking

> Database

development

`


Innovation

> Business Process

> Product / Market

Development

Africa

Customer Focus


us


Academic Excellence


> Benchmarking our

performance



recognition

Growth


> Channel

> Product

> Segment

> Geographic

RISK MANAGEMENT

RE

GU

LAT

ION

ST

EC

HN

OLO

GY

ECONOMY

RE

PU

TATIO

N&

STA

FF


Human &

Capital

Productivity

Excellence through

Specialisation


> Benchmarking

> Database

development

`


Innovation

> Business Process

> Product / Market

Development

Africa

Customer Focus


us


Academic Excellence


> Benchmarking our

performance



recognition

Growth


> Channel

> Product

> Segment

> GeographicExcellence through

Specialisation


> Benchmarking

> Database

development

RISK MANAGEMENT

RE

GU

LAT

ION

ST

EC

HN

OLO

GY

ECONOMY

RE

PU

TATIO

N&

STA

FF


Human &

Capital

Productivity

`


Innovation

> Business Process

> Product / Market

Development

STRATEGIC IMPERATIVES

Africa

Customer Focus


us


Academic Excellence


> Benchmarking our

performance



recognition

Growth


> Channel

> Product

> Segment

> Geographic

RISK MANAGEMENT

RE

GU

LAT

ION

ST

EC

HN

OL

OG

Y

ECONOMY

RE

PU

TATIO

N&

STA

FF


Human &

Capital

Productivity

Excellence through

Specialisation


> Benchmarking

> Database

development

`


OUR BRANDSS

CH

OO

LST

ER

TIA

RY

RE

SO

UR

CIN

G

SCHOOLS DIVISION

20% Revenue to R822 million

25% Operating Profit to R164 million

`


SCHOOLS DIVISION

1 728matrics

3 137total distinctions

2 average

distinctions/candidate

Government

NSC

ADvTECH

NSCIEB

ADvTECH

IEB

ADvTECH

Group

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

10 distinctions

3matrics

9 distinctions

11matrics

8 distinctions

32matrics

7 distinctions

51matrics

6 distinctions

56matrics

`


SCHOOLS DIVISIONCrawfordSchoolsTM

Every child a masterpiece

• Outstanding academic reputation

• Contemporary education

• Extensive subject choice

• International benchmarking

• Ivy league alumni

20schools

89%existing

built capacity utilised

84%ultimate

capacity utilised

32

`


SCHOOLS DIVISIONCrawfordSchoolsTM

USA College Visits

Tuesday 13 September 2016

33

`


SCHOOLS DIVISIONTrinityhouse

An education beyond expectation

• Christian ethos

• Traditional values

• Excellent growth

• Focus on academics, sports & culture

13schools

78%existing


44%ultimate

capacity utilised

34

`


SCHOOLS DIVISIONAbbotts 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

6schools

75%existing


68%ultimate

capacity utilised

35

`


SCHOOLS DIVISIONJunior Colleges

Building the world, one child at a time

• Early childhood development

• International curriculum

• Safe, secure, stimulating environment

8schools

70%existing


67%ultimate

capacity utilised

36

`


SCHOOLS DIVISIONCenturus Colleges

Preparing enlightened minds for life

• Holistic educational experience

• Strong academics, sport and culture

• Development of weekly boarding concept

9schools

87%existing


70%ultimate

capacity utilised

37

`


SCHOOLS DIVISIONMaravest

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

14schools

81%existing


61%ultimate

capacity utilised

38

`


SCHOOLS DIVISIONADvTECH Academies

• Community based schools

• Affordable education

• Core academic offering

11schools

84%existing


59%ultimate

capacity utilised

39

TERTIARY DIVISION


57% Operating Profit to R100 million

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CONTACT HIGHER EDUCATION

VALUE PREMIUM NICHE

`


HIGHER EDUCATION

Higher educationDistance education

Training

Contact

VALUE PREMIUM NICHE

`


TERTIARY DIVISIONEnd Feb 2016

7brands

20registered sites

29 138Full-time students

`


TERTIARY DIVISION

`


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

`


TERTIARY DIVISIONThe IIE

THE IIE IS THE ONLY

SOUTH AFRICAN EDUCATIONAL

INSTITUTION

ACCREDITED BY

THE BRITISH ACCREDITATION

COUNCIL (BAC)

• Curricula relevant to the modern world of

work

• Innovative and supportive teaching

methodologies

• We focus on building student careers

• 4 faculties

• 60 + accredited qualifications

• 11 accredited distance qualifications

• 5 new qualifications

`


TERTIARY DIVISIONGrowth

`


TERTIARY DIVISIONStudent success

3 359 Students graduating

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

48

`


TERTIARY DIVISIONRosebank College

• Affordable

• Quality, high demand qualifications

• Employability

• Digitally enabled

• Blended learning

• Enrolments: 418 students

`


TERTIARY DIVISIONVEGA

• Vega’s mantra – wisdomwithmagic

• Qualifications in brand building,

creative communication and media

• High industry credibility and

reputation

`


TERTIARY DIVISIONVarsity College

• Premium brand

• Applying the best of teaching and

learning methodologies

• Student-centric approach

• 4 Schools:

• 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

95%pass rate for 2015

SAICA ITC board

exam achieved by

CTA students

• Premier tuition support provider for

accounting qualifications

• Superb pass rate

• Top CTA level 2 student in 2015

`


TERTIARY DIVISIONThe 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

`


TERTIARY DIVISIONEnrolment Growth: Full Qualifications

17 210

20 113

24 332

29 138

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2013 2014 2015 2016

RESOURCING DIVISION


Operating Profit to R9 million30%

`


RESOURCING DIVISION2016

12brands

28branches

3 7592015 placements

`


CALIBRE AND QUALITY OF 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

`


INTERNATIONAL FINANCE CORPWorld Bank Group

R190mShare issue

R130mAcquired in market

R320mInvested in ADvTECH

+=

`


INTERNATIONAL FINANCE CORPWorld 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

Financials

Strategy



Questions

`


2009 2010 2011 2012 2013

300 000

360 000

420 000

SOUTH AFRICAN

DISTANCE EDUCATION MARKETDistance Education growth

`


ESTIMATED SIZE OF DISTANCE

EDUCATION IN SOUTH AFRICA938 201 total students in South Africa

• Africa and India

– fastest growing

markets for distance

• E-learning trends

– 15,2% growth in Africa

Higher Education

Distance: 381 506 Contact: 556 695

Contact Distance

`


ACQUISITIONS

20 000students (approx.)

distanceeducation

51%acquired

50+courses offered

• Call centre

• Student support

• Logistics

• Marketing

`


0

5 000

10 000

15 000

20 000

25 000

0

20 000

40 000

60 000

80 000

100 000

120 000

2014 2015 2016

ACQUISITIONSOxbridge growth

R’000

`


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)

66

`


ACQUISITIONS

Culinary arts

education

Endorsements:City and Guilds,

World Association of

Chef’s Societies

Acquisition status:

100% acquired

by ADvTECH

6 campuses

600 Full-Time

600 Part-Time

`


ACQUISITIONSCapsicum historical performance

R’000

500

520

540

560

580

600

620

640

660

680

700

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

2014 2015 2016

Enrolments Revenue

Financials

Strategy



Questions

`


SCHOOLS DIVISIONGrowth targets

2020

R3bnrevenue

R650mEBIT

40 000enrolments

`


TERTIARY DIVISIONGrowth targets

2020

R2.2bnrevenue

R450mEBIT

`


30%

Revenue

2020

AFRICA

`


NEPS

100 cps (NEPS)

Stretch target

2018

`


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

`


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

`


DIVIDEND HISTORY

10 10,5 1112,5

13,51415 15

17

0

5

10

15

20

2012 2013 2014 2015 2016

Cents

Interim Final

`


ADVTECH = GOOD INVESTMENT

Strong

performance

Good

Growth

Opportunities

Return on

investment

ahead of cost of

capital

Clear focus on

Academic Excellence

Cash

Generation

`


ADVTECH SHARE PRICE

Financials

Strategy


Questions


Questions

Thank you

Documents

INTERIM FINANCIAL RESULTS · interim results for the six months ended 30 june 2016 3 headline earnings 66,5 71,5 81,2 104,4 189,6 2012 2013 2014 2015 2016 0 50 100 150 200 r’m `