Tribal Group Plc · LSE:TRB
Tribal — FY2018 Earnings Presentation
31 slides from Tribal's earnings presentation, Mar 19, 2019
Slide 1: 2018 Full Year Results
Empowering the world of education 2018 Full Year Results 19th March 2019
Slide 2: 2018 Overview
2018 Overview Good overall results, particularly in UK; more challenging in Australia Significant growth in profit and net margin improvement; positive cashflow Continuing to drive development of the Tribal Edge products Dispute with software platform provider on royalty payments, which we will stro
Slide 3: 2018 Business Review
2018 Business Review March 2019 Tribal Results Full Year 2018 3
Slide 4: 2018 Overview
2018 Overview Third consecutive year of EBITA growth and positive financial results; net cash of £20m up 42% Driving quality revenue – recurring revenue is 64% of software-related revenue and 45% of total revenue Adjusted Operating Profit up 47% to £10.8m (pre-IFRS 15 profit up 77%)* Adjusted Operat
Slide 5: 2018 Highlights
2018 Highlights Tribal profit growth (as reported) 12 16% 14% 10 12% 8 10% HE: 4 new competitive university wins 6 8% FE: won all 6 Further Education Colleges in NI 6% 4 British Council rollout complete to 47 countries 4% QAS: extension to NCETM contract and new UK 2 2% DfE contract for NPQ
Slide 6: 2018 Challenges
2018 Challenges Higher Education opportunities in Asia-Pacific region limited Large FE/VET contracts in Australia moving to more steady state, with lower revenue Schools (Australia): limited new opportunities - focus on supporting existing customers Dispute with software platform provider on royalty
Slide 7: Financial Report
Financial Report March 2019 Tribal Results Full Year 2018 7
Slide 8: Summary
Summary 12 months ended 31 December 2018 Revenue Adjusted Operating Profit* Net Cash £80.1m £10.8m £20.0m 2018 £80.1m 2018 £10.8m 2018 £20.0m 2017 £84.9m 2017 £8.5m 2017 £14.1m down 6.0% up 27% up 42% Core revenue, on a constant currency basis, is down 1%, due to lower revenues in Australia Adju
Slide 9: Impact of IFRS 15 & forex movements on core numbers
Impact of IFRS 15 & forex movements on core numbers Revenue Operating profit 2018 2017 Growth % 2018 2017 Growth % POST-IFRS 15 numbers Post IFRS 15 numbers 80.1 85.3 (6)% 10.8 8.9 21% On a pre-IFRS 15 basis, constant Ofsted: discontinued contract (2.4) (1.1) currency, Core business 80.1 82.9 (3)% 1
Slide 10: Financial Key Points (core business)
Financial Key Points (core business*) Revenue Adjusted operating profit Statutory operating profit £80.1m £10.8m £4.6m 2017 £81.0m* down 1.1% 2017 £7.3m* up 47% 2017 £3.7m up 24% Annually recurring revenue Pre-IFRS 15 Adj Operating Profit Proposed Dividend £38.5m £12.2m 1.1p 2017 £36.5m up 5.6% 2017
Slide 11: Segment Results
Segment Results* Segment Revenue Segment Profit (Exc. Discontinued Businesses in (Exc. Discontinued Businesses in Constant Currency) Constant Currency) 90 25 2017 Growth % Revenue (£m) 2018 2017 (ConCurr) (ConCurr) 80 15.2 16.7 20 3.0 70 3.7 Student Information Systems 57.0 60.4 58.8 (3%) 0.7 4.0 0.
Slide 12: Product Development costs in 2018
Product Development costs in 2018 £’m 2018 Reported Change Investment in the Edge 2017 platform was significantly Product Development 11.2 10.9 3% increased, with a total to £4.1m capitalised, of Of which capitalised 4.1 2.1 96% which £3.7m related to Tribal Edge 3.7 1.1 229% the development of the
Slide 13: Committed Revenue
Committed Revenue Committed as at 31 December 2018 Total Committed Revenue £121.6m split by year of expected recognition (FY17 £120.1m) Increase of £1.5m on 2017 £121.6m ~ 70% of next 12 months’ consensus revenue committed > 90% of 2018 full year revenue was recognised or committed by 30 June
Slide 14: Cashflow
Cashflow 2018 2017 Net cash Operating Cashflows 12.7 10.9 £20.0m Working Capital movements 3.1 0.1 2017 £14.1m up 42% Tax (paid)/received (1.6) 0.1 Operating cashflow (before tax) Net Operating Cash 14.2 11.1 £15.9m Investing activities (5.4) (4.3) 2017 £11.2m up 42% Deferred consideration (0.8) (1.
Slide 15: Tribal – Looking Forward
Tribal – Looking Forward March 2019 Tribal Results Full Year 2018 15
Slide 16: Our goal: Empowering the world of education
Our goal: EMPOWERING THE WORLD OF EDUCATION We provide the expertise, software and services required by education and business organisations worldwide to underpin student success. March 2019 Tribal Results Full Year 2018 16
Slide 17: Tribal Edge – an evolutionary path to a cloud-based, next generation SIS
Tribal Edge – an evolutionary path to a cloud-based, next generation Student Information System A cloud platform and services layer, that integrates with existing Tribal and 3rd party Student Information Systems Putting student experience at the forefront with modules designed for access through a n
Slide 18: Tribal Edge – currently available modules
Tribal Edge – currently available modules Mobile app and safeguarded social network Student wellbeing Learning analytics and analysis Engage Student Support Student Insight March 2019 Tribal Results Full Year 2018 18
Slide 19: Tribal Edge – Student Information System
Tribal Edge – Student Information System Student Experience (Engage app) Edge platform Relationship Alumni Management Management Enrolment/ Learning Portfolio Admissions Assessments Awarding Events Registration & Studying Management Student Apprenticeship Support Management Statutory Returns Finance
Slide 20: Edge: three year plan
Edge: three year plan 2019 2020 2021 Deliver first Edge module, Generate additional Generate incremental to Australian customers recurring revenue from revenue by selling (Callista). moving existing completed, best-of- Improve profitability customers into the breed core modules to further Cloud new
Slide 21: FY19 outlook and opportunities
FY19 outlook and opportunities Drive Grow ebs and March 2019 Improved Create added incremental work-based efficiency value through ARR through learning in through cost Education Cloud FE/VET savings Services offerings (QAS & i-grad) March 2019 Tribal Results Full Year 2018 21
Slide 22: FY19 segment changes
FY19 segment changes Broad portfolio of software solutions complemented with best-in-class services, in two lines of business Student Information Systems (SIS) Higher Ed, Further Ed, Schools, WBL* 71% Education Services Quality Assurance Solutions (QAS) 21% 2018 Revenue Analysis and Benchmarking (i-
Slide 23: Summary
Summary Good overall 2018 performance, significant growth in profit (adjusted and statutory), net margin and cash. UK well positioned in 2019; early contract win (Jan 19) in WBL (Sopra Steria/CITB) ; but revenue challenges remain in APAC. Opportunities for additional cost efficiencies drive continue
Slide 24: Appendix
Appendix March 2019 Tribal Results Full Year 2018 24
Slide 25: Consolidated Income Statement
Consolidated Income Statement 2018 2017 £m £m Revenue 80.1 84.9 Gross profit margin 49% 50% Adjusted operating profit 10.8 8.5 Adjusted operating profit margin 13.5% 10.1% Other Items (6.2) (4.8) Statutory operating profit 4.6 3.7 Finance (income)/costs 0.2 (0.3) Statutory profit before tax 4.8 3.4
Slide 26: Other Items
Other Items FY FY 2018 2017 £m £m Share based payment charges 2.3 1.7 To assist understanding of the Restructuring 1.0 1.0 underlying performance of the business, IFRS3 amortisation 1.8 2.0 certain items are included in Other Items. Impairment of development cost 1.0 - The main items are Share-based
Slide 27: Student Information Systems
Student Information Systems Cloud License & 8% Development 11% 2017 Growth % Student Information 2018 2017 (Constant (Constant 35 Systems (£m) Actuals Actuals Currency) Currency) Implementation 24% 30 License & Development fees 6.5 9.1 9.1 (29%) 25 Maintenance 56% Support & Maintenance fees 31.7 32.
Slide 28: Revenue by Product/Service and by Segment
Revenue by Product/Service and by Segment Revenue (£m) 70 REVENUE BY PRODUCTS AND REVENUE BY GEOGRAPHY 2018 2017 Growth % SERVICES UK 42.6 36.2 17% 60 4.0 5.6 Rest of World 37.5 44.8 (16)% 50 14.2 Revenue* 80.1 81.0 (1)% 13.9 40 REVENUE BY SEGMENT 30 32.5 32.9 20 QAS 2.6 3.0 Other 21% 10 5% 16.4 15.
Slide 29: Experienced Management Team
Experienced Management Team Jon Baldwin Mark Wilson Janet Tomlinson Paul Simpson Managing Director, Managing Director, Managing Director, Acting CFO Higher Education EMEA Further Education Education Services • Joined in December 2016 • Joined in May 2014 • Joined in December 2016 • Joined in October
Slide 30: 2019 Dividend
2019 Dividend Board proposes to maintain progressive dividend policy, with single annual payment Board recommends dividend of 1.1p per share (up 10% on prior year) Record date: 3rd May 2019 (ex div 2nd May 2019) Expected payment date: 29th May March 2019 Tribal Results Full Year 2018 30
Slide 31: Contact
Contact: Email [email protected] [email protected] WWW.TRIBALGROUP.COM @TRIBALGROUP March 2019 Tribal Results Full Year 2018 31