Advtech Limited · JSE:ADH
Advtech — FY2011 Earnings Presentation
47 slides from Advtech's earnings presentation, 2012
Slide 1: Annual Financial Results for the year ended 31 December 2011
Annual Financial Results for the year ended 31 December 2011
Slide 2: Education quote from Finweek
“Education has rightly become a bit of an obsession for skills-starved South Africa with many parents mortgaging their personal financial futures to hopefully secure their childrens’.” Finweek: January 2012
Slide 3: Agenda
Agenda Strategic Operations Financial highlights Financial analysis Prospects Questions
Slide 4: Strategic Issues
Financial Financial Strategic Operations Prospects Questions highlights analysis Strategic Issues
Slide 5: Green Paper
Green Paper Financial Financial Strategic Operations Prospects Questions highlights analysis Government Green Paper on post-school Education and Training, Jan 2012 Honest assessment of a system beset by challenges Lack of access, opportunities and equality Changes needed to achieve quality, re
Slide 6: State expenditure
State expenditure Financial Financial Strategic Operations Prospects Questions highlights analysis Principal budget allocations: Total of R1.1 Trn Debt service Education Social security 20% Housing and community Health Law and order Infrastructure and technology Defence Source: National Treasury Oth
Slide 7: Unemployment in SA
Unemployment in SA Financial Financial Strategic Operations Prospects Questions highlights analysis December 2010 12% Not economically active 46% Unemployed 29% Formal employment Other employment 13% Source: Stats SA December 2010
Slide 8: Unemployment in SA
Unemployment in SA Financial Financial Strategic Operations Prospects Questions highlights analysis December 2011 12% Not economically active 46% Unemployed 29% Formal employment Other employment 13% Source: Stats SA December 2011
Slide 9: State education
State education Financial Financial Strategic Operations Prospects Questions highlights analysis Passing matric ► Home language 40%, 3 core subjects 30%, 2 other subjects 30%, 1 subject < 30% ► University endorsement: as above with 4 designated subjects 50%, language of instruction 30% ► Universit
Slide 10: Operations
Financial Financial Strategic Operations Prospects Questions highlights analysis Operations
Slide 11: Academic highlights
Academic highlights Financial Financial Strategic Operations Prospects Questions highlights analysis Schools 1 190 Matric students at Abbotts College, CrawfordSchools ™ and Trinityhouse … ► achieved a 100% pass rate ► all but 2 qualified for entrance into higher education institutions ► obtained d
Slide 12: Academic highlights
Academic highlights Financial Financial Strategic Operations Prospects Questions highlights analysis Schools Our schools continue to contribute significantly to the national output in key subjects with averages per candidate as follows: Mathematics - 63% Information Technology - 73% Physical Science
Slide 13: Academic highlights
Academic highlights Financial Financial Strategic Operations Prospects Questions highlights analysis Higher Education Overall module pass rate for the Independent Institute of Education (IIE) Diploma and Higher Certificates of 80%. These are offered at Rosebank College, College Campus and Varsity
Slide 14: The Independent Institute of Education
The Independent Institute of Education Financial Financial Strategic Operations Prospects Questions highlights analysis The IIE continued to expand its offering, launching a number of new accredited degrees and diplomas An association formed with the Open University of the United Kingdom will en
Slide 15: Infrastructure
Infrastructure Financial Financial Strategic Operations Prospects Questions highlights analysis Four major infrastructure projects were completed in 2011: ► Completion of the first phase of the Trinityhouse Little Falls campus, comprising Grades 1 to 4 and associated facilities ► Completion of the
Slide 16: Scale of operations
Scale of operations Financial Financial Strategic Operations Prospects Questions highlights analysis Education Division ► Some 51 000 students across 57 campuses ► Increase in full-time students to 35 300 ► Approximately 38 000 full-time equivalent enrolments (FTE) ► Revenue per FTE R37k Resourc
Slide 17: Employee headcount trend
Employee headcount trend Financial Financial Strategic Operations Prospects Questions highlights analysis 5 000 4 000 3 000 2 000 1 000 0 02 07 08 09 10 11
Slide 18: Annuity nature of revenue
Annuity nature of revenue Financial Financial Strategic Operations Prospects Questions highlights analysis Over 50% of Group revenue is from returning students Equivalent to 53% of education revenue 57% of full-time student population is returning students. This is down from 60% in 2010 becaus
Slide 19: Ploughing back
Ploughing back Financial Financial Strategic Operations Prospects Questions highlights analysis Corporate citizenship is a key component of our business strategy aimed at promoting sustainable development in our society ► In 2011, an overall amount of R70 million (2010: R57 million) was invested o
Slide 20: Investment
Investment Financial Financial Strategic Operations Prospects Questions highlights analysis INVESTMENT PROGRAMME 2009 - 2011 (R424 million) Infrastructural investments made 11% 8% Tertiary properties 26% School properties ICT equipment 55% Other infrastructural equipment
Slide 21: Capacity and year of development
Capacity and year of development Financial Financial Strategic Operations Prospects Questions highlights analysis Total Capacity 225 300m² Year on year increase = 13 200m² 32% created in last 5 years Older capacity Capacity created in 2007 Capacity created in 2008 Capacity created in 2009 Capacity c
Slide 22: Education brands
Education brands Financial Financial Strategic Operations Prospects Questions highlights analysis HIGHER SKILLS SCHOOLS EDUCATION
Slide 23: Resourcing brands
Resourcing brands Financial Financial Strategic Operations Prospects Questions highlights analysis RECRUITMENT
Slide 24: Financial highlights
Financial Financial Strategic Operations Prospects Questions highlights analysis Financial highlights
Slide 25: Income statement
Income statement Financial Financial Strategic Operations Prospects Questions highlights analysis Rm 2011 2010 % growth Revenue 1 606 1 470 9% Operating profit 230 203 13% Headline earnings 162 149 9% HEPS (cps) 40.4 37.2 9% Diluted HEPS (cps) 40.4 37.1 9% Distribution (cps) tba 21.5 tba
Slide 26: Ploughing back
Ploughing back Financial Financial Strategic Operations Prospects Questions highlights analysis R’m % Total value created 1 186 100 Less: employees 668 56 Less: government taxes 226 19 Available to the business 292 25
Slide 27: Ploughing back
Ploughing back Financial Financial Strategic Operations Prospects Questions highlights analysis R’m % Total value created 1 186 Less: employees 668 Less: government taxes 226 Available to the business 292 100 Allocated to communities 70 24 Allocated to investors 92 32 Retained in the group 130 44
Slide 28: Financial analysis
Financial Financial Strategic Operations Prospects Questions highlights analysis Financial analysis
Slide 29: Revenue trend
Revenue trend Financial Financial Strategic Operations Prospects Questions highlights analysis Group revenue 1 800 1 600 1 400 1 200 R'm 1 000 800 600 400 200 0 07 08 09 10 11 5-year CAGR in revenue = 14%
Slide 30: Group operating margin
Group operating margin Financial Financial Strategic Operations Prospects Questions highlights analysis 18% 16% 14% 12% 10% 8% 07 08 09 10 11
Slide 31: Cash flow generation
Cash flow generation Financial Financial Strategic Operations Prospects Questions highlights analysis Free operating cash flow before capex 300 250 200 R'm 150 100 50 0 07 08 09 10 11 CAGR = 12%
Slide 32: HEPS trend
HEPS trend Financial Financial Strategic Operations Prospects Questions highlights analysis 40 30 Cents 20 10 0 07 08 09 10 11 5-year CAGR in HEPS = 12%
Slide 33: Segmental analysis: Revenue
Segmental analysis Financial Financial Strategic Operations Prospects Questions highlights analysis Revenue 2010 2011 14% 13% 86% 87% Education Resourcing
Slide 34: Segmental analysis: Operating profit
Segmental analysis Financial Financial Strategic Operations Prospects Questions highlights analysis Operating profit 2010 2011 13% 9% 87% 91% Education Resourcing
Slide 35: Education trends: Revenue
Education trends Financial Financial Strategic Operations Prospects Questions highlights analysis Revenue 1 600 1 400 1 200 1 000 R'm 800 600 400 200 0 07 08 09 10 11
Slide 36: Education trends: Operating profit
Education trends Financial Financial Strategic Operations Prospects Questions highlights analysis Operating profit 300 250 200 R'm 150 100 50 0 07 08 09 10 11
Slide 37: Resourcing trends: Revenue
Resourcing trends Financial Financial Strategic Operations Prospects Questions highlights analysis Revenue 250 200 150 R'm 100 50 0 07 08 09 10 11
Slide 38: Resourcing trends: Operating profit
Resourcing trends Financial Financial Strategic Operations Prospects Questions highlights analysis Operating profit 50 40 30 R'm 20 10 0 07 08 09 10 11
Slide 39: Prospects
Financial Financial Strategic Operations Prospects Questions highlights analysis Prospects
Slide 40: Prospects
Prospects Financial Financial Strategic Operations Prospects Questions highlights analysis Source: TradingEconomics.com
Slide 41: SA GDP growth
SA GDP growth Financial Financial Strategic Operations Prospects Questions highlights analysis Source: Stanlib
Slide 42: Retail sales trend
Retail sales trend Financial Financial Strategic Operations Prospects Questions highlights analysis
Slide 43: SA headline CPI
SA headline CPI Financial Financial Strategic Operations Prospects Questions highlights analysis Source: Stanlib
Slide 44: Price indices: CPI and Education Price Index
Price indices Financial Financial Strategic Operations Prospects Questions highlights analysis 14 CPI and Education Price Index (EPI) Year on year percentage change: 2001 to 2011 12 10 8 Percentage CPI 6 EPI 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 CPI 5.8 9.1 5.8 1.4 3.4 4.6 7.2
Slide 45: ADvTECH investment trend
ADvTECH investment trend Financial Financial Strategic Operations Prospects Questions highlights analysis Average annual infrastructure investment 160 140 120 100 R’m 80 60 40 20 0 2006 2007 2008 2009 2010 2011 CAGR = 20%
Slide 46: 5 Year Market cap index
5 Year – Market cap index Financial Financial Strategic Operations Prospects Questions highlights analysis
Slide 47: Questions
Financial Financial Strategic Operations Prospects Questions highlights analysis Questions