Tribal Group Plc · LSE:TRB
Tribal — FY2017 Earnings Presentation
38 slides from Tribal's earnings presentation, Mar 22, 2018
Slide 1: 2017 Results
Empowering the world of education 2017 Results Ian Bowles, CEO Mark Pickett, CFO 22nd March 2018 22 March 2018 Tribal Results Full Year 2017 1
Slide 2: Agenda
Agenda § Business Highlights § 2017 Financial Report § CEO Summary § Q&A 22 March 2018 Tribal Results Full Year 2017 2
Slide 3: 2017 Business Highlights
2017 Business Highlights Ian Bowles CEO 22 March 2018 Tribal Results Full Year 2017 3
Slide 4: Three Year Turnaround Plan
Three Year Turnaround Plan Three Year Plan (updated H1 2017) 2016 2017 2018 Create a solid Improve Move to recurring foundation, and profitability, revenue sound deliver new operational product Continued margin model strategy with improvement new licensable module Continued international Delivered D
Slide 5: 2017 Highlights
2017 Highlights § First statutory profit since 2013 § Positive progress across all lines of business § Key contracts secured in SMS & QAS § All Key Metrics showing positive direction of travel 22 March 2018 Tribal Results Full Year 2017 5
Slide 6: Team Achievements over 22 months
TEAM Achievements over 22 months March 2016- December 2017 22 March 2018 Tribal Results Full Year 2017 6
Slide 7: Team achievements in 22 months: The Hard Yards
Team achievements in 22 months The Hard Yards § Reduced headcount from circa 1,400 to 850 − Tupe of staff to Ofsted − Disposal and closure of lines of business − Headcount reduction § Reduced cost base by £12m − Closed Leeds & Birmingham offices − Reduced excessive expenditure 22 March 2018 Tribal R
Slide 8: Team achievements in 22 months: The Positive
Team achievements in 22 months The Positive § New operating model § Invested in infrastructure − New Executive Board − Office 365, Rackspace − Student Information Systems, § Launched Cloud Services QAS, i-graduate − New values programme § Restored competitiveness & win rate § Re-launched the Tribal
Slide 9: Team achievements in 22 months
Team achievements in 22 month Restored Customer Restored Team Restored Financial Confidence Confidence Stability • Tribal Edge • Work in Progress! • Achieved financial messaging well plans for two • Win rate is up received consecutive years • Paid bonuses • Software revenues • Significant growing •
Slide 10: Headcount Report to end December 2017
Headcount Report to end December 2017 Revenue per FTE ended the year at £103.6k per FTE. Overall payroll cost reduced to £36.17M. Average cost per FTE has remained at similar levels since September, now at £44.1k from £43.5k in March (when TUPE transfers occurred), an increase of 1.6% 22 March 2018
Slide 11: Financial Key Points
Financial Key Points Core revenue Adjusted operating profit Statutory profit Annually recurring revenue Adjusted operating margin Statutory profit per share Net cash from operating activities Net cash Committed income 22 March 2018 Tribal Results Full Year 2017 11
Slide 12: Tribal Edge
Tribal Edge 22 March 2018 Tribal Results Full Year 2017 12
Slide 13: Student Engage, Student View, Student Support
Student Engage Student View Student Support 22 March 2018 Tribal Results Full Year 2017 13
Slide 14: Tribal Competency Framework
Tribal Competency Framework 22 March 2018 Tribal Results Full Year 2017 14
Slide 15: Tribal Competency Framework: An overview
Tribal Competency Framework: An overview Exec Leaders 9 Job families Specialist: Management: Widely recognised as a Significant responsibility for subject matter expert people management 4 Job levels Core Tribal Roles: The majority of Tribal roles will fall into this category at a variety of level o
Slide 16: Financial Report
Financial Report Mark Pickett CFO 22 March 2018 Tribal Results Full Year 2017 16
Slide 17: CFO Summary
CFO Summary 12 months ended 31 December 2017 Revenue Adjusted Operating Profit* Net Cash (before share based payments) £84.9m £8.5m £14.1m 2017 £84.9m 2017 £8.5m 2017 £14.1m 2016 £90.3m 2016 £4.7m 2016 £8.8m down 5.9% up 82% up 59% § Core revenue has grown 6.5%, excluding expired Ofsted Early Years
Slide 18: Core Revenue growth: 2015 to 2017
Core Revenue growth: 2015 to 2017 120 100 30.2 13.3 6.5% growth 3.0 § Core revenue grown 7.1% 80 0.5% growth from £76.5m in 2015 to 14.8 9.1 10.9 81.9m in 2017 60 § Core revenue excludes discontinued businesses, shown in grey, including 40 the Ofsted contracts, 67.4 66.0 67.1 Synergy, SLS and Career
Slide 19: Financial Key Points
Financial Key Points Core revenue Adjusted operating profit Statutory profit £81.9m £8.5m £2.6m improved 2016 £76.9m up 6.5% 2016 £4.7m up 82% 2016 Loss of £1.2m £3.8m Annually recurring revenue Adjusted operating margin Statutory profit per share £37.5m 10.1% 1.3p improved 2016 £35.5m up 5.5% 2016
Slide 20: Adjusted EBITDA Bridge from 2016 to 2017
Adjusted EBITDA Bridge from 2016 to 2017 Cost Reduction Annualised 2016 2017 2018 FY 2016 Savings 9.0 5.8 3.2 12 FY 2017 Savings 3.0 2.0 1.0 1.9 12.1 Total Savings 12.0 5.8 5.2 1.0 11 (0.7) 10 1.6 KPIs Full Year to 31 December 2016 2017 Change 9 Headcount: 2.0 1,041 820 222 8 Full Time Equivalent (F
Slide 21: Revenue by Product/Service and by Segment
Revenue by Product/Service and by Segment REVENUE BY PRODUCTS & SERVICES Revenue by segment Y-o-Y growth: 5.8% QAS 21% Other 5% i-grad SMS 3% 71% Y-o-Y growth: 8.9% Net adverse impact on revenue of £10.3m due to discontinued businesses; excluding these factors, revenue rose 6.5%. Overall, Software &
Slide 22: Segmentation: All Businesses
Segmentation: All Businesses Adjusted operating Revenue £m profit £m 2017 2016 2017 2016 Student Management Systems 60.0 59.0* 17.6 12.0* i-graduate 3.0 3.1 0.4 1.1 Other 4.1 5.6 0.7 (0.1) Quality Assurance Solutions 17.8 22.5 4.4 6.5 Total Lines of Business 84.9 90.2 23.1 19.6 Central / Group costs
Slide 23: Student Management Systems
Student Management Systems Other 2% Revenue £m Cloud 2017 2016 6% Licence & Development License and development fees 8.7 11.1 15% Implementation 14.2 12.1 Implementation 24% Maintenance fees 32.1 31.1 Maintenance Cloud 3.6 3.3 53% Other 1.4 1.4 Total 60.0 59.0 Adjusted Operating Profit (£m) 17.6 12.
Slide 24: Committed Income (£m)
Committed Revenue Total Committed Revenue £120.4m (FY16: £113.8m) § Increased of 5.8% on 2016 § ~ 70% of 2018 consensus revenue committed § 51% of Committed Revenue relates to 2019 and beyond Chart Title 70 Factors impacting 2017 committed revenue: 60 § Accelerated project delivery, bringing revenue
Slide 25: Cashflow
Cashflow FY FY Net cash 2017 2016 £m £m £14.1m Operating cashflow 11.1 8.3 2016 £8.8m up 59% Proceeds of Synergy disposal - 19.4 Operating cashflow Acquisition/disposal related costs (1.2) (3.9) £11.1m Capital expenditure (4.3) (2.4) 2016 £8.3m up 34% Finance and other costs (0.1) (0.5) Operating ca
Slide 26: 2017 Dividend
2017 Dividend • Board proposes return to progressive dividend policy, with single annual payment • Board recommends 2017 dividend of 1p per share • Record date: 4th May 2018 (ex div 3rd May 2018) 22 March 2018 Tribal Results Full Year 2017 26
Slide 27: CEO Summary
CEO Summary 22 March 2018 Tribal Results Full Year 2017 27
Slide 28: Operational Challenges in 2018
Operational Challenges in 2018 Duplicate costs as we move operations offshore Duplicate costs as we move data centre Delivery of Edge platform in a cost-neutral manner 22 March 2018 Tribal Results Full Year 2017 28
Slide 29: CEO Summary - today
CEO Summary - today § Stable & evolving organisational structure with clear corporate goals § Well positioned in market; supportive customers; clear SIS strategy § Growing QAS business; stable i-graduate business § Supportive shareholders and workforce 22 March 2018 Tribal Results Full Year 2017 29
Slide 30: CEO Summary – future
CEO Summary – future § Business model provides for continued margin improvement § Brand position provides opportunity for: − Further penetration in current market − Further expansion into new geographies § Company well positioned for M&A − Student Information Systems − QAS 22 March 2018 Tribal Resul
Slide 31: Appendix
Appendix 22 March 2018 Tribal Results Full Year 2017 31
Slide 32: Our Goal remains unchanged
Our Goal remains unchanged World-class software & services company International market leading educational management solutions provider Valued by − Customers − Staff − Shareholders 22 March 2018 Tribal Results Full Year 2017 32
Slide 33: Meeting Educational Institutions' Challenges
Meeting Educational Institutions' Challenges Ensuring success across the Alumni Recruit Improved Recruitment Student Lifecycle Enrol Increased Retention Thriving in an Student Funding Life Student increasingly Enhanced Outcomes Experience competitive market Spaces Course Greater Employability Conten
Slide 34: Market Position
Market Position § No.1 provider of student management systems to universities in the UK, Australia & New Zealand − Australia we work with 90% of Universities − New Zealand we work with 100% of Universities − Facilitates and asset management software provides the NZ Ministry of Education with an effe
Slide 35: Student Information Systems Strategy
Student Information Systems Strategy Further Education / Employment & Schools Higher Education Vocational Education Work Based Learning Lifelong Learning Journey Tribal SchoolEdge Tribal Edge Tribal Maytas A student’s lifelong learning journey underpinned by Tribal Student Information Systems 22 Mar
Slide 36: Consolidated Income Statement
Consolidated Income Statement 2017 2016 £m £m Revenue 84.9 90.3 Gross profit margin 50% 43% Adjusted operating profit 8.5 4.7 Adjusted operating profit margin 10.1% 5.2% Other Items (4.8) (4.6) Statutory operating profit/(loss) 3.7 0.1 Finance costs (0.3) (1.0) Statutory profit/(loss) before tax 3.4
Slide 37: Other Items
Other Items FY FY 2017 2016 £m £m Share based payment charges 1.7 1.0 To assist understanding of the underlying performance of the business, certain items are Profit on sale of Synergy - (0.3) included in Other Items. Restructuring 1.0 1.9 IFRS3 amortisation 2.0 1.9 The main items are Share-based Pa
Slide 38: Contact
Contact: Email § [email protected] § [email protected] WWW.TRIBALGROUP.COM @TRIBALGROUP 22 March 2018 Tribal Results Full Year 2017 38