Adcorp Holdings Limited · JSE:ADR
Adcorp — FY2024 Earnings Presentation
35 slides from Adcorp's earnings presentation, June 2024
Slide 1: Annual Results Year ended 29 February 2024
ANNUAL RESULTS Year ended 29 February 2024
Slide 2: Disclaimer
Disclaimer The statements contained herein may contain certain forward-looking statements relating to the Group that are based on the beliefs of the Group’s management as well as assumptions made by and information currently available to the Group’s management. These forward-looking statements are,
Slide 3: Agenda
Agenda Overview Key indicators Dr John Wentzel General business environment Business model Chief Executive Officer Performance overview Dividend declaration Financial and Operational Overview Income statement Noel Prendergast Segmental overview Chief Financial Officer Balance sheet Cash flow Closing
Slide 4: Overview
Overview Dr John Wentzel Chief Executive Officer Annualresults Annual resultsYear Yearended ended 29 29 February February2024 2024
Slide 5: Key indicators
Key indicators Revenue Margins Debt Csat growth down free scores up Employee Continuing Dividend Total HEPS & engagement HEPS & EPS declared EPS up up down Annual results Year ended 29 February 2024 5
Slide 6: General business environment in South Africa
General business environment in South Africa Weak High Interest Rate Political Energy Labour Market Economy inflation Increases Uncertainty Supply Issues Challenges South Africa The country In response to The upcoming Persistent energy High experienced faced high inflation, the elections supply cons
Slide 7: General business environment in Australia
General business environment in Australia Sector- Impact of Economic Low Interest Migration Specific Government Recovery Unemployment Rates Stable Policies Demands Policies Australia's economy The country Unlike South There was Changes in National continued to maintained Africa, Australia significan
Slide 8: Adcorp business model
Adcorp business model Client-Centric and Sector Flexibility and Diverse Service Geographical Brand-Focused Specialisation Adaptability Offerings Diversification Developed expertise Adcorp's ability to Adcorp provides a The company Approach in specific sectors provide a broad broad range of operates
Slide 9: Adcorp overview
Adcorp overview Robust Revenue Growth 15 Achieved a 7.7% increase in revenue, marking consecutive years of growth despite a challenging global staffing market Financial Health 2 Remained debt-free with strong management of working capital, although faced margin contraction and a decrease in gross pr
Slide 10: Dividend declaration
Dividend declaration TOTAL NORMAL DIVIDEND FINAL DIVIDEND DECLARED DECLARED 24,2 cps 40,3 cps 2023 16,5 cps 46.7% 2023 28,7 cps 40.4% Through share buybacks, ordinary and special dividends, Adcorp has returned R248m to shareholders since 2021 Annual results Year ended 29 February 2024 10
Slide 11: Financial and Operational Overview
Financial and Operational Overview Noel Prendergast Chief Financial Officer Annual results Annual Year results ended Year 29 February ended 11 2024 2024 29 February
Slide 12: Financial snapshot
Financial snapshot REVENUE GROSS PROFIT PROFIT AFTER TAX TOTAL PROFIT AFTER TAX from continuing operations from continuing operations R13,0 bn 7.7% R1,26 bn (2.0%) R88,0 m (27.1%) R88,0 m 115.9% 2023 R12,0bn 2023 R1,28bn 2023 R120,8m 2023 R40,8m CASH GENERATED NET CASH POSITION OF FINAL DIVIDEND DEC
Slide 13: Summarised consolidated statement of profit and loss
Summarised consolidated statement of profit and loss Audited Audited Year end Year end R’000 Feb 2024 Feb 2023 Var % Revenue 12 982 141 12 048 951 7.7% Cost of sales (11 725 110) (10 766 543) 8.9% Gross profit 1 257 031 1 282 408 (2.0%) Revenue increased by 7.7% Gross profit % 9.7% 10.6% Other incom
Slide 14: Factors influencing Adcorp's Results
Factors influencing Adcorp’s Results Positive impact on income statement Negative impact on income statement Inflation Investment Tax in growth Load- shedding Funding One off costs Revenue Growth Growth in Permanent existing low Placements margin clients Cost Optimisation In Contract RPO Decline Con
Slide 15: Operating expenses
Operating expenses R billion 2.0 1.68 1.68 1.60 1.60 1.5 1.50 1.50 1.39 1.39 1.43 1.43 1.12 1.15 1.10 1.0 1.02 0.5 Feb 2020 Feb 2021 Feb 2022 Feb 2023 Feb 2024 Reported operating expenses (excluding impairments) Inflation adjusted - since 2020 Annual results Year ended 29 February 2024 15
Slide 16: Segmental performance
Segmental performance Revenue Gross profit EBITDA Audited Audited Audited Audited Audited Audited Year end Year end Year end Year end Year end Year end R’000 Feb 2024 Feb 2023 Feb 2024 Feb 2023 Feb 2024 Feb 2023 Total South Africa 6 870 829 6 668 343 734 574 784 016 101 892 156 106 Contingent Staffi
Slide 17: Contingent Staffing Australia
Contingent Staffing Australia Offering tailored workforce solutions across Operating in Australia's healthcare sector providing Australia specialising in blue-collar, industrial reliable, compliant, and suitably qualified healthcare and food processing recruitment, striving to professionals. Offerin
Slide 18: Contingent Staffing Australia
Contingent Staffing Australia Revenue – Rm Stellar top-line and gross profit growth Numerous significant wins, including new contracts with major 1 901 clients in the manufacturing, industrial, and healthcare sectors 1 409 Demand for agricultural and protein products driven by increased exports unde
Slide 19: Contingent Staffing South Africa
Contingent Staffing South Africa A leading provider of flexible A private higher education Specialises in providing front Specialises in providing staffing solutions, specialising in institution that specialises in and back of house staffing disability placement services blue-collar temporary staffi
Slide 20: Contingent Staffing South Africa
Contingent Staffing South Africa Revenue – Rm Robust demand for contingent staffing despite the significant 3 788 challenges South Africa faced 3 592 4% 4% Companies seek more flexible solutions due to persistent load shedding and other infrastructure challenges in the country 96% +5.5% 96% Incorpor
Slide 21: Functional Outsourcing South Africa
Functional Outsourcing South Africa Specialising in outsourced A Business Process Outsourcing Specialises in high-performance, business solutions that leverage provider offering customised specialised cleaning services technology to enhance solutions to enhance customer tailored to meet the stringen
Slide 22: Functional Outsourcing South Africa
Functional Outsourcing South Africa Revenue – Rm Strong new sales growth was achieved but offset by a 1 130 1 137 revenue decline with a major client 3% 3% Decision-making by clients on significant outsourcing opportunities slowed 97% +0.6% 97% Margins came under pressure for the majority of the yea
Slide 23: Professional Services Australia
Professional Services Australia A leading IT recruitment agency, providing extensive services in IT contract recruitment, permanent staffing, and talent solutions. They offer specialised services across various sectors including AI, cybersecurity, and software development. www.paxus.com.au Annual re
Slide 24: Professional Services Australia
Professional Services Australia Revenue – Rm Demonstrated agility through a continued focus on new 4 211 business expansion 3 972 Several large customers secured across Banking & Finance, State and Federal Government, and the Digital sector +6.0% Technology and digital sector faced numerous headwind
Slide 25: Professional Services South Africa
Professional Services South Africa A leading IT staffing specialising in Focused on connecting top talent Kelly provides comprehensive TalentCRU specialises in tailored technology solutions and staffing with leading employers. It offers recruitment solutions from general recruitment solutions, inclu
Slide 26: Professional Services South Africa
Professional Services South Africa Revenue – Rm Paracon achieved revenue growth for the first time 1 947 1 946 in six years 6% 5% 15% 15% Strategic acquisition of Jobvine 15% 16% Revitalised iconic brands Kelly and DAV 20% (0.1%) 22% Recovery in permanent placements has not yet materialised 44% 42%
Slide 27: Summarised statement of financial position
Summarised statement of financial position Audited Audited Year end Year end R'000 Feb 2024 Feb 2023 Assets Property and equipment 24 678 30 811 Right-of-use lease assets 249 800 291 785 No significant investment in PPE and ROUA assets, movement mainly due to depreciation Intangible assets and Goodw
Slide 28: Cash flow movements
Cash flow movements R’m 248 14 (128) (124) 312 (48) (39) (21) (10) 204 Ordinary dividend of R27.4 million and special dividend of R100.4 million Continued investment in working capital in both geographies Excludes restricted cash of R71 million in Angola Annual results Year ended 29 February 2024 28
Slide 29: Working capital management
Working capital management R million Days 800 60 50 600 48 632 40 38 38 37 400 36 30 200 20 103 0 (61) 10 (124) (124) -200 0 Feb 2020 Feb 2021 Feb 2022 Feb 2023 Feb 2024 Net working capital movement Days Sales Outstanding (DSO) Annual results Year ended 29 February 2024 29
Slide 30: Net cash/(debt) trend
Net cash/(debt) trend Rm 400 312 200 198 204 0 ( 49) ( 200) ( 400) ( 600) ( 688) ( 800) Feb 2020 Feb 2021 Feb 2022 Feb 2023 Feb 2024 Dividend R106m Nil Nil R62m R128m paid Share buy-back R30m Nil R4m R20m R7m Annual results Year ended 29 February 2024 30
Slide 31: Closing
Closing Dr John Wentzel Chief Executive Officer Annual Annual results results Year ended29 Year ended 29February February 2024 2024 31
Slide 32: Adcorp Investment Case
Adcorp Investment Case Strategic Strong Effective Consistent Demonstrated Positioning in Financial Working Capital Revenue Financial Market Position Management Growth Resilience and Return to Shareholders As the largest staffing Adcorp remains The company has Adcorp reported a Over the past three co
Slide 33: Outlook
Outlook Investment in Contingent Economic Recovery and Staffing and Outsourcing Strategic Adaptation With a growing shortage of blue- Anticipated improvements in the collar workers in Australia and economic landscape, particularly continuing demand for flexible in Australia, where reduced staffing s
Slide 34: Q&A
Q&A Annual results Annual Year results ended Year 29 February ended 34 2024 2024 29 February
Slide 35: Connecting Human Potential
QOcorp Connecting Human Potential