Stadio Holdings Pty Ltd. · JSE:SDO
Stadio Holdings Pty — FY2019 Earnings Presentation
56 slides from Stadio Holdings Pty's earnings presentation, Mar 5, 2020
Slide 1: 2019 Annual Results Presentation
2019 Annual Results Presentation 5 & 6 March 2020
Slide 2: Towards STADIO: faculties
TOWARDS Nn J > 2 oe Faculty of Education & Humanities Faculty of Engineering & Information Technology Faculty of Medicine & Health Sciences Faculty of Agriculture & Environmental Sciences Faculty of Creative Economies Graduate School of Business Faculty of Commerce, Management & Law
Slide 3: Slide 3
Slide 4: What We Promised
4 WHAT WE PROMISED
Slide 5: What We Promised
WHAT WE PROMISED THIS MORNING MARKS THE DAY ON WHICH WE DELIVER ON THE THREE FINANCIAL BENCHMARKS AS SET IN THE PRE-LISTING STATEMENT OF 2017. THE FOLLOWING HEADLINE EARNINGS BENCHMARKS WERE SET: We also provided the market with a business aim for 2026: “In 2026 we believe that STADIO will accommoda
Slide 6: What We Promised
WHAT WE PROMISED •! To accumulate a wide spectrum of relevant and popular qualifications ranging from several Doctorates to very exciting higher certificates •! With these qualifications we believe we shall play our role in South Africa by “widening access to higher education for more and more quali
Slide 7: STADIO Holdings accredited programmes
STADIO — HOLDINGS — UNDERLYING HE QUALIFICATION MIX 93 ACCREDITED PROGRAMMES GRADUATE SCHOOL OF BUSINESS FACULTY OF CREATIVE ECONOMIES FACULTY OF EDUCATION & HUMANITIES Master of Business Administration | BosheoofLms «| scoot oF FASHION SCHOOLOF EDUCATION Pestgodate Diora in Bening # | Bicatr of Pic
Slide 8: The Relevance and Effect of a Fitting Qualification
THE RELEVANCE AND EFFECT OF A FITTING QUALIFICATION
Slide 9: Impact of In-Demand Qualifications
IMPACT OF “IN-DEMAND” QUALIFICATIONS
Slide 10: What Is a Successful Company?
WHAT IS A SUCCESSFUL COMPANY? 1 Is there a market? 2 How big is the market? 3 Will this Company still be in business in 10 years time?
Slide 11: 1. Is There a Market?
1. IS THERE A MARKET? SCHOOL LEAVER MARKET (EXCLUDES THE ADULT LEARNER MARKET) Number of NSC school leavers (full time) in SA qualifying for post-school education (HC, diploma and degree) vs first year enrolments in public HEI 442 672 +32% 56% 334 718 shortfall is compounded annually 168 388 193 282
Slide 12: 2. How Big Is the Market?
2. HOW BIG IS THE MARKET? NUMBER OF STUDENTS ENROLLED AT PUBLIC STUDENT NUMBERS: PUBLIC VS PRIVATE (2017) UNIVERSITIES HAS DOUBLED Private enrolments as percentage of total in SA: 15% The global average is closer to 35% Our public universities are full Lack of infrastructure Limited subsidies
Slide 13: SA & Global: Private Participation
SA & GLOBAL: PRIVATE PARTICIPATION % of students at private higher education institutions SA students 185 046 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 15% SA (2017) 31% OECD (2013) 88% BRAZIL (2012) 93% CHILE (2013)
Slide 14: 3. Will This Company Still Do Business in 10 Years?
3. WILL THIS COMPANY STILL DO BUSINESS IN 10 YEARS TIME? 840 STUDENTS 12 976 STUDENTS 35STUDENTS 000 56 000 STUDENTS 100 000+ STUDENTS ? JAN 3 OCT! students PAT of R500m 2017 2017 2026
Slide 15: 56 000 Students by 2026
56 000 STUDENTS BY 2026 IF WE WANT TO STRIKE 56 000 STUDENTS BY 2026, THEN WE NEED TO GROW BY 8% PER ANNUM +8%
Slide 16: Migration
MIGRATION With the creation of faculties and with a chance of becoming a fully-fledged university over time, it makes sense to stay with a pure brand
Slide 17: Greenfield Developments
GREENFIELD DEVELOPMENTS SNe. he aN N | NS ) | | ; ] { ! { 1] \ y | | j INT
Slide 18: Greenfield Developments: Opportunity in Johannesburg
GREENFIELD DEVELOPMENTS Opportunity in Johannesburg
Slide 19: Greenfield Developments: Durbanville
GREENFIELD DEVELOPMENTS DURBANVILLE
Slide 20: Greenfield Developments: Centurion
GREENFIELD DEVELOPMENTS CENTURION
Slide 21: 2019 Academic Project
2019 ACADEMIC PROJECT •! ACADEMIC PERFORMANCE: 7 294 graduates; 81% average module success rate •! INTERNATIONALISATION: 34 active international partnerships and collaboration agreements •! STAFF QUALIFICATIONS: 280 staff with Masters/Doctorate qualifications; 73 in progress •! STAFF RESEARCH: 113 r
Slide 22: What We Delivered
WHAT WE DELIVERED
Slide 23: What We Delivered: Promises of the Pre-Listing Statement
WHAT WE DELIVERED PROMISES OF THE PRE-LISTING STATEMENT HEADLINE EARNINGS (Rm) * PLS ACTUALS * Excludes a fair value adjustment in respect of contingent consideration. Including this fair value adjustment, the amount would be R70m.
Slide 24: Financial Highlights from 2018 to 2019
FINANCIAL HIGHLIGHTS FROM 2018 TO 2019 STUDENT NUMBERS REVENUE EBITDA 31 869 R815m R180m 29 885 R633m R129m 7% 29% 40% CORE HEADLINE EARNINGS HEPS CHEPS R88m 8.5 cps 10.8 cps ! ! R70m 7.8 cps 8.6 cps 26% 9% 26%
Slide 25: Financial Information
FINANCIAL INFORMATION
Slide 26: Highlights for 2019
HIGHLIGHTS FOR 2019 •! First year in which all the subsidiaries are included in the results for the full year •! IFRS 16 applicable from 1 January 2019 •! Acquired land and semi-complete structure in Centurion (R110m) in September 2019 – Construction has commenced (to open in 2021) •! Acquired remai
Slide 27: 2019 Group Organogram
2019 GROUP ORGANOGRAM 100% 87.2% 100% 100% 100% 100% 74% 14 PTA • JHB • CPT • KZN • PE • Windhoek CAMPUSES
Slide 28: Towards STADIO
TOWARDS STADIO Faculty of Faculty of Faculty of Faculty of Faculty of Faculty of Graduate Medicine & Commerce, Engineering & Agriculture & Creative Education & School of Health Management Information Environmental Economies Humanities Business Sciences & Law Technology Sciences Expansion plan
Slide 29: Student Numbers (Actual)
STUDENT NUMBERS (ACTUAL) 31 DECEMBER 2019 31 DECEMBER 2019 (EXCLUDING MILPARK)
Slide 30: Student Numbers (Like-for-Like)
STUDENT NUMBERS (LIKE-FOR-LIKE) SEMESTER 1: 30 JUNE 2019 ON CAMPUS OFF CAMPUS TOTAL Excluding cyclical B2B business 16% (2019 vs 2018) SEMESTER 2: 31 DECEMBER 2019 Excluding cyclical B2B business 19% (2019 vs 2018)
Slide 31: Student Number Analysis
STUDENT NUMBER ANALYSIS STADIO STUDENT NUMBERS SEMESTER 1 ENROLMENTS SEMESTER 2 ENROLMENTS. YOY ILLUSTRATIVE FACULTY 30JUN17 | 30JUN18 30JUN19 GROWTH YOY 31 DEC 17 31 DEC 18 31DEC19 GROWTH Commerce, Law & Management 19 834 21648 1% Creative Economies 2 749 2889 6% Education & Humanities 1112 1735 79
Slide 32: Student Retention and Graduation Rate
STUDENT RETENTION AND GRADUATION RATE DROPOUT RATE GRADUATION RATE RETENTION RATE
Slide 33: Revenue
REVENUE REVENUE (Rm) REVENUE GROWTH (Rm)
Slide 34: Loss Allowance
LOSS ALLOWANCE PRE RECOVERIES LOSS ALLOWANCE AS A % OF REVENUE POST RECOVERIES
Slide 35: Impact of IFRS 16
IMPACT OF IFRS 16 STADIO IFRS 16 IMPACT CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | Before | _ After IFRS 16 IFRS 16 Rm DEC 2019 DEC 2019 of ehbage Rental expense (46) (1) 34 Depreciation & amortisation (41) (61) (20) Investment income 26 28 2 Finance cost (1) (20) (19) EBITDA 146 180 34 Profit
Slide 36: EBITDA
EBITDA EBITDA (Rm) EBITDA MARGIN %
Slide 37: EBITDA Growth
EBITDA GROWTH EBITDA GROWTH (Rm)
Slide 38: Headline Earnings
HEADLINE EARNINGS HEADLINE EARNINGS (Rm) HEPS (cps)
Slide 39: Core Headline Earnings
CORE HEADLINE EARNINGS CORE HEADLINE EARNINGS (Rm) CHEPS (cps)
Slide 40: Core Headline Earnings Movement
CORE HEADLINE EARNINGS MOVEMENT CORE HEADLINE EARNINGS (Rm)
Slide 41: Statement of Financial Position
STATEMENT OF FINANCIAL POSITION •! Impacted by IFRS 16 •! Raised R200m RCF •! Drawn down R65m •! Debt capacity up to 2.5 x EBITDA •! Gearing ratio 15% (4% excluding IFRS 16 lease liability)
Slide 42: Capital Invested
CAPITAL INVESTED STADIO FULL YEAR CAPITAL INVESTED (Rm) 2017 Acquisitions Infrastructure development and capital assets Programme development Total Cumulative investment
Slide 43: Cash Utilisation
CASH UTILISATION R121m Operating cash
Slide 44: Cash Flow Generation
CASH FLOW GENERATION STADIO CASH GENERATED FROM OPERATIONS (Rm) DEC 2018 DEC 2019 Net cash generated from operations (before working capital changes) 134 202 Working capital changes (34) (12) Net cash generated from operations 100 190 Cash generated from operations as % of EBITDA 78% 105% Free cash
Slide 45: Where Is Chris van der Merwe Going?
WHERE IS CHRIS VAN DER MERWE GOING?
Slide 46: Career Path from Age 36–58
CAREER PATH FROM AGE 36 – 58 •! 1998: Founded CURRO with 28 learners •! 2011: Listed CURRO on Alt-X •! 2012: CURRO moved to the JSE’s main board •! 2017: Stepped down as CEO of CURRO •! 2017: July, Accepted the challenge to execute the pre-listing statement’s promises of STADIO HOLDINGS •! 2017: Oct
Slide 47: Chris Vorster: How I See the Next 3 Years
CHRIS VORSTER: HOW I SEE THE NEXT 3 YEARS
Slide 48: Introducing Chris Vorster
INTRODUCING CHRIS VORSTER •! 53 years of age •! Been in higher education since 1992 •! RAU, Technikon SA and then founded Southern Business School (SBS) in 1996 •! STADIO HOLDINGS’ acquisition of SBS in 2018 •! Appointed Chief Operating Officer in August 2019 •! Honoured to be appointed as STADIO HO
Slide 49: Huge Potential for STADIO
HUGE POTENTIAL FOR STADIO •! Great opportunity for STADIO to fill the gap in private higher education with the establishment of a multi-faculty private higher education institution (HEI) •! Working towards approximately six faculties •! STADIO offers both on campus and off campus modes of learning (
Slide 50: Realising the Potential
REALISING THE POTENTIAL STADIO + Building systems, processes, procedures and policies a PHASE 2 + Developing ‘The STADIO Way’ Acquisition Consolidation + Getting fit for our target of 100 000 students v 100 000
Slide 51: Realising the Potential: Current Focus & Priorities
REALISING THE POTENTIAL STADIO CURRENT FOCUS & > + Building 2 multi-faculty campuses » + Developing robust systems for PRIORITIES off campus learning to service our target of 80 000 students [ North - CENTURION . + Developing relevant fees South - OURBANVILIE “in-demand” programmes ‘ai 14 other buil
Slide 52: STADIO Will Become a Real Alternative to UNISA
STADIO WILL BECOME A REAL ALTERNATIVE TO UNISA – AND THE PUBLIC UNIVERSITIES.
Slide 53: Ultimately a First Choice for All School Leavers
AND ULTIMATELY A FIRST CHOICE FOR ALL SCHOOL LEAVERS AND WORKING ADULTS!
Slide 54: Questions
QUESTIONS
Slide 55: Thank You
THANK YOU ENKOSI RE A LEBOGA DANKIE
Slide 56: Towards STADIO
TOWARDS STADIO HEN