Stadio Holdings Pty Ltd. · JSE:SDO
Stadio Holdings Pty — FY2020 Earnings Presentation
62 slides from Stadio Holdings Pty's earnings presentation, Mar 15, 2021
Slide 1: 2020 Annual Results Presentation
2020 Annual Results Presentation 15 March 2021
Slide 2: Presenting
PRESENTING: STADIO @ EMBURY LISOF sassuss S MILPARK EDUCATION
Slide 3: Presentation Overview
33 PRESENTATION OVERVIEW 1 2020 feedback 2 High-level financial overview 3 Looking ahead to 2021 and beyond 4 2020 Financial Results
Slide 4: Our Purpose and Vision
4 OUR PURPOSE: To empower the nation by widening access to higher education OUR VISION: To be a leading Higher Education provider, offering qualifications aligned with the needs of societies, students and the world of work
Slide 5: 2020 Overview
2020 OVERVIEW
Slide 6: COVID-19
COVID-19 The Health and Safety of our staff and students The continuation of the academic project The protection of financial resources as well as stakeholders’ interests:
Slide 7: 2020 Highlights (Despite COVID-19 Challenges)
7 2020 HIGHLIGHTS (DESPITE COVID-19 CHALLENGES)
Slide 8: Introducing STADIO
INTRODUCING STADIO A NEW VISION IN HIGHER EDUCATION WwW Ww Ss
Slide 9: An institution for the real-world
. . . An institution for the real-world
Slide 10: STADIO Brand
STADIO BRAND STADIO ATIO ws ' ANEW VISION IN HIGHER EDUCATION MORE CES SIBLEE DUC FOR MORE S1U i \\ 4
Slide 11: STADIO Brand
1111 STADIO BRAND OR TAMBO INTERNATIONAL AIRPORT
Slide 12: Financial Highlights from 2019 to 2020
12 FINANCIAL HIGHLIGHTS FROM 2019 TO 2020 • EBITDA adjusted to exclude the CA Connect fair value adjustment • Fair value adjustment in respect the CA Connect acquisition due to outperformance of the PGDA • Increase in loss allowance
Slide 13: 5 Year Financial Overview
13 5 YEAR FINANCIAL OVERVIEW STADIO 2016 2017 2018 2019 2020 Student Numbers 840 12.976 29 885 31869 35 031 Revenue (Rm) 46 122 633 815 933 EBITDA - adjusted (Rm) i 0.5 129 196 253 Core Headline Earnings (Rm) 8 3 70 88 117 Core Headline Earnings per share (cents) 17 0.6 8.6 10.8 14.2 n=
Slide 14: Where Are We Going?
WHERE ARE WE GOING?
Slide 15: 2021 – What's in Store?
2021 – WHAT’S IN STORE? • COVID-19 is still here • will challenge all modes of learning delivery (contact classes, assessments, graduations, etc) • will challenge corporate clients and learnerships • requires flexibility and good communication • We are STADIO • Expanding infrastructure for both dist
Slide 16: Student number milestones to 2026
80% DISTANCE LEARNING 20% CONTACT LEARNING 840 STUDENTS 12 976 STUDENTS 35 031 STUDENTS 56 000 STUDENTS 100 000+ STUDENTS ? JAN 3 OCT DEC PAT R500m 2017 2017 2020 2026*
Slide 17: Positioning, Consolidation, Growth
POSITIONING CONSOLIDATION GROWTH • Acquisition of • Registration of single higher • Multi-faculty campuses open quality brands education institution, STADIO • Expansion of programme • Migration of underlying brands into offerings through mode and ONE BRAND streams • Launch of STADIO • Continue to ‘g
Slide 18: Operational Excellence and Product Leadership
1818 3 DISTINCT INSTITUTIONS >> >> >> 100% 100% Operational Excellence 87.2% Product Leadership Product Leadership 74% 14 PTA • JHB • CPT • KZN • PE • Windhoek CAMPUSES
Slide 19: What We Stand For
1919 WHAT WE STAND FOR • We are not striving to be another public university • We’re an institution for the “real-world” • Offering programmes which are Relevant Flexible Aligned to the world-of work Fill the skills-gap, and Meet the high academic standards of a registered higher education
Slide 20: What We Stand For
20 20 WHAT WE STAND FOR • We are opening the doors of Higher Education to more individuals • Making higher education more affordable and accessible • Providing International partnerships and opportunities • With a strong focus on employability
Slide 21: Supported by Our Key Focus Areas
21 SUPPORTED BY OUR KEY FOCUS AREAS - ‘WWS’ Operational Excellence, Customer Intimacy, Product Leadership
Slide 22: Widening Access
22 22 WIDENING ACCESS • Higher education is AVAILABLE to more individuals • HIGHER CERTIFICATES to Doctorates • AFFORDABILITY • Expansion of DISTANCE LEARNING offerings • GEOGRAPHIC EXPANSION - new Centurion mega-campus
Slide 23: Widening Access Through Distance Learning
23 WIDENING ACCESS THROUGH DISTANCE LEARNING
Slide 24: Widening Access Through Geographic Expansion
24 Photos of centurion WIDENING ACCESS THROUGH February 2021 GEOGRAPHIC EXPANSION
Slide 25: Widening Access – STADIO Centurion
WIDENING ACCESS – STADIO CENTURION
Slide 26: Widening Access – Geographical Expansion
26 26 WIDENING ACCESS – GEOGRAPHICAL EXPANSION CONTACT LEARNING DISTANCE LEARNING Our strategy is not to build a mega-campus in every major city 20% 80%
Slide 27: World-of-Work
27 27 WORLD-OF-WORK OTHERS PROMISE IT, WE LIVE IT… 85% 844% GRADUATE DESIRABILITY SURVEY 85% of respondents viewed STADIO’s graduates as “work ready” 45% of respondents actively recruited graduates from STADIO Overall, significant satisfaction with (i) graduates’ discipline knowledge, emphasising th
Slide 28: World-of-Work
28 28 WORLD-OF-WORK • 2021 Academic strategy is focused on ensuring relevance and alignment with industry • Industry participation in new programme development, curriculum design, and content development • Lectures and seminars by members of industry built into the teaching and learning programme •
Slide 29: Student Centredness
29 29 STUDENT CENTREDNESS The Academic Promise is built on the principles of STUDENTS AT THE CENTRE - LEARNING AT THE CORE “We believe that having admitted you as a student, we must do all things reasonable and practical to support you to succeed. It is our commitment to provide the enabling environ
Slide 30: Centre for Lifelong Learning
30 30 CENTRE FOR LIFELONG LEARNING OPPORTUNITIES WITH HARVARD PARTNERSHIP WITH EDGE MEDIA ONLINE PROGRAMMES OPEN TO ALL (CORPORATES & INDIVIDUALS) NON-FORMAL / SHORT-COURSES TAILORED TO CORPORATES FORMAL PROGRAMMES TO THE WORKPLACE
Slide 31: Growth Opportunities
3131 GROWTH OPPORTUNITIES NEW PROGRAMMES, STREAMS & MODES (INCLUDING INTERNATIONAL HYBRID COLLABORATION LEARNING) INCREASING GEOGRAPHIC FOOTPRINT UTILISATION OF BUILDINGS CLL
Slide 32: New Programmes for 2021
32 32 NEW PROGRAMMES FOR 2021 STADIO HIGHER EDUCATION: DL – DISTANCE LEARNING • Doctorate in Management (DL) CL – CONTACT LEARNING • Doctorate in Policing (DL) • Diploma in Policing (DL) • BCom Project Management (CL) • HC in Digital Marketing (CL) • BA Law (DL) WIDER GROUP: • BA in Creative Writing
Slide 33: New Programmes for 2021
33 33 NEW PROGRAMMES FOR 2021 35 pipeline programmes, 9 of which have been submitted Across distance learning and contact learning modes of delivery. Covering the following areas: Accounting Architecture Agriculture Arts and Design Education (including Technical and Vocational Training) Engine
Slide 34: 2021 Corporate Developments
34 2021 CORPORATE DEVELOPMENTS • Feb 2021: Transfer of Durbanville land (to develop for likely opening in 2024) • End of March: Acquisition of SBS Namibia (26%) • CA Connect - entered into negotiations to early settle the remaining earn-out - building a professional School of Accounting - retention
Slide 35: To Recap How We See It
35 TO RECAP HOW WE SEE IT STADIO HOLDINGS GROWTH Tt + Site extensions & new buildings + New programme development + Centre for lifelong learning * Quality assurance + International collaborations STRONG FOUNDATION + New organisational structure * Consolidation of businesses + Infrastructure developm
Slide 36: Hazel Henderson quote
“If we can recognise that change and uncertainty are basic principles, we can greet the future and the transformations we are undergoing with the understanding that… we do not know enough to be pessimistic.” Hazel Henderson
Slide 37: Annual Financial Results
2020 ANNUAL FINANCIAL RESULTS
Slide 38: 2020 Highlights
38 2020 HIGHLIGHTS • 26 October 2020 – Business Transfer to STADIO Higher Education approved • Trademark impairment of R40m • Outperformance of PGDA and PGDA Bridging programme • Revised fair value loss adjustment of R207m • COVID-19 pandemic • Successfully completed 2020 academic year in 2020 • Low
Slide 39: Total Student Numbers (Like-for-Like)
39 TOTAL STUDENT NUMBERS (LIKE-FOR-LIKE) SEMESTER 1: 30 JUNE SEMESTER 2: 31 DECEMBER 45000 45000 17% 42000 16% 42000 39000 39000 10% 36000 10% 36000 35 031 33000 31 053 33000 31 869 29 885 30000 28 280 30000 27 584 27000 26 334 27000 23 752 24000 24000 21000 21000 18000 18000 15000 15000 12000 12000
Slide 40: Student Mix: Total Student Numbers
40 STUDENT MIX: TOTAL STUDENT NUMBERS (LIKE-FOR-LIKE) SEMESTER 1: 30 JUNE SEMESTER 2: 31 DECEMBER 6 269 6 367 20% 18% 24 784 28 664 80% 82% DISTANCE LEARNING CONTACT LEARNING
Slide 41: Student Numbers - Contact Learning
41 STUDENT NUMBERS - CONTACT LEARNING SEMESTER 1: 30 JUNE SEMESTER 2: 31 DECEMBER 8000 8000 7000 3% 7000 3% 6 269 6 197 6 367 6 081 6000 6000 5 402 5 500 5000 4 755 5000 4 833 4000 4000 3000 3000 2000 2000 1000 1000 0 0 JUN 17 JUN 18 JUN 19 JUN 20 DEC 17 DEC 18 DEC 19 DEC 20
Slide 42: Student Numbers - Distance Learning
42 STUDENT NUMBERS - DISTANCE LEARNING SEMESTER 1: 30 JUNE SEMESTER 2: 31 DECEMBER 45000 45,000 42000 42,000 39000 39,000 21% 36000 20% 36,000 33,000 33000 12% 30000 12% 30,000 28 664 27,000 25 672 27000 24 784 24 385 24000 22 199 24,000 22 751 20 932 21000 18 997 21,000 18000 18,000 15000 15,000 12
Slide 43: Revenue
43 REVENUE REVENUE (R millions) COVID-19 IMPLICATIONS 14% 1000 R933m Lower contributions from 900 • R39m of corporate R815m 800 business/learnerships deferred or cancelled (mainly banking sector) 700 R633m • Short courses: (R4m) 600 • Sundry income*: (R2m) 500 400 * Includes hostel income, canteen s
Slide 44: EBITDA & EBITDA Margin
44 EBITDA & EBITDA MARGIN EBITDA (R millions) EBITDA MARGIN % IMPACTED BY: 250 • Fair value loss adjustment: (R207m) 225 • Increase in loss allowance: (R42m) 22% • Additional COVID-19 related costs: (R4m) 200 R180m • COVID-19 related savings: R40m 175 20% 150 R129m 125 100 5% 75 50 24% R46m 0% 25 R1
Slide 45: EBITDA Movement
45 EBITDA MOVEMENT EBITDA MOVEMENT (R millions) 35% (107%) R64m (R192m) R180m 20% (23%) R36m (R42m) (75%) R46m
Slide 46: CA Connect Acquisition
46 CA CONNECT ACQUISITION • Acquired CA Connect in April 2018 • Specialists in the offering of the Post Graduate Diploma in Accounting (feeder qualification for students aspiring towards becoming SAICA accredited chartered accountants) • Acquisition price was subject to an earnout - 4.5x growth in E
Slide 47: Loss Allowance as % of Revenue
47 LOSS ALLOWANCE AS % OF REVENUE LOSS ALLOWANCE AS % OF REVENUE COVID-19 IMPLICATIONS 10% • Slow down in collections 9% 8.6% relative to 2019 8% • 7% increase in total collections (Dec 2020 vs 7% Dec 2019) 6% • Increased loss allowance to 5% 4.3% account for economic 4% 3.2% impact of COVID-19 3% 2
Slide 48: Cash Collections as % of Revenue
48 CASH COLLECTIONS AS % OF REVENUE COLLECTIONS AS A % of REVENUE 180% 160% 151% 139% 140% 120% 100% 97% 100% 90% 94% 90% 84% 80% 60% 40% 20% 0% MARCH YTD JUNE YTD DEC YTD POST YEAR-END TO MARCH 2019 2020 * Excludes 2018 and 2019 subsequent receipts
Slide 49: COVID-19 Savings/(Costs)
49 COVID-19 SAVINGS/(COSTS) COVID-19 IMPLICATIONS • Freeze on new hires • Government relief initiatives • Significant savings on academic expenses (exam venue hire, courier costs, invigilators, graduations) as well as general expenses (travel, printing & stationery etc.)
Slide 50: Adjusted EBITDA & EBITDA Margin
50 ADJUSTED EBITDA & EBITDA MARGIN ADJUSTED EBITDA* (R millions) ADJUSTED EBITDA MARGIN % 300 27% R253m 250 24% 200 R196m 20% 150 R129m 100 50 24% 0% R11m R1m - DEC 16 DEC 17 DEC 18 DEC 19 DEC 20 * Adjusted for fair value loss adjustment
Slide 51: Profit/(Loss) for Period
51 PROFIT/ (LOSS) FOR PERIOD PROFIT/(LOSS) FOR PERIOD (R millions) IMPACTED BY: • Fair value loss adjustment: 100 R77m R84m (R207m) • Impairment of intangible 50 assets: (R51m) 0 (R5m) (50) (100) (150) (R138m) DEC 17 DEC 18 DEC 19 DEC 20
Slide 52: Impairment of Intangibles
52 IMPAIRMENT OF INTANGIBLES • Business Transfer approved in October 2020 • R40m impairment of brands (excl Milpark, AFDA) • R11m impairment of computer software: • Reassessed system requirements • Will utilise existing systems in the medium term • Cancelled contract with supplier (after considering
Slide 53: Headline Earnings/(Loss)
53 HEADLINE EARNINGS/(LOSS) HEADLINE EARNINGS/(LOSS) (R millions) HEPS (cps) 80 R70m 10 R63m 8.5 cps 8 7.8 cps 60 6 40 4 20 2 0 0 (R7m) (20) (2) (1.2 cps) (4) (40) (6) (60) (8) (R70m) (8.5 cps) (80) (10) DEC 17 DEC 18 DEC 19 DEC 20 DEC 17 DEC 18 DEC 19 DEC 20
Slide 54: Core Headline Earnings
54 CORE HEADLINE EARNINGS CORE HEADLINE EARNINGS (R millions) CORE HEPS (cps) 31% 150 15 14.2 cps 33% 120 R117m 12 26% 10.8 cps 26% R88m 9 8.6 cps 90 R70m 60 6 30 3 R3m 0.6 cps 0 0 DEC 17 DEC 18 DEC 19 DEC 20 DEC… DEC 17 DEC… DEC 18 DEC… DEC 19 DEC… DEC 20 DEC… DEC… DEC… DEC…
Slide 55: Core Headline Earnings Movement
55 CORE HEADLINE EARNINGS MOVEMENT IMPACTED BY: • Fair value loss adjustment: (R207m) • Impairment of intangible 29% (34%) assets: (R51m) 11% 27% R 25m (R 30m) 33% R 10m R 24m R 117m R 88m
Slide 56: Statement of Financial Position
56 STATEMENT OF FINANCIAL POSITION • Invested R105m on capital expenditure • Impaired R51m of intangible assets • Debt at year end R45m • R117m of cash on hand • Gearing ratio 14% (3% excluding IFRS 16 lease liability)
Slide 57: Cash Flow Generation
57 CASH FLOW GENERATION * EBITDA excluding fair value loss adjustment
Slide 58: Capital Invested
58 CAPITAL INVESTED CAPITAL INVESTED (CR millions) DEC 2016 DEC 2017 Acquisitions Infrastructure development and capital assets DEC 2018 DEC 2019 Program me development Total CUMULATIVE INVESTMENT STADIO — HoLDINGs — DEC 2020 n=
Slide 59: Cash Utilisation
59 CASH UTILISATION CASH UTILISATION (R millions) R195m (R27m) (R57m) (R48m) R117m (R20m) R93m (R8m) (R11m) OPERATING LEASE CENTURION CAPITAL DEBT 1 JAN 20 ACQUISITIONS OTHER 31 DEC 20 CASH PAYMENTS DEVELOPMENT EXPENDITURE REPAYMENT
Slide 60: 2021 Capital Expenditure: Growth Projects & Acquisitions
60 2021 CAPITAL EXPENDITURE: GROWTH PROJECTS & ACQUISITIONS
Slide 61: Q&A
Q& A OUR PURPOSE: To empower the nation by widening access to higher education
Slide 62: Thank You
THANK YOU ENKOSI RE A LEBOGA DANKIE