Accordant Group Limited · NZX:AGL
Accordant — AWF Madison Group — Investor Day (June 2017)
22 slides from Accordant's investor day presentation, June 2017
Slide 1: Positioning for Growth
Positioning for Growth Simon Bennett Chief Executive June 2017
Slide 2: NZX's Only Listed Recruiter
INN NZX’S ONLY LISTED RECRUITER INNA AWF MADISON A F MA madison absolutelT
Slide 3: What Drives Us
WHAT DRIVES US Our businesses strive to make a big impact on the growth and success of New Zealand. Structural challenges in the labour market require proactive solutions, and we are uniquely positioned to provide them. We believe it’s possible to deliver strong returns for our shareholders in a way
Slide 4: From Its Beginnings in 1988 to Today
FROM ITS BEGINNINGS IN 1988 TO TODAY
Slide 5: Hours Sold by Region
1,000,000 1,500,000 2,000,000 2,500,000 0 500,000 Northland Auckland Waikato/Bay of Plenty Hawkes Bay Taranaki/Manawatu Wellington 10% Year-on-year growth in hours sold Tasman/Marlborough HOURS SOLD BY REGION Christchurch Southland/Otago FY17 FY16
Slide 6: Platform Change
PLATFORM CHANGE • Consolidation of branch databases to centralised CRM. • Integration of operations systems across recruitment process.
Slide 7: The AWF Business Plan
THE AWF BUSINESS PLAN Continue strengthening our platform in order to source and safely place candidates in a skill-short market: People: The adaptability of our branch network is paramount. Customers: Expand our higher margin business and develop new service offerings to complement our core strengt
Slide 8: From Its Beginnings in 1998 to Today
FROM ITS BEGINNINGS IN 1998 TO TODAY
Slide 9: The Madison Business Plan
THE MADISON BUSINESS PLAN Maintain exceptional customer experience standards through our growth and amidst market challenges: People: Support skills development and high performance culture in an all-encompassing role. Customers: Focus on excellence in execution whilst having to “do more for less”.
Slide 10: Absolute IT Acquisition
ABSOLUTE IT ACQUISITION • The purchase price of $15.3 million comprised: » An initial cash payment of approximately $11.1 million, paid on 1 November 2016; and » An additional payment of up to $4.2 million, subject to Absolute IT’s earnings achieving defined thresholds for the 52 weeks to 1 November
Slide 11: From Its Beginnings in 2000 to Today
FROM ITS BEGINNINGS IN 2000 TO TODAY
Slide 12: The Absolute IT Business Plan
THE ABSOLUTE IT BUSINESS PLAN Ensure Absolute IT’s identity remains intact under new ownership, whilst leveraging group resources: People: Protecting our values-based hiring and culture is key to retaining and developing a high performing team. Customers: Our reputation and approach to doing busines
Slide 13: FY17 Financials
FY17 FINANCIALS $000’s FY 2014 FY 2015 FY 2016 FY 2017 Total Revenue 148,647 196,434 214,589 256,428 Employee benefit expense* -129,373 -172,112 -190,333 -229,150 EBITDA** 8,385 12,617 11,710 13,454 Profit for the period 3,952 5,416 5,202 5,867 14.9% * Wage and salary payments increase **EBITDA: ear
Slide 14: FY17 Financials
FY17 FINANCIALS 300 16 14 250 12 200 10 NZ$ million NZ$ million EBITDA** 150 8 Profit for the period Total Revenue 6 Employee benefit expense* 100 4 50 2 0 0 FY 2014 FY 2015 FY 2016 FY 2017 * Wage and salary payments **EBITDA: earnings before interest, tax, depreciation and amortisation
Slide 15: FY16 vs FY17 Group Revenue
FY16 VS FY17 GROUP REVENUE (NZ$ million) 256.4 19% 228.8 214.6 214.6 7% 7% 157.7 145.4 8% 69.2 71.1 3% 27.6 (5 MONTHS) GROUP EXCL. GROUP ABSOLUTE IT • Absolute IT was acquired 1 November 2016. • The 12 months Revenue to 31 March 2017 for Absolute IT was $72.8m
Slide 16: FY16 vs FY17 Group EBITDA
FY16 VS FY17 GROUP EBITDA (NZ$ million) 13.4 12.2 15% 11.7 15% 11.7 4% 1.2 Absolute IT GROUP EXCL. GROUP ABSOLUTE IT • Absolute IT was acquired 1 November 2016. • No allowance within AWF has been provided for 'lost‘ business / EBITDA due to the distraction associated with the implementation of the n
Slide 17: Impact of Absolute IT Acquisition
IMPACT OF ABSOLUTE IT ACQUISITION (NZ$ million) 350 8 7.5 301.6 300 7 256.4 5.9 6 250 5 200 Absolute IT 4 150 Total Group 3 100 2 2.4 50 72.8 1 27.6 0.8 0 0 5 Month Revenue Estimated Annualised 5 Month Net Profit After Estimated Annualised Net Contribution Revenue Contribution Tax Contribution Profi
Slide 18: Funding & Debt
FUNDING & DEBT • Term debt of $33.5m at 31 March 2017 (Limit $36m). • Net debt $32.4m at year end. • Overdraft facility of $12.0m. • Facilities expire 31 December 2019. • Interest expense $1.2m vs 1.3m last year. • Debtors at $45.5m vs $33.1m last year.
Slide 19: Dividend Chart
DIVIDEND CHART 16.5 6 16.0 5 15.5 4 15.0 NZ$ million Cent 14.5 3 16.2 14.0 15.2 15.2 2 13.5 14.0 1 13.0 12.5 0 FY14 FY15 FY16 FY17 Cents per dividend Dollar Value
Slide 20: NZX Price History
NZX PRICE HISTORY 07-06-2016
Slide 21: Investor Case
Investor Case • Track record of robust dividends. • AWF Madison Group offers a unique stock offering. • A broad client base is covered by 3 established companies, each with a differing revenue mix to provide dependable earnings. • Of value to the New Zealand economy. www.awfmadison.co.nz
Slide 22: Appendix A: Reconciliation of EBITDA to Net Profit
APPENDIX A Reconciliation of EBITDA to Net Profit for the period 2017 2016 EBITDA 13,454 11,710 Depreciation & Amortisation 3,003 2,772 Impairment (AWF IT legacy system) 443 - Finance costs 1,193 1,333 Investment Revenue (2) (35) Acquisition costs (IT Absolute) 262 - Net Profit before tax 8,555 7,64