Slide 1: ASX Announcement
ASX Announcement G8 Education Limited (ASX:GEM) 27 February 2024 The Manager Market Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 Dear Sir / Madam I enclose the Investor Presentation for the full year ended 31 December 2023 for G8 Education Limited. Yours sincerely Tracey Wood Ch
Slide 2: 2023 Full Year Results Investor Presentation
2023 FULL YEAR RESULTS Investor Presentation 27 February 2024 UPDATE IMAGE ASX:GEM 2023 Full Year results 1
Slide 3: Disclaimer & Non-IFRS Information
DISCLAIMER & NON-IFRS INFORMATION The material in this presentation has been prepared by G8 Education Limited (G8) and is general background information about G8’s activities current as at the date of this presentation. The presentation does not purport to be complete and should be read in conjuncti
Slide 4: Acknowledgement of Country
Slide 5: Agenda
AGENDA SUMMARY & PROGRESS Pejman Okhovat FINANCIAL PERFORMANCE Sharyn Williams CURRENT TRADING & MEDIUM-TERM OUTLOOK Pejman Okhovat Q&A Pejman Okhovat & Sharyn Williams APPENDIX G8 Education | 2023 Full Year results | 4
Slide 6: Summary & Progress
SUMMARY & PROGRESS 2023 Full Year results | 5
Slide 7: Key Messages
KEY MESSAGES Improved family experience, team retention and operational disciplines reflected in earnings growth CONTINUED EARNINGS RECOVERY POSITIVE OUTCOMES FROM FOCUS ON CASH GENERATION DRIVES LOWER NET DEBT TEAM AND FAMILY RELATIONSHIPS AND SOLID DIVIDEND • Strong revenue and earnings growth acr
Slide 8: Financial Overview
FINANCIAL OVERVIEW Solid earnings recovery underpinned by improved operational performance yielding dividend growth OPERATING REPORTED GROUP OCCUPANCY Excludes non-trading1 items and Kiddo and includes lease interest expense Statutory All references to occupancy include all centres Revenue Revenue 9
Slide 9: Environmental, Social & Governance Highlights
ENVIRONMENTAL, SOCIAL & GOVERNANCE HIGHLIGHTS Continued focus on our commitment to driving a sustainable future through ESG Risk Management Quality Centres Team Retention Emissions Reviewed and improved our 90% of our long day care 12% pts increase in Teacher 10% reduction in Scope 1 and Enterprise
Slide 10: Balanced Scorecard
BALANCED SCORECARD A balanced approach on our imperatives delivering improvement in our key KPIs Strategic focus area Measure CY23 (Actual) Progress CY22 to CY23 Team Team Team retention 74% 4% pts Family NPS1 44 121 Experience % of LDC2 centres meeting Quality or exceeding National 90% 1% pts Quali
Slide 11: Team
TEAM Strong focus on our people resulting in significant improvement in team outcomes ATTRACTING TEAM RETAINING TEAM GROWING OUR OWN TALENT • Reduced vacancies resulted in no capped centres • Team retention continues to gain positive • Strengthening early childhood workforce through due to workforce
Slide 12: Family Experience
FAMILY EXPERIENCE Focus on critical part of our family journeys driving improvements in their experience NPS FREQUENCY1 FAMILIES – NEW AND EXISTING • ‘Always on’ family NPS survey delivering real time • Proactive support provided for G8 families to • Improved team retention and development measure o
Slide 13: Quality, Education & Inclusion
QUALITY, EDUCATION & INCLUSION Delivering better outcomes for children through improved quality, team development and educational programs QUALITY EDUCATION & INCLUSION • Another year of improved quality ratings achieving 90% ‘meeting/exceeding’ • Targeted support for our early childhood teachers an
Slide 14: Operating Model
OPERATING MODEL Customer retention benefits evident in a positive CY23 closing occupancy rate Group Occupancy OCCUPANCY 80.0% • Occupancy for the year was 70.4%, 0.2% pts below the pcp and 2.2% pts below 78.0% Vacation Care impacts CY19 76.0% 74.0% • CY23 H2 occupancy benefited from higher frequency
Slide 15: Financial Sustainability
FINANCIAL SUSTAINABILITY Improved operating cashflow and continued network optimisation resulting in strong balance sheet CAPITAL ALLOCATION NETWORK OPTIMISATION • Strong operating cash flow position enabled improved returns to shareholders • Continued network optimisation with exit of 11 centres an
Slide 16: Financial Performance
FINANCIAL PERFORMANCE 2023 Full Year results | 15
Slide 17: Group Performance
GROUP PERFORMANCE Disciplined cost management and financial controls delivering solid earnings growth $m CY23 CY22 Change • Operating and Statutory NPAT growth and margin expansion driven by improved centre performance, well managed Support Office costs and lower net finance costs Group revenue 985.
Slide 18: Centre Performance
CENTRE PERFORMANCE Focus on operational execution coupled with cost management delivering improved results Centre performance • Operating and statuary NPAT continued to deliver solid results in H2 with $m CY23 CY22 Change centre margin improving by 1%pt vs pcp driven by: Group occupancy 70.4% 70.6%
Slide 19: Capital Allocation
CAPITAL ALLOCATION Strong free cashflow has funded capital investment, increased dividends and reduced net debt Strong cash Operating cash flow • Final fully franked dividend 4.5c up 50% and representing 65% of reported conversion1 $131m 108% NPAT Buy- backs • Balance sheet approach remains conserva
Slide 20: Current Trading & Medium-Term Outlook
CURRENT TRADING & MEDIUM-TERM OUTLOOK UPDATE IMAGE 2023 Half Year results | 19
Slide 21: Current Trading & Outlook
CURRENT TRADING & OUTLOOK Encouraging start with an optimistic outlook TRADING UPDATE OUTLOOK Better start to the year with continued focus on execution We remain focused on delivering a ‘Fit Core’ in a dynamic and challenging environment. • Group ‘spot’ occupancy1 is 66.3%, 1.7% pts higher than CY2
Slide 22: Q&A
Q&A UPDATE IMAGE 2023 Full Year results | 21
Slide 23: Appendix
APPENDIX UPDATE IMAGE 2023 Full Year results | 22
Slide 24: Financial Statements
FINANCIAL STATEMENTS Consolidated Income Statement Balance Sheet statement $m CY23 CY22 % change $m 31 December 2023 31 December 2022 Continuing operations ASSETS Current assets Revenue 983.4 901.2 Cash and cash equivalents 40.3 37.8 Other income 3.6 4.0 Trade and other receivables 23.7 22.6 Other c
Slide 25: Cash Flow
CASH FLOW NETWORK Cash flow $m CY23 CY22 % change Cash flows from operating activities Receipts from customers (inclusive of GST) 989.9 897.7 10.3% Payments to suppliers and employees (inclusive of GST) (740.4) (707.8) 4.6% Interest received 1.7 0.4 325.0% Interest paid (non-leases) (11.2) (10.0) 12
Slide 26: Fundamentals Supporting Demand Growth
FUNDAMENTALS SUPPORTING DEMAND GROWTH ECEC sector is viewed as critical to the Australian economy and has strong bi-partisan support Female participation continues to increase Net migration continues to recover Net supply growth trending higher % 63.0 700,000 yoy supply growth by quarter 600,000 4.0
Slide 27: Update on Key Ongoing Inquiries/Multi-Employer Bargaining
UPDATE ON KEY ONGOING INQUIRIES/MULTI-EMPLOYER BARGAINING Government maintains a highly engaged position in trying to provide the best outcome for all stakeholders in the childcare sector Productivity Multi-Employer ACCC Child Care Inquiry Commission Bargaining ECEC Inquiry • First Interim Report -