Seek Limited · ASX:SEK
Seek — FY2021 Earnings Presentation
52 slides from Seek's earnings presentation, Aug 24, 2021
Slide 1: SEEK Limited – FY21 Full Year Results Presentation (ASX cover letter)
24 August 2021 The Manager ASX Market Announcements Office Australian Securities Exchange Dear Manager SEEK Limited – FY21 Full Year Results Presentation In accordance with the Listing Rules, I enclose SEEK’s FY21 Full Year Results Presentation for immediate release to the market. Yours faithfully,
Slide 2: FY21 Results Presentation
SEEK LIMITED FY21 RESULTS PRESENTATION 12 months to 30 June 2021 We help people live more fulfilling and productive working lives and help organisations succeed
Slide 3: Today's agenda
Today’s 1 Corporate Structure Changes agenda 2 FY21 Group Financial Performance 3 Asia Pacific & Americas (AP&A) 4 SEEK Investments 5 Strategy Update 6 FY22 Outlook SEEK Limited FY21 Results Presentation 2
Slide 4: Corporate Structure Changes
CORPORATE STRUCTURE CHANGES
Slide 5: New structure implemented
New structure implemented Capital flexibility, management alignment and greater focus SEEK Growth Fund Overview • Comprises core AP&A; and certain portfolio • Newly created unit trust in which SEEK will initially investments, primarily Zhaopin (23.5% interest) hold c84.5%1 of the units and SEEK’s in
Slide 6: Overview of the new structure
Overview of the new structure SEEK Growth Fund Assets owned and Assets owned by SEEK Growth Fund managed by SEEK1 and managed by SEEK Investments2 SEEK ANZ SEEK Asia Online Education Brasil Online OCC AP&A Other (formerly known as Caelum) HR SaaS Assets owned by SEEK and managed by SEEK Investments2
Slide 7: The SEEK Growth Fund
The SEEK Growth Fund • Unit trust seeded1 with OES and 14 ESVs (majority of SEEK’s existing ESV portfolio) in exchange for units in the Fund • Formation of new management company (SEEK Investments) led by Andrew Bassat, and the existing investment professionals from current SEEK Investments Fund • S
Slide 8: FY21 Group Financial Performance
FY21 GROUP FINANCIAL PERFORMANCE
Slide 9: FY21 Group Financial Results
FY21 Group Financial Results Revenue EBITDA1 NPAT excl. significant items1,2 Group A$1,591m A$474m A$141m +1% vs pcp +15% vs pcp +58% vs pcp Continuing A$760m A$332m A$135m Operations +17% vs pcp +30% vs pcp +68% vs pcp Discontinued Operations A$831m A$142m A$6m (10%) vs pcp (9%) vs pcp (34%) vs pcp
Slide 10: Profit and loss summary
Profit and loss summary FY21 vs FY20 results (A$m) Key points Constant 1 Continuing Operations: Revenue +17%, EBITDA +30% vs pcp Restated Growth Currency • ANZ revenue up 40% driven by job ad volumes, yield and growing depth FY21 FY20 2 % % revenue • SEEK Asia revenue down 2%1 and recovering but at
Slide 11: Cash flow summary
Cash flow summary FY21 movement in Net Debt (A$m) Key points FY21 1 EBITDA to operating cash flow2 conversion of 94% 1 Operating cash flows (excl. interest, tax etc) 313.6 • EBITDA to cash conversion decreased due to COVID-19 impacts to Interest, tax and transaction costs (89.5) billings in early FY
Slide 12: Balance sheet summary
Balance sheet summary Net Debt (A$m) Key points 30 June 30 June Movement 1 Borrower Group1 net debt of A$863m (30 June 2021) 2021 2020 1 • Reduced Borrower Group leverage2 due to Zhaopin transaction 1 SEEK Ltd Borrower Group Net Debt (863.3) (1,143.9) 280.6 and improved operating results (30 Jun 202
Slide 13: Asia Pacific & Americas (AP&A)
ASIA PACIFIC & AMERICAS (AP&A)
Slide 14: AP&A Highlights
AP&A Varied recovery by market v • ANZ strongest with record ad volumes in H2 21 Highlights • Asia recovering but at a slower rate and more variable due to ongoing COVID-19 impacts Key markets recovering EBITDA benefitted from strong revenue recovery in ANZ v well from COVID-19 lows and strategic pr
Slide 15: APAC key metrics
APAC key metrics SEEK ANZ SEEK Asia Delivering value 16m+ c40m c30m 40m+ for candidates Candidate Profiles1 Total monthly visits3 Candidate Profiles1 Total monthly visits3 90%+ of ANZ labour force2 c10% growth vs pre COVID-19 levels c13% of labour force2 Broadly in line with pre COVID-19 levels Deli
Slide 16: SEEK ANZ Recovery
SEEK ANZ Recovery Recovering well from COVID-19 lows SEEK ANZ - Volume trends Detailed Insights Job ads posted by month (‘000s) All industries have now returned to pre COVID-191 levels 250 • Strongest growth in H2 21 from Community Services & Development, Hospitality & Tourism, Trades & Services and
Slide 17: SEEK ANZ Performance
SEEK ANZ Performance Strong yield and depth performance as volumes recover Financials EBITDA A$m Growth Higher revenue benefitted EBITDA whilst reinvestment continued FY21 FY20 1 % • Ongoing investment in product & tech to strengthen platform, mainly Revenue 541.0 387.2 40% in areas such as data, AI
Slide 18: SEEK AU Placement share
SEEK AU Placement share Placement share dropped but activity on the platform increased Share of AU Placements1 (%) Activity on ANZ platform2 Last 12 months 14 Monthly Unique Visits ('m) 29.8% 13 12 11 6.9% 7.7% 3.1% 3.8% 10 1 9 Professional Social Online Aggregators SEEK Networks Networks Classified
Slide 19: SEEK Asia Recovery
SEEK Asia Recovery Variable recovery - strongest in key markets SEEK Asia - Volume trends Key insights by market Job ads volumes by month (% growth vs FY19) Hong Kong 40% • Strong recovery with acceleration in Q4 FY21 driven by 20% Corporates and SMEs • Stronger recovery in Engineering / Architectur
Slide 20: SEEK Asia Performance
SEEK Asia Performance Strong yield performance as markets gradually recover Financials EBITDA Constant A$m Growth Currency EBITDA impacted by lower revenue and increased re-investment SEEK Reported FY21 FY20 % % • Increase in product & tech investment to roll out several new products Revenue 145.6 1
Slide 21: LatAm Performance
LatAm Performance Focussed on re-building sustainable businesses despite COVID-19 challenges Brasil Online Key insights Markets remain significantly impacted by COVID-19 BRLm Growth • Both among the world’s most severely impacted countries Pro Forma FY21 FY20 % o Brasil Online: Revenue remains suppr
Slide 22: SEEK Investments
SEEK INVESTMENTS Oo)
Slide 23: Zhaopin Performance
Zhaopin Performance Steadily recovering after the impact of the pandemic, however competition remains intense Financials Key drivers of result RMBm Growth Online and adjacent revenue both showing steady recovery Pro Forma (100% basis) FY21 FY20 % • Online billings growing faster than realised revenu
Slide 24: OES Performance
OES Performance Benefitted from significant uplift in COVID-19 related demand for online education Financials Operational insights A$m Growth OES continues to deliver world class student outcomes Pro Forma (100% basis) FY21 FY20 % • 16k+ students across 6 university partners (AU & UK)2 Revenue 190.7
Slide 25: ESVs - Online Education
ESVs - Online Education Benefitting from structural shifts to online learning Online Program Management & Online Education Marketplaces Higher Education / Distribution 1 Investments in emerging leaders (formerly known as Caelum) Australia, US, NZ, UK Latin America Latin America Latin America UK, Eur
Slide 26: ESVs - HR SaaS
ESVs - HR SaaS Utilising technology to solve complex HR problems for organisations Investments in 2 emerging leaders Australia, Asia, UK & US Australia, NZ, UK & US Australia, NZ, UK & SE Asia Israel, UK, Europe & US • A leading digital learning • A talent acquisition suite • A HR Information System
Slide 27: ESVs - Contingent labour platforms
ESVs - Contingent labour platforms Tech-driven platforms driving efficiencies in the growing temporary labour market Investments in emerging leaders Europe & Latin America Australia & NZ UK Latin America & SE Asia Serving an important • A tech-enabled staffing • A tech-enabled • A tech-enabled marke
Slide 28: Strategy Update
STRATEGY UPDATE
Slide 29: SEEK's growth drivers
SEEK’s growth drivers Significant growth opportunities in Organic growth the focus, but our core businesses (ANZ and Asia) will consider M&A Underlying economic Enrichment and M&A to enhance growth and offline to expansion of products Aligning price capabilities and/or online migration including thr
Slide 30: Strategic focus areas
Strategic focus areas Investing in four core capabilities Focus areas Objectives Progress Scalable, reliable • Consolidate to one flexible platform to provide • Unified search platforms in March 2021 and and safe platforms scale efficiencies, enable rapid innovation and recommendation platform Augus
Slide 31: Platform Unification
Platform Goal is one unified platform within 3 years v • APAC employment marketplaces will be centrally hosted on an optimised ANZ platform Unification • Centralised platform will enable new products and enhancements to be deployed at scale across all markets, and improve reliability and security •
Slide 32: SEEK's strategic outlook over the next five years
SEEK’s Opportunity to double revenue over the next five years v • Aspirational but achievable given current market positions and size of the strategic addressable market • Focused on growth opportunities in our core businesses but may consider M&A to enhance capabilities and/or create options in new
Slide 33: Capital management approach
Capital management approach Including SEEK’s updated dividend policy Capital Management Approach Updated Dividend Policy From FY22 onwards Strong operating cash flows • Target payout of greater than 75% of “Cash NPAT less Capex” o Payout will be subject to forward-looking considerations Long-term in
Slide 34: Shareholder returns over time
Shareholder Total Shareholder Returns (TSR) returns over • c7x1 TSR vs ASX 200 since IPO despite the economic cycle and aggressive competition time • New structure expected to drive SEEK’s next leg of growth 3 1,781.3% SEEK continues to invest and Product & Tech 1,781.3 % innovate to deliver long-te
Slide 35: FY22 Outlook
FY22 OUTLOOK
Slide 36: Accounting & Reporting impacts FY22 and beyond
Accounting & Reporting impacts FY22 and beyond Discontinued Operations up until loss of control • Up until loss of control, the assets transferred from SEEK to the SEEK Growth Fund will be reported as Discontinued Operations in SEEK’s statutory financial results (consistent with FY21 treatment) SEEK
Slide 37: FY22 Guidance: SEEK (excluding the SEEK Growth Fund)
FY22 Guidance: SEEK (excluding the SEEK Growth Fund)1 Context v • Forecasting remains challenging given volatility caused by COVID-19, changes in hiring sentiment and FX o SEEK’s ad volumes have responded quickly to changes in COVID-19 restrictions, both positively and negatively. Yields are also se
Slide 38: FY22 Guidance: SEEK Growth Fund
FY22 Guidance: SEEK Growth Fund FY22 Guidance (excluding significant items) for the SEEK Growth Fund: v • SEEK’s equity accounted share of the NPAT losses to be in the range A$20m to A$25m for H1 22 Key assumptions: The SEEK Growth Fund • Point at which SEEK will lose control of the Fund is uncertai
Slide 39: Well positioned to grow long-term shareholder value
Well Attractive opportunity exists in our core markets to grow v revenue and expand margins over time positioned Leveraged to improving economic conditions and structural v to grow changes in the labour market long-term Ability to capture and apply deep and unique data to create v more value for can
Slide 40: Appendices
APPENDICES
Slide 41: A note to our FY21 statutory results
A note to our FY21 statutory results The new structure and Zhaopin sell down impacted the presentation of our FY21 statutory results • As a result of the structure changes and Zhaopin sell down, SEEK’s FY21 statutory financial results (as presented in SEEK’s Appendix 4E and Statutory Accounts) have
Slide 42: SEEK Group P&L detail
FY21 Financials (A$m)2 SEEK Group Constant FY20 Growth Currency FY21 (restated) % % SEEK ANZ 541.0 387.2 40% 40% P&L detail SEEK Asia 145.6 162.9 (11%) (2%) LatAm 49.7 77.5 (36%) (19%) AP&A Other 1.2 2.0 (40%) (40%) ESVs3 22.8 21.0 9% 10% Continuing Operations 760.3 650.6 17% 21% Zhaopin 577.1 749.6
Slide 43: Reconciliation to statutory results
Reconciliation to statutory results SEEK Group results versus those presented in SEEK’s statutory accounts (Segment Note) FY21 Financials (A$m) Significant items FY21 FY20 (restated) Continuing plus Continuing plus Continuing plus Continuing plus FY21 significant items of A$611.4m includes: Disconti
Slide 44: FY21 Segment Results
FY21 Segment Results Extract from SEEK’s Appendix 4E and Statutory Accounts (page 50) SEEK Limited FY21 Results Presentation 43
Slide 45: FY21 Pro forma Results
FY21 Pro forma Results Total SEEK Total Zhaopin Corporate Continuing Zhaopin Growth Total 2 Year ended 30 June 2021 AP&A (associate) ESVs Costs Operations (subsidiary) Fund SEEK Group Reported NPAT (as per Segment Note on previous page) 165.9 5.4 (6.4) (60.0) 104.9 657.4 (10.1) 752.2 Significant ite
Slide 46: Net Debt: Detail
Net Debt: Detail Year ended 30 June 2021 Facility Short-term Funds on Net Cash/ Borrowings Cash 2 Limit Investments deposit 2 (Debt) SEEK Ltd A$ bank debt A$612.5m (345.0) SEEK Ltd US$ bank debt US$552.5m (468.2) SEEK Ltd A$ Subordinated Floating Rate Notes A$225.0m (225.0) 1 SEEK Limited Borrower G
Slide 47: SEEK Group Capex
SEEK Group Capex Product & Technology (A$m)1 Key insights 106 110 106 Product and Technology: 25 • ANZ: improvements to hirer experience, AI & Search, Mobile 89 23 Apps, Candidate Profiles and Talent Search • Unification across Asia 62 • Overall product and tech spend increased vs pcp, however a 41
Slide 48: Sustainability focus areas
Sustainability focus areas Fair Hiring Modern Slavery Prioritising candidate safety, privacy and equity Risk profile • Jobs on SEEK’s employment marketplaces may expose • There is a risk that jobs advertised on employment candidates to risks platforms may be linked to modern slavery practices, • Ill
Slide 49: Sustainability focus areas (cont)
Sustainability focus areas (cont) Data Trust Climate Change Protecting data privacy Climate strategy • SEEK’s data governance reflects the importance of customer • SEEK supports the objectives of the Paris Agreement trust • SEEK is managing the risks relevant to the business • SEEK’s product design
Slide 50: SEEK Management Team
SEEK Management Team Ian Narev Kendra Banks Managing Director and Chief Executive Officer Managing Director Australia & New Zealand Joined SEEK in 2019 and commenced as CEO on 1 Joined SEEK in 2015. Previously held other senior July 2021. Previously CEO of CBA and partner at executive roles includin
Slide 51: SEEK Investments Management Team
SEEK Investments Management Team Andrew Bassat Ronnie Fink Chief Executive Officer MD - Contingent Labour/Other Co-founder of SEEK including 15+ years as CEO. 15+ years at SEEK. Has led a number of Has led SEEK’s growth activities (incl SEEK transactions and managed largest relationships Investments
Slide 52: Disclaimer
Disclaimer The material in this presentation has been prepared by SEEK Limited ABN 46 080 075 314 ("SEEK") and is general background information about SEEK’s activities current as at the date of this presentation. The information is given in summary form and does not purport to be complete. In parti