Stadio Holdings Pty Ltd. · JSE:SDO
Stadio Holdings Pty — H1 2020 Earnings Presentation
51 slides from Stadio Holdings Pty's earnings presentation, Aug 26, 2020
Slide 1: 2020 Interim Results Presentation
2020 Interim Results Presentation 26 August 2020
Slide 2: Towards STADIO Higher Education
TOWARDS STADIO HIGHER EDUCATION
Slide 3: Meet our chairperson & the wider management team
3 MEET OUR CHAIRPERSON & THE WIDER MANAGEMENT TEAM •! 16 JULY 2020: Dr Vincent Maphai was appointed as chairperson of the Board •! MANAGEMENT COMMITTEE: Chris Vorster (Chief Executive Officer); Divya Singh (Chief Academic Officer); Johan Human (Chief Operating Officer); Samara Totaram (Chief Financi
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 Institution, offering qualifications aligned with the needs of societies, students and the world of work
Slide 5: Where are we going?
WHERE ARE WE GOING?
Slide 6: Student and profit targets to 2026
840 STUDENTS 12 976 STUDENTS 33 586 STUDENTS 56 000 STUDENTS 100 000+ STUDENTS ? JAN 3 OCT AUG PAT of R500m 2017 2017 2020 2026
Slide 7: Positioning, consolidation, growth
POSITIONING CONSOLIDATION GROWTH •! Acquisition of quality brands •! Registration of single higher education •! Multi-faculty campuses open •! Implement a fitting institution, STADIO •! Expansion of programme offerings organisational structure •! Migration of underlying brands into through mode and
Slide 8: How will we achieve this?
/ a. y HOW WILL WE ACHIEVE THIS?
Slide 9: Business transfer
Me oe g 00g0eeee Td 000 rh LU oe allies] ay ant oo ~ BUSINESS ~~ TRANSFER
Slide 10: Business transfer
10 BUSINESS TRANSFER •! NOVEMBER 2019: Embury renamed STADIO and trades as STADIO School of Education •! 7 MAY 2020: Higher Education Quality Committee (HEQC) approved the Business Transfer process •! DURING 2020: LISOF, Prestige Academy, Southern Business School migrate into STADIO •! Trademark imp
Slide 11: The end goal - One STADIO
1 THE END GOAL - ONE STADIO STADIO
Slide 12: 2020 group organogram - pre-business transfer
12 2020 GROUP ORGANOGRAM - PRE-BUSINESS TRANSFER 100% 87.2% 100% 100% 100% 100% 74% 14 PTA • JHB • CPT • KZN • PE • Windhoek CAMPUSES
Slide 13: 2020 group organogram - post-business transfer
13 2020 GROUP ORGANOGRAM - POST-BUSINESS TRANSFER 87.2% 100% 100% 74% 14 PTA • JHB • CPT • KZN • PE • Windhoek CAMPUSES
Slide 14: STADIO's faculties
14 STADIO’S FACULTIES Faculty of Faculty Faculty of Faculty of Faculty of Commerce, Faculty of of Arts & Science & Creative Administration Education Law Design Technologies Economies & Management Expansion plan
Slide 15: Growth opportunities
15 GROWTH OPPORTUNITIES STADIO NEW PRODUCT - PROGRAMMES, INCREASING STREAMS, GEOGRAPHIC MODES FOOTPRINT EXPANSION OF FACULTIES UTILISATION OF BUILDINGS
Slide 16: New programmes for 2021
16 NEW PROGRAMMES FOR 2021 STADIO HEI: •! Higher Certificates across Faculty of Education and Faculty of Arts & Design (CL & DL) •! Diplomas in Faculty of Commerce, Administration & Management and Faculty of Arts & Design (CL & DL) •! Exciting new streams on our current programmes include: Agricultu
Slide 17: Key focus areas
17 KEY FOCUS AREAS
Slide 18: Key focus areas - WWS
18 KEY FOCUS AREAS - ‘WWS’ STADIO fe; @ 3. @ WORK STUDENT CENTREDNESS
Slide 19: Centre for Lifelong Learning
19 CENTRE FOR LIFELONG LEARNING
Slide 20: Virtual Learning Environment (VLE)
20 VIRTUAL LEARNING ENVIRONMENT (VLE) STADIO JOINS AN IMPRESSIVE LIST OF PREMIUM CANVAS CUSTOMERS, THAT INCLUDES HALF THE WORLD’S TOP 50 UNIVERSITIES EUROPE •! All universities in Norway and Iceland •! 30/36 universities in Sweden •! Many top UK universities, including Oxford, Manchester and London
Slide 21: STADIO brand
21 STADIO BRAND STADIO FOLLOWING SUCCESSFUL BUSINESS MIGRATION: « Student Roadshows and Expos e National Launch Campaign (Digital Media and Radio) (via Association Branding) Pa i * New STADIO brand established + Engagement with current Students & Alumni * STADIO brand js positioned as a Quality HEI
Slide 22: COVID-19
COVID-19
Slide 23: COVID-19 strategy
28 COVID-19 STRATEGY The Health and Safety of our staff and students: •! We always place our staff and students at the centre of our decision making •! Compliance with regulations set out by DHET, Higher Health and Occupational Health and Safety Guidelines •! 29 staff infected The continuation of th
Slide 24: COVID-19 strategy (cont)
29 COVID-19 STRATEGY (CONT) The protection of financial resources as well as stakeholders’ interests: •! Some of the sacrifices we have had to make thus far include: ›! To freeze all uncommitted capital expenditures ›! To freeze all new uncommitted staff appointments ›! To reduce variable expenditur
Slide 25: Greenfield developments update
30 GREENFIELD DEVELOPMENTS UPDATE CURRENT CAMPUSES = MULTI-FACULTY CAMPUSES !
Slide 26: Student numbers as at 30 June
31 STUDENT NUMBERS AS AT 30 JUNE
Slide 27: Financial highlights from June 2019 to June 2020
32 FINANCIAL HIGHLIGHTS FROM JUNE 2019 TO JUNE 2020 STUDENT REVENUE EBITDA NUMBERS R468.2m R45.9m 31 053 28 280 R408.9m R103.1m 10%! 15%! -55% CORE CORE HEADLINE HEPS HEPS EARNINGS (1.5) cps R56.8m 6.9 cps R46.4m 5.1 cps 5.7 cps 22%! >-100% 21%!
Slide 28: Financial information
FINANCIAL INFORMATION
Slide 29: Highlights for 2020
34 HIGHLIGHTS FOR 2020 •! Exceptional enrolments for the PGDA and PGDA Bridging programme in 2020 – Fair value adjustment to increase contingent liability consideration •! HEQC approves of business transfer process – Impairment of trademarks – New STADIO brand to be launched in 2020 •! COVID-19 pand
Slide 30: Student numbers (like-for-like) - semester 1 enrolments
35 STUDENT NUMBERS (LIKE-FOR-LIKE) – SEMESTER 1 ENROLMENTS 9% CAGR 10% 7% 33000 31 053 11% 30000 28 280 26 334 27000 Excluding 23 752 cyclical B2B 24000 business 21000 18000 16% 15000 12000 9000 6000 3000 0 JUN-2017 JUN-2018 JUN-2019 JUN-2020
Slide 31: Student numbers by mode - semester 1 enrolments
36 STUDENT NUMBERS (LIKE-FOR-LIKE) – SEMESTER 1 ENROLMENTS ON-CAMPUS DISTANCE LEARNING TOTAL 10% 33000 7% 31 053 12% 11% 30000 Excluding 28 280 6% cyclical B2B 26 334 27000 10% business, 24 784 23 752 distance learning 24000 22 199 student numbers 20 932 21000 18 997 20% 18000 15000 3% 12000 13% 14%
Slide 32: Student number analysis
37 STUDENT NUMBER ANALYSIS STADIO STUDENT NUMBERS SEMESTER 1 ENROLMENTS REVENUE (Rm) MODES OF LEARNING DELIVERY JUN 17 JUN 18 JUN 19 JUN 20 Sawin JUN 19 JUN20 %CHANGE On campus Distance learning 18 997 20 932 22199 TOTAL MADE UP AS FOLLOWS % On campus % Distance learning 80% 79% 78% |
Slide 33: Revenue
38 REVENUE REVENUE (R millions) 900 R815m 800 700 R633m 600 15% 500 R468m R409m 400 R297m 300 200 R122m 100 0 DEC-17 DEC-18 DEC-19 JUN-18 JUN-19 JUN-20
Slide 34: EBITDA & EBITDA margin
39 EBITDA & EBITDA MARGIN EBITDA (R millions) EBITDA MARGIN % IMPACTED BY: 26% •! Increase in loss allowance 140 26% •! Fair value adjustment of R74m 25% R120m 120 (CA Connect acquisition) R103m R105m •! Additional COVID-19 related costs - R1.8m 100 •! Closure of campuses resulted in temporary 20% 2
Slide 35: Cash collections as a % of revenue
40 CASH COLLECTIONS AS A % OF REVENUE AS AT 30 JUNE CASH COLLECTIONS (% of REVENUE YTD) COVID-19 IMPLICATIONS •! 8% increase in collections 158% 160% 149% (June 2020 vs June 2019) 140% •! Increasing number of students on payment plans 120% 111% 105% •! 58 withdrawals specifically 100% due to COVID-1
Slide 36: Loss allowance as a % of revenue
41 LOSS ALLOWANCE AS A % OF REVENUE AS AT 30 JUNE LOSS ALLOWANCE AS % OF REVENUE COVID-19 IMPLICATIONS 10% •! Slow down in collections 9% 8.5% •! Increased loss allowance to 8% account for economic 7% impact of COVID-19 6% 5% 4.3% 4% 3.2% 3.3% 3.2% 3% 2% 1.5% 1% 0% DEC-17 DEC-18 DEC-19 JUN-18 JUN-19
Slide 37: CA Connect acquisition
CA CONNECT ACQUISITION •! Acquired CA Connect in April 2018 •! Specialists in the offering of the Postgraduate Diploma in Accounting (PGDA) (feeder qualification for students aspiring towards becoming SAICA accredited chartered accountants) •! Acquisition price was subject to an earnout – 4.5x EBITD
Slide 38: EBITDA movement
43 EBITDA MOVEMENT EBITDA MOVEMENT (R millions) 34% -72% R35m -R74m R103m -17% -55% -R18m R46m * * After taking into account additional costs and savings attributable to COVID-19
Slide 39: Profit/(loss) for period
44 PROFIT/ (LOSS) FOR PERIOD (R millions) 100 80 60 R52m 40 R36m 20 JUNE - 2020 0 JUNE - 2018 JUNE - 2019 -20 -40 -60 -80 -R78m -100
Slide 40: Trademark impairment
TRADEMARK IMPAIRMENT •! HEQC approved Business Transfer process •! Indicator of impairment for trademarks acquired •! R4m accumulated amortisation of Embury brand •! R60m impairment of remaining brands (excl Milpark)
Slide 41: Headline loss
HEADLINE LOSS HEADLINE LOSS (Rm) JUN 2020 Loss for period attributable to parent -R71m Impairment of trademarks RS9m Other ROm Headline loss -R12m
Slide 42: Headline earnings
47 HEADLINE EARNINGS HEADLINE EARNINGS (R millions) HEPS (cps) 50 R42m 6 5.1 40 5 3.5 30 R28m 4 3 20 2 10 1 0 -1 -10 -2 -R12m -1.5 -20 -3 JUN-18 JUN-19 JUN-20 JUN-18 JUN-19 JUN-20
Slide 43: Core headline earnings
4 CORE HEADLINE EARNINGS CORE HEADLINE EARNINGS (R millions) CORE HEPS (cps) 70 8 22% 21% 6.9 7 60 46% R56.8m 6 43% 5.7 50 R46.4m 5 40 4.0 R31.9m 4 30 3 20 2 10 1 0 0 JUN-18 JUN-19 JUN-20 JUN-18 JUN-19 JUN-20
Slide 44: Core headline earnings reconciliation
4 CORE HEADLINE EARNINGS RECONCILIATION (R millions)
Slide 45: Statement of financial position
50 STATEMENT OF FINANCIAL POSITION •! Invested R57m on capital expenditure •! Impaired R60m of intangible assets •! Repaid R65m loan funding •! R123m of cash on hand •! Debt capacity up to 2.5 x EBITDA •! Gearing ratio 11% (0% excluding IFRS 16 lease liability)
Slide 46: Cash flow generation
5 53 CASH FLOW GENERATION * EBITDA excluding fair value adjustment
Slide 47: Capital invested
52 CAPITAL INVESTED STADIO FULL YEAR CAPITAL INVESTED (Rm) DEC 2016 DEC 2017 DEC 2018 DEC 2019 JUN 2020 Acquisitions Infrastructure development and capital assets Programme development Total CUMULATIVE INVESTMENT
Slide 48: Cash utilisation
5 CASH UTILISATION CASH UTILISATION (R millions) R174m -R28m -R29m -R65m -R3m -R6m R123m R93m -R13m
Slide 49: Q&A
Q& A OUR PURPOSE: To empower the nation by widening access to higher education
Slide 50: Thank you
55 THANK YOU ENKOSI RE A LEBOGA DANKIE
Slide 51: Towards STADIO
TOWARDS STADIO HEN