Slide 1: Interim Financial Results
INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2020 1
Slide 2: Contents
CONTENTS 01 OVERVIEW 04 UNIVERSITY / TERTIARY DIVISION 02 FINANCIAL PERFORMANCE 05 RESOURCING DIVISION 03 SCHOOLS DIVISION 06 PROSPECTS 2 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 June 2020
Slide 3: Observations from the Pandemic
OBSERVATIONS FROM THE PANDEMIC Robust and Speed, agility resilient and success organisation Quality of our with which the • Tertiary people group • Schools responded • Resourcing THE MEASURE OF A BUSINESS IS HOW IT RESPONDS TO A CHALLENGE OR CRISIS 3 Robust | Resilient | Sustainable INTERIM FINANCIA
Slide 4: Rapid Response to COVID-19
RAPID RESPONSE TO COVID-19 IMMEDIATE PRIORITIES WERE Health, safety and well- Critical to continue Pay specific attention Sustainability of the group being of all stakeholders to deliver quality to the needs of • Cash preservation and all that entails academic instruction students and parents • Cape
Slide 5: Value of Our People
VALUE OF OUR PEOPLE SOCIAL IMPACT Academic Excellence Financial Impact Wellness Benefits At core of strategy Continue to pay employees Programme Evident in employee and contractors as far as Manage anxiety and build motivation and Intellectual Capital possible employee resilience adaptability Lies w
Slide 6: Continued Academic Delivery
CONTINUED ACADEMIC DELIVERY OVERVIEW Overview Schools Tertiary • Trained and supported • Biggest challenge • Online capability in place +5 500 teachers and lecturers seamless transition • Standardised on Microsoft to transition from face-to-face • Confident in ability to platforms delivery to online
Slide 7: COVID-19 Impact – Student Support
COVID-19 IMPACT – STUDENT SUPPORT ADDRESSING THE NEEDS OF OUR STUDENTS AND PARENTS Supported 5 386 families with 24/7 service desk support 1000+ financial assistance – R37 million calls / week Rosebank College Graduate Empowerment Programme placed Supplied ~8 000 students with data 233 graduates dur
Slide 8: Impact on SA School Student Numbers
IMPACT ON SA SCHOOL STUDENT NUMBERS COVID-19 Leavers 2% Joiners 26 393 -3% 25 961 1% 13 190 -2% 13 098 2% 9 016 -2% 8 992 3% 4 187 -11% 3 871 Feb 20 Feb 20 Feb 20 Feb 20 Jun 20 Jun 20 Jun 20 Jun 20 Pre-Primary Primary High Total 8 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the si
Slide 9: Impact on Schools Rest of Africa Student Numbers
IMPACT ON SCHOOLS REST OF AFRICA STUDENT NUMBERS COVID-19 Leavers 2% Joiners 5 977 -3% 5 976 Jun 20 Feb 20 Schools Africa 9 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 June 2020
Slide 10: Tertiary Student Numbers
TERTIARY STUDENT NUMBERS COVID-19 Leavers Joiners 9% -5% 46 620 44 975 Jun 20 Feb 20 Tertiary * Statistically higher attrition rate than normal 10 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 June 2020
Slide 11: Group Impact on Student Numbers
GROUP IMPACT ON STUDENT NUMBERS IMPACT ON STUDENT NUMBERS Leavers 6% Joiners 77 345 -4% 78 557 9% -5% 46 620 Group 44 975 2% 32 370 -3% 31 937 2% Jun 20 Jun 20 Jun 20 Feb 20 Feb 20 Feb 20 Schools Tertiary Group 11 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30
Slide 12: Financial Performance
02 FINANCIAL PERFORMANCE
Slide 13: Sound Financial Performance
SOUND FINANCIAL PERFORMANCE 13% 4% -2% 32% 27% FREE CASH OPERATING OPERATING GENERATED BY REVENUE NEPS PROFIT CASH FLOW OPERATING BEFORE CAPEX ACTIVITIES 13 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 June 2020
Slide 14: Continued Growth
CONTINUED GROWTH 16% 11% 13% 4% 2 829 444 428 2 499 404 2 175 344 1 929 293 1 572 CAGR H1 16 H1 17 H1 18 H1 19 H1 20 H1 16 H1 17 H1 18 H1 19 H1 20 Group revenue Operating profit (R’m) (R’m) 14 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 June 2020
Slide 15: Estimated Divisional Impact of COVID-19
ESTIMATED DIVISIONAL IMPACT OF COVID-19 R’m Schools – Schools – Tertiary Resourcing – Resourcing Total South Rest of South Africa – Rest of Africa Africa Africa Lost revenue (26.3) (19.5) (16.8) (25.7) - (88.3) Cost savings related to lost revenue 10.9 6.1 3.6 5.5 - 26.1 Net effect of lost revenue (
Slide 16: Continue Growth Excluding COVID-19 Impact
CONTINUE GROWTH EXCLUDING COVID-19 IMPACT 17% 32% 4% 567 13% 2 829 2 917 444 428 2 499 404 2 175 344 1 929 293 1 572 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 excluding excluding COVID-19 COVID-19 Revenue impact Operating profit impact (R’m) (R’m) 16 Robust | Resilient
Slide 17: Segmental Overview
SEGMENTAL OVERVIEW Segmental revenue Segmental operating profit contribution contribution June June 2020 2020 -2% 2% 13% 11% 1% 2% 3% 5% 38% 39% 45% 2019 41% 57% 2019 41% 57% 4% -1% 42% 4% -2% Schools – South Africa Schools – Africa Tertiary Resourcing – South Africa Resourcing – Africa 17 Robust |
Slide 18: Cash Preservation
CASH PRESERVATION HEALTHY LIQUIDITY MAINTAINED Cash preservation 20% 1 268 actions 999 • Curbing non-essential capex 890 − Capex expected to be ~R300m in FY2020 785 • Initiated cost savings in the 610 587 606 555 business without furloughing 424 our education employees 362 H1 16 H1 17 H1 18 H1 19 H1
Slide 19: Cash vs Net Borrowings Position
CASH VS NET BORROWINGS POSITION BORROWINGS WELL WITHIN COVENANTS R’m 20% 1 268 999 Covenants 890 785 Net Borrowings: EBITDA 610 Banks: 3,5x Internal: 3,0x Actual: 2,1x -907 -919 Cash generated by operations -1 448 Net borrowings -1 716 position -1 805 H1 16 H1 17 H1 18 H1 19 H1 20 CAGR Ratio = Net B
Slide 20: Capex and Acquisitions
CAPEX AND ACQUISITIONS SUSTAINABLE CAPEX REDUCTION R’m 177.7 Capex Projects 162.0 78,9 43,9 24,8 14,4 15,7 0,0 0 3 Student management Additions to existing Furniture, Acquisition site completion of campuses systems sites fittings, IT of shares in Schole acquisition of new schools and vehicles 20 Rob
Slide 21: Debtors' Provision
DEBTORS’ PROVISION BELOW TARGET COLLECTIONS Trade and Credit losses as % of other receivables revenue 6% Unaudited % 165 R’m 30 June 30 June increase 2020 2019 Trade receivables 26% 865 686 Loss allowance 39% (437) (314) 3% 428 372 74 Coverage of debtors' 51% 46% balance • Collections in the period
Slide 22: Schools Division
03 SCHOOLS DIVISION • Agility in offering continued quality education through adapting modes of delivery • Continuing to build scale in the rest of Africa • Benefits of restructuring and rationalisation
Slide 23: Schools SA
SCHOOLS SA EXCLUDING COVID-19 IMPACT 10% 11% 28% 9% 7% 13% 225 1 072 1 098 198 985 172 175 945 159 153 814 739 CAGR H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 excluding excluding COVID-19 COVID-19 Revenue impact Operating profit impact (R’m) (R’m) 23 Robust | Resilient |
Slide 24: Schools Rest of Africa
SCHOOLS REST OF AFRICA EXCLUDING COVID-19 IMPACT GIS & CIS GIS & CIS, Makini GIS GIS Makini impact 39% 15 39% 13 18% 12 127 8 108 92 47 -5 29 31 -9 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 excluding excluding COVID-19 COVID-19 Revenue impact Operating profit impact (R’
Slide 25: Schools SA Operating Margin
SCHOOLS SA OPERATING MARGIN EXCLUDING COVID-19 IMPACT 20,7% 20,5% 19,6% 18,8% 18,2% 17,8% H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 excluding COVID-19 impact Operating margin (%) 25 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 June 2020
Slide 26: Portfolio of Clearly Defined Brands
PORTFOLIO OF CLEARLY DEFINED BRANDS MEANINGFUL MARKET SEGMENTS Modern, Traditional, Academic Mid-fee Early Online/ home Progressive, holistic, assisted and childhood schooling Academic Christian support development focus based
Slide 27: Historic Work Done
HISTORIC WORK DONE PORTFOLIO OF CLEARLY DEFINED BRANDS 2016 2017 2018 2019 2020 2020 Acquired: Acquired: Acquired: Closed: Opened: Open: Summit Glenwood Makini schools Trinityhouse Trinityhouse Evolve College House Palm Lakes Glenvista Opened: High Opened: Elkanah Crawford International Pinnacle Col
Slide 28: Portfolio of Clearly Defined Brands
PORTFOLIO OF CLEARLY DEFINED BRANDS CONTINUE TO ENHANCE BRAND VALUE PROPOSITION Traditional/ Academic Early Online / Progressive holistic/ assisted and Mid-fee childhood home- / modern Christian support development schooling based 2016 2015 • Crawford International • Trinityhouse Abbotts College Jun
Slide 29: Online Market Landscape
ONLINE MARKET LANDSCAPE Estimated size of the market segment 200 000 At least 7 offerings currently in this space Long-term goal 10% of market segment 20 000 students Target: Evolve 1.5% of market segment 3 000 students 29 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months
Slide 30: Evolve Online School
EVOLVE ONLINE SCHOOL TAPPING INTO THE HOME-SCHOOLING MARKET • Trend-setting curriculum mapping system developed at MIT • Tailored learning experience ‒ Forward looking subjects ‒ Machine learning • Strong focus on foundational, social and emotional learning skills ‒ Home schooling market will change
Slide 31: Our Current School Brands
OUR CURRENT SCHOOL BRANDS ENHANCING BRAND VALUE POSITION Repositioning and merging Maragon Brand - impaired Trinityhouse • Meaningful positioning that has a • Crawford International Maragon Ruimsig • Underperforming schools close end 2020: sustainable market proposition. now Crawford Internationa
Slide 32: Schools in the Rest of Africa
SCHOOLS IN THE REST OF AFRICA WE REMAIN CONFIDENT IN THE REST OF AFRICA INVESTMENTS Kenya Botswana Crawford Makini Gaborone International School Schools International School • Continue to offer and successfully • Kenyan government - scrapping of • Continue to perform well completed academic year aca
Slide 33: University/Tertiary Division
UNIVERSITY/ 04 TERTIARY DIVISION • The IIE SA’s leading “private university” • Established flexible offering and delivery methods • Resilient performance
Slide 34: Tertiary Division Overview
TERTIARY DIVISION TERTIARY DIVISION OVERVIEW IIE • IIE is SA’s leading “private university” Faculty Faculty Faculty Faculty Faculty Faculty Faculty of of of of of of of • Central academic body: 15-year track record of Academic leadership Communication Technology • 33 Campuses Social Sciences • Divis
Slide 35: University / Tertiary: Resilient Performance
UNIVERSITY / TERTIARY RESILIENT PERFORMANCE 16% 26% 20% 14% 26% 3% 308 1 187 1 204 1 038 252 245 868 204 778 157 581 100 CAGR H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 excluding excluding COVID-19 COVID-19 Revenue impact Operating profit impact (R’m) (R’m) 35 Robust | R
Slide 36: University / Tertiary: Impacted by IIE MSA Integration
UNIVERSITY / TERTIARY IMPACTED BY IIE MSA INTEGRATION 11% -8% 27,5% 25,6% 24,7% 23,5% 23,6% 22,8% 21,2% 20,2% 17,3% Excl IIE MSA H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 (excl. COVID-19 & MSA) Operating margin (%) 36 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 J
Slide 37: Growth in IIE Online Distance Students
GROWTH IN IIE ONLINE DISTANCE STUDENTS HIGHER EDUCATION FULL-TIME QUALIFICATIONS 15% 4 254 3 983 3 457 2 219 7% since 1 479 March 701 62 58% 98 615% 111% 50% 56% 2014 2015 2016 2017 2018 2019 2020 30 June 2020 * End Feb YoY 37 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six mo
Slide 38: Oxbridge Academy Enrolments
OXBRIDGE ACADEMY ENROLMENTS VOCATIONAL AND OTHER STUDY PROGRAMMES Rolling enrolment cycle – any time of year 6% 16 880 15 898 15 937 Feb 19 Feb 20 30 June 2020 * End Feb YoY 38 Robust | Resilient | Sustainable INTERIM FINANCIAL RESULTS for the six months ended 30 June 2020
Slide 39: Resourcing Division
05 RESOURCING DIVISION • Remains profitable despite tough SA market • Good performance in the rest of Africa • Dual focus on permanent and contract placements
Slide 40: Resourcing
RESOURCING MITIGATING ACTIONS TO MINIMISE LOSS 26% 20% 20 20 18 490 464 387 13 309 321 9 224 3 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 H1 16 H1 17 H1 18 H1 19 H1 20 H1 20 excluding excluding COVID-19 Revenue Operating profit COVID-19 impact impact (R’m) (R’m) 40 Robust | Resilient | Sustainable INTERIM
Slide 41: Resourcing Division
RESOURCING DIVISION REMAINS PROFITABLE DUE TO A GOOD PERFORMANCE IN THE REST OF AFRICA South Africa market – severely Rest of Africa impacted • Hiring activity came to a standstill • Geographic expansion strategy prevails • Good opportunities Mitigating actions: • Active business development to expa
Slide 42: Prospects
06 PROSPECTS 42
Slide 43: Impact Going Forward
IMPACT GOING FORWARD 2021 uncertainties: Re-assess the Rosebank College • Public school Continue to improve delivery model well-positioned calendar delayed academic delivery and introduce more • Lead generation to grow online models and student online and blended access to matriculants offering supp
Slide 44: Outlook
OUTLOOK UNCERTAINTY REMAINS The pandemic has provided strong evidence of the robustness of our business Strong balance sheet, sustainable cost and Remain cautious - economy will remain weak capital expenditure containment Sound strategy that developed relevant Healthy brands servicing meaningful org
Slide 45: Thank You
THANK YOU 45
Slide 46: Questions
Questions 46