G8 Education Limited · ASX:GEM
G8 Education — H1 2014 Earnings Presentation
24 slides from G8 Education's earnings presentation, Aug 18, 2014
Slide 1: G8 Education – Half Year Overview 2014
For personal use only G8 Education – Half Year Overview 2014 G8 Education Limited (ASX:GEM) 18 August 2014
Slide 2: Corporate Snapshot
Corporate Snapshot For personal use only Capital Structure Directors & Senior Management Fully Paid Ordinary Shares (current) 332.1 million Jenny Hutson Chairperson Options Nil Chis Scott Managing Director Share Price (14 August 2014) $5.24 Andrew Kemp Non-Executive Director Market Capitalisation (a
Slide 3: Group Operational Update
For personal use only Group Operational Update
Slide 4: Group Centre Portfolio
Group Centre Portfolio For personal use only Centre Portfolio Australian centres Singpore centres 18 18 18 • As at 30th June 2014 the group owned 349 18 349 18 18 18 234 centres in Australia and 18 centres in Singapore 167 187 132 135 136 88 77 • The group added 115 new centres in the 1H10A 2H10A 1H
Slide 5: Return on Invested Capital
Return on Invested Capital For personal use only • Return on Invested Capital at the period ended 30th June 2014 was 25.5%. • This calculation is based on analyst forecasts assuming no new acquisitions and allowing for AUD$70,000,000 in additional debt to fund the acquisitions announced on 11 August
Slide 6: Head Office Cost per Licensed Place
Head Office Cost per Licensed Place For personal use only 2009 2010 2011 2012 2013 H1 2014 Number of Places 2,547 6,304 9,868 12,661 17,597 24,816 • Effective cost management and Head office cost per licensed place $1,193 $710 $523 $520 $485 $447 productivity gains combine to drive head office cost
Slide 7: Sterling Integration Update
Sterling Integration Update For personal use only • The Sterling acquisition integration continues to schedule – 50 of the 91 centres had settled as at 30th June, 2014 • All centres are now fully integrated into the G8 operations network and contributing to group performance • They have been fully e
Slide 8: Group Financial Update
For personal use only Group Financial Update
Slide 9: Group Revenue and EBIT
Group Revenue and EBIT For personal use only $180.0 Group Financial Performance - First Half Year Analysis $35.0 $32.8 $160.0 $30.0 $157.7 $140.0 • The table opposite shows the underlying group $25.0 revenue and EBIT growth from 1H10 to 1H 14 $120.0 $116.9 $100.0 $20.0 $17.8 • Underlying EBIT has in
Slide 10: Financial Margin Analysis
Financial Margin Analysis For personal use only Group Margin Analysis - First Half 18% 17% 15% • The EBIT margin is affected by seasonal fluctuations in 16% occupancy from January to June compared with July to 14% 13% December due to the transition of children from Kindergarten to 12% primary school
Slide 11: HY14 Income Statement
HY14 Income Statement For personal use only 2014 2013 Variance • Strong revenue growth of $69.1m was $’000 $’000 % reported in 1HY14 representing a 58% increase from 1H13. Revenue 187,257 118,173 58% Expenses 157,166 101,128 55% • 10% of the increase in revenue was Earnings Before Interest and Tax 3
Slide 12: Balance Sheet
Balance Sheet For personal use only 30-Jun-14 31-Dec-13 $’000 $’000 Current assets • Cash reserves as at 30 June 2014 were $153.9m up from $114m Cash and cash equivalents 153,942 114,043 at 31 December 2013. Trade and other receivables 16,237 9,613 • Trade and other receivables increased from $9.6m
Slide 13: Cashflow
Cashflow For personal use only 30-Jun-14 30-Jun-13 $’000 $’000 • Operating cashflow remained strong at $14.5m for Cash flows from operating activities the period Receipts from customers 191,172 118,184 Payments to suppliers and employees (161,728) (96,327) • The variance of Earnings before Depreciat
Slide 14: Regulatory Update
For personal use only Regulatory Update
Slide 15: Productivity Commission Draft Report
Productivity Commission Draft Report For personal use only • Release of Productivity Commission Draft Report on 22nd July 2013 • Key draft rulings: • CCB and CCR to be combined – Value of benefit based on a means tested deemed cost of childcare of $7.53 per hour with family income less than $60k rec
Slide 16: Industry update
For personal use only Industry update
Slide 17: Market Potential
Market Potential For personal use only • Highly Fragmented industry • Approximately 6,500 long day care centres across Australia • G8 Education Limited represents approximately 5% of the market • Goodstart Early Learning represents approximately 12% of the market • The addressable market is estimate
Slide 18: Market Potential
Market Potential For personal use only Australian Statistics since 2006 Baby Boom Potential to increase enrolments: Australia ranks 30th against • Current Government support Funding through Child Care Rebate CCR (not OECD means tested, capped at $7,500) and Child Care Benefit CCB (means tested) coun
Slide 19: Subsequent events
For personal use only Subsequent events
Slide 20: Significant Events Post June 2014
Significant Events Post 30 June 2014 For personal use only • On the 11th August G8 education announced it has contracts to acquire 25 childcare and education centres from a number of different vendors. G8 Education Limited has contractual arrangements with each of the vendors, conditional upon custo
Slide 21: Appendices
For personal use only Appendices
Slide 22: Australian Corporate Structure
Australian Corporate Structure For personal use only 22
Slide 23: Our Brands
Our Brands For personal use only • G8 Education currently manages 16 branded childcare groups as part of a diversified brand strategy • Over H1 2014 four new brands have been added to the portfolio • No two G8 brands are alike. Each carries within it the characteristics and qualities inherent in the
Slide 24: Questions?
For personal use only Questions? THANK YOU