G8 Education Limited · ASX:GEM
G8 Education — Investor Day (October 2023)
39 slides from G8 Education's investor day presentation, Oct 26, 2023
Slide 1: ASX Announcement
ASX Announcement G8 Education Limited (ASX:GEM) 26 October 2023 The Manager Market Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 Dear Sir / Madam I enclose an Investor Day Presentation that is being presented to investors and analysts at G8 Education’s 2023 Investor Day, which in
Slide 2: 2023 Strategy Session Investor Presentation
2023 STRATEGY SESSION Investor Presentation 26 October 2023 ASX:GEM 1
Slide 3: Acknowledgement of Country
G8 Education acknowledges the Traditional Owners of the Lands on which we are meeting on today – the Gadigal People of the Eora Nation. G8 Education would like to acknowledge Aboriginal and Torres Strait Islander peoples who join us today whether in the room or online and pay our respects to Elders
Slide 4: Presentation Agenda
PRESENTATION AGENDA WELCOME & ACKNOWLEDGEMENT OF COUNTRY Debra Singh INTRODUCTION & ASSESSMENT Pejman Okhovat G8 STRATEGY Pejman Okhovat NEAR TERM EXECUTION Pejman Okhovat, Shane Dann, Calvin Goulding, Ali Evans & Sharyn Williams WRAP-UP Pejman Okhovat BUSINESS UPDATE Pejman Okhovat Q&A G8 Team G8 E
Slide 5: Disclaimer
DISCLAIMER 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 conjunction with G8’s other peri
Slide 6: Introduction & Assessment
INTRODUCTION & ASSESSMENT UPDATE IMAGE G8 Education 2023 | 2023 HalfStrategy Year results Day | 5
Slide 7: Key Messages
KEY MESSAGES With encouraging sector fundamentals, G8 has the potential to grow sustainably through better execution and disciplines Sector G8 has strong Execution is Scale - will be a Financial fundamentals foundations - crucial - focus key enabler discipline - active remain focus on ‘Core’ of on f
Slide 8: Assessment of Sector Fundamentals
ASSESSMENT OF SECTOR FUNDAMENTALS Sector continues to be supported for wider access by families whilst dealing with some structural dynamics such as workforce in medium term • Government wanting to progressively build a universal early education system Continued strong • Increased funding at Federal
Slide 9: Solid Demand Fundamentals
SOLID DEMAND FUNDAMENTALS Demand outlook positive through scope to increase workforce participation and increasing Australian 3 and 4 year-old participation in early education G8 Education | 2023 Strategy Day | 8
Slide 10: Sector Snapshot – Composition and Quality
SECTOR SNAPSHOT – COMPOSITION AND QUALITY The ECEC sector remains highly fragmented with 'private for profit' playing a significant role 'For profit’ and large providers represent the largest portion of the sector – crucial to sector structure Proportion of services (centres) by service sub-type App
Slide 11: Supply/Demand Dynamics and Affordability
SUPPLY/DEMAND DYNAMICS AND AFFORDABILITY Supply/demand dynamics appear reasonably balanced, while the Government continues to support family affordability The sector has seen growth in total number of …this has driven a gradual decline in the average Government measures have been aimed at services m
Slide 12: 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 -
Slide 13: Current Assessment Snapshot on Six Strategic Focus Areas
CURRENT ASSESSMENT SNAPSHOT ON SIX STRATEGIC FOCUS AREAS Improvement being made with focus required across the core business operations Current performance (1H23) Assessment • Team attraction, retention and engagement whilst improving requires a clear EVP Team • Team retention 70.2% • We need to dev
Slide 14: G8 Strategy
G8 STRATEGY UPDATE IMAGE G8 Education 2023 | 2023 HalfStrategy Year results Day | 13
Slide 15: Strategy Overview
STRATEGY OVERVIEW G8 Education | 2023 Strategy Day | 14
Slide 16: Strategic Focus Areas
STRATEGIC FOCUS AREAS Six areas have been selected to monitor and measure performance and to focus organisational activity Team Best Centre Managers leading highly-capable and engaged teams focused on providing excellent customer service…. Financial Quality sustainability …delivering every day high-
Slide 17: Strategic Horizons
STRATEGIC HORIZONS Phased approach focused on creating a fit core over the near term before enhancing the core and then pursuing attractive growth opportunities Horizon 1 – Fit core Horizon 2 – Enhanced core Horizon 3 – Growth • Building a strong EVP • Differentiated Remuneration Framework • Employe
Slide 18: Scale Will Be a Key Enabler of Efficiency and Differentiation
SCALE WILL BE A KEY ENABLER OF EFFICIENCY AND DIFFERENTIATION Developing enterprise Intellectual Property (IP) and capabilities should drive higher quality outcomes and leverage cost benefits of scale “Scaled locally” Giving centres autonomy to tailor attractive offerings for their families and team
Slide 19: Environmental, Social & Governance Strategy
ENVIRONMENTAL, SOCIAL & GOVERNANCE STRATEGY Key activities underway and progress being made to achieve sustainability targets Contributing to a robust, equitable and sustainable future for stakeholders Sustainability Pillars • Mandatory • Improved quality • Continued strong • Phase 1 solar rollout c
Slide 20: Future Aspiration
FUTURE ASPIRATION Successful execution of the strategy has the potential to drive significant improvement for all stakeholders Measure Current performance (1H23) Future Aspiration Team Team retention 70.2% >80% 32 55 Customer & NPS Branding % of centres meeting or exceeding 89% 95% Quality National
Slide 21: Near Term Execution
NEAR TERM EXECUTION G8 Education 2023 | 2023 HalfStrategy Year results Day | 20
Slide 22: Organising for Success
ORGANISING FOR SUCCESS Experienced team leading the development of organisational capabilities Capabilities Executive Leadership Team Ali Evans 1 General Manager Early Learning and • Refreshed Executive Leadership Team Education • Key enterprise capabilities prioritised for further development Andre
Slide 23: Cultivating a Performance Culture
CULTIVATING A PERFORMANCE CULTURE Agile planning and rigorous performance monitoring to focus on delivery of outcomes Strategic Operating plans Performance Planning Performance reviews monitoring Annual Strategic planning Annual Budgeting Operating plans review Quarterly Functional performance revie
Slide 24: Near Term Focus Areas
NEAR TERM FOCUS AREAS Near term focus upon creating a “fit core” through delivering improvement across each of the strategic focus areas Team Financial Sustainability Building a strong EVP Disciplined capital allocation framework Career and capability development Property strategy - focus on optimis
Slide 25: Education & Inclusion
EDUCATION & INCLUSION G8 is delivering high quality and innovative education programs, building capability and promoting inclusion Support our highly valued Teachers and Educators 1 with professional learning and career progression • Launch of Teach@G8 • Building bench strength, over 1300 team membe
Slide 26: Customer and Operating Model
CUSTOMER AND OPERATING MODEL Right activity and focus in place to deliver strong outcomes for families and drive occupancy “Always on” NPS – since inception (June CY23) Enquiries – CY23 vs. CY22 70 10,000 CY22 CY23 1 Maintain rigorous focus on enrolment and transition 65 9,000 60 • Better quality en
Slide 27: Operating Model - Digital
OPERATING MODEL - DIGITAL Making it simpler and better for centres through digitisation and automation Leverage technology to drive efficiencies and simplicity for our 1 centres • Focus on the centres and working backwards 2 Leverage our scale to unlock economies of scale for our centres • Strategic
Slide 28: Financial Sustainability
FINANCIAL SUSTAINABILITY Continue to strengthen financial performance based on disciplined capital allocation and cost management 1 Capital allocation framework • Strong cash conversion to sustain the business and fund growth and shareholder returns Capital allocation • Improve EPS whilst maintainin
Slide 29: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Strong cash generation allocated via disciplined capital allocation Outcomes from Attractive Sector Supply growth Continued strong Workforce shortage sector enquiries demand extending expected to be Government support will resolve expected to enhance over medium term rat
Slide 30: Network Optimisation Framework
NETWORK OPTIMISATION FRAMEWORK Clear framework to optimise network composition and allocate capital investment on an on-going basis Return test • EBIT/LP • Absolute EBIT PROTECT Maintenance GROW Growth capex capex (lite/full) External and internal environment test • Supply/Demand Ratio Team Turnover
Slide 31: Cost Management Principles
COST MANAGEMENT PRINCIPLES Continued focus on total cost base to support operating model flexibility and to sustain margins Near term focus areas Cost Base - CY19 to CY22 12% CY19 9% CY22 • Balance centralised compliance and scale-benefits with 7% Balance nimble responses to the local environment 4%
Slide 32: Wrap-Up
WRAP-UP UPDATE IMAGE G8 Education 2023 | 2023 HalfStrategy Year results Day | 31
Slide 33: Balanced Scorecard
BALANCED SCORECARD Committed to consistently tracking and reporting progress to deliver the strategy Strategic focus area Key measure & result Focus areas Progress to target • Completion of high priority recruitments Team Team retention 70.2% • Remuneration and rewards framework • [Narrative progres
Slide 34: Transformational Journey
TRANSFORMATIONAL JOURNEY Refreshed strategy embodies a transformational change to be executed by a renewed team with a clear focus on delivering medium term targets Progressing from ….. … towards delivering G8’s targets An Employment Value Proposition that is non- Highly engaged and stable team dist
Slide 35: Key Messages
KEY MESSAGES With encouraging sector fundamentals, G8 has the potential to grow sustainably through better execution and disciplines Sector G8 has strong Execution is Scale - will be a Financial fundamentals foundations - crucial - focus key enabler discipline - active remain focus on ‘Core’ of on f
Slide 36: Business Update
BUSINESS UPDATE UPDATE IMAGE Insert Tab > Header G8&Education Footer to|update 2023 Strategy on all slides Day | 35
Slide 37: Trading Update
TRADING UPDATE Trading Update • Spot occupancy1 for the week ending 22 October 2023 was 75.4%, 1.4% below the same week in 2022 and 2.2% below the same week in 2019. • Cost management continues to be solid and managed to mitigate occupancy performance. • The divestment will have no impact on trading
Slide 38: Conditional Sale Agreement
CONDITIONAL SALE AGREEMENT Divestment of centers Conditional Sale Agreement • G8’s strategic imperative to improve the quality and performance of the network through disciplined exit of underperforming centres has resulted in the Group signing a conditional agreement to sell 31 centres. • The 31 cen
Slide 39: Q&A
Q&A UPDATE IMAGE G8 Education 2023 | 2023 HalfStrategy Year results Day | 38