Pbt Holdings Limited · JSE:PBT
Pbt — H1 FY2024 Earnings Presentation
41 slides from Pbt's earnings presentation, September 2023
Slide 1: 6 Months Ended 30 September 2023 - The Data Specialist Company
Transforming information to create insights and predictions. 6 MONTHS ENDED 30 SEPTEMBER 2023 THE DATA SPECIALIST COMPANY
Slide 2: Contents
CONTENTS FINANCIAL REVIEW 4-5 ABOUT US 7-10 SEGMENTAL REVIEW, REVENUE, COSTS, CAPITAL EXPENDITURE, OPERATING LEVERAGE, FREE CASH FLOW 12-21 SUMMARISED FINANCIALS 23-25 CAPITAL ALLOCATION STRATEGY 27-28 REASONS TO INVEST 30 ANNEXURE 35-38
Slide 3: Financial Review
LO PBT, FINANCIAL REVIEW
Slide 4: Financial Review
FINANCIAL REVIEW Segments Group South Africa Australia Europe and UK (97% of Group revenue) (5% of Group revenue as at 31 March 2023) (3% of Group revenue) The first half of FY2024 was another • Revenue increased by 7.9% to • After careful consideration, PBT • Revenue decreased by 1.3% to successful
Slide 5: Financial Highlights (Continuing Operations)
FINANCIAL HIGHLIGHTS (CONTINUING OPERATIONS) Revenue (ZARm) EBITDA (ZARm) Cash Generated From Operations (ZARm) 5-year CAGR 5-year CAGR 146.6 1040.9 138.6 135.8 137.7 975.7 14% 789.0 35% 102.1 +7.6% 98.3 82.2 672.5 507.0 532.2 75.4 +2.6% 92.1 71.8 +125.0% 588.4 y/y 399.7 72.8 y/y 109.5 y/y 53.2 62.0
Slide 6: About Us
LO PBT ABOUT US
Slide 7: Summarised Corporate Structure
SUMMARISED CORPORATE STRUCTURE PBT Group Limited Comments Incorporated in South Africa and listed on the JSE PBT Group International BV Uncomplicated corporate structure. 100% Incorporated in The Netherlands The international holding entity provides corporate South African Operating Entities flexibi
Slide 8: PBT Group Overview
PBT GROUP OVERVIEW PBT Group is a streamlined and focused professional services business. Core business Non-core assets A Data Specialist and Software services and solutions In FY2023 we successfully disposed of our non-core provider. assets and returned the proceeds to our shareholders. As a result
Slide 9: A-Grade Clients
A-GRADE CLIENTS FINANCIAL INSURANCE TELECOMS RETAIL OTHER INTERNATIONAL Absa Bryte MTN Clicks AfroCentric Health 6 Degrees Capitec Discovery Telkom Pepkor Business AIB Coronation Hollard Vodacom Pernod Ricard Connexion AkzoNobel DirectAxis Liberty Pick ‘n Pay Bytes Brakes FNB MMI Holdings Pioneer Fo
Slide 10: Shareholder Interests Well Aligned
SHAREHOLDER INTERESTS WELL ALIGNED Management, directors, employees and affiliates* shareholding in PBT Group Limited 53% 53% 53% 45% 48% 33% FY2019 FY2020 FY2021 FY2022 FY2023 HY2024 Note: figures are rounded. Note: FY = 12 months ended 31 March. HY = 6 months ended 30 September. *Includes PBT Dire
Slide 11: Segmental Review, Revenue, Costs, Operating Leverage, Capex, Free Cash Flow
1. SEGMENTAL REVIEW 2. REVENUE 3. COSTS 4. OPERATING LEVERAGE 5. CAPITAL EXPENDITURE 6. FREE CASH FLOW
Slide 12: 1. Segmental Review
1. SEGMENTAL REVIEW Revenue earned by geographic area as a % of Group revenue Year-on-year growth rates by geographic area 2% 4% 4% 4% 3% 3% 11% 8% 7% 6% 5% 8% South Africa -1% -1% 89% 90% 92% 97% Europe & UK 87% 88% 74% 8% Group 3% FY2019 FY2020 FY2021 FY2022 FY2023 HY2024 South Africa Australia Eu
Slide 13: Client Engagement Models
2. HOW PBT GROUP EARNS REVENUE A services and solutions-based business CLIENT ENGAGEMENT MODELS 1 2 3 Consulting Services Projects Managed Services and Solutions • Providing relevant expertise as a • Engaging a team in collaboration • Providing a pre-defined service professional service. with a clie
Slide 14: 2. Client Industries
2. CLIENT INDUSTRIES Revenue earned by client industry as a % of Group revenue Comments The bulk of revenue is earned from financial services clients. Driven by digital transformation. Most consultants are interchangeable between industries. Reduces risk of non-billability. 68% 76% 74% 73% 73% 49% F
Slide 15: 2. Top Clients
2. TOP 10 CLIENTS Revenue earned by top 10 clients as a % of Group revenue Comments 12% Mostly Johannesburg Stock Exchange (JSE) listed A-grade clients. Low counterparty risk. 9% 9% Revenue earned from the top 10 clients accounts for c. 65% of Group revenue. Although listed as a single client, we 6%
Slide 16: 2. Revenue and Client Retention
2. REVENUE AND CLIENT RETENTION 12-month Revenue Retention Rate (RRR) by top 10 clients Comments RRR > 0% means that we retained the client. RRR > 100% means that we earned more revenue in HY2024 versus HY2023 from the client. 544% RRR < 100% means that we retained the client, but we 117% earned les
Slide 17: 2. Revenue Contracts
2. REVENUE CONTRACTS Revenue earned by contract type as a % of Group revenue Comments 8% 4% 3% 2% 2% 2% 9% 7% 9% 4% 15% 98% of revenue is earned from low-risk time and material 21% contracts, where clients are billed for actual time spent. Contracts mostly span over 12 months, after which it is typi
Slide 18: 3. Cost Breakdown
3. COST BREAKDOWN Cost breakdown as a % of Group revenue Comments Operating costs consist mainly of: 17% 14% 12% 10% 11% 12% 1. Salaries relating to sales, general and administrative employees. We do not expect to add materially to the headcount in the foreseeable future. Cost of consulting consists
Slide 19: 4. Operating Leverage
4. OPERATING LEVERAGE EBITDA margin and operating expenses as a % of Group revenue Comments EBITDA margin contracted primarily because of: 17.5% 14.2% Inflation pressure on the cost of consulting and not passing 13.0% 12.5% 12.1% it entirely on to clients. 14.0% 10.8% 12.2% 11.8% 8.7% 10.7% 10.5% FY
Slide 20: 5. Capital Expenditure
5. CAPITAL EXPENDITURE Capital expenditure as a % of Group revenue Comments 3.5 0.30% 3.0 0.25% Asset-light business model. As a % of Group revenue 2.5 Capital expenditure is mostly on computers for employees, 0.20% ZAR millions 2.0 1.9 office infrastructure and equipment. 0.15% 1.5 0.9 0.10% 1.0 0.
Slide 21: 6. Free Cash Flow
6. FREE CASH FLOW Free Cash Flow versus accounting profits Comments 120 200% 100 150% Generally, free cash flows track accounting profits. 80 60 100% 91.6 92.3 98.5 40 87.3 76.3 59.9 65.3 50% 20 46.0 40.8 46.4 25.4 33.6 0 0% FY2019 FY2020 FY2021 FY2022 FY2023 HY2024 Group free cash flow (LHS) Group
Slide 22: Summarised Financials
LO PBT SUMMARISED FINANCIALS
Slide 23: Statement of Financial Position
SUMMARISED FINANCIALS Statement of Financial Position Comments SIMPLIFIED STATEMENT OF FINANCIAL POSITION (ZARm) HY2024 HY2023 Assets Uncomplicated. Investment at fair value - 124.3 Trade and other receivables 152.5 180.7 Liquid. Cash and cash equivalents 37.9 25.2 Ungeared. Other 21.8 21.4 Total as
Slide 24: Statement of Comprehensive Income
SUMMARISED FINANCIALS Statement of Comprehensive Income Comments STATEMENT OF COMPREHENSIVE INCOME (ZARm) Change HY2024 HY2023 Resilient performance in a tough economic environment. Revenue 7.6% 547.4 508.8 Gross profit 3.6% 132.0 127.4 Profit margin contraction primarily because of: Gross profit ma
Slide 25: Statement of Cash Flows
SUMMARISED FINANCIALS Statement of Cash Flows Comments STATEMENT OF CASH FLOWS (ZARm) HY2024 HY2023 Continue to generate strong cash flows. Cash generated from operations 63.6 28.3 Net cash from operating activities 43.1 4.2 We prioritise organic growth and returning cash flows to Capital expenditur
Slide 26: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY
Slide 27: Capital Allocation Strategy
CAPITAL ALLOCATION STRATEGY ORGANIC DISTRIBUTIONS SHARE ACQUISITIVE EXPANSION REPURCHASES EXPANSION • Substantial portion of • Secure new clients. • Thorough • Last acquisition was in 2012. earnings is paid as cash understanding of PBT distributions. • Growth within client Group’s business. • Will c
Slide 28: Capital Allocation
CAPITAL ALLOCATION Where capital was allocated over the past 5 years. PBT Group’s market capitalisation was c. R250m at the beginning of FY2019 350 Cumulative cash returned Increased shareholding in 300 to shareholders CyberPro (58% subsidiary) 10.0 250 R462m R17m ZAR millions 200 150 280.9 100 11.5
Slide 29: Considering Investing in PBT Group?
CONSIDERING INVESTING IN PBT GROUP?
Slide 30: Key Considerations
KEY CONSIDERATIONS Focused business Operate in a growing industry Cash generative business A-grade clients Clear capital allocation strategy Clear value unlock strategy (disposed of non-core assets in FY2023) Management and director ownership align interests with shareholders
Slide 31: Annexure
LO PBT ANNEXURE
Slide 32: CyberPro Consulting Proprietary Limited (58% Subsidiary of PBT Group)
CYBERPRO CONSULTING PROPRIETARY LIMITED (58% SUBSIDIARY OF PBT GROUP)
Slide 33: CyberPro Consulting Proprietary Limited (58% Subsidiary of PBT Group)
CYBERPRO CONSULTING PROPRIETARY LIMITED (58% SUBSIDIARY OF PBT GROUP) Rand 30 September 2023 30 September 2022 31 March 2023 STATEMENT OF FINANCIAL POSITION Non-current assets 5 371 244 4 937 546 5 967 418 Current assets 96 111 676 98 174 443 89 836 858 Total assets 101 482 920 103 111 989 95 804 27
Slide 34: Additional Information
PN, LO PBT ADDITIONAL INFORMATION
Slide 35: Five-Year Review (From Continuing Operations)
FIVE-YEAR REVIEW (FROM CONTINUING OPERATIONS) Change HY2024 HY2023 FY2023 FY2022 FY2021 FY2020 FY2019 Revenue (ZARm) 7.6% 547.4 508.8 1040.9 975.7 789.0 672.5 588.4 EBITDA (ZARm) 2.6% 66.1 64.4 146.6 138.6 98.3 72.8 51.4 Profit After Tax (ZARm) 9.9% 47.9 43.6 102.5 92.3 65.3 46.0 33.6 Cash Generated
Slide 36: PBT Group History
PBT GROUP HISTORY Prescient listed on the JSE through a Following the downscaling of Africa and reverse listing via PBT Group, Middle East operations, PBT Group shifts its PBT Group continuing to operate through its two main international focus to the United Kingdom Australia subsidiaries, Prescient
Slide 37: SWOT Analysis of PBT Group
SWOT ANALYSIS OF PBT GROUP STRENGTHS WEAKNESSES OPPORTUNITIES THREATS • A focused and easy to • Longstanding client • Growth within client • Upward pressure on the understand business relationships can put accounts cost of consulting • Asset-light business pressure on profit • Securing new client mo
Slide 38: Headline Earnings (Continuing Operations)
HEADLINE EARNINGS (CONTINUING OPERATIONS) Headline Earnings Per Share Headline Earnings (ZARm) 82.9 82.2 72.6 69.3 45.8 46.7 40.1 43.1 50.6 69.3 29.4 29.7 30.8 25.4 22.6 14.4 13.5 18.2 37.1 35.5 29.2 29.5 29.7 28.9 19.4 15.9 16.4 21.2 16.2 18.9 2.3 3.2 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY201
Slide 39: Disclaimer
“ IN LO PBT DISCLAIMER
Slide 40: Disclaimer
DISCLAIMER PBT Group has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this presentation, including all information that may be defined as 'forward-looking statements’. Forward-looking statements may be identified by
Slide 41: Thank You
THANK YOU Investor relations contact: Francois de Wet Email: francois.dewet@pbtgroup.nl