Adcorp Holdings Limited · JSE:ADR
Adcorp — FY2025 Earnings Presentation
37 slides from Adcorp's earnings presentation, Feb 28, 2025
Slide 1: Annual Results for the year ended 28 February 2025
ANNUAL RESULTS for the year ended 28 FEBRUARY 2025
Slide 2: Disclaimer
Disclaimer The statements contained herein may contain certain forward-looking statements relating to the Group that are based on the beliefs of the Group’s management as well as assumptions made by and information currently available to the Group’s management. These forward-looking statements are,
Slide 3: Agenda
Agenda 01 02 03 Overview Financial and Closing FY25: A Year of Execution, Operational Overview FY26 Priorities Resilience and Momentum Financial snapshot Navigating Headwinds Navigating Volatility in Income statement Positioned for Growth Our Core Markets From Restructuring to Operating expenses Adc
Slide 4: Overview
01 Overview Dr John Wentzel Chief Executive Officer 4 Annual Results Year ended 28 February 2025
Slide 5: FY25: A Year of Execution, Resilience and Momentum
FY25 A Year of Execution, Resilience and Momentum GROSS PROFIT GROSS MARGIN OPERATING EXPENSES IMPROVED TO HELD FLAT 3.5% 0.1% 9.8% YoY YoY HEADLINE EPS NET CASH CSAT SCORES FROM OPERATIONS POSITION 61.6% R442,1 m 86.5% 5 Annual Results Year ended 28 February 2025
Slide 6: Navigating Volatility in Our Core Markets
Navigating Volatility in Our Core Markets Persistent low growth Recovery remains slow Infrastructure constraints persist Election uncertainty but now resolved Electricity supply risk improved High interest rates persisted but still there Structural demand in blue collar Unemployment persists and wor
Slide 7: Adcorp Today
Adcorp Today Operationally Efficient, Strategically Positioned Asset-light, cash-generative model with scale across SA and Australia Diversified client base spanning: Contingent Staffing, Professional Services, and Staffing Solutions Decentralised brand-led structure enables agility and local accoun
Slide 8: Stabilisation to Growth
Stabilisation to Growth Laying the Foundation Multi year restructuring, cost optimisation and margin enhancement project completed Clean cost base and flat opex growth enable operating leverage Digital transformation and operating model reset complete in SA and Australia — enabling data-driven scala
Slide 9: The Adcorp Investment Case
The Adcorp Investment Case Financial strengths Clean, debt-free Significant earnings Proven cost Asset-light model Consistent dividend balance sheet with offshore, with discipline and with strong FCF policy with R442m net cash natural currency margin recovery profile attractive yield hedge Rm Strate
Slide 10: Disciplined Capital Allocation
Disciplined Capital Allocation Underpins Sustainable Returns Dividend policy maintained at 2x cover, supported by consistent cash generation Share buybacks executed, but constrained by share liquidity Disciplined reinvestment model: internally funded growth with no dilution or gearing risk Strong wo
Slide 11: Shareholder Value Delivery
Shareholder Value Delivery FY21 to FY25 Dividend Paid and Share Buy-back R’m TOTAL DIVIDENDS PAID SHARE BUYBACKS (FY22 – FY25): EXECUTED (FY22 – FY25): 140 128 120 R229 m R37 m 100 80 62 60 39 40 20 TOTAL CAPITAL NET CASH 7 6 20 4 RETURNED 117% 0 R266 m R442,1 m FY22 FY23 FY24 FY25 Dividend paid Sha
Slide 12: FY25 Final Dividend Declaration
FY25 Final Dividend Declaration FINAL DIVIDEND DECLARED TOTAL NORMAL DIVIDEND DECLARED 50,0 cps 106.7% 63,4 cps 57.4% 2024: 24,2 cps 2024: 40,3 cps Consistent with 2x headline earnings cover policy Reflects confidence in sustainable earnings and cash generation 12 Annual Results Year ended 28 Februa
Slide 13: Financial and Operational Overview
02 Financial and Operational Overview Noel Prendergast Chief Financial Officer 13 Annual Results Year ended 28 February 2025
Slide 14: Financial snapshot
Financial snapshot REVENUE GROSS PROFIT OPERATING PROFIT * R13,24 bn 2.0% R1,30 bn 3.5% R171,6 m 33.3% Feb 2024: R12,98 bn Feb 2024: R1,26 bn Feb 2024: R128,7 m HEADINE EARNINGS PROFIT FOR THE YEAR EARNINGS PER SHARE PER SHARE R140,9 m 60.0% 134,7 cps 60.8% 135,4 cps 61.6% Feb 2024: R88,0 m Feb 2024
Slide 15: Summarised consolidated statement of profit and loss
Summarised consolidated statement of profit and loss Audited Audited Year end Year end Var R’000 Feb 2025 Feb 2024 (%) Revenue 13 236 678 12 982 141 2.0 Cost of sales (11 935 225) (11 725 110) (1.8) Gross profit 1 301 453 1 257 031 3.5 Gross profit % 9.8% 9.7% Revenue increased by 2.0% Other income
Slide 16: Operating expenses
Operating expenses R billion 1,4 1.39 1,39 1,3 1.32 1,32 1.25 1,25 1,2 1.18 1,18 1.15 1,15 1.15 1,15 1.12 1,1 1,12 1,12 1.10 1,10 1.02 1,02 1,0 0,9 Feb 2021 Feb 2022 Feb 2023 Feb 2024 Feb 2025 Reported operating expenses (excluding impairments) Inflation adjusted - since 2021 16 Annual Results Year
Slide 17: Contingent Staffing Australia
Contingent Staffing Australia Offering tailored workforce solutions across Operating in Australia's healthcare sector providing Australia specialising in blue-collar, industrial reliable, compliant, and suitably qualified healthcare and food processing recruitment, striving to professionals. Offerin
Slide 18: Contingent Staffing Australia
Contingent Staffing Australia Revenue R2.2 bn R1.9 bn Delivered double-digit growth across revenue, GP, and EBITDA Secured major national and regional contracts across multiple 16.3% industries Expanded geographic reach within existing client base FY2024 FY2025 Continued high-volume deployment under
Slide 19: Contingent Staffing South Africa
Contingent Staffing South Africa A leading provider of flexible Specialises in providing front A private higher education Specialises in providing staffing solutions, specialising in and back-of-house staffing institution that specialises in disability placement services blue-collar temporary staffi
Slide 20: Contingent Staffing South Africa
Contingent Staffing South Africa Revenue R3.8 bn R3.7 bn 4% 3% BLU’s slight revenue decline linked to macroeconomic volatility 96% 97% (2.0%) PMI benefited from demand for transformation-aligned upskilling initiatives Gross margin uplift supported by strict cost discipline across both FY2024 FY2025
Slide 21: Professional Services Australia
Professional Services Australia A leading IT recruitment agency, providing extensive services in IT contract recruitment, permanent staffing, and talent solutions. They offer specialised services across various sectors including AI, cybersecurity, and software development. www.paxus.com.au 21 Annual
Slide 22: Professional Services Australia
Professional Services Australia Revenue R4.2 bn R4.0 bn Transitioned from state-based ICT to sector-focused professional (4.8%) services model Targeted leadership changes while preserving key customer- facing expertise Operating cost base streamlined to support scalability and margin resilience FY20
Slide 23: Professional Services South Africa
Professional Services South Africa A leading IT staffing specialising in Focused on connecting top Intermediate permanent recruitment; technology solutions and staffing talent with leading employers. It Recruitment process outsourcing & services across various industries. offers temporary, permanent
Slide 24: Professional Services South Africa
Professional Services South Africa Revenue R1.9 bn R1.9 bn 5% 6% 15% 15% 16% 17% Stable revenue despite headwinds: inflation, unemployment, 22% 15% and slow growth 42% 47% Margin gains from delivery model restructuring (DAV, Kelly, talentCRU) FY2024 FY2025 Paracon maintained consistent performance a
Slide 25: Staffing Solutions South Africa
Staffing Solutions South Africa Specialising in outsourced Specialises in high-performance, A Business Process Outsourcing business solutions that leverage specialised cleaning services provider offering customised technology to enhance tailored to meet the stringent solutions to enhance customer op
Slide 26: Staffing Solutions South Africa
Staffing Solutions South Africa Revenue R1.4 bn R1.1 bn 2% 3% 3% Division renamed and reconfigured at start of FY25 97% 20.0% 95% Strong second-half uplift following tapered first-half client activity FunxionO led revenue and margin growth with new client FY2024 FY2025 wins and operational gains Gro
Slide 27: Summarised statement of financial position
Summarised statement of financial position Audited Audited Year end Year end Var R'000 Feb 2025 Feb 2024 (%) Assets Property and equipment 20 175 24 678 (18.2) The group’s financial position remains robust Right-of-use lease assets 246 315 249 800 (1.4) as at the end of Feb 2025 Intangible assets an
Slide 28: Cash flow movements
Cash flow movements R’m The group continued to be generative with cash from operating activities of R273 million, ending with a cash conversion of 159% Reliable collection and payables management returning positive working capital movement Dividend paid of R39.2 million Cash includes Angola cash of
Slide 29: Working capital management
Working capital management R’m Days 800 60 700 632 50 600 500 40 38 38 38 38 37 37 37 37 400 36 36 300 30 200 103 116 20 100 0 10 (100) -100 (61) (200) (124) -200 0 Feb 2021 Feb 2022 Feb 2023 Feb 2024 Feb 2025 Net working capital movement Days Sales Outstanding (DSO) 29 Annual Results Year ended 28
Slide 30: Net cash / (debt)
Net cash / (debt)* R’m 500 442 400 312 300 198 204 200 100 0 -100 (100) (49) Feb 21 Feb 22 Feb 23 Feb 24 Feb 25 Distribution to external Nil Nil R62m R128m R39m shareholders Share Nil R4m R20m R7m R6m buy-back * Excluding restricted cash 30 Annual Results Year ended 28 February 2025
Slide 31: Closing
03 Closing Dr John Wentzel Chief Executive Officer 31 Annual Results Year ended 28 February 2025
Slide 32: FY26 Priorities
FY26 Priorities Driving Margin, Expansion & Tech Enablement Continue margin uplift through cost discipline and operating leverage Accelerate scale-up of high-margin, compliance-critical outsourcing solutions in selected sectors Deploy AI and automation across staffing and payroll workflows Deepen pe
Slide 33: Navigating Headwinds
Navigating Headwinds Managing External Uncertainty Global trade volatility and policy instability, especially impacting US-aligned exporters Low-growth outlook in South Africa; infrastructure and energy supply risk persists FX pressure: USD/ZAR volatility remains a potential drag Ongoing inflationar
Slide 34: Positioned for Growth
Positioned for Growth Structural Tailwinds Support Upside Rising demand for outsourced solutions across sectors in South Africa Global shift toward flexible workforces and compliance -focused staffing Regulatory tailwinds in Australia supporting PALM expansion and aged care staffing and hospitality
Slide 35: From Restructuring to Scalable Growth
From Restructuring . . . . . . to Scalable Growth Restructuring, technology stack update and operating model change completed Business is ungeared, cash -rich, and strategically diversified FY25 confirms financial resilience and cost discipline FY26 focus: profitable growth, platform scalability, an
Slide 36: Q&A
Q&A 36 Annual Results Year ended 28 February 2025
Slide 37: 37 Annual Results Year ended 28 February 2025
37 Annual Results Year ended 28 February 2025