G8 Education Limited · ASX:GEM
G8 Education — Investor Presentation (February 2015)
30 slides from G8 Education's investor presentation, Feb 16, 2015
Slide 1: G8 Education – Overview 2014
For personal use only G8 Education –Overview 2014 G8 Education Limited (ASX:GEM) 16 February 2015
Slide 2: Corporate Snapshot
Corporate Snapshot For personal use only Capital Structure Board of Directors & Key Management Title Personnel Directors & Senior Management Fully Paid Ordinary Shares (current) 359.1 million Jenny Hutson Chairperson Options Nil Chris Scott Managing Director Share Price (as at 30 Jan 2015) $4.58 And
Slide 3: Portfolio Update
For personal use only Portfolio Update
Slide 4: Group Centre Portfolio
Group Centre Portfolio For personal use only Centre Portfolio Australian centres Singapore centres 18 18 18 18 437 • The Group added 203 new centres and 13,697 18 349 18 18 18 187 234 licensed places in 2014 132 135 136 167 77 88 1H10A 2H10A 1H11A 2H11A 1H12A 2H12A 1H13A 2H13A 1H14A 2H14A • Discipli
Slide 5: Operational Update
For personal use only Operational Update
Slide 6: Like for Like - Occupancy
Like for Like - Occupancy For personal use only LFL occupancy Vintage Number of 2011 2012 2013 2014 centres • Average like for like occupancy Acquired pre 2011 78 77.99% 78.43% 80.16% 80.53% across the portfolio showed Acquired in 2011 43 - 87.51% 88.18% 89.77% continued growth on a per year Acquire
Slide 7: G8 Operations
G8 Operations For personal use only • The operations team has scaled up to General manager manage the increase of centres joining of operations the Group Acquisition support Compliance function function x 2 x2 • Staff turnover continues to show Senior operations managers x 5 positive declines despit
Slide 8: Lease Portfolio
Lease Portfolio For personal use only Distribution of landlords by type 8% • Average lease tenure for the portfolio is 18 years 4% Individuals Corporate Trust • Standard terms apply with regards contracting 86% 2% Government • 86% of leases owned by individuals Faith based • 43% of leases have infla
Slide 9: Key performance metrics
For personal use only Key performance metrics
Slide 10: Like for like Revenue and EBIT generation
Like for like Revenue and EBIT generation For personal use only • Organic revenue growth and Like for Like Revenue EBIT growth is consistent and Vintage Number 2011 2012 2013 2014 robust Acquired pre 2011 78 78,681,082 86,401,946 95,722,924 101,809,071 Acquired in 2011 43 - 64,468,120 70,601,868 75,
Slide 11: Group Pro Forma Returns on Invested Capital
Group Pro Forma Returns on Invested Capital For personal use only Pro forma adjusted Return on Invested Capital for the period was 26.0% CY14 CY13 CY12 CY11 Equity as at 31 December as per the Annual Report 542,009,000 304,786,000 182,307,582 115,164,091 Fair value adjustments to Equity due to acqui
Slide 12: Head Office Cost per Licensed Place
Head Office Cost per Licensed Place For personal use only 2009 2010 2011 2012 2013 2014 Number of Places 2,547 6,304 9,868 12,661 17,597 32,782 Head Office Cost per Licensed Place $1,193 $710 $523 $520 $485 $455 • Head office costs per licensed place fell in 2014 to $455 • Efficiency and productivit
Slide 13: Group Financial Update
For personal use only Group Financial Update
Slide 14: 2014 Group Revenue and EBIT
2014 Group Revenue and EBIT For personal use only Group Financial Performance $350.0 $80.0 $294.9 $70.0 $300.0 • Underlying Group Revenue and $70.3 $60.0 $250.0 EBIT growth from 1H10 to 2H14 has continued to be strong $50.0 $200.0 $187.2 • Underlying EBIT has increased by $157.7 $40.0 101% from CY13
Slide 15: 2014 Financial Margin Analysis
2014 Financial Margin Analysis For personal use only Group Underlying Margin Performance Underlying EBIT margin Underlying NPAT margin • Underlying EBIT margins have increased from 18.3% in CY13 to 21.0% in CY14. This 24% is largely due to a combination of organic 21% growth and contributions 20% 18
Slide 16: CY Income Statement
CY 14 Income Statement For personal use only 2014 2013 Variance Consolidated Year end 31 December $'000 $'000 Revenue 491,288 275,165 79% Expenses (384,087) (225,776) 70% Earnings Before Interest and Tax 107,201 49,389 117% Financing Cost (34,640) (4,790) 623% • Strong underlying Revenue growth of $
Slide 17: Balance Sheet
Balance Sheet For personal use only Consolidated 2014 2013 Notes $'000 $'000 ASSETS Current assets Ca s h a nd ca s h equi va l ents 9 120,804 114,043 • Trade and other receivables increased from $9.6m to Tra de a nd other recei va bl es 10 14,164 9,613 $14.2m during CY14 due to timing of year end c
Slide 18: Cash Flow
Cash Flow For personal use only Consolidated 2014 2013 Notes $'000 $'000 Cash flows from Operating Activities • Operating cash flow was strong at $74.7m for Recei pts from cus tomers 494,744 274,595 Pa yments to s uppl i ers a nd empl oyees (383,483) (218,783) the year Interes t recei ved 2,919 1,48
Slide 19: Capital Structure
Capital Structure For personal use only G8’s capital structure as at 31 December 2014 consists of the following Debt and Equity instruments: Issuer Class Maturity Principle/Issuance Cost Borrowings G8 Education Ltd Senior Unsecured Note 7 August 2019 A$70,000,000 7.675% G8 Education Ltd Senior Unsec
Slide 20: Impact of Foreign Exchange Translation on Cost of Debt
Impact of Foreign Exchange Translation on Cost of Debt For personal use only The non-cash foreign currency translation loss on the SGD issued unsecured corporate notes was $18.6m for the period. From a capital management perspective this loss will be amortised over a specific duration to determine t
Slide 21: Key Financial Ratios
Key Financial Ratios For personal use only • The Group continued to operate Key Financial Ratios As at 31 well within its financial covenants December 2014 • When goodwill is adjusted to the 65% Gross Debt to Equity – Goodwill at Cost value in use based on the Group’s Gross Debt to Equity – Goodwill
Slide 22: Group Outlook
For personal use only Group Outlook
Slide 23: Acquisition Opportunities
Acquisition Opportunities For personal use only Sydney catchment The Australian Childcare market consists of 9,208 separate service outlets covering a range of offerings from Long Day Care to Vacation Care Service Total Long day care 6,585 Family day care 512 Occasional care 123 In home care 71 Day
Slide 24: Subsequent Events
For personal use only Subsequent Events
Slide 25: Subsequent events post December 2014
Subsequent events post 31 December 2014 For personal use only • On 16th February 2015 the Group announced contracts to acquire 12 childcare centres from a number of different vendors. The Group has contractual arrangements with each of the vendors conditional on customary licensing and landlord appr
Slide 26: Appendices
For personal use only Appendices
Slide 27: G8 Education Due Diligence Process
G8 Education Due Diligence Process For personal use only Externally Internally The acquisition due diligence process is introduced introduced systematic and exhaustive… G8 Preliminary Board Approval assessment G8 Executive 1. License capacity Financial due diligence In house modeling 2. Monthly occu
Slide 28: Operational Effectiveness Model
Operational Effectiveness Model For personal use only Investment $’s – Facilities, equipment, Capex Key performance indicator data G8 Executive Investment spend review Centre optimisation strategies Finance Human Resources Marketing Payroll Information Tech Safety and Facilities G8 Operations Specia
Slide 29: Business Organisation Chart
Business Organisation Chart For personal use only • Relatively flat organisation structure • Clearly defined head office and operational function • Simplicity of structure facilitates rapid scaling • Large resource pool in excess of 9,000 employees aids recruitment and succession planning 29
Slide 30: THANK YOU Questions?
For personal use only THANK YOU Questions?