Adcorp Holdings Limited · JSE:ADR
Adcorp — H1 FY2021 Earnings Presentation
23 slides from Adcorp's earnings presentation, Nov 25, 2020
Slide 1: Financial results presentation for the six months ended 31 August 2020
Financial results presentation For the six months ended 31 August 2020 DATE 25 November 2020
Slide 2: Forward looking statements
Forward looking statements 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
Slide 3: Business context, Financial results, Operational review, Outlook
Business context Financial results Operational review Outlook Phil Roux Noel Prendergast Bruce Toerien Phil Roux
Slide 4: Introduction: period under review marked by Covid-19 impact
Introduction Introduction Period under review marked by Covid-19 impact Working hour losses, world and by region and income group, first, second and third quarters of 2020 (percentage) ▪ Bumpy ride – extreme volatility/ supply chain disruption 1st Quarter 2020 2nd Quarter 2020 3rd Quarter 2020 World
Slide 5: Progress on value drivers
Progress on value drivers Strategic customer management Cost management Implementation of enterprise system Divestitures BEE enhancement Margin upliftment Leadership/culture development Corporate/brand development strategy Delivered targets/milestones On track for full delivery by year end Not deliv
Slide 6: FY2020 half-year financial results
FY2020 half-year financial results Noel Prendergast Chief Financial Officer
Slide 7: Financial snapshot
Introduction Financial snapshot Revenue from continuing operations Operating profit from continuing Profit after tax from continuing Cash generated by operations decreased by 11% to R6,1 billion operations increased by 30% operations of R17 million (2019: R470 increased to R861 million (2019: R6,9 b
Slide 8: Summarised consolidated statement of profit and loss
Unaudited Unaudited 6 months to 6 months to Summarised consolidated Aug 20 Aug 19 statement of profit and loss R'000 R'000 % Change Revenue 6,110,733 6,898,657 (11.4) Cost of sales (5,549,124) (6,110,748) (9.2) Key notes: Gross profit 787,909 (28.7) 561,609 ▪ Revenue decline of 11.4% coupled with Ot
Slide 9: Segmental performance: Revenue
Segmental performance: Revenue Industrial Services (SA) Professional Services (SA) Training Services (SA) Australia 3 500 000 1 600 000 80 000 3 000 000 3 000 000 2 500 000 2 500 000 1 200 000 60 000 2 000 000 2 000 000 800 000 40 000 1 500 000 1 500 000 1 000 000 400 000 1 000 000 500 000 20 000 50
Slide 10: Segmental performance: EBITDA
Unaudited Unaudited 6 months to 6 months to Segmental performance: Aug 20 Aug 19 EBITDA R'000 R'000 % Change South Africa - continuing operations 79,822 73,520 8.6 Industrial Services 127,167 134,050 (5.1) EBITDA uplift of 13.8% Professional Services 88,610 85,705 3.4 Training 4,073 13,550 (69.9) So
Slide 11: EBITDA Rm: Continuing operations
EBITDA Rm: Continuing operations 35 66 14 107 135 119 90 119 136 33 31 August Revenue Margin Credit loss Employment Operating Other Australia Non- 31 August 2019 provision costs expenses income Covid relief recurring 2020 income costs • Collections reversed estimated credit loss from previous year •
Slide 12: Summarised consolidated statement of financial position
Unaudited Unaudited Audited Summarised consolidated 6 months to 6 months to Year end statement of financial position Aug 20 Aug 19 Feb 20 R'000 R'000 R'000 Assets Property and equipment 67,796 88,808 72,212 ▪ Trade receivables decreased by 19.6% from Right-of-use lease assets 385,020 451,484 414,917
Slide 13: Cashflow: Rm
Cashflow: Rm 205 33 348 513 21 701 62 323 Cash 1 March Operating Trade & other Trade, other Net property, Financing FX - cash Cash 31 2020 activities receivables payables and equipment & August 2020 provisions intangibles • Vast improvement in collections – 90 days + has reduced by 50% since Februar
Slide 14: Net debt
Unaudited Unaudited Audited 6 months to 6 months to Year end Net debt Aug 20 Aug 19 Feb 20 R'000 R'000 R'000 ▪ South African facilities renegotiated to ZAR Amortising term loan 133 333 200 000 200 000 May 2022 ZAR Amortising revolving credit facility 353 334 827 611 570 000 ▪ Australian facility ext
Slide 15: Operational Review
Operational Review Bruce Toerien Group Executive: Commercial
Slide 16: Industrial Services
Industrial services Industrial Services Six months ended 31 August R’million Operational review Outlook ▪ TES* revenue declined 28% driven by ▪ TES showing signs of increase in hours worked hospitality, automotive and industrial and headcount sectors ▪ Increased revenue to be offset by ▪ Functional
Slide 17: Professional Services
Industrial services Professional Services Six months ended 31 August R’million Operational review Outlook ▪ Support Services and Professional Services merged ▪ Contingent headcounts are ▪ ITRS revenue down 10,7% increasing ▪ Budgetary constraints at major clients ▪ Permanent placement demand ▪ Reduc
Slide 18: Training
Industrial services Training Six months ended 31 August Operational review Outlook R’million ▪ Training revenue down 45% ▪ IT investment will accelerate ▪ COVID-19 impact on instructor led training model adoption of online learning ▪ Severely impacted by COVID-19 reduced L&D ▪ Digital conversion of
Slide 19: Australia
Australia Six months ended 31 August R’million Operational review Outlook ▪ Australia dollar revenue contraction offset by ▪ Permanent placements remain Rand devaluation under pressure ▪ Paxus has proven to be fairly resilient ▪ Contingent headcount is ▪ LSA turns the corner increasing ▪ Government
Slide 20: Business outlook
Business outlook Phil Roux Chief Executive Officer
Slide 21: Outlook: Promising outlook notwithstanding challenging environment
Outlook: Promising outlook notwithstanding challenging environment Operating environment ▪ Negative market sentiment ▪ Intense competition ▪ Increased client demands ▪ Market volatility ▪ Skills shortage ▪ Flexible labour bodes well Second half outlook – COVID -19 uncertainty ▪ Critical focus on top
Slide 22: Strategy: Create the Future 2025
. Strategy: Create the Future 2025 Building a sustainable investment case ▪ Clearly articulated corporate strategy ▪ Competitive BEE credentials ▪ Sustainable low cost base ▪ Stronger balance sheet and liquidity ▪ Strong technology enablement ▪ Embedded disciplined and performance culture
Slide 23: Thank You
Thank You Company Secretary Investor Relations Lisa Laporte Nomonde Xulu Tel: +27 (0) 10 800 0786 Tel: +27 (0) 10 800 0209 Email: lisa.laporte@adcorpgroup.com Email: nomonde.xulu@adcorpgroup.com