G8 Education Limited · ASX:GEM
G8 Education — Investor Presentation (August 2024)
27 slides from G8 Education's investor presentation, Aug 22, 2024
Slide 1: ASX Announcement
ASX Announcement G8 Education Limited (ASX:GEM) 22 August 2024 The Manager Market Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 Dear Sir / Madam I enclose the Investor Presentation for the half year ended 30 June 2024 for G8 Education Limited, which includes a trading update and
Slide 2: 2024 Half Year Results Investor Presentation
2024 HALF YEAR RESULTS Investor Presentation 22 August 2024 UPDATE IMAGE ASX:GEM 2023 Full Year results 1
Slide 3: Disclaimer & Non-IFRS Information
DISCLAIMER & NON-IFRS INFORMATION 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 conjuncti
Slide 4: Acknowledgement of Traditional Owners
G8 Education acknowledges the Traditional Owners of the lands on which we operate and pays our respects to Elders past and present. We recognise that Aboriginal and Torres Strait Islander peoples have been nurturing and teaching children on these lands for thousands of years. We are grateful for the
Slide 5: Agenda
AGENDA SUMMARY AND PROGRESS Pejman Okhovat FINANCIAL PERFORMANCE Sharyn Williams CURRENT TRADING AND OUTLOOK Pejman Okhovat QUESTIONS Pejman Okhovat and Sharyn Williams APPENDIX G8 Education | 2024 Half Year results | 4
Slide 6: Summary and Progress
SUMMARY AND PROGRESS 2023 Full Year results | 5
Slide 7: Key Messages
KEY MESSAGES Progress on delivering a 'fit core' with a key focus on operational imperatives, delivering earnings growth in a challenging environment SOLID EARNINGS PERFORMANCE BUILDING CAPABILITY RESULTING IN STRONG BALANCE SHEET ENABLING CAPITAL IMPROVED TEAM, FAMILY AND OCCUPANCY MANAGEMENT OPTIO
Slide 8: Financial Overview
FINANCIAL OVERVIEW Earnings growth driven by operational efficiencies, focused execution and improvement in occupancy OPERATING REPORTED GROUP OCCUPANCY Excludes non-trading1 items and includes lease interest expense Statutory All references to occupancy include all centres Revenue % change vs pcp R
Slide 9: Environmental, Social and Governance Highlights
ENVIRONMENTAL, SOCIAL AND GOVERNANCE HIGHLIGHTS Driving progress across our sustainability pillars in CY24 H1 Materiality Assessment Quality Centres Team Engagement Emissions Commenced Materiality 91% of centres are “meeting” or Q2 engagement score of 75% which More than 10% reduction in Scope Asses
Slide 10: Balanced Scorecard
BALANCED SCORECARD Improved results across all KPI’s reflecting strong execution of strategic initiatives Strategic focus area Measure CY24 H1 (Actual) Progress CY23 H1 to CY24 H1 Team Team Team retention 76% 6% pts Family NPS 48 16 pts Experience % of centres meeting or Quality exceeding National 9
Slide 11: Team
TEAM Focusing on improved employment value proposition is contributing to lower vacancies and higher team retention ATTRACTING TEAM RETAINING TEAM GROWING OUR OWN TALENT • Vacancies continue to trend down with a strong • Team engagement initiatives continue to improve • Strengthening educator capabi
Slide 12: Family Experience
FAMILY EXPERIENCE Improved NPS and family retention driven by focus on enhanced family experience and process embedment NPS FREQUENCY1 FAMILIES – NEW AND EXISTING • Improvements in the key driver of family • Continues to trend above pcp supporting • Enquiries down year on year consistent with the co
Slide 13: Quality, Education and Inclusion
QUALITY, EDUCATION AND INCLUSION Furthering trust and confidence in our centres, developing innovative programs for an inclusive environment QUALITY EDUCATION INCLUSION • Quality ratings remain above sector with focus on: • Group’s strategic focus is on strengthening the 3– • Reconciliation Action P
Slide 14: Operating Model
OPERATING MODEL CY24 opening occupancy and improved retention rates contributing to positive occupancy outcomes OPERATING MODEL OCCUPANCY Group Occupancy 80% • Strengthening operational execution and • Occupancy for the half was 68.2%, 0.8% pts above consistency though the network remains a focus CY
Slide 15: Financial Sustainability
FINANCIAL SUSTAINABILITY Balance sheet remains strong underpinned by strong operating cashflow and earnings growth CAPITAL ALLOCATION COST MANAGEMENT NETWORK OPTIMISATION • Balance sheet approach remains conservative as • Strategic procurement continues to reduce the cost • During the half, network
Slide 16: Financial Performance
FINANCIAL PERFORMANCE 2023 Full Year results | 15
Slide 17: Group Performance
GROUP PERFORMANCE Solid centre performance and controlled underlying support office costs deliver strong earnings growth $m CY24 H1 CY23 H1 Change • Operating and Statutory NPAT growth and margin expansion driven by improved centre performance coupled with well managed Support Office costs Group rev
Slide 18: Centre Performance
CENTRE PERFORMANCE Strong financial performance driven by efficient operating and strategic cost management • Operating and statutory NPAT deliver solid results with centre margin Centre performance improving by 0.9%pt vs pcp driven by: $m CY24 H1 CY23 H1 Change o Revenue growth primarily driven by
Slide 19: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK UPDATE IMAGE 2023 Half Year results | 18
Slide 20: Current Trading and Outlook
CURRENT TRADING AND OUTLOOK Improved performance in a very challenging environment TRADING UPDATE OUTLOOK Maintaining our rigor on execution and family experience. CY24 H2 sector conditions are anticipated to be more challenging: • Group ‘spot’ occupancy 72.7%, 0.1% pts lower than pcp and 69.0% YTD
Slide 21: Questions
QUESTIONS UPDATE IMAGE 2023 Full Year results | 20
Slide 22: Appendix
APPENDIX UPDATE IMAGE 2023 Full Year results | 21
Slide 23: Financial Statements
FINANCIAL STATEMENTS Consolidated Income Statement statement $m CY24 H1 CY23 H1 % change Continuing operations Revenue 480.4 455.3 5.5% Other income 2.9 1.9 52.6% Total 483.3 457.2 5.7% 60 centres 1,820 team members Expenses Employment costs (301.7) (288.4) 4.6% Property, utilities and maintenance c
Slide 24: Financial Statements
FINANCIAL STATEMENTS Balance Sheet Balance sheet ratios $m 30 June 2024 31 December 2023 $m 30 June 24 31 December 2023 ASSETS Non-current borrowings 114.0 99.0 Current assets Cash and cash equivalents 45.5 40.3 Cash and cash equivalents 45.5 40.3 Trade and other receivables 23.8 23.7 Other current
Slide 25: Cash Flow and Cashflow Allocation
CASH FLOW CASHFLOW ALLOCATION Cash flow Operating cash flow Strong cash $31m conversion1 $m CY24 H1 CY23 H1 % change Buy- 105% Cash flows from operating activities backs Receipts from customers (inclusive of GST) 487.0 456.8 6.6% Capital related outflows Dividend Payout ratio % NPAT Payments to supp
Slide 26: Fundamentals Supporting Demand Growth
FUNDAMENTALS SUPPORTING DEMAND GROWTH Female participation continues to increase Net migration continues to recover Net supply growth trending higher 800,000 % 63.0 700,000 62.0 600,000 Year on Year Supply Change By Quarter 61.0 500,000 4.0% 400,000 3.5% 3.6% 3.6% 60.0 300,000 3.5% 3.5% 3.0% 3.3% 59
Slide 27: Update on Key Ongoing Inquiries/Multi-Employer Bargaining
UPDATE ON KEY ONGOING INQUIRIES/MULTI-EMPLOYER BARGAINING Government remains dedicated to actively engaging with key ECEC stakeholders to drive better outcomes for team and families Productivity Multi-Employer ACCC Child Care Inquiry Commission Bargaining ECEC Inquiry • First Interim Report - July 2