Adcorp Holdings Limited · JSE:ADR
Adcorp — FY2021 Earnings Presentation
25 slides from Adcorp's earnings presentation, May 31, 2021
Slide 1: Adcorp Investor Presentation FY2021
Adcorp Investor Presentation FY2021 DATE 31 May 2021
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
1 2 3 4 Business context Financial results Operational review Outlook Dr John Wentzel Noel Prendergast Bruce Toerien Dr John Wentzel
Slide 4: Business Context
Business Context PRESENTED BY Dr John Wentzel DATE 31 May 2021
Slide 5: What happened in FY2021
What happened in FY2021 Impact of COVID-19: Percentage change from pre-crisis level • Economic contraction in South Africa 0,0 -10,0 • Economic contraction in Australia -20,0 -30,0 -40,0 • Business confidence at historic lows in both markets -50,0 -60,0 • Tough trading environment -70,0 -80,0 Agr. M
Slide 6: How did Adcorp react
How did Adcorp react • Undertook a significant cost reduction program • Disposed of non-core assets to reduce debt levels • Drove aggressive cash management • Optimised the ownership structure, achieving B-BBEE 1 in AWS • Re-focused the strategy
Slide 7: Substantial progress on FY2021 half-year value drivers
Substantial progress on FY2021 half-year value drivers Go-to-market model that encompasses Cost and Cash Management both SA and Australia Implementation of technology stack Divestitures and business simplification B-BBEE ownership and enhancement in SA Margin management Leadership/culture developmen
Slide 8: FY2021 Audited Financial Results
FY2021 Audited Financial Results PRESENTED BY Noel Prendergast DATE 31 May 2021
Slide 9: Restatements and accounting complexities FY2021
Restatements and accounting complexities FY2021 IFRS 9 | Angola restricted cash and bond IFRS 9 | Angola cash and bonds | restatement | CY balance sheet – R67 million CY IS impact R3.7 million (debit) Enterprise Transformation Project | Prepaid expense Enterprise Transformation Project | IS impact |
Slide 10: Financial snapshot
Financial snapshot Revenue from continuing operations Operating profit from continuing Cash generated by operations Interest-bearing debt, excluding leases, decreased by 9,3% to R11,7 billion operations before finance income and increased by 337,3% reduced to R456 million (2020: R12,9 billion restat
Slide 11: Summarised consolidated statement of profit and loss
Audited Audited Year end Year end Summarised consolidated Feb 2021 Feb 2020 statement of profit and loss R'000 R'000 % Change Revenue 11,716,956 12,922,325 (9.3) Cost of sales (10,575,140) (11,452,501) (7.7) Gross profit 1,141,816 1,469,824 (22.3) Key notes: Other income excl. one-off type income 79
Slide 12: Segmental performance: Revenue
Segmental performance: Revenue Industrial Services (SA) Professional Services (SA) Training Services (SA) Australia 6 000 000 2 800 000 6 000 000 360 000 5 000 000 2 400 000 5 000 000 300 000 2 000 000 4 000 000 4 000 000 1 600 000 240 000 3 000 000 3 000 000 1 200 000 180 000 2 000 000 800 000 2 00
Slide 13: Segmental performance: EBITDA (after central allocation)
Audited Audited Year end Year end Segmental performance: Feb 21 Feb 20 EBITDA (after central R'000 R'000 % Change allocation) South Africa - continuing operations 138,201 181,154 (23.7) Industrial Services 132,689 141,526 (6.2) EBITDA – continuing operations marginal Professional Services 25,292 4,9
Slide 14: Summarised consolidated statement of financial position
Audited Audited Audited Summarised consolidated Year end Year end Year end Feb 21 Feb 20 Feb 19 statement of financial R'000 R'000 R’000 position Assets Property and equipment 48,286 72,212 57,647 Right-of-use lease assets 364,572 414,917 - Trade and other receivables decreased Intangible assets a
Slide 15: Cashflow bridge
Cashflow bridge • Significant improvement in collections – 90 days + has reduced by 50% since February 2020. Overall debtors have reduced by 24.6% • Effective management of payables • Reduction in net finance costs countered by increase in lease liability interest *Restated to classify Adcorp Suppor
Slide 16: Net debt
Audited Audited Year end Year end Feb 21 Feb 20 Net debt R'000 R'000 ZAR Amortising term loan - 200,000 South African debt facilities extended to August 2022 ZAR Amortising revolving credit facility - 570,000 Australian facilities extended to ZAR New revolving credit facility 450,000 - June 2022
Slide 17: Operational Review
Operational Review PRESENTED BY Bruce Toerien DATE 31 May 2021
Slide 18: Industrial Services – SA
Industrial services Industrial Services – SA 12 months ended 28 February 2021 Operational review Outlook 5 542 TES / contingent revenue declined TES / contingent showing signs of an increase by 17% largely driven by high in hours worked and headcount 4 591 headcount reductions in deemed Increa
Slide 19: Professional Services – SA
Professional Services – SA 12 months ended 28 February 2021 Operational review Outlook Support Services and Professional Services merged Contingent headcounts are 2 539 Revenue contraction of 20% increasing Budgetary constraints at major clients Permanent placement demand 2 030 EBITDA im
Slide 20: Training Services – SA
Industrial services Training Services – SA 12 months ended 28 February 2021 310 Operational review Outlook Training revenue down 40% 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
Slide 21: Australia
Australia 12 months ended 28 February 2021 Operational review Outlook 4 911 Australian Dollar revenue contraction offset Permanent placements remain under 4 531 by Rand fluctuations pressure although green shoots emerging Paxus has proven to be fairly resilient Contingent headcount is 2 LS
Slide 22: Outlook
Outlook PRESENTED BY Dr John Wentzel DATE 31 May 2021
Slide 23: Where is Adcorp now
Where is Adcorp now • Traded at 91% of FY2020 • Net debt reduction To be the leading workforce solutions • Improved working capital management partner in the markets we serve by connecting and advancing human potential • Adcorp Workforce Solutions attained a competitive B-BBEE Level 1 • Technology t
Slide 24: What is Adcorp’s outlook
What is Adcorp’s outlook • Slow recovery from COVID-19 in SA, better in Australia. • Competition will remain intense in SA and Australia. • Focus on enabling the workforce of the future for our clients. • Agility through sector specific brands and solutions. • Growth through leveraging technology in
Slide 25: Q&A Thank you
Q&A Thank you