Stadio Holdings Pty Ltd. · JSE:SDO
Stadio Holdings Pty — H1 2022 Earnings Presentation
46 slides from Stadio Holdings Pty's earnings presentation, Aug 30, 2022
Slide 1: 2022 Interim Results Presentation
2022 Interim Results Presentation 30 August 2022
Slide 2: Three distinct private higher education institutions
. . . THREE DISTINCT PRIVATE HIGHER EDUCATION INSTITUTIONS
Slide 3: Our purpose and vision
3 OUR PURPOSE: To empower the nation by widening access to higher education OUR VISION: To be a leading Higher Education provider, offering qualifications aligned with the needs of societies, students and the world of work
Slide 4: Presentation overview
PRESENTATION OVERVIEW Setting 2022 interim Our investment Why the future Questions & the scene financial results case looks bright answers 7 PLEASE JOIN US FOR A CAMPUS TOUR & SNACKS FOLLOWING THE PRESENTATION
Slide 5: Three distinct institutions – different strategies
5 3 DISTINCT INSTITUTIONS – DIFFERENT STRATEGIES Product leadership – Operational Excellence - Product leadership – “offering customers leading-edge products “providing customers with reliable products “offering customers leading-edge products and services that consistently enhance the or services a
Slide 6: Our strategy is underpinned by our WWS
66 OUR STRATEGY IS UNDERPINNED BY OUR WWS WIDENING ACCESS WORLD OF WORK STUDENT CENTREDNESS >> Operational Excellence >> Product Leadership >> Customer Intimacy
Slide 7: Successfully executed our strategy to date
7 SUCCESSFULLY EXECUTED OUR STRATEGY TO DATE CONSOLIDATION PHASE YEAR OF • Launch of STADIO Higher Education ESTABLISHMENT – first comprehensive institution – multiple schools and offerings 2016 2020 • Group owns 3 distinct private higher education 2022 institutions – unique offerings • Acquired 7 q
Slide 8: We've entered the growth phase
8 WE’VE ENTERED THE GROWTH PHASE • STADIO Centurion campus opens – first comprehensive campus – multiple-schools – equivalent to university campuses • Successful accreditation of new programmes, including accreditation of existing programmes to new sites of delivery • Consistent sustainable – eviden
Slide 9: Where are we going? 8% annual growth
9 WHERE ARE WE GOING? 8% ANNUAL GROWTH REQUIRED 840 12 976 38 262 100 000 + STUDENTS STUDENTS STUDENTS 56 000 STUDENTS STUDENTS * Jan Oct Dec 2017 2017 2021 2026 * As disclosed in the Pre-listing Statement TARGET: 80% DISTANCE LEARNING 20% CONTACT LEARNING
Slide 10: 2022 interim financial results overview
10 2022 INTERIM FINANCIAL RESULTS OVERVIEW STUDENTS REVENUE EDITDA PROFIT 38 348 R617 million R192 million AFTER TAX R105 million +11% +13% +19% 34 494 R548 million R161 million +24% R85 million HEADLINE HEPS CORE HE CORE HEPS EARNINGS 11.1 cps R96 million 11.3 cps R95 million +19% +18% 18%* +17%* 9
Slide 11: 2022 Interim financial results
11 2022 INTERIM FINANCIAL RESULTS Ms Samara Totaram Chief Finance Officer
Slide 12: 2022 summary notes
2022 SUMMARY NOTES * Business is moving out of consolidation phase into growth phase * STADIO Centurion Phase Il completed R 23m * Commenced with expansion of STADIO Distance Learning operational center in Krugersdorp * R5Sm spent to date * Total project value R42m — to be completed in February 2023
Slide 13: Total student numbers (like-for-like)
13 TOTAL STUDENT NUMBERS (LIKE-FOR-LIKE)
Slide 14: Student numbers – contact learning
14 STUDENT NUMBERS – CONTACT LEARNING
Slide 15: Student numbers – distance learning
15 STUDENT NUMBERS – DISTANCE LEARNING
Slide 16: Revenue
REVENUE REVENUE (R millions) R633m R297m 2018 R815m R409m 2019 R1 098m R933m 13% R548m tT R468m 2020 2021 JUNE (INTERIM) (DECEMBER (FULL YEAR) R617m 2022 STADIO enue due tudent num
Slide 17: EBITDA movement
17 250 200 150 EBITDA MOVEMENT STADIO EBITDA MOVEMENT CR millions) R40m R192m R161m (R3m) (R6m) — JUN 21 NEW STADIO POST COVID UNDERLYING JUN 22 CENTURION CAMPUS NORMALISATION GROWTH n=t=
Slide 18: EBITDA movement
18 EBITDA MOVEMENT STADIO EBITDA MOVEMENT CR millions) 250 200 150 100 50 R161m JUN 21 R40m R192m (R3m) (R6m) — NEW STADIO POST COVID UNDERLYING JUN 22 CENTURION CAMPUS NORMALISATION GROWTH nz
Slide 19: EBITDA and adjusted EBITDA
19 EBITDA AND ADJUSTED EBITDA
Slide 20: Impact of COVID-19 savings/(costs)
20 IMPACT OF COVID-19 SAVINGS/(COSTS)
Slide 21: Trade receivables and loss allowance
21 TRADE RECEIVABLES AND LOSS ALLOWANCE
Slide 22: Profit/(loss) for period
PROFIT/ (LOSS) FOR PERIOD STADIO PROFIT/LOSS FOR PERIOD (R millions) 24% R105m rye R85m t R52m a0 R36m (10) (60 R3.4m (R78m) Post ¢ ID normalization of (110) JUN 18 JUN 19 JUN 20 JUN 21 JUN 22 Ww Ww
Slide 23: EPS and HEPS
EPS AND HEPS STADIO EPS (cps) HEPS (cps) Uke 1.2 9.6 cps t te Sal eps 3.6 eps 3.5 eps (8.7) cps JUN18 JUN19. = JUN20. ss JUN21.——s JUN 22 ae 18% 9.4 cps t M1 cps 5.1 eps — (1.5) eps, JUN 19 JUN 20 JUN 21 JUN 22
Slide 24: Core headline earnings
24 CORE HEADLINE EARNINGS CORE HEADLINE EARNINGS (R millions) 18% R96m rein R32m STADIO CORE HEPS (cps) EN 17% MW3eps 9.7 cps t 5,7 eps 4.0 cps JUN 18 JUN 19 JUN 20 JUN 21 JUN 22 JUN 18 JUN 19 JUN 20 JUN 21 JUN 22
Slide 25: Core headline earnings movement
25 CORE HEADLINE EARNINGS MOVEMENT
Slide 26: Statement of financial position
26 STATEMENT OF FINANCIAL POSITION
Slide 27: Cash flow generation
27 CASH FLOW GENERATION STADIO RESTATED ADJUSTED** ere kaw Sua wn DEC 21 JUN 21 JUN 22 DEC 21 JUN 21 JUN 2022 Net cash flow from operations 323 168 198 208) 168 198 (before working capital) Working capital changes (57) 4 18 (9) 51 52) Net cash generated from operations 266 171 216 314 219 250 Cash g
Slide 28: Capital invested
28 CAPITAL INVESTED CAPITAL INVESTED (R millions) Acquisitions DEC 2016 DEC 2017 DEC 2018 DEC 2019 Infrastructure development & capital assets Programme development Cumulative investment 85 962 1777 DEC 2020 1882 STADIO DEC 2021 JUN 2022 2073 2115 n=
Slide 29: Cash utilisation
29 CASH UTILISATION STADIO CASH UTILISATION (R millions) “Excludes cash outflow related to CA Connect settlement 350@ **Includes cash outflow related to CA Connect settlement 300 R219m (R33m) || (R23m) Boom (Ri6m) 250 (R15m) 4m | = | (R59m) a | 200 (R5m) R167m — 150 100 R66m 50 0 JAN 22 CASH FROM AC
Slide 30: 2022 capital expenditure: growth projects
30 2022 CAPITAL EXPENDITURE: GROWTH PROJECTS
Slide 31: Our investment case
31 OUR INVESTMENT CASE Mr Chris Vorster, Chief Executive Officer
Slide 32: The market is big and needs private higher education
32 THE MARKET IS BIG AND NEEDS PRIVATE HIGHER EDUCATION OUR UNIVERSITIES HAVE CAPACITY 1 313 839 CONSTRAINTS Total students Do not access higher (1) 557 000 136% education Total 2019 students 409 906 Accepted into 1st year at publics Grade 12s qualified 49% 51% for university in 2020 2000 2020 200 3
Slide 33: Comprehensive range of programmes in our schools
WE OFFER A COMPREHENSIVE RANGE OF PROGRAMMES IN OUR SCHOOLS OF SCHOOL OF SCHOOLS OF FILM, SCHOOL OF SCHOOLS OF LAW BUSINESS BUSINESS & EDUCATION LIVE PERFORMANCE, INFORMATION AND POLICING SCHOOL INNOVATION, MEDIA & DESIGN, TECHNOLOGY COMMERCE, AND CREATIVE WRITING, ADMINISTRATION & ARCHITECTURE, AND
Slide 34: We have a far-reaching footprint
ONGWEDIVA (NAMIBIA) Distance Learning Campus WE HAVE A FAR- REACHING WINDHOEK (NAMIBIA) Distance Learning Campus HATFIELD (PTA) FOOTPRINT CENTURION (PTA) KRUGERSDORP (JHB) WATERFALL (MIDRAND) Distance Learning Campus RANDBURG (JHB) AUCKLAND PARK (JHB) DURBAN NORTH (DBN) MUSGRAVE (DBN) AFDA BELLVILLE
Slide 35: One of the top 10 largest higher education providers
The STADIO Group is one of the TOP 10 largest higher education providers in South Africa with over 38 000 students in South Africa & throughout Africa STADIO, Milpark Education and AFDA are registered with the Department of Higher Education and Training as separate private higher education instituti
Slide 36: The future looks bright
36 THE FUTURE LOOKS BRIGHT
Slide 37: We're a new vision in higher education
WE’RE A NEW VISION IN HIGHER EDUCATION
Slide 38: A new vision: blended learning, Khulisa share scheme
BLENDED-LEARNING MODEL STADIO KHULISA STUDENT (incl CANVAS learning environment) SHARE SCHEME A NEW VISION IN LIFELONG LEARNING FLEXIBLE HIGHER EDUCATION PARTNER ALIGNED TO THE FOCUS ON INCLUSIVITY WORLD-OF-WORK
Slide 39: We've laid the foundation
39 39 WE’VE LAID THE FOUNDATION 1. Invested heavily in Infrastructure, processes and systems over past few years 2. Capital-light investments going forward (apart from Durbanville campus) 3. Driving operational excellence and business innovation 4. Comprehensive programme mix, with strong pipeline 5
Slide 40: New student growth is exciting
40 40 NEW STUDENT GROWTH IS EXCITING 18% NEW STUDENTS • Growth with very few new programmes due to Regulatory Delays • During 2022, 5 key programmes were accredited • Contact learning is showing positive signs – students are returning to campus • AFDA (high-fee product) increased by 6% despite econo
Slide 41: Programme growth strategy
PROGRAMME GROWTH STRATEGY Same regulations as universities CHE SAQA DHET Popular in-demand programmes Regulatory process is a barrier to entry • New programmes developed in both modes (contact learning and distance learning) • New programmes offered on new sites including programmes in: Big student
Slide 42: Distance learning continues to grow
DISTANCE LEARNING CONTINUES TO GROW 1. Good overall growth (14%) 2. Distance learning is well established in the STADIO Group 3. Biggest distance learner provider outside of UNISA 4. Comprehensive offering across multiple schools with focused development and accreditation of new programmes 5. Kruger
Slide 43: What makes us so excited?
WHAT MAKES US SO EXCITED? • Wide range of programmes • Students return for • World class virtual learning postgrad studies • 31 pipeline environment (CANVAS) • Short courses programmes • Krugersdorp logistics centre • Centre for Lifelong CURRENT • New programmes will enable DL to scale WELL Learning
Slide 44: 8% annual growth required to reach 2026 target
44 8% ANNUAL GROWTH REQUIRED TO REACH 2026 TARGET GROWTH 8% REQUIRED 80% DISTANCE LEARNING 20% CONTACT LEARNING JAN OCT DEC DEC IN THE 2017 2026* 2017 2020 2021 FUTURE 840 12 976 35 031 38 262 56 000 100 000+ STUDENTS STUDENTS STUDENTS STUDENTS STUDENTS * STUDENTS * As disclosed in the Pre-listing S
Slide 45: The future is bright
THE FUTURE IS BRIGHT HOW BIG CAN WE GET? WE WANT TO BE THE ALTERNATIVE TO UNISA SOLID FOUNDATION ESTABLISHED FOR GROWTH
Slide 46: Questions & answers
46 QUESTIONS & ANSWERS