Advtech Limited · JSE:ADH
Advtech — FY2006 Earnings Presentation
57 slides from Advtech's earnings presentation, March 2007
Slide 1: Committed to the development of potential
Committed to the development of potential
Slide 2: Committed to the development of potential
Committed to the development of potential
Slide 3: Committed to the development of potential
Committed to the development of potential
Slide 4: Committed to the development of potential
Committed to the development of potential
Slide 5: Committed to the development of potential
Committed to the development of potential
Slide 6: The average flash of lightning could turn on a light bulb
The average flash of lightning could turn on a 100-watt The average light bulb flash for of more lightning than 3could months. turn on a 100-watt light bulb for more than 3 months. Committed to the development of potential
Slide 7: The average flash of lightning could turn on a light bulb
The average flash of lightning could turn on a 100-watt light bulb for more than 3 months. Committed to the development of potential
Slide 8: Definition of potential
[ po•ten•tial ] adj. that can be developed into something noun. the possibility of something happening, being developed or used e.g.. potential energy Source: Oxford Advanced Learners Dictionary, 7th Edition Committed to the development of potential
Slide 9: Committed to the development of potential
Committed to the development of potential
Slide 10: The average flash of lightning could turn on a light bulb
The average flash of lightning could turn on a 100-watt light bulb for more than 3 months. Committed to the development of potential
Slide 11: Committed to the development of potential
Committed to the development of potential
Slide 12: The most powerful, flexible and renewable source of potential
[ po•ten•tial ] However, the most powerful, flexible and renewable source of potential is … Committed to the development of potential
Slide 13: Human potential
human potential Committed to the development of potential
Slide 14: Annual results for the twelve months ended December 2006
annual results for the twelve months ended 31 December 2006 FROM THE CLASSROOM TO THE BOARDROOM, WE ARE COMMITTED TO THE DEVELOPMENT OF POTENTIAL Committed to the development of potential
Slide 15: Overview
overview • Leader in SA in Education, Training, Skills Development and Career Placement • Focused on development, deployment and management of human capital • Two primary divisions: • Independent Education (86%) • Human Resourcing (14%) Committed to the development of potential
Slide 16: ADvTECH Education
advtech education SCHOOLS TERTIARY SKILLS Committed to the development of potential
Slide 17: ADvTECH Resourcing
advtech resourcing RECRUITMENT Committed to the development of potential
Slide 18: Illustrating our vision
illustrating our vision RECRUITMENT BETTER BETTER LIFE LIFE IMFUNDO FOR FOR TERTIARY ALL ALL CAREER SCHOOLS d JOB an CE I FE LA L KP LS RECRUITMENT OR KIL W S EDUC IMFUNDO ATIO N TERTIARY F SELRTH WO SCHOOLS YOUNG UN(DER) EMPLOYED PERSON Committed to the development of potential
Slide 19: Sustainability
sustainability Inherent sustainability: Committees - Transformation - HESIO - Remuneration - Academic Advisory Council BEE - “BBB” EmpowerDEX rating Good corporate governance Committed to the development of potential
Slide 20: Sustainability
sustainability Inherent sustainability: Transformation - 67% of students and 55% of placements - HDI staff growth 26% vs 13% overall - 44% of MDP Committees - Transformation - HESIO - Remuneration - Academic Advisory Council BEE - “BBB” EmpowerDEX rating Good corporate governance Committed to the de
Slide 21: Sustainability
sustainability Inherent sustainability: Transformation - 67% of students and 55% of placements - HDI staff growth 26% vs 13% overall - 44% of MDP Committees - Transformation - HESIO - Remuneration - Academic Advisory Council BEE - “BBB” EmpowerDEX rating Good corporate governance Committed to the de
Slide 22: Sustainability
sustainability Inherent sustainability: Transformation - 67% of students and 55% of placements - HDI staff growth 26% vs 13% overall - 44% of MDP Committees - Transformation - HESIO - Remuneration - Academic Advisory Council BEE - “BBB” EmpowerDEX rating Good corporate governance Committed to the de
Slide 23: Sustainability
sustainability Inherent sustainability: Transformation - 67% of students and 55% of placements - HDI staff growth 26% vs 13% overall - 44% of MDP Committees - Transformation - HESIO - Remuneration - Academic Advisory Council BEE - “BBB” EmpowerDEX rating Good corporate governance Committed to the de
Slide 24: Sustainability
sustainability Inherent sustainability: Transformation - 67% of students and 55% of placements - HDI staff growth 26% vs 13% overall - 44% of MDP Committees - Transformation - HESIO - Remuneration - Academic Advisory Council BEE - “BBB” EmpowerDEX rating Good corporate governance Committed to the de
Slide 25: Sustainability
sustainability Human Capital: • Cornerstone of ADvTECH’s sustainability • Created 328 new job opportunities • Investors in People • Skills development Corporate Social Investment: • Group bursary programme including DJ Fresh, Lucky Mazibuko & P4 bursary initiatives • Campus and divisional initiative
Slide 26: Academic excellence
academic excellence If current trends continue, one out of five who start school now will pass matric in 12 years’ time – Business Day, Jan 2007 Against this backdrop, ADvTECH and its school learners achieved: • 100% matric pass rate (2005: 100%), 2 200 distinctions • 74% achieved either A or B aggr
Slide 27: Academic excellence
academic excellence The current participation rate in tertiary education in SA of 3% is half that of Egypt! Against this backdrop, ADvTECH and its tertiary students achieved: • Over 69 000 exams written by full-time students (61% pass rate) • 1 685 full-time graduates of which 209 were with distinct
Slide 28: Operational highlights
operational highlights • Almost 40 000 students (up 10%) across the Group • HE programmes and campuses completed re-accreditation in 2006 • Independent Institute of Education (IIE) registered as Private Higher Education provider in 2007 • 3 000 permanent placements and 1 500 temporary placements Com
Slide 29: Operational highlights
operational highlights • Significant progress in transformation and sustainability. Management 23% transformed • Successful acquisition and integration of Vertex-Kapele • Roll out of share participation scheme for senior staff, strengthening of central resources in marketing, HR and finance – increa
Slide 30: Financial overview
financial overview 11.0 21.8 cents cents 40.1 R122m cents R830m 57% 46% 41% 39% 26% REVENUE OPERATING DILUTED HEPS FREE OPERATING CASH DISTRIBUTION PROFIT FLOW PER SHARE Committed to the development of potential
Slide 31: Financial overview
financial overview SUMMARISED BALANCE SHEET FUNDS EMPLOYED BASIS R'm 2006 2005 2006 2005 Fixed and long term asset 403 366 Deferred tax 35 42 Current assets 30 37 Total equity 329 287 Debtors and other 30 37 Interest bearing debt 18 23 Current liabilities -182 -170 Less: Cash and bank -60 -36 Fees i
Slide 32: Group value added
group value added Committed to the development of potential
Slide 33: Financial overview: growth
financial overview • growth Education Revenue Resourcing Revenue R'm 800 R'm 120 600 100 80 400 60 40 200 20 - - 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006 CAGR = 17% CAGR = 9% Committed to the development of potential
Slide 34: Financial overview: efficiency & productivity
financial overview • efficiency & productivity Staff Productivity Operating Margin (operating profit per employee) 20% R'000 50 15% Total 40 10% Education 30 Resourcing 20 5% 10 0% - 2001 2002 2003 2004 2005 2006 2003 2004 2005 2006 CAGR = 24% Committed to the development of potential
Slide 35: Financial overview: profitability
financial overview • profitability Education - Operating Profit Resourcing - Operating Profit R'm R'm 20 150 15 100 10 5 50 - 2002 2003 2004 2005 2006 - 2002 2003 2004 2005 2006 CAGR = 27% CAGR = 39% Committed to the development of potential
Slide 36: Financial overview: cash flow generation
financial overview • cash flow generation R'm Free operating cash flow per share 200 cents 50.0 150 40.0 100 30.0 20.0 50 10.0 - - 2002 2003 2004 2005 2006 2003 2004 2005 2006 Cash generated by operations Cash from operations (after w orking capital) CAGR = 29% Committed to the development of potent
Slide 37: Financial overview: distribution to shareholders
financial overview • distribution to shareholders ce nts 12 10 8 6 4 2 - 2003 2004 2005 2006 Committed to the development of potential
Slide 38: Financial overview
financial overview Committed to the development of potential
Slide 39: Financial overview
financial overview Committed to the development of potential
Slide 40: Share stats
share stats Share Statistics (22/03/2007) Share price - cents 425 Highest price – cents (22 Mar) 425 Lowest price – cents (27 Jun) 191 Market cap - Rm 1 673 Shares in issue - m 394 Shares traded – m (Jan – Dec ‘06) 90.9 ADvTECH relative to its peers 1-Feb- 1-May- 1-Aug- 1-Nov- 1-Feb- 1-May- 1-Aug- 1
Slide 41: Report card
report card Student: ADvTECH Limited Date of birth: Founded 1978 Report for year: 2006 Subject Result Continued reinvestment in infrastructure & feasibility thereof - capex spend of R65.5m √ - strong enrolment (+10%) and Education revenue growth (+22%) √ Litigation - ongoing ? - various applications
Slide 42: Report card: passed
report card Student: ADvTECH Limited Date of birth: Founded 1978 Report for year: 2006 Subject Result Improved results and cash flow - outstanding academic results (refer separate report) √ - diluted HEPS up 47% √ - operating margin up from 13.2% to 14.7% √ - free operating cash flow per share up 41
Slide 43: Market – national education
market – national education Did you know? Education in national budget – R105.5bn – largest item 30 out of every 100 people in SA are either learners or students Of every 1 000 learners/students in SA: 854 are in public schools 23 are in independent schools 53 are in public HE institutio
Slide 44: Market – national education
market – national education Did you know? Only 22% of first time entering students graduate after 5 years (2000/2001) – “Access without a fair chance of success is not access at all” – Mr Enver Surty, Deputy Minister of Education Learners who wrote 2006 matric were the first to have begun their
Slide 45: Market – national education
market – national education Did you know? Exemption rate is still lower than in 1980’s but higher in absolute numbers Very little change in number of higher grade maths passes IEB results: Number of pupils = 7 035 in 2006 (1994: 1 305) 98.3% pass rate Source: Has school education improved
Slide 46: Market - schools
market - schools National Statistics – 2006: 12 302 000 learners 386 600 educators 26 300 schools Highest growth in learners in North West (7%) & Mpumalanga (3.3%) Num ber of Learners - 2006 Num ber of Educators - 2006 2.8% 5.0% 97.2% 95.0% Pub lic Ind ep end ent Pub lic Ind ep end ent Sourc
Slide 47: Market - schools
market - schools Independent Schools – 2006: 340 060 learners 19 400 educators 1 098 schools Le a rne rs p e r Ed uc a t o r D is t rib ut io n o f Ind e p e nd e nt Le a rne rs p e r P ro v inc e Ea st e rn Ca pe 13% 6% 10% Fre e S t a t e 40 6% Ga ut e ng 30 5% KZN 20 Limpopo 10 10% Mpuma la
Slide 48: Market - schools
market - schools 6 YEAR CAGR’s (2000 – 2006) 3.8% 4.5% 0.4% 0.5% PUBLIC INDEPENDENT LEARNERS LEARNERS Source: Dept of Education Committed to the development of potential
Slide 49: Market - tertiary
market - tertiary Public HE & FET Institutions & ABET – 2005: 1 384 000 students By Qualification Type 2005 15 500 educators 50 FET & 23 HE institutions 7% 3% 8% Occas io nal Public pass rates: Und erg rad uat e Pro fes s io nal und erg rad uat e Undergrad – 15% 22% Ho no urs 60% M as t er
Slide 50: Market - recruitment
market - recruitment Did you know? Unemployment: 30% - Government aims to halve by 2014 Formal economy employs 56% of students from top universities, but BEE pressure Average age of skilled artisans is 54 years Employment has grown from 9.5m to 12m jobs since 1995 1 500 news jobs are creat
Slide 51: Prospects - education
prospects - education More pupils go to (and finish) school – Pta News, 05 Sept 2006 80% of schools need help! – Daily Manuel Laments SA Skills Sun, 16 Oct 2006 Dearth - fin24, 22 Feb 2007 With average age of skilled technical staff now at 54, SA is resorting to importing skilled staff – Business Da
Slide 52: Prospects - resourcing
prospects - resourcing More pupils go to (and finish) school – Pta News, 207 497 young people 05 Sept 2006 registered for learnerships – Budget Speech 2006 1 500 new jobs being created every day – Budget Speech 2006 … demand for skills has been unprecedented … – Business With average age of skilled
Slide 53: Prospects
prospects Committed to the development of potential
Slide 54: Prospects
prospects - Investing in infrastructure, capacity - Broader offering - Sustained academic achievement - Increased enrolments Education division to sustain positive financial trend Committed to the development of potential
Slide 55: Prospects
prospects - Investing in infrastructure, capacity - Broader offering - Sustained academic achievement - Increased enrolments Education division to sustain positive financial trend - Focused and effective model - Leadership in chosen markets - Buoyant recruitment market Resourcing division well posit
Slide 56: Prospects
prospects - Investing in infrastructure, capacity - Broader offering - Sustained academic achievement - Increased enrolments Education division to sustain positive financial trend - Focused and effective model - Leadership in chosen markets - Buoyant recruitment market Resourcing division well posit
Slide 57: Thank you
thank you A BETTER LIFE FOR ALL … G R O U P Committed to the development of potential