annual financial results 2016 · 2016. page 39. academic excellence. 08. 6 distinctions. 8...

ANNUAL FINANCIAL RESULTSFOR THE YEAR ENDED 31 DECEMBER 2016

ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016 PAGE 2

FINANCIAL HIGHLIGHTS


EXCELLENT RESULTSPERFORMANCE DRIVERS

Total enrolment2016: 53 337

13%2015: 47 209

School enrolment2016: 24 199

6%2015: 22 877

Education sites2016: 98

5%2015: 93

Tertiary full qualificationenrolment

2016: 29 138

20%2015: 24 332


GROUP REVENUE

1 687 1 7661 932

2 708

3 353

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015 2016

R’m

Axis Title

+24%


GROUP OPERATING MARGIN

11.9%12.6

13.3%

16.6%

18.1%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2012 2013 2014 2015 2016

R’m

Axis Title

CONTINUED IMPROVEMENT


TRADING OPERATING PROFIT

200222

256

448

585

0

100

200

300

400

500

600

700

2012 2013 2014 2015 2016

R’m

+30%


HEADLINE EARNINGS PER SHARE

33.637.6

40.3

51.0

71.1

0

10

20

30

40

50

60

70

80

2012 2013 2014 2015 2016

Cen

ts

Axis Title

+39%


SCHOOLS


SCHOOLS REVENUE

739819

915

1 432

1 644

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2012 2013 2014 2015 2016

R’m

Axis Title

+15%


SCHOOLS OPERATING PROFIT

148 157 162

299

345

0

50

100

150

200

250

300

350

400

2012 2013 2014 2015 2016

R’m

Axis Title

+16%


SCHOOLS OPERATING MARGIN

20.0%

19.2%

17.7%

20.9% 21.0%

16%

17%

18%

19%

20%

21%

22%

2012 2013 2014 2015 2016

Axis Title


TERTIARY


TERTIARY REVENUE

739 751827

982

1 253

0

200

400

600

800

1,000

1,200

1,400

2012 2013 2014 2015 2016

R’m

Axis Title

+28%


TERTIARY OPERATING PROFIT

3248

84

134

223

0

50

100

150

200

250

2012 2013 2014 2015 2016

R’m

Axis Title

+67%


TERTIARY OPERATING MARGIN

4.4%

6.4%

10.2%

13.7%

17.8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2012 2013 2014 2015 2016

Axis Title


RESOURCING


RESOURCING REVENUE

211 200 194

297

461

0

50

100

150

200

250

300

350

400

450

500

2012 2013 2014 2015 2016

R’m

Axis Title

+55%


RESOURCING OPERATING PROFIT

22

18 18

29

20

0

5

10

15

20

25

30

35

2012 2013 2014 2015 2016

R’m

Axis Title

-31%


RESOURCING OPERATING MARGIN

10.4%

9.1% 9.4%9.8%

4.4%

0%

2%

4%

6%

8%

10%

12%

2012 2013 2014 2015 2016

Axis Title

9.2%

Exclude effects of acquisitions


2016

REVENUE CONTRIBUTIONSEGMENTAL OVERVIEW

Schools

Tertiary

Resourcing

2015


OPERATING PROFIT CONTRIBUTIONSEGMENTAL OVERVIEW

Schools

Tertiary

Resourcing

2016 2015


CASH FLOW GENERATION

332363

286

556

749

186 200

93

223

302

0

100

200

300

400

500

600

700

800

2012 2013 2014 2015 2016

R’m

Axis Title

Cash generated by operations Cash from operations


NET CASH POSITION

-62-202

-436

-1 157-1 110

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

2012 2013 2014 2015 2016

R’m

Axis Title

DECREASED BORROWINGS


BORROWING CAPACITY

1.1

1.6

2.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Current borrowings Current facilities Borrowing capacity (3.5 xEBITDA)

Axi

s R

’bn

Axis Title

Series 1HeadroomR1.5 billion


DEBTORS MANAGEMENT

Well managed Strong emphasison collections

Mindful of consumer

• Revenue ↑ 24%• Debtors ↑ 22%• Schools below 1% of revenue• Tertiary average 4% of revenue• Bad debt levels remain

consistent


MARKET CAP AT YEAR END

2 612 2 768

3 665

7 728

9 347

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2012 2013 2014 2015 2016

R’m

Axis Title

+21%


EXCELLENT RESULTSPERFORMANCE SUMMARY

Revenue

24%

Normalised earnings per share

24%

Trading operating profit

30%

Dividends per share

32.5cents


STRATEGY


STRATEGIC IMPERATIVES

Innovation > Business Process> Product / Market

Development

Africa

Customer Focus> Easy to do business with

us> Understanding needs

Academic Excellence> Teaching & Learning> Benchmarking our

performance> Learning analytics> International & Employer

recognition

Growth> Organic and Acquisitive> Channel> Product> Segment> Geographic

RISK MANAGEMENT

REGU

LATI

ONS

TECH

NOLO

GY

ECONOMY

REPUTATION& STAFF

DESTRUCTIVE TAKEOVERBEE

Human &CapitalProductivity

Excellence through Specialisation> Niche market focus> Benchmarking> Database

development




Development

Africa



AcademicExcellence> Teaching & Learning> Benchmarking our


recognition


RISK MANAGEMENT

REGU

LATI

ONS

TECH

NOLO

GY

ECONOMY

REPUTATION& STAFF




development


ACADEMIC EXCELLENCE

BENCHMARKINGPERFORMANCE

LEARNINGANALYTICS

INTERNATIONAL&

EMPLOYERRECOGNITION

TEACHING & LEARNING


THE IIE

THE INDEPENDENT INSTITUTE OF EDUCATION

South Africa’s leading, most accredited and largest “private university” or private higher education institute. Established in 2005


THE IIE

• DHET (Department of Higher Education and Training)

• HEQC (Higher Education Quality Committee)

• SAQA (South African Qualification Authority)


THE IIE

Private Universities

Naming convention is problematic

Public Universities

Public perception confusion


THE IIE

Academic experts

StudentSupportServices

Productinnovation

Newqualifications

&development

Research

Senate

Centralisedstudent supportservice


THE IIE

IIE learn platform

BlackboardLMS

100+academics

GEPwork readiness

13 newqualifications

Focus onteaching &

learning experience

57 registered& accreditedqualifications

Faculties

Commerce

Humanities

HumanitiesSocial Sciences

Information+

communicationtechnologies

Law

Education


ACADEMIC EXCELLENCE


Matric results


ACADEMIC EXCELLENCE

MATRICULANTS 1 636

DISTINCTIONS 2 562

1

AVERAGE DISTINCTIONS 1.6Per candidate

2016 MATRIC RESULTS


ACADEMIC EXCELLENCE

6 DISTINCTIONS08

8 DISTINCTIONS

7 DISTINCTIONS

22 STUDENTS

40 STUDENTS

43 STUDENTS

1 STUDENT10 DISTINCTIONS

4 STUDENT9 DISTINCTIONS

6 DISTINCTIONS08

4 STUDENTS9 DISTINCTIONS

8 DISTINCTIONS

7 DISTINCTIONS

22 STUDENTS

40 STUDENTS

43 STUDENTS

2016 MATRIC RESULTS


ACADEMIC EXCELLENCE

1.3

MARAVEST BEFORE:

Average Distinctions per candidate

1.7

MARAVEST AFTER 1 Yr:

Average Distinctions per candidate

ADDING VALUE


ACADEMIC EXCELLENCE

84% 16% 72% 15%

Averagemodule

distinction rate

Average throughput pass

rate

Average dropout rate

Average module pass

rate

TERTIARY


INTERNATIONAL BENCHMARKING



INTERNATIONAL BENCHMARKING


INTERNATIONAL AND EMPLOYER RECOGNITIONGRADUATE PLACEMENT

81%Employed

within6 months

International &

Employerrecognition


INTERNATIONAL AND EMPLOYER RECOGNITION

International &

Employerrecognition

GRADUATE PLACEMENT

3223 of our graduates were placed in first time employment through the Graduate Empowerment Programme (GEP)



INTERNATIONAL MATHEMATICS & SCIENCE OLYMPIAD 2016

13Medals

Jakarta, Indonesia


CRAWFORDSCHOOLS™INTERNATIONAL AND EMPLOYER RECOGNITION

USA college visits



Loerie Awards

• 4 Silver • 3 Bronze

Pendoring

• 2 Silver

Golden Muse Award

Decorex 2016

• Winner

Nestle Tertiary Media & Creative Choice Award

• Winner

SA Fashion Week

• 2x Finalists

Sappi Goldpack Award




Development

Africa



AcademicExcellence> Teaching & Learning> Benchmarking our


recognition


RISK MANAGEMENT

REGU

LATI

ONS

TECH

NOLO

GY

ECONOMY

REPUTATION& STAFF




development


GROWTH

ORGANIC & ACQUISITIVE

PRODUCT

SEGMENT

CHANNEL

GEOGRAPHIC


ORGANIC & ACQUISITIVE GROWTH


30 190

33 654

47 209

53 337

60 176

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2013 2014 2015 2016 2017

Axis Title

Total Full-Time Enrolment History (Feb)

GROWTHTOTAL GROWTH END FEB

Tertiary full qualifications

+13%

Schools


GROWTH: SCHOOLS DIVISIONEND FEB

12 980 13 541

22 87724 199

26 713

0

5,000

10,000

15,000

20,000

25,000

30,000

2013 2014 2015 2016 2017

Axis Title

Schools Enrolment History (Feb)


GROWTH: TERTIARY DIVISIONEND FEB

17 21020 113

24 332

29 138

33 463

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2013 2014 2015 2016 2017

Axis Title

Tertiary Full Qualification Enrolment History (Feb)


GROWTHGROUP

2016 20172015

98

47 209

118

60 176

93

53 337

Students Students Students

Brands

Sites

2015

Sites Sites

BrandsBrands

262523


Name Status Students Location Positioning

Rosebank College Mega Campus

Higher education +7 400Braamfontein,

GautengAffordable

higher education

Rosebank CollegeConnected Campus

Higher education +400Blended learning,

Polokwane, Limpopo

Affordablehigher education

Founders Hill College(ADvTECH Academies)

Pre-primary,

primary,

high school

+408Modderfontein,

GautengMid-fee

schooling sector

Copperleaf College (2017)(ADvTECH Academies)

Pre-primary,

primary

+180Centurion,

GautengMid-fee

schooling sector

GROWTH: ORGANIC


Name Status Students Location Positioning Boarding

Summit College

Pre-primary,

primary,

high school

+582Kyalami,

GautengPremium fee Yes

Glenwood House

(2017)

Pre-primary,

primary,

high school

+769

George,

Western

Cape

Premium fee Yes

Elkanah House

(2017)

Pre-primary,

primary,

high school

1 366

Cape Town,

Western

Cape

Premium fee

GROWTH: ACQUISITIVESCHOOLS


Name Status Students Location Positioning

Capsicum Culinary Studio (100%)

Largest chef school SA

Face to face +800National footprint

Hospitality & tourism sector

Oxbridge Group (51%) Distance 21 000 DistanceBroad

spectrum

University of Africa (2017) (51%) Distance 2 000

Distance (sub-Saharan

Africa clientele)

Broadspectrum

GROWTH: ACQUISITIVETERTIARY


Distance education

Blended learning

CHANNEL


GROWTH: CHANNELSA DISTANCE EDUCATION MARKET

Source: VitalStats 2014 Public Higher Education

60%

40%

Distance Education Market 2014

Contact Distance

Distance: 370 000

Contact:590 000

Total:960 000


GROWTH: CHANNELDISTANCE EDUCATION

Distance learningprovider

21 000 students(end 2016)

Oxbridge Academy

51% Acquisition

14 800 15 500

21 000

2014 2015 2016

Axis Title


GROWTH: CHANNELDISTANCE EDUCATION

University of Africa

Lusaka, Zambia

2 000+ Students

51% Acquisition

Distance learning providerDegree, Honours,Phd LeadershipIn Africa’s development


GROWTH: CHANNELBLENDED LEARNING

Rosebank College Connected Campus

Connected Campus

– Polokwane (2016)

– Bloemfontein (2018)– Pietermaritzburg (2018)


13 New qualifications in 2016

16 New qualificationsAccreditation in progress

PRODUCT GROWTH


PRODUCT GROWTH2016

IIE Qualification Name (offered for the first time in 2016) Degree Certificate

1 Bachelor of Commerce (Distance)

2 Bachelor of Public Administration (Distance)

3Bachelor of Education in Foundation Phase Teaching

4Bachelor of Education in Intermediate Phase Teaching

5 Bachelor of Commerce in Economics

6 Bachelor of Accounting

ACCREDITED QUALIFICATIONS OFFERED FOR THE FIRST TIME IN 2016


PRODUCT GROWTH2016


7Bachelor of Computer and Information Sciences in Network Engineering

8Bachelor of Commerce Honours in Strategic Brand Management

9 Bachelor of Arts Honours in Communication

10Bachelor of Arts Honours in Strategic Brand Communication

11Higher Certificate in Business Management (Contact)

12Higher Certificate in Business Management(Distance)

13 Higher Certificate in Legal Studies

ACCREDITED QUALIFICATIONS OFFERED FOR THE FIRST TIME IN 2016


PRODUCT GROWTHIN PROGRESS


1Bachelor of Business in Logistics and Supply Chain Management (Contact)

2Bachelor of Arts in Strategic Brand Communication (Distance)

3Bachelor of Business Administration in Marketing (Contact)

4Bachelor of Business Administration in Marketing (Distance)

5Bachelor of Commerce in Strategic BrandManagement (Distance)

6 Bachelor of Laws (Contact)

7 Bachelor of Arts in Law (Contact)

8Bachelor of Arts Honours in Psychology (Contact)

PROGRAMMES IN THE PIPELINE FOR 2018


PRODUCT GROWTHIN PROGRESS


9Postgrad Certificate in Education in Senior Phase and Further Education and Training Teaching (Contact)

10Postgrad Certificate in Education in Senior Phase and Further Education and Training Teaching (Distance)

11Higher Certificate in Logistics and Supply Chain Management (Contact)

12Higher Certificate in Early Childhood Care and Education (Contact)

13Higher Certificate in Early Childhood Care and Education (Distance)

14 Higher Certificate in Travel (Contact)

15 Higher Certificate in Travel (Distance)

16Higher Certificate in Human Resource Practices (Distance)

PROGRAMMES IN THE PIPELINE FOR 2018


Hotel & Tourism Industry sector Mid-Fee Schools Remedial Schools

SEGMENT GROWTH


SEGMENT GROWTH

Capsicum Culinary Studio

868 students (End 2016)

100% Acquisition

Largest chef school of its kind in SA


Mid Fee Schools

• Growing market segment• Greenfield developments

• Founders Hill• Copperleaf• Mooikloof

• 100% acquisition• GIS• Kathstan

SEGMENT GROWTH


Remedial Schools

SEGMENT GROWTH

• Assisted learning• Learning difficulties

• Select period of time for students

• Pre-primary and preparatory;

• Gauteng, Northern suburbs• Opens 2018


GEOGRAPHIC GROWTH


GEOGRAPHIC GROWTH: SCHOOLS

Elkanah House

Oxbridge

Glenwood

House

Summit

Capsicum

WESTERN CAPE


GEOGRAPHIC GROWTH: TERTIARY

University of

Africa

AFRICA


GEOGRAPHIC GROWTH

Resourcing

AFRICA HR SOLUTIONSCA GLOBAL

Networks in 40+ countries

Payroll niche R160 milliongross revenue

$ based




Development



recognition

Growth> Organic and Acquisitive> Channel> Product> Segment> GeographicExcellence through

Specialisation> Niche market focus> Benchmarking> Database

development

RISK MANAGEMENT

REGU

LATI

ONS

TECH

NOLO

GY

ECONOMY

REPUTATION& STAFF


Africa





INNOVATIONGROUP

• Access• Value

Proposition• App-based

service delivery

Customer Experience

• Constant development and investment in systems and cloud based technologies

IT Systems

Shared Services

Consistent development of our product offering

Product Development

I T S Y S T E M S

P R O D U C T D E V E L O P M E N T

S H A R E DS E R V I C E S

C U S T O M E RE X P E R I E N C E

I N N O V A T I O N

• Streamlining service and knowledge sharing throughout the business


INNOVATION: SHARED SERVICESSTRATEGY ENABLER

International benchmarkHead Office costs as % of revenue

8-12%

Average 12%


INNOVATION: SHARED SERVICES

0

2

4

6

8

10

12

14

16

18

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

%

Year

H/O Costs as % of Rev

STRATEGY ENABLER


INNOVATION: SHARED SERVICESSTRATEGY ENABLER

Average 12%ADvTECH target to average 10%

Average 12%


INNOVATION

PRODUCT INNOVATION


PRODUCT INNOVATIONBACHELOR IN COMPUTER AND INFORMATION SCIENCE: GAME DESIGN




Development



recognition

Growth> Organic and Acquisitive> Channel> Product> Segment> GeographicExcellence through

Specialisation> Niche market focus> Benchmarking> Database

development

RISK MANAGEMENT

REGU

LATI

ONS

TECH

NOLO

GY

ECONOMY

REPUTATION& STAFF


Africa





CUSTOMER FOCUS

1 2

EASYTO-DO

BUSINESS WITH US

UNDERSTANDING NEEDS


CUSTOMER FOCUS

MOSAIC APP• Courses and modules• Communication | Lecturers/Students• Collaboration | Students• E-mails• Online library• Ordering and delivery of books• IIE Marque | Qualification verification +

student academic portfolio• Calendars and rosters• Brand news feeds


CUSTOMER FOCUS

1 Platform

LMS

Cost saving efficiency

Personalised information

Unique branding

Safe & secure

Enhanced student

experience



Innovation > Business process> product/market

development

Africa

Customer focus> Easy to do business with


Academicexcellence> Teaching & learning> Benchmarking our

performance> Learning analytics> International & employer

recognition

Growth> Organic and acquisitive> Channel> Product> Segment> Geographic

Excellence through specialisation> Niche market focus> Benchmarking> Database

development

RISK MANAGEMENT

REG

ULA

TIO

NS

TEC

HN

OLO

GY

ECONOMY

REPU

TATION

& STAFF

BEE

Human &capitalproductivity


HUMAN CAPITAL PRODUCTIVITY

HUMAN CAPITALPRODUCTIVITY


HUMAN AND CAPITAL PRODUCTIVITY

Management&

LeadershipDevelopment

Deloitte Best

Company to Work For:

from silver to gold

Top Employer:improved

score from 66% to 74%

91% OHS score

PROVIDING A PRODUCTIVE WORKING ENVIRONMENT


HUMAN CAPITAL PRODUCTIVITY

Head Office - GoldTertiary - SilverSchools - GoldResourcing - Platinum

ATTRACT

Deloitte Survey

RETAIN

Top Employer

BEST EMPLOYEES

Certified for the 2nd

consecutiveyear

RETAINING TALENT


PROSPECTS


PROSPECTS

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2014 2015 2016 2017 2018 2019 2020

R’m

Axis Title

Schools Projected Revenue1

TARGET: SCHOOLS DIVISION2020

R3bn

revenue


PROSPECTS

0

500

1000

1500

2000

2500

2014 2015 2016 2017 2018 2019 2020

R’m

Axis Title

Tertiary projected revenue1

TARGET: TERTIARY DIVISION

2020

R2.2bnrevenue


PROSPECTS

30 190

33 654

47 209

53 337

60 176

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2013 2014 2015 2016 2017

ADvTECH Total Full-Time Enrolments Feb

Dis

tan

ce

21 000


PROSPECTSGROUP REVENUE

6% of revenue

generated outside

SA’s borders


PROSPECTSTARGET: REVENUE

30%revenue

2020


PROSPECTSTARGET: NEPS

100 cps (NEPS)

Stretch target2018


PROSPECTSADVTECH = GOOD INVESTMENT

Strong performance

Good growth opportunities

Return on investment ahead of cost of capital

Cash generation

Clear focus on academic excellence


PROSPECTSADVTECH SHARE PRICE


PROSPECTSDIVIDEND

• Significant investments in pipeline

• Recent fundraising activities

• Retaining cash to support capex pipeline and investments

• Above inflation in dividend

32.5c

DIVIDENDS PER SHARE


QUESTIONS

THANK YOU

annual financial results 2016 · 2016. page 39. academic excellence. 08. 6 distinctions. 8...

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