ANNUAL FINANCIAL RESULTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER - - PowerPoint PPT Presentation

ANNUAL FINANCIAL RESULTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019

1

CONTENTS

01

FINANCIAL OVERVIEW

05

RESOURCING DIVISION

02

COVID-19

06

CORPORATE RESPONSIBILITY

03

SCHOOLS DIVISION

07

INVESTMENT

04

TERTIARY DIVISION

ECONOMY

Source: STATSSA, IMF, FNB, BER

TOUGH ENVIRONMENT DUE TO POOR GROWTH, POWER OUTAGES AND COVID-19

COVID-19 uncertainty

GDP growth 0.2%

in 2019 IMF forecasts

0.8%

GDP growth in 2020 Emigration

Job losses

high and growing

29.1%

Historical poor GDP

growth

• f 0.8%

last 5 years

Load shedding

negative economic impact

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

3

Business confidence

lowest in

21 years

HEPS REVENUE NEPS STUDENT ENROLMENTS

GOOD RESULTS

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

4

SNAPSHOT

20%

PROFIT FOR THE YEAR

8% 18% 16% 10% 8%

OPERATING PROFIT

OVERVIEW

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

5

OPERATIONAL HIGHLIGHTS

• Schools division records strong growth in rest of Africa and a significant increase in presence

in mid-fee sector

• Encouraging 5% organic growth in 2020 Schools division enrolments
• Continued excellent performance in Tertiary division
• Tertiary division enrolments increased by 13% for 2020
• Total student enrolment increased by 10% for 2020
• Good progress on our initiatives driving effectiveness, efficiencies and brand value proposition
• Resourcing impacted by tough economic environment – solid performance under circumstances

COVID-19

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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IMMEDIATE RESPONSE

• Safety and wellbeing of all our staff and students is our first priority
• School & Tertiary closure from 18 March 2020 per government guidance
• Follow and implement the World Health Organisation and NICD protocols and advice
• Continuation of quality teaching and learning will remain paramount
• Leveraging online learning tools and systems previously implemented to support our

teaching and learning strategies

• Comprehensive communication undertaken

COVID-19

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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PREPARATION

• Established an Incident Support Team
• All schools will go onto a modified four-term calendar
• Leveraging technologies for online learning (e.g. MS Teams, IIE Learn)
• Established educational delivery systems testing done and guidelines widely

distributed

• Ongoing process keeping stakeholders informed through online means

COVID-19

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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RESPONSES TO DATE

COVID-19

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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RESPONSES TO DATE

COVID-19

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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IMPACT & RISK

• Board has delayed decision on the dividend declaration
• Capex plans reconsidered
• Expect some cost and revenue impact which will be determined by the tenure of closures

MARKET TRENDS IN THE SCHOOLS SECTOR

EDUCATION SECTOR

26 789 971 23 289 1 865 Public Schools Private Schools 11 647 172 256 283 12 230 194 589 348 Public Schools Private Schools

Source: Centre for Risk Analysis, Socio-Economic Survey of South Africa 2020

Number of schools Number of scholars

2000

5% 130% 92% 13%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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2018

SCHOOL LEAVER MARKET

334 718 168 388 442 672 193 282

50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 450 000 500 000 2009 2010 2016 2017 Qualifying school leavers First year enrolments (Public)

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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32% 15%

MARKET TRENDS IN THE TERTIARY SECTOR

EDUCATION SECTOR

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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938 000 103 000 1 036 984 185 046

200 000 400 000 600 000 800 000 1 000 000 1 200 000 Public Universities Private Higher Education 2011 2017

80% 11%

24 199 26 713 27 408 30 827 32 370 29 138 33 463 36 136 39 629 44 975 2016 2017 2018 2019 2020 Schools Tertiary: Full Qualifications

ENROLMENT NUMBERS

STRONG ENROLMENT GROWTH IN 2020

10%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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13% 5% Tertiary School 10%

FINANCIAL OVERVIEW

02

CONSISTENT GROWTH

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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Group revenue (R’m) Operating profit (R’m)

CAGR 2 594 3 224 3 938 4 389 5 108 15 16 17 18 19

18%

454 560 668 808 869 15 16 17 18 19

18%

17,5% 17,4% 17,0% 18,4% 17,0% 18,8% 20,5% 19,7% 21,4% 21,8% 15 16 17 18 19 Operating margin (Group) Operating margin (excl IIE MSA, CIS, Makini & Resourcing)

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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OPERATING MARGIN COMPARISON

EXCLUDING IIE MSA, CIS, MAKINI AND RESOURCING

HEPS & NEPS

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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Headline earnings per share (cents) Normalised earnings per share (cents)

CAGR 53,9 63,3 75,3 79,0 85,2 15 16 17 18 19

12%

51,0 71,1 68,8 71,4 86,0 15 16 17 18 19

14%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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CASH FLOW GENERATION

558 738 806 1083 1192 223 291 394 426 455 15 16 17 18 19 Cash generated by operations Cash inflow from operating activities

21% R’m

BALANCE SHEET REMAINS SOUND

• Disciplined approach to capital

allocation

• Capital expenditure – slow down:
• following extensive expansion

programme

• focus on maximising ROI
• lower CAPEX in 2020
• Debtors
• well managed
• increased emphasis on collections
• Borrowings well within covenants
• Banks 3.5x
• Internal 3.0x

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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CASH VS NET BORROWINGS POSITION

558 738 806 1 083 1 192

• 1 157
• 1 110
• 1 671
• 1 915
• 2 554

2015 2016 2017 2018 2019 R’m

Cash generated by

• perations

Net borrowings position

21%

Ratio = Net Borrowing : Cash generation

2.1 1.5 2.0 1.8 2.1

CAGR

25,0 165,5 18,1 20,5 278,7 172,9 320,0 1 site acquisition 3 new school campuses constructed 2 new tertiary sites Student management systems Additions to existing sites Furniture, fittings, IT and vehicles Acquisition

• f IIE MSA

R’m

Capex Projects

680.7 1 000.7

CAPEX AND ACQUISITIONS

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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SCHOOL DIVISION

EXCELLENT GROWTH CAPACITY

24,2 26,7 27,4 30,8 32,4 28,6 31,2 33,0 38,2 41,2

16 17 18 19 20

‘000

Students enrolled Existing building capacity % Existing building capacity utilised

85% 86% 83% 79%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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81%

43% 0% 51% 5%

2018

41%

• 2%

57% 3%

2019

43% 3% 39% 15%

2018

40% 4% 42% 14%

2019

Segmental revenue contribution Segmental operating profit contribution

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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SEGMENTAL OVERVIEW

Schools - South Africa Schools – Africa Tertiary Resourcing

SCHOOLS DIVISION

03

25

SCHOOL DIVISION

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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INITIATIVES

Sharpening the focus on our brand positioning & improve customer value Improved operational effectiveness and efficiencies All sales/marketing/customer facing staff received customer service, sales and lead generation and lead conversion training Significant expansion past 5 years – student numbers increased 128% Increased presence in the mid-fee sector, new campuses exceeding target enrolment numbers

Organic enrolment growth of

5% for 2020,

despite continued consumer financial pressure and high levels of emigration

SCHOOL DIVISION

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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INITIATIVES

1 350 1 545 1 742 2 009 2 226 15 16 17 18 19

R’m

13%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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SCHOOLS REVENUE

CAGR

SA SCHOOLS

1 309 1 491 1 685 1 877 2 022 15 16 17 18 19

11%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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SA schools revenue (R’m) SA schools operating profit (R’m)

CAGR 286 324 315 349 358 15 16 17 18 19

6%

57 131 204 12 4

• 13

17 18 19

R’m

Revenue: Africa schools EBIT: Africa schools

89%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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Africa schools revenue and EBIT (R’m)

AFRICA REVENUE AND EBIT

CAGR

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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REVENUE

SA SCHOOLS AND REST OF AFRICA

1 309 1 491 1 685 1 877 2 022 41 54 57 131 204

15 16 17 18 19 South Africa Rest of Africa

1 950 1 965 5 379 5 977 17 18 19 20

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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AFRICA SCHOOLS

ENROLMENTS

REST OF AFRICA

Revenue up by 55% Crawford International School, Kenya will move out of the J-curve in 2020, a mere 15 months after opening its doors. Currently have 419 students Makini Schools up 12% enrolment growth

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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TRINITYHOUSE GLENVISTA

Premium positioning Pre-Primary, Primary, High Currently grades 000 - 9

Exceeded enrolment target by

99%

Anticipated to avoid J-curve and be profitable first year of operation

NEW SCHOOLS - 2020

34

PINNACLE COLLEGE LINDEN

Mid-fee positioning Pre-Primary, Primary, High Currently grades 0 to 8

Exceeded enrolment target by

80%

.

PINNACLE COLLEGE WATERFALL

Mid-fee positioning Pre-Primary, Primary, High Currently grades 000 to 8

Exceeded enrolment target by

25%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

MERGED

• Abbotts Century Gate with Abbotts Claremont effective 2020

REBRANDED MARAGON RUIMSIG TO CRAWFORD INTERNATIONAL RUIMSIG MARAGON

• Very well received
• Enrolment exceeded expectations

MERGED

• Junior Colleges Sandton, Junior Colleges Tiny Town and Crawford Village merged into Crawford

International Bryanston

REPOSITIONED PINNACLE COLLEGE KYALAMI & RYNFIELD AS MID-FEE

• Exceeded enrolment targets
• Investment in facilities
• Clear value proposition

REPOSITIONED SCHOOLS

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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• GSS managed debtors book debt to revenue ratio improved from 5.6% in 2018 to 4.6% in 2019
• Accounts payable
• Consolidating of vendors reduced payment volumes by 28%
• Improved processes lead to a 75% increase in productivity
• Consolidation of finance systems by
• Standardising the chart of accounts, collapsing trial balances and migrating to one database
• Reduced complexity and volume of work
• Enables the reduction in number of bank accounts
• Enabling technologies deployed to improve process efficiencies in billing

(debit orders, school fee collections)

SCHOOL DIVISION

INNITIATIVES TO IMPROVE OPERATIONAL EFFICIENCIES AND EFFECTIVENESS

Group Shared Services:

36

• All sales/marketing/customer

facing staff received customer service, sales and lead conversion training

• Conducted mystery call

campaign to test customer service improvement once a month

• Increased emphasis on lead

generation

• Utilising artificial intelligence &

machine learning to optimise digital advertising and maximise ROI and lead quality

• Integrated digital marketing

intelligence dashboards built to measure, analyse and further guide digital marketing decisions

MARKETING AND STUDENT ENROLMENT PROCESS

Sales training: Digital marketing successes:

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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• STASY leads up 623% YoY
• Cost per lead down 69%
• 224 500 unique website visits,

up 295%

Measures of improvement:

• Greenfield developments
• Repositioning
• Acquisitions
• 29 Schools
• 12 Campuses
• 5 598 Students
• Botswana – GIS
• Kenya – Crawford

International & Makini

• 13 Schools
• 7 Campuses
• 5 977 Students
• Operational efficiencies
• Rationalisation
• Integration
• 67 Schools
• 36 Campuses
• 20 795 Students

SCHOOL DIVISION

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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GROWING MID FEE PRESENCE PREMIUM SCHOOLS GROWING MID-FEE SCHOOLS REST OF AFRICA

• 1 582 matric candidates
• 2 910 distinctions
• 100% pass rate for IEB students
• 96% IEB students achieved a bachelor pass
• IEB students averaged 2.2 distinctions per student
• As a group the bachelor pass rate increased from 81% to 89% in last 4 years

SCHOOL DIVISION

ACADEMIC EXCELLENCE

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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FUTURE FOCUSED EDUCATION

IEB, DBE, ISASA, EYFS, Cambridge, International Baccalaureate Future-focused teaching and learning Challenging and engaging curriculum Performance analysis = personalised learning Computational thinking and coding Computer networks and productivity

New age technology spaces

for collaborative problem- based learning Understanding sustainable global goals and taking action International mindedness Embracing diversity

ACADEMIC EXCELLENCE

EVERY STUDENT IS DEVELOPING INCREMENTALLY, IN AN ENGAGING, INSPIRING AND CHALLENGING LEARNING ENVIRONMENT.

CURRICULUM GLOBAL COMPETENCIES DIGITAL LITERACY GLOBAL CITIZENSHIP

Inquiring Interpreting Presenting Personal integration Communicating with others Collaboration Leadership Personal behaviour Organisational skills Self reflection Growth mindset

RESEARCHING COMMUNICATING SOCIAL SKILLS SELF-MANAGEMENT

Critical Creative Reflective

THINKING

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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• Reduced capex in the year ahead
• No new schools planned for 2021 opening
• Additional capacity on recently opened sites

SCHOOLS FUTURE CAPEX

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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TERTIARY DIVISION

04

42

• Revenue increased 25%
• Good enrolment growth 13% in 2020
• Growing reputation for providing a quality offering & work ready graduates
• Our graduate and alumni successes which are recognised throughout industry
• Clear brand positioning
• Efficient and effective operational delivery

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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TERTIARY DIVISION

CONTINUED EXCELLENT PERFORMANCE

• IIE is SA’s leading “private university”
• Central academic body; 15-year track record of Academic leadership
• 33 Campuses
• Division has 197 accredited courses from undergraduate programmes

to Masters degrees

• Multi-channel modes of delivery Contact: full-time or part time, distance (online)

and blended learning

• Almost 45 000 full qualification students
• Benchmark against highest local and international standards

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

TERTIARY DIVISION

TERTIARY DIVISION OVERVIEW

954 1 228 1 556 1 719 2 145 15 16 17 18 19

22%

135 223 321 415 496 15 16 17 18 19

38%

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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Tertiary revenue (R’m) Tertiary operating profit (R’m)

CAGR

14,1% 18,2% 20,7% 24,1% 23,1%

2,2%

15 16 17 18 19

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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IIE MSA restructure & integration

25.3%

Tertiary operating margin

• High Court rules in favour of IIE Varsity College law degree
• Positive precedent to address the issue of ‘private university’ / private higher

education institutions

• Confirms to professional bodies in all fields, including law, engineering,

accountancy, teaching, nursing and psychology that the same rules apply across the board, and that students and graduates from public and private universities and institutions must be treated equally

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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THE IIE TRENDSETTERS

RECOGNITION FOR OUR LLB QUALIFICATION

TERTIARY DIVISION

IIE’S SIX FACULTIES IIE Education

Faculty

• f

Commerce

Faculty

• f

Information & Communication Technology

Faculty

• f

Law

Faculty

• f

Social Sciences

Faculty

• f

Humanities

Faculty

• f

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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TERTIARY DIVISION

IIE GROWTH IN PROFESSIONAL QUALIFICATIONS

2017 2020 GROWTH Law 1 634 3 187 95% Education 1 783 5 919 232% Accounting 166 733 342% Engineering 97 IT 4 655 6 801 46% Total 8 238 16 737 103%

BCOM AND BEd PRICES COMPARED

TERTIARY DIVISION

R63 580 – R81 380 R73 338 R47 500 R47 248 R45 885 UCT Varsity College UP Stellenbosch University WITS

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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BCom BEd

R44 273 R42 688 R41 008 R34 175 R33 490 Stellenbosch University Varsity College UJ WITS Rosebank College

62 98 701 1479 2219 3457 14 15 16 17 18 19

56%

50% 58% 615%

111% ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

51

TERTIARY DIVISION

GROWTH IN IIE ONLINE DISTANCE STUDENTS

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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ROSEBANK COLLEGE

NEW CAMPUS

Port Elizabeth Campus ‒ Digitally enabled campus ‒ Opened in 2020 with 310 students ‒ Blended learning

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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ROSEBANK COLLEGE

NEW CAMPUS

Cape Town Campus ‒ Mega campus ‒ Opened in 2020 with 471 students

• The premium brand in the ADvTECH stable
• Increasing capacity to accommodate student growth

at Cape Town and Pretoria campuses

• Module pass rate of 87% testament of their excellence

in teaching and learning

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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VARSITY COLLEGE

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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VARSITY COLLEGE

INCREASE CAPACITY TO MEET DEMAND

Cape Town Campus

• Move to new premises in 2021

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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VARSITY COLLEGE

INCREASE CAPACITY TO MEET DEMAND

Pretoria Campus

• Expanding existing site

25 172

IIE graduates in the last 5 years

71%

were employed within 6 months after graduation

ACADEMIC EXCELLENCE

INTERNATIONAL AND EMPLOYER RECOGNITION

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

Vega ranked # 1 Tertiary Brand by the Loeries 2019 annual official rankings in Africa and Middle East

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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STRATEGIC IMPERATIVES

INTERNATIONAL AND EMPLOYER RECOGNITION

Top Talent 2 Gold 2 Silver 1 Bronze 2 students in the top 10 Black Pixel Award 4 Silver 1 New Blood Award Bronze 1 student in the top 10 2nd Place & Judges mention

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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STRATEGIC IMPERATIVES

INTERNATIONAL AND EMPLOYER RECOGNITION

Add an Avo to an on-trend meal Competition​ 1st Place​ Young Chef 2020 to represent SA at Global competition​ Winner – Chef Lecturer Reaching for Young Stars Young Star Chef

• f the Year​

Young Star Baker

• f the Year​

Top 3 Pastry Chefs​ EMEA Business Awards Market Associate of the Year Best Food and wine Pairing menu​ Winner Best Cocktail​ Young Star Beverage student 2nd place​

2020 / 2021:

• Varsity College Cape Town moving to new leased

premises

• Varsity College Pretoria expansion
• Rosebank Pretoria expansion

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

60

TERTIARY CAPEX

1

2017

4

2018

1

2019

2

2020

• University of Africa

(Acquisition)

• Private Hotel School

Rosebank

• Private Hotel School

(Acquisition)

• Rosebank College

Bloemfontein

• Rosebank College

Pietermaritzburg

• Rosebank College Durban

Mega Campus

• Rosebank College

Cape Town

• Rosebank College

Port Elizabeth

Campuses

• pened /

acquired

Capex required R300mn

RESOURCING DIVISION

05

61

• SA market – very tough
• Solid performance under circumstances
• Africa strategy to develop other markets and geographies now represents

approximately half of operating profit

• If rest of Africa investment not done Resourcing division profits would be 38% lower

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

RESOURCING DIVISION

IMPACT OF AFRICA INVESTMENTS

RESOURCING DIVISION

• Mauritius-based business
• Invested in additional services
• fferings – future growth
• Country payroll services
• Medical aid facilitation
• Visa applications
• Good revenue growth
• Highest levels of unemployment

in 15 years

• Declining business confidence

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

63

Africa countries South Africa market - decline

REMAINS HIGHLY CASH-GENERATIVE

RESOURCING DIVISION

100 200 300 400 500 600 700 800 2018 2019 5 10 15 20 25 30 35 40 45 2018 2019 Mauritius South Africa

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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Revenue EBIT

CORPORATE RESPONSIBILITY

06

OUR ESG FOCUS AREAS

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

66

OUR BUSINESS IS ABOUT PEOPLE DEVELOPMENT & EDUCATION

• Corporate governance focus

grounded on principles of King IV & Companies Act

• Board annually reviews our

strategy

• We revised our leadership

structures for optimum performance

• Developing a robust

Combined Assurance Framework

Governance impact

• Academic excellence: 100%

IEB Matric pass rate

• 25 172 IIE graduates in the last

5 years

• Graduate Empowerment

Programme:

• Placed 2 414 students in jobs
• 16 847 cumulative student

placements since 2013

• Awarded bursaries to the value
• f R194 mn
• CSI an integral part of our
• perations:
• 655 CSI projects allocated

Social impact

• Low energy and water efficient

campuses

• Planted 829 indigenous trees
• Protecting wetlands
• 105 environmental and animal

welfare projects

Environmental impact

INVESTMENT

07

67

Educational productivity Optimise organisational processes and structures Rest of Africa Growth in the rest of Africa Customer focus

• Easy to interface with
• Understand and respond

to needs

• Deliver end-to-end

service to our customers Academic excellence

• Teaching & learning
• Benchmarking performance
• Learning analytics
• International & employer

recognition Growth

• Organic and acquisitive
• Channel
• Product
• Segment
• Geographic

REGULA TIONS SOCIO-ECONOMIC ENVIRONMENT REPUT A TION TRANSFORMATION

Human capital productivity

• Talent management
• Productivity benchmark
• High performance culture

Capital productivity

• Return on investment
• Optimise cost structures

Innovation Data insights Risk mitigation Technology

Excellence through specialisation

• Market focus
• Benchmarking: industry

& salary

• Data driven insights

STRATEGIC IMPERATIVES

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

AFRICA INVESTMENT CASE

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

69

2050

Population will double to 2.4bn 40%

• f population

under 14 years 20%

• f population

are between 15 – 24 years 1.2bn will need education 66mn scholars in private education Urbanisation will be 50% 6mn households will earn between $5K - $20K

2021 2025 2030 2020

Source: Caerus Capital

• Academic excellence
• Tertiary offering:
• 6 faculties
• 197 accredited qualifications
• Portfolio of schools to meet a variety of demands
• Opportunity for internationalisation for our brands
• World class teaching and learning practices
• Sound investment in enabling technologies
• Central academic team: centralised and highly efficient leads to cost effective product

development and centralised quality control

• Multiple modes of delivery:
• Face to face; Online; Blended; Distance

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

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A CONTINENT LEADER IN PRIVATE EDUCATION

• Proven track record of profit growth
• Strong cash generation
• Large asset base underpin
• Diverse revenue streams
• Strong balance sheet
• Growing demand for high quality education in South Africa and the rest of Africa
• Tertiary division remains well positioned to continue to perform strongly
• School division rapidly improving
• Resourcing able to diversify revenue streams – rest of Africa growth

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

71

INVESTMENT THESIS

• Defer the dividend declaration in view of the highly uncertain economic outlook owing

to the impact of COVID-19

• Confident on navigating the business through the unpredictability of COVID-19
• Board will reconvene in May 2020, when impact of pandemic may be clearer
• In light of low share price, we will also consider a share buy-back in May

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

72

INVESTMENT

DIVIDEND AND SHARE BUYBACK CONSIDERATION

• Went through a phase of significant growth, we are now focusing on delivering returns
• n the investment
• Strong organic enrolment growth in 2020
• The restructuring and rationalisation of the Schools division – starting to deliver

benefits

• Continue to focus on initiatives to improve operational effectiveness and efficiencies
• Our resourcing division strategy to explore markets outside of South Africa – success
• COVID-19: We will continue with our academic programme, leveraging technology

for online learning

• Whilst we are well positioned, the rapidly developing COVID-19 broader impact

creates uncertainty. We will continue to be vigilant in monitoring the impact on our people and business

ANNUAL FINANCIAL RESULTS for the year ended 31 December 2019

73

PROSPECTS

WELL POSITIONED TO DELIVER A SOLID PERFORMANCE IN THE YEAR AHEAD

THANK YOU

74