INTERIM RESULTS PRESENTATION for the six months ended 31 December 2017 ADAPT IT INTERIM RESULTS PRESENTATION 2017
BUSINESS OVERVIEW 1 ADAPT IT INTERIM RESULTS PRESENTATION 2017
ABOUT ADAPT IT VISION Education | Manufacturing | Financial Services | Energy | Hospitality To be the leading provider of specialised software 1 000 employees 10 000 customers PURPOSE 40 countries in Africa and the rest of the world Level 3 B-BBEE contributor Growing our people and solutions - enabling our clients JSE listed ADI Software and Services Provider to achieve more 2 ADAPT IT INTERIM RESULTS PRESENTATION 2017
10 YEARS OF GROWTH OCT 2007 OCT 2008 AUG 2009 OCT 2012 NOV 2013 SEPT 2014 OCT 2015 JUL 2017 NOV 2017 InfoWave merges Adapt IT, Education The Swicon360 Energy sector Added Financial Services Micros South The with Adapt IT specialising in specialisation acquisition extends entry through the Telecommunications Sector is entered Africa, a leader in Telecommunications creating a manufacturing through the acquisition the manufacturing Aquilon intelligence through the Hospitality division expands software business software, moves of Integrated Tertiary offering with SAP acquisition management software acquisition of CQS Software , is footprint in Australia, to the main board Software (ITS) — a Human Capital expands Adapt IT through the acquired by Mauritius and the rest of the JSE leader in tertiary Management into Africa’s AspiviaUnison Adapt IT of Africa through the education ERP systems Business Process growing energy acquisition acquisition of LGR - expanding the Outsourcing sector, serving CP’s to be fulfilled company into Europe major oil and Australasia companies MILESTONES 2014 2017 2017 2020 5 th fastest growing African 2 nd in the Sunday Times Top R1 billion annualised R3 billion annualised Tech Company turnover 100 companies turnover target 3 ADAPT IT INTERIM RESULTS PRESENTATION 2017
DIRECTORATE SIBUSISO BONGIWE CATHERINE OLIVER TIFFANY NOMBALI CRAIG SHABALALA CHAMBERS NTULI KOFFMAN FORTUIN DUNSDON MBAMBO BCom MBA CA (SA) CA (SA) CFA, PDM, BCom CA (SA) BA, LLB, LLM Chief Chief Independent Independent Independent Commercial Independent Executive Officer Director Financial Officer Non-Executive Non-Executive Non-Executive Non-Executive Director Director Chairman Director Appointed Appointed Appointed Appointed Appointed Appointed Appointed 5 December 2007 18 August 2016 27 May 2008 9 February 2015 8 February 2013 18 April 2002 3 May 2011 4 ADAPT IT INTERIM RESULTS PRESENTATION 2017
SECTOR FOCUS MANUFACTURING FINANCIAL EDUCATION ENERGY HOSPITALITY SERVICES 5 ADAPT IT INTERIM RESULTS PRESENTATION 2017
MANUFACTURING FINANCIAL SERVICES MANUFACTURING FINANCIAL SERVICES • Over 21 years experience • Software solutions for manufacturing, agri-processing, • Trusted advisors to South Africa’s leading banks and resources and utilities sectors • More than 22 years experience servicing over 120 clients in institutions • 200 employees 27 countries • Providing solutions for large scale procurement; inventory • Over 2 600 customers spanning Audit , Risk Management management; control payment of cane growers; to solutions and Corporate Performance Management managing the safety of nuclear power plant refueling shutdowns CUSTOMERS CUSTOMERS 6 ADAPT IT INTERIM RESULTS PRESENTATION 2017
EDUCATION ENERGY EDUCATION ENERGY • Operating in the education sector for over 31 years • Serving Oil and Gas and Utilities sectors globally for more • Currently serving over 200 higher and further education than 18 years • 32 customers in 26 countries institutions • Intimate understanding of complex education environment • Thought Leaders and innovators in Supply Chain , SAP TM , • Global reach with presence in the Europe , Australasia , and Terminal Automation Systems , Enterprise Asset the rest of Africa Management and System Integration CUSTOMERS CUSTOMERS 7 ADAPT IT INTERIM RESULTS PRESENTATION 2017
TELECOMMUNICATIONS MANAGEMENT SERVICE PROVIDER SOLUTIONS EXPENSE MANAGEMENT • 17 years experience in corporate and telecommunications • Specialised focus on large enterprise Telecommunications management Expense Management (TEM) • Specialised focus on Carrier Networks and other Service • 30 years experience • Local Support and Application Development Providers • Implemented by 4 out of 5 tier 1 Service Providers in Southern • Rich Intellectual Property • Present in Financial Services , Manufacturing Health , Energy Africa • Local Application Development and rich IP and Public Sector • Expanding to the rest of Africa • Ready to use platform CUSTOMERS CUSTOMERS 8 ADAPT IT INTERIM RESULTS PRESENTATION 2017
HOSPITALITY HOSPITALITY • Positions Adapt IT as a leader in the hospitality, retail, and food and beverage industries • Over 20 years experience , 360 employees • Specialising in the resale, support, and deployment of Oracle Hospitality software and hardware products • Hospitality management software market expected to grow at a compound annual growth rate of 6.14% until 2020 CUSTOMERS 9 ADAPT IT INTERIM RESULTS PRESENTATION 2017
TELECOMMUNICATIONS ACQUISITION BACKGROUND KEY ATTRIBUTES • Acquisition of the LGR Group effective 1 July 2017 • Strengthened telecommunications industry expertise • Specialist solutions provider to the global • Specialised software analytics products • telecommunications industry New foreign customers, extending footprint into the • Over 18 years experience, operating in 10 countries global telecommunications industry with 36 employees • Will be integrated with Service Provider Solutions business unit to provide additional value to the Mobile Carrier Network segment SOLUTIONS CUSTOMERS • CDRlive V4 • CDRlive RapidReport • CDRlive COMPANA • CDRlive Tarifflive • Everywhere • StarCare 10 ADAPT IT INTERIM RESULTS PRESENTATION 2017
TRANSFORMATION LEVEL 3 B-BBEE CONTRIBUTOR TARGET SCORECARD 2017 SCORE Ownership 21.07 25 Management and Control 14.66 23 Skills Development 17.20 20 Enterprise and Supplier Development 48.28 50 Socio-Economic Development 12.00 12 OVERALL SCORE 113.21 130 11 ADAPT IT INTERIM RESULTS PRESENTATION 2017
FINANCIAL HIGHLIGHTS 12 ADAPT IT INTERIM RESULTS PRESENTATION 2017
INTERIM RESULTS | 31 DECEMBER 2017 FINANCIAL HIGHLIGHTS 46% 29% 22% 11% TURNOVER EBITDA HEPS NORMALISED HEPS 13 ADAPT IT INTERIM RESULTS PRESENTATION 2017
5 YEAR REVIEW TURNOVER (R’m) EBITDA (R’m) TURNOVER EBITDA 140 800 674 116 46% 29% 700 120 600 ORGANIC EBITDA 100 90 TURNOVER MARGIN 461 GROWTH * 500 80 17% 17% 62 400 310 60 ACQUISITIVE EBITDA CAGR 261 300 42 TURNOVER GROWTH 190 40 200 35% 23 38% 20 100 TURNOVER CAGR 0 0 29% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 * From ongoing operations 14 ADAPT IT INTERIM RESULTS PRESENTATION 2017
5 YEAR REVIEW HEPS (cents) NORMALISED HEPS (cents) HEPS NORMALISED 45 HEPS 35 38.73 29.70 40 22% 11% 30 34.74 35 24.41 23.96 HEPS CAGR NORMALISED 28.89 25 HEPS CAGR 30 20 25 17% 23% 21.38 16.82 20 13.74 15 13.74 15 10 10 5 5 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 15 ADAPT IT INTERIM RESULTS PRESENTATION 2017
ABRIDGED CONSOLIDATED STATEMENTS COMPREHENSIVE INCOME Unaudited 6 Unaudited 6 Audited year months ended months ended ended 30 June Period-on- 31 Dec 2017 31 Dec 2016 2017 period change R’000 R’000 R’000 % Turnover 673 559 460 691 993 671 46 EBITDA 116 052 89 869 194 326 29 Depreciation and amortisation (13 105) (6 892) (14 238) 90 Amortisation of intangible assets acquired (16 815) (13 501) (29 105) 25 Profit from operations 86 132 69 476 150 983 24 Net finance cost (11 078) (12 998) (22 851) (15) Share of profits of equity accounted investment after tax - 829 (88) (100) Profit before taxation 75 054 57 307 128 044 31 Income tax expense (26 119) (20 251) (35 498) 29 Profit for the year 48 935 37 056 92 546 32 Headline earnings 47 369 35 515 88 149 33 Amortisation of intangible assets acquired net of deferred tax 12 107 9 721 20 956 25 Fair value adjustment to financial liability (imputed interest) 2 298 5 299 9 356 (57) Normalised headline earnings 61 774 50 535 118 461 22 Weighted average number of ordinary shared in issue 159 509 145 476 150 028 10 HEPS (cents) 29,70 24,41 58,76 22 Normalised HEPS (cents) 38,73 34,74 78,96 11 16 ADAPT IT INTERIM RESULTS PRESENTATION 2017
ABRIDGED CONSOLIDATED STATEMENTS FINANCIAL POSITION Unaudited 6 Unaudited 6 months months Audited year ended 31 Dec ended 31 Dec ended 30 2017 2016 June 2017 R’000 R’000 R’000 Non-current assets 926 724 773 367 730 781 Current assets 508 144 377 959 355 666 Total assets 1 434 868 1 151 326 1 086 447 Total equity 708 053 608 289 668 537 Non-current liabilities 305 289 253 145 193 178 Current liabilities 421 526 289 892 224 732 Total equity and liabilities 1 434 868 1 151 326 1 086 447 Gearing ratio 40% 26% 15% 17 ADAPT IT INTERIM RESULTS PRESENTATION 2017
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