Empowering the World of Education 2016 Report Ian Bowles, CEO & Mark Pickett, CFO 30 th March 2017 One team, One solution.
Overview § 2016 in Brief § Financial Report § Future Direction One team, One solution. 30 March 2017 Tribal 2016 Results 2
2016 Business Highlights Ian Bowles CEO One team, One solution. 30 March 2017 Tribal 2016 Results 3
Three Year Plan Create a solid foundation, and sound 2016 operational model Improve profitability, deliver new product 2017 strategy with new licensable modules Build on operational performance and 2018 deliver top-line growth One team, One solution. 30 March 2017 Tribal 2016 Results 4
Financial Results – at Glance Revenue Adjusted operating profit * Net Cash (before share based payments) £90.3m £4.7m £8.8m 2015 Debt £(32.5)m 2015 £2.5m 2015 £106.7m down 15% up 88% up 127% Significantly improved performance despite the planned revenue decline * Adjusted operating profit is in respect of continuing operations and is stated excluding “Other Items” charges of £4.6m (2015: £47.8m). Other Items include Share-based Payments, Deferred Contingent Consideration, Amortisation of IFRS3 Intangibles, Profit on sale of Synergy, and Restructuring and associated costs One team, One solution. 30 March 2017 Tribal 2016 Results 5
FY16 Objectives Restore confidence in the team, customers and 1 investors Create a new single operating model supported by: 2 – Creation of a coherent single go to market strategy – Create cohesive Company & Solutions message 3 Reduce operating costs 4 Drive operational efficiencies One team, One solution. 30 March 2017 Tribal 2016 Results 6
FY16 Delivered £ Embedded Positive Delivered Defined £9m new clear customer annualised operating strategic engagement model cost savings direction One team, One solution. 30 March 2017 Tribal 2016 Results 7
Key Wins Schools & Further/Vocational Employers & Higher Education Education Training Providers Government Bodies University of the Arts Hillingdon Adult Gateshead Council Muskegon City Public London, UK Education, UK Learning & Skills, UK Schools, US Universiti Teknologi Auckland Institute of John Lewis, UK American Promise Petronas, Malaysia Studies, NZ Schools, US Boots, UK University of Bristol, UK Nelson Marlborough NHS Tavistock & Wolseley UK Ltd (renewal) Institute of Portman Foundation University of Wales, Technology, NZ Trust, UK Trinity Saint David, UK Intueri Group, NZ Skills Funding Agency, World Maritime UK University, Sweden Ministry of Education, Massey University, NZ NZ University of Waikato, NZ Carleton University, Canada One team, One solution. 30 March 2017 Tribal 2016 Results 8
Financial Report Mark Pickett CFO One team, One solution. 30 March 2017 Tribal 2016 Results 9
CFO Summary Revenue Net Cash Adjusted Operating Profit* (before share based payments) £90.3m £4.7m £8.8m 2016 £90.3m 2016 £8.8m 2016 £4.7m 2015 Net Debt £(32.5)m 2015 £106.7m 2015 £2.5m down 15% up 88% up 127% § Sound financial footing: £8.8m Net Cash, no long-term borrowings, and new Product Development funded § Mitigated effect of expected fall in revenue from one-off items § Costs savings achieved of £5.8m in year (annualised £9.0m) § Adjusted operating profit up 88% (margin % up 126%), despite fewer development costs capitalised § Backlog of year-end committed income 69% of 2017 consensus * Adjusted operating profit is in respect of continuing operations and is stated excluding “Other Items” charges of £4.6m (2015: £47.8m). Other Items include Share-based Payments, Deferred Contingent Consideration, Amortisation of IFRS3 Intangibles, Profit on sale of Synergy, and Restructuring and associated costs One team, One solution. 30 March 2017 Tribal 2016 Results 10
Consolidated Income Statement 2016 2015 £m £m Revenue 90.3 106.7 Gross profit margin 43% 36% Adjusted operating profit 4.7 2.5 Adjusted operating profit margin 5.2% 2.4% Other Items (4.6) (47.8) Statutory operating profit 0.1 (45.2) Finance costs (1.0) (2.1) Statutory loss before tax (0.9) (47.3) Income tax (charge)/credit (0.3) 1.9 Statutory loss after tax* (1.2) (45.4) * From continuing operations - 2015 had £80k loss from discontinued operations One team, One solution. 30 March 2017 Tribal 2016 Results 11
Financial Key Points Revenue Adjusted operating profit Statutory loss £90.3m £4.7m £(1.2)m 2015 £106.7m 2015 £2.5m 2015 £(45.4m) down 15% up 88% improved 97% Annually recurring revenue Adjusted operating margin Statutory loss per share £32.4m 5.2% (0.7)p 2015 £30.3m 2015 2.3% 2015 (48.2)p up 7% up 126% improved 98% Net cash Sales Order Backlog Net cash from operating activities £8.3m £8.8m £113. 8 m 2015 £(6.2)m 2015 £(32.5)m 2015 £121. 3 m up 127% down 6% up 234% One team, One solution. 30 March 2017 Tribal 2016 Results 12
Revenue Bridge from 2015 to 2016 110.0 £106.7m £(8.4)m 100.0 £(4.7)m £(4.1)m £3.0m 90.0 £(1.3)m £90.3m £(1.0)m 80.0 One-off revenue reductions Revenue changes by segment • • Ofsted Schools expiry Student Management Systems (SMS) • 70.0 Synergy disposal • QAS • SLS/Careers Advice • non-core business closures i-graduate 60.0 50.0 Revenue Revenue Ofsted Synergy SLS/CA SMS QAS i-graduate 2015 Schools Disposal Closure 2016 One team, One solution. 30 March 2017 Tribal 2016 Results 13
Adjusted EBITDA Bridge from 2015 to 2016 £m 8.0 £3.4m £7.9m £7.4m £(3.4m) Underlying 2016 2015 Dev 6.0 Improvement 2015 EBITDA Costs excl EBITDA (Adj) SchoolEdge (Adj) FX impact 4.0 £(3.4m) £5.8m 2015 EBITDA(A) with Dev Costs Ofsted InYear Expensed (excluding Schools Cost 2.0 SchoolEdge) is Contract Savings £4.0m £(2.4m) 0.0 Synergy SLS (2.0) a One team, One solution. 30 March 2017 Tribal 2016 Results 14
Segmentation: All Businesses § Original adjusted operating profit Adjusted Adjusted is consistent with treatment of operating profit operating profit overhead costs in prior years Revenue £m (original) £m (revised) £m § 2016 2015 2016 2015 2016 Adjusted Operating Profit (revised) includes all overhead Student Management costs directly attributable to the Systems 61.0 62.7 4.7 3.2 12.0 segment i-graduate 8.5 13.6 0.9 0.2 1.0 § Central Group costs include all Quality Assurance Solutions 20.7 30.4 2.5 2.9 6.5 indirect overhead costs not Total Lines of Business 90.3 106.7 8.2 6.3 19.6 directly attributable to a Central / Group costs - - (3.5) (3.8) (14.9) segment, including Board costs, Finance, HR, Legal, Total Group 90.3 106.7 4.7 2.5 4.7 Marketing and IT One team, One solution. 30 March 2017 Tribal 2016 Results 15
Student Management Systems Revenue £m 2016 2015 Licence and development 10.8 14.1 Revenue £m Implementation 12.4 12.5 2016 2015 Maintenance fees 32.4 30.3 Higher Education 28.8 28.6 Other 5.3 5.8 Further Education 16.2 18.7 Total 61.0 62.7 Schools 16.0 15.5 Total 61.0 62.7 Adjusted Operating Profit (£m) 4.7 3.2 UK 47% 57% Adjusted Operating Profit Margin 7.7% 5.0% International 53% 43% Capitalised Product Development Expenditure (£m) 1.1 4.1 Total 100% 100% One team, One solution. 30 March 2017 Tribal 2016 Results 16
Other Items 2016 2015 £m £m Share-based payment charges/(credit) 1.0 (0.4) In 2016, share-based payments are Profit on sale of Synergy (0.3) - included in Other Items, and 2015 is Restructuring 1.9 0.5 restated IFRS3 amortisation 1.9 1.7 Share-based payments in 2017 and Impairment charges - 46.8 2018 are currently expected to be Acquisition related cost/(credits) 0.3 (1.2) around £1.3m Other (0.2) 0.4 Other Items (excluded from Adjusted Operating Profit) 4.6 47.8 Finance costs 0.4 1.0 Tax credit on other items (0.6) (2.5) Total Other Items (excluded from Statutory Loss) 4.4 46.3 One team, One solution. 30 March 2017 Tribal 2016 Results 17
Cashflow 2016 2015 Net cash £m £m £8.8m Operating cashflow 8.3 (6.2) 2015 £(32.5)m Up 127% Proceeds of Synergy disposal 19.4 - Acquisition/disposal related costs (3.9) (4.5) Operating Cashflow Capital expenditure (2.4) (6.8) £8.3m Finance and other costs (0.5) (1.0) 2015 £(6.2)m Up 234% Net proceeds of Rights issue 20.0 - Loan (repayment)/draw down (34.5) 12.9 Cash conversion Dividends - (1.8) 115% FX movements 0.7 (0.2) 2015 (442)% Up 126% Cash in Ca increase/(decrease) 7. 7.1 1 (7.6) Free Cash Clo Closin ing cash 8.8 8. 8 1.7 1. 7 £6.0m Loan drawn down - (34.2) 2015 £(13.0)m Net cash/(debt) 8.8 (32.5) Up 146% One team, One solution. 30 March 2017 Tribal 2016 Results 18
Future Direction Ian Bowles CEO One team, One solution. 30 March 2017 Tribal 2016 Results 19
Our Goal World-class software & services company International market leading educational management solutions provider Valued by – Customers – Staff – Shareholders One team, One solution. 30 March 2017 Tribal 2016 Results 20
Vision & Mission to empower the world of education to provide the expertise, software and services required by education and business organisations worldwide to underpin student success One team, One solution. 30 March 2017 Tribal 2016 Results 21
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