2018 Achieve more. BUSINESS OVERVIEW 1 Achieve more. ABOUT ADAPT - - PowerPoint PPT Presentation

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2018 Achieve more. BUSINESS OVERVIEW 1 Achieve more. ABOUT ADAPT - - PowerPoint PPT Presentation

May 18, 2023 205 likes •538 views

ANNUAL RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2018 Achieve more. BUSINESS OVERVIEW 1 Achieve more. ABOUT ADAPT IT 1000+ employees 10 000 customers 53 Countries Africa and worldwide JSE listed ADI Software and Services Provider

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SLIDE 1 Achieve more.

ANNUAL RESULTS PRESENTATION

FOR THE YEAR ENDED 30 JUNE

2018

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BUSINESS OVERVIEW

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ABOUT ADAPT IT

1000+ employees 10 000 customers 53 Countries Africa and worldwide JSE listed ADI Software and Services Provider Level 3 B-BBEE contributor National offices: Johannesburg, Durban, Cape Town International offices: Mauritius, Botswana, Kenya, Ireland, Australia and New Zealand Strategic Partners: Microsoft | Oracle | IBM | SAP

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DIRECTORATE

CRAIG CHAMBERS

CFA, PDM, BCom Independent Non-Executive Chairman Appointed 3 May 2011

BONGIWE NTULI

CA (SA) Independent Non-Executive Director Appointed 27 May 2008

CATHERINE KOFFMAN

BA, LLB, LLM Admitted Attorney Independent Non-Executive Director Appointed 9 February 2015

OLIVER FORTUIN

MBA Independent Non-Executive Director Appointed 8 February 2013

TIFFANY DUNSDON

CA (SA) Commercial Director Appointed 18 April 2002

SIBUSISO (SBU) SHABALALA

BCom Chief Executive Officer Appointed 5 December 2007

NOMBALI MBAMBO

CA (SA) Chief Financial Officer Appointed 18 August 2016

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MARKET POSITIONING

VISION VALUES PERSONALITY POSITIONING

To be a leading provider of specialised software. Respect, Honesty, Responsibility, Accountability.
  • Leading. Professional. Experts.
Achieve more.

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10 YEARS OF GROWTH

OCT 2007 OCT 2008 AUG 2009 OCT 2012 OCT 2013 SEPT 2014 JAN 2016 JUL 2017 JUNE 2018

InfoWave merges with Adapt IT creating a software business. Adapt IT specialising in Manufacturing software, moves to the main board of the JSE. Education specialisation through the acquisition of Integrated Tertiary Software (ITS) – a leader in tertiary education ERP systems expanding the company into Europe and Australasia. The Swicon360 acquisition extends the manufacturing
  • ffering with
SAP Human Capital Management Business Process Outsourcing. Energy sector entry through the Aquilon acquisition expands Adapt IT into Africa’s growing energy, sector, serving major oil companies. Added Telecommunications intelligence management software through the AspiviaUnison acquisition. Financial Services Sector is entered through the acquisition of CQS. Micros South Africa, a leader in Hospitality Software, is acquired by Adapt IT. Acquired LGR Telecommunications, provision and management of end- to-end data warehouse and business intelligence systems with presence in Africa and Australia.

2014 2017 2017 2020 target

5th fastest growing African Tech Company R1 billion annualised turnover 2nd in the Sunday Times Top 100 companies R3 billion annualised turnover

MILESTONES

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OUR NEW CORPORATE IDENTITY

As Adapt IT evolves in delivering specialised software solutions worldwide, we have similarly revived our corporate identity to reflect our core positioning and
  • expertise. Our promise ‘Achieve more.’ is lucidly expressed in line with the rebranded logo which boldly incorporates the red icon and Adapt IT wordmark. The
icon is the composite of the infinity sign and the Adapt IT letter A which represents a symbol of excellence and empowerment, while Adapt IT wordmark portrays our legacy and dynamic global approach as the leading provider of specialised software. This rebranding initiative allows us to grow our people and solutions to enable our customers to achieve more as well as to accentuate how we are experienced as Leading. Professional. Experts.

Delivering solutions for your environment. Achieve more.

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SECTOR FOCUS

EDUCATION ENERGY FINANCIAL SERVICES MANUFACTURING HOSPITALITY COMMUNICATIONS 7

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FLAGSHIP SOFTWARE

  • Sugar Industry ERP solution – Tranquillity
  • Weighbridge and Laboratory Testing Solution – CaneLAB
  • Safety Health Environment and Quality Solution (SHEQ) –

OpSUITE SERVICES

  • Business advisory
  • Software development, implementations, systems integration
  • Sustainability Reporting

MANUFACTURING EDUCATION

FLAGSHIP SOFTWARE

  • Integrated Tertiary Software – ITS Integrator
  • CELCAT Timetabling

SERVICES

  • ITS Integrator support
  • Implementation, customisation, development and integration
  • Automated exam and class timetabling
  • Training and consulting

CUSTOMERS CUSTOMERS

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ENERGY

FLAGSHIP SOFTWARE

  • SAP™ Oil-in-One
  • FUEL-FACS+ Terminal Automation Software SERVICES

SERVICES

  • Supply Chain and Operational advisory
  • Technology and ICT advisory
  • Industry Solution development, deployment and integration
  • SAP™ IS-OIL Services
  • SAP™ Services and Support
  • Business Process Outsourcing (BPO)

FINANCIAL SERVICES

FLAGSHIP SOFTWARE

  • CaseWare
  • TaxWare
  • Probe Audit Working Papers
  • Audit International

SERVICES

  • Audit
  • Practice Management
  • Financial reporting
  • Tax and Secretarial solutions

CUSTOMERS CUSTOMERS

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HOSPITALITY COMMUNICATIONS

FLAGSHIP SOFTWARE

  • Technology Lifecycle Management (TLM)
  • Corporate Carrier Self Service (CCSS) platform
  • CDR Live

SERVICES

  • Software as a Service (SaaS)
  • Telecommunication industry benchmarking
  • Telecommunication and technology expense management

(TEM) best practice

  • Customer experience (CX) and self-service advisory

FLAGSHIP SOFTWARE

  • Oracle Hospitality Simphony POS
  • Oracle Hospitality RES POS
  • Oracle Hospitality Opera Property Management

SERVICES

  • Consulting
  • Project Management
  • Implementation Services
  • Hosting and Database Services
  • Application Services

CUSTOMERS CUSTOMERS

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TRANSFORMATION

SCORECARD 2017 TARGET SCORE Ownership 21,07 25 Management & Control 14,66 23 Skills Development 17,20 20 Enterprise Development 48,28 50 Socio-Economic Development 12,00 12 OVERALL SCORE 113,21 130 LEVEL 3 B-BBEE CONTRIBUTOR

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SOCIAL RESPONSIBILITY

Adapt IT has a long track record of investing in the upliftment of disadvantaged South African communities and remains committed to continuing with this practice through its sustainable finance practices and policy of extending the impact of projects to embrace more beneficiaries. The company continues to invest in larger longer-term initiatives that are sustainable and provide the most benefit for disadvantaged South African communities.

2018 ADOPT-A-SCHOOL FOUNDATION

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FINANCIAL HIGHLIGHTS

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ADI YEAR ENDED 30 JUNE 2018

TURNOVER

36% 39%

EBITDA

14%

HEADLINE EARNINGS PER SHARE

32%

BASIC EARNINGS PER SHARE

11%

NORMALISED HEADLINE EARNINGS PER SHARE

> > > > >

FINANCIAL HIGHLIGHTS

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ADI 5 YEAR REVIEW

406 575 796 994 1 348

  • 200

400 600 800 1,000 1,200 1,400 1,600 2014 2015 2016 2017 2018

TURNOVER (R’m)

TURNOVER CAGR 27% 13% ORGANIC TURNOVER GROWTH * 30% ACQUISITIVE TURNOVER GROWTH 36% TURNOVER

EBITDA (R’m)

20% EBITDA MARGIN 37% EBITDA CAGR 39% EBITDA

56 102 165 194 270

  • 50

100 150 200 250 300

2014 2015 2016 2017 2018

* From continuing operations

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ADI 5 YEAR REVIEW

34.45 42.34 57.61 58.74 77.51 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 2014 2015 2016 2017 2018

BEPS (cents)

18% BEPS CAGR 32% BEPS

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ADI 5 YEAR REVIEW

34.55 42.31 57.54 58.76 66.97 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 2014 2015 2016 2017 2018

HEPS (cents)

14% HEPS CAGR 14% HEPS

NORMALISED HEPS (cents)

20% NORMALISED HEPS CAGR 11% NORMALISED HEPS

34.55 52.02 71.67 78.96 87.59 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 2014 2015 2016 2017 2018 17

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ADI 5 YEAR REVIEW

8,23 10,90 13,40 13,70 17,10

  • 2.00

4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 2014 2015 2016 2017 2018

POLICY OF

4 X

COVER 25% DIVIDEND PER SHARE

DIVIDEND PER SHARE (cents)

17,10 cps

16TH

DIVIDEND SEPT 2018

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ADI ABRIDGED CONSOLIDATED STATEMENTS

Group 2018 R’000 Group 2017 R’000 % Change Turnover 1 348 403 993 671 36 EBITDA Depreciation and amortisation Amortisation of intangible assets acquired 270 102 (18 002) (33 895) 194 326 (14 238) (29 105) 39 26 16 Profit from operations Net finance cost Share of loss of equity accounted investment after tax 218 205 (23 067)
  • 150 983
(22 851) (88) 45 1 (100) Profit before taxation Income tax expense 195 138 (65 526) 128 044 (35 498) 52 85 Profit for the year 129 612 92 546 40 Headline earnings Amortisation of intangible assets acquired net of deferred tax Fair value adjustment to financial liability 105 426 24 404 8 048 88 149 20 956 9 356 20 16 (14) Normalised headline earnings 137 878 118 461 16 Weighted average number of ordinary shares in issue 157 415 150 028 5 HEPS (cents) 66,97 58,76 14 Normalised HEPS (cents) 87,59 78,96 11

COMPREHENSIVE INCOME

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ADI ABRIDGED CONSOLIDATED STATEMENTS

Group 2018 R’000 Group 2017 R’000 Non-current assets Current assets 974 154 413 361 730 781 355 666 Total assets 1 387 515 1 086 447 Total equity Non-current liabilities Current liabilities 753 204 287 750 346 561 668 537 193 178 224 732 Total equity and liabilities 1 387 515 1 086 447 Gearing ratio 29% 15%

FINANCIAL POSITION

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ADI ABRIDGED CONSOLIDATED STATEMENTS

Group 2018 R’000 Group 2017 R’000 OPERATING ACTIVITIES Cash generated from operations Finance income Finance costs Dividends paid Taxation paid 257 709 3 958 (23 403) (34 971) (68 951) 139 325 1 601 (16 249) (23 359) (42 102) Net cash flow generated from operating activities Net cash flows utilised in investment activities Net cash inflow from financing activities 134 342 (183 157) 36 370 59 216 (59 487) 20 903 Net (decrease)/increase in cash resources Exchange differences on translation Cash and cash equivalents at the beginning of the year (12 445) 794 98 049 20 632 (307) 77 724 Cash and cash equivalents at the end of the year 86 398 98 049

CASH FLOWS

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SECTOR RESULTS

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SECTOR CONTRIBUTION - TURNOVER

13% 13%

EDUCATION ENERGY FINANCIAL SERVICES MANUFACTURING HOSPITALITY

28% 28% 25% 25% 13% 13% 21% 21%

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TURNOVER BY SECTOR (R’m)

171 285 350 188 178 373 332 175 290 50 100 150 200 250 300 350 400 Education Manufacturing Financial Services Energy Hospitality

36% TURNOVER 2018 2017

61 From ongoing operations Business disposed 289

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EBITDA BY SECTOR (R’m)

30 70 53 44 32 92 56 36 35 10 20 30 40 50 60 70 80 90 100 Education Manufacturing Financial Services Energy Hospitality

39% EBITDA GROWTH 2018 2017

From ongoing operations Business disposed

3

50

20% EBITDA MARGIN

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TURNOVER MIX

90%

Rands

5%

US $

1%

Australian $

1%

Euro

1%

Other

CURRENCY

81%

South Africa

13%

Other African countries

2%

The Americas

3%

Australasia

1%

Europe

GEOGRAPHY

2%

New Zealand $

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LOOKING AHEAD

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STRATEGY FOR INTERNATIONAL EXPANSION

GROWTH COMPLEXITY

PHASE 1: SINGLE MARKET Establish competitive position; Grow, defend and unlock potential; Optimise performance

South Africa
  • Johannesburg
  • Durban
  • Cape Town

PHASE 2: PROXIMATE REGIONAL EXPANSION Geographical expansion from core market; Leverage core capabilities; Building growth capabilities

SADC
  • Namibia
  • Botswana
  • Mozambique
  • Zambia
  • Zimbabwe
  • Malawi

PHASE 3: MULTI-REGIONAL HUB Multiple hubs; Leverage growth capabilities; Develop scalable infrastructure Adapt to changing risk and compliance profile

East Africa
  • Kenya
  • Tanzania
  • Uganda
  • Rwanda
  • Ethiopia
Indian Ocean
  • Mauritius
West Africa
  • Nigeria
  • Ghana
  • Sierra Leone
  • Cameroon
  • Benin
  • Gambia
Central Africa
  • DRC
  • Congo

PHASE 4: INTERNATIONAL EXPANSION Integrated rest of Africa and Global expansion

P1 P2 P3 P4 Australasia
  • Australia
  • New Zealand

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CAPITAL RAISING NEW B-BBEE CODES GEARING PROFITABLE WITH GOOD TRACK RECORD NEW GEOGRAPHIES SIZEABLE ACQUISITIONS

ACQUISITION CRITERIA AND FUNDING

  • > 25% up to 100% of turnover
  • High annuity income ratio
  • Sector specialisation
  • Niche IP
  • Strong management
  • Good cultural fit
  • Africa
  • Rest of world
  • Up to 50% of balance sheet
  • Private placement
  • Improve equity ownership

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  • Successful acquisitions
  • Solid growth record
  • Sector diversified

GO GOOD TRA RACK RE RECORD

  • Annuity income
  • Software and Services
  • Mergers and Acquisitions

SU SUSTAINABLE GR GROWTH STRA RATEGY

  • Strong turnover growth
  • Healthy margins
  • Outperforming the ICT

industry

SO SOLID PERFORMANCE

SHARE MOVEMENT BASED TO 100

30 June 2018 Shareholder distribution Free Float 74% Held by Subsidiary, Directors, Management and Staff 26% Share Liquidity 28% Estimated future dilution (from transactions already executed) 1%

40 60 80 100 120 140

ADI - AdaptIT Software & Computer (J953) Small Cap (J202) J203 - Ftse/Jse All Share

ADI INVESTMENT CASE

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THANK YOU.

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