Empowering the world of education 2019 Half Year Results 20 th August 2019
2019 Half Year Good SIS performance in EMEA; Australia challenging; Education Services positive but Middle East inspections curtailed in H1 Annual recurring revenues almost £20m for half-year, up 7%. Operating margin up to 15.5% Acquisition of Crimson Consultants (Tribal Dynamics) expanded SIS offering; good progress on delivering first Edge modules Full year earnings expected to be in line with the Board’s expectations August 2019 Tribal Results Half Year 2019 2
2019 Half Year Highlights Tribal profit growth £m 7 Student Information Services 15% HE: Global ARR sales ahead, EMEA license and implementation ahead 6 despite no new SITS wins, however APAC significantly behind. 5 FE: Significant growth on prior year, won largest colleges 10% group in London. 4 WBL: Large Maytas sale to CITB for apprentice management. 3 VL: Decrease on prior year as anticipated, however some good progress including helping to deliver OneTAFE for TAFE NSW 5% 2 Education Services 1 Good performance in UK offset by curtailment of Middle East work; won new NCETM £9m contract over 3 years, new inspections work in Sharjah. Cost 0 0% savings in i-graduate surveys delivering improved profitability. 2016 2017 2018 2019 H1 H1 H1 H1 Adjusted operating profit Adjusted operating margin HE: Higher Education; FE: Further Education; WBL: Work-based Learning; VL: Vocational Learning August 2019 Tribal Results Half Year 2019 3
Financial KPIs Adjusted operating margin Revenue Adjusted operating profit 15.5% £40.4m £6.3m up 0.5 pp In line 2018 15.0% 2018 £42.0m 2018 £6.3m down 3.8% Revenue / Average FTE Annual recurring revenue* Committed income £96k £19.9m £123.5m 2018 £92k** up 4.3% 2018 £18.9m 2018 £121.6m** up 1.6% up 5.5% Adjusted earnings per share Net cash before acquisition Adjusted EDITDA 2.5p £12.0m £8.3m £6.0m after acquisition up 14% 2018 2.2p 2018 £9.2m 2018 £7.9m up 30% up 4.9% * 6 months to 30 June ** as at 31 December 2018 August 2019 Tribal Results Half Year 2019 4
2019 Challenges Universities are delaying going to market for new SIS system, particularly Australia, due to market uncertainties Challenges across all business in Australia are being addressed and improvement plans in place, but will continue in 2020 Dispute with software platform provider on royalty payment ongoing Data breach in Australian subsidiary, Tribal Campus, identified, addressed, and drawing to a conclusion August 2019 Tribal Results Half Year 2019 5
Acquisition of Crimson Consultants (Tribal Dynamics) What Why • Broadens Tribal’s portfolio of products to take to • Pure play Microsoft Dynamics vendor, developing IP- market: based solutions for the UK Higher and Further • increase share of wallet in existing customers Education market • penetrate competitor sites • expand into other geographies • Initial consideration of £6m with a further £4m contingent consideration based on annual recurring • Tribal Edge Student Information System revenue targets • accelerates speed to market • • Over 60 CRM implementations, including 30+ reduces the product investment cost required to develop this functionality universities; £3m annual revenue of which c40% annual recurring • Earnings enhancing is accretive to eps • Focusing on market trend to use CRM to • however, will invest in Crimson through first full year to drive increased revenue in new markets • increase Student Recruitment and • drive competitive advantage through improved Student Experience August 2019 Tribal Results Half Year 2019 6
Financial Report August 2019 Tribal Results Half Year 2019 7
Summary 6 months ended 30 June 2019 Revenue Adjusted Operating Profit* Net Cash £6.3m £6.0m £40.4m 2019 £6.0m 2019 £40.4m 2019 £6.3m 2018 £9.2m 2018 £42.0m 2018 £6.3m down 35% in line down 3.8% § Core revenue, on a constant currency basis, is down 3%, SIS unchanged, Education Services down 9% § Adjusted Operating Profit is in line with 2018 at £6.3m, on a constant currency basis this is £0.1m up on 2018 § Net cash increased 30% excluding the acquisition of Crimson Consultants for £6m, includes £2.8m of investment in Edge development * Adjusted operating profit is in respect of continuing operations and is stated excluding “Other Items” charges of £1.8m (2018: £2.0m). Other Items include Share-based Payments, Amortisation of IFRS3 Intangibles, and Restructuring and associated costs August 2019 Tribal Results Half Year 2019 8
Segment Results Segment Revenue Segment Profit 2018 H1 Growth % Revenue (£m) 2019 H1 2018 H1 (Constant Currency) (Constant Currency) (Constant Currency) (Constant Currency) 6 months to 30 June 45 14 40 28.7 29.1 28.8 - Student Information Systems 12 35 10 30 11.7 12.8 12.9 (9%) Education Services 8 25 40.4 42.0 41.7 (3%) 20 Total 6 15 4 10 2 5 Annual Recurring Revenue 0 19.9 18.9 18.5 0 7% (6 months to 30 June) 2018 H1 2019 H1 2018 H1 2019 H1 SIS ES SIS ES 2018 H1 Growth % Adjusted Operating Profit 2019 H1 2018 H1 (Constant Currency) (Constant Currency) 6 months to 30 June Revenue £m Revenue by 9.2 9.2 9.0 2% Student Information Systems Geography 2.6 3.2 3.2 (16%) Education Services 2018 H1 2019 H1 2018 H1 Growth % (Constant 11.8 12.4 12.2 (3%) Segment Profit Currency) 24.2 20.5 20.5 (5.6) (6.1) (6.0) UK 18% Central Overheads 7% 6.3 6.3 6.2 1% Total 16.2 21.5 21.3 Rest of World (25%) 40.4 42.0 41.7 (4%) Total 15.5% 15.0% 14.8% 0.7pp Operating Margin August 2019 Tribal Results Half Year 2019 9
Segment Results - SIS 2018 H1 Growth % 2018 H1 Growth % Student Information Systems 2019 H1 2018 H1 2019 H1 2018 H1 (Constant (Constant (Constant (Constant EMEA (£m) (£m) Currency) Currency) Currency) Currency) 3.4 4.8 4.8 (30%) 3.2 3.0 3.0 8% License & Development Fees License & Development Fees 16.2 15.6 15.4 5% 7.9 6.9 6.9 13% Support & Maintenance Fees Support & Maintenance Fees 6.4 6.5 6.4 (1%) 4.6 3.4 3.4 35% Implementation Services Implementation Services 2.5 2.0 2.0 21% 2.1 1.7 1.7 22% Cloud Services Cloud Services 0.3 0.1 0.1 112% 0.2 0.1 0.1 115% Other Other 28.7 29.1 28.8 (1%) 18.1 15.2 15.2 19% Revenue Revenue 9.2 9.2 9.0 2% 6.0 3.9 3.9 53% Segment Profit Segment Profit 32% 32% 31% 2% 33% 26% 26% 29% Segment Margin % Segment Margin % Crimson 1% Revenue (Constant Currency) 2018 H1 Growth % Schools 2019 H1 2018 H1 18 (Constant (Constant 12% APAC (£m) WBL Currency) Currency) 16 0.1 1.8 1.8 (92%) 6% License & Development Fees 14 8.3 8.7 8.5 (2%) Support & Maintenance Fees HE 12 1.8 3.1 3.0 (41%) 56% Implementation Services 10 FE 0.4 0.3 0.3 10% Cloud Services 25% 8 0.0 0.0 0.0 (49%) Other 6 10.6 14.0 13.7 (22%) Revenue 4 2 3.2 5.3 5.2 (38%) Segment Profit 0 Licence & Dev. Maintenance Implementation Cloud Other 30% 38% 38% (20%) Segment Margin % 2018 H1 2019 H1 August 2019 Tribal Results Half Year 2019 10
Committed Revenue Committed as at 30 June 2019 Total Committed Revenue* split by year of expected recognition £123.5m (FY18 £121.6m) 140 • Increase of £1.9m on 2018 £123.5m 8.9 120 Key Student Information System contracts closed 34.7 • Sopra Steria (Shared Services Connected Limited) 100 • TAFE NSW Other 47.7 4% • Catholic Education Commission Victoria OTHER 80 4% QAS 10% QAS 13% Crimson Key Education Services contracts closed 60 2% • Skills Funding Agency SIS EMEA SIS EMEA 46% 44% SIS APAC • 40 Sharjah Education Council 39% 32.2 Committed Revenue SIS APAC • Louisiana Department of Education £122.5m, split by business 37% 20 • Tertiary Education Commission 0 * Committed Revenue (Backlog) refers to the Total Contract Value of booked sales orders which 2019 H2 2019 2020 2020 2021 2021 2022+ 2022+ have not yet been delivered (including 2 years Support & Maintenance, where it is contracted on an annual recurring basis) August 2019 Tribal Results Half Year 2019 11
Cashflow 2019 2018 Net cash before acquisition Operating Cashflows 7.4 8.0 £12.0m (£6.0m after acquisition) Working Capital movements (10.2) (6.2) 2018 £9.2m up 30% Tax received/(paid) 0.1 (1.2) Operating cashflow (before tax) Net Operating Cash (2.7) 0.6 £(2.8)m Acquisition of Crimson (5.9) - 2018 £1.7m down £4.5m Investing activities (inc. Edge) (3.3) (2.4) Working capital profile is negative in H1; Deferred consideration - (0.8) key drivers include the timing of the Support & Maintenance and Cloud Financing (inc. dividend) (2.1) (1.9) down 86pp Services renewals with annual payments Foreign exchange impact - (0.2) weighted to H2. In addition there were delays in receiving Cash decrease (14.0) (4.7) cash on a Middle East contract (received in down £4.1m July) in H1 and exit payments made in Net Cash 6.0 9.2 relation to the restructuring in Australia. August 2019 Tribal Results Half Year 2019 12
Tribal: strategy update EMPOWERING THE § Evolution of Tribal strategy WORLD OF EDUCATION § Pricing the transition to We provide the expertise, Edge software and services required by education and business organisations worldwide to underpin student success. August 2019 Tribal Results Half Year 2019 13
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