Empowering the World of Education 2016 Report Ian Bowles, CEO - - PowerPoint PPT Presentation

One team, One solution.

Empowering the World of Education 2016 Report

Ian Bowles, CEO

&

Mark Pickett, CFO

30th March 2017

One team, One solution.

Overview

30 March 2017 Tribal 2016 Results

§ 2016 in Brief § Financial Report § Future Direction

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One team, One solution.

2016 Business Highlights Ian Bowles CEO

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One team, One solution.

Three Year Plan

30 March 2017 Tribal 2016 Results

Create a solid foundation, and sound

• perational model

Improve profitability, deliver new product strategy with new licensable modules Build on operational performance and deliver top-line growth

2016 2017 2018

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Financial Results – at Glance

30 March 2017 Tribal 2016 Results

Significantly improved performance despite the planned revenue decline

£90.3m

Revenue

2015 £106.7m

£4.7m

Adjusted operating profit*

(before share based payments)

2015 £2.5m

down 15% up 88%

£8.8m

Net Cash

2015 Debt £(32.5)m

up 127%

* 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

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One team, One solution.

FY16 Objectives

30 March 2017 Tribal 2016 Results

Restore confidence in the team, customers and investors

1 2 3 4

Drive operational efficiencies Create a new single operating model supported by:

– Creation of a coherent single go to market strategy – Create cohesive Company & Solutions message

Reduce operating costs

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FY16 Delivered

30 March 2017 Tribal 2016 Results

£

Embedded new

• perating

model Defined clear strategic direction Positive customer engagement Delivered £9m annualised cost savings

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Higher Education Further/Vocational Education Employers & Training Providers Schools & Government Bodies

University of the Arts London, UK Universiti Teknologi Petronas, Malaysia University of Bristol, UK (renewal) University of Wales, Trinity Saint David, UK World Maritime University, Sweden Massey University, NZ University of Waikato, NZ Carleton University, Canada

Hillingdon Adult Education, UK Auckland Institute of Studies, NZ Nelson Marlborough Institute of Technology, NZ Intueri Group, NZ Gateshead Council Learning & Skills, UK John Lewis, UK Boots, UK Wolseley UK Ltd Muskegon City Public Schools, US American Promise Schools, US NHS Tavistock & Portman Foundation Trust, UK Skills Funding Agency, UK Ministry of Education, NZ

30 March 2017 Tribal 2016 Results

Key Wins

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Financial Report Mark Pickett CFO

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CFO Summary

30 March 2017 Tribal 2016 Results

§ 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

£90.3m

Revenue

2016 £90.3m 2015 £106.7m

down 15%

£4.7m

Adjusted Operating Profit*

(before share based payments)

2016 £4.7m 2015 £2.5m

up 88%

£8.8m

Net Cash

2016 £8.8m 2015 Net Debt £(32.5)m

up 127%

* 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

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Consolidated Income Statement

30 March 2017 Tribal 2016 Results

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

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One team, One solution. 30 March 2017 Tribal 2016 Results

Financial Key Points

Revenue

£90.3m

2015 £106.7m

down 15%

Adjusted operating profit

£4.7m

2015 £2.5m

up 88%

Adjusted operating margin

5.2%

2015 2.3%

up 126%

Annually recurring revenue

£32.4m

2015 £30.3m

up 7%

Statutory loss

£(1.2)m

2015 £(45.4m)

improved 97%

Net cash

£8.8m

2015 £(32.5)m

up 127% Net cash from operating activities

£8.3m

2015 £(6.2)m

up 234%

Sales Order Backlog

£113.8m

2015 £121.3m

down 6%

Statutory loss per share

(0.7)p

2015 (48.2)p

improved 98%

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Revenue Bridge from 2015 to 2016

30 March 2017 Tribal 2016 Results

100.0 90.0 80.0 70.0 110.0 60.0 50.0

£106.7m

£(8.4)m £(4.7)m £(4.1)m £3.0m £(1.3)m £(1.0)m

£90.3m

Revenue 2015 Ofsted Schools Synergy Disposal SLS/CA Closure SMS QAS i-graduate Revenue 2016

One-off revenue reductions

• Ofsted Schools expiry
• Synergy disposal
• SLS/Careers Advice

non-core business closures Revenue changes by segment

• Student Management

Systems (SMS)

• QAS
• i-graduate

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One team, One solution.

Adjusted EBITDA Bridge from 2015 to 2016

30 March 2017 Tribal 2016 Results

6.0 4.0 2.0 0.0 8.0 (2.0) £7.4m 2015 EBITDA (Adj) £(3.4m)

2015 Dev Costs excl SchoolEdge

£(3.4m)

Ofsted Schools Contract

£(2.4m)

Synergy SLS

a £5.8m

InYear Cost Savings

£7.9m 2016 EBITDA (Adj) £3.4m

Underlying Improvement

FX impact 2015 EBITDA(A) with Dev Costs Expensed (excluding SchoolEdge) is £4.0m

£m

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§ Original adjusted operating profit is consistent with treatment of

• verhead costs in prior years

§ Adjusted Operating Profit (revised) includes all overhead costs directly attributable to the segment § Central Group costs include all indirect overhead costs not directly attributable to a segment, including Board costs, Finance, HR, Legal, Marketing and IT Revenue £m

Adjusted

• perating profit

(original) £m Adjusted

• perating profit

(revised) £m

2016 2015 2016 2015 2016 Student Management Systems 61.0 62.7 4.7 3.2 12.0 i-graduate 8.5 13.6 0.9 0.2 1.0 Quality Assurance Solutions 20.7 30.4 2.5 2.9 6.5 Total Lines of Business 90.3 106.7 8.2 6.3 19.6 Central / Group costs

• (3.5)

(3.8) (14.9) Total Group 90.3 106.7 4.7 2.5 4.7

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Segmentation: All Businesses

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Revenue £m 2016 2015 Licence and development 10.8 14.1 Implementation 12.4 12.5 Maintenance fees 32.4 30.3 Other 5.3 5.8 Total 61.0 62.7 Adjusted Operating Profit (£m) 4.7 3.2 Adjusted Operating Profit Margin 7.7% 5.0% Capitalised Product Development Expenditure (£m) 1.1 4.1 Revenue £m 2016 2015 Higher Education 28.8 28.6 Further Education 16.2 18.7 Schools 16.0 15.5 Total 61.0 62.7 UK 47% 57% International 53% 43% Total 100% 100%

30 March 2017 Tribal 2016 Results

Student Management Systems

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One team, One solution.

In 2016, share-based payments are included in Other Items, and 2015 is restated Share-based payments in 2017 and 2018 are currently expected to be around £1.3m 2016 2015 £m £m Share-based payment charges/(credit) 1.0 (0.4) Profit on sale of Synergy (0.3)

• Restructuring

1.9 0.5 IFRS3 amortisation 1.9 1.7 Impairment charges

• 46.8

Acquisition related cost/(credits) 0.3 (1.2) 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

30 March 2017 Tribal 2016 Results

Other Items

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Cashflow

30 March 2017 Tribal 2016 Results

2016 2015 £m £m Operating cashflow 8.3 (6.2) Proceeds of Synergy disposal 19.4

• Acquisition/disposal related costs

(3.9) (4.5) Capital expenditure (2.4) (6.8) Finance and other costs (0.5) (1.0) Net proceeds of Rights issue 20.0

• Loan (repayment)/draw down

(34.5) 12.9 Dividends

• (1.8)

FX movements 0.7 (0.2) Ca Cash in increase/(decrease) 7. 7.1 1 (7.6) Clo Closin ing cash 8. 8.8 8 1. 1.7 7 Loan drawn down

• (34.2)

Net cash/(debt) 8.8 (32.5) Net cash

£8.8m

2015 £(32.5)m

Up 127%

Cash conversion

115%

2015 (442)%

Up 126%

Operating Cashflow

£8.3m

2015 £(6.2)m

Up 234%

Free Cash

£6.0m

2015 £(13.0)m

Up 146%

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Future Direction Ian Bowles CEO

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One team, One solution.

Our Goal

30 March 2017 Tribal 2016 Results

World-class software & services company International market leading educational management solutions provider Valued by

– Customers – Staff – Shareholders

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Vision & Mission

30 March 2017 Tribal 2016 Results

to empower the world of education to provide the expertise, software and services required by education and business organisations worldwide to underpin student success

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Student Information Systems Strategy

30 March 2017 Tribal 2016 Results

School Further Education / Vocational Education Higher Education Employment & Work Based Learning Lifelong Learning Journey Tribal SchoolEdge Tribal Maytas Tribal Student Information System

A student’s lifelong learning journey underpinned by Tribal Student Information Systems

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One team, One solution.

Our Systems support complex but integrated processes

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§ Declines in retention in Higher Education are driving the need for a more personalised, engaging student experience to maintain enrolment. By 2021, more than 30% of institutions will be forced to execute on a personalization strategy to maintain student enrolment. § Changing demands on Higher Education and the consumerisation of IT are influencing institutions' requirements for student information systems (SISs). By 2020, one-quarter to one-third of higher education institutions will have committed to an SIS replacement project. § The dawn of Blockchain brings the potential for rapidly advancing changes in digital educational credentials, making them globally transferrable, trustworthy, durable and relevant to changing employer needs. By 2021, 30%

• f higher education institutions in the U.S., the U.K. and

Australia will be using a digital credentialing infrastructure powered by Blockchain.

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Gartner’s View

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In Summary…

30 March 2017 Tribal 2016 Results

Education ecosystems and education providers have similar drivers, and they are quite similar across the globe: § recruit and retain more students § provide more engaging learning, efficiently § deliver better outcomes

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One team, One solution.

Consider Betty…

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Betty looks a little worried about her journey through education!

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One team, One solution.

Preschool Primary Secondary Colleges Polytechnics PEIs International Schools Colleges Private Tuition Universities MoE Spring Representative Bodies Agents Certifiers MOOCs Vendors

The world of education is complex: lots of unconnected dots

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The world of education is also impacted by

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Stakeholder bodies Industrial Reformation Digital Transformation Disruption Skills Shortages Academic Performance Obsession Globalisation Changing modes

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One team, One solution.

The one thing consistent in Betty’s journey… …Is Betty

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One team, One solution.

• Student accessible Lifelong Learning

Record

• Access anytime, anywhere - portal and

mobile app

• Shows qualifications gained, and

progress on current studies

• Technology driven credentialing

(Blockchain)

• Consolidates disparate education

experiences into students’ hand

• Suggest courses, qualifications
• Employments links

30 March 2017 Tribal 2016 Results

Lifelong Learning Record

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What are student analytics? Indicators Connections Metrics

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One team, One solution.

• Understanding students at risk
• f dropping out or failure
• Intervention to ensure learner

success

• Target the right students for

your provision

• Understand what works best for

individual learner success, experience and retention

30 March 2017 Tribal 2016 Results

Student Analytics facilitates

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§ Pivots from, the student record – our key strength! § Connect timetabling, learning, fees, assessment, CRM, etc. § Monitor and track KPIs § Serve data when and where it matters

Connecting the dots it starts with the Student

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Fees Assessment Attendance Marks & Grades

Jimmy is late in paying his fees Jimmy doesn’t submit his assignment on time Jimmy has missed the past three days Jimmy failed his last exam

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How’s Jimmy??? Siloed information in “straight lines” means an institution can miss the warning signs

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• Seamless support

experience

• Single view of all learner

issues

• Relevant information, advice

and guidance based on learners journey

30 March 2017 Tribal 2016 Results

Student Support

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One team, One solution.

• Engage with learners earlier in

the recruitment cycle

• Build a sense of community
• Private social network, safe and

secure

• Quick, effective two way

communication

30 March 2017 Tribal 2016 Results

Student Engagement

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One team, One solution.

• Anytime, anywhere – portal & mobile app
• Personalised, tailored experience
• Enquiry to enrolment, and onwards
• Communication aligned with student

lifestyle

• Allow mapping skills to employers needs
• Platform for Employer Engagement

30 March 2017 Tribal 2016 Results

Student View

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One team, One solution.

Four Pillars of Growth

30 March 2017 Tribal 2016 Results

Market Penetration Product Penetration Geographic Expansion Mergers & Acquisitions

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USA Schools Inspection contract, Alabama, US Middle East Schools Inspection contract, Ministry of Education, UAE UK - Ofsted

• Additional work in Q1
• Provision of systems for

12 months

30 March 2017 Tribal 2016 Results

QAS Business

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2017 Committed Revenue

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Backlog £113.8m (2015 £121.3m)

• f which:

§ £58.1m is committed for 2017 § Represents 69% of consensus revenue of £84.0m 2017 deals § Sheffield § MoE in Dubai § British Council § NSW TAFE/ Schools

£32.4m

Annually Recurring Revenue

39% £14.4m

Other Committed SMS backlog

17% £11.3m

QAS/iGrad backlog

13% £25.9m

Revenue required to be sold in year

31%

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One team, One solution.

Our Strategic Priorities

30 March 2017 Tribal 2016 Results

Deliver the new Student Information framework Increase annual recurring revenue, exploiting market trends of SaaS & cloud Grow market share in established & new territories Drive operational efficiency and improved margins

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One team, One solution. 30 March 2017 Tribal 2016 Results

Appendix

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Our Key Strengths

30 March 2017 Tribal 2016 Results

Extensive and long-standing customer relationships Broad, complementary portfolio Educational expertise and focus International delivery and insight

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Market Position

30 March 2017

Tribal 2016 Results

§ No.1 provider of student management systems to universities in the UK, Australia & New Zealand

– Australia we work with 90% of Universities – New Zealand we work with 100% of Universities – Facilitates and asset management software provides the NZ Ministry of Education with an effective tool to manage more than 2,300 properties, valued at around NZ$25 billion – $17 billion of expenditure benchmarked to enable tertiary institutions in Australia and New Zealand to identify achievable cost savings and opportunities for re-investment and improvement – Implementing technology to support one of the world’s largest educational change programs, covering

• ver 2,000 schools and TAFEs and 1.4 million students.

§ No.1 Provider to schools in Australia ( 2000+ by end of 2017) § Global benchmark for student experience 2.9 million detailed student survey responses used by;

600 universities worldwide Across 33 countries

§ Next generation cloud solution is being deployed by the British Council

100 Teaching Centres in 59 countries 300,000 student records annually

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One team, One solution.

Tribal Student Information Framework

30 March 2017 Tribal 2016 Results

UI Layer Data Layer Analytics Relational Database Business Logic Layer Business Logic (actual code) REST API

Tribal Service Bus

Tribal API

APIs

…

Current SMS

Specific API

New Value Add Modules Core Student Mgmt Modules 3rd party modules

End Users

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A few of our many customers

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One team, One solution.

Financial Reporting

30 March 2017 Tribal 2016 Results

Three Lines of Business:

SMS i-graduate QAS

Four Market Segments:

Higher Education Further Education Schools Work Based Learning

Greater transparency

• f operating

margin

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One team, One solution. 30 March 2017 Tribal 2016 Results

Contact: Email § Ian.Bowles@tribalgroup.com § Mark.Pickett@tribalgroup.com

WWW.TRIBALGROUP.COM @TRIBALGROUP

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