INTERIM FINANCIAL RESULTS

For the period ended

30 June

2013

Agenda

SECTOR OVERVIEW

FINANCIAL

PROSPECTS

QUESTIONS

SECTOR OVERVIEW

• “Along with primary healthcare, education is South Africa’s top priority. The

millions of unemployed, hopeless and desperate youths who line streets

and binge drink to kill time are largely unemployable. This is a direct

consequence of an education system that is unable to make them literate

and numerate.”- Business Day editorial

• “If South Africa is to join the ranks of developing countries with higher

standards of schooling performance, and with good schooling available to

the poor, it will need to review the ethics and the practicalities of national

and provincial education funding.”- Ann Bernstein, executive director

of the Centre for Development and Enterprise (CDE)

As they say …

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0 - 29 30 - 39 40 - 49 50 - 59 60 - 69 70 - 79 80 - 100

Country

ADvTECH

Quality – schools maths

Quality – tertiary student drop outs

Degrees Diplomas All programmes

Contact institutions

5 years earlier 38% 58% 56%*

Latest available 46% 56% 58%*

UNISA

5 years earlier 59% 85% 56%*

Latest available 68% 87% 58%*

IIE

5 years earlier 18% 31% 30%

Latest available 21% 28% 27%

*combined for all public HE institutions

Sources: CHE, DHET, Ian Scott, ADH records

Unemployment in SA

45%

14%

29%

12%

June 2013

Not economically active

Unemployed

Formal employment

Other employment

Unemployment

14 000

13 500

13 000

12 500

12 000

12.9 million

employed

13.6 million

employed

646 000 jobs gained

1 million jobs lost

14 million employed thousand

GDP Growth and unemployment

2008 2009 2010 2011 2012 2013

Source: Stats SA

Unemployment

Source: Stats SA

Brands at a glance

SCHOOLS

DIVISION

TERTIARY

DIVISION

RESOURCING

DIVISION

Employee headcount

1 000

2 000

3 000

4 000

5 000

08 09 10 11 12

Investment

9%

64%

11%

16%

INVESTMENT PROGRAMME 2010 - June 2013 (R603 million)

Infrastructural investments made

Tertiary properties

School properties

ICT equipment

Other infrastructuralequipment

Current infrastructure pipeline

Type Investment name Nature Completion

date

Additional

places

Building

acquisition

Abbotts Pretoria

East

Site expansion Complete 100

Building

acquisition

Rosebank College

Pretoria

Site relocation Complete 200

Building

improvement

Crawford Lonehill

and La Lucia,

Trinityhouse Little

Falls

Sports facilities,

school hall

Complete

Additional

buildings

Crawford North

Coast pre-primary

Site expansion Dec 2013 275

Additional school Crawford Italia

Bedfordview

New school on

new site

Dec 2013 750

Additional school Trinityhouse

Heritage Hill

New school on new

site

Phase I

Dec 2013

300 Phase I,

1 800 when

complete

Additional school Abbotts Centurion New school on new

site

Dec 2013 400

Additional

buildings

Abbotts Suideroord New classroom

block

Sept 2013 100

Lease termination

and relocation

FLB Site relocation to

owned site

Dec 2013 200

Trinityhouse - Heritage Hill

Trinityhouse - Heritage Hill

FINANCIAL

Segmental report

H1 2012 H1 2013 % ch

R million

Revenue Schools 367 407 11%

Tertiary 372 374 1%

Resourcing 113 103 -9%

Total 850 882 4%

EBIT Schools 64 70 9%

Tertiary 16 22 31%

Resourcing 13 10 -24%

Total 92 101 9%

Tangible assets Schools 615 755 23%

Tertiary 244 266 9%

Resourcing 3 3 3%

Total 862 1 024 19%

Income statement insight

Rm 1H2012 1H2013 % change

Revenue 850 882 +4%

EBITDA 127 136 +7%

Operating profit 92 101 +9%

HEPS and diluted HEPS (cps) 16.6 17.7 +7%

Distribution (cps) 10.0 10.5 +5%

Free operating cash flow

before capex (cps)

71.5

70.7

-1%

Balance sheet insight

Rm 1H2012 1H2013 % growth

NAV 755 809 +7%

Tangible assets 862 1 024 +19%

Debtors 154 158 +3%

Fees in advance 354 392 +11%

Net cash on hand 118 86 -27%

Segmental analysis

43% 44%

13%

2012

46% 42%

12%

2013

Schools Tertiary Resourcing

Revenue

Segmental analysis

68% 18%

14%

2012

69% 21%

10%

2013

Schools Tertiary Resourcing

Operating profit

Revenue trend

0

200

400

600

800

1 000

08 09 10 11 12 13

R'm

Group revenue

Group operating margin

0%

5%

10%

15%

20%

08 09 10 11 12 13

HEPS trend

0

5

10

15

20

25

08 09 10 11 12 13

Ce

nts

Distributions

0

2

4

6

8

10

12

08 09 10 11 12 13

Ce

nts

Cash flow generation

0

50

100

150

200

250

300

350

08 09 10 11 12 13

R'm

Cash generated from operations Cash from operations (after working capital)

Cash flow generation

0

50

100

150

200

250

300

08 09 10 11 12 13

R'm

Free operating cash flow before capex

Net cash position

0

50

100

150

200

09 10 11 12 13

R'm

Schools trends

0

100

200

300

400

500

08 09 10 11 12 13

R'm

Revenue

Schools trends

0 10 20 30 40 50 60 70 80

08 09 10 11 12 13

R'm

Operating profit

Schools trends

10%

12%

14%

16%

18%

20%

08 09 10 11 12 13

Operating margin

Tertiary trends

0

100

200

300

400

500

08 09 10 11 12 13

R'm

Revenue

Tertiary trends

0 10 20 30 40 50 60 70 80

08 09 10 11 12 13

R'm

Operating profit

Resourcing trends

0

100

200

300

400

500

08 09 10 11 12 13

R'm

Revenue

Resourcing trends

0 10 20 30 40 50 60 70 80

08 09 10 11 12 13

R'm

Operating profit

PROSPECTS

Prospects

GDP Growth

Prospects

Exchange rate – US$

June 2008 – June 2013

Source: Internet www.oanda.com

Prospects

0

2

4

6

8

10

12

14

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CPI

EPI

5.8

11.03

9.1

7.54

5.8

9.57

1.4

9.56

3.4

8.4

4.6

7.01

7.2

7.97

11.5

8.3

7.7

6.5

3.7

9.2

5.6

8.6

5.7

9.0

5.5

9.0

CPI

EPI

%

CPI and Education Price Index (EPI)

Year on year percentage change: 2001 to 2013

Source: Consumer Price Index January 2013

Perfect symmetry – education and jobs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Unemployment rate

Employment rate

Source: CDE

Average annual investment trend

0

50

100

150

200

250

2008 2009 2010 2011 2012 2013

For 2013:

Spent YTD R79m

Commitments R190m

Total R269m

CAGR = 16%

R million

• Lease commitments 331

• Capital investments

› contracted 235

› approved 1 013

› project investigations 1 700

• Approximate capacity increase by 2024 of 24 000 places

› about two thirds

Investment plans

Market cap index

0

200

400

600

800

1000

1200

1400

1600

1800

2000

ADH - Advtech Ltd (Market Cap) J202 - Ftse/Jse Small Cap (Market Cap)

J203 - Ftse/Jse All Share (Market Cap)

QUESTIONS