IDP Education : FY20 Results Investor PresentationOpens in a new Window

IDP Education

FY20 Financial Results

The material in this presentation has been prepared by IDP Education Limited (ASX: IEL) ABN 59 117 676 463 ("IDP Education") and is general background information about IDP Education's activities current as at the date of this presentation. The information is given in summary form and does not purport to be complete. In particular you are cautioned not to place undue reliance on any forward looking statements regarding our belief, intent or expectations with respect to IDP Education's businesses, market conditions and/or results of operations, as although due care has been used in the preparation of such statements, actual results may vary in a material manner. Information in this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice.

IDP Education uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards. These measures are collectively referred to as non-IFRS financial measures. Although IDP Education believes that these measures provide useful information about the financial performance of IDP Education, they should be considered as supplemental to the measures calculated in accordance with Australian Accounting Standards and not as a replacement for them. Because these non-IFRS financial measures are not based on Australian Accounting Standards, they do not have standard definitions, and the way IDP Education calculates these measures may differ from similarly titled measures used by other companies. Readers should therefore not place undue reliance on these non-IFRS financial measures.

Note: All financial amounts contained in this presentation are expressed in Australian dollars unless otherwise stated. Any discrepancies between totals and the sum of components in tables contained in this Presentation are due to rounding.

2 | FY20 Financial Results | 20 August 2020

Business update

Solid performance despite COVID-19 headwinds in Q4

Revenue

$587 m

down 2%

Student Placement

51,000

APFs, up 3%

EBIT

$107.8 m

Up 11%

English Language Testing

1,095,000

IELTS tests, down 15%

NPATACash Balance

$70.4 m	$307 m
Up 3%	As at 30 June 2020

English Language Teaching Digital Marketing

94,400	$27.3 m
Courses, up 0.2%	Revenue, up 11% on a continuing
	business basis

4 | FY20 Financial Results | 20 August 2020

COVID-19: How we responded

Accelerated digital transformation

Rapid innovation enabled by investment in digital capability

• 60,000 students attended more than 660 virtual events
• IELTS Indicator introduced in 70+ countries at the peak of restrictions
• 35,000 virtual counselling sessions delivered

Prudent and decisive capital management

$254m equity raise and $175m working capital facility enhanced balance sheet strength

Disciplined cost control measures delivered $35m of overhead savings in H2 vs H1

Reprioritised capital expenditure to strategic programs in line with transformation vision

Strong lead generation and pipeline nurturing

Authoritative content and SEO driving organic web enquiries and a 39% reduction in cost per lead

IDP Connect research providing critical insights to clients and policy makers on student motivations and intentions

5 | FY20 Financial Results | 20 August 2020

Operational status

1. progressive reopening of offices and IELTS test centres after a near global shutdown

109 of 127 student placement offices are open*

Virtual offices have been established in India to supplement capacity where 31 of 40 offices have now reopened

IELTS testing has resumed in 53 out of 55 countries in IDP network*

Restrictions on paper-based testing and social distancing measures are currently reducing capacity

~55% of IDP's network capacity has been reinstated*

IDP language schools in Vietnam re-opened in April. Cambodian schools remain closed*

Online learning models have enabled students to continue studies

IDP Connect remained fully operational and a critical resource for clients needing to stay connected with students

International Student Crossroads research bringing customer intentions to the fore of policy decision making

6 | FY20 Financial Results | 20 August 2020

*As at 18 August 2020

Leveraging investment in technology to drive innovation

New products

enabled us to stay connected

throughout

uncertainty

A bespoke virtual events platform was introduced to enable one-on-one interviews and focused seminar sessions

60,000 students and 7,100 clients attended 660 virtual events by the end of the financial year

An online test was introduced to help students progress applications in countries where testing was suspended

At its peak, IELTS Indicator was in 70 countries and accepted by more than 900 institutions

IDP's global counsellor network was trained to shift to online counselling

A virtual office platform was stood up in 11 countries, enabling students to be welcomed and connected to the appropriate counsellor

7 | FY20 Financial Results | 20 August 2020

Growing our pipeline of customers

• Effective virtual event and lead nurturing programs is creating a strong pipeline of customers
• Investment in digital marketing capability is delivering benefit as cost per lead reduced by 39%
• Global net promoter score system showing close to 9 in 10 students would recommend IDP

Total event attendance (FY20)

Zero

In FY19

+10% v FY19

v FY19

Applied Volumes by destination (FY20)

+229%

+11%

+39%

+15%

+36%

v FY19

+52%

8 | FY20 Financial Results | 20 August 2020

IDP Connect research* shows students are holding on to their study intentions

Intention to commence study as planned	Preference of delivery mode
	Online but transition	Defer entry to	Undecided
	to face-to-face	study face-to-face

74% of students with current	Students are warming to the blended
offers are holding on to their plans	model of online start then moving to
	face-to-face
9 | FY20 Financial Results | 20 August 2020

*International Student Crossroads Research, released July 2020 by IDP Connect

• IELTS volumes are at the early stages of recovery as testing centres reopen
• Smaller computer-delivered testing centres are more flexible in COVID-19 environment
• Paper-basedtesting in some markets is still subject to shutdown restrictions
• Computer-deliveredIELTS available in 196 centres (29 new centres added since 1 Jan 20) with a further 52 scheduled to open before 31 Dec 2020

10 | FY20 Financial Results | 20 August 2020

Testing volumes

Paper based (four weekly rolling totals)

Test volumes

Computer-delivered (four weekly rolling totals)

Vision on track

Omni-channel and data

strategy positioning IDP as the industry transformer

Bullet bullet

Bullet

• IDP continues to execute its vision

Bullet

of building a global platform and

connected community for

New opportunities

international students

• Events of this year are reinforcing the industry's appetite for IDP's unique global insights to help inform data-driven decision making
• Investment in data science capabilities are unlocking operational, product and insight opportunities

11 | FY20 Financial Results | 20 August 2020

Pictured: Computer-delivered IELTS centre

Financial results

FY20 Overview

EBIT growth of 11% despite COVID headwinds

Income Summary Statement

	Full Year Actuals	Growth	Constant
	Currency
Twelve Months to 30 June	FY20*	FY19	$m	%	Growth (%)**
English Language Testing	325.5	359.6	-34.1	-9%	-14%
Student Placement	190.6	170.3	20.3	12%	11%
- Australia	90.4	104.3	-13.9	-13%	-14%
- Muti-destination	100.2	65.9	34.3	52%	48%
English Language Teaching	28.5	27.5	1.0	4%	-3%
Digital Marketing and Events	38.2	36.8	1.5	4%	1%
Other	4.3	4.0	0.3	7%	1%
Total Revenue	587.1	598.1	-11.0	-2%	-5%
Direct Costs #	241.9	264.1	-22.2	-8%	-12%
Gross Profit	345.2	334.1	11.1	3%	0%
Overhead costs #	196.2	219.0	-22.8	-10%	-14%
Share of Profit/(Loss) of Associate	-0.3	0.0	-0.3	-1806%	-1636%
EBITDA #	148.6	115.0	33.6	29%	25%
Depreciation & Amortisation #	37.7	15.0	22.7	151%	145%
Amortisation of Acquired Intangibles	3.2	2.9	0.3	11%	6%
EBIT	107.8	97.1	10.6	11%	7%
Net finance expense #	-5.2	-1.7	-3.4	-198%	-192%
Profit before tax	102.6	95.4	7.2	8%	4%
Income tax expense	34.8	29.1	5.7	20%	18%
NPAT	67.8	66.3	1.5	2%	-2%
NPATA ***	70.4	68.6	1.7	3%	-1%

• Revenue growth of 19% for the 9 months to 31 March 20 reflected continuation of strong organic growth. Q4 revenue down 64% v pcp due to COVID-19
• Full year revenue growth of 52% for multi-destination student placement reflects strong market share performance by IDP
• Australian student placement revenues impacted by effective cancellation of Australian second semester intake, the majority of which would normally be booked in H2
• IELTS revenue down 39% in H2 reflecting widespread lockdowns in IDP's offshore testing markets
• Strong margin performance despite Q4 headwinds reflect variable nature of IELTS cost base and disciplined overhead cost control
  o Total FY20 EBIT margin 18% v 16% in FY19
• Abnormal effective tax rate in H2 of 46% driven by write-off of deferred tax assets. A normalised tax rate delivers 8% NPAT growth for FY20
• No final dividend declared but interim dividend of 16.5cps declared on 12 February will be paid on 24 September

• IDP adopted AASB16 Leases from 1 July 2019. The financial information for FY20 has been presented on post AASB16 basis and comparatives have not been restated. The impact of AASB16 on the aggregate results for FY20 is presented on page 22

• The impact of AASB16 on these line items are shown on page 22

• "Constant Currency Growth" is calculated by restating the prior comparable period's financial results using the actual FX rates that were recorded during the current period
• NPATA is NPAT adjusted by adding back the non-cashpost-tax charges relating to the amortisaton of acquired intangible assets.

13 | FY20 Financial Results | 20 August 2020

Disciplined Cost Reduction

Appropriate cost reductions without impacting size and quality of talent pool

Operating Costs Over time*

125

114			•	Pro-active and disciplined cost reduction initiatives actioned
105				across the business
				•	Overhead costs per month averaged A$15m in H2, down 28%
94	90			from the A$21m average in H1
86
		•	Overhead costs for last four months of year averaged $12.5m per
					month

A$m			• Actions designed to ensure talent base is preserved for eventual
		rebound
				• The programs that were implemented included
				o Temporary 20% salary reduction
				o Hiring freeze for non-strategic initiatives
				o Reduction in bonuses due to lower performance
				o Rent relief negotiated with landlords
				o Trimming of marketing programs
				o Effectively all travel cancelled

FY18		FY19				FY20
		Employee Costs		Occupancy		Promotion &		Other
						Publicity

• Presented on a pre-AASB16 basis to ensure comparability over time 14 | FY20 Financial Results | 20 August 2020

Key Operating Metrics

Results show the benefits of a diversified multi-destination model

Summary of Key Operational Metrics

	Full Year Actuals	Growth	Constant
					Currency
Twelve Months to 30 June	FY20	FY19	'000s / $	%	Growth (%)**
Volumes (000s)
English Language Testing	1,095.6	1,283.2	-187.6	-15%
Student Placement	51.0	49.6	1.4	3%
-Australia	24.2	28.6	-4.4	-15%
-Multi-destination	26.8	21.0	5.8	28%
English Language Teaching Courses	94.4	94.2	0.2	0%
Average Test Fee (A$)
English Language Testing Fee	297	280	17	6%	1%
Average Application Processing Fee (A$)
Student Placement APF	3,740	3,435	305	9%	8%
-Australia APF	3,742	3,654	88	2%	2%
-Multi-destination APF	3,738	3,137	601	19%	16%
Average Course Fee (A$)
English Language Teaching Course fee	302	292	10	3%	-4%

• "Constant Currency Growth" is calculated by restating the prior comparable period's financial results using the actual FX rates that were recorded during the current period

Volumes

• IELTS volumes impacted by broad-based test centre closures despite market share gains
• Student placement volumes in H2 down 27%, offsetting 30% growth in H1
• Australian student placement volumes impacted by effective cancellation of second semester intake
• Multi-destinationvolume in H2 declined 7% vs pcp

Average Price

• IELTS average price increase of 6% includes 5% FX benefit, 1.5% from price increases in markets we operate, offset by reduction in BC license fee
• Student placement average price increase primarily reflects commission rate increases negotiated in past periods and study sector mix impacts

15 | FY20 Financial Results | 20 August 2020

Strong Margin Performance

Rising GP Margins highlights variable cost nature of IELTS

Total Gross Profit Margins

• Continuation of strong GP margin performance

• H2 FY20 GP margins 4.0% above H2 FY19 delivering a 2.9% increase for the full year

• IELTS, student placement and digital marketing & events all increased GP margin in H2

• IELTS margin supported by lower testing costs in India as efficiency improvements were realised, increases in average price in key markets offset by the impact of the BC China license fee reduction in H2

• Student placement margin was held steady at 81.4% with an increase in H2 vs H1 due primarily to lower subagent commission in China, higher volume and average price from India multi-destination placements offsetting the increased investment in the support of the digital platform

• Digital marketing and events margin improvement was due to the lower cost of virtual events run during the COVID-19 lockdowns

• English language teaching margins impacted by school closures in Vietnam and Cambodia during COVID-19 lockdowns causing a small decline in GP margin

FY18

FY19

FY20

16 | FY20 Financial Results | 20 August 2020

Consolidated Balance Sheet

Strong Balance sheet with $307m of cash and access to undrawn working capital facilities totalling $175m

As at 30 June 2020, A$ million	30-Jun-20	30-Jun-19	Change
Current assets
Cash and cash equivalents	307.1	56.1	251.0
Trade and other receivables	68.4	68.6	-0.2
Contract assets	23.6	32.5	-8.9
Other current assets	30.1	28.0	2.1
Current assets	429.2	185.2	244.0
Non-current assets
Intangible assets	128.6	133.8	-5.2
Rights-of-use assets *	82.6	0.0	82.6
Other non-current assets	61.5	50.4	11.1
Non-current assets	272.7	184.2	88.5
Total assets	701.9	369.4	332.5
Current liabilities
Trade and other payables	57.3	92.7	-35.4
Dividends payable	42.0	0.0	42.0
Contract liabilities	37.8	34.2	3.6
Lease liabilities *	17.3	0.0	17.3
Current tax liabilities	3.7	2.8	0.9
Other current liabilities	12.2	12.1	0.1
Current liabilities	170.3	141.8	28.5
Non-current liabilities
Borrowings	59.8	60.4	-0.6
Lease liabilities *	67.3	0.0	67.3
Other non-current liabilities	11.6	13.2	-1.6
Non-current liabilities	138.7	73.6	65.1
Total liabilities	309.0	215.4	93.6
Total equity	392.9	154.0	238.9

Cash

• Cash balance of A$307m reflects A$27m reduction relative to 29 Feb 20 pro-forma post equity raise
• Cash outflows during the period include ~$44m to Cambridge for December 19 and March 20 quarterly IELTS fees

Borrowings

• Drawn borrowings balance as at 30 June 20 of A$59.8m primarily reflects Hotcourses acquisition facility
• Working capital facilities of A$175m remain undrawn
• Interim dividend of A$42m declared in February 20 payable in September 20
• Net cash position (after dividend payment) of A$205m

Contracts Assets

• • Reduction in contract assets reflect invoicing and subsequent payment by institutions of previous student placement revenues along with lower student placement revenue during the period
• IDP adopted the new lease accounting standard, AASB16 Leases from 1 July 2019. Right-of-use assets and lease liabilities are recognised on the adoption. 30 June 2020 balance sheet is presented on post AASB16 basis and 30 June 2019 comparatives have not been restated as permitted by the standard.

17 | FY20 Financial Results | 20 August 2020

Summary

Summary

Digital transformation accelerated

• Investment in technology platform, digital and marketing capability enabled IDP to respond quickly to change
• New omni-channel services nurturing closer customer connections
• Investment in data science capabilities unlocking operational, product and insight opportunities

Disciplined capital management and cost control

• Equity raise and working capital facility strengthened IDP's balance sheet, enabling us to maintain our strength and sector leadership position
• Cost control measures to flex with market conditions
• Prioritised strategic capital expenditure
• Strong focus on retaining global talent

Structural demand drivers remain

• Clients relying on IDP Connect for trusted data insights and student engagement
• Positive momentum as IELTS centres reopen across the IDP network
• Students holding on to global study aspirations

19 | FY20 Financial Results | 20 August 2020

Appendices

20 | FY20 Financial Results | 20 August 2020

3% increase in volumes despite COVID-19 challenges

Rest of World, 4%

↑ 17%

Rest of Asia, 14%

• 10%

Hong Kong, 2%

• 0%

Indonesia, 2%

• 7%

UAE, 3%

• 10%

Up 3% v FY19

Vietnam, 5%

• 21%

Australia, 6%

• 14%

China, 21%

↓ 11%

NZ, 3%

USA, 5% ↑21%

↑ 50%

Canada, 22%

↑ 29%

India, 43%

• 18%

Up 3% v FY19

UK, 22%

↑ 22%

Australia, 47%

• 15%

21 | FY20 Financial Results | 20 August 2020

AASB16

Summary Income Statement pre and post AASB16

					Growth (FY20 pre	Constant Currency
Twelve Months to 30 June		FY20	FY19		AASB 16 vs. FY19	Growth (%) *
						pre AASB 16)	(FY20 pre AASB 16
	Post		Pre	Pre AASB 16	A$m	%	vs. FY19 pre AASB
	AASB16	AASB 16	16)
Total Revenue	587.1		587.1	598.1	-	11.0	-2%	-5%
Direct Costs	241.9		244.5	264.1	-	19.5	-7%	-11%
Gross Profit	345.2		342.6	334.1		8.5	3%	-1%
Overheads
- Employee benefits expenses	142.1		142.1	141.0		1.1	1%	-3%
- Occupancy expense	8.1		27.1	22.9		4.2	18%	13%
- Promotion and publicity expense	13.5		13.5	16.9	-	3.4	-20%	-24%
- Other expenses	32.6		32.6	38.2	-	5.7	-15%	-17%
Total Overheads	196.2		215.2	219.0	-	3.8	-2%	-6%
Share of Profit/(Loss) of Associate	-0.3		-0.3	0.0	-	0.3	-1806%	-1636%
EBITDA	148.6		127.0	115.0		12.0	10%	7%
Depreciation & Amortisation
- Lease Related	21.1		0.0	0.0		-	0%	0%
- Other expenses	16.5		16.5	15.0		1.5	10%	8%
Total Depreciation & Amortisation	37.7		16.5	15.0		1.5	10%	8%
Amortisation of Acquired Intangibles	3.2		3.2	2.9		0.3	11%	6%
EBIT	107.8		107.3	97.1		10.2	10%	7%
Net Finance Expense
- Lease Related	-4.5		0.0	0.0		-	0%	0%
- Other expenses	-0.7		-0.7	-1.7		1.0	60%	60%
Total net finance expense	-5.2		-0.7	-1.7		1.0	60%	60%
Income tax expense	34.8		35.1	29.1		6.0	21%	19%
NPAT	67.8		71.5	66.3		5.2	8%	4%
NPATA **	70.4		74.1	68.6		5.5	8%	4%

• "Constant Currency Growth" is calculated by restating the prior comparable period's financial results using the actual FX rates that were recorded during the current period
• NPATA is NPAT adjusted by adding back the non-cashpost-tax charges relating to the amortisaton of acquired intangible assets.

• IDP adopted AASB16 Leases from 1 July 2019. Comparatives have not been restated but the table opposite shows pre-AASB16 equivalents for a like- for like comparison
• Pre-AASB-16expense declined by 6% on a constant currency basis as cost reduction initiatives were actioned by management
• FY20 Post AASB-16 expense was $19m lower than Pre-AASB-16 expense as the office rental expenses were moved to the balance sheet. The future lease commitments were capitalised and will be amortised over the life of the leases
• The amortisation of the right of use assets (leases) of $21.1m excludes the deemed finance cost of $4.5m for those leases.

22 | FY20 Financial Results | 20 August 2020

Segmental Earnings

Strong growth in the key Asian markets

Revenue and EBIT by Geographic Segment

	FY20	FY19	Growth (FY20 pre AASB
	16 vs. FY19 pre AASB 16)
Twelve Months to 30 June	Post AASB16	Pre AASB 16	Pre AASB 16	$m	%
Revenue
Asia	389.2	389.2	391.8	-2.6	-1%
Australasia	57.4	57.4	63.3	-5.9	-9%
Rest of World	140.5	140.5	143.1	-2.5	-2%
Total Revenue	587.1	587.1	598.1	-11.0	-2%
EBIT
Asia	127.1	126.6	113.6	13.1	12%
Australasia	9.7	9.7	12.2	-2.5	-21%
Rest of World	29.4	29.6	30.1	-0.5	-2%
Total EBIT pre corporate costs	166.3	166.0	155.9	10.1	6%
Corporate costs	58.5	58.7	58.8	-0.1	0%
Total EBIT	107.8	107.3	97.1	10.2	10%

Revenue

• Asia segment decline in revenue mainly due to decline in IELTS and Australian student placement volume offset by strong multi-destination student placement
• Australasia segment decline mainly due to decline in IELTS volume with test centre lockdown due to COVID- 19
• RoW revenues declined due to lower IELTS volume caused with test centres lockdown offset by growth in MD student placement and digital marketing revenue.

EBIT

• Asia Segment growth in EBIT due to GP margin improvement and lower overheads.
• Australia segment decline in EBIT due to lower GP margin resulting from lower IELTS revenue.
• RoW decline in EBIT due to lower IELTS revenue offsetting growth in Digital marketing EBIT

23 | FY20 Financial Results | 20 August 2020

Product Category Summary

Aggregate gross margins up strongly relative to pcp

Revenue and GP by Product Segment

	Full Year Actuals	Growth		Constant
Twelve Months to 30 June	FY20	FY19	$m	%	Currency
Growth (%)*
Revenue
English Language Testing	325.5	359.6	-34.1	-9%	-14%
Student Placement	190.6	170.3	20.3	12%	11%
- Australia	90.4	104.3	-13.9	-13%	-14%
- Multi-destination	100.2	65.9	34.3	52%	48%
English Language Teaching	28.5	27.5	1.0	4%	-3%
Digital Marketing and Events	38.2	36.8	1.5	4%	1%
Other	4.3	4.0	0.3	7%	1%
Total Revenue	587.1	598.1	-11.0	-2%	-5%
Gross Profit
English Language Testing	145.7	154.5	-8.7	-6%	-11%
Student Placement	155.2	138.5	16.6	12%	11%
English Language Teaching	19.4	18.9	0.5	3%	-4%
Digital Marketing and Events	22.8	19.8	3.0	15%	14%
Other	2.2	2.4	-0.2	-8%	-12%
Total Gross Profit	345.2	334.1	11.1	3%	0%

• IELTS revenue is 14% below last year on a constant currency basis as a result of the restrictions in testing due to COVID-19, while gross profit margin improved as efficiency improvements were realised, average price increased, and AASB-16 lease costs moving to Depreciation.
• Student placement revenue is 11% above last year on a constant currency basis with lower Australian volume in H2 resulting from COVID-19, while multi-destination student placement recorded a strong volume increase to Canada, the UK and USA and large increase in average price. GP margin was steady with with an increase in H2 vs H1 due primarily to lower subagent commission in China, higher volume and average price from India multi- destination placements offsetting the increased investment in the support of the digital platform.
• Teaching revenue is 3% below last year on a constant currency basis due to school closures during lockdowns in Vietnam and Cambodia caused by COVID-19 and margins were similarly impacted by the school closures causing a small decline in GP margin
• Digital marketing and events revenue was 1% above last year on a constant currency basis with lower events revenue as physical events were moved to virtual events and that offset a 5% increase in digital marketing, while margin improvement was due to the lower cost of virtual events run during the COVID-19 lockdowns

24 | FY20 Financial Results | 20 August 2020

Cashflow

Reprioritised capital expenditure to strategic programs in line with transformation vision

Summary of cash flow

	Full Year Actuals		Growth
Twelve Months to 30 June	FY20	FY20	FY19	$m	%
	Post AASB 16	Pre AASB 16	Pre AASB 16
EBITDA	148.6	127.0	115.0	33.6	29%
Non-cash items	1.9	1.9	7.6	-5.7	-75%
Change in working capital	-35.4	-33.8	-17.5	-17.9	102%
Income Tax Paid	-31.6	-31.6	-29.2	-2.4	8%
Net interest paid	-4.9	-0.4	-1.2	-3.7	308%
Operating cash flow	78.6	63.1	74.7	3.9	5%
Payments for investment in associates	-1.8	-1.8	-0.7	-1.1	157%
Capital Expenditure	-22.4	-22.4	-19.7	-2.7	14%
Net cash flow before Financing	54.4	38.9	54.3	0.1	0%
Issue of new shares net of transaction costs	249.0	249.0	0.0	249.0	N/A
Proceeds from exercise of share options	0.6	0.6	4.9	-4.3	-88%
Payments for Treasury Shares	-17.9	-17.9	-1.9	-16.0	842%
Proceeds from Borrowings	14.0	14.0	14.7	-0.7	-5%
Repayment from Borrowings	-14.0	-14.0	-19.0	5.0	-26%
Repayment of lease liabilities	-15.5	0.0	0.0	-15.5	N/A
Dividend Payments	-19.1	-19.1	-47.1	28.0	-59%
Effect of FX on cash holdings in foreign currency	-0.5	-0.5	1.4	-1.9	-136%
Net Cash Flow	251.0	251.0	7.3	243.7	3338%

• GOCF* of $115.1m reflects 77% conversion from reported
  EBITDA
• Lower than normal cashflow conversion primarily reflects increase in working capital due to lower payables and accrual balance at 30 June 20 v pcp ($35m reduction)
• $9m capex payments during H2 v $13m in H1 reflect disciplined cash conservation in Q4. Capex was spent on network offices and test centres in H1, IT equipment refreshes, new procurement system, and CD IELTS modernisation program
• Capex of $5.9m was cancelled in H2 primarily related to student placement office expansion, CD test centre expansion, and Corporate systems

• Gross Operating Cash Flow (GOCF) calculated as Operating Cash Flow less Net Interest less Income Tax paid on a post AASB16 basis

25 | FY20 Financial Results | 20 August 2020