Strong revenue growth as SEEK pursues large revenue opportunity
SEEK FY19 Full Year Results
- Reported Revenue of A$1,537.3m (pcp: A$1,299.5m)
- Reported EBITDA of A$455.0m (pcp: A$431.2m)
- Underlying NPAT (excl. significant items, AP&A Other and SEEK Investments ESVs) of A$229.0m (pcp: A$228.5m)
- Reported NPAT of A$180.3m (pcp: A$52.2m)
Commenting on SEEK's FY19 results, SEEK CEO and Co-Founder Andrew Bassat said:
"SEEK is pursuing an aspirational revenue opportunity of cA$5b by FY25 and we made strong progress towards this in the last 12 months. Key FY19 highlights include good results in SEEK ANZ, SEEK Asia, Zhaopin and our ESV portfolio. These results were achieved despite a backdrop of weaker macro conditions and strong competition."
"AP&A continued to invest and innovate for long-term growth. SEEK ANZ achieved strong growth from its depth products which helped offset macro weakness. SEEK Asia delivered good revenue growth and is starting to see early integration benefits. In the years to come, deeper AP&A integration will increase the speed to market of new products which should support strong revenue growth over the medium to long-term."
"SEEK Investments is focused on managing and making investments to drive large capital returns over a 5+ year horizon. Despite softening macro conditions, Zhaopin achieved strong revenue growth in a competitive environment. In our portfolio of early stage ventures, we have invested in emerging leaders exposed to long-term structural trends. Our portfolio is performing well and achieved strong growth in operating metrics and look-through revenue growth of c65%."
ASIA, PACIFIC & AMERICAS (AP&A)
SEEK ANZ: Ongoing growth in financial results reflect benefits of re-investment
- Revenue growth of 7% and EBITDA growth of 8% despite weaker H2 conditions
- Market leader with c34% of placements, lead of c6x times over our nearest competitor
SEEK Asia: Continuing growth in Revenue and EBITDA alongside early integration benefits
- Revenue growth of 9% and EBITDA growth of 11% (constant currency)
- Starting to see results from early AP&A integration
Andrew Bassat commented, "SEEK ANZ delivered continued growth, highlighted by a 26% increase in depth revenue. The strong depth result was due to sustained investment in prior years and helped to counter the impact of weak H2 ad volumes. We are confident that our future strategies focused on aligning price to value and product set expansion will open up large new revenue pools."
"The strength and resilience of ANZ's business model gives us optimism that our capabilities, products and key learnings can be applied to help accelerate SEEK Asia's evolution."
"SEEK Asia delivered good financial and operational results. There is more work to do to grow SEEK Asia's product and service offerings and we are confident that deeper AP&A integration will accelerate this process. In Latin America, we are seeing improvement in marketplace metrics but this has not yet led to improved financial results."
Zhaopin: Strong revenue growth alongside growth in market share
- Record results with strong revenue growth of 34% (constant currency)
- Strong revenue growth across core and adjacent businesses
OES: Solid revenue growth alongside scaling up multiple new partnerships
- Revenue growth of 7% despite the regulatory constraints on Australian undergraduate courses
- Solid progress in scaling up several new education partnerships (Western Sydney University, QUT and in the UK)
ESVs: Strong growth in operating metrics, revenue and overall portfolio valuation
- Key investments delivering rapid growth in operating metrics
- "Look-through" revenue growth of c65% and a portfolio valuation of A$425m
Andrew Bassat commented,
"Zhaopin delivered record financial results and grew hirer market share. Strong revenue results were achieved in our core and adjacent businesses. Our near-term financial results will be impacted by weak macro conditions, however our focus will remain on investing to build sustainable market leadership in what is expected to be the world's largest human capital market."
"OES delivered a solid financial result given the constraints of funding caps on Australian undergraduate courses. OES made good progress in scaling up Western Sydney University and is making good but early progress in scaling up its next suite of new partners being QUT and two UK universities."
"Our portfolio of emerging leaders in online education, online contingent labour and HR SaaS is focused on growing market share in large addressable markets. The portfolio delivered strong look-through revenue growth of c65% alongside good results in unit economics. Our results to date have emboldened us to continue investing in our current portfolio and to pursue new investments within these themes."
H2 19 DIVIDENDS | 22 cents per share in line with pcp
- H2 dividend will be paid on 3 October 2019 with a record date of 12 September 2019
- Dividend pay-out ratio to be revised in FY20 to better align with our growth aspirations
- Refer to slide 13 of SEEK's FY19 Results Presentation
OUTLOOK | FY20 guidance
FY20 Guidance (excl. significant items)
- Revenue growth in the range of 15% to 18% (FY20 v FY19)
- EBITDA growth in the range of 8% to 11% (FY20 v FY19)
- D&A in the range of A$135-A$140m
- Reported NPAT in the range of A$145-A$155m
Further detail explaining key differences between FY20 and FY19 Reported NPAT is provided on slide 32 of SEEK's FY19 Results Presentation.
In conclusion Andrew Bassat commented,
"Volatile economic conditions may impact our near term results but this will not impact SEEK's focus on investing to grow long-term shareholder value. We remain focused on our approach of investing aggressively to capture large revenue opportunities alongside growing our overall defensibilty."
"Across the SEEK Group, we see many opportunites to deploy capital at high rates of return and in areas where we have a proven track record. Shareholders should expect the majority of our additional capex to be deployed towards our highest performing businesses being SEEK ANZ, SEEK Asia and Zhaopin. We will also deploy capital to accelerate growth in our ESV portfolio. If we execute well, we expect to generate strong returns for our long-term shareholders."
ANNUAL GENERAL MEETING
In accordance with ASX Listing Rule 3.13.1, SEEK Limited advises that its Annual General Meeting will be held in Melbourne, Victoria on 26 November 2019.
To view the release with footnotes, please visit:
To view the FY19 Full Year Results Presentation, please visit:
To view the FY19 Full Year Statutory Accounts, please visit:
About SEEK Limited
SEEK Limited (ASX:SEK) (OTCMKTS:SKLTY) is a diverse group of companies, comprised of a strong portfolio of online employment, educational, commercial and volunteer businesses. SEEK operates across 18 countries with exposure to over 2.9 billion people and approximately 26 per cent of GDP. SEEK makes a positive contribution to people's lives on a global scale. SEEK is listed on the Australian Securities Exchange, where it is a top 100 company with a market capitalisation close to A$6billion and has been listed in the Top 20 Most Innovative Companies Globally by Forbes, and Number One in Australia.