Seek Annual Report 2019
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SEEK ANNUAL REPORT 2019 We help people live more fulfilling and productive working lives and help organisations succeed. Making a positive impact on a global scale A strong international portfolio of employment and education businesses A market leader in online employment marketplaces with 215m+ deep and rich insights into the Candidate relationships future of work A presence in 18 countries including China and across South-East Asia and Latin America Creating world-class products 1.1m+ through ongoing investment into Hirer relationships AI and technology Employing 1,000 people in Australia and 10,000+ around the world Creating a culture of innovation, 2.9bn empowerment and collaboration Population exposure Australian owned and operated 51m+ Students and learners Our unified purpose helps people live more fulfilling and productive working lives and helps organisations succeed. United Kingdom China Hong Kong, Malaysia, Mexico Singapore, Thailand, Nigeria Indonesia, Philippines and Vietnam Bangladesh Kenya, Uganda and Tanzania Brazil Australia New Zealand Asia Pacific & Americas SEEK Investments ii SEEK Limited Annual Report 2019 This report covers SEEK Limited as a consolidated entity consisting A description of the nature of the consolidated entity’s operations of SEEK Limited (the Company) and its controlled entities. The and its principal activities is included in the review of operations and Financial Report was authorised for issue by the directors on activities in the Directors’ Report on pages 4 to 40. 20 August 2019. The Company has the power to amend and reissue Through the use of the internet, we have ensured that our corporate the Financial Report. reporting is timely, complete and available globally at minimum cost SEEK Limited is a company limited by shares, incorporated and to the Company. All ASX Announcements, reports, presentations and domiciled in Australia. Its registered principal place of business is: other information are available at our Investor Centre on our website at www.seek.com.au/about/investors/. Level 6 541 St Kilda Road MELBOURNE VIC 3004 Contents iii Contents Message from the Chairman & CEO iv Directors’ Report 4 Letter from Remuneration Committee Chairman 21 Remuneration Report 23 Auditor’s Independence Declaration 41 Sustainability Report 42 Corporate Governance Statement 59 Consolidated Income Statement 68 Consolidated Statement of Comprehensive Income 69 Consolidated Balance Sheet 70 Consolidated Statement of Changes in Equity 71 Consolidated Statement of Cash Flows 72 Notes to the Financial Statements 73 Directors’ Declaration 128 Independent Auditor’s Report 129 Shareholder Information 136 Five Year Financial Summary 138 Corporate Directory IBC iv SEEK Limited Annual Report 2019 Message from the Chairman & CEO Welcome to the Dear Shareholder, 2019 Annual Report The 2019 financial year (‘FY2019’) was another successful year for the SEEK Group (‘Group’) as we continued to deliver on our purpose of helping people live more fulfilling and productive working lives and helping organisations succeed. Despite some challenging macro-economic conditions across our key markets, the Group achieved strong financial results while continuing to invest across AP&A and SEEK Investments, including our Early Stage Ventures. We also outlined our progress against our key strategic priorities as we aggressively pursue our long-term aspirations. SEEK is well placed to pursue these aspirations given the strength of its businesses, strong capabilities and track record of execution. Message from the Chairman & CEO v Delivering on our Purpose We continue to invest aggressively, stepping up investment levels in product & technology in our highest performing businesses, SEEK’s purpose of “Helping people live more fulfilling and and into high ROI initiatives. productive working lives and helping organisations succeed” guides everything we do and we are pleased with the progress We anticipate that there will be a lag period before this we are making on a global scale: investment translates into financial returns and our past experience shows that this can take some years. As such, • SEEK’s Asia Pacific & Americas (‘AP&A’) business has through this investment period, we are under-earning, but we relationships with over 40 million candidates and 200,000 remain very confident that it will improve SEEK’s defensibility, hirers. Our teams are now working more closely together profitability and result in growth in shareholder value over time. to solve common problems at a faster pace for candidates and hirers. Strong revenue result alongside strategic investment • SEEK Investments has relationships with over 175 million SEEK delivered a solid financial result with sales revenue of candidates and over 900,000 hirers, and is investing $1,537.3m, EBITDA of $455.0m and NPAT of $184.8m, before aggressively to capture large market opportunities across significant items. Group cash flows remain strong and supported employment, education and the broader human capital total FY2019 dividends of 46 cents. management market. Asia Pacific & Americas Key achievements in FY2019 The AP&A structure has been in place for 18 months and we We are proud of SEEK’s achievements over the last 12 months, are seeing some positive signs from leveraging ANZ’s capability, including: product and people into SEEK Asia. There is a lot more work 1. Significant progress towards our key strategic priorities; to be done, but with continued investment over the next two or three years and strong execution, we are confident we are 2. Delivering strong revenue results as a result of strategic positioning AP&A to capture the significant opportunity that we investment, despite subdued macro-economic conditions; see over the long-term. and 3. Making a positive social contribution beyond our day-to-day SEEK ANZ continues to be a clear market leader, business activities. achieving revenue growth of 7% despite weak macro- economic conditions. We have provided more detail below across each of these headings. • We were particularly pleased by strong revenue contribution from depth products, which helped offset some macro Progress towards key strategic priorities weakness and validates our prior period investment in new products and services. Earlier this calendar year we discussed our $5 billion aspirational revenue opportunity by FY2025 which we believe is achievable if • Our success to date gives us the confidence to continue we execute well. investing, and our strategies focused on aligning price to value and product set expansion will, we expect, unlock significant There are five key headings that will drive us towards this target revenue opportunities. being SEEK ANZ, SEEK Asia, Zhaopin, Online Education Services (‘OES’) and our Early Stage Ventures. Within each of these SEEK Asia delivered good revenue results and is seeing headings we have a strategy in place and our teams are very positive results from AP&A initiatives focused on delivering strong outcomes in these areas. • Revenue result of 9% growth (constant currency) against In order to achieve the $5 billion aspirational revenue target, we a backdrop of slowing macro-economic environment and require a compound annual growth rate of approximately 20% strong competition. from FY2018 to FY2025 and we feel validated by the fact that in • Positive results from AP&A’s first wave of initiatives which is FY2019 we delivered 18% revenue growth despite some macro- supporting growth in key marketplace metrics. economic softness in our major markets. • We still have a long road ahead to bring SEEK Asia to the Specifically in FY2019, key achievements included: current SEEK ANZ baseline, and this will require sustained investment. We are confident about the future operational • AP&A: laying the foundation for aligning price to value in SEEK and financial benefits from this investment, providing we ANZ and good progress with the SEEK Asia integration. execute well. • SEEK Investments: ongoing improvements to the freemium model in Zhaopin and signing three additional partners in OES. Across our Early Stage Ventures portfolio we deployed $185m into new businesses including FutureLearn and Coursera. vi SEEK Limited Annual Report 2019 Latin America delivered weak results amidst Making a positive contribution beyond SEEK’s day-to-day challenging conditions business activities • Brasil Online and OCC’s results were broadly anticipated due SEEK continues to make a positive contribution to society in to challenging conditions. many ways and is proud to be able to contribute both financially • Both businesses will deploy more of their own capital to and “in kind” through the efforts of our employees. In addition to improve their product offerings, and we believe that this along our core purpose, we also engage in activities such as: with better execution and more favourable macro-economic conditions will drive improved operating and financial results. SEEK Volunteer Operating for the past 19 years, SEEK Volunteer in partnership SEEK Investments with Volunteering Australia is an online platform connecting volunteers to opportunities. Across Australia and New Zealand, Zhaopin delivered strong financial results and grew SEEK Volunteer is the largest source of volunteer opportunities market share online, helping over 130,000 potential volunteers connect with • Zhaopin delivered revenue growth of 34%, but in line with over 10,000 registered volunteer organisations in FY2019. online peers saw softer online billing growth in H2 FY2019