2020 Integrated Report Stadio Registered As a New Private Higher Education

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2020 Integrated Report Stadio Registered As a New Private Higher Education 2020 INTEGRATED REPORT STADIO REGISTERED AS A NEW PRIVATE HIGHER EDUCATION HIGHLIGHTS “ A NEW VISION IN HIGHER EDUCATION” INSTITUTION STUDENT 26 OCTOBER NUMBERS SUCCESSFUL 2020 INCREASED BUSINESS OFFICIAL 10% TRANSFER INTO BRAND STADIO LAUNCH OF STADIO TO 35 031 ADJUSTED REVENUE * INCREASED EBITDA INCREASED 14% 29% 14% TO R933M TO R253M CORE HEADLINE EARNINGS** CORE HEPS** INCREASED INCREASED 33% 31% TO 14.2 CENTS TO R117M APPOINTMENT * Earnings before interest depreciation and amortisation (EBITDA) was adjusted to exclude the fair value adjustment in respect of OF DR VINCENT the CA Connect acquisition. MAPHAI AS ** Core Headline Earnings reflects Headline Earnings adjusted for CHAIRPERSON OF certain items that, in the Board’s view, may distort the financial results from year-to-year, giving management a more consistent THE BOARD reflection of the underlying financial performance of the Group. 2020 ACADEMIC YEAR STUDENT COMPLETED IN DROP-OUT RATES 2020 DECREASED MODULE SUCCESS RATE INCREASED ACCREDITATION OF 2 NEW DOCTORATES IN MANAGEMENT AND POLICING THE GROUP HAS 95 ACCREDITED QUALIFICATIONS AND 35 PIPELINE PROGRAMMES COMMENCED CONSTRUCTION CAMPUSES, 14 OF STADIO CENTURION, SUPPORT OFFICES 2 1ST MEGA- CAMPUS CONTENTS 2 About this Report OVERVIEW 3 Chairperson’s report 01 5 CEO’s report 8 Tribute to our Former Chairperson 9 The Group at a glance 14 Our Market OUR 17 Our Strategy 02 BUSINESS 19 Material Matters 21 Business Model 23 Risks and Opportunities 29 Our Institutions 40 Performance against our Strategic Objectives OUR 43 Value created for Stakeholders 03 PERFORMANCE 47 Sustainability Report 53 Academic Report 59 Financial Report 68 Summary Financial Statements 80 Governance Overview OUR 81 Board of Directors 04 GOVERNANCE 85 Governance Structure and Activities 92 Audit and Risk Committee Report 95 Remuneration Report 108 Shareholder Analysis GENERAL 110 Corporate Information 05 INFORMATION 111 Glossary of Terms OUR OUR OUR GENERAL OVERVIEW BUSINESS PERFORMANCE GOVERNANCE INFORMATION VISION INSPIRING CONFIDENT EMPOWERED STADIO HOLDINGS 2020 INTEGRATED REPORT 01 OVERVIEW 1 STADIO HOLDINGS 2020 INTEGRATED REPORT OUR OUR OUR GENERAL OVERVIEW BUSINESS PERFORMANCE GOVERNANCE INFORMATION ABOUT THIS REPORT Stadio Holdings Limited (STADIO Holdings) is proud to present A glossary of terms used throughout this Report is also included its Integrated Report for the year ended 31 December 2020 on pages 111 to 113. (this Report). This Report incorporates information pertaining to STADIO Holdings and its subsidiaries (the Group). The 2020 Integrated Report will not be printed, but instead is available to all stakeholders on the STADIO Holdings’ website, Integrated thinking is intrinsic to how we manage our business, www.stadio.co.za. This is in line with our continued effort to support to our internal strategy development, and to our reporting practices environmental initiatives wherever possible. The consolidated and is evident in how we managed, and continue to manage, Annual Financial Statements for the year ended 31 December the challenges posed by the COVID-19 pandemic. 2020, which were approved by the Board on 12 March 2021, and all supplementary reports are also available on our website. This Report has been prepared for the benefit of all our stakeholders (with a focus on providing relevant information to FORWARD-LOOKING STATEMENTS our investment community) and provides a holistic overview of This Report may contain certain statements about the Group the Group’s strategy, our performance against this strategy for that may constitute forward-looking statements. By their nature, the year and overall creation of value for stakeholders during the forward-looking statements involve risks and uncertainties because year. This Report also looks at how risks were managed over the they relate to events and depend on circumstances that may or may year as well as what risks exist in achieving our strategy and value not occur in the future. The Board cautions users that forward- creation for stakeholders over the short-, medium- and long-term. looking statements are not a guarantee of future performance. Actual results, financial and operating conditions, liquidity and the MATERIAL MATTERS developments within the industry in which the Group operates We consider a matter to be material if it has, or may have, may differ materially from those made in, or suggested by, a material impact on our ability to execute our strategic priorities the forward-looking statements contained in this Report. and to create value in the short-, medium- and long-term for our stakeholders. The material matters detailed on pages 19 to 20 of APPROVAL AND ASSURANCE OF this Report were informed by those matters discussed by the OUR REPORTS Board and its committees during the year and which were taken into account when formulating the strategic priorities of the Group. The Audit and Risk Committee reviewed the 2020 Integrated Report and recommended it to the Board for approval. REPORTING FRAMEWORKS AND The Board acknowledges its responsibility for overseeing the COMPARABILITY integrity and completeness of the 2020 Integrated Report and in doing so, has considered the Group’s operating environment, In compiling this Report, we have been guided by the principles and strategy, and value creation model in this process, as well as the requirements contained in the International Financial Reporting unmodified audit opinion issued by PricewaterhouseCoopers Inc. Standards (IFRS), the International Integrated Reporting on the consolidated Annual Financial Statements. Elements of the Council (IIRC) Framework, the King IV Report on Corporate information included in this Report were verified by a combination GovernanceTM for South Africa, 2016 (King IVTM), the Listings of internal and external assurance specialists. Requirements of the JSE Limited (JSE) and the requirements of the Companies Act of South Africa (the Companies Act). The Board has applied its mind to the 2020 Integrated Report and The sustainability aspects of this report have been compiled with believes that the 2020 Integrated Report addresses all material reference to the Global Reporting Initiative (GRI) Standards. matters that have, or could have, a material effect on the Group’s ability to create value, and this Report presents a fair and balanced NAVIGATION OF OUR REPORT account of the Group’s performance. The 2020 Integrated Report To assist users to understand our integrated thinking and to was approved by the Board on 30 April 2021. illustrate connectivity throughout this report, we make use of various icons as depicted below. Dr Vincent Maphai Mr Chris Vorster Chairperson Chief Executive Officer Widening access World of work Student centredness 30 April 2021 30 April 2021 STADIO HOLDINGS 2020 INTEGRATED REPORT 2 CHAIRPERSON’S REPORT “Education is critical for the future of our country, and the achievement of the Group’s purpose, ‘To empower the nation by widening access to higher education’, is both a moral and financial imperative for South Africa, one in which the commercial benefit for the Group will follow.” WIDENING ACCESS 3 STADIO HOLDINGS 2020 INTEGRATED REPORT OUR OUR OUR GENERAL OVERVIEW BUSINESS PERFORMANCE GOVERNANCE INFORMATION 2020 was an unprecedented year. Companies, and individuals, higher education for more students whilst ensuring the quality had to be flexible and be able to adapt in order to endure. of its academic offerings is enhanced and at the same time, I am proud to say that STADIO Holdings not only adapted allowing the Group to enjoy synergies that will come through but made the most of this challenging time by adjusting its the implementation and use of shared services. business model and strategic focus as required. All teaching and learning moved online, all staff worked remotely and even Education is critical for the future of our country, and the Board members got used to engaging with each other through achievement of the Group’s purpose, “To empower the nation electronic Board meetings. Despite the challenges presented by widening access to higher education”, is both a moral by COVID-19, the Group was successful in completing the and financial imperative for South Africa, one in which the 2020 Academic year within the 2020 calendar year and commercial benefit for the Group will follow. grew student numbers by 10%, with core headline earnings growing by 33%. I joined the STADIO Holdings Board as chairperson on 16 July 2020, and it is truly exciting to be part of a company 2020 was a year where, despite navigating the uncertainty that can make a lasting difference and contribute to the and trials of COVID-19, management laid the foundations development of our nation, and the lives of many individuals. on which to grow the Group in the future. This was evident I also believe that STADIO can be a leader in higher education. in the achievement of one of STADIO Holdings’ strategic imperatives, namely, the registration of STADIO Proprietary I wish to thank my fellow Board members for their robustness Limited (STADIO) as a new private higher education and dedication over the past year, as well as the highly capable institution, and the amalgamation of the underlying management team for their efforts in navigating a year that subsidiary institutions into this single integrated provider. none of us will forget any time soon. Considering the individual offerings and needs of the underlying subsidiary institutions, the decision was taken to house four of the underlying six
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