Key challenges & lessons learned

Material matters, risks and opportunities

Our Board takes full accountability for the management of material matters which are also our significant risks and opportunities in Honoris. Our Executive Committee approves these as part of our business planning before the Board endorses them. They are assessed continuously to ensure that our strategy remains relevant in an evolving operating environment. We identify the material matters/risks and opportunities that are or have the potential to significantly impact our ability to deliver on our strategy and deliver sustainable value over the short, medium or long term for our stakeholders. Despite the radically heightened external risk environment, the outcomes and state of the management of our risks and opportunities demonstrates Honoris’ agility and effectiveness. It is our intention to mature our risk management practices and processes in the short to medium term – which will largely see further formalization.

Honoris has been resilient throughout COVID-19 and has pivoted its strategic focus, business operations and risk strategy successfully, in light of the significant risks in this unprecedented environment. >>read more

Oussama Trabelsi, Chief Financial Officer

“Through education, countries across Africa have the potential to uplift and transform the continent for economic prosperity. With education being the single most important tool to change the future of Africa, we have a responsibility to provide quality education that is accessible and affordable, to develop the future leaders of Africa who in turn positively impact their families, business and communities. We will continue to grow the network by investing responsibly to expand our reach and touch many more lives , not only locally, but regionally and worldwide.”
Oussama Trabelsi



Risk is Increasing Risk is Reducing Risk is Stable New Risk

Risk 1:

Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
Liquidity Risk
  • Maintaining sufficient liquidity to withstand all kinds of stress events that could potentially be faced
  • Financial
  • Spread risk - Maximize financing of debt in local countries
  • Centralized treasury management strategy and process
  • Deal with high rated banks, local or international banks
  • Retain high levels of cash
  • Short term investments with highly rated banks (locally and internationally)
  • Sound and high focus on credit risk/debtor control with management KPIs
  • Leverage debt in local environments for the financing of acquisitions
  • Formal strategies, policies, practices to manage currency risk (e.g., cash repatriation/strong currency retention i.e. not converted to local currency)
  • Honoris anticipates in the short, medium and long term in an environment of ongoing M&A and day-to-day operations that through the strong treasury and cash management strategies and processes, the liquidity risk will remain low
Strategic objective impacted by risk
  • Performance


Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
Credit Risk
  • Failure by a student, parent, organization etc to repay or meet student fee obligations and Honoris (and institutions it comprises) does not receive the amount owed and results in an interruption of cash flows and increased costs for collection
  • Financial
  • Pricing aligned to affordability of markets Honoris serves
  • Weekly reviews of debtor balances for each institution
  • Follow closely the age of each debtor
  • Dedicated team to manage credit risk/collections
  • Monitoring and flags raised for concerns where these exist/arise
  • Strict rules for accounting, provisions, collections etc
  • P&L performance impact for staff
  • It is anticipated that in the short, medium and long term that the focus on collections will remain as unemployment levels (exacerbated by the effects of COVID-19) increase and therefore ability of some debtors to pay is threatened
  • Performance

Risk 3:

Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
Currency volatility/ depreciation Risk
  • A combination of economic fundamentals, political instability, interest rate differentials etc causes currency volatility/depreciation and a resultant fall in values of currencies in terms of their exchange rates versus other currencies making investment decisions more difficult because volatility increases exchange rate risk
  • Exchange rate risk refers to the potential to lose money because of a change in exchange rate
  • Financial
  • Maximize strongest currency
  • Diversification strategy
  • Hedging
  • Repatriation of cash:
    • Upstream profit to the center (treasury/cash management system)
    • All excess cash converted to USD$ and repatriated/upstream to group where possible and kept in USD$ in group company
    • Leverage financing of acquisition of institutions (use cash at group and leverage debt component locally i.e. local currency financed with local debt)
  • Consider acquisition and structure accordingly (maximise local and minimise foreign)
  • Avoid double impact (high financing costs and exchange rate losses)
  • Preserve strong currency received in local operations (eg foreign students paying in USD$ - keep in strong currency and upstream to group when required)
  • No dependency on one country - Diversified group (11 countries)- FX risk therefore not concentrated
  • Focussed attention on currency risk at group and at institutions
  • Currency risk will continue in the short, medium and long term given the deliberate strategy to invest and operate in countries where currency volatility exists
  • Performance


Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
COVID-19 pandemic evolution and its social, political and economic impact
  • The outbreak of a global virus caused a COVID-19 pandemic resulting in massive impacts on ordinary life, safety and wellbeing of people, business interruption, new ways of work and requiring accelerated business transformation/change
  • Financial
  • Social and Relationship
  • Human
  • Successful acceleration of digitization and digitalization strategy
  • COVID-19 Crisis Committee established and operating
  • Agile switch from classic mode of educational delivery to online learning and blended learning environments (accelerated/transformation quicker)
  • Significant investment in alternative delivery of education / interaction with students , staff and faculty through virtual channels ensuring minimal disruption (no days lost)
  • Deployment of effective business continuity
  • Student and staff support through effective communication, social media campaigns and counselling services through lockdown restrictions
  • It is with some certainty that it is anticipated that all businesses will experience the ongoing requirements to transform and manage rapid change being brought about by the advancement ofdigital strategies, investment in digital systems and enablers
  • As new variants of the virus continue to occur, health and safety of people as well as associated legislative requirements are likely to remain, hence the COVID-19 Crisis Committee will stay in place
  • Digitalization

Risk 5:

Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
Regulatory (loss of curricula, accreditation)
  • New requirements and regulations, failure to maintain already locally and internationally recognized accreditation or disapproved curricula can hinder continuity of business, impact offering and reputation of the group, resulting in increased efforts for re-accreditation to demonstrate minimum achievement of requirements
  • Financial
  • Social and Relationship
  • Intellectual
  • Strive for both local and international accreditations thereby strengthening the reputation of Honoris
  • Strong academic quality teams that deploy processes systems etc to ensure 100% compliance with requirements
  • All institutions are encouraged to obtain international accreditation (confirmation of high standards and academic quality and process)
  • Encourage leaders to be present in committees – government, education unions etc (anticipate/be aware and drive and influence where possible)
  • Prepare for regular audits to maintain accreditations
  • Strive to achieve 100% compliance to accreditation standards
  • Changes to regulation will persist in the future so ongoing focus will remain with the same amount of rigour being applied in the compliance therewith
  • Expansion
  • Performance


Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
Political instability risk (most recently in SA and Tunisia)
  • Incidents of rioting, boycotts, social unrest, contentious elections etc give rise to political instability, violence and uncertainty resulting in threats to security of people, assets and investments, GDP, inflation, decrease of investor confidence and foreign direct investment, etc
  • Financial
  • Social and Relationship
  • Human
  • Deliberate investment and diversification strategy
  • Lobbying to influence
  • Education as a long term contributor to social upliftment and ultimately more political stability
  • Focus on political risk internally and with external advisors to advise on:
    • Risk appetite
    • Investment regulation changes
    • Responsible/prudent investment decisions
    • Security (physical, assets, students)
  • Preserve, monitor, internal and external developments
  • Lobbying with external stakeholders
  • Leaders encouraged to be present to influence, be aware and connected
  • Business Continuity Management
  • Digitization, digitalization strategy to prevent disruption (business and academic processes)
  • Political instability risk is likely to persist where Honoris operates. Generally political risks exist in emerging markets (Africa particularly). Investors know this. Deliberate investment strategy will continue in these markets with the necessary oversight by Investment Committees and ongoing impacts monitored
  • Performance

Risk 7:

Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
Aggressive competition
  • Increased interest in the education sector by investors etc as well as the demand for tertiary education causes aggressive competition amongst new entrants to the market as well as existing education providers with resultant pricing pressures from traditional or digital competitor channels etc
  • Competition and war for talent could impact retention of critical skills (refer risk 8)
  • Financial
  • Human (see risk 8)
  • Ongoing research and analysis of appropriate pricing linked to purpose of providing accessible and affordable offerings
    • Invest and refresh existing courses
    • Add new courses and programs so offering remains topical
    • Answer market needs (employability)
    • Pricing focus (correct and affordable to Honoris markets)
    • Cost control focus (reviews, operational KPI’s, etc)
    • Investment in digital products – item for differentiation – platform could switch quickly from classic delivery mode to digital/hybrid
    • Talent – analysis to ensure attractive pay rates and schemes (pay and attractive career plans and international mobility – 11 countries – item of differentiation – faculty/staff and students
  • Honoris anticipate continuing to operate in fragmented and competitive market places gaining further market share to retain either the position of market leader or the 2nd largest in the market
  • Pricing and offering will remain a priority so as to supplement the other differentiations’ (eg digitization/ digitalisation, 21st century skills, bootcamps etc) to remain the tertiary education provider of choice for students where Honoris is represented
  • Expansion
  • Performance


Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
Staff retention and competitive pay
  • Mobility, work anywhere, competition, war for talent affects staff retention and expectations of competitive pay providing opportunities for staff to consider the vast options available to them for alternative employment/employers
  • Financial
  • Human
  • Competitive employee value proposition
  • Refer Risk 7
  • Talent – analysis to ensure attractive pay rates and schemes (pay and attractive career plans and international mobility) – 11 countries – item of differentiation – faculty/staff and students
  • The war for talent is likely to continue in the long term and especially as competition increases in the environments Honoris operates in as well as with the ongoing expansion of tertairy education necessitating well qualified, well trained, competent and capable staff
  • Expansion
  • Performance

Risk 9:

Risk Risk Description Organisational capital affected Opportunity Risk response Trend Outlook
M&A execution
  • An ambitious growth trajectory, wanting to provide increased accessibility and affordability to many more students in the regions in which Honoris operates requires effective M&A execution to ensure closing and financing deals, legal requirements met, a good organizational fit, expansion of the network and offering and achieving scale
  • Financial
  • Identification of good universities with good potential; if some criteria not met, work with institutions to mature them to meet requirements
  • M&A pipeline (student numbers from 70k to 200k): expand group size; cannot be achieved only organically
  • M&A skill capability internalized with a senior director appointed to reduce execution risk
  • Skilled M&A team in place
  • Actis provides support and assistance
  • Robust and thorough due diligence covering a comprehensive assessment including – legal, commercial, regulation etc
  • Formalized onboarding process to bring new institutions into group
  • M&A will continue to achieve the growth Honoris is seeking as organic growth alone cannot achieve this strategic intent
  • More institutions are likely to approach Honoris as the success of the organization becomes more and more apparent
  • In some markets where an acquisition cannot be identified there may be other types of models (i.e., Greenfields etc) that will be persued – first one may be in Egypt (risk is elevated compared to M&A)
  • This being the case the strategy of M&A only may need to be revised
  • Expansion
  • Performance