Cogna Educacao S.a. · BMFBOVESPA:COGN3
Cogna Educacao — Q2 2021 Earnings Presentation
25 slides from Cogna Educacao's earnings presentation, Aug 15, 2021
Slide 1: 2Q21 Results
2Q21 Results \ S August 2021 S \ “hy
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation of general information from Cogna Educação S.A (“Cogna”). These are summarized information without the intention of being complete, which should not be considered by potential investors as a recommendation. This presentation is strictly confiden
Slide 3: Strategy Adopted in Recent Quarters Brings Solid results
Strategy Adopted in Recent Quarters Brings Solid results • Kroton’s DL student base continues to grow • Vasta grew in terms of contracts (partner • Operational Cash Generation after capex schools) and revenue in all segments, with (OCG) of R$ 197 million in the first semester, • Despite the drop in
Slide 4: Kroton
Kroton \ \ August 2021 <
Slide 5: Highlights
Highlights Successful turnaround in Campus results in higher performance Ampli + TIM • Optimization of the portfolio of courses per unit allowed Digital student’s • Mobile first education platform growth both in # of students and revenue, softening the impact of student • More than 50 million potent
Slide 6: Accounts Receivable and Timely Payments
Accounts Receivable and Timely Payments • The Accounts Receivable Coverage Index was stable vs. 1Q21 and remains the highest in the industry • Average Collection Period (ACP) for out-of-pocket students reached 71 days, marginal increase vs. 1Q21 due to seasonality. A 50-day fall vs. 2Q20. • The qual
Slide 7: Student Base
Student Base • Continuous growth in student base in Digital Education, which ended the quarter with a 75% share of the total student base. • Reducing exposure to installment products. We have not offered PEP since the end of cycle 20.2. • On-campus focusing on courses with higher added value generat
Slide 8: Operating Results
Operating Results • Reduction of net revenue due to i) the effects of the pandemic on On-campus education and (ii) the reduction of FIES base and iii) discontinuity of PEP, partially offset by the increase in the digital student base. • Recurring EBITDA increased R$ 257 million, due to the capture o
Slide 9: Vasta
Vasta \ \ August 2021 <
Slide 10: Operating Results
Operating Results • Subscription revenue (including PAR) increased 12% in the 2021 commercial cycle (4Q20 - 2Q21), with highlights on ex-PAR subscription (traditional education systems and complementary solutions), which increased 16%. • PAR and non-subscription business more impacted by the reuse o
Slide 11: 2022 Sales Cycle: What's new
2022 Sales Cycle: What’s new Hybrid 1• B2B Core: Focus on the migration of PAR clients to Learning Systems or PAR Digital Continuous Content 3 (Complement improving for ary) teachers 100% Digital Content 2• B2B Core: Launch of Fibonacci Learning (Complement System, in partnership with Colegio ary Fi
Slide 12: Platos
Platos \ \ August 2021 <
Slide 13: Operating Results
Operating Results • Focus on digital graduate program, with an 18% growth and intake and 22% in net revenue • Recurring EBITDA margin remains healthy, despite the more conservative level of provisioning (affecting the PDA), and implementation of the OPM business for external customers in 1Q21 Net Re
Slide 14: Other Business
Other Business \ \ Agosto 2021 <
Slide 15: Operating Results
Operating Results • Net revenue increased 35% in 2Q21 led by sales from National Textbook Program (PNLD) and sale of books to the private market • 2Q21 profitability was impacted mainly by costs related to the promotional material of high school books in 2Q21 for PNLD Net Revenue (R$ million) Recurr
Slide 16: Saber
Saber \ \ August 2021 <
Slide 17: Operating Results
Operating Results • Pandemic effect continues to hit Saber, which registered decrease in student base combined with reduction in daytime activities were the main offenders in the quarter • Compression in the Recurring EBITDA margin due to (i) the constitution of provision for obsolescence of schools
Slide 18: Cogna
Cogna \ \ August 2021 <
Slide 19: Operating Results
Operating Results • Net revenue impacted by the mix change and consequent reduction in On-campus higher education revenue, partially offset by revenue growth in the digital segment at Kroton, as well as revenue growth in Vasta • Improvement in Kroton’s timely payments with greater participation of s
Slide 20: Positive Operating Cash Generation in 1H21
Positive Operating Cash Generation in 1H21 • Due to timing mismatches between 1Q21 and 2Q21, the most appropriate analysis to understand the company’s operating cash generation (OGC) is the semester analysis • We went from a cash consumption of R$ 2 million to a positive generation of R$ 197 million
Slide 21: Leverage under control and close to an inflection point
Leverage under control and close to an inflection point • Leverage remains under control, reaching the adjusted net debt/EBITDA ratio of 2.13x, below the limit set by covenants of 3.0x. • We are finalizing the process of extending the company's short-term liabilities (R$1.25 billion) with a forecast
Slide 22: Indebtedness
Indebtedness • Solid cash position of R$ 3.7 billion • Net debt of R$ 3.0 billion • Net debt / adjusted EBITDA of 2.13X, according to the new criteria of adjusted EBITDA, excluding the extraordinary PDA add-ons carried out in 2020 Net Debt and Adjusted EBITDA¹ (R$ million) Debt Amortization Schedule
Slide 23: In summary
In summary: On-campus Graduation Net Revenue: - 5% Digital Graduation Vasta Digital Undergrad Students Increased profitability Recurring + 173% Timely Payments Lower PDA EBITDA : From: R$ 121 million To: R$ 320 million Turnaround Campus Lowe cost/expense Digital Marketing Lower expenditure OCG Posit
Slide 24: Perspectives
Perspectives • Kroton will continue to grow strongly in digital, resuming the trajectory of increasing profitability and with a light balance sheet. Mix still pressures revenue in the second half of 2021, with actions that mitigate the impact of this reduction in margin • With 50% completion, the 2n
Slide 25: Investor Relations
Investor Relations ri.cogna.com.br dri@cogna.com.br