3p Learning Ltd. · ASX:3PL
3p Learning — H1 FY2024 Earnings Presentation
28 slides from 3p Learning's earnings presentation, Feb 20, 2024
Slide 1: Investor & Analyst Briefing
Investor & Analyst Briefing For the half year ended 31 December 2023 Presented: 20 February 2024 by Chairman Matthew Sandblom CEO Jose Palmero CFO Anton Clowes
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer The material in this presentation is a summary of 3P Learning Limited’s (“3P”) activities and results as at the time of preparation, 20 February 2024. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of informati
Slide 3: Our Programs
Our Programs Writing and Improving student Teaching children Learning to Read Where children Numeracy engagement and foundational Maths made fun and learn to write with assessment that achievement in and problem- rewarding for confidence and makes progress mathematics. solving skills. children. effe
Slide 4: Agenda
Agenda • Chairman’s Update • Q&A • CEO Update • Appendices • Results & Cash Flow 4
Slide 5: Chairman's Update
Chairman’s Update Matthew Sandblom
Slide 6: Chairman's Update Highlights
CHAIRMAN’S UPDATE Chairman’s Update Highlights Major new product releases: Writing Legends (Years 1-3, APAC and EMEA), Mathletics New Courses (Fractions Years 3-6, APAC) Re-acquired Reading Eggs US schools Distribution Rights from Edmentum. Since FY22 to date, we will have funded approximately
Slide 7: CEO Update
CEO Update Jose Palmero
Slide 8: Our Purpose: Better Ways to Learn
CEO Our Purpose: Better Ways to Learn UPDATE B2B B2C Markets (AMER, EMEA, APAC) Markets (AMER, EMEA, APAC) 8
Slide 9: 1H24 Highlights
CEO UPDATE 1H24 Highlights UNDERLYING1 EBITDA REVENUE B2C BILLINGS3 B2B ARR $3.4m $53.9m $21.8m $64.2m -41% +2% +7% -2% vs pcp2 vs pcp2 vs pcp2 vs 30 June 2023 UNDERLYING1 CASH CUSTOMERS PRODUCT USED IN OPERATIONS >5.4m $16.3m BEFORE TAX ($2.4m) • B2B Licences 4.3m (flat vs 30 June 2023) • $14.4m pr
Slide 10: Performance in the Consumer Market
CEO Performance in the Consumer Market UPDATE 7% consumer billings1 growth in 1H24 vs 1H23, across all key markets and channels. • Reading Eggs, Mathseeds and Mathletics billings were $21.8m, up 7% on pcp, with net billings contribution margin of 50% including direct sales, marketing and platform co
Slide 11: Performance in the Schools Market
CEO UPDATE Performance in the Schools Market 1H24 FY23 +/- % +/- 1H23 The graph below shows school ARR trajectory for 1H23 (Dec-22), FY23 (Jun-23) and 1H24 (Dec-23). Closing ARR1 ($m) 64.2 65.4 (1.2) (2%) 65.9 Licences (m) 5.2 5.2 (0.1) (1%) 5.4 Exit ARPU2 ($) 12.4 12.5 (0.1) (1%) 12.2 • ARR is down
Slide 12: Growth Driver 1: Product Go-to-Market
CEO UPDATE Growth Driver 1 Growth Driver 1: Product Go-to-Market Major new product releases (APAC, EMEA) Writing Legends (Years 1-3, APAC and EMEA) Mathletics New Courses (Fractions Years 3-6, APAC) Brightpath Progress Writing (EMEA), Mathseeds Prime (Year 4, APAC) Focus on US-specific market ne
Slide 13: Product Releases and Improvements
CEO UPDATE Product Releases and Improvements Achieved in 1H24 What’s coming CY24 Read Aloud Fluency feature, US District Reports, New certificates My Reading Goals K and 1 Grade 2 Lessons Global: New Student Centre and certificates, New Courses Number and Algebra Units Teacher Assign & review for Ye
Slide 14: Product - Mathletics
CEO UPDATE Product - Mathletics New Mathletics Old Mathletics New Mathletics significantly improved user experience, new student centre, and teacher assign module, new avatar system and certificates New courses developed based on HITS (high impact teaching strategies) New courses include worke
Slide 15: Product – Writing Legends
CEO UPDATE Product – Writing Legends Lessons for Year 1 to 3 now available, aim to have Years 4 and 5 completed by December 2024 1,300 schools already trialed the product Objective is to have all Reading Eggs customers trial Writing Legends in CY24 15
Slide 16: Growth Driver 2: US Market (impact of Edmentum transaction)
CEO UPDATE Growth Driver 2 Growth Driver 2: US Market (impact of Edmentum transaction) Primary reason for re-acquisition of US schools Distribution Rights for Readings Eggs (“Rights”) was opportunity for significant expansion in the US market for 3P Before acquisition of Rights: - Recent 12 mont
Slide 17: Growth Driver 2: US Market (opportunity)
CEO UPDATE Growth Driver 2 Growth Driver 2: US Market (opportunity) Reading Eggs is a key product for our growth strategy, and controlling the entire product lifecycle represents a significant opportunity in itself, with no reliance on 3rd parties. - Focus on Reading Eggs customer retention post E
Slide 18: Growth Driver 3: Operational Leverage
CEO UPDATE Growth Driver 3 Growth Driver 3: Operational Leverage Our goal is to achieve double digit B2B billings growth in all key markets from FY25. We've just passed peak product development costs and expect this to decline in the coming years both in absolute dollar terms and as a percentage
Slide 19: Results & Cash Flow
Results & Cash Flow Anton Clowes
Slide 20: P&L Key Drivers
RESULTS P&L Key Drivers ANALYSIS Profit and Loss Statement +/- %+/- 1H24 1H23 $m Revenue B2B 32.2 32.0 0.2 1% • B2B revenue remains steady, up 1% on pcp. APAC B2C 21.7 20.6 1.1 5% and EMEA regions performed well, partially offset by Total revenue 53.9 52.6 1.3 2% poor US new business and distributor
Slide 21: B2C Performance Metrics
B2C B2C Performance Metrics ANALYSIS $m 1H24 1H23 +/- % +/- $m 1H24 1H23 +/- %+/- 1 Gross Billings 21.8 20.3 1.5 7% Revenue 21.7 20.6 1.1 5% 5 Licences (k) 291.0 314.0 (23.0) (7%) 2 Expenses ARPU ($) 74.9 64.6 10.3 16% Sales, Marketing & Cost of Revenue 4 (12.9) (13.1) 0.2 2% $m 1H24 1H23 +/- % +/-
Slide 22: B2B Performance Metrics
B2B B2B Performance Metrics ANALYSIS $m 1H24 FY23 $m 1H24 1H23 +/- % +/- Opening ARR 65.4 64.4 Revenue 32.2 32.0 0.2 1% Acquired business - 1.4 New business 3.4 5.5 Expenses Net upsell/downsell 1.0 1.9 Sales, Marketing & Cost of Revenue 2 (17.2) (14.2) (3.0) (21%) Net churn (5.1) (8.8) Contribution
Slide 23: Cash Balance Bridge
CASH Cash Balance Bridge ANALYSIS • Underlying cash used in operations before tax was $2.4m (1H23: $5.6m1 used). • Brightpath related payments of $1.1m includes $1.0m earn-out amount. • Net PPE & intangibles includes $1.1m Writing Legends investment. • Shares purchased under the buy-back program $2.
Slide 24: EBITDA Cash Flow Bridge
CASH EBITDA Cash Flow Bridge ANALYSIS • Underlying cash used in operations before tax was $2.4m (1H23: $5.6m1 used). • Improved working capital outflows (1H24 $5.8m vs pcp $11.3m) reflects partial FY23 timing-tailwind combined with lower payments in the half compared to pcp. • Brightpath related pay
Slide 25: Q&A
Q&A
Slide 26: Appendices
(@)3P Learning Appendices
Slide 27: Term Definition
APPENDICES Term Definition ARR Annual Recurring Revenue Churn Percentage is calculated as a proportion of the opening School ARR in a rolling 12 or 6 month period (as Churn Percentage relevant). Earnings before interest, tax, depreciation and amortisation, restructure and integration costs, corporat
Slide 28: Thank You
Thank You