Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q3 2017 Earnings Presentation
31 slides from Laureate Education's earnings presentation, Nov 8, 2017
Slide 1: Forward Looking Statements
Forward Looking Statements This presentation includes statements that express Laureate's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, "forward-looking statements" within the meaning
Slide 2: Q3 2017 Performance Highlights
Q32017 PERFORMANCE HIGHLIGHTS 3 © 2017 Laureate Education, Inc.
Slide 3: Q3 and YTD Q3 2017 Financial Performance Highlights
Q3 and YTD Q3 2017 Financial Performance Highlights Adj. EBITDA $87M (19%) Organic constant currency growth (1) Adj. EBITDA $477M +12% Organic constant currency growth (1) Revenue $983M +4% Organic constant currency growth (1) Revenue $3,117M +5% Organic constant currency growth (1) (1) Excludes imp
Slide 4: Q3 '17 Revenue and Adjusted EBITDA by Segment
Q3 ’17 Revenue and Adjusted EBITDA by Segment Organic Constant Currency (1) B/(W) vs Q3'16 (USD millions) B/(W) vs Q3'16 Q3'17 Q3'16 $ % $ % Revenues Brazil Mexico Andean & Iberian Central America & U.S. Campuses EMEAA Online & Partnerships Corporate & Eliminations Total Revenues 170.5 141.2 314.8 6
Slide 5: YTD Q3 '17 Revenue and Adjusted EBITDA by Segment
YTD Q3 ’17 Revenue and Adjusted EBITDA by Segment Organic Constant Currency (1) B/(W) vs YTD Q3'16 (USD millions) B/(W) vs YTD Q3'16 YTD Q3'17 YTD Q3'16 $ % $ % Revenues Brazil Mexico Andean & Iberian Central America & U.S. Campuses EMEAA Online & Partnerships Corporate & Eliminations Total Revenues
Slide 6: YTD Q3 2017 Enrollment by Segment
YTD Q3 2017 Enrollment by Segment • New Enrollments for YTD Q3 2017 increased 3% and Total Enrollments increased 3% versus on an organic basis (excluding 2016 divestitures(1)) YTD Q3 2016 New Enrollments Total Enrollments As of 9/30/2017 As of 9/30/2016 YTD Q3 2017 YTD Q3 2016 B/(W) YoY B/(W) YoY To
Slide 7: Segment Results Overview
SEGMENT RESULTS OVERVIEW 8 © 2017 Laureate Education, Inc.
Slide 8: Significant Timing Items Impacting Year-over-Year Comparability
Significant Timing Items Impacting Year-over-Year Comparability Timing adjusted results presented on the following segment pages include the following impacts: • Mexico: Magnitude 7.1 earthquake struck on September 19th with its epicenter in Puebla, which heavily impacted Mexico City as well as 7 ot
Slide 9: Segment Results Overview – Total Company
Segment Results Overview – Total Company For Laureate, Q1 and Q3 represent our two largest intake periods, accounting for approximately 80% of total new enrollment activity for the year, but are seasonally low from a P&L perspective - Q3 new enrollments increased 4% vs. prior year Q3 – On an organic
Slide 10: Segment Results Overview – Brazil
Segment Results Overview – Brazil Third quarter results reflect strong secondary intake (especially in distance learning – DL) with some timing impacting Revenue and Adjusted EBITDA in a seasonally low quarter - EBITDA – Q3 new enrollments increased 22% vs. prior year; +12% in face-to-face and +90%
Slide 11: Segment Results Overview – Mexico
Segment Results Overview – Mexico Mexico results were impacted by the September 19 earthquake th - Earthquake shifted revenues and classes from Q3 2017 to Q4 2017, and resulted in an estimated loss of 4,000 – 5,000 total enrollments for 2H 2017 – Q3 new enrollment intake decreased (4%) vs. prior yea
Slide 12: Segment Results Overview – Andean & Iberian
Segment Results Overview – Andean & Iberian Third quarter results reflect solid trends in all markets except Chile, which was impacted by the 2016 regulatory changes - – Q3 new enrollment intake increased 4% vs. prior year – On an organic constant currency(1) basis, Q3 ’17 Revenue increased $15M or
Slide 13: Segment Results Overview – Central America & U.S. Campuses
(1) Segment Results Overview – Central America & U.S. Campuses Low single digit enrollment growth driving mid-high single digit revenue growth, with faster growth in higher price point markets. Margins have improved through scaling of smaller assets in the segment - EBITDA – Q3 new enrollment increa
Slide 14: Segment Results Overview – EMEAA
Segment Results Overview – EMEAA EBITDA Q3 financial results remain strong - – Q3 new enrollment intake increased 7% vs. prior year impacted by timing. Adjusted for timing, new enrollments would be flat year over year, consistent with prior quarters and the continued planned strategic shift to longe
Slide 15: Segment Results Overview – Online & Partnerships
Segment Results Overview – Online & Partnerships Third quarter results were significantly unfavorably impacted by the decision to focus on marketing efficiency versus volume, causing us to have insufficient leads for our Walden brand. We also continued our planned discontinuation of certain lower ma
Slide 16: 2017 Outlook
2017 OUTLOOK 17 © 2017 Laureate Education, Inc.
Slide 17: FY 2017 Updated Guidance
FY 2017 Updated Guidance earthquake (estimated loss of 4,000-5,000 students) and weak performance in our domestic online business • Total Enrollments: lowering range to 1.5% - 2.0% organic growth to 1,059,000 to 1,064,000 total enrollments due to Mexico • • Revenue: narrowing guidance to 5.0% growth
Slide 18: Q4 2017 Guidance
Q4 2017 Guidance Revenue Adjusted EBITDA ($ millions, rounded) 4Q 2017 Forecasted Constant Currency Growth including Accelerator Plan $45 $16 - $25 FX Impact y-o-y (1) $7 $2 (1) Based on current spot FX rates (local currency per U.S. dollar) of MXN 19.02, BRL 3.27, CLP 631.00, PEN 3.63, EUR 0.86 for
Slide 19: Other Updates
OTHER UPDATES 20 © 2017 Laureate Education, Inc.
Slide 20: Share Count and Capital Structure
Share Count and Capital Structure For Q4 2017, assuming no conversion of the Series A Preferred - - Basic shares: 187.3M - Series A Preferred charge to EPS: ($107M) Expected issuance of up to 36M shares related to the Series A Preferred when converted to common stock - Following the refinancing of t
Slide 21: Appendix
APPENDIX 22 © 2017 Laureate Education, Inc.
Slide 22: Seasonality: Main Enrollment Intakes
Seasonality: Main Enrollment Intakes • Q1 and Q3 are peak intake quarters, but seasonally weak earnings quarters as institutions are largely out of session during the summer season – – Q1 represents the large intake for our Southern Hemisphere institutions (Brazil, Andean & Iberian) Q3 represents th
Slide 23: Intra-Year Seasonality Trends
Intra-Year Seasonality Trends • Large intake cycles at end of Q1 (Southern Hemisphere) and end of Q3 (Northern Hemisphere) drive seasonality of earnings (Q2 and Q4 are our strongest earnings quarters) Academic Calendar Academic Calendar 46% 46% 29% 30% 29% 28% 30% 29% 42% 42% 42% 40% 28% 27% 37% Q1
Slide 24: Financial Tables: Consolidated Statements of Operations
Financial Tables Consolidated Statements of Operations For the three months ended For the nine months ended September 30, September 30, IN MILLIONS 2017(2) 2016 Change 2017(2) 2016 Change Revenues $983.4 $929.9 $53.5 $3,116.8 $3,068.3 $48.5 Costs and expenses: Direct costs 924.1 864.2 59.9 2,719.6 2
Slide 25: Financial Tables: Revenue and Adjusted EBITDA by Segment (Quarter)
Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components For the quarter ended September 30, 2017 2016 Reported Organic Constant Currency(3) Total Organic Constant Currency One-time items Acq/Div. FX Revenues Brazil $170.5 $152.8 12% 8% $17.7 $12.7 $— $— $5.
Slide 26: Financial Tables: Revenue and Adjusted EBITDA by Segment (Nine Months)
Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components For the nine months ended September 30, 2017 2016 Reported Organic Constant Currency(3) Total Organic Constant Currency One-time items Acq/Div. FX Revenues Brazil $548.0 $479.6 14% 4% $68.4 $18.9 $— $—
Slide 27: Financial Tables: Consolidated Balance Sheets
Financial Tables Consolidated Balance Sheets IN MILLIONS September 30, 2017 December 31, 2016 Change Assets Cash and cash equivalents $505.0 $465.0 $40.0 Receivables (current), net 599.1 334.8 264.3 Other current assets 363.6 316.0 47.6 Current assets held for sale 92.2 — 92.2 Property and equipment
Slide 28: Financial Tables: Consolidated Statements of Cash Flows
Financial Tables Consolidated Statements of Cash Flows For the nine months ended September 30, IN MILLIONS 2017 2016 Change Cash flows from operating activities Net (loss) income $(106.7) $327.7 $(434.4) Depreciation and amortization 199.4 202.7 (3.3) Loss (gain) on sale of subsidiary and disposal o
Slide 29: Financial Tables: Non-GAAP Reconciliation
Financial Tables Non-GAAP Reconciliation For the three months ended For the nine months ended September 30, September 30, IN MILLIONS 2017 2016 Change 2017 2016 Change Net (loss) income $(103.5) $80.9 $(184.4) $(106.7) $327.7 $(434.4) Plus: Equity in net income of affiliates, net of tax — — — — — —
Slide 30: Financial Tables: Non-GAAP Reconciliation
Financial Tables Non-GAAPRevonciliation September 30, September 30, TMELIONS WoT 2016 Change 0172016 Change ‘Net dos income Ts) s 909 $ GHA Ss GOSH Ss BITS GHA Ph: Equity in net income of ates, set of x = == =e Tacome tx expense (enefit) Bes Gy 170 835264) (Los) come fom contiasng operations before
Slide 31: Laureate Education Inc
sg LAUREATE EDUCATION INC HERE