Edu Holdings Limited · ASX:EDU
Edu — FY2020 Earnings Presentation
31 slides from Edu's earnings presentation, Aug 25, 2020
Slide 1: FY20 Results
FY20 RESULTS …CHALLENGES AND OPPORTUNITIES AHEAD
Slide 2: Group Overview
GROUP OVERVIEW Tertiary education provider Health and Community Services focus Diversified student base National campus footprint Growing organically and through acquisitions Operating leverage emerging, delivering strong operating cash flows Short-term earnings expected to be impacted
Slide 3: FY20 Key Metrics
FY20 KEY METRICS1,2,3 Revenue ($'000) Operating EBITDA ($'000)4 Earnings per share (cents)5 1H 2H 1H 2H 1H 2H 30,000 5,000 1.80 25,000 4,000 1.40 20,000 1.29 12,789 2,919 3,000 1.00 12,792 15,000 2,000 0.60 1.05 10,000 6,603 2,569 5,749 0.04 0.35 0.50 12,743 1,000 0.20 5,000 506 1,765 9,193 450 0.25
Slide 4: Our Businesses
OUR BUSINESSES FY20 FY19 FY20 FY19 Revenue: $19.1m $15.1m $6.5m $6.9m EBITDA1: $3.1m $1.1m $1.6m $1.5m Education sector2: Vocational Higher Education Student market2: International Domestic Students enrolled3: 2,149 379 Student recruitment2: Education Agents Direct Funding source2: Fee-for-service F
Slide 5: Key Highlights
KEY HIGHLIGHTS UCW LIMITED FY20 RESULTS | 5
Slide 6: FY20 Key Achievements
FY20 KEY ACHIEVEMENTS Operating leverage Record student New Higher Education emerging growth program Operating EBITDA1 ALG international student Bachelor of Early Childhood margin of 18.3% enrolments up 29.0% Education accredited Continued growth in Business continuity in Rationalisation of Communit
Slide 7: FY20 Financial Highlights
FY20 FINANCIAL HIGHLIGHTS1 Revenue Gross profit Operating EBITDA2 FY20 FY19 Variance FY20 FY19 Variance FY20 FY19 Variance $25.5m $22.0m 16.1% $12.3m $10.5m 17.5% $4.7m $2.6m 78.7% Operating EBITDA Underlying EBITDA / Net operating margin2 margin3 cashflow FY20 FY19 FY20 FY19 Variance FY20 FY1
Slide 8: COVID-19 Impact
COVID-19 IMPACT ALG student numbers affected − 4Q20 enrolments of 2,149 against 2,458 in 3Q20 (pre COVID-19) − Majority of ALG’s recruitment is students already in Australia, however border closures will reduce the pipeline Ikon student enrolments impacted less − 379 students passed census in Tr
Slide 9: Long-Term Strategy Remains on Track
LONG-TERM STRATEGY REMAINS ON TRACK Extending lifetime value of student, including through pathway/articulation opportunities Expanding course offering and delivery modes Increasing campus capacity Degrees Typical duration1: 3 years Typical price1: $47,000 Diplomas Typical duration1: 18 months
Slide 10: Building Foundations for Growth
BUILDING FOUNDATIONS FOR GROWTH Training rooms Courses offered Room utilisation - by city VET HE Utilised Unutilised 60 30 30 50 25 25 40 20 20 49% 30 15 15 10% 20 10 10 51% 90% 5 5 51% 10 44% 85% 49% 56% 0 15% 0 0 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 Sydney Melbourne Brisbane Adelaide Perth 1H17
Slide 11: Student Enrolments
STUDENT ENROLMENTS1,2 Student enrolments (number) National rollout of Community Services courses continued to ALG Ikon support growth 5,500 Impact of pandemic on ALG international student enrolments 5,000 expected to be material 4,500 Higher attrition at the start of 3-year CAGR of 32.9% calen
Slide 12: Student Profile
STUDENT PROFILE1 Enrolments by course Enrolments by city Average duration (months)2 3,000 3,000 25 2,500 2,500 20 2,000 2,000 15 1,500 1,500 10 1,000 1,000 5 500 500 0 0 0 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q20 4Q20 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q20 4Q20 FY17 FY18 FY19 FY20 Health (VET) Community Servi
Slide 13: Financial Results
FINANCIAL RESULTS UCW LIMITED FY20 RESULTS | 13
Slide 14: Key Highlights – Group Profit and Loss
KEY HIGHLIGHTS – GROUP PROFIT AND LOSS Revenue ($’000) Operating EBITDA ($’000)1 14,000 3,500 25% 12,000 3,000 20% 10,000 2,500 8,000 2,000 15% 6,000 1,500 10% 4,000 1,000 5% 2,000 500 - - 0% 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 ALG Ikon ALG Ikon EBITDA Mar
Slide 15: Group Profit and Loss Cont.
GROUP PROFIT AND LOSS CONT. OPERATING LEVERAGE STARTING TO EMERGE (PRE COVID-19) FY20 FY19 Variance Underlying net profit (pre AASB 16) of $2.2m, up 131.7% on PCP Post Pre Pre AASB 16 AASB 16 AASB 16 Group revenue up 16.1%, boosted by growth in ALG $'000 $'000 $'000 $'000 % student numbers for t
Slide 16: Group Profit and Loss Cont.
GROUP PROFIT AND LOSS CONT. COVID-19 DISRUPTED MOMENTUM, SOLID 2H20 CONTRIBUTION DUE TO MITIGATION MEASURES 2H20 2H19 Variance 1H20 1H19 Variance Pre Pre Pre Pre AASB 16 AASB 16 AASB 16 AASB 16 $'000 $'000 $'000 % $'000 $'000 $'000 % Revenue 12,789 12,792 (3) (0.0%) 12,743 9,193 3,550 38.6% Cost of
Slide 17: ALG
ALG COMMUNITY SERVICES COURSES SUPPORTING GROWTH FY20 FY19 Variance 2H20 1H20 Variance Post Pre Pre Pre Pre AASB 16 AASB 16 AASB 16 AASB 16 AASB 16 $'000 $'000 $'000 $'000 % $'000 $'000 $'000 % Revenue 19,057 19,057 15,115 3,942 26.1% 9,646 9,411 235 2.5% Cost of sales (8,742) (10,496) (8,247) (2,24
Slide 18: Ikon
IKON HIGHER EDUCATION PROVIDING DIVERSIFICATION AND GROWTH OPPORTUNITIES FY20 FY19 Variance 2H20 1H20 Variance Post Pre Pre Pre Pre AASB 16 AASB 16 AASB 16 AASB 16 AASB 16 $'000 $'000 $'000 $'000 % $'000 $'000 $'000 % Revenue 6,475 6,475 6,870 (395) (5.7%) 3,143 3,332 (189) (5.7%) Cost of sales (2,3
Slide 19: Balance Sheet and Cashflow
BALANCE SHEET AND CASHFLOW STRONG CASH GENERATION IN 2H20 TO BUFFER AGAINST LIKELY UPCOMING CHALLENGES 30 Jun-20 31 Dec-19 30 Jun-19 $'000 $'000 $'000 Cash balance strengthened to $6.6m at year end from $3.2m at 31 December 2019 Cash and cash equivalents 6,621 3,186 4,689 Trade and other receivabl
Slide 20: Debt Structure
DEBT STRUCTURE GEARING AND NET CASH IMPROVED BY $3.9M SINCE 1H20 Gearing 30 Jun-20 31 Dec-19 Variance 30 Jun-19 Variance $'000 $'000 $'000 $'000 $'000 Acquisition facility 4,167 4,500 (333) 1,200 2,967 Bank guarantee facility 875 1,001 (126) 1,001 (126) Total gross debt 5,042 5,501 (459) 2,201 2,841
Slide 21: FY21 Priorities & Outlook
FY21 PRIORITIES & OUTLOOK UCW LIMITED FY20 RESULTS | 21
Slide 22: FY21 Priorities
FY21 PRIORITIES Academic quality, compliance and student experience Launch of newly accredited HE program Build capability in domestic student recruitment Further program development in Ikon Consider strategic acquisitions UCW LIMITED FY20 RESULTS | 22
Slide 23: FY21 Outlook
FY21 OUTLOOK Short-term weakness in student growth − ALG: 2,252 enrolments in 1Q21, up 4.8% on 4Q20 and 6.4% on PCP − Anticipate reduction for remainder of the year, including from teach-out of sub-optimal vocational courses − Australian border closure expected to dampen new student commencements
Slide 24: Appendices
APPENDICES UCW LIMITED FY20 RESULTS | 24
Slide 25: Capital Structure
CAPITAL STRUCTURE Ownership Number % Diluted Board and Ordinary shares 117,514,448 97.0% Management 40.1% Options1 800,000 0.7% Performance rights2 2,850,000 2.4% Fully diluted 121,164,448 100.0% $'000 3 Market capitalisation at $0.12 per share 14,102 Cash 6,621 Others Debt4 (5,042) 59.9% Enterprise
Slide 26: Course Offering
COURSE OFFERING Higher Education (Diplomas and Degrees) Job outcomes 8 higher education courses 16 vocational courses Arts Therapy Counselor or art therapist Continued focus on courses with Counselling and Psychotherapy Counselor or psychotherapist clear job outcomes and Early Childhood Educat
Slide 27: Student Diversity
STUDENT DIVERSITY ALG international student enrolments by source region1 Latam, 30.1% Asia, 33.6% Europe, 28.6% Other, 7.7% International students from > 75 source countries Top 20 source countries represent 82.5% of current enrolments ALG international student enrolments by source country (Top
Slide 28: Executives and Directors
EXECUTIVES AND DIRECTORS Adam Davis, BAppFin (Macquarie University) Gary Burg, BAcc (Wits), MBA (Wits) Chief Executive Officer and Managing Director Non-Executive Chair Adam has extensive experience in the education sector as founder and CEO of Gary has been involved with Global Capital Group since
Slide 29: Contacts
CONTACTS Adam Davis Lyndon Catzel Chief Executive Officer Chief Financial Officer E: adam@ucw.com.au E: lyndon@ucw.com.au P: +61 2 9112 4541 P: +61 2 9112 4540 M: 0408 400 888 M: 0414 907 384 UCW LIMITED FY20 RESULTS | 29
Slide 30: Disclaimer
DISCLAIMER This presentation, dated 25 August 2020, provides additional commentary on the Financial Report for the year ended 30 June 2020 for UCW Limited (UCW or the Company) and accompanying information provided to ASX on the same date. As such, it should be read in conjunction with those document
Slide 31: UCW Limited
UCW LIMITED oo