Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q3 2023 Earnings Presentation
35 slides from Laureate Education's earnings presentation, Nov 2, 2023
Slide 1: Third Quarter 2023 Earnings Presentation
Third Quarter 2023 Earnings Presentation November 2, 2023 © 2023 Laureate Education, Inc. 1
Slide 2: 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 meani
Slide 3: Presentation of Non-GAAP Measures
Presentation of Non-GAAP Measures In addition to the results provided in accordance with U.S. generally accepted accounting principles (GAAP) throughout this presentation, Laureate provides the non-GAAP measurements of Adjusted EBITDA and its related margin, Adjusted EBITDA to Unlevered Free Cash Fl
Slide 4: Summary Overview
SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding © 2023 Laureate Education, Inc. 4
Slide 5: Executive Summary
Executive Summary Q3 results in-line with expectations New and Total Enrollments up 9% and 6% YTD, respectively versus prior year period Net Income of $36M in Q3; $5M improvement versus prior year period FX rates weaker vs August, but still favorable versus prior year Cash accretive busine
Slide 6: Compelling Investment Characteristics
COMPELLING INVESTMENT CHARACTERISTICS © 2023 Laureate Education, Inc. 6
Slide 7: Large Markets with Low Penetration Rates in Higher Education
Large Markets with Low Penetration Rates in Higher Education Mexico Peru Combined Population (M) 129M 32M 161M Higher Education 5,058 1,811 6,869 Students (000s) Higher Education Gross U.S. E.U. 34%2 52%2 37% 62% 54% Participation Rate1 Market Share for 42% 73% 53% Private Institutions3 Sources: UNE
Slide 8: Leading University Portfolio in Mexico & Peru
Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 9/30/23 Segment Overall Ratings / Rankings Ranked Top 10 university in Mexico Premium/ 1960 114,200 5-Stars rated by QS Stars™ in categories Traditional Mexico Universidad del of Employability & Inclusiv
Slide 9: Q3 & YTD 2023 Performance Results
Q3 & YTD 2023 PERFORMANCE RESULTS © 2023 Laureate Education, Inc. 9
Slide 10: 2023 Third Quarter – Financial Summary
2023 Third Quarter – Financial Summary Q3 ’23 Variance Vs. Q3 ’22 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Mexico +7% (up 4% adjusted for timing of intake close -- on top of 17% New Enrollment 115K 6% 6% increase during PY primary intake)
Slide 11: 2023 Q3 YTD – Financial Summary
2023 Q3 YTD – Financial Summary Q3 YTD ’23 Variance Vs. Q3 YTD ’22 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Strong intakes during 2023 New Enrollment 233K 9% 9% • Mexico +10%, Peru +9% • Mexico +9% Total Enrollment 459K 6% 6% • Peru +4% Re
Slide 12: Segment Results
SEGMENT RESULTS © 2023 Laureate Education, Inc. 12
Slide 13: Mexico Segment Results
Mexico Segment Results Q3 Results Q3 YTD Results Notes ($ in millions) Organic/CC Q3 YTD Organic/CC (Enrollments rounded to the nearest Q3 ’23 thousand) Vs. Q3 ’22 (1) ’23 Vs. Q3 YTD ’22 (1) • Primary intake in Q3 up 4% adjusted for timing of intake New Enrollment 87K 7% 147K 10% close (on top of 17
Slide 14: Peru Segment Results
Peru Segment Results Q3 Results Q3 YTD Results Notes ($ in millions) Organic/CC Q3 YTD Organic/CC (Enrollments rounded to the nearest Q3 ’23 thousand) Vs. Q3 ’22 (1) ’23 Vs. Q3 YTD ’22 (1) • Strong growth during primary intake cycle in Q1 New Enrollment 27K 2% 86K 9% • Smaller secondary intake in Q3
Slide 15: Outlook
OUTLOOK © 2023 Laureate Education, Inc. 15
Slide 16: 2023 Updated FY Outlook (At Mid-Point)
2023 Updated FY Outlook (At Mid-Point)1 Total Enrollment (000s) Revenue ($M) +6% +18% 423 447 $1,461 $1,242 2022A 2023E 2022A 2023E Adjusted EBITDA ($M) Adjusted EBITDA Margin % +22% $413 28.3% $339 27.3% 100 bps 2022A 2023E 2022A 2023E Strong Top Line Growth With Continued Margin Expansion (1) Base
Slide 17: 2023 FY Outlook - Updated
2023 FY Outlook - Updated Prior Operational ($ in millions) FX Change Current (Enrollments in FY 2023 Change thousands) (mid-point) FY 2023 Outlook (1) Outlook (mid-point) Total Enrollment 447K – 455K - (4) Approx. 447K Revenue $1,483 - $1,495 ($30) $2 $1,457 - $1,465 Adjusted $419 - $427 ($9) ($1)
Slide 18: Q4 2023 Guidance Details
Q4 2023 Guidance Details ($ in millions) Q4 2023 2H 2023 Implied Outlook (1) Outlook (1) Revenue $382 - $390 $744 - $752 Adjusted EBITDA $123 - $129 $201 - $207 Continued Growth in Profitability Expected in Q4 2023 (1) Based on actual FX rates for July through October, and spot FX rates (local curre
Slide 19: Appendix
APPENDIX © 2023 Laureate Education, Inc. 19
Slide 20: 2023 Third Quarter – Net Income Reconciliation
2023 Third Quarter – Net Income Reconciliation Q3 ’23 B / (W) Vs. Q3 ’22 Notes ($ in millions) Reported $ % Adjusted EBITDA 78 6 8% Depreciation & Amort. (18) (3) n.m. Interest Expense, net (2) (1) n.m. Impairments - - n.m. • Non-cash FX translation gain on Other 11 (3) n.m. intercompany loans Incom
Slide 21: 2023 Q3 YTD – Net Income Reconciliation
2023 Q3 YTD – Net Income Reconciliation Q3 YTD ’23 B / (W) Vs. Q3 YTD ’22 Notes ($ in millions) Reported $ % Adjusted EBITDA 287 43 18% Depreciation & Amort. (52) (8) (19%) Interest Expense, net (10) (4) n.m. Impairments (2) (2) n.m. • Non-cash FX translation loss on Other (53) (43) n.m. intercompan
Slide 22: Capitalization at 9/30/2023
Capitalization at 9/30/2023 ($ in millions) Total Company as of 9/30/23 Gross Debt $135 Less: Cash & Cash Equivalents ($131) Net Debt $4 Total current shares outstanding of 157M shares as of September 30th Strong Balance Sheet Position – Essentially Net Debt Neutral © 2023 Laureate Education, Inc.
Slide 23: 2023 Full Year Guidance Details
2023 Full Year Guidance Details Total ($ in millions) Revenues Adj. EBITDA (Enrollments rounded to the nearest thousand) Enrollment 2022 FY Results Adjusted 423K $1,242 $339 Organic Growth Approx. 24K $122 - $130 $47 - $53 Organic Growth % 6% 10% 14% - 16% 2023 FY Guidance (Constant Currency) Approx
Slide 24: Q4 & 2H 2023 Guidance Details
Q4 & 2H 2023 Guidance Details Q4 Guidance 2H Implied Guidance ($ in millions) Revenues Adj. EBITDA Revenues Adj. EBITDA 2022 Results As Reported $346 $95 $647 $168 Timing Impact Intra-Year (academic calendar) $0 $0 $0 $0 2022 Results Adjusted $346 $95 $647 $168 Organic Growth $22 - $30 $22 - $28 $45
Slide 25: Intra-Year Seasonality Trends
Intra-Year Seasonality Trends • Large intake cycles at end of Q1 (Peru) and end of Q3 (Mexico) drive seasonality of earnings • Q2 and Q4 are typically Laureate’s strongest earnings quarters Revenue Seasonality Adjusted EBITDA Seasonality 31% 30% 30% 31% 49% 29% 47% 46% 28% 27% 28% 42% 43% 44% 25% 24
Slide 26: Financial Results & Tables
Financial Results & Tables © 2023 Laureate Education, Inc. 26
Slide 27: Financial Tables
Financial Tables Consolidated Statements of Operations For the three months ended September 30, For the nine months ended September 30, IN MILLIONS 2023 2022 Change 2023 2022 Change Revenues $ 361.5 $ 301.0 $ 60.5 $ 1,074.9 $ 895.9 $ 179.0 Costs and expenses: Direct costs 291.1 229.4 61.7 810.4 655.
Slide 28: Financial Tables: Revenue and Adjusted EBITDA by Segment, Quarter
Financial Tables Revenue and Adjusted EBITDA by segment: Quarter IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant September 30, 2023 2022 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 185.4 $ 147.8 25% 6% $ 37.6 $ 8.8 $
Slide 29: Financial Tables: Revenue and Adjusted EBITDA by Segment, Year-to-Date
Financial Tables Revenue and Adjusted EBITDA by segment: Year-to-Date IN MILLIONS % Change $ Variance Components Organic Organic For the nine months ended Constant Constant September 30, 2023 2022 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Mexico $ 559.5 $ 435.0 29% 13% $ 124.5 $
Slide 30: Financial Tables: Consolidated Balance Sheets
Financial Tables Consolidated Balance Sheets IN MILLIONS September 30, 2023 December 31, 2022 Change Assets Cash and cash equivalents $ 130.9 $ 85.2 $ 45.7 Receivables (current), net 95.7 80.7 15.0 Other current assets 52.7 60.3 (7.6) Property and equipment, net 543.6 523.4 20.2 Operating lease righ
Slide 31: Financial Tables: Consolidated Statements of Cash Flows
Financial Tables Consolidated Statements of Cash Flows For the nine months ended September 30, IN MILLIONS 2023 2022 Change Cash flows from operating activities Net income $ 65.5 $ 29.9 $ 35.6 Depreciation and amortization 52.0 43.6 8.4 Loss (gain) on sales and disposal of subsidiaries and property
Slide 32: Non-GAAP Reconciliation (1 of 3)
Financial Tables Non-GAAP Reconciliation (1 of 3) The following table reconciles Net income to Adjusted EBITDA and Adjusted EBITDA margin: For the three months ended September 30, For the nine months ended September 30, IN MILLIONS 2023 2022 Change 2023 2022 Change Net income $ 36.0 $ 31.0 $ 5.0 $ 6
Slide 33: Non-GAAP Reconciliation (2 of 3)
Financial Tables Non-GAAP Reconciliation (2 of 3) The following table reconciles operating cash flow to Free Cash Flow for the nine months ended September 30, 2023 and 2022: IN MILLIONS 2023 2022 Change Net cash provided by operating activities $ 187.4 $ 154.7 $ 32.7 Capital expenditures: Purchase o
Slide 34: Non-GAAP Reconciliation (3 of 3)
Financial Tables Non-GAAP Reconciliation (3 of 3) The following table reconciles Net income to Adjusted EBITDA and Adjusted EBITDA margin: IN MILLIONS For the year ended December 31, 2022 Net income $ 69.0 Plus: Income from discontinued operations, net of tax (8.3) Income from continuing operations
Slide 35: © 2023 Laureate Education, Inc.
© 2023 Laureate Education, Inc. 35