Laureate Education, Inc. · NASDAQ:LAUR

Laureate Education — Q4 2022 Earnings Presentation

40 slides from Laureate Education's earnings presentation, Feb 23, 2023

  1. Slide 1: Fourth Quarter & Year-End 2022 Earnings Presentation

    Fourth Quarter & Year-End 2022 Earnings Presentation February 23, 2023 © 2023 Laureate Education, Inc. 1

  2. 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

  3. 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 press release, Laureate provides the non-GAAP measurements of Adjusted EBITDA and its related margin, Adjusted EBITDA to Unlevered Free Cash F

  4. Slide 4: Summary Overview

    SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding © 2023 Laureate Education, Inc. 4

  5. Slide 5: Executive Summary

    Executive Summary  Fourth quarter Revenue & Adjusted EBITDA ahead of guidance; Net Income of $39M in Q4  Robust performance in FY 2022 – accelerated growth and margin expansion ‒ Full year New and Total Enrollments up 13% and 9%, respectively, versus prior year ‒ Delivered double-digit growth in R

  6. Slide 6: Key Academic Highlights in 2022

    Key Academic Highlights in 2022 UPC in Peru: For the second consecutive year, UPC has obtained the 1st position in the education sector in the MERCO 2022 corporate reputation ranking and 12th overall among Universidad Peruana de Ciencias Aplicadas (UPC) all organizations across various industries at

  7. Slide 7: New Laureate has Significantly Improved its Financial Characteristics

    New Laureate has Significantly Improved its Financial Characteristics 5% 451K 423K Target Profile: Metric 388K Within Next 3-5 years 354K 366K 337K New Enrollments COVID Impact 5% - 7% CAGR (compound annual growth rate) Total Enrollments Revenue 8% - 10% CAGR (FXN) 18A 19A 20A 21A 22A 23E 1 Total En

  8. Slide 8: Strategic Priorities for 2023 & Beyond

    Strategic Priorities for 2023 & Beyond Target Profile: Priority Objective Within Next 3-5 years Sustainably lift organic revenue Total Enrollment CAGR: 5% - 7% Growth growth rate from drivers identified on the following page Revenue CAGR (FXN): 8% - 10% Leverage leadership in Online and % Hours Taug

  9. Slide 9: Multiple Drivers for Revenue Growth

    Multiple Drivers for Revenue Growth Revenue Growth Targets Over Next 3-5 Years Phase II Priorities 8% - 10% Phase I Priorities 5% - 7% Pre - Pandemic Online Expansion Program Expansion New Campuses EdTech Products Targeted Future Organic Trends / Digital & Other Revenue Growth Majority of Growth Ini

  10. Slide 10: Compelling Investment Characteristics

    COMPELLING INVESTMENT CHARACTERISTICS © 2023 Laureate Education, Inc. 10

  11. Slide 11: 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% 52% 37% 62% 54% Participation Rate1 Market Share for 42% 73% 53% Private Institutions2 Sources: UNESC

  12. Slide 12: Leading University Portfolio in Mexico & Peru

    Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 12/31/22 Segment Overall Ratings / Rankings  Ranked Top 10 university in Mexico Premium/ 1960 103,700  5-Stars rated by QS Stars™ in categories Traditional Mexico Universidad del of Employability & Inclusi

  13. Slide 13: Q4 & FY 2022 Performance Results

    Q4 & FY 2022 PERFORMANCE RESULTS © 2023 Laureate Education, Inc. 13

  14. Slide 14: 2022 Fourth Quarter – Financial Summary

    2022 Fourth Quarter – Financial Summary Q4 ’22 Variance Vs. Q4 ‘21 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 New Enrollment 6K 26% 26% • Not a material intake period • Mexico +9%, Peru +8% Total Enrollment 423K 9% 9% • Driven by new enrollmen

  15. Slide 15: 2022 FY – Financial Summary

    2022 FY – Financial Summary FY ’22 Variance Vs. FY ‘21 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Strong intakes during 2022 New Enrollment 219K 13% 13% • Mexico +16%, Peru +8% Total Enrollment 423K 9% 9% • Mexico +9%, Peru +8% • Driven by e

  16. Slide 16: Segment Results

    SEGMENT RESULTS © 2023 Laureate Education, Inc. 16

  17. Slide 17: Mexico Segment Results

    Mexico Segment Results Q4 Results FY Results Notes ($ in millions) Organic/CC Organic/CC (Enrollments rounded to the nearest Q4 ’22 FY ’22 thousand) Vs. Q4 ’21 (1) Vs. FY ’21 (1) • Strong primary intake in New Enrollment 5K 21% 139K 16% September Total Enrollment 223K 9% 223K 9% • Driven by NE growt

  18. Slide 18: Peru Segment Results

    Peru Segment Results Q4 Results FY Results Notes ($ in millions) Organic/CC Organic/CC (Enrollments rounded to the nearest Q4 ’22 FY ’22 thousand) Vs. Q4 ’21 (1) Vs. FY ’21 (1) • Continued strong growth in New Enrollment 1K n.m. 80K 8% new enrollment • Driven by new enrollment Total Enrollment 200K

  19. Slide 19: Q4 2022 Capitalization and Return of Capital

    Q4 2022 Capitalization and Return of Capital ($ in millions) Total Company as of 12/31/22 Gross Debt $234 Less: Cash & Cash Equivalents ($85) Net Debt $149 Significant Return of Capital During the Fourth Quarter • Total current shares outstanding of 157M shares as of December 31st • Q4 Return of Cap

  20. Slide 20: Outlook

    OUTLOOK © 2023 Laureate Education, Inc. 20

  21. Slide 21: 2023 Outlook – Executive Summary

    2023 Outlook – Executive Summary  Market dynamics remain favorable for the private sector in Mexico & Peru; digital education accelerating  2023 Revenue growth expected at 10%-12% Vs. 20221 (up 8%-10% on an organic constant currency basis2)  2023 Adjusted EBITDA growth expected at 14%-17% Vs. 202

  22. Slide 22: 2023 Outlook

    2023 Outlook1 ($ in millions) Current (Enrollments rounded to the nearest thousand) FY 2023 Outlook (1) Total Enrollment 447K - 455K Revenue $1,372 - $1,397 Adjusted EBITDA $387 - $397 (1) Based on actual FX rates for January, and spot FX rates (local currency per US dollar) of MXN 18.59 & PEN 3.86

  23. Slide 23: 2023 Outlook (At Mid-Point)

    2023 Outlook (At Mid-Point)1 Total Enrollment (000s) Revenue ($M) +7% +11% 423 451 $1,385 $1,242 2022A 2023E 2022A 2023E Adjusted EBITDA ($M) Adjusted EBITDA Margin % +16% $392 28.3% $339 27.3% 100 bps 2022A 2023E 2022A 2023E Strong Top Line Growth With Continued Margin Expansion (1) Based on actual

  24. Slide 24: Q1 2023 Guidance Details

    Q1 2023 Guidance Details ($ in millions) Q1 2023 Outlook (1) Revenue $230 - $235 Adjusted EBITDA $16 - $21 Q1 Reflects Largely Out-of-Session Seasonally Low Period And Annualization of Return to Campus Expenses (1) Based on actual FX rates for January, and spot FX rates (local currency per US dollar

  25. Slide 25: Appendix

    APPENDIX © 2023 Laureate Education, Inc. 25

  26. Slide 26: 2022 Fourth Quarter – Net Income Reconciliation

    2022 Fourth Quarter – Net Income Reconciliation Q4 ’22 B / (W) Vs. Q4 ’21 Notes ($ in millions) Reported $ % Adjusted EBITDA 95 34 56% • Strong margin expansion in Q4 Depreciation & Amort. (16) 10 39% Interest Expense, net (3) 1 19% • Low leverage Impairments - 5 n.m. Other (15) 32 n.m. • FX Gain/(L

  27. Slide 27: 2022 FY – Net Income Reconciliation

    2022 FY – Net Income Reconciliation FY ’22 B / (W) Vs. FY ’21 Notes ($ in millions) Reported $ % Adjusted EBITDA 339 86 34% • PY included $13M non-cash FAS5 charge Depreciation & Amort. (59) 42 42% Interest Expense, net (9) 33 79% • Repayment of debt Impairments - 72 n.m. • Impairment charges in pri

  28. Slide 28: 2023 Full Year Guidance Details

    2023 Full Year Guidance Details ($ in millions) Total (Enrollments rounded to the nearest thousand) Revenues Adj. EBITDA Enrollment 2022 FY Results Adjusted 423K $1,242 $339 Organic Growth 24K - 32K $100 - $125 $42 - $52 Organic Growth % 6% - 7% 8% - 10% 12% - 15% 2023 FY Guidance (Constant Currency

  29. Slide 29: Q1 2023 Guidance Details

    Q1 2023 Guidance Details 1Q Guidance ($ in millions) Revenues Adj. EBITDA 2022 Q1 Results As Reported $210 $27 Timing Impact Intra-Year (academic calendar) ($3) ($3) 2022 Q1 Results Adjusted $207 $24 Organic Growth $16 - $21 ($10) - ($5) Organic Growth % 8% - 10% (42%) - (21%) 2023 Q1 Guidance (Cons

  30. Slide 30: 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

  31. Slide 31: Financial Results & Tables

    Financial Results & Tables © 2023 Laureate Education, Inc. 31

  32. Slide 32: Financial Tables – Statements of Operations

    Financial Tables Consolidated Statements of Operations For the three months ended December 31, For the year ended December 31, IN MILLIONS 2022 2021 Change 2022 2021 Change Revenues $ 346.3 $ 296.7 $ 49.6 $ 1,242.3 $ 1,086.7 $ 155.6 Costs and expenses: Direct costs 252.3 237.3 15.0 907.4 814.5 92.9

  33. Slide 33: Financial Tables – Segment Results: Quarter

    Financial Tables Revenue and Adjusted EBITDA by segment: Quarter IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant December 31, 2022 2021 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 179.0 $ 149.5 20% 14% $ 29.5 $ 21.2

  34. Slide 34: Financial Tables – Segment Results: Year-to-Date

    Financial Tables Revenue and Adjusted EBITDA by segment: Year-to-Date IN MILLIONS % Change $ Variance Components Organic Organic For the year ended Constant Constant December 31, 2022 2021 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Mexico $ 613.9 $ 540.4 14% 12% $ 73.5 $ 67.2 $ —

  35. Slide 35: Financial Tables – Consolidated Balance Sheets

    Financial Tables Consolidated Balance Sheets IN MILLIONS December 31, 2022 December 31, 2021 Change Assets Cash and cash equivalents $ 85.2 $ 324.8 $ (239.6) Receivables (current), net 80.7 152.0 (71.3) Other current assets 60.3 67.5 (7.2) Property and equipment, net 523.4 499.5 23.9 Operating lease

  36. Slide 36: Financial Tables – Statements of Cash Flows

    Financial Tables Consolidated Statements of Cash Flows For the year ended December 31, IN MILLIONS 2022 2021 Change Cash flows from operating activities Net income $ 69.0 $ 203.8 $ (134.8) Depreciation and amortization 59.1 101.2 (42.1) Amortization of operating lease right-of-use assets 29.4 44.1 (

  37. Slide 37: Non-GAAP Reconciliation (1 of 3)

    Financial Tables Non-GAAP Reconciliation (1 of 3) The following table reconciles income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the three months ended December 31, For the year ended December 31, IN MILLIONS 2022 2021 Change 2022 2021 Change Income (loss)

  38. Slide 38: Non-GAAP Reconciliation (2 of 3)

    Financial Tables Non-GAAP Reconciliation (2 of 3) The following table presents Free cash flow and reconciles Net cash flows from operating activities to Free cash flow: For the year ended December 31, IN MILLIONS 2022 2021 2020 Net cash provided by (used in) operating activities $ 178.2 $ (156.1) $

  39. Slide 39: Non-GAAP Reconciliation (3 of 3)

    Financial Tables Non-GAAP Reconciliation (3 of 3) The following table reconciles Loss from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the year ended December 31, IN MILLIONS 2020 2019 2018 Loss from continuing operations $ (320.6) $ (150.5) $ (191.3) Plus: Equity in net

  40. Slide 40: © 2023 Laureate Education, Inc.

    © 2023 Laureate Education, Inc. 40

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