Laureate Education, Inc. · NASDAQ:LAUR

Laureate Education — Q1 2023 Earnings Presentation

34 slides from Laureate Education's earnings presentation, May 4, 2023

  1. Slide 1: First Quarter 2023 Earnings Presentation

    First Quarter 2023 Earnings Presentation May 4, 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 presentation, Laureate provides the non-GAAP measurements of Adjusted EBITDA and its related margin, Adjusted EBITDA to Unlevered Free Cash Fl

  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  Strong New Enrollment results for cycle one intake ‒ New Enrollments up 17% vs Q1 prior year ‒ Total Enrollments up 8% vs Q1 prior year  First quarter Revenue & Adjusted EBITDA ahead of guidance  Net Loss of $27M in Q1 during seasonally low quarter; $18M improvement vs prior ye

  6. Slide 6: Strategic Priorities for 2023 & Beyond

    Strategic Priorities for 2023 & Beyond1 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 Tau

  7. Slide 7: Multiple Drivers for Revenue Growth

    Multiple Drivers for Revenue Growth1 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 Adjacent Revenue Revenue Growth Majority o

  8. Slide 8: Compelling Investment Characteristics

    COMPELLING INVESTMENT CHARACTERISTICS © 2023 Laureate Education, Inc. 8

  9. Slide 9: 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

  10. Slide 10: Leading University Portfolio in Mexico & Peru

    Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 3/31/23 Segment Overall Ratings / Rankings  Ranked Top 10 university in Mexico Premium/ 1960 99,200  5-Stars rated by QS Stars™ in categories Traditional Mexico Universidad del of Employability & Inclusive

  11. Slide 11: Q1 2023 Performance Results

    Q1 2023 PERFORMANCE RESULTS © 2023 Laureate Education, Inc. 11

  12. Slide 12: 2023 First Quarter – Financial Summary

    2023 First Quarter – Financial Summary Q1 ’23 Variance Vs. Q1 ‘22 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Primary intake for Peru: +14% New Enrollment 95K 17% 17% • Secondary intake for Mexico: +22% • Mexico +9%, Peru +8% Total Enrollment

  13. Slide 13: Segment Results

    SEGMENT RESULTS © 2023 Laureate Education, Inc. 13

  14. Slide 14: Mexico Segment Results

    Mexico Segment Results Q1 Results Notes ($ in millions) Organic/CC (Enrollments rounded to the nearest thousand) Q1 ’23 Vs. Q1 ’22 (1) • Strong results during secondary intake cycle; New Enrollment 38K 22% primary intake for Mexico will occur in September • Driven by new enrollment and strength of T

  15. Slide 15: Peru Segment Results

    Peru Segment Results Q1 Results Notes ($ in millions) Organic/CC (Enrollments rounded to the nearest thousand) Q1 ’23 Vs. Q1 ’22 (1) • Continued strong growth in new enrollment New Enrollment 56K 14% during primary intake cycle Total Enrollment 224K 8% • Driven by new enrollment volume • Enrollment

  16. Slide 16: Outlook

    OUTLOOK © 2023 Laureate Education, Inc. 16

  17. Slide 17: 2023 Outlook – Executive Summary

    2023 Outlook – Executive Summary  Market dynamics remain favorable for the private Higher Education sector in Mexico & Peru; digital education accelerating  2023 Revenue growth is now expected at 14%-15% Vs. 20221 (up 9%-10% on an organic constant currency basis2)  2023 Adjusted EBITDA growth is

  18. Slide 18: 2023 FY Outlook - Updated

    2023 FY Outlook - Updated ($ in millions) Prior Change Current (Enrollments in thousands) FY 2023 Outlook (mid-pt) FY 2023 Outlook (1) Total Enrollment 447K - 455K - 447K - 455K Revenue $1,372 - $1,397 +$35 $1,412 - $1,427 Adjusted EBITDA $387 - $397 +$10 $398 - $406 (1) Based on actual FX rates for

  19. Slide 19: 2023 Outlook (At Mid-Point)

    2023 Outlook (At Mid-Point)1 Total Enrollment (000s) Revenue ($M) +7% +14% 423 451 $1,420 $1,242 2022A 2023E 2022A 2023E Adjusted EBITDA ($M) Adjusted EBITDA Margin % +19% $402 28.3% $339 27.3% 100 bps 2022A 2023E 2022A 2023E Strong Top Line Growth With Continued Margin Expansion (1) Based on actual

  20. Slide 20: Q2 2023 Guidance Details

    Q2 2023 Guidance Details ($ in millions) Q2 2023 Outlook (1) Revenue $433 - $440 Adjusted EBITDA $147 - $151 Continued Revenue Growth Momentum Expected in the Second Quarter Q2 Adjusted EBITDA Includes Final Material Annualization of Return to Campus Expenses (1) Based on actual FX rates for April,

  21. Slide 21: Appendix

    APPENDIX © 2023 Laureate Education, Inc. 21

  22. Slide 22: 2023 First Quarter – Net Income Reconciliation

    2023 First Quarter – Net Income Reconciliation Q1 ’23 B / (W) Vs. Q1 ’22 Notes ($ in millions) Reported $ % Adjusted EBITDA 33 6 23% Depreciation & Amort. (17) (2) (16%) Interest Expense, net (4) (2) n.m. • Net leverage <0.5x Impairments - - n.m. Other (30) (21) n.m. • FX translation loss Income Tax

  23. Slide 23: Capitalization at 3/31/2023

    Capitalization at 3/31/2023 ($ in millions) Total Company as of 3/31/23 Gross Debt $266 Less: Cash & Cash Equivalents ($131) Net Debt $136  Total current shares outstanding of 157M shares as of March 31st Strong Balance Sheet Position © 2023 Laureate Education, Inc. 23

  24. Slide 24: 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 $110 - $125 $44 - $52 Organic Growth % 6% - 7% 9% - 10% 13% - 15% 2023 FY Guidance (Constant Currency

  25. Slide 25: Q2 2023 Guidance Details

    Q2 2023 Guidance Details Q2 Guidance ($ in millions) Revenues Adj. EBITDA 2022 Q2 Results As Reported $385 $144 Timing Impact Intra-Year (academic calendar) $3 $2 2022 Q2 Results Adjusted $388 $146 Organic Growth $38 - $45 $1 - $5 Organic Growth % 10% - 12% 1% - 3% 2023 Q2 Guidance (Constant Currenc

  26. Slide 26: 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

  27. Slide 27: Financial Results & Tables

    Financial Results & Tables © 2023 Laureate Education, Inc. 27

  28. Slide 28: Financial Tables: Consolidated Statements of Operations

    Financial Tables Consolidated Statements of Operations For the three months ended March 31, IN MILLIONS 2023 2022 Change Revenues $ 251.3 $ 209.6 $ 41.7 Costs and expenses: Direct costs 225.3 182.9 42.4 General and administrative expenses 10.3 17.5 (7.2) Loss on impairment of assets — 0.1 (0.1) Oper

  29. Slide 29: Financial Tables: Revenue and Adjusted EBITDA by Segment

    Financial Tables Revenue and Adjusted EBITDA by segment: Quarter IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant March 31, 2023 2022 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 182.0 $ 142.5 28% 16% $ 39.5 $ 22.2 $ —

  30. Slide 30: Financial Tables: Consolidated Balance Sheets

    Financial Tables Consolidated Balance Sheets IN MILLIONS March 31, 2023 December 31, 2022 Change Assets Cash and cash equivalents $ 130.6 $ 85.2 $ 45.4 Receivables (current), net 74.9 80.7 (5.8) Other current assets 73.9 60.3 13.6 Property and equipment, net 538.8 523.4 15.4 Operating lease right-of

  31. Slide 31: Financial Tables: Consolidated Statements of Cash Flows

    Financial Tables Consolidated Statements of Cash Flows For the three months ended March 31, IN MILLIONS 2023 2022 Change Cash flows from operating activities Net loss $ (26.8) $ (44.7) $ 17.9 Depreciation and amortization 16.7 14.4 2.3 Loss (gain) on sales and disposal of subsidiaries and property a

  32. Slide 32: Non-GAAP Reconciliation (1 of 2)

    Financial Tables Non-GAAP Reconciliation (1 of 2) The following table reconciles income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the three months ended March 31, IN MILLIONS 2023 2022 Change Loss from continuing operations $ (26.7) $ (45.4) $ 18.7 Plus: Eq

  33. Slide 33: Non-GAAP Reconciliation (2 of 2)

    Financial Tables Non-GAAP Reconciliation (2 of 2) The following table reconciles operating cash flow to Free Cash Flow for the three months ended March 31, 2023 and 2022: IN MILLIONS 2023 2022 Change Net cash provided by operating activities $ 26.5 $ 53.9 $ (27.4) Capital expenditures: Purchase of p

  34. Slide 34: © 2023 Laureate Education, Inc.

    © 2023 Laureate Education, Inc. 34

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