Somos Educação — Investor Presentation (November 2016)
21 slides from Somos Educação's investor presentation, Nov 22, 2016
Slide 1: Meeting with Investors
Meeting with Investors November 22, 2016
Slide 2: Agenda
AGENDA I. Strategic Guidelines and Business Model - Eduardo Mufarej (CEO) (10:00am – 10:30am) II. Financial Update - Daniel Amaral (CFO and IRO) - (10:30am – 11:00am) III. Q&A - (11:00am – 11:30am) 2
Slide 3: Business Model
Business Model
Slide 4: Somos Educação at a Glance
Somos Educação at a Glance Somos Educação (“Somos”) is Brazil’s largest K-12 platform Company Highlights Ownership Structure ► Somos Educação is the largest K-12 group in Brazil as well as one of the world's largest groups in the segment Free-Float ► Broad portfolio of integrated educational solutio
Slide 5: Overview of Business Segments
Overview of Business Segments 1 2 Prop. Schools, Prep. Courses & 3 Higher K-12 Educational Solutions Language Education Solutions After School + English Traditional Publishing K-12 Schools & Higher Education Segment Segmento Learning Systems as a Second Language / Digital Courses Solutions (“ESL”) f
Slide 6: What has Changed and Where We are Headed
What has Changed and Where We are Headed Somos Educação has significantly adjusted its business model and strategy to become a scalable education platform with a fully integrated product offering… 1 ► Broader and stronger portfolio of solutions ► Limited learning systems and textbooks portfolio (hig
Slide 7: What has Changed and Where We are Headed (Cont'd)
What has Changed and Where We are Headed (Cont’d) …and is headed to become the full curriculum solutions provider in Brazil Previous Business Model Somos Today Where we are Headed Products Solutions Portfolio Customizable Solutions Broad and high quality solutions portfolio of books, Full developmen
Slide 8: Strategic Guidelines
Strategic Guidelines x t vee ‘ _ aK
Slide 9: Large Untapped Market
Large Untapped Market From an investors’ perspective, there are better fundamentals for K-12 than for higher education in Brazil K-12 Higher Education Key Takeaways 9.1 mm students in private schools 5.9 mm students in private schools 40.7 mm students in public schools K-12 market is 6x larger
Slide 10: The Partner of Choice for Education Solutions
The Partner of Choice for Education Solutions Business model focused on long-term relationships with partner schools Traditional Publishing / Digital Integrated Offering of K-12 Educational Teacher Solutions Learning Training Systems Development of a relational approach with schools Dominance of
Slide 11: Education-as-a-Service
Education-as-a-Service Somos is the best positioned player to become a full Education-as-a-Service provider, due to its unique portfolio of solutions and integrated capabilities Past – Education as a Product Future – EaaS Progress Content delivered in an optimal form for each school No technolog
Slide 12: Proprietary K-12 Schools: Proven Execution
Proprietary K-12 Schools: Proven Execution We operate a proven proprietary school platform, which is our main focus for the Company’s next growth wave Strengths of Somos’ Platform Brands and Footprint # of Acquisition Selected Achievements Brand State Units Year Top-of-mind Brands RJ 16 2012 DF 4
Slide 13: Proprietary K-12 Schools: Platform in Place to Consolidate
Proprietary K-12 Schools: Platform in Place to Consolidate Somos has structured a winning “plug and play” proprietary schools platform to run both operational and pedagogical integration Know-how and Capabilities in Place M&A Track-record and Expertise Operational Integration Educational Integration
Slide 14: Strong Corporate Culture
Strong Corporate Culture First step: integration of 10 + companies under a single culture Our DNA How We Do it Initiatives Meritocracy environment Individual evaluation and bonus compensation throughout Goals & Clear employee’s several work levels Performance assessment process Integration of the co
Slide 15: Financial Update
Financial Update SS.
Slide 16: K12 - Learning Systems Number of Students
K12 - Learning Systems Number of Students - '000‘¹ Private Public Consolidated +16% +23% 770 128 -20% 872 751 624 102 9M15 9M16 9M15 9M16 9M15 9M16 The Leader in Me (OLEM) - Number of Students - '000' 121 +39% 87 9M15 9M16 (1) Considers Ético Learning Systems. On a comparable basis, ex Ético, the to
Slide 17: K12 - Publishing
K12 - Publishing Historical Market Share PNLD (purchase) PNLD 2017 Market Share (purchase) Middle School Other 7% Publisher D 6% 46% Publisher C 43% 8% Atica, 40% Scipione e 37% Saraiva 30% Publisher B 43% 17% Publisher A 21% 2012 2013 2014 2015 2016 17
Slide 18: Revenue and Adjusted EBITDA
Revenue and Adjusted EBITDA Pro Forma Revenue Growth - 9M15 vs. 9M16 (R$ mm) 1097,7 (57,7) 59,3 (3,4) 1086,6 (9,3) -1% 9M15 K12 SETs Schools and Language Other 9M16 Pro Forma Adjusted EBITDA¹ Growth - 9M15 vs. 9M16 (R$ mm) 308,9 (45,6) (11,0) (6,4) (0,8) 245,2 -21% 9M15 K12 SETs Schools and Language
Slide 19: Capex Investments
Capex Investments - (R$ mm) -17% 140,6 31,2 117,4 -32% 21,3 109,4 -12% 96,1 9M15 9M16 This reduction is mainly explained by the expenses with the implementation of SSC (Shared Services Center) in 2015 and optimization of the portfolio product and content generation with synergies from Saraiva. 19
Slide 20: Capital Structure
Capital Structure Cash and Debt (R$ mm)¹ 1658 1675 1700 1725 269 359 444 389 Cash Net Debt 1389 1317 1256 1336 4Q15 1Q16 2Q16 3Q16 (1) Does not consider the financial assets related to deposits in escrow account and value corresponding to the balance of the debt of Saraiva Educação acquisition. 20
Slide 21: SOMOS Educação - Investor Relations
SOMOS Educação - Investor Relations ri@somoseducacao.com.br www.abrileducacao.com.br/investors Legal Disclaimer: This document must not be considered a recommendation for investment in the Company. Before investing, investors should conduct their own analysis and valuation of the Company, its busine
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