Slide 1: FY23 Results Presentation
ASX RELEASE 28 AUGUST 2023 FY23 RESULTS PRESENTATION NextEd Group Limited (ASX:NXD) (NextEd or the Company) is delighted to release its results presentation for the year ended 30 June 2023 (FY23). NextEd invites investors to attend a webcast today at 10:30am (AEST) to discuss the results which is be
Slide 2: FY23 Results Presentation
FY23 Results Presentation 28 August 2023
Slide 3: Contents
Contents 1. Executive summary 3 2. FY23 results 4 3. The future 17 4. Appendix 28 2
Slide 4: Executive summary
Executive summary Page reference 1. Record financial performance in FY23 5 2. Confidence in FY24 guidance – continued growth 18 3. High campus utilisation and transitioning licensed rooms to improve yield 10 - 11 4. Organic expansion investments expected to deliver strong returns 19 – 21 5. Alternat
Slide 5: FY23 results
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Slide 6: FY23 – a record performance
FY23 – a record performance FY23 financial results Revenue EBITDA1 Operating cash flows2 $102.2m $55.4m vs FY22 $16.7m $13.1m vs FY22 $25.2m $8.2m vs FY22 Net profit after tax (adjusted)4 Cash at bank3 $5.5m $9.4m vs FY22 $40.2m $10.0m vs JUNE 22 ▪ Record revenue growth driven by increase in number
Slide 7: FY23 – lead indicator performance
FY23 – lead indicator performance Lead indicators International ▪ Growth across key lead English language Vocational new confirmed enrolments actively studying students indicators in FY23 – contributed to strong financial performance 202% 425% FY23 vs FY22 Jun23 vs Jun22 ▪ Clear market share gained
Slide 8: Revenue & EBITDA growth
Revenue & EBITDA growth Revenue by operating segment EBITDA – excluding M&A costs* Increase Decrease Total ▪ Outstanding growth in International Vocational ▪ Operating leverage resulted in doubling of division driven by out-performance in English EBITDA margin – from 8% in FY22 to 16% in language st
Slide 9: Exceptional operating cash flows
Exceptional operating cash flows Operating cash flows Total cash flows 30,000 25,000 20,000 $000’s 15,000 $25,180 10,000 $17,013 5,000 (2) (3) (3) 0 (1) FY22 FY23 1. Excludes M&A costs (FY22: $5.8m, FY23: nil). 2. Financing activities includes payment of $6.9m to support bank guarantees 2. Cash bala
Slide 10: Balance sheet positioned to support growth
Balance sheet positioned to support growth Cash balance Contract liabilities Balance sheet summary (Deferred revenues) $000’s Jun 2022 Dec 2022 Jun 2023 45,000 50,000 Cash 27,161 35,511 30,264 40,000 45,000 $3,052 Term deposits for bank guarantees 3,050 3,052 9,931 35,000 $9,931 40,000 Total cash an
Slide 11: 95% aggregate campus utilisation
95% aggregate campus utilisation Number of classrooms by Classroom daytime utilisation at end of NextEd campus locations state at June 2023 June 2023 120 NSW 45 VIC 100 10 no. of classrooms 8 24 Brisbane 4 92 QLD 80 old oast 34 SA 60 WA 92 erth 40 75 11 Adelaide Sydney 4 75 Licensed rooms 20 30 elbo
Slide 12: Moving from licensed classrooms to leased campuses to improve yield
Moving from licensed classrooms to leased campuses to improve yield 300 250 13 45 No. of classrooms 200 150 256 100 213 50 0 Jun-23 Dec-23 Leased Licensed ▪ Short-term licensed classrooms have been used by NextEd to manage student overflow and flex capacity ▪ To improve the student experience and pr
Slide 13: FY23 divisional performances
FY23 divisional performances 12
Slide 14: Go Study Australia – rebuilding pipeline
Segment Results Go Study Australia – rebuilding pipeline Revenue* EBITDA* 6,000 250 ▪ Half-on-half revenue growth in 200 5,000 FY23 150 4,000 100 $186 $2,671 $000's $000's ▪ 1H23 EBITDA impacted by 3,000 $2,439 50 $(15) $26 0 investment to re-open offshore 2,000 -50 $(71) recruitment offices 1,000 $
Slide 15: International Vocational – delivered rapid growth
Segment Results International Vocational – delivered rapid growth ▪ EBITDA growth driven by Revenue* EBITDA* Revenue mix* revenue growth and 80,000 operating leverage from 25,000 70,000 higher campus utilisation 60,000 20,000 19% 26% ▪ Targeting broad nationality 50,000 $46,830 $000's 15,000 6% $000
Slide 16: Domestic Vocational – repositioned
Segment Results Domestic Vocational –repositioned ▪ FY23 activities focussed on Revenue EBITDA transitioning from unprofitable to 12,000 2,400 profitable revenue 10,000 1,900 ▪ EBITDA improved from divisional 8,000 $4,341 $408 $000’s $000's 1,400 restructure, cost management and 6,000 $3,487 ceasing
Slide 17: Technology & Design – slow international student return
Segment Results Technology & Design – slow international student return ▪ H2 FY23 revenue impacted by higher Revenue* EBITDA* 4,000 number of completing students than 18,000 16,000 commencements due to lack of 14,000 3,000 $884 12,000 $6,386 enrolments during covid and some $000’s $000’s 10,000 $6,6
Slide 18: The future
The future 3 17
Slide 19: FY24 financial guidance
FY24 financial guidance This guidance takes a conservative stance that the temporary COVID-19 408 Visa remains in place for all FY24 ▪ NextEd reconfirms its guidance that revenues for the half year period ending 31 December 2023 (H1 FY24) will be in the range of $59.0 million to $63.0 million, 35% t
Slide 20: Campus expansions – enabling growth with compelling returns
Campus expansions – enabling growth with compelling returns RECENT CAMPUS INVESTMENTS ▪ Brisbane campus launched in June 2022 and delivered $6.0m revenue and $1.7m EBITDA (pre-AASB 16) in FY23 (with over 1,100 students at end of June 2023) – capital investment was approximately $3.0m which is expect
Slide 21: Strategic investments supporting future growth
Strategic investments supporting future growth FY23 actual capex - $6.1m FY24 forecast capex - $12.5m 6,000 12,000 5,000 10,000 Sydney Adelaide Gold Coast 4,000 8,000 Melbourne $000’s Sydney $000’s 3,000 6,000 Gold Coast 2,000 4,000 Brisbane Melbourne 1,000 2,000 Brisbane 0 0 Campus Course IT & othe
Slide 22: New course launches – targeting new markets
New course launches – targeting new markets ▪ 6 vocational certificate and diploma hospitality and cookery courses delivered to international students were launched in Perth, Brisbane and Gold Coast in FY23 - NextEd have launched these courses in Sydney and Melbourne commencing in August 2023 ▪ Dome
Slide 23: International students – initiatives to underpin future enrolments
International students – initiatives to underpin future enrolments ▪ NextEd’s current priority growth drivers include: ‒ geographic and course range expansion New international student confirmed enrolments ‒ tapping into recruitment agent intelligence to capture in each quarter likely influx of shor
Slide 24: Strong English language student numbers
Strong English language student numbers Active English language students at the end of each period ▪ NextEd’s English language tuition 7,000 revenues are expected to materially increase in FY24 against the prior year 6,000 ▪ Targeting nationalities where students 5,000 generally study for longer per
Slide 25: Capital management
Capital management NextEd have completed detailed modelling and analysis of alternative uses of capital – dividends, organic growth, M&A and share buybacks. ▪ Organic growth: circa 2 year cash paybacks are compelling ▪ Licensed classrooms: necessary for overflow, but optimal yield is from leased - t
Slide 26: External market factors
External market factors ▪ Temporary COVID-19 408 Visa: NextEd is putting mitigating activities(1) in place and preparing to capture demand when visa ends ▪ Fit and proper person standards: NextEd welcomes the Australian Government announcement last Friday(2) to strengthen rules to eliminate non-genu
Slide 27: Summary
Summary ▪ FY23 provided shareholders with $25m of operating cash flow generation from a doubling of revenues, 4.6x EBITDA, and reversing negative NPAT into materially positive NPAT yoy ▪ From this, we have strengthened foundations: classroom capacity; expansion into high demand courses (ELICOS, hosp
Slide 28: Thank You
Thank Glenn Elith Michael Fahey Level 2, 7 Kelly Street You Chief Executive Officer glenn.elith@nexted.com.au Chief Financial Officer michael.fahey@nexted.com.au Ultimo NSW 2007 nexted.com.au 27
Slide 29: Appendix
Appendix 4 28
Slide 30: NextEd’s differentiated market position – sustainable competitive advantages
NextEd’s differentiated market position – sustainable competitive advantages Diversified earnings base: Strong regulatory compliance (proper fees + real ▪ Broad course range in English language, vocational and classrooms = genuine students): higher education segments ▪ International students must at
Slide 31: Financial highlights
Financial highlights Revenue EBITDA* Operating cash flows** FY23 up 110,000 FY23 up FY23 up 48% 18,000 30,000 118% vs PCP 100,000 366% vs PCP vs PCP 16,000 90,000 25,000 Growth driven by Strong revenue Exceptional 80,000 14,000 exceptional contribution and operating cash $25,180 performance in 70,00
Slide 32: Reported profit & loss
Reported profit & loss Full year actuals ($000’s) Change FY23 H1 FY23 H2 FY23 FY22 H1 FY22 H2 FY22 $000’s % Revenue 102,220 43,574 58,646 46,819 18,237 28,582 55,401 118 Agent commissions (19,527) (7,451) (12,076) (7,001) (2,791) (4,210) (12,526) (179) Education expenses (25,825) (10,618) (15,207) (
Slide 33: Cash flow statement
Cash flow statement FY23 FY22 $000’s $000’s Operating activities (excl. M&A costs) 25,180 17,013 M&A costs - (5,813) Investing activities 1 (6,146) 18,416 Financing activities (15,931) (7,004) Net increase in cash and cash equivalents 3,103 22,612 Cash and cash equivalents at the beginning of the ye
Slide 34: Non-IFRS information
Non-IFRS information FY23 FY22 ■ The Company uses certain measures to manage and report on its business that are not recognised under $000’s $000’s Australian Accounting Standards (‘AAS’). These measures Net profit / (loss) after tax (adjusted) 5,465 (3,914) are collectively referred to as non-IFRS
Slide 35: Segment restatement – FY22
Segment restatement – FY22 Full year actuals ($000’s) Variance ▪ Operating segments for domestic FY22 FY22 and international vocational students $000’s Previous structure Revised structure were restructured at the beginning Revenue Revenue of FY23 to better service student markets and leverage organ
Slide 36: Segment revenue & EBITDA
Segment revenue & EBITDA Full year actuals ($000’s) Variance FY23 FY22 $000’s % Revenue International Vocational 74,720 23,470 51,250 218% Technology & Design 15,446 10,345 5,101 49% Go Study 5,133 3,386 1,747 52% Domestic Vocational 8,218 10,150 (1,932) (19)% Eliminations / Other (1,297) (532) (765
Slide 37: NextEd campus details
NextEd campus details June 2023 December 2023 Change + / (-) Campus Leased Licensed Leased Licensed Leased Licensed Total Total Total premises classrooms premises classrooms premises classrooms Sydney 92 10 102 98 4 102 6 (6) - Melbourne 75 24 99 91 8 99 16 (16) - Brisbane 24 10 34 37 - 37 13 (10) 3
Slide 38: Average student numbers by segment
Average student numbers by segment International Vocational Technology & Design Domestic Vocational 8000 900 500 566 800 450 7000 700 90 400 6000 135 2,756 350 600 5000 300 500 4000 648 489 250 400 425 200 429 3000 388 300 3,259 150 2000 4,200 200 100 1000 100 192 192 50 583 0 0 0 FY22 FY23 FY22 FY2
Slide 39: Important notice & disclaimer
Important notice & disclaimer Summary Information Past Performance This Presentation contains summary information about NextEd Group Limited and its activities which is current The past performance and position of NextEd Group Limited reflected in this Presentation is given for only as at the date