Slide 1: FY19 Results: a transformative year
...a transformative year FY19 RESULTS
Slide 2: FY19 Key Metrics
FY19 KEY METRICS1,2 Group Operating EBITDA ‘($000) Basic earnings per share - Group Revenue Revenue ‘($000) ($’000) Operating EBITDA ($’000) 3 Basic Earnings per share continuing operations (cents)4 1H 2H 1H 2H 1H 2H 25,000 3,000 1.2 1H 2H 1.0 2,500 20,000 0.8 12,792 2,000 15,000 1.05 0.6 1,500 2,56
Slide 3: Group Overview
GROUP OVERVIEW Tertiary education provider Health and Community Services focus International and domestic students National campus footprint Growing organically and through acquisitions Operating leverage emerging, delivering strong operating cash flows Earnings growth expected to continue as enrolm
Slide 4: Our Businesses
OUR BUSINESSES 3 FY19 revenue: $15.1m $6.9m $52.4m FY19 EBIDTA: $1.1m $1.5m $1.5m Education sector1: Vocational Higher Education Professional Student market1: International Domestic International Students enrolled2: 2,001 449 n/a Acquired: March 2016 July 2018 July 2017 Interest: 100% 100% 25% 1 Rep
Slide 5: Key Highlights
HEADING KEY HIGHLIGHTS FY19 RESULTS 5
Slide 6: FY19 Key Achievements
FY19 KEY ACHIEVEMENTS Operating leverage Record Strategic entry emerging student growth into Higher Education Operating EBITDA ALG international student Ikon acquisition exceeded margin 11.9%, up 381 bps1 enrolments up 27.2% expectations, $1.5m EBITDA Community Services Flagship rollout significantl
Slide 7: FY19 Financial Highlights
FY19 FINANCIAL HIGHLIGHTS 1,2 Revenue Gross profit3 Operating EBITDA3 FY19 2H19 FY19 2H19 FY19 2H19 $22.0m $12.8m $10.5m $6.4m $2.6m $2.6m Group 75.6% 93.7% Group 72.7% 105.6% Group 158.0% 470.9% Organic 20.7% 24.8% Organic 13.3% 26.0% Organic 8.1% 144.0% Operating EBITDA Underlying EBITDA4 Net oper
Slide 8: Strategy on Track
STRATEGY ON TRACK Developing pathways across the student lifecycle Extending lifetime value of student Expanding course offering and campus capacity Degrees Typical duration1: 3 years Typical price1: $47,000 Diplomas Typical duration1: 18 months Typical price1: $13,000 Certificates Typical duration1
Slide 9: Building Foundations for Growth
BUILDING FOUNDATIONS FOR GROWTH1 Capacity Capacity Training Rooms – training rooms Courses Courses – qualifications offered Room Room utilisation – rooms by city Utilisation Vocational Higher Ed Utilised Unutilised 60 25 25 50 20 20 40 38% 15 15 44% 30 10 10 20 62% 63% 5 5 56% 10 29% 85% 37% 71% 0 0
Slide 10: Student Enrolments
STUDENT ENROLMENTS ALG and Ikon student 1,2 enrolments by term Student enrolments (number) 5,000 ■■ Broadening of ALG course ALG student enrolments Ikon student enrolments offering, campus capacity and 4,500 national rollout of Community Services courses continuing to deliver growth 4,000 ■■ Positiv
Slide 11: Student Profile
STUDENT PROFILE All by course Students by city Average Durage (months) By course By city Duration (months)1 3,000 3,000 24.0 2,500 2,500 22.0 2,000 2,000 20.0 1,500 1,500 18.0 1,000 1,000 16.0 500 500 0 0 14.0 2Q16 4Q16 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q16 4Q16 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 FY17 FY18
Slide 12: Financial Results
HEADING FINANCIAL RESULTS FY19 RESULTS 12
Slide 13: Key Highlights – Group Profit and Loss
KEY HIGHLIGHTS – GROUP PROFIT AND LOSS Group Revenue Group EBIDTA Revenue EBITDA 14,000 3,000 25% ALG Ikon ALG Ikon EBITDA Margin 12,000 2,500 20% 10,000 2,000 8,000 15% Inside circle reduced by 70% 1,500 6,000 all should have data attached 10% Inside circle reduced by 70% 4,000 White circle reduced
Slide 14: Group Profit and Loss
GROUP PROFIT AND LOSS Operating leverage emerging ■■ Group revenue up 75.6%, boosted by maiden FY19 FY18 %chg contribution from Ikon. 2H19 revenue up 93.7% Revenue 21,985 12,519 75.6% ■■ Diversification well underway: Cost of sales (11,514) (6,455) (78.4%) — International:domestic revenue 65.1%: 34.
Slide 15: Group Profit and Loss Cont.
GROUP PROFIT AND LOSS CONT. Significant strength in 2H19 2H19 2H18 %chg 1H19 1H18 %chg Revenue 12,792 6,603 93.7% 9,193 5,916 55.4% Cost of sales (6,352) (3,470) (83.1%) (5,162) (2,985) (72.9%) Gross profit 6,440 3,133 105.6% 4,031 2,931 37.5% Gross margin (%) 50.3% 47.4% 2.9% 43.8% 49.5% (5.7%) Ope
Slide 16: ALG
ALG Strong support for Community Services course offering ■■ Strong 2H19 performance with record half-year revenue 2H19 2H18 %chg 1H19 1H18 %chg and EBITDA, aided by increased student numbers and new Melbourne campus achieving break-even Revenue 8,241 6,603 24.8% 6,874 5,916 16.2% Cost of sales (4,2
Slide 17: Ikon
IKON Strategic entry into Higher Education exceeds expectations ■■ Ikon acquired 4 July 2018 as strategic entry into Higher Education sector FY19 2H19 1H19 ■■ Performance exceeded expectations at time of acquisition - $1.5m Revenue 6,870 4,551 2,319 EBITDA for FY19 - largely attributable to outperfo
Slide 18: Balance Sheet and Cashflow
BALANCE SHEET AND CASHFLOW Strong cash generation in 2H19 30 Jun-19 31 Dec-18 30 Jun-18 ■■ Cash balance strengthened to $4.7m at year end from $1.6m at 31 December 2018 $’000 $’000 $’000 Cash and cash equivalents 4,689 1,597 6,595 ■■ Operating cashflow significantly improved - $3.3m in 2H19 Trade an
Slide 19: Ikon Earn-out Payment
IKON EARN-OUT PAYMENT Fully-funded Pro-forma ■■ Ikon exceeded expectations at time of acquisition - $1.5m Drawn Limit EBITDA for FY19 - largely attributable to outperformance of 30 Jun-19 30 Jun-19 drawn post Gearing earn-out HE offering $’000 $’000 payment(1) $’000 ■■ Earn-out payment capped at $6.
Slide 20: FY20 Priorities and Outlook
HEADING FY20 PRIORITIES AND OUTLOOK FY19 RESULTS 20
Slide 21: FY20 Priorities
FY20 PRIORITIES Integration of Ikon and ALG Leverage ALG agent network for Ikon HE programs Continue ALG national course rollout Program development in Ikon and ALG Build organisational capacity with a focus on academic and compliance Target strategic acquisitions that supplement our campus, course
Slide 22: FY20 Outlook
FY20 OUTLOOK Continued student growth expected — ALG FY20 enrolments off to a strong start – 1Q20 enrolments of 2,117, up 41.3% on PCP — New Melbourne campus continuing to perform strongly Operating margin expected to improve — Tempered by planned further investment in organisational capacity and to
Slide 23: Appendices
HEADING APPENDICES FY19 RESULTS 23
Slide 24: Capital Structure
CAPITAL STRUCTURE(4) Pro-forma 30 Jun-19 post earn-out % Diluted payment Ordinary shares 110,821,249 110,821,249 91.3% Options(1) 800,000 800,000 0.7% Performance rights(2) 1,600,000 1,600,000 1.3% Shares to be issued to Ikon vendors at $0.16 per share (3) - 8,125,000 6.7% Fully diluted 113,221,249
Slide 25: Course Offering
COURSE OFFERING ■■ 6 higher education qualifications (incl. Higher Education (Bachelor degrees) Job outcomes nested diploma and associate degrees) Arts Therapy Counselor or psychotherapist ■■ 16 vocational qualifications (certificates Counselling and Psychotherapy Counselor or psychotherapist and di
Slide 26: Student Diversity
STUDENT DIVERSITY 0 20 40 60 80 100 ALG international student enrolments by source region1 0 20 40 60 80 100 Other ■■ International students from > 75 source Latam, 33.5% Asia, 28.3% Europe, 33.8% 4.4% countries Other Latam, 33.5% Asia, 28.3% Europe, 33.8% 4.4% ■■ Top 20 source countries represent 8
Slide 27: Board and Executives
BOARD AND EXECUTIVES Adam Davis, BAppFin (Macquarie University) Gary Burg, BAcc (Wits), MBA (Wits) Chief Executive Officer and Managing Director Non-Executive Chair Adam has extensive experience in the education sector as founder Gary has been involved with Global Capital Group since 1995 in South A
Slide 28: Contacts
CONTACTS Adam Davis Lyndon Catzel Chief Executive Officer Chief Financial Officer E: adam@ucw.com.au E: lyndon@ucw.com.au P: +61 2 9112 4541 P: +61 2 9112 4540 M: 0408 400 888 M: 0414 907 384 FY19 RESULTS 28
Slide 29: Disclaimer
DISCLAIMER This presentation, dated 30 August 2019, provides additional commentary on the Financial Report for the year ended 30 June 2019 for UCW Limited (UCW or the Company) and accompanying information provided to ASX on the same date. As such, it should be read in conjunction with those document
Slide 30: Limited
LIMITED