Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q2 2022 Earnings Presentation
38 slides from Laureate Education's earnings presentation, Aug 4, 2022
Slide 1: Second Quarter 2022 Earnings Presentation
Second Quarter 2022 Earnings Presentation August 4, 2022 © 2022 Laureate Education, Inc. 1
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
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, Adjusted EBITDA margin, total cash, net of debt (or net cash),
Slide 4: Summary Overview
SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding Amounts presented for enrollments, Revenue, Adjusted EBITDA and Adjusted EBITDA margin are for continuing operations only © 2022 Laureate Education, Inc. 4
Slide 5: Executive Summary
Executive Summary New and Total Enrollments up 11% YTD vs prior year period Q2 Results ahead of expectations ‒ Revenue favorability driven by enrollments and mix ‒ Adjusted EBITDA upside resulting from higher revenue and operating leverage (partially offset by expense timing shift to 2H) Net I
Slide 6: Compelling Investment Characteristics
COMPELLING INVESTMENT CHARACTERISTICS © 2022 Laureate Education, Inc. 6
Slide 7: Large Markets with Low Penetration Rates in Higher Education
Large Markets with Low Penetration Rates in Higher Education Mexico Peru Combined Population (M) 128M 32M 160M Higher Education Students 5,005 1,642 6,647 (000s) Higher Education Gross U.S. E.U. 34% 47% 36% Participation Rate1 65% 54% Market Share for 42% 69% 51% Private Institutions2 Sources: UNESC
Slide 8: Leading University Portfolio in Mexico & Peru
Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 6/30/22 Segment Overall Ratings / Rankings Ranked Top 10 university in Mexico Premium/ 1960 90,700 5-Stars rated by QS Stars™ in categories Traditional Mexico Universidad del of Employability & Inclusive
Slide 9: Digital Learning During Pandemic Accelerated Capital Light Operating Model
Digital Learning During Pandemic Accelerated Capital Light Operating Model Laureate to enable significant growth, without large-scale investments in campus expansions, through increased mix of Digital Learning Percentage of Teaching Hours Delivered Online 100% 40% – 60% 27% 2019 2020 /2021 2022+ (Pr
Slide 10: Multiple Vectors for Revenue Growth
Multiple Vectors for Revenue Growth Expected Medium-Term Revenue Growth Phase II Priorities 8% - 10% Phase I Priorities 5% - 7% Pre-Pandemic COVID Recovery Online Expansion Program Expansion New Campuses Scaling EdTech/B2B Targeted Future Organic Trends / Digital (Monetize IP) Revenue Growth Majorit
Slide 11: Q2 & YTD 2022 Performance Results
Q2 & YTD 2022 PERFORMANCE RESULTS © 2022 Laureate Education, Inc. 11
Slide 12: 2022 Second Quarter – Financial Summary
2022 Second Quarter – Financial Summary Q2 ’22 Variance Vs. Q2 ‘21 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 New Enrollment 23K 18% 18% • Strong secondary intake for Mexico Total Enrollment 389K 11% 11% • Peru +15%, Mexico +8% • Driven by hig
Slide 13: 2022 Q2 YTD – Financial Summary
2022 Q2 YTD – Financial Summary Q2 YTD ’22 Variance Vs. Q2 YTD ‘21 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Strong primary intake for Peru and New Enrollment 104K 11% 11% secondary intake for Mexico Total Enrollment 389K 11% 11% • Peru +15
Slide 14: Segment Results
SEGMENT RESULTS © 2022 Laureate Education, Inc. 14
Slide 15: Mexico Segment Results
Mexico Segment Results Q2 Results Q2 YTD Results Notes ($ in millions) Organic/CC Q2 YTD Organic/CC (Enrollments rounded to the nearest Q2 ’22 thousand) Vs. Q2 ’21 (1) ’22 Vs. Q2 YTD ’21 (1) • Strong results during secondary intake cycle, New Enrollment 20K 15% 52K 15% primary intake for Mexico will
Slide 16: Peru Segment Results
Peru Segment Results Q2 Results Q2 YTD Results Notes ($ in millions) Organic/CC Q2 YTD Organic/CC (Enrollments rounded to the nearest Q2 ’22 thousand) Vs. Q2 ’21 (1) ’22 Vs. Q2 YTD ’21 (1) • Continued strong growth in new enrollment New Enrollment 3K 47% 52K 7% • High comparable period in 1H 2021 (C
Slide 17: Q2 2022 Capitalization and Return of Capital
Q2 2022 Capitalization and Return of Capital ($ in millions) Amount Comments Net Cash Position @ 6/30/22 $18 See Appendix Divestiture Related Escrow 1 $74 Expected in Q3 2022 Adjusted Net Cash Position @ 6/30/22 $92 Returning Capital to Shareholders Remains a Priority • Full $650M share repurchase a
Slide 18: Outlook
OUTLOOK © 2022 Laureate Education, Inc. 18
Slide 19: 2022 Outlook – Executive Summary
2022 Outlook – Executive Summary Market dynamics remain favorable for the private sector in Mexico & Peru Digital education accelerating Total Revenue growth expected at +12% Vs. 2021 (up 11% on an organic constant currency basis1) 2022 Adjusted EBITDA expected at +31% Vs. 2021 (up 24% on an
Slide 20: 2022 FY Outlook - Updated
2022 FY Outlook - Updated ($ in millions) (Enrollments rounded to the Prior Change Current nearest thousand) FY 2022 Outlook (mid-pt) FY 2022 Outlook (1) Total Enrollment 410K - 416K +3K 413K - 419K Revenue $1,190 - $1,206 +$14 $1,206 - $1,218 Adjusted EBITDA $326 - $334 +$3 $329 - $337 (1) Based on
Slide 21: 2022 Outlook (At Mid-Point)
2022 Outlook (At Mid-Point)1 Total Enrollment (000s) Revenue ($M) +7% +12% 389 416 $1,212 $1,087 2021A 2022E 2021A 2022E Adjusted EBITDA ($M) Adjusted EBITDA Margin % +31% $333 27.5% $253 23.3% 420 bps 2021A 2022E 2021A 2022E Strong Top Line Growth With Significant Margin Expansion (1) Based on actu
Slide 22: Q3 & 2H 2022 Guidance Details
Q3 & 2H 2022 Guidance Details ($ in millions) Q3 2022 2H 2022 Implied Outlook (1) Outlook (1) Revenue $289 - $295 $612 - $624 Adjusted EBITDA $64 - $69 $157 - $165 Continued Growth Momentum Expected in 2H 2022 (1) Based on actual FX rates for July, and spot FX rates (local currency per US dollar) of
Slide 23: Appendix
APPENDIX © 2022 Laureate Education, Inc. 23
Slide 24: 2022 Second Quarter – Net Income Reconciliation
2022 Second Quarter – Net Income Reconciliation Q2 ’22 B / (W) Vs. Q2 ’21 Notes ($ in millions) Reported $ % Adjusted EBITDA 144 37 35% Depreciation & Amort. (15) 12 45% Interest Expense, net (3) 11 81% • Repayment of debt Impairments - 7 n.m. • Impairments charges in prior year • Loss on derivative
Slide 25: 2022 Q2 YTD – Net Income Reconciliation
2022 Q2 YTD – Net Income Reconciliation Q2 YTD ’22 B / (W) Vs. Q2 YTD ’21 Notes ($ in millions) Reported $ % Adjusted EBITDA 171 55 47% • PY included $13M non-cash FAS5 charge Depreciation & Amort. (29) 21 41% Interest Expense, net (4) 32 88% • Repayment of debt Impairments - 64 n.m. • Impairments c
Slide 26: Capitalization at 6/30/22
Capitalization at 6/30/22 ($ in millions) Total Company as of 6/30/22 Cash & Cash Equivalents1 $157 Gross Debt ($139) Net Cash Position $18 Net Cash Position of $18M as of June 30th Total current shares outstanding of 164.7M shares at quarter-end (1) Excludes $74M escrow related to Walden divestitur
Slide 27: 2022 Full Year Guidance Details
2022 Full Year Guidance Details ($ in millions) (Enrollments rounded to the nearest thousand) Total Enrollment Revenues Adj. EBITDA 2021 FY Results As Reported 389K $1,087 $253 Campus Closures (2K) - - 2021 FY Results Adjusted 387K $1,087 $253 Organic Growth 26K - 32K $117 - $129 $57 - $65 Organic G
Slide 28: Q3 & 2H 2022 Guidance Details
Q3 & 2H 2022 Guidance Details 3Q Guidance 2H Implied Guidance ($ in millions) Revenues Adj. EBITDA Revenues Adj. EBITDA 2021 Results As Reported $268 $76 $564 $137 Timing Impact Intra-Year (academic calendar) $2 $2 $3 $2 2021 Results Adjusted $270 $78 $567 $139 Organic Growth $18 - $24 ($15) - ($10)
Slide 29: 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% 49% 29% 28% 47% 46% 27% 42% 44% 25% 23% 24% 30% 19
Slide 30: Financial Results & Tables
Financial Results & Tables © 2022 Laureate Education, Inc. 30
Slide 31: Financial Tables
Financial Tables Consolidated Statements of Operations For the three months ended June 30, For the six months ended June 30, IN MILLIONS 2022 2021 Change 2022 2021 Change Revenues $ 385.4 $ 327.6 $ 57.8 $ 594.9 $ 522.3 $ 72.6 Costs and expenses: Direct costs 242.8 213.3 29.5 425.7 395.2 30.5 General
Slide 32: Financial Tables
Financial Tables Revenue and Adjusted EBITDA by segment: Quarter IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant June 30, 2022 2021 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 144.7 $ 124.3 16% 16% $ 20.4 $ 20.0 $ —
Slide 33: Financial Tables
Financial Tables Revenue and Adjusted EBITDA by segment: Year-to-Date IN MILLIONS % Change $ Variance Components Organic Organic For the six months ended Constant Constant June 30, 2022 2021 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Mexico $ 287.2 $ 259.7 11% 11% $ 27.5 $ 27.9 $
Slide 34: Financial Tables
Financial Tables Consolidated Balance Sheets IN MILLIONS June 30, 2022 December 31, 2021 Change Assets Cash and cash equivalents $ 156.9 $ 324.8 $ (167.9) Receivables (current), net 172.9 152.0 20.9 Other current assets 70.7 67.5 3.2 Property and equipment, net 506.1 499.5 6.6 Operating lease right-
Slide 35: Financial Tables
Financial Tables Consolidated Statements of Cash Flows For the six months ended June 30, IN MILLIONS 2022 2021 Change Cash flows from operating activities Net loss $ (1.1) $ (194.2) $ 193.1 Depreciation and amortization 29.2 49.7 (20.5) Loss on impairment of assets 0.1 65.1 (65.0) Gain on sales and
Slide 36: Financial Tables
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 June 30, For the six months ended June 30, IN MILLIONS 2022 2021 Change 2022 2021 Change Income (loss) f
Slide 37: Financial Tables
Financial Tables Non-GAAP Reconciliation (2 of 2) The following table reconciles operating cash flow to Free Cash Flow for the six months ended June 30, 2022 and 2021: IN MILLIONS 2022 2021 Change Net cash provided by operating activities $ 45.6 $ 17.9 $ 27.7 Capital expenditures: Purchase of proper
Slide 38: © 2022 Laureate Education, Inc.
© 2022 Laureate Education, Inc. 38