Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q4 2021 Earnings Presentation
40 slides from Laureate Education's earnings presentation, Feb 24, 2022
Slide 1: Fourth Quarter & Year-End 2021 Earnings Presentation
Fourth Quarter & Year-End 2021 Earnings Presentation February 24, 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 Fourth quarter Revenue & Adjusted EBITDA ahead of guidance Net Income of $38M in the fourth quarter Strong recovery from COVID in FY 2021, highlighting resiliency of the business model ‒ 2021 Results1: Revenue +9%, Adjusted EBITDA +39% ‒ Total Enrollments 6% above pre-pandemi
Slide 6: Return of Capital Update
Return of Capital Update • Operating model is cash accretive & Balance Sheet is strong (net cash of $168M at 12/31/21) • Total current shares outstanding of 179M shares1 • $132M stock buyback authorization remaining1 • Plan to distribute remaining net proceeds from Walden sale (incl. escrow released
Slide 7: Growth Priorities
GROWTH PRIORITIES © 2022 Laureate Education, Inc. 7
Slide 8: Attractive Growth Opportunities in Mexico & Peru Higher Education Markets
Attractive Growth Opportunities in Mexico & Peru Higher Education Markets Mexico Peru Combined Population (M) 128M 32M 160M Higher Education Students 5,005 1,642 6,647 (000s) Higher Education Gross U.S. E.U. 34% 47% 36% Participation Rate1 65% 54% Market Share for 42% 69% 51% Private Institutions2 S
Slide 9: Leading University Portfolio in Mexico & Peru
Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 12/31/21 Segment Overall Ratings / Rankings Ranked Top 10 university in Mexico Premium/ 1960 97,500 One of only seven 4-Star rated universities Traditional Mexico Universidad del in Mexico by QS Stars™ V
Slide 10: Digital Learning During Pandemic Accelerated Capital Light Operating Model
Digital Learning During Pandemic Accelerated Capital Light Operating Model Laureate to enable significant growth, without large-scale investments in campus expansions, through increased mix of Digital Learning Percentage of Teaching Hours Delivered Online 100% 40% – 60% 27% 2019 2020 /2021 2022+ (Pr
Slide 11: Multiple Vectors for Revenue Growth
Multiple Vectors for Revenue Growth Expected Medium-Term Revenue Growth Phase II Priorities 8% - 10% Phase I Priorities 5% - 7% Pre-Pandemic COVID Recovery Online Expansion Program Expansion New Campuses Scaling EdTech/B2B Targeted Future Organic Trends / Digital (Monetize IP) Revenue Growth Majorit
Slide 12: Q4 & FY 2021 Performance Results
Q4 & FY 2021 PERFORMANCE RESULTS CONTINUING OPERATIONS ONLY (I.E. MEXICO, PERU AND CORPORATE SEGMENTS) © 2022 Laureate Education, Inc. 12
Slide 13: 2021 Fourth Quarter – Financial Summary
2021 Fourth Quarter – Financial Summary Q4 ’21 Variance Vs. Q4 ‘20 Notes ($ in millions) (Enrollments in thousands) Results As Reported Organic/CC1 New Enrollment 5K 10% 10% • Not a material intake period • Driven by new enrollment growth and Total Enrollment 389K 15% 15% improved retention rates •
Slide 14: 2021 FY – Financial Summary
2021 FY – Financial Summary FY ’21 Variance Vs. FY ‘20 Notes ($ in millions) (Enrollments in thousands) Results As Reported Organic/CC1 New Enrollment 194K 15% 15% • New enrollments +7% vs. FY 2019 • Total enrollment +6% vs. FY 2019 Total Enrollment 389K 15% 15% • Improved retention rates, +11pts ve
Slide 15: Segment Results
SEGMENT RESULTS CONTINUING OPERATIONS ONLY (I.E. MEXICO, PERU AND CORPORATE SEGMENTS) © 2022 Laureate Education, Inc. 15
Slide 16: Mexico Segment Results
Mexico Segment Results Q4 Results FY Results Notes ($ in millions) Organic/CC Organic/CC (Enrollments in thousands) Q4 ’21 FY ’21 Vs. Q4 ‘20 (1) Vs. FY ’20 (1) • Strong primary intake in September New Enrollment 4K 14% 119K 11% • New enrollments +6% vs. FY 2019 • Driven by NE growth and Total Enroll
Slide 17: Peru Segment Results
Peru Segment Results Q4 Results FY Results Notes ($ in millions) Organic/CC Organic/CC (Enrollments in thousands) Q4 ’21 FY ’21 Vs. Q4 ’20 (1) Vs. FY ’20 (1) • Robust NE growth New Enrollment - - 74K 20% • New enrollments +9% vs. FY 2019 • Driven by higher NE volumes Total Enrollment 185K 30% 185K 3
Slide 18: YE 2021 Capitalization – Adjusted for Pending Items
YE 2021 Capitalization – Adjusted for Pending Items ($ in millions) Amount Comments Net Cash Position @ 12/31/21 $168 See Appendix Divestiture Related Escrow 1 $74 Expected in 2H 2022 Adjusted Net Cash Position @ 12/31/21 $242 (1) Assumes full release and recovery of escrow in 2022 (related to Walde
Slide 19: Outlook
OUTLOOK © 2022 Laureate Education, Inc. 19
Slide 20: 2022 Outlook – Executive Summary
2022 Outlook – Executive Summary Market dynamics remain favorable for the private sector in Mexico & Peru Digital education accelerating Total Revenue growth expected at +9% Vs. 20211 2022 Adjusted EBITDA expected to be up +21% Vs. 20211 (up 28% on an as-reported basis) Anticipate return t
Slide 21: 2022 Outlook
2022 Outlook1 ($ in millions) FY 2022 (Enrollments in thousands) Outlook (1) Total Enrollment 405K - 415K Revenue $1,169 - $1,194 Adjusted EBITDA $320 - $330 (1) Based on actual FX rates for January, and spot FX rates (local currency per US dollar) of MXN 20.56 & PEN 3.86 for February through Decemb
Slide 22: 2022 Outlook (At Mid-Point)
2022 Outlook (At Mid-Point)1 Total Enrollment (000s) Revenue ($M) +6% +9% 389 410 $1,182 $1,087 2021A 2022E 2021A 2022E Adjusted EBITDA ($M) Adjusted EBITDA Margin % +28% $325 27.5% $253 23.3% 420 bps 2021A 2022E 2021A 2022E Strong Top Line Growth With Significant Margin Accretion (1) Based on actua
Slide 23: Q1 2022 Guidance Details
Q1 2022 Guidance Details ($ in millions) Q1 2022 Outlook (1) Revenue $195 - $202 Adjusted EBITDA $13 - $18 (1) Based on actual FX rates for January, and spot FX rates (local currency per US dollar) of MXN 20.56 & PEN 3.86 for February through March 2022. FX impact may change based on fluctuations in
Slide 24: Appendix
APPENDIX © 2022 Laureate Education, Inc. 24
Slide 25: 2021 Academic Calendar Timing Impacts - Peru
2021 Academic Calendar Timing Impacts - Peru • $18M in revenue timing shift from Q1 to 2H due to delayed class start in 2020 – Majority of benefit recognized in Q1 2021; offset in Q3/Q4 Week Of 2/22 3/1 3/8 3/15 3/22 3/29 4/5 4/12 UPC Delayed start in UPN 2020 due to COVID Cibertec 2021 semester sta
Slide 26: 2021 Fourth Quarter – Net Income Reconciliation
2021 Fourth Quarter – Net Income Reconciliation Q4 ’21 B / (W) Vs. Q4 ’20 Notes ($ in millions) Reported $ % Adjusted EBITDA 61 (30) (33%) • Impacted by timing, see slide #13 Depreciation & Amort. (26) 2 6% Interest Expense, net (4) 21 85% • Repayment of debt Impairments (5) (4) n.m. • Related to ex
Slide 27: 2021 FY – Net Income Reconciliation
2021 FY – Net Income Reconciliation FY ’21 B / (W) Vs. FY ’20 Notes ($ in millions) Reported $ % Adjusted EBITDA 253 48 23% • Strong performance in Peru • Primarily related to amortization of Depreciation & Amort. (101) (18) (22%) tradename (moved to finite life asset) Interest Expense, net (42) 57
Slide 28: Capitalization at 12/31/21
Capitalization at 12/31/21 ($ in millions) Total Company as of 12/31/21 Cash & Cash Equivalents $325 Gross Debt ($157) Net Cash Position $168 Net Cash Position of $168M as of Year-End 2021 © 2022 Laureate Education, Inc. 28
Slide 29: 2022 Full Year Guidance Details
2022 Full Year Guidance Details (USD millions, except enrollments in thousands) Total Enrollment Revenues Adj. EBITDA 2021 FY Results As Reported 389K $1,087 $253 FAS 5 Expense/Indemnification Asset (non-cash) - - $14 Campus Closures (End of 2021) (2K) - - 2021 FY Results Adjusted 387K $1,087 $267 O
Slide 30: Q1 2022 Guidance Details
Q1 2022 Guidance Details (USD millions) Revenues Adj. EBITDA 2021 Q1 Results As Reported $195 $10 Timing Impact Intra-Year (academic calendar) ($8) ($6) FAS 5 Expense/Indemnification Asset (non-cash) - $13 2021 Q1 Results Adjusted $187 $17 Organic Growth $12 - $19 ($5) – $0 Organic Growth % 6% - 10%
Slide 31: 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 32: Financial Results & Tables
Financial Results & Tables © 2022 Laureate Education, Inc. 32
Slide 33: Financial Tables – Consolidated Statements of Operations
Financial Tables Consolidated Statements of Operations For the three months ended December 31, For the year ended December 31, IN MILLIONS 2021 2020 Change 2021 2020 Change Revenues $ 296.7 $ 285.2 $ 11.5 $ 1,086.7 $ 1,024.9 $ 61.8 Costs and expenses: Direct costs 237.3 188.3 49.0 814.5 802.5 12.0 G
Slide 34: Financial Tables – Segment Results: Quarter
Financial Tables Revenue and Adjusted EBITDA by segment: Quarter IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant December 31, 2021 2020 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 149.5 $ 149.6 —% —% $ (0.1) $ (0.3)
Slide 35: Financial Tables – Segment Results: Year-to-Date
Financial Tables Revenue and Adjusted EBITDA by segment: Year-to-Date IN MILLIONS % Change $ Variance Components Organic Organic For the year ended Constant Constant December 31, 2021 2020 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Mexico $ 540.4 $ 534.6 1% (4)% $ 5.8 $ (21.2) $
Slide 36: Financial Tables – Consolidated Balance Sheets
Financial Tables Consolidated Balance Sheets IN MILLIONS December 31, 2021 December 31, 2020 Change Assets Cash and cash equivalents $ 324.8 $ 750.1 $ (425.3) Receivables (current), net 152.0 111.9 40.1 Other current assets 67.5 146.8 (79.3) Current assets held for sale — 435.0 (435.0) Property and
Slide 37: Financial Tables – Consolidated Statements of Cash Flows
Financial Tables Consolidated Statements of Cash Flows For the year ended December 31, IN MILLIONS 2021 2020 Change Cash flows from operating activities Net income (loss) $ 203.8 $ (618.7) $ 822.5 Depreciation and amortization 101.2 143.5 (42.3) Amortization of operating lease right-of-use assets 44
Slide 38: 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 December 31, For the year ended December 31, IN MILLIONS 2021 2020 Change 2021 2020 Change Income (loss)
Slide 39: Non-GAAP Reconciliation (2 of 2)
Financial Tables Non-GAAP Reconciliation (2 of 2) The following table presents Free cash flow and reconciles Net cash flows from operating activities to Free cash flow: For the year ended December 31, IN MILLIONS 2021 2020 2019 Net cash (used in) provided by operating activities $ (156.1) $ 259.6 $
Slide 40: © 2022 Laureate Education, Inc.
© 2022 Laureate Education, Inc. 40