Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q2 2023 Earnings Presentation
38 slides from Laureate Education's earnings presentation, Aug 3, 2023
Slide 1: Second Quarter 2023 Earnings Presentation
Second Quarter 2023 Earnings Presentation August 3, 2023 © 2023 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 and its related margin, Adjusted EBITDA to Unlevered Free Cash Fl
Slide 4: Summary Overview
SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding © 2023 Laureate Education, Inc. 4
Slide 5: Executive Summary
Executive Summary New and Total Enrollments up 13% and 9% YTD, respectively versus prior year period Q2 results ahead of expectations ‒ Revenue favorability driven by price/mix and currency rates ‒ Adjusted EBITDA upside resulting from higher revenue & timing of expenses Net Income of $56M in
Slide 6: Strategic Priorities
Strategic Priorities Target Profile: Priority Objective Within Next 3-5 years1 Sustainably lift organic revenue Total Enrollment CAGR: 5% - 7% Growth growth rate from drivers identified on the following page Revenue CAGR (FXN): 8% - 10% Leverage leadership in Online and % Hours Taught Online: 40% -
Slide 7: Multiple Drivers for Revenue Growth
Multiple Drivers for Revenue Growth1 Revenue Growth Targets Over Next 3-5 Years 8% - 10% ~ 3% Volume / Market Share Online Pricing / Inflation Target Revenue Market Gain Penetration (Net of Mix) Growth Growth Majority of Growth Initiatives are Capital Light Given Digital Focus (1) As provided on Feb
Slide 8: Compelling Investment Characteristics
COMPELLING INVESTMENT CHARACTERISTICS © 2023 Laureate Education, Inc. 8
Slide 9: Large Markets with Low Penetration Rates in Higher Education
Large Markets with Low Penetration Rates in Higher Education Mexico Peru Combined Population (M) 129M 32M 161M Higher Education 5,058 1,811 6,869 Students (000s) Higher Education Gross U.S. E.U. 34%2 52%2 37% 62% 54% Participation Rate1 Market Share for 42% 73% 53% Private Institutions3 Sources: UNE
Slide 10: Leading University Portfolio in Mexico & Peru
Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 6/30/23 Segment Overall Ratings / Rankings Ranked Top 10 university in Mexico Premium/ 1960 94,500 Traditional 5-Stars rated by QS Stars™ in categories Mexico Universidad del of Employability & Inclusive
Slide 11: Recent Network Highlights
Recent Network Highlights UPC in Peru: • UPC has been recognized as one of the top two universities in Peru working towards Universidad Peruana de Ciencias Aplicadas (UPC) the UN Sustainable Development Goals, according to the latest Impact Rankings by Times Higher Education. • La Republica reported
Slide 12: Q2 & YTD 2023 Performance Results
Q2 & YTD 2023 PERFORMANCE RESULTS © 2023 Laureate Education, Inc. 12
Slide 13: 2023 Second Quarter – Financial Summary
2023 Second Quarter – Financial Summary Q2 ’23 Variance Vs. Q2 ’22 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Strong secondary intake for Mexico, New Enrollment 23K 0% 0% Q2 YoY growth is +13% adjusted for timing of enrollment intakes • Mexi
Slide 14: 2023 Q2 YTD – Financial Summary
2023 Q2 YTD – Financial Summary Q2 YTD ’23 Variance Vs. Q2 YTD ’22 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 New Enrollment 118K 13% 13% • Mexico +14%, Peru +13% • Mexico +12%, Peru +7% Total Enrollment 424K 9% 9% • Driven by new enrollment g
Slide 15: Segment Results
SEGMENT RESULTS © 2023 Laureate Education, Inc. 15
Slide 16: 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 ’23 thousand) Vs. Q2 ’22 (1) ’23 Vs. Q2 YTD ’22 (1) • Strong secondary intake for Mexico, Q2 YoY is +17% New Enrollment 21K 1% 59K 14% adjusted for timing of int
Slide 17: 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 ’23 thousand) Vs. Q2 ’22 (1) ’23 Vs. Q2 YTD ’22 (1) • Strong growth in new New Enrollment 2K n.m. 59K 13% enrollment during primary intake cycle in Q1 • Driven by
Slide 18: Outlook
OUTLOOK © 2023 Laureate Education, Inc. 18
Slide 19: 2023 Outlook – Executive Summary
2023 Outlook – Executive Summary Market dynamics remain favorable for the private Higher Education sector in Mexico & Peru; digital education accelerating 2023 Revenue growth is now expected at 19%-20% Vs. 20221 (up 10% on an organic constant currency basis2) 2023 Adjusted EBITDA growth is now
Slide 20: 2023 FY Outlook - Updated
2023 FY Outlook - Updated ($ in millions) Prior Change Current (Enrollments in thousands) FY 2023 Outlook (mid-point) FY 2023 Outlook (1) Revenue $1,412 - $1,427 +$70 $1,483 - $1,495 Adjusted EBITDA $398 - $406 +$21 $419 - $427 (1) Based on actual FX rates for January through July, and spot FX rates
Slide 21: 2023 Outlook (At Mid-Point)
2023 Outlook (At Mid-Point)1 Total Enrollment (000s) Revenue ($M) +7% +20% 423 451 $1,489 $1,242 2022A 2023E 2022A 2023E Adjusted EBITDA ($M) Adjusted EBITDA Margin % +25% $423 28.4% $339 27.3% 110 bps 2022A 2023E 2022A 2023E Strong Top Line Growth With Continued Margin Expansion (1) Based on actual
Slide 22: Q3 & 2H 2023 Guidance Details
Q3 & 2H 2023 Guidance Details ($ in millions) Q3 2022 2H 2023 Implied Outlook (1) Outlook (1) Revenue $357 - $362 $770 - $782 Adjusted EBITDA $77 - $81 $210 - $218 Continued Growth in Profitability Expected in 2H 2023 ~170bps YoY Improvement in Adjusted EBITDA Margins for 2H Guidance (at mid-point)
Slide 23: Appendix
APPENDIX © 2023 Laureate Education, Inc. 23
Slide 24: 2023 Second Quarter – Net Income Reconciliation
2023 Second Quarter – Net Income Reconciliation Q2 ’23 B / (W) Vs. Q2 ’22 Notes ($ in millions) Reported $ % Adjusted EBITDA 175 31 22% Depreciation & Amort. (17) (3) (17%) Interest Expense, net (4) (2) n.m. • Net leverage <0.5x Impairments (2) (2) n.m. • Non-cash FX translation loss on Other (35) (
Slide 25: 2023 Q2 YTD – Net Income Reconciliation
2023 Q2 YTD – Net Income Reconciliation Q2 YTD ’23 B / (W) Vs. Q2 YTD ’22 Notes ($ in millions) Reported $ % Adjusted EBITDA 209 38 22% Depreciation & Amort. (34) (5) (16%) Interest Expense, net (8) (4) n.m. • Net leverage <0.5x Impairments (2) (2) n.m. • Non-cash FX translation loss on Other (64) (
Slide 26: Capitalization at 6/30/2023
Capitalization at 6/30/2023 ($ in millions) Total Company as of 6/30/23 Gross Debt $210 Less: Cash & Cash Equivalents ($112) Net Debt $98 Total current shares outstanding of 157M shares as of June 30th Strong Balance Sheet Position © 2023 Laureate Education, Inc. 26
Slide 27: 2023 Full Year Guidance Details
2023 Full Year Guidance Details Total ($ in millions) Revenues Adj. EBITDA (Enrollments rounded to the nearest thousand) Enrollment 2022 FY Results Adjusted 423K $1,242 $339 Organic Growth 24K - 32K $118 - $130 $47 - $55 Organic Growth % 6% - 7% 10% 14% - 16% 2023 FY Guidance (Constant Currency) 447
Slide 28: Q3 & 2H 2023 Guidance Details
Q3 & 2H 2023 Guidance Details 3Q Guidance 2H Implied Guidance ($ in millions) Revenues Adj. EBITDA Revenues Adj. EBITDA 2022 Results As Reported $301 $73 $647 $168 Timing Impact Intra-Year (academic calendar) $1 $1 $0 $0 2022 Results Adjusted $302 $74 $647 $168 Organic Growth $17 - $22 ($2) - $2 $41
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% 31% 49% 29% 47% 46% 28% 27% 28% 42% 43% 44% 25% 24
Slide 30: Financial Results & Tables
Financial Results & Tables © 2023 Laureate Education, Inc. 30
Slide 31: Consolidated Statements of Operations
Financial Tables Consolidated Statements of Operations For the three months ended June 30, For the six months ended June 30, IN MILLIONS 2023 2022 Change 2023 2022 Change Revenues $ 462.1 $ 385.4 $ 76.7 $ 713.3 $ 594.9 $ 118.4 Costs and expenses: Direct costs 294.0 242.8 51.2 519.3 425.7 93.6 Genera
Slide 32: Revenue and Adjusted EBITDA by Segment: Quarter
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, 2023 2022 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 192.1 $ 144.7 33% 18% $ 47.4 $ 25.6 $ —
Slide 33: Revenue and Adjusted EBITDA by Segment: Year-to-Date
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, 2023 2022 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Mexico $ 374.1 $ 287.2 30% 17% $ 86.9 $ 47.8 $
Slide 34: Consolidated Balance Sheets
Financial Tables Consolidated Balance Sheets IN MILLIONS June 30, 2023 December 31, 2022 Change Assets Cash and cash equivalents $ 111.7 $ 85.2 $ 26.5 Receivables (current), net 127.9 80.7 47.2 Other current assets 52.9 60.3 (7.4) Property and equipment, net 562.5 523.4 39.1 Operating lease right-of
Slide 35: Consolidated Statements of Cash Flows
Financial Tables Consolidated Statements of Cash Flows For the six months ended June 30, IN MILLIONS 2023 2022 Change Cash flows from operating activities Net income (loss) $ 29.6 $ (1.1) $ 30.7 Depreciation and amortization 34.0 29.2 4.8 Loss (gain) on sales and disposal of subsidiaries and propert
Slide 36: 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 June 30, For the six months ended June 30, IN MILLIONS 2023 2022 Change 2023 2022 Change Income (loss) f
Slide 37: Non-GAAP Reconciliation (2 of 2)
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, 2023 and 2022: IN MILLIONS 2023 2022 Change Net cash provided by operating activities $ 78.8 $ 45.6 $ 33.2 Capital expenditures: Purchase of proper
Slide 38: © 2023 Laureate Education, Inc.
© 2023 Laureate Education, Inc. 38