Slide 1: Fourth Quarter & Year-End 2016 Earnings Presentation
Fourth Quarter & Year-End 2016 Earnings Presentation March 28, 2017 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 meaning
Slide 3: Company Overview
COMPANY OVERVIEW © 2017 Laureate Education, Inc. | Confidential & Proprietary 3
Slide 4: Deep Commitment to Benefitting Society: Here for Good
Deep Commitment to Benefitting Society: Here for Good “ Laureate is an international community of universities Employers that encourages learning Communi Community ty Students without boundaries…We believe that when our Governments & Faculty students succeed, countries Governments Regulators Faculty
Slide 5: Global Leader in Large and Growing Higher Education Market
Global Leader in Large and Growing Higher Education Market Massive market opportunity $1.5T 2015 3.2B Global middle class expected to almost double in size 5.2B 2016 2028 population population 200m+ higher education students worldwide…. students …has more than doubled since 2000 1,000,000+ 95% of st
Slide 6: Large, Growing and Underserved Global Market
Large, Growing and Underserved Global Market Massive Global Market Increasing Reliance on the Private Sector (private enrollment as a % of total higher education enrollment in OECD countries(1)) $1.5T 200m+ 26% 31% 2015 higher education students 1 million students 2003 2013 (~0.5% global market shar
Slide 7: Attractive Business Model with a Track Record of Performance
Attractive Business Model with a Track Record of Performance Long-term Programs Drive Revenue Visibility Private Pay Model (3) (% of total students by program length) Private Pay Public Funding 66% 25% 33% 47% 63% 77% 100% 100% 75% 53% 1% 37% 23% < 2 years 2 years – 4 years 4 years + Bright Nord Lau
Slide 8: Proven & Replicable Growth Model
Proven & Replicable Growth Model Growth Through Leveraging Best-in-Class Operating Model Student outreach Develop new locations New product offerings Optimize campus operations New market segments Leverage network benefits Selected Case Studies (total enrollment ‘000s) 19 130 (total enro
Slide 9: Strong Presence and Brand Recognition Across Key Markets
Strong Presence and Brand Recognition Across Key Markets Rest of Mexico Brazil Chile Peru United States World Traditional campus-based programs Developed Limited public Limited public infrastructure market for online capacity Market opportunity Heavy reliance on private sector Strong gro
Slide 10: 2017 Key Financial Priorities Built on 2016 Accomplishments
2017 Key Financial Priorities Built on 2016 Accomplishments Organic Growth Hybridity Margin Expansion Expansion Increased Free Cash Flow Conversion © 2017 Laureate Education, Inc. | Confidential & Proprietary 10
Slide 11: Academic Priority is Continued Focus on Outcomes & Quality
Academic Priority is Continued Focus on Outcomes & Quality Third Party Research(1) Market Studies • 12 of 13 institutions surveyed met or • Joint research with IFC in Mexico exceeded local market employment and Peru benchmarks • Laureate graduates have greater • Salary outperformance of 6% -118% adv
Slide 12: 2016 Performance Highlights
2016 PERFORMANCE HIGHLIGHTS © 2017 Laureate Education, Inc. | Confidential & Proprietary 12
Slide 13: 2016 Financial Performance Highlights
2016 Financial Performance Highlights 4th Quarter 2016 Full Year 2016 Adj. Adj. Revenue Revenue EBITDA EBITDA $1.2B $4.2B $285M $766M +8% +6% Organic constant +34% Organic constant +12% currency growth Organic constant currency growth Organic constant currency growth currency growth Total Enrollment
Slide 14: Enrollment by Segment
Enrollment by Segment • FY’16 New Enrollments increased 1% and Total Enrollments grew 3% versus prior year on an organic basis (excluding asset sales) – Enrollments adversely impacted by the Brazil macro environment – Excluding Brazil, organic New and Total Enrollments both increased 4% as compared
Slide 15: Q4 '16 vs. Q4 '15 Revenue & Adj. EBITDA Bridge
Q4 ’16 vs. Q4 ’15 Revenue & Adj. EBITDA Bridge Q4 ’16 vs. Q4 ’15 Laureate Revenue Bridge Q4 ’16 Performance Highlights ($ in USD millions) $96.7 $0.6 Q4 ’16 financial results benefitted, in part, by expected +8% $1,175.9 favorable timing impact related to shifts in the $1,150.5 $(71.9) academic ca
Slide 16: FY '16 vs. FY '15 Revenue & Adj. EBITDA Bridge
FY ’16 vs. FY ’15 Revenue & Adj. EBITDA Bridge FY ’16 vs. FY ’15 Laureate Revenue Bridge FY ’16 Performance Highlights ($ in USD millions) $258.7 FY ’16 New Enrollments increased 1% and Total $4,291.7 +6% Enrollments grew 3% versus prior year on an organic $4,244.2 $(180.4) $(125.8) basis (excludi
Slide 17: Revenue & Adj. EBITDA Bridge – LatAm Segment
FY ’16 vs. FY ’15 Revenue & Adj. EBITDA Bridge – LatAm Segment FY ’16 vs. FY ’15 Revenue Bridge FY ’16 Performance Highlights ($ in USD millions) $176.9 FY ’16 New Enrollments increased 2% and Total +7% $2,442.0 $2,415.6 Enrollments grew 4% with strong results in Peru offset $(150.5) by a challeng
Slide 18: Revenue & Adj. EBITDA Bridge – Europe Segment
FY ’16 vs. FY ’15 Revenue & Adj. EBITDA Bridge – Europe Segment FY ’16 vs. FY ’15 Revenue Bridge FY ’16 Performance Highlights ($ in USD millions) $42.1 FY ’16 New Enrollments increased 6% and Total +9% $(12.6) Enrollments grew 12% vs. prior year on an organic $486.2 $480.4 $(35.3) basis (excludin
Slide 19: Revenue & Adj. EBITDA Bridge – AMEA Segment
FY ’16 vs. FY ’15 Revenue & Adj. EBITDA Bridge – AMEA Segment FY ’16 vs. FY ’15 Revenue Bridge FY ’16 Performance Highlights ($ in USD millions) $23.7 FY ’16 New Enrollments were down (7%) vs. prior year +6% $431.3 $422.1 whereas Total Enrollment increased 2% $(14.5) ‒ New enrollment growth was im
Slide 20: Revenue & Adj. EBITDA Bridge – GPS Segment
FY ’16 vs. FY ’15 Revenue & Adj. EBITDA Bridge – GPS Segment FY ’16 vs. FY ’15 Revenue Bridge FY ’16 Performance Highlights ($ in USD millions) $13.9 FY ’16 New and Total Enrollments decreased (1%) and $979.9 +1% $(2.8) (5%), respectively, vs. prior year on an organic basis $900.5 (excluding the s
Slide 21: Capital Structure
Capital Structure • Significant progress made on our capital structure during 2016 to prepare the company for the IPO • Pro forma for the IPO and the Note Exchange, net debt was $2.8B at 12/31/16 resulting in 3.8x net leverage Pro forma capitalization Net debt / Adj. EBITDA ($ in millions) As of 12/
Slide 22: 2017 Outlook
2017 OUTLOOK © 2017 Laureate Education, Inc. | Confidential & Proprietary 22
Slide 23: FY 2017 Guidance
FY 2017 Guidance Total Enrollment Revenue 4.5% - 6.0% 2.0% - 3.5% growth on an organic organic growth constant currency basis Adjusted EBITDA Capex 8.0% - 10.0% 7.0% - 8.0% growth on an organic of organic constant constant currency basis currency revenue Total Class A Shares Outstanding Increase: Ex
Slide 24: Foreign Currency & Asset Sales Impact on 2017 Guidance
Foreign Currency & Asset Sales Impact on 2017 Guidance Adjusted ($ millions, rounded) Revenue EBITDA 2016 Reported Results $4,244 $766 1 2016 Asset Dispositions ($142) ($27) PF 2016 Baseline $4,102 $739 2017 Forecasted Constant Currency Growth $185 - $246 $59 - $74 % organic constant currency growth
Slide 25: Seasonality: Main Enrollment Intakes
Seasonality: Main Enrollment Intakes • Q1 and Q3 are peak intake quarters, but seasonally weak earnings quarters as institutions are largely out of session during the summer season (Q1 in Southern Hemisphere; Q3 in Northern Hemisphere) • Q1 represents the large intake for our Southern Hemisphere ins
Slide 26: Intra-Year Seasonality Trends
Intra-Year Seasonality Trends • Large intake cycles at end of Q1 (Southern Hemisphere) and end of Q3 (Northern Hemisphere) drive seasonality of earnings (Q2 and Q4 are our strongest earnings quarters) Revenue Seasonality Adj. EBITDA Seasonality Academic Calendar Academic Calendar 46% 46% 29% 28% 30%
Slide 27: 1Q 2017 Guidance
1Q 2017 Guidance • Seasonality impact amplified in 1Q 2017 due to floods in Peru which are expected to shift Revenue and Adjusted EBITDA from 1Q to 2Q (timing impact only) – Will also affect 1Q enrollments as activity will be recognized in early April 2017 (vs. March), thus y-o-y reported enrollment
Slide 28: Appendix
APPENDIX © 2017 Laureate Education, Inc. | Confidential & Proprietary 28
Slide 29: Unparalleled global higher education network
Unparalleled global higher education network UK / Netherlands • 25 Countries University of Liverpool Online University of Roehampton Online Spain Germany Business and Information Technology School HTK Academy of Design • 70 Institutions Universidad Europea de Madrid Universidad Europea de Canarias U
Slide 30: Diversified Platform Addressing Global Education Opportunities
Diversified Platform Addressing Global Education Opportunities ~80% ~20% International United States of revenue of revenue Laureate approach: Traditional campus-based degree Laureate approach: Online-driven graduate programs for programs working professionals Insufficient capacity provided by free
Slide 31: Superior Outcomes for Students
Superior Outcomes for Students JOINT Third Party Research RESEARCH 12 of 13 Mexico Laureate institutions surveyed (% of Laureate Mexico students that advance their socioeconomic status) met or exceeded vs. Peer Universities local market 41% employment benchmarks 27% 10% 13% 11% Employment 5% Salary
Slide 32: Foreign Currency Exposure – 2016 Revenue
Foreign Currency Exposure – 2016 Revenue 2016 Currency Profile - Revenue United States Other 17% 25% Brazil Spain 16% 5% Peru 9% Mexico Chile 15% 13% © 2017 Laureate Education, Inc. | Confidential & Proprietary 32
Slide 33: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. | Confidential & Proprietary 33
Slide 34: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. | Confidential & Proprietary 34
Slide 35: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. | Confidential & Proprietary 35
Slide 36: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. | Confidential & Proprietary 36
Slide 37: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. | Confidential & Proprietary 37
Slide 38: © 2017 Laureate Education, Inc. | Confidential & Proprietary
© 2017 Laureate Education, Inc. | Confidential & Proprietary 38