Slide 1: Investor & Analyst Briefing
Investor & Analyst Briefing Full year results to 30 June 2023 Presented: 18 August 2023 by Chairman Matthew Sandblom CEO Jose Palmero CFO Anton Clowes 0
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer The material in this presentation is a summary of 3P Learning Limited’s (‘3P’) activities and results as at the time of preparation, 18 August 2023. No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information
Slide 3: Agenda
Agenda • Chairman’s Update • Q&A • CEO Update • Appendices • Results & Cash Flow • Outlook 2
Slide 4: Chairman's Update
Chairman’s Update Matthew Sandblom
Slide 5: Chairman's Update
Chairman’s Update Chairman’s Update • FY23 focus was on building product suite covering the 3Rs of learning (Reading, Writing, Maths). • We have increased our investment in product while maintaining a good level of profitability and cash generation. • During FY24 we will release major new programs:
Slide 6: CEO Update
CEO Update Jose Palmero
Slide 7: Our Programs
CEO Update Our Programs Helping students Learning to Teaching Where children Writing and build their Read made fun children learn to Write Numeracy confidence in and rewarding foundational with confidence assessment that Maths. for children. Maths and and effectively. makes progress problem-solving
Slide 8: Our Strategy
CEO Update Our Strategy B2B B2C Markets (AMER, EMEA, APAC) Markets (AMER, EMEA, APAC) 7
Slide 9: FY23 Highlights
CEO Update FY23 Highlights UNDERLYING1 EBITDA REVENUE B2C BILLINGS3 B2B ARR4 $15.9m $107.4m $40.7m $65.4m +21% +10% +5% +2% vs pcp2 vs pcp vs pcp vs pcp CUSTOMERS PRODUCT UNDERLYING1 CASH FLOW FROM OPERATIONS >5.5m $28.2m BEFORE TAX • B2B Licences4 4.3m (-0.2% vs pcp) • $25.6m internal product devel
Slide 10: Performance in the Consumer Market
CEO Update Performance in the Consumer Market Consumer billings1 performance for Reading Eggs, Mathseeds and Mathletics by platform and geography for FY23 and FY22. • Billings were $40.7m, up 5% on pcp, with net billings contribution margin of 51% including direct sales, marketing and platform commi
Slide 11: Performance in the Schools Market
CEO Update Performance in the Schools Market The graph below shows school ARR trajectory FY23 FY22 +/- % +/- for FY22 and FY23. Closing ARR1 ($m) 65.4 64.4 1.0 2% Licences (m) 5.2 5.2 - - Exit ARPU2 ($) 12.5 12.4 0.1 1% • ARR is up 2% with Brightpath contributing $1.4m in acquisition-ARR. • Exit ARP
Slide 12: Product Releases and Improvements
CEO Update Product Releases and Improvements Achieved in 2H23 What’s coming FY24 Reading Journal, End of Lessons Skill Quiz, Read Aloud Feature, Program & Reports, QR Code login, Teacher Library Controls, RE Map 13 Lessons 121-130 Awards and Certificates Global: Student Centre and certificates, Teac
Slide 13: Results & Cash Flow
Results & Cash Flow Anton Clowes
Slide 14: P&L Key Drivers
Results Analysis P&L Key Drivers Profit and Loss Statement FY23 FY22 +/- %+/- • B2B revenue increased by 15% on pcp to $m Revenue $66.4m (primarily owing to the change in B2B 66.4 57.9 8.5 15% revenue recognition1). B2C 40.5 39.3 1.2 3% Other income 0.5 0.5 - - • B2B revenue includes $1.1m relating
Slide 15: B2C Performance Metrics
Results Analysis B2C Performance Metrics $m FY23 FY22 +/- % +/- $m FY23 FY22 +/- %+/- 1 Gross Billings 40.7 38.8 1.9 5% Revenue 40.5 39.3 1.2 3% 5 Licences (k) 302.0 313.0 (11.0) (4%) 2 Expenses ARPU ($) 134.8 124.0 10.8 9% Sales, Marketing & Cost of Revenue 4 (23.2) (22.1) (1.1) (5%) $m FY23 FY22 +
Slide 16: B2B Performance Metrics
Results Analysis B2B Performance Metrics $m FY23 FY22 $m FY23 FY22 +/- % +/- Opening ARR 64.4 64.4 Revenue 66.4 57.9 8.5 15% Acquired business 1.4 0.4 New business 5.5 5.9 Expenses Net upsell/downsell 1.9 2.9 Sales, Marketing & Cost of Revenue 2 (30.7) (26.9) (3.8) (14%) Net churn (8.8) (9.3) Contri
Slide 17: Cash Balance Bridge
Results Analysis Cash Balance Bridge • Underlying cash flow from operations before tax was $10.8m. • Merger-related cash flows include $1.8m VAT payments in South Africa & UK. • Net PPE & intangibles addition of $4.1m includes $1.5m Writing Legends investment. • Brightpath acquisition (net of cash)
Slide 18: EBITDA Cash Flow Bridge
Results Analysis EBITDA Cash Flow Bridge • Underlying cash flow from operations before tax was $10.8m. • Net PPE & intangibles addition of $4.1m includes $1.5m Writing Legends investment. • Merger-related cash flows include $1.8m VAT payments in South Africa & UK. • Brightpath acquisition (net of ca
Slide 19: Outlook
Outlook
Slide 20: FY24 Guidance
Outlook Outlook FY24 Guidance1 • Revenue of between $112.0m and $115.0m (including growing ARR with new B2B product launches) • Underlying EBITDA of between $15.0m and $17.0m We aim to generate cash from operations, before tax and investments, at levels higher than last year. 1. Subject to currencie
Slide 21: Q&A
Q&A
Slide 22: Appendices
Appendices
Slide 23: Glossary
Appendices Glossary Term Definition ARR Annual Recurring Revenue Churn Percentage is calculated as a proportion of the opening School ARR in a rolling 12 or 6 month period (as Churn Percentage relevant). Earnings before interest, tax, depreciation and amortisation, restructure and integration costs,
Slide 24: Thank You
Thank You 23