Laureate Education, Inc. · NASDAQ:LAUR

Laureate Education — Q1 2019 Earnings Presentation

25 slides from Laureate Education's earnings presentation, May 9, 2019

  1. Slide 1: First Quarter 2019 Earnings Presentation

    First Quarter 2019 Earnings Presentation May 9, 2019 © 2019 Laureate Education, Inc. 1

  2. 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

  3. 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 press release, Laureate provides the non- GAAP measurements of Adjusted EBITDA and Free Cash Flow. We have included these non-GAAP measurement

  4. Slide 4: Summary Overview

    SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding Amounts presented for enrollments, Revenue and Adjusted EBITDA are for continuing operations only © 2019 Laureate Education, Inc. 4

  5. Slide 5: Summary - Highlights

    Summary - Highlights  Strong Q1 Intake … Brazil DL and the Andean region  Q1 Financial Results ahead of guidance … Full Year Guidance reaffirmed  Continued Progress on our Portfolio Simplification  Top rankings & recognitions ….. Continued focus on quality and outcomes Strong Q1 Results © 2019 L

  6. Slide 6: Q1 2019 Performance Results

    Q1 2019 PERFORMANCE RESULTS © 2019 Laureate Education, Inc. 6

  7. Slide 7: 2019 First Quarter – Financial Summary

    2019 First Quarter – Financial Summary Q1 ’19 Variance Notes ($ in millions) (Enrollments in thousands) Results Vs. Q1 ‘18 New Enrollment 238K 8% • Driven by Andean & Brazil DL New Enrollment – Organic(1) 8% Total Enrollment 922K 3% Total Enrollment – Organic(1) 3% Revenue $622 (2%) Revenue – Organi

  8. Slide 8: 2019 First Quarter – Enrollment Dynamics by Segment

    2019 First Quarter – Enrollment Dynamics by Segment New Enrollment Total Enrollment (NE) (TE) Notes Organic Organic Q1 ’19 Q1 ‘19 Vs. Q1 ’18 Vs. Q1 ’18 (Enrollments in thousands) • Strong growth in Distance Learning Brazil 97 12% 298 2% • NE Growth DL: 76%, F2F: 2% • TE Growth DL: 54%, F2F: (3%) • T

  9. Slide 9: 2019 First Quarter – Revenue, EBITDA Dynamics by Segment

    2019 First Quarter – Revenue, EBITDA Dynamics by Segment Revenue Adj. EBITDA Notes Organic/CC Organic/CC ($ millions) Q1 ‘19 Vs. Q1 ’18 (1) Q1 ‘19 Vs. Q1 ’18 (1) Brazil 110 4% (31) (34%) • Flat net pricing year-over-year Mexico 157 3% 26 (8%) • Driven by strong enrollments and Andean 139 11% (33) 9%

  10. Slide 10: 2019 First Quarter – Free Cash Flow (FCF)

    2019 First Quarter – Free Cash Flow (FCF) ($ in millions) (2) 9 20 20 Incl. $10M working capital benefit from timing of sale of 14 St. Augustine ($18M) one-time impact in Q1 ‘18 12 (55) 2018 Q1 Capex1 Net Cash Interest 2 Cash Taxes Operations FX 2019 Q1 $60M+ Improvement in FCF Generation NOTE: Free

  11. Slide 11: 2019 Outlook

    2019 OUTLOOK © 2019 Laureate Education, Inc. 11

  12. Slide 12: 2019 Full Year Guidance - Update

    2019 Full Year Guidance - Update Initial Sale of Adjusted ($ in millions) UniNorte (Enrollments in thousands) Guidance Guidance 1 (Brazil) Total Enrollments ~ 890K (25K) ~ 865K Revenue $3,350 - $3,385 ($20) $3,330 - $3,365 Adjusted EBITDA $645 - $655 ($5) $640 - $650 Full Year Guidance adjusted for

  13. Slide 13: Q2 2019 Guidance - Details

    Q2 2019 Guidance - Details (USD millions, except enrollments in thousands) Revenues Adj. EBITDA Q2 2018 Results $1,017 $304 Organic Growth $17 - $27 ($5) - $5 Growth % 2% - 3% (2%) - 2% Q2 2019 FXN Guidance excl. Lease Acct Impact $1,034 - $1,044 $299 - $309 Lease Accounting Impact (ASC-842) ($3) 20

  14. Slide 14: Appendix

    APPENDIX © 2019 Laureate Education, Inc. 14

  15. Slide 15: 2019 First Quarter – Net Income Reconciliation

    2019 First Quarter – Net Income Reconciliation Q1 ’19 B / (W) Vs. Q1 ’18 Notes ($ in millions) Reported $ % Adjusted EBITDA (22) 8 27% Depreciation & Amort. (48) 9 16% Interest Expense, net (51) 9 15% • Lower debt levels Other (25) 17 40% Income Tax 35 12 n.m. Income/(Loss) From (110) 55 n.m. Contin

  16. Slide 16: 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 represents the large intake for our Southern Hemisphere institutions (Brazil, Andean & Rest of World) – Q3 represe

  17. Slide 17: 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 New Enrollments Seasonality Factors Affecting Seasonali

  18. Slide 18: Financial Results & Tables

    Financial Results & Tables © 2019 Laureate Education, Inc. 18

  19. Slide 19: Financial Tables: Consolidated Statements of Operations

    Financial Tables Consolidated Statements of Operations For the three months ended March 31, IN MILLIONS 2019 2018 Change Revenues $ 621.8 $ 632.2 $ (10.4) Costs and expenses: Direct costs 652.4 677.5 (25.1) General and administrative expenses 53.9 47.3 6.6 Operating loss (84.5) (92.6) 8.1 Interest i

  20. Slide 20: Financial Tables: Revenue and Adjusted EBITDA by Segment

    Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant March 31, 2019 2018 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Brazil $ 110.0 $ 122.8 (10)% 4% $ (12.8) $ 4.9 $ — $ — $

  21. Slide 21: Financial Tables: Consolidated Balance Sheets

    Financial Tables Consolidated Balance Sheets IN MILLIONS March 31, 2019 December 31, 2018 Change Assets Cash and cash equivalents $ 278.8 $ 388.5 $ (109.7) Receivables (current), net 454.7 249.3 205.4 Other current assets 358.4 273.0 85.4 Current assets held for sale 308.7 306.4 2.3 Property and equ

  22. Slide 22: Financial Tables: Consolidated Statements of Cash Flows

    Financial Tables Consolidated Statements of Cash Flows For the three months ended March 31, IN MILLIONS 2019 2018 Change Cash flows from operating activities Net income $ 194.3 $ 171.5 $ 22.8 Depreciation and amortization 47.6 67.8 (20.2) Amortization of operating lease right-of-use assets 33.4 — 33

  23. Slide 23: Non-GAAP Reconciliation (1 of 2)

    Financial Tables Non-GAAP Reconciliation (1 of 2) The following table reconciles loss from continuing operations to Adjusted EBITDA for the three months ended March 31, 2019 and 2018: IN MILLIONS 2019 2018 Change Loss from continuing operations $ (110.3) $ (165.6) $ 55.3 Plus: Income tax benefit (35

  24. Slide 24: 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 three months ended March 31, 2019 and 2018: IN MILLIONS 2019 2018 Change Net cash provided by (used in) operating activities $ 45.0 $ (7.1) $ 52.1 Capital expenditures: Purc

  25. Slide 25: © 2019 Laureate Education, Inc.

    © 2019 Laureate Education, Inc. 25

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