Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q1 2020 Earnings Presentation
35 slides from Laureate Education's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020 Earnings Presentation
First Quarter 2020 Earnings Presentation May 7, 2020 © 2020 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 and Free Cash Flow. We have included the
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 © 2020 Laureate Education, Inc. 4
Slide 5: Summary - Highlights
Summary - Highlights Rapid response to COVID-19 - over 800K students transitioned to Online in 4 weeks Leveraging broad online delivery capabilities for protecting student outcomes Q1 new enrollments down 6% - C1 intake partially impacted in Brazil & Andean Q1 Adj. EBITDA ($17M) below guidan
Slide 6: Response to COVID-19
RESPONSE TO COVID-19 © 2020 Laureate Education, Inc. 6
Slide 7: Rapid COVID-19 Response
Rapid COVID-19 Response • Protect the health and well-being of our students, faculty & staff – Physical campuses are closed – Staff and faculty are working remotely • Continue to serve our students in a responsible manner – Fully online classes with strong quality assurance tools – Assistance for st
Slide 8: Conversion to Fully Online at Laureate Network Institutions
Conversion to Fully Online at Laureate Network Institutions % Completion for Transition to Fully Online Peru & ANZ coming online 100% Mexico coming 87% 89% online Chile & Brazil coming online 61% 48% 38% WHO declares COVID-19 a pandemic 11-Mar 17-Mar 18-Mar 19-Mar 23-Mar 30-Mar 6-Apr Technology Plat
Slide 9: Laureate's Online Advantage
LAUREATE’S ONLINE ADVANTAGE © 2020 Laureate Education, Inc. 9
Slide 10: Laureate's Leadership in Digital Teaching and Learning
Laureate’s Leadership in Digital Teaching and Learning Infrastructure Product Solutions Faculty Preparedness Student Support Majority of institutions High quality, scalable Faculty trained in Robust data analytic using Bb Learn and products; thousands of methods and techniques tools to review and Bb
Slide 11: Commitment to Digitally Enabled Classroom Environment
Commitment to Digitally Enabled Classroom Environment Over the past five years (as part of Laureate’s Hybridity Initiative), network institutions have developed the discipline to efficiently and effectively pivot from face-to-face to digital course delivery to ensure continuity of instruction Succes
Slide 12: Supporting Faculty and Students
Supporting Faculty and Students In response to the COVID-19 pandemic, all Laureate institutions have implemented effective practices to ensure a high-quality learning experience for students Additional Faculty Training in Effective Synchronous Course Delivery Regular and Consistent Communication wit
Slide 13: Q1 2020 Performance Results
Q1 2020 PERFORMANCE RESULTS © 2020 Laureate Education, Inc. 13
Slide 14: 2020 First Quarter – Financial Summary
2020 First Quarter – Financial Summary Q1 ’20 Variance Notes ($ in millions) (Enrollments in thousands) Results Vs. Q1 ‘19 New Enrollment (timing adjusted*) 214K (10%) • Sale of UniNorte Brazil in November 2019 New Enrollment – Organic(1) (6%) • COVID-19 impacted end of enrollment cycle (timing adju
Slide 15: 2020 First Quarter – Summary Results vs Guidance
2020 First Quarter – Summary Results vs Guidance (USD millions, except enrollments in thousands) Revenues Adj. EBITDA Q1 2020 Guidance (mid-point) @ Spot FX $565 ($20) Academic Calendar Timing * ($7) ($7) FX Impact ($16) ($7) Operations incl. COVID-19 Impact ($13) ($3) Q1 2020 Results (Reported) $52
Slide 16: Academic Calendar Timing Impacts - Andean Region
Academic Calendar Timing Impacts - Andean Region Week Of 2/24 3/2 3/9 3/16 3/23 3/30 4/6 4/13 UNAB UDLA AIEP UVM UPC UPN Shift due to COVID-19 Cibertec 2019 semester start date 2020 semester start date 2020 semester start date (COVID-19) Changes in Academic Calendar in Andean Segment impacting YoY C
Slide 17: 2020 First Quarter – Enrollment Dynamics by Segment
2020 First Quarter – Enrollment Dynamics by Segment Total Enrollment New Enrollment (NE) (TE) Notes Organic Timing Adj.* Organic Q1 ’20 Vs. Q1 Organic Q1 ‘20 Vs. Q1 (Enrollments in thousands) ’19 Vs. Q1 ’19 ’19 • COVID-19 impacted enrollment Brazil 80 (9%) (9%) 268 (1%) • NE Growth DL: (26%), F2F: (
Slide 18: 2020 First Quarter – Revenue, EBITDA Dynamics by Segment
2020 First Quarter – Revenue, EBITDA Dynamics by Segment Revenue Adj. EBITDA Notes Organic/CC Organic/CC ($ millions) Q1 ‘20 Vs. Q1 ’19 (1) Q1 ‘20 Vs. Q1 ’19 (1) Brazil 84 (1%) (19) 33% • Cost actions taken in 2019 Mexico 154 2% 23 10% • Led by UNITEC • Excluding timing impact variances, Andean 90 (
Slide 19: Aggressive Expense Management To Preserve Liquidity
Aggressive Expense Management To Preserve Liquidity Cash & Equivalents Snapshot Liquidity Preservation Actions $547 • $547M Liquidity by end of Q1 ‘20 • Cash preservations actions in place $340 $100M+ operating cost reduction CapEx (non-essential) frozen until visibility improves • Net leverage is
Slide 20: 2020 Outlook
2020 OUTLOOK © 2020 Laureate Education, Inc. 20
Slide 21: 2020 Full Year Guidance - Update
2020 Full Year Guidance - Update (USD millions, except Total Free Cash Revenues Adj. EBITDA Comments enrollments in thousands) Enrollment Flow (3) Prior Guidance (mid-point) 910K $3,150 $678 $230 Prior to COVID-19 Current spot FX; significant FX Impact (1) - ($250) ($55) ($28) weakening Operational
Slide 22: Q2 2020 Guidance - Details
Q2 2020 Guidance - Details (USD millions) Revenues Adjusted EBITDA Q2 2019 Results $992 $299 Excluding UniNorte (sold in 2019) ($12) ($3) Q2 2019 Results Excluding UniNorte $980 $296 Operational Changes including COVID-19 ($80) – ($40) ($41) – ($21) Growth % (8%) – (4%) (14%) – (7%) Q2 2020 FXN Guid
Slide 23: Appendix
APPENDIX © 2020 Laureate Education, Inc. 23
Slide 24: 2020 First Quarter – Net Income Reconciliation
2020 First Quarter – Net Income Reconciliation Q1 ’20 B / (W) Vs. Q1 ’19 Notes ($ in millions) Reported $ % Adjusted EBITDA (37) (7) (25%) • Academic calendar timing Depreciation & Amort. (44) 3 6% Interest Expense, net (33) 18 35% • Lower debt balances Other 4 29 n.m. • Loss on debt extinguishment
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 represents the large intake for our Southern Hemisphere institutions (Brazil, Andean & Rest of World) – Q3 represe
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 31% 31% 52% 29% 30% 28% 28% 27% 27% 46% 25% 24% 24% 24%
Slide 27: Financial Results & Tables
Financial Results & Tables © 2020 Laureate Education, Inc. 27
Slide 28: Financial Tables
Financial Tables Consolidated Statements of Operations For the three months ended March 31, IN MILLIONS 2020 2019 Change Revenues $ 528.6 $ 601.1 $ (72.5) Costs and expenses: Direct costs 589.0 639.2 (50.2) General and administrative expenses 52.9 53.9 (1.0) Loss on impairment of assets 3.8 — 3.8 Op
Slide 29: Financial Tables
Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant March 31, 2020 2019 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Brazil $ 83.7 $ 110.0 (24)% (1)% $ (26.3) $ (1.0) $ — $ (
Slide 30: Financial Tables
Financial Tables Consolidated Balance Sheets IN MILLIONS March 31, 2020 December 31, 2019 Change Assets Cash and cash equivalents $ 546.7 $ 339.6 $ 207.1 Receivables (current), net 383.0 260.5 122.5 Other current assets 309.9 259.0 50.9 Current assets held for sale 72.4 83.8 (11.4) Property and equi
Slide 31: Financial Tables
Financial Tables Consolidated Statements of Cash Flows For the three months ended March 31, IN MILLIONS 2020 2019 Change Cash flows from operating activities Net income $ 98.3 $ 194.3 $ (96.0) Depreciation and amortization 44.2 47.6 (3.4) Loss on impairment of assets 3.8 — 3.8 Loss (gain) on sales o
Slide 32: Financial Tables
Financial Tables Non-GAAP Reconciliation (1 of 3) The following table reconciles income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the three months ended March 31, IN MILLIONS 2020 2019 Change Income (loss) from continuing operations $ 124.1 $ (117.1) $ 241.
Slide 33: Financial Tables
Financial Tables Non-GAAP Reconciliation (2 of 3) The following table reconciles income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the years ended December 31, IN MILLIONS 2019 2018 2017 Income (loss) from continuing operations $ 13.7 $ (10.5) $ 16.4 Plus: E
Slide 34: Financial Tables
Financial Tables Non-GAAP Reconciliation (3 of 3) The following table reconciles operating cash flow to Free Cash Flow for the three months ended March 31, 2020 and 2019: IN MILLIONS 2020 2019 Change Net cash (used in) provided by operating activities $ (3.5) $ 45.0 $ (48.5) Capital expenditures: Pu
Slide 35: © 2020 Laureate Education, Inc.
© 2020 Laureate Education, Inc. 35