Slide 1: Investor Presentation June 2013
Investor Presentation June 2013 Confidential Presentation
Slide 2: Company Overview
Company Overview
Slide 3: India's Largest Organised Education Services Player
India‘s Largest Organised Education Services Player … Company Overview Company Overview (Contd … ) Diversified education services provider with a presence High brand equity creates significant and as yet unrealized spanning the entire education ecosystem cross-selling business opportunities – ~3
Slide 4: In India's Fastest Growing Sector
… In India’s Fastest Growing Sector Total Expenditure ($bn) 2011 2020 Education and Leisure(1) 95 3.2x 300 Housing and Consumer Durable(2) 240 3.1x 750 Health 60 3.1x 185 Transport and Communication 220 3.0x 665 Clothes and Footwear 75 3.0x 25 Food(3) 385 2.3x 895 Others(4) 175 3.2x 565 Total $1,250
Slide 5: Snapshot of Our Business – Comprehensive Offerings Across the Education Ecosystem
Snapshot of Our Business – Comprehensive Offerings Across the Education Ecosystem 2 – 5 years 5 – 18 years 18 – 21 years 21 – 25 years Pre-Schools Pre-School Initiatives Digital Content Solutions High Schools High School Initiatives Professional Development Higher Education Vocational Education High
Slide 6: Our Mission and Core Values
Our Mission and Core Values To apply innovative solutions to solve critical problems relating to quality of education and access to education for all in India Entrepre- Quality and Financial Innovation Leadership neurship Excellence Prudence A commitment A commitment to A dedication to A commitment
Slide 7: Key Highlights
Key Highlights 7
Slide 8: Multiple Engines of Sales and Value Creation
Multiple Engines of Sales and Value Creation Current Market Educomp Presence Current Penetration Market Position Value Creation Multimedia < 18% (by schools) $1bn SmartClass No. 1 player High Content < 5% (by classrooms) ICT $90m EduReach < 2% No. 1 player Medium Leading Corporate Pre Schools $1bn L
Slide 9: Smart Class – First of its Class Digital Curriculum Product in India
Smart Class – First of its Class Digital Curriculum Product in India Market leading digital content solutions targeted at K-12 private unaided schools No. of Schools Covered (No. of Schools) 5-Year CAGR: 74% No. of Students Covered (mn) 5-Year CAGR: 46% Source: Company data 9
Slide 10: Significant Addressable Segment Still Available
Significant Addressable Segment Still Available Our addressable market is 194,000 private unaided schools with 1.8 million classrooms Number of Schools in India as in 2011 ('000) Number of Classrooms in India as in 2011 ('000) Addressable Addressable Segment Segment Number of Private Unaided English
Slide 11: Market for Tablets in India expected to grow strongly
Market for Tablets in India expected to grow strongly and education focused tablets be 15-25% of the market Three potential scenarios exist for Tablets can reach 20-40 Mn units by FY 16 educational tablets Conservative case – 15% of the market # Tablets ('000) Threat of substitutes on content • Avai
Slide 12: Rapid Innovation in Smartclass
Rapid Innovation in Smartclass Launch of Integrated Digital Teaching System - a superior version of its smart class product DTS integrated with finger touch SMART board Upgrade of smart class content - classroom transformational system providing Educomp a significant competitive edge Smart cla
Slide 13: EduReach Business Overview
EduReach Business Overview Partnering with the Government to improve access to IT in public schools Overview of EduReach No. of Schools Covered ICT@Schools program is a government initiative in the Public Private (No. of Schools) Partnership model to IT enable potentially ~1mn Government schools 1
Slide 14: K-12 Business – Stability through Long Term Annuity Cash Flows
K-12 Business – Stability through Long Term Annuity Cash Flows Hoshiarpur 99 Schools Visibility Baddi Bijnor – 51 Operational (37 Owned, 14 Franchisee) Missourie Amristsar Gharaunda – 21 Land Parcels Muzzafarpur Srinagar Meerut – 27 New Franchisee Agreements Signed Dehradun Ludhiana Bhatinda Bazpu
Slide 15: High-quality K12 Schools across the country
High-quality K12 Schools across the country PSBB Learning Leadership Academy, The Millennium School, Lucknow The Millennium School, Mohali Bangalore The Millennium School, Patiala The Millennium School, Noida The Millennium School, Panipat The Millennium School, Amritsar The Millennium School, Kuruk
Slide 16: High-quality K12 Schools across the country
High-quality K12 Schools across the country Takshila School, Hoshiarpur PSBB Millennium School, Coimbatore Mussoorie International School The Millennium School, Meerut Universal Academy, Tavru PSBB Millennium School, Chennai Porur PSBB Millennium School, Chennai OMR Shriram Millennium School, Noida
Slide 17: High-quality K12 Schools across the country
High-quality K12 Schools across the country Takshila School, Ahmednagar Millennium School, Agra Millennium School, Bhatinda The Millennium School, Indore Universal Academy, Dehradun PSBB Millennium School, GST Road, Chennai The Millennium School, Nagpur Takshila School, Barnala Takshila School, Sang
Slide 18: Building High Quality Design Programs in India
Building High Quality Design Programs in India An Educomp Raffles Joint Venture Hyderabad Campus Kolkata Campus Ahmedabad Campus Bangalore Campus Delhi Campus Chennai Campus 18
Slide 19: Building International Quality Higher Education Campus
Building International Quality Higher Education Campus 19
Slide 20: Strategic Priorities Going Forward
Strategic Priorities Going Forward 20
Slide 21: Educomp 2.0
Educomp 2.0 Educomp 2.0 Digital Content, IP based Asset Backed offerings Non-Core offerings offerings • SmartClass digital content over DTS, Tablets, • 55 schools, 225 pre-schools, 7 • Asset Online • Assessments, English Language Labs higher-ed colleges Monetization • Presence in 15,000 pvt. Schools
Slide 22: Business Transformation – 6 Point Agenda
Business Transformation – 6 Point Agenda 1. Focus Focus on Core businesses - Long term big ticket opportunities ie. Digital Content and School Solutions, K12 schools, Higher Education Exit Non-Core businesses/ Identify assets and monetize 2. Cautious Growth Focus on improvement in operational
Slide 23: Up-Sell and Cross-Sell to be an Education Partner to schools
Up-Sell and Cross-Sell to be an Education Partner to schools for all student needs Move from being a partner for the school to an Counseling for application to international universities 5 education partner for all student needs Help with the application process; SAT, GRE, GMAT Managing end-to-end
Slide 24: Grow K-12 schools portfolio on the back of Asset-light JV model
Grow K-12 schools portfolio on the back of Asset-light JV model Ability to focus on core competencies Control on quality and Lower capex operations required Asset Light Model Faster scalability Only plausible by targeting option to target suitable partners Tier 1 / Tier 2 cities Asset light model en
Slide 25: Focus on reduction in Capital Expenditure; Focus on Free Cashflow
Focus on reduction in Capital Expenditure; Focus on Free Cashflow FY’11 Capex $144mn FY’12 Capex $88mn FY’13 Capex $35mn FY’13 capital expenditure down by more than 50% y-o-y based on continued asset-light strategy in K- 12 25
Slide 26: Financial Metrics
Financial Metrics 26
Slide 27: Financial Performance
Financial Performance Revenue Performance EBITDA Performance ($ in million) ($ in million) PAT Performance Debt / Equity(1) ($ in million) 27
Slide 28: Financial Performance (Cont'd)
Financial Performance (Cont’d) Capital Employed Credit Overview ($ in million) First-mover advantage, innovative business offerings, market leadership in multimedia education, and a diversified presence across key segments of the education sector covering pre-schools, K-12 education, multimedia an
Slide 29: Appendix
Appendix 29
Slide 30: Indians Give Prime Importance to Education, Even Surpassing Health and Savings
Indians Give Prime Importance to Education, Even Surpassing Health and Savings... % of Consumers Who Believe Category Is More Important than Two Years Ago Source: BCG Global Consumer Sentiment survey 2012; n=2201. Note: Survey among Indian Consumers. Survey question: Below is a list of terms and val
Slide 31: One of India's Largest Sectors with a Significant Share in Household Spending
…Making It One of India's Largest Sectors with a Significant Share in Average Household Spending Education Sector Estimated at ~$73bn in 2010 High Spend on Education Estimated Market Size ($bn) in 2010 Major Household Expenses Avg. Household spending as % of Total Expenses(1) Source: IBEF, Credit Su
Slide 32: Rapid Increase in the Number of Schools; Private Unaided Schools Growing Fastest
India is Witnessing a Rapid Increase in the Number of Schools Over the Years — Private Unaided Schools Growing the Fastest Number of Private Unaided Schools CAGR: +9% CBSE has estimated a shortage of 200,000 schools in India over the next 10 years - Private unaided schools have emerged as a growth e
Slide 33: Multiple Factors Drive the Growth of Private Unaided Schools
Multiple Factors Drive the Growth of Private Unaided Schools Increasing Income Levels Among HHs Insufficiency of Government Initiatives Higher Demand of Quality Education Although Government has taken multiple Demand for quality education across initiatives… income categories – Like DPEP(1) and
Slide 34: Current Market of ~64K English Medium Private Unaided Schools
Current Market of ~64K English Medium Private Unaided Schools Has Potential to Add ~25K New Schools by FY16 Expected Additions to English Medium Private Unaided Total Number of Schools in India as of FY’11 Schools by FY’16 # of Schools (000s) Potential of ~25k new English medium PUA schools to be ad
Slide 35: Exceeding customer expectation: Quality, Training and Hardware
Exceeding customer expectation with 90% of customers giving Excellent + Good feedback on Quality, Training and Hardware Quality of Training for Training for content basic usage module usage Hardware Tamil Nadu Karnataka Andhra Pradesh Punjab Kerala Maharashtra Uttar Pradesh Haryana Madhya Pradesh Gu
Slide 36: Exceeding customer expectation: Documentation and RC services
Exceeding customer expectation with 90% of customers giving Excellent feedback on Documentation and RC services RC – Punctuality & RC – Comm. RC – Documentation Regularity skills Presentability Tamil Nadu Karnataka Andhra Pradesh Punjab Kerala Maharashtra Uttar Pradesh Haryana Madhya Pradesh Gujarat
Slide 37: Forward Looking Statement
Forward Looking Statement Certain statements in this document with words or phrases such as “will”, “should”, etc., and similar expressions or variation of these expressions or those concerning our future prospects are forward looking statements. Actual results may differ materially from those sugge