Edu Holdings Limited · ASX:EDU
Edu — H1 2023 Earnings Presentation
35 slides from Edu's earnings presentation, Aug 29, 2023
Slide 1: 1H23 Results Presentation
CAREER-READY QUALIFICATIONS IN HEALTHCARE, EDUCATION & COMMUNITY SERVICES OCCUPATIONS 1H23 RESULTS PRESENTATION
Slide 2: Contents
CONTENTS 01 02 03 04 05 06 1H23 Financial Business Unit Capital & Debt Priorities & Appendices Highlights Results Performance Structure Outlook Pg. 8 Pg. 13 Pg. 17 Pg. 22 Pg. 25 Pg. 28
Slide 3: Snapshot
EDU HOLDINGS LIMTED SNAPSHOT ACN 108 962 152 COMPANY OVERVIEW 2 Operating businesses: $10.1m 85 7 1H23 Revenue Permanent Campuses + Online Team Members NSW, VIC, QLD, SA $6.3m 3,646 21 Higher Education Vocational Education Cash balance Enrolments1 Courses - Certificates, & Training (VET) at 30-Jun-2
Slide 4: International Education Sector Bouncing Back
INTERNATIONAL EDUCATION SECTOR BOUNCING BACK NEW STUDENT ENROLMENTS (NSEs) AND ENROLMENTS1 Record year2 for student visa program – 590,000 visa lodgements in 2023 – largest ever received Market resurgence – total international student enrolments in Australia up 31%1. Return to compliance – reintrodu
Slide 5: Career-Ready Qualifications Aligned to Skills Shortages
CAREER-READY QUALIFICATIONS ALIGNED TO SKILLS SHORTAGES 3 of the Top 10 Pathways to skilled Large and growing Occupations with Critical migration employing occupations Skills Shortages EDU qualifies students toward EDU qualifications lead to 15 Childcare Worker and Aged 3 of the top 10 occupations A
Slide 6: Ikon Enrolments Gaining Momentum
IKON ENROLMENTS GAINING MOMENTUM Ikon now firmly established in Enrolments international student market - T2, 2020 - 2023 leveraging EDU’s substantial 848 agent network Extended post-study work rights for courses in areas of workforce shortages - increased attractiveness for 594 international studen
Slide 7: ALG New Student Enrolments on the Rise
ALG NEW STUDENT ENROLMENTS (NSE) ON THE RISE NSEs up 65% (from low base) - leading indicator of enrolments Up 65% on PCP Modest growth in ALG (LTM to T3’23) enrolments - expected to start accelerating • Larger cohorts of graduating students from pre-Covid commencements now largely exited • 24-month
Slide 8: 1H23 Highlights
01 1H23 HIGHLIGHTS
Slide 9: Operational Highlights
OPERATIONAL HIGHLIGHTS Ikon Enrolments1 ALG NSEs Early Childhood Strong shift to up 41% in 1H23 on the rise Education Online 1H23 up 43% on 1H22 Growth continuing - exceeding 59% of Ikon’s 1H23 T3’23 student numbers LTM to T3’23 up 65% on domestic NSEs PCP expectations to be released in week Enables
Slide 10: Financial & Student Metrics
FINANCIAL & STUDENT METRICS FINANCIALS STUDENT METRICS 1H23 vs 1H22 1H23 vs 1H22 Revenue $10.1m $8.9m Letters of Offer 1,774 1,607 EBITDA1 $0.2m ($0.9m) New Student Enrolments 778 558 (NSEs) JUN 23 DEC 22 Cash Balance2 $6.3m $6.1m Enrolments3 3,646 3,698 1 EBITDA is a financial measure which is not
Slide 11: Program Strategy Unfolding
PROGRAM STRATEGY UNFOLDING Higher Value Longer Study Alignment to Expansion of Leverage Online Courses Duration Skills Shortages Course Portfolio Delivery 100% of Ikon 1H23 27 months in 1H23 vs 18 77% of 1H23 enrolments 21 courses in 1H23 Online enrolments3 up revenue from HE vs 64% months in 1H18 i
Slide 12: Capacity for Growth
CAPACITY FOR GROWTH NATIONAL CAMPUS FOOTPRINT 7 campus locations across 4 states + Online 50 Classrooms 2,302 sqm space in Sydney operating at 53% capacity IKON & ALG BRISBANE CAMPUS IKON & ALG MELBOURNE CAMPUS 2,099 sqm space in Melbourne operating at 53% capacity IKON & ALG BRISBANE CAMPUS ALG MEL
Slide 13: Financial Results
02 FINANCIAL RESULTS
Slide 14: Revenue and Earnings Improving
REVENUE AND EARNINGS IMPROVING Group Profit & Loss Statement 1H23 1H22 Variance Variance $'000 $'000 $'000 % Group revenue up 15% - Ikon ALG and Ikon Total revenue and other income 10,252 8,881 1,371 15% revenue growth of 55% offset by 11% Cost of sales (4,703) (4,562) (141) (3%) decline in ALG Gros
Slide 15: Net Cash Improved
NET CASH IMPROVED Consolidated Balance Sheet As at 30-Jun-23 31-Dec-22 Variance $'000 $'000 $'000 $4.5m cash, previously Cash and cash equivalents 6,277 6,075 202 earmarked for Nurse Training Trade and other receivables 2,116 1,229 887 Australia acquisition, has Goodwill 11,918 11,918 - strengthened
Slide 16: Cash Flow Bridge
CASH FLOW BRIDGE ($’000) Net cash improved by $0.2m with operating cash inflows of $2.2m vs PCP cash outflows of $34k. Cash is cyclical due to the timing of tuition fee payments, with 1H typically higher than 2H 16
Slide 17: Business Unit Performance
03 BUSINESS UNIT PERFORMANCE
Slide 18: Business Unit Performance
BUSINESS UNIT PERFORMANCE 1HY23 1H22 1H23 1H22 Ikon 1H23 enrolments up 41%. Growth continuing into Trimester 3, 2023 Revenue $5.5m $3.6m $4.7m $5.3m ALG enrolments fell 21% in EBITDA $1.1m ($0.1m) ($0.1m) ($0.1m) 1H23, however NSEs were up 43% on PCP. Term 3, 2023 was ALG’s second consecutive Studen
Slide 19: Enrolments
ENROLMENTS Enrolments and NSEs Student and unit enrolments 3-year CAGR – 28% International students Continued shift to Building momentum in ALG NSEs on the rise - represented 44% of Ikon’s Online for Ikon domestic Early Childhood increased prominence of 1H23 enrolments, enrolments, Trimester 2, Educ
Slide 20: Momentum Accelerating in Ikon
MOMENTUM ACCELERATING IN IKON Ikon Profit & Loss Statement 1H23 revenue up 55%, EBITDA 1H23 1H22 Variance Variance $'000 $'000 $'000 % up sharply to $1.1m from $0.1m Revenue loss in 1H22 International student revenue 2,275 927 1,348 145% Domestic student and other revenue 3,273 2,657 616 23% Total r
Slide 21: ALG Student Numbers Gradually Rising
ALG STUDENT NUMBERS GRADUALLY RISING ALG Profit & Loss Statement Revenue and earnings down on 1H23 1H22 Variance Variance the PCP due to lower enrolments $'000 $'000 $'000 % Revenue International student revenue 4,515 5,301 (786) (15%) Domestic student and other revenue 189 (4) 193 n/a Total revenue
Slide 22: Capital & Debt Structure
04 CAPITAL & DEBT STRUCTURE
Slide 23: Capital Structure
CAPITAL STRUCTURE Supportive institutional investors alongside meaningful Board and Management alignment ENTERPRISE VALUE1 SHAREHOLDERS BY CATEGORY Number % Diluted Ordinary shares 165,214,443 96.3% Performance rights2 6,416,198 3.7% 20% Board & Management Fully diluted 171,630,641 100.0% Institutio
Slide 24: Cash and Debt
CASH AND DEBT Gearing 30-Jun-23 31 Dec-22 Variance $'000 $'000 % Cash and cash equivalents 6,277 6,075 3% $6.3m $4.0m Acquisition facility (2,250) (2,250) - Cash at bank Net cash up 5% Net cash 4,027 3,825 5% Gearing ratio 30-Jun-23 31 Dec-22 Variance Gearing ratio - debt1 16% 15% 1% $2.3m Acquisiti
Slide 25: Priorities & Outlook
05 PRIORITIES & OUTLOOK
Slide 26: Strategic Priorities
STRATEGIC PRIORITIES EBITDA positive Accelerate rebuild of Broaden course Explore alternatives to in 2023 ALG Enrolments offering aligned to enter Nurse training Skills Shortages market Benefit from operating leverage given underutilised Launch of new courses in HE Seek alternative acquisitions capa
Slide 27: 2H23 Outlook
2H23 OUTLOOK NSE and enrolment growth to BECE enrolment momentum Revenue and EBITDA up on continue as market settings to continue PCP normalise 2 new HE courses intended to Introduction of new courses in be submitted to TEQSA for existing and new fields of accreditation study Enrolments and revenue
Slide 28: Appendices
06 APPENDICES
Slide 29: Deep Education Sector & Corporate Experience
DEEP EDUCATION SECTOR & CORPORATE EXPERIENCE ALIGNED THROUGH SIGNIFICANT EQUITY INTEREST EXECUTIVE MANAGEMENT BUSINESS UNIT LEADERSHIP SHAREHOLDER STRUCTURE ADAM LYNDON RYAN DR EHSAN DAVIS CATZEL LAWSON AHMED Chief Executive Officer Chief Financial Officer General Manager, Executive Dean, & Managing
Slide 30: Global Recruitment Network
GLOBAL RECRUITMENT NETWORK 280 active education agents Recruiting from UK 80 source markets 3.1% for France China 1.2% Nepal Japan 1.0% Mexico Spain 1.3% Italy 1.3% Turkiye 10.2% Hong Kong 2.3% 2 business units in 1.0% 1.4% 1.5% India 7 campus locations across Vietnam Philippines Colombia 2.6% 2.7%
Slide 31: Group Half on Half Analysis
GROUP Half on Half Analysis Group 1H23 1H22 Variance 2H22 2H21 Variance $'000 $'000 % $'000 $'000 % ALG and Ikon Total revenue and other income 10,252 8,881 15% 8,786 10,271 (14%) Cost of sales (4,703) (4,562) (3%) (4,000) (4,900) 18% Gross profit 5,549 4,319 28% 4,786 5,371 (11%) Gross margin (%)*
Slide 32: Ikon Half on Half Analysis
IKON Half on Half Analysis Ikon 1H23 1H22 Variance 2H22 2H21 Variance $'000 $'000 % $'000 $'000 % Revenue International student revenue 2,275 927 145% 1,332 674 98% Domestic student revenue 3,273 2,657 23% 2,969 2,656 12% Total revenue 5,548 3,584 55% 4,301 3,330 29% Cost of sales Commission (342) (
Slide 33: ALG Half on Half Analysis
ALG Half on Half Analysis ALG 1H23 1H22 Variance 2H22 2H21 Variance $'000 $'000 % $'000 $'000 % Revenue International student revenue 4,515 5,301 (15%) 4,431 6,595 (33%) Domestic student and other revenue 189 (4) n/a 54 346 (84%) Total revenue 4,704 5,297 (11%) 4,485 6,941 (35%) Cost of sales Commis
Slide 34: Disclaimer
DISCLAIMER This presentation, dated 29 August 2023, provides additional While all reasonable care has been taken in relation to the commentary on the Half-Year Report for the period ended 30 June preparation of this presentation, none of the Company, its 2023 for EDU Holdings Limited (EDU, EDU Holdi
Slide 35: Contact
CONTACT Adam Davis, CEO E: adam.davis@eduholdings.com.au P: 1300 254 000 M: +61 408 400 888 Lyndon Catzel, CFO E: lyndon.catzel@eduholdings.com.au P: 1300 254 000 M: +61 414 907 384 35