Edu Holdings Limited · ASX:EDU
Edu — H1 2020 Earnings Presentation
29 slides from Edu's earnings presentation, Feb 27, 2020
Slide 1: 1H20 Results
...momentum building 1H20 RESULTS
Slide 2: 1H20 Key Metrics
1H20 KEY METRICS1,2 Group Operating EBITDA ‘($000) Basic earnings per share - Group Revenue Revenue ‘($000) ($’000) Operating EBITDA ($’000) 3 Basic Earnings per share continuing operations (cents)4 1H 2H 1H 2H 1H 2H 25,000 1.2 3,000 1.2 1.0 1.0 2,500 20,000 0.8 0.8 12,792 2,000 15,000 1.05 0.6 0.6
Slide 3: Group Overview
GROUP OVERVIEW Tertiary education provider Health and Community Services focus International and domestic students National campus footprint Growing organically and through acquisitions Operating leverage emerging, delivering strong operating cash flows Earnings growth expected to continue as enrolm
Slide 4: Our Businesses
OUR BUSINESSES 3 1H20 FY19 1H20 FY19 Revenue: $9.4m $15.1m $3.3m $6.9m EBITDA: $1.2m $1.1m $0.6m $1.5m Students1: 2,288 2,001 406 426 Education sector2: Vocational Higher Education Student market2: International Domestic Student recruitment2: Education Agents Direct Funding source2: Fee-for-service
Slide 5: Key Highlights
KEY HIGHLIGHTS 1H20 RESULTS 5
Slide 6: 1H20 Key Achievements
1H20 KEY ACHIEVEMENTS1 Operating leverage Record HE course emerging student growth development underway First new HE course Operating EBITDA ALG international student since acquisition, on track for margin 13.9%, up from 0.6% enrolments up 41.1% 2021 academic year launch Community Services Melbourne
Slide 7: 1H20 Group Financial Highlights
1H20 GROUP FINANCIAL HIGHLIGHTS Revenue Gross profit Operating EBITDA1 1H20 1H19 Variance 1H20 1H19 Variance 1H20 1H19 Variance $12.7m $9.2m 38.6% $5.9m $4.0m 47.4% $1.8m $0.1m >1,000% Operating EBITDA Underlying EBITDA/ Net operating cashflow margin1 margin2 1H20 1H19 1H20 1H19 Variance 3 EBITDA $1
Slide 8: Strategy on Track
STRATEGY ON TRACK Developing pathways across the student lifecycle Extending lifetime value of student Expanding course offering and campus capacity Degrees Typical duration1: 3 years Typical price1: $47,000 Diplomas Typical duration1: 18 months Typical price1: $13,000 Certificates Typical duration1
Slide 9: Building Foundations for Growth
BUILDING FOUNDATIONS FOR GROWTH1 Capacity Capacity Training Rooms – training rooms Courses Courses – qualifications offered Room Room utilisation – rooms by city Utilisation Vocational (VET) Higher Ed (HE) Utilised Unutilised 60 25 25 25 50 20 20 20 40 30% 15 15 15 33% 30 10 10 10 20 70% 62% 10 5 5
Slide 10: Student Enrolments
STUDENT ENROLMENTS1,2 ALG and Ikon student enrolments by term Student enrolments (number) 5,000 ■ Broadening of ALG course ALG student enrolments Ikon student enrolments offering, campus capacity and 4,500 national rollout of Community Services courses continuing to deliver growth 4,000 ■ Positive e
Slide 11: Student Profile
STUDENT PROFILE All by course Students by city Average Durage (months) By course By city Duration (months)1 3,000 3,000 25 2,500 2,500 20 2,000 2,000 15 1,500 1,500 10 1,000 1,000 5 500 500 0 0 0 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q20 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q20 FY17 FY18 FY19 1H20 Health (VET) C
Slide 12: Financial Results
FINANCIAL RESULTS 1H20 RESULTS 12
Slide 13: Key Highlights – Group Profit and Loss
KEY HIGHLIGHTS – GROUP PROFIT AND LOSS Group Revenue Group EBIDTA Revenue EBITDA 14,000 3,000 25% ALG Ikon ALG Ikon EBITDA Margin 12,000 2,500 20% 10,000 2,000 8,000 15% Inside circle reduced by 70% 1,500 6,000 all should have data attached 10% Inside circle reduced by 70% 4,000 White circle reduced
Slide 14: Group Profit and Loss
GROUP PROFIT AND LOSS Operating leverage emerging 1H20 1H19 Variance ■ Group revenue up 38.6%, boosted by strong contribution from both ALG and Ikon. ALG Post Pre Pre $’000 % student numbers up 41.1% on PCP AASB 16 AASB 16 AASB 16 Revenue 12,743 12,743 9,193 3,550 38.6% ■ Investment in new Melbourne
Slide 15: ALG
ALG Melbourne contributing, strong support for Community Services courses 1H20 1H19 Variance ■ Record half-year revenue and EBITDA, aided by increased student numbers and new Melbourne campus Post Pre Pre $’000 % AASB 16 AASB 16 AASB 16 ■ 1H20 revenue growth of 36.9% attributable to 41.1% Revenue 9,
Slide 16: Ikon
IKON Strategic entry into Higher Education underway 1H20 1H19 Variance ■ Ikon acquired 4 July 2018 as strategic entry into Higher Education sector, now out of earn-out Post Pre Pre $’000 % AASB 16 AASB 16 AASB 16 ■ Performance exceeded expectations at time of Revenue 3,332 3,332 2,319 1,013 43.7% ac
Slide 17: Balance Sheet and Cashflow
BALANCE SHEET AND CASHFLOW Strong cash conversion 31 Dec-19 30 Jun-19 ■ Cash balance strengthened to $3.2m at 31 December 2019, from $1.6m at 31 December 2018 $’000 $’000 Cash and cash equivalents 3,186 4,689 ■ Balance sheet now carries the-right-of-use-assets and lease Trade and other receivables 1
Slide 18: Debt Structure
DEBT STRUCTURE ■ $6.5M earn-out payment for Ikon was paid in October 2019, 31 Dec-19 30 Jun-19 funded $3.5m from increase in CBA acquisition facility, Gearing $’000 $’000 Variance $1.3m from institutional placement and the remaining Acquisition facility 4,500 1,200 3,300 $1.7m from internally genera
Slide 19: FY20 Priorities and Outlook
FY20 PRIORITIES AND OUTLOOK 1H20 RESULTS 19
Slide 20: FY20 Priorities
FY20 PRIORITIES Integration of Ikon and ALG Continue ALG national course rollout Program development in Ikon and ALG Build organisational capacity with a focus on quality and compliance Longer term UCW intends to recommence its acquisition program: targeting strategic acquisitions that can leverage
Slide 21: FY20 Full Year Outlook
FY20 FULL YEAR OUTLOOK Record revenue and EBITDA expected Continued student growth expected — 3Q20 ALG international enrolments of 2,458, up 31.9% on PCP — Ikon Feb’20 intake expected to be in line with PCP (172 commencements) Operating margin expected to improve — Tempered by planned further invest
Slide 22: Appendices
- a a sa KC | = APPENDICES 1H20 RESULTS | 22
Slide 23: Capital Structure
CAPITAL STRUCTURE Ownership5 Number % Diluted Ordinary shares 117,514,448 97.0% 40.0% Board and Options1 800,000 0.7% Management Performance rights2 2,850,000 2.4% Fully diluted 121,164,448 100.0% $'000 Market capitalisation at $0.225 per share3 26,441 Cash 3,186 Debt4 (5,501) Enterprise value 28,75
Slide 24: Course Offering
COURSE OFFERING ■ 6 higher education qualifications (incl. Higher Education (Degrees) Job outcomes nested diploma and associate degrees) Arts Therapy Counselor or art therapist ■ 16 vocational qualifications (certificates Counselling and Psychotherapy Counselor or psychotherapist and diplomas) ■ Con
Slide 25: Student Diversity
STUDENT DIVERSITY 0 20 40 60 80 100 ALG international student enrolments by source region1 Other ■ International students from > 75 source Latam, 29.2% Asia, 31.9% Europe, 33.0% 5.8% countries ■ Top 20 source countries represent 82.2% ALG international student enrolments by source country (Top 20)1
Slide 26: Board and Executives
BOARD AND EXECUTIVES Adam Davis, BAppFin (Macquarie University) Gary Burg, BAcc (Wits), MBA (Wits) Chief Executive Officer and Managing Director Non-Executive Chair Adam has extensive experience in the education sector as founder Gary has been involved with Global Capital Group since 1995 in South A
Slide 27: Contacts
CONTACTS Adam Davis Lyndon Catzel Chief Executive Officer Chief Financial Officer E: adam@ucw.com.au E: lyndon@ucw.com.au P: +61 2 9112 4541 P: +61 2 9112 4540 M: 0408 400 888 M: 0414 907 384 1H20 RESULTS 27
Slide 28: Disclaimer
DISCLAIMER This presentation, dated 27 February 2020, provides additional commentary on the Financial Report for the half-year ended 31 December 2019 for UCW Limited (UCW or the Company) and accompanying information provided to ASX on the same date. As such, it should be read in conjunction with tho
Slide 29: Limited
LIMITED