Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q4 2023 Earnings Presentation
35 slides from Laureate Education's earnings presentation, Feb 22, 2024
Slide 1: Fourth Quarter & Year-End 2023 Earnings Presentation
Fourth Quarter & Year-End 2023 Earnings Presentation February 22, 2024 © 2024 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 and its related margin, Adjusted EBITDA to Unlevered Free Cash Fl
Slide 4: Summary Overview
SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding © 2024 Laureate Education, Inc. 4
Slide 5: Executive Summary
Executive Summary Fourth quarter Revenue and Adjusted EBITDA ahead of guidance; Net Income of $42M in Q4 Robust performance in FY 2023 – continued growth, margin expansion and cash generation ‒ Delivered double-digit growth in Revenue and Adjusted EBITDA, margins at historic high and Adjusted EB
Slide 6: Key Academic Highlights in 2023
Key Academic Highlights in 2023 UPC in Peru: For the third consecutive year, UPC in Peru was ranked the #1 Education Brand in the country by Merco, and even more impressively, was ranked 9th among all Universidad Peruana de Ciencias Aplicadas (UPC) organizations across various industries in the coun
Slide 7: Compelling Investment Characteristics
COMPELLING INVESTMENT CHARACTERISTICS © 2024 Laureate Education, Inc. 7
Slide 8: Large Markets with Low Penetration Rates in Higher Education
Large Markets with Low Penetration Rates in Higher Education Mexico Peru Combined Population (M) 129M 32M 161M Higher Education 5,193 1,841 7,034 Students (000s) Higher Education Gross U.S. E.U. 34%2 52%2 38% 60% 56% Participation Rate1 Market Share for 43% 74% 54% Private Institutions2 Sources: UNE
Slide 9: Leading University Portfolio in Mexico & Peru
Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 12/31/23 Segment Overall Ratings / Rankings Ranked Top 10 university in Mexico Premium/ 1960 113,200 5-Stars rated by QS Stars™ in categories Traditional Mexico Universidad del of Employability, Inclusiv
Slide 10: Q4 & FY 2023 Performance Results
Q4 & FY 2023 PERFORMANCE RESULTS © 2024 Laureate Education, Inc. 10
Slide 11: 2023 Fourth Quarter – Financial Summary
2023 Fourth Quarter – Financial Summary Q4 ’23 Variance Vs. Q4 ‘22 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Not a material intake period, New Enrollment 8K 40% 40% impacted by timing of intakes • Mexico +9%, Peru +3% Total Enrollment 449K
Slide 12: 2023 FY – Financial Summary
2023 FY – Financial Summary FY ’23 Variance Vs. FY ‘22 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Strong intakes during 2023 New Enrollment 241K 10% 10% • Mexico +11%, Peru +9% • Mexico +9%, Peru +3% Total Enrollment 449K 6% 6% • Driven by n
Slide 13: Segment Results
SEGMENT RESULTS © 2024 Laureate Education, Inc. 13
Slide 14: Mexico Segment Results
Mexico Segment Results Q4 Results FY Results Notes ($ in millions) Organic/CC Organic/CC (Enrollments rounded to the nearest Q4 ’23 FY ’23 thousand) Vs. Q4 ’22 (1) Vs. FY ’22 (1) • Strong primary and secondary New Enrollment 7K 41% 154K 11% intakes in 2023 • Driven by new enrollment Total Enrollment
Slide 15: Peru Segment Results
Peru Segment Results Q4 Results FY Results Notes ($ in millions) Organic/CC Organic/CC (Enrollments rounded to the nearest Q4 ’23 FY ’23 thousand) Vs. Q4 ’22 (1) Vs. FY ’22 (1) • Strong growth during primary intake cycle in Q1 New Enrollment 1K n.m. 87K 9% • Secondary intake in Q3 impacted by macroe
Slide 16: Outlook
OUTLOOK © 2024 Laureate Education, Inc. 16
Slide 17: 2024 Outlook – Executive Summary
2024 Outlook – Executive Summary Market dynamics remain favorable for the private sector in Mexico and Peru 2024 outlook reflects differing macroeconomic conditions by market – Mexico: Strong growth expectations; favorable macro backdrop including nearshoring tailwinds – Peru: Growth more muted
Slide 18: 2024 Outlook
2024 Outlook1 ($ in millions) Current (Enrollments rounded to the nearest thousand) FY 2024 Outlook (1) Total Enrollment 467K - 473K Revenue $1,553 - $1,568 Adjusted EBITDA $441 - $451 (1) Based on actual FX rates for January, and spot FX rates (local currency per US dollar) of MXN 17.05 & PEN 3.88
Slide 19: Q1 2024 Guidance Details
Q1 2024 Guidance Details ($ in millions) Q1 2024 Outlook (1) Revenue $266 - $271 Adjusted EBITDA $23 - $26 • Start of classes shifted in both Mexico and Peru for certain programs causing unfavorable timing impact of ($12M) in Revenue and ($10M) in Adjusted EBITDA for Q1. Offsetting favorable impact
Slide 20: Appendix
APPENDIX © 2024 Laureate Education, Inc. 20
Slide 21: 2023 Fourth Quarter – Net Income Reconciliation
2023 Fourth Quarter – Net Income Reconciliation Q4 ’23 B / (W) Notes ($ in millions) Reported Vs. Q4 ’22 Adjusted EBITDA 131 37 Depreciation & Amort. (18) (2) Interest Expense, net (2) 1 Impairments (1) (1) • Non-cash FX translation loss on Other (27) (11) intercompany loans Income Tax (36) (10) Inc
Slide 22: 2023 FY – Net Income Reconciliation
2023 FY – Net Income Reconciliation FY ’23 B / (W) Notes ($ in millions) Reported Vs. FY ’22 Adjusted EBITDA 419 80 Depreciation & Amort. (70) (11) Interest Expense, net (12) (3) Impairments (3) (3) • Non-cash FX translation loss on Other (79) (55) intercompany loans Income Tax (138) 48 • Prior year
Slide 23: Q4 2023 Capitalization and Return of Capital
Q4 2023 Capitalization and Return of Capital ($ in millions) Total Company as of 12/31/23 Gross Debt $167 Less: Cash & Cash Equivalents ($89) Net Debt $78 Total current shares outstanding of 158M shares as of December 31st Return of Capital Actions: • Q4 2023: $110M ($0.70 per share) special cash
Slide 24: 2024 Full Year Guidance Details
2024 Full Year Guidance Details ($ in millions) Total Revenues Adj. EBITDA (Enrollments rounded to the nearest thousand) Enrollment 2023 FY Results Adjusted 449K $1,484 $419 Organic Growth 18K - 24K $77 - $92 $27 - $37 Organic Growth % 4% - 5% 5% - 6% 6% - 9% 2024 FY Guidance (Constant Currency) 467
Slide 25: Q1 2024 Guidance Details
Q1 2024 Guidance Details 1Q Guidance ($ in millions) Revenues Adj. EBITDA 2023 Q1 Results As Reported $251 $33 Timing Impact Intra-Year (academic calendar) ($12) ($10) 2023 Q1 Results Adjusted $239 $23 Organic Growth $13 - $18 $3 - $6 Organic Growth % (excl. Mexico restructuring) 5% - 7% 13% - 26% O
Slide 26: Intra-Year Seasonality Trends
Intra-Year Seasonality Trends • Large intake cycles at end of Q1 (Peru) and end of Q3 (Mexico) drive seasonality of earnings • Q2 and Q4 are typically Laureate’s strongest earnings quarters Revenue Seasonality Adjusted EBITDA Seasonality 46% 44% 31% 31% 42% 43% 42% 30% 30% 28% 27% 28% 28% 30% 31% 24
Slide 27: Financial Results & Tables
Financial Results & Tables © 2024 Laureate Education, Inc. 27
Slide 28: Financial Tables: Consolidated Statements of Operations
Financial Tables Consolidated Statements of Operations For the three months ended December 31, For the year ended December 31, IN MILLIONS 2023 2022 Change 2023 2022 Change Revenues $ 409.4 $ 346.3 $ 63.1 $ 1,484.3 $ 1,242.3 $ 242.0 Costs and expenses: Direct costs 279.4 252.3 27.1 1,089.8 907.4 182
Slide 29: Financial Tables: Revenue and Adjusted EBITDA by Segment, Quarter
Financial Tables Revenue and Adjusted EBITDA by segment: Quarter IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant December 31, 2023 2022 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 223.1 $ 179.0 25% 11% $ 44.1 $ 20.4
Slide 30: Financial Tables: Revenue and Adjusted EBITDA by Segment, Year-to-Date
Financial Tables Revenue and Adjusted EBITDA by segment: Year-to-Date IN MILLIONS % Change $ Variance Components Organic Organic For the year ended Constant Constant December 31, 2023 2022 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Mexico $ 782.6 $ 613.9 27% 13% $ 168.7 $ 77.1 $
Slide 31: Financial Tables: Consolidated Balance Sheets
Financial Tables Consolidated Balance Sheets IN MILLIONS December 31, 2023 December 31, 2022 Change Assets Cash and cash equivalents $ 89.4 $ 85.2 $ 4.2 Receivables (current), net 92.1 80.7 11.4 Other current assets 42.0 60.3 (18.3) Property and equipment, net 562.2 523.4 38.8 Operating lease right-
Slide 32: Financial Tables: Consolidated Statements of Cash Flows
Financial Tables Consolidated Statements of Cash Flows For the year ended December 31, IN MILLIONS 2023 2022 Change Cash flows from operating activities Net income $ 107.3 $ 69.0 $ 38.3 Depreciation and amortization 69.6 59.1 10.5 Loss (gain) on sales and disposal of subsidiaries, property and equip
Slide 33: Non-GAAP Reconciliation (1 of 2)
Financial Tables Non-GAAP Reconciliation (1 of 2) The following table reconciles Net Income to Adjusted EBITDA and Adjusted EBITDA margin: For the three months ended December 31, For the year ended December 31, IN MILLIONS 2023 2022 Change 2023 2022 Change Net income $ 41.7 $ 39.1 $ 2.6 $ 107.3 $ 69
Slide 34: Non-GAAP Reconciliation (2 of 2)
Financial Tables Non-GAAP Reconciliation (2 of 2) The following table presents Free cash flow and reconciles Net cash flows from operating activities to Free cash flow: For the year ended December 31, IN MILLIONS 2023 2022 2021 Net cash provided by (used in) operating activities $ 250.8 $ 178.2 $ (1
Slide 35: © 2024 Laureate Education, Inc.
© 2024 Laureate Education, Inc. 35