Somos Educação — Abril Educação — Conference Presentation (November 2012)
40 slides from Somos Educação's conference presentation, November 2012
Slide 1: Abril Educação, November 2012
ft Abril EpucacAo November, 2012
Slide 2: Expanded Focus to Consolidate Leadership
Expanded Focus to Consolidate Leadership Long tradition in education Expanded focus “Spin-off” IPO Spin-off of Abril S.A. 100% owned by 2011 Civita Family (56.4%) Família Civita New management The controlling shareholder of the Abril Group, a large team media conglomerate, with net revenue of Abril
Slide 3: Overview of Abril Educação
Overview of Abril Educação 1st publicly-held company dedicated to primary and secondary education and preparatory courses for university Focus admission exams One of the largest primary and secondary education companies in Brazil in terms of number of students and schools served Leadership Around 76
Slide 4: Abril Educação Offers Diversified Educational Solutions
Abril Educação Offers Diversified Educational Solutions Portfolio offered to students and Public & Private K-12 Schools Schools & Technical New Textbooks Learning Systems Prep Courses Courses Businesses & Schools and Digital content and Learning systems Prep. Courses textbooks 1,786 27* 44.8 million
Slide 5: New Businesses
New Businesses • Educational content through mobile • Status: in 3Q12, it entered into an integration agreement with VIVO. • Commercialization of "The Leader in • Next Steps: ENEM courses to be launched in Dec/12 Me" (Franklin Covey) with five courses • Status: investment phase: minor • Distance lea
Slide 6: Milestones Abril Educação
Milestones Abril Educação “Spin-off” 2010 2011 ……. ……. jul aug ……. apr jul oct 2012 ……. feb apr jun jul oct 6
Slide 7: Corporate Governance: Transparency
Corporate Governance:Transparency Civita Family (56.4%) (18.5%) Free Float (25.1%) Controlling shareholder of Grupo Abril AE is the largest investment fund in Shares traded on the market with net revenue of R$4.0 billion in 2011 the sector Corporate Governance: Transparency Board members: Fiscal mem
Slide 8: Corporate Structure
Corporate Structure 100% 100% 100% 100% 100% 5.9% 100% 100% Sistema de Maxiprint Editora Sistema PH Editora Ensino Abril C.A.E.P. Curso PH Gráfica e Livemocha Scipione de Ensino Ática S.A. Educação Ltda. Ltda. Editora Inc. S.A Ltda. S.A. Ltda. 51.00% 54.69% 51.00% 51.00% Nice Jafar Sistema de Partic
Slide 9: Industry Turns Over R$36 bn per year and is Undergoing Constant Expansion
Industry IndustryTurns Turnsover overR$ 36 bn¹1 per R$38bn per year year and and is is Undergoing Undergoing Constant Constant Expansion Expansion Primary and Secondary Education Segments Number of Primary and Secondary Education Students per Level (mn students in 2009) 91% of the students in Brazil
Slide 10: Basic Education Market in Brazil
Basic Education Market in Brazil 2011 Revenues (in R$) Total: R$ 36 billion Sub Total: R$ 13 billion Technical schools 4 billion Languages Own schools 3.5 billion (elementary and high school) Prep. Courses 23 billion 2.3 billion Publishers 2 billion Abril Educação Abril Educação Learning Revenue Mar
Slide 11: Financial Information – 3Q12/9M12
Financial Information – 3Q12/9M12
Slide 12: 3Q12/9M12 Financial Results – Summary
3Q12/9M12 Financial Results – Summary QUARTER Changes (%) YTD Changes (%) (R$ mm) 3Q12 3Q11 3Q12/3Q11 9M12 9M11 9M12/9M11 Net Revenue 137,9 124,1 11% 489,3 407,9 20% (-) Cost of goods sold (COGS) (44,7) (50,7) -12% (169,3) (146,1) 16% (=) Gross Profit 93,2 73,5 27% 320,0 261,9 22% Gross margin (%) 6
Slide 13: Net Revenue – R$ mm
Net Revenue – R$ mm Net Revenue Evolution - 3Q12 Net Revenue Evolution - 9M12 "As Is" (R$ mm) "As Is" (R$ mm) +20% + 11% 43,9 2,0 2,9 489.3 3,9 (0.1) 1,7 137.9 0,2 0,1 3,3 6,5 3,3 (0.3) 17,9 124,1 0.1 3,4 (2.7) 407,9 (8.9) 23,2 3Q11 Publishers Anglo SER MAXI GEO Anglo Grupo pH ETB Escola 3Q12 9M11 P
Slide 14: Net Revenue per Business Line (“As is”)
Net Revenue per Business Line (“As is”) 3Q11 3Q12 R$ 124.1 million R$ 137.9 million Schools and Schools and Prep. Escola Prep. Courses Satélite Courses Publishers 44,1 1,7 40,2 39,8 31% 1% 32% 32% Learning Publishers Learning Systems 39,9 Systems 54,7 29% 44,2 39% 36% 9M11 9M12 R$ 407.9 million R$ 4
Slide 15: Cost of Goods Sold (COGS) – 9M12
Cost of Goods Sold (COGS) – 9M12 Abril Educação - "As Is" (R$ mm) Abril Educação - Comparable Basis (R$ mm) 9M11 9M12 9M11 9M12 +20% +20% +22% +30% 489,3 489,3 407,9 407,9 +16% +2% 320,0 340,3 261,9 261,9 146,1 169,3 146,1 149,0 Net Revenue COGS Gross Profit Net Revenue COGS Gross Profit Exclusion o
Slide 16: Margins
Margins 3Q12 vs. 3Q11 9M12 vs. 9M11 Gross Margin - Comparable Basis Gross Margin - Comparable Basis 3Q11 3Q12 9M11 9M12 85%87% 84%85% 78% 79% 70% 72% 75% 67% 68% 73% 67% 64% 63% 64% 65% 59% 57% 55% 54% 61% 54% 51% 50% 51% 50% 40% 38% 35% 38% 38% AE Publishers Anglo SER Maxi GEO Anglo pH Group ETB AE
Slide 17: 3Q12 - Expenses Evolution
3Q12 - Expenses Evolution Corporate Management 3.1 Organic 1.8 3,0 (0.2) 84,0 2,2 0,3 2,4 0,0 0,1 (0.4) 0,4 4,7 (0.6) 72,6 (0.7) 0,2 3Q11 Stock Goodwill Pro-Forma Publishers Anglo SER Anglo PH ETB New Allocated Allocated AE and 3Q12 Option Efect (Learning (Prep. Business in Anglo in CAEP Systems) Co
Slide 18: 9M12 - Expenses Evolution
9M12 - Expenses Evolution Corporate Management 9.5 Organic 15.9 1,6 7,4 0,5 256,1 0,3 0,8 3,2 5,5 5,6 0,9 2,8 22,8 207,9 (5.3) 1,9 9M11 Stock Goodwill Pro-Forma Publishers Anglo SER Anglo PH ETB New Allocated Allocated AE and 9M12 Option Efect (Learning (Prep. Business in Anglo in CAEP Systems) Cour
Slide 19: 3Q12/9M12 - Non-cash impact over results
3Q12/9M12 - Non-cash impact over results 3Q12 9M12 57,3 EBIT (R$ mm) 9,0 EBIT (R$ mm) 37,9 6,2 19,4 2,8 9M12 EBIT Amortization of surplus 9M12 EBIT excluding 3Q12 EBIT Amortization of surplus 3Q12 EBIT excluding surplus value of intangible assets surplus value amortization value of intangible assets
Slide 20: Consolidated Capital Structure
Consolidated Capital Structure Consolidated Debt Position (Sep 2012)- R$ mm Capital Structure - R$ mm Shareholders Equity Net Debt 277,8 219,7 228,9 269,5 245,4 18% 19% 21% 22% 251,8 280,8 21% 1.015,7 996,9 996,8 959,0 912,9 550.3 298.5 269.5 78% 82% 81% 79% 79% - Banking Debt Sellers Debt Total Cas
Slide 21: Publishers
Publishers Publishers - Net Revenue Evolution (R$ mm) 2010 2011 2012 -4.5% 298,0 307.2 199,1 190,2 143,7 143,6 +0.2% 128,1 98,6 39,8 39,9 13,0 15,5 6,8 16,5 1Q 2Q 3Q 4Q 9M Publishers’ revenue is seasonally weak in the third quarter and, therefore, is not an indication of annual performance. 21
Slide 22: Learning Systems
Learning Systems 3Q12 vs. 3Q11 9M12 vs. 9M11 Learning Systems Net Revenue Growth Learning Systems Net Revenue Growth Comparable Basis (R$ mm) Comparable Basis (R$ mm) +43% +44% 188.1 3,3 62.0 17,9 3,3 6,5 131.5 33,4 +34% 43.1 +28% 8,6 25,0 6,7 43,7 133,6 36,4 +20% 106,5 +25% 3Q11 3Q12 9M11 9M12 Angl
Slide 23: Schools and Prep. Courses
Schools and Prep. Courses 3Q12 vs. 3Q11 9M12 vs. 9M11 Schools and Preparatory Courses Schools and Preparatory Courses Net Revenue Growth Comparable Basis (R$ mm) Net Revenue Growth Comparable Basis (R$ mm) +60% +10% 122.3 44.1 4,4 40.2 1,4 1,5 +16% 76.3 +114% 2,4 82,3 23,7 27,6 38,4 +0.5% -1% 15,0 1
Slide 24: Financial Information – 1H12
Financial Information – 1H12
Slide 25: Non-recurring Events
Non-recurring Events (+) R$ 18.6 million • Correction of Inventory Positive Cash Effect Costing of Previous Years (R$ 20.3 million) (-) R$ 1.7 million Reduction of Net Income • Destruction of Obsolete (R$ 34.4 million) (-) R$ 20.3 million Negative Impact in EBIDTA Period: 2Q12 3Q12 4Q12 2012 Correct
Slide 26: 2Q12/1H12 Financial Results – Summary
2Q12/1H12 Financial Results – Summary 2Q12 Changes % 2Q12 Changes % "As Is" 2Q12 / 2Q11 (R$ mm) (Before Non-Recurring (After Non- 2Q11 (Before Non- 2Q12 / 2Q11 Events) "As Is" Recurring Events Recurring Events) Net Revenue 102.5 102.5 80.0 28% 28% (-) Cost of goods sold (COGS) (39.9) (60.2) (35.4) 1
Slide 27: Net Revenue Evolution – R$ mm
Net Revenue Evolution – R$ mm Net Revenue Evolution - 1H12 "As Is" (R$ mm) +24% 39.9 2.1 351.3* 11.4 0.1 19.8 2.4 283.8 (9.0) 1H11 Publishers Anglo SER MAXI Anglo Grupo pH ETB 1H12 (Systems) (Courses) Publishers Learning Systems Schools and Courses Growth by business compared to the first half of 20
Slide 28: Net Revenue per Business Line (“As is”)
Net Revenue per Business Line (“As is”) 1H11 1H12 R$ 283.8 million R$ 351.3 million Schools and Prep. Schools and Courses Prep. 36.2 Courses 13% 78.2 22% Publishers 150.3 Publishers 43% Learning 159.3 Systems 56% 88.4 31% Learning Systems 122.0 35% 28 Note: Chart do not include revenue from the CAEP
Slide 29: Gross Margins
Gross Margins Gross Margins - Comparable Basis 1H11 1H12 84% 85% 79% 70% 70% 70% 70% 66% 63% 67% 51% 47% 48% 46% 27% AE Publishers Anglo SER Maxi Anglo pH Group ETB (Systems) (Courses) Publishers Learning Systems Schools and Prep. Courses 29
Slide 30: 1H12 - Expenses Breakdown
1H12 - Expenses Breakdown Corporate Management 6.2 Organic 13.4 4.2 0.7 172.2 2.9 1.3 5.3 0.6 3.5 0.8 17.0 3.2 135.3 (4.6) 1.8 1H11 Stock Goodwill Pro-Forma Publishers Anglo SER Anglo (Prep. PH New Fronts Allocated in Allocated in AE and 1H12 Option Efect (Learning Courses) Business Anglo Publishers
Slide 31: 1H12 - Non-cash impact over results
1H12 - Non-cash impact over results 48.2 35.1 EBIT (R$ mm) 13.1 1H12 EBIT Amortization of surplus value of intangible 1H12 EBIT excluding surplus value assets amortization 18.8 16.0 IT/SC (R$ mm) (2.8) 1H12 Income Tax and Social Contribution Anglo and pH Deferred Income IT/SC excluding Anglo and pH
Slide 32: Financial Information – 4Q11/FY11
Financial Information – 4Q11/FY11
Slide 33: 4Q11 and 2011 Financial Results
4Q11 and 2011 Financial Results Quarter Year Change (%) (R$ mm) 4Q11 4Q10 2011 2010 4Q11/4Q10 2011/2010 Net Revenue 364.2 323.3 772.1 512.2 13% 51% Gross Profit 212.2 183.9 474.1 280.6 15% 69% Gross Margin (%) 58% 57% 61% 55% 1 p.p. 6 p.p. Operating income (loss) 96.9 89.8 150.8 62.0 8% 143% Operati
Slide 34: Net Revenue Evolution – R$ mm
Net Revenue Evolution – R$ mm Consolidated Net Revenues Growth per Business R$ mm Lines over 2010 - R$ mm 2010 2011 +51% +51% 772.1 0.9 772.1 19.1 3.6 +13% 60.1 96.2 512.2 80.2 364.2 323.3 512.2 203.6 105.4 124.1 80.3 16.8 66.6 1Q 2Q 3Q 4Q Year 2010 Editoras Anglo Publishers pH SER ETB MAXI 2011 Not
Slide 35: Net Revenue per Business Line (“As is”)
Net Revenue per Business Line (“As is”) Net Revenues – 4Q11 (R$mm) Net Revenues – 4Q10 (R$mm) pH SER SER Anglo Anglo 3.3 ETB 21.7 12.5 22.1 Publishers 20.8 1% 1.2 6% 3% Publishers 7% 298.0 6% 0% 307.2 92% MAXI 85% 0.9 0% Net Revenues - 2011 (R$mm) Net Revenues - 2010 (R$mm) SER SER pH 37.5 18,4 Angl
Slide 36: Gross and Operational Margins
Gross and Operational Margins Businesses Gross Margins - 2010 vs. 2011 Businesses Operational Margins - 2010 vs. 2011 47% 73% 29% 24% 66% 20% 18% 22% 61% 62% 12% 10% 55% 56%58% 55% AE EDITORAS PUBLISHERS SER ANGLO pH 4% AE EDITORAS PUBLISHERS SER ANGLO pH -86% 2010 2011 2010 2011 36
Slide 37: FY11 Non-cash impacts over results
FY11 Non-cash impacts over results 113.0 89.4 EBIT (R$ mm) 23.7 2011 EBIT Amortization of surplus value of intangible assets 2011 EBIT excluding surplus value amortization 14.2 IT/SC (R$ mm) (27.5) (41.7) 2011 Income Tax and Social Contribution Anglo Deferred Income Tax and Social Income Tax and Soc
Slide 38: Stock Performance: +90% appreciation since IPO
Stock Performance: +90% appreciation since IPO ABRE11 Price (R$) Since the IPO until 11/12/2012 40,00 38.00 35,00 30,00 25,00 20,00 20.00* Market Cap: R$ 2.9 bi 15,00 10,00 26-Jul 20-Aug 14-Sep 9-Oct 3-Nov 28-Nov 23-Dec 17-Jan 11-Feb 7-Mar 1-Apr 26-Apr 21-May 15-Jun 10-Jul 4-Aug 29-Aug 23-Sep 18-Oct
Slide 39: Abril Educação – A unique investment opportunity!
Why Abril Educação? • We are the leaders in the primary, secondary and pre-university education segment in Brazil, the largest and with the fastest growth rate in the country • Our strategy is focused on providing support to the associated schools to promote student’s employability skills, thus bein
Slide 40: Investor Relations
Investor Relations ri@abrileducacao.com.br www.abrileducacao.com.br/investors Legal Disclaimer This document must not be considered a recommendation for investment in the Units. Before investing in the Units, the investors should conduct their own analysis and valuation of the Company, its business
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