Nexted Group Limited · ASX:NXD
Nexted — H1 FY2023 Earnings Presentation
32 slides from Nexted's earnings presentation, Feb 27, 2023
Slide 1: 1H23 Results Presentation
1H23 Results Presentation 27 February 2023
Slide 2: Contents
Contents 1. 1H23 results 3 2. Outlook 12 3. Appendix 23 2
Slide 3: 1H23 results
1H23 results An exceptional 1H23 performance Revenue & EBITDA Operating segments Exceptional operating cash flows Solid balance sheet positioned for growth 1 3
Slide 4: An exceptional 1H23 performance
An exceptional 1H23 performance 1H23 financial results Lead indicators of future performance Revenue International ▪ Record revenues and English language $43.6m $25.3m vs 1H22 Vocational actively studying students material profit growth new confirmed enrolments EBITDA1 $6.6m $5.0m vs 1H22 ▪ Revenue
Slide 5: Revenue & EBITDA
Revenue & EBITDA Revenue by operating segment EBITDA – excluding M&A costs* Increase Decrease Total ▪ Outstanding growth driven by continued ▪ Increased operational costs to support revenue growth outperformance in English language student numbers ▪ Operating leverage resulted in EBITDA increasing t
Slide 6: Go Study Australia – increasing demand
Segment Results Go Study Australia – increasing demand Pro-forma* revenue Pro-forma* EBITDA ▪ 1H23 EBITDA impacted by investment in re-opening 250 overseas offices and increasing employee numbers 3,000 200 to service growing demand from prospective 2,500 150 international students – investing in fut
Slide 7: International Vocational – rapid growth
Segment Results International Vocational – rapid growth ▪ Exceptional growth in English Pro-forma* revenue Pro-forma* EBITDA Pro-forma* revenue mix language revenue 30,000 7,000 ▪ Rapid growth in EBITDA driven by 25,000 6,000 15% 5,000 revenue growth and operating 20,000 26% $000's $000's 4,000 leve
Slide 8: Technology & Design – new courses launched
Segment Results Technology & Design – new courses launched Pro-forma* revenue Pro-forma* EBITDA ▪ International student revenue growth 10,000 3,000 resulting from borders re-opening and 8,000 students commencing or resuming their 2,000 $000’s $000’s 6,000 studies $3,591 $2,872 $9,060 $621 4,000 1,00
Slide 9: Domestic Vocational – positioning for growth
Segment Results Domestic Vocational – positioning for growth Revenue EBITDA ▪ Revenue declined due to ceasing delivery of unprofitable courses and programs 7,000 1,600 6,000 1,400 ▪ EBITDA improved from increased focus on 5,000 1,200 cost management and ceasing delivery of 1,000 $000's $000’s 4,000
Slide 10: Exceptional operating cash flows
Exceptional operating cash flows Operating cash flows Total cash flows 16,000 14,000 12,000 10,000 $000’s 8,000 $14,478 6,000 4,000 $1,652 2,000 0 1H22 (1) 1H23 ▪ Continued rapid recovery of international student ▪ Strong positive operating cashflows are expected numbers driving strong increases in
Slide 11: Solid balance sheet positioned for growth
Solid balance sheet positioned for growth Contract liabilities Balance sheet summary Cash balance (Deferred revenues) $000’s Jun 2022 Dec 2022 40,000 Cash 27,161 35,511 45,000 35,000 Other assets 107,529 115,229 40,000 30,000 35,000 Total assets 134,690 150,740 25,000 30,000 $000's $000's 20,000 25,
Slide 12: Outlook
Outlook Go Study Australia pipeline fueling future growth Rapidly growing international student numbers Exceptional English language student numbers Expanding pipeline to progress from English language Secured future revenues – underpinning growth Higher campus utilisation improving earnings Acceler
Slide 13: Go Study Australia pipeline fueling future growth
Go Study Australia pipeline fueling future growth Significant increase in student inquiries and new course sales from Go Study Australia offices in Europe and South America New student leads per quarter New student sales per quarter 8,000 600 7,000 500 Student Numbers Student Numbers 6,000 400 5,000
Slide 14: Rapidly growing international student numbers
Rapidly growing international student numbers New international student offers of New international student confirmed enrolments enrolment in each quarter in each quarter 7,000 5,000 4,500 6,000 4,000 Student Numbers Student Numbers 5,000 3,500 3,000 4,000 7% 2,500 3,000 2,000 2,000 1,500 1,000 1,00
Slide 15: Exceptional English language student numbers
Exceptional English language student numbers Active English language students at the end of each quarter ▪ NextEd's high quality brand reputation driving strong support from international 6,000 recruitments agents across all key markets ▪ English language student numbers 5,000 expected to increase f
Slide 16: Expanding pipeline to progress from English language
Expanding pipeline to progress from English language ▪ The number of international students Pipeline of future growth in undertaking vocational courses was student numbers 1 relatively flat in 1H23, but strong growth is Studying vocational students Historically 30% of expected in 2H23 and FY24 as mo
Slide 17: Secured future revenues – underpinning growth
Secured future revenues – underpinning growth Revenues are recognised evenly over the period that courses are delivered, and most of the deferred revenues balance at the end of December 2022 is expected to be recognised ▪ Deferred revenue 'paid and within the next 4 to 6 months, and no longer than w
Slide 18: Higher campus utilisation improving earnings
Higher campus utilisation improving earnings Number of classrooms by Campus daytime utilisation at NextEd campus locations state at end of December 2022 end of December 2022 and announced expansion 100 22 NSW 90 airns 8 VIC 80 16 59 8 70 18 7 Brisbane QLD 60 2 23 old oast SA 50 40 erth WA Adelaide S
Slide 19: Accelerating investments to support growth
Accelerating investments to support growth Expanding campus capacity and investing in course Investments to support expected increase in development and equipment to support future growth student numbers and to expand the course range 1H23 actual capex - $1.4m 2H23 projected capex – circa $7.9m 900
Slide 20: Management strengthened with M&A resource
Management strengthened with M&A resource ▪ Morgan Sloper appointed as Head of Strategy on 20 February 2023, bringing additional M&A experience to the Appealing acquisition targets are likely to feature: executive team ▪ A substantial curriculum area not being taught by NextEd where there is strong
Slide 21: NextEd is unleashing potential
NextEd is unleashing potential ▪ Rapid growth in international student numbers ▪ Dominant market position in delivering English language courses ▪ Funneling English language students into other NextEd vocational and higher education courses to maximise student lifetime value ▪ Strong balance sheet a
Slide 22: Thank You
Thank Glenn Elith Michael Fahey You Level 2, 7 Kelly Street Chief Executive Officer Chief Financial Officer Ultimo NSW 2007 glenn.elith@nexted.com.au michael.fahey@nexted.com.au nexted.com.au 22
Slide 23: Appendix
Appendix 3 23
Slide 24: Differentiated market position
Differentiated market position NextEd campus locations Diversified earnings base 10 NextEd campuses ▪ Diverse course offerings in English language, vocational and higher education segments ▪ International student recruitment agency ▪ Broad domestic and international student mix airns National campus
Slide 25: Financial highlights
Financial highlights Revenue EBITDA* Operating cash flows** 1H23 up 50,000 1H23 up 1H23 up 7,000 16,000 139% vs PCP 305% vs PCP 776% vs PCP 6,000 14,000 Growth driven by 40,000 Strong revenue Exceptional exceptional contribution and operating cash 12,000 5,000 performance in operating flow growth fr
Slide 26: Reported profit & loss
Reported profit & loss Half year actuals ($000’s) Change 1H23 1H22 $000’s % Revenue 43,574 18,237 25,337 139 Cost of sales (18,069) (7,523) (10,546) (140) Gross profit 25,505 10,714 14,791 138 Gross profit % to revenue 59% 59% Other income 37 1,475 (1,438) (97) Employee costs (11,628) (6,144) (5,484
Slide 27: Cash flow statement
Cash flow statement 1H23 1H22 $000’s $000’s Operating activities (excl. M&A costs) 14,478 1,652 M&A costs - (4,393) Investing activities 1 (1,436) 20,426 Financing activities (4,692) (2,819) Net increase in cash and cash equivalents 8,350 14,866 Cash and cash equivalents at the beginning of the year
Slide 28: Non-IFRS information
Non-IFRS information 1H23 1H22 $000’s $000’s The Company reports EBITDA in addition to the Profit after Tax. EBITDA is a Net profit / (loss) after tax 466 (4,299) financial measure which is not prescribed Less income tax benefit (364) (92) by Australian Accounting Standards Net profit / loss before
Slide 29: Segment restatement – 1H22
Segment restatement – 1H22 Half year actuals ($000’s) Variance ▪ Operating segments for domestic 1H22 1H22 $000’s and international vocational Previous structure Revised structure students were restructured at the Revenue Revenue beginning of FY23 to better service student markets and Greenwich 5,04
Slide 30: Segment Revenue & EBITDA
Segment Revenue & EBITDA Half year actuals ($000’s) Variance 1H23 1H22 $000’s % Revenue International Vocational 27,890 7,842 20,048 256% Technology & Design 9,060 3,706 5,354 144% Go Study 2,462 947 1,515 160% Domestic Vocational 4,731 5,809 (1,078) (19%) Eliminations / Other (569) (67) (502) 749%
Slide 31: Average student numbers by segment
Average student numbers by segment International Vocational Technology & Design Domestic Vocational 7000 900 600 800 78 6000 491 500 700 141 5000 202 600 400 4000 574 2,958 500 203 300 3000 400 522 3,464 300 200 2000 557 388 2,722 200 422 1000 100 100 430 0 1H22 1H23 0 0 1H22 1H23 1H22 1H23 English
Slide 32: Important notice & disclaimer
Important notice & disclaimer Summary Information Past Performance This Presentation contains summary information about NextEd Group Limited and its activities which is current only as at the date of this Presentation (unless specified otherwise). The material in this Presentation is general backgr