Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q2 2020 Earnings Presentation
32 slides from Laureate Education's earnings presentation, Aug 6, 2020
Slide 1: Second Quarter 2020 Earnings Presentation
Second Quarter 2020 Earnings Presentation August 6, 2020 © 2020 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, Adjusted EBITDA margin and Free Cash Flow. We have included the
Slide 4: Summary Overview
SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding Amounts presented for enrollments, Revenue and Adjusted EBITDA are for continuing operations only © 2020 Laureate Education, Inc. 4
Slide 5: Executive Summary
Executive Summary Total enrollment base remains relatively stable, despite the COVID-19 pandemic Q2 Adjusted EBITDA ~$40M above guidance driven by favorable mix & productivity Q2 Net Loss of ($312M) driven by $418M non-cash impairment charge related to Chile Collections are still in line wit
Slide 6: Q2 2020 Performance Results
Q2 2020 PERFORMANCE RESULTS © 2020 Laureate Education, Inc. 6
Slide 7: Academic Calendar Timing Impacting Year-Over-Year Comparability
Academic Calendar Timing Impacting Year-Over-Year Comparability Week Of Q1 Q2 Q3 Q4 Brazil Mexico Peru Chile ROW Walden 2019 semester end date 2020 semester end date 2019 semester start date 2020 semester start date ~$40M of Q2 Revenue Pushed to Q3 © 2020 Laureate Education, Inc. 7
Slide 8: 2020 Second Quarter – Financial Summary
2020 Second Quarter – Financial Summary Q2 ’20 Variance Notes ($ in millions) (Enrollments in thousands) Results Vs. Q2 ‘20 New Enrollment 70K 20% • Adj. for timing of Peru enrollment: (15%) New Enrollment – Organic(1) (14%) • Impacted by COVID-19 (timing adjusted)* Total Enrollment 835K (8%) • Impa
Slide 9: 2020 H1 – Financial Summary
2020 H1– Financial Summary H1 ’20 Variance Notes ($ in millions) (Enrollments in thousands) Results Vs. H1 ‘19 New Enrollment 263K (11%) New Enrollment – Organic(1) (8%) • Impacted by COVID-19 Total Enrollment 835K (8%) • Impacted by lower NE and increased attrition Total Enrollment – Organic(1) (5%
Slide 10: 2020 H1 – Enrollment Dynamics by Segment
2020 H1 – Enrollment Dynamics by Segment New Enrollment Total Enrollment (NE) (TE) Notes Organic Organic H1 ’20 H1 ’20 Vs. H1 ’19 Vs. H1 ’19 (Enrollments in thousands) • NE Growth DL: (26%), F2F: (7%) Brazil 100 (13%) 267 (5%) • TE Growth DL: 12%, F2F: (9%) • Large intake cycle occurs in second half
Slide 11: Y-o-Y Revenue Trends Impacted by Timing of Academic Calendar
2020 Second Quarter – Revenue, EBITDA Dynamics by Segment Revenue Adj. EBITDA Notes Organic/CC Organic/CC Q2 ‘20 Q2 ‘20 ($ millions) Vs. Q2 ’19 (1) Vs. Q2 ’19 (1) Brazil 119 (13%) 42 3% Mexico 115 (13%) 20 (23%) Y-o-Y Revenue Trends Andean 346 (9%) 161 (5%) Impacted by Timing of Academic Calendar Re
Slide 12: Y-o-Y Revenue Trends Impacted by Timing of Academic Calendar
2020 H1 – Revenue, EBITDA Dynamics by Segment Revenue Adj. EBITDA Notes Organic/CC Organic/CC H1 ‘20 H1 ‘20 ($ millions) Vs. H1 ’19 (1) Vs. H1 ’19 (1) Brazil 202 (8%) 22 39% Mexico 269 (6%) 43 (8%) Y-o-Y Revenue Trends Andean 435 (13%) 99 (29%) Impacted by Timing of Academic Calendar Rest of World 1
Slide 13: Liquidity Update
Liquidity Update Cash & Equivalents Snapshot Liquidity Preservation Actions ($ millions) $630 • Aggressive Cash preservations actions in place $547 $100M+ operating cost reduction Capital Expenditure deferrals ($40M+) Extension of ~$100M of debt & WC lines $340 • $750M+ of gross proceeds expected
Slide 14: 2020 Outlook
2020 OUTLOOK © 2020 Laureate Education, Inc. 14
Slide 15: 2020 Full Year Guidance - Update
2020 Full Year Guidance - Update Total Free Cash ($USD millions, except enrollment) Revenues Adj. EBITDA Comments Enrollment Flow (2) Scenarios #1 & #2 Previous Guidance 780K - 830K $2,575 - $2,775 $485 - $575 $100 - $180 Combined Revised Guidance (1)(2) 805K $2,720 - $2,820 $555 - $585 $150 - $180
Slide 16: Q3 2020 Guidance - Details
Q3 2020 Guidance - Details (USD millions) Revenues Adjusted EBITDA Q3 2019 Results $774 $134 Excluding UniNorte (sold in 2019) ($7) - Q3 2019 Results Excluding UniNorte $767 $134 Organic Growth $0 - $20 $11 - $21 Growth % 0% - 3% 8% - 16% Q3 2020 FXN Guidance $767 - $787 $145 - $155 FX Impact (spot
Slide 17: Appendix
APPENDIX © 2020 Laureate Education, Inc. 17
Slide 18: 2020 Second Quarter – Enrollment Dynamics by Segment
2020 Second Quarter – Enrollment Dynamics by Segment Total Enrollment New Enrollment (NE) (TE) Notes Organic Timing Adj.* Organic Q2 ’20 Vs. Q2 Organic Vs. Q2 ’20 Vs. Q2 ’19 Q2 ‘19 ’19 (Enrollments in thousands) • NE Growth DL: (25%), F2F: (30%) Brazil 20 (26%) (26%) 267 (5%) • TE Growth DL: 12%, F2
Slide 19: 2020 Second Quarter – Net Income Reconciliation
2020 Second Quarter – Net Income Reconciliation Q2 ’20 B / (W) Vs. Q2 ’19 Notes ($ in millions) Reported $ % Adjusted EBITDA 259 (40) (13%) • Flat y-o-y excluding FX; impacted by timing Depreciation & Amort. (40) 9 19% Interest Expense, net (33) 6 15% • Lower debt balances Impairments (445) (445) n.
Slide 20: 2020 H1 – Net Income Reconciliation
2020 H1 – Net Income Reconciliation H1 ’20 B / (W) Vs. H1 ’19 Notes ($ in millions) Reported $ % Adjusted EBITDA 222 (47) (17%) • ($39M) impact from FX Depreciation & Amort. (84) 12 13% Interest Expense, net (66) 24 26% • Lower debt balances Impairments (449) (448) n.m. • Primarily related to Chilea
Slide 21: Seasonality: Main Enrollment Intakes
Seasonality: Main Enrollment Intakes • Q1 and Q3 are peak intake quarters, but seasonally weak earnings quarters as institutions are largely out of session during the summer season – Q1 represents the large intake for our Southern Hemisphere institutions (Brazil, Andean & Rest of World) – Q3 represe
Slide 22: Intra-Year Seasonality Trends
Intra-Year Seasonality Trends • Large intake cycles at end of Q1 (Southern Hemisphere) and end of Q3 (Northern Hemisphere) drive seasonality of earnings (Q2 and Q4 are our strongest earnings quarters) Revenue Seasonality Adj. EBITDA Seasonality 31% 31% 52% 29% 30% 28% 28% 27% 27% 46% 25% 24% 24% 24%
Slide 23: Financial Results & Tables
Financial Results & Tables © 2020 Laureate Education, Inc. 23
Slide 24: Financial Tables
Financial Tables Consolidated Statements of Operations For the three months ended June 30, For the six months ended June 30, IN MILLIONS 2020 2019 Change 2020 2019 Change Revenues $ 791.7 $ 992.4 $ (200.7) $ 1,320.2 $ 1,593.5 $ (273.3) Costs and expenses: Direct costs 554.1 707.4 (153.3) 1,146.9 1,3
Slide 25: Financial Tables
Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant June 30, 2020 2019 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Brazil $ 118.5 $ 197.1 (40)% (13)% $ (78.6) $ (23.3) $ — $
Slide 26: Financial Tables
Financial Tables Revenue and Adjusted EBITDA by segment IN MILLIONS % Change $ Variance Components Organic Organic For the six months ended Constant Constant June 30, 2020 2019 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Brazil $ 202.2 $ 307.1 (34)% (8)% $ (104.9) $ (24.3) $ — $ (
Slide 27: Financial Tables
Financial Tables Consolidated Balance Sheets IN MILLIONS June 30, 2020 December 31, 2019 Change Assets Cash and cash equivalents $ 629.6 $ 339.6 $ 290.0 Receivables (current), net 311.5 260.5 51.0 Other current assets 266.9 259.0 7.9 Current assets held for sale 62.3 83.8 (21.5) Property and equipme
Slide 28: Financial Tables
Financial Tables Consolidated Statements of Cash Flows For the six months ended June 30, IN MILLIONS 2020 2019 Change Cash flows from operating activities Net (loss) income $ (213.3) $ 973.9 $ (1,187.2) Depreciation and amortization 84.3 97.4 (13.1) Loss on impairment of assets 458.8 0.5 458.3 Loss
Slide 29: Financial Tables
Financial Tables Non-GAAP Reconciliation (1 of 3) The following table reconciles income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the three months ended June 30, For the six months ended June 30, IN MILLIONS 2020 2019 Change 2020 2019 Change (Loss) income f
Slide 30: Financial Tables
Financial Tables Non-GAAP Reconciliation (2 of 3) The following table reconciles income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the years ended December 31, IN MILLIONS 2019 2018 2017 Income (loss) from continuing operations $ 13.7 $ (10.5) $ 16.4 Plus: E
Slide 31: Financial Tables
Financial Tables Non-GAAP Reconciliation (3 of 3) The following table reconciles operating cash flow to Free Cash Flow for the six months ended June 30, 2020 and 2019: IN MILLIONS 2020 2019 Change Net cash provided by operating activities $ 61.4 $ 32.5 $ 28.9 Capital expenditures: Purchase of proper
Slide 32: © 2020 Laureate Education, Inc.
© 2020 Laureate Education, Inc. 32