Slide 1: H1 FY24 Results Presentation
H1 FY24 Results Presentation 26 February 2024
Slide 2: Contents
Contents 1. Differentiated market position 3 2. Performance highlights 5 3. Financial results 9 4. Future focus 16 5. Appendix 26 2
Slide 3: Differentiated market position
1 Differentiated market position 3
Slide 4: NextEd is well positioned to navigate a challenging immigration environment
NextEd is well positioned to navigate a challenging immigration environment Diversified revenue base: Strong compliance record reduces risk and enables ▪ Broad course range in English language, vocational and new course accreditations: higher education segments ▪ Swift regulatory approvals for new c
Slide 5: Performance highlights
2 Performance highlights 5
Slide 6: Significant revenue growth and EBITDA expansion
Significant revenue growth and EBITDA expansion H1 FY24 financial results Revenue EBITDA1 ▪ Despite negative impacts of the government extension of the 408 visa, impressive H1 revenue and EBITDA growth driven by increase $59.2m $8.3m in English language student numbers $15.6m $1.6m ▪ Operating cashf
Slide 7: Operational improvements will underpin performance during challenging regulatory environment
Operational improvements will underpin performance during challenging regulatory environment ▪ 115% growth in average English language International Vocational average student numbers in H1 FY24 against pcp student numbers in period Ave campus utilisation1 ▪ 29% decrease in average vocational 9000 m
Slide 8: Investments for future growth
Investments for future growth Multiple strategic investments in H1 FY24 to deliver results in FY25 and FY26, including: ▪ Melbourne campus expansion completed in August 2023 (12 additional classrooms and a commercial teaching kitchen) ▪ Brisbane campus expansion completed in December 2023 (13 additi
Slide 9: Financial results
3 Financial results 9
Slide 10: Income statement – record revenue & EBITDA
Income statement – record revenue & EBITDA Half year actuals Change ($000’s) H1 FY24 H1 FY23 $ % Revenue 59,201 43,574 15,627 36 Agent commissions (11,262) (7,451) (3,811) (51) ▪ Strong revenue and EBITDA growth driven by growth Education expenses (17,570) (10,618) (6,952) (65) in English language s
Slide 11: Segment results – international student strength
Segment results – international student strength ($000’s) International Technology Go Study Domestic Elimination Total ▪ International Vocational 65% revenue growth and Vocational & Design Vocational / Corporate 70% EBITDA growth driven by impressive English Revenue language performance in highly co
Slide 12: Operating leverage being delivered – ongoing focus
Operating leverage being delivered – ongoing focus Opex* as % of revenue 70,000 80% ▪ Operating leverage has been achieved since the acquisition of RedHill Education in H1 FY22 69% 70% 60,000 61% ▪ Small increase in H1 FY24 opex costs as a percentage 60% of revenue a result of strategic footprint ex
Slide 13: Effective capacity management improving utilisation
Effective capacity management improving utilisation NextEd campus locations at Number of classrooms by Average weekday classroom utilisation December 2023 state in December 2023 in H1 FY24 was 92% 100 92% 92% 8 12 90 8 11 NSW 7 80 VIC 70 Brisbane 34 92 QLD 60 94% old oast 50 SA 84 19 40 80 erth WA 3
Slide 14: Cash flows – strategic expansion investments
Cash flows – strategic expansion investments ▪ Flattening of operating cashflows after extraordinary post-pandemic growth in tuition deposits – assuming no further government shocks, don’t expect this magnitude of negative operating cashflows in H2 FY24 and expect positive cashflows in FY25 ▪ H2 FY2
Slide 15: Balance sheet – strong position
Balance sheet – strong position ($000’s) Jun-23 Dec-23 C urre nt a s s e t s Contract liabilities (deferred revenue) Cash and cash equivalent 30,264 16,834 Trade receivables 7,563 8,309 80,000 Invento ries 341 238 70,000 P repayments and o ther assets 12,280 8,585 T o tal 50,448 33,966 60,000 $28,77
Slide 16: Future focus
4 Future focus 16
Slide 17: Adapting to evolving and challenging market conditions
Adapting to evolving and challenging market conditions • While we welcome changes detailed in the December 2023 Migration Strategy, we are seeking greater transparency from government Total international student enrolments • Recent government policy has indicated a desire to reduce the number of int
Slide 18: NextEd visa data outperforms the market
NextEd visa data outperforms the market NextEd’s English language and Vocational student • NextEd achieved consistent average student visa approval rates in visa approval rates – CY2023 against total market* CY2023 of approximately 90% - outperforming total market • In December 2023 – when the Migra
Slide 19: Drivers of growth in FY25 and FY26
Drivers of growth in FY25 and FY26 Footprint and course expansion initiatives being implemented by NextEd to drive future growth and performance include: ▪ increased number of international vocational students expected from March 2024 intake, including impressive momentum of recently launched hospit
Slide 20: Revenue generation opportunity from NextEd’s footprint
Revenue generation opportunity from NextEd’s footprint NextEd campus locations at end July 2024 NextEd can operate a three-shift model (weekday daytime, weekday evening and weekends) up to 50 weeks a year for face-to-face teaching – average annual revenue potential of approximately $765k per classro
Slide 21: NextEd managing what is in our control - resetting FY25 cost base
NextEd managing what is in our control - resetting FY25 cost base In response to the new regulatory environment, NextEd has taken pro-active steps to reset the cost base to be effective from FY25 including: ▪ Deprioritising the search for large M&A targets ▪ Targeting a reduction in variable overhea
Slide 22: FY24 outlook
FY24 outlook ▪ Recent government statements regarding reduction to net migration combined with recent student visa data has created significant macro uncertainties across our entire industry ▪ Despite NextEd being well placed to navigate this environment and our better than industry average visa app
Slide 23: FY25 and FY26 targets
FY25 and FY26 targets Irrespective of near-term challenges posed by recent government statements regarding reduction to net migration, NextEd is focused on improving yield and profitability ▪ Absent any further government shocks, NextEd expects FY25 and FY26 profitability metrics to improve vs FY23
Slide 24: Well positioned for growth in FY25 and FY26
Well positioned for growth in FY25 and FY26 1. Differentiated and unique market position 2. Expanded course range and campus footprint with significant future revenue growth potential without further property investment 3. Focus on overhead cost management and operating leverage – control what we ca
Slide 25: Thank You
Thank Glenn Elith Michael Fahey Level 2, 7 Kelly Street You Chief Executive Officer glenn.elith@nexted.com.au Chief Financial Officer michael.fahey@nexted.com.au Ultimo NSW 2007 nexted.com.au 25
Slide 26: Appendices
____ Appendices
Slide 27: Income Statement (pre and post AASB16)
Income Statement (pre and post AASB16) Half year actuals Change H1 FY24 H1 FY23 $ % $ % Post Pre Post Pre Post Pre ($000’s) Difference Difference AASB16 AASB16 AASB16 AASB16 AASB16 AASB16 Revenue 59,201 59,201 43,574 43,574 15,627 36 15,627 36 Agent commissions (11,262) (11,262) (7,451) (7,451) (3,8
Slide 28: Non-IFRS information
Non-IFRS information ■ The Company uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards (‘AAS’). These measures are collectively referred to ($000’s) H1 FY24 H1 FY23 as non-IFRS financial measures. Although the Company believes NPAT
Slide 29: Go Study – returns to profitability
Segment Results Go Study – returns to profitability Revenue EBITDA ▪ Revenue increased 16% vs pcp, 3,000 $500 with growth in onshore Australia, 2,500 $400 France and Mexico $300 2,000 $200 $384 ▪ $000's H1 FY24 EBITDA increased by $000's 1,500 $100 $2,846 $0.6m vs pcp as student numbers $2,462 1,000
Slide 30: International Vocational – impressive growth
Segment Results International Vocational – impressive growth ▪ Revenue and EBITDA growth Revenue EBITDA Revenue mix driven by impressive English 50,000 12,000 language performance in highly 45,000 HY23 HY24 competitive market 40,000 10,000 35,000 12% ▪ EBITDA growth driven by revenue 30,000 8,000 5%
Slide 31: Domestic Vocational – foundations for future growth
Segment Results Domestic Vocational – foundations for future growth Revenue EBITDA ▪ Management restructure completed in H1 FY24 to support recently relocated Adelaide 5,000 1,600 4,500 campus and upcoming launch of substantial 4,000 1,400 Gold Coast campus 3,500 1,200 3,000 1,000 $000's ▪ 000’s Cea
Slide 32: Technology & Design – international student decline
Segment Results Technology & Design – international student decline ▪ H1 FY24 revenue and EBITDA Revenue EBITDA impacted by low international student 10,000 4,000 enrolments during the covid pandemic 8,000 3,000 who would now be in later stages of $000’s $000’s 6,000 their course and some internatio
Slide 33: NextEd campus footprint by location
NextEd campus footprint by location June 2023 December 2023 Change + / (-) Leased Licensed Leased Licensed Leased Licensed Campus premises classrooms Total premises classrooms Total premises classrooms Total Sydney 92 10 102 92 - 92 - (10) (10) Melbourne 75 24 99 87 - 87 12 (24) (12) Brisbane 24 10
Slide 34: Average student numbers by segment
Average student numbers by segment International Vocational Technology & Design Domestic Vocational 9000 900 600 8000 441 800 78 500 7000 700 2005 202 6000 600 75 400 491 5000 500 135 300 2958 4000 400 522 3000 5848 300 200 395 557 437 2000 200 2722 100 1000 100 0 0 0 H1 FY23 H1 FY24 H1 FY23 H1 FY24
Slide 35: 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 The past performance and position of NextEd Group Limited reflected in this Presentation is given for only as at the date