Laureate Education, Inc. · NASDAQ:LAUR
Laureate Education — Q3 2022 Earnings Presentation
37 slides from Laureate Education's earnings presentation, Nov 3, 2022
Slide 1: Third Quarter 2022 Earnings Presentation
Third Quarter 2022 Earnings Presentation November 3, 2022 © 2022 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, total cash, net of debt (or net cash),
Slide 4: Summary Overview
SUMMARY OVERVIEW Note: Throughout this presentation amounts may not sum to totals due to rounding Amounts presented for enrollments, Revenue, Adjusted EBITDA and Adjusted EBITDA margin are for continuing operations only © 2022 Laureate Education, Inc. 4
Slide 5: Executive Summary
Executive Summary Strong New Enrollment performance for Mexico’s primary (+17%) & Peru’s secondary (+8%) intakes Q3 Results ahead of expectations ‒ Revenue increase driven by favorable intake cycle ‒ Adjusted EBITDA upside resulting from higher revenue and timing of expenses Net Income of $31M
Slide 6: Compelling Investment Characteristics
COMPELLING INVESTMENT CHARACTERISTICS © 2022 Laureate Education, Inc. 6
Slide 7: Large Markets with Low Penetration Rates in Higher Education
Large Markets with Low Penetration Rates in Higher Education Mexico Peru Combined Population (M) 128M 32M 160M Higher Education 5,005 1,642 6,647 Students (000s) Higher Education Gross U.S. E.U. 34% 47% 36% 65% 54% Participation Rate1 Market Share for 42% 69% 51% Private Institutions2 Sources: UNESC
Slide 8: Leading University Portfolio in Mexico & Peru
Leading University Portfolio in Mexico & Peru Enrollment Market QS StarsTM • Brand Founded @ 9/30/22 Segment Overall Ratings / Rankings Ranked Top 10 university in Mexico Premium/ 1960 105,800 5-Stars rated by QS Stars™ in categories Traditional Mexico Universidad del of Employability & Inclusiv
Slide 9: Digital Learning During Pandemic Accelerated Capital Light Operating Model
Digital Learning During Pandemic Accelerated Capital Light Operating Model Laureate to enable significant growth, without large-scale investments in campus expansions, through increased mix of Digital Learning Percentage of Teaching Hours Delivered Online 100% 40% – 60% 27% 2019 2020 /2021 2022+ (Pr
Slide 10: Multiple Vectors for Revenue Growth
Multiple Vectors for Revenue Growth Expected Medium-Term Revenue Growth Phase II Priorities 8% - 10% Phase I Priorities 5% - 7% Pre-Pandemic COVID Recovery Online Expansion Program Expansion New Campuses Scaling EdTech/B2B Targeted Future Organic Trends / Digital (Monetize IP) Revenue Growth Majorit
Slide 11: Q3 & YTD 2022 Performance Results
Q3 & YTD 2022 PERFORMANCE RESULTS © 2022 Laureate Education, Inc. 11
Slide 12: 2022 Third Quarter – Financial Summary
2022 Third Quarter – Financial Summary Q3 ’22 Variance Vs. Q3 ‘21 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Strong primary intake in Mexico +17% New Enrollment 109K 14% 14% • Peru secondary intake +8% Total Enrollment 431K 10% 10% • Mexico
Slide 13: 2022 Q3 YTD – Financial Summary
2022 Q3 YTD – Financial Summary Q3 YTD ’22 Variance Vs. Q3 YTD ‘21 Notes ($ in millions) (Enrollments rounded to the nearest thousand) Results As Reported Organic/CC1 • Strong intakes during 2022 New Enrollment 213K 13% 13% • Mexico +16%, Peru +7% Total Enrollment 431K 10% 10% • Mexico +12%, Peru +8
Slide 14: Segment Results
SEGMENT RESULTS © 2022 Laureate Education, Inc. 14
Slide 15: Mexico Segment Results
Mexico Segment Results Q3 Results Q3 YTD Results Notes ($ in millions) Organic/CC Q3 YTD Organic/CC (Enrollments rounded to the nearest Q3 ’22 thousand) Vs. Q3 ’21 (1) ’22 Vs. Q3 YTD ’21 (1) New Enrollment 82K 17% 134K 16% • Strong primary intake Total Enrollment 228K 12% 228K 12% • Driven by enroll
Slide 16: Peru Segment Results
Peru Segment Results Q3 Results Q3 YTD Results Notes ($ in millions) Organic/CC Q3 YTD Organic/CC (Enrollments rounded to the nearest Q3 ’22 thousand) Vs. Q3 ’21 (1) ’22 Vs. Q3 YTD ’21 (1) • Continued strong growth in New Enrollment 27K 8% 79K 7% new enrollment • Driven by new enrollment Total Enrol
Slide 17: Q3 2022 Capitalization and Return of Capital
Q3 2022 Capitalization and Return of Capital ($ in millions) Total Company as of 9/30/22 Cash & Cash Equivalents $319 Gross Debt ($127) Net Cash Position $192 Returning Capital to Shareholders Remains a Priority • Total current shares outstanding of 164.6M shares as of September 30th • Special cash
Slide 18: Outlook
OUTLOOK © 2022 Laureate Education, Inc. 18
Slide 19: 2022 Outlook – Executive Summary
2022 Outlook – Executive Summary Market dynamics remain favorable for the private sector in Mexico & Peru; digital education accelerating Total Revenue growth expected at +13% Vs. 2021 (up 12% on an organic constant currency basis1) 2022 Adjusted EBITDA expected at +32% Vs. 2021 (up 24% on an
Slide 20: 2022 FY Outlook - Updated
2022 FY Outlook - Updated ($ in millions) (Enrollments rounded to the Prior Change Current nearest thousand) FY 2022 Outlook (mid-pt) FY 2022 Outlook (1) Total Enrollment 413K - 419K +6K 420K - 423K Revenue $1,206 - $1,218 +$15 $1,223 - $1,231 Adjusted EBITDA $329 - $337 +$1 $331 - $337 (1) Based on
Slide 21: 2022 Outlook (At Mid-Point)
2022 Outlook (At Mid-Point)1 Total Enrollment (000s) Revenue ($M) +8% +13% 389 422 $1,227 $1,087 2021A 2022E 2021A 2022E Adjusted EBITDA ($M) Adjusted EBITDA Margin % +32% $334 27.2% $253 23.3% 390 bps 2021A 2022E 2021A 2022E Strong Top Line Growth With Significant Margin Expansion (1) Based on actu
Slide 22: Q4 2022 Guidance Details
Q4 2022 Guidance Details ($ in millions) Q4 2022 Outlook (1) Revenue $327 - $335 Adjusted EBITDA $87 - $93 Continued Growth Momentum Expected in Q4 2022 (1) Based on actual FX rates for October, and spot FX rates (local currency per US dollar) of MXN 20.01 & PEN 3.98 for November through December 20
Slide 23: Appendix
APPENDIX © 2022 Laureate Education, Inc. 23
Slide 24: 2022 Third Quarter – Net Income Reconciliation
2022 Third Quarter – Net Income Reconciliation Q3 ’22 B / (W) Vs. Q3 ’21 Notes ($ in millions) Reported $ % • Impacted by return to campus costs and Adjusted EBITDA 73 (3) (4%) expense timing Depreciation & Amort. (15) 11 44% Interest Expense, net (2) 1 29% • Repayment of debt Impairments - 3 n.m. O
Slide 25: 2022 Q3 YTD – Net Income Reconciliation
2022 Q3 YTD – Net Income Reconciliation Q3 YTD ’22 B / (W) Vs. Q3 YTD ’21 Notes ($ in millions) Reported $ % Adjusted EBITDA 244 51 27% • PY included $13M non-cash FAS5 charge Depreciation & Amort. (44) 32 42% Interest Expense, net (6) 32 84% • Repayment of debt Impairments - 67 n.m. • Impairment ch
Slide 26: 2022 Full Year Guidance Details
2022 Full Year Guidance Details ($ in millions) (Enrollments rounded to the nearest thousand) Total Enrollment Revenues Adj. EBITDA 2021 FY Results As Reported 389K $1,087 $253 Campus Closures (2K) - - 2021 FY Results Adjusted 387K $1,087 $253 Organic Growth 33K - 36K $126 - $134 $57 - $63 Organic G
Slide 27: Q4 2022 & Implied 2H 2022 Guidance Details
Q4 2022 & Implied 2H 2022 Guidance Details 4Q Guidance 2H Implied Guidance ($ in millions) Revenues Adj. EBITDA Revenues Adj. EBITDA 2021 Results As Reported $297 $61 $564 $137 Timing Impact Intra-Year (academic calendar) - - $3 $2 2021 Results Adjusted $297 $61 $567 $139 Organic Growth $26 - $34 $2
Slide 28: 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 31% 30% 30% 49% 29% 28% 47% 46% 27% 42% 44% 25% 23% 24% 30% 19
Slide 29: Financial Results & Tables
Financial Results & Tables © 2022 Laureate Education, Inc. 29
Slide 30: Financial Tables
Financial Tables Consolidated Statements of Operations For the three months ended September 30, For the nine months ended September 30, IN MILLIONS 2022 2021 Change 2022 2021 Change Revenues $ 301.0 $ 267.7 $ 33.3 $ 895.9 $ 790.0 $ 105.9 Costs and expenses: Direct costs 229.4 182.0 47.4 655.1 577.1
Slide 31: Financial Tables
Financial Tables Revenue and Adjusted EBITDA by segment: Quarter IN MILLIONS % Change $ Variance Components Organic Organic For the three months ended Constant Constant September 30, 2022 2021 Reported Currency(1) Total Currency Other Acq/Div. FX Revenues Mexico $ 147.8 $ 131.3 13% 14% $ 16.5 $ 18.1
Slide 32: Financial Tables
Financial Tables Revenue and Adjusted EBITDA by segment: Year-to-Date IN MILLIONS % Change $ Variance Components Organic Organic For the nine months ended Constant Constant September 30, 2022 2021 Reported Currency(2) Total Currency Other Acq/Div. FX Revenues Mexico $ 435.0 $ 390.9 11% 12% $ 44.1 $
Slide 33: Financial Tables
Financial Tables Consolidated Balance Sheets IN MILLIONS September 30, 2022 December 31, 2021 Change Assets Cash and cash equivalents $ 319.0 $ 324.8 $ (5.8) Receivables (current), net 75.2 152.0 (76.8) Other current assets 61.6 67.5 (5.9) Property and equipment, net 486.3 499.5 (13.2) Operating lea
Slide 34: Financial Tables
Financial Tables Consolidated Statements of Cash Flows For the nine months ended September 30, IN MILLIONS 2022 2021 Change Cash flows from operating activities Net income $ 29.9 $ 166.0 $ (136.1) Depreciation and amortization 43.6 75.6 (32.0) Loss on impairment of assets 0.1 68.4 (68.3) Gain on sal
Slide 35: Financial Tables
Financial Tables Non-GAAP Reconciliation (1 of 2) The following table reconciles income (loss) from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin: For the three months ended September 30, For the nine months ended September 30, IN MILLIONS 2022 2021 Change 2022 2021 Change Inco
Slide 36: Financial Tables
Financial Tables Non-GAAP Reconciliation (2 of 2) The following table reconciles operating cash flow to Free Cash Flow for the nine months ended September 30, 2022 and 2021: IN MILLIONS 2022 2021 Change Net cash provided by operating activities $ 154.7 $ 54.0 $ 100.7 Capital expenditures: Purchase o
Slide 37: © 2022 Laureate Education, Inc.
© 2022 Laureate Education, Inc. 37