Idp Education Ltd. · ASX:IEL
Idp Education — FY2023 Earnings Presentation
31 slides from Idp Education's earnings presentation, Aug 23, 2023
Slide 1: IDP Education FY23 Full Year Results
IDP Education FY23 Full Year Results
Slide 2: Important notice and disclaimer
Important notice and disclaimer Disclaimer Non-IFRS Financial Information The material in this presentation has been prepared by IDP IDP Education uses certain measures to manage and report on Education Limited (ASX: IEL) ABN 59 117 676 463 (“IDP Education") its business that are not recognised unde
Slide 3: Agenda
Agenda 1 FY23 Highlights 2 FY23 Financial Results 3 Market Opportunity 4 FY23 Strategy Update 5 Summary
Slide 4: FY23 Highlights
FY23 Highlights Yiu
Slide 5: Record performance on all metrics
Record performance on all metrics Record performance Revenue EBIT (Adjusted)* NPAT (Adjusted)* Final Dividend on all key operational and financial metrics $982m $228m $154m 20cps Strong earnings and cashflow with significant balance sheet flexibility Up 24% Up 40% Up 45% Up 48% Leading market positi
Slide 6: FY23 Financial Results
FY23 2 Financial Results
Slide 7: A track record of strong long-term growth
A track record of strong long-term growth Revenue EBIT (Adjusted)* 16% 22% 10 Year CAGR 10 Year CAGR A$m A$m * EBIT (Adjusted) excludes merger and acquisition expenses which related to the acquisition of Intake Education and The Ambassador Platform in FY23, the acquisition of the British Council’s I
Slide 8: Summary income statement
Summary income statement Income Statement Full Year Actuals Growth Constant Currency Twelve Months to 30 June FY23 FY22 $m % Growth (%)* • Total revenue up 24% with growth in all divisions English Language Testing 545.5 511.4 34.1 7% 6% Student Placement 351.2 215.4 135.8 63% 63% • IELTS revenue gro
Slide 9: Summary of key operational metrics
Summary of key operational metrics Key operational metrics Full Year Actuals Growth Constant IELTS Volumes Currency • IELTS volume growth of 1% represents a period of consolidation post a strong Twelve Months to 30 June FY23 FY22 ‘000s / $ % Growth (%)* rebound in FY22 Volumes (000s) • Indian IELTS
Slide 10: A diversified student placement business model
A diversified student placement business model has consistently delivered strong through-the-cycle growth Volumes Average Placement Fee Revenue 15% 6% 22% 10 Year CAGR 10 year CAGR 10 Year CAGR Thousands A$ A$m 3 10 | FY23 Financial Results | 23 August 2023
Slide 11: Rising margins reflect underlying operating leverage
Rising margins reflect underlying operating leverage Gross Profit Margins EBIT (Adjusted) and NPAT (Adjusted) Margins* • EBIT (Adjusted) and NPAT (Adjusted) excludes merger and acquisition expenses which related to the acquisition of Intake Education and The Ambassador Platform in FY23, the acquisit
Slide 12: Disciplined investment to drive long-term growth
Disciplined investment to drive long-term sustainable growth Overhead Costs* 185 Total Overhead Costs 177 • Total overhead costs (pre-AASB16 and M&A costs) of $30m/mth in line with expectations • The long-dated pipeline of the student placement business means that investment in staff, offices and ma
Slide 13: Generating strong free cash flow
Generating strong free cash flow to fund ongoing disciplined investment Summary of cashflows Full Year Actuals Growth Twelve Months to 30 June FY23 FY22 $m % • GOCF* of $231m reflects conversion from reported EBITDA of: EBITDA 271.2 197.1 74.1 38% o 140% for H2, and o 85% for the full year Non-cash
Slide 14: A robust balance sheet with only $42m of net debt
A robust balance sheet with only $42m of net debt Summary balance sheet As at 30 June 2023, A$ million 30-Jun-23 30-Jun-22 Change Current assets Cash & Debt • Cash balance of $166m and drawn debt of $209m delivering a net debt of Cash and cash equivalents 166.6 196.6 -30.0 $42m as at 30 June 2023 Tr
Slide 15: Market Opportunity
Market 3 Opportunity
Slide 16: An industry that has delivered structural growth
An industry that has delivered consistent through-the-cycle structural growth of 7% CAGR for over 20 years Outbound Internationally mobile students (all countries)* 6 Positive long-dated global demand and supply structural growth drivers 5 7.1% • Large and growing youth population 22 Year CAGR in ma
Slide 17: The leading test in a large global market
The leading test in a large global market with few global players and high barriers to entry IELTS Volumes 4 Total IELTS 10% English Language Testing China & JVs* 16 Year CAGR 3 Millions British Council* 2 IDP Education 1 (CAGR = 13%) FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Slide 18: A large, diversified addressable market
A large, diversified addressable market providing a long runway of growth Annual international student volumes Australia • 325,000 new international students per year for IDP’s current destination markets • Positive settings for study and migration United Kingdom • 480,000 new international students
Slide 19: FY23 Strategy Update
4 FY23 Strategy Update
Slide 20: Corporate Strategy
Our strategy guides the priorities across our global business lines Our Vision The global platform and connected community to guide people with global ambitions on their journey to achieve lifelong learning and career aspirations Corporate Strategy Our Strategy Student Placement English Language Tes
Slide 21: IELTS strategy
Our IELTS strategy is leveraging our trusted brand, extensive physical and digital distribution, and product innovation to enhance our leading position Unmatched The Most A Scalable Customer Centric Physical Recognised, and Flexible English Language Testing Product Innovation & Digital Scale Trusted
Slide 22: IELTS – brand and marketing leadership
IELTS – leveraging proven brand, distribution and innovation to deliver long-term growth in competitive markets Brand and marketing leadership Industry highest prompted and unprompted brand awareness. FY23 outcomes: • Building community through customer testimonials o Over 600 customer videos genera
Slide 23: Student Placement strategy
Our student placement strategy is delivering a differentiated customer experience powered by human connection and enhanced by technology Unmatched Building Differentiated Driving Physical Unique Customer Productivity & Digital Scale Data Assets Experiences Student Placement A global omni channel The
Slide 24: FastLane – unique service at scale
FastLane – A unique service delivering higher conversion and a better experience at scale Students Clients Speed Efficiency Transparency Diversity 11 point 6.3% higher NPS higher for our conversion students rates versus who receive non-FastLane an OiP** offers# 17,500 Students received 93 Clients on
Slide 25: Summary
5 Summary
Slide 26: Well positioned to create shareholder value
Well positioned to create significant long-term shareholder value Record Performance Financial Strength A record year on all key operational A financial profile that features rising and financial metrics margins, strong cash flow generation and a balance sheet with significant flexibility Industry D
Slide 27: Appendices
Appendices
Slide 28: Student Placement volumes up 53%
Student Placement volumes up 53%, with 30%+ growth for all destinations IDP Course Enrolments by Destination (FY23) IDP Course Enrolments by Source Country (FY23) 84,600 84,600 Up 53% v FY22 Up 53% v FY22 42% Australia 53% India 3% Nigeria 27% United Kingdom 10% China 2% UAE 24% Canada 5% Vietnam 15
Slide 29: Increasing conversion rates and efficiency
Increasing conversion rates driving efficiency and scalability in Student Placement Qualified Leads Applicants Course Enrolments +26% Lead Propensity Algorithms • Proprietary algorithms driving real-time prioritisation at scale • Strong conversion improvements being +40% realised with the top 30% of
Slide 30: Product Category Summary
Product Category Summary Revenue and GP by Product Segment Full Year Actuals Growth Constant Currency Twelve Months to 30 June FY23 FY22 $m % Growth (%)* • Strong GP performance across key business lines Revenue o IELTS GP up 13% o Student placement GP up 64% English Language Testing 545.5 511.4 34.
Slide 31: Overhead summary
Overhead summary (Pre & Post AASB16) Summary Income Statement Growth Twelve Months to 30 June FY23 FY22 (FY23 pre AASB 16 vs. FY22 Constant Currency pre AASB 16) Growth (%) * (FY23 pre AASB 16 vs. Post Pre Pre A$m % FY22 pre AASB 16) AASB 16 AASB 16 AASB 16 • Pre-AASB16 overheads (including M&A rela