Slide 1: Third Quarter 2017 Earnings Presentation
Third Quarter 2017 Earnings Presentation November 8, 2017 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 meaning
Slide 3: Q3 2017 Performance Highlights
Q3 2017 PERFORMANCE HIGHLIGHTS © 2017 Laureate Education, Inc. 3
Slide 4: Q3 and YTD Q3 2017 Financial Performance Highlights
Q3 and YTD Q3 2017 Financial Performance Highlights 3rd Quarter 2017 YTD 2017 Adj. Adj. Revenue EBITDA Revenue EBITDA $983M $87M $3,117M $477M +4% (19%) +5% +12% Organic constant Organic constant Organic constant Organic constant currency growth (1) currency growth (1) currency growth (1) currency g
Slide 5: Q3 '17 Revenue and Adjusted EBITDA by Segment
Q3 ’17 Revenue and Adjusted EBITDA by Segment Organic Constant (1) Currency (USD millions) B/(W) vs Q3'16 B/(W) vs Q3'16 Q3'17 Q3'16 $ % $ % Revenues Brazil 170.5 152.8 17.7 12% 12.7 8% Mexico 141.2 140.4 0.8 1% (6.4) (5%) Andean & Iberian 314.8 289.2 25.6 9% 15.4 5% Central America & U.S. Campuses
Slide 6: YTD Q3 '17 Revenue and Adjusted EBITDA by Segment
YTD Q3 ’17 Revenue and Adjusted EBITDA by Segment Organic Constant Currency (1) (USD millions) B/(W) vs YTD Q3'16 B/(W) vs YTD Q3'16 YTD Q3'17 YTD Q3'16 $ % $ % Revenues Brazil 548.0 479.6 68.4 14% 18.9 4% Mexico 452.0 455.1 (3.1) (1%) 13.0 3% Andean & Iberian 930.3 835.5 94.8 11% 77.3 9% Central Am
Slide 7: YTD Q3 2017 Enrollment by Segment
YTD Q3 2017 Enrollment by Segment • New Enrollments for YTD Q3 2017 increased 3% and Total Enrollments increased 3% versus YTD Q3 2016 on an organic basis (excluding 2016 divestitures(1)) New Enrollments Total Enrollments As of As of YTD Q3 2017 YTD Q3 2016 B/(W) YoY 9/30/2017 9/30/2016 B/(W) YoY To
Slide 8: Segment Results Overview
SEGMENT RESULTS OVERVIEW © 2017 Laureate Education, Inc. 8
Slide 9: Significant Timing Items Impacting Year-over-Year Comparability
Significant Timing Items Impacting Year-over-Year Comparability Timing adjusted results presented on the following segment pages include the following impacts: • Mexico: Magnitude 7.1 earthquake struck on September 19th with its epicenter in Puebla, which heavily impacted Mexico City as well as 7 ot
Slide 10: Segment Results Overview – Total Company
Segment Results Overview – Total Company New Total Adj. For Laureate, Q1 and Q3 represent our two largest intake Rev. Enroll. Enroll. EBITDA periods, accounting for approximately 80% of total new enrollment activity for the year, but are seasonally low from a Organic (1) Y-o-Y Q3 +4% +3% +4% (19%)
Slide 11: Segment Results Overview – Brazil
Segment Results Overview – Brazil Third quarter results reflect strong secondary intake (especially in distance learning – DL) with some timing impacting Revenue and Adjusted EBITDA in a seasonally low quarter New Total Adj. Rev. Enroll. Enroll. EBITDA – Q3 new enrollments increased 22% vs. prior
Slide 12: Segment Results Overview – Mexico
Segment Results Overview – Mexico New Total Adj. Mexico results were impacted by the September 19th earthquake Rev. Enroll. Enroll. EBITDA – Earthquake shifted revenues and classes from Q3 2017 to Q4 Organic (1) Y-o-Y Q3 (4%) 0% (5%) (77%) 2017, and resulted in an estimated loss of 4,000 – 5,000 t
Slide 13: Segment Results Overview – Andean & Iberian
Segment Results Overview – Andean & Iberian New Total Adj. Third quarter results reflect solid trends in all markets except Rev. Enroll. Enroll. EBITDA Chile, which was impacted by the 2016 regulatory changes Organic (1) Y-o-Y Q3 +4% +5% +5% +13% – Q3 new enrollment intake increased 4% vs. prior y
Slide 14: Segment Results Overview – Central America & U.S. Campuses
Segment Results Overview – Central America & U.S. Campuses (1) Low single digit enrollment growth driving mid-high single digit revenue growth, with faster growth in higher price point markets. Margins have improved through scaling of smaller assets in the segment New Total Adj. Rev. Enroll. Enrol
Slide 15: Segment Results Overview – EMEAA
Segment Results Overview – EMEAA New Total Adj. Rev. Enroll. Enroll. EBITDA Q3 financial results remain strong Organic (1) Y-o-Y Q3 +7% +6% +9% 32% – Q3 new enrollment intake increased 7% vs. prior year impacted by timing. Adjusted for timing, new enrollments Results YTD would be flat year over ye
Slide 16: Segment Results Overview – Online & Partnerships
Segment Results Overview – Online & Partnerships New Total Adj. Third quarter results were significantly unfavorably impacted Rev. Enroll. Enroll. EBITDA by the decision to focus on marketing efficiency versus volume, causing us to have insufficient leads for our Walden Organic (1) Y-o-Y Q3 (13%)
Slide 17: 2017 Outlook
2017 OUTLOOK © 2017 Laureate Education, Inc. 17
Slide 18: FY 2017 Updated Guidance
FY 2017 Updated Guidance • Total Enrollments: lowering range to 1.5% - 2.0% organic growth to 1,059,000 to 1,064,000 total enrollments due to Mexico earthquake (estimated loss of 4,000-5,000 students) and weak performance in our domestic online business • Revenue: narrowing guidance to 5.0% growth o
Slide 19: Q4 2017 Guidance
Q4 2017 Guidance ($ millions, rounded) Revenue Adjusted EBITDA 4Q 2016 Reported Results $1,176 $285 4Q 2017 Forecasted Constant Currency $45 $16 - $25 Growth including Accelerator Plan FX Impact y-o-y (1) $7 $2 4Q 2017 Guidance @spot FX $1,228 $303 - $312 (1) Based on current spot FX rates (local cu
Slide 20: Other Updates
OTHER UPDATES © 2017 Laureate Education, Inc. 20
Slide 21: Share Count and Capital Structure
Share Count and Capital Structure For Q4 2017, assuming no conversion of the Series A Preferred - Basic shares: 187.3M Share Count - Series A Preferred charge to EPS: ($107M) & Beneficial Expected issuance of up to 36M shares related to the Series A Preferred when converted to Conversion common
Slide 22: Appendix
APPENDIX © 2017 Laureate Education, Inc. 22
Slide 23: 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 & Iberian) – Q3 represents th
Slide 24: 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 Academic Calendar Academic Calendar 46% 46% 29% 28% 30%
Slide 25: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. 25
Slide 26: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. 26
Slide 27: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. 27
Slide 28: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. 28
Slide 29: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. 29
Slide 30: Financial Tables
Financial Tables Note: Dollars in millions, except per share amounts, and may not sum to total due to rounding © 2017 Laureate Education, Inc. 30
Slide 31: © 2017 Laureate Education, Inc.
© 2017 Laureate Education, Inc. 31