Edu Holdings Limited · ASX:EDU
Edu — H1 2024 Earnings Presentation
37 slides from Edu's earnings presentation, Aug 30, 2024
Slide 1: 1H24 Results Presentation
1H24 RESULTS PRESENTATION Career-ready qualifications in Healthcare, Education and Community Services 30 JUNE 2024 1
Slide 2: 1H24 Results Presentation Agenda
01 02 03 FINANCIAL BUSINESS UNIT 1H24 HIGHLIGHTS RESULTS PERFORMANCE PG 6 PG 14 PG 19 04 05 06 CAPITAL AND PRIORITIES AND APPENDICES DEBT STRUCTURE OUTLOOK PG 24 PG 27 PG 30 1H24 RESULTS PRESENTATI ON 2
Slide 3: Snapshot
Snapshot COMPANY OVERVIEW INVESTMENT PROPOSITION 2 accredited tertiary education providers 1 2 Quality tertiary In-demand course mix, education business aligned to long-term Higher Education (HE) Vocational Education skills shortages & Training (VET) Delivering superior student experience and Offeri
Slide 4: Strategic positioning
Strategic positioning HEALTHCARE, EDUCATION AND COMMUNITY SERVICES SPECIALIST Large and growing Occupations with critical Pathways to skilled employing industry skills shortages migration Healthcare and Social Assistance is EDU qualifies students in 3 of the top EDU qualifications lead to ~15 Austra
Slide 5: Tightening regulatory environment
Tightening regulatory environment Notwithstanding the positive results for the half, recent regulatory changes intended to manage the growth and improve the integrity of the international education sector are expected to create a more challenging trading environment. In particular, the proposed intr
Slide 6: 1H24 Highlights
01 1H24 HIGHLIGHTS 1H24 RESULTS PRESENTATI ON 6
Slide 7: Highlights
Highlights Higher education Operating Vocational (ALG) Operating (Ikon) enrolments1 leverage evident enrolments1 capacity remains up 85% Ikon 1H24 EBITDA rebuilding Positioned to deliver Growth continuing margin improved by 1H24 up 24% operating leverage into Trimester 2, 2024 8 ppts to 28% LTM to T
Slide 8: Financial & Student Metrics
Financial & Student Metrics FINANCIAL METRICS STUDENT METRICS 1H24 vs 1H23 1H24 vs 1H23 Revenue1 $16.9m $10.3m Letters of offer 2,829 1,774 EBITDA2 $2.3m $0.2m New student enrolments 1,490 778 (NSEs) Net profit / (loss)after tax $28k ($1.6m) Enrolments3 5,507 3,646 1 Revenue includes $0.1m of rental
Slide 9: Key Financial Metrics
Key Financial Metrics1 Multi-year analysis Revenue ($'000) EBITDA ($’000)2 Earnings per share (cents)3 2.00 6,750 24,000 1.50 6,000 0.51 1.00 5,250 2,895 0.21 20,000 12,743 1.07 11,822 0.50 4,500 0.41 0.79 10,715 0.03 0.00 0.14 0.08 16,000 11,306 3,750 (0.17) (0.36) 2,552 (0.50) (0.94) 3,000 8,786 (
Slide 10: HE (Ikon) momentum continuing
HE (Ikon) momentum continuing 1800 1,709 Ikon growth accelerated T2’24 enrolments up 102% on PCP 1600 Number of enrolments 1400 1,287 1200 Sales, marketing and admissions 1224 955 functions bolstered and delivering 1000 848 Mark Falvo joined 2H23, appointed 768 802 GM, Future Students to lead sales,
Slide 11: Positive trend in VET (ALG) NSEs
Positive trend in VET (ALG) NSEs Term 1 NSEs - leading indicator, up 20% Term 3 • Bodes well for 2H24 300 292 270 Term 4 Term 2 252 249 250 5 consecutive terms of total 234 enrolments growth 217 • Smaller cohorts of graduating 207 students being replaced with 200 larger commencing cohorts 172 • 24-m
Slide 12: Strategy unfolding
Strategy unfolding Higher value Longer average Alignment to Expansion of Leverage online courses study duration skills shortages course portfolio delivery HE now 62% of 30 months in 1H24 vs 92% of 1H24 22 courses in 1H24 64% of domestic Group revenue 18 months in 1H18 enrolments in vs 14 in 1H18 enr
Slide 13: Operating leverage
Operating leverage Latent capacity in campus and organisational structure IKON & ALG NATIONAL CAMPUS FOOTPRINT Brisbane Campus IKON & ALG Melbourne Campus IKON & ALG 7 campuses 54 Classrooms Brisbane Campus ALG 4 states + Online Melbourne Campus IKON & ALG Sydney Campus 2,302 sqm 2,330 sqm in Sydney
Slide 14: Financial Results
02 FINANCIAL RESULTS 1H24 RESULTS PRESENTATI ON 14
Slide 15: Revenue and earnings improving
Revenue and earnings improving Consolidated Profit or Loss Statement Group 1H24 1H23 Variance Variance $'000 $'000 $'000 % Ikon and ALG Total revenue and other income 16,851 10,252 6,599 64% Cost of sales (7,618) (4,703) (2,915) (62%) Group revenue up 64% - Gross profit 9,233 5,549 3,684 66% Ikon up
Slide 16: EBITDA Bridge
EBITDA Bridge ($’000) Operating leverage emerging With relatively flat operating costs, $3.7m gross profit growth delivered $2.0m improvement in EBITDA 1H24 RESULTS PRESENTATI ON 16
Slide 17: Strong cash balance delivered by improved operating results
Strong cash balance delivered by improved operating results Consolidated Balance Sheet Balance Sheet 30-Jun-24 31-Dec-23 Variance $'000 $'000 $'000 Cash and cash equivalents 8,041 3,121 4,920 Net cash increased by $5.2m to Trade and other receivables 2,337 304 2,033 $6.3m due to strong student enrol
Slide 18: Cash flow bridge
Cash flow bridge ($’000) Strong cash conversion, exacerbated by seasonality Strong operating cash inflows of $7.5m, up $5.3m against $2.2m in PCP CBA market rate loan principal payment of $250k in 1H24 $125k quarterly repayments from August 2024 to November 2027 1H24 RESULTS PRESENTATI ON 18
Slide 19: Business Unit Performance
03 BUSINESS UNIT PERFORMANCE 1H24 RESULTS PRESENTATI ON 19
Slide 20: Business unit performance
Business unit performance 1H24 1H23 1H24 1H23 Revenue1 $10.4m $5.5m $6.4m $4.7m All metrics moving in the right direction EBITDA $2.9m $1.1m $122k ($149k) Students at period- end2 1,709 848 1,281 1,023 Strong start to 2024 - growth in Ikon and ALG continuing. 1H momentum NSEs3 981 354 509 424 set to
Slide 21: Enrolments
Enrolments Student and unit enrolments Enrolments and NSEs Unit 2,996 Total Enrolments NSEs enrolments enrolments 4,800 2,571 2,000 2,500 450 412 400 4,400 1,789 1,800 4,000 2,000 350 3,600 1,123 1,328 1,600 306 300 3,200 1,400 1,500 2,800 1,200 250 225 217 2,400 1,000 2,149 200 1,000 2,001 2,033 14
Slide 22: Ikon - momentum continuing
Ikon - momentum continuing Profit or Loss Statement 1H24 1H23 Variance Variance $'000 $'000 $'000 % Revenue Revenue up 88% due to ongoing International student revenue 7,020 2,275 4,745 209% growth in international and online Domestic student and other revenue 3,396 3,273 123 4% domestic enrolments
Slide 23: ALG improving
ALG improving Profit or Loss Statement 1H24 1H23 Variance Variance $'000 $'000 $'000 % Revenue International student revenue 6,352 4,515 1,837 41% Domestic student and other revenue 83 189 (106) (56%) Total revenue 6,435 4,704 1,731 37% Revenue up 37% on PCP Cost of sales Commission (1,573) (1,037)
Slide 24: Capital and Debt Structure
04 CAPITAL AND DEBT STRUCTURE 1H24 RESULTS PRESENTATI ON 24
Slide 25: Cash and debt
Cash and debt Gearing 30 Jun-24 31 Dec-23 Variance $'000 $'000 % Acquisition facility 1,750 2,000 (13%) $8.0m Cash at 30 Jun-24 Total gross debt 1,750 2,000 (13%) Cash and cash equivalents 8,041 3,121 158% $1.75m Loan, $125k per Net cash / (debt) 6,291 1,121 461% quarter amortising Supportive bankin
Slide 26: Capital structure
Capital structure Supportive institutional investors alongside meaningful Board and Management holdings ISSUED CAPITAL & ENTERPRISE VALUE1 SHAREHOLDERS Number % Diluted Ordinary shares 165,214,443 95.2% Board & Management Performance rights 8,401,257 4.8% 18% Fully diluted 173,615,700 100.0% Institu
Slide 27: Priorities and Outlook
05 PRIORITIES AND OUTLOOK 1H24 RESULTS PRESENTATI ON 27
Slide 28: Current priorities
Current priorities Prepare for introduction Student volume growth Product development Operational efficiency of proposed caps Building recruitment Ambitious program Full implementation of Develop plans to capability in Australia and underway to materially shared services model to effectively manage
Slide 29: 2H24 Outlook and Guidance
2H24 Outlook and Guidance Revenue and earnings up on Strong NSE and enrolment NSE and enrolment growth to 1H24 – record revenue for FY24 growth to continue continue at modest pace Further operating leverage to Commensurate revenue and NSEs to exceed lower number emerge earnings growth of graduating
Slide 30: Appendices
06 APPENDICES 1H24 RESULTS PRESENTATI ON 30
Slide 31: Deep education sector and corporate experience aligned through significant equity interest
Deep education sector and corporate experience aligned through significant equity interest EXECUTIVE MANAGEMENT LEADERSHIP TEAM Adam Davis Lyndon Catzel Ryan Lawson Mark Falvo Gerald Ng Chief Executive Officer Chief Financial Officer General Manager, General Manager, General Manager, & Managing Dire
Slide 32: Global recruitment network
Global recruitment network Diverse student & agent mix 280 active education agents 80 source markets 2 business units 7 campuses 4 states + Online 1 Ikon and ALG international student enrolments 1H24 RESULTS PRESENTATI ON 2 At 25 Jul 2024 32
Slide 33: Group Half on Half Analysis
Group Half on Half Analysis Group 1H24 1H23 Variance 2H23 2H22 Variance $'000 $'000 % $'000 $'000 % Ikon and ALG Total revenue and other income 16,851 10,252 64% 11,306 8,786 29% Cost of sales (7,618) (4,703) (62%) (5,473) (4,000) (37%) Gross profit 9,233 5,549 66% 5,833 4,786 22% Gross margin (%)*
Slide 34: Ikon Half on Half Analysis
Ikon Half on Half Analysis Ikon 1H24 1H23 Variance 2H23 2H22 Variance $'000 $'000 % $'000 $'000 % Revenue International student revenue 7,020 2,275 209% 3,216 1,332 141% Domestic student revenue 3,396 3,273 4% 2,831 2,969 (5%) Total revenue 10,416 5,548 88% 6,047 4,301 41% Cost of sales Commission (
Slide 35: ALG Half on Half Analysis
ALG Half on Half Analysis ALG 1H24 1H23 Variance 2H23 2H22 Variance $'000 $'000 % $'000 $'000 % Revenue International student revenue 6,352 4,515 41% 5,072 4,431 14% Domestic student and other revenue 83 189 (56%) 187 54 246% Total revenue 6,435 4,704 37% 5,259 4,485 17% Cost of sales Commission (1,
Slide 36: Disclaimer
Disclaimer This presentation, dated 30 August 2024, provides additional While all reasonable care has been taken in relation to the commentary on the Annual Report for the period ended 30 June preparation of this presentation, none of the Company, its subsidiaries, 2024 for EDU Holdings Limited (EDU
Slide 37: Contact
CONTACT Adam Davis, CEO Lyndon Catzel, CFO E adam.davis@eduholdings.com.au E lyndon.catzel@eduholdings.com.au P 1300 254 000 P 1300 254 000 M +61 408 400 888 M +61 414 907 384 1H24 RESULTS PRESENTATI ON 37