Somos Educação S.A

Somos Educação — Abril Educação — Investor Presentation (October 2012)

30 slides from Somos Educação's investor presentation, October 2012

  1. Slide 1: October, 2012

    ft Abril EpucacAo October, 2012

  2. Slide 2: Expanded Focus to Consolidate Leadership

    Expanded Focus to Consolidate Leadership Long tradition in education Expanded focus “Spin-off” IPO Spin-off of Abril S.A. 100% owned by 2011 Civita Family (56.4%) Família Civita New management The controlling shareholder of the Abril Group, a large team media conglomerate, with net revenue of Abril

  3. Slide 3: Overview of Abril Educação

    Overview of Abril Educação 1st publicly-held company dedicated to primary and secondary education and preparatory courses for university Focus admission exams One of the largest primary and secondary education companies in Brazil in terms of number of students and schools served Leadership Around 76

  4. Slide 4: Abril Educação Offers Diversified Educational Solutions

    Abril Educação Offers Diversified Educational Solutions Portfolio offered to students and Public & Private K-12 Schools Schools & Technical New Textbooks Learning Systems Prep Courses Courses Businesses & Schools and Digital content and Learning systems Prep. Courses textbooks 1,786 27* 44.8 million

  5. Slide 5: New Businesses

    New Businesses • Educational content through mobile • Status: developing the platform and signing contracts with operators • Next Steps: ENEM courses to be launched in Sep/12 • Distance learning courses • Status: ANATEL approval in Jul/12 • Next Steps: Provide preparatory • Commercialization of "The

  6. Slide 6: Corporate Governance: Transparency

    Corporate Governance:Transparency Civita Family (56.4%) (18.5%) Free Float (25.1%) Controlling shareholder of Grupo Abril AE is the largest investment fund in Shares traded on the market with net revenue of R$4.0 billion in 2011 the sector Corporate Governance: Transparency Board members: Fiscal mem

  7. Slide 7: Corporate Structure

    Corporate Structure 100% 100% 100% 100% 100% 100% 100% 5.9% Maxiprint Editora Sistema de Sistema PH Editora C.A.E.P. Curso PH Gráfica e Livemocha Scipione Ensino Abril de Ensino Ática S.A. Ltda. Ltda. Editora Inc. S.A Educação S.A. Ltda. Ltda. 51.00% 54.69% 51.00% Nice Participações Escola Red Ballo

  8. Slide 8: Industry Turns Over R$36 bn per year and is Undergoing Constant Expansion

    Industry IndustryTurns Turnsover overR$ 36 bn¹1 per R$38bn per year year and and is is Undergoing Undergoing Constant Constant Expansion Expansion Primary and Secondary Education Segments Number of Primary and Secondary Education Students per Level (mn students in 2009) 91% of the students in Brazil

  9. Slide 9: Basic Education Market in Brazil

    Basic Education Market in Brazil 2011 Revenues (in R$) Total: R$ 36 billion Sub Total: R$ 13 billion Technical schools 4 billion Languages Own schools 3.5 billion (elementary and high school) Prep. Courses 23 billion 2.3 billion Publishers 2 billion Abril Educação Abril Educação Learning Revenue Mar

  10. Slide 10: Financial Information – 1H12

    Financial Information – 1H12

  11. Slide 11: Non-recurring Events

    Non-recurring Events (+) R$ 18.6 million • Correction of Inventory Positive Cash Effect Costing of Previous Years (R$ 20.3 million) (-) R$ 1.7 million Reduction of Net Income • Destruction of Obsolete (R$ 34.4 million) (-) R$ 20.3 million Negative Impact in EBIDTA Period: 2Q12 3Q12 4Q12 2012 Correct

  12. Slide 12: 2Q12/1H12 Financial Results – Summary

    2Q12/1H12 Financial Results – Summary 2Q12 Changes % 2Q12 Changes % "As Is" 2Q12 / 2Q11 (R$ mm) (Before Non-Recurring (After Non- 2Q11 (Before Non- 2Q12 / 2Q11 Events) "As Is" Recurring Events Recurring Events) Net Revenue 102.5 102.5 80.0 28% 28% (-) Cost of goods sold (COGS) (39.9) (60.2) (35.4) 1

  13. Slide 13: Net Revenue Evolution – R$ mm

    Net Revenue Evolution – R$ mm Net Revenue Evolution - 1H12 "As Is" (R$ mm) +24% 39.9 2.1 351.3* 11.4 0.1 19.8 2.4 283.8 (9.0) 1H11 Publishers Anglo SER MAXI Anglo Grupo pH ETB 1H12 (Systems) (Courses) Publishers Learning Systems Schools and Courses Growth by business compared to the first half of 20

  14. Slide 14: Net Revenue per Business Line (As is)

    Net Revenue per Business Line (“As is”) 1H11 1H12 R$ 283.8 million R$ 351.3 million Schools and Prep. Schools and Courses Prep. 36.2 Courses 13% 78.2 22% Publishers 150.3 Publishers 43% Learning 159.3 Systems 56% 88.4 31% Learning Systems 122.0 35% 14 Note: Chart do not include revenue from the CAEP

  15. Slide 15: Gross Margins

    Gross Margins Gross Margins - Comparable Basis 1H11 1H12 84% 85% 79% 70% 70% 70% 70% 66% 63% 67% 51% 47% 48% 46% 27% AE Publishers Anglo SER Maxi Anglo pH Group ETB (Systems) (Courses) Publishers Learning Systems Schools and Prep. Courses 15

  16. Slide 16: 1H12 - Expenses Breakdown

    1H12 - Expenses Breakdown Corporate Management 6.2 Organic 13.4 4.2 0.7 172.2 2.9 1.3 5.3 0.6 3.5 0.8 17.0 3.2 135.3 (4.6) 1.8 1H11 Stock Goodwill Pro-Forma Publishers Anglo SER Anglo (Prep. PH New Fronts Allocated in Allocated in AE and 1H12 Option Efect (Learning Courses) Business Anglo Publishers

  17. Slide 17: Net Income (R$ mm)

    1H12 - Non-cash impact over results 48.2 35.1 EBIT (R$ mm) 13.1 1H12 EBIT Amortization of surplus value of intangible 1H12 EBIT excluding surplus value assets amortization 18.8 16.0 IT/SC (R$ mm) (2.8) 1H12 Income Tax and Social Contribution Anglo and pH Deferred Income IT/SC excluding Anglo and pH

  18. Slide 18: Consolidated Capital Structure

    Consolidated Capital Structure Consolidated Posição de Debt DívidaPosition (June 2012)- Consolidada Jun/12R$ mm - R$ mm Capital Structure - R$ mm Shareholders Equity Net Debt 277.8 219.7 228.9 245.4 18% 19% 323.9 516.4 22% 21% 365.3 1,015.7 996.9 959.0 912.9 594.2 47% 577.2 270.3 228.9 53% 79% 78% 8

  19. Slide 19: Publishers - Net Revenue Evolution (R$ mm)

    Publishers Publishers - Net Revenue Evolution (R$ mm) 2010 2011 2012 The Publishers’ revenue is seasonally weak in the 298.0 307.2 -5.6% second quarter and, therefore, is not an indication of annual performance. 143.7 143.6 159.3 150.3 -57% 98.6 111.6 39.8 13.0 15.5 6.8 16.5 1Q 2Q 3Q 4Q 1H 19

  20. Slide 20: Learning Systems

    Learning Systems Learning Systems Net Revenue Growth Comparable Basis (R$ mm) +43% 126.0 11.4 88.4 +36% 24.8 18.3 +28% 89.9 70.1 1H11 1H12 Anglo SER Maxi 20

  21. Slide 21: Schools and Prep. Courses

    Schools and Prep. Courses Schools and Preparatory Courses Net Revenue Growth Comparable Basis (R$ mm) +16% 78.2 66.3 2.9 0.9 +23% 54.7 44.4 -2% 21.0 20.6 1H11 1H12 Anglo pH ETB 21

  22. Slide 22: Financial Information – 4Q11/FY11

    Financial Information – 4Q11/FY11

  23. Slide 23: 4Q11 and 2011 Financial Results

    4Q11 and 2011 Financial Results Quarter Year Change (%) (R$ mm) 4Q11 4Q10 2011 2010 4Q11/4Q10 2011/2010 Net Revenue 364.2 323.3 772.1 512.2 13% 51% Gross Profit 212.2 183.9 474.1 280.6 15% 69% Gross Margin (%) 58% 57% 61% 55% 1 p.p. 6 p.p. Operating income (loss) 96.9 89.8 150.8 62.0 8% 143% Operati

  24. Slide 24: Net Revenue Evolution – R$ mm

    Net Revenue Evolution – R$ mm Consolidated Net Revenues Growth per Business R$ mm Lines over 2010 - R$ mm 2010 2011 +51% +51% 772.1 0.9 772.1 19.1 3.6 +13% 60.1 96.2 512.2 80.2 364.2 323.3 512.2 203.6 105.4 124.1 80.3 16.8 66.6 1Q 2Q 3Q 4Q Year 2010 Editoras Anglo Publishers pH SER ETB MAXI 2011 Not

  25. Slide 25: Net Revenue per Business Line (As is)

    Net Revenue per Business Line (“As is”) Net Revenues – 4Q11 (R$mm) Net Revenues – 4Q10 (R$mm) pH SER SER Anglo Anglo 3.3 ETB 21.7 12.5 22.1 Publishers 20.8 1% 1.2 6% 3% Publishers 7% 298.0 6% 0% 307.2 92% MAXI 85% 0.9 0% Net Revenues - 2011 (R$mm) Net Revenues - 2010 (R$mm) SER SER pH 37.5 18,4 Angl

  26. Slide 26: Gross and Operational Margins

    Gross and Operational Margins Businesses Gross Margins - 2010 vs. 2011 Businesses Operational Margins - 2010 vs. 2011 47% 73% 29% 24% 66% 20% 18% 22% 61% 62% 12% 10% 55% 56%58% 55% AE EDITORAS PUBLISHERS SER ANGLO pH 4% AE EDITORAS PUBLISHERS SER ANGLO pH -86% 2010 2011 2010 2011 26

  27. Slide 27: Net Income (R$ mm)

    FY11 Non-cash impacts over results 113.0 89.4 EBIT (R$ mm) 23.7 2011 EBIT Amortization of surplus value of intangible assets 2011 EBIT excluding surplus value amortization 14.2 IT/SC (R$ mm) (27.5) (41.7) 2011 Income Tax and Social Contribution Anglo Deferred Income Tax and Social Income Tax and Soc

  28. Slide 28: Stock Performance: +86% appreciation since IPO

    Stock Performance: +86% appreciation since IPO ABRE11 Price (R$) Since the IPO until 10/16/2012 40,00 37.25 35,00 30,00 25,00 20,00 20.00* Market Cap: R$ 2.8 bi 15,00 10,00 26-Jul 27-Aug 28-Sep 30-Oct 1-Dec 2-Jan 3-Feb 6-Mar 7-Apr 9-May 10-Jun 12-Jul 13-Aug 14-Sep 16-Oct ABRE11 Volume ADTV Since the

  29. Slide 29: Abril Educação – A unique investment opportunity!

    Why Abril Educação? • We are the leaders in the primary, secondary and pre-university education segment in Brazil, the largest and with the fastest growth rate in the country • Our strategy is focused on providing support to the associated schools to promote student’s employability skills, thus bein

  30. Slide 30: Investor Relations

    Investor Relations ri@abrileducacao.com.br www.abrileducacao.com.br/investors Legal Disclaimer This document must not be considered a recommendation for investment in the Units. Before investing in the Units, the investors should conduct their own analysis and valuation of the Company, its business

Abril Educação — Investor Presentation (October 2012) on 6ix