Nord Anglia Education Full fiscal year 2016 results presentation

Transcription

1 Nord Anglia Education Full fiscal year 2016 results presentation For the period ended August 31, 2016 November 29, 2016 Fiscal year 2016 results presentation Nord Anglia Education 1

2 Disclaimer Neither Nord Anglia Education, Inc. (NYSE: NORD) nor any of its subsidiaries or affiliates is making any representation or warranty, expressed or implied, as to the accuracy or completeness of the attached materials. Please note that the attached materials and our oral explanations of the attached materials may constitute forward-looking statements within the meaning of applicable U.S. securities laws and such forward-looking statements are made based on our current expectations. Forward-looking statements relate to events involving certain risks and uncertainties, and actual results may differ materially from the views expressed. A number of potential risks and uncertainties are outlined in our public filings with the Securities and Exchange Commission. Nord Anglia Education, Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law. You are cautioned not to place undue reliance on any forward-looking statements. Fiscal year 2016 results presentation Nord Anglia Education 2

3 Fiscal 2016 v s prior year Financial Revenue up 49.4% (CC %) from $573.1 million to $856.0 million Adjusted EBITDA up 58.6% (CC 65.9%) from $130.7 million to $207.3 million Adjusted Net Income up 61.9% from $41.6 million to $67.5 million Adjusted EPS 2 up 54.8% from $0.42 to $0.65 Operational Average full time equivalent students (FTEs) up 56.2% from 22,286 to 34,819 Capacity up 56.8% from 31,358 seats to 49,177 seats Revenue/FTE down 2.6% (CC 0.3% down) from $25.1k to $24.4k 1 CC denotes Constant Currency throughout 2 Adjusted EPS refers to Adjusted Diluted EPS Fiscal year 2016 results presentation Nord Anglia Education 3

4 Creating an education for the Fiscal year 2016 results presentation Nord Anglia Education 4

5 The schools organization of being the world s leading premium Organic FTE growth ~8% increase from Sept 2015 to Sept 2016 Employer of choice ~38 applications for every teaching position Outstanding academic outcomes Nord Anglia Education students accepted to 24 of the world s top 30 universities Opportunities for growth Execution of our growth plan and new China bilingual school strategy Fiscal year 2016 results presentation Nord Anglia Education 5

6 Financial Fiscal year 2016 results presentation Nord Anglia Education 6

7 Group summary Q4 FY2016 vs Q4 FY2015 $ millions Q4FY16 (1) Q4FY15 Variance Premium Schools % CC: 36.4% Other Total Revenue % CC: 31.3% Gross Profit % CC: 58.0% Gross Profit Margin 33.4% 28.0% Adjusted EBITDA 6.7 (5.2) Adjusted EBITDA Margin 5.8% (5.7)% Adjusted Net Income (14.6) (23.2) Adjusted EPS (in $) (0.14) (0.22) 1 Q4 ends August 31 Fiscal year 2016 results presentation Nord Anglia Education 7

8 Group summary FY2016 vs FY2015 $ millions FY16 (1) FY15 (2) Variance Premium Schools % CC: 57.5% Other Total Revenue % CC: 54.7% Gross Profit % CC: 59.8% Gross Profit Margin 39.0% 37.9% Adjusted EBITDA % CC: 65.9% Adjusted EBITDA Margin 24.2% 22.8% 1.4% Adjusted Net Income % Adjusted EPS (in $) % 1 Fiscal year ends August 31 2 FY15 figures reflect prior year adjustments (for additional information, see our annual report on Form 20-F filed with the SEC on November 29, 2016) Fiscal year 2016 results presentation Nord Anglia Education 8

9 FY2016 premium schools Revenue 1 $m (19.0) (49.7) FY15 actual 1 FY15 FX impact FY15 acquisitions FY15 CC ex acquisitions FY16 growth ex acquisitions FY16 growth from acquisitions FY16 actual 1 Excludes Other revenue. FY2015 premium schools revenue revised for prior year adjustments (for additional information, see our annual report on Form 20- F filed with the SEC on November 29, 2016) Fiscal year 2016 results presentation Nord Anglia Education 9

10 China FY2016 Revenue $197.3m from $183.2m +7.7% +12.3% CC Adj. EBITDA $85.8m from $84.6m +1.3% +5.8% CC 5,228 FTEs 1 1 Capacity 7,756 5,820 9,052 Commentary Revenue/FTE $33.9k down from $35.0k: Negative FX impact from stronger USD Stronger growth in lower price schools Adjusted EBITDA Margin 43.5% down from 46.2%: New employment related taxes and mix shift to lower price schools FY2015 FY Average FTEs and Average Capacity excludes NACIS Fiscal year 2016 results presentation Nord Anglia Education 10

11 Europe FY2016 Revenue $211.8m from $133.3m +58.8% +67.5% CC Adj. EBITDA $41.9m from $16.9m % % CC 4,624 6,084 FTE Capacity 6,679 8,617 Commentary Revenue/FTE $31.7k up from $28.8k: Acquisition of College du Leman Offset by negative FX impact from stronger USD Adjusted EBITDA Margin 19.8% up from 12.7%: Acquisition of College du Leman Ramp-up of Aubonne School FY2015 FY2016 Fiscal year 2016 results presentation Nord Anglia Education 11

12 Middle East FY2016 Revenue $87.2m from $68.6m +27.2% +27.2% CC 4,344 5,251 FTE Capacity 5,302 5,851 Adj. EBITDA $17.5m from $9.0m +95.6% +95.6% CC Commentary Revenue/FTE $16.4k up from $15.8k: Tuition fee increases Stronger growth in higher price schools Adjusted EBITDA Margin 20.1% up from 13.1%: Higher utilization rates Ramp-up of Dubai School FY2015 FY2016 Fiscal year 2016 results presentation Nord Anglia Education 12

13 South East Asia FY2016 Revenue $130.4m from $91.6m +42.3% +49.9% CC Adj. EBITDA $41.9m from $27.0m +55.3% +64.7% CC 5,274 8,507 FTE Capacity 7,505 12,150 Commentary Revenue/FTE flat at $17.4k: Tuition fee increases Offset by negative FX impact and stronger growth in lower price schools Adjusted EBITDA Margin 32.1% up from 29.4%: Tuition fee increases Continued fill of Vietnam Schools FY2015 FY2016 Fiscal year 2016 results presentation Nord Anglia Education 13

14 North America FY2016 Revenue $224.3m from $82.6m % % CC Adj. EBITDA $59.7m from $23.0m % % CC 2,816 3,760 FTE Capacity 9,513 13,507 Commentary Revenue/FTE $23.6k down from $29.3k: Impact of acquisitions, in particular Mexico Timing of acquisition in FY2015 Adjusted EBITDA Margin 26.6% down from 27.8%: New Chicago campus opening Acquisitions and increased rent from sale and leaseback FY2015 FY2016 Fiscal year 2016 results presentation Nord Anglia Education 14

15 Balance sheet & cash flow Highlights Q4 FY2016 Net Debt $765.7m 1 LTM Q4 FY2016 Consolidated EBITDA PF $200.4m 2 Negative EBITDA impact from FX, new Chicago school and sale and leaseback Net Leverage 4.8x 4.4x 3.8x Summary cash flow Twelve months ended August 31, ($ millions) Cash generated from operations Payment of loan/bond expenses (5.0) (29.3) Interest paid (62.5) (31.2) Tax paid (28.9) (19.9) Net cash generated from operating activities Acquisition consideration (33.6) (647.1) Sale and leaseback gross proceeds Capital expenditures and other (93.2) (61.9) LTM Q3FY15 LTM Q4FY15 LTM Q4FY16 Target net leverage: x 1. Net debt calculated as principal debt outstanding including capital leases less cash 2. LTM FY16 Consolidated EBITDA pro forma the sale and leaseback Net cash generated from/(used in) investing activities Net cash generated from/(used in) financing activities Net increase in cash and cash equivalents Exchange losses on cash and cash equivalents Cash and cash equivalents at end of the period (including overdrafts) 40.2 (709.0) (11.5) (7.8) (17.8) Fiscal year 2016 results presentation Nord Anglia Education 15

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17 organic enrollment for FY17 and in year growth Sept 2015 Sept 2016 Nov 2016 Organic enrollment growth for start of FY17 North America 9,435 9,886 9,932 FY17 organic in-year enrollment growth to date South East Asia Middle East Europe 7,295 5,264 8,190 8,241 5,611 5,627 Growing ahead of market by an average of Positive trends on inquiries and visits in FY2017 China Bilingual 6,456 6,856 6, China 5,727 5,858 5, Excludes Nord Anglia Chinese International School, Shanghai Fiscal year 2016 results presentation Nord Anglia Education 17

18 for FY2017 Nord Anglia Education is updating its revenue outlook for FY2017 to reflect the strengthening of the USD post the US Presidential election as follows: Revenue Adjusted EBITDA Prior FY2017 outlook as of Oct 10, 2016 Updated FY2017 outlook as of Nov 29, 2016 $925 $945 million $910 $930 million $207 $217 million $207 $217 million Adjusted Net Income $67 $72 million $67 $72 million Adjusted EPS 1 $0.64 $0.69 $0.64 $ Diluted weighted average shares of approximately million 18

19 allocation outlook FY2017 ~$11m Final payments for expansion for September 2016 Further expansion during FY2017 in existing Hong Kong, Beau Soleil and Orlando ~$22m New Bangkok campus New Hong Kong campus New school Abu Dhabi opening Sept ~$200m+ Target to deploy available capital ~$28m in maintenance capex and ~$4m one-off systems project capex Fiscal year 2016 results presentation Nord Anglia Education 19

20 Fiscal year 2016 results presentation Nord Anglia Education 20

21 Our of schools 8 Schools 10 Schools Czech Republic The English International School Prague Hungary The British International School Budapest Poland The British School Warsaw Slovakia The British International School Bratislava Spain International College Spain Switzerland Collège Beau Soleil, Villars-Sur-Ollon Collège Champittet, Nyon Collège Champittet, Pully Collège du Léman La Côte International School, Aubonne China Léman International School, Chengdu Nord Anglia Chinese International School Shanghai The British International School Shanghai, Pudong The British International School Shanghai, Puxi The British School of Beijing, Sanlitun The British School of Beijing, Shunyi The British School of Guangzhou Hong Kong S.A.R Nord Anglia International School Hong Kong 11 Schools United States of America British International School of Boston British International School of Chicago, Lincoln Park British International School of Chicago, South Loop British International School of Houston British International School of Washington Nord Anglia International School New York North Broward Preparatory School The British International School of Charlotte The Village School Windermere Preparatory School Mexico Instituto San Roberto 6 Schools United Arab Emirates Nord Anglia International School Dubai The British International School Abu Dhabi Qatar Compass International School, Al Khor Compass International School Doha, Rayyan Compass International School Doha, Gharaffa Compass International School Doha, Madinat Khalifa 8 Schools Cambodia Northbridge International School Cambodia Singapore Dover Court International School Singapore Thailand Regents International School Pattaya St Andrews International School Bangkok Vietnam British International School, Hanoi 49,400 British International School, Ho Chi Minh City British Vietnamese International School, Hanoi British Vietnamese International School, Ho Chi Minh City 21

22 Our path to becoming the organization premium schools Student Enrollment 37,026 34,819 Fiscal year 2016 results presentation Nord Anglia Education 22,286 17,313 4,010 4,282 6,166 7,054 8,180 10,279 No. of schools: Aug 31, FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Nov 18, Fiscal year 2016 results presentation Nord Anglia Education 22

23 academic outcomes for our students Year on year comparison. % or students achieving 5 A* to C grades IB average Diploma score NAE Average Global Average IGCSE grades at the highest levels of A* or A Students Exceeding Expectations Fiscal year 2016 results presentation Nord Anglia Education 23

24 Lower Margin Higher Greenfield opportunities generate the returns 3-4 years to breakeven years to maturity e.g. Chicago (opened Sept 2015) Not a strategic fit 1-2 years to breakeven years to maturity e.g. Shanghai (opened Sept 2016) 2-3 years to breakeven years to maturity e.g. Dubai (opened Sept 2014) Key factors: Market growth - supply/ demand dynamics EBITDA margin at maturity average breakeven utilization c.30-35% average margin of NORD schools at maturity c.33% Growth Lower Higher 1. Breakeven means Adjusted EBITDA positive 2. Maturity means 80% utilization Fiscal year 2016 results presentation Nord Anglia Education 24

25 Three Months Ended August 31. Twelve Months Ended August 31, $ millions, except share data (unaudited) (unaudited) Revenue Cost of sales (76.6) (65.1) (522.2) (355.8) Gross profit Selling, general & administrative expenses (51.9) (47.7) (192.7) (129.8) Depreciation (0.2) (0.1) (0.8) (0.7) Amortization (4.9) (4.3) (18.7) (13.9) Impairment (1.0) - (1.0) - Other gains / (losses) Exceptional expenses 2.2 (14.3) (8.8) (18.8) Total expenses (37.6) (51.0) (208.6) (150.8) Operating (loss) / profit 0.9 (25.6) Finance income Finance expense (19.3) (25.4) (65.9) (48.7) Net finance expense (19.3) (24.7) (63.6) (46.3) (Loss)/profit before income tax (18.4) (50.3) Income tax credit/(expense) (12.4) (12.5) (Loss)/profit for the period (7.1) (42.9) (Loss)/profit attributable to: Owners of the parent (7.8) (43.4) Non-controlling interest (Loss)/profit for the period (7.1) (42.9) (Loss)/earnings per ordinary share (in dollars) Basic (0.08) (0.42) Diluted (0.08) (0.42) Fiscal year 2016 results presentation Nord Anglia Education 25

26 Three Months Ended Twelve Months Ended August 31, August 31, Full-time equivalent students (average for the period) China 5,889 5,290 5,820 5,228 Europe 6,884 4,668 6,679 4,624 Middle East 5,283 4,463 5,302 4,344 South East Asia 7,676 6,678 7,505 5,274 North America 9,560 2,857 9,513 2,816 Total 35,292 23,956 34,819 22,286 Capacity (average for the period) China 9,242 7,756 9,052 7,756 Europe 8,617 6,084 8,617 6,084 Middle East 5,851 5,251 5,851 5,251 South East Asia 12,185 11,688 12,150 8,507 North America 13,507 3,760 13,507 3,760 Total 49,402 34,539 49,177 31,358 Fiscal year 2016 results presentation Nord Anglia Education 26

27 Three Months Ended Twelve Months Ended August 31, August 31, Utilization (average for the period) China 64% 68% 64% 67% Europe 80% 77% 78% 76% Middle East 90% 85% 91% 83% South East Asia 63% 57% 62% 62% North America 71% 76% 70% 75% Total 71% 69% 71% 71% Revenue per FTE (in $ thousands) China Europe Middle East South East Asia North America Total Fiscal year 2016 results presentation Nord Anglia Education 27

28 Three Months Ended August 31, % Variance $ millions Reported Constant Currency Revenue (segment) Premium Schools China % 28.5% Europe % 52.3% ME % 41.5% SEA % 38.5% North America % 27.0% Total Premium Schools % 36.4% Other (68.1%) (66.3%) Total Revenue % 31.3% Adjusted EBITDA (segment) Premium Schools China % 43.8% Europe (1.2) (6.2) 80.7% 80.6% ME (0.1) (3.2) 98.8% 98.8% SEA % 127.0% North America (4.9) (0.3) (1,329.8%) (1,471.6%) Total Premium Schools % 326.6% Other (10.8%) 1.9% Central and regional expenses (9.6) (10.0) 3.0% 0.5% Adjusted EBITDA 6.7 (5.2) 234.0% 228.2% Fiscal year 2016 results presentation Nord Anglia Education 28

29 Twelve Months Ended August 31, % Variance $ millions Reported Constant Currency Revenue (segment) Premium Schools China % 12.3% Europe % 67.5% ME % 27.2% SEA % 49.9% North America % 172.0% Total Premium Schools % 57.5% Other (64.1%) (62.2%) Total Revenue % 54.7% Adjusted EBITDA (segment) Premium Schools China % 5.8% Europe % 169.9% ME % 95.6% SEA % 64.7% North America % 159.1% Total Premium Schools % 60.2% Other (67.9)% (65.6)% Central and regional expenses (40.0) (31.3) 27.6% 30.8% Adjusted EBITDA % 65.9% Fiscal year 2016 results presentation Nord Anglia Education 29

30 Three Months Ended August 31, Twelve Months Ended August 31, $ millions Profit/(loss) the period (7.1) (42.9) Income tax (credit)/expense (11.3) (7.4) Net financing expense Exceptional items (2.2) Other losses (18.2) (15.4) (13.4) (12.4) Amortization Impairment Depreciation Depreciation in Cost of Sales EBITDA (2.9) (10.5) Loss /(Gain) on disposal of PP&E 1.0 (0.1) Share based payments Greenfield pre-opening costs Rollout of Juilliard program Rollout of MIT program Global campus expedition facility Debt Waiver fee Sarbanes-Oxley project China expat taxes Other (0.1) Adjusted EBITDA 6.7 (5.2) Fiscal year 2016 results presentation Nord Anglia Education 30

31 Three Months Ended August 31, Twelve Months Ended August 31, $ millions Adjusted EBITDA 6.7 (5.2) Depreciation (10.7) (11.9) (46.5) (34.6) Net financing expense (19.3) (24.7) (63.6) (46.3) Financing expense adjustments (4.7) 9.7 Income tax (credit)/expense (12.4) (12.5) Tax adjustments (3.2) 2.0 (10.5) (4.2) Non-controlling interest (0.7) (0.5) (2.1) (1.2) Adjusted Net (Loss)/Income (14.6) (23.2) Adjusted (Loss)/earnings per ordinary share (in dollars) Basic (0.14) (0.22) Diluted (0.14) (0.22) Fiscal year 2016 results presentation Nord Anglia Education 31

32 Fiscal year 2016 results presentation Nord Anglia Education 32