Nord Anglia Education October 2016 Update
October 10, 2016
1
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.
2
student enrollment for 2016/17 3
organic enrollment growth for the start of 2016/17
FTEs1
446 2,225
September 2015
Same School growth
China DC Schools
2
September 2016
average 4% tuition fee increases implemented across the group for 2016/17 1 2
Full time equivalent students. As at September 2016 China Dual Curriculum Schools comprises Nord Anglia Chinese International School, Shanghai (‘NACIS’) 4
capacity expansion
Capacity Fiscal 2017 starting utilization 6
(
excluding NACIS)
New build expansion:
3,450
NACIS, Shanghai seats
2,365
New campus British International School of Houston seats (net increase seats)
September 2015 Existing school expansion
New build Schools
September 2016
seats existing school expansion across 5 regions
5
dual curriculum strategy 6
Chinese dual curriculum school successful opening
2,000
25
1,800 1,600
20
Average FTE’s
1,200
15
1,000 800
10
600 400
5
Adjusted EBITDA USDm
1,400
NACIS opened September 2016
446 starting FTEs / 2,250 seat capacity (20% utilization)
Investment ~$31m
Expected breakeven1 year 1 / maturity2 year 3
~40%+ adjusted EBITDA margin expected at maturity
ROI3 74% at maturity 1 2 3
Breakeven measured at Adjusted EBITDA level Maturity means 80% utilization. ROI calculated as Adjusted EBITDA / total capital investment, including capital expenditure to opening and operating losses prior to break even, at maturity.
200 -
-
Year 1 FY17
Enrolment
Year 3 FY19F
Adjusted EBITDA 7
market with strong fundamental drivers
Key drivers of private K12 education growth in China: Parents prioritize child’s education
Shanghai premium dual curriculum market1: Market size
Growth of school age population Increasing disposable income
Growth rate
Access to foreign universities Government support for private investment in education
Students 1 2
Private dual curriculum schools charging more than $10,000 per annum in tuition. Company estimates 2015.
Establishing dedicated
Jian Tang - CEO Nord Anglia Chinese International Schools
Corporate Development Team
15 years experience as Managing Director Nord Anglia International Schools in China
Co-founder of the first Nord Anglia School in China – British International School Shanghai
Opened or integrated all existing Nord Anglia schools in China
Strong knowledge and experience of K-12 education in China
Education Team
HR Team
Finance Team
ITIT Team Team
Marketing and Communications Team
Expected cost to establish dedicated China Dual Curriculum team in fiscal 2017 (to be added back in calculating Adjusted EBITDA)
9
and roll out plan
2016/17
2017/18
2018/19
2019/20
NACIS Shanghai opened Sept. 2016
Launch one new additional school
Launch two new additional schools
Launch five new additional schools
Schools
Schools
Schools
Schools
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performance 11
China
Commentary
organic FTE growth
seats of capacity added to Guangzhou
FTEs
Capacity 9,242
8,926
5,727
5,858
average tuition increases
Excludes new dual curriculum school September 2015
September 2016
12
Europe
Commentary
FTE
Capacity 9,691
organic FTE growth seats of capacity added to
8,617
6,456
6,856
Madrid, Warsaw, Bratislava and Budapest
average tuition increases
September 2015
September 2016
13
Middle East
Commentary
FTE
Capacity 6,187
5,851
organic FTE growth
5,611
5,264
seats of capacity added to Dubai and Al Khor
Tuition increases subject to government approval
September 2015
September 2016
14
South East Asia
FTE
Commentary
Capacity 12,561
12,097
organic FTE growth
seats of capacity added to
8,190 7,295
Singapore and Bangkok
average tuition increases
September 2015
September 2016
15
North America
FTE
Commentary
Capacity 14,882
13,507
organic FTE growth seats of capacity added to
9,435
9,887
Houston (new campus) and Miami
average tuition increases
September 2015
September 2016
16
fiscal 2017 17
Nord Anglia Education is providing its full year outlook for fiscal 2017: FY17 guidance Revenue
$925 – $945 million
Adjusted EBITDA
$207 – $217 million
Adjusted Net Income Adjusted EPS1
1.
$67 – $72 million $0.64 – $0.69
Diluted weighted average shares of approximately 104.5 million
18
Adjusted EBITDA
212.0
207.5
FY16 Midpoint of Guidance
FX (Constant Currency)
Organic EBITDA growth
SLB & new Houston rent
New Global Campus Expenses
FY17 Midpoint of Guidance 19
20
