estácio: 1q11 conference call presentation
DESCRIPTION
Estácio: 1Q11 Conference Call PresentationTRANSCRIPT
1Q11 RESULTS
Eduardo AlcalayCEO
May, 2011
Rogério MelziCFO and Investor Relations Officer
HIGHLIGHTS
2
Addition of 73,500 new students (+24.4%)
Expansion of 11.6% in the total student base
Greater efficiency in the main cost and expense lines
Start of consolidation phase, with synergic and strategic acquisitions
Expansion of the student base following the second cycle of RECORD-HIGH ENROLLMENT
RESULTS’ HIGHLIGHTS
3
Continued growth and margin gains:EBITDA margin expansion of 2 p.p.
Main Indicators (R$ MM) 1Q10 1Q11 Change
Net Revenue 256.0 275.8 7.7%
Recurring EBIT 32.3 38.7 19.8%
Recurring EBIT Margin 12.6% 14.0% 1.4 p.p.
Recurring EBITDA 39.6 47.9 21.0%
Recurring EBITDA Margin 15.5% 17.4% 1.9 p.p.
Net Income 25.6 28.7 12.1%
Recurring Net Income 31.3 33.1 5.8%
RECORD ENROLLMENT
4
Improvement in Brand Image
Perception of Quality/Excellence
Management – Engagement/Discipline
Estacio Cup and Variable Payment
GROWTH IN ENROLLMENT
48.9
61.5
10.2
12.0
1Q10 1Q11
59.1
73.5
STUDENT ENROLLMENT(In thousand students)
Distance Learning
On-Campus
Total Student
+24.4%
OPERATING PERFORMANCE – STUDENT BASE
5
200.0 210.5
16.430.9
1Q10 1Q11
+11.6%
STUDENT BASE – EDUCATIONAL SEGMENT(In thousand students)
31,000 Distance Learning students at the end of 1Q11
25% growth in FIES student base from 4Q09, totaling 8,100 students in 1Q11
216.4
241.4
+5.3%
Distance Learning
On-Campus
Total Student Base
OPERATING REVENUE
6
Growth of 5.3% in the on-campus average ticket
Passthrough of inflation in the on-campus average ticket
256.0 275.8
109.4122.4
1Q10 1Q11
OPERATING REVENUE (In R$ million)
365.4
398.2
(R$) 1Q10 1Q11 Change
Average On-Campus Ticket 412.9 434.8 5.3%
Average Distance Learning Ticket 166.7 171.4 2.8%
+7.7%
+9.0%
* Average on-campus ticket excluding the acquisitions of FAA and FAL.
Net Revenue Deductions Gross Revenue
CASH COSTS
7
Vertical Analysis (% Net Operating Revenue) 1Q10 1Q11 Change
Recurring Cash Cost* -62.0% -61.2% +0.8 p.p.
Personnel -39.1% -38.4% +0.7 p.p.
Brazilian Social Security Institute (INSS) -8.0% -8.8% -0.8 p.p.
Rentals, Condominium Fees and Municipal Property Tax
-9.2% -9.1% +0.1 p.p.
Textbooks Materials -0.9% -1.1% -0.3 p.p.
Others -4.7% -3.7% +1.0 p.p.
* Cost of Services excluding non recurring and depreciation.
Perssonnel eficiency offsets Brazilian Social Security Institute (INSS) step-up
Budget Matrix reflects on Rentals and Others
Textbooks Materials: new internal structure
SELLING, GENERAL & ADMINISTRATIVE EXPENSES (SG&A)
8
Vertical Analysis (% Net Operating Revenue)
1Q10 1Q11 Change
SG&A* -23.8% -23.5% +0.3 p.p.
Selling Expenses -9.6% -10.5% -0.9 p.p.
Provision for Doubtful Debts -2.0% -1.9% +0.1 p.p.
Marketing -7.6% -8.6% -1.0 p.p.
General Administrative Expenses* -14.3% -13.1% +1.2 p.p.
Personnel and Payroll charges -6.2% -6.5% -0.3 p.p.
Others -8.1% -6.6% +1.5 p.p.
* SG&A Expenses excluding non recurring and depreciation.
G&A efficiency offsets Maketing investment
PROVISION FOR DOUBTFUL DEBTS AND RECEIVABLES
9
Accounts Receivable (R$ MM) 1Q10 2Q10 3Q10 4Q10 1Q11
Gross Accounts Receivable 208.8 249.9 256.3 201.8 228.8
FIES 4.6 5.4 17.5 15.3 21.2
Tuition Monthly Fees 179.5 220.0 207.9 168.2 184.2
Financed Tuition 24.7 24.6 30.9 18.3 23.5
Cards Receivable 1.1 6.0 11.8 6.9 12.8
Checks Receivable 15.5 16.8 16.2 6.9 6.6
Fees Receivables 8.2 1.8 2.9 4.4 4.1
Provision for Doubtful Debts (85.1) (102.2) (107.3) (45.4) (49.9)
Net Accounts Receivable 123.7 147.7 148.9 156.4 179.0
(-) FIES (4.6) (5.4) (17.5) (15.3) (21.2)
Net Accounts Receivable Ex. FIES 119.1 142.3 131.5 141.1 157.8
Days Receivables Ex. FIES* 43 51 47 50 55
* Calculated based on net revenue in the last 12 months
EBITDA AND NET INCOME
10
17.4%
15.5%
EBITDA(In R$ million)
NET INCOME(In R$ million)
Recurring EBITDA Margin Recurring EBITDA Recurring Net IncomeRecurring Net Margin
31.3 33.1
1Q10 1Q11
12.0%12.2%
+21.0%
+5.8%39.6
47.9
1Q10 1Q11
CASH FLOW
11
1Q11 CASH FLOW(In R$ million)
Recurring Operational Cash Flow
¹ Financial Result except Operating Financial Result (-R$4.2 million) + Financing (+R$1.8 million)² Composition of Investments: Acquisition Goodwill (-R$15.5 million) + Fixed Assets at FAA and FAL (-R$3.2 million) + Expansion CAPEX (-R$5.9 million)
12
46 Courses
50 Courses
9 Courses7 Courses
Grade 3 Grade 4 Grade 5 No grade
COURSES EVALUATION - ON-SITE VISITS 2010/11
EVOLUTION IN QUALITY – REGULATORY ASSESSMENTS
13
OUTLOOK
Efficiency Gains
Acquisitions
Technology
Quality
• Generate margin expansion through better control of costs and
continued organic growth
• Value accretion through scalability and assets that complement the
current portfolio
• Technology as a key competitive advantage: distribution of content
and relations with students
• Ensure a high-quality education on a sustainable basis on a
national scale
• Content
• Tools and processes
• People
14
IR CONTACTS
This presentation may contain forward-looking statements concerning the industry’s prospects and Estácio Participações’ estimated financial and operating results;these are ere projections and. as such. are based solely on the Company management’s expectations regarding the future of the business and its continuousaccess to capital to finance Estácio Participações’ business plan. These considerations depend substantially on changes in market conditions. government rules.competitive pressures and the performance of the sector and the Brazilian economy as well as other factors and are. therefore. subject to changes withoutprevious notice. We are a holding company. and our only assets are our interests in SESES. STB. SESPA. SESCE. SESPE. SESAL. SESSE. SESAP. UNEC. SESSA andIREP. and we currently hold 99.9% of the capital stock of each of these subsidiaries. Considering that the Company was incorporated on March 31 2007. theinformation presented herein is for comparison purposes only. on a proforma unaudited basis. relative to the first three months of 2007. as if the Company hadbeen organized on January 1 2007. Additionally. information was presented on an adjusted basis. in order to reflect the payment of taxes on SESES. our largestsubsidiary. which from February 2007. after becoming a for-profit company. is subject to the applicable taxation rules applied to the remaining subsidiaries.except for the exemptions arising out of the PROUNI – University for All Program (“PROUNI”). Information presented for comparison purposes should not beconsidered as a basis for calculation of dividends. taxes or for any other corporate purposes.
Investor Relations:
Flávia de Oliveira
Email: [email protected]
Phone: +55 (21) 3311-9789
Fax: +55 (21) 3311-9722
Address: Av. Embaixador Abelardo Bueno, 199 – Office Park – 6th floorCEP: 22.775-040 – Barra da Tijuca – Rio de Janeiro – RJ – Brazil
Website: www.estacioparticipacoes.com/ir