estácio: unisãoluis´s presentation - mergers and acquisitions
DESCRIPTION
Estácio: UniSãoLuis´s Presentation - Mergers and AcquisitionsTRANSCRIPT
Faculdade São Luís Extraordinary Shareholders’ Meeting – Mergers and Acquisitions
June 15, 2012
2
Social and Economic Dynamics – São Luís
2009 GDP – IBGE
Total: R$15.3 billion
Per capita income: R$15,381
Working-age population: 44%
Working population: 35%
Unemployment rate: 22%
919
928
930
942
945
958
05 06 07 08 09 10
Population
Brazil São Luís
São Luís is Maranhão’s main economic center. Its expansion resulted from the installation of major economic projects, such as the Itaqui Port and the Ponta da Madeira Port Complex (CPPM), in addition to the consolidation of the Industrial District. The combination of these projects have vitalized the local economy.
GDP Breakdown by Sector
> The broad base of São Luís’s pyramid projects future growth in the number of target people (“supply of students for post-secondary education”)
2000 IBGE Census
0.2%
41.2%
44.2%
14.4%
Agribusiness Industry
Services Public Adm.
94%
6%
Urban Rural
3
Northeast Region Growth
Low penetration of students enrolled in the Northeastern region points to high growth potential
Penetration of students enrolled in the target population (aged between 18 and 35)
Source: IPC Target / Estácio
4
1.339
1.914
2.049
1.963
1.979
1.977 2.484
3.6163.716
02 03 04 05 06 07 08 09 10
Growth and Competition
Student Base – FACSÃOLUÍS
*latest information available
IES – Local Market
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
2002 2003 2004 2005 2006 2007 2008 2009 2010
UNICEUMA
UFMA
FAMA Kroton
UEMA
FACSÃOLUÍS
CEST
Fac.Pitagoras
UNDB
FACAM-MA
Outros
Market Share
5,0% 4,8% 4,7%5,6%
6,9% 6,8%
8,1% 7,8%7,2%
8,5%
10,9% 10,6%
05 06 07 08 09 10*
Total Geral Total Privadas
IES Market – São Luís (thousand students)
15,3 15,7 15,0 15,5 19,5 19,6
24,2 25,2 27,5 29,233,3 35,0
05 06 07 08 09 10*
Total Públicas Total Privadas
5
Executive Summary
The Company
• Approximately 4,000 students in 2012
• CAGR 05-10 of 13.6% for Fac. São Luís vs. 7.1% for other private IES (post-secondary education) institutions
• For-profit IES and ProUni
• 1 campus located downtown São Luís
• Average Net Ticket (2011): R$432
• Entry the São Luís market, expanding the portfolio of on-campus programs and transforming the institution into a distance learning (EAD) center
• Excellent infrastructure
• Synergies: Shared Services Center (CSC), teaching activities, marketing
Strategic Rationale
6
Valuation Premises
Financial Operational
• Nominal flow
• Average inflation: 5.1%
• WACC: 15%
• Perpetuity Growth (g): 4.5%
• Base date: June 30, 2012
• Average Student Base: CAGR 2011-16 of 4.3%, which should increase as of 2014 due to the new courses approved (note: the base excludes distance learning)
• Average Ticket: Pass through of projected inflation only.
• Cost of Services: 10 p.p. gain in faculty costs by 2016, reflecting the implementation of the Estácio teaching model.
• SG&A: synergy gains from back office reduction and 13 p.p. reduction in the Administration payroll by 2016; 8 p.p reduction in PDA to 5% of net revenues
• CAPEX: higher investments in 2012 and 2013 to cover IT and systems integration costs, and reduction to 3.5% of net revenues in 2014.
7
Valuation
Result
• Base date 06/30/2012
• 5-year flow: R$16.2 M
• Perpetuity: R$65.7 M
• Total EV: R$ 81.9 M
• Proposal: R$28 M R$7,000/student
• IRR: 21.4%
2011A 2012E 2013E 2014E 2015E 2016E
R$ million CAGR
Average student base 3884 3,972 3,987 4,147 4,335 4,788 4.3%
Base growth 2.3% 0.4% 4.0% 4.5% 10.4%
Net revenue 19.5 22.4 23.5 25.4 27.5 31.4 Cost of services (7.0) (8,1) (8,0) (7,9) (7,9) (8,1)
Gross profit 8.7 9.9 11.8 14.7 17.7 21.0 SG&A (12.3) (14.1) (11.8) (9.9) (8.8) (9.7)
EBITDA 0.2 0.3 3.7 7.6 10.9 13.5 (-) IR + CSLL (0.0) (0.0) (0.1) (0.1) (0.2) (+) VCG (1.0) (0.5) (0.5) (0.5) (0.6) (-) CAPEX (2.3) (1.7) (0.9) (1.0) (1.1) Perp.
Free Cash Flow (3.0) 1.5 6.1 9.2 11.6 119.1
PV - Free Cash Flow (2.5) 1.3 4.6 6.1 6.7 65.7
2011A 2012E 2013E 2014E 2015E 2016E
Net revenue 100% 100% 100% 100% 100% 100%
Cost of services -36.0% -36.0% -34.0% -31.3% -28.6% -25.9%
Gross profit 44.4% 44.4% 50.1% 57.8% 64.3% 67.0%
SG&A -62.8% -62.8% -50.3% -38.8% -31.9% -31.0%
EBITDA Margin 1.2% 1.2% 15.7% 29.9% 39.5% 43.1%
(-) CAPEX 0.0% -10.2% -7.1% -3.5% -3.5% -3.5%