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2Q11 Conference Call Presentation
 

2Q11 Conference Call Presentation

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    2Q11 Conference Call Presentation 2Q11 Conference Call Presentation Presentation Transcript

    • 2Q11 RESULTSEduardo Alcalay Rogério MelziCEO CFO and Investor Relations Officer August 2011
    • HIGHLIGHTS Estácio is going through its best time in recent years Resume of our on campus student base organic growth Acquisitions concluded Several approvals of new courses obtained In loco visits with excellent grades Launch of two greenfields Preparation for the launch of the tablets for the second half of 2011 2
    • NEW DISCLOSURES We welcome the markets demand for greater transparency Receivables Acquisitions Non recurring items Debt 3
    • RESULTS’ HIGHLIGHTS Strong fundamentals, strong results 2Q11 ex.Main Indicators (R$ MM) 2Q10 2Q11 Change Change acquisitionsNet Revenue 258.2 289.9 12.3% 277.2 7.4%Recurring EBIT 11.0 17.1 55.5% 16.4 49.1%Recurring EBITDA 18.7 26.5 41.7% 25.6 36.9%Recurring EBITDA Margin 7.2% 9.1% 1.9 p.p. 9.2% 2.0 p.p. 1H11 ex.Main Indicators (R$ MM) 1H10 1H11 Change Change aquisiçõesNet Revenue 514.2 565.7 10.0% 548.5 6.7%Recurring EBIT 43.3 55.8 28.9% 54.7 26.3%Recurring EBITDA 58.4 74.3 27.2% 73.0 25.0%Recurring EBITDA Margin 11.4% 13.2% 1.8 p.p. 13.3% 1.9 p.p. 4
    • STUDENT BASEON CAMPUS UNDERGRADUATE STUDENT BASE¹ DISTANCE LEARNING STUDENT BASE (‘000 students) (‘000 students)210 40 201.8 34.0200 30 26.2190 186.9 182.8 181.6 20.9180 20 173.1170 9.6 10160150 0 1H09 2H09 1H10 2H10 1H11 2H09 1H10 2H10 1H11 ¹ Excluding acquisitions 1H11 We reached the inflection point at the on campus student base (ex. acquired companies) Early Renewal Program anticipates enrollment process for veterans More than 600 courses already approved by MEC launches planned by 2012 Mentoring and support structures reinforce growth in online Distance Learning 5
    • OPERATING PERFORMANCE – STUDENT BASE STUDENT BASE – EDUCATIONAL SEGMENT On campus Acquisitions 1H11 (‘000 students) Distance Learning Total Student Base 238.7 214.8 +11.1% 10.0 20.9 34.0 193.9 194.7 1H10 1H1111.1% increase on the student base due to distance learning segment and acquisitionsOn campus student base reverses downward trend and grows 0.4% this half-year, and 4.6% overDecember 2010. 6
    • OPERATING REVENUE OPERATING REVENUE   (In R$ million) On campus average ticket grows with inflation +10.5% 407.8 391.6 Discounts and new courses launch reduce the Distance 369.2 Learning average ticket 117.9 114.3 111.0 (R$) 2Q10 2Q11 Chg +12.3% Average On-Campus Ticket 423.8 443.7 4.7% 258.2 289.9 277.2 Average On-Campus Ticket 423.8 444.8 4.9% Ex. Acquisitions Average Distance Learning 2Q10 2Q11 2Q11 173.8 170.6 -1.9% Ticket Consolidated ex. Aquisitions 1H11Net Revenue Deductions Gross Revenue 7
    • CASH COSTS 2Q11 Vertical Analysis 2Q11 ex. 2Q10 2Q11 Change Change (% of Net Operating Revenue) acquisitions Recurring Cash Cost* -69.8% -67.6% 2.2 p.p. -67.6% 2,2 p.p. Personnel -44.4% -41.5% 2.9 p.p. -41.3% 3,1 p.p. Brazilian Social Security Institute -8.8% -9.2% -0.4 p.p. -9.2% -0,4 p.p. (INSS) Rentals, Condominium Fees and -9.4% -8.9% 0.5 p.p. -9.0% 0,4 p.p. Municipal Property Tax Textbooks Materials -1.7% -3.3% -1.6 p.p. -3.4% -1,7 p.p. Others -5.5% -4.7% 0.8 p.p. -4.7% 0,8 p.p.*Cost of Services excluding non recurring and depreciation. More efficient management of personnel and other costs offset the step-up of the Social Security and Textbooks Materials costs rise 8
    • CASH COSTS 1H11Vertical Analysis 1H11 ex. 1H10 1H11 Change Change(% of Net Operating Revenue) acquisitions Recurring Cash Cost* -65.9% -64.9% 1.0 p.p. -64.8% 1.1 p.p. Personnel -41.8% -40.4% 1.4 p.p. -40.1% 1.7 p.p. Brazilian Social Security Institute -8.4% -9.1% -0.7 p.p. -9.1% -0.6 p.p. (INSS) Rentals, Condominium Fees and -9.3% -9.0% 0.3 p.p. -9.1% 0.3 p.p. Municipal Property Tax Textbooks Materials -1.3% -2.2% -0.9 p.p. -2.3% -1.0 p.p. Others -5.1% -4.2% 0.9 p.p. -4.2% 0.9 p.p.*Cost of Services excluding non recurring and depreciation. 9
    • SELLING, GENERAL & ADMINISTRATIVE EXPENSES 2Q11Vertical Analysis 2Q11 ex. 2Q10 2Q11 Change Change(% of Net Operating Revenue) acquisitions SG&A* -24.6% -23.6% 1.0 p.p. -23.5% 1.0 p.p. Selling Expenses -10.0% -11.0% -1.0 p.p. -11.0% -1.0 p.p. PDA -5.8% -6.0% -0.2 p.p. -6.0% -0.1 p.p. Marketing -4.1% -4.9% -0.8 p.p. -5.0% -0.9 p.p. G&A Expenses* -14.6% -12.6% 2.0 p.p. -12.4% 2.2 p.p. Personnel and Payroll charges -6.6% -5.6% 1.0 p.p. -5.7% 1.0 p.p. Third-party services -3.6% -2.9% 0.8 p.p. -3.0% 0.6 p.p. Machinery rental and leasing -0.3% -0.1% 0.2 p.p. 0.0% 0.3 p.p. Other Operating Renevues 1.3% 0.8% -0.5 p.p. 0.8% -0.5 p.p. Provision for Contingencies -0.9% -0.2% 0.7 p.p. -0.2% 0.7 p.p. Others -4.5% -4.7% -0.2 p.p. -4.5% 0.0 p.p.*SG&A Expenses excluding non recurring and depreciation. 10
    • SELLING, GENERAL & ADMINISTRATIVE EXPENSES 1H11Vertical Analysis 2H11 ex. 2H10 2H11 Change Change(% of Net Operating Revenue) acquisitions SG&A* -24.2% -23.2% 1.0 p.p. -23.2% 1.0 p.p. Selling Expenses -9.7% -10.7% -1.0 p.p. -10.8% -1.0 p.p. PDA -3.9% -4.0% -0.1 p.p. -3.9% 0.0 p.p. Marketing -5.8% -6.7% -0.9 p.p. -6.8% -1.0 p.p. G&A Expenses* -14.4% -12.4% 2.0 p.p. -12.4% 2.0 p.p. Personnel and Payroll charges -6.4% -5.6% 0.8 p.p. -5.7% 0.7 p.p. Third-party services -4.3% -3.3% 1.0 p.p. -3.4% 0.9 p.p. Machinery rental and leasing -0.3% -0.2% 0.1 p.p. -0.2% 0.1 p.p. Other Operating Renevues 1.0% 0.7% -0.3 p.p. 0.7% -0.3 p.p. Provision for Contingencies -0.4% 0.5% 0.9 p.p. 0.5% 0.9 p.p. Others -3.9% -4.5% -0.6 p.p. -4.4% -0.5 p.p.*SG&A Expenses excluding non recurring and depreciation. 11
    • PDA AND RECEIVABLES 2Q11 2Q11 ex. Accounts Receivable (R$ MM) 2Q10 3Q10 4Q10 1Q11 Consolidated aquisitions²Gross Accounts Receivable 252.4 264.1 210.9 234.4 273.0 250.4FIES 5.4 17.5 15.3 21.2 25.4 25.6Tuition Monthly Fees 215.3 190.4 157.4 164.6 198.7 178.1Cards Receivable 6.0 11.8 6.9 12.8 10.8 10.2Agreement Receivables 23.9 41.5 26.9 31.7 32.4 30.8Fees Receivables 1.8 2.9 4.4 4.1 5.7 5.7Credits to Identify (2.4) (7.8) (9.2) (5.5) (6.8) (7.4)Provision for Doubtful Accounts (102.2) (107.3) (45.4) (49.9) (55.8) (44.6)Net Accounts Receivable 147.7 148.9 156.3 179.0 210.5 198.5 (-) FIES (5.4) (17.5) (15.3) (21.2) (25.4) (25.6)Net Accounts Receivable Ex. FIES 142.4 131.5 141.0 157.8 185.0 172.9Net Revenues (Last 12 months) 1,010.0 1,008.1 1,016.2 1,036.0 1,119.3 1,050.5Days Receivables Ex. FIES* 51 47 50 55 60 59¹ Calculated based on net revenue in the last 12 months² Acquired companies since 2011: Atual, FAL, FATERN e Academia do Concurso. 12
    • AGING OF RECEIVABLES AND AGREEMENTS Breakdown of accounts receivable by age (R$ millions) 2Q10 % 2Q11 %FIES 5.4 2% 25.4 9%Not yet due 32.9 13% 62.4 23%Overdue up to 30 days 28.6 11% 35.9 13%Overdue from 31 to 60 days 23.4 9% 27.9 10%Overdue from 61 to 90 days 22.6 9% 27.9 11%Overdue from 91 to 179 days 38.6 15% 37.8 14%Overdue more than 189 days 100.8 40% 55.8 20%Total 252.3 100% 273.1 100% Breakdown of agreements by age (R$ millions) 2Q10 % 2Q11 %Not yet due 10.9 40% 19.1 59%Overdue up to 30 days 6.6 25% 4.8 15%Overdue from 31 to 60 days 1.3 5% 1.5 5%Overdue from 61 to 90 days 1.6 6% 1.4 4%Overdue from 91 to 179 days 3.2 12% 2.4 8%Overdue more than 189 days 3.4 12% 3.1 10%TOTAL 26.9 100% 32.4 100% % over Net Accounts Receivable 18% 15% 13
    • PROVISION FOR DOUBTFUL ACCOUNTS Gross increase in Write off of charges Deliquency AdditionalIn R$ millions the provision for Credit risk - FIES and unidentified Total recover provision, net deliquency depositsTuitions and fees 46.1 (22.3) 23.8 0.2 (2.4) 21.6Acquired Companies 1.1 - 1.1 - 1.1TOTAL 47.3 (22.3) 25.0 (2.4) 22.8 Additional provision, AcquiredIn R$ millions 12/31/2010 Write off 06/30/2011 net Companies effectTuitions and fees 45.4 23.8 - (24.6) 44.6Acquired Companies - 1.1 10.0 - 11.2TOTAL 45.4 25.0 10.0 (24.6) 55.8 14
    • NO RECURRING ITEMS (R$ millions) 2Q10 2Q11 2Q11 2Q11 Consolidated Estácio Acquired¹ Costs (0.2) (1.4) (0.8) (0.5) Personnel (0.2) (1.1) (0.8) (0.3) Others - (0.2) - (0.2) Expenses (1.8) (2.2) (1.7) (0.4) Personnel (0.9) (0.4) (0.4) (0.0) M&A - (1.4) (1.4) (0.0) Others (0.9) (0.4) - (0.4) Total (2.0) (3.5) (2.5) (1.0) ¹ Acquired companies in 2011: Atual, FAL, FATERN e Academia do Concurso. Costs and personnel expenses related to termination of employment contract due to organizational restructuring The cost of M&A are mostly fees, consulting, travel expenses and integration. 15
    • ACQUIRED COMPANIES RESULTS Highlights ACADEMIA DO Atual FAL FATERN FABEC (R$ milhões) CONCURSONet revenue 4.8 2.2 3.1 0.4 2.2Recurring Gross Profit 1.5 0.4 1.1 0.1 0.7Recurring gross profit margin 31.4% 18.7% 36.0% 16.4% 34.4%Recurring EBITDA¹ 0.9 -0.1 0.5 0.0 -0.5Recurring EBITDA Margin 19.5% -5.9% 15.6% 11.9% -21.8%Recurring Net Income 0.9 -0.2 0.3 0.0 -0.5Recurring Net Income Margin 17.8% -8.5% 8.4% 11.9% -24.0% ¹ Corporate expenses not included. Atual and FATERN already contributing positively to the consolidated margin following the integration of administrative structure synergies Academia do Concurso goes through intense restructuring and must operate via the distance learning platform next year 16
    • EBITDA AND NET INCOME EBITDA NET INCOME (In R$ million) (In R$ million) 1.9 p.p. of margin gain 9.1% 9.2% 3.9% 4.0% 7.2% +41.7% 26.5 +15.2% 11.4 25.6 11.0 18.7 3.9% 9.9 2Q10 2Q11 2Q11 2Q10 2Q11 2Q11 Consolidated ex. aquisitions Consolidated ex. aquisitions Recurring EBITDA Margin Recurring EBITDA Recurring Net Income Margin Recurring Net Income 17
    • NET INCOME 2Q10 X 2Q11NET INCOME BRIGDE 2Q10 X 2Q11 (R$ millions) 1.2 / 12.0% Recurring Net Income Positive Variation Negative Variation¹ Acquired companies in 2011: Atual, FAL, FATERN e Academia do Concurso. 18
    • CASH FLOW 2Q11 Recurring Operational Cash Flow CASH FLOW 2Q11 (In R$ millions)¹ Financial Result except Operating Financial Result² Composition of Investments: Acquisition (R$33.9 million) + Expansion CAPEX (R$3.3 million) + One Time Capex (R$14.7 million) 19
    • MILESTONES – OPERATIONSULACAP CHÁCARA FLORA Merger of Vila Valqueire Strengthen presence and Bangu campuses and improve image in SP Reduction of fixed costs 5,000 m² Better infrastructure and good location increases Partnership with Alain Ducasse Formation and the possibility of attracting students the École Hôtelière de LausanneE3 – ESPAÇO  TRAINEE PROGRAMESTÁGIO EMPREGO Attraction and retention of young talents Room for career guidance to students Sulacap More than 12,000 registered for 15 seats More than 40,000 offers of internship, more Individual development plans than 7,000 offers of employment and 30 events (fairs, workshops and lectures) Atual 20
    • MILESTONES ‐ FINANCIAL 2nd Share Buyback Program: 3,323,796 shares may be acquired, representing 5% of the total 66,475,925 shares outstanding. Level I ADR Program: Each ADR represents one common share ("ESTC3") and is traded on the U.S. OTC market under the ticker "ECPCY”. Loan from IFC: R$48.5 million within 10 years (3 years grace period). The cost will be in Brazilian reais (CDI), equivalent to 6 months LIBOR + 3.5% p.a. 21
    • IR CONTACTS Investor Relations: Flávia de Oliveira Email: flavia.oliveira@estacio.br Phone: +55 (21) 3311-9789 Fax: +55 (21) 3311-9722 Address: Av. Embaixador Abelardo Bueno, 199 – Office Park – 6th floor CEP: 22.775-040 – Barra da Tijuca – Rio de Janeiro – RJ – Brazil Website: www.estacioparticipacoes.com/irThis 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. 22