Estacio Cs Global 20080227 Eng

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Estacio Cs Global 20080227 Eng

  1. 1. www.estacioparticipacoes.com/ir Global Services Conference Phoenix-AZ, February 27, 2008 0
  2. 2. 1. Visão Geral  Brazilian Post-Secondary Education Market  Company Overview  Business Strategy  Operating and Financial Highlights 1
  3. 3. Sector Overview Largest market in Latin America and 5th in the world, with low penetration rates Post-secondary Enrollments in 2005 (million) Gross Enrollment Rate – Post-secondary (2005) 83% 23.4 17.3 71% 65% 11.8 48% 9.0 4.5 22% 24% 24% 4.0 11% China USA India Russia Brazil Japan India China Brazil Mexico Chile Argentina Russia USA Source: Unesco/INEP/MEC/SINAES Source: Unesco Post-secondary growth in Brazil (million) Post-secondary Institutions in Brazil (units) 4.5 4.2 Private Private 3.9 CAGR 3.5 CAGR 12.2% 12.5% 3.0 72% 73% 71% 1,934 70% 1,789 69% 1,652 1,442 1,208 31% 30% 29% 28% 27% 183 195 207 224 231 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 Public Private Public Private Source: INEP/MEC Source: INEP/MEC 2
  4. 4. Highly Fragmented Market Top 10 largest post-secondary institutions account for only 17% of total enrollments Top 10 Private Institutions Market Share (2005) Private Institutions vs. Students (2005) Based on Number of Enrolled Students 131 5K or more 173 2K < 4.9K 17.4% 500 < 1.9K 616 Up to 499 1,014 82.6% Total: 3.3 million enrollments Total: 1,934 Institutions High potential for consolidation Source: Hoper Educacional 3
  5. 5.  1. Visão Geral Brazilian Post-Secondary Education Market  Company Overview  Business Strategy  Operating and Financial Highlights 4
  6. 6. Highlights       *wholly-owned subsidiaries 5
  7. 7. A National Footprint, with presence in main capitals Students Enrolled per State Market-Share per State1 RJ 28.6% 2,755 CE 20.5% 11,432 BA 8.1% PA 7.0% PE 5.9% 676 ES 5.9% MS 3.6% SC 3.0% MG 2.2% GO 1.7% 6,037 4,788 SP 1.0% PR 0.7% 11,161 1,720 Source: SINAES/2006 1 Undergraduate students enrolled (excluding state-owned universities) 2,942 1,589 1,773 1,356 Average Ticket: R$440 113,406 New Units Scheduled to open in 2008 (Organic) 1,328 2,735 8,612*  University Centers 3,979  Colleges to UCs (*) Does not include ongoing acquisitions in SP (3,492 students ) 6
  8. 8. Growth and Profitability 60 taxes 96 100 56 2004 -15 2005 2006 2007E Turnaround Organic Growth 176 Undergraduate Students National 167 Leadership 162 (in thousands) 135 144 North and Main 141 Northeast subsidiary subsidiaries for (SESES) for 118 profit status profit status Beginning of National Expansion 70 51 35 23 26 1970/96 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007E 7
  9. 9. Quality Assurance Average Score in MEC s Evaluation - 2004/2006 AVERAGE 3.10 3.15 Unipac 3.05 Ulbra 2.98 Anhanguera 2.93 Uninove 2.86 Universo 2.85 Unip 2.76 Uniban 2.58 Source: Ministry of Education – ENADE (National Evaluation) 8
  10. 10.  1. Visão Geral Brazilian Post-Secondary Education Market  Company Overview  Business Strategy  Operating and Financial Highlights 9
  11. 11. Growth Opportunities ‘Asset Light’ Growth Model Organic growth, Acquisitions and Distance Learning Faculty cost and Shared Services Center (G&A) Convenience, Focus on ROE Quality and Price 4 Increasing market share 3 Business Turnaround Value Proposition 2 1 10
  12. 12. Value Proposition  Convenience COMPETTIVE ADVANTEGES TARGET MARKET  Location  Youths aged 18 to 24  Quality  Career improvement  Workers who also study  Labor-market oriented  Self-financed students  Adequate facilities  Urban Centers (large cities)1  Competitive price 1. except for distance learning business 11
  13. 13. Business Turnaround Increasing the Number of Students per Class  Standardization/Modularization Across the Country  Common disciplines  Online disciplines Faculty Costs Reduction: Agreement with Teachers’ Union in Rio Shared Services Center (Back office centralization) National Integration 12
  14. 14. Increasing market share  Maximizing opportunities in São Paulo and Bahia Organic Growth  Upgrading colleges to University Centers  Launch new programs  Market share relevance – expanding and consolidating  Strategic fit – compatible market positioning Acquisitions  Priority for university centers  Operating synergies  Open new market and reaching new segments Distance learning  Content provider and distribution  Marginal CAPEX (sunk costs) 13
  15. 15. Focus on ROE - Asset light model  Low investment in real estate  90% of our campuses – long term rentals  High mobility to grow  Low PP&E per student – R$ 926 (*)  ROE – 20% (2007E) (*) 9M07 14
  16. 16.  1. Visão Geral Brazilian Post-Secondary Education Market  Company Overview  Business Strategy  Operating and Financial Highlights 15
  17. 17. Net Revenue Net Revenue (R$ million) 16
  18. 18. EBITDA Margin EBITDA Margin EBITDAR: EBITDA Margin ex- rentals 17
  19. 19. Ownership Breakdown Market Data  Total Units* = 78.6 million  Free Float = 19.8 million (25.3%)  Market Capitalization = R$ 943 million (02/08/2008)  Enterprise Value = R$ 680 million EV/EBITDA 07E = 6.8X  P/E 07E = 10.8X (9M07 earnings annualized) * 1 unit = 2 preferred shares and 1 common share 18
  20. 20. Disclaimer & IR Contact Disclaimer This presentation contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Estácio Participações. These are merely projections and, as such, are based exclusively on the expectations of Estácio Participações’ management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in Estácio Participações’s filed disclosure documents and are, therefore, subject to change without prior notice. Since the Company was incorporated only on March 31, 2007, we present, for the sole purpose of comparison, the non-audited pro-forma information for 2006 and 2007, as if the company's incorporation had occurred on January 1, 2006. Additionally, certain information was presented adjusted to reflect the payment of taxes at SESES, our largest subsidiary, which, from February 2007f, after becoming a for-profit company, is subject to the applicable tax rules applied to corporations, except for the exemptions arising out of the University for All Program (PROUNI). The information presented for comparison purposes should not be considered as a basis for calculation of dividends, taxes or any other corporate purposes. We are a holding company, and our only assets are our interests in SESES, STB, SESPA, SESCE, SESPE and IREP, and we currently hold 99.9% of the capital stock of each of these subsidiaries. We are a holding company incorporated on March 31, 2007 as a result of a corporate restructuring that segregated the post-secondary education operations of our subsidiaries SESES, STB, SESPA, SESCE and SESPE under our common control. Investor Relations Carlos Lacerda – carlos.lacerda@estacio.br Fernando Santino – fernando.santino@estacio.br e-mail: ri@estacioparticipacoes.com Phone: (55) 21 2433 9789 / 9790 / 9791 Visit our website: www.estacioparticipacoes.com/ir 19

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