Estácio: UniSãoLuis´s Presentation - Mergers and Acquisitions

1. Faculdade São Luís
Extraordinary Shareholders’ Meeting – Mergers and Acquisitions
June 15, 2012

2. Social and Economic Dynamics – São Luís
São Luís is Maranhão’s main economic Total: R$15.3 billion
center. Its expansion resulted from the
installation of major economic projects, such Per capita income: R$15,381
as the Itaqui Port and the Ponta da Madeira 2009 GDP –
Working-age population: 44%
Port Complex (CPPM), in addition to the IBGE
consolidation of the Industrial District. The Working population: 35%
combination of these projects have vitalized
the local economy. Unemployment rate: 22%
Population
958 GDP Breakdown by Sector
942
6%
0.2%
928 945
14.4%
930 41.2%
919
94%
05 06 07 08 09 10 44.2%
Brazil São Luís
Agribusiness Industry
Services Public Adm. Urban Rural
> 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
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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
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4. Growth and Competition
IES Market – São Luís (thousand students) IES – Local Market
18.000
UNICEUMA
16.000
UFMA
14.000
FAMA Kroton
12.000
UEMA
33,3 35,0
10.000
24,2 25,2 27,5 29,2 FACSÃOLUÍS
8.000
CEST
15,3 15,7 15,0 15,5 19,5 19,6 6.000
Fac.Pitagoras
4.000
05 06 07 08 09 10* UNDB
2.000
FACAM-MA
Total Públicas Total Privadas 0
2002 2003 2004 2005 2006 2007 2008 2009 2010 Outros
Student Base – FACSÃOLUÍS Market Share
10,9% 10,6%
3.716
3.616 8,1% 7,8%
8,5%
7,2% 6,9% 6,8%
5,6%
1.963 1.977 2.484 5,0% 4,8% 4,7%
1.914
2.049 1.979
1.339
05 06 07 08 09 10*
02 03 04 05 06 07 08 09 10
Total Geral Total Privadas
*latest information available
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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$432
Strategic Rationale
• Entry the São Luís market, expanding
the portfolio of on-campus programs
and transforming the institution into a
distance learning (EAD) center
• Excellent infrastructure
• Synergies: Shared Services Center
(CSC), teaching activities, marketing
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6. Valuation Premises
Financial Operational
• Nominal flow • Average Student Base: CAGR 2011-16 of 4.3%, which should
increase as of 2014 due to the new courses approved (note: the
• Average inflation:
base excludes distance learning)
5.1%
• WACC: 15% • Average Ticket: Pass through of projected inflation only.
• Perpetuity Growth • Cost of Services: 10 p.p. gain in faculty costs by 2016, reflecting the
(g): 4.5% implementation of the Estácio teaching model.
• Base date: June 30, • SG&A: synergy gains from back office reduction and 13 p.p.
2012 reduction in the Administration payroll by 2016; 8 p.p reduction in
PDA to 5% of net revenues
• CAPEX: higher investments in 2012 and 2013 to cover IT and
systems integration costs, and reduction to 3.5% of net revenues in
2014.
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7. Valuation
2011A 2012E 2013E 2014E 2015E 2016E
R$ 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% • Base date
Net revenue 19.5 22.4 23.5 25.4 27.5 31.4 06/30/2012
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 • 5-year flow:
SG&A (12.3) (14.1) (11.8) (9.9) (8.8) (9.7) R$16.2 M
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) • Perpetuity:
(+) VCG (1.0) (0.5) (0.5) (0.5) (0.6) R$65.7 M
(-) CAPEX (2.3) (1.7) (0.9) (1.0) (1.1) Perp. Result
Free Cash Flow (3.0) 1.5 6.1 9.2 11.6 119.1
• Total EV:
PV - Free Cash Flow (2.5) 1.3 4.6 6.1 6.7 65.7
R$ 81.9 M
• Proposal:
2011A 2012E 2013E 2014E 2015E 2016E R$28 M
Net revenue 100% 100% 100% 100% 100% 100% R$7,000/stud
Cost of services -36.0% -36.0% -34.0% -31.3% -28.6% -25.9% ent
Gross profit 44.4% 44.4% 50.1% 57.8% 64.3% 67.0%
• IRR: 21.4%
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%
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