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10 April 2013 ASX: NVT
SUCCESS THROUGH DIVERSITY UBS Emerging Companies
Conference
2 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Disclaimer
Important Notice and Disclaimer
This document has been prepared by Navitas Limited ABN 69 109 613 309 ("Navitas" or the "Company"). Information in this document should be read in conjunction with other Navitas announcements made to ASX.
This document has been prepared for information purposes only and does not take into account your individual investment objectives, including the merits and risks involved in an investment in Navitas shares, or your financial situation or particular needs, and is not investment, financial product, legal, tax or accounting advice or opinion.
You must not act on the basis of any matter contained in this document, but must make your own independent investigation and assessment of Navitas and its shares and obtain any professional advice you require before making any investment decision based on your investment objectives and financial circumstances. An investment in Navitas shares is subject to investment and other known and unknown risks, some of which are beyond the control of Navitas, including possible delays in repayment and loss of income and principal invested. Navitas does not guarantee any particular rate of return or the performance of Navitas, nor does it guarantee the repayment of capital from Navitas or any particular tax treatment.
All information in this document is believed to be reliable, but no representation, warranty or guarantee, express or implied, is made by Navitas, its subsidiaries or their respective directors, officers, employees or agents, nor any other person (the “Beneficiaries”) as to the fairness, accuracy, completeness, reliability or correctness of the information, opinions and conclusions contained in this document (including, without limitation, any estimates, calculations, projections or forward looking statements). No action should be taken on the basis of the information, and no reliance may be placed for any purpose on the accuracy or completeness of the information or opinions contained in this document. To the maximum extent permitted by law, the Beneficiaries shall have no liability, including, without limitation, any liability arising from fault or negligence, for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained in or omitted from this document.
The distribution of this document in other jurisdictions outside Australia may also be restricted by law and any such restrictions should be observed. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.
This document does not constitute an offer, invitation, solicitation, advice or recommendation with respect to the issue, purchase or sale of any security in any jurisdiction. In particular, this document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any "U.S. person" (as defined in the U.S. Securities Act of 1933 ("U.S. Securities Act")). Shares in Navitas have not been and will not be registered under the U.S. Securities Act, or under the securities laws of any state or other jurisdiction of the United States. Accordingly, shares in Navitas may not be offered or sold, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. Persons, except in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This document may not be distributed or released in the United States or to, or for the account or benefit of, any U.S. person.
All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated.
3 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Company profile
Navitas (ASX: NVT) is a leading global education provider that offers an extensive range of educational and training services for students and professionals across Australia and around the world
Market cap
$2.0b
Annual revenue
$702.1m
Colleges/ schools
111
Staff headcount
~5,000
Students
> 80,000
University Programs - leading provider of 30 pathway colleges and managed campuses across Australia and in the UK, US, Canada, Singapore, Kenya and Sri Lanka
SAE Group - creative media education provider delivering vocational and higher education qualifications in audio, film and multimedia via 53 colleges in Australasia, US, Europe and the Middle East
Professional and English Programs – provides quality vocational training, higher education and placement services in areas of key demand across Australia as well as providing English as a second language courses for international students and English language, settlement and work preparation programs for migrants and refugees .
4 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Total Group revenue up 4% to $355.4m
EBITDA up 5% to $59.9m
Net profit after tax $35.1m
Earnings per share 9.3¢
Fully franked interim dividend of 9.3¢
H1 FY13 Group highlights
Return to growth in University Programs enrolments
SAE earnings growth below expectations English earnings bounce back strongly Professional and Student Recruitment record
earnings losses Strategic and structural review of Navitas
completed and implementation underway
Operational
Revenue $355.4m
NPAT 35.1m
EPS 9.3¢
DPS 9.3¢
UNIVERSITY PROGRAMS ENROLMENTS
6 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Australian total enrolment declines cease
Semester
8% 5%
-4%
-9%
-14%
-21%
-13% -12%
-8%
-0.5%
10
01
10
02
10
03
11
01
11
02
11
03
12
01
12
02
12
03
13
01
Equivalent Full Time Students Units (EFTSU) enrolments - variance against pcp
7 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Australian new student recruitment
• Key factors for international offshore growth Stabilisation of Australian regulatory and policy environment Knight Review changes now being understood by markets SVP – commenced March 2012 Post Study Work Rights – commenced March 2013, available to
students who commenced HE study after 5 November 2011
+ 12%
201301
+ 7%
201203
New student enrolments
1201 1103
New Australian cohort has three components
International students recruited offshore – 201301 >30% increase
International students recruited onshore – 201301 decrease
Australian domestic students – 201301 ~10% increase
8 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Trend continues to improve
Equivalent Full Time Students Units (EFTSU): Semester enrolments
Semester 1 2013 EFTSU - 4% growth against pcp
9,21
0
9,02
0
12,2
68
11,5
73
12,0
25
15,4
19
14,3
06
14,5
29
17,8
11
15,7
24
14,6
75
17,1
49
14,6
01
13,3
20
16,4
22
14,0
97
13,6
02
17,0
71
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
0702
0703
0801
0802
0803
0901
0902
0903
1001
1002
1003
1101
1102
1103
1201
1202
1203
1301
% E
nrol
men
t gr
owth
Equi
vale
nt F
ull T
ime
Stu
dent
s(E
FTSU
)
Semester
9 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Continued diversification
Australia 60%
UK 12%
North America
13%
Rest of World 15%
201201 EFTSU by region 201301 EFTSU by region
Growth by region on pcp • North America up 24% • UK up 12% • Australia down 0.5% • Asia/Africa down 3%
Australia 58%
UK 13%
North America
16%
Rest of World 13%
INTERIM FINANCIAL PERFORMANCE
11 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Core Divisions perform well in 1st half
EBITDA ($m) H1 FY13 H1 FY12 Δ%
University Programs 52.3 49.9 5
SAE Group 12.6 11.8 7
Professional and English Programs 4.6 3.7 24
Divisional EBITDA 69.5 65.4 6
Corporate costs (9.6) (8.3) 16
Group EBITDA 59.9 57.1 5
75%
18%
7%
69.5m
EBITDA by Division
12 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Long term growth
13% CAGR
18% CAGR
17% CAGR
217.4 270.2 291.4
341.8 355.4
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
REVENUE ($m)
30.4
43.4 48.4
57.1 59.9
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
EBITDA ($m)
19.0
27.5 32.6 35.4 35.1
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
NPAT ($m)
55.2 52.8 21.2
50.4 13.6
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
1.9
13.0 5.0
8.7 2.8
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
2.5
8.5 5.1
2.8 (0.3)
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
PERIOD MOVEMENT
13 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Consistent shareholder returns
14% CAGR
4% CAGR
14% CAGR
5.5
8.0 9.5 9.4 9.3
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
EARNINGS (cps)
8.6 6.1 4.9 5.2
10.1
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
OPERATING CASH FLOW (cps)
5.5
8.1 8.7 9.4 9.3
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
DIVIDENDS (cps)
0.5
2.6 0.6
0.7 (0.1)
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
0.8
2.5
1.5 (0.1) (0.1)
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
PERIOD MOVEMENT
2.5 (2.5 ) (1.2 ) 0.3
4.9
H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13
APPENDIX
15 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
-1,000 -500 0 500 1,000
0-9
10-19
20-29
30-39
40-49
50-59
60-69
70-79
80-89
90+
Millions
263 million by
2025
Global market conditions positive
2.1 2.1 2.4 2.6 2.8 3.0 3.1 3.2 3.5
3.7 4.1
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
to
2024
2025
International student enrolments (m) 8.2
International education market share (%)
Source: , UNESCO Institute of Statistics, OECD Education at a Glance 2012
World population by gender
2010:3.45bn 2025: 3.99bn
Male Female
2010: 3.40bn 2025:3.95bn
2012
165
98
Current enrolments
Enrolment growth
Global tertiary enrolment (m)
16 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Corporate snapshot
375.4m Shares on issue
$2.0b Market Capitalisation
ASX200
52 wk range
Annualised dividend
$5.33 Share Price
1 April 2013
NVT
$3.55 - $5.33
19.4cps
17 NAVITAS (NVT) –UBS EMERGING COMPANIES CONFERENCE – 10 APRIL 2013
Detailed H1 P&L – 5 years
Navitas Ltd$000s H1 FY09 H1 FY10 H1 FY11 H1 FY12 H1 FY13 $000s Index CAGR*
Operating RevenueUniversity Programs 140,721 174,681 193,388 190,657 203,506 12,849 107% 10%SAE - - - 57,063 55,594 (1,469) 97% n/aPEP 74,925 93,811 95,215 92,084 94,389 2,305 103% 6%Corporate & consolidation items 793 1,126 2,095 1,863 1,350 (513) 72% 14%
Total operating revenue 216,439 269,618 290,698 341,667 354,839 13,172 104% 13%Expenses (186,038) (226,220) (242,321) (284,530) (294,965) (10,435) 104% 12%EBITDA 30,401 43,398 48,377 57,137 59,874 2,737 105% 18%Depreciation (2,415) (3,302) (3,825) (6,233) (7,039) (806) 113% 31%EBITA 27,986 40,096 44,552 50,904 52,835 1,931 104% 17%Amortisation (502) (488) (2,603) (488) (488) - 100% -1%EBIT 27,484 39,608 41,949 50,416 52,347 1,931 104% 17%Net Interest (paid)/received 246 441 390 (4,085) (3,802) 283 93% n/aNet profit before tax 27,730 40,049 42,339 46,331 48,545 2,214 105% 15%Income tax (8,955) (12,807) (10,122) (10,938) (13,242) (2,304) 121% 10%NPAT 18,775 27,242 32,217 35,393 35,303 (90) 100% 17%Outside equity interest 228 272 355 (33) (233) (200) 706% n/aNPAT attributable to members 19,003 27,514 32,572 35,360 35,070 (290) 99% 17%
* Cumulative Annual Growth Rate from H1 FY09 to H1 FY13
PCP Change