Post on 08-May-2015
Shaping the
FutureShaping
the Future
FULL YEAR RESULTS
For the year ended 30 June 2013
ASX:NVT
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
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 documentshould 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.
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Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Navitas (ASX: NVT) is a leading global education provider offering an extensive range of educational and training services for students and professionals across Australia and around the world
Market cap
$2.2b
Market cap
$2.2b
Annual revenue
$731.7m
Annual revenue
$731.7m
Colleges/schools
111
Colleges/schools
111
Staffheadcount
~5,500
Staffheadcount
~5,500
Students
> 80,000
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 - creative media education provider delivering vocational and higher education qualifications in audio, film and multimedia via 57 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
Company Profile
3
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Total Group revenue up 6% to $731.7m
EBITDA up 3% to $130.0m
Net profit after tax up 2% to $74.6m
Earnings per share up 2% to 19.9¢
Fully franked full year dividend of 19.5¢
H1 FY13 Group highlights
Return to student enrolment growth in UPD during FY13
Enhanced SAE leadership team and course offering
Merger of Professional and English Divisions to create Professional and English Programs (PEP) Division
Continued growth in government contracts and education businesses contracts drives strong PEP growth
Key strategic and structural actions implemented
Operational
Revenue $731.7mRevenue $731.7m
NPAT $74.6mNPAT
$74.6m
EPS 19.9¢EPS 19.9¢
DPS 19.5¢DPS 19.5¢
FY13 Group Highlights
4
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Financial Performance
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Group performance summary
($m) FY13 FY12 ∆%
Revenue
Continuing business 715.3 682.0 5
New campuses* 16.4 6.5 152
Total 731.7 688.5 6
EBITDA
Continuing business 136.9 135.4 1
New campuses* (6.9) (8.6) (20)
Total 130.0 126.8 3
EBITDA Margin 17.8% 18.4%
NPAT ($m) 74.6 73.1 2
EPS (cents) 19.9 19.5 2
Full Year Dividend (cents) 19.5 19.5 0
*FY13: UP USA, ICRGU, EIC, BCUIC, NIC and SAE Chicago and Jakarta (FY12: UP USA, ICRGU, EIC, NIC and SAE Bochum, Chicago and Jakarta )
Investment in new opportunities continues…
6
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Core Divisions perform well in 1st half
Revenue($m) FY13 FY12 ∆%
University Programs 415.7 382.5 9
SAE Group 114.9 113.9 1
Professional and English Programs 196.4 188.3 4
Divisional revenue 727.0 684.6 6
Other 4.7 3.9 21
Group revenue 731.7 688.5 6
FY13 (%) FY12 (%)
… with solid growth across divisions and regions…
$684.6m$727.0m
7
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Core Divisions perform well in 1st half
EBITDA by Division
70%
17%
13%
$150.5m
72%
18%
10%
$143.2mFY13 FY12
… and EBITDA reflecting further diversification
EBITDA ($m) FY13 FY12 ∆%
University Programs 106.1 102.9 3
SAE Group 25.1 26.4 (5)
Professional and English Programs 19.3 13.9 39
Divisional EBITDA 150.5 143.2 5
Corporate costs (20.5) (16.4) 25
Group EBITDA 130.0 126.8 3
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Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Track record of compound annual growth (CAGR)
27.3%CAGR27.3%CAGR
14.1%CAGR14.1%CAGR
12.5%CAGR12.5%CAGR
Key metrics demonstrate solid cumulative growth
9
106.1
226282.7
345.4
470.7
556.7
641.8688.5
731.7
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Revenue ($m)
45.3 47.954.0
63.4
77.1
96.7
121.1126.8130.0
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
EBITDA ($m)
29.1 31.5 32.237.4
49.2
64.3
77.473.1 74.6
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
NPAT($m)
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Strong shareholder returns
11.4%CAGR11.4%CAGR
20.1%CAGR20.1%CAGR
11.1%CAGR11.1%CAGR
* Simplified for full year calculation
Recovery evident in shareholder returns
10
8.4* 9.1 9.310.8
14.3
18.8
21.7
19.5 19.9
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Earnings (cps)
7.8
11.914.1
22.7
30.5
25.3
18.519.7
33.8
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Operating cashflow (cps)
8.49.5 9.3
10.9
14.3
18.8
20.719.5 19.5
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Dividends (cps)
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Moderate gain in wealth created
$m FY13 FY12 %
Operating revenue 731.7 688.5 6
Cost of services and other external costs (202.2) (190.4) 6
Total wealth created 529.5 498.1 6
Payments to university and consortium partners 135.2 128.5 5
Payments to teaching and academic employees 156.8 147.9 6
Payments to other employees 115.6 102.8 12
Payments to shareholders – dividends 73.2 73.3 ‐
Payments to governments – income taxes 31.0 30.5 2
Reinvested as depreciation, amtsn and retained earnings 17.7 15.1 17
Total wealth distributed 529.5 498.1 6
University & consortium partners
Teaching & academic employees
Other employees
Shareholders ‐ dividends
Governments – income taxes
Reinvested as depreciation, amortisation & retained earnings
Wealth distribution benefits all stakeholders
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∆
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
EVA steady
EVA®
EVA steadied after a poor FY12
FY13 result well below EVA growth target
TPS introduction in Australia from 1 July 2012 reduced EVA by $3.1m in FY13
40.6
54.6 57.9
38.446.6
0
10
20
30
40
50
60
70
FY09 FY10 FY11 FY12 FY13
$m
46.7*
EVA® is a registered trademark of Stern Stewart & Co.
* Adjusted for an 8% WACC as applied in FY13
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Strong liquidity and cash flow
1Cash realisation ratio= Net Operating CashflowNPAT plus amtsn and depcn
Net debt $m Solid cash realisation ratio1 of 1.39x (FY11: 0.84x)
Cashflow from operations up by 72% reflecting favourable negative working capital model
24% deferred revenue growth reflects strong cash generation and foreshadows FY14 revenue recognition
Net debt represents only 0.73x FY13 EBITDA
Interest cover of 17.1x
Debt facilities refinanced over 5 years with club of four banks
Debt constituents $m
Gross Debt 151.2
Cash related to the Tuition Protection Service (38.5)
Other Cash (17.8)
Net Debt at 30 June 2013 94.9
Substantial reduction in net debt
13
94.9
(126.8)
(1.6)
13.5
20.0
72.8
117.0
30 June 13 net debt
Cashflow from Ops
Other
FX Translation charge
Plant & Equipment
Dividends Paid
1 July 12 net debt
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
University ProgramsEarnings ($m) Highlights
EBITDA *
• Return to student enrolment growth
• Agreement signed with University of Canterbury for college in New Zealand
• Contract renewal with Brunel and Curtin University
• Strong performance by UK and Canadian colleges
• US colleges move closer to breakeven
• SVP and Post Study Work Rights support Australian recovery
• Investment costs reduced to $5.5m
• Student Recruitment incorporated into the Division
University Programs
76.5
100.3111.9
102.9 106.1
FY09 FY10 FY11 FY12 FY13
102.9
6.8
2.8
2.5
1.7
(6.6)
(2.5)
(1.5)
106.1
FY12
Canada
UK
USA
ROW
Australia
Student Recruitment
Divisional/marketing
FY13
EBITDA ($m)
14
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
SAEEarnings ($m) Highlights
• Enhanced leadership team
• Improved reporting and benchmarking systems
• New courses and qualifications for US campuses with enrolments trending positively
• New campuses in Chicago and Jakarta
• Price increases and cost reduction support Southern region growth
• No significant one‐off Licencing sales
• Divisional costs up due to investment in staff and processes
• SAE well positioned for FY14 growth
Pre-Acquisition period
26.4 25.1
FY12 FY13
SAE
26.4
1.0
2.2
(0.1)
(1.0)
(1.0)
(1.3)
(1.1)
25.1
FY12
FY12 one‐off Items
Southern
USA
Europe
Licencing
Start Up and Relocation
Divisional costs
FY13
*
* Chicago & New York
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Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Professional (formerly Workforce)Earnings ($m) Highlights
• Record year
• Merger of Professional and English Divisions to create the Professional and English Programs Division (from 1 July 2013)
• Significant performance from government contracts
• Solid performance from Professional Institute businesses (ACAP, HSA, NCPS)
• ELICOS returns to growth
• Restructure of corporate training activities to focus on resources and allied sectors
• Return to normal patterns for Careers and Learning Skills (Professional Year)
16.3 15.9
11.7
13.9
19.3
FY09 FY10 FY11 FY12 FY13
Professional and English Programs
13.9
9.4
3.0
0.3
(6.1)
(1.2)
19.3
FY12
English and Foundation Skills
Navitas Professional Institute
Careers and Learning Skills
Training and Development
Divisional Costs
FY13
16
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Corporate costs
Earnings ($m) Highlights
• Increases in EVA incentive payments as Group performance steadies
• Unfavorable FX movements from revaluation of year end FX book
• Reduction in Wynyard Green sub tenant rental income
• 2.8% of Group revenue
(15.9)
(19.5) (19.7)
(16.4)
(20.5)
FY09 FY10 FY11 FY12 FY13
Corporate costs
17
(16.4)
(2.5)
(2.1)
(0.7)
1.3
(0.1)
(20.5)
FY12
EVA Changes
FX movements
WG sub tenant income
FY12 strategic review costs
Other
FY13
($m)
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
University Programs Enrolments
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
UP enrolment trend continues to improveEquivalent Full Time Students Units (EFTSU): Semester enrolments
Semester 2 2013 EFTSU5% growth against pcp
Recovery trend continues
19
6,77
0
6,82
6 8,13
4
6,89
9
6,78
1 8,01
2
7,19
4
7,08
7 8,16
7
7,62
9
7,64
2
9,76
9
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
67
14,7
44
-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
20,00003
02
0303
0401
0402
0403
0501
0502
0503
0601
0602
0603
0701
0702
0703
0801
0802
0803
0901
0902
0903
1001
1002
1003
1101
1102
1103
1201
1202
1203
1301
1302
-% E
nrol
men
t gr
owth
on
pcp
(RH
S)
-EFS
TU (
LHS
)
Semester
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Africa and Asia
• 19% decline in combined ACBT (Sri Lanka) and AUSI (Kenya) enrolments –financially less material due to significantly lower fee levels (i.e. <$5k for a full year of study)
• Following years of significant growth Curtin Singapore declines by 4%
+15%
+15%
201302
+12%
+12%
201301
Australian new student enrolments
12021201
Australian recruitment
• International students from source countries up 33%
• Australian domestic students up 20% (relatively small base)
• International students already in Australia down 14%
• Results impacted by processing bottlenecks in high growth markets due to SVP
• ~200 students deferred to 201303 who paid but were unable to secure visas
Total Australian enrolment returns to growth
20
After three years of decline Australia records 5% total enrolment growth
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Outlook
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
• Overall student growth combined with recent price increases to boost earnings
• New colleges in UK and New Zealand to open
• Australian new student growth on track to continue
• Return expected from recent new colleges in Australia and UK
• US network expected to reach breakeven (excluding impact from any expansion activity)
Professional and English ProgramsExciting UP medium term outlook…
22
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
SAE
• Recent investment in people and process to support growth
• US operations to provide solid contribution following expansion in course offerings
Professional and English Programs
• FY14 growth expected
o Merger efficiencies gained
o FY13 Corporate training issues addressed
o Government contracts expected to slow due to
federal election impact on migration
Professional and English Programs…supported by SAE and PEP growth
23
Navitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Appendix
Navitas Limited Citi Australian Growth Conference 21 May 2013 ASK:NVTNavitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
16.5
13.0
6.3
6.26.14.7
47.2
USA
UK
GER
France
Australia
Canada
ROW
263million by2025
263million by2025 165
98Current enrolments
Enrolment growth
International student enrolments (m)
International education market share (%)
Source: UNESCO Institute of Statistics, OECD Education at a Glance 2013, ICEF
2011
Global tertiary enrolment (m)
Global market conditions remain positive
Supply imbalance in key source markets (m)China
9.57 9.33 9.15
6.57 6.75 6.85
2010 2011 2012
Gaokao students
China domesticuniversity places
2.1 2.4 2.6 2.8 3.0 3.1 3.2 3.5 3.7 4.1 4.3
8.2
25
*
• Chinese university entrance exam
Navitas Limited Citi Australian Growth Conference 21 May 2013 ASK:NVTNavitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
The Navitas global network
• Glasgow• Liverpool• Oxford• Birmingham
• Berlin• Cologne• Frankfurt• Bochum
• Munich• Hamburg• Leipzig• Stuttgart
• Geneva• Zurich• Ljubljana• Stockholm
• Singapore• Jakarta
South East Asia
• Nairobi• Cape Town
• Perth• Adelaide• Brisbane• Melbourne• Sydney• Newcastle• Darwin• Cairns• Auckland
Australia/NZ
• Atlanta• Los Angeles• Miami• Nashville• New York• San Francisco• Chicago• Boston• Dartmouth• Lowell• Bowling Green• Durham• Vancouver• Winnipeg
North America
• Cambridge• Hertfordshire• London• Plymouth
• Portsmouth• Swansea• Aberdeen• Edinburgh
United Kingdom
Africa
• Colombo
Sri Lanka
Europe
• Athens• Milan
• Madrid• Vienna• Brussels• Paris
• Istanbul• Amsterdam• Rotterdam• Barcelona
Navitas’ global footprint
26
Navitas Limited Citi Australian Growth Conference 21 May 2013 ASK:NVTNavitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Corporate snapshot
375.4mShares on issue
$2.2bMarket Capitalisation
ASX200
52 wk range
Annualised dividend
$5.77Share Price
30 June 2013
NVT
$3.60 - $6.32
19.5cps
27
Corporate snapshot
Navitas Limited Citi Australian Growth Conference 21 May 2013 ASK:NVTNavitas FY13 Full Year Results Presentation - 30 July 2013 - ASX:NVT
Detailed H1 P&L – 5 years
28
Navitas Ltd GrowthFY09 FY10 FY11 FY12 FY13 $ Index CAGR*
Operating RevenueUP 304,938 365,842 390,607 382,479 415,713 33,234 109% 8%SAE - - 57,947 113,864 114,934 1,070 101% n/aPEP 162,254 185,983 182,472 188,306 196,377 8,071 104% 5%Corporate & consolidation items 2,644 3,569 3,727 3,497 2,537 (960) 73% -1%
Total operating revenue 469,836 555,394 634,753 688,146 729,561 41,415 106% 12%
Expenses (392,777) (458,694) (513,609) (561,329) (599,559) (38,230) 107% 11%
EBITDA 77,059 96,700 121,144 126,817 130,002 3,185 103% 14%
Depreciation (5,668) (6,637) (9,981) (14,120) (15,492) (1,372) 110% 29%
EBITA 71,391 90,063 111,163 112,697 114,510 1,813 102% 13%
Amortisation (1,003) (976) (4,322) (977) (863) 114 88% -4%
EBIT 70,388 89,087 106,841 111,720 113,647 1,927 102% 13%
Net Interest (paid)/received 216 1,235 (1,624) (7,603) (7,590) 13 100% n/a
Net profit before tax 70,604 90,322 105,217 104,117 106,057 1,940 102% 11%
Income tax (22,407) (27,509) (27,983) (30,497) (31,006) (509) 102% 8%
NPAT 48,197 62,813 77,234 73,620 75,051 1,431 102% 12%
Outside equity interest 994 1,438 158 (471) (476) (5) 101% n/a
NPAT attributable to Navitas 49,191 64,251 77,392 73,149 74,575 1,426 102% 11%
* Cumulative Annual Growth Rate from FY09 to FY13
PCP Change
Detailed P&L – 5 years