Edu Comp Corporate Presentation

8/8/2019 Edu Comp Corporate Presentation

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EducompSolutions

Limited June/July2009


2/29


3/29

3

Contents

I

IndustryOutlook

4

II CompanyOverview

8

III Financials

24

IV

GrowthStrategy

28


4/29

IndustryOutlook


5/29

5

Stablepopulationbasekeepinggrowth

opportunityaliveLow

literacy

rates

provide

opportunity

Source:Census

2001,

UNESCO

Institute

for

Statistics

database

Good for K-12

Good for highereducation

Chinaover90%

US~100%

Educationspends

in

India

are

highly

disproportionate

vis

vis

population

size

India

Largestmarketopportunityineducationintheworld


6/296

Education

is

the

highest

growing

expense*

Source:Census2001,Economicsurvey200708,DatapublishedbyUGC

*PrivateFinalConsumption

AnnualgrowthandShare(inpercent)

Growingper

capita

income

greater

purchasingpower

Highereducation

penetration

is

increasing However,

still

dominated

by

Govt./Local

Bodies

scopeforincreasingtheprivateparticipation

Consistent

growth

Increasing

share

augurswellforEducomp


7/297

Source:InterimBudget200910,PlanningCommission

Government(stateandcentral)initiativeshighlight

renewedthrust

and

spending

in

this

sector:

Toincreasetheshareofpublicexpenditureto

6%ofGDP(asexpressedintheNational

CommonMinimumProgramme)

Levied3%educationcesstosupportspending

on

education

in

India

KeyallocationsfromtheInterim200910budgetforthe

educationsectorare:

SchoolEducation:

SarvaShikshaAbhiyan(SSA)

Rs.130bn;

National

Programme

of

Mid

day

Meals

Rs.80bn

RashtriyaMadhyamikShikshaAbhiyaan(higherprimarylevelscheme) Rs.11.43bn

Otherslikescholarships,modelschools,higherprimaryeducation~Rs.8.5bn

HigherEducation:

Outlayhasbeenincreasedby900%in11th

FiveYearPlan

UniversityGrantsCommission,TechnicalEducation,ICT~Rs.70bn

VocationalEducation:

500ITIshavebeenupgraded

NationalSkillDevelopmentCorp. Rs.10bn

GovernmenttopromotePublicPrivatePartnerships

(PPP)at

all

levels

vocational,

higher

and

secondarybyprovidingfollowingopportunities:

Provisionofdigitalcontentandtechnology

toK12schools

SettingupownpreschoolsandK12

schools

ImplementationoflargeICTprojects

Largeindustrytoprovidehugeopportunity

US$40bn

K12

Schools

Higher

Education

Tutoring

Pre

school

Vocational

Overall

Education

Marketin

India

Governmentinitiativesbooststheeducationsector


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CompanyOverview


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Introduction

LeadingeducationproductsandservicesproviderinIndiaforK12(kindergartentotwelfth

grade)studentswithalargefootprintinvocationalandhighereducation

Hasdevelopedlargerepositoryofmorethan16,000multimediacontent/modulesfor

Smart_ClassTM,over15,000modulesforMathGuruTM,over100,000pagesoflearningcontent

fortheRootstoWingsTMprogramand511bookscoveringpreschoolthroughtograde12

Servicing

over

11

million

students

in

~23,000

schools

across

the

globe

on

aconsolidated

basis

ClockedCAGRinrevenueofover127%andprofitaftertaxofover120%overthelast3years

55globalofficesandover8,000employees(onaconsolidatedbasis)furtheraddstoCompanys

executionstrength

The

Companys

key

business

areas

can

be

broadly

split

into

two

key

heads:

B2BInitiatives:

(contributes~86%oftotalconsolidatedrevenue)

Smart_ClassTM

providesdigitalcontent to

privateschools

Edureach(formerlyICTsolutions)

instructional

andcomputingtechnologysolutionstopublic

schools

ProfessionalDevelopment teachers training

programmes

DirectInitiatives:

(contributes~14%oftotalconsolidatedrevenue)

Offlineinitiatives

establishpreschools,K12

schools,vocational

and

higher

education

institutions,licensingofcontent

Onlineinitiatives

currentlysellslearningcontent

throughitsonlineinitiatives(including

MathguruTM

andWiziQ)

Sellseducationalaid,CDROMs


10/2910

Educomp:TheonlyEducationEcosystemCompanyInIndia

SmartClass:Teacherlededucational

contentsolutionreachingtoover1.98m

students

Edureach

(formerly

ICT):

Turnkey

solutionsforcomputeraidedlearningin

governmentschoolsreachingoutto6.5

Mmstudents

Professional

Development:

Development:Teacher

trainingintechnology

integration,pedagogy

andbestclassroom

practices

Roots

to

Wings:

Educomps

own

pre

school

brand;

currently178franchiseesoperational

EuroKids:50%controllingstakeinEurokids,thelargest

preschoolchaininIndiawithover400preschools

MillenniumSchools:

NetworkofK12schoolsinTierI

andTierIIcities;withatuitionfeeofRs3,000

3,500/month

TakshilaSchools:K12schoolsinTierIIIandTierIV

cities;withatuitionfeeofRs1,5001,700/month

VidyaPrabhat

Schools:Budgetschoolbrandtargetedat

semiurbantownswithatuitionfeeofRs700/month

K12 Content Licensing & Training Teacher Training K12 Schools

JVwithRafflesEducationCorp.:ProfessionaldevelopmentprogramsinFashionDesign,Hospitality,Managementetc

Educomp

Tele

Education

Network:

Tele

EducationNetwork:Traininginaccounting,Englishlanguageetc.throughtopfacultyviaVSATenabledlearningcenters

PurpleLeap:Trainingprogramstoimproveemployabilityofcollegegraduatestomakethemworkplaceready

LanguageEdge:

120hourprogrammesfor

firsttime

English

learners

AgreementwithIGNOU/CII:

Offersspoken

English programmes

LearningHour:

Premiumtutoring

centersbrandedLearningHour

Mathguru:

Indiasfirstonlinemaths

tutor;largest

maths

content

portal

WizIQ:

Internetlearningplatformto

connectstudentsandteachers

worldwide

Learnhub:

Sociallearningnetwork

AuthorStream:

Onlinecommunityto

sharepowerpoint

presentations

Smartclassonline.com

Learning.com:Acquiredmajoritystakein

Learning.com,theleadingwebbasedK12

CompanyinUS

AskNLearn:AcquiredAskNLearn,

Singapore'slargestK12company

Professional & Vocational EducationInternet & Supplemental Education

Global Initiatives
http://www.learning.com/index.htmhttp://learnhub.com/


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PresenceacrossentireEducationalValueChain

2 5 years 5 18 years 18 21 years 21 25 years

EducationLifeCycle

ProfessionalDevelopment

Pre-

School

Initiatives

HighScho

ol

Initiative

s

Higher

&

Vocational

Initiatives

Online

Initiatives

ICT

K1

2Initiatives
http://learnhub.com/


12/2912

Thisconsists ofSmart_ClassTM,EdureachandProfessionalDevelopment

Smart_ClassTM:

Enablesteacherstousedigitalcontentinadditiontothemoretraditionalchalkandtalk

methodsofteaching

Digitalcontentlibrarycomprisingmorethan16,000contentmoduleswithsomemodules

availableinin10languagesonsubjectssuchasscience,mathematicsandsocialsciences

Educomphascontractswith1,737schoolsasonMarch31,2009(FY09)reachingoutto ~2

millionstudents

Educompprovidesatotalsolutionincludinginteractiveboards,digitalcontent,projectors

,servers,networkingandaresourcecoordinator

Edureach(formerlyknownasICTSolutions):

Workswithpublicschoolstobridgethedigitaldivideinpublicprivatepartnershipprojects

Set

up

and

maintain

IT

Learning

Labs

on

Build

Own

Operate

Transfer

(BOOT)

basis

or

Outright

Buybasis

CurrentlyexecutingICTSolutionsprojectsinfourteenstates

TillendofFY09,Companyprovidedsolutionstoover12,000schoolsservicingover6.5million

students

Professional

Development:

PartnerswiththeMicrosoft,LearningLinksFoundation,FoundationandMichael&SusanDell

Foundationetc.

Comprisesadedicated200memberteamoftrainersthathas implementedtheCompanys

programsacross15statesinIndia

Trainedover1.4millionteacherstillendofFY09

BusinesstoBusiness Initiatives


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Currently20high schoolsunderoperationwith16,000+

students;expectedtosetup23moreschools byJuly

2010

OneofthelargestpreschooloperatorsinIndia with

over400

schools

under

the

Eurokids

brand

and

178

franchiseesunderRoottoWingsbrand

Largerepositoryofcontent:

MillenniumLearningSystems

4,630lessonplans,66books,

2,055worksheets,23,493assessments,123literature

manualsand983learningaids

RoottoWingsTM

4883lessonplans,1,490worksheets,141

booksand5,628learningaids

ComprehensiveRangeofschoolsandbrands

EducompLearningHour(asubsidiary)runsonline

tutoringservicesthroughLearningHour.comand7

tutoringcenters

in

India

DirectInitiatives:K12schoolsandTutoring

Total Visibility of 43 Schools

ChennaiBangalore

Musoorie

Mohali

Pune

Ludhiana

Patna

Noida

Gurgaon

Panipat

Lucknow

Amritsar

Operational

Land Acquired

Under Takshila Schools

Hoshiarpur

Ahmednagar

Gaya

Faridabad

Coimbatore

Gwalior

Meerut

Hanumangarh Ghaziabad

Sangli

Barnala

Note:PictureexcludesschoolsunderEuroschoolsandVidyaPrabhatbrands

MillenniumSchools:TierIandTierIIcities

Takshila

Schools:

Tier

IIand

Tier

III

cities

VidyaPrabhatSchools:TierIVandsemiurbantowns


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PSBBMillenniumSchool,ChennaiPSBBLearningLeadershipAcademy,

BangaloreChiranjeevBharti,Gurgaon

EduSchools:CreatingCoreCapacityforPrivateSchoolinginIndia

TheMillenniumSchool,PanipatTheMillenniumSchool,Noida PSBBMillenniumSchool,ChennaiOMR


15/2915

TheMillenniumSchool,Mohali

EduSchools:CreatingCoreCapacityforPrivateSchoolinginIndia

ChiranjivBharti,SushantLok,Gurgaon TheMillenniumSchool,Lucknow

TheMillenniumSchool,Amritsar PSBBMillenniumSchool,ChennaiPorurPSBBLearningLeadershipAcademy,Primary

SchoolCampus,Bangalore


16/2916

DirectInitiatives:HigherandVocationalEducation

Throughits50:50JVwithRafflesEducation

Corp.,AsiaCompanylaunchedRaffles

MillenniumInternational

Institutesin

Delhi(PusaRoad)andBangalore

EducompTeleEducationNetwork:Tele

EducationNetwork(ETEN):Providestraininginaccounting,Englishlanguageetc.throughtopfacultyvia26VSATenabled

learningcenters

APlusEducationSolutions operatingunder

PurpleLeapbrandprovidesprogramsto

improveemployabilityofcollegegraduates

to

make

them

workplace

ready

EnteredintoagreementwithCII/IGNOUto

offerspokenEnglishandpersonality

developmentprogrammes

IGNOU

Project


17/2917

DirectInitiatives:OnlineInitiatives
http://learnhub.com/


18/2918

CreditRatings

'CAREA'

ratings

for

existing

and

proposed

long

term

bank

facilities

having

tenure

ofmorethanoneyear,aggregatingtoRs.3,492millioninJune2009

'PR1'ratingstoexistingandproposedshorttermbankfacilitieshavingtenureof

uptooneyear,aggregatingtoRs.2,400millioninJune2009

NationallongtermissuerratingofA(ind)

fromFitch,Inc.forRs.200millionlong

termdebtprogrammeinMarch2008

P1

rating

for

its

short

term

debt

in

January

2006

from

CRISIL


19/2919

AwardsandRecognition

ChosenasFUTURETITAN,oneofthe10hottest

companies inIndiabyOutlookBusinessMagazine

November2006

BT500listinDec2007rankedEducomp140inthelistofthemost

valuableprivatesectorcompaniesinIndia

CompanywasfeaturedinForbesMagazine,

200best

under

Billion

forAsiaPacificRegioninSeptember,

2008issueofForbesMagazine

InJune,2009,CompanyhasbeenrankedNo.1for

educationandtrainingintheIndiasBestCompaniestowork

forstudy,conductedbytheGreatPlacetoWork

Institute,India,

inpartnershipwiththeEconomicTimes.

In2005,Educompwaschosenasthecompany

oftheyearintheICT&ITESsectorattheCNBCICICIBank

EmergingIndiaawardsfromover5,000enterprises

Authorstream.comfeaturesinDataquest

listof25hotIndian

web2.0startups

inMay2009

ASKnLearn,

emergedas2nd

fastest

growingtechnologyCo.

inSingaporeat2008

DeloittesTechnology

Fast500

awards

RootstoWingsTM

wasawardedemerging

franchisorofthe

yearawardfor2008by

FranchiseIndiaHolding

Limited

Learning.comwon

the

bestcoursemanagement

systemsaward,Software&

InformationIndustry

Associations24th

AnnualCODiE Awardsin

May2009


20/29


21/2921

EfficientPower

Qualifications Manpower

Graduate/BCA 6,842

PostGraduate/B

Ed/M.ED/M.Phil1,029

MCA 188

MBA 209

Others 607

Total

8,873

Ason31March,2009(consolidatedbasis)


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ShareholdingPatternandSharePrice

As on March 31, 2009

60.08%

4.17%

Others, 1.0%

FIs/ Banks/

MFs, 0.4%

Promoters,

55.0%

Foreign

Institutional

Investors,

39.7%

Public, 2.2%Body

Corporate,

1.7%

Equity Shares Outstanding-17,286,285

-

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

0

1000000

2000000

3000000

4000000

5000000

6000000

Apr-06 Aug-06 Jan-07 May-07 Oct-07 Feb-08 Jul-08 Dec-08 May-09

Total Volume Close Price

Share Price and Volume

# of Shares Rs.


23/29

23

Restructuring of Subsidiaries EduInfra and EduManage into one entity - EducompInfrastructure & School Management Services Ltd.

Acquired 51% stake in learning.com

Educomp forms a 50:50 Joint Venture with Raffles Education Corp. for Professional Educationin India

Acquired 76% stake in A-Plus Education Solutions Pvt Ltd

Acquired 50% stake in Eurokids International

Investment in EduInfra and EduManage to set up private schools

Acquired Ask n Learn, Three Bricks E-Services, Savvica Inc (70.5%) & AuthorGen Tech (51%)

Raised $80mn via FCCBs

Launched first pre-school in Delhi under the brand Roots to Wings

Raised $25mn via FCCBs

Launch of Mathguru.com

Successful Public Issue

MAY 2008

MakingofEducomp

2006

Incorporation

Started Indias first K12 content development center

Conversion to Public Ltd. Company Entry into Trading operations

2000

2002 Established US subsidiary- Edumatics Corporation

Launched Learning Mate Nhance- Learning Content Management Platform

2003 Launched Smart Class Content solution

ISO 9001:2001 certification for ICT solutions

Signed US pilot with Santa Barbara School District

Entered Asia Pacific market with pilots in Singapore

Set up R&D division

2004

2005 Launched Online tutoring service

CNBC Emerging India Award

SM1- highest credit rating from CRISIL

2007

1994-5

2008

2009

Entered into vocational business

Launched smartclassonline.com

Raffles Millennium International Institutes in Delhi and Bangalore were launched


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24

Financials

S B l Sh


25/29

25

-

0.200.40

0.60

0.80

1.00

1.20

1.40

FY06 FY07 FY08

-

10

20

30

40

Debt Equity ratio Interest Coverage

5.1

7.3 7.6

-

2.00

4.00

6.00

8.00

FY06 FY07 FY08

Current Ratio

374.8949.4

2890.0

748.4

1519.2

4029.2

0

1000

2000

3000

4000

5000

FY06 FY07 FY08

Gross Block Net current assets

Healthyassetgrowth Strongliquidityposition

Leveragingbalance

sheet

for

optimum

ROE

All figures in Rs. mn except per share figures

Currentratio=CurrentAssets/CurrentLiabilities

Debt Equity ratio = Loan Funds / Shareholders Fund; Interest Coverage = (PBT +Finance Charges) / Finance Charges

Gross Block cagr 178%Net current assets cagr 132%

ROE=Profitaftertax,minorityinterest&preacquisitionprofits /Shareholders

Fund

StrongROE

as

aresult

of

capital

structuring

ROE

24%16%

25%

0%

10%

20%

30%

FY06 FY07 FY08

ROE

StrongBalanceSheet

b i G h


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26

11.2

18.0

41.7

11.2

15.9

35.4

0

10

20

30

40

50

FY06 FY07 FY08

Basic EPS Diluted EPS

18%

15%

11%10%9%

12%

0%

5%

10%

15%

20%

FY06 FY07 FY08

Admin Exp./Sales Depriciation/Sales

0

200

400

600

800

FY06 FY07 FY0820%

22%

24%

26%

28%

30%

Profit after tax and before prior period items Net Margin

555.2

1100.8

2860.8

219.7454.4

1064.0

0

500

1000

1500

2000

2500

3000

3500

FY06 FY07 FY08

Sales & Service income Profit before tax

StablemarginswithhealthyprofitgrowthOver100%growthintopandbottomline

Improvingoperation

efficiency Strong

growth

in

EPS

~Good

valuations

Income cagr 127%PBT cagr 120%

RobustEarningsGrowth

AllfiguresinRs.mnexceptpersharefigures

G h i 2009 i d


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27

IncreaseacrosseachsegmentoftheEnterpriseBusiness

Robustrevenue

and

profit

growth

AllfiguresinRs.mnexceptpersharefiguresandoperationalnumbersinthefirstchart

41.735.4

76.8 75.0

0102030

405060708090

Basic EPS Diluted EPS

FY08 FY09

3141.2

1134.2

286.6 405.2256.3

933.31277.2

153.6

-

1,000.0

2,000.0

3,000.0

4,000.0

Smart Class ICT Professional

Development

Retail &

Consulting

FY08 (Audited) FY09 (Unaudited)

90 321 933

1737

600

2808

6004

12012

440 655 961

1412

-2,000

4,000

6,000

8,000

10,000

12,000

14,000

FY06 FY07 FY08 FY09

Smart Class Schools ICT Schools No. of Teachers Trained (In'000)

6478.7

3020.3

1327.4

705.6

1273.4

3038.4

-2,000

4,000

6,000

8,000

Total Income EBITDA PAT

FY08 (Audited) FY09 (Unaudited)

Growthin2009continued


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28

GrowthStrategy

I t t hi hli ht


29/29

ContinuestogroworganicallyandthroughJV/acquisition/ContinuestogroworganicallyandthroughJV/acquisition/

alliancesalliances

InvestmentInvestment

HighlightsHighlights

OneofthelargestplayersinIndianeducationsectorwithOneofthelargestplayersinIndianeducationsectorwith

clientbaseofover23,000schoolsand11millionstudentsclientbaseofover23,000schoolsand11millionstudents

Presentinarecessionproofindustry,targetingmandatoryPresentinarecessionproofindustry,targetingmandatory

educationspendratherthandiscretionaryspendeducationspendratherthandiscretionaryspend

RevenueandPATCAGRofover120%inlastthreeyearswithRevenueandPATCAGRofover120%inlastthreeyearswith

lowmarketpenetrationinmajorproductlineslowmarketpenetrationinmajorproductlines

Best positionedbecauseofitslargerepositoryofproducts,Best positionedbecauseofitslargerepositoryofproducts,

annuitydrivenmodelandincreasingglobalpresenceannuitydrivenmodelandincreasingglobalpresence

Targetingentireeducationvaluechain:preschool,KTargetingentireeducationvaluechain:preschool,K12,12,

highereducationandvocational educationhighereducationandvocational education

ExperiencedManagementTeamExperiencedManagementTeam

BestintheindustryBestintheindustry

MacrofactorsandgovernmentsupporttoencourageprivateMacrofactorsandgovernmentsupporttoencourageprivate

participation

and

growth

in

the

sectorparticipationandgrowthinthesector

LeadershippositioninallmarketsegmentsinIndiawithhighLeadershippositioninallmarketsegmentsinIndiawithhigh

marketshares,

best

positioned

to

capture

future

growth

market

shares,

best

positioned

to

capture

future

growth

Investmenthighlights

Edu Comp Corporate Presentation

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