INVESTOR PRESENTATION Hospitality Schools - … top 3 hospitality schools ... • Glion & Les Roches...
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Transcript of INVESTOR PRESENTATION Hospitality Schools - … top 3 hospitality schools ... • Glion & Les Roches...
Hospitality Schools INVESTOR PRESENTATION
March 15, 2016
Hospitality Schools 1
TRANSACTION OVERVIEW
SOLID UNDERLYING MARKET AND BUSINESS MODEL
STRATEGY
KEY FINANCIALS
18
14
2
3
TRANSACTION OVERVIEW
Hospitality Schools 3
World-class Swiss hospitality schools
TNS 2013 ranking:
Glion (est. 1962) #2
Les Roches (est. 1954) #3
2015 revenues CHF 173m
Adjusted EBITDA* CHF 28m
Margin 16,1%
Over the last decades, both schools have consistently been ranked amongst the top 3 hospitality schools in the world, with Glion being awarded in 2015 “the Best Hospitality Management School”
Network of 8 campuses leverages shared global operations, technology and best practices to deliver individualized and international education programs
Global footprint
8 campuses in 6 countries 20,000+ students
in 125+ countries
Accreditation from New
England Association for Schools and Colleges (NEASC)
World-class education offering
private pay 100%
Alumni
c.80% of international students
Hospitality Schools 4
* Estimated standalone pro-forma EBITDA based on Eurazeo analysis
Schools at a glance
30%
17% 13%
9%
4% 4%
23%
Corp. & Mgmt. Training
Rooms Division
Food & Beverage
Sales & Mkg.
Finance
Events
Other
Campuses: 3
Faculty: 84
Alumni: 12,000+
15 Enrollment : 2,000
• Top 3 ranked Hospitality program
in the world
• ~55 years of history
• European heritage
• Management learning
• Business and management focus
within hospitality
• Premium price point
Job opportunities
post graduation
44%
6%
3%
41%
Hotels
2% Tourism
Education
Other
2% Food & Beverage
2% Finance
Comm. & Media Job opportunities
post graduation
Campuses: 5
Faculty: 153
Alumni: 10,000+
15 Enrollment (new/total): 2,900
• Top 3 ranked Hospitality program
in the world
• ~60 years of history
• International heritage
• Global management learning
complemented by strong craft-
based teaching
• Hotel and hospitality, focus on
innovation and entrepreneurship
• Large price spectrum, emphasis
on global learning
“Business education for an international career in the world of luxury hospitality”
“Global and entrepreneurial hospitality management education that helps you break boundaries”
Hospitality Schools 5
Chicago(2)
Founded: 2015 Co-located on the Kendall College campus, Les Roches Chicago is the only Swiss hospitality school in the United States
London
Founded: 2013(1)
Co-located on the University of Roehampton campus, a full-service university with over 10,000 students
Bluche
Founded: 1954 Flagship campus of the Les Roches brand offers students a unique global and entrepreneurial hospitality education
Shanghai
Founded: 2004 Private college located in the heart of Shanghai, offers undergraduate and postgraduate diploma programs
Amman
Founded: 2008 Located in the Royal Academy of Culinary Arts a non-profit, private Jordanian associate college
Marbella
Founded: 1995 Located in the Mediterranean luxury resort, the original Les Roches branch campus offers a strong link to the tourism industry, and prepares students for a global career in hospitality and leisure services
Glion
Les Roches
Campus location
by brand:
(1) UKBA license received in November 2015
(2) Programs to be offered at Laureate’s Kendall College
Expected to be operational in 2016
Founded: 1962 Montreux is the original residential campus and the starting point for all undergraduate students Bulle is home to graduate students and most undergraduate students, who move there in their second year
Montreux Bulle
• Both English and French entry options
• Emphasis on craft-based learning and
international internship experience
complements world-class classroom
teaching
• International study programs
• Positions graduates for an international
career
• NEASC (US) and local accreditations
Educational offering
Worldwide campuses network
Hospitality Schools 6
Investment rationale Strong brands with worldwide recognition, rich heritage & further potential
• Swiss education recognition for quality, safety (“a cocoon”), discipline, work ethos
• Glion & Les Roches respectively recognized as #2 and #3 in hospitality higher education worldwide
• Students sourcing and placement in more than 90 countries, creating unparalleled alumni networks
Solid underlying markets, both on the recruiters’ side, and students’ sourcing
• Positive outlook of hospitality markets in general, and premium international hotel chains in particular, offering wide
opportunities to young graduates
• Worldwide lack of well-groomed graduates for high-end hospitality market brings comfort on low sensitivity to any mid-term
change in industry trends
• On the other end, growing addressable base of high-schools, together with untapped pockets to be tackled
Consistent value proposition & fully private financing
• True life experience for students enrolled: cosmopolite population, outstanding environment, tight grooming
• Consistent high employability ensuring job opportunities as soon as graduation
• No public subsidies for either students or schools, avoiding any jeopardy long-term
International assets already, & still further room to develop in new geographies
• Already 80% of international students and 8 campuses around the world
• Additional campuses in the US (Les Roches) and in the UK (Glion), ramping up with appealing prospects
Further development potential for both schools
• Keep leveraging on respective strengths & positioning of each schools
• Increase investments in selected areas to improve on-campus experience fro students (e.g. facilities, dorms)
• Reinforcing Sales & Marketing resources to capture growth in relevant geographies
• Explore further initiatives
Hospitality Schools 7
Building the next stage with Eurazeo
Hospitality Schools 8
• Building a new standalone group, with full focus, and leveraging on its specificities
• New backbone structure to be set-up, with smooth transition agreements from
Laureate, relocating HQ functions in Europe
• Full focus & alignment from management team to shareholders on actual specificities
and needs from these schools
• Additional resources to further develop both schools
• Access to human & financial resources of Eurazeo to keep improving academic
excellence, support new locations and invest in facilities
• Benefit of Eurazeo’s expertise and networks in both Hospitality & Luxury sectors
SOLID UNDERLYING MARKET AND BUSINESS MODEL
Hospitality Schools 9
Positive outlook of hospitality markets Evolution of # of rooms supply worldwide
▲ Geographical dynamics driving the hospitably market
– Sustained global rooms supply growth driven by the APAC
and North America regions
– Europe largest hospitality market worldwide though slower
growth into 2020
– Based on hotel outlets that provide lodging incl. independent
and chained operators as well as all company owned, leased,
managed and franchised outlets
7,4 7,5 7,6 7,7 7,8 7,9 8,5
5,1 5,2 5,2 5,2 5,3 5,3 6,4
3,6 3,9 4,1 4,4 4,7 5,1
6,5
1,3 1,7 1,7 1,8 1,9 1,9
2,2
1,3 1,3 1,4 1,4
1,4 1,5
2,0
19,0 19,5 20,0 20,6
21,1 21,7
25,5
2009 2010 2011 2012 2013 2014 2020e
Europe North America APAC LatAm MEA
CAGR 09-14
CAGR 14-20
+3%
+4%
+7%
+1%
+1%
+5%
+2%
+4%
+3%
+1%
+3% p.a.
+3% p.a.
Accommodation rooms inventory by geography
and size (# rooms in 2014)
▲ Further potential for
hotel chain penetration
vs. independent,
worldwide apart
from the US
▲ Largest international hotel
chains over-represented
in Glion & Les Roches’
top employers
– Need for well-trained,
international profiles
from Hotel Chains point
of view
– Looking for recognized
brands, career
opportunities &
international curriculum
from students point of
view
9.1
(42%)
12.6
(58%)
21,7
World
Independent
Chains
Growth trend
Hospitality Schools 10
Scarcity of high-end graduates
Hospitality Schools 11
Premium hospitality schools supply ('000 students/graduates p.a.) Recruitment demand from premium chains
6,9 8,5 10,7
1,2 1,5
1,9 8,1
10,0
12,6
2010 2015 2020
Post-graduate Under-graduate
15,4 17,2
21,0
2010 2015 2020
+2% p.a.
+4% p.a.
+4% p.a.
+5-7% p.a.
(1)
Source: Roland Berger Notes: (1) Estimate based on Glion/ Les Roches ratio
Shortage of
supply to
premium hotel
chains
Perspectives from main employers
Groups
# Students enrolled
2013-2015 105 52 40 29 25
World pipeline (# rooms)
+240,000 rooms +34% vs. existing
capacities
+108,000 rooms +31% vs. existing
capacities
n.a.
+230,000 rooms +32% vs. existing
capacities
+55,000 rooms +36% vs. existing
capacities
Worldwide recognition in hospitality mgmt.
Hospitality Schools 12
Taylor Nelson Sofres (TNS) Top 10, 2013
# School Fees(1) Country vs. 2007 vs. 2010
1 Ecole Hôtelière de
Lausanne 174 = – = –
2 Glion, Glion & Bulle 157 = – = –
3 Les Roches, Bluche 146 = – -1
4 Cornell University 221 = – -2
5 Hotel School The Hague 54 = – = –
6 Les Roches, Marbella 92 n.a. n.a.
7 Oxford Brookes University 65 -1 +1
8 Blue Mountain, Leura 67 n.a. n.a.
9 Hotel School Vatel2) 27 n.a. -2
10 César Ritz Colleges 135 -1 -1
Glion Institute of Higher Education Receives Worldwide Hospitality Awards – BEST
HOSPITALITY MANAGEMENT SCHOOL 2015
(10/11/2015)
Glion Institute of Higher Education Receives AIAR Award for the Best Company
for Leadership in Higher Education, Europe
(10/10/2014)
Glion, one of the world’s top three institutes of higher education for an international
career in hospitality management
(TNS Global Survey, 2013)
Source: TNS; Hotelier MiddleEast; RolandBerger analysis Note: (1) Total course fees in kEUR (2) Depends on the campus
(3) 26% of students rate “reputation
• Stable, high employment
rates (above 90%) for both
schools as soon as graduation
• Underlying industries
(hospitality & client-facing
industries) growing
at consistent rates
• Glion & Les Roches’ students
considered extremely
“plug & play”
Transformative life experience
Asia
31%
Americas
1% Africa
2%
Europe
62%
Middle East
4%
EXCEPTIONAL SETTING AND
LEADING FACILITIES IN
SWITZERLAND
Campus of Montreux (Glion)
World reputation of Swiss hospitality
Switzerland is a safe & secure
cocoon in a tense international
context
CLOSELY ACCOMPANIED
STUDENTS
All students living on campus
1 teacher for every 20 students
COSMOPOLITAN : 95
NATIONALITIES AND ALMOST
80% OF INTERNATIONAL
STUDENTS
Asia
48%
Americas
10%
0%
Europe
42%
Middle East & Africa
0%
Hospitality Schools 13
STRATEGY
Hospitality Schools 14
Addressable market
still largely unexplored in several geographies
Switch to direct recruitment
in some selected markets while leveraging
agents expertise on others
Increase proximity with agents for indirect
enrollment (training, information systems,
visits)
Additional human & financial resources & roll-
out of industry’s best practices
Strategy for the Group
Hospitality Schools 15
Sales & marketing – Enrollment
• Recent change in leadership
• Further invest in facilities
• Continuous academic improvement
• Support London opening & ramp-up
• Strong management team already in place
• Support Chicago opening & ramp-up
• Further integrate campuses around the
globe to facilitate students’ movements
KEY FINANCIALS
Hospitality Schools 16
Group Financials REVENUE (in CHFm)
Adjusted EBITDA* (in CHFm)
154
164
173
2013A 2014A 2015A
CAGR 13-15 +5.9%
21
25
28
13,6%
15,1% 16,1%
2013A 2014A 2015A
EBITDA EBITDA margin
CAGR 13-15 +15,3%
Hospitality Schools 17
* Estimated standalone pro-forma EBITDA based on Eurazeo analysis
MANAGEMENT TEAM
Hospitality Schools 18
Management team
Michael Huckaby Chief Executive Officer
▲ CEO Hospitality & Culinary Education
since 2012
▲ VP for Enrollment from 2009 to 2012
▲ VP for Marketing from 2005 to 2008
▲ Various marketing positions in
Pharmaceuticals and Consumer
Products
Stephanie Furlough-Morris Chief Financial Officer
▲ VP Global Products & Services –
Hospitality since 2011
▲ BUs Director of Finance at Black &
Decker from 2005 to 2011
▲ Several positions at Black & Decker
Guy Bentley CEO, Glion Institute of Higher Education
▲ CEO of Glion WW since sept-15
▲ CEO of Blue Mountains (Laureate -
Australia) from 2005 to 2015
▲ Previous experiences in Hospitality
Education & Hospitality industry
Sonia Tatar CEO, Worldwide Les Roches
▲ CEO of Les Roches WW since 2013
▲ CEO of Les Roches Bluches since
2011
▲ Previous positions at INSEAD,
EuroDisney, Hyatt
Emily Knight VP, Head of Enrollment
▲ VP for Enrollment since sept-15
▲ CEO of Kendall College from 2012 to
dec-15
▲ VP Business dvpt & partnerships from
2011 to 2012
▲ Various positions at Pearson and New
England University
Hospitality Schools 19
Transaction Summary
• Acquisition of 100% of the share capital
• Enterprise Value of CHF 380m
• Equity investment for Eurazeo of approx. CHF 220m (€200m)
• Closing is expected within next few months
• Up to CHF 170m unitranche financing from ICG
Hospitality Schools 20
Conclusion
Hospitality Schools 21
Deep addressable market
still largely unexplored
Strong brands
with high recognition
Growth in
hospitality market Strong
management team
Operational
transformation
Eurazeo
expertise Expansion in
new geographies