STI Education Systems Holdings, Inc. · 2019-06-24 · STI ESG’s Board of Directors approved the...

STI Education Systems Holdings, Inc.

Full Year Results ending March 31, 2018 and Third Quarter Results ending December 31, 2018

1

Education for Real Life

STI Holdings Network of Schools

2

Who We Are

85,797 total students

² STI Holdings owns, maintains, and operates the Philippines’ largest, private, for-profit network of educational institutionswith more than 85,000 students enrolled in 65 STI-branded colleges and 10 education centers, one university (STI WestNegros University) and one non-STI branded college (iACADEMY).

² STI ESG offers associate and baccalaureate programs in Information and Communications Technology, Tourism andHospitality, Education, Business Administration, and Communications. STI WNU, for its part, offers basic education andtertiary courses in Engineering, Education, Criminology, Business Administration, Hospitality and Tourism Management,Computer Science and Information Technology, and Maritime Training Courses which are required by the Maritime IndustryAuthority for officers and crew on board Philippine- and/or foreign- registered ships operating in Philippine and/orinternational waters. It also offers post-graduate courses such as Master’s degrees in Business Administration, PublicAdministration, Nursing, and Education, and Doctorate degrees in Public Administration and Educational Management.iACADEMY offers degree programs in animation, multimedia arts and design, fashion design and technology, softwareengineering, game development, web development, marketing management, financial management and real estatemanagement. STI ESG, STI WNU and iACADEMY also offer Senior High School programs.

² STI ESG also has a 20% interest in Maestro Holdings which provides educational saving plans, among others.


79,960 84,730

103,727 105,031

85,797

-

20,000

40,000

60,000

80,000

100,000

120,000

SY 2014-2015 SY 2015-2016 SY 2016-2017 SY 2017-2018 SY 2018-2019

STI Holdings Combined Student Enrollment

3

* Updated student enrollment inclusive of June and August batches of STI ESG tertiary and late enrollment for all schools

*


Nationwide presence with wide range of program offerings

4

Wide breadth of programs with tailored course offerings to suit market demand

HealthcareICT Education

EngineeringHospitality Liberal Arts

§ ■ Reaches a larger student base and students not otherwise serviced by other institutions

§ ■ Encompasses a mixed mode of both wholly-owned and franchised schools based on geographic demand

Business

2

13

Academic

programs

Courseware

Development

Empl

oyer

s

STI Branded University Colleges ECs TotalOwned 1 36 2 39Franchised 32 5 37Total 1 68 7 76

Non-STI BrandedOwned 1 1Total 1 69 7 77

STI Education Services Group

5


STI ESG Student Enrollment

6

* Updated student enrollment inclusive of June and August batches of STI ESG tertiary and late enrollment

72,616 77,645

96,279 96,531

76,841

-

20,000

40,000

60,000

80,000

100,000

SY 2014-15 SY 2015-16 SY 2016-17 SY 2017-18 SY 2018-19

*


STI ESG Student Enrollment (Owned vs. Franchised)

7

39,404 42,878

52,687 54,366

44,298

33,212 34,767

43,592 42,165

32,543

-

20,000

40,000

60,000

80,000

100,000

SY 2014-15 SY 2015-16 SY 2016-17 SY 2017-18 SY 2018-19STI Owned Franchised

54%

46%

55%

45%

56%

44%

58%

42%

55%

45%


STI ESG Student Enrollment (CHED/TESDA/DepEd Mix)

8

59,184 66,445

53,016

40,147 38,582

12,237 9,623

5,692

2,191 1,843

1,195 1,577 37,571

54,193

36,416

-

20,000

40,000

60,000

80,000

100,000

SY 2014-15 SY 2015-16 SY 2016-17 SY 2017-18 SY 2018-19CHED TESDA DepEd

81%

17%

2%

55%

6%

39%

42%

2%

56%

50%

2%

48%

86%

12%

2%


STI ESG Student Enrollment (By Program, SY 2018-2019)

9

3%17%

0%

6%

41%

33%

0%

Arts and SciencesBusiness and ManagementHealthcare and EducationEngineeringInformation and Communications TechnologyTourism and Hospitality ManagementGraduate Studies

TERTIARY

Total No: 40,425

18%

8%

16%

5%29%

24%0%

Accountancy, Business and ManagementHumanities and Social SciencesScience, Technology, Engineering and MathematicsGeneral AcademicInformation and Communications TechnologyHome EconomicsIndustrial Arts

SENIOR HIGH SCHOOL

Total No: 36,416


6,466

6,091 6,073

6,772 6,665

5,600

5,800

6,000

6,200

6,400

6,600

6,800

SY 2014-15 SY 2015-16 SY 2016-17 SY 2017-18 SY 2018-19

STI WNU Student Enrollment

11

* Updated student enrollment inclusive of late enrollment

*


STI WNU Student Enrollment (CHED/TESDA/DepEd Mix)

12

4,657 4,803

3,989

3,336 3,499

648 198

1,161 1,090

2,084 3,436 3,166

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

SY 2014-15 SY 2015-16 SY 2016-17 SY 2017-18 SY 2018-19CHED TESDA DepEd

72%

10%

18%

79%

3%

18%

66%

34%

49%

51%

52%

48%


STI WNU Student Enrollment (By Program, SY 2018-2019)

17%

3%

18%

19%

21%

19%3%

Accountancy, Business and ManagementGeneral AcademicsHumanities and Social SciencesScience, Technology, Engineering and MathematicsHome EconomicsInformation and Communications TechnologyMaritime

SENIOR HIGH SCHOOL

Total No: 2,218

TERTIARY

Total No: 3,499

4% 10%

12%

9%

17%12%6%

0%

30%

Arts and SciencesBusiness and ManagementEducationEngineeringInformation and Communications TechnologyTourism and Hospitality ManagementCriminologyMaritimeGraduate Studies

13


878 994

1,375

1,728

2,291

-

400

800

1,200

1,600

2,000

2,400

SY 2014-15 SY 2015-16 SY 2016-17 SY 2017-18 SY 2018-19

iACADEMY Student Enrollment

15

* Updated student enrollment inclusive of late enrollment

*


iACADEMY Student Enrollment (CHED/DepEd Mix)

16

878 994 945

783

1,121 430

945

1,170

-

400

800

1,200

1,600

2,000

2,400

SY 2014-15 SY 2015-16 SY 2016-17 SY 2017-18 SY 2018-19CHED DepEd

69%

31%

100%100% 45%

55%

49%

51%


58%

9%

33%

Arts and SciencesBusiness and Management

Information and Communications Technology

6%5%

22%

22%5%

40%

Accountancy, Business and ManagementHumanities and Social SciencesComputer ProgrammingAnimationFashion DesignMedia and Visual Arts

iACADEMY Student Enrollment (By Program, SY 2018-2019)

SENIOR HIGH SCHOOL

Total No: 1,170

TERTIARY

Total No: 1,121

17

Full Year 2017 - 2018 Financial & Operating Results

18


Capital Expenditures - March 31Key Balance Sheet Items

STI Holdings Balance Sheet Overview

(PHP millions)March 31,

2014 2015 2016 2017* 2018

Cash 583 803 665 3,199 1,858

PP&E 4,421 5,581 5,610 6,876 8,427

Investments in and Advances to Associates

1,532 1,622 1,425 857 42

TOTAL ASSETS 8,299 10,036 10,500 14,052 14,416

Total Loans / Bonds Payable 288 1,387 1,151 4,676 4,190

TOTAL LIABILITIES 1,171 2,380 2,270 5,740 5,613

EQUITY 7,128 7,656 8,230 8,312 8,803

(PHP millions)

1,050

1,227

335

1,579 1,615

2014 2015 2016 2017 2018

* Restated19

Education for Real Life* Restated20

Fiscal Years Ending March 31 2014 2015* 2016* 2017* 2018(PHP millions)

Revenues ₱1,918 ₱2,224 ₱2,577 ₱2,933 ₱3,083

Direct Costs 607 717 805 945 1,014

Gross Profit 1,311 1,507 1,772 1,988 2,069

Operating Expenses 838 990 1,069 1,066 1,194

Operating Profit 473 517 703 922 875

Other Income (Expenses) –Net 236 283 407 (264) (294)

Income Before Income Tax 709 800 1,110 658 581

Net Income 655 731 883 558 503

EBITDA 690 848 1,127 1,413 1,392

Key Profit & Loss Data


Breakdown of Revenues for FY 2017 - 2018

Strong Growth in Revenues

21

Revenues(PHP millions) (as a percentage of total)

STI continues to achieve strong revenue growth, with a CAGR of 12.6% from 2014-2018, mainly attributable to the steady increase in the number of enrollees in STI ESG owned and franchised schools.

1,918

2,224

2,577

2,933 3,083

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2014 2015 2016 2017 2018

Tuition & Other School

Fees84.8%

Educational Services

6.8%

Royalty Fees0.7%

Educational Material and

Supplies5.8%

Other Services

2.0%


² STI increased its gross profit from PHP1,311 million in FY 2013-2014 to PHP2,069 million in FY 2017-2018 or a CAGR of 12%

² Operating profit has increased from PHP473 million in FY 2013-2014 to PHP875 million in FY 2017-2018 or a CAGR of 17%

² EBITDA has increased from PHP690 million in FY 2013-2014 to PHP1,392 million in FY 2017-2018 or a CAGR of 19%

² The increases in gross profit, operating profit and EBITDA margins are primarily attributable to the economies of scale that STI enjoys as revenues increase. However, the decline in margins from FY 2016-2017 to FY 2017-18 is largely due to the changes in the mix of students that the Company has.

Operating Profit and Margin Profile

EBITDA(PHP millions)

Gross profit(PHP millions)

Operating profit(PHP millions)

1,311 1,507

1,772 1,988 2,069

50.0%

55.0%

60.0%

65.0%

70.0%

-

500

1,000

1,500

2,000

2,500

2014 2015 2016 2017 2018

Gross Profit Gross Profit Margin

690 848

1,127 1,413 1,392

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

- 200 400 600 800

1,000 1,200 1,400 1,600

2014 2015 2016 2017 2018

EBITDA EBITDA Margin

473 517

703

922 875

0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%

-

200

400

600

800

1,000

2014 2015 2016 2017 2018

Operating Profit Operating Profit Margin

22


STI ESG’s Board of Directors approved the disposal of its 20% stake in Maestro Holdings on June 27, 2017. With this decision to dispose of the Maestro investment, STI ESG’s investment in Maestro was reclassified to Noncurrent asset held for sale under the current assets portion of the Statements of Financial Position.

With this, STI ESG ceased the use of the equity method of accounting for its investment in Maestro on June 30, 2017.

23

(PHP millions)

Equity in Net Earnings/(Losses) of Associates & Joint Ventures*

*For the years ended March 31.Figures for 2016 and 2017 have been restated.

233

105

(155)

(244)(222)

(250)

(200)

(150)

(100)

(50)

-

50

100

150

200

250

2014 2015 2016 2017 2018


Maestro Holdings Book Value*Maestro Holdings Revenue*

*For the years ended December 31. Revenues for 2016 and Book Value for 2015 and 2016 have been restated.

(PHP millions) (PHP millions)

Maestro Holdings – Financial Highlights

24

3,207 2,342

1,732

1,807

1,855 2,028

-

1,000

2,000

3,000

4,000

5,000

6,000

2015 2016 2017

Trust Funds Premiums

6,453

6,258

5,532

5,000

5,200

5,400

5,600

5,800

6,000

6,200

6,400

6,600

2015 2016 2017

3rd Quarter ending December 31, 2018 Financial & Operating Results

25


Financial Highlights

26

Nine months ended December 31

Y-o-Y Change (%)**PHP millions (Except gross profit, operating and EBITDA margins)

2017*(SY 2017-2018)

2018(SY 2018-2019)

Unaudited

RevenuesTuition & Other School Fees ₱ 1,855 ₱ 1,663 (10)Educational Services 149 135 (9)Royalty Fees 13 13 (8)Others 44 43 (2)Sale of educational materials & supplies 171 143 (16)

Total Revenues 2,232 1,997 (11)

Gross Profit 1,484 1,233 (17)Gross Profit Margin 66% 62%

Operating Profit (Loss) 646 262 (59)

Operating Margin 29% 13%

EBITDA 1,027 702 (32)

EBITDA Margin 46% 35%

Net Income 312 190 (39)

Core Income (Loss) 534 189 (65)* Restated**Percentage changes were derived using figures in the financial statements and Financial Highlights and Key Performance Indicators section of the report for the quarterly period ended 31 December 2019.


Revenues, Gross Profit & EBITDA

NINE MONTHS’ REVENUES

NINE MONTHS’ GROSS PROFIT

NINE MONTHS’ REVENUES & EBITDAPHP millions

PHP millions

PHP millions

27

1,855 1,663

162 148

215 186

3Q 2017-2018 3Q 2018-2019Tuition & Other School Fees Educational Services & Royalties

Educational Materials & Others

2,232 1,997

1,027 702

3Q 2017-2018 3Q 2018-2019Total Revenues EBITDA

1,484 1,233

3Q 2017-2018 3Q 2018-2019


Operating Profit and Margin Profile

28

PHP

Mill

ions

PHP

Mill

ions

PHP

Mill

ions

1,484 1,233

66% 62%

0%

20%

40%

60%

80%

100%

- 150 300 450 600 750 900

1,050 1,200 1,350 1,500

3Q 2017-2018 3Q 2018-2019

Gross Profit Gross Profit Margin

646

262

29%

13%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

100

200

300

400

500

600

700

3Q 2017-2018 3Q 2018-2019Operating Profit Operating Profit Margin

1,027

702

46%

35%

30%

35%

40%

45%

50%

-

200

400

600

800

1,000

1,200

3Q 2017-2018 3Q 2018-2019

EBITDA EBITDA Margin

STI Education Systems Holdings, Inc. · 2019-06-24 · STI ESG’s Board of Directors approved the...

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