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.
Education for Real Life
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
*
Education for Real Life
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
Education for Real Life
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
*
Education for Real Life
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%
Education for Real Life
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%
Education for Real Life
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
10
Education for Real Life
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
*
Education for Real Life
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%
Education for Real Life
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
14
Education for Real Life
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
*
Education for Real Life
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%
Education for Real Life
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
Education for Real Life
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
Education for Real Life
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%
Education for Real Life
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
Education for Real Life
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
Education for Real Life
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
Education for Real Life
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.
Education for Real Life
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
Education for Real Life
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