Estácio: 1Q11 Conference Call Presentation

1. 1Q11 RESULTS
Eduardo Alcalay Rogério Melzi
CEO CFO and Investor Relations Officer
May, 2011

2. HIGHLIGHTS
Expansion of the student base following the second cycle of RECORD-HIGH
ENROLLMENT
Addition of 73,500 new students (+24.4%)
Expansion of 11.6% in the total student base
Greater efficiency in the main cost and expense lines
Start of consolidation phase, with synergic and strategic acquisitions
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3. RESULTS’ HIGHLIGHTS
Continued growth and margin gains:
EBITDA margin expansion of 2 p.p.
Main Indicators (R$ MM) 1Q10 1Q11 Change
Net Revenue 256.0 275.8 7.7%
Recurring EBIT 32.3 38.7 19.8%
Recurring EBIT Margin 12.6% 14.0% 1.4 p.p.
Recurring EBITDA 39.6 47.9 21.0%
Recurring EBITDA Margin 15.5% 17.4% 1.9 p.p.
Net Income 25.6 28.7 12.1%
Recurring Net Income 31.3 33.1 5.8%
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4. RECORD ENROLLMENT
STUDENT ENROLLMENT
Improvement in Brand Image On-Campus (In thousand students)
Distance Learning
Perception of Quality/Excellence Total Student
73.5
Management – Engagement/Discipline +24.4%
59.1
Estacio Cup and Variable Payment 12.0
10.2
61.5
48.9
GROWTH IN
ENROLLMENT 1Q10 1Q11
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5. OPERATING PERFORMANCE – STUDENT BASE
STUDENT BASE – EDUCATIONAL SEGMENT
On-Campus (In thousand students)
Distance Learning
Total Student Base
241.4
+11.6%
216.4
30.9
16.4
+5.3%
200.0 210.5
1Q10 1Q11
31,000 Distance Learning students at the end of 1Q11
25% growth in FIES student base from 4Q09, totaling 8,100 students in 1Q11
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6. OPERATING REVENUE
OPERATING REVENUE
(In R$ million)
Growth of 5.3% in the on-campus average ticket
398.2
Passthrough of inflation in the on-campus average ticket
+9.0%
365.4
122.4
109.4
+7.7%
(R$) 1Q10 1Q11 Change
256.0 275.8
Average On-Campus Ticket 412.9 434.8 5.3%
Average Distance Learning Ticket 166.7 171.4 2.8%
1Q10 1Q11 * Average on-campus ticket excluding the acquisitions of FAA and FAL.
Net Revenue Deductions Gross Revenue
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7. CASH COSTS
Vertical Analysis (% Net Operating Revenue) 1Q10 1Q11 Change
Recurring Cash Cost* -62.0% -61.2% +0.8 p.p.
Personnel -39.1% -38.4% +0.7 p.p.
Brazilian Social Security Institute (INSS) -8.0% -8.8% -0.8 p.p.
Rentals, Condominium Fees and Municipal
-9.2% -9.1% +0.1 p.p.
Property Tax
Textbooks Materials -0.9% -1.1% -0.3 p.p.
Others -4.7% -3.7% +1.0 p.p.
* Cost of Services excluding non recurring and depreciation.
Perssonnel eficiency offsets Brazilian Social Security Institute (INSS) step-up
Budget Matrix reflects on Rentals and Others
Textbooks Materials: new internal structure
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8. SELLING, GENERAL & ADMINISTRATIVE EXPENSES
(SG&A)
Vertical Analysis
1Q10 1Q11 Change
(% Net Operating Revenue)
SG&A* -23.8% -23.5% +0.3 p.p.
Selling Expenses -9.6% -10.5% -0.9 p.p.
Provision for Doubtful Debts -2.0% -1.9% +0.1 p.p.
Marketing -7.6% -8.6% -1.0 p.p.
General Administrative Expenses* -14.3% -13.1% +1.2 p.p.
Personnel and Payroll charges -6.2% -6.5% -0.3 p.p.
Others -8.1% -6.6% +1.5 p.p.
* SG&A Expenses excluding non recurring and depreciation.
G&A efficiency offsets Maketing investment
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9. PROVISION FOR DOUBTFUL DEBTS AND RECEIVABLES
Accounts Receivable (R$ MM) 1Q10 2Q10 3Q10 4Q10 1Q11
Gross Accounts Receivable 208.8 249.9 256.3 201.8 228.8
FIES 4.6 5.4 17.5 15.3 21.2
Tuition Monthly Fees 179.5 220.0 207.9 168.2 184.2
Financed Tuition 24.7 24.6 30.9 18.3 23.5
Cards Receivable 1.1 6.0 11.8 6.9 12.8
Checks Receivable 15.5 16.8 16.2 6.9 6.6
Fees Receivables 8.2 1.8 2.9 4.4 4.1
Provision for Doubtful Debts (85.1) (102.2) (107.3) (45.4) (49.9)
Net Accounts Receivable 123.7 147.7 148.9 156.4 179.0
(-) FIES (4.6) (5.4) (17.5) (15.3) (21.2)
Net Accounts Receivable Ex. FIES 119.1 142.3 131.5 141.1 157.8
Days Receivables Ex. FIES* 43 51 47 50 55
* Calculated based on net revenue in the last 12 months
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10. EBITDA AND NET INCOME
EBITDA NET INCOME
(In R$ million) (In R$ million)
17.4%
+21.0%
15.5%
47.9 12.2% 12.0%
39.6 +5.8%
31.3 33.1
1Q10 1Q11 1Q10 1Q11
Recurring EBITDA Margin Recurring EBITDA Recurring Net Margin Recurring Net Income
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11. CASH FLOW
Recurring Operational Cash Flow
1Q11 CASH FLOW
(In R$ million)
¹ Financial Result except Operating Financial Result (-R$4.2 million) + Financing (+R$1.8 million)
² Composition of Investments: Acquisition Goodwill (-R$15.5 million) + Fixed Assets at FAA and FAL (-R$3.2 million) + Expansion CAPEX (-R$5.9 million)
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12. EVOLUTION IN QUALITY – REGULATORY ASSESSMENTS
COURSES EVALUATION - ON-SITE VISITS 2010/11
Grade 3 Grade 4 Grade 5 No grade
7 Courses
9 Courses
46 Courses
50 Courses
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13. OUTLOOK
• Ensure a high-quality education on a sustainable basis on a
national scale
Quality • Content
• Tools and processes
• People
• Technology as a key competitive advantage: distribution of content
Technology
and relations with students
Efficiency • Generate margin expansion through better control of costs and
Gains continued organic growth
Acquisitions • Value accretion through scalability and assets that complement the
current portfolio
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14. IR CONTACTS
Investor Relations:
Flávia de Oliveira
Email: flavia.oliveira@estacio.br
Phone: +55 (21) 3311-9789
Fax: +55 (21) 3311-9722
Address: Av. Embaixador Abelardo Bueno, 199 – Office Park – 6th floor
CEP: 22.775-040 – Barra da Tijuca – Rio de Janeiro – RJ – Brazil
Website: www.estacioparticipacoes.com/ir
This presentation may contain forward-looking statements concerning the industry’s prospects and Estácio Participações’ estimated financial and operating results;
these are ere projections and. as such. are based solely on the Company management’s expectations regarding the future of the business and its continuous
access to capital to finance Estácio Participações’ business plan. These considerations depend substantially on changes in market conditions. government rules.
competitive pressures and the performance of the sector and the Brazilian economy as well as other factors and are. therefore. subject to changes without
previous notice. We are a holding company. and our only assets are our interests in SESES. STB. SESPA. SESCE. SESPE. SESAL. SESSE. SESAP. UNEC. SESSA and
IREP. and we currently hold 99.9% of the capital stock of each of these subsidiaries. Considering that the Company was incorporated on March 31 2007. the
information presented herein is for comparison purposes only. on a proforma unaudited basis. relative to the first three months of 2007. as if the Company had
been organized on January 1 2007. Additionally. information was presented on an adjusted basis. in order to reflect the payment of taxes on SESES. our largest
subsidiary. which from February 2007. after becoming a for-profit company. is subject to the applicable taxation rules applied to the remaining subsidiaries.
except for the exemptions arising out of the PROUNI – University for All Program (“PROUNI”). Information presented for comparison purposes should not be
considered as a basis for calculation of dividends. taxes or for any other corporate purposes.
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