For personal use only G8 Education Overview 2014 G8 Education - PowerPoint PPT Presentation

For personal use only G8 Education – Overview 2014 G8 Education Limited (ASX:GEM) 16 February 2015

Corporate Snapshot For personal use only Board of Directors & Key Management Capital Structure Title Personnel Directors & Senior Management Fully Paid Ordinary Shares (current) 359.1 million Jenny Hutson Chairperson Options Nil Chris Scott Managing Director Share Price (as at 30 Jan 2015) $4.58 Andrew Kemp Non-Executive Director Market Capitalisation (as at 30 Jan 2015) $1.6 billion Brian Bailison Non-Executive Director Cash (as at 31 Dec 14) $120.8 million Susan Forrester Non-Executive Director Senior Secured Debt (as at 31 Dec 14) Nil Jason Roberts Chief Executive Officer SGD Senior Unsecured Notes SGD $260.0 million Chris Sacre Chief Operating & Financial Officer 1 Year Share Price Chart AUD Senior Unsecured Notes AUD $120.0 million $5.50 $5.00 Substantial Shareholder Shares % Holding $4.50 $4.00 Bennelong 28.3 million 7.9% $3.50 $3.00 $2.50 NAB 19.6 million 5.5% $2.00 $1.50 UBS Group AG 19.2 million 5.3% $1.00 $0.50 $- Nov-12 May-13 Nov-13 May-14 Nov-14 2

For personal use only Portfolio Update

Group Centre Portfolio For personal use only Centre Portfolio Australian centres Singapore centres 18 18 • The Group added 203 new centres and 13,697 18 437 18 349 18 licensed places in 2014 18 18 18 234 187 167 132 135 136 88 77 • Disciplined consolidation in high demand areas 1H10A 2H10A 1H11A 2H11A 1H12A 2H12A 1H13A 2H13A 1H14A 2H14A continues to be our focus The Group has continued to make earnings per share accretive acquisitions throughout 2014 • As at 31 Dec 2014 the Group owned 437 centres in Australia and 18 centres in Singapore Change In Portfolio with a total of 32,782 licensed places Additions Disposals - 115 88 - 63 54 39 31 22 12 9 2 -1 -1 -1 -1 -7 -6 1H10A 2H10A 1H11A 2H11A 1H12A 2H12A 1H13A 2H13A 1H14A 2H14A Centre acquisitions were spread across the year with a bias to the first half 4

For personal use only Operational Update

Like for Like - Occupancy For personal use only LFL occupancy Vintage Number of 2011 2012 2013 2014 • Average like for like occupancy centres Acquired pre 2011 78 77.99% 78.43% 80.16% 80.53% across the portfolio showed Acquired in 2011 43 - 87.51% 88.18% 89.77% continued growth on a per year Acquired in 2012 33 - - 88.63% 88.81% and total basis Like for Likes calculated based on ownership for a full calendar year. Acquisitions made part way through a year are captured in the following years data. Acquisitions made in 2014 are excluded. • Like for like occupancy peaked at 90.60% in November 2014 Number of centres acquired per year 250 • Significant organic growth 200 opportunities will crystallise in 150 2015/16 from centres acquired in 100 2013/14 50 0 Acquired pre 2011 Acquired in 2011 Acquired in 2012 Acquired in 2013 Acquired in 2014 6

G8 Operations For personal use only • The operations team has scaled up to manage the increase of centres joining General manager the Group of operations Acquisition support Compliance function • Staff turnover continues to show function x 2 x 2 Senior operations positive declines despite the high managers x 5 incidence of younger employees still in Training and the midst of making lifestyle and Operations support education function function x 4 x 3 employment direction changes Operations managers x 43 Yearly Staff Turnover 30.00% Centre directors x 437 25.00% 20.00% Floor based staff 15.00% x 9,000+ 10.00% 5.00% 0.00% 2012 2013 2014 7

Lease Portfolio For personal use only Distribution of landlords by type 8% • Average lease tenure for the portfolio is 18 years Individuals 4% Corporate Trust • 2% Standard terms apply with regards contracting Government 86% • 86% of leases owned by individuals Faith based • 43% of leases have inflation clauses linked to CPI 8

For personal use only Key performance metrics

Like for like Revenue and EBIT generation For personal use only • Organic revenue growth and Like for Like Revenue EBIT growth is consistent and robust Vintage Number 2011 2012 2013 2014 Acquired pre 2011 78 78,681,082 86,401,946 95,722,924 101,809,071 • Like for Like EBIT margin Acquired in 2011 43 - 64,468,120 70,601,868 75,432,263 increased by 0.53% from Acquired in 2012 33 - - 58,697,588 62,711,494 22.69% to 23.22% from CY13 Like for Like EBIT to CY14 Vintage Number 2011 2012 2013 2014 • This margin improvement Acquired pre 2011 78 15,682,243 17,297,694 21,021,002 21,579,107 Acquired in 2011 43 - 12,932,573 15,476,162 18,210,405 drove a $4.64m increase in Acquired in 2012 33 - - 14,737,136 16,035,084 EBIT which represents a 9% growth rate on 2013 Like for Likes calculated based on ownership for a full calendar year. Acquisitions made part way through a year are captured in the following years data. Acquisitions made in 2014 are excluded. 10

Group Pro Forma Returns on Invested Capital For personal use only Pro forma adjusted Return on Invested Capital for the period was 26.0% CY14 CY13 CY12 CY11 Equity as at 31 December as per the Annual Report 542,009,000 304,786,000 182,307,582 115,164,091 Fair value adjustments to Equity due to acquisition purchase price gross up from share price movements (26,449,093) (24,026,790) (24,026,790) (23,835,853) Adjust equity for fair value 515,559,907 280,759,210 158,280,792 91,328,238 Add Net Debt 213,521,223* 171,000 27,462,272 22,232,372 729,081,130 280,930,210 185,743,064 113,560,610 Average broker forecast EBIT for the following calendar year 170,900,000 72,800,000 46,000,000 27,000,000 Return on Invested Capital (ROIC) 23.4% 25.9% 24.8% 23.8% Return on Invested Capital (ROIC) – Sterling adjusted 26.0% * Net debt adjusted for non cash FX loss Adjustments reflect non cash translation impacts and rebasing of acquisition multiples to 4x EBIT 11

Head Office Cost per Licensed Place For personal use only 2009 2010 2011 2012 2013 2014 Number of Places 2,547 6,304 9,868 12,661 17,597 32,782 Head Office Cost per Licensed Place $1,193 $710 $523 $520 $485 $455 • Head office costs per licensed place fell in 2014 to $455 • Efficiency and productivity gains Head Office Cost per Licensed Place from process upgrades and application of technology 1,400 combined with tight cost control 1,200 continues to yield benefits to the Group Head Office cost 1,000 structure 800 600 400 200 - 2009 2010 2011 2012 2013 2014 12

For personal use only Group Financial Update

2014 Group Revenue and EBIT For personal use only Group Financial Performance $350.0 $80.0 $70.0 $300.0 $294.9 • Underlying Group Revenue and $60.0 $70.3 EBIT growth from 1H10 to 2H14 $250.0 has continued to be strong $50.0 $200.0 $187.2 • Underlying EBIT has increased by $40.0 $157.7 101% from CY13 to CY14 due to $150.0 the contributions from acquisitions $30.0 $116.9 and organic growth $32.6 $31.2 $101.0 $100.0 $78.0 $77.3 $20.0 • CAGR of 93% for underlying NPAT $60.7 $17.8 $19.9 from CY10 to CY14 $43.1 $50.0 $10.0 $14.2 $23.3 $10.1 $6.6 $7.3 $1.6 $0.0 $0.0 1H10A 2H10A 1H11A 2H11A 1H12A 2H12A 1H13A 2H13A 1H14A 2H14A Underlying Revenue ($m) Underlying EBIT ($m) **Underlying Revenue/EBIT is defined as reported Revenue/EBIT excluding non-recurring transactions as displayed in page 10 of the Annual Report 14

2014 Financial Margin Analysis For personal use only Group Underlying Margin Performance Underlying EBIT margin Underlying NPAT margin • Underlying EBIT margins have increased from 18.3% in CY13 to 21.0% in CY14. This is largely due to a 24% combination of organic growth and contributions 21% 20% from high quality 18% acquisitions 17% 15% 15% 14% • Margins are affected by 13% 13% 13% 12% 12% seasonal fluctuations in 10% occupancy from January to 10% 9% 8% June compared with July to 7% 7% December due to the transition of children from 3% Kindergarten to Primary School in January each year 1H10A 2H10A 1H11A 2H11A 1H12A 2H12A 1H13A 2H13A 1H14 2H14 15