www.brightscholar.com July 2017 Third Quarter Fiscal 2017 Performance Presentation Bright Scholar Education Holdings Limited.
www.brightscholar.com Safe Harbor Statement This presentation contains forward-looking statements, including statements about the business outlook, strategy and market opportunity of Bright Scholar Education Holdings Limited (the “Company,” “we” or “our”), and statements that may suggest trends for our business. Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “will,” “would,” and similar expressions, or the negatives thereof. These statements are individually and collectively forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are made only as of the date of this presentation and are based on estimates and information available to the Company at the time of this presentation. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict and may be beyond the Company’s control. Therefore, the Company cautions that actual results may differ materially from those set forth in any forward-looking statements herein, and are subject to numerous assumptions, risks, uncertainties and other factors, including those discussed under “Risk Factors” in the Company’s registration statement on Form F-1 filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 16, 2017. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements made during this presentation will in fact be realized. Any forward-looking statements and projections made by others in this presentation are not adopted by the Company and the Company is not responsible for the forward-looking statements and projections of others. Except as otherwise required by applicable securities laws, the Company disclaims any intention or obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In evaluating our business, we use certain non-GAAP measures as supplemental measures to review and assess our operating performance. These non-GAAP financial measures have limitations as analytical tools and investors should not consider them in isolation, or as a substitute for net income attributable to Company or other consolidated statement of comprehensive income data prepared in accordance with U.S. GAAP. 2
www.brightscholar.com About Bright Scholar Largest Operator of International and Bilingual Schools in China (1) IPO in May 2017 NYSE : May 2017 US$181 million proceeds raised (including greenshoe shares) Number of Schools Number of Students Gansu Jiangsu 52 29,613 Anhui Hubei 2017 (2) 2017 (3) Hunan 7 Guizhou 87% Guangdong provinces with Bright Scholar schools (2) of 2017 International School Graduates (4) Admitted into Top 50 Institutions Globally Notes: 1. In terms of student enrollment as of September 1,2016, according to Frost & Sullivan report 2. As of May 31, 2017 3. Average of monthly student enrollment during the first nine months of 2017 school year. School year refers to the period from September of the previous calendar year to January of the concerned calendar year and from March to July of the concerned calendar year 4. Placement rate represents percentage of our 2017 graduating classes in our Diploma Program, Advanced Placement, or A-Level curricula that applied for overseas universities and were admitted into global top 50 institutions, as ranked by either the QS World University Rankings or U.S. News, or world top 5 in their specialized fields 3
www.brightscholar.com Addressing K-12 Students’ Various Education Needs After-school Programs Summer / Winter Camps Entire K-12 Bilingual Schools International Schools Spectrum Test Preparation Sports Programs Kindergartens Exchange Programs College Counseling 4
www.brightscholar.com Strong Market Leadership in International and Bilingual School Education #1 Largest Operator of International and Bilingual Schools in China (1) 29,613 52 7 Students (2) Schools (3) Provinces (3) Bilingual Schools Kindergartens International Schools 35 6 11 Schools (3) Schools Schools (3) (3) 31.4% 13,169 23.3% 10,071 38.9% 6,372 of F9M ‘17 Revenue Students (2) of F9M ‘17 Revenue Students (2) of F9M‘17 Revenue Students (2) Complementary Education Services (4) 6.4% 16 4,313 of F9M‘17 Revenue Learning Centers (3) Students (2) Notes: 1. In terms of student enrollment as of September 1, 2016, according to Frost & Sullivan 2. Monthly average number of students enrolled at our schools or learning centers during the first nine months of 2017 school year as of May 31, 2017 3. As of May 31, 2017 4. Complementary Education Services includes Overseas Camps , After-School Programs, Test Preparation and College Counseling 5
www.brightscholar.com with a Holistic Business Model that Drives Bottom Line Growth & Sets Us Apart From Competition … Collaboration with Country Garden enables a strong pipeline for trajectory growth Asset light model offers tremendous margin Third party expansion opportunities real estate developers One of the Largest Real Estate Developers in China with >US$45Bn in Contracted Sales (1) Adjusted EBITDA Margin (2) Adjusted Net Margin (2) 28.2% 18.6% 30.0% 20.00% 17.9% 20.0% 9.4% 10.00% 10.0% 0.00% 0.0% (0.4%) (1.9%) (5.4%) -10.0% (6.5%) -10.00% FY2014 FY2015 FY2016 F9M '17 FY2014 FY2015 FY2016 F9M '17 Note: 1) For Country Garden Holdings in the 2016 fiscal year 2) See reconciliation below. 6
Performance Highlights
www.brightscholar.com Highlights: Strong tractions of year-over-year growth across all financial metrics (in RMB million) F3Q17 Y-O-Y Growth F9M17 Y-O-Y Growth Revenue 406.7 28.1% 1,052.9 28.2% Gross Profit 183.8 51.5% 399.7 55.1% Gross Margin 45.2% 7.0% 38.0% 6.6% Operating Income 121.8 66.5% 231.5 731.2% Operating Margin 30.0% 6.9% 22.0% 18.6% Adjusted EBITDA* 145.2 59.3% 296.5 72.2% Adjusted EBITDA Margin* 35.7% 7.0% 28.2% 7.2% Adjusted Net Income* 107.5 85.7% 195.5 91.9% Adjusted Net Margin* 26.4% 8.2% 18.6% 6.2% Note: See reconciliation below. 8
www.brightscholar.com ……. As Business Scale Expands Rapidly Total Revenue YoY Growth: CAGR: 34.9% RMB MM 20.1% 423 410 YoY Growth: 341 306 232 24.3% 158 International Schools 127 FY2014 FY2015 FY2016 F9M '16 F9M '17 F3Q '16 F3Q '17 YoY Growth: CAGR: 28.2% YoY Growth: 27.0% 329 29.4% 330 260 245 200 Bilingual Schools 127 98 FY2014 FY2015 FY2016 F9M '16 F9M '17 F3Q '16 F3Q '17 YoY Growth: CAGR: 28.5% YoY Growth: 23.6% 252 246 199 26.1% 191 153 96 Kindergartens 76 FY2014 FY2015 FY2016 F9M '16 F9M '17 F3Q '16 F3Q '17 YoY Growth: 67 CAGR: 237.7% YoY Growth: 218.0% 60.9% 37 Complementary Education Services 26 21 16 3 3 FY2014 FY2015 FY2016 F9M '16 F9M '17 F3Q '16 F3Q '17 9
www.brightscholar.com with Fast Expanding Network and Growing Student Enrollments … Number of Schools Average Student Enrollment (1) h : t w o G r Y o Y % 29,613 1 . : 5 h 1 t w o r G Y o Y % 1 . 6 52 25,863 25,734 49 49 10,071 21,084 8,979 8,862 37 18,913 35 7,280 33 33 29 6,600 13,169 26 11,441 11,424 19 9,512 8,453 11 11 11 8 8 6,372 5,443 5,448 4,292 3,860 6 5 5 3 2 FY2014 FY2015 FY2016 F3Q '16 F3Q '17 FY2014 FY2015 FY2016 F3Q '16 F3Q '17 International Schools Bilingual Schools Kindergartens Note: 1. Average of monthly student enrollments during each respective period 10
www.brightscholar.com and a Balanced Portfolio with SteadyTuition Growth Across Segments International Schools: Average Tuition and Fees per Student (1) School Revenue Contribution F3Q ‘17 RMB ‘000s CAGR: 13.6% 78 81 71 60 6.4% FY2014 FY2015 FY2016 FY2017E Substantial room to Bilingual Schools: Average Tuition and Fees per Student (1) 23.6% 38.8% increase CAGR: 10.2% RMB ‘000s our international schools’ tuition (2) 32 29 Average Tuition and Fees per Student in RMB 26 24 ‘000 (1) FY2014 FY2015 FY2016 FY2017E 31.2% Kindergartens: Average Tuition and Fees per Student (1) CAGR: 10.2% RMB ‘000s 30 28 26 23 International Schools Bilingual Schools Kindergartens Complementary Education Services FY2014 FY2015 FY2016 FY2017E Notes: 1. Calculated as revenue from our international schools, bilingual schools, and kindergartens divided by average of monthly student enrollment for each type of school during each respective period. 11
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