HONG KONG, July 25, 2017 /PRNewswire/ -- Nord Anglia
Education, Inc. (NYSE: NORD), the world's leading premium schools
organization, today announced financial results for the third
quarter of fiscal 2017, the three month period ended May 31, 2017.
Third quarter FY2017 highlights (compared to third
quarter FY2016)
- Average full time equivalent students (FTEs) increased 8.4% to
38,287
- Revenue of $272.2 million, up
7.4% on a reported basis and up 9.6% on a constant currency
basis
- Adjusted EBITDA of $69.3 million,
down 0.2% on a reported basis but up 2.1% on a constant currency
basis
- Adjusted Net Income increased 2.9% to $29.3 million
- Diluted Adjusted EPS increased 0.9% to $0.28
Year to date May 31, 2017
highlights (compared to year to date May 31,
2016)
- Revenue of $792.2 million, up
7.0% on a reported basis and up 8.8% on a constant currency
basis
- Adjusted EBITDA of $199.5
million, down 0.5% on a reported basis but up 1.4% on a
constant currency
- Adjusted Net Income increased 2.7% to $84.2 million
- Diluted Adjusted EPS increased 1.1% to $0.80
"We are pleased with our third quarter results," said
Andrew Fitzmaurice, Chief Executive
Officer of Nord Anglia Education. "We finished the 2016/2017
academic year with 38,754 full-time equivalent students,
representing enrollment growth of 9.7% over the prior year. This is
a very exciting time of the year for Nord Anglia as we celebrate
the achievements of our students. Recently, 87 students
participated in a special side meeting at the UN High-level
Political Forum in New York,
presenting to the President of the UN General Assembly and UN
Membership about the work our schools have undertaken over the last
academic year to support the UN's Sustainable Development Goals. We
would also like to congratulate our IB Diploma students who
achieved a pass rate of 94% and an average score of 33.4 points,
significantly higher than the world average. We are proud of the
progress we have achieved this year and look forward to continuing
our ambitious approach to support the success of our students and
teachers in the coming years."
Third Quarter FY2017 Results
Average FTEs increased 8.4% to 38,287 in the three months ended
May 31, 2017 ("Q3 FY2017") from
35,309 in the three months ended May 31,
2016 ("Q3 FY2016"). Average capacity and utilization were
55,750 seats and 69%, respectively, in Q3 FY2017 compared to 49,402
seats and 71%, respectively, in Q3 FY2016.
Revenue increased 7.4%, or $18.7
million, to $272.2 million in
Q3 FY2017 from $253.5 million in Q3
FY2016. This increase was due primarily to higher revenues from
premium schools, partly offset by the impact of the strengthening
US dollar on our premium schools revenue. On a constant currency
basis, revenue increased 9.6% in Q3 FY2017, compared to Q3 FY2016.
Revenue per FTE was approximately $7,100 in Q3 FY2017, unchanged from Q3
FY2016.
Gross profit increased 5.7%, or $5.8
million, to $106.7 million in
Q3 FY2017 from $100.9 million in Q3
FY2016. Gross profit margin was 39.2% in Q3 FY2017 compared to
39.8% in Q3 FY2016. The reduction in gross profit margin in Q3
FY2017 was primarily due to the additional rent included in cost of
sales from the sale and leaseback transactions completed during Q3
FY2016 and the new school openings in September 2016, partially offset by tuition fee
increases in excess of cost inflation and increased FTEs within our
schools.
Selling, general and administrative (SG&A) expenses
increased 13.5% to $55.1 million in
Q3 FY2017 from $48.5 million in Q3
FY2016. The increase in SG&A expenses was mainly due to the
operating expenses of the new schools opened in September 2016, pre-opening costs associated with
the opening of new campuses in Houston, Abu
Dhabi, Bangkok and
Hong Kong, Global Campus related
costs and Sarbanes-Oxley project costs.
Other (losses)/gains changed by $2.4
million from a loss of $10.1
million in Q3 FY2016 to a loss of $7.7 million in Q3 FY2017. In Q3 FY2017, other
(losses)/gains included $3.7 million
of non-cash foreign exchange losses on intercompany balances and
$4.0 million non-cash losses on
financial instruments including a $3.1
million loss on the cross currency swaps and a $0.9 million loss on embedded lease derivatives
and other options. In Q3 FY2016, other (losses)/gains included
$6.3 million of non-cash foreign
exchange losses on intercompany balances and $3.8 million non-cash losses on financial
instruments including a $3.2 million
loss on the cross currency swaps and a $0.6
million loss on embedded lease derivatives and other
options.
Adjusted EBITDA decreased 0.2%, or $0.2
million, to $69.3 million in
Q3 FY2017 from Q3 FY2016. On a constant currency basis, adjusted
EBITDA increased 2.1% in Q3 FY2017.
Net financing expense increased $3.4
million from $19.2 million in
Q3 FY2016 to $22.6 million in Q3
FY2017 primarily due to an unrealized loss of $7.0 million in Q3 FY2017 compared to an
unrealized loss of $2.0 million in Q3
FY2016 on the revaluation of the CHF 200.0
million bonds, partially offset by the reduction in interest
margin on our term loan from December
2016 and the revolving credit facility remaining undrawn in
Q3 FY2017.
Adjusted Net Income increased 2.9% to $29.3 million in Q3 FY2017 from $28.5 million in Q3 FY2016.
Balance Sheet and Cash Flow
Cash used in operating activities was $81.1 million for the nine months ended
May 31, 2017, compared to
$54.1 million for the nine months
ended May 31, 2016. Cash used in
operations was $18.6 million for the
nine months ended May 31, 2017
compared to cash generated from operations of $14.3 million for the nine months ended
May 31, 2016 as a result of working
capital changes, primarily a reduction in trade and other payables.
The increased outflow was primarily due to the impact of a larger
cost base as the business has grown. Interest paid decreased from
$44.5 million to $38.8 million, and tax paid increased from
$18.9 million to $21.0 million for the nine months ended
May 31, 2016 and May 31, 2017, respectively. The reduction in
interest paid for the nine months ended May
31, 2017 was primarily due to the revolving credit facility
remaining undrawn compared to a drawn balance of $28.0 million as at May
31, 2016 and a reduced margin from December 2016 from 4.0% to 3.5% on the term loan.
The outflows were in line with expectations.
Cash used in investing activities was $62.2 million for the nine months ended
May 31, 2017 compared to cash
generated from investing activities of $74.1
million for the nine months ended May
31, 2016. The outflow for the nine months ended May 31, 2017 included a $27.6 million outflow for the acquisition of
subsidiaries (net of cash acquired), including the acquisition of
the Prague British School for $14.2
million net of cash acquired and $13.5 million deferred payments for the
Cambodia and Vietnam acquisitions, $44.9 million of capital expenditures in relation
to the new campuses in Houston,
Bangkok, Hong Kong, and the new China bilingual school in Shanghai, and general maintenance capital
expenditure, offset by net sale proceeds of $8.9 million in relation to the sale of the old
Houston campus. The inflow for the
nine months ended May 31, 2016 was
primarily due to a $167.0 million
inflow from the proceeds of the sale and leaseback transaction and
a $33.6 million outflow for the
acquisition of subsidiaries (net of cash acquired), including the
final deferred payment for the Meritas acquisition, and capital
expenditures of $60.0 million.
Cash used in financing activities was $8.4 million for the nine months ended
May 31, 2017 compared to cash
generated from financing activities of $19.4
million for the nine months ended May
31, 2016. The outflow for the nine months ended May 31, 2017 was primarily due to repayment of
borrowings of $6.8 million and
payments to non-controlling interests of $1.8 million. The inflow for the nine months
ended May 31, 2016 was primarily due
to net drawings on the revolving credit facility of $28.0 million.
Cash and cash equivalents (excluding the bank overdraft on our
notional pooling accounts) as of May 31,
2017 were $265.9 million,
compared to $376.6 million as of
May 31, 2016.
Cash and cash equivalents (including the bank overdraft on our
notional pooling accounts) as of May 31,
2017 were $216.8 million,
compared to $260.5 million as of
May 31, 2016.
Recent Developments
As previously disclosed, we have called an extraordinary general
meeting of shareholders (the "EGM") to be held on August 21, 2017 to consider and vote on, among
other matters, the proposal to authorize and approve the agreement
and plan of merger announced on April
25, 2017. Additional information about the EGM and the
merger agreement can be found in the transaction statement on
Schedule 13E-3 and the proxy statement attached thereto as Exhibit
(a)-(1) filed with the SEC.
On July 5, 2017, we completed the
acquisition of an international school in Latin America to take our total number of
schools to 46. The school currently educates more than 820
FTEs with 870 seats of capacity. The consideration of
approximately $30.0 million (with
$10.0 million deferred) for the
school was within Nord Anglia Education's targeted range of 7-10x
trailing EBITDA.
On May 11, 2017, we acquired
effective control of and 100% economic interest in the Netherlands Inter-community School in
Jakarta, Indonesia for
approximately $0.7 million.
With over 160 FTEs and 300 seats of capacity, the school is
expected to be EBITDA breakeven in fiscal 2017 and provides us
entry into a high growth market in Southeast Asia.
We have not resolved objections raised by the Hong Kong Lands
Department with respect to the new campus for Nord Anglia
International School Hong Kong and therefore do not expect to open
the new campus in September 2017. To provide parents with a
solution, we have secured two sites in Hong Kong with a combined capacity of 436
seats. Both sites will cater to children aged three to five
years old and are planned to open in September 2017.
Forward-Looking Statements
This press release includes statements that express our current
opinions, expectations, beliefs, plans, objectives, assumptions or
projections regarding future events or future results and therefore
are, or may be deemed to be, "forward looking statements".
These forward looking statements can generally be identified by the
use of forward-looking terminology, including the terms "believe,"
"expect," "may," "will," "should," "seek," "project,"
"approximately," "intend," "plan," "estimate" or "anticipate," or,
in each case, their negatives or other variations or comparable
terminology. These forward-looking statements include all
matters that are not historical facts. They appear in a
number of places throughout this press release and include
statements regarding our intentions, beliefs or current
expectations concerning among other things, anticipated school
openings, our results of operations, financial condition,
liquidity, growth prospects, strategies and the industry in which
we operate.
By their nature, forward-looking statements relate to events
that involve risks and uncertainties or that depend on
circumstances that may or may not occur in the future. We
believe that these risks and uncertainties include, but are not
limited to, those under "Risk Factors" in our most recent Annual
Report on Form 20-F filed with the SEC.
Although we base these forward-looking statements on assumptions
that we believe are reasonable when made, we caution you that
forward-looking statements are not guarantees of future performance
and that our actual results of operations, financial condition,
liquidity, growth prospects, strategies and the development of the
industry in which we operate may differ materially from those made
in or suggested by the forward-looking statements contained in this
press release. In addition, even if our results of
operations, financial condition, liquidity, growth prospects,
strategies and the development of the industry in which we operate,
are consistent with the forward-looking statements contained in
this press release, those results or developments may not be
indicative of results or developments in subsequent periods.
Given these risks and uncertainties, you are cautioned not to place
undue reliance on these forward-looking statements. Any
forward-looking statement that we make in this press release speaks
only as of the date of such statement, and we undertake no
obligation to update any forward-looking statements or to publicly
announce the results of any revisions to any of those statements to
reflect future events or developments.
Non-GAAP Supplemental Financial Measures
We use EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted
Earnings per Ordinary Share, as supplemental financial measures of
our operating performance. We define EBITDA as (loss)/profit for
the period plus income tax expense, net financing (expense)/income,
exceptional items, impairment of goodwill, amortization and
depreciation, and we define Adjusted EBITDA as EBITDA adjusted for
loss/(gain) on disposal of property, plant and equipment, share
based payments, realised gains or losses on hedging agreements and
other items. We define Adjusted Net Income as Adjusted EBITDA
adjusted for depreciation, net financing expense, income tax
expense, tax adjustments and non-controlling interests. We define
Adjusted Earnings per Ordinary share as Adjusted Net Income divided
by the weighted average ordinary shares outstanding for the
period. EBITDA, Adjusted EBITDA, Adjusted Net Income and
Adjusted Earnings per Ordinary Share are not standard measures
under IFRS. These measures should not be considered in isolation or
construed as alternatives to cash flows, net income, earnings per
ordinary share or any other measure of financial performance or as
indicators of our operating performance, liquidity, profitability
or cash flows generated by operating, investing or financing
activities. We may incur expenses similar to the adjustments in
this presentation in the future and certain of these items could be
recurring. EBITDA, Adjusted EBITDA, Adjusted Net Income and
Adjusted Earnings per Ordinary Share as presented herein may not be
comparable to similarly titled measures presented by other
companies.
About Nord Anglia Education, Inc.
Nord Anglia Education (NYSE: NORD) is the world's leading
premium schools organization. Our 46 international schools are
located in China, Europe, the Middle
East, Southeast Asia and
North America. Together, they
educate more than 39,000 students from kindergarten through to the
end of secondary education. We are driven by one unifying
philosophy – we are ambitious of our students, our people and our
family of schools. Our schools deliver a high quality education
through a personalized approach enhanced with unique global
opportunities to enable every student to succeed. We primarily
operate in geographic markets with high foreign direct investment,
large expatriate populations and rising disposable income. We
believe that these factors contribute to high demand for premium
schools and strong growth in our business. Nord Anglia
Education is headquartered in Hong Kong SAR, China. Our website is
www.nordangliaeducation.com.
For further information, please contact:
Investors:
Vanessa Cardonnel
Corporate Finance and Investor Relations Director – Nord Anglia
Education
Tel: +852 3951 1130
Email: vanessa.cardonnel@nordanglia.com
Media:
Brunswick Group
Tripp Kyle / Patricia
Graue
Tel: +1 212 333 3810
Email: nordanglia@brunswickgroup.com
Sarah Doyle
Head of Brand – Nord Anglia Education
Tel: +852 3951 1144
Email: sarah.doyle@nordanglia.com
|
NORD ANGLIA
EDUCATION, INC.
|
|
CONDENSED
CONSOLIDATED INCOME STATEMENT
|
|
(Unaudited)
|
|
(in $ millions,
except share data)
|
|
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
|
|
2017
|
|
2016(1)
|
|
2017
|
|
2016(1)
|
|
Revenue
|
272.2
|
|
253.5
|
|
792.7
|
|
740.9
|
|
Cost of
sales
|
(165.5)
|
|
(152.6)
|
|
(488.5)
|
|
(445.6)
|
|
Gross
profit
|
106.7
|
|
100.9
|
|
304.2
|
|
295.3
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
expenses
|
(55.1)
|
|
(48.5)
|
|
(157.3)
|
|
(140.8)
|
|
Depreciation
|
(0.1)
|
|
(0.2)
|
|
(0.4)
|
|
(0.6)
|
|
Amortization
|
(4.6)
|
|
(4.6)
|
|
(13.7)
|
|
(13.8)
|
|
Other
(losses)/gains
|
(7.7)
|
|
(10.1)
|
|
10.6
|
|
(4.8)
|
|
Exceptional
expenses
|
(1.2)
|
|
(6.1)
|
|
(2.5)
|
|
(11.0)
|
|
Total
expenses
|
(68.7)
|
|
(69.5)
|
|
(163.3)
|
|
(171.0)
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
38.0
|
|
31.4
|
|
140.9
|
|
124.3
|
|
|
|
|
|
|
|
|
|
Finance
income
|
0.6
|
|
0.6
|
|
2.5
|
|
2.3
|
|
Finance
expense
|
(23.2)
|
|
(19.8)
|
|
(51.7)
|
|
(46.6)
|
|
Net finance
expense
|
(22.6)
|
|
(19.2)
|
|
(49.2)
|
|
(44.3)
|
|
|
|
|
|
|
|
|
|
|
Profit before
tax
|
15.4
|
|
12.2
|
|
91.7
|
|
80.0
|
|
Income tax
expense
|
(3.8)
|
|
(9.6)
|
|
(21.3)
|
|
(23.7)
|
|
Profit for the
period
|
11.6
|
|
2.6
|
|
70.4
|
|
56.3
|
|
|
|
|
|
|
|
|
|
Profit
attributable to:
|
|
|
|
|
|
|
|
|
-
Owners of the parent
|
10.5
|
|
2.1
|
|
68.2
|
|
54.9
|
|
-
Non-controlling interest
|
1.1
|
|
0.5
|
|
2.2
|
|
1.4
|
|
Profit for the
period
|
11.6
|
|
2.6
|
|
70.4
|
|
56.3
|
|
|
|
|
|
|
|
|
|
|
Earnings per ordinary
share(2) (in
dollars)
|
|
|
|
|
|
|
|
|
Basic
|
0.10
|
|
0.02
|
|
0.66
|
|
0.53
|
|
Diluted
|
0.10
|
|
0.02
|
|
0.64
|
|
0.53
|
|
|
(1) During
the year ended August 31, 2016, we finalized the purchase price
allocation accounting from the prior year, made voluntary
presentation changes and made corrections of prior period errors,
by adjusting the prior period information. The information included
in this press release for the three and nine months ended May 31,
2016 reflects these adjustments. For more information, see our
annual report on Form 20-F filed with the SEC and our report on
Form 6-K ("Prior Period Changes in Basis of Presentation and
Correction of Errors") furnished to the SEC on November 29,
2016.
|
|
|
(2)
Earnings per ordinary share is calculated by dividing profit for
the period attributable to owners of the parent by the weighted
average ordinary shares outstanding for the period. For the three
months ended May 31, 2017 the basic and diluted weighted average
ordinary shares outstanding were 104.1 million and 106.1 million
ordinary shares, respectively. For the nine months ended May 31,
2017 the basic and diluted weighted average ordinary shares
outstanding were 104.1 million and 105.8 million ordinary shares,
respectively. For the three and nine months ended May 31, 2016 the
basic and diluted weighted average ordinary shares outstanding were
104.1 million ordinary shares.
|
|
NORD ANGLIA
EDUCATION, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
|
(Unaudited)
|
|
(in $
millions)
|
|
|
|
May
31,
|
|
August 31,
|
|
2017
|
2016
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Property, plant and
equipment
|
|
337.9
|
|
328.5
|
|
Intangible
assets
|
|
1,367.8
|
|
1,365.4
|
|
Investments in joint
ventures and associates
|
|
0.4
|
|
0.5
|
|
Derivative financial
instruments
|
|
1.9
|
|
-
|
|
Trade and other
receivables
|
|
43.9
|
|
42.0
|
|
Deferred lease
expense
|
|
29.4
|
|
30.6
|
|
Deferred tax
assets
|
|
77.9
|
|
79.0
|
|
|
1,859.2
|
|
1,846.0
|
|
Current
assets
|
|
|
|
|
|
Current tax
assets
|
|
1.9
|
|
3.4
|
|
Inventories
|
|
3.3
|
|
4.3
|
|
Derivative financial
instruments
|
|
1.4
|
|
-
|
|
Trade and other
receivables
|
|
151.8
|
|
132.5
|
|
Deferred lease
expense
|
|
2.3
|
|
1.7
|
|
Cash and cash
equivalents (excluding bank
overdrafts)
|
|
265.9
|
|
371.9
|
|
|
426.6
|
|
513.8
|
|
Assets held for
sale
|
|
-
|
|
8.3
|
|
Total
assets
|
|
2,285.8
|
|
2,368.1
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Trade and other
payables
|
|
(181.3)
|
|
(140.3)
|
|
Interest-bearing loans
and borrowings
|
|
(56.6)
|
|
(5.0)
|
|
Derivative financial
instruments
|
|
(3.8)
|
|
-
|
|
Finance lease
liabilities
|
|
(1.2)
|
|
(1.2)
|
|
Deferred
revenue
|
|
(317.3)
|
|
(550.0)
|
|
Deferred
gain
|
|
(0.2)
|
|
(0.2)
|
|
Provisions for other
liabilities and charges
|
|
(0.6)
|
|
(0.0)
|
|
Current tax
liabilities
|
|
(7.6)
|
|
(4.5)
|
|
|
(568.6)
|
|
(701.2)
|
|
Non-current
liabilities
|
|
|
|
|
|
Interest-bearing loans
and borrowings
|
|
(1,056.3)
|
|
(1,058.2)
|
|
Derivative financial
instruments
|
|
(24.0)
|
|
(25.2)
|
|
Finance lease
liabilities
|
|
(63.7)
|
|
(63.3)
|
|
Other
payables
|
|
(43.0)
|
|
(49.1)
|
|
Deferred
revenue
|
|
(11.6)
|
|
(8.0)
|
|
Deferred
gain
|
|
(12.0)
|
|
(12.1)
|
|
Retirement benefit
obligations
|
|
(35.6)
|
|
(48.9)
|
|
Deferred tax
liabilities
|
|
(109.7)
|
|
(110.2)
|
|
|
(1,355.9)
|
|
(1,375.0)
|
|
Total
liabilities
|
|
(1,924.5)
|
|
(2,076.2)
|
|
|
|
|
|
|
Net
assets
|
|
361.3
|
|
291.9
|
|
|
|
|
|
|
Equity
attributable to equity holders of the
parent
|
|
|
|
|
|
Share
capital
|
|
1.0
|
|
1.0
|
|
Share
premium
|
|
736.7
|
|
736.0
|
|
Other
reserves
|
|
6.9
|
|
6.9
|
|
Currency translation
reserve
|
|
(105.2)
|
|
(91.7)
|
|
Shareholders'
deficit
|
|
(283.9)
|
|
(365.7)
|
|
|
355.5
|
|
286.5
|
|
Non-controlling
interest
|
|
5.8
|
|
5.4
|
|
Total
Equity
|
|
361.3
|
|
291.9
|
|
NORD ANGLIA
EDUCATION, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(Unaudited)
|
|
(in $
millions)
|
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Cash generated
from/(used in) operations
|
69.2
|
|
26.9
|
|
(18.6)
|
|
14.3
|
|
Payment of loan/bond
expenses
|
-
|
|
(0.1)
|
|
(2.7)
|
|
(5.0)
|
|
Interest
paid
|
(10.8)
|
|
(12.6)
|
|
(38.8)
|
|
(44.5)
|
|
Tax
paid
|
(11.0)
|
|
(6.5)
|
|
(21.0)
|
|
(18.9)
|
|
Net cash generated
from/(used in)
operating activities
|
47.4
|
|
7.7
|
|
(81.1)
|
|
(54.1)
|
|
|
|
|
|
|
|
|
|
Net cash (used
in)/generated from
investing activities
|
(21.9)
|
|
144.2
|
|
(62.2)
|
|
74.1
|
|
|
|
|
|
|
|
|
|
Net cash (used
in)/generated from
financing activities
|
(2.6)
|
|
(47.9)
|
|
(8.4)
|
|
19.4
|
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and
cash equivalents
|
22.9
|
|
104.0
|
|
(151.7)
|
|
39.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of
the period
|
188.9
|
|
155.1
|
|
371.9
|
|
225.9
|
|
|
|
|
|
|
|
|
|
Exchange
gains/(losses) on cash and cash
equivalents
|
5.0
|
|
1.4
|
|
(3.4)
|
|
(4.8)
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end
of the period (including
overdrafts)
|
216.8
|
|
260.5
|
|
216.8
|
|
260.5
|
|
Bank
overdrafts
|
49.1
|
|
116.1
|
|
49.1
|
|
116.1
|
|
Cash and cash
equivalents at the end of
the period (excluding
overdrafts)
|
265.9
|
|
376.6
|
|
265.9
|
|
376.6
|
|
KEY OPERATING DATA
AND SUPPLEMENTARY FINANCIAL DATA
|
|
|
Key Operating
Data
|
|
|
We use the following
key operating metrics to manage our schools: full-time equivalent
students ("FTEs"), capacity, utilization and revenue per FTE. We
monitor FTEs on a weekly basis and the other operating metrics on a
monthly, quarterly and annual basis, as we believe that they are
the most reliable metrics for measuring the profitability of
our schools. The table below sets out our key operating data
for the periods indicated:
|
|
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Full-time
equivalent students (average
for the
period)(1)
|
|
|
|
|
|
|
|
|
China
|
5,946
|
|
5,902
|
|
5,903
|
|
5,813
|
|
China-Bilingual
|
471
|
|
-
|
|
457
|
|
-
|
|
China
Total
|
6,417
|
|
5,902
|
|
6,360
|
|
5,813
|
|
Europe
|
7,677
|
|
6,871
|
|
7,151
|
|
6,656
|
|
Middle
East
|
5,595
|
|
5,314
|
|
5,607
|
|
5,304
|
|
Southeast
Asia
|
8,558
|
|
7,650
|
|
8,377
|
|
7,486
|
|
North
America
|
10,040
|
|
9,572
|
|
9,977
|
|
9,508
|
|
Total
|
38,287
|
|
35,309
|
|
37,472
|
|
34,767
|
|
|
|
|
|
|
|
|
|
Capacity (average
for the period)(2)
|
|
|
|
|
|
|
|
|
China
|
9,264
|
|
9,242
|
|
9,249
|
|
9,031
|
|
China-Bilingual
|
2,250
|
|
-
|
|
2,250
|
|
-
|
|
China
Total
|
11,514
|
|
9,242
|
|
11,499
|
|
9,031
|
|
Europe
|
10,506
|
|
8,617
|
|
9,963
|
|
8,617
|
|
Middle
East
|
6,187
|
|
5,851
|
|
6,187
|
|
5,851
|
|
Southeast
Asia
|
12,661
|
|
12,185
|
|
12,594
|
|
12,146
|
|
North
America
|
14,882
|
|
13,507
|
|
14,882
|
|
13,507
|
|
Total
|
55,750
|
|
49,402
|
|
55,125
|
|
49,152
|
|
|
|
|
|
|
|
|
|
Utilization
(average for the period)(3)
|
|
|
|
|
|
|
|
|
China
|
64%
|
|
64%
|
|
64%
|
|
64%
|
|
China-Bilingual
|
21%
|
|
-
|
|
20%
|
|
-
|
|
China
Total
|
56%
|
|
64%
|
|
55%
|
|
64%
|
|
Europe
|
73%
|
|
80%
|
|
72%
|
|
77%
|
|
Middle
East
|
90%
|
|
91%
|
|
91%
|
|
91%
|
|
Southeast
Asia
|
68%
|
|
63%
|
|
67%
|
|
62%
|
|
North
America
|
67%
|
|
71%
|
|
67%
|
|
70%
|
|
Total
|
69%
|
|
71%
|
|
68%
|
|
71%
|
|
|
|
|
|
|
|
|
|
Revenue per FTE
(in $ thousands)(4)
|
|
|
|
|
|
|
|
|
China
|
9.1
|
|
9.6
|
|
27.2
|
|
28.5
|
|
China-Bilingual
|
7.2
|
|
-
|
|
22.0
|
|
-
|
|
China
Total
|
8.9
|
|
9.6
|
|
26.8
|
|
28.5
|
|
Europe
|
8.8
|
|
9.2
|
|
26.8
|
|
27.6
|
|
Middle
East
|
4.9
|
|
4.9
|
|
14.6
|
|
14.6
|
|
Southeast
Asia
|
5.1
|
|
4.9
|
|
15.0
|
|
14.5
|
|
North
America
|
7.5
|
|
7.2
|
|
22.0
|
|
21.2
|
|
Total
|
7.1
|
|
7.1
|
|
21.1
|
|
21.2
|
|
|
(1)
We calculate average FTEs for a period by dividing the total number
of FTEs at each calendar month end in the period by the number
of calendar months in the period.
|
|
(2)
We calculate average capacity for a period as the total number of
FTEs that can be accommodated in a school based on its existing
classrooms at each academic calendar month divided by the number of
months in such period.
|
|
(3)
We calculate utilization during a period as a percentage equal to
the ratio of average FTEs for the period divided by average
capacity for the period.
|
|
(4)
We calculate revenue per FTE by dividing our revenue from our
schools for the period by the average FTEs for the
period.
|
|
Supplementary
Financial Data
|
|
|
The following table
sets forth certain supplementary financial data for the periods
indicated.
|
|
|
$
millions
|
Three Months Ended
May 31,
|
|
%
Variance
|
|
2017
|
|
2016
|
|
Reported
|
|
Constant
Currency
|
|
Revenue
(segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium
Schools
|
|
|
|
|
|
|
|
|
China
|
53.9
|
|
56.5
|
|
(4.5%)
|
|
0.4%
|
|
China-Bilingual
|
3.4
|
|
-
|
|
-
|
|
-
|
|
China Total
|
57.3
|
|
56.5
|
|
1.5%
|
|
6.7%
|
|
Europe
|
67.1
|
|
63.5
|
|
5.7%
|
|
8.3%
|
|
Middle East
|
27.4
|
|
25.8
|
|
6.4%
|
|
6.4%
|
|
Southeast Asia
|
43.4
|
|
37.6
|
|
15.6%
|
|
16.5%
|
|
North America
|
75.2
|
|
68.8
|
|
9.1%
|
|
9.8%
|
|
Total Premium
Schools
|
270.4
|
|
252.2
|
|
7.2%
|
|
9.4%
|
|
Other
|
1.8
|
|
1.3
|
|
37.9%
|
|
56.9%
|
|
Total
Revenue
|
272.2
|
|
253.5
|
|
7.4%
|
|
9.6%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium
Schools
|
|
|
|
|
|
|
|
|
China
|
23.1
|
|
24.6
|
|
(6.3%)
|
|
(1.2%)
|
|
China-Bilingual
|
0.0
|
|
-
|
|
-
|
|
-
|
|
China Total
|
23.1
|
|
24.6
|
|
(6.2%)
|
|
(1.1%)
|
|
Europe
|
19.4
|
|
15.3
|
|
27.5%
|
|
30.6%
|
|
Middle East
|
6.6
|
|
6.0
|
|
9.5%
|
|
9.5%
|
|
Southeast Asia
|
14.5
|
|
11.9
|
|
21.4%
|
|
22.4%
|
|
North America
|
17.8
|
|
21.9
|
|
(18.4%)
|
|
(18.0%)
|
|
Total Premium
Schools
|
81.4
|
|
79.7
|
|
2.2%
|
|
4.6%
|
|
Other
|
0.3
|
|
0.2
|
|
30.2%
|
|
44.4%
|
|
Central and Regional
Expenses
|
(12.4)
|
|
(10.4)
|
|
18.8%
|
|
22.4%
|
|
Total Adjusted
EBITDA
|
69.3
|
|
69.5
|
|
(0.2%)
|
|
2.1%
|
|
Adjusted Net Income
|
29.3
|
|
28.5
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
$
millions
|
Nine Months Ended
May 31,
|
|
%
Variance
|
|
2017
|
|
2016
|
|
Reported
|
|
Constant
Currency
|
|
Revenue
(segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium
Schools
|
|
|
|
|
|
|
|
|
China
|
160.4
|
|
165.8
|
|
(3.2%)
|
|
2.0%
|
|
China-Bilingual
|
10.1
|
|
-
|
|
-
|
|
-
|
|
China Total
|
170.5
|
|
165.8
|
|
2.9%
|
|
8.4%
|
|
Europe
|
191.3
|
|
184.4
|
|
3.7%
|
|
4.8%
|
|
Middle East
|
82.1
|
|
76.9
|
|
6.9%
|
|
6.9%
|
|
Southeast Asia
|
125.5
|
|
108.6
|
|
15.6%
|
|
15.3%
|
|
North America
|
219.7
|
|
201.7
|
|
8.9%
|
|
9.9%
|
|
Total Premium
Schools
|
789.1
|
|
737.4
|
|
7.0%
|
|
8.8%
|
|
Other
|
3.6
|
|
3.5
|
|
1.9%
|
|
18.8%
|
|
Total
Revenue
|
792.7
|
|
740.9
|
|
7.0%
|
|
8.8%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(segment)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium
Schools
|
|
|
|
|
|
|
|
|
China
|
68.6
|
|
71.4
|
|
(4.0%)
|
|
1.4%
|
|
China-Bilingual
|
0.5
|
|
-
|
|
-
|
|
-
|
|
China Total
|
69.1
|
|
71.4
|
|
(3.2%)
|
|
2.2%
|
|
Europe
|
49.8
|
|
43.1
|
|
15.6%
|
|
16.9%
|
|
Middle East
|
20.1
|
|
17.6
|
|
14.2%
|
|
14.3%
|
|
Southeast Asia
|
42.1
|
|
34.3
|
|
23.0%
|
|
21.9%
|
|
North America
|
53.9
|
|
64.6
|
|
(16.4%)
|
|
(15.8%)
|
|
Total Premium
Schools
|
235.0
|
|
231.0
|
|
1.8%
|
|
3.8%
|
|
Other
|
0.4
|
|
0.0
|
|
519.1%
|
|
463.3%
|
|
Central and Regional
Expenses
|
(35.9)
|
|
(30.4)
|
|
18.0%
|
|
21.3%
|
|
Total Adjusted
EBITDA
|
199.5
|
|
200.6
|
|
(0.5%)
|
|
1.4%
|
|
Adjusted Net Income
|
84.2
|
|
82.1
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
We use EBITDA,
Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings per
Ordinary Share as supplemental financial measures of our operating
performance. We define EBITDA as profit for the period plus income
tax expense, net financing expense, exceptional items, other
losses/(gains), impairment of goodwill, amortization and
depreciation, and we define Adjusted EBITDA as EBITDA adjusted for
the items set forth in the table below. We define Adjusted Net
Income as Adjusted EBITDA adjusted for the items in the table
below. We define Adjusted Earnings per Ordinary share as
Adjusted Net Income divided by the weighted average ordinary shares
outstanding for the period. EBITDA, Adjusted EBITDA, Adjusted Net
Income and Adjusted Earnings per Ordinary Share are not standard
measures under IFRS. These measures should not be considered in
isolation or construed as alternatives to cash flows, net income,
earnings per ordinary share or any other measure of financial
performance or as indicators of our operating performance,
liquidity, profitability or cash flows generated by operating,
investing or financing activities. We may incur expenses similar to
the adjustments in this presentation in the future and certain of
these items could be recurring. EBITDA, Adjusted EBITDA, Adjusted
Net Income and Adjusted Earnings per Ordinary Share presented
herein may not be comparable to similarly titled measures presented
by other companies.
|
|
Reconciliation of
EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted
EPS
|
|
|
(Unaudited)
|
Three Months Ended
May 31,
|
|
Nine Months Ended
May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
$
millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the
period
|
11.6
|
|
2.6
|
|
70.4
|
|
56.3
|
|
Income tax
expense
|
3.8
|
|
9.6
|
|
21.3
|
|
23.7
|
|
Net financing
expense
|
22.6
|
|
19.2
|
|
49.2
|
|
44.3
|
|
Exceptional
items(1)
|
1.2
|
|
6.1
|
|
2.5
|
|
11.0
|
|
Other
losses/(gains)(2)
|
7.7
|
|
10.1
|
|
(10.6)
|
|
4.8
|
|
Amortization
|
4.6
|
|
4.6
|
|
13.7
|
|
13.8
|
|
Depreciation
|
0.1
|
|
0.2
|
|
0.4
|
|
0.6
|
|
Depreciation in Cost
of Sales
|
11.9
|
|
12.4
|
|
35.9
|
|
35.2
|
|
EBITDA
|
63.5
|
|
64.8
|
|
182.8
|
|
189.7
|
|
|
|
|
|
|
|
|
|
(Gain)/loss on
disposal of property, plant
and equipment
|
0.2
|
|
(0.6)
|
|
(0.2)
|
|
(0.6)
|
|
Share based
payments(3)
|
2.2
|
|
1.5
|
|
6.4
|
|
4.7
|
|
Greenfield
pre-opening costs(4)
|
1.3
|
|
1.7
|
|
4.1
|
|
3.7
|
|
China Bilingual
division establishment
|
0.6
|
|
-
|
|
1.4
|
|
-
|
|
Rollout of Juilliard
Program(5)
|
0.8
|
|
0.5
|
|
2.3
|
|
1.7
|
|
Rollout of MIT
collaboration(6)
|
0.2
|
|
0.4
|
|
0.9
|
|
0.4
|
|
Global campus
expedition facility(7)
|
-
|
|
0.9
|
|
0.1
|
|
0.9
|
|
SOX
implementation
|
0.4
|
|
-
|
|
1.4
|
|
-
|
|
Other
|
0.1
|
|
0.3
|
|
0.3
|
|
0.1
|
|
Adjusted
EBITDA
|
69.3
|
|
69.5
|
|
199.5
|
|
200.6
|
|
|
|
|
|
|
|
|
|
Depreciation
|
(12.0)
|
|
(12.6)
|
|
(36.3)
|
|
(35.8)
|
|
Net Financing
Expense
|
(22.6)
|
|
(19.2)
|
|
(49.2)
|
|
(44.3)
|
|
Financing Expense
Adjustments(8)
|
7.0
|
|
2.0
|
|
2.7
|
|
(6.0)
|
|
Income Tax
Expense
|
(3.8)
|
|
(9.6)
|
|
(21.3)
|
|
(23.7)
|
|
Tax
Adjustments(9)
|
(7.5)
|
|
(1.1)
|
|
(9.0)
|
|
(7.3)
|
|
Non-Controlling
Interest
|
(1.1)
|
|
(0.5)
|
|
(2.2)
|
|
(1.4)
|
|
Adjusted Net
Income
|
29.3
|
|
28.5
|
|
84.2
|
|
82.1
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
ordinary share(10)
|
|
|
|
|
|
|
|
|
(in $)
Basic
|
0.28
|
|
0.27
|
|
0.81
|
|
0.79
|
|
Diluted
|
0.28
|
|
0.27
|
|
0.80
|
|
0.79
|
|
|
|
|
|
|
|
|
|
(1)
Exceptional expenses primarily relate to the acquisition of
schools, including associated transaction and integration
costs.
|
|
(2)
Represents the fair value gains and losses on our cross
currency swaps, various put/call options, embedded lease
derivatives at our Chicago South Loop school and the British
International School of Houston and unrealized foreign exchange
movements on our intercompany
balances.
|
|
(3)
Represents non-cash charges associated with share based payments to
members of management.
|
|
(4)
Includes the pre-opening costs associated with the opening of new
campuses in Houston, Abu Dhabi, Hong Kong, Bangkok and China
Bilingual.
|
|
(5)
Represents the costs associated with the development of dance and
drama curricula as part of the Juilliard-Nord Anglia Performing
Arts Program.
|
|
(6)
Represents the costs associated with the roll-out of the MIT
collaboration as this is the first pilot year of the
program.
|
|
(7)
Represents the reclassification of certain Global Campus costs
incurred in the three months ended November 30, 2016 to operating
costs.
|
|
(8)
Adjustment for unrealized foreign exchange gain arising from the
revaluation of the CHF200.0 million senior secured notes to US
dollar.
|
|
(9)
Represents the tax impact associated with the exclusion of certain
costs including exceptional items and amortization in calculating
Adjusted Net Income. The effective tax rate for the year used in
calculating the tax impact is 25.97%, which is the estimated
effective tax rate for fiscal 2017 excluding unrealized FX
gains.
|
|
(10)
Earnings per ordinary share is calculated by dividing profit for
the period attributable to owners of the parent by the weighted
average ordinary shares outstanding for the period. For the three
months ended May 31, 2017 the basic and diluted weighted average
ordinary shares outstanding were 104.1 million and 106.1 million
ordinary shares, respectively. For the nine months ended May 31,
2017 the basic and diluted weighted average ordinary shares
outstanding were 104.1 million and 105.8 million ordinary shares,
respectively. For the three and nine months ended May 31, 2016 the
basic and diluted weighted average ordinary shares outstanding were
104.1 million ordinary shares.
|
View original
content:http://www.prnewswire.com/news-releases/nord-anglia-education-reports-third-quarter-fy2017-financial-results-300493454.html
SOURCE Nord Anglia Education, Inc.