23 Nov

iCollege Company Presentation

(ASX:ICT) Company Presentation 1 Company Portfolio English Building & Construction Healthcare & Community Services Technology Design Business & Management Language Hospitality/ Foundation Skills/Business Student Recruitment ELICOS Coding Coding Marketing Design Extensive in demand course range to offer prospective students Extended Student Lifecycle Combined group offers increased range of courses and delivery locations. Sustained growth in the health, community services and hospitality sectors due to ongoing skill shortages. Go Study Australia has of?ces in France, Italy, Spain, Chile, Colombia, Mexico & Australia. Signi?cant new up-selling and cross selling opportunities across the combined group. Legend - Market Sector International Domestic Online Student Recruitment English Language Vocational & Short Courses Higher Education Business & Management 2 iCollege Funding Sources FEE-HELP COMMONWEALTH SUPPORTED PLACES VET STUDENT LOANS - $275M2 JOB TRAINER - $1 bn 4 INTERNATIONAL EDUCATION MARKET - FEE FOR SERVICE $31.7 bn 1 SUBSIDISED STATE GOVERNMENT CONTRACTS - $6.2 bn 2 1 https://www.ieaa.org.au/about-us/sector-stats 2 https://www.ncver.edu.au/news-and-events/media-releases/government-funding-of-vet-2019-data-now-available 3 https://ministers.dese.gov.au/cash/infection-control-training-fast-tracked-re-opening-businesses 4 https://www.dese.gov.au/skills-reform/jobtrainer-fund INFECTION CONTROL FUND - $80M3 Holding accreditations for multiple sources of government supported tuition funding enables iCollege to signi?cantly expand its market appeal and reach. iCollege is the only ASX listed organisation to hold accreditations for subsidized training contracts across 5 Australian states and territories plus Commonwealth Supported Places, FEE-HELP and Vet Student Loans. 3 Strategic Rationale for the RedHill Acquisition Combining iCollege and RedHill brings together two Australian industry leaders creating a champion education portfolio delivering: a diversi?ed earnings base an expansive geographic footprint strengthened balance sheet greater liquidity and increased market capitalisation Immediate and longer term cost and revenue synergy opportunities, not otherwise available to the standalone entities. The company bene?ts from the combined management talent of both organisations which has been carefully selected to ensure business stability and continuity. Leveraging the existing strengths and experience of each company’s existing boards and management helps de-risk the execution of the various cost and revenue synergy opportunities. Expanded student agent network provides an opportunity to increase international reach and student enrolment pipelines, ensuring a boost in student numbers upon reopening of Australia’s borders. Leveraging existing relationships to maintain strong ongoing engagement with industry, government and regulatory bodies. Completing of the acquisition of RedHill Education Limited in October 2021 has created a new foundation for iCollege to build upon: 4 FY21 REVENUE BY SECTOR* FY21 REVENUE BY STUDENT MARKET* FY21 REVENUE BY STATE* iCollege RedHill Combined Proforma Financials $64.6m $75.4m $10.8m $10.8m $9.7m ($1.1m) Revenue FY20 Operating EBITDA FY20 (post AASB16) $43.5m $59.8m $16.3m $8.3m $11.2m $2.9m Revenue FY21 Operating EBITDA FY21 (post AASB16) Domestic 34.2% International 65.8% Business 26% VIC 29% NSW 38% QLD 17% WA 8% Hospitality 11% ELICOS 17% Technology & Design 26% Student Recruitment 7% Aged Care 7% Online 2% ACT 1% Other 6% SA 5% *combined iCollege and RedHill FY21 revenues * EBITDA represents operating results excluding one time costs iCollege ideally placed to recover revenues and earnings to pre-pandemic levels when international borders re-open and international students resume arriving into Australia. 5 iCollege is well placed to be a major participant in rebuilding the important international education industry in Australia. International Student Market - Poised for Recovery WA $2.1b SA QLD $5.4b NSW $13.4b NT VIC $12.8b T 2020 INTERNATIONAL EDUCATION TUITION VALUE BY STATE 2020 INTERNATIONAL STUDENT ENROLMENT BY EDUCATION SECTOR $31.7 Billion International education was Australia’s 4 th largest export at 4 th international students studied in Australia in 2020** 686,104 iCollege active international student campus iCollege active domestic student campus only iCollege inactive ELICOS & VET 46% Higher Education 46% Schools 3% Non-award 5% International education supported more than 240,000 jobs across the Australian economy* https://www.ieaa.org.au/blog/2020-by-the-numbers *Australian Bureau of Statistics (2020) Australian Government (2018) **Department of Education, Skills and Employment (YTD December 2020) 6 Student Study Intentions Remain Strong IDP Connect research shows international students still intend to study in Australia, and there is signi?cant pent up demand from prospective students who will seek to enter the country and commence studying when international borders re-open. Opportunity to enhance course delivery models by blending online and face-to-face delivery 79% of students with current offers are holding on to their plans Online but transition to face-to-face Apr 20 Jun 20 Jul 21 Apr 20 Jun 20 Jul 21 Apr 20 Jun 20 Jul 21 Defer entry to study face-to-face Undecided INTENTION TO COMMENCE STUDY AS PLANNED PREFERENCE OF DELIVERY MODE 79% 14% 7% 31% 40% 45% 38% 34% 28% 17% 12% 11% Yes I don’t know No Source: International Student Crossroads Research, released July 2021 by IDP Connect 7 Vaccination Rates across Top 10 Source Countries Top 10 source countries for the combined entity in FY20: 1 http://www.pm.gov.au/media/further-steps-reopen-australia-and-secure-our-economic-recovery Philippines Share of people fully vaccinated against COVID-19 Share of people partly vaccinated against COVID-19 Colombia 64% 76% 65% 79% 66% 82% 82% 30% 77% 78% 44% 20% 16% 12% 7% 8% 5% 7% 60% 53% 76% 58% 80% 69% 73% 78% 23% South Korea Japan Thailand Brazil Italy France Spain Turkey There are strong vaccination rates using Australian TGA approved vaccines across most of iCollege’s top 10 international student source countries. iCollege is therefore well positioned to welcome back international students from its wide range of source countries when international border restricitions are lifted. The Australian Government is showing clear intention to re-open international borders with countries that have high vaccination rates as a priority, welcoming back fully vaccinated citizens from Japan and South Korea from 1 st December 2021 that have a valid Australian visa. 1 Of?cial data collated by Our World in Data. This data is only available for countries which report the breakdown of doses administered by ?rst and second doses in absolute numbers. CC BY 8 VIC International Student Return Limits Plans Requirement to avoid quarantine Current vaccination rate End of 2021 6 Dec 2021 Early 2022 Late Dec 2021 when 90% vaccination target is reached Late Jan 2022 when 90% vaccination target is reached Start of 2022 academic year 250 per fortnight 250 per fortnight * * * * Initially only University Students . The second stage (early 2022) will enable more international students to return including those enrolled in private education providers. iCollege is an approved participant in the NSW Government Pilot Program commencing in early December. Awaiting advice Awaiting advice Priority to Medical and/or allied health students. Tertiary education students only initially. Fully vaccinated with TGA ** recognised vaccines 90% + 90% + 70% + 70% + 70% + 90% + NSW QLD SA WA ACT Additional Notes: Figures accurate as of 22/11/2021 References: Student arrival plans and updates (studyaustralia.gov.au) International Student Arrivals Plan | Coronavirus Victoria Safe return of international students to Western Australia | StudyPerth International Border Opening Plans By State There is positive intention by Commonwealth and State Governments to resume international student arrivals into Australia to rebuild the international education industry. In a media statement released by the Federal government on 22 November 2021, it was con?rmed that fully vaccinated international students will be permitted to return to Australia without applying for a travel exemption from 1 st December 2021. International students will need to comply with any remaining quarantine requirements in the state or territory of their arrival for the time being. 1 Supporting the safe return of international students to NSW - Study NSW Vaccination numbers and statistics | Australian Government Department of Health Travel restrictions | COVID-19 and the border (homeaffairs.gov.au) No information available Therapeutic Goods Administration (Department of Health) * ** 1 http://www.pm.gov.au/media/further-steps-reopen-australia-and-secure-our-economic-recovery 9 Integration management of?ce Facilities & Material Contracts Governance & Secretariat Finance Information Technology People & Culture Compliance, Accreditation & Quality Websites and Comms Early integration wins within 1 st 3 weeks: High level integration plan , workstreams and organizational design approved. Board & Exec SteerCo and project governance established. Detailed plans, Objectives and Key Results developed for each workstream. Cost synergies of $1.3m annualised now con?rmed and will be actioned within ?rst 12 months. On track to integrate our core HR, Payroll and Finance systems in December 2021. Refreshed iCollege website and associated brand websites to be relaunched in December 2021. iCollege Integration Program Update Integration of the RedHill acquisition has commenced, and is expected to deliver cost synergies and future signi?cant revenue synergies. 10 National Campus Footprint The combined group creates signi?cant opportunities to expand the geographic delivery locations of current course offerings, creating operating advantages and a more diverse geographical revenue base. Immediately available campus capacity provides signi?cant operating leverage as Australia comes out of COVID-19 pandemic circumstances and international students return to Australia. WA NT QLD NSW ACT VIC SA Perth Adelaide Melbourne Gold Coast Brisbane Sydney Cairns TOTAL i COLLEGE CAMPUS LOCATIONS: 15 Canberra In addition to iCollege’s campus locations there are 16 offshore student agency of?ces sourcing international students to be enrolled into iCollege and other education institutions. 11 Greater Market Capitalisation and Liquidity 1 Based on ICT share price of $0.13 on 11 August 2021 being the last trading day prior to the joint announcement of the transaction, and current basic number of ordinary shares outstanding of 581.6 million 2 Based on ICT implied offer value of $1.235 (ICT share price of $0.13 on 11 August 2021 being the last trading day prior to the joint announcement of the transaction and 9.5x exchange ratio) and current basic number of ordinary shares outstanding of 50.8 million 3 Source: IRESS 1 2 Combines two respected industry participants, creating a substantial organisation with a national campus footprint delivering a wide range of courses and programs to both international and domestic students. MARKET CAPITALISATION Combined Group Due to iCollege’s larger average daily trading volume over the last 12 months, the merger should provide greater liquidity to shareholders. Strong balance sheet provides opportunity to actively pursue organic and inorganic earnings accretive growth initiatives. LIQUIDITY ANALYSIS $75.6M $62.8M $8.3M shares traded 3 $30.7M shares traded 3 $138.4M SIMON TOLHURST - Chairman SANDRA HOOK - Non-Executive Director WILLIAM DEANE - Non-Executive Director ASHISH KATTA - Non-Executive Director iCollege Board Simon joined the board of iCollege as a Non-Executive Chairman in 2017 and has guided corporate governance of the business while working closely with the board and management to facilitate the turnaround of the company. Simon is a Partner in HWL Ebsworth’s Brisbane of?ce and has over 25 years of legal practice. He was named in The Australian Financial Review’s Best Lawyers™ as one of Australia’s best lawyers in the Litigation category. William Deane is a Non-Executive Director and Founder of RedHill. William is a founder and Director of Exto Partners Pty Ltd, a Sydney- based investment company formed in 2003. He has practised as a corporate lawyer in Australia with Blake Dawson and in the United States with Skadden Arps and Sidley Austin. As a lawyer he focussed on equity capital markets and mergers and acquisitions. Previous Role: iCollege Non-Executive Chairman Sandra brings 25+ years experience developing and implementing successful business and brand strategies, driving growth and leading change. She is currently a Non-Executive Director on publicly listed, private and government boards and her board experience spans diverse sectors including communications, food, research, technology, digital governance & policy, marketing services, MedTech and education. As a former MD, CEO, COO & CMO for Australia’s largest media companies, she bring a strong customer-centric lens and technology focus. Previous Role: RedHill Non-Executive Director BADRI GOSAVI - Executive Director & Head of Growth Badri joined the board of iCollege in May 2018 taking on the roles of Executive Director and Chief Financial Of?cer. Badri has been signi?cantly involved in all aspects of the business. His initial priorities were the redevelopment of all operating systems and restructure of the management team. Badri developed and supervised the cost management regime while working with the operations team to develop multiple domestic and international revenue streams. Previous Role: iCollege Executive Director and CFO Previous Role: RedHill Non-Executive Director Ashish joined iCollege in 2017 as Non-Executive Director and was appointed the Managing Director and CEO of iCollege, post the Manthano acquisition in 2018. Ashish has extensive experience in the vocational education industry and has managed multiple education businesses both in Australia and overseas. He was instrumental in the iCollege turnaround and was responsible for the strategic and risk management initiatives undertaken. Previous Role: iCollege MD & CEO Lisa is an experienced corporate lawyer, corporate affairs adviser and Company Secretary with particular experience working with emerging and high growth companies in the biotech, media & technology and oil & gas sectors. She has a commercial approach and practical understanding of issues facing management after having held executive roles in private and ASX listed companies. Previous Role: RedHill Company Secretary LISA JONES - Company Secretary 12 MICHAEL FAHEY Chief Financial Of?cer Michael has over 30 years of ?nance experience across multiple business sectors including pharmaceuticals, consumer goods, utilities and professional services. Michael brings deep functional ?nance and operational experience including operational ?nance expertise, leading M&A transactions and implementing large- scale system transformations. Michael has extensive international experience and has lived and worked in Switzerland, Singapore, England and the USA. Michael is a Chartered Accountant and a member of the Australian Institute of Company Directors. Previous Role: RedHill CFO GLENN ELITH Chief Executive Of?cer Glenn has developed broad strategic and operational leadership capabilities through performing senior executive roles across the consumer goods, hospitality, retail and services industry sectors. Glenn was appointed Chief Executive Of?cer of RedHill Education Limited in 2012, and led that organisation through periods of signi?cant transformation, expansion and high growth before the iCollege acquisition. Glenn is an active advocate of the Australian private education industry, including through his position on the NSW Government’s International Education Advisory Board. Previous Role: RedHill MD & CEO BADRI GOSAVI Executive Director & Head of Growth Badri joined the board of iCollege in May 2018 taking on the roles of Executive Director and Chief Financial Of?cer. Badri has been signi?cantly involved in all aspects of the business. His initial priorities were the redevelopment of all operating systems and restructure of the management team. Badri developed and supervised the cost management regime while working with the operations team to develop multiple domestic and international revenue streams. Previous Role: iCollege Executive Director and CFO 13 iCollege Management Leading diversi?ed portfolio of education businesses, positioned to invest, innovate and compete in a rapidly growing marketplace. National campus footprint and strong online delivery capabilities. Highly regarded and experienced board and management team with a demonstrated track record of delivering growth, expansion and shareholder value. Very well positioned for the recovery of the international student market, with strong brand reputation. Strong track record of regulatory compliance and extensive industry partnerships for student internships and job outcomes. Board mandate to focus on further growth and expansion – organic and inorganic. Strong international student capabilities, including operating the Go Study Australia business to source international students from Europe and South America to study in Australia. Extensive international student agency network representing a broad range of nationalities. Establishment of new purpose built campus in the Brisbane CBD with the ability to deliver multiple brands and course types. Expansion of aged care courses into regional Queensland with new Cairns campus now operational. Expected revenue growth from WA traineeships application approved by Western Australian Department of Training and Workforce Development in September 2021. Upselling and cross-selling brands and courses across the merged group. Considering geographic expansion of existing courses and brand where campus facilities exist. Accelerated growth of online courses and programs delivered to international students ahead of welcoming them back into Australia. Graduate diploma courses launched by Greenwich Management College. Exploring accretive acquisition targets to deliver growth in shareholder value. 14 Revenue growth activities currently underway or under consideration Investor Highlights 15 Disclaimer This presentation does not constitute an offer or invitation in any jurisdiction, or to any person to whom, such an offer would be unlawful. This presentation is not intended as an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any security in the United States or to any person to whom it is unlawful to make such an offer or solicitation. The securities that may be included in any offering have not been, and will not be, registered under the US Securities Act. This presentation should not be relied upon as a representation of any matter that a potential investor should consider in evaluating the company. The company and its af?liates or any of its directors, agents, of?cers or employees do not make any representation or warranty, express or implied, as to or endorsement of, the accuracy or completeness of any information, statements, representations or forecasts contained in this presentation and they do not accept any liability for any statement made in, or omitted from, this presentation. Prospective investors should make their own independent evaluation of an investment in the company. Nothing in this presentation should be construed as a ?nancial product advice, whether personal or general, for the purposes of Section 766B of the Corporations Act. This presentation consists purely of observable information and does not involve or imply a recommendation or a statement of opinion in respect of whether to buy, sell or hold a ?nancial product. The company has not considered any of your objectives, ?nancial situation or needs. This presentation and contents has been made available as a general update and may not be reproduced or disclosed to third parties or made public in any way without the express written permission of the company. 16 THANK YOU
Information on this Website is provided for general information purposes only and is not a substitute for professional advice. ASX Information (including company announcements and prices) is delayed by at least 20 minutes. JSE Information (including company announcements and prices) is delayed by at least 15 minutes. Reliance on the information you access on or from this Website is solely at your own risk. We make no representation or warranty in relation to the future performance of the companies that appear on this Website. Investment in securities involves risk and you should obtain independent professional legal, financial, investment or company advice before acting on any of the information you access on this Website. Using, browsing or otherwise accessing this Website is subject to our Terms and Conditions and our Privacy Policy.

© 2021 Listcorp. ABN 60 166 140 307

Never miss news from iCollege Limited (ASX:ICT) when you join Listcorp.