Fy16 annual results presentation v final

1Fiscal year 2016 results presentation | Nord Anglia Education

Nord Anglia EducationFull fiscal year 2016 results presentation

For the period ended August 31, 2016

November 29, 2016


Neither Nord Anglia Education, Inc. (NYSE: NORD) nor any of its subsidiaries or affiliates is making any representation or warranty, expressed or implied, as to the accuracy or completeness of the attached materials.

Please note that the attached materials and our oral explanations of the attached materials may constitute forward-looking statements within the meaning of applicable U.S. securities laws and such forward-looking statements are made based on our current expectations. Forward-looking statements relate to events involving certain risks and uncertainties, and actual results may differ materially from the views expressed.

A number of potential risks and uncertainties are outlined in our public filings with the Securities and Exchange Commission. Nord Anglia Education, Inc. does not undertake any obligation to update any forward-looking statement, except as required under applicable law. You are cautioned not to place undue reliance on any forward-looking statements.

Disclaimer


Fiscal 2016 highlights v’s prior year

Financial Revenue up 49.4% (CC1 54.7%) from $573.1 million to $856.0 million Adjusted EBITDA up 58.6% (CC 65.9%) from $130.7 million to $207.3 million Adjusted Net Income up 61.9% from $41.6 million to $67.5 million Adjusted EPS2 up 54.8% from $0.42 to $0.65Operational Average full time equivalent students (FTEs) up 56.2% from 22,286 to 34,819 Capacity up 56.8% from 31,358 seats to 49,177 seats Revenue/FTE down 2.6% (CC 0.3% down) from $25.1k to $24.4k

1 CC denotes Constant Currency throughout2 Adjusted EPS refers to Adjusted Diluted EPS


Be Ambitious

Creating an education for the 21st Century


The increasing benefits of being the world’s leading premium schools organization

123

Organic FTE growth ~8% increase from Sept 2015 to Sept 2016

Employer of choice~38 applications for every teaching position

Outstanding academic outcomes Nord Anglia Education students accepted to 24 of the world’s top 30 universities

4 Opportunities for growth Execution of our growth plan and new China bilingual school strategy


Financial Performance


Group performance summary – Q4 FY2016 vs Q4 FY2015

$ millions Q4FY16(1) Q4FY15 VariancePremium Schools 113.6 85.9 32.4%

CC: 36.4%

Other 1.5 4.6

Total Revenue 115.1 90.5 27.3%CC: 31.3%

Gross Profit 38.5 25.4 51.6%CC: 58.0%

Gross Profit Margin 33.4% 28.0%

Adjusted EBITDA 6.7 (5.2)

Adjusted EBITDA Margin 5.8% (5.7)%

Adjusted Net Income (14.6) (23.2)Adjusted EPS (in $) (0.14) (0.22)

1 Q4 ends August 31


Group performance summary – FY2016 vs FY2015

$ millions FY16(1) FY15(2) VariancePremium Schools 851.0 559.3 52.2%

CC: 57.5%

Other 5.0 13.8

Total Revenue 856.0 573.1 49.4%CC: 54.7%

Gross Profit 333.8 217.3 53.6%CC: 59.8%

Gross Profit Margin 39.0% 37.9%

Adjusted EBITDA 207.3 130.7 58.6%CC: 65.9%

Adjusted EBITDA Margin 24.2% 22.8% 1.4%

Adjusted Net Income 67.5 41.6 61.9%Adjusted EPS (in $) 0.65 0.42 54.8%

1 Fiscal year ends August 312 FY15 figures reflect prior year adjustments (for additional information, see our annual report on Form 20-F filed with the SEC on November 29, 2016)


FY2016 premium schools revenue bridge

Revenue1

$m

1 Excludes Other revenue. FY2015 premium schools revenue revised for prior year adjustments (for additional information, see our annual report on Form 20-F filed with the SEC on November 29, 2016)

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

559.3

490.6

851.0

(19.0) (49.7) 62.4

298.0

13%

1


China FY2016 highlights

Commentary

Revenue/FTE $33.9k down from $35.0k: Negative FX impact from stronger USD Stronger growth in lower price schools

Adjusted EBITDA Margin 43.5% down from 46.2%: New employment related taxes and mix shift to

lower price schools

Revenue $197.3m from $183.2m +7.7%

+12.3% CC

Adj. EBITDA $85.8m from $84.6m +1.3%

+5.8% CC

Utilization:

67% 64%

FY2015 FY2016

5,2285,820

7,756

9,052FTEs Capacity

1. Average FTEs and Average Capacity excludes NACIS

1 1


Europe FY2016 highlights

CommentaryRevenue/FTE $31.7k up from $28.8k:

Acquisition of College du Leman Offset by negative FX impact from stronger USD

Adjusted EBITDA Margin 19.8% up from 12.7%: Acquisition of College du Leman Ramp-up of Aubonne School

Revenue $211.8m from $133.3m +58.8%

+67.5% CC


+169.9% CC

Utilization:

76% 78%

FY2015 FY2016

4,624

6,6796,084

8,617FTE Capacity


Middle East FY2016 highlights

CommentaryRevenue/FTE $16.4k up from $15.8k:

Tuition fee increases Stronger growth in higher price schools

Adjusted EBITDA Margin 20.1% up from 13.1%: Higher utilization rates Ramp-up of Dubai School

Revenue $87.2m from $68.6m +27.2%

+27.2% CC


+95.6% CC

Utilization:

83% 91%

FY2015 FY2016

4,344

5,3025,2515,851

FTE Capacity


South East Asia FY2016 highlights

CommentaryRevenue/FTE flat at $17.4k:

Tuition fee increases Offset by negative FX impact and stronger growth in

lower price schools

Adjusted EBITDA Margin 32.1% up from 29.4%: Tuition fee increases Continued fill of Vietnam Schools

Revenue $130.4m from $91.6m +42.3%

+49.9% CC


+64.7% CC

Utilization:

62% 62%

FY2015 FY2016

5,274

7,5058,507

12,150FTE Capacity


North America FY2016 highlights

CommentaryRevenue/FTE $23.6k down from $29.3k:

Impact of acquisitions, in particular Mexico Timing of acquisition in FY2015

Adjusted EBITDA Margin 26.6% down from 27.8%: New Chicago campus opening Acquisitions and increased rent from sale and

leaseback

Revenue $224.3m from $82.6m +171.7%

+172.0% CC


+159.1% CC

Utilization:

75% 70%

FY2015 FY2016

2,816

9,513

3,760

13,507FTE Capacity


Balance sheet & cash flow

LTM Q3FY15 LTM Q4FY15 LTM Q4FY16

4.8x4.4x

3.8x

Net Leverage

Twelve months endedAugust 31,

($ millions) 2016 2015

Cash generated from operations 221.5 167.0Payment of loan/bond expenses (5.0) (29.3)Interest paid (62.5) (31.2)Tax paid (28.9) (19.9)Net cash generated from operating activities 125.1 86.6

Acquisition consideration (33.6) (647.1)

Sale and leaseback gross proceeds 167.0 -

Capital expenditures and other (93.2) (61.9)

Net cash generated from/(used in) investing activities 40.2 (709.0)

Net cash generated from/(used in) financing activities (11.5) 699.9

Net increase in cash and cash equivalents 153.8 77.5

Exchange losses on cash and cash equivalents (7.8) (17.8)

Cash and cash equivalents at end of the period (including overdrafts) 371.9 225.9

Q4 FY2016 Net Debt $765.7m1

LTM Q4 FY2016 Consolidated EBITDA PF $200.4m2

Negative EBITDA impact from FX, new Chicago school and sale and leaseback

Highlights Summary cash flow

Target net leverage: 3.5 - 4.0x

1. Net debt calculated as principal debt outstanding including capital leases less cash 2. LTM FY16 Consolidated EBITDA pro forma the sale and leaseback

16

Click icon to add picture

Outlook


Sep-15 Sep-16 Nov 18, 2016

5,727 5,858 5,912

6,456 6,856 6,868

5,2645,611 5,627

7,2958,190 8,241

9,4359,886 9,932

446 446

North America

South East Asia

Middle East

Europe

China Bilingual

China

Strong organic enrollment for FY17 and in year growth

Organic enrollment growth for start of FY17 8%

FY17 organic in-yearenrollment growth to date 0.5%

Growing ahead of market by an average of 4%(1)

Positive trends on inquiries and visits in FY2017

Sept 2015

34,17736,848Sept 2016 Nov 2016

37,026

1. Excludes Nord Anglia Chinese International School, Shanghai

18

Nord Anglia Education is updating its revenue outlook for FY2017 to reflect the strengthening of the USD post the US Presidential election as follows:

Updated Outlook for FY2017

1 Diluted weighted average shares of approximately 104.5 million

Prior FY2017 outlook

as of Oct 10, 2016

Updated FY2017 outlook

as of Nov 29, 2016

Revenue $925 – $945 million $910 – $930 million

Adjusted EBITDA $207 – $217 million $207 – $217 million

Adjusted Net Income $67 – $72 million $67 – $72 million

Adjusted EPS1 $0.64 – $0.69 $0.64 – $0.69


Capital allocation outlook FY2017

Same school expansion

New builds Acquisitions~$200m+

Target to deploy available capital

~$11m Final payments for expansion for

September 2016 Further expansion during FY2017

in existing Hong Kong, Beau Soleil and Orlando

~$22m New Bangkok campus New Hong Kong campus New school Abu Dhabi

opening Sept. 2017

Plus ~$28m in maintenance capex and ~$4m one-off systems project capex


Appendix

21

Existing Under construction

49,400

North America11 Schools

Europe10 Schools

Middle East6 Schools

South East Asia8 Schools

Our family of schoolsChina8 Schools

United States of AmericaBritish International School of BostonBritish International School of Chicago, Lincoln ParkBritish International School of Chicago, South Loop British International School of HoustonBritish International School of WashingtonNord Anglia International School New YorkNorth Broward Preparatory SchoolThe British International School of CharlotteThe Village SchoolWindermere Preparatory School

MexicoInstituto San Roberto

Czech RepublicThe English International School PragueHungary The British International School BudapestPolandThe British School WarsawSlovakiaThe British International School BratislavaSpainInternational College SpainSwitzerlandCollège Beau Soleil, Villars-Sur-OllonCollège Champittet, NyonCollège Champittet, PullyCollège du LémanLa Côte International School, Aubonne

United Arab EmiratesNord Anglia International School DubaiThe British International School Abu DhabiQatar Compass International School, Al KhorCompass International School Doha, RayyanCompass International School Doha, GharaffaCompass International School Doha, Madinat Khalifa

CambodiaNorthbridge International School CambodiaSingaporeDover Court International School SingaporeThailandRegents International School PattayaSt Andrews International School BangkokVietnamBritish International School, HanoiBritish International School, Ho Chi Minh CityBritish Vietnamese International School, HanoiBritish Vietnamese International School, Ho Chi Minh City

ChinaLéman International School, ChengduNord Anglia Chinese International School ShanghaiThe British International School Shanghai, PudongThe British International School Shanghai, PuxiThe British School of Beijing, SanlitunThe British School of Beijing, ShunyiThe British School of GuangzhouHong Kong S.A.R Nord Anglia International School Hong Kong

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Our path to becoming the world’s leading premium schools

Listed on the main board

London Stock Exchange

Nord Anglia Education founded

Opened first school

Warsaw, Poland

Acquired new schools in SE Asia

Singapore and Cambodia

Taken private by Baring Private

Equity Asia

Andrew Fitzmauricejoins as CEO

Market cap: $40mm pre-appointment

Opened first school in China

Pudong, Shanghai

Acquired four schools in

Switzerland

Acquired first school in SE Asia

Pattaya, Thailand

Opened first school in the Middle East

Abu Dhabi, UAE

Acquired WCL Group (11 Schools)

Listed on the NYSE

Opened three new greenfields

Hong Kong, Dubai and Aubonne, Switzerland

New greenfield

Chicago, USA

Acquired four schools in Vietnam

Ho Chi Minh City and Hanoi

Acquired six Meritas schools

New greenfield

Houston, USA

Fiscal year 2016 results presentation | Nord Anglia Education

Aug 31, 2008

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Nov 18, 2016

4,010 4,282 6,166 7,054 8,180 10,27917,313

22,286

34,819 37,026

No. of schools: 6 6 9 12 13 25 31 35 42 43

Student EnrollmentCAGR: 31%

1972 1992 2002 2009 2012 20141989 2003 2008 2011 2013 2015 2016

organization

New dual curriculum school

launchedShanghai, China


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http://www.wclgroup.com/


Outstanding academic outcomes for our students

Year on year comparison. % or students achieving 5 – A* to C grades

IGCSE grades at the highest levels of A* or A

IB average Diploma score

Students Exceeding Expectations

IGCSE IB Diploma

Advanced Placement

NAE Average

Global Average

24

Greenfield opportunities generate the highest returns

Key factors: Market growth - supply/

demand dynamics EBITDA margin at maturity

average breakeven utilization – c.30-35%

average margin of NORD schools at maturity – c.33%

Lower Higher

Hig

her

Low

er

3-4 years to breakeven1

6-8 years to maturity

e.g. Chicago (opened Sept 2015)

1-2 years to breakeven1


e.g. Shanghai (opened Sept 2016)

Not a strategic fit2-3 years to breakeven1


e.g. Dubai (opened Sept 2014)

Growth

Margin

Target ROI 70%+

1. Breakeven means Adjusted EBITDA positive2. Maturity means 80% utilization



Consolidated income statement

Three Months Ended August 31.

Twelve Months Ended August 31,

$ millions, except share data 2016 2015 2016 2015(unaudited) (unaudited)

Revenue 115.1 90.5 856.0 573.1Cost of sales (76.6) (65.1) (522.2) (355.8)Gross profit 38.5 25.4 333.8 217.3

Selling, general & administrative expenses (51.9) (47.7) (192.7) (129.8)Depreciation (0.2) (0.1) (0.8) (0.7)Amortization (4.9) (4.3) (18.7) (13.9)Impairment (1.0) - (1.0) -Other gains / (losses) 18.2 15.4 13.4 12.4Exceptional expenses 2.2 (14.3) (8.8) (18.8)Total expenses (37.6) (51.0) (208.6) (150.8)

Operating (loss) / profit 0.9 (25.6) 125.2 66.5 Finance income 0.0 0.7 2.3 2.4Finance expense (19.3) (25.4) (65.9) (48.7)Net finance expense (19.3) (24.7) (63.6) (46.3)

(Loss)/profit before income tax (18.4) (50.3) 61.6 20.2Income tax credit/(expense) 11.3 7.4 (12.4) (12.5)(Loss)/profit for the period (7.1) (42.9) 49.2 7.7

(Loss)/profit attributable to: Owners of the parent (7.8) (43.4) 47.1 6.5 Non-controlling interest 0.7 0.5 2.1 1.2(Loss)/profit for the period (7.1) (42.9) 49.2 7.7

(Loss)/earnings per ordinary share (in dollars) Basic (0.08) (0.42) 0.45 0.07 Diluted (0.08) (0.42) 0.45 0.07

*Please refer to the footnotes and other information in our reports on Form 6-K furnished to the SEC and our annual report on Form 20-F filed with the SEC on November 29, 2016.


Key operating data

Three Months Ended August 31,


2016 2015 2016 2015

Full-time equivalent students (average for the period)China 5,889 5,290 5,820 5,228Europe 6,884 4,668 6,679 4,624Middle East 5,283 4,463 5,302 4,344South East Asia 7,676 6,678 7,505 5,274North America 9,560 2,857 9,513 2,816Total 35,292 23,956 34,819 22,286

Capacity (average for the period)China 9,242 7,756 9,052 7,756Europe 8,617 6,084 8,617 6,084Middle East 5,851 5,251 5,851 5,251South East Asia 12,185 11,688 12,150 8,507North America 13,507 3,760 13,507 3,760Total 49,402 34,539 49,177 31,358



Key operating data continued



2016 2015 2016 2015

Utilization (average for the period)China 64% 68% 64% 67%Europe 80% 77% 78% 76%Middle East 90% 85% 91% 83%South East Asia 63% 57% 62% 62%North America 71% 76% 70% 75%Total 71% 69% 71% 71%

Revenue per FTE (in $ thousands)China 5.4 4.9 33.9 35.0Europe 4.0 4.0 31.7 28.8Middle East 2.0 1.6 16.4 15.8South East Asia 2.8 2.4 17.4 17.4North America 2.4 6.3 23.6 29.3Total 3.2 3.6 24.4 25.1



Supplemental financial data


% Variance

$ millions2016

2015 Reported Constant

Currency

Revenue (segment)

Premium SchoolsChina 31.5 26.0 21.4% 28.5%

Europe 27.4 18.5 47.5% 52.3%

ME 10.3 7.3 41.5% 41.5%

SEA 21.8 16.1 35.9% 38.5%

North America 22.6 18.0 25.8% 27.0%

Total Premium Schools 113.6 85.9 32.4% 36.4%Other 1.5 4.6 (68.1%) (66.3%)

Total Revenue 115.1 90.5 27.3% 31.3%

Adjusted EBITDA (segment)


Europe (1.2) (6.2) 80.7% 80.6%

ME (0.1) (3.2) 98.8% 98.8%

SEA 7.6 3.4 127.5% 127.0%

North America (4.9) (0.3) (1,329.8%) (1,471.6%)

Total Premium Schools 15.8 4.3 275.6% 326.6%Other 0.5 0.5 (10.8%) 1.9%

Central and regional expenses (9.6) (10.0) 3.0% 0.5%

Adjusted EBITDA 6.7 (5.2) 234.0% 228.2%



Supplemental financial data continued


% Variance

$ millions 2016 2015 Reported Constant Currency

Revenue (segment)


Europe 211.8 133.3 58.8% 67.5%

ME 87.2 68.6 27.2% 27.2%

SEA 130.4 91.6 42.3% 49.9%

North America 224.3 82.6 171.7% 172.0%

Total Premium Schools 851.0 559.3 52.2% 57.5%Other 5.0 13.8 (64.1%) (62.2%)

Total Revenue 856.0 573.1 49.4% 54.7%

Adjusted EBITDA (segment)


Europe 41.9 16.9 147.2% 169.9%

ME 17.5 9.0 95.6% 95.6%

SEA 41.9 27.0 55.3% 64.7%

North America 59.7 23.0 159.4% 159.1%

Total Premium Schools 246.8 160.5 53.7% 60.2%Other 0.5 1.5 (67.9)% (65.6)%

Central and regional expenses (40.0) (31.3) 27.6% 30.8%

Adjusted EBITDA 207.3 130.7 58.6% 65.9%



Reconciliation of non-GAAP financial data



$ millions 2016 2015 2016 2015

Profit/(loss) the period (7.1) (42.9) 49.2 7.7Income tax (credit)/expense (11.3) (7.4) 12.4 12.5Net financing expense 19.3 24.7 63.6 46.3Exceptional items (2.2) 14.3 8.8 18.8Other losses (18.2) (15.4) (13.4) (12.4)Amortization 4.9 4.3 18.7 13.9Impairment 1.0 - 1.0 -Depreciation 0.2 0.1 0.8 0.7Depreciation in Cost of Sales 10.5 11.8 45.7 33.9EBITDA (2.9) (10.5) 186.8 121.5

Loss /(Gain) on disposal of PP&E 1.0 (0.1) 0.4 0.3Share based payments 2.0 0.1 6.7 2.3Greenfield pre-opening costs 4.0 4.0 7.7 4.0Rollout of Juilliard program 0.2 0.5 1.9 0.7Rollout of MIT program 0.5 - 0.9 -Global campus expedition facility 0.3 - 1.2 -Debt Waiver fee 1.1 - 1.1 -Sarbanes-Oxley project 0.6 - 0.6 -China expat taxes - - - 1.1Other (0.1) 0.8 - 0.9Adjusted EBITDA 6.7 (5.2) 207.3 130.7



Reconciliation of non-GAAP financial data continued



$ millions 2016 2015 2016 2015

Adjusted EBITDA 6.7 (5.2) 207.3 130.7

Depreciation (10.7) (11.9) (46.5) (34.6)Net financing expense (19.3) (24.7) (63.6) (46.3)Financing expense adjustments 1.3 9.7 (4.7) 9.7Income tax (credit)/expense 11.3 7.4 (12.4) (12.5)Tax adjustments (3.2) 2.0 (10.5) (4.2)Non-controlling interest (0.7) (0.5) (2.1) (1.2)Adjusted Net (Loss)/Income (14.6) (23.2) 67.5 41.6

Adjusted (Loss)/earnings per ordinary share (in dollars) Basic (0.14) (0.22) 0.65 0.42 Diluted (0.14) (0.22) 0.65 0.42


Fy16 annual results presentation v final

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