IMPROVING HUMAN CAPITAL
From conception to career, we’ll nurture the unique potential in each individual, thereby improving the Human Capital of this world.
1 Disclaimer
This presentation contains confidential information regarding Zee Learn Limited (ZLL, the Company) and it’s subsidiaries and affiliates (together with the Company, the Group) and is being furnished for limited use and for information purposes only. This Presentation and the information contained herein does not constitute or form part of an offer or invitation, or a solicitation of any offer, or recommendation for the purchase or acquisition of securities or any interest in the Company (including without limitation, to the Indian public or any section thereof). Neither the information contained in this Presentation nor any further information made available in connection with the Company or the Group will form the basis of any contract nor should they be relied upon in relation to any contract or commitment. This Presentation shall not be taken as any form of commitment on the part of the Company.
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2 History of creating valuable businesses and One of the largest media capturing growth opportunities conglomerates in emerging markets Zee Learn Ltd Dish TV Zee Entertainment Enterprises Ltd ------Essel
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4 Business Model Business Model • Franchise • Franchise • Company owned company operated • School Management Contract (COCO)
Services Services • Pedagogy, Curriculum & Content • Architectural designs • Teacher Training • Curriculum - Blended Learning Designs • Marketing & Academic Center Audits integrated with digital content • Parenting Programs & Seminars • Teacher Training, Marketing & Academic Audits • Parenting Programs & Seminars • Affiliation with the CBSE Board
Strengths Strengths • With R & D team of over 60 members, • State-of-the-art infrastructure, contemporary learning constant focus on pedagogy, and teaching methods, well-researched proprietary curriculum design, content creation content and constructive learning environment • Flexible pedagogy christened iLLUME • After years of research, we have created an integrated to observe children on pre-defined educational model, ‘Litera Octave’ which facilitates parameters and accordingly identify deeper concept understanding the preferred learning style
5 Business Model Business Model • Franchise • Company owned company operated • Company owned company operated (COCO) (COCO)
Services Services • Assists in Placements • Assists in Placements • Faculty training • Faculty training • Content • Content • Marketing support
Strengths Through a mix of degrees, diplomas and certificate courses, we offer a plethora of options to both fresh graduates and professionals
6 7 Strongholds of Zee Learn
• Revenue grown at a CAGR of 26% from FY12 to FY15 i.e. Rs.60 Cr to Rs. 121 Cr • Largest pre school chain in India with 1,350 operational centers (as on March 31, 2015). • MLZS with 87 operational schools is one of the fastest growing school chains (as on March 31, 2015) • On an average signed c.400 pre-schools and c.29 K-12 every year in last three years • Only organized pre-school chain operating with a business model wherein its share of royalty is collected in advance. • Developed a strong base for annuity based business models in the preschool & K-12 schools domain • The only player Maximizing Value with low risk - Huge Franchise base - Pedagogies created – ILLUME, Litera Octave - Developed school infrastructure through Brick & Mortar K-12 schools • Uniquely positioned to cater to the large unmet needs in the child development and education domain enabled by strong brands • Led by stable, performance driven, coherent management team that has played pivotal role in laying a strong foundation of the company and is now geared to take it to next level
8 Largest Pre School Chain in Asia
Particulars
Established since 2003 2003 1997 2005 1989 2006
COCO Centers √ √ √ × × ×
Franchise centers √ √ √ √ √ √
Presence Pan India Concentrated in Pan India Concentrated in Concentrated in Pan India West North North
Teaching Method Multiple Montessori, Play-way - - Multiple intelligences and Play-way Intelligence and Visual, Auditory & thematic Kinesthetic (VAK) style of learning
Differentiated Content √ × × × × ×
Nos of centres 1350 c.610 c.880 c.1000 c.300 c.270
Source: Company estimates
9 Fastest Growing K-12 School Chain in India
Particulars
COCO Schools √ √ √ √
Franchise Schools √ √ × √
Presence Pan India Pan India Pan India Pan India
Differentiated Content √ × × ×
Pedagogy Propriety pedagogy NCERT with some Propriety pedagogy Not Known ‘Litera Octave’. additional books ‘Millennium Learning System’.
Affiliated Board CBSE CBSE CBSE CBSE
Schools 87 210 112 10
Source: Company estimates
10 Zee Learn’s Strategic Growth Levers for existing businesses
Best In Class Student Best In Class Product Largest Foot Print experience Portfolio
• New signups over 350 Pre Schools • This helps in Increasing share of • Content is developed on our belief and over 30 K-12 YoY wallet per customer by leveraging that every child is unique & • Business model allows: existing relationships with business different children learn differently. -Faster scale up of operations partners resulting in higher • Developed digital content in house -Increased geographical Revenue per center/school. and activity based learning penetration (currently present • Partnerships for creating or sourcing program that provides multiple in about 20% cities across differentiated Best In Class products pathways to learn for children. India from across the world strongly • Integrated Parenting Curriculum -Enhanced control on the empowers parents to facilitate aligned with Indian Curriculum. service delivery levels for child development in the right desired outcomes manner
11 Growth Opportunities for Zee Learn
• Average enrollment per Kidzee centre is app. 80 (as on March 31, 2015), against full capacity of c.175 per centre
• Average enrollment per MLZS is app. 350 (as on March 31, 2015), against full capacity of c.1800 per school
• Our own operating K-12 schools are in nascent stage with relatively low average enrollments of c 400 per school (as on March 31, 2015), against full capacity of c.1800 per school.
• With annual addition of c.250 operational Preschools and 15 K-12 schools, the company will be on continuous growth trajectory in coming years
• Private education revenues was at USD 30 bn in 2012 and are expected to grow at 19% and reach USD 53 bn by 2016
- With its brands well established and widely accepted, ZLL is all set to participate in the growth of the education sector and tap the huge opportunity
• Pre-school segment revenues to increase at a CAGR of 15% from USD 1.5 bn in 2011 to USD 5 bn by 2020.
- With Kidzee as the largest Preschool chain in India spread c.550 cities, ZLL is quite poised to tap on this opportunity
• Share of private institution in total enrolment of K-12 segment is expected to increase to 47% in 2015-16 from 42% in 2010-11
- With MLZS amongst the fastest growing brand in K-12 segment with its footprint in c.77 cities, we are present to make a major impact in this field
12 13 Preschool - Segment Outlook
Market Growth Drivers Key Challenges
• 2012 Market size c.Rs. 5200 Cr • Lack of awareness • Increased propensity to spend on • Expected CAGR 15% • High rental cost quality education • Expected Market size by 2020 Rs. • Unavailability of quality teachers • Rising urbanization 16,000 Cr • Limited target population as they • Increase in population • Urban Penetration stands at 25% cater only to a small target • Demand Vs supply gap & Rural at 5% market in the vicinity • Increase in Consumer disposable • GER of 10.9% at all India level as • 70% Unorganized market Income /affordability compared to 100% in France or • Substantial improvement in the Scotland quality of pre-schools • Current Penetration 14 Lakh • Success of the Franchise Model children from a Preschool • Ease of entering the segment and population of 1.3 crore preschool low investment children
Source –Anand Rathi Research, Gyan Research & Fortress team research; Education outlook Technopak
14 School (K12) - Segment Outlook
Market Growth Drivers Key Challenges
• 2012 Market Size ~ Rs 83850 • Demand vs supply gap (private • Huge market potential crore schools) (population) • Expected CAGR 17% • 20000-25000 ‘Quality‘ schools • Private schools preference by • Expected Market by 2020 ~ Rs required (NCERT) parents 294450 crore • GER in India 16% whereas in • Higher stickiness (10 yr • Private schools account for 42% developed nations like UK is 85% commitment) of enrolments(2010-11) (Secondary section) • GER in elementary expected to • Total no of schools – 14 Lakh • Over regulated reach 100% by 2016 • Govt Schools – 11 Lakh • Teacher quality • Govt push for private players to • Private Schools – 3 Lakh enter the market • Private Aided - 80,000 • IB schools – growing the premium • Private Unaided – 2.3 Lakhs segment (900 schools by 2020) • Private Unaided premium (15k+ fees) - 70,000
Source –Anand Rathi Research, Gyan Research & Fortress team research
15 Higher Education - Segment Outlook
Growth Drivers Key Challenges Market
• Front-loaded capex and back • 2012 Market Size ~ Rs 31400 • Distance education programes ended returns crores operationally profitable from yr 1 • Returns sustainable after 7 yrs • Expected CAGR 14% • Govt colleges university unable to • Suitable for technical • Expected Market size by 2020 ~ handle current demand courses(mechanical, IT, MBA,etc) Rs 89700 crore • Growing importance and • Students going abroad for HE • Enrolment in India – 1.7 Crore requirement of specialized and studies out of 19 crore population in 15- skilled manpower 24 age group (<10% Enrolment) • Increasing FDI presence in the • Enrolment in USA – 1.8 Crore out sector of 3.1 crore population in 15-24 age group (58% Enrolment) • Trend of getting into digital way of learning • Distance education gaining momentum
Source –Anand Rathi Research, Gyan Research & Fortress team research
16 Future scope for expansion- Higher Education
• There is a huge potential for quality education in this segment – There is a dramatic drop in the enrolments post K12 – Only 18% of addressable students in Indians go for higher studies as compared to 85% in developed countries like US & UK
• University model can be considered for growth in the higher education space – Group already have presence through Himgiri University based out of Dehradun which has a 50 acre campus – Multiple campuses – Front ended investment ; Long gestation period of about 8 yrs for returns
• Key sectors that can be explored in the Higher Education will be the technical and professional education – Engineering, MBA, Medical etc
• Success of the University will be highly dependent on the reputation the university garners during the initial years which will be supported by – High quality professors and assistant professors – World Class Infrastructure & facilities
• Quality of Education in India can be improved by strategic tie-ups with reputed foreign Universities of UK, Canada, Australia, France
17 Future scope for expansion- Teacher Training
Market Growth Drivers Key Challenges
• Tie up with Govt (maximum • Current Market Size Negligible • Growing unmet need of good opportunity lies with them) • Expected Market by 2020 ~ Rs 2700 quality teachers by Private • Small pool of schools ready to Crore schools invest in teachers • Currently no large players exist in • Require 6.0mn more teachers by this segment. Very fragmented 2020 (govt & private) market • Translates into a requirement to train 0.75mn teachers p.a.
Source: Anand Rathi Research, Gyan Research & Fortress team research
Includes : K12 tution fees, tutoring, Stationary & Content
18 Future scope for expansion- Other potential Growth drivers in the sector
• E-learning – All forms of electronically supported learning and teaching, including educational technology and e-tutorials – Key players - NIIT, Aptech, Meritnation.com, Studymate.com – Expected Market size for E-learning in FY 2020 is more than Rs 24,000 crore
• Coaching & Tutoring – For professional courses like engineering, medical, MBA etc – Key players – FITJEE, Vidyalankar, Time, IMS – Expected Market size for Coaching & Tutoring in FY 2020 is Rs 59,000 Crore
• International Expansion of Kidzee and MLZS
19 20 Zee Learn Ltd– Operating Performance (Standalone)
Operating Revenue 1,200 800
400 Rs.Million - FY12 FY13 FY14 FY15 Revenue 610 1,000 1,192 1216
Operating EBIDTA 250 150 50
-50 Rs.Million -150 -250 FY12 FY13 FY14 FY15 EBIDTA -218 -85 104 249
21 Kidzee-Pre-school Business – Key trends
Kidzee Signups 600 400
200 Numbers 0 FY12 FY13 FY14 FY15 Kidzee Signups 310 325 388 509
Kidzee Enrollments 120,000 90,000 60,000
Numbers 30,000 - FY12 FY13 FY14 FY15 Kidzee Enrollments 60,328 73,833 91,388 107,700
22 MLZS-K-12 Business – Key trends
MLZS Signups 32 30 28 26
Numbers 24 22 FY12 FY13 FY14 FY15 MLZS Signups 28 30 31 26
MLZS Enrollments 40,000 30,000 20,000
Numbers 10,000 - FY12 FY13 FY14 FY15 MLZS Enrollments 7,767 14,582 22,606 30,500
23 Financial Highlights – Q1 FY2016
Rs in Mn
Q1 Q1 Growth Q4 Growth Particulars FY16 FY15 % FY15 %
Revenue from Operations* 357.92 372.96 (4%) 416.87 (14%)
Operating EBITDA 82.01 80.73 2% 71.86 (14%)
Operating EBITDA (%) 22.91% 21.64% 6% 17.23% 33%
Other Income 5.85 7.77 (25%) 18.18 (68%)
EBITDA 87.86 88.51 (1%) 90.04 (2%)
Finance Cost 32.84 33.39 (2%) 35.16 (7%)
Depreciation 15.44 19.48 (21%) 16.74 (8%)
PBT 39.58 35.63 11% 38.14 4%
PAT 39.58 35.63 11% 38.14 4%
* Our top line growth looks muted on account of transferring the operations of servicing educational content of Television channel ZeeQ to its group company, Zee Entertainment Enterprises Ltd and due to planned de-growth in Braincafe business. As a result, the top line of the Company is negatively impacted in 3 months period as compared to the same period last year. However during this period, our core business of pre-schools and schools grew at 9%.
24 Financial Performance - YoY
Rs in Mn Standalone Consolidated
Particulars FY15 FY14 FY13 FY12 FY15 FY14 FY13 FY12
Revenue 1,216 1,192 1,000 610 1,278 1,213 1,008 610 Expenditure 967 1,088 1,085 828 972 1,091 1,086 828 249 104 (85) (218) 306 122 (78) (218) Operating EBITDA
Other Income 47 32 6 9 38 30 6 6 Finance Cost 132 82 56 35 152 97 62 33 Depreciation and 68 65 64 30 93 74 66 30 Amortization Profit/(Loss) before 96 (13) (199) (274) 99 (19) (200) (274) Tax Provision for Tax - - 13 2 - - 14 2 Profit/(Loss) after 96 (13) (212) (276) 99 (19) (214) (276) Tax
25 26 Digital Ventures Pvt. Ltd- 100% subsidiary
DVPL is engaged in owning, developing and leasing the school infrastructure and ancillary assets required in educational business
Sr. Locations Area Peak Student School Status for Facilities No. Capacity Academic Year 2015 1 Bhatinda Spread across 8 acres - appx. c.1800 Upto Class 9 Multipurpose Hall, Sports ground, Science Lab, Computer Lab, Art 1,33,000 sq.ft. built up and Music rooms, swimming pool, tennis court Land taken on long term lease 2 Nagpur Spread across 7.8 acres - appx. c.1800 Upto Class 8 Multipurpose Hall, Sports ground, Science Lab, Computer Lab, Art 1,25,000 sq.ft. built up and Music rooms, swimming pool, tennis court Land taken on long term lease 3 Patiala Spread across 5.73 acres - appx. c.1800 Upto Class 8 Multipurpose Hall, Sports ground, Science Lab, Computer Lab, Art 1,25,000 sq.ft. built up and Music rooms, swimming pool, tennis court Land taken on long term lease 4 Karnal Spread across 5.48 acres - appx. c.1800 Upto Class 7 Multipurpose Hall, Sports ground, Science Lab, Computer Lab, Art 1,25,000 sq.ft. built up and Music rooms, swimming pool, tennis court Land taken on long term lease 5 Goa Spread across 5 acres appx. c.1800 Upto Class 8 Multipurpose Hall, Sports ground, Science Lab, Computer Lab, Art 1,35,000 sq.ft. built up and Music rooms, swimming pool, tennis court Own Land 6 Mumbai Spread across 1.45 acres – c.1376 Upto Class 8 Basket ball court, badminton court, yoga room, gymnastics room, appx. 274,000 Sq ft. built up squash court, table tennis room, mini soccer field and outdoor play Land taken on long term lease area, wifi campus, multi-media library, music and activity room, ICT and science lab, preview theater, ergonomically designed furniture, state of art class rooms, ipad/tablet enabled class room lectures
All schools are affiliated/in process with CBSE except for Mumbai school which is affiliated to International Baccalaureate (IB)
27 28 Himanshu Mody, K.V.S. Seshasai, Chairman Chief Executive Officer
• Mr. Seshasai brings along with him over 17 years of • Currently heads Group Finance & Strategy for the Essel leadership experience in operations, technology, Group. With almost 16 years of experience, he brings strategic planning and execution in the retail business. with him rich experience and skills in corporate strategy and finance. • He has a track record of handling purchasing, merchandising, marketing, operations, supply chain, • Prior to heading the Group’s finance and strategy, he process management and ERP implementation for a was Business Head for Zee Sports, since its inception. He national-level organization with multiple business was also the Business Head for the Indian Cricket League (ICL) during the same tenure. • He received British Chevening Scholarship on Globalisation and Leadership from London School of • Mr. Mody has done his M.Sc in Finance from University Economics of Strathclyde, Glasgow. • He is an engineer from Birla Institute Of Technology
and a management graduate from IIM Bangalore
29 29 Umesh Pradhan, Abhinav Upadhyay, Chief Financial Officer Head – Marketing and Innovation
• With twenty five years of experience in the key • Heads Marketing and Innovation at Zee Learn Ltd management position, Mr. Pradhan is highly and is responsible for marketing activities across accomplished accounting & finance management the organization and for all its offerings. professional with skills in achieving greater • Prior to his current role at Zee Learn, he was the organizational efficiency & profitability with reducing Head of Products and Marketing for the Foreign organizational risk. Exchange business of Thomas Cook India, where • He has demonstrated excellence in mapping business he launched digital channels for FX including requirements with proven ability in designing & online and mobile device enabled forex. Before implementing systems to achieve cost control & financial this, he worked as Brand Marketing Head for discipline and enhance the overall efficiency of the Western Union in India and as Marketing Manager organization. for South Asia. • He has worked with Essel Group (ZEEL) for 13 years from • Abhinav has a Bachelor’s degree in Business 1994 to 2007 Administration (BBA) from Lucknow University • He is a Commerce graduate from Mumbai University and and has also graduated in Brand Management a Cost Accountant. (PGDCM) from the Mudra Institute of Communications, Ahmedabad (MICA).
30 30 Sindu Aven, Head – Academic Content Vikash Kar, Human Resource Head
• • An MA in English Language and Literature from He has 14 years of progressive HR experience and has Mahatma Gandhi University, Kerala, a Master’s been associated with diverse sectors including Medical Degree in Education from the University of Devices, Pharmaceuticals, Light Engineering and Financial services and has comprehensive business HR Mumbai, which awarded her a Gold Medal for her performance. experience in various facets of the function across verticals. • Starting as a teacher at Bombay Cambridge Group • of Schools, Sindu continued her academic He has worked with several companies including MSCI engagement as a lecturer at S.K Somaiya Junior Inc, BP Ergo Limited (member HNI Corp), Wyeth Limited College, Nirmala Niketan College of Home Science (a Pfizer company) and Famy Care Limited. and St. Xavier’s Institute of Education. • He holds a post graduation degree in management • Sindu is responsible for product development studies and is a Certified Balanced Scorecard initiatives including textbook publishing, professional and a Belbin Team Roles facilitator. supplementary learning material, summer programs, interactive white board lessons and online platforms.
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