STI Holdings Investors' Brief 3Q2015
Total Page:16
File Type:pdf, Size:1020Kb
STI Education Systems Holdings, Inc. Full Year Results ending March 31, 2015 and Third Quarter Results ending December 31, 2015 1 Summary of STI Corporate Structure 2 STI Holdings Corporate Structure STI Holdings 99% 99% STI Education STI - West Negros Services Group University (STI ESG) (STI WNU) 100% 20% 52% Maestro Holdings De Los Santos – STI iACADEMY (formerly College STI Investments) (DLS STI) 100% STI College Quezon Avenue Education for Real Life 3 STI Investments Corporate Structure STI ESG Tanco Group 20% 80% Maestro Holdings (formerly STI Investments) • Acquired from Philippine American • Acquired from PhilamLife in • Provides financial services, such Life (PhilamLife), a subsidiary of AIG October 2009. as individual, family, and group in October 2009. life insurance; investment plans; • A Health Maintenance Organization and loan privilege programs. • Offers pre-need savings products (HMO) that provides effective and focusing on areas of education, quality health services that retirement pensions and memorial operates with nationwide services. accredited clinics and hospitals. Rosehills Memorial Management, Inc. • A subsidiary that is 65% owned by PhilPlans • Operates and manages a memorial park, provides memorial and interment services, and sells memorial products Education for Real Life 4 STI Holdings Network of Schools STI Holdings Combined Student enrollment Who we are 90,000 84,764 STI owns, maintains, and operates the Philippines’ largest, 80,200 80,000 76,195 private, for profit network of education institutions with more than 68,363 80,000 students enrolled in 66 STI branded colleges and 11 70,000 66,739 education centers, two non-STI branded colleges (DLS STI and 60,000 iACADEMY) and 1 university (STI West Negros University). 50,000 STI offers associate and baccalaureate programs in information 40,000 and communications technology, tourism & hospitality, liberal 30,000 arts, healthcare, engineering, education, and business 20,000 management. STI WNU also offers post graduate courses such as Master’s degrees in Public Administration, Nursing, Education 10,000 and Doctorate degrees in Public Administration and Educational 0 Management. SY 2011-12 SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 STI Owned STI Franchised DLS STI iACADEMY STI WNU STI also has a 20% interest in STI Investments which provides educational saving plans, among others. 1 university 2 non-STI branded colleges iACADEMY DLS STI 84,764 students in total Education for Real Life 5 Investment Highlights 6 Summary of investment highlights Highly attractive industry dynamics K to 12 ready institution Strong brand Scalable business model Nationwide presence Experienced management Education for Real Life 7 Exposed to highly attractive industry dynamics The Philippines has 2011-14 Philippine population 2012-14 High School Graduate the second largest 100,422 Population population in South 1,600,000 98,547 East Asia, with a large 1,400,000 1,200,000 portion of young 96,707 population 1,000,000 95,053 800,000 600,000 400,000 200,000 0 2011 2012 2013 2014 2011-12 2012-13 2013-14 PUBLIC SECONDARY SCHOOLS PRIVATE SECONDARY SCHOOLS Due to the booming 2011-14 Philippine GDP 2011-14 Consumer expenditure economy, demand for (US$ billions) on education education is expected (US$ millions) to increase over the 165 7,868 8,088 156 145 7,138 next few years 136 6,497 2011 2012 2013 2014 2011 2012 2013 2014 Sources: Euromonitor, Country Meters, Department of Education, public source citing World Bank data Education for Real Life 8 Philippine leading tertiary education provider addressing substantial market demand largest, private for-profit tertiary #1 education provider … … amid supporting macroeconomic factors 1 Increasing importance of service industry Driven by industries such as BPO, hospitality, tourism and 66 colleges 11 education centers healthcare, all of which depend upon a highly educated workforce 2 Expanding and young population 53% of population are under age of 24 PLUS 1 university 2 non-STI branded colleges 3 Rising middle-income demographic Underserved by tertiary education with only 10% of the household population having received college degrees 84,764 students in total Sources: The World Factbook, CIA; Philippine Statistics Authority Education for Real Life 9 Institution that is K to 12 Ready Approval granted to offer Senior High Extensive Senior High School offering School Seventy-seven (77) STI ESG schools STI ESG iACADEMY Academic Track Accountancy and Business Management Humanities and Social Science strand Science, Technology, Engineering and STI WNU Mathematics strand General Academic strand Technical-Vocational Information and Communications Technology Newly constructed or renovated Track strand facilities in 13 STI ESG campuses and Home Economics strand Industrial Arts strand 8 franchised schools; nationwide facilities that can accommodate 112,131 students iACADEMY Academic Track Technical-Vocational Track Arts and Design Track STI WNU Academic Track Technical-Vocational Track Arts Track Sports Track Education for Real Life 10 Strong brand offering sustainable competitive advantage More than 30 years of a strong household Brand Students Employers Strong brand preference due to high Employees Standardized education assures quality of services employers of consistent quality of manpower Value proposition encourages top Reputable & stable organization choice STI’s nationwide presence Management approach that promotes career growth Nationwide brand equity through effective marketing campaigns and word-of-mouth offers sustainable competitive advantage Education for Real Life 11 Scalable business model with centralized operations and standardized learning methodology Centralized operation Highly scalable and allows for rapid growth Nationwide marketing effect Benefits from economies of scale Uniform faculty training and Centralized IT student network services Maintains high quality and consistency of assessment increases system programs throughout the STI Network ensures quality efficiency and consistency Nationwide recognition from employers as the school of choice Professionally developed courseware across network to achieve economies of scale Fully captures the strong growth expected in the industry Education for Real Life 12 Nationwide presence with wide range of program offerings . ■ Reaches a larger student base and students not otherwise serviced by other institutions Wide breadth of programs with tailored course offerings to suit market demand . ■ Encompasses a mixed mode of both wholly-owned and franchised schools based on geographic demand 16 1 University 2 3 68 Colleges Northern Luzon 11 Education Centers 17 Metro Manila 1 19 Southern Luzon 1 3 6 2 Visayas 1 Education Centers 10 5 Mindanao Colleges Universities ICT Education Healthcare STI Branded University Colleges ECs Total Owned 1 32 4 37 Franchised 34 7 41 Total 1 66 11 78 Business Hospitality Liberal Arts Engineering Non-STI Branded Owned 2 2 Total 1 68 11 80 Education for Real Life 13 STI Education Services Group, Inc. 14 STI ESG Enrollment Data STI Network-wide Enrollment STI Enrollment 78,000 Network-wide, STI has seen a steady growth in the number of 76,000 77,645 ongoing students enrolled from 65,592 in SY 2011-2012 to 77,645 in SY 2015-16. 74,000 72,000 72,616 The growth is driven primarily by the expansion of the STI-owned 70,000 schools as the number of its enrollees grew from 29,663 in SY 70,107 2011-2012 to 42,878 in SY 2015-16, increasing its share in the total 68,000 enrollees network-wide from 45% to 55%. 66,000 67,361 65,592 64,000 In SY 2014-15, STI acquired seven schools from its franchisees 62,000 with five being absorbed by STI ESG and two integrated into STI WNU. 60,000 SY 2011-12 SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 STI Owned vs. Franchised Enrollees STI Owned vs. Franchised Enrollees (as a % of Total) 80,000 CAGR = (0.8)% 100% 70,000 90% 80% 60,000 34,767 46% 45% 33,212 70% 55% 54% 52% 36,381 50,000 35,929 36,146 60% 40,000 50% 30,000 40% 42,878 30% 54% 55% 20,000 39,404 45% 46% 48% 29,663 31,215 33,726 20% 10,000 10% - 0% SY 2011-12 SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2011-12 SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 STI Owned Franchised STI Owned Franchised Education for Real Life 15 STI ESG Tertiary Enrollment by Program Arts and Sciences Business and Management Healthcare and Education Engineering Information and Communications Technology Tourism and Hospitality Management 1% 2% 16% 15% 31% 29% 0% 6% 6% 2015* 2014* 0% Total No: Total No: 77,645 72,616 46% 48% *As of June 30 Education for Real Life 16 STI ESG CHED/TESDA/DepEd Enrollment Mix STI Network-wide Mix 100% 1,195 1,577 STI has focused on encouraging new students to 9,623 enroll in the 4-year CHED/baccalaureate programs 90% 12,237 17,092 as this provides a better avenue for learning for its 19,918 23,154 students. 80% 70% In SY 2011-2012, 64.7% of the network-wide students of STI were enrolled in CHED programs. In SY2015-16, this increased to 85.6% network- 60% wide. 50% CHED/baccalaureate programs generate higher 66,445 40% 59,184 revenues per student and because a good 53,015 47,443 proportion of the students usually stays for 4 42,438 30% years, STI achieves a lower cost of acquisition per student. 20% In SY 2015-16, STI ESG recorded 1,577 students 10% enrolled in Senior High School from 1,195 in SY 2014-15. 0% SY 2011-12 SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 CHED TESDA DepEd Education for Real Life 17 STI West Negros University 18 STI WNU Enrollment Total STI WNU Enrollment Tertiary vs Basic Education Mix 7,000 6,466 7,000 6,091 6,000 5,359 5,527 6,000 730 5,000 744 5,000 285 516 5,000 321 4,000 4,000 4,575 3,000 3,000 4,257 4,445 4,170 3,759 2,000 2,000 1,000 1,000 1,161 1,090 629 841 920 - - SY 2011-12 SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2011-12 SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 Basic Ed Tertiary Graduate STI West Negros University (STI WNU) is a private university located in Bacolod, Negros Occidental.