52
B2C POSTSECONDARY ED. ROBERTO VALÉRIO
B 2 C P O S T S E C O N D A R Y E D . R O B E R T O V A L É R I O
DISCLAIMER
The following material is a presentation of general information regarding the Company. The information herein is summarized and does not purport to be complete, and should not be construed
by potential investors as a recommendation. This presentation is strictly confidential and may not be disclosed to any other persons. We make no representations or warranties as to the
accuracy, adequacy or scope of the information presented herein, which should not be used as the basis for any investment decisions.
This presentation contains forward-looking statements and information pursuant to Clause 27A of the Securities Act of 1933 and Clause 21E of the Securities Exchange Act of 1934. Said
forward-looking statements are merely forecasts and do not represent guarantees of future performance. Investors are cautioned that said forward-looking statements and information are and
will be, as applicable, subject to risks, uncertainties and factors related to the business operations and environments of the Company and its subsidiaries, and the actual results of said
companies may differ materially from the future results expressed or implied by said forward-looking statements and information.
Although the Company believes that the expectations and assumptions contained in said forward-looking statements and information are reasonable and based on the data currently available to
its management, it cannot guarantee future results or events. The Company does not undertake any liability for updating any forward-looking statements or information.
This presentation does not constitute any offer, invitation or request to subscribe to or purchase any securities. This presentation and its contents do not constitute the basis of any contract or
commitment.
2018/20192010 2011 2014
ONCE AGAIN, WE NOTICE MAJOR DRIVERS THAT WILL BE KEY TO CREATING VALUE
S O M O S A C Q U I S I T I O N
DIGITAL TRANSFORMATION
F O C U S O N K 1 2 E D U C A T I O N
A N D B 2 B M A R K E T S
I U N I A C Q U I S I T I O N
U N O P A R A C Q U I S I T I O N
A N H A N G U E R A A C Q U I S I T I O N
F O C U S O N E F F I C I E N C Y
A N D Q U A L I T Y
DIGITALIZATION
OF EDUCATION
S C A L E A S A V A L U E D R I V E R
N E W B 2 B B U S I N E S S M O D E L S
DOES KROTON STILL HAVE ROOM FOR GROWTH?
KROTON IS TODAY
THE LARGEST PLAYERIN POSTSECONDARY
EDUCATION IN BRAZIL, WITH TOTAL NET REVENUE OF R$5 BILLION
*UNDERGRADUATE
5bn
BUT THERE IS STILL A
HUGE OPPORTUNITYTO GAIN
MARKET SHARE
5bn
9.1%
55bn
*UNDERGRADUATE
6.4 6.8 7.1 7.3 7.8 8.0 8.0 8.3 8.5
32.1 33.3 34.5 35.7 36.9 38.1 39.1 40.241.2
2010 2011 2012 2013 2014 2015 2016 2017 2018
Apart from huge growth potential for the market, proven by latent demand and the number of students enrolled in the latest ENEM editions
Enrollment Latent demand
STUDENT BASE IN
POSTSECONDARY EDUCATION
VS. LATENT DEMAND
2.9
2.4 3.2 3.9 4.1 5 5
.9
5.8 6.1
4.7
4.1
2.3
2 2.2
2.3
2.7
2.7 3.1
2.9 3 3.2 3.4
0.6
0.4
1 1.6
1.4
2.3
2.8
2.9 3.1
1.5
0.7
0.6 1 2.13.6
4.97.2
10.1
13
16.217.7
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
NUMBER OF STUDENTS
WHO TOOK THE ENEM AND
ARE NOT ENROLLED IN
POSTSECONDARY
PROGRAMS
Students enrolled in ENEM
ENEM Prospects
New enrollments in postsecondary programs
Cumulative ENEM prospects
If the economy picks up, this latent demand will beactivated more intensively, given the influence of GDP growth on student base
7.5%
4.0%
1.9%
3.0%
0.5%
-3.5% -3.3%
1.1% 1.1%
6.9%
4.9%
3.5%4.5%
9.2%
3.5%
-0.3%
3.0%
2.1%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018
A FINANCING MODEL CYCLE
Despite the change in the financing model for Postsecondary students in 2015...
49 33 3376
154
378
560
733
287
204176
82
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
NEW FIES
CONTRACTS
IN BRAZIL
-60%
...we managed to maintain our new enrollmentnumbers, compensating the reduction in FIES students with students paying out of pocket
1st semester enrollments
Kroton On-campus (Ex Prouni)
1st semester enrollments
Kroton On-campus (FIES)
-1.5%
110,063102,651
96,723106,554 104,158 108,407
2014 2015 2016 2017 2018 2019
69,700
41,860
14,39010,615
3,006 810
2014 2015 2016 2017 2018 2019
40,363 38,43955,243 61,369
76,39895,32422,352
27,09034,570
24,754
12,273
40,363
60,791
82,333
95,939 101,152
107,597
2014 2015 2016 2017 2018 2019
Pagante
1st semester enrollments Kroton On-
campus (Out-of-pocket students +
PEP)
Out Of Pocket Students
PEP
-99%
+136%+166%
Although new enrollments have remained stable, the high numberof graduation of FIES students significantly impacts our base. This dynamic ends in 2020
Student base - Kroton 1st
semester
GRADUATIONS 33,197 59587 68,257 75,289 87,887 60,907
39% 42% 43% 48% 58% 66%
4% 11% 13%
16%16%
61% 54% 46% 39% 25% 18%
422,783 437,633
412,247
375,413 358,093 353,434
2014 2015 2016 2017 2018 1S19 2020 2021
46%54%
61% 75%82%
Out of pocket + ProUni Base
PEP Base
FIES Base
HOW WILL WE RESUME
STUDENT BASE GROWTH?
Kroton is the company best positioned to compete in the current market, with high quality and operational efficiency to seize market opportunitiesthat arise with the better economic scenario
112 112 118
153176
2015 2016 2017 2018 2019
OWN UNITS
Polo
s
Polo
s
Polo
s
Polo
s
Polo
s
678
9101,110
1,3101,410
2015 2016 2017 2018 2019
THIRD-PARTY UNITS
We have the largest distribution network in the market, with representativeness across the whole country
Our units are distributed efficiently, covering 73% ofBrazil's latent demand, with presence in 1,033 cities
We are present in 19% of Brazil's cities, which
account for 73% of latent demand
We launched 64 new own units that have surpassed projected results, proving the quality in selecting cities and implementing the strategy
OPENING OF NEW UNITS IN
POSTSECONDARY
EDUCATION GREENFIELDS
AND ACQUISITIONS
Total
Campuses
Greenfields M&A Latent Demand in cities
with Campuses
112
17618
18
20
3
2
3
24%
28%30%
34% 34%
Same Stores Até 18.1 18.2 19.1 Total
We launched 64 new own units that have surpassed projected results, proving the quality in selecting cities and implementing the strategy
OPENING OF NEW UNITS IN
POSTSECONDARY
EDUCATION GREENFIELDS
AND ACQUISITIONS
Total
Campuses
Greenfields M&A Latent Demand in cities
with Campuses
112
17618
18
20
3
2
3
24%
28%30%
34% 34%
Same Stores Até 18.1 18.2 19.1 Total 2017 (17.2) 18.1 18.2 19.1
STUDENT BASE OF
NEW UNITSGRF RESULTS
VS. BUSINESS PLAN
Net Revenue +7 p.p.
Operating Result +12 p.p.
Our network of third-party DL centers continues to grow and, as market leaders, we are focusing on maximizing REVENUE SHARE and not just on MARKET SHARE
REVENUE SHARE
ANALYSIS - DL - 2018
REVENUE SHARE ESTIMATE
APPLYING WEIGHTED AVERAGE
PRICES OF MARKET.
28% 36%
9%
13%9%
12%
9%
10%
4%
7%
11%
6%31%
16%
Δ 8
MARKET SHARE REVENUE SHARE
Competitor E
Outros
Competitor D
Competitor C
Competitor B
Competitor A
Kroton
Programsavailable in diverseformats
Broad offering of products
at different levels of
attendance
RANK Program
1 Pedagogy
2 Business
3 Physical Education PE
4 Accounting
5 Law
6 Nursing
7 Social Service
8 Human Resource Management
9 Civil Engineering
10 Psychology
11 Mechanical Engineering
12 Physioterapy
13 Production Engineering
14 Logistics
15 Architecture and Urbanism
16 Pharmacy
17 Electrical Engineering
18 Nutrition
19 Public Management
20 Management Process
21 Analysis & System Development
22 Dentistry
23 Financial Management
24 Agronomy
25 Veterinary Medicine
26 History
27 Math
28 Biomedicine
29 Geography
30 Marketing
DL HYBRID DL ON-CAMPUS
We can offer the same program in different formats and prices , increasing access to more students and maximizing profitability
ATTEN
DA
NC
E
CLUSTER 1 CLUSTER 2 CLUSTER 3
• FORMAT: DL SEMI / 100% ONLINE
• AVERAGE TICKET: COMPETITIVE
• OFFERING: CAMPUSES AND CENTERS
• EXAMPLES: PEDAGOGY, LICENTIATE
PROGRAMS, POSTSECONDARY
TECHNOLOGY PROGRAMS (CSTS)
• FORMAT: ON-CAMPUS / HYBRID DL
• AVERAGE TICKET: MODERATE
• OFFERING: CAMPUSES AND CENTERS
• EXAMPLES: BUSINESS
ADMINISTRATION, ENGINEERING,
NURSING, PHYSIOTHERAPY
• FORMAT: ON-CAMPUS
• AVERAGE TICKET: HIGH
• OFFERING: CAMPUSES
• EXAMPLES: MEDICINE,
ODONTOLOGY, VETERINARY
MEDICINE, LAW
PRICE
Flexible portfolio: diverse formats enable adjustment of program offerings according to competitors and average prices in each city
ATTEN
DA
NC
E
CLUSTER 1 CLUSTER 2 CLUSTER 3
PRICE
179
259
499 599
289
749
BUSINESS
189
Flexible portfolio: diverse formats enable adjustment of program offerings according to competitors and average prices in each city
ATTEN
DA
NC
E
CLUSTER 1 CLUSTER 2 CLUSTER 3
PRICE
ENG.
529 649
799 999
Diverse program formatscreate additionalopportunities for studentenrollments who earlier hadno programs of their interestand/or prices
CLUSTER 1 – SEMI DL AND 100% ONLINE DL
CLUSTER 2 – PREMIUM DL
CLUSTER 2 – ON-CAMPUS
CLUSTER 3 – ON CAMPUS
EXAMPLE OF ENROLLMENTS IN
A UNIT - BASE 100
66 66
34 32
86100
113
18.1 19.1
The unit increased the number
of students through Distance
Learning, increasing new
enrollments in 1H19 by 13%.
The launch of new programs is one of the pillarsof growth in same units and the focus is on high LTV programs
LAW, HEALTH AND ENGINEERING HAVE
LTV +1.7X VS. SOCIAL AND APPLIED SCIENCES
Kroton average LTV (base 1)
0.310.46
1.00
1.71 1.741.84
CST
Lin
guis
tics,
Language
and
Art
s
Law
Healt
h(e
xM
edic
ine)
Socia
l and
Ap
plied
Scie
nces
Engin
eeri
ng
38%
35%
9%
18%
Autorizados desde 2018
OTHER
LAW
HEALTH
ENGINEERING
AUTHORIZED
PROGRAMS
446
446 NEW PROGRAMS
IN 2018 AND 2019
38%
27%
5%
29%
NC em Andamento
255
OTHER
LAW
HEALTH
ENGINEERING
PROGRAMS WAITING
AUTHORIZATION
82%71%
255 APPLICATIONS FOR NEW
PROGRAMS IN PROGRESS
We have four activeMedicine collegesand three to go operational in 2021, totaling496 ANNUAL
VACANCIES AND
2,976 SEATS
SAME STORES MAIS MÉDICOS
UNIC
Cuiabá / MT
UNIME
Lauro de Freitas / BA
UNIDERP
Campo Grande / MS
PITÁGORAS*
Eunápolis / BA
PITÁGORAS
Bacabal / MA
PITÁGORAS
Codó / MA
ANHANGUERA
Ponta Porã / MS
+346 ANNUAL VACANCIES
2,076 SEATS
150 ANNUAL VACANCIES
900 SEATS
*In maturation
Our medicine programs offer anopportunity for growing the studentbase and bring high-quality revenue
# STUDENT BASE
2026 (E)2019
2.976
Mais Médicos
Same Stores
+83%
2019 2026 (E)
432
REVENUE(R$ MM)
+109%
HIGH DEMAND
LOW DROPOUT RATE
HIGH LTV
In ENADE, we had an increase of 21.5 p.p. in satisfactoryprograms. Anhanguera Units made the biggestprogress, demonstrating the quality of KLS 2.0
46.3%
67.8%
2015 2018
% ENADE SATISFACTORY
Increase of
21.5 p.p.
66.0%
69.4%
55.3%
39,3%
Demais Marcas
Anhanguera
EVOLUTION
2015 2018
Increase of
10.7 p.p.
Increase of
30.1 p.p.
STUDENT
ATTRACTIVENES
1. Product differentials2. Improvement in curriculum structure3. Creation of new products
QUALITY
1. Feedback of academic modelwith ENADE and CONECTA results2. ENADE engagement actions at units3. Improved management of classroomand virtual environments4. Solutions to reinforce content5. Compliance with regulatory indices
EFFICIENCY
1. Scalable products2. Low investment for portfolio implementation3. Efficient production ofeducational materials
ENGAGEMENT
1. Active tutoring2. Continuing evaluation3. Modernization of learning4. Engaging content and formats5. Improvement in Virtual Learning
Environment (VLE)6. Faculty engagement
EMPLOYABILITY
1. Career trails and certifications2. Employability skills in academic programs3. Preparation for labor market
Year-over-year increase in NPS reflect ongoing operational improvements and impact of digital transformation
NPS VARIATION OWN UNITS NPS VARIATION THIRD-PARTY UNITS
OWN AND THIRD-PARTY UNITS REGISTERED CONSISTENT AND SIGNIFICANT
GROWTH IN NPS THROUGHOUT 2019
+14 p.p. +32 p.p.
JAN
2019
JAN
2018
AUG
2019
AUG
2018
JAN
2019
JAN
2018
+1 p.p. +14 p.p.
AUG
2019
AUG
2018
+10 p.p.
JAN
2019
JAN
2018
+11 p.p.JAN
2019
JAN
2018
Year-over-year increase in NPS reflect ongoing operational improvements and impact of digital transformation
NPS VARIATION OWN UNITS NPS VARIATION THIRD-PARTY UNITS
OWN AND THIRD-PARTY UNITS REGISTERED CONSISTENT AND SIGNIFICANT
GROWTH IN NPS THROUGHOUT 2019
AUG
2019
AUG
2018
AUG
2019
AUG
2018
WHY IS OUR NPS RESULT INCREASING?
ago-18 ago-19
+35 p.p.
Delta NPS YOY
INFRASTRUCTURE
More than 440 Works in renovation of Campuses
DIGITAL TRANSFORMATION HAS BEEN A MAJOR CATALYST
ago-18 ago-19
+35 p.p.
Delta NPS YOY Delta NPS YOY
INICIATIVES
ago-18 ago-19
+5 p.p. +30 p.p.
CONTINUING EVALUATION DISTANCE LEARNING SYSTEMS
Our method values efforts andperformance throughout the semester
and engages the student, whileboosting their learning
Unification of systems allowsfor a better user experience.
Delta NPS YOY
ago-18 ago-19
INFRASTRUCTURE
More than 440 Works in renovation of Campuses
We have commercial and marketing teams to work on maximizingvalue creation through new enrollments and retention of students
DIGITAL MARKETINGFocus on SEO to increase organic new enrollments and reduce Student AcquisitionCost
PRICINGFocus on maximizing revenue from new enrollments by defining the bestprice/offering mix
LOYALTYFocus on maximizing revenue from seniorsthrough retention
DYNAMIC PRICE MANAGEMENTContinuous monitoring of competitors' prices and weekly adjustments. Over 250,000 price points monitored
OFFERINGS LABORATORYTests and selection of offerings with
greater impact on revenue vs. controlgroups.
DROPOUT MODELIdentification of and efforts regardingstudents more inclined to drop out
SOCIAL MEDIARegionalization and customization ofcontent published on social media
NEW ENROLLMENT PORTALImproved usability and averageconversion rates 34% higher than mobile accesses
COMMUNICATION RULERAutomated and customized submissionof communication for each step of theenrollment process
STRUCTURED AND HIGHLY
SKILLED TEAMS
ADVANCED ANALYTICS TOOLS AND
METHODOLOGIES
AUTOMATED AND CUSTOMIZED
COMMUNICATION WITH
CANDIDATES
We have commercial and marketing teams to work on maximizingvalue creation through new enrollments and retention of students
DIGITAL MARKETINGFocus on SEO to increase organic new enrollments and reduce Student AcquisitionCost
PRICINGFocus on maximizing revenue from new enrollments by defining the bestprice/offering mix
LOYALTYFocus on maximizing revenue from seniorsthrough retention
DYNAMIC PRICE MANAGEMENTContinuous monitoring of competitors' prices and weekly adjustments. Over 250,000 price points monitored
OFFERINGS LABORATORYTests and selection of offerings with
greater impact on revenue vs. controlgroups.
DROPOUT MODELIdentification of and efforts regardingstudents more inclined to drop out
SOCIAL MEDIARegionalization and customization ofcontent published on social media
NEW ENROLLMENT PORTALImproved usability and averageconversion rates 34% higher than mobile accesses
COMMUNICATION RULERAutomated and customized submissionof communication for each step of theenrollment process
STRUCTURED AND HIGHLY
SKILLED TEAMS
ADVANCED ANALYTICS TOOLS AND
METHODOLOGIES
AUTOMATED AND CUSTOMIZED
COMMUNICATION WITH
CANDIDATES
OFERRINGS LABORATORY
Tests and selection of offerings with greater
impact on revenue vs. control groups.
OFERTA COM MELHOR RESULTADO
We conducted experiments to calibratethe optimum point and find the offeringwith highest revenue optimization
RESULT VS.
CONTROL
GROUPOFFERINGS CONVERSION DISCOUNT
OFFERING WITH THE BEST RESULT
EXAMPLE
STRUCTURED FRAMEWORK OF OPERATIONAL EXCELLENCE
KPIs AND
F.O.C.A.
PILLARS
.
MONDRIAN RADAR COST
MANAGEMENT
VALUE
CHAIN
OPERATION
MAP
Digital transformation is accelerating the delivery of new tools and functionalities
STUDENT ADMISSION JOURNEY
NEW ENROLLMENT PORTAL
NEW CORPORATE PORTALS
EVOLUTION OF CRM PLATFORM
FINANCIAL /ADMINISTRATION
JOURNEY
KROTON PAY(PAYMENT MEANS)
SELF-HELP PORTAL FOR STUDENTS
NEW SERVICE WORKFLOW PLATFORM
ACADEMIC JOURNEY
TUTORING ROBOTS WITH AI
ADAPTIVE LEARNING EXPANSION
CONECTA CROWDSOURCING
ANALYTICS
NEW DEVELOPMENT, STAGING AND PRODUCTION ENVIRONMENTS
PANELS AND REPORTS IN POWER BI
ENABLERS OF DYNAMIC PRICING
Positive trend in cash conversion
GREENFIELDS PEPOPERATIONOperating result better than
expected
Downward Capex Need
Maturation with a better
operating cash generation
Fewer PEP students vs.
out-of-pocket students
More PEP 50, less PEP30
Greater receipts of
installment
payments
Less need for
recurring Capex
Less working
capital
consumption
Increase in cash conversion given lowerrepresentativeness of PEP students and miximprovement
1ST SEMESTER ENROLLMENTS (X1,000)
PEP STUDENT BASE (X1,000) RECEIPT OF THE PORTION OF PEP CONTRACTS PAID IN INSTALLMENTS (BASE =1)
Reduction in new PEP students,
despite the increase in new
enrollments
PEP student base is more
balanced, with more PEP50 and
less PEP30
More PEP students
paying the installment
share
2018
24%
64%
107,6
36%
2017
76% 89%
11%
2019
95,9101,2
Out-of-pocket PEP
77%77%
1T18
23%
2T18 1T19
23%
38%
62%
3T18
61%
61,7
39%
4T18
53%
47%
46%
54%
2T19
59,061,0
59,0 58,255,1
PEP 30 PEP 50
-11%
2019
2x
2020
5x
2021
-25p.p.
WE ARE READY FOR GROWTH
CONNECTING THE PIECES
WE HAVE LOW MARKET SHARE (9.1%) IN
A LARGE MARKET WITH GROWTH
POTENTIAL
WE ARE ENDING THE CYCLE OF A
POSTSECONDARY EDUCATION FINANCING
MODEL, WITH THE PROSPECT OF RESUMING
STUDENT BASE GROWTH IN 2021
WE HAVE BRIGHT PROSPECTS TO INCREASE
CASH CONVERSION
• GREENFIELDS
• OPERATION
• PEP
