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0 12/12/2007 www.estacioparticipacoes.com/ir João Rosas COO César Lage CFO and IRO
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12/12/2007
www.estacioparticipacoes.com/ir
João Rosas
COO
César Lage
CFO and IRO
1
Disclaimer
This presentation contains forward-looking statements relating to the prospects of the business, estimates foroperating and financial results, and those related to growth prospects of Estácio Participações. These aremerely projections and, as such, are based exclusively on the expectations of Estácio Participações’management concerning the future of the business and its continued access to capital to fund the Company’sbusiness plan. Such forward-looking statements depend, substantially, on changes in market conditions,government regulations, competitive pressures, the performance of the Brazilian economy and the industry,among other factors and risks disclosed in Estácio Participações’s filed disclosure documents and are,therefore, subject to change without prior notice. Since the Company was constituted only on March 31, 2007,we present, for the sole purpose of comparison, the non-audited pro-forma information for the nine months of2006 and 2007, as if the company's constitution had occurred on January 1, 2006. In addition, certaininformation was presented adjusted to reflect the payment of taxes at SESES, our largest subsidiary, which,starting in February 2007 and as a result of its transformation into a for-profit company, being subject to thetax laws applicable to other legal entities, notwithstanding the exemptions arising under the University for AllProgram (PROUNI). The information presented for comparison purposes should not be used as a base forthe purpose of calculating dividends, taxes or any other corporate purpose. We are a holding company, andour only assets are our interests in SESES, STB, SESPA, SESCE, SESPE and UniRadial, and we currentlyhold 99.9% of the capital stock of each of these subsidiaries. We are a holding company incorporated onMarch 31, 2007 as a result of a corporate restructuring that segregated the post-secondary educationoperations of our subsidiaries SESES, STB, SESPA, SESCE and SESPE under our common control.
2
1. Visão Geral Company Overview
Brazilian Post-Secondary Education Market
Business Strategy
Operating and Financial Highlights
33
Highlights
*wholly-owned subsidiaries
4
425 thousand students enrolled
in post-secondary programs
4
2,753 students 11,672 students
677 students
4,817 students5,553 students
4,168 students
1,804 students
1,677 students
1,745 students 11,206 students
2,983 students
1,376 students
2,679 students
Subsidiaries :
116 thousand students (ESTC)
State of Rio de Janeiro
10,141 students
Source: SINAES/2005
2nd largest market in Brazil
12.6% of GDP
15.4 million inhabitants
Geographic Coverage
5
Growth and Profitability
23 2635
National
Leadership
51
70
118
141
135144
162
166
179
1970/96 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 SEP
Beginning of
national
expansion
project
Organic Growth
Nu
mb
er
of
un
de
rgra
du
ate
stu
de
nts
(0
00
)
Turnaround
174
JUN
2007
UniRadial
Acquisition
Aug/07
(SP / PR)
North and
Northeast
institutions for-
profit status
achieved (2007)
SESES for-
profit status
achieved
(feb/2007)
6
11.9%
6
Market share
Source: SINAES/MEC/INEPSource: SINAES
Total: 4.5 million studentsTotal: 425 thousand students
Other
27.1%
UVA
2.4%PUC RJ
2.6%UNIG
3.0%
UCAM
3.8%
UGF
3.9%
UniGranrio
4.2%
SUAM4.5%
UniverCidade
7.4%
Universo
13.7%
27.3%3.7%
Unip 2.4%
Ulbra 1.5%
Universo 1.3%
Unipac 1.1%
Uninove 1.0%
Uniban 0.9%
Other
88.1%
Estácio: The Leading Player
Smaller Institutions
Rio de Janeiro (number of students) – 2005 Brazil (number of students) – 2005
7
Source: Ministry of Education – ENADE (National Evaluation) Source: Ordem dos Advogados do Brasil (OAB - RJ)
Unipac
Ulbra
Uninove
Universo
Unip
Uniban
Anhanguera
AVERAGE 3.10
3.15
3.05
2.98
2.86
2.85
2.76
2.58
2.93
95%
88%85%
76% 75%
61%
43%
58% 56%
UERJ
PUC-RJ
UFRJ CândidoMendes
UniverCidade
GamaFilho
Veiga deAlmeida
UNIVERSO
AVERAGE 63%
ST
UD
EN
TS
EN
RO
LL
ED
204 268 282 2,225 1,203 1,245 373 199 483
Perception of Quality
Average 2004, 2005 and 2006 ENADE’s Evaluation 2006 Brazilian Bar Association Pass Rate in Rio de Janeiro
8
Price, Quality and
Convenience
Better Value Proposition for the
Student
Consolidation
Increase in market
share and improved
margins
1
2
3
4
Opportunities for Expansion
‘Asset Light’
Growth Model
Higher return on capital invested
Structured Expansion
Operational
synergies in the
acquisitions and
business
turnaround plan on
course
9
1. Visão Geral Company Overview
Brazilian Post-Secondary Education Market
Business Strategy
Operating and Financial Highlights
10
Source: Unesco/INEP/MEC/SINAES
23.4
17.3
11.8
9.0
4.5 4.0
China USA India Russia Brazil Japan
11%22% 24% 24%
48%
65%71%
83%
India China Brazil Mexico Chile Argentina Russia USA
Source: Unesco
31% 30% 29% 28% 27%
69%70%
71% 72% 73%
2001 2002 2003 2004 2005
Public Private
3.0
3.53.9
4.24.5
Private
CAGR
12.2%
Source: INEP/MEC Source: INEP/MEC
183 195 207 224 231
1,2081,442
1,6521,789
1,934
2001 2002 2003 2004 2005
Private
CAGR
12.5%
Sector Overview
Post-secondary Enrollment in 2005 (000)
Enrollment in Brazil – Post-secondary (million)
Public Private
Post-secondary Institutions in Brazil (in number of units)
Gross Enrollment Rate1 – Post-secondary (2005)
Largest market in Latin America and 5th in the world, with low penetration rate
1. Percentage of students completing high school directly enrolling in post-secondary education
1111
2010 Brazil
Estimate5.7 million
(CAGR 4.8%)
Source: Hoper Educacional
2010 Brazil
Target*
7.1 million
(CAGR 21.7%)
•Taget of 30% penetration (18-24 years old population)
(Penetration 2005: 10.9%)
Source: Plano Nacional de Educação/IBGE
Proportion of Post-Graduate Enrolled Students between 20 and 24 years old
Source: IBGE/MEC/INEP/Paulo Renato Souza Consultores
0
5
10
15
20
25
30
35
40
45
RS SC RJ MS SP PR GO TO ES MT AM MG PI AP ACRN RO PB PE SE RR AL CE PA BA MADF
Brazil Average: 21.6%
1.6
1.82.0
2.32.6
3.0
2005 2006 2007E 2008E 2009E 2010E
Source: Gismarket / IBGE / INEP
Strong Growth Potential
Demand for qualified professionals should drive enrollment in post-secondary institutions
Number of young working adults in post-secondary education (million)
1212
Source: Hoper Educacional
82.6%
17.4%
High potential for ConsolidationTotal: 1,934 Institutions
Source: Hoper Educacional
Total: 3.3 million of enrollments
Source: SINAES
166.5
106.9
66.058.2
47.843.8 41.5
Unip Ulbra Universo Unipac Uninove Uniban
Highly Fragmented Market
Top 10 Private Institutions Market Share (2005)
Based on Number of Enrolled Students
Private Institutions vs. Students (2005)
Up to 499
500 < 1.9K
2K < 4.9K5K or more
1,014
616
173
131
Top Players in Brazil in 2005 (in 000 students)
For-profit institutions Non-profit institutions
Top 10 largest post-secondary institutions account only for 17% of total enrolled students
13
1. Visão Geral Company Overview
Brazilian Post-Secondary Education Market
Business Strategy
Operating and Financial Highlights
14
Organic Acquisition
Growth Strategy
Business Turnaround
Youth aged 18 to 24
Job seekers
Workers who also study
Self-financed students
SU
PP
LY T
RIG
GE
RS
Value Proposition: Seizing Market Opportunities,
Growth and Profitability
Convenience
Location
Competitive price
Quality fit
Labor-market oriented
Adequate facilities
DEFINITION OF OUR TARGET MARKET
Operational Improvement
15
Distance Learning
Organic Growth
Growth
Consolidation
Related Business
Transformation into university centers
Open of new units/Campuses
Job Placement programs
Marketing efforts
New programs to attract and retain students
Competitive prices in all markets
16
Acquisition: Target Market
Full Companies Operating Units
Over 5,000 students
Compatible stand
Priority for university centers
Priority for institutions expediting capture of operating synergy
Any size but with preference to those with over 1,000 students
Compatible market position
Only for expanding already existing units
Administrative and academic synergy
Growth
PotentialSynergiesStrategic Fit
17
Radial University Center Acquisition Expansion of operations in 2 of Brazil’s
largest markets: São Paulo and Paraná
31% of Brazilian GDP
21.6% of Brazilian population
GDP per capita of R$13.7 thousand (US$ 7.8 thousand)
1.2 million students enrolled
28.5% of the enrolled students between 20 and 24 years old
17
Aquisições: UniRadial
Over 40 years of tradition and quality
Paraná
São Paulo
7 campuses
1 campus
Location
8 campuses (1 university center)
10,100 students (sept/07)
23 Campuses (undergraduation,
technology and Lato sensu post-
graduate programs)
Company structure
New Campuses
2008/2009
18
Operational Improvement
Rollout of SAP and SIA (academic)systems in all units
Management Targets
(bonus program)Increasing use of Distance
Learning
Optimization and standardization of
courses and centralization of
backoffice.
Cost Reduction / Continuous Improvement
19
1. Visão Geral Company Overview
Brazilian Post-Secondary Education Market
Business Strategy
Operating and Financial Highlights
20
Average Tuition 415.8 400.0 3.9%
Enrolled Students (thousands) 172.2 172.5 -0.2%
Revenue
Net Revenue (R$ million)
21
EBITDA
EBITDA (R$ million)
22
EBITDA Margin
EBITDA Margin: ex-rentalsEBITDA Margin
23
Net Income
Net Income (R$ million)
Excluding the extraordinary IPO expenses (R$15.5 million in the 3Q07 and R$17.2 million in the 9M07
Net Income (R$ million)
24
Capex / Depreciation
Investments (Capex)
159
78
9M06 9M07
Capex (R$)/ Student
Organic Capex (R$ million)
25
Cash Flow
Cash Flow - 3Q07 (R$ million)
26
Shareholders (thousand)
Common
Shares %
Preferred
Shares % Total %
Controller and Related Shareholders 142,054 87.7 34,109 46.3 176,163 74.8
UBS Pactual Asset Management 1,846 1.1 3,699 5.0 5,545 2.4
Other (free-float) 18,018 11.2 36,029 48.7 54,047 22.9
Total 161,918 100.0 73,837 100.0 235,755 100.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
7/30 8/9 8/19 8/29 9/8 9/18 9/28 10/8 10/18 10/28 11/7 11/17 11/27 12/7
ESTC11 IBOV IVBX-2
Ownership Breakdown and Units Performance
* 1 unit = 2 preferred shares and 1 common share
2727
IR Contact
Investor Relations
Carlos Lacerda – [email protected]
Pedro Alvarenga – [email protected]
e-mail: [email protected]
Phone: (55) 21 3410 7250 / 7298 / 7110
Thank You!
Visit our website: www.estacioparticipacoes.com/ir
