LAUR - Earnings call transcript Q3 2018 | Laureate Education, Inc.

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Operator

Welcome to the Q3 2018 Laureate Education Earnings Conference Call. My name is John and I'll be your operator for today's call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note, this conference is being recorded. the to turn Morse. now will call Adam over I

Adam Morse

XXXX you everyone, us discuss Thank quarter Hello, thank Laureate for third to you, operator. call and joining earnings on Education's results. today's

today are me Ricardo President Chief Chief and the Charhon, Joining Officer; JJ Officer. Eilif Berckemeyer, and on Operating Financial Chief Executive Serck-Hanssen, Officer; call

Our earnings website on laureate.net. available at Relations Investor press the release is our section of

remind that is which constitutes being laws. our also to financial a like and of statements the call. supplementary the would to, we'll including, guidance, operational website, be meaning posted you the security today's forward-looking after referring have recording information today, We we're U.S. The complete on providing and call webcast a limited available will within of during to presentation not be but the I call. some applicable

to factors that and materially Forward-looking and are Important expected. therefore, statements cause from differ our actual expectations materially change well time from filed results our filed risks this are may annual XX-Qs, earlier differ XX-K actual Commission, XX-Q results on that at we any to subject uncertainties could those may year; Form the U.S. other as filed with the made the in our SEC. our and disclosed SEC; Securities as report our morning; filings with this Exchange earlier

obligation of forward-looking In no on any of update date the as conference statements. are this addition, and expectations statements undertake to all current forward-looking call we based

the our Form their Additionally, are in release counterparts filed press EBITDA, also with in and measures are detailed and non-GAAP we GAAP SEC. reconciled to discuss, that adjusted including included XX-Q our

bridge keep operations continuing note now as the revenue With are of in I that that differently only quarter, will will the guidance, understand against we on when Therefore, the in being prepared turn accounted shares, over for from as adjusted Later operations. results our markets remarks, everyone the so operations are be past. reviewing for financial presented our and Xth, previously Eilif Before results, part during discussing XXXX, which presented. the me JJ August our all that now announced our our results help periods EBITDA the the let XXXX for financial announced retained are shown the to divestitures and performance in financial discontinued do than being we including continuing of discussing presented our today, divestitures you statements include all our and presentation the want With for and how remarks. that mind to for prior that, results track opening statements. of and call strategic

Eilif Serck-Hanssen

operational Adam Thank the call. line earnings to this Day as our our profile yield thanks management progress of and results. of Investor you, towards risk very the priorities everyone executing today's joining year. on with during at us The tangible pleased and strengthening outlined continue we related our that I'm of held on beginning our for portfolio to on the simplification

of profile a focused more leverage of and track improved model. we on our creation been and is through business our XX-year commitments on are debt a flow deliver cash company the Our low at XXXX level has the free significantly to

market. underway, assets of for of most with in Information wave interest of assets many initial and Specifically, are has the businesses strong. been very divestitures two our markets. The memorandums completed well these for in largely banks all level engaged already

proceeds. ability deliver We excess billion are in $X confident in in the gross to of

on timing, we track with mid-XXXX the our is of remain transactions. majority goal, for these of which terms closing the In of

engineering it of is leading our Quality network respective for very positions outcomes core and at to and in engineering have courses, including QS posted education Peru, institutions be result we reasons players. recently publicly largest attained they markets. are a where Brazil their evident We Stars, in rating have UPC do. the student the in Laureate's Across four-star-rated listed quality, amongst our the four-star also recent have the year-over-year from improvement many making that where that the of institutions from only of country. exams And recent the University other and UPC examples many science in proud their network, everything we

to authorized private example needs which data drives this attending market. innovation students AWS also another Academy. announced is maintained Spain, curriculum the Amazon the courses continually example to our in and students IBM best science Mundo. development UEM this as partnership of curriculum, institutions. new proactively All which in process to fourth by exciting and activities week, university jointly great Another announced this program we for of our the is the state-of-the-art develop to by was we offered exclusively Laureate and of and with adapt commitments ranked collaboration, we recently delivery quality And AWS earlier El the Spain this support, the by faculty good offered and earlier with and year development time, and distribution, A

in within These and The network have students relevant two in sector to Academy affordable, prepared private Laureate, in-demand to of believe the underserved. in are that Cloud the top we that to provide and pipeline. of ensures first just with employers, Architecture. Cloud we courses power are the for are skills are Academy Foundations priority. all initiatives transform examples the today's knowledge the a our At the high-quality education the and to Laureate access institutions lives This that student-centric be education markets need launched innovation two are to

remains a to network same. operating continue can intellectual changed we will our property, transformation, Laureate core into advantages -- curriculum the universities, can public, the this ourselves but transformation, university keep ask will power leveraging and for value we be mission of integrated we going coming how throughout in scale. our by sorry, impactful standalone our sizable this since maximize design. technology, by more common scale, back our and Through decentralized of competitive transitioning the lot Without network we to enabled most has from company network units Our model,

more a to us enable believe scale focused structure. greater cost we addition, footprint optimization will and geographic allow further of leverage our In

this scales, online platform we announced on market on students our very one terms at are dynamics United are we the they of two models they business markets, in that are markets in serving in will scaled of enterprises: America; emerging creating and focused of and previously be fully operate. of which in part we campus-based As States. These primarily The both different but the transformation, smaller divestiture and focused many one, Latin business,

currently these scaled, organization. two business different fit units having strategic together in We of but evaluating one the are

Walden As as such, position Walden best well best the goal key Walden, ensuring the University, we Laureate of as are considering various stakeholders. strategic the experience for and our options for providing possible for for for students with

exploratory with Walden. involving alternative possible initiated discussions regarding have transactions third-parties We

proud and is Laureate. very strength result we earliest quarter a of for assurance should the discussions in appropriate would us transaction If We deciding will quality anticipate of within the engage in we fourth to to retain quality. to pursue we that be These close are the determine any Walden, strategic this transaction. committed alternative time, any is we XXXX. of it Walden and there are that no Walden, At maintaining may

the quarters updates. We timely provide coming and and we expect appropriate will to have process this more in information on

the quarter. to summary the moving results Now, for

the guidance and the was year, ahead recent to Our of adjusted headwinds. foreign is EBITDA expected deliver quarter for full results track despite third on exchange for

according cost expectations. results tangible Our expansion and initiatives modern with and actions are delivering

X% the market financial higher call to profitable and cycle enrollments the in the segments. growth certain and XXXX turn being our year-to-date September will intake Additionally, our over period. for than completed slightly due focus period. new increasing XXXX we on domestic and to detailed expected in our in quarter core enrollments the XXXX. bit in Total compared new with the to came continued and for Walden large versus both the year-to-date markets JJ down a of enrollments year-over-year quarter enrollments to just as I X% a were year-to-date most solid attrition stable continue more driving with in the to now overview comparable results lighter XXXX increased be X%

Jean-Jacques Charhon

Eilif. you, Thank

the reminders. let results quarter, the Before third couple discussing of a me make for

this revenue, noted EBITDA header adjusted and continuing the operations results offer the period, in as enrollments, starting slides. shown for of First, those relevant

the net and metrics, balance discontinued For include with the results sheet will them shown consistent cash are we under U.S. recording income, operation the flow way GAAP.

break the quarter quarter and a seasonally are our most many Finally, a during in July of August. of is low institutions as third

quarter have was noted, starting with However, $XXX two provide the performance year. three for million. for largest million, a constant year EBITDA it that more Revenue On EBITDA of Adjusted the now provided X% margin let on on represent basis as the we enrollment the a than the comparable same six. we versus one Eilif said, basis ago. intake in financial me our at put increased is QX of third rate our summary led which revenue for strong increase improvements the With adjusted page and in by cycles you being EBITDA ahead was does $XXX XXX of for a guidance margin to has illustrates XX%. grew months an This focus adjusted points QX QX period currency, ago XXXX. and of our and

operating on metrics Let's eight. enrollment more our detail now review in starting with page

Mexico, quarter our but is for intake represents primary third the reminder, in in also a a sizable Chile, the institution intake institution for Brazil, our and Peru. secondary As

during across although ago QX overall their half grew XXXX. our partnership year we enrollments period observed more is compared first months. segments, new online consistent year, for the a the is and X% enrollment is intake when largest the their one in Finally, very of September the to in same with With mind, performance that of and evenly distributed

provide additional by reported let some me color segments. Now,

Brazil, First very perform continues for which and foremost, us. well to

order scale. business possible of very XX% is have been as enrollment September, distance segment in and investment Our result operating this we through which year-on-year the with, as we making by to the pleased bring to quickly learning new grew are

the new grew our program campus-based March. associated consistent intake mixed with offset new our prayer and flat, what government-sponsored for in and enrollment operations reduction were While performance FIES. their of first our was X% completely In like was experienced segment enrollments Mexico, during by we continued with

sector overall. prior during thanks growing, continues our to environment the the and City. expansion Mexico Despite remains dynamics, brand these higher our impact outside discussed call, education economic consumer still the initiatives is eroding difficult confidence geographic challenging of UNITEC to we've As

our Andean segment, UPN Our mostly solid doing period two our In enrollments. performance, world well with delivered in by in Peru: business is the of our of institutions Australia in rest new growth largest extremely another UPC. X% led segment and

offset was did for year-to-date segment, We this Finally, at for domestic partnership been the by new and de-emphasized but which international quarter the throughout online enrollment our X% grow new gradually has were X% quarter. as Walden, enrollments flat year. the expected,

Now, financial basis, move let's while a X%, find our starting our XX. was XX%. quarter for to you third will revenue comparable on up performance, EBITDA the up was adjusted On page which

well would by and benefits the Our by like and fueled President transformation our driven opportunity take acceleration continuing to in overall improvement, performance margin I to Brazil. this results the of our to well our operating action growth. Officer Chief and strong enrollment in on Berckemeyer, in Ricardo as focus all as and aggressively were operating leaders as margin improvement revenue driving the Andean Operating while of congratulate containment model Australia revenue as G&A

flow to move performance. now our Let's cash

shown on that first focus year-over-year, thanks as Overall, million in seasonality flow and was to Please nine I'm to the from statement flow for going our Given the expenses. continuing the impact mostly year-to-date cash page includes note generation reduction months free $XXX up performance of $XXX million operations. discontinued business, interest cash our on the just XX.

in As reiterated point with enrollment cash the strong flow to throughout balancing support we emphasis growth has year, XXXX. the need been generation a our have of

cash importantly, despite above which improvement are $XXX on this have track headwind FX million we amounted last year, $XX year-over-year. the flow to to free still versus year, a million More deliver

our guidance earnings page on move let's to XX. starting Now,

EBITDA adjusted year For on and and performance enrollments, guidance the anticipated QX, our reflects operations. total of the only continuing our full for revenue,

of is with Total to expected Adjusted organic $XX be EBITDA rate million and between compared constant to completion a guidance. FX expected start year to and associated of well approximately as is million $X.XXX based XXXX. represent X.X%. on $XXX year-over-year represents me announced full the million to spot between are FX Please the are note currency divestitures. negative and with expected as of out of following based constant end progressively growth a would which be to growth rate, X% organic $XXX $XX billion. currency million Revenue, on expected to This still that X%. phased G&A our X% billion flat Let $X.XXX net impact is a year-over-year current be to this FX current when of enrollments expenses, spot

are Finally, in billion XXXX. $X.X perspective, Approximately structure capital now the anticipated between our at and associated $X past proceeds this announced is least the still from a divestitures expecting receive proceeds U.S. of and we billion end our divested million net for is $XXX to Malaysia assets mostly of the net and in August. with

For $XXX to fourth follows; million is EBITDA be between spot million. adjusted revenue current to million on expected rate our as quarter, million; the between guidance based is and expected $XXX $XXX is and FX be $XXX

now turn to me in wrap-up. Eilif Let for the back

Eilif Serck-Hanssen

management innovation experiences of a outcomes our the enterprise to benefit can lives, simplified the utilizes we communities power to that the of leverage Laureate focus Thank students, the shareholders. and return and and society. to our you, that is students network best for The believe at team possible in for JJ. and serve, to drive role operating education create scale play We the transform and superior the

take We these prepared our path to our concludes are goals. that any moving remarks are now and participants. Operator, aggressively the accelerate we questions towards from to happy

Operator

from session. question now We'll Instructions] our is from you. the Hamzah [Operator first Thank question-and-answer begin Mazari Macquarie. And

Mario Cortellacci

This Cortellacci is guys. in Hi Mario for filling Hamza.

where our do could see in scale maybe Brazil, did as to it current Chile, as you at And is more as your such and biggest Peru, look see you where that you As risk ability opportunity markets U.S., you can Australia, scale? the margin-wise? your for risk the what scale you Mexico, increase

Eilif Serck-Hanssen

countries benefits Brazil, is throughout have to upside, Eilif. significant This we going is is provide American of we important also operating lever integration believe scale very in to Latin homogeneous the very through margin for A network. has clear scale four the tighter opportunity us that a where that conditions but for

leveraging that and have new through Amazon for believe branded scalable also is innovation we going provide that program the We more differentiation and to the significant benefit such through opportunity as network. scale and development offerings opportunities, IBM common launched also

Jean-Jacques Charhon

From a--

Mario Cortellacci

Go ahead.

Jean-Jacques Charhon

this during is reiteration JJ. I shared provide of guidance just a just to Day. Hamzah, want the Investor Sorry, we

I XXXX, XXX years. per year that XX%, ahead from perspective, now next basis think where we margin that about still of will that reach and in margin the are XXXX. on track three about to slightly We'll between that's year a the will and this points we points I XX provide be think continue improving is for view

Mario Cortellacci

Okay. offset And at then turn increase you're us to what all And quick and ramped our then you just labor terms one maybe that inflation over. your in seeing whether to of I'll Could pricing has a sense across markets? that? ability it of and one give

Jean-Jacques Charhon

This and operate. tends where on is X% Inflation still be we anywhere the markets JJ. to between X% depending

and in dynamics dynamics at Our to the Apart pricing slightly it. net pricing our tend from market each inflation, now Brazil, of really below see or -- a really dynamics competitive are the of function right brands. above we where pricing be are inflation we strength

Mario Cortellacci

inflation or labor speaking is you're inflation just And anything overall? particular in about

Jean-Jacques Charhon

inflation, about salaries. cost Labor is by mean, when there's types I inflation, three that are elements it. we're and really of One labor talking impacted

type the followed second course, so that and expenses, professional are services is follow typically of got also ones facilities to for The we've the as inflation are therefore, least at indexed, of And inflation. piece that and our tend really such index. other

inflation, be our our from at growth. that we're maintain margin natural there's is or view pricing to enrollment to going if above So, able accretion

Mario Cortellacci

so much. Great. Thank you

Operator

from Baird. Meuler is Jeff from next Our RW question

Nick Nikitas

Nikitas good This Nick on Yes, for Jeff. is morning.

company? by timing, enrollment why of the announcement just the talk differential you new and multiple direction strategic or And comparable Walden improvement strength and have the you assets Just turnaround about that the of given versus driven guys year-to-date. on seeing evolving a is now? Can seen the just more just the kind you're that

Eilif Serck-Hanssen

The majority an Walden, been as last learning, growth new turning trends, Walden last we focused have driver very strengthening. aggressively products, has months, couple on and competency-based of example, of I'd quarters innovative real for say, important more the a and strengthening around the XX -- offering

make its potential. team, and performance that number of the under So, to XX incredibly the prodigy pleased sure strengthen I'm over months. leadership, Singer's the Walden the was one work Walden to And reached great Walden has that perception of Paula last the done

to order on taken that and business, that that continued that two and and scale starting markets portfolio, and two year So and on. August operations to Job scale internally we number then a in we centered down focus are attention have are to one. business market took we double not at which but was campus-based ourselves, single simplify not job they businesses, of are regard, announcements the are around us unlock value in largely looking and in great have we year best under strategy in strategic ownership with this we discussions. of May having to we was, steps exit largely back emerging of made our to two online in are are These wanted markets Walden. our engaged asking And served That structure. an was last that

engaged our for any given accretive open-minded Walden, to Walden good beyond as other pursuing for that that Walden with course, retaining we in those strategy of for full and us third-parties. is led that discussions think saying to of going sensitive are and of that and through help couple stakeholders. of consultants not to make for good students, well external we good I'm our that initiated a are as opportunities also the us discussions, to that, we complete nature We have deciding beyond have disclosure and to engaging exploratory comment these discussions,

Nick Nikitas

the think I Australia has still of been as but past, be small, part part the in that divestiture? in is potential Or then mentioned realize this at the moment? online of would that focus, I And company Okay. it's included ongoing

Eilif Serck-Hanssen

Australia it performing it I innovation is sizable lot an to will that takes is an but be continuing or a institution And initiated of note as Laureate. also a part tested well, also has the that like would growth. network JJ online component, and It has in a really strong the Australia. campus-based being around presence is place that, of either noted,

role nice a set has it for the network. So,

Nick Nikitas

at but revenues the little could is looking just they out a and headwinds, lower previously. specific enrollment of geographies, you like it are And called talk in where macro I bit if that's macro than Okay. stabilized were year some else organic the there you that? And the kind anything full guide, looks And throughout year? the besides headwinds you're about seeing know

Jean-Jacques Charhon

Yes, for points. respectively, and total came, couple revenue both the of by a enrollments guidance

to call. the environment It's On really us prior in -- we've side, very the Brazil, for same, cycle. weaker soft but of when institution as well, Mexico improving disproportionately challenging part the stabilizing, to enrollment high as be performance. price economic the of UVM the And Walden the you still we're course, it's that earnings tends for then mostly impacted spots remain communicated competitive go in

areas to. going three the So, point that be those to would I

There's anticipated of impacted enrollment by currency has really our growth rates is other where the an the does and that side, those factor, for revenue weakening impact, another but point countries the FX. we year. On the of the have -- been in operate a obviously,

Eilif Serck-Hanssen

that. And I add just can JJ, if to

that sum constant driven revenue slightly down, slightly will segment XX, Brazil. performance. in the of On is organic Brazil a that currency drag coming is is our down by in performance that the you the reporting enrollment see will You see page total from

graduating. leading The been far in flattish enrollment but and are a us what trends small for It's program is it important I the very in function we very that -- the the was for now couple in The been are slightly very cycling robust there is discontinued. However, the FIES think, indicator down been cohorts discontinued future. that's years, virtually new the XXXX, or is FIES by of fact enrollment that's that Brazil program, that is through XXXX positive total has last are has contributor. and just biggest that

the to again. So the these that up see now, from That graduation then and causing FIES will the trend new the be a year rate, enrollment us probably enrollment enrollment the rate -- down. setting robust is you between new from will largely imbalance behind positive pipeline about trends benefit total and graduation of

So, wanted on underscore I single the item in order pipeline total with biggest question just to of revenue and enrollment to new strong the trends. as enrollment your new performance that balance

Ricardo Berckemeyer

case add replacing this in are Berckemeyer, like is Brazil, are programs I of that And are peers internally FIES that financed we the not in student of our the some -- Ricardo would with any that market. Eilif, financing doing

only focusing are We on payers.

Jean-Jacques Charhon

great a That's point.

Nick Nikitas

Thanks. Yes, it's helpful.

Operator

Jeff is question Silber from from BMO. next Our

Henry Chien

Hey calling good morning. for Chien in Jeff. It's Henry

follow-up to in Mexico. wanted Just trends and Brazil on

better the -- So, -- where new I you it in Any if It's and they're that on know that so? I new in come than but like just want headwinds in pretty expected? strong. Brazil improving, is did mentioned enrollments, that and enrollments did look color you do -- Mexico to reconcile

Jean-Jacques Charhon

Brazil, and program and growth, a to quarter you growing and is the at year-on-year. through exclude had we It's The payers the scaling headwind, FIES take as very at postgraduate the or a on XX% only X% go investing if strong other degrees, almost that that program year-on-year. are undergraduate of a payers, in X.X% in a that is heavily of are you we well. X% looking On of growing performance DL, are Of is And we has with process Yes. which growth. third undergraduate courses and growth system. discontinuation X% But heavily.

Henry Chien

that there guess, any -- did there? come were new in as enrollments -- mean, they was changes if expected? is you Got with it, I And Great. same okay. Mexico; I Or

Jean-Jacques Charhon

Yes.

cities. JJ, is tale of is Henry. a two this So, really Mexico

is they're continuing at portfolio that's given on On enrollments conditions, growing to down And brand an almost extremely -- This franchise said, being challenged the mid-single-digit. the XX%. almost I new aggressively. UVM we're side, price and so market we're positioning and UNITEC, well-performing then grow as the and

So, a that's new perspective, flat. UVM from But and makes course, positive actually very UNITEC and overall enrollment dynamics. -- from similar. fairly because a of they're Mexico

Eilif Serck-Hanssen

I point think higher individual is UNITEC. offering a brand is are familiar the than with for it higher end, brands, that less important those our UVM price

So, cycle that are trading of economic consumers is down. slowdown the a what we are market through seeing the in

So, they're and returns, new But are UVM, see where new around blended trading seeing we of growth a enrollment enrollments down momentum those percent where down very from consumer slight cycle seeing we again declines brands. growth confidence in couple and into turns of UNITEC, trading in we we robust for expect the both the are portfolio. will for the positive as

deliberate So, a strategy. very portfolio

Henry Chien

And one just great. one Okay, from me. last

with debt. know the pay will down you capital be the to I divestitures noted you'll that get that So, used planned

leverage extent how's guess, it update And those sort coming to of terms value I to is of you all that targets assets? update next multiples for when the there there getting the of getting the you'll and the divestitures the you leverage can any with actual you're you're curious, the divestitures, your -- there? or any Thanks. of when Just in share -- guess, in I round for get the

Eilif Serck-Hanssen

majority we that which an our will expectations easy how with much means framed be these of track year. August vast the very middle by our it's are transactions call, closed because Well, we answer on of next during

we strong -- very strong experiencing are assets. very will interest We get we these for are that very confident

go not those to to and statements. beyond be but we're We very robust, accretive going expect valuations

of We will, are much make achieve. track But of disclosures we so what far, hope each course, being these to material on closed. very appropriate with are transactions as we'd

Henry Chien

guys. Thanks Okay.

Operator

Shlomo Our Stifel. from Rosenbaum is from next question

Shlomo Rosenbaum

Hi.

growth to revenue I and three like now. it rate two FX, back first to For to circle a two to four where those I'm are it's question, It prior organic on correctly. to versus want if understanding the my slowing organic just seems half

If just Brazil that? really Was bridge impacting me in enrollments you on much walk that? it can pretty the through

Jean-Jacques Charhon

really is One correct, are then pricing a enrollment little the anticipated constant is a growth bit, and There's than that FX. Yes, Brazil. Those in bit rates you're total absolutely little organic softer impacts. is impact at two there originally Shlomo.

Shlomo Rosenbaum

is Where's from the competition? pricing? pricing Brazil The

Jean-Jacques Charhon

Brazil. in is pricing the Yes,

Shlomo Rosenbaum

the Okay. sale? And right of then for at us to trying look what's the would And what thing? now for rest garner Walden on that annualized a this are it EBITDA

Jean-Jacques Charhon

So, we at stage. basically of It's partnership haven't any below online million the and provided It's for specific part numbers $XXX Walden. segment. this

magnitude that of you order the that's in should mind. keep think I

Eilif Serck-Hanssen

that online is vast could majority the vast, you But Walden. of assume that segment

Shlomo Rosenbaum

And Eilif for sale mean, now? the in the up this? should say way the over a now Walden. be company essentially year thinking then, the pieces ago retaining it. what of that Got I on about -- divestiture based you're last that seeing Is we're divestitures right Is in the we

Eilif Serck-Hanssen

the critical we that of the those I shareholders achieving the value is for to scale goals. And element should you is committed as for think concluded think about create as as it serve. team a well impact management we students and societies that

size same our in investing have size market in the all of At processes we of smaller essentially time, -- are to So, markets all operating model America opportunities. for technology divested to divest particularly and smaller on these experiences Latin in scaling focus of markets. markets initiated a we investments to to through investments common large-scale further in markets four significant resources those innovation our student enhanced get these to sort large drive

on we in focusing doubling win where have and the to -- we are strategy, the summarize can use would the grow, really markets, sheet, it -- to down strengthen a the shrink proceeds dial move focus moving then dial managements initially us, us of the going over and markets these of rate adjacent characteristics as get free improved enable cash shrink to markets as the to are we well the investments enable markets balance medium to of financial for and exit So, the common to as not I flow markets time will or that right on where and on we're But making that the growth as in model improving terms to operating margin the areas. particularly organic improved expansion differentiation those an product cities increase also term markets, conversion. to and in new the in those

we a currently example, Brazil, we not there plenty be to would where For scale. scale are at of cities in Peru. and Similarly, in at are like

We Peru. tuck-in Latin the the also secondly again, could provinces near-term There's online outside be management four of acquisitions America and at core time the to to in in on students But our for Lima. Mexico division. be cities City. our continue that large in well focusing largely focus opportunities us scale There to brand in is value benefits huge team plenty Mexico for markets are `attractive the performance to the in improvement of for drive at right are our create course, for the as, shareholders and as

Shlomo Rosenbaum

If Walden, certain do you capabilities sell outside the that have you lose U.S.? you

Eilif Serck-Hanssen

well within Laureate, really has XX%. of say delivered call i.e. now we in our I compass-based years because of division Today, instrumental centralized environment. or or X% was department. in that -- from campus-based we call been our of and years in digitalization learning percentage ago of that developed And our Five to taking to X% campus-based very launched, online the operations those in what hybrid all have how excess capabilities the delivery courses being in a over ago, percentage, and we Walden been would instrumental yes in team hybrid innovation environment five a

So, learning in has Laureate. delivery, terms the been digital at strengthened inside in innovation development harnessed or product capability of online scale,

the drive of digitalization innovation locations we to our divest we student the think campus-based even Walden. experiences capabilities if at and the the have I all of So, further

Shlomo Rosenbaum

very you Okay. Thank much.

Operator

from question Patnaik next is Manav Barclays. Our from

Ryan Leonard

I you time filling kind Manav. you having Ryan in guess, ever strategic the lot mean a Hi, that, rationale about this I was of to Walden campus some following had mean, offer the any being of up know I IPO -- on programs. for of able I benefit degrees at talked the is marketing to those of drive into increased to campus? there is enrollments your of that the

Eilif Serck-Hanssen

partner strategic be U.S. the Walden own majority some are potentially solution different with of two is students. purchasing between between strategic Walden control in our institutions different institutions. Walden. very stay exciting postgraduate two if The our We dual-degree that there power whether units of have undergraduate of and business replicated units. place in working those key or Those different And is students are in business some can we partnerships network to different programs -- are can The a the another the vast Walden or offerings and also The the students XX% students. adult, campus-based point enrolled are not

are there So, where two analyzing the -- under benefits maintain is those we're options. advisers roof sufficient we -- and but one today, been organizations evaluating in sitting discussing to what I'm not with the very are that are have we some benefits different as we strategic and that certain as past,

Ryan Leonard

I I time. through guess, and on that review And that, mean, rounds come up at gone portfolio two it didn't you've of

some maybe evolved pretty the it understand? changed? guess to sounds give is on Walden? just guess, I time us Or easy So, can the I explained, I thinking guess, you you insight over how into way anything did there

Eilif Serck-Hanssen

around performance innovation for last deliver timing. solid XX core the as in performance, is flow One strengthen and It's cash very marketing been, a very and solid over to great are focus and Walden, in for the and turn has -- question invest in relates trends there months, our profile to I business. stable think it and Walden, the the that reasons free two

and us. one. the So, is well that was number job done Again, now job by team it behind

what so hence, August of XXXX portfolio year. into explore in point to been one much can Walden adjusting the broke this for we that that And opportunities now campus-based given May communicating final piece has it's we do Walden just then are And is, announced the looking at are stabilized. time. with of in we we then we divestitures really two our up in and Second ways,

Ryan Leonard

last And you any Is that just there then share Turkey enough. on us? update me. from can one Fair with

Eilif Serck-Hanssen

with we more until operating formal announce. with continued regulatory pleased very and Yes, perspective. specificity is for Turkey get us institutions There solid from to similar the a in that divestitures. pleased is have one other divest to for into I'm that the but are with also improved looking and to exit more discontinued in as market. of solid strong But performance I'm operations progress, Turkey. something I we interest, again, any pleased to relations don't interest want opportunities are I'm

Ryan Leonard

you. Thank

Operator

question Meuler from Jeff have we And from Baird. a

Jeff Meuler

addressed, of has a Yes, tell just been thank late, couple guess, joined transcript. you. re-listen I I'll if on I questions. so But Walden, this me; had the to

company, is remain business terms business Sorry the tax a U.S. headquartered? separated, sale call So, to anything full or the you for capital Thanks. possibility? considering there implications? is throw then, reason million the strategies all $XXX potential EBITDA if What is in of of then, you on to international at U.S. remaining to out are with sold? at it And any considering on return are spinoff once? domiciled, of would them be And a you only

Eilif Serck-Hanssen

Very clear and good questions.

very as to will we points back initiating opportunities. want paths, I will have speculate to take any are market updates. we on a of course, the don't of holistic view firmer review. all we of of this And But but the come strategic with developed We view, potential

no is Laureate, In -- when out, terms governance. market no longer emerging believe to important the we with investment very to developed of is a our plans future part Laureate headquarter that headquarters. separate market immediate Walden exposure are of were there proposition location of We relocate we if

investor U.S. would point compliance our have stocks as change levels no listing, our So, a that from -- view of this continue change plan to investments and no we so an -- we differentiator want domicile. to perspective, and there's to to as

Jeff Meuler

you. Thank

Operator

the no have we further queue. questions in And

Eilif Serck-Hanssen

updating take extra multiple models. discontinued work thank participating. the on to just I our are operations. parts want for here need to to I their Well, do you, understand analysts moving that with then everyone, There some will opportunity

help ready here are in that. to assist We

team you to you any any Morse today's there questions, that direct finance to he for have. if are so address disposal at entire please on modeling Thank may has Adam JJ and under them the participating his questions So, call. much

Operator

This today's and conference. you now for disconnect. you you, Thank gentlemen. Thank may participating and concludes ladies

Laureate Education (LAUR) 13 Nov 182018 Q3 Earnings call transcript