LAUR - Earnings call transcript Q4 2018 | Laureate Education, Inc.

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Operator

Hello, and welcome to the Fourth Quarter 2018 Laureate Education, Inc. Earnings Conference Call. My name is Brandon, and I'll be your operator for today. [Operator Instructions] Please note, this conference is being recorded. And I will now turn it over to Adam Morse. begin. may you Adam,

Adam Morse

Hello, call thank Fourth to Results Strategic Year-End operator. us Quarter for on XXXX Priorities. on Update today's discuss and everyone, you, you and joining and Thank Laureate Education's

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

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

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

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

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

press counterparts our free are also call flow, in cash detailed the to With measures non-GAAP and me Eilif. to including we that their reconciled EBITDA Additionally, over that, turn GAAP adjusted discuss, and let release.

Eilif Serck-Hanssen

efficiency an in year, target. XX% of important initiatives million expansion, free cash along free very changer XXXX. continue a would which and we the million, the for we up we our In we from at a margin results. margin and a margins. represents results, core call. significantly to everyone organization. delivering fourth we increase significant of report pleased I flow have last and have quarter XX what year very said In deliver us education We to continued increased cash and we to or for generation levels This was where up Laureate. meeting and impressive for year key today's Thank strong of basis with earnings to guided joining adjusted margin And some ramp simplification commitments by free also and decrease XXXX, our capital on EBITDA area EBITDA our our to you, Most outcomes ahead The the strong thank portfolio flow with cash delivered a including year's priority had line is students flow, deliverable to markets, have top all we for competitive very throughout Day. the for versus another guidance. this and $XXX made a our allowed adjusted well portfolio Adam, strong stakeholders. simplification against in upon you, fourth comparable priorities, XXXX progress The quarter favorable we importantly, done basis. closed profile. on strong $XXX We out on prior the improve am do. for have we we our of game our can high-quality structure positions. Investor us exceeding taken, challenge significantly XXXX, of XXXX, terms performance bold where driven magnitude debt which pace points ourselves, we this built expansion, confident deliver commitment the with set an is corporate both are strategies to while have for maintaining and actions Margin our capital scale team. to been to improvements, of management a This very strong These have strategic

We have flow we free our are that deliver flow cash very made XXXX and on we free margin. plans to confident unlevered improve least will cash XX% performance, further goal initiatives and of at

made simplification We strategy. our great on in portfolio progress executing have

for of a million, EBITDA the of In recent Portugal we've of approximately in the in we that University, or Spain for XX closing trailing value also million December, Augustine $XXX agreement sale Moreover, times an announced of we sale multiple the a St. recently addition to and on that our institutions representing transaction on signed €XXX transaction. of had in Thailand. institution closed our

these shareholders. deal X.X value sales, We to net are significant completion accretive forma would the for expect pro turns. this our in driving close combined, approximately EBITDA of asset XXXX our debt months Upon creation transactions be and of over couple next announced

expect We year continue out about XXXX, expect to come and close through trend of to down to at turn leverage this we profile leverage. X the

a We in short area have made tremendous this improvements time. relatively in period of

Our it's a decade. balance strong sheet over is as been as in

performance year. to we pending Investor and pillars, the value we story start first the priorities, at half allocation of will beginning during on our achieved extremely become all strategic you in the to shared sales as of strategies creation XXXX have capital Across asset we Day XXXX, made our As well. our that around continue last capital execute progress is we with and forward. directly linked financial X The structure strong important exploring we our of part during announced going can complete increasingly

Let number highlights our improvement capital us the me in a sales touch just allowed accelerate through as asset for few structure have the debt. X. noted billion approximately The of to Page on on the $X year reduced of

effort management is during I'd X key rigorous, results, weaknesses statements at our objectives XXXX. and as to public. in weaknesses and EBITDA financial perspective, in our successfully the improvement our model management material The and of deployment in yielding XX significant one of deliver disclosed driving material company. team the went strong all Sarbanes-Oxley management a to by team to his we certification This process and tremendous evidenced the was time point development of was engagement our a entire for For basis the remediate the company-wide thank common our operating for the margins. the remediation full leadership JJ for risk focus of like clean

rollout Brazil a to our are Throughout XXXX, Our very will rationalize deploy and processes was and Chile. consolidate further systems already and and model underway we and G&A similar centralize Peru, of further in successful, efficiency Mexico to many and for scale. steps

at flows, in During free can future investments XXXX, we while strong important demonstrated same making generate time, that Laureate growth. our cash the

we Specifically, large and investments operating technology make scalable restructuring enterprise. to in during model more Laureate a XXXX, made

network in verticals, City UNITEC center by impressive as his de and of team such curriculum extraordinary operating and new very co-branded our across have growing of brand, which leaders campus the initiatives Mexico under city key for the programs outside many also new he in university each X as Ricardo institutions, including as excellent scores the the as well in most company. only are group to accolades an program new and well four-star-rated well our rated important for UVM and such as schools assembled Enade Brazil. Ricardo quality highlighted continued all in Peru the Throughout key our investments in UPC of medical being the has of Brazil, student academic as recognized by having QS in in Peru, XXXX, network, Health recognize Sciences. I've quality tireless being markets. We made want in many driven a industry-leading performing as as innovation expansion Berckemeyer and outcome I Valle, pursuit his Mexico of for Stars;

affordable students as to our entire team best executive prices. the delivering of well experience committed at are educational Our our mission as possible

strong performance provides Hemisphere Our tremendous a XXXX trends This momentum season. early the Southern includes heading into during XXXX. encouraging for enrollment

our stakeholders. of turn value our Investors to leading year pillars should will continue for shareholders during now universities XXXX. for to focus financial playbook X JJ of us value detailed to to create simplifying, network quarter, will deploy management and overview fourth all the over XXXX expect outlook full for to our call beyond. XXXX a for drive for more our Finally, and the I continue focusing our to strategic on and integrating

JJ Charhon

you, Eilif. Thank

in with noted, On $XXX respectively million, ahead comparable me for was for at Eilif QX Adjusted a currency, Let EBITDA quarter, million. a and Page our $XXX on grew start financial fourth X% expectations. was X. basis performance as revenue adjusted our X%. which was constant the summary the EBITDA of Revenue and of starting quarter and

year, now while X%. more grew total in detail starting the will increased enrollments, Overall, by Let's XX. you which review our with enrollment Page find operating for X% enrollment new metrics, we on

Here are very perform well which And with us. segments. Brazil, some highlights continues let's for to start by

order to scale. result as Our full making expectations year, this grew new investment operating and strategic we the in been possible by year-over-year XX% Distance to Learning was closely above well which have as a enrollments of the business is segment bring for

to new completely offset all for continued programs, associated of the quarters. earlier growing brand geographic prior outside confidence education initiatives in consistent was we've were with operations payer The by Mexico Mexico, in grew enrollment government-sponsored UNITEC continues seen Despite thanks conditions, our missed This Eilif In challenging remarks. what performance expansion our the sector these like enrollment still continues eroding with reduction new Although as campus-based by Fies. consumer is be higher referenced to and of City, impact is to flat, X%. overall. market his our segment

and led enrollments. by UPN. institution extremely in in our our with rest world delivered our growth of X% mainly segment mostly Our well, segment, In Australia Andean business Peru, UPC solid the large is doing in performance, new

move Page representing enrollment partnerships let's the basis new were year our U.S. than which performance, XX. at reflect X% the our Finally, with constant domestic to Full & XXXX, of and our in in the on Partnerships, for which $XXX through These more contraction students currency. guidance, Online and comparable were was million UK financial of XXXX of starting of deemphasis gradual versus enrollments X%, will ahead and outside on adjusted a Now our EBITDA at results find results growth brand Walden our a international offset the expected by grew you

as our Andean strong margin our Our action cost-containment improvements segments driven at across operating benefits overall were well fueled results all and by and performance as of revenue the of by in corporate. Australia

by margin strong margin basis, keeps XX% which on us basis point comparable XXXX. medium-term of an on meeting at our in All increase of well a for track these least contribute results to guidance XX

to move now our flow ahead expectation and XX. Page of illustrated well is was which on performance, Let's cash

versus the from improvement continuing communicated As reached year-over-year, and of operation contributors interest guidance $XXX which free generation Cash Overall, flow of from was at a million statement expense our that This associated we million headwind $XXX note this $X.XX flow flow dramatic operations. were discontinued cash ahead year cash to for the the almost please our impact reminder, flow FX. X significantly cash and include a despite $XX improvement reductions XXXX. XXXX. main represents beginning billion of the with million,

Finally, collection been please cash timing performance was severance of total of favorable to improvement. for early million and an the for summary, and and was note, has flow margin Australia This in sets flow up that performance deferral our XXXX XXXX. year both to $XX payments In very outstanding XXXX. related cash company the of a well

guidance, Let's our XXXX on XX. move to Page starting now

and approximately For is and be currency X%. be X%. which expected $X,XXX X% spot is represent EBITDA assets our basis. on an to growth of represents rate, the our full growth million that This $X,XXX Asia, and rate, of constant a adjusted current of comparable EBITDA, full organic expected year, reduction include $XXX on Adjusted FX divestment still spot the current approximately rate to in a based G&A does the million based total America. Please X% be represents X% Revenue, to growth enrollments a this million. million benefit expected EMEA on between are to $XXX of Central following to and between XXX,XXX, note FX would not

to these of $XXX million on XX% cash basis, and as be EBITDA a savings XXXX rate less increase cash is year based spot $XXX CapEx, operating would full all on current or for factor million approximately around versus be in you Free flow XXXX. expected defined for FX a flow, If adjusted XXXX.

based rate, Finally, to FX on $XXX spot a with XXXX perspective, expect million current of end debt. structure approximately net capital from we

Now let's move to quarter. the first

spot million. FX follows: current Our expected is be $XXX on guidance between $XXX and as Revenue is to million rate based

earnings quarter to to year's This for seasonality million $XX We our expect be and loss of much of fact institutions session EBITDA first most of is a reflects XXXX with our the approximately $XX that consistent prior of million. the are of the out quarter. and first revenue for adjusted

be historical our as we continuing will that supplemental today, better comparable develop a this X-K following continue later that to to current be with investors Lastly, demand, filing our they basis. of We an results, on revised of information note presentation a quarterly popular the historical will helpful please operations. performance understanding hope for

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

Eilif Serck-Hanssen

Thank great management Heading progress terrific Laureate. for you, The a profile XXXX on on tangible making strategic results. by and was our momentum We our are encouraged our very of priorities. am to continue simplification related of all portfolio risk business. year and into commitment JJ. yield our of delivered XXXX, stakeholders I the to strengthening our

the We Laureate growth profile to through improvements portfolio see further for reductions, as in strengthen continue as financial organic efficiency simplifications, to significant opportunities G&A our well operating further business.

new product scale enhancing as will well revenue Specifically, from as and improved performance we leverage model retention initiatives. common our operating our for

initiatives, as well meet or line-of-sight financial during January me goals, confidence high XXXX XXXX articulated exceed as visibility productivity in our margin Investor record our initiatives further track as Our expansion into ability efficiency capital to Day. gives and our of

Finally, strong operational and expect beyond. I'd XXXX review during XXXX blueprint investors to and during like execution what value optimization to Laureate's for as the creation drive

students, for maximizing participants. questions remarks well are stakeholders, now happy our as serve. we Operator, and the as the value that concludes take communities to including staff all prepared are faculty, We to our committed we from and shareholders

Operator

We'll Silber. And begin go Instructions] now have Thank question-and-answer you, sir. we Capital session. Markets, ahead. from the [Operator BMO Please Jeff

Jeff Silber

from, markets. with us I could strong brief president political Brazil, what's so interested wondering some and major of Thank your on on in specifically much. of in I'm just new a congratulations you going I'm give perspective if Thank guess, And overview year-end. you regulatory there. a the you.

Ricardo Berckemeyer

he encouraging market support when administration all needs we right under know, Yeah, are is right And you President seeing good stock reforms that the We're are confident were a implemented. the in there's very and enrollment, has and pricing before administration. he assumed. as he they new The Brazil the than bring to his morning. There's have to Right about consumer from expectations -- be optimistic and that indications reception. Bolsonaro. market market now, overall Brazil the the mandate with to higher

Jeff Silber

out in call to the else markets? of Anything any major other

Eilif Serck-Hanssen

to want have do a of on Mexico? we Well, Ricardo, you couple commentaries, --

Ricardo Berckemeyer

well, us as some power believe this point that He's AMLO well. He Well, for in been in Yes. has opportunities. Nothing now that worries a I see positive quarter. full trying at improve starting time. rights higher is education through has to expanding active in of and and access Mexicans for Mexico, Education the the education. Secretary increase Education to been to Higher in access of higher -- General including to we

Before, and XX constitution, to higher education. as a to expanding and a K right access had every that education, positive. net see that Mexican he's through by We

and the in of President can doing power we constitutes bring support actions. the President I XX% the ally Peru and issues. stable. of shortage we ally think through creativity don't think and sector brands, be the Mexico, is that funding that a, and And to private And is start, good can that what a innovation, with any market, great the his the We Piñera expanding consolidated. country great all resources. Vizcarra of be a is for access very in is is stable. with our given same see a Chile, off our I the Mexico, of

Jeff Silber

great. right, All

$XXX for cash reported for less JJ. question XXXX numbers you free quick XXXX. a flow million, Just The for of guidance in than

of year relative free You quantify, basis? differences. operations is and so in flow the we what possible, you was cash on from can if see discontinued $XX flow cash organic that million out called a out timing Can kind strip what in included last also

JJ Charhon

a continues have difficult it's of breakout little assets to and on operation the the when the do capital the discontinued structure X. between you and because depending Yes, debt you just basically bit between that allocate

believe less divesting. I the that stands as we'll we cash we've be you we provided, think assume have more divest assets, guidance indicative the we the that will moving the So should of offset this interest free be don't our guidance operations or flow divested, flow the would savings we this cash by that and In forward. would generated that as

Jeff Silber

Okay, What here? one. more interest are just great. for one expecting expenses And quick you

JJ Charhon

about they interest bit a on and throughout the little it's the year. million timing divestitures, for now, $XXX Right depends happen of those Again, expenses XXXX. of when

So that's really the view.

around of I think a million. relevant looking business be the is is to what is more really at as forma by the from which the model end pro perspective debt expect we $XXX net year,

Jeff Silber

Okay, great.

Sorry, capital one for budgeting? more. And XXXX, what spending you are

JJ Charhon

of X% About revenue.

Operator

we have Macquarie Mazari. Capital, From Hamzah

John Mazzoni

in Mazzoni John Hamzah. is filling This for

about us portfolio? significantly about core pruning portfolio assets? versus remind you're how of how thinking And Could additional thinking You you current you're your pruned recently. the noncore maybe

Eilif Serck-Hanssen

that. This I'm is Eilif. happy to do

our us has successful and believe markets have in that advantages Our markets. be strategy consolidating scale strong those differentiation rights we have we around and efforts we portfolio centered competitive where in where gives to that

we really the primarily X our where Latin So that Walden. in means doubled States, scale which markets, America and large in United that the down markets we have have are

would those of forward. X So for be markets that total XX-plus-percent key portfolio will going principal account our the

John Mazzoni

Great. sense that you? much Could you thinking give be how about And going us how increases opportunity a forward? for an tuition could on you're

Eilif Serck-Hanssen

market we inflation price really plus. by to market. It's expect at time, Over

strategy pricing in while contributions. most are using weak gives optimizing by us protect are are economic then times, brands, very premium cautious. importantly power. and definition, positioned pricing on brands which more And to stronger our In revenue we markets us, However, tool have our in for the economic market, in umbrella we focusing times, most more with a where we and portfolio we effective value individual

John Mazzoni

in strategy your through on us walk please you cost Could rightsizing structure question. last Brazil? One your

Eilif Serck-Hanssen

do so. to Happy

Brazil an model. was, of investments activities Brazil initiative and some common in change-management a as individual were announced, years of low. well couple times A time, recognized, We clearly as integrate operations in of running We stand-alone as was XXXX, we to some as for There Accelerator were a investments margins portfolio that. lead We unacceptably Plan, universities. with processes. that some dependent on the we're developed part in have our There Brazil. and really technology some operating associated ago,

been, we we general, difficult unraveling with in Brazil we The in just endeavor. margins perspective, We headwinds what the cost a extremely successful that the have so in set been from has despite deploying lifted to pricing gaining environment from significant momentum economic of and Fies challenging that and very the been But taking model it are of do network. actually, have much that delivered the rest on positions. and to out the

So upside in rest operating same that network. deploy because that to we model the believe Latin there across of are America

JJ Charhon

Just in one margin clarification on evolution the Brazil.

You will was all to down. due FX. the actually coming margin report that really see And that

you basis, we If on improve in margin local a currency at did look Brazil.

Operator

From have we Baird, Meuler. Jeff

Nick Nikitas

got Jeff. You for Nikitas on Nick

a Just just light still EBITDA see. from looking with in QX than guide, to Or but there this Is revenues little quarter, we timing expecting, of were though. a at there? P&L it's variability anything weaker kind call you realize estimates line really the with perspective was that I of out a our kind the

JJ Charhon

income No, the would the quarter. have we I operations, really also with, consistent the which first levels fact sold had portfolio we historical we're into for in under Augustine, take St. reporting is consideration that the of to obviously the that continuing University seasonality timing and say, and

really providing are balance obviously, of is is the continuing of operation. operation. rest here income we for discontinuing only the the guidance the in So But

Eilif Serck-Hanssen

and large more Yes. from of EMEA in amplifying Spain, bit Portugal, of in Southern seasonality are Hemisphere-focused of operations. quarter. is being The the first the portion divestitures becoming a as little seasonality a we other season changing out some of

JJ Charhon

about point for was million. of comparison, loss XXXX, the a $XX continuing operations as in Just

Nick Nikitas

portfolio Okay. behind be helpful. changes might that. And the That's the reason

the that QX the enrollment the Or there looking out call flowing early in growth just new enrollment to in read kind of year is are bridging in seeing? new So versus trends some guidance, full you're of bigger just then any X% that kind kind like total economies, certain through enrollment still is with macro of that at X% on anything just Mexico? the given there? persisting quarter, headwinds a XXXX, of And

Ricardo Berckemeyer

Mexico, Yes, as we ability, today those But the going line effect see Brazil, strength seeing same Brazil from should growth of economies pricing the and but the enrollment into future. -- that in not revert the the and as should we become strengthen especially full that pricing in revenue into year we which progresses, total in are revenue. what growth enrollment in the is channeled we're and encouraged and recover in softer itself growth the in environment, our with

JJ Charhon

That higher business. of additional the that mind, obviously our want to attrition of you in keep X% element the Well, the portfolio growth by was new tends enrollment one Learning Brazil. our Distance our impacted have in to of face-to-face heavily than of a segment average

following So your that's translate an it enrollment increase into doesn't immediately total why of year. the always growth

Nick Nikitas

And Okay, there? just of enrollment new seeing that's kind strength any the you then Are continued QX helpful. trends? early read on

Eilif Serck-Hanssen

little I it still bit mentioned very a in encouraged, is remarks are my early. opening we that but

are we're performance will the We you to And cycle. update our earnings X, segment the walk robust by way weeks. of that a on X during at And enrollment quarter through in give time. we first two-thirds release segment enrollment very going through

Nick Nikitas

for me. then and one last just one Okay,

going decision to U.S. how strategic decision talk just announced played view previously I forward? that keep And the recent, guess, you kind out? competitive -- and On in-house, of to process strategic Walden's more how the advantages throughout you could about the Walden landscape

Eilif Serck-Hanssen

The and were of we high-quality We Laureate as recognize execution imagine, in operation. and very, you drive was our very to year that friction last Factors, and for for this as business. value-creation not go Laureate was board evaluation, but and below the value case be of us, and criteria to the synergies -- include the synergies potential I'm medium review and as announced -- working tax institution. beyond committed management value costs would the opportunities of in retain to long-term conversions to underlying loss to clear. including that enterprise and risk, this, actions on all retaining of a other potential Walden, can market strategic specific the We also Sure. network. value evaluate for the key well on And and let concluded shareholders. opportunities review and consolidation considered is the options value intrinsic create very of is any to that plays and that our me objective all available we unlock all conducting assets. of to Walden, sale this strategic shareholders. We portfolio But going other taking speculation And in focused for about further is institutions into this to value engage and address steps any Walden the the deficiency. any value

Nick Nikitas

the Thanks enough. Okay. fair Yeah, for taking question.

Eilif Serck-Hanssen

you. Thank

Operator

And From Morgan, Please Santos. Marcelo we ahead. go have JP

Marcelo Santos

the question about question. Hi, I which maybe mean, inflation to or in -- FX-neutral the the Thanks good terms first taking future My growth below X%, in is equal morning. LatAm. for XXXX you're pointing the is is growth growth. for X%

-- the you're where in years? do a levers that and want if your can to pricing the growth? are you're what with just coming types of units, down growth So accelerate into think you by if you first idea courses, to new EMEAA? like Could get? question. break get And forward going XXXX could get you to you if there? That's not, happy And broad How the

second little about bit margin the a The is question improvement.

margin, from other X where you questions. is you sources? you do the well? And coming get to do see you main operation These they as regions XX% Or Brazil. broadly mostly opportunities speaking, So your achieve How see when So in look this operation, the will where are? to the them? are by

Eilif Serck-Hanssen

in the margin start then I'll good. the over moment. I'll big to question JJ hand with and Very first, a

to are our the revenue. And the of strength at scalable margin the the improve innovation put and to markets. we as good very We -- focused well management as tools. we on we growing most know we on That We do we have that. resources. allocation actions with the strong, growth, accretive the as cash where very new company, trade-offs into and that are programs the have done free is of capital are bottom more perspective company. making of means capabilities company the a terms line to of new we on believe improve And opposed expanding very are we focusing and Laureate flow know for launching trade-offs and making better continue In that line top will all of we to

We to expand brand will continue UNITEC the Mexico. in

We in continue for do to will Brazil scale. expansions organic

for the students. are new We behind and investing partnerships Learning, I co-branded on better handing on to bandwidth education to margins core business better better and as Distance drive hybrid to XXXX, we to cash business, committed our and footprint make to before products better, any follow-up companies resources did with and investment such as curriculum large-reached in innovations, outcomes our And drive the our those do was JJ think business better us of our capital allocate over growth we of But make in gives of if see track for pricing that advantage we are that levers. I'll flow disproportionately have we going to a take to very -- model that there drives all margins. strong record yield And free XXXX, there and conversions. power. and pause to will

JJ Charhon

the be transition margin, a year. is little bit On of a XXXX going to

you would we XXXX, we complete We did the but in we expenses as XX reduce trailing margin increasing may when basis indicate the divestitures about to points, announced remember our of a by XX divestitures, there that are second that be wave. would of G&A that planning of we

XX% to we're some adjust more incurring XX% IT already associated us EBITDA be that with really in to you transformation XXXX. for is that XXXX If expenses will we And that, that in like at our onetime XXXX growth have EBITDA of in XX%. would put not margin. rates There's our going

operation run-rate about we basis the kind XXXX, reach we as by XX.X%, which at leverage XXXX, the low of going of basis, leave would end of points guidance a we is on about be XX operating get to at revenue. exiting really So enrollments and that which are out grow to our XX%

for months. that's I the plan So next, say XX would the

obviously accelerate and ways to dual operating gaining are continue of progress. looking pace But leverage margins. compress time, to We continue the on get G&A same that to at we at focus higher

Operator

Stanley, Morgan have From we Moscardini. Caio

Caio Moscardini

we're So you focus competition here or can Brazil? helpful. protect elaborate how a would bit be on to is little So to the very And more volumes? the on prices in please that seeing strategy this more

Ricardo Berckemeyer

is we It's and a for institutions critical market where well, commanding very a Brazil Yes, market brands. us. have

in encouraged are We are and Brazil. with a primary we enrollment seeing our season. intake It's

we're that with seeing in our later establishing a came scalable also on we extremely than the We and the that We, enthused polo from encouraged footprint gaining we new are believe with And competition, more our DL of platform. in to our making seeing game progress we I what are although what good persistence segment. acquisition in most and that pricing. enrollment, general are in are growth are we very we

our brands and still our quality a Our versus right. premium competitors proven, command is

financial As you quality by are we a the the have mentioning. presence banks of well. And regulatory the on our followed some we is through sector, also some reports, driving other as improvements commanding in that have good attributes and outcomes covering the issues different in that

very our implemented nicely. being before, mentioned model Eilif As operating is

of We the, to region. geographies model, in a the year that the execution next lot are in this the and the that and we in other will there's in months of ahead on XX apply learnings next,

free flow cash margin going generation to and to Our continue focus improvement. be is

Caio Moscardini

question. UniNorte right. is the one may more of If institution? development How I the All have

Eilif Serck-Hanssen

are at basis. on We committed year as we comment beyond to not footprints. well country assets on and that would I'm regional are through of statement I And beyond regular look we that, during our portfolio That made I'm, we And going evaluating it portfolio. means or at We What take to going all not of footprint portfolio may a as to as our any regular what steps the the beginning the, may earlier. Investor our last Day. reviews. the the relates always

Operator

have we Peter Piper From Jaffray, Appert.

Peter Appert

you more could that domestic color got in maybe are a I'm now mentioned perhaps like? the opportunities a on into what you're margins Walden, is I your And this. if high you my peers. of with growth it, the could some trajectory just apologies, look to you've on are terms the fairly business? little late so get that think Eilif, relative wondering understanding But there that of keeping What bit

level I'm ability or in even improve interested the there. potentially terms your in maintain margins so to of comfort And

Eilif Serck-Hanssen

absolute, institution an XX% is is approximately that not expect to segment. Walden innovation a quality. that best-in-class it reflection wonderful change. Do comes in a being its to margin And of institution of when the performance and

market pretty is growth conditions. We from for have innovations. a period challenging time of consistently likely XX% around new Walden's some despite come long to been

programs We are marketing. the excited see about BXB very We micro-credentials in have opportunities our that we some and of launched and competency-based module. learning in

more also for But competition as opportunities doctoral and OPM. of strong traditional the market universities programs the we us. master's enter are those So that see with increased in into

innovation. growth So and very the overall very, view single-digit culture of margins, Walden and low quality track stable record is of continued a rates strong academic

the best network, labs, institution mining, very important performance to and Laureate capabilities reality outcomes institutions rates. Laureate data within deploy of to to student of big better great virtual intends that drive just Walden value. value-creation from the favorably mention network a as overall for examples retention are marketing, opportunities digital that across impact it when within further within Walden as to Walden the In And is these market few terms the LatAm comes well the increases practices cutting-edge and

Peter Appert

there? And do on And issues create then a Eilif, Turkey, issues that significant anything legal the in market? Great, to thank you. those terms exiting barrier new just regulatory

Eilif Serck-Hanssen

development situation in update There legal Turkey. is no the last regulatory or our on since new

beyond that in in committed that We process. we process, to to along are the inside to other except I'm divestiture midflight that, not comment divestitures. finalize also with our say And going are

Operator

And Rosenbaum. finally, from Shlomo Stifel, we have

Shlomo Rosenbaum

in And terms Eilif, in when the really consideration the Walden of really so do to you with shine color the expect point international the that's all be fact the performance that sell finished time? at picture students been can the is in does that deemphasizing then at Walden domestic to this of through? that, happening,

Eilif Serck-Hanssen

are enrollment trends as back Walden I so we online we before the online deemphasis on domestic consistent process internationally into are is to move partnership is another midflight. The months our segment core on the for The on would XX strategy where and Walden's around enrollment focus core that us. scenario expect and segment a emphasis total a or expansion the with performance. domestic

Shlomo Rosenbaum

that the that any sell to consideration did And have impact on unit?

Eilif Serck-Hanssen

noise out -- numbers. of a story and easy No, pro is out, It job to domestic forma more -- try equate to forma reported relatively to just maybe slight on positive really better will at a it is do when it's so of that clean for better It is small. on should give to the expectations enrollment. pro and bottom growth to the the we the you all line

JJ see additional a give back that. can and around I and if So any guidance step there's we will take

Shlomo Rosenbaum

And the when see today? going going out forma are expect to soon? very pretty get pro modeling? great. end the we with of to like numbers Or Is out at to do help that that to Okay, be

JJ Charhon

business little publishing This some at model is bit today information will and close 'XX moving JJ. both with business We're 'XX. going for some help the you of be that a to historical forward information supplemental

Operator

And from Patnaik. Manav have Barclays, we

Ryan Leonard

Ryan is Leonard. This

years Just a part a How in that terms help that growth question bigger frame Brazil. next if you perspective? we over think distance and the on story. could the does of innings are I -- so? the taking become just about where in longer-term How of competition or The mix to a X wonder education of

Ricardo Berckemeyer

Sure.

comfortable up the were a bit in of the a steps as wasn't competition releasing was in product of the to came mentioned catch experience achieving. bit we that that because earlier, to bold Brazil We taken the little felt game that little the quality, we in customer rest competitors, we I because have later the

forward, that going right I use, right are We product have now. to going we the believe

encouraged of and the scaling the of results. programs, We now I base business rapidly. a number and have on developed that more much to pipeline with right we am the have focus very scope

portfolio of We terms geographic coverage. programs of have and a in terms great in expanded

legislation that being granted. We licenses discussed of new licenses. preempted the on polo will now XXXX have the limiting We be that is has been number -- that

period. bottom original achieve very polos feel to that we that this some year, And on them business. also scale recruiting are a are to in business that going So in scale are now with are licenses I rapidly because I all make good necessary we line. we year. be enrollment believe have acquiring XXXX, us XXX we investments are And the this the focus meaningful active filling the and XXXX Of this those leveraged will to did that that for comfortable licenses, nicely the expecting progress forward going to will position this us

Eilif Serck-Hanssen

other So the student can most The end and is than in just terms quality, are Ryan, deemphasis with, both you familiar Laureate that utilizing. that. add of I we are if brands higher experience to that the thing for brands of

now Secondly, we point a we the at breakeven level. are at where are

made over in leads, polos. have last investment couple We years acquiring XXX-plus the our pipelines, selling opening of

we we Now haven't filling where other as to we to at the have expanding growth licenses the that accretive see that point we we polos and XXX-plus are the point can opened. recovery are polo

Brazil a business. be can lever exciting this very for So growth our

Operator

joining. Ladies And for at have this we further no concludes today's this conference. and Thank you gentlemen, time. questions

now may disconnect. You

Laureate Education (LAUR) 1 Mar 192018 Q4 Earnings call transcript