Kip McGrath Education Centres : AGM Presentation to Shareholders

ersonal use only

Presentation to the

Annual General Meeting

Kip McGrath Education Centres Ltd

16 November 2021

1

Disclaimer

onlyThis presentation has been prepared by Kip McGrath Education Centres Limited (Company). Statements in this presentation are made only as at 16 November 2021 and the information in this presentation remains subject to change without notice. The information in this presentation is of a general nature and does not purport to be complete, is provided solely for information purposes and should not be relied upon by the recipient.

Not financial product advice

This presentation is for informational purposes only and is not a financial product or investment advice r recommendation to acquire any securities in the Company and does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Each recipient of this presentation should make their own assessment of an investment in the Company and should not

user ly on this presentation. In all cases, each recipient should carry out its own investigations and analysis of the Company and verify the accuracy, reliability and completeness of the information contained in this presentation or any other form of communication to which the recipient is permitted access in the course of evaluating the Company. Recipients should seek appropriate legal, financial, tax and other advice.

This presentation is not a prospectus, product disclosure statement or other offering document under A stralian law or any other law (and will not be lodged with the Australian Securities and Investments Commission or any other foreign regulator. This presentation is not, and does not constitute, an invitation or offer of securities for subscription, purchase or sale in any jurisdiction.

ersonalThe distribution of this presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. Any failure to comply with such restrictions may constitute a viol tion of applicable securities laws.

I vestment risk

An investment in Shares is subject to known and unknown risks, some of which are beyond the control f the Company, including possible loss of income and principal invested. The Company does not guarantee any particular rate of return or the performance of the Company nor does it guarantee the repayment or maintenance of capital or any particular tax treatment. Investors should have regard to

the risk factors outlined in this presentation when making their investment decision.

Disclaimer

To the maximum extent permitted by law, the Company disclaims all responsibility and liability for any loss arising from this presentation or reliance on anything contained in or omitted from it or otherwise arising in connection with this presentation and does not make any representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation or that this presentation contains all material information about the Company or the Offer that a prospective investor may require in evaluating a possible investment in the Company.

Past and future performance

Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

This presentation contains certain forward-looking statements with respect to the financial condition, operations and business of the Company and certain plans and objectives of the Company. Forward- looking statements can be identified by the use of forward-looking terminology, including, without limitation, the terms "believes", "estimates", "anticipates", "expects, "predicts", "intends", "plans", "targets", "aims", "outlook", "guidance", "forecasts", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. Such forward looking statements involve known and unknown risks, uncertainties and other factors that because of their nature may cause the actual results or performance of the Company to be materially different from the results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the political and economic environment in which the Company will operate in the future, which may not be reasonable, and are not guarantees or predictions of future performance. No representation is made that any of these statements or forecasts will come to pass or that any forecast result will be achieved, or that there is a reasonable basis for any of these statements or forecasts.

Forward-looking statements speak only as at the date of this presentation and to the full extent permitted by law, the Company disclaims any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this presentation (including, but not limited to, any assumptions or expectations set out in the presentation).

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2021 Financial Year Highlights

Seeing growth in areas coming out of lockdown

onlyFY2021 Revenue of $19.3m, up 12.6% compared to prior FY2020 year

Focus is on transforming from a franchise only face to face tuition business, to a usemulti-channel, blended learning global tutoring business

Online lessons increased by 121% (654,000 in FY2021 vs 295,000 in FY2020). Total overall lessons remained constant for the year despite lockdowns

ersonalAcquisitions in 2H FY2021 included centres in Brisbane, Melbourne, Perth and Gloucester in the UK

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30 June 2021 Profit Commentary

	Stable EBITDA of $5.1M in FY2021
	Profit after tax of $1.7M (up 10%) despite COVID-19 lockdowns
onlyMarketing of $3.5M spent to maintain leading brand awareness (up 25%) to grow
	faster when conditions return to normal for face to face tutoring
	Wages & Salaries of $7.1M as corporate centre head count increases (up 30%).
	Expect core head office wages to be stable while wage growth will come from
useemploying additional tutors
ersonal	4

Invested $2.7M in technology for the year (up 63%) to move to multichannel blended learning model

Final Dividend of 1 cent per share (2 cents for the full year)

Network Revenues

FY2021

Global Online Network Revenues* of A$32.6Mup 129%

Global Network Revenues* of A$85.1M down 1%

only

A$21.3m

United Kingdom / Europe

Network Revenues

A$43.0M

Down 2%

use

Online Lessons

Up 172%

USA - Tutorfly

Acquired Q1 FY2022

Australasia

Africa / Middle East

Network Revenues

A$4.7M

Network Revenues

A$37.4M

Down 31%

Up 6%

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ersonal

A$0.7m

Online Lessons

A$10.5M

Online Lessons

Up 119%

Up 73%

*Network Revenues are total tutoring fees charged by both franchisees and Kip McGrath's owned corporate centres. KMEC Ltd's revenue include the franchise fees and associated fees charged to franchisees for tutoring and the student lesson revenues from company owned Corporate Centres.