Bright Scholar Education Holdings Ltd (BEDU) 2024 Q1 法說會逐字稿

Good morning, and thank you for standing by for Bright Scholar's first fiscal quarter of fiscal 2024 earnings conference call. (Operator Instructions) Today's conference is being recorded. I would now like to turn the meeting over to your host for today's conference, Ms. Ruby Yim, Investor Relations Counsel. Please go ahead.

早安，感謝您出席博實樂 2024 財年第一財季財報電話會議。（操作員指示）今天的會議正在錄音。現在我想將會議交給今天會議的東道主投資者關係律師 Ruby Yim 女士。請繼續。

Thank you, operator. Good morning and good evening, everyone. I would like to welcome you to Bright Scholar's, first fiscal quarter 2024 and November 30, 2023, Earnings Call. With me today on the call are Mr. Robert Niu, our Chief Executive Officer; and Ms. Cindy Zhang, our Chief Financial Officer.

謝謝你，接線生。大家早安，晚上好。歡迎您參加博實樂 2024 年第一財季和 2023 年 11 月 30 日的財報電話會議。今天與我一起參加電話會議的是我們的執行長牛羅伯特先生；以及我們的財務長張辛迪女士。

The agenda today is what it will start the call with an update on progress of our strategic initiatives to be followed by our business performance in first fiscal quarter, and strategic priorities in fiscal year 2024. Before today to walk you through our key financial performance, will then open the call for questions.

今天的議程是電話會議的開始內容，首先介紹我們策略舉措的最新進展，然後介紹我們第一財季的業務表現以及 2024 財年的戰略重點。在今天之前，我們將向您介紹我們的主要財務業績，然後將開始提問。

As a reminder, today's conference call is being broadcast live via.com. In addition, a replay will be available on our website following the call. By now, you should have received a copy of our press release that was distributed on February 5, 2024, after market closes Eastern Time. If you have not, it is available on the IR section of our website.

提醒一下，今天的電話會議正在透過.com 進行現場直播。此外，電話會議結束後，我們的網站上將提供重播。到目前為止，您應該已經收到了我們於 2024 年 2 月 5 日東部時間收盤後發布的新聞稿副本。如果您還沒有，可以在我們網站的 IR 部分找到。

Before we get started, let me remind you that today's call may contain forward-looking statements within the meaning of section 21E on the Securities Exchange Act of 1934. As amended and as defined in the US Private Securities Litigation Reform Act of 1995.

在我們開始之前，讓我提醒您，今天的電話會議可能包含 1934 年《證券交易法》第 21E 條含義內的前瞻性陳述。經 1995 年美國私人證券訴訟改革法案修訂和定義。

These forward-looking statements include, without limitation, the company's business plans and development, which can be identified by terminologies such as may, will, expect, anticipate, aim, estimate in term, plan, believe, potential, continue, is all are likely to or other similar expressions.

這些前瞻性陳述包括但不限於公司的業務計劃和發展，可以透過「可能」、「將」、「期望」、「預計」、「目標」、「估計」、「計劃」、「相信」、“潛力」、「繼續」等術語來識別。可能或其他類似的表達方式。

Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements.

此類聲明是基於管理層當前的預期以及當前的市場和營運狀況，並涉及涉及已知或未知風險、不確定性和其他因素的事件，所有這些都難以預測，並且其中許多因素超出了公司的控制範圍，這可能會導致公司的實際業績、業績或成就與前瞻性陳述中的內容有重大差異。

Further information regarding this and other risks, uncertainties and factors is included in the company's filings with the US Securities and Exchange Commission. The company does not undertake any obligations to update any forward-looking statements as a result of new information, to events or otherwise, except required under law.

有關此風險以及其他風險、不確定性和因素的更多資​​訊包含在該公司向美國證券交易委員會提交的文件中。除法律要求外，本公司不承擔因新資訊、事件或其他原因而更新任何前瞻性陳述的義務。

During this call, we will be referring to GAAP and non-GAAP financial measures. We use certain non-GAAP measures as supplemental measures to review and assess our operating performance. This non-GAAP financial measures have limitations as analytical tools and investors should not consider them in isolation or as a substitute for net income attributable to company or other consolidated statements of comprehensive income data prepared in accordance with US GAAP. Please note all numbers in our management remarks.

在本次電話會議中，我們將提及 GAAP 和非 GAAP 財務指標。我們使用某些非公認會計原則衡量標準作為補充衡量標準來審查和評估我們的經營績效。這種非公認會計準則財務指標作為分析工具存在局限性，投資者不應孤立地考慮它們，也不應將其視為歸屬於公司的淨利潤或根據美國公認會計準則編制的其他綜合收益合併報表的替代品。請注意我們管理備註中的所有數字。

I now and be and all comparisons refer to year-over-year comparison. Unless otherwise stated, you can download a copy of our earnings presentation on our IR web page, with that note, I'll turn the call over to our CEO. Robert, please go ahead.

我現在和將來的所有比較都是指同比比較。除非另有說明，您可以在我們的投資者關係網頁上下載我們的收益簡報的副本，並註明，我會將電話轉給我們的執行長。羅伯特，請繼續。

Thank you, Ruby, and I want to welcome you and thank you for joining our conference call today. I'm delighted to have the chance to speak with you in this setting. In our call, I will begin with an overview of the strategic initiatives we've implemented as an ongoing effort to turn the business around.

謝謝你，魯比，我歡迎你並感謝你今天參加我們的電話會議。我很高興有機會在這樣的環境下與您交談。在我們的電話會議中，我將首先概述我們為扭轉業務而實施的策略性舉措。

I like the progress and accomplishments we've made over the past year share my risk protections on the company before briefly touched on our fiscal 1Q performance. Finally, I wanted to outline what we can expect one, our management and global teams regarding our strategic priorities for the rest of the year and beyond.

我喜歡我們在過去一年中取得的進步和成就，並在簡要介紹我們第一季財務業績之前分享我對公司的風險保護。最後，我想概述我們對今年剩餘時間及以後的策略重點的管理和全球團隊的期望。

Our aspiration has always been to continuously build a global premier service companies that offers world-class education on slide 6, displays our portfolio of companies in less than 12-months since joining the company in my previous role as CFO, I have had the opportunity to travel to spend time with management teams in the UK and China offices.

我們的願望始終是不斷打造一家全球一流的服務公司，在幻燈片6 上提供世界一流的教育，自我加入公司擔任首席財務官以來不到12 個月的時間裡展示了我們的公司投資組合，我有機會出差與英國和中國辦事處的管理團隊共度時光。

This experience has allowed me to obtain a holistic understanding of our processes, which have been profoundly impacted by the pandemic. Immediately, are we recognize the immense opportunity, which has have been for the business recovery and companies that we can unlock significant better outcomes. If we find, the way we operate following overall review, with identified GAAP for improvements and opportunities for the business recovery.

這段經歷讓我對我們的流程有了全面的了解，這些流程受到了這場流行病的深刻影響。我們立即意識到，這對業務復甦和公司來說是巨大的機遇，我們可以實現更好的成果。如果我們發現我們的營運方式經過全面審查，並確定了 GAAP 的改進和業務復甦的機會。

-- Following a thorough review, we've identified GAAP for improvement and opportunities to capitalize on power size, our strategy, our imperatives, and initiate efforts to re-engineer our cost base. Again, the goal of our post-COVID turnaround strategy is to reset our business around economies. Studies designed to deliver sustainable, high returns, growth in revenue, EBITDA and cash flow, advancing operational efficiency and the coveted waging, a competitive cost structure.

——經過徹底的審查，我們確定了 GAAP 的改進和利用實力規模、我們的策略、我們的要求的機會，並開始努力重新設計我們的成本基礎。同樣，我們的後疫情週轉策略的目標是圍繞經濟重新調整我們的業務。研究旨在實現可持續、高回報、收入、EBITDA 和現金流的成長，提高營運效率和令人垂涎的工資以及具有競爭力的成本結構。

Are you essential pillars for executing our strategic growth plan in the years ahead.

您是我們未來幾年執行策略成長計畫的重要支柱嗎？

Let me share with you the progress in slide 7 on the areas and actions that have already been set in motion, and we are committed to sustaining these efforts throughout the ongoing year. Number one, our first that involves restructuring and streamlining our operations, at our China headquarters.

讓我在投影片 7 中與大家分享有關已啟動的領域和行動的進展，我們致力於在整個一年中維持這些努力。第一，我們的第一個涉及重組和精簡我們的業務，在我們的中國總部。

So this efforts we have successfully made our operations linear and more efficient. These included the removal of middle layers. The facilitate direct and the practice communications between senior management and consistency. -- And this is leaders, the outcome has been remarkably encouraging.

因此，我們的努力成功地使我們的營運變得線性且更有效率。其中包括去除中間層。促進高階管理層之間的直接和實踐溝通並保持一致性。 ——這就是領導者，結果非常令人鼓舞。

Currently, our headquarters have. This decreased substantially by half for our overseas operations headquartered in the UK under the brand of class Global School, we have commenced various initiatives. Firstly, we have reinforced internal controls, establishing it as a key performance indicator for our management team and business leaders. As a result, we have successfully addressed and resolved the two material weaknesses identified in our (inaudible) of financial year 2023.

目前，我們的總部有。對於我們總部位於英國的全球學校品牌下的海外業務來說，這一數字大幅下降了一半，我們已經開始了各種舉措。首先，我們加強了內部控制，將其作為我們管理團隊和業務領導者的關鍵績效指標。因此，我們成功解決了 2023 財年（聽不清楚）中發現的兩個重大缺陷。

Secondly, we initiated to conduct a comprehensive assessment of our organizational operational and cost structure seeking potential avenues for improvement.

其次，我們開始對組織營運和成本結構進行全面評估，尋找潛在的改善途徑。

Thirdly, we continue to leverage organic growth opportunities through increase in utilization that's readily achievable gains. Number three, simultaneously, we took initial steps to improve our financial agility by strengthening our balance. We sheets paid off all the outstanding bank, bank loans by July 2023. We have also initiated plans to decrease our liabilities and strengthen our balance sheet, supplementing our continuous effort to boost returns through cost reduction measures and operational efficiency enhancements.

第三，我們繼續透過提高利用率來利用有機成長機會，這是很容易實現的收益。第三，同時，我們採取了初步措施，透過加強平衡來提高財務靈活性。我們在 2023 年 7 月之前還清了所有未償還的銀行貸款。我們還啟動了減少負債和強化資產負債表的計劃，補充我們透過降低成本措施和提高營運效率來提高回報的持續努力。

The focus on executing our turnaround strategy in fiscal 2023 enabled us to conclude the financial of the fiscal year strong. This revenue greatly exceeded the top end guidance and bottom line proved this operation of -- which operating loss and income loss, the mix and the reduced. This in turn leads us to our first fiscal quarter 2024 performance.

專注於執行 2023 財年的轉虧為盈策略，使我們能夠以強勁的業績結束本財年的財務狀況。這筆收入大大超過了最高指導和底線，證明了這項營運——營運損失和收入損失的混合和減少。這反過來又為我們帶來了 2024 年第一個財季的業績。

slide number 8, which is a typical fiscal year 2024 with a solid start as we continue to make great strides in revitalizing our business and revamping our global operations. In the first fiscal quarter, we achieved a 7.6% increase in revenue, coupled with sustained growth in improvement of 13.1% in gross profits, 14.8% in operating income and 40.9% in net income compared to the same quarter in the previous fiscal year.

第 8 號投影片是典型的 2024 財年，我們在重振業務和改善全球營運方面繼續取得重大進展，開局良好。第一財季，我們營收成長7.6%，毛利持續成長，與上一財年同季相比，營業收入成長14.8%，淨利成長40.9%。

The recovery of our overseas school segment remained the strongest, marked by a 28.4% increase in top line revenue during the first fiscal quarter. This segment continues to offer significant opportunities for scaling growth and the bottom line enhancement through increased operating leverage.

我們的海外學校部門的復甦仍然最為強勁，第一財季營收成長了 28.4%。該部門繼續透過增加營運槓桿為擴大成長和提高利潤提供重要機會。

Meanwhile, the complementary education services segment sustained steady revenue growth, predominantly driven by the recovery of overseas study counselling business, which achieved a 12.8% revenue increase in the first fiscal quarter. Conversely, the domestic kindergartens and K-12 operating services segment, continued is construction recording a 26.4% decrease in revenue, aligning with our internal expectations.

同時，補充教育服務板塊營收維持穩定成長，主要受留學諮詢業務復甦帶動，第一財季營收成長12.8%。相反，國內幼兒園和 K-12 營運服務業務繼續建設，收入下降 26.4%，符合我們的內部預期。

As we progress into the remainder of the remainder of fiscal 2024, the advancement and initiative achieved during fiscal 2023 and the first fiscal quarter of 2024. I've established a strong foundation for executing our multiyear strategic plan with the goal of saving a portfolio of business geared towards sustainable revenue growth, enhanced EBITDA and solid cash flow, so heightened operational efficiency.

隨著我們進入 2024 財年剩餘時間，2023 財年和 2024 年第一財季的進展和舉措。我為執行我們的多年策略計畫奠定了堅實的基礎，目標是保留業務組合，實現可持續的收入成長、提高 EBITDA 和穩定的現金流，從而提高營運效率。

The following slides offer an overview of our goals and priorities for our respective business segments.

以下幻燈片概述了我們各自業務部門的目標和優先事項。

Slide number 9 shows you the business and operational structure of our overseas school segment with headquarters in UK, our primary focus in financial year 2024 is to maximize both internal and external value creation by optimizing restructuring and operating leverage with ultimate objective of building scale and high returns business in the longer term, strategic change we plan to implement in fiscal 2024 are expected to result in significant bottom line improvement in the years to come.

第9 張投影片向您展示了我們總部位於英國的海外學校部門的業務和營運結構，我們2024 財年的主要重點是透過優化重組和營運槓桿來最大化內部和外部價值創造，最終目標是建立規模和高水準從長遠來看，我們計劃在 2024 財年實施的策略變革預計將在未來幾年帶來顯著的利潤改善。

As for the complementary education services and domestic kindergarten and K-12 operation services segment. As shown in slide 10, our focus in financial year 2024 will be firmly on portfolio and cost optimization for further improve returns through divestments of non-core education business.

至於補充教育服務和國內幼兒園及K-12運營服務板塊。如投影片 10 所示，我們 2024 財年的重點將堅定地放在投資組合和成本優化上，透過剝離非核心教育業務進一步提高回報。

In brief were intensified the restructuring of our portfolio and global operations to restore profitability and strengthening the balance sheet beyond recovery, we'll also pursue growth opportunity with our go global strategy recap, in slide 11 for your reference to conclude, our focus remains on the same high growth, high return business while bolstering our financial standing through margin expansion, strengthening our balance sheet and enhancing cash flow.

簡而言之，我們加強了投資組合和全球業務的重組，以恢復盈利能力並加強復甦後的資產負債表，我們還將透過我們的全球化策略回顧來尋求成長機會，投影片11 供您參考，結論是，我們的重點仍然是同樣的高成長、高回報業務，同時透過利潤擴張、強化資產負債表和增強現金流來增強我們的財務狀況。

Our overarching goal is to establish a position of strength for one ample room for pursue scalable business retention, sustainable mobility well into fiscal year 2025 and beyond. We firmly believe this marks a pivotal step in driving forward looking for value creation for our stakeholders in the long term, I'm fully aware that we are asking a great deal for our employees to work through the necessary changes and deeply appreciate their support and ongoing commitment to deliver on our company's purpose.

我們的首要目標是建立一個強大的地位，為 2025 財年及以後追求可擴展的業務保留和可持續的流動性提供充足的空間。我們堅信，這標誌著推動我們的利害關係人長期創造價值的關鍵一步，我充分意識到，我們要求我們的員工進行必要的變革，並深深感謝他們的支持和支持持續致力於實現我們公司的宗旨。

I extend my heart full gratitude to our talented global teams for their passion and steadfast dedication, which continues to drive our solid business and financial performance.

我衷心感謝我們才華橫溢的全球團隊的熱情和堅定的奉獻精神，這將繼續推動我們穩健的業務和財務表現。

With this notes.

有了這個筆記。

Now I'll turn the call over to Cindy.

現在我將把電話轉給辛蒂。

Thank you, Robert. Thank you Ruby. Let's turn back to our financials. Please be reminded that all numbers are in RMB and all comparisons refer to year-over-year comparisons unless otherwise stated. Please also refer to our earnings press release for detailed information for our comparative financial performance on a year-over-year basis.

謝謝你，羅伯特。謝謝你，魯比。讓我們回到我們的財務狀況。請注意，除非另有說明，所有數字均以人民幣為單位，所有比較均指同比比較。另請參閱我們的收益新聞稿，以了解我們同比財務業績的詳細資訊。

Please turn to slide 13. We ended the physical the first fiscal quarter with revenue up 7.6% to RMB572.7 million. Overseas schools remained to be the best performing segment with revenue up 28.4% to RMB252.9 million. This is due to the recovery of overseas business operating from that dynamic for our complementary education services segment, the growth has been steady. Revenue was up 12.8% to RMB210 million, which was primarily due to gradual recovery of our overseas study counseling business.

請翻到投影片 13。我們第一財季的實體收入成長 7.6% 至 5.727 億元。海外學校仍然是表現最好的板塊，營收成長 28.4% 至 2.529 億元。這是由於我們的補充教育服務業務海外業務的復甦，成長一直穩定。營收成長12.8%至人民幣2.1億元，主要由於留學輔導業務逐漸復甦。

However, our domestic kindergarten and K-12 operations service has continued to experience a downward trend, with revenue down 28 26.4% to RMB109.9 million visits in line with our internal projection, and we anticipate this change to persist throughout the fiscal year.

然而，我們的國內幼兒園和 K-12 營運服務持續呈現下降趨勢，營收下降 28 26.4% 至人民幣 1.099 億元人次，與我們的內部預測一致，我們預計這種變化將持續整個財年。

On slide 14, cost of revenues for the fiscal quarter improved to 64.5% of total revenue compared to 66.2% of total revenue for the same physical quarter last year. The improvements are attributed to our ongoing initiatives to enhance our cost structure. These enhancements of our cost structure, along with the solid recovery momentum in our business, especially within the overseas segment, led to an upturn in gross profit and an improvement in gross margin.

在投影片 14 中，本財季的營收成本佔總營收的 64.5%，而去年同期為總營收的 66.2%。這些改進歸功於我們持續採取的改善成本結構的措施。我們成本結構的改善，加上業務特別是海外業務的強勁復甦勢頭，導致毛利回升和毛利率改善。

Our gross profit for the physical quarter was up 13.1% to RMB203.4 million and the gross margin improved to 35.5% from 33.8% as shown in slide 15, please moving to the slide 16 to have a look at the improvement in our SG&A expenses of ongoing efforts to optimize costs and operations at our headquarters to once again proving regarding resulting in decrease in SG&A as a percentage of total revenue to 24.1% from 26.3%.

我們的實體季度毛利成長 13.1%，達到人民幣 2.034 億元，毛利率從 33.8% 提高到 35.5%，如幻燈片 15 所示，請轉到幻燈片 16，看看我們的 SG&A 費用的改善情況我們總部持續努力優化成本和運營，再次證明SG&A 佔總收入的比例從26.3% 下降至24.1%。

Slide 17 shows our adjusted EBITDA was up 0.8% to RMB90.8 million. Adjusted net income was up 37.3% to RMB61.9 million and net income was up 40.9% to RMB59.2 million. This improvement in our bottom line is our -- the improvement in our bottom line is our top priority.

投影片 17 顯示我們調整後的 EBITDA 成長 0.8% 至 9,080 萬元。調整後淨利成長 37.3% 至 6,190 萬元，淨利成長 40.9% 至 5,920 萬元。我們的底線的改善是我們的——改善我們的底線是我們的首要任務。

As we move forward, our focus remains on prudent cost management and strategic portfolio restructuring to optimize returns and strengthen our balance sheet and cash flow, which are essential for our future expansion in the years to come.

在我們前進的過程中，我們的重點仍然是審慎的成本管理和策略性投資組合重組，以優化回報並加強我們的資產負債表和現金流，這對於我們未來幾年的擴張至關重要。

Lastly, please refer to slide 19 for our management team. Slide 20 for the condensed income statement, slide 21 for the reconciliations for net income and EBITDA on a GAAP to non-GAAP results and slide 22 for condensed balance sheet and cash flow statements.

最後，請參閱投影片 19 以了解我們的管理團隊。投影片 20 為簡明損益表，投影片 21 為 GAAP 與非 GAAP 業績的淨利及 EBITDA 調整表，投影片 22 為簡明資產負債表及現金流量表。

This concludes my financial update and our prepared remarks, and I would like to open the call for questions.

我的財務更新和我們準備好的演講到此結束，我想開始提問。

Operator? Thank you.

操作員？謝謝。

(Operator Instructions)

（操作員說明）

This concludes our question and answer session. Now I will turn to Robert for his closing remarks.

我們的問答環節到此結束。現在請羅伯特致閉幕詞。

Okay. Thank you, operator. I'm excited about our opportunities and our future. I look forward to leading Bright Scholar to new heights and sharing our progress with all of you along our journey. Thank you very much for joining this conference call. Please feel free to contact us if we have any further questions. We wish everyone a good day.

好的。謝謝你，接線生。我對我們的機會和未來感到興奮。我期待帶領博實樂走向新的高度，並與大家分享我們一路走來的進步。非常感謝您參加本次電話會議。如果我們還有任何疑問，請隨時與我們聯繫。我們祝福大家都有美好的一天。

Thank you.

謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。