draft sti esh - investors' brief 2q2016 updated 2 1 17 (arial) · 2017-02-01 ·...
TRANSCRIPT
STI Education Systems Holdings, Inc.
Full Year Results ending March 31, 2016 and Second Quarter Results ending September 30, 2016
1
Summary of STI Corporate Structure
2
Education for Real Life 3
STI Holdings
STI Holdings Corporate Structure
20%
Maestro Holdings(formerly
STI Investments)
99%99%
Attenborough Holdings
STI Education Services Group(STI ESG)
STI West Negros University(STI WNU)
100%
NeschesterCorporation iACADEMY
100% 100%
Education for Real Life
Maestro Holdings Corporate Structure
STI ESG TancoGroup
Maestro Holdings(formerly STI Investments)
20% 80%
• Acquired from Philippine American Life (PhilamLife), a subsidiary of AIG in October 2009.
• Offers pre-need savings products focusing on areas of education, retirement pensions and memorial services.
• Acquired from PhilamLife in October 2009.
• A Health Maintenance Organization (HMO) that provides effective and quality health services that operates with nationwide accredited clinics and hospitals.
• Provides financial services, such as individual, family, and group life insurance;; investment plans;; and loan privilege programs.
Rosehills Memorial Management, Inc.
• A subsidiary that is 65% owned by PhilPlans
• Operates and manages a memorial park, provides memorial and interment services, and sells memorial products 4
Education for Real Life
010,00020,00030,00040,00050,00060,00070,00080,00090,000100,000110,000
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
STI Owned STI Franchised iACADEMY STI WNU
STI Holdings Network of Schools
5
Who we are
² STI Holdings owns, maintains, and operates the Philippines’ largest, private, for profit network of education institutions with more than 103,000 students enrolled in 64 STI branded colleges and 12 education centers, one non-STI branded college (iACADEMY) and 1 university (STI West Negros University).
² STI ESG offers associate and baccalaureate programs in information and communications technology, tourism & hospitality, liberal arts, healthcare, engineering, education, and business management. STI WNU also offers post graduate courses such as Master’s degrees in Public Administration, Nursing, Education and Doctorate degrees in Public Administration and Educational Management.
² STI ESG also has a 20% interest in Maestro Holdings which provides educational saving plans, among others.
STI Holdings Combined Student enrollment
1 university 1 non-STI branded college
103,727 students in total
iACADEMY
68,01875,929 79,960
84,730
103,727
Investment Highlights
6
Education for Real Life
Summary of investment highlights
Experienced management
K to 12 ready institution
Strong brand
Scalable business model
Nationwide presence
7
Highly attractive industry dynamics
Education for Real Life
6,592 6,939 7,206 7,625 8,013 8,5869,185
9,85010,597
11,43412,343
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
220 228 243 260 276 292 311 329
350 372 396
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
7789 92
101
May-00 Aug-07 May-10 Aug-15
Exposed to highly attractive industry dynamics
2000-15 Philippine population 2012-14 High School Graduate Population
2010-20 Philippine GDP 2010-20 Consumer expenditure on education
The Philippines has the second largest population in South East Asia, with a large portion of young population
Due to the booming economy, demand for education is expected to increase over the next few years
Sources: Philippine Statistics Authority, Department of Education, Euromonitor8
(US$ billions) (US$ millions)
1,083,086 1,111,748 1,169,771
313,409 317,089 317,469
0200,000400,000600,000800,000
1,000,0001,200,0001,400,0001,600,000
2011-12 2012-13 2013-14PUBLIC SECONDARY SCHOOLS PRIVATE SECONDARY SCHOOLS
Education for Real Life 9
Philippine leading tertiary education provider addressing substantial market demand
largest, private for-profit tertiaryeducation provider … … amid supporting macroeconomic factors
Increasing importance of service industry1
• Driven by industries such as BPO, hospitality, tourism and healthcare, all of which depend upon a highly educated workforce
Expanding and young population2
• 53% of population are under age of 24
Rising middle-income demographic3
• Underserved by tertiary education with only 10% of the household population having received college degrees
#1 64 colleges
Sources: The World Factbook, CIA;; Philippine Statistics Authority
12 education centers
1 university 1 non-STI branded college
PLUS
103,727 students in total
Education for Real Life
Institution that is K to 12 Ready
10
Approval granted to offer Senior HighSchool
Newly constructed or renovated facilities in 14 STI ESG campuses and 11 franchised schools;; nationwide facilitiesthat can accommodate 119,191 students
Seventy-six (76) STI ESG schools
iACADEMY
STI WNU
Extensive Senior High School offering
STI ESG
STI WNU
iACADEMY
Academic Track ü Accountancy and Business Managementü Humanities and Social Science strandü Science, Technology, Engineering and Mathematics strand
ü General Academic strandTechnical-Vocational-Livelihood Track
ü Information and Communications Technology strand
ü Home Economics strandü Industrial Arts strand
Academic TrackTechnical-Vocational TrackArts and Design Track
Academic TrackTechnical-Vocational TrackArts and Design TrackSports Track
Education for Real Life
Strong brand offering sustainable competitive advantage
11
More than 30 years of a strong household Brand
Students
• Strong brand preference due to high quality of services
• Value proposition encourages top choice
Employees
• Reputable & stable organization
• Management approach that promotes career growth
Employers
• Standardized education assures employers of consistent quality of manpower
• STI’s nationwide presence
Nationwide brand equity through effective marketing campaigns and word-of-mouth offerssustainable competitive advantage
Education for Real Life
Scalable business model with centralized operations andstandardized learning methodology
12
Nationwide marketing effect
Centralized IT network services increases system
efficiency
Uniform faculty training and student
assessment ensures quality and consistency
Professionally developed courseware across network to achieve economies of scale
Highly scalable and allows for rapid growth
Benefits from economies of scale
Maintains high quality and consistency of programs throughout the STI Network
Nationwide recognition from employers as the school of choice
Fully captures the strong growth expected in the industry
Centralized operation
Education for Real Life
Nationwide presence with wide range of program offerings
13
Wide breadth of programs with tailored course offerings to suit market demand
HealthcareICT Education
EngineeringHospitality Liberal Arts
§ Reaches a larger student base and students not otherwise serviced by other institutions
§ Encompasses a mixed mode of both wholly-owned and franchised schools based on geographic demand
Business
2
13
STI Branded University Colleges ECs TotalOwned 1 32 5 38Franchised 32 7 39Total 1 64 12 77
1
65 Colleges12 Education Centers
Colleges
Education Centers
3
15
Northern Luzon
Southern Luzon
116
Metro Manila
26Visayas
69Mindanao
19
1 University
Universities
Non-STI BrandedOwned 1 1Total 1 65 12 78
STI Education Services Group, Inc.
14
Education for Real Life
31,215 33,726 39,404 42,878 52,687
36,146 36,381 33,212 34,767
43,592
-
20,000
40,000
60,000
80,000
100,000
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
STI Owned Franchised
67,361 70,107
72,616 77,645
96,279
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
STI ESG Enrollment Data
15
STI ESG Enrollment² Network-wide, STI ESG has seen a steady growth in the number of ongoing students enrolled from 67,361 in SY 2012-2013 to 96,279 in SY 2016-17.
² The growth is driven primarily by the expansion of the STI-owned schools as the number of its enrollees grew from 31,215 in SY 2012-2013 to 52,687 in SY 2016-17, increasing its share in the total enrollees network-wide from 46% to 55%.
² In SY 2014-15, STI ESG acquired seven schools from its franchisees with five being absorbed by STI ESG and two integrated into STI WNU.
STI ESG Network-wide Enrollment
STI ESG Owned vs. Franchised Enrollees (as a % of Total)STI ESG Owned vs. Franchised Enrollees
46% 48% 54% 55% 55%
54% 52% 46% 45% 45%
0%
20%
40%
60%
80%
100%
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
STI Owned Franchised
Education for Real Life
1%17%
0%6%
44%
32%
Arts and Sciences Business and ManagementHealthcare and Education EngineeringInformation and Communications Technology Tourism and Hospitality Management
1%16%
0%6%
45%
32%
Total No: 58,708
2016*Total No: 76,068
*As of June 30
2015*
STI ESG Tertiary Enrollment by Program
16
Education for Real Life
STI ESG CHED/TESDA/DepEd Enrollment Mix
17
STI Network-wide Mix
² STI has focused on encouraging new students to enroll in the 4-year CHED/baccalaureate programs as this provides a better avenue for learning for its students.
² In SY 2012-2013, 70.4% of the network-wide students of STI were enrolled in CHED programs. In SY2015-16, this increased to 85.6% network-wide. In SY 2016-17, this decreased to 55.1% while Senior High School comprised 39% of enrollment.
² CHED/baccalaureate programs generate higher revenues per student and because a good proportion of the students usually stays for 4 years, STI achieves a lower cost of acquisition per student.
² In SY 2016-17, the start of the full implementation of the K to 12 program, STI ESG recorded 37,571 students enrolled in Senior High School.
47,443 53,015
59,184 66,445 53,016
19,918 17,092 12,237 9,623
5,692
1,195 1,577 37,571
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
CHED TESDA DepEd
STI West Negros University
18
Education for Real Life
STI WNU Enrollment
19
Total STI WNU Enrollment Tertiary vs Basic Education Mix
² STI West Negros University (STI WNU) is a private university located inBacolod, Negros Occidental.
² STI WNU was founded in 1948 and offers basic and tertiary education,including post graduate studies.
² In October of 2013, STI Holdings acquired 99.5% of WNU and re-brandedthe university as STI West Negros University in 2014. In March, 2015 STIHoldings increased its investment to 99.86%.
² In May 2014, STI WNU acquired 2 STI ESG franchised schools in Bacolodwith a total of about 1,500 students and merged its operations with theUniversity.
5,527 5,000
6,466 6,091 6,073
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
841 920 1,161 1,090 2,084
4,170 3,759 4,575 4,257
3,159
516 321
730 744 830
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
DepEd Tertiary Graduate
Education for Real Life
3%
18%
17%
10%19%
5%
5%
8%
15%3%
11%
16%
9%
20%
10%
4%
6%
21%
Arts and Sciences Business and ManagementHealthcare and Education EngineeringInformation and Communications Technology Tourism and Hospitality ManagementMaritime CriminologyGraduate Studies
*As of June 30
Total: 3,989
2016*Total: 5,001
2015*
STI WNU Tertiary Enrollment by Program
20
Full Year 2015 - 2016 Financial & Operating Results
21
Education for Real Life
Capital Expenditures - March 31Key Balance Sheet Items
* The March 31, 2012 and 2013 comparative information were restated to reflect the adjustments on the application of the RevisedPAS 19 - Employee Benefits
STI Holdings Balance Sheet Overview
22
(PHP millions)
March 31,(PHP millions) 2012* 2013* 2014 2015 2016
Cash 556 1,489 583 803 665
PP&E 1,544 2,635 4,421 5,581 5,610
Investments in and Advances to Associates 1,590 2,897 1,532 1,622 1,425
TOTAL ASSETS 4,589 8,503 8,299 10,036 10,500Total Loans 747 - 288 1,387 1,151
TOTAL LIABILITIES 1,124 368 1,171 2,380 2,270EQUITY 3,465 8,135 7,128 7,656 8,230
255
1,540
1,050
1,227
335
-
200
400
600
800
1,000
1,200
1,400
1,600
2012 2013 2014 2015 2016
Education for Real Life
* The March 31, 2012 and 2013 comparative information were restated to reflect the adjustments on the application of the Revised PAS 19 - Employee Benefits
Key Profit & Loss Data
23
Fiscal Years Ending March 312012* 2013* 2014 2015 2016
(PHP millions)Revenues 1,577 1,670 1,918 2,224 2,577
Direct Costs 522 535 607 715 798
Gross Profit 1,055 1,135 1,311 1,509 1,779
Operating Expenses 688 745 838 992 1,076
Operating Profit 367 390 473 517 703
Net Other Income (Expenses) (76) 404 182 214 370
Net Income 291 794 655 731 1,073
EBITDA 523 550 690 848 1,127
Education for Real Life
1,577 1,670 1,918
2,224 2,577
-
500
1,000
1,500
2,000
2,500
3,000
2012* 2013* 2014 2015 2016
Strong Growth in Revenues
24
Revenues
(PHP millions)
STI continues to achieve strong revenue growth, with a CAGR of 13.1% from 2012-2016, mainly attributable to the following drivers:
² Increases in the number of enrollees in the STI network-wide schools, specifically from STI owned schools
² A shift in students’ preference from the 2-year vocational programs to the 4-year baccalaureate courses where the average tuition fee per semester is higher
² A modest increase in tuition fees
Breakdown of Core Revenues for SY 2015 - 2016
(as a percentage of total)
Growth Drivers
5.9%14.9%
16.0%
15.9%
Tuition & Other School
Fees88%
Educational Services7%
Royalty Fees1%
Educational Material and Supplies3%
Other Services1%
Education for Real Life
Strong Core Profit and Margin Profile
25
EBITDA(PHP millions)
Gross profit(PHP millions)
Operating profit(PHP millions)
² STI has increased its gross profit from PHP1,055 million in FY 2011-12 to PHP1,779 million in FY 2015-16 or a CAGR of 14%
² Operating profit has increased from PHP367 million in FY 2011-12 to PHP703 million in FY 2015-16 or a CAGR of 17.6%
² EBITDA has increased from PHP523 million in FY 2011-12 to PHP1,127 million in FY 2015-16 or a CAGR of 21.1%
² The increases in gross profit, operating profit and EBITDA margins are primarily attributable to the economies of scale that STI enjoys as revenues increase.
1,055 1,135 1,311 1,509 1,779
66.9%68.0% 68.4% 67.8% 69.0%
50.0%52.0%54.0%56.0%58.0%60.0%62.0%64.0%66.0%68.0%70.0%
-200 400 600 800
1,000 1,200 1,400 1,600 1,800 2,000
2012* 2013* 2014 2015 2016
Gross Profit Gross Profit Margin
523 550690
8481,127
33.2% 32.9%36.0%
38.1%43.7%
0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%
0
200
400
600
800
1,000
1,200
2012* 2013* 2014 2015 2016
EBITDA EBITDA Margin
367 390473 517
703
23.3% 23.3%24.7%
23.2%
27.3%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0
100
200
300
400
500
600
700
800
2012* 2013* 2014 2015 2016
Operating Profit Operating Profit Margin
Education for Real Life
² When STI Investments acquired PhilPlans in 2009, they recognized an accounting gain for the excess of the fair value of PhilPlans’ net assets over the acquisition cost.
² As PhilPlans began to dispose of those assets in 2010 and 2011, STI Investments began to reverse a portion of the realized gain on sale of AFS investments of PhilPlans as the cost basis for these AFS investments at STI Investments’ consolidated level was higher when these were acquired by STI Investments.
² The reversal was higher in 2010 than in 2011 as most of the assets were disposed in 2010;; as of March 31, 2012 these AFS investments with different carrying values have been completely sold by PhilPlans.
² The appreciation in the market value of the investment portfolio of Maestro Holdings was realized in 2013 when it became apparent that a downtrend in the market values of bonds were imminent.
² The sale of bonds continued in 2014 thus the further realization of the market values.
² In 2015, the prices of bonds became stable.
PHP millions
Equity in Net Earnings/(Losses) of Associates
26
(38)
428
233
105
35
(100)
-
100
200
300
400
500
2012 2013 2014 2015 2016
Education for Real Life
Maestro Holdings Book ValueMaestro Holdings Revenue(For the years ending December 31)
PHP millions
PHP millions
Maestro Holdings – Financial Highlights
27
² The increase in the prices of bonds and equities comprising the investment portfolio was realized in 2013 as evidenced by the increase in revenues from the Trust Funds.
² With the realization of the income through the sale of these bonds and equities, and the subsequent drop in the prices of bonds, the book value of Maestro Holdings remained flat for the years ending 2013 and 2014.
² The revenues from premiums continued to climb with the increase in the amounts of plans sold by the subsidiaries of Maestro Holdings.
* As restated in the Audited Consolidated Financial Statements (December 31, 2014 and 2013)
7,616 7,661
6,588
6,000
6,200
6,400
6,600
6,800
7,000
7,200
7,400
7,600
7,800
2013* 2014 2015
5,601
3,294 3,207
1,504
1,625 1,807
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2013* 2014 2015
Trust Funds Premiums
2nd Quarter 2016-2017 Financial & Operating Results
28
Education for Real Life
PHP millions (Except gross profit, operating and EBITDA margins)
2Q2015-2016
2Q2016-2017 Y-O-Y Change (%)
Unaudited
RevenuesTuition & Other School Fees 943.5 1,081.3 15 Educational Services 88.6 82.3 (7) Royalty Fees 8.0 7.5 (6) Others 15.4 15.3 (1) Sale of educational materials & supplies 58.3 99.3 70
Total Revenues 1,113.8 1,285.7 15
Gross Profit 742.20 859.4 16Gross Profit Margin 67% 67%
Operating Profit 213.6 340.1 59
Operating Margin 19% 26%
EBITDA 413.1 575.7 39
EBITDA Margin 37% 45%
Net Income 338.7 542.9 60
2Q 2016 Financial Highlights
29
Education for Real Life
1,114 1,286413 5762Q 2015-16 2Q 2016-17
Total Revenues EBITDA
826 943 1,081
8997
9060
74115
2Q 2014-15 2Q 2015-16 2Q 2016-17
Tuition and Other School Fees Educational Services & Royalties Educational Materials & Others
667 742 8592Q 2014-15 2Q 2015-16 2Q 2016-17
Revenues, Gross Profit & EBITDA
30
STI achieves strong revenue, gross profit and EBITDA growth.² Combined revenues increased by 15% year-on-year for the first sixmonths of FY2016-17 as compared to the same period last year.
² EBITDA increased by 39% year-on-year from PHP413 million in thefirst six months of FY2015-16 to PHP576 million in the same period inFY2016-17.
² Gross profit increased by 16% from PHP742 million in the first sixmonths of FY2015-16 to PHP859 million in the first six months ofFY2016-17.
² Net income increased from PHP339 million in the first six months ofFY2015-16 to PHP543 million in the first six months of FY2016-17 or60% year-on-year.
SIX MONTHS’ REVENUES
SIX MONTHS’ GROSS PROFIT
2Q REVENUES & EBITDA
PHP millions
PHP millions
PHP millions
Education for Real Life
213.6 340.1
19%
26%
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
0%
5%
10%
15%
20%
25%
30%
2Q 2015-16 2Q 2016-17Operating Profit Operating Profit Margin
413.1 575.7
37%
45%
0.0
100.0
200.0
300.0
400.0
500.0
600.0
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2Q 2015-16 2Q 2016-17EBITDA EBITDA Margin
742.2 859.4
67% 67%
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
2Q 2015-16 2Q 2016-170%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Gross Profit Gross Profit Margin
Strong Core Profit and Margin Profile
31
² Gross Margin remained at 67% during the first six months ofFY2016-17 as with the first six months of FY 2015-16.
² Operating Margin increased from 19% during the first six monthsof FY2015-16 to 26% during the same period in FY2016-17.
² EBITDA Margin, on the other hand, increased from 37% during thefirst six months of FY2015-16 to 45% during the same period inFY2016-17. EBITDA margin improved in FY2016-17 as comparedto the same period in FY2015-16 due to the recognition ofdepreciation and amortization expenses on completed capitalexpansion projects and the increase in revenues from tuition andother school fees and sales of educationalmaterials.
PHP Millions
PHP Millions
PHP Millions
Education for Real Life
31,215 33,726 39,404 42,878 52,687
36,146 36,381 33,212 34,767
43,592
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
STI Owned STI Franchised
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
STI Network iACADEMY STI WNU
Student Enrollment
32
² Total enrollment at the STI Holdings network of schools as of the first quarter ofSY 2016-17was at103,727, a combinedgrowth rateof 22% year-on-year.
² Enrollees at STI-owned schools increased by 23% year-on-year from 42,878students in the first quarter of SY 2015-16 to 52,687 in the first quarter of SY2016-17 driven by the enrollment of Grade 11 students in the first year of the fullimplementation of theK to 12program this year.
² STI WNU integrated in May 2014 the two schools it acquired froman STI ESGfranchisee.
STI HOLDINGS NETWORK
STI ESG NETWORK
68,01875,929 79,960 84,730
103,727
67,361 70,107 72,616 77,645
96,279
Enrollment School Year
SY2012-13 SY2013-14 SY2014-15 SY2015-16 SY2016-17 STI BrandedSTI Owned 31,215 33,726 39,404 42,878 52,687 STI Franchised 36,146 36,381 33,212 34,767 43,592 STI Network 67,361 70,107 72,616 77,645 96,279
STI WNU - 5,000 6,466 6,091 6,073 Total STI Branded 67,361 75,107 79,082 83,736 102,352
Non-STI BrandediACADEMY 657 822 878 994 1,375 Non-STI Branded 657 822 878 994 1,375
STI Holdings Network 68,018 75,929 79,960 84,730 103,727 Growth 11.6% 5.3% 6.0% 22.4%
Education for Real Life
46% 48% 54% 55% 55%
54% 52% 46% 45% 45%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
STI Owned STI Franchised
792 855 931 1,008 1,267
-
200
400
600
800
1,000
1,200
1,400
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17
70% 76% 82% 86%
55%
30% 24% 16% 12%
6%
2% 2%
39%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
SY 2012-13 SY 2013-14 SY 2014-15 SY 2015-16 SY 2016-17CHED TESDA DepEd
STI ESG Network Enrollment Profile
33
STI ESG NETWORK ENROLLMENT MIX STI ESG NETWORK CHED/TESDA/DepEd ENROLLMENT MIX
STI ESG NETWORK AVE. NO. OF STUDENTS PER CAMPUS
Education for Real Life
7,616 7,6616,588
5,464
8,214
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2013* 2014 2015 Apr - Sep 2015 Apr - Sep 2016
5,601
3,294 3,207
1,076 1,916
1,504
1,625 1,807
939
1,046
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2013* 2014 2015 Apr - Sep 2015 Apr - Sep 2016
Trust Funds Premiums
Maestro Holdings Book ValueMaestro Holdings Revenue(For the years ending December 31)
PHP millions
PHPmillions
Maestro Holdings – Financial Highlights
34
* As restated in the Audited Consolidated Financial Statements (December 31, 2014 and 2013)
² The increase in the prices of bonds and equities comprising the investment portfolio was realized in 2013 as evidenced by the increase in revenues from the Trust Funds.
² With the realization of the income through the sale of these bonds and equities, and the subsequent drop in the prices of bonds, the book value of Maestro Holdings remained flat for the years ending 2013 and 2014. The prices of bonds were stable during the first half of 2015, however, market prices of equity securities declined significantly in 2015.
² The revenues from premiums continued to climb with the increase in the amounts of plans sold by the subsidiaries of Maestro Holdings.