x

1. x Prepared By The Parthenon Group For UK Education in Dubai: What Works, London, 2013 Private Education in Dubai: Opportunities for Continued Growth

2. Parthenon’s Education Practice On-the-Ground Education Sector Projects Completed by Parthenon

3. Agenda Regional Drivers K-12 Higher Ed Early Years

4. GCC Countries Seek to Increase the Economic Contribution from Non Oil Sectors Proportion of Non Oil GDP (Current Prices) 100% 86% 74% 79% 2012 80 69% 2017E 68% 65% 60% 57% 60 55% 49% 52% 43% 40 20 0 Bahrain Kuwait Oman Qatar • SaudiArabia United Arab Emirates GDP 2012 Estimated • $28B • $202B • $79B • $196B • $652B • $386B

5. Significant Investment is Required in Education Infrastructure in GCC Countries Ratio v/s PPP Adjusted GNI Per Capita, 2007 Finland Greece United States New Zealand Denmark 100% Ukraine Lithuania Norway Australia of Korea Republic Iceland Sweden Belarus Latvia Hungary Italy Estonia Belgium Uruguay Poland Israel Netherlands Romania Ireland Portugal France Republic Czech Lebanon Chile Austria 80% Slovakia Switzerland Bulgaria Croatia Jordan Cyprus Turkey Armenia Brazil UAE Colombia Mexico Tunisia Bahrain Algeria China Oman 60% Saudi Arabia Tajikistan Kuwait El Salvador • Guatemala Vietnam India Azerbaijan • Uzbekistan Nepal Tertiary Enrollment Ratio Morocco R2 = 70% Indonesia • Cape Verde Laos Myanmar Bhutan Pakistan 40% Bangladesh Burundi Ghana Hong Kong (China), SAR Ethiopia • Burkina Faso Tanzania Madagascar 20% Darussalam Brunei 0% $0 $20,000 $40,000 $60,000 PPP Adjusted GNI per Capita

6. What are the Drivers of Private Education in GCC Countries? Young Population Increasing Affordability Need for International Education Growing Expat Community • 55% of the population in UAE, KSA, Kuwait, Oman and Qatar is below 30 years old • GDP per capita for UAE, KSA , Kuwait, Oman and Qatar have grown by 5-10% between in last 5 years • Premium International and Mixed Curriculum market in UAE is 5X of that in India and similar to China • Higher Education Enrolment in Western Private Colleges has grown the fastest in last 3 years in UAE • Private international schools in Riyadh, Jeddah and Sharqiah have grown faster than the market • Expats account of ~30% of the population in GCC countries and ~80% in the UAE • The number of expatriates living in GCCcountries have increased by nearly 20 per cent over their number in 2005 Specifically, Dubai offers a real opportunity for private education operators

7. UAE has the largest market opportunity in K-12 and Higher Education

8. Agenda Regional Drivers K-12 Higher Ed Early Years

9. What do K-12 operators look for? Market Opportunity Market Stability Clear, Transparent Regulations

10. Non-oil sectors in Dubai have been growing at 3% since 2008 Dubai Market Growth by Sector, 2008-16F

11. Both Emirati and non-Emirati enrolments are growing in K-12 in Dubai K-12 Dubai Private School Enrolments, 2008- 2012

12. The premium market is large and growing Dubai Private Premium K-12 Market Size, By Curriculum, 2012 (Premium Schools > $13K

13. Parents in Dubai prefer British curriculum schools Q: Please rank the top preference for type of curriculum for your child? British/British + IB curriculum is the most in demand amongst parents

14. Even through the economic turmoil of the recession, K-12 enrolments have continued to grow K-12 Dubai Private Non-Emirati Enrolment Growth and GDP Growth, 2001-2010 Private Non Emirati Enrollment Growth

15. What are investors looking for in a regulatory system? Transparency Quality Pricing Mechanism

16. KHDA’s pricing mechanism ensure operators and investors of a clear, transparent regulatory system 3 2 1 School fee increases are allowed based on quality ratings, and pegged to baseline cost index Regulators determine a baseline index of education costs Regulators conduct annual quality ratings of each school % of Schools Receiving Ratings Sample Rating Factors Approved Price Increase Amount: Sample Costs Included in determining baseline index Academic Performance Attendance Facilities Teacher Quality Retention Rates Baseline Index x 3 Utilities Rent Teacher Costs Baseline Index x 2 Quality Rating Scale Baseline Index Of Education Costs Baseline Index Excellent Good Fair Poor Baseline Index Mechanism to regulate price increase if instituted needs to be transparent and should encourage investors and private operators to invest in building quality institutions

17. Before entering Dubai, schools should understand how their offerings fit into the market Revenue Define Market & Competition Competitive Benchmarking Catchment Area Analysis School Enrolment Potential Key Considerations Market Size Fee Growth Potential Future Enrolment Potential Cost Improvement Potential Key Output Facilities 100% T arge t S c hoo l School 1 80 A djustme n t f or L oc a tions 60 • School 2 40 TargetSchool 20 School 3 Ci t y A O u t s i d e 0 Ci t y A Accurate Assessment of Local Supply and Demand Determines success in K-12 Sector

18. Agenda Regional Drivers K-12 Higher Ed Early Years

19. The TNE market in the UAE is large and growing quickly • 2012 Revenue:~US$105M • 2012 Revenue:~US$150M • 2012 Revenue:~US$385M India Malaysia UAE Vietnam Revenue CAGR (‘08-’11) • 2012 Revenue: ~US$30M • 2012 Revenue:~US$148M >15% Indo-nesia Singapore Brazil 10-15% • 2012 Revenue:~US$40M 5-10% <5% Size of the bubble represents the total revenue of acquirable assets • 2012 Revenue:~US$520M

20. Many institutions have already entered Dubai to set up branch campuses

21. The UAE has potential to attract international students to branch campuses

22. Dubai offers the most favourable regulations for setting up an institution Attractive Unattractive

23. The most successful universities offer employability related courses 100% Other Health Science Computer Science Engineering Placement rate of 70-80% compared with other institutes at ~50% Business/Mgmt Private Western ~70-80%

24. Foreign branch campuses can improve their appeal by offering transfers to the home campus Students at other private western universities can articulate only after year 3 ArticulationOption Year 4 Year 1 Year 2 Year 3 •  •  Herriot-Watt University of Wollongong in Dubai Middlesex University Canadian University of Dubai Private Western •  Students have the option of completing a part of the program at Heriot-Watt campus in Edinburgh If the student completes final year in India or UK, a UK degree is awarded •  Public •  Public Universities A transfer to a Western home campus improves a student’s job prospects both at home and abroad

25. Agenda Regional Drivers K-12 Higher Ed Early Years

26. The early years market is small and fragmented… Market Size of Dubai Independent Private Nurseries, By School, By Price Point, 2013

27. But all segments are growing quickly Enrolment in Independent Private Nurseries in Dubai, By Price Point, 2010 and 2013

28. EYFS is the most popular curriculum option – the source of most incremental enrolment growth Enrolment in Independent Private Nurseries in Dubai, By Curriculum, 2010-13

29. Parents want English as the language of instruction, even in early years Q: What is your preferred language of instruction for your child?

30. UK Education in Dubai: Opportunities Across Sectors K-12 Higher Education Early Years • Robust market characterized by strong demand for British curriculum • Dual demand for British and local curriculum from Emiratis and expats • Clearly defined licensing and regulatory system • Significant opportunities for TNE/foreign branch campuses • Scope for international student growth • Supportive regulatory environment • Nascent market with strong growth in enrolment • Preference for EYFS and English medium • Regulatory environment required to support growth

31. Thank You for regular updates on events, research and reports @Parthenon_Group @Karan_Khemka www.parthenon.com