Q4 2021 Vitru Ltd Earnings Call
Good evening, ladies and gentlemen, and welcome to Victor's fourth quarter and full year 2021 earnings Conference call. All participants are in a listen only mode now.
Later, we will conduct a question and answer session and instructions will follow at that time.
As a reminder, this call's being recorded and will be available on ventures IR website.
Now I would like to introduce your host for today's conference call. Mr. Carlos Brito virtually CFO you may begin.
Thank you Brad.
And good afternoon, everyone. Thanks for joining US again, the Becker to be here with you all for the release of the fourth quarter 'twenty one numbers.
The number for the full year of 'twenty one.
Slide presentation will be pockets of day spud guest which is also available and now Investor Relations website at Investor about the V true Com BR.
I Trust you all have the presentation in front of you.
As usual before we begin I'd like to remind you that I have to tell you the implied two and three of differentiation Safe Harbor is in effect for this call.
So now I invite you to go to page five.
Here on page five we have the main highlights for last year in the fourth quarter of last year.
One which is not new was the announcement of the combination.
With only seven months.
Which is a leading institution here.
With the highest quality indicators.
The higher the PGM sector in the country.
Despite a very sizable business.
And mentioning this transaction is.
Still being evaluated by deluxe terrific, Turkey and Brazil.
And.
Bunch to show again to you some number of them.
Suzanne.
Second important remarks.
Awful.
Nothing new.
Is the morphing of course that we launched in August of last year.
And after a couple of months it quickly became our number one core ebay can take off the second semester of last year, which is important not only for the expansion of the market as a whole, but also as a tool to sustain tickets and pool over time.
The third highlight is that we reached at the end of last year.
Nearly 360000 bestowed the kitchen students.
Mostly in our core business, which is on the regulation and these are the future.
In which we had a increase of 27%.
The intake of the second semester of last year and by the way.
32% increase in the first semester of last year.
And it's very important to the growth as well in the South East region, where we grew around 45% year on year.
Between December of 'twenty, one I understand that.
Going to page six.
No.
The another important remark.
The average ticket I cannot.
Uh huh.
I repeat myself just to say that we have a different business and we have been able to sustain and improve overtime.
That with a different than the market our ever tickets.
Our core business again at least the piece.
The graduation.
Increased by around 6% in.
In the second semester of last year.
When compared to the second semester.
And now it reached 278 reais per month.
This is a.
Remarkable achievement.
We had always said that we have a disciplined approach to ticket we don't want to grow for the sake of growing but we want to sustain and improve the tickets.
And by the way it is.
Only the effects of nursing nursing is a prudent course in which the average because it's way higher than our normal traditional course with.
With Belk morphing the increase because it would have been around 5%.
So Phil the increase as a whole here in your ticket.
Our our casinos airports to sustain insulin thing a disciplined approach.
Regarding financial numbers met the revenue.
Core business increased by 26% net.
Last year and a consolidated.
Net revenue increased by 22%.
Adjusted EBITDA increased by 24% last year with a slight increase in margin as well just to be Martin now, reaching almost 29%.
And finally regarding cash flow upfront.
We had 177 last.
Last year, increasing from 2020.
Nice cash conversion ratio of around 83%.
So now on page 10.
Before we dig deeper.
The number of the year, just a reminder of what we have been doing since the IPO we said.
At the time that we would go to will grow.
And for growth Avenue, three organic and inorganic we have been doing some who havent done it but he wasn't Berlin.
Now.
The fourth one was the ramp up of card hubs, which now represent.
Around two.
Two pairs of expansion hubs I shouldn't leave.
And more than 91% of our overall portfolio of hopes it'll still ramping up which means important growth.
Driver with limited execution risk.
We as I said, we grew to 265000 students on the whole we opened as well around 240.
40 hubs.
Plenty of totally hubs and last year.
All of which.
Almost 100 hubs in the southeast.
And of which keeps the hubs in the states up from Poland.
We said a few times.
We are still a bit shy, we worth a few a bit shy in the southeast and that's why the most important.
Organic lead Gen for us.
The South East and that's where we've been focusing and we're drilling a lot there yeah. The states in the southeast.
Third one would be core offering I said already about nursing.
And soon we will have.
Psychology.
And law the law will also come.
To this application.
It will happen hopefully.
Hopefully it.
And once it happens will be a game changing movement for the whole industry.
And for inorganic about the transaction that.
I mentioned that a few times already which is now on page eight.
As a reminder, tomorrow.
Company, and institution, where to find more or less even though the one that we have.
Here are the numbers for the second quarter, and 21, which all of them. The latest information that we still see the markets are in.
Couple of weeks with aren't cheap June relief to you. The number also the modern flexible in 'twenty, one as a whole.
But so far what we have here all the numbers for the second quarter of last year.
So.
40% of adjusted PBT margin is like nice I didn't have my team. They are the fifth best.
Institution commencing in Brazil, most of them represent around 25% of the revenues of the onto the mud IMT has like I said before are the best quality indicators.
And when you see the digital education business.
On page nine it is important to highlight and to emphasize.
We are going to maintain both rent because they.
They didn't have to different markets.
And also there is an important synergy commercial synergy to be spiking here on.
Currently there are around 600 series in which you have only.
When you say the market, but not understood or vice versa.
And I'm here on the right are.
These are the numbers are hard to market share and the girls can you walk me through the hole.
Do not yet reflect the new numbers that were released by the Ministry of Education, a few weeks ago.
We had the first numbers 2020 and defensive here you have only the numbers between 16 and 19.
And this is because.
We're still waiting for the micro data to be made available by the mutual application.
But according to the first number that would be the.
Combined market share of all you have to tell me.
And once the mine reached 20%.
Was 10% tariff on Hypersound.
16.
Thankfully, we have the need to grow faster than the markets and to gain market share with that we've had 18, 5%.
Market share of course to do the first.
Mac installed in 19, and now we have around 20%.
After a promising additional kitchen market. So we keep gaining market share in function of the differentiation.
Of both institutions.
Once you have here on page 10.
Just a quick reminder, that we offer our typical hybrid academic model why.
Why aren't you offered a hub based on my model.
Model.
And we have a different groups. That's why we have been able to grow faster than the market.
And finally on page 11, before we jump into the financials.
Deep here.
The validation by the claims by the market.
On the left the grades that we have.
And Oh, that's also when you have children.
Obviously the money.
The average between play store and Google store.
And Apple store.
With the export and then work with all that each player with the highest number of our regions of each player in the sector.
And then you can see here that we have the highest rate in the industry.
Moving to the next one five so we'll have four four and $4 seven so this confirms the detection.
One approach that we would have two indications.
And by the way our apps now represents around 60% of our enrollment.
Uh huh.
So could we start to offer.
More or less six eight.
Eight months ago.
Now if you present that around 60% of the of our taking cycled through all of it.
So they're totally different.
Experienced toward the newcomers.
On the right.
Reputation index would go to Colombia.
And which would have seven particularly to the $8. Two these are again the highest number amongst the leasing to play with in Brazil.
So now.
Jonathan to page 12.
As I said before our nursing to be offered.
We.
Our sustaining tickets with Nokia and we will be able to do full even further with la <unk>. Once it is approved by the Midtown location, which you hope to be faithful.
I'll now.
Going to the numbers of unless Youre on page 13.
So as I said.
We have now around 260000 students can be used on vacation.
So all of them in total, including the 6000 will have on Kansas courses.
On the chart you have on the right.
The evolution of diesel in case, you couldn't even their graduation.
And by the way he did have you been purely organic basis as you. All know so we grew 18% last year year on year, which is an impressive achievement given the tough comps.
<unk> and 'twenty.
As a reminder, we had a 40% increase in intake in the second semester afterthought insulin.
So the bar was already quite high here.
Page 14.
And they said we had a increase in can take less often.
27% in second some ethane plus 2% in the first semester from our own.
<unk> increased and you can take well last year.
And the pie charts that show the breakdown.
Of the intake and you still think 2020 . One. So here there are a number of points to Georgia huge bear in mind.
The first one is.
The reduction in the black.
Black Bock here of the bi which is vocational.
I mean, what are your technology, which are shorter quarters closer to that.
They have a duration of two years to five years.
They'll be worth 36% of our intake now b b there are 32%.
We can take.
And most importantly.
It is the increase in premium courses, I mean health related Cortez and engineering.
Which has a higher ticket.
The average ticket of ancient heating or corporate such as motor thing.
And nutrition and bio <unk> seen that you get a physical location they used a bit harder than a bit more than 400 reais per month.
Which is more or less 50% higher than it wasn't having a you know average tickets.
So when you figure the intake of the premium courses.
It was 23%.
20.
4% injury, and 19 bucket in the health quadrant.
And now our last year, they grew to 32% of your peak.
But those quarters, they still represent only around 20, something 22, 2% of the overall student base last year. They were 32% of intake, but still they are a bit more than 20% only of the whole base of last year.
Well the trend the trend is that premium courses will represent a higher and higher share of our base.
Which will be an important driver to sustain even more our tickets and although addicted this a bit later.
Yeah.
On page 15.
The breakdown of our growth in all of a sudden the base in the certification on the words throughout the country. So.
So we grew up 18% year on year for the whole country.
Including temporary staffing in the south which is our e-commerce wisdom around what's happening in the center with an important group there are around 15% in the north and northeast and Midwest.
Before 45% in the southeast.
And on the right.
You can see the breakdown of the number of hubs or we can do this new information. So here you can see the evolution.
Of the whole base.
The country in the last four years and now for the first time.
South East region represents the biggest region in terms of hubs.
Had increase of 61% and the number of hubs in the southeast which now.
245 hubs.
939 that you have.
And the whole country.
So this is again an important growth driver.
The future, which if you're on page 16.
I think I'm thinking five the presence in the southeast which.
Which represents 40% of the whole market in the country.
Yeah.
And if that six 1% building, 45% growth in similar beat there.
And the when you see the whole intake.
Members are the south deep was nine 8% and stuffing in 19.
And then grew to 17%.
And then.
19% themselves into any one of the whole thing, but we are increasing our footprint in the southeast.
On page 17, our seamless.
With the evolution of the tumor based birth cohort.
Moving back to a cohort in the number of hope, but we're open in a given year.
So we keep increasing.
We keep at maturity.
Our.
Our base and as I said this is an important driver with limited indication risks because the hub is there. The sparkling is there they only have to have the brands to be there and word of mouth is working in our favor. So we keep increasing our maturation of hubs and today the theoretical much originally index.
Of the overall portfolio is.
Around 33%.
But it's important to highlight that this index takes into account all the conventional hubs.
So when we opened several hubs at the same time, we have a dilution effect of this index and secondly, even and that's where the lower index. For example, but for example, if you take only the Chipotle in 18 cohorts.
The most recent index of these hubs decreased from 36% each in December 19% to 50% in December 'twenty and now to 60%.
But 2021, so we will keep increasing the maturation of our hubs.
Yeah.
On page 18.
Uh huh.
Some key financial metrics.
I just had a drilling budget around 22% on a consolidated basis.
Perfect.
<unk> increased 31% in the in the whole year.
Reaching a gross margin of around 62%.
Increase of four five points between till the end of 2020 one.
And then I'm wondering if you could go back to show the reasons and just the BDA ruling as I said, 24%.
Uh huh, reaching a margin of 28, 9%.
India.
On page 19.
You see here.
On the left that for example, the additional vacation undergrad with net revenue.
<unk> grew 26% in the year.
Driven by.
The expansion of our system the age, but also by the expansion of ticket.
The numbers are we as I said, we have now in the second semester of last year 270 <unk>.
Which is around 6% higher than one year before which was around 4% higher than one year before so we keep increasing our average ticket.
Because of the differentiation ethics of our product.
And again as I said this increase of 64 cents, a 1% of it is nurturing the other 5% easing beef.
<unk> portfolio or that he had already before.
So.
The mix effect is important.
And the average ticket of premium courses.
It's around 400 re export them.
Why is that so because we'll have to hold on to the Adriatic.
Our average because it means that the average ticket of the traditional courses.
Around 240% and 41.
Four months.
So as I said before we expect the relative weight of premium courses to keep it reviewed overtime.
Not only because of the higher penetration of our current courses such a.
Okay.
But also in India.
In the near future cycles anymore. So.
So just as an example.
So if we had 60 54, 6% of premium courses I wish him all of that.
More than 20%.
And 50% of our traditional courses.
Our average ticket will have reached 323, I mean 400 for the premium and 240, Florida, because as you know through 'twenty.
On average so there is still a lot of potential here to pay tickets.
Not counting with inflation I mean, any other effect just on that mix effect, we still have a lot of space to increase ticket. After we increase the relative weight of premium courses.
Overall Fortunately.
So on page 20.
The contribution of the other segments are first continuing education.
By twin microphone.
Our next year.
Which is explained by the higher ultra high additional marketing that we increased last year.
And when we get a hand on campus.
There was a decrease of 60%.
Year on year basis.
Would you.
Aligned to our vision.
This is a business that will.
I'll tell you keep suffering a little bit more overtime, because we do believe that there is a.
<unk> Pinot trends of migration of interest from one canceled to digital.
Yeah.
So when we started one that's revenue boost.
Boosted by these the education segment.
A decrease of 26% of pizza kitchen, undergrad and graduation.
Continuing education and a degree of people with cancer.
The net revenues of one campus so to consolidate the number of 'twenty.
22%.
<unk> revenue when you see about costs on page 22.
The couple of service.
Declined from 43, 34%, 7% to 35%.
Right.
These loss because of overall optimization of personnel cost.
As we grow further we are able to more and more optimized the ratio between students or tutor.
So it'll be a function of growth.
And also of course, the natural gains of scale as you grow, Florida, we can dilute more and more fixed costs.
On the right journey.
Notwithstanding only 8%.
Although I'm not sure evidence, which is way lower than competition, which shows our continued efforts to maintain.
A lean and agile structure, which reflected now in our culture.
So we had a growth of around 8% only of our G&A cost unless you're getting.
<unk> expenses last year.
Yes.
On page 23.
On the right and left.
Selling expenses grew by 34%.
This increase was a function mostly of the increased intake that we had.
Yeah.
But as I said, we had increase of around 30% last year.
And the the.
Selling expense increased 34%, which means that the.
Can you please a little bit.
3% when you see the year on year comparison, so I think it's worthy.
The normal increase in the back of around 3%.
And also because the hubs work.
Again closed.
Unless you just as a reminder, the hub is an important piece in our overall studying machine for now as we.
Resume operations at the hubs we have now.
I'm, assuming that operations at the hubs.
So this will be also important to choose to use the hubs in our selling machine further throughout this year.
And on the on the on the right. The P D, which is called nothing for them. It's a lot of this I think so.
The famous PD.
It increased I left ear from.
$14 eight to seven people in place.
Last year and this is.
First off the phone.
And also because of the.
Higher share of.
Newcomers and new students and that was seen in these I don't know most other PD is concentrated.
In our new students coming from the first semester.
And also because again the hubs were closed.
So in that work and then remodel part of the experience he used to meet your colleagues at home.
So when we lose this piece of the whole.
But it's weird.
We are not in a full potential of the overall experience. So now as we resumed the physical encountered with the weekly meetings at the hubs we expect.
The overall with agents and P D levels to go down easier.
So now jumping to page 25.
Adjusted net income and cash flow so different income.
<unk> declined 10% last year.
And the first three years.
What the high comparison base in 'twenty.
Until the 20 <unk>.
We recognize.
For the first time before.
So do you meet a tough comparable.
Also we gained 13 million reais.
After our IPO.
FX gains, which is part of the net income of some in 'twenty and besides that left here as you know we had a huge increase in ICT you need fixing ratio with you would you went from four 5% installed in 'twenty to tamper sensing.
And most of all of our debt.
So we had a.
A slight decrease.
Net revoked.
And in cash flow, we had an increase of 7%.
It's probably 11% last year.
Sure.
What are the the reason for this increase oney I'd say, 11%.
As I said the gain in FX of 13 right.
Yeah, I Forest park of the operational cash flow.
So if it were not for the 13 and a realized gain in FX. Our net income that goes in 'twenty. It would have been around 110.
So we would have had the growth of a bit more than 20%.
Cash flow from operations, which is aligned to our growth in EBITDA.
So again, a nice cash conversion ratio of 83%.
Yes.
So that was it.
I had a forum for now and I would like to open for questions.
Yeah.
If you'd like to ask a question. Please press Star then one if your question has been answered and you liked to lose yourself in the queue press the pound key.
First question comes from Victor Bolton with Goldman Sachs. Your line is open.
Yeah.
Nick Terry Your line is open.
Pretty good.
Good evening, everyone. Thank cyclical more classrooms.
From our side.
Right.
Hum.
Uh huh.
It's truly inquiries on the cost line, which is a problem for them.
<unk> auto parts.
Our margin has been better.
Operator.
Sure.
I'll, let you go.
For further margin improvement.
Yeah.
Second classroom.
On the technology angle, you mentioned that you are in mobile app.
Okay.
Mobile that's what you see.
So you can track.
Oh, okay.
I'll ask that.
She is a phone call back thank you.
Okay.
Thanks for your questions.
The first one about margin.
I mean, we.
Because we really focused on deep certification and different from the other.
Most of all the peers in the industry.
We didn't have a let's see.
You would see in Egypt also into 'twenty, one into 'twenty because of our hubs close or are on campus, which closed we had some savings and Youtube for example.
But it's not that material.
When you compare to a typical on campus operations in on campus.
Some peers have a what's the normal lumpiness, we had completed a robot is not that material because most of our business.
Do you still have the pizza so going forward what can we expect regarding margins.
We.
We should expect a decline.
And in the cost of <unk> going forward as I said because of the.
Hopes have been opened and then.
Being able to offer the full experience afforded newcomers.
So this could be an important driver for our growth.
Margins are but this of course depends on the overall economics depletion.
So we do expect some gains the margins for this year.
As we have had eight until they joined one in 'twenty in 19.
But this is going to be let's see.
Not a big jump in margin, but a slight but continuous gross margin before.
The conclusion of the deal with sprint to them once we close the deal with Cinemark then our margins will grow a lot because they had a overall margin is.
Higher than what we had we have around 30%.
And they had a margin.
Around 40%.
The second question.
I had some barbecue hear you, but if I got it correctly, you're asking about why our approach is different from our competition.
And I would say because of the way we operate we have been focusing on digital learning and digital education.
For 15 years now.
And different.
From from Oh.
It appears we have.
Dislocation as a core business of our institution for years now and this reflects in the culture and this reflects the.
We keep the chronology and the whole approach we had huge technology in the store as a feature as a whole.
It is the act for example that I showed before.
It was already a peak.
Each of the overall student experience.
It was not a complement.
I was hoping you it's authorized for some years part of the whole student experience.
Have a nice <unk>.
And now left what we changed was to offer the enrolment.
But the fact of having a nice add for example, what's the right part of the overall stroke.
Our vision and orientation of when yourself with point years now so it is a function of focus focus and culture.
Around promotion.
Yes.
That's very clear thank you very much.
Thank you.
Next question comes from and as she is.
Your line is open.
Good evening guys. Thanks for taking my questions the.
First question is regarding the intake cycle off a first half with St. Jude if he could.
Sure any first impressions from the cycle it would be great and also how should we expect your average right.
For a freshman to behave Ah you don't read books I'll just also be amazing. So second question. It would be regarding the P. D. You have seen our search.
During this quarter right.
Is there any nonrecurring event that explain this creates or any seasonality with specific to the fourth quarter and should we expect this number to normalize in the next quarters.
Okay.
So for.
For the fourth question about intake and pick up now for the current cycle.
Yes, we are still.
Neither of these exciting whilst we have seen before is again a strong performance.
In the cycle. So so far what we have when you compare the year on year numbers I mean, the the intake we'd had until.
Beginning of March of last year, and they take off work easier we are growing around mid twenties.
Around mid Twenty's growth.
So far our intake.
With eight increasing ticket.
Sure David.
Nick.
Well when you see that the only the intakes and pick up that we had this year unless you do anything crazy.
And increasing again, that's only because of nursing degrees because we have a couple.
A very disciplined approach to tickets as a whole.
So so far so good.
Growing our the intake and we've got a growing as well.
Second question about Pega.
P. J, yes, you're right we had a increase in PD in the fourth quarter of last year.
Basically because we we update our PD curves on.
On a yearly basis.
At the end of the year.
So last year.
We standby would need it.
And we had the effect.
So all of the invoices that the war sensitive students.
In 2020 for example.
We we usually have a write off.
Even after 12 months.
So we our P J curve.
The overtime.
After 12 months.
Our inflows update we had a write off.
And this is why cost is walk if you will in the P. D curve. So what we had was increased.
In the in the in the losses of the invoices that toward issued ancient I'll think 'twenty.
And then we can all be 'twenty, one because of content, especially those that or.
The issue of empty March April and May of 2020, just after the pandemic.
So that's why we had this jump in the.
The fourth quarter, but it is too difficult too, but you're correct. The number for the whole year of 2001, so the number of plug a hole here.
It'll stay is the right number for the overall <unk> of last year.
Going forward.
We should expect a slight decrease of these number for 2022.
Okay.
Okay, great. Thanks.
Okay.
Your next question comes from Mauricio.
Credit Suisse. Your line is open.
Hi, guys. Thanks, Thanks for the time.
So I have I have some questions a one one relationship secrets I've seen not not only in the short term the altra doesn't take cycle, but in terms of trends in the market I understand that the.
<unk> group's in Brazil have noticed that distance learning is a is a growth Avenue.
So what are what are the possibilities of a kind.
Kind of a price war and she kits going forward.
How do you see that or if you see that this sector is because this is a scaled business. Therefore, it should consolidate in the hands of few therefore, it diminishes this kind of competition.
My second question is about where growth is coming from now after the pandemic.
There was any.
<unk> and interest for the fully distributed courses.
And all or you used to.
The new courses would be let's say the the ones that will drive growth.
And the third question is about market share.
If I remember correctly.
At least in the third quarter.
Other groups are notably E books were growing a little bit more year on year.
Do you feel that you were losing or gaining share in the in the in the distance learning markets. Thank you.
Okay.
Let's start with.
The final one.
I cannot.
Comment on the on the overall market, but what we see is that we.
We have been able to gain market share over time.
And we grew.
Yeah.
I can take these year last year.
So.
Maybe we are.
I'd say at this moment growing a bit less mature than in the past, but with you I'm sure are gaining market share and competition.
What is happening in Tibet.
The market is.
Concentrating.
Round fewer needs.
As I said before about the SKU et cetera.
The literature, there are the ones, who are gaining share or.
Not only ourselves, but I'm sure.
He built and other players are we missing here because we have I'd say more scale, we've been able to gain market share from there.
Our players because it is a business of scale.
So that's why I don't I don't believe that we are losing market share.
When you come back to the whole market.
So the second question what Beth.
I do believe that the.
The sector will tend to consolidate more.
Neither organically.
As I said more and more use of the players.
Gained share in other states moves here or.
Or inorganically.
The transaction that we announced with the Watson is one example.
I am sure that there'll be other contracts like the medium term.
Ah I see that the secondary school to forgive me.
Universe, you'll given the need to have scale.
To offer.
A high quality product and at the same time to make money.
This is a a high technology.
This is quite in scale so.
I do believe that the sector, we tend to consolidate around fewer names are going forward.
And the ticket to the twins and you pick up the first one that you made.
What we have been delivering overtime.
Is that now for a few years is that we have been able to.
Sustained ticket.
We are drilling.
Great.
Overtime every ticket.
Still not at the same level of inflation. So we grew 6% now what was 10%.
But one year before we grew 4% in first one corporate fight for more of a thing.
So we have been able to sustain tickets overtime.
Also the deforestation aspect.
And I do believe that there is a.
Different kitchen aspect here that are important to choose two two very nice, but we offer a hybrid model with a tutor in the class a and we are the only player that is focused on this model would you.
Implement is still for 222 to create.
Thank you operator, but we know how to do it who have been doing this and play this game for the last 15 years.
So that's why we have been able to not only gain market share, but also to sustain going forward.
So when you look forward I mean, I do believe that I don't believe that we don't have a price war because either become scale there'll be fewer and fewer players.
There was a price war in the beginning.
17 for example are beginning of the new reality when several players have jumped into the into the game.
But I do see now that there is more and more.
A rational approach and discipline approach because not only of ourselves but for the whole industry. So I do believe that we.
We have reached and kind of see.
For tickets for the online the Huntington's online.
Our courses, which is not our case our case is eight have been able to increase because it's different from the competition because at the end of it.
The different regional ethics that we offered a different split.
And going forward.
Not only be if we.
Continue but the relative weight of premium courses, we increased we had again, 23% 22% of the beat in premium courses.
32% of the peak and it worked to entry what do you need before so the transit.
These will reach 32 very soon.
And probably 60% are in a couple of years, so that would be important mix affected as well.
Yes.
Perfect. So so let's say that these new courses tend to be higher tickets in general and these are the ones that are driving growth.
It's a it's a positive mix effect at the end.
Yes, there are two things the positive mix effects.
But also the overall performance of the Apple on Apple comparison.
So what we.
We grew 6%.
The tickets they are the biggest.
Gain we had in our health coaches at what nursing, but it could be north of the equation. For example, we would have grown by 5% instead of six.
So when you compare the apples to apples, we are running a little bit our tickets and besides that there is a mix effect that will increase over time.
So going forward, our I mean, we tend to increase.
And so we haven't even seen.
That's very clear.
Thank you.
Thanks, operator.
As a reminder to ask a question. Please press Star then one.
You May proceed with any web questions.
Right.
Okay.
So the first question from Pedro.
Lima.
Two questions first one was.
We're expecting fourth playing through intake cycle do you believe that it should do presents another round of strong growth and there was some yours.
You can take the lead yes, and as I said.
We we so far we are growing at around mid twenties.
Gross.
When you see the same a period of time of these here compared to the first half the first intake of last year.
So.
The epic cycle. It is still far from pharma from a from a finished but you have to we will have double digit growth for the overall cycle.
Second question are you you guys have been posting better dynamics down the rest of the industry do you think that it's possible to maintain these growth and turning to how do you see competition on the market, yes, that's what I want to experience it together.
We do believe that we're gonna be able to sustain going forward.
And for the whole industry as a whole I do believe that there'll be fewer players there'd be more of a concentration and I don't believe in price war in the industry.
I do believe that we have reached a kind of a floor of license here.
Yeah.
From a look of that and the gondola.
About coffee and it's worth talking about.
With the closing date and any possible remedies.
We don't expect.
And you'll see relevant remedies are in target, we don't have a huge overlap would go into the what we do have some overlap in some cities.
But the group events are very minor.
Speak I'll share of all of a sudden leap we don't.
Any relevant remedies, if all everybody.
And regarding the dates.
We are confident that we'll be able to have clothing and a couple of months.
Let's see how how kb homes, but things are evolving okay fine.
But we do believe that we could have closed a couple of them.
Commercial synergies could.
Could you give some color on how it gets false and everything in order to sustain our revenue.
Ah, yes, there will be a <unk>.
A number of growth lifting synergies there.
First one would be the faster expansion of hubs.
As I showed before today you have around 600 cities.
In which you had only one of the two brands.
So once we have closed the deal will be which will accelerate the growth and the offerings of both rent.
In the city.
Second one will be the increase in the portfolio.
Of course today, we have <unk> offers around 150 undergrad courses while out onto the market offer 1100 courses in other graduation.
So with a few changes that we can improve and enhance increase.
The portfolio of course of all of them for the month.
The third one.
We will be as well our cross selling opportunities between their graduation, and Red region with both brands. So there are a lot of people just come up with synergies.
That's what store today, we don't have any numbers because we cannot have akshay commercial discussions between the two companies.
Because of the on switch loose.
But we will be able to have some some rough numbers for from some big picture numbers.
Sure Matthew when we have the two of them.
Uh huh.
One last question from Lima here as well.
Thank you for integration with <unk>.
So integration will take it will take time, we are already.
Preparing for the integration. So we hiring we've hired a banker to help us in the preparation of the integration, but these are going very very well we have a detailed plan for integration because we do believe that we will be able to have a very smooth transition.
Both companies have a very nice culture.
Coastal oriented towards the customer or the students.
And their willingness to choose to cooperate and you incorporate.
In our integrated a minute or so this will be of.
Of course, the full integration with all the areas in all departments will take a couple of years, especially when you see for example, the integration of the content production and some change that we would want you to do there you have seen us over time, but I'm going to get more.
To give you more details about this.
Gleason timetable and numbers when we announced the closing.
And one last question from Tayo most convenient.
To give more color on the P D expensive.
How the PDA Ford, mostly compare such a dakota portfolio of our revenues.
And level, we should expect in next couple of years.
T D.
It's still quite seem to choose to know because we offer.
The first.
The 14 page was less than six months ago six months ago in August and September of last year.
I have a big a clarity on that.
Do you see that the overall P D.
Expenses for the year.
We do expect.
A slight decrease and easier because on one hand, we are still in.
In the middle of economic crisis, but on the other hand that we are going to and we are opening the hubs.
So the full computer and.
It will be able to to be offered to the student and the most important driver of P. D. A.
The engagement.
Newcomers.
I'll tell you that today the P. D ratio of newcomers is way way higher than the piggy of seniors.
So if we are able to treat you against you opened a hope as we are opening now.
We are going to see to be able to offer the full package. The full content experience and people will have will meet colleagues I mean, it is what we how we design the product and the service with the weekly meetings.
So once it is.
With these.
This will be for sure.
This will have an impact in retention rates and of course E D.
So again.
Yeah.
Both awards.
Any other question life.
Again, Please press star one to ask a question.
There are no further questions. Mr. Friedman, please continue with any closing remarks.
Yeah.
Well. Thank you all for being here it was a pleasure and it was our first full year as a listed company. So we're very proud of what we have been able to achieve.
He brought to you and we keep available for any further questions. Thank you very much Tonight.
This concludes the program you may now disconnect.
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