Q4 2023 Afya Ltd Earnings Call
Unknown Executive: Today, I'm here with AFSEO's Virgilio Gibbon and Luis André Blanco, always here. During this presentation, our executives will make four forward-looking statements, which can be related to future events, future financial or operating performance, know-or-know risks, uncertainties, and other factors that may cause F's actual results to differ materially from those contemplated by those forward-looking statements. Four of the statements in this presentation include, but are not limited to, statements related to business and financial performance, expectations and guidance for future periods, or expectations regarding the company's strategic product initiative, its related benefits, and our expectations regarding the market. This list includes those more fully described in our filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based on the information available to us as of the date hereof, and you should not rely on them as predictions of future events. And we disclaim any obligation to update any forward-looking statement, except as required by law. In addition, management may not reference any IFRS financial measures on this call.
Conference call.
Today I'm here with us to see all these uses your bowl and wisdom that belongs where all the chance for them.
During this presentation, our executives will make forward looking statements.
BARDA with these statements can be related to future events future financial or operating performance no unknown unknown risks uncertainties and other factors that may cause actual results to differ materially from those contemplated by those forward looking statements.
Forward looking statements in this presentation include but are not limited to <unk>.
Statements related to the business and financial performance expectations and guidance for future periods, our expectations regarding the companys strategic product initiatives.
Related benefits and our expectations regarding the market.
These risks include those more fully described in our filings with the Securities and Exchange Commission.
The forward looking statements in this presentation are based on information available to us as off the date hereof, you should not rely on them as predictions of future events and we disclaim any obligation to update any forward looking statements, except as required by law.
In addition management may reference non <unk> financial measures on this call. These measures are not intended to be considered in isolation or as a substitute of the results prepared in accordance with Firefox.
Virgilio Deloy Capobianco Gibbon: These measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with IFRS. This presentation has reconciled those non-IFRS financial measures to the most directly comparable IFRS financial measures. Let me now turn the call over to Virgilio Gibbon, SSEO. Thank you, Renata, and welcome to our final conference call of 2020. We are excited to present another year of exceptional operational and financial performance for us. Once again, we have demonstrated the resilience of our business, the successful implementation of our strategy, and the reliability of our approach.
This presentation has reconciled the non <unk> financial measures to the most directly comparable <unk> financial measures.
Speaker Change: Let me now turn the call over to a mutually agreeable off a few.
Speaker Change: Thank you have alpha and welcome to our final conference call of 2020, we are excited to present, another year of exceptional operational and financial performance for us.
Speaker Change: Once again, we have demonstrated the resilience of our business the successful implementation of our strategy and the reliability of our business model.
Virgilio Deloy Capobianco Gibbon: In this presentation, I will cover key strategic topics, including our performance highlights, the success of business education across our three. Guidance for 2023 and the New Goals for 2023. And finally, Luis Blanco will provide an in-depth look at our financial and operational activities. Now turning to page number three.
Speaker Change: And this was a vision our overview strategic topics, including our performance highlights the successful business if <unk> across our three segments guidance for 2023, and the new goals for 2024, and finance lease block will provide an in depth look our financial and operational performance.
Speaker Change: Now turning to page number three.
Virgilio Deloy Capobianco Gibbon: Let's begin by highlighting our performance achievements. Initially, our Just Net Revenue increased by 24%, reaching R$2,874,000,000, accompanied by a growth of just a bit of over 21% year over year, which is 1,166,000,000 hectares for Marginal 40. Furthermore, we are pleased to report a record on cash flow generation from operating activities, concluding the year with R$1,089,000,000, reflecting a 24% increase compared to the previous year and a cash conversion rate of 97%, which is 270 bps better than the previous one.
Speaker Change: I'll begin by highlighting our performance achievements.
Speaker Change: Our adjusted net revenue increased by 24%, reaching <unk> 874 meter has accompanied by a girl for not just the of over 21% yogurt.
Speaker Change: 1 billion.
Speaker Change: The $6 6 million hatch with a margin of 46%.
Speaker Change: Furthermore, we are pleased to report a record on cash flow generation of operating activities concluded the year with 189 meter.
Speaker Change: Reflecting a 24% increase compared to the previous we've.
Speaker Change: With a cash conversion rate of 97%, which is 270 bps better than the previous year.
Speaker Change: With consistent momentum throughout the year of adjust net income reached 591, and 2023 marketing over 10% growth year over year with an EPS of $6 37.
Virgilio Deloy Capobianco Gibbon: With consistent momentum throughout the years, our Adjusted Net Income reached R$591 million in 2020, marking over 10% growth year-over-year with an EPS of 6.37. A remarkable 12% increase compared to Transitioning to our operation updates for the year, we have expanded to 3,113 operating seats, witnessing an increase of over 12%, facilitated by the acquisition of UNIMA and Faculdades de Ciências Médicas de Aboato in January of 2016. In addition, our number of undergraduate medical students has reached more than 21,000, representing a 19% growth compared to 2016.
Speaker Change: Marketable 12% decrease compared to the previous year.
Speaker Change: This underscores our disciplined capital allocation on buyback programs, MMA and an efficient capital structure.
Speaker Change: Transition to operational updates for the year, we have expanded to 3113 operating seats witnessing yogurt increase.
Increase of over 12% facilitated by the acquisition of the NEMA and truckload diagnoses as measures of Lockdown in January of 2022. In addition, our number of undergrad Med school student risk reaches more than 21000 represented a 19% growth compared to two <unk>.
Speaker Change: Furniture.
Virgilio Deloy Capobianco Gibbon: Additionally, we are delighted to report significant growth in net revenue for our continued education segment, which expanded by more than 35% year-on-year, organically reaching a net revenue of $147 billion. Our digital health services revenue marks another great result with a 21% increase compared to 2022 pure organic, reaching a net revenue of $229 million. This outcome underscores the vast opportunities in digital services, driven by the ramp-up in B2B engagements, securing new contracts with pharmaceutical industry companies, and the continuous expansion in B2B contracts. Lastly, our ecosystem has 268,000 active users. Simplifying Substantial Penetration Among Physicians and Medical Students. In the next slide, we will discuss our robust business performance across our three business segments. Beginning with our core base.
Speaker Change: Additionally, we are delighted to report significant growth in net revenue for our continued patient segments, we expanded by more than 35% year on year.
Speaker Change: Organically <unk>.
Speaker Change: And net revenue of $147 million.
Speaker Change: Our digital health services revenue marked another great result, with a 21% increase compared to 2022 fewer organic <unk>.
Speaker Change: Reaching a net revenue of 299, we don't have.
Speaker Change: This outcome underscores the vast opportunities in digital services, driven by the ramp up and <unk> engagements, securing new contracts with pharmaceutical companies and the continuous expansion in <unk> contracts.
Speaker Change: Lastly, our ecosystem has to have the 68000 active users exemplifying substantial penetration among physicians and medical students in Brazil.
Speaker Change: In the next slides, we will discuss our robust business performance across our three business segments.
Speaker Change: Beginning with our core business than on the Grad segment, you observed significant grow the net average secrets of medicine represented a grow eight 2% over last year.
Virgilio Deloy Capobianco Gibbon: The undergrad segment, we observed significant growth in the net average sickness of medicine, representing a growth of 8.2% over last year. The completeness of the NIMA and Faculdade de Ciências Médicas de Aboato integration process in November, less than one year after its acquisition, proving our commitment to strike synergies within the. We are pleased to note that the most substantial revenue growth of the year came from our continuing education sector. With a robust intake process, three new campuses, and cross-moderation, we can see once more our students, employees, and partners benefit from our constantly developing education. In our digital service segment, we take pride in our two assistant physicians throughout their medical journey.
Speaker Change: The completeness of the Nemo and <unk> measures of Lockdown integration process in November less than one year. After its acquisition proving our commitment to extract synergies with the operation.
Speaker Change: We are pleased to note that the most substantial revenue growth of the year came from our continuing education segment.
Speaker Change: With a robust intake process three new campuses and cross maturation, we can see what's more our students employees and partners benefit from our developer ecosystem.
Speaker Change: On our additional service segment, we take pride in our tool assistance physician to all their medical journey.
Virgilio Deloy Capobianco Gibbon: Concurrently, we are expanding our ecosystem to facilitate new interactions and revenue streams beyond, including engagements with pharmaceutical players, hospitals, labs, and drugstores. Evidence of this expansion is seen in the growth of our B2B strategy, fortifying our market presence and extending our reach. Secondly, we achieved a 64% year-over-year growth in our B2B revenue. Transition to slide number five.
Speaker Change: While currently.
Speaker Change: We are expanding our ecosystem to facilitate new interactions and revenue streams beyond physicians include engagements with pharmaceutical players hospitals labs and drugstore chains.
Speaker Change: Evidence of this expansion we've seen in the growth of our <unk> threat fortify our market presence and extending our reach and secretly we achieved a 64% year over year growth in our <unk> revenues.
Speaker Change: Transition to slide number five you explore how the company's financial results reaffirmed their resilience and predictability of our business model.
Virgilio Deloy Capobianco Gibbon: We will explore how the company's financial results reaffirm the resilience and predictability of our business. After 2023, adjusted net revenue was almost four times higher than in 2008, the EEOI, reaching R$2,874,000,000, surpassing our mid-guidance for 2020. Furthermore, 2023 adjusted EBITDA was $1,100,000,000, followed by a just-to-beat-the-margin of 40.6%, also surpassed our mid-guidance of 1,150,000,000 eyes per year. Moreover, our EPS has more than doubled. Thank you all for your panels. Thank you, thereby delivering significant returns to our economy. We are pleased to introduce our new guidance for 2021, which considers the successful acceptance of new medical students. Martinez-Torres.
Speaker Change: 2023, adjusted net revenue was almost four times higher than in 2019.
Speaker Change: The year of our IPO reached.
Speaker Change: <unk> $2.874 billion surpassing.
Speaker Change: Surpassing our guidance for 2023.
Speaker Change: Are there more 2023, adjusted EBITDA was $1 billion 166 meter hacks, followed by an adjusted EBITDA margin of 46%.
Speaker Change: Also surpassed our mid guidance of $1 billion 150 million.
Speaker Change: For EBITDA.
Speaker Change: Moreover, our EPS has more than doubled since 2019 and describe our capacity to combine organic and inorganic growth with stringent capital allocation discipline.
Speaker Change: Thereby delivering significant returns to our ship.
We are pleased to introduce our new guidance for 2024, which considers the successful acceptance of new medical students issuance, ensuring 100% of the cumulative in all of our medical schools.
Unknown Executive: Thank you. Thank you. Thank you.
Speaker Change: Given these factors the guidance for 2024 is as follows.
Unknown Executive: Given these factors, the guidance for 2024 is essential. Net revenue is expected to range between $3,150,000,000 and $3,250,000,000, while Adjusted Vida is anticipated to be between R$1.3 billion and R$1.4 billion, excluding any acquisition that may be concluded after the issue. Once again, we are guiding another strong round ahead, improving artists' resilience and ability to keep delivering solid results with a high... Now, let's move to slide number six. Furthermore, in addition to the guidance we provided earlier, we are excited to share our first CAPEX guidance. As shown in the chart, our CAPEX for 2024 is expected to be between $220 million and $260 million. It is important to note that the 2024 CAPEX guidance does not impact the earn-out payments in the amount of R$49.6 million related to the, at Faculdades Integradas Padro PIP Guanabara, and the CAPEX presented with regard to any additional licenses. This is slide number 7. We will check our ESDB.
Speaker Change: Net revenue is expected to range between 3 billion, a $150 million <unk> and $3 billion 250 <unk>.
Speaker Change: While adjusted EBITDA consensus beta to be between one <unk> and one for <unk>, excluding acquisition that may be concluded after the issuance of this guidance.
Speaker Change: Once again, we are guiding another strong rona hacks, improving app as resiliency and ability to keep delivering solid results with a high predictability.
Speaker Change: Now, let's move to slide number six.
Speaker Change: Furthermore, in addition to the guidance we provided earlier, we are excited to share our first capex capex guidance.
Sean in the chart, our Capex for 2024 expects to be between $220 million and 260 million ads.
Speaker Change: It is important to note that 2020 for Capex guidance does not impact the earn out payments in the amount of $49 $6 million.
Speaker Change: Related to the <unk> <unk> <unk> <unk>.
Speaker Change: And the Capex presented <unk> in additional licensing.
Speaker Change: The slide number seven we will check our ESG initiatives.
Unknown Executive: Our company's dedication to sustainability and environmental care is exemplified by a remarkable achievement. Annually, our photovoltaic plants contribute to, 6,341 megawatts hour units of power generation capacity, showcasing our significant investment in renewable energy. Additionally. Sixteen education institutions now have, Santos, Luis Blanco, Lucas Nagano, Luis Blanco, Luis Blanco, Luis Blanco, Luis Blanco, Luis Reflecting our commitment beyond corporate, not only, This integration of sustainable energy source has enabled 100% of our education operations to operate completely free from greenhouse gas emissions. Associated with Electricity Company.
Speaker Change: Our company's dedication to sustainability and environmental care is exemplified by our remarkable achievements.
Speaker Change: On a photovoltaic bans contributes to fix.
Speaker Change: <unk> thousand 341 megawatts hour units of power generation Capex.
Speaker Change: Showcasing our significant investment in renewable energy.
Speaker Change: Additionally, 60 education institutions now have.
Speaker Change: Installed photovoltaic plants, reflecting our commitment beyond corporate borrowers not.
Speaker Change: <unk>.
Speaker Change: This integration of sustainable energy source has enabled a 100% of our location operations to operate completely free from greenhouse gas emissions associated with electricity consumption.
Speaker Change: These accomplishments highlight our commitment to creating a greener more sustainable future that the backs of our stakeholders.
Unknown Executive: These accomplishments highlight our commitment to creating a greener, more sustainable future that impacts our stakeholders and employees. With 9,680 employees, our workforce represents diversity and inclusion at its core, highlighting our commitment to promote equality and opportunity for minority communities. Additionally, 58% of our workforce consists of male employees, reflecting our dedication to gender, diversity, and empowerment in the workplace.
Speaker Change: Yes.
Speaker Change: With $9 680 employees, our work for represents diversity and inclusion.
Speaker Change: At its core highlighting our commitment to promote equality and opportunity for minority communities.
Speaker Change: Additionally, 50% of our workforce will cease the mailing points, reflecting our dedications with gender diversity and empowerment in the workplace.
So 45% of leadership roles in our company are held by women.
Speaker Change: <unk> growth of over four percentage points over last year.
Unknown Executive: Also, 45% of leadership roles in our company are held by women, reflecting a growth of over 4 percentage points over last year. This is reinforced by our public commitment to have, by 2030, 50% of our leadership team be occupied by women. In our governance structure, we prioritize transparency, accountability, and equality in decision-making. Afya has 36% of its board of directors composed of women. More than 36% of our board members are independent, ensuring diverse viewpoints and fairness.
Speaker Change: This is reinforced by our public commitment to half by 2030, 50% of our leadership team occupied by wind.
Speaker Change: And our governance structure.
Speaker Change: <unk> transparency accountability and equality in the decision making process.
Speaker Change: <unk> has 36% of our board of directors from pools by women more than 36% of our board members are independent ensuring diverse viewpoints and fear oversight.
Speaker Change: Our dedication to health reaches far beyond our organization extending to the communities we serve.
Speaker Change: Since 2019, we have offered 2 million preclinical consultations, describing we have healthcare disability for everyone.
Unknown Executive: Our dedication to health reaches far beyond our organization and many others. Thank you. Thank you.
Speaker Change: By 2023, our progress that we have graduated over 20000 physicians and reaching out care services within our communities.
Luis Andre Carpintero Blanco: Since 2019, we have offered 2 million free clinical consultations, striving to enhance healthcare accessibility for everyone. By 2023, our programs will have graduated over 20,000 and reached healthcare services within our community. Furthermore, our platform provides over 32 million medical access points to help in decision-making for medical professionals. These achievements resonate profoundly with our stakeholders and investors, reflecting our comprehensive approach to responsible business management. Now I'll turn the call over to Luis Blanco and Afya Cepo to give more follow-on to our financial operational methods. Thank you. Thank you, Virgilio, and good evening, everyone.
Speaker Change: Furthermore, our platform provides over 32 million magical access points to help with decision making format implemented.
Speaker Change: In conclusion, these achievements resonate profoundly with former stake holders and investors reflect our comprehensive approach to responsible business practices now.
Speaker Change: Now I'll turn the call over to use local office CFO to give more color into our financial and operational metrics. Thank you.
CFO: Thank you Sheila and good evening everyone.
Speaker Change: Slide number nine.
Speaker Change: Now guide us through the discussions of the financial highlights of the fourth quarter.
Speaker Change: With great pleasure I presents another strong quarterly results for <unk>.
Speaker Change: Adjusted net revenue for the fourth quarter of 2023 reach at 730 meter <unk>.
Speaker Change: Marchi and <unk>, 3% increase compared to the same period of the prior year.
Speaker Change: Furthermore, in 2023, adjusted net revenue reached at <unk>.
Luis Andre Carpintero Blanco: Slide number nine will now guide us through the discussions of the financial highlights of the fourth quarter. With great pleasure, I present another strong quarterly result for us. Adjusted net revenue for the fourth quarter of 2023 reached 730 million reais, marking a 23% increase compared to the same period of the previous year. Furthermore, in 2023, adjusted net revenue reached 1,874 meters in radius, reflecting a 24% surge over 2020. This group's trajectory can be attributed primarily to higher tickets in matching courses. Blanco- Buchanan County.
Speaker Change: <unk> thousand 874 meter re ups.
Speaker Change: Reflecting a 24, we're saying search over 2022.
Speaker Change: This growth trajectory can be attributed primarily to higher tickets and Matthew of course.
Speaker Change: Maturation of medical seats acquisitions of <unk> and <unk>.
Speaker Change: The continued application of segment growth.
Speaker Change: And diesel service performance.
Speaker Change: Adjusted EBITDA for the fourth quarter of 2023 saw a 19% increase reaching 289 meter reacts.
And adjusted EBITDA margin.
Speaker Change: 39, 6%.
Speaker Change: For the full year adjusted EBITDA amounted to 1166 meter reacts reflecting 21% decrease.
Luis Andre Carpintero Blanco: Operations off of Medical Citi are being continued. The Acquisitions of UNIMA and FCM Jaboto. Continued Educational Segment Role, and Distel Service Performance. I just attended the fourth quarter of 2023 saw a 19% increase, reaching 289 million reactors, with an adjusted EBITDA margin of 39.6%. Four-year adjusted data amounted to R$1,166, reflecting a 21% increase.
Speaker Change: And the adjusted EBITDA margin of <unk>.
Speaker Change: Eight 6%.
Speaker Change: Representing a marginal decrease of 90 basis points compare to 2022.
Speaker Change: These reductions can be attributed to factors such.
Speaker Change: Mix up net revenue with higher participation soft consumer application segments.
Speaker Change: And launch of <unk> in the third quarter of 2022.
Speaker Change: That's our SKU in early stage of maturation.
Luis Andre Carpintero Blanco: Witt and Jessica David Dalmaji are 40.6%, representing a marginal decrease of 90 base points compared to 2020. Reductions can be attributed to factors such as mix of net revenue with higher participation of continuing education sector and launch of Four Miles Medical Campus in the third quarter of 2022, which are still in the early stage of maturation. However, in each semester until full maturation, revenues will increase offsetting the impacts of the fixed costs of the operation. Transitioning to the next slide.
Speaker Change: However in each semester Q.
Speaker Change: Q2 operational revenues increased offsetting the banks of the fixed costs.
Speaker Change: <unk> operations.
Speaker Change: <unk> to the next slides.
Speaker Change: Adjusted cash flow generation weakness, but 24% year over year increase totally a thousand in 89 Needham for 2023.
Speaker Change: The operational cash.
Speaker Change: Conversion ratio stood at 97% for 2023 270 beats are both 2022.
Luis Andre Carpintero Blanco: Adjusted cash flow generation witnessed a 24% year-over-year increase, totaling $1,089 million for 2022. The operational cash conversion Ratio stood at 97% for 2023, 270 beats above 2022.
Speaker Change: It is important to highlight that one of our Differentiators is our cash flow from operational activities.
Speaker Change: Adjusted net income for the fourth quarter of 2023 amount that's too.
Speaker Change: 164 meter reais, marking a 28% increase over 2022.
Luis Andre Carpintero Blanco: It is important to highlight that one of our differentiations is our cash flow from operational activities. Adjusted net income for the fourth quarter of 2023 amounted to R$164 million, marking a 28% increase over 2022 for the four-year adjusted net income, which is 591 million real. Reflecting 11% year-over-year income, our adjusted EPS witnessed a robust expansion, with 28% growth for the quarter. Three yeses and 37 cents for the year, reflecting an 11% increase year-over-year.
Speaker Change: For the full year adjusted net income reach it perhaps not the 91 meter rates, reflecting 11% year over year increase.
Speaker Change: Our adjusted EPS weakness or boost exploration.
Speaker Change: 28% growth for the quarter.
Speaker Change: Reaching six three.
Speaker Change: <unk> and <unk> 37 for the year, reflecting 11% increase year over year.
Speaker Change: This performance underscores the growth in our net income and disciplined capital allocation through business combination.
Speaker Change: Transactions to slide number 11 for a discussion of key operational metrics by business unit.
Speaker Change: Beginning with the Undergrads brothers.
Speaker Change: Our number of metros students witness.
Speaker Change: <unk> 19, where cents year over year growth, reaching more than 21000 <unk>.
Luis Andre Carpintero Blanco: This performance underscores the growth in our net income and disciplined capital allocation through business communication. Transition to slide number 11 for discussions of key operational metrics by business, beginning with the undergrad program.
<unk> with appropriate medical seats, increasing by 12%.
Speaker Change: Primarily driving by that positions and maturation of Rone hundred 40 seats in Lima in the beginning of 2023.
Speaker Change: Therefore, we will see during the optimizations by diminished Ralph indications off 40 additional medical seats are <unk> integral there's probably at home.
Luis Andre Carpintero Blanco: Our number of medical students with 19% year-over-year growth, reaching more than 21,000,000,000,000,000,000,000,000,000,000,000 Students with Approved Medical Seats increasing by 12% primarily driven by physicians and maturations of 346 in Lima at the beginning of 2020. Therefore, considering the authorizations by the Ministry of Education of 40 additional medical seats of Faculdades Integradas Padrs in the city of Guanabi, located in the state of Thank you, and And that's all for today. With our net average ticket increasing over 8% year-over-year, reaching R$8,548, compared to R$7,898 in 2012. The last graph illustrates a 24% growth in combined nutrition, reaching 3,267 million reais, up from 2,635 million reais from the prior year, 79% of which are related to men.
Speaker Change: In the city of <unk> located lead to safer by year.
Yep reach it.
Speaker Change: Medical seating on disk emphasis and <unk>.
Speaker Change: <unk> thousand 203, a proof of seats as of today.
Speaker Change: We powered nets average ticket increasing over 8% year over year, reaching 8548, <unk> compared to 7890 <unk> in 2022.
Speaker Change: The last graph illustrates a 24% growth in combined tuition fees.
Speaker Change: Reaching 3000 267 million reacts up from 2635 meter <unk> from the prior year.
Speaker Change: 79% of which are related to medicine.
Speaker Change: This demonstrates that our co location business remains and will continue to be the cornerstone of our business.
Speaker Change: In the short and the Middle <unk>.
Speaker Change: Delivering high predictable growth combined with solid profitability and cash generation.
Luis Andre Carpintero Blanco: This demonstrates that our medical education business remains and will continue to be the cornerstone of our business, in the short and the middle terms, delivering high predictable growth combined with solid profitability and cash generation. On the following page, I will present our continuing Education Matters.
Speaker Change: On the following page I will present, our continuing educational.
Speaker Change: As occasional matrix.
Speaker Change: <unk> nation, we witnessed another year of significant growth in our container educational segments.
Speaker Change: With more than 60% increase in the number of students compared to last year, reaching 4976 units.
Luis Andre Carpintero Blanco: As previously mentioned, we witnessed another year of significant growth in our continuing educational sector, with more than 60% increase in the number of students compared to last year, which had 4,976 students. Additionally, for the year, net revenues grew by 35% compared to 2022, boosted by the growth in the number of students. Moving to slide number 13 to discuss the digital service operational method, the first graph illustrates our active players, which are the ones that generate revenues in business-to-physicians, wait for continuous growth trends, and reach 226,000 paying users. Mark.
Speaker Change: Additionally for the year net revenues grew by 35% compared to 2022 boosted by the growth in the number of students.
Speaker Change: Moving to slide number 13 to discuss the digital service operational metrics.
Speaker Change: The first graph illustrates our active players.
Speaker Change: The ones that generates revenues in business to position.
Speaker Change: Wafer continuous growth trends, reaching 226000 paid users.
Speaker Change: Martin.
Luis Andre Carpintero Blanco: 11% growth compared to the last year. The second graph showcases our monthly active users, which are 268,000 users, representing around 34% of all medical students and physicians in Brazil.
Speaker Change: 11% growth compared to the last year.
Speaker Change: The second graph showcase our monthly active users reaching 268 thousands.
Speaker Change: Users representing around 34% of all match with students and physicians in Brazil.
Luis Andre Carpintero Blanco: Finally, our digital service net revenue. Almost a 20% year-over-year increase, reaching 229 million reacts. Since the beginning of 2022, we also started to break down our digital service net revenue within B2B and B2B segments, with over 191 million reais generated from B2B and more than 39 million reais from B2B, showing a 64% growth compared to the prior year. Now, I transition to my final two slides to discuss our cash and net-debt positions and provide more insights into our cost of debt. I presented the NAMP Dance Reconciliation for 2020. The cash flow from operating activities was allocated to income tax and lease payments, capex activities, and other activities, for the service of the financial tech, for our share of that problem. Alongside the additional acquisitions of 15% of FIMI, excluding the business combinations of UNIMA, we were able to generate R$391 million as free cash and reduce our net debt in the 12-month period.
Speaker Change: Finally, our digital service net revenue weakness.
Speaker Change: It was 300% year over year increase reaching 229 million of ramps.
Speaker Change: Since the beginning of 2022.
Speaker Change: <unk> also started to break down our additional service net revenue within <unk> and <unk> segments.
Speaker Change: With over 191 meter <unk> generated from <unk> and more than 39 meter reais from B to B.
Speaker Change: Showing kg.
Speaker Change: 64% growth compared to the prior year.
Speaker Change: And now I'll transition to my final two slides to discuss our cash and net debt positions and providing more insights into our cross effects.
Speaker Change: <unk> the net debt reconciliation for 2023.
Speaker Change: The cash flow from operating activities was located to income tax and lease payments capex activities for.
Speaker Change: For the service of the financial benefits.
Speaker Change: For our share buyback program alongside.
Speaker Change: The additional positions off 50% of image.
Speaker Change: Excluding the business combination Buffalo NEMA, where you were.
Speaker Change: We're able to generate 391 million reais as free cash.
Speaker Change: <unk>, our net debt in the 12 month period.
Speaker Change: Well My last night, you can observe a table showing the breakdown of our gross debt and total cost of debt considering our main decks.
Luis Andre Carpintero Blanco: On my left slide, you can observe a table showing the breakdown of our gross debt and total cost of... Considering our main debt, de Ventures, Other Financial Obligations, and Accountable Payables to Selling Shareholders, we continue to maintain a low cost of debt that remains below the city average.
Speaker Change: The Softbank transactions debentures, other financial obligations and accountable payables to Sally shareholders.
Speaker Change: We continue to maintain a low cost of debt that remains below the CDI rates.
Luis Andre Carpintero Blanco: This concludes our preparatory Front Performance, Consistent Growth, Success in All Segments, and public recognition. These are the pillars of our evolution and our mission to provide an ecosystem that integrates educational and digital solutions for the entire medical journey. We are proud of our achievements thus far, and we are excited about our future. I shall now open the conference for the Q&A session. So, if you want to ask a question, please raise your hand. Our first question will come from Mirella Oliveira, from Bank of America. Mirella, you may now talk.
Speaker Change: This concludes our prepared remarks.
Speaker Change: Strong performance consistent growth.
Speaker Change: Success in all segments.
Speaker Change: Recognitions.
Speaker Change: These are the pillars of our evolutions in our ambitions to provide an ecosystem that integrates educational and digital solutions for the entire Metro journey.
Speaker Change: We are proud of our achievements thus far.
Speaker Change: We are excited about our future plans.
Speaker Change: I shall now open the conference for the Q&A session. Thank you.
Speaker Change: So if you want to ask a question. Please raise your hand.
Speaker Change: First question will come from Ameren is data.
Ameren: So <unk> bank of America.
Ameren: You may now.
Ameren: Good evening guys. Thank you for your time I have two questions here first if you guys could comment a bit on the competitive environment for 2024, if you have seen any significant change on the Ken Bate to proceed on any region and second.
Unknown Executive: Good evening, guys. Thank you for your time. I have two questions.
Unknown Executive: First, if you guys could comment a bit on the competitive environment for 2024, if you have seen any significant change in the candidate per seat in any region. And second, what are the expectations for the Mais Magicos auction in terms of timing after the postponement? And also, does the recent change that established a cap on proposals for the big players change any expectation you may have on the final results, given that now you'll be able to submit fewer proposals? Thank you.
Speaker Change: What are the expectations on the mismatch because auction in terms of timing after the postponement and also if the recent change that established a cap for proposals for the big players change any expectation you may have on the final result, given that now you'll be able to submit less proposals.
Speaker Change: Thank you.
Speaker Change: Bill came and Alan Thanks for your question regarding your first question about the competition landscape.
Unknown Executive: Okay, Mirella, thanks for your question. Regarding your first question about the competition landscape, we just completed our intake process for the first half of 2024. Our ratio of candidates per seat was around almost six candidates per seat, so it was a very strong intake.
Speaker Change: We just completed our we've take process for first half of 2024 hour ratio.
Speaker Change: Today's perceived was around.
Speaker Change: Seeks candidates receipts, which was a very strong intake. So we have also not only the pace, but our renewal also completed so we are running as expected.
Unknown Executive: So we have also not only the intake but our renewal also completed, so we are running as expected. There is very good demand for all of our campuses around the country. So there is no change when we compare to last year. Actually, the ratio that we are seeing is even higher than before the pandemic.
Speaker Change: Very good demand for all of our campuses around the country. So no changing.
Speaker Change: When we compare to last year.
Speaker Change: Actually the ratio that we have seen is even higher than before the pandemic. So that was.
Unknown Executive: So that was how we're seeing the competition on the intake process for undergrad, medical undergrad. Besides that, we are also seeing a very strong intake coming from health programs on our campuses. I think that can be related to the new grant that now it's all the campuses working under the umbrella of Afya, so a very good campaign and a strong intake coming from all the other health programs, both on campus and online programs. So, for the second question about the Mais Mágicos 3 schedule, so we're expecting to deliver the proposal now by the current schedule by July of this year, and the answer will be only beginning of 2024, with the new change, 2025, I'm sorry. And by the new changing, we have, the change was from the previous one, we get, we got opportunities, 36 opportunities to bid in order to participate on the public bid, and now with the change that each institution can only offer for one state, that's reduced to 36, from 36 to 23 campuses that will be allowed to bid for the Mais Mágicos. So that's all the updates on this front. Okay. If I may add two points here, Mirella.
Speaker Change: We are seeing the competition of intake process for undergrad medical undergrad trusts. Besides that we have also seen a very strong <unk> coming.
Speaker Change: From health problems on our campuses I think that this can be related to the new brand that now.
Speaker Change: All the campuses working under the umbrella of Ikea. So a very good campaign and a strong intake coming for all of their other health problems, both online and on campus and online programs.
Speaker Change: So for the second question about the <unk> medical histories.
Speaker Change: Schedule.
Speaker Change: So we are expecting to deliver the proposal now by the current schedule by July of this year.
Speaker Change: And the answer will be only in beginning of 2024.
Speaker Change: With the new change that went into 25 I'm sorry.
Speaker Change: And by the new changing we have the change was.
Speaker Change: From the previous one we get we've got.
Speaker Change: Opportunities 36 opportunity to beads in order to participate.
Speaker Change: Whether the public bids and now with the change that each institution can only offer for one state that's reduced to 36 from 36% to 23.
Speaker Change: The campuses that we will be allowed to bid for device medical history. So.
Speaker Change: That's.
Although the depth debates on this dropped okay.
Unknown Executive: The first one regarding the mathematics: yes, we can bid for a less campus, but all the competitive players can also bid for a less campus. So at the end of the day, we'll be less competitive than we thought before. And regarding the first question, I would also like to add that we established prices to increase around 4.9% when we started our intake process, but now we can see that on average, we should see price increases of more than 5.8% considering the maturation of new tickets and also the ticket increase across all campuses. Um, that's it.
Speaker Change: To find him you know on the first one regarding <unk> medical's, yet they can be from Blackstone, Kansas, but all the competitive players also can be temporary so, indiana today will be less competitive, but if they thought before.
Speaker Change: And regarding the first question I would also like to add that we established the prices around four between Queens around four 9%. When we started I won't take process, but now we can see that the one that which we should see pricing weakness over against five 8%.
Okay, Gary on the maturation of the new chicken.
Speaker Change: Also on the debt.
Speaker Change: Ticketing space firewall, Kansas.
Speaker Change: Oh, that's it.
Speaker Change: Thank you guys.
Unknown Executive: Thank you guys. The next question will come from Jessica Mehler from JP Morgan. Jessica, you may now jump in. Hello, good evening. Thank you for taking my questions. I have two as well.
Yes.
Speaker Change: So the next question will come from Jessica <unk> from Jpmorgan.
Jessica: You May now talk.
Jessica: Hello, Good evening. Thank you for taking my questions I have two as well. So first what is the outlook for digital education margins in 'twenty to 'twenty four.
Unknown Executive: So first, what is the outlook for digital education margins in 2024? And also, should we continue to see continued education expanding in 2024? What is the outlook for this segment? Thank you. Hi Jessica, it's Blanco speaking here.
Jessica: And also should we continue to see continued education expanding in 2024.
Jessica: What is the outlook for this segment. Thank you.
Speaker Change: Hi, Jess guidance, both with speaking here I am.
Luis Andre Carpintero Blanco: As a whole, we see margin expansions in our three segments during 2024. Starting with continuing education, we see that we're going to extend margins because we are having leverage, leveraging, and operational operations. We establish new campuses, this campus being filled with students, so we can get more efficient on this campus regarding our graduate course. Regarding our digital service, we see that with expansions of our service, expansions in our B2B users, and new B2B contracts, we are going to see increasing margins year over year as well. And in other graphs, we have the fact that we finalized the integration of Unim last November, so it will be the first year that will have 100% of FITs having Unim slash FITs FSM Jaboto being 100% integrated.
As a whole.
Jess: We see in our three segments.
Jess: Margin expansions.
Jess: During 2034, starting with the continuing vocational what we see that we're going to spend margins because we are.
Jess: Having leverage.
Jess: Leveraging operational leverage our operations, we established new campuses discomfort being fulfilled.
Jess: With students. So we can get more efficient on this campus.
Jess: Regarding our graduate course regarding our additional service once we see that we have that <unk> all of our service techs Finkelstein, our b to B users and new B to B.
Jess: <unk>, we are going to see increasing margins year over year as well as in other glass, we have their facts NASA, we finalize the integration is off with full needs.
Jess: In last November so it will be the first year that will be a 100% of pits have been.
Jess: When he Ma slash.
Jess: Pizza is Europe.
Jess: FSAM as about tone being 100% integrated.
Luis Andre Carpintero Blanco: So we're going to have expansions in these three segments. And on top of that, at the coding level, we established last year our zero budget projects, and we're going to run our zero budget during 2024. So with these scenarios, we are comfortable to give this guidance for 2024, whereas implied expansions in terms of EBITDA margins for 2024 if you compare to 2023. Jessica is just adding here.
So we're gonna have expansions on these three segments and on top of that on holding our <unk>.
Jess: Level, we establish.
Jess: Last year the hour zero equations.
Jess: Projects, and we're going to run our zero vision blurry.
Jess: Our 2024, so we applaud these scenarios we're comfortable to give this guidance of 2024, where is your clients.
Jess: Expansions in terms of soybean EBIDTA margins for 2024, <unk> compared to 2023.
Speaker Change: That's <unk>.
Speaker Change: Jessica just adding one year so based on our guidance here, that's our top line is moving closer to 12%.
Unknown Executive: So based on our guidance here, that our top line is moving close to 12%, around 12%, and the bottom line growing 16% year over year. That is a combination of around 10% growth coming from undergrads, year over year, pure organic, 50% coming from volume, and 50% coming from tuition. On continuing medical education, it's around 20% organic growth and digital services around 30% growth expected to 2024. In all the three segments, we are seeing margin expansion as expected also in our guidance. Very clear. Thank you very much.
Speaker Change: Round, 12% in the bottom line.
Speaker Change: Growing 16% per year over a year that is a combination of around 10% growth coming from undergrad.
Speaker Change: Pure organic 50% coming from volume, 50% come from tuition.
Speaker Change: On continuing that co location, it's around 20%.
Speaker Change: Organic growth in digital services around 30% growth expected to 2024 and all of the three segments.
Speaker Change: The margin expansion as expected, but also in our guidance.
Speaker Change: Very clear. Thank you very much. Thank you. Thank you.
Unknown Executive: Thank you. Of course. Thank you. So just a reminder, if you want to ask a question, just please raise your hand. The next question will come from Lucas Nagano from Oregon Stanley. Lucas, you may now go.
Speaker Change: So just a reminder, if you run out of the passengers. Please raise your hand. The next question will come to kind of look at Sangamo film Morgan Stanley and then they can lean out though.
Sangamo: Good evening, thanks for taking our questions we have two questions.
Unknown Executive: Good evening. Thanks for taking our questions. We have two questions. The first one is related to digital services growth. B2B seems to be growing at a consistent rate, but there was an acceleration in B2B sales growth in Q4 compared to the rest of the year.
First one is related to digital services growth.
<unk> seems to be growing at a consistent rate but.
Morgan Stanley: There was there was an acceleration in <unk> sales growth in Q4 compared to the rest of the year.
Unknown Executive: Can you give us some color on the initiatives in B2B, the challenges to help us better understand the growth rate from there? And the second question is related to M&A. Could you comment about a potential return in M&A, like how active is the pipeline if discussions are somewhat returning as rates fall? And if you see upside in the current multiples? Thanks. Hi Lucas, Virgilio here.
Morgan Stanley: Can you give us some color on the initiatives one b to b the challenges to help better understand.
Morgan Stanley: And the growth rates from there.
Morgan Stanley: And the second question is related to M&A.
Morgan Stanley: You could comment about a particular return in M&A like how active is the pipeline. If if discussions are somewhat returning as rates fall and if you see upside in the current multiples. Thanks.
Speaker Change: Hi, Lucas.
Lucas: <unk> here, so first on the <unk> business six efficient contracts.
Virgilio Deloy Capobianco Gibbon: So first, on the B2B business to physician contract. I think that the constant growth is much more related to selling and upselling our solutions, as we have a very large penetration under the, or at least our biggest penetration solution, White Book from PadMeds. That's almost 80% of physicians between one to five years after graduation that are using this solution.
Speaker Change: I think that the content growth is much more related to our cross sell in of upsetting our solutions as we have a very large penetration.
Speaker Change: Or at least our biggest penetration solution based widespread from pad meds as almost 80% of physician between one to five years. After graduation that are using the solution. So the opportunity here is more upselling of all of our solutions and also cross selling.
Virgilio Deloy Capobianco Gibbon: So the opportunity here is more upselling of other solutions and also for upselling continuum education for this, for these clients, for these physicians. On B2B, we are collecting the hanging fruit from the lending expanding strategy. So, as we said in the past that we were just experiencing our relationship with big pharma companies, now we have multiple contracts with very large companies, and we also get higher value from each company.
Speaker Change: Pitino, Mexico location.
Yes.
Speaker Change: It's kind of spread the sufficient on <unk>.
Speaker Change: We are collecting the hanging fruit.
Speaker Change: From the landing expanding a strategy. So as we said in the past that we are just experiencing our relationship with big pharma companies now we have multiple contracts with very large companies and we also we saw higher value.
Speaker Change: From each caller, so the bto b quarters. This year grew more than 60% pure organic so it's a huge opportunity.
Virgilio Deloy Capobianco Gibbon: So the B2B contracts this year grew more than 60% purely organically, so it's a huge opportunity. And the sales, the opportunity that we are seeing in our pipeline for 2024 is even higher here. So we're keeping a very good trend, and the growth will be boosted for sure by B2B contracts in 2024. Yeah, and if I may add, with some questions that we received during the chat here about the B2B growth in the digital segment here over here, what is driving the B2B growth in that, if I may add, Virgilio, we saw in 2023 that the increases in terms of contracts within the So we are hired by pharmaceutical companies, both the international ones and the national ones. They are hiring us to do campaigns about certain drugs that they have in their portfolio to do these marketing campaigns for them using our apps and our sites as the channel to reach the right physicians at the right time.
Speaker Change: And the sales guide other than the opportunity that we see on our pipeline for 2024 is even it's even higher so we're keeping a very good track.
Speaker Change: And the growth will be boosted for sure by B to B contracts along 2024.
Speaker Change: Yeah, and if I may add some with some a question that we.
Speaker Change: We received two the shafts here about the <unk> growth.
Speaker Change: On the digital segments, a year by year, what is driving the reach of the ROE on that Oh, if I may ask behavior.
Speaker Change: We're going to.
Speaker Change: We saw the reach of our lines and you treat the increases in terms of contracts within the pharmaceutical.
Speaker Change: These are C come from products that were all campaign products so were higher by the.
Speaker Change: So companies that have been.
Speaker Change: The international ones in the National and international ones.
Speaker Change: They are high us to do campaigns suffer campaigns about.
Speaker Change: Southern drug stats, they have under their portfolio to do these.
Speaker Change: Marketing campaigns for them using.
Speaker Change: Our our our apps and our recites as the channel to reach the right physicians at the rack Stein. So these kind of products drive our growth during 2023 and so on floor.
Luis Andre Carpintero Blanco: So these kind of products will drive our growth during 2023 and for the next year, for 2024. On top of that, we launched at the end of 2003 some recurring products to the pharmaceutical companies as well to provide insights into their sales on those. These products didn't get traction in 2023, but we are excited for the prospect of this offer for pharmaceutical companies. And I think we will see additional growth in 2024 with this new product that we launched that we call Rx Insights. And just to finish your question again about M&A, we are seeing, do you want to go? Yeah, sorry, I again forgot the question about M&A.
Speaker Change: And next year for 2024 on top of that.
Speaker Change: We launched it at the end of 2000 and breed some recurrent products too.
Speaker Change: The park is surgical component as well.
Speaker Change: To provide insights into our sales.
Speaker Change: On that.
Speaker Change: This product Didnt get.
Speaker Change: Attractions during 2000 and injuries, but two we are excited for that.
Speaker Change: The prospective off these offered for the pharmaceutical companies.
Speaker Change: And I think we.
Speaker Change: We have this additional growth.
Speaker Change: Puzzle for us.
Speaker Change: This new product that we launched that we call our Rx insights.
Speaker Change: English is finishing your question again about the M&A.
Speaker Change: I have seen.
Speaker Change: Oh, yes, sorry, I forgot I forgot the question about M&A.
Speaker Change: Talking about M&A.
Luis Andre Carpintero Blanco: Talking about M&A does not stop; we're always talking with the targets as we have a very specific niche of targets. Just remember that our targets are just the institutions that have, at maturations, more than 60% of their revenues coming from the medicine business. We always come and go with targets, and we are still comfortable with the target that we've put in the market to grow to 200 seats per year. About multiples on that, we don't like this AV per seat multiple; we prefer always to see a target within AV per bid and evaluate seats through IRR from these acquisitions to have more than 20% leverage IRR on each transaction. But I think the next deal would have a multiple that was below the last acquisition that we have, that was Unima slash FCM Jabotan.
Speaker Change: <unk> does not stop our.
Speaker Change: And we always talking with the targets as we are have a very.
Speaker Change: Specific and knee chop off targets, just remember that our targets is just the institutions that have all demonstrations more than 60% of their revenues coming from the medicine business.
Speaker Change: Always.
Speaker Change: <unk> com and goes with targets as we skew.
Speaker Change: Still comfortable with the target that we've.
Speaker Change: Put that in our markets to grow to 200 seats for a box of multiples.
Speaker Change: On that Oh, we looked like these.
Speaker Change: Per seats.
Speaker Change: Multiple we prefer always to see.
Speaker Change: All targets, we've been <unk> and.
Speaker Change: Evaluate seats to IR are from these acquisitions.
Speaker Change: To have more than 20% on leverage IRR on each transactions.
Speaker Change: But I think.
Speaker Change: The next.
Speaker Change: The deal.
Speaker Change: Would have multiple.
Speaker Change: That was below the lesser conditions that we have that wasn't an EMR slash SCM ciabatta I'll say that.
Luis Andre Carpintero Blanco: I'll say that it's our expectation to have this kind of multiple in the next transaction, but we are always talking and always looking for opportunities to best allocate our capital. Very clear, thank you Luis, Virgilio, Renata. Thank you, Nagano. The next question comes from Lucca Marquezini from WCAO. Lucca, you may now ask. Hey, good evening, everyone.
Speaker Change: Each seller expectations to <unk> to have this kind of.
Multiple in the next transactions, but we're always talking.
And always look at opportunities to bass allocate our capital.
Speaker Change: Very clear thank you Louise Rishi do not.
Louise: Thanks, Adam.
Speaker Change: The next question comes telecom, a convenient family apparel.
Speaker Change: You may now.
Speaker Change: Hey, good evening, everyone. Thank you for taking my questions.
Virgilio Deloy Capobianco Gibbon: Thank you for taking our questions. Just two questions from our side. The first one, if you could just provide an updated view on the potential authorization of new seats via injunctions and then how this could impact the competitive landscape in the regions where the company operates. And then the second question: if you consider the midpoint of the guidance for 2024, this implies an adjusted EBITDA margin expansion for the year. Can you please comment on which of the segments should be the most responsible for this expansion? Thank you. Hi Lucca.
Speaker Change: Two questions from our side. The first one if you could just provide an updated view on the potential of origination of new seats being judgment and then how this could impact the competitive landscape in the regions, where the company operates and then secondly second question. If you consider the midpoint of the guidance for 'twenty 'twenty four does implies an adjusted EBITDA margin expansion.
Speaker Change: For the year can you please comment on which of the segments with the most respect or spin responsible for this expansion. Please thank you.
Speaker Change: Yes.
Speaker Change: Hi, Luca.
Luis Andre Carpintero Blanco: About the new seat authorization from the injections here. So we still don't have like a final result from the Supreme Court in this in this manner here. But what I expect is that by the end of the day, independently, what the final response from the Supreme Court will be, the Minister of Education will have to approve all the additional seats. So what I believe is that the combination between the public policy that they're aiming to expand, more medical seats for the countryside through Mismatch Street combined with any alternative way that can be from the legal side, that is, will be the final solution can be combined with what the Minister of Education is expecting to have as a total expansion for the sector.
Speaker Change: The new seats authorization from the injections here so.
We still don't have.
Luca: Like a final results pro form on the Supreme Court.
Luca: This matter here.
Luca: But.
What I expect is that by the end of the day independently.
Luca: <unk> is.
Luca: The final response from the Supreme Court will be the minutes application that we will have.
Luca: And feel.
Luca: And to approve all of the additional seats. So what I believe is that.
Luca: The combination between the public policy that are aiming to expand.
Luca: More medical seats.
Luca: For our country side towards the mathematical III combine those any alternative way that can be from the legal side.
Luca: That is what will be the final solution can be combined what the minutes of application is expecting to have a total expansion from effective. So we are seeing that the total Timothy.
Luis Andre Carpintero Blanco: So we are seeing that the total estimative by what they released in the past was around nine to 10,000 additional seats. If they come from an injection of additional seats from the other alternatives on my medical street, my medical street, I think in the long term, I think there will be added something close to 10,000 seats in five to six years. That's the time when, well, you have to get the final answer, you have to build the campus or have to have received the final So by the end of the day, that is, I think it will have the largest impact on around nine to 10,000 seats in all of the cities that the Minister of Education is aiming to have additional programs or additional seats as an increase in supply for the entire country.
Luca: By what they released the battle of around nine to 10000 additional seats.
Luca: Come from injection for additional seats for all the other alternatives for them is Mexico <unk> mismatch with three I think in the long term I think it could be added something close to 10000 seats.
Luca: Five to six three years that Thats the time that well you have to get the final answer you'll have to build the examples I have to have received the final visit to get the authorization. The normative authorization and then we stopped all the intake process.
Luca: So by the end of the day, because I think it will be the.
Luca: The largest impact around nine to 10000 seats in all of the theaters that munis applications aiming.
Luca: To have additional brought our additional seats.
Luca: As a.
Luca: Increase of supply for the entire country.
Luis Andre Carpintero Blanco: Okay, and Lucca, Blanco speaking, taking your question about the margin expansions for 2024. As Virgilio mentioned before, in terms of the top line, we can expect around 10% in the undergrad segment, around 20% in the continuing education, and around 30% in terms of further expansion in the top line. Coming to the expansions in these three segments, giving a little more color on that. For the undergrads, we can expect Marston expansions because it will be the full year, the first full year that we're going to have UNIMA slash FCM Jaboto fulfilled 100% of the year under our model. So we did the migration of their operations to our shared service. We will implement our national curriculum in UNIMA in this first semester of 2024.
Luca: Okay.
Luca: And look at block with speaking activities neurotic question about.
Luca: At March <unk> 2024.
Luca: Essentially information before.
Luca: The top line, we can expect around 10% in the undergrad segment around 20%. Meanwhile, continue educational and around 30% in terms of these.
Luca: These four <unk> patients in the topline.
Luca: Coming to the expansion on the CE in these three segments are keeping up a little more color on that on the undergrads, we can expect.
Luca: Margin expansion because these will be the full year. The first of all we are that's what we're going to have oney EMA.
Luca: Slash.
Luca: FCS Chubb lockdown.
Our full field are 100% of the year, they're all of our modules. So we did we did demonstrations of their operations to our strip some of us.
Our hour.
Luca: National Cherico.
Luca: <unk> on EMR in this first day of 2024.
Luis Andre Carpintero Blanco: So we're going to pass one year, the entire year, with them under our structure, so we can expect expansions in margins on the undergrads because of that. On the continual educational segment, what we're doing is the operational leverage of the segment itself. We've ended 2023 with a growth of roughly 35% in these segments. We have new locations of continual education. And we're fulfilling these units with students. We have a very good, strong demand for our graduate courses as a path to get the specialization title.
Luca: No.
Luca: We're going to get that asset.
Luca: One of the year.
Luca: Prior year.
Luca: We have now we have under our structure. So we can expect in that next based on low margins on the undergrads.
Luca: The cost because of that Oh.
Luca: Continual educational segments.
Luca: What's where are gleaned athletes.
Luca: The operational leverage of the segment itself.
Luca: And that's the 2023 with a growth.
Luca: Roughly.
Luca: 5% in these segments.
Luca: We have new locations.
Luca: Our continuing obligations.
Luca: And we're fulfilling the these units.
Luca: Students.
Luca: We have a.
Luca: Good prepared goods is strong demand for our graduate courses as a path to pour down to between gas.
Luca: <unk> vital so our offer is very strong and is getting very attractions we've.
Luis Andre Carpintero Blanco: So our offer is very strong, and it's getting better attractions within the positions. And with this increase and these new units being fulfilled, we're going to gain operational leverage and increase margins. And digital itself, as we are still growing both B2P and B2B, we can get these more efficient and get more margins as well.
We've seen the physicians at with.
Luca: These increased sand this new with new units being fulfilled.
Luca: We're going to gain operational leverage and increase margins.
Luca: And these are itself.
Luca: We are we're still growing both b to B and B to B.
Luca: We can get these.
Luca: More efficient and get more more margins as well all of them being supported by these Ah.
Luis Andre Carpintero Blanco: All of them being supported by this zero budget product, a project that we implemented for the budget of 2024, and we are very confident that we can gain some efficiencies at the holding levels in each one of the segments that will be supported. And that's why we established this guidance that is inclined at the midpoint of the guidance, as you mentioned, margin expansion. Luca, just an additional point about the dynamic of undergrad here. If you remember, during the first three quarters, we were losing margin, gross margins on the undergrad segment. And the reason for that was not only because of the position, but most of them come from the maturation, the maturation of the six mathematical campuses that were launched in 2022. In 2021, they were just maturing as they had only 60 seats. The margin coming from these campuses was very low.
Luca: Zero version budget product a project that we implemented.
Luca: For the Bush I talked 2000 before they actually are very confident that we can gain some efficiencies on the holding levels in each one of those segments.
Luca: That will be support and that's why we are.
Luca: Tablets and his guidance that is implied in the midpoint of the guidance as you mentioned.
Luca: Our margin expansion.
Luca: Luka, just an additional point about the dynamic on undergrad here to remember.
Luka: During the three first quarters, we were losing.
Luka: Margin gross margins on the undergrad segment and the reason up there for us not only because of the acquisition when most of them come from the maturation. The maturation of the six months medical's campuses that was largely in 2022.
Luka: 1020 mind, you our maturity as they have only 60 seats.
Luka: The margin coming from these campuses was very low there that the gross margin coming from this chemical is lower and then in the fourth quarter.
Luis Andre Carpintero Blanco: The gross margin coming from this campus was lower. And then in the fourth quarter, if you take a look at the spreadsheet that we are releasing also together for our financial statement, this is the first quarter that we have a higher gross margin on the undergrad segment when you compare it to the fourth quarter of 2022. So that's a very good trend that will keep the same trend in 2024, but also pushing that will be pushing for the other two segments as Blanco mentioned. Flaherty
Luka: Take a look on the spreadsheet that we are releasing also together for our financial statement is the first quarter that we have a higher gross margin on the undergrad segment. When you compare to the fourth quarter 2022. So that's a very good trend that will dip.
Luka: The same trend in the 2024, but also closing that will be a push it also for the other two segments as blown Commission.
Unknown Executive: That's very clear. Thank you guys. Thank you, Lucca. So just a reminder, if you want to ask a question, please raise your hand. Our next question comes from Leandro Vazquez from Spain. Leandro, you may now ask. Yeah, thank you. Thank you, Renata. Hello, guys. Good evening. And on our side, If you could comment a little bit on the latest intake cycle you have for prep courses, how you saw competition, the new strategy for Medicell, and how the acceptability for the students was? As much as you could share, I think it would be helpful to hear.
Luka: Great.
Speaker Change: That's very clear. Thank you guys. Okay. Thank you Luca.
Speaker Change: So just a reminder is one to ask a question. Please raise your hand. Our next question comes from land Lactoscope Bank.
Speaker Change: And you May now ask yes.
Speaker Change: Thank you and thank you Ann Anthony Hello, guys. Good evening, just one question on our side.
Lactoscope Bank: It could come in a little bit on the latest intake HEICO Hasbro prep courses, how you saw a competency and a new strategy for me to sell a house acceptancy for from the students.
Speaker Change: Students as much as you could share I.
Speaker Change: I think it would be helpful to hear thank you.
Unknown Executive: Thank you. Leandro, okay. Leandro, thank you for your question here. So let's, we are not tracking here only the prep co-authentic, but not for residency, but also all the prep for title that we are offering with another brand here that is Papers, the Cardio Papers, not only for residency, but also for title. But they can look product by product on the MedCell; there's a focus on residency prep programs. The fourth quarter was the first quarter since the last two years that had a higher intake and higher sales volume when you compare it to the last year.
Speaker Change: Yeah.
Speaker Change: Okay. Andrew Thank you for question here, So that's a we.
Speaker Change: We are not tracking here only debt trap costs intake, but multiple for our residents, but also all the prep for title.
Speaker Change: That we are offering with some other brands here that is.
Speaker Change: Papers the cargo papers.
Speaker Change: Not only for our residents, but also for Tycho, but taking a look product by product on the mat sale or is that a real focus on residency Brad.
Speaker Change: <unk>.
Speaker Change: The fourth quarter was the first quarter since in the last.
Speaker Change: Two years that will have a higher intake and higher sales volume when you compare to the last year on the other hand.
Unknown Executive: On the other hand, for title prep, we are boosting our operation here when you compare it to last year, growing more than 30% year over year. When you take a look at the papers and all, all of this, it's combined in our digital operation. It's one of the reasons why we will also leverage margins in 2020.
Speaker Change: For Phyto craft.
Speaker Change: We are boosting our operation in the U S compared to last year growing more than 30%.
Speaker Change: Over a year.
Speaker Change: When you can take a look forward on papers in all all of this is combined with our digital operation.
Speaker Change: It's one of the reason why we also average margins along 2024.
Speaker Change: Okay. That's great. Thank you so much.
Unknown Executive: Okay, that's clear. Thank you so much. Thank you, Leandro. And our next question comes from Lucas Nagano from Oregon Studies. Lucas, you may now go on. Thank you, Renata. I have a follow-up question on the Supreme Court debate.
Speaker Change: Thank you Andrew and our next question comes from Alex I sat down with some art and science.
Luca you mean, Aldo thank you.
Alex: Follow up question on the Supreme Court debate.
Virgilio Deloy Capobianco Gibbon: The vote by Andre Mendonça seemed a little open to different scenarios to us. First, does it count as a vote against the injunctions? And second, you commented on some things about reviewing the Mais Mágicos policy. Does that imply any change to the current Mais Mágicos program taking place now? Hi Lucas. We are seeing the Danderman-Dolsa vote as a very strong argument against not just the mismatched history but all the noise that is coming from the injustice. So what we still have to wait for is another vote. If we have another vote against the modulation, that is, the modulation to the second modulation where the Minister of Education is allowed to analyze some injunctions process after some stage, that will finish all the questions about that. But one thing is true, all of the changes in Mathematica 3 are creating some noise.
Alex: By that I mean don't seemed a little open to different scenarios for us.
Alex: First this is counted a vote against the injunctions and second.
Speaker Change: And in some things about reviewing the metrics policy.
Speaker Change: Does that imply any change to the current metrics programs taking place now.
Speaker Change: Hello.
Speaker Change: We are seeing.
Speaker Change: Does <unk> and those are both as a very strong argument against not demised magical three but all of the noise that is coming from being sections.
Speaker Change: So what we still have to wait this another boat if we have another bolt against the modulation that is the modulation.
Speaker Change: The second modulation that we're the midst of Acacia is allow us on a life some injections process after some stage.
Speaker Change: That will finish all the questions about that but one thing it's true.
Speaker Change: All of the change is almost magical III is creating some noisy.
Virgilio Deloy Capobianco Gibbon: I hope they fulfill their schedule now and we can release our proposals by July this year and wait for the final answer at the beginning of 2025 to start working on the new campus of the new programs released to the market. Okay, Virgilio, thanks. We do not have any other questions, so if you want to have a follow-up question, please just contact our IR team. We'll be happy to help you. Have a good night, everyone. Thank you.
Speaker Change: I hope they.
Speaker Change: <unk> fuel their schedule now and we can.
Speaker Change: In our release, our our proposals by July this year and wait for the final answer in beginning of 2025 to stop work and the new campus are the new problems released to the market.
Speaker Change: Okay. Thanks.
Speaker Change: We did not have any other questions. So if you want to have a follow up question. Please on jet contract.
Speaker Change: Our IR team will be at several fields.
Speaker Change: Good night everyone.
Speaker Change: Thank you.