AFYA - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for joining us for Afya's conference call. I'm here today with Afya's CEO, Virgilio Deloy Gibbon and our CFO, Luis Andre Blanco.

During today's presentation, our executive will make forward-looking statements.

Forward-looking statements can be related to future events, future financial or operating performance, known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those contemplated by these forward-looking statements.

Forward-looking statements in this presentation include, but are not limited to, the statements related to the business and financial performance, expectations and guidance for future periods or expectations regarding the company's strategic product initiatives and its related benefits. more Exchange in Commission. those the filings include and Securities risks fully our described with These data. The based available the on statements the forward-looking in information to this us presentation are as

predictions You of any should to forward-looking law. required any except update on not them obligation future and we rely events, disclaim as by statements as

accordance or measures intended to in be addition, reference financial IFRS. non-IFRS results not In with substitute measures on the in comparable has are non-IFRS isolation as financial presentation management may this a of call. the measures. reconciled These measures financial This considered IFRS most prepared this directly to

Now begin let Deloy will with Virgilio Slide to #X. the me call over who Gibbon, our CEO, turn

Virgilio Deloy Gibbon

for for and half Thank to and results. you, XXXX Henat, thanks second today conference first our call everyone us joining quarter for

Let's highlights. turn with performance our

growth operating First, to X.XX, robust followed million, a compared increased Meanwhile, increase net in period XXX performance. year-over-year, an BRL million, million, an increase of company's We a which by of XX% marking year. income XXX the a BRL activities from driven BRL totaling over year-over-year BRL XX.X%, previous BRL cash operational an reflects XX% EPS adjusted adjusted XXX net XXX flow XX% to almost year. Adjusted growth delivered same with over last million the margin solid reaching EBITDA revenue reached XX%, our the climbed XXXX. EBITDA XXX bps by XX% adjusted impressive

cash of quarter. cash the of position BRL conversion XXX a at operating reached close robust Our million the with XX%

X,XXX update seats operational for Medical our reached Moving approved seats. quarter. to the

Unidom X,XXX growth reached to mention the of second year. of quarter also in approved now seats the a of our has have and X% to students Additionally, our the the total addition medical XXXX, XX number as reached a we UNIMA authorized with today. acquisition of quarter of important compared at It's third recent previous of volume that XX,XXX, seats of representing

the also the XXXX. by revenue We XX% of for XX% result rate with first year-over-year, million. first segment XXXX, half growing net period XX revenue in with to in education business, XXX with solutions net months a X concluding our results progress significant impressive demonstrated over million a observed revenue of net of BRL our of period continuing compared the Similarly, of increase prep X-month medical a BRL in

business and like prep as prep practical on in have segment. the margin segment program, now X progress Moving the was medical in medical Slide digital a previously now to structure for to Beginning would known acquisition #X. as medical for continued of renamed grad to for segment, observe net quarter, education. within technology the with medical new in formerly content and solutions. increase course, Unidom. now expansion gross solutions. that all an continued shape I the the our notable from ticket and over education education average X.X% observed reiterate significant of solution We throughout accounted of segments medical Entities and education including in undergrad accounted the segments: comprised organic growth in can Simultaneously, services we changes our are taking continued occurred

This operational gross expansion by both an Continued education to an a and margin from also boosted was increase credit and efforts. marked in segment in students operational by due restructuring program. BXB restructuring, resulting benefited growth prep

exit by clinical a our medical ended payers, Lastly, increase management. quarter the in clinical a in in growth we XX% decision in and XX% segment, driven XX% solutions prep with growth

of this quarter the the as were of are for. being our some in net for set also BXB now first XXXX postponed accounted have We recovery that seen invoices a revenue during

#X. Slide to now Moving

recent the pleased expectations and are XX an intake XXX% initial that We to our asset seats again Unidompedro, exceeded UNIMA, of also ensure which following announce the robust results first to medical have the addition of half acquisition our guidance. at occupancy. of process, update once

new a million Blanco, XXX CFO, and and EBITDA adjusted financial range BRL and billion XXX will metrics. to expenditures. turning Thank million between more BRL BRL Afya's revenue provide to billion the X.XXX to BRL into over updates capital billion and the CapEx X.XXX net range insights range I you. be Our X.XXX our for between And now and operational billion call Luis include between a BRL an X.XX BRL

Luis Andre Blanco

by of you, Thank unit. discussions evening, good operational Slide metrics business for #X key Virgilio, and with everyone. Starting

number XXXX medical half over students. by increased X% Our the of first students of to XX,XXX

X,XXX from reached authorized school one net reaching XXXX. XX%, seats than medical first average revenue to Furthermore, The tickets medicine in approved January XX% undergrad increase an have grew the net BRL XX% in BRL program of Guanambi our XXXX. X.X%, due health-related by XX-seat these reaching half highlight X,XXX of medical for All to We key courses. the of saw over more efforts and which million, is related increase point. X,XXX in

will short consistent educational alongside strong profitability growth business medium-term, of be our cash and and remains and the business driving continue foundations Our generation. to medical in the

continued XX% the page, considering Starting a from payers, the we reaching On to active residency the XX,XXX in left students our the period. the next increase with journey, Strategically, right, observed metrics. continuing we present X end will of look our the at educational education I into journeys.

achieved graduate totaling X,XXX XX% to Moving We journey. growth, a the students.

metric half the of XXXX XXXX, from the of and of increase offerings, a decrease of courses the BRL BXB XX%. of continued reach summary, other XXX a X.X% a million growth and In period our over the XX% the BXB in first BRL increase we XX% growth This in over education million efforts includes to prior compared reflecting BXP year. offering. half period first from X-month in an to saw Finally, XXX our enable the

Moving to Slide Medical I Practice the #X. will metrics. discuss operational Solutions

those trend, reached continuous paying XXX,XXX payers, our asset a generating reflecting first year's quarter. compared users, the to last revenues the segment. XX% a graph, physician On to total in we growth see growth business you With can

the XX,XXX the portal in Afya half the counting of the As our shown discontinuation year, graph, and active launch Med to last over first in second Pet monthly of portal. due the of -- mainly users

first XX graph BRL In also accounted solutions, grew our revenue Finally, displays postponed from were the practice present and the as million the reaching by compared Afya for. the million. last privilege which revenue, last next invoices XX net slide, million XX% from in year, to BXP medical reversing the now BRL Ecosystem. was this our net from XX in Within decrease BXB, BRL revenue come BXB quarter we

impact users care community made on has service the the our second health are Brazil. engaged with end ecosystem At XXXX, to the the proud present of that includes are and significant products. actively XXX,XXX who quarter Afya over our in We of

courses. increase quarter medical was In XXX the XX.X%, increase reached reflecting of same the increase practice second mainly seats million, a forward second XXXX. basis BRL Campus, period of in Moving pleased the quarter addition medical satisfaction, intake over million, increased at revenue of slide, Page second for quarter for XXXX, next XXX the margins last in XXX overview growth Maturations million, the of present performance increase of to seats, execution the of Net XX, and of solutions. of revenue EBITDA to the result year. And I'm to continuing EBITDA strong XX XXXX. in for is X,XXX period, an XXXX marking by of want with XX.X% for net net an XX.X% the Afya. prior X-month for the BRL Guanambi Starting X.X% over second effective with over quarterly with This driven adjusted another I discuss our compared BRL the medical of to year. of financial adjusted the educational same great points to average robust XX% an quarter tickets quarter

is The to in BRL For an an of due started in undergrad increase expansions the expenses. million, EBITDA campos of education continued expansion margin and general same mainly the margin basis with increase The and XXX adjusted adjusted of period. practice year, was over and education, November of segments integration quarter FCM, an efforts the margin EBITDA medical of XX% EBITDA XX.X%, gross the medical period X-month completions of adjusted XXXX, of prior operation points period, within same administrative our restructuring operations formic that and process and more in XXXX. ramp-up in solutions in continued selling operating third UNIMA JaboatÃ£o the efficient XXX

XX% almost BRL our quarter totaling XX% the to slide. year activities XX%, next performance. by XXX robust cash of first same The driving flows increase Adjusted an ratio the BRL was net amounted the operating income period XXX of grew XXXX. to XXXX. million, Moving of for half in million, from cash the of conversion operating second XXXX The operational over

million. also that nearly the ended an incorporating of an adjusted income, saw increase BRL due we For in period XXX mainly increase net results, operational XX% subsidiaries. Presenting enhancement year-over-year, rate. tax to the its the rates, X-month Afya to of XXXX, June reaching efficiency increased expenses and the effective increasing due interest reduction and decrease from net lower in financial distribution entities and in debt tax lower by

achieved growth XX% X.X BRL the for first share a of quarter, to per months period, increase the the we XX%. remarkable BRL X.XX a and Regarding prior X adjusted year, EPS, in compared

debts, total debt breakdown we bank soft the the table our transactions, and accounts with to slide, On main the next cost debt, payable can gross a selling obligations. our of financial see other of shareholders considering our debentries, and

starting of through if cash debt. million in loan also reduced repaid sustainability equal debt up announce DPIs targets X.X% debt We net Corporation from giving the is first proud The debt quarter be may when will into the in reduce now expansion educational CDI our moving program will its rate our my plus business 'XX, sector. sustainability by to terms, which net after and compared to XXXX, net to the are considering with position, million, XXXX. million. According in to is were achieved. December reduced that the International X BRL In financial acquisitions. quarter by finance second of be loan BRL X.Xx second XX earnout including to to Brazilian our And to combination. April XXX based our BRL more Even per insights slides, entered seminal BRL XXXX, to a the X are bps able net million. The in Unidom XXXX financing I XX of and on our Afya social X,XXX rate Finance peak IFC X.Xx reached in agreement shall debt last interest in XXX installments IFC linked EBITDA discuss We loan cost

million As XXX prior to net prepared debt year. BRL shown, same the our more we over our the concludes also of compared period remarks. This reduced

our areas. achievements of proud and strong very our We performance are across

Our commitment health through to This learning, continuous enhancing productivity professionals. digital accuracy the the growth, system unified remain a and educational supports journey solutions of steadfast. medical approach and care

are we I about us. ahead, that now await for sessions. open the for promising opportunities Q&A excited the Looking conference will

Operator

Instructions]. [Operator you. Thank

first question The from America. comes of from Bank Mirela

Mirela Oliveira

here. have I X questions

about what that first debt, of in of the terms the should your maturity and of cost it's we cheaper. IFC one, date The debt mission of think considering recent some that

the solutions. So, in future? reach top we practice margins, debt I the guidance what the are triggers the to the lays second, the more medical thinking that of of imagine risk And on here cost on about the on near

bit So, the margin the this could a for you business, how second especially tell dynamic is in semester? of us

Luis Andre Blanco

that until the cost the we below we're of of Mirela, us, -- I SoftBank debt. to it's that say going expected XXXX. at with to cost transaction is would debt have due least presents speaking CDI, about our talking

Brazilian expect of XXX% our So, can cost below until CDI, that the will debt okay? you there be

Virgilio Deloy Gibbon

now. are on the how that for initial commitment reach so the are releasing second performing Regard our segments was expectation right actually, the X The we are here question, is reach based your line, we the here, X guidance, so better. top range. all the we execution to here, the the to aiming above range But segments

called the between services continued are last year here. digital EBITDA. we since a solution, segment, all half second and on we the of also prep service, are restructuring delivering solutions that Regarding we the a it's the old digital And digital education lot year, segment, process did last Solutions having Medical now of medical positive the synergies when

growing close XX%. We are to

also to margin year. XXXX close were for expected around Remember positive rates and that XX%. EBITDA we X last growth Our

on medical year, our the also quite also So, first last products also them see improvement expectation can it's a prep under also we segment all and undergrad on than continue education, here. as you that positive at and offering both pushed but solution, of half better better are by than are results

Operator

what Mirela. main margins If we may to ones to already and what achieve that main the have. mostly promising is are the the the keep guidance Yes. guidance, are The the delivering I we add, we reasons, trigger

practice year that and medical restructuring Virgilio units education, units integration as are the semester continued the that said, opened better margin So of the a between the whole now with also margins. comes solutions the XXXX the we medical that better X of mg in delivering through and second

Mirela Oliveira

Thank clear. you, super that's

Operator

question from next comes from The Marquezini ItaÃº.

Lucca Marquezini

Okay. on questions A of side. couple my

So, the was first first the one is that revision the in reasons the mentioned semester. the one of guidance the performance release in for

performance? which So, segment. side. last one of products stronger please on of expectations Can this guidance? the acceleration we it in for from the some an in color the revision results revenue which the the that Solutions second is, Medical please Practice on this more above you and can That's comment then delivered led you saw our Please? segments the And were provide growth the

Luis Andre Blanco

questions. I'll take Lucca, the

The And we better remember integrations semester, that the in our and of JaboatÃ£o business XXXX, of but their we first the one, UNIMA November have in first structure. from to integrated FITS basically beginning got better regarding XXXX. in that combinations come it's the we it performance results the from

So, medical launched the now we one synergies operations the are performance is are that Other that much better with have whole these we that operations. margins XXXX. doing we capturing on we've

on have the We projects all better budget implemented with delivered here that have SG&A X we Afya.

with performance for the us that made that just released. guidance got update acquisition and said, comfortable performance better, that UNIMA this our got all one that the we we with Unidom and seats additional from So, to we this

today, deliver So, the will delivered we as are we guidance very guidance until provided. all confident we the that have that we've

regarding solutions. in second in the the the of digital deceleration terms net Regarding question, revenues

from the the that mentioned sides the recognitions We in to have revenue this BXB revenue this the then conducers during the more service and for second have mostly the during semester, quarter. finalized than BXB and first Remember for quarter, providers of we the We've during we dropping accelerating second with made revenue the the accelerated of semester, come revenues the this first XX% we recognize the could revenues quarter. grew that And second part that solutions. a the segment.

Operator

BXB is products campaigns pharmaceutical And that we're in selling Lucca, regarding for product, main the the the marketing the industry.

Virgilio Deloy Gibbon

I new mention second reason proceed a point, the had lot we the with guidance that new one think considered of just what think from to close we I the all another in Lucca, last strong it's we saw important year. also candidates to intakes the intake had half, and

very predictability confidence So, our it's guidance update upward again, cycle, gave so healthy right and and XXXX. us, to a the for

Operator

Leandro comes Bastos from Citi. The from next question

Leandro Bastos

I more of regulation. have kind questions related X to

the -- had we the mean, of the I the one, by decision approval Court First Supreme for kind actually injunction.

And so some haven't far, approval. we seen

you approvals given And That also think the market first perspective your injunctions regions many related be that might kinds the strategy mathematical your is change outstanding continue line Street, the expect whether Mathematical have injunctions. the And been in if for the time approvals? to have. then those how on competition be will wanted whether may you recent the have it those second any knowledge just streets, seeing given also part. given terms tan the of So, changes And in for you're approved, you that auction. changing of to

Virgilio Deloy Gibbon

on the this release. Leandro, the part so intake first was cycle

we positive So, had changing. a didn't We cycle. very healthy and receive any

differentiated campuses undergrad have, operations I all our think that for the in we of segment. lot are a cities our we

definition very is after I the majority the the with been Supreme aligned from the approval expectation Court. great them, think the of

to as that the still on Ministry come We decision Supreme of from Court. increase process the had on of seeing the have normal based only numbers some from also approvals past. the everything Still the we the coming So, in not some expected. running approvals by Education,

medical speed to on wave, impact of around based and least seat new So, the the is something based on on as they difficult to all additional is and Ministry this ministration. the X,XXX also of very including expansion depends there in capacity of the at But capacity program, Education anything it's be on measure the the idea the idea coming will how from for entire everything analyze seats, XX,XXX it's that to expected, that the the approve because have. what to

So still early detail process any the that, in to okay? more other give more than

Operator

compete I'm are Yes. we for are the already injunction. regions not And we we are compete regarding that we going the to -- regions sorry, not are on that going have to that ones choosing,

Leandro Bastos

just kind Great. I another may, of one. And if

with pipeline, the eventually Are this any know changing become pipeline and injunction. more seeing your one the of terms that? might M&A that targets. change don't not been Did opportunities really? has companies you In or I with

Luis Andre Blanco

take Leandro. I'll that,

have of we these As new approval. fact, a institutions matter being

our funnel targets So, possible talk. to okay? the we of pipeline So, top has grown, have more

are written We with can keep confident And pretty acquisitions. of XXX that units' seats year. acquisitions that remember the per we

provided We that since the are of we XXXX. ahead guidance

So, that M&A we more choose very the pricing. right see to the streets do right with Right sense to still to rations keep have the of the price. are we make at on for going us we the course, targets now, the eyes good to to. discipline talk with And

Operator

The Santos question Marcelo comes next from Instructions]. from [Operator JPMorgan.

Marcelo Santos

and X, one have clarification. I

on think in that The first the business? question having was is, comment were course could past you competitive difficulties. the that environment something prep the you please on I some

evolved. it how know to wanted Just

Or XX%? the the growth growth? mentioned Or why that margin BXB comment is Virgilio, what if trends in The And business as well education wanted said I practice one is in just medical the the the for answers. of to positive. revenues continued is to question there? margin something the you XX a did Virgilio and I was understand the are and bit the referring is second clarification it the didn't that contracting you as mention understand you is

that. Just understand better really said want to if you

Luis Andre Blanco

one environment the of sales concentrated course. the the sales be year. for back we're competitive us Did sales relevant the prep this fourth the XXXX second impact at for in quarter not quarter this first the going -- third the because of fourth the regarding I'm will moment fourth environment second on quarter, We are the it competitive the market, the to quarters will because the and the take seasonal fourth quarter, the when it's topic when table and second the going launch first The to not not it's quarter the quarter This on not for is and the third during collections. in sorry. a come, of quarter. that be start the

So, nothing change this that new until going cycle, to -- we're that. on

Operator

may need the talk to residents' only we on I not Medcel. are When add journey, products point, this we about you the that Medcel. about talking If remember

we So, That in not had the our is gives offering prep past, Marcelo, today, of a as value to Medcel the course lot only products. right?

Virgilio Deloy Gibbon

important. that's by product was of Yes, very initially only course sort embedded. delivered It's being Medcel. the That's prep all the not

products, growth seeing enrollment are So, even coming on a product, year. a we strong traditional quarter the as we considering Medcel but rebuild the in prep

you As on last of XX% the same than more X, can table our more period than see year. students,

a course prep it's sign and on and good segment. So, our prep

Marcelo. okay here, Medcel only not So,

were the than to flat. be our on I leveraged think more This BXB pandemic your revenue here is other continued is products not the will here core. Medcel during that licensing help This This we education. was something was second institutions. that question about

of the clients. guiding continue continue this offer, use shutting our not are in We products offer we'll product around something that continued institutions different the type to that the the this down we XX type our XX are it's It's on but But education any to clarification. education. or About role of sector. to here not on segment to on

also, But we And the but are are the around to medical year EBITDA run half process this -- XX close second So, on a the that result that's order the margin, are aiming we only the to expecting in to contribution and seeing that reach grow not a improvement, prep gross margin after solution. the around we we it's margin. positive contribution year, XX%. to of restructuring last XX%, to XX% delivered

-- We disclaimed not segment, by on at that are least contribution our margin. releasing up reports just to

Operator

Morgan Stanley. question next Cepeda from The comes from

Mauricio Cepeda

We questions. have X

help the Unidom, the about is Unidom. one after expect first We the the one of in bit about a are Solutions. that So, integration? which understood from we was do what the little a which of consolidated And Medical the there the simplification The margins sources of a impact integration, of there, on release which second terms time margins. synergy in Practice frame there,

offer So, some would down you're if if you chose digital you concentrating question there, few services narrowing be, services. the our

different So a a basically, is if there position in strategy or there? different

Luis Andre Blanco

one. this take I'll Cepeda,

was first Unidom, and we a institutions during remember, Regarding received July, lean structure. closed very that very the with all a day we of that good

happy So, with transactions. we're the very

since We the days have XX closing.

we're the the very as working integration with we've synergy The transactions happy are we still on We yet all made the But same of come plan. that today. line integration dates will have with So, itself. defined. don't institution in the the

structure in concentrated the discounts the the capacity and to given it. operations to implement for our the going are to we're to provide the We're of national the kind in to and period. the line. have going We're have this France We're institutions. stream, stress service to centralize going during regarding some the or family the going of scholarships the they all fulfillment without teachers. under were going in correct over increasing in revisit there, profits that We're So, to our cost top curriculum

these going achieve So, to couple months. of that synergies next are of kind the we're in

deal when is the the that we've in signed we everything announced occurring last May. So, to according plan

EBITDA the is EBITDA. with an So, we maturation, the going mature X.Xx to after when situation at did when that we that, regards the we're put reach

our our our for Unidom incorporated best guidance. for is in semester is view And view. this So, the

is number over the So, there.

the of educational we've made this the and very, the digital segment in very the beginning the year. restructuring Regarding segment, of

We restructuring. started So, with we restructuring year place. this in this this started

segments. family old Pillar not product digital -- X but with the of restructured started And parts whole. movements, the per the of move to One We products, be continued started infrastructures to of one or a segment offerings was be to be we to organizing as not each of this major started the we to these from educational. the the per

of team the team, have one each that to per all have. have. product product for pillars, started that team So, a for for to instance, the one all have instead tech service all of started having we prep for the We the solutions, solutions we we one

up lean year. we And that, with we of for the terms our in a gained So, structure costs lot of both efficiency expenses. and

happy the So, we put the these update And results, movements we that. we as these are guidance within the have scenarios And unitizations all the our we're very with for delivering guidance. to year. we incorporate been

Mauricio Cepeda

Blanco. Okay, you. Thank

So, the structure is redesign for about no was internal It's that the delivery. offering. in much more there point

Luis Andre Blanco

exactly Yes, that.

Operator

do would will online. like So, October date to happen an Afya give have I to as invitation questions, XX, give not on only to be will we -- more any that our about guys you

Afya Limited (AFYA) 14 Aug 242024 Q2 Earnings call transcript