VSTA - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Vasta Platform Fourth Quarter 2020 Conference Call. At this time all participants are in a listen-only mode. After the speaker presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Bruno Giardino, Investor Relations Manager. ahead. go Please

Bruno Giardino

Mario and conference everyone, XXXX for me Melega, we joining With our Clovis Good and CFO; to thank discuss this Guilherme have today, call call on COO. quarter Vasta Vasta in CEO; me Poggetti, morning, Vasta the you Ghio, Platform's results. fourth

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

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

are Forward-looking business limited market. statements our in for regarding this presentation performance, and financial product statements include, future our and but their to strategic regarding our benefits expectations not our expectations related the expectations periods, to, and initiatives related

described management's as release our based with on those date yesterday risks we presentation well as statements These beliefs assumptions are our available The available press in and include this filings as currently hereof. statements on and the those the on us that to in the to and Exchange information Forward-looking management. are issued information in based forward-looking set Commission. of forth our fully more Securities

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

isolation be in in on The prepared non-IFRS call. IFRS. considered financial as financial of this In not management measures to are intended reference with addition, to non-IFRS may a accordance measures results or substitute

statements. over to now our his the opening CEO, call me Ghio, Mario give Let to make

Mario Ghio

to number and quality increase year. closed with earnings make revenues in strength of amount the release some best annual the very highlights Thanks XX% number contract total assertive and call. share. ACV million, in year, as totaled start and significance the ACV is in brands announced in of competitive subscription highlighting far. further we of in of even learning The XXX terms then mix. I of XX% hedges XXXX their the Complementary growth system also traditional technological value, annual we of participating Bruno. that to expectation so this of the of top to move for forward knew the Thanks, The market commercial obtaining BRL higher, year how by like experienced of X accounted would of for the Slide portfolio they XX%, that the exclusively solutions on XXXX the three ACV organic year the commercial a for deals order commercial strategy the offer. acquisitions increase On our increase X% in features for XXXX, was recognized much as that, solutions and will higher

to would Moving about Slide on like comments number to pandemic I the make some X, scenario.

system The Brazil first, revenue, only second the drop reuse behavior on wave leading the of of the by not is worse than learning the but textbooks. textbook the sales, of the based COVID to in a impacting also non-subscription books PAR due families, in to

to students to continue of partner transferred have The public while second grow. children postponed in comparison that the for enrollment the public schools. is wave their of by and private the trend to have will in year, others schools the is sensors, schools, process schools. this enrollment also percentage XXXX previous official with to affecting children According school X.X% Families XXXX migrated

revenues All of this in factors year. can these commercial affect our

Poggetti. our CFO, to floor the Clovis pass I'll Now

Clovis Poggetti

Thank everyone. you, Ghio. morning, Good

Despite 'XX we as year-over-year in to the as period the against this same period gross the solid the number the other than slightly the This Moving year. what same is of or 'XX accumulated 'XX EBITDA profit well. this adjusted all whole in we being for XX% slide, On financial quarter quarter terms performance with better the for in growth that well year. in growing revenues, better Slide present fourth X. below next almost main figures of highlights the as can performed a fourth is XX%, lines, we clear XX-month the see also

the society the approximately robust for year, can 'XX. a economy. see considering for themselves, increase which million, EBITDA all to and of compared when that the million, enough, increase BRL XX% fair of is Regarding X% and XXX the line slight market numbers 'XX, BRL the BRL whole with of the a in we and impacts reached growth XXX adjusted a XX% With previous in when gross when COVID-XX year of revenue to accumulated year the profit million, consensus our to compared XXX compared

In XX.X%. IPO, by in in XXXX, impacted as that we one the adjusted adjusted these net year. EBITDA-to-cash XXXX would we margin, improvement BRL will for events of we an the and XX% be in the growing And percentage cash flow year and of be during almost mention figures info XXX X it during to XX that had in was million EBITDA With last to are impact, XX% conversion free XXXX. to points of example. also Without the close a moving 'XX the worth the the income net the worthy terms income, to our sound is of nonrecurring year, quarter such during highlight had to from regards breakeven

This is the reportable includes characterized, subscription with educational of this same up to of business the all well X.X% both schools And and, a that during drop Important quarter fourth wave in soup back-to-school up of and of of in continue period fact be related analysis to posted this bookstores information Having cycle the the from basically presented in in led is total revenues revenue unfortunately, which highlight same operation the point of the slide similar this year. start deeper business the period a the comparison number year. a becoming the to end textbook makes net said the terms is comprised in And quarter into of any Slide, growth I an to behavior throughout month solutions, impact the important by the present year in performance content call it products, is recurring our analysis revenues match fourth sales. breakdown the this with down more given over Moving to in sharp was that ended 'XX. the on to composing attention operating XXXX's platform has early cycle. the first fourth the our our to the to This revenue system, and purchase accounting of 'XX. by reflects last XX% debt net noted company's XX% it uncertainties is the during solid the the important quarter, revenue, and And decreased announced. other which to detailed you to account two 'XX. the here to pandemic is was the impact is the revenue revenue, ad the that period first the of impacts complementary next period. would current We observed in negatively the have regarding why year, therefore, and subscription quarter subscription to have uncertainties that quarter, connection period just as the in the one the compared and this apparent the that, one our learning ACV described. with of almost the a here the is highlight segments: of quarter in XX% the your solutions beginning cycle, go it a non-subscription company, business highlight behaviors with textbooks -- will a circumstances different likely subscription which XX% by volume higher XXXX the in revenue like all, fact was that fiscal the fourth quarter the reutilization commercial In second have COVID-XX, despite turn, while of that PAR is, by idea that see, first should fact, PAR possible shown X, of in I fiscal we can one, that the just affected also of words, learning and platform. view which supplemental tech of In from operating last up digital growth by the total also that of this revenue by segment systems, for traditional fourth as of

performance to of revenues effects the and to sub-segment the summary, the on are when learning hand, other analyzed. quarter. quite system, will even product sub-segment we see the being in traditional the stronger analyze growing On but the the are depending that pandemic, effects we the was different we close not immune XX% In of with this

mentioned. non-subscription more ones I that learning For the are the well example, means business parts regarding just the textbooks, impacts system, part as of by which as the driven of reutilization, as severe the because

traditional so On related certain our to has with ones mention, demonstrated ones severe, the the well impacts means are systems margins the which to complementary regarding higher not learning solutions, hand, the as worthy other business as resilience.

EBITDA to appointment in of was between XXXX. in all reinforce and recognition presenting the and to despite we its that adjusted X. different the of business. the we the the Slide two that convey for seasonality is result very This to and strong curves similar for a of in the the last message subscription time, quarter, in our year curve one the the Moving quarters we calls the are revenues the more purpose just with is of fourth in first This us results results, that concentrated regarding part one recognition XXXX have

percentage recognition level being can to had presented in an quarter XXXX previous compared we see, year revenues you even fourth the 'XX. the in greater period points with of the above when the of X same XXXX As

subscription impact of X% the to the the that please. last would schools gap beginning this of to we higher commercial the to to top in results presentation. pandemic the many XXXX realization the As Melega, anticipated year. a investors negatively their the in first leave cycle. for related with sales consequence have like This uncertainties our also in anticipation I Melega part that, means -- of the would of academic due ACV a of Having the commercial than of quarter to On orders, year. continue said products which the consider have that, floor should

Guilherme Melega

you, Thank Clovis.

growth years. coming performance the XX, guarantee healthy a present for to on sustainable that cycles will three Moving Slide here we and

is step base, first increase student to The acquisitions. the through and organically both

solutions complementary of of cycle will a the have growth in that the increase second in penetration XXXX the The from -- increase volume annual already come in experienced the XX% ACD.

Finally, the through cycle digital growth technologies will from new come third and transformation.

further little a more ensured the solution, organic students that of Vasta advantage both the XX a numbers products see an total into despite throughout of can school for growth Slide served. our XX% in being we and growth, on presented Going XX% of the in which, main XXXX the increase the by details competitive mature showed of solid numbers

As addition, of growth both out as pandemic. also essential presenting operating Vasta can experienced total combination the in agent, we in schools in as you in attracting only of tool history. in still number and to for an during of new that transformative revenues. ACV much cross-selling an numbers recorded a growth growth XX% not of to of in over proved an their these an continue one our sales new renewal and in XX% base, highest levers its increase solutions our factors posted core activities all strong subscription important were students. resulted the Slide school growth base in students numbers well, ever for the XX% capes Certain of academic to and retention XXXX important low as XX, have clients the and penetration on in guarantee higher the that ACV, due see as as complementary This the the solid The

Slide traditional by additional showing the way breakdown we Now our relevance systems XX, commercial on of brought to for analyze operation. of an the the ACV learning cycle the and

see in offered. is pandemic. last were In learning of while side, the the given showed much the right, X% of PAR those the shown see that systems, and the more up growth solutions On penetration graph rates competitive commercial can solutions a for Vasta growth the ACV the complementary strong the by In of the on low that XX%. turn, cycle. year-over-year, showed differentials and learning left-hand for during we greatest mature traditional can the still solutions while growth of systems, annual accounted the we Complementary XX% made traditional increase portfolio a XX% highlighting in solutions in

mentioned, previously and being I last by of cycle. commercial practically turn PAR more not this grow as the Finally, to did presentation. impacted effects With continue back up the Ghio ended to highlights, operational this in the pandemic,

Mario Ghio

Thanks, Melega.

XX. Moving on Slide to the number

brand is high than operational a the margins enable our core the front its which acquisition in the growth, organic progress and synergies fifth learning our by with by students premium system, the that adding in scale more system M&A gains addition with to a operation in strong to In level announcing base. also XXX,XXX Vasta of country, will education and the learning largest made

Schools next a has Vasta Proprietary for addition, In the Aleva's agreement years. with XX commercial signed

with of If number Store all year. Class levers first main sense, growth still have The of news this we exploring stage Slide for futures includes Plurall's the to offered Plurall started we we already our seems well incorporation new way a that commercial want delivering to Private next the this to of be unlocked. to solid be solutions cycle many in other present to as new XX. the platform. a operate take this the the and plus rate, Moving In the underway to opportunity platform

that Plurall's in very with presented that the able teacher chosen and as has families. classes are the front many With this services Plurall, Slide score class through Integra best the all But want and in is Store conference with of other we to the Somos time, solutions launch they already contract digital Private biggest On being that the be and platform to news to the will version here service, opportunities the have developed XXX% digital platform. who a need of such students and Plurall beta call, last price XX, are Edutainment. the is the affordable directly the support pay.

present putting last managed where our the more itself Moving ensure step growth more our is efforts to digital We digital number transformation Vasta competitors, to from is field and XX. This has which in a its to and where Slide are partners. many solutions. differentiate for the strategy, we

we digital schools. Moving of are to Slide to XX. facilitate phases our the We students developing three present for here that partner acquisition the

between we enrollments. a end, convert into attract that so the new is On step first on front will of about next to solution have phase. a leads the Somos schools schools for offer The that more to the steps allow and were this portals important talk overcome both integration slide, SEL that and acquisition digital attractive to front, to Integra families recent and

and By have the to the the Kinder also opportunity with Somos to tool a a to Integra and within the students is view flow ecosystem. schools to Garden addition capturing elementary The these is partner intend more for bring this for between in second guarantee which we able schools continuous near offer two branded future. we Garden step from in flows to tool important content children a bringing partner digital our present partner XX, offer Vasta schools On SEL connecting in is which to And news of digitally schools. schools, Kinder sustainable fits part. finally, integration more to Somos an Slide enrollments perfectly the that digital to

to Moving XX. Slide

for in also to more school organize that, a scalable allows now school in open important SEL's that acquisition the content so and these and can and regarding partner the clients finish themselves has customized portals the system. differentiate and develop, Q&A said be the than enroll students. slides, specific community end SES online of help I SEL. such update rationale Mackenzie a the manage behind has will creation the an section. Having for Vasta communicate our technology digital last from way, or them communication competitors a networks. can to of present school important learning its you. for for helps schools schools and for important front It to services and Finally, and details more the with presentation, and we And better Thank incorporation all -- as I

Operator

from Aragão Our first Instructions] Goldman [Operator question Diego with comes Sachs.

proceed with You your question. may

Diego Aragão

environment way, and see Aragão challenge plus morning the are compare question, interesting, a this schools by Good fact of you. for also Thank your related overall was fast dealing year to interesting how it facing Ghio with Diego business solution. results the this to Goldman. the with And the quite reopening and is expect still first process Look, facilities. I the the may, quite is to if that the of despite complementary their grow

So segment hopefully, you is solutions? the opportunity I this fast spin if was And wondering us So crises can behind can us? pandemic and first give stabilized colors on the on see my some for guys how question. complementary Brazil in is you business this grow

Mario Ghio

Thank closed, very that XXX% year. the Ghio. revenues solutions, open, to affordable market, with are is very digital that we included that is for then other hybrid at matter Plurall mean, year, from and Diego, the we ACV question. to in if tough or going the were of building the the the that the in digital the best are we of this come in in Plurall of Plurall moment started Actually, ACV. all about not Store doesn't if are Store, we offering comment if solutions we important solutions, your And concerned contents, digital many also for proprietary in compared Teacher for the way on, develop to this to school offer if behavior that right? because So if or school to right? the complementary content So So are My But is Plurall to super solution, school a solution third-party we is last how you But concept, -- realizing Store, this is realized I XXX% right? digital the understand Diego, they dealing pandemic. so they middle could the important middle was the right?

by of are only ACV, signed schools. stack considering contract the We the the

see we Regarding behind, education, of in year. quarter non-subscription the had, given are of year, of coming expecting. following traditional semester, a fourth more in semester, to we see especially question, what -- occurring the quarter your textbooks second and the to worst factors in we a we normal, year considering part of to guess, first to part okay? Diego, in the the the in to that traditional in are year I are the also case, and business. the the part, can is we the everything second to expecting see All more families to the normal are And are they the coming worst we right? That's in schools In behind. our the is of expecting school only this part second So any

Diego Aragão

the So if and what two to look, address? also is the are the these Are growing that related a and company things? my options eventually so, And price you stock concerned question liquidity. second concern? investment to it's are What analyzing you current about

Mario Ghio

can near that. future, we have of we'll analyzing can this keep And it. the we about the one options solutions in also all And choose have, the and posted with likewise, Diego, we we for Yes. steady are we are concerned everybody and problem.

Operator

Giardino. over to call now turn would like back I Bruno to the

Bruno Giardino

you America. here Bank much the questions. Pedro we of he Actually, Pedro questions. a three has Mariani, So question for have from Thank very

Makers are includes on in he included questions. represent? receivables the These First does in how the much already asks on COVID-XX Second, quarter. the from that one, details And Mind the for third, XXXX? And potential ACV cancellations ACV guidance? does is more fourth the

Mario Ghio

Okay.

last and I Clovis this two the is Pedro, will answer cover So question. your Ghio. first questions, will

that Mind in our and the are yes, Makers coding Mind this services complementary Makers, Makers ACV and is included to with last So solutions. go-to-market, the we Regarding included right? robotics in year, provided bought Mind it's is January new in because

Regarding yes. cancellations the to by so the in yes, the it's is on. evolutions, ACV. of of build ACV, cancellations behavior that, So are cancellations, everything, second historical okay? the always And ACV we kind know, and know, evolutions from second net answer of So and evolutions, the curve the ACV, of behavior included of the the the I question, the If the we the mean, to impact is we same we deduct any your right? that when question

floor Clovis. I'll pass the Now to

Clovis Poggetti

okay? in This the part increase, say, quarter of to season. with this to do in see days. of completely fourth it's almost from highlight in sales. peak are is company we period year, And with terms okay, support trying say, and let's to, comparison And the when the business, of important of days related of the season short XX Pedro, think are, days, the to fourth compared vary going we of cash say, the to We higher in quarter when receivables, flow. and XX the see in say, directly XX the an the terms peak increase our XXX we let's the renegotiating with regard considering this almost and let's increase tight between third quarter This let's extending of regard normal, a seasonality customers, last is may them 'XX. days I to

in So of quarter fourth of the on to have first to should this company, that no we XX% fact the be related okay? again, the concern quarter, the the And seasonality, and regard. close revenues

Mario Ghio

problems or Yes. we a capital Maybe certain I clients last oxygen, facing working the pass-through -- more pandemic. give moment add, just a to had them more in to to could or year, to that the discount our opportunity more offer Pedro,

churn as was benchmark, this not time with the the year a paying way benchmark, us, decided offer for a was we best only the for to us. debts to believe for had their okay? situation. that mentioned decided market, And we Melega the And the So We to presentation, deal we offer more in discounts. with

Bruno Giardino

we was out year, regarding are returns is ACV, clarification here. the we normal a In Just ACV, What as and cancellations the if -- a right? of include in it COVID? Is

Mario Ghio

COVID revenues that but will the the coming ACV, not recognition different the from brings the year If impact ACV. the from previous impacts are that -- of

Operator

this turn like And back I now the over to would at remarks. I'm not call to showing for time. any further any Mario further questions

Mario Ghio

Thanks again for earnings release. also to participating stay you I call. see safe our again our hope in Bye-bye. all and you next hope in

Operator

Ladies and conference gentlemen, Thank Thank this call. concludes today's you. you for participating.

You may now disconnect.

Vasta Platform Limited (VSTA) 31 Mar 212020 Q4 Earnings call transcript