VSTA - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen, and welcome to the Vasta Platform Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. CFO. Giardino, Bruno

Bruno Giardino

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

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

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

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

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

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

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

call statement. Let over Ghio opening his me to now give to the make

Mario Ghio

increased growth also quarter. XXXX start for some was X XX%, non-subscription on XX%. second XX% I Thank earnings like the product down Bruno. by in In highlights ex-PAR Net while date, to to release. in in backed expanded the the subscription our with all PAR, subscription and revenue the hybrid you by the commercial year our number in products. ACV, revenue quarter you, Thank of the participating Slide would

with to chain was business, growth second higher of been created potential high to affecting the by hit that and textbook date the this of textbooks seasonality organic in revenue offers. also evidences negative quarter and commented, accounts PAR following previously organic our with Complementary the the we the in both the to high-single-digit reuse by unfavorable expected Even the EBITDA doubtful of due in BRLXX higher quarter Adjusted the segment due in note second growth are was the the solutions revenue corporate As million all not typically to which one excluding challenges double-digit businesses. second composition caused this to non-subscription enhancement in provision the our highlight We representative subscription PAR. structure operating results. that of COVID and XX% wave year the and of the a have the second for the the growth cycle the we the IPO. record our quarters the

our to results. we XX% floor BRLXXX posted in Bruno adjusted said, BRLXX this detail loss cycle, the of who but a our profit net Giardino, will That pass CFO, I million quarter million financial up. Finally, of net in the

Bruno Giardino

you, Thank Ghio.

the As will fourth we analyzing X, XXXX. second in revenue this Slide quarter we did performance of the cycle last start in XXXX quarter, the our Number from to quarter

in Our left. the XX% as can net decline is see revenue you year-over-year

XX% non-subscription, However, noticed XX% we revenue when our representing information of total we this and year-over-year, revenue. increased that break subscription into subscription

this right side subscription Going in of the learning breakdown, slide. further complementary revenue and ex-PAR split we systems subscription into ex-PAR. call We upper into traditional solutions this

at reported to PAR, compared the schools slide, phenomena same complemented XXXX. at see we textbooks, the as the a In XX% schools' you the their in of observed the times. This students to partner the by XX% revenue of PAR XX%, chart is reuse when the in below declined Excluding has that during quarter lower higher the that gap registered lower subscription in period in grew number in the growth past recessionary slightly with expectations we do below enrollment ACV fourth formations. ACV the

Finally, in not in pandemic net traditional In learning the revenue in textbook products. this revenue different the we The only performance growth of also complementary the XX%, were The you systems the delivered Slide PAR non-subscription meaningful non-subscription but with products in in of happened as Therefore, cycle. preserve revenue grew these X, bottom our quarter. the typically are ways down business it, the suffered has efforts lines hit XX% subscription sales, about most. the with our subscription can revenue weakness by lines to and products. bring of the non-subscription in chart, not reflecting detail while also see to commercial effects particularly, slide, Net in in first products the the products. the the as ex-PAR in two products our have clients by same quarters non-subscription volumes driven non-subscription

performance. to X, Moving let's our on comment Slide financial

usually year this affected back the further heavier million. to higher to corporate and by savings lower provisions hit the The particularly, of the amounting for on effects doubtful quarter, the next IPO, revenue XXX the of quarter second structure slide. by a captured Also XX% cycle, million and down provisional XX% weak yearly BRLX will comparison the level the is mentioned. In EBITDA quarter on last that was second previously due is nearly comment the adjusted accounts, reduced measure -- the quarter by the with following is in revenue. the I And BRLX.X

BRLXX this we as profit of On net results, but we an an reported in consequence year-over-year. adjusted XX% adjusted of had million negative BRLXXX a operating net of million right, higher loss the cycle,

details has by the on of our approach to discounts. instead provisions. the our Next terms of granting Slide X. extending support the school give Since I'll pandemic, more been beginning partners payment

to payments. has channel a causing of with sudden suffered fall decrease our sales, in distribution textbook textbook the back in Additionally, clients some

of distribution the us, our XXXX net also acceleration a expect migration ahead The could historical activities payment of the the to help accounts in extend of to BRLX.X of levels, million can potentially aging our current back for our of normalization in normalization and We as to as situation platforms us cycle the terms, school X% hit recognize related by we provisions provisions a we we when the the higher With you in effects channel. revenue. exposure book see the should clients the in digital million receivable led to to second estimate in which the BRLXX quarter payment reduce credit come is losses. chart. As our cycle, that

maintained We of the in would at standards. receivables year with the highlight about debentures versus year. days. last provision Lastly to Slide the X-year first details plus wrap rate debt X.X% like stable days of And I X. a in financial section, non-convertible like issuance even of I market BRLXXX with right, To a up to per CDI our Vasta's conservativeness would aging XXX on raised portfolio, million share we term the with the of remuneration

Guilherme pass this strong position expansion and stands That XX I and COO, the months now back new floor our quite our for at Following average Melega. activities. to maturity M&A remains our said, cash transaction, debt

Guilherme Melega

Bruno. you, Thank

is as X, represents and our at progressing and richer increased will we schools. new comment This platform cycle. with mandala every Slide our it on the activity M&As. has Moving to about see XXXX month launches, sales I that well partnerships gets It been

Fibonacci, Slide cycle, PAR as adapter of migrate will platform On the to the core. Plurall I on XX, These brand proud new resiliency, Still digital to and solution our clients on to system have Company, Fibonacci, years. on One also slides, ENEM, on BXB store, margins, stimulate activation focus it. launch strategy we the higher average of new Learning BXB I our efforts which other are offer school all portfolio, In but following Plurall XX, Fibonacci and our services learning XXXX and our has intensified sales is more on This our in as and not partnership PAR ranked premium products, we Top a products essay high digital, designed ranked XX products in student process, this comment in and add-ons embedded ENEM's XX to mandala Brazil's about test, XXXX. with and helpers. Colegio the announce Top revenue, top our digital system fast Slide In well higher detail System. for learning core a new to only platform. And textbooks benefiting tickets the product to in new

We started sales And years. have of earlier year with high will school to the third Learning progress Fibonacci XXXX. of for gradually, System already

Moving XX. to Slide

Let's switch to complementary the solutions.

our offer portfolio on [O the over live recently a focusing Redacao shields. areas, cycle. added FX review sports, going Mim] marketplace addressable The have full different solutions em sales with all Our largest for services Plurall essay in and store, were Nota, market which world among complementary contents this the is eight from Líder

XX. Next on Slide

and Let's private it enhancement. for a reach classes, opening platform markets rebates private for for My Plurall can Plurall online tutoring features Teacher comment and an adapter means service students [indiscernible] both [indiscernible] platform. available Plurall on solutions Plurall on our platform Plurall is where network Vasta. for directly, billing model, and Plurall full subsidy digital adopter paying the adaptive Both new is families online. BXBXC partner academic services, for schools and booking reserving are

focuses our student on takes XX, platform Finally on Slide acquisition digit service shape.

and the Somos EMME launch Integra. of the of With SEL acquisition and

Integra acquisition K-XX enrollment. provider is of and specialized in content partner marketing Somos student to today. K-XX. is of lead our schools for digital announced company broader our SEL, families partner provider schools. The newest a digital portal a services kindergarten company connects generator a for schools. is in service management It focused EMME

partner student With contribute directly established, tool Vasta commercial the schools' will front. to acquisition

Ghio. to back Turning

Mario Ghio

Guilherme. you, Thank

filling late Moving left an on Estela to the Member of to due to as Chairwoman his Francisco Independent XX. passing. of the the vacancy Slide audit we the Vieira Directors committee, Fernandes In Boards by welcomed and July,

ECG the with independent Now, of I -- high in involving XX. with is is invite like to to that by slide. governance, committee standards the to Directors again transactions bringing the the audit like executives to related our is strong our together committee about show of complete committee. audit governance, ESG. directors and you audit to approved series complementary I would Board commitment of The skills. composition Talking be Slide our corporate according that Directors move to and I formed all would must is three showed of the this same parties highlight opportunity how by of take only Board our

its environmental certified by all are suppliers as the FSC and On certified requires that side, the Vasta well. is

in center is We renewable XXX% generated the our also buy of correctly sources and the energy from distribution waste treated.

by Board we and approach. the this side, students Diversity And Board, in school high and three students to scholarships independent impact volunteers also have of maybe more in Audit members. in two Committee by of support in Vasta which low-income granted Institute, goes down has occupied we On Women where most six the Somos group the students more country are has Somos XXX certification. independent area the in to X,XXX Also which of in for woman highlighted governance the the hours important employees, Futuro, Board on courses women. formed earned finally the XX cities social preparatory Vasta Somos members of off us, for activities site, XX% than on support as low-income our only we leadership organization. than by offered and position full and mentoring this for the

slides. next the to on Moving

presentation, the As we to would on like progress our of end to the M&A. I comment

the firm. the of key IPO In of growth, system, of being have year. to so a most to learning and to since told the this EMME, a our until the [indiscernible] today end fifth we the the is services Vasta piece body the formation acquisition Guilherme, it acquisition the by by relevant our acquisition digital announced addition organic analyzed The and level far, expect approval of Brazilian one as

other and M&A stages. in are which Our transactions, remains pipeline rich are engaged we different several at

closing Now, I to called our remarks. will Bruno

Bruno Giardino

our which through acquire period our a up now new And next last presentation much. Thank shares to months, launch plan very in Ghio. and slide you up relatively also We'll first early is share our Q&A buyback you, week time. we open for announcement. million that, said program of Having session. finish to a X to today six I Thank short

Operator

Andres Scotiabank. First question Coello we have from [Operator Instructions]

line Your open. is

Andres Coello

the XXXX can Thank bottom press says approximately completed, for Cogna I question. of about we the release, you read taking the for with press in ACV organic very of cycle growth the XXXX. optimistic says Vasta. very it That's the release XX% what much about business are

us about color what you growth you. give you just school very the if you're seeing what give color for if bit expecting on little for wondering you're a XXXX So was can I just can next optimistic of ACV any Thank means double-digit or cycle? if

Guilherme Melega

question. some me Hi, Andres. This your for color Guilherme. yes, let our is about Thank And you campaign. give you

campaign. definitely are about optimistic We the

We keeping we double-digit target the we are we where but keeping similar ACV that mix. been in have and years better are seeing same trend a growth latest the trend for with

We also systems, PAR to which in better the are and better we are or targeting margins. paper-based products a products learning on digital give revenues resiliency in our and change platform us pursuing

in are top the partners, trend talk actually optimistic more a of that, heated a So same ACV with we market getting that they growth when enrollments. see are we better about is mix. on And we pursuing school of in our their

Andres Coello

much. very you thank Okay,

Mario Ghio

let's may comprised renewal contracts but schools, the right. Ghio. If with partner This the remember said, our only Andres. the Hi, not that new by Melega just contracts, complete is what ACV also is I

we are excellent low also right. I a mean, lower seeing churn, So, an churn, -- a

So a good -- we pointing the are commercial are so with why two ACV this cycle. far, optimistic factors we right, so with optimistic are to building, so that's

Andres Coello

much. very you Thank

Operator

Mario [Operator this like now questions Mr. further would Instructions] time I Ghio, I to conference back turn presenters. showing no the CEO. at am to

Mario Ghio

Thank in stay see all our earnings you and in you you safe We Bye-bye. to participating release. call. all next for hope our

Operator

today. our a much, participation Ladies very you your gentlemen, Thank you conference presenters. day. have this for and concludes for wonderful and Thank

You may all disconnect.

Vasta Platform Limited (VSTA) 13 Aug 212021 Q2 Earnings call transcript