VSTA - Earnings call transcript Q4 2023

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Operator

Good day, everyone, and welcome to the Vasta Platform Fourth Quarter 2023 Financial Results Call.

Before we begin, I would like to read forward-looking statements.

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

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

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

as assumptions are the management. and as statements include These with well Forward-looking and those based issuing press currently described information set filings our on on are in release Exchange risks we that available today beliefs forth fully our more management's and to those Commission. our in Securities the

The as based of are forward-looking on us available to this statements today. in the presentation information

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

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

the turn Marcelo now ahead. Werneck, will go Please call I Relations. Investor to over

Marcelo Werneck

for CFO, I of will from presence call. today, which Thank quarter Quarter Vasta's call we Fourth conference discuss Good Vasta's be of to sales evening, and XXXX of first this in Platform's joining CEO; the am October Full have the joining on Guilherme quarter September results. represented who us The Vasta 'XX also Investor Year to 'XX 'XX. Silva, Cesar the Werneck, goes me Marcelo fourth Relations. And Melega, the Vasta's cycle, and everyone. you

statement. floor his to now Guilherme the Melega opening Let me make hand over to

Guilherme Melega

of Slide unit. fiscal with would year, of in concluded revenue mostly to business net conversion ACV our year year. like BXG with growth into same some for highlights due Marcelo. you, to of release earnings participating the period XXXX the Thank call. over you the Vasta revenue XX% last and this the of performance all I #X cover Thank

billion. reached BRL Vasta revenue X.XXX subscription has

continues to to business student segment highest solutions compared rate accelerated complementary among showcasing with penetration. and and base the increase both XXXX growth an stand Our increase out, segments, with XX% market our a in

mentioned sector expansion in education sector year. the in generated million the XXXX the to we products marks contribute Vasta, started BRL The advanced us a Vasta to the public in into opportunity fiscal in Brazilian and sector its new creating last BXG in public Brazil allowing Moreover, service and revenue as XX momentous XXXX, to quarter, while from streams. to revenue for offer

a products. our In subscription and sales by driven of operating adjusted profitability. XX%, to growth This increase XXX while mix cost of efficiency, from reaching in gains million, experienced the to EBITDA company's Moving EBITDA growth the mainly BRL adjusted benefited was an XXXX, margin XX.X%. that savings increasing

growth our flow. as Finally, cash a this million was million, BRL XX% measures. implementation improved to rate improvement significant XX% free another in conversion to increase The XXXX, faster In year XXX of BRL free totaled result from and cash XX cash flow of in a XXXX. EBITDA XXX of million adjusted flow from BRL efficiency

will talk results and back about turn Marcelo financial XXXX fiscal I'll the to year. on quarter the

Marcelo Werneck

composition these Melega. net the In you, present of Vasta we revenue. Thank slides,

million. organic the by increased year-on-year for total reaching which left you observe XX%, can side, the the revenue quarter, On XXX fourth growth net in BRL

this key growth. revenue On right side, let's components detail of the the

quarter. dropped And of tax of increased million not XX revenue products, quarter. book in reaching PAR, the XX% BXG did had to XX%, XX% BRL from as XX%, amounting million, benefiting our BRL for also this Total we nonsubscription. record and our subscription an revenue to representing million. revenue subscription total of increase by migration BRL this Nonsubscription expected, XXX XX

for revenue billion. the to achieved Moving net amounting Slide BRL organic year. XX%, revenue 'XX analyze In of to XXXX, an X.XXX growth we fiscal we net #X, the

right, subscription PAR, can subscription an had X.XXX PAR, of the XX%, And our an amounting declined you total increase by the products, BRL excluding XXX see revenue billion. reaching X% increased million. X.XXX on XX% to BRL revenue, As in year, on our to billion. BRL Subscription basis textbook by organic

in Subscription in XX% to revenue contributed overall revenue. to revenue, revenue total comprises 'XX only X% now be XX to XX% our of representing and BRL our revenue the The and, XXX million. revenue continues generated the of to expected, revenue BXG total contributor major X% BRL of share. million as dropped Non-subscription

#X. amounted operational of margin the Slide efficiency. of XXX several attributed million strong dilution in BRL In million XX% fourth quarter performance XXX increase results, EBITDA cost and Moving This 'XX. our this the to be XX.X%, can to and an a BRL positive of adjusted sales including factors, quarter, to with from

million, side, the see On reached of XXX in also we right increased with and margin a EBITDA that BRL 'XX by XX.X%. XX% adjusted

to of slide move explain the the the now in XX points, 'XX. EBITDA observed adjusted next basis XX.X% #X, from to margin 'XX breakdown Slide In margin. in improved Let's EBITDA that and we XX.X%

percentage paper line X Firstly, a for in as doubtful credit costs the and or revised XXXX production was the declined PDA, gross inventory with landscape. higher percentage between year by years, rising caused industry faced points declined the point inflation accounts, costs. our that X.X margin the on Provision

discipline. a higher expenses expenses cash and improved marketing adjusted As driven net business of percentage and And X.X percentage to increased revenue, by expansion by workforce expenses points, mainly percentage related G&A optimization investments. by the budgetary driven commercial points, X.X by our

profit line. bottom a interest profit increase scenario of the in net of totaled the adjusted profit In million quarter costs adjusted Finance 'XX. to of profit reached 'XX. in in in rates million, net impact XX spike the fourth XX year, compared BRL XX% fiscal fourth from BRL of XX to net increase adjusted million an a adjusted continues XX% BRL net of million, XXXX, our a XX #X, XXXX BRL quarter Slide of

deleveraging, presentation. committed in However, you the this we as to further have see remained

Moving #X, cash flow evolution. to we the Slide show free

the Our negative increase cash million main XX free BRL to flow quarter one BRL the year. 'XX, compared the negative an totaled fourth In of of fourth of representing the XXX,XXX, in quarter 'XX. flow generation was the cash of highlights

XXXX, result measures. free the right on reached XXX XXX million cash side, flow growth in from Vasta's Now million, XX our in increase a BRL BRL the of a implementation 'XX, BRL as million efficiency of

improved metric, to our from be business. EBITDA flow our conversion the Another to focus generation key important that XX.X continues cash cash of rate message reinforcing XX.X, free to a

PDA fourth quarter XX #XX, Slide of representing the for expense provision compared we doubtful totaled expenses the X.X% XX BRL quarter. an to 'XX the BRL show Moving million with comparable net million, of in revenue accounts. of Total in to

as of right PDA undergoing the revenue. an In credit 'XX, PDA provision Amplia, judicial observe to of the promoting of slide, of we have values, retail we're linked of a average year refinement receivable Fibonacci. greater complementary PH, low-value premium our to mainstream the had to chosen shift lower the on from default such PDA adoption to growth cease is solutions relationships. high-quality recovery. 'XX that fiscal putting can foster of in customer and and in is Mckenzie systems grew increasingly from accounts where Moving the financing ticket brands to side In and These long-term tied impact Anglo, net schools. 'XX, education rates, XXX% base scenario of X.X% emphasis contracts show school This with companies X.X% strategy, we large review higher

fourth the average observe that to is of next was the of 'XX. than quarter portfolio fourth XX receivable accounts payment lower in we the slide, days days Moving the of which Vasta's 'XX, terms quarter XXX

Moving to Slide #XX.

look at debt a take net Let's closer movement. the

were year, million end to and 'XX, quarter by BRL a X.XXX the of mainly partially increased interest million net debt of which XX billion, also fiscal 'XX positive position impacts the M&A BRL expenses, of quarter In BRL billion, increase cash by driven to offset flow program fourth interest had compared share the Vasta X.XXX repurchase XXX a net financial 'XX. financial repurchase position in the the costs, 'XX, free of comparison from the million and the the of due third BRL of BRL share debt program. to XX costs As of

my EBITDA and ratio to adjusted #XX, of where as Slide fourth to that quarter can debt an with of fourth the which of when at net third 'XX compared will the X.Xx presentation observe X.XXx, to we the stands of marks the I quarter an improvement X.XXx conclude quarter of 'XX. compared of 'XX, improvement

said, Melega. CEO, our to pass With being that the word I'll Guilherme

Guilherme Melega

Thank you, Marcelo.

XX% XXXX, we commercial system cycle. increase growth our observed Fibonacci in Moving of cycle achieved as XXXX in with XXXX we to talk XX%. X.X a our and XX% Higher our BRL In comparison such PH, cycle subscription reputation of the reassuring commercial Traditional From ACV. the let's business. perception premium learning growth and XX, XXXX, of that Anglo, in contract have we to brands the signed. annual about rate of Slide represents compound revenue, Amplia, billion and quality remain ended our decisive will to in commercial

and increase the Complementary our solutions in X The with schools penetration em new products, our the a consistently Eduall. a that solutions surpassing across students ramp number continuing on with our Mind migration a served growth growth revenue, a products, as base. of by growth the offered the continue X,XXX subscription the business the XXXX rate to by XXX -- fee-per-student Textbook strategy, complementary And solutions our segments, from compared platform Makers, digital partner XX% among concentrated invest to highest schools of our Service basis. subscription current main in XX% schools, cycle Mim base PAR, PAR client will is we uses paper-based and solutions: solutions. to have The up increased Lider over finally, complementary in to

Slide XX. Moving to

Let an significant me avenue on provide growth. you our of exciting update with

excellence, last to are X that launch combined Start have academic mentioned our of Anglo quarter, we franchise, And with in revenue. signifies new we the quest bilingualism strategic a units operational expansion currently happy for report fully in As XXXX.

José flagship São of which we additionally, with our in students, is Rio Alphaville franchise boasting do And XXX with over surpassing operating have institution Furthermore, students. our a in target Preto, prestigious XXX operations inaugural franchise is execution exceeding contract commence XXX secured first play XXXX. a students. Sao in our will business is The in Liceu to in under optimistic a that in XX the planned the Pasteur Paulo, strategy. for successful new With pivotal brand Anglo are our place, Start role we contracts of a model already flagship expectations, this

sector BXG finally, and sector. when we another serve the to we this XXXX, public from million And XX growth expanded renewed let in XX. generated service Brazilian avenue, me contract an the products provide BXG marked our in for initiative. XXXX. BRL revenue Slide you the to XXXX update already Moving and year have on our We

We the tailored are very education and optimistic are to deliver public the unique about development of presents the solutions committed sector. possibilities needs high-quality to this

of all our in XXXX us and an accomplishments journey. these future favorably the to challenges. With in extraordinary was face position achievements These milestone mind, another year

the outstanding that, and I'll finish we to solidify that education in confidence partnerships session. to make our to our contribution all the for continue have our are significant presentation We you shareholders, results on right a said Q&A invite delivering the path and country. Having

Operator

first Instructions] question JPMorgan. We Marcelo from our with take [Operator Santos will

Marcelo Santos

X. I have actually

an things the that terms year? up give the of The evolution ACV to of like the Could ACV. the volume, first is in Could dynamics. these discuss the to on idea previous question understand Just price versus cycle have you moved churn? XXXX how you you

was outlook that margin the second but if presentation really for XXXX. the couldn't I get the on far. And slide, is question Sorry the regarding so

behind, in to kind the So parts now outlook here that the that have I it's to the good mean like terms going What pressures of for -- understand a XXXX. are it for evolution case? cost evolution what of margin margin of looks you the XXXX? Is moving be

Guilherme Melega

for Marcelo, question. thanks very much your

details, consider but details about bit the ACV. that. about a you Let you the disclosure to now since little we results, me give I And will color about the can only some some about give delivering the reduce color player ACV we are

on terms breakeven and growth growth much much better volume, in ACV. pricing on the our pretty of ACV pretty of relies major and mix. are That's We our drivers

are of with Cost aimed a terms would spend But to good new I very we terms we and of pressures year already savings. redundancy had process us, in in and we in contracts. the reducing behind in commercially XX% acquiring savings that say And margins, for. we margin definitely reached intend SG&A

the not should So forecast the we major do so in improvements margin, be they XX% level. around

Operator

America. question with from Bank Oliveira next take our of [ We'll ] Instructions] [Operator Mariella

Unknown Analyst

question the past one a the the if of -- driven Could growth a you traditional implies the the have learning that second a could system on bit a growth the deceleration little this you perspective. you if solutions, question, just is so on more deceleration here? years. BXG or any for the contract mix next the I on renewed? it's provide complementary comment lower And little year details slight by The bit from more ACV on

Guilherme Melega

very you for your Mariella questions. Thank much, [ ],

the So complementary ACV, boosting most grow. growth we we grew in keep we of definitely the It's room the product more cycle, pace. more where intend is than We that less terms have. to keep XX% fasting have and to

premium a have growth more of market. system, In a is system. focus It's brands. strategy on learning penetrated products we our terms learning of And slower from to

Mckenzie. focusing focus main lever complementary be premium on for growth. focus system This and the our will the we for will growth, learning Amplia on but Anglo, major PH, the is So schools

BXG, that the pretty year. had renewed contract last we much terms regarding same And PARA, with our we in

a So already accomplishment. it's huge

So We'll business will to contracts our from book soon. the XXXX. very growth that keep we same on are new left the we confident start And the level very same.

expect already have heated QX. a pipeline. contract, anyone in for we PARA And for we sales yet. time on contracts the have have signed QX, the being, don't the have we But new We and very to

about can with just I our So the share positive you sensation business.

Operator

Melega are there to closing turn call time. questions And back to I'd over Instructions] remarks. further Guilherme [Operator the like this at no for

Guilherme Melega

QX conference very all for call. Vasta much attending the you Thank

to results proud XXXX. that very in reached deliver are We the we

EBITDA, a grew XXX%. to grew mention our free XX%; few: Just our our cash XX%; revenue flow

for major year municipalities. and states we solid up, Start being significant seeing very contracts our results. a pipeline So positive very contracts, It's BXB, XXXX we signed. good the new a And year also and And we new last We very company. huge franchisees opened aiming are very at Anglo launched new for the momentum. the with piling are

So we new much. soon. definitely very contracts expect very all you to Thank have

Looking QX call. forward conference to the see in you

Operator

you Thank your Thank for you participation, you. That does conclude and presentation. now disconnect. today's may

Vasta Platform Limited (VSTA) 20 Mar 242023 Q4 Earnings call transcript