High and Predictable Growth
Full Year 2023 Guidance Reaffirmed
Afya Limited (Nasdaq: AFYA) (“Afya” or the “Company”),
the leading medical education group and digital health services
provider in Brazil, reported today financial and operating results
for the three-month period ended March 31, 2023 (first quarter
2023). Financial results are expressed in Brazilian Reais and are
presented in accordance with International Financial Reporting
Standards (IFRS).
First Quarter 2023 Highlights
- 1Q23 Adjusted Net Revenue increased 25.0% YoY to R$709.4
million. Adjusted Net Revenue excluding acquisitions grew 13.5%,
reaching R$644.3 million.
- 1Q23 Adjusted EBITDA increased 21.9% YoY reaching R$330.2
million, with an Adjusted EBITDA Margin of 46.5%. Adjusted EBITDA
excluding acquisitions grew 12.3%, reaching R$304.2 million, with
an Adjusted EBITDA Margin of 47.2%.
- Cash conversion of 111.9%, with a solid cash position of R$
722.7 million.
- ~295 thousand monthly active physicians and medical students
using Afya’s Digital Services.
Table 1: Financial Highlights For the three months period
ended March 31, (in thousand of R$)
2023
2023 Ex Acquisitions*
2022
% Chg
% Chg Ex Acquisitions
(a) Net Revenue
709,961
644,849
566,324
25.4%
13.9%
(b) Adjusted Net Revenue (1)
709,383
644,271
567,716
25.0%
13.5%
(c) Adjusted EBITDA (2)
330,211
304,231
270,801
21.9%
12.3%
(d) = (c)/(b) Adjusted EBITDA Margin
46.5%
47.2%
47.7%
-120 bps -50 bps *For the three months period ended March
31, 2023, "2023 Ex Acquisitions" excludes: Alem da Medicina
(January & February 2023; Closing of Alem da Medicina was in
March, 2022), Glic, Cardiopapers and UNIT Alagoas and FITS Jaboatão
dos Guararapes (all from January to March, 2023). (1) Includes
mandatory discounts in tuition fees granted by state decrees and
individual/collective legal proceedings and public civil
proceedings due to COVID 19 on site classes restriction and
excludes any recovery of these discounts that were invoiced based
on the Supreme Court decision. (2) See more information on
"Non-GAAP Financial Measures" (Item 07).
Message from Management
For us in Afya, these results indicate another great start for
the year ahead. We are proud to present, once again, strong
results, reaffirming the success and resilience of Afya, along with
high and predictable growth, and a solid cash generation.
This quarter was marked by significant increases in net revenue
within our three segments and we are delighted to see that the most
significant growth came from our Continue Education segment with a
robust intake process, six new campuses, and course maturation.
Our second most significant growth came from our core business,
as we saw higher tickets in Medicine courses, maturation of medical
seats, the beginning of 4 Mais Médicos campuses, consolidation of
UNIT Alagoas and FITS Jaboatão dos Guararapes acquisition, and the
consolidation of 92 new medical seats, 28 in the UniSL Ji-Paraná
campus, located in Rondônia, and 64 in Faculdade Santo Agostinho,
in the city of Itabuna, situated in the state of Bahia.
And, once again, Afya reported great results on the Digital
Health Services revenue, which ended the quarter with an increase
of 20% when compared to last year. This result reinforces the
opportunity ahead in Digital Services, and it is explained by the
ramp-up in B2B engagements, with new contracts with the
pharmaceutical industry companies, and the continuous ramp-up in
B2P contracts, as we will discuss further on.
High and predictable growth, strong guidance for the year, and
segments ramp-up: this proves how we are evolving and empowering
our vision to transform health together with those who have
medicine as a vocation. We are proud of our business and also
excited for what comes next during this year.
1. Key Events in the Quarter:
- Afya announced on January 2nd, 2023, the closing of its
acquisition of 100% of the total share capital of Sociedade
Educacional e Cultural Sergipe DelRey Ltda. (“DelRey”), that
encompasses the operations of Centro Universitário Tiradentes
Alagoas (“UNIT Alagoas”) and Faculdade Tiradentes Jaboatão dos
Guararapes (“FITS Jaboatão dos Guararapes”), on the terms
previously disclosed.
- Afya announced on January 31st, 2023, that it is one of 484
companies across 45 countries and regions to join the 2023
Bloomberg Gender-Equality Index (GEI), a modified market
capitalization-weighted index that aims to track the performance of
public companies committed to transparency in gender-data
reporting. This reference index measures gender equality across
five pillars: leadership & talent pipeline, equal pay &
gender pay parity, inclusive culture, anti-sexual harassment
policies, and external brand. For the second time in a row, Afya
was included on the index for scoring above a global threshold
established by Bloomberg to reflect disclosure and the achievement
or adoption of best-in-class statistics and policies, being 1 of 16
Brazilian companies included in the index this year.
- Fourth share repurchase program, on March 2023 - the Board of
Directors approved a new share repurchase program. Under this share
repurchase program, Afya may repurchase up to 2,000,000 of its
outstanding Class A common shares which represents approximately
5.8% of its free float in accordance with the conditions
established by the Board of Directors on March 24, 2023.
Accordingly, in connection with repurchases under the new program,
Afya also announced that entered into a written trading plan with
BofA Securities, Inc., as the independent broker-dealer, which is
intended to comply with the requirements of Rule 10b5-1 and Rule
10b-18 each under the Securities and Exchange Act of 1934, as
amended.
2. 2023 Guidance
The Company is reaffirming its previously issued guidance for
2023 which considers the successfully concluded acceptances of new
students, ensuring 100% occupancy in all of its medical
schools.
Considering the above factors, the guidance for 2023 is defined
in the following table:
Guidance for 2023 Adjusted Net Revenue* R$ 2,750 mn ≤ ∆ ≤ R$
2,850 mn Adjusted EBITDA R$ 1,100 mn ≤ ∆ ≤ R$ 1,200 mn
Includes UNIT Alagoas and FITS Jaboatão dos Guararapes'
acquisitions;Includes the increase of 64 medical seats of Faculdade
Santo Agostinho, in the city of Itabuna;Excludes any acquisition
that may be concluded after the issuance of the guidance.
3. 1Q23 Overview
Operational Review
Afya is the only Company offering educational and technological
solutions to support physicians across every stage of their medical
career, from undergraduate students in their medical school years
through medical residency preparatory courses, medical
specialization programs, and continuing medical education. The
Company also offers solutions to empower physicians in their daily
routine, including supporting clinic decisions through mobile app
subscription, delivering practice management tools through a
Software as a Service (SaaS) model, and assisting physicians in
their relationship with their patients.
The Company reports results for three distinct business units -
the first, Undergrad – medical schools, other healthcare programs,
and ex-health degrees. Revenue is generated from the monthly
tuition fees the Company charges students enrolled in the
undergraduate programs - the second, Continuing Education –
specialization programs and graduate courses for physicians.
Revenue is also generated from the monthly tuition fees the Company
charges students enrolled in the specialization and graduate
courses. The third is Digital Services – digital services offered
by the Company at every stage of the medical career. This business
unit is divided into Business to Physician (which encompasses
Content & Technology for Medical Education, Clinical Decision
Software, Practice Management Tools & Electronic Medical
Records, Physician-Patient Relationship, Telemedicine, and Digital
Prescription) and Business to Business (which provides access and
demand for the healthcare players). Revenue is generated from
printed books and e-books and is recognized at the point in time
when control is transferred to the customer, and subscription fees,
which are recognized as the services, are transferred over
time.
Key Revenue Drivers – Undergraduate Courses
Table 2: Key Revenue Drivers Three months period ended
March 31,
2023
2022
% Chg Undergrad Programs MEDICAL SCHOOL
Approved Seats
3,163
2,759
14.6%
Operating Seats
3,113
2,481
25.5%
Total Students (end of period)
20,822
17,523
18.8%
Average Total Students
20,822
17,523
18.8%
Average Total Students (ex-Acquisitions)*
18,819
17,523
7.4%
Tuition Fees (Total - R$ '000)
630,960
501,523
25.8%
Tuition Fees (ex- Acquisitions* - R$ '000)
573,747
501,523
14.4%
Medical School Gross Avg. Ticket (ex- Acquisitions* -
R$/month)
10,163
9,540
6.5%
Medical School Net Avg. Ticket (ex- Acquisitions* -
R$/month)
8,517
7,861
8.3%
UNDERGRADUATE HEALTH SCIENCE Total Students (end of period)
21,660
20,902
3.6%
Average Total Students
21,660
20,902
3.6%
Average Total Students (ex-Acquisitions)*
19,788
20,902
-5.3%
Tuition Fees (Total - R$ '000)
97,968
78,310
25.1%
Tuition Fees (ex- Acquisitions* - R$ '000)
90,296
78,310
15.3%
OTHER UNDERGRADUATE Total Students (end of period)
25,043
24,209
3.4%
Average Total Students
25,043
24,209
3.4%
Average Total Students (ex-Acquisitions)*
21,882
24,209
-9.6%
Tuition Fees (Total - R$ '000)
77,174
69,182
11.6%
Tuition Fees (ex- Acquisitions* - R$ '000)
66,889
69,182
-3.3%
TOTAL TUITION FEES Tuition Fees (Total - R$ '000)
806,101
649,015
24.2%
Tuition Fees (ex- Acquisitions* - R$ '000)
730,932
649,015
12.6%
*For the three months period ended March 31, 2023, "2023 Ex
Acquisitions" excludes: Alem da Medicina (January & February
2023; Closing of Alem da Medicina was in March, 2022), Glic,
Cardiopapers and UNIT Alagoas and FITS Jaboatão dos Guararapes (all
from January to March, 2023).
Key Revenue Drivers – Continuing Education and Digital
Services
Table 3: Key Revenue Drivers Three months period ended
March 31,
2023
2022
% Chg
Continuing Education Medical Specialization &
Others Total Students (end of period)
4,774
3,479
37.2%
Average Total Students
4,774
3,479
37.2%
Average Total Students (ex-Acquisitions)
4,774
3,479
37.2%
Net Revenue from courses (Total - R$ '000)
34,960
23,851
46.6%
Net Revenue from courses (ex- Acquisitions¹)
34,960
23,851
46.6%
Digital Services Content & Technology for Medical
Education Medcel Active Payers Prep Courses & CME - B2P
6,147
11,673
-47.3%
Prep Courses & CME - B2B
5,988
4,574
30.9%
Além da Medicina Active Payers
6,222
6,345
-1.9%
Cardiopapers Active Payers
7,083
-
-
Medical Harbour Active Payers
21,686
-
-
Clinical Decision Software Whitebook Active Payers
143,832
131,193
9.6%
Clinical Management Tools² iClinic Active Payers
23,740
19,622
21.0%
Shosp Active Payers
2,881
2,278
26.5%
Digital Services Total Active Payers (end of period)
217,579
175,685
23.8%
Net Revenue from Services (Total - R$ '000)
56,792
47,477
19.6%
Net Revenue - B2P
46,603
41,197
13.1%
Net Revenue - B2B
10,187
6,280
62.2%
Net Revenue From Services (ex-Acquisitions¹)
49,834
47,477
5.0%
*For the three months period ended March 31, 2023, "2023 Ex
Acquisitions" excludes: Alem da Medicina (January & February
2023; Closing of Alem da Medicina was in March, 2022), Glic,
Cardiopapers and UNIT Alagoas and FITS Jaboatão dos Guararapes (all
from January to March, 2023). (2) Clinical management tools
includes Telemedicine and Digital Prescription features.
Key Operational Drivers – Digital Services
Monthly Active Users (MaU) represents the number of unique
individuals that consumed Digital Services content in each one of
our products in the last 30 days of a specific period. Total
monthly active users reached almost 295 thousand, 13.6% higher than
the same period of last year.
Monthly Unique Active Users (MuaU) represents the number of
unique individuals, without overlap of users among products, in the
last 30 days of a specific period.
Table 4: Key Operational Drivers for Digital Services - Monthly
Active Users (MaU)
1Q23
1Q22
% Chg YoY
4Q22
Content & Technology for Medical Education
31,549
21,464
47.0%
16,539
Clinical Decision Software
237,003
218,313
8.6%
221,762
Clinical Management Tools¹
24,568
19,762
24.3%
20,936
Physician-Patiet Relationship
1,773
-
1,473
Total Monthly Active Users (MaU) - Digital Services
294,893
259,539
13.6%
260,710
1) Clinical management tools includes Telemedicine and Digital
Prescription features Includes Shosp, Medicinae and Além da
Medicina starting in 1Q22 and Cardiopapers and Glic starting in
2Q22
Table 5: Key Operational Drivers for Digital
Services - Monthly Unique Active Users (MuaU)
1Q23
1Q22
% Chg QoQ
4Q22
Total Monthly Unique Active Users (MuaU) - Digital
Services
262,137
242,374
8.2%
241,949
1) Total Monthly Unique Active Users excludes non-integrated
companies: Medical Harbour, Medicinae, Shosp, Além da Medicina,
Cardiopapers and Glic
Seasonality
Undergrad’s tuition revenues are related to the intake process
and monthly tuition fees charged to students over the period; thus
does not have significant fluctuations during the semester.
Continuing Education revenues are related to monthly intakes and
tuition fees and do not have a considerable concentration in any
period. Digital Services is comprised mainly of Medcel, Pebmed, and
iClinic revenues. While Pebmed and iClinic do not have significant
fluctuation regarding seasonality, Medcel’s revenue is concentrated
in the first and last quarter of the year due to the enrollments of
Medcel’s clients period. In addition, the majority of Medcel’s
revenues are derived from printed books and e-books, which are
recognized at the point in time when control is transferred to the
customer. Consequently, the Digital Services segment generally has
higher revenues and results of operations in the first and last
quarters of the year than in the second and third quarters.
Revenue
Adjusted Net Revenue for the first quarter of 2023 was R$709.4
million, an increase of 25.0% over the same period of the prior
year, mainly due to higher tickets in Medicine courses in 8.3%,
maturation of medical seats, the beginning of 4 Mais Médicos
campuses, consolidation of UNIT Alagoas and FITS Jaboatão dos
Guararapes acquisition, the Continuing Education high performance
and Digital Services execution.
The Digital Services segment increased 19.6% year over year, a
combination of (a) B2B engagements, and (b) expansion of the active
payers in the B2P, mainly in Whitebook, iClinic, and Shosp,
partially offset by the lower performance of Medcel, due to a
higher competition scenario in the Residency Preparatory market;
and (c) consolidation of Alem da Medicina, Glic, and
Cardiopapers.
Table 6: Revenue & Revenue Mix (in thousands of R$)
For the three months period ended March 31,
2023
2023 Ex Acquisitions*
2022
% Chg
% Chg Ex Acquisitions
Net Revenue Mix Undergrad
620,976
562,822
495,395
25.3%
13.6%
Adjusted Undergrad¹
620,398
562,244
496,787
24.9%
13.2%
Continuing Education
34,960
34,960
23,851
46.6%
46.6%
Digital Services
56,792
49,834
47,477
19.6%
5.0%
Inter-segment transactions
- 2,767
- 2,767
- 399
n.a
593.5%
Total Reported Net Revenue
709,961
644,849
566,324
25.4%
13.9%
Total Adjusted Net Revenue ¹
709,383
644,271
567,716
25.0%
13.5%
*For the three months period ended March 31, 2023, "2023 Ex
Acquisitions" excludes: Alem da Medicina (January & February
2023; Closing of Alem da Medicina was in March, 2022), Glic,
Cardiopapers and UNIT Alagoas and FITS Jaboatão dos Guararapes (all
from January to March, 2023). (1) Includes mandatory discounts in
tuition fees granted by state decrees and individual/collective
legal proceedings and public civil proceedings due to COVID 19 on
site classes restriction and excludes any recovery of these
discounts that were invoiced based on the Supreme Court decision.
(2) See more information on "Non-GAAP Financial Measures" (Item
07).
Adjusted EBITDA
Adjusted EBITDA for the three-month period ended March 31, 2023,
increased 21.9% to R$330.2 million, up from R$270.8 million in the
same period of the prior year, and the Adjusted EBITDA Margin
decreased 120 basis points to 46.5%. The Adjusted EBITDA Margin
reduction is mainly due to the following: (a) Digital segment,
primarily due to Medcel’s performance; and (b) consolidation of 4
new Mais Médicos campuses (operation started on 3Q22) and UNIT
Alagoas and FITS Jaboatão dos Guararapes which are performing
better than expected but still present lower margins when compared
to the integrated companies.
Table 7: Adjusted EBITDA (in thousands of R$)
For the
three months period ended March 31,
2023
2023 Ex Acquisitions*
2022
% Chg
% Chg Ex Acquisitions
Adjusted EBITDA
330,211
304,231
270,801
21.9%
12.3%
% Margin
46.5%
47.2%
47.7%
-120 bps -50 bps *For the three months period ended March 31, 2023,
"2023 Ex Acquisitions" excludes: Alem da Medicina (January &
February 2023; Closing of Alem da Medicina was in March, 2022),
Glic, Cardiopapers and UNIT Alagoas and FITS Jaboatão dos
Guararapes (all from January to March, 2023).
Adjusted Net Income
Net Income for the first quarter of 2023 was R$117.8 million, a
decrease of 12.7% over the same period of the prior year. Adjusted
Net Income for the first quarter of 2023 was R$166.4 million, in
line with the same period from the previous year, mainly due to
better operational performance, which was offset by higher
financial expenses, mainly related to the increase in leverage due
to UNIT Alagoas and FITS Jaboatao business combination and higher
interest rates, when compared to the same period of the prior
year.
Table 8: Adjusted Net Income (in thousands of R$)
For the
three months period ended March 31,
2023
2022
% Chg
Net income
117,772
134,942
-12.7%
Amortization of customer relationships and trademark (1)
24,203
18,283
32.4%
Share-based compensation
6,495
2,929
121.7%
Non-recurring expenses:
17,907
11,027
62.4%
- Integration of new companies (2)
5,900
4,171
41.5%
- M&A advisory and due diligence (3)
11,039
1,212
810.8%
- Expansion projects (4)
151
602
-74.9%
- Restructuring expenses (5)
1,395
3,650
-61.8%
- Mandatory Discounts in Tuition Fees (6)
- 578
1,392
n.a.
Adjusted Net Income
166,377
167,181
-0.5%
Basic earnings per share - in R$ (7)
1.25
1.42
-12.0%
Adjusted earnings per share - in R$ (8)
1.77
1.77
0.0%
(1) Consists of amortization of customer relationships and
trademark recorded under business combinations. (2) Consists of
expenses related to the integration of newly acquired companies.
(3) Consists of expenses related to professional and consultant
fees in connection with due diligence services for our M&A
transactions. (4) Consists of expenses related to professional and
consultant fees in connection with the opening of new campuses. (5)
Consists of expenses related to the employee redundancies in
connection with the organizational restructuring of our acquired
companies. (6) Consists of mandatory discounts in tuition fees
granted by state decrees, individual/collective legal proceedings
and public civil proceedings due to COVID 19 on site classes
restriction and excludes any recovery of these discounts that were
invoiced based on the Supreme Court decision. (7) Basic earnings
per share: Net Income/Weighted average number of outstanding
shares. (8) Adjusted earnings per share: Adjusted Net Income
attributable to equity holders of the Parent/Weighted average
number of outstanding shares.
Cash and Debt Position
On March 31, 2023, Cash and Cash Equivalents were R$722.7
million, a decrease of 33.9% over December 31, 2022, due to UNIT
Alagoas and FITS Jaboatão dos Guararapes business combination.
For the three-month period ended March 31, 2023, Afya reported
Adjusted Cash Flow from Operations of R$349.4 million, up from
R$293.6 million in the same period of the previous year, an
increase of 19.0% YoY, boosted by the solid operational results.
Operating Cash Conversion Ratio was 111.9% for the three-month
period that ended on March 31, 2023.
On March 31, 2023, Net Debt, excluding the effect of IFRS 16,
totaled R$2,029 million. When compared to December 31, 2022 Net
Debt added to R$825 million related to UNIT Alagoas and FITS
Jaboatão dos Guararapes business combination closed on January 2,
2023, the Net Debt reduced R$ 177 million due to the strong cash
flow generation in the quarter.
The following table shows more information regarding the cost of
debt of 1Q23, considering loans and financing, capital market, and
accounts payable to selling shareholders. Afya’s capital structure
remains solid with a conservative leveraging position and a low
cost of debt.
Table 9: Operating Cash Conversion Ratio Reconciliation
For the three months period ended March 31, (in thousands of
R$)
Considering the adoption of IFRS 16
2023
2022
% Chg
(a) Cash flow from operations
331,554
278,715
19.0%
(b) Income taxes paid
17,819
14,850
20.0%
(c) = (a) + (b) Adjusted cash flow from operations
349,373
293,565
19.0%
(d) Adjusted EBITDA
330,211
270,801
21.9%
(e) Non-recurring expenses:
17,907
11,027
62.4%
- Integration of new companies (1)
5,900
4,171
41.5%
- M&A advisory and due diligence (2)
11,039
1,212
810.8%
- Expansion projects (3)
151
602
-74.9%
- Restructuring Expenses (4)
1,395
3,650
-61.8%
- Mandatory Discounts in Tuition Fees (5)
-578
1,392
n.a.
(f) = (d) - (e) Adjusted EBITDA ex- non-recurring expenses
312,304
259,774
20.2%
(g) = (c) / (f) Operating cash conversion ratio
111.9%
113.0%
-110 bps
(1) Consists of expenses related to the integration of newly
acquired companies. (2) Consists of expenses related to
professional and consultant fees in connection with due diligence
services for M&A transactions. (3) Consists of expenses related
to professional and consultant fees in connection with the opening
of new campuses. (4) Consists of expenses related to the employee
redundancies in connection with the organizational restructuring of
acquired companies. (5) Consists of mandatory discounts in tuition
fees granted by state decrees, individual/collective legal
proceedings and public civil proceedings due to COVID 19 on site
classes restriction and excludes any recovery of these discounts
that were invoiced based on the Supreme Court decision.
Table
10: Gross Debt and Average Cost of Debt (in millions of R$)
For the three months period ended March 31, Cost of
Debt Gross Debt Duration (Years) per year
%CDI* Loans and financing: Softbank
825
3.1
6.5%
48%
Capital Market
519
4.4
15.7%
114%
Loans and financing: Others
580
1.9
15.7%
114%
Accounts payable to selling shareholders
828
1.2
13.3%
97%
Average
2,751
2.6
12.1%
89%
**Based on the annualized Interbank Certificates of Deposit ("CDI")
rate for the period as a reference:1Q23: ~13.65% p.y.
Table 11:
Cash and Debt Position (in thousands of R$)
1Q23
FY2022
% Chg
1Q22
% Chg
(+) Cash and Cash Equivalents
722,691
1,093,082
-33.9%
789,435
-8.5%
Cash and Bank Deposits
28,375
57,509
-50.7%
42,648
-33.5%
Cash Equivalents
694,316
1,035,573
-33.0%
746,787
-7.0%
(-) Loans and Financing
1,923,737
1,882,901
2.2%
1,388,841
38.5%
Current
193,214
145,202
33.1%
142,654
35.4%
Non-Current
1,730,523
1,737,699
-0.4%
1,246,187
38.9%
(-) Accounts Payable to Selling Shareholders
769,274
528,678
45.5%
698,413
10.1%
Current
417,398
261,711
59.5%
264,520
57.8%
Non-Current
351,876
266,967
31.8%
433,893
-18.9%
(-) Other Short and Long Term Obligations
58,702
62,176
-5.6%
70,880
-17.2%
(=) Net Debt (Cash) excluding IFRS 16
2,029,022
1,380,673
47.0%
1,368,699
48.2%
(-) Lease Liabilities
864,983
769,525
12.4%
733,420
17.9%
Current
38,026
32,459
17.2%
27,750
37.0%
Non-Current
826,957
737,066
12.2%
705,670
17.2%
Net Debt (Cash) with IFRS 16
2,894,005
2,150,198
34.6%
2,102,119
37.7%
CAPEX
Capital expenditures consist of the purchase of property and
equipment and intangible assets, including expenditures mainly
related to the expansion and maintenance of our campuses and
headquarters, leasehold improvements, and the development of new
solutions in the digital segment, among others.
For the three-months period ending March 31, 2023, CAPEX was
R$46.4 million, representing 6.5% of Afya’s Net Revenue.
Table 12: CAPEX (in thousands of R$)
For the three months
period ended March 31,
2023
2022
% Chg
CAPEX
46,429
76,759
-39.5%
Property and equipment
27,299
30,670
-11.0%
Intanglibe assets
19,130
46,088
-58.5%
- Licenses
0
24,408
n.a. - Others
19,130
21,680
-11.8%
ESG Metrics
ESG commitment is essential to Afya’s strategy and permeates the
Company’s core values. Afya has been advancing year after year on
its core pillars, and since 2021, ESG metrics have been disclosed
in the Company’s quarterly financial results.
On January 2023, Afya announced it is one of 484 companies
across 45 countries and regions to join the 2023 Bloomberg
Gender-Equality Index (GEI), a modified market
capitalization-weighted index that aims to track the performance of
public companies committed to transparency in gender-data
reporting. This reference index measures gender equality across
five pillars: leadership & talent pipeline, equal pay &
gender pay parity, inclusive culture, anti-sexual harassment
policies, and external brand. In addition, for the second time in a
row, Afya was included on the index for scoring above a global
threshold established by Bloomberg to reflect disclosure and the
achievement or adoption of best-in-class statistics and policies,
being 1 of 16 Brazilian companies included in the index this
year.
Furthermore, the 2021 Sustainability Report can be found at:
https://ir.afya.com.br/ >> Corporate Governance >>
Sustainability.
Table 13: ESG Metrics
1Q23
1Q22
2022
2021
2020
2019
#
GRI
Governance and Employee
Management
1
405-1
Number of employees
9,567
8,528
8,708
8,079
6,100
3,369
2
405-1
Percentage of female
employees
57%
56%
57%
55%
55%
57%
3
405-1
Percentage of female employees in
the board of directors
40%
18%
40%
18%
18%
22%
4
102-24
Percentage of independent member
in the board of directors
30%
36%
30%
36%
36%
22%
Environmental
4
302-1
Total energy consumption
(kWh)
5,468,733
3,678,812
17,011,842
12,176,966
8,035,845
5,928,450
4.1
302-1
Consumption per campus
118,855.5
96,811
412,747
385,573
321,434
395,230
5
302-1
% supplied by distribution
companies
79.0%
75.0%
72.4%
91.3%
83.4%
96.2%
6
302-1
% supplied by other sources
21.0%
25.0%
27.6%
8.7%
16.6%
3.8%
Social
8
413-1
Number of free clinical
consultations offered by Afya
116,979
80,751
494,635
341,286
427,184
270,000
9
Number of physicians graduated in
Afya's campuses
18,126
16,824
18,104
16,772
12,691
8,306
10
201-4
Number of students with financing
and scholarship programs (FIES and PROUNI)
9,619
8,223
10,965
7,881
4,999
2,808
11
% students with scholarships over
total undergraduate students
14.2%
13.1%
18.8%
12.9%
13.7%
11.7%
12
413-1
Hospital, clinics and city halls
partnerships
718
447
662
447
432
60
(1) Some factors can influence in the adequate proportionality
analysis of data over the years, such as: climate changes, COVID-19
pandemic effects, seasonalities, number of employees, number of
students, number of active units, among others. (2) "Other sources"
refers to: (a) Derived from renewable sources, such as solar panels
installed in the units; and (b) Derived from the search for
alternative energy options in the market. (3) Starting in 2Q22,
previously disclosed environmental data were updated to consider:
(a) GHG Protocol guidelines improvements, and (b) additional
data-collection criteria refinements. (4) Starting in 2Q22,
previously disclosed social data were updated to consider: (a) the
number of graduated physicians considering all units after its
closing, and (b) partnerships related only to medical schools.
4. Conference Call and Webcast Information
When:
March 24, 2023 at 5:00 p.m. ET.
Who:
Mr. Virgilio Gibbon, Chief Executive
Officer
Mr. Luis André Blanco, Chief Financial
Officer
Ms. Renata Costa Couto, IR Director
Webcast:
https://afya.zoom.us/j/96259212642
OR
Dial-in:
Brazil: +55 11 4700 9668 or +55 21 3958
7888 or +55 11 4632 2236 or +55 11 4632 2237 or +55 11 4680
6788
United States: +1 253 205 0468 or +1 253
215 8782 or +1 301 715 8592 or +1 305 224 1968 or +1 309 205 3325
or +1 312 626 6799 or +1 346 248 7799 or +1 360 209 5623 or +1 386
347 5053 or +1 507 473 4847 or +1 564 217 2000 or +1 646 931 3860
or +1 669 444 9171 or +1 669 900 6833 or +1 689 278 1000 or +1 719
359 4580 or +1 929 205 6099
Webinar ID: 962 5921 2642
Other Numbers:
https://afya.zoom.us/u/aXW4bIxA
5. About Afya Limited (Nasdaq: AFYA)
Afya is a leading medical education group in Brazil based on the
number of medical school seats, delivering an end-to-end
physician-centric ecosystem that serves and empowers students and
physicians to transform their ambitions into rewarding lifelong
experiences from the moment they join us as medical students
through their medical residency preparation, graduation program,
continuing medical education activities and offering digital
products to help doctors enhance their healthcare services through
their whole career. For more information, please visit
www.afya.com.br.
6. Forward – Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, which statements involve substantial risks and uncertainties.
All statements other than statements of historical fact could be
deemed forward looking, and include risks and uncertainties related
to statements about our competition; our ability to attract, upsell
and retain students; our ability to increase tuition prices and
prep course fees; our ability to anticipate and meet the evolving
needs of students and professors; our ability to source and
successfully integrate acquisitions; general market, political,
economic, and business conditions; and our financial targets such
as revenue, share count and IFRS and non-IFRS financial measures
including gross margin, operating margin, net income (loss) per
diluted share, and free cash flow. Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain, such as statements about the potential impacts of the
COVID-19 pandemic on our business operations, financial results and
financial position and the Brazilian economy.
The Company undertakes no obligation to update any
forward-looking statements made in this press release to reflect
events or circumstances after the date of this press release or to
reflect new information or the occurrence of unanticipated events,
except as required by law. The achievement or success of the
matters covered by such forward-looking statements involves known
and unknown risks, uncertainties and assumptions. If any such risks
or uncertainties materialize or if any of the assumptions prove
incorrect, our results could differ materially from the results
expressed or implied by the forward-looking statements we make.
Readers should not rely upon forward-looking statements as
predictions of future events. Forward-looking statements represent
management’s beliefs and assumptions only as of the date such
statements are made. Further information on these and other factors
that could affect the Company’s financial results are included in
the filings made with the United States Securities and Exchange
Commission (SEC) from time to time, including the section titled
“Risk Factors” in the most recent Rule 434(b) prospectus. These
documents are available on the SEC Filings section of the investor
relations section of our website at: https://ir.afya.com.br/.
7. Non-GAAP Financial Measures
To supplement the Company's consolidated financial statements,
which are prepared and presented in accordance with International
Financial Reporting Standards as issued by the International
Accounting Standards Board—IASB, Afya uses Adjusted EBITDA and
Operating Cash Conversion Ratio information, which are non-GAAP
financial measures, for the convenience of investors. A non-GAAP
financial measure is generally defined as one that intends to
measure financial performance but excludes or includes amounts that
would not be equally adjusted in the most comparable GAAP
measure.
Afya calculates Adjusted EBITDA as net income plus/minus net
financial result plus income taxes expense plus depreciation and
amortization plus interest received on late payments of monthly
tuition fees, plus share-based compensation plus/minus share of
income of associate plus/minus non-recurring expenses. The
calculation of Adjusted Net Income is net income plus amortization
of customer relationships and trademark, plus share-based
compensation. We calculate Operating Cash Conversion Ratio as the
cash flow from operations, adjusted with income taxes paid divided
by Adjusted EBITDA plus/minus non-recurring expenses.
Management presents Adjusted EBITDA, because it believes these
measures provide investors with a supplemental measure of financial
performance of the core operations that facilitates
period-to-period comparisons on a consistent basis. Afya also
presents Operating Cash Conversion Ratio because it believes this
measure provides investors with a measure of how efficiently the
Company converts EBITDA into cash. The non-GAAP financial measures
described in this prospectus are not a substitute for the IFRS
measures of earnings. Additionally, calculations of Adjusted EBITDA
and Operating Cash Conversion Ratio may be different from the
calculations used by other companies, including competitors in the
education services industry, and therefore, Afya’s measures may not
be comparable to those of other companies.
8. Investor Relations Contact
E-mail: ir@afya.com.br
9. Financial Tables
Consolidated statements of financial
position
(In thousands of Brazilian
reais)
March 31, 2023
December 31, 2022
Assets
(unaudited)
Current assets
Cash and cash equivalents
722,691
1,093,082
Trade receivables
475,712
452,831
Inventories
9,925
12,190
Recoverable taxes
36,858
27,809
Other assets
50,123
51,745
Total current assets
1,295,309
1,637,657
Non-current assets
Trade receivables
45,966
42,568
Other assets
195,936
191,756
Investment in associate
54,152
53,907
Property and equipment
577,692
542,087
Right-of-use assets
777,086
690,073
Intangible assets
4,852,656
4,041,491
Total non-current assets
6,503,488
5,561,882
Total assets
7,798,797
7,199,539
Liabilities
Current liabilities
Trade payables
72,228
71,482
Loans and financing
193,214
145,202
Lease liabilities
38,026
32,459
Accounts payable to selling
shareholders
417,398
261,711
Notes payable
58,702
62,176
Advances from customers
165,694
133,050
Labor and social obligations
188,928
154,518
Taxes payable
29,045
26,221
Income taxes payable
26,229
16,151
Other liabilities
4,932
2,719
Total current liabilities
1,194,396
905,689
Non-current liabilities
Loans and financing
1,730,523
1,737,699
Lease liabilities
826,957
737,066
Accounts payable to selling
shareholders
351,876
266,967
Taxes payable
91,989
92,888
Provision for legal proceedings
199,160
195,854
Other liabilities
35,601
13,218
Total non-current liabilities
3,236,106
3,043,692
Total liabilities
4,430,502
3,949,381
Equity
Share capital
17
17
Additional paid-in capital
2,375,344
2,375,344
Share-based compensation reserve
130,033
123,538
Treasury stock
(304,947)
(304,947)
Retained earnings
1,117,010
1,004,886
Equity attributable to equity holders
of the parent
3,317,457
3,198,838
Non-controlling interests
50,838
51,320
Total equity
3,368,295
3,250,158
Total liabilities and equity
7,798,797
7,199,539
Consolidated statements of income and
comprehensive income
(In thousands of Brazilian reais,
except for earnings per share information)
March 31, 2023
March 31, 2022
(unaudited)
(unaudited)
Net revenue
709,961
566,324
Cost of services
(247,607)
(186,730)
Gross profit
462,354
379,594
General and administrative expenses
(233,220)
(178,514)
Other (expenses) income, net
405
(309)
Operating income
229,539
200,771
Finance income
27,688
24,569
Finance expenses
(124,240)
(81,291)
Finance result
(96,552)
(56,722)
Share of income of associate
3,845
4,240
Income before income taxes
136,832
148,289
Income taxes expenses
(19,060)
(13,347)
Net income
117,772
134,942
Other comprehensive income
-
-
Total comprehensive income
117,772
134,942
Income attributable to
Equity holders of the parent
112,124
129,610
Non-controlling interests
5,648
5,332
117,772
134,942
Basic earnings per share
Per common share
1.25
1.42
Diluted earnings per share
Per common share
1.24
1.42
Consolidated statements of cash
flows
(In thousands of Brazilian
reais)
March 31, 2023
March 31, 2022
Operating activities
(unaudited)
(unaudited)
Income before income taxes
136,832
148,289
Adjustments to reconcile income before
income taxes
Depreciation and amortization
65,971
48,387
Write-off of property and equipment
88
319
Write-off of intangible assets
246
2,894
Allowance for doubtful accounts
17,694
14,983
Share-based compensation expense
6,495
2,929
Net foreign exchange differences
161
126
Accrued interest
77,530
46,106
Accrued lease interest
25,524
20,641
Share of income of associate
(3,845)
(4,240)
Provision for legal proceedings
3,154
3,819
Changes in assets and
liabilities
Trade receivables
(10,232)
(576)
Inventories
2,404
(2,037)
Recoverable taxes
(8,460)
(5,965)
Other assets
6,005
9,263
Trade payables
(11,507)
(2,736)
Taxes payables
8,480
1,043
Advances from customers
147
(9,229)
Labor and social obligations
28,158
22,388
Other liabilities
4,528
(2,839)
349,373
293,565
Income taxes paid
(17,819)
(14,850)
Net cash flows from operating
activities
331,554
278,715
Investing activities
Acquisition of property and equipment
(27,299)
(30,670)
Acquisition of intangibles assets
(19,130)
(21,680)
Dividends received
3,600
1,554
Acquisition of subsidiaries, net of cash
acquired
(608,146)
(51,518)
Net cash flows used in investing
activities
(650,975)
(102,314)
Financing activities
Payments of loans and financing
(15,745)
(14,494)
Issuance of loans and financing
3,663
-
Payments of lease liabilities
(32,597)
(27,476)
Treasury shares
-
(88,763)
Dividends paid to non-controlling
interests
(6,130)
(4,669)
Net cash flows from (used in) financing
activities
(50,809)
(135,402)
Net foreign exchange differences
(161)
(126)
Net increase (decrease) in cash and
cash equivalents
(370,391)
40,873
Cash and cash equivalents at the beginning
of the period
1,093,082
748,562
Cash and cash equivalents at the end of
the period
722,691
789,435
Reconciliation between Net Income and Adjusted EBITDA
Reconciliation between Adjusted EBITDA and Net Income
(in thousands of R$)
For the three months period ended March
31,
2023
2022
% Chg
Net income
117,772
134,942
-12.7%
Net financial result
96,552
56,722
70.2%
Income taxes expense
19,060
13,347
42.8%
Depreciation and amortization
65,971
48,387
36.3%
Interest received (1)
10,299
7,687
34.0%
Income share associate
(3,845)
(4,240)
-9.3%
Share-based compensation
6,495
2,929
121.7%
Non-recurring expenses:
17,907
11,027
62.4%
- Integration of new companies (2)
5,900
4,171
41.5%
- M&A advisory and due diligence (3)
11,039
1,212
810.8%
- Expansion projects (4)
151
602
-74.9%
- Restructuring expenses (5)
1,395
3,650
-61.8%
- Mandatory Discounts in Tuition Fees (6)
(578)
1,392
n.a.
Adjusted EBITDA
330,211
270,801
21.9%
Adjusted EBITDA Margin
46.5%
47.7%
-120 bps
(1) Represents the interest received on late payments of monthly
tuition fees. (2) Consists of expenses related to the integration
of newly acquired companies. (3) Consists of expenses related to
professional and consultant fees in connection with due diligence
services for our M&A transactions. (4) Consists of expenses
related to professional and consultant fees in connection with the
opening of new campuses. (5) Consists of expenses related to the
employee redundancies in connection with the organizational
restructuring of our acquired companies. (6) Consists of mandatory
discounts in tuition fees granted by state decrees,
individual/collective legal proceedings and public civil
proceedings due to COVID 19 on site classes restriction and
excludes any recovery of these discounts that were invoiced based
on the Supreme Court decision.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230524005915/en/
Investor Relations Contact: Afya Limited ir@afya.com.br Media
Contact: Cíntia Moraes Marin cintia.marin@afya.com.br
Afya (NASDAQ:AFYA)
Historical Stock Chart
From Apr 2024 to May 2024
Afya (NASDAQ:AFYA)
Historical Stock Chart
From May 2023 to May 2024