UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November, 2024
Commission
File Number: 001-38992
Afya Limited
(Exact name of registrant as specified
in its charter)
Alameda Oscar Niemeyer, No. 119,
Salas 502, 504, 1,501 and 1,503
Vila da Serra, Nova Lima, Minas Gerais
Brazil
+55 (31) 3515 7550
(Address of principal executive office)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F:
Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
TABLE OF CONTENTS
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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Afya Limited |
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By: |
/s/ Virgilio Deloy Capobianco Gibbon |
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Name: |
Virgilio Deloy Capobianco Gibbon |
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Title: |
Chief Executive Officer |
Date: November 13, 2024
Afya Limited Third Quarter and
Nine Months 2024 Financial Results
Impressive Adjusted EBITDA Margin Expansion
Robust EPS Expansion
Expressive Cash Generation
Nova Lima, Brazil November 13, 2024 – Afya
Limited (Nasdaq: AFYA; B3: A2FY34) (“Afya” or the “Company”), the leading medical education group and medical
practice solutions provider in Brazil, reported today financial and operating results for the three and nine-month periods ended September
30, 2024 (third quarter 2024). Financial results are expressed in Brazilian Reais and are presented in accordance with International Financial
Reporting Standards (IFRS).
Third
Quarter 2024 Highlights
| § | 3Q24 Net Revenue increased
16.3% YoY to R$841.2 million. Net Revenue excluding acquisitions grew 11.8%, reaching R$808.8 million. |
| § | 3Q24 Adjusted EBITDA increased
25.0% YoY reaching R$347.9 million, with an Adjusted EBITDA Margin of 41.4%. Adjusted EBITDA Margin increased 290 bps YoY. Adjusted EBITDA
excluding acquisitions grew 18.2%, reaching R$328.9 million, with an Adjusted EBITDA Margin of 40.7%. |
| § | 3Q24 Net Income increased 26.4%
YoY, reaching R$124.1 million, and Adjusted Net Income increased 28.8% YoY, reaching R$165.4 million. Adjusted EPS growth was 29.9% in
the same period. |
Nine
Months 2024 Highlights
| § | 9M24 Net Revenue increased
14.4% YoY to R$2,455.3 million. Net Revenue excluding acquisitions grew 12.9%, reaching R$2,422.9 million. |
| § | 9M24 Adjusted EBITDA increased
24.3% YoY reaching R$1,089.6 million, with an Adjusted EBITDA Margin of 44.4%. Adjusted EBITDA Margin increased 350 bps YoY. Adjusted
EBITDA excluding acquisitions grew 22.1%, reaching R$1,070.6 million, with an Adjusted EBITDA Margin of 44.2%. |
| § | 9M24 Net Income increased 63.0%
YoY, reaching R$494.6 million, and Adjusted Net Income increased 46.9% YoY, reaching R$626.7 million. Adjusted EPS growth was 48.7% in
the same period. |
| § | Operating Cash Conversion ratio
of 109.7%, with a solid cash position of R$836.9 million. |
| § | ~326 thousand users in Afya’s ecosystem. |
| Table 1: Financial
Highlights |
| |
Three
months period ended September 30, |
|
Nine
months period ended September 30, |
| (in thousand of R$) |
2024 |
2024
Ex Acquisitions* |
2023 |
%
Chg |
%
Chg Ex Acquisitions |
|
2024 |
2024
Ex Acquisitions* |
2023 |
%
Chg |
%
Chg Ex Acquisitions |
| (a) Net Revenue |
841,185 |
808,763 |
723,479 |
16.3% |
11.8% |
|
2,455,314 |
2,422,892 |
2,146,047 |
14.4% |
12.9% |
| (b) Adjusted
EBITDA 2 |
347,949 |
328,924 |
278,393 |
25.0% |
18.2% |
|
1,089,628 |
1,070,603 |
876,766 |
24.3% |
22.1% |
| (c) = (b)/(a)
Adjusted EBITDA Margin |
41.4% |
40.7% |
38.5% |
290
bps |
220
bps |
|
44.4% |
44.2% |
40.9% |
350
bps |
330
bps |
| Net income |
124,142 |
- |
98,220 |
26.4% |
- |
|
494,641 |
- |
303,530 |
63.0% |
- |
| Adjusted
Net income |
165,372 |
- |
128,393 |
28.8% |
- |
|
626,683 |
- |
426,675 |
46.9% |
- |
| *For the three months period ended September
30, 2024, "2024 Ex Acquisitions" excludes: UNIDOM (July to September, 2024; Closing of UNIDOM was in July 2024). |
| *For the nine months period ended September
30, 2024, "2024 Ex Acquisitions" excludes: UNIDOM (July to September, 2024; Closing of UNIDOM was in July 2024). |
| (2) See more information on "Non-GAAP
Financial Measures" (Item 08). |
Message
from Management
We are pleased to announce another quarter of
solid results, marked by strong cash generation, consistent margin expansion, and progress in our strategic initiatives. This performance
underscores the differentials of Afya’s business model centered on the entire physician career and the successful execution of our
growth strategy, as we continue advancing our mission to integrate education and digital solutions for the medical journey, enhancing
training, updating, assertiveness, productivity, and physicians' connections with the healthcare ecosystem.
Our EBITDA margin expansion was largely supported
by the integration of UNIMA and FCM Jaboatão delivered in 4Q23, the ramp-up of the four Mais Médicos campuses launched in
3Q22, restructuring efforts within the Continuing Education and Medical Practice Solutions, and improved cost management in Selling, General,
and Administrative expenses.
This quarter, we completed the acquisition of
Unidom adding 300 medical seats, strengthening our presence in Salvador, one of Brazil’s largest cities. Through dedicated efforts,
we achieved a robust medical students’ intake at Unidom with more than 300 students enrolled in the 2nd half just one
month after the acquisition, reinforcing the impact of our ecosystem and brand recognition throughout the country.
Additionally, we received authorization from Brazil’s
Ministry of Education (“MEC”), to increase 80 medical seats at UNIMA and the reconsideration of 10 medical seats at Unigranrio
in Rio de Janeiro, bringing our total approved seats across all campuses to 3,593. These expansions are aligned with our commitment to
providing access to quality medical education and meeting the demand for healthcare professionals.
During our Afya Day event in October, we also
announced a projected 5.1% increase in tuition fees for new students in 2025, above inflation expectations for 2024, which reflect the
continued strength of our value proposition and the recognition of our brand.
For the nine-month period, Net Revenue increased
across all three segments. For Medical Practice Solutions we have seen a robust 15% increase in Net Revenue compared to the nine-month
period of the prior year. Reaffirming the immense potential of our Solutions.
For our Undergrad segment, Net Revenue grew by
14% when compared to the same period last year. Mainly supported by medical tickets increasing above inflation, the maturation of the
medical seats, in addition to the acquisition of Unidom and increase of medical seats approved. Afya has concluded a very successful intake
process in 2024 with more than 6 candidates per seat considering all 32 campuses reflecting the strengthening of Afya’s brand recognition
and reputation among the medical community.
In our Continuing Education segment, we are also
proud to see another year of organic growth. Net Revenue increased over 10% in the nine-month period. Through a robust intake process,
with the establishment of four new campuses in 2024 alone, we can see once more, our students, employees, and partners benefit from our
constantly developing ecosystem.
It is worth mentioning that our ecosystem has
reached today 326 thousand active users, adopting at least one of Afya’s solutions. This achievement is complemented by a high level
of satisfaction, reflecting the strong recognition and trust in Afya’s brand and its ecosystem
Our commitment to high-quality education and comprehensive
support for healthcare professionals remains at the core of our mission. Afya’s focus on operational excellence, strategic expansions,
and sustainable growth positions us for continued success. We remain steadfast in our vision to transform health together with those who
have medicine as a vocation, leveraging our ecosystem to create long-lasting value for all stakeholders.
| 1. | Key Events in the Quarter: |
| § | On July 1, 2024, Afya Participações
announced the closing of its acquisition of 100% of the total share capital of Unidom Participações S.A. (“Unidom”)
which encompasses Unidompedro and Faculdade Dom Luiz, both located in the State of Bahia with operations in the cities of Salvador, Luis
Eduardo Magalhães, Barreiras and Ribeira do Pombal. |
The acquisition contributes 300 operational
medical school seats to Afya in Salvador, one of Brazil's largest cities. The authorization request for these 300 seats was made to MEC
before the Mais Médicos´ Law was enacted and MEC concluded its analysis and issued Ordinance 630/2020 ("Ordinance")
in 2020 to partially authorize the operation considering 125 medical seats. In 2021, as a result of a judicial order, MEC reviewed the
Ordinance to authorize the 300 seats initially requested by Unidompedro. Said decision was confirmed by a judgment in 2023. Currently,
Unidompedro has 300 seats authorized, of which 125 are final and 175 are subject to a final conclusion of the aforementioned court proceedings.
The aggregate purchase price (enterprise
value) was R$660.0 million, and the estimated Net Debt was deducted from the down payment.
The price and payment conditions are:
| · | R$347.8 million, deducted from
the estimated Net Debt, was paid in cash at closing. |
| · | R$312.2 million will be paid
in up to 10 annual installments of R$31.2 million, adjusted by the CDI (Interbank Certificate of Deposit) rate. |
Afya expects an EV/EBITDA of 4.2x at
maturity and post-synergies (2027).
| § | On July 12, 2024, the Secretary
of Regulation and Supervision of Higher Education of MEC authorized the increase of 80 medical school seats of UNIMA, located in the city
of Maceió, State of Alagoas, which will result in an additional payment of R$1.25 million per increased medical school seat, updated
by IPCA since January 2, 2023 until the payment date to the selling shareholders of DelRey. With this authorization, Afya reaches 220
medical school seats on this campus. |
| § | On August 30, 2024, has received
the total disbursement of R$500.0 million under the loan agreement with International Finance Corporation ("IFC") to finance
its expansion program, through acquisitions. The financing is IFC’s first sustainability-linked loan based on social targets in
the education sector. The pricing of IFC’s loan will be linked to Afya reaching performance target levels in selected social key
performance indicators encompassing free medical consultations for the community and quality of education according to Brazil’s
Ministry of Education criteria (“Sustainability KPIs”). According to the financing terms, the loan shall be repaid in seven
equal semi-annual installments starting in April 2027. The interest rate is the Brazilian CDI rate plus 1.2%, and it may be reduced by
15 bps if the Sustainability KPIs are achieved. |
| § | On September 6, 2024, Afya
Participações announced that following the conclusion of an administrative procedure, MEC has granted the request for reconsideration
submitted by Unigranrio. Per the e-MEC portal, Unigranrio reestablished 10 medical seats in the city of Rio de Janeiro, reaching 318 medical
seats across both Unigranrio campuses, contributing to Afya´s 3,593 total approved medical seats. |
Afya reaffirms the Guidance FY2024, which was updated
upward at the end of 2Q24 to encompass the acquisition of Unidom, the authorization of 80 seats in UNIMA, and the performance of the first
semester.
| |
|
Guidance for 2024 |
| Net Revenue 1 |
|
R$ 3,225 mn ≤ ∆ ≤ R$ 3,325 mn |
| Adjusted EBITDA |
|
R$ 1,375 mn ≤ ∆ ≤ R$ 1,475 mn |
| CAPEX 2 |
|
R$ 220 mn ≤ ∆ ≤ R$ 260 mn |
| (1) Excludes any acquisition that may be concluded after the issuance of the guidance, notably, the Unidom acquisition was included in the guidance provided |
| (2) The 2024 Capex guidance does not encompass the earn-out payment in the amount of R$49.6 million related to the 40-seat increase at Faculdades Integradas Padrão (FIP Guanambi), and also excludes the earn-out payment due to UNIMA Alagoas for the 80-seat increase in July 2024. |
Segment
Information
The
Company has three reportable segments as follows:
Undergrad,
which provides educational services through undergraduate courses related to medical school, undergraduate health science and other ex-health
undergraduate programs;
Continuing
education, which provides medical education (including residency preparation programs, specialization test preparation and other medical
capabilities), specialization and graduate courses in medicine, delivered through digital and in-person content; and
Medical
Practice solutions, which provides clinical decision, clinical management and doctor-patient relationships for physicians and provide
access, demand and efficiency for the healthcare players.
Key
Revenue Drivers – Undergraduate Programs
| Table 2: Key Revenue Drivers |
Nine months period ended September 30 |
| |
2024 |
2023 |
% Chg |
| Undergrad Programs |
|
|
|
| MEDICAL SCHOOL |
|
|
|
| Approved Seats |
3,593 |
3,163 |
13.6% |
| Operating Seats 1 |
3,543 |
3,113 |
13.8% |
| Total Students (end of period) |
24,234 |
21,556 |
12.4% |
| Average Total Students |
23,168 |
21,056 |
10.0% |
| Average Total Students (ex-Acquisitions)* |
22,782 |
21,056 |
8.2% |
| Net Revenue (Total - R$ '000) |
1,852,742 |
1,607,217 |
15.3% |
| Net Revenue (ex- Acquisitions* - R$ '000) |
1,822,157 |
1,607,217 |
13.4% |
| Medical School Net Avg. Ticket (ex- Acquisitions* - R$/month) |
8,887 |
8,481 |
4.8% |
| UNDERGRADUATE HEALTH SCIENCE |
|
|
|
| Total Students (end of period) |
25,950 |
21,564 |
20.3% |
| Average Total Students |
25,028 |
21,447 |
16.7% |
| Average Total Students (ex-Acquisitions)* |
24,810 |
21,447 |
15.7% |
| Net Revenue (Total - R$ '000) |
170,520 |
151,833 |
12.3% |
| Net Revenue (ex- Acquisitions* - R$ '000) |
169,733 |
151,833 |
11.8% |
| OTHER EX- HEALTH UNDERGRADUATE |
|
|
|
| Total Students (end of period) |
27,855 |
24,286 |
14.7% |
| Average Total Students |
27,745 |
24,625 |
12.7% |
| Average Total Students (ex-Acquisitions)* |
27,302 |
24,625 |
10.9% |
| Net Revenue (Total - R$ '000) |
132,633 |
124,038 |
6.9% |
| Net Revenue (ex- Acquisitions* - R$ '000) |
131,583 |
124,038 |
6.1% |
| Total Net Revenue |
|
|
|
| Net Revenue (Total - R$ '000) |
2,155,895 |
1,883,089 |
14.5% |
| Net Revenue (ex- Acquisitions* - R$ '000) |
2,123,473 |
1,883,089 |
12.8% |
| *For the nine months period ended September 30, 2024, "2024 Ex Acquisitions" excludes: UNIDOM (July to September, 2024; Closing of UNIDOM was in July 2024). |
| (1) The difference between approved and operating seats is 'Cametá'. A campus for which we already have the license but haven't started operations. |
Key
Revenue Drivers – Continuing Education
| Table 3: Key Revenue Drivers |
Nine months period ended September 30 |
| |
2024 |
2023 |
% Chg |
| Continuing Education 1 |
|
|
|
| Total Studends (end of period) |
|
|
|
| Residency Journey - Business to Physicians B2P 2 |
15,678 |
10,325 |
51.8% |
| Graduate Journey - Business to Physicians B2P |
7,293 |
7,063 |
3.3% |
| Other Courses - B2P and Business to Business Offerings |
29,780 |
24,385 |
22.1% |
| Total Students (end of period) |
52,751 |
41,773 |
26.3% |
| Net Revenue (R$ '000) |
|
|
|
| Business to Physicians - B2P |
175,002 |
153,792 |
13.8% |
| Business to Business - B2B |
12,730 |
16,216 |
-21.5% |
| Total Net Revenue |
187,731 |
170,010 |
10.4% |
| (1) The figure above does not contemplate intercompany transactions |
|
|
|
| (2) 'Content & Technology for Medical Education' which had been reported in 'Digital Services' table, has been reclassified to 'Continuing Education' |
Key
Revenue – Medical Practice Solutions
| Table 4: Key Revenue Drivers |
Nine months period ended September 30 |
| |
2024 |
2023 |
% Chg |
| Medical Practice Solutions 1 |
|
|
|
| Active Payers (end of period) |
|
|
|
| Clinical Decision |
166,780 |
150,796 |
10.6% |
| Clinical Management |
33,503 |
29,281 |
14.4% |
| Total Active Payers (end of period) |
200,283 |
180,077 |
11.2% |
| Monthly Active Users (MaU) |
|
|
|
| Total Monthly Active Users (MaU) - Digital Services 2 |
248,775 |
259,259 |
-4.0% |
| Net Revenue (R$ '000) |
|
|
|
| Business to Physicians - B2P |
99,707 |
88,485 |
12.7% |
| Business to Business - B2B |
17,583 |
13,803 |
27.4% |
| Total Net Revenue |
117,290 |
102,289 |
14.7% |
| (1) The figure above does not contemplate intercompany transactions |
| (2) 'Content & Technology for Medical Education' is now being reported in Continuing Education table |
Key
Operational Drivers – Users Positively Impacted by Afya
Users
Positively Impacted by Afya represents the total number of medical students from the Undergrad segment, students from the Continuing Education
and users from Medical Practice Solutions. For the third quarter of 2024, Afya’s ecosystem reached 325,760 users, in line with the
same period of the prior year.
| Table 5: Key Revenue Drivers |
Nine months period ended September 30 |
| |
2024 |
2023 |
% Chg |
| Users Positively Impacted by Afya 1 |
|
|
|
| Undergrad (Total Medical School Students - End of Period) |
24,234 |
21,556 |
12.4% |
| Continuing Education (Total Students - End of Period) |
52,751 |
41,773 |
26.3% |
| Medical Practice Solutions (Monthly Active Users) |
248,775 |
259,259 |
-4.0% |
| Ecosystem Outreach |
325,760 |
322,588 |
1.0% |
| (1) Ecosystem outreach does not contemplate intercompany figures. Note that there may be overlap in student numbers within the data. |
Seasonality
of Operations
Undergrad tuition revenues are related to the intake
process, and monthly tuition fees charged to students and do not significantly fluctuate during each semester.
Continuing education revenues are mostly related
to: (i) monthly intakes and tuition fees on medical education, which do not have a considerable concentration in any period; (ii) Residence
journey product revenues, derived from e-books transferred at a point of time, which are concentrated at in the first and last quarter
of the year due to the enrollments.
Medical
Practice Solutions are comprised mainly of Afya Whitebook and Afya iClinic revenues, which do not significantly fluctuate regarding seasonality.
Net
Revenue
Net Revenue for the third quarter of 2024 was R$841.2
million, an increase of 16.3% over the same period in the prior year. Excluding acquisitions, Net Revenue in the third quarter increased
11.8% YoY to R$808.8 million. For the nine-month period ending September 30, 2024, Net Revenue was R$2,455.3 million, reflecting a 14.4%
increase over the same period of last year. Excluding acquisitions, Net Revenue in the nine-month period increased 12.9% YoY to R$2,422.9
million.
The revenue increase was mainly due to higher tickets
in Medicine courses, the maturation of medical seats, the 40-seat expansion in the Guanambi campus, the Continuing Education intake performance,
and the execution of Medical Practice Solutions. Specifically, in the third quarter, we also had the impact of 80 new seats at UNIMA and
the reconsideration of 10 seats at Unigranrio (Rio de Janeiro). Additionally, on July 1, 2024, Afya acquired Unidom.
| Table 6: Revenue & Revenue Mix |
| (in thousands
of R$) |
|
Three
months period ended September 30, |
|
Nine
months period ended September 30, |
| |
|
2024 |
2024
Ex Acquisitions* |
2023 |
%
Chg |
%
Chg Ex Acquisitions |
|
2024 |
2024
Ex Acquisitions* |
2023 |
%
Chg |
%
Chg Ex Acquisitions |
| Net Revenue
Mix |
|
|
|
|
|
|
|
|
|
|
|
|
| Undergrad |
|
741,729 |
709,307 |
636,849 |
16.5% |
11.4% |
|
2,155,895 |
2,123,473 |
1,883,089 |
14.5% |
12.8% |
| Continuing
Education |
|
60,225 |
60,225 |
56,335 |
6.9% |
6.9% |
|
187,731 |
187,731 |
170,010 |
10.4% |
10.4% |
| Medical
Practice Solutions |
|
40,436 |
40,436 |
34,450 |
17.4% |
17.4% |
|
117,290 |
117,290 |
102,289 |
14.7% |
14.7% |
| Inter-segment
transactions |
|
- 1,205 |
- 1,205 |
- 4,155 |
-71.0% |
-71.0% |
|
-5,602 |
-5,602 |
-9,341 |
-40.0% |
-40.0% |
| Total
Reported Net Revenue |
|
841,185 |
808,763 |
723,479 |
16.3% |
11.8% |
|
2,455,314 |
2,422,892 |
2,146,047 |
14.4% |
12.9% |
| *For the three months
period ended September 30, 2024, "2024 Ex Acquisitions" excludes: UNIDOM (July to September, 2024; Closing of UNIDOM was
in July 2024). |
| *For the nine months period
ended September 30, 2024, "2024 Ex Acquisitions" excludes: UNIDOM (July to September, 2024; Closing of UNIDOM was in July
2024). |
Adjusted EBITDA
Adjusted EBITDA for the three-month period ended
September 30, 2024, increased by 25.0% to R$347.9 million, up from R$278.4 million in the same period of the prior year, with the Adjusted
EBITDA Margin rising by 290 basis points to 41.4. For the nine-month period ending September 30, 2024, Adjusted EBITDA was R$1,089.6
million, an increase of 24.3% over the same period of the prior year, accompanied by an Adjusted EBITDA Margin increase of 350 basis
points in the same period.
The Adjusted EBITDA Margin expansion is primarily
attributable to: (a) gross margin expansion in the Undergrad Segment; (b) completion of UNIMA and
FCM Jaboatão integration process in November 2023; (c) the ramp-up of the four Mais Médicos campuses that started operation
in 3Q22; (d) operational restructuring efforts in Continuing Education and Medical Practice Solutions segments; and (e) More efficiency
in Selling, General and Administrative expenses.
| Table 7: Reconciliation between Adjusted EBITDA and Net Income |
| |
|
|
|
|
|
|
|
| (in thousands of R$) |
Three months period ended September 30, |
|
Nine months period ended September 30, |
| |
2024 |
2023 |
% Chg |
|
2024 |
2023 |
% Chg |
| Net income |
124,142 |
98,220 |
26.4% |
|
494,641 |
303,530 |
63.0% |
| Net financial result |
99,844 |
80,535 |
24.0% |
|
242,761 |
267,313 |
-9.2% |
| Income taxes expense |
12,432 |
12,146 |
2.4% |
|
26,388 |
33,296 |
-20.7% |
| Depreciation and amortization |
85,828 |
73,908 |
16.1% |
|
249,135 |
212,172 |
17.4% |
| Interest received 1 |
13,945 |
10,619 |
31.3% |
|
34,979 |
25,760 |
35.8% |
| Income share associate |
(2,526) |
(615) |
310.7% |
|
(9,726) |
(7,671) |
26.8% |
| Share-based compensation |
5,871 |
6,684 |
-12.2% |
|
26,299 |
20,082 |
31.0% |
| Non-recurring expenses: |
8,413 |
(3,104) |
n.a. |
|
25,151 |
22,284 |
12.9% |
| - Integration of new companies 2 |
6,444 |
7,769 |
-17.1% |
|
17,722 |
19,951 |
-11.2% |
| - M&A advisory and due diligence 3 |
1,220 |
703 |
73.5% |
|
2,803 |
12,377 |
-77.4% |
| - Expansion projects 4 |
198 |
2,007 |
-90.1% |
|
2,568 |
2,536 |
1.3% |
| - Restructuring expenses 5 |
551 |
3,722 |
-85.2% |
|
2,058 |
5,673 |
-63.7% |
| - Mandatory Discounts in Tuition Fees 6 |
- |
(493) |
n.a. |
|
- |
(1,441) |
n.a. |
| - Gain on tax amnesty 7 |
- |
(16,812) |
n.a. |
|
- |
(16,812) |
n.a. |
| Adjusted EBITDA |
347,949 |
278,393 |
25.0% |
|
1,089,628 |
876,766 |
24.3% |
| Adjusted EBITDA Margin |
41.4% |
38.5% |
290 bps |
|
44.4% |
40.9% |
350 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. |
| (7) On August 10, 2023, Unigranrio entered into a tax amnesty program on interest and penalties to settle a tax proceeding in respect to ISS (city tax on services) with the municipality of Rio de Janeiro, which result in a payment of R$14,819 to settle the claim. The selling shareholders of Unigranrio agreed to pay R$5,438 regarding this matter. The Company had a provision of R$53,302 and an indemnification asset from the selling shareholders of R$20,000 (in light of the indemnification clauses as defined at acquisition of Unigranrio), in respect to such tax proceeding. The difference between the provision, indemnification asset and the actual paid amount was recorded as Other income (expenses), net on the consolidated statement of income and comprehensive income. |
Adjusted
Net Income
Net Income for the three-month period ended September
30, 2024 was R$124.1 million, an increase of 26.4% over the same period of the prior year. Adjusted Net Income was R$165.4 million, which
resulted in an increase of 28.8% over the same period from the previous year. For the nine-month period, Afya achieved a Net Income of
R$494.6 million, 63.0% higher than the same period of 2023, and an Adjusted Net Income of R$626.7 million which was 46.9% higher than
the previous period. This performance was mainly due to: (a) enhancement of operational results; (b) lower effective tax rates than last
year; and (c) lower interest rates.
Adjusted EPS reached R$6.81 per share for the nine-month
period ended September 30, 2024, an increase of 48.7% YoY, reflecting the increase in Net Income and capital allocation discipline.
| Table 8: Adjusted Net Income |
| (in thousands of R$) |
Three months period ended September 30, |
|
Nine months period ended September 30, |
| |
2024 |
2023 |
% Chg |
|
2024 |
2023 |
% Chg |
| Net income |
124,142 |
98,220 |
26.4% |
|
494,641 |
303,530 |
63.0% |
| Amortization of customer relationships and trademark 1 |
26,946 |
26,593 |
1.3% |
|
80,592 |
80,779 |
-0.2% |
| Share-based compensation |
5,871 |
6,684 |
-12.2% |
|
26,299 |
20,082 |
31.0% |
| Non-recurring expenses: |
8,413 |
(3,104) |
n.a. |
|
25,151 |
22,284 |
12.9% |
| - Integration of new companies 2 |
6,444 |
7,769 |
-17.1% |
|
17,722 |
19,951 |
-11.2% |
| - M&A advisory and due diligence 3 |
1,220 |
703 |
73.5% |
|
2,803 |
12,377 |
-77.4% |
| - Expansion projects 4 |
198 |
2,007 |
-90.1% |
|
2,568 |
2,536 |
1.3% |
| - Restructuring expenses 5 |
551 |
3,722 |
-85.2% |
|
2,058 |
5,673 |
-63.7% |
| - Mandatory Discounts in Tuition Fees 6 |
- |
(493) |
n.a. |
|
- |
(1,441) |
n.a. |
| - Gain on tax amnesty 7 |
- |
(16,812) |
n.a. |
|
- |
(16,812) |
n.a. |
| Adjusted Net Income |
165,372 |
128,393 |
28.8% |
|
626,683 |
426,675 |
46.9% |
| Basic earnings per share - in R$ 8 |
1.33 |
1.04 |
27.9% |
|
5.35 |
3.21 |
66.6% |
| Adjusted earnings per share - in R$ 9 |
1.79 |
1.38 |
29.9% |
|
6.81 |
4.58 |
48.7% |
| (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) On August 10, 2023, Unigranrio entered into a tax amnesty program on interest and penalties to settle a tax proceeding in respect to ISS (city tax on services) with the municipality of Rio de Janeiro, which result in a payment of R$14,819 to settle the claim. The selling shareholders of Unigranrio agreed to pay R$5,438 regarding this matter. The Company had a provision of R$53,302 and an indemnification asset from the selling shareholders of R$20,000 (in light of the indemnification clauses as defined at acquisition of Unigranrio), in respect to such tax proceeding. The difference between the provision, indemnification asset and the actual paid amount was recorded as Other income (expenses), net on the consolidated statement of income and comprehensive income. |
| (8) Basic earnings per share: Net Income/Weighted average number of outstanding shares. |
| (9) Adjusted earnings per share: Adjusted Net Income attributable to equity holders of the Parent/Weighted average number of outstanding shares. |
Cash
and Debt Position
As of September 30, 2024, Afya's Cash and Cash Equivalents
stood at R$836.9 million, marking a 51.3% increase compared to December 31, 2023. Net Debt, excluding IFRS 16 impacts, reached R$1,894.4
million—an increase of R$106.6 million over the same period of the previous year. Despite the R$660.0 million acquisition of Unidom
and the R$157.2 million earn-out payment regarding the additional seats in Guanambi and UNIMA, Afya’s Net Debt (excluding IFRS 16)
increased by only 4.4%, thanks to strong Cash Flow from operating activities.
For the nine-month period ended September 30, 2024,
Afya reported Cash Flow from Operating Activities of R$1,167.5 million, up from R$933.8 million in the same period of the previous year,
an increase of 25.0% YoY, boosted by solid operational results. Operating Cash Conversion Ratio achieved 109.7%.
| Table 9: Operating Cash Conversion Ratio Reconciliation |
Nine months period ended September 30, |
| (in thousands of R$) |
Considering the adoption of IFRS 16 |
| |
2024 |
2023 |
% Chg |
| (a) Net cash flows from operating activities |
1,148,175 |
896,202 |
28.1% |
| (b) Income taxes paid |
19,290 |
37,599 |
-48.7% |
| (c) = (a) + (b) Cash flow from operating activities |
1,167,465 |
933,801 |
25.0% |
| |
|
|
|
| (d) Adjusted EBITDA |
1,089,628 |
876,766 |
24.3% |
| (e) Non-recurring expenses: |
25,151 |
22,284 |
12.9% |
| - Integration of new companies 1 |
17,722 |
19,951 |
-11.2% |
| - M&A advisory and due diligence 2 |
2,803 |
12,377 |
-77.4% |
| - Expansion projects 3 |
2,568 |
2,536 |
1.3% |
| - Restructuring Expenses 4 |
2,058 |
5,673 |
-63.7% |
| - Mandatory Discounts in Tuition Fees 5 |
0 |
-1,441 |
n.a. |
| - Gain on tax amnesty 6 |
- |
-16,812 |
n.a. |
| (f) = (d) - (e) Adjusted EBITDA ex- non-recurring expenses |
1,064,477 |
854,482 |
24.6% |
| (g) = (c) / (f) Operating cash conversion ratio |
109.7% |
109.3% |
40 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. |
| (6) On August 10, 2023, Unigranrio entered into a tax amnesty program on interest and penalties to settle a tax proceeding in respect to ISS (city tax on services) with the municipality of Rio de Janeiro, which result in a payment of R$14,819 to settle the claim. The selling shareholders of Unigranrio agreed to pay R$5,438 regarding this matter. The Company had a provision of R$53,302 and an indemnification asset from the selling shareholders of R$20,000 (in light of the indemnification clauses as defined at acquisition of Unigranrio), in respect to such tax proceeding. The difference between the provision, indemnification asset and the actual paid amount was recorded as Other income (expenses), net on the consolidated statement of income and comprehensive income. |
The following table shows more information regarding
the cost of debt for 9M24, considering loans and financing and accounts payable to selling shareholders. Afya’s capital structure
remains solid, with a conservative leveraging position and a low cost of debt. Considering the updated mid guidance, Afya’s Net
Debt (excluding the effect of IFRS16) divided by the Adjusted EBITDA is 1.33x.
| Table 10: Gross Debt and Average Cost of Debt |
| (in millions of R$) |
For the closing of the nine months period ended in September 30, |
| |
|
|
|
|
Cost of Debt |
| |
Gross Debt |
Duration (Years) |
Per year |
%CDI² |
| |
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
| Loans and financing: Softbank |
828 |
826 |
1.6 |
2.6 |
6.5% |
6.5% |
51% |
50% |
| Loans and financing: Debentures |
511 |
512 |
2.8 |
3.9 |
12.1% |
15.5% |
112% |
114% |
| Loans and financing: Others |
309 |
570 |
1.0 |
1.4 |
12.8% |
15.4% |
119% |
114% |
| Loans and financing: IFC |
497 |
- |
4.1 |
- |
11.8% |
- |
110% |
- |
| Accounts payable to selling shareholders |
586 |
702 |
3.3 |
0.9 |
10.7% |
12.8% |
100% |
96% |
| Total¹| Average |
2,731 |
2,610 |
2.6 |
2.2 |
9.4% |
11.8% |
88% |
88% |
| (1) Total ammount refers only to the "Gross Debt" columns |
| (2) Based on the annualized Interbank Certificates of Deposit ("CDI") rate for the period as a reference: 9M24: ~10.65% p.y. and for 9M23: ~12.65% p.y. |
| Table 11: Cash and Debt Position |
|
|
|
|
|
| (in thousands of R$) |
|
|
|
|
|
| |
3Q24 |
FY2023 |
% Chg |
3Q23 |
% Chg |
| (+) Cash and Cash Equivalents |
836,876 |
553,030 |
51.3% |
822,008 |
1.8% |
| Cash and Bank Deposits |
5,594 |
11,746 |
-52.4% |
11,107 |
-49.6% |
| Cash Equivalents |
831,282 |
541,284 |
53.6% |
810,901 |
2.5% |
| (-) Loans and Financing |
2,145,270 |
1,800,775 |
19.1% |
1,908,299 |
12.4% |
| Current |
30,051 |
179,252 |
-83.2% |
186,903 |
-83.9% |
| Non-Current |
2,115,219 |
1,621,523 |
30.4% |
1,721,396 |
22.9% |
| (-) Accounts Payable to Selling Shareholders |
586,042 |
566,867 |
3.4% |
651,068 |
-10.0% |
| Current |
247,192 |
353,998 |
-30.2% |
382,500 |
-35.4% |
| Non-Current |
338,850 |
212,869 |
59.2% |
268,568 |
26.2% |
| (-) Other Short and Long Term Obligations |
|
|
n.a. |
50,469 |
-100.0% |
| (=) Net Debt (Cash) excluding IFRS 16 |
1,894,436 |
1,814,612 |
4.4% |
1,787,828 |
6.0% |
| (-) Lease Liabilities |
974,780 |
874,569 |
11.5% |
869,729 |
12.1% |
| Current |
45,133 |
36,898 |
22.3% |
36,705 |
23.0% |
| Non-Current |
929,647 |
837,671 |
11.0% |
833,024 |
11.6% |
| Net Debt (Cash) with IFRS 16 |
2,869,216 |
2,689,181 |
6.7% |
2,657,557 |
8.0% |
CAPEX
Capital expenditures consist of the purchase of property
and equipment and intangible assets, including expenditures mainly related to the expansion and maintenance of Afya’s campuses and
headquarters, leasehold improvements, and the development of new solutions in the Medical Practice Solutions segment.
For the nine-month period ending September 30, 2024,
CAPEX was R$316.8 million. Excluding the one-off effect in the first quarter of R$49.6 million regarding the earn-out of Guanambi, due
to the expansion of 40 seats as disclosed to the market in January 2024, and the earn-out of UNIMA in the amount of R$107.6 million, due
to the expansion of 80 seats as disclosed to the market in July 2024 the CAPEX/Net Revenue ratio would be 6.5%.
| Table 12: CAPEX |
| (in thousands of R$) |
For the nine months period ended September 30, |
| |
2024 |
2023 |
% Chg |
| CAPEX |
316,766 |
155,127 |
104.2% |
| Property and equipment |
93,367 |
88,014 |
6.1% |
| Intanglibe assets |
223,399 |
67,113 |
232.9% |
| - Licenses |
157,227 |
0 |
n.a. |
| - Others |
66,172 |
67,113 |
-1.4% |
ESG
Metrics
ESG commitment is an important
part of 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 in three key metrics, Governance and
Employee Management, Environmental and Social.
The 2023 Sustainability Report can be found at: https://ir.afya.com.br/annual-report/
| Table 13: ESG Metrics 1, 2 & 3 |
3Q24 |
3Q23 |
2023 |
| # |
GRI |
Governance and Employee Management |
|
|
|
| 1 |
405-1 |
Number of employees |
10,155 |
9,868 |
9,680 |
| 2 |
405-1 |
Percentage of female employees |
59% |
58% |
58% |
| 3 |
405-1 |
Percentage of female employees in the board of directors |
30% |
36% |
36% |
| 4 |
102-24 |
Percentage of independent member in the board of directors |
40% |
36% |
36% |
| |
|
Environmental |
|
|
|
| 5 |
|
Total renewable energy generated by own photovoltaic plants (MWh) |
1,471,476 |
1,151,649 |
4,510,637 |
| 6 |
302-1 |
Total energy consumed (MWh) |
5,644,403 |
6,078,952 |
24,036,608 |
| 7 |
302-1 |
% of renewable energy consumed from own generation |
22.5% |
16.4% |
16.0% |
| 8 |
302-1 |
% of energy consumed from the power grid |
37.6% |
56.7% |
60.3% |
| 9 |
302-1 |
% of energy consumed from the free market |
39.9% |
26.9% |
23.7% |
| |
|
Social |
|
|
|
| 10 |
413-1 |
Number of free clinical consultations offered by Afya |
221,230 |
146,294 |
586,611 |
| 11 |
|
Number of physicians graduated in Afya's campuses |
21,266 |
18,965 |
20,197 |
| 12 |
201-4 |
Number of students with financing and scholarship programs (FIES and PROUNI) |
11,636 |
10,628 |
10,584 |
| 13 |
|
% students with scholarships over total undergraduate students |
14.9% |
15.8% |
16.0% |
| 14 |
413-1 |
Hospital, clinics and city halls partnerships |
567 |
664 |
649 |
| (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) 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. |
| (3) The number of students with financing and scholarship programs (FIES and PROUNI) in 2023 excludes students from the Unima and FCM Jaboatão acquisition, and for 3Q24, also excludes those from the UNIDOM acquisition. |
4.
Conference Call and Webcast Information
When: November
13, 2024 at 5:00 p.m. EST.
| 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/94887462478
OR
Dial-in:
Brazil: +55 11 4680 6788 or +55 11 4700 9668 or +55 21 3958 7888 or +55
11 4632 2236 or +55 11 4632 2237
United States: +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 or +1 253 205 0468 or +1
253 215 8782
Webinar ID: 948 8746 2478
Other Numbers: https://afya.zoom.us/u/aAPTjXWSq
5.
About Afya Limited (Nasdaq: AFYA; B3: A2FY34)
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
medical practice solutions 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 presents Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted
EPS, 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 income share associate, plus/minus non-recurring expenses/income. Operating Cash
Conversion Ratio is calculated as the Cash flow from Operating Activities plus income taxes paid, minus/plus non-recurring expenses/income
divided by Adjusted EBITDA. The calculation of Adjusted Net Income is the Net Income plus amortization of customer relationships and trademark,
plus share-based compensation, plus/minus non-recurring expenses/income. The calculation of Adjusted EPS is the Adjusted Net Income minus
the non-controlling interests divided by the Weighted average number of outstanding shares.
The non-GAAP supplemental
financial measures are provided with the intend to help investors in assessing the overall performance of Afya’s business regarding
its core operations, cash generation and profitability. The non-GAAP financial measures described in this prospectus are not substitutes
for the IFRS measures. In addition, the calculations of Adjusted EBITDA, Operating Cash Conversion Ratio, Adjusted Net Income and Adjusted
EPS are not standardized financial measures and may differ 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
Unaudited interim condensed
consolidated statements of income and comprehensive income
For the three and nine-month
periods ended September 30, 2024 and 2023
(In thousands of Brazilian reais, except earnings per share information)
| |
|
Three-month period ended |
|
Nine-month period ended |
| |
|
September 30, 2024 |
September 30, 2023 |
|
September 30, 2024 |
September 30, 2023 |
| |
|
(unaudited) |
(unaudited) |
|
(unaudited) |
(unaudited) |
| |
|
|
|
|
|
|
| Revenue |
|
841,185 |
723,479 |
|
2,455,314 |
2,146,047 |
| Cost of services |
|
(324,083) |
(288,234) |
|
(908,429) |
(820,136) |
| Gross profit |
|
517,102 |
435,245 |
|
1,546,885 |
1,325,911 |
| |
|
|
|
|
|
|
| Selling, general and administrative expenses |
|
(280,027) |
(257,002) |
|
(784,953) |
(739,808) |
| Other income (expenses), net |
|
(3,183) |
12,043 |
|
(7,868) |
10,365 |
| |
|
|
|
|
|
|
| Operating income |
|
233,892 |
190,286 |
|
754,064 |
596,468 |
| |
|
|
|
|
|
|
| Finance income |
|
30,396 |
34,771 |
|
79,659 |
86,259 |
| Finance expenses |
|
(130,240) |
(115,306) |
|
(322,420) |
(353,572) |
| Net finance result |
|
(99,844) |
(80,535) |
|
(242,761) |
(267,313) |
| |
|
|
|
|
|
|
| Share of income of associate |
|
2,526 |
615 |
|
9,726 |
7,671 |
| |
|
|
|
|
|
|
| Income before income taxes |
|
136,574 |
110,366 |
|
521,029 |
336,826 |
| |
|
|
|
|
|
|
| Income taxes expenses |
|
(12,432) |
(12,146) |
|
(26,388) |
(33,296) |
| |
|
|
|
|
|
|
| Net income |
|
124,142 |
98,220 |
|
494,641 |
303,530 |
| |
|
|
|
|
|
|
| Other comprehensive income |
|
- |
- |
|
- |
- |
| Total comprehensive income |
|
124,142 |
98,220 |
|
494,641 |
303,530 |
| |
|
|
|
|
|
|
| Income attributable to: |
|
|
|
|
|
|
| Equity holders of the parent |
|
119,979 |
93,347 |
|
481,583 |
288,263 |
| Non-controlling interests |
|
4,163 |
4,873 |
|
13,058 |
15,267 |
| |
|
124,142 |
98,220 |
|
494,641 |
303,530 |
| |
|
|
|
|
|
|
| Basic earnings per common share |
|
1.33 |
1.04 |
|
5.35 |
3.21 |
| Diluted earnings per common share |
|
1.31 |
1.03 |
|
5.28 |
3.18 |
Unaudited interim condensed consolidated statements
of financial position
As of September 30, 2024 and December 31, 2023
(In thousands of Brazilian reais)
| |
|
September 30, 2024 |
|
December 31, 2023 |
| |
|
(unaudited) |
|
|
| Assets |
|
|
|
|
| Current assets |
|
|
|
|
| Cash and cash equivalents |
|
836,876 |
|
553,030 |
| Trade receivables |
|
552,381 |
|
546,438 |
| Inventories |
|
235 |
|
1,382 |
| Recoverable taxes |
|
41,424 |
|
43,751 |
| Other assets |
|
45,304 |
|
58,905 |
| Total current assets |
|
1,476,220 |
|
1,203,506 |
| |
|
|
|
|
| Non-current assets |
|
|
|
|
| Trade receivables |
|
36,940 |
|
39,485 |
| Other assets |
|
117,789 |
|
117,346 |
| Investment in associate |
|
55,365 |
|
51,834 |
| Property and equipment |
|
639,187 |
|
608,685 |
| Right-of-use assets |
|
846,333 |
|
767,609 |
| Intangible assets |
|
5,541,793 |
|
4,796,016 |
| Total non-current assets |
|
7,237,407 |
|
6,380,975 |
| |
|
|
|
|
| Total assets |
|
8,713,627 |
|
7,584,481 |
| |
|
|
|
|
| Liabilities |
|
|
|
|
| Current liabilities |
|
|
|
|
| Trade payables |
|
129,920 |
|
108,222 |
| Loans and financing |
|
30,051 |
|
179,252 |
| Lease liabilities |
|
45,133 |
|
36,898 |
| Accounts payable to selling shareholders |
|
247,192 |
|
353,998 |
| Advances from customers |
|
154,759 |
|
153,485 |
| Labor and social obligations |
|
269,381 |
|
192,294 |
| Taxes payable |
|
32,470 |
|
27,765 |
| Income taxes payable |
|
12,066 |
|
3,880 |
| Other liabilities |
|
4,213 |
|
2,773 |
| Total current liabilities |
|
925,185 |
|
1,058,567 |
| |
|
|
|
|
| Non-current liabilities |
|
|
|
|
| Loans and financing |
|
2,115,219 |
|
1,621,523 |
| Lease liabilities |
|
929,647 |
|
837,671 |
| Accounts payable to selling shareholders |
|
338,850 |
|
212,869 |
| Taxes payable |
|
86,016 |
|
88,198 |
| Provision for legal proceedings |
|
115,042 |
|
104,361 |
| Other liabilities |
|
52,025 |
|
18,280 |
| Total non-current liabilities |
|
3,636,799 |
|
2,882,902 |
| Total liabilities |
|
4,561,984 |
|
3,941,469 |
| |
|
|
|
|
| Equity |
|
|
|
|
| Share capital |
|
17 |
|
17 |
| Additional paid-in capital |
|
2,344,053 |
|
2,365,200 |
| Treasury shares |
|
(276,944) |
|
(299,150) |
| Share-based compensation reserve |
|
181,372 |
|
155,073 |
| Retained earnings |
|
1,861,948 |
|
1,380,365 |
| Equity attributable to equity holders of the parent |
|
4,110,446 |
|
3,601,505 |
| Non-controlling interests |
|
41,197 |
|
41,507 |
| Total equity |
|
4,151,643 |
|
3,643,012 |
| |
|
|
|
|
| Total liabilities and equity |
|
8,713,627 |
|
7,584,481 |
Unaudited interim condensed consolidated statements
of cash flows
For the nine-month periods ended September
30, 2024 and 2023
(In thousands of Brazilian reais)
| |
|
September 30, 2024 |
|
September 30, 2023 |
| |
|
(unaudited) |
|
(unaudited) |
| Operating activities |
|
|
|
|
| Income before income taxes |
|
521,029 |
|
336,826 |
| Adjustments to reconcile income before income taxes |
|
|
|
|
| Depreciation and amortization |
|
249,135 |
|
212,172 |
| Write-off of property and equipment |
|
2,108 |
|
1,209 |
| Write-off of intangible assets |
|
243 |
|
288 |
| Allowance for expected credit losses |
|
41,589 |
|
57,160 |
| Share-based compensation |
|
26,299 |
|
20,082 |
| Net foreign exchange differences |
|
7,462 |
|
448 |
| Accrued interest |
|
166,343 |
|
224,349 |
| Accrued interest on lease liabilities |
|
82,803 |
|
74,867 |
| Share of income of associate |
|
(9,726) |
|
(7,671) |
| Provision (reversal) for legal proceedings |
|
4,619 |
|
(27,119) |
| |
|
|
|
|
| Changes in assets and liabilities |
|
|
|
|
| Trade receivables |
|
(35,619) |
|
(52,169) |
| Inventories |
|
1,147 |
|
7,828 |
| Recoverable taxes |
|
2,409 |
|
(34,921) |
| Other assets |
|
20,107 |
|
35,960 |
| Trade payables |
|
19,966 |
|
1,920 |
| Taxes payable |
|
(6,625) |
|
25,321 |
| Advances from customers |
|
40 |
|
(27,883) |
| Labor and social obligations |
|
69,719 |
|
94,465 |
| Other liabilities |
|
4,417 |
|
(9,331) |
| |
|
1,167,465 |
|
933,801 |
| Income taxes paid |
|
(19,290) |
|
(37,599) |
| Net cash flows from operating activities |
|
1,148,175 |
|
896,202 |
| |
|
|
|
|
| Investing activities |
|
|
|
|
| Acquisition of property and equipment |
|
(93,367) |
|
(88,014) |
| Acquisition of intangibles assets |
|
(223,399) |
|
(67,113) |
| Dividends received |
|
6,195 |
|
8,294 |
| Acquisition of subsidiaries, net of cash acquired |
|
(579,074) |
|
(726,530) |
| Payments of interest from acquisition of subsidiaries and intangibles |
|
(55,898) |
|
(36,674) |
| Net cash flows used in investing activities |
|
(945,543) |
|
(910,037) |
| |
|
|
|
|
| Financing activities |
|
|
|
|
| Payments of principal of loans and financing |
|
(126,666) |
|
(12,216) |
| Payments of interest of loans and financing |
|
(156,897) |
|
(124,468) |
| Proceeds from loans and financing |
|
492,351 |
|
5,288 |
| Payments of principal of lease liabilities |
|
(30,218) |
|
(22,657) |
| Payments of interest of lease liabilities |
|
(82,567) |
|
(78,001) |
| Treasury shares |
|
- |
|
(12,369) |
| Proceeds from exercise of stock options |
|
6,041 |
|
3,546 |
| Dividends paid to non-controlling shareholders |
|
(13,368) |
|
(15,914) |
| Net cash flows generated (used) in financing activities |
|
88,676 |
|
(256,791) |
| Net foreign exchange differences |
|
(7,462) |
|
(448) |
| Net increase (decrease) in cash and cash equivalents |
|
283,846 |
|
(271,074) |
| Cash and cash equivalents at the beginning of the period |
|
553,030 |
|
1,093,082 |
| Cash and cash equivalents at the end of the period |
|
836,876 |
|
822,008 |
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