Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the fourth quarter earnings conference call of Cogna Educação. We would like to inform you that this event is being recorded, and that all participants will be in listen-only mode during the company's presentation. After the comments of Cogna, our agent will have a Q&A for analysts and investors. At that time, further instructions will be provided. Should you need any help during the conference call, please press star zero to talk to the operator. We also have a live webcast with audio and slides that can be accessed in Cogna Educação at ir/cogna.br. The presentation will also be available for download from the website. The following presentation is stated in Brazilian reais in accordance with Brazilian corporate law and generally accepted accounting principles, which now conform with International Financial Reporting Standards, except where otherwise indicated.
Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Cogna management and on information currently available to the company. They involve risks, uncertainties, and assumptions because they relate to future events, and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions, and other operating factors could also affect the future results of the company and could cause results to differ materially from those expressed in such forward-looking statements. Now I'll turn the conference over to Cogna's CEO, Mr. Rodrigo Galindo, who will begin the presentation. Again, Mr. Galindo, you may begin the call.
Good morning, everyone. Thank you for participating in today's conference call to discuss the fourth quarter of the year 2019. With me today in this conference call, Bruno Jardim, our new Investor Relations Director, Jamil Saud Marques, our CFO, and managing directors of our four business verticals. Beatriz Palmeira from Kroton, Paulo de Tarso from Fleury, Paulo Ceribelli from Saber, Maria Pia Bastos-Tigre Buchheim. Due to the severe situation caused by the pandemic of COVID-19, we will dedicate the first part of today's presentation to comment on the effects of COVID-19 on our business and our actions to mitigate these effects. On slide four, we present the actions we've taken to protect our students and employees' health, as well as to ensure the continuity of our services as defined by our crisis committee set up on March 9th, specifically towards this end.
First, we made the decision to migrate all corporate employees to home office so as to ensure they are safe, and we keep online services for them through our structure. We also provide healthcare services and psychological services online to our employees who may need these services. This is being offered by our occupational health and safety structure. Now, on the post-secondary segment, we suspended all on-premise activities in our own and partner learning centers as of March 16th to avoid the propagation of coronavirus. We suspended all on-premise activities as of March 16th. Since the training, enrollment, and renewal business operating normally on digital media. Since January, we already had the online admission exam, which makes it easier to continue with our enrollment with the centers closed. Before the crisis, we made the decision to migrate on-premise activities to digital platforms.
100% of our 32,180 disciplines were migrated. Now they're offered to 13,836 classes. Now classes can be synchronous or asynchronous when professors and teachers post their video classes or synchronous with live online activities. Teachers and professors can choose which model they will prefer. We believe pre-recorded solutions or asynchronous solutions are preferable for student loans because students can access academic content from practically any internet connection, even if more limited. For content where synchronicity is relevant, we also have a synchronous situation with live activities. 100% of all academic contents were already available on virtual platforms because of our academic model, KLS 2.0, based on flipped classrooms. What were the materials that were already available? Textbooks with 240 pages, live classes, and additional content with video summaries, discussion forums, tutoring.
All of these contents are organized by our teachers and professors. The numbers are incredible. More than 400,000 learning objects, more than 300 pages of material, video classes, exercises, tests, lots of content available. We will see today the engagement of our students with this content, which is extremely important. Let me tell you, the engagement is higher than in previous quarters. On page 12, we have a similar approach. All our own schools are closed. That is the process. The decision is made by each school, but they can migrate on-premise activities to our platform. In addition, we also have the digital school, which is a combination of three platforms, Plurall Maestro, and Google Hangouts Meet. All partner schools can offer digital educational services on digital media. Since March 19th, thousands of students are already using SOMOS Digital School, including our own school, and very successfully.
The digital school offers more than 400,000 learning objects, complete academic material, video classes, tutoring exercises, tests, and many other functionalities. On the second platform, Plurall Maestro, teachers can address lessons and specific activities for their classes or individual students. The third platform, Google Hangouts Meet, allows for live activities with teachers and students, ensuring a complete approach on digital media. Pitágoras Brand, the PBA digital learning platform, makes the same functionalities available to partners since 2018. Now, our prep courses, Andrion is providing their program online at no cost for students as of March 15th and through their online prep course, 100% of all academic contents are available at no cost to all students. On slide five, let's look at student engagement in this initial phase, as measured by our crisis committee. Beginning on the left, you can see the continued evaluation score of our students.
This is a game and size evaluation, looking at all activity developed by students. We have evaluation as of the fifth week of classes. That is March 23. As we compare that to the first half of 2019, the level of engagement has grown 13%. The academic engagement of students. As compared to the previous half, the increase has been 26% in student engagement as of the fifth week of class. This indicator is important because we know there's a big correlation between staying in school and having a high level of engagement. In the middle slide, we could see a pronounced increase in the number of students active, which has grown 81% comparing before and after March 16th, when on-premise activities were suspended, and students were truly migrating to the virtual environment.
All of our academic material, video classes, textbooks, et cetera, has had an NPS score of 81% measured by one million evaluations, average rate 9.4, showing these materials have been well-accepted by students. Slide six, let's look at some spontaneous statements of students and how happy they are about the actions we've taken. They post messages to colleagues on Facebook, they make compliments to our classes on Instagram, and they congratulate teachers on WhatsApp or email, evidence that we are on the right track in the way we're mobilizing these materials and the quality of these materials made available. On slide seven, we can see good numbers and K-12 current student evaluation. Our Digital School has impressive numbers. More than 4,000 schools, more than 41,000 classes, 53,000 teachers, 923,000 students, 16 million activities until March 30. The number is growing every day.
We've had 47 webinars, we've trained more than 40,000 teachers to use all tools of the digital school. Plurall, our app, our platform, is the closed app that has the highest number of downloads in education on App Store. It ranks three, like third, in all educational apps, which shows our strength. We can also see very favorable evaluations from parents and teachers about the digital platform of our digital school. On slide eight, another big concern about the uncertainties caused by COVID-19, which is cash position and corporate debt. Naturally, we could not predict the current facts, the timing of our follow-on public offering was key to further strengthen our cash position. February 11th, we received BRL 2.6 billion, adding to our cash position of the fourth quarter, in addition to receivables from the National Textbook Program.
Our net debt/EBITDA ratio is now down at 1.9x . That was below the covenant agreed with our two major partners. On the right side of the chart, we can see the amortization of our debt is pretty comfortable. The next big disbursement will be only in August 2021.
Being conservative in the current situation, we decided for the first time not to pay further dividends. In 2019, we had a payout of 68.6%, higher than the minimum mandatory level. We still monitor the situation with caution, of course, too. We continue to work on our plan with committee, and the market will be kept informed about any news. It is a difficult moment for Brazil, and we are 100% focused to get across in the best possible way. With this, I close this part of the presentation, and I invite Bruno Jardim, our IR officer, to present our financial highlights in the fourth quarter and the year of 2019.
Good morning to all. I would like to start by commenting that as of next quarter, we will be presenting the results broken down by the business vertical that we described in the Investor Day, October 19.
That is Crosspoint, Campus, Abeille and Boston. This will make it much easier to analyze the challenges and opportunities related to each of them. In slide 11, we see that the net revenue of post-secondary education dropped 14% in the annual comparison, reflecting the decrease in the change in the student base profile. These effects were partly offset by the increase in revenues resulting from the 2019 student recruitment process, in addition to the positive performance of the continuous education segment. Gross profit retracted 10% with a decrease of 540 basis points into a margin mainly due to the maturing of the 16 new own units and the impact coming from programs of engineering and health being given in later semesters. They are more costly.
Finally, the operating results fell by 41% with a 14.6 percentage points drop in the operating margin, mainly due to the additional provision for losses that were in place in the fourth quarter. This effect was partly compensated for by the reduction in general and administrative expenses, thanks to the greater efficiency and hybrid cost controls, in addition to the decrease in marketing expenses, which were brought forward to 3Q 2019. In the next slide, we see pro forma numbers for better comparability. For 4Q 2019, we moved the amounts related to the PNLE purchases that we have considered in 3Q 2019 to maintain the same seasonality pattern as in 2018.
In addition, for 4Q 2019, we included the PNLE purchase proceeds that will be recognized in 2020, excluding the effects of reclassification carried out in this quarter, with the reclassification moving as recognized historic cost, CapEx, and amortization as a consequence of the past. The impact affected the amortization line. We delivered net revenue thanks to our new go-to-market implemented for the K-12, and also we had an increase of 25% in annual contract value or ACV, representing 25% of RevPAR. Now, taking a look at the 12 slide, we delivered a net revenue growth of 7.4%, and our operating results reached 270 basis points in the margin and thanks to the synergies we obtained in the period. Moving now to slide 15, which is on our consolidated performance.
Similar to what we did with K12, I will comment on the results of 2019 in the pro forma basis for better comparability. Looking at the bottom half of this slide, our annual consolidated revenue dropped 4% in 2019 due to the lower basis for higher education students, which ended up offsetting the growth in K12 net revenue. EBITDA grew 4%. In spite of all the pressures, we were able to maintain a healthy level. Finally, our adjusted net income registered a decrease of 33%, with a net margin of 407 basis points, reflecting higher debtors and higher depreciation amortization. With this, I hand it over to our CFO, Jamil Marques, for his presentation.
Thank you very much, Bruno. Turning straight to slide 17, I would like to discuss the decisions we took in relation to the provision for losses in higher education.
The first point that I have to highlight is that our provisioning policy is based on the historical series and also the outlook for the future. In the analysis of the historical series, we have two very important moments: the migration of all students to cost systems and also the one-off increase in workload adjustment, or what we call PANM. Confronted with a scenario with growing uncertainty in relation to economic recovery, we decided to increase provisions for the next semester, what we have been doing then in the last three quarters, such that everything is being provisioned for. With the growing uncertainty also related to the COVID-19 pandemic in relation to the ability to pay our students have, it's very difficult to predict whether there will be an improvement in scenario, and that's why we had a complimentary BRL 181 million.
With this, the provisioning for the net was up 17 percentage points, up 23.7 points in the out-of-pocket segment. It's important to highlight that in the annualized analysis, we were at 14.9% growth. This would be a reduction of 115 basis points in relation to the first quarter, I think. Moving on to the right side of the page, we had a reduction of 120 basis points. Again, a comparison to the work, extraordinary provisioning to account for deterioration related to judicial reorganizations of bookstores in the 4Q 2018. When you look at the 4Q 2019, we see also that the P&L will also increase, and it has lower provisioning. Going to slide 18, we're going to talk about the average term of receivables.
For out-of-pocket, the average term of receivables recorded 115 days for 4Q 2019, up 11 days in the year of comparison, which reflects the challenging macroeconomic scenario that put pressures on the dropout rate indicators. It's important to remind you that this number, 115 days, this is in comparison with the second quarter and first quarter of 2019. As for the average FIES, there was a reduction of 22 days, reflecting the November receivables being received in December. Finally, the average PEP and PMT total of 691 days in the quarter, up 208 days in the year of comparison. In the K-12, the average time for total receivables was 39 days. This is above 4Q 2018 due to the postponement on the PNLD national textbook program receivables that were already accounted for in 1Q 2020. Now, on slide 20, we'll take a deeper look at CapEx investments and expansion and cash generation.
In slide 20, we will present CapEx evolution on the left side of the slide, and we can see that CapEx was BRL 483 million, representing 6.9% of the net revenue in 2019, down 200 basis points of the total investment. 88% was channeled to the development of content systems expansion and improvements in all units besides editorial CapEx. Now, talking about investments. For expansion, they reached BRL 295 million in 2019. That is 2.8% of the net revenue, down 27% in comparison to 2018, which was the year in which we concentrated most of the expenses related to our organic growth. For comparability purposes, on the right side of the slide, we present the operating cash generation analysis, including the PNLD receivables in 2018, as well as adding the receivables for PNLD that started being received in the beginning of 2020.
In this analysis, our operating cash generation was BRL 634 million year up 30% vis-à-vis 2018 with an EBITDA to cash of 36%, proving our focus on growing cash generation since 2019. It's important also to mention that in the non-recurring analysis, our cash generation was very solid in the fourth quarter, BRL 267.9 million, ensured half of it coming from the PNLD receivables in the first quarter and also owing to the lower disbursement in comparison to the previous semester, an effect that we have been signaling to you in recent times. Moving on to slide 21. Let's talk about our indebtedness. We ended 4Q 2019 with total cash equivalent of BRL 843 million, an increase of 19% in the quarter in comparison, reflecting the lower operational disbursements and the PNLD receivables.
We also received one of the Uniasselvi installations and raised funds with the sale leaseback of properties in the period. Those two non-operating events were sufficient to neutralize the payment of interest on the ventures and the investments in extensions besides the payment of dividends to Q 2019. Our indebtedness, adding the debt obligations and receivables short and long- term recorded BRL 7.2 billion. It's important to state that this level doesn't take into account the capital increase of February 2020, which the company raised BRL 2.6 billion, reducing its leverage significantly and putting us in a very solid cash generation position. With this, I give it over to Rodrigo.
We can see how this is the impact of coronavirus on our business. Let's move on to slide 23. Now looking at new enrollments in the first half of 2020. Until March 16, when we decided to suspend all on-premise activities in our centers, we had already attained about 70% of our goal in terms of new enrollments. We continued with our enrollment efforts after closing the centers using digital media, including 100% online admission exams and enrollment. The admission exam has been online since January this year. After March 16, as we closed our centers, we observed a slowdown in new enrollments after March 16. It is still early to assess the impact in new enrollments. There will be some impact, but the enrollment process continues until the end of April.
On renewal, when we decided to close our centers, we had already delivered 80% of our target of renewals. As in previous years, this process was already digital. Our feedback from students has been quite favorable. As I've shown earlier on, the students are engaged. They like the digital solutions we've implemented, and this is key to ensure a good performance in renewal. In the K-12 segment, this is a more resilient segment to this crisis. The acquisition of Somos was key to diversify our revenue stream. Today, 26% of our revenue comes from this segment, not including the National Textbook Program. Let me also emphasize our cash position in these final considerations. We continue to look at possible M&A opportunities. That's why we decided to conduct the follow-on public offering next month.
Until we have more clarity about the impact of COVID-19, we will maintain our solid cash position. We are already preparing a robust action plan to face the post-COVID-19 scenario, including restructuring to optimize our operations, always based on our DNA of execution and efficiency. Thank you all very much for participating. We will now open the Q&A session. Let me tell you that all of us are quarantined. That is, all of us are remote today. We might have some delay between the question and the answer because of the physical distance. I want to thank you all for being with us, and I now open the Q&A session.
Thank you very much. Ladies and gentlemen, we will now initiate the questions- and- answers session. If you would like to ask a question, please dial star one. Our first question is from Mr. Samuel Alves, BTG Pactual.
Good afternoon, everyone. Good afternoon, Jamil, Rodrigo, and other officers. I would like you to comment, please, on this migration of on-campus students to the online platform. Could you tell us a little bit about this move? We have seen about complaints, students asking for the tuition fees to be reduced. Have you received any complaints of this kind in any of your brands? Also in relation to the PDD, do you have any indicators, even if prospective indicators, that show a worsening of receivables for the future in relation to the provision for doubtful accounts? Do you have anything in that sense for March, for example?
Thank you, Rodrigo, here. We're going to gather all the questions in the Q&A. I will answer some of the questions. Others I will forward to the other officers, and I'll call them via the conference call.
Firstly, I would like to comment about tuition fee reduction complaints. We had a few comments in that regard, mostly coming from K-12. In our operations, we didn't see this yet. What's the main argument here? We are maintaining all the original costs from the on-campus operation. We continue to pay the wages of our teachers. Additionally, we have more investments and expenses that will ensure the migration to online. In addition to everything that we're already paying, we have this increase in infrastructure. Our prices, of course, our prices are based on a cost price sheet, and they are increasing rather than decreasing. That's why we cannot really accept any reduction in tuition fees. Now, I'll hand it over to Jamil for him to answer the second part of the question.
Hi, Samuel. Well, in relation to the prospective indicator question, we don't see it happening because the social distancing went into effect after the payment date. That's why we don't have any indicators or prospective indicators for now. What we have been observing prior to this new scenario is that while we had a complement of BRL 181 million, there was an adjustment relating to workload and also the effect of migration of students. We have been observing both on and off campus and online was really basically like a tie. Overall, one effect countered the other.
We were counting on the improvements of 2020, basically just looking to the improvements in relation to central payments that we have been observing since the second semester of 2019 in January and February, also with the effect of that we don't have a bigger workload now, this of course, was positive. This trend of increasing the PDA and also with a short re-enrollment phase, then we have the social distancing in place. All of this is compensated for a very significant part of those BRL 181 million. The situation had been showing improvement before the social distancing. We saw improvements in timely payments, I still don't have more information about the future, what we can predict for this isolation scenario.
Well, thank you very much, Jamil and Mr. Galindo.
Our next question is from Goldman Sachs, Mrs. Imindash. Good afternoon. Thank you very much.
I would like to go to the PDD question. I know it's very hard to predict the impact, but are you thinking of increasing funding available to students or extending the timeline for payments to maintain your student base? Based on the previous comments that obviously from the side of the student, it's very likely that there will be a worsening in the means of payment, the possibility of payment. Do you predict an increase in the PDD line? Also another question, is there an impact of COVID-19 in the firm's operation?
Rodrigo here. I'll start answering the first question, and for the second question, Maria will answer. Hello. The answer is yes. We will be creating new products that are suitable to the students and in a very organized way so that we don't see a worsening.
It could be a new financing model with discounts. We're still trying to think of the best option, but we will really offer them to the students that have an impact because of COVID. For example, students who lost their jobs or who saw a loss of income. We can say that we know, of course, there will be an increase in PDD for 2020 because we want to preserve and support our students. At the same time, we'll be doing this with intelligence, offering the benefits only to those students in need. Now, I'll hand it over to Bill so that he can answer about K-12.
Thank you very much, Rodrigo. Thank you for the question. In relation to the synergies that will come from the synergies of firms in 2019, all of them were implemented as we had announced early in the year.
Based on our internal culture, the synergies are always considering the budget for the following year. All synergies have been identified under part of the budget. I don't see in the current firm scenario that those synergies we have included in the budget will be left aside. We will continue to pursue them. The synergies continue to be in line with the previous announcements.
Our next question comes from Marcelo Santos from JPMorgan.
Good afternoon, everyone. Thank you for taking my question. There are two questions. First, could you please compare the behavior of distance learning compared to the students who used to be on campus after the pandemic? I mean, you showed that consolidated. Do you believe distance learning has an advantage or not? The second question about provision for doubtful accounts. How comfortable do you feel about this level of provision, and do you have any more numbers that validate this?
Hello, Marcelo. Thank you for your question. These two questions will be answered by our directors in VP. The difference in impact between distance learning maybe I'd like to answer the first one, VP, and the next one to Jamil, please.
Hello, Marcelo. Thank you for the question. About new enrollments. Both segments on campus and distance learning already had a digital enrollment process. The admission exam was also online, we can see that
Some of the tools are easier to understand for distance learning students, but the difference is very small due to our capacity to implement the tool also with our on-campus students. We were very quick to provide these tools to our on-campus students and teach them how to use them. The materials were already available only a few hours after the centers had to close, and we maintained activities on the platform. Our commercial team also uses this as an argument showing how our on-campus students are learning to use the digital tools in our platform. Our goal is not to have any differences in terms of distance learning students and on-campus students. Our commercial team is using this opportunity to show the advantages of our digital platforms.
Actually, all of our on-campus students already knew the tools of the platform, so they were used to doing some activities on the digital environment. On-campus students have had a slightly bigger impact, but the impact was similar after March 16, when we had all of our activities going virtual. Thank you.
Marcelo, thank you for the question about the PDD. Our level is 15% PDD. We believe this is a comfortable, this is an adequate level. We cannot yet mention impact of COVID-19. The only thing about social distancing impact is that the number of graduated students is more reduced. We may see an impact, we believe this will be a temporary impact. Thank you.
Thank you.
Our next question comes from Felicitas Beilu from UBS. Morning, everyone. Good afternoon. Thank you for taking my question.
Would like to have an idea of the impact now with COVID-19. What do you believe is going to happen with the price of both segments, on-campus students and also for distance learning students? What is your view for 2021 in terms of tuition fees?
Well, Felicitas, I did not understand your question. I could not really hear it. I just heard a few parts of your question. I will try and answer what I heard, and then you tell me, or you repeat the question, please, so that I can answer what I did not hear first time. You would like to know about organic growth and pricing now that we have the impact of COVID-19. Let me answer about this.
Our organic expansion plan started in the last semester, and on the roadshow of the follow-on public offering, we said we had no plans to open more on-campus centers. The organic expansion was limited, so now we would have a combination of the 60 some centers that we already have. They would grow, becoming a reference, and the margins would grow, because as we know, the newer these centers grow, the more they consume margin, until they begin to generate margin. We saw the positive impact. The plan, in fact, remains the same because our organic growth was already limited to these units we have. We usually have two investment waves. First, to ensure our units are up and running, either in a smaller business or in a leased building.
The second wave of investment is after we tested the city, the market says we know there is a demand. We already know the size of the demand and the size of the real estate property we will need. We usually build a new building, and that's the second wave of investment. The only change that may happen is that we'll have one semester or two semesters where we will perhaps move from a smaller campus to a bigger campus. This year, we had a reduction in expansion investment because after the first wave of greenfield investment was completed and a good portion of the second wave had already been made. That's why we had a reduction in expansion investment.
The only change that may happen, we believe, in terms of expansion strategy, is that we may take a longer time to move to bigger properties, and we may have to make adjustments for the smaller buildings to continue to be adequate for our students. These are minor changes. They don't impact the strategy. About pricing, it's too early to make pricing decisions for the next semester. Meanwhile, we keep our prospects in terms of pricing for the next semester, but that will be defined only in the future when we have a clearer scenario of the COVID-19 impact, and we will be able to see whether there will be an impact on pricing. So far, we don't see any reason or any justification for any pricing reduction. Our cost was not reduced, so it doesn't really make any sense to reduce prices.
We expected to increase prices in the second semester. Far, we keep the plan, but we will review that week after week, depending on the impact of COVID-19 on the national scenario. This is what I understood from the question. If you want, you can repeat your question, please.
No, thank you, Rodrigo.
I'm sorry for my connection. That was not so good. Thank you. Our next question comes from Ms. Susana Salum from Itau Bank.
Good morning, everyone. Thank you very much for taking our question. We have two questions. I would like to know about the Vasta pickup sales. Could this have an impact on the events of 2020, and will this repeat itself in 2021? In other words, when will Vasta sales begin? Could you also elaborate on the use of online content by the on-campus students, and what's the range that you expect for the end of the year?
Well, Mario will answer the first question, and the second question, I'll answer together with Roberto, Mario.
Thank you, Susana, for your question. By the way, I would like to answer the second question of Vinicius' question about Vasta, that we ended up not responding.
All of our efforts to put the partner companies on the online school platform is, of course, based on the objective of helping them continue operating without any disruptions to the educational chain. Up to now, only some clients could use our digital tools. Starting tomorrow, what we saw is that there is a long list of schools that are not our clients that wish to use Plurall. We have started our commercial campaign this year in a different way by making available Plurall to our prospect schools who might become partners next year. With this change of scenario, of course, there was a big change. All of our commercial team is working from home to support schools.
At the same time, it opened this huge opportunity of digital schools, and we have seen a lot of demand coming from the prospect schools that are not part of Somos but who want to establish partnerships with us. This is one of the points. I cannot really gauge if this is going to be better or worse than our expectations, but it is definitely a different scenario. We also observe that there is demand coming from partner schools and new schools for Plurall product. Since the children, adolescents are spending a lot of time at home, we want to provide an option to parents. We believe that this will create a very good incentive for cross-sale. I think that the outlook is bright for this year with, of course, the change in procedures, but we are still feeling very optimistic.
Here, Rodrigo, Susana, please go ahead.
Well, with relation to the sales cycle, what's happening in that sense?
Well, the ACV composition for the following year starts to be developed in March this year. We started it in February. That is one month and a half before the previous year. In February, there was no impact. We have agreements for next year. In March, we would have the natural rollout of the business campaign. As I said, it's unfolding in a very different way. By the way, just to add, tomorrow we'll have our first commercial webinar in our history, in which we will have all of our prospect clients participating in an online meeting. Interesting to say, we are completely sold out. No more seats available. Everybody is very interested. I think the different way of working is very positive.
Here, Rodrigo, in the segment of K-12, schools need content for 2021. Regardless of the type of content, whether it's digital or what happens, the schools will need content and they'll close contracts for the following year. I'll now answer the second part of the question. On the on-campus segment, I think your question was revolving around engagement of students and the use of the solution, right? Okay. I have a few numbers to share with you showing that engagement is very good. On campus, considering the students who used the environment, the number of students that used the environment, there was growth of 60% in the number of accesses among on-campus students, and also a growth in single access. This shows the migration that the students really adhered to the platform at higher numbers than in the last semester.
They are more engaged. Number of exercises or activities led by students. Because one thing is to access the platform, another thing is to use it. There was a growth of 42% in use of exercises. This is another very positive indicator of engagement of students. Of course, there are improvements to be made. There was a very significant increase in capacity and structure, but we are very happy with the results in the platform. I am not saying it is perfect, but we have been able to meet the demands of our students. Basically, those are the indicators that show that engagement has increased substantially among on-campus students. If you have a follow-up question, just go ahead. I just wanted to add some more information. We were really quick. In just 24 hours, we were able to make the on-campus content online, make it available online.
Our teachers began recording their lessons at home using PowerPoint and other tools and video, using their own smartphone. Also, we were able to quickly offer broadcasts. Our on-campus students are feeling very satisfied in comparison to other students from other educational groups. I think that the reaction was quick, and the acceptance was very good as well.
Thank you very much for that.
Our next question is from Mr. Leandro Bastos from Citibank.
Good afternoon, everyone. I would like to talk a little more about COVID-19 and its impact on K-12. I have two questions, in fact. First of all, do you see a risk of returns in relation to what has been contracted early in the year? Could you make a few comments about it? This would be the first question.
Secondly, are you in the discussion or expecting a change in the PNLD cycle for this year?
Well, Mario will answer the first question, and the second question will be answered by Paula Selim, okay?
Leandro, thank you very much for your question. Well, return is a process that takes place along the semester. We don't see that the rate of returns will be above the numbers we have announced of 25%. Since now we have to release tablets for all students in classes, we are feeling much more confident about the number of students that are attending classes. Considering the number of students and considering the communication we have received from schools, we don't expect returns to be higher than before. Selim, could you please answer about PNLD?
Thank you.
Thank you, Leandro and Rodrigo.
Well, here we don't have any indication that things will be different from what they have been so far. Well, it's now under analysis by the government and probably by August, or that is within schedule. We've been talking to the Ministry of Education in relation to the PNLD, and they don't foresee any changes.
Thank you very much for those answers.
Our next question is from Mrs. Paula Picasso, Cobra Insider.
Thank you. Thank you for answering my question. Could you please tell us a little bit more about the investment?
Could you give us a ballpark on the investments that were suspended? Also, could you give us a little more flavor on net debt over EBITDA? I'll hand it over to Janio for him to answer the question. Sorry about that.
In relation to the investment plan, we believe there will be a reduction along 2020. What I can say is that this is the plan, especially in the area of expansion. Most of the investments have already been made since 2018. Also in current operations, we have implemented improvements. As for the leverage, with the coming in of the follow-on plan, we now are at a multiple of 1.9x. Without considering any additional impacts that we cannot foresee, this is the level we had expected for 2020 without considering any exceptional events or M&As for this year. Rodrigo here, just to add in relation to investors, at the end of my presentation, I have mentioned that we are shaping up a very robust action plan for COVID-19 with reduction of investments and also reduction of expenses.
As we begin to understand the impact of COVID-19 for our enrollments and student recruitment rate, we will take action to size the company or dimension the company in such a way that we'll continue to maintain the positive outlook. Of course, maybe the changes won't be needed, if the scenario is proactive, we will have to take swifter and more aggressive action. I think this is one of the characteristics of the company. We're able to quickly adapt to new scenarios wherever we are in the post-COVID-19 era. Thank you very much.
If you have a question, please press star one. Our next question comes from Mr. Rodrigo Juan from Bradesco BBI.
Hello, everyone. Thank you for taking my question. Good afternoon. My question is, let's go back to the micro scenario of post-secondary education. The host factor was under pressure. Let's try to forget COVID-19 a little bit, but what do you expect for 2020? Will there be a price war for distance learning? What is the scenario you expect?
Well, I will ask Roberto Valério to answer this question.
Hello, Rodrigo. Thank you for the question. In this scenario of prices for distance learning at post-secondary, we are watching the market. We have discussions about this new regulation, it's now around about BRL 150 per month. That we try to avoid a price war less than this, BRL 170, that would not be adequate. We believe there will be more competition on price. We look at prices in every marketplace, but if we look at pricing in detail using different tools, we actually make phone calls to try and understand the pricing in each marketplace. We have been able to maintain our average ticket. About the question, we have not seen any difference in the price war that was already. We did not see any differences in terms of price wars.
If we see a more fierce competition, we will have the right tools to overcome that situation. Thank you very much. Our next question comes from Javier Martinez from Morgan Stanley.
Hello, good afternoon. My question goes to Roberto. Still talking about pricing in the on-campus business. Looking at the model and the pricing tools that you use, I understand what you said, that since we did not have any cost reduction, there will be no price reduction. I understand the concept, the philosophy. Now, if we have a simple reading, a simple benchmarking of your business and looking at pricing in the next few years, Kroton has always performed above its peers in terms of pricing. Now the prices are more similar. Earlier on, the price was also similar. Then you had this very good pricing performance. Since 2016, you now have more students and more market share. You have this mix of out-of-pocket and FIES and FIES students.
I'd like to understand your pricing position, not in relation to cost, but in relation to the competition. If they're pricing high, does that mean the competition? This is my question.
Thank you, Javier, for your question. I will answer partially. The first thing about this is that for on-campus students, we did not lose any market share. Looking at each marketplace, we did not lose market share. We lost market share in distance learning, but not revenue share. Let me remind you that what we want here is to maintain a high level of revenue because the cost, we already have the cost, and we have 450,000 students. There is not a big cost change when we add more students. Additional revenue has a bigger impact on distance learning. It is important also to note that we aligned our prices of distance learning students to the market, about BRL 160, and we could see a big acceleration in the level of satisfaction, which proves that there is a high price sensitivity. We can accelerate volume.
You grow volume, but you may lose fit, we have to make sure that the net impact will be positive. It's not so obvious to reduce price to gain volume. We conducted a few tests. We could see a strong growth in the participation of students, until the beginning of the outbreak of COVID-19. It shows that price makes a difference. I think it's important to make it really very clear that in the distance learning, revenue has the biggest impact, because having more students, growing our market share is really important, and we're working for that. Revenue share is the most important thing for us, and here we did not have any losses. We keep it at 32%, 33%. If I may add, using your expression, make the company ready for distance learning.
As soon as we had the regulation on distance learning, we knew there would be an increase in the number of distance learning centers, and we needed a lot of discipline on pricing to avoid having a disorganization of prices. This is what we did for 18 months. In three or four recruitment processes, we had a big discipline in prices trying to maintain our revenue share, if not, we would lose market share. This is not a strategy that can remain forever. It had a goal, which was for us to wait for the market to self-discipline. We believe the market has self-discipline, so now we have a more balanced strategy between price and volume, which was working really well until we had the COVID-19 outbreak.
We don't know what the impact will be, but we're certain the strategy is right because, of course, there is this international, this world impact. Before that, we had a growth in revenue and volume. We believe in this strategy. Maybe it's not going to be so visible now with the COVID-19 outbreak. Even now the market is now disciplined, and we can now have a more balanced strategy of pricing and volume. Thank you very much.
Well, in relation to the potential business, I'm not really sure. I think that in 2016, it was around 30%, but now it was closer to 60%. Please correct me if I'm wrong. Now with the new regulation, if you make an adjustment to the level of capacity, it could go lower. There's a lot of capacity for more volume because the market is a market, and we have a lot of idle capacity. One thing is to increase prices, and now with the new regulation, this will be maybe too low. This is my question.
I'll start to answer. Roberto will complete. This discussion is more around on-campus. In relation to on-campus, yes, there is an opportunity for increasing capacity. There is a limited potential in relation to our costs and expenses. This is based on the physical structure limits because all of our costs come from classrooms. In classrooms, I can, I don't know, put 10, 15 students. What's going to tell me whether being efficient or not is the revenue being generated by this class. There's no right or wrong strategy. What we try to find is the optimal point of revenue generation combined with volume and pricing. At every new semester, we make adjustments to strategy to get optimal results.
For 2020 on-campus, similar to DL, the numbers were going really well, both in volume and revenue on on-campus. In the student recruitment revenue, this is a revenue that has been growing consistently for the last three semesters. The strategy is driving revenue. We see that it's growing semester on semester. There was an increase two semesters ago now, and before COVID-19, we had 50% of the processes completed and was growing at an even steeper rate than in the past. It's generating more revenue. We still have room to grow. I think that in relation to this low use, I think this is more an opportunity than anything else.
We set up the structure at the time when there were other programs that are no longer in place. Now we have room to continue growing our recruitment along these without a lot of investments. I think this is in broad lines what is important to remark.
Yes. No, unfortunately, I don't have anything to add. I think you were very complete, very thorough in your answer.
I'll hand it over to Cogna for their final considerations.
Thank you all very much for participating in this conference call. Our investor relations officers will be available if you have any further questions. Good afternoon. Thank you all very much. Cogna conference call is now closed.
Good afternoon to you all.