Good afternoon, and thank you for waiting. Welcome to the Unifique teleconference on our results for Q3 2023. We have here with us today Mr. Fabiano Busnardo, director and president; José Wilson Júnior, CFO and investor relations; and Guilherme Galvão Villani, the investor relations manager. This event is being recorded, and all of the participants will be listening to the teleconference during Unifique's presentation. Then we will open for questions and answers, when more information will be offered. If you need any assistance during this call, please click star zero. This event is also being transmitted online on unifique.com.br, where the presentation will also be posted. Slides will be controlled by the presenters. This recording of the call will be available after we close. Participants can send questions to Unifique on the website, and we will answer them by the Investors Relationship department after the call.
We would also like to say that predictions and declarations which were made during the teleconference regarding the Unifique business perspectives, projections, methodologies, and financial results are based on premises and thoughts from the board, as well as information that is available regarding the market. Considerations on the future are not an assurance of performance and depend on future events, thus depending on situations that may or may not occur. Investors and analysts affect the results of Unifique and cause different results under the conditions. With that, I will pass the word to Mr. Fabiano Busnardo. Please, Fabiano, the word is with you.
Hello, good afternoon to all. I would like to talk about the results. We have understood that our results were satisfactory given the macroeconomic scenario that we have been observing in the market. We saw a decrease in debt if we look quarter by quarter. In 10%, we had an improvement EBITDA of 9%, and we, during this period, have also been able to participate in this more competitive market. We have been able to decrease our churn rates to a number which is still not our final objective and goal but which is better. It is an improvement, and this is also improved when clients cancel or contract; we are able to retrieve the recovery of equipment, which ends up improving our investment index, reducing churn.
Regarding organic growth, we still have a ways to go, but it is important to look at the period of a more troublesome market. Unifique has maintained its loyal to its price policy. Unifique does not charge more. We charge a fair value for the best service, and obviously that ends up sometimes being a ticket, which is a bit higher than market practices in the region.
But it is the way that Unifique has chosen to work to assure quality throughout its history, thus allowing us to provide a differential service, which forces us to make more investment and have a higher CapEx, but keep our tech updated and cutting-edge. I like to say that we are not in a 100-meter dash; we are running a long-term marathon, so we need to be in for the long haul and keep the company healthy so we can face and overcome challenges. During this period in which the market is a bit more difficult, we have been able to, let us say, fix house and decrease churn and net infancy, and this is all happening because we have been more restrictive in sales.
It's not just because we have a better ticket, but we've also been more restrictive to sales, looking at credit scores, which ends up filtering our clients more, and we believe that this is the path that we will need to trail. You end up bringing less clients in but losing less clients and the economic relationship is more interesting or economic benefits and growth. We also have a novelty, which we think is totally relevant. After almost two years working hard and tirelessly, Saturday on the 11th, we will launch our first city with 5G. With Unifique coverage. It's the city of Caruaru, a small city with 18,000 inhabitants. It's part of a package of three cities we will be covering now with 5G. We don't want to call it a pilot anymore now.
It's not the technical pilot; it's the commercial sales pilot, so we can understand if the market will in fact be demanding and using this new technology. We are very impressed with the performance of 5G and of our technology, and I think it will really be a game changer in the future. We set up the network with 3.5 GHz, which is what Unifique was able to achieve in the public bid at the end of 2021. After hard work to secure this and to set up the platform, set up the technology, Unifique was then able to in-house develop the BSS platform, which manages clients. We were able to develop a digital journey platform for clients, which we think will revolutionize the sector.
There are a few small changes to be made, but it's a very complex system, and on Saturday we will finally start selling this coverage. Unifique has run some tests starting last month in one or two cities, selling the Unifique chip and also working with roaming and an already existing pre-existing coverage. We will now test this solution, a solution where we see some commercial answers from the market. We think that this is superior tech, but we do need 5G equipment. We are launching 5G standalone coverage. In 100% of the city, we will no longer be selling 4G in that city, only 5G. It's a market we're taking directly into the future, into 5G, and we're super curious to see how much of a high.
Thanks to the results from our recent tests, we'll be very impressed, and we believe that we'll have a good adhesion, and probably in this new platform for mobile, we will find the leverage for growth that we need so we can make it up to those previous growth levels we have. I will pass the word to José Wilson, our CFO. He will mention some details on the numbers I just shared with you.
Good afternoon. Just as Fabiano mentioned, and I'd like to reiterate it, the fact that we have organized the house in the second quarter of 2023 is bringing us where we are. You can see on the slide that we are increasing and improving margins and profitability levels for the company in the third quarter of 2023. Obviously, this demanded a level of adjustment and perfecting budgets in the company.
We became more diligent with this, given the companies that we acquired and where we are hunting margin, where we have improved margin with the companies we acquired and have been capturing synergy. I think the Q3 2023 brought those synergies home, and we see that reflected in the numbers. So at the Q3 2023, we reach a recurring EBITDA margin of 48.9% and an EBITDA recurring of BRL 113 million. Another aspect that was very positive during this last quarter was our working capital management at the company. As Fabiano Busnardo mentioned, we have been able to amortize the debt and improve the company's EBITDA. So the company is now reaching a leverage level, leverage EBITDA levels of 0.5x. What does this mean for our way forward?
We are very questioned about this because for a long time, we have come from a very comfortable working capital and cash flow situation. Now, we find ourselves in a moment of being wise stewards of the situation we find ourselves in. It is a moment when we have the opportunity for relevant M&As. We have opportunity and also opportunities for accelerating growth of 5G. If we, in case we come across a situation where we have a good market response and a condition in which we are able to make accelerated investments. A positive point, a highlight I would like to mention, is regarding the credit line that the company has been able to run for 5G and our trust credit line at BNDES, the Brazilian Development Bank . We have been approved for credit of BRL 250 million.
Of those BRL 250 million, the leverage conditions and the cost of the debt is CDI + 2.7 a year with a clean guarantee. So really great conditions for that debt renegotiation and credit line, and we were able to achieve these rates given our clean track record over the last period. We presented to the BNDES, which are the projects and the locations in which that we are interested in investing in, because these resources are connected to locations that Anatel has mapped out, so we have already been able to map this out. Given that we are going to start the effective process of effectively signing the contract and capturing the credit. The Brazilian Development Bank approved BRL 71 million at this moment. Besides this, the company is studying how we will be able to approve the debenture.
This has an additive credit for 5G, and this will help to accelerate the company's growth in this new sector in case the market effectively demands that. So it is a very comfortable situation we are in. Regarding the structure, our debt structure, if you look at the reduction, it was basically regarding the amortization of participation. We had two relevant operations to prepare for. One was Naxi, which we acquired over the last period, and we also saw an amortization of something close to BRL 40 million that we invested in the acquisition. Consequentially, we found that we were able to reduce this liability. Fabiano mentioned churn. It is one of our main gains. Churn from the Q3 2023 was 1.7%. It is a churn that we had not reached for quite some time now.
A lot of that in-house work was one of the reasons that gave us that better churn. We are including in our base clients that we consider to be good clients, high-quality clients that have something to bring to the table for the company, and in no way deteriorate the results for the company. This is positive. The numbers reflect it. It's a series of actions that the company has been applying to maintain our profitability and to maintain our options for growth. Regarding future M&As, the company will continue to look at operations. Possibly, there are operations that are currently under due diligence. In this exercise, I think there might be a few other operations, a few other acquisitions approved.
We're working hard on this because if on one end we're seeing or we're having the option to be more careful in terms of growth, organic growth, if we have the opportunity to purchase the way we have purchased and still maintain the profitability with synergies, we will continue to do so. If we can make any further acquisitions that allow us to synergize, our current comfortable position allows us to do so. That's something we're looking at closely, working closely with, which is the consolidation. Of course, we will be looking to consolidate any more interesting partners or acquisitions that may show up. But while they don't show up, we'll continue with the middle-sized consolidations. This is a scenario that really a lot of people wish they could benefit from.
I think the work has been done, and I believe that on the short term, we'll probably see a repeat of exactly that. In general, those are our first pointers. Actually, the main messages we have to share with you are really those. With that, I think we can go to the questions from the participants. Good results, good numbers, and all shared with you.
Ladies and gentlemen, we will now begin the question -and -answer session. Please, in order to ask a question, type asterisk one. If you want to remove your question from the list, type asterisk two. We have one question from Lucca Brendim from Bank of America.
Hello to all. Thanks for the question. I have two. First, if you could talk about CapEx. [inaudible] . I would like to understand how we can exceed these numbers moving forward. If you could break that down in maintenance and homes passed, and what you see the strategy, what does that strategy look like? The second question would be how you have seen changes in the competitive scenario. You talked about how you maintain the same strategy for pricing, but how do you see that working over the next few years? I think that will you be able to increase ticket or raise prices for the new clients?
Okay, let's talk about CapEx reduction. We in fact had a CapEx reduction at the company. Why do I say this? Because if you look at our history, we accelerated the construction of ports in Rio Grande do Sul, which is the market where we increased our clarity there. Then, if you also look closely, our take-up rate was reduced because of the amount of ports and homes passed. If you can imagine that in 2021, when we were working only in the Santa Catarina market, we had a take-up rate of about 32%, 33%. We were able to reach our lowest take-up in the second quarter of 2023, where we reached 21.5%. We chose to hold that investment in CapEx back so we could now start to occupy the ports which were built and acquired given the M&As we conducted. Today, we're looking at a take-up of 22.2%.
Another factor that will impact the company's CapEx and where we see good results is the issue of retrieving our equipment from clients' houses. We have composed a task force which brings in good efforts. We see that the equipment which was retrieved from people's houses, and we were able to retrieve 10,000 equipments, which is a significant number, and this also helps us to see a reduction of CapEx in the company. Effectively, that was our in-house organization in the third quarter of 2023, and thanks to those actions, we have in fact been able to have good results. This also helps in the results and the company's cash improvement. Of course, moving forward, when we talk about CapEx, 5G is maybe a surprise. We are well-positioned, as I mentioned.
If we have demand for 5G, we can also have an acceleration of this investment, and then we'll see a curve where we see the maturing of the investment and reaching out by home. But we may see over the next few months; that will depend obviously. We clearly informed and reported to you because so you can understand the level of control that we are undergoing at the company. We are open in four segments. Today, we're looking at organic growth in itself, broadband, and that's how we are managing the company's new line of products, which is also something that we're offering exclusively. We have the 5G, which we're launching, and we have a fourth line, which is the inorganic growth.
We understand that as much as we have the know-how and we're able to accelerate the process of synergies and bring in results, we see that if we have more and more of this information available, then I will be able to accelerate the capture of synergies and be more assertive in the process. Regarding the market change in terms of competition, I'm going to pass to Fabiano, and he can tell us a bit more.
Thank you. Thanks, Lucca, for participating. Just to conclude then, just that Wilson's presentation. Thanks to our speed-up of installations and the way we expanded well in the last year, we have significant stock of ports, which we'll be using to broaden the ports and home passed, which helps us because, well, it's a way of increasing investment, increasing OPEX.
We have advanced in this path, not at the speed we wish we were. Now I am sort of answering your second question already. Despite the fact that we have those plans, it is really not at the speed we wish, but we have made an effort. Despite our diligence in sales, even though we are insisting in this narrative. Right now, we are currently trying to increase this 5G scenario. We are covering three cities, though, which will add up to 100,000 inhabitants. The first will be launched this Saturday, and probably over the next few days, we will be able to raise the other ones. I think with these 100,000 inhabitants, we will have a very interesting sales pilot.
We are optimistic that this will help Unifique to have an increase in organic growth, be it in the way we offer a sophisticated combo with high-quality fiber and high-quality 5G, and that is with 5G coverage. Our 5G will have to work everywhere and very well. That is not what we are used to seeing in big cities where the technology is available, but typically, according to some reports, you spend most of your time still in the 4G network. Here we are setting up a very well-studied network so we can have 5G coverage here and 4G there. We think that this may be a differential, an upper hand, a competitive upper hand that we can leverage. Besides that, we will obviously make the effort of being more assertive in sales with fiber as a whole.
In some places, I think we have been able to do this, and in some places, we are having a higher level of competition. The level of competition is very high, and I think we will have a very good test in Garuva where we have five or six different fiber competitors. It is a difficult market, but I think by the end of the year, we will be looking at a very good indicator of if what I am telling you is right. We do believe that this will be a game changer for the company. We will find out soon if it is or not. If it is, we will definitely work on a 5G expansion plan for next year, which will probably demand a higher level of CapEx but will definitely be very connected to its returns.
We will either do this only when we are totally sure that this investment will give us the expected returns.
Thank you so much for the answers. Clear as crystal.
Ladies and gentlemen, we will now begin questions -and -answers once again for the webcast participants. These questions will be read by the speakers. Ladies and gentlemen, please look at the webcast questions if you have any.
Okay. We seem to have dropped in volume, but it is back now. We have two situations. The situation where the coverage of cities of Unifique is making its ads and installing equipment for frequency and connection, where it will be providing 5G equipment. That was our choice to invest specifically in. We have some other cities also, two more cities.
For strategic reasons, we're not going to be sharing the names of those two other cities, but we will also be working on other cities at the beginning of next year, and also for a braver expansion plan, a more ambitious expansion plan if we have great results on this sales pilot for the first three cities. Why? Because for this Unifique-owned coverage, you'll need to have a 5G telephone. We know that this has a limited amount in the market still. Not most phones are 5G. It's still the minority. We need to know how willing people will be to update their phones to 5G phones to have better services than they have today. There's an investment that needs to be made. This is something that we're trying to figure out.
We're also focusing commercially on the launch of a combined supply of fiber and mobile. If the client wants to buy only mobile, there won't be any problem with that. There's a more specific product that is more competitive for clients that adhere to the combined fiber and mobile operation. That's really a situation that we're going to be testing in the city where we offer our coverage. Unifique can also sell its services today at the 800 municipalities of Santa Catarina and Rio Grande do Sul in roaming. We have an agreement with the operator that already covers those cities, and Unifique may agreement to use the coverage of that operator so that clients can connect and then redirect that traffic to the Unifique data center, and then we treat it here. This service doesn't have tech reference.
We will be selling the same thing that Claro and Vivo had, which are the three operators that are disputing market share. In the cities where we offer coverage, we have the differential of having 5G standalone, and we are confident regarding that. There is this issue of, well, the fact that the client needs to update their phone to a 5G phone. We want to see what happens in the market, of course. iPhones after version 12 already have 5G tech in them. There is an amount, but we want to see if that's enough, because then before we used to launch fiber, and we had to occupy those ports to justify investment. Now it's the same, and we need to have an amount of clients connected to that to justify investment and expenses. It is an operation where there's a lot of synergy.
We think all the backhaul fiber is already available. We have also the store considered, so we think there's going to be a good opportunity here. I'll pass the word now to José, and he will answer the other two questions that were left open.
Okay, guys. There's a question here about the partnership that we organized with Plantare. What do we have with Plantare? It's a cooperation agreement very much along the lines of what we already shared with the market. It's a scenario where we are exchanging client portfolios, possibilities of different clients. What is the energy of this today? The energy that an exec or a collaborator of Unifique invests in the day-to-day operation like this. It's very little or almost nothing. It's an activity which is being executed 100% by the Plantare team.
Within one year, we will sit together and assess how this client portfolio behaved, and then based on that, we can define the equity which will be reverted to Unifique. We understand that it is a way of monetizing our clients based on what we already understand and how we have performed here. We believe it is a sector in the future that will bring us good results. With Plantare, that is what we are expecting. Another point which was raised here was regarding leverage. As I mentioned, if we need to accelerate this, we can capture synergies. Given our proximity with financial institutions, we have a very receptive scenario of banks that want to make credit available to us. We have a great supply and good offers.
Today, what we need to have is the appetite to reach an EBITDA level of up to 2.5x. This would allow us to take on indebtedness of between BRL 900 million -BRL 1 billion. It is a scenario which would allow us to do quite a lot. It is a scenario which is really special, something that the company has access to, and it will be implementing it in the mid- to long term. That is our scenario at the company today.
Hello, good morning. I would like to thank you for being here and say that we are super optimistic with the future of the company. I think we will have results for 2023 that are reasonably positive, very positive. I think we will be delivering growth and improvement, and I think this growth and improvement of numbers that we saw in Q3 2023 is something that we will be able to fix up for the fourth quarter. I think that there are some things that can be improved, maybe improvement, and then we will be able to reach for the fourth quarter. There are probably some more improvements too. We have spent a lot of time and energy in launching our mobile operation, and we have already collected rent and have not collected yet, but we will sit on the 5G investment.
This is going to change very quickly, and we are very confident. It is not that we do not have the ability to take on more leverage. We even could, if the opportunity is good enough and convinces us. We do not need to do any magic at the moment. Everything is very stable.
We think that the company is doing quite well. Growth levels are steady. We are obviously monitoring the market, and if there is an opportunity that we understand will generate value for shareholders, then we are ready to grab that opportunity if it comes up. Alongside that, we will continue to go through our work as well as we can, improving results. I think the company, ever since we launched the IPO, we did BRL 112 million, BRL 113 million, which is a coincidence because in the quarter when we IPO'd, that was also, I think it was BRL 54 million or BRL 56 million. We basically have been able to double results since the IPO. That is a great mark to hit. While there are improvements to be made and numbers to show.
Perfect. We went from BRL 53 million- BRL 54 million 24 months ago to BRL 112 million. I think we have some credits left to improve, and we're confident with the future of the company. We're going to work hard to keep improving, and if anyone wants any additional information on this, we're available to share with you. Guilherme's available at investor relations. Thank you. Strong embraces to everyone. Thanks for coming.
The audio conference for Unifique Q3 2023 results is over. Thanks for coming. Have a really great afternoon. Thanks.