Good afternoon, and thank you for waiting. Welcome to our conference call to tell about the results of the second quarterly report of 2021. If you need simultaneous interpretation, we have this tool in the platform. In order to do so, click on the button Interpretation through the globe in the bottom part of the screen and choose the language you prefer, Portuguese or English. To the ones listening to the conference call in English, you can mute the original audio clicking Mute Original Audio. We inform that this conference call is being recorded and it will be available in the website of the company with the complete material available there. During the presentation, all participants will be with their listening only mode. After presentation, we will start the Q and A session for analysts and shareholders.
You should click in Q and A in the bottom part of our screen, putting your name and your company's name. If request to open your microphone will be on your screen, you click there. We highlight the information in this presentation. Any statement that could be done during this conference call related to business perspectives, projections and targets in Ser Educacional, they are assumptions for the company and also information available. Future estimations involve risks, uncertainties and assumptions because they are related to future events, and therefore depend on circumstances that may or may not occur. Investors should understand that economic conditions in the industry and other operational factors may also affect the future performance of Ser Educacional and may be different of the one said here. I will now hand over to Jânyo Diniz, CEO of Ser Educacional.
Jânyo Diniz says, hi everyone. Thank you so much for being present in our quarterly highlights. Now we have a different format with video and simultaneous interpretation we hope you like. Let me show our results that were very important. We have a combined result of our base. We believe this is the inflection point. This because in this semester we are back with our results. In the next quarter, we will have more students enrollment in the hybrid, on-campus, and digital teaching. This way we are going to speed up the net income growth. Another important aspect is that the results reflect our objective, being a company with a higher education portfolio, more balanced between digital teaching, hybrid, and medicine. The hybrid teaching represented 74% of our EBITDA in the last year.
After the acquisitions we consolidated in the last 12 months in UniJuazeiro, UNIFACIMED, UNIFASB, UNESC and Beduka. Organic growth of our digital teaching represents 50% of medicine, corresponding to 35%, and digital 50%. This diversification owes to our strategy to build an ecosystem of continued education, which is complete and maximizes the revenue on our assets. In this quarter, we announced two new acquisitions. FAEL, because it has strength in the offer of digital teaching, and CDMV/DOK, that increases our specialization in veterinary medicine market. We are strengthening our continued education ecosystem with a course complete portfolio with a multichannel supported by Ubíqua. Our course curricula and state-of-the-art generation assures flexibility, scale in teaching quality, state-of-the-art technology for our student base. On slide five, we detail the evolution of our results as medicine school. We have a growth of result.
We have 65% occupation on our spots. We have ongoing growth of result. We have a strong presence also in Rondônia and the countryside of Bahia, two regions that grow a lot because of agribusiness. On slide six, we presented the organic growth of our digital education, which presented the growth of the student base in 121%, and almost doubled the revenue and grew the EBITDA, adjusted in 56%. We executed our new strategic plan. We could replace our teaching concept, our teaching grade of online digital teaching, having our course offer in this area with lots of news and speeding up our distribution online. We have a customization of our modern course portfolio and our pioneerism in our market. We have been having very interesting results with lots of potential of growth and scalability. On slide seven, we detailed the acquisition strategic rationale of FAEL.
We have value generation potential, which is strategic also. Ser Educacional has specialized in offering digital teaching in our own unities through e-commerce. We have a multi-channel offer. We needed to evolve in our learning units offer. FAEL is a perfect fit for Ser Educacional. We have presence, which is very relevant in South and Southeast region. We also have a national rich company with regional brands which are strong. Another important aspect is to have synergies and costs, especially because of the offer of course in the health area, engineering in FAEL learning units. Now they offer only humanities course, but also because of all optimization and utilization of brands in our learning units and have the capacity to leverage operationally. On slide eight, we show our acquisition, the most recent one, which is CDMV/DOK.
We have on-campus higher superior that makes sense for the future. We have growth trend in health and engineering segments because of the practical classes. So we have a paradigm shift in our segment. The differentiation of CDMV/ DOK is the focus on veterinary practice in specialization and doctorate and master's degree. I mean, specialization courses, which is complementary to the Ser Educacional graduation. We have differential in the current veterinary medicine undergraduate course, and also postgraduate courses and continued specialization course based in practical classes. This way, we can sources of auxiliary revenue generation with and broadening of our social services in the operation cities. The theoretical content will be digitized and will be part of Ser ecosystem to be offered in all its platform, which we have sound regional brands. We are only going to have online courses with GoKursos and commercial partnerships.
Talking about it, GoKursos, on slide nine, we will see that our online courses portal is evolving very fast. There are 5,000 courses in the market. We launched it at the end of June, our newest version of the portal. We have a platform to distribute courses with a powerful commercial model. We also have a modeling of sales by subscription. It's a very interesting way of doing it. We are going to expand each time more our course portfolio, so that we have a content base which is very broad, so that we can explore many different ways, opening space for innovation and new growth avenues of revenue. On slide 11, we have the result of students intake in the first semester.
As we showed before in the presentation of last quarterly, hybrid teaching ended up recovering well in the second quarter, and digital teaching followed growing because of all the investment. As a result of our intake, our overall intake, we had a 52% increase. What I understand is important, especially on this period of pandemic, with hybrid teaching dropping only 10% and digital with growth of almost 200%. We could grow 22%, and you will be able to see it on slide 12. FAEL will permit us to have a better capillarity, and will benefit our proposal and different value for our students. On slide 13, we have good news. Our average hybrid teaching ticket increased almost 9% in the quarter, supported for higher volume of medicine seats and the growth of our student base in the health segment overall.
Our ticket presented a drop of 9%, especially because of a mixed change. Other than that, as we showed in the higher education funding program in Brazil, it is a topic from the past, represented only 7% of our student base, showing our company could be profitable more than average. These were my initial comments, and now João Aguiar will detail the results of the quarter with more detail.
João Aguiar says, thank you, Jânyo. Thank you all, and thank you for sharing our result statement. Let us see the result of the quarter. We have very positive news in growing our net revenue, which was impacted by the growth of our base student and the recent acquisitions. This is very important, especially because in this semester, it was not impacted by the pandemic. This semester was impacted by the pandemic, and hybrid teaching did not recover.
We have a very important vector to originate results from the third quarter on. Let us detail the behavior of costs and expenditures. The second quarter in 2020, we had an atypical behavior. This happened because in that period, there was the impact of isolation measures. What led Ser Educacional to reduce its expenditures in all fronts. For this quarter, it is the opposite situation. We are investing again in our organic growth, especially in the digital teaching in our recent acquisition, and they are still in its first synergy generation. This cost is only beginning its optimization trajectory because Ubíqua, our hybrid teaching methodology, is still in its first cycle, and it will help us improve our performance so on. In this, our EBITDA sense, the adjusted one is 6% below the year.
This happened because of the improvement of our revenue, combined with a margin contraction that tends to be temporary. The net income was impacted because of the financial result, because of our indebtedness, because of the acquisitions we have just announced. Another factor that impacted income was the higher volume of granted discounts, that despite of our negotiation redirection, will reduce the known income in the future. We will offer discounts, especially in the beginning of the pandemic. On slide 15, we showed our results by segment. As Jânyo said, both digital teaching and our recent acquisition are having a very good performance this year. This is important in the superior and higher education. Now we expect to see hybrid teaching the next quarter, reducing the operational costs we had from the third quarter.
In slide 16, we presented the net profit excluding IFRS 16 effects, that we have an impact in this semester about BRL 14 million in our results. This is because of the accounting impact of the application in our lease contracts. On slide 17, we show our receiving accounts. As you can see, it is on an inflection point. It is a receivable longer cycle, but especially when we analyze the pro forma that we put on the graphics on the right side of the slide, including the revenue of the recent acquisition, considering the last 12 months to make the comparison more adequate. We see a good flow of payments of students that were funded by FIES before. The flow of payments of FIES is regular and less representative in our results.
We have a good coverage for [Non-English content], and we know that the level of provisioning has been higher and must have a better trajectory from 2022 on. On slide 18, we present our operational cash pre and post CapEx and illustrates my brief comment. We are having a good recovery of payment flow in the semesters. It's a trend we believe will get stronger from now on with the reduction of effects of the pandemic in our student base. On slide 19, we have our CapEx, where we do not have many news unless on the return of some tests, some activities. Our digital transformation plan and experience of the student is being dealt as debt because of their debt rate.
Our financial debt passed of a net cash of BRL 68 million to a net debt of BRL 305 million, one time our EBITDA adjusted in the 12 months. We had important investments for our future, including three medical schools. We clearly have a very comfortable financing position to consolidate acquiring FAEL in CDMV and other acquires that are in our pipeline. I will talk to Dr. Jânyo. He will have his final comments.
Thank you, Aguiar. Let's go to slide 22. Following with the presentation today. We're to talk about the ecosystem in our partners in acquisitions. We have here a number of courses and technical courses as a brand recognized in the education market. This strategy, we have to deepen our content and making a closer relationship with the students, bringing them to participate in more active ways in their curriculum. In this way, we want to combine acquisition and organic growth as a step to be a leader in our segment, to have a very broad portfolio. In this sense, we're investing in the experience of our students, which are going to develop better in this new technological environment. We're focused growing continuous education ecosystem close to the reality of the market, bring a different value, differentiated value for our students. Customizing the way we educate, the way we teach.
In an education that is different and more consistent, and deliver for the society. Thank you for being here. We are here to start the Q and A session.
Now we are going to start the Q and A session. Remember, to ask, you have to click on the Q and A button, write your name, to be on the line. Then you are going to be asked to turn on your mic to make your question. Let us start with the first question from Marcelo Santos, JPMorgan, in Portuguese. Please, Marcelo, turn on your microphone and make your question.
Good afternoon, everybody. I hope you guys are listening well. I have two questions. First, if you guys could tell a little bit more about the winter captation and how this is impacting in the hybrid teaching and digital. The way the environment of ticket, what you guys see in the online and digital.
Good afternoon, Marcelo. As we said before, we would like to say that student intake is doing better than what we thought in the presential education. It has been much better than we expected. We are expecting better results for the end of the year. Until end of September or October, we are going to have the end of our student intake. It has been much better than what we thought. Even with the vaccination, here in Pernambuco, we are having already people with 18 years old vaccinating. The protocols for on-campus education are not very clear, but we are looking positive way for what we have foresee. When we compare the second semester, the development we had there, this year have been much better. The vaccination is going to have a really good impact in the way we are going to continue doing business in education.
About the tickets, we have here the way we expected, not much different. The discount we were giving here, we are not giving as much as we did before, until the end of the student intake, I think it will be better.
Thank you, Jânyo.
The next question is from Victor Tomita. Victor, please open your microphone.
Thank you very much. Good afternoon, everybody. Two questions we have here. First, could you guys comment on how the on-campus and the hybrid system is going to work? How is this arriving between the students? How is the relationship between the hybrid system and the on-campus system? How do you guys see the growth of income and with the demand and tickets, how much you guys gain in the health courses and the general courses, and the way the intake and the tickets has impact on this system?
Good afternoon. I am going to answer this question about the captation and intake of students, and will connect with the second answer. There was a change in the behavior among the students and what they expect. We are doing some research in our units, what they expect and if they are going to come back. More than 50% of the students do not want to come back to the campus. So when we talk about the intake of students in this new system, that is the answer. To answer for the students that do not want to be on campus. The hybrid system is going to be the solution, because some classes he has to do on campus, but some classes he is going to be able to do on the digital environment.
So like that, we can implement for the students more than 40% of the possibility of the course happen on online education. The communication is going to be done in a hybrid way. We are going to step by step and do in parallel the system. About the second question, what we have to think here is that veterinary has a very high ticket among the course in education. So those courses, they give the perception and a very good income for the unit. We want to extend this network of hospitals. With this network of hospitals, we are going to have 20 courses credentialed.
These 20 veterinary hospitals, in three years, we are going to mature, and they are going to ripe. So we can have the best hospital in our perception. Interesting pricing ticket with a less evasion tax average of students here, is we are going to have on the extension courses and post-graduation courses. In high education, we have to remember, veterinary is one of the doors for that. There are different segments in health education where we can expand this idea of ecosystem in hybrid system, maximizing the use of assets and making a better use of those assets, and generating a better income and a differentiation of market where the units are and making a better reputation of our units where they are inserted. So our competitors don't have the same force.
Following to the next question, we are going to talk to Leandro Brazdos. Please, Leandro, open your mic and make your question.
Hello, everybody. I would like to ask a little bit about the costs in the last trimester . We see a pressure in the numbers as we thought in relation to last year and things going back to normal. My question would be, I would like to understand where we are on this process of normalization for the second semester and going to on-campus education. The way you guys see the costs on the second semester. I would like to know a little bit more about that.
Thank you, Leandro. Aguiar talking here. What we can say, looking about the costs, the recurring costs, let's separate in two different ways. We have to talk about the costs that we are going to have now with the economic return. So we have the effects here that happened in between the pandemic time. Those operational costs in the units went down. What is happening now in the costs environment is here two or three, we have to talk about marketing. When you talk about marketing, in this moment, we have to talk about in this process of implementing a bigger number of students income and more income of students to have a better revenue.
We have to know, because of the pandemic, the accounts received, we have here some students, they are working on paying their debts with us and go back, and we have seen a growth on these elements.
So captation in PDD is going to take a little bit longer. On this way, we have here the personal and services we deliver that we have to invest in the structure to work on these situations and the relations. We are going to talk about the relation digital and a better culture in the units and in the system. Going forward with the system, and we are going to have a better income and revenue. These costs, we are going to have a better understanding and better impact. In an environment where we have less interference on the macroeconomics because of the pandemic, we are going to have a better idea about that.
Thank you, Aguiar. Only to make it clearer. Talking about second semester, is this already on, or is this a gradual process?
João says it is a more gradual process, but the return we are having with the student intake process, the recovery, we understand we will have some dilution in these costs and expenditure. It will be more gradual. This dilution, we understand it will happen when the economy is back. Our expectation is that it happens in 2022.
Rodrigo says, maybe to help you understand. Second quarter of 2020 has expenditure and cost atypical without on-campus students. So with less revenue, we could have more results. Now it is something reversed going on. The student base is growing again. The acquisitions helped us grow in one side. Digital teaching helped us grow in the other side, and on-campus suffered only a bit. Now it is reversed.
On-campus will grow organically speaking from now on. It has already happened. It will have a ramp-up in the digital one, and medical schools are going on. So we need to dilute our cost structure. Now some items are back in this quarter. Which ones? Other expenditures because of some provisions we had in labor processes, civil processes. Marketing is a little bit higher because of digital ramp-up, but the revenue will dilute this. PDD is something that we are going to have back again. So we are calm regarding our results. We are very well aligned with the budget made. More interestingly, on-campus teaching is back, and the hybrid model is being well accepted by the market as well.
Leandro says, "Perfect, Rodrigo. Thank you so much."
Our next question, Mauricio Cepeda from Credit Suisse. Mauricio, please, you can ask your question.
Mauricio says, hi, everyone. Thank you so much in having my question. Let me have a step back about student intake, something more qualitative. What have you realized on this new intake on the third quarter? Which is the profile of this student? Are they coming from high school, or are they students that dropped in the past and are coming back? What is the profile of this student? This seasonal thing. I was talking to other people in the segment, in the industry. We had a problem of getting holdback. Did this happen? Was it a change in the curve? Or this year we are going to have a lower student intake regarding the first quarters, the first semester. I would like to understand the qualitative part in the student intake. Regarding the other courses, the veterinary course, thank you for the idea.
The society is turned to the animals. Would you do it in separate? How would you explore this market better with the veterinary hospitals? Thank you so much.
Jânyo said, thank you for the question. Regarding student intake, some things may be happening. This student intake moment was a bit lower compared with the other years, but 2020 was an atypical year. We had a reduction because it was isolation first moment. People didn't know what would happen, and they were delaying decision-making. This kept going on until the end of the year. The students is a little bit different to what happened to distance learning. They are older. Hybrid teaching has been recovering better than what we expected. One part of it is due to the decision-making process being delayed, and this doesn't justify this growth. The other one is that things will return to normality.
On-campus classes will return and the economy will go back to the track. This has been happening in a meaningful way. Intake student process is going back to the time previous to lockdown, to pandemics. It has a curve that is similar to the years before the pandemic.
Rodrigo s ays, according to the second question, DOK team, we have an executive that will be on a technical role in operating the veterinary hospitals. We would like to be on this business. The acquisition of CDMV/ DOK. It's a specific legal entity that is going to manage the clinics. Our DOK model will be expanded in the other 19 veterinary accreditations. I believe we are building an acquisition pipeline of other hospitals. Of course, if we have a good price level, a fair price level.
We believe on this, and it illustrates the ecosystem concept that puts together hybrid models and on-campus models. All the CDMV content is being digitalized, and it will be offered in every Ser Educacional channel, the other brands, the other courses. This is a project that works in this segment, and it can be transported to other ones as well.
Jânyo says, only complementing, these acquisitions have been recurrent. We will operate, especially in the edtechs, and now with veterinary medical school. The founders look at the inside of the business and help us scale this new model. In the specific case of CDMV/DOK, it's a win-win situation. They put together learning and training in the hospitals alongside with hospital operations, and also the pet shop part that follows it.
The specific focus and how nice this business is, they ended up training in the hospital with the practical classes in a differentiated way. We have a public profile that comes from graduation, and they end up offering professionalization courses that can be scaled and transferred for all our other units. As it happened to our veterinary hospital in Guarulhos, São Paulo. They end up transferring this for our undergraduate courses, a prestige that ends up being moved for the hospitals as well. Both end up winning. We increase the ticket numbers and the volume of students as well. This goes for our third digital channel. These ecosystems of continued education that offer as well these health area courses.
Mauricio says, it's crystal clear. Thank you so much for your answers.
Our next question is Vinicius Ribeiro from UBS. Vinicius, please, you can ask your question.
Vinicius says, "Good afternoon, everyone. I hope you are all well. There are two questions here. First, about M&A. After student intake process, we consider these M&A activities. Are we going to have a window to have consolidation moment as we had before?" Second question, about hybrid teaching, hybrid education. As 40% online learning and the downsides of operations, does it make sense to imagine a higher margin for hybrid education to convince the students to go to the hybrid teaching, it should be lower price.
Rodrigo says, regarding M&A. May, we used to say it is the bride's month, and the rest of the year, we have all the transactions in the market. The market is so warmed up, we do not have bride's month anymore.
Every month we have all kinds of transactions, and we have been focusing in the edtechs and in exits that can generate a networking effect. Combined to it, they can support building the ecosystem model we have been working on. Beduka, for example, they do not have an edtech, and we bought some medical schools and FAEL, which was the online learning that we have now. We still have been focusing M&A transactions on these streams. On the second semester is more dedicated to edtechs, more than on-campus transactions. Even medical school, we have a good volume of seats. We may have more seats added, but the main focus is the digital one. The other question was about hybrid education. How was hybrid implanted in Ser Educacional?
We have a new curriculum matrix, which is Ubíqua, and we could acquire flexibility in the academic model that we found the best one to offer to our students. Having said that, Ubíqua implementation happened in parts. The first part was in the first semester, and the second completely hybrid intake will be in the second semester. Thinking cost and expenditure, we will have a massive improvement of our teaching professional when we have Ubíqua penetrating on our student base. On another side, we have been adjusting since 2017, our real estate park. It hasn't been different now. The only difference is that from now on, we have a tendency of having less evolution of real estate. Now, we do not see the need to return a real estate, to drop a real estate.
Now we see a response on our overall student intake, with hybrid having better responses. Having more students, we do not need to drop having some real estates. Now, it's not very well-leveraged operation-wise, because we had a drop of on-campus students. We intend to have operational re-leverage, because great part of work was done.
Jânyo says regarding the expectation of students, as a Ubíqua pedagogical model, students end up accepting it, because there are some disciplines that end up being online. We mix on-campus classes and distance classes done remotely. This way, we can have great students from other states and other countries, because we have partnership with other schools in other countries. The students have some disciplines and subjects that are 100% online, having their content online.
They do not feel the difference of going 100% or 60% on campus to online. This mix, we have partnership with great companies as Google, for example, to have courses and some subjects to our students. These subjects are online, and the online classes are synchronous for all of them. It is a complete change, a complete shift to our pedagogical model that had been implemented before the pandemic, and has been growing a change of behavior of the students.
Perfect. Thank you so much for your answers.
Our next question comes from Lucca Marquezini from Itaú BBA. Lucca, please open your mic.
Good afternoon, everybody. Thank you for being here. I would like to ask, when would you like to know how the environment, and when you talk about this M&A specific field.
Edtech environment is very different for us. Historically, from our acquisitions have been presential acquisitions. Maybe some things on EAD, remote education. In this process, we are learning that Beduka will bring Beduka for our house, and we have new platforms when we adapted the way we look to this business, and the way they make commerce. With our team, we could adapt in a very fast way. We have a pipeline to edtechs. We have two groups. One is what we call the one that generate revenue. They have a focus in bringing revenue for us.
The other one, it is also a part from Beduka as well, that they had before. What we want to do is to better the attention we give to the student, the way you make the student feel. That is a different focus. The third focus we have here is the edtechs that can better our robotization, the service we deliver. We have three different aspects, but related to same business model. We have a big focus on this field, and our team is working very hard with entrepreneurs to understand the way we can get value from that. In the second semester, we are going to harvest some fruits from this field.
Thank you very much.
Our next question come from Christian Dutra. Please, Christian, can open your mic.
Hello, I hope you guys are hearing me. I would like to know a little bit about the discount policy and how this affects this head on the pandemic time now, if you guys have any gap to close, and what you guys want to keep working on this subject for the next years.
When we talk about price, I have to talk a little bit about our history. Higher education performs better when the economic situation is better, because we do not have much public education financing for higher education. Our economics are not performing well, and this has a very hard impact in higher education. This make bigger the demand for discounts. What we expect now for the economic growth is not looking well.
What we have to see and think about here is that we had a smaller volume of discounts, and we had to research and see the price per course, per unit to see how this unit and this course could be competitive in its field, in its region. We have to think about pricing in the environment it sits. From last year to this year, we had to think very much about some projects of law that want to have impact on the education, and we could fight that from last year. We have to see here in the way the courses are situated, and we have a big pressure on the price here because people want to study less, people have less money to study, and then I have to adapt our price to that. Where we are seeing now in the possibilities of growth now.
This, we can also think about a better pricing season for us. When a better stabilized economy, we can think about better prices, and then we believe soon we're going to have a better impact on the pricing.
Thank you very much.
Remembering, to make questions, you guys have to click on Q and A on the bottom right of your screen, put your name and wait in line. Our Q and A session is closed. We'd like to give now the floor for the company.
I would like to thank you everybody who was here on this conference, where we could talk about the results and that we can show our strategic change and what we have been implementing. What's this circle of life of the students when they decide to study with us, and then till when they turn change into a professional.
This system of education, and we have here in digital field. We are doing some acquisition that are going to have a big impact in what we are delivering. First, the students finish the middle school. They have to decide on what they're going to study and where to study, and if they can pay for it. In this new model we're building now, we help the student making these decisions. Since making what they're going to be, where they're going to study, which institution they're going to choose, what kind of courses, and remembering how much the student has to pay for the course. After the student does this course, they're going to look for job. This finish this circle about choosing the profession, having the training.
After the circle, they come back when they want to change the field or when they want to do some post-graduation. We are delivering this whole package for the students. We can bring technological product that make this continuous education system possible for the student to be training, to be a better professional. Delivering better service for the student, and that's going to happen on the next months and years. We finish here showing a little bit what is our new concept in this way of education and our harvesting and captation of students. We have here on this hybrid system, on campus and online. I would like to say thank you for our RI team. If you guys have any question, please contact us. Good afternoon. Thank you very much for being here with us.