Good evening, everyone. Thank you for waiting and welcome to Vitru's fourth quarter and full year 2022 earnings conference call. We advise you that the video conference is being recorded and it will be available in Vitru's investor relations website, where the complete material of our earnings call can be found. You can also download the presentation from the chat icon. During the company's presentation, all participants will have their microphones disabled. We will start the Q&A session, and at this point, you'll be able to use your microphone. To ask questions, click on the Q&A icon at the bottom of your screen to join the queue. If you prefer to write your questions, please follow the same steps, and you'll be joining the queue as well.
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Today, we have the presence of the company's executives, Pedro Graça, William Matos, Vitru's Co-CEOs, Carlos Freitas, Vitru's CFO and IRO, and Guilherme Franco, VP of Marketing. I will now give the floor to Carlos Freitas. Sir, you may begin.
Thank you, Pedro. Sorry, let's go again. Thank you, everybody, and good afternoon, everyone. Thanks for joining us here again. It's a pleasure to be here with you all for the release of our fourth quarter results of last year as well as the full year results. Here with me, I have Pedro Graça and William Matos, the co-CEOs of Vitru. Guilherme Franco, our VP of Marketing and Sales. Carolina Gonçalves, the head of IR, and Raquel Sasaki and Luis Felipe da Silva also from our IR department. A slide presentation will be part of today's webcast, which is available, as you know, in our IR website at investors.vitru.com.br.
I trust you all have in front of you this presentation, for those that are not following our webcast here live with Zoom. Before I begin, just as a quick reminder, safe harbor is in effect for this call. Now I invite you all to follow me here through this presentation in page four, which is here. Which brings the main highlights of the last month. The first one is the closing, as you remember, of the primary capital increase of around BRL 400 million, both from Crescera Capital, or mostly from Crescera Capital, but also the issuance of new common shares that we made pursuant to a rights offering that was executed throughout October and November of last year. With that, we reinforced our capital structure.
Second, the key highlight was the price adjustment in our business combination with UniCesumar, which resulted in a reduction in the price of around BRL 73 million. That was part of the share purchase agreement with UniCesumar. It was part of the deal that we would evaluate changes in the balance sheet of Cesumar between the reference balance sheet and the closing balance sheet, which was in May of last year. With that, we reduced the amount to be paid in around BRL 73 million.
The third key highlight is clearly the advancement of the integration plan between Vitru and Cesumar, which is being executed ahead, in fact, of schedule, with over-delivery of the promised synergies that we expected and that we guided the market when we released this information in May of last year. On the following page, we have the key highlights from a financial perspective. Both the organic numbers, I mean, without the consolidation of UniCesumar into Vitru, and also on a consolidated basis. I mean, with UniCesumar since the closing of the combination which as I said took place in May of last year. So roughly with seven months of UniCesumar in numbers.
Throughout this presentation, and as we did in the last quarter, we're going to provide information on organic basis and also on a fully consolidated basis to be as transparent and as clear as possible to you. Here the first key highlight was the 88% increase in net revenue in our core business, which is digital education undergraduate, between 2022 and 2021. While the overall consolidated net revenue increased around 109%. It is a huge increase, a huge jump in our net revenue in our core business, so more than doubling when taking into account the full package of consolidated numbers.
On our organic basis, we are showing an increase of around 29% in the case of Uniasselvi, digital education, undergrad business, and the 23% organic increases of Uniasselvi on a with the three business we have, including on-campus and graduate business. A clear advancement in our numbers here as expected with UniCesumar. When you see the adjusted cash flow from operations, we increased in 161% in 2022 with a improvement in cash conversion from operations from 83% more or less to 96% last year. It is a important pillar in our financing strategy. The fact that we do generate cash, we are a net positive cash flow provider and generator.
This was an important improvement, not only from organic perspective, but also, and most importantly, because of the strong cash flow position and cash flow strength of Cesumar. On the right-hand part of slide, we have the Adjusted EBITDA, which increased 145% last year, with the adjusted margin reaching 33.9% from 28.9%. A 5 points increase in margin last year. Organically, it was an increase of around 22%, with a 28.6% margin. It just confirms the resilience and the strength of UniCesumar is bringing to Vitru. Finally, on adjusted net income perspective, it increased 124% more or less, reaching a bit more than BRL 200 million.
Even with the debt financing that was raised for the business combination with Cesumar, we improved substantially our net income. Before we go deeper onto the financial numbers and performance of last year, just a quick reminder of a few slides. The first one, the one that I love the most here in the presentation, which is a follow-up of what we said that we were going to do and what we did. Basically, we said that we were going to grow in four growth avenues, the ramp up of current hubs, the openings of new hubs throughout the country, the increase in the course offering and inorganic growth through M&A. We basically ticked the box in these four growth avenues.
Now, as of end of last year, we had 91% of hubs still ramping up, with over 73% of all digital education students in those expansion hubs. The major hubs now represent around one-fourth only of the student base, and three-quarters are in those hubs are still maturing. This is by itself the most important driver of growth is the maturation of our acquisition hubs. We now have around 750,000 students. Organically within Uniasselvi, almost 400,000, coming from 287,000 a year in a half ago. When see the hubs, we went from 600 to more than 2,100 hubs now. More or less half with Cesumar and half with Uniasselvi throughout the country.
A strong growth in the southeast region, as I'm going to show later, in more details. Course offering as well. We are improving and increasing our portfolio of courses. This was, by the way, the most important driver for commercial synergies last year was in the course offering within Cesumar, taking profit off the products that we had already within Uniasselvi. Also vice versa, but mostly new, core courses within Cesumar.
Finally, inorganic growth with the M&A with Cesumar, which made Vitru not only the fastest-growing player in Brazil in higher education sector, but also the number one player in the digital education segment in Brazil, which is growing, which was growing and which is growing and that will keep growing given the still low penetration of higher education in the country. It will only be slowly but steadily improved and closed through digital education courses. On [audio distortion] items, now going into more details, each and every one of these pillars. The ramp up of current hubs is advancing as expected. You can see here the cohorts, the different cohorts of hubs, some in Uniasselvi and Cesumar.
They follow a very, I would say, predicted pattern. Now we have, as I said, around 200,000 students in major hubs out of 800, so 25% more or less. We have a maturation index of around 42%, meaning that all of these hubs, on average, they are with less than half of the full capacity of those hubs. As they mature, as they keep growing, we are going to increase the number of students with limited execution risk. The partner is there. The brand of Uniasselvi and/or Cesumar is there in the given city. It is a virtuous cycle that is operating. With that, we are going to keep growing throughout the country.
On page eight, you see the distribution of our student base in digital education undergraduate. An important jump throughout the five regions of Brazil, especially in the Southeast. This here is the contribution of Cesumar plus the organic growth of Uniasselvi. Both organically and inorganically, we are growing a lot in the Southeast, which was one key concern of the market when we started to grow faster in the Southeast, is our capacity to expand, to really expand throughout the four states of the Southeast. Now we are growing 340% there in the Southeast, but around 82% in the South, 101% in Northeast. We are now truly present throughout the country.
In the Southeast, not only with now with the second-largest student base, but also with the largest portfolio of hubs as well in the country. Today we have 730 hubs in the Southeast, more or less one-third of our hubs that we have in Brazil. On page nine, the other pillar, which is the expansion in portfolio of courses. We are now fully offering nursing courses in the two brands. It is important layer of growth. We are confident that one day in the future, we will have the capacity to offer law and psychology and other courses also through digital education courses. These are courses that are today the three most important ones in the on-campus segment.
The true market, the true market to be tapped, the true market to be accessed is not what we see here in the screen. Once we are able and allowed to offer digital education courses in law and psychology, the total addressable market will be larger than what we see here in the screen. Because of the pure characteristics of digital education, we can access more people throughout the country. On page 10, a quick reminder as well on our technology. Today, the most important way to communicate with students and for them to study is through the apps, by far. Everybody in Brazil has a cell phone. Not everybody has a computer.
Today we have more than 700,000 students active student in our apps. The whole course is provided through the app or through the computer. Our apps, in fact, are rated the number one and number two when you see the public rates either in App Store or Play Store. Finally, on slide 11, the distribution of hubs as of end of last year. As I said, a bit more than 2,100 hubs, more or less half in Cesumar, half with Uniasselvi, with a very complementary footprint, attracting different people, different publics, different audience. Today we have more than 740 cities in which we have only one of those two brands.
Here is an important driver for commercial synergies going forward, which is expansion, with the same partner that is there offering one of the two brands, now we will be able and is already offering a second brand. With that, we move to page 12 to go a bit deeper about the financials. As I said, digital education students are our true focus. Around 700,000 as of end of December of last year, with which together with the graduate digital students represent around 19% of our base. We are clearly the leader here in this business and the only player truly focused on digital education. And on the right, you see the evolution over time of our base.
On organic basis, we grew 90% within Uniasselvi between December of 2021 and 2022. With UniCesumar, the growth reached 129%. Now we have, as I said, almost 700,000 students as of December in undergraduate digital education courses. When we see intake and tickets here on the bottom part of the slide, we show intake and tickets on a semester basis, which brings a more accurate picture given the academic cycles that we have in the postgrad sector in Brazil. First about intake. This information is not new. This is what we disclosed already in November. Uniasselvi grew 23% in the second half of last year compared to the second half of 2021. While UniCesumar grew 51%.
This is important growth, in the combined intake of around 21%-31% of Cesumar and Uniasselvi is a proof of the competitive advantage of our models and the differentiated quality of our products. Let's go deeper about tickets. As we saw in the third quarter results, and now again, the average tickets of Uniasselvi has been growing year after year, while the average ticket of Cesumar has decreased this year. Why was that? In the case of Uniasselvi, this is mostly due to our pricing discipline, our market intelligence, and the tools and procedures that we have in place that we have been putting in place in the last years.
As you all know, that we've been showing since the IPO. This is part of our model, of our business proposition to have a sustained tickets over time. This approach is now being taken to UniCesumar. This is one of the best practice that we are exchanging between the two brands, that going forward, will have a positive impact on Cesumar. In the case of Cesumar, there were two main reasons for this decrease in tickets. The first one was the increase in the volume of new students. I mean, freshmen and freshwomen, as a percentage of total students. As you know, the average tickets of a new student is lower than the tickets of a senior one.
Second, also the decision taken in the past to be more aggressive in tickets, within UniCesumar, which was a decision taken before the closing of the business combination. I mean, the closing of the combination was in late May, when the first intake of 2022 was over, and the strategy for the second intake of 2022 was already being implemented. Now, we have been working as a sole company. What we are seeing so far until today is that the intake tickets of Cesumar is increasing by more than inflation. We are seeing a real increase in the intake tickets up to today, within UniCesumar. We are starting to see the effects of this new approach to pricing.
And regarding the intake overall, I mean as of Monday, as of March 13, the growth of intakes in the two brands combined was around 17.4% compared to the same period of last year. As I said, with health tickets. So, again, we are increasing a lot, even knowing that we had a very high comparable base of last year, because of the important growth that we had in both brands in the first half of last year. Even knowing that this is the first full year after the pandemic. So, we do believe that this year, the overall sector of digital education will grow slightly lower than what we saw last year, because it is the first March and the first February after the pandemic.
As you know, one year ago, we were still discussing about Omicron. Despite the current crisis, the high comparable basis, the first year as pandemic and the crisis, we are still delivering a 17% growth in intake with health tickets. This is just to show that we are a different company. We provide a different service to our clients. On page 13, the key financials here, net revenue, gross profit and Adjusted EBITDA. Again, 109% growth in net revenue. The gross profit was more or less growing the same level, 109%. The margin, gross margin was stable, more or less.
The reason for that is that despite the gain of scale, the gross profit of the Cesumar on-campus business is smaller than the digital location. On average, we are the same margin. The Adjusted EBITDA growing 5 points, as I said. The margin from 28.9 to 33.9, levered especially on G&A. I'm going to show this a bit later. First about net revenue on page 14. We had, as I said, a increase in 28% in the digital location undergraduate of Uniasselvi, a decrease of 20% in on-campus, and the continuing education business was more or less stable year after year.
On the right part of this chart, the contribution of UniCesumar, a very important contribution, including here BRL 130 million of the medical business in seven months. Now going, providing to you the breakdown about the two companies combined. More or less, we have about 75% of our net revenue in undergraduate digital education courses. More or less, around 5% in continuing education, which is basically digital as well. We have almost 80% of our revenues coming from the digital segment. On top of that, we have around 13% of our net revenue coming from a very resilient medical business. Going now deeper about this segment on page 15.
The net revenue, as I said, grew a lot, 88%, in the digital education undergraduate segment, both on organic and inorganic basis. This was not because of any measures in mix of products. When you see the numbers between 2022 and 2023. Sorry, 2021 and 2022, t he two brands were slowly but steadily improving in health, but not much. There is still a lot of space for UniCesumar to improve and to increase the percentage of health course as well. This is also going to be a important lever for tickets over time. Basically, we have a very well-distributed portfolio of courses, in the two brands. On page 17, our medical business, with the UniCesumar brand. Here, a number of highlights.
It is the fifth best private medical school in Brazil. Those who could attend our first Future Day there in Maringá that we held in January of this year could see that, could see the quality and the differentiated approach we have to this business. It is a different segment. It is the largest medical school in the south of Brazil, which brings scale there in Maringá with around almost 200 seats, with every ticket of more than BRL 10,000. This is a business that on an annualized basis, we have a net revenue of roughly BRL 220 million per year. Tickets are increasing above inflation, and the seats are still maturing.
We do expect promising results from our medical business this year. On page 18, on-campus and continuing education. First on-campus. On organic basis, I mean, Uniasselvi alone, there was a reduction in net revenue in the segments, mostly due to the shrinking base, which is aligned to our long-term view for the education sector in Brazil. However, there was an important contribution of UniCesumar to the consolidated numbers, given the resilience and the high quality of the health-related on-campus courses of Cesumar. By the way, these health courses in on-campus represent more than half of the on-campus revenues of Cesumar, excluding medicine. It is a very resilient business with high tickets.
On that front, I'd like to highlight that in the current intake cycle, I mean, up to today, we are seeing an increase in intake of slightly more than 20% in the UniCesumar on-campus business with rising tickets. So this is actually a nice complement to our digital education focus. Regarding continuous education, on the right part of slide. In the last quarters, we saw a continuous reduction in the average duration of the graduate courses. But this shift was basically over now. So we saw in the last two quarters an organic increase already in the continuing education net revenue of Uniasselvi. And now with Cesumar, we are growing around 30%. Now going to the [G&A]. Now jump to page 20. The Cost of Service and G&A.
Cost of Service, organic increase of 20%, so there was a clear gain of scale within Uniasselvi. The overall number, when you saw the percentage of net revenue was higher. Basically, as I said, because of the lower growth margin of the on-campus segment of UniCesumar. When you saw G&A on the right part of the slide, there was a decrease both on our organic and inorganic basis. Organically, we increased only by 7% within the Vitru x UniCesumar, confirming our lean structure and our lean approach to management. When you saw the overall consolidated number, there was a reduction from 8.1% to 5.9% only of net revenue, conforming the gains of scale and the synergies.
The key driver for synergies last year was in G&A, especially within UniCesumar, as I'm going to show a bit later. On page 21, selling expenses and PDA. Selling expenses. On organic basis, there was an increase of 24%, so slightly higher than the increase of net revenue as a whole, but at a lower CAC given the important intake that we had last year. The overall CAC of 2022 was 1.5% lower than what we had in 2021. Regarding UniCesumar, the hubs are more active than in the case of Uniasselvi in the overall sale process. That's why when you saw the overall picture, the overall number, there was a reduction from 17.7% to 16% of the overall net revenue in selling expenses.
The same happened in PDA. PDA, the overall PDA, meaning the provision for doubtful accounts, was down from 17.5% to 14.2% last year. There was an increase in the PDA of Uniasselvi. Organically, the most important reason was the deterioration in the macro and overall credit scenario in the fourth quarter of last year that we saw and that was clear for the whole economy. And we are not immune to that, which impacted more Uniasselvi, given that the students of Uniasselvi have a lower average income than the students of Unicesumar. We saw that deterioration in the fourth quarter of last year. Nevertheless, it was more than compensated by Unicesumar.
Going forward, when we look to 2023 as a whole, we expect the overall consolidated PDA level to remain more or less at this level of 14%. I mean, six months ago, if you asked me this question, I was expecting a lower PDA amount for 2023 and even for 2022. Now, seeing what we see today, we do expect that for 2023, we shall expect more or less the same level of PDA of around 14% of net revenue. On page 22, cash flow and net income. First, net income, an increase in margin from 14.5 to 15.6%, driven by the business combination. We have a... And...
Sorry, this here is a high, slightly higher margin. A slightly higher margin, given the even knowing that we have a higher leverage in this quarter. We raised funds for the combination with UniCesumar. Even with this debt level that we today have a net debt of aound BRL 2.4 billion, we managed to increase net income overall, seeing, and because of the numbers of UniCesumar.
About net debt, when we see the overall numbers that we have for last year, I mean, if we take the full year of Vitru x UniCesumar, plus if we take the normalized and annualized numbers of UniCesumar for a full year, our Adjusted EBITDA number for last year was more or less around BRL 600 million. We had net debt BRL 2.4 billion as of December divided by 600. We had a net debt over EBITDA of around 4x, which is lower than our covenants and going down.
We do expect that this ratio, for the end of this year, will probably reach around three because of the growth of the business as a whole and because, as I said before, we are a net positive cash generator. This cash generation here, seen on the right part of the slide, we increased the cash flow generation from operations in 162% between 2021 and 2022. The cash conversion from 83% to 96%. This is a very important pillar of financing strategy. We managed to raise debt and to have the acquisition of Cesumar because both companies together are important cash flow generator. By the way, it's important to highlight that these numbers are before CapEx.
Our CapEx for last year was only 7.4% of net revenue, down from 9.2% in 2021. Even with CapEx, we are generating cash on a net-net perspective. Finally, on page 23, the integration plan and synergies so far. The whole plan was designed before the closing of the business combination, and it was detailed and implemented after the combination, take into account several perspectives and with a lot of care and consideration for our people. The plan is being executed ahead of schedule. We have around today, around 100 products throughout the country running at full steam, each of them with an action plan, with an owner, with deliverables, with deadlines, with a timetable.
This is being implemented. This is the key priority of the company today. With that, we over-delivered in the synergies expected for this year. On the right part of the slide, we see in yellow the expected evolution of synergies that we communicated to the market in May 2022. As you will certainly remember, at that time, we mentioned that we expected an increase in the EBD margin of 6 points between 2021 and 2025. Now, the synergies that we delivered, I mean, the BRL 32 million, more or less in cost and expenses, represented an increase in our EBD margin of around 2.4 points. I mean, without the synergies, our margin would have been 31.5 instead of 33.9.
On top of that, we started to have synergies as well on commercial front, also over-delivering. Instead of 5.6, we delivered 10.7. The main levers from a commercial perspective, will be for this year, the better pricing at Cesumar, again, the new offerings, of course, and products, and the faster expansion of hubs throughout Brazil. Should we already announced to the market that we, this year we are going to open around 500 hubs, which is more than the rate that we used to open. On an OpEx perspective, the main levers, was and will be personal optimization. Now, with more importance in gains of scale in contracts and also better retention practice at Uniasselvi.
We already had a number of pilot products implemented and tested within Uniasselvi, using the intelligence and the procedures of UniCesumar for onboarding, for retention, for collection, which have shown already promising results, and that now we are starting to deploy this throughout Uniasselvi. We are very confident in our capacity to deliver the expected synergies and the gains in margins. With that, I finish this presentation, and I'd like to open for questions.
We will now begin the Q&A session. Remember that to ask questions, you must click on the Q&A icon at the bottom of the screen to join the queue. If you prefer to write your questions, please follow the same steps, and you'll be joining the queue as well. Upon being announced, a request to activate your microphone will appear on the screen, and then you must activate your microphone to ask questions. We kindly request that all questions be asked at once. Let's now move on to our first question. We have Luca Marchesini, sell-side analyst from Itaú BBA. Luca, we will open your audio so that you can ask your question. Please proceed.
Good evening, everyone, and thanks for taking our questions. We have two questions from our side. The first one would be regarding the integration plan and the initial synergies. The company has mentioned that it has executed the plan ahead of the schedule. Can you please provide some more detail on what has caused this overachievement? Secondly, what are the new expectations for synergies in 2023? That would be our first question. The second one would be regarding the average ticket. We saw an 8% increase in the average ticket of Uniasselvi, the digital business. Can you please provide some more detail on what has driven this increase. Besides the higher contribution of courses such as nursing, what was the company also able to readjust prices in other courses? Thanks.
Take a look for your questions. Regarding the integration, the I mean, the most important reason for this over-achievement was that we were able to integrate areas faster than what we thought. We had a plan per area, per sector, with different timetables. Tech sector that we were going to integrate last year. Sector that we were not going to integrate. We had an idea, a plan for this integration of areas. What we saw is that detailing the plan after May, we were able to accelerate this integration. Now we have already several areas of the company operating as one area. This was the key driver for the over-delivery of synergies.
So going forward, I mean, for 2023, what we expect, is what we have here on the screen. BRL 80 million in EBITDA impact coming from synergies. I mean, the 31 that we had delivered, plus 50, more or less. This is the guidance for synergies, that we expect a EBITDA impact coming from synergies of BRL 80 million, more or less, in 2023. Being the 30 that we had already, plus 50, more or less, for 2023. With that, we shall expect coming from synergies a continued improvement in margins, overall within Vitru. The second question about tickets of Uniasselvi. I'm going to go back there on page 12.
In fact, the ticket of Uniasselvi in the semester, in the second semester, grew 8.4%, which is above inflation. This was not really because of mix of nursing, because nursing started to be offered in August 2021. There was an increase in the tickets last year. I mean, when we showed the second half of 2021, we saw an increase compared to 2020 because of nursing. Not the case now. We are already offering nursing since August 2021. The reason for the increase here is basically twofold. The first one is that we were able to increase prices in the intake cycles because of the resilience of our model and the differentiated aspects of our products.
We were able, on average, to increase prices throughout the country. In some areas more, in some areas less, in some products more than in others. On average, we were able to increase intake tickets last year. The second reason also is that we generally, and we have been doing this for the last years, we also increased tickets for the seniors above inflation. We, for example, this year, just to give one real example. This year, in January of this year, we increased the seniors tickets in 8.8%, which is more than inflation. There's a third one as well, that throughout the course, we also increased the density of the course.
That's why when we saw a ticket of a senior in, for example, in the eighth semester, the ticket of those people is higher than a ticket of someone in the second semester, for example. Because of the higher density, we add more disciplines and more courses. With that, we charge a bit more. Those are the three, how to say, reasons. Being the first one, the most important one. The capacity to increase prices given our pricing discipline and the differentiated aspects of our products, is what has made us possible to increase prices above inflation at Uniasselvi.
This pricing, intelligence, this granularity that we have, this fast reaction to change in the market, that we have been implementing within Uniasselvi in the last four or five years, we are now also starting to implement within UniCesumar. That's why we are seeing already an increase in the intake tickets of Cesumar, this last two months.
That's very clear. Thank you, Carlos.
Thank you, Luca.
Thank you. The next question now comes from Lucas Nagano, analyst, sell side analyst from Morgan Stanley. We will open your audio, Lucas, so that you can ask your question. Please proceed.
Hey, good evening. Thanks for taking our questions. First question is regarding the intake cycle. You mentioned that your combined volume growth is 17%. We were wondering, if you could give a bit more color on the mix between both brands to get a sense on how the ticket repositioning, at UniCesumar is impacting the demand. The second question is, regarding the delay of the laws, distance learning law suspension. In our view, it doesn't seem to be a priority for MEC right now, but it could be an important catalyst for the sector. Could you give some, your comments and perspectives on the outcomes of this, working group?
Hi, Lucas. Perfect. The first one regarding intake. Today, I mean, as of March 13, I mean Monday, we have on average or the two brands combined, 17.4%, slightly more than that, within Uniasselvi and slightly less than that within Cesumar. More or less 14%, Cesumar, more or less 20%, a bit more, 21% Uniasselvi, more or less. This is, I mean, not only a impact of the, the tickets, but most importantly, the high comparable basis. I guess this is more important, in this case, when you see the two different brands.
You saw that there was a very important increase in intake at UniCesumar, not only the second half of last year, which is here on the screen, 51%, but also in the first semester. In the first semester, there was even higher increase in intake within Cesumar. While the number of Uniasselvi was more or less aligned to the more or less between 20%-30% growth that we have been showing in the last years. The comparable basis, the bar of UniCesumar is higher than the bar of Uniasselvi. That's why it is natural now that UniCesumar shall grow less than Cesumar in this current intake cycle. Sorry. The second question about law and psychology. You're fully right.
There was a committee created by the Ministry of Education in September of last year for six months, with the possibility to be renewed for more six months. Now what was done was that this term was extended to 270 days, so nine months, with the possibility to be extended again. I mean, we are expecting evolutions on this front. So far, nothing that we can comment here. We are, we are still positive about the intrinsic capacity of being able to offer law and psychology in digital education. There is no underlying reason for us or for the sector not to be allowed to offer law and psychology through a hybrid quality digital education solution. It is, it is something that will take some time.
I mean, with this committee, we do not expect this to be a possibility this year. That's clear for now. We are still optimistic that in the medium term, this will be a possibility.
Very clear. Thanks.
Thank you, Lucas.
Moving on. We're gonna go to the next question, from Fred Mendes, sell-side analyst from Bank of America. Fred, we're going to open your audio so that you can ask your question. Please proceed.
Hello. Good, good afternoon, night, everyone. I have two questions here as well. I mean, the first one, Carlos, if you can just comment a little bit more on the strategy about entering into the Southeast. How is that working out? Even with that, you're able to raise prices and decrease the CAC you were expecting since you were expanding to somehow, I wouldn't say a new region, but a region where market share is lower. There would probably be an impact in CAC. This is the first one. The second is more like a strategic question. When does your market share starts to become, I wouldn't say a concern, but something that you start to think, okay, maybe that is getting too much.
It's gonna be harder to grow from now on. Maybe I need to expand my addressable market. Maybe I need to come out with some English course. I don't know. At which level we think it would start to make sense to have, not only a strategy of gaining market share, but also maybe trying to expand this market through your platform. Thank you.
Thank you, Fred, for this very good questions. The first one about Southeast here on the screen on page eight. Not only within the Southeast, but throughout the country, in any new region or macro region that we enter, we have to start offering a slightly lower tickets. That's a price to be paid. That's natural. After more brand recognition locally, we start to normalize prices. That's what we have did in the past in other regions, that we did in the past in Minas Gerais. That's what we are starting to do now in some areas of Rio and São Paulo.
Clearly, when you see the Southeast, it is the last frontier, especially Rio and São Paulo, from the perspective of Uniasselvi. In the case of Unicesumar, there was already a important presence there. Overall, it is still the region in which we have the lower presence. For example, tickets that we offer in São Paulo and Rio, today, they are on average smaller than the ones that we offer in other regions, in other states. This is part of the overall commercial approach to enter a new region. In the first one to three semesters, we have to pay the price.
Then once we have more brand recognition locally, and we have word of mouth as well, working in our favor, once we have as well the partner going through a learning curve to operate and to sell locally with our support. Once we pay this initial, let's say, price, we start to normalize tickets. That's what we have been doing in the last years, and that is working already. For the Southeast, it is a region that we are growing a lot, that we are growing the most, in fact, throughout the country, both on organic and inorganic basis. And we are very confident that we are going to keep growing there.
For the overall market share to be a concern or not, we are still far from the level in which we'll be concerned with being too big. In the last census, we had around 23% of the market as of 2021. Probably now it's a bit higher than that, maybe 25%. We're still not in a position in which we don't have space to grow. There are several regions in which we're not present either with both brands or with one of two brands. As I said, they attract different people. The hybrid products of Uniasselvi attracts a different person than the model of Unicesumar. Our market is not the same.
We are present in some areas with only one brand, in some areas with no brands, so there's still a lot of space to be occupied. That's the issue. There's no a single answer to your question, but on average, we are not concerned for from a market share perspective. Anyway, the most important single driver for growth in student base is not going to be gaining market share. It's because of the overall market is going to keep growing. This is not a Rouba-Monte in Portuguese a gain. This is a sector that has been growing a lot, grew even faster during the pandemic.
This year, we do believe that we'll grow slightly lower than the, I'd say, normalized numbers because of the high comparable base of last year. For several years we'll keep growing because of the lower penetration of higher education in Brazil. When we see the overall post-grad sector in Brazil, I mean seven million people in the private sector in Brazil as of 2021, this is not the total addressable market that we can tap. The more we have hubs from Vitru or other players being open throughout the country, the bigger the market will be. The increase in supply drives demand. We're not concerned about being too big here and no. Anyway.
Which does not prevent us from exploring other avenues for growth. I mean, when we IPO the company, we said that we had a number of M&A possibilities. Most of them, by the way, were not in our core business. Most of them were not in undergrad business in digital education. We had discussions going on in other players that offer graduate courses, that offer technical courses, preparatory courses for the first jobs, and that we are now already offering. We already have these courses in our portfolio. When we see our continuing education segment, it is a bunch of things, mostly graduate courses, but not only.
We are looking for future growth, not now in the very short term, but more in the medium term, with other growth avenues apart from our core business of undergraduate business. We do believe that we have the two leading brands that on an organic basis, Uniasselvi and UniCesumar will keep growing and we will keep gaining market share. The key driver for growth, in our revenues, is the expansion of the market as a whole, not only gaining market share.
Perfect. makes a lot of sense, Carlos. Very clear. Thank you.
The next question now comes from Mauricio, sell-side analyst from Credit Suisse. Mauricio, we're going to open your audio so that you can ask your question. You may proceed.
Thank you. Thank you, Carlos. This is Cepeda, from Credit Suisse. Yduqs reported yesterday results. I think there are things that we asked then that we should ask you because... First of all, congratulations on the results and the clarity of the presentation. One of the things that was discussed with them, and I think it's a fair point to ask you as well, is about all these commercial dynamics to attract first-year students, all the commercial dynamics to have more intakes. I'll ask you a little bit about the necessity to, in a certain way, subsidize these first-year students so that you can have intake. Then, let's say, try to retain them even without the subsidies throughout time.
You mentioned that UniCesumar had a period where the tickets were a little bit lower, and now there has been a recovery of tickets in UniCesumar. My question would be, okay, if you keep this kind of policy, which kind of policy, how aggressive is the market in terms of prices, so that you can obtain more or less growth in this first year? The second question would be about FIES. I know it's kind of a tricky discussion because there is nothing concrete about that. What is the sector discussing with the working group there about the inclusion of distance learning in a future program design? Thank you.
Thank you, Cepeda. Regarding the market, and prices and intake, et cetera. I mean, what we are seeing in this current intake cycle, which was already saw, also to a certain extent last year, was a more, is and was a more rational market. I mean, competition is here, is fierce, as it has always been. We are operating in a competitive environment. It is as tough this year as it was last year, as it was in 2021. It is a tough market in which you have to have differentiation. We have to have high quality. You must have delivery. So...
What we are seeing the last this intake in the last year, I mean, the last 12 months more or less, is a more rational environment. I mean, rationally is a strange word. Okay. Less players with more with too aggressive strategies. So in the end, a sector that is, let's say, operating in a very competitive environment, but in a more, say, disciplined approach, with some differences for region, for products. It is, in some cases, with some changes over time, with some players start to be less aggressive and then more aggressive at the end. It changed from player to player, from region to region.
Overall, it is a competitive environment in which we keep gaining market share with a disciplined tickets. We don't want to grow for the sake of growing. We are growing, operating in a market that is growing, and we are delivering what we believe to be a high quality product, and we keep gaining market share. We don't see today a more competitive market than what we saw in 2022 or 2021 or 2020. For FIES, I mean, that's the million-dollar question or billion-dollar question. Our opinion is the following: When FIES was created, distant learning or digital location was the exception. Now it is the norm.
Now when we see that more than 2/3 of the new students are deciding to enroll in digital location courses instead of on campus. 1/3 of the newcomers, you know, is going to on campus, two-thirds to digital. The norm is, I mean, the standard decision, the base case decision now is to go to digital location. In our opinion, a potential new version of FIES or any other name, will include distant learning for sure. We do not believe in a possibility only for on campus. It is not impossible. We do believe it is unlikely. And also from a purely economic perspective, when we see the...
I'd say the efficiency of capital allocation, it is more efficient also to allocate capital, to impact more people, especially people that need education and that also are part of the overall base of the current administration. We do believe that in case there is new fees, it will include on-campus and digital education. Also because today there's more gray areas than the past. It is today, education is becoming more and more hybrid than what we saw 10 years ago. The short answer is that we don't know. We do believe that if there is something, it will be for the overall sector.
Very clear. Thank you, Carlos.
Thanks, Cepeda.
The Q&A session is closed. Now we would like to turn the floor over to the company's closing remark. Mr. Carlos Freitas, please make your final remarks and close the call.
Thank you all. Thanks for following Vitru's. Thanks for your trust. We keep open for any final question that you may have. Thank you. Good night.
The visual conference of results for Vitru's fourth quarter and for year 2022 is closed. The Investor Relations department is available to answer other questions and concerns. Thanks so much to the participants and have a good evening.