Good morning, ladies and gentlemen. Welcome to Yduqs' video conference to discuss the results for the fourth quarter of 2023. This video conference is being recorded and the replay will be available at the company's website at www.yduqs.com.br. The presentation will also be available for download. We would like to inform that all attendees will only be watching the video conference during the presentation, and then we will start the question and answer section when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Yduqs' executive board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events, and therefore depend on circumstances that may or may not occur.
Investors, analysts, and journalists should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. It's important to note that for better viewing of the presentation, it's recommended to enable full screen mode. Present at this conference, we have Mr. Eduardo Parente, CEO of Yduqs, and Mr. Rossano Marques Leandro, CFO and Investor Relations Officer. I would like to hand the floor over to Mr. Eduardo Parente, who will begin the presentation. Please, Mr. Eduardo, you may proceed.
Welcome, everyone. Welcome to our 2023 presentation. I hope everyone is well. What you're going to see here with us today is an excellent year. Results of what we've been talking to you about, solid operational leverage with a lot of discipline on cost that resulted in a very good year with margins increasing, and a substantial increase in all the business that we carry. Starting with our highlights of the year, a year with a strong cash generation, an important increase in net income, and EBITDA margin expansion. On the left-hand side of the margin, what you see here, is net revenue increasing 13%, adjusted EBITDA increasing 18%, and adjusted EBITDA margin increasing one percentage point, which is very relevant because the businesses that have higher margins outgrow the business with lower margins in our portfolio.
This is the trend that has been happening and will happen also in the future. Adjusted net income, and we're going to be talking a lot about adjusted net income, not only today, but in all our upcoming presentations. This is a key topic for us, increasing to BRL 103 million on this year. Cash flow generation, more than BRL 1 billion on the year. Again, Rossano will be talking to you in a little while about the renegotiation of our debt, which reduced our average debt cost and also extended the duration of our debt, which happened after we closed the year. Moving to the right-hand side of this page, I think that together with the important evolution in cash flows and net income is a message that we increase EBITDA in our three business units. Okay.
We had an overall increase of 18%, but premium grew at 10%, digital growing 28%, and on-campus, a result of many efforts that I will talk in a little while, an important increase of 13% on the year. Guidances, we get a lot of feedback, especially from foreign investors. That is a practice that we have been doing well. Once again, in the fourth quarter, we achieved all the guidance that we mentioned, both on intake, which grew 29% in the fourth quarter, but also in adjusted EBITDA that we got in the middle of the range of 5%-15% that we had announced. Very important also, average ticket growing in all business units again. Moving on to premium. What we have here, chart full of good messages as always. We have an increase of 17% in the overall business, both in IDOMED and in Ibmec.
If we look to the right-hand side of the page, we had two important effects on the EBITDA of this unit. One of them was the increasing retention of FIES by the government. The other one is the difference in 2022 - 2023 in executive bonus paid for company executives. It was very close to zero in 2022, and it was a good number in 2023. The second effect, of course, affect all business units. But the effect that you see here is this reduction of margin from 47% - 44%, which the way we see the future, we see a number stable somewhere in between, probably closer to 44%. But the 10% increase is something that was unnatural.
What you see in the future when you do not have these gaps will likely be number closest to this number, close to X effects of 19% and 23% that we see on top. Student base, important growth both in medicine and for Ibmec. And once again, tickets evolving in a positive way, as it had been in the past few years. Renewal rate is again stable at this number. It varies ±1 or so. Not relevant for the business year. All in all, very good news. Moving on to distance learning, we have yet another page here full of good news, an important increase in revenues. We see that for the first time we have a student base both in distance learning and in lifelong learning, beyond 500,000 students.
When you see the right-hand side of the page, an important evolution in the total number of EBITDA. We are very positive about this increase of margins from 39% - 40%. This is the result of the operational leverage that we have been talking so much about. We are optimistic about maintaining a higher level towards the future. On the right-hand side, there is a reduction of EBITDA on the fourth quarter from 37% - 32%, which does not concern us. When we see, there are three reasons for this, one of them being bad debt as a result of a fantastic intake of the first semester. People who follow us understand that freshmen drop out much more than non-freshmen. The impact of the fantastic intake, it is happening now.
The second effect also on bad debt is the increase in provisioning that we did for FIES that started in the second quarter this year. When you see fourth quarter to fourth quarter, there is an increase in provisioning happening here. The third effect is an effect on the commissions or revenue share of the outsource distance learning centers. They vary with intakes. Fantastic intakes will bring this number up. Of course, we calibrate this, and we look towards the future, this number coming back to the mean. Also, of course, on overall, like I mentioned on premium, there is the effect also of the bonus that happened one year and it is not happening on the second year.
Another piece of good news on this chart is the evolution of the average ticket that we talked a lot about this in 2022 when we looked to no elasticity in the market. The best lifetime value solution was price increases and a lower intake. As a result, we are capturing this space, paying higher tickets than normal. We do not see this number moving forward as sustainable. We have, when we saw after the elections, the elasticity coming back, we were way more aggressive in prices, both in 2023 and now in 2024. This is good news for 2023. When we are going to look in 2024, we are going to see a different level here. Far right-hand side, renewals. This is also not a concern. Even quarters that have lower renewals than odd quarters, these even intakes are something fairly new to us. These numbers are increasing.
But of course, when you have the substantially higher intake that we had in the second quarter than we had the second quarter the previous year, it increases a lot the number of freshmen in the mix, and that tends to bring this number down. Not a concern. The last box there is just, like I said before, we are exceeding the targets of intake once again. Moving forward to onsite. What we see here is also a chart full of good news. Of course, the magnitude is different than the previous two charts. But we see this onsite resuming growth, both in terms of net revenue and in EBITDA. This now 2022 in adjusted margin. An important evolution as well that we are looking for. The impact of this is very big, and we are looking forward to sustaining this.
Total base, you were used to seeing double digits decrease. We went into the single digits earlier this year, and we are very optimistic about coming back here in one or two quarters and showing these numbers as a positive number. Unlike distance learning, we see the price evolution here as something that we see as sustainable. We are working with much higher prices, so the effect here is the people graduating with a lower price than the people coming in, and this has a positive effect on mix. Renewal here, like I said on premium before, it is a stable number. This number varies one, two percentage points either way, depending on the mix that we have on the base. Nothing to be concerned here. Again, we see as a very positive news for the business, this resuming of the health on the on-campus.
That can be also positively affected by other effects, such as the resuming of the government of FIES in different terms. I will hand over to Rossano now, who will be consolidating all these operational numbers into our financial numbers for the year.
Good morning, everyone. Talking about our net revenue. First of all, I would like to highlight the growth that we had over the years. From 2018- 2023. Going back there, we had almost 70% of our revenues coming from the onsite business, and now we already have almost 60% of the revenues coming from both the premium and digital business. It is a huge transformation of our business along the last five years. Going on. Okay, on the next slide, I would like to highlight the stabilization. If you look into every expense category, we have basically whether reduced or maintained the percentage of revenue of every single line. The only one that is increasing is G&A and others affected by the bonus, the variable income that we had this year that is much higher than we had in 2022.
Another important highlight is the stabilization of bad debt. Even with the very high intake that we had in 2023, and that causes an increase of the percentage of students that are freshmen, and we know that the dropout rate of the freshmen is higher than the other students, that would naturally lead to a higher bad debt provision. But even with that impact, we had a similar bad debt provision compared to last year, which is a very positive sign. Moving on to the next slide. We are going to discuss the EBITDA growth. The EBITDA is growing 18% over last year. I would like to highlight the expansion margins, mainly of the on-campus business. We have been discussing the operational leverage that this business has.
As the student base is starting to stabilize and the revenue is already increasing supported by the higher ticket, the operational leverage is showing up very strongly on this business, so expanding 2 percentage points in margin from one year to the other. And if you look into the EBITDA margin ex IFRS, we are also increasing it with 2 percentage points over last year, achieving 26%, showing the results that we have not only to the EBITDA, but also on the rent cost that is also being managed very closely by our business. Moving on to the next slide. Now discussing the non-recurring effects of this quarter. First of all, I would like to highlight that we have sustained what we have been talking along the last few quarters, an important reduction in the regular non-recurring effects, basically related to the restructuring costs from our business.
As we all know, mainly the on-site business has shrunk over the years, and we have had expenses to reduce those footprints. Not only the rental cost, the real estate cost, but also the personal cost related to it. That caused an increase over the years of the non-recurring costs related to this restructuring. As we have been saying, as we are reaching the stabilization of our student base, those costs are going down. They have reduced basically 67% from one year to the other. But on this specific quarter, we have had two non-recurring effects I would like to highlight to you. First of all is the write-off of properties that we have sold along the quarter. Following the reduction of our footprint, we are getting out of specific sites. Some of them were owned by Yduqs.
When we sold those sites, we had a non-recurring effect, which is basically a write-off on the books. There is absolutely no cash effect on this movement. The second effect is the revision of our labor contingencies that we have made in this quarter on a more conservative approach that we have taken to all the management of the labor contingencies we have. As a result, also of the restructuring costs from the previous years, we have had pressures on the labor cost contingencies along the last few years. In 2023, a big effort from the organization to better management those costs. One of the effects was the change in the approach of the classification of the risks of those contingencies. This is basically an anticipation of expenses that would occur in the future.
It has no effect of the expenses that we had both in 2023 as in the past, but this is an anticipation of expenses that would occur in the future years. The impact in this quarter is BRL 45 million. Once again, anticipating a more conservative approach on those lines. Moving on to the next slide. Now discussing net income, a very important line for us. The operational leverage of the company shows up stronger on net income than it shows on EBITDA. We come to 146% increase in net income, reaching BRL 342 million on the year. Very important evolution of this business. We are going to talk more and more on net income along the next few quarters. Moving on to the next slide. Another very important indicator of our business, the capacity to generate cash.
We have reached a very important milestone for us this year, generating BRL 1 billion in operating cash flow. We are also generating positive free cash flow to the firm, basically BRL 67 million in the year, and the curve is very positive along the next few years. We are generating cash because we are operating the cash, the operating cash generation, also working a lot on working capital and also on our debt cost, which is reducing rapidly. Moving down to the left bottom side of the slide, talking about average term of receivables, another very important message to keep this number stable. As we have been saying, the income related to the intake has increased a lot in 2023. That increases the participation of FIES on our revenue.
Even though, even with this movement, we are still maintaining the average term of receivables very stable along the last few quarters, which is also very positive news. Another aspect of the cash generation, we are reducing the CapEx as a percentage of the revenue. We have reached our guidance in 2023 with BRL 470 million in the year, a decrease in absolute terms versus last year and a very important decrease as a percentage of revenue in 2 percentage points. This movement is still showing up in the next few years. We are going to reach our medium-term guidance of 7%-8% of revenues along the next few years. Another important aspect here is the concentration in the digital transformation and IT. Almost 52% of our CapEx directed to IT, as is the case in the previous quarters, as was the case.
On the next slide, talking about the management of our debt. We have decreased our leverage ratio along the last few quarters. The fourth quarter is not a good quarter for cash generation and leverage reduction. But if you compare it to 2022, a very important reduction in leverage, and this is going to maintain along the next few years, both with EBITDA expansion and also reduction in our overall debt. The average cost of debt has also decreased. We have launched a venture after the closing of 2023. That has reduced our total cost of debt to CDI + 1.35, which is a very good milestone for us. It also has increased the average duration of our debt to three point four years. On the debt amortization schedule, an important highlight is the reduction in the maturity of the debt for 2024 and 2025.
That has left us in a very comfortable position along the next few years and a very controlled debt amortization schedule. Moving on to the next slide. Very quickly on this one is a slide that we have repeated along the next few quarters. Important messages here is how stable it is, the portfolio of our company, how strong it is, and all the business, as Eduardo has mentioned previously, all the business is growing over the fourth quarter of 2023. Moving on to the next slide. Very important message here is the stabilization of our margins in a very high level. Even increasing from 2021 - 2023, showing the force of our portfolio. Also, an important message here, once again, we discuss about dividends. One more year since our IPO, every year we have paid dividends, and 2023 has been no different.
On the next slide, this is a slide we are showing up for the first time because we believe this is a very good moment to discuss the highlights of our digital and overall technology transformation. We are going to have an Yduqs Day in May, which we invite everybody to participate, and we are going to discuss this deeply. Just the highlights here. We have implemented the Salesforce in 2023, and the results are showing up very strongly here, mainly in our first quarter intake. Highlights from this technology advancement. One important fact, we have reduced the timing that we have to launch every new campaign from seven days to two hours. That gives us a huge agility that allows us to have different tools to use on our market campaigns. As a consequence of that, the intake has improved a lot.
The conversion of enrollments has improved 30%, and the timing for that has reduced 63%. Another tool of the Salesforce deployment is the Marketing Cloud. That improves a lot the ways we have to communicate with the students, increasing 17 percentage points in productivity and also reduce cost in 29%. The relationship tools have allowed us to use AI that we are going to discuss in more depth in our Yduqs Day in May. Moving on to the right-hand side of the slide. We have increased the capability not only through Salesforce. We have taken care of the whole journey of the students from the intake through the all lifelong learning for the student. Those movements have improved a lot our numbers. One highlight is the increase in NPS in 20 percentage points, both for on-site and also digital students.
Another important indicator is the increase in student engagement, that it has increased 63% year-over-year in our app. The app is the main tool we have to engage our students. Most of them use their cell phone more than they use a computer. We have worked a lot improving our app, the overall experience of the app, and that is also benefiting the increase in NPS for our students. Once again, in our Yduqs Day in May, we are going to discuss a lot the technology advancements we have made in the corporation. Having said that, I hand back to Eduardo, who is going to discuss our ESG features.
Thank you, Rossano. It is no news to you that we give a lot of importance to ESG. It is very much related to what we do on a daily basis. We are getting a whole bunch of recognitions and prizes and certificates. I think that the highlight of this is us becoming A A on the MSCI ratings. One of the few education companies globally that are recognized as leaders in ESG. I think above everything, we take a lot of pride also in the caliber of the Brazilian companies that are seeking us for help, or seeking us for guidance, or seeking us for benchmarks, or asking to partner us with certain initiatives. These are things that happen on a weekly basis here. We just brought a few examples here. One of them is our targets.
All executives in the company have targets, and we filled the targets for last year, demanding and aggressive targets. A couple of examples here, the evolution on job opportunities for our students, the evolution in us making a more inclusive work environment by people feeling less bothered or uncomfortable with behaviors in the market in our company. The third one is us evolving on the number of multiracial professors. We are by far a reference in the country, but we want to do more than that. Another recognition that we had, United Nations Global Compact in Brazil, the Agenda for Education, invited us to be ambassadors of the movement in Brazil. We became a carbon neutral company, and we are figuring in the second consecutive year in ICO2 for Bovespa.
And one very special thing happened to us this year is these two European financial institutions, they donated money for our institute. Just imagine what kind of scrutiny we've been going through, to have these people joining us in our institute, helping students that are here with us today. This is, again, from a very solid base, then great evolution that we take a lot of pride happened in ESG year in Yduqs. Moving on to our final remarks here. The green on the top is something that we are quarter after quarter repeating to you here. Again, the strength of our pricing discipline, the strong operational leverage that we have, leveraged by a great portfolio.
A portfolio that demonstrated a lot of strength during the major crisis that we lived through, and now demonstrate a lot of strength in the operational leverage, in the growth that we're seeing for the future. The consequence of that is two things that we will be talking way more about every time that we meet here. It's about cash flow generations and about net income. As Rossano was mentioning before, there's a very strong impact on net income, on every evolution that we have in terms of revenues and of margins. Yeah. All in all, numbers here on the left-hand side of the page, when we look into fourth quarter 2023, important evolution in our businesses for tickets. Again, intake of digital in the fourth quarter was very impressive with numbers yet once again.
As I mentioned, elasticity coming back and us being very digital, precise, and technological, understanding what to do, which prices, and when, understanding what's the lifetime value of the student here. Net revenue is also increasing, 12% increase in all the businesses, and we're achieving the guidance that we gave you. Once again, between 5% and 15%, within our guidance given. Right-hand side of the page, full year, EBITDA growing 20% versus last year. A great increase in net income of BRL 203 million versus the previous year as well. Cash flow generation above BRL 1.1 billion, and an important reduction in the cost of debt. We prepared a page here, which is the summary of the guidances that we've given you. Again, very positive feedback on the practice that we've been involving on. Very strong delivery on practically all items.
Adjusted EBITDA, again, a sequence of important growth in the quarters. Intakes on digital, impressive numbers versus the previous years. On-campus intake, important results that we had within the guidance that we've given you. On medical students, we exceeded the guidance given, finalizing the year with 8,400 students. We did not achieve the guidance that we gave on number of additional seats, kind of a slow start on the ministry with the new administration. We do expect in the upcoming months to have those seats with us. On CapEx, a very important number. We've reached BRL 470 million in guidance that we've given, reaching 9% of revenues in 2023, coming from 12% two years before and 11% the previous year. In the direction of reaching 7%-8% long-term CapEx that we foresee. This is an important number showing the positive we give to capital allocation.
It was important to increase a lot of technology in our businesses, and we see this as a result now, like Rossano showed on NPS and other numbers that are impressive for the process that we have. But we see also on us showing that we have above 70% of our EBITDA coming from businesses that were flat five or six years ago. Important movement and also showing the discipline that we have, going back to the number that we see, for the future. Talking about the future, we are way advanced in the intake process for first quarter 2024. We are very excited to see similar numbers in the digital like it was last year, between 180,000 - 190,000 students. For the on-campus intake, we are seeing a substantial growth versus last year, somewhere between 15% and 25% versus last year.
CapEx, we are projecting a number in 2024, exactly the same as it was in last year. Bearing in mind that we naturally expect some revenue growth, so it is another step towards the direction of us reaching our guidance of 7%-8%. Regarding dividends, we had a board meeting, and the board is very confident with the amount of cash that we are generating. So they are proposing to the assembly a declaration of dividends of BRL 160 million, a payout above 100%, which 80% of those have been paid last year in advance. You saw throughout this presentation how excited we are and proud of the results that we had, the evolution that we had for revenues and EBITDA. We think it is time now for us to talk way more about net income and cash flows to shareholders. So we are exchanging guidances about EBITDA to guidance on net income.
We are comfortable to share with you that we will have a double-digit growth in our EBITDA on first quarter 2024 versus first quarter 2023. Bearing in mind that first quarter 2023 was the highest net income that we had throughout the whole year last year. All in all, I would like to thank you very much for your trust, for your support in the tough years that are by, for the feedback that we have got from you. I hope that some of you find yourselves in the way we present numbers and some action that we have taken, this is very important for us. We have been through a few years that we have been talking a lot about distance learning, medicine, M&A, and technology. Of course, we are still very much focused on these growth levers.
From now on, we are going to be talking way more to you about net income and cash flow generation. I think that when we talk to people are still at the EBITDA level or discussing margins and so forth, and that they are overseeing us coming back into a very solid cash flow generation business, a very solid net income generation business. So thank you very much. I hope you are as happy as we are with 2023, and excited as we are with the years to come.
Yduqs video conference is now closed. We thank you for your participation and wish you a very good day.