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Good morning, ladies and gentlemen. Welcome to Yduqs video conference to discuss the results for the third 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 you that all attendees. We should stress that at 11:00 A.M. Brazilian time, we will have the presentation in English. We would like to inform that all attendees will be watching the video conference during the presentation, and then we will start the question and answer session 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 to results to differ materially from those expressed in the respective forward-looking statements. Present at this video 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. Parente, you may proceed.
Thank you very much. Good morning, everyone. Welcome to the presentation of Yduqs third quarter presentation. I think you will see a lot of consistency here. Consistency not only in the evolution of our results, EBITDA here for the fourth consecutive quarter growing by two digits, but also in what we've been telling you that would happen. There's an important evolution in cash generation and net profit, in evolution of deleveraging and also in funding because of the portfolio that we have, which is no news to anyone, which has helped us to maintain our growth trajectory during the pandemic. Now when the economic recovery is just starting of classes C and D, you can see how much operating leverage we can bring to our business. Let's move on to the highlights page. I'm now on page three.
The headline here is the consistency with a new level of EBITDA margin and cash generation. On the left, we have figures for the first nine months of the year. Net profit that has already exceeded BRL 330 million. Big increase on the same period last year. Net operating cash flow practically reaching BRL 1 billion here. It is very important that the EBITDA ex-IFRS growing by 35% compared to the same period last year to BRL 1.1 billion in the first nine months of the year. This leads to a reduction in leverage, which happens on both sides, with cash generation contributing to our debt reduction and EBITDA growing significantly compared to the same period last year.
We went from 196 at the end of last year to 152 at the end of this quarter, which is still not where we want to be, but leaves us in a much more comfortable position, especially at this time when we see a very positive development in the reduction of interest rates. To the right of the chart, we have very important growth in EBITDA in the third quarter. Last year, the third quarter had already been a very important number. Within the guidance we had given, we talked about 10%- 20%. We did 14% in a year with EBITDA growing in all business units, which is another important thing. It shows the on-campus balance that we have, and we are going to talk about that soon.
A clear moment of recovery here in the middle that we see good intake both on campus exceeding the bound of the guidance at 26% vis-à-vis previous year. On campus, 32% growth of the previous year. On the right, we have significant advances in our average ticket, both in medicine with 10%, digital with 8%, and on campus with 6%. I will talk about each of these figures in detail on the next few pages. Let us move to page four, looking at premium here. This chart kind of repeats itself. There are variations of two double-digit growth here in revenue, double-digit growth in EBITDA. I will comment a bit on that. What do we see here? Revenue growing almost 20% in the nine months of the year within the quarter, EBITDA evolving 8% with two important effects.
We had talked a lot abo ut it previous quarter on the effect of greater retention that we had by the government. Yes, this had important impact on medicine. This continues to happen this quarter. On the other hand, we have the effect of bonus.
Well, we had no bonus last year, and we have bonus above target, very much in line with the results you see here, and the whole growth would be about 20 so much in the quarter and the first nine months if these two effects were deducted. The business continues as usual, and we have the effect where we have a prospect of recovery of transfers, not perhaps the level we had before, but lower. President Lula has enacted an act on the Censo. We have a positive evolution and recovery of growth that follows what we had previously. Bottom left, we continue growing the total student base as we've done every quarter, almost getting to 16,000 students undergrad and grad. So medical students, we have 8,400 students at IDOMED with great evolution in Brazil with a new campus at Faria Lima really booming.
On the right bottom side, we have undergraduate average ticket renewal, 96% renewal, 95%-96%, that's what we have been delivering. Premium is this. I think it is a growth that is constant, and I believe you've seen this in the pandemic, the proof of crisis. It was very important to us at the time of crisis, keeping our portfolio as a whole and ensuring that we would continue to grow with margins above 30%. This is a segment that grows more than our average with a margin higher than our average. It is almost an insurance for hardship moments and good for moments that we're going through now. Moving into digital learning, the great joy of the year. Again, we talked a lot to you about this last year. A strong growth with margin expansion, both at the same time.
Last year, we said it's not a year in which we see great price elasticity. We are focusing on the lifetime value, LTV of students. Last year was a combination of higher prices with intake that was not so strong. This year, things have invested some light discounts we see with intake much stronger than last year. This combination, we generate higher LTV. We have a powerful combination. At the top, you see growing revenue, growing margin, and below you see the effect of last year's strategy, where we have a price level higher than we had, higher than inflation, which is not the tradition within distance learning. You're looking at the top revenue growing 25%, very much driven by undergrad and digital learning. A bit of, well, the increase from 39- 42 in the year. We've been telling you this, the different level.
We understand that this is something that is here to stay. We talked a lot about the 39 last year and this operating leverage allowing us to work with higher numbers. Looking ahead, we have an expectation of a contribution to the portfolio as a whole that will be significant. Student base growing 15% compared to last year, where we exceeded 1 million students in this business unit with a ticket that's important here, then I tell you the ticket, the natural is to grow along with inflation. Approximately a bit more or less than the average ticket for over a year. When people have been with us for over a year, they've gone through all the period of offers, 399, Gs, et cetera. That leads to a lot of confusion when we set the price.
When we look for less than a year, you have a greater notion of trend, so over a year. This number is important to us. It's not likely that this number is repeated next year because of the strategy we've had now, but it's bringing very important results to us. Renewal, again, stable, 73% varies, 72%, 74%, depending on the quarter. I think we see what is very important here is the even number intakes, that they were smaller than odd number quarters, so they are converging. It tends to be for the next quarters to be good news, and the chart on the bottom perhaps is the most important point. We had great intake with 110,000 students, so growth of 26% compared to third quarter last year, and the first, second quarters have been very good.
We had great intakes in digital learning, benefiting a lot from this operating leverage with a lot of technology. Again, capability, discipline, focus of taking to students what they need, what they can learn, engaging students. This has been very successful here at Estácio and other brands. Moving to on-campus on page six, we have very important effect here. The aspect of tickets. On the previous page, I told you that the 8% of growth in distance learning should follow inflation from now onwards, around that. When we look at this- On campus, the reality is different. We see on-campus operations, all of them, doesn't matter the size of the group that is operating. You see a lot of people in the red facing difficulties. This price level is not sustainable. We see this movement of recovery. It's been happening for over a year wherever we are.
And our expectation, I'm not promising anything to anyone, this is the work we're carrying out, and I see competitors from all sizes doing that, for us to be able to evolve at this price and recovering healthier margin for this area from now onwards. So, beating inflation is something we've been working hard from now onwards and believing in that. Renewal, again, very stable. It's varying from 82%- 83%, has been like that for many quarters. A very important point is intake of Q3 2023, 53,000 students, 32% over third quarter 2022. Very excited about what's happening again. On page seven, we have the ENADE results, the accomplishment examination for higher education. So it's the last one during the pandemic. People that went, that took the ENADE had their experience, university study at home, doing tests, examinations at home.
And when we look at the ensemble of the institutions, ENADE has worsened compared to the 2018. We're talking about 2018. 2018 is the comparable basis on the rye psychology management. Those courses were assessed in 2022, should be compared to 2018. On the left, we have our on-campus results. We had an evolution of 1.4% point in the courses, well, placing from fifth to third place. And it's an important evolution in absolute terms. In relative terms, we moved from fifth place to third place amongst the listed companies with a higher number of students who in three, four and five, very close to the first and second. On the right-hand side, we have distance learning. There's been a worsening, but we're still leaders. Most of the 100% of students are digital, learning with technology more than any researcher that we have. And we are still leaders here.
It is not an ENADE that we are going to, in the future, as an industry looking back, say, "Well, it was a year to be remembered," but in relative terms, Yduqs is doing quite well here, as pointed by experts in the industry as well. I am turning over to Rossano to talk to us about revenue, costs, and financial results.
Good morning, everyone. Thank you, Eduardo. Moving to the revenue slide. Once again, our quarter was strong. Revenue growth moving 14%, quarter-over-quarter, 13% in the year accumulated, and showing the transformation the business has gone through past years. 2018, we had premium, more digital, adding to 22% of our revenue, and we get to 58% of our revenue. The important transformation of the business, more concentration in businesses that are more profitable. More concentrated in the new revenue lines.
Moving to this expenses, cost and expense, very efficient work the company has been doing is to be highlighted. We show the growth on G&A, MPD, and bad debt. For G&A, we had mentioned the impact here of the increase of variable compensation, the result of the operating result of the company. It is quite stable without the specific effect. In case of bad debt, we have provision coming from students, initial provision that we make at the time of recognition of original revenue. We recognize that 50% of students, now 20% of all the revenue link to this. And also the funding and our intake in the total revenue of the company. Because of the strong intake, the revenue increase, and we have also stake for this. In the accumulated year, we see stability of bad debt on NOR.
In the annual view, we have not had relevant variation year-over-year. The result of the good work that has been done in terms of retention and renewal, along with collection work. This shows the effectiveness of our investment in technology that we have made. They are not only guided to the student experience intake, all the process that involves students, including collection. All platforms that have interactions with students are much friendlier, stable, effective compared to last year, makes all the difference considering all aspects we mentioned. We see positive, the reduction here. Great power of efficiency of our intake platforms, increasingly technological and digital. Everything is much more effective. Our intake, reducing our costs and leasing. We have a process that is conscious seeking efficiency in spaces and renegotiation of cost of square meters that we have.
In the sum of all lines, we see a positive impact to our margin. Moving to slide 10, we go into EBITDA. Combination of these factors, growth of revenue and cost control. We have an EBITDA growth of 14%, considering the guidance ex-IFRS, we are growing 37% in each quarter. The impact a little more positive. This growth led to an increase in margin of 2 percentage points in the accumulated of the year. Consistency in the growth in the business units highlight that it should be observed as a margin, the premium that has a negative impact, very much due to the retention process of FGTS and the variable remuneration that impacted the results in the accumulated. We are isolating the impacted margin would be practically stable on FGTS, mentioned by Eduardo.
We have a bill that has been passed that will be in effect and limiting to retention to 27.5% of years from now on. Generally, we should get positive results, not getting to previous levels, but improving regarding the quarters that we've had previously. Another comment, counting adjusted EBITDA, getting to 473 million BRL with non-recurring effects. Moving to slide 11, we get to net income. Strong growth, 124% accumulated year. Well, BRL 331 million accumulated in a scenario of high interest rates consuming large volume of the operating income. We see positive results, and we have great growth of EBITDA reflecting directly to the final results of the company. On slide 12, we have cash generation.
Again, we have a quarter of cash generation that is quite strong performance of operating results is added to our discipline of cash, leading to very healthy levels of cash flow to shareholders, BRL 108 million. In the third quarter 2023, 243 million BRL in the accumulated of this year. Great relevant growth compared to previous periods. In this context, our average term of receivables is stable. With the great growth of revenue and intake, our average total term is stable or average term of receivables is stable. We have CapEx following reduction. We had a peak in the periods between 2021 and 2022, or 2022, rather. We think we have this guidance of reduction of CapEx. We have the accumulated 68.6% of NOR getting close to our guidance of long-term reduction of 1% point vis-à-vis previous year.
Again, highlighting the concentration that we get in investments in digital transformation and IT, and will keep on taking us to the next steps. We believe the strong cash generation in our business is one of the factors that differentiates us in the market. We're very well-positioned with great flexibility. We've announced that we're going to pay BRL 80 million in dividends in December. Moving to slide 13, another slide with positive highlight in the quarter. Eduardo mentioned in the initial slide, we leverage 1.53x our adjusted sequence. We have strong cash generation and also because of our EBITDA, it brings us to this position that is increasingly more comfortable. This position of 1.53x reduction of our leverage. We have short-term maturities.
We have no maturity by the end of 2023, and it gives us assurance to keep on monitoring the market in an opportunistic way, following the ratio of our debt with future prospects of cash generation. In this context, we've approved to communicate it to the market the new emission of the issued debentures, BRL 700 million maturity in the quarter that was launched to the market with maturity that will be in five, seven years, expanding the profile of debt, working on our total cost. I turn back to Eduardo that is going to talk about the resilience of our business in the past few years.
Thank you very much, Rossano. I think this analysis is quite an important one, especially for those arriving here to the industry. The top bar chart, all the numbers on this page are LTM, the last 12 months.
The gen is the basis of our EBITDA. We start 2020 when we disclosed the market by business unit, when we broke down by business unit. We see the evolution in the past 12 months. In the third quarter, greater the second, greater than the first. We have important evolution happening. This is the best characterization of the strength of the portfolio we talk about. The green, the lighter green at the bottom starts with 310, is premium that never stops growing and is booming. It suffered a bit because of the FGTS, a greater retention, a recovery of retentions. This year is higher. You have growth higher in medical schools, in medicine. Many true groups or classes that have not graduated, so are in the medical school. We have contracts here that are strong.
This slightly bump of FGTS, but the recovery here is quite evident. In the middle, we have digital that grew during the pandemic last year with this intake that was smoother and price protection. What we are capturing from this price increase we had last year is coming together this year with an intake recovery this year. A super success case from BRL 400 some million in EBITDA Q4 through 2020 to almost BRL 7 million, third quarter 2023. On-campus, as I've mentioned previously, from 2014, suffering with FIES found the hardest part in 2022. With our price recovery, operating leverage, and strengthening, we managed to have a major recovery at the time that we're going through 2023. Premium keeps on growing.
The other two take benefiting from the beginning of economic recovery, that we are very optimistic from now on, that we're going to have more recovery of Brazil, the economy moving up, and the social classes with, especially in distance learning and on-campus, are the greatest benefited parties of this recovery. Part of these 32 million Brazilians that have middle school but not have higher education to have their income leveraged by that, trying to seek school benches, bringing great growth to the industry as whole. Bottom left, it's very important to see this analysis, taking the hit of the interest rate increase we had over 2022. The green line is how much we paid of interest.
LTM it grew and grew, and now it's starting to be reduced, resulting from the drop in interest rates and also because of our de-leveraging that is happening, as Rossano mentioned. A recovery of our net income growing, as well as on the right-hand side, an important operating cash flow in the past 12 months is over BRL 1.1 billion . Moving to page 15, another important analysis showing the resilience of our portfolio. We've grown every year in terms of revenue, even very difficult years, 2021 and 2022. We have been having major growth in 2023. Every year, we delivered a margining of 30% or above, and we paid dividends since 2007. Sixteen years paying dividends every year, which I think is the sample of the trust that we have in the business, in the recovery, even at difficult times that we've had here.
Moving to page 16. This is a reason for great pride to us. We have 53 years of strong action. We are very much recognized by that. For three years to now, we have been working a lot on communication and standardization in the ways that are usually made by international communities, and also considering goals. This year, we are at 94% in our goals attainment of ESG. Down here, we have a relevant point, our participation in the movement, Elas Lideram and A Vida é Prioridade, our support to the global compact. We are members, of course, with the public disclosure of greenhouse gas emissions. A point that I want to stress right now is our promotion in MSCI that we moved from A to AA. The great accomplishment is the only educational company in Latin America that is amongst the global leaders that MSCI points in the ESG.
The only educational company that is part of this AA, AAA rating. This is not something that is negligible. We are very proud of it. The effective work of many people and external recognition or foreign recognition that what we do is truthful, has value. We are very happy and proud to be able to share this with you. Moving on to page 17. A big summary of what we have just discussed. We are talking about consistent EBITDA growth. This is very much the ensemble of what you all know. Price discipline, also great cost discipline. We are always thinking what actually adds to the education of our students. Having focused on this with quality, we have a portfolio strategy that is winning, deleverage that is strong, even though we have not had the economic recovery as we expected. So average ticket of a classman over year growing.
All our operations, digital and on-campus intake whole year doing quite well in this quarter is still great success compared to previous years. Quarterly net revenue growing. Two digits evolving all businesses, including on-campus. Very important point. EBITDA growing for the fourth consecutive quarter, two digits growth. Net income, a recovery for levels that in the pretty high interest rates, so cash generation for shareholders, quite important. We have very healthy cash availability. We had very important leverage reduction. So 0.43x versus fourth quarter 2022. So it is important considering EBITDA, cash generation, and this fast movement is not yet where we would like to be. We have a lot to go, and the level that we are already feeling quite comfortable compared to what we felt a year ago. Moving on to page 18.
We have dividends that we had announced to you that we are going to pay in the fourth quarter. Intake fourth quarter has been doing quite well. We are projecting growth of 10%-20% vis-à-vis fourth quarter 2022 to EBITDA of the fourth quarter, we expect to have from 5% and 15% vis-à-vis Q4 2022. We had a growth of 19% compared to quarter four of 2021. So over a strong growth last year, CapEx moving the trajectory getting to 7%, 8% in mid-term.
We have been telling you, with a reduction of CapEx, about 4% compared to last year, with an increase of NOR, that sets a trajectory for us to take an additional step to the number that we have been announcing to our guidance for the year 130, 160 new medicine seats. We had 53 approved in Amargosa, and we have the expectation of fulfilling this number this year.
This is what we wanted to share with you. I think the consistency that I showed you in the opening is quite clear, and the results are not only talking about the EBITDA, ex IFRS, cash generation, de-leveraging, net income. We have important evolution happening here, and you share this, not only the pride of what we have done over this year that has led to these nine months of very positive results, but also the excitement of what we see ahead coming not only to us, but to our industry and to our country. Thank you very much. Over back to you, operator.
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Thank you. We are going to start the Q&A session for investors analysis. If you want to ask a question, please press the button reaction and then raise your hand. If your question has been answered, you can leave the queue clicking lower hand. First question is from Fred Mendes from Bank of America.
Good morning, everyone. Rossano, thank you for your call. I have a couple of questions here. Perhaps the first one is more strategic. De-leveraging is very clear, the trend with CapEx reducing the trend is to speed up the de-leveraging. So actually we have at 1.5, should we expect a bit more dividends, continue to de-leveraging, seeking new forms of growth? First question. Second question is more an update on news of the new potential regulation on distance learning, some more predictions, the restrictions. What can you tell us about these topics? Thank you.
Thank you very much, Fred. Well, man, I love your questions. Well, the first, it is really cool because you start listing options. Are we going to pay out dividends, deleverage, seek growth options?
This shows the moment that we have been able to build to get here, having these options and these discussions. We have a tradition here. I like that page very much. That shows the growth every year, margin above 30% with dividends being paid out, classic compounder. And then the element missing there is to make good reinvestments in the industry. So we look at the five M&As that we made in the past five years have been very successful. Even those that we made pre-pandemic, when you look at the numbers retroactively with lots of revenue, et cetera, but they were good businesses. So I believe we have a discipline here from what we took, what we haven't taken, and we have the recognition that is clear of good capital allocation. A very long answer to you. I believe the trajectory is to keep on de-leveraging.
In my mind, is to get to numbers below one. The comfort is to get even better. We have important evolution that continues. We see cash generation that applies to Q4. And what we have in the budget for 2024 that is ready. What may happen halfway is that we may find a very good opportunity and the bar is quite high. We are talking about specific points that add to our portfolio places that add very specific additional geographies in Brazil that may be weaker. The trend is for us to keep on de-leveraging. Obviously, we are not going to miss this momentum. We have this track record of over 16 years paying dividends. We are compensating our shareholders. It is important for us to have created options. Rossano, would you like to add anything on the second question?
Sure I do. No, nothing to add.
Okay, Aroldo.
Thank you, Eduardo. Thank you, Fred, for the question. A possible change in distance learning regulation is being very much talked about. The basic assumption is that any assumption that brings more surveillance to us is good. Not only for what Eduardo mentioned, the vary 90s. We have a year of many visits. All of them we had three, four, five, most of them five. So we have very good ratings in terms of our courses. So we have an increase in inspection. To us, it is going to be good. Other points that are being questioned, medical courses, public consultation underway. To us today, it is not very good. The short-term impact may be small. Another important point that we never stop believing in other courses, both on-campus strong and 100% digital learning.
Any changes in restrictions on one hand or the other hand, we believe we are going to be benefited by that as well. We should, of course, revisit our strategies, but we believe we are prepared because we have a broad portfolio of products to be delivered. Any changes to regulation, I believe we are going to be part of it, just as we have been in the past changes that have happened over the past years, from 2017 to now. That is it. Slight changes in the short term to our results, considering that we are not large in these medical and semi or hybrid courses, that we see opportunities that we can have intake in the on-campus, semi, distance, or just certain changes in the future. I strongly believe in that.
Perfect. Thank you. Super clear. Thank you, Parente, Rossano, Aroldo.
Thank you, Fred.
Next question is from Marcelo Santos, from JP Morgan.
Good morning, everyone. Thank you for the opportunity of taking my questions. Parente, Rossano, Aroldo, I have two questions on my side. First is Mais Médicos 3. We have 5,700 seats that should come to the market according to what is planned. Was 2,000 of private expansion, 2,000 public expansion government published 10,000 seats that you plan to put on the market. How do you assume this should impact the dynamic of supply and demand in the market? Do you believe tickets and margins are sustainable? This is my first question in medicine. Second question is whether you could make a, well, elaborate a bit on the competitive environment on campus and distance learning. Thank you.
Good morning, Marcelo. Thank you for your question. Talking a bit about the Mais Médicos 3, the government has understand that there is a need for increase in the seats for medical schools with 10,000 new seats. We should consider that it is not mandatory to get to 5,700 seats in those 95 courses. This is maximum potential. There are certain limitations of the educational institution as they are visited. It is important to stress that this number is not certain.
It will depend on several other variables, the performance of the project to get to this number. But it is a fact that there is an expectation on the new tender for private institutions. We should get to 95 new medical courses and maximum potentials of 5,700, in addition to 2,000 to public federal schools and to other 2,000 seats for the previous ordinance of increasing seats in existing courses.
It is worth mentioning that in this bid, it is a maximum potential because the courses have been, well, the bar has been raised from three to four, so this has an impact. The seat in the recognized course, when we go to the analysis of Mais Médicos 3, we believe that we are very well-designed because actually it has mechanics that take medical schools to places where there is a lack of doctors. So places that have 2,500 doctors per or 2,400 doctors per 1,000 inhabitants. So when you see these ratio, they are municipalities that actually have a network of health that is very precarious. So actually this increase in seats will happen, but not in the volume metrics that is being expected there. Those are regions that actually, we have lack medical schools in the region.
There is a great pent-up demand and many times you increase this bucket, applicants that could not have access to commute to other place, accessing medical school seats there. So we are positive about that. It will bring a change in terms of decentralization, taking medical schools to regions that have market demand as well as social demand for those courses. On our side, we have a history of success in previous tender processes.
By analyzing the municipality, we see, considering our capillarity with on-campus courses, with medical schools that are well seen, grad, undergrad. So we see people that are able to deliver quality medical courses. They will be very competitive, and that is our case. So we are not concerned about that because actually those are geographies where there is a need of medical courses in the region. If you analyze their municipalities, 30,000, 40,000 inhabitants, most of them. Around them, we have several healthcare regions of 6,000, 650,000 inhabitants. So quite optimistic with this tender and it is positive for the industry and also for society. So there is no short-term concern in this case.
Thank you, Silvio. This is it, Marcelo. We are super prepared for Mais Médicos 3. Some acceleration in price growth will be offset by its volume and it looks, we are very ready for that. There is an effect also on demand. So it is a tender, as Silvio said, that has been very well drafted, thinking about what society really needs, and this helps us a lot. There is something that makes sense. So you are having something that is good for everyone. We are exciting with what we have in terms of medical school prospects on campus and distance learning.
If we compare them, when we look at distance learning, we have evolution, great groups. It is increasingly more difficult for you to be competitive on distance learning. So we have a lot of expenses, scale is important. So we have an advance of all groups and we see growth happening. So people always say, "Well, until when?" So until when? In our view it is very far. We have over 30 million, 8 million people studying. Distance learning, approximately half of that. We have new students every year, 1.5 million, 2 million. So when you have 32 million in stock, more than what we get from middle school, it is a lot of people to join. So we have very clear benefit to people of income and through education, place in society when you join such course and competition has something that has been very positive.
We see great evolution in quality, ours and competitors. People sort of provoke others. People want to do increasingly better. The point of Aroldo in his previous answer. The tighter it is, the better to us. The tighter, the more we challenge ourselves and create differentials here. So there are great groups that are growing. We are one of them. We are growing in terms of FIES. This is clear for this year. It's a market dynamic that is a market that is growing. We don't see the market stopping to grow so soon. So we see it in a positive way what has been happening in distance learning. On campus, this is slightly different. Since 2014, there's a sequence of crisis. We have FIES, we have economic crisis, COVID pandemic, many things happening on over capacity that was clear.
Perhaps for 2014, that was appropriate at the time, but with the reformulation of FIES and all the crisis we went through, over capacity to the market, that is being resolved. So you take our example, we moved from 127- 88, 89 today. Now we see that with the large ones that I could take 10 minutes mentioning small numbers I remember by heart that closed their capacity partially or completely. We see this trajectory. It's a rare moment that we are the last to add. We've been seeing following numbers of competitors. This is very good. There's an adjustment of supply and demand. We have a recovery, a semi on-campus that is strong. Great opportunity for us, for competitors have seen that before us. We're sort of tryin 2,500 doctors pe g to catch up. On a bad side, we could be different.
The good side is the great opportunity for growth that we see. The arrival of Aroldo on campus has had great impact to that. At the time that we're seeing the product, what we're going to do differently, it brought great choice over this year. When we look at the type of margin that we practice on campus, 23% of we have accumulated over the year. When you take CapEx, when you take these from that and other accounts to be paid, interest, et cetera. So we still have a small margin because we have large leveraging it, a lot of technology, a lot of distance learning courses. Less than the others in the industry show the difficulty that people are facing. Any movement that is positive, it's a bit the question that people from the newspaper ask me. Yes, if FIES does not have a short-term impact.
Well, goodness, last year, a few things will be changed. You have FIES coming back robust as in sound as we wish it to be, broadly recognized by society as something that is good to it. Society will have a small impact and gradual that removes the pressure on campus. When we look at the prospect of distance learning growing and evolving, serving more people increasingly with more quality. When we look at on campus, I think it's a recovery, not a level pre-2014 recovery that is quite different from what we practice today. Prices quite different from what we practice today, but gradually, slowly and always we'll keep on growing. Aroldo? I'm going to take it by surprise. You want to add anything?
Surprise. No. No, I think this is it, Eduardo. Nothing to be added.
Okay, wonderful. Have we answered your question, Marcelo?
Yes, you have. Very well. Thank you, Parente, Silvio, Aroldo.
Thank you, Marcelo.
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Next question is from Vinicius Figueiredo, Itaú BBA.
Thank you, guys. Thanks for taking my question. Two questions here. First, moving into cash generation. We saw a quarter that is very strong in terms of free cash flow, very broadly mentioned in the introduction. You had an improvement in working capital, though greater contribution coming from Yduqs. I would like to understand what has been done in the line of monthly payers, SG&A, that led you to have cash release in the part of receivables, even with this point of the mix. The second point I wanted to explore is regarding some cost and expenses. You had an improvement in personnel costs when we look at on-campus specifically, and you have marketing expenses that helped in all segments. If you could comment on how we should project this, looking the quarters ahead, this would help a lot. Thank you.
Thank you, Vinicius. You have asked everyone questions, almost. I'll let Rossano talk about Rossano. He will introduce, and then Aroldo and Marcel will come in and complement.
Thank you, Vinicius, for your questions. Well, for cash, it's a bit what we've been telling you the past quarters. I mentioned during the call, we've been investing a lot in the collection process using increasingly more technology, digitization, use of services, increasingly more intense that are technology-intensive. This has been improving our collection process. In addition, this is a product that is very mature. We have been receiving all these installments of the revenue that we recognized in the beginning. For those that don't know this, we recognize the payment early in the month, and students pay the installments over their course. We do not offer anything post-course, but this is paid along their course.
Cash comes in and revenue was recognized last year and increases or improves our cash flow. That is day-to-day work and constant evolution on working capital. Second question on constant expenses, I will leave it to Marcel to talk about marketing. That is something we have been having in marketing with a lot of investment in technology, digitization of portals. Our digital channels have been increasingly more effective. We see more productivity in this line. Total merit of our team of market intake. Let us turn over to them so they can talk a bit more about that.
Thank you, Rossano. Well Marcel. Vinicius, so far, we have been working quite hard in terms of efficiency in all marketing lines, both in terms of performance that is all online and offline. Offline is a negotiation that is more on a case-by-case basis on issuers, et cetera.
We changed a lot our model of contracting. It is now more regionalized, choosing the audience or our target audience. In the part that everything is online, our main front of investments is marketing. As Rossano mentioned, we have been following a journey of evolving our intake tools. The website is a major one, major investments. We moved from a scenario which we had the time of enrollment that was days. Today, a person with ready documentation can complete the registration in five, six minutes. Constant evolution that we see. We see evolution. The audience that actually applies and enrolls in the same browsing, this has improved 4 percentage points with certain consistency. This obviously demands us to be a bit more accurate in the investments other areas, and this generates efficiencies. You have asked in the line of what we have ahead. That is super important.
Some points that are relevant to us. First, next year's ENEM. We have great seasonality for 2024. It is anticipated. We are talking about the results on the 16th that is expected. We have all the marketing plan very much linked now to the end of this year. We have an expectation of closing the year with a number that is into book terms close to last year's. We are generating percentage points considering a revenue, but in terms of numbers, we are sort of keeping the same levels as last year. Next year, again, we run lots of tests in terms of price and marketing, and we see the possibility of expansion in some marketplaces with great relevance. Answer of what we have been doing over this year.
We have great opportunity with the market recovery, as we have felt, of investing more in visibility and a bit more of seeking, trying to present and having the Estácio brand a bit more visible. Next year, between 0.6 percentage points and 1 percentage points of margin ahead of what we presented this year. This is super relevant. We have seen all the investment we have made yielding a lot of results. One of them, so taking our new entrants, Apollo's greater market than Rio de Janeiro. This is quite emblematic to us in terms of growth, shows a bit of our soundness in terms of distribution portfolio and how we have been able to take the brands to every corner of the country in a more uniform way. The other one, I will turn over to Aroldo.
Thank you, Marcel. Thank you, Vinicius. On campus and distance learning, we have relentless search for efficiency. As you mentioned, concretely, what has been done over the past 12 months, almost that, we reduced almost 250 people in the secretariat or registry service, increasing our NPS and satisfaction rates. We increasingly try to use technology and we look at processes all the time, what can be improved, what we can use in terms of technology. In this specific case, as I've mentioned, it was self-service, how people can use our portals to improve service, reducing cost.
We increasingly looking at that technology also is present very strongly in these processes that were more manual, more in-person to buy in-person. We're getting good results in the personnel line, but in other lines. For on-campus, this has been helping in the margin improvement personnel. We've captured a lot. We're still trying to get some more possibilities of improvement over time.
Excellent. Parente, Rossano, Marcel, Aroldo, super complete answers. Thank you. Good day to all of you.
Thank you, Vinicius.
Our next question is from Leandro Bastos from Citibank.
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Hey, guys. Good morning. Two questions. One, a message of price strategy on the intake of Q4 on distance learning. Is it similar to what has been the rest of the year? More elasticity in price, ticket a bit below. Then for the security, what are you imagining for this market in 2024? I know it's early. Do you consider distance learning will be similar to 2023, large volume and a higher elasticity? Would be interesting to take this expectation of the company. This is a question. The second one, taking opportunity, what you've mentioned, accounts receivable, FIES, active, inactive. I'd like you to talk about the mechanics, how it works, transfer of students, active from inactive, provisioning, increase in coverage, how long it happens, and how the write-offs policy works for FIES. I think it would be interesting if you could elaborate on it.
Cool, Leandro. I'm just going to make a disclaimer. We're giving very long answer because you're asking very deep questions, which is really cool, but that shows that the surface is very well-absorbed. I'm going to start with 2024, and I'll turn over to Marcel to talk about Q4 and Rossano to talk about FIES. In 2024, we read some reports. We haven't been able to read all the reports.
I'd like to draw your attention, and I'd like to talk about the quarter is what we've announced today, but the trajectory that we've had since Q4 last year of two-digit growth, sometimes it's 19, 20 some, now it's been 14. This trajectory is important. We invite you to make a reflection a bit more on the thread. Why do I draw 2024? We had no fantastic intake in Q4 in distance learning. We had fantastic in the first, second, and third. Second quarter, we had 80,000 in distance learning, which is almost 200 in the first quarter. It's very strong every quarter. Great sensitivity to the moves we've been making, not only us. I had a quick look at other disclosures, and on the basis that is large, great growth on a very large student base.
We have nothing to that leads us to think that 2024 will be different, much on the contrary. What we are feeling now is a move that is slight, move of economic recovery that impacts us positively. We believe in the strength of the portfolio. It is a portfolio that we worked very well in during crisis. Any recovery, one, two, three of GDP, we have great sensitivity. It is early to talk about 2024, but what we see in 2023 in this sort of final lap of this year makes us feel very excited to what we see ahead. Q4, Marcel.
Thank you for your question. On the distance learning prices in Q4, we see a scenario that is much more accommodated or laid back. Distance learning, of course, we have constant tests to check volume price. This is our day-to-day here.
We see a competitive scenario that is much more relaxed in the levels that we are seeing over the year. We do not see any crazy moves being made by any player. I am speaking specifically about the Q4. With this, we follow with our levels of test, and we have equated this quite well. All this LTV, we try to optimize the ratio that we have between base, student base, and price. We have managed to get these good volumes operating daily. This competitive aspect in the markets where we are operating, testing different strategies. But the scenario overall is very smooth. We are very positive and confident regarding Q4, as Eduardo mentioned, both for distance learning and the first signs that we have, that we start collecting for early next year. It is a quarter again.
Adding to the previous question of great preparation for the beginning of next year, that has important seasonality in the two, three first weeks of January that we have prepared. We are very optimistic in this regard.
Thank you, Leandro. Very qualified and technical. I am going to try to be as comprehensive as possible in my answer. The write-off, not only for Gs, for any accounts receivable that we have open, our write-off is complete over 330 days of non-performance, of effective delinquency. We have no accounts receivable in the company over 330 days in arrears. This is a rule. From the first day of delay, this is a growing rule that will reach write-off at the end. The rule of dropout is much more stressed. It reaches 90% less than the six months. You have 6% of provision.
You reduce the probable likelihood of receiving once the student are inactive. It is more faster rule in a conservative attitude of the company. In your point of moving to active, inactive DIS, how this goes to payers or not. We keep accounts receivable of DIS. We have a long-term revenue vision, revenue that we receive on installments over the whole course. When the student drops out, the debt matures immediately. They have DIS to be paid in 48 months. They drop out at the time, the debt mature. They have to pay on the spot. That becomes a normal accounts receivable of students, tuition-paying students. It moves from accounts receivable. It is become a normal one. I am collecting the students. There is a turn of accounts receivable from DIS to on-campus. This gives great stability to our level of inactive DIS.
If you look our kind of inactive DIS, when you see have great intake, et cetera, it goes up, it reduces. You see accounts receivable DIS when it is very stable, it is because you are frequently doing write-off. You are getting new students, but at the same time, you are doing write-off of the older accounts receivable, showing the maturity of the product, and also the good accounting and conservative practices of the company. I hope I have answered your questions.
Thank you. Very good. Just adding to Rossano, something that we measure here is how much we get of revenue and cash to DIDS. I acknowledge revenue once a student joins, and the cash, the student that joined in 2020 is paying DIS today. It is only cash, not revenue. So those figures, when you get to the end of the year, they are very similar. It is a year of greater growth. Revenue is a bit higher than cash. When we see last year, revenue was lower than cash that came into DIS. It is a process that had been going on for five years, super stable, totally under control here. I think concern that we do not have, okay? Thank you, Leandro.
Thank you, Parente. Have a good day.
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Next question is from Lucas Nagano, Morgan Stanley.
Good morning, everyone. Thanks for the space. We have two questions. The first related to bad debt. It had an expansion that was expected during freshmen, greater number, et cetera. Considering the trend of profile students revenue continue next year, do you assume that bad debt will keep this level a bit higher, talking about Q3, not nine months? Or if you expect to mitigate this effect somehow improving retention, collection? First question. Second question is a follow-up to public consultation. Eduardo mentioned that it has an impact more concentrated in the short term. You are going to mitigate that expanding portfolio currently. How are you positioning yourselves? How do you see the risk of this proposal being approved? What is the base scenario you are working on currently? Thank you.
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Thank you. It is your favorite topic, Rossano. Thank you for the question, Lucas.
Well, bad debt, we've been constantly talking about renewal. So many times, market associates bad debt to increase in growth of DIS. They're growing to default. Renewal is key. Perhaps the great pro that we see for trend in the mid long term of bad debt, because students to renew, they have to pay the debt. I'm not going to renew students that have debt, so they will pay them off and then renew. When we see for consecutive quarters or with renewal, good results of renewal, the prospect of bad debt is not negative. You see variation according to the project. Yes, it brings a variation between quarters. When you have a great intake as our intake, there is an exposure to this revenue, and this revenue is mid, long-term, different risk profile to the company will have certain instabilities of bad debt or variation over quarters.
But if you take more mid-term vision, our bad debt is relatively stable. We've been saying this constantly that our view for the year is quite similar to the percentage of NOR regarding previous years. You have some events that bring some quarterly variation, apart from years when we had four quarters for intake, rather than having every semester. So we have some specific variations that make these adjustments. From mid, long-term, we don't see any factor that would lead to relevant increase of bad debt. Much on the contrary, as we've mentioned previously with this question on collection process, we've been investing in technology, improving all the processes. So we have been increasingly being concerned about this process of credit recovery, taking care of the health of accounts receivable, so that in the mid, long term, we obtain positive results in this line of bad debt.
For our collection process of our students, very sensitive. We do not want to be aggressive the most. We want students to keep on studying, that they have the ability to pay, because we know the product at the end is very positive and beneficial. So they leave the school much better than they have joined. So, the long-term, they are being prepared to have better salaries. Institutionally, we've been showing Brazil how much there is in terms of income leap of students from middle school to higher school education. So we have to have a product that will boost the paying capability of students. I don't want to lose this guy for temporary inability of paying.
We look carefully and try to make the collection process as strategic as possible to minimize, obviously, our bad debt, but keeping students studying with us because we believe in the final value of our product. This is it. I'm going to talk about regulation. Well, as to regulation, it's not yet clear. There is a lot of debate. One of our board members said, "Well, novelties. We have news every week on regulation in the education industry. Every week we have news." Great changes have been very few in the past five years I've been here. So we're following this part closely. Cláudia Romano, our regulation ESG VP, is actively participating in debates, Aroldo as well. So we have a long way to see what should come ahead.
What is important here is for us to, well, we have a lot of technology, and actually, we have three ways of delivering our services and some variations on it. One thing is digital. That may be 100% contributing to other formats. One on-campus, the professor before students physically, and we have the Teams product that you hear a lot. It is important to us. We are going to talk about which is live professor on Teams delivering or giving classes. Well, when you talk about on-campus, semi, flex, they are all combinations of these things that give us a lot of flexibility to reach great quality in the student experience, what they expect to have and are able to pay, have physical availability to have. We have a good base to work on, and we make great effort.
We are very well prepared to absorb changes that may or may not occur from now on. I think Aroldo's point is quite important. What does this impact? We are smaller than the others, not something that is so large in terms of discussions that are more in fashion in the distance learning world. We intend to grow in the semi on-campus. If this changes, we have to make adjustments in the semi on-campus. Students that want to do medical school in the semi-presential, they will migrate to semi on-campus.
They do not stop having a dream, so they will adapt. We consider ourselves very well prepared. We will be more prepared to welcome people impacted by those changes, something that we are following closely. We like to be fast to make adjustments that are needed, but it is not something that concerns us so much. Aroldo, would you like to add anything?
I would just like to add that actually today it is not large. We believe that we do this quite well. I was talking specifically about medical courses or medical schools. What is being done in terms of practices. We have virtual labs with great technology, or in their majority, they are physical within our units, both in our campuses and newly opened specific hubs for this. But we have a lot of quality involved. If it is a matter of surveillance group we are in, if it is a matter of restriction. It goes into what everything that Eduardo has mentioned. It is something we believe very much in what we do, and this is why we advocate it. A second point I would like to add is the following. If there is any kind of restriction, this will probably come with some kind of action of accessibility.
Otherwise, we will be reducing audiences or in smaller towns that would have no access. We have to understand what will come along. We talk a lot about restrictions, we talk a little about what may come along. We have some benefits to on-campus, a way for students to be able to pay. It is a matter of price, geographical accessibility, having courses available in those geographies that is not being discussed at the time. Probably it will be discussed in the future, not only simply getting a restriction that we are commenting now.
Clear. Thank you.
Thank you, Lucas.
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The Q&A session is closed. We would like to turn over to Mr. Eduardo Parente to make the final remarks of the company.
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To everyone, I would like to thank you very much for your trust. Many of you have crossed the desert hand in hand with us over those two years in our journey. Very important to us, to our journey, to our students. At the moment that we view a future that is quite different. Again, I highlight the past 12 months, not only the quarter is being very good. It has been very good. I have mentioned this a few times during the presentation. It has been very good, not only in terms of EBITDA, but everything that comes below when we look at net income, cash generation, the combination of EBITDA with reduction of leverage, which is a consequence of cash generation. So we have a trajectory that allows us today to go back to be absolute masters of our future.
We have always been, we have several options in the question of businesses, if I am not mistaken. So we are very excited about what is coming ahead. I think we have several regulatory questions that, as has been mentioned, Rossano mentioned, and Aroldo . When we start talking about distance learning, we talk about academic training. We have to have that. We must have a positive side of accessibility, funding, additional support to students. So we have a lot of things happening, but with this debate that is always very positive. Something that focuses quality on the improvement of lives of people, focusing on our having professors, doctors, teachers, wherever they must be in Brazil, in all geographies and well-trained and everything that we see in terms of market regulation demand.
We are at a time that is super positive, that makes us feel very excited to keep on delivering in 2024 what we have delivered to you in 2023. Thank you very much for your trust and reminding you, those that are listening to us in the interpretation, we are going to have an English presentation in English to make sure we have direct communication, myself and Rossano. Well, thank you all very much. We will have a presentation in English in 11.
Yduqs video conference is closed. We thank you all for your participation and wish you all a very good day.