Ladies and gentlemen, good morning to everyone, and thank you for waiting. Welcome to the earnings call for the fourth quarter of 2020 of Yduqs. The presentation will be done by the CEO, Eduardo Parente, and the CFO, Eduardo Haiama, and the other members of the board will also take part. The audio and the slides of this presentation are being transmitted on the website of investor relations of the company, www.yduqs.com.br, and it is being translated into English. Should you need any help during the earnings call, please request help by typing star zero two.
This audio conference may contain predictions about future events, which are subject to risk and uncertainties that can make such expectations to not fully come through or be substantially different from what is expected. These are of the opinion only of the company at the date that we have this publication, and we do not have the obligation to update it. Now, I would like to give the floor to Mr. Eduardo Parente, the CEO of Yduqs. Mr. Eduardo, you may proceed.
Thank you. Good afternoon, everyone. I hope that everyone is healthy. I believe that any result that you hear, you will take in consideration a very difficult year, 2020, and when we look at the year, we are certain that we are only comparing ourselves to ourselves in 2019, and I am sure that the results will be great. I am going to go to page three to see the 2020 highlights. I believe that there is consistency over two years, and we have shown our investment, our opportunities for growth with digital learning and medicine and M&As.
When we look to the future perspectives, we are certain that this is making us ever stronger. From the left to the right, if you look at the digital learning expansion, we have a growth in the student base, 70% year-on-year. Over 577 centers opened, and we are growing 59% year-on-year for the digital learning. In medicine, we had over 244 seats added. We have a perspective of another 250 seats for new operations for 2021. 150 of them were announced to the Ministry of Education, and we are going to get the rest by the second semester. We had an adjusted medicine revenue of 37%. In M&A, we had the acquisitions of BRL 2.3 billion in the year, which represented almost BRL 800 million 12 months NOR, and we captured over BRL 70 million in synergies.
Let me look at these perspectives, the digital learning. We have a lot of centers maturing. We have a procured growth. In medicine also, we have a lot of centers maturing. There is a perspective for the increase in seats, and we have a really good perspective, very natural on everything that we have been working over the last years. When we look at the third box, M&A, then the fourth on the right, cash generation, we have a financial situation that allows us to be very optimistic. Considering this lever in the near future, we have cash availability of BRL 1.6 billion. We have an operational cash flow of BRL 1.1 billion, and the net debt over adjusted EBITDA, 1.4x .
These three financial levers are very important and fundamental for the results of this year. We have to have a good perspective continuing with the levers up ahead. At the bottom of your screen here, you will see a highlight. Everything that we have done in terms of digital transformation and IT. We have done a very relevant update in our hardware. We are taking into account data centers and everything that is in the background. We are not just thinking that digital learning depends on the system, but every single student depends on this because of the Aura model. We are taking the elite digital content that is done for all of our students. Also, when we have the digital transformation, it is not just the improvement of the ticket, the boleto here in Brazil.
Our core business is what we are teaching the student. This is our future, and there is a lot of excitement for the future results that I will talk up ahead. In digital learning, we had growth. We had a little bit of a drop in the on-site, but of course, it was a very difficult moment for on-campus. We understand that our technology mindset will provide us with great results, and we will continue to grow in the market. This increases the NPS even though we had the pandemic. We can see the great example here, digital 10 points and on-campus eight. Page four. We had a lot of demand. Whenever we mention on-campus, we have to give more visibility about our business. We work incessantly, and we want to show that we know what we are talking about.
We do not like to do projections and provide you with a perspective on things that are baseless. We try to use data, and we believe that we have a maturity in our business that will show. Everything that is happening here, we have an origin, of course. We started, the inception is on-campus. Once we moved outside of the umbrella of the on-campus three, four years ago, we had a different business, but we have a size that represents actually different businesses, different perspectives, different growth rates, and different cultures. We are thinking about efficiency and how can we fit in the possibilities for the monthly payments for each student, but we are thinking about an expansion and thinking, how can we make these franchises actually be profitable? We have a product that is absolutely digital, and based on that, we will build upon those bases.
We are trying to decrease the size of on-campus. Our mindset is that we start in the cell phone, and then we move on. The other part is focused, of course, on absolute quality and excellence and being a market reference as a whole in education. When we created Yduqs, we had that in mind. We wanted to be sure of the numbers, the ratings. We do not like to review our numbers. We always like to be based on surety, on real numbers. Here we see a little bit more details, and everything is detailed to the best of our abilities. The sum of the EBITDA is the sum of the total EBITDA. Here, representing the three business units. We have the names, of course.
We have a business solidity, then we will do a deep dive in the details and differentiating each business to be more consistent, to have a better communication. Our on-campus. I believe that many people associate us only to on-campus. It is a very important business. Once the economic crisis has gone by, the drop in FIES, and the COVID-19 pandemic has gone in the past, we have the margin of the EBITDA 318,000 students, 5% growth versus 2018. It is a business of low growth because of the moment that we are facing with the pandemic. We had crisis after crisis. Total NOR of 60% of the total Yduqs, and an EBITDA almost BRL 600 million, which is a little bit less than half, 44%. We like to see this as an upside, as fixed income.
We see M&As when we look at the on-campus. It is not just on-campus. We see a lot of opportunities. Some of our competition is even operating with negative EBITDA, but we created a system that works well. We were very responsible. From the peak, actually, of the FIES financing, we had 300,000 students, and now it dropped to 3,000. One of our secrets is to keep the profitability that is very good and really believe in our business. The second vertical, digital learning. That encompasses not only the undergraduate but also lifelong studies, the graduate courses. We believe that this is a very important future for us. We will present each business individually. We still have very robust growth rates. We are improving on our approach.
It is an opportunity, and we have focused from year on year, we are focused on the good results. We can see 334,000 undergraduate digital learning students. We see an adjusted net revenue of almost BRL 1 billion and an EBITDA of BRL 441 million. The margin of EBITDA is 45%. When we look at the typical high growth, and we saw a combination of the sum of EBITDA and the growth, sometimes 40%, 45%. We have 45% of EBITDA here without the adjustments, and that is year on year.
This is something that we really need to take into consideration, and we need to focus. People understand our business, and we can show them in numbers. We have also the premium business units on the right. We have our reference centers. It encompasses medicine and also IBMEC, the business school. The growth of medicine, you can see it in numbers, 5,400 students.
We have attached information showing the expansion of medicine. The idea is to get to 6,100 students by the end of the year. That is the growth. IBMEC, 4,800 students. Revenue BRL 625 million and EBITDA BRL 310 million, 50%. It is very predictable business with a strong cash generation and a growth that is higher, let us just say, until the end of the year. Let us see page five. Let us talk about the digital learning.
From left to the right, we can see the student base, I already mentioned it, growing 106%, 2018 to 2020. Undergraduate digital learning, the growth is actually 150%. We are growing for 10 consecutive quarters. Very strong growth in regards to the previous year. I believe there are three issues here. One, clearly with the end of the FIES financing, a lot of students do not have the money to pay for the monthly fees.
The FIES students are migrating from the on-campus to the remote learning to the digital learning. The second type of student, they didn't have a center in their city, but now we are expanding all throughout the country, and we have practically one center in every city that has over 100,000 inhabitants. Third, the people, they do not have time. They say, look, I am 35, 40 years of age. There are many of these type of students, and it's working very well. We will continue to expand. We are talking about 2,500 centers in 2021. On the right, we have the retention rate growing strongly. We believe that the digital transformation is behind us, of course. This is our core business.
The way that the student learns, the way that they have their experience with us is even during the pandemic, we managed to do a leap of 4 percentage points, and we are very proud of that. The net revenue is growing 106%. Here we have a very important issue. We have courses that are BRL 5,000 to BRL 25,000 per year courses. We are serving the three tiers. We have partnerships such as XP, Empiricus, and Microsoft. We have 70% of growth, therefore 40-some EBITDA margin. These are impressive numbers. I am very proud of our work. The idea is that we start with a cell phone, and then we grow on that first contact. We can see the growth for the education market in Brazil as a whole. We're talking about also the Classes C and D.
When we think about the C and D Classes, which is a growth that you expect, and Classes A and B, it's a very limited number of people that do not hold, for example, an undergraduate degree. But C and D, we have a great growth, and we have the digital learning, and we have a great margin to service this 45% with a ticket that is good for our students. They can pay for it monthly and a perspective growth that is very good for the future. Let's go to page six, to our premium business unit. On the left, you can see the adjusted premium net revenue, almost a double from 2018 to 2020. Gray is IBMEC, and it's an M&A that we concluded last year.
Even without IBMEC, we would have had a substantial growth here. We can see that there is a good predictability for growth. This is a sector that was directly hit by the mandatory points, the court decisions, and the laws. From 2018, we had 8% of the total adjusted revenue, and in 2020 we've had a growth to 15%. This year we introduced something that we believe it's a great competitive advantage to be able to operate as a single business unit. In medicine, we did a national Vestibular, the entrance examination. Our average ticket for med vest or for medicine, we had an adjusted average ticket of BRL 8,700 per month in 2020. We grew 244 seats, and we have an expectation for 250 this year. Looking at IBMEC, the student base on site, 6,200 students. A renewal rate, very high, 95%.
Adjusted average ticket, BRL 2,800 per month. A very important issue with IBMEC is the platform. We are using technology to do elite teaching all throughout Brazil, and this has a very important role in this process. We have a completely different unit that is separate from our own building, and it is here that we generate the content for the on-campus and the digital learning on IBMEC. The inception of IBMEC, the idea is the expectation is that IBMEC will provide us with knowledge. Let us see page seven. On-campus. Certainly, we have a situation that all of you know, the loss of the FIES financing. We had a loss of BRL 1.5 billion in revenue over the last few years, and this we can show it to you in blue. We left with 64,000 students, and now we only have 20,000 from 2018 to 2020.
We grew in terms of student. IBMEC, the acquisitions in gray. We have UniToledo, Athenas. IBMEC is not in this math actually. IBMEC, the M&A is actually compensating for the loss of the FIES students. It is important to notice as well, when you look at the dark blue, it is our organic growth. We are growing from 2018 to 2020. We realize that this is a great demonstration for servicing the market, and you should not be measured by the loss of the FIES financing. For us and the competition, this is something that will be marginal this year in comparison to previous years. The trend for the on-campus market is a specific growth. You can see the census of INEP. There is a slight organic growth, and it is a very difficult time, of course. Three back-to-back crisis.
When things improve, we have the perspective of having a robust growth. We do not think that there is a direct correlation with the GDP, no. The growth will be 5 percentage points as the economy improves. The retention rate, you can see that there is a drop of 3 percentage points versus the same period last year. We consider that this is a victory. There is a big part of our students that work. We had the renewal comparing with the first semester and the second semester. We wanted to understand our students, help them if they lost their financing. So we did that in the beginning of the year. We did not do it at the end of the year. We had a drop in 3 percentage points, but the numbers are very good considering the pandemic. On the right, we have the adjusted net revenue.
It drops 12%. Without acquisitions, it drops 22%. Once again, we look at all the numbers, excluding the FIES, we have a growth, the lighter blue on the right. 13% 2018 to 2020 or 2% without acquisitions. We understand that the trend is good. In regards to the ticket, which is a concern of everyone, we have had a stability in 2021. The market is very rational. We hit rock bottom, but when we look at our ticket, the reported, it dropped 5%, and the adjusted by the laws and court decisions. Here we can see that here we have Estácio, Yduqs.
We do not have IBMEC, and we do not have medicine. When we look at the consolidated, it grows a little bit. The tickets of the acquisitions had a higher average than what we had in Estácio. When we look only at Estácio, we have the perspective for stability. We can see here up ahead that we are going to have a positive evolution. I am going to let Haiama talk about the financial part.
Thank you, Parente. Let us see slide number eight. Let us talk about the revenue, and let us see how the impact of FIES was developing all throughout the years. On the left graph, on the top, we see that we have the adjusted net revenue without FIES, where the revenue should have grown 34% from 2018 to 2020. Below, we have the subdivision on how the revenue is taking into consideration FIES, of course. FIES represented 26% in 2018, and now it represents 11% in 2020. The two big vectors for growth over the last years, which is digital learning and the premium.
We have digital from 14% to 24% and premium from 8% to 15%. On campus, when you exclude FIES, it is relatively stable in terms of participation all throughout the last two years. On the right, looking at the year and the semester, once again, I think that this is the last time that we have an impact that is relevant of the court decisions. In the year, we have BRL 218 million related to discounts and laws and court decisions. When we compare the evolution of the revenue of 2019 to 2020, adjusting to these court decisions, we would have had a growth of 14%. This is because of the third lever for growth, which is M&A, almost BRL 500 million of revenue. On slide nine, talking about costs and expenses. We can see, without looking at M&As, they really distort the numbers year on year.
In the fourth quarter, specifically, when you look at cost, and since COVID, there were negotiations of debt of students and other issues, it impacted the bad debt, PDD in Portuguese. Here you can see the impact in the discounts. To facilitate the lines, we summed both bad debt and discount, and we saw the global cost. Here, our cost grew, as you can see, 26% up ahead, but below, we see the evolution of the bad debt plus the discount. It is 30% in the consolidated, but here we have the acquisition. When we eliminate the acquisitions, we see one part. Of course, we are changing the mix. The drop of the FIES is still relevant in 2020 comparing to 2019.
We also have the effects of COVID-19, and there was more delays in payments in the second quarter and less renewal in the first semester from the first to the second semester. Now we can see the impacts in terms of bad debt and discounts. When we compare in percentage points, bad debt plus discounts, we have an increase of 2 percentage points, from 12%- 14% adjusted in 2020. Getting into the non-recurring effects details. This is what happened all throughout the year. It is clear that in the second and the third quarter, but also focusing on the fourth quarter, the BRL 160 million that we understand that are not recurring effects, BRL 84 million is the discounts granted by law and court decisions. From this year on, we do not have this anymore, or very specific, very small impacts.
The other one, we were reviewing our legal premises in the second quarter, but there was still a part missing, which is labor issues that we reviewed, and this is also over. We got another BRL 20 million. The other big block, which is related to our growth with operational improvement, which is the cost with organizational restructuring, and in this quarter was BRL 21 million. Part of this is related to the restructuring of our acquired companies and the expenses with M&A and integration. Basically, the cost with integration, where in the fourth quarter in December, we had adjusted our systems, everything is integrated, and we can affirm that this is a single company that is working in a uniform way. Slide 11.
We see in a more deep analysis of the non-recurring effects, the two big ones of this year are over, which is the review of several legal proceedings and the FIES renewals. We had a drop of BRL 16 million in the second quarter, as well as the legal proceedings are also done. Also the effects of the pandemic. I cannot affirm that it's 100% over, but now it's going to be marginal. We can see that this is getting over. Of the others, you can see other non-recurrent that are dropping year-on-year, and the two last lines that I commented on the previous slides. We have an improvement in the operational efficiency and growth, which is M&A. In the operational efficiency, what is expected is that the cost will drop year-on-year, and this will be translated into gains. Where is the gain?
Here down below where we left from a cost of personnel on campus here, and we can compare without M&A of 3,240 to 2,877, a drop of 11% nominal. But it would be a drop of almost 20% since 2018 in the main line of cost of the company. On M&A, we consider that we are going to be adding value with more M&As. Now slide 12, EBITDA. Our adjusted EBITDA. Slight drop, 0.7%. I already commented the impacts of the non-recurrent. In this quarter, we had a drop of 5%. The main offender was the bad debt plus discounts, PDD, Portuguese. We had more difficulty negotiating this, that translated into this drop. This bad debt is basically due to the non-renewal that happened in the first quarter to the second quarter, that is impacting. We're seeing the impacts right now. Slide 13.
You can see net income and dividends. Adjusted net income IFRS should be BRL 567 million, BRL 20 million is a fee that we paid. We were analyzing an asset, and a bullet point that we want to highlight is that here below the 567, the 624, which is the adjusted net income without the IFRS in 2016. Since we are removing the depreciation of rentals and the income and the interest rates, and the math is not so precise with the interest rates. These are nominal interest rates, and they're not indexed to the contracts. They end up generating a distortion. They show a worsening of the income in the first years and an improvement over the long term if I do not take into consideration the IFRS. So if it shows that our net revenue should be better. The reported income, you can see here.
The proposal, the reported net income is BRL 98 million. The idea is to pay BRL 142 million in the payment of dividends because we generated cash. We can see in the next slide our cash flow generation was very strong, and we are very comfortable with everything that we are doing. The proposal is to pay BRL 142 million in payment of dividends. In slide 14, talking about cash flow. Our operational cash flow year-on-year grew 40%, as you can see. In the quarter is more than 70%. Comparing to the EBITDA that is reported, which is well below that net and the net debt over the adjusted EBITDA 1.4x . This is in line with the history of the cash flow generation of the company.
Even in a year that is extremely challenging, we can preserve the financial health of the company in such a way that even trying to compare how we were generating cash and the impact with the competition, our generation of cash flow for the last three years, and now we stop over the last nine months of 2020. Not everybody had published the results. Here we have the sum of the three main competition that we have. We finished the year with a very healthy position, BRL 1.6 billion in cash position, and although that we can see once again net debt over adjusted EBITDA 1.4x . Once again, the investment issue, where this year the investment allocated for the digital transformation in IT in general represented almost 40% of the total investment, which is where we really trust that we need to invest.
This is where we are going to get the growth and the improvement of our indicators. We also highlighted the expansion in medicine, almost 10% of investment of this year, which is a lever that Parente mentioned that we are still going to see a maturing of this business unit of almost a decade. Next slide. You can see the recent acquisitions capturing the synergies with an expected schedule at Adtalem. We had captured already BRL 71 million, and we already saved BRL 70 million from May to December.
This is the value that will be generated in an annualized way, and this was already captured. We are aligned with what we had planned and displayed. In Athenas, we captured BRL 7 million, and you can see BRL 60 million and BRL 80 million until 2027. Remember that Athenas, the big gains are from the seats of medicine that today we understand that we will still obtain and then mature, bringing gains for the company all throughout many years. I give the floor to Parente once again.
Once again, thank you, Haiama. On the right here, you can see the predictions, the prospectus for the future. The subsequent event is that we have the debt issuance and BRL 1.85 billion, the six issuance of simple debentures maturing the five years after the issuance date. This leaves us with a lot of flexibility, and we have a very robust short term. Second one is, once again, the authorization for the 150 medicine seats that the Ministry of Education already authorized. On the left, we see up ahead the perspective of the business, the digital. We are moving on very well.
75% of the DL centers are still not matured. We had a strong growth over the last three years, and we had a great expansion in the centers. We have an expectation for the increase in the base. The capture is done very well, the intake, and the prices, as we can see, we see a light fall in this semester, former one, and the expectation is to get to 2,000 centers in 2021, over 2,500 centers in 2022. We are still accelerating our business. When we look at the premium, once again, we have the details in the annex. The expectation is to increase the medicine base in 2021. We still have seven units maturing. We still have not graduated the first class. We have five new units, three that will start the first semester, and two processes for increase in seats.
This is what let us talk about the growth in over 6,000 students at the end of the year. Strong H1 intake, medicine as well as IBMEC volume and price. Great perspective for this year. On campus, the NOR on VS impact is a fraction of last year. We see, as Haiama has mentioned, this year, we are looking at a very small impact. We have had a challenging H1 intake in this semester. We still have [inaudible] up ahead. We have done a lot of investigations, and on H2, we are going to have a good perspective. A lot of the students are, we are doing research and the intake of this first semester, we still have a lot of challenges in the market as a whole, and we can feel that.
Perspective of a price that is stable, that we are not reducing the price, and we can see. Once we have a strong intake, we can see the perspective of having a margin recomposition starting from 2022, as Haiama has mentioned. We have the synergies with the recent acquisitions impacting the results. On campus, the perspective is to, in the worst-case scenario, we believe that we still have, in the first quarter, a challenge, but up ahead, the perspective is very good. In general, as Haiama mentioned, the marginal effects of laws and court decisions in Q1 are, once again, marginal. We have a good M&A perspective, and we are looking at a positive re-enrollment. There has been a decrease in dropout, and we have a great agenda. The digital transformation has a good impact in the NPS and retention.
We believe that this is the year that the digital and premium will reach 50% of NOR in 2021. We have a margin that is superior to our average margin. We can see the lifelong gaining traction in all views. We can see that the first quarter is still challenging. However, we will have a potential for an improvement in the next year. We have to turn the page and move towards a future that we believe that is going to be a strong growth. Thank you very much. Now we can do the Q&A session. Marcelo, can you help me?
Okay.
Ladies and gentlemen, we will have the Q&A session. If you want to ask your question, please type asterisk nine on your telephone. We have a few questions. The first question will be from Marcelo Santos from JPMorgan. Marcelo.
Hello, everyone. Thank you for accepting my question. First question, the mandatory discounts that will be marginal losses in the first quarter, what do you believe is your capacity of, in fact, charging the full ticket without the discounts? Because if people are paying less for a time, the economic situation is difficult, I imagine that you will have to accommodate a smaller discount, or will you think that this is the basic ticket that should be charged, the discounted ticket? Will that have an impact? I just wanted to discuss that issue. Second point, M&A. I know that you've mentioned that you're focused on M&A, and you have the cash for that. Were you thinking about small deals, or do you have a big deal in the pipeline? Those are my questions.
Thank you, Marcelo. Haiama here. Talking about discounts. It's good that you asked that because maybe we really didn't pass on the message that is clear during the presentation. Our re-enrollment is doing very well. No discount that is mandatory. The value that is readjusted and are normal for the monthly fees. What is interesting when you compare year-on-year, the amount of credits that has been hired, that has been bought by the students, is aligned. It's the time that is before the pandemic, similar to that. We are very comfortable. This is translated, of course, we discussed that all throughout the presentation, is that we have a better cash flow than last year and better than 2019 because we didn't have Adtalem. This is a reflection of something that was temporary and disappeared. The problem went away.
Maybe we didn't make it very clear, but thank you very much for asking. In regards to the M&As. We have seen a lot of sizes. Of course, the larger ones are more complex. We cannot affirm that we will invest. What can we tell you is that in the medium and small size, we have more, but the trend is the one that we already mentioned since the third quarter, which is when people have already gone through the total desperation of the effect of the pandemic as a whole, some people found out that post-pandemic, the FIES is losing relevance. Two years of economic crisis that is very strong in 2015 and 2016, we cannot withhold anymore. We are working since then. We are bearing the weight of several institutions actually want to talk to us.
This is on campus, where we believe that we will see the whole. We can couple the digital learning, so it's a global analysis. We looked at other things that can also accelerate everything that you are talking about, the levers of growth, lifelong, whether if it's premium. We believe that it seems that 2021 and 2022, these will be very interesting years for M&As.
More details. Me and Haiama, we look at the details, and the revenue stature without FIES versus the previous years. The numbers are much larger in 2020 and much larger than in 2019, without considering Adtalem.
Thank you, Parente. Thank you, Haiama.
Next question will be from Vinicius Ribeiro from UBS.
Hello, everyone. Thank you. Thank you for the breakdown of the margins. I believe it helped a lot. I wanted to talk about digital learning. The perspective for growth is very aggressive. I want to understand, after 2022, when you get your 2,500 centers, are you going to mature these centers, or is there more expansions up ahead? Second question on campus. We can see that all the education segments are being pressured by changes in online classes due to the pandemic.
What is the strategy for the second semester to make this revenue be positive and for the intake to be great? How do you see this dynamic and the students that were not captured by digital learning and that the competition couldn't capture as well? I want to understand, how do you see or how should we see this on-campus segment from the second semester of 2021? Thank you very much.
Thank you, Vinicius, for the question. I'm going to let Aroldo and the others answer.
Hello. Aroldo. It's a good question. We have to think on the future. Basically, the amount of centers depends on our capacity of what we believe that these are points of intake that are local points of intake. They're not points of study. We review for each brand, for each of the 5,000 cities in Brazil, how many centers fit in each, and we can see that as we develop the centers. It's important to mention that the structure is very lightweight and it's part of our business structure. Our first version that was already implemented in the strategic plan of last year, which was to achieve 1,900 centers between 2019 and 2020, and we anticipated that 2023 to 2021, the numbers of 2,500, and we might see even more as we are actually leaving the centers as a center for intake and more on the online side.
As everything becomes more digital, it's possible to reach more cities, and therefore, the amount of centers might increase a lot. So light structure, light infrastructure. We don't have to graduate the students and to continue. We will get between 1,900 and 2,100 up until 2023. Yes. We have very old numbers, and it was half of where we are today, the prediction. We are extrapolating that what was to be done by 2023 is already achieved by the end of the year.
This is our day-to-day, and we want to become ever more agile and ever more digital. In 2017, we did a plan with half of the students and half of the revenue. Last year, we would get to 1,900 centers in 2023, and we're getting to 2021. We are being surprised by our own growth. Yes, we will have over 200,000 students. Last year, 200,000 for an EBITDA with the criteria for adjustment. This is the number that we're predicting since 2017. In 2019, we reviewed, and now we are reaching the numbers.
Vinicius, this is Adriano. In regards to on-campus, we need to highlight that we still have for this year a very strong work to capture the acquired synergies, not only when we talk about costs, but also operational efficiencies from the sales force and for the intake. Here is a great potential to be worked. We are focused on that. With the base information, we have to highlight the point by Parente and Haiama. Our renewal is doing very well. We can keep a renewal for this first semester that is very much in line with the best scenario possible with an average ticket without the court decisions.
This gives us a great perspective for an improvement, even the middle of the year, still taking into consideration that the pandemic is very similar to the previous semester and without the readjustments. The renewal is more comfortable with this behavior all throughout the year. The intake, we can see a trend of delaying the decision of the first-year student to get into higher education. We had publications in the market, but we have our own research that points that about half of our target audience is leaving the decision until after the pandemic, and then we can talk about this thereafter. This is very important for us, but also the expansion for the second semester. The expectation is to be able to capture part of this public that is interested in higher education. Marcelo, do you want to comment?
Yes. Just to complement, M&As. It was a very important investment on the part of the company of everything that is a digital channel. Our intake, everything that we do as marketing online and media. This is something that after we have the publication of the official note, we have two types of audience. The one that we imagine that naturally will start in the second semester, but we will strongly work to try and still bring them on board in the cycle. How do we do this? All of the digitalization of the intake process that happened in the end of last year, it decreased the intake of the students. So we saw much better rates for the conversion in our website and the submission of documentation.
It is a very specific process for the sector, and it is accelerated, and it makes the capturing of the students much easier, the intake. We will see this more so from the 29th onwards. We believe that these tools will help the intake, and then we will capture the numbers and see this audience in the second semester. Now, the other point is that our brands are national, so we end up gaining a lot of visibility when we go to the market using all of the brands for this semester and the next one. This facilitates the intake in all modes.
Thank you very much. Thank you for the answer.
Thank you, Vinicius.
Next question will be from Fred Mendes of Bradesco.
Good morning. I have two questions. First, thinking about CapEx, mainly in digital transformation that Haiama spoke very quickly. What is the definition for you to define the CapEx? Also, if you can focus and give us more for the bad debt in 2021, if you can maybe give us more details.
Thank you, Fred. CapEx grew a lot from 2019 to 2020. Here we have the full content, which is a different standard. It is something that we are doing to improve the quality of all the segments, all the brands. A part is here, but it is the smaller part. The big chunk here is all the investments that we are doing since doing an update of our entire technology, hardware, and software to allow us to provide new leaps in the use of technology for all of our segments. This is where we believe that we will continue to expand and new developments.
Squads that are specific to develop, for example, an improvement in the way to renew intake. So literally, these are investments that we are doing as of now, and they will bear fruit up ahead. These are investments that are pluriannual. We started last year, the year before, and we are still doing investments this year and the next one until we can conclude it. Then the consequence will be to have a line in our DRE, and it can be a cost of maintenance itself. Now, do you want something specific?
No, perfect. I just wanted to understand how do you classify improvements. So how would you classify.
No. Here we redid our entire CapEx. We are changing the systems so we can be more modern, lightweight. We have a data lake, and we are doing a lot of things to make the company more updated and allow for different navigations in the future. In that debt, as I mentioned, the percentage was from 12% to 14%, and a part of that is because of the pandemic, and a part of that is the mix that FIES is more than we had a boom.
We have demand of offer, and we have FIES, but ex-FIES. We are suffering with the tickets over the last few years, and we had a very good time of the sector. But FIES, we had a different advantage. When we change the revenue, this impacts the percentage points. When we see that we will have stabilization, the question is more difficult to answer. In what you believe, what will be the long term? Why do I say this?
What is happening from the structural standpoint of the company? The premium segment, as we mentioned, we have a higher growth for the next decade. Bad debt, PDD in Portuguese, this segment has generated, I don't know, 12%, 13%. Now it's 15%. You try to extrapolate how can PDD grow. It will have a big weight in the bad debt of the company. The other one that is a consequence of these investments, whether if it's content and the way that I deliver this and the investment, is retention. More than reducing the investment that we need for the student, you decrease the bad debt, the PDD that you will have all through other years. So how can you have that stability over time? How do you project the growth of each of the business units over the next few years?
You have to take into account the dynamic that during the pandemic, we improved on a few percentage points for renewal for digital learning. On campus, we had more bad debt in the first-year students than the last-year students that did well, and this was aligned with the situation itself of the pandemic. For 2021, what do I believe that we will have? Something between the 12% and the 14%. If I can guess on the short term, it would be that interval, but the trend on the medium long term, if everything that we believe that we're doing will bear fruit in the future, while premium is less, we trust more today on the mix, but the trend is to have a drop in the bad debt.
Thank you. Thank you very much, Haiama.
Very well.
Next question will be from Maurício from Credit Suisse. The floor is yours.
Thank you. Good morning to everyone. I think that everybody already talked about the more important strategies of the business. It might seem like a mundane question, but we see that at the base cost with expenses, with the acquisitions, the base of depreciation and amortization grew disproportionately. If you can comment why that happened, why do we have that effect in 2020? Thank you.
Maurício, apart because of amortization that we have the M&As that we do, but another part is cost related on how the IFRS, the leasing is applied. The curves are not the same, unfortunately. That's why we highlighted in the net revenue the discrepancies between the net revenue IFRS and the non-IFRS revenue.
Just so you can know of what would be our number, per se, our rental cost leasing, which in 2019 was BRL 250, if I am not wrong, rent expenses, and real estate in general. We see that it grew to BRL 280 with Estácio. With Adtalem alongside, it would be everything BRL 300 and some. Low BRL 300s. There is a lot of IFRS that contaminates this overview. That is why in the way that we wanted to show in the presentation, we excluded, there is a specific part, and I do not like to look at it this way because it distorts things. I need to do a VPL, a prefixed rate that is nominal, that we hired with an index to inflation, and everything is too contaminated by these oscillations. But we have the non-recurring effects.
Well, thank you. I think that nobody likes the uncertainty, the effects that non-recurring effects said is not very clear, of course. But there is an amortization of the liabilities of these larger acquisitions.
Yes.
Thank you.
Now we will have Leandro from Citibank.
Good morning. Hello, everyone. The questions were asked, this is a follow-up and a comment on the capture. I wanted to understand, onsite, in this cycle, what is different in the commercial strategy? What are you doing that is different to navigate this environment? Here, talking about discounts, adjustments in the marketing strategy, maybe. In that context, this scenario, with all the challenges, what is different in this cycle? What are you doing in that sense? Thank you.
Thank you, Leandro. Marcelo. Leandro, thank you for the question. We have launched on February 22nd, a program that is called [inaudible], which is focused on Estácio. Basically here, we are providing two benefits for the student. First, a payout in the semester of three installments of BRL 49. We released January, February, and March. We gave them to the student. These three payments were BRL 49, and when they renew, that they should do in July, they receive the BRL 147 back as a discount for the renewal. We got a strong media campaign from February 22nd.
We had a good, positive feedback in all models, not only on campus. This is a program that we are controlling in detail to be able to provide this to the correct students, but we had a good impact in the intake of all models. We are working with this campaign and waiting, as we just commented, the results of the [inaudible] examination.
Quick follow-up then. I think that we had a lot of agility and we have a good domain of the intake. Before the consulting companies were talking about the delay, we felt that this is a strong possibility. What we have done, and asked what people would need, the answer was, well, can you do it for free? We said, no, we cannot do it for free. There's no possibility of doing it for free because you do not know if you have the student, let's just say, as a positive intake or not. The campaign has a brilliant communication behind it, and the student is paying for the three full installments. There's a lot of competition that they say foreign exemption, but 70% off discount, and they are much more expensive than [inaudible].
In the end, when you're giving exemption plus another percentage, the value that you're charging in the semester is one or two full monthly fees. We had great success. We had a very important impact here, and we trust in this quarter. It doesn't mean that there will not be a drop in the on-campus. There will be a drop on the on-campus. The premium is doing well. The digital learning is better than the previous year, and on-campus, yes, there is a drop versus the previous year, which is important.
Thank you. It's very clear. Just a quick question. In [inaudible], that program, the difference in the ticket for what the person pays and it will be paid out throughout the course?
Yes. The difference will be diluted in the three installments.
Maybe in the second quarter of the next year, it will have a better impact, a bigger impact. Make sense?
No. It will be an impact right now. First and second quarter, depending on when the student gets in. It's just that usually it happen in the odd semester, and then we have the even semesters.
Okay. It's clear. Thank you very much.
Very well.
Next question will be from Thiago of Goldman Sachs.
Good morning. Hello. Thank you. We wanted to actually do two follow-ups. First, in the onsite, there is an upside of M&A that you didn't comment, and specifically with the evolution of COVID-19 in a very challenging scenario, do you see any need to review the structure of the company itself right now? This is the first question. The second, with digital learning, you mentioned an expansion in the number of centers. We want to understand how is the integration of Adtalem with that project of using their content to leverage the data capturing operations.
Hello, Thiago. I'm going to answer both. With the worsening of COVID-19, what we've seen is a lot of people suffering. Specifically people that were directly impacted, and the competition that did a big expansion, there was a reduction in the student base. I believe that there was a conference that actually is published. There is a comparison between the competition and ourselves, is that we shrink less on the on-campus than the competition. The number of students per on-campus, now we have the double than the competition. We are in a position that is comfortable. We do not have something very strongly planned for expansion in this year.
We have the natural sequence, so once you join two campuses you can make it just a single one. These are things that are not going to affect our portfolio, and we are very satisfied with what we have. We are very satisfied. We work with the semi on-campus, and this has really contributed with the results with this adaptation. There isn't. After so many crises, and we have the great margins and the EBITDA, it should improve, but then we have the solid position for that. We see M&A, answering the first question, as a relevant lever. We see that the competition is suffering, and they need help to continue with their legacy, and they need to associate with somebody stronger. We are having several talks on that idea with companies of all sizes. Now, the integration of Adtalem.
I believe that there is an issue that is very important, which is the integration of systems. We got it done by the end of the year, and this integration is the main point of concern. We have done it in a very competent way. A single company, as Haiama has said. We have our digital learning. We have all the materials. It's been three years that everything is a white blank page, so everything can be adapted. Not only we have a content that can be provided to every level of student, we have a structure that we have a student that comes from an elite school.
A lot of the things they already have seen it, but the students that come from a deficient base of learning, they will have a lot of things that will help them, and we will fill in the gaps in their training, and all of this can be adapted. We have a single mold, and IBMEC is very strong in this. This is where all of our brands, Athenas, has started. We can see that there is a quality, that the evolution, when you look at these small institutions that we acquired, it's very difficult. On average, we see that they have 3% online. We are always using digital learning as a lever.
With Aura, that we implemented, with that high-quality material also, it's 40% of the students that are using this, and an increase of NPS with the students shows that it's working very well, that our teaching system is working very well for all levels and all brands of our group. We are taking quality and profitability for all.
Thank you.
Now we close the Q&A session. Therefore, we return the floor to Eduardo Parente for the final thoughts. Eduardo, the floor is yours.
Once again, thank you very much. Thank you for being with us this morning. Thank you to all that invest in us, for your trustworthiness. It was a very difficult year. Nonetheless, I thank you, and I hope that I could provide the information that is relevant, and you can trust our robustness, and we will leave this very difficult moment for the market as a whole. We hope that we could provide you with the excitement and the perspectives that we have for the future. Thank you for your attention. Have a nice day.
Therefore, we close the earnings call of Yduqs. Thank you for your presence. Have a wonderful day.