Thank you for joining us for Afya's fourth quarter and full- year 2021 conference call. With me on the call today is our CEO, Virgílio Gibbon, and Luis André Blanco, our CFO. During today's presentation, our executives will make forward-looking statements. Forward-looking statements generally relate to future events or future financial or operating performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from those contemplated. Forward-looking statements in this presentation include, but are not limited to, the statements related to our business and financial performance, expectations and guidance for future periods, our expectations regarding our strategic product initiatives and their related benefits, and our expectations regarding the market, as well as the potential impact from COVID-19. These risks include those more fully described in our filings with the Securities and Exchange Commission.
The forward-looking statements in this presentation are based on the information available to us as of the date hereof. You should not rely on them as predictions of future events, and we disclaim any obligation to update any forward-looking statements, except as required by law. In addition, management may reference non-IFRS financial measures on this call. The non-IFRS financial measures are not intended to be considered in isolation or as a substitute of these results prepared in accordance with IFRS. We have provided a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures in this presentation. Let me now turn over the call to Virgílio Gibbon, Afya's CEO, starting with slide three.
Thanks everyone for joining us today on our last 2021 conference call. I am extremely proud to present another year of Afya showing strong results. Our performance in 2021 reflects the successful execution of our assertive strategy, the commitment of our team members, and the consistency of our business model, particularly during another year of a worldwide pandemic. During this call, I will run through three main topics. First, I will show where are we heading to on our business strategy for education and digital services. Second, the achievements and evolutions on the ESG side, an extremely relevant agenda here for us. Last but not least, our financial highlights and 2022 guidance demonstrated that Afya will continue to deliver a strong performance onwards.
Now moving to the next page, we can see how Afya has succeeded in its opportunities and yet has a great future ahead with the number of seats getting higher each quarter. The expansion of our offering in the undergrad business continues to grow stronger. So far, Afya has reached 2,759 seats for undergrad medical school with four new Mais Médicos units and 28 seats from Ji-Paraná, both to start operating in the second semester of 2022. This represents almost 20,000 students at maturity. Our pipeline for acquisition is fertile, and we still have the opportunity to expand more than 1,000 seats among our current campuses. The growth expectation for the digital strategy are no lower. By 2022, we expect to boost our market penetration and consolidate our offerings to B2B clients.
That will allow us to leverage our physician network, unlock new revenue streams, and create value for the healthcare chain. Our plan is to monetize the services by addressing the needs of the pharmaceutical industry, providers such as pharmacies and hospitals, and payers, the corporate market itself, by providing access and increasing demand and efficiency. The total addressable market for this strategy is BRL 24.4 billion segmented between those three players. Moving to slide number five, as we have promised at the beginning of the year, our ESG metrics were presented on an ongoing basis in each quarter, proving that our evolutions are consistent and that our ESG agenda is getting more and more robust as we have embedded the team in all we do inside Afya. Throughout the year, we have achieved a number of relevant goals. Number one, we signed the UN Global Compact.
Number two, we assumed a voluntary commitment to have at least 50% of women in our management position by 2030, along with the Women on Board certification. Number three, we disclosed our second annual ESG report with the most relevant information about the agenda. Number four, we announced that Sustainalytics, a leading ESG in corporate governance research firm, has rated Afya as a low-risk ESG risk rating company due to our low exposure and good policies and applied practices. Number five, as a reflection of our great results and actions that are being shown to the market, we won the Valor 1000 award as a best company in the education segment, and the Época NEGÓCIOS 360º award in two categories: best company in education segment and sustainability in the education segment. In the overall ranking of 118 companies in Brazil, we were in 13th place.
Number six, we are on 13 Brazilian companies to join the Bloomberg Gender-Equality Index, an index that aims to track the performance of public companies committed to transparency in gender data reporting. I'm very proud to say this is just the start on this direction. Now, moving to my last two slides on this presentation, I will show our financial highlights and our guidance for the entire year of 2022. We ended 2021 achieving our guidance. Adjusted net revenue increased 45% year-over-year, reaching BRL 1,753,000,000. Followed by an adjusted EBITDA growth of 34% year-over-year, reaching BRL 755 million with a margin of 43.1%. We also reported a cash position of BRL 749 million and a record adjusted operating cash flow generation of BRL 667 million, 71% higher than last year. We confirming our tripod of strong growth, profitability and high cash generation.
Moving now to the operational updates of the quarter. Our undergrad medical students reached more than 16,000 students, represent a 45% growth compared to the same period last year. Operating seats grew 31% also in the same period. On the digital service highlights, our net revenue grew 63% year-over-year, and our ecosystem reached 248,000 monthly active users, which represents more than 33% of the Brazilian market of physicians. Consistent growth, success in our digital services and ESG evolutions. This is how we are evolving and empowering our mission to become the reference in medical education and digital services, encouraging students and physicians to transform their ambitions into rewarding lifelong experience. We are proud of our business and what we have achieved so far, as well as what we are planning for the future.
The resilience and high predictability of our business model enable us to introduce our new guidance for the entire year of 2022. Take into account that successfully conclude acceptance of new medical students, ensuring 100% of occupancy in all medical schools and the recovery of continued education segment. Net revenue is expected to be between BRL 2.28 billion and BRL 2.36 billion. Adjusted EBITDA is expected to be between BRL 935 million and BRL 1.05 billion, excluding any acquisition that may be concluded after issue of the guidance. These figures is showing another strong year ahead and represents an incredible operational growth of more than three times when compared to Afya's results in 2019, when we became a public company almost three years ago. Now to detail all these financial results, I will turn the call to Luis Blanco, our CFO. Thank you.
Thank you, Virgílio, and good evening, everyone. Moving to slide 10 to discuss the financial highlights of the fourth quarter and full- year of 2021. It is with a lot of satisfaction that I presented another strong and consistent year of results for Afya. Since 2019, we've been seeing in all quarters a positive trend in our key metrics. Adjusted net revenues for the quarter was up 45% year-over-year to BRL 505 million, reflecting the maturations of medical seats, an increase in the average ticket of medical program, and consolidations of acquisitions of medical schools and digital service. For the year, the increase was also 45%, totaling BRL 1.753 billion.
It is important to mention that the adjustment of BRL 7.1 million in discounts in tuition fees in the fourth quarter, granted by individual and collective legal and public civil proceedings related to COVID-19 is mostly ceased in December due to the Supreme Court decision. Adjusted EBITDA for the quarter was up 26% year-over-year to BRL 195 million. For the year, adjusted EBITDA was BRL 755 million, an increase of 34%. For both periods, the adjusted EBITDA margin was below the reported margins of the last year. Mainly due to the consolidations of iClinic, Medicinae, Medical Harbour, Cliquefarma, Shosp and RX PRO, which reduced the digital margins and lower than expected MedCel results for the fourth quarter due to higher competitions along with lower performance from the continuing education segment. Adjusted net income for the quarter was BRL 99 million, slightly below the same period of the prior year.
For the year, net income increase was in line with 2020, totaling BRL 440 million. For both periods, adjusted net income results were mainly affected by an increase in financial expenses that was affected by a higher net debt position related to nine business combinations executed during 2021 that were partially funded by selling shareholders, in the case of Unigranrio, and partially funded by SoftBank transaction. Adjusted cash flow generation was record in the year, increasing over 70% year-over-year to BRL 666 million, which resulted in a cash conversions ratio of 101% compared to 76% in the same period of 2020. On the right side of the screen, we can also see bullet points that summarize other financial highlights. For the year, organic growth in adjusted net revenue for undergrad was almost 14%.
As Virgílio previously said, we have achieved the announced guidance for 2021, reaching BRL 1.752 billion and 43.1% adjusted EBITDA margin. This takes into account the successfully concluded acceptance of new medical students for the second half of 2021 and consolidations of the digital companies and medical school acquisitions, excluding RX PRO. Moving to slide 11 for discussions of key metrics by business unit. Starting with the undergrad programs. Our number of medical students grew 45.2%, reaching more than 16,000 students, with operating medical seats increasing 31% year-over-year to 2,481 operating seats. In terms of total tuition fees for the year, we have reached BRL 1.990 billion, up from BRL 1.237 billion from the prior year, an increase of 61%. Talking about revenue mix, 76% of these are derived from medical school students and 88% from health-related courses.
Medical school average ticket for the year was BRL 8,600, a 7% growth compared to BRL 8,100 ticket from the prior year. On the next page, I will present continuing education metrics. We saw a 32% decrease in continuing education net revenue from BRL 107 million- BRL 73 million, with a decrease of 24% in the number of students. The decrease was driven mainly by reductions in the student base, which has two main reasons.
Practical programs that are not being offered since the first semester of 2020 due to pandemic, and physician decision to postpone admission to specialization courses due to COVID-19 pandemic. Nevertheless, with the combinations of the opening of six new campuses in 2021 and expansion of the specialization portfolio, along with the rebound of the IPEMED admission process, the decrease in continued education segment reduced in the fourth quarter, and Afya expects better results during 2022.
Moving to slide 13, I will discuss the digital service operation metrics. On the first graphic in the slide, you can see our active paying users per pillar. Those are the active payers that generate revenue. Combining all active paying users in the year, we have reached a number of 165,000 paying users. Content and technology for medical education grew 66% year-over-year with a lower ticket and a different mix of products. Clinical management tools reported almost 18,000 payers and clinical decision software base has more than 125,000 payers. These results reflected an increase of 63% in digital service net revenue since last year, mainly to the consolidations of acquired digital companies and organic growth from Whitebook, which was partially offset by MedCel lower performance. The last graph on the page shows the monthly active users also per pillar.
Once again, combining all users, we have reached a number of almost 250,000 students and physicians all over Brazil. This number represented more than 33% of all medical students and physicians in Brazil, as Virgílio said before. Now moving to my last slide, I will discuss our cash and net debt position. Cash and cash equivalents at the end of the quarter were BRL 749 million, a decrease of 28% compared with the same period in the prior year.
At year-ends, net debt totaling BRL 1.4 billion compared with net debt of BRL 167 million at the end of 2020. This increase was mainly due to the closing of nine M&A transactions, partially offset by free cash flow generation. This ends our prepared remarks. In this opportunity, we would also like to invite all of you to our virtual Afya Investors and ESG Day, which will take place on April 7 at 9:00 A.M. in Eastern Time. I will now open the conference for Q&A session.
Good evening.
Good evening everyone. Marcelo, you may talk.
Hi, good evening. Thank you very much for the questions. I have two. The first, I wonder if you could comment a bit more on the higher competitiveness in the medical prep business. What kind of player is creating this higher competition? What are your plans to do about it? How should we think going forward? The second question is, what kind of ticket assumption is embedded in the guidance for 2022 for medical courses? These are the two questions. Thank you.
Hi, Marcelo. This is Virgílio. On the residence prep course arena, we saw at least 10 additional competitors coming to the market in 2021. Also the market was kind of impacted by all the residence exams schedule. Because of the pandemic, we have some exams that was postponed and all the decision to take the program also was impacted by this problem with the schedule planning. So we had a higher competitive landscape impacting the margins and also price. Also the demand was kind of postponed because of this disruption, the impact on schedule planning for the residence prep exams. On the second, about the guidance, Luis will debate.
Hi, Marcelo. Good evening. Talking about the tickets on the undergrads side of the business, we've put a readjustment of 7.5% in new students and existing students for 2022.
We have this increase in our tickets, and above that, we have the effect of the maturation of tickets that we have on the existing base as we are graduating students with lower tickets than the ones that are coming to the intake. These two effects together must have an increase in ticket in something about 10% or a little bit more than that.
Thank you.
Our next question comes from Vinicius.
Thank you.
Thank you, Marcelo. Our next question comes from Vinicius Figueiredo from Itaú BBA. Vinicius, you may go.
Good evening, everyone. Thanks for taking my question. My question is regarding your guidance for 2022. Trying to connect your sales for top line and EBITDA, we can see that even with the ongoing maturation of seats in 2022, healthy price dynamics margins should not expand substantially in the year, right? What is the main reason behind it? Is it because we should expect digital services increasing their participation in the revenue mix? If I may, a second question would be on digital services. From organic perspective, we saw a marginal year-over-year decrease in top line. If you could explore this performance, it would be great. Thanks.
Hi, Vinicius. In terms of organic growth for 2022, we are expecting the top line to move above 30%, considering the median of the guidance on our top line. More than 50% of this growth will be leveraged by the organic growth maturation and also price and tuition for 2022. On the digital services, yes, we are expecting an even higher growth coming from the digital services segment with lower margin. That was the reason that we may have some small decrease on our overall margin, considering education and also the digital service. Specific on the education side, on the undergrad business, we will have 12 months of Unigranrio and UNIFIPMoc. These two institutions, they are very representative on our total revenue coming from 2021 to 2022, and we are still extracting synergies from Unigranrio and leveraging their contribution margin.
Having said that, we'll have on BU1, on the undergrad business, still a very high margin, a kind of flat margin considering this effect. But as we have a higher contribution coming from digital services, that's the reason we are expecting a little bit, 1- 1.5 percentage points of margins year-over-year for the overall guidance for 2022.
If I may add, Vinicius, one important point that 2022 is the year that we are going to expand our B2B strategy. As you guys know, we need to structure all that. We need to hire more people, structure the process, build the products. We already have more than 20 contracts with the industry, considering education and services to the industry. So that's the first year of our strategy. We expect to spend money to build all that. That is one of the biggest reasons for margin decrease. But as Virgílio said, we have a flat margin coming from BU1.
Okay, Vinicius. Luis speaking right now to take your second questions regarding the organic growth in the digital segment in the fourth quarter. We need to remember that we've made six business combinations in the digital segment during 2021. So the comparison on the organic growth between the fourth quarter 2021 and the fourth quarter of 2020 is comparing just MedCel and PEBMED business. We have this pushback in the organic growth that was due to the MedCel business. We see the PEBMED's digital support system growing over 30%, and the pushback that we have on the fourth quarter was related fully on the MedCel business.
Okay, perfect. Very clear. Thanks Virgílio, Luis, and Renata.
Of course. Our next question comes from Vitor Tomita from Goldman Sachs. Vitor, you may go.
Hello, good evening all. Two questions from our side. Thanks for taking our questions. The first one, it's sort of a follow-up to Vinicius' question. Given all that, in your guidance, how much approximately organic growth are you assuming for the digital unit now that you have all the acquisitions together influencing the results? A second point here is how do you see continuing education intakes performing at this point, and how much growth are you assuming for this unit in guidance? Thank you.
Hi, Vitor.
You can do that.
Oh, okay. Hi, Vitor. Thank you for your question. It's Luis speaking. Regarding the embedded ex-acquisition organic growth inside of the digital segment, we are expecting a growth approximately of 50%, 50%, during 2022. Remember that we have these six business combinations that we have done during 2021. We compare this organic growth, we're going to expect this 50% growth year-over-year in terms of organic during the year.
Yeah.
This is just to add. This is on the top line.
Yeah.
This is on our net revenues. On the continuing education, the graduate progress from IPEMED, at the moment, we have something close to 40% above the same period last year. The intake process is running very strong, and we are already having enrolled most of the classes. It will be a very good news on the front on continuing education as we are allowed to start delivering the classes on a regular basis. It will be a positive flow during 2022.
Very clear. Thank you very much.
Of course. Just to remember, if you want to ask a question, raise your hand. The next question comes from Mauricio Cepeda from Credit Suisse. Mauricio, you may talk.
Hi, everyone. Hi, Virgílio, André. Thank you for the time. I have a question about competition as well. But instead of asking about the prep courses, let me go to the continuing education. We know that you had this kind of, let's say, circumstantial problem with the pandemics, but do you see an increase in the competition in continuing education as well, given that it seems to be a kind of an attractive niche in the sector? Secondly, when we see the tickets adjustments last year that were a little bit below inflation, what are the reasons behind that? Was that intentionally to maximize volumes? Do you see any market difficulties that could prevent better price adjustments? Thank you.
Hi, Cepeda. Thanks for both questions. On the continuing education competition, we are not seeing a tough market. It is actually on the other hand side. We change our prices. We launch many other programs. We also open new campuses to operate these specialization programs. We are seeing a very strong demand, remembering that our program is very practical, two or three-year program, a very high-value tuition. It is a huge opportunity here for us, and we are having a record student base coming from this continuing education operation. This is your first question. About the tickets, the inflation, I think it is important to understand how we set our prices for the following year. When we start making all the intake, the enrollment process for the following year, for 2022, as an example, we start in September. We had to define the tuition back in September 2021.
It was in the middle of the crisis. We didn't have this huge leverage from the inflation, from the price at that moment. We thought at that moment for the students that we already have enrolled in our student base, 7.5% would be something reasonable, considering that we are passed with the entire student base. What we are doing is that for the new students, we pushed the price a little bit over than 7.5%. We have some campuses, some programs that was almost 15% for the fresh students that were repositioning our product on that region. The combination on all of this, remember that we are graduating student with lower tickets. We have a new wave coming, a new cohort coming with 7.5% above, and the fresh students enrolling even above than 7.5%. That is our strategy of rise.
We have to define prices in September to start enrolling students in February, like now. What we are seeing for the following semesters, the inflation is reducing. We are expecting a lower inflation of one digit for the next 12 months. Then we can keep passing between 5% and 8% price for the student base in order to be a more smooth transition for this higher inflation period for the regular one that we most use with one single digit. That is where I think it is not how far we can pass inflation 10% every, but in order to be more smooth transition for a longer period that we can have 7.5% for the entire student base at least. For the following year, we also can adjust price in the same level, even considering that inflation will be lower than that.
Cepeda, I will use your question to go back to the residence prep competition point. One thing that I think that is important for you guys to understand is that we can see that the market is stable in terms of residencies in the market. The number of competitors in this market almost doubled. The kind of competitors that we are seeing are competitors that are focused in one kind of specialization. They have digital offerings that sometimes are less complex and needs less investments at what we have. With all that, lower tickets. That is the scenario of competition that we are facing. What we are doing, we are understanding our portfolio, understanding how we can make this portfolio more approachable for all the students.
I do not know if you guys saw it, but we acquired a company that is called Além da Medicina, and this company have digital influencers behind it and have a high penetration among students in Brazil. We are trying to make a better position in this digital marketing. Again, understanding how the offer should be, understanding who we need to be the face of the company for the students to have a more appealing marketing for them. We probably will have some news in the short period. Thank you for your question.
Thank you. Thank you for the clarity.
I see that Cepeda was the last question. If you still want to ask a question, please raise your hand. Before that, I would also like to highlight our Afya Investors and ESG Day next week. I hope that we can see you all. I just ask you all to register for the event. We have the link on our website. I see that we do not have any more questions. We are available if you want to do any follow-up. If anybody wants to talk to us, just send us an email in our investor relations email or contact. Thank you so much. Have a good night.