Afya(US:AFYA)2021-08-27 03:20Financial Data and Key Metrics Changes - Adjusted net revenue increased by 39% year-over-year, reaching R$382 million [8][17] - Adjusted EBITDA rose by 36% year-over-year to R$161 million, with an adjusted EBITDA margin of 42% [8][17] - Cash position stood at R$1.4 billion, reflecting a strong cash generation and a cash conversion rate of 104%, up 21 percentage points from the previous year [8][17] Business Line Data and Key Metrics Changes - Undergrad medical student enrollment grew by 47% year-over-year, reaching 13,400 students [9][20] - Average medical school tuition increased by over 5%, reaching R$8,598 [20] - Continuing education net revenues decreased by 33%, driven by a 27% lower student base [21] - Digital services reported a strong increase of 89% in net revenue, with active paying users reaching 148,000 [22] Market Data and Key Metrics Changes - The digital ecosystem reached 232,000 monthly active users, representing almost 40% of the Brazilian physician market [9][22] - The average monthly medical tuition fees derived from medical school increased to 80% of total tuition fees, up from 73% in the previous year [20] Company Strategy and Development Direction - The company focuses on M&A as a primary growth driver, successfully integrating acquisitions to enhance margins [10][11] - Plans to acquire at least 200 medical school seats per year starting in 2022, with a strong pipeline for future acquisitions [11] - The digital business strategy includes expanding product offerings across six pillars, with a focus on telemedicine and digital prescriptions [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving similar top-line growth in the second half of the year as seen in the first half [35] - Anticipated recovery in continuing medical education demand post-COVID, with new intakes expected to drive growth [36][66] - Management acknowledged the impact of inflation but plans to adjust tuition fees accordingly while embedding digital services into the curriculum [59] Other Important Information - The company released its annual sustainability report, committing to gender equality and establishing a Compensation and ESG Committee [14][15] - The company aims to achieve a 50% margin for new acquisitions within two years through synergies [32] Q&A Session Summary Question: What is the profitability of UNIFIPMoc? - Management indicated that UNIFIPMoc's performance aligns with expectations, operating at around 20%-25% EBITDA margin [27][28] Question: What are the growth perspectives for digital services and continuing education? - Management expects growth in digital services to continue, with a recovery in continuing education anticipated after October [35][36] Question: How will inflation affect pricing strategies? - The company plans to increase tuition fees above inflation, leveraging added value from digital services [59] Question: What is the margin comparison between digital services and medical education? - Digital services are expected to have lower margins than medical education, with a focus on increasing penetration and scale [51][52] Question: What is the status of the MVP for pharma? - The MVP projects are in early stages, focusing on market research rather than clinical research [54][56]