Afya Limited (Nasdaq: AFYA) (“Afya” or the
“Company”), the leading medical education group in Brazil, today
reported financial and operating results for the three and
nine-month periods ended September 30, 2020 (third quarter 2020,
3Q20 and 9M20, respectively). Financial results are expressed in
Brazilian Reais and are presented in accordance with International
Financial Reporting Standards (IFRS).
Third
Quarter 2020
Highlights
- Adjusted Net
Revenue in 3Q20, which includes the impact of R$3.9 million due to
mandatory temporary discounts in tuition fees related to COVID 19
on site classes restrictions, increased 51.6% year over year (YoY)
to R$313.3 million. Additionally, during the period the Company
recognized previously deferred revenue of R$14.4 million related to
the postponement of on-site activities due to COVID-19 to 3Q20 that
impacted first half results. Adjusted Net Revenue excluding
UniRedentor, UniSL and PEBMED, grew 15.7%, reaching R$239.1
million.
- Adjusted EBITDA
in 3Q20 increased 63.3% YoY reaching R$149.3 million, benefitting
from medical school maturation, successful M&As execution and
integration and the recognition of deferred revenue mentioned
above. Adjusted EBITDA margin of 47.6%, expanded 340 basis points
(bps). Adjusted EBITDA excluding UniRedentor, UniSL and PEBMED grew
31.9% reaching R$ 120.6 million, with Adjusted EBITDA margin of
50.4%.
- Adjusted Net
Income in 3Q20 of R$101.2 million was 46.7% higher than 3Q19.
Nine Months 2020
Highlights
- 9M20 Adjusted
Net Revenue of R$859.8 million, up 62.3% YoY. Excluding
UniRedentor, UniSL and PEBMED, 9M20 Adjusted Net Revenue increased
35.0% YoY reaching R$715.0 million.
- Adjusted EBITDA
through September 30, 2020 increased 76.7% YoY reaching R$408.1
million, with Adjusted EBITDA margin of 47.5%, expanding 390 bps.
Adjusted EBITDA excluding UniRedentor, UniSL and PEBMED increased
54.4% YoY, reaching R$356.5 million, with Adjusted EBITDA margin of
49.9%.
- Adjusted Net
Income in 9M20 of R$307.8 million was 98.2% higher than 9M19.
- Cash conversion
of 85.6% with a solid cash position of R$1.1 billion at
quarter-end.
- Total medical
students increased 49.8% YoY and operating seats were up 24.1%
Key Events
in the Quarter:
- At the end of
July, closing of PEBMED acquisition, an web and mobile app that
offers content and clinical decision applications aiming a better
performance of the healthcare professional, marking Afya’s entrance
into the digital health services.
- At the end of
August, the acquisitions of FCMPB - Faculdade Ciências Médicas da
Paraíba, adding 157 medical seats, and FESAR - Faculdade de Ensino
Superior da Amazônia Reunida, adding 120 medical seats. Both
transactions were closed in the beginning of November.
Subsequent Events in the
Quarter:
- Entrance into a
purchase agreement for the acquisition of UNIFIPMoc and Fip
Guanambi, in the states of Minas Gerais and Bahia,
adding another 160 medical seats.
- Entrance into a purchase agreement
for the acquisition of iClinic – leading practice management
software for physicians in Brazil, expanding Afya’s end-to-end
digital health services.
- Closing of
MedPhone acquisition - the number two medical App in Brazil behind
WhiteBook – a PEBMED company.
- Authorization to
operate the undergraduate medicine course in Santa Inês in the
State of Maranhão, under Mais Médicos II program, adding 50 medical
seats.
- Loan with Banco
Itaú Unibanco S.A. in the amount of R$ 500 million adjusted by the
CDI rate plus an interest rate of 1.62% per year and is repayable
in three installments in October 2022, April 2023 and October
2023.
Table 1: Financial
Highlights |
|
|
|
|
|
|
|
|
|
|
|
|
For the three months period ended September
30, |
|
For the nine months period ended September
30, |
(in thousand of R$) |
2020 |
|
2020 Ex
Uniredentor,
UniSL and PEBMED |
2019 |
|
% Chg |
% Chg Ex
Uniredentor,
UniSL and PEBMED |
|
2020 |
|
2020 Ex
Uniredentor,
UniSL and PEBMED |
2019 |
|
% Chg |
% Chg Ex
Uniredentor,
UniSL and PEBMED |
(a) Net Revenue (1) |
309,410 |
|
236,413 |
|
206,713 |
|
49.7 |
% |
14.4 |
% |
|
855,925 |
|
712,224 |
|
529,784 |
|
61.6 |
% |
34.4 |
% |
(b)
Adjusted Net Revenue (1) (4) |
313,324 |
|
239,147 |
|
206,713 |
|
51.6 |
% |
15.7 |
% |
|
859,839 |
|
714,958 |
|
529,784 |
|
62.3 |
% |
35.0 |
% |
(c) Pro
forma Adjusted Net Revenue (1) (2) |
313,324 |
|
239,147 |
|
206,713 |
|
51.6 |
% |
15.7 |
% |
|
859,839 |
|
714,958 |
|
608,984 |
|
41.2 |
% |
17.4 |
% |
(d)
Adjusted EBITDA (3) |
149,270 |
|
120,624 |
|
91,424 |
|
63.3 |
% |
31.9 |
% |
|
408,066 |
|
356,490 |
|
230,915 |
|
76.7 |
% |
54.4 |
% |
(e) =
(d)/(b) Adjusted EBITDA Margin (2) |
47.6 |
% |
50.4 |
% |
44.2 |
% |
340 bps |
620 bps |
|
|
47.5 |
% |
49.9 |
% |
43.6 |
% |
390 bps |
|
630 bps |
|
(f) Pro
forma Adjusted EBITDA (1) (2) |
149,270 |
|
120,624 |
|
91,424 |
|
63.3 |
% |
31.9 |
% |
|
408,066 |
|
356,490 |
|
241,785 |
|
68.8 |
% |
47.4 |
% |
(g) =
(e)/(c) Pro forma Adjusted EBITDA Margin (1) (2) |
47.6 |
% |
50.4 |
% |
44.2 |
% |
340 bps |
620 bps |
|
|
47.5 |
% |
49.9 |
% |
39.7 |
% |
780 bps |
|
1020 bps |
|
(h)
Adjusted Net Income (3) |
101,224 |
|
81,469 |
|
68,997 |
|
46.7 |
% |
18.1 |
% |
|
307,793 |
|
272,122 |
|
155,290 |
|
98.2 |
% |
75.2 |
% |
|
1. Due to the
interruption of pratical classes during the pandemic R$ 14.4
million of 1H2020 revenue was recognized in 3Q2020. |
|
2. Includes the
pro-forma results of Medcel, IPEMED and FASA, as if the acquisition
had been consummated on January 1, 2019. |
3. See more
information on "Non-GAAP Financial Measures" (Item 7). |
4. Includes
mandatory discounts in tuition fees granted by state decrees and
individual and collective legal proceedings due COVID 19 on site
classes restriction. |
Message
from Management
Virgilio Gibbon,
Afya’s CEO, stated:
“I hope that you and your families are
continuing to stay safe and healthy. Although we are still in the
midst of a pandemic, we have been able to successfully adapt to and
navigate through the COVID related challenges and continue to
deliver solid financial results. Our performance this quarter
reflects the resilience of our students, faculty and team members.
From the start of this pandemic, we had to adapt with the speed and
agility needed to stay focused on providing the high-quality
educational experience that our students had come to expect from us
while at the same time executing on our long-term strategic plan.
During the quarter, we strategically enhanced our business and
completed several acquisitions to support our platform for future
growth and to solidify our market position.
I am pleased to report third quarter results,
which were in line with expectations and the guidance we had
provided. Earlier in the year, we had pivoted to leverage our
online and virtual technology capabilities and adjust offerings for
the Brazilian medical ecosystem. I am pleased that during the past
quarter, across our medical schools, on site clinical classes are
back. In turn, we were able to deliver H1 postponed classes and
recognize the deferred revenue in the quarter. Additionally, our
medical school maturation, successful integrations and execution,
contributed to a 63% year over year increase in Adjusted EBITDA.
Our liquidity was another highlight with a strong balance sheet to
support acquisitions. We ended the quarter with R$1.1 billion in
cash.
Even during challenging times, we were able to
execute our strategy. We acquired FCMPB and FESAR adding 277
medical seats during the quarter. Afya’s total medical students
reached 9,567, a 50% increase over the same period of the prior
year, with operating seats increasing 24% and approved seats 19%
higher. Subsequent to quarter-end we announced the acquisition of
UNIFIPMoc and Fip Guanambi, located in the states of Minas
Gerais and Bahia, adding another 160 medical seats and
putting us at 85% of our IPO three-year goal of 1,000 seats as a
result of the 8 acquisitions accomplished since we become public
last year. Importantly, our team continues to do an amazing job in
integrating the acquired companies and generating synergies. The
medical school industry remains highly fragmented, and we believe
that the current environment is hastening the trends that favor
larger, better capitalized companies. In turn, we have been very
active in recent months with acquiring companies, pipeline
development and continue to engage with a number of attractive
targets in our core markets.
At the same time, we remain committed to
delivering innovation to our students, physicians and other health
care professionals. COVID-19 has significantly accelerated demand
for online/digital solutions and has sped up our strategies as
well, including our move into digital. When we identified the
critical need to find a virtual solution for our students, faculty
and other health care professionals, we acted quickly and made our
first acquisition in this area – PEBMED. We are continuously
looking for ways to enhance our product and service offerings and
in October we acquired iClinic, a practice management software
company which includes services such as electronic medical records,
clinical management system, telemedicine and a complete physicians’
marketplace that connects doctors and patients to schedule
consultations. And, subsequent to quarter-end, we announced the
acquisition of MedPhone, the number two medical App in Brazil
behind WhiteBook – a PEBMED company. The integration of MedPhone’s
clinical decision software with PEBMED will create significant
synergy and allow us to offer both products through the same
platform. Importantly, the founders of these acquired companies
will join Afya’s management team and will be an integral part of
the team driving our growth in the healthtech services.
With these three acquisitions, Afya is taking
another step to become the one stop shop for physicians
in Brazil. Along with medical and health education courses and
a clinical decisions app, we enter in a new segment that can help
physicians manage their clinics and provide a better service to
their patients. To date, we have over 200,000 health care
professionals who use PEBMED, Medphone and iClinic. There are
500,000 doctors in Brazil, and our goal is to serve them all within
our ecosystem.
The investments that we have made in our
technology platform enabled us to ensure that we were supporting
our students, faculty and other health care professionals with what
is so important to them, community and ease of access to critical
data and information which is more critical now than ever and is
also a key lever for both member acquisition and retention. We are
seeing positive traction from our digital solutions. Additionally,
our investments in digital are opening new business and revenue
opportunities for us. Further, we expect demand for telehealth
services to remain elevated over the long-term. As such, we are
focused on further developing our existing digital capabilities to
ensure the continued success of our students and other health care
professionals. The iClinic acquisition was transformational for us,
and we are still actively looking for other digital health
transactions to strengthen Afya’s position in the market.
I am proud to share with you that we have just
refreshed our brand. After entering in all this new services
offerings, we are the only complete medical education platform
serving every stage of the doctor's career providing solutions and
methodologies for a personalized experience. And when company
awareness grows, its brand also does. We launched our new logo that
reflects our DNA and will support gradually every service brand and
local medical education institutions.
I am also very pleased to share that Afya was
ranked as the winner in the Education sector in the Época Negócios
360 survey. This award, which has been held annually for 7 years,
is one of the most significant in the Communications industry and
recognizes companies that are market leaders across six different
categories including Financials, Corporate Governance &
Sustainability, Vision and Human Resources. Considering that Afya
is a very young company, we are very honored to be already be
distinguished with this award. We also have won the Golden
Tombstone in the Equity category. This award is evaluated by IBEF
SP and recognizes Equity Operations in aspects such as complexity
of the transaction, innovation, pricing and others, and Afya’s
award was due to our successful IPO in 2019.
Our financial performance to date has kept us on
track for the year, and we are reaffirming our guidance at this
time. Our team has been able to rapidly adapt to a very dynamic
situation, and I sincerely appreciate their ongoing efforts to
deliver a quality education to our students. We have a multitude of
opportunities ahead of us to continuously create value by
delivering against our financial targets, strengthening our balance
sheet, implementing our strategic priorities including investments
in growth.
1. Second
Half 2020 Guidance
The Company is reaffirming its guidance for 2H20
which takes into account the successfully concluded medicine
students intake for the second half of 2020 and assuming a certain
degree of potential impacts of COVID-19 into the business during
the period.
The global Coronavirus outbreak is an
unprecedented situation. When considering Afya’s guidance for 2H20,
it is paramount that shareholders and the market in general be
advised that the COVID-19 pandemic is still active in Brazil, some
state authorities may maintain quarantines or “shelter in place”
status for a still undefined period of time and/or take other
actions not contemplated into the guidance, all of which are
outside of the Company’s control.
Considering the above factors, the guidance for 2H20 is defined
in the following table.
Guidance for 2H20 |
Important considerations |
Net Revenue is expected to be between
R$600 million –
R$640
million |
- Includes PEBMED starting on July 20, 2020.
- Includes R$14.4 million of Net Revenue related to the 1H20 that
was not recognized due to the postponement of practical classes
during the pandemic.
- Excludes any acquisition that may be concluded after the
issuance of the guidance. For instance does not include FCMPB and
FESAR.
|
Adjusted EBITDA margin is expected to be between
45.5-47.0% |
- Includes PEBMED starting on July 20, 2020.
- Includes R$14.4 million of Net Revenue related to the 1H20 that
was not recognized due to the postponement of practical classes
during the pandemic.
- Excludes any acquisition that may be concluded after the
issuance of the guidance. For instance does not include FCMPB and
FESAR.
- Includes the impact of the adoption of IFRS 16.
|
2. Overview of
3Q20
Operational Review
Afya is the only company offering technological
solutions to support physicians across every stage of the medical
career, from undergraduate students in its medical school years
through medical residency preparatory courses, medical
specialization programs and continuing medical education. Since the
PEBMED acquisition, Afya has entered into the digital health
services, providing content and clinical decision applications.
The Company operates two distinct business
units. The first (Business Unit 1 or BU1), is
comprised of Undergraduate – medical schools, other health care
programs and ex-health degrees. Revenue is generated from the
monthly tuition fees the Company charges students enrolled in the
undergraduate programs. The Company also offers Residency
Preparatory, Specialization Programs and Digital Health Services
(Business Unit 2 or BU2). Revenue is comprised of
fees from these programs and other revenues from digital services
offered.
Table 2: Key Revenue
Drivers |
Nine months ended September 30, |
|
2020 |
|
2019 |
|
% Chg |
Business Unit 1: Educational Services Segment
(1) |
|
|
|
|
|
MEDICAL SCHOOL |
|
|
|
|
|
Approved Seats (2) |
1,866 |
|
1,572 |
|
18.7 |
% |
Operating Seats |
1,516 |
|
1,222 |
|
24.1 |
% |
Total
Students |
9,567 |
|
6,388 |
|
49.8 |
% |
Total Students (ex-UniSL and ex- Uniredentor) |
7,667 |
|
6,388 |
|
20.0 |
% |
Tuition Fees (ex- UniSL
and ex- Uniredentor -
R$MM) |
555,705 |
|
394,621 |
|
40.8 |
% |
Tuition Fees (Total - R$MM) |
648,065 |
|
394,621 |
|
64.2 |
% |
Medical School Avg, Ticket (ex-
UniSL and ex-
Uniredentor - R$/month) |
8,053 |
|
6,864 |
|
17.3 |
% |
UNDERGRADUATE HEALTH SCIENCE |
|
|
|
|
|
Total
Students |
10,768 |
|
6,494 |
|
65.8 |
% |
Total Students (ex-UniSL and ex- Uniredentor) |
5,186 |
|
6,494 |
|
-20.1 |
% |
Tuition Fees (ex- UniSL
and ex- Uniredentor -
R$MM) |
76,462 |
|
75,827 |
|
0.8 |
% |
Tuition Fees (Total - R$MM) |
110,447 |
|
75,827 |
|
45.7 |
% |
OTHER UNDERGRADUATE |
|
|
|
|
|
Total
Students |
12,689 |
|
10,878 |
|
16.6 |
% |
Total Students (ex-UniSL and ex- Uniredentor) |
6,303 |
|
10,878 |
|
-42.1 |
% |
Tuition Fees (ex- UniSL
and ex- Uniredentor -
R$MM) |
84,215 |
|
104,673 |
|
-19.5 |
% |
Tuition Fees (Total - R$MM) |
124,919 |
|
104,673 |
|
19.3 |
% |
Business Unit 2: Prep Courses & CME, Medical
Specialization and Digital Health Services |
|
|
|
Active Paying Students |
|
|
|
|
|
Prep
Courses & CME - B2C |
11,684 |
|
9,854 |
|
18.6 |
% |
Prep
Courses & CME - B2B |
2,154 |
|
1,291 |
|
66.8 |
% |
Medical Specialization & Others |
4,181 |
|
1,803 |
|
131.9 |
% |
Medical
Specialization & Others (ex-Uniredentor) |
2,026 |
|
1,803 |
|
12.4 |
% |
PEBMED
Active Subscribers |
95,099 |
|
- |
|
- |
|
Revenue from courses (ex-
Uniredentor and PEBMED - R$MM)
(3) |
125,569 |
|
56,033 |
|
124.1 |
% |
Revenue from courses (Total - R$MM) (3) |
139,276 |
|
56,033 |
|
148.6 |
% |
|
|
|
|
|
|
1. Uniredentor
average tuition fee for medical school in 9M2020 was R$ 9,625 and
for UniSl was R$7,010. |
2. This number
does not includes FCMPB and FESAR that had the closing of the
operation in November, 2020 and contribute 277 seats to Afya. |
3. As Medcel and
Ipemed were acquired on March 31, 2019 and on May 9, 2019
respectively, revenue from courses for BU2 were not accounted for
in 1Q19. The number of students is disclosed to contribute with
investors analysis. |
Along with the active paying students, 10,052
medical students from public and private medical schools are still
accessing the Company’s Digital platform with a temporary free
access during the pandemic crisis.
MaU represents the number of unique individuals
that consumed Afya’s digital content in the last 30 days. Total
monthly active users (MaU) were 165,035 in the new PEBMED app.
Considering only the MaU of Medcel, the user base decreased 10.3%
due to COVID related courses that were offered in the 2Q20, which
temporarily inflated MaU in that quarter. Afya’s offers to its MaU
a significant amount of learning assets, comprised of e-books,
videos, podcasts and question/answer documents.
Table 3: Key
Operational Drivers for BU2 |
Third Quarter |
|
3Q20 |
2Q20 |
% Chg |
|
1Q20 |
Total Monthly Active Users (MaU) - Medcel |
18,322 |
20,420 |
-10.3 |
% |
|
16,008 |
Total
Monthly Active Users (MaU) - PEBMED |
165,035 |
- |
- |
|
|
- |
|
|
|
|
|
|
Seasonality
Afya’s two businesses are impacted by
seasonality but at different time periods. The first is associated
with the concentration of prep course revenues in the first and
fourth quarters of each year, when new content (books and e-books)
is delivered and the majority of the revenues are recognized. The
second is associated with the maturation of several medical
schools, which leads to a higher enrollment base in the second half
of each year. As a result, in a typical year, the first quarter is
normally the strongest. The fourth quarter is typically the second
strongest, followed by the third and second quarters, respectively.
Finally, the second half of the year is normally stronger than the
first half.
However, this year, due to the revenue
postponement caused by Covid crisis, the Company is expected to see
a smoother seasonality between the third and fourth quarters.
Revenue
Total Net Revenue for third quarter 2020 was
R$309.4 million, an increase of 49.7% over the same period of prior
year. Revenue in the quarter partially benefitted from the
recognition of revenue that had been deferred earlier in the year
due to the postponement of on-campus activities as some practical
educational activities having to be re-scheduled to 3Q20 due to
impacts from COVID-19. This amounted to R$14.4 million. Adjusted
Net Revenue in 3Q20, which includes the impact of R$3.9 million due
to temporary discounts in tuition fees granted by state decrees and
individual and collective legal proceedings related to COVID 19 was
R$313.3 million. Excluding UniSL, UniRedentor and PEBMED, Adjusted
Net Revenue in third quarter increased 15.7% YoY to R$239.1
million.
For the nine-months ended September 30, 2020
Total Net Revenue was R$855.9 million, which increased 61.6% over
the same period of last year. 9M20 Pro Forma Adjusted Net Revenue
was R$859.8 million. Excluding UniSL, UniRedentor and PEBMED, Pro
forma Adjusted Net Revenue in nine-months ended September 30, 2020
increased 17.4% YoY, reaching R$715.0 million.
Table 4: Revenue &
Revenue Mix |
|
|
|
|
|
|
|
|
|
|
|
(in thousand of R$) |
For the three months period ended September
30, |
|
For the nine months period ended September
30, |
|
2020 |
|
2020 Ex Uniredentor, UniSL
and PEBMED |
2019 |
|
% Chg |
% Chg Ex
Uniredentor,
UniSL and PEBMED |
|
2020 |
|
2020 Ex Uniredentor,UniSL
and PEBMED |
2019 |
|
% Chg |
% Chg Ex
Uniredentor,
UniSL and PEBMED |
Net
Revenue Mix |
|
|
|
|
|
|
|
|
|
|
|
Business Unit-1 |
266,382 |
|
197,487 |
176,113 |
|
51.3 |
% |
12.1 |
% |
|
718,268 |
|
586,655 |
477,631 |
|
50.4 |
% |
22.8 |
% |
Business Unit-2 |
43,670 |
|
38,926 |
32,662 |
|
33.7 |
% |
19.2 |
% |
|
139,276 |
|
125,569 |
56,033 |
|
148.6 |
% |
124.1 |
% |
Inter-segment transactions |
(642 |
) |
- |
(2,062 |
) |
- |
|
- |
|
|
(1,619 |
) |
- |
(3,880 |
) |
-58.3 |
% |
- |
|
Total Reported Net Revenue |
309,410 |
|
236,413 |
206,713 |
|
49.7 |
% |
14.4 |
% |
|
855,925 |
|
712,224 |
529,784 |
|
61.6 |
% |
34.4 |
% |
Total Adjusted Net Revenue ¹ |
313,324 |
|
239,147 |
206,713 |
|
51.6 |
% |
15.7 |
% |
|
859,839 |
|
714,958 |
529,784 |
|
62.3 |
% |
35.0 |
% |
Total Pro Forma Adjusted Net Revenue² |
309,410 |
|
239,147 |
206,713 |
|
49.7 |
% |
15.7 |
% |
|
859,839 |
|
714,958 |
608,984 |
|
41.2 |
% |
17.4 |
% |
1. Includes
mandatory discounts in tuition fees granted by state decrees and
individual and collective legal proceedings due COVID 19. |
2. Includes the
pro-forma results of Medcel, IPEMED and FASA, as if the acquisition
had been consummated on January 1, 2019. |
Adjusted
EBITDA
Adjusted EBITDA in the three-months ended
September 30, 2020 increased 63.3% to R$149.3 million, up from
R$91.4 million in the same period of the prior year. Adjusted
EBITDA margin of 47.6% expanded from 44.2% reported in the
three-months ended September 30, 2019 benefitting from medical
school maturation, higher average ticket, deferred revenue and
synergies achieved from acquisitions.
Excluding the consolidation of UniRedentor,
UniSL and PEBMED, Adjusted EBITDA in the three-months ended
September 30, 2020 increased 31.9% YoY to R$120.6 million from
R$91.4 million while Adjusted EBITDA margin increased 620 basis
points, to 50.4%.
For the nine-months ended September 30, 2020,
Pro forma Adjusted EBITDA increased 68.8% to R$408.1 million, from
R$241.8 million in the nine-months ended September 30, 2019.
Adjusted EBITDA margin of 47.5% was 780 basis points higher than
the same period of the prior year benefitting from the synergies
extracted from the successful integration of acquisitions.
For the nine-months ended September 30, 2020,
Pro forma Adjusted EBITDA excluding UniRedentor UniSL and PEBMED
increased 47.4% YoY to R$356.5 million up from R$241.8 million
while Pro forma Adjusted EBITDA margin increased 1020 basis points,
to 49.9% from 39.7%. Both improvements reflect mainly operational
leverage and synergies obtained from recent acquisitions.
Table 5: Adjusted
EBITDA |
|
|
|
|
|
|
|
|
(in thousand of R$) |
For the three months period ended September
30, |
|
For the nine months period ended September
30, |
|
2020 |
|
2020 Ex
Uniredentor,
UniSL and PEBMED |
2019 |
|
% Chg |
% Chg Ex
Uniredentor,
UniSL and PEBMED |
|
2020 |
|
2020 Ex
Uniredentor,
UniSL and PEBMED |
2019 |
|
% Chg |
% Chg Ex
Uniredentor,
UniSL and PEBMED |
Adjusted EBITDA |
149,270 |
|
120,624 |
|
91,424 |
|
63.3% |
|
31.9% |
|
|
408,066 |
|
356,490 |
|
230,915 |
|
76.7% |
|
54.4% |
|
%
Margin |
47.6% |
|
50.4% |
|
44.2% |
|
340 bps |
|
620 bps |
|
|
47.5% |
|
49.9% |
|
43.6% |
|
390 bps |
630 bps |
|
Proforma Adjusted EBITDA¹ |
149,270 |
|
120,624 |
|
91,424 |
|
63.3% |
|
31.9% |
|
|
408,066 |
|
356,490 |
|
241,785 |
|
68.8% |
|
47.4% |
|
%
Margin |
47.6% |
|
50.4% |
|
44.2% |
|
340 bps |
|
620 bps |
|
|
47.5% |
|
49.9% |
|
39.7% |
|
780 bps |
1020 bps |
|
1.
Includes the pro-forma results of Medcel, IPEMED and FASA, as if
the acquisition had been consummated on January 1, 2019. |
Net Income
Adjusted Net Income for third quarter 2020 was
R$101.2 million, increasing 46.7% over the same period of the prior
year. For the nine-months ended September 30, 2020, the Company
reported Adjusted Net Income of R$307.8 million, compared to an
Adjusted Net Income of R$155.3 million in the nine-months ended
September 30, 2019, an increase of 98.2%. Both increases mainly
reflect the revenue contribution, synergies captured and margin
expansion from the consolidation of acquisitions as well as organic
growth.
(in thousand of R$) |
|
|
|
|
|
|
|
|
For the three months period ended September
30, |
|
For the nine months period ended September
30, |
|
2020 |
2019 |
% Chg |
|
2020 |
2019 |
% Chg |
Net income |
79,575 |
48,984 |
62.5 |
% |
|
247,131 |
119,786 |
106.3 |
% |
Amortization of customer relationships and trademark (1) |
11,597 |
12,058 |
-3.8 |
% |
|
36,013 |
25,640 |
40.5 |
% |
Share-based compensation |
10,052 |
7,955 |
26.4 |
% |
|
24,649 |
9,864 |
149.9 |
% |
Adjusted Net Income |
101,224 |
68,997 |
46.7 |
% |
|
307,793 |
155,290 |
98.2 |
% |
|
|
|
|
|
|
|
|
(1) Consists of amortization
of customer relationships and trademark recorded under business
combinations. |
|
|
|
|
|
|
|
Balance Sheet and Cash Flow
Cash and cash equivalents, including restricted
cash, at September 30, 2020 were R$1.1 billion, in line with the
cash position in June 30, 2020.
For the nine-month period ended September 30,
2020, Afya reported an Adjusted Cash Flow from Operations of
R$324.7 million up from R$234.7 million in same period of previous
year, a 38.4% year-over-year increase.
Operating Cash Conversion Ratio for the
nine-month period ended September 30, 2020 was 85.6% compared with
109.2% in same period of the previous year. This decrease was
mainly due to the consolidation of Medcel results this year,
students renegotiation of overdue monthly installments due to
Covid-19 crisis and less advances from students.
As Prep course’s revenues are recognized mainly
in the first and fourth quarters of each year, but the receivables
are mostly stable during the year, Medcel’s results negatively
affects cash conversion in the first and fourth quarters.
Table 6: Operating
Cash Conversion Ratio Reconciliation |
For the nine months period ended September
30, |
(in thousand of R$) |
Considering the adoption of IFRS 16 |
|
2020 |
|
2019 |
|
% Chg |
(a) Cash flow from operations |
308,916 |
|
230,647 |
|
33.9 |
% |
(b)
Income taxes paid |
15,830 |
|
4,033 |
|
292.5 |
% |
(c) = (a) + (b) Adjusted cash flow from
operations |
324,746 |
|
234,680 |
|
38.4 |
% |
|
|
|
|
(d) Adjusted EBITDA |
408,066 |
|
230,915 |
|
76.7 |
% |
(e)
Non-recurring expenses: |
|
|
|
-
Integration of new companies (1) |
7,743 |
|
4,500 |
|
72.1 |
% |
-
M&A advisory and due diligence (2) |
9,345 |
|
1,388 |
|
573.3 |
% |
-
Expansion projects (3) |
2,886 |
|
1,411 |
|
104.5 |
% |
-
Restructuring Expenses (4) |
4,863 |
|
8,759 |
|
-44.5 |
% |
-
Mandatory Discounts in Tuition Fees (5) |
3,914 |
|
- |
|
n.a. |
(f) = (d) - (e) Adjusted EBITDA ex- non-recurring
expenses |
379,315 |
|
214,857 |
|
76.5 |
% |
(g) = (a) / (f) Operating cash conversion
ratio |
85.6 |
% |
109.2 |
% |
-2360 bps |
(1) Consists of expenses
related to the integration of newly acquired companies. |
|
|
|
(2) Consists of
expenses related to professional and consultant fees in connection
with due diligence services for M&A transactions. |
|
(3) Consists of
expenses related to professional and consultant fees in connection
with the opening of new campuses. |
|
(4) Consists of
expenses related to the employee redundancies in connection with
the organizational restructuring of acquired companies. |
(5) Consists of
mandatory discounts in tuition fees granted by state decrees and
individual and collective legal proceedings due COVID 19 on site
classes restriction. |
3. Subsequent
Events
Medical School Authorization – Santa
Inês – MA
On October 2, 2020, the Company announced that
the Secretary of Regulation and Supervision of Higher Education of
the Ministry of Education (“MEC”) granted authorization to Afya to
operate the undergraduate medicine course in Santa Inês in the
State of Maranhão, under Mais Médicos II program. This medical
school is the first authorized in connection with the Mais Médicos
program for Afya and will contribute 50 seats to operating seats
base. Santa Inês is one of the seven undergraduate campuses Afya
was awarded in 2018 in connection with the “Mais Médicos” program,
the largest number awarded to any education group.
Entrance into a purchase agreement for the
Acquisition of iClinic
On October 13, 2020 the Company announced its
entrance into a purchase agreement for the acquisition of 100% of
the total share capital of iClinic, through its wholly-owned
subsidiary Afya Participações S.A. iClinic is a SaaS model
physician focused technology company and the leading practice
management software in Brazil. This software empowers doctors
to be more independent and have more control over the non-medicine
aspect of their practices by digitalizing their daily routine, so
they can increase their productivity and deliver better healthcare.
The aggregate purchase price is R$182.7 million, adjusted by
the Net Debt at the closing date, of which: (i) 61.5% will be paid
in cash on the transaction closing date, and (ii) 38.5% will be
paid in Afya’s stock. The transaction is expected to close in
1Q21.
Entrance into a purchase agreement for the Acquisition
of Sociedade Padrão
de Educação
Superior Ltda
(“UNIFIPMoc and
Fip
Guanambi”)
On October 22, 2020 the Company announced it
entered into a purchase agreement for the acquisition, through its
wholly-owned subsidiary Afya Participações S.A., of 100% of the
total share capital of Sociedade Padrão de Educação Superior Ltda
(“UNIFIPMoc and Fip Guanambi”). The aggregate purchase price
is R$360.0 million, adjusted by the Net Debt at the closing
date, of which 100% is payable in cash on the transaction closing
date. UNIFIPMoc and Fip Guanambi are a post-secondary education
institution with government authorization to offer on-campus,
undergraduate courses in medicine in the states of Minas
Gerais and Bahia. The acquisition will contribute 160
medical school seats to Afya, increasing Afya’s total medical
school seats to 2,303. There are 40 additional seats still pending
approval which, if approved by the Ministry of Education, will
result in a potential additional payment of up to R$50
million. The transaction is expected to close in 1Q21.
Closing of the Acquisition of
Faculdade de Ensino Superior da
Amazônia Reunida
(FESAR)
On November 3, 2020, the Company announced the
closing of the acquisition, through its wholly-owned subsidiary
Afya Participações S.A., of 100% of the total share capital of
Faculdade de Ensino Superior da Amazônia Reunida. FESAR is a
post-secondary education institution with government authorization
to offer on-campus, undergraduate courses in medicine in the State
of Pará. The projected Net Revenue for FESAR in 2024 is R$88.6
million with an EV/EBITDA post synergies and maturation of 4.7x
adjusted by the real estate. The aggregate purchase price is R$260
million, of which 100% is payable in cash on the transaction
closing date. The enterprise value also includes real estate which
is valued at R$21.0 million. The acquisition will contribute 120
medical school seats to Afya, increasing Afya’s total medical
school seats to 2,143.
Closing of the Acquisition
of MedPhone On November 5, 2020,
the Company announced the acquisition of 100% of the total share
capital of MedPhone through its wholly-owned subsidiary Afya
Participações S.A. MedPhone is a clinical decision and leaflet
consultation app in Brazil, that helps physicians, medical
students and other healthcare professionals to make faster and more
accurate decisions on a daily basis. MedPhone has more than 175,000
registered users and more than 58,000 monthly active users, with a
NPS of 75. The app has more than 9,100 reviews in AppStore with a
4.9 out of 5 score. The integration of MedPhone’s clinical decision
software with PEBMED will create great synergy and allow the
Company to offer both products through the same platform. The net
purchase price is R$6.4 million and is payable in cash on
the transaction closing date.
Closing of the Acquisition of
Faculdade Ciências
Médicas da
Paraíba (FCMPB)
On November 9, 2020, the Company announced the
closing of the acquisition, through its wholly-owned subsidiary
Afya Participações S.A., of 100% of the total share capital of
Faculdade Ciências Médicas da Paraíba. FCMPB is a post-secondary
education institution with government authorization to offer
on-campus, undergraduate courses in medicine in the State of
Paraíba. The projected Net Revenue for FCMPB in 2024 is R$107.0
million with an EV/EBITDA post synergies and maturation of 6.3x,
all derived from its medical school. The aggregate purchase price
is R$380.0 million, adjusted by the Net Debt at the closing date,
of which: (i) 50% is payable in cash on the transaction closing
date, and (ii) 50% is payable in cash in four equal installments
through 2024, adjusted by the CDI rate. The acquisition will
contribute 157 medical school seats to Afya, increasing Afya’s
total medical school seats to 2,023.
4. Conference Call and
Webcast Information
When: December 4, 2020 at 11:00
a.m. ET.
Who: |
Mr. Virgilio Gibbon, Chief Executive OfficerMr. Luis André Blanco,
Chief Financial OfficerMs. Renata Costa Couto, Head of Investor
Relations |
Dial-in:
+1-877- 591-8865 (U.S. Toll-Free); +1-336-698-3012 (International).
Conference ID: 3385357
Webcast: ir.afya.com.br
Replay: available between
December 04, 2020 until December 08, 2020, by dialing
+1-855-859-2056 (U.S. domestic) or +1-404-537-3406 (International),
conference ID: 3385357.
5. About
Afya Limited (Nasdaq: AFYA)
Afya is the leading medical education group in
Brazil based on number of medical school seats, delivering an
end-to-end physician-centric ecosystem that serves and empowers
students to be lifelong medical learners from the moment they
enroll as medical students through their medical residency
preparation, graduation program, and continuing medical education
activities. Afya also offers content and clinical decision
applications for healthcare professionals, through its products
WhiteBook, Nursebook and Portal PEBMED. For more information,
please visit www.afya.com.br.
6. Forward – Looking
Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, which statements involve substantial risks and
uncertainties. All statements other than statements of historical
fact, could be deemed forward looking, including risks and
uncertainties related to statements about our competition; our
ability to attract, upsell and retain students; our ability to
increase tuition prices and prep course fees; our ability to
anticipate and meet the evolving needs of student and teachers; our
ability to source and successfully integrate acquisitions; general
market, political, economic, and business conditions; and our
financial targets such as revenue, share count and IFRS and
non-IFRS financial measures including gross margin, operating
margin, net income (loss) per diluted share, and free cash flow.
Forward-looking statements by their nature address matters that
are, to different degrees, uncertain, such as statements about the
potential impacts of the COVID-19 pandemic on our business
operations, financial results and financial position and on the
Brazilian economy.
The Company undertakes no obligation to update
any forward-looking statements made in this press release to
reflect events or circumstances after the date of this press
release or to reflect new information or the occurrence of
unanticipated events, except as required by law. The achievement or
success of the matters covered by such forward-looking statements
involves known and unknown risks, uncertainties and assumptions. If
any such risks or uncertainties materialize or if any of the
assumptions prove incorrect, our results could differ materially
from the results expressed or implied by the forward-looking
statements we make. Readers should not rely upon forward-looking
statements as predictions of future events. Forward-looking
statements represent management’s beliefs and assumptions only as
of the date such statements are made. Further information on these
and other factors that could affect the Company’s financial results
is included in filings made with the United States Securities and
Exchange Commission (SEC) from time to time, including the section
titled “Risk Factors” in the most recent Rule 434(b) prospectus.
These documents are available on the SEC Filings section of the
investor relations section of our website at:
https://ir.afya.com.br/.
7. Non-GAAP Financial
Measures
To supplement the Company's consolidated
financial statements, which are prepared and presented in
accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board—IASB, Afya
uses Proforma Revenue, Adjusted EBITDA, Pro Forma Adjusted EBITDA,
Pro Forma Adjusted Net Income and Operating Cash Conversion Ratio
information for the convenience of investors, which are non-GAAP
financial measures. A non-GAAP financial measure is generally
defined as one that purpose to measure financial performance but
excludes or includes amounts that would not be so adjusted in the
most comparable GAAP measure.
Afya calculates Adjusted EBITDA as net income
plus/minus net financial result plus income taxes expense plus
depreciation and amortization plus interest received on late
payments of monthly tuition fees, plus share-based compensation
plus/minus income share associate plus/minus non-recurring
expenses. Pro Forma Adjusted EBITDA is calculated as pro forma net
income plus/minus pro forma net financial result plus pro forma
income taxes expense plus pro forma depreciation and amortization
plus pro forma interest received on late payments of monthly
tuition fees, plus pro forma share-based compensation plus/minus
pro forma income share associate plus/minus pro forma non-recurring
expenses. The calculation for Adjusted Net Income is net income
plus amortization of customer relationships and trademark, plus
shared based compensation. We calculate Operating Cash Conversion
Ratio as the cash flows from operations, adjusted with income taxes
paid divided by Adjusted EBITDA plus/minus non-recurring
expenses.
Management presents Adjusted EBITDA, Pro Forma
Adjusted EBITDA and Pro Forma Adjusted Net Income because it
believes these measures provide investors with a supplemental
measure of the financial performance of the core operations that
facilitates period-to-period comparisons on a consistent basis.
Afya also presents Operating Cash Conversion Ratio because it
believes this measure provides investors with a measure of how
efficiently the Company converts EBITDA into cash. The non-GAAP
financial measures described in this prospectus are not a
substitute for the IFRS measures of earnings. Additionally,
calculations of Adjusted EBITDA, Pro Forma Adjusted EBITDA, Pro
Forma Adjusted Net Income and Operating Cash Conversion Ratio may
be different from the calculations used by other companies,
including competitors in the education services industry, and
therefore, Afya’s measures may not be comparable to those of other
companies.
8. Unaudited Pro Forma
Condensed Consolidated Financial Information
The unaudited interim pro forma condensed
consolidated statement of income for the three and nine months
ended September 30, 2019 is based on the historical unaudited
interim consolidated financial statements of each company, and
gives effect of the acquisition of Medcel, IPEMED and FASA by Afya
Brazil as if it had been consummated on January 1, 2019. Pro forma
adjustments were made to reflect the acquisition of Medcel, IPEMED
and FASA by Afya Brazil.
9. Investor Relations
Contact
Renata Couto, Head of Investor RelationsPhone: +55 31
3515.7564 | +55 31
98463.3341E-mail: renata.couto@afya.com.br
10. Financial
Tables
Interim condensed consolidated statements of income and
comprehensive income
For the three and
nine-months periods ended
September 30, 2020 and 2019
(In thousands of Brazilian Reais, except earnings per
share)
|
|
Three-month period ended |
|
Nine-month period ended |
|
|
September 30, 2020 |
|
September 30, 2019 |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Net revenue |
|
309,410 |
|
206,713 |
|
855,925 |
|
529,784 |
Cost of services |
|
(112,292) |
|
(87,350) |
|
(308,226) |
|
(223,997) |
Gross
profit |
|
197,118 |
|
119,363 |
|
547,699 |
|
305,787 |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(104,718) |
|
(71,260) |
|
(281,480) |
|
(162,078) |
Other income, net |
|
1,997 |
|
520 |
|
1,249 |
|
890 |
|
|
|
|
|
|
|
|
|
Operating
income |
|
94,397 |
|
48,623 |
|
267,468 |
|
144,599 |
|
|
|
|
|
|
|
|
|
Finance income |
|
12,081 |
|
29,652 |
|
55,801 |
|
37,841 |
Finance expenses |
|
(23,701) |
|
(24,586) |
|
(65,443) |
|
(54,915) |
Finance result |
|
(11,620) |
|
5,066 |
|
(9,642) |
|
(17,074) |
|
|
|
|
|
|
|
|
|
Share of income of
associate |
|
1,488 |
|
1,043 |
|
6,393 |
|
1,963 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
84,265 |
|
54,732 |
|
264,219 |
|
129,488 |
|
|
|
|
|
|
|
|
|
Income taxes
expense |
|
(4,690) |
|
(5,748) |
|
(17,088) |
|
(9,702) |
|
|
|
|
|
|
|
|
|
Net
income |
|
79,575 |
|
48,984 |
|
247,131 |
|
119,786 |
|
|
|
|
|
|
|
|
|
Other comprehensive
income |
|
- |
|
- |
|
- |
|
- |
Total comprehensive
income |
|
79,575 |
|
48,984 |
|
247,131 |
|
119,786 |
|
|
|
|
|
|
|
|
|
Income attributable to |
|
|
|
|
|
|
|
|
Equity holders of the parent |
|
74,832 |
|
46,267 |
|
235,327 |
|
104,119 |
Non-controlling interests |
|
4,743 |
|
2,717 |
|
11,804 |
|
15,667 |
|
|
79,575 |
|
48,984 |
|
247,131 |
|
119,786 |
Basic earnings per
share |
|
|
|
|
|
|
|
|
Per common share |
|
0.80 |
|
0.54 |
|
2.54 |
|
1.21 |
Diluted earnings per
sharePer common share |
|
0.79 |
|
0.53 |
|
2.52 |
|
1.20 |
|
|
|
|
|
|
|
|
|
Interim condensed consolidated
statements of financial position
As of
September 30, 2020 and December 31,
2019
(In thousands of Brazilian
Reais)
|
|
September 30, 2020 |
|
December 31, 2019 |
Assets |
|
(unaudited) |
|
|
Current
assets |
|
|
|
|
Cash and cash equivalents |
|
1,065,232 |
|
943,209 |
Restricted cash |
|
10,902 |
|
14,788 |
Trade receivables |
|
231,069 |
|
125,439 |
Inventories |
|
5,835 |
|
3,932 |
Recoverable taxes |
|
24,577 |
|
6,485 |
Derivatives |
|
11,489 |
|
- |
Other assets |
|
20,667 |
|
17,912 |
Total current assets |
|
1,369,771 |
|
1,111,765 |
|
|
|
|
|
Non-current
assets |
|
|
|
|
Restricted cash |
|
2,055 |
|
2,053 |
Trade receivables |
|
11,186 |
|
9,801 |
Other assets |
|
48,640 |
|
17,267 |
Investment in associate |
|
52,027 |
|
45,634 |
Property and equipment |
|
212,537 |
|
139,320 |
Right-of-use assets |
|
389,846 |
|
274,275 |
Intangible assets |
|
1,961,759 |
|
1,312,338 |
Total non-current assets |
|
2,678,050 |
|
1,800,688 |
|
|
|
|
|
Total
assets |
|
4,047,821 |
|
2,912,453 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade payables |
|
32,453 |
|
17,628 |
Loans and financing |
|
143,081 |
|
53,607 |
Derivatives |
|
- |
|
757 |
Lease liabilities |
|
56,628 |
|
22,693 |
Accounts payable to selling shareholders |
|
138,627 |
|
131,883 |
Notes payable |
|
9,646 |
|
- |
Advances from customers |
|
44,368 |
|
36,860 |
Labor and social obligations |
|
103,130 |
|
46,770 |
Taxes payable |
|
35,311 |
|
19,442 |
Income taxes payable |
|
4,601 |
|
3,213 |
Other liabilities |
|
4,606 |
|
376 |
Total current liabilities |
|
572,451 |
|
333,229 |
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans and financing |
|
17,175 |
|
6,750 |
Lease liabilities |
|
356,057 |
|
261,822 |
Accounts payable to selling shareholders |
|
223,634 |
|
168,354 |
Notes payable |
|
66,981 |
|
- |
Taxes payable |
|
22,486 |
|
21,304 |
Provision for legal proceedings |
|
22,589 |
|
5,269 |
Other liabilities |
|
2,567 |
|
1,999 |
Total non-current liabilities |
|
711,489 |
|
465,498 |
Total
liabilities |
|
1,283,940 |
|
798,727 |
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
|
17 |
|
17 |
Additional paid-in capital |
|
2,318,044 |
|
1,931,047 |
Share-based compensation reserve |
|
42,763 |
|
18,114 |
Retained earnings |
|
351,243 |
|
115,916 |
Equity attributable to
equity holders of the parent |
|
2,712,067 |
|
2,065,094 |
Non-controlling interests |
|
51,814 |
|
48,632 |
Total
equity |
|
2,763,881 |
|
2,113,726 |
|
|
|
|
|
Total liabilities and
equity |
|
4,047,821 |
|
2,912,453 |
Interim condensed consolidated
statements of cash flows
For the
nine-months periods ended
September 30, 2020 and 2019
(In thousands of Brazilian
Reais)
|
September 30, 2020 |
|
September 30, 2019 |
|
(unaudited) |
|
(unaudited) |
Operating
activities |
|
|
|
|
Income before
income taxes |
264,219 |
|
129,488 |
|
|
Adjustments to
reconcile income before income taxes |
|
|
|
|
|
|
Depreciation and amortization |
77,729 |
|
50,703 |
|
|
|
Disposals of property and
equipment |
- |
|
111 |
|
|
|
Allowance for doubtful
accounts |
22,899 |
|
13,278 |
|
|
|
Share-based compensation
expense |
24,649 |
|
9,864 |
|
|
|
Net foreign exchange
differences |
1,613 |
|
(13,608) |
|
|
|
Net (gain) loss on
derivatives |
(22,199) |
|
1,181 |
|
|
|
Accrued interest |
16,161 |
|
14,642 |
|
|
|
Accrued lease interest |
32,123 |
|
23,337 |
|
|
|
Share of income of associate |
(6,393) |
|
(1,963) |
|
|
|
Provision for legal
proceedings |
(93) |
|
(624) |
Changes in
assets and liabilities |
|
|
|
|
Trade
receivables |
(95,563) |
|
(24,688) |
|
Inventories |
(1,436) |
|
777 |
|
Recoverable
taxes |
(1,437) |
|
(5,594) |
|
Other assets |
(6,820) |
|
(2,713) |
|
Trade payables |
1,759 |
|
2,985 |
|
Taxes payables |
(5,612) |
|
5,588 |
|
Advances from
customers |
(18,882) |
|
18,521 |
|
Labor and social
obligations |
42,033 |
|
22,992 |
|
Other
liabilities |
(4) |
|
(9,597) |
|
|
324,746 |
|
234,680 |
|
Income taxes
paid |
(15,830) |
|
(4,033) |
|
Net cash
flows from operating activities |
308,916 |
|
230,647 |
|
|
|
|
|
Investing
activities |
|
|
|
|
Acquisition of
property and equipment |
(60,887) |
|
(41,684) |
|
Acquisition of
intangibles assets |
(12,741) |
|
(59,644) |
|
Restricted cash |
3,884 |
|
2,512 |
|
Payments of accounts
payable to selling shareholders |
(95,406) |
|
(27,962) |
|
Payments of notes
payable |
(3,847) |
|
- |
|
Acquisition of
subsidiaries, net of cash acquired |
(354,851) |
|
(148,880) |
|
Loans to related
parties |
- |
|
(161) |
|
Net cash
flows used in investing activities |
(523,848) |
|
(275,819) |
|
|
|
|
Financing
activities |
|
|
|
|
Payments of loans and
financing |
(106,019) |
|
(43,094) |
|
Issuance of loans and
financing |
100,911 |
|
- |
|
Payments of lease
liabilities |
(40,527) |
|
(27,811) |
|
Capital increase |
- |
|
167,628 |
|
Proceeds from
issuance of shares |
389,170 |
|
992,778 |
|
Shares issuance
cost |
(19,704) |
|
(79,670) |
|
Dividends paid to
non-controlling interests |
(8,622) |
|
(47,964) |
|
Net cash
flows from financing activities |
315,209 |
|
961,867 |
|
Net
increase in cash and cash equivalents |
100,277 |
|
916,695 |
|
Net foreign
exchange differences |
21,746 |
|
14,531 |
|
Cash and cash
equivalents at the beginning of the period |
943,209 |
|
62,260 |
|
Cash and cash
equivalents at the end of the period |
1,065,232 |
|
993,486 |
Reconciliation between Net Income and
Adjusted EBITDA, Pro Forma Adjusted EBITDA
Reconciliation between Adjusted EBITDA and Net Income;
Proforma Adjusted EBITDA |
|
|
|
|
|
|
(in thousand of R$) |
|
|
For the three months period ended September
30, |
|
For the nine months period ended September
30, |
|
2020 |
|
2019 |
|
% Chg |
|
2020 |
|
2019 |
|
% Chg |
Net income |
79,575 |
|
48,984 |
|
62.5 |
% |
|
247,131 |
|
119,786 |
|
106.3 |
% |
Net
financial result |
11,620 |
|
(5,066 |
) |
n.a. |
|
|
9,642 |
|
17,074 |
|
-43.5 |
% |
Income
taxes expense |
4,690 |
|
5,748 |
|
-18.4 |
% |
|
17,088 |
|
9,702 |
|
76.1 |
% |
Depreciation and amortization |
26,399 |
|
22,262 |
|
18.6 |
% |
|
77,729 |
|
50,703 |
|
53.3 |
% |
Interest received (1) |
4,142 |
|
3,813 |
|
8.6 |
% |
|
9,469 |
|
7,728 |
|
22.5 |
% |
Income
share associate |
(1,488 |
) |
0 |
|
n.a. |
|
|
(6,393 |
) |
0 |
|
n.a. |
|
Share-based compensation |
10,052 |
|
7,955 |
|
26.4 |
% |
|
24,649 |
|
9,864 |
|
149.9 |
% |
Non-recurring expenses: |
14,280 |
|
7,728 |
|
84.8 |
% |
|
28,751 |
|
16,058 |
|
79.0 |
% |
-
Integration of new companies (2) |
2,761 |
|
893 |
|
209.2 |
% |
|
7,743 |
|
4,500 |
|
72.1 |
% |
-
M&A advisory and due diligence (3) |
3,709 |
|
289 |
|
1183.4 |
% |
|
9,345 |
|
1,388 |
|
573.3 |
% |
-
Expansion projects (4) |
795 |
|
468 |
|
69.9 |
% |
|
2,886 |
|
1,411 |
|
104.5 |
% |
-
Restructuring expenses (5) |
3,101 |
|
6,078 |
|
-49.0 |
% |
|
4,863 |
|
8,759 |
|
-44.5 |
% |
-
Mandatory Discounts in Tuition Fees (6) |
3,914 |
|
0 |
|
n.a. |
|
|
3,914 |
|
0 |
|
n.a. |
|
Adjusted
EBITDA |
149,270 |
|
91,424 |
|
63.3 |
% |
|
408,066 |
|
230,915 |
|
76.7 |
% |
Adjusted EBITDA Margin |
47.6 |
% |
44.2 |
% |
340 bps |
|
|
47.5 |
% |
43.6 |
% |
390 bps |
|
Pro Forma Adjusted
EBITDA |
149,270 |
|
91,424 |
|
63.3 |
% |
|
408,066 |
|
241,785 |
|
68.8 |
% |
Pro
Forma Adjusted EBITDA Margin |
47.6 |
% |
44.2 |
% |
340 bps |
|
|
47.5 |
% |
39.7 |
% |
780 bps |
|
|
|
|
|
|
|
|
|
(1) Represents the interest
received on late payments of monthly tuition fees. |
|
|
|
|
|
|
|
(2) Consists of expenses
related to the integration of newly acquired companies. |
|
|
|
|
|
|
|
(3) Consists of expenses
related to professional and consultant fees in connection with due
diligence services for our M&A transactions. |
|
|
|
|
|
|
|
(4) Consists of expenses
related to professional and consultant fees in connection with the
opening of new campuses. |
|
|
|
|
|
|
|
(5) Consists of expenses
related to the employee redundancies in connection with the
organizational restructuring of our acquired companies. |
|
|
|
|
|
|
|
(6) Consists of mandatory
discounts in tuition fees granted by state decrees and individual
and collective legal proceedings due COVID 19 on site classes
restriction. |
|
|
|
|
|
|
|
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