Arco delivers R$1,002B revenues and 38% adjusted EBITDA for FY2020 and confirms 2021 ACV of R$1,163 million

Arco Platform Limited, or Arco (Nasdaq: ARCE), today reported financial and operating results for the fourth quarter and full year ended December 31, 2020.

“While the year of 2020 presented an unprecedented global challenge, the Brazilian K-12 education sector has undergone an important technological transformation that will benefit Arco for a long time. While taking care of our team and being financially responsible, we were able to quickly evolve our solutions and go-to-market to better serve existing clients and attract new prospects. In 2021, we will continue evolving our winning factors of brand reputation, superior solutions and distribution capability to pursue our mission of delivering high-quality education at scale,” said Ari de Sá Neto, CEO and founder of Arco.

Full Year 2020 Results

  • Net Revenue of R$1,001.7 million;
  • Adjusted EBITDA of R$381.0 million;
  • Adjusted Net Income of R$220.3 million;

Fourth Quarter 2020 Results

  • Net Revenue of R$296.5 million;
  • Adjusted EBITDA of R$125.9 million;
  • Adjusted Net Income of R$67.4 million;

Key Messages

2020 results: solid FY Revenues with high EBITDA margin

  • FY20 Net Revenue of R$1,001.7 million
  • Above guidance FY20 adjusted EBITDA margin of 38.0%

2021: ACV of R$1,163 million with sustained high margin

  • 2021 ACV of R$1,163 million, 21% growth versus 2020
  • Recovery of COVID related revenue impact of ~R$96 million not considered in 2021 ACV
  • FY21 adjusted EBITDA margin guidance of 35.5% to 37.5%

Recent acquisitions progressing as planned

  • COC and Dom Bosco complement Core portfolio and reinforce Arco’s leadership
  • Arco enters the supplemental test prep vertical with the acquisition of Me Salva!
  • Escola da Inteligência, national leader in social-emotional, close to full integration

Priorities for 2021: growth, digital and ESG

  • Leverage stronger winning factors to continue growing on large & untapped market
  • Drive K-12 digitalization
  • Disclose and further pursue ESG impact

Conference Call Information

Arco will discuss its fourth quarter and full year 2020 results today, March 31, 2021, via a conference call at 6:00 p.m. Eastern Time. To access the call, please dial: +1 412 717-9627, +1 844 204-8942, +55 11 3181-8565 or +55 11 4118-4632. An audio replay of the call will be available through April 6, 2021, by dialing +55 11 3193-1012 and entering access code 1608874#. A live and archived webcast of the call will be available on the Investor Relations section of the Company’s website at https://investor.arcoplatform.com/.

Information related to COVID-19 pandemic

As of December 31, 2020, there was a total impact of R$14.6 million on the Company's condensed consolidated financial statements related to the COVID-19 pandemic mainly related to: (i) revision of the expected credit losses considering estimated increases in financial defaults, arising from renegotiations with customers and in unemployment rates in Brazil for the foreseeable future due COVID-19, which resulted in an increase of R$ 7.0 million in allowance for doubtful accounts as of December 31, 2020, (ii) additional expenses of R$ 7.7 million during the year ended December 31, 2020 related to IT, network infrastructure and an integrated teaching platform, as well as expenses to maintain protective measures such as cleaning and disinfecting the installations, distribution of protective masks and alcohol to employees and delivery of chairs, computers and work kits, (iii) increase in inventory reserves to accurately reflect the expected realization of inventories, which resulted in an incremental charge of R$287 thousand, and (iv) rent concessions, regarding leased buildings, that occurred as a direct consequence of the COVID-19 pandemic, amounting R$350 thousand.

The future impact of the COVID-19 pandemic on an ongoing basis is still uncertain, and the Company’s management team will continue to closely monitor and assess the potential impacts it may have on the Company’s business, its financial performance and position.

For full disclosure regarding the COVID-19 discussion, please refer to the December 31, 2020 condensed consolidated financial statements submitted to the Securities and Exchange Commission on Form 6-K.

About Arco Platform Limited (Nasdaq: ARCE)

Arco has empowered hundreds of thousands of students to rewrite their futures through education. Our data-driven learning methodology, proprietary adaptable curriculum, interactive hybrid content, and high-quality pedagogical services allow students to personalize their learning experience while enabling schools to thrive.

Forward-Looking Statements

This press release contains forward-looking statements as pertains to Arco Platform Limited (the “Company”) within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the Company’s expectations or predictions of future financial or business performance conditions. The achievement or success of the matters covered by statements herein involves substantial known and unknown risks, uncertainties, and assumptions, including with respect to the COVID-19 pandemic. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results could differ materially from the results expressed or implied by the statements we make. You should not rely upon forward-looking statements as predictions of future events. Forward looking statements are made based on the Company’s current expectations and projections relating to its financial conditions, result of operations, plans, objectives, future performance and business, and these statements are not guarantees of future performance.

Statements which herein address activities, events, conditions or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. You can generally identify forward-looking statements by the use of forward-looking terminology such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “evaluate,” “expect,” “explore,” “forecast,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “probable,” “project,” “seek,” “should,” “view,” or “will,” or the negative thereof or other variations thereon or comparable terminology. 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 customers; our ability to increase the price of our solutions; our ability to expand our sales and marketing capabilities; general market, political, economic, and business conditions in Brazil or abroad; and our financial targets which include revenue, share count and other IFRS measures, as well as non-IFRS financial measures including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, Free Cash Flow and Adjusted Free Cash Flow.

Forward-looking statements represent the Company management’s beliefs and assumptions only as of the date such statements are made, and the Company undertakes no obligation to update any forward-looking statements made in this presentation 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.

Further information on these and other factors that could affect the Company’s financial results is included in filings the Company makes with the Securities and Exchange Commission from time to time, including the section titled “Risk Factors” in the Company’s most recent Forms 20-F and 6-K. These documents are available on the SEC Filings section of the Investor Relations section of the Company’s website at: https://investor.arcoplatform.com/

Key Business Metrics

ACV Bookings: we define ACV Bookings as the revenue we would contractually expect to recognize from a partner school in each school year pursuant to the terms of our contract with such partner school, assuming no further additions or reductions in the number of enrolled students that will access our content at such partner school in such school year (we define “school year” for purposes of calculation of ACV Bookings as the twelve-month period starting in October of the previous year to September of the mentioned current year). We calculate ACV Bookings by multiplying the number of enrolled students at each partner school with the average ticket per student per year; the related number of enrolled students and average ticket per student per year are each calculated in accordance with the terms of each contract with the related partner school.

Non-GAAP Financial Measures

To supplement the Company's condensed consolidated financial statements, which are prepared and presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board—IASB, we use Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, Free Cash Flow and Adjusted Free Cash Flow which are non-GAAP financial measures.

We calculate Adjusted EBITDA as profit (loss) for the year (or period) plus/minus income taxes, plus/minus finance result, plus depreciation and amortization, plus/minus share of (profit) loss of equity-accounted investees, plus share-based compensation plan, restricted stock units and provision for payroll taxes (restricted stock units), plus M&A expenses, plus non-recurring expenses and plus effects related to COVID-19 pandemic. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by Net Revenue.

We calculate Adjusted Net Income as profit (loss) for the year (or period), plus share-based compensation plan, restricted stock units and provision for payroll taxes (restricted stock units), plus amortization of intangible assets from business combinations (which refers to the amortization of the following intangible assets from business combinations: (i) rights on contracts, (ii) customer relationships, (iii) educational system, (iv) trademarks, (v) non-compete agreement (vi) software and (vii) educational platform resulting from acquisitions), plus/minus changes in fair value of derivative instruments (which refers to (i) changes in fair value of derivative instruments—finance income, and plus (ii) changes in fair value of derivative instruments—finance costs), plus/minus changes in accounts payable to selling shareholders plus share of (profit) loss of equity-accounted investees, plus/minus changes in current and deferred tax recognized in statements of income applied to all adjustments to net income, plus/minus foreign exchange gains/loss on cash and cash equivalents, plus interest expenses, net, plus M&A expenses, plus non-recurring expenses and plus effects related to COVID-19 pandemic. We calculate Adjusted Net Income Margin as Adjusted Net Income divided by Net Revenue.

We calculate Free Cash Flow as Net Cash Flows from Operating activities, less acquisition of property and equipment, less acquisition of intangible assets. We consider Free Cash Flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by operating activities and cash used for investments in property and equipment required to maintain and grow our business. We calculate Adjusted Free Cash Flow as free cash flow for the year (or period) plus (i) interest change in financial investments, (ii) M&A expenses, and (iii) non-recurring expenses.

We understand that, although Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, Free Cash Flow and Adjusted Free Cash Flow are used by investors and securities analysts in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results of operations as reported under IFRS. Additionally, our calculations of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin Free Cash Flow and Adjusted Free Cash Flow may be different from the calculation used by other companies, including our competitors in the education services industry, and therefore, our measures may not be comparable to those of other companies.

 

Arco Platform Limited

Consolidated Statements of Financial Position

 

 

 

 

 

 

 

December 30,

 

December 31,

(In thousands of Brazilian reais)

 

2020

 

2019

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

424,410

 

 

48,900

 

Financial investments

 

712,645

 

 

574,804

 

Trade receivables

 

415,282

 

 

329,428

 

Inventories

 

74,076

 

 

40,106

 

Recoverable taxes

 

19,304

 

 

15,612

 

Financial instruments from acquisition of interest

 

-

 

 

3,794

 

Related parties

 

9,970

 

 

1,298

 

Other assets

 

24,073

 

 

14,630

 

Total current assets

 

1,679,760

 

 

1,028,572

 

 

 

 

 

 

Non-current assets

 

 

 

 

Financial instruments from acquisition of interest

 

-

 

 

32,152

 

Deferred income tax

 

236,903

 

 

156,748

 

Recoverable taxes

 

1,121

 

 

6,613

 

Financial investments

 

10,349

 

 

4,690

 

Related parties

 

10,508

 

 

14,813

 

Other assets

 

22,239

 

 

14,399

 

Investments and interests in other entities

 

9,654

 

 

48,574

 

Property and equipment

 

26,087

 

 

21,328

 

Right-of-use assets

 

30,022

 

 

21,631

 

Intangible assets

 

2,549,637

 

 

1,811,903

 

Total non-current assets

 

2,896,520

 

 

2,132,851

 

 

 

 

 

 

Total assets

 

4,576,280

 

 

3,161,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 30,

 

December 31,

(In thousands of Brazilian reais)

 

2020

 

2019

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade payables

 

40,925

 

 

34,521

 

Labor and social obligations

 

85,069

 

 

68,511

 

Taxes and contributions payable

 

9,676

 

 

7,508

 

Income taxes payable

 

44,731

 

 

52,038

 

Advances from customers

 

23,080

 

 

25,626

 

Lease liabilities

 

12,742

 

 

6,845

 

Loans and financing

 

107,706

 

 

98,561

 

Accounts payable to selling shareholders

 

656,014

 

 

117,959

 

Other liabilities

 

331

 

 

607

 

Total current liabilities

 

980,274

 

 

412,176

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

Labor and social obligations

 

36,570

 

 

2,801

 

Lease liabilities

 

22,478

 

 

19,012

 

Loans and financing

 

203,413

 

 

-

 

Financial instruments from acquisition of interest

 

-

 

 

33,940

 

Provision for legal proceedings

 

1,366

 

 

251

 

Accounts payable to selling shareholders

 

1,130,501

 

 

1,098,273

 

Other liabilities

 

794

 

 

160

 

Total non-current liabilities

 

1,395,122

 

 

1,154,437

 

 

 

 

 

 

Equity

 

 

 

 

Share capital

 

11

 

 

11

 

Capital reserve

 

2,200,645

 

 

1,607,622

 

Share-based compensation reserve

 

80,817

 

 

84,546

 

Accumulated losses

 

(80,589

)

 

(97,369

)

Total equity

 

2,200,884

 

 

1,594,810

 

 

 

 

 

 

Total liabilities and equity

 

4,576,280

 

 

3,161,423

 

Arco Platform Limited

Consolidated Statements of Income

 

Three months ended December 31,

Twelve months ended December 31,

(In thousands of Brazilian reais, except earnings per share)

2020

2019

2020

2019

 

Net revenue

296,537

 

247,644

 

1,001,710

 

572,837

 

Cost of sales

(66,305

)

(55,374

)

(221,130

)

(117,258

)

Gross profit

230,232

 

192,270

 

780,580

 

455,579

 

Operating expenses:

Selling expenses

(97,687

)

(76,691

)

(372,269

)

(199,780

)

General and administrative expenses

(71,528

)

(56,165

)

(270,558

)

(191,438

)

Other income (expense), net

(6,251

)

(8,738

)

(2,258

)

(6,287

)

Operating profit

54,766

 

50,676

 

135,495

 

58,074

 

Finance income

9,614

 

24,943

 

45,211

 

72,047

 

Finance costs

(28,110

)

(37,032

)

(142,013

)

(170,855

)

Finance result

(18,496

)

(12,089

)

(96,802

)

(98,808

)

 

Share of profit (loss) of equity-accounted investees

8,450

 

153

 

409

 

(1,800

)

 

Profit before income taxes

44,720

 

38,740

 

39,102

 

(42,534

)

Income taxes - income (expense)

Current

(18,538

)

(14,596

)

(87,379

)

(46,850

)

Deferred

(1,979

)

18,371

 

65,057

 

79,953

 

Total income taxes – income (expense)

(20,517

)

3,775

 

(22,322

)

33,103

 

Profit (loss) for the period

24,203

 

42,515

 

16,780

 

(9,431

)

 

Basic earnings per share – in Brazilian reais

Class A

0.42

 

0.79

 

0.30

 

(0.18

)

Class B

0.42

 

0.79

 

0.30

 

(0.18

)

Diluted earnings per share – in Brazilian reais

Class A

0.42

 

0.78

 

0.30

 

(0.18

)

Class B

0.42

 

0.78

 

0.30

 

(0.18

)

 

Weighted-average shares used to compute net income per share:

Basic

57,588

 

53,812

 

55,758

 

51,552

 

Diluted

57,749

 

54,149

 

55,919

 

51,552

 

Arco Platform Limited

Consolidated Statements of Cash Flows

 

Three months ended December 31,

Twelve months ended December 31,

 

(In thousands of Brazilian reais)

2020

2019

2020

2019

 

 

Operating activities

 

Profit (loss) before income taxes for the period

44,720

 

38,740

 

39,102

 

(42,534

)

 

Adjustments to reconcile profit (loss) before income taxes

 

Depreciation and amortization

37,692

 

23,865

 

127,455

 

48,314

 

 

Inventory reserves

4,114

 

4,273

 

7,453

 

8,476

 

 

Allowance for doubtful accounts

6,451

 

7,903

 

34,684

 

17,392

 

 

Loss on sale/disposal of property and equipment and intangible assets disposed

2,753

 

2,906

 

4,277

 

3,499

 

 

Fair value change in financial instruments from acquisition interests

(124

)

(10,822

)

(562

)

(473

)

 

Changes in accounts payable to selling shareholders

458

 

7,622

 

20,330

 

89,403

 

 

Share of (profit) loss of equity-accounted investees

(8,450

)

(153

)

(409

)

1,800

 

 

Share-based compensation plan

21,024

 

612

 

36,333

 

33,043

 

 

Accrued interest on loans and financing

3,810

 

1,002

 

19,862

 

1,002

 

 

Interest accretion on acquisition liability

18,389

 

17,496

 

68,379

 

42,206

 

 

Income from non-cash equivalents

(3,532

)

(45,797

)

(13,388

)

(45,797

)

 

Interest on lease liabilities

976

 

258

 

3,036

 

1,489

 

 

Provision for legal proceedings

(7

)

20

 

587

 

120

 

 

Provision for payroll taxes (restricted stock units)

(1,831

)

(15,066

)

(2,997

)

8,333

 

 

Foreign exchange income (loss)

183

 

571

 

(188

)

555

 

 

Changes in fair value of step acquisitions

3,555

 

(3,708

)

307

 

(3,708

)

 

Gain on sale of investment

-

 

(34

)

-

 

(3,286

)

 

Other financial cost/revenue, net

(466

)

(881

)

(2,315

)

(2,362

)

 

129,715

 

28,807

 

341,946

 

157,472

 

 

Changes in assets and liabilities

 

Trade receivables

(148,908

)

(176,193

)

(108,087

)

(136,407

)

 

Inventories

(10,109

)

(3,669

)

(18,161

)

(14,637

)

 

Recoverable taxes

7,970

 

(944

)

3,152

 

(8,494

)

 

Other assets

(6,768

)

(9,376

)

(14,087

)

(16,035

)

 

Trade payables

7,677

 

(37

)

3,886

 

8,455

 

 

Labor and social obligations

(37,593

)

(2,390

)

7,239

 

15,950

 

 

Taxes and contributions payable

(8,650

)

2,491

 

1,147

 

1,951

 

 

Advances from customers

17,292

 

22,334

 

(2,981

)

19,997

 

 

Other liabilities

(533

)

112

 

(1,420

)

(268

)

 

Cash (used in) generated from operations

(49,907

)

(138,865

)

212,634

 

27,984

 

 

Income taxes paid

(4,641

)

(6,107

)

(95,053

)

(34,747

)

 

Interest paid on lease liabilities

(914

)

(455

)

(2,100

)

(852

)

 

Interest paid on accounts payable to selling shareholders

(140

)

-

 

(187

)

-

 

 

Interest paid on loans and financing

(3,556

)

-

 

(13,423

)

-

 

 

Payments for contingent consideration

(9,520

)

-

 

(9,520

)

-

 

 

Net cash flows (used in) generated from operating activities

(68,678

)

(145,427

)

92,351

 

(7,615

)

 

 

Investing activities

 

Acquisition of property and equipment

(5,159

)

(3,382

)

(10,822

)

(10,991

)

 

Payment of investments and interests in other entities

-

 

(36,435

)

(32,628

)

(41,853

)

 

Acquisition of subsidiaries, net of cash acquired

(182,284

)

(782,748

)

(204,286

)

(798,885

)

 

Payment of accounts payables to selling shareholders

-

 

-

 

-

 

-

 

 

Acquisition of intangible assets

(33,758

)

(16,741

)

(96,827

)

(43,102

)

 

Net sales (purchases) of financial investments

192,028

 

365,821

 

(130,113

)

277,389

 

 

Loans to related parties

(5,000

)

-

 

(5,000

)

(14,000

)

 

Net cash flows used in investing activities

(34,173

)

(473,485

)

(479,676

)

(631,442

)

 

 

Financing activities

 

Capital increase - exercised stock options

-

 

1

 

-

 

13,830

 

 

Capital increase - proceeds from public offering

-

 

589,602

 

591,898

 

589,602

 

 

Share issuance costs

1,240

 

(18,224

)

(16,291

)

(18,897

)

 

Payment of lease liabilities

(2,782

)

(1,698

)

(8,510

)

(4,407

)

 

Payment of loans and financing

(837

)

(511

)

(301,151

)

(563

)

 

Payment to owners to acquire entity’s shares

(779

)

(928

)

(1,733

)

(928

)

 

Loans and financing

62

 

97,574

 

498,434

 

97,574

 

 

Dividends paid by subsidiaries

3,696

 

-

 

-

 

-

 

 

Net cash flows generated from financing activities

600

 

665,816

 

762,647

 

676,211

 

 

 

Foreign exchange effects on cash and cash equivalents

(183

)

(572

)

188

 

(555

)

 

(Decrease) increase in cash and cash equivalents

(102,434

)

46,332

 

375,510

 

36,599

 

 

 

Cash and cash equivalents at the beginning of the period

526,844

 

2,568

 

48,900

 

12,301

 

 

Cash and cash equivalents at the end of the period

424,410

 

48,900

 

424,410

 

48,900

 

 

(Decrease) increase in cash and cash equivalents

(102,434

)

46,332

 

375,510

 

36,599

 

 

Arco Platform Limited

Reconciliation of Non-GAAP Measures

 

Three months ended December 31,

Twelve months ended December 31,

(In thousands of Brazilian reais)

2020

2019

2020

2019

Adjusted EBITDA Reconciliation

Profit (loss) for the period

24,203

 

 

42,515

 

 

16,780

 

 

(9,431

)

(+/-) Income taxes

20,517

 

 

(3,775

)

 

22,322

 

 

(33,103

)

(+/-) Finance result

18,496

 

 

12,089

 

 

96,802

 

 

98,808

 

(+) Depreciation and amortization

37,692

 

 

23,865

 

 

127,455

 

 

48,314

 

(+/-) Share of (profit) loss of equity-accounted investees

(8,450

)

 

(153

)

 

(409

)

 

1,800

 

EBITDA

92,458

 

 

74,541

 

262,950

 

 

106,388

 

(+) Share-based compensation plan, restricted stock units and provision for payroll taxes (restricted stock units)

18,566

 

 

11,148

 

69,846

 

 

66,978

 

(+) M&A expenses

8,063

 

 

15,939

 

13,751

 

 

28,848

 

(+) Non-recurring expenses

2,736

 

 

4,675

 

19,488

 

 

7,142

 

(+) Effects related to Covid-19 pandemic

4,075

 

 

-

 

14,990

 

 

-

 

Adjusted EBITDA

125,898

 

 

106,303

 

381,025

 

 

209,356

 

 

 

Net Revenue

296,537

 

 

247,644

 

1,001,710

 

 

572,837

 

EBITDA Margin

31.2

%

 

30.1

%

26.3

%

 

18.6

%

Adjusted EBITDA Margin

42.5

%

 

42.9

%

38.0

%

 

36.5

%

 

 

Three months ended December 31,

Twelve months ended December 31,

(In thousands of Brazilian reais)

2020

2019

2020

2019

Adjusted Net Income Reconciliation

Profit (loss) for the period

24,203

 

 

42,515

 

16,780

 

 

(9,431

)

(+) Share-based compensation plan, restricted stock units and provision for payroll taxes (restricted stock units).

18,566

 

 

11,148

 

69,846

 

 

66,978

 

(+) Amortization of intangible assets from business combinations

21,349

 

 

13,485

 

76,067

 

 

23,173

 

(+/-) Changes in fair value of derivative instruments

(124

)

 

(10,822

)

(562

)

 

(473

)

(+/-) Changes in accounts payable to selling shareholders

458

 

 

7,622

 

20,330

 

 

89,403

 

(+) Share of loss (profit) of equity-accounted investees

(8,450

)

 

(153

)

(409

)

 

1,800

 

(+/-) Tax effects

(21,706

)

 

(25,112

)

(76,898

)

 

(79,569

)

(+/-) Foreign exchange on cash and cash equivalents

183

 

 

571

 

(188

)

 

555

 

(+) Interest expenses, net

18,049

 

 

17,153

 

67,058

 

 

41,042

 

(+) M&A expenses

8,063

 

 

15,939

 

13,751

 

 

28,848

 

(+) Non-recurring expenses

2,736

 

 

4,675

 

19,488

 

 

7,142

 

(+) Effects related to Covid-19 pandemic

4,075

 

 

-

 

14,990

 

 

-

 

Adjusted Net Income

67,402

 

 

77,021

 

220,253

 

 

169,468

 

 

 

Net Revenue

296,537

 

 

247,644

 

1,001,710

 

 

572,837

 

Adjusted Net Income Margin

22.7

%

31.1

%

22.0

%

 

29.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31,

Twelve months ended December 31,

(In thousands of Brazilian reais)

2020

2019

2020

2019

Free Cash Flow Reconciliation

Cash generated from operations

(49,907

)

 

(138,865

)

212,634

 

 

27,984

 

(-) Income tax paid

(4,641

)

 

(6,107

)

(95,053

)

 

(34,747

)

(-) Interest paid on lease liabilities

(914

)

 

(455

)

(2,100

)

 

(852

)

(-) Interest paid on investment acquisition

(140

)

 

-

 

(187

)

 

-

 

(-) Interest paid on loans and financing

(3,556

)

 

-

 

(13,423

)

 

-

 

(-) Payments for contingent consideration

(9,520

)

-

 

(9,520

)

 

-

 

Cash Flow from Operating Activities

(68,678

)

(145,427

)

92,351

 

(7,615

)

(-) Acquisition of property and equipment

(5,159

)

(3,382

)

(10,822

)

(10,991

)

(-) Acquisition of intangible assets

(33,758

)

(16,741

)

(96,827

)

(43,102

)

Free Cash Flow

(107,595

)

(165,550

)

(15,298

)

(61,708

)

(+) Interest change in financial investments

3,532

 

45,797

 

13,388

 

45,797

 

(+) Working capital of acquired companies

22,915

 

55,078

 

22,915

 

55,078

 

(+) Business combinations

-

 

5,699

 

22,642

 

5,699

 

(+) M&A expenses

8,063

 

15,939

 

13,751

 

28,848

 

(+) Others

2,736

 

8,784

 

15,379

 

11,251

 

(+) Labor and social obligations of restricted stock units

13,548

 

(3,561

)

-

 

(3,561

)

(+) Working capital and expenses related to Covid-19 pandemic

39,943

 

-

 

39,943

 

-

 

Adjusted Free Cash Flow

(16,858

)

(37,814

)

112,720

 

81,404

 

 

 

Investor Relations Contact: Arco Platform Limited IR@arcoeducacao.com.br Carina Carreira (carinacarreira@arcoeducacao.com.br)

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