Another Year of Strong Performance
Robust EPS Expansion
Guidance Achievement
Afya Limited (Nasdaq: AFYA) (“Afya” or the “Company”),
the leading medical education group and digital health services
provider in Brazil, reported today financial and operating results
for the fourth quarter and full-year period ended December 31,
2022. Financial results are expressed in Brazilian Reais and are
presented in accordance with International Financial Reporting
Standards (IFRS).
Fourth Quarter 2022 Highlights
- 4Q22 Adjusted Net Revenue increased 17.8% YoY to R$595.1
million.
- 4Q22 Adjusted EBITDA increased 24.1% YoY, reaching R$242.2
million, with an Adjusted EBITDA Margin of 40.7%.
- 4Q22 Adjusted Net Income increased 30.8% YoY, reaching R$128.8
million, with an EPS growth of 53.3% in the same period.
Full-Year 2022 Highlights
- FY22 Adjusted Net Revenue increased 32.3% YoY to R$2,319.1
million.
- FY22 Adjusted EBITDA increased 27.4% YoY, reaching R$961.9
million, with an Adjusted EBITDA Margin of 41.5%.
- FY22 Adjusted Net Income increased 21.5% YoY, reaching R$535.1
million, with an EPS growth of 73.2% in the same period.
- Cash conversion of 94.4%, with a solid cash position of
R$1,093.1 million.
- ~260 thousand monthly active physicians and medical students
using Afya’s Digital Services, an increase of 5.3% over the same
period last year.
Table 1: Financial Highlights For the three months
period ended December 31, For the twelve months period ended
December 31, (in thousand of R$)
2022
2022 Ex Acquisitions*
2021
% Chg
% Chg Ex Acquisitions
2022
2022 Ex Acquisitions*
2021
% Chg
% Chg Ex Acquisitions
(a) Net Revenue
584,002
574,027
498,259
17.2%
15.2%
2,329,057
2,036,612
1,719,371
35.5%
18.5%
(b) Adjusted Net Revenue (1)
595,138
585,163
505,407
17.8%
15.8%
2,319,131
2,026,686
1,752,728
32.3%
15.6%
(c) Adjusted EBITDA (2)
242,207
239,390
195,128
24.1%
22.7%
961,924
828,497
754,836
27.4%
9.8%
(e) = (c)/(b) Adjusted EBITDA Margin
40.7%
40.9%
38.6%
210 bps 230 bps
41.5%
40.9%
43.1%
-160 bps -220 bps *For the three months period ended
December 31, 2022, "2022 Ex Acquisitions" excludes: Garanhuns (only
October, 2022; Closing of Garanhuns was in November, 2021), and
Além da Medicina, Cardiopapers, and Glic (all from October to
December, 2022; Closing of Além da Medicina, Cardiopapers, and Glic
were in 2022). *For the fiscal year ended December 31, 2022,
“ex-Acquisitions” excludes: UNIFIPMoc and FIPGuanambi (from January
to May, 2022; Closing of UNIFIPMoc and FIPGuanambi was in June
2021), UNIGRANRIO (from January to July 2022; Closing of UNIGRANRIO
was in August 2021), Garanhuns (from January to October, 2022;
Closing of Garanhuns was in November 2021), iClinic (only January
2022; Closing of iClinic was in January 2021), Medicinae (from
January to March 2022; Closing of Medicinae was in March 2021),
Medical Harbour (from January to April 2022; Closing of Medical
Harbour was in April 2021), Cliquefarma (from January to April
2022; Closing of Cliquefarma was in April 2021), Shosp (from
January to May 2022; Closing of Shosp was in May 2021), RX PRO
(from January to September, 2022; Closing of RX PRO was in October
2021), and Além da Medicina, Cardiopapers and Glic (all from
January to December, 2022; Closing of Além da Medicina,
Cardiopapers, and Glic were in 2022). (1) Includes mandatory
discounts in tuition fees granted by state decrees and
individual/collective legal proceedings and public civil
proceedings due to COVID 19 on site classes restriction, and
excludes any recovery of these discounts that were invoiced based
on the Supreme Court decision. (2) See more information on
"Non-GAAP Financial Measures" (Item 10).
Message from Management
We proudly present another year of outstanding operational and
financial performance for Afya. Once again, we have proven the
resilience of our business, the successful execution of our
strategy, the commitment of our team members, and the consistency
of our business model.
This year was marked by significant increases in net revenue
within our three segments, solid cash generation, and robust EPS
growth, showing our consistent business expansion. All these
factors combined have enabled us to achieve our 2022 guidance, and
we are now facing forward to the goals for 2023.
We are delighted to see that the most significant growth of the
year, in terms of revenue, came from our Continue Education
segment. With a robust intake process, six new campuses, and course
maturation, combined with the return of our practical classes, we
can finally see our students, employees, and partners extracting
the best from our ecosystem again after a challenging scenario
during the pandemic.
Our second most significant growth came from our core business -
the Undergrad segment -as we saw important movements throughout the
year. First, the successful opening of four Mais Médicos campuses –
Abaetetuba, Bragança, Itacoatiara, and Manacapuru - added 200 new
medical seats to our portfolio. Second, the completeness of
Unigranrio’s integration process in October, one year after its
acquisition, proves our commitment to extracting synergies within
the operation. Third, the increase of 92 new medical seats, 28 in
the UniSL Ji-Paraná campus, located in Rondônia, and 64 in
Faculdade Santo Agostinho, in the city of Itabuna, situated in the
state of Bahia. And last but not least, the announcement of our
largest acquisition so far, UNIT Alagoas and FITS Jaboatão dos
Guararapes, adding 340 more medical seats to our base. These
movements allowed us to reach an impressive number of 3,163 medical
operating seats today, strengthening our consolidation as the
medical undergrad leader in Brazil. All this effort means one
thing: our medical education business remains, and will continue to
be, the cornerstone of our business in the short and middle terms,
delivering highly predicted growth combined with solid
profitability and cash generation.
We are proud to see another year of strong inorganic and organic
growth in our Digital Services segment. With three relevant
acquisitions – Além da Medicina, Cardiopapers, and Glic -our 6
pillars strategy within the B2P is now complete, and our focus is
on further exploring the development of our ecosystem. This
strategy is being built with multiple offerings, unlocking new
interactions and revenue streams beyond the physicians, achieving
pharma players, hospitals, labs, and drugstore chains, and
empowering our B2B strategy. In 2022, we closed almost 100
contracts with around 45 pharma companies, and we can gladly see
the ramp-up of this part of the business quarter by quarter, as we
have been now disclosing our B2B figures for a better
perspective.
Afya´s 2022 Net Revenues was at least three times higher than in
2019, the year of our IPO. Furthermore, we have marked an
approximate expansion regarding profitability and cash generation.
With more than 200bps in EBITDA margin expansion, the cash
conversion rate has continued to perform above 90%, showing our
capacity to deliver strong growth expanding profitability and cash
generation. Lastly, our EPS has increased more than two times since
2019, proving our capacity to combine organic and inorganic growth
with strong capital allocation discipline and, consequently, great
returns to our shareholders.
It is important to remark that Afya´s 2022 tripled its net
revenue compared to 2019, the year of our IPO. Furthermore,
regarding Profitability and Cash Generation, we have marked an
approximate expansion of 300bps in Adjusted Ebitda Margin.
Moreover, the Operating Cash Conversion rate has continued to
perform above 90%, showing our capacity to deliver strong growth
with profitability. Lastly, our EPS has doubled since 2019, proving
our capacity to combine organic and inorganic growth with strong
capital allocation discipline and, consequently, great returns to
our shareholders.
As a reflection of our outstanding results and actions that are
being shown to the market, we could joyfully celebrate several
awards recognitions this year, such as “Anuário Época Negócios
360º”, “2022 Valor Inovação Brasil”, “Institutional Investor 2022”,
“Great Place to Work,” “Bloomberg Gender-Equality Index,” “TOP 100
Open Corps 2022”, among others. We are very proud of all these
achievements, as they reflect the work and passion of our thousands
of employees around a unique vision: to transform health together
with those who have medicine as a vocation.
Strong performance, consistent growth, success in all segments,
and public recognition: this is how we are evolving and empowering
our mission to provide an ecosystem that integrates education and
digital solutions for the entire medical journey, enhancing the
development, updating, assertiveness, and productivity of health
professionals. We are very proud of our business and what we have
achieved so far, and excited the future.
1. Key Events in the Quarter:
- Afya announced on October 13th, 2022, that it has entered into
a share purchase agreement for the acquisition of 100% of the total
share capital of Sociedade Educacional e Cultural Sergipe DelRey
Ltda., that encompasses the operations of Centro Universitário
Tiradentes Alagoas ("UNIT Alagoas”) and Faculdade Tiradentes
Jaboatão dos Guararapes ("FITS Jaboatão dos Guararapes”). The
acquisition will contribute 340 medical school seats to Afya. The
aggregate purchase price (enterprise value) is R$825.0 million
before the deduction of Net Debt that will be calculated at the
closing date, and it will be paid as follows: R$575 million in cash
on the transaction closing date and R$250 million in three annual
installments, respectively, of R$150 million, R$50 million, and
R$50 million, adjusted by the Brazilian interest rate (SELIC). We
expected an EV/EBITDA of 5.8x at maturity and post synergies
(2024). With the acquisition, Afya further consolidates its
presence in the Brazilian Northeast, entering a new state in the
region.
- Afya announced on December 6th, 2022, its intention to issue,
through its wholly-owned subsidiary Afya Participações S.A, 500,000
simple, non-convertible, unsecured debentures in a single series,
each with a par value of R$1,000, totaling an aggregate amount of
R$500 million, by means of a proposed public distribution with
restricted placement efforts in the Brazilian market, under the
terms of the Brazilian Securities and Exchange Commission Rule No.
476, dated January 16, 2009, and is not being generally made
anywhere outside of Brazil, including in the United States or to US
investors. Accordingly, the Debentures will not be registered under
the United States Securities Act of 1933, as amended and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration under the Securities Act.
Afya intends to use the proceeds of the Offering for general
corporate purposes, strengthening its cash position, and extending
its debt maturity profile. The Debentures are intended to be issued
with a maturity date of January 15, 2028, with the principal to be
amortized in two equal installments payable on January 15, 2027 and
January 15, 2028, corresponding to the fourth and fifth years of
the transaction, respectively. On December 16th, 2022, Afya
announced the closing of the issuance under the aforementioned
terms. The Debentures bear interest at 100% of the CDI interest
rate (the average of interbank overnight rates in Brazil, based on
252 business days) plus 1.80% per year, payable semi-annually on
January 15 and July 15 of each year, until the maturity date.
- Afya announced on December 9th, 2022, that Mr. Flávio Dias, a
board member since July 2020, has ended his term as an independent
member of the Board of Directors, and will not be renewed. The
remaining independent board members will have their term extended
until Afya’s next Annual General Meeting. Furthermore, Afya also
announced that Mr. Daulins Emilio, a board member since August
2019, has submitted his resignation letter as a member of the Board
of Directors and, consequently, Bertelsmann SE&Co. KGaA has
appointed Mrs. Tina Krebs as his replacement, effective as of that
date. With these changes, the number of women members now
represents 40% of the Board of Directors. Afya’s Board of Directors
is composed of two co-chairmen - one representing Bertelsmann
SE&Co. KGaA, and one representing the Esteves family -, one
more member of the Esteves family, three more members of
Bertelsmann SE&Co. KGaA, one member from Softbank and three
independent members, resulting in a diversity of skills and
experience to enhance Afya’s decision-making.
- Afya announced on December 29th, 2022, that the Secretary of
Regulation and Supervision of Higher Education of the Ministry of
Education (“MEC”) authorized the increase of 64 medical seats of
Faculdade Santo Agostinho, in the city of Itabuna, located in the
state of Bahia. With the authorization, Afya reached 149 medical
seats on this campus.
2. Subsequent Events in the Quarter:
- Afya announced on January 3rd, 2023, the closing of its
acquisition of 100% of the total share capital of Sociedade
Educacional e Cultural Sergipe DelRey Ltda. (“DelRey”), that
encompasses the operations of Centro Universitário Tiradentes
Alagoas (“UNIT Alagoas”) and Faculdade Tiradentes Jaboatão dos
Guararapes (“FITS Jaboatão dos Guararapes”), on the terms
previously disclosed.
- Afya announced on January 31st, 2023, that it is one of 484
companies across 45 countries and regions to join the 2023
Bloomberg Gender-Equality Index (GEI), a modified market
capitalization-weighted index that aims to track the performance of
public companies committed to transparency in gender-data
reporting. This reference index measures gender equality across
five pillars: leadership & talent pipeline, equal pay &
gender pay parity, inclusive culture, anti-sexual harassment
policies, and external brand. For the second time in a row, Afya
was included on the index for scoring above a global threshold
established by Bloomberg to reflect disclosure and the achievement
or adoption of best-in-class statistics and policies, being 1 of 16
Brazilian companies included in the index this year.
3. Full Year 2022 Guidance Achievement
The Company’s financial results reaffirmed the resiliency and
predictability of Afya’s business model. Excluding Cardiopapers and
Glic, the Adjusted Net Revenue of R$2,308.8 million and the
Adjusted EBITDA of R$960.7 million were in the mid-guidance
range.
Guidance for 2022 Actual 2022 Adjusted Net Revenue R$
2,280 mn ≤ ∆ ≤ R$ 2,360 mn R$ 2,309 mn Adjusted EBITDA R$ 935 mn ≤
∆ ≤ R$ 1.015 mn R$ 961 mn Includes four Mais Médicos units
start operating in 2H22;Includes Ji-Parana acquisition start
operating in the 2H22;Includes Além da Medicina
acquisition;Excludes any acquisition that may be concluded after
the issuance of the guidance, such as Cardiopapers and Glic.
4. 2023 Guidance
The Company is introducing guidance for 2023 which considers the
successfully concluded acceptances of new medical students,
ensuring 100% occupancy in all of its medical schools.
Considering the above factors, the guidance for 2023 is defined
in the following table:
Guidance for 2023 Adjusted Net Revenue* R$ 2,750 mn ≤ ∆ ≤ R$
2,850 mn Adjusted EBITDA R$ 1,100 mn ≤ ∆ ≤ R$ 1,200 mn
Includes UNIT Alagoas and FITS Jaboatão dos Guararapes'
acquisitions;Includes the increase of 64 medical seats of Faculdade
Santo Agostinho, in the city of Itabuna;Excludes any acquisition
that may be concluded after the issuance of the guidance.
5. 4Q22 and 2022 Overview
Operational Review
Afya is the only Company offering educational and technological
solutions to support physicians across every stage of their medical
career, from undergraduate students in their medical school years
through medical residency preparatory courses, medical
specialization programs, and continuing medical education. The
Company also offers solutions to empower physicians in their daily
routine, including supporting clinic decisions through mobile app
subscription, delivering practice management tools through a
Software as a Service (SaaS) model, and assisting physicians in
their relationship with their patients.
The Company reports results for three distinct business units -
the first, Undergrad – medical schools, other healthcare programs,
and ex-health degrees. Revenue is generated from the monthly
tuition fees the Company charges students enrolled in the
undergraduate programs - the second, Continuing Education –
specialization programs and graduate courses for physicians.
Revenue is also generated from the monthly tuition fees the Company
charges students enrolled in the specialization and graduate
courses. The third is Digital Services – digital services offered
by the Company at every stage of the medical career. This business
unit is divided into Business to Physician (which encompasses
Content & Technology for Medical Education, Clinical Decision
Software, Practice Management Tools & Electronic Medical
Records, Physician-Patient Relationship, Telemedicine, and Digital
Prescription) and Business to Business (which provides access and
demand for the healthcare players). Revenue is generated from
printed books and e-books and is recognized at the point in time
when control is transferred to the customer, and subscription fees,
which are recognized as the services, are transferred over
time.
Key Revenue Drivers – Undergraduate Courses
Table 2: Key Revenue Drivers Twelve months period
ended December 31,
2022
2021
% Chg
Undergrad Programs MEDICAL SCHOOL Approved Seats¹
2,823
2,731
3.4%
Operating Seats
2,773
2,481
11.8%
Total Students (end of period)
17,968
16,017
12.2%
Average Total Students
17,761
14,492
22.6%
Average Total Students (ex-Acquisitions)²
15,883
14,492
9.6%
Tuition Fees (Total - R$MM)
2,032,888
1,511,442
34.5%
Tuition Fees (ex- Acquisitions² - R$MM)
1,791,590
1,511,442
18.5%
Medical School Gross Avg. Ticket (ex- Acquisitions² -
R$/month)
9,400
8,615
9.1%
Medical School Net Avg. Ticket (ex- Acquisitions² -
R$/month)
7,896
7,115
11.0%
UNDERGRADUATE HEALTH SCIENCE Total Students (end of period)
17,967
19,882
-9.6%
Average Total Students
19,441
15,918
22.1%
Average Total Students (ex-Acquisitions)²
15,293
15,918
-3.9%
Tuition Fees (Total - R$MM)
336,238
239,235
40.5%
Tuition Fees (ex- Acquisitions² - R$MM)
249,550
239,235
4.3%
OTHER UNDERGRADUATE Total Students (end of period)
22,265
25,219
-11.7%
Average Total Students
23,376
20,198
15.7%
Average Total Students (ex-Acquisitions)²
16,209
20,198
-19.7%
Tuition Fees (Total - R$MM)
266,306
239,776
11.1%
Tuition Fees (ex- Acquisitions² - R$MM)
200,690
239,776
-16.3%
TOTAL TUITION FEES Tuition Fees (Total - R$MM)
2,635,432
1,990,453
32.4%
Tuition Fees (ex- Acquisitions² - R$MM)
2,241,830
1,990,453
12.6%
1) Approved and Operating seats does not include UNIT Alagoas and
FITS Jaboatão dos Guararapes' acquisition that was closed on
January 2nd, 2023; 2) For the fiscal year ended December 31, 2022,
“ex-Acquisitions” excludes: UNIFIPMoc and FIPGuanambi (from January
to May, 2022; Closing of UNIFIPMoc and FIPGuanambi was in June
2021), UNIGRANRIO (from January to July 2022; Closing of UNIGRANRIO
was in August 2021), and Garanhuns (from January to October, 2022;
Closing of Garanhuns was in November 2021).
Key Revenue Drivers – Continuing Education and Digital
Services
Table 3: Key Revenue Drivers Twelve months period
ended December 31,
2022
2021
% Chg
Continuing Education Medical Specialization &
Others Total Students (end of period)
4,280
3,189
34.2%
Average Total Students
3,835
3,252
17.9%
Average Total Students (ex-Acquisitions)
3,835
3,252
17.9%
Net Revenue from courses (Total - R$MM)
108,806
72,983
49.1%
Net Revenue from courses (ex- Acquisitions¹)
108,806
72,983
49.1%
Digital Services Content & Technology for Medical
Education Medcel Active Payers Prep Courses & CME - B2P
14,569
17,171
-15.2%
Prep Courses & CME - B2B
5,887
4,460
32.0%
Além da Medicina Active Payers
6,081
-
n.a.
Cardiopapers Active Payers
5,034
-
n.a.
Medical Harbour Active Payers
7,668
-
n.a.
Clinical Decision Software Whitebook Active Payers
137,767
125,372
9.9%
Clinical Management Tools² iClinic Active Payers
22,764
17,978
26.6%
Shosp Active Payers
2,915
2,305
26.5%
Digital Services Total Active Payers (end of period)
202,685
167,286
21.2%
Net Revenue from Services (Total - R$MM)
189,984
151,958
25.0%
Net Revenue - B2P
166,515
142,716
16.7%
Net Revenue - B2B
23,469
9,242
153.9%
Net Revenue From Services (ex-Acquisitions¹)
157,943
151,958
3.9%
(1) For the fiscal year ended December 31, 2022, “ex-Acquisitions”
excludes: iClinic (only January 2022; Closing of iClinic was in
January 2021), Medicinae (from January to March 2022; Closing of
Medicinae was in March 2021), Medical Harbour (from January to
April 2022; Closing of Medical Harbour was in April 2021),
Cliquefarma (from January to April 2022; Closing of Cliquefarma was
in April 2021), Shosp (from January to May 2022; Closing of Shosp
was in May 2021), RX PRO (from January to September, 2022; Closing
of RX PRO was in October 2021), and Além da Medicina, Cardiopapers
and Glic (all from January to December, 2022; Closing of Além da
Medicina, Cardiopapers and Glic were in 2022). (2) Clinical
management tools includes Telemedicine and Digital Prescription
features.
Key Operational Drivers – Digital Services
Monthly Active Users (MaU) represents the number of unique
individuals that consumed Digital Services content in each one of
our products in the last 30 days of a specific period.
Total monthly active users reached more than 260 thousand, 5.3%
higher than the same period of last year.
Monthly Unique Active Users (MuaU) represents the number of
unique individuals, without overlap of users among products, in the
last 30 days of a specific period. Since this concept started to be
implemented this year, the historical metrics of MuaU could not be
disclosed.
Table 4: Key Operational Drivers for Digital Services - Monthly
Active Users (MaU)
4Q22
4Q21
% Chg YoY
3Q22
% Chg QoQ Content & Technology for Medical
Education
16,539
16,205
2.1%
21,811
-24.2%
Clinical Decision Software
221,762
194,308
14.1%
239,640
-7.5%
Clinical Management Tools¹
20,936
37,030
-43.5%
23,036
-9.1%
Physician-Patient Relationship
1,473
-
n.a.
1,397
5.4%
Total Monthly Active Users (MaU) - Digital Services
260,710
247,543
5.3%
285,884
-8.8%
1) Clinical management tools includes Telemedicine and Digital
Prescription features 2) Clinical management tools MAU excludes
other users other than payors, starting in 1Q22 3) Shosp, Medicinae
and Além da Medicina starting in 1Q22 4) Cardiopapers and Glic
starting in 2Q22
Table 5: Key Operational Drivers for
Digital Services - Monthly Unique Active Users (MuaU)
4Q22
Total Monthly Unique Active Users (MuaU) - Digital Services
241,949
1) Total Monthly Unique Active Users excludes non-integrated
companies: Medical Harbour, Medicinae, Shosp, Além da Medicina,
Cardiopapers and Glic
Seasonality
Undergrad’s tuition revenues are related to the intake process
and monthly tuition fees charged to students over the period; thus
does not have significant fluctuations during the semester.
Continuing Education revenues are related to monthly intakes and
tuition fees and do not have a considerable concentration in any
period. Digital Services is comprised mainly of Medcel, Pebmed, and
iClinic revenues. While Pebmed and iClinic do not have significant
fluctuation regarding seasonality, Medcel’s revenue is concentrated
in the first and last quarter of the year due to the enrollments of
Medcel’s clients period. In addition, the majority of Medcel’s
revenues are derived from printed books and e-books, which are
recognized at the point in time when control is transferred to the
customer. Consequently, the Digital Services segment generally has
higher revenues and results of operations in the first and last
quarters of the year than in the second and third quarters.
Revenue
Adjusted Net Revenue for the fourth quarter of 2022 was R$595.1
million, an increase of 17.8% over the same period of the prior
year, mainly due to higher tickets in Medicine courses, maturation
of medical seats, the beginning of 4 Mais Médicos campuses, the
Continuing Education segment recovery, after practical activities
were resumed after Covid 19 pandemic and Digital Services
performance.
The Digital Services segment increased 31.6% year over year, a
combination of (a) a great start of the B2B engagements, reaching
roughly 100 contracts – including pharma solutions and RX PRO
contracts -with 45 different pharmaceutical industry companies, and
(b) expansion of the active payers in the B2P, mainly in Whitebook,
iClinic, and Shosp, partially offset by the lower performance of
Medcel, due to a higher competition scenario in the Residency
Preparatory market.
For the twelve months ending December 31, 2022, Adjusted Net
Revenue was R$2,319.1 million, an increase of 32.3% over the same
period last year.
For the year ended December 31, 2022, the Company has invoiced
R$9.9 million from previous periods, net of discounts granted due
to COVID-19 and net of provisions, being the amount substantially
arising from its subsidiary FCMPB, following a lower court decision
that suspended the granted discounts in favor of the Company but
with restrictions on the collection in such invoices (R$ 33,081
discounts given, net of discounts recovered, for the year ended
December 31, 2021). The outstanding balances are classified as
accounts receivables. Afya has excluded these mandatory discounts
from Adjusted Net Revenue in 2020 and 2021, the recovery of these
amounts are not accounted for in Adjusted Net Revenue in 2022.
Table 6: Revenue & Revenue Mix (in thousands of R$)
For the three months period ended December 31, For the
twelve months period ended December 31,
2022
2022 Ex Acquisitions*
2021
% Chg
% Chg Ex Acquisitions
2022
2022 Ex Acquisitions*
2021
% Chg
% Chg Ex Acquisitions
Net Revenue Mix Undergrad
499,852
498,724
438,063
14.1%
13.8%
2,037,889
1,777,484
1,498,408
36.0%
18.6%
Adjusted Undergrad¹
510,988
509,860
445,211
14.8%
14.5%
2,027,963
1,767,558
1,531,765
32.4%
15.4%
Continuing Education
33,238
33,238
21,502
54.6%
54.6%
108,806
108,806
72,983
49.1%
49.1%
Digital Services
55,741
46,893
42,345
31.6%
10.7%
189,984
157,943
151,958
25.0%
3.9%
Inter-segment transactions
-4,829
-4,829
- 3,651
32.3%
32.3%
-7,622
-7,622
- 3,978
91.6%
91.6%
Total Reported Net Revenue
584,002
574,027
498,259
17.2%
15.2%
2,329,057
2,036,612
1,719,371
35.5%
18.5%
Total Adjusted Net Revenue ¹
595,138
585,163
505,407
17.8%
15.8%
2,319,131
2,026,686
1,752,728
32.3%
15.6%
*For the three months period
ended December 31, 2022, "2022 Ex Acquisitions" excludes: Garanhuns
(only October, 2022; Closing of Garanhuns was in November, 2021),
and Além da Medicina, Cardiopapers, and Glic (all from October to
December, 2022; Closing of Além da Medicina, Cardiopapers, and Glic
were in 2022).
*For the fiscal year ended
December 31, 2022, “ex-Acquisitions” excludes: UNIFIPMoc and
FIPGuanambi (from January to May, 2022; Closing of UNIFIPMoc and
FIPGuanambi was in June 2021), UNIGRANRIO (from January to July
2022; Closing of UNIGRANRIO was in August 2021), Garanhuns (from
January to October, 2022; Closing of Garanhuns was in November
2021), iClinic (only January 2022; Closing of iClinic was in
January 2021), Medicinae (from January to March 2022; Closing of
Medicinae was in March 2021), Medical Harbour (from January to
April 2022; Closing of Medical Harbour was in April 2021),
Cliquefarma (from January to April 2022; Closing of Cliquefarma was
in April 2021), Shosp (from January to May 2022; Closing of Shosp
was in May 2021), RX PRO (from January to September, 2022; Closing
of RX PRO was in October 2021), and Além da Medicina, Cardiopapers
and Glic (all from January to December, 2022; Closing of Além da
Medicina, Cardiopapers, and Glic were in 2022).
(1) Includes mandatory discounts
in tuition fees granted by state decrees and individual/collective
legal proceedings and public civil proceedings due to COVID 19 on
site classes restriction, and excludes any recovery of these
discounts that were invoiced based on the Supreme Court
decision.
(2) See more information on
"Non-GAAP Financial Measures" (Item 10).
Adjusted EBITDA
Adjusted EBITDA for the three-month period ended December 31,
2022 increased 24.1% to R$242.2 million, up from R$195.1 million in
the same period of the prior year, and the Adjusted EBITDA Margin
increased 210 basis points to 40.7%.
For the twelve-month period ended December 31, 2022, Adjusted
EBITDA was R$961.9 million, an increase of 27.4% over the same
period of the prior year, with an Adjusted EBITDA Margin decrease
of 160 basis points in the same period. The Adjusted EBITDA Margin
reduction is mainly due to the following: (a) Digital segment,
primarily due to Medcel’s performance; (b) increase in corporate
expenses in the period; and (c) launch of the 4 Mais Médicos
campuses in the third-quarter.
Table 7: Adjusted EBITDA (in thousands of R$)
For the
three months period ended December 31, For the twelve months
period ended December 31,
2022
2022 Ex Acquisitions*
2021
% Chg
% Chg Ex Acquisitions
2022
2022 Ex Acquisitions*
2021
% Chg
% Chg Ex Acquisitions
Adjusted EBITDA
242,207
239,390
195,128
24.1%
22.7%
961,924
828,497
754,836
27.4%
9.8%
% Margin
40.7%
40.9%
38.6%
210 bps
230 bps
41.5%
40.9%
43.1%
-160 bps
-220 bps
*For the three months period ended December 31, 2022, "2022 Ex
Acquisitions" excludes: Garanhuns (only October, 2022; Closing of
Garanhuns was in November, 2021), and Além da Medicina,
Cardiopapers, and Glic (all from October to December, 2022; Closing
of Além da Medicina, Cardiopapers, and Glic were in 2022). *For the
fiscal year ended December 31, 2022, “ex-Acquisitions” excludes:
UNIFIPMoc and FIPGuanambi (from January to May, 2022; Closing of
UNIFIPMoc and FIPGuanambi was in June 2021), UNIGRANRIO (from
January to July 2022; Closing of UNIGRANRIO was in August 2021),
Garanhuns (from January to October, 2022; Closing of Garanhuns was
in November 2021), iClinic (only January 2022; Closing of iClinic
was in January 2021), Medicinae (from January to March 2022;
Closing of Medicinae was in March 2021), Medical Harbour (from
January to April 2022; Closing of Medical Harbour was in April
2021), Cliquefarma (from January to April 2022; Closing of
Cliquefarma was in April 2021), Shosp (from January to May 2022;
Closing of Shosp was in May 2021), RX PRO (from January to
September, 2022; Closing of RX PRO was in October 2021), and Além
da Medicina, Cardiopapers and Glic (all from January to December,
2022; Closing of Além da Medicina, Cardiopapers, and Glic were in
2022).
Adjusted Net Income
Net Income for the fourth quarter of 2022 was R$71.3 million, an
increase of 45.6% over the same period of the prior year. Adjusted
Net Income for the fourth quarter of 2022 was R$128.8 million, an
increase of 30.8% over the same period from the previous year.
For the twelve-month period ended December 31, 2022, Net Income
increased 62.1%, from R$242.3 million to R$392.8 million, mainly
due to: (a) the increase in operational results, as previously
described, (b) the reduction of the tax yield and (c) the reduction
of non-recurring expenses. Adjusted Net Income for the twelve-month
period of 2022 was R$535.1 million, an increase of 21.5% year over
year.
Our EPS reached R$4.14 per share for the twelve-month period
ended December 31, 2022, an increase of 73.2% year over year,
reflecting the increase in our Net Income and capital allocation
discipline executing our business combination and three buyback
programs in a row.
Table 8: Adjusted Net Income (in thousands of R$)
For the
three months period ended December 31, For the twelve months
period ended December 31,
2022
2021
% Chg
2022
2021
% Chg Net income
71,331
49,001
45.6%
392,756
242,283
62.1%
Amortization of customer relationships and trademark (1)
22,015
15,450
42.5%
77,974
61,465
26.9%
Share-based compensation
10,860
9,427
15.2%
31,274
43,377
-27.9%
Non-recurring expenses:
24,547
24,580
-0.1%
33,133
93,305
-64.5%
- Integration of new companies (2)
7,748
6,128
26.4%
24,763
18,856
31.3%
- M&A advisory and due diligence (3)
- 697
1,522
n.a.
2,497
13,520
-81.5%
- Expansion projects (4)
1,053
3,739
-71.8%
3,411
10,204
-66.6%
- Restructuring expenses (5)
5,307
6,043
-12.2%
12,388
17,368
-28.7%
- Mandatory Discounts in Tuition Fees (6)
11,136
7,148
55.8%
- 9,926
7,148
n.a.
Adjusted Net Income
128,753
98,458
30.8%
535,137
440,430
21.5%
Minority Net Income
4,638
4,032
15.0%
19,187
18,957
1.2%
Adjusted Net Income attributable to equity holders of the Parent
124,115
94,426
31.4%
515,950
421,473
22.4%
Basic earnings per share - in R$ (7)
0.74
0.48
53.3%
4.14
2.39
73.2%
Adjusted earnings per share - in R$ (8)
1.38
1.01
36.2%
5.71
4.52
26.4%
(1) Consists of amortization of customer relationships and
trademark recorded under business combinations. (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/collective legal
proceedings and public civil proceedings due to COVID 19 on site
classes restriction, and excludes any recovery of these discounts
that were invoiced based on the Supreme Court decision. (7) Basic
earnings per share: Net Income/Weighted average number of
outstanding shares. (8) Adjusted earnings per share: Adjusted Net
Income attributable to equity holders of the Parent/Weighted
average number of outstanding shares.
Cash and Debt Position
On December 31, 2022, cash and cash equivalents were R$1,093.1
million, an increase of 46.0% over the same period in 2021, due to
a R$500 million debenture issued in December 2022.
For the twelve-month period ended December 31, 2022, Afya
reported Adjusted Cash Flow from Operations of R$877.0 million, up
from R$666.6 million in the same period of the previous year, an
increase of 31.6% YoY, boosted by the solid operational
results.
Operating Cash Conversion Ratio was 94.4% for the twelve-month
period ended December 31, 2022, compared to 100.8% in 2021.
Operating Cash Conversion Ratio in 2021 was positively affected by
the end of the grace period of tuition renegotiation that occurred
in 2020.
On December 31, 2022, net debt, excluding the effect of IFRS 16,
totaled R$1,380.7 million, achieving the same level when compared
to net debt of R$1,378.9 million in the same period in 2021,
supported by the strong cash generation in 2022 of R$ 843.9
million, that was offset by (i) investments activities in
properties, equipment, and intangibles (excluding goodwill)
totaling R$ 297.0 million, (ii) R$ 99.4 million of acquisition of
subsidiaries and (iii) R$ 152.3 million of share repurchase
programs.
The following table shows more information regarding the cost of
debt for 2022, considering loans and financing, capital market and
accounts payable to selling shareholders. Afya’s capital structure
remains solid with a conservative leveraging position and a low
cost of debt. Considering UNIT and FITS acquisition and the mid
guidance for 2023, Afya’s Net Debt/ Adjusted Ebitda would be
1.9x.
Table 9: Gross Debt and Cost of Debt (in thousands of R$)
For the twelve months period ended December 31, Cost of
Debt Gross Debt Duration (Years) per year
%CDI* Loans and financing: Softbank
824,258
3.4
6.5%
53%
Debentures
499,839
4.6
15.7%
114%
Accounts payable to selling shareholdersplus other financial
obligations
528,678
1.2
11.6%
94%
Loans and financing: Others
620,980
2.1
14.1%
113%
Total
2,473,755
2.9
10.2%
83%
*Based on the annualized Interbank Certificates of Deposit ("CDI")
rate for the period as a reference.2022: ~12,39% p.y.
Table 10: Operating Cash Conversion Ratio Reconciliation
For the twelve months period ended December 31, (in
thousands of R$)
Considering the adoption of IFRS 16
2022
2021
% Chg
(a) Cash flow from operations
843,899
630,867
33.8%
(b) Income taxes paid
33,089
35,683
-7.3%
(c) = (a) + (b) Adjusted cash flow from operations
876,988
666,550
31.6%
(d) Adjusted EBITDA
961,924
754,836
27.4%
(e) Non-recurring expenses:
33,133
93,305
-64.5%
- Integration of new companies (1)
24,763
18,856
31.3%
- M&A advisory and due diligence (2)
2,497
13,520
-81.5%
- Expansion projects (3)
3,411
10,204
-66.6%
- Restructuring Expenses (4)
12,388
17,368
-28.7%
- Mandatory Discounts in Tuition Fees (5)
-9,926
33,357
n.a.
(f) = (d) - (e) Adjusted EBITDA ex- non-recurring expenses
928,791
661,531
40.4%
(g) = (c) / (f) Operating cash conversion ratio
94.4%
100.8%
-640 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/collective legal
proceedings and public civil proceedings due to COVID 19 on site
classes restriction, and excludes any recovery of these discounts
that were invoiced based on the Supreme Court decision.
Table
11: Cash and Debt Position (in thousands of R$)
FY2022
FY2021
% Chg
(+) Cash and Cash Equivalents
1,093,082
748,562
46.0%
Cash and Bank Deposits
57,509
88,487
-35.0%
Cash Equivalents
1,035,573
660,075
56.9%
(-) Loans and Financing
1,882,901
1,374,876
37.0%
Current
145,202
128,720
12.8%
Non-Current
1,737,699
1,246,156
39.4%
(-) Accounts Payable to Selling Shareholders
528,678
679,826
-22.2%
Current
261,711
239,849
9.1%
Non-Current
266,967
439,977
-39.3%
(-) Other Short and Long Term Obligations
62,176
72,726
-14.5%
(=) Net Debt (Cash) excluding IFRS 16
1,380,673
1,378,866
0.1%
(-) Lease Liabilities
769,525
714,085
7.8%
Current
32,459
24,955
30.1%
Non-Current
737,066
689,130
7.0%
Net Debt (Cash) with IFRS 16
2,150,198
2,092,951
2.7%
CAPEX
Capital expenditures consist of the purchase of property and
equipment and intangible assets, including expenditures mainly
related to the expansion and maintenance of our campuses and
headquarters, leasehold improvements, and the development of new
solutions in the digital segment, among others.
For the twelve-month period ending December 31, 2022, CAPEX went
from R$302.0 million to R$318.2 million, an increase of 5.4% over
the prior year, representing 13.7% of Afya’s Net Revenue in 2022
against 17.2% in 2021. The increase in expenditures was mainly due
to: (a) expenditures with property and equipment that increased
33.6% YoY, especially related to Unigranrio campuses, partially
offset by a 14.8% decrease in intangible assets, mainly due to the
reduction of license acquisition.
Table 12: CAPEX (in thousands of R$)
For the twelve
months period ended December 31,
2022
2021
% Chg
CAPEX
318,155
301,979
5.4%
Property and equipment
168,132
125,869
33.6%
Intangible assets
150,023
176,110
-14.8%
- Licenses
24,408
108,000
-77.4%
- Goodwill
39,100
-
n.a.
- Others
86,515
68,110
27.0%
ESG Metrics
ESG commitment is essential to Afya’s strategy and permeates the
Company’s core values. Afya has been advancing year after year on
its core pillars, and since 2021, ESG metrics have been disclosed
in the Company’s quarterly financial results.
On January 2023, Afya announced it is one of 484 companies
across 45 countries and regions to join the 2023 Bloomberg
Gender-Equality Index (GEI), a modified market
capitalization-weighted index that aims to track the performance of
public companies committed to transparency in gender-data
reporting. This reference index measures gender equality across
five pillars: leadership & talent pipeline, equal pay &
gender pay parity, inclusive culture, anti-sexual harassment
policies, and external brand. In addition, for the second time in a
row, Afya was included on the index for scoring above a global
threshold established by Bloomberg to reflect disclosure and the
achievement or adoption of best-in-class statistics and policies,
being 1 of 16 Brazilian companies included in the index this
year.
Furthermore, the 2021 Sustainability Report can be found at:
https://ir.afya.com.br/ >> Corporate Governance >>
Sustainability.
Table 12: ESG Metrics¹³⁴
4Q22
4Q21
2022
2021
2020
2019
#
GRI Governance and Employee Management
1
405-1
Number of employees
8,708
8,079
8,708
8,079
6,100
3,369
2
405-1
Percentage of female employees
57%
55%
57%
55%
55%
57%
3
405-1
Percentage of female members in the board of directors
40%
18%
40%
18%
18%
22%
4
102-24
Percentage of independent member in the board of directors
30%
36%
30%
36%
36%
22%
Environmental
4
302-1
Total energy consumption (kWh)
5,379,440
3,677,462
17,011,842
12,176,966
8,035,845
5,928,450
4.1
302-1
Consumption per campus
122,260
114,921
412,747
385,573
321,434
395,230
5
302-1
% supplied by distribution companies
72.5%
93.38%
72.4%
91.3%
83.4%
96.2%
6
302-1
% supplied by other sources²
27.5%
6.62%
27.6%
8.7%
16.6%
3.8%
Social
8
413-1
Number of free clinical consultations offered by Afya
141,962
40,556
494,635
341,286
427,184
270,000
9
Number of physicians graduated in Afya's campuses
18,104
16,772
18,104
16,772
12,691
8,306
10
201-4
Number of students with financing and scholarship programs (FIES
and PROUNI)
10,965
7,881
10,965
7,881
4,999
2,808
11
% students with scholarships over total undergraduate students
18.8%
12.9%
18.8%
12.9%
13.7%
11.7%
12
413-1
Hospital, clinics and city halls partnerships
662
447
662
447
432
60
(1) Some factors can influence in the adequate proportionality
analysis of data over the years, such as: climate changes, COVID-19
pandemic effects, seasonalities, number of employees, number of
students, number of active units, among others. (2) "Other sources"
refers to: (a) Derived from renewable sources, such as solar panels
installed in the units; and (b) Derived from the search for
alternative energy options in the market. (3) Starting in 2Q22,
previously disclosed environmental data were updated to consider:
(a) GHG Protocol guidelines improvements, and (b) additional
data-collection criteria refinements. (4) Starting in 2Q22,
previously disclosed social data were updated to consider: (a) the
number of graduated physicians considering all units after its
closing, and (b) partnerships related only to medical schools.
6. Conference Call and Webcast Information
When:
March 22, 2023 at 5:00 p.m.
ET.
Who:
Mr. Virgilio Gibbon, Chief Executive
Officer
Mr. Luis André Blanco, Chief Financial
Officer
Ms. Renata Costa Couto, IR Director
Webcast:
https://afya.zoom.us/j/94816959070
OR
Dial-in: Brazil: +55 11 4632 2236 or +55 11 4632 2237 or +55
11 4680 6788 or +55 11 4700 9668 or +55 21 3958 7888
United States: +1 360 209 5623 or +1 386 347 5053 or +1 507 473
4847 or +1 564 217 2000 or +1 646 931 3860 or +1 669 444 9171 or +1
669 900 6833 or +1 689 278 1000 or +1 719 359 4580 or +1 929 205
6099 or +1 253 205 0468 or +1 253 215 8782 or +1 301 715 8592 or +1
305 224 1968 or +1 309 205 3325 or +1 312 626 6799 or +1 346 248
7799
Webinar ID: 948 1695 9070
Other Numbers: https://afya.zoom.us/u/abOZO7NH31
7. About Afya Limited (Nasdaq: AFYA)
Afya is a leading medical education group in Brazil based on the
number of medical school seats, delivering an end-to-end
physician-centric ecosystem that serves and empowers students and
physicians to transform their ambitions into rewarding lifelong
experiences from the moment they join us as medical students
through their medical residency preparation, graduation program,
continuing medical education activities and offering digital
products to help doctors enhance their healthcare services through
their whole career. For more information, please visit
www.afya.com.br.
8. 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, and include 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 students and professors; 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 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 are included in
the 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/.
9. 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 Adjusted EBITDA and
Operating Cash Conversion Ratio information, which are non-GAAP
financial measures, for the convenience of investors. A non-GAAP
financial measure is generally defined as one that intends to
measure financial performance but excludes or includes amounts that
would not be equally 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 share of
income of associate plus/minus non-recurring expenses. The
calculation of Adjusted Net Income is net income plus amortization
of customer relationships and trademark, plus share-based
compensation. We calculate Operating Cash Conversion Ratio as the
cash flow from operations, adjusted with income taxes paid divided
by Adjusted EBITDA plus/minus non-recurring expenses.
Management presents Adjusted EBITDA, because it believes these
measures provide investors with a supplemental measure of 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
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.
10. Investor Relations Contact
E-mail: ir@afya.com.br
11. Financial Tables
Consolidated statements of financial
position As of December 31, 2022 and 2021 (In thousands of
Brazilian reais)
2022
2021
Assets
Current assets
Cash and cash equivalents
1,093,082
748,562
Trade receivables
452,831
378,351
Inventories
12,190
11,827
Recoverable taxes
27,809
25,579
Other assets
51,745
42,533
Total current assets
1,637,657
1,206,852
Non-current assets
Trade receivables
42,568
27,442
Other assets
191,756
180,306
Investment in associate
53,907
48,477
Property and equipment
542,087
419,808
Right-of-use assets
690,073
663,686
Intangible assets
4,041,491
3,900,835
Total non-current assets
5,561,882
5,240,554
Total assets
7,199,539
6,447,406
Liabilities
Current liabilities
Trade payables
71,482
59,098
Loans and financing
145,202
128,720
Lease liabilities
32,459
24,955
Accounts payable to selling
shareholders
261,711
239,849
Notes payable
62,176
14,478
Advances from customers
133,050
114,585
Labor and social obligations
154,518
131,294
Taxes payable
26,221
26,715
Income taxes payable
16,151
11,649
Other liabilities
2,719
15,163
Total current liabilities
905,689
766,506
Non-current liabilities
Loans and financing
1,737,699
1,246,156
Lease liabilities
737,066
689,130
Accounts payable to selling
shareholders
266,967
439,977
Notes payable
-
58,248
Taxes payable
92,888
96,598
Provision for legal proceedings
195,854
148,287
Other liabilities
13,218
2,486
Total non-current liabilities
3,043,692
2,680,882
Total liabilities
3,949,381
3,447,388
Equity
Share capital
17
17
Additional paid-in capital
2,375,344
2,375,344
Share-based compensation reserve
123,538
94,101
Treasury stock
(304,947)
(152,630)
Retained earnings
1,004,886
631,317
Equity attributable to equity holders
of the parent
3,198,838
2,948,149
Non-controlling interests
51,320
51,869
Total equity
3,250,158
3,000,018
Total liabilities and equity
7,199,539
6,447,406
Consolidated statements of income and
comprehensive income For the years ended December 31, 2022, 2021
and 2020 (In thousands of Brazilian reais, except for earnings per
share information)
2022
2021
2020
Net revenue
2,329,057
1,719,371
1,201,191
Cost of services
(859,552)
(652,300)
(434,654)
Gross profit
1,469,505
1,067,071
766,537
General and administrative expenses
(798,153)
(622,615)
(402,855)
Other (expenses) income, net
(7,252)
(3,561)
(347)
Operating income
664,100
440,895
363,335
Finance income
102,042
64,566
62,290
Finance expenses
(349,893)
(243,796)
(98,269)
Finance result
(247,851)
(179,230)
(35,979)
Share of income of associate
12,184
11,797
7,698
Income before income taxes
428,433
273,462
335,054
Income taxes expenses
(35,677)
(31,179)
(27,067)
Net income
392,756
242,283
307,987
Other comprehensive income
-
-
-
Total comprehensive income
392,756
242,283
307,987
Income attributable to
Equity holders of the parent
373,569
223,326
292,075
Non-controlling interests
19,187
18,957
15,912
392,756
242,283
307,987
Basic earnings per share
Per common share
4.14
2.39
3.15
Diluted earnings per share
Per common share
4.12
2.37
3.12
Consolidated statements of cash flows
For the years ended December 31, 2022, 2021 and 2020 (In thousands
of Brazilian reais)
2022
2021
2020
Operating activities
Income before income taxes
428,433
273,462
335,054
Adjustments to reconcile income before
income taxes
Depreciation and amortization
206,220
154,220
108,744
Write-off of property and equipment
1,697
1,604
-
Write-off of intangible assets
25
2,374
-
Allowance for doubtful accounts
42,708
47,819
32,081
Share-based compensation expense
31,274
43,377
32,610
Net foreign exchange differences
852
17,973
4,613
Net loss (gain) on derivatives
-
-
(20,739)
Accrued interest
200,081
108,437
25,543
Accrued lease interest
88,571
67,212
44,458
Share of income of associate
(12,184)
(11,797)
(7,698)
Provision for legal proceedings
(766)
10,664
5,354
Changes in assets and
liabilities
Trade receivables
(129,165)
(79,665)
(164,286)
Inventories
(363)
(3,720)
(3,110)
Recoverable taxes
(2,230)
(2,327)
(13,709)
Other assets
(1,048)
(19,425)
(23,902)
Trade payables
9,975
14,479
4,475
Taxes payables
(3,915)
(14,902)
(552)
Advances from customers
8,387
36,009
(1,951)
Labor and social obligations
21,247
23,449
11,125
Other liabilities
(12,811)
(2,693)
22,771
876,988
666,550
390,881
Income taxes paid
(33,089)
(35,683)
(19,374)
Net cash flows from operating
activities
843,899
630,867
371,507
Investing activities
Acquisition of property and equipment
(168,132)
(125,869)
(89,832)
Acquisition of intangibles assets
(128,892)
(150,931)
(47,753)
Dividends received
6,754
11,770
-
Acquisition of subsidiaries, net of cash
acquired
(301,199)
(1,017,125)
(919,965)
Restricted cash
-
8,103
14,788
Net cash flows used in investing
activities
(591,469)
(1,274,052)
(1,042,762)
Financing activities
Payments of loans and financing
(118,378)
(158,076)
605,041
Issuance of loans and financing
496,885
809,539
(155,090)
Payments of lease liabilities
(113,512)
(87,751)
(55,455)
Treasury shares
(152,317)
(213,722)
-
Capital increase
-
-
5,444
Proceeds from shares public offering
-
-
389,170
Share issuance costs
-
-
(19,704)
Proceeds from exercise of stock
options
-
33,336
-
Dividends paid to non-controlling
interests
(19,736)
(18,648)
(12,984)
Net cash flows from (used in) financing
activities
92,942
364,678
756,422
Net foreign exchange differences
(852)
(17,973)
16,666
Net increase in cash and cash
equivalents
344,520
(296,480)
101,833
Cash and cash equivalents at the beginning
of the period
748,562
1,045,042
943,209
Cash and cash equivalents at the end of
the period
1,093,082
748,562
1,045,042
Reconciliation between Net Income and Adjusted EBITDA
Reconciliation between Adjusted EBITDA and Net Income
(in thousands of R$)
For the three months period ended December
31, For the twelve months period ended December 31,
2022
2021
% Chg
2022
2021
% Chg Net income
71,331
49,001
45.6%
392,756
242,283
62.1%
Net financial result
67,596
55,549
21.7%
247,851
179,230
38.3%
Income taxes expense
10,065
12,633
-20.3%
35,677
31,179
14.4%
Depreciation and amortization
54,514
42,016
29.7%
206,220
154,220
33.7%
Interest received (1)
5,218
5,093
2.5%
27,197
23,040
18.0%
Income share associate
(1,924)
(3,171)
-39.3%
(12,184)
(11,797)
3.3%
Share-based compensation
10,860
9,427
15.2%
31,274
43,377
-27.9%
Non-recurring expenses:
24,547
24,580
-0.1%
33,133
93,305
-64.5%
- Integration of new companies (2)
7,748
6,128
26.4%
24,763
18,856
31.3%
- M&A advisory and due diligence (3)
(697)
1,522
n.a.
2,497
13,520
-81.5%
- Expansion projects (4)
1,053
3,739
-71.8%
3,411
10,204
-66.6%
- Restructuring expenses (5)
5,307
6,043
-12.2%
12,388
17,368
-28.7%
- Mandatory Discounts in Tuition Fees (6)
11,136
7,148
55.8%
(9,926)
33,357
n.a.
Adjusted EBITDA
242,207
195,128
24.1%
961,924
754,836
27.4%
Adjusted EBITDA Margin
40.7%
38.6%
210 bps
41.5%
43.1%
-160 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/collective legal proceedings and public civil
proceedings due to COVID 19 on site classes restriction, and
excludes any recovery of these discounts that were invoiced based
on the Supreme Court decision.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230322005735/en/
Investor Relations Contact: Afya Limited ir@afya.com.br Media
Contact: Cíntia Moraes Marin cintia.marin@afya.com.br
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