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spk00: Good evening, ladies and gentlemen, and welcome to VITRU's fourth quarter and full year 2021 earnings conference call. All participants are in listening mode now. Later on, we will conduct the question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded and will be available on VITRU's IR website. Now, I would like to introduce your host for today's conference call, Mr. Carlos Fritas, VITRU's CFO. You may begin.
spk01: Thank you, Pereira. Good afternoon, everyone. Thanks for joining us again. It's a pleasure to be here with you all for the release of the fourth quarter 21 numbers, as well as the numbers for the full year of 21. A slide presentation will be part of today's webcast, which is also available in our investor relations website at investors.vitru.com.br. I trust you all have the presentation in front of you. And as usual, before we begin, I'd like to remind you that as detailed in slide two and three of this presentation, safe harbor is in effect for this call. So now I invite you to go to page five. Here on page five, we have the main highlights for last year and fourth quarter of last year. The first one, which is not new, was the announcement of the combination with . which is, as you know, a leading institution here in Brazil with the highest quality indicators in the higher education sector in the country, besides a very sizable business in medicine. This transaction is, as you know, still being evaluated by the last U.S. authority in Brazil, and I'm going to show again to you some numbers of into the market in a few minutes. Second important remark, also not new, is the nursing course that we launched in August of last year. And just after a couple of months, it quickly became our number one course in the intake of the second semester of last year, which is important not only for the expansion of the market as a whole, but also as a tool to sustain tickets and improve tickets over time. Third highlight is that we reached, at the end of last year, nearly 360,000 digital education students, mostly in our core business, which is undergraduation in digital education, in which we had an increase of 27% in the intake of the second semester of last year, and by the way, 32% increase in the first semester of last year. and a very important growth as well in the southeast region where we grew around 45% year on year between December of 21 and December of 20. Going to page six, another important remark is the average ticket. I cannot repeat myself just to say that we have a different business and we have been able to sustain and improve tickets over time, given that we sell a different product than the market. Our average tickets in our core business, again, digital education under graduation, increased by around 6% in the second semester of last year, when compared to the second semester of 2020, and now it reached 278 reais per month. This is a, I'd say, remarkable achievement. We have always said that we have a disciplined approach to tickets. We don't want to grow just for the sake of growing, but we want as well to sustain and improve the tickets. By the way, this was not only the effect of nursing. Nursing is a premium course in which the average ticket is way higher than our normal traditional course. Without nursing, the increase in tickets would have been around 5%. The increase as a whole here in the ticket is in function of our continuous effort to sustain and to maintain a disciplined approach to tickets. Regarding financial numbers, net revenue in our core business increased by 26% last year and the consolidated net revenue increased by 22%. Adjustability increased by 24% last year, with a slight increase in margins as well. Adjustability margin now reaching almost 29%. And finally, regarding cash flow from operations, we had 137 million reais last year, increasing from 2020, with a nice cash conversion ratio of around 83%. So now, on page seven, before we deeper into the numbers of the year. Just a reminder of what we have been doing since the IPO. We said at the time that we would grow in four growth avenues, three organic and one inorganic. We have been doing so. We have been delivering what we promised. Now, the first one was ramp up of curbed hubs, which now represents around two-thirds of expansion hubs student-based and more than 91% of our overall portfolio of hubs is still ramping up, which means an important growth driver with limited education risk. As I said, we grew to 265,000 students as a whole. We opened, as well, around 240 hubs 230 hubs last year, of which almost 100 hubs in the southeast and of which 50 hubs in the state of Sao Paulo. We said a few times that we are still a bit shy, we were still a bit shy in the southeast and that's why the most important organic region for us is That's where we've been focusing and we're doing a lot there in the states in the southeast. Third one would be course offering. I said already about nursing. And soon we will have psychology and law. Law will also come to digital education. That will happen hopefully soon. And once it happens, we'll be again changing movement for the whole industry. And fourth, inorganic about the transaction with Uncidamar that I mentioned a few times already, which is the page now on page eight. Just as a reminder, Uncidamar is a company, an institution with a size more or less similar to the one that we have. These here are the numbers for the second quarter of 2021, which are the latest public information that we show to the market. In a couple of weeks, we're going to release to you the number of pseudo-mortem for 2021 as a whole. But so far what we have here are the numbers for the second quarter of last year. So 40% of just the margin is very nice business in medicine. They are the fifth best education institutions in medicine in Brazil. Medicine represents around 25% of the revenues of the only pseudo-mortem. And they have, as I said before, the best quality indicators when we see the digital education business emerging. On page nine, it's important to highlight and to emphasize that we are going to maintain both brands because they detect different markets. Also, there is an important commercial synergy to be exploited here. Currently, there are around 600 series in which you have only a hub of ownership of the market, but not only a service or vice versa. And here on the right, these are the numbers for the market share and the growth in the market as a whole, which do not yet reflect the new numbers that were released by the Ministry of Education a few weeks ago, with the first numbers of 2020 census. Here you have only the numbers between 16 and 19. This is because we are still waiting for the microdata to be made available by the Ministry of Education. But according to the first numbers that were released, the combined market share of UNEF Selvi and UNEF Zomar reached 20%. It was 10%, 10.5% in 2016, growing over time, so we have been able to grow faster in the market and to gain market share with that. We had 18.5% market share according to the census of the MEC in 2019, and now we have around 20% of the priority digital education market. So we keep gaining market share in function of the differentiation aspect of both institutions, which is here on page 10. Just a quick reminder that we offer our typical hybrid academic model, while we offer a hub-based, home-to-set online model, and we have a different product, that's why we have been able to grow faster than the market. And finally, on page 11, before we jump into the financials, this here is the validation by the clients, by the market. On the left, the grades that we have of our apps, and the app of Sysmart. This is the weekly average between Play Store and Google Store and Apple Store, with the app for the same purpose of each player, with the highest number of evaluations of each player, in fact. And you can see here that we have the highest rate in the industry, knowing that the maximum is five, so we have 4.4. So this confirms the tech-driven approach that we have to education. And by the way, our app now represents around 60% of our enrollment. And this is something we started to offer more or less six, eight months ago. And now it represents around 60% of our intake cycle through our app. So it's a totally different experience for the newcomers. On the right, the reputation index with the in which we have 7.6, 7.8.2. These are, again, the highest numbers among the listed players in Brazil. Jumping to page 12, as I said before, nursing is being offered. We are sustaining tickets with nursing, and we will be able to do so even further with law and psychology once it is approved by the Ministry of Education, which we hope to take place soon. Now, going to the numbers of last year on page 13. We have now around 260,000 students in digital education, 265,000 in total, including the 6,000 we have in on-campus courses. In the chart you have on the right the resolution of digital education students in undergraduation. And by the way, this has been purely on an organic basis, as you all know. So we grew 18% last year, year on year. which is an impressive achievement given the tough comp of 2020. As a reminder, we had a 40% increase in intake in the second semester of 2020. So the bar was already quite high here. Phase 14, as I said, we had an increase in intake last year. of 27% in second semester and 32% in the first semester of around 30% increase in intake last year. And the pie charts show the breakdown of the intake in 2020 and 2021. So here there are a number of points to bear in mind. The first one is the reduction in the black part here of the pie, which is vocational. Vocational means, in Portuguese, , which are shorter courses, courses that have a duration of two years, 2.5 years. So they were 36% of intake. Now they are 32% of intake. And most important is the increase in premium courses. I mean health-related courses and engineering, which have a higher ticket. The average ticket of engineering or health courses such as nursing and nutrition, biomedicine, etc., physical education, is a bit more than 400 reais per month, which is more or less 50% higher than what we have in our average ticket. When you see here the intake of the premium courses, it was 23%. of 2020, I mean 4% in engineering and 19% in health courses. And now, or last year, they grew to 32% of intake. But those courses, they still represent only around 20 something, 22, 23% of the overall student base last year. They were 32% of intake, but still they are a bit more than 20% only of the whole base of last year. So the trend, the trend is that premium courses will represent a higher and higher share of our base, which will be an important driver to sustain even more our tickets. And I'll get back to this a bit later. On page 15, the breakdown of our growth in our student base in digital education undergrads throughout the country. So we grew 18% year-on-year for the whole country. including 10% in the south, which is our incumbent region, around 36% in the center west, important growth there, around 15% in the north and northeast, and as I said before, 45% in the southeast. On the right, you see the breakdown of the number of hubs per region. This is new information. Here you can see the evolution of the hub base. throughout the country in the last four years. Now, for the first time, the southeast region represents the biggest region in terms of hubs. We had an increase of 61% in the number of hubs in the southeast, which now has 245 hubs out of the 939 that we have in the whole country. This is, again, an important growth driver for the future, which is here on page 16. we have intensified the presence in the southeast, which represents 40% of the whole market in the country. So as I said, 61% growth in HUDs, 45% growth in signal-based air. And when you see the whole intake numbers, the southeast was 8% in 2019, and then grew to 17%. in 2020, and then 19% in 2021 of the whole intake. So we are increasing our footprint in the southeast. Page 17, our famous chart with the evolution of the student base per cohort, knowing that a cohort is the number of hubs that were opened in a given year. So we keep increasing, and we keep maturing As I said, this is an important driver with limited education risk because the hub is there, the partner is there, the only accepted brand is there, and word of mouth is working in our favor. We keep increasing our maturation of hubs. Today, the theoretical maturation index of the overall portfolio of hubs is around 33% But it's important to highlight that this index takes into account all the expansion hubs. So when we open several hubs at the same time, we have a dilution effect of this index. And in fact, it may even end up in the lower index. But for example, if we take only the 2018 cohort, the maturation index of these hubs increased from 36% in December 19 to 50% in December 20, and now to 60% in December 2021. So we will keep increasing the maturation of our hubs. On page 18, I see here some key financials. So maturation, as I said, growing by around 22% on a consolidated basis. Gross profit increased 31% in the whole year, reaching a growth margin of around 62%, an increase of 4.5 points between 2020 and 2021. And then I'm going to get back to you to show the reasons. And adjusted BDA growing, as I said, 24%, reaching a margin of 28.9% in the year. On page 19, you see here on the left, For example, the digital education undergraduate net revenue grew 26% in the year, driven by the expansion of student base, but also by the expansion of tickets. Here are the numbers. As I said, we had now in the second semester of the last year, 278 reais, which is around 6% higher than one year before, which was around 4% higher than one year before. So we keep increasing our average ticket because of the differentiation aspects of our product. And again, as I said, this increase of 6%, 1% of it is nursing. The other 5% is indeed the overall portfolio that we had already before. This mixed effect is important. As I said, the average ticket of premium courses is around R$400 per month. Because we have R$250 of our average ticket, it means that the average ticket of the traditional courses is around R$241 per month. As I said before, we expect the relative weight of premium courses to keep increasing over time, not only because of the higher penetration of our current courses, such as nursing, but also in the near future, psychology and law. So just as an example, so if we had, for example, 50-50, so 50% of two-month courses, which now, as I said, represents more than 20%, and 50% of traditional courses, our average ticket would have reached $320. I mean, $400 for the premium and $240 for the traditional, $320 on average. So there is still a lot of potential here to sustain tickets. And this not counting with inflation and any other effects. Just on a mixed effect, we still have a lot of space to increase tickets as we increase the relative weight of premium courses in our overall portfolio. On page 20, the contribution of the other segments for continuing education grew by 29% last year, which is explained by higher offerings and higher digital marketing that we increased last year. On the other hand, on campus, there was a decrease of 16% on year-on-year basis, which aligned to our vision that this is a business that will keep suffering a little bit more over time because we do believe that there is a trend, a continual trend of migration of interest from on-campus to digital. On page 21, the net revenue was boosted by digital education segment. The increase of 26% in visual location undergrad, 29% in continuing education, and a decrease of 15% in the net revenue on campus. The consolidated number is 22% for net revenue. We're going to see about cost on page 22. The cost of service. declined from 34.7% to 30.5% of revenue. This was because of overall optimization of personal cost. As we go further, we are able to more and more optimize the ratio between students per tutor. So this is a function of growth. And also, of course, the natural gains of scale as we go further, we can dilute more and more fixed costs. On the right, the GNA. GNA now represents only 8% of our natural evidence, which is way lower than competition, which shows our continued efforts to maintain a lean and agile structure, which we expect in our culture. So we had a growth of around 8% only of G&A cost last year, G&A expenses last year. On page 23, on the right, on the left, selling expenses grew by 34%. This increase was a function mostly of the increased intake that we had last year. As I said, we had increase of around 30% last year. And the the selling expense increased 34%, which means that the CAC increased a little bit, increasing around 3% when you see the year-on-year comparison. So I think it was a normal increase in the CAC of around 3%. And also because the hubs were again closed last year. Just as a reminder, the hub is an important piece in our overall selling machine. So now as we resume operations at the hubs. We are now resuming our operations at the hubs. So this will be also important to use the hubs in our selling machine further throughout this year. And on the right, the PDA, which is called net impairment losses on personal assets. So it's the same as PDA. It increased last year from 14.8 to 17.5 last year and this is a fucking fourth of the pandemic and also because of the higher share of newcomers and new students in our student days as you know most of the PDA is concentrated in new students coming from the first semester and also because again the hubs were closed so in our academic model part of the experience is to meet your colleagues at HUBs. So when we lose this piece of the whole experience, this part of the experience, we are not in our full potential of the overall experience. So now as we resume the physical encounters, the weekly meetings at the HUBs, we expect the overall retention and PDA levels to go down this year. Now jumping to page 25, adjusted net income and cash flow. Adjusted net income declined 10% last year. The first reason was the high comparison base of 2020. In 2020, we recognized for the first time the full tax assets. This made a tip-off for Self-Inventing. Also, we gained 13 million reais just after our IPO in F-Tech Bank, which is part of net income of Self-Inventing. Besides that, last year, as you know, we had a huge increase in IPCA, Inventation Ratio of Brazil, which went from 4.5% in Self-Inventing to 10%. Most of our debt is in IPCA. It's a slight decrease of net earnings, net results. In cash flow, we had an increase of 11% last year. The reason for this increase of only, I would say, 11% was, as I said, the gain in SX of 13 million reais. This is in IFRS. This is part of the operational cash flow. If it were not for the 13 million reais gain in SX, our net income in 2020 would have been around 110 million reais. We would have had a growth of a bit more than 20% in cash flow operations, which is aligned to our growth in EBITDA. Again, they met a nice cash conversion ratio of 83%. So that was it that I had for now. And now let's open for questions.
spk00: If you'd like to ask a question, please press star then 1. If your question hasn't been answered and you'd like to remove yourself from the queue, press the pound key. Our first question comes from Victor Balta with Goldman Sachs. Your line is open. Thank you. Victor, your line is open. Sorry.
spk02: Good evening, everyone. Thanks for taking our questions. There are two questions from our side. The first one would be on margins. Considering that the reopening of your hub is likely to increase some cost lines in 2022, but also considering that your margins have been benefiting from operating leverage and decision initiatives, how much room do you see for further margin improvement this year? And our second question would be more specific on the technology angle. You mentioned that your mobile app has much better ratings than compactor's mobile apps. What would you say are the key differentiating factors or features of the MSLB mobile app that differentiates it from compactors? Thank you.
spk01: Thanks for your question. The first one about margins. I mean, because we are really focused on digital location and different from the other, most of the peers in the industry, we didn't have a, let's say, huge saving in 2021 and 2020 because of hubs closed or on campus closed. We had some savings in utility, for example, but it's not that material when you compare to a typical on-campus operation. In on-campus, some peers had with normal some savings. We had some savings as well, but it's not that material because most of our business is around digital education. So going forward, what we expect regarding margins, we should expect a decline in the cost of PDA going forward, as I said, because of the hub being opened and then we being able to offer the full experience for newcomers. So this could be an important driver for growth in margins, but this will, of course, depend on the overall economic situation. We do expect some gains in margins for this year, as we have had in 2021, 2020 and 2019. But this is going to be, I'd say, not a big jump in margins, but a slight, but continuous growth in margins before the conclusion of the deal with Unterdemark. Once we close the deal with Unterdemark, then our margins will grow a lot because they have an overall margin that is higher than what we had. We had around 30% more or less, and they had a margin of around 40%. The second question, I had some problem to hear you, but if I got it correctly, you're asking about why our tech approach is different from competition. I would say it's because of the way we operate. We have been focusing on digital learning and digital education for 15 years now, and different from some of the peers. we have this location as the core business of our institution for years now. And this reflects in the culture, and this reflects in the way we see technology and the whole approach we have to technology and digital education as a whole. The X, for example, that I showed before, was already an intrinsic piece of the overall student experience. It was not a compliment or something new. It was already for some years part of the whole student experience to have a nice app. And now, last year, what we changed was to offer the enrollment to the app. But the fact of having a nice app, for example, was already part of the overall strategic vision and orientation of UMass Selby for years now. So it is a function of focus, focus and culture.
spk02: Thank you very much.
spk03: Thank you.
spk00: Our next question comes from Vinicius Figueredo with Itao. Your line is open.
spk03: Good evening, guys. Thanks for taking my question. First question is regarding the intake cycle of first half of 2022. If you could please share any first impressions from the cycle, it would be great. And also, how should we expect the average price, mainly for freshmen, to behave? You know, it will also be amazing. So second question, it would be regarding PDA. We have seen a surge in this figure during this quarter, right? Is there any non-recurring event that explains this increase or any seasonality specific to the fourth quarter? And should we expect this number to normalize in the next quarters? Thanks.
spk01: Thank you, Jesus. So for the first question about intake and tickets now for the current cycle, yes, we are still in the middle of the intake cycle. What we have seen so far, is again a strong performance in the cycle. So far, what we had when you compare the year-on-year numbers, I mean the intake we had until beginning of March of last year and the intake of beginning of March this year, we are growing around mid-20s. Around mid-20s growth year-on-year so far in intake with increasing tickets for the intake. When you see only the intake tickets that we had this year and last year, this is increasing. And increasing, again, not only because of nursing, but increasing because we have a very disciplined approach to tickets as a whole. So far, so good. We are growing the intake. And we are growing as well every ticket. Second question about PDA. Yes, you're right, we had an increase in PDA in the fourth quarter of last year, basically because we update our PDA curve on a yearly basis at the end of the year. So last year, in December, we did it, and we had the effect of the pandemic. All of the invoices that were sent to students in 2020, for example, we usually have a write-off of invoices after 12 months. Our PDA curve increased over time and after 12 months, if this invoice is not paid, we have a write-off. And this white cost is what is used in the PDA curve. So what we had was an increase in the losses of the invoices that were issued in 2020 and that were written off in 2021 because of the pandemic, especially those that were issued in March, April, and May of 2020, just after the pandemic. That's why we had this jump in PDA in the fourth quarter. But this is to correct the number for the whole year of 2021. So the number for the whole year is the right number for the overall PDA of last year. So going forward, we should expect a slight decrease of this number for 2022.
spk03: Okay, great. Thanks.
spk00: Our next question comes from Mauricio Cimpeta with Credit Suisse. Your line is open.
spk04: Hi, guys. Thanks for the time. So I have some questions. One relating to tickets, I think not only in the short term now for this intake cycle, but in terms of trends in the market, I understand that the The education groups in Brazil have noticed that distance learning is a growth avenue. So what are the possibilities of kind of a price war in tickets going forward? How do you see that? Or if you see that the sector is a scale business, therefore it should consolidate in the hands of field, therefore it diminishes this kind of competition. My second question is about where growth is coming from now after the pandemic. If there was any reduction in interest for these fully distributed courses or if the new courses would be, let's say, the ones that would drive growth. And the third question is about market share. If I remember correctly, at least in the third quarter. Other groups, notably edukes were growing a little bit more year on year. If you feel that you were losing or gaining share in the distance learning market, thank you.
spk01: Okay, let's start with the final one. I mean, I cannot, comment on the overall market, but what we see is that we have been able to gain market share over time, and we grew our intake this year, last year, so maybe we are, let's say, at this moment, growing a bit less in market share than in the past, but we're still, I'm sure, gaining market share than competition, because what is happening is that the market is concentrating around fewer names as i said before about the the the gain of skill etc uh the listed players are the ones who are gaining a share not only ourselves but but i'm sure uh uh edu and other players uh we the list appears because we have i'd say more scale we've been able to gain much share from the smaller players because it is a business of scale. That's why I don't believe that we are losing market share when you compare to the whole market. The second question was this. I do believe that the sector will tend to consolidate more either organically as, as I said, more and more listed players or inorganically. The transaction that we announced with is one example. I am sure that there will be other transactions in the near term. I still think that the is too fragmented in Brazil given the need to have scale to offer a high quality product and at the same time to make money. This is a high technology business. It requires scale. So I do believe that the sector will tend to consolidate around fewer names going forward. And the ticket, the trend in ticket, the first one that you made, what we have been delivering over time is that, now for a few years, is that we have been able to sustain tickets. We are including tickets over time, every ticket. Still not at the same level of inflation. So we grew 6% now, inflation was 10%. But one year before, we grew 4% and inflation was 4.5. So more or less the same. So we have been able to sustain tickets over time because of the differentiation aspect that we have. And I do believe that There is a differentiation aspect here that is important to bear in mind. We offer a hybrid model with a tutor and a class, and we are the only player that is focused on this model, which is tough to implement. It's tougher to create and to operate, but we know how to do it. We have been doing this and playing this game for the last 15 years. That's why we have been able to not only gain much share, but also to sustain tickets going forward. When you look forward, I don't believe that we're going to have a price war, because it is a bit of scale. There will be fewer and fewer players. There was a price war in the beginning, in 2017 for example, beginning of the new reality, when several players jumped into the game. I do see now that there is more and more a rational approach and discipline approach to tickets, not only for ourselves but for the whole industry. I do believe that we have reached a kind of, say, fall in tickets for the 100% online courses. which is not our case. Our case is we have been able to increase tickets, which is different from the competition because, again, of the differentiation aspects that we offer a different product. Going forward, not only will this continue, but the relative weight of premium courses will increase. We had, again, 22% of the days in premium courses. but 32% of the intake. And it was 23 one year before. So the trend is that this will reach 32 very soon, and probably 60% in a couple of years. So there will be an important mixed effect as well in tickets.
spk04: Perfect. So you would say that these new courses tend to be higher ticket in general, and these are the ones driving growth. So it's a positive mixed effect at the end.
spk01: There are two things, the positive mixed effects, but also the overall performance of the apple-on-apple comparison. As I said, we grew 6% the tickets. The biggest gain we had in health causes was nursing. If you take nursing out of the equation, for example, we would have grown tickets by 5% instead of 6%. So, when you compare the apples to apples, we are growing a little bit our tickets, and besides that, there is a mixed effect that will increase over time. So, going forward, our tickets will tend to increase as we have been seeing.
spk04: Very clear. Very clear. Thank you. Thank you, Pedro.
spk00: As a reminder, to ask a question, please press star then 1. You may proceed with any web questions.
spk01: So the first question is from Pedro Lima. In fact, two questions. First one, what are you expecting for 2022 intake cycle? Do you believe that it should still present another round of strong growth as in recent years? Yes, as I said, so far we are growing at around mid-20s growth year-on-year, when you see the same period of time of this year compared to the first intake of last year, with age-increasing ticket, so the intake cycle is still far from finished, but yes, we will have double-digit growth for the overall intake cycle as we finish. Second question, you guys have been posting better ticket dynamics than the rest of the industry. Do you think that it's possible to maintain this growth in 2022? How do you see competition on the market? Yes, that's what I was saying to Cepeda. We do believe that we're going to be able to sustain tickets going forward. For the whole industry as a whole, I do believe that there'll be fewer players, there'll be more concentration. And I don't believe in price war in this industry, so I do believe that we have reached a kind of a flow of prices here. From Lucas Nagano about CAGI, Antitrust Authority in Brazil, the expected closing date and any possible remedies. We don't expect any, let's say, relevant remedies in CAGI. We don't have a huge overlap with Unter den Markt. We do have some overlap in some cities, but that represents a very minor stake or share of our citizen base. We don't expect any relevant remedy, if all. And regarding dates, we are confident that we will be able to have closing in a couple of months. Let's see how Kadi holds. but things are evolving okay, or going fine, as expected. We do believe that we could have closing in a couple of months. Commercial synergies, we're interested in that. Could you give some color on how to explore synergies in order to expand revenue? Yes, there will be, I'll say, a number of growth-evolving synergies there. The first one will be the faster expansion of hubs, as I showed before. Today, you have around 600 cities in which you have only one of the two brands. Once we have closed the deal, we'll be able to accelerate the growth and the offerings of both brands in these cities. The second one will be the increase in the portfolio of courses. Today, UniaSelvi offers around 150 undergrad courses. while Into the Mud offers less than 100 courses in undergraduate. With a few changes, we can improve and enhance, increase the portfolio of course of Into the Mud. The third one will be as well cross-selling opportunities between undergraduate and graduation with both brands. So there are a lot of commercial synergies to explore. Today we don't have any numbers because we cannot have commercial discussions between the two companies because of the unfresh rules. But we will be able to have some rough numbers, some big picture numbers to announce to you when we have the closing. One last question from Pedro Lima here as well. Integration will take time. We are already preparing the integration. We hired Bain Consulting to help us in the preparation of the integration. This is going very, very well. We have a detailed plan for integration because we do believe that we'll be able to have a very smooth transition. Both companies have a very nice culture, a culture oriented towards the customer, the students, and the willingness to cooperate and to operate in an integrated manner. So this will be, of course, the full integration will be all the areas, all departments, will take a couple of years, especially when you see For example, the integration of the content production and some things that we're going to do there, to have seen this over time. I'm going to get more, to give you more details about this integration timetable and numbers when we announce the closing. One last question from Caio Moscardini, to give more power on the PDA expenses. how the PDA for nursery compares to the current portfolio of revenues and level PDA should expect in next couple of years. PDA of nursery is still quite soon to know because we offered the first intake was less than six months ago, around six months ago in August, September of last year. We still don't have a big clarity on that. I want to see the overall PDA expenses for this year. As I said, we do expect a slight decrease this year because on the one hand, we are still in the middle of an economic crisis, but on the other hand, we are going to and we are opening the hubs. The full experience will be able to be offered to the students and the most important part driver of PDA is the engagement of newcomers. I would say that today the PDA ratio of newcomers is way, way higher than the PDA of seniors. If we are able to, again, to open the hub as we are opening now, we are going to be able to offer the full package, the full academic experience and people will meet colleagues and meet the tutors. It is how we design the product and the service with the weekly meetings at the hubs. So once it is resumed, this will be for sure, this will have an impact in retention rates and of course in PDA. So I guess, Those who are present in the webcast, is there any other question live?
spk00: Again, please press star 1 to ask a question. There are no further questions. Mr. Freitas, please continue with any closing remarks.
spk01: Thank you all for being here. It was a pleasure. It was our first full year as a liquid company, so we are very proud of what we have been able to achieve and to deliver to you and we keep available for any further questions. Thank you very much. Good night.
spk00: This concludes the program. You may now disconnect.
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