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spk01: The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1.
spk00: Good evening, ladies and gentlemen, and welcome to VTRU's second quarter 2022 earnings conference call. All participants are in listen-only mode now. Later on, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call is being recorded and will be available on VTRU's IR website. Now I'd like to introduce your host for today's conference call, Mr. Carlos Fritos, Vitru's CFO. Please, you may begin.
spk02: Thank you, Operator. And good afternoon, everyone. Thanks for joining us again. It's a real pleasure to be here with you all for the release of our second quarter 2022 numbers. Here with me, I have Pedro Graça and William Matos, our co-CEOs. Maria Carolina Gonçalves, the head of our IR department, and Raquel Kozaki, Luiz Felipe da Silva, and Hélio Crespo Jr. from our Investor Relations team. A slide presentation will be part of today's webcast, which is available as usual in our IR website at investors.vitru.com.br. So I trust you all have this presentation in front of you. And before we begin, I'd like to make note that as detailed in slide two of the presentation, safe harbor is in effect for this call. So now I invite you all to go to page four of this presentation, in which we have the main highlights for this quarter. And clearly, this quarter, the most important highlights were linked to the closing of the business combination with Unicef Amar, which we closed on The 20th of May, we created with this the leading player, the largest player in the Brazilian digital education space. So both institutions were already growing a lot organically, and now with the two combined, we are now the number one player in Brazil in digital education for higher education space. We also updated our governance with the appointment of new members of our board of directors, including two people from the Matos family, the one that created and managed Unto the Mars for 30 years. So Professor Wilson Matos is now our vice chairman for the board, and the definition of the new offshore structure with the new sea level team that I'm going to show you a bit later. We also had the issuance of the ventures for 1.95 billion reais in May of this year to finance a part of the transaction. And, of course, we kicked off the integration process that we have been preparing for in the last nine, ten months since the signing of the deal in August of last year, aiming at ensuring a as smooth as possible process and to capture substantial synergies as we have already presented to you all in the past. So in terms of financial indicators, the summary for this quarter on page 5, here we have the indicators both on organic and consolidated basis. So here throughout this presentation and in the release material as a whole, we're going to provide you information with only Vitru standalone, before the combination, and a consolidated basis as well, consolidated in Unicef-Lamar, between May 20th and June 30th, so the 42 days of Unicef-Lamar, so that you can have as much information, as transparent as possible, so that you can make your appropriate analysis. So here, net revenue this quarter increased around 75% compared to the second quarter of last year, and the consolidated, the overall net revenue was up 85 percent this quarter uh and did it with 42 days of until tomorrow uh the organic growth was 33 percent for net revenue uh in digital location on the red rate for union sales and 26 percent for uh when you sell the as a whole on organic base so strong growth in stop line uh that just a big day increased more than 100 108 percent this quarter, with the margin reaching 38%. Margin on organic basis was 34% this quarter, and a growth in the BDA of 28% when we take a check out of Vitru before Saisomar. In terms of adjusted cash flow from operations, a strong increase as well, almost 97%, 95.2% this quarter, with a nice cash conversion of 83% as well. And in terms of adjusted net income, it was up 168% with Sedomar, reaching 63%, 33 million Riyals. So here in cash flow and net income, we don't have the organic numbers because things start to be mixed between Sedomar and Uniaselvi, but whenever we can, we're going to show you the organic and the overall numbers with and without Unse do Mar. On page six, you have our C-level team, which includes executives who came from both Unse do Mar and the former Vitru before the built combination. So, since the signing of the deal, it was quite clear to us that we were going to combine two winning companies with similar and winning cultures. and that we all would benefit from this smooth integration process, bringing together these two leading teams. That's why, for example, we decided to, as I mentioned before, to have two co-CEOs, co-leading the company, Pedro Guerraza, former CEO of DITRU, and William Matos, which was the former head of digital education at Unicelumar. The idea here is to not have a takeover of one culture over the other. We have to blend and put together these two winning entities. So with that, we have a stronger and faster integration aiming at creating value for the students and for all stakeholders. So here in the team, the C-level team, we are basically with people from more or less heads coming from, the modern heads coming from a former teacher, still two positions to be filled, including the head of people and management. So we wanted to have a person from outside to lead the HR, exactly to have this message that we are not using or forcing one culture over the other. The idea here is to have somebody from outside to lead the HR department of the company. And for integration, before the closing we had an in-depth analysis of opportunities in terms of cost and expenses synergies between signing and closing. Part of it was already captured and part will be captured throughout this year. We had as well several commercial initiatives that are met respecting the specifics of each brand, and several projects, each of them with a given action plan, with an owner, with a list of deliverables, a set of prioritizations, and regular follow-ups. So we are really on the integration mode, with our mindset focused on integration. That's the number one priority for everybody here at Biture. On page 7, this is just as a reminder the main levers of synergies that we are pursuing. This was shown to you in May when we closed the transaction. So, for example, in terms of OPEX, we have optimization of payroll costs, gain of scale as a whole in contracts, for example. We have improved collection practice for UniaSELVI and retention practice as well for within SEDOMAR that is going to be useful for UniaSELVI. And for us, it was very clear that we have identified two, let's say, crystal clear opportunities regarding the exchange of BEX practices. When we talk about retention, and customer experience, and even at the collection process, has a better job. Sorry. has a better job.
spk05: Sorry guys, the computer here is going crazy.
spk02: So, as I was saying, when you talk about the collection process and user experience as a whole for UniaSelvi, it's a benchmark for UniaSelvi. And when you talk about pricing, throughout the last years, I guess that UniaSelvi has done a quite nice job regarding every ticket and pricing, which is going to be very useful for Unicef tomorrow going forward. So, we also have this type of trust knowledge going on throughout the company. And of course, a faster opening of new hubs, the trust selling and new courses being opened within Tudamar and within Uniaselvi. So this is a major opportunity for us all. Now, on page eight, just a quick reminder of what we delivered in the last two years. We are going to complete two years after our IPO in September, next month. So within these two years, I guess we have delivered on our plan in terms of ramp up of current hubs, opening up new hubs, the new courses that were offered, and of course the inorganic growth. I'm going to go into details of each of these levers in the next pages. So on page 9, you see the maturation curve both for Unia Selva and now for Unicef do Mar. This is the most important driver for organic growth, the maturation of the current hubs. We have a maturation index on average of 43% of the potential of the hubs of both Unia Selva and Unicef do Mar. So you see here the curve is very let's say, stable for UniaSelvi and Unicef do Mar. In Unicef do Mar, the dark blue area here, which are the older hubs, they have a different profile than the case of UniaSelvi, because UniaSelvi are more or less stable over time, because they are, let's say, in full capacity. But in the case of Unicef do Mar, we have 36 hubs that are still maturing. They were opened at the end of 2016, So they are not yet fully matured, that's why they are growing over time. But the message here is that we have a important driver for the potential of expansion hubs, which is growth with limited execution risk. On page 10, the expansion of the digital education undergraduate students and the number of hubs per region, major, major growth with the deal with Sedumar. So you see here, throughout the country, we are growing 100% in some regions, 360% in the Southeast, for example. And when you see the number of hubs, we went from 800 hubs one year ago to now more than 2,000 hubs throughout Brazil, including more or less one third of them in the Southeast. So as we have been always saying, The Southeast is the next frontier for growth. And we are going to open a lot of UNIASELVI hubs there with partners of SESOMAR that are there in cities in which you don't have both brands. On page 10, the new courses. This is not new to you. We have nursing already in operation for one year now in UNIASELVI. Nursing is starting now. this year at UNICEF-Domar and in the future we will have law and psychology which is also going to be very important to sustain tickets and to expand the overall market for digital education in the country. In page 12, the usual slide that we bring showing the public information and public indicators uh to to show that our technology and our customer experience uh it's actually different and on the left part we have the our apps ranked as the two best apps uh both by on average but apple store and play store uh this rank provided and this grace given by our customers and on the right part of the slide uh the latest uh uh numbers for reclining in which both brands are the best grades, the best numbers, within all listed players in Brazil. On page 13, the geographic footprint, as I always said, is very complementary on the geographic perspective. We have now more than 700 cities with only one brand present, so now we are already opening some hubs in some of these cities with the other brands. We are planning a lot of expansion, so for next year we are going to have more hubs open than usual, accelerating this growth throughout Brazil. So now, on page 14. The growth was once again led by this allocation On the right segment, in which we reached 741,000 students in June of this year, being the number one player in the country, a growth of 140%, being around 19% organically with Unia Selfie, and in total, 811,000 students in both brands. When you see the intake and average tickets, you see different profiles here. Unia Selvi, we already described this number, grew 29% in intake this first quarter, the first semester, sorry, of this year, compared to the same period of last year. While Unia Selvi had a very strong growth, much stronger than the case of Unia Selvi. On the other hand, in terms of tickets, Unia Selvi increased every ticket up 13%. And it's important to highlight that most of this increase in Queda Unia Selva is not linked to the mixed effect. I mean, there is a mixed effect that accounts for around two points of these 13 points. But most of the increase is a real apple-to-apple increase in every ticket in Queda Unia Selva. In Queda Selva do Mar, there was a very, very strong growth in intake. So, as you know, the average ticket of seniors is usually higher than the average ticket of newcomers. That's why, at the end, there was a decline of 2% in the average ticket of UNICEF. So, for this year, we shall still see a growth in the case of average ticket of UNICEF. We shall still see a likely slight decrease in the ticket of SESAMOD because of its growth, a very strong growth that SESAMOD had in the intake. And going forward, I mean, over the medium term, we are going to use the expertise of UniaSelf in pricing and ticket to improve over time the average ticket of SESAMOD. On page 15, net revenue, gross profit, and adjusted EBITDA for the company. So 85% growth in net revenue, 78% growth in gross profit, and 108% growth in adjusted EBITDA. So now we're going to go in detail in each of these ratios. So on page 16, 16 and 17 were the sources of growth in net revenue. It was boosted both by digital education undergrad segments as a whole. So you can see here on page 16, for example, that in Catovichu, there was a 46 million reais increase in revenue in digital education undergrads, a 33% increase quarter on quarter. But also, of course, the contribution of . Samar as a whole accounted for almost 100 million reais in new revenues for Vitru in these 42 days of consolidation, mostly coming from digital education undergraduate. So now, when you see the breakdown on page 18, so on a quarterly and on a semi-annual basis, no big news here, most of the revenue of vitro was already coming from digital education. And here we provide a breakdown of the revenue of Unceda Mar within these 42 days, which is more or less the breakdown that Unceda Mar has on a yearly basis. So it's more or less 6% coming from digital education undergraduate, around 23% coming from medical education, and 16% coming from other on-campus courses. Most of it coming from health courses. So, in total, around three-fourths, so 75% of the revenue of the on-campus business of the market comes from health, being medical or other health courses. On page 19, here is more details on the breakdown of the intake and student base as a whole. So here, the first two pie charts is the intake over time of Unia-Selby, for example, and the two pies in the bottom part of the slide, the breakdown of the base as a whole as of June. So here, a couple of messages. The first one is that we are increasing slowly but steadily the weight of digital education health courses. At UNICEF, for example, it was 24% of intake last year. Now it's 25%. It is 22% of the base. So over time, the base is going to increase. And for UNICEF SEDOMAR, it's only 19%. So we already launched some new courses now in the second half of this year, now in July. We launched at SEDOMAR. some health courses that were already available within UniaSELVI and that we didn't have in the portfolio of SESOMAR. So over time we shall have a slightly bigger weight of health courses not only at UniaSELVI but also at SESOMAR. And also important to show here on the left the overall growth in natural revenue as a whole. So 33% organically for UniaSELVI and overall 75% with SEDOMAR based with 42 days on SEDOMAR. That reinforces the resilience and the differentiation and the scale that we have been able to achieve with both brands. And scale in this business is important. Scale is important to generate cash flow, to invest in technology, to provide better services for students, and at the end to keep creating value for students, for the shareholders, and for all the stakeholders. On page 20, a snapshot on medical education, the medical business, which now is a bit more than 1,800 students, 348 seats in medical education, one of the best medical colleges of Brazil. is a high-demand course, which accounted in 42 days, with 22 million reais, with average tickets of slightly more than 10,000 reais, a very resilient revenue stream, and still maturing over time. And on page 21, the other two segments, the on-campus as a whole segment, which includes medical education, but here we have the highlight of the ex-medical on-campus numbers. So, a decline in the organic numbers for UniaSelvi, which is normal and aligned to our vision that this is a segment that we expect to decline over time. But, of course, with the condition of Sedomar, this increased by 100% given the strong health courses of UnSedomar. And on the continual education side, this is a business that on organic basis was more or less stable over time. A slight increase on a quarterly number with . This was, as I said before, in the previous quarter. This was impacted by the reduction throughout last year in the average length of graduate courses. So most of the shift is over, but we expect revenue to grow going forward. but in the first, I'd say, six months of this year, we had this shift in the size, in the length of the courses. So this is a business that did not grow much in the first six months of this year. So now, so the, when you see about FBDA on page 22 and 23, so on 22, just as a quick snapshot, we had an increase of 28% on an organic basis and 108% on a full basis with a gain in margin, organic gain of 0.6 points for vitro without SEDOMAR and a 4.2 points gain in margin including on SEDOMAR during 42 days. So, we already told you in the past that for a number of reasons UNSEDOMARC has a higher margin, ABDE margin, than the former VITRU. So last year, for example, VITRU had an ABDE margin of around 29%, while last year SEDOMARC had a margin of around 39%. So 10 points of difference for a number of reasons. So with the combination of both entities, our weighted average margin It's a bit higher now, closer to 34 points. Sorry, 38 points in this quarter and 34 points in the semester. On page 24, cost of service first. On the organic basis, we had more or less stable costs as a percentage of net revenue for Vitruv before SESMAR. even despite the resumption of classes, meetings, both at Hubs and Camping. And with Umso-Damar, we had a slightly lower growth margin, basically because of the higher relevance of the on-campus segment for Umso-Damar. So the on-campus segment has a lower growth margin, so the overall consolidated number is slightly lower, so cost of service increased a little bit, as a percentage of net revenue with SEDOMAR. For G&A, we are more stable over time, around 7% of net revenue. So with this deal with SEDOMAR, we are more or less maintaining our lean structure at around 7% of net revenue, which is quite low and one of the lowest numbers in the industry sorry on page uh 25 sending expenses a pda we have lower attacks lower pda expenses as well uh so on the left part of the slides uh we have a slight organic increase uh for uh unia selby and vitro around 20 percent uh but at lower cuts basically because we had a higher intake than this number, so the customer acquisition cost for UniaSelvi was around 5.5% lower the first intake of this year compared to the first intake of last year. And in the case of UniaSelvi, the marketing and selling expenses as a whole for UniaSelvi are much lower as a percentage of revenue than in the case of UniaSelvi, and that's because the hubs of Unicef and UAD are much more active in the sale process because they have a higher percentage of the revenue share that we have. So, in the case of Uniastelvi, this number on average today is around 23-24% of the net revenue of the digital education undergrads segment. in the case of Unicef Nomar, is around 30%. So, Unicef Nomar has a higher repasse, a higher revenue share, and, on the other hand, the hub owner, the partner, is more responsible than in the case of Unicef Service for the intake process. And on the PDA part, here on the right part of the slide, we have a slightly lower Organic PDA in the case of Unia Stelzi, quite a small reduction, which I guess is a nice achievement because of the current market conditions. And in the case of Unicef Demar, as I mentioned before, they have superior collection and retention procedures and processes and methodology as a whole. So they have quite low PDA expenses and a percentage of net revenue. And at the end, on a full consumer basis basis, this quarter, our PDA went down from 16.8 last year to around 16.2% on organic basis this quarter, only when we are serving, and 12.5% of net revenue when it's taken into account . And last but not least, on page 26, We have solid growth in adjustment income and adjusted cash flow from operations following this business combination. A growth of 169% in adjustment income this quarter given the contribution of SEDEMAR and a very nice cash flow generation from operations of 73% 73 billion reais this quarter including the 42 days of UNSESEMAR. So there was a increase, strong increase this quarter and in the semester with less than half of the quarter. So, into the market, a big cash flow generator. And this cash flow generation is important pillar as well in our overall financing strategy in our deleverage process over time. So now, that's it. Now I'd like to open for questions.
spk00: Certainly, ladies and gentlemen, if you have a question at this time, please press star then 1-1 on your telephone. Once again, that's star 1-1 to ask a question. One moment for our first question. And our first question comes from the line of Victor Tamay from Goldman Sachs.
spk03: Good afternoon, everyone, and thank you for taking our questions. we have two questions from our side. The first one is if you could give us some initial color on how you are seeing competition and pricing trends in the current intake cycle so far. And the second question from our side, if we may, would be if you see any room for further reduction in the length of continuing education programs over the long term given that that seems to be a sort of a trend in global education. Thank you.
spk02: Thank you for the questions, quite good questions. For the continued education part, I mean, continued education in our case, most of the business today is formed by graduate courses. So in graduate courses, we don't expect further reduction in the length or graduate courses as a whole. At the end, it is, I'd say, on a pedagogical perspective, it's not, I'd say, likely that there will be further reduction in the overall length of courses for graduate courses, I mean, for regulated graduate courses as we offer. What will happen, and that we are already working a lot on that, I'd say there is some growth, not yet, nothing outstanding to be shown, but we are slightly steadily growing in technical courses, in other courses as a preparation for the first job and the free courses, as we call it. So this is also part of consumer education and that once we have more, let's say, scale in this business, we're going to show some numbers for that. So going forward, continued education will be a kind of a blend of graduate courses with other courses as a whole for the market. So far, it is in real life much more concentrated in graduate courses. And as I told you, we don't expect further reduction in the average length of these courses now. So the first question about competition What we are seeing in the first month of this intake cycle is nothing very different from what we saw in the first half of this year. So it is a competitive market. We are seeing that in the case of the intake of UniaSelvi, we are growing the same levels as we've been growing the last year, a bit more than 20%. in intake, and a bit more than that in the case of Sedomar. Sedomar has been growing more than UniaSelvi. On the other hand, as we saw in the first semester of this year, the tickets of UniaSedomar, because of this strong growth, they are more or less two, three, five percent lower than what we saw last year, as we saw in the first semester of this year. So, on the other hand, in the case of UniaSelvi, we are still seeing the growth as we have been seeing in the last, say, semesters. So, nothing different from what we saw in the first half of this year. Over time, as I said, we are going to work more on the pricing and positioning of Unicef de Mar, aiming at improving tickets over time. We don't expect to have major changes. In the second semester of this year, in real life, most of the intake, a big chunk of intake is over, or most of it is being accomplished now, in the case of Unicef-Domar. And so we shall see the same trends that we saw in the first semester of this year. But it is a competitive market. It has always been. And in this market, we have been able to differentiate ourselves either in terms of faster growth and slash or in terms of tickets.
spk03: Very clear. Thank you very much.
spk00: Thank you. Thank you. Our next question comes from the line of Fred Mendez from Bank of America. Your question, please.
spk04: Hello, good evening, everyone, and thanks for the call. I have two questions here. The first one is about the average you can increase very strong above inflation, 12.5 year over year. If you can just give us an idea, if it's possible, about what is the impact from more premium costs versus what is the impact of actual price increase here. This will be the first one. And then the second one, uh you know it has been circulating you know uh news of a potential say of the medicine business just wondering that makes sense it does and anyways any color you can give here it makes sense or not this would this would be great thank you thank you fred for questions uh the second uh question regarding the potential sale of the on campus and slash medicine business i mean we we
spk02: We issued a venture for the deal with SEDOMAR. We now have a debt that we know that we can generate cash flows to serve the debt, but we are actively working in alternatives to accelerate the leverage. And we have three options. The first one is to go to the market to have a follow-on. not an option today. It may be an option in a few months, but not today. So we must have the market open. Second one is to have a private capital increase. And we have been approached by a number of players that wanted to sign a check and inject money and to participate in the growth of Zitro. And the third one can be the sale of part of the business, namely medicine or with part of the on-campus, the whole segment. Nothing substantial here, nothing firm here, but again, we have been approached by a number of players over time, interested in our medical business. So we... Sorry. So we have been approached and this is a possibility that we can execute in the future. Nothing fears right now, so this is nothing more than a rumor right now. Your first question was about the increase in tickets. So we increased almost 13%, 12.8% increase in tickets of Own Yourself this semester. As I said, most of this effect is not due to mixed effects with premium courses. So, as we have in the presentation, the breakdown of intake at UniaSelvi in the first half of last year, the first half of this year, there was a slight increase in the overall health courses, for example, which have an average ticket of a bit more than 400 reais. So, we have an average ticket of around 280 reais more than 400 in health and a bit around 250 more or less for the non premium courses so when you see when we isolate the mix effect the change in health course for example this this number of 13 percent goes down to around 11 percent 11 11 and a half percent so it is uh not the most important driver driver here was a real pricing strategies on a sku by sku basis on the apple to apple comparison so we increased uh tickets for seniors in the beginning of this year we increased a ticket for newcomers i mean they take our average uh uh price for intake in the first semester of this year was also close to 10 percent higher than what we had in the first semester of last year. So, I mean, these numbers are a function of our strategy to maximize, I'd say, profitability and to lever on our competitive advantage and our hybrid model of UniaSales in which we provide, I'd say, a nice service for our customers.
spk04: Perfect, Carlos. Super clear. Thank you very much.
spk00: Thank you, Fred. Thank you. Our next question comes from the line of Jan Sesquen from BPG. Your question, please.
spk05: Good evening, Pedro, William, Carlos. Good evening, everyone. There are two questions on our side. The first one is regarding Unicef Amara, looking at Unicef Amara's standalone numbers. We do see a strong growth in intakes but slightly more aggressive prices? And should we see this pricing strategy going forward, you know, as far as operation, or should we see something more close to what we see when we sell with better pricing dynamics? And the second one is if you could give us more color on the $28 million non-recurring costs related to restructuring and M&A expenses? Are you improving Unicef's Mars infrastructure, hiring new teachers, or is this mostly related to M&A fees? That's it. Thank you.
spk02: Gravian. So the restructuring M&A costs for this quarter, it was a different quarter, around 28 to 29 million reais of this cost. Most of it is related to the M&A. So mainly the fee that we pay to our advisor in the acquisition. So this represents, let's say, two-thirds of the number. And the integration itself, the integration itself is about around 6 million Reais more or less in the quarter, so around 2 million Reais per month that we spent in this second quarter of this year. For the intake of UNICEF Zomar going forward, in the short term, meaning this current quarter and this current semester, we shall expect the same trend So a stronger growth than UniaSelvi at lower tickets. And so this is the trend that was already put in place before the combination. So as a reminder, before the closing of transactions, we discussed opportunities for cost and expensive synergies. but we could not discuss strategies for pricing, et cetera. We were very strict in our clean team . We discussed opportunities for cost and expensive synergies, but we could not discuss strategies for pricing, et cetera. We were very strict in our clean team approach that we shall not discuss strategic issues before the closing So the strategy for the intake in the second semester was already given, basically. So what we shall expect for the second semester is more or less what we saw in the first semester. Strong, strong, strong growth in the case of UNICEF at slightly lower tickets. And going forward, I mean starting next year, we are going to work, basically, So what we shall expect for the second semester is more or less what we saw in the first semester, strong, strong, strong growth in the case of Unicef-Domar at slightly lower tickets. And going forward, I mean starting next year, we are going to work to improve tickets as a whole within Unicef-Domar, trying to have something Closer, but not equal to what we have in the case of UniaSelvi. In the case of UniaSelvi, we have been growing constantly over time, intake between 20 and 30% each period, each intake, with a growth in every ticket. Closer to inflation, sometimes higher, sometimes lower, usually slightly lower than inflation. This is the approach of UniaSelvi in the last two years, more or less. Over time, we are going to work closely and to try to push up a little bit the tickets of Unterdemar. It's not going to be easy because it's a very competitive market, but Unterdemar has a quite good product. The quality of the digital learning product of Unterdemar is quite unique, so we're going to leverage on that.
spk05: All right, pretty clear. Thank you.
spk00: Thank you. And as a reminder, if you have a question, please press star 11. Our next question comes from the line of Mauricio Cepeda from Credit Suisse. Your question, please.
spk01: Hi, everyone. Thank you. Thank you for the space here and the call. So I have some questions. The first one is more operating. about the retention versus the ticket. I saw that Unia Selvi had a good performance on tickets, as you were saying, but I saw also that the retention rate was a little bit worse than what I saw previously. And in the country for Unicezuma, the ticket did not perform well. I understand there was an impact from the newcomers, but retention rate was pretty good. So I would ask exactly what may be happening to create such differences in performance. The second question about the known, let's say, the adjustments to the EBITDA, you mentioned a little bit about the M&A. But there is also some adjustments about stock options. I saw that particularly stock options were were a little bit higher than the usual levels. So my question would be, from all these adjustments, I understand that M&A would be like $2 million per quarter, as you say. But from these other adjustments, if there would be any kind of recurrent expenses or anything that may reflect negatively in the following quarters? And about the operating performance, I understood that the operating margin was better if we exclude these effects, but is it exclusively because Unisys Umar has a better margin, or it has any relation to actions on synergies that may have been taken before or by the time of consolidation? Thank you.
spk02: Let's start with the third question regarding gross margin and margins as a whole. The business of Ultramar has a higher overall VDA margin than the case of UniaSelvi. We do have some synergies in this 42 days, but most of the synergies that we are going to see in the second semester of this year. We do have some serious here, but I'll guess that there will be more positive surprises going forward. But it was already, I guess, a part obtained in the second quarter of this year. For the adjustment, we defined for the IPO two years ago, how we are going to report adjusted BDA. For example, several stock options. In our stock option plan, it is a non-cash settlement plan. So that's why we defined in the past that this was going to be excluded from the adjusted BDA release. The special increase for this quarter was basically because of the consolidation, the way we calculate the expenses, we have a bigger company now, and so when we do the calculation with the black and shows, et cetera, we have a higher value for these options. And this value of these options, the difference, the increasing value over time is recognized in the P&L and adjusted when we released the adjusted FBDA numbers. But those are... the type of adjustment that we defined two years ago that we are maintaining this definition. Regarding retention, there is an important difference here in the case of Unia Selvi compared to Unicezumar. You are right that the retention of Unicezumar increased this quarter and, for example, compared to what we had last year. And we included in our website a spreadsheet with some numbers, even from historical numbers, for Unidas Amar so that you can all have as much information as possible so that you can compare and understand the sources of the numbers. So it is true that in Unidas Amar the overall retention increased, which is not the case in the case of Unia Selvi. And one important driver here were the health courses. The health courses in which only a salary is increasing. Health is very nice. You have a large, adjustable market. You have much higher tickets. The down part of health courses in distance learning is that the dropout ratio is higher, especially in the first semester or first year. So in our health courses, we have two meetings per week, for example. And we know that some newcomers in the first semester, they have difficulties to adapt to this model. So that's why most of the dropout takes place in the first semester. That's true for all data learning. And it is especially true in the case of health quarters, so we are still increasing the weight of health quarters in our overall data over time. So dropout is bigger in the first semester in this case. And when you see about tickets, I guess you're fully right that we shall always analyze this with a triangle perspective. We have overall tickets, overall retention and overall base, student base. So our student base is growing over time. So we have a strong intake, a slightly higher dropout, but at the end, a very solid ticket. And at the end, net revenue increasing more than 20% on organic basis. So we don't give discounts. to the renewal process of seniors. We don't. So this is, we know that some peers do it. So it is always a trade-off between maintaining the student or maintaining every ticket, and that's an unstable equilibrium. Not easy, but we usually prefer to maintain a health ticket even at the expense of a higher drop-out. And of course, in the first half of the year, or first semester of the course, this is very dramatic, and UniaSELVI is going to benefit from the overall user experience and retention process and overall hand-holding that is provided by Unice-Domar to its students So this customer experience, this customer centricity, I guess is a quite nice benchmark for UniaSELV and that UniaSELV going forward is going to benefit from this, say, knowledge of SEDOMAR.
spk01: Very clear. Thank you, Carlos.
spk02: Thanks, Pedro.
spk00: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Carlos Ritos for any further remarks.
spk02: Thank you all for the participation in today's conference. We are very honored and very proud that this is the first release of Unicef Demarc, together with Vitru, a new company. Anyway, we are available for further questions. Thank you, and good evening.
spk00: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
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