Cogna Educacao S A S/Adr

Good morning, everyone, and thank you for waiting. Welcome to the teleconference to discover the results of the third quarter of 23 of Cogne Educação. I would like to emphasize that if you need simultaneous translation, we have this feature available in the platform. To access it, just click the interpretation icon that you can see in the bottom part of your screen and choose your language of preference. portuguese or english for those hearing this conference in english there is the option of muting the original audio in portuguese simply click mute original audio we inform that this teleconference is being recorded and will be available in the uh ri site of the company www.ri.cogna.br where The complete material of our results is available. You can download the presentation also in the chat icons, even in English. During the presentation of the company, all participants will have their mics off. Then we'll start the question and answers And for you to make questions, just click the Q&A icon in the bottom part of your screen and write a question. So you will be in line for that. When you are announced, there will be a request for you to open your mic and then you open the mic to make your question. we suggest that the questions are all made at once. Before going on, I would like to clear that eventual statements that happened during this conference regarding the business perspectives of Cogna, projections, operational targets, and financial targets are the beliefs and premises of the company board, as well as information that are currently available for Cogna. Future considerations are not a guarantee of performance and involve risk, uncertainty, and premises, as they refer to future events. Therefore, they depend on circumstances that may or may not happen. Investors and analysts should understand that the general conditions, the sector conditions, and other operational factors may affect the future results of Cognom. and may lead to results that are materially different from the ones printed for the future conditions. Now I pass on the floor to Mr. Roberto Valério, the CEO of Cogna, who will start his presentation. Please, Dr. Roberto, the floor is yours. Good morning, everyone. Thank you for being part of this conference to discuss our results of the third quarter of 23. I have here in this call Frederico Vila, our financial vice president, Guilherme Velland, CEO of Vasta, and Eduardo Ronzac, our director of investor relations and corporate finance. As we generally do, this call is supposed to last one hour. We'll give you an overview during the 40 minutes of presentations and we'll have two minutes for the Q&A. So I would like to invite you to see slide number three so that I give an overview of the quarter. We are quite happy with the results of this quarter. It's one more great quarter from the point of view of increase in revenue, EBITDA, margin EBITDA and cash generation. So all the main result lines are quite positive. And I think an important highlight here is that all lines in the three business units were very positive. I mean, Croton, Vasta and Saber had a consistent growth in the revenue and EBITDA and margin EBITDA and cash generation, which shows our operational capacities and the organizations with the consistency of our work. Specifically talking about Croton, Croton keeps growing, pushed by the strategy that we've been discussing for the last three years, that are the hybrid and long distance courses. This is a quarter that was quite positive in the growth of all indicators with a cycle of... of growth in this sense with the fifth quarter consecutive in terms of caption and in our view it is interesting to have a consistent growth period after period because the compound growth brings positive results we see that in numbers so for the fifth quarter we growth the volume of uh enrollments and it's consistent in the revenue of the company with a 6.5 percent with an impact of growth one after the other grow in the sense between five and ten percent a year so this is quite relevant so it brings impact to our revenue so it's one more cycle that is quite good despite Having growth cycles in the volume of fundraising and revenues, which obviously pressured dropouts, Even though we have increased our operations, the NPS of the students have increased cycle after cycle, and we reflect that, showing the quality of the work in the reduction of the dropout rates, as you show in the future. But we are growing in fundraising for the last three years, and we are now reducing dropout, even with this growth. And it's reflected in the students' bases. So it grew almost 7% overcoming 1 million highs in the second semester. That is essentially smaller in terms of students. We have more than a million students. If we include the post-graduation students, we now have more than a million 130,000 students in higher education, and obviously it is reflecting the revenue. The revenue has grown to 3.4% in this quarter. It's the fifth consecutive one in the revenue growth. It's quite consistent. From the point of view of results, We've been showing efficiency gains quarter after quarter with the gain efficiency in the primary margin and reduction of administrative courses and general ones with the net revenue. One more quarter with the PCLD reduced. I'll talk about it later, but it also shows the financial quality of our client base. And everything allowed us to grow 2.3% in the recurrent margin, the recurrent EBITDA in Croton. And as the last emphasis here, Croton Med keeps growing strongly, both in revenue and EBITDA. In the nine months we grew 24% in revenue and 34% in EBITDA. We'll explore a little bit more the impact of FGBS in Croton Med in the next slides. But I can tell you right now, that the best way to analyze the Kratom Med performance is in nine months because we launched the special PCLD in the third quarter. I'll explain it later on. So it makes the numbers in Kratom Med a little different in the third quarter. So that's why I suggest you analyze the nine months, the first three quarters in this sense. We'll talk about it later. Well, Vasta. Vasta has a wonderful growth. with a wonderful third quarter, it's pushed by the subscription products that have always been our strategy. Both the course products and especially the premium ones keep growing with an emphasis to the complementary products that in this cycle have grown 42%. And our new growth is the B2G with very positive results. So we finished this cycle in 23 with this 18% versus 22. So the solution revenue is growing 42%. As I said, B2G in the quarter brought almost 41 million reais. With the sum of the two quarters since we started with this new product line, it's almost 80 million reais in revenue. So it's a clear opportunity of growth. The revenue in the cycle of 23 grew 24%, and despite having pressure in Vasta and in Sabir in the paper and graph courses, especially after the pandemic, a lot of the publishing houses were reduced on the market, so the prices raised. But despite the increased prices due to costs, we can grow. In EBITDA, which grew almost 26% versus 22%. And the margin specifically in this semester is 3.9% better. So it's quite healthy with a very robust growth, especially in these new product lines. Before talking about Cogna, I have to emphasize Saber here, because Fred then will talk about it. It had a wonderful third quarter that was pushed by PNLD, which also shows the importance of this business and the quality of having... a company with a very complete portfolio from the basic education until higher education, even with the publishing house, specifically Cogna, the result of the third quarter was the 10th quarter consecutive. And I like to emphasize the number of consecutive quarters because it shows the consistency. We want to do it simple, but well done and always and forever. So this is the 10th with the growth and the net revenue grew 19%, which is quite robust, with an EBITDA growing 32% in the quarter and almost 32% in the year. I would like to emphasize, and we repeat that currently, that our main focus is cash generation. cash generation after caps capex in the accumulated overcomes in 113 million the total cash generation of last year so in nine months we have the cash generation that is higher and we know the fourth quarter is positive especially because saber has an important revenue in P&LD. So we are quite optimistic in the quality of the generation and the growth in the cash generation. So you see that always in the conversion from EBITDA to cash, we improve this indicator. The adjusted net profit is almost 85 million reais. reaching now a net margin of 2.1%. And now talking about leverage, that is a point of interest of our investors. The leverage is reducing once again. We were below two times the EBITDA in the previous quarter. We decreased a little bit more. Now it's 1.2%. It came from 198 to 188 with a reduction even in the net debt due to the free cash that we have. Going on to slide five, now talking about the fundraising. As I said, it grew 5.3% in high and low income. And I would like to talk about the consistency of growth from the point of view of growing year after year. So the Kiger in 2020 after the pandemic and today, three years afterward, we have 19% in these three years, which is a very consistent growth and important growth. And this fundraising cycle is 65% higher than our volume in the period pre-pandemic. I don't know if you know these numbers, but we had overcame the pandemic numbers in 2021. In 2023, it's 65% above the pandemic. So it's a real growth and a consistent growth. But we generally say that to us, the most important is the revenue growth. So the revenue grew 6.5% above the volume. we privilege growth with equality, the growth of the revenue. So maybe if we had more offers, more aggressive from the point of view of prices, we would have brought more volume. But I reinforce that our strategy here is to bring quality revenue that is reflected in the PCLD, especially in the cash generation, to have the same comparison basis with the three years of 15% of CAGAs. So this is also a relevant growth. From the point of view of volume per segment and revenue per segment, we have a small decrease in the ticket of high on-site attendance. So we see that it's due to the mix. We have a strong growth in uh in plg then in on-site so it affects a little the ticket of hype on-site attendance but all the products premium online and present attendance have a growth except the on-site attendance and you know that our strategy is to focus on the high on-site attendance like medicine, veterinary, odontology. So these are courses that have less growth than other courses, courses that have migrated to distance education. So I think here we have wonderful results, quite consistent. We are quite happy with the results in this ticket. Now going to slide six. I'm only emphasizing the evolution of dropout. We could reduce in 1.1 point percentage the low on-site presence and 1.4 in dropout. uh high on side attendance so it's not a factor of one segment or the other it's the consistence of process system operation in the aggregated we are decreasing from 17.9 to 16.5 compared to the previous year showing that even with the consistent growth and the kicker of 20 percent a year over the last three years in volume we could reduce the dropout And I emphasize here that this is the effect of a greater fundraising with good contracts and payments of invoices and activities in the virtual environment of activities before recording the revenue of the students and consider them as students and a better operation with the better client experience. And even the NPS has improved consistently and the NPS and all the improvements are reflected in dropouts. Obviously, with the growth fundraising and decreasing dropouts, we grew almost 7%. I emphasize that this is the 10th consecutive quarter that our student base growth. So once again, it shows health and consistency in our work. Now going to slide seven. As a consequence of all that, the revenue is growing 8.4% in the quarter and 11.6% in the year. We like to show this slide because it has the horizon since the beginning in the first quarter of 2021 when we used it to say that we would pass through a restructuring process and the revenue would grow consistently. So this is the fifth one of revenue growth the growth in the third quarter has a slight impact of FGPS, but other than that, our revenue would be closer to 10% increase. Now, going to slide eight, talking about costs and expenses, it's one more quarter of... growth in the gross margin. So it shows the margin with the leverage and the average leverage in medicine. Also, the operational expenses improved 1.% that is efficient gain and cost reduction. PCLD improved a lot in the quarter. I repeat that this is the quality of the revenue focusing on cash generation. Dropout is better. Therefore, it's reflected in the PCLD. PCLD decreased a lot this quarter. We have this understanding that is more for 11, 11.5% than the 9.5% of the quarter. but we'll keep working to improve the results. Therefore, anyhow, the PCLG is quite positive. Marketing expenses is increased consciously due to two reasons. One that I've been saying, that is the consolidation of the national brands. happen and there is another important factor in the competition market just like higher education we believe that market investment is more valuable than ticket discount to bring students both to fundraising to and the long run to create and build the image of the organization and the brand so it makes more sense to invest in market other than giving discounts that's why we have more expenses in market But other than that, the EBITDA margin improved 2.3 points per cent, which shows a healthy contribution of the other lines. Now, going to slide nine, the average term period is reduced. It's quite low. It's 47 days. About one month and a half to receive, we improved one day versus 22. eight days versus 21 but we have it under control in terms of payables and receivables it's quite solved healthy we trust the work being carried out the coverage rate is 65 percent and as i said the percentage of net revenue this quarter is 9.5 percent But we understand that considering the macroeconomic context, maybe the point of stability would be 10.5 or 11 other than 9.5. But we'll keep working to keep this percentage of net revenue to the next quarters. The result of all that is that an EBITDA growing 17.6% when compared to the last year with EBITDA margin growing and in the nine months also growing 15.7% reaching almost 35% of margin. with an improvement in the nine months. And I would like to emphasize the improvement in the gross margin and 1.9% contributing to this growth of the EBITDA margin. In slide 11, just to bring a recurrent question of our investors about the productivity per campus, we have a lot of space in the camp already, especially if... There's something new in FIES or some incentive for on-site courses. We have space to grow, but consider the optimization of our campaign over the last years and the greater fundraising of high on-site courses, especially the online education premium with the labs of the campus being used like engineering and health courses. Our practices are present in the labs. Therefore, they use the campus labs. Then we have the gain productivity since the beginning of the restructuring in 2020 and now more than 55% in productivity gain per campus. Now in slide 12, about Croton Med, specifically it grew 11.5% in the third quarter. This third quarter is already affected, let's say, with the revenue reduced due to the new level of retention of FGVS. I emphasize here The retention that we have in FGPS was 25%. That was some legal approval that we had to do that. And we know that according to the law that was approved, it will be 27.5%. So in the fourth quarter, we'll have this 27.5%. five of retention in Texas. Therefore, it's growing 11.5, but it's quite relevant in a business unit that still has opportunity to mature. We have about 550 spots. Our park here from the organic point of view is about 820 spots. We just received the visit of our unit in Ponta Porã, that is of Mas Médicos 2. We were graded 5 in the assessment of the... the college and we have a visit to authorize the medicine course it will be in december and it's it's not a course uh that is under law it's my magical so we understand this process will keep going on and in 24 we'll have one more college receiving students besides they are the one that still can grow organically. So we mature in about 820 spots in 2027. So from the EBITDA point of view, the third quarter, just to make it clear, it decreases specifically because between February and July, I mean, yeah, yeah, February and July, the delta between what we provisioned and the 25.5 that we use it as the basis we launched in the PDG in this quarter so it's impacting the quarter specifically it should be distributed over all month as I mean from February to July but we couldn't know, we couldn't have the final definition. So we adjusted that in the third quarter. That's why I said the best way of analyzing the performance of Croton Magic is to analyze the accumulated of the year because we can see clearly that the EBITDA growth is relevant, almost 34%, even with a margin gain of 44% in the nine months of 22 to 47% in 23, therefore proving that this is a vertical with the potential for growth that is quite relevant to our future. Having that said, now I pass on the floor to Guilherme Meliga, that is the CEO of Asta, for his comment about it. Thank you, Roberto. I'll start with slide 14, talking about the net revenue of Asta. So the third quarter, we had 258 million of net revenue. It's a growth of 36.6% over the same quarter of last year. So the third quarter that historically is weak is improving a lot with the continuous growth and with the new business segment that is the B2G that in this quarter, we have 41 billion extra in this front. In the revenue of the cycle, and remembering that the third quarter is the end of our commercial cycle, it starts in the fourth quarter of the previous year and finishes in the third quarter of the current year. So this is the best quarter for us to analyze the performance of our business and our net revenue in total. of the commercial cycle is finished in 1 billion 437 million, 24.2% over the previous cycle. In slide 15, we have the details of this revenue starting with the first graph with the subscription products that represent basically 85% of our revenue. So in the subscription revenue, we reached one billion, more than one billion reais with 18% growth, emphasizing the complementary solutions that still are growing, penetrating the bases of schools and also penetrating schools that are not in SOMUS bases. So they have their own life and not only there. So we reached 42.5%. The systems are still performing well with a 19% growth. I would like to emphasize here that this growth of 18% is summing to the historical growth in this level. So over the last four years, I mean the previous and the three years after IPO, we have a CAGR of... 22%, so it's quite robust in our growth in the subscription model. In the total revenue, I would like to emphasize the growth in the B2G, and in this cycle, it brought 81 million reais, and the non-subscription model also grew 11.5%, with emphasis here to AngloCourse, that has a new unit in São Paulo with an increase in the ticket. Now going to slide 16, I'll get into details of the costs of Asta. Please remember that we grew 24.2% in the revenue and the cost total is 23%. There is a margin gain in the company with costs growing slower than the revenue. I'll analyze here with the table on the right. that analyzes the costs as a percentage of revenue. So we mitigate the impact in the volume increase of costs. So we had an increase in the percentage, costed percentage in our CMV that we mentioned a lot over the last two quarters. It's an increase in paper, publishing house and freight, and it It is 2.6% growth increment. Additional to that, we have more acknowledgement in the PCLD of 1.5%. Over that, 0.8% is a non-recurrent event. of acknowledging the judicial recovery of a big client. And 0.7 remaining is the increase considering the macroeconomic condition in the country. So we did an increase in our PCLD. Therefore, analyzing the running age of this PCLD, we believe it will be about 3%, which is a very low PCLD and one of the lowest of the industries. Offsetting the impact, we had the rationalization of the operational expenses with our revenue resulting in a reduction of 4.5% of the operational expenses. That's why the total costs and expenses of the company reduced 0.7%. Now going to EBITDA in slide 17, more revenue growth with less cost reduction means a margin gain. So as I said, the increase in seasonality and the revenue in the third quarter made our EBITDA in the third quarter leave 11.5% to 25.8% with an increase of 6.1% to 10%, 123% growth rate. in our EBITDA of the quarter. And in the cycle, which means the end of the commercial cycle of 23, we reached 380 million, almost 26% of growth in our EBITDA. And I would like to emphasize here that this cycle that is finishing makes us very proud to deliver growth in revenue, web and cash and open to new possibilities of growth. One that is the B2G with 80 billion customers. And the other one that will come here, that is the Start Anglu, our bilingual franchisor, that is quite good and will represent a high level of growth in the future. And in the cycle that is starting, we keep our trust in maintain the growth that we are having the level of 20%. And we believe this is the pace of our company in terms of growth, increasing the margin so that we don't because we don't see the same impacting costs that we have for the next year. Now I pass on the floor to Fred to continue the presentation. Thank you, Malaga. Good morning, everyone. I'll start the presentation here about saber. Please remember that saber means the national plan of didactic material, red balloon, and other business. Now, going to slide 19 about the financial highlights, the main one is the wonderful quarter in 23 from the point of view of revenue and EBITDA. In the third quarter, we had a growth of In the revenue of 62%, we reached 186.6 million in revenues in the third quarter. And in the accumulated nine months from September until September 23, we reached almost 406 million reais with a significant growth of almost 57%. Now, leaving the revenue, the main fact that we had in our business, and going to the recurrent EBITDA and margin, please note the best way to see that is the accumulated in 90 months. So we reached an EBITDA of 68 million with a growth compared to the same period last year of 94%, which shows that in terms of numbers, the result is strong. And we demonstrate this result strongly in the third quarter. And we are here prepared for the fourth quarter. And please remember that we had a gain in market share of 7.7% in the P&LD. and the purchase program of Elementary School 2, which became the best one, and our publishing houses, Atka Cipione and Saraiva, there. And it's important to mention to you that this impact in the market share gains is translated into revenue and EBITDA, mainly here or almost totally here in the fourth quarter of 23, which shows that our business, Saber, is going to be quite positive in the next quarter. finishing saber and now going to Cogna starting in slide 21 Cogna is, let's say, the consolidator of the growth of our three main business units. As Roberto mentioned, he said Crota and Mediga, says Somos and Vasta, and I mentioned Saber. So we had a growth in the revenue in the quarter of 19.3%, reaching 1,217,000,000. In the cumulative of the year, we had a growth of the revenue of 17.4%. reaching 3,986,000. And going to the EBITDA in the quarter, we had a growth of about 32%, reaching 306 million in EBITDA, with an EBITDA margin of 24.1%. In the accumulator of the year, an EBITDA growth of about 20%. with the margin gain of 0.6%. Now, moving on to slide 22. This is the focus of the company to generate operational cash. This is our homework. And it shows not only in terms of numbers, but also in terms of cash, because the interest is money, how we generated cash in the quarter. So we finished the operational generate in the third quarter of 23 with 254 million reais, a growth of 37%. In the same period last year, we had a growth and we reached 187 million. And in the period of nine months, we reached 653 million reais with the same growth of 36%. And it's worth mentioning that that in the 12 months, as I mean, the 12 months of last year, we had a cash generation of 540 million. So we overcame that in about 21% of the operational cash of the whole year last year, which reinforces our commitment in having operational cash generation for the fourth quarters in a strong way and our commitment to deliver the guidance for 24 of R$ 1 million, as we said in 2020. Now go into slide 23 about the net profit and the adjusted net profit. We had the adjusted one positive of 85 million versus a loss in the nine months that lasted in 22. and the net profit we had last year in the nine months of last year losses of 325 million reais and now by the end of this year we had we reduced this loss to 95 million reais and this difference between the net profit and is basically the amortization of tangibles that is 180 million reais. Now going to the final part of the presentation, talking about leverage and debt. This is a topic that we are paying a lot of attention, especially due to the macroeconomic situation of the Brazilian market and international market with high interest rates. But the important message is that we reduced the net debt of the second quarter from the second quarter to the third quarter, we reduced 55 million reais. And our leverage reduction, we reached in the net debt in EBITDA 1.88 times, an improvement regarding the second quarter of 23 and a recurrent improvement since 21. And I'll go into slide 25 to have my final part here. I show you that we keep committed and more than that, we are delivering results in expenses reduction. We have adapted. of R$ 4.4 million minus the cash amount in September 30 of R$ 1.3 million, a debt of R$ 1.3 million. We re-bought in debt about R$ 1 million with a positive impact in nine months of about R$ 11 million. We reduced the net debt in R$ 55 million or 1.7%. And the company keeps its ability to generate operational cash and we don't need to have fundraising new fundraising uh unless the ones that we've been having in our pipeline to pay our future debts with that i finished the wonderful results that we present here in all our business units and which even include Cogna and I pass on the floor to Roberto Valério. Thank you Fred. Well as final considerations in slide 26 in Croton it was the fifth consecutive cycle of growth of growth in revenue and volume And we believe that with all that we are doing, we'll keep growing in a consistent way. We have a lot of initiatives being implemented, the relaunch of IAMWEDA brand, new distribution channels, the launch of new courses. We have a lot of interesting points here in this funnel of digital markets, so we still believe that the initiatives and opportunities that we see ahead of us will support the growth in the revenue and volume of fundraising cycle after cycle. You also see in the growth margin the thesis that we've been defending for three years that hybrid and digital courses as the medicine course improve the growth margin due to the important leverage and the quality of the fundraising is reflected in dropout and PCLD. We have no reason not to believe that will keep delivering this result. So being assertive in fundraising and enrollment and dealing with students will make us improving the results in terms of margin. And obviously, as I mentioned in other moments, Today, we have 112 companies, many of them with long-term contracts. As the contracts are finishing, we change the addresses, reduce the size and gain in efficiency and reducing costs. And It doesn't impact EBITDA directly, but it helps the cash generation and we'll keep doing that over the years. So from the point of view of Croton, we are very assured that we'll deliver the growth that we've been having over the last three years. Vasta, as Guilherme mentioned, the net revenue is still growing with wonderful initiatives and good opportunities for growth. increase in the penetration of the premium and complementary systems, B2G, Young, we start, we have a lot of new things appearing, so we are quite sure that we'll grow in this business unit. And if this year that we had a lot of pressure in terms of cost, we could gain in March, then we understand that the margin gain will be relevant again next year when the main costs will be recomposed. Saber, as Fred mentioned, is also very positive in this market share gain that we have. and funded the two will allow consistent purchase for the next year. So the revenue will be receiving a lot. And obviously it makes us very aware of the growth capacity and the value generation with Cogno with 90% of growth in this semester, which shows the potential of the company assets. And if well coordinator and complementary, they can generate a lot in the year. With the growth and EBITDA and cash generation bringing a lot of value to the company, we are reducing the leverage which generates even more cash so that we can reinvest or... If we have a net profit, then we'll start distributing that to our shareholders. And from the point of view of liability and management, the team is constantly having a lot of liability management actions to reduce the costs. And we'll keep doing that with quality. So I reinforce here my optimism regarding the company. It's not only in my words, but the results are here to show the quality of the team and the asset and how much we can deliver in terms of value to society, having quality products for education and helping many Brazilians to grow. With that, I finish my presentation and I invite you for the Q&A session. Now we start the Q&A session. I would like to remind you that to ask questions, you should click the Q&A icon in the bottom part of your screen and write your question so that you keep in line for that. When we call your name, a request to open your mic will be seen on your screen. Then you turn your mic on so that you ask your questions. I ask you, please, that you make all the questions at once. So now let's go to the first question from Luca Marchesini from Itaú BBA. We'll open your mic so that you ask your question. Please, you can go on. Good morning, everyone. Thank you for the presentation and the opportunity. We have two questions. First, we have heard that in the competitive scenario, it's more aggressive in the second quarter for fundraising. Please tell me how you see that and if it's high or low. And the second question regarding the PCLT in Croton with the big drop, that maybe is not recurrent but i would like you to comment on sustainability and pclg and what would be the recurrent level it would help a lot thank you hi luca thank you for the question so i'll answer the one about the competitive scenario and fred will respond the pcld I think the higher education market is competitive by nature with many players that are structured big and with resources. I wouldn't say that it's more aggressive. I would say that the aggressiveness is the same as the last two or three years if we compare with the first cycle, maybe a little bit more aggressive, but I wouldn't say that we are back to the high aggressive scenario. My direct answer would be that from the point of view of competitive scenario, it's stable, but it has always been quite competitive. I reinforce that we try not to enter in the price wars, mainly in terms of offer, because it disturbs the ticket and ends up bringing poor quality students and we focus on revenue growth. So, obviously, if we were more aggressive from the point of view of offer, we would bring more volume, but we are very focused on growing the revenue. Fred? Okay, thank you, Roberto. Thank you, Lucas, for the question about the coverage rate. Historically, and analyzing what would be PCLD over home, we've always been saying about 2% this quarter would have the seasonality effect. And what is this effect? Well, it happens in the third quarter because this is a period of renegotiation of the students, re-enrollment of students, and we had a positive effect in the cash. which takes into consideration and reflects the PCLD. And our PCLD reached 9.5%. What I understand that is the most correct way to analyze the future is think about 10.5%, 11%. Roberto mentioned that before. But in fact, if in the fourth quarter we have the positive cash effect, then PCLD will have a reduction in this behavior. But today, analyzing the inadimplants and what happened in October, I believe it will be in 10.5% and 11%. This is the best way to look at it. Okay, Valério Fred, you're quite clear. Thank you very much. The next question is from Jessica Meller from JP Morgan. We'll open your mic so that you make your question. Please, you can go on. Good morning, everyone. Sorry, my mic was off. Well, thank you for responding to our questions. We have two. First, how do you see the regulatory environment in online education? Are there relevant restrictions in this segment and what would be the impact to Cogna? And the second question would be related to the marketing line. How do you see this line in 24? I mean, will we see a high level or a reduction in this line? Thank you very much. Jessica, thank you for the questions. I'll answer the first one about the regulatory environment in online education. And then I pass on the floor to Fred. Regarding online education, we've been following the discussions that are made, especially some ideas of the minister. I would divide my answer in two parts. Well, Brazil has 5,500 cities, less than 1,000 ones. I guess not even 700 cities have the courses being discussed in the public consultation. There are especially the health courses. Just a few cities offer the courses on site, which means that if we include online education, we would... Consider about 2,000 cities, a little bit more maybe. So try to give a simple explanation. We have 5,500 cities and a little bit more than 2,000 offering the courses. If there is a restriction, the courses are forbidden, maybe we would have 600 cities offering the same courses on site. And I think it's very bad for society and for Brazil. We need these professionals. especially in the countryside where the healthcare system and even the open companies are building hospitals and clinics. And in my understanding, and this is how we believe the discussion should be much more related to how to carry out that i mean if the ministry of education understands that we have need to have more quality and not only cognitive but the system as a as a whole so we need to discuss the rules i mean more present show labs or other things than simply blocking the courses and to the brazilians considering that the courses when the student is graduated, they have a good payment above the average. So I think it has a social impact in terms of health care and in terms of payment and even tax for government that is quite relevant. So it should be taken into consideration. I think this is the point that we have to present as an argument. And in the end, I believe that we should... go towards the regulation in a different way from the point of view of having the courses instead of forbidding them. This is my belief, what I defend and what we've been defending here. But I think the public consultation is open, people are giving their opinions and we'll keep participating in this discussion. And then to respond from the point of view of impact, I would separate that in two parts. I mean, online education is part of our strategy. So it deals with an important item to us, but our company is diverse. So we've been a company 100% in higher education. Today, 65% of our business is higher education. And part of it is distance education. And part is the healthcare courses. So it obviously has an impact, but it's less relevant than in the past. But I reinforce, Jessica, that society and associations and even the ministry should... think about how to regulate the courses and how they can have quality instead of simply preventing them. I mean, maybe they can be a little bit more expensive, but they don't make the business unviable. I guess my answer took too long because the topic is complex, but I would like to pass on to Fred. Okay, Jessica, thank you for your question. That is about what would be the predictability of expenses in marketing. Well, in the third quarter, we printed sales in 256 million with a growth of 45%. This growth happens mainly due to the investments that we are having in brand consolidation and the investment to bring better students to our base. So I don't believe that this is how we model our business to 24. We believe in new growth. We modeled a lot in line with expenses in marketing 24 and 25 in our forecast. And what we are showing is what we have in 23. And as Roberto mentioned, We prefer to invest in market to have good students instead of giving discounts. And I think the strategy is quite correct because we delivered that in EBITDA and in operational cash. So it shows that the strategy, in fact, is the correct one. OK, thank you. Quite clear. Thank you, guys. The next question is from Lucas Dinagano from Morgan Stanley. Lucas will open your audio so that you make your question. Please, you may go on. Good morning, everyone. Thank you for answering our questions. We also have two. The first one regards a pesticide that has a concentrated impact in the third quarter. with 8 million in revenue reduction and 14.5 in retroactive PDT, and looking ahead with the 27.5, what would be the recurrent impact from now on? Would it be 80 million? And the second question is regarding a more strategic topic, but regarding the spread of technologies of artificial intelligence. If you, how, I mean... What is your approach regarding that? Did you map where it can be used to improve internal productivity or improve the product? Did you quantify the potential of this technology in terms of costs and revenue? Thank you. Lucas, I'll start responding and then I pass on to Fred for him to continue the answer. Well, I can say that we are very engaged in understanding, studying and applying not only regeneration, but artificial intelligence, machine learning and automation in many of our processes, not only the administrative ones, but also the educational ones. We have constant meetings in the agenda. We also have an agenda of education with our leadership to discuss the opportunities of using artificial intelligence and the tools that are being developed. for the leaders to use and so that they can learn how to use and implement their processes so that we don't have a centralized AI team, but the competence and the interest is used by every leader in every part of our business and every stage and every system and every capability that we have. We like to allocate a project manager. When we have a project, we have a project manager to lead the initiative. And we believe this is very important. And I tend to say that I am the business manager of this topic in the company. I dedicate a good part of my time to talk about it and discuss with the teams. I have regular meetings with a group of work here. I wouldn't like to talk about the initiatives to a strategic topic, but we have back office initiatives and also in automation processing and also initiatives in studies about how to apply that to education to generate more engagement, higher rates of performance and better training of the students and even greater engagement a competence on how to teach the contents and produce content because a company education company just like us produce a lot of content we have publishing houses we have opportunities for that and to use content for images and texts and objects of learning so Without giving strategic information, this is a topic that we are very well engaged and I participate on that personally. Fred, FGPS, now you can talk about it. Yes, regarding that, we made it quite clear in the release the impact on the revenue, the net revenue in Croton that happened of 8 million reais in the quarter. This way, the same impact of 8 million reais will also happen in the fourth quarter. That's it, pure and simple. And it reflects the limit of 27.5 or not? I'm sorry, I had a problem. An operational problem here. Yes, with the limit of 27.5 to the same 8 million reais. Okay, thank you, Fred and Valerio. The next question is from Ian Seskin from BTG Pactual. Ian will open your question so that you make your question. Please, you may go on. Good morning, Valerio and Fred. I would like to make two questions, one about Vasta and one about Saber. About Vasta, I imagine that maybe you talk a little bit deeper on the perspectives of the new cycle during the Cognite Day, but I would like to know if you can share some Some perspective, even a qualitative one about how the sales process was in this new cycle and a little bit of the process of what do you have in perspective to B2G as it is a new initiative and we are still trying to understand a little bit of the revenue dynamics of this initiative. This is about Vasta and about Saber. I would like to understand a little bit of your perspective on the impact of paper costs for the fourth quarter and to next year. What do you have in terms of perspective? Thank you. That's it. Well, Leanne, thank you for your question. I'll let Guilherme answer and then Fred can answer too. Thank you, Roberto. Well, Leon, let me give you the perspectives. We are quite happy with the commercial situation for 24. Remember that the last four cycles, our CAGR was 20.5%. So I think 20% is always our growth boom. We still see the same possibilities of keeping this growth. And Complementaries that are quite fast also have a very low penetration at school. So the main growth vector still has a lot of penetration space. And in Cognite Day next month, we'll give the guidance. But November is still a very important month. And... we don't expect any change in this trend that that we have in performance of the last four cycles and regarding b2g in fact it is new to everyone even to us we are quite happy with the beginning of this new segment but it is a segment that we hope to have great news next year but the contacts with the public area are in the year they are performed differently from the private sector that we celebrate the contracts the previous year in the public sector we signed the contract as we won the bidding and it is for the same year so it's very difficult to have this in advance with this visibility but we hope that what we built this year are renewable and the new baseline so that we can grow next year so as we have the news and new contracts we tell you that okay fred here i'll talk about the paper costs but it's important to remember that it reflects in saber but it also reflects in somos in in terms of books we are negotiating uh over the last two months about the paper costs and today our perspective is a reduction in the paper costs it's still a single digit but different from last year in which we had the growth in the paper cost of about 20 and two year we are foreseeing a cost reduction in both companies okay sabir and soma Okay, perfect. Thank you. Our last question is from Mirella Rodriguez de Oliveira from Bank of America. Mirella will open our mic so that you make your question. Please, you may go on. Good morning, everyone. Thank you for the space for the questions. I would like you to talk a little bit about the receivables because it's an indicator that was improving the last quarters, but this one was flat. So we would like to understand better if there is something special in this dynamic. And the second question that is a little bit more about 24, how... you believe the opportunities of growth may come from considering this is a stronger year in 23 specifically for the crop on demand well Mirela thank you for the questions regarding the receivables i think we have a very efficient level of receivables we are in 47 days this This is basically 45 days from the due date, especially for the higher education audience that deals with Croton. I guess we potentially are able to keep receiving and improving. But this drop is lower because we are at a good level, especially if we compare to the other players on the market. When we talk about a business that we have in many schools, maybe the due date, the deadline is shorter, but we don't have schools, especially the premium ones. We have parents paying well, but we believe that this indicator is quite healthy and having one day less is quite positive. Regarding Croton, I think the market of higher education is a market that grows rapidly. in in not so big rates and croton is gaining efficiency and productivity in the polls and the units and being able to have new distribution channels bringing new students not only digitally but also in channels like construir education that is our affiliate program that is quite similar to what natura does and avon do in brazil and we have an autonomous team of people knowing the families, they are close to the families and they end up having new enrollment and we have a better portfolio, not only because we have graduation, post-graduation and professional courses and technical courses, but we believe that the increase in the portfolio, the diversity of the distribution channels, they gain in efficiency in the posts that are still maturing. I would say that 50% not even mature yet. So we see an opportunity for growth, despite the sector as a whole doesn't have so big increased raises. We see a lot of opportunities. That's why we trust our ability to grow and the fundraising for the next years. Okay, thank you, Roberto. So the Q&A session is over. And now I would like to pass on the floor to Mr. Roberto Valério, CEO, for his final words. Well, I thank you all for your participation in this meeting. I would like to congratulate our whole team for the hard work for us to take quality education to all Brazilians. Congratulations to you with wonderful results that are a reflection of our efforts. We are a big team. Congratulations to us. Our RI team is available for anything that you need. Bye-bye. So the teleconference of results regarding the third quarter of 23 of Cognitive Education is over. The Department of Relations with Investors is available to answer any other questions or doubts that you might have. Thank you all participants and have a good afternoon.