Ânima Holding S.A. (ANIM3) Earnings Call Transcript & Summary

We're waiting a few minutes for the room to be full. I'm sure it's going to be very crowded on this Friday. Then I open another call we are here on a sunny day. It was really sunny. Well, welcome, everyone. You are at the right place. We have this webinar to introduce Paula. Let's wait a few minutes while we start or we keep growing the number of participants. Well, officially, good morning to everyone. Welcome to this very special webinar of Ânima [indiscernible]. Well, at the end, we're going to have Q&A. Please, if you would like to ask questions register and raise your hand, and I will be controlling that. At the end, we're going to open up for everyone to ask their questions. It's a much greater moment then all of us, so without further ado, I'm going to give the floor to Daniel.

Well, thank you. It's a great pleasure to be here. Once again, talking to you. I think, the key role of the Board of Directors, I could say that the -- would be capital allocation, understand where we're investing, et cetera. And this is a priority agenda within Ânima. And second thing perhaps is most -- as important as would be for us to define and choose the company's CEO. The 2 processes being done in a very diligent way in the Board of Directors. Marcelo has always positioned himself. He is a founding partner. As a founder, well, he is, but he was playing the role of CEO for about approximately 2 years ago. What I'm meaning to say is that the agenda of one day, Marcelo will no longer be CEO. We're going to seek somebody in the market and no longer founding partner that would take the seat of CEO. That was a decision of the Board for some time and 2 years ago, approximately, we started structuring the process of choosing the CEO. We believe that we have to change the roof on sunny days, not rainy days. So we started looking for people in a structured way. I'm going to invite Escobar who leads the People Committee to detail what the process was like. He's going to talk in a while. A year ago, we met Paula. Then, Escobar will give details on the process, and we said, well, we think it's the right person for us to start playing. Soon we've ran the whole process. She was at the [indiscernible] Board, and then she became a member of -- Board member of Ânima knowing increasingly more that the company being in the Board. She was able to take part in several committees and talk to several people working for Ânima. So that this can be a process in which she starts playing actively. And so we've had lots of conversations with the people, staff members, professors, teachers within Ânima. And unanimously, people said, it seems Paula has been here for a long time for her skills, for her DNA, and many times, we have to -- as I say, it's not looking at another viewpoint, but looking at different views from the same point. And the moment we are is to bring the same DNA that fits perfectly within Ânima, bringing another view or with different lenses as you're going to get to know that, the goal of all of this webinar is for you to meet her. Why at this moment? I think Ânima, well, had in hand, we have the 2 agendas of the Board of Directors. This process maturing increasingly more the arrival of a new CEO that has this Ânima DNA. And at the same time, structuring, putting all the cars on the tracks. So that Ânima moves into a new phase you've been following us so that we can speed up this train. This has been the work carried out over the past year with great diligence regarding capital structure. And this is Paula's structure. But to talk a bit more about this process to explain in a more detailed way how it was run, I'd like to call Escobar. He, that who have led through the People Committee, the whole process with all the Board engaged, if you could share with us what the process was like, I think it would be very enriching to everyone.

Thank you, Daniel. Good morning, everyone. I'm very pleased to welcome Paula as Daniel put it quite well. It is a very important and special day. I think it's worth reinstating what Daniel said. It's important because it closes a very careful process -- 2-year process that has been built in various stages in this process, at least in our experience. It stops with the design of the role. Marcelo uses this expression designing the role of the CEO and seat of the CEO. So we start understanding the demands, the design, the relevant rituals. So that at a later moment, we are able to identify potential successors as you well know, Paula was, at the time, she was an executive, but as a large she was part of the Advisory Board. She has some link to us, and this process of identifying potential successors that involve several names. So several conversations that started happening aiming at understanding profile and combining with the design of the seat let me use this expression here. So this conversation that leads to the sequence of integration. And then in the past year, it became more intense in Paula's case. And actually, in our case, it included a period of first that was very productive as a Board member, contributing as a Board member. And at the same time, getting to know the company, the people, the agenda and of course, detailing a bit more the format of this transition. I believe that Ânima's governance has proven strengthened mature to conduct the process. I'd like to acknowledge the whole Board of Directors that has supported and followed step-by-step and also the People Committee. I coordinated well, we have 4 people to our external I'd like to make special mention to Professor Luis Cabrera, a very well known person as headhunter as governance consultants is an external member of our committee. And from the beginning, he's been the support that we tapped into on the topic of succession that had a major role in the completion of this process along with Paula. So, I'd like to make this acknowledgment here. So I'm saying it's a special day because in our case, it's special because after 21 years, Paula will be the first CEO to be in the seat, not being a founding member of the company. And this, of course, as Daniel has mentioned, this requires conditions, and this is part of the process here is to understand that how Paula's profile, person that combines objectivity, prognosis without losing track of people management that is very unique to Ânima and innovation being part of the trajectory. How she combines her leadership skills with organization governance is similar to ours. So this profile features combine and converge exactly to the company's timing as Daniel put it. Be ready for stronger growth, having gone through a 6-year cycle under the Marcelo's leadership, having overcome several challenges, but actually being adjusted, finding the right person in the right profile and the convergence of this moment is also part is to how special this day becomes to us. So I'd just like to briefly comment on the process and turn back to you, Daniel, and thank once again the presence of everyone, and telling you how happy we are with Paula's arrival.

Great, thank you very much Escobar. I think Escobar mentioned, actually regarding governance. I think that the -- in addition to the -- having the state-of-the-art process, been conducted very well structured, Marcelo said that he was making the CEO seat. We had the intent of finding someone outside. So the same way we said we developed a CEO seat. I say we have much more sophisticated governance, and Marcelo now leaves this CEO seat, but there is no formal founder who is going to be together as we think always be not exactly on that seat, but even closer. On the other hand, governance that has been designed, structured with Marcelo there allowed us to understand exactly how far the Board of Directors goes and the autonomy, the CEO requires so that we could have somebody from outside with all the skills to optimize and maximize and add to the historical skills that Paula has. I'd like to now before turning over to Marcelo, I'd like to say Paula, it is a great pleasure to have you with us. It is a choice and -- it's also yours, as Escobar mentioned, with all your skills, and I'd like to ask Marcelo to introduce you in a more structured way. With Marcelo, what I would like thank you man, to congratulate you for these almost 6 years head of Ânima as CEO. We gone through a maturing process as a company that has been observed for the past years, the way you have led with your heart, with pragmatism, being present at the most challenging times and most important of Ânima's history, and you were there. I've mentioned a while ago, I'm just going to repeat myself. If it's a final match, if we could play Djokovic, those that like tennis, it doesn't matter whether you win or lose, the honor or the battle, the gratitude or the battle is worthwhile. So I'd like to tell you that the honor and gratitude for us to be together building this history is wonderful. So congratulations on what you've done in the CEO seat. It is incredible to announce that we have a new person arriving, but not necessarily, the other person is leaving Ânima. So we're just adding and not switching. Well, of course, we have Paula as new CEO and with everything that she's going to bring to us, and now we're together in another place. I'm also happy for the two moves for our being much closer as partners and founding partners and now Paula taking the seat of CEO something that makes me very happy. So I'd like to turn it over to you, Marcelo, so that you can also introduce Paula and talk a bit about this process and then introduce Paula to everyone.

Thank you, Daniel. Thank you, Escobar. Good morning, everyone. To me, it is a great honor to be here. I'd like to start by thanking Daniel, you, Escobar, my partners, all the stakeholders of our shareholders of the trust you have had me for 5 years and 10 months ahead of Ânima and looking in rich respect, as Escobar mentioned, Professor Cabrera. I remember Escobar 6 years ago, he was decisive and convincing as you've mentioned. To me and to us, he said, [indiscernible] say that we have to bring somebody from outside, governance will say that, but don't do that. You have to take over. He used the term of building the CEO's seat as Daniel mentioned, I think it's been the correct decision. So my feeling here is joy, happiness and especially of duty accomplished. This makes us feel very proud for this feeling for having conducted this work for now being able at the right time, the right moment to maturity that our company is 21 years old. So we are ready to have the top line growth and hand it over to Paula. I've written and posted on my LinkedIn yesterday after live when we closed market, a letter that I wrote and I start the letter saying that the main role of the leader is to choose, bring and prepare people that are better than us to our organizations and especially to my place. So, I am certain that Paula is a women. I told many of you that I've always dreamed of bringing a woman to this chair, Paula is one. I'm going to tell you more about Paula. I have to hear from her. I want to give her more time so that she can talk, introduce herself. But I think Paula comes from an industry, which is a reference in productivity, in terms of growth, discipline, profitability and values comes from an industry I wrote in my letter is something that she was [indiscernible]-- but I think this is an important point. She owns dual strength. She comes from this industry from this place that will add a lot to our work that has been conducted by all of us. She has this expertise of culture of ESG people, especially of humanity. I think she's chosen Ânima and Ânima has chosen Paula. I think this is the great beauty of this movement as well. So this combination between hard and soft is not trivial, not easy to find. And I'm very proud. Publicly, I want to say what we feel that we've chosen and passed the button to Paula is a reason for great honor to me. Without further ado, I thank everyone for the trust, and I will be here at this moment, supporting Paula and the team for a state-of-the-art transition for the time that is necessary will ensure the state-of-the-art transitions. And then rest a little bit, and I'll be available to our Ânima to key play in the best place, best position that I can keep playing. It is so special and wonderful company. Paula, the floor is yours. Thank you very much. Thank you very much the team. I have led into yesterday -- very special people, highly qualified and committed and differentiated. And with genuine purpose of transforming the country through education making Brazil a better country to our children, our grandchildren. If Brazil doesn't face education for Rio, we won't be able to have a better Brazil. And education has no price only value. Paula, up to you.

Thank you very much. Thank you, Marcelo. Thank you, Daniel, Mauricio, and all Board of Directors with this appointment there. And trusting me, this mission and this new cycle of Ânima. Good morning, everyone. We have had opportunities to interact more frequently, but it is initial moment, let me introduce me myself briefly. I come from Rosario, Argentina, Messi's land. A land which I also fall in love with the sports. I was an athlete for over a decade. A goal keeper of a discipline that is so known in Brazil. Lawn hockey, I had shoulders issues, two surgeries and then I was in that rush of those that our enterprises or entrepreneurs had been [indiscernible] sports, I decided to turn my energy. This preparation to be a corporate athlete and I get the invitation of being training at ArcelorMittal when I was 22, very close where I live in Rosario. Since 20-year career in corporate athletics, it's a best. You have people and numbers. People that is human power that generates performance of exceed limit, there with victorious feeds, so I'm an athlete in my blood, and I see that corporate athletics is a place where I found myself. This happened in the University [indiscernible] Steel in 20 years within [indiscernible] being through six different countries and I came to Brazil in 2011. And I felt that's where I wanted to stay. I'm here because I have chosen it. I love Brazil. I have two Brazilian daughters. I lived in Espirito Santo [indiscernible], in a state Sao Paulo. And I'm living in Belo Horizonte [indiscernible] moving to Sao Paulo and knowing that Brazil is a great power. It's a great power of business. It's 9th economy in the world when we look in terms of competitiveness, innovation we are at the [indiscernible] 67 countries. So that's where we have our major opportunity to bring Brazil to the place where it deserves. I found Ânima at a time in my life, those convergences -- this point, we understand when we look back. The right person at the right time and at the right place. So I worked for a long time with people. That's something magical. This happens and it happened. The first conversation I had with Marcelo and Daniel, had a lifetime where I felt what I wanted to build in the second part of the game of my life convert perfectly right after that I felt the purpose of value purpose. I have to work with people. I believe that we share the same values that we have the same guidance and same goal well, what we're going to do, then we talk decide to meet this is value. And it is important to frame the story that they are sharing with you. The company is ready to take a step. To me this is very important. Ânima is choosing me, but I am choosing Ânima. And it is choice. I see a powerful ecosystem filled with value. Ânima is filled with ideas, project and it [indiscernible] me a mission. The Board calls me with this agenda, Paula we need to speed up the train that is on track. And what Daniel has brought to Marcelo, so gone through the worst 10%. The industry is daring to grow. It's been a brave company, also facing its growth in this innovative agenda, courageous one, bringing this view point of sustainability of making this legacy perennial. So I'm arriving at exactly at this moment. The company is ready to seek this agenda to focus on top line to bring us viewpoint, not only of revenue, EBITDA, cash looking at that and understanding that once it's integrated systems, its brand. Now I can play the game better. We know which territory, what brands -- look how interesting. This is the great difference I see in Anima. Its competitive. It has a strategy and it has been honoring legacies in each base, bringing strength to the brands that have had like 70, 50 years of history, I had the opportunity of visiting some of them. But in the initial visits, I can feel where -- what the value is known by the internal audience community, public private sectors, there's a strong reference. So this brand value is where [indiscernible] happened to so the company is ready now. So once it's ready to manage this ecosystem -- power to the edge and let's win see where we're winning losing game at the variant. So in general efficiency to simplify utility in the decision-making process. And as the CEO, Marcelo said. Chair that talks very much in my management style what I did for 20 years at [indiscernible] not going to be in [indiscernible] how much I leave the technical field, I am [indiscernible] actually, I am not a technical person. I'm a manager, and I want to strengthen this value propose that is anchored in this knowledge that the company has. I am not an educational expert, the knowledge of the industry is in here. So I bring a new viewpoint to this that already exists with efficiency gains. It is a new growth agenda that the company has . Perhaps this is a brief introduction to leave some room for questions. I turn back to -- I don't know, Daniel, Mauricio, Marcelo or Marina who is going to be conducting the Q&A session, so we can start that.

I'm back here, Paula. Thank you. Thank you, everyone. At present, we have over 110 people attending the webinar.

So let's start with the Q&A. The first person registered is Samuel Alvis from BTG.

I'd like to before anything else wish a big welcome and success to Paula. I have a question on our side, which is Paula's agenda from now on. At the interview in Brazil Journal, it's been mentioned that there is a focus of resuming the growth cycle of the company. The question would be, which would be the priorities in this agenda and the action plan to speed up the growth -- and if this could encompass new areas of the action in operation from now onwards for the company.

Samuel, thank you for the question. I'm going to support Paula from now on, and the transition is arriving now. She's been in the company for quite some time. But we have to look at it and I think recovering or resuming growth is the most important part of the agenda to speed up that it's important to have a turnaround. It's not nice to do it, and we've done it. This does not bring growth, that doesn't bring a future, but it's very necessary to do. Paula will lead the process or growth in the company, we're going to support her, but we have many opportunities. She is sort of mapping things out. We will intensify this agenda from now on [indiscernible].

It's an agenda of value generation to expand that for shareholders, expanding this value generation to [indiscernible] that are choosing our proposal -- value for educators that has also choose to be part of this construction and this value generation basically is a part of the top line in [indiscernible] that becomes quality to Ânima. It's important not to take that Paula is going to save [indiscernible] part of the agenda being following all the bottom line [indiscernible]. This is the driver. If you take recent stories or result show this, the evolution in profitability. You see the quality of the revenue precisely the quality of ticket, the value proposal that Ânima has to offer. This Is something, actually something that gives me a competitive positioning. Marcelo said education is [indiscernible] Anima as the opportunity of winning and losing at the very end, to lower the gravity center, break that brand position and break the local accent have a strategy with more pricing intelligence, pricing products, positioning, that's it. Market strategy that is well focused with a lot of vagility and the decision-making process and gaining [indiscernible]. There's not great innovation. Of course, there is innovation, several agendas. We are going through strategic planning. So this is precisely what we're doing now. To give an idea we had [indiscernible] 35 executives branded [indiscernible] they were there, where they win, where they lose what they need, giving them voice, the agenda goes through that, a real action. Competitive strong in various marketplaces at the very end looking at the [indiscernible] where we need to strengthen, leave aside and grow. This is the agenda, and go through method, disciplined KPI and monitoring that very closely.

Next person registered is [indiscernible] from Itaú BBA.

First of all, welcome to Paula. Wishing you great success in the new challenge. I think I have a question here. We've seeing the Brazil [indiscernible] story that Marcelo [indiscernible] stay in the company focused on the transition and the organic deleveraging agenda, both Marcelo and Paula could talk a bit about this point. It would help us.

Lucas, thank you. You followed and have been following us. We have designed organic deleveraging agenda implemented everything within our reach, not counting on factors that were not within our reach, that could be implemented by that. We implemented that with great success. And we've gained our awareness one quarter before each one of them and the organic deleveraging is an important point because if we are able to deleverage faster, we generate more value to our shareholders. So we made this move of an organic deleverage in parallel liability management. We're almost completing that. The debentures of [indiscernible] great part of Anima holding. We are committing this work and this put the company in a situation that we have to intensify not needing to do being conditions to doing the best movement of an organic leverage. We don't have a silver ballet, and we have several alternatives. I have more time to devote with the support of our Board, our shareholders to implement this agenda as well.

Yes, we have a question on our Q&A on [indiscernible] talking about the growth of top line, and at the same time, it would be discussing selling assets?

So I'm going to answer that. Because Paula has answered that, speeding up the train on strengthening our brands. We have many brands. So when we talk about the agenda of possible divestiture, it's exactly thinking about speeding up deleveraging for us to be able to speed up the other end, which is top line growth, working in Ânima that works on a leverage level of expansion that it becomes a priority agenda because that's our DNA, our history. From the first day, these 3 guys boarded in Belo Horizonte, everything we've done was to expand, to grow, to give more life and strength to this incredible legacy of these brands of great reputation families. We admire so much, making them grow throughout Brazil. One thing is directly linked to the other and not opposed.

I couldn't help doing my part. Very good. So you mentioned in the previous answer, I'd just like to add a point. Sometimes we need to sort of bend down to take a leap in the past years. We've done in the last few years to give you an example, to be able to be efficient in the use of AI. you have to create a structured data lake. Just an example, so we first need to integrate then be able to have everyone moving, as Marcelo mentioned, system integration creating or building a data lake so that you can actually give strength to the various ends as Paula mentioned. This is the time we are -- so we've streamlined, restructured Ânima as a whole. So there's bigger centralization so that you have the possibility of empowering the very brands as Paula mentioned. All this gain and growth in an organic way will be in this independent of the variant and a deeper analysis of brands, the whole process that Paula has put -- brought up. I just wanted to add that we have gone through this phase of systems integration, setting up the data lake. So the strengthening of Ânima Holdings so that we can at this moment when Paula is arriving. And actually, Paula has the skills of working projects, product line, something more fluid that matches very much this timing of Ânima.

Thank you, Daniel. With this, I'd like to turn over to Paula, nothing more opportunity than your wrapping up, Paula of your first moment in one of our [indiscernible]. I cannot talk about my emotion, my pleasure being here along with a woman. I hope to mention this. I think you have had a lot of welcome mentions. I think everybody has been so much for your success. You are the right person at the right time to make us fly very high. Just as we have been flying in the past years. Thank you very much, [indiscernible] our success, and you have the floor.

Marina, the mission of inducting Ânima in this new cycle sustainable growth convert just with what I have to offer, which is this balance between purpose and pragmatism. Purpose, with no pragmatism is [indiscernible]. Pragmatism with no purpose doesn't make sense. And Ânima is more from our purpose with the mission of [indiscernible] and transforming Brazil through education. And I'm a daughter of a university professor. I'm here through education. I have a genuine value, conviction and true [indiscernible]. Because this is where I know many companies when I left [indiscernible]. And we talked about the role of companies play in the society and the impact they generate to their [indiscernible] to shareholders, students, clients and associates. This is the new game of business to become better for them to generate value to be in a mission to make the deliveries. And pragmatism without purpose does not match with Ânima. Ânima is a company that requires every day at every class, every interaction between professors, students and teacher to make this magic to happen. And that's what Brazil needs from us. Passion for [indiscernible] the severance this game, understand or bring a new look to what is being done very well here. I found a team that wants -- that is willing as attention [indiscernible], on Monday, Tuesday met with the team. I felt this strong match, which is very rare. But this is the real power of Ânima. So the idea is that Anima perhaps you have to calibrate, organize, follow-up and go, and it will fly. And this is what's going to happen from the place. People see Ânima and this is rare. I tell you here because this is where I've been working with people for a long time. Many times, people call me to motivate thing, push the guys. I think we have this competitive potential.

Thank you. Thank you very much you all. We are going to close here. We are available to all of you. As always, we're going to have several interactions from now onwards as Paula mentioned. Thank you very much. Have a great day. See you soon.

Thank you very much. Thank you, guys. Have a good weekend. Thanks. [Statements in English on this transcript were spoken by an interpreter present on the live call.]