Vitru Educação S.A. (VTRU3) Earnings Call Transcript & Summary

[Presentation] Education will brighten it. That's through the future that Vitru Education has changed millions of lives and for the light of knowledge to be even brighter. The controller of UNIASSELVI will welcome you to Unicesumar. These are welcome to a great institution and a new phase of education in Brazil with increasingly more education, innovation synergy and especially quality, higher education and highly democratic to everyone, the union of forces that makes Vitru a leader in higher education and distance education in Brazil as well as on-campus medical education, UNIASSELVI and Unicesumar continue with their independent education models, but now they're linked with the same purpose, providing quality education and making it reach all Brazilians, UNIASSELVI and Unicesumar and Vitru Education, we are proud of it.

Good morning, everyone. Hello, and thank you very much for coming to Maringa. It's not that easy to get to the city, but we wanted to do something different. In fact, it will be a very different day. Welcome to the first Vitru Day. It's a great honor to be here with you today. It's our first Vitru Day since the IPO. Today's morning agenda includes 2 sessions that will show what Vitro is and what Vitro isn't. And also to provide more details to make our product more tangible. We say that our products UNIASSELVI and Unicesumar are different, but why? And how are they sustainable over time? Our VPs will describe or provide more details about these 2 products. Unicesumar and UNIASSELVI, that will be for about say be for about 1 hour and then we'll have a coffee break. Then at 11:30, at tops midday, we will have our on-campus visit. And this is why we came to Maringa. We wanted to show you Unicesumar inside. And this is our new brand, our sister UNIASSELVI. So I now invite our co-CEOs, Pedro Graca and William Matos.

I want more music, come on. We're just invited on stage. We need so much emotion. So first of all, on behalf of Vitru Education, a very warm welcome, everyone. For us, it's a great pleasure, a great honor to have you here in our city, in this institution, in this school. Thank you very much for coming. I mean you came from your cities and towns. You left yesterday, you're here today with us. That's great. And thank you for those that are attending online who couldn't come. And again, you are invited to come here at some point in the future so that we can exchange experiences. And so that you can learn more about this campus, that Unicesumar campus and also enjoy some very good wine that we had yesterday. That's very good and important for us. It's a great pleasure, as Carlos said, to have you here. Today, our goal is for everyone to leave this school with much more knowledge about Vitru Education. Everything that was prepared was carefully prepared for your experiences here in your 24 hours in Maringa to be unforgettable. Thank you very much for coming.

So we're ready to start. Again, a very warm welcome, everyone. I think people were hungry. After dinner yesterday, there were some complaints about this. I don't think they could have as much food as they wanted. Well, okay, that was a joke. Let's start our -- discussing our mission, which is to make access to education more democratic in Brazil with a digital ecosystem and also to train our students to create their own success stories. And we have a huge impact on our students' lives. It's so satisfying to be part of this process of participating in the evolution of our students. I have some provocation for our next Vitru Day. We should also have a ceremony graduation -- sorry, graduation ceremony for our distance education students. You see how moving they are -- these ceremonies. I think everyone has participated in similar ceremonies. But when we are graduating our students, when it's usually the first person in the family to have a higher education degree, it's so moving it so touching to be able to participate in not only the ceremony or not only the graduation, but the entire process is so good. So we both start by introducing our team to you. Some of them, you already know as Michael Jordan's talent wins matches, but teamwork wins a championship. So Pedro and I are working together in our business combination strategy. We had great professionals that belong to both companies. So now at the beginning of our integration process, when we were planning with [indiscernible] company. The first decision we made was to use the professionals we already had working for both institutions for both companies. So when we look at our new structure, it was clear that we had 2 very relevant areas, 2 very relevant departments. And we wanted also to seek professionals that could belong to this great team to keep building this great story. And we will be showing you these new team. Let's start with Carlos, who is widely known. That's our Finance and our IR VP, the one that talks to you all the time. He has a lot of experience in finance in many different economic segments. He has wide experience. He built his career in the energy sector. He has lived abroad, South America, Europe. But I'm really impressed. I met Carlos a year ago. I was impressed by his capacity, although he has a lot of responsibility in finance. He's also passionate about education, and he is one of our finance and IR VPs that contribute the most for the quality of our operations, the entire organization. Your turn.

Oh, my turn. Well, I'll talk about Ana Paula Rodrigues. She is in charge of our corporate operations. It's a great honor to work with her for a long time. We worked together in another company for another company. And she knows the processes of our institutions. She was leading our integration and she will talk about that the integration project to us later on. Then Ricardo Grima. He is responsible for distance education at UNIASSELVI. We have 4 business units that we will describe later on. But anyway, Ricardo Grima is responsible for UNIASSELVI distance education. We wanted the 2 distance education operations to remain separate because we have different delivery models, and we'll be describing those in details later on. Grima has experienced working for education companies before, and he is responsible for the entire UNIASSELVI operation. Let's move on to Érico Ribeiro, Erico. I think I've been working together about for 16 or 14 years and he has a lot of experience. He has his white hair, as you can see. It was -- he wasn't like that when I met him. I remember that well, so he's responsible for on-campus operations in these 2 brands. They're under the same Vice President. He is responsible for both Unicesumar and UNIASSELVI's on campus operations because that's how we are doing this. There's also -- our medical school is under him. Then our Continuing Education President, Tiago Stachon. He has experience in advertising and marketing agencies and 5 -- no, 6 years ago, he joined us. He was with us with Unicesumar. He's responsible for market operations. And now he accepted to lead our Continuing Education Vice President initiative, unlike [indiscernible]. He is responsible for both brands. They still be operating separately, but they're under the same direction. And then James. James used to be Unicesumar Academic Vice President. He has -- there's one more thing about him. James was built -- his story was built at UNIASSELVI. He was UNIASSELVI for 14 years. And as James was American, James Tomelin, he then joined Unicesumar and as he knows both methodologies, education methodologies, this has put up the entire quality enhancement process, also our synergy processing. Then there's James Prestes. James Prestes has, again, a large long history in education, basic education, higher education. James Prestes was responsible in distance education at Unicesumar. He was responsible for the entire education. He would continue. He would replace me if I died. And he has been doing a great job. So we're really happy that I was promoted and he is still taking care of the whole company. [indiscernible], for another company, I won't mention anyway. There are many coincidences that have helped us considerably in our integration process and also in the delivery of our great results. And then let's [indiscernible], Guilherme Franco, he joined the company a while ago. A while ago means -- seems like a long time. Now we've done so much. And Guilherme has huge experience. He is playing the game. He has been adapting fast. And we've been together for just a few months, but we've been working very hard. Likewise, our Vice President for People and Management since the beginning of this business combination, Pedro and I remained or understood at that point how important it was to keep this position and we needed someone from the market. Although we had people that were prepared to take this position in the company, but the 2 companies had very well established cultures. So when you combine 2 businesses, the greatest challenge is always culture. Our company is managed by people and our work depends on people. We are over 10,000 employees. And so for this reason, we decided to invite a professional from the market for [indiscernible] and as Pedro said, well, Guilherme started this definitely hard and really well. And they've been helping us to think the culture of this new company that is now forming developing. And people are crucial when it comes to delivering results, especially in education. So everyone, you should know that they'll be helping us out, and we'll be talking here. But this is such a strong team, things seem to be so fine. Well, things are not exactly easy, but we do a great job. Let's talk about our history now, Pedro.

Yes, we have a time line showing the story of both institutions. And although we have 2 different education companies, they have a very similar story. It's [indiscernible], University [indiscernible] also entrepreneurs who found an opportunity to join the education sector and changing education. They were both educators. And they wanted to do something different in education and achieved a huge success. Both institutions started distance education in 2006, and they had the same purpose, the same goal. In other words, to make education democratic, but again, quality education. And this was a great deliver distance education but also quality education. At the time, these 2 companies were trailblazers and they had this concern of providing educational services with a focus on students and providing quality education. This is why they were so successful. These were 2 different companies, but they were very similar in their goals and ideals. Yes, and all these foundations that were built throughout this time -- for this purpose, I mean, this was crucial for this moment. Since 2016 and '17, the 2 companies did this. And of course, we had also changes in regulation. So we could open new education hubs in many parts of the country. As a result, both brands at the time, they were still separate. They started to expand. And this expansion was fast. And again, there were some premises that were crucial in this process. When we look back today, we are sure we took the right track, the right course like we had, what, 50 -- or 48 hubs and now they have over 350 and 500, respectively, you know the size, the magnitude of this challenge. Now at the time as the 2 communities were separate, the -- well, hubs were very important. There was a very special link with the entire methodology that was created to be able to achieve this. So when we look at how much these 2 companies grew last years. These were these schools that grew the most, and they grew sustainably with a priority on education hubs as we will describe later. In 2020, the 2 important brands were formed in Unicesumar becomes a university. It was granted university status that was the dream of its founders. 30 years later, it shows how committed it was to transforming Unicesumar. Vitru created -- now so the IPO and NASDAQ and then Pedro, what happened, I don't know if the market expected, if the market talked about. Then we had our business combination. In 2021, we announced our business combination which happened before we had a lot of negotiation. It wasn't easy for us to win them over. But as we talked in our conversations, it was clear how similar our companies were, the culture, the objectives, the concern with excellence. And then every time that we talked, every conversation we had in over 4 years, it was clear and clear that it was the best business combination in town, that's why -- it's not about acquisition. It's not about someone taking something from someone else or taking over control. These are 2 companies adding up their experiences. That's why they're both standing in front of you because we're expecting the best of both companies to build a new one and then we create a single institution. Of course, our focus was on digital education, but we're able to have more students to focus more on digital education, concerned about quality. And here we are today, this is our Vitru Day to say, yes, Vitru is a different company when it comes to education. It is a different company from the education industry. We have 3 very well defined pillars that they say that we are different. With focus on digital education, the only one. It is the company that has clear competitive edges that are sustainable. And of course, the combination of these businesses give us synergy and scale that are important for us to continue delivering on results. And you probably think, William, it's easy to say, but it's not that easy to do. Show us how you are different. And this is what we're going to do now. We're going to give you some information and some figures about our company.

Is it the next slide? Yes, it is. Okay, let me see. I think it's clear when we look at our income. 76% comes from digital education, but even more than that 97% of our students base comes from digital education. So we won't have any distractions. This is a company that is always focused on delivering with the focus on students. This is our competitive edge that gives us the opportunity to keep growing in this segment. Okay. When I look at university education, we know that digital education in DE went from 1.6 million students in 2017, and we are at 3.5 million students at 2021. 51% of the base is in the [ private ] [indiscernible] graduate, education. So this is a base that keeps growing, actually. And we are part of this market with a focus on digital education that we're going to be showing to you along this presentation. Now the pillars color -- scale and synergies. According to the data that we have -- that have been reported in the third quarter 2022 is the largest company in DE Undergraduate courses with 672,000 students. But what we should highlight here for sure is the chart on the right that shows the consistent market share gains in recent years in the past 5 years. These 2 solutions together went from 3% or 13% up to 22% of market share. And we still have a long way to go in terms of growing. We want to keep growing and delivering even more results.

Let me tell you about the difference between the models and why we have -- would differentiate from the market. Before talking about our models and how we deliver, let me talk about what we have available for digital education. On the right, we have videoconference in the beginning of Undergraduate education in Brazil. In studios, in classes by broadcasting these images to hubs -- to satellite. I mean, we did have internet, but the quality was really low with the beginning of the [indiscernible] areas. So we didn't have the possibility of broadcasting over Internet. So we would use satellite broadcasting. And this was the first model that we use to gain scale to scale it up using new technologies. And then we have Internet to have more bandwidth and that's why we don't have as much [indiscernible] although some universities will use it. And then what we call to traditional 100% online. This is a model where the institution is in a centralized way, put together the content and the curriculum. They have tutors to support the students. It is easier for you to operate. It is easier for you to enter the market. So the new institutions, the newcomers, they have actually started with this methodology, which is easy. It's cheaper actually for us to operate, but it's more difficult for you to engage students and to make them feel they belong as they have a hard time retaining students. And then with our 2 brands, Unicesumar and UNIASSELVI and I should say something before I explain. We have made a business combination, but the assumption that we actually worked on is focused on students. That's how we came up with these 2 brands. That's what brought us here. We're going to keep our focus on students. This sounds like a lot. Well, what does it mean to focus on students. It's look at our delivering to look at the student, wouldn't have any distraction, would not create any problems in delivery to the students. So we want to focus on students, will have to make a decision, will have to make an investment. We know this has an impact on students. And if there's so positive impact, we don't do it because this is not our priority. The other assumption is that both brands we operate -- because they cater to different student profiles. I'm going to talk about the profiles later, and they're going to coexist. Today, we have 1,000 hubs with each of the brands, we're going to keep growing them. They're going to -- they coexist in both -- in the same city. They're going to keep coexisting in the following years. So in the south, we have a model that has a tutor with weekly meetings. What we started was in person meetings, so we will have the in person meetings at the hub, but now we also have a modality where we do weekly meetings, but we can do it in online. Vitru tutor is someone that follows the course during the student's journey and is responsible for supporting these students. It's a local tutor from the region, from the city who knows local reality, students reality and they can provide what we do centralized in terms of curriculum to the reality of the student and be closer to the students so that this experience can engage students. So this is Unicesumar. And of course, it is a model that because we have face-to-face meetings, this depends a lot on the hub. The hub has a great participation in this education model. But what's different in Unicesumar. Unicesumar is different because we also have a hub. So he has -- you see that have a hub, it's not only for itself, but also Unicesumar. They are going to say that these hubs have labs, have classrooms, libraries. Of course, we know that there are some hubs from other institutions that have only 40 square meters or 50 square meters. We do not have this kind of hubs because most of our hubs are structured -- have to -- you just have to look at how many students we have on average by per hub. It's a lot of students. So Unicesumar has created -- I mean, even though we have a digital model. It's more underlined model. They have created a model where the student is more engaged than the other models. So we have KPIs that show this if you compare to other models. Is it difficult to operate? It is. It is difficult to manage. It is. It would be easy -- I mean, quicker if it were centralized and not have hubs. Of course, the 2 brands have 1,000 hubs and not 2,500 hubs. Old brands could have expanded more the hubs because -- but we didn't do it because otherwise, we would lose the focus on students. That's why we don't have so many hubs that, does not mean not doing any anymore. We're going to do it, always but with the assumption that we have to focus on the students.

Okay, great. Okay. Next slide, Pedro. I mean, I don't want to be repetitive. I mean the VPs from BUs will be with us. Pedro, we don't have any time anymore. Do we have time? Could -- can we have like 10 more minutes? I want to highlight something. And I'm going to talk about [ 1.3institution ]. First, we have to see this is a proprietary methodology modeling. And this being tested and validated. It's over 10 years, and we are operating with great educational quality KPIs. Everybody says that they have a proprietary modeling, but they don't have the modeling as tested as ours with great KPIs. I mean, institutional KPIs, [ Ministry of Education ] KPIs. I mean we do have it. As Pedro said, we have UNIASSELVI. And many of our tutors are former students. And that's why they have so much empathy with the students because the tutor was a student before. And then they can deliver more value and more quality. That's why both institutions because of what we have built together, we have a competitive edge on our delivery to drive our growth. And this was done in hubs right, Pedro. Next one. Let me just say something. This is the slide that's going to be more problematic for me and William because some hubs have been chosen. They are across the country. But I'm going to say that those who choose these was the design team because they got only a couple of hubs. And I'm pretty sure that when I finish my presentation, I'll have people writing to me and asking me why I didn't include the pictures of my hub was -- [indiscernible] in selecting the hub pictures? No I haven't. By the way, these are the hubs. They have infrastructure. They have classrooms, they have labs. They have a lot of activities. And people say, what's the edge of UNIASSELVI and Unicesumar? Our edge is that we have activities. We have the concern of being connected to the community municipality. But there's one more thing that we want to stress. As Pedro has said, we are a company with a focus on our students. And we try to understand and make our customers happy. You probably know that NPS is one of the indices to measure this. So we can show -- we consume our NPS. But here, what you see is a relevant [indiscernible] information. Martins is doing a study around the world. They presented to us, like late November, early December. And as you can see, Martins did this study and told us that Unicesumar and UNIASSELVI had number 2 in NPS as reported by Martins' studies. I mean, we knew about it already because we do it internally, but have Martins do it to present to you on our future day. This actually shows that we are a CM it's really concerned about our student. I mean, that's what you say when you see NPS, who's number one. The information that's not official that we cannot disclose for the fourth quarter. I mean, we do have information and #1 is in this institution. It's not like us. We have 800 students, and it's not easy to do for you to work with 800 students and have such a high NPS. It's not overnight. There's a lot of commitment with a focus on delivering all that we promised to. So we do this with people, right? This is an education institutions. Of course, it is to have a purpose and a mission and may have an impact on people's lives. It's about aligning people in the same path. We do have a lot of actions for us to create the culture that we have constructed with the 2 brands. And then we have one program called [ Soma ] for diversity, they focus on diversity, and that's, of course, so important in such a large school, right, with almost 800,000 students. This is very necessary. Then we have a course in the signs of happiness, if you're interested, you can learn more about it. It's so interesting. Then there's one about awareness raising and autism. We train professors, not only for our school but also our tutors, but also throughout Brazil. We prepare these teachers and professors to teach people with Autism Spectrum Disorder. We have many other brands, social responsibility, for instance, and that's also very important. Vitru also has -- well, their differentials are translated into acknowledgment. We are certified, and we've been certified in great place -- Great Place to Work for 4 years, 4 years in a row. Then WOB, W-O-B, that's supported by United Nations that is -- that we have 2 women in our Board of Directors, and this is the major concern of the WOB and it's great to have 2 amazing women as directors. And their -- contribute, people might say, well, women are -- there really -- these 2 ladies make things work. They organize our committee, our Board. And more recently, we were awarded 2 prizes, the Blackboard Catalyst award and that was a world recognition award that we're over 200 institutions in the category was community engagement, which shows that our commitment to our communities and the way we deal our communities and all stakeholders, it was great, of course. And then we are among the top 100 IT innovators. And for us, technology is our driving force, really. Now this is Vitru, right, Pedro?

Yes, this is Vitru today with 2 brands that will continue, that are still there, very active in business. But then with a common platform that is developing, and we'll be showing you what we have been building. And we are also ready to get new brands in higher education or other education fronts. We have experience. We have data. We have distribution capacity. So we are expecting to [indiscernible] or have new brands, not very soon. But in the next few years, we're expecting to have new players. In fact, it wouldn't be really responsible to have such a great platform with such a great structure and experience not to have other -- to join other education segments or fronts. So it would be important. This is very important. And that's the spoiler, right? Pedro, who's much more experienced. I mean, we might add other brands. We are finishing a huge integration process, but we are also considering new brands. We've built so much together, the entire technology structure, our academic structure, our people structure and also our footprint hubs and partner hubs that are so committed with our huge student base. So when we look at the market, it's clear that we will keep growing, developing and taking on new challenges. And last but not least, 1 minute and 40 seconds. We are doing great. Yes, we've trained. We've practiced, right?

Yes, that's right. So we have a transformative business combination that was made very clear, I think, right? And a lot of value was created. We will be presenting this to you, it will become clear. Then academic excellence. We have 2 widely known -- highly reputable brands. And then we will continue the legacy of our founders. That's why we focus on our students. Then corporate governance, as you know, those that are sitting at the Board of Directors. And we have a lot of knowledge being added so with our current directors. And now one more thing. When we made this -- when we did this, right, and combine these 2 companies, we have the best of both worlds, UNIASSELVI who has recognized leadership. The same thing applies to Unicesumar, right? Very special education services that started a long time ago and had learned so much in the last 15 years. We wouldn't be what we are today without having had that experience. When you see a new entrant, okay, there's this new player will change everything. Well, without a lot of experience, you can't make it. Now the 2 brands, they had different trajectories, 2 different journeys, slightly different models. Every -- each of the 2 companies were highly successful, but they had 2 different ways of doing things. And now we will adding these 2 experiences together. This is why we're talking about a business combination. We had very good finished products, very special products delivered to students. And now these 2 products and deliveries are added together. So you see that launch has been learned, and we don't need to go through the pains that were needed. We needed to go through because now we are where we are. So [indiscernible] talk about synergy and having improved so much. This is what we're delivering to our students. We have a great product. We have 2 brands or companies together. We'll see a quantum leap in quality and we see now the experience of both companies combined to get there and deliver to our students that will be a quantum leap in quality. So when we talk about quality, it means we are standing out and we are still at the front. We are still leading and that's the value of our combination. And this is translated into numbers in quarter 3 is the first full quarter in which both institutions can present their results and earnings together. As you know, we have a total of 744,000 students. That's a total of students in this quarter, quarter 3, and we had 100 operating education hubs. Net revenue of BRL 400 million in EBITDA. Adjusted EBITDA of -- combined adjusted EBITDA of [ BRL 143 million ]. That's not just a result of hard work or a single night of work, right? As Pedro said, this is the result of people who dreamed -- sorry, dreamed and worked really hard, people who understand education and how education works. And we, at the helm of this company, we have this commitment of continuing our business together. We're here to keep working through the support and governance. And also with your support to, and this is why you were invited to attend this Vitru Day today for you to learn more and get to know our campus at Unicesumar. And I don't know if you will understand it a bit more, I think we'll be aware of what we can do that Vitru is a different, a special company. Thank you again very much. This is the end of the first session. We'll be back soon and Carlos will continue now. We'll just take the leave now. Thank you.

Thank you, William. Right. So with this combination, we have synergy lever -- levers. We have CapEx and OpEx and commercial synergies. When you look at our commercial side, we have these 3 levers, and then we will give you more details, of course, about each of these [indiscernible]. The important thing is accelerating or speeding up our hub expansion and then practices for student retention and also student engagement. These are in the market at Unicesumar. That's also been taken to UNIASSELVI and then we have a complementary portfolio -- we had some courses in one institution that we're not in other institutions. Now with some changes, we can add to our portfolios. We can add to both brands. So they're now offering all these. And we'll be talking about this later. And then CapEx, our focus is on content production [indiscernible] invest and capitalize on content. So we'll have a single content factory, if you will, right, content maker, not only -- it's the same material, but it's different, too, at the same time. So we have 8 different groups of people, different processes that are now unified. And that means the production of 2 slightly different products for Unicesumar and UNIASSELVI. And the major lever is, of course, our people force. And that's easier when you grow as both companies are growing and generating synergy between people. It's much better when you're growing than when you're not when you're decreasing, right? But we are in practice hiring fewer people over time. There's also gains of scale in contracts and hiring. There's also greater lead intelligence. We're maximizing on the conversion of leads of different products, as I mentioned, and also collection and default practices. So Unicesumar is a little more assertive than UNIASSELVI and this is also be addressed. So we have general synergy levers. And I can give you some examples. Let's invite Paula. Paula, who will explain the planning of our integration process between UNIASSELVI and Unicesumar.

Thank you, Carlos. Good morning, everyone. Again, I'd like to thank you, everyone. Thanks, everyone, for attending our first Vitru Day. So this, I'll talk about integration process and how it was structured since the beginning of its planning to the present, we hired a consultant -- a consultancy to contribute their methodology and experience in integration in the education sector. But the planning content, the content of the projects are, of course, a result of the knowledge we have in both brands. So the first thing we did was to write our integration thesis as both -- both CEOs mentioned, for us, students are at the center, at the core of our integration thesis. So the conduction of our integration process involves this question. What is the impact on our students. If we are integrating, if we have new projects, we change our systems. If this process has any negative impact on students, we go back to the draft board. We start and redesign it. We have 4 dimensions: First, people. We are a people company. We work together every day to make our student dreams come through. So we -- for us, it's important to understand the culture of both companies. We have many similar points, but then on the other hand, we have 2 very strong cultures that have significant structural differences. So we need to map out both cultures and design a common desirable culture. So companies, as they grow, they preserved this. And that's what we'll be doing from now on, too, always putting our talent, our people, our leaders premium. So we -- and respecting this focus on student. And we knew that we needed a strong governance for a project that would take 2 to 3 years in this process. So we involved major leaders that would work in this integration process. We also define the phases of integration right timing or time line for each phase of the process. Then all integration projects, we needed to respect the time line to make sure that we would meet our intake goals. We are expanding our hubs. As you will see, we pretty [ capture ] many students. And I'll talk about change management and also the creation of a center to manage change to mitigate and follow up any risks that might be posed by our integration. Then technology. We are a digital education company. So technology is our foundation. And this is part of our integration thesis. Technology is our foundation, then mapping all our major systems and also our satellite systems that underpin both brands. We have over 100 systems operating in our -- in both brands, UNIASSELVI and Unicesumar. So searching efficiency, integrating these 2 systems, this would be also crucial in our integration process, especially with a technology architecture that could support the integration of these 2 businesses. Number four, our values, delivering values, our values to our students, especially when it comes to content, but also value generation in our operating model. Vitru is a different company as we mentioned. So we want to stress, to highlight this difference. I participated in some integration processes before, and the governance of integration was just defined by 1 side. But this time, Vitru wanted to be different. Vitru wanted to run this integration project as a true combination. So we want to define this integration and the leaders would be both brands, both brands would conduct the process of integration. So after this integration thesis was written, we could then structure the phases, the planning phase and the other phases. Between August 2021 and at May, we defined the integration structure, and that was the preclosing phase. So this was a small group that was operating in isolation. We mapped the people, the major problems that might arise. And that's when we had evaluation from the Brazil's economy committee. That's a very tense period. We identified where every part should be in the new structure. We also mapped our major processes. So we had 3 weeks for planning to compare the 2 processes of the 2 brands. So we were seeking, again, levers for our -- for the best practices of both. So we involved everything we had a visit by the Ministry of Education, too. So we identified our levers in our strengths. So we designed the major synergy levers from that point on. So financial synergy and organizational structure. At the typical 100-day plan, the 365-day plan 2, and then we refined our planning, and we got closer to the owners of each process. We talk to them. We understood their needs, and we refined this in about 15 days to 30 days, we further refined our integration plan. I think the 1 that we expected for in the period was to stress what you saw of our organization. We actually disclosed to the company, the company structure with all the areas. Then we created a synergy plan. We expanded governance by having other leaders participating. And we also defined all [ educational ] projects of the integration. I'm going to show you down the line that what we have in our integration portfolio. We have the 104 projects that are in progress. Then in 2022, we started working on all the projects based on [indiscernible] Q3. In terms of synergies, size project and also the need of a transition plan for each project. We have put together a work plan phase of these projects with a product, a PO for each of these plans. We also created a synergy capture metric to measure synergies. Then people. We have a focus on people. So we apply -- we conduct other surveys to see how our employees saw the integration trying to be transparent to not only with the corporate office but across the company. So the workers, but we provide information all the time about the integration. We have refined our workflows. So 3 months after the integration, new opportunities came up for projects and they were added to our portfolio. We have consolidated our integration office, which is here in [indiscernible]. We have created a dashboard and controls for each of the projects. And I remember that says we were planning with Pedro and William, was the equivalent between integration and the operation because we have a lean leadership. And for daily activities, we have the same leaders leading the operations. So then we start -- we started like following up on this equilibrium, especially when we talk about expansion to see if there was any negative impact on the integration. So we are in a process that's going to last until 2024 because we have this growth in DNA and focus on results. We have to focus on discipline when we do the integration. So VPs would report weekly to CEOs on the status of their projects, on their synergies. We have a lot of project meetings every week. Synergy committee is with Pedro and William. [indiscernible] our VP for people. This is his [ father ]. This is going to change the name, right? Just to map people and culture besides plenty -- the continuity of our growth. We have created the synergy committee led by [indiscernible]. So then monthly, we can measure the synergy to see if it's CapEx or OpEx and also keep track of the cost of the synergies. We started also integrating systems. So we can look at our achievements. We have 104 projects, most of them have priority [ 0 or 1 ]. [ 24 ] of these projects have to do with our strategy and also the sustainability of the company. We have implemented [ 3 0 ] priority projects. And more than half of these products that they have support from IT when I talk in development, I'm talking about technology development. I have the team here, and we have the VTs. And as you can see, the VT with our project is academic and Janes will talk more about this VT.

I'm trying to speed up because I don't have more time anymore, but thinking about integration projects with the best practices and operational efficiency that delivers to our students, especially because we have defined that the brands would be separate and the student would keep using the same brands. So we started finding operation efficiency in our transaction project. So 1 that we're doing now, we're going to end in April. It's the implementation consolidation of our shared service center. And you guys are going to pay a visit to 1 of these center in Maringa. So our main major premises is to serve students according to the brand. So you have to find that all the projects will try to mitigate the impact on the students. [Foreign Language] So we thought that we don't want to -- we don't have to provide this to the same service regardless of both the brand. So the idea is that we grow and we expand and 1 of the objectives of the center is to make it easier. We have to find progressive synergies. So the -- we don't have any negative impact on students. So we have to have perfect timing in doing things and also change management -- tell us about change management and taking care of people. Let me give you concrete numbers. We have 131 process that have been integrated in our value chain. Our focus is on development training, performance and continuous improvement and also automation. UNIASSELVI had -- already had an RPA cell. So automation is going to be implemented in both brands, besides development and training. This is how they are divided from plenty. Unicesumar has a strength in serving the student, although UNIASSELVI also has great KPIs, but it's clear that transactional process related to students, contact with students would be in the state of Maringa to value the people that we already had working for us. In Maringa, we concentrate all the process related to students, as I said, from when they sign up and when they finish the course. And then the center -- then we say the center is with UNIASSELVI, especially after the IPO to consolidate control metrics, standardization, compliance of back office, receivables, payables documents for the hubs. All these processes are under the team of [indiscernible] [ Catarina ]. As I told, over 130 process, this goes through until April and talking about 104 projects will be concluded until the end of 2023, except for those related to technology that will run until 2024. Thank you again and turn it over to Carlos to talk about our expansion. Thank you.

Thank you, pal. This was just another example, right? Number 2 is how the hubs complement themselves in terms of geography. So this table -- I mean, today in Brazil, by September, we had over 1,000 hubs for each brand. You can see that in the Unicesumar and then, if you go to the south, we have more UNIASSELVI. In the Southeast, it's more than 40% of Unicesumar. UNIASSELVI has only 25%. And this is important because it means that we have stakeholders who know the local reality. They know the student, they're part of that community, and they now can provide a second product. And as we said earlier, we're different and we cater to different audiences. So it's really important for us to have a local partner to leverage who's been working and operating in the region to offer a second brand. This speeds up our growth. This is happening already. We have like open hubs with partners in different cities. Today, we have around -- in September, like 2,108 hubs. And as Pedro said, we have different audiences in terms of income and autonomy in the way they educate themselves. So the average income is a little bit higher for Unicesumar. And the UNIASSELVI student actually likes and prefers to have a local tutor. And they'd like feeling they belong, that they have classmates and that they belong to a whole group. So they want to go to the classroom because they want to have a classmate. And for Unicesumar, this is different because it's more of [ autonomous ] students. Looking forward, we have a presence in the 2 largest region of the country, the Northeast and the Southeast. And these are the regions to have less than 50% of the students doing distance learning. Business learning market in Brazil is 41% in Southeast, 17% in Northeast. But in the Southeast, 50% of students are still taking in-person classes. We have a growth opportunity in the Southeast, so Unicesumar can grow more in the Northeast, in the north and the other band in the South and Southeast. We have mapped the opportunity. We have a lot of hubs that are going to open to date. I mean, this year, we're going to be open 500 hubs, which is twice as much as we did in 2022. And it's much more than the average that we would do since -- that would be doing since 2017. So for 2023, we're going to actually do more. This is a synergy lab that we started in 2022. So this is probably in IPO like back in the day. Back then, what we said, we have gone competitive as that will make sure that we can grow with more market share. Something that we -- that people asked doing nobody did the IPO was, okay, you guys have grown a lot so far. But the market is more competitive today. It's very difficult today, right? The market is going to be more harder on you. And then we kept gaining market share and the management of average [ ticket ] is now that UNIASSELVI had. Now we are applying this to Unicesumar. This is going to be talked about later on. So we have grown a lot. Something else that was at the Southeast was our next growth frontier, right? Because we had grown a lot in the south and the center of the country and in the Northeast. Our strategic focus was now Southeast, but that would be the natural growth frontier for us. So today, we went from 122 hubs in June 2020 to 705 including Unicesumar. So we have twice as much students with UNIASSELVI. And if we add Unicesumar, we have over [ 90,000 ] students in the Southeast. We were told that would have a lot of premium hybrid courses. So we launched the nursing course in 2021 -- August 2021. And this actually increased the -- our market share. Today have a lot of cities where we have nursing courses [indiscernible] because in the past, you can do really nursing course in a small city. But today, you have this possibility. So -- and we did this organically. Little by little, providing technical courses. So we have a lot of growth potential, not only organic but also nonorganically. We have distance learning potential, but not only this, we have other potential of growth to complement our portfolio so that we can provide the same students with more products and more portfolio and to have more products with these hubs with the student from 16 to 19 years old. And then our great promise, and that was inorganic growth, as we mentioned before. So we will now focus on M&A, but M&A that generated value is not just growing for the sake of growing. We want to have an M&A agenda that would generate value to everyone. And we were fortunate enough to talk again to our team, and then we closed our agreement in August 2021. It is great not only for us but for Brazil because we now have a single company in Brazil and worldwide, I think that has a real focus on distance education. And with all this quality being provided. Okay. It's now time to break for coffee and we'll be back very soon. In about 20 minutes, we will be back. Okay. Sorry. We're having our coffee break now, aren't we? I'm hungry, come on. I skipped breakfast to be here. You want to do this later? All right. Okay. I'm very obedient and resilient. So let's move on, but not having a break now. We have another 20 minutes, and we will now discuss academic integration. Oh wonderful, I'm between you and the coffee break, that was wonderful. Okay. So we will now discuss methodologies, and I'll be showing you the reasons why our robust figures that are consistent and reliable because we have this background, we have a whole educational engineering that explains UNIASSELVIs and Unicesumars success. The Academic Vice President, UNIASSELVI's first professor. The great history was passionate about education. And then other challenging experiences in the full years working for UNIASSELVI [indiscernible] opportunity of seeing the 2 companies combined. So when we're talking about academic integration, to discuss this topic, that's a great pleasure for me. You might have seen the 80 projects, right, 22 projects for taking on our academic challenge. It really shows we understand the heart of our business. And again, let me talk about integration. I chose 4 [indiscernible] to discuss pillars of this process of integration and business combination. It starts with methodologies, then we will discuss our curricular, our technology strategies and our evaluation. So this will include all these elements. So I'll be talking to you, and then you will hear my colleagues. And at the end of the day, everyone will feel the need and the wish and desire to learn. That's why I'm going to talk about a focus on students. It's not just about education or teaching engineering or knowledge transfer. This is also about learning methodology, core methodologies. We are a company that studies how learning takes place. And this changes our relationship with our students. This is the Vitru combination. So this is our methodology or methodologies. And there's something here that is crucial. And this is our educational intent or identity. How has this been structured? We don't want this to be a random process. Students realize that every teacher and professor had their own methodology, and they did it their own way. So how can you make a company as large and great as ours to orchestrate that which is the architecture of learning, and how can this company convey and pass on a strategy that works with proven results and out learning outcomes. This is why we have adaptive and personalized learning. When you talk about educational intent in 2010 at UNIASSELVI, we want to do different things differently, not what the market usually does because before, we have this model of content repository. So what we did was we conceived and designed a learning trail. That's not just a hyperlink and going to the hyper tech. In other words, making -- we're helping students to find different ways rather than a single linear way of learning with a logic that adapts to their profiles with the support of multimedia and that's what we did and went deep into, in fact, at UNIASSELVI. Now at Unicesumar, we had educational practices that were really good. We did great in our strategy. And then we started a study what we were doing to find out what was right. And we found out that we really understood about learning cycles, and this was a great investigation journey. So we had a proprietary cycle that gave us an identity. Let me explain this. Many companies, many institutions, in fact, they outsource materials but we've made these materials. We hire professors. But we also train them with this educational design. So it's not just that they're writing content at random, everything will be orchestrated in this combination between their education, trails and everything we've learned in our learning cycle. So UNIASSELVI and Unicesumar is working together in Vitru's learning cycle with 7 phases. So you have a QR code that provides access to our materials to our coordinators and researchers. And this will be the base of our theory. So the first stage, as you know, and this might have happened to you before, right? There's no powerful -- there's no trigger that's more powerful when you want to learn and a good problem when you feel curious about something. If a student is curious, you cannot hold them. You know why gamification is so good, because gamification brought voluntary engagement. In other words, students wanted to -- when you plant the seed of curiosity, when teachers start by writing their materials, providing or proposing a problem, challenging students minds leading to cognitive conflict. This makes them curious. They're not learning because that will be part of their test, but because that makes a lot of sense to them and they want to learn, they are very curious about it. So in a video class, an on-campus class, whatever teachers or professors are always turning these triggers. As you read our book, you will see William mentioned this. So many professors say they have a pedagogical educational identity because they work in problem based learning or [indiscernible]. Well, we studied all these theories and then we defined and designed our educational strategy based on all of them. And there was additional learning at UNIASSELVI. We have a lot of maturity. We have mapped all our content and everything is being tagged for our IT systems to work better and also with adaptative feedback. So at Unicesumar, we started mapping professional skills. In other words, skills that are expected of graduates when students joined the job market from a particular course, they need a skill set, professional skill set. And this is why we learned about personalized feedback, too. And then we have our educational or education methodology identity that's Vitru's methodology. So we have professional skills. We have structuring skills and our learning content, our learning goals. So when all of these added together, they mean integrating methodologies in the IT system underpinning at all. So 1 part was really great and UNIASSELVI, the other part was great at Unicesumar. We're now by working together, by bringing these 2 together, we can provide the best learning process for our student -- students.. And then technology. So our greatest foundation is methodology, education methodologies. And we are not by model, in other words. We don't have distance education and on-campus or face-to-face education. We have the 2, but they're hybrid. We have fully distance education courses. We have on-campus or face-to-face courses. And we have hybrid courses. So we are multimodal. We have flexible modeling. In post -- in graduate courses, we have also different modes. In other words, we can see different or meet the needs of different student profiles in different areas. For example, healthcare is -- or well-being is different from engineering and that's different to business. And this was very clear. Each methodology needed to suit these different needs. So our first combination challenge was with Edtech. With UNIASSELVI, we had a digital notebook. At the time, I was working for Unicesumar, but UNIASSELVI they had an e-book builder. With this e-book builder, you could edit material best when they focus on review, then we had audio books and also printed in HTML material. Then at Unicesumar our Edtech had simulators -- virtual simulators, and I'll explain more about this later. So we have virtual simulators. We also have virtual laboratories. Edtech at Unicesumar, we have 11 recording studios to broadcast our content, we'll be visiting 1 of them. We have 11. They have a TV broadcast structure with live programs and Unicesumar -- what Unicesumar broadcast, more hours live a year than Rede Globo, the major TV station in Brazil. So -- and they have stable transmission and have students talking to professors and mediators in real time. And then by our podcasts and also educational material, printed and PDF. We wanted more productivity, wanted greater quality. As you said -- as I said, we are multimodal and we will respect all aspects. How can you provide they are synergistic and different at the same time? Well, we have developed an educational model that we call White Label, and I'll be discussing this later. We have -- you also hear me to talking about digitally native disciplined over our courses. So we'll have the best HTML experience. And our course materials are not only printed, we also have HTML version, PDF versions. In other words, we have a whole multiverse, right? And then we may have different brands, A, B, C, D, E, F. We may have different brands and making export that with graphic identity and educational identity. That's what we will provide to our students. This is why we now have a multimedia echo system for learning. As you will see, we have a greater demand. You see they're doing more. We do more, we have greater sizes. We're now providing technical courses, vocational education, undergraduate, postgraduate courses, business courses. So we have greater demand with new processes with better technology. So we can optimize our headcount. As you can also see our production capacity is made possible by -- for instance, what we will have 1 quarter that will be delivered at the beginning of this year, it was hired -- everything started in January 2022. So we took a whole year. This is the time you need to put up a course. We didn't want teachers writing things in 30 days, something at random copying from other sources from their thesis. They need guidance. We need creatorship. We need educational design of this year. In a year, we can optimize the whole process. So 44%, as you can see, there's some synergy, but 13% already White Label. And what does that mean? That means courses that are graphically plastic natively and they can meet any needs. And then synergy courses mean that they are adapted and adjusted. In other words, we don't need to hire a second author for the similar course. Now this is our Edtech, which was converted into a Bibliotech or a technical library. All this innovation is great, but it will be just okay if you have a single technical team. This is why we create Bibliotech. Bibliotech provides access to all professors, including on campus professors, including everything that we had at Unicesumar. And then can you adapt this material. We want tutors to show this to the UNIASSELVI students. And that means great. Just take a look at this. Bibliotech digital collection. Professional environment knowledge. Knowledge builders. Agility. A scenario with augmented reality. Meta Lab immersion. Digital microscopy, over 250 slides, simulators, games, augmented reality experience. Digital book, creative innovation, videos. Perhaps the [ Vitru XP ], where you study, your way. At [ Vitru XP ], education that transforms. Education that transforms based on proprietary technology respecting methodology, right? In other words, it's not technology defining what the institution, the school should do. It's another methodology that defines what technology should do and create and design for our students. I'm very proud of this. We have a unique collection of materials. Look at these figures. They just reinforce. We have over 2,400 courses -- course books. We have over 45,000 video classes with the complementary material to help students. This is material that goes beyond face-to-face classes. Then augmented reality and simulators. As you may have seen in video, we have Meta Lab, you may have wondered. What does that have to do with metaverse? Well, that's what we've been doing. We've been investigating augmented reality goggles in 360 also videos. And we know that this is not exactly very affordable at the moment, but we already know about the solutions we're adding this. And that's what we call our Meta Lab because it's already structured in such a way that we bring together all our experience in this great lab. It's like you go to this virtual lab learning space. And as a result, we have new courses. And we're talking about new learning experiences. So again, let me show you about natively digital courses. That's why we changed the rules of the game. That's how a White Label course will add a new dimension to our student experience. Let's take a look at the video. [Presentation]

Everyday we're going to do better. So you saw the us [ time leveling ]. But what is that -- that's a technical term, right, from academia. Everything to [indiscernible] leveling because you have 2 level to students to try and update the student on the knowledge. And just kind of boring because you have to review all the mathematics that you did you studied in high school. And then you try to level them, but they want to -- they don't want to go back to study math from high school that is just too boring. And then that's why we said, okay, our professors already know where the bottleneck is and what the knowledge that the students need. They need [indiscernible] knowledge. So that's why I have -- like a testing time, QR code to review, I don't know, set some rule -- some mathematical rule. We don't have to redo all mathematical just to review what do you need. So we know where the pain points are, that's why we give like a knowledge pill so that the student can keep doing he's or her undergraduate of course, without having to go back and reviewing all the content for mathematics, for example. So this is modeling. And you saw, we have digital data disciplines, we have HTML, but you saw there is response [indiscernible] accessibility, but behind the scenes, you see that you can highlight text, you can take notes, you can share it, you can ask questions and you can get your answers through the platform. Then you need a neater phase or an app to deliver this to the students. And for both brand, we used to have, I mean apps like Leo app, e Studeo app for Unicesumar. And these are resources for the students to use on their cell phone. That's why so many students have their app on their cellphone with an omnichannel educational delivery. And we also have courses 100% available in mobile mode, academic and administrative support. We need to have actions where students will interact with professors and tutors and have a seamless communication with the students through omnichannel for them to know all the information, for them to know what's the latest update. And as I said before, this is 100% available in mobile mode. Not only for support, but also for academic administrative support, academic support. It's all on the palm of your hand. We also have simulators, tests and learning objects in the app -- in the cell phone app. Okay. Let us talk now about curriculum restructuring at Vitru. Let's look at the challenge first. We have over 140 academic leaders, most we'll implement the curriculum, right? So what we did is we got every of the leaders involved from all the institutions, from all the courses, all modalities. And then together, we discussed how to update all the curriculum. Vitru was reviewed from end to end. All the courses have been refilled with our academic team to gain synergies and quality in terms of updating topics that had to change the name and all that. That's why we have a full portfolios. As you can see here in the middle that we talked about 343 undergraduate courses is just a lot. To review them all, we can do this only with an excellent team, the excellent team that we have. But let me just highlight 1 thing. It's 74 new courses. The Ministry of Education has a catalog of courses. The classic courses of administration, economics and all that. But since we are a university, we have the university autonomy and we can create new courses. So we have created study 34 new courses that were not available before. And there was a demand in the market. So that's why we have more and more students now. Let me give you 2 examples of the census for 2021. We created a course. We have competition now, but it's just to check out how many people signed up with us and signs up with the competition. Unicesumar almost 6 000 and UNIASSELVI almost 15,000 of Podology and for Forensics Science and Investigation. So that's why we could rethink our portfolio and offer experimental courses that are now part of the new catalog limited for education, such as Podology. It's not a problem that this is not recognized by the Ministry of Education because we have the autonomy as a university. With -- we talk about standardization. We have more synergies. We have reduced a number of subjects that had different names. And now we have standardized the names for the subjects, and we are hiring the best authors to deliver the best experience. It's not going to be spending a lot of money with the window objective. I'm going to spend with objective to improve the learning process. Now let's talk about assessment. Our students can take a diagnostic test to know if they have the basic knowledge and they can be approved or not approved. But then after that, what do we do? And then we looked at analytic. And now we're looking at the main skill to learn, which is logical thinking and interpretation. So we need the students to have logical thinking and interpretation. So the structuring learning skills we do with diagnostic test for entrance -- entrance test. So then we have -- we can track them during -- all through the journey until they finish the course with the capacity of learning throughout their lives. I mean, the students come to university and they don't know how to learn. They think that they need to memorize all the content to take the test. And then this is wrong. That is a mechanical learning, and this is not about experience. We have lowered all data. We know where we have the best outcome. Like Unicesumar, if our grid is the best to have to see what's the differential that we could apply in UNIASSELVI and this is how we feedback our educational process, not empiric. It's not that -- it's not guessing. We do a lot of data analysis. Okay. Thank you. Thank you for listening. I turn it over to Carlos.

Thank you. Okay. Now it's our break for coffee, right? 15 minutes, okay? So be back in a quarter to -- okay, for us to talk about structure -- and to talk about structure. Thank you. [Break]

Hi, everyone. Welcome back, everyone. We will now go with a deep dive in our 4 BUs. We have 4 business units, graduate courses, UNIASSELVI, Unicesumar undergraduate, right, and then graduate courses and then continuing education. So we have academics support, corporate operations, finance and IR, people and management and market. So I now invite our friend Ricardo Grima on stage of the UNIASSELVI distance education undergraduate courses.

Hello, everyone. I'm Ricardo Grima. Just my mom and my wife call me Ricardo, everyone else calls me Grima. Let me tell you about my experience. I have 16 years' experience in higher education. And I joined Vitru UNIASSELVI at the beginning of the year, and I've worked for them for 5 years before. I'm VP for UNIASSELVI and that's the distance education operation and the amazing team that is here with us today. So these are the figures. 388,000 students, 1,025 hubs throughout Brazil, net revenue of BRL 179 million. And then on the right-hand side, we can see our portfolio, in other words, the different areas where we provide courses. Our focus, of course, was on education, but then we expanded our portfolio, especially in healthcare, accounting for 25% of our student base. And in healthcare, healthcare -- our healthcare courses help increase our ticket because they usually have a higher ticket. And they're ready to work in this area because we need on-campus face-to-face classes, a hybrid model, in fact, how we can do a lot on this front. Pedro has already mentioned this part and he does a better job than I do because he's been there for longer about our tutors. But as Janes explained, tutors are crucial. They are a key element to our operation. They ensure quality content and our tutors are responsible -- they're really the pillar of delivering that quality content to our students. It will be pointless to have excellent content without delivering it properly to our students. And we can also be assured that students receive this. We will now show you how are class meetings take place. So we have a hybrid model and a mainstream model. So we have traditional classes and then what we call the flexible courses, Flex courses. That's a weekly meeting with a tutor, an online meeting with a tutor. And then they have also weekly face-to-face meetings. And after the pandemic, we -- of course, before the pandemic, we had an online meeting model, but now after the pandemic, we have many more students referring this online meeting model. And today, most students choose to have the online -- go to the online model rather than going to the on-campus hubs or courses. And this is why we needed to be better at controlling attendance. We have our partners, of course. These are -- they are eyes and ears. They ensure that classes start on time. Tutors are there -- be there and students also be there. And this, of course, when it started happening online, we lost these eyes and ears. So we needed to develop tools to be able to ensure that. First, we had quality education and number two, that everyone was there on time, that attendance was recorded and -- monitored and recorded. So we have a team now following this every day and we now have technology to monitor everything. So the apps that Janes all presented, they have some features. And these features were designed for students to access course materials for them to hold their meetings -- class meetings. And then -- and also for enrollment purposes. So in addition to getting access to content, tutors also gain because now tutors no longer spend time with roster or roll call. Now tutors just have the class, they press a button and students that are in the online or even in the on-campus meeting or class, they get that number and they enter that number and their attendance is confirmed or recorded. There's also geolocation to make sure those that are there are physically at the hub and our management team is in the background, making sure that everything is taking place in the right place. With online meetings, for instance, we have better monitoring tools. This is the Gioconda platform that's a proprietary system to follow our courses, and then we can go in real time, everything that we see taking place. So with this manual, they can have access to the information. And then this is a brief example to show you everything we can control. I mean there's a huge amount of information, there's a huge number of students. So we have on the left-hand side, we can see like in red, that each of these squares are a course taking place somewhere in Brazil. So we have information from the hub, time zone in the student information. And then the green ones are the ones that haven't started yet. So we have 304 -- sorry, 304 that haven't started. That's the left-hand side. And on the right-hand side, green courses have already started. And then we have a little balloon that -- the point of this is for the hub team to say if there was a problem or to record any problems or anything that needs support. So we also have a substitute tutor team. If anyone has any problems, these can stand in for whoever is missing. So we have -- everything is recorded and monitored and recorded to make sure everything takes place at the right time. We can also audit this. Before it was impossible to audit in an education meaning. And usually, in education companies, we can audit everything. So when a tutor closes the door -- what you see there is between courses. And we have teams doing quality assurance. They can go to classes, participate in the online meetings, making sure that everything was presented. All the learning material is being delivered the way it is designed. So we now can rest assured that everything is taking place the way we expected, the way we planned, and that makes us stand out. Now this change in behavior in our meetings -- class meetings also led to a change in the role of our tutors. All our tutors are trained to be close to student developing report, have a focus on career to be a reference in academic success and professional success, but we know that online experiences are more demanding. They demand a different type of behavior because people, of course, are separate from each other. So it's different, right? So like the interaction we had here, that's so different from being just online. We don't have a well-defined event, of course, that's totally in line. It's not that easy. So tutors are trained to make sure that we develop a good relationship with students. In addition to class time also out of class relations. Now Unicesumar has what they call the permanence or relationship project. So we are learning from this, and we're bringing this to UNIASSELVI. So all these behaviors are now standardized. There now part of the system and recorded. So we have tutors as the crucial pillar, the main pillar for our relationship students. And the role of tutors has been redesigned and now being called mentors. And this is the Student Success Center. So we changed the role of tutors that not mentors. We have a new hiring model. They no longer earn by the hour. They have a monthly salary. Before they could have 1 or 2 or 3 classes a week, now their employees in their -- there for us, the whole week without any salary difference. So a tutor's or mentor's salary that used to work just for a day, now they will provide hours to us like throughout the week. So they now may hold class meetings even. But then before that, they have -- one part of their time dedicated to student relationship, not only classes. So you have classes and meetings and then you have other time to relate to students. So we have someone working there so that we better understand student needs, and we want tutors to be much closer to students in a structured predefined planned way. So mentors are now closer to students, and they can receive students before classes take place. They can also improve engagement levels and also enrollment and new enrollments. They have a whole portfolio of clients, if you will, they need to take care of. If students were absent, for instance, they can talk to them and that was totally planned. Like they say, we missed you, did you have any problems? Do you need any help? Can we help you at all? So this mentor does this now. And they have all information on policies that are available to help students. If students are lost, if they lose their job, and they have any financial difficulty and they don't know who they can talk to this mentor or tutor is there. They also work in learning gaps. Some students, for example, had problems in questions 1, 3 and 4 others, 5, 8 and 9. So this mentor now can talk to the students and put up groups with personalized content to do remedial work and make, of course, that content more attractive. And again, take care of everything students need to do. They are closer to students, and they're making sure that students deliver what they need to deliver, that they get all the content they need, comply with their deadlines. And in an education company like ours, human relations are crucial for our success. And we're expecting to leverage the company's results and consolidate our market differentials. In this type of a closer relationship with students is so important, and it will make us so much greater. We now have some examples of what we're expecting to improve on. So we now have, of course, mandatory on-campus meetings for flexible courses and students will want to be there, of course. So the more present they are mentally, emotionally, they -- the more engaged they are, the lower the likelihood of them dropping out. So with better engaged students, they're closer to us. And when you have problems like the payments, many people choose sometimes not to pay. We know that real life is complicated as it is hard. But as we're very close to the students, we can help them out. And if we're reclose to them, they might choose us rather than other expenses. And so we want to have a very good relationship, very close relationship with students. So if you take that very seriously, not only -- and everything we learn from this in a very structured way and also a personalized education delivered to students that at least to state-of-the-art student company relationship. So we have so many people working together creating content, generating great experiences to other students. This will make a stand out in all about Brazil, throughout Brazil. That's Uniasselvi. I'll now invite my peer James, who's in charge of Unicesumar. He has a very similar role to mine at Uniasselvi.

[Interpreted] Hello, everyone. Right. Let's now discuss Unicesumar in the figures that you -- you're probably familiar with. We have almost 323,000 students with 1,088 open hubs throughout Brazil with a quarter net revenue of -- with over 100 courses on offer. Again, we should -- one highlight is, of course, health care courses which accounts for about 25% of our student base, again, also in distance education. So what does Unicesumar have. Pedro and William and [ gentlemen ] talked about this. What makes this stand out, what puts us on such [indiscernible] a have a student journey. That's very important. We, Unicesumar started as distance education, it was born as a distance education but no adaptation and that makes this stand out. We have been working really hard at the hub, we were born with hubs, and this is so important because this means local entrepreneurs, people who know their audience, their students, they know how this routine, the student life works in our company, in our school. That's why they're at the right places. They talk to the community the right way. This is why they have been expanding so much in their regions. These are the people that live in all these towns and they [indiscernible] understand their surroundings. I mean if they work in Campinas, they can go to neighboring towns and that has a partner that has this entrepreneurial perspective. If you were a franchisee, would you like to open a new franchise, of course. So that's why this is so important. And our partners also work on student retention. They have the crucial role in our student's journey, their academic performance. They look at students, they're really close to them. And the entire ecosystem is also important. So Unicesumar has a particular special department to manage our education hub. So we created something that can provide a support to this activities, ensuring that partners -- hub owners can grow and have sustainable conditions in their business. And of course, with the student at a core having poor communication, we've really been really close to students and looking at their realities. Now when you look at education, which is our core and that our methodology underpins it all. [ Genius ], I love when [ genius ] speaks, right? There's the whole construction behind it. And that means greater responsibility, making sure that everything is executed. How does this take place in real life, how do students experience this? What is part of their journey, their academic journey. This shows the entire process, all the phases, we'll be discussing these in particular, right? Talking about classes, how classes take place? And what are these maps? Then the general knowledge weeks, this was very common in on-campus meetings. These were wide-ranging meetings. We do those in distance education too, then the labs. And then scientific knowledge with course journals with a course materials as well and everything that it means. Also technical visits. Reality and our Ampliar initiative. Let me show you our model, our structured model. Number one, live classes. Everyone has live classes, of course, all institutions provide, deliver live classes. But in addition to this, we want a special interactive, weekly live class that is very close to students. Suppose the teacher at the top on Slide 1 is teaching [indiscernible]. At some point, we invite a group of students on screen to interact with that professor to ask questions for them to clarify all their problems. So -- but they need to be really safe there, and that's not that easy. That's impossible, of course, in a face-to-face class. So we also invite business professionals not only from our studios, but from any place in the world, we have professionals working in any of our environments. So say that we broadcast all live classes on a [indiscernible] station. And sometimes, we are in the prime time. So its hands on classes. We can show like it's dance class or they're dancing and then he can -- you're watching it and then he heads to do with home because I have to learn how to this. This is the dynamics of learning right there and then. And then we have a lot of engagement. We have like very well-equipped studios. We can actually have physical education activities, there anything that we do, actually. We can show everybody that we have this edge. And we have a real-time feedback where we are weighted by the student live during the class, first half the automatic feedback for the class. Okay. This is our map. [indiscernible] James. This is a manual of practical activities. This is where you have hands-on experience where the student has a problem and they have to solve that problem through the concept that they have learned. Cooking is a great example because they have to make food and then they have the family taste the new dish, but there are other courses where we can also have like hands-on activities. This is the use-case for how we do this in different cities. If you talk about like fashion and if you do shopping win -- you're working with shop windows, you can have the seat and go to store, in a mall, market to have hands-on experience in terms of shop windows. So they do practice in their reality and then they have to take a picture, they have to record it. They have to put this into context, handling for evaluation. So the idea is that we can evaluate the student. We have a national talent that we do every year. This year, we had 25 people sign up for it to win this award. This shows that this is really important. And this is where my wife did fashion design. Imagine, I never thought that my wife take those courses and they are making like shoes that not as to me, this is an assignment. And this is why we know that they are learning. What else can we show in terms of Reality? We have like immerse of experience that we can do in the hubs, so that we can have students go to companies, to plants and through the hub. They can go to the plant, for instance even though they are studying or they are taking distant education. So they do immerse in the professional environment. They have contact with the companies, they have learning in practice. And the other point that we should highlight is about reality. Because we do big brother reality again. So we have reality shows like fashion, cooking, reality shows that we do live in our office or online and like challenges, things that they like to [ ex student ] that we present at midnight for them to present the next day. And the idea is to develop capabilities. We have competitiveness or collectiveness. And we have some personalities that participate in our reality shows to give us some visibility. [ Dennis ] talked about how boring leveling classes are. Besides all the education fields that we have. We have another program called Ampliar to student to learn from their peers. So students like senior students will manage these classes to help other students learn collectively. This is so cool that they have avatars. They create an avatar for the class. They take the class together. This is real. This is a real class. Because we all learn from our class made, right? And for the lead student, this is an opportunity for them to become a great professional. And then some courses are hybrid. So they have physical labs. Last night, we're talking about the quality of engineering. Can we do engineering without having physical labs. We can't. That's why we need labs. In most of our hubs, we have a physical lab in place. They have technology. They have -- very well equipped. They -- even though it's in the small space, we can have a [ 30 ] square meter room to have all the equipment. So besides practice, all the scores and results are available on their on their app on their cell phone. We also have field classes. But besides that, we have virtual labs. I love augmented reality to have in the books actually because you can see 3D images for you to understand. A building, for instance, the architecture of a building, and this is a technology that we can zoom in and zoom out for you to understand better things. We also have greater geographical beats. There's one class where you can go to the Louvre in Paris to visit the museum in virtually and this is available to all of our students. And these are resources that make the difference but we still need mediators. We still need our professors, our mediators that are based here in the main office that contribute to this journey. I remember to talk about proximity, understand the learning process. This is where the mediator comes into play. Not only through the class but after the class and before the class, so they have a mediator to provide support to those students and tools are now more sophisticated. We can send text, we can send audio to student. I remember that my wife said to [ Neil ] in [indiscernible] and the latter was her mediator was helping her in her learning journey. This is important to create the tie with the student and make sure that we can deliver to student a differentiated experience to develop skills with discipline, with self knowledge to create something better. Now looking at the opportunities. Business combination have provided us with a great growth opportunity with best practices. So we are sharing best practice between the two brands. I mean you guys saw the studio. You have the learning journey that we had with Unicesumar. But now, we have the intake of students. So in the app, we're going to have the possibility of expanding the number of students that we reach. Then we have expertise to fine through this in the second half of the year. So when I say we did a lot in the first half of the year. And we didn't have the same level for the second half of the year. But now with the new strategies, we had a great outcome. So we -- the potential to find new students throughout the year. And -- but we're also asked about ticket. The average ticket and the average ticket, it's one of the metrics that we are using for management. So as you can see, for 2023, Unicesumar, before we had only three tables, and we had hub autonomy before. We conduct the study considering all the strategies, I mean we looked at the different states, different regions and put together a new pricing formula. So -- we have come up with 10 pricing -- price lists. So by doing this, we can have a better hub control. So our pricing is to find according to the hub considering all the reality and challenges that they have locally so that we can grow our average ticket. The other thing that we have is Transversal subjects to add more knowledge to our students. And these subjects are going to be introduced from the fourth semester onwards so that we can have another opportunity to improve our average ticket. This is about distance learning at Unicesumar. If you never did any distance learning, you can enroll with us for us to live a great experience with us. Thank you for your time.

Good morning. My name is Érico Ribeiro. I'm the VP for face-to-face classes. This [indiscernible] part to assist the campus of our university, which is a different one. And I say this because we have -- I mean, you're going to have the opportunity to -- you see it when you do the tour because it is important for you to realize that we have like a sports center, recreational area, and that's why we call focus on students. So let me ask you this, how many of you today came to this campus and remember the best times of our life in university? And I'm sure that those who couldn't remember, after you tour the campus, you probably -- more memories will come back to you. I think the elements that you see in the -- when you tour the campus, you will see that this is something we have in the different [ camp ] in the world, but we have adapted to our value proposition. We have 21,300 students. And if you look at our sales in the third quarter of 2022 was almost 100 million, which is 24% of the income for Vitru. We have 19 venues, venues. We Have one university, 13 colleges which gives us a lot of autonomy to create new courses. And I have here the number of courses that we have in this different 19 educational institutions because if you think about 260 courses, this gives us the possibility to make it 3x bigger. Today, in our university, we have 40 offers. If you think of 40 offers times 19, you get to the number. And then that would mean that we can apply this in the other venues. This is what we're doing now. I like this because you can see that today, our in-person courses are -- for health care courses is 47%. The vocation of -- Unicesumar is for health care courses and Uniasselvi, it's more law courses and that's how we're trying to cross-sell courses between the two brands. Because of all the things, you have to expand the health courses in yourself to. Okay. Four pictures of the campaign. The first picture is the one in [ Burkina ]. This is Uniasselvi. And at the bottom is Unicesumar for this one here in [indiscernible]. So medical education, Maringá, we have the largest course in the South region and one of the largest medical schools in Brazil. But into 2022, we had almost 1,800 students, these numbers are from the third quarter of 2022, and we're really proud to have -- to be #5 in terms of medical school quality. And this is good because this is the grade that our students could get in this test. So we are #5 in Brazil. 348 medical student slots. 50 in Corumbá and the rest here. Is a high demand with a high number of student application per slot. It's impressive actually, for each two enrollments, we have at least one that will do the course. And usually, when they enroll in a private university, they also try public university. So it's really important for us to see -- for us to be able to provide them with the same experience they would have in Corumbá. This is a big challenge for us because it's a big scale. But I think that the challenge is for you have like residencies, you have like all the partnerships and hospitals. In this region is really promising because we can have great capillarity for you to find the lots from our students. So for you guys have an idea, next week, we're going to have the residency test and we have over 10 slots for residency for our students. Then for quality, these are -- this is our score. Now our students slots. This will be the first year in Maringá that we will use our 298 student slots. That's year three. And after the second half this year or semester will start the fourth year of our course in Corumbá. That's our baby right, that's been in development. And then we will have 1,988 slots, and then we can go to 2,088 student slots in 2025. And we're also -- of course, we can also add to the number of student slots. Our cash flow is really resilient because we're getting really a lot of students and our average ticket is higher than BRL 10,000. I really want you to enjoy this visit. And I want to make -- it's clear that our students at from semester one. They use all our structure, including our simulating simulators and labs. Thank you.

Good morning, everyone. These are our final slides this morning before we start our tour. VP in Continuing Education. I'm Tiago Stachon. And I want to be absolutely sure that I feel great after these three VPs because we're kind of drinking from the same source, if you will, they all -- the [ Janes ] and James and Guilherme and Érico. What does that mean? It means that in technical course, someone doing a technical course has the same experience they can enjoy the same thing as an undergrad engineering lab. And this is unprecedented. That's great differential. For all types of laboratories, virtual [indiscernible] laboratory. So our continuing education courses at Vitru with the two companies I managed. Students may have a very special difference. And what is continuing education in each of these companies and what is continuing education at Vitru. What is continuing education, everything that is not undergraduate course. So after you finish your graduation and after you can have a post-college MBA or even vocational courses and technical courses. And even during graduation, you may have also three courses. Like, for example, [ Tiago Nigro ] or [ Natalia Query ] who have been -- or other coaches you find -- so this is a culture that is called lifelong learning or even skilling that means reinventing yourself on your journey in this life. So we have 51,000 students at over 200 graduate course, 60 technical or vocational courses. And why is this a great opportunity. Well, we have two huge markets we address. Two very nutritious pockets, if you will. Now on the left-hand side, 1.4 million graduates each year in our undergraduate courses. So that means 1.4 million opportunity is a graduate or post graduate courses and MBA courses -- our -- we have three types of students, those that finish, they're undergraduate, of course, and they want to do a graduate school later, Those that will work for two years and then do some additional continuing education. Those that have 20 years' experience, and they need to go back to recycle. So when you look at this market, we can at least consider a 10-year window of stock we can work on. So there are at least three. When you consider these three profiles. Now the other market we are addressing, and that's about vocational training technical courses that graduate in high school. That's 7.7 million high school graduates who are prepared to join the job market. Again, that's a huge market. We look at the high-scale players. I don't see any other player that is as mature as our undergraduate structure. So that's a great road for growth for the Vitru. That's why we have a VP that focuses on this alone. And also, I also wanted to show you some actions conducted by the Ministry of Education that will change the way we see continuing education. So we have, of course, a market penetration strategy and then increased LTV, better CACs, student-based loyalty. That's all in undergraduate courses. So a 3-year technical course means three years, right? But then if we consider also vocation of training and then technical courses and then upselling for undergraduate courses that might involve at least five years in the school. And then if they do a graduate degree, that's an additional at least 1.5 years. So that's when you go like linearly. Now as the Ministry of Education knows, we need qualified or skilled laborers then the Ministry of Education decided to verticalize it, and we belong to the committee of verticalization. So this pencil, you can see on screen in continuous as you can see, it may be concurrent. In other words, as you do one course, you have a curriculum that started here when you were young people doing vocational education, but they're already seen doing graduate degree. So those that finished vocational or technical courses. For example, in accounting, and you want to study accounting sciences, do you have your course? Might, right? And then they continue in the school as our part of our student base. So the Ministry of Education sees the importance of this. And we were also wanting to tap into this great opportunity. And finally, among many novelties. We have two very important things. We are already working on, number one, launching the so-called hybrid technical courses again, and we have physical and virtual labs and simulators and so these are [indiscernible] technical courses that also take place on campus. They take at least one month on-campus course or meeting. So we're just waiting for the Ministry of Education to approve this. And that's a huge market, that's waiting for us. And number two, another core strategy of ours. That means adding value to our products. As you may have seen, there are other players that have a graduate course or an MBA that have just one class with a great exponent like can now work [indiscernible]. They just teach one class, and they say this is the [indiscernible] post- or graduate course, but that's not just that -- maybe it's just two lectures or just on the keynote lecture and that's all. Now this is different. This is a so-called signature graduate course, which is signed, if you will, signature of course, by these highly reputable professionals like, for example, our post or graduate course in management of the tomorrow. So it should cost in about BRL 2,000 a month, but this can be now provided for -- sorry, BRL 450 only because it's online. And not in Sao Paulo or Rio de Janeiro in the great centers, but it is provided everywhere. So that's how we add value to this and at the same time, have a much better price. These are the major actions we've been taking in continuing education. I wanted to share with you, and I hope we can talk about this as we work around campus and then [ Carlos ] please come back on stage.

Thank you, Mr. Stachon. Now in closing, let's have our takeaway messages, our reminders, takeaway reminders. So Vitru is the leader in distance education in Brazil. We have pillars that make us stand out. Number one, a focus on digital education; number two, recognized quality that was made clear and proven; then a culture gravitating around students. So this is not created overnight. Vitru was designed -- it was born, it was nursed with this culture and then the integration of both brands, tapping into opportunities, significant opportunities for growth for synergy to already and prepared to serve this wave of growth throughout Brazil and to continue disrupting the higher education market in Brazil. Now let's have our Q&A session. So everyone is invited on stage, everyone, you can ask your questions. I know we talked yesterday informally. No tough questions, please. Just tough questions, just for William right? And then when we finish our Q&A session, we will have our tour on campus.

Hello, good morning. Good morning. So we know that Unicesumar has a student profile that's complementary to Uniasselvi. So how do you think Unicesumar changes your sales and marketing strategy in the long run? And how does Unicesumar changes your default line from now on.

Okay. I can start and then Pedro and Carlos can add to this. Our major strategy in the long run is maybe not changing. This is important to stress. No words, our idea is to keep both models the way they are, they will remain complementary and different. Of course, there's lots of room for synergies, especially competitive intelligence in the market. We have real information on all our units, but then it in addition to everything we can gain from this business combination well, both models will be kept different. And then we will have competitive intelligence as we have two companies working separate in a way we can learn a lot from this. And as James mentioned, this already happened in the second semester of this year. We're learning a lot from this. So Unicesumar didn't have any strategy of speeding up. But then as we learned about Uniasselvi's intake strategy, without changing much, we could change our strategy and improve our results. Well, as you were saying, we have pillars and experiences that nicely can contribute to Unicesumar and vice versa. For instance, student retention and engagement, for instance. So for example, for freshman, you can sell this experience, commercial experience is with a resilient ticket that this has been taken to Unicesumar has an onboarding process, the term students, as James mentioned before, and these are being tested out and taken to Uniasselvi. So it's one, feeding the other and vice versa. Diagnosis, onboarding processes, everything that is done to engage students fast. It's very important to drop out. They do couple of months. So if you break this dropout cycle and bring students in with more efficient, faster engagement, then you have these great results. That's default last strong half. Okay? Thank you.

I have three questions. And we're to talk about practice here, right? Number one, reputation. You've mentioned the NPS, but that's student satisfaction. It's your reputation and that we know this is long term. Now how have you been working on this? How have you also been trying to ensure graduate and undergraduate quality to make sure reputation remains strong. And how about student attention, as your indicator show, you've been doing great. But how about this model, when you try to go to larger cities like in Brazil, Southeast, would you think your model will change? Question number three, that's about economic pressure. As Brazil is expected to go harder, tougher catches, how are you planning to proceed, if you have, for example, public funding. What do you think you could direct this to distance education rather than face-to-face education?

Okay. Let me start. Our delivery is really of a quality education. So our graduate -- graduates are ready for the market. So what we do today, we follow the evolution of our students as they go through the courses along the courses. So every semester, we do surveys with our students, and we ask them where they're working, how much they're earning, if they changed areas, this is what we do. At the beginning -- during the course and after they leave the course but that's harder and that's different from, of course, when they're starting with us. It's not that easy. When they're studying with us, they do it. It's -- they get these surveys and they answer them all. So when we do all these surveys, all the searching, we see evolution, a salary increased throughout the course when they joined the course they start with a salary, but when they leave, their salaries are much higher. It's important to understand the profile of our students. When they joined the school, when they enroll, they already have a job, but they're trying to develop. If they work at the till, for instance, they will become a manager. If they're office clerk, they'll become -- will be promoted to the manager of the store, for instance. So that's why we see this increase in salaries. So when students leave, they have difficulty, not at all. As they do the course as they belong, they will be promoted and get better jobs. As you have seen on our slides, we provide feedback on our student skills, and we are also keeping an eye on market needs. So we know what our students need and we try to communicate this in any bid on our software, we provide employability. The curricular also shows the latency, if there are skills for specific job vacancies, no matter what courses, do they might have the skills that are needed for particular jobs like an engineer that starting their professional career and sitting with us, they have all the analytic skills or market skills that are needed, they may do other jobs although they're not necessarily dual engineering. They might do other things, too. And these are the great things that are taking place here. And then we have over 20,000 agreements with companies so that you may have great professional experiences, not only commercial partnership with these companies, but also in professional environments, and this is in that allows, we can have practices and activities evaluation internships in companies. What we're going to do? We want to bring the university to companies. So students can experience life in these companies and then will get closer to their professional dreams. That's what we do. Talk about the second question about bigger cities. I was concerned in the past I mean we had to understand the behavior of bigger cities. We knew how we operated in smaller cities in the south of the country. And so we also were concerned about like starting our business in bigger cities such as [indiscernible], Sao Paulo [indiscernible]. This hasn't changed [ Phase 3 ] for us. This is actually Phase 3 because we already have hubs in big capitals where we have more students actually. So the strategy doesn't change at all. We still keep our focus on students, and this works for smaller towns and for bigger cities, too. There's I think the last question about the change in the administration. I mean let me talk about oscillation first in the market saying that the market is more difficult because we have more unemployment. I mean if you think about education, we've always been protected whenever we have more unemployment because those who are working, they try to reskill themselves, to upskill themselves. So it's actually a protection. If there's more a recession, you have more unemployment, we see people who have a job, but they try to learn to upskill so that they can have a competitive edge in the market. Whenever -- if everybody is employed and they have more people actually working, the big that can pay for education. We never mentioned that we have. We understand that [indiscernible] is going to be available again. But today, we would be for distance learning meaning we can -- it's not possible to do it without considering the distance learning. This would be a mistake actually, and I don't think this would happen. So all the information that we have about this administration that we're going to have student loans also for distance learner. What's good about hybrid is that we can have questions from people online. So we have a question from Javier and Javier is asking about hub expansion if they could have an impact on the current margins? And what's the potential of margin growth once we have more hubs? I mean hub expansion that we're going to have now will be -- will actually speed up our growth. But whenever you open a new hub, you dilute your margin. I mean we saw this happen in the past. But because of the size we have today, it's not such a big impact. Because usually, we open a new hub, you actually get to the breakeven point only in the second year. The first year is more of investment. But because of our volume today and how important the hubs are, 500 this year is not that many if you think about the hubs that we already have. So the impact on margins is not going to be big today, okay? So in the long run we can have a great return on investment. And we have a return investment of over 30%. For Vitru, we also have a good return on investment and sometimes, we have to change partners to solve a problem, but if we don't solve a problem, we can just start working with a partner -- but this is doesn't happen because the partner will make money, we make money. So it's pretty much a win-win situation. Let me just add something to it. But that's why it's good to have two different models because for Unicesumar, we don't want to do this quickly. So we keep our margins, of course. And we have a return on investment anyway.

I have two questions. First question is about the -- this is gaining growth because what we have seen in the past years, especially through the pandemic. This has grown a lot, and we've grown with the interest, but also had gained the market share. But then after 2021, the growth wasn't as great. So growth is marginal. So what I want to understand is do you think you will keep the same level of growth or pace of growth considering not only what you can provide in terms of implicit growth for distance learning, but also maybe -- I don't know, maybe you can also invest in market share. Do you think you're going to keep growing? The second question is about pricing. I mean -- you guys talked about it actually that one of the positive points is that on already has better pricing dynamics and there's a better resilience when it comes to the average ticket. And you expect this to be applied as well to wire down the line. I just want to understand how this process has played out. Can you talk about like a timetable like time frame. When do you think this will even out to be both at the same level? I'm going to start with the second question. You guys can correct me if I'm wrong, okay? When you give spoilers. So this is something we are still building. But what I can tell you is according to the first half of this year, you will -- I mean for the price you're going to see some gains in the average ticket. Of course, we have a strategy from UNIASSELVI. But this I mean, this has to do with the Unicesumar growth policy before we had our business combination. May be 2022, which is the latest data where we see a small drop, but the growth is beyond what the market had. In 2022, we had 20%, and our growth was twice as that. So this is something we created in 2021, but the growth was much greater than what we had, although we had a little drop in our average ticket. But the idea now, especially with all VPs and James who's doing this is that, yes, we'll deliver results in 2023, not only in growth, but also in average ticket. Okay. Talking about the growth. Both brands have only, I don't know, 1,000 hubs. And this is what we have to get to increase each brand number of hubs. So we have a lot of potential to grow. Now we're going to start in the region where we would have that many students yet, enroll the students, but we're going to the place where we have more potential. Carlos has shown that we have already expanded in this region. So yes, we see that will be a growth because we got to increase our geographical presence. Of course, digital learning is going to grow even though it's not going to grow as much as it did to do into pandemic. But if you compare to Latin America, we have a lot of potential. So we're going to expand geographically, we are going to have more distance learning opportunity. So we're going to grow. That's for sure. But then if you think of after the pandemic, I mean, this is the first year that we're going to be doing without pandemic. So in-person classes will increase in 2023. That's for sure. So the baseline is different. As for distance education we have a different baseline because we've grown a lot during the pandemic. But now it's going to be less because of the baseline, but the trend, the macro trends are that we're going to have more digital options, and this will increase demand. Today, we have 7 million enrolled students, and this is on the market for university students in Brazil. So if you have more penetration, I'm going to have lower cost, I'm going have more options, and then the age group that's growing more when it comes to our enrolled students is between 17 to 21 years of age. It's not the greatest number, it's the 1 that has more growth? In the audience for distance learning because this is what we placed to those evening courses, and we are gaining a lot of market share. So basically, if our market would grow only 10% a year, which is not the reality, in 10 years, 3.5 million students who have interest in distance learning will become 9 million students. And this is our dream market. So this is the answer for our long-term goal, [indiscernible] you want to ask another question? So we can -- just 1 more question then we'll tour the campus.

My name is [indiscernible]. I have to have 2 questions. One is about the competitive scenario. Some of your peers said that now we have a consensus when it comes to structural changes in the market, maybe we can't talk about it yet because it's too early in the process. And the second question is about leveraging. The financial situation is a little bit better as we put off some of the payments. But if you think of financial leverage, what's your saying about it? Even though it doesn't make sense for us to have these conversations again, how do you see the medicine business and your strategy in the medium and long term?

I'm going to start with the competitive scenario. The market has always been competitive. It's still competitive. We've never started this -- never started a price war. We are now up to a point -- a price point, the student does not value the course anymore. This is what we understand. But what we have seen is that the other institutions are more careful. And we are also more careful, but we have seen that. I think the worst year was 2018. This was the worst year when it comes to competitiveness and aggressiveness -- price aggressiveness because they have -- we had the newcomers that they thought that with the low price, they could gain market share, but these interests are not operating anymore, or they're not our competition anymore and the market is a little bit more comfortable. The competition is out there, but they're more rationale and this is really interesting for the entire industry. Talking about leverage, like financial leverage. I mean, we actually had a debt that was high. So we started an organized process to bring new money, bringing new money with the new partner. So we were able to reduce leveraging, and so this is not a concern today. In fact it is still high because of the interest rate that we have today in Brazil. So we're not going to just wait and see to reduce leverage. This is not what we're going to do in the real world. So we're going to make sure that we can reduce our leveraging. This is now for medicine because medicine is a value-added business for the brand. To date, we don't have any process, or sales process for medicine, but our focus is on distance education. We had actually more pressure in the past around leverage, financial leverage. Today, we don't have any pressures. Today, we don't have anything around that today as a concern.

Okay. Vinicius from [indiscernible]. I'm going to ask just 1 question so that we can take our tour. Talking about the integration, I want to know how you guys manage the hubs because they have 2 different models. So I want to understand what's the cross expansion strategy? How can you create graph so that in the regions where there is some kind of overlapping, you can maximize the number of enrolled students, profitability and quality so that there is no spillover between -- from one brand to the other, and there's no internal negative competition.

I'm going to go -- I'll go first. It's not only about having a partner for both brands. I think for all the hubs, this is true. We have a lot of intelligence to position the brands in and the implications. So we're learning. We have been learning. But what I -- well, we told our partners is this what we took and tell you, too. And then we're talking about 2 different markets, 2 different business models, 2 different process, 2 different VPs, and this is the way it is going to be in the future. And we have to make sure that we adjust the pricing, communication, and this is not only for the places where we have the 2 brands at the same time, but across the board, we do this so that both brands can benefit. We don't privilege any of the brands because we have investors interested in both of them and everybody together to have the best of the municipality for the 2 brands. But we've got to be careful because the partner can't feel that they have been harmed somehow because we're giving privilege to 1 of the brands, and we've been successful in doing this. We used to be competitors, but we're down like in the same city. And this is what our partners said. So Pedro said that we need to be careful. So this is 1 word. The other word is trust. We should trust them and everything that -- and they should trust us. So we're on the same market, and respect each other. As competitors and now with a strategy and data and management, this will strengthen our brand even more, and that was a very positive response that we got. So we can open UNIASSELVI or Unicesumar hubs. So that's it. There's more. There's our premise. And this is a question that one of our partners ask us about that. We are convinced that both companies have very clear robust position, so [indiscernible] us to others. This is UNIASSELVI then why do they have different business models, and that's totally different. So they don't mix the ease to up and that has helped us also achieve our goals better.

[ Matthias Morinda ]. I have a question. And that's about the market and also about competition and position. So UNIASSELVI's behavior has been very clear. You have a different perspective on tutors and now mentor. So part of your competitive advantage was around this professional and the other didn't have or at least it was not that relevant, at least. It's not easy to understand, right? This -- what has been the change? And what's the competitive advantage of Unicesumar? Because even if you had pressure in the last 3 years, I mean, going from face-to-face education to distance education, do you have -- what prices in the market and so on and so forth. So Unicesumar grew with a ticket and a market share that was relevant, but we cannot find a difference in format that is significant. You talk about content quality, of course. But I need to understand the differential not just the price differential or much more aggressive marketing, but what Unicesumar has done to lead to a different approach, even student retention numbers, which I'm really impressed. So it's not clear. Can you expand on this?

Well, I'll start, and William can add to that later. Okay. Content is very clear. Everything we've built our education methodology. It was very clear now. We need to set the hub on this journey. That's a point that makes us really increase our intake -- student intake and Unicesumar, our hub, our part of our academic delivery of educational delivery. As a result, we have well organized well structured hubs. There's a feeling of belonging. Students feel they belong to the school. And also, the experience that Unicesumar has gained that other brands don't have and that has a huge impact. And the experience that we gained over the last few years in terms of relationship and how this relationship works and how it can be activated. So there are 3 pillars learning and relationships, then content quality and then the hub as part of our educational delivery of our teaching product. So that's our differential. And I'd also like to mention that case of our department is permanence. Everyone works or focuses on student retention, it's is very -- very reactive, but we do preventive action. That's why we call it student permanence. We do everything we can to ensure that students remain with a school. So Unicesumar started, in 2019, we had 5% retention with regard to the previous year. So by following up our students journeys that made a huge difference. And again, the 3 pillars that Pedro mentioned, the 3 pillars leads to better scores in market evaluation because we have a better satisfaction level. And as lower CAC, lower [indiscernible] that has, of course, to our better leverage numbers in the last 5 years. Thank you, everyone. I think this was a very intense morning with lots and lots of information. So I now invite everyone who is here at [indiscernible] to have our campus tour. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]