Slide 1: 2Q23 Earnings Conference Call
2Q23 Earnings Conference Call August, 10, 2023
Slide 2: Disclaimer
Disclaimer The material that follows is a presentation of general information about Cogna Educação S.A. (“Cogna”). The information herein is not intended to be extensive, and it should not be considered by potential investors as a recommendation. This presentation is strictly confidential and may no
Slide 3: Message from CEO
Message from CEO Net Revenue reached R$ 1,842.9 million in the Cogna’s 2Q23 result represents the ninth consecutive Net Revenue grows 21.7% in the 2023 1st semester of 2023, a 13.1% growth vs. last quarter of strong Recurrent EBITDA growth and strong Cycle vs. 2022 and represents 82.3% of the year;
Slide 4: Kroton - Higher Education
Kroton Higher Education
Slide 5: Student base and Dropout
Student base and Dropout Number of Undergraduate students (No. in Thousands) 983 929 5.8% +7.0% High On-site Attendance 361 (HOA) 337 Kroton’s undergraduate student base continues to grow, reaching the 8th +5.1% Low On-site Attendance consecutive quarter of growth. 592 622 (LOA) 2Q22 2Q23 Undergradu
Slide 6: Average Ticket (AT)
Average Ticket (AT) Strategy to maximize revenue by taking advantage of the low variable cost offered by digitalization of the courses and scale of our operation. Ticket (P) Quantity (Q)¹ Variable Cost Freshman x Freshman Revenue² (R) - (digitalization) = Profitability = High On-Site Attendance Reve
Slide 7: Net Revenue
Net Revenue Net Revenue (R$ million) Kroton's Net Revenue grew 11.8% in 2Q23 over Quarter Semester 2Q22. In the semester, the Net Revenue +13.1 % achieves R$ 1,842.9 million, with an 13.1% growth versus 1H22. +11.8 % Fourth consecutive quarter of double-digit revenue growth, reinforcing the improvem
Slide 8: Costs and Expenses
Costs and Expenses NOR % 2Q22 2Q23 D Costs and Expenses¹ - Quarter (R$ million) Total Costs 22.0% 18.9% - 3.1pp +11.6% 663.6 Corporate expenses 3.5% 3.2% - 0.3pp 594.8 Operating expenses 18.4% 21.8% + 3.4pp Selling and Marketing expenses 7.1% 8.9% +1.8pp PDA 13.2% 11.2% -2.0pp Total C&E 64.2% 64.0%
Slide 9: Average Collection Period (ACP) and Coverage Ratio (CR)
Averange Collection Period (ACP) and Coverage Ratio (CR) Averange Collection Period (ACP) (Out of Pocket) 76 -23 days Reduction of 7 days in the Average Collection 62 - 7 days Period (ACP) comparing 2Q23 to 2Q22, reflecting 60 55 54 53 continued improvement in the student profile 48 48 45 and adopti
Slide 10: Recurring EBITDA
Recurring EBTIDA Recurring EBTIDA and EBITDA Margin – Quarter (R$ million) Recurring EBITDA reached R$ 396.4 million in 2Q23, an increase of 9.7%. For the half year, recurring EBITDA grew by 15.1%. EBITDA margins for both the quarter and the six months were in line with +9.7% last year due to: i. 3.
Slide 11: Productivity Increase by Campuses
Productivity Increase by Campuses Productivity by Kroton Campus Number of students High On-Site Attendance (HOA) by Campus (#) At the end of 2Q23 we had 112 campi, the rationalization of Campuses, started in 2020, +21.9% enabling a 21.9% increase in the number of HOA/Kroton Campus students Kroton; O
Slide 12: KrotonMed
KrotonMed Net Revenue (R$ million) The 27.7% growth in Net Revenue contributed to a 50.0% higher Recurring EBITDA in 2Q23. Quarter Semester +31.2 % The good results are the result of improvements implemented such as: +27.7% (i) Maturation of medicine course vacancies, mainly in Bacabal, Eunápolis an
Slide 13: Vasta - K-12 Education
Vasta K-12 Education
Slide 14: Net Revenue
Net Revenue Net Revenue – Quarter (R$ million) In the quarter, Net Revenue is 43.0% higher +43.0% than 2Q22 totaling R$ 271.4 million due to: (i) Improvement of commercial performance, with a 65.2% growth in complementary solutions. Net Revenue – Cycle (ii) First B2G Contract: sale of educational (R
Slide 15: Net Revenue
Net Revenue Net Revenue - Subscription (R$ million) +18.5% -7.8% PAR Subscription Revenue grew 18.5% between 1,012.3 2022 and 2023 Cycles. 854.4 +44.9% Complementary Solutions Subscription share totaling 85.8% of total Net Z +18.6% Core Content Revenue, reaching 82.3% of ACV for 2023 cycle. Net Reve
Slide 16: B2G: Business to Government
B2G: Business to Government MARKET SIZE GO TO MARKET Market Size ▪ Allocation of managerial resources (Business Director) K-12 Public sector in Brazil comprises (R$ billions) ▪ Target are States and Large Cities; more than 33 million students or 5X the Brazilian K-12 Private students. ▪ Creation an
Slide 17: Costs and Expenses
Costs and Expenses % NOR Cycle 2022 Cycle 2023 D Costs and Expenses¹ - Cycle (R$ million) Total Costs 36.5% 38.8% +2.3p.p +20.9% Corporate Expenses 2.9% 2.7% -0.2p.p 819.3 Operational 677.5 Expenses 13.7% 10.5% -3.2p.p Selling and Marketing expenses 14.5% 14.1% -0.4p.p PDA 2.4% 3.4% +1.0p.p Total de
Slide 18: Recurring EBITDA
Recurring EBITDA Recurring EBITDA and EBITDA Margin – Quarter (R$ million) Recurring EBITDA grew 971.7% in 2Q23, reflecting the good performance of complementary +971.7% products and the new avenue growth for B2G; In the comparison between cycles, the Recurring EBITDA grew 21.9%, reaching R$ 354.9 m
Slide 19: Saber
Saber PNLD, Red Balloon, SETs e Other Businesses
Slide 20: Financial Highlights
Financial Highlights Net Revenue (R$ million) Quarter Semester +52.5% Saber’s Net Revenue grew 103.0% in 2Q23, due to the good performance of all Saber operations: NBTP, +103.0% Languages and Other Businesses, Saber experienced a significant 42.7% growth in Recurring EBITDA during 1H23, attributable
Slide 21: Cogna
Cogna
Slide 22: Net Revenue and Recurring EBITDA
Net Revenue e Recurring EBITDA Net Revenue (R$ million) Quarter Semester +16.5% +20.0% Growth of 20.0% in Net Revenue in 2Q23, driven by growth in the three business units; Recurring EBITDA and EBITDA Margin (R$ million) Growth of 20.0% in Recurring EBITDA in 2Q23 represents the ninth consecutive Qu
Slide 23: Operating Cash Generation (OCG) after Capex
Operating Cash Generation (OCG) after Capex Quarter (R$ million) Post-Capex Operating Cash Generation (OCG) grew 51.9% in 2Q23, reaching R$ 170.9 million; +51.9% The conversion of Recurring EBITDA into OCG is 40.1% in 2Q23, accounting for a growth of 8.4 p.p. versus 2Q22; Semester (R$ million) This
Slide 24: Net Profit
Net Profit Adjusted Net Profit and Adjusted Net Margin Adjusted Net Profit grew 588.3% in the semester, (R$ million) reaching R$ 128.7 million, with an increase of 3.9 pp in the Adjusted Net Margin. This result was achieved based on the +588.3% combination of: (i) 18.4% increase in Operating Result;
Slide 25: Leverage and Indebtedness
Leverage and Indebtedness The Leverage indicator reduced to 1.98x, 3.00x reaching the lowest level since 4Q20, as a result of the consistent growth of the 2.09x 2.15x 2,10x Company’s EBITDA and cash generation; 2.03x 1.98x 3,228 3,334 3,317 3,363 3,143 Net Debt increased 1.4% compared to 2Q22, 1,503
Slide 26: Cash Position and Indebtedness
Cash Position and Indebtedness Breakdown of Net Debt In April 2023, we secured subsidized financing of R$ (R$ million) 85.0 million from FINEP. This financing is directed towards innovation projects, with an average cost of 4,738 218 4,956 1,594 approximately 63% of the CDI. 3,363 In August 2023, in
Slide 27: Final Considerations
Final Considerations The 8th consecutive period of growing The Gross Margin Expansion Rationalization of Campi conducted revenue and volume, together with a demonstrates operational leverage and effectively, increasing efficiency and controlled dropout, supports growth in improvement in PDA, indicat
Slide 28: IR Contact
IR Contact: dri@cogna.com.br https://ri.cogna.com.br/ 28