Yduqs Reports Strong Cash Generation and Net Profit Expansion in 2023
Yduqs' 2023 results, released to the market on March 14, showcase the effectiveness of the company's portfolio diversification strategy and operational leverage. Revenue growth was notable at +13% year-over-year, with EBITDA growth across all business units (10%, 28%, and 13% for the Premium, Digital, and On-campus verticals, respectively). The company's consolidated EBITDA exceeded R$1.7 billion for the year, an 18% increase from 2022, outperforming the year's guidance forecasts. The adjusted EBITDA margin increased by 1 percentage point to 33%. A significant highlight of the period was the company's operational cash flow, which exceeded R$1 billion. The period's adjusted net profit was R$342 million, a 146% increase from 2022.
Maintaining a tradition since its 2007 IPO, the company will propose at the shareholder meeting to distribute dividends for 2023 totaling R$160 million, of which R$80 million has already been distributed in Q4 2023. For complete details on Yduqs' performance in 2023, visit our Results Center.
All three business units recorded revenue growth, EBITDA increases, and higher average ticket prices. In the Premium segment, which includes Idomed (Med Schools) and Ibmec, net revenue, driven by strong pricing performance at both institutions, grew by 17% (18% in Medicine and 17% at Ibmec). In the Digital unit, strong enrollment for the year and quarter (up 29% year-over-year) led to the Life Long Learning and the undergraduate student bases each surpassing the half-million students for the first time since the beginning of 2023. The year ended with positive pricing dynamics and the Digital veteran's average ticket price 11% higher than at the end of 2022. In the On-campus mode, where there are signs of student base stabilization with healthier enrollments, highlights include ticket price increases (+8% year-over-year) and a significant 13% EBITDA expansion, reflecting strict cost discipline in the Estácio and Wyden operations.
Debt and CAPEX - In addition to R$1.082 billion in operational cash flow in 2023 (with an operational cash conversion of 88.1%), debt management and investments were financial highlights of the year. By the end of 2023, the company's leverage was 1.65x Net Debt / EBITDA, marking a significant reduction from the 1.96x leverage reported at the end of 2022. As a subsequent event, the issuance of the company's 10th debenture in the amount of R$1.1 billion, along with other debt management initiatives, will reduce the cost of debt by 0.61 percentage points, achieving an average cost of CDI + 1.35%, and increase the average maturity of the debt to 3.4 years.
The company's CAPEX in 2023 was R$470 million (a 4% reduction year-over-year), in line with the market-announced stabilization of investment levels at around 7% to 8% of business revenue in the medium term. Most investments are still directed towards the business's digital transformation. The transformation cycle started between 2020 and 2021 has yielded significant results for Yduqs and was a highlight of the annual results presentation to the market.
ESG - The year also marked significant advancements in the company's ESG agenda, which is included in the performance indicators for all executives and senior managers and has gained international projection since the second half of 2023. Last year, Yduqs became the only higher education organization in the world to receive an 'AA' rating from MSCI and was invited to be the ambassador for the UN's Education agenda in Brazil through the Educa2030 movement. On March 14, the company received two UN recognitions for initiatives related to gender and racial equality – with the Stars of the Revolution project and the exclusive trainee program for Black individuals, respectively. On the environmental front, Yduqs achieved carbon neutrality in its operations. These and other details are available in our ESG Central, which also provides all key indicators of the company's ESG strategy.