Vitru Limited (VTRU) Q2 2022 Earnings Call Transcript
Vitru Limited (NASDAQ:VTRU) Q2 2022 Earnings Conference Call August 25, 2022 4:30 PM ET
Carlos Freitas – CFO
Pedro Graça – CEO
William Matos – Co-CEO
Maria Gonçalves – Head, IR
Conference Call Participants
Vitor Tomita – Goldman Sachs
Fred Mendes – Bank of America
Mauricio Cepeda – Credit Suisse
Good evening, ladies and gentlemen, and welcome to Vitru’s Second Quarter 2022 Earnings Conference Call. All participants are in a listen-only mode now. Later on, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call is being recorded and will be available on Vitru’s IR website.
Now let me introduce your host for today’s conference call, Mr. Carlos Freitas, Vitru’s CFO. Please, you may begin.
Thank you, operator and good afternoon, everyone. Thanks for joining us again. It’s a real pleasure to be here with you all for the release of our second quarter 2022 numbers. Here with me I have Pedro Graça and William Matos, our Co-CEO; Maria Carolina Gonçalves, the Head of our IR Department and [indiscernible] also from our Investor Relations team.
A slide presentation will be part of today’s webcast, which is available at our IR website at investors.vitru.com.br. So I trust you all have this presentation in front of you and before we begin, I’d like to make note that as detailed in Slide 2 of the presentation, safe harbor is in effect for this call.
So now I invite you all to go to the Page 4 of this presentation in which we have the main highlights for the quarter and clearly, this quarter, the most important highlights were linked to the closing of the business combination with going to market [ph] which we closed on the 20th of May. We created with this, the leading player and the largest player in the Brazilian digital education space. So both institutions were already growing a lot organically and now with the two combined, we are now the number one player in Brazil and digital education for higher education space.
We also with our governance with appointment of new members of our board of directors, including at two people from the macro family, the one that created and managed the market for 30 years. So the professor Wilson Matos is now our Vice Chairman for the Board and the definition of the new officers structure with the new celeb team that I’m going to show you a bit later.
We also had the issuance of the debentures for R$1.95 in May of this year to finance a part of the transaction. And, and of course we kick it off the integration process that we have been preparing for in the last 9 months to 10 months since the signing of the deal in August of last year aiming as is ensuring a as move as possible process and to capture substantial synergies as we have already presented to you all in the past.
So in terms of financial indicator, the summary for this quarter on Page 5, here we have the indicators both on organic and consolidated basis. So here throughout the presentation and in the release material as a whole, we’re going to provide you information with only Vitru standalone before the combination and a consolidated basis as well, consolidated view of the market between May 20 and June 30. So as far as today, close to the market, so that you can have as much information as transparent as possible so that you can make your appropriate analysis.
So here net revenue this quarter increased around 75% compared to the second quarter of last year and the consolidated — the overall net revenue was up 85% this quarter and this is with 42 days of market. The organic growth was 33% for net revenue in Digital Education undergraduate for Uniasselvi and 26% for Uniassel as a whole on organic basis. So strong growth in top line. This EBITDA increased margin than a 100% — 108% this quarter with the margin, which is 38% margin on organic basis while 34% this quarter and a growth in EBITDA of 28% Vitru before federal.
In terms of adjusted cash flow operations, a strong increase as well, almost 97.2%, sorry, this quarter with a nice cash conversion of 83% as well. And in terms of adjusted net income, it was higher for us 168% with Uniasselvi reaching R$63 million. So here in cash flow and net income, we don’t have the organic numbers because things start to be mixed between Unicesumar and Uniassel, but whenever we can, we’re going to show you the organic and the overall numbers with and without going to the market.
On Page 6, you have our C-level team, which includes executive who came from both Unicesumar and the former Vitru before this combination. So since the signing of the deal, it was quite clear to us that we were going to combine two winning companies with similar and winning cultures, and that we all would benefit from this it’s move integration process, bringing together the two leading teams.
That’s why, for example, we decided to, as I mentioned before, to have two co-CEOs co-leading the company, former CEO of Digital William Matos, which was the former head of Digital Education at Unicesumar. The idea here is to have — not have a big cover of one culture over the other. We have to blend and put together this truth winning entities. So with that, we have a stronger and faster integration, aiming at creating value for the students and for our stakeholders.
So here in the team that the C-level [ph] thing, and we are basically with people from more or less head coming from former Vitru to position us to be field, including the head of people and management. So, we wanted to have a person from outside to lead the HR exactly to have this message that we are not using or forcing one culture over the other. The idea here to have somebody from outside to lead the HR department of the company.
And for integration, before the closing, we had an in-depth analysis of opportunities in terms of cost and expensive synergies between finding and closing. Part of it was already captured and part will be captured throughout this year. We have as well, several commercial initiatives that are mapped respecting the specifics was each brand and several products, each of them with a given action plan with an owner with a list of deliverables, a set of productization and regular follow up. So we are really on the integration mode with our mindset folks on integration. That’s the number one priority for everybody here at Vitru.
On Page 7; there is just as a reminder the main levers of synergies that we are pursuing. This was shown to you in May when we closed the transaction. So, for example, in terms of OpEx, we have optimization of payroll costs, gain of scale as a whole in contract. For example we have improved collection practice for Uniasselvi and retention practice as well sorry for within furthermore that is going to be useful for Uniasselvi, and for us, it was very clear that we have identified two let’s say crystal clear opportunities regarding the exchange of best practice.
When we talk about retention and customer experience and even let’s say collection process, Unicesumar has a better job. Sorry, Uniassel has a better job. Sorry, Unicesumar has a better job. Sorry, guys. The computer here is going crazy.
So, as I am saying, when you talk about the collection process and you’ve experienced as a whole for Uniasselvi, is let’s say benchmark for Uniasselvi and when we talk about pricing throughout the last years, I guess that Uniasselvi have done a quite nice job regarding every ticket and pricing, which is going to be very useful for Unicesumar going forward. So we also have this type of cross-knowledge going on throughout the company and of course opening up new hubs, the cross-selling and new courses being opened within Unicesumar and within Uniasselvi. So this is a major opportunity for us.
Now on Page 8, just a quick reminder of what we delivered in the last two years. So now, we are going to complete two years after our IPO in September next month. So within this two years, I guess we have delivered on our plan in terms of ramp up of current hubs, open up new hubs, the new quarter that we offered and of course the inorganic growth. I’m going to go into details of each of this levers in the next pages.
From Page 9, you see the maturation curve, both for Uniassel and now for Unicesumar. This is the most important driver for organic growth. The maturation of the current hubs, only we have a maturation index on average of 43% of the potential of, of the hubs of both Uniassel and Unicesumar.
So you see here, the curve is very say stable for Uniassel and Unicesumar. In Unicesumar, the dark blue area here, which are the older hubs, they have a different profile in the case of Uniasselvi because Uniasselvi, they are more or less stable over time, because they are I’d say in full capacity, but in the case of Uniassel, we have 36 hubs that are still maturing. They were opened at the end of ’16. So they are not yet fully mature. That’s why they are growing over time. But the message here is that we have an important driver for the potential of expert hubs, which is growth with limited execution risk.
On Page 10, the expansion of the digital education, undergraduate students, and the number of hubs per region major, major growth with the deal with Unicesumar. So you see hear throughout the country, we growing a 100% in some regions, 360% in the Southeast, for example and when you see the number of hubs, we went from 800 hubs one year ago to now more than 2,000 hubs throughout Brazil, including more or less one third of them in the Southeast.
So as we have been always saying the Southeast is the next frontier for growth, and we are going to open a lot of Uniasselvi hubs there with partners of Unicesumar that are there in cities, in which you don’t have both brands.
On Page 10, the new courses, this is not new to you. We have nursing already in operation for one year now in Uniasselvi, north is starting now this year and Unicesumar, and in the future we will have law and psychology with also going to be very important to sustain tickets and to expand the overall market for digital education in the country.
In Page 12, the usual slide that we bring showing as public information and public indicator to show that our technology and our customer experience is I’d say different and on the last part, we have our apps ranked as the two best apps both by, on average, but Apple Store and Play Store that ranked provided and this grades given by our customers and on the right part of slide, the latest numbers for Uniasselvi which both brands are the best grades, the best numbers within our business players in Brazil.
On Page 13 the geographic footprint, as I always said, it’s very complimentary on the geographic perspective. We have now more than 700 cities with only one brand presence. So now we are already opening some hubs in some of these cities, with the other brands. We are planning a lot of expansion. So for next year, for next year, we are going to have more hubs open than the usual accelerating this growth throughout Brazil.
So now on Page 14, the growth was once again, led by digital education undergrad segment in which we reached 741,000 students in June of this year being the number one player in the country, a growth of 140% being around 19% organically with Uniasselvi, and in total 811,000 students in both brands.
When you see the intake and every ticket, you see different profiles here. Uniasselvi, we are at the close number group 29% in intake this first quarter, the first semester, sorry, of this year, compared to the same period of last year, while had very strong growth much I’d say stronger than Uniasselvi. On the other hand in terms of tickets, Uniasselvi increased every ticket of 13% and it’s important to highlight that most of this increase in itself is not linked to the mix effect.
There is a mixed effect that accounts for around two points of this 13 point, but most of the increase is real apple-to-apple increase in every ticket in given Uniassel. In Unicesumar was a very, very strong growth in intake. So I don’t know, every ticket of senior is usually higher than the average ticket of a newcomers. That’s why at the end, there was a decline of 2% in the average ticket of Unicesumar.
So for this year we shall still see a growth in the case of average ticket of Uniasselvi. We shall still see a likely, slight decrease in the tickets of Unicesumar because of a very strong growth that Unicesumar had in the intake and going forward, over the medium term, we are going to use the expertise of Uniassel in pricing and ticket to improve over time the average ticket of Unicesumar.
On Page 15, net revenue gross profit, and EBITDA for the company. So at 85% growth in net revenue except 8% growth in gross profit and 108% growth in adjusted EBITDA. So now we’re going to go in details in each of this ratios.
So on Page 16 or 17 where the sources of growth in net revenue it was boosted both by digital education, undergrad segment, as a whole. You can see here on Page 16, for example, that and Vitru, there was a R$46 million increase in revenue in education undergrad, a 33% increase quarter-on-quarter. But also of course, the contribution of Unicesumar is marked as a whole accounted for almost a R$100 million in new revenue for Vitru in this 42 days of consolidation, mostly coming from digital education undergraduate.
So now when you see the breakdown on Page 18 so on a quarterly and on the semi-annual basis, no big news here. Most of the revenue of Vitru was already coming from digital education and here we provide a breakdown of the revenue of Unicesumar within this for today, which is more or less the breakdown that Unicesumar has on a yearly basis.
So it’s more or less 6% coming from Digital Education undergraduate around 22% to 23% coming from medical education and 16% coming from other on-campus courses. Most of it coming from health course. So, in total around three fours, so 75% of the revenue of the on-campus business of Unicesumar comes from health being medical or other health courses.
On Page 19, here is the more detail on the breakdown of the intake and student days as a whole. So here first two pie chart is the intake over time of Uniasselvi, for example, and the two pies in the bottom part of slide, the breakdown of the base as a whole, as of June. So here a couple of messages. And the first one is that we are increasing slow but steadily, the weight of digital educational health courses sale, for example, it was for 24% of intake last year. Now it’s 25%. It is 22% of the base. So over time, the base is going to increase.
And for Unicesumar it’s only 19%. So we already launched some new courses now in the second half of this year, now in July. We launched at Unicesumar, some health courses that were already available within Uniasselvi and that we didn’t have in the portfolio of Unicesumar. So over time, we shall have a slightly bigger weight of health courses, not only at Uniasselvi, but also at Unicesumar. And also important to show here on the left, the overall growth in that revenue as a whole. So 33% organically for Uniasselvi and overall 75% with Unicesumar, this with 42 days of Unicesumar, that reinforces the resilience and the differentiation and the scale that we have been able to achieve with both brands.
And scale in the business is important. Scale is important to generate cash flow, to invest in technology, to provide better services for our students, and at the end to keep creating value for students, for the shareholders and all the stakeholders.
On Page 20 it’s back shot on medical education, the medical business, which now is a bit more than 1800 students 348 seats in medical education, one of the best medical colleges of Vitru. It’s a high demand course, which accounted in 42 days with R$22 million with average ticket of slightly more than R$10,000, very resilient revenue stream and still maturing overtime.
On Page 21, the other two segments on campus as a whole segment, which include Medical Education but here we have the highlight of the ex-medical on-campus numbers. So a decline in the organic number for Uniasselvi, which is let’s say, normal and aligned to our vision that this is a segment that we expect to decline over time.
But of course, with the condition of Unicesumarthis increased by a 100% given the strong health courses of Unicesumar and on the — continuation education slide, this is a business that on organic base was more or less stable over time, slight increase on a quarterly number, with Unicesumar. This was as I said before, in the previous quarter, this was expected by the reduction throughout last year, in the average length of graduate courses. So most of this shift is over, so we expect reference to grow going forward. But, in the first, I’d say six months of this year, we had the shift in the size, in the length of the courses. So this is a business that did not grow much in the first six months of this year.
So, when you see about EBITDA on Page 22 and Page 23, so on Page 22, just as a quick snapshot. We have an increase of 28% on organic basis, 108% on a full basis. We gain margin, organic gain of 0.6 points for Vitru results Unicesumar and a 4.2 points gain in margin, including Unicesumar during for today. So we already told you in the past that for a number of reasons, Unicesumar has a higher margin EBITDA margin than the former Vitru.
So last year, for example, Vitru had an EBITDA margin of around 29% while last year Unicesumar has had a margin of around 39%. So it’s 10 points of difference for a number of reasons. So, with the combination of both entities, our weight average margin it’s a bit higher now, closers 34 points, sorry, 38 points in quarter and 34 points in the semester.
On Page 24, cost of service first; on organic basis, we had more or less stable cost at a percentage of net revenue for Vitru before Unicesumar even despite the resumption of classes, meetings, both at hubs and canteen and with Unicesumar, we had a low — in fact lower gross margin basically because of the higher relevance of the on-campus segment for Unicesumar. So the on-campus segment has a lower growth margin. So the overall consolidated number is slightly lower. So cost of service increase a little bit as a percentage of net revenue with Unicesumar.
For G&A, we are more stable over time, around 7% of net revenue. So, with this deal month, we are more or less maintaining our link structure at around 10% of net revenue, which is quite low and one of the lowest numbers in the industry.
Sorry, on Page 25, expenses a PDA, you have lower cash, lower PDA expenses as well. So on the left part of the slides we had a slight organic increase for Uniasselvi and Vitru around 20% but at lower tax basically because we had a higher intake than this number. So the customer cost for Uniasselvi was around 5.5% lower the first intake of this year, compared to the first intake of last year.
And in the case of Unicesumar, the marketing and selling expensive as a whole for Unicesumar are much lower at the percentage of revenue than the give of Uniasselvi and that’s because the hubs of Unicesumar are much more active in the sale process because they have a higher percentage of the revenue share that we have.
So in the case of Uniasselvi, this number on average today is around 23%, 24% of the match revenue of the Digital Education Undergrad segment. In the case of Unicesumar is around 30%. So Unicesumar has a higher capacity, a higher revenue share. And on the other hand, the hub owner, the partner is more responsible than in the case of Uniasselvi for the intake process.
And on the PTA part here on the right part of the slide, we have a slightly lower organic PDA in the case of Uniasselvi quite small reduction, which I guess a nice achievement because of the current market conditions and in the case of Unicesumar as a nation for, they have superior collection and retentions procedure and processes and methodology as a whole. So, they have quite low PDA expenses and a percentage of net revenue and at the end on a full consolidated basis, this quarter, our PDA went down from 16.8% last year to around 16.2% on organic data this quarter only Uniasselvi and 12.5% of net revenue when it’s taken to account Unicesumar.
And last but not least, on Page 26 we have solid growth in adjustment income and adjusted cash flow from operations following this business combination, a growth of 169% in adjustment income, this quarter given the contribution of Unicesumar and a very nice cash flow generation from operations of 73%. Cash sorry, this quarter, including the 42 days of Unicesumar. So there was strong increase this quarter and in the semester with less than half of the quarter. So Unicesumar is a big cash flow generator and this cash flow generation is important pillar as well in our overall financing strategy in our leverage process over time.
So now, that’s it. And now I’d like to open for questions.
[Operator instructions] And our first question comes in line of Vitor Tomita from Goldman Sachs.
Good afternoon, everyone. And thank you for taking our questions. We have two questions from our side. The first one is if you could give us some initial call on how you are seeing competition and pricing trends in the current intake cycle so far. And the second question from our side, if we may, would be if you see any room for further reduction in the length of continuing education programs over the long term, given that, that seems to be a sort of a plan in global education. Thank you.
Thanks for your question. For the continued education part, continued location in our case, most of the business today is formed by graduate courses. So in graduate courses, we don’t expect further reduction in the length of graduate courses as a whole. At the end, it is, I’d say on a say pedagogical perspective it’s not, I’d say likely that there will be further reduction in the overall length of courses for graduate courses, for regulated course, as we offer.
What will happen and that we are already working a lot on that. Let’s say there is some, some growth, not yet nothing say outstanding to be, to be shown, but we are stead growing in technical courses in other courses as a preparation for, for the first job and the free courses as we call it.
So, this is also part of continued education, and that once we have more, let’s say scale in this business, we’re going to show from numbers for that. So, going forward continued location will be a kind of a blend of graduate courses with other courses as a whole, for the market. So far, it is in real life, much more concentrated in graduate courses. And as I told you we don’t expect for the reduction in the average length of this core facility now.
So the first question about competition what we are seeing in the first month of this intake cycle is nothing very different from what we saw in the first half of this year. So it is a competitive market. We, we are seeing that in the case of the intake of only a sales we are growing the same levels as we’ve been growing the last year a bit more than 20% in intake and a bit more than that in Uniasselvi has been growing more than Uniassel.
On the other hand, as we found the first semester of this year, the tickets of Unicesumar because of this strong growth they are more or less 2%, 3%, 5% lower than, than what we saw last year as we saw in the first semester of this year. So on the other hand, in case of only a 70, we are still seeing the growth, and as we have been seeing in the last say semesters, so nothing different from what we saw in the first half of these year overtime, as I said, we are going to work more on the pricing and positioning of Uniasselvi including tickets overtime, we don’t expect this to be actually to have major changes in the second semester of this year in real life.
Most of the intake is a big chunk of intake is, is over or is most of it is, is being accomplished now in the case of on Uniasselvi and so we shall see the same trends that we saw in the first semester of this year, but it is a competitive market. It has always been, and in this market, we have enabled to differentiate ourselves either in terms of faster growth and slash, or in terms of tickets.
Thank you. Our next question comes from the line of Fred Mendes from Bank of America. Your question, please.
Hello. Good evening, everyone. And thanks for the call. I have two questions here. The first one is about the average ticket increase very strong above inflation, 12, 12.5 year-over-year. If you can just give us an idea if it’s possible about the — what is the impact for more premium costs versus what is the impact of actual price increase here? This will be the first one.
And then the second one, news of potential sales of the medicine business. Just wondering that makes sense. It does and anyways, any caller you can give here, this makes sense or not, this would be great. Thank you.
Thank you, Fred, for questions. The, the second a question regard the potential sale of the on campus and slash medicine business. We issued a venture for the deal with Uniasselvi we now have, I say have that we can generate cash flow to serve the debt, but we are actively working in, in alternatives to accelerate the leverage and we have three options.
First one is to go to market to have a follow one not an option today, maybe an, an option in a few months, but not today. So we, we must have the marked open. Second one is to have a private capital increase. And we have been approached by a number of players that, that wanted to, to, to find a check and inject money and to participate in the growth in Vitru. And the third one can be the sale of part of the business namely medicine or we part of on campus as a whole segment, nothing substantial here, nothing firm here, but, but again, we have been approached by a number of, of players over time interested in our me business. So, we’re sorry.
So we have been approached and, and, and, and this is a possibility that, that we can execute in, in the future, nothing serious right now. So this is nothing more than rumor right now. Your first question was about the, the, the increase in tickets. So we increase almost 13%, so like 8% increase in a ticket of ons this semester. As I said, most of this effect is not due to, to mixed effect of the premium courses.
So, as we have in the presentation, the breakdown of intake at only in first half of last year, first half of this year, there was a, a five increase in the overall health courses, for example which has an average ticket of a bit more than 400 a. So we have an average ticket of around 208, a more than 400 in a health and a bit around 250, more, less for the known Freeman courses.
So when you see, when we isolate the mix effect the change in, in health course, for example, this, this number of 13% goes down to around 11% and 11.5%. So it is not the most important driver. The driver here was real pricing strategies on a SKU by SKU basis on apple-to-apple comparison. So we increased tickets for seniors in the beginning of this year, we increased a ticket for newcomers.
They intake our average price for intake in the first semester of this year was also close to 10% higher than what we had in the, in the first semester of, of last year. So, I mean, so these numbers are, are a, a function of our strategy to, to maximize say profitability and to lever on our compared advantage and our hybrid model of only in which we, we provide. I’d say a nice Uniasselvi for our customers.
Perfect. Carlos, super clear. And thank you very much.
Thank you. Our next question comes to the line a Ian [ph] from BTG. Your question please.
Good evening; Pedro, William, Carlos. Good evening, everyone. There are two questions on our side. The first one is regarding Unicesumar looking at Unicesumar’s standalone numbers. We do see like strong growth in intakes but slightly more aggressive prices and should we see these pricing strategy going forward? Unicesumar’s operation, or should we see something more close to what we see in Uniasselvi with better pricing dynamics.
And the second one is if you could give us more call on the CAD28 million non-recurring costs related to restructuring and M&A expenses? Are you improving Uniasselvi infrastructure, hiring new features or is this mostly related to M&A fees? That’s it? Thank you.
So the restructuring M&A costs for this quarter, it was a different quarter around R$28 million, R$29 million of this cost. Most of it is related to M&A. So mainly the fee that we pay to our advisor in the acquisition. So, this represents, let’s say two thirds of this number.
And the integration itself integration itself is the difference — the integration is about R$60 million more or less in the quarter. So around R$2 million per month that we spent in this second quarter of this year. For the intake of Unicesumar going forward, in the short term, meaning this current quarter and this current semester, we shall expect the same trend for Unicesumar.
So a stronger growth than only a sell at lower tickets and so this is the trend that was already put in place before the, the, the combination. So, as a reminder, before the code, the closing of transaction, we discussed opportunities for cost and expensive synergies, but we could not discuss strategies for, for, for pricing, et cetera. We were very flipped in our cleaning transaction. We discussed opportunities for cost and expensive synergies, but we could not discuss strategies for, for, for pricing, etcetera.
We were very flipped in our cleaning approach that we shall not discuss strategic issues before the, the closing. So the strategy for the intake in the second semester was already given basically. So, what we shop expect for the second semester is more or less, what is find the first semester strong, strong, strong growth in the case of Uniasselvi at slightly lower tickets and going forward.
Starting next year we are going to work basically. So, what we shop for the second semester is more or less, what is for the fourth semester strong growth in the case of Unicesumar at slightly lower tickets and going forward. Starting next year we are going to work to improve tickets as a whole within, Unicesumar trying to have something closer, but not equal to what we have in the case of Uniasselvi itself. We have been growing constantly over time intake between 20% and 30% each period is each intake with a growth in every ticket, closer inflation, sometimes higher from lower, usually slightly lower inflation.
This is the approach of Unicesumar in the last two years, more or less over time, we are going to work closely and to try to push up a little bit the tickets of Unicesumar is not going to be easy because it’s a very competitive market. But Unicesumar has a quite let’s say quite good product. The, the quality of the different learning product of Uniasselvi is quite unique. So we’re going to lever on that.
[Operator instructions] Our next question comes from the line of Mauricio Cepeda with Credit Suisse. Your question, please.
Hi everyone. Thank you. Thank you for the, the space here in the, in the call. So I ha I have some questions. The first one is more operating about the retention versus the ticket. I saw that SVI had a good performance on tickets as you were saying. But, I saw also that the retention rate was a little bit worse than what is saw previously and the country for UNK, right? The ticket was, did not perform well understand there was an impact from the newcomers but retention rate was, was pretty good.
So I would ask exactly what may be happening in to, to, to create such differences in, in performances. The, the second question about the know, let’s say the, the adjustments to the BDA you mentioned a little bit about the M&A but see, there is also some adjustments about stock options.
I see that I saw that particularly stock options were, were a little bit higher than the usual levels. So my question would be from all these adjustments I understand that that MNA would be like 2 million per, per, per quarter, as you say, but from these other adjustments, if there would be any kind of recurrent expenses or anything that may reflect negatively in the following quarters and about the operating performance understood that the operating margin was better if, if we exclude this effects but is it be exclusively because Uniasselvi has a better margin or it has any relation to, to, to actions on synergies that may have been taken before or by the time of the consolidation? Thank you.
Let’s start with, with the third question, I think for a question regarding I growth margin and margin as a whole the business Unicesumar has a higher overall BD margin than the cave of Unicesumar. We do have some synergies in this 42 days. But most of the S that we are going to see in the second semester of this year we do have some S here but I’ll guess that there will be more say positive surprises going forward.
But it was already, I guess, a, a part of obtained in the first, in the second quarter of this year for the adjustment mean, we defined for the IPO, two years ago, how we are going to, to report adjustability and for example, several of stock options in our stock on plan it is a non-cash set settlement plan.
So that’s why we define in the past that this was going to be excluded from the justice BDA release the increase, the special increase for this quarter was basically because the consolidation of mud, the way we calculate the, the expenses we have bigger company now. And so when we do the calculation with the black and show cetera, we have a higher say value for, for this options and this value of this options, the difference, the increasing value over time is recognized in the P and L and adjusted when we release the, just BDA numbers.
So, but those are the type of adjustment that we, as we defined two years ago, that we are maintaining this this say definition the regarding retention. There is an important difference here in this case. So compared to Uniasselvi you are right, the retention of only Unicesumar increased this quarter. And for example, compared to what we had last year, and we, we included in our website a spread-sheet with some numbers even from historical numbers for Unicesumar that you can all have as much information as possible so that we can compare understand the, the sources of the numbers.
So it two to the overall retention increased, which is not the case in the case of UNYA. And one important driver here was where the health courses, the health courses in which UNYA is increasing health is very nice. You have is a, a large adjustable market. You have much higher tickets, the down part of health course in different learning is that the dropout ratio is higher, especially in the first semester or first year.
So, in our health course courses, we have two meetings per week, for example and we know that some newcomers in the first semester, they have difficult to adapt to, to this model. So that’s why most of the dropout takes space in the first semester. That’s true for all this learning and this special, especially true in the case of health courses. So when survey is increasing the weight of health courses in our overall base over time so dropout is bigger in the first semester in this case and when you see about tickets, I guess that your free rights that we show always analyze this with, I say with a three with perspective, we have overall tickets, overall retention, and overall days, student days.
So our student days is growing over time. So we have a strong intake, a slightly higher dropout but at the end, a very solid ticket and at the end as match revenue increasing more than 20% on organic days. So it is, I mean, we don’t give discounts to the renewal process of seniors. We don’t so, so this is a we notice some period do it. So, so it is our trade between maintain the unit or maintaining every ticket.
And that’s I’ll say unstable, unstable a C room, not easy, but we, we usually prefer to, to maintain a health ticket even at the expense of a higher dropout. And of course in the first half of the year or first semester of, of the, of the course, this is very dramatic and Uniasselvi is going to benefit from the overall user experience and retention process and overall handholding that is provided by Uniasselvi demand to eat the students. So this, this customer experience, this customer centricity again, is a quite nice benchmark for Uniasselvi yourself and Uniassel going forward is going to benefit from this say launch of Unicesumar.
Thank you. This does conclude the question-and-answer session of today’s program. I hand the program back to Carlos Freitas for any further remarks.
So thank you all for the — we’re very honoured and very proud that this is the first release of Unicesumar together with Vitru, a new company, and anyway, we are available for further questions. Thank you and good evening.
Thank you, ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.