Cogna Educacao SA
BOVESPA:COGN3
Earnings Call Analysis
Q4-2023 Analysis
Cogna Educacao SA
The company has reported a slight decrease in dropout rates by 2 percentage points in on-site attendance, reassuring investors of stable student retention. The student base demonstrated a robust growth of 6.4%, significantly contributing to the consistently positive outlook for the first quarter of '24. Notably, the organization registered its sixth consecutive quarter of revenue growth at 1.7%. Despite the variations in student dependencies between the third and fourth quarters, a normalized outlook suggests sustained revenue growth, expected to continue in '24 in the single digits.
Revenue from high presentiality courses, including premium segments like nursing and engineering, grew by 7.3%, while the ticket for low presentiality and online courses also saw an increase with an overall segment growth of 7% for the quarter. This indicates the company's successful pricing strategy, with a 3% growth in the average ticket for in-person courses showcasing strong pricing power.
The company reported EBITDA growth of 1.1% in the fourth quarter and a significant 12.7% for the year, bolstering investor confidence in the firm's cost-efficient operations and financial health. Operational leverage has been enhanced by the average students per campus rising to almost 2,100, contributing to reduced costs and improved economies of scale.
KrotonMed, a business unit within the company, has yielded impressive results, with revenue and EBITDA surging ahead by more than 25% and 69%, respectively, in the quarter. The unit is poised for further growth, gearing up for new college approvals and competitive positioning in medical education, thereby reinforcing positive future prospects.
The company achieved a strong financial performance, with net revenue hitting BRL 554 million in the fourth quarter, marking a 10% increase. The year's overall revenue growth stood at 18% compared to '22, bolstered by both organic growth and technology acquisitions. Cost and expense management led to margins improving by 3.2 points, while the EBITDA margin expanded from 39.3% to 42.3%. This underlines the firm's successful translation of top-line growth into bottom-line results.
Saber, another segment of the business, has also performed robustly, with net revenue growing by 58% for the year, and EBITDA up by 75%, amounting to BRL 175.2 million. This growth was propelled mainly by increases of 62% in the national program of adult book and a remarkable 102% in other services.
Overall, Cogna enjoyed revenue growth of 12.6% in the fourth quarter, and a year-on-year increase of nearly 16%, with net revenue reaching BRL 5.9 billion. The recurrent EBITDA followed this trajectory, presenting an 11th consecutive quarter of growth, up by 17.1% for the quarter and almost 19% for the year. Operational cash generation was also strong, growing by 282% for the quarter.
The call brought attention to a disciplined focus on operational efficiency, with reductions in financial expenses and forthcoming rent adjustments expected to positively impact cash flows. The company's ESG achievements were highlighted, with impressive targets overachieved in '23, and a new ambitious goal to halve greenhouse gas emissions by 2034. These factors, combined with robust cash flow projections and a commitment to continuous operational improvements, paint a picture of a company proactively managing its future growth and societal impact.
Looking forward, the company projected an EBITDA range of BRL 2.1 to 2.4 billion for '24, noting that while challenging, the upper end of this range is achievable. This guidance reflects a conservative yet optimistic outlook, considering the company's ongoing projects and historical growth trajectory.
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[Interpreted] Good morning, everyone, and thank you for waiting. Welcome to the teleconference for the 4Q '23 of Cogna Educação. [Operator Instructions] We are telling you, informing you that this conference will be recorded and made available with the website of the company, www.ri.cogna.bon.br where the complete material of our results are also available. [Operator Instructions] Then we'll start with Q&A session. [Operator Instructions] Before going on, we would like to tell you that the event observations during this conference regarding the business perspective of Cogna present the operational and financial markets are the premises of the company as well the current information available for Cogna. Future considerations are not a guarantee of performance. They involve risks, uncertainties and premises as they refer to future events. Therefore, they depend on circumstances that may or not happen. Investors and analysts must understand the general conditions, the statutory conditions and operational factors as things to affect the future results of Cogna and may lead to results differing materially to those that rest in the future considerations.
Now I'd like to pass on the floor to Mr. Roberto Valério, CEO of Cogna, to start his presentation. Please, Mr. Roberto, the floor is yours.
[Interpreted] Thank you. Good morning, everyone. Thank you for participating in the teleconference to discuss Cogna's results in the 4Q of '23 and the complete year of '23. We have in this call Federico da Cunha Villa, our Financial Vice President, Guilherme Melega, Director President of Vasta and [ Joshi ], our Director of Investors and Corporate Finances. As we always do, we'll have about an hour for this call. We'll explain the situation for about 40 minutes and then 20 minutes for the Q&A. So I'd like to start the presentation by saying that we are quite pleased with the results of the year. This is the third following year that in a consistent way and in a growing way, we can deliver more revenue, EBITDA margin, OCG. In 2023, we already delivered almost BRL 900 million in the OCG post CapEx. Since 2020, we had a guidance that we would deliver BRL 1 billion in post CapEx in 2024. So in 2023, we were quite close to this goal that is pointed out to the end of the year. So I would reinforce that the results came in a very positive way, both in the fourth quarter and during the year in the 3 business units. All of them grew in revenue, EBITDA margin and generated more cash flow during the year. We show the consistency in execution. Obviously, one of the BU compete in different business and different markets, and they all could have better performance, better resulting through the services and the satisfaction of the clients. We emphasize that the message of the administration, all the products had a better experience for the clients in B2B, B2C and B2B with increasing NPS and processes, which made us believe that what is ahead of us is also positive because the improvements are very consistent across the board. To summarize each one of the verticals, Kroton in 2023 reached more than BRL 3 billion in revenue, with a growth of almost 9% of revenue regarding 2022. I know one of the points that we have questioned has to do with the growth of the revenue in Kroton in the fourth quarter. I will talk more about it later, but I'll tell you that we had 2% in the fourth quarter, influenced by the anticipation of dependencies of the student due to the improvement of the reenrollment process and the allocation of the finances so they chose earlier in the semester. Therefore, this revenue was almost situated in the third quarter, which means that the 2% of revenue in the [4 3 ] is not a point of concern because the average in the second semester was 4%. For Kroton, we see a perspective in capture and the reenrollment very positive for '24. So I'll talk more about it later. But this is only a circumstance. It's not a point of concern. We'll see the pace of growth of Kroton in '24.
Now talking about the EBITDA, the recurrent run rate of BRL 1.1 billion was almost 13% compared to '22, we suppose that we are gaining in efficiency with the growth of revenue. In the fourth quarter, the student base grew 6.4% and the pace that we have with the capture and reenrollment, we understand that the base will hit the same or even increase, so we have a positive perspective ahead of us. We also saw the growth of the average ticket in the presidential when we compare the second semester of '23 and '22. So this is the result of a strategy that we've been discussing for more than 3 years that is focusing on the presidential students and focus on the courses with the greatest lifetime value like law courses and all of the courses, just to give some examples.
So we keep working and having everything properly and then the company matches that along with the student. And great part of the curricular made this being digital so KrotonMed is now the business of growth in Kroton that it's grown strongly. It grew more than 26% in the quarter, more than 25% in the year with a growing EBITDA of 68% of EBITDA in the fourth quarter. So this is a business unit that is quite healthy with high rates of growth in EBITDA and gain in profitability, which is also very important. We understand this vertical will keep being a growth driver to us in the next years. We will talk about it more later.
Regarding Vasta, Mele will then get into details, but this was also a very beginning in '24 with the growth of 16%. We reached more than 35% of the total cycle for '24. The revenue from Complementary Solutions is still growing. We know with that number that we are enriching our portfolio and more and more, they have taken this product to offer in the regular curriculum and so on. So we keep growing with very high rate, more than 40% in the fourth quarter. The net revenue reached more than BRL 500 million, with a growth of almost 10% in the quarter. That is the first quarter of the commercial cycle because the 4th of the year is the first of the commercial cycle of Vasta. In the fourth quarter, we had 18% more than the fourth quarter [ in 2022 ] and the recurrent EBITDA in the year reached more than BRL 416 million. We are quite satisfied with the Vasta growth. We'll talk more about it later, but also with good perspective, not only in the migration of moves to premium teaching system, but also with Complementary Solutions, with the new growth at B2G and [ Pack to Anglo ] that has a lot of contracts signed with a very positive perspective to '25.
Now to finish Vasta, the fourth quarter had a recurrent of 42%, 3 points percent of before the previous year. So it was very positive and despite you don't remember that in 2023, we suffered a lot of pressure, especially with increased cost of paper and stationery that pressured our courses. Now talking about Cogna specifically, I [ offer the bet ]. I think the main highlight of the year and the quarter is the GCO post CapEx growing 65%, I reinforced BRL 900 million. Remember, we started this [indiscernible] in 2020 with BRL 240 million, and now we are reaching BRL 900 million. So our CAGR in the period from '21 to '23 in average in GCO was more than 50%. Knowing that, well, we can be confident that what comes in the future is quite positive and our guidance is quite possible for '24. I think the other good news is that the post CapEx GCO and post debt service, we did BRL 148 million in the quarter, BRL 200 million in the year. So we cannot only do everything we want to do and invest everything we want to invest, after all, we have more than BRL 400 million in CapEx and paid debt all the BRL 200 million in cash. So it shows how strong we are.
[Indiscernible] is decreasing, and we are leveraging the total, so it will become better and better. Regarding the EBITDA results, I would like to reinforce that this is the tenth consecutive quarter of strong growth. And I reinforce consecutive because it shows consistency. We have won the quarter that goes very well and the others as well, so we can have that for 10x consecutively grow in 4% in the fourth quarter, almost 16% in the year, the 3 units pushing this revenue and also helping in the EBITDA growth and 17% in the quarter and almost 19% for this year. So I think the reflection on that is the reduction of the leverage that we reached at less than 1.88x that we had in the third quarter, so we are now 1.83x, with a very good perspective to keep reducing the leverage, with the strategy that we have here that is good in liability management based on the cash generation of the quarter.
[Interpreted] Now I'll invite you to keep talking about Kroton.
So in Page 5, the first information that we bring is the dropout. We have a slight decrease, 2 points percentage in a low [ on-site attendance ]. So with almost 7% in a high [ in-person attendance ], so we obviously have a growing basis with better activation of new students. They have a greater dropout rate, so dropout is not a point of concern. We see the reenrollment in a very well developed manner. We can gain and improve our reenrollment year after year and in the semester from '23 to '24, it's not different. So I'll say this is basically ability, nothing to call our attention. The student base is growing a lot, 6.4%, and remember that during the year, we've had a quarter that we reached at 9%, and I reinforce the point that we have a good perspective for the term -- for the first quarter of '24, and we know that the student base will keep growing. Now going to Slide 6. We have the net revenue of the quarter. That grew 1.7%. This is the sixth consecutive quarter of growing the revenue. We showed how this growth curve would be. And I know that at first, the numbers then showed that the revenue is decreasing in student, but it's not. It was an anticipation in the selection of the dependencies of students that anticipated to the third quarter. So I reinforce what I mentioned in the beginning, the revenue growth would be 4% if we normalize the third and fourth quarter, both in the ticket and the student base that are good in this cycle of renovation and capture. So we believe that the revenue -- the net revenue of Kroton for '24 will keep growing in single digits, but about as it was at '22 and '23. [indiscernible] reinforced this trend in the revenue from '22 to '23 as we have in the graph, almost 9%. But I would like to go to the next slide, Slide 7. The first part shows to repeat the strategy that is basing a growth, growing cost of revenue, and we see that this growth is due to the cost that is basically fixed, especially if we operate in the 100% online courses or hybrid courses just like us. The variable cost is less relevant for growing the revenue growth possibility.
And now talking about [ the quarter attendance ] the presential one in high potentiality, we have 2/3 in the presential courses and the ones that we call is the premium, like nursing, engineering, there are courses in the distance modality, but with almost 50% of presential classes and in the presential, the average ticket grew 3%, which reinforces our ability to repass the prices, especially in the high presential course will use the drop in the average ticket in the high [ presentiality ], but between products, there is no drop of ticket. It's because we have more mix. We have more AD premium students. But in the segment, the volume growth, 7.3%; and the revenue, 1.3%, the high [ presentiality ].
In low [ presentiality ], we grow the ticket. in the semi or the 100% online, remembering that these are the courses with no lab, but with presential classes at least once a week, so here, we are growing the ticket both in the semi and in the 100% online with the volume growing 5%. This segment grew 7% in the quarter, okay? Now going to Page 8. I'd like to talk a little bit about the cost line. Then I think the highlight here are that we keep investing in marketing due to some reasons. So 3 years the capital cycle, the first one in the year is quite important. It is the one bringing the highest amount of students. So we invested more in the fourth quarter in marketing, and we will invest more in the first quarter as well, to try to set up the enrollment because it is very important and it brings a lot of revenue to the whole year. It creates a relevant base. Also, the second point we are discussing for many quarters is that the consolidation programs of [indiscernible] and our brand is alone [indiscernible] for 1 or 2 quarters, at least 2 years. So we are increasing the marketing expenses, but they are not constant, they are not forever. But for the period of '24 or maybe even the first quarter of '25, then we'll bring elements to the group that are [ painfully ] here in the first quarter. So how much we are gaining in awareness and how we are progressing the strength of the brand nationally. So it is an investment that makes a lot of sense and we'll put the growth across. And the second item, collecting both items, population operation expenses, if we account for the 2 points, we gain 2 point percentage in margins with both efficiency gain in [ stereo ]. We can be quite efficient in these new lines and profitability and the PCLD as well, that for 3 years, we are reducing the percentage of the net expense and in the fourth quarter, we could reduce to 2 points percent. So I think this lines, except for marketing, because we have a strategy of growth and consolidating the brand, but aside from that, all the other lines are generating efficiency.
In Slide 9 we have a little bit more of what we have with PCLD, as I said, it is improving continuously. We have been using the average indicator for receivables. We are reducing the average receivables. In the fourth quarter, it was 54 and now again 44, so it's quite ahead in the receivables. That reflects of all the efforts, we carry out in the quality of capturing the students, the new students and all the methodology with a lot of criteria renegotiating the enrollment, generating a lot in PCLD, but above all in the cash flow within the BRL 900 million of CapEx. And the last line graph, we see that the PCLD overall is stable in 9.5%, 9.6%. Slide 10 now. The recurrent EBITDA. We have in the fourth quarter our EBITDA growing with 1.1%. Obviously, revenue grew a little less, which reflects in the EBITDA as well. But I think it is important to emphasize the year because that's what reflects the ability over the quarters is that in what we operate, by receiving the EBITDA growing almost 13%, 12.7%, even with a gain in March of 1% in margin gain with consistent results that we are quite confident that this performance for '24 will keep being positive, because we have many lines and we see it better in the gross margin and the PLD and results and of operational and operate expenses except for the marketing, as I noted, but we have a lot of efficiency ahead of us.
Slide 11 now brings you a little bit more of productivity cost in the campuses. We keep increasing the average students, for example. So we started our restructuring the fourth quarter of 2020. We have more than -- less than 1,500 students per campus. Now we are having almost 2,100 students per campus, which helps us reduce the costs as we can see the operational costs that I mentioned before. I think the highlight here is that we keep having the same amount of campuses, 112; we didn't reduce anyone in the last quarter, but looking ahead, especially in the next 2 or 3 years, we have many rental contracts that are long-term contracts that are being finished, and we don't have the [ patience ], but we are extracting and analyzing many potential projects to have some changes whether in renegotiation or change in the address that can bring some economy to us. Now on Slide 12, we're talking about KrotonMed. We are quite satisfied with the results of KrotonMed. It's a business unit that is bringing very positive results with revenue and EBITDA and margin growth. So you see that in the quarter, or in the accumulated of the year, we grew more than 25% the revenue in EBITDA with also expressive growth of 69% in the quarter, 42% in the year. So the emphasis here, the highlight is that we have [ full quarter college ] that is in process of authorization and has went through the whole process. We are now waiting just for the disclosure in the official newspaper so that we can start capturing students in the second semester. So we will have some extra guest room, and obviously, we'll participate in [ MigeMed ] disclosed in the [indiscernible]. We believe we can be quite competitive in this call and reinforce what we mentioned in other calls that we have 4 requests of med scene colleges that are on their annual holidays and the 4 medical schools have been visited, and we had scored high in the visit. Therefore, they are prepared to operate. Obviously, there is the context of the vote in the Supreme Court and so on, and we understand that if, in fact, the final decision of the Supreme Court follow the vote of the report, we will have at least 4 more colleges to operate. We have 6 today. With [indiscernible], we will be 7. And with 4 extra, we would be with all the -- with good perspectives of growth despite the maturation of the units that we have today. So KrotonMed has very positive perspectives with what's coming ahead.
Now I will pass on the floor to Guilherme Melega to talk about the results of Vasta.
[Interpreted] Thank you, Roberto. Starting with Slide 14 in the net revenue. We finished the fourth quarter with BRL 554 million in net revenue of about 10% of growth. A positive highlight in the acknowledgment of 16% of the -- for '24. The year revenue was BRL 1.486 billion, that is 18% growth compared to '22. And here not only with the performance of growing [ SUV ], but also with the contribution of [indiscernible] with 81 million technology in '23. Now going to the details of the revenue. I will focus on the quarter that is the opening of the commercial cycle '24. So we acknowledge 16% growth in enrollment, reaching BRL 515 million and we emphasize the focus here is 42% in Complementary Solutions, the demand of social emotional will increase or the commuting part, are quite strong, the scenario is quite promising. And we still have a penetration base within the school with this system in a very good way of about 10% of our schools have bought Complementary Solutions. So this is the growth pathway that is quite significant for us.
Now going to Page 16, talking a little about costs and expenses. Here, focusing on the quarter, the fourth quarter, our total cost of C&D had a gain for the total period of 2.2 point percentage, which shows to us that the pressure of paper and [ drinking ] houses is behind. So we have a fourth quarter with a level lower of this improved.
Another highlight is on the operational expenses and we [indiscernible] expenses that we have, we 3.2 points of productivity. And here, it was a huge effort to unify the growth, to deal with automation improvement of process. Thinking about our clients and the benefits are here with the fourth quarter with the improvement of operational expense.
This new improvement and greater investment in marketing expenses and sales, which was expected for '24 as well, real progress on that with investments through our growth despite having [indiscernible] business that we are also getting in marketing that is our business of advertising charging discipline. But where the total cost and expenses in the quarter with a 2.6 point percentage. So our revenue in the fourth quarter increased 10% [ than the first ], 5.2%.
The result of that is in Slide 17, in our EBITDA. With the revenue growing and not at the same speed now as the margin in the fourth quarter went from 39.3% to 42.3%. So 3 point percent of improvement in margin, as Roberto mentioned in the beginning. We've made our [ CEO mark ] within EBITDA was also better than [indiscernible], overcoming our initial declaration with a margin growth of 27.3% going to 28%.
Another positive highlight was the EBITDA that we are delivering, the recurring reached BRL 417 million with a growth of 20.8%, result of the revenue of the new businesses and the control on the cost efficiency in a very significant way. Now I'd like to talk about the academic results on Page 18, so our [indiscernible] book is focused on the premium school and what makes it being premium is that [indiscernible] results of the students. So here, we selected globally as our main brand and [indiscernible] are the results also go through other brands that we have. But I'll focus on all the [indiscernible] without the approval of [indiscernible] with more than 6,000 national approvals. And despite the rankings are first, second and third, but if I [indiscernible] communicate [indiscernible] of the first one, I would like to emphasize that now they're even hundreds of students that we have in the main courses of engineering, medicine and [indiscernible]. So all the students have access, not only to the best university but to the career they chose.
And we see a [indiscernible] company that is the core of our results. I will emphasize that [indiscernible] are the 2 main universities in Latin America in the main ranking. And Anglo is an absolute leader in these student focuses since 1976 when [indiscernible] was created. And in 1918, when the Unicamp [SATs] was created to take the best [indiscernible].
That Anglo had more than 1/3 of the [ taught ] Unicamp and 45% in USP. So back then, the result was wonderful in the most demanded courses of the country. And all the mentioned courses like [indiscernible] and [indiscernible] growing result with 74 students at the [indiscernible] university and 61 students in medicine.
We emphasize that because this is the core of our business, reputation real enforcement in our business which makes the partnership with our schools being better and better so we deliver good results. The students are good business to the group and the result of that is a good result for our shareholders. Now going to Anglo Start on Page 19, I would like to emphasize that we launched our network of bilingual franchise focusing high performance based on Anglo brand. And we have 3 units in operation, one in São José do Rio Preto with more than 300 students. That is our initial flagship. [indiscernible] on 10,000 units. The second one, our first franchisee is Alphaville. It's part of the year overturning our expectations. We expected 120 students. We have more than 173 in Alphaville. And as we communicated, Liceu Pasteur, that is quite a traditional institution that is more than 100 years old in Sao Paulo that will launch in the Start-Anglo of next year and this school has the potential of having more than 1,000 students. I will also emphasize the prospects from our franchisees of Start-Anglo that we have 15 contracts signed, 64 (sic) [ 54 ] are under negotiation, and we are quite happy with the launch of this growth that is quite close to our core business. So we believe that will have a low risk in execution with high value to be created. Lastly, I emphasize our satisfaction with the results in '23, with the revenue growing [ 80% ], EBITDA 20%, cash flow 112%, the margin above 30% and truly for the growth that are a reality that is Anglo-Start and B2G. With that, I'll open the floor to Fred, to talk about Saber.
[Interpreted] Thanks, Melega. Good morning, everyone. As my presentation on Saber, reminding you that Saber comprises our business of the Manaus and of [indiscernible] both Red Balloon and other business.
I will start on Slide 21, talking about the financial highlights, the financial indicators of net revenue and EBITDA. The net revenue of Saber grew to BRL 808 million. It grew in the year 58% and in the third quarter, a growth of 59.4%.
And what were the main indicators of growth? We grew in national program of adult book, 62% and other services, that is selling our program accessible to [indiscernible] that we provide the direct materials to the students and we grew 102%. Now considering EBITDA, our recurring EBITDA grew in the quarter 65% and in the year, we grew 75%, reaching an EBITDA of BRL 175.2 million. I emphasize that we disclosed in our financial relations in the release, the sale of the business of printed books. And these sales have a result of reversed in the amount of value of the company which is positive. Now talking about Cogna and Roberto mentioned [indiscernible] and now just an overview of Cogna with the financial indicators for the net revenue and the recurring EBITDA. In the first half, we have the foreign accumulated with growth in most revenue in the fourth quarter of 12.6%. And in the year a growth that reached almost 16%. We reached the net revenue of BRL 5.9 billion. That was motivated by the growth in revenue in all our business units, both whether Kroton, Vasta or Saber as I mentioned before. And the recurrent EBITDA and margin EBITDA, we had a growth of 17.1% in recurring EBITDA in the fourth quarter as Roberto mentioned before. It represents the 11th consecutive quarter of growth. And in the accumulated, we reached BRL 1.736 with a growth of almost 19% with a margin expansion of 0.7 point percent. Now going to Slide 24 and talking about the operational cash generation of the company. Remember that last year, we concluded the generation of operational cash with BRL 540 million. We had a growth in the year of 65.4%, ranking a generation of BRL 894 million. In the quarter, we had a cash generation of BRL 241 million with a growth of 282%. Now remember that our operational cash generation after CapEx and after debt services in the fourth quarter was BRL 148 million and in the year, we reached the cash flow of BRL 200 million. Now going to Slide 25, talking about the net profit, which was damaged here analyzing the fourth quarter and the year. We have a loss in the quarter. A net loss adjusted of BRL 289 million and the net profit from that of [ BRL 529 million ], net profit of [ BRL 483 million ]. Just remember during the fourth quarter, we had the loss on the [indiscernible] of the previous year. And the company adjusted that with the social organization [indiscernible] organization because we are now participating in Mais Médicos and participating in this program. We want incorporate it temporarily, so that's why we have the statement of income tax that doesn't have effect in the capital of the company. Now going to the leverage and debt. The main messages of the company is nothing different from what's happening in the [indiscernible]. So in the graph of the presentation, I show the fourth quarter of 2022 with our leverage and our net debt was [indiscernible] and now we reduced, so then we're at 1.83x. That reduced from the reports of the consolidation of the company towards the growth of revenue and the growth of EBITDA, generating real leverage that we can reach then in [indiscernible] that we reduced the net debt in about BRL 30 million in the fourth quarter 2023 compared to the third quarter.
And the company has a net cash flow and cash generation, so we don't need to have new capital in the year '24. This does not mean that we can't have a new [ platform ] that aiming at liability management. We understand that our [ pledge ] today is [ deeper ] and during the year of '24, we may have new [ captures ], but to prepay some more forms of debt, we would have cheaper debt to take longer on that. Now considering Slide 27, the company has a cash position in December 31st, '23 of BRL 1.794 billion, but gross debt of BRL 5.072 billion and a net debt of BRL 3.278 billion.
Showing here in the other graph, our amortization schedule -- but as I mentioned before, we have an availability in the cash and cash equivalents of BRL 1.794 billion. In '24, we have amortization of BRL 1.475 amortization. So our cash generation in '24 is more than enough for us to pay our debt with new -- no new captures. In '23, the company concluded many captures and as I mentioned before, they always aim to reduce the debt cost and at the same time enlarge period. With that, I think as the presentation of Cogna, by showing a strong generation and strong growth of revenue, strong growth of EBITDA. And as well as we are with the growth and operational cash generation reaching BRL 894 million, reducing the net debt. And in the future, we believe that with our improvement of our credit, we can have some capital to reduce even more our debt cost than as how it appears for that. With that, I finish the presentation and pass on the floor to Roberto Valério.
[Interpreted] Now going to Slide 28, talking about ESG. We are quite happy with the accomplishment of '23 and more than talking about the achievements that are mainly related to ESG, I would like to emphasize the 3 main informations here.
The first one is the acknowledgment that better than saying what we do, we're showing the acknowledgment that we have from many entities that are assessed and assess many companies and that's rated as very well. So I would like to emphasize ISEB3, and we are the only educational companies being in this index, and we participate in this index, and we improved our productive with many progressions of many indicators of the company. And we are also leaders in 4 ESG rankings and it's the second following years that we are part of the sustainability year of S&P, the only company in Latin America to be part of the yearbook. And we own the second global position in the sector.
And one important point is that besides that, the CDP, we have the position, then we are now B, graded B, the CDP, that goes from B minus to A, so we are progressing in an important way here. And we are very proud of having the Pro-Ethics Seal of CGU that shows the quality of our work, especially taking into account that we have many products that are sold to government and they are the B2B channel. We'll have the CEO of the unit control [indiscernible] with this acknowledgment is something that leaders will follow. And then I would like to emphasize in [ 2021 ] that we will open the 14th Cogna commitment for a better world with a series of initiatives that we have goals every year. We'd like to emphasize that we reached 131% of the target for '23. We didn't get to [indiscernible], but we have 43% of the targets before the deadline that is '25, and we included one new target that is to reduce in 50% the total emissions of the greenhouse gas until 2034, for the scopes 1, 2 and 3. And the third point I would like to emphasize is that we are quite proud to be the company with the SOMOS Institute to be the company to manage and keep working on the premium that is known as the best award of the basic education in Brazil that is [foreign language] that is an award coming from [indiscernible] foundation. That is now our responsibility with the SOMOS Institute just to keep this legacy and this important story to the Brazilian education.
Now in [ managed time award ], I think we have a lot of quality points. We have 6 strategic pillars here. The growth, we understand that will be a [indiscernible] regarding the business unit, and we also raise with what we call the lifelong learning. We have further from the future 100 years. We have our own products. And more and more, we have [indiscernible] that are developed in partnership with our organization that we can offer. So we now have the opportunity to explore this during the year. And in terms of experience, we have the client experience in the B2C, B2B and B2G. We have improvements in the U.S. of everything and we can see better [ schools ] and the graduation for [indiscernible] and also especially [indiscernible]. I mean everything that is [indiscernible] and everything that's faster is doing with the school. So we have got the path with them, the schools and basically, the creation will grow NPSs and better rates earning a lot by [ words ] and with experience of equities affecting the client experience in isolated ways so it's not only numbers in the company, so we have the numbers of external agents that are also very positive.
From the point of view of execution, here we are creating focuses, evolving with the systems, investing into [indiscernible] and we are the [indiscernible] AI, not only in the core in the product, but in all processes and in the execution [indiscernible] and we understand if we bring in future [indiscernible]. From the point of view of people and culture, we have 3 important pillars new to everyone. That is the mood, the feeling of being the owner and the team and the customer centricity of focusing on the student or the clients, this is very important to us. We have a solid group of the 70 partners that are executives and we have our shares of the company and we were awarded many times during the year. We evolved in the [indiscernible] as [indiscernible] and engagement of collaborators, we have grown assessment of the [ focus pillars ] like before. In innovation, we have a growth mindset that we repeat every day in the organization that is affording to Cogna the way we express to our employees that is in a concrete way focused on open innovation in contact with the startups and the innovation at the system besides the OpEx building initiatives that we have here with a good potential for growth to [indiscernible] of growth in our platform [indiscernible] that is the cooperation that is grown and we believe will bring a lot of results in the future. And in ESG, I mentioned the [indiscernible], we feel that commitment follows that, coupled with the fact I can then finish the presentation of Cogna and I reinforce that we are quite happy with [indiscernible] especially with the growth of cash generation. And for '24, we expect growth to the target and '24 to be a very good year. So now we are open for questions, and thank you.
[Interpreted] Now let's start the Q&A session. [Operator Instructions] Now let's go to the first question from Vinicius Figueiredo from Itaú BBA.
[Interpreted] And I would like to talk a little about the perspective of '24 because Roberto mentioned about the expectation of Cogna net revenue growing in 5 digits in '24, but then we're stable [indiscernible]. We have the [indiscernible] so we do not understand what emotion, so we can only clear this point, what would be the justification for this 5 digits? And making you that goes this point. If you can talk a little bit about what you saw in this quarter cycle and if you can mention a little about the expectation that growth in volume and ticket, whether in high or low promotion, it would be wonderful?
[Interpreted] Okay. Perfect. Thank you, Vinicius, for your question. Regarding the revenue growth, there are some aspects to bring a lot of [ questions ] to us regarding the first quarter and obviously, the whole year of '24. We have the cycle that is quite positive. We are growing with higher rates than what we'll have for both in the middle of the year and then the back end semester of '23. And regarding the first semester of '23, obviously, I can't give the specific numbers, but the capital is growing. So it grow above what we grew last year, and it grows in [indiscernible] the totality and in [ day 1 ] move in represents growing a little more. I think we have a series of [indiscernible] related to that and we think that maybe help with actions that we are taking at the moment.
But I also see better [indiscernible] to spend more money and we'll follow other sectors, and we see, for example, in retail, it's quite [indiscernible] seasonal [indiscernible] more. People with more can come buying more and I think it is also like in the end the capital towards [indiscernible] high essential course that are doubtless with a higher [indiscernible] ticket. So this the first point.
[indiscernible] that the revenue will grow by high digits is what I wanted to say because the capture is growing. And as I said, we have a better NPS level than the quality of the previous periods and live through the sort of [ barrier ] in terms of -- better in terms of processes. We see better reenrollment [indiscernible] that is not only better but more advanced compared to the previous year. So how do we measure that? We check those students and then reenroll them, we follow [indiscernible]. We see the [indiscernible] is reenrolling more or faster and [indiscernible], we are enrolling more and faster, which brings safety to us in the capture and in the reenrollment. And the third impact that has nothing to do with the revenue, but as we see that [indiscernible] despite controlling the [indiscernible] numbers, [ another plan ] is the beginning of the loss of students in the way they turn and we see that it's quite positive. Everything is all sold. So I don't see [indiscernible] grow in the portfolio during the year. So we are confident of that.
And your second question about the capture, I've answered. We are growing the high and the low ones.
[Interpreted] I'm sorry, Vinicius, I just wanted to mention that we didn't finish this [indiscernible] cycle. Obviously, we are in the end with 30 days, but just as he explained that this cycle not over yet, and we'll show that in the first quarter report.
[Interpreted] The next question's from Marcelo Santos from JPMorgan.
[Interpreted] I have two questions. The first question is if you can comment a little on how you see the competitive environment. I mean, you know from the [indiscernible], you talk a lot about that, but if you can talk about the ticket.
And the second question, I don't know if you can share but according to your legal advisers, what is the greatest probability of a result in agencies [indiscernible]? I know this is something that nobody knows, but what is your best understanding on that, if you can share?
[Interpreted] Marcelo, thank you for your question. Well, the first about the competition environment. I think that we've been talking about it and of course, I can understand the competitors, the peers. They are also talking about it, and I see a competition environment from the part of your [indiscernible] in a very stable way.
Of course, difference in cycles, I think that the competition for price and sale, something that was more rested in the 2 or 3 previous cycles, is not the same. I think it's still the same. So I don't see prices dropping aggressively. Obviously, all of us in the segments, we can deal with the inflation populating the difference, but if your question is if there is a concern regarding competitive prices to drive the prices below, we don't see that.
And the second question about mentioning the discussion in the Supreme, well if [indiscernible], we have [indiscernible] both but what we hear from our advisors is that [indiscernible], when we announce the history, most of the decisions follow the first vote of the [indiscernible] and so obviously, there are other elements. Nobody knows exactly that. But we understand that [indiscernible]'s vote, that is the one who have our [indiscernible] operating that would allow us to go on with that, the vote that we believe. But based on that, on what I said, due to the history of decisions.
[Interpreted] Our next question from Lucas Nagano from Morgan Stanley.
[Interpreted] I have two questions. The first one is regarding the total margin for '24. Because you mentioned the revenue, we would like to understand what are the [ leverages ] for the margin. I mean, the [ beginning ] of the gross margin, they progressed a lot, but now they are stable, so we would like to know if there is a certain level of the investment in our case. And I think we will mention something, but we'll keep it at high level of '24. But will it expand or get stable? And the second question is regarding the tax in the fourth quarter. This was -- I'd like to understand if there was both [indiscernible] you can [indiscernible]. That is not going to [indiscernible] some of the efficiencies. So would you quantify this value? Can you talk a little bit more about it?
[Interpreted] Lucas, thank you for your question regarding the cost of margins. I would say that the gross margin is a line that we have improvement, especially with the fact that we always describe the year that [indiscernible]. So we understand that as the revenue grows with the [ stock book ] that I have, that it will be speeding up in the first and second quarters. It brings more revenue with the costs incremented that are very low, so we can gain on margin, and this is an effect that I see that will be long lasting. I wouldn't say that it's forever because long lasting because if we keep the revenue with this growth, we'll gain gross margin. This is the first point. The second point, I think we still have [indiscernible] being quite positive and 44 days for receivables is quite a healthy number, but we still have space. Some segments only improve, but we are [indiscernible] in the capture and the [indiscernible] to improve little by little but mainly in the corporate and operational expenses.
As the revenue grows, and we have other business contributing to the operational and corporate costs, we can dilute these costs. I would say that the only part of attention to press for a little our modules can be more concentrated in one part than another, but the marketing expenses that I have inflated in the fourth quarter of '23 and the first quarter of '24, that we want to [ give out ] the capital, and we want to go on in the consolidation of [indiscernible], so we need to remember that this is a business decision.
We are involved in more than marketing because we believe that we can have a low growth, and we can strengthen our brand in the long term bringing value. That is different from having a cost that is a cost simply to operate. No, this is a cost to grow. So aside from this marketing [ core ], we'll keep doing what we've been doing in the last 3 years, being consistent, gain on efficiency with AI applications and automation that we can have to gain on efficiencies, so it's a little every day, a little [ alt ] forever, and we will do that. And now I'll pass on the floor to Fred for him to talk about the OpEx part.
[Interpreted] Well, this is Fred here. Thank you for your question. The question about the -- our tax account, income tax, and we did this adjustment in the tax due to the fiscal loss of the previous years because we were compensating that with the preparations to be done in '24 with the [indiscernible] plan of corporate numbers incorporated, that is to compensate the factors with the profits that we [indiscernible]. So to some of the corporate numbers, we participated with the program [indiscernible]. And as we are participating, we can have this population. In the future, how do I understand that? Well, in the future, after the participation in [indiscernible], then we have some time effect according to the rules. But in the future, I could recreate, recover this tax with the company incorporation. So those will be positive, but not for '24. In '24, as we are participating in [indiscernible], we can't do that.
[Interpreted] Our next question comes from [ Rafael Bahuse ] from [ Equity ].
[Interpreted] so I'd like to ask two brief questions here. The first one about Kroton. I'd like you to tell us -- give us an idea about the capacity use Kroton is running. So we would like to understand the level of vacancy that we have.
And the second question that has to do with that is that you mentioned briefly about the potential negotiations of rent and so on. And I'd like to understand how you think we should start seeing the effect of these negotiations and potential with [indiscernible] in the payment of rental and the numbers of the company. If it is something that we will only see next year or maybe we can see something this year? So that's it.
[Interpreted] Rafael, Fred here. With the 2 questions about the Kroton capacity. Today, we are analyzing vacancy, so we are having about 40% to 50%, so we see here that we have [indiscernible] which makes us happy that is the capture of high potentiality as Roberto mentioned in the cycle that is positive. And if we repeat that in the next IPOs, we will be able to gain from operational leverage in our business.
The second question about the rental is that, it's an important topic to us because given this vacancy, as I mentioned before, we are in the process -- on a continuous process of renegotiating our rent and you're naturally seeing the next 2 years in '24 and '25, the effect that it will be lower like benefit of about the units of million or 1 unit of tens of millions but in '26, we'll [ foresee ] benefit of the tens of millions of reais with the renegotiation of the contracts, which shows this type for that because net cash, that will be lower in '24 and in '25, but we captured a little of this benefit in '23, but the strongest one will appear in '26.
[Interpreted] The next question from Leandro Bastos from Citi.
[Interpreted] I have two questions as well. The first about the B2G of Vasta. There was no contribution you mentioned coming in [indiscernible] for one. And I would like to know your perspective for the year. And the second question is regarding the guidance and cash generation that we discussed here. So [ what here ] is taking this new opening of the cash generation after the service? If you can tell a little about the liability measures that we have in the company, how much this one day should revert after the start of the year?
[Interpreted] Leandro, it's Guilherme here. Start talking about the B2G from Vasta. So the B2G investment in fourth quarter has no acknowledgment as we expected. But in the fourth -- but as of the first quarter '24, we will have acknowledgment of B2G. The contract that we had last year was renewed and will be performed in the fourth quarter. In the Cogna Day, we mentioned that we expected a growth of about 20%, and we are still waiting for this growth. But now we are much more certain because the contract was renewed so we consider this growth with established baselines.
And the perspective was quite positive. I can tell you that we have many [ heated ] network, I would say that more than half of the [ state ] in our countries have discussions ongoing and we hope to have a news soon about the B2G, but this is a big measure for faster growth. Now I'll pass on the floor to [indiscernible].
Leandro, thank you for your question. Now talking a little about that, the numbers are here to show the scenario. We have the cash generation -- operational cash generation that was good, our payment and interest was BRL 695 million, so a reduction of minus BRL 200 million, and it's important to show that this number is the financial result of the company in the year '23, minus the [indiscernible] that was in the operational cash.
Now looking forward and analyzing '24, what happened is that we have more cash generation. I have revenue growth and EBITDA growth, so we have more operational cash generation. Additionally, the financial result in EBITDA with this operational cash will naturally reduce my net debt and additionally, I have a reduction in the interest rate for like I consider the average interest in '23 and compared to '24, it will be different. So generally, thinking immediately in '23, in end of the year greater than 11 and the expectation today is having [indiscernible] finishing this year close to BRL 9 million or BRL 10 million. So with that, and actually delivered the company, so the cost of that is about [indiscernible] plus 2. The average duration of the debt is 25 months because we believe that with our improvement in credit, we'll be able to reduce the capital cost. So I can take longer with the debt, depending earlier today cannot with this visibility to us, but my [indiscernible] and proposal that we have is much better than our costs.
So we are quite comfortable in the fact with the scenario of reducing and growing the revenue and EBITDA and at the same time, reducing the expenses, the financial expenses. And as I mentioned before, naturally, it's low [indiscernible] in the rent amount. That is also in our cash.
[Interpreted] The next question is from Samuel Alves from BTG Pactual.
[Interpreted] I have two questions. The first one about the [indiscernible] for '24. So should we expect one more high-powered purchase for [indiscernible]? In other words, we are trying to understand if the company expects a greater or lower revenue than '23 in departments?
And the second question is about the EBITDA guidance because on the last slide of the presentation where you mentioned the guidance of BRL 2 billion for '24 [indiscernible]? If the [indiscernible] from 2.1 to 2.4 is still valid as you mentioned on the [indiscernible]? Or if you believe that that still is guidance at this moment would [ find ] at the lower band at this moment?
[Interpreted] Samuel, Fred here. I'll answer the both questions about [indiscernible] and how the EBITDA would be. So it's important to all go through numbers that we have on that day and we also have the guidance for '24 with the EBITDA of [indiscernible] that was the lower margin of BRL 200 million and in the upper part, BRL 230 million. So we will reaffirm that we're doing this interval, it is what we'll deliver, and to deliver that is something which relates to our guidance here that we also have with EBITDA in the [indiscernible] from 2.1 to 2.4.
And I'll pass over to Roberto to talk a little bit more about it.
[Interpreted] So [indiscernible] is answered, we had more of that in the Cogna Day and regarding the EBITDA, I think we still see a range from 2.1 to 2.4. We gave this range because obviously, there are many projects ongoing and I think here the 2.4 is possible by challenging more than 2.1, but analyzing our history of growth, we believe that it is possible to be reached. So we had a good guidance to be more conservative for you, not that we don't believe in that. We believe it's possible to deliver more than 2.1.
[Interpreted] The next question comes from [ Morela Rodriguez ] from Bank of America.
[Interpreted] I have two questions. The first is the receivables. [indiscernible] with approval that decline of the startup of the company [indiscernible] are better [indiscernible]. Do you believe the new level of the receivables are sustainable in the long term?
And secondly, a follow-up regarding the law and if you can tell us something that would happen if it's not approved, this [indiscernible] is an investment that was made and can be reverted?
[Interpreted] [ Morela ], so I'll answer the first question arising for the [indiscernible], you have a growth of about 50%. Now receivables, comparing the [indiscernible] have a growth of about 4%. So, in fact, we think that it's little in terms of number of what we will provide to you, but the receivables grow less. So we plan in the results of this year will be or the maintenance of this will being on the [indiscernible] operational cash generated. So we believe that with our strategy of bringing the students, we don't have [indiscernible] strategy is sustainable and it was sustainable during the year '23. In the end, that '22, we will always have the direct [indiscernible], '23, during the same in-year, we have the same direction and there is no [indiscernible] big difference because the debt has been [indiscernible] to students [indiscernible], so it's [indiscernible].
Regarding the second question, I will hand the floor to Roberto Valério.
[Interpreted] Thank you, Fred. [ Morela ] in regards to the question on the [indiscernible] scope, winning an intelligence project and first, the first information is important. The floor [indiscernible] are demanding we'll request them. In [indiscernible], we already have operated and in [indiscernible] where we'll have an operational campus and units that we will try to [indiscernible] regarding the growth rate. So they are not units that will open [indiscernible] something or somehow we have to close it because we have [indiscernible]. So that's a point that's encouraging for us. And for [indiscernible] course being authorized in 4 units that are quite possible, on that we have perspective on our being there for many years, so the physical [ spend ] [indiscernible] we can use to mature the other quarters. And remember there's a potential for us in certain [indiscernible]. They don't [indiscernible] units with high rates of growth and with the main focus with growth involve the number of the group or we can move to the state and equipment that was [indiscernible], it can be used in the [indiscernible] environment reinforces that are still on the [indiscernible] that is now coming [indiscernible] semester. So obviously, they use not 100%, but we have a lot of energy and opportunity of use. We don't need the write-off of this kind of investment that we made.
[Interpreted] Now I'll end the Q&A session. We now pass on the floor for the final considerations of the company.
[Interpreted] Well, thank you all for the participation in this call. We reinforce our commitment to the growth and [indiscernible] and I would like to thank the whole Cogna team. We have a team of employees that help us every day, [indiscernible] to the whole country, and that is making our future better. Obviously, we are available [indiscernible]. We are here. Thank you, all. Have a nice day.
[Interpreted] The teleconference and the results of the fourth quarter of Cogna Educação is over. [indiscernible] with investors is here to answer any further questions. Thank you, and have a nice afternoon.