Vitru Limited (VTRU) Q4 2021 Earnings Call Transcript

Vitru Limited (VTRU 1.86%)
Q4 2021 Earnings Call
Mar 10, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good evening, ladies and gentlemen. Welcome to Vitru's fourth quarter and full-year 2021 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 we would like to introduce your host for today's conference call, Mr. Carlos Freitas, Vitru's CFO. You may begin.

Carlos Freitas -- Chief Financial Officer

Thank you, [Inaudible]. And good afternoon, everyone. Thanks for joining us again. It's a pleasure to be here with you-all for the release of the fourth quarter '21 numbers as well as the numbers for the full-year of '21.

A slide presentation will be part of today's webcast, which is also available in our investor relations website at investors.vitru.com.vr. As well you all have the presentation in front of you. And as usual, before we begin, I'd like to remind you that, as you see it in Slide 2 and 3 of this presentation, Safe Harbor is in effect for this call. From now, I invite you to go to Page 5.

Here on Page 5 we have the main highlights for last year and the fourth quarter of last year. The first one, which is not news, was the announcement of the combination with Unicesumar, which is, as you know, a leading institution here in Brazil with the highest quality indicator in the high education sector in the country, besides a very sizable business in medicine. This transaction is, as we know, still being developed by the [Inaudible] authority in Brazil. And I'm going to show again to you some number of Unicesumar in a few minutes.

Second remarks, which also not new, is the Nursing course that we launched in August of last year. And just after a couple of months, it quickly became -- I remember one course in the intake of the second semester of last year, which didn't forecast by owner of the expansion of the [Inaudible] with all growth as a tool to sustain tickets and improved tickets overtime. Third highlight is that we reached at the end of last year nearly 360,000 digital education students, most of it in our core digital, which is under graduation. And these are the piecing in which we had an increase of 27% in the intake of the second semester of last year and by 32% increase in the first semester of last year.

And it's very important growth as well in the Southeast region where we grew around 45% year on year between December of '21 and December of '20. Going to Page 6, the -- among the important remarks is the average ticket. I cannot repeat myself just to say that we have a different business and we have been able to sustain and improve tickets overtime given that we sell a different products than the markets. Our other tickets in our core business, again, at digital education, under graduation increased by around 60% in the second semester of last year when compared to the second semester of '20, and now it's reached R$278 per month.

This is a remarkable achievement. We have already said that we have a disciplined approach to tickets. We're going to have to grow, just for ticket growing, but we want a growth sustained and improved tickets. And by the way, this was not only the [Inaudible] of Nursing, and Nursing is a premium course in which -- that every ticket is way higher than our normal traditional course.

Without Nursing, the increase in ticket would have been around 5%. So the increase as a whole year in the ticket is in function of our continuous efforts to sustain and to maintain a different approach to tickets. Regarding financial, our numbers net revenue in our core business increased by 26% last year and consolidated net revenue increased by 22%. Adjusted EBITDA increased by 24% last year with a slight increase in margins as well, adjusted EBITDA margin, now reaching almost 29%.

And finally, regarding cash flow from operations, we had a 137 million reais last year, increasing structure within 20, with a nice cash conversion ratio of around 83%. And on Page 7 before we defer each of the numbers out of the year, just a reminder of what we have been doing since the IPO. We said at the time that we will go to -- we'll grow four growth avenues, three organic, and one inorganic. We have been [Inaudible], we have been delivering what you throw us.

Now, the first one was a ramp up of current host, which now represents around two pairs of expansion hubs and student base, and more than 91% of our overall portfolio of hubs [Inaudible] ramping up, which means in forbearance, growth driver, will lead us education risk. We -- And I said we grew 265,000 students as a whole. We opened as well around 240 hubs, 20, 30 hubs last year, of which almost 100 hubs in the Southeast, and of which 50 hubs in the state of [Inaudible]. And we said a few times that we feel a bit shy -- we were feel a bit shy in the Southeast.

And that's why the most important organic region for us is the focus and that we are -- we've been focusing and we're bringing up there in the states in the SouthEast. Third one would be course offering. I said the right about Nursing. And soon we will have Psychology and Law.

Law will also come to digital education. That will happen hopefully soon. And once it happens will be, again, changing movements for the whole industry. And fourth, inorganic about the transaction with Unicesumar that I mentioned on two times already, which is appeared now on page 8, just as a reminder to the [Inaudible] company institution would assign.

More or less to remember one of that we have, with here are the numbers for the second quarter. I'll start in 21, which are the latest [Inaudible] we show to the markets in a couple of weeks we're going to release to you. The number also the [Inaudible] in '21 as a whole. But so far what you have here are, remember, folks, second quarter of last year.

So 40% of adjusted EBITDA margin is very nice business in [Inaudible]. They are the fifth best education institutions connecting in Brazil, most represents around 25% of the revenues of Unicesumar. And we have, as I said before, the best quality indicator when you see the digital education business [Inaudible]. On Page 9 it's important to highlight and to emphasize that we are going to maintain both rents because they detect different markets.

And also they important synergy -- commercial synergies will be starter here. Currently there are around 600 cities in which you have only [Inaudible] of Unicesumar than not from the [Inaudible] or vice versa. And on here, on the right, these are the numbers for the market share and the growth in the market as a whole, which do not yet reflect the new numbers that were released by the Ministry of Education as two weeks ago. With the first number of 2020 census, here you have only the numbers between 16 and 19, and this is because we're still waiting for the micro data to remain available by the Ministry of Education.

But according to the first numbers that were released, the combined market shares of UNIASSELVI and Unicesumar reached 20%. It was 10% -- 10.5% in 2016, growing over time, so we have the need to grow faster than our markets and to gain market share with it. We had 18.5%. Not sure according to the fact of the MEK, being some in '19, and now we have around 20% of the [Inaudible] additional efficient market.

So we gained market share in function of the differentiation aspect of both institutions, which is here on Page 10. Just a quick reminder that we offer our typical hybrid academic model, while Unicesumar offered a hub based, 100% online model. And we have a different group, that's why we have been able to grow faster than the market. And finally, on Page 11, before we jump each into the financial, both here is the [Inaudible] by the client, by the market.

On the left, the [Inaudible] that we have of our apps -- the app of [Inaudible] -- app of Cesumar. This is the -- was the average between Playstore and Google -- and Apple store. We've app for events [Inaudible] we're the highest number of eligible player in tech. And if you hear that, we have the highest rate in the industry, more than the maximum five.

So we have 4.4 and Unicesumar has 4.7. So this confirms the tech-driven approach that we have to education. And by the way, our app now represents around 60% of our enrollment. And this is something that we start to offer more or less six -- eight months ago.

And now it's represent the run for 6% of the -- of our intake cycle through our app. So it's a totally different experience for the newcomers. On the right, the -- with education index with [Inaudible] in which we have 7.6 to the mark 8.2, which are, again, the highest number among the digital players in Brazil. Jumping to Page 12 said before [Inaudible] offered with sustain ticket with Nursing and we will be able to do so even further with Law and Psychology once it's approved by the [Inaudible] patient, which you hope to pick face soon.

On Page 13, as I said, we have now around 260,000 students in digital education through 5,000 in total, including the 6,000 we have in on-campus courses. In the chart, you have on the right, the deletion of decent cases to this undergraduation. And by the way, this has been purely on an organic basis, as you all know. So we grew 18% year on year, which is an impressive achievement given the tough [Inaudible] of 2020.

As a reminder, we had a 40% increase in intake in the second semester of 2020, so the bar was already quite high here. Page 14, as I said, we had an increase in intake last year of 27% in second semester and 32% in the first semester of around 30% increase in intake last year. And the pie charts show the breakdown of the intake both in '20 and '21. So here there are a number of points to bear in mind.

First one is the reduction in the black part here of the pie, which is vocational. Vocational, it means [Foreign Language] which are shorter courses, courses that has -- that take -- has a duration of two years to 2.5 year. So they were 36% of increase now, and they're are actually 2% of increase. And most important is the increase in premium courses.

I mean health-related courses and Engineering, which have a higher ticket. The average ticket of an Engineering or health courses such as Nursing and Nutrition, Biomed students, that's -- Physical Education, is a bit higher than -- a bit more than 400 reais per month, which is more or less 50% higher than what we have in our average tickets. So when -- if you hear the intake of the premium courses, it was 23% of 2020 and 4% in June in 19% of health courses. And now, our last year, they grew to 32% of intake.

But those courses, they few represent only around 20 something, 22, 23% off their [Inaudible] last year. They were 32% of the intake, but still they are a bit more than 20% only of the whole base of last year. So the trend is that premium courses will represent a higher and higher share of our base, which will be an important driver to sustain even more our tickets and our [Inaudible]. On Page 15, the breakdown of our growth in our [Inaudible] education on the red throughout the country.

So we grew 80% year on year for the whole country, including 10% in the South, which is our income. Around 36% in the Central West, important growth there. Around 15% in the North and Northeast. And as I said before, 45% in the Southeast.

And on the right, you see the breakdown of the number of hubs per region. This is new information, so you can see the evolution of the hub base throughout the country in the last four years. And now, for the first time, the Southeast region represents the biggest region in terms of hubs, we had increase of 61% in the number of hubs in the Southeast which now has 235 hubs out of the 939 that we have in whole country. So this is again, an important growth driver for the future, which is here on Page 16.

We have intensified the presence in the Southeast which represents 40% of the whole markets in the country. As I said, 61% growth in hubs, 45% growth in similar base there. And the -- when you see the whole intake in numbers, the Southeast was 9 -- 8% in '19 and then grew to 17% in '20 and then 19% in '21 of the whole intake. But we are increasing our footprint in the Southeast.

On Page 17, our famous [Inaudible] with the evolution of the human based per cohort meaning that a cohort is the member of hub that we're open in a given year. So we keep including and we keep it materially. Our hub-based, and as I said, this is important driver with limited education risks because the hub is there, the [Inaudible] is there, the UNIASSELVI brands is there, and word of mouth is working in our favor, so we keep increasing our maturation of hubs. And today, theoretical maturation index of the overall portfolio of hubs is around 33%, but it is important to highlight that index takes into account all dissipation hubs.

So when we opened several hubs at the same time, we had a dilution effects of this index. And effectively even end up with the lower index. For example, if we take only this further in 18 cohorts, the maturation index of these hubs increased from 36% in December 19 to 50% in December 20 and now to 60% in December 2021. So we will keep increasing the maturation of our hubs.

On Page 18, I suggest the Southern key financials, for net revenue [Inaudible] growing by around 22% on a consolidated basis. Gross profits, included 31% in the whole year, reaching a gross margin of around 62%, an increase of 4.5 points between 2020 and '21. And then I'm going to go back to show the [Inaudible]. And adjusted EBITDA growing at a 24%, reaching a margin of 28.9% in the year.

On Page 19 you see here on the left that for example, the digital education undergraduate net revenue grew at 26% in the year, driven by the expansion of the student base, but also by the expansion of tickets. And here are the numbers. We -- like I said, we have now in the second semester of the last year 278 reais, which is around 6% higher than one year before, which was around 4% higher than one year before. So we keep increasing our [Inaudible] tickets because of the differentiation aspects of our product.

And again, as I said, this increase of 6%, 1% of it is Nursing, the other 5% even beat the overall portfolio, or that we had already before. And this effect is important. And the fact that every ticket of premium courses is around 400 reais per month, while -- so because we have 238 reais of every ticket, it means that the average ticket of the traditional quarter is around 204, 231 reais per month. So as I said before, we expect the relative leaks of premium courses to keep increasing over time.

Not only because of the higher penetration of our current courses, such as Nursing, but also in the near future Psychology and Law. So just as an example -- so if we had for example 50-50 for 50% approval courses, which amounted to present them more than 20%, and 50% of traditional courses, our [Inaudible] ticket we would've had reached 320 reais, I mean, 440 premium, and 240 for the traditional, 320 on leverage. So there is still a lot of potential here to which -- for free tickets. And this not counting with inflation and any other effect, just on that mix effect, we still have a lot of space to increase tickets as we increase the relative weight of premium courses in our overall portfolio.

So on Page 20, the contribution of the other segments, first continuing education, grew by 29% last year, which is explained by the higher offerings and higher visual marketing that we increased last year. And -- but on the other hand, on campus, the [Inaudible] decrease of 60% on year-on-year basis, which is aligned to our vision that this is a business that will actually keep equipment a little bit more over time because we do believe that there is a trend, a computer trend, of migration of interest from on-campus to digital. For this '21 the net revenue was boosted by digital education segment, increased our 26% of these education undergrads [Inaudible] in graduation that will come in -- continue education, and a decrease of 50% in the max revenues of on-campus. So [Inaudible] the number is 22% for net revenue.

When we see above cost on Page 22, the cost of service decline from 42 -- 34.7% to 30.5% of revenues. It was because of overall optimization of personnel costs. And we grow further. We are able to more and more optimize the ratio between students per tutor.

It is a focus of growth. And also, of course, the natural gains of scale as we go further, we can dilute more and more fixed costs. On the right the G&A, G&A now represents only 8% of our net revenues, which is way lower than the competition, which shows our continued efforts to maintain a lean and agile sector, which reflecting in our culture. So we had a growth of around 8%, only of G&A costs last year -- G&A expenses last year.

On Page 23, on the right -- on the left, selling expenses grew by 34% with an increase [Inaudible] of the increase intakes, as we had last year. As I said, we had increased of around 30% last year. And the [Inaudible] 34% which means that the cash increase a little bit around 3% when fees -- that year-on-year comparison, I think it was a normal increase in the back of around 3% and also the growth of the hubs rose again, full last year. With as a reminder, the hub is important piece in our overall steady machine.

For now, as we resumed operation of the hubs. We have now resumed our operation of the hubs. So a deep will be also important to use the hubs in our steady machine further, throughout these year. On the right, the PDA, which is called net impairment losses on the famous PDA, it increased last year from 14.8 to 17.5 last year and visited something sort of the pandemic, and also because of the higher share of newcomers and new student thing.

As most other PDA is concentrated in new students coming from the first semester. And also because, again, the hubs were [Inaudible]. In our academic model, part of the experience is to meet your [Inaudible]. So when we lose this fee of the whole experience, it's part of the experience, we are not in our full potential of the overall experience.

For now, as we resume the physical encounter, the weekly meetings at the hubs, we expect the overall retention and PDA levels to go down this year. So I'll jump into Page 25, adjusted net income and cash flow. So adjusted net income declined 10% last year and the first reason was the high comparable base of 2020. In 2020 we recognized -- afford a full time before tax assets.

So [Inaudible] and also we gained 13 million reais just after our IPO, [Inaudible], which is part of our net income of 2020. Besides that, last year as you know, we had a huge increase in IPC in the [Inaudible] which went from 4.5% in 2020 to 30%, and most of our debt, in ITC, so we had a slight decrease of net earnings -- net results. In cash flow, we had an increase of 7% -- I'm sorry, 11% last year. The reason for this increase of only [Inaudible] 11% was, as I said, gained in FX of 13 million reais.

This is in IFRS sparked of the operational cash flow. So if we're not for this 13 reais gain in FX, our net income in '20 would have been around a 110 million reais, so we would have had the growth of a bit more than 20% in cash flow from operations which aligned to our growth in EBITDA. So again, a net -- a nice cash conversion ratio of 82%. So that was it that I had for now.

And now I'd like to open for questions.

Questions & Answers:

Operator

[Operator instructions]. Our first question comes from Victor Balta with Goldman Sachs. Your line is open. Victor, your line is open.

Victor Balta -- Goldman Sachs -- Analyst

Sorry. Good evening, everyone. Thanks for taking our questions. There are two questions from our side.

The first one would be on margin. Considering that the reopening of your hard is likely to increase some costs line in 2022, but also considering that your margin has been benefiting from operating your average and the efficiency initiatives, how much more do you see for further margin movement this year? And our second question would be much specific on the technology angle. You mentioned that you are mobile app [Inaudible] mobile app. What would you say are the key differentiating factors or futures of [Inaudible] asset differentiate it from [Inaudible]? Thank you.

Carlos Freitas -- Chief Financial Officer

Thanks for your question. First one about margins, I mean, we -- because we are really focused on these sort of patients and different from the other -- most other peers in the industry, we've even had actually huge savings in '21 and '20 because of our hubs flows are -- on campus hubs flows. We had some savings in hubs for example, but it's not that material when you compare it to a physical on-campus operation. We've had some paper as well but it's not that's a material because most of our business is around digital education.

So going forward, what we expect regarding margins, we should expect a declining in the cost of PDA going forward as I said, because of the whole hub being opened and then we being able to offer the full experience for newcomers. So this could be important driver for growth in margins, but it would, of course, depend on the overall economic situation. We do expect some gains in margins for this year. As we had talking in '21 and 2019, but this is going to be, let's say, not a big jump in margin, but a slight but continued growth in margins before the completion of the deal with Unicesumar.

Once we closed the deal with Unicesumar, then our margin will grow a lot because they have an overall margin that is higher than what we had. We had around 30% more or less and they had a margin around 40%. The second question, I had some problem hearing you, but if I got it correctly, you're asking about why our tech approach is different from competition. And I'll say because of the way we operate.

We have been focusing on digital learning and digital education for 15 years now. And different from some of the peers, we have digital education as the core difference of our institution for years now. And this reflects in the culture and this reflects in the way we see technology and the whole approach we have to technology and digital education as a whole. For the -- for example that I showed before we have already [Inaudible] of overall [Inaudible].

It was not a compliment. Something new. It's worth a read for some years, part of the whole student experience to have in my head. Now, left year one we've changed a lot to offer the enrollment to that, but the fact of having a nice add for a simple walk rate of the overall strategic vision and orientation.

When we're said before year now. So it is a function of focus and culture around technology.

Victor Balta -- Goldman Sachs -- Analyst

Very clear, thank you very much.

Carlos Freitas -- Chief Financial Officer

Thank you.

Operator

Our next question comes from Vinicius Figueiredo with Itau. Your line is open.

Vinicius Figueiredo -- Itau BBA -- Analyst

Good evening, guys. Thanks for taking my questions. First question is regarding the intake cycle of first half of 2022, you could please share any first impressions from the cycle? It will be great. And also, how should we expect the average price mainly for freshmen to behave? Works out also be amazing.

Second question, it would be regarding PGA. And you have a surge in this figure during this quarter, right? Is there any non-recurring event that explain this increase or any seasonality specific to the fourth quarter? And should we expect this number to normalize in the next quarters? Thanks.

Carlos Freitas -- Chief Financial Officer

Thanks, Vinicius. For your first question about intake and ticket now for the current cycle, we are still in the middle of the intake cycle. What we have seen so far is again a strong performance in the cycle. So so far, what we had when you compare the year-on-year numbers and in the intake we had until beginning of March of last year and intake of beginning of March this year, we are growing around mid-20s, around mid-20s growth year on year so far in intake, with an increasing ticket for the intake.

When you see the intake tickets that we had this year and last year, they are increasing. And increasing, again, not only because of Nursing, but increasing because we have a very disciplined approach to ticket as a whole. So, so far so good. We are growing the intake and we are growing as well other tickets.

Second question about PDA. Yes, you're right, we had an increase in PDA in the fourth quarter of last year, basically because we update our PDA curves on a yearly basis, at the end of the year. So last year, we -- in December we did it and we had the effect of the pandemic. So all of the invoices that were sent to students in 2020, for example, we usually have a write-off invoices after 12 months.

So our PDA curve increase over time, and after 12 months if this invoice is not paid, we had a record. And this record is used in the PDA curve. So what we had was an increase in the losses of the invoices that were issued in department training. But were weak enough in '21, weak after pandemic, especially those that were issued in March, April, and May of 2020 just after the pandemic.

That's why we have it was jumped in PDA in the fourth quarter. But it's too difficult to correct the number for the whole year of 2021. So the number for the whole year is the right number for the overall PDA of last year. So going forward, we should expect a slight decrease of this number for '22.

Vinicius Figueiredo -- Itau BBA -- Analyst

OK, great. Thanks.

Carlos Freitas -- Chief Financial Officer

[Inaudible]

Operator

Our next question comes from Mauricio Cepeda with Credit Suisse. Your line is open.

Mauricio Cepeda -- Credit Suisse -- Analyst

Hi, guys. Thanks for the time. So I have some questions. One related to take as I think, not only in the short-term [Inaudible] for this intake cycle, but in terms of trends in the market, I understand that the education groups in Brazil have noted that addition learning either is a growth avenue.

So what are the possibilities of kind of a price war in tickets going forward? How do you see that? Or if you see that the sector is a scale business, therefore, it should consolidate in the hands of few, therefore, it diminishes this kind of competition. My second question is about where growth is coming from now after the pandemic, if there was any reduction in the interest for this fully distributed courses and -- or if the new courses would be, let's say, the ones that will drive growth. And third question is about market share. If I remember correctly, at least in the third quarter, other groups, notably, it looks we're growing a little bit more year on year, if you feel that you are losing or gaining share in the distance learning market.

Thank you.

Carlos Freitas -- Chief Financial Officer

Let's start with the final one. I cannot comment on the overall market, but what we see is that we have been able to gain market share overtime. And we grew our intake this year -- last year. So maybe we are, I'd say, at this moment growing a bit last in market share than in the past.

But with I'm sure gaining market share than competition because what's happening is that the market is concentrating around fewer needs. As I said before, about the gain of [Inaudible] etc., With that, players are the ones who are gaining a share, not only ourselves, but I'm sure it helps in other areas. We disagree because we have actually more skill. We've been able to gain market share, stronger, smaller player to because it is a business off of scale.

So that is why I don't believe that we're losing market share when you compare to the whole markets. So the second question, what I do believe that the sector will tend to consolidate more, either organically, as I said, more and more, these are the players gaining share and other [Inaudible], or inorganically. The transaction that we announced to the market is one example. I ensure that there will be other transaction in the new term.

I still think that the secondary [Inaudible] in Brazil, given the need to have scale to offer a high quality product. And at the same time to make money. This is a high margin business, if you're talking scale. So I do believe that the second would stand to consolidate around fewer names going forward.

And the ticket between you figure the first one that you made. What we have been delivering over time, is that now, for a few years, is that we have been able to sustain tickets. We are including tickets over time, every tickets. Still not at the same level of inflation for we grew 6% now, based on what was 10%, but one year before we grew 4% into 4.5%, so more than the same.

So we have enabled to sustain tickets over time because of the differentiation aspects that we have. I do believe there is a different pitch on aspects here that you've gotten to bear in mind, that we offer a hybrid model with a tutor in the class, and we are the only player that is focused on this model which is [Inaudible] to create and to operate. But we know how to do it. We have been doing this and played with the game for the last 15 years, so that's why we have been able to not only gain much share, but also to sustain tickets going forward.

So when you look forward, I do believe that -- I don't believe that we're going to have a price war because it is a different scale, there will be fewer and fewer players. There was a price war in the beginning. In '17, for example, beginning of the new reality, when several players attempted to get into the game. But I do see now there is more and more a rational approach, and different approach to tickets, not only of our ourselves, but for the whole industry.

So I do believe that we have reached [Inaudible] floor in tickets for the online, the 100% online courses, which is not our case, our case have been able to increase the goods which is different from the competition because at the end of the different aspects that we offer a different works. And going forward, not only this will continue, but the relative weight of premium quarter will increase. We had, again 23% at 22% of the premium courses, but 32% of being peak. And it was 23% one year before for the transit debt, this will reach 32 very soon and probably 60% in a couple of years.

There will be a potent mix effective as well in tickets.

Mauricio Cepeda -- Credit Suisse -- Analyst

Perfect, so you would say that these new courses tend to be higher ticket in general? And these are the ones driving growth so it's a positive mix effect at the end?

Carlos Freitas -- Chief Financial Officer

Yes. There are two things, the positive mix effects. But also, the overall performance of the people on network comparison. So -- And I've said, we grew 6% the tickets.

The biggest gain we had in the health courses was Nursing. But if you take Nursing out of the equation, for example, we will have grown tickets by 5%, instead of 6%. So when you compare the apples-to-apples, we are growing really big, our tickets and besides that, there is a mix effect that will increase overtime. So going forward, our tickets tend to increase, as we have been seeing.

Mauricio Cepeda -- Credit Suisse -- Analyst

Very clear, very clear. Thank you.

Operator

[Operator instructions]. You may proceed with any web questions.

Carlos Freitas -- Chief Financial Officer

So the first question from Andrew [Inaudible]. Two questions. First one, what are you expecting for planning to intake cycle, do you we believe that it will prevent another round of strong growth estimates in Europe, the reduced intake leaving? Yes. As I said, we -- so far we are growing at around mid-20s growth year on year when you see the same purifying of this year compared to the first half -- the first intake of last year.

With a increase in ticket so the intake cycle is still far from finished but yet we have double-digit growth for the overall big cycle as we finished. Second question, you guys have been posting better fiscal dynamics than the rest of the industry, do you think that it's possible to maintain these growths in '22. How do you see competition on to-market? Yes. That's what I was aspiring to anticipate there.

We do believe that we're going to be able to sustain ticket going forward. And for the whole industry as a whole, I do believe that there will be fewer players, there's more concentration, and I don't believe in price war in the industry. So I do believe that we have reached a kind of a floor prices here. From [Inaudible] about [Inaudible] Brazil, the step-up closing date and enforceable remedies.

We don't expect any actually relevant remedies in gadgets. We don't have a huge overlap into the month. We do have some overlap in some cities, but they represent a very minor stage or share of our [Inaudible]. We don't expect any relevant revenue piece at all.

Everybody [Inaudible] we are confident that we'll be able to have growth in a couple of months. Let's see how [Inaudible]. But these are evolving OK, are doing fine, as expected, we do believe that we clearly have closing in a couple of months. Commercial synergies, we need some more.

Included some color on how to explore synergy [Inaudible] to expand the revenue. Yes, there will be actually a number of growth overlooking synergies there. The first one will be the faster expansion of hubs. As I showed before, today we have around 600 cities in which you have only one of the two brands.

So once we have closed the deal, we'll be able to accelerate the growth in the offering of both brands in these cities. The second one would be the increase in the portfolio of courses. Today we have [Inaudible] offers around a 150 undergrad courses, while [Inaudible] offer 100 courses in undergraduation. So with a few changes, we can improve and enhance, increase the portfolio of course on Unicesumar.

Third one, we will be as well cross-selling opportunities between undergraduation and graduation with both brands. So there are a lot of commercial synergies to ask for. Today we don't have any numbers because we cannot have actually commercial discussions between the two companies because of the [Inaudible] rules. But we will be able to have some rough numbers -- some big picture numbers turn out to you when we have the closing.

One left [Inaudible] from a year ago. Thank you for the question, [Inaudible]. So integration will take time. We are already preparing the integration, so we hired Bay consulting to help us in the preparation of integration.

This is going very, very well. We have a detailed plan for integration, because we do believe that we will be able to have a very smooth transition. Build a very nice culture, a culture oriented toward the customer and the students. And we'll have to to cooperate and to incorporate in an integrated manner.

So this will be -- of course, the full integration will be all the areas in all departments will take a couple of years. Especially when we see for example, the integration of the conference production, and some change that we've going to do there to have synergies over time. But I'm going to give more details about this integration timetable and numbers when we announce the closing. One rep referenced on prior year.

To give more color on the PDA expenses. How the PDA for Nursing compared to the current portfolio of our revenues and level PDA should expect in next couple of years. And PDA of Northeast still quiet interesting to know that we offer -- the first few page was less than six months ago in August -- September of last year. We don't have a clarity on that, but we'll see the overall PDA expenses for the year.

That said, we do expect a slight decrease this year, because on one hand we are still in the middle of the economic crisis. But on the other hand, we are going to -- and we are opening the hubs, so the full experience -- it will be able to be offered to the students. And the most important driver of PDA is the engagement of newcomers. I'd say that -- today, that the PDA ratio of newcomers is way higher than the PDA of seniors.

So if we are able to -- again, to open the hub as we are opening now, we are going to be able to offer the full package, the full academic experience, and people will have -- will meet colleagues and instituters. It is what we -- how we designed the product and the service. We have the weekly meetings at the hubs, so once it is reviewed this will be for sure -- because we have a new tech in retention rates and of course, [Inaudible]. Those are all the questions.

Are there any other questions live?

Operator

[Operator instructions]. There are no further questions. Mr. Freitas, please continue with any closing remarks.

Carlos Freitas -- Chief Financial Officer

Thank you all for being here. It was a pleasure. It was our first full year as a little company, but we are very proud of what we have been able to achieve and to deliver it to you. And we keep available for any further questions.

Thank you very much. Good night.

Operator

[Operator signoff]

Duration: 57 minutes

Call participants:

Carlos Freitas -- Chief Financial Officer

Victor Balta -- Goldman Sachs -- Analyst

Vinicius Figueiredo -- Itau BBA -- Analyst

Mauricio Cepeda -- Credit Suisse -- Analyst

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