Afya Limited Announces Third Quarter and Nine Months 2020 Financial Results Nasdaq:AFYA

Monitoring in Line to Meet 2H20 Steering
Expands Digital Well being Product Providing with Three Strategic Acquisitions

NOVA LIMA, Brazil and MINAS GERAIS, Brazil, Dec. 03, 2020 (GLOBE NEWSWIRE) — Afya Restricted (Nasdaq: AFYA) (“Afya” or the “Firm”), the main medical schooling group in Brazil, right this moment reported monetary and working outcomes for the three and nine-month intervals ended September 30, 2020 (third quarter 2020, 3Q20 and 9M20, respectively). Monetary outcomes are expressed in Brazilian Reais and are offered in accordance with Worldwide Monetary Reporting Requirements (IFRS).

Third Quarter 2020 Highlights

• Adjusted Internet Income in 3Q20, which incorporates the affect of R$3.9 million as a result of necessary non permanent reductions in tuition charges associated to COVID 19 on website courses restrictions, elevated 51.6% 12 months over 12 months (YoY) to R$313.Three million. Moreover, throughout the interval the Firm acknowledged beforehand deferred income of R$14.Four million associated to the postponement of on-site actions as a result of COVID-19 to 3Q20 that impacted first half outcomes. Adjusted Internet Income excluding UniRedentor, UniSL and PEBMED, grew 15.7%, reaching R$239.1 million.

• Adjusted EBITDA in 3Q20 elevated 63.3% YoY reaching R$149.Three million, benefitting from medical faculty maturation, profitable M&As execution and integration and the popularity of deferred income talked about above. Adjusted EBITDA margin of 47.6%, expanded 340 foundation factors (bps). Adjusted EBITDA excluding UniRedentor, UniSL and PEBMED grew 31.9% reaching R$ 120.6 million, with Adjusted EBITDA margin of 50.4%.
• Adjusted Internet Earnings in 3Q20 of R$101.2 million was 46.7% increased than 3Q19.

9 Months 2020 Highlights

• 9M20 Adjusted Internet Income of R$859.Eight million, up 62.3% YoY. Excluding UniRedentor, UniSL and PEBMED, 9M20 Adjusted Internet Income elevated 35.0% YoY reaching R$715.Zero million.
• Adjusted EBITDA via September 30, 2020 elevated 76.7% YoY reaching R$408.1 million, with Adjusted EBITDA margin of 47.5%, increasing 390 bps. Adjusted EBITDA excluding UniRedentor, UniSL and PEBMED elevated 54.4% YoY, reaching R$356.5 million, with Adjusted EBITDA margin of 49.9%.
• Adjusted Internet Earnings in 9M20 of R$307.Eight million was 98.2% increased than 9M19.
• Money conversion of 85.6% with a stable money place of R$1.1 billion at quarter-end.
• Whole medical college students elevated 49.8% YoY and working seats have been up 24.1%

Key Occasions within the Quarter:

• On the finish of July, closing of PEBMED acquisition, an internet and cellular app that gives content material and medical resolution purposes aiming a greater efficiency of the healthcare skilled, marking Afya’s entrance into the digital well being companies.
• On the finish of August, the acquisitions of FCMPB – Faculdade Ciências Médicas da Paraíba, including 157 medical seats, and FESAR – Faculdade de Ensino Superior da Amazônia Reunida, including 120 medical seats. Each transactions have been closed at first of November.

Subsequent Occasions within the Quarter:

• Entrance into a purchase order settlement for the acquisition of UNIFIPMoc and Fip Guanambi, within the states of Minas Gerais and Bahia, including one other 160 medical seats.
• Entrance into a purchase order settlement for the acquisition of iClinic – main apply administration software program for physicians in Brazil, increasing Afya’s end-to-end digital well being companies.
• Closing of MedPhone acquisition – the quantity two medical App in Brazil behind WhiteBook – a PEBMED firm.
• Authorization to function the undergraduate medication course in Santa Inês within the State of Maranhão, below Mais Médicos II program, including 50 medical seats.
• Mortgage with Banco Itaú Unibanco S.A. within the quantity of R$ 500 million adjusted by the CDI price plus an rate of interest of 1.62% per 12 months and is repayable in three installments in October 2022, April 2023 and October 2023.

Desk 1: Monetary Highlights
	For the three months interval ended September 30,											For the 9 months interval ended September 30,
(in thousand of R$)	2020		2020 Ex Uniredentor, UniSL and PEBMED		2019		% Chg		% Chg Ex Uniredentor, UniSL and PEBMED			2020		2020 Ex Uniredentor, UniSL and PEBMED		2019		% Chg		% Chg Ex Uniredentor, UniSL and PEBMED
(a) Internet Income (1)	309,410		236,413		206,713		49.7	%	14.4	%		855,925		712,224		529,784		61.6	%	34.4	%
(b) Adjusted Internet Income (1) (4)	313,324		239,147		206,713		51.6	%	15.7	%		859,839		714,958		529,784		62.3	%	35.0	%
(c) Professional forma Adjusted Internet Income (1) (2)	313,324		239,147		206,713		51.6	%	15.7	%		859,839		714,958		608,984		41.2	%	17.4	%
(d) Adjusted EBITDA (3)	149,270		120,624		91,424		63.3	%	31.9	%		408,066		356,490		230,915		76.7	%	54.4	%
(e) = (d)/(b) Adjusted EBITDA Margin (2)	47.6	%	50.4	%	44.2	%	340 bps		620 bps			47.5	%	49.9	%	43.6	%	390 bps		630 bps
(f) Professional forma Adjusted EBITDA (1) (2)	149,270		120,624		91,424		63.3	%	31.9	%		408,066		356,490		241,785		68.8	%	47.4	%
(g) = (e)/(c) Professional forma Adjusted EBITDA Margin (1) (2)	47.6	%	50.4	%	44.2	%	340 bps		620 bps			47.5	%	49.9	%	39.7	%	780 bps		1020 bps
(h) Adjusted Internet Earnings (3)	101,224		81,469		68,997		46.7	%	18.1	%		307,793		272,122		155,290		98.2	%	75.2	%
1. Because of the interruption of pratical courses throughout the pandemic R$ 14.Four million of 1H2020 income was acknowledged in 3Q2020.
2. Contains the pro-forma outcomes of Medcel, IPEMED and FASA, as if the acquisition had been consummated on January 1, 2019.
3. See extra data on “Non-GAAP Monetary Measures” (Merchandise 7).
4. Contains necessary reductions in tuition charges granted by state decrees and particular person and collective authorized proceedings due COVID 19 on website courses restriction.

Message from Administration

Virgilio Gibbon, Afya’s CEO, acknowledged:

“I hope that you simply and your households are persevering with to remain protected and wholesome. Though we’re nonetheless within the midst of a pandemic, we now have been capable of efficiently adapt to and navigate via the COVID associated challenges and proceed to ship stable monetary outcomes. Our efficiency this quarter displays the resilience of our college students, school and group members. From the beginning of this pandemic, we needed to adapt with the velocity and agility wanted to remain centered on offering the high-quality instructional expertise that our college students had come to anticipate from us whereas on the similar time executing on our long-term strategic plan. Through the quarter, we strategically enhanced our enterprise and accomplished a number of acquisitions to assist our platform for future progress and to solidify our market place.

I’m happy to report third quarter outcomes, which have been consistent with expectations and the steering we had offered. Earlier within the 12 months, we had pivoted to leverage our on-line and digital know-how capabilities and alter choices for the Brazilian medical ecosystem. I’m happy that throughout the previous quarter, throughout our medical colleges, on website medical courses are again. In flip, we have been capable of ship H1 postponed courses and acknowledge the deferred income within the quarter. Moreover, our medical faculty maturation, profitable integrations and execution, contributed to a 63% 12 months over 12 months enhance in Adjusted EBITDA. Our liquidity was one other spotlight with a robust steadiness sheet to assist acquisitions. We ended the quarter with R$1.1 billion in money.

Even throughout difficult occasions, we have been capable of execute our technique. We acquired FCMPB and FESAR including 277 medical seats throughout the quarter. Afya’s complete medical college students reached 9,567, a 50% enhance over the identical interval of the prior 12 months, with working seats rising 24% and accepted seats 19% increased. Subsequent to quarter-end we introduced the acquisition of UNIFIPMoc and Fip Guanambi, situated within the states of Minas Gerais and Bahia, including one other 160 medical seats and placing us at 85% of our IPO three-year objective of 1,00Zero seats because of the Eight acquisitions completed since we change into public final 12 months. Importantly, our group continues to do a tremendous job in integrating the acquired firms and producing synergies. The medical faculty trade stays extremely fragmented, and we consider that the present setting is hastening the traits that favor bigger, higher capitalized firms. In flip, we now have been very lively in latest months with buying firms, pipeline growth and proceed to have interaction with various enticing targets in our core markets.

On the similar time, we stay dedicated to delivering innovation to our college students, physicians and different well being care professionals. COVID-19 has considerably accelerated demand for on-line/digital options and has sped up our methods as nicely, together with our transfer into digital. After we recognized the important have to discover a digital answer for our college students, school and different well being care professionals, we acted rapidly and made our first acquisition on this space – PEBMED. We’re constantly on the lookout for methods to boost our product and repair choices and in October we acquired iClinic, a apply administration software program firm which incorporates companies corresponding to digital medical data, medical administration system, telemedicine and an entire physicians’ market that connects docs and sufferers to schedule consultations. And, subsequent to quarter-end, we introduced the acquisition of MedPhone, the quantity two medical App in Brazil behind WhiteBook – a PEBMED firm. The combination of MedPhone’s medical resolution software program with PEBMED will create vital synergy and permit us to supply each merchandise via the identical platform. Importantly, the founders of those acquired firms will be a part of Afya’s administration group and will likely be an integral a part of the group driving our progress within the healthtech companies.

With these three acquisitions, Afya is taking one other step to change into the one cease store for physicians in Brazil. Together with medical and well being schooling programs and a medical choices app, we enter in a brand new phase that may assist physicians handle their clinics and supply a greater service to their sufferers. Thus far, we now have over 200,00Zero well being care professionals who use PEBMED, Medphone and iClinic. There are 500,00Zero docs in Brazil, and our objective is to serve all of them inside our ecosystem.

The investments that we now have made in our know-how platform enabled us to make sure that we have been supporting our college students, school and different well being care professionals with what’s so essential to them, group and ease of entry to important knowledge and data which is extra important now than ever and can be a key lever for each member acquisition and retention. We’re seeing optimistic traction from our digital options. Moreover, our investments in digital are opening new enterprise and income alternatives for us. Additional, we anticipate demand for telehealth companies to stay elevated over the long-term. As such, we’re centered on additional growing our current digital capabilities to make sure the continued success of our college students and different well being care professionals. The iClinic acquisition was transformational for us, and we’re nonetheless actively on the lookout for different digital well being transactions to strengthen Afya’s place out there.

I’m proud to share with you that we now have simply refreshed our model. After coming into in all this new companies choices, we’re the one full medical schooling platform serving each stage of the physician’s profession offering options and methodologies for a personalised expertise. And when firm consciousness grows, its model additionally does. We launched our new brand that displays our DNA and can assist progressively each service model and native medical schooling establishments.

I’m additionally very happy to share that Afya was ranked because the winner within the Schooling sector within the Época Negócios 360 survey. This award, which has been held yearly for 7 years, is among the most important within the Communications trade and acknowledges firms which can be market leaders throughout six completely different classes together with Financials, Company Governance & Sustainability, Imaginative and prescient and Human Assets. Contemplating that Afya is a really younger firm, we’re very honored to be already be distinguished with this award. We even have received the Golden Tombstone within the Fairness class. This award is evaluated by IBEF SP and acknowledges Fairness Operations in facets corresponding to complexity of the transaction, innovation, pricing and others, and Afya’s award was as a result of our profitable IPO in 2019.

Our monetary efficiency thus far has saved us on observe for the 12 months, and we’re reaffirming our steering right now. Our group has been capable of quickly adapt to a really dynamic scenario, and I sincerely respect their ongoing efforts to ship a top quality schooling to our college students. We’ve a large number of alternatives forward of us to constantly create worth by delivering in opposition to our monetary targets, strengthening our steadiness sheet, implementing our strategic priorities together with investments in progress.

1.   Second Half 2020 Steering

The Firm is reaffirming its steering for 2H20 which takes under consideration the efficiently concluded medication college students consumption for the second half of 2020 and assuming a sure diploma of potential impacts of COVID-19 into the enterprise throughout the interval.

The worldwide Coronavirus outbreak is an unprecedented scenario. When contemplating Afya’s steering for 2H20, it’s paramount that shareholders and the market normally be suggested that the COVID-19 pandemic remains to be lively in Brazil, some state authorities might keep quarantines or “shelter in place” standing for a nonetheless undefined time period and/or take different actions not contemplated into the steering, all of that are outdoors of the Firm’s management.

Contemplating the above components, the steering for 2H20 is outlined within the following desk.

Steering for 2H20	Necessary issues
Internet Income is predicted to be between R$600 million – R$640 million	Contains PEBMED beginning on July 20, 2020. Contains R$14.Four million of Internet Income associated to the 1H20 that was not acknowledged because of the postponement of sensible courses throughout the pandemic. Excludes any acquisition which may be concluded after the issuance of the steering. As an illustration doesn’t embrace FCMPB and FESAR.
Adjusted EBITDA margin is predicted to be between 45.5-47.0%	Contains PEBMED beginning on July 20, 2020. Contains R$14.Four million of Internet Income associated to the 1H20 that was not acknowledged because of the postponement of sensible courses throughout the pandemic. Excludes any acquisition which may be concluded after the issuance of the steering. As an illustration doesn’t embrace FCMPB and FESAR. Contains the affect of the adoption of IFRS 16.

2.   Overview of 3Q20

Operational Evaluation

Afya is the one firm providing technological options to assist physicians throughout each stage of the medical profession, from undergraduate college students in its medical faculty years via medical residency preparatory programs, medical specialization applications and persevering with medical schooling. Because the PEBMED acquisition, Afya has entered into the digital well being companies, offering content material and medical resolution purposes.

The Firm operates two distinct enterprise items. The primary (Enterprise Unit 1 or BU1), is comprised of Undergraduate – medical colleges, different well being care applications and ex-health levels. Income is generated from the month-to-month tuition charges the Firm prices college students enrolled within the undergraduate applications. The Firm additionally provides Residency Preparatory, Specialization Packages and Digital Well being Companies (Enterprise Unit 2 or BU2). Income is comprised of charges from these applications and different revenues from digital companies supplied.

Desk 2: Key Income Drivers	9 months ended September 30,
	2020		2019		% Chg
Enterprise Unit 1: Academic Companies Section (1)
MEDICAL SCHOOL
Authorised Seats (2)	1,866		1,572		18.7	%
Working Seats	1,516		1,222		24.1	%
Whole College students	9,567		6,388		49.8	%
Whole College students (ex-UniSL and ex- Uniredentor)	7,667		6,388		20.0	%
Tuition Charges (ex- UniSL and ex- Uniredentor – R$MM)	555,705		394,621		40.8	%
Tuition Charges (Whole – R$MM)	648,065		394,621		64.2	%
Medical College Avg, Ticket (ex- UniSL and ex- Uniredentor – R$/month)	8,053		6,864		17.3	%
UNDERGRADUATE HEALTH SCIENCE
Whole College students	10,768		6,494		65.8	%
Whole College students (ex-UniSL and ex- Uniredentor)	5,186		6,494		-20.1	%
Tuition Charges (ex- UniSL and ex- Uniredentor – R$MM)	76,462		75,827		0.8	%
Tuition Charges (Whole – R$MM)	110,447		75,827		45.7	%
OTHER UNDERGRADUATE
Whole College students	12,689		10,878		16.6	%
Whole College students (ex-UniSL and ex- Uniredentor)	6,303		10,878		-42.1	%
Tuition Charges (ex- UniSL and ex- Uniredentor – R$MM)	84,215		104,673		-19.5	%
Tuition Charges (Whole – R$MM)	124,919		104,673		19.3	%
Enterprise Unit 2: Prep Programs & CME, Medical Specialization and Digital Well being Companies
Energetic Paying College students
Prep Programs & CME – B2C	11,684		9,854		18.6	%
Prep Programs & CME – B2B	2,154		1,291		66.8	%
Medical Specialization & Others	4,181		1,803		131.9	%
Medical Specialization & Others   (ex-Uniredentor)	2,026		1,803		12.4	%
PEBMED Energetic Subscribers	95,099		–		–
Income from programs (ex- Uniredentor and PEBMED – R$MM) (3)	125,569		56,033		124.1	%
Income from programs (Whole – R$MM) (3)	139,276		56,033		148.6	%
1. Uniredentor common tuition price for medical faculty in 9M2020 was R$ 9,625 and for UniSl was R$7,010.
2. This quantity doesn’t consists of FCMPB and FESAR that had the closing of the operation in November, 2020 and contribute 277 seats to Afya.
3. As Medcel and Ipemed have been acquired on March 31, 2019 and on Might 9, 2019 respectively, income from programs for BU2 weren’t accounted for in 1Q19. The variety of college students is disclosed to contribute with buyers evaluation.

Together with the lively paying college students, 10,052 medical college students from private and non-private medical colleges are nonetheless accessing the Firm’s Digital platform with a brief free entry throughout the pandemic disaster.

MaU represents the variety of distinctive people that consumed Afya’s digital content material within the final 30 days. Whole month-to-month lively customers (MaU) have been 165,035 within the new PEBMED app. Contemplating solely the MaU of Medcel, the consumer base decreased 10.3% as a result of COVID associated programs that have been supplied within the 2Q20, which briefly inflated MaU in that quarter. Afya’s provides to its MaU a major quantity of studying belongings, comprised of e-books, movies, podcasts and query/reply paperwork.

Desk 3: Key Operational Drivers for BU2	Third Quarter
	3Q20	2Q20	% Chg			1Q20
Whole Month-to-month Energetic Customers (MaU) – Medcel	18,322	20,420	-10.3	%		16,008
Whole Month-to-month Energetic Customers (MaU) – PEBMED	165,035	–	–			–

Seasonality

Afya’s two companies are impacted by seasonality however at completely different time intervals. The primary is related to the focus of prep course revenues within the first and fourth quarters of every 12 months, when new content material (books and e-books) is delivered and the vast majority of the revenues are acknowledged. The second is related to the maturation of a number of medical colleges, which results in the next enrollment base within the second half of every 12 months. Consequently, in a typical 12 months, the primary quarter is often the strongest. The fourth quarter is often the second strongest, adopted by the third and second quarters, respectively. Lastly, the second half of the 12 months is often stronger than the primary half.

Nevertheless, this 12 months, because of the income postponement attributable to Covid disaster, the Firm is predicted to see a smoother seasonality between the third and fourth quarters.

Income

Whole Internet Income for third quarter 2020 was R$309.Four million, a rise of 49.7% over the identical interval of prior 12 months. Income within the quarter partially benefitted from the popularity of income that had been deferred earlier within the 12 months because of the postponement of on-campus actions as some sensible instructional actions having to be re-scheduled to 3Q20 as a result of impacts from COVID-19. This amounted to R$14.Four million. Adjusted Internet Income in 3Q20, which incorporates the affect of R$3.9 million as a result of non permanent reductions in tuition charges granted by state decrees and particular person and collective authorized proceedings associated to COVID 19 was R$313.Three million. Excluding UniSL, UniRedentor and PEBMED, Adjusted Internet Income in third quarter elevated 15.7% YoY to R$239.1 million.

For the nine-months ended September 30, 2020 Whole Internet Income was R$855.9 million, which elevated 61.6% over the identical interval of final 12 months. 9M20 Professional Forma Adjusted Internet Income was R$859.Eight million. Excluding UniSL, UniRedentor and PEBMED, Professional forma Adjusted Internet Income in nine-months ended September 30, 2020 elevated 17.4% YoY, reaching R$715.Zero million.

Desk 4: Income & Income Combine
(in thousand of R$)	For the three months interval ended September 30,										For the 9 months interval ended September 30,
	2020		2020 Ex Uniredentor, UniSL and PEBMED	2019		% Chg		% Chg Ex Uniredentor, UniSL and PEBMED			2020		2020 Ex Uniredentor, UniSL and PEBMED	2019		% Chg		% Chg Ex Uniredentor, UniSL and PEBMED
Internet Income Combine
Enterprise Unit-1	266,382		197,487	176,113		51.3	%	12.1	%		718,268		586,655	477,631		50.4	%	22.8	%
Enterprise Unit-2	43,670		38,926	32,662		33.7	%	19.2	%		139,276		125,569	56,033		148.6	%	124.1	%
Inter-segment transactions	(642	)	–	(2,062	)	–		–			(1,619	)	–	(3,880	)	-58.3	%	–
Whole Reported Internet Income	309,410		236,413	206,713		49.7	%	14.4	%		855,925		712,224	529,784		61.6	%	34.4	%
Whole Adjusted Internet Income ¹	313,324		239,147	206,713		51.6	%	15.7	%		859,839		714,958	529,784		62.3	%	35.0	%
Whole Professional Forma Adjusted Internet Revenue²	309,410		239,147	206,713		49.7	%	15.7	%		859,839		714,958	608,984		41.2	%	17.4	%
1. Contains necessary reductions in tuition charges granted by state decrees and particular person and collective authorized proceedings due COVID 19.
2. Contains the pro-forma outcomes of Medcel, IPEMED and FASA, as if the acquisition had been consummated on January 1, 2019.

Adjusted EBITDA

Adjusted EBITDA within the three-months ended September 30, 2020 elevated 63.3% to R$149.Three million, up from R$91.Four million in the identical interval of the prior 12 months. Adjusted EBITDA margin of 47.6% expanded from 44.2% reported within the three-months ended September 30, 2019 benefitting from medical faculty maturation, increased common ticket, deferred income and synergies achieved from acquisitions.

Excluding the consolidation of UniRedentor, UniSL and PEBMED, Adjusted EBITDA within the three-months ended September 30, 2020 elevated 31.9% YoY to R$120.6 million from R$91.Four million whereas Adjusted EBITDA margin elevated 620 foundation factors, to 50.4%.

For the nine-months ended September 30, 2020, Professional forma Adjusted EBITDA elevated 68.8% to R$408.1 million, from R$241.Eight million within the nine-months ended September 30, 2019. Adjusted EBITDA margin of 47.5% was 780 foundation factors increased than the identical interval of the prior 12 months benefitting from the synergies extracted from the profitable integration of acquisitions.

For the nine-months ended September 30, 2020, Professional forma Adjusted EBITDA excluding UniRedentor UniSL and PEBMED elevated 47.4% YoY to R$356.5 million up from R$241.Eight million whereas Professional forma Adjusted EBITDA margin elevated 1020 foundation factors, to 49.9% from 39.7%. Each enhancements mirror primarily operational leverage and synergies obtained from latest acquisitions.

Desk 5: Adjusted EBITDA
(in thousand of R$)	For the three months interval ended September 30,											For the 9 months interval ended September 30,
	2020		2020 Ex Uniredentor, UniSL and PEBMED		2019		% Chg		% Chg Ex Uniredentor, UniSL and PEBMED			2020		2020 Ex Uniredentor, UniSL and PEBMED		2019		% Chg		% Chg Ex Uniredentor, UniSL and PEBMED
Adjusted EBITDA	149,270		120,624		91,424		63.3%		31.9%			408,066		356,490		230,915		76.7%		54.4%
% Margin	47.6%		50.4%		44.2%		340 bps		620 bps			47.5%		49.9%		43.6%		390 bps		630 bps
Proforma Adjusted EBITDA¹	149,270		120,624		91,424		63.3%		31.9%			408,066		356,490		241,785		68.8%		47.4%
% Margin	47.6%		50.4%		44.2%		340 bps		620 bps			47.5%		49.9%		39.7%		780 bps		1020 bps
1. Contains the pro-forma outcomes of Medcel, IPEMED and FASA, as if the acquisition had been consummated on January 1, 2019.

Internet Earnings

Adjusted Internet Earnings for third quarter 2020 was R$101.2 million, rising 46.7% over the identical interval of the prior 12 months. For the nine-months ended September 30, 2020, the Firm reported Adjusted Internet Earnings of R$307.Eight million, in comparison with an Adjusted Internet Earnings of R$155.Three million within the nine-months ended September 30, 2019, a rise of 98.2%. Each will increase primarily mirror the income contribution, synergies captured and margin growth from the consolidation of acquisitions in addition to natural progress.

(in thousand of R$)
	For the three months interval ended September 30,					For the 9 months interval ended September 30,
	2020	2019	% Chg			2020	2019	% Chg
Internet revenue	79,575	48,984	62.5	%		247,131	119,786	106.3	%
Amortization of buyer relationships and trademark (1)	11,597	12,058	-3.8	%		36,013	25,640	40.5	%
Share-based compensation	10,052	7,955	26.4	%		24,649	9,864	149.9	%
Adjusted Internet Earnings	101,224	68,997	46.7	%		307,793	155,290	98.2	%
(1) Consists of amortization of buyer relationships and trademark recorded below enterprise combos.

Steadiness Sheet and Money Movement

Money and money equivalents, together with restricted money, at September 30, 2020 have been R$1.1 billion, consistent with the money place in June 30, 2020.

For the nine-month interval ended September 30, 2020, Afya reported an Adjusted Money Movement from Operations of R$324.7 million up from R$234.7 million in similar interval of earlier 12 months, a 38.4% year-over-year enhance.

Working Money Conversion Ratio for the nine-month interval ended September 30, 2020 was 85.6% in contrast with 109.2% in similar interval of the earlier 12 months. This lower was primarily because of the consolidation of Medcel outcomes this 12 months, college students renegotiation of overdue month-to-month installments as a result of Covid-19 disaster and fewer advances from college students.

As Prep course’s revenues are acknowledged primarily within the first and fourth quarters of every 12 months, however the receivables are largely steady throughout the 12 months, Medcel’s outcomes negatively impacts money conversion within the first and fourth quarters.

Desk 6: Working Money Conversion Ratio Reconciliation	For the 9 months interval ended September 30,
(in thousand of R$)	Contemplating the adoption of IFRS 16
	2020		2019		% Chg
(a) Money circulate from operations	308,916		230,647		33.9	%
(b) Earnings taxes paid	15,830		4,033		292.5	%
(c) = (a) + (b) Adjusted money circulate from operations	324,746		234,680		38.4	%
(d) Adjusted EBITDA	408,066		230,915		76.7	%
(e) Non-recurring bills:
– Integration of recent firms (1)	7,743		4,500		72.1	%
– M&A advisory and due diligence (2)	9,345		1,388		573.3	%
– Growth tasks (3)	2,886		1,411		104.5	%
– Restructuring Bills (4)	4,863		8,759		-44.5	%
– Obligatory Reductions in Tuition Charges (5)	3,914		–		n.a.
(f) = (d) – (e) Adjusted EBITDA ex- non-recurring bills	379,315		214,857		76.5	%
(g) = (a) / (f) Working money conversion ratio	85.6	%	109.2	%	-2360 bps
(1) Consists of bills associated to the combination of newly acquired firms.
(2) Consists of bills associated to skilled and guide charges in reference to due diligence companies for M&A transactions.
(3) Consists of bills associated to skilled and guide charges in reference to the opening of recent campuses.
(4) Consists of bills associated to the worker redundancies in reference to the organizational restructuring of acquired firms.
(5) Consists of necessary reductions in tuition charges granted by state decrees and particular person and collective authorized proceedings due COVID 19 on website courses restriction.

3.   Subsequent Occasions

Medical College Authorization – Santa Inês – MA

On October 2, 2020, the Firm introduced that the Secretary of Regulation and Supervision of Increased Schooling of the Ministry of Schooling (“MEC”) granted authorization to Afya to function the undergraduate medication course in Santa Inês within the State of Maranhão, below Mais Médicos II program. This medical faculty is the primary licensed in reference to the Mais Médicos program for Afya and can contribute 50 seats to working seats base. Santa Inês is among the seven undergraduate campuses Afya was awarded in 2018 in reference to the “Mais Médicos” program, the biggest quantity awarded to any schooling group.

Entrance into a purchase order settlement for the Acquisition of iClinic

On October 13, 2020 the Firm introduced its entrance into a purchase order settlement for the acquisition of 100% of the entire share capital of iClinic, via its wholly-owned subsidiary Afya Participações S.A. iClinic is a SaaS mannequin doctor centered know-how firm and the main apply administration software program in Brazil. This software program empowers docs to be extra impartial and have extra management over the non-medicine facet of their practices by digitalizing their day by day routine, to allow them to enhance their productiveness and ship higher healthcare. The mixture buy worth is R$182.7 million, adjusted by the Internet Debt on the deadline, of which: (i) 61.5% will likely be paid in money on the transaction deadline, and (ii) 38.5% will likely be paid in Afya’s inventory. The transaction is predicted to shut in 1Q21.

Entrance into a purchase order settlement for the Acquisition of Sociedade Padrão de Educação Superior Ltda (“UNIFIPMoc and Fip Guanambi”)

On October 22, 2020 the Firm introduced it entered into a purchase order settlement for the acquisition, via its wholly-owned subsidiary Afya Participações S.A., of 100% of the entire share capital of Sociedade Padrão de Educação Superior Ltda (“UNIFIPMoc and Fip Guanambi”). The mixture buy worth is R$360.Zero million, adjusted by the Internet Debt on the deadline, of which 100% is payable in money on the transaction deadline. UNIFIPMoc and Fip Guanambi are a post-secondary schooling establishment with authorities authorization to supply on-campus, undergraduate programs in medication within the states of Minas Gerais and Bahia. The acquisition will contribute 160 medical faculty seats to Afya, rising Afya’s complete medical faculty seats to 2,303. There are 40 further seats nonetheless pending approval which, if accepted by the Ministry of Schooling, will lead to a possible further fee of as much as R$50 million. The transaction is predicted to shut in 1Q21.

Closing of the Acquisition of Faculdade de Ensino Superior da Amazônia Reunida (FESAR)

On November 3, 2020, the Firm introduced the closing of the acquisition, via its wholly-owned subsidiary Afya Participações S.A., of 100% of the entire share capital of Faculdade de Ensino Superior da Amazônia Reunida. FESAR is a post-secondary schooling establishment with authorities authorization to supply on-campus, undergraduate programs in medication within the State of Pará. The projected Internet Income for FESAR in 2024 is R$88.6 million with an EV/EBITDA publish synergies and maturation of 4.7x adjusted by the actual property. The mixture buy worth is R$260 million, of which 100% is payable in money on the transaction deadline. The enterprise worth additionally consists of actual property which is valued at R$21.Zero million. The acquisition will contribute 120 medical faculty seats to Afya, rising Afya’s complete medical faculty seats to 2,143.

Closing of the Acquisition of MedPhone
On November 5, 2020, the Firm introduced the acquisition of 100% of the entire share capital of MedPhone via its wholly-owned subsidiary Afya Participações S.A. MedPhone is a medical resolution and leaflet session app in Brazil, that helps physicians, medical college students and different healthcare professionals to make quicker and extra correct choices each day. MedPhone has greater than 175,00Zero registered customers and greater than 58,00Zero month-to-month lively customers, with a NPS of 75. The app has greater than 9,100 opinions in AppStore with a 4.9 out of 5 rating. The combination of MedPhone’s medical resolution software program with PEBMED will create nice synergy and permit the Firm to supply each merchandise via the identical platform. The web buy worth is R$6.Four million and is payable in money on the transaction deadline.

Closing of the Acquisition of Faculdade Ciências Médicas da Paraíba (FCMPB)

On November 9, 2020, the Firm introduced the closing of the acquisition, via its wholly-owned subsidiary Afya Participações S.A., of 100% of the entire share capital of Faculdade Ciências Médicas da Paraíba. FCMPB is a post-secondary schooling establishment with authorities authorization to supply on-campus, undergraduate programs in medication within the State of Paraíba. The projected Internet Income for FCMPB in 2024 is R$107.Zero million with an EV/EBITDA publish synergies and maturation of 6.3x, all derived from its medical faculty. The mixture buy worth is R$380.Zero million, adjusted by the Internet Debt on the deadline, of which: (i) 50% is payable in money on the transaction deadline, and (ii) 50% is payable in money in 4 equal installments via 2024, adjusted by the CDI price. The acquisition will contribute 157 medical faculty seats to Afya, rising Afya’s complete medical faculty seats to 2,023.

4.   Convention Name and Webcast Info

When: December 4, 2020 at 11:00 a.m. ET.

Who:	Mr. Virgilio Gibbon, Chief Government Officer Mr. Luis André Blanco, Chief Monetary Officer Ms. Renata Costa Couto, Head of Investor Relations

Dial–in: +1-877- 591-8865 (U.S. Toll-Free); +1-336-698-3012 (Worldwide). Convention ID: 3385357

Webcast: ir.afya.com.br

Replay: obtainable between December 04, 2020 till December 08, 2020, by dialing +1-855-859-2056 (U.S. home) or +1-404-537-3406 (Worldwide), convention ID: 3385357.

5.   About Afya Restricted (Nasdaq: AFYA)

Afya is the main medical schooling group in Brazil based mostly on variety of medical faculty seats, delivering an end-to-end physician-centric ecosystem that serves and empowers college students to be lifelong medical learners from the second they enroll as medical college students via their medical residency preparation, commencement program, and persevering with medical schooling actions. Afya additionally provides content material and medical resolution purposes for healthcare professionals, via its merchandise WhiteBook, Nursebook and Portal PEBMED. For extra data, please go to www.afya.com.br.

6.   Ahead – Trying Statements

This press launch incorporates forward-looking statements inside the that means of the Personal Securities Litigation Reform Act of 1995, which statements contain substantial dangers and uncertainties. All statements aside from statements of historic truth, could possibly be deemed ahead wanting, together with dangers and uncertainties associated to statements about our competitors; our means to draw, upsell and retain college students; our means to extend tuition costs and prep course charges; our means to anticipate and meet the evolving wants of pupil and lecturers; our means to supply and efficiently combine acquisitions; common market, political, financial, and enterprise situations; and our monetary targets corresponding to income, share depend and IFRS and non-IFRS monetary measures together with gross margin, working margin, web revenue (loss) per diluted share, and free money circulate. Ahead-looking statements by their nature tackle issues which can be, to completely different levels, unsure, corresponding to statements concerning the potential impacts of the COVID-19 pandemic on our enterprise operations, monetary outcomes and monetary place and on the Brazilian financial system.

The Firm undertakes no obligation to replace any forward-looking statements made on this press launch to mirror occasions or circumstances after the date of this press launch or to mirror new data or the incidence of unanticipated occasions, besides as required by legislation. The achievement or success of the issues lined by such forward-looking statements includes recognized and unknown dangers, uncertainties and assumptions. If any such dangers or uncertainties materialize or if any of the assumptions show incorrect, our outcomes might differ materially from the outcomes expressed or implied by the forward-looking statements we make. Readers shouldn’t depend on forward-looking statements as predictions of future occasions. Ahead-looking statements signify administration’s beliefs and assumptions solely as of the date such statements are made. Additional data on these and different components that might have an effect on the Firm’s monetary outcomes is included in filings made with america Securities and Change Fee (SEC) sometimes, together with the part titled “Threat Components” in the newest Rule 434(b) prospectus. These paperwork can be found on the SEC Filings part of the investor relations part of our web site at: https://ir.afya.com.br/.

7.   Non-GAAP Monetary Measures

To complement the Firm’s consolidated monetary statements, that are ready and offered in accordance with Worldwide Monetary Reporting Requirements as issued by the Worldwide Accounting Requirements Board—IASB, Afya makes use of Proforma Income, Adjusted EBITDA, Professional Forma Adjusted EBITDA, Professional Forma Adjusted Internet Earnings and Working Money Conversion Ratio data for the comfort of buyers, that are non-GAAP monetary measures. A non-GAAP monetary measure is usually outlined as one which goal to measure monetary efficiency however excludes or consists of quantities that may not be so adjusted in essentially the most comparable GAAP measure.

Afya calculates Adjusted EBITDA as web revenue plus/minus web monetary consequence plus revenue taxes expense plus depreciation and amortization plus curiosity obtained on late funds of month-to-month tuition charges, plus share-based compensation plus/minus revenue share affiliate plus/minus non-recurring bills. Professional Forma Adjusted EBITDA is calculated as professional forma web revenue plus/minus professional forma web monetary consequence plus professional forma revenue taxes expense plus professional forma depreciation and amortization plus professional forma curiosity obtained on late funds of month-to-month tuition charges, plus professional forma share-based compensation plus/minus professional forma revenue share affiliate plus/minus professional forma non-recurring bills. The calculation for Adjusted Internet Earnings is web revenue plus amortization of buyer relationships and trademark, plus shared based mostly compensation. We calculate Working Money Conversion Ratio because the money flows from operations, adjusted with revenue taxes paid divided by Adjusted EBITDA plus/minus non-recurring bills.

Administration presents Adjusted EBITDA, Professional Forma Adjusted EBITDA and Professional Forma Adjusted Internet Earnings as a result of it believes these measures present buyers with a supplemental measure of the monetary efficiency of the core operations that facilitates period-to-period comparisons on a constant foundation. Afya additionally presents Working Money Conversion Ratio as a result of it believes this measure offers buyers with a measure of how effectively the Firm converts EBITDA into money. The non-GAAP monetary measures described on this prospectus should not an alternative to the IFRS measures of earnings. Moreover, calculations of Adjusted EBITDA, Professional Forma Adjusted EBITDA, Professional Forma Adjusted Internet Earnings and Working Money Conversion Ratio could also be completely different from the calculations utilized by different firms, together with opponents within the schooling companies trade, and subsequently, Afya’s measures might not be similar to these of different firms.

8.   Unaudited Professional Forma Condensed Consolidated Monetary Info

The unaudited interim professional forma condensed consolidated assertion of revenue for the three and 9 months ended September 30, 2019 is predicated on the historic unaudited interim consolidated monetary statements of every firm, and offers impact of the acquisition of Medcel, IPEMED and FASA by Afya Brazil as if it had been consummated on January 1, 2019. Professional forma changes have been made to mirror the acquisition of Medcel, IPEMED and FASA by Afya Brazil.

9.   Investor Relations Contact

Renata Couto, Head of Investor Relations
Cellphone: +55 31 3515.7564 | +55 31 98463.3341
E-mail: renata.couto@afya.com.br

10.   Monetary Tables

Interim condensed consolidated statements of revenue and complete revenue

For the three and 9-months intervals ended September 30, 2020 and 2019

(In hundreds of Brazilian Reais, besides earnings per share)

		Three-month interval ended				9-month interval ended
		September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
		(unaudited)		(unaudited)		(unaudited)		(unaudited)
Internet income		309,410		206,713		855,925		529,784
Price of companies		(112,292)		(87,350)		(308,226)		(223,997)
Gross revenue		197,118		119,363		547,699		305,787
Normal and administrative bills		(104,718)		(71,260)		(281,480)		(162,078)
Different revenue, web		1,997		520		1,249		890
Working revenue		94,397		48,623		267,468		144,599
Finance revenue		12,081		29,652		55,801		37,841
Finance bills		(23,701)		(24,586)		(65,443)		(54,915)
Finance consequence		(11,620)		5,066		(9,642)		(17,074)
Share of revenue of affiliate		1,488		1,043		6,393		1,963
Earnings earlier than revenue taxes		84,265		54,732		264,219		129,488
Earnings taxes expense		(4,690)		(5,748)		(17,088)		(9,702)
Internet revenue		79,575		48,984		247,131		119,786
Different complete revenue		–		–		–		–
Whole complete revenue		79,575		48,984		247,131		119,786
Earnings attributable to
Fairness holders of the mum or dad		74,832		46,267		235,327		104,119
Non-controlling pursuits		4,743		2,717		11,804		15,667
		79,575		48,984		247,131		119,786
Primary earnings per share
Per frequent share		0.80		0.54		2.54		1.21
Diluted earnings per share Per frequent share		0.79		0.53		2.52		1.20

Interim condensed consolidated statements of economic place

As of September 30, 2020 and December 31, 2019

(In hundreds of Brazilian Reais)

		September 30, 2020		December 31, 2019
Belongings		(unaudited)
Present belongings
Money and money equivalents		1,065,232		943,209
Restricted money		10,902		14,788
Commerce receivables		231,069		125,439
Inventories		5,835		3,932
Recoverable taxes		24,577		6,485
Derivatives		11,489		–
Different belongings		20,667		17,912
Whole present belongings		1,369,771		1,111,765
Non-current belongings
Restricted money		2,055		2,053
Commerce receivables		11,186		9,801
Different belongings		48,640		17,267
Funding in affiliate		52,027		45,634
Property and gear		212,537		139,320
Proper-of-use belongings		389,846		274,275
Intangible belongings		1,961,759		1,312,338
Whole non-current belongings		2,678,050		1,800,688
Whole belongings		4,047,821		2,912,453
Liabilities
Present liabilities
Commerce payables		32,453		17,628
Loans and financing		143,081		53,607
Derivatives		–		757
Lease liabilities		56,628		22,693
Accounts payable to promoting shareholders		138,627		131,883
Notes payable		9,646		–
Advances from clients		44,368		36,860
Labor and social obligations		103,130		46,770
Taxes payable		35,311		19,442
Earnings taxes payable		4,601		3,213
Different liabilities		4,606		376
Whole present liabilities		572,451		333,229
Non-current liabilities
Loans and financing		17,175		6,750
Lease liabilities		356,057		261,822
Accounts payable to promoting shareholders		223,634		168,354
Notes payable		66,981		–
Taxes payable		22,486		21,304
Provision for authorized proceedings		22,589		5,269
Different liabilities		2,567		1,999
Whole non-current liabilities		711,489		465,498
Whole liabilities		1,283,940		798,727
Fairness
Share capital		17		17
Extra paid-in capital		2,318,044		1,931,047
Share-based compensation reserve		42,763		18,114
Retained earnings		351,243		115,916
Fairness attributable to fairness holders of the mum or dad		2,712,067		2,065,094
Non-controlling pursuits		51,814		48,632
Whole fairness		2,763,881		2,113,726
Whole liabilities and fairness		4,047,821		2,912,453

Interim condensed consolidated statements of money flows

For the 9-months intervals ended September 30, 2020 and 2019

(In hundreds of Brazilian Reais)

				September 30, 2020		September 30, 2019
				(unaudited)		(unaudited)
Working actions
	Earnings earlier than revenue taxes			264,219		129,488
		Changes to reconcile revenue earlier than revenue taxes
			Depreciation and amortization	77,729		50,703
			Disposals of property and gear	–		111
			Allowance for uncertain accounts	22,899		13,278
			Share-based compensation expense	24,649		9,864
			Internet international alternate variations	1,613		(13,608)
			Internet (achieve) loss on derivatives	(22,199)		1,181
			Accrued curiosity	16,161		14,642
			Accrued lease curiosity	32,123		23,337
			Share of revenue of affiliate	(6,393)		(1,963)
			Provision for authorized proceedings	(93)		(624)
Adjustments in belongings and liabilities
	Commerce receivables			(95,563)		(24,688)
	Inventories			(1,436)		777
	Recoverable taxes			(1,437)		(5,594)
	Different belongings			(6,820)		(2,713)
	Commerce payables			1,759		2,985
	Taxes payables			(5,612)		5,588
	Advances from clients			(18,882)		18,521
	Labor and social obligations			42,033		22,992
	Different liabilities			(4)		(9,597)
				324,746		234,680
	Earnings taxes paid			(15,830)		(4,033)
	Internet money flows from working actions			308,916		230,647
Investing actions
	Acquisition of property and gear			(60,887)		(41,684)
	Acquisition of intangibles belongings			(12,741)		(59,644)
	Restricted money			3,884		2,512
	Funds of accounts payable to promoting shareholders			(95,406)		(27,962)
	Funds of notes payable			(3,847)		–
	Acquisition of subsidiaries, web of money acquired			(354,851)		(148,880)
	Loans to associated events			–		(161)
	Internet money flows utilized in investing actions			(523,848)		(275,819)
Financing actions
	Funds of loans and financing			(106,019)		(43,094)
	Issuance of loans and financing			100,911		–
	Funds of lease liabilities			(40,527)		(27,811)
	Capital enhance			–		167,628
	Proceeds from issuance of shares			389,170		992,778
	Shares issuance value			(19,704)		(79,670)
	Dividends paid to non-controlling pursuits			(8,622)		(47,964)
	Internet money flows from financing actions			315,209		961,867
	Internet enhance in money and money equivalents			100,277		916,695
	Internet international alternate variations			21,746		14,531
	Money and money equivalents at the start of the interval			943,209		62,260
	Money and money equivalents on the finish of the interval			1,065,232		993,486

Reconciliation between Internet Earnings and Adjusted EBITDA, Professional Forma Adjusted EBITDA

Reconciliation between Adjusted EBITDA and Internet Earnings; Proforma Adjusted EBITDA
(in thousand of R$)
	For the three months interval ended September 30,							For the 9 months interval ended September 30,
	2020		2019		% Chg			2020		2019		% Chg
Internet revenue	79,575		48,984		62.5	%		247,131		119,786		106.3	%
Internet monetary consequence	11,620		(5,066	)	n.a.			9,642		17,074		-43.5	%
Earnings taxes expense	4,690		5,748		-18.4	%		17,088		9,702		76.1	%
Depreciation and amortization	26,399		22,262		18.6	%		77,729		50,703		53.3	%
Curiosity obtained (1)	4,142		3,813		8.6	%		9,469		7,728		22.5	%
Earnings share affiliate	(1,488	)	0		n.a.			(6,393	)	0		n.a.
Share-based compensation	10,052		7,955		26.4	%		24,649		9,864		149.9	%
Non-recurring bills:	14,280		7,728		84.8	%		28,751		16,058		79.0	%
– Integration of recent firms (2)	2,761		893		209.2	%		7,743		4,500		72.1	%
– M&A advisory and due diligence (3)	3,709		289		1183.4	%		9,345		1,388		573.3	%
– Growth tasks (4)	795		468		69.9	%		2,886		1,411		104.5	%
– Restructuring bills (5)	3,101		6,078		-49.0	%		4,863		8,759		-44.5	%
– Obligatory Reductions in Tuition Charges (6)	3,914		0		n.a.			3,914		0		n.a.
Adjusted EBITDA	149,270		91,424		63.3	%		408,066		230,915		76.7	%
Adjusted EBITDA Margin	47.6	%	44.2	%	340 bps			47.5	%	43.6	%	390 bps
Professional Forma Adjusted EBITDA	149,270		91,424		63.3	%		408,066		241,785		68.8	%
Professional Forma Adjusted EBITDA Margin	47.6	%	44.2	%	340 bps			47.5	%	39.7	%	780 bps
(1) Represents the curiosity obtained on late funds of month-to-month tuition charges.
(2) Consists of bills associated to the combination of newly acquired firms.
(3) Consists of bills associated to skilled and guide charges in reference to due diligence companies for our M&A transactions.
(4) Consists of bills associated to skilled and guide charges in reference to the opening of recent campuses.
(5) Consists of bills associated to the worker redundancies in reference to the organizational restructuring of our acquired firms.
(6) Consists of necessary reductions in tuition charges granted by state decrees and particular person and collective authorized proceedings due COVID 19 on website courses restriction.

 

— to www.globenewswire.com

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