YDUQS Feedback From Meeting with CEO

Research evidence excerpt

YDUQS Feedback From Meeting with CEO

low R$50m this year. Management expects non-

recurring items for this year to be below the level of R$50m last year. They broke down

the non-recurring line into three historical items: personnel (faculty severance for

capacity reduction), rent (footprint changes and lease terminations), and M&A (much

smaller). Last year, excluding extraordinary items like organizational severance and a tax

recovery program, the non-recurring number was already around R$50m. For this year,

they see no extraordinary items with a costly effect.

• Headcount reductions should end in 2027. The only expense still kept in the non-

recurring line concept is faculty reduction linked to capacity reduction. Management’s

view is that as long as they are reducing capacity, this line continues to make sense, but

it has been decreasing year after year. Last year, the reduction was helped by the

regulatory framework opportunity, making it more aggressive, which will help it to be

even lower this year. They expect this faculty layoff line to continue decreasing and

eventually end in 2027.

• IBMEC offers high growth potential combined with solid margins. Management

highlighted that IBMEC has a solid competitive position, growing ahead of the

consolidated business while offering a solid margin position.

• M&A environment in medical. Management discussed that the medical education

market will be more restricted, with some players having to leave the business because

it won’t be viable for everyone to compete. They noted that there were many injunctions,

and the market for buying and selling injunctions is over. The market will rationalize

more, and there is no more buying and selling of initial faculties, which makes the market

more secure and self-regulating.