Our Competitive Advantages
The Company believes it is well positioned to compete in the Brazilian higher education market, especially in the Northeast and North regions, mainly due to following factors:
Unique positioning in areas with a great potential for growth
The Company believes it is the largest private organization in the higher education sector operating in the Northeast of Brazil, in terms of units, with 35 MEC-accredited units in the region on December 31, 2023. Additionally, it also has a strong presence in the North region, with 18 additional accredited units, including two higher education institutions offering Medicine courses, in the cities of Cacoal (RO) and Vilhena (RO). The Company believes it is the company with the strongest capillarity in the sector in these regions, with units located in all states.
In January 2022, the Company completed the acquisition of Centro Universitário UNIFAEL. With more than 600 Digital Learning centers, the union with Ser Educacional will create a network of more than 1,000 active Digital Learning centers, giving the Company national reach. In 2023, the UNIFAEL integration process was completed, which currently includes investments in expanding and optimizing the portfolio of partner learning centers, aiming for a mix of courses also prioritizing the areas of health and engineering, as well as Hybrid Learning, according to strategic planning and action plan implemented by the Company, which led to reaching a total student base of 312,900 students, as of December 31, 2023.
Value creation, financial performance and growth
In recent years, the Company has implemented several efforts to improve the operations of its units, as well as their results and profitability. In 2014, it launched a Shared Services Center (SSC) with a relevant idle capacity in order to allowing the Company to increase its student base at very low marginal costs. In 2016, the Company launched its new distance learning operations center, located in Recife. The Company believes this facility will give it the ability to absorb and act centrally in relation to all future projected needs for its distance learning operations.
As of 2020, the Company started to operate under the concept of a continuing education ecosystem, which aims to create avenues for generating value through the combined offer of courses in Hybrid Teaching and Digital Learning, enabling its campuses to carry out an increasingly omnichannel offer, acquiring and creating companies that allow it to offer new educational and related services in order to increase the return on its educational assets.
Starting in 2021, the Company implemented its new teaching methodology, Ubíqua, which aims to offer a ubiquitous education concept, using active teaching methodologies through a cutting-edge technological platform that allows students to have a differentiated teaching experience, whatever the chosen educational modality (on-campus, hybrid, digital) or certification mode (undergraduate, graduate or continuing education) with modern content and high flexibility of creation and new courses and distribution model.
In 2023, the Company implemented a reorganization of the course portfolio, in order to prioritize the offering of health and engineering courses in Hybrid Learning, which have a higher average ticket, aiming to better take advantage of its differences relating to the structure of laboratories, clinics and recognition of its regional brands, while in Digital Education the UNIFAEL integration process was completed and currently has investments in expanding the portfolio of partner learning centers, aiming for a mix of courses also prioritizing the areas of health and engineering.
Business model with high scalability, replicability and standardization of operations
The Company believes it can expand its operations through acquisitions, generating significant efficiencies, as well as from its scalable business model that can absorb more units and students at a reduced incremental cost. Since its Initial Public Offering in December 2013, the Company has acquired and integrated more than 20 institutions. On average, all the systems of these acquired companies were integrated into ours, including the adaptation of their curriculum framework into our model within six months after the acquisition. The Company operational efficiency, obtained through the implementation of pioneer control instruments in the education sector such as efficient classroom management, standard processes and pedagogical plans, together with the intensive use of technology, enables the Company to add new units, courses and students quickly and efficiently, without compromising its profitability. The Company’s unified educational project allows it to effectively control the quality and consistency of its educational practices, disseminating these practices and delivering standard and better educational content throughout its educational network. The Company’s administrative activities are concentrated in its Shared Service Center, which allow it to efficiently implement its expansion plan and generate gains in scale. This model has helped the Company increase the quality and efficiency levels of its internal processes, supporting growth at low incremental costs. The Company believes this structure enables it to expand its operations organically and through acquisitions, generating significant efficiencies from its scalable business model and standardized processes. In addition to inorganic growth opportunities, the Company also believes it has been operationally prepared for the organic growth of its on-campus operations and its digital learning platform.
Differentiated value proposition for students
The Company believes potential students choose their higher education institution based on a combination of four main factors:
(i) Brands with strong appeal in their respective regions: the Company has strong regional brands that are highly recognized by the target audience and the job market for their educational excellence. Grupo Ser Educacional brands are considered Top of Mind in eight cities in the Northeast, North and Southeast regions. The Company’s “Maurício de Nassau” brand has a high recall rate in the higher education industry in the Northeast and North regions, being the most mentioned higher education brand in the State of Pernambuco and one of the most recognized in the other northeastern states, according to surveys conducted by the Company. The Company believes these results are associated with the quality of its education.
Furthermore, such positioning observed in the Company’s brands strengthens the demand for its courses, contributes to its marketing efforts and influences its ability to attract and retain good professionals in the regions where the Company operates.
(ii) Physical and technological infrastructure offered by the institutions: renovated buildings with classrooms equipped with air-conditioning, wi-fi and audiovisual equipment, in addition to modern laboratories. Furthermore, the Company also has a strong technological infrastructure, with an Academic Portal on a digital platform so that its students and teachers can monitor their academic life with access to several information, such as the electronic class register, collegiate tests, financial agreements with us, online applications, enrollment in a new semester, among others;
(iii) Differentiated curriculum matrix: Ubíqua offers a ubiquitous educational model that offers education using active teaching methodologies through a state-of-the-art technological platform that allows students to have a differentiated teaching experience whatever the chosen educational modality (on-campus, hybrid digital) or certification mode (undergraduate, graduate or continuing education) with modern content and high flexibility of creation and new courses and distribution model;
(iv) Creation of an educational ecosystem: we have started to invest in the creation of new formats for the distribution of courses, which included the creation of new undergraduate and graduate formats, which were called digital courses. These courses allow accelerated graduation of students, creation of a wider range of courses, offer of undergraduate and graduate degrees with double certification in partnerships with international educational institutions and companies. Another aspect of this ecosystem is the creation of new forms of commercialization such as the creation of the online sales portal GoKursos (www.gokursos.com.br) which, in addition to our undergraduate and graduate courses already known in the market, now offers free courses and a continuing education model where students can take as many courses as they like for a fixed monthly payment.
In 2021, the Company launched the first fintech focused on serving the continuing education segment, b.Uni (www.buni.digital), which will be an important pillar in the ecosystem, as it will allow it to offer new financial services and generate ancillary revenues for the Company. In March 2022, the Company launched Peixe30 (www.peixe30.com), a social network focused on the new generation of professionals, more dynamic, modern and humanized, which aims to promote networking, visibility and opportunities, free of charge, both for users and for companies. At Peixe30, people can introduce themselves to the market and “sell their fish” by recording videos of up to 30 seconds. One of the platform‘s differentials is the assessment tool, which maps the user‘s behavioral profile using the DISC methodology, that is, soft skills, in addition to automatically generating the curriculum in web or PDF format after filling in the data by part of the user. Peixe30 exceeded the mark of 400 thousand users in less than a year of launch.
The development of its continuing education ecosystem, since 2022, showed significant growth in the representativeness of the Company’s ancillary revenues (recorded in other revenues) in comparison with net revenue, with an average annual growth (CAGR) of 55.1%, rising from R$25,401 thousand on December 31, 2021, to R$61,122 thousand on December 31, 2023, representing 3.3% of net revenue in 2023, compared to 1.8% in 2021. This evolution demonstrates that these initiatives are gradually gaining importance and should become more relevant in the Company’s operations, as they develop.
(v) Prime location and easy access for students. This is a key factor for determining a potential student’s choice of an educational institution and Ser Educacional’s units are strategically located in major capital cities and metropolitan areas in the Northeast, North and Southeast regions, usually close to its target audience’s workplaces or homes, as well as in easily accessible areas with local infrastructure that are convenient for students. This characteristic increased the higher perceived value of both on-campus and digital learning courses among the Company’s target audience, as students enrolled in distance learning courses must periodically go to the units. The Company believes that combination of factors has a significant impact on the value perceived by students. Since location is a key factor in the success of an educational company, the Company will evaluate options that enable it to secure the best properties in the cities where it operates and, at the same time, obtain appropriate returns. The Company also understands that its units are a decisive factor for the growth and expansion of its Digital Learning due to the fact that it has centers for such a service that students must periodically attend.
Quality teaching and cost-effectiveness
The structure we developed has allowed the Company to offer quality education to its students at a more competitive price than our main competitors. The Company’s academic programs, undergraduate and graduate educational services, as well as its faculty, students and facilities have always been consistently evaluated positively by the MEC and by its students. The Company believes this performance reflects its ongoing efforts to improve the quality and infrastructure of its courses. The Company has an academic audit department that standardizes and monitors its academic activities, enabling it to maintain high quality and consistency in all its processes. The Company believes its high educational standards and over 64% of its professors have master’s or PhD degrees that also attract potential students. Our tuition fees are carefully set based on the price charged by its direct competitors at a level that is appropriate for its value proposition and ensures healthy return levels. This is possible because, by improving academic development offered, faculty training and administrative and management functions in its head office, the Company is able to reduce costs related to the administrative and management structure at each unit. This allows the Company to charge affordable tuition fees and continue providing quality educational services for its students.
Professional management and well-established corporate governance
The Company has been focusing on adopting a business philosophy in its operations since inception. The Company’s Management team is comprised of professional executives with extensive experience in the educational industry, particularly in higher education, with a business vision based on clearly defined targets, considerable experience in opening new units, obtaining authorization for new academic programs and acquiring other companies, speeding up the decision-making process. Most of the Company’s senior executives have over 10 years’ experience on average in the industry and have been at the Company for over six years, which it believes ensures greater alignment between the performance of these professioanls and its governance values and practices. In addition, the Company believes strategic partnerships, which bring knowledge and experience complementary to its own, add great value to its business. In addition to the Finance and People, Management and Corporate Governance committees, as of 2021, the Company adopted the non-statutory Audit Committee and, in 2022, established the Innovation Committee. In 2015, Ser Educacional, after approval of a spontaneous proposal by the Company’s management, implemented the Fiscal Council, composed of three full members. Since its implementation in 2015, also as part of Management’s proposal, the Fiscal Council has been reappointed for all subsequent fiscal years.
Last Update on June 21, 2024