UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGNPRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May 2023
Commission File Number: 001-39415
Vasta Platform Limited
(Exact name of registrant as specified in itscharter)
Av. Paulista, 901, 5
th
Floor
Bela Vista
Sao Paulo - SP, 01310-100
Brazil
+55 (11) 3047-2655
(Address of principal executive office)
Indicate by check mark whether the registrant filesor will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
Indicate by check mark if the registrant is submittingthe Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Yes No X
Indicate by check mark if the registrant is submittingthe Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes No X
TABLE OF CONTENTS
ITEM
99.1. Press release dated May 11, 2023 - Vasta Platform Limited announces today
its financial and operating results for the first quarter of 2023.
99.2 Vasta Platform Limited Unaudited Condensed Interim Consolidated Financial Statements
as of March 31, 2023, and for the three-month periods ended March 31, 2023 and 2022.
SIGNATURE
Pursuant to the requirements of the SecuritiesExchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Vasta Platform Limited
By: /s/ Guilherme Alves Melega
Name: Guilherme Alves Melega
Title: Chief Executive Officer
Date: May 11, 2023
Exhibit 99.1
Sao Paulo, May 11, 2023 - VastaPlatform Limited (NASDAQ: VSTA)
- "Vasta" or the "Company" announces today its financial and operatingresults
for the first quarter of 2023 (1Q23) ended March 31, 2023. Financial results
are expressed in Brazilian Reais and are presentedin accordance with
International Financial Reporting Standards (IFRS).
HIGHLIGHTS
Subscription revenue grew by18% (or 22%, excluding PAR) in the 2023
cycle to date. The 2023 Annual Contract Value (ACV) was slightly
less concentrated in the firsttwo quarters (65.1%) than in the previous
year (66.5%), due to the different seasonality and product mix.
In the 2023 cycle to date (4Q22and 1Q23) net revenue increased 17% to R$908 million, in line with our guidance.
In the 2023 cycle to date AdjustedEBITDA grew 10% reaching R$332
million. EBITDA margin decreased 220 bps compared to the same period
in the previous year, from 38,7% to36,5%, mainly due to provision for
doubtful accounts (PDA) made in connection with a large retailer
that entered into bankruptcy proceedingin Brazil and higher inventory
cost caused by rising inflation on paper and production cost.
Those increases were partially offset byoperating efficiency gains,
cost savings and better mix due to subscription products growth.
Adjusted Net Profit in the 2023cycle to date decreased 6% compared to Adjusted
Net Profit in the same period for the 2022 cycle, totaling R$ 98 million.
1Q23 Free cash flow (FCF) totaledR$36 million , a 188% increase from R$13 million in 1Q22. In the
2023 cycle to date, FCF totaled negative R$7 million an 89% increasefrom negative R$65 million
in 2022. The last twelve-month (LTM) FCF/Adjusted EBITDA conversion rate improved from negative 52%
(2Q21-1Q22)to 31% (2Q22-1Q23) as a result of company growth and constant efficiency pursuance.
In the 2023 cycle to date, universityapprovals were another highlight for Vasta's brands. Vasta maintained its
leadership in approvals in Brazil's best universities(according to SISU results - Brazilian Unified Selection System).
Starting in 2023, Vasta startedto offer its products and services to the Brazilian public sector (B2G). Our broad portfolio
of core content solutions, digital platform,and complementary products together with customized learning solutions
tested over decades by the private sector will now be availableto the K-12 public schools. K-12 public sector in
Brazil comprises more than 32 million students, 5 times the number of students in theBrazilian K-12 private sector.
In the first quarter of 2023Vasta acquired a 51% stake in Escola Start Ltda. for R$ 4.5
million. Escola Start will be our flagship school boosting our entrance inthe bilingual
franchise business, responding to an increasingly strong demand of families and students
for academic excellence (poweredby Anglo content), bilingual education, and innovation.
1
MESSAGE FROM MANAGEMENT
With the 1Q23 results reached halfway through the2023 cycle, we have delivered
on our guidance for economic and financial results as anticipated in the
previous quarter. In the 2023 cycleto date (4Q22 and 1Q23), net revenue
increased 17% to R$908 million, and subscription revenue grew 18% (or 22%,
excluding PAR). Complementarysolutions continues to present the highest growth
rate among our business segments with a 44% growth in the cycle to date
compared tothe same period of the previous year. The 2023 ACV was slightly
less concentrated in the first two quarters (65.1%) than in the previousyear
(66.5%), due to the different seasonality and product mix.
Moreover, we continue to see the normalizationof the company's profitability
and cash flow generation. In 1Q23, Adjusted EBITDA grew 10% to R$332 million ,
with a margin of 36.5%,a decrease of 220 bps compared to the same period in
the previous year, as cycle margin was negatively impacted by 170bps due to
provisionfor doubtful accounts (PDA) made in connection with a large retailer
that entered bankruptcy proceeding in Brazil. Moreover, higher inventorycost
caused by rising inflation on paper and production costs were partially offset
by operating efficiency gains, cost savings and bettermix due to subscription
products growth. Free cash flow (FCF) totaled R$36 million in 1Q23, a 188%
increase from R$13 million in 1Q22.In the 2023 cycle to date, FCF totaled
negative R$7 million an 89% increase from negative R$65 million in 2022. The
last twelve-month(LTM) FCF/Adjusted EBITDA conversion rate increased from
negative 52% (2Q21-1Q22) to 31% (2Q22-1Q23).
Another highlight of 2023 is that starting in thefirst semester, we plan to
begin offering our products and services to clients in the public sector
(B2G), in addition to our existingprivate school client base. Our broad
portfolio of core content solutions, digital platform and complementary
services will allow us toaccess a public-school market in need of the
solutions we have developed over decades for private sector. Accordingly, we
have taken certainsteps to (i) create what we believe to be an attractive
portfolio of products and services, focused on state secretariats for
education;(ii) allocate managerial and financial resources for this new
business initiative; (iii) implement certain business-generating and
marketingstrategies for the public sector and (iv) establish a robust
governance process to guarantee the highest compliance standard. The
K-12Public sector in Brazil comprises more than 32 million students, 5X the
Brazilian K-12 Private students.
Start-Anglo, a key pillar of our growth agenda,Start-Anglo continues to grow.
In the first quarter of 2023 we acquired a 51% stake of Escola Start Ltda.
("Start-Anglo"),a flagship school focused on promoting bilingual education
with high performance in order to respond to an increasingly strong demandfrom
families and students for academic excellence, bilingual education, and
innovation. This will be a model-institution for the franchiseproject that we
are launching this year at Bett Brasil, the biggest education event in Latin
America that reaches its 28th edition in2023
.
But more important than the improvement in ouroperating results is the success
of our students. According to the results released in early 2023, Vasta's
brands maintained theleadership in the number of approvals in the admission
tests of Brazil's best universities (according to SISU). The performanceof our
premium brands was particularly highlighted in Medicine, the most competitive
career in the country. Our top-of-mind brand Angloexpanded its leadership in
admissions for Medicine at the University of Sao Paulo (USP), with an increase
of 13% in admitted studentscompared to 2022. The top performance at Brazil's
best universities is among the key attributes considered by K-12 schools
whenchoosing a content partner.
2
OPERATING PERFORMANCE
Student base - subscription models
2023 2022 % Y/Y 2021 % Y/Y
Partner schools - Core content 5,032 5,274 (4.6%) 4,508 17.0%
Partner schools - Complementary solutions 1,383 1,304 6.1% 1,114 17.1%
Students - Core content 1,539,024 1,589,224 (3.2%) 1,335,152 19.0%
Students - Complementary content 453,552 372,559 21.7% 307,941 21.0%
Note: Students enrolled in partnerschools
As we conclude the period of return of collections,we update the number of
partner schools and enrolled students for the 2023 cycle
.
The company servesnearly 1.5 million students with core content solutions. Our
partners school base that use our complementary solutions increased by 79new
schools, growing 6% in the number of students served compared to the previous
cycle. Aligned with the company´s strategy tofocus on improving our
client base in 2023 through a more diversified mix of schools and growth in
premium education systems (Anglo, PHand Fibonacci), brands with a higher
average ticket, lower defaults, greater adoption of complementary solutions
and longer-term relationships.On the other hand, the reduction of our client
base was concentrated on the low-end segment and PAR (paper-based), which have
higher numberof students on average, and a lower margin. Average ticket price
of schools that remain in our client base in 2023 is 11% higher thanthat of
schools that are no longer our clients.
FINANCIAL PERFORMANCE
Net revenue
Values in R$ `000 1Q23 1Q22 % Y/Y 2023 cycle 2022 cycle % Y/Y
Subscription 357,211 333,781 7.0% 801,161 680,624 17.7%
Subscription ex-PAR 325,851 296,713 9.8% 703,227 577,597 21.8%
Traditional learning systems 269,678 251,148 7.4% 554,143 474,299 16.8%
Complementary solutions 56,173 45,565 23.3% 149,084 103,298 44.3%
PAR 31,360 37,067 (15.4%) 97,934 103,027 (4.9%)
Non-subscription 45,624 46,801 (2.5%) 106,693 98,217 8.6%
Total net revenue 402,835 380,581 5.8% 907,854 778,840 16.6%
% ACV 29.0% 33.4% (4.3 p.p.) 65.1% 66.5% (1.3 p.p.)
% Subscription 88.7% 87.7% 1.0 p.p. 88.2% 87.4% 0.9 p.p.
Note: n.m.: not meaningful
In 1Q23, net revenue increased 5.8% compared tothe previous year, to R$403
million. In the 2023 cycle to date (4Q22 and 1Q23), net revenue increased
16.6% to R$908 million, in linewith our guidance. Subscription revenue grew
18%, or 22%, excluding PAR, in the 2023 cycle to date. The ACV 2023 was
slightly less concentratedin the first two quarters (65.1%) than in the
previous year (66.5%), due to the different seasonality and mix of our
products.
3
EBITDA
Values in R$ `000 1Q23 1Q22 % Y/Y 2023 cycle 2022 cycle % Y/Y
Net revenue 402,835 380,581 5.8% 907,854 778,841 16.6%
Cost of goods sold and services (155,126) (129,237) 20.0% (327,203) (265,156) 23.4%
General and administrative expenses (127,281) (126,088) 0.9% (247,169) (252,159) (2.0%)
Commercial expenses (51,061) (47,933) 6.5% (101,266) (93,332) 8.5%
Other operating income 994 933 6.5% (927) 4,286 (121.6%)
Share of loss equity-accounted investees (528) - 0.0% (2,890) - 0.0%
Impairment losses on trade receivables (10,380) (8,896) 16.7% (39,153) (19,624) 99.5%
Profit before financial income and taxes 59,453 69,361 (14.3%) 189,246 152,856 23.8%
(+) Depreciation and amortization 68,804 64,287 7.0% 138,672 125,951 10.1%
EBITDA 128,257 133,648 (4.0%) 327,918 278,807 17.6%
EBITDA Margin 31.8% 35.1% (3.3 p.p.) 36.1% 35.8% 0.3 p.p.
(+) Layoff related to internal restructuring 487 1,459 (66.6%) 1,095 10,871 (89.9%)
(+) Share-based compensation plan 2,666 5,904 (54.8%) 2,773 12,023 (76.9%)
Adjusted EBITDA 131,410 141,011 (6.8%) 331,786 301,700 10.0%
Adjusted EBITDA Margin 32.6% 37.1% (4.4 p.p.) 36.5% 38.7% (2.2 p.p.)
Note: n.m.: not meaningful
In the 2023 commercial cycle to date, AdjustedEBITDA grew 10% to R$332 million
with a margin of 36.5%, representing a decrease of 220 bps. Cycle margin was
negatively impacted by 170bps due to R$15 million provision for doubtful
accounts (PDA) made in connection with a large retailer that entered into
bankruptcy proceedingsin Brazil.
In 2022 we acquired a 45% minority stake in EducbankGestao de Pagamentos
Educacionais S.A. ("Educbank"), which registered a loss in equity-accounted
investees in the amountof R$2.8 million in the 2023 cycle to date, mainly due
to the performance of our equity-accounted investee in its early stage of
operation.
(%) Net Revenue 1Q23 1Q22 Y/Y (p.p.) 2023 cycle 2022 cycle Y/Y (p.p.)
Gross margin 61.5% 66.0% (4.6 p.p.) 64.0% 66.0% (2.0 p.p.)
Adjusted cash G&A expenses (13.6%) (14.1%) 0.4 p.p. (11.9%) (12.7%) 0.8 p.p.
(1)
Commercial expenses (12.7%) (12.6%) (0.1 p.p.) (11.2%) (12.0%) 0.8 p.p.
Impairment on trade receivables (2.6%) (2.3%) (0.2 p.p.) (4.3%) (2.5%) (1.8 p.p.)
Adjusted EBITDA margin 32.6% 37.1% (4.4 p.p.) 36.5% 38.7% (2.2 p.p.)
(1) Sum of general and administrative expenses, otheroperating income and
profit (loss) of equity-accounted investees, less: depreciation and
amortization, layoffs related to internal restructuringand share-based
compensation plan.
In proportion to net revenue, gross margin dropped200 bps in the cycle to date
(from 66% to 64%) mainly due to higher inventory cost caused by rising
inflation on paper and productioncosts while Adjusted cash G&A expenses and
Commercial expenses each reduced by 80 bps due to gains in operating
efficiency, workforceoptimization, cost savings and a sales mix that benefited
from the growth of subscription products.
4
Reported provisions for doubtful accounts (PDA)grew 1.8 p.p. between the
compared commercial cycles. This increase in PDA was due to the provisioning
of 100% of accounts receivablefrom a large Brazilian retail company undergoing
bankruptcy proceedings, in the amount of R$ 15.0 million and represents 1.70
p.p. ofour growth in reported provisions for doubtful accounts in the 2023
commercial cycle to date. Excluding this factor, the participationof PDA in
relation to Vasta's Net Revenue remained stable (2.6% in the 2023 commercial
cycle to date compared to 2.5% in 2022 commercialcycle to date).
Finance Results
Values in R$ `000 1Q23 1Q22 % Y/Y 2023 cycle 2022 cycle % Y/Y
Finance income 16,631 15,269 8.9% 48,850 29,116 67.8%
Finance costs (75,816) (57,963) 30.8% (149,849) (108,972) 37.5%
Total (59,185) (42,694) 38.6% (100,999) (79,856) 26.5%
In the first quarter of 2023, finance income totaledR$16 million, from R$15
million in 1Q22, and in the 2023 cycle to date, finance income increased 67.8%
to R$49 million mainly due to theimpact of higher interest rates on financial
investments and marketable securities. Finance income in the 2023 cycle to
date also includesa R$ 10 million gain due to reversal of tax contingencies
incurred in relation to the acquisition of Somos-Anglo. Finance costs in
1Q23increased 30.8% (quarter-on-quarter), to R$76 million and in the 2023
cycle to date, finance costs increased 37% to R$150 million, drivenby higher
interest rates applicable to bonds and financings, accounts payable on
business combination and provision for tax, civil andlabor losses
.
Net profit (loss)
Values in R$ `000 1Q23 1Q22 % Y/Y 2023 cycle 2022 cycle % Y/Y
Net profit (loss) (2,224) 20,190 (111.0%) 73,669 39,970 84.3%
(+) Layoffs related to internal restructuring 487 1,459 (66.6%) 1,095 10,871 (89.9%)
(+) Share-based compensation plan 2,666 5,904 (54.8%) 2,773 12,023 (76.9%)
(+) Amortization of intangible assets 39,069 38,693 1.0% 78,301 74,649 4.9%
(1)
(-) Income tax contingencies reversal - - 0.0% (29,715) - 0.0%
(-) Tax shield (14,355) (15,659) (8.3%) (27,937) (33,165) (15.8%)
(2)
Adjusted net profit (loss) 25,642 50,587 (49.3%) 98,185 104,349 (5.9%)
Adjusted net margin 6.4% 13.3% (6.9 p.p.) 10.8% 13.4% (2.6 p.p.)
Note: n.m.: not meaningful; (1) From business combinations.(2) Tax shield
(34%) generated by the expenses that are being deducted as net (loss) profit
adjustments.
In the first quarter of 2023, adjusted net profittotaled R$26 million, a 49%
decrease compared to R$51 million in 1Q22. In the 2023 cycle to date, adjusted
net profit reached R$98 million,a 6% decrease from a profit of R$104 million
in the 2022 cycle. The gain related to the reversal of tax contingencies
incurred in relationto the acquisition of Somos-Anglo, impacting corporate tax
and finance results, was adjusted as a one-off gain that benefited the
2023cycle results.
5
Accounts receivable and PDA
Values in R$ `000 1Q23 1Q22 % Y/Y 4Q22 % Q/Q
Gross accounts receivable 784,681 628,771 24.8% 718,616 9.2%
Provision for doubtful accounts (PDA) (72,253) (52,383) 37.9% (69,481) 4.0%
Coverage index 9.2% 8.3% 0.9 p.p. 9.7% (0.5 p.p.)
Net accounts receivable 712,428 576,388 23.6% 649,135 9.8%
Average days of accounts receivable 199 198 1 185 14
(1)
(1) Balance of net accounts receivable divided by thelast-twelve-month net
revenue, multiplied by 360.
The average payment term of Vasta's accountsreceivable portfolio was 199 days
in the 1Q23, 1 day higher than the first quarter of the previous year.
Free cash flow
Values in R$ `000 1Q23 1Q22 % Y/Y 2023 cycle 2022 cycle % Y/Y
Cash from operating activities 94,647 76,855 23.2% 100,911 39,482 155.6%
(1)
(-) Income tax and social contribution paid (331) (523) (36.7%) (4,748) (523) 807.8%
(-) Payment of provision for tax, civil and labor losses (190) (180) 5.6% (245) (293) (16.3%)
(-) Interest lease liabilities paid (3,668) (3,750) (2.2%) (7,796) (6,878) 13.4%
(-) Acquisition of property, plant, and equipment (5,256) (34,435) (84.7%) (15,797) (45,893) (65.6%)
(-) Additions of intangible assets (38,638) (19,716) 96.0% (62,407) (38,831) 60.7%
(-) Lease liabilities paid (10,334) (5,654) 82.8% (16,928) (12,344) 37.1%
Free cash flow (FCF) 36,230 12,597 187.6% (7,009) (65,278) (89.3%)
FCF/Adjusted EBITDA 27.6% 8.9% 18.6 p.p. (2.1%) (21.6%) 19.5 p.p.
LTM FCF/Adjusted EBITDA 30.8% (51.8%) 82.6 p.p. 30.8% (51.8%) 82.6 p.p.
(1) Net (loss) profit less non-cash items less and changesin working capital.
Note: n.m.: not meaningful
Free cash flow (FCF) totaled R$36 million in 1Q23,a 188% increase from R$13
million in 1Q22. In the 2023 cycle to date, FCF totaled negative R$7 million
an 89% increase from negative R$65million in 2022. The last twelve-month (LTM)
FCF/Adjusted EBITDA conversion rate improved from negative 52% (2Q21-1Q22) to
31% (2Q22-1Q23).
Financial leverage
Values in R$ `000 1Q23 4Q22 3Q22 2Q22 1Q22
Financial debt 815,927 842,996 811,612 844,778 817,516
Accounts payable from business combinations 599,713 625,277 647,466 585,503 570,660
Total debt 1,415,640 1,468,273 1,459,078 1,430,281 1,388,176
Cash and cash equivalents 42,680 45,765 44,343 147,762 145,998
Marketable securities 331,110 380,516 433,803 417,770 303,675
Net debt 1,041,850 1,041,992 980,932 864,749 938,504
Net debt/LTM adjusted EBITDA 2.85 2.78 2.92 3.04 3.67
(1)
(1) LTM adjusted EBITDA includes Eleva. Eleva'sLTM adjusted EBITDA prior to
November 2021 may not reflect Vasta's accounting standards.
As of the end of 1Q23, Vasta recorded net debt in the amount of R$1,042million,
equal to the net debt position of 4Q22. The impacts of higher interest rates
was offset by the cash flow generated in the period.The net debt/LTM
6
adjusted EBITDA of 2.85x as of 1Q23 is 0.07x higher than 4Q22, but 0.82xlower
than 1Q22. In comparison to 1Q22, the net debt position increased by R$ 103
million, due to the impact of higher interest ratesand investments made in the
minority-stake acquisitions of Educbank (in July 2022) and Phidellis (in
February 2022), both of which werepartially offset our positive cash flow
generated in the period.
7
ESG
Since 2Q22, Vasta reports updates about its ESGstandards, including a panel of
key ESG indicators, in line with the topics identified in the materiality
process. Annual consolidateddata is available in Vasta's Sustainability
Report, which can be found
here
.
Check below the main highlights of ESG in the firstquarter of 2023.
Global Compact
In December, Vasta signed the ten principles ofthe UN Global Compact on human
rights, labor, environment, and anti-corruption. The movement reinforces the
Company's commitment to sustainabledevelopment and the best ESG practices.
Corporate Sustainability Assessment -S&P
Vasta was ranked 6th globally by S&P Global´sCorporate Sustainability
Assessment in Consumer Services category - being a pioneer among peers. It is
important to highlight that itwas the first year that the questionnaire was
answered by the Company, already in a prominent position.
Key Indicators
ENVIRONMENT
SDGs GRI Water withdrawn by source Unit 2Q22 3Q22 4Q22 1Q23
2
(m^3)
6 303-3 Ground water m^3 2,674 3,438 2,771 1,930
Utility supply m^3 187 127 0 936
Total m^3 2,861 3,565 2,771 2,866
SDGs GRI Internal energy consumption Unit 2Q22 3Q22 4Q22 1Q23
12 and 13 302-1 Total energy consumed GJ 1,348 1,523 1,934 3,087
Percentage of energy from renewable sources % 97% 98% 98% 68%
3
We expanded the scope covered in energy consumptiondata. Surveying four more
locations, we now include all current VASTA units in the total, which explains
the significant increase in ourenergy consumption. Furthermore, since these
aggregate units are not in the free energy market model, the percentage of
energy from renewablesources decreased compared to the previous period.
8
SOCIAL
SDGs GRI Diversity in the work force Unit 2Q22 3Q22 4Q22 1Q23
by functional category
5 405-1 C-level - Women % of people 20% 25% 25% 25%
C-level - Men % of people 80% 75% 75% 75%
Total - C-level No. of people 5 4 4 4
4
Leaders - Women (≥ % of people 47% 48% 47% 46%
management level)
Leaders - Men (≥ % of people 53% 52% 53% 54%
management level)
Total - Leaders (≥ No. of people 131 134 134 144
management level)
5
Academic faculty % of people 31% 80% 19% 21%
- Women
Academic faculty - Men % of people 69% 20% 81% 79%
Total - Academic No. of people 100 84 83 85
faculty
6
Coordinators and % of people 57% 57% 56% 21%
Administrative - Women
Coordinators and % of people 43% 43% 46% 79%
Administrative - Men
Total - Coordinators No. of people 1,521 1,539 1.516 1.493
and Administrative
7
Total - Women % of people 54% 54% 54% 55%
Total - Men % of people 46% 46% 46% 45%
Total - Employees No. of people 1,757 1,761 1.737 1.729
SDGs GRI Indirect Unit 2Q22 3Q22 4Q22 1Q23
economic impact
11 - Scholarship holders in n^o 371 365 349 247
Somos Futuro program
SDGs GRI Occupational Unit 2Q22 3Q22 4Q22 1Q23
Health and Safety
3 403-5, 403-9 % of units covered by the % 100% 100% 100% 100%
Environmental Risk Prevention Program
Total employees trained No. of people 110 346 710 543
in health and safety
8
Total number of hours No. 2,871 375 618 348
training in health and safety
Average number of hours training in No. 4.4 1.1 1,2 1,6
health and safety per participant
9
Total number of hours of on-site No. 408 56 0 0
training for fire brigade
Average number of hours of on-site No. 8.0 8 0 0
training for fire brigade per participant
9
Employees - Injury rate 3.75 4.06 3,89 3,17
frequency rate
10
Employees - High-consequence rate 0.00 0,00 0,00 0,00
injuries rate
11
Employees - Recordable rate 0.94 3.04 0,00 1,06
injuries rate
12
Employees - rate 0.00 0.00 0,00 0,00
Fatality rate
13
Diversity
As of the end of the first quarter of 2023, ourtotal headcount was 1,729. In
terms of gender diversity, 46% of leadership positions (management and above)
are held by women. Women accountfor 21% of academic staff. We are committed
9
to increasing diversity in our workforce. One ofthe initiatives is SOMOS Afro,
a program of internships exclusively aimed at black people, a talent
development initiative that continuedthroughout the first quarter.
Indirect Economic Impact
We continued the Somos Futuro Program, an initiativeaimed at accelerating the
education of public-school students. In the first quarter, 247 young people
enrolled in the high school program,which in addition to the scholarship
offered by the school includes didactic and supplementary material, online
tutoring, mentoring, andaccess to the program's entire support network, which
includes psychological counseling. This action is carried out through our
socialarm, SOMOS Institute.
Health and Safety
Vasta has a health and safety management system (SST) that nurturesa safe and
healthy environment for all employees, preventing accidents and occupational
diseases.
GOVERNANCE
SDGs GRI Ethical behavior Unit 2Q22 3Q22 4Q22 1Q23
8, 16 205-1, Employees trained in anti-corruption % of people 100% 100% 100% 100%
205-2, 205-3 policies and procedures
Operations submitted to % of operations 100% 100% 100% 100%
corruption-related risk assessment
Number of confirmed No. of cases 0 0 0 0
cases of corruption
SDGs GRI Data privacy and Unit 2Q22 3Q22 4Q22 1Q23
infrastructure
16 418-1 Substantiated complaints No. 28 20 17 19
received from outside parties
Substantiated complaints No. 0 0 0 0
received from regulatory bodies
Identified leaks, thefts, No. 0 0 0 0
or losses of customer data
SDGs GRI Diversity in the Unit 2Q22 3Q22 4Q22 1Q23
Board of Directors
5 405-1 Women % of people 29% 29% 29% 29%
Men % of people 71% 71% 71% 71%
Total n^o of people 7 7 7 7
Ethical behavior
We have enhanced our internal procedures to advanceethical conduct in our
business by initiating due diligence processes for critical suppliers and in
mergers and acquisitions (M&A).Previously, our due diligence efforts focused
on contracts involving governmental entities.
Data Privacy
Our Privacy Portal received 28 requests in thefirst quarter of 2023, of which
19 were considered valid, i.e., involving issues related to the rights of a
data subject, pursuant tothe Brazilian General Data Protection Law. In
general, the requests involved the correction, updating and/or modification of
personalinformation.
10
FOOTNOTES:
SDG Sustainable Development Goal. Indicates goal
to which the actions monitored contribute.
GRI Global Reporting Initiative. Lists the GRI
standard indicators related to the data monitored.
NA Indicator discontinued or not measured in the quarter.
1 Quarterly monitoring of a selection of material indicators. For
further information, consult our Sustainability Report, available
here
.
2 Based on invoices from sanitation concessionaires.
3 Acquired from the free energy market.
4 CEO, vice presidents reporting
directly to the CEO and all directors.
5 Management, senior management and leadership positions not reporting directly
to the CEO (regional directors, unit directors and vice presidents).
6 Course coordinators, teachers, and tutors.
7 Corporate coordination, academic coordination,
specialists, adjuncts, assistants, and analysts.
8 All the employees undergoing training in the period.
9 Total hours of training/employees trained.
10 Total accidents (with and without leave)/
Total man/hours worked (MHW) x 1,000,000.
11 Work-related injury (excluding fatalities) from which the worker cannot recover fully to
pre-injury health status within 6 months. Formula: Number of injuries/MHW x 1.000.000.
12 (Accidents with leave + Fatalities)/ MHT x 1,000,000.
13 Fatalities/ MHW x 1,000,000.
CONFERENCE CALL INFORMATION
Vasta will discussits first quarter 2023 results on May 11, 2023, via a
conference call at 6:00 p.m. Eastern Time. To access the call [(ID: 3871721),
pleasedial: +1 (888) 660-6819 or +1 (929) 203-1989]. A live and archived
webcast of the call will be available on the Investor Relations sectionof the
Company's website at
https://ir.vastaplatform.com
.
ABOUT VASTA
Vasta is a leading, high-growtheducation company in Brazil powered by
technology, providing end-to-end educational and digital solutions that cater
to all needs of privateschools operating in the K-12 educational segment,
ultimately benefiting all of Vasta's stakeholders, including students,
parents,educators, administrators, and private school owners. Vasta's mission
is to help private K-12 schools to be better and more profitable,supporting
their digital transformation. Vasta believes it is uniquely positioned to help
schools in Brazil undergo the process of digitaltransformation and bring their
education skill set to the 21st century. Vasta promotes the unified use of
technology in K-12 educationwith enhanced data and actionable insight for
educators, increased collaboration among support staff and improvements in
production, efficiencyand quality. For more information, please visit
ir.vastaplatform.com.
CONTACT
Investor Relations
ir@vastaplatform.com
11
FORWARD-LOOKING STATEMENTS
This press release contains forward-lookingstatements that can be identified
by the use of forward-looking words such as "anticipate," "believe,"
"could,""expect," "should," "plan," "intend," "estimate" and "potential,"among
others. Forward-looking statements appear in a number of places in this press
release and include, but are not limited to, statementsregarding our intent,
belief or current expectations. Forward-looking statements are based on our
management's beliefs and assumptionsand on information currently available to
our management. Such statements are subject to risks and uncertainties, and
actual results maydiffer materially from those expressed or implied in the
forward-looking statements due to of various factors, including (i) general
economic,financial, political, demographic and business conditions in Brazil,
as well as any other countries we may serve in the future and theirimpact on
our business; (ii) fluctuations in interest, inflation and exchange rates in
Brazil and any other countries we may serve inthe future; (iii) our ability to
implement our business strategy and expand our portfolio of products and
services; (iv) our ability toadapt to technological changes in the educational
sector; (v) the availability of government authorizations on terms and
conditions andwithin periods acceptable to us; (vi) our ability to continue
attracting and retaining new partner schools and students; (vii) our abilityto
maintain the academic quality of our programs; (viii) the availability of
qualified personnel and the ability to retain such personnel;(ix) changes in
the financial condition of the students enrolling in our programs in general
and in the competitive conditions in theeducation industry; (x) our
capitalization and level of indebtedness; (xi) the interests of our
controlling shareholder; (xii) changesin government regulations applicable to
the education industry in Brazil; (xiii) government interventions in education
industry programs,that affect the economic or tax regime, the collection of
tuition fees or the regulatory framework applicable to educational
institutions;(xiv) cancellations of contracts within the solutions we
characterize as subscription arrangements or limitations on our ability to
increasethe rates we charge for the services we characterize as subscription
arrangements; (xv) our ability to compete and conduct our businessin the
future; (xvi) our ability to anticipate changes in the business, changes in
regulation or the materialization of existing and potentialnew risks; (xvii)
the success of operating initiatives, including advertising and promotional
efforts and new product, service and conceptdevelopment by us and our
competitors; (xviii) changes in consumer demands and preferences and
technological advances, and our abilityto innovate to respond to such changes;
(xix) changes in labor, distribution and other operating costs; our compliance
with, and changesto, government laws, regulations and tax matters that
currently apply to us; (xx) the effectiveness of our risk management policies
andprocedures, including our internal control over financial reporting; (xxi)
health crises, including due to pandemics such as the COVID-19pandemic and
government measures taken in response thereto; (xxii) other factors that may
affect our financial condition, liquidity andresults of operations; and
(xxiii) other risk factors discussed under "Risk Factors." Forward-looking
statements speak onlyas of the date they are made, and we do not undertake any
obligation to update them in light of new information or future developmentsor
to release publicly any revisions to these statements in order to reflect
later events or circumstances or to reflect the occurrenceof unanticipated
events.
12
NON-GAAP FINANCIAL MEASURES
This press release presents ourEBITDA, Adjusted EBITDA and Adjusted net (loss)
profit and Free cash flow (FCF), which is information provided for the
convenience ofinvestors. EBITDA and Adjusted EBITDA are among the key
performance indicators used by us to measure financial operating performance.Our
management believes that these Non-GAAP financial measures provide useful
information to investors and shareholders. We also use thesemeasures
internally to establish budgets and operational goals to manage and monitor
our business, evaluate our underlying historicalperformance and business
strategies and to report our results to the board of directors.
We calculate EBITDA as net (loss)profit for the period/year plus income taxes
and social contribution plus/minus net finance result plus depreciation and
amortization.The EBITDA measure provides useful information to assess our
operational performance.
We calculate Adjusted EBITDA asEBITDA plus/minus: (a) income tax and social
contribution; (b) net finance result; (c) depreciation and amortization; (d)
share-basedcompensation expenses, mainly due to the grant of additional shares
to Somos' employees in connection with the change of controlof Somos to Cogna
(for further information refer to note 23 to the audited consolidated
financial statements); (e) provision for risksof tax, civil and labor losses
regarding penalties, related to income tax positions taken by the Predecessor
Somos - Anglo and Vastain connection with a corporate reorganization carried
out by the Predecessor Somos - Anglo; (f) Bonus IPO, which refers to bonuspaid
to certain executives and employees based on restricted share units; and (g)
expenses with contractual termination of employees dueto organizational
restructuring. We understand that such adjustments are relevant and should be
considered when calculating our AdjustedEBITDA, which is a practical measure
to assess our operational performance that allows us to compare it with other
companies that operatesin the same segment.
We calculate Adjusted net (loss)profit as the (loss) profit for the
period/year as presented in Statement of Profit or Loss and Other
Comprehensive Income adjusted bythe same Adjusted EBITDA items, however, added
by (a) Amortization of intangible assets from Business Combination and (b) Tax
shield of34% generated by the aforementioned adjustments.
We calculate Operating cash flow(OCF) as the cash from operating activities as
presented in the Statement of Cash Flows less (a) income tax and social
contribution paid;(b) tax, civil and labor proceedings paid; (c) interest
lease liabilities paid; (d) acquisition of property, plant and equipment;
(e)additions to intangible assets; and (f) lease liabilities paid.
We understand that, although Adjustednet (loss) profit, EBITDA, Adjusted
EBITDA, and Operating cash flow (OCF) are used by investors and securities
analysts in their evaluationof companies, these measures have limitations as
analytical tools, and you should not consider them in isolation or as
substitutes foranalysis of our results of operations as reported under IFRS.
Additionally, our calculations of Adjusted net (loss) profit, Adjusted
EBITDA,and Operating cash flow (OCF) may be different from the calculation
used by other companies, including our competitors in the educationservices
industry, and therefore, our measures may not be comparable to those of other
companies.
13
REVENUE RECOGNITION AND SEASONALITY
Our main deliveries of printedand digital materials to our customers occur in
the last quarter of each year (typically in November and December), and in the
first quarterof each subsequent year (typically in February and March), and
revenue is recognized when the customers obtain control over the materials.In
addition, the printed and digital materials we provide in the fourth quarter
are used by our customers in the following school yearand, therefore, our
fourth quarter results reflect the growth in the number of our students from
one school year to the next, leadingto higher revenue in general in our fourth
quarter compared with the preceding quarters in each year. Consequently, in
aggregate, theseasonality of our revenues generally produces higher revenues
in the first and fourth quarters of our fiscal year. Thus, the numbersfor the
second quarter and third quarter are usually less relevant. In addition, we
generally bill our customers during the first halfof each school year (which
starts in January), which generally results in a higher cash position in the
first half of each year comparedto the second half.
A significant part of our expensesis also seasonal. Due to the nature of our
business cycle, we need significant working capital, typically in September or
October of eachyear, to cover costs related to production and inventory
accumulation, selling and marketing expenses, and delivery of our teaching
materialsat the end of each year in preparation for the beginning of each
school year. As a result, these operating expenses are generally incurredbetween
September and December of each year.
Purchases through our Livro Facile-commerce platform are also very intense
during the back-to-school period, between November, when school enrollment
takes place and familiesplan to anticipate the purchase of products and
services, and February of the following year, when classes are about to start.
Thus, e-commercerevenue is mainly concentrated in the first and fourth
quarters of the year.
KEY BUSINESS METRICS
ACV Bookings is a non-accountingmanagerial metric and represents our partner
schools' commitment to pay for our solutions offerings. We believe it is a
meaningfulindicator of demand for our solutions. We consider ACV Bookings is a
helpful metric because it is designed to show amounts that we expectto be
recognized as revenue from subscription services for the 12-month period
between October 1 of one fiscal year through September30 of the following
fiscal year. We define ACV Bookings as the revenue we would expect to
recognize from a partner school in each schoolyear, based on the number of
students who have contracted our services, or "enrolled students," that will
access our contentat such partner school in such school year. We calculate ACV
Bookings by multiplying the number of enrolled students at each school withthe
average ticket per student per year; the related number of enrolled students
and average ticket per student per year are each calculatedin accordance with
the terms of each contract with the related school. Although our contracts
with our schools are typically for 4-yearterms, we record one year of revenue
under such contracts as ACV Bookings. ACV Bookings are calculated based on the
sum of actual contractssigned during the sales period and assumes the
historical rates of returned goods from customers for the preceding 24-month
period. Sincethe actual rates of returned goods from sales during the period
may be different from the historical average rates and the actual volumeof
merchandise ordered by our customers may be different from the contracted
amount, the actual revenue recognized during each periodof a sales cycle may
be different from the ACV Bookings for the respective sales cycle. Our
reported ACV Bookings are subject to risksassociated with, among other things,
economic conditions and the markets in which we operate, including risks that
our contracts may becanceled or adjusted (including as a result of the
COVID-19 pandemic).
14
FINANCIAL STATEMENTS
Consolidated Statements of Financial Position
Assets March 31, 2023 December 31, 2022
Current assets
Cash and cash equivalents 42,680 45,765
Marketable securities 331,110 380,514
Trade receivables 712,428 649,135
Inventories 263,220 266,450
Taxes recoverable 33,608 19,120
Income tax and social contribution recoverable 19,152 17,746
Prepayments 77,227 56,645
Other receivables 2,244 972
Related parties - other receivables 993 1,759
Total current assets 1,482,662 1,438,106
Non-current assets
Judicial deposits and escrow accounts 189,727 194,859
Deferred income tax and social contribution 169,812 170,851
Equity accounted investees 82,611 83,139
Other investments and interests in entities 8,272 8,272
Property, plant and equipment 191,192 197,688
Intangible assets and goodwill 5,421,458 5,427,676
Total non-current assets 6,063,072 6,082,485
Total Assets 7,545,734 7,520,591
15
Consolidated Statements of Financial Position(continued)
Liabilities March 31, 2023 December 31, 2022
Current liabilities
Bonds 66,455 93,779
Suppliers 223,457 250,647
Reverse factoring 199,116 155,469
Lease liabilities 24,196 23,151
Income tax and social contribution payable - 5,564
Salaries and social contributions 132,631 100,057
Contractual obligations and deferred income 85,844 57,852
Accounts payable for business combination and acquisition of associates 48,577 73,007
Other liabilities 33,689 29,630
Other liabilities - related parties 430 54
Total current liabilities 814,395 789,210
Non-current liabilities
Bonds 749,472 749,217
Lease liabilities 115,140 117,412
Accounts payable for business combination and acquisition of associates 551,136 552,270
Provision for tax, civil and labor losses 655,123 651,252
Other liabilities 26,862 31,551
Total non-current liabilities 2,097,733 2,101,702
Total current and non-current liabilities 2,912,128 2,890,912
Shareholder's Equity
Share capital 4,820,815 4,820,815
Capital reserve 83,189 80,531
Treasury shares (23,880) (23,880)
Accumulated losses (250,065) (247,787)
Total Shareholder's Equity 4,630,059 4,629,679
Interest of non-controlling shareholders 3,547 -
Total Liabilities and Shareholder's Equity 4,633,606 4,629,679
Total Liabilities and Shareholder's Equity 7,545,734 7,520,591
16
Consolidated Income Statement
March 31, 2023 March 31, 2022
Net revenue from sales and services 402,835 380,581
Sales 393,688 371,886
Services 9,147 8,695
Cost of goods sold and services (155,126) (129,237)
Gross profit 247,709 251,344
Operating income (expenses) (187,728) (181,984)
General and administrative expenses (127,281) (126,088)
Commercial expenses (51,061) (47,933)
Other operating income 994 933
Impairment losses on trade receivables (10,380) (8,896)
Share of loss of equity-accounted investees (528) -
Profit before finance result and taxes 59,453 69,360
Finance result (59,185) (42,694)
Finance income 16,631 15,269
Finance costs (75,816) (57,963)
Profit before income tax and social contribution 268 26,666
Income tax and social contribution (2,492) (6,476)
Current (1,454) (5,523)
Deferred (1,038) (953)
Net (loss) profit for the period (2,224) 20,190
Allocated to:
Controlling shareholders (2,278) 20,190
Non-controlling shareholders 54 -
17
Consolidated Statement of Cash Flows
For the period ended March 31,
2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax and social contribution 268 26,666
Adjustments for:
Depreciation and amortization 68,804 64,287
Depreciation to digital book 2,028 -
Share of loss profit of equity-accounted investees 528 -
Impairment losses on trade receivables 10,380 8,896
Reversal for tax, civil and labor risks, net (4,423) (6,109)
Interest on provision for tax, civil and labor losses 8,485 11,454
Provision for obsolete inventories 3,023 6,780
Interest on bonds 30,591 23,975
Contractual obligations and right to returned goods 4,762 (10,732)
Interest on accounts payable for business combination 18,031 13,694
Imputed interest on suppliers 7,074 -
Share-based payment expense 2,658 4,126
Interest on lease liabilities 3,385 3,596
Interest on marketable securities (9,417) (11,459)
Cancellations of right-of-use contracts 3,053 -
Residual value of disposals of property and equipment and intangible assets 3 (1,285)
149,233 133,889
Changes in
Trade receivables (72,466) (79,574)
Inventories 556 26,787
Prepayments (20,520) (17,266)
Taxes recoverable (17,220) (2,434)
Judicial deposits and escrow accounts 5,132 1,245
Other receivables (16) 1,123
Related parties - other receivables 766 (625)
Suppliers 2,125 (3,568)
Salaries and social charges 32,097 13,153
Tax payable (5,474) (5,852)
Contractual obligations and deferred income 20,464 13,976
Other liabilities (406) 4,880
Other liabilities - related parties 376 (8,879)
Cash from operating activities 94,647 76,855
Payment of interest on leases (3,668) (3,750)
Payment of interest on bonds (57,914) (37,640)
Payment of interest on business combinations (15,820) -
Income tax and social contribution paid (331) (523)
Payment of provision for tax, civil and labor losses (190) (180)
Net cash from operating activities 16,724 34,762
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment (5,256) (34,435)
Additions of intangible assets (38,638) (19,716)
Acquisition of subsidiaries net of cash acquired (3,205) (8,475)
Purchase of investment in marketable securities (362,606) (707,080)
Proceeds from investment in marketable securities 421,427 581,214
Net cash from (applied in) investing activities 11,722 (188,492)
CASH FLOWS FROM FINANCING ACTIVITIES
Lease liabilities paid (10,334) (5,654)
Payments of accounts payable for business combination (21,197) (4,511)
Net cash from (applied in) financing activities (31,531) (10,165)
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,085) (163,895)
Cash and cash equivalents at beginning of period 45,765 309,893
Cash and cash equivalents at end of period 42,680 145,998
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,085) (163,895)
18
Exhibit 99.2
VASTA Platform Limited
Unaudited Condensed Interim Consolidated Financial Statements
Three-month period ended March 31, 2023
1
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
CONTENT
Unaudited Condensed Interim Consolidated Financial Page
Statements as of three-month period ended March 31, 2023
Unaudited Condensed Interim Consolidated Statements of 3
Financial Position as of March 31, 2023 and December 31, 2022
Unaudited Condensed Interim Consolidated Statements of Profit or Loss and Other 5
Comprehensive Income for the three-month periods ended March 31, 2023 and 2022
Unaudited Condensed Interim Consolidated Statements of Changes in 6
Equity for the three-month periods ended March 31, 2023 and 2022
Unaudited Condensed Interim Consolidated Statements of Cash 7
Flows for the three-month periods ended March 31, 2023 and 2022
Notes to the Unaudited Condensed Interim 8
Consolidated Financial Statements
2
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Unaudited Condensed Interim Consolidated Statements of FinancialPosition as of
March 31, 2023 and December 31, 2022
Assets Note March 31, 2023 December 31, 2022
Current assets
Cash and cash equivalents 7 42,680 45,765
Marketable securities 8 331,110 380,514
Trade receivables 9 712,428 649,135
Inventories 10 263,220 266,450
Taxes recoverable 33,608 19,120
Income tax and social contribution recoverable 19,152 17,746
Prepayments 77,227 56,645
Other receivables 2,244 972
Related parties - other receivables 19 993 1,759
Total current assets 1,482,662 1,438,106
Non-current assets
Judicial deposits and escrow accounts 21.b 189,727 194,859
Deferred income tax and social contribution 22 169,812 170,851
Equity accounted investees 11 82,611 83,139
Other investments and interests in entities 8,272 8,272
Property, plant and equipment 12 191,192 197,688
Intangible assets and goodwill 13 5,421,458 5,427,676
Total non-current assets 6,063,072 6,082,485
Total Assets 7,545,734 7,520,591
The accompanying notes are an integral partof this Unaudited Condensed Interim
Consolidated Financial Statements.
3
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Unaudited Condensed Interim Consolidated Statements of FinancialPosition as of
March 31, 2023 and December 31, 2022
Liabilities Note March 31, 2023 December 31, 2022
Current liabilities
Bonds 14 66,455 93,779
Suppliers 15 223,457 250,647
Reverse factoring 15 199,116 155,469
Lease liabilities 16 24,196 23,151
Income tax and social contribution payable - 5,564
Salaries and social contributions 19 132,631 100,057
Contractual obligations and deferred income 17 85,844 57,852
Accounts payable for business combination and acquisition of associates 18 48,577 73,007
Other liabilities 33,689 29,630
Other liabilities - related parties 20 430 54
Total current liabilities 814,395 789,210
Non-current liabilities
Bonds 14 749,472 749,217
Lease liabilities 16 115,140 117,412
Accounts payable for business combination and acquisition of associates 18 551,136 552,270
Provision for tax, civil and labor losses 21.a 655,123 651,252
Other liabilities 26,862 31,551
Total non-current liabilities 2,097,733 2,101,702
Total current and non-current liabilities 2,912,128 2,890,912
Shareholder's Equity
Share capital 23.1 4,820,815 4,820,815
Capital reserve 23.3 83,189 80,531
Treasury shares 23.4 (23,880) (23,880)
Accumulated losses (250,065) (247,787)
Total Shareholder's Equity 4,630,059 4,629,679
Interest of non-controlling shareholders 3,547 -
Total Shareholder's Equity 4,633,606 4,629,679
Total Liabilities and Shareholder's Equity 7,545,734 7,520,591
The accompanying notes are an integral partof this Unaudited Condensed Interim
Consolidated Financial Statements.
4
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Unaudited Condensed Interim Consolidated Statements of Profit orLoss and Other
Comprehensive Income for the three-month periods ended March 31, 2023, and 2022
Note March 31, 2023 March 31, 2022
Net revenue from sales and services 24 402,835 380,581
Sales 393,688 371,886
Services 9,147 8,695
Cost of goods sold and services 25 (155,126) (129,237)
Gross profit 247,709 251,344
Operating income (expenses)
General and administrative expenses 25 (127,281) (126,088)
Commercial expenses 25 (51,061) (47,933)
Other operating income 25 994 933
Impairment losses on trade receivables 25 (10,380) (8,896)
Share of loss equity-accounted investees 11 (528)
Profit before finance result and taxes 59,453 69,360
Finance result
Finance income 26 16,631 15,269
Finance costs 26 (75,816) (57,963)
(59,185) (42,694)
Profit before income tax and social contribution 268 26,666
Income tax and social contribution (2,492) (6,476)
Current 21 (1,454) (5,523)
Deferred 21 (1,038) (953)
(Loss) profit for the period (2,224) 20,190
Other comprehensive income for the year - -
Allocated to:
Controlling shareholders (2,278) 20,190
Non-controlling shareholders 54 -
(Loss) profit per share (in %)
Basic 22.2 (0.03) 0.24
Diluted 22.2 (0.03) 0.24
The accompanying notes are an integral partof this Unaudited Condensed Interim
Consolidated Financial Statements.
5
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Unaudited Condensed Interim Consolidated Statements of Changes inEquity for
the three-month periods ended March 31, 2023 and 2022
Share Capital
capital reserve
Share Share Share-based Share-based Treasury Accumulated Total Non-controlling T
Capital issuance compensation compensation shares losses Shareholders' shareholders Non-control
costs reserve reserve (Note Equity/ Sharehold
(granted) (vested) 23d) Net Equ
Investment
Invest
Balance 4,961,988 (141,173) 30,445 31,043 (23,880) (193,214) 4,665,209 - 4,665
as of
December
31,
2021
Profit - - - - - 20,190 20,190 - 20
for
the
period
Share - - 4,126 - - - 4,126 - 4
based
compensations
granted
and
issued
Balance 4,961,988 (141,173) 34,571 31,043 (23,880) (173,024) 4,689,525 - 4,689
as
of
March
31,
2022(unaudited)
Balance 4,961,988 (141,173) 46,245 34,286 (23,880) (247,787) 4,629,679 - 4,629
as of
December
31,
2022
Loss - - - - - (2,278) (2,278) 54 (2,
for
the
period
Share - - 2,658 - - - 2,658 - 2
based
compensations
granted
and
issued
Non-controlling - - - - - - - 3,493 3
shareholders
Share - - (36) 36 - - - -
based
compensations
vested
Balance 4,961,988 (141,173) 48,867 34.322 (23,880) (250,065) 4,630,059 3,547 4,633
as
of
March
31,2023
(unaudited)
otal
ling
ers'
ity/
Net
ment
,209
,190
,126
,525
,679
224)
,658
,493
-
,606
The accompanying notes are an integral partof this Unaudited Condensed Interim
Consolidated Financial Statements.
6
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Unaudited Condensed Interim Consolidated Statements of Cash Flowsfor the
three-month periods ended March 31, 2023 and 2022
For the period ended March 31,
Notes 2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax and social contribution 268 26,666
Adjustments for:
Depreciation and amortization 12 and 13 68,804 64,287
Depreciation to digital book 2,028 -
Share of loss profit of equity-accounted investees 11 528 -
Impairment losses on trade receivables 9 10,380 8,896
Reversal for tax, civil and labor losses, net (4,423) (6,109)
Interest on provision for tax, civil and labor losses 26 8,485 11,454
Provision for obsolete inventories 10 3,023 6,780
Interest on bonds 14 30,591 23,975
Contractual obligations and right to returned goods 4,762 (10,732)
Interest on accounts payable for business combination 26 18,031 13,694
Imputed interest on suppliers 26 7,074 -
Share-based payment expense 2,658 4,126
Interest on lease liabilities 16 3,385 3,596
Interest on marketable securities 25 (9,417) (11,459)
Cancellations of right-of-use contracts 3,053 -
Residual value of disposals of property and equipment and intangible assets 12 and 13 3 (1,285)
149,233 133,889
Changes in
Trade receivables (72,466) (79,574)
Inventories 556 26,787
Prepayments (20,520) (17,266)
Taxes recoverable (17,220) (2,434)
Judicial deposits and escrow accounts 5,132 1,245
Other receivables (16) 1,123
Related parties - other receivables 766 (625)
Suppliers 2,125 (3,568)
Salaries and social charges 32,097 13,153
Tax payable (5,474) (5,852)
Contractual obligations and deferred income 20,464 13,976
Other liabilities (406) 4,880
Other liabilities - related parties 376 (8,879)
Cash from operating activities 94,647 76,855
Payment of interest on leases 16 (3,668) (3,750)
Payment of interest on bonds 14 (57,914) (37,640)
Payment of interest on business combinations 18 (15,820) -
Income tax and social contribution paid (331) (523)
Payment of provision for tax, civil and labor losses 21 (190) (180)
Net cash from operating activities 16,724 34,762
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment 12 (5,256) (34,435)
Additions of intangible assets 13 (38,638) (19,716)
Acquisition of subsidiaries net of cash acquired (3,205) (8,475)
Purchase of investment in marketable securities (362,606) (707,080)
Proceeds from investment in marketable securities 421,427 581,214
Net cash from (applied in) investing activities 11,722 (188,492)
CASH FLOWS FROM FINANCING ACTIVITIES
Lease liabilities paid 16 (10,334) (5,654)
Payments of accounts payable for business combination 18 (21,197) (4,511)
Net cash applied in financing activities (31,531) (10,165)
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,085) (163,895)
Cash and cash equivalents at beginning of period 7 45,765 309,893
Cash and cash equivalents at end of period 7 42,680 145,998
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,085) (163,895)
The accompanying notes are an integral partof this Unaudited Condensed Interim
Consolidated Financial Statements.
7
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Notes to the Unaudited Condensed Interim Consolidated FinancialStatements
(Amounts in thousands of R$, unless otherwise stated)
1. The Company and Basis of Presentation
1.1. The Company
VastaPlatform Ltd., together with its subsidiaries (the Company) is a publicly
held company incorporated in the Cayman Islands on October16, 2019,
with headquarters in the city of Sao Paulo, Brazil. The Company
is atechnology-powered education content providing end-to-end educational and
digital solutions that cater to all needs ofprivate schools operating in the
K-12 educational segment.
Vasta's fiscal year begins on January 1 of eachyear and ends on December 31,
of the same year.
The Company
has built a "Platform as a Service", solution or PaaS, with two main modules:
Content &EdTech Platform and Digital Services.
The Company's Content & EdTech Platform combines a multi-brand and
tech-enabledarray with digital and printed content through long-term contracts
with partner schools.
Since July 31, 2020, VASTA Platform Ltd. has beena publicly-held company
registered with SEC ("The US Securities and Exchange Commission) and its
shares are traded on Nasdaq GlobalSelect Market under ticker symbol "VSTA".
1.2. Significant events during the period
a. Business Combination
On March 3, 2023 the Company, through its subsidiarySomos Sistemas de Ensino
S.A. ("Somos"), acquired 51% interest in the capital of "Escola Start Ltda."
("Start"),when the control over the entity was transferred upon all conditions
established on the share purchase agreement and the liquidation wascompleted.
Start is a company dedicatedto providing bilingual education services for
kindergarten, primary and secondary education, and preparatory courses for
entrance exams,including the sale of books, teaching materials, school
uniforms and stationery. See note 5.
The Unaudited Condensed Interim Consolidated FinancialStatements comprise the
following entities, which are all fully owned by the Company:
Company March 31, December 31, 2022
2023
Interest Interest
Somos Sistemas de Ensino S.A. ("Somos Sistemas") 100% 100%
Livraria Livro Facil Ltda. ("Livro Facil") 100% 100%
A & R Comercio e Servicos de Informatica Ltda. ("Pluri") 100% 100%
Colegio Anglo Sao Paulo ("Anglo") 100% 100%
Sociedade Educacional da Lagoa Ltda. ("SEL") 100% 100%
EMME - Producoes de Materiais em Multimidia Ltda. ("EMME") 100% 100%
Phidelis Tecnologia Desenvolvimento de Sistemas Ltda ("Phidelis") 100% 100%
MVP Consultoria e Sistemas Ltda. ("MVP") 100% 100%
Escola Start Ltda. ("Start") 51% -
8
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
2. Basis of accounting
These interim financial statements for the three-monthperiod ended March 31,
2023, have been prepared in accordance with IAS 34 Interim Financial Reporting
and should be read in conjunctionwith the Group's last annual consolidated
financial statements as at and for the year ended December 31, 2022 (`last
annualfinancial statements'). They do not include all of the information
required for a complete set of financial statements preparedin accordance with
IFRS Standards. However, selected explanatory notes are included to explain
events and transactions that are significantto an understanding of the changes
in the Company´s financial position and performance since the last
annual financial statements.
These Unaudited Condensed Interim ConsolidatedFinancial Statements are
presented in thousands of Brazilian Reais ("R$"), which is the Company
functional currency. All financialinformation presented in R$ has been rounded
to the nearest thousand, except as otherwise indicated.
(
a) Basisof consolidation and investments in other companies
Company March 31, December 31, 2022
2023
Investment type Interest Interest
Somos Sistemas de Ensino S.A. ("Somos Sistemas") Subsidiary 100% 100%
Livraria Livro Facil Ltda. ("Livro Facil") Subsidiary 100% 100%
A & R Comercio e Servicos de Informatica Ltda. ("Pluri") Subsidiary 100% 100%
Colegio Anglo Sao Paulo ("Anglo") Subsidiary 100% 100%
Sociedade Educacional da Lagoa Ltda. ("SEL") Subsidiary 100% 100%
EMME - Producoes de Materiais em Multimidia Ltda. ("EMME") Subsidiary 100% 100%
Phidelis Tecnologia Desenvolvimento de Sistemas Ltda ("Phidelis") Subsidiary 100% 100%
MVP Consultoria e Sistemas Ltda. ("MVP") Subsidiary 100% 100%
Escola Start Ltda. ("Start") Subsidiary 51% -
Educbank Gestao de Pagamentos Educacionais S.A. Associate 45% 45%
Flex Flix Limited Investment 10% 10%
These Unaudited Condensed Interim ConsolidatedFinancial Statements were
authorized for issue by the Company's board of directors on May 11, 2023.
3. Use of estimates and judgements
In preparing these interim Financial Statements,Management has made judgements
and estimates that affect the application of Company´ accounting
policies and the reported amountsof assets, liabilities, income and expenses.
Actual results may differ from these estimates.
The significant judgements made by managementin applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those described in thelast annual financial statements.
A number of the Group's accounting policiesrequire the measurement of fair
values, for both financial and non-financial assets and liabilities.
In estimating the fair value of an asset or aliability, the Company uses
market-observable data to the extent it is available. All assets and
liabilities for which fair value is measuredor disclosed in the financial
statements are categorized within the fair value hierarchy, described as
follows, based on the lowest levelinput that is significant
9
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
to the fair value measurement as a whole:
Measurement of fair values
• Level 1 - quoted prices (unadjusted)in active markets for identical
assets or liabilities.
• Level 2 - valuation techniques for whichthe lowest level input that is
significant to the fair value measurement is directly or indirectly observable.
• Level 3 - valuation techniques for whichthe lowest level input that is
significant to the fair value measurement is unobservable.
Where Level 1 inputs are not available, if needed,the Company engages third
party qualified appraisers to perform the valuation using Level 2 and / or
Level 3 inputs. If the inputs usedto measure the fair value of an asset or a
liability are categorized in different levels of the fair value hierarchy,
then the fair valuemeasurement is categorized in its entirety in the same
level of the fair value hierarchy as the lowest level input that is
significantto the entire measurement.
The Company's management establishes theappropriate valuation techniques and
inputs to the model, working closely with the qualified external advisors when
they are engaged insuch activities.
The valuations of identifiable assets and contingentliabilities in business
combinations could be particularly sensitive to changes in one or more
unobservable inputs considered in the valuationprocess. Further information on
the assumptions used in the valuation process of such items is provided in
Note 5.
Fair value measurement assumptions are also usedfor determination of expenses
with Share-based Compensation, which are disclosed in Note 23.
4. Significant accounting policies and new and not yet effective accounting standards
The accounting policies applied in these interimfinancial statements are the
same as those applied in the Group's consolidated financial statements as at
and for the year endedDecember 31, 2022. The accounting policies have been
consistently applied to all consolidated companies. There are no new
accounting policiesthat could be applicable since January 1, 2023, or early
adopted in the Unaudited Condensed Interim Consolidated Financial Statements.
5. Business Combinations
Acquisitions in 2023
As mentioned in Note 1.2, on March 03, 2023, theCompany acquired a 51%
interest in the capital of the Escola Start Ltda. ("Start"), when the control
over the entity was transferredupon all conditions established on the share
purchase agreement and the liquidation was completed.
The purchase price of R$4,482 will be paid intwo installments, a fixed
installment of R$4,100 in cash on the acquisition date and a variable
installment of R$382, subject to priceadjustment depending on the calculation
of financial indicators defined as contract and corrected by 100% of the CDI,
to be paid in May2023.
On the same date, a purchase option agreementwas entered into for the
acquisition of the remaining shares issued by Anglo Start held by the minority
shareholder, representing 49%of the share capital, as of January 2028, through
which the amount of R$11,700.
10
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
The acquisitions were accounted for using theacquisition method of accounting,
i.e., the consideration transferred, and the net identifiable assets acquired,
and liabilities assumedwere measured at fair value, while goodwill is measured
as the excess of consideration paid over those items. The following table
presentsthe net identifiable assets acquired and liabilities assumed for
business combination in 2023:
Start Anglo
Current assets
Cash and cash equivalents 895
Trade receivables 1,207
Inventories 349
Taxes recoverable 127
Prepayments 62
Other receivables 37
Total current assets 2,677
Non-current assets
Property and equipment 796
Other receivables 1,220
Intangible assets 6,250
Intangible assets - Customer Portfolio 1,510
Intangible assets - Trademarks 4,740
Total non-current assets 8,266
Total Assets 10,943
Current liabilities
Suppliers 299
Salaries and social contributions 477
Taxes payable 95
Tax Installments 21
Income tax and social contribution payable 32
Contractual obligations and deferred income 2,766
Other liabilities 16
Total current liabilities 3,706
Non-current liabilities
Other liabilities 16
Tax Installments 93
Total non-current liabilities 109
Total liabilities 3,815
Net identifiable assets at fair value 7,128
Percentage acquired (51%) (A) 3,635
Total of Consideration transferred (B) 4,482
Goodwill (A-B) 847
From the date of acquisition to March 31, 2023,Start contributed to a net
revenue from sales and services in the amount of R$ 663, and net profit for
the year in the amount of R$ 109.
Acquisitions in 2022
On January 14, 2022, the Company acquired thecompanies Phidelis Tecnologia
Desenvolvimento de Sistemas Ltda. and MVP Consultoria e Sistemas Ltda.
("Phidelis"), when thecontrol over the entity was transferred upon
11
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
all conditions established on the share purchaseagreement and the liquidation
was completed. The Company will pay a total purchase price in the amount of
R$21,966, comprised of (i) R$8,854in cash, paid on the acquisition date, (ii)
R$7,638 to be paid in annual installments over the course of two years, and
(iii) a variableR$5,474, with the achievement of performance linked to net
revenue of the years 2023 and 2024 to be paid in three annual installmentsbetwee
n 2023 and 2026. The net identifiable assets acquired, and liabilities assumed
for each business combination in 2022 are presentedin last annual financial
statements.
6. Financial Risk Management
The Company has a risk management policy for regularmonitoring and managing
the nature and overall position of financial risks and to assess its financial
results and impacts on its cashflows. Counterparty credit limits are also
reviewed periodically or whenever the Company identifies significant changes
in financial risk.
The economic and financial risks reflect the behaviorof macroeconomic
variables such as interest rates as well as other characteristics of the
financial instruments maintained by the Company.These risks are managed
through control and monitoring policies, specific strategies, and limits.
6.1. Financial Instruments by Category
The Company holds the following financial instruments:
Hierarchy March 31, 2023 December 31, 2022
Assets - Amortized cost
Cash and cash equivalents 42,680 45,765
Trade receivables 712,428 649,135
Other receivables 2,244 972
Related parties - other receivables 993 1,759
758,345 697,631
Assets - Fair value through profit or loss
Marketable securities 1 331,110 380,514
Other investments and interests in entities 8,272 8,272
339,382 388,786
Liabilities - Amortized cost
Bonds 815,927 842,996
Lease liabilities 139,336 140,563
Reverse factoring 199,116 155,469
Suppliers 223,457 250,647
Accounts payable for business combination and acquisition of associates 551,306 569,360
Accounts payable for business combination and acquisition of associates (i) 3 48,407 55,917
Other liabilities - related parties 430 54
1,977,979 2,015,006
i) Refers to a portion of the liability remeasured based on economic activity
of the acquired entity (post-closingprice adjustments). Valuation
techniques and significant unobservable inputs related to this measured
were presented in the financialstatements as of December 31, 2022.
The Company has not disclosed the fair valuesof your financial instruments,
because their carrying amounts approximates fair value.
12
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
6.2. Financial risk factors
The Company's activities expose it to certainfinancial risks mainly related to
market risk, credit risk and liquidity risk. Management and the Group's Board
of Directors monitorsuch risks in line with their capital management policy
objectives.
This note presents information on the Company'sexposure to each of the risks
above, the objectives of the Company, measurement policies, and the Company's
risk and capital managementprocess.
The Company has no derivative transactions.
a. Market risk - cash flow interest rate risk
This risk arises from the possibility that theCompany incurs losses because of
interest rate fluctuations that increase finance costs related to financing
and bonds raised in the marketand obligations for acquisitions from third
parties payable in installments. The Company continuously monitors market
interest rates inorder to assess the need to contract financial instruments to
hedge against volatility of these rates. Additionally, financial assetsalso
indexed to CDI and IPCA (broad consumer price index) partially mitigate any
interest rate exposures. Interest rates contracted areas follows:
March 31, 2023 December 31, 2022 Interest rate
Bonds
Private Bonds - 6 51,727 53,688 CDI + 1.00% p.a.
th
Issuance - series 2
Private Bonds - 9 254,555 259,843 CDI + 2.40% p.a.
th
Issuance - series 2
Bonds - 1 509,645 529,465 CDI + 2.30% p.a.
st
Issuance - single
Financing and lease liabilities 139,336 140,563 IPCA
Accounts payable for business combination and acquisition of associates 599,713 625,277 CDI
1,554,976 1,608,836
b. Credit risk
Credit risk arises from the potential defaultof a counterparty on an agreement
or financial instrument, resulting in financial loss. The Company is exposed
to credit riskin its operating activities (mainly in connection with trade
receivables, see note 9 and financial activities that include reversefactoring
deposits with banks and other financial institutions and other financial
instruments contracted.
The Company mitigates its exposure to credit risksassociated with financial
instruments, deposits in banks and short-term investments by investing in
prime financial institutions and inaccordance with limits previously set in
the Company's policy. See notes 7 and 8.
To mitigate risks associated with trade receivables,the Company adopts a sales
policy and an analysis of the financial and equity condition of its
counterparties. The sales policy is directlyassociated with the level of
credit risk the Company is willing to accept in the normal course of its
business.
The diversification of its receivable'sportfolio, the selectivity of its
customers, as well as the monitoring of sales financing terms and individual
position limits are proceduresadopted to minimize defaults or losses in the
realization of trade receivables. Thus, the Company does not have significant
credit riskexposure to any single counterparty or any group of counterparties
having similar characteristics.
Furthermore, the Company reviews the recoverableamount of its trade
receivables at the end of each reporting period to ensure that adequate credit
losses are recorded. See note 9.
13
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
c. Liquidity risk
To cover possible liquidity deficiencies or mismatchesbetween cash and cash
equivalents and short-term debt and financial obligations, the Company
continues to operate with reverse factoringif this credit line is offered by
banks and accepted by Company suppliers. This is the risk of the Company not
having enough funds andor bank credit limits to meet its short-term financial
commitments, due to mismatching terms in expected receipts and payments.
The Company continuously monitors its cash balanceand indebtedness level and
implemented measures to allow access to the capital markets, when necessary.
It also endeavors to assure theyremain within existing credit limits.
Management also continuously monitors projected and actual cash flows and the
combination of thematurity profiles of the financial assets, liabilities and
takes into consideration its debt financing plans, covenant compliance,
internalliquidity targets and, if applicable, regulatory requirements.
Cash surplus generated by the Company is handledin short-term deposits being
those investments composed by enough liquidity thus providing to the Company
the appropriate commitment withthe going concern presumption.
The table below presents the maturity of the Company'sfinancial liabilities.
Financial liabilities by maturity ranges
March 31, 2023 Less than Between one Over two years Total
one year and two years
Bonds 66,455 499,472 250,000 815,927
(note 14)
Lease liabilities 24,196 39,395 75,745 139,336
(note 16)
Accounts payable for business combination 48,577 364,086 187,050 599,713
and acquisition of associates (note 18)
Suppliers 223,457 - - 223,457
(note 15)
Reverse factoring 199,116 - - 199,116
(note 15)
Other liabilities - 430 - - 430
related parties (note 20)
562,231 902,953 512,795 1,977,979
The table below reflects the estimatedinterest rate based on CDI for 12 months
(13.29% p.a.) and IPCA for 12 months (4.65% p.a.) extracted from BACEN
(Brazilian CentralBank) on base period March 31, 2023. Amounts payable refer
to principal and interest based on undiscounted contractual amounts
and,therefore, do not reflect the financial position presented as of March 31,
2023
:
March 31, 2023 Less than Between one Over two years Total
one year and two years
Bonds 75,288 565,851 283,225 924,364
Lease 25,321 41,226 79,267 145,814
liabilities
Accounts payable for business combination 55,033 412,473 211,909 679,415
and acquisition of associates
Suppliers 253,156 - - 253,156
Reverse 225,579 - - 225,579
factoring
Other liabilities 487 - - 487
- related parties
634,864 1,019,550 574,401 2,228,815
d. Capital management
The Company's objectives when managing capitalare to safeguard its ability to
continue as a going concern to provide returns for shareholders and benefits
for other stakeholders andto maintain an optimal capital structure
14
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
to reduce the cost of capital.
In order to maintain or adjust the capital structureof the Company, management
can make, or may propose to the shareholders when their approval is required,
adjustments to the amount ofdividends paid to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce, for example, debt.
The Company monitors capital based on the gearingratio. This ratio corresponds
to the net debt expressed as a percentage of total capitalization. Net debt
comprises financial liabilitiesless cash and cash equivalents. Total
capitalization is calculated as shareholders' equity as shown in the
consolidated balancesheet plus net debt.
The Company's main capital managementobjectives are to safeguard its ability
to continue as a going concern, optimize returns, allow consistency of
operations to other stakeholders,and maintain an optimal capital structure
reducing financial costs and maximizing the returns. In addition, the Company
monitors financialleverage adequacy, and mitigates risks that may affect the
availability of capital for Company development.
March 31, 2023 December 31, 2022
Net debt (i) 1,935,299 1,969,241
Total shareholders' equity 4,633,606 4,629,679
Total capitalization (ii) 2,698,307 2,660,438
Gearing ratio - % - (iii) 72% 74%
(i) Net debt comprises financial liabilities (note 6.1) net of cash and cash equivalents.
(ii) Refers to the difference between Shareholders' Equity and Net debt.
(iii) The Gearing Ratio is calculated based on Net Debt/Total Capitalization.
e. Sensitivity analysis
The following table presents the sensitivity analysisof potential losses from
financial instruments, according to Management's assessment of relevant market
risks presented above.
A probable scenario (Base scenario) over a 12-monthhorizon was used, with a
projected rate of 13.29% p.a. as per DI Interest Deposit rate ("CDI"),
reference rates disclosedby B3 S.A. (Brazilian stock exchange). Two further
scenarios are presented, stressing, respectively, a 25% deterioration in
scenario Iand 50% deterioration in scenario II, of the projected rates.
Index - % per year Balance as of March 31, 2023 Base scenario Scenario I Scenario II
Financial investments CDI 38,239 5,082 6,352 7,623
Marketable securities CDI 331,110 44,005 55,006 66,007
369,349 49,087 61,358 73,630
Accounts payable for business combination CDI (599,713) (79,702) (99,627) (119,553)
Lease liabilities IPCA (139,336) (6,479) (8,099) (9,719)
Bonds CDI (815,927) (108,437) (135,546) (162,655)
(1,554,976) (194,618) (243,272) (291,927)
Net exposure (1,185,627) (145,531) (181,914) (218,297)
Interest rate -% p.a. - - 13.29% 16.61% 19.94%
Interest rate -% p.a. - - 4.65% 5.81% 6.98%
Stressing scenarios 25% 50%
15
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
7. Cash and cash equivalents
a. Composition
The balance of this account comprises the following amounts:
March 31, 2023 December 31, 2022
Cash 375 7
Bank account 4,066 6,546
Financial investments (i) 38,239 39,212
42,680 45,765
(i) The Company invests in short-term fixed income investment funds with daily liquidity and no material riskof change in
value. Financial investments presented an average gross yield of 103% of the annual CDI rate on March 31, 2023 (103% on
December31, 2022). All investments are highly liquid investments that are readily convertible to known amounts of cash
and which aresubject to an insignificant risk of changes in value and correspond to the cash obligations for the period.
8. Marketable securities
a. Composition
Credit Risk March 31, 2023 December 31,2022
Private investment fund AAA 196,167 31,842
Private investment fund AA 134,943 348,672
331,110 380,514
The average gross yield of securities is basedon 103% CDI on March 31, 2023
(104% CDI on December 31, 2022).
9. Trade receivables
The balance of this account comprises the following amounts:
a. Composition
March 31, 2023 December 31, 2022
Trade receivables 778,288 711,439
Related parties (note 20) 6,393 7,177
(-) Impairment losses on trade receivables (72,253) (69,481)
712,428 649,135
b. Maturities of trade receivables
March 31, 2023 December 31, 2022
Not yet due 633,549 563,005
Past due
Up to 30 days 52,312 19,435
From 31 to 60 days 8,148 22,637
From 61 to 90 days 2,355 12,193
From 91 to 180 days 22,443 42,169
From 181 to 360 days 40,257 31,357
Over 360 days 19,224 20,643
Total past due 144,739 148,434
Related parties (note 20) 6,393 7,177
Impairment losses on trade receivables (72,253) (69,481)
712,428 649,135
16
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
The gross carrying amount of trade receivablesis written off when the Company
has no reasonable expectations of recovering the financial asset in its
entirety or a portion thereof.Collection efforts continue to be made, even for
the receivables that have been written off, and amounts recoverable are
recognized directlyin Consolidated Statement of Profit or Loss and Other
Comprehensive Income upon collection.
c. Changes on provision
The followingtable shows the c
hanges in impairment losses on trade receivables for the periods ended March
31, 2023, and 2022:
March 31, 2023 March 31, 2022
Opening balance 69,481 46,500
Additions 10,381 8,896
Reversals (53) -
Write offs (7,556) (3,013)
Closing balance 72,253 52,383
10. Inventories
The balance of this account comprises the following amounts:
a. Composition
March 31, 2023 December 31, 2022
Finished products (i) 171,527 160,519
Work in process 65,412 73,993
Raw materials 24,542 30,773
Imports in progress - 347
Right to returned goods (ii) 1,739 818
263,220 266,450
(i) These amounts are net of slow-moving items and net realizable value.
(ii) Represents the Company's right to recover products from customers
when customers exercise theirright of return under the Company's
returns policies, where the Company estimates the volume of
goods returned based on experienceand foreseen expectations.
Changes in provision for losses with slow-movinginventories, net realizable
value and provision for right to returned goods are broken down as follows:
b. Changes in provision
March 31, 2023 March 31, 2022
Opening balance 84,049 58,723
Additions 3,023 6,904
Reversals - (124)
Closing balance 87,072 65,503
17
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
11. Equity accounted investees
a. Composition of investments
Investment type Interest % Investment Fair value Goodwill March 31, 2023
Educbank Associate 45% 41,256 7,569 33,786 82,611
41,256 7,569 33,786 82,611
b. Investments without control and significant influence
EducBank
As of December 31, 2022 83,139
Equity method (528)
As of March 31,2023 82,611
12. Property, plant and equipment
The cost, weighted average depreciationrates and accumulated depreciation are
as follows:
March 31, 2023 December 31, 2022
Weighted average Cost Accumulated Net book Cost Accumulated Net book
depreciation rate depreciation value depreciation value
IT 10% - 33% 82,548 (48,825) 33,723 80,262 (43,294) 36,968
equipment
Furniture, equipment 10% - 33% 59,721 (36,580) 23,141 60,920 (36,818) 24,102
and fittings
Property, buildings 5%-20% 53,256 (41,851) 11,405 53,027 (40,381) 12,646
and improvements
In - 4,755 - 4,755 4,494 - 4,494
progress
Right of 12% 215,859 (98,082) 117,777 257,034 (137,948) 119,086
use assets
Land - 391 - 391 391 - 391
Total 416,530 (225,338) 191,192 456,128 (258,441) 197,687
Changes in property, plant and equipment are as follows:
18
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
IT Furniture, equipment Property, buildings In Right of Land Total
equipment and fittings and improvements progress use assets
As of December 36,969 24,102 12,646 4,494 119,086 391 197,688
31, 2022
Additions 1,211 3,784 - 261 11,804 - 17,060
Additions through - 613 183 - - - 796
business combinations
Disposals / - - - - (5,471) - (5,471)
Cancelled contracts
Depreciation (4,457) (1,438) (1,424) - (7,642) - (14,961)
Transfers - (3,920) - - - - (3,920)
(i)
As of March 33,723 23,141 11,405 4,755 117,777 391 191,192
31, 2023
(i) The remaining balance of transfers refers to software and assets under implementation,
previously allocatedin the "furniture, equipment and fittings" group.
IT Furniture, equipment Property, buildings In Right of Land Total
equipment and fittings and improvements progress use assets
As of December 16,615 8,390 17,872 677 141,737 391 185,682
31, 2021
Additions 31,849 2,015 282 289 15,929 - 50,364
Additions through 54 12 - 7 - - 73
business combinations
Disposals / - (6) - (18) (1,842) - (1,866)
Cancelled contracts
Depreciation (2,951) (109) (1,381) - (7,547) - (11,988)
Transfers 21 434 (455) - - - -
As of March 45,588 10,736 16,318 955 148,277 391 222,265
31, 2022
The Company assesses annually, whether there isan indication that a property,
plant and equipment asset may be impaired. If any indication exists, the
Company estimates the asset'srecoverable amount. There were no indications of
impairment of property, plant and equipment as and for the three-month periods
endedMarch 31, 2023 and 2022.
19
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
13. Intangible Assets and Goodwill
The cost, weighted average amortization ratesand accumulated amortization of
intangible assets and goodwill comprise the following amounts:
March 31, 2023 December 31, 2022
Weighted average Cost Accumulated Net book Cost Accumulated Net book
amortization rate amortization value amortization value
Software 20% 277,555 (192,806) 84,749 263,433 (182,711) 80,722
Customer 8% 1,201,666 (402,324) 799,342 1,201,074 (377,891) 823,183
Portfolio
Trademarks 5% 636,072 (119,544) 516,528 631,582 (112,967) 518,615
Trade 8% 243,113 (30,477) 212,636 247,622 (28,795) 218,827
Agreement
Platform content 33% 143,596 (84,311) 59,285 123,251 (74,881) 48,370
production
Other Intangible 33% 12,320 (5,041) 7,279 39,422 (32,142) 7,280
assets
In 29,071 - 29,071 18,958 - 18,958
progress
Goodwill 3,712,568 - 3,712,568 3,711,721 - 3,711,721
6,255,961 (834,503) 5,421,458 6,237,063 (809,387) 5,427,676
Changes in intangible assets and goodwill were as follows:
Software Customer Trade-marks Trade Platform Other In Goodwill Total
Portfolio Agreement content Intangible progress
production assets
As of 80,722 823,183 518,615 218,827 48,370 7,280 18,958 3,711,721 5,427,676
December
31,
2022
Additions 10,140 - - - 20,344 - 8,153 - 38,637
Additions through - 1,510 4,740 - - - - 847 7,097
business
combinations
(Note 5)
Amortization (8,073) (25,351) (6,827) (6,191) (9,429) (1) - - (55,872)
Transfers 1,960 - - - - - 1,960 - 3,920
(i)
As of 84,749 799,342 516,528 212,636 59,285 7,279 29,071 3,712,568 5,421,458
March
31,
2023
(i) The remaining balance refers to software and assets under implementation received
in the transfer of property,plant and equipment, as mentioned in note 12.
Software Customer Trade-marks Trade Platform content Other intangible In progress Goodwill Total
Portfolio Agreement production assets
As of December 96,045 922,105 546,277 243,495 24,294 7,281 3,991 3,694,879 5,538,367
31, 2021
Additions 7,940 - - - 8,779 - 2,039 958 19,716
Additions through 3,145 - - - - - - 34,063 37,208
business combinations
Amortization (7,850) (25,393) (6,827) (6,191) (5,988) (50) - - (52,299)
Transfers (2,085) (140) - - - (1,099) - 3,324 -
As of March 97,194 896,572 539,450 237,304 27,085 6,132 6,030 3,733,224 5,542,991
31, 2022.
20
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Impairment test for goodwill
The Company performs its annual impairment testin December and whenever
circumstances indicate that the carrying value may be impaired. The Company's
impairment test for goodwillis assessed by comparing it carrying amount with
its recoverable amount. The key assumptions used to determine the recoverable
amountfor the different cash generating units were disclosed in the annual
consolidated financial statements for the year ended December 31,2022.
There were no indications of impairment for three-monthperiods ended March 31,
2023 and 2022.
14. Bonds
The balance of bonds comprises the following amounts:
December Payment of Interest Transaction Transfers March 31,
31, 2022 interest (i) accrued cost of bonds 2023
Bonds with 63,325 (18,463) 11,397 - - 56,259
Related Parties
Bonds 30,454 (39,451) 19,194 254 (255) 10,196
Current 93,779 (57,914) 30,591 254 (255) 66,455
liabilities
Bonds with 250,206 - - - - 250,206
Related Parties
Bonds 499,011 - - - 255 499,266
Non-current 749,217 - - - 255 749,472
liabilities
Total 842,996 (57,914) 30,591 254 - 815,927
(i) On February 28, 2023 the Company settled only interest on the followingbonds 6th Issuance, 2nd series - R$ 3,752.
On February 14, 2023 the Company settled only interest on the followingbonds 7
th
issuance single series - R$ 14,711.
OnMarch 02, 2023 the Company settled only interest on the following bonds external - R$ 39,451.
a. Bonds' description
See below the bonds outstanding on March 31, 2023:
Subscriber Related Parties Related Parties Third parties
Issuance 5th 9th 1st
Series 2 2 Single Series
nd nd
Series Series
Date of issuance 08/15/2018 09/28/2022 08/06/2021
Maturity date 08/15/2023 09/28/2025 07/06/2024
First payment after 60 months 36 months 35 months
Remuneration payment Semi-annual interest Semi-annual interest Semi-annual interest
Financials charges CDI + 1.00% p.a. CDI + 2.40% p.a. CDI + 2.30% p.a.
Principal amount (in millions of R$) 51 250 500
b. Bond's maturities
21
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
The maturities range of these accounts, considering related and thirdparties
are as follow:
Maturity of installments March 31, 2023 % December 31, 2022 %
2023 66,455 8.2 93,779 11.1
2024 499,472 61.2 499,217 59.2
2025 250,000 30.6 250,000 29.7
Total non-current liabilities 749,472 91.8 749,217 88.9
815,927 100.0 842,996 100.0
c. Debit commitments
The maintenance of the contractual maturity ofdebentures at their original
maturities is subject to covenants, which are calculated annually. The main
assumptions adopted in this calculationare described in the Financial
Statements as of December 31, 2022. Additionally, the Company complied with
all debt commitments in theperiod applicable on December 31, 2022.
15. Suppliers
The balance of this account comprises the following amounts:
a. Composition
March 31, 2023 December 31, 2022
Local suppliers 186,644 215,593
Related parties (note 20) 15,775 13,781
Copyright 21,038 21,273
223,457 250,647
Reverse Factoring (i) 199,116 155,469
(i) As of March 31, 2023, the balance of reverse factoring was R$ 199,116 (R$ 155,469 as of December 31, 2022),and the discount
rates of assignment operations carried out by our suppliers with financial institutions had a weighted average of 1.25%per
month (as of December 31, 2022, the weighted average was 1.27% per month) and a maximum payment term of 360 days. The balance
is initiallyrecognized net of the present value adjustment, which is subsequently recognized as a financial expense.
16. Lease liabilities
March 31, 2023 December 31, 2022
Opening balance 140,563 160,542
Additions for new lease agreements 11,808 12,002
Cancelled contracts (2,418) (3,180)
Interest 3,385 13,143
Payment of interest (3,668) (14,941)
Payment of principal (10,334) (27,003)
Closing balance 139,336 140,563
Current liabilities 24,196 23,151
Non-current liabilities 115,140 117,412
139,336 140,563
22
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Short-term leases (lease period of 12 months orless) and leases of low-value
assets (such as personal computers and office furniture) are recognized on a
straight-line basis in rentexpenses for the period and are not included in
lease liabilities.
The Company recognized rent expense from short-termleases and low-value assets
of R$ 14,456 for the three-month period ended March 31, 2023 (R$ 10,157 as of
March 31, 2022).
17. Contractual obligations and deferred income
March 31, 2023 December 31, 2022
Refund liability (i) 79,939 51,533
Contract of exclusivity for processing payroll 490 587
Deferred income in leaseback agreement 3,904 4,075
Other contractual obligations 1,511 1,657
85,844 57,852
Current 85,844 57,852
Non-current - -
85,844 57,852
(i) Refers to the customer's right to return products, as mentioned in Note 10, the Company businesscycle is from October
to September for each year, being the provision reduced in the end of business cycle and estimated in the fourthquarter
18. Accounts payable for business combination and acquisition of associates
March 31, 2023 December 31, 2022
Pluri - 3,653
Mind Makers 8,173 7,915
Livro Facil - 10,516
Meritt 300 300
SEL 16,371 30,267
Redacao Nota 1000 6,146 6,030
EMME 11,035 10,827
Editora De Gouges 531,016 514,299
Phidelis 12,426 16,976
Educbank 13,864 24,494
Anglo Start 382 -
599,713 625,277
Current 48,577 73,007
Non-current 551,136 552,270
599,713 625,277
The changes in the balance are as follows:
23
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
March 31, 2023 December 31, 2022
Opening balance 625,277 532,313
Additions 4,482 120,344
Cash payment (4,100) (80,939)
Payments in installments (21,197) (11,379)
Interest payment (15,820) (603)
Interest adjustment 18,031 65,725
Remeasurement (6,960) (184)
Closing balance 599,713 625,277
The maturity years of such balances as of March31, 2023 and December 31, 2022,
are shown in the table below:
March 31, 2023 December 31, 2022
Maturity of installments Total % Total %
In up to one year 48,577 8.1 73,007 11.7
One to two years 181,614 30.3 389,186 62.2
Two to three years 182,471 30.4 163,084 26.1
Three years on 187,051 31.2 - -
599,713 100.0 625,277 100.0
19. Salaries and Social Contribution
March 31, 2023 December 31 2022
Salaries payable 31,782 28,351
Social contribution payable (i) 37,601 25,205
Provision for vacation pay and 13th salary 27,275 21,454
Provision for profit sharing (ii) 35,973 25,047
132,631 100,057
(i) Refers to the effect of social contribution over restricted share units' compensation plans issued onJuly 31 and November
10, 2020. The Company records the taxes over the shares on a monthly basis according to the Company's shareprice.
(ii) The provision for profit sharing is based on qualitative and quantitative metrics determined by Management.
20. Related parties
The Company is part of Cogna Group and some ofthe Company's transactions and
arrangements involve entities that belong to the Cogna Group. The effect of
these transactions isreflected in the Consolidated Financial Statements, with
these related parties segregated by nature of transaction measured on an
arm'slength basis and determined by intercompany agreements and approved by
the Company's Management.
The balances and transactions between the Companyand its associates have been
eliminated in the Company's Unaudited Condensed Interim Consolidated Financial
Statements. Additionally,the main contracts with related parties are presented
in greater detail in the Consolidated Financial Statements for the year ended
December31, 2022, which did not change until the end of this quarter.
The balances and transactions between relatedparties are shown below:
24
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
March 31, 2023
Other Trade receivables Indemnification Other Suppliers Bonds
receivables (i) (Note 9) asset liabilities (note 15) (note 14)
(note 21b)
Cogna - - 186,187 - - 306,465
Educacao S.A.
Editora - 4,525 - - 12,378 -
Atica S.A.
Editora E Distribuidora - 513 - - 3,397 -
Educacional S.A.
Maxiprint - 43 - - - -
Editora Ltda.
Saraiva - 1,111 - - - -
Educacao S.A.
Somos Idiomas - 200 - - - -
S.A.
Others 993 1 - 430 - -
993 6,393 186,187 430 15,775 306,465
(i) Refers substantially to accounts receivable generated from sharing costs e.g IT services shared by theCompany to Cogna Group.
December 31, 2022
Other Trade receivables Indemnification Other Suppliers Bonds
receivables (i) (Note 9) asset liabilities (note 15) (note 14)
(note 21b)
Cogna - - 180,417 - 3,828 313,531
Educacao S.A.
Editora - 5,754 - - 9,778 -
Atica S.A.
Editora E Distribuidora 1,722 19 - - - -
Educacional S.A.
Educacao Inovacao - 389 - - 175 -
e Tecnologia S.A.
Nice Participacoes - 37 - - - -
Ltda
Saraiva - 749 - - - -
Educacao S.A.
Somos Idiomas - 229 - - - -
S.A.
Others 37 - - 54 - -
1,759 7,177 180,417 54 13,781 313,531
Refers substantially to accounts receivable generatedfrom sharing costs e.g IT
services shared by the Company to Cogna Group.
25
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
March 31, 2023 March 31, 2022
Transactions Revenues Finance costs Cost Sublease Revenues Finance Cost Sublease
held: (i) note 14 Sharing (note 25) costs (i) Sharing (note 25)
nota 14
Cogna - 11,397 - - - 8,611 - -
Educacao S.A.
Editora 4,610 - 3,200 2,246 3,415 - 1,183 2,109
Atica S.A.
Editora E Distribuidora 258 - - - - - 6,059 -
Educacional S.A.
Editora 1,436 - - - 737 - - -
Scipione S.A.
Maxiprint 2,727 - - - 2,203 - - -
Editora Ltda.
Saber Servicos - - - - 41 - - -
Educacionais S.A.
Saraiva 1,448 - - 725 1,215 - - 728
Educacao S.A.
Somos Idiomas - - - 188 - - - 123
Ltda.
SSE Servicos 533 - - - - - - -
Educacionais Ltda.
11,012 11,397 3,200 3,159 7,611 8,611 7,242 2,960
(i) Refers to debentures interest, see note 14.
26
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
a) Compensation of key management personnel
Key management personnel include the members ofthe Board of Directors, Audit
Committee, the CEO and the vice-presidents, for which the nature of the tasks
performed were related tothe activities of the Company.
For the period ended March 31, 2023, key managementcompensation, including
charges and variable compensation amounted to R$ 3,477 (R$ 4,271 in March 31,
2022). The Audit Committee and Boardof Directors were established in July 2020
as a result of the IPO.
The Key management personnel compensationexpenses comprised the following:
March 31, 2023 March 31, 2022
Short-term employee benefits 2,591 2,135
Share-based compensation plan 886 2,136
3,477 4,271
21. Provision for tax, civil and labor losses and Judicial deposits and escrow accounts
The Company classifies the likelihood of lossin judicial/administrative
proceedings in which it is a defendant. Provisions are recorded for
contingencies classified as probable lossin an amount that Management, in
conjunction with its legal advisors, believes is enough to cover probable
losses or when related to contingencesresulting from business combinations.
In connection with the acquisition of Somos Groupby Cogna Group, provisions
for contingent liabilities assumed by Cogna were recognized when potential
non-compliance with labor and civillegislation arising from past practices of
subsidiaries acquired were identified. Thus, at the acquisition date, Cogna
reviewed all proceedingsfor which liabilities were transferred to assess
whether there was a present obligation and if the fair value could be measured
reliably.The contingent liabilities are composed as follows:
a. Composition
March 31, 2023 December 31, 2022
Proceedings whose likelihood of loss is probable
Tax proceedings (i) 631,639 622,440
Labor proceedings (ii) 20,478 25,812
Civil proceedings 502 496
652,619 648,748
Liabilities assumed in Business Combination
Tax proceedings 749 749
Labor proceedings (ii) 1,755 1,755
2,504 2,504
Total of provision for tax, civil and labor losses 655,123 651,252
(i) Primarily refers to income tax positions taken by Somos and the Company in connection with a corporaterestructuring
held by the predecessor in 2010, In 2018, given a tax assessment via an Infraction Notice received by the predecessor
forcertain periods opened for tax audit coupled with unfavorable case law on a similar tax case also reached in
2018, the Company reassessedthis income tax position and recorded a liability, including interest and penalties.
27
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
(ii) The Company is a party to labor demands, which mostly refer to
proportional vacation, salary difference,night shift premium, overtime
and social charges, among others. There are no individual labor
demands with material amounts that requirespecific disclosure.
The changes in provision for the periods endedMarch 31, 2023 and 2022 were as
follows:
December 31, 2022 Additions Reversals Interest Payments March 31, 2023
Tax proceedings 623,189 - (119) 9,318 - 632,388
Labor proceedings 27,567 63 (4,367) (842) (188) 22,233
Civil proceedings 496 13 (13) 8 (2) 502
Total 651,252 76 (4,499) 8,484 (190) 655,123
Finance expense - - (8,484)
General and administrative expenses (76) 4,499 -
Total (76) 4,499 (8,484)
December 31, 2021 Additions Reversals Interest Payments March 31, 2022
Tax proceedings 607,084 - (1,356) 10,728 - 616,456
Labor proceedings 38,159 165 (4,916) 718 (180) 33,946
Civil proceedings 1,607 4 (6) 8 - 1,616
Total 646,850 169 (6,278) 11,454 (180) 652,015
Finance expense - - (11,454)
General and administrative expenses (169) 6,278 -
Total (169) 6,278 (11,454)
b. Judicial Deposits and Escrow Accounts
Judicial deposits and escrow accounts recordedas non-current assets are as
follows:
March 31, 2023 December 31, 2022
Tax proceedings 2,192 2,126
Indemnification asset - Former owner 1,348 1,801
Indemnification asset - Related parties (i) 186,187 180,417
Escrow-account - 10,515
189,727 194,859
28
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
(i) Refers to an indemnification asset of the seller in connection with the acquisition of Somos by CognaGroup and recognized
at the date of the business combination, in order to indemnify the Company for all losses that may be incurred inconnection
with all contingencies or lawsuits, substantially tax proceedings related to business combinations up to the maximum
amountof R$186,187 (R$ 180,417 on December 31, 2022). This asset is indexed to CDI (Certificates of Interbank Deposits).
22. Current and Deferred Income Tax and Social Contribution
a. Reconciliation of income tax and social contribution
The reconciliation of income tax and social contribution expense isas follows:
As of March 31, 2023 As of March 31, 2022
Profit before income tax and social contribution for the year 268 26,668
Nominal statutory rate of income tax and social contribution 34% 34%
IRPJ and CSLL calculated at the nominal rates (91) (9,067)
Share of loss equity-accounted investees (179) -
Permanent additions (exclusions) 425 (1,372)
Net (exclusions) additions without constitution of deferred assets (1,850) 1,969
Difference in presumed profit rate of subsidiary 133 2,523
Tax contingencies IRPJ and CSLL - 874
Impairment write-off on tax loss carryforward (929) (1,406)
Total IRPJ and CSLL (2,492) (6,478)
Current IRPJ and CSLL in the result (1,454) (5,524)
Deferred IRPJ and CSLL in the result (1,038) (954)
(2,492) (6,478)
b. Deferred taxes
Changes in deferred income tax and social contributionassets and liabilities
are as follows:
29
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
As of December Effect on As of March 31, 2023
31, 2022 profit (loss)
Income tax/social
contribution:
Income tax and social contribution 422,240 25,079 447,319
losses carryforwards (ii)
Temporary differences:
Impairment losses on 20,471 808 21,280
trade receivables
Provision for 3,346 793 4,139
obsolete inventories
Imputed interest (5,548) 2,693 (2,855)
on suppliers
Provision for risks of tax, 20,445 1,492 21,937
civil and labor losses
Refund liabilities and 15,818 1,581 17,400
right to returned goods
Lease liabilities 7,936 (988) 6,948
Fair value adjustments on business (358,454) (26,320) (384,775)
combination and goodwill amortization (i)
Other temporary 44,596 (6,176) 38,420
difference
Deferred assets, net 170,851 (1,038) 169,812
(i) Goodwill and fair value adjustments on business combination comprise three components,
being (i) goodwilland fair value adjustment of prior business combination by Somos;
(ii) amortization of fair value adjustment related to acquisition ofthe company; and
(iii) deductibility of the acquisition goodwill for tax purposes as allowed by tax law.
(ii) The Company's income tax and social contribution loss carryforwards are primarily the result oftax amortization of
goodwill and the amortization of certain intangibles recognized related to the business combination in 2018. Inaccordance
with Brazilian tax regulation, tax loss carryforwards have a limitation for use of 30% of taxable profit generated ineach
year and do not expire. The tax benefit is expected to be realized over an estimated 6-year period beginning in 2026.
23. Shareholder's Equity
23.1. Share Capital
The Company holds Class A shares (issued and soldin the IPO), in addition to
Class B shares (owned by Cogna).
Considering the ILP exercised during 2022, inaddition to the remuneration of
restricted shares recognized in the same period, on March 31, 2023, the
Company's capital stock totals83,650,902 shares (83,649,887 on December 31,
2022), of which 64,436,093 are Class B shares owned by the Cogna Group and
18,214,809 (18,213,794on December 31, 2022) are Class A shares owned by
third-parties and 1,000,000 shares Class A are held in treasury.
The Company's Shareholders Agreement authorizesthe Board of Directors to grant
restricted share units to certain executives and employees and other service
providers with respect toup to 3% (three per cent) of the issued and
outstanding shares of the Company. Below we present the movements that
occurred in the periodended March 31, 2023:
Class A Class B Total
Shares (units) Shares (units)
December 31, 2022 19,213,794 64,436,093 83,649,887
Remuneration
ILP exercised 1,015 - 1,015
March 31, 2023 19,214,809 64,436,093 83,650,902
The Company's shareholders on March 31,2023, are as follows:
In units
Company Shareholders Class A Class B Total
Cogna Group - 64,436,093 64,436,093
Free Float 18,214,809 - 18,214,809
Treasury shares (Note 23.4) 1,000,000 - 1,000,000
Total (%) 23% 77% 83,650,902
30
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
23.2. (Loss) profit per share
The basic (loss) profit per share is measuredby dividing the profit
attributable to the Company's shareholders by the weighted average common
shares outstanding during the year.The Company considers as diluted earnings
per share, the number of common shares calculated added by the weighted
average number of commonshares that should be issued upon conversion of all
potentially dilutive shares into common shares; potentially dilutive shares
were deemedto have been converted into common shares at the beginning of the
period.
March 31, 2023 March 31, 2022
(Loss) profit attributable to parent Company (2,224) 20,190
Weighted average number of ordinary shares outstanding (thousands) 83,651 83,394
Share based- compensation ("Long term Plan") - 1,036
Share based plan Migrated from Cogna to Vasta - 20
Total dilution effect - 1,056
Basic (loss) earnings per share - R$ (0.03) 0.24
Diluted (loss) earnings per share - R$ (0.03) 0.24
23.3. Capital reserve - Share-based compensation (granted)
The Company as of March 31, 2023, had two share-basedcompensation plans and
one bonus plan paid in restricted share units, being:
a) Long Term Investment - ("ILP") - Refers to two tranches granted
being the firstissued on July 23, 2020 and November 10, 2020. The
Company compensates part of its employees and management. This
planwill grant up to 3% of the Company's class A share units.
The Company will grant the limit of five tranchesapproved by the
Company's Board of Directors. The fair value of share units
is measured at fair value quoted on the grant date.The plan has
a vesting period corresponding to 5 years added by expected
volatility of 30% and will be settledwith Company's shares.
All taxes and contributions are paid by the Company without
additional costs to employees and management. Thisprogram should
be wholly settled with the delivery of the shares. The effect of
events on share-based compensation in the Statementof Profit or
Loss for the period ended March 31, 2023 was R$ 1,843, being
R$ 1,156 in Shareholder'sthe Equity and a credit of R$ 687 as
labor charges in liabilities, due to share price fluctuation.
b) Bonus paid in restricted share units - "Premium recognized" - The Company granted andvested
99,193 shares on April, 2022 to certain members of management based on performance recognized.
This programwas wholly settled with the delivery of the shares. The amount provisioned and
paid was R$ 1,748 (net of withholding taxes),of which R$ 1,023 corresponds to labor charges.
31
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
23.4. Vasta's share Repurchase Program
In 2021 the Company announced that its Board ofDirectors has approved its
first share repurchase program, or the Repurchase Program. Under the
Repurchase Program, the Company may repurchaseup to 1,000,000 in Class A
common shares in the open market, based on prevailing market prices, or in
privately negotiated transactions,over a period beginning on August 17, 2021,
continuing until the earlier of the completion of the repurchase or February
17, 2022, dependingupon market conditions. The Company concluded the
Repurchase Program on December 10, 2021, using its existing funds to finance
the repurchase,and on December 31, 2021, the Company had a balance of R$23,880
or 1,000,000 shares in its possession.
24. Net Revenue from sales and Services
The breakdown of net sales of the Company forthe periods ended March 31, 2023,
and 2022 is shown below, revenue is broken down into the categories that,
according to the Company thenature, amount, timing and uncertainty of revenue
through provisions as follows:
March 31, 2023 March 31, 2022
Content Platform and EdTech
Learning Systems
Gross revenue 278,628 240,082
Discounts (507) (2,108)
Returns (47,331) (34,186)
Taxes (87) (112)
Net revenue 230,703 203,676
Textbooks
Gross revenue 54,563 56,578
Returns (3,569) (2,531)
Taxes (2) (326)
Net revenue 50,992 53,721
Complementary Education Services
Gross revenue 66,497 64,207
Returns (11,932) (7,878)
Taxes (12) (57)
Net revenue 54,553 56,272
Other services
Gross revenue 10,641 9,684
Returns - (1)
Taxes (1,505) (1,196)
Net revenue 9,136 8,487
Total Content Platform & EdTech 345,384 322,156
Digital services platform
E-commerce
Gross revenue 57,778 63,043
Returns (93) (3,601)
Taxes (245) (1,225)
Net revenue 57,440 58,217
32
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
Other digital services
Gross revenue 12 228
Discounts (1) -
Taxes - (20)
Net revenue 11 208
Total Digital Services 57,451 58,425
Total
Gross revenue 468,119 433,822
Discounts (508) (2,108)
Returns (62,925) (48,197)
Taxes (1,851) (2,936)
Net revenue 402,835 380,581
Sales 393,688 371,886
Service 9,147 8,695
Net revenue 402,835 380,581
a. Seasonality
The Company's revenue is subject to seasonalitysince the main deliveries of
printed materials and digital materials to customers occur in the last quarter
of each year (typically inNovember and December), and in the first quarter of
each subsequent year (typically in February and March), and revenue is
recognizedwhen the customers obtain control over the materials. In addition,
the printed and digital materials delivered in the fourth quarter areused by
customers in the following school year and, therefore, fourth quarter results
reflect the growth in the number of students fromone school year to the next,
leading to higher revenue in general in the fourth quarter compared with the
preceding quarters in each year.Consequently, on aggregate, the seasonality of
revenue generally produces higher revenue in the first and fourth quarters of
our fiscalyear. In addition, the Company generally bills its customers during
the first half of each school year (which starts in January), whichgenerally
results in a higher cash position in the first half of each year compared to
the second half. A significant part of the Company'sexpenses is also seasonal.
Due to the nature of the business cycle, the Company needs significant working
capital, typically in Septemberor October of each year, in order to cover
costs related to production and inventory accumulation, selling and marketing
expenses, anddelivery of the teaching materials at the end of each year in
preparation for the beginning of each school year. As a result, these
operatingexpenses are generally incurred between September and December of
each year. Purchases through the Livro Facil e-commerce platformare also very
intense during the back-to-school period, between November, when school
enrollment takes place and families plan to anticipatethe purchase of products
and services, and February of the following year, when classes are about to
start. Thus, e-commerce revenue ismainly concentrated in the first and fourth
quarters of the year.
25. Costs and Expenses by Nature
33
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
March 31, 2023 March 31, 2022
Salaries and payroll charges (76,032) (72,480)
Raw materials and productions costs (82,253) (71,532)
Editorial cost (18,314) (12,278)
Depreciation and amortization (70,832) (64,286)
Copyright (25,288) (20,763)
Advertising and publicity (27,018) (27,472)
Utilities, cleaning, and security (4,175) (6,505)
Rent and condominium fees (14,456) (10,157)
Third-party services (11,713) (3,789)
Travel (3,583) (3,971)
Consulting and advisory services (4,035) (10,857)
Impairment losses on trade receivables (10,380) (8,896)
Material (328) (1,457)
Reversal for tax, civil and labor losses 4,423 6,109
Provision for obsolete inventories (3,023) (6,780)
Income from lease and sublease agreements with related parties 3,159 2,960
Other income 994 933
(342,854) (311,221)
Cost of gods sold and services (155,126) (129,237)
Commercial expenses (51,061) (47,933)
General and administrative expenses (127,281) (126,088)
Impairment losses on trade receivable (10,380) (8,896)
Other income 994 933
(342,854) (311,221)
26. Finance result
March 31, 2023 March 31, 2022
Finance income
Income from financial investments and marketable securities (i) 9,417 11,459
Other finance income 7,214 3,810
16,631 15,269
Finance costs
Interest on bonds and financing (30,591) (23,772)
Interest on account payables for business combinations (18,031) (13,694)
Imputed interest on suppliers (7,074) (1,867)
Bank and collection fees (3,280) (2,393)
Interest on provision for tax, civil and labor losses (8,484) (11,430)
Interest on lease liabilities (3,385) (3,596)
Other finance costs (4,971) (1,210)
(75,816) (57,962)
Financial result (net) (59,185) (42,693)
(i) Refers to income from marketable securities indexed at CDI.
27. Segment Reporting
Information reported to the Chief Operating DecisionMaker (CODM) for the
purposes of resource allocation and assessment of segment performance is
focused on revenue, "profit (loss)before finance result and tax", assets and
liabilities segregated by the nature of the services provided to the
Company'scustomers. Thus, the reportable segments are: (i) Content & EdTech
Platform; and (ii) Digital Services.
The Content & EdTech platform derives itsresults from core and complementary
educational content solutions through digital and printed content, including
textbooks, learning systemsand other complementary educational services.
34
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
The Digital Services aims to unify the entireschool administrative ecosystem,
allowing private schools to add multiple learning strategies and help them to
focus on education, throughthe physical and digital e-commerce platform (Livro
Facil) and other digital services of the Company. Operations related to
thissegment began with the acquisition of Livro Facil, and posteriory with the
acquisition of EMME, which has its digital platformaimed at the production of
educational marketing material for the Company's partner schools.
Additionally, in January 2022, the Companyacquired MVP and Phidelis.
Due to the nature of the Company's e-commerceplatform, the Content & EdTech
Platform segment sells its printed and digital content to the Digital Services
segment. These transactionsare priced on an arm's length basis and are to be
settled in cash. However, the eliminations made in preparing the
consolidatedfinancial statements are included in the measure of the segment's
profit or loss that is used by the CODM, and therefore the amountspresented
herein are net of such intersegment transactions.
The followingtable presents the Company's revenue, its reconciliation to
"profit (loss) before finance result and tax", assets andliabilities by
reportable segment. No other information is used by the CODM when assessing
segment performance:
March 31, 2023
Content & EdTech Platform Digital Services Platform Total
Net revenue from sales and services 345,384 57,451 402,835
Cost of goods sold and services (100,907) (54,219) (155,126)
Operating income (expenses)
General and administrative expenses (124,559) (2,722) (127,281)
Commercial expenses (43,096) (7,965) (51,061)
Other operating income 994 - 994
Impairment losses on trade receivables (10,335) (45) (10,380)
Share of loss equity-accounted investees (528) - (528)
Profit (loss) before finance result and taxes 66,953 (7,500) 59,453
Assets 7,430,665 115,069 7,545,734
Current and non-current liabilities 2,834,601 77,527 2,912,128
March 31, 2022
Content & EdTech Platform Digital Services Platform Total
Net revenue from sales and services 322,156 58,425 380,581
Cost of goods sold and services (84,497) (44,740) (129,237)
Operating income (expenses)
General and administrative expenses (112,894) (13,194) (126,088)
Commercial expenses (38,633) (9,300) (47,933)
Other operating income, net 933 - 933
Impairment losses on trade receivables (8,896) - (8,896)
Profit (loss) before finance result and taxes 78,169 (8,809) 69,360
Assets 7,268,326 134,939 7,403,265
Current and non-current liabilities 2,640,755 72,985 2,713,740
35
Vasta Platform Limited
Unaudited Condensed Interim Consolidated
Financial Statements as of three-month period ended March 31, 2023
In thousands of R$, unless otherwise stated
The Segments' profit represents the profitearned by each segment without
finance results and income tax expense. This is the measure reported to the
CODM for the purpose of resourceallocation and assessment of segment
performance.
The Company operates in Brazil, with no revenuefrom foreign customers.
Additionally, no single customer contributed 10% or more to the Company's
segments revenue for the periodsended March 31, 2023, and 2022.
28. Non-cash transactions
Non-cash transactions for the period ended March31, 2023 are: (i) Additions of
right of use assets and lease liabilities in the amount of R$ 11,808 (note
16), (ii) Disposals of contractsof right of use assets and lease liabilities
in the amount of R$ 2,418 (note 16), and (iii) Accounts payable assumed in the
acquisitionof Escola Start, during year 2023, in the amount of R$ 847 , net of
the percentage acquired (note 5).
* * * * * * * * * * * * * ** * * * *
Guilherme Melega
Chief Executive Officer
Cesar Augusto Silva
Chief Financial Officer
Marcelo Vieira Werneck
Accountant -
CRC: RJ - 091570/0-1
36
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