Kroton Educacional Presentation Now Available for On-Demand Viewing

Recent Company Highlights

• Nine on-campus units started operating in the beginning of this year, offering programs primarily in the fields of engineering and medicine. Compared to early 2017, 14 new units already have fully operational student-recruiting processes, which shows that the Company's expansion project is being delivered in accordance with the guidelines of its Strategic Planning. In addition, in the Distance Learning segment, 100 new centers started operations in 2018, as part of the regulatory bonus currently in force. Another 100 new centers are expected to open by mid-April, bringing to 400 the number of new centers inaugurated since the approval of the new regulatory framework, consolidating Kroton's presence in the segment and strengthening its student recruiting process. Furthermore, 502 centers are already offering Premium DL programs, an increase of 44% on the same period of 2017, which further expands the portfolio of programs offered by Kroton.
• Turning to performance in the quarter, net revenue was virtually stable compared to 4Q16, down a slight 1.0%, as a result of the sale of FAIR and FAC/FAMAT in late August and the lower number of students in the period due to the higher dropout and graduation rates in the semester. These factors offset the solid performance of the latest enrollment and re-enrollment processes and the better program mix (including the offering of Premium DL programs). On the other hand, net revenue in the year was R$5,557.7 million, advancing 6.0% on 2016, reflecting Kroton's solid performance throughout recent years, despite the unfavorable economic environment in the period.
• Adjusted EBITDA amounted to R$534.1 million in the quarter, an increase of 1.0% over 4Q16, accompanied by EBITDA margin expansion of 70 bps. In the year, Adjusted EBITDA grew 6.5% to R$2,450.7 million, with margin expansion of 20 bps on 2016, in line with the guidance announced at the start of 2017. Delivering the guidance for the year and, most importantly, higher profitability in a still-challenging economic scenario, marked by adverse effects on both revenues and PDA, is the biggest proof that the Company has been able to manage solid efficiency levers, while setting itself apart in the industry in relation to its capacity to create value. Excluding the figures for Uniasselvi, FAIR and FAC/FAMAT from the results for both years, Adjusted EBITDA in 2017 grew 7.8% compared to 2016, with margin expansion of 30 bps.
• Operating cash generation after capex reached R$392.2 million in 4Q17, with an EBITDA-to-Cash conversion rate of 82.9%, once again demonstrating the strength of the Company's operations, despite all the challenges faced during the economic crisis and the expanded offering to students of private tuition payment products using own capital. In the year, operating cash flow after capex amounted to R$1.3 billion, for a conversion rate of 59.2%.

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About Kroton Educacional

Kroton Educacional is one of the largest private educational organizations in Brazil and worldwide, with a trajectory of over 50 years rendering services in the Primary & Secondary education segment and over 15 years in Postsecondary Education. In 2010, Kroton acquired IUNI Educacional Group, an institution which also offered on-campus undergraduate and graduate programs; in 2011, the highlight was the acquisition of Universidade Norte do Paraná (Unopar), the largest distance learning institution in the county. To crown this intense rhythm of acquisitions, in 2013, Kroton carried out the largest investment in its history: its merger with Anhanguera, thereby consolidating its leadership in both the on-campus and distance learning segments.

Currently, Kroton has 129 Postsecondary Education campuses, spread across 19 states and 90 cities in Brazil, in addition to the 1,210 Distance Learning centers accredited by the Ministry of Education (MEC) located in all Brazilian states and in the Federal District. The Company has, in Primary and Secondary Education, 672 associated schools in all Brazilian states.

Fully committed to good corporate governance practices and excellence in its investor relations, Kroton seeks to ensure efficient and transparent information disclosure. Its shares are listed on the Novo Mercado of São Paulo's Stock Exchange – B3 (KROT3) and on the OTCQX in New York (KROTY).

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SOURCE Kroton Educacional