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Ladies and gentlemen, welcome, and welcome for waiting. Welcome to Ânima Educação earnings conference call related to the fourth quarter of 2019. Today with us, we have Mr. Marcelo Battistella Bueno, Chief Executive Officer; Mr. André Tavares, CFO; and Ms. Isabela Guir, IR analyst.
It's important to note that the company released today in its Investor Relations website. A video explaining the results for the period. And therefore, this conference call will be solely dedicated to the questions-and-answer session. Participants will be able to ask questions both in Portuguese and in English. And the company will make the transcription available in both languages in its IR website. [Operator Instructions] Today's webcast is available at http//stock.community/se.com/br/anima/4Q19.
Before proceeding, we would like to inform that forward-looking statements are being made during this conference call relative to Anima's business prospects, operational and financial estimates and goals. And they are based on beliefs and assumptions of company's management and on information currently available. Forward-looking statements do not guarantee future performance. They involve risks, uncertainties and assumptions because they refer to future events, and therefore, depend on circumstances that may or may not occur. Investors should understand that general economic conditions, industry-specific conditions and other operational factors may affect the future performance of Anima and may lead to results that will be materially different from those expressed in such forward-looking statements.
Now I would like to turn the conference over to Mr. Marcelo Battistella Bueno, who's going to begin the conference. Mr. Battistella Bueno, you may start.
Hello. We have a detailed presentation and comments and message from management. And it's important to reinforce that we are promoting the company. We have a very clear term in office and that has been granted to us by our Board of Directors and also by our shareholders, who have reinforced their trust on us in a follow-on. And we are very confident and with renewed energy to put in practice everything that has been asked from us.
I would also like to greet everyone at Anima, and everything that has been approved by CADE recently, and now formally, they are being integrated through a management agreement with us. And now with this short message, I conclude my introduction and I open for questions and answers. Thank you.
[Operator Instructions] First question is from Thiago Bortoluci from Goldman Sachs.
This is Thiago from Goldman Sachs. We have a question about SG&A. And this quarter, both G&A and corporate expenses -- in our understanding, G&A, there is an effect of expansion and there is also a variable compensation program. But overall, we would like to understand what is the level and the trend that you expect for these 2 lines along the year?
Thank you, Thiago. As you see, the G&A of Q4 has a seasonal effect and also impacted by our compensation program impacted by P2A and G&A. Also suffered the impact of the units that we opened in 2019 and 2018 that still have a G&A that is relatively high, considered that are still early in their maturity curve. Our expectation, both considering the maturity of those units and also the dilution of G&A after the acquisitions that we made last year, AGES, and the other acquisitions that have already been merged into our financials. Along 2020, there will be a greater dilution of G&A, and in percentage terms, a reduction of G&A levels that we have been seeing in 2019.
Okay. If I could get an update about M&A and pipeline of assets that you are seeing in the short and midterm.
Thank you, Thiago. So we are firm and optimistic and confident, and we are conducting some due diligence processes as reported, and we are focusing on the use of proceeds of our follow-on.
Our next question comes from Samuel Alves from BTG Pactual.
I have 2 questions. The first one regards raising of funds. If you could tell me what is the summer raising process in the beginning of 2020. And also regarding M&A, just to hear from you, whether the recent volatility in the market, has it been affecting your talks for this possible inorganic movements?
Thank you, Samuel, for your question. Well, as to the raising, we have more than 80% of the process already going on. So we are ready in quite a period about this process. So we'll announce on the first days of April right after we end this raising cycle, and we will announce all our numbers related to this period.
As to volatility, Samuel, we are very precise and goal-minded. And I think there are opportunities now. We have long-term conversations, and we have positioned ourselves with people who have conditions to continue a history of families that have been around for decades. So we're in -- short-term issues are not going to affect our negotiations. Much to the opposite, it might even help in our negotiations.
Now we are going to have Mr. Caio Moscardini from Morgan Stanley.
We have seen eviction getting better or dropouts getting better. How do you see that? Can you talk about the operational margin of the acquisitions that dropped in the quarter? What are the drivers that -- for this fall?
Thank you, Caio, for your questions. As to dropout rate, we have been working intensely, especially to improve the provision of services to students and the pursuit -- and in trying to receive the -- especially freshmen -- fresh students. So dropout is multifaceted with many drivers, and there's no silver bullet.
We are embracing many different fronts, and this is one of the main accomplishments that we have had in the last few quarters or years, with dropout rates getting better and better. And we are aware that as we have better and better performance, this incremental improvement is more and more challenging. And we expect 2020 to see an evolution, a positive evolution and an improvement, maybe not as significant as it was in 2019, but a consistent and gradual improvement of dropout rates.
As to operational margins of our acquisitions, there is a seasonal effect that is slightly stronger, especially because of AGES or A-G-E-S. As you must remember, it was only included in our financials in August. So it came in at a time of less positive seasonal effect, which is in Q3 and 4, and we believe this can be reverted. And 2020 results will show all units within this block of acquisitions continuing their pace for better performance, both there and associates and everything that comprises that block.
Our next question will be by Mr. Susana Salaru from ItaĂş
The first thing is, could you elaborate on the evolution of Q2A? And there has been an interesting evolution in your results in Q4 in terms of recovery. And we know that in 2020, they will have -- there will be a sharper effect. The 4-year program students will be graduating. Can you give us an idea of your expectation in terms of efficiency gains coming from this initiatives?
Susana, so your question was about Q2A? Our plan of -- organic plan for the opening units. So E2A, I'm sorry. That's why I was asking. E2A is our academic model. Well, certainly, this model is already providing efficiency gains, and I think that these gains are very clear. And we believe that we are very confident that after 2020, this year, we are going to accelerate the efficiency gains in our model. And we must remember that the model was implemented for all our programs early 2018, and after the third year, 2020. It's after the third year that we will be able to see more the effect in room design strategies, and we'll see efficiency gain in our courses.
Can you tell us how much more efficient or how many more students you can put in 1 classroom? Just for us to have an idea of the effect.
This parameter depends very much on the quality of capture and the variation that we see. If we look at -- in the longer term, 2 to 3 years, we have significant prospects of improvement, double-digit in percentage terms, in terms of efficiency gain, in terms of class design. So we -- there's a relationship between new students, new classes that we build and how much we can bring them together in 1 classroom, so just looking at our courses.
Second question regards the ticket recovery trajectory. You've mentioned that you are implementing many strategies to improve the ticket. Could you tell us the performance so far? Does it meet your expectations? Is it above or below your expectations? So which are the most efficient measures and the ones with the highest potential of adding value in terms of ticket?
Susana, we are in line with what we expect. This is a cultural change. And so it's a cultural change in the company, basic things, such as discount. And then instead of that, we are going to have merit-based scholarships, and this affects our ticket.
So this is a long-term measure, and this is no silver bullet. But there is nothing that we can apply. It's not based on SKU. We have NTC operating. So we want to avoid the price war and to get into focus more on value. So we've been seeing a movement, especially in SĂŁo Paulo and in other markets where we operate, and then this makes the situation more difficult, and we are trying to preserve these conditions.
So which are the measures that you still -- that you think there is still significant power in terms of unlocking value?
So we have NTC, and then we had benchmark. And we had a pilot project last year in 4 units. So there is a line of individualization of our pricing policy rather than a massive pricing policy or massive discounts. This is a policy that will make a difference for us. Also, we've tried.
And there are 2 squads, a main one focusing only on scholarship-creating policies and renewal of scholarships, which is something very important. So all our scholarships are related to merit, to academic performance. So we also want to promote the culture of the company. So not many people have been doing that. And this should go back to the levels that our product deserves. So this is where I see it.
[Operator Instructions] Very well. If there are no questions, we give the floor to Mr. Marcelo Battistella Bueno for his closing remarks. Mr. Bueno, please?
Thank you very much to everyone. Although no one asked any questions about coronavirus and everything that is happening, I think that it's important to tell our investors and the whole community that we -- in our company, we are working to be prepared to deal with whatever comes. We are receiving the support of our Board of Directors, our Risk and Audit Committee. And we've been working intensely to have a contingency plan in all aspects as well as thinking of extreme conditions we have. Thinking a lot about that. And then we want to be very sober and cautious about that and very efficient. We've been interacting with the Ministry of Health, and they've been doing very important work in our country.
So I want to convey this image. If you want to ask any questions to us about that theme, we are available. We are aware that our company has a long-term time frame, our product has a longer cycle, but we have to be prepared to whatever necessary and to do our best and to deal with the situation. So I want to convey this message to you. And also, I would like to thank everybody's trust and publicly thank the trust of our investors in our follow-on, which made us very proud. I would like to thank our teams, Investor Relations, Finance that have worked intensely and very well for us to have success in all aspects. And we are also available if you want to come to us to ask any questions. And I greet everyone, our teachers, educators, everyone in Anima's community, the newly arrived organizations, everyone working with us, all stakeholders. Thank you all very much, and have a good day.
So the conference call of Anima has ended. We thank you all for your attendance, and we wish you a very good day. Thank you.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]