Monday, August 26, 2013

FORBES MAGAZINE - A BILLIONAIRE OF GREAT FAITH

Among the highest tithe payers in the Mormon Church, Carlos Wizard Martins, who controls Multi Group, Dreams of transforming Brazil into a bilingual country.


BY FRANÇOISE TERZIAN PHOTOS ROBERTO SETTON 
About three years ago, banker Joseph Safra, the second richest man in Brazil, with a fortune of R$ 33.9 billion, accepted an invitation from his friend, client and self-made man Carlos Wizard Martins to visit the headquarters of the Mormon Church, The Church of Jesus Christ of Latter-day Saints, in the U.S. state of Utah. During the flight to Salt Lake City, aboard the banker’s comfortable private Boeing aircraft, Wizard, who is also on the list of Brazilian billionaires, although at a level 30 times below Safra, could not contain himself and took advantage of tea and cookies to pose a question that was intriguing him: “Mr. Safra, what motivates you to get up early each day, put on your suit, catch your helicopter, go to the bank, do your day’s work and only return home at the end of the day? Have you considered that you are building an ever-growing fortune that you will never be able to take advantage of?” The question was posed without embarrassment by this entrepreneur who owns the largest network of language schools in the country and one of the highest tithe payers among the 1.1 million members of the Mormon church in Brazil.

Safra responded: “You know, Carlos, all of us, after reaching a certain level of comfort and financial independence, build a future that we will never be able to personally enjoy. We do this purely for the pleasure, the fulfillment, the contribution.” Wizard tells this story, almost like a parable, in answer to a FORBES Brazil question concerning any real chances that he might free himself of Grupo Multi Educação.

It all began in 1987, with the creation of the first unit of Wizard Language School, soon after he returned from studying at the Mormon Church’s Brigham Young University, in the United States. In 2012, the business founded and controlled by him took in R$ 3 billion, and should close this year with R$ 3.6 billion.

Multi Educação is composed of 3 thousand schools under seven different brands – the Wizard, Yázigi and Skill language school chains, the Microlins, S.O.S and People vocational schools, and the Smartz tutoring services. In October, rumors were heard in the marketplace that the entrepreneur had hired André Esteves’ BTG Pactual Bank as a go-between with possible buyers. One publication went as far as to say that negotiations were difficult due to the high price being asked by the entrepreneur, who is now the President of the group’s administrative board. Wizard responds by saying that such information is no more than “a rumor spread by journalists who have nothing to write about”.

During the interview, lasting more than an hour and a half, the question was asked four more times. His answers could not have been more varied. “Someone once asked me what I would do if I didn’t teach English. I answered that I would teach Chinese,” jokes this entrepreneur who founded his teaching empire by giving English classes. He immediately reminds us that his name is Carlos “Wizard” Martins and that he expects to keep it for the rest of his life. Keep in mind that the name Wizard was adopted soon after the opening of the language school of the same name, as suggested by one of his franchisees. And to conclude, he says there are two types of entrepreneurs in the world. “The first, who acts purely for financial and economical interests and the second, who acts in the name of passion”. Mr. Safra’s answer has given him strength. 

As with Safra, Wizard says that he works for the sake of satisfaction and for the feeling that he is fulfilling a mission much greater than financial remuneration. The dream of this man who is in the habit of always saying thank you and who talks to his six children – two of whom are adopted – in English is to transform Brazil into a bilingual country. “Today, only 2% of the population speaks English fluently”, he affirms, reminding us that the country, that will by hosting several international events and that is on its way to becoming the fifth largest economy in the world, should not limit itself to Portuguese. 

In addition to private schools, the entrepreneur has worked with the government. Wizard has twice participated as part of President Dilma Rousseff’s entourage during visits to China and Russia. He has frequent contact with the Minister of Education, Aloizio Mercadante and has met with Vice President Michel Temer. He explains that the lack of knowledge of English is the great stumbling block in the federal program “Brazil without Borders”, in which many promising students lose the opportunity to study abroad because of their lack of English skills. 

The next 50 years are very encouraging for the teaching of English in the country. We are already the top Brazilian company in meeting the needs of the public in teaching English, with about 500 thousand learners, including students and government employees.” he says. This, however, is only the tip of the iceberg in his “project with nation-wide scope” to make English accessible to the masses. But he still does not offer details. The eagle, the symbol of Wizard, demonstrates a bit of the entrepreneur’s style. 

The entrepreneur who, in his childhood, dreamed of studying at Yázigi, had a difficult life, financially, until he turned the tables and became a billionaire. One recurrent question that everyone seems to ask him is if his faith has helped him to get to the top. “I make no effort to hide my personal, religious and spiritual values. Most certainly, my religious background had a great impact on my personal, academic and professional development. I like to think back on my life. What would have happened if I had not met up with the Mormons? Perhaps I would never have gone to study in the United States or at Brigham Young University. There I had the opportunity to teach Portuguese and that experience was the cradle from which my future enterprise in the field of education was born.” he observes. 

Son of Mormon parents, Wizard served, for five years, as a Bishop of the Church of Jesus Christ of Latter-day Saints. This was 20 years ago. From 2001 to 2004, the Church called him again and he served as the President of a mission, which required the entrepreneur to dedicate his time exclusively and to move to the Northeast (Paraíba, Rio Grande do Norte and Ceará), for three years, with his wife and two younger children. During this time, he cared for 200 young Brazilian and American missionaries. 

In the world of business, Wizard explains that the Mormon Church sees prosperity and professional growth as a virtue. “It encourages self-sufficiency”, he explains. And this is something Wizard never stops seeking. As a result of the growth of his group, he says that, sooner or later, he will have to buy a private jet. “It is a convenience that is justified if I don’t want to be held hostage by situations such as airport closings, and over-booked flights, resulting in unproductive days. When you begin to see the negative impact on million-dollar deals you are involved in, a plane becomes a business tool. It is like the difference between going by bus and driving a car.” he says. 

Wizard admits that he has not yet bought one because his wife, Vânia, resists. She has a famous saying that goes: “We have only succeeded for one reason. Carlos has learned to make money and I have learned to hold on to it”. Her husband says he has to give her credit because, ever since those financially hard times in the United States, she has always been frugal and cautious in financial questions. 

Multi’s flagship, Wizard, the first to be created, is the strongest of its brands and accounts for 50% of what it takes in. Of the 3 thousand schools of Multi Group in the country, – all of which are of the franchise model – 1,300 are Wizard schools. Curiously, one of the biggest franchises in the chain is in Rio Branco, Capital of Acre, and has 2,500 students. 

The secret ingredient of Wizard was to offer English to the upper-middle and middle classes, near the end of the 90’s, when only rich kids could study English in renowned private schools such as Cel Lep, Berlitz and Cultura Inglesa – as was the case in São Paulo. Based in Campinas (SP), the entrepreneur took in R$ 3 billion in 2012, thanks to the strategy of taking English classes out of the centers of town to the middle classes.

For example, the group has language schools in poorer parts of town and even in the Rocinha slum of Rio. “People there pay faithfully and they don’t pay late, either”, the entrepreneur affirms. 

In São Paulo, one of the largest units of Wizard is in Capão Redondo, a poor district in the southwest of the capital which is undergoing an economic upturn. The school in this neighborhood is three times larger than the school on Avenida Paulista, downtown. The growing number of students in that unit is indicative of our management and the result of a transformation in the marketplace, with upward mobility of 41 million Brazilians into the middle classes. Today, the monthly tuition in our chain is between R$ 200 and R$ 300”, he informs. 

Historically, the Multi group has grown 20% per year. Either naturally or through acquisitions. Wizard says he gives no heed to economic crises and cites the fact that his business survived the Cruzado Plan, when inflation reached 90% per month; survived the Collor Plan, when every Brazilian bank account was confiscated. And even survived the 9/11 attacks, that have been disastrous for English teaching because of the barriers put up by the American government for tourists and students. “Throughout the history of our business, we have lived through several financial and marketing crises and I, as a businessman, cannot even cogitate, accept or even believe in the existence of a crisis. Our tiny GNP of nearly 0% is merely another phase we are going through. We have a champion of a pedagogical and commercial model. We only need to make tiny changes in our strategy from time to time”, he explains. 

Because he was traveling so much, Wizard had an original idea: to open schools in airports. With Brazilians flying more, the goal is to use those places to teach the employees and to sell language course packages for any unit of the group in Brazil. Two months ago, the first school was opened in one of the terminals of the Guarulhos (SP) airport. Viracopos International Airport, in Campinas, will be the next. “By the time of the World Cup, we want to be in every host city airport,” he declares, hopefully. 

For Multi, the future holds an IPO – at least that was the plan for this year. “We prepared the bride to go to the alter this year. We made all the preparations in auditing, legal and balance sheets and we even made trips to New York to visit with potential investors. However, with our insignificant GNP and Americans pulling dollars out of Brazil, the curtain dropped. For this year, it’s all up in the air”, Wizard affirms.

The IPO will have to wait for 2014. The entrepreneur says he is in no hurry. Perhaps Kinea (a member of the Itaú group that holds 20% of Multi Group’s stock) is. But Martins answers that the company will maintain it’s course with or without Kinea and does not disregard the possibility, in case the IPO does not come about, of buying out the bank’s part. The entrepreneur claims to have enough cash to do so. Today, in addition to the income from the business, the Martins family owns 200 properties that they rent to franchisees. A bulls-eye strategy. Thank God.

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