1Q11 Results FLRY3 I BGCs 2010 Corporate Governance award in the - - PowerPoint PPT Presentation
1Q11 Results FLRY3 I BGCs 2010 Corporate Governance award in the category for listed companies IBGC - Brazilian Institute of Corporate Governance The most valuable brand in the Brazilian healthcare industry The 6th most valuable brand
TODOS OS DIREITOS RESERVADOS – 2010
IBGC’s 2010 Corporate Governance award in the category for listed companies IBGC - Brazilian Institute of Corporate Governance “The most valuable brand in the Brazilian healthcare industry The 6th most valuable brand among the service companies The 25th most valuable Brazilian brand” Millward Brown / BrandAnalytics
This presentation may contain forward-looking statements. Such statements are not statements of historical facts and reflect the beliefs and expectations of the Company s management. The words “anticipates”, “believes”, “estimates”, “expects”, “forecasts”, “plans”, “predicts”, “project”, “targets” and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Known risks and uncertainties include but are not limited to the impact of competitive services and pricing market acceptance of services, service transactions by the Company and its competitors, regulatory approval, currency fluctuations, changes in service mix
statements speak only as of the date they are made and the Fleury Group does not undertake any
All figures are compared to 1Q2010 except when stated otherwise
3
4
(R$ million)
5
Gross Revenue EBITDA Net Income
6
¹ Clinical Trials and Fleury Day Hospital.
Gross revenue grew by 13.6% adding up to R$ 247 million Organic growth achieved 13.3% Number of patients grew by 5.2% Strategy of differentiation, satisfying demands from new and existing clients for Integrated Solutions Innovation in tests, procedures and services New Integrated Medical Centers
7
Gross Revenue: R$ 247 million Growth 1Q11 vs 1Q10: R$ 29.6 MM | 13.6%
R$ 20.0 MM | 10.8% R$ 9.2 MM | 51.7% R$ -0.0 MM | -0.4% R$ 1.3 MM | 38.2% R$ -0.8 MM | -52.4%
By type of test (%)
¹ Clinical Trials and Fleury Day Hospital.
10.8% increase in gross revenue, amounting R$ 206 million “Same store sales” grew by 11% Average revenue per PSC grew by 12%
Gross Revenue and Number of tests
8
Average revenue per PSC (R$ million)
Number of PSCs
Average revenue per square meter grew by 4.2% Total area achieved 56.7k m², after the addition of 2.2k m² Addition of services in different PSCs Schedule of new net square meters addition in 2011: 1Q11: 2.2 k 2Q11: 1.9 k 3Q11: 2.5 k 4Q11: 7.9 k
Average revenue per square meter and total square meters
9
New PSC in Recife - Pernambuco
51.7% increase, achieving R$ 26.9 million 10.9% share in Fleury Group’s Revenue Number of tests performed expanded by more than 40% Started to operate in March inside Hospital A.C Camargo (Hospital do Câncer) The acquisition of “DI” increased the scope of alliance with Hospital Alemão Oswaldo Cruz
10
Gross Revenue and Number of tests
11
Lab-to-lab reached R$ 8.2 million, similar to 1Q10 Expansion of high complex tests – better returns Progressive discontinuation of the Clinical Trials business
R$ 1.4 million on 1Q10 to R$ 0.7 million in the 1Q11
Gross Revenue and Number of tests
12 12
38.2% increase, amounting to R$ 4.8 million and representing 1.9%
the Group’s revenues Chronic Disease Management (GDC) service reached 33k lives under contract; Revenues amounted to R$ 1.0 million Health Assessment revenue increased by 24%, with a 17% growth in the number of
more than 30%
12 12
Gross Revenue (R$ million) GDC Lives under contract (thousand)
13 13
1Q11 1Q10 (%NR) 4Q10 R$ mm % NR Adjusted criterion¹ Reported Adjusted criterion¹
Personnel and medical services
69.3 30.1% 30.9% 28.4% 33.9%
Materials and Outsourcing
26.1 11.3% 12.6% 12.3% 11.6%
General services, Rent and Utilities
30.6 13.3% 12.6% 11.9% 12.5%
General Expenses
15.3 6.6% 7.5% 5.2% 8.2% Total 141.2 61.3% 63.5% 57.8% 66.2%
¹ Change in allocation criterion implemented in 1Q11, operational back-office costs were formerly allocated in SGA
42,2% 36,5% 38,7%
+97 bps +71 bps +55 bps
1Q10 Gross Profit Mg. Allocation Criterion 1Q10 Adjusted Gross Mg. Fixed cost dilution Mix improvement Cost < Price 1Q11 Gross Profit Mg.
14 14
Gross profit has reached R$ 89.3 million, a 19.9% increase over adjusted 1Q10 38.7% of Net Revenue (223 bps increase)
Benefit in the margin by event, normalizing allocation criteria (%)
15 15
Increase of 230 basis points, mainly caused by: Pre-operational expenses related to the expansion plan, write-off of tax assets and expenses related to the acquisition of Diagnoson and Labs D’Or 225 bps are non-recurring Depreciation - R$ 9.3 million, compared to R$ 8.2 million in 1Q10
¹ Change in allocation criterion implemented in 1Q11, operational back-office costs were formerly allocated in SGA
1Q11 1Q10 (%NR) 4Q10 R$ mm % NR Adjusted criterion¹ Reported Adjusted criterion¹
General and administrative
34.1 14.8% 11.7% 17.4% 13.8%
Other operating expenses (revenue), net
2.9 1.3% 2.9% 2.9% (1.6%)
Contingency provision
1.7 0.7% (0.1%) (0.1%) 1.7% Operating Expenses (ex-depreciation) 38.7 16.8% 14.5% 20.2% 13.9%
16 16
1- Other: Non Recurring Provisions, Assets Write-offs, Equity in Subsidiaries
1Q11 Income Tax and Social Contribution Reconciliation
17 17
17.1% growth, adding up to R$ 27.4 million Profit margin represented 11.9% of net revenue EPS (earnings per share) of R$ 0.21 (R$ 0.18 in 1Q10) Net Income and Profit Margin
(R$ million)
4.6% 6.2% 10.9% 11.5% 15.0% 11.9%
EBITDA margin of 21.9%, similar to 1Q10, an 12.7% increase, achieving R$ 50.6 million
EBITDA and EBITDA margin on net revenue
17.9% 22.9% 23.3%
18
23.1% 21.9% 22.0%
1Q11 1Q10 Var. R$ mm % NR R$ mm % NR Net Income 27.4 11.9% 23.4 11.5% 41 bps Financial Expenses (Income) (7.2) (3.1%) (3.7) (1.8%)
Depreciation and amortization 9.3 4.0% 8.2 4.0% 0 bps Income Tax and Social Contribution 21.1 9.2% 17.0 8.3% 83 bps EBITDA 50.6 21.9% 44.8 22.0%
(R$ million)
19
1Q11 1Q10 Diagnostic Medicine ¹ Integrated Medicine ² Diagnostic Medicine ¹ Integrated Medicine ² Gross Revenue (R$ million) 206.2 40.6 186.2 31.0 Net Revenue (R$ million) 192.5 38.0 175.2 28.7 EBITDA (R$ million) 46.2 4.4 42.1 2.7 EBITDA margin 24.0% 11.5% 24.0% 9.6%
1- Diagnostic Medicine (MD): PSCs business line 2- Integrated Medicine (MI): Diagnostic Operation in Hospitals, Lab-to-Lab and Preventive Medicine
20 20
Capital Expenditure added up to R$ 22.6 million
R$ 22.6 million
CAPEX Breakdown 1Q11
Cash Flow 1Q10 R$ MM
30.9 Investing Activities (23.5) Financing Activities (8.4) Net Cash Flow (1.1) Return % ROIC 1 (LTM) 19.9%
(1) Calculated by dividing (a) earning before interest and taxes minus taxes, by (b) average equity plus average net debt, including obligations related to acquisitions
Debt Position Total (R$ MM) Next 12m Loans 78 24 Acquisitions 30 7 Taxes 74 13 Total Debt 182 44 Cash and Equivalents 542 Loans / Equity 10.9% Loans / EBITDA 37.8%
21
Account Receivable 03/31/2011 12/31/2010 Trade receivables 251 234 Other receivables 4 2 Bad debt (31) (33) Total 224 203 Aging Acc. Receivable 03/31/2011 12/31/2010 Current 141 108 Up to 60 days past due 21 36 60 to 120 days past due 12 12 Over 120 days past due 77 78
22 22
+51.6%
Shares and Market Cap - 03/31/2011 Shares Outstanding 131,298,550 Free Float 37.2% Market Cap R$ 3.2 billion Close R$ 24.25 Stock performance 1Q11
4Q10 +26.9% FY10 +44.9% Since IPO +51.6% Average Daily Trading Volume 1Q11 R$ 5.0 mm 4Q10 R$ 3.9 mm FY10 R$ 3.3 mm Free Float breakdown
Source: Fleury data, Mar 2011
2011 Events Jun 6-7 Non-Deal Roadshow Singapure and Hong Kong Jun 8-9 Goldman Sachs - Annual Global Healthcare Conference – California Jun 20-22 Citibank - 4th Annual Brazil Equity conference – Sao Paulo Aug 04 Release of 2Q11 Results Aug 05 2Q11 Results Conference Call
23
TODOS OS DIREITOS RESERVADOS – 2010
São Paulo, maio de 2011
Branding Project: Planning
Branding Project: New Brand
A pioneer movement: integration of 13 Brands into 1, reinforcing Fleury Group’s presence.
Investigation
Brand Platform & Framework Naming Language & visual identity Brand Book
Implementation
STRATEGY IDENTITY IMPLEMENTATION
Marketing surveys: 5.000 people 14 cities Essence Attributes Positioning Client flow experience Aesthetic guidelines Jan 2010 Dec 2010 / Jan 2011
General population perception Physicians perception HMOs Market share
Fleury Group’s New Brand
History Ethics Knowledge Excelence and quality Reliability Endorsement
Brand integration
São Paulo Porto Alegre Rio de Janeiro Recife Curitiba Salvador Brasília
Expected benefits
1) New brand with unique competitive attributes and positioning 2) Strong potential for capturing B/C segments 3) HMOs: positive reaction 4) Operational synergies 5) High commitment of our employees to a novel, strong brand 6) Leverage of our capacity to integrate new acquisitions 7) Strong brand portfolio (Fleury, Weinmann, Campana and a+) with clear value propositions and high competitiveness