Team. Andrés Varas CEO Cruz Blanca Salud. Marcelo Bermúdez CFO Cruz Blanca Salud

Transcription

1 April

2 Team Andrés Varas CEO Cruz Blanca Salud Marcelo Bermúdez CFO Cruz Blanca Salud 2

3 Our message We are positioned to gain market share in an industry that growths 10% (1) per year Diversification in the generation of cash flow Innovative solutions for our clients Three business areas Provider Insurance International Strengthening providers business (increase its share in revenues) Health plans with preferred provider in our own network Services with cero cost for our affiliates Expansion of current facilities and M&A New outpatient centers + Integramédica + Sonorad + Integramédica Perú Prospecting opportunities Hospital expansion # medical consultations # beds Hospital in Santiago (1) compound annual growth in health expenditure Source: Fonasa, Superintendencia de Salud and Cruz Blanca Salud 3

4 Our company 4 One of Chile s leading healthcare groups (~ US$1,0 billion sales in 2012) THREE BUSINESS AREAS Insurance / Isapre Cruz Blanca / Life Insurance Co. / Provider Hospitals / Clínica Reñaca / Clínica Antofagasta / / Clínica San José / Clinical Service / Outpatient / Integramédica / Sonorad / / Clínica Santa Lucía / Dr. Pilar Gazmuri / International / Resomasa / Integramédica Perú / employees doctors SUCCESFUL BUSINESS MODEL Commercial synergies Health plans with preferred provider in our own network +40% of the new plans sold 47% of our Isapre s expenditure is captured by our hospitals in their regions of influence Services with cero cost for our affiliates Cost synergies Controlled claims rate Supply contracts / Centralized back office Lower financing cost Attractive value proposition for our customers

5 Successful business model Insurance #2 Isapre in revenues avg beneficiaries avg policy holders 78 branch offices throughout the country Outpatient #1 provider of private outpatiente service 24 centers throughout Chile avg consultation rooms ~ visits z Life Insurance Co. International Initiating Latam expansion Perú (outpatient) Hospitals Leading hospitals in their regions 3 hospitals 366 beds ~ hospitalizations Santiago hospital project 5

6 Strategic guideline To double our EBITDA in 5 years through organic growth ( ) Expanding offering of health plans to market segments enrolled in the public insurer Low cost closed plans Growing in the provider business Main driver: Outpatient business Increasing profitability of current facilities and expanding capacity New outpatient centers: 16 Integramédica centers 6 Sonorad centers 6 Integramédica Perú centers Santiago hospital project: 298 beds (first stage) Increasing synergies among our businesses Hospitals master plans 128 beds 22 consultation rooms 6 Insurance Provider Outpatient Hospitals International

7 Ownership structure (december 2012) Main shareholders with a strategic long term vision Securities funds 19,76% Stockbrokerage houses 8,25% Private pension funds (AFPs) 4,46% Mutual funds 4,53% Insurance companies 0,96% Said Group 40,64% Other shareholders 21,42% 7

8 FINANCIAL RESULTS 8

9 Consolidated results (US$ millions) Revenues EBITDA CAGR (10-12) CAGR (10-12) 560,3 734,9 831,2 942,7 62,3 3,5 80,3 77,6 16, revenues include business interruption insurance payment to Integramédica (US$ 3,5 million) EBITDA includes business interruption insurance payment to Integramédica (US$ 3,5 million) Net profit CAGR (10-12) 19,7 6,1 36,9 Sustained revenue growth; +10% CAGR in the last three years 2,1 34, net profit includes insurance payment to Integramédica due to property damage and business interruption (US$ 6 million) Fx rate: Ch$500/US$ 9

10 Consolidated results (US$ millions) Revenues breakdown 2012 US$943 million Insurance 686 Outpatient 201 Hospitals 101 International 4 Others(1) (49) CBS EBITDA breakdown 2012 US$78 million Insurance Summary balance sheet Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Equity (Controlling shareholders) Equity (Minority interest) Total Liabilities + Shareholder's equity Net financial debt (NFD) NFD / EBITDA 3,7 x 0,8 x 1,8 x Outpatient 35 NFD / Equity 1,3 x 0,2 x 0,4 x Hospitals International Others(1) (0) (1) 16 Balanced generation of cash flow CBS 78 (1) Consolidation adjustments and other minor subsidiaries (Holding Cruz Blanca Salud S.A. and Servicios de Gestión Ltda.) Fx rate: Ch$500/US$ 10

11 Outpatient business: Integramédica #1 private outpatient service provider #1 in revenues in the outpatient market % market share by revenues Multiformat multibrand strategy Integramédica = 16 outpatient centers Sonorad = 6 diagnostic centers Others (2 centers) Outpatient services at affordable prices Medical consultation / Imaging / Dental / Ancilliary services/ Others 10% 90% Source: Cruz Blanca Salud Integramédica Others Chile s largest private clinical laboratory 27 specimen collection points Approximately ~ annual lab tests doctors 11

12 Integramédica, #1 private outpatient provider Revenues of 2012 reached US$201 million (+26%; excluding non recurrent effects) o Growth in current outpatient centers Higher activity generated by the beneficiaries of Isapre Cruz Blanca (18% of sales) Expansion and remodeling of outpatient centers Commercial agreements and initiatives with other Isapres and Fonasa o New businesses (Clínica Santa Lucía, Biolab, Pilar Gazmuri and Sonorad) o New outpatient centers (Puente Alto, Maipú y Talca) EBITDA of 2012 amounted to US$35 million (+18%; excluding non recurrent effects) o Sales mix with greater ratio of diagnostic exams and dental services which contribute with higher margins o Savings as result of price negotiations with suppliers of reactives used in laboratories o Newly acquired businesses (Clínica Santa Lucía and Sonorad) effect and the start up expenses of Puente Alto, Maipú and Talca centers Revenues US$ thousands CAGR (10-12) revenue includes business interruption insurance payment to Integramédica (US$ 3,5 million) EBITDA and EBITDA margin US$ thousands / % CAGR (10-12) ,1% 20,3% 17,3% Margen EBITDA 2011 EBITDA includes business interruption insurance payment to Integramédica (US$ 3,5 million) Fx rate: Ch$500/US$ 12

13 Hospital business: Clínicas Reñaca, Antofagasta and San José de Arica, and Clinical Service (home care) Presence in three regions of the country Leading hospitals in their geographic areas (#1 in market share) High complexity sqm built 366 beds / 80 critical 81 medical consultations Clinical Service one of the leading home health care providers 13

14 Leading hospitals in their geographic areas Revenues in 2012 reached US$101 million (+4%) o Greater activity in emergency rooms o Higher lab test exams o Competitive environment faced by Clínica Reñaca Revenues US$ thousands CAGR (10-12) EBITDA amounted to US$16 million (-14%) o Decrease of Clínica Reñaca s occupancy rate (2pp reduction) o Higher clinical personnel expenses (collective negotiations in Clínica Reñaca, Clínica San José and paramedics in Clínica Antofagasta) o The effect of a one-time extraordinary increase in bad debt provisions due to an exhaustive examination of Clínica Antofagasta s account receivables EBITDA and EBITDA margin US$ thousands/ % CAGR (10-12) ,6% 18,6% ,4% Fx rate: Ch$500/US$ EBITDA margin 14

15 Insurance business: Isapre Cruz Blanca Operating since the creation of the private health system in Chile (1981) #2 in revenues in the Isapre market % market share by revenues Brand strengh (#2 in market share) 78 branch offices and three mobile offices (nationwide coverage) 27,8 21,6 20,1 17,3 13, th avg policy holders +615 th avg beneficiaries Banmédica Cruz Blanca Colmena Consalud Masvida Regulatory framework undergoing revision Source: Asociación de Isapres, December 2012 figures o Changes likely to provide increased certainty on business regulation Life Insurance Co. under development 15

16 Isapre Cruz Blanca, #2 in revenues Revenues in 2012 reached US$686 million (+13%) o Policy holders growth Higher health plans sales as a result of the favorable economic cycle of the country Successful commercialization of MaxSalud plans Lower disenrollment rate Higher productivity of sales force o A real increase in the price of health plans of 6,9% performed in July 2011 and 2,7% in July 2012, which is gradually captured according to the turnover rate of the affiliates base o Successful administration of collection Revenues US$ thousands CAGR (10-12) Claims rate % ,0% 84,2% 86,1% EBITDA amounted US$28 million (-12%) o Higher claims rate (84,2% v/s 86,1%) Temporary disabilities claims increase Increase in hospitalizations expenses and elective surgeries o Offset by lower SG&A expenses as proportion of sales (from 11,3% in 2011 to 10,6% in 2012) EBITDA and EBITDA margin US$ thousands / % CAGR (10-12) ,9% 5,3% 4,1% EBITDA margin Fx rate: Ch$500/US$ 16

17 INVESTMEN PLAN

18 Investment plan : Capex ( ): US$ 350 million Life Insurance Co. US$ 6 million Santiago hospital US$ 150 million Perú US$ 35 million Isapre US$ 14 million Hospitals (existing) US$ 55 million Integramédica US$ 90 million Inorganic growth and development of new businesses Analysis of growth through M&A (recently P. Gazmuri, Biolab, Resomasa, Clínica Santa Lucía, Clinical Service and Sonorad) Fx rate: Ch$500/US$ 18

19 Acquisitions Biolab Centro de Diagnóstico Dra. Pilar Gazmuri Resomasa (Peru) Clínica Santa Lucía Clinical Service Sonorad Fx rate: Ch$500/US$ Clínica Santa Lucía Main outpatient center of the San Bernardo area of Santiago Acquisition of 100% of equity = US$ 6,2 million sqm / 75 consultation, exam and procedure rooms Revenues (US$ mm) 6,9 9,4 EBITDA (US$ mm) 0,7 1,4 Clinical Service Home health care provider, #2 in market share Acquisition of 100% of equity = US$ 2,8 million Bed days 2011 = Revenues (US$ mm) 3,4 3,0 EBITDA (US$ mm) 0,6 0,3 Sonorad Outpatient network of diagnostic exams Acquisition of 100% of equity = US$ 13,8 million 6 outpatient centers / lab exams / imaging exams Revenues (US$ mm) 14,6 15,5 EBITDA (US$ mm) 1,2 2,1

20 Investment plan: Integramédica Integramédica 13 centers Puente Alto S. Bernardo Santiago Integ. 22 Integ. 26 Maipú S. Bernardo Integ. 23 Integ. 27 Talca La Florida Integ. 24 Integ. 28 Concepción Integ. 25 Integ. 29 Sonorad 6 centers Sonorad 7 Sonorad 9 Sonorad 11 Sonorad 8 Sonorad 10 Sonorad 12 Others P. Gazmuri # centers Reference: Opened Location contract signed Acquisition 20

21 Investment plan : Integramédica Recently opened: Maipú center Talca center US$4,5 million investment Opened in December sqm Consultation rooms: 39 medical consultations 15 dental 5 kinesiology 10 sample collection points MRI US$2,2 million investment Opened in December sqm Consultation rooms: 32 medical consultations 8 dental 4 kinesiology 8 sample collection points Fx rate: Ch$500/US$ 21

22 Investment plan: Isapre Cruz Blanca 22 Max Salud Group of closed plans initially sold only in Santiago Patients are served by a general practitioner (GP) and specialists at Integramédica s outpatient centers and a defined hospital network The goal is to offer an integrated product; low cost and high quality Target segment is the high-end of the public system (FONASA) policy holders at the end of 2012 Life Insurance company Flexible business model for possible outcomes from Isapre s regulation changes Seeks to participate in new health market segments, which have had a strong development through the last years (US$411 million market) Diversification in the generation of revenues Group synergies Additional products Health insurance Mandatory personal accident insurance Complementary companies insurance Fx rate: Ch$500/US$

23 Investment plan: Clínica Reñaca Master plan ~ US$21 million (40% of advance) Remodeling and expansion of the Hospital Operating room remodeling Increase of parking space Additional sqm 28 new beds by 4Q 14 (with the capability of an additional 54 beds) Fx rate: Ch$500/US$ 23

24 Investment plan: Clínica Antofagasta and San José Master plan Clínica Antofagasta Maternity hospital - Pediatric Starting in 2013 US$15 million investment sqm 70 additional beds at the beginning of 2015 Master plan Clínica San José Outpatient center Starting in 2013 US$3 millones investment sqm 22 new consultation rooms for 2015 Fx rate: Ch$500/US$ 24

25 Investment plan: new projects Perú Recently initiated activities in Perú: Creation of the subsidiary Cruz Blanca Salud Perú S.A.C. Acquisition of Resomasa (imaging) Analysis of opportunities in the outpatient, hospital and insurance businesses in Perú Integramédica Perú development plan: 2 centers per year for the next 3 years; reaching a total of 6 new centers Contract signed for the first location in Megaplaza Independencia, which allows to open the first outpatient center for the end of The center will have sqm surface with an investment of US$4,9 million Fx rate: Ch$500/US$ 25

26 Investment plan: new projects Property acquired ( sqm) New Hospital in Santiago Total estimated investment of US$ 170 million (US$20 million already invested in 2012) Initial capacity of 298 beds (up to 432 beds) New subsidiary created: Inversiones Clínicas CBS S.A. Perú Fx rate: Ch$500/US$ 26

27 Appendix: Industry dynamics Policy holders and their dependants (together beneficiaries ) Insurance Market (1) US$ million Higher income population Q: 18% $: 35% Lower income population Q: 82% $: 65% Fonasa (public health insurance) Institutional mode Free election mode Public provider (outpatient or hospital) Private provider (doctors, outpatient or hospital) Decision on which health insurance to choose (public or private) is made by policy holders Policy holders contribute a mandatory 7% of their salary, with a cap, and can contribute an additional voluntary amount Employers only collect employee contributions and pay them to insurers Members decide according to their health plan where to get care Insurers pay care providers up to the plan coverage and members pay the difference ( copayment ) Isapre (mandatory private health insurance) Closed or preferred provider plans (1) Source: Cruz Blanca Salud, from Superintendencia de Salud (National Health Authority) figures and Fonasa (National Health Fund). Does not include Armed Forces, worker s compensation, medical leave expenditures and voluntary health insurance (2) Fx Rate: Ch$500/US$ Can be the same Closed or preferred provider (outpatient or hospital) Cruz Blanca Salud business areas 27

28 Disclaimer The information contained herein shall not be deemed an indication of the state of the company s business, financial condition, results of operations and/or prospects. The company assumes no responsibility for, or makes any representation or warranty, express or implied, with respect to, the accuracy, adequacy or completeness of the information contained herein. The Company expressly disclaims any liability based on such information, errors therein or omissions therefrom. The information contained herein has been prepared to assist interested parties in making their own evaluation of the company and does not purport to be all-inclusive or to contain all the information that a potential counterparty may desire. In all cases, interested parties should conduct their own independent investigation and analysis of the company. Interested parties can only rely on the result of their own investigation and the representations and warranties made in any definitive agreement that may be executed. Prospective investors who require additional information or have questions regarding the company should direct correspondence to or contact: Joaquín Solís de Ovando (ir@cruzblanca.cl). 28

29 April