Annual Meeting

Transcription

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2 Agenda 1 Accredited dentist network 2 Sustainability & marketing 3 Innovation and digital transformation 4 Results and value driven Company 5 Odonto System acquisition 6 Final considerations 2

3 José Roberto Pacheco Accredited dentist network 1 3

4 Largest and best dentist network National distribution Differentiated academic background Continuous education 24/7 call center 28,000 dentists at 2,600 cities 4

5 Proprietary IT Platform: information-driven decisions Complete dental record of all beneficiaries 3 decades of actuarial data Risk management and fraud prevention 5

6 Proprietary IT Platform: information-driven decisions Quality assurance Clear barrier to entry Cost control 6

7 Continuous Education Program Courses via e-learning, clinical newsletters, podcasts, - Revista UNNA Conection Share technical information, to better manage the dental offices and the scientific update of the network Successful partnership with FUNDECTO, agreed to the School of Dentistry of São Paulo (FOUSP) 7

8 Rede Unna Forum Annual event with the professionals who stood out the most during the year regarding the service OdontoPrev beneficiaries Research conducted by Instituto DataFolha National and international lectures by renowned professionals in the market 8

9 Robert Wieselberg Marketing, Sustainability, 2 Innovation and Digital Transformation 9

10 Sustainability Environmental Policy published in 2004 Planting of more than 11,300 trees since equivalent to 13 football fields - in CO2 neutralization projects Support to 23 institutions providing access to oral health to children in situations of vulnerability - more than 108 thousand children attended from the beginning Signatory of the UN Global Compact 10

11 Amalgam Recycling Project Partneship with University of São Paulo since 2005 More than 8.5 kg of mercury and silver recovered through correct disposal of the amalgam by the accredited network - equivalent to more than 30 thousand restorations 11

12 Triple Bottom Line: People, Profit & Planet Planet - refers to the impacts of our actions on the planet People - refers to the impacts of our actions on society Profit - refers to the results of our shares for the shareholder 12

13 Emission management 2 thousand trees planted in Candido Portinari State Park (SP) by employees, suppliers, accredited network and partners 13

14 New brand placement Before: The healthcare of your smile. We empower and enhance people's self-esteem and well-being through the provision of quality dental plans at affordable prices. Invitation to society to think: "Your mouth speaks for you. What have you done for her? " 14

15 New E-commerce Platform Wide range of unique dental care solutions with higher average ticket 15

16 Digital transformation Prívian App Full refund process via App Payment in up to 48 hours Comfort, no bureaucracy Refund preview Virtual card Network Location Concierge Contacts 16

17 Digital transformation OdontoPrev UNNA Network App Launched in 2015, ~ 8,500 dentists Unique features that facilitates the accredited dentist routine Real-time sharing of:. Documents / X-rays / photographs of oral treatments Stored images available for consultation, including offline 17

18 Image upload channels % 47% 12% M17 16% 30% 36% 47% 37% 34% CNSeg 2016 Award 1st place Mail Unna Network App Others 18

19 Marcelo Galvão Innovation and Digital Transformation 3 19

20 100+ Innovating in IT Award, in Health category: DCSS 20

21 DCSS Dental Care Sales System Multi-platform supporting device Technological Arquitecture Sales and comissioning structure flexibility Multichannel Brokers Call Center Partners Support to different sales scenarios Multi-branding DCSS Ease of use Different means of payment Bank slip Credit Card Automatic debit 21

22 DCSS Dental Care Sales System Multidisciplinary Team Design Thinking Agile methodology Shared management (IT + Marketing) 22

23 Innovation driven company Innovation map with four main drivers: Partnership and sales channel expansion Customer atraction and conversion Customer retention Operational efficiency increase 23

24 Innovation driven company Innovation map with four main drivers: Partnership and sales channel expansion Customer atraction and conversion Customer retention Operational efficiency increase Facilitated through the following digital platforms: Brokers Individuals SME Beneficiaries Accredited Network 24

25 José Roberto Pacheco Results and 4 Value driven Company 25

26 OdontoPrev: 11 years of sustainable value creation since IPO Revenues in R$ million ,070 1,156 1,250 1,365 1, IPO OCT16 SEP17 26

27 Total Shareholder remuneration since the IPO OdontoPrev x IBrX 27

28 3 accelerated growth cycles in the dental sector, over the last decade 28

29 3 accelerated growth cycles in the dental sector, over the last decade 1,5 Year Number of memebrs Strategic Reason 7,3 9,2 11,1 13,3 0, ~1 million Strategic partnership with OdontoPrev

30 5 19,6 13,3 11,1 0,6 2,1 9,2 7, ,1 1,1 3 accelerated growth cycles in the dental sector, over the last decade 1, Year Number of memebrs Strategic Reason ~1 million Strategic partnership with OdontoPrev ~1 million Acquisition by UnitedHealth 30

31 5 19,6 13,3 11,1 0,6 2,1 9,2 7, ,1 1,1 3 accelerated growth cycles in the dental sector, over the last decade 1, Year Since 2014 Number of memebrs ~1 million Acquisition by UnitedHealth +650 thousand +600 thousand Strategic Reason ~1 million Strategic partnership with OdontoPrev Strategic movement 31

32 Source: ANS Dental plans sector evolution DEC16 OCT17 (thousand lives) 21, Others 22,966 DEC16 With 14% of market share, two companies represented 59% of the sector growth in. OCT17 32

33 25 Monthly net additions (thousand lives) Source: ANS 56 Dental/ Medical (%) -8 OCT16 NOV16 DEC16 JAN17 FEB17 MAR17 APR17 MAY17 JUN17 JUL17 AUG17 SEP17 OCT17 61% 60% 61% 61% 62% 61% 63% 66% 69% 71% 73% 76% 77% 33

34 Monthly net additions (thousand lives) Source: ANS Dental/ Medical (%) OCT16 NOV16 DEC16 JAN17 FEB17 MAR17 APR17 MAY17 JUN17 JUL17 AUG17 SEP17 OCT17 65% 69% 69% 70% 76% 80% 80% 79% 80% 79% 81% 82% 82% 34

35 9M17 Results Net Revenues R$ million Adjusted EBITDA R$ million and % Sales Net Income R$ million 1,013 5% 1, % 258¹ 24.2¹ % 186¹ M16 9M17 9M16 9M17 9M16 9M17 ¹ ¹Ecludes Bradesco Dental and OdontoPrev INSS reversals 35

36 Membership and revenues breakdown 3Q14 Members Revenues 81% 76% 19% 3Q17 74% 65% 26% 35% 36% 24% 25% Corporate SME + Individual Plans 36

37 Corporate segment upturn Quarterly net additions (Thousand lives) Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 37

38 Positive effects of bank channels & Retailers 3Q17 List prices R$45.60 R$29.90 Selling expenses Profitability 10% to 15% Higher 25% to 45% Lower 38

39 Positive effects of bank channels & Retailers Individual Plans portfolio breakdown 3Q17 3Q17 List prices R$45.60 R$29.90 Selling expenses Profitability 10% to 15% Higher 25% to 45% Lower 55% Retailers 45% Bank channels 39

40 Change in SME mix allows average ticket increase above inflation Breakdown of SME members 83% 2% 15% 78% 9% 13% 3Q16 3Q17 40

41 Pricing power minimizes higher Individual cost of services 9M Corporate SME Individual Plans Cost of services/member/month Average Ticket (R$/member/month) 41

42 Cash Flow since the IPO (R$ million) +2, Capital reduction and share buybacks Cash dividends 205-1, Net Cash DEC06 + Cash - Generation Acquisitions & Capex Shareholder Remuneration Stock Options Net Cash SEP17 42

43 Quarterly cash dividends to investors R$ million Payout Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 80% 80% 80% 80% 80% 216%¹ 100% ¹Excludes Bradesco Dental and OdontoPrev INSS reversals Interest on Capital Dividends Practice of 80% payout until 1Q17 and 100% from 3Q17 43

44 Rodrigo Bacellar Odonto System Acquisition 5 44

45 OdontoPrev: Market leader since1998 6,276 Number of members September (Thousand members) 27% of Market share of beneficiaries 472 1,968 1,641 1, ( ) ( ) 45

46 Acquisition Dental only company, low-cost model 622 Thousand beneficiaries (65% corporate, 35% non-corporate) #3 player in the Northeast region, after Hapvida and OdontoPrev 9x EBITDA & 2019 earn-out 46

47 Acquisition Key Metrics (12 month period ended in June ) Revenues: R$97.5 million Average Ticket: ~R$13.00 DLR: ~35% Adjusted EBITDA: R$17.7 million Adjusted EBITDA margin: 18.1% 47

48 Rodrigo Bacellar Final considerations 6 48

49 Great portion of the middle class without a plan Brazil s population: 200 million people 100 million people in the middle class 100 million people out of the middle class 23 million people with a dental plan 77 million people without a dental plan 49

50 Dental and medical plans penetration in the USA x Brazil Today Future Medical 80% 25% 50% - 60% Dental 60% 11% 30% - 40% 50

51 Penetration in different employment relationship highlights market with exploitation opportunity Market size Dental plans penetration Corporate 21 million +50% SME 28 million < 5% 51

52 Dental plans growth in the last years demonstrates potential for the next ones Last 30 years: +3 million of members +20 million of members 15 years 15 years 52

53 New e-commerce in 2018 Dentist loyalty program Until : points program of dental materials, sent to the accredited network, at no charge From 2018: program maintenance and beginning of direct sales operations 100% online 53

54 & Unique partnership with one of the world s biggest oncology center The dentist can send photos of oral lesion through the Rede UNNA app to A.C.Camargo In Brazil, according to the National Institute of Cancer (INCA), the mouth cancer is the 5th of biggest incidence (~ 16 thousand deaths per year) 80% of diagnosed cases in Brazil are already in advanced stage 54

55 Thank you! 55