2016 and 4Q16 Results FLRY3. March 2017

Transcription

1 2016 and Results FLRY3 March 2017

2 Disclosure 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 offered, and other risks described in the Company s registration statement. Forwardlooking statements speak only as of the date they are made and Grupo Fleury does not undertake any obligation to update them in light of new information or future developments. All figures are compared to 2015 and, except when stated otherwise.

3 Financial highlights Gross revenue R$ 2.3 billion Net revenue R$ 2.1 billion EBITDA R$ 483 million 18.4% Net income R$ 229 million 189.6% Operating Cash Flow R$ % 2016 million 9.4% 9.7% 2016 and 10.7% 2016 and 10.1% - excl. CADE 1 PSCs* 10.6% 2016 and 11.7% 2016 and 11.1% - excl. CADE 1 PSCs* 26.5% % 2016 Gross revenue grows 10.7% 1 in the year. Highlights: regional brands excl. Rio de Janeiro (+15.2%) and Fleury brand (+9.6%). Patient Service Centers (PSC) same store sales increases 11.0% in the. Cancellations index fell to 2.7% in the year of decrease of 72 bps. EBITDA margin of 23.0% in 2016 an improvement of 289 bps. A 82.0% growth in net income in 2016 (189.6% in ). Operating cash flow of R$ MM, with Operating Cash Flow conversion /EBITDA conversion of 106.4% Evolution of return and service indicators: ROIC without goodwill reaches 32.9% vs. 22.9% in In, Grupo Fleury s NPS reached 72.3% - a 768 bps expansion. 1 Excluding PSCs CADE RJ: the effect of the sale of 5 PSCs in Rio de Janeiro (material fact 11/05/2015) in compliance with the agreement signed with CADE in Adjusted by non-recurring item occurred in 1Q15. 3

4 Highlights BP Hospital: In February, 2017, we started the B2B operation in the BP medical group, the former Beneficência Portuguesa Group, in São Paulo. The Fleury Group has been responsible for the clinical analyzes of the three hospitals (Hospital BP, BP Philanthropic and BP Mirante). The BP medical group has 1,084 beds and is a reference in cases of high complexity treatment in a wide range of specialties such as Cardiology, Neurology, Oncology and Orthopedics, among others. Mãe de Deus Hospital: In December, we started the B2B clinical analysis operation in the Mãe de Deus Hospital, one of the most traditional health complexes in Porto Alegre. With more than 370 beds, the hospital has become, during its more than 30 years history, a reference in highly complex medical services in the South of the Country. ISE: For the fourth consecutive year, the Fleury Group was selected to integrate the Corporate Sustainability Index (ISE) portfolio, which acts as an inducer of good practices in the Brazilian business environment and is a reference for socially responsible investment. Awards: Fleury Group was elected one of the most sustainable companies in Brazil for the 6th consecutive year in Guia Exame de Sustentabilidade, the largest survey of corporate sustainability in the country Fleury Group was elected one of the most welcoming companies in Brazil for the eighth consecutive year by the corporate hospitality survey, conducted by the Brazilian Institute of Corporate Hospitality (IBHE). The Fleury Group ranks 5th in the IBRC / Exame ranking. The Company debuted this year in the study conducted by Exame magazine in partnership with the Ibero-Brazilian Institute of Customer Relations that evaluates the relationship between companies 4and consumers.

5 Expansion plan 2017 to 2021 In December, the Fleury Group announced its expansion plan for the next five years. Between 2017 and 2021, the Company estimates that between 73 and 90 new service units will be open. Since October, 2016, until February 2017, the Company has inaugurated seven new units, two of them as Fleury brand in São Paulo and five of them under the a + brand in Paraná. PSC* Complexity Size (m 2 ) State Date a+ Ecoville Small 47 Curitiba February a+ Champagnat Small 81 Curitiba February a+ Centro Small 29 Curitiba February Fleury Brasil Fast site 235 São Paulo January Fleury Moema Fast site 126 São Paulo December a+ Batel Small 134 Curitiba December a+ Nossa Saúde Small 79 Curitiba October Fleury Moema a+ Batel 5

6 Gross revenue: Gross revenue breakdown Business line performance ( vs ) 16.1% 15.9% Grupo Fleury 9.7% 0.4% 10.1% 16.9% 16.6% 16.5% 17.4% PSCs 10.0% 0.5% 10.5% Fleury brand 9.1% 50.5% 50.2% Regional brands excl. RJ 15.5% Regional brands RJ 7.3% 2.6% 9.9% B2B Regional brands RJ Regional brands excl. RJ Fleury brand Operations in Hospitals 7.9% Effect of the sale of PSCs CADE RJ 6

7 Gross revenue: 2016 Gross revenue breakdown Business line performance (2016 vs 2015) 16.1% 16.3% Grupo Fleury 9.7% 1.1% 10.7% 17.2% 16.3% 16.2% 17.2% PSCs 9.4% 1.3% 10.7% Fleury brand 9.6% 50.4% 50.4% Regional brands excl. RJ 15.2% Regional brands RJ 3.3% 6.1% 9.4% B2B Regional brands RJ Regional brands excl. RJ Fleury brand Operations in Hospitals 10.5% Effect of the sale of PSCs CADE RJ 7

8 Patient Service Centers (PSC) Revenue indicators Gross revenue PSCs 1 (R$ MM) and average price +2.1% % 14.5% Gross revenue growth YoY 12.7% 11.5% 9.0% 8.1% 10.1% 8.3% 10.0% 11.0% 1Q16 2Q16 3Q16 1Q16 2Q16 3Q16 Average price PSCs gross revenue PSCs Same Store Sales PSCs gross revenue per m² (R$ thousand) Gross revenue per PSCs (R$ MM) % % Q16 2Q16 1 PSCs Patient Service Center 3Q16 1Q16 2Q16 3Q16 8

9 Results by business Patient Service Centers Indicators PSCs * Fleury Brand Regional Brands excl. RJ vs Brands RJ T o t Total (PSCs) - Gross Revenue 9.1% 15.5% 7.3% 10.0% - Gross Revenue (excluding effect of the sale of PSCs CADE RJ) 9.1% 15.5% 7.7% 9.6% - SSS 8.9% 14.6% 13.9% 11.0% - Gross Revenue / Number of Tests 4.6% 5.3% -0.3% 2.1% - Gross Revenue / m 2 6.7% 18.9% 13.6% 11.7% - Gross Revenue / PSC 4.7% 15.5% 17.5% 12.3% Fleury Brand: In, the Fleury brand reported an expansion of 8.9% in SSS. Initiatives to increase the occupancy of imaging equipment, as well as the constant improvement of service levels, with impact in clinical analyzes and imaging, drove this growth. Regional brands excluding RJ: expansion of 14.6% in SSS in the. This growth is explained by the supply rising levels of imaging analysis, ultrasound and resonance imaging in São Paulo, Pernambuco and Bahia, with an ensuing increase in equipment occupancy. Rio de Janeiro brands: an increase of 13.9% in SSS in the. Volume and average price of rio de janeiro brands have been impacted by the increase in the clinical analysis participation, and the volume increase of these type of exams reduces the average price. 9

10 Result by business B2B Diagnostic Operations in Hospitals Reference Lab (Lab-to-Lab) and PM¹ Gross revenue grows 7.9% in the quarter and reaches R$ 82.4 million. In 2016, an increase of 10.5%, reaching R$ million In the Same Hospital Sales (SHS), the growth was 8.8% in the. Gross revenue reaches R$ 6.9 million in and R$ 29.2 million in the year of Preventive Medicine revenue amounted to R$ 1.4 million in the and R$ 5.7 million in In February, 2017, we started the B2B operation in the BP medical group (Hospital BP, BP Philanthropic and BP Mirante). In December, 2016, we started the B2B clinical analysis operation in the Mãe de Deus Hospital, a reference in highly complex medical services in the South of the Country. 1 PM Preventive Medicine 10

11 Sales taxes, deductions, allowances and net revenue Revenue qualification Deductions (cancellations and provision for doubtful accounts) + Allowances represented 2.4% of gross revenue in the quarter. In 2016, reached 2.7% compared to 3.4% from 2015, a decrease of 72 bps. Sales taxes over gross revenue stable (6.2%). Net Revenue Cancellations and deductions/gross revenue (%) And Cancellations and deductions (R$ MM) Net revenue (R$ MM) 3.1% (-16.4) -73 bps 2.4% (-13.8) -72 bps 3.4% (-71.7) %2.7 (-62.1) % % 1, % 2,096 2, % 471 1,

12 Cost of Services Indicators Cost of Services Growth (YoY) Number of employees (thousand) 10.6% 10.2% -132 bps 9.3% % % 4.0% 1Q16 2Q16 3Q16 1Q16 2Q16 3Q16 M² - PSCs (thousand) Number of PSCs -1.5% -2.1% Q16 2Q16 3Q16 1Q16 2Q16 3Q16 12

13 323,248,436 69,314, ,339,000 33,368,000 Cost of Services Breakdown Evolution of costs (R$ MM) Personnel and Medical Services (R$ MM) +9.3% +9.2% Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 Gen. Services, Rentals and Util. (R$ MM) General Expenses (R$ MM) +8.2% -1.4% Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1Q16 2Q16 3Q16 13

14 Cost of services Variation R$ MM % Net Revenue R$ MM % Net Revenue HA VA Personnel and medical services % % 9.2% -50 bps General services, rentals and utilities % % 8.2% -34 bps Materials and outsourcing % % 10.6% 0 bps General expenses % % -1.4% -80 bps Depreciation and Amortization % % 27.0% 71 bps Cost of Services % % 9.3% -93 bps Variation R$ MM % Net Revenue R$ MM % Net Revenue HA VA Personnel and medical services % % 5.8% -162 bps General services, rentals and utilities % % 5.7% -68 bps Materials and outsourcing % % 11.4% 7 bps General expenses % % 3.3% -44 bps Depreciation and Amortization % % 22.6% 52 bps Cost of Services 1, % 1, % 7.4% -214 bps 14

15 Cost of services Reduction of 50 bps (% Net Revenue) in Personnel and Medical Services: Despite the increase of operations volume and salary readjustment, there was efficiency gain with a reduction of 1.6% in the number of employees in the 12-month period. Reduction of 34 bps (% Net Revenue) in General Services, Rentals and Utilities: The efficiency gain can be explained by the reduction in the value of PSCs rents, contract renegotiation with cleaning suppliers and transport of materials used in the operations. Stability (% Net Revenue) in Materials and Outsourcing: accounted for 10.6% of net revenue. Reduction of 80 bps (% Net Revenue) in General expenses mainly impacted by the redesign of customer service processes in the Call Center Central and reduction in print contracts values. 15

16 Operational expenses Excluding non-recurring Reported Variation R$ MM % Net Revenue R$ MM % Net Revenue AH AV % Net Revenue % Net Revenue G&A (Excl. Depreciation and Amortization) % % 18.4% 76 bps 10.0% 10.1% 10.0% 10.1% Depreciation and Amortization % % 9.7% -1 bps 1.6% 1.6% 1.6% 1.6% Other Operating Income (Expenses), net (1.2) -0.2% % % -40 bps 0.7% 0.7% 0.7% 2.0% Provision for Contingency % % 15.9% 1 bps 0.3% 0.4% 0.3% 0.4% Subsidiaries' share of profits (0.1) 0.0% % % -2 bps -0.1% 0.0% -0.1% 0.0% Operating Expenses % % 13.6% 34 bps 12.5% 12.8% 12.5% 14.1% Increase of 76 bps in General and Administrative Expenses (excluding depreciation and amortization): The growth of this line can be explained, mainly, by consulting expenses related to the costs and expenses reducing project (Procurement Project), and marketing. Decrease of 40 bps in Other Income/(Expenses): totaled R$ 1.2 million and accounted for -0.2% of the net revenue. Provision for contingencies totaled R$ 728 thousand (R$ 628 thousand in ). 16

17 EBITDA EBITDA margin improvement is a direct result of net revenue growth and efficiency gain in costs and expenses. EBITDA (R$ MM) and margin (%) vs. 18.4% % 19.3% EBITDA Δ Revenue Δ Costs and Expenses EBITDA EBITDA (R$ MM) and margin (%) 2016 vs % % % % EBITDA 2015 Non recurring 1Q15 Adjusted EBITDA Δ Revenue Δ Costs and expenses EBITDA

18 Debt R$ MM 3Q16 Next 12 months Gross Debt (Debentures and Financing ) Cash & Cash Equivalents (629.5) (835.2) (406.8) Net Debt (Gross debt - Cash and Cash Equivalents) Net Debt / EBITDA LTM EBITDA LTM / Financial Result LTM % of CDI Debentures 1 st issuance in dec/11 1st Series: R$ 150MM (CDI+0.94%) Amortization: 4Q14, e 2nd Series: R$ 300MM (CDI+1.2%) Amortization:, 4Q17, 4Q18 2 nd issuance in feb/13 R$ 500MM (CDI + 0,85%) Amortization: 1Q18, 1Q19, 1Q20 Average weighted cost of debt Finep R$ 155MM contract signed in August 2014 R$ MM released in October 2014 Deadline for settlement: 97 months, annual interest rate of 4% 18

19 Financial result Excl. non-recurring Reported R$ million Net financial income (expenses) (6.6) (13.4) (44.5) (60.0) (44.5) (63.2) Financial income Interest and inflation adjustment Exchange rate change and hedge Interest received Other (1.3) (1.2) (5.2) (2.5) (5.2) (2.5) Financial expenses (35.6) (38.4) (152.8) (145.3) (152.8) (148.5) Interest and inflation adjustment (33.4) (37.3) (142.6) (140.5) (142.6) (143.7) Exchange rate change and hedge (0.4) (0.0) (1.6) (0.4) (1.6) (0.4) Other (1.8) (1.0) (8.6) (4.3) (8.6) (4.3) Financial results reached R$ (6.6) MM in the quarter, improvement of 50.7% on, impacted by the growth of average cash position and the decrease of indebtedness. 19

20 Income tax and social contribution (R$ MM) Earnings Before Taxes (EBT) Expected taxes (standard rate of 34%) (19.2) (13.9) (99.9) (58.6) Non-deductible expenses and taxes breaks (0.6) (1.1) (3.9) (9.7) Interest on own capital benefit Subsidiaries share of profits 0.4 (0.1) 0.7 (0.1) Income tax and social contribution % EBT 32.3% -36.8% -22.3% -37.8% Current 18.5 (3.2) (16.3) (15.9) Deferred (0.2) (11.8) (49.3) (49.3) The income tax and social contribution rate was 32.3% in the quarter vs % in the. The effective rate of was impacted by interest on shareholder s equity distributed in December,

21 Net income Improvement in the operating results and income tax rate resulted in an increase of 189.6% in the net income (). Net income (R$ MM) and margin (%) Quarter YTD Ex. Nonrecurring* Reported +82.0% % % % 14.3% % 10.9% % 10.9% * Adjusted excluding 1Q15 non-recurring item related to Health s Solid Waste Tax (TRSS). 21

22 Receivables Account Receivable (R$ MM) 3Q16 Trade receivables Sales Deductions Provisions (45) (41) (42) Total Aging Acc. Receivable (R$ MM) 3Q16 Current Up to 120 days past due to 360 days past due Over 361 days past due % Provision Coverage Index (BDP/ receivables due for more than 121 days) 65.4% 69.7% 69.7% 69.3% 66.5% 66.4% 66.1% 71.4% 4Q14 1Q15 2Q15 2Q15 1Q16 2Q16 3Q16 Receivables due over 121 days / Total Receivables Improvement in the aging profile: current receivables correspond to 78.6% vs. 73.1% in the. 18.1% 17.7% 17.4% 17.4% 14.7% 13.6% 15.9% 13.3% 13.1% Average collection period: 65 days vs. 71 in the. 4Q14 1Q15 2Q15 2Q15 1Q16 2Q16 3Q16 22

23 Cash flow R$ MM Net Income Deferred Income Tax Cash Net Income Depreciation and amortization Working Capital and Provisions Others (24.8) Operating Cash Flow Acquisition of fixed and intangible assets (90.0) (41.3) (184.0) (111.7) Other Investments Acquisitions (0.5) (4.0) (5.7) (9.3) Financing Activities (159.4) (82.0) (264.6) (177.7) Dividends and/or interest on own capital (331.3) 0.0 (384.4) (16.2) Cash Flow (329.4) 3.9 (201.1) Conversion (Operating Cash Flow / EBITDA) 124% 134% 106% 103% 23

24 Capex The investments are concentrated in (i) expansion and improvements in PSCs, (ii) strategic projects and (iii) equipment renewal. = R$ 90.0 M 2016 = R$ M Renewal of equipments 16.8% (15.1M) Infrastructure 5.9% (5.3M) IT 4.2% (3.8M) Strategic Projects 20.4% (18.3M) Renewal of equipments 13.5% (24.8M) Infrastructure 7.6% (14.0M) IT 6.2% (11.4M) Strategic Projects 30.4% (55.9M) Expansion and improvements in PSCs and Central Laboratories 52.7% (47.4M) Expansion and improvements in PSCs and Central Laboratories 42.3% (77.9M) 24

25 Capex Expansion and improvement in PSCs (R$ milion) New PSCs New equipment (Current PSCs) Improvements (Weinmann Branding) Others Total Equipment Renewal (R$ million) MRI Ultrasounds Fetal Medicine Others Total 25

26 Market Perfomance (December 29 h 2016) Shares performance x Ibovespa (IPO = 100 base) FLRY3 IBOV - 7.0% in % in 2016 Average Daily Trading Volume (ADTV) R$ MM and Negotiability Index (NI) 0.37% Shares and market cap 0.22% 0.30% Total shares 157,115,125 Market Cap R$ 5.6 bn 0.04% 0.05% % % % Closing price R$ Q15 2Q15 3Q15 1Q16 2Q16 3Q16 NI ADTV 26

27 Agenda Grupo Fleury s management will attend the following events in the next months: Date Event Place March 13 th Breakfast with investors Itau BBA São Paulo Brazil March 15 th Healthcare Day - Santander São Paulo Brasil March 29 th and 30 th April 02 nd X Annual Bank of America Merril Lynch Brazil Conference NDR with CEO BTG Pactual São Paulo Brasil Abu Dhabi United Arab Emirates April 03 rd Bradesco s 4 th Brazil Investment Forum São Paulo Brazil April 04 th and 05 th BTG Pactual VII Latin Opportunities Conference London UK April 05 th and 07 th NDR - BTG Pactual London Stockholm Paris April 12 th 2017 Annual Shareholders Meeting São Paulo Brazil May 15 th and 16 th NDR with CEO Credit Suisse Toronto and Montreal Canada May 17 th and 18 th 12 th Annual Itaú BBA LatAm CEO Conference New York USA May 19 th NDR with CEO Itau BBA New York USA For further information, please access: 27

28 2016 and Results FLRY3 March 2017