New growth cycle and value innovation. May, 2013

Transcription

1 New growth cycle and value innovation May, 2013

2 Disclaimer The information contained herein has been prepared by Odontoprev S.A. ( OdontoPrev or the Company ) and this material does not constitute offering material in whole or part. This material has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment advice. It is not targeted to the specific investment objectives financial situationor particular needs of any recipient. No representation or warranty either express or implied is made as to the accuracy completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. Any opinions expressed in this material are subject to change without notice and OdontoPrev is not under obligation to update or keep current the information contained herein. The Company their respective affiliates. agents. directors. partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. This material is intended solely for the use of persons who are market counterparties of intermediate customers (as detailed in the FSA Rules) and is only available to such persons. The information contained herein does no apply to and should not be relied upon by private customers. You should consult your own legal regulatory tax business. Investment. financial and accounting advisers to the extent that you deem necessary and you must make your own investment hedging or trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this material. The information contained in this presentation concerning market estimates. The Brazilian dental and healthcare industry and our participation in it as well as our position in relation to our competitors was obtaine d from established public sources including the ANS the Ministry of Health (Ministério da Saúde) and other market sources. We consider these sources to be reliable but we have not independently verified the competitive position market share production and market size market growth data and other market estimates and therefore cannot provide any assurances regarding the accuracy and completeness of the information contained therein.

3 Dental Benefits: an incipient benefit to the brazilian middle class

4 Brazil leads the global ranking of dentists Number of dentists per country (thousand) 249 ¹ Source: FDI World Dental Federation The Oral Health Atlas 2009 ¹ Federal Council of Dentistry Brazil

5 The Brazilian Dental Paradox 12% of the dentists in the world are located in Brazil Number of dentists & market penetration (%) in ,000 dentists 60% 160,000 dentists 9% Dental Plan Members in relation to Population Source: OdontoPrev but only 9% of brazilians have a dental plan

6 Dental Lives increased 10% in 2012 Dental Plans represents a small portion of the Medical Plan market MEDICAL PLAN SECTOR (million members) ) DENTAL PLAN SECTOR (million members) Mature market US$80 average ticket Public safety net Source: ANS Incipient market US$8 average ticket No public safety net

7 OdontoPrev: Strategic focus on the dental value chain

8 26 years dedicated to sustainable value creation 4.2 Million Members 6 Million Members SME s and Individual Plans at Bradesco branches Foundation Million Members 0.5 Million Members Million Members IPO Million Members Million Members 2008 Association 2009 MAR13

9 Large corporations: most of current portfolio

10 The Bradesco association opens up a new addressable market New distribution channels to allow the middle class to join a dental plan MEDICAL PLANS 48 million members DENTAL PLANS 19 million members Traditional organic growth SME S and individual (middle class) branches and new distribution channels represented by SME s and Individuals.

11 Over 100 million people today at the Middle Class Brazil middle class participants as % of total population Expectation % 56% 58% 90 million people 107 million people 118 million people Source: FGV. Valor Econômico and IBGE

12 Bradesco: #1 insurance cross-seller in Brazil Shareholder with 43% of OdontoPrev s capital More than 65 million clients Over 8,000 branches 25% of premiums of the Brazilian insurance sector Source: Bradesco: Market Relations 1Q13

13 Corporate Governance and professional management team AGM Human Resources Committee Board of Directors CEO Randal Zanetti Fiscal Council Audit Committee Market Development Investor Relations Bradesco Expansion Administrative and Finance Operations Human Resources Renato Velloso José Roberto Pacheco Carlos Rogoginsky Luis André Blanco José Maria Benozatti Rose Gabay

14 Undisputed Leadership & Natural Consolidator Top players in the Brazilian Dental Sector (MAR members) 6,008 1,812¹ 1, ¹ ¹ 613¹ 524¹ 440¹ Source: OdontoPrev and ANS ¹ DEC12.

15 Positive cash flow generation every day Generating funds before reimbursement of the dentist network OdontoPrev Pre-paid Business Model Clients Monthly fee per user Dental care reimbursement (R$) Accredited dentist network reveal no working capital needs.

16 Cost per client Cost per client Attractive casualty profile Over time. OdontoPrev Dental Plans represent a predictable Medical Plans OdontoPrev Plans Price Cost Price Cost Time Cost increase by medical inflation and better technology Short-term contract: 1 year tenor Stable costs due to prevention Long-term contract: 2 year + Time and more attractive cost profile than Medical Plans..

17 World class proprietary IT platform allows electronic auditing, maximum quality and cost control.

18 Growth through multiple drivers Proven track record Inertial Bradesco Health Care Branches (Individuals) M&A not a priority at this time Organic Branches (SME s) Others New distribution channels New projects

19 Financial & Operational Performance

20 New organic growth cycle Million members 100% Organic Growth 6.0 M&A IPO Q13

21 303% membership growth after the 2006 IPO OdontoPrev: number of members (thousand) 1, , ,283 Selective Acquisitions 1,492 IPO Organic Growth Q13

22 OdontoPrev s membership grew 25 % p.y. since IPO OdontoPrev (thousand members) + 6% 4,978 5,533 5,976 5,665 6,008 4,175 1,492 2,113 2,460 IPO Q12 1Q13

23 Fast Growing Net Revenues NOR (R$ million) % 255 IPO Q12 1Q13

24 Average ticket below inflation Average ticket (R$ per member / per month) +4.2% +1.7% Q12 2Q12 3Q12 4Q12 1Q13

25 SME s: from 7% to 10% of total members % 398 thousand lives 5% 273 thousand lives 10% 569 thousand lives 5% 328 thousand lives 88% mil vidas 88% 4,862 thousand lives 85% 85% mil vidas 5,079 thousand lives Corporate SME s Individuals

26 Best in class cost structure Cost of services (R$ million) and dental care ratio (% of NOR) 47.7% 48.2% 49.2% 46.7% % 44.3% 44.0% % 43.7% IPO Q12 1Q13

27 SG&A gains being gradually delivered (R$ million and % of NOR) % 33.8% 31.8% 33.2% % 24.5% 24.0% 23.2% Série1 22.5% IPO Q12 1Q13

28 Synergies in administrative expenses Administrative expenses (% NOR) Personnel 7.8% 8.0% 7.9% 7.7% 5,0% 7.4% 4,0% Rentals and occupancy 3,0% 2.7% 3.0% 3.0% 3.1% 2.8% 2,0% Third parties services 1,0% 1.3% 1.5% 1.5% 1.3% 1.1% 1Q12 2Q12 3Q12 4Q12 1Q13

29 Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA (R$ million) e Adjusted EBITDA Margin (%) 31% 28% 25% 23% 24% 21% 22% 25% % % IPO Q12 1Q13

30 Net Income (R$ million) % ¹ 2007¹ 2008¹ 2009¹ 2010¹ Q12 1Q13 ¹BRGAAP

31 Low Capex requirements Contributes to high free cash flow margin Adjusted EBITDA & CAPEX (R$ million) IPO Q12 1Q13 Adjusted EBITDA CAPEX

32 Cash-flow since the 2006 IPO (R$ million) 22% of NOR Share buyback Capital reductions Cash Dividends IPO Net Cash DEC = + Cash Acquisitons Capex + Shareholder generation¹ remuneration Stock options² Net Cash MAR13³ 1 Includes deferred selling expenses. 2 Share repurchase to cover the Stock Options Plan, net of strike price. 3 Includes R$69.7 million of technical provisions and R$78.9 million of social security (INSS) for individual dentists, net of escrow deposits.

33 Key metrics R$ million 1Q13 1Q12 Δ% 4Q12 Δ% Number of members (thousand) 6,008 5, , Net revenues Average ticket (R$/member) Dental care ratio (%) p.p p.p. Adjusted EBITDA Adjusted EBITDA margin (%) p.p p.p. Net income

34 Capital Markets

35 World class shareholder structure: investors from 32 countries Co-controllers 51%, with shareholders agreement Management 0.6% Treasury 0.4% Others 5.0% ZNT ¹ 8% Free Float 17.1% 12.6% 7.1% 2.2% 43% 48% 1.7% 22.8% 1.3% 5% 27.5% 0.9% ¹ 100% of Mr. Randal Zanetti, CEO 0.9% Total capital 48% Free float 531,294,792 shares 254,931,049 shares 0.8%

36 Our #1 minority shareholder since 1Q13 AUM: US$314.3 billion 31 offices in 23 countries Owns 26,708,600 OdontoPrev shares (5.03% of total capital) Source: Aberdeen Asset Managers Limited

37 OdontoPrev ADR Level I Program is now open Depositary bank: Deutsche Bank Trust Company Americas Ticker Symbol: ODPVY CUSIP: 67612A106 ISIN: US67612A1060 Ratio: 2 Ordinary Shares : 1 ADR Exchange: OTC ADR broker helpline: (NY) (London) adr@db.com ADR website:

38 Superior Corporate Governance Standards Novo mercado 1 share = 1 vote 8 Board Members, without Stock Options 2 Independent Board Members 100% Tag-along rights CEO Chairman of the Board Fiscal Council, Audit and HR Committee

39 Strategic focus on the dental value chain 50 DENTAL CLINICS SERVICES MINAS GERAIS PREMIUM BRAND DISTRIBUTION OF DENTAL MATERIALS DENTAL SOFTWARE MEXICO JOINT VENTURE NORTHEAST DENTAL IMAGING DIAGNOSTICS ONLINE SCHEDULING

40 OdontoPrev Share Price % in Share price performance (12/29/2011=100) 140 As per April 26th % 100-4% 90 Dec11 dez-11 jan-12 fev-12 Mar12 mar-12 abr-12 mai-12 Jun12 jun-12 jul-12 ago-12 set-12 Sep12 out-12 nov-12 dez-12 Dec12 jan-13 fev-13 Mar13 mar-13 Source: BM&FBovespa IBovespa

41 All-time high liquidity of the shares in 1Q13 4,828 3, ,244 2,743 2, Q12 2Q12 3Q12 4Q12 1Q13 Average number of trades/day ADTV (R$ million/day) Source: BM&FBOVESPA

42 Awarded 3 consecutive years... Best Healthcare Company in Latin America 2010 / 2011/ Thank you!

43 Feedback from the Street Well-run company, experienced and focused management team, complying with high Corporate Governance standards. Leadership position in a defensive market with favorable growth prospects. Strong balance sheet and cash generative business. The merger with Bradesco combines the best of the best: OdontoPrev s quality management team and state of the art IT platform with Bradesco s distribution capability and large presence. The combination of product innovation + distribution power + implementation skills seems to be unique. We continue to view OdontoPrev as the best business model in the healthcare segment, combining a high return and cash-flow-generation profile. Strong fundamentals stand out on current environment. We believe that high multiples are supported by: 1) strong FCF generation; 2) balance sheet with no debt; 3) dividend yield and 4) high earnings visibility.

44 Upcoming IR events Date Event May 02, Q13 Webcast May 02, 2013 Credit Suisse Presentation - São Paulo May 03, 2013 NDR Credit Suisse - Rio de Janeiro May 07-10, 2013 NDR Santander - London and Edinburgh May 13-14, 2013 UBS Latin America Consumer Conference - New York May 15-16, th Itau BBA LatAm CEO Conference - New York May 23, 2013 NDR HSBC - Porto Alegre May 28-29, 2013 NDR Bradesco - Santiago Jun 03, 2013 Jefferies 2013 Healthcare Conference - New York Jun 04-07, 2013 NDR Deutsche Bank - Mid-Atlantic & West Coast OdontoPrev s Investor Relations activities, including conference calls, webcasts, one-on-one meetings and public presentations are made by the Company s CEO and/or an Executive Director, since the 2006 IPO.

45 Why OdontoPrev? Proven & sustainable business model Largest and best network of dental specialists State-of-the-art IT platform Superior corporate governance standards Solid capital structure Focused management team Multiple growth drivers Sound shareholder return

46 Contact Investor Relations José Roberto Pacheco Executive Director & IRO Phone: + 55 (11) ir@odontoprev.com.br Corporate Headquarters Alameda Tocantins 125, 34 th floor Barueri, São Paulo, Brazil Custodian & Market Maker Independent Auditors BM&FBovespa Ticker ADR Ticker