4Q17 and 2017 Earnings Release Resultados 4T12

Transcription

1 ex-inss: Revenues up 5.6%, with net adds of 34 thousand lives in the corporate segment. Dental care ratio down to 44.1%. Adjusted Ebitda up 30.9%, with margin expansion of 4.9 p.p. to 25.3%. Net cash of R$508 million. Sao Paulo, February 28 th, OdontoPrev (B3; Bloomberg: ODPV3 BZ; Reuters: ODPV3.SA), the largest dental benefits company in Latin America, announced today its consolidated results for the fourth quarter of 2017 () and The Company s financial and operational data are presented based on consolidated numbers and in thousands of reais, pursuant to the Brazilian Corporate Law, the accounting rules of the National Health Agency (ANS) and the accounting principles of the International Financial Reporting Standards (IFRS). All information comparisons refer to variations between, 4Q16, 2017 and 2016, except otherwise stated Key Metrics Net Revenue Average Ticket Dental Care Ratio¹ Adjusted EBITDA¹ EBITDA Margin¹ R$ 1,437,283 R$ % R$351, % Net Cash Net Income¹ Cash Dividends ROE¹ Total Capital R$508,141 R$244,571 R$246, % 531,294,792 shares ¹Excludes Bradesco Dental and OdontoPrev INSS effects Growth Net revenue increased 5.6% in and 5.3% in We highlight the performance of SME, which revenues increased 17.6% in the quarter and 17.1% in Consolidated average ticket of R$20.30, 4.6% higher over 4Q16. Number of beneficiaries surpassed 6.3 million, with net additions of 33 thousand lives in the quarter, of which 34 thousand new lives in the corporate segment. INSS OdontoPrev In addition to the OdontoPrev INSS reversal (2Q17 and 3Q17), related to , and Bradesco Dental INSS reversal (2Q17), related to the period prior to 2010, the Company accounted in tax credits related to INSS payments made during the five years prior to 2010, in the amount of R$87.2 million, resulting in a positive impact of R$39 million in EBITDA (lower cost of services of R$42 million and higher administrative expenses of R$3 million), and an increase of R$52 million in net income (EBITDA effects, higher financial result of R$41 million and R$27 million in taxes). Efficiency and value creation In excluding the INSS effects, the cost of services came down 6.3%, resulting in a dental care ratio of 44.1%, lower than 4Q16 dental care ratio of 49.7%. Bad debt was 4.2% of revenues, versus 5.0% in 4Q16. The adjusted EBITDA reached R$94 milion, 30.9% higher in relation to 4Q16, with adjusted EBITDA margin expansion of 4.9 p.p. to 25.3% in the quarter. In 2017, adjusted EBITDA increased by 17.3%, reaching R$352 million, with a margin of 24.5%, above the 22.0% of Results and Shareholder remuneration The net income was R$64 million, an increase of 8.3% compared to 4Q16, and R$245 million in On December 31, 2017, OdontoPrev registered a net cash position of R$508 million, without any leverage. (R$000, except otherwise specified) Ex INSS¹ 4Q16 Δ% Ex INSS² Key Metrics 2016 Δ% Net operating revenue (NOR) 371, , , ,437,283 1,437,283 1,365, Average ticket (R$/member/month) Number of members 6,309,296 6,309,296 6,266, ,309,296 6,309,296 6,266, Cost of services 121, , , , , , Dental care ratio (%) p.p p.p. SG&A ratio (%) p.p p.p. Allowance for doubtful receivables (%) p.p p.p. Adjusted EBITDA 132,600 93,881 71, , , , Adjusted EBITDA margin (%) p.p p.p. Net income 116,279 63,975 59, , , , Net Cash 508, , , , , , ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS 1 / 42

2 Index Page Income Statement 3 Key metrics per segment 4 OdontoPrev commercial and financial performance 5 to 23 Operating revenue 5 & 6 Average ticket 7 Membership 8 & 9 Figures by business segment 10 to 12 Net Revenues, average ticket and membership - Corporate Segment 10 Net Revenues, average ticket and membership - Individual Plans Segment 11 Net Revenues, average ticket and membership - SME Segment 12 INSS 13 Brasildental 14 Costs of Services (Dental care ratio) 15 to 17 Selling expenses 18 Administrative expenses 18 & 19 Allowance for doubtful receivables 20 EBITDA and adjusted EBITDA 21 Financial income 22 Income and social contribution taxes 23 Net income 24 Cash flow 25 & 26 Capex 27 Statement of added value 28 Stock options 28 Shareholder remuneration 29 Capital Markets 30 & Calendar 32 Upcoming IR events 32 Conference calls 33 Attachments 35 to 42 This material was prepared by Odontoprev S.A. ( OdontoPrev or the Company ) and may include forward-looking statements. Such statements are based on assumptions and analyses made by the Company based on its experience and the economic environment and on market conditions and expected future events, many of which are beyond the Company s control. Important factors which can lead to significant differences between real results and these forward-looking statements include the business strategy of the Company, Brazilian and international economic conditions, technology, financial strategies, developments in the sector, conditions of the financial markets, uncertainty regarding the results of the Company s future operations, plans, objectives, expectations, intentions, and other factors. Because of these factors, the real results of the Company may differ significantly from those expressed or implied in forward-looking statements. The information and opinions contained herein should not be interpreted as recommendations for potential investors, and no decision regarding investment should be based on the assumption that this information is accurate, current, or complete. 2 / 42

3 Income Statement OdontoPrev performs a regulated activity, and as such must present interim financial statements based on the Accounting Rules of the ANS, including accounting lines with names differing from those commonly used by companies from other sectors. OdontoPrev s consolidated data on and 4Q16, 2017 and 2016 include Rede Dental; DentalCorp and Care Plus (incorporated in 2008); Sepao; Prontodente and OdontoServ (incorporated in December of 2009); Bradesco Dental (incorporated in 2010), Easy Software; Adcon; Dental Partner; Clidec; Clidec Participações; OdontoPrev Serviços, Papaiz, Brasildental and Odontored (Mexico). R$000 Ex INSS¹ 4Q Ex INSS² (+) Payments net 383, , ,815 1,483,573 1,483,573 1,413,090 (+) Sales of services and products 2,859 2,859 2,236 10,966 10,966 8,877 (+) Odontored 2,077 2,077 2,065 8,355 8,355 4,845 Gross operating revenue 388, , ,116 1,502,895 1,502,895 1,426,812 (-) Direct taxes on dental care operations 13,884 13,884 13,971 56,418 56,418 52,659 (-) Taxes on sales of services and products 2,500 2,500 2,188 9,193 9,193 9,114 Net operating revenue 371, , ,956 1,437,283 1,437,283 1,365,039 (-) Cost of services 167, , , , , ,804 Indemnifiable claims, net 159, , , , , ,964 Odontored ,388 1, Payroll charges on services 2-42,206 10,674 19, ,427 40,513 Dental materials 1,489 1,489 1,853 6,452 6,452 7,930 Other operating revenues (expenses) 2,571 2,571 7,474 8,323 8,323 18,406 Incurred but Not Reported Provision (IBNR) 3,253 3,253-6,624 12,819 12,819 1,262 Odontored - Technical reserves Gross profit 204, , , ,934 1,042, ,235 (-) Selling expenses 38,214 38,214 33, , , ,682 (+) Other operating revenues ,197 2,028 2,028 2,333 (-) General and Administrative Expenses 62,392 65,881 57, , , ,015 G&A (adjusted at EBITDA base) 59,462 62,951 55, , , ,569 Personnel 30,689 30,689 28, , , ,472 Third parties services 5,973 9,462 5,290 24,674 42,131 23,366 Rentals and occupancy 11,559 11,559 11,186 43,846 43,846 43,642 Taxes and fees 1,610 1,610 3,859 11,371 11,371 12,748 Publicity and advertising 5,712 5,712 4,770 13,320 13,320 11,450 Others 3,919 3,919 1,149 6,673 6,673 2,891 G&A (not adjusted at EBITDA base) 2,930 2,930 2,171 8,968 8,968 7,446 Depreciation and amortization 2,145 2,145 2,171 8,183 8,183 7,446 Acquisitions (-) Other operating expenses 21,692 21,692 21,098 81,607 81,607 79,459 Stock options plan 2,593 2,593 2,392 10,413 10,413 9,289 Allowance for doubtful receivables 15,667 15,667 17,524 55,045 55,045 60,814 Profit sharing 3,432 3,432 1,182 16,149 16,149 9,356 (+) Equity in subsidiaries ,442 2,442 1,327 Income before financial income (expenses) and taxes 83, ,110 73, , , ,739 (+) Net financial income 9,369 49,898 6,960 35, ,497 23,728 (+) Financial income 51,474 51,474 15,237 97, ,439 56,000 (-) Financial expenses 42,105 1,576 8,277 61,343 4,942 32,272 Bank fees ,242 3,242 3,182 Monetary restatement of provision of contingencies 40, ,298 56, ,284 Other financial expenses ,368 1, Income before taxes 92, ,008 80, , , ,467 (-) Income and social contribution tax 28,973 55,917 21, , ,567 89,417 (-) Current 30,850 57,794 33, , , ,862 (-) Deferred income and social contribution tax -1,877-1,877-11,784-20,048 98,682-31,445 Net income before participation of minoritary shareholders 63, ,091 58, , , ,050 (+) Participation of minoritary shareholders Net income 63, ,279 59, , , ,990 ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS 3 / 42

4 Key metrics per segment The following tables exclude Bradesco Dental and OdontoPrev INSS effects in the cost of services, dental care ratio and contribution margin in 2Q17, 3Q17 and. Corporate 1Q16 2Q16 3Q16 4Q Q17 2Q17 3Q Average ticket (R$/member/month) (A/B) / # of months Final number of members (000) 4,912 4,787 4,702 4,696 4,696 4,649 4,621 4,670 4,704 4,704 Average number of members (000) (B) 4,957 4,850 4,745 4,699 4,850 4,673 4,635 4,645 4,687 4,700 (+) Payments, net (R$ 000) (A) 241, , , , , , , , , ,535 (-) Direct taxes on dental care operations (R$ 000) 9,114 7,333 6,806 8,056 31,309 8,417 7,976 7,448 7,579 31,420 Net operating revenue - NOR (R$ 000) 232, , , , , , , , , ,115 Cost of services (R$ 000) 119, , , , , , , , , ,364 Dental care ratio (% Sales) Cost of Services / member / month (R$) Selling expenses (R$ 000) 12,879 13,071 13,011 13,117 52,078 13,016 12,294 13,501 13,162 51,973 Selling expenses (% Sales) Contribution Margin (R$ 000) 100,864 90,589 78,336 84, ,656 94,974 93,021 94, , ,778 Contribution Margin (% Sales) Individual Plans 1Q16 2Q16 3Q16 4Q Q17 2Q17 3Q Average ticket (R$/member/month) (A/B) / # of months Final number of members (000) Average number of members (000) (B) (+) Payments, net (R$ 000) (A) 55,715 62,163 67,287 71, ,690 74,782 75,167 71,786 79, ,399 (-) Direct taxes on dental care operations (R$ 000) 2,957 3,293 3,544 3,779 13,573 4,093 4,149 3,662 3,942 15,846 Net operating revenue - NOR (R$ 000) 52,758 58,870 63,743 67, ,117 70,689 71,018 68,124 75, ,553 Cost of services (R$ 000) 11,687 14,596 17,411 17,660 61,354 16,952 19,034 21,666 20,991 78,643 Dental care ratio (% Sales) Cost of Services / member / month (R$) Selling expenses (R$ 000) 12,220 13,060 11,014 14,670 50,964 15,832 17,246 16,730 17,952 67,759 Selling expenses (% Sales) Contribution Margin (R$ 000) 28,851 31,214 35,318 35, ,799 37,906 34,739 29,728 36, ,151 Contribution Margin (% Sales) SME 1Q16 2Q16 3Q16 4Q Q17 2Q17 3Q Average ticket (R$/member/month) (A/B) / # of months Final number of members (000) Average number of members (000) (B) (+) Payments, net (R$ 000) (A) 46,070 47,486 49,421 52, ,165 53,200 55,745 58,483 61, ,639 (-) Direct taxes on dental care operations (R$ 000) 1,999 1,818 1,824 2,136 7,777 2,294 2,281 2,214 2,363 9,152 Net operating revenue - NOR (R$ 000) 44,071 45,668 47,597 50, ,388 50,906 53,464 56,269 58, ,487 Cost of services (R$ 000) 18,256 20,451 23,712 22,844 85,263 21,313 23,096 24,688 23,928 93,024 Dental care ratio (% Sales) Cost of Services / member / month (R$) Selling expenses (R$ 000) 6,081 5,860 6,067 5,516 23,524 5,981 6,377 7,265 7,039 26,661 Selling expenses (% Sales) Contribution Margin (R$ 000) 19,734 19,357 17,818 21,692 78,601 23,612 23,992 24,316 27,881 99,802 Contribution Margin (% Sales) / 42

5 Operating revenue and 2017 Earnings Release Net operating revenue (NOR) Operational and financial performance 4Q Δ% R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales (+) Payments, net 383, , ,483, ,413, (+) Sales of services and products 2, , , , (+) Odontored 2, , , , Gross operating revenue (GOR) 388, , ,502, ,426, (-) Direct taxes on dental care operations 13, , , , (-) Taxes on sales of services and products 2, , , , Net operating revenue (NOR) 371, , ,437, ,365, The net operating revenue (NOR) reached R$371,737 in, 5.6% higher in relation to 4Q16, of which R$12,310 from Brasildental. In 2017, net revenues reached R$1,437,283, a 5.3% expansion YoY, of which R$44,543 from Brasildental. R$ million Net Revenues Δ% 955 1,070 1,156 1,250 1,365 1, % Q16 In, the SME and Individual Plans segments represented 36% of total revenues, versus 34% in 4Q16, with a 14.2% growth. In 2017, they represeneted 35% of total revenues, versus 32% in R$ million 2017 Revenues evolution per segment R$ million 5.6% % +17.6% +1.2% % 14% 66% 64% % 16% 4Q16 4Q16 Corporate SME Individual Plans 5 / 42

6 R$ million 36 Incremental revenue per segment (YoY) Q Q Q Q Q Q Q Individual Plans SME Corporate 2017 Revenues, average ticket and contribution margin per segment 2017 AVERAGE TICKET (R$ / member / month) Contribution Margin 38 Individual Plans Revenues 2017 R$286 M (+18% YoY) 49% 20 SME Revenues 2017 R$219 M (+17% YoY) 46% 17 Corporate Revenues 2017 R$922 M (-1% YoY) 42% ¹ M: million High Low NUMBER OF COMPETITORS 6 / 42

7 (i) Average Ticket and 2017 Earnings Release Average ticket calculation 4Q16 Δ% Δ% Payments, net R$000 (A) 383, , ,483,573 1,413, Average number of members (B) 6,293 6, ,288 6, Average ticket (R$/live/month) (A/B)/nº of months Average ticket calculation (ex-brasildental portfolio) 4Q16 Δ% Δ% Payments, net R$000 ex-brasildental porfolio (A) 372, , ,443,943 1,387, Average number of members ex-brasildental portfolio (B) 5,795 5, ,813 6, Average ticket (R$/live/month) (A/B)/# of months The average ticket came from R$19.41 per member/per month in 4Q16 to R$20.30 in, a growth of 4.6%, due to corporate contracts readjustments and the mix of the period. In 2017, the average ticket reached R$19.66, a 5.8% expansion YoY. Excluding the Brasildental portfolio, and the correspondent net payments, the average ticket would have been R$21.43, 5.6% higher than 4Q16, and R$20.70 in 2017 (9.7% YoY growth). Quarterly average ticket (R$/member/month) Quarterly average ticket ex-bb (R$/member/month) Q16 1Q17 2Q17 3Q17 4Q16 1Q17 2Q17 3Q17 Average Ticket per segment (R$/member/month) +12.4% 9.4% % Q16 4Q16 4Q16 Corporate SME Individual Plans 7 / 42

8 (ii) Membership and 2017 Earnings Release OdontoPrev reached 6,309,296 members in, with net additions of 33 thousand new lives in the quarter. We highlight the performance of corporate segment in. In 2H17, we had net additions of 119 thousand beneficiaries, versus net loss of 15 thousand lives in 2H16. In 2017, there was net additions of 42 thousand new lives, compared to net loss of 142 thousand lives in Thousand members +34 net additions per segment Corporate SME Individual Plans +33 Quarterly and annual net additions 1Q16 2Q16 3Q16 4Q Q17 2Q17 3Q Corporate -91, ,536-85,582-5, ,909-46,880-28,144 48,555 34,067 7,598 SME 5,889 5,682 12,689 28,243 52,503 8, ,741 20,012 59,602 OdontoPrev -2, ,051-6, , ,120-2,592 Bradesco 7,443 4,841 6,922-6,885 12,321-2,547 5,079 11,484-1,150 12,866 BB 1,247 1,299 6,449 38,179 47,174 11,694-1,759 19,351 20,042 49,328 Individual Plans 31,112 45,758 18,225 17, ,341-15,650 5,140 6,429-20,782-24,863 Retailers -6,291 36,939 2,230 8,274 41,152-9,657 5,895 7,039-28,102-24,825 Bradesco 36,734 10,677 18,997 10,167 76,575-4, ,778-11,462 BB 669-1,858-3,002-1,195-5,386-1, ,237 15,098 11,424 Total -54,077-73,096-54,668 39, ,065-54,322-22,363 85,725 33,297 42,337 Thousand lives M net additions H15 2H15 1H16 2H16 1H17 2H17 8 / 42

9 Figures by business segment Net Revenues - Corporate segment The Corporate segment revenues totaled R$234,731 in, a 1.2% growth YoY, best performance in the last six quarters. In 2017, revenues reached R$922,115, lower than R$929,926 in Corporate 4Q16 Δ% Δ% (+) Payments, net 242, , , , (-) Direct taxes on dental care operations 7,579 8, ,420 31, Net operating revenue¹ (NOR) 234, , , , ¹ excluding Sale of Services and Products R$ million Corporate segment revenues evolution Since 2014, the corporate segment revenues grew 5.5% (i) Average Ticket - Corporate segment In the Corporate segment average ticket reached R$17.23, 1.2% higher than 4Q16. In 2017, the average ticket was R$16.91, 2.4% above Average Ticket - Corporate 4Q16 Δ% Δ% Payments, net R$000 (A) 242, , , , Average number of members (B) 4,687 4, ,700 4, Average ticket (R$/member/month) (A/B) / # of months (ii) Membership - Corporate segment The Corporate segment had 34 thousand net additions in the quarter, and 83 thousand lives in the semester, best performance since The portfolio reached 4,704 thousand members, 74% of the total. Thousand members -71 6M Corporate segment net additions H15 9 / 42 2H H16 2H16 1H17 2H17

10 Net Revenues Individual Plans and 2017 Earnings Release The individual plans revenues increased 11.8% YoY, totaling R$75,722 in. In 2017, net revenues reached R$285,553, a 17.5% increase over the same period of previous year. Individual Plans 4Q16 Δ% Δ% (+) Payments, net 79,664 71, , , (-) Direct taxes on dental care operations 3,942 3, ,846 13, Net operating revenue¹ (NOR) 75,722 67, , , ¹ excluding Sale of Services and Products R$ million Individual Plans revenues evolution Since 2014, the individual plans segment revenues grew 96.9% (i) Average Ticket Individual Plans In, individual plans average ticket was R$40.67, a 12.4% increase over 4Q16. In 2017, the average ticket was R$38.35, 9.6% higher than the previous year. Average Ticket - Individual plans 4Q16 Δ% Δ% Payments, net R$000 (A) 79,664 71, , , Average number of members (B) Average ticket (R$/member/month) (A/B) / # of months (ii) Membership Individual Plans The individual plans segment represents 10% of total portfolio, with 642 thousand members. 10 / 42

11 Net Revenues - SME and 2017 Earnings Release The SME revenues increased 17.6% YoY, totaling R$58,848 in the quarter. In 2017, net revenues reached R$219,487, a 17.1% increase over the same period of the previous year. SME 4Q16 Δ% Δ% (+) Payments, net 61,210 52, , , (-) Direct taxes on dental care operations 2,363 2, ,152 7, Net operating revenue¹ (NOR) 58,848 50, , , ¹ excluding Sale of Services and Products R$ million SME revenues evolution Since 2014, SME revenues grew 57.8% (i) Average Ticket - SME In, SME average ticket reached R$21.41, a 9.4% increase YoY. In 2017, the SME average ticket was R$20.41, a 10.1% increase over the previous year. Average Ticket - SME 4Q16 Δ% Δ% Payments, net R$000 (A) 61,210 52, , , Average number of members (B) Average ticket (R$/member/month) (A/B) / # of months (ii) Membership - SME The SME segment registered net additions of 20 thousand lives in, 20 th consecutive quarter of growth, totaling 60 thousand new lives in The segment counts with the bank channel as the majority of its lives. We highlight the Brasildental channel, which added 20 thousand lives in the quarter and 49 thousand lives in the year. In 2017, the SME portfolio reached 963 thousand lives. 11 / 42

12 Brasildental and 2017 Earnings Release Brasildental portfolio breakdown 4Q16 3Q17 QoQ YoY Members % Members % Members % Members % Members % Corporate 355,293 83% 374,768 79% 391,199 75% 16,431 4% 35,906 10% SME 53,804 13% 83,090 18% 103,132 20% 20,042 24% 49,328 92% Individual Plans 17,384 4% 13,710 3% 28,808 6% 15, % 11,424 66% Total 426, % 471, % 523, % 51,571 11% 96,658 23% Net additions in 2017 Brasildental reached 523 thousand members, a 23% YoY growth, or 97 thousand new lives, due to the corporate and SME segments, and net additions of 52 new lives in. Thousand lives Q17 2Q17 3Q (R$000, except otherwise specified) 4Q16 % % Net operating revenue¹ (NOR) 23,173 14, ,418 46, Cost of services¹ 10,774 7, ,847 25, SG&A 6,383 4, ,009 13, Selling expenses 2,841 1, ,237 2, Selling expenses (% Sales) p.p p.p. Administrative expenses (G&A) 3,542 3, ,772 10, Administrative expenses (G&A) (% Sales) p.p p.p. Other operating revenues Allowance for doubtful receivables ,684 1, Profit sharing EBITDA 5,407 2, ,215 4, EBITDA margin (%) p.p p.p. Net income, or 2,633 1, ,911 3, ¹ Reclassifies the reducing effect of the co-responsability between OdontoPrev and Brasildental. Quarterly adjusted EBITDA evolution R$ million and % Sales In, Brasildental EBITDA reached R$5.4 million, with 23.3% margin, 9.0 p.p. above 14.3% in 4Q16. 1Q17 2Q17 3Q R$ million % Sales 12 / 42

13 INSS and 2017 Earnings Release OdontoPrev discussed the right not to disburse the Social Security (INSS) related to professional services provided to beneficiaries of the Company. In 2Q17, the Company s demand was approved by the Supreme Court, and the amount of R$306.7 million in provisions was fully reversed, of which there were no legal cash deposits. Bradesco Dental also had the same request, and the Company made the reversal of such related provisions in 2Q17, in the amount of R$45.6 million until July of 2010, with a positive cash impact in 3Q17. In 3Q17 there was a reversal in the cost of services, due to INSS previously paid of post-administrated plans, in the amount of R$5.3 million. In addition to the reversals above, the Company accounted in tax credits related to INSS payments made during the five years prior to 2010, in the amount of R$87.2 million. The table below shows the metrics affected by the INSS reversals and tax credits accounting in 2017: R$ thousand Adjusted metrics Bradesco Dental 2Q17 3Q Cost of service 22, , ,658 5,323 42,208 22, , ,189 INSS 24, ,856¹ 251, ,562 24, , ,329 INSS - devolution post-administraed -2,733-21,377-24,110 5,323-1,353-2,733-17,407-20,140 G&A -1,715-12,253-13, ,490-1,715-15,742-17,457 Adjusted EBITDA 20, , ,690 5,323 38,719 20, , ,732 Net financial income 18,363 72,232 90,594 2,581 40,529 18, , ,705 Monetary restatement of provisions 20,642 79, , ,676 20, , ,166 Devolution post-administrated -2,279-7,616-9,895 2,581-3,147-2,279-8,182-10,461 Income tax -13,201-90, ,457-2,687-26,944-13, , ,088 Net income 25, , ,828 5,217 52,304 25, , ,348 ¹ Includes provision of R$3.4 million related to June 2017 OdontoPrev Total Reversal and tax credits accounting period OdontoPrev OdontoPrev Bradesco Dental OdontoPrev Total Cost of services 2017: quarterly INSS reversal and tax credits accounting impact (R$ million) Cost of Services Q17 3Q17 Cost of Services 2017 ex-inss 13 / 42

14 Cost of services (dental care ratio) Cost of services (ex IBNR) and dental loss ratio (% Sales) 4Q16 Δ% p.p Δ% p.p. R$ 000 % Sales R$ 000 % Sales Sales R$ 000 % Sales R$ 000 % Sales Sales Cost of services (ex IBNR) 121, , , , Indemnifiable claims, net 159, , , , Payroll charges on services -42, , , , Dental materials 1, , , , Other operating expenses 2, , , , Odontored , Cost of services EX-inss (ex IBNR) 163, , , , Indemnifiable claims, net 159, , , , Payroll charges on services , , , Dental materials 1, , , , Other operating expenses 2, , , , Odontored , ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS Cost of services (ex IBNR) and dental loss ratio (% Sales) Q16 Δ% p.p Ex INSS¹ Ex INSS² Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales Δ% p.p. Sales For comparison purposes, the IBNR Provision (Incurred but not Reported) and technical reserves (Odontored), approved by ANS, was excluded from the Cost of Services. In there was a constitution of IBNR and technical reserves of R$3,310, as compared to reversion of R$6,529 in 4Q16. In 2017, there was a constitution of R$12,926, as compared to R$1,464 in / 42

15 Excluding INSS effects, the cost of services represented 44.1% of revenues in, 5.6 p.p. below the 49.7% of 4Q16. In 2017, was 45.7% of revenues, 3.4 p.p. below the 49.1% of registered in the previous year Quartely and LTM Cost of Services (% Sales) ,8 47, Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q¹ 3Q¹ 4Q¹ Quarterly LTM ¹ Excludes Bradesco Dental and OdontoPrev INSS effects 4Q Cost of service and Dental Care Ratio per segment¹ Corporate SME Individual Plans 4Q16 Δ% 4Q16 Δ% 4Q16 Δ% Cost of services (R$ 000) (A) 118, , ,928 22, ,991 17, Dental care ratio (% Sales) p.p p.p p.p. Average number of members (B) 4,687 4, Cost of services / member / month (A/B)/ # of months ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 Cost of service and Dental Care Ratio per segment¹ Corporate SME Individual Plans Δ% Δ% Δ% Cost of services (R$ 000) (A) 484, , ,024 85, ,643 61, Dental care ratio (% Sales) p.p p.p p.p. Average number of members (B) 4,700 4, Cost of services / member / month (A/B)/ # of months ¹ Excludes Bradesco Dental and OdontoPrev INSS In, DCR showed a 7.3 p.p. decrease in corporate segment and 4.9 p.p. in SME. In the individual plans segment, DCR had a 1.6 p.p. increase. In 2017, the DCR came down in the corporate segment from 56.3% to 52.5%, and SME from 45.5% to 42.4%. In the individual plans segment, DCR showed an increase from 25.2% to 27.5%. 15 / 42

16 Cost of Services / member / month (R$) and DCR - Corporate Q16 1Q17 2Q17¹ 3Q17¹ 4T17¹ R$ million DCR (%) Cost of Services / member / month (R$) and DCR Individual Plans Q16 1Q17 2Q17¹ 3Q17¹ ¹ R$ million DCR (%) Cost of Services / member / month (R$) and DCR - SME Q16 1Q17 2Q17¹ 3Q17¹ ¹ R$ million DCR (%) ¹ Excludes Bradesco Dental and OdontoPrev INSS effects 16 / 42

17 Selling expenses and 2017 Earnings Release (R$000) % Sales 4Q16 % Sales 2017 % Sales 2016 % Sales Selling expenses 38, , , , The selling expenses reached 10.3% of revenues in, 0.8 p.p. higher than 4Q16. In 2017, reached 10.2%, 0.9 p.p. higher in relation to Q Selling expenses per segment Corporate SME Individual Plans 4Q16 Δ% 4Q16 Δ% 4Q16 Δ% Selling expenses (R$ 000) 13,162 13, ,039 5, ,952 14, Selling expenses (% Sales) p.p p.p p.p. In, selling expenses showed an increase in all three segments. Selling expenses per segment Corporate SME Individual Plans Δ% Δ% Δ% Selling expenses (R$ 000) 51,973 52, ,661 23, ,759 50, Selling expenses (% Sales) p.p p.p p.p. In 2017, selling expenses were stable in the corporate segment, and decreasing in relation to sales in SMEs. In the individual plans segment, there was a 2.7 p.p. increase due to sales mix. Administrative expenses (G&A) 4Q16 Δ% p.p Δ% p.p. R$ 000 % Sales R$ 000 % Sales Sales R$ 000 % Sales R$ 000 % Sales Sales Personnel 30, , , , Third parties services 9, , , , Rentals and occupancy 11, , , , Taxes and fees 1, , , , Publicity and advertising 5, , , , Others 3, , , , G&A (not adjusted at EBITDA base) 62, , , , Depreciation and amortization 2, , , , Acquisitions G&A (not adjusted at EBITDA base) 2, , , , Total administrative expenses (G&A) 65, , , , / 42

18 Personnel 30, , , , Third parties services² 5, , , , Rentals and occupancy 11, , , , Taxes and fees 1, , , , Publicity and advertising 5, , , , Others 3, , , , G&A (not adjusted at EBITDA base) 59, , , , Depreciation and amortization 2, , , , Acquisitions G&A (not adjusted at EBITDA base) 2, , , , Total administrative expenses (G&A) 62, , , , ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS Q Ex INSS¹ Δ% p.p. Ex INSS² Δ% p.p. Sales Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales G&A (included in the adjusted EBITDA base) Considering attorney services in the amount of R$3,490 related to the accounting of tax credits of OdontoPrev INSS in, the administrative expenses were R$59,462 in (16.0% of Sales). In 2017, were R$216,070 (15.0% of Sales). G&A (% Sales) Personnel Others # of employees 1, , , ,588 1, , , ¹ ¹ Excludes Bradesco Dental and OdontoPrev INSS 18 / 42

19 Allowance for doubtful receivables The Allowance for doubtful receivables totaled R$15,667 (4.2% of Sales) in, lower than R$17,524 (5.0% of Sales) in 4Q16, 0.8 p.p. below. In 2017, it reached R$ (3.8% of Sales), 0.7 p.p. lower than The allowance for doubtful receivables is calculated based on historical losses of the Company. Each month OdontoPrev accrues over each type of accounts receivable, due or not, according to CPC 38/IAS 39. Allowance for doubtful receivables 4Q16 Δ% Δ% R$ ,667 17, ,045 60, % Sales p.p p.p. Allowance for doubtful receivables R$ million and % Sales Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q R$ million % Sales 19 / 42

20 EBITDA and Adjusted EBITDA and 2017 Earnings Release 4Q16 Δ% p.p Δ% p.p. Y/Y % R$ 000 % Sales R$ 000 % Sales Sales R$ 000 % Sales R$ 000 % Sales Sales Y/Y % Net Income 116, , , , (+) Income tax 57, , , , (+) Social contribution tax -1, , , , (-) Net financial income 51, , , , (+) Financial expenses 1, , , , (+) Stock option 2, , , , (-) Participation of minoritary shareholders (+) Depreciation and amortization 2, , , , (-) Equity in subsidiaries , , EBITDA 126, , , , (+/-) Incurred But Not Reported Provision - IBNR 3, , , , Odontored - Technical reserves (+) Brasildental EBITDA Pro Forma 2, , , (+) Acquisitions Adjusted EBITDA 132, , , , The adjusted EBITDA reached R$93,881 in, 30.9% higher than 4Q16, with margin expansion to 25.3%, 4.9 p.p. above the 20.4% in 4Q16. In 2017, the adjusted EBITDA reached R$351,648, 17.3% higher than 2016, with a margin of 24.5%, above the 22.0% in Net Income 63, , , , (+) Income tax 30, , , , (+) Social contribution tax -1, , , , (-) Net financial income 51, , , , (+) Financial expenses 42, , , , (+) Stock option 2, , , , (-) Participation of minoritary shareholders (+) Depreciation and amortization 2, , , , (-) Equity in subsidiaries , , EBITDA 87, , , , (+/-) Incurred But Not Reported Provision - IBNR 3, , , , Odontored - Technical reserves (+) Brasildental EBITDA Pro Forma 2, , , (+) Acquisitions Adjusted EBITDA 93, , , , ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS Q16 Δ% p.p Δ% p.p. Ex INSS¹ Y/Y % Ex INSS² Sales Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales Y/Y % 20 / 42

21 609.4 INSS effects in adjusted EBITDA 2017 (R$ million) Adjusted EBITDA Reversal in Cost of Services Administrative Expenses Adjusted EBITDA Ex-INSS Adjusted EBITDA R$ million and % Sales % % ² 4Q16 ¹ ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS 21 / 42

22 Financial income and 2017 Earnings Release 4Q Δ% R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales Δ% Net financial income 49, , , , (+) Financial income 51, , , , (-) Financial expenses 1, , , , (-) Bank fees , , (-) Monetary restatement of provisions 123-7, , (-) Others financials expenses , Excluding OdontoPrev INSS effects, the net financial result was R$9,369 (2.5% of Sales) in, and R$35,793 in 2017 (2.5% of Sales), 50.8% higher than R$23,728 (1.7% of Sales) in Ex INSS¹ R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales Net financial income 9, , , , OdontoPrev s financial assets are comprised of an exclusive mutual fund and time deposits of prime institutions, almost all of them 100% liquid. 4Q16 (+) Financial income 51, , , , (-) Financial expenses 42, , , , (-) Bank fees , , (-) Monetary restatement of provisions 40, , , , (-) Others financials expenses , ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS Δ% 2017 ex INSS² 2016 Δ% R$ milion Net Cash 508¹ ¹ Includes R$118.5 million dedicated to ANS / 42

23 Income and social contribution taxes 4Q Δ% R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales Taxes 55, , , , (-) Current income and social contribution taxes 57, , , , (-) Deferred income and social contribution taxes -1, , , , Q Ex INSS¹ Δ% ex INSS² R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales R$ 000 % Sales Taxes 28, , , , (-) Current income and social contribution taxes 30, , , , (-) Deferred income and social contribution taxes -1, ,784 (3.3) , , Δ% Δ% Ex INSS¹ 4Q Ex INSS¹ Income before taxes and profit sharing 175,440 96,192 81, , , ,823 (-) Profit sharing 3,432 3,432 1,182 16,149 16,149 9,356 (=) Tax base 172,008 92,760 80, , , ,467 Taxes (-) Current income and social contribution taxes 57,794 30,850 33, , , ,862 (-) Deferred income and social contribution taxes -1,877-1,877-11,784 98,682-20,048-31,445 Total taxes 55,917 28,973 21, , ,479 89,417 Current effective tax rate 33.6% 33.3% 41.5% 19.3% 36.6% 39.6% ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS Effective tax rate (R$000) / 42

24 Net Income and 2017 Earnings Release Net income : INSS effects (R$ million) Net Income Cost of services Administrative expenses Net financial income Income & social contribution taxes Net income 2017: INSS effect (R$ million) Net Income Ex-INSS Net Income Cost of services Administrative expenses Net financial income Income & social contribution taxes Net Income Ex-INSS Considering the accounting of tax credits related to OdontoPrev INSS, net income reached R$63,975 in, 8.3% above 4Q16. In 2017, net income was R$244,571, 13.2% above 2016, with a 30% ROE. R$ million Net Income 13.2% % % 34% 32% 30% 8.3% % ² 4Q16 ¹ ROE ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS 24 / 42

25 Cash flow (R$000) 4Q CASH FLOW FROM OPERATIONAL ACTIVITIES Net income for the period 116,091 58, , ,050 Reconciliation of net income with the cash generated by operations 28,273 55,407-18, , , , , ,353 Decrease (increase) in operational assets -112,962-16, ,184-69,221 Increase (decrease) in operational liabilities 29,439-35,612-11, ,490 NET CASH PROVIDED BY (USED IN) OPERATIONAL ACTIVITIES 60,841 62, , ,642 CASH FLOW FROM INVESTING ACTIVITIES Acquisition of property and equipment ,590-4,979 System development, software licenses and other -2,878-2,284-10,280-8,560 Advance for future capital increase in Investee 1, ,125 Control in associate company ,596 Advance for future increase of invested capital -1, ,275 0 NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES -3,566-2,771-15,145-13,068 CASH FLOW FROM FINANCING ACTIVITIES Dividends paid -53,544-23, , ,468 Interest on capital paid -11,675-11,336-47,499-45,336 Stock Options Program vesting reimbursements ,109 22,490 NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES -64,406-34, , ,314 INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS -7,131 24,974 65, ,260 Cash, Cash Equivalents and short-term investiments Balance at the beginning of period 515, , , ,352 Balance at the end of period 508, , , ,612 INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS -7,131 24,974 65, , / 42

26 R$ million % of Sales and 2017 Earnings Release 2017 Cash Flow Net Cash DEC16 Cash Capex Cash + - Acquisitions Stock = Generation Dividends Options² Net Cash DEC17¹ Since the IPO in 2006, OdontoPrev has presented a cash generation of R$2,244 million, and paid R$1,983 million to shareholders. At the end of December 2017, the net cash position was of R$508 million, without any leverage. Cash Flow since the 2006 IPO R$ million 22,7% of Sales , Share buyback Capital reductions -1,605.5 Cash dividends , Net Cash DEC = Cash Generation Acquisitions Capex Shareholder Remuneration Stock Options³ Net Cash DEC17¹ ¹ Includes R$118.5 million dedicated to ANS ² Refers to options vested, according to the Stock Options Program ³ Share repurchase related to Stock Options Plan 26 / 42

27 Capex The IT platform represents the bulk of OdontoPrev s capex. (R$thousand) 4Q IT platform, acquis ition/licens e of s oftware 2,873 2,284 10,274 8,556 Computer equipment ,674 1,482 Dental plan equipment, furniture and utens ils Ins tallations ,474 Vehicle Others Total capex 3,566 3,117 13,870 13,535 Adjusted EBITDA and CAPEX R$ million ² ¹ Q16 Adjusted EBITDA CAPEX ¹ Includes the accounting of tax credits related to INSS payments made during five years prior to 2010 ² Excludes Bradesco Dental and OdontoPrev INSS 27 / 42

28 Statement of added value Statement (R$000) 4Q Revenues 372, ,592 1,447,849 1,365,998 Inputs purchased from third parties -231, , , ,988 (=) GROSS VALUE ADDED 140, , , ,010 Retentions -2,145-2,171-8,183-7,446 (=) WEALTH CREATED BY THE COMPANY 138, , , ,564 Wealth received in transfer 51,979 15, ,881 57,327 (=) WEALTH CREATED 190, , , ,891 WEALTH DISTRIBUTED -190, % -158, % -732, % -597, % Personnel and charges -30, % -27, % -119, % -106, % Taxes, fees and contributions -37, % -59, % -85, % -224, % Lenders and lessors -3, % -10, % -13, % -42, % Shareholders -116, % -58, % -502, % -216, % Stock options -2, % -2, % -10, % -9, % Stock options Since the creation of the Stock Options Plan, back in 2007, OdontoPrev has made 12 grants, demonstrated below: December 31, 2017 (R$/share) Grant date Granted options Canceled options Exercised options Number of options outstanding on 12/31/2017 * Historical grant share price (R$) Δ % IGP-M since grant date Current share price updated by inflation Dividends per share IOC per share Capital Reductions per share Current grant share price 08/02/2007 2,662, ,304 1,673, % /28/2008 4,241, ,544 3,264, % /25/2009 3,060, ,916 2,220, % /11/2010 2,096, ,803 1,896, % /20/2011 1,751, ,174 1,530, % /20/2012 1,609, ,112 1,215,985 35, % /20/2013 3,000, ,650 2,172, , % /25/ , , , % /26/2015 2,679, ,223-2,315, ** ** ** ** ** /19/2015 2,572, ,736-2,262, ** ** ** ** ** /01/ , , ** ** ** ** ** /26/2016 2,889, ,610-2,761, ** ** ** ** ** Total 27,183,181 5,060,072 14,086,386 8,036,723 * After the share split of 07/01/2010 and 04/02/2012 ** New stock options plan approved on Shareholder's Meeting, May/ / 42

29 Fiscal year Payment Approval and 2017 Earnings Release Shareholder remuneration Dividends (DIV), interest on capital (IOC), capital reduction (CR) and share buyback (SB) - R$ thousand Shareholder position Type Amount R$ Total annual Net Income Total paid in 2006: 8,080 16,240 16,911 Total paid in 2007: 18,477 16,297 47,458 Total paid in 2008: 30,436 39,958 55,153 Total paid in 2009: 28, ¹ 58,976 Total paid in 2010: 523, , ,004 Total paid in 2011: 85, ² 145, /10/ /26/ /26/2011 IOC 16, /25/ /02/ /02/2012 DIV 72, /23/ /26/ /27/2012 IOC 14, /23/ /26/ /27/2012 DIV 27, /22/ /26/ /27/2012 IOC 9, /22/ /26/ /27/2012 DIV 32, /21/ /25/ /25/2012 JCP 8, /21/ /25/ /25/2012 DIV 25,506 Total paid in 2012: 207, /03/ /02/ /02/2013 DIV 41, /10/ /26/ /26/2013 IOC 8, /04/ /30/ /30/2013 DIV 50, /10/ /25/ /25/2013 IOC 8, /04/ /30/ /30/2013 DIV 31, /13/ /29/ /29/2013 IOC 9, /04/ /29/ /29/2013 DIV 33,558 Total paid in 2013: 181, /08/ /20/ /20/2013 IOC 7, /10/ /27/ /28/2014 IOC 8, /04/ /29/ /29/2014 DIV 49, /11/ /01/ /02/2014 DIV 58, /10/ /24/ /25/2014 IOC 8, /03/ /29/ /29/2014 DIV 39, /08/ /16/ /18/2014 IOC 7, /03/ /28/ /28/2014 DIV 37,333 Total paid in 2014: 216, /07/ /16/ /16/2014 IOC 7, /09/ /12/ /16/2015 IOC 7, /06/ /06/ /08/2015 DIV 54, /03/ /29/ /30/2015 DIV 59, /07/ /11/ /11/2015 IOC 9, /03/ /29/ /29/2015 DIV 39, /05/ /16/ /16/2015 IOC 9, /12/ /28/ /29/2015 DIV 33,807 Total paid in 2015: 223, /06/ /14/ /15/2015 IOC 10, /05/ /14/ /14/2016 IOC 11, /04/ /11/ /12/2016 DIV 49, /03/ /27/ /27/2016 DIV 43, /05/ /14/ /17/2016 IOC 11, /05/ /27/ /01/2016 DIV 23, /05/ /15/ /20/2016 IOC 11, /05/ /26/ /31/2016 DIV 23,998 Total paid in 2016: 185, /04/ /13/ /16/2015 IOC 11, /05/ /15/ /20/2017 IOC 12, /04/ /28/ /31/2017 DIV 35, /05/ /24/ /02/2017 DIV 42, /05/ /19/ /22/2017 IOC 11, /05/ /26/ /31/2017 DIV 100, /04/ /18/ /21/2017 IOC 11, /06/ /25/ /30/2017 DIV 53,544 Total paid in 2017: 279, /04/ /11/ /14/2017 IOC 11,944 Total paid in 2018: 11, /28/ /05/2018 DIV 2,970 ¹ R$ 37,983 paid with statutory reserve. ² R$ 21,641 paid with statutory reserve. 3 R$ 21,238 paid with statutory reserve. 4 R$ 27,635 paid with statutory reserve. 5 R$ 28,608 paid with statutory reserve. 6 R$ 11,047 paid with statutory reserve. Total to be paid in 2018: 2,970 Total since the IPO 2,004, ³ 145, , , , , , , , / 42

30 In 2017, OdontoPrev s total shareholder remuneration was +30.4% versus +27.5% of IBrX. Capital Markets OdontoPrev s total shareholder remuneration x IBrX % -2.8% 0.1% 37.1% -12.4% 36.7% 30.4% 3.5% 27.5% 2.5% Source: B3 ODPV3 growing liquidity Updated until , ,951 3,616 3,788 1Q17 2Q17 3Q17 ADTV (R$ million) Average number of trades/day Source: B3 Increasing number of shareholders Institutional and individual investors 5,570 4,074 4,457 3,789 MAR17 JUN17 SEP17 DEC17 30 / 42

31 Market Cap evolution since the IPO (R$ billion, end of period) IPO Source: B3 updated on Global shareholder structure: investors from 33 countries Management 1.43% Treasury 0.07% Others 2.1% % 7.0% 4.9% 4.3% 2.7% 1.5% 50.01% Free Float 48.49% 13.7% 1.5% 1.0% 40.5% 0.8% 0.8% Total Capital 531,294,792 Shares 48% Free float 257,696,939 Shares 0.6% 31 / 42