Corporate presentation March 2018

Transcription

1 Corporate presentation March 2018

2 Agenda Overview and Strategy Financial Performance Healthcare Sector in Brazil Expansion Plan Ownership Structure and Governance 2

3 Agenda Overview and Strategy Financial Performance Healthcare Sector in Brazil Expansion Plan Ownership Structure and Governance 3

4 We have a history as an innovative player in several fronts in the healthcare sector 1982 Pioneer in the implementation of automated client service system Implementation of barcode system for safer identification of exams. V a lo r (s e g u n d o s ) 2004 Results of exams with historical data. 40,00 32,00 24,00 16,00 Tempo de Protrombina 2007 Knowledge management Integrated Medical Centers For the 4 th consecutive time, the technical area received accreditation from College of American Pathologist, highlighting our technical quality and reliability. 8,00 0,00 16/11/ /10/2009 5/10/ /9/2009 7/9/ /8/2009 Data Resultado Referência Máxima Referência Mínima 1983 First exams at the Diagnostic Center. Fleury is the first to offer integrated medicine solutions First company in the world to publish exam results on the Internet Diversified check-up Itaim PSC Launch of a+ Medicina Incubator of innovations Diagnóstica, the first national in client experience. brand in the sector. Use or art and culture in service innovation Agreement with Quest diagnostics for mass spectrometry s tests. Partnership with IBM Watson Health for Genomics. 4

5 Our knowledge management allows us to create pioneer products and services, with recognized medical quality 2.0 thousand qualified physicians (Dec/2017) 24 scientific bulletins 104 medical update meetings 244 articles gathered in the 27 th Knowledge Symposium # of new products # Medical Consultancy Services (in thousands) 110 Gross revenue from new products and services correspond to 1% of Grupo Fleury s gross revenue in the LTM

6 Fleury Genomics Estimated growth +70% Oncology tests Hereditary disease tests External Portfolio Prenatal/NeoNatal Current Portfolio 6

7 Our identity pillars make us unique Competency Map Information Complete portfolio of exams: Customer Service Excellence Customer service excellence Presence in major economic centers Clinical Analyses Reliability Imaging Medicine and Health Expertise High quality exams: - State of the art methodologies and technologies. - Renewed international certifications. - Highly specialized technical staff to perform exams. - Physicians trust over the diagnostics. Extensive performance in the healthcare value chain Innovation, research and development We are the best choice for our clients in each business, segment and geography. Diagnostic Information Integration Integrated information analysis: Medical Knowledge Management We provide several diagnostic solution products: Integrated Report, Evolutionary Medical Report, Artificial Intelligence (decision trees), etc. Comprehensive and Conclusive Diagnostics 7

8 How patient service centers (PSCs) and B2B models work Patient Service center model B2B model in hospitals Grupo Fleury Clinical analysis, imaging services Insurers, HMOs (SulAmérica, Patients Amil, etc) (clients) $ monthly payment Hospitals Clinical analysis, imaging services (Delivered by Fleury) $ payment for servicesgrupo rendered Fleury Insurers, HMOs (SulAmérica, Patients Amil, etc) (clients) $ monthly payment Healthcare coverage Healthcare coverage $ payment for services rendered $ payment for services rendered Source: Company and Credit Suisse Research 8

9 Brand recognition, with focus on the premium and upperintermediate segments high growth and margin segments Federal District Paraná Pernambuco Bahia Rio de Janeiro São Paulo Fleury: The best and most trusted brand in the Brazilian Market. Leader in the premium segment. Clínica Felippe Mattoso: Premium brand in Rio de Janeiro. Strong in imaging services. Weinmann: Top of Mind brand in Rio Grande do Sul. a+: National brand, launched in Strong potential for capturing intermediary segment. Diagnoson a+ and Labs a+: Cobranding strategy in Bahia and Rio de Janeiro to provide image and clinical analyses services at the same place ("one-stop-shop"). Rio Grande do Sul São Paulo (58 PSCs) Rio de Janeiro (48 PSCs) Total 169 PSCs 3 South (37 PSCs) Northeast (23 PSCs) Federal District (03 PSC) Premium Intermediate (34) (24) (08) (40) (21) (16) (01) (22) (01) (02) Basic 3 Data base: 1Q18. 9

10 Grupo Fleury is focused on providing premium and intermediary level services Grupo Fleury s Market share Visits (%)¹: São Paulo Metropolitan Region: Other Metropolitan Regions: 9% Premium 10% 40.6% share in premium segment Rio de Janeiro 15.8% 30% 27% 24% Upper Intermediate Intermediate SP 8.8% share in upper intermediate segment Rio Grande do Sul 18.5% Paraná 5.9% 36% Fleury brand focus Basic a+sp brand focus Bahia 10.5% Pernambuco 9.1% ¹Source: Grupo Fleury s estimates, based on ANS. Market Share considers single customers from payers in one year over total addressable number of lives in metropolitan region 10

11 B2B Footprint Operations in hospital portfolio Strategy Operations in hospital: to be a national benchmark for strategic partnerships through differentiation and highquality services. Lab to lab: to be a national market leader in the segment of high-complexity medical diagnosis. 23 Hospitals 4 2,3 3 Brazilian States and Federal District MM exams per month Brands 01 Paraná 03 Distrito Federal 02 Rio Grande do Sul 17 São Paulo 01 Rio de Janeiro Lab-to-lab: geographical coverage with strong presence in the Southeast region of Brazil. 11 Profitability: increase automation, process efficiency and mix improvement. Differentiation in customer service. Growth: same store sales and new contracts. Increase in more complex exams with higher average price. Levers Growth in the premium segment. Increased profitability due to operational efficiency gains. Differentiation in customer service. Increase in more complex exams with higher average price.

12 Addressable market in hospitals Growth potential (R$ MM) 3,200 1,402 1, , , % 74% 64% Total Small and medium Large Hospitals Other cities 10 Largest cities Public hospitals Private hospitals (target) 12

13 Agenda Overview and Strategy Financial Performance Healthcare Sector in Brazil Expansion Plan Ownership Structure and Governance 13

14 Our history makes us one of the greatest and most respected healthcare companies in Brazil Since 1926 providing complete diagnostic medicine portfolio: ~3.5 thousand types of exams in 37 different areas: Clinical Analyses (Routine, pathology and high complexity exams): 63 MM exams and R$ 1.5 bn of gross revenue. Imaging and others: 4 MM exams and R$ 1.1 bn of gross revenue. 8.8 thousand employees and 2.0 thousand physicians 1. Present in the country s main economic centers with diversified business lines. Gross Revenue of R$ 2.6 bn. Operating cash-flow generation of R$ 530 MM. EBITDA of R$ 619 MM and 26.0% margin. ROIC 2 of 44.5% and Grupo Fleury s Net Promoter Score (NPS) 3 reached 76.8% in 4Q17. Service Center (84% of revenues) Operations in Hospitals (15% of revenues) Reference laboratory (1% of revenues) Business lines 169 Patient Service Centers (PSCs) with more than 111 thousand m² in 4Q17 Clinical Analysis in 23 hospital institutions in 1Q18 Medium and high complexity exams to other laboratories and hospitals 1 Turnover of 17.9%in 2016 vs. 22.1% in ROIC adjusted without goodwill. 3 NPS including brands RJ. Figures in LTM otherwise as indicated. 14

15 Company s Revenue Breakdown has changed since 2010 Revenue Breakdown (R$ MM) 2, % % 19.7% 59.9% Labs D Or Acquisition 1, % 1, % 17.2% 15.7% 14.8% 16.5% 52.8% 43.5% CAGR +15.7% 1,856 1, % 17.5% 15.7% 16.7% 16.8% 16.5% 44.5% 50.0% 2, % 16.1% 16.3% 50.4% 2, % 16.3% 17.2% 50.4% 16.3% 16.2% 17.9% 49.6% +12.4% 2,586 2, % 16.2% 16.2% 16.3% 17.9% 17.2% 50.4% 49.6% 48 PSCs 22 hospitals 86 PSCs 34 PSCs Regional brands RJ² B2B Regional brands excl. RJ¹ Fleury brand ¹ It includes the Regional Brands PSCs in the South Regions, São Paulo, Federal District and the Northeast Region. ² It includes the PSCs in Rio de Janeiro under the brands Labs a+ and Felippe Mattoso. 15

16 Revenues, Costs and SG&A PSCs Same Store Sales YoY (%) Net Revenue (R$ MM) 11.0% 15.1% 10.5% % % 4.7% 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Costs ex. D&A (R$ MM) and Costs ex. D&A / Net Revenue (%) SG&A ex. D&A (R$ MM) and SG&A ex. D&A / Net Revenue (%) 69.3% 61.6% % 64.9% 64.5% 68.7% % % % 9.7% 8.9% 9.4% Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 16

17 Financial Indicators have shown sustainable growth 19.0% 101 Quarterly EBITDA (R$ MM) and margin (%) Quarterly Operating Cash Flow (R$ MM) / EBITDA (%) 29.5% 26.5% % % % 104% 125% 86% 50% 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Annual EBITDA¹ (R$ MM) and margin (%) Annual Operating Cash Flow (R$ MM) / EBITDA LTM (%) 21.0% % % % % % % % CAGR +26.0% % 93% % % ¹ EBITDA ajusted in 2015 and 2014 excluding non recurring. 17

18 Return and Customer s Satisfaction Indicators have shown sustainable growth ROIC ¹ Net Promoter Score NPS ² 44.5% 77.0% 76.8% 74.7% 32.9% 73.0% 72.3% 72.7% 69.3% 26.0% 23.4% 20.8% 66.1% 14.1% 16.0% Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 ¹ ROIC adjusted without goodwill. ² NPS measures the level of recommendation to family and friends after the use of our services. The methodology was updated in

19 Agenda Overview and Strategy Financial Performance Healthcare Sector in Brazil Expansion Plan Ownership Structure and Governance 19

20 Health sector main drivers Addition of population with age > 60 years Life Expectancy (age) Population aging and higher life expectancy support long term growth for diagnostic medicine Variation of Beneficiaries vs. Formal Jobs (MM) Health Care Insurance Penetration 3 95% % 60% 55% 61% There is still room to grow number of beneficiaries 33% 25% 18% 12% 7% Health plans beneficiaries 2010 Brazil s net additions of formal jobs 2011 Source: ANS, IBGE, CAGED and OECD France Canada USA Autralia South Korea Germany Brazil Chile Greece Mexico

21 The private medicine market is fragmented and still concentrated in the country s main economic centers Number of Beneficiaries Private Medicine in 2016¹ (Major Regions) Public Listed Labs Market Share in Revenues 2016² % (R$ 7.6 bi) Fleury + Other Listed Labs 3 SP 5.6 RJ 5.0 MG 2.8 PR 2.6 RS 1.6 BA 1.5 SC 1.4 PE Others 71% (R$ 18.4 bi) The Southeast region accounts for more than 62% of Brazil s private medicine. ~47.9 millions beneficiaries Brazil has approximately labs that provide diagnostic medicine that generate approximately R$ 26.0 billion in revenues. ¹Source: ANS data, December 2016 ²Source: ANS data and companies 3 Dasa, Hermes Pardini and Alliar 21

22 Agenda Overview and Strategy Financial Performance Healthcare Sector in Brazil Expansion Plan Ownership Structure and Governance 22

23 Grupo Fleury expansion plan Expansion in regional brands in the following 5 years (2017 to 2021) Brand PSC Size and Complexity # To be inaugurated # Inaugurated Fleury a+ SP Rio de Janeiro (Labs a+ and Felippe Mattoso) South and Federal District (Weinmann and a+) Large 2 2 Medium 2 to 3 1 Small and fast sites 14 to 17 8 Total - range of PSCs openings 18 to (50%) Large and medium 6 to 8 4 Small and fast sites 15 to 20 2 Total - range of PSCs openings 21 to 28 6 (21%) Large and medium 8 to 9 0 Small and fast sites 13 to 16 7 Total - range of PSCs openings 21 to 25 7 (24%) Medium and small 13 to Total - range of PSCs openings 13 to (67%) Total all brands (36%) 23

24 a+ SP Footprint Inaugurated PSCs (expansion plan) 24

25 Labs a+ and Fellipe Mattoso Footprint Labs a+ Fellipe Mattoso Inaugurated PSCs (expansion plan) 25

26 Agenda Overview and Strategy Financial Performance Healthcare Sector in Brazil Expansion Plan Ownership Structure and Governance 26

27 New Shareholder Structure Shareholder Structure BradSeg 1,2 Founding Physicians 1,2 Integritas (Founding Physicians 1,2 ) Other Shareholders % 12.4% 11.9% 59.4% 24.3% Grupo Fleury Total Shares: 315,312,192 Board of Directors Composition 08 members: 03 appointed by Integritas (Founding Physicians 1 ) 02 appointed by Bradseg 03 Independent 1 Shares belonging to the Shareholder s Agreement ² Updated on May 2017 ³ Updated on October Four Board Advisory Committees: Audit and Risk Management Finance Projects Compensation, Nomination and Company Performance.

28 Number of Employees and Turnover Number of Employees and Turnover Employees by Gender (2016) 9,647 20,0% 8,230 8,822 8,776 8,550 8,401 8,963 Men Women 80,0% 31.1% Employees by Region(2016) 24.0% 25.0% 25.4% 22.1% 17.9% 20.8% 5,1% 8,3% 2,1% Southeast South Northeast Midwest 84,5% Number of Employees Turnover 28

29 Executive Compensation The Balanced Scorecard (BSC) Indicators Weight EBITDA 40% ROIC 20% NPS 1 20% Single clients 20% Encourage the best performance of each professional in their functions, retain and attract qualified professionals, ensuring the Company's development and its sustainable growth. The executive bonus calculation is composed by the BSC s indicators (60%) and the individual performance target of each professional (40%). The distribution of bonus is tied to the achievement of a minimum EBITDA amount and capped by 6% of the annual EBITDA amount. 1 NPS: Net Promoter Score 29

30 Corporate presentation March 2018