Earnings Conference call: October 27 th 11AM (09AM EDT) Phone: Brazil: + 55 11 2188-0155 USA:+1 646-843-6054 Replay: +55 11 2188-0400 Code: Fleury Webcast: www.fleury.com.br/ri In September 29 th, 2017: Total shares 314,791,538 Market cap R$ 9,277MM US$ 2,928MM Share price R$ 29.47 /US$ 9.30 Fleury ON B3: FLRY3 Bloomberg: FLRY3 BZ Thomson Reuters: FLRY3-BR Debentures BRFLRYDBS007 BRFLRYDBS015 BRFLRYDBS023 GrupoFleury Investor Relations www.fleury.com.br/ir ri@grupofleury.com.br +55 11 5014-7413
Earnings São Paulo, October 26 th, 2017 Grupo Fleury announces today its 3 rd quarter () results. All figures are compared to the same period last year, unless otherwise stated, and are rounded to the nearest thousand, but may have differences when compared to the financial statements due to decimal digits. Highlights Gross reached R$ 667.7 million, 12.7% increase. Net of R$ 615.6 million, 14.0% increase. Same Store Sales (SSS) of PSC s 1 increased 7.9%. EBITDA of R$ 163.4 million, 17.9% increase. EBITDA Margin reached 26.5% (+87 bps); margin impacted by 97 bps due to expansion plan. Net Income increased 37.2% and reached R$ 86.6 million. Return on Invested Capital (ROIC 2 ), excluding goodwill, reached 44.2% (+1,213 bps). Inauguration of 7 units for Fleury, a+ in São Paulo and Brasília, and Labs a+ in Rio de Janeiro. NPS 3 reached 77.0%, an improvement of 395 bps. 1 PSCs: Patient Service Center. 2 Excludes the goodwill of the stockholder s equity. 3 NPS: Grupo Fleury s Net Promoter Score, indicator that measures the level of recommendation after the use of services. Financial Indicators Financial Indicators () Variation 9M 2017 9M 2016 Variation Gross 667.7 592.2 12.7% 1,956.3 1,727.9 13.2% Net 615.6 539.8 14.0% 1,801.0 1,572.9 14.5% Gross Profit 193.2 165.0 17.1% 582.5 469.3 24.1% EBITDA 163.4 138.6 17.9% 488.0 382.4 27.6% Net Income 86.6 63.1 37.2% 256.0 153.9 66.4% Net Cash Income 1 112.7 80.9 39.3% 310.5 202.9 53.0% Operating Cash Flow 170.5 160.9 6.0% 417.8 407.0 2.7% Gross Margin % 31.4% 30.6% 82 bps 32.3% 29.8% 251 bps EBITDA Margin % 26.5% 25.7% 87 bps 27.1% 24.3% 279 bps Effective Tax Rate -25.8% -32.9% 712 bps -25.8% -35.3% 946 bps Net Income Margin % 14.1% 11.7% 237 bps 14.2% 9.8% 443 bps Net Cash Income / Net 18.3% 15.0% 332 bps 17.2% 12.9% 434 bps Operating Cash Flow / Net 104.4% 116.1% -1,175 bps 85.6% 106.5% -2,083 bps ROE (LTM) 19.2% 10.5% 866 bps 19.2% 10.5% 866 bps ROIC (LTM) 15.0% 11.0% 402 bps 15.0% 11.0% 402 bps ROIC without goodwill (LTM) 44.2% 32.1% 1,213 bps 44.2% 32.1% 1,213 bps ¹ Net Cash Income : excludes the impact of deferred income tax 1
Management Commments In, we inaugurated seven new units, which are part of our expansion plan, as follows: two Fleury brand, two a+ brand in São Paulo, two a+ brand in Brasilia and one Labs a+ in Rio de Janeiro. Over the last twelve months until October this year, we inaugurated 24 new units, two of which were large in São Paulo - Fleury Morumbi and Fleury Anália Franco - with a complete offer of both clinical analysis and imaging exams. In the coming quarters, the inaugurations should be concentrated on the regional brands. We have worked intensely on the execution of the Company s Expansion Plan in order to integrate strategic units to our portfolio, so as to increase the offer our differentiated services and convenience to our clients, through our increased capillarity. Among the highlights of the quarter, it is important to mention that Advent, a private equity fund, sold the totality of its shares, which accounted for 14.5% of the company s stock. The transaction occurred via a block trade in the Brazilian Stock Exchange (B3) on September 20th, 2017, and after this event, the two members of the Board of Directors indicated by Advent resigned their positions. The shares sold in the block trade were widespread in the market, and predominantly acquired by local funds, which increased the company s free float to 59.4% of the total. The shareholding position of Bradesco Seguros (Bradseg) and the medical-partners remained the same, at 16.3% and 24.3%, respectively. On September 14th, 2017, we announced the acquisition of 100% of Serdil s capital stock, a diagnostic company with acknowledged reputation in imaging exams, operating for 45 years in the capital city of Porto Alegre, state of Rio Grande do Sul. This acquisition enables a complete service offering in the region and complements our clinical analysis portfolio by adding imaging exams. Serdil was valued at R$ 29.8 million, which corresponds to 6.0 times the 2016 EBITDA. The operation will be concluded upon the completion of the conditions precedents set forth in the agreement. In, we launched the Genômica website (www.fleurygenomica.com.br), which offers access to Fleury s genetic exams to clients throughout Brazil, in addition to extensive technical content with publications made by Fleury s medical team for requesting physicians. This is an important step that has consolidated the company s leading position in the personalized and precision medicine segment with a complete portfolio of genetic tests, dedicated medical team to advise the requesting physicians and a digital platform for the offer of these exams. Another highlight was the launch of Sutiã Rosa 2017 marketing campaign, which promotes public awareness of breast cancer and the importance of the early detection and prevention. This year, the campaign, in partnership with Riachuelo, will revert all the earnings obtained with sales to Amparo Maternal Hospital. The campaign is available on the hotsite www.sutiarosa.com.br. It is also important to mention that the Company's Net Promoter Score (NPS) continues to expand and reached 77.0% in, a 395 bps increase compared to, highlighting Labs a+ in Rio de Janeiro, a+ in Pernambuco and Weinmann in Rio Grande do Sul. The ongoing improvement of this indicator reflects the company s focus on technical, medical and customer service excellence, which translates into a unique and resolute experience for our customers, making them continue to recommend our services. In this context, Fleury Medicina e Saúde was considered the brand in the Healthcare sector that generates and protects the most value to its customers, according to the ranking More Value Produced (MVP), conducted by the consulting company DOM Strategy Partners, reported this quarter. The Fleury Group was highlighted in the 17th Broadcast Companies Award, promoted by Agência Estado in partnership with Economática, which analyzed the best-performing public companies in 2016. We achieved leadership in the Small Cap and Sustainability categories, as well as the second place in the general ranking, which analyzed 185 public companies. The Company was also highlighted in the healthcare sector on the Business Year Book 360º, which brings together the 300 best companies in Brazil, winning the first place in Corporate Governance. In addition, the Fleury Group was recognized for the second consecutive year as one of the outstanding companies in providing transparent financial statements by the National Association of Finance, Administration and Accounting Executives (Anefac). On October 10, 2017, we held the Fleury Investor Day, the Company's annual public meeting, and received the seal from the Association of Capital Markets Analysts and Investment Professionals (APIMEC) for the eighth consecutive year. The presentation and video of the event are available at the IR website. In this context, in, we grew 12.7% in gross revenue and 14.0% in net revenue. The EBITDA margin was 26.5%, an increase of 87 bps compared to. Net income reached R$ 86.6 million, an increase of 37.2%. In 9M17, the net revenue increased 14.5%, EBITDA margin reached 27.1% and net income increased 66.4%, amounting to R$ 256.0 million. Despite a macroeconomic scenario which still shows a moderate recovery, we remain focused on the execution of our differentiation strategy through the technical, medical and customer service excellence that characterize our services for more than nine decades. This consolidated positioning we have built, combined with our strict discipline in cost and expenses management, reinforces our confidence in the ongoing Expansion Plan and the development of innovative products for our customers and physicians, providing new tests that deliver precision and personalized medicine. We believe that, this way, we further enhance our competitive capacity, generating value for all stakeholders in the healthcare chain. 2
Financial Performance Gross Gross reached R$ 667.7 million in, an increase of 12.7% when compared to. We highlight the growth of regional brands excl. RJ (+18.2%) and hospital operations (+17.1%). In the first nine months of 2017, gross revenue increased by 13.2%, highlighting the expansion in revenues of regional brands excl. Rio de Janeiro (+18.4%) and Rio de Janeiro brands (+15.0%). Gross () +12.7% 667.7 592.2 Gross () +13.2% 1,956.3 1,727.9 9M 2016 9M 2017 Business Line Performance vs. Grupo Fleury 12.7% 1.1 PSCs 12.2% Business line performance 9M 2017 vs. 9M 2016 Grupo Fleury 13.2% 1.1 PSCs 13.5% 1.1.1 Fleury brand 10.0% 1.1.1 Fleury brand 11.3% 1.1.2 Regional brands excl. RJ 18.2% 1.1.2 Regional brands excl. RJ 18.4% 1.1.3 Regional brands RJ 1.2 Operations in Hospitals 12.3% 17.1% 1.1.3 Regional brands RJ 15.0% 1.2 Operations in Hospitals 12.2% Business Portfolio Business Portfolio 16.1% 16.2% 17.5% 16.5% 16.2% 18.3% 16.4% 16.1% 17.1% 16.2% 16.3% 17.9% 50.2% 49.0% 50.4% 49.6% B2B Regional brands RJ Regional brands excl. RJ Fleury brand 9M 2016 B2B Regional brands RJ 9M 2017 Regional brands excl. RJ Fleury brand 3
Gross and Asset Efficiency from PSC s The Gross from PSC s amounted to R$ 557.4 million in the quarter, 12.2% higher than. In the first nine months of 2017, the gross revenue increased by 13.5%, reaching R$ 1.6 billion. In, the asset efficiency measured by gross revenue per square meter increased 5.2% compared to, while the efficiency measured by the total gross revenue per PSC was 1.4% below the same period last year, amounting to R$ 3.6 million. In the last twelve months, we added 6.6 thousand square meters in our PSC s portfolio. In this period, we inaugurated 22 new units (until September 2017) and closed 3. It is important to highlight that 56% of the new units were inaugurated in, adding a significant customer service area to our portfolio, totaling 3.7 thousand square meters. Therefore, our new units are still advancing in the maturity curve to reach the full potential of revenue and profitability. Gross per m² Gross per PSC () 4.3 4.3 4.6 4.8 5.0 4.8 +5.2% 5.4 5.2 5.2 3.6-1.4% 3.6 106.3 102.1 101.1 100.2 100.2 100.5 100.8 103.2 106.9 3Q15 4Q15 1Q16 2Q16 4Q16 1Q17 2Q17 PSCs Quarterly Average Gross per m² (R$ thousand) Thousands m² PSCs Gross per Exam Gross revenue per exam decreased by 3.0% in the quarter and fell 1.1% in 9M17, due to the increase of clinical analyses exams, mainly in the PSC s in Rio de Janeiro brands and hospital operations: PSC s gross revenue per exam grew 2.8% in and 3.7% in 9M17, as a result of the company s mix of exams and price readjustments. Hospital operations recorded 9.0% decrease in gross revenue per exam in and 8.8% decrease in 9M17 compared to the same period in the previous year. The gross revenue per exam was negatively impacted by the entry of new contracts with distinct operating models and exclusively for clinical analysis, resulting in a lower average price. The reference laboratory segment, in turn, remained stable in and showed an increase of 2.2% in 9M17. Gross per exam Variation 9M 2017 9M 2016 Variation Grupo Fleury 37.4 38.6-3.0% 37.6 38.1-1.1% - Patient Service Centers 54.1 52.6 2.8% 54.5 52.6 3.7% - Hospital Operations 13.8 15.2-9.0% 13.7 15.0-8.8% - Lab to Lab 37.3 37.3 0.0% 38.9 38.1 2.2% 4
Gross from PSCs In, gross revenue from PSCs grew 12.2%, with an increase of 7.9% in Same Store Sales (SSS). In the quarter, we still observed a positive trend in same store sales, mostly in our regional brands, with strong growth in clinical analysis, and improved imaging equipment occupation in the a+ SP brand. In 9M17, gross revenue from PSCs increased 13.5%. Fleury Brand In, Fleury Brand s gross revenue increased 10.0% (+4.0% in SSS). The new units are still maturing, advancing to achieve full revenue potential according to plans and better serving regions/neighborhoods, which had limited service offerings. This way, we continue to grow significantly, despite the decrease in beneficiaries in the Brazilian supplementary health system according to ANS. In the last twelve months, the 9 units inaugurated (7 fast sites and 2 large units) contributed to the revenue increase. These 2 were opened this quarter, 1 fast site and 1 large unit. Regional Brands excluding Rio de Janeiro The Regional Brands excluding Rio de Janeiro grew 18.2% in gross revenues and 14.2% in SSS, with the spotlight on the increase of a+ SP brand (+26.7%) and a+ Paraná brand (+21.7%). In 9M17, gross revenue increased 18.4%, as a result of the strong performance of a+ SP (+25.5%) and a+ Paraná (+20.8%). The growth is explained by (i) the increased number of visits, mainly in clinical analysis, (ii) extended opening hours in some units, (iii) medical activation, and (iv) the growing recognition of these brands by physicians and customers. In the a+ SP brand, we also observed a growth in the asset utilization, together with the increase of imaging exams. The 12 units inaugurated in 9M17 contributed to the revenue increase, of which 11 are fast sites and 1 medium. In, 4 units were inaugurated as follows: 2 a+ in São Paulo and 2 in Brasília. Rio de Janeiro Brands In, the Rio de Janeiro Brands showed an increase of 12.3% in gross revenue and 13.3% in SSS. In 9M17, gross revenue increased 15.0%. The growth observed in Labs a+ and Felippe Mattoso brands is mainly a consequence of the strong increase in the number of clinical analysis exams per customer, reinforcing the convenience model, which provides both clinical and imaging tests at the same location. Furthermore, the increased offer of imaging exams, the medical relationship activities and the growing recognition of these brands by physicians and customers in Rio de Janeiro, contributed positively to the robust performance of Rio de Janeiro brands. It is important to mention that the increase in clinical analysis is also due to the growth in our mobile home care service. Gross Indicators vs. Fleury Brand Regional Brands excl. RJ Brands RJ Total (PSCs) - Gross 10.0% 18.2% 12.3% 12.2% - SSS 4.0% 14.2% 13.3% 7.9% - Gross / m 2* -1.6% 13.0% 12.5% 5.2% - Gross / PSC* -20.0% 6.4% 12.3% -1.4% * Operational Efficiency Indicators reflect the impact of the Expansion Plan on Fleury and Regional brands in which the new units are still advancing on the maturity curve. 5
Gross from B2B Hospital Operations Gross revenue totaled R$ 100.3 million in, an increase of 17.1%, reflecting the contribution of 6 new hospitals in our portfolio in the last twelve months. In Same Hospital Sales, we observed an increase of 5.0% in. In 9M17, the revenue expansion reached 12.2%. In, we terminated our contract with Quinta D'Or Hospital in Rio de Janeiro. In October 2017, we will begin the operation in the Edmundo Vasconcelos Hospital Complex. Reference Laboratory (Lab-to-lab) Gross revenue reached R$ 8.3 million, an increase of 12.3%. In 9M17, we recorded a gross revenue of R$ 23.6 million, an expansion of 5.5%. Preventive Medicine Gross revenue reached R$ 1.8 million in. In 9M17, gross revenue amounted to R$ 5.4 million. Tax and Cancellations/Deductions taxes remained stable at 6.1% over gross revenue in and 6.2% in 9M17 when compared to same period last year. In, cancellations and deductions accounted for 1.7% of gross revenue, R$ -11.1 million, representing a 100 bps reduction. In 9M17, this indicator accounts for 1.8% of gross revenue, a 101 bps reduction. This result reflects the ongoing improvement in systems and processes of the accounts receivable cycle. The provisions related to Accounts Receivable (AR) over 121 days, achieved total coverage of 77.9% of this amount (66.1% in the ). AR past due over 121 days represents 5.8% of total receivables (13.3% in ). Deduction + Cancellation/Gross and Deduction and Cancellation () -100 bps 2.7% (-15.8) 1.7% (-11.1) Deduction + Cancellation/Gross and Deduction and Cancellation () -101 bps 2.8% (-48.3) 1.8% (-34.9) 9M 2016 9M 2017 Net Net revenue totalled R$ 615.6 million, an increase of 14.0%. In 9M17, net revenue increased 14.5%. Net () +14.0% 615.6 539.8 Net () +14,5% 1.801,0 1.572,9 9M 2016 9M 2017 6
Cost of Services The cost of services in amounted to R$ 422.4 million, an increase of 12.7%. The cost of services accounted for 68.6% of net revenue, an 82 bps reduction over the same period in 2016. In 9M17, cost of services increased 10.4%, a 251 bps dilution over net revenue. Cost of Services breakdown Variation % bps Personnel and medical services 218.9 35.6% 189.4 35.1% 15.6% 48 bps General services, rentals and utilities 116.0 18.9% 105.2 19.5% 10.3% -64 bps Materials and Exam Intermediation 59.9 9.7% 50.7 9.4% 18.1% 34 bps Depreciation and Amortization 25.3 4.1% 28.1 5.2% -9.9% -109 bps General Expenses 2.3 0.4% 1.5 0.3% 53.0% 09 bps Cost of Services 422.4 68.6% 374.8 69.4% 12.7% -82 bps Cost of Services breakdown 9M 2017 9M 2016 Variation % bps Personnel and medical services 623.1 34.6% 548.1 34.8% 13.7% -24 bps General services, rentals and utilities 339.4 18.8% 314.1 20.0% 8.1% -112 bps Materials and Exam Intermediation 177.7 9.9% 153.8 9.8% 15.5% 09 bps Depreciation and Amortization 71.6 4.0% 83.1 5.3% -13.9% -131 bps General Expenses 6.7 0.4% 4.5 0.3% 46.7% 08 bps Cost of Services 1,218.4 67.7% 1,103.7 70.2% 10.4% -251 bps Below, the analysis of the main lines of costs in compared to : Personnel and Medical Services (+15.6%) are the Company s main costs and accounted for 35.6% of net revenue in the quarter, an increase of 48 bps. This increase is related to the growth in the number of employees, 708 new headcounts, to support our Expansion Plan and the increased demand for our services, in addition to salary readjustments, as a result of collective labor agreements of approximately 8%, with 4% referring to the second installment of 2016 and 4% referring to the first installment of 2017 (2% in September 2017), and the readjustment of employees' health plans. General Services, Rentals and Utilities (+10.3%) represented 18.9% of net revenue, a decrease of 64 bps. The efficiency gain can be explained by renegotiations with several suppliers in the period. Materials and Exam Intermediation (+18.1%) represented 9.7% of net revenue, an increase of 34 bps. The growth can be explained by the mix of exams processed in the period, and the strong increase of clinical analysis resulting from our entry in new hospital operations. Depreciation and Amortization (-9.9%) accounted for 4.1% of net revenue, a 109 bps decrease compared to. This reduction can be explained by the revision of the estimated useful life of specific medical equipment and certain intangibles, occurred in 2016. General Expenses (+53.0%) represented 0.4% of net revenue. Gross Profit In, gross profit amounted to R$ 193.2 million, an increase of 17.1%. The gross margin reached 31.4%, up 82 bps. In 9M17, gross profit totaled R$ 582.5 million, an increase of 24.1%. The gross margin reached 32.3%, up 251 bps compared to 9M16. 7
Operating Expenses and Equity in Subsidiaries Operating expenses amounted to R$ 65.4 million, an increase of 5.0% and accounted for 10.6% of net revenue in the period, a decrease of 91 bps. In 9M17, the operating expenses increased 1.6%, and showed a 139 bps dilution in relation to net revenue. Operating Expenses breakdown and Equity in Subsidiaries Variation % bps G&A 54.8 8.9% 53.7 9.9% 2.1% -104 bps Depreciation and Amortization 10.6 1.7% 8.2 1.5% 29.1% 20 bps Other Operating (Income) Expenses 1.2 0.2% 1.4 0.3% -8.4% -05 bps Provision (Reversal) for Contingency (1.0) -0.2% (0.6) -0.1% 65.6% -05 bps Equity in Subsidiaries (0.4) -0.1% (0.5) -0.1% -21.0% 03 bps Operating Expenses and Subsidiaries' Share of Profits 65.4 10.6% 62.2 11.5% 5.0% -91 bps Operating Expenses breakdown and Equity in Subsidiaries 9M 2017 9M 2016 Variação % bps G&A 159.5 8.9% 149.6 9.5% 6.6% -65 bps Depreciation and Amortization 31.7 1.8% 24.6 1.6% 28.8% 20 bps Other Operating (Income) Expenses 7.0 0.4% 15.0 1.0% -53.1% -56 bps Provision (Reversal) for Contingency (0.5) 0.0% 5.4 0.3% -109.8% -37 bps Equity in Subsidiaries (1.1) -0.1% (1.0) -0.1% 5.5% 01 bps Operating Expenses and Subsidiaries' Share of Profits 196.7 10.9% 193.6 12.3% 1.6% -139 bps Below, the analysis of the main lines of operating expenses in compared to : General and Administrative Expenses (+2.1%) represented 8.9% of net revenue, a 104 bps decrease. The efficiency gain can be explained mainly by reductions in consulting expenses, legal services and corporate rental agreements. Depreciation and Amortization (+29.1%) represented 1.7% of net revenue, an expansion of 20 bps over, as a consequence of the software amortization increase (SAP re-implantation occurred in 2016). Other operational Income / Expenses (-8.4%) represented 0.2% of net revenue, a decrease of 5 bps. Provision for contingencies (+65.6%) represented -0.2% of net revenue, a decrease of 5 bps. Equity in Subsidiaries Grupo Papaiz, a dental diagnostic company in São Paulo, was acquired by Grupo Fleury and Odontoprev in the end of 2012. The figures have been reported by the equity in subsidiaries method considering the form of a Joint Venture in which Grupo Fleury holds a 51% stake of the business. Below is the performance in and 9M17: Equity in Subsidiaries Papaiz R$ thousand R$ thousand Net 5,674.3 4,864.3 16.7% % bps EBITDA 1,374.8 24.2% 1,328.2 27.3% 3.5% -308 bps Net Income 737.6 13.0% 934.0 19.2% -21.0% -620 bps Variation Net Income attributed to Grupo Fleury (51%) 376.2 476.4-21.0% 8
Equity in Subsidiaries Papaiz R$ thousand 9M 2017 R$ thousand 9M 2016 Net 15,495.5 13,235.6 17.1% Variation % bps EBITDA 3,836.5 24.8% 3,124.5 23.6% 22.8% 115 bps Net Income 2,171.7 14.0% 2,058.8 15.6% 5.5% -154 bps Net Income attributed to Grupo Fleury (51%) 1,107.6 1,050.0 5.5% EBITDA In, EBITDA reached R$ 163.4 million, a 17.9% increase, resulting from the increase in net revenue as well as the continuous effort to gain operational efficiency, despite the Expansion Plan, including additional pre-operational costs, which impacted the EBITDA margin by 97 bps. The EBITDA margin reached 26.5%, 87 bps higher than in, despite the expansion plan impact. In 9M17, EBITDA increased 27.6%, resulting in a margin of 27.1%, an expansion of 279 bps. EBITDA () and margin (%) +17.9% 163.4 138.6 EBITDA () and margin (%) +27.6% 488.0 382.4 25.7% 26.5% 24.3% 27.1% 9M 2016 9M 2017 EBITDA Variation % bps Net Income 86.6 14.1% 63.1 11.7% 37.2% 237 bps Financial Result 11.2 1.8% 8.7 1.6% 28.9% 21 bps Depreciation and Amortization 35.9 5.8% 36.3 6.7% -1.1% -89 bps Income Tax and Social Contribution 30.1 4.9% 31.0 5.7% -2.8% -85 bps Equity in Subsidiaries (0.4) -0.1% (0.5) -0.1% -21.0% 03 bps EBITDA 163.4 26.5% 138.6 25.7% 17.9% 87 bps EBITDA 9M 2017 9M 2016 Variation % bps Net Income 256.0 14.2% 153.9 9.8% 66.4% 443 bps Financial Result 40.8 2.3% 37.9 2.4% 7.6% -14 bps Depreciation and Amortization 103.3 5.7% 107.8 6.9% -4.2% -112 bps Income Tax and Social Contribution 89.1 4.9% 83.9 5.3% 6.2% -39 bps Equity in Subsidiaries (1.1) -0.1% (1.0) -0.1% 5.5% 01 bps EBITDA 488.0 27.1% 382.4 24.3% 27.6% 279 bps 9
EBIT (Operational Income) EBIT amounted to R$ 127.5 million, an increase of 24.6%. The margin was 20.7%, an increase of 176 bps. In 9M17, EBIT increased 40.1% achieving a margin of 21.4%, an expansion of 391 bps. EBIT () and margin (%) +24.6% 127.5 102.3 EBIT () and margin (%) +40.1% 384.7 274.6 18.9% 20.7% 17.5% 21.4% 9M 2016 9M 2017 Financial Result The financial result reached R$ -11.2 million, an increase of 28.9%. Despite the reduction of 41.4% in financial expenses, the financial income fell 61.2%, which reflects the decreased position of cash and cash equivalents, together with lower interest rates from the financial investments. In 9M17, the financial result totaled R$ -40.8 million, an increase of 7.6% when compared to same period last year. Financial Result () Variation 9M 2017 9M 2016 Variation Net financial income (expenses) (11.2) (8.7) 28.9% (40.8) (37.9) 7.6% Financial income 11.9 30.8-61.2% 38.3 79.6-51.9% Earnings on financial investments 10.8 28.1-61.4% 34.3 74.4-53.9% Interest and inflation adjustment 1.1 2.6-58.5% 4.0 5.2-22.7% Financial expenses (23.1) (39.4) -41.4% (79.0) (117.5) -32.7% Interest on debentures and financing (19.3) (33.3) -41.9% (64.8) (97.1) -33.2% Interest and inflation adjustment (3.8) (6.2) -38.7% (14.2) (20.3) -30.1% Indebtedness In, the ratio net debt over EBITDA LTM reached 0.6x versus 0.3x recorded in. Composition of Net Debt () 2Q17 Next 12 months Gross Debt (Debentures and Financing ) 981.9 829.7 850.4 307.5 Cash, Cash Equivalents and Marketable Securities (835.5) (433.8) (482.7) Net Debt 146.4 395.9 367.7 Net Debt / EBITDA LTM 0.3x 0.7x 0.6x EBITDA LTM / Financial Result LTM 9.1x 12.6x 12.4x In, we raised R$ 50.8 million through FINEP loans and re-paid the totality of FINAME loans (R$ 13.2 million) and R$ 5.8 million related to FINEP loans. In addition we paid R$ 29.8 million in interest, including debentures. In 9M17, we raised R$ 50.8 million through FINEP loans and R$ 13.2 million through FINAME/BNDES loans, and re-paid R$ 28.8 million in FINAME/BNDES and FINEP loans and R$ 80.9 million in interest, including debentures. 10
Income Tax and Social Contribution In, the income tax and social contribution totaled R$ 30.1 million, a reduction of 2.8%. The effective rate reached 25.8%, with an improvement of 712 bps. The improvement in tax management and predictability of the maximum utilization of the tax benefit from interest on shareholders' equity, allowed the Company to adopt the Accounting Standard CPC 21 - Interim Statements, which determines the use of the best estimate for the annual effective rate. As a result, in, the effective rate reached 25.8%, which reflects the best estimate for the annual effective rate. Income Tax and Social Contribution () Variation 9M 2017 9M 2016 Variation Earnings Before Tax (EBIT) 116.7 94.1 24.0% 345.1 237.8 45.1% Expected taxes (standard rate of 34%) (39.6) (32.0) 23.7% (117.2) (80.8) 45.0% Non-deductible expenses and incentives 0.7 1.1-30.8% 1.1 (2.8) -138.4% ISE (CPC 21) 8.6 0.0 0.0% 26.7 0.0 0.0% Subsidiaries share of profits 0.1 (0.1) -308.1% 0.3 (0.3) -233.8% Income tax and social contribution (30.1) (31.0) -2.8% (89.1) (83.9) 6.2% % EBIT 25.8% 32.9% -712 bps 25.8% 35.3% -946 bps Current (4.1) (13.2) -69.4% (34.6) (34.8) -0.6% Deferred (26.1) (17.8) 46.9% (54.5) (49.1) 11.0% Below we inform the expectation for the goodwill amortization for tax purposes, whose impact reduces the cash tax. Expected Amortization of Goodwill Period Balance Remaining 2017 42 2018 7 2019 7 2020 7 Net Income Net income reached R$ 86.6 million, an increase of 37.2%. The net margin reached 14.1%, an expansion of 237 bps compared to the same period last year. In 9M17, net revenue was 66,4% above the same prior year period, and reached 14,2% of net margin. Net Profit () and margin (%) +37.2% 86.6 63.1 14.1% 11.7% Net Profit () and margin (%) +66.4% 256.0 153.9 14.2% 9.8% 9M 2016 9M 2017 11
Operating Cash Flow In, operating cash flow reached R$ 170.5 million, an increase of 6.0%. The conversion rate (operating cash flow / EBITDA) reached 104.4% versus 116.1% in, due to the higher investment in working capital, mainly in accounts receivables. The average receivables collection period was 67 days (vs. 66 days in ). Investment activities recorded R$ -79.7 million, an expansion of 39.3%. In, was recorded an increase of 148.5% in investments, mostly related to the acquisition of property and equipment, due to the Expansion Plan. Financing activities recorded R$ -45.7 million, a reduction of 37.8%. In the result was impacted by a new financing in the amount of R$ 50.8 million for innovation projects (FINEP). In 9M17, operating cash flow totaled R$ 417.8 million, an increase of 2.7%. The conversion rate (operating cash flow / EBITDA) reached 85.6%. Investment activities amounted to R$ -247.1 million, an expansion of 112.1%. Financing activities totaled R$ -171.5 million, an increase of 5.8%. Cash Flow () Variation 9M 2017 9M 2016 Variation Net Income 86.6 63.1 37.2% 256.0 153.9 66.4% Items not affecting cash: Financial revenues and expenses 13.3 13.1 1.3% 44.1 42.0 5.0% Depreciation and amortization 35.9 36.3-1.1% 103.3 107.8-4.2% Income tax and social contribution 30.1 31.0-2.8% 89.1 83.9 6.2% Provisions (Reversals) 17.1 24.4-29.6% 61.9 77.1-19.7% Others (1.2) (0.8) -48.2% 1.0 2.5-58.7% Net Income before non-cash effects 181.9 167.1 8.8% 555.4 467.1 18.9% Working capital: Accounts receivables (29.5) (18.5) -59.8% (117.1) (73.7) -59.0% Suppliers (6.7) (0.5) -1284.6% (5.6) 1.9-395.4% Salaries / Charges 11.3 8.0 41.3% (2.7) (4.6) 41.0% Others Assets and Liabilities 16.1 21.2-24.0% 17.7 49.6-64.2% Other Operating Cash Flow: Income tax and social contribution (2.5) (16.4) 84.9% (29.9) (33.4) 10.5% Cash Flow from Operating Activities 170.5 160.9 6.0% 417.8 407.0 2.7% Investment Activities: Acquisition of fixed and intangible assets (83.5) (33.6) -148.5% (194.5) (94.0) -106.8% Interest income and dividends received 7.6 21.5-64.6% 24.7 59.6-58.6% Sale of property, plant and equipment 0.0 0.7-100.0% 0.0 0.7-100.0% Marketable Securities (3.8) (45.9) 91.6% (76.8) (77.6) 1.0% Acquisitions 0.0 0.0 0.0% (0.6) (5.2) 88.8% Cash Flow from Investing Activities (79.7) (57.3) -39.3% (247.1) (116.5) -112.1% Financing Activities Others Financing Activities 13.2 (41.7) 131.7% (49.9) (109.0) 54.3% Dividends and/or interest on capital (58.9) (31.8) -85.5% (130.1) (53.1) -144.8% Capital increase 0.0 0.0 0.0% 8.4 0.0 0.0% Cash Flow from Financing Activities (45.7) (73.4) 37.8% (171.5) (162.1) -5.8% Cash Flow 45.1 30.2 49.1% (0.8) 128.4-100.6% Cash Flow Adjusted by Marketable Securities 48.9 76.1-35.7% 75.9 205.9-63.1% Conversion (Operating Cash Flow / EBITDA) 104.4% 116.1% -1,175 bps 85.6% 106.5% -2,083 bps 12
Account Receivables There was a continued improvement in the aging profile of current receivables which accounted for 85.9% of the total receivables compared to 78.6% in. The amount over 121 days decreased from 13.3% in to 5.8% in. Aging Account Receivable 3Q15 4Q15 1Q16 2Q16 4Q16 1Q17 2Q17 Trade Receivables 482.5 442.7 481.9 470.8 465.4 444.7 520.3 495.0 508.7 - Current 352.2 323.6 362.1 358.4 365.9 349.7 439.0 427.7 437.1 - Up to 120 days past due 57.8 54.0 54.2 37.8 37.7 36.7 31.6 34.1 42.1-121 to 360 days past due 42.7 37.8 40.9 45.3 38.2 31.3 26.6 22.1 20.7 - Over 360 days past due 29.7 27.3 24.8 29.4 23.6 27.0 23.1 11.2 8.8 Sales Deductions Provisions (49.6) (45.1) (43.7) (49.5) (40.9) (41.6) (40.6) (28.0) (23.0) Total 432.8 397.5 438.3 421.3 424.5 403.0 479.7 467.0 485.7 Current / Trade Receivables 73.0% 73.1% 75.1% 76.1% 78.6% 78.6% 84.4% 86.4% 85.9% Up to 120 days past due/ Trade Receivables 12.0% 12.2% 11.3% 8.0% 8.1% 8.2% 6.1% 6.9% 8.3% Over 121 days past due / Trade Receivables 15.0% 14.7% 13.6% 15.9% 13.3% 13.1% 9.5% 6.7% 5.8% Provisions / Over 121 days past due 68.6% 69.3% 66.5% 66.4% 66.1% 71.4% 81.7% 84.2% 77.9% Expansion Plan In, Fleury Group inaugurated 7 units, as follows: 2 Fleury brand in São Paulo, 2 a+ brand in São Paulo and 2 in Brasília, and 1 Labs a+ in Rio de Janeiro. In October, 2 more units were inaugurated: Fleury Carlos Weber and a+ Queiroz Filho, both in São Paulo. From October 2016 to October 2017, the Company inaugurated 24 new PSCs, which are part of the 5 year Expansion Plan announced in December 2016, which forecasts a total of 73 to 90 new PSCs to be inaugurated by 2021. PSCs Complexity Size (m2) State Date Fleury Carlos Weber Medium 681 São Paulo Oct-17 a+ Queiroza Filho Medium 673 São Paulo Oct-17 Fleury Alameda Jaú Fast site 380 São Paulo Sep-17 Labs a+ Campo Grande Fast site 281 Rio de Janeiro Sep-17 a+ Asa Sul Fast site 58 Brasília Aug-17 a+ Sudoeste Fast site 119 Brasília Aug-17 a+ Augusto Tolle Fast site 392 São Paulo Jul-17 Fleury Morumbi Large 1.988 São Paulo Jul-17 a+ Santo André Medium 437 São Paulo Jul-17 Fleury Heitor Penteado Fast site 183 São Paulo Jun-17 Fleury Anália Franco Large 1.214 São Paulo Jun-17 a+ Itaim Bibi Fast site 207 São Paulo May-17 a+ Água Verde Small 171 Paraná May-17 Fleury São Caetano do Sul Fast site 411 São Paulo May-17 Weinmann General Vitorino Small 113 Rio Grande do Sul May-17 Fleury Cerro Corá Fast site 233 São Paulo Apr-17 Fleury Ipiranga Fast site 206 São Paulo Mar-17 a+ Ecoville Small 47 Paraná Feb-17 a+ Champagnat Small 81 Paraná Feb-17 a+ Centro Small 29 Paraná Feb-17 Fleury Brasil Fast site 235 São Paulo Jan-17 Fleury Moema Fast site 126 São Paulo Dec-16 13
Investments Capex (additions to fixed and intangible assets) totaled R$ 70.3 million, mainly concentrated in our Expansion Plan. In 9M17, Capex amounted to R$ 194.5 million, mainly concentrated in our Expansion Plan. The Others group is composed of strategic projects, infrastructure, IT and equipment renewal. CAPEX () +109.2% 70.3 CAPEX () +106.8 194.5 33.6 34.9% 65.1% 65.7% 34.3% 94.0 32.4% 67.6% 65.7% 34.3% Expansion and improvement in PSCs and technical areas Others 9M 2016 9M 2017 Expansion and improvement in PSCs and technical areas Others Stock Market Performance Fleury shares (BM&FBOVESPA: FLRY3) at the end of were quoted at R$ 29.47. The Average Daily Trading Volume (ADTV) in the period was R$ 54.4 million, 2.5x higher than the volume for the same period in 2016. In September 2017, Simba Investment Fund I (Advent International) sold all of its shares, which accounted for 14.5% of the Company's total shares. The shares of the block trade were widespread in the market, and were mostly acquired by local funds. The shareholding position of Bradesco Seguros (Bradseg) and the medical-partners remained the same, at 16.3% and 24.3%, respectively. Average Daily Trading Volume (ADTV) R$MM 0.697% IN ADTV 0.374% 0.372% 0.375% 0.300% 54.4 0.217% 0.125% 25.4 28.6 0.086% 0.086% 22.2 21.9 0.057% 12.4 7.6 5.5 3.04.6 2013 2014 2015 1T16 2T16 3T16 4T16 1T17 2T17 3T17 * NI: Negotiability Index Investor Relations Phone: + 55 11 5014-7413 E-mail: ri@grupofleury.com.br Website: www.fleury.com.br/ri Address: Avenida General Valdomiro de Lima, 508-04344-903 - São Paulo, SP Brasil 14
Performance Indicators Operational Indicators Description Unit 3Q15 4Q15 1Q16 2Q16 4Q16 1Q17 2Q17 Income Statment Gross Gross 547.0 521.8 558.6 577.1 592.2 572.4 642.1 646.5 667.7 Net COGS SG&A Gross - Tax (ISS and PIS/COFINS) - Cancellations Personnel and Medical Services + Materials and Outsourcing + General Services, Rent and Utilities + General Expenses + Depreciation and Amortization Does not include Other Operating Expenses / s neither Contingency Provisions 495.5 473.0 507.9 525.1 539.8 523.2 587.8 597.6 615.6-360.3-358.2-355.0-373.8-374.8-391.4-385.2-410.9-422.4-57.9-58.9-53.1-59.2-62.0-69.1-58.5-67.2-65.5 EBIT Earnings Before Interest and Taxes 70.6 54.4 86.6 85.7 102.3 63.1 139.7 117.5 127.5 EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization 101.9 85.1 121.7 122.0 138.6 100.7 173.2 151.4 163.4 Net Finance Income Interest - Interest Expenses -15.9-13.4-14.2-15.0-8.7-6.6-16.9-12.7-11.2 Net Income Net Income 35.2 25.9 44.7 46.1 63.1 74.9 81.6 87.9 86.6 Net Cash Income Net Income - Deferred income tax 49.8 37.7 64.2 57.8 80.9 75.1 105.6 92.2 112.7 Result Indicators Cancellation Index Cancellations / Gross % -3.2% -3.1% -2.9% -2.8% -2.7% -2.4% -2.3% -1.4% -1.7% Gross Margin Gross Profit / Net % 27.3% 24.3% 30.1% 28.8% 30.6% 25.2% 34.5% 31.3% 31.4% EBIT Margin Earnings Before Interest and Tax / Net % 14.3% 11.5% 17.0% 16.3% 18.9% 12.1% 23.8% 19.7% 20.7% EBITDA Margin Earnings Before Interest, Tax, Depreciation and Amortization / Net % 20.6% 18.0% 24.0% 23.2% 25.7% 19.3% 29.5% 25.3% 26.5% Effective Tax Rate Current Tax / Earnings Before Tax % -35.8% -36.8% -38.5% -35.1% -32.9% 32.3% -33.8% -16.4% -25.8% Net Margin Net Profit / Net % 7.1% 5.5% 8.8% 8.8% 11.7% 14.3% 13.9% 14.7% 14.1% Net Cash Income Margin (Net Income - Deferred income tax) / Net % 10.1% 8.0% 12.6% 11.0% 15.0% 14.4% 18.0% 15.4% 18.3% Financial Debt Cash & Equivalents Cash, Equivalents and Marketable Securities 617.1 629.5 657.1 759.3 835.5 406.8 337.2 433.8 482.7 Gross Debt Short and Long Term Debts (Borrowings and Debentures) 1,037.8 990.0 983.7 988.7 981.9 832.0 817.2 829.7 850.4 Net Debt Gross Debt - Cash and Cash equivalents 420.7 360.5 326.6 229.4 146.4 425.2 480.0 395.9 367.7 Net Debt / EBITDA LTM (Gross Debt - Cash and Cash equivalents) / EBITDA LTM Multiple 1.2 1.0 0.8 0.5 0.3 0.9 0.9 0.7 0.6 Profitability and Return ROIC without Goodwill (LTM) NOPAT LTM (tax= 34%) / Capital Employed (Shareholders Equity + Net Debt - Goodwill) % 18.7% 20.8% 23.8% 27.2% 32.1% 32.9% 36.0% 40.3% 44.2% 15
Assets 9/30/2017 12/31/2016 Liabilities and equity 9/30/2017 12/31/2016 Reclassified Reclassified FLEURY S.A. CONSOLIDATED Balance Sheet as of September 30, 2017 and December 31, 2016 (In R$ thousands) Current Current Cash and cash equivalents 313,000 313,834 Financing 28,656 19,532 Marketable securities 169,741 92,976 Debentures 278,810 128,460 Accounts receivable 485,730 403,041 Derivative financial instruments 147 252 Inventories 23,792 31,598 Trade accounts payable 137,439 143,050 Taxes recoverable 56,277 66,745 Payroll and related taxes payable 112,353 93,246 Credits receivable 3,026 8,161 Taxes and contributions payable 28,245 24,304 Other assets 13,277 16,870 Accounts payable - company acquisition 240 243 Total current 1,064,843 933,225 Other accounts payable 43 95 Total current 585,933 409,182 Credits receivable 13,696 11,470 Non-current Other assets 12,986 15,596 Financing 109,619 84,029 Judicial deposits 48,993 42,634 Debentures 433,334 600,000 Deferred income tax and social contribution, ne 344,699 290,232 Provision for tax, labor and civil risks 33,122 34,107 Taxes and contributions payable 41,885 44,798 Accounts payable - company acquisition 7,777 7,747 Total non-current 970,436 1,060,913 Share capital 1,408,849 1,400,453 Capital reserve - options granted recognized 15,638 9,412 Revaluation reserve 78 77 Legal reserve 54,650 54,650 Investments 9,844 8,762 Profit for the period 255,982 - Property and equipment 562,442 470,409 Interest on equity - 58,941 - Intangible assets 1,519,821 1,523,724 Additional dividends proposed - 71,133 Total non-current 2,167,782 2,072,595 Total equity 1,676,256 1,535,725 Total assets 3,232,625 3,005,820 Total liabilities and equity 3,232,625 3,005,820 Non-current Consolidated Consolidated Equity 16
FLEURY S.A. CONSOLIDATED Income Statement as of September 30, 2017 and September 30, 2016 (R$ thousands) Consolidated Reclassified from services rendered 615,586 539,846 Cost of services rendered (422,373) (374,838) - - Gross Profit 193,213 165,008 Operating income (expenses) General and administrative (65,478) (61,950) Other operating income (expenses), net (1,244) (1,360) Provision for tax, labor and civil risks 992 599 Equity in the earnings (losses) of subsidiaries 376 476 - - Operating profit before financial result 127,859 102,773 Financial income 11,935 30,756 Financial expenses (23,091) (39,411) - - Financial result (11,156) (8,655) Earnings before income tax and social contribution 116,703 94,118 Income tax and social contribution: Current (4,052) (13,242) Deferred (26,090) (17,766) - - Profit for the period 86,561 63,110 Earnings per share attributable to owners of the Company Basic earnings per share (weighted average) 0.28 0.20 Diluted earnings per share (weighted average) 0.27 0.20 17
Share Capital Share Capital Capital Reserve Investment Reserve Share issue expenses Options granted recognized Revaluation reserve Legal Reserve Investment Reserve Profit for the period Balances at December 31, 2015 1,402,531 (22,784) 5,709 242 43,213 215,762-10,766 1,655,439 Realization of revaluation reserve - - - (155) - 155 - - - Stock option plan - - 1,411 - - 935 - - 2,346 Profit for the period (R$0,29 per share) - - - - - - 153,873-153,873 Profit allocation 'Dividends - - - - - - (31,767) (10,766) (42,533) Balances on September 30, 2016 1,402,531 (22,784) 7,120 87 43,213 216,852 122,106-1,769,125 Balances at December 31, 2016 Realization of revaluation reserve - - - 1 - - - - 1 Capital integralization 8,396 - - - - - - - 8,396 Stock option plan - - 6,226 - - - - - 6,226 Profit for the period (R$0.52 per share) - - - - - - 255,982-255,982 'Dividends - - - - - - (58,941) (71,133) (130,074) Balances on September 30, 2017 1,431,633 (22,784) 15,638 78 54,650-197,041-1,676,256 Additional dividends proposed Equity FLEURY S.A. CONSOLIDATED Statements of Changes in Equity as of September 30, 2017 and September 30, 2016 (R$ thousands) 18
FLEURY S.A. CONSOLIDATED Statements of Cash Flow as of September 30, 2017 and September 30, 2016 (R$ thousands) Consolidated Reclassified Profit for the period 86,561 63,110 Items not affecting cash: Income tax and social contribution 30,142 31,008 Financial and expenses income 13,311 13,143 Depreciation and amortization 35,935 36,321 Equity in the earnings (losses) of subsidiaries (377) (476) Stock option plan 2,177 1,625 Constitution (reversal) of provision for tax, labor and civil risks (992) (599) Estimated losses with allowance for doubtful accounts 10,806 15,254 Profit sharing 5,153 8,082 Other (832) (329) Cash flows from operating activities before changes in assets and liabilities 181,884 167,139 - (Increase) decrease in accounts receivable (29,531) (18,479) (Increase) decrease in inventories (4,714) 2,196 (Increase) decrease in taxes recoverable 16,010 18,879 (Increase) decrease in judicial deposits (1,099) (2,174) (Increase) decrease in other assets 6,157 3,043 Increase (decrease) in trade accounts payable (6,748) (488) Increase (decrease) in payroll and related charges 11,298 7,999 Increase (decrease) in tax liabilities 849 982 Increase (decrease) in taxes paid in installments (1,203) (518) (Increase) decrease in other liabilities 120 (1,219) Total variation in assets and liabilities (8,861) 10,221 Income tax and social contribution paid (2,477) (16,415) Net cash from operating activities 170,546 160,945 Acquisition of property and equipment and intangible assets (83,528) (33,610) Sale of fixed assets - 683 Marketable securities and interest earned (4,376) (45,866) Redemption of marketable securities 534 - Interest earned from financial investments 7,630 21,537 Payments - - Net cash used in investing activities (79,740) (57,256) Borrowings and debentures 50,203 - Settlement (principal) of financing and debentures (5,760) (2,302) Interest paid in financing and debentures (29,795) (37,824) Financial expenses paid (1,285) (1,283) Derivative financial instruments (156) (295) Capital integralization - - Dividends and / or interest on shareholders' equity (58,938) (31,765) Dividends 26 24 Net cash used in financing activities (45,705) (73,445) (Decrease) increase in cash and cash equivalents 45,101 30,244 Cash and cash equivalents At the beginning of the period 267,899 612,994 At the end of the period 313,000 643,238 Variation in cash and cash equivalents 45,101 30,244 19
FLEURY S.A. CONSOLIDATED Statements of Value Added as of September 30, 2017 and September 30, 2016 (R$ thousands) Consolidated 30/09/2017 30/09/2016 Reclassified s 1,922,588 1,695,747 Goods and products sold and services rendered 1,956,323 1,727,908 Estimated losses with allowance for doubtful accounts (34,433) (46,673) Other revenue 698 14,512 Inputs purchased from third parties (693,854) (635,308) Cost of goods and products sold and services rendered (524,086) (470,327) Materials, electricity, outsourced services and others (168,863) (164,593) Loss/recovery of asset values (905) (388) Gross value added 1,228,734 1,060,439 Depreciation and amortization (103,273) (107,767) Net value added 1,125,461 952,672 Value added received through transfer 39,361 80,625 Equity in the earnings (losses) of subsidiaries 1,108 1,050 Financial income 38,253 79,575 - - Total value added 1,164,822 1,033,297 - - Distribution of value added (1,164,822) (1,033,297) Personnel and charges (498,193) (428,536) Direct remuneration (288,359) (253,643) Benefits (112,250) (87,491) Charges (97,584) (87,402) Taxes, fees and contributions (216,905) (196,814) Federal (160,147) (147,101) Municipalities (56,092) (48,747) State (666) (966) Interest, rental and other operating expenses (193,742) (254,074) Interest (61,128) (93,818) Rental (93,031) (84,465) Other operating expenses (39,583) (75,791) Dividends and/or Interest on Equity (58,941) (31,767) Retained earnings (197,041) (122,106) 20