2Q12 Results FLRY 3 August, 2012 ALL RIGHTS RESERVED 2012
Disclaimer This presentation may contain forward-looking statements. Such statements are not statements of historical facts and reflect the beliefs and expectations of the Company s management. The words anticipates, believes, estimates, expects, forecasts, plans, predicts, project, targets and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Known risks and uncertainties include but are not limited to the impact of competitive services and pricing market acceptance of services, service transactions by the Company and its competitors, regulatory approval, currency fluctuations, changes in service mix offered, and other risks described in the Company s registration statement. Forward-looking statements speak only as of the date they are made and the Grupo Fleury does not undertake any obligation to update them in light of new information or future developments. All figures are compared to 2Q11 except when stated otherwise
Operational Highlights On April 30 th, the Company launched a new PSC in São Paulo: Fleury Granja Viana. On May 24 th, a+ celebrated its 1st anniversary. A new marketing campaign was launched in order to increase brand awareness and reinforce attributes: a+ is agile, friendly, accessible, modern and sustainable. PSC Fleury Granja Viana On May 28 th, Fleury s Excellence in Customer Service Programme was awarded by Grupo Padrão and the GFK Institute. Company s CEO and Customer Intimacy Director were recognized by their continuous efforts towards Customer Service Excellence. On June 11 th, the Integrated Diagnostic Medicine Center for the Musculoskeletal System initiated its operation. This center is another result of the Medical Specialties Strategic Planning (PEEM) initiative. On July 2 nd, Labs D Or back-office operations were fully integrated to SAP and now the Group runs a single instance ERP platform. 3
Financial Highlights Growth Rate continues to accelerate: Gross Revenue increases by 59.4% YoY to R$ 426 MM. Organic growth achieves 13.3%. Patient Service Centers: Gross Revenue increases by 59.0% YoY to R$ 355 MM driven by both organic growth and acquisitions. Organic Growth achieves 15.3% Diagnostic Operations in Hospitals: Gross Revenue increases by 86% YoY to R$ 55.4 MM and represents 13% of the Group s Total Revenue. Excluding acquisitions and cancelled contracts, growth would be 12.1% YoY. EBITDA achieves R$ 81.7 million (21.9% margin on net revenue). EBIT (Operating Profit) reaches R$ 56.1 million (15.0% margin on net revenue). Net Profit reaches R$ 32.2 MM (8.6% margin on Net Revenue). Cash from operations achieves R$ 74 million in the quarter. Receivables due for more than 120 days are further reduced and now represent 16% of trade receivables. 4
Performance (R$ million) Gross Revenue Net Revenue 5
Performance (R$ million) EBITDA EBIT 17.9% 22.9% 23.3% 23.1% 17.7% 15.2% 23.1% 17.7% 6
Gross Revenue Organic Growth Organic growth has achieved 13.3% Breakdown 2Q12: 2Q11 vs 2Q12: 7
Gross Revenue Breakdown by Type of Test Patient Service Center achieves a balanced portfolio. Breakdown by type of test (%) 8
Gross and Net Revenue Breakdown 2Q12 Gross Revenue: R$ 426 million Net Revenue: R$ 374 million Reference Laboratory Operations in 2% Hospitals 13% Preventive Medicine 2% Patient Service Centers 83% Growth 2Q12 vs 2Q11: Growth 2Q12 vs 2Q11: R$ 159 MM 59.4% R$ 132 MM 59.0% R$ 26 MM 85.9% R$ 0.9 MM 16.4% R$ 129 MM 52.9% R$ 107 MM 52.7% R$ 21 MM 77.2% R$ 0.7 MM 13.6% R$ 0.7 MM 9.1% R$ 0.4 MM 5.5% R$ -0.4 MM R$ -0.4 MM 9
Patient Service Centers Business lines performance Gross Revenue increases by 59.0% YoY, amounting to R$ 355 million. Organic growth achieves 15.3% Net Growth of 52.7% YoY. Net Revenue (R$ MM) and Number of Tests (million) PSCs Assets Efficiency 10
Diagnostic Operations in Hospitals Business lines performance Gross revenue increases by 85.9% YoY, achieving R$ 55.4 million. Excluding acquisitions and cancelled contracts, growth would be 12.1% YoY. Net Revenue (R$ MM) and Number of tests (million) Net revenue growth of 77.2% YoY. Operations in Rede D Or hospitals are fully consolidated. This business line represents 13% of Group s Net Revenue. Extensive exams portfolio, including imaging services in Oswaldo Cruz and São Luiz Hospitals. 11
Reference Lab Business lines performance Reference Lab (excl. discontinued operations) reaches a Gross Revenue of R$ 8.6 million in the quarter, an increase of 9.1% compared to 2Q11. Net Revenue of R$ 7.8 million in the quarter (+5.5% YoY). Net Revenue (R$ MM) and Number of Tests (million) 12
Preventive Medicine Business lines performance Net Revenue (R$ million) Gross Revenue: 16.4% increase in 2Q12, amounting to R$ 6.6 million and representing 2% of the Group s Revenues. Net Revenue: 13.6% growth YoY. 13
Cost of Services 2Q12 As from 1Q12 on, Depreciation and Variable Pay Expenses related to Operations are allocated as Cost of Services Provided rather than SG&A. Labs D Or strategy is oriented towards higher dispersion of Imaging PSCs, which determines lower cost efficiency when compared to Fleury Group s historical preference for the one-stop-shop concept. Due to that, Labs estimated impact in the Group s Cost of Personnel and Medical Services (as % of Net Revenue) is 100 bps (which is compensated by lower expenses in SG&A as % of Net Revenue); 14
Gross Margin 2Q12 Gross Margin Breakdown 15
Operating Expenses General and Administrative Expenses (exc. Depreciation) amount to R$ 37.5 MM in 2Q12, representing 10% of Net Revenue (166 bps lower than 2Q11). Depreciation and Amortization increase to R$ 6.5 MM mainly due to the amortization of Rede D Or Hospitals contracts (R$ 3.9 MM per quarter). 16
EBITDA EBITDA margin of 21.9%, achieving R$ 81.7 million, a 58.5% increase compared to 2Q11. (R$ million) EBITDA and EBITDA margin 22.0% 21.9% 17
EBIT (Operating Profit) 31.1% growth, adding up to R$ 56.1 million. Profit margin represents 15.0% of net revenue. (R$ million) EBIT and EBIT Margin 18
Net Income $ 32.2 million in 2Q12. Profit margin represented 8.6% of Net Revenue in the quarter. EPS (earnings per share) of R$ 0.21 (R$ million) Net Income and Profit Margin 19
Capex Capital Expenditure added up to R$ 97 million in 6M12. The estimated Capex for the year is under revision and we expect an increase in this figure, which shall be between R$ 130 MM and R$ 155 MM. The final number will be confirmed closer to the end of the year. 20
Debt Position Debt Position Total (R$ MM) Next 12 months Bank Loans 120 88 Debentures 452 2 Acquisitions 45 19 Taxes 92 34 Total Debt 709 143 Cash & Equivalents 236 - Net Debt 473 - EBITDA (LTM) 257 - Net Debt / EBITDA (LTM) 1.85-21
Trade Working Capital Improvement Since the beginning of the year, the Group decided to adjust provision levels to reflect a potential increase in payment terms. As a result of this increase, coupled with the Cash Collection Programme, provision coverage for receivables due for more than 120 days was increased to 72%. The share of accounts receivables overdue by more than 120 days has reduced from 27% in 2Q11 to 16% in 2Q12. Account Receivable (R$ MM) 6/30/2012 12/31/2011 Trade receivables 368 328 Sales Deductions Provisions (43) (43) Total 325 285 Aging Acc. Receivable (R$ MM) 6/30/2012 12/31/2011 Current 216 176 Up to 120 days past due 93 62 121 to 360 days past due 45 69 Over 360 days past due 15 20 Coverage of receivables due over 120 days 6/30/2012 12/31/2011 72% 48% 22
Cash Flow Cash Flow 2Q12 (R$ MM) Net Income 32 Depreciation and amortization 26 Provisions 35 Working Capital (42) Others 24 Operational Cash Flow 74 Capex (36) Acquisitions (7) Financing Activities (47) Cash Flow (16) 23
Capital Market Shares and Market Cap - 06/30/2012 Number of Shares 156,293,356 +59.4% Free Float 36.1% Market Cap R$ 4.0 billion Closing Price R$ 25.50-20.8% Stock performance 2Q12 +5.8% LTM 12.2% Since IPO +59.4% Free Float breakdown Source: Fleury data, June 2012 Average Daily Trading Volume LTM 2Q12 R$ 4.7 mm R$ 3.9 mm 24
IR Schedule Upcoming events 2012 Events Aug 22 Aug 23 Sep 10-12 Sep 11-13 Sep 19-20 Sep 28 Nov 14-15 Nov 27-29 JP Morgan 6th Annual Brazil Retail & Healthcare Check Up São Paulo 2 nd Fleury Investor s Day São Paulo Morgan Stanley 15th Annual Morgan Stanley Latin America Conference London Merrill Lynch Global Healthcare Conference - London UBS Global Life Sciences Conference New York Latin Finance São Paulo Bradesco CEO Fórum Brasil 2013 Uma Visão de Líderes New York JP Morgan Brazil opportunities Conference São Paulo 25
26