1Q11 Results FLRY3 I BGC’s 2010 Corporate Governance award in the category for listed companies IBGC - Brazilian Institute of Corporate Governance “ The most valuable brand in the Brazilian healthcare industry The 6th most valuable brand among the service companies The 25th most valuable Brazilian brand ” Millward Brown / BrandAnalytics May, 2011 TODOS OS DIREITOS RESERVADOS – 2010
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 Fleury Group does not undertake any obligation to update them in light of new information or future developments. All figures are compared to 1Q2010 except when stated otherwise
Agenda 1Q11 Results Branding Project: New national brand 3
Highlights Gross Revenue increases by 13.6% to R$ 247 million . Organic growth achieves 13.3% PSC: + 10.8% ; growth of 4.2% per m 2 and 2.2K m 2 added on 1Q11 Operations in Hospitals: + 51.7% ; Hospital A.C. Camargo as of March 5 th Preventive Medicine: + 38.2% Gross Margin improves by 223 bps EBITDA grows by 12.7% to R$ 50.6 million . Margin on Net Revenue of 21.9% Net income grows by 17.1% to R$ 27.4 million , 11.9% margin on net revenue New Integrated Medical Centers 4
Performance (R$ million) Gross Revenue Net Income EBITDA 5
Gross Revenue 1Q11 Gross revenue grew by 13.6% adding up to R$ 247 million Organic growth achieved 13.3% Number of patients grew by 5.2% Strategy of differentiation, satisfying demands from new and existing clients for Integrated Solutions Innovation in tests, procedures and services New Integrated Medical Centers ¹ Clinical Trials and Fleury Day Hospital. 6
Gross Revenue 1Q11 Breakdown Gross Revenue: R$ 247 million Growth 1Q11 vs 1Q10: R$ 29.6 MM | 13.6% R$ 20.0 MM | 10.8% R$ 9.2 MM | 51.7% R$ -0.0 MM | -0.4% R$ 1.3 MM | 38.2% R$ -0.8 MM | -52.4% ¹ Clinical Trials and Fleury Day Hospital. By type of test (%) 7
Patient Service Center Business lines performance 10.8% increase in gross revenue , amounting R$ 206 million “Same store sales” grew by 11% Average revenue per PSC grew by 12% Average revenue per PSC (R$ million) Gross Revenue and Number of tests Number of PSCs 8
Patient Service Center Business lines performance Average revenue per square meter and total square meters Average revenue per square meter grew by 4.2% Total area achieved 56.7k m², after the addition of 2.2k m² Addition of services in different PSCs Schedule of new net square meters addition in 2011: 1Q11: 2.2 k 2Q11: 1.9 k 3Q11: 2.5 k 4Q11: 7.9 k New PSC in Recife - Pernambuco 9
Diagnostic Operations in Hospitals Business lines performance 51.7% increase , achieving R$ 26.9 million 10.9% share in Fleury Group’s Revenue Gross Revenue and Number of tests Number of tests performed expanded by more than 40% Started to operate in March inside Hospital A.C Camargo (Hospital do Câncer) The acquisition of “DI” increased the scope of alliance with Hospital Alemão Oswaldo Cruz 10
Lab-to-Lab and Clinical Trials Business lines performance Lab-to-lab reached R$ 8.2 million, similar to 1Q10 Expansion of high complex tests – better returns Progressive discontinuation of the Clinical Trials business R$ 1.4 million on 1Q10 to R$ 0.7 million in the 1Q11 Gross Revenue and Number of tests 11
Preventive Medicine Business lines performance Gross Revenue (R$ million) 38.2% increase, amounting to R$ 4.8 million and representing 1.9% of the Group’s revenues Chronic Disease Management (GDC) service reached 33k lives under contract; Revenues amounted to R$ 1.0 million Health Assessment revenue increased by 24%, with a 17% growth in the number of assessments. Health Promotion increased more than 30% GDC Lives under contract (thousand) 12 12 12 12
Cost of Services 1Q11 1Q10 (%NR) 4Q10 Adjusted Adjusted R$ mm % NR Reported criterion¹ criterion¹ Personnel and medical services 69.3 30.1% 30.9% 28.4% 33.9% 26.1 Materials and Outsourcing 11.3% 12.6% 12.3% 11.6% General services, Rent and Utilities 30.6 13.3% 12.6% 11.9% 12.5% General Expenses 15.3 6.6% 7.5% 5.2% 8.2% Total 141.2 61.3% 63.5% 57.8% 66.2% ¹ Change in allocation criterion implemented in 1Q11, operational back-office costs were formerly allocated in SGA 13 13
Gross Margin Gross profit has reached R$ 89.3 million , a 19.9% increase over adjusted 1Q10 38.7% of Net Revenue ( 223 bps increase ) Benefit in the margin by event, normalizing allocation criteria (%) 42,2% +55 bps 38,7% +71 bps +97 bps 36,5% -569 bps 1Q10 Gross Allocation 1Q10 Adjusted Fixed cost Mix Cost < Price 1Q11 Gross Profit Mg. Criterion Gross Mg. dilution improvement Profit Mg. 14 14
Operating Expenses 1Q11 1Q10 (%NR) 4Q10 Adjusted Adjusted R$ mm % NR Reported criterion¹ criterion¹ General and administrative 34.1 14.8% 11.7% 17.4% 13.8% Other operating expenses (revenue), net 2.9 1.3% 2.9% 2.9% (1.6%) Contingency provision 1.7 0.7% (0.1%) (0.1%) 1.7% Operating Expenses (ex-depreciation) 38.7 16.8% 14.5% 20.2% 13.9% Increase of 230 basis points, mainly caused by: Pre-operational expenses related to the expansion plan, write-off of tax assets and expenses related to the acquisition of Diagnoson and Labs D’Or 225 bps are non-recurring Depreciation - R$ 9.3 million, compared to R$ 8.2 million in 1Q10 ¹ Change in allocation criterion implemented in 1Q11, operational back-office costs were formerly allocated in SGA 15 15
Income Tax and Social Contribution 1Q11 Income Tax and Social Contribution Reconciliation 1- Other: Non Recurring Provisions, Assets Write-offs, Equity in Subsidiaries 16 16
Net Income 17.1% growth , adding up to R$ 27.4 million Profit margin represented 11.9% of net revenue EPS (earnings per share) of R$ 0.21 (R$ 0.18 in 1Q10) Net Income and Profit Margin (R$ million) 4.6% 6.2% 10.9% 15.0% 11.5% 11.9% 17 17
EBITDA EBITDA margin of 21.9%, similar to 1Q10, an 12.7% increase, achieving R$ 50.6 million 1Q11 1Q10 Var. R$ mm % NR R$ mm % NR Net Income 27.4 11.9% 23.4 11.5% 41 bps Financial Expenses (Income) (7.2) (3.1%) (3.7) (1.8%) -130 bps Depreciation and amortization 9.3 4.0% 8.2 4.0% 0 bps Income Tax and Social Contribution 21.1 9.2% 17.0 8.3% 83 bps EBITDA 50.6 21.9% 44.8 22.0% -6 bps EBITDA and EBITDA margin on net revenue (R$ million) 17.9% 22.9% 23.3% 23.1% 22.0% 21.9% 18
Business Segment Analysis 1Q11 1Q10 Diagnostic Integrated Diagnostic Integrated Medicine ¹ Medicine ² Medicine ¹ Medicine ² Gross Revenue (R$ million) 206.2 40.6 186.2 31.0 Net Revenue (R$ million) 192.5 38.0 175.2 28.7 EBITDA (R$ million) 46.2 4.4 42.1 2.7 EBITDA margin 24.0% 11.5% 24.0% 9.6% 1- Diagnostic Medicine (MD): PSCs business line 2- Integrated Medicine (MI): Diagnostic Operation in Hospitals, Lab-to-Lab and Preventive Medicine 19
Cash Flow, Investments and Return Capital Expenditure added up to Cash Flow 1Q10 R$ MM R$ 22.6 million Op. Cash Flow 30.9 CAPEX Breakdown 1Q11 Investing Activities (23.5) Financing Activities (8.4) Net Cash Flow (1.1) R$ 22.6 million Return % ROIC 1 (LTM) 19.9% (1) Calculated by dividing (a) earning before interest and taxes minus taxes, by (b) average equity plus average net debt, including obligations related to acquisitions 20 20
Debt and Account Receivable Debt Position Total (R$ Next Account Receivable 03/31/2011 12/31/2010 MM) 12m Trade receivables 251 234 Loans 78 24 Other receivables 4 2 Acquisitions 30 7 Bad debt (31) (33) Taxes 74 13 Total 224 203 Total Debt 182 44 Aging Acc. Receivable 03/31/2011 12/31/2010 Current 141 108 Cash and Equivalents 542 Up to 60 days past due 21 36 Loans / Equity 10.9% 60 to 120 days past due 12 12 Loans / EBITDA 37.8% Over 120 days past due 77 78 21
Capital Market Shares and Market Cap - 03/31/2011 +51.6% Shares Outstanding 131,298,550 Free Float 37.2% Market Cap R$ 3.2 billion Close R$ 24.25 -0.1% Stock performance 1Q11 -9.0% 4Q10 +26.9% FY10 +44.9% Since IPO +51.6% Free Float breakdown Source: Fleury data, Mar 2011 Average Daily Trading Volume 1Q11 R$ 5.0 mm 4Q10 R$ 3.9 mm FY10 R$ 3.3 mm 22 22
IR Schedule – Upcoming events 2011 Events Jun 6-7 Non-Deal Roadshow Singapure and Hong Kong Goldman Sachs - Annual Global Healthcare Conference – California Jun 8-9 Citibank - 4th Annual Brazil Equity conference – Sao Paulo Jun 20-22 Aug 04 Release of 2Q11 Results Aug 05 2Q11 Results Conference Call 23
São Paulo, maio de 2011 TODOS OS DIREITOS RESERVADOS – 2010
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