3q08 earnings release presentation
TRANSCRIPT
Earnings release
3Q08November 14, 2008
Business segments
� Dental HMO
� Ranking: #4
� Number of lives: 751 thousand
� Assistance Services
� Ranking: #1
� Healthcare Administration Services
� Ranking: #1
� Number of lives: 1.38 million
2
Shared structure
Network management – Contact Center – Claims processing
� Number of lives: 751 thousand
� Underwriting of frequency risk
� Ranking: #1
� Number of items: 21.3 million
� Underwriting of frequency risk
� Number of lives: 1.38 million
� No underwriting risk. Fee business
only.
Recent events
ACQUISITION DENTAL – Today, November 13, 2008, Tempo announces an
acquisition of 55% stake of Presdental Assistência Odontológica Empresarial S.A.
(Presdental), a dental plan company offering services to approximately 35 thousand
beneficiaries. The acquisition of 6% is still subject to ANS approval (Brazilian Health
Regulatory Agency).
ACQUISITION HEALTH – On 08/31/2008, Tempo acquired 100% stake of Multicare
3
ACQUISITION HEALTH – On 08/31/2008, Tempo acquired 100% stake of Multicare
Consultoria e Administração de Recursos em Saúde (“Multicare”), with a total of
approximately 15 thousand lives. The acquisition of 51% is still subject to ANS
approval. Multicare provides health services to self-insured companies.
STOCK BUYBACK PROGRAM - Tempo announced that its Board of Directors approved
on 11/13/08 a Buyback program of common shares. The maximum number of
common shares on this Buyback program is of 8,276,702 and will last for 365 days.
FINANCIAL AND OPERATINGFINANCIAL AND OPERATING
PERFORMANCE
3T07A 3T08A
9,3%
9,9%
Margem EBITDA - Tempo ($RMM)
Tempo - Consolidaded
3Q07A 3Q08A
142,4
189,8
Net Revenue - Tempo (R$MM)
3T07A 3T08A
13,2
18,8
EBITDA - Tempo ($RMM)
EBITDA 3T07A 3T08A
Margem EBITDA
5
NET REVENUES
Net Revenue grew 33.3% in 3Q08
versus the same period of the
previous year, reaching a total of R$
189.8 million.
EBITDA
Economies of scale and synergies
continue to boost margins
EBITDA Margin
M & A Transactions during 08 and
synergies
Net Revenue
EBITDA
Health segment
3Q07A 3Q08A
78,2
112,0
Net Revenue (in R$MM)
3Q07A 3Q08A
12,6
16,7
General and Administrative Expenses (in R$MM)
16.1%14.9%
2,8
6,1
3.6%
5.4%
Adjusted EBITDA (in R$MM)
6
REVENUES
Revenue growth driven by lives
increase and Home Care acquisition.
Growth for 3Q08 came to R$
33.8MM
SG&A
Health segment accumulated a
total of R$ 16.7 MM in SG&A
expenses during the 3Q08, which
was R$ 4,1 million above 3Q07.
Despite the increase in
expenses, Health segment growth in
this period generated economies of
scale, improving the business margin
3Q07A 3Q08A
Net Revenue
3Q07A 3Q08AGeneral and Administrative Expenses 3Q07A 3Q08A
EBITDA
EBITDA powered by growth and
M&A
Dental segment: 2008 pro forma results
5,4
24,0
Net Revenue (in R$MM)
2,7
10,8
Cost of Rendered Services (in R$MM)
43.1%50.2%
1,1
5,2
20,4%
21,8%
EBITDA (in R$MM)
7
REVENUES
Strong top line growth powered by
M&A and solid organic growth
EBITDA
Continues EBITDA margin expansion
All figures in this slide take into consideration the acquisitions made in 2007 and consolidated into the Company's financials starting
January 1st, 2008 even though they were waiting for approval by ANS.
LOSS RATIO
Significant improvement in loss ratio
3Q07A 3Q08A 3Q07A 3Q08A3Q07A 3Q08A
Strong combination between organic and M&A
growth
45%29%
26%
Growth Breakdown - Dental Segment
93%
23%
Growth by Acquisition Organic Growth
8
M&A GROWTH
Odonto Empresa: 220k
OralTech: 30k
Fleming: 35k
Prevdonto: 130k
ORGANIC GROWTH
Organic growth accelerating retail
sales channel
Acquisitions 2007 Acquisitions 2008 Organic Growth
Growth by Acquisition Organic Growth
23%
Assistance Services segment
3Q07A 3Q08A
58,8
62,4
Net Revenue (in R$MM)
50,4%
47,1%
45,9%
50,4%
52,1%
49,7%
53,5%
Loss Ratio - Assistance (%)
9
REVENUE
In 3Q08 the Net Revenues for the
Assistance Segment reached R$ 62,4
million, which represents a 6,2 %
growth compared to 3Q07. The
growth in net revenue occurred
essentially due to the increase in the
number of covered items, mainly in
personal assistance product, which
has a lower average ticket than USS
average.
LOSS RATIO CURVE
Part of this growth refers to the
increase in the frequency of
utilization that the company
experienced.
Additionally, in 2008, USS offered
assistances of greater
complexity, which consequently
have a higher average cost
3Q07A 3Q08ANet Revenue 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
2007 2008
Assistance Services segment
19,4
15,9
General and Administrative Expenses (in R$MM)
33.0%
25.4%
9,3 9,4
1,6%
EBITDA (in R$MM)
10
SG&A and EBITDA
Economies of scale and synergies sustaining EBITDA expansion
3Q07A 3Q08A
15,9
General and Administrative Expenses3Q07A 3Q08A
9,3
Asset Light Operation
Capex (R$ MM) YTD/08
Software 2,9
IT Equipments 2,0
Buildings 0,0
Furniture &
Equipment 0,0
Other 1,6
Total 7,3
11
30,237,6
55,051,1
2,5 4,0 5,1 7,3
8%11% 9%
14%
2005 2006 2007 YTD/08
Capex vs EBITDA (in R$MM)
EBITDA
CAPEX
%
