earnings release 4q08

22
Net Revenues (in R$Million) EBITDA (in R$Million) São Paulo, April 6, 2009 – Tempo Participações S.A. (Bovespa: TEMP3; Reuters: TEMP3.SA; Bloomberg: TEMP3 BZ), a leading provider of healthcare administration, dental benefit plans and assistance services, announces today its results for 4Q08. The operational and financial information contained herein, except where otherwise indicated, is presented in Brazilian Reais and in accordance with accounting practices adopted in Brazil including the guidelines of the Brazilian Stock Exchange Commission (CVM). Highlights Tempo announces a 28% YoY growth in Net Revenues & 20% YoY growth in EBITDA FY07A FY08A 572,8 731,9 27,8% FY07A FY08A 55,0 65,9 19,7% Capital Stock (12/31/09) 162.576.788 CS R$Million 4Q07A 4Q08A Var.% FY07A FY08A Var.% Net Revenues 168,3 213,0 26,6% 572,8 731,9 27,8% Adjusted EBITDA 23,3 15,1 -35,2% 55,0 65,9 19,7% Adjusted EBITDA Margin 13,9% 7,1% -6,8 p.p. 9,6% 9,0% -0,6 p.p. -0,6 p.p. Note 1: The EBITDA mentioned in this report excludes the effect of non recurring expenses. Note 2: The Net Earnings mentioned in this report excludes non recurring expenses and goodwill amortization, net of tax effects. Note 3: The figures in this table do not include pro-forma results from acquisitions made in the Dental segment in 2008 and not yet approved by regulatory agency. Note: Due to the Company´s IPO in 2007, the 4Q07 presented better than usual results. Therefore, 4Q07x4Q08 comparison is negatively impacted. For a better view of the business a YoY comparison should be considered. Highlights » CEO Change: As of 04/01/2009, Carlos Formigari will be the new CEO for Tempo Participações. José Bonchristiano leaves his current position to become Co-President of the Board of Directors along with Dimas Maia, who is the current president of the Board. Mr. Formigari comes from a 9-year career at Unibanco as General Director of Unicard, Unibanco´s credit card company. » Stock Buyback Program: Tempo concluded its first stock buyback program in the 4Q08. The total amount of shares purchased were 8.168.500, which totals a R$ 22.2Million investment. Following the conclusion of the first buyback program, Tempo initiated its second buyback program on November 27, 2008, allowing it to buy up to 10% of the current Free Float during the preceding 365 days. As of March 31, 2009, Tempo purchased 2.2 Million shares. » SAP: In December of 2008, Tempo decided to implement SAP software. The implementation is currently taking place and should be concluded by 3Q09. 162.576.788 CS 46,1% Free Float Net Cash (12/31/2008) R$237M Conference Call 4Q08 Portuguese Date: 04/07/2009 Time: 09h00 (08h00 NY) Phone: +55 (11) 4688-8114 English Date: 04/07/2009 Time: 10:30 (09h30 NY) Phone: +1 (571) 527-1024 IR Contacts Phone: +55 (11) 4208-8025 [email protected] 1

Upload: tempo-participacoes

Post on 13-May-2015

228 views

Category:

Business


1 download

TRANSCRIPT

Page 1: Earnings Release 4Q08

Net Revenues (in R$Million) EBITDA (in R$Million)

São Paulo, April 6, 2009 – Tempo Participações S.A. (Bovespa: TEMP3; Reuters: TEMP3.SA; Bloomberg: TEMP3 BZ), a leading

provider of healthcare administration, dental benefit plans and assistance services, announces today its results for 4Q08. The

operational and financial information contained herein, except where otherwise indicated, is presented in Brazilian Reais and in

accordance with accounting practices adopted in Brazil including the guidelines of the Brazilian Stock Exchange Commission (CVM).

Highlights

Tempo announces a 28% YoY growth in

Net Revenues & 20% YoY growth in EBITDA

FY07A FY08A

572,8 731,9

27,8%

FY07A FY08A

55,0 65,9

19,7%

Capital Stock (12/31/09)162.576.788 CS

R$Million 4Q07A 4Q08A Var.% FY07A FY08A Var.%

Net Revenues 168,3 213,0 26,6% 572,8 731,9 27,8%

Adjusted EBITDA 23,3 15,1 -35,2% 55,0 65,9 19,7%

Adjusted EBITDA Margin 13,9% 7,1% -6,8 p.p. 9,6% 9,0% -0,6 p.p. -0,6 p.p.

Note 1: The EBITDA mentioned in this report excludes the effect of non recurring expenses.

Note 2: The Net Earnings mentioned in this report excludes non recurring expenses and goodwill amortization, net of tax effects.

Note 3: The figures in this table do not include pro-forma results from acquisitions made in the Dental segment in 2008 and not yet approved by regulatory agency.

Note: Due to the Company´s IPO in 2007, the 4Q07 presented better than usual results. Therefore, 4Q07x4Q08 comparison is negatively

impacted. For a better view of the business a YoY comparison should be considered.

Highlights

» CEO Change: As of 04/01/2009, Carlos Formigari will be the new CEO for Tempo

Participações. José Bonchristiano leaves his current position to become Co-President of the

Board of Directors along with Dimas Maia, who is the current president of the Board. Mr.

Formigari comes from a 9-year career at Unibanco as General Director of Unicard, Unibanco´s

credit card company.

» Stock Buyback Program: Tempo concluded its first stock buyback program in the 4Q08. The

total amount of shares purchased were 8.168.500, which totals a R$ 22.2Million investment.

Following the conclusion of the first buyback program, Tempo initiated its second buyback

program on November 27, 2008, allowing it to buy up to 10% of the current Free Float during

the preceding 365 days. As of March 31, 2009, Tempo purchased 2.2 Million shares.

» SAP: In December of 2008, Tempo decided to implement SAP software. The implementation is

currently taking place and should be concluded by 3Q09.

162.576.788 CS46,1% Free Float

Net Cash (12/31/2008)R$237M

Conference Call 4Q08PortugueseDate: 04/07/2009Time: 09h00 (08h00 NY) Phone: +55 (11) 4688-8114

EnglishDate: 04/07/2009Time: 10:30 (09h30 NY) Phone: +1 (571) 527-1024

IR ContactsPhone: +55 (11) [email protected]

1

Page 2: Earnings Release 4Q08

About TEMPO

» Tempo Participações S.A. is a leading provider of healthcare administration services, dental benefit plans and specialized assistance

services. Within the group, each business manages a fragmented network of more than 60,000 specialized service providers with

nationwide coverage. The Company benefits from cross-selling opportunities in its client base, which is comprised of: leading

insurance companies, HMOs, government entities and private corporations. Tempo benefits from economies of scale by using a

uniform operating platform and proprietary IT systems to manage its contact center, service provider network, and auditing/

» Tempo has a low risk business model (frequency risk only) with predictable and recurring revenue and strong operational leverage.

In addition, the Company enjoys major entry barriers, low level of fixed assets and strong cash flow generation (Asset Light).

uniform operating platform and proprietary IT systems to manage its contact center, service provider network, and auditing/

processing. The illustration below details the process:

2

Page 3: Earnings Release 4Q08

Coming from a year when the Company was created, four acquisitions and a record-time setting IPO,

2008 presented yet another challenging year for Tempo to continue persuing leadership in each

business segment.

In 2008 it was no different. Tempo continued to pursue efficient M&A activities while having solid

organic growth. Tempo acquired five companies and established a joint-venture. Most of the 2008

acquisitions propelled Tempo´s dental segment to become part of the major players in Brazil and the

fastatest growing dental company coming from 120k lives in January of 2007 and finishing the year

2008 with 833 thousand. As cause and effect pans out, these events also brought new challenges to

Tempo with integration and restructuring of the newly acquired companies and previous investments

from 2007.

With the global economic crisis that started during the second half of 2008, Tempo was forced to make

adjustments and deal with difficulties not foreseen in its forecast. The Company managed to keep

COMMENTS BY TEMPO´S MANAGEMENT

Barueri, April 6, 2009

Investor Relations

adjustments and deal with difficulties not foreseen in its forecast. The Company managed to keep

modest organic growth in its business segments due its unique business model that it less sensitive

than most, within its respective business segments, during such turbulent scenarios. Furthermore, it

gave the Company an opportunity to start focusing more attentively on internal efficiencies and less on

market consolidation. On October of 2008, the Board of Directors approved the first stock buyback

program. Given the economic mood and Tempo´s long tradition of acquisitions, the stock buyback

program was, and still is, an attractive alternative that ultimately adds value to our shareholders. With

the goal to promote internal efficiencies, in December of 2008, Tempo decided to implement SAP as its

ERP. The program will encompass all business segments and the heart of the company – back office, by

consolidating all acquired companies into a solid platform.

Due to acquisitions in 2008 and changes in Brazilian Corporate Law (“Corporate Law”) somehow

equivalent to IFRS accounting rules (Law 6,404/76, as amended by Law 11,638/07 and Executive

Decree 449/08), Tempo took measures to improve its accounting processes and to comply with the

new law. Our financial statements are in accordance with generally accepted accounting standards in

Brazil, pursuant to Corporate Law and the rules of the Brazilian Securities and Exchange Commission

(CVM). As explained throughout this release, the changes in reporting are non-recurring events which

do not reflect losses in sales and/or productivity during 4Q08.

3

Page 4: Earnings Release 4Q08

R$Million 4Q07A 4Q08A Var.%

Health Dental Assistance Tempo Health Dental Assistance Tempo Tempo

Net Revenues 102,8 5,6 59,9 168,3 122,6 24,7 65,7 213,0 26,6%

Cost of Rendered Services 82,2 3,1 34,0 119,3 94,9 12,2 42,1 149,3 25,2%

Adjusted EBITDA 13,7 3,6 6,1 23,3 6,2 3,9 5,0 15,1 -35,2%

Adjusted EBITDA Margin 13,3% 64,7% 10,1% 13,9% 5,1% 15,6% 7,7% 7,1% -6,8 p.p.

40,6% 16,3% 43,1%

R$Million FY/07A FY/08A Var.%

Health Dental Assistance Tempo Health Dental Assistance Tempo Tempo

Net Revenues 321,3 21,6 229,9 572,8 429,5 56,7 245,8 731,9 27,8%

Cost of Rendered Services 257,9 11,4 124,4 393,7 334,9 27,6 146,4 508,8 29,3%

Adjusted EBITDA 22,5 5,7 26,8 55,0 26,8 10,7 28,4 65,9 19,7%

Adjusted EBITDA Margin 7,0% 26,4% 11,7% 9,6% 6,2% 18,9% 11,6% 9,0% -0,6 p.p.

Operational Performance

SUMMARY OF TEMPO´S RESULTS BY SEGMENT

Note: Values do not include Pro-Forma

Adjusted EBITDA Margin 7,0% 26,4% 11,7% 9,6% 6,2% 18,9% 11,6% 9,0% -0,6 p.p.

-54,4%

R$Million 4Q07A 4Q08A Var.% FY07A FY08A Var.%

Beneficiaries (in Millions) 1,30 1,38 6,2% 1,30 1,38 6,2%

Net Revenues 102,8 122,6 19,3% 321,3 429,5 33,7%

Cost of Rendered Services 82,2 94,9 15,5% 257,9 334,9 29,9%

Selling, General & Administrative Expenses 6,9 21,4 208,5% 41,0 67,8 65,5%

Adjusted EBITDA 13,7 6,2 -54,4% 22,5 26,8 19,1%

Adjusted EBITDA Margin 13,3% 5,1% - 8,2 p.p. 7,0% 6,2% - 0,8 p.p.

HEALTH SEGMENT

Note: Due to the Company´s IPO in 2007, the 4Q07 presented better than usual results. Therefore, 4Q07x4Q08 comparison is negatively

impacted. For a better view of the business a YoY comparison should be considered.

Highlights

» New Clients & Renewal: Gama Saúde continues to be a major player in the TPA services for the public sector. Two new clients

joined Tempo´s Health Segment: Tribunal Superior do Trabalho and Infraero, which are both public entities. Also, Tempo renewed its

contract with SABESP for four more years, through a public bid;

» Beneficiaries: The number of lives increased by 6,2% YoY;

Note: Cost of rendered services represents medical cost passed through to Tempo’s clients along with HomeCare costs.

Note: Values do not include Pro-Forma

» Net Revenues: Posted a 33,7% YoY increase with strong influence from the HomeCare division.

4

Page 5: Earnings Release 4Q08

2004 2005 2006 2007 2008

0,43 0,73 1,06 1,30 1,38

33,8%

Operational Performance

Beneficiaries - Lives Covered

» In the past 12 months, Gama Saúde experienced a 6,2% growth in number of

lives covered. This growth was fueled by the capture of new clients as well as a

modest growth in existing client base.

» These numbers do not include beneficiaries covered under the HomeCare

division.

4Q07A 4Q08A

1,30

1,38

6,2%

(In Millions)

0,43 0,73

1,06 1,30 1,38

33,8%CAGR

4Q07 4Q08 FY07 FY08

HomeCare 0,0 0,0 0,0 0,0

Gama Saúde 0,0 0,0 0,0 0,0

2004 2005 2006 2007 2008

154,2 214,5 262,8 321,3 429,5

29,2%

Adjustments to Net Revenues (in R$Millions) 4T08 FY/08

Reported Net Revenues 117,0 423,9

NPV Adjustments* - 3,0

Retroactive Taxes Adjustment (5,0) 2,6

Adjusted Net Revenues 122,6 429,5

Net Revenues

» In the Health Segment, Renenues are calculated by combining: 1.) Gama Saúde´s

fees for TPA services; 2.) Gama Saúde´s Pass-Through; 3.) Revenues from

HomeCare service.

» Net Revenues presented a strong growth of 33,7% YoY and a 19,3% growth

QoQ. The Health Segment showed consistent client retention and also a

conservative growth in its client base. The consolidation of HomeCare division has

also been a strong driver for the Health Segment in 2008 by contributing 16,4% of

the top-line growth.

FY07 FY08

321,3 429,5

33,7%

4Q07 4Q08

102,8

122,6

19,3%

(In R$Million)

2004 2005 2006 2007 2008

2004 2005 2006 2007 2008

154,2 214,5 262,8

321,3 429,5

29,2%CAGR

* Ajustments made reflecting Law 6,404/76, as amended by Law 11,638/07 and Executive Decree 449/08

5

Page 6: Earnings Release 4Q08

Adjustments to Costs of Rendered Services (R$Million) 4Q08 FY/08

Operational Performance

Cost of Rendered Services

» Cost of Rendered Services include Pass-Through costs incurred in Gama Saúde´s PPO network and costs associated with

the HomeCare business. However, these costs incurred by Gama Saúde’s network of service providers cannot be

considered loss ratio (MLR) as the Company underwrites no medical risk. Fees are charged based on fixed price per life,

regardless of cost variances in medical expenses (which are passed on to clients).

» Overall, when comparing YoY, it should be noted that Tempo´s HomeCare unit was only acquired and running jointly

with the business segment starting October 2007.

4Q07A 4Q08A

82,2

94,9

15,5%

FY07A FY08A

257,9 334,9

29,9%

(In R$Million)

Adjustments to Costs of Rendered Services (R$Million) 4Q08 FY/08

Reported Costs of Rendered Services 92,7 332,7

NPV Ajustments to Costs of Rendered Services* 2,3 2,3

Adjusted Costs of Rendered Services 94,9 334,9

* Ajustments made reflecting Law 6,404/76, as amended by Law 11,638/07 and Executive Decree 449/08

9,0%

SG&A Adjustments (in R$Million) 4Q08 FY/08 17,5%

Reported SG&A 25,1 69,2

Integration & IPO Expenses - (0,9)

Shared Structure 5,0 8,1

Other Operating Results (8,7) (8,6)

Adjusted SG&A 21,4 67,8

12,8%

15,8%

Selling, General & Administrative Expenses

» Gama Saúde accumulated SG&A expenses of R$ 21,4Million for the

4Q08 and a R$ 67,8Million for teh year. Due to a different business

model, the HomeCare division contributed with a higher SG&A ratio than

Gama Saúde.

FY07A FY08A

41,0

67,8

12,8%15,8%

Margin (%)

(In R$Million)

4Q07A 4Q08A

6,9

21,4

9,0%17,5%

4Q07A 4Q08A

Margin (%)

6

Page 7: Earnings Release 4Q08

Operational Performance

Adjusted EBITDA

» The adjusted EBITDA for the fiscal year of 2008 had a strong growth of

19,1% YoY. However, on a QoQ analysis the Health segment showed a

significant decline, mostly due to 4Q07 results that accumulate results from

other 2007 quarters (as per accrual accounting rules). The HomeCare

division sparked a new momentum for the segment, later complemented by

the acquisition of Staff Builders, which contributed to a strong YoY EBITDA

growth.

7,0%6,2%

(In R$Million)

52,1%CAGR

4Q07A 4Q08A

13,7

6,2

-54,4%

13,3%

5,1%

Adjusted EBITDA Margin

2004 2005 2006 2007 2008

5,0 7,3 8,9 22,5 26,8

52,1%

FY07A FY08A

22,5 26,8

19,1%

Adjusted EBITDA Margin

2004 2005 2006 2007 2008

5,0 7,3 8,9

22,5 26,8

CAGR

7

Page 8: Earnings Release 4Q08

HEALTH SEGMENT 1T08 2T08 3T08 4T08 2008

Gross Revenues 98,6 101,8 114,9 122,7 437,9

Deductions (2,7) (2,8) (2,9) (5,6) (14,0)

Net Revenues 95,9 99,0 112,0 117,0 423,9

Costs of Rendered Services (73,5) (77,3) (89,2) (92,7) (332,7)

Net Profit 22,4 21,7 22,8 24,3 91,3

SG&A (13,9) (14,1) (16,1) (25,1) (69,2)

Depreciation & Amortization (1,6) (1,8) (0,6) 1,1 (3,0)

Financial Result (0,4) (0,2) (0,1) 0,2 (0,5)

Other Operating Results 0,0 (0,0) 0,1 (8,7) (8,6)

Income Tax & Social Contribution Expenses (2,8) (2,1) (3,7) (8,8) (17,5)

Impairment - - - (30,0) (30,0)

Net Income (Loss) 3,7 3,5 2,4 (47,1) (37,5)

Operational Performance

Reconciliation Between Net Profit & EBITDA

» The table below reconciles net earnings and EBITDA:

Net Income (Loss) 3,7 3,5 2,4 (47,1) (37,5)

Equity Income - - 1,4 4,3 5,7

Net Income (Loss) with Equity Income 3,7 3,5 3,8 (42,8) (31,8)

EBITDA

Net Income (Loss) with Equity Income 3,7 3,5 3,8 (42,8) (31,8)

Income Tax & Social Contribution Expenses 2,8 2,1 3,7 8,8 17,5

Other Operating Results (0,0) 0,0 (0,1) 8,7 8,6

Financial Result 0,4 0,2 0,1 (0,2) 0,5

Depreciation & Amortization 1,6 1,8 0,6 (1,1) 3,0

Equity Income - - (1,4) (4,3) (5,7)

Impairment - - - 30,0 30,0

EBITDA 8,5 7,6 6,7 (0,8) 22,1

Non-Reoccuring Costs (1,9) 0,3 (0,7) 7,0 4,7

Integration & IPO Costs 0,2 0,3 0,4 - 0,9

Shared Structure Adjustments (2,1) - (1,0) (5,0) (8,1)

PVA Ajustments to Gross Revenues - - - 3,0 3,0

PVA Ajustments to Costs of Rendered Services - - - (2,3) (2,3)

Other Non Operating Results (0,0) 0,0 (0,1) 8,7 8,6

Tax Adjustments - - - 2,6 2,6

Adjusted EBITDA 6,6 8,0 6,0 6,2 26,8

8

Page 9: Earnings Release 4Q08

Net Revenue 56,7 26,4 83,1 21,6

Cost of Rendered Services 27,6 11,5 39,1 11,4

Loss Ratio (%) 46,4% 41,7% 44,2% 51,3%

Administrative Expenses 18,4 10,0 28,4 4,5

Adjusted EBITDA 10,7 4,9 15,6 5,7

Adjusted Margem EBITDA 18,9% 18,7% 18,8% 26,4% -7,6 p.p.

174,4%

-7,1 p.p.

531,3%

242,8%

Operational Performance

NOTE: In order to better present Tempo's operation in the Dental Segment, all figures in this section consolidates the acquisitions

made in 2008 since its acquisition dates rather than its ANS approval, when applicable. The table below indicates the reconciliation

between the Dental Segment reported results and Pro-Forma results.

Summary of Adjustments:

1. Fleming: 5 months Pro Forma in 2008 (Acquired in 05/2008 and approved by ANS in 10/2008);

2. OralTech: 4 months Pro Forma in 2008 (Acquired in 11/2007 and approved by ANS in 05/2008);

3. Prevdonto: 3 months Pro Forma in 2008 (Acquired in 06/2008 and approved by ANS in 10/2008);

4. Odonto Empresa: 3 months Pro Forma in 2008 (Acquired in 11/2007 and approved by ANS in 04/2008);

5. Presdental: 3 months Pro Forma in 2008 (Acquired in 09/2008 and pending ANS approval).

Reported Numbers

in 2008

Pro-Forma

AdjustmentsDental Pro-Forma (R$MM)

FY08

Pro-Forma

284,9%

VAR (%)FY07

Beneficiaries

» At the end of 2008, our Dental Segment had a strong growth of 75,4%

over the same period in 2007, surpassing 833 thousand lives. Dental

Segment´s strongest growth came from Affinity channels, which also had a

positive influence on the overall loss ratio. The combination of efficient

acquisitions and solid organic growth boosted Tempo´s revenues, placing

Tempo among the leading Dental players in Brazil.

» In the midst of acquisitions and integration, the Dental Segment had a

solid organic growth of 32% in 2008.

Note: Due to the Company´s IPO in 2007, the 4Q07 presented better than usual results. Therefore, 4Q07x4Q08 comparison is negatively

impacted. For a better view of the business a YoY comparison should be considered.

4Q07A 4Q08A - Pro Forma

0,48

0,83

75,4%

(In Millions)

58% 42%

Growth Breakdown - Dental Segment

43%32%

Profile of the Growth - Dental Segment

Acquisitions 2008 Organic Growth Growth Through Acquisitions Organic Growth

9

Page 10: Earnings Release 4Q08

Beneficiaries (in Millions) 0,48 0,83 75,4% 0,48 0,83 75,4%

Net Revenues 5,6 25,8 362,7% 21,6 83,1 284,9%

Cost of Rendered Services 3,1 13,8 348,8% 11,4 39,1 242,8%

Loss Ratio (MLR %) 53,3% 51,2% -2,1p.p. 51,3% 44,2% -7,1p.p.

SG&A 0,7 8,6 1146,7% 4,5 28,4 531,3%

Adjusted EBITDA 1,8 3,4 85,7% 5,7 15,6 174,4%

Adjusted Margem EBITDA 32,4% 13,0% -19,4 p.p. 26,4% 18,8% -7,6 p.p.

12,4% 33,5% 20,8% 34,2%

Net Revenues

» At the end of 4Q08, Net Revenues reached R$ 25,4 Million representing a

355,3% growth from the same period in 2007. Year on Year, this growth was

expressed at 287,2% reaching R$ 83,6 Million for the fiscal year of 2008. This

growth was influenced by strong M&A activity and solid organic growth in number

of lives.

Var.%

Operational Performance

FY08A - Pro

FormaR$Million 4Q07A

4Q08A - Pro

FormaVar.% FY07A

25,8

362,7%

(In R$Million)

### 2005 2006 2007 2008 Pro Forma

15 18,1 20,5 21,4 83,1

###

Adjustmentes to Net Revenues (R$Million) 4Q08 2008

Reported Net Revenues 21,9 53,9

NPV Ajustments* 0,8 0,8

Retroactive Tax Adjustments 2,0 2,0

Pro Forma Adjustments 1,0 26,4

Adjusted Net Revenues 25,8 83,1

* Adjustments made reflecting Law 6,404/76, as amended by Law 11,638/07 and Executive Decree 449/08

4Q07A 4Q08A - Pro Forma

5,6

FY07A FY08A - Pro Forma

21,6

83,1

284,9%

2004 2005 2006 2007 2008 Pro

Forma

15,1 18,1 20,5 21,4

83,1

53,2%CAGR

10

Page 11: Earnings Release 4Q08

Margin (%)

Loss Ratio (%)

4Q07 4Q08 FY07 FY08

53,3% 47,3% 51,3% 44,2%

Adjustments to Costs of Services Rendered (R$Millions) 4Q08 FY/08

Costs of Services Rendered

» Although the Dental segment went through a challenging year of acquisitions and integration, its Loss Ratio (MLR) showed

significant improvement QoQ and YoY with 6.0 p.p. and 4.9 p.p. decrease, respectively. A strong contributor was the Affinity

channels. The Dental segment now counts with seven strong Affinity partnerships such as: Ampla (Energy distributor in Rio de

Janeiro), Citi Credicard, Brasil Telecom (a major Brazilian telecommunications company) and Fininvest (Unibanco’s credit card

company).

Operational Performance

4Q07A 4Q08A - Pro Forma

53,3%47,3%

3,1

13,8

Loss Ratio (%)

FY07A FY08A - Pro Forma

11,4

39,1

51,3%44,2%

Loss Ratio (%)

(In R$Million)

Adjustments to Costs of Services Rendered (R$Millions) 4Q08 FY/08

Reported Cost of Services Rendered 12,2 27,6

NPV Ajustments* 0,0 0,0

Pro Forma Adjustments 1,6 11,5

Adjusted Cost of Services Rendered 13,8 39,1

* Ajustments made reflecting Law 6,404/76, as amended by Law 11,638/07 and Executive Decree 449/08

Adjustments to SG&A (in R$Millions) 4Q08 FY/08

Reported SG&A 10,0 19,7

Non-Operating Results 0,4 0,4

Shared Structure (1,7) (1,7)

Pro Forma Adjustments 0,0 10,0

Selling, General & Administrative Expenses

» M&A and organic growth in Dental during 2008 were fueled by SME and Affinity accounts, which carry significantly lower broker´s

commissions. Additionally, key infrastructure investments were made to support the integration.

4Q07A 4Q08A - Pro Forma

0,7

8,6

12,4%

33,5%

Margin (%)

(In R$Million)

FY07A FY08A - Pro Forma

4,5

28,4

20,8%34,2%

Margin (%)

Adjusted SG&A 8,6 28,4

11

Page 12: Earnings Release 4Q08

2004 2005 2006 2007 2008 Pro Forma

2,4 3,7 4,7 5,7 15,6

60%

Adjusted EBITDA

» EBITDA for the Dental Segment showed strong growth. On a QoQ

comparison, EBITDA grew by 179,5% and reached R$ 5,0 Million. When

comparing YoY, the company achieved an Adjusted EBITDA of R$18,3

Million, a 221,8% growth.Adjusted EBITDA Margin showed a slight

downturn, mainly due the strong M&A activities in the segment.

» Several factors positively impacted the result of the Segment, such as

Affinity channels and the reputable client base that came with the

acquisitions (noticeable in the case of Fleming and Prevdonto).4Q07A 4Q08A - Pro

Forma

1,8

3,4

85,7%

32,4%

13,0%

Adjusted Margem EBITDA

26,4%18,8%

(In R$Million)

60%

CAGR

FY07A FY08A - Pro Forma

5,7

15,6

174,4%

Adjusted Margem EBITDA

2004 2005 2006 2007 2008 Pro

Forma

2,43,7 4,7 5,7

15,6

12

Page 13: Earnings Release 4Q08

ODONTO 1T08 2T08 3T08 4T08 2008

Gross Revenues 5,6 11,7 16,2 25,1 58,5

Deductions (0,2) (0,5) (0,8) (3,2) (4,7)

Net Revenues 5,4 11,2 15,4 21,9 53,9

Costs of Rendered Services (2,6) (5,8) (6,9) (12,2) (27,5)

Net Profit 2,7 5,4 8,5 9,7 26,3

SG&A (1,7) (3,4) (6,3) (10,0) (21,4)

Depreciation & Amortization (1,7) (3,3) (4,6) 0,3 (9,3)

Financial Result 0,1 0,9 1,2 0,7 2,8

Non Operating Results (0,1) (0,0) 0,1 0,4 0,4

Income Tax & Social Contribution Expenses (0,2) (0,5) (2,0) (6,2) (8,9)

Impairment - - - (92,0) (92,0)

Net Income (Loss) (0,9) (0,9) (3,1) (97,1) (102,0)

Operational Performance

Reconciliation Between Net Profit & EBITDA

» The table below reconciles net earnings and EBITDA:

Net Income (Loss) (0,9) (0,9) (3,1) (97,1) (102,0)

Equity Income (0,4) (0,1) 1,0 (3,0) (2,5)

Net Income (Loss) with Equity Income (1,2) (1,0) (2,1) (100,1) (104,5)

EBITDA

Net Income (Loss) with Equity Income (1,2) (1,0) (2,1) (100,1) (104,5)

Income Tax & Social Contribution Expenses 0,2 0,5 2,0 6,2 8,9

Non Operating Results 0,1 0,0 (0,1) (0,4) (0,4)

Financial Result (0,1) (0,9) (1,2) (0,7) (2,8)

Depreciation & Amortization 1,7 3,3 4,6 (0,3) 9,3

Equity Income 0,4 0,1 (1,0) 3,0 2,5

Baixa por Impairment - - - 92,0 92,0

EBITDA 1,0 2,0 2,2 (0,3) 5,0

Non-Reoccuring Costs 0,3 0,5 0,9 4,1 5,7

Integration & IPO Costs 0,1 - - - 0,1

Aquisition Costs 0,1 - - - 0,1

NPVA - Gross Revenues - - - 0,8 0,8

NPVA - Cost of Rendered Services - - - (0,0) (0,0)

Technical Provisions (0,2) 0,5 0,7 - 1,0

Shared Structure Adjustments 0,2 - 0,3 1,7 2,2

Taxes adjustments - - - 2,0 2,0

Adjusted EBITDA 0,1 0,0 (0,1) (0,4) (0,4)

Adjusted EBITDA 1,3 2,6 3,0 3,9 10,7

13

Page 14: Earnings Release 4Q08

R$Million 4Q07A 4Q08A Var.% FY07A FY08A Var.%

Items (in Millions) 17,3 20,9 20,9% 17,3 20,9 20,9%

Adjusted Net Revenues 59,9 65,7 9,6% 229,9 245,8 6,9%

Adjusted Cost of Rendered Services 34,0 42,1 23,8% 124,4 146,4 17,6%

Loss Ratio (%) 50,4% 58,2% 7,8 p.p. 48,4% 53,5% 5,1 p.p.

Adjusted SG&A 23,2 18,5 -20,0% 90,6 71,0 -21,6%

Adjusted EBITDA 6,1 5,0 -17,0% 26,8 28,4 5,8%

Adjusted EBITDA Margin 10,1% 7,7% -2,5 p.p. 11,7% 11,6% -0,1 p.p.

38,7% 28,2% 39,4% 28,9%

Highlights

» New Clients & Renewals: Tempo had a relevant contract renewal with Tokio Marine for additional seven years. Moreover, two new

clients joined our base: Marítima and Confiança;

» Items: Number of Itens covered increase 20.9% YoY to 20.9 Million;

» Adjusted Net Revenues: QoQ had a solid performance with 9.6% growth and a moderate growth of 6.9% for YoY.

Operational Performance

2004 2005 2006 2007 2008

14,5 16,8 16,0 17,3 20,9

9,6%

» Adjusted Net Revenues: QoQ had a solid performance with 9.6% growth and a moderate growth of 6.9% for YoY.

Items

» At the end of 2008, the number of covered items in the Assistance

Segment amounted to 20.9 Million, representing a 20.9% growth over

the same period in 2007.

4Q07A 4Q08A

17,3

20,9

20,9%

(In Million)

2004 2005 2006 2007 2008

14,5 16,8 16,0 17,3

20,9

9,6%CAGR

14

Page 15: Earnings Release 4Q08

2004 2005 2006 2007 2008

151,0 178,7 206,8 229,9 245,8

13,0%

Operational Performance

Net Revenues

» The Assistance Segment had a solid growth of 9.6% QoQ amouting

R$65.7 Million. In 2008, Net Revenues grew by 6.9% to R$245.8

Million. Part of the growth is attributed to new clients such as Marítima

and Confiança.

4Q07A 4Q08A

59,9 65,7

9,6%

(In R$Million)

229,9 245,8

6,9%

151,0 178,7

206,8 229,9 245,8

13,0%CAGR

Adjustments to Net Revenues (R$Million) 4Q08 FY/08

Reported Net Revenues 58,1 238,2

NPV Ajustments* 1,8 1,8

CDN Adjustments** 6,5 6,5

Retroactive Tax Adjustments (0,7) (0,7)

Adjusted Net Revenues 65,7 245,8

* Ajustments made reflecting Law 6,404/76, as amended by Law 11,638/07 and Executive Decree 449/08

** Consists of costs incurred in USS as a result of services rendered to Consórcio Dia e Noite (Bradesco), which are eliminated in its

consolidated financials (in revenues and SG&A, thus not impacting the company’s results).

Costs of Services Rendered

» Following the trend of 2008, Cost of Rendered Services rose by R$8.1 Million QoQ and R$22 Million YoY, partially due

to increasing frequency. In 2008, additionally, USS also offered services of greater complexity which contributed to a

higher Loss Ratio.

FY07A FY08A

124,4

146,4

17,6%

4Q07A 4Q08A

34,0

42,1

23,8%

(In R$Million)

FY07A FY08A2004 2005 2006 2007 2008

15

Page 16: Earnings Release 4Q08

Adjustments to Costs of Rendered Services (R$Million) 4Q08 FY/08

Reported Costs of Rendered Services 43,9 148,2

NPV Ajustments to Costs of Rendered Services* 1,6 1,6

Provisions for Termination of Bradesco´s Contract (3,4) (3,4)

Adjusted Costs of Rendered Services 42,1 146,4

* Ajustments made reflecting Law 6,404/76, as amended by Law 11,638/07 and Executive Decree 449/08

1Q07 2Q07 3Q07 4Q07 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

50,4% 47,1% 45,9% 50,4% 52,1% 49,7% 53,5% 58,2%

Operational Performance

50,4%47,1% 45,9%

50,4%

52,1%49,7%

53,5%

58,2%

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

2007 2008

Assistance Segment - Loss Ratio (%)

Adjustments to SG&A (R$Million) 4Q08 FY/08

Reported SG&A 13,5 69,3

Other Operating Results 1,8 1,8

CDN Adjustments** (3,3) (6,6)

Non-Recurring Expenses 6,5 6,5

Adjusted SG&A 18,5 71,0

** Consists of costs incurred in USS as a result of services rendered to Consórcio Dia e Noite (Bradesco), which are

eliminated in its consolidated financials (in revenues and SG&A, thus not impacting the company’s results).

Selling, General & Administrative Expenses

» In 4Q08, USS continued to show significant decrease in SG&A of 20% and the YoY also showed a strong reduction of 22.6%

reduction, proving that USS is benefiting from economies of scale and synergies in shared structure.

2007 2008

4Q07A 4Q08A

23,2 18,5

-20,0%

38,7%28,2%

Série1

FY07A FY08A

90,6 71,0

-21,6%

39,4%

28,9%

Série1

(In R$Million)

16

Page 17: Earnings Release 4Q08

2004 2005 2006 2007 2008

6,6 19,2 24,0 26,8 28,4

44,0%

EBITDA

» Adjusted EBITDA for the Assistance Segment for the 4Q08 was R$5.0

Million. For the year, however, Adjusted EBITDA grew by 5.8% YoY

reaching a total of R$28.4 Million.

» Overall, the Assistance Segment has been able to keep a consistent

growth along the years, showing a CAGR of 44.0%.

Operational Performance

4Q07A 4Q08A

6,1 5,0

-17,0%

10,1%7,7%

Adjusted EBITDA Margin

(In R$Million)

5,8%

11,7% 11,6%

44,0%

CAGR

FY07A FY08A

26,8 28,4

Adjusted EBITDA Margin

2004 2005 2006 2007 2008

6,6

19,2 24,0

26,8 28,4

17

Page 18: Earnings Release 4Q08

ASSISTANCE SEGMENT 1T08 2T08 3T08 4T08 2008

Gross Revenues 66,3 65,5 69,4 64,1 265,2

Gross Revenues with CDN Adjustaments 66,3 65,5 69,4 70,7 271,8

Deductions (7,4) (6,6) (7,0) (6,0) (27,0)

Net Revenues 58,8 58,8 62,4 58,1 238,2

Net Revenues with CDN Adjustaments 58,8 58,8 62,4 64,7 244,7

Costs of Rendered Services (34,5) (32,6) (37,1) (43,9) (148,2)

Net Profit 24,3 26,3 25,3 14,2 90,0

SG&A (21,0) (17,8) (16,9) (13,5) (69,3)

SG&A with CDN Adjustaments (21,0) (17,8) (16,9) (20,1) (75,8)

Other Operating Results - - 0,0 1,8 1,8

Depreciation & Amortization (0,5) (0,5) (1,1) (1,8) (3,9)

Financial Result 0,1 0,4 0,0 1,2 1,7

Operational Performance

Reconciliation Between Net Profit & EBITDA

» The table below reconciles net earnings and EBITDA:

Financial Result 0,1 0,4 0,0 1,2 1,7

Income Tax & Social Contribution Expenses (1,0) (2,2) (3,0) (1,4) (7,6)

Net Income (Loss) 1,9 6,1 4,4 0,5 12,9

Equity Income - - - (0,0) (0,0)

Net Income (Loss) with Equity Income 1,9 6,1 4,4 0,5 12,9

EBITDA

Net Income (Loss) 1,9 6,1 4,4 0,5 12,9

Income Tax & Social Contribution Expenses 1,0 2,2 3,0 1,4 7,6

Financial Result (0,1) (0,4) (0,0) (1,2) (1,7)

Depreciation & Amortization 0,5 0,5 1,1 1,8 3,9

Equity Income - - - 0,0 0,0

Other Operating Results - - (0,0) (1,8) (1,8)

EBITDA 3,3 8,4 8,4 0,6 20,8

- - - - -

Non-Reoccuring Costs 2,3 0,1 0,9 4,4 7,6

Integration & IPO Costs 0,2 0,1 0,1 - 0,3

Aquisition Costs 0,4 0,0 - - 0,4

PVA Ajustments to Gross Revenues - - - 1,8 1,8

PVA Ajustments to Costs of Rendered Services - - - (1,6) (1,6)

Provisions for Termination of Bradesco´s Contract - - - 3,4 3,4

Shared Structure Adjustments 1,7 - 0,8 3,3 5,9

Other Non Operating Results - - (0,0) (1,8) (1,8)

Tax Adjustments - - - (0,7) (0,7)

Adjusted EBITDA 5,5 8,5 9,4 5,0 28,4

18

Page 19: Earnings Release 4Q08

Capex (R$ Million) FY/08

Software 3,2

IT Equipment 2,4

Buildings 0,1

Furniture & Equipment 0,2

Others 1,9

Total 7,9

» The graph below demonstrates CAPEX x EBITDA relationship at Tempo´s asset light model:

2005 2006 2007 2008

Operational Performance

CAPEX - Investments

» Maintaining its Asset Light model, Tempo ended the year OF 2008 with CAPEX at R$7,9MM representing 11% of Adjusted EBITDA. For

4Q08, only R$ 530k was CAPEX.

10,6%

9,3%

12,0%

12,0%

14,0%

70

80

90

2005 2006 2007 2008

EBITDA 30,2 37,6 55,0 65,9

CAPEX 2,5 4,0 5,1 7,9

% of EBITDA 8,3% 10,6% 9,3% 12,0%

Cash Position & Debt

» The company ended 4Q08 with a cash position at R$ 237 million. During 4Q08, Tempo had its first Stock Buyback Program that started

on October 20th, 2008, and ended on November 27th, 2008. The buyback was for up to 10% of the Free Float at that time. During this

period, Tempo invested R$ 22.2MM, purchasing 8.168.500 TEMP3 shares, which were cancelled following the termination of the

program.

30,237,6

55,065,9

2,5 4,0 5,17,9

8,3%9,3%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

0

10

20

30

40

50

60

70

2005 2006 2007 2008

EBITDA

CAPEX

% of EBITDA

19

Page 20: Earnings Release 4Q08

Health Segment R$k

Gross Revenue

Healthcare administration service expenses 70.088

Reimbursement of healthcare administration pass through expenses 279.428

Revenue from home and chronic assistance services 88.409

437.925

Deductions from gross service revenue (13.996)

Net Service Revenue 423.929

Pass Through (278.106)

Operational Performance

II - INCOME STATEMENT – Health Segment (in R$ thousands)

20

Pass Through (278.106)

Cost of home and chronic assitance services (54.558)

Gross Profit 91.265

Selling, general and administrative (69.208)

Depreciation and amortization (2.978)

Goodwill Amortization (3.275)

Equity Result 5.717

Financial result (488)

Non-operating result (8.602)

Impairment Deductions (30.034)

Income and Social Contribution taxes (14.189)

Net Income (Loss) (31.792)

20

Page 21: Earnings Release 4Q08

Dental Segment R$k

Gross Revenue

Dental effective premiums 58.539

Changes in risk provisions (109)

58.430

Deductions from gross service revenue (4.682)

Net Service Revenue 53.747

Dental benefit plan indeifiable events (26.614)

Changes in the provision for dental benefit (807)

Operational Performance

III - INCOME STATEMENT – Dental Segment (in R$ thousands)

21

Changes in the provision for dental benefit (807)

plan claims incurred but not reported - PEONA

Gross Profit 26.326

Selling, general and administrative (21.367)

Drepreciation and amortization (828)

Goodwill Amortization (8.476)

Financial result2.836

Equity Income (2.521)

Equity Result

Non-operating result 432

Income and Social Contribution taxes (8.902)

Impairment Deductions (92.002)

Net Income (loss) (104.500)

21

Page 22: Earnings Release 4Q08

Assistance Segment R$k

Gross Service Revenue

Assistance Services 259.009

Reinbursement of Assistance Services Expenses 6.233

265.242

Deductions from Gross Service Revenue (27.034)

Net Services Revenue 238.208

Assistance Service Expenses (148.173)

Operational Performance

IV- INCOME STATEMENT – Assistance Segment (in R$ thousands)

22

Assistance Service Expenses (148.173)

90.034

Gross Profit

Selling, general and Administrative Expenses (69.276)

Depreciation and Amortization (3.881)

Other Operational Revenues 1.830

Financial Result 1.735

Non operating Result -

Tax Benefit Amortization (8.706)

Defered Income and Social Contribution Taxes 1.138

Net Income (Loss) 12.875

22