earnings results 2q14 - presentation

8/12/2019 Earnings Results 2Q14 - Presentation

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Dickson Esteves Tangerino

CEOOctvio Fernandes

VP of OperationsAntnio Carlos Gaeta

VP of BusinessMrcio Fernandes

Paulo BokelIR and Finance Officer

[email protected].: (011) 4197-5410Fax: (011) 4197-5516

www.dasa3.com.br

TELECONFERENCES

Portuguese

Date: 08/12/2014Time: 10h00 (Braslia)

Tel.: 11 2188-0155Password: DASA

EnglishDate: 08/12/2014

Time: 12h00 (Braslia)Phone.: 1 (412) 317-6776

Password: DASA

DASA ON

Bovespa: DASA3Most recent quotation:

08/11/2014: R$14,87

Average daily trade volume2Q14:

R$ 1.7 milllionMarket value

R$ 4.6 billionUS$ 2.0 biillion

Free Float: 25.3%

2222nd QUARTER RESULTSQUARTER RESULTSQUARTER RESULTSQUARTER RESULTS

2014201420142014

Gross Revenue 2Q14 grows 6.5%Gross Revenue 2Q14 reaches 743.8 MM

EBITDA Margin 2Q14 of 16.7%


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DISCLAIMERDISCLAIMERDISCLAIMERDISCLAIMER

This document contains forward looking statements that can be identified by words like hope, plan,expect, believe, seek, estimate and similar words. The information in this presentationregarding forward looking statements of the Company, including business prospects, and operating,financial, and growth projections are only predictions based on management expectations regardingfuture performance. These estimates are highly dependent on the performance of the Brazilianeconomy, industry and international market conditions. Therefore, they are subject to change.


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HIGHLIGHTSHIGHLIGHTSHIGHLIGHTSHIGHLIGHTS AND RECENTAND RECENTAND RECENTAND RECENT FACTSFACTSFACTSFACTSGROWTHGROWTHGROWTHGROWTH

GROSS REVENUE reached R$ 743.8 million in 2Q14 (+6.5%) STRONG growth in OUTPATIENT (+7.8%) and LAB TO LAB (+10.8%) 5 LESS BUSINESS DAY (7.9%) than 2Q13, which 3 were Brazil national team game 8 PSCs REMODELING delivered in 2Q14, 16 in progress , 7 new units, 4 new resonances and 1

tomography

QUALITYQUALITYQUALITYQUALITY

DASA lecturers at the MAIN RADIOLOGY EVENTS WORLDWIDE (Jornada Paulista deRadiologia, Magneton World, International Society of Magnetic Resonance in Medicine, AmericanSociety of Neuroradiology)

So Paulo Lab wasRECERTIFIED

by the College of American Pathologists (CAP) Conclusion of the NEW PATHOLOGICAL ANATOMY AREA in the So Paulo Lab RENOVATION OF THE TECHNOLOGICAL PARK of Analytical Chemistry and Toxicology (mass

spectrometer), and molecular biology (next generation sequencing). Conclusion of the first phase of the FULL AUTOMATION in the Federal District

48% OF BRAZILIANS PAPERS and 5% of all papers presented in AACC, reinforceDASAs position of excellence in the medical world RETURN FOR THE SHAREHOLDERRETURN FOR THE SHAREHOLDERRETURN FOR THE SHAREHOLDERRETURN FOR THE SHAREHOLDER

EBITDA of R$115.0 million in 2Q14, 3.8% more than 2Q13, reaching a margin of 16.7% OPERATING CASH FLOW of R$86.6 million in 2Q14

CASH NET INCOME of R$38.3 million in 2Q14


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GROSS REVENUEGROSS REVENUEGROSS REVENUEGROSS REVENUE (R$ MILLION(R$ MILLION(R$ MILLION(R$ MILLION))))

Gross revenue reached R$ 743.8 MILLION in 2Q14, a growth of 6666.5%.5%.5%.5%


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GROSS REVENUEGROSS REVENUEGROSS REVENUEGROSS REVENUE |||| PATIENT SERVICE CENTERSPATIENT SERVICE CENTERSPATIENT SERVICE CENTERSPATIENT SERVICE CENTERS

RDI growth maintenanceMix of HIGHER COMPLEXITY (RDI) EXAMS AND A HIGHER NUMBER OF EXAMS PERREQUISITION increase the average requisition price

GROSS REVENUES (R$ MILLION) AVERAGE REVENUE PER REQUISITION (R$) ANDVOLUME (MILLIONS)


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GROSS REVENUE |GROSS REVENUE |GROSS REVENUE |GROSS REVENUE | HOSPITALSHOSPITALSHOSPITALSHOSPITALSGROSS REVENUES (R$ MILLION) AVERAGE REVENUE PER REQUISITION (R$) AND

VOLUME (MILLIONS)

REQUISITIONS AVERAGE REQUISITIONS PRICE

GROWTH of 1.5% , operating with selectivity of clientsNEW CONTRACTS in 2Q14Increase in average ticket with implementation of NEW SERVICES and focus on INCREASINGPROFITABILITY


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GROSS REVENUE |GROSS REVENUE |GROSS REVENUE |GROSS REVENUE | LABLABLABLAB----TOTOTOTO----LABLABLABLAB

GROSS REVENUES (R$ MILLION) PERFORMANCE

10.9% increase in REVENUE per laboratoryFocus on GREATER CAPILLARITY and IMPROVING THE MIX OF EXAMS


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GROSS REVENUE |GROSS REVENUE |GROSS REVENUE |GROSS REVENUE | PUBLIC HOSPITALS AND CLINICSPUBLIC HOSPITALS AND CLINICSPUBLIC HOSPITALS AND CLINICSPUBLIC HOSPITALS AND CLINICS

Contract EXPIREDEXPIREDEXPIREDEXPIRED on 1Q14Selectivity in the CHOICE OF NEW CUSTOMERS

GROSS REVENUES (R$ MILLION) PERFORMANCE


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COSTSCOSTSCOSTSCOSTS

PERSONNEL: impacted by collective bargaining agreement and hiring of new employees

MATERIAL: strong growth of lab-to-lab and changes on mix (Lab-to-Lab market x Public) andcosts increaseSERVICES AND UTILITIES: contracts renegotiation and revenue growth

2Q14 1Q14 2Q13 2Q14 1Q14 2Q13 2Q14 x

1Q14 %

2Q14 x

2Q13 %Personnel 138.1 124.7 118.6 20.1% 18.8% 18.8% 10.8% 16.4%

Materials 127.4 116.2 110.9 18.5% 17.6% 17.6% 9.6% 14.9%

Services and Utilities 171.9 174.4 174.0 25.0% 26.3% 27.6% -1.5% -1.2%General 8.2 8.7 6.4 1.2% 1.3% 1.0% -5.2% 29.0%

Cost of Services Cash 445.6 424.0 409.9 64.8% 64.0% 64.9% 5.1% 8.7%

Depreciation and amortization 26.1 28.2 24.3 3.8% 4.3% 3.8% -7.6% 7.5%

Cost of Services 471.7 452.3 434.2 68.6% 68.3% 68.8% 4.3% 8.7%

In R$ Million Variation %% of Net Revenues


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SG&ASG&ASG&ASG&A

GENERAL AND ADMINISTRATIVE: impacted by collective bargaining agreement and hiring ofnew employees

2Q14 1Q14 2Q13 2Q14 1Q14 2Q13 2Q14

x 1Q14

2Q14 x

2Q13 %

General and Administrative 117.1 115.8 105.2 17.0% 17.5% 16.7% 1.1% 11.3%

Profit Sharing Program 9.9 10.4 6.9 1.4% 1.6% 1.1% -5.1% 43.7%

Other Operating Revenues/ Expenses (0.2) (0.7) (1.4) 0.0% -0.1% -0.2% -68.4% -85.0%

Operating Expenses Cash 126.8 125.5 110.7 18.4% 19.0% 17.5% 1.0% 14.6%Depreciation and Amortization 13.5 12.1 13.5 2.0% 1.8% 2.1% 11.9% 0.3%

Operating Expenses 140.3 137.6 124.1 20.4% 20.8% 19.7% 1.9% 13.0%

In R$ Million % of Net Revenues Variation %


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ACCOUNTING EBITDA (R$ MILLION)


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INCOME TAXINCOME TAXINCOME TAXINCOME TAX

* Withholding tax (current): Originally from financial income and withholding of gross revenue

32.2%

18.4%

34.0%

-1.8%

37.2% -50.9%

Income Tax Rate permanentsadjustements in

tax books

Income Taxes(Financial

Statements)

Tax Loss/Other GoodwillCompensation

Withholding tax(current)/

Income taxescash*

2Q14


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RECEIVABLESRECEIVABLESRECEIVABLESRECEIVABLES

Provision for and losses due to disallowance and default (% GrossRevenue )

Average collection period (days)

Provision Rule

91 to 120 days 25%

121 to 180 days 50%

181 to 360 days 75%

More than 361 days 100%

(1) Index coverage = BDP balance/ expired > 120 days

R$ million 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Accounts receivable 415.9 432.4 376.8 448.2 467.2 480.7 452.1 496.6 501.2Past due 0-90 78.0 87.2 94.8 79.5 80.2 84.0 93.9 114.9 116.0

Past due 91 - 120 10.8 8.3 16.1 14.1 9.6 13.7 13.5 14.6 17.1

Past due (more 113.8 117.6 119.9 118.8 109.4 91.5 80.2 91.9 79.4

Provisions (106.1) (105.5) (109.2) (107.7) (95.0) (77.3) (67.5) (76.6) (69.3)

otal Rec. 512.4 540.0 498.5 552.9 571.3 592.6 572.2 641.5 644.5

Coverage Index 93.2% 89.7% 91.1% 90.7% 86.9% 84.5% 84.2% 83.3% 87.2%

3.63.63.63.6%%%%

4.24.24.24.2%%%%

2.32.32.32.3%%%%

3.73.73.73.7%%%%

1.31.31.31.3%%%%

2Q13 3Q13 4Q13 1Q14 2Q14


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BALANCE SHEETBALANCE SHEETBALANCE SHEETBALANCE SHEET MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENT

497.6

(427.3)

(861.8)

(791.5)

DEBT COMPOSITION (R$ million)

Cash and Cash Equivalents

Debt Short Term

Debt Long Term

Net Debt*

Operating cash flow is POSITIVE

NET DEBT STABLE with a downward trend

(*) Methodology adopted by fiduciary agent

Management Cash Flow (R$ Million) 2Q14Accounting EBITDA 115.0

Operacional working capital (15.8)

Other working capital accounts 17.6

Financial expenses (28.4)

Income tax (1.9)

Operational cash flow 86.6

Capex (34.7)

Free Cash Flow 51.8


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DEBT PROFILEDEBT PROFILEDEBT PROFILEDEBT PROFILE Debt Cost Evolution

Issuance Year Value(R$MM)

Rate

3 Issuance 2012 250.0 CDI + 0.80% p.a

4 Issuance 2013 450.0 CDI + 1.15% p.a

2 Issuance 2011 700.0 CDI + 1.40% p.a.

Term

4 years

5 years

5years

Financial Covenants

Net Debt Profile (2Q14)

R$ Milion

Debt Amortization Schedule

R$ Milion

Debentures (2 and 3 Issuance) DASA FINANCE

Loans

Average Cost Jun/13 Sep/13 Dec/13 Mar/14 Jun/14

% CDI 111.0% 111.0% 111.0% 111.0% 108.8%

CDI + 1.2% 1.2% 1.2% 1.2% 1.2%

Pr BRL 16.2% 16.1% 17.6% 17.6% 7.8%

Pr USD 8.2% 2.2% 2.1% 1.9% 1.7%

CDI +R$ 703.8 MM

88.9%

% Pre USD(R$ 3.1 MM)

-0.4%% CDI

R$ 86.9 MM11.0 %

Pre BRLR$ 4.0 MM

0.5%

Covenants Jun/13 Sep/13 Dec/13 Mar/14 Jun/14

Gross Debt 1,088.9 1,109.3 1,475.1 1,505.0 1,289.1

Cash and Cash Equivalents 236.5 252.4 608.9 697.7 497.6

Net Debt 852.5 856.9 866.2 807.3 791.5

Ebitda (LTM) 391.9 404.1 443.6 457.1 461.3

Net Financial Expenses (LTM) 84.9 88.6 86.6 90.2 101.9

1) Net Debt / Ebitda


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ROIC (ROIC (ROIC (ROIC (****))))

(*) NOPAT LTM/mean(working capital + intangible assets + fixed assets value for Exchange of shares of DASA and MD1)34% effective rate of Income Tax

Progressive improvement in ROIC


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CAPEXCAPEXCAPEXCAPEX

2Q14: 7 NEW PSCs, 4 Resonances, 1 TomographyNEW PSCs, 4 Resonances, 1 TomographyNEW PSCs, 4 Resonances, 1 TomographyNEW PSCs, 4 Resonances, 1 Tomography


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MAIN MESSAGESMAIN MESSAGESMAIN MESSAGESMAIN MESSAGES

Growth

Consolidated revenue perbusiness day grew 15.7%in the first semester*

Growth in the markets, led

by Lab-to-lab

2014 CAPEX (capitalbudget) of R$200 MM in2014

Organic growth plan

Technology

Expansion andmodernization of theCentral Labs

Global pioneer in the

Central Lab fullautomation concept(Conveyor belt)

Renewal of the RDI center

with state-of-the-arttechnology

Results

Net income of R$ 60.5million in the semester,3.2% more than in 1H13

Increase in earnings pershare

Progressive improvementof ROIC


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Q & A

CONFERENCE CALL 2Q14

earnings results 2q14 - presentation

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