Results Conference Call
2Q24
Hospital Vila Nova Star - São Paulo
› DISCLAIMER
The reader/investor should not rely solely on the information herein to make decisions with respect to trading the securities issued by Rede D'Or São Luiz. The document may also contain prospective statements, which are subject to risks and uncertainties as they are based on expectations of the company's management and on available information.
The company is under no obligation to update these statements. The Company's future financial situation, operating results, market share and competitive position may differ substantially from those expressed or suggested by forward-looking statements. Many factors and values that may impact these results are beyond the company's ability to control.
Future projects could differ materially due to market conditions, changes in laws or government policies, changes in operational conditions and costs, changes in project schedules, operating performance, demands by clients and consumers, commercial negotiations or other technical and economic factors. For more detailed information, please refer to our Financial Statements, Reference Form (Formulário de Referência) and other relevant information on our investor relations website: www.ir.rededor.com.br
2Q24
2
- DISCLAIMER
SULAMÉRICA ACCOUNTING AND IFRS 17 ADOPTION
Due to the merger of Sul América S.A. ("SulAmérica") being completed on December 23, 2022, the Financial Statements of Rede D'Or São Luiz S.A. ("Rede D'Or") did not include the income statement balances for the 2022 fiscal year of SulAmérica. From the Financial Statements of Rede D'Or on March 31, 2023, SulAmérica's results are fully included in the Income Statement, as well as the Accounting Cash Flow and Balance Sheet.
In preparing this report, Rede D'Or chose to present selected operational and financial indicators for Rede D'Or and SulAmérica separately, on a voluntary, managerial, and unaudited basis.
The Company also reinforces the disclaimer available on the previous page, in the context of any declarations that may be made related to the combination between Rede D'Or and SulAmérica. For further information regarding the risks that should be considered, please see section 4, "Risk Factors", of Rede D'Or's Reference Form, available on the Company's IR website, as well as the files directory of Rede D'Or on the CVM website.
The adoption of IFRS 17/CPC 50 for insurance contracts, which impacts SulAmérica's operations, introduced changes to accounting practices and the way the Company's financial statements are released.
For the purposes of managerial analysis and better comparability between periods, the results presented in this document continue to consider IFRS 4/CPC 11, the previous accounting standard.
2Q24
3
- 2Q24 HIGHLIGHTS
Patient-day
New record of 758 thousand in the quarter, increase of 4.5% vs. 2Q23
Average bed occupancy rate
84.4%, +1.5 pp vs. 2Q23; highest mark ever recorded in the historical series
Gross revenue
+9.8% YoY, reaching R$7.9 billion and renewing the historical record for the highest quarterly revenue
Average ticket
Increase of 5.1% YoY vs. 2Q23
EBITDA
+13.3% YoY, to R$1.8 billion in the quarter; 26.3% margin (+1.0 pp vs. 2Q23), matching pre-pandemic levels and recording the highest EBITDA and margin level for a second quarter since 2019
Net revenues
+10.9% YoY, to R$7.4 billion, reflecting portfolio price adjustments
Loss ratio
Consolidated loss ratio of 83.6% in the quarter, decrease of 2.7 pp vs. 2Q23
Membership evolution
+1.2% YoY, reaching 5.1 million beneficiaries considering health and dental portfolio
Administrative expenses(1) Level of administrative expenses in relation to revenues of 4.9% in the quarter
Adjusted EBITDA(2)
R$486.2 million, +107.5% YoY
Gross revenues
9.2% YoY evolution, registering R$13.6 billion in the quarter
EBITDA
R$2.1 billion, +28.5% YoY; consolidated EBITDA, summed the financial result of insurer's restricted assets, was R$2.4 billion
Net income
129.9% growth, amounting R$1.0 billion
- surpassing, for the first time in a single quarter, the one billion reais mark; excluding the accounting-only effect of the amortization of insurance portfolios, adjusted net income sums R$1.1 billion, +115.1% YoY
Debt
2.1x Net Debt/EBITDA, decrease of 0.5x vs. 2Q23 and 0.1x vs. 1Q24
- Disregarding provisions for contingencies.
- Adjusted EBITDA considers sum of reported EBITDA and financial results over restricted assets.
- PATIENT-DAYAND SURGICAL VOLUME
Patient-day volume and average occupancy rate
Evolution of the total number of surgeries (total)
(hospitalization in thousands; %)
83.0% | 82.6% 79.5% 76.9% 78.5% | 83.0% | 80.1% 76.4% | 84.4% | |||||
78.4% 76.5% 78.1% | 79.7% | ||||||||
725 | 758 | ||||||||
707 | 701 | 707 | 699 | ||||||
628 | 645 | 671 | 667 | 673 | |||||
625 | 616 | ||||||||
(thousand surgeries)
105 | 107 | 110 |
78
126 | 132 | ||||
121 | 125 | 120 | 121 | 125 | |
118 | |||||
115 | |||||
2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
- Patient-dayvolume grew 4.5% YoY in 2Q24, with record average occupancy rate at 84.4%, 1.5 pp above 2Q23.
- In 2Q24, Rede D'Or registered 125,000 surgeries within its units, in line with the
surgical volumes registered in 2Q23 and | |
3.2% superior to 1Q24. | 2Q24 |
5
- EVOLUTION OF HOSPITAL BEDS
Number of operationalbeds
(# of beds, end of period)
+12.6%
Number of totalbeds
(# of beds, end of period)
+23.9%
9,352 | 9,439 | 9,613 | 9,469 | 9,462 | 9,646 | 9,600 | 9,598 | 9,729 | 9,891 | |||
8,946 | ||||||||||||
8,788 | 8,761 | |||||||||||
9,611
10,098 10,618 11,012 11,046 11,046
11,487 11,512 11,512 11,512 11,737 11,737 11,905
2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
- Number of operational beds increased by 162 when compared with the previous quarter and by 293 in the first six months of the year, including the opening of the new Hospital Memorial Star in early May, 2024. The number of total beds increased 393, or 3.4% YoY,
due to the addition of physical capacity related to projects inaugurated in the first half of | 2Q24 |
the year. | |
6
- GROSS REVENUES AND AVG. TICKET: HOSPITAL SERVICES
Total gross revenues: Hospital Services
(R$ million)
+9.1%
15,311.6
+9.8% | 14,034.4 |
+6.4%
Total average ticket
(Total gross revenue over patient-day; in R$)
+5,1%
-1,8%
10,425.4 10,438.3 10,612.7 10,421.2
7,189.0 7,372.3 7,022.6 7,416.9
7,894.7
9,918.9
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 6M23 | 6M24 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
- Gross revenue increased 9.8% over 2Q23, renewing the historical record for the highest quarterly revenue, and with 5.1% YoY evolution of total average ticket.
2Q24
7
- GROSS REVENUES AND AVG. TICKET: ONCOLOGY
Gross revenues: Oncology (infusions and therapies)
(R$ million)
+16.9%
+20.0%
1,544.6
+7.1%1,321.5
Average ticket: Oncology
(Oncology gross revenue over infusions; in R$)
+13.0%
+3.4%
12,734.0
12,313.2
665.5 699.3 715.5 746.0
798.6
11,739.2 12,017.9
11,264.5
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 6M23 | 6M24 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
- In 2Q24, Oncology gross revenue (infusions and therapies) increased 20.0% vs. 2Q23 driven by superior average ticket in the period (+13.0% YoY).
2Q24
8
- COSTS AND EXPENSES: HOSPITAL SERVICES
Cost with hospital services (R$ million)
+6.6% | ||||
10,234.6 | ||||
+6.8% | 9,604.7 | |||
+3.9% | ||||
4,883.6 | 4,949.0 | 4,802.6 | 5,018.8 | 5,215.9 |
General and administrative expenses
(R$ million)
+4.3% | ||
+13.8% | 528.2 | 550.7 |
Disregarding
the reversal in
provisions for+18.7% contingencies
298.9
262.6 | 261.3 | 64.6 |
251.8 | ||
275.9 |
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 6M23 | 6M24 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 6M23 | 6M24 |
-54.3
- Costs with hospital services increased 6.8% in 2Q24. The cost with materials and medicines represented 19.3% of the gross revenue in the quarter (-1.3 pp YoY).
- G&A expenses increased 13.8% YoY and 18.7% vs. 1Q24, representing 3.8% of the gross revenue in the quarter.
2Q24
9
- EBITDA AND NET INCOME
EBITDA and margin: Hospital Services (R$ million, %)
25.7% | |||
24.6% | |||
28.3% | |||
22.7% | 25.1% | 26.3% | 3,495.8 |
25.3% |
Net Income: Consolidated
(R$ million, %)
+129.9%
1,946.3
3,080.5 | |
+13.3% | |
+10.8% | |
1,841.1 | 1,837.4 |
1,621.7 | 1,658.4 |
1,424.7 |
489.8
811.4
760.3
+19.1%
892.9
720.7 840.3
668.1
1,053.4
1,000.8
1,841.1
+149.1%
863.7
739.2
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | 6M23 | 6M24 | |
EBITDA | EBITDA Margin | ||||||
435.4
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | |
Net Income | Adjusted Net Income¹ | ||||
6M23 6M24
› 2Q24 EBITDA grew 13.3% YoY, with | › In 2Q24, net income posted 129.9% YoY |
26.3% margin (+1.0 pp YoY), matching | growth, surpassing - for the first time in a |
pre-pandemic levels and recording the | single quarter - the one billion reais mark. |
highest mark for a second quarter since | |
2019. | 2Q24 |
(1) Excluding the accounting-only effect of the amortization of the portfolios assumed of SulAmérica in business combinations.
10