Earnings results presentation

7/29/2019 Earnings results presentation

1/23

3Quarter 2012Earnings ResultsDASA announces Gross Revenue of R$

652.6 million and Operational Cash Flow

of R$ 55.5 million on 3Q12

Cynthia May Hobbs

CFORomeu Crtes Domingues

ChairmanOctvio Fernandes

VP of OperationsDickson Esteves Tangerino

CEO

Emerson Leandro GasparettoDirector of Imaging

Investor [email protected]

Tel: (011) 4197-5410Fax: (011) 4197-5516

www.dasa3.com.br

TELECONFERENCES

PortugueseDate: 11/13/12 | Hour: 10h00 (Braslia)

Tel.: 11 2188-0155 | Password: DASA

EnglishDate: 11/13/12 | Hour: 12h00 (Braslia)

Phone: 1(412)317-6776 | Password:DASA

DASA ON

Bovespa: DASA3Most recent quotation:

11/12/12: R$ 13.89

Average daily negotiation 3Q12:R$ 28.3 million

Market value:

R$ 4.3 billionUS$ 2.1 billion

Free Float: 97.2%


2/23

LEGAL NOTE

2 / 22

Certain statements made in this presentation may not be

based on historical information or facts. This presentation

therefore contains, or may deemed to contain, forward

looking statements, including those relating to

Companys general business plans and strategy, its future

financial condition and growth prospects, and future

developments in its industry and its competitive andregulatory environment.

By their nature, forward-looking statements involve risks

and uncertainties because they relate to events and

depend on circumstances that may or may not occur in

the future. Accordingly, actual results may differ

materially from these forward-looking statements due toa number of factors, including future changes or

developments in Companys business, its competitive

environment, technology developments and political,

economic, legal and social conditions in Brazil.

Forward looking information is not merely based on

historical fact but also reflects managements objectivesand expectations.

The words anticipate, wish, expect, foresee,

intend, plan, predict, forecast, aim and similar

words, written and/or spoken, are intended to identify

affirmations which, necessarily, involve known and

unknown risks. Known risks include uncertaintieswhich include, but are not limited to, interest rates,product competition, market acceptance ofproducts, the actions of competitors, regulatory

approval, currency type and fluctuations, monetarypolicy, among others.

The future results of the Company may vary from the

results expressed in, or implied by, the following

forward looking statements, possibly to a material

degree. For a discussion of some of the important

factors that could cause DASAs results to differ from

those expressed in, or implied by, the followingforward-looking statements, please refer to the

preliminary offering memorandum previously delivered

to you, in particular, the Risk Factors section thereof.

DASA may alter, modify or otherwise change in any

manner the contents of this presentation, without the

obligation to notify any person of such revision orchanges. For the purposes of this presentation, unless

otherwise indicated

or the context otherwise requires, all references to

Company refer to Diagnsticos da Amrica S.A and

its consolidated subsidiaries. All references to DASA

refer to Diagnsticos da Amrica S.A.


3/23

3Q12 HIGHLIGHTS AND RECENT FACTS

Growth

Gross Revenue of R$ 652.6 million ( 0.5 %) 20 new PSCs in 2012 19 fully operational, 8 from those in 3Q12 10 PSCs remodeling concluded until September 16 equipment upgrades until September, 7 CTs and 9 MRIs

New contract in the Public Market Clinical Analysis for the Rio de Janeiro Municipality

Quality

30 Workshops with Doctors

2 international seminars from Delboni (729 participants) and from Alta (450 participants) Leading edge equipment : MRI - 3 tesla and CT - 128 channels - PSCs in So Paulo New microbiology analysis technology launch (mass spectrometry) CAP (College of American Pathologists) accreditation renewal main international laboratories

hallmark of quality

Return for the shareholder

Ebitda of R$ 108.5 million, no adjustments Net income adjusted by the effective tax rate of R$ 31.7 million Operating cash flow of R$ 55.5 million

3 / 22


4/23

GROSS REVENUE (R$ MILLION)

4 / 22

Gross revenue reached R$ 1,886 million in the year, a growth of 5.4%


5/23

PATIENT SERVICE CENTERS

5 / 22

Growth impacted by PSCs remodeling, equipment upgrades, call center changes and 1

payer drawback in RJ

Incoming calls grew 12% compared with a 6% decrease in handled calls

More comprehensive imaging mix increasing average value per requisition

Gross Revenue (R$ million) Average revenue per requisition andvolume (millions)


6/23

Performance of the 4 PSCs with upgraded MRI in SP

SP TECHNOLOGY COMPLEX NEW EQUIPMENT PERFORMANCE

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100.0

110.0

120.0

130.0

140.0

150.0

160.0

170.0

180.0

190.0

200.0

jan fev mar abr mai jun jul ago set

exames em 2011 exames em 2012

jan feb mar apr may jun jul aug sep

2012 exams2011 exams

New procedures mix and enhanced productivity


7/23

Equipment upgrade Equipment switch

100

105

110

115

120

125

130

135

140

145

1T11 2T11 3T11 4T11 1T12 2T12 3T12

CT- Computed Tomography : number of procedures (basis 100)

Interlagos

Santo Andr

Tatuap II

Sumar

Mooca

SBC

Penha

LapaGuarulhos

TatuapInterlagos

Borba Gato

Jardim Sul

Ricardo Jafet

7 / 22


1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12


8/23

100

110

120

130

140

150

160

1T11 2T11 3T11 4T11 1T12 2T12 3T12

MRI Magnetic Ressonance: number of procedures (basis 100)

Guarulhos

Tatuap II

SBC

Brooklin

Darzan

Jardim Sul

Ricardo Jafet

Tatuap

8 / 22


Equipment upgrade Equipment switch

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12


9/23

HOSPITALS

9 / 22

Revenue drop related to the loss of So Luiz hospitals contract and optimization of

existing contracts (R$ 14 MM per quarter impact)

Focus on increasing profitability cancellation of 5 hospitals contracts

New contract in Rio de Janeiro for Clinical Analysis and Imaging, start in 4Q12

Gross Revenues (R$ million) Average revenue per requisitionand volume (millions)


10/23

LAB-TO-LAB

Increase in market share (111 new clients) and in the number of requisitions (8,5%)

Focus on maximizing profitability

Gross Revenues B2B (R$ million) Performance B2B

10 / 22


11/23

PUBLIC HOSPITALS AND CLINICS

Strong growth mainly due to new contract with the Rio de Janeiro Municipality

Gross Revenues (R$ million) Performance B2G

11 / 22


12/23

COSTS

12 / 22

Personnel: enhanced customer service and pre operational costs

Material: increased number of tests produced in the Public and Lab-to-lab market

Costs of services and utilities impacted by doctors fees, data link, and occupancy costs

3Q12 3Q11 3Q12 3Q11 %

Personnel 114.8 103.6 19.5% 17.3% 10.8%

Materials 106.7 98.9 18.1% 16.5% 7.9%

Services and Utilities 152.4 144.2 25.9% 24.0% 5.7%

General 5.6 6.5 1.0% 1.1% -13.6%

Cost of Services Cash 379.6 353.3 64.5% 58.9% 7.5%

Depreciation and amortization 25.2 20.1 4.3% 3.4% 25.1%

Cost of Services 404.8 373.4 68.8% 62.3% 8.4%

3Q12

vs3Q11

In R$ Million % of Net Revenues


13/23

CLINICAL COST ANALYSIS, PRODUCTIVITY AND GROWTH 3T12

13 / 22

Basis :100

# Tests

Productivity

(test/employee)

Total Unit Cost

Year 09 Year 10 Year 11 Year 12


14/23

COST CONTROL CONTINUOUS FOCUS IN 2013

14 / 22

EQUIPMENT AND PROCESSES

Full automation of Urino in SP - 29% productivity Automation of urino culture- 10% productivity Bacterian identification by mass spectometry - 120 K/month in SP and 100 K/ month in RJ - (material

cost gain) Conveyor Belt RJ - 12% productivity (tests/employee) Conveyor Belt CL/SP 12% productivity (tests/employee) and reagents

productivity, repetitive tasks

GAINS R$

Supplier A 800 K 5 months Supplier B 715 K 7 months Supplier C 256 K 2 months

SUPPLIERSInternational negotiation and favorable share


15/23

SG&A

15 / 22

General and Administrative: receivables personnel increase and call center

R$3 Million per quarter reduction from 1Q13 in occupancy costs

(*) As of 1Q12, the PDA is being considered under the "discounts" the income statement

3Q12 3Q11 3Q12 3Q11 %

General and Administrative 101.6 93.6 17.3% 15.6% 8.5%

Profit Sharing Program 0.2 0.5 0.0% 0.1% -50.1%

Other Operating Revenues/ Expenses (1.4) 0.7 -0.2% 0.1% -299.8%

PDA* - 6.3 0.0% 1.0% -

Cash Operating Expenses 100.4 101.1 17.1% 16.9% -0.7%

Depreciation and Amortization 17.4 10.8 3.0% 1.8% 61.3%

Operating Expenses 117.8 111.9 20.0% 18.7% 5.3%

In R$ Million % of Net Revenues3Q12 vs

3Q11


16/23

ACCOUNTING EBITDA (R$ MILLION)

16 / 22

Ebtida

Margin


17/23

INCOME TAX

17 / 22

Optimized fiscal benefit expected after the incorporation of MD1

*

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

33.7%

21.9%

34.0%

-0.3%

-11.2% -0.6%

00%

20%

40%

Income Tax Rate permanentsadjustements in tax

books

Income Taxes(Financial Statements)

Tax Loss/GoodwillCompensation

Other Withholding tax(current)/ Income taxes

cash

3Q12


18/23

RECEIVABLES

18 / 22

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

R$ million 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

Accounts receivable 399.7 385.5 409.7 398.0 423.7 415.9 432.4

Past due 0-90 59.7 71.1 85.0 74.7 74.3 78.0 87.2

Past due 91 - 120 8.2 12.2 11.3 10.1 10.7 10.8 8.3

Past due (more than) 120 84.9 83.3 92.4 111.2 111.2 113.8 117.6Provisions (84.2) (71.7) (75.1) (103.9) (102.7) (106.1) (105.5)

Total Rec. 466.2 481.7 523.3 490.1 517.1 512.4 540.0

Coverage Index Average collection period

86.1%81.3%

92.4%89.7%

99.1%93.4% 93.2%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12

107.8

112.9

101.2 100.0

100.3

3Q11 4Q11 1Q12 2Q12 3Q12

Provision rule

91 to 120 days 25%

121 to 180 days 50%

181 to 360 days 75%

More than 361 days 100%


19/23

19 / 22

BALANCE SHEET MANAGEMENT

142.1

(246.6)

(924.1)

84.7

(943.9)

Debt Composition(R$ million)

Cash and Cash Equivalents

Debt Short Term

Dvida Long Term (*)

Net Debt

(+) (Escrow)

(*) Includes Escrow

Operating cash flow is positive

Operational working capital

impacted by increased

revenues in 3Q12

Financial expenses impacted

by the lower interest rates

Net debt stable compared to2Q12

3Q12Accounting EBITDA 108.5

Operacional working capital (17.4)

Other working capital accounts (2.7)

Financial expenses (25.5)

Income tax (7.4)

Operational cash flow 55.5

Capex (55.8)

Free Cash Flow (0.3)

Management Cash Flow (R$ Million)


20/23

ROIC(*)

ROIC is impacted in the short term by the increased CAPEX

20 / 22

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


21/23

CAPEX

21 / 22

Capex Breakdown 3Q12

In 3Q12 we deployed 6 MRIs, 3 CTs, launched 8 new PCSc and 4 remodeled 4 others

4Q12: 5 new MRIs , 1 upgraded CT, 1 new mega-PSC and 1 remodeled PSC

R$ 55.8 MM in 3Q12 and R$ 178.1 MM YTD

Opening and

Expansion of

PSCs

49.9%

Equipment

19.2%

Information

Technology

30.4%

Others

0.5%


22/23

FINAL REMARKS

22 / 22

WHAT ARE WE DOING?

Waste Reduction Group Price Policy Group Investment Management Group

People Management Group Incorporation of Acquired Companies Group Receivables Actions Cost and indicators management New front-end system and new ERP

RESULTS

Growth

Sustainability

Profitability

DOCTORS REVENUE INCREASE

EMPLOYEES WASTE REDUCTION


23/23

Documents

Earnings results presentation