Earnings Results 4Q07 March 25th,2008
4QO7 Results Conference Call Presentation
May 13, 2015
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Earnings Results
4Q07March 25th,2008
Disclaimer
This presentation contains forward-looking statements relating to the business
outlook, operating and financial projections, and the growth prospects of Tempo
Participações S.A.
These statements merely represent projections and as such are based exclusively on
Management’s expectations about the future of the business.
Such forward-looking statements depend substantially on changes in market
conditions, the performance of the Brazilian economy, the industry and international
markets, and therefore are subject to change without prior notice.
2
ABOUT TEMPO PARTICIPAÇÕES
Business Units
4
Dental HMO
Ranking: #5
Number of lives: 457 thousand
Underwriting of frequency risk
Assistance Services
Ranking: #1
Number of items: 17.3 million
Underwriting of frequency risk
Healthcare Administration
Services
Ranking: #1
Number of lives: 1.3 million
No underwriting risk. Fee
business only.
5
Commercial Sinergies and Common
Operational Platform
He
alth
care
A
dm
inis
trat
ion
Se
rvic
es
Corporate Clients
Insurers
HMOs
De
nta
l HM
O
CorporateClients
B2B2C
HMOs
Ass
ista
nce
Se
rvic
es
Insurers
B2B2C
State-of-the-art Proprietary IT Platform Network of Service Providers
Network of Service Providers
Network of Service Providers
US
ER
S
Claims Processing
Contact Center
Network Management
Clients Common Back-Office
6
Tempo: A Powerful Combination
of Organic Growth and M&A
Acquisition of Gama Odonto
Acquisition of Cloe
Acquisition of Oralgold
Acquisition of USS
Acquisition of Gama Saúde
ConnectMed founded by Jose Bonchristiano. GP joins the Company in March with other
institutional investors
Acquisition of Associl2
Acquisition of Odonto Empresa2
2001 2002 2003 2004 20072000 2006
Dental Dental Dental
Health Admin Dental Dental
Acquisition of Medlar
Specialty Health
Consolidation Expansion into new markets
Observations:1 Subsidiary of Gama Saúde by the time of its acquisition 2 Pending ANS approval
Dental
Acquisition of OralTech2
Acquisition of CRC
Health Admin
Tempo is a result of 10 successful acquisitions since its inception
Assistance
RECENT EVENTS
8
12 months, 5 acquisitions...
Med-Lar Acquisition
Home Care
Associl Acquisition– 75,000 lives
Dental
Oraltech Acquisition – 30,000 lives
Dental
Odonto Empresa Acquisiton – 220,000 lives
Dental
Total Invested from Dec/06 to Dec/07
R$ 250,000,000.00
USS Acquisition
Assistance Dec 06
May 07
Oct 07
Nov 07
Nov 07
9
USS integrated in 6 months…
Synergies Before Taxes – EBITDA Annual Impact
Acquire
(R$
MM
)
3.8
8.2
2.0
14.0
Fixed Costs Operational
Efficiencies
Head Count Total
22.0
150.0
Equity Goodwill
Goodwill – Tansaction Value Impact
Asset Cost
128.0
NPV - Taxshield
34.5
(R$ M
M)
ClosingFirst Contact
August 06 December 06
100% Integrated
July 07
Pre - Transaction Post Transaction
Acquisition Cost R$ 150 MM R$ 115,5 MM
EBITDA R$ 25 MM R$ 39 MM
Multiple 6.0 x 2.96 x
10
IPO: Tempo in Novo Mercado
Price per Share R$ 7,00
Primary Offer 56.250.000 Shares
Secondary Offer 3.720.800 Shares
Total R$ 419.765.600,00
IPO
Price per Share R$ 7,00
Prim ary Offer 56.250.000
Secondary Offer 3.720.800
Total R$ 419.765.600,00
Management Free FloatFormer Executives Brasil Warrant
20,1% 28,5% 9,3% 35,1%7,0%
FINANCIAL AND OPERATIONAL
PERFORMANCE
Tempo Participações - Consolidated
Net Revenue (R$ MM) EBITDA (R$ MM) EBITDA Margin
12
2006 2007
490.1
572.6
(R$ MM) 4Q07 4Q06 Chg. % 2007 2006 Chg. %
Net Revenues 168.1 132.5 26.9% 572.6 490.1 16.8%
EBITDA 21.5 7.2 198.6% 55.0 37.6 46.3%
EBITDA Margin 12.8% 5.4% 7,4 p.p. 9.6 p.p. 7.7% 1.9 p.p.
Net Earnings 16.6 5.0 232.0 38.6 23.5 64.3%
Net Margin 9.9% 3.8% 6.1 p.p. 6.7% 4.8% 1.9 p.p.%
2006 2007
7.7%9.6%
EBITDA Margin
2006 2007
37.6
55.0
EBITDA
R$ MM
Health Plans- Gama Saúde
13
Beneficiaries
Net Revenue(R$ MM)
Strong growth in number of lives even though there was
moderate growth in the private regulated health care
market (approx. 5%)
Strong revenue growth supported by
increase in the member´s base.
Strong fee growth in line with total revenue
increase.
2004 2005 2006 2007
30.2 41.1 51.6 61.5
124.0173.4
211.2250.3
9.5
Net Revenue - Health Plans
(R$ MM)
Gross Profit/ Adm Tax Transfer of Medical Costs Home Care
154.2
214.5
262.8
321.3
4Q06 4Q07
13.5 18.7
59.874.6
9.5
Net Revenue - Health Plans
(R$ MM)
Gross Profit/ Adm Tax
Gross Profit/ Adm Tax
Home Care
73.3
102.8
2004 2005 2006 2007
427,890
730,385
1,061,233
1,310,141
Beneficiaries - Health Plans
Health Care- Gama Saúde
14
General and Administrative Expenses R$ MM) (Excluding Non-Recurring Expenses)
Ajusted EBITDA (R$ MM)
Operational efficiencies and
expenses dilution powered by
low cost structure.
Gama Saúde´s new clients
marginal margins are double
the current business margin
28.536.8
45.242.7
18.5%17.2% 17.2%
13.3%
2004 2005 2006 2007
General and Administrative Expenses - Health Plans (R$ MM)
General and Administrative Expenses % Net Revenue
10.5 7.5
14.3%
7.3%
4Q06 4Q07
General and Administrative Expenses - Health Plans
(R$ MM)
General and Administrative Expenses
% Net Revenue
3.7
13.75.0%
13.3%
4Q06 4Q07
EBITDA - Health Plans
(R$ MM)
EBITDA EBITDA Margin
5.07.3
8.9
22.5
3.2% 3.4% 3.4%
7.0%
2004 2005 2006 2007
EBITDA - Health Plans
(R$ MM)
EBITDA EBITDA Margin
2004 2005 2006 2007
103.313 124.434 130.646 140.493
335.336
Tempo Novas Aquisições
475.829
15
Dental- Gama Odonto
Beneficiaries
Number of lives covered in 2007 compared to 2006 due to
three important acquisitions. (Associl, Oraltech and Odonto
Empresa).
Gama Odonto´s new growth strategy will allow organic
growth above market levels (B2B2C).
Acquired companies in 2007 are not
incorporated in 2007 results.
Net revenue considering pro-forma
acquisitions would have totalled R$ 60
million in 2007..
Net Revenue(R$ MM)
4Q06 4Q07
5.25.4
Net Revenue - Dental(R$ MM)
2004 2005 2006 2007
15.1
18.120.5 21.4
Net Revenue - Dental(R$ MM)
16
Dental- Gama Odonto
Cost of Rendered Services* General and Administrative Expenses
EBITDA
Medical Loss Ratio does not include acquisiitions,
which will result in a reduction of this index in the
next results.
The fourth quarter of 2007 already reflects the
resulting sinergies of USS´s integration.
Net costs of technical provisions
8.3
9.0
10.4
11.4
55.0% 49.7%50.7%
53.3%
2004 2005 2006 2007
Cost of Rendered Services Medical Loss Ratio
2.4 3.7
46.2%
57.4%
4Q06 4Q07
Cost of Rendered Services -Dental (R$ MM)
Cost of Rendered Services
Medical Loss Ratio
6.37.2 7.2 7.1
41.7%39.8%
35.1%33.2%
2004 2005 2006 2007
Despesas Gerais e Administrativas - Odonto (R$ MM)
General and Administrative Expenses
% Net Revenue
2.4
1.7
46.2%
32.7%
4Q06 4Q07
Despesas Gerais e Administrativas Odonto (R$ MM)
General and Administrative Expenses
% Net Revenue
2.4
3.7
4.7 5.7
15.9%
20.4%
22.9%
26.6%
2004 2005 2006 2007
EBITDA - Dental(R$ MM)
EBITDA EBITDA Margin
0.8
1.8 15.4%
33.3%
4Q06 4Q07
EBITDA - Dental
EBITDA EBITDA Margin
17
Items – In millions
Assistance Services- USS
Net Revenue
Growth recovery in the number of items covered
after after slight fall back in 2006.
Strong organic annual growht in the past 4
years driven by services with additonal added
value.
2004 2005 2006 2007
151.0178.7
206.8229.9
Receita Líquida - Assistência Especializada (R$ MM)
4Q06 4Q07
54.059.9
Receita Líquida - Assistência Especializada (R$ MM)
2004 2005 2006 2007
14.5 16.8 16.0 17.3
Items - Assistance Services (in million)
18
Assistance Services- USS
Cost of Rendered Services General and Administrative Expenses
EBITDA
Increase in the Loss Ratio is related to providing
services with additional added value
.
The fourth quarter of 2007 already reflects the
resulting sinergies of USS´s integration.
59.4 67.9 80.50 81.4
39.3% 38.0% 38.9%35.4%
2004 2005 2006 2007
Despesas Gerais e Administrativas - Assistência Especializada (R$ MM)
General and Administrative Expenses
% of Net Revenue
23.6 20.5
43.7%
34.2%
4T06 4T07
Despesas Gerais e Administrativas - Assistência
Especializada (R$ MM)
General and Administrative Expenses
% of Net Revenue
87.1 93.7104.3 124.4
57.7%52.4% 50.4%
54.1%
2004 2005 2006 2007
Cost of Rendered Services - Assistance Services (R$ MM)
Cost of Rendered Services Medical Loss Ratio
28.334.0
52.4%56.8%
4Q06 4Q07
Cost of Rendered Services Assistance Services (R$ MM)
Cost of Rendered Services
Medical Loss Ratio
6.6
19.2
24.0
26.84.4%
10.7%
11.6% 11.7%
2004 2005 2006 2007
EBITDA - Assistance Services(R$ MM)
EBITDA EBITDA Margin
2.7
6.0
5.0%
10.0%
4Q06 4Q07
EBITDA - Assistance Services (R$ MM)
EBITDA Margem EBITDA
Strong Cash Genereation and Financial Leverage
19
Capex vs Ajusted Pro-Forma EBITDA (R$ mm)
Business Model
Asset Light
Financial Solidity
Strong Growth Capacity
Capitalization (R$ mm)
4.32.5
4.0 5.1
14.0%
30.2%37.6%
55.0%
2004 2005 2006 2007
Capex Ajusted EBITDA
Dez/ 07
Cash and Equivalent 404.2
Short-Term Debt 1.5
Long-Term Debt 55.5
Total Debt 57
Net Debt (Cash) 347.2
Dez / 07
Audited Goodwill 104.5
Goodwill Generated by
Recent Acquisitions
49.2
Total Goodwill 153.7
Fiscal Benefits to be
Amortized in 5 years
52.3
Goodwill Generation (R$ MM)
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