Bradsaúde (SAUD3) Q2 2024 earnings summary

Executive summary

• Net addition of 138,000 members in 2Q24, reaching 8.8 million beneficiaries, with strong growth in corporate, SME, and individual segments; Bradesco Dental remains the leading brand, representing 49.4% of total members and 66% of SME and individual portfolios.

• The company operates an asset-light, proprietary IT platform, serving all Brazilian states and maintaining exclusive bancassurance channels.

• Maintains zero debt, negative working capital needs, and a net cash position, supporting a high dividend payout policy and recurrent cash dividends.

• Recognized for ESG performance, with an MSCI ESG rating upgrade to 'A' in 2024 and consistent HR awards.

• Net income for 2Q24 was R$122 million, up 4% YoY; last twelve months net income reached R$527 million, up 10% YoY.

Financial highlights

• Net operating revenue in 2Q24 was R$558 million, up 5.8% YoY; last twelve months revenue reached R$2.2 billion, up 6.8%.

• Adjusted EBITDA in 2Q24 was R$162 million, up 9.9% YoY, with a margin of 29.0%; LTM adjusted EBITDA margin reached 30.1%.

• Net margin improved to 24.0% in the last twelve months, from 23.2% a year ago.

• Net cash position of R$1.2 billion and zero debt as of June 2024.

• ROE increased to 39.1% from 37.1% YoY.

Outlook and guidance

• Non-corporate (SME and individual) plans continue to drive growth, with higher average ticket and margins, now representing 43% of revenue, up from 25% in 2014.

• CAPEX is expected to decrease as digital initiatives mature, with annual investments in technology down to R$83 million.

• Stable dental loss ratio at 40% is expected to be maintained, supported by product mix and cost control.

• High payout ratios (95–100%) are expected for 2024, maintaining strong dividend and buyback programs.