Fleury (FLRY3) Q2 2024 earnings summary

Executive summary

• Completed first year of business combination with Pardini, achieving significant integration progress, synergy capture, and expanded national presence and operational efficiency.

• Service units increased by 65% to 557, with potential beneficiaries up 24% to 25 million.

• Revenue for Q2 2024 reached R$2.14 billion, up 19.7% year-over-year, with net income rising 47.5% to R$173.6 million and margin of 8.8%.

• Acquisition of São Lucas Centro de Diagnóstico for R$69.8 million completed, marking entry into Santa Catarina's B2C market.

• Genesis joint venture in genomics with Hospital Albert Einstein launched and consolidated from April 2024.

Financial highlights

• Gross accounting revenue for Q2 2024 was R$2.14 billion, up 19.7% year-over-year; pro forma growth was 8.1%.

• EBITDA reached R$522 million, up 21.7% year-over-year, with a margin of 26.4% (up 115 bps pro forma).

• Net income was R$173.6 million, up 47.5% year-over-year, with a net margin of 8.8%; excluding IHP surplus, net income was R$184.7 million (9.3% margin).

• Operating cash flow reached R$588.2 million, up 82.4% year-over-year, with a cash conversion rate of 77.8% of EBITDA.

• Capex for Q2 2024 was R$97.6 million, down 8.1% year-over-year, reflecting disciplined capital allocation.

Outlook and guidance

• Focus remains on capturing synergies from the Pardini integration, with 60% of targeted synergies achieved in the first year.

• Management highlights continued focus on operational efficiency, cost control, and disciplined capital allocation.

• The company aims to further expand in B2B and B2C, leveraging synergies from Pardini integration and recent acquisitions.

• No specific margin or revenue guidance provided, but management expects ongoing efficiency gains and market share growth.