Fleury grows revenue and margins in bad health times; B2B moves the needle

In a difficult time for healthcare companies, Fleury has just published results in line with market expectations, which have generally had a more benign view of the company than of its peers.

The laboratory network’s net revenue rose to R$1.9 billion, an increase of 54% compared to the same quarter last year and which reflects the merger with Hermes Pardini.

In the result pro formawhich shows the numbers as if Fleury and Hermes Pardini were already with the combined operation in the first quarter of 2023, the increase was 6.6%.

EBITDA reached R$516 million, an increase of 49.6% in accounting and 11.4% in pro forma. The EBITDA margin was 27.2% – a drop of 0.8 points in accounting and an increase of 1.1 in pro forma.

“We delivered consistent results once again with great cost and revenue discipline, and synergies with Pardini continue to be captured as planned,” CEO Jeane Tsutsui told Brazil Journal.

The highlights of the quarter were the B2B operation – which increased revenue by 12% in both accounting and pro forma – and also with the “new links” area, which grew 21.8% organically year on year.

In the case of B2B, the business was boosted by the recent obligation for professional drivers to carry out drug tests every two years and six months.

In the area of ​​new links, the strongest growth came from the areas of infusions and ophthalmology.

Laboratories, which represent almost 70% of Fleury’s gross revenue, grew 3.1% on a pro forma, while the Minas Gerais operation saw a 10% increase in revenue due to the high demand for dengue tests.

Fleury’s leverage remained at 1.2x, and the recent purchase of the São Lucas laboratory, in Santa Catarina, for R$69.8 million announced in April, should not change this number, said CFO José Antonio Filippo.

Jeane said that acquisitions – both of laboratories and health companies to integrate the area with new links – will continue, but with price discipline.

Jeane said that the sector may be entering a time of more reasonable multiples given the high cost of capital and the turbulent period that healthcare operators and service providers are going through.

At a time when many operators are making transfers difficult, Fleury’s accounts receivable line has doubled to R$269 million.

But according to Filippo, this increase was due to an accounting effect of the merger with Hermes Pardini. According to him, there are no problems in transferring the plans to Fleury.

Jeane said she sees Fleury as a partner for operators, especially with the growth in the area of ​​new links.

“Diagnostic medicine represents only 20% of operators’ costs, and we have always positioned ourselves as partners to help them control accidents,” said the CEO.

Fleury’s shares have fallen around 4% in the last 12 months. The company is worth R$8 billion on B3.

André Jankavski