Earnings release
2Q08August 15, 2008
2
Business segments
Dental HMO
Ranking: #4
Number of lives: 695 thousand
Underwriting of frequency risk
Assistance Services
Ranking: #1
Number of items: 19.3 million
Underwriting of frequency risk
Healthcare Administration Services
Ranking: #1
Number of lives: 1.37 million
No underwriting risk. Fee business
only.
Shared structureNetwork management – Contact Center – Claims processing
Health Segment Dental SegmentAssistance
Services
3
Recent events
ACQUISITION DENTAL – Tempo announced on June 9, 2008 the acquisition of Prevdonto (Plano de Assistência Odontológica Unidonto Ltda.), a dental benefit plan company that offers services to approximately 130 thousand beneficiaries in the northern part of Brazil.
ACQUISITION HEALTH – Tempo announced on June 6, 2008 the acquisition of a home care company called Staff Builders. This acquisition made Tempo the leader in the home care market. Tempo then created Efectiva Saúde Gerenciada in order to consolidate the HomeCare business as one company.
CONTRACT WITH MARÍTIMA SEGUROS - On June 12, 2008, Tempo and Marítima Seguros finalized a service providing contract in the Specialized Assistance Segment. Through this contract, Tempo will offer its Specialized Assistance services to over 500,000 insured items pertaining to Marítima.
FINANCIAL AND OPERATINGPERFORMANCE
5
Tempo posts 87.2% increase in EBITDA
NET REVENUES
Solid volume growth in all business segments
EBITDAEconomies of scale and
synergies continue to boost margins
EARNINGS
Low effective tax rate and financial results improved
Earnings
2Q07A 2Q08A
134,1 169,0
Net Revenue - Tempo (R$MM)
2Q07A 2Q08A
10,1
18,9
EBITDA - Tempo (R$MM)
7.5%
11.2%
EBITDA EBITDA margin
2Q07A 2Q08A
7,2
16,5
Earnings - Tempo (R$MM)
6
Health segment
REVENUESRevenue growth driven by
lives increase and Home Care acquisition
SG&ADilution continues
2Q07A 2Q08A
72,6 99,0
Net Revenue - Health (R$MM)
2Q07A 2Q08A
2,6
7,9
3,6%
8,0%
EBITDA- Health (R$MM)
2Q07A 2Q08A
11,2 13,8
15,5%13,9%
General and Administrative Expenses - Health (R$MM)
General and Administrative Expenses Expense Margin
EBITDAEBITDA powered by growth
and M&A
EBITDA EBITDA margin
7
Dental segment: 2008 pro forma results
REVENUESStrong top line growth
powered by M&A and solid organic growth
EBITDAContinues EBITDA margin
expansion
All figures in this slide take into consideration the acquisitions made in 2007 and consolidated into the Company's financials starting January 1st, 2008 even though they were waiting for approval by ANS.
2Q07A 2Q08A
5,4
18,2
Net Revenue- Dental (R$MM)
2Q07A 2Q08A
1,0
4,5
17,9%
24,7%
EBITDA - Dental (R$MM)
2Q07A 2Q08A
3,4
11,9
55,7%
46,0%
Cost of Rendered Services - Dental (R$MM)
Cost of Rendered Services Loss Ratio (%)
LOSS RATIOSignificant improvement in
loss ratio
EBITDA EBITDA margin
8
Strong combination between organic and M&A growth
M&A GROWTH
Odonto Empresa: 220kOralTech: 30kFleming: 35k
Prevdonto: 130k
ORGANIC GROWTH
Organic growth accelerating retail sales
channel
47%31%
23%
Growth Breakdown - Dental Segment
Acquisitions 07 Acquisitions 08 Annualized OrganicOrganic Through Acquisitions
20%
202%
Growth Profile - dental segment
9
Assistance Services segment
2Q07A 2Q08A
56,2
58,8
Net Revenue - Assistance (R$MM)
REVENUEItems grew 13% with a
lower ticket
LOSS RATIO CURVESame shape confirms the
Trend
50,4%
47,1%45,9%
50,4%
52,1%
49,7%
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Loss Ratio - Assistance Segment
2007 2008
10
Assistance Services segment
SG&A and EBITDAEconomies of scale and synergies sustaining EBITDA expansion
2Q07A 2Q08A
6,6 8,5
11,7%
14,4%
EBITDA - Assistance (R$ MM)
2Q07A 2Q08A
35,9%
30,2%
20,2 17,8
General and Adm. Expenses- Assistance(R$MM)
Expense Margin General and Administrative ExpensesEBITDA EBITDA margin
11
Asset Light Operation
30,2
37,6
55,0
32,3
2,5 4,0 5,1 5,0
8%11%
9%
15%
2005 2006 2007 1H/08
Capex vs EBITDA (in R$ million)
EBITDA
CAPEX
%