For additional information, please read carefully the notice at the end of this presentation.
STRICTLY CONFIDENTIAL | NOVEMBER, 2020Based on data from September, 2020
CompanyPresentation
Hospital Esperança Olinda – Olinda, PE
2
The reader/investor should not rely solely on the information herein to make decisions with respect to trading thesecurities issued by Rede D’Or São Luiz. The document may also contain prospective statements, which are subject torisks and uncertainties as they are based on expectations of the company’s management and on available information.
The company is under no obligation to update these statements. The Company’s future financial situation, operatingresults, market share and competitive position may differ substantially from those expressed or suggested by forward-looking statements. Many factors and values that may impact these results are beyond the company’s ability tocontrol.
Future projects could differ materially due to market conditions, changes in laws or government policies, changes inoperational conditions and costs, changes in project schedules, operating performance, demands by clients andconsumers, commercial negotiations or other technical and economic factors. For more detailed information, pleaserefer to our Financial Statements, Reference Form (Formulário de Referência) and other relevant information on ourinvestor relations website ir.rededor.com.br.
Disclaimer
33
Agenda
SECTION 1 Market Overview 04
SECTION 2 Rede D’Or At a Glance 07
SECTION 3 Investments Highlights 11
SECTION 4 Financial Track-Record 30
SECTION 5 ESG and COVID-19 Update 33
SECTION 5 Appendix 36SECTION 6
For additional information, please read carefully the notice at the end of this presentation.
STRICTLY CONFIDENTIAL | NOVEMBER, 2020
Section 1
Market Overview
Hospital Barra D’Or – Rio de Janeiro, RJ
5
Unique business model combining scale, growth and profitability
Rede D´Or: Singular Track Record in Sustainable Growth, Profitability And Scale Leadership
Source: Rede D’Or São Luiz, FactSet, Bloomberg, IBGE, ANS and companies’ public data | Note: (1) EBITDA adjusted for: EBITDA of hospitals recently opened, SOP expenses, costs related to business combinations, incentive laws and other non-recurring items and M&A; (2) ROIC adjusted by greenfield and brownfield CAPEX and landbank, hospitals recently opened, SOP expenses, costs related to business combinations, incentive laws and other non-recurring items and M&A; (3) Considers Qualicorp’s 2019 consolidated net revenue; Rede D’Or holds 12.95% of Qualicorp’s shares
ROIC + 15%
EBITDA CAGR Last 5Y > 31%
EBITDA Margin> 27%
S&P 500
10 companies
Selected Group of Iconic Brands
R$3.7bn2019 Adj. EBITDA(1)
R$13.3bn2019 Net Revenues
+8,7k bedsas of September
2020
21.7%CAGR14-19A
Net Revenues
~R$2bn2019 Net Revenue
of brokerage business(3)
26.2%2019 Adj. EBITDA
Margin
~20.0%Adjusted ROIC of
last 6 years(2)
31.2% CAGR14A-19AAdj. EBITDA
-3.4mmtotal health beneficiaries
in Brazil since 2014
-3.1%Brazilian GDP decline
since 2014
Strong Financial Track Record
Solid growth with compelling margin profile
Delivering During the Most Challenging Backdrops
Operational excellence has surpassed macro challenges
Scarcity Value Amongst the Best Companies in the World
Only 10 companies in the S&P 500 have similar metrics + +
6
13,1
8,0
6,05,0
4,33,2 2,9 2,5 2,1 2,0 1,6 1,5
Brazil Has Strong Micro and Macro Secular Tailwinds
Source: Rede D’Or São Luiz, ANAHPH, CNES, ANS, CIA and FBHNotes: (1) Considers beneficiaries growing from 47mm to 57mm in 2029, considers a Occupancy rate and average length of stay constant; (2) Considers the average of beds.
Brazilian healthcare market is changing on the back of structural demographic fundamentals
Economic structure of healthcare market in Brazil…
...and a faster population aging …combined with solid demographic fundamentals…
Average annual rate of population change (%)
0,8
0,6
0,6
0,5
0,3
0,0
-0,2
-0,3
# years for population cohort of +65 years to growth of 7% to 14%
2126
26
45
45
65
69
73
85
115
(2011-2032)
(2000-2026)
(1970-1996)
(1947-1992)
(1930-1975)
(1944-2009)
(1994-2013)
(1938-2011)
(1890-1975)
(1865-1980)
+21mm people with +65 years
in the next 20 years
49mmtotal population with
+65 years in 2040
+20mm peoplein the next 20 years
Population
coveragePayersFunding
Rede D’Or’s target market
Public R$254Billion 3.9%
GDPPublic
75.8% ofBrazilianresidents
Under-penetrated market in terms of beds, with predominance of small hospitals
Hospital Beds Density Hospitals Overview in BrazilGrowing deficit in private beds
Bed Density (Beds/ #’000) Bed Density in Brazil (# Beds)
14.246
25.131 31.581
2019 2024 2029
WHO Recommendation(3-5 beds)
(1)
Brazil has a deficit of +14 thousand private beds
4.8274.267
2010 2019
560
61Beds(2)
✓ Small✓ Limited infrastructure
Brazilian Hospital Average Size (# beds)
1 2 3
1 2 3
3 governmentlayers
Private ~24.2%
HealthPlans
PrivateR$355billion
5.4% GDP
Individuals
Mig
rati
on
(# Private hospitals in Brazil)
For additional information, please read carefully the notice at the end of this presentation.
STRICTLY CONFIDENTIAL | NOVEMBER, 2020
Section 2
Rede D’Or At a Glance
Hospital Quinta D’Or – Rio de Janeiro, RJ
8
Rede D’Or’s Purpose and Culture
Offer excellent medical care,
expanding access to quality
healthcare
“
”
State-of-the-art Technology
People Driven
Long-Term Vision and
Commitment
Excellence in Execution
Obsessive Client-Focus
High Clinical Outcome High Perceived QualityStrong Financial
Performance+ +
✓ Platform driving growth for payor partners
✓ +2,000 clients and ~2mm insured lives by D’Or Consultancy
✓ High NPS index (67 overall and 89 for Star brand)
✓ Outstanding clinical outcomes and technology with high levels of NPS
Health Plans Employers/Families Patients Physicians
9
2007-2015✓ Gains of Scale✓ National Expansion
o Pernambucoo São Pauloo Distrito Federal
✓ Smart Track Innovation✓ SSC Implementation
1977-1997✓ First
Ecobidimensional✓ Pioneer One Stop
Shop Lab Concept
1998-2007✓ Innovative Network Concept Large
Resolutive Emergencies✓ Data Analytics✓ Hospital Network Concept✓ Accreditations✓ IDOR
2015-2020✓ Continuous Geographic Expansion
(PR, SE, BA, MA)✓ Innovative Payment Models✓ GTS✓ Richet/Qualicorp
More than 40 years shaping our ecosystem in the best possible way…
Rede D’Or is Always Thinking Ahead of The Curve
Source: Rede D’Or. Note GTS: Gestão Total de Saúde. SSC: Shared Service Center. (1) EBITDA adjusted for: EBITDA of hospitals recently opened, SOP expenses, costs related to business combinations, incentive laws and other non-recurring items and M&A; For 2009 excludes labs operation; (2) Starts from 2009 since it was the first year of audited financial statements
…Resulting in Unmatched Scale and Financial Performance
Adj. EBITDA MarginAdj. EBITDA
10 15 19 23 24 25 29 33 35 4538Number of Hospitals
CAGR 09A–19A
+42%
EBITDA Margin: +13 pp.
National ExpansionFoundation Creation of Hospital Network Ecosystem Consolidation
Rede D’Or’s EBITDA and EBITDA Margin(1, 2)
113 154 309 567 664
949
1,671 1,946
2,424 2,740
3,681
14.5%12.8%
14.8%18.1%
16.1%19.0%
25.9% 24.6% 25.7% 25.1%27.6%
2009A 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A
10
Rede D’Or’s Unique Value Proposition Drives Continuous Growth
Investment in people,
research and technology
Attracts proficient doctors and
professionals
Comprehensive Hospital Network
Extract the right margin and
operational leverage
Brand recognition and patient preference
Must have network amongst payors
universeVirtuous
Flywheel of Sustainable
Growth
For additional information, please read carefully the notice at the end of this presentation.
STRICTLY CONFIDENTIAL | NOVEMBER, 2020
Section 3
Investment Highlights
Hospital São Luiz Jabaquara – São Paulo, SP
12
How We Stand Out?
The Largest Private Healthcare Ecosystem in the Country
Distinguished Platform in a Market with Relevant Entry Barriers
Notorious Room for Organic and Inorganic Growth
National Presence and Huge Pool of Clients, Growing Addressable Market with our Payors Partners
Quality and Complexity Driving Revenue Growth and Share of Wallet Expansion
Technology Based Platform Driving Growth, Quality and Efficiency
1
2
3
4
5
6
13
Rede D’Or: The Largest Healthcare Ecosystem in Brazil
Prominent platform for healthcare solutions with a leadership position in all of the value chain not subject to regulatory risk
1
Source: Rede D’Or São Luiz, ANAHP, CNES and Companies IR | Notes: (1) Numbers of beds in September, 2020; (2) Operational beds; (3) Includes hospital oncology and oncology surgeries, (4) EBITDA is calculated as net income for the period plus net financial income (expenses), depreciation and amortization cost and expenses, and income tax and social contribution (5) Considers Adjusted EBITDA for all listed players
531
183 116
Diagnostic
◼ 3rd largest diagnostic player in Brazil
◼ Launched in 1977 and re-entry in 2018
EBITDA (2019)(5)
(R$mm)
865
720
310 291 282
Among the largest players in Brazil
3rd
Oncology
◼ Oncology services fully integrated with hospital chain
◼ Leadership position
◼ Launched in 2011
EBITDA (2019)(R$mm)
IDOr Medical Research
◼ Scientific collaborations with +60 countries
◼ 38 medical residency programs
◼ Launched in 2010
HighlightsNumber of Beds(1)
Hospitals
(#)
◼ Brazil’s largest independent private hospital chain
◼ Reference in quality and standards
◼ Launched in 1998
Complementary Services
◼ Complementary services: blood bank, dialysis, ambulatory and education
◼ Largest Blood Bank in Brazil acquired in 2017 (34.5% stake)
◼ Ambitious private education plan
Qualicorp and D´Or Consultancy
◼ The only insurance brokerage and consultant associated with a hospital company in Brazil
Revenue (2019)(R$ mm)
1st 1st 1st
2,003
138 77
1st 1st
+2mm insured lives in D’Or Consultancy
(3)
8,505
2,700 1,387
6,909 (2)
8,746
1,300(4)
(4)
Papers published in reputable international medical journals
+500
Citations+13,000
14
Appreciable balance of visionary founders and executive management with skin in the game, deep track record and experience
Rede D’Or’s Dream Team: We are Obsessed with Our People
Jorge Moll Chairman of the Board
Founder, entrepreneur and the vision behind Rede D’Or
Fernanda Tovar-MollCEO of Instituto D’OrLeader of one of the most influential medical research institutes in Brazil
Mauricio LopesOfficer
Longstanding expertise and understanding of payor relationships
Heráclito GomesExecutive Vice-Chairman
One of the most experienced managers in the Brazilian healthcare industry
Paulo HoffCEO of Oncology
Global reference in the medical community and synonym of physician empowerment
Mauro SampaioOfficer
Unparalleled experience as Company’s General Counsel & leader of M&A, legal and HR
Paulo MollChief Executive Officer
Vision, future and DNA of the founding family
Rodrigo GavinaOfficer
Great experience and knowhow of Rede D’Or’s operation
Thiago GomesM&A and Investor Relations
Crucial role in Rede D’Or’s unmatched M&A strategy
Otavio LazcanoChief Financial Officer
Deep expertise in corporate finance and relations with global investors
Rodrigo GuerraController
Profound understanding of group’s financial planning
Leandro Reis TavaresOfficer
Leader for innovative initiatives within the Group’s operations
Meritocracy as a Core Value of the Company
Main Executives with Long-Term Incentive Plan and Core Group with Non-Compete Contracts
Focus on Talent Retention of Key Executives
1
15
6 7 913 14 14 15 17 19 20 21
22 2
25
1011
1111
14178 9 11
1519
24 26 28 3034
38
1519
23 24 2529
33 3538
45
51
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
National Accreditations International Accreditations Total Accreditations Hospitals
Seeking Excellence with Superior Clinical Indicators
Excellence and obsession with quality showed in our level of accreditation
Source: Rede D’Or São Luiz; Note: (1) The difference between the total number of hospitals and number of accredited hospitals relates to hospitals that were recently launched/acquired and are being prepared for accreditation; (2) International accreditation requires that the hospital be opened for at least 6 months
1
Rede D’Or continuously improves its clinical indicators, evidencing its best-in-class operations
Evolution of Accreditations in Rede D‘Or Hospitals(1, 2)
Length of Stay in ICU
Surgical Mortality Rate
Catheter Related Bloodstream Infection
Urinary Catheter Infection
Ventilator Associated Pneumonia
2015 2016 2017 2018 2019
5.48 5.70 5.35 5.21 5.00
0.28% 0.25% 0.21% 0.20%
0.17%
2.03% 1.53% 1.23% 0.77% 0.79%
3.16% 1.70% 1.22% 0.99% 0.88%
3.90% 2.64% 2.15% 1.68% 1.43%
16
Public customer satisfaction reviews underline our superior product and service perception across brands
Upmost Focus On The Best Quality Standards and User Experience
Source: Rede D’Or São Luiz and Google Reviews as of November 5th, 2020. (1) Considers largest 10 hospitals by gross revenue in 2019 (2) Considers average of its all hospitals
Largest 10 Hospitals Rede StarAvg. UX Review: 4.0 Avg. UX Review: 4.81
4.8 4.7 4.8
Morumbi Itaim
4.3 4.0 4.14.1 4.0 4.1
4.34.54.5 4.5 4.4
Brasília3.63.63.5 3.23.8 3.6
2.93.74.04.0
2
1
Rede D’Or Consolidated NPS 67 Average NPS 89
17
Rede D’Or has a large addressable market and is able to capture demand in all tickets
Preferred Partner of Major Insurers and Non-Vertical Health Plans
Source: IBGE, Anaph and ANSNotes: (1) Estimated market share of beneficiaries not audited by ANS; (2) Considers verticalized players and health plan operators with revenue PMPM lower than R$ 200, excluding Unimeds
✓ Rede D’Or’s addressable market has more than ~42M lives and R$ +164bi in medical expenses
2
# of Beneficiaries (millions)
Private Healthcare Market
Medical Expenses in R$ Billion
Product Level 1Higher ticket plans
Product Level 2
Product Level 3
Product Level 4Lower ticket plans
GTS: RDSL’s exclusive quality network for low cost products
Core Markets
Unidas& Others Unimeds
LowerTicket Plans(2)Fenasaude
OutsideANS(1)
10.2M
R$ 63.5bi
8.9M
R$ 33.5bi
~6M
R$ +10bi
16.9M
R$ 57.1bi
11.0M
R$ 18.3biR$ +164Billion
+42Million
and local Unimeds
~90% of total
expenses
77% of
beneficiaries
and others
18
6434
57 10164
Fenasaúdeex-GNDI
Unidas & others Unimeds Addressable MarketOutside ANS
Total AddressableMarket
4.2%
8.1%
2013 2019
Relevant Player in a Still Fragmented Market2
Source: Rede D’Or São Luiz, ANAHP, ANS and IBGE | Note: (1) Considers medical expenditure as of 2019; (2) Estimated market share of beneficiaries not audited by ANS
Present in 9 metropolitan
regions, covering 188 cities
100%
56%
38%
6%1%
42%
31%
8%
18%
1%
2011-12
2005
2020
Present in
1 State
Present in
4 States
Present in
9 metropolitan regions
Rio de Janeiro
São Paulo
Distrito Federal
Northeast
South
Net Revenue Breakdown Legend
…and has shown an impressive track record in consolidating the Brazilian market
Market Size Overview(1)
Rede D’Or’s Market Share Evolution
Market largely supported by small players: huge potential for replacement and continue growing market share
+93%
(R$ bn)
Rede D’Or has great room to increase market share…
(2)
19
2015 2019
36%
64%
53%
47%
Alternative compensation models allow Rede D´Or to enhance its partnership with main clients while maintaining its profitability
Pioneer in Developing Alternative Compensation Models
Source: Rede D’Or São Luiz
Beneficial to Rede D´Or and its Clients……to increase partnership with our
clients…pioneer in developing alternative
payment models…
✓ Increase volume to Rede D´Or
✓ Reduces denials and administrative expenses
✓ Higher predictability to payors
✓ Lower costs and bureaucracy in auditing procedures
✓ Increase consolidation (reduces competitiveness of individual assets)
Case Study
2
Increase in the payor's claims with RedeD'Or in the same period
Increase in the Alternative Payments
with a client
Percentage of Rede D’Or Revenue (%)
2015
2019
✓ Alternative payment models represent most of our revenue
✓ Several years offering alternative models
✓ Part of our services can not be bundled (high complexity and low frequency procedures)
Fee-for-Service Alternative Compensation Models
20
6,881
19,722
2014A 2019A
4,599
Complex Surgeries grew2.3x faster than Total Surgeries
5.7
12.9
2014A 2019A
Rede D’Or is the platform of choice for many clients, evidenced by experienced significant volume growth (especially in high complexity patients)
Higher Quality Improving Patients Inflow and Increasing Complexity…
Sources: Rede D’Or São Luiz | Notes: (1) Considers both emergency and non-emergency visits (ambulatory, labs, oncology, etc.); (2) Complex Surgeries consider types of surgeries of level 11 – 14; (3) CAGR from 2015-2019, no surgeries in 2014.
+61%Transplants
+39%Tumor
Surgery
+124%Robotic
Surgery(3)
…specially in high complexity
TransplantTumor CardiacAverage Ticket
1.0x 2.1x 4.6x 5.3x
Average Ticket per Surgery(Base 100)
Increasing Volume…
CAGR 14A–19A +18%
One Time Visits (mm)(1)
3
CAGR 14–19
20% scheduled online with +1M monthly visits
136,707
286,773
2014A 2019A
Total Surgeries (#)
143,024
Complex Surgeries (#)(2)
21
2,3%(1.4%)
6.8%7,7%
1,5%
9,2%
Increasing Surgical Complexity& Oncology
M&AImpact
Readjustment, Payors Mix,Others
Internal(hospitals only)
External Services & Diagnostics Average Ticket2019
Breakdown of Rede D’Or ticket growth: complexity and volume driving results
…Driving Revenue Growth and Expanding Share of Wallet
Sources: Rede D’Or São Luiz, ANAHP and Bacen
Average Ticket Annual Growth Decomposition (CAGR from 2015- 2019, base 100)(base 100, %)
✓ State-of-the-art hospital network
✓ Best-in-class medical team
✓ Transparency and partnership with clients
3
IPCA CAGR 15-19
5.80%
22
Rede D’Or Technology Platform Enables Superior Outcomes for All Stakeholders 4
Technology Designed to Engage Members, Support Physicians and Help Payors and Employers
Patients
Providers
Payors
Employers
▪ Single patient concept
▪ One stop shop health portal
▪ On-demand access to care
▪ Digital / Virtual Care /
Telemedicine
▪ Single physician concept
▪ One stop portal for patient monitoring
▪ Clinical decision support
▪ Administrative task reduction
▪ Streamlined and real-time referral
management / scheduling
▪ Enhanced patient
engagement
▪ Patient steering through care
continuum
▪ Population health analytics and
care
▪ Product & benefits design tools
Cost control and
benefits
management
20% of medical
appointments
scheduled via our
digital platform
Care coordination
allowing for
penetration in new
markets
✓ Scalable operation
✓ Commercial negotiations on unified bases
✓ G&A, COG optimization
✓ Care coordination platform
✓ GTS Product
✓ Physician CRM
✓ +1 million website visits per month
✓ Unique solutions such as appointments scheduling and telemedicine
✓ ~20% of appointments already scheduled digitally
✓ Schedule in less than 2 minutes
Improving client
experience while
reinforcing our
indispensable role
to payors
Unique Digital Platform Increasing Volume of Patients
Data-driven Company Based on Top IT Infrastructure and Proprietary Data Tools
23
Rede D’or has a lot of room to grow in the states that already operates and also could accelerate its expansion to new states
Tremendous Addressable Market Through M&A…
Source: Rede D’Or São Luiz Dealogic, FBH, ANS and CNES
Geographic Footprint Main BrandsNumber of Hospitals
RDSL Market Share in Number of Beds per State
Private Beds (‘000) Average Size of Hospitals
5
19
17
4
4
3
1
1
1
1
12%
4%
7%
12%
5%
9%
5%
1%
1%
62
77
70
67
39
42
62
55
65
19
9
14
4
2
20
3
9
66
DF
RJ
SP
PE
BA
MA
CE
SE
PR
24
…Backed by an Undisputed Strategy and Expertise5
Source: Rede D’Or São Luiz and ANAHP
LARGE ADDRESSABLE MARKETPLUG & PLAY STRATEGY
1
23
4
Enter in new market through acquisition of
top-notch brands
Expansion through flow, complexity increase and synergies, becoming the
regional reference
Become an indispensable partner for both payors, patients and physicians
Use acquisitions as foundation for
organic and inorganic expansion
1 2
3
4
5
The Brazilian Hospital Market is Huge...
…Has a Significant Deficit in Private Beds…
...And is Still Very Fragmented…
…We Have Developed a Well Oiled M&A
Machine...
…that Has Become Unbeatable in M&A
Outstanding track-record of acquiring companies and expanding our ecosystem
35ONCOLOGY CLINICS
21SADT
35OTHERS
39HOSPITALS
NATURAL MARKET CONSOLIDATOR(# of transactions accumulated since 2007)
25
Rede D’Or’s Solid Track-record and Expertise of Integrating Multiple Targets…
Sources: Rede D’Or São Luiz. | Notes: (1) Does not include Samer, Rio Mar, Jutta Batista and Aviccena due lack of sufficient historical performance in December/2019; Financial performance improvement represents illustrative extrapolation of historical experience; applies vintage-weighted average of prior M&A cohorts
5.0%
21.0%
Year 0 LTM
16.0%
28.0%
Year 0 LTM
14.0%
24.0%
Year 0 LTM
17.0%
30.0%
Year 0 LTM
15.0%
29.0%
Year 0 LTM
10.0%
21.0%
Year 0 LTM
17.0%
29.0%
Year 0 LTM
8.0%
35.0%
Year 0 LTM
Key Areas ofValue Extraction
Investment in Best Technology
Integration of corporate areas
Growth of clinical outcomes and
NPS
Higher complexity and flow
Optimization of WK and cash management
Accreditation of Large Health
Insurance Plans
Procurement
+27p
+10p
EBITDA CAGR: +31%
EBITDA CAGR: +26%
5 hospitals
3 hospitals
+12p
+12p
EBITDA CAGR: +32%
EBITDA CAGR: +32%
3 hospital
1 hospitals
+11p
+16p
EBITDA CAGR: +22%
EBITDA CAGR: +120%
4 hospitals
3 hospitals
2010 Vintage 2011 Vintage 2012 Vintage 2015 Vintage
2016 Vintage 2017 Vintage 2018 Vintage 2019 Vintage(1)
+13p
+14p
EBITDA CAGR: +28%
EBITDA CAGR: +154%
4 hospitals
5 hospital
EBITDA Margin EBITDA Margin EBITDA Margin EBITDA Margin
EBITDA Margin EBITDA Margin EBITDA Margin EBITDA Margin
5
26
…With Recent Acquisitions in the Last Month Indicating the Same Integration Strategy
Sources: Rede D’Or São Luiz.
BA – 180 BedsRJ – 55 Beds
Clínica São Lucas
SP – 153 Beds
Hospital Central de Guaianases
RJ – 140 Beds
Hospital Balbino Hospital Cárdio Pulmonar
Rede D’Or acquired ~1,200 beds YTD
5
27
Average # of Beds per Hospital
Brownfields Impact
Outstanding Expertise on Delivering Projects: Aggregated ROIC of the projects of 23.4%(1)
Greenfield and Brownfield: Capital Deployment With Fast Payback and Significant Return on Invested Capital
Source: Rede D’Or São Luiz | Notes: (1) Considers sale leaseback. ROIC calculated as (EBITDA – Depreciation)*(1-tax rate)/(Depreciated CAPEX + WKC + Goodwill) for Dez-2019
Unmatched GF & BF Execution Track Record…. …Coupled With Sizable Execution Pipeline
Selected Mature Greenfields Examples
Norte D’Or Caxias São Caetano
ROIC
24.1%
ROIC(1)
247%
ROIC
20.8%
São Luiz Campinas260 Beds
Barra D’Or IIRio de Janeiro262 Beds
Selected Planned Greenfields
5
61 167
80247
0
50
100
150
200
250
Avg. Brazil Rede D'Or
Brownfields Opportunities
Selected Mature Brownfields Examples
ROIC
26.3%
ROIC
46.5%Vivalle
Oncologia SP
Sino BrasileiroSão Paulo89 Beds
Selected Planned Brownfields
Copa D’Or
ROIC
41.6%
ROIC
32.6%Sino
Brasileiro
28
Notable Positioning with Solid Entry Barriers Combined
Notable Barriers to Entry: Defensible Scale, Sustainable Growth & Profitability6
Infrastructure
Operational Capabilities
Unique Partnerships
Data & Technology
Leadership in top notch hospitals
Limited real state in premium
locations
Capital allocation
Significant brand reputation
Physiciansloyalty
Managementteam
Symbiotic Relationship with
Health Plans
Operational Leverage
with Suppliers
Alternative Payment Models
Data driven decision process
Technology serving patients and providers
29
The Beginning of a New Cycle
Beds expansion in current hospitals networkA
Potential to increase complexity and technological solutionsB
Addition of new clinical specialtiesC
Room to growth in new services (clinical trials, transplants and other)D
Significant growth potential through Educational ServicesE
Natural consolidator of a fragmented market with solid long-term fundamentalsF
For additional information, please read carefully the notice at the end of this presentation.
STRICTLY CONFIDENTIAL | NOVEMBER, 2020
Section 4
Financial Track-Record
Hospital Copa Star – Rio de Janeiro, RJ
31
Strong Financial Performance
Note: (1) EBITDA adjusted for: EBITDA of hospitals recently opened, SOP expenses, costs related to business combinations, incentive laws and other non-recurring items and M&A
Net Revenues
(R$bn)
Gross Profit and Gross Margin
(R$bn and %)
Adjusted EBITDA(1)
(R$bn)
Net Income and Margin
(R$bn and %)
Gross Profit Gross Margin
Net Income Net Margin
9,4
10,9
13,3
2017 2018 2019
2,4 2,7 3,7
2017 2018 2019
1,0 1,2 1,2
10.4% 10.8% 8.9%
2017 2018 2019
2,5 2,8 3,5
26,9% 25,7% 26,1%
2017 2018 2019
32
CDI63%
Fixed31%
IPCA6%
Debentures/NP47%
Bond35%
CRI12%
Others6%
BRL100%
USD0%
Clean97%
Secure3%
8.468
258 2851.586
5.314
2.067 2.022891 504
11.294
Cash andEquivalents
2020 2021 2022 2023 2024 2025 2026 2027 2028 Onwards
Debt Profile in September 31st, 2020
Debt amortization schedule (after hedging(2))
Debt breakdown (after hedging(3))
By instrument (%) By index (%) By currency (%) By ranking (%)
3
Notes: (1) Cash & equivalents and marketable securities; (2) The information presented reflects debt profile after hedging and the portion of foreign currency indebtedness which is not hedged; (3) NP (Promissory Note) and CRI (Real Estate Investment Certificate); (4) Leverage as Net Debt/ Adjusted EBITDA, considered Adjusted EBITDA 9M20 LTM of R$2.95bn
1
3
Net Debt (sep-20): R$ 12.6bn
Leverage(sep-20): 4.2x(4)
For additional information, please read carefully the notice at the end of this presentation.
STRICTLY CONFIDENTIAL | NOVEMBER, 2020
Section 5
ESG and Covid Update
Instituto D’Or de Pesquisa e Ensino - Rio de Janeiro, RJ
34
Rede D’Or results walk hand in hand with its commitment to sustainability and ESG initiatives
Social and Environmental Key Initiatives
Source: Rede D’Or São Luiz.
✓ Continued investments in multiple social projects to positively impact communities
✓ New projects designed with energy consumption optimization solutions
✓ Replacement and substitution of equipment aiming at lower CO2 emissions and energy/water efficiency
✓ Focus on climate-oriented initiatives and accountability through GRI reporting
Sustainability in Construction Projects
Participation in Sustainability Initiatives
Community InvestmentsEnergy and Water Efficiency
and Security
A B C D
R$61.4mm in investments over the last 5 years
Heat recovery steamgenerator, solar power systems
▪ Health insurance for +50,000 families▪ +R$50mm invested in social projects in
2019
35
Our network allowed us to be one of the companies that contributed the most to the COVID-19 response in Brazil
Taking a Humanitarian and Unquestionable Leadership Role in Battling COVID-19 in Brazil and Globally
Source: Rede D’Or São Luiz | Notes: (1) Breakdown: R$170mm from Rede D’ Or and R$100m from partners; (2) 2.3% of all COVID-19 cases in Brazil; 4.6% of all COVID-19 cases in the regions where Rede D’Or operates go through one Rede D’Or hospital; (3) Within Rede D’Or’s 51,000 collaborators
+
Social Actions Corporate Actions
Only 9 COVID-19 related
deaths(3)
Key Highlights
R$270mmtotal investments(1)
+35,000 hospitalizations
17.6%of IMV patients
2.3%of COVID-19 cases go to
one of our hospitals(2)
230,364 total number of
attendances
1 2
Our People Matter
Recent Financial & Operating Trends
◼ Temporary paid leave for high-risk group
◼ Reorganization of administrative teams
◼ Collaboration with Oxford University on the development of a COVID-19 vaccine
◼ Low death rate of 2.7%
◼ Average length of stay of 10 days
◼ Inflection reached in late June
◼ Expansion of 6 hospitals, increasing capacity
Field Hospitals
For additional information, please read carefully the notice at the end of this presentation.
STRICTLY CONFIDENTIAL | NOVEMBER, 2020
Appendix
Hospital Rios D’Or - Rio de Janeiro, RJ
37
We combine characteristics that will keep driving transformational growth for many years to come
Rede D’Or’s Recipe for Long Term Sustainable Growth
Largest Ecosystem The Dream Team High Technical Quality Excellent Perceived Quality
Largest Addressable Market
Small Share and Expanding Nationwide
Our Partners Win with Us
Bringing Sector Sustainability
Financial Performance
Technology Driven
Great Room for Consolidation Relevant GF and BF
Expansion
Relevant Entry BarriersQuality & Complexity Expanding Share of Wallet
67 89
+42%10 years
CAGR
+13ppMargin
expansion
Solid Fundamentals
2,5% 6,6%
1,9%
(15,0%)
Company A
Infrastructure
Operational Capabilities
Unique Partnerships
Data & Technology
+40% 247Avg Beds
+20%
% Change in beneficiaries Dec-19 vs Dec-17
Approx. ROIC GF: Approx. ROIC BF: # of Beds post BF:
Rede D’Or Revenue in Alternative payment models (%)Mkt Share in Medical Loss:
Founding shareholders
Experienced team in the private health system
100% retention of key executives NPS
+42MBenef.
R$164bnMed. Exp.
36%
53%
2017 2019
Bundle payments + packaging
5.8%6.8%
9.2%IPCA CAGR
15-19
TotalReadj.
Patients Payors Providers Employers
Deficit inprivate beds
+14k beds
+21mm
People with +65 years in the
next 20 years
61 beds
Brazilian Hospital Average Size
61Avg Beds
4.2%8.1%
2013 2019
8.1%Mkt Share
Source: Rede D’Or São Luiz and ANS. | Notes: (1) Market Share in Medical Loss as of December 31st, 2019
(1)
