We increased our physical capacity by 1,799 total beds in the period between December 2020 and December 2021, completed the construction works of Maternidade São Luiz Star, which will be inaugurated in 2022 and acquired 12 new hospitals, also increasing our presence in Brazil. We also completed the expansion of existing units and entered into a 10-year agreement with Vale to manage two of the company’s hospitals in the state of Pará.
With a 173-bed capacity, of which 90 are suites, 21 semi-intensive beds, 4 adult ICU beds and 58 neonatal ICU beds, the new Maternidade São Luiz Star will have a total area of a little over 36,000 square meters in an upscale region of São Paulo.
On the outside, the 24-story and 4-underground-level structure will be a landmark in the Vila Olimpia region and on the inside, it will feature an obstetric emergency room with 18 rooms for patient care and an exclusive emergency room; state-of-the-art diagnosis center and advanced fetal medicine center, MRI, CT scan, among others; surgical center with 8 rooms - one of thema smart room - and 8 large delivery rooms, equipped with heated bathtub, exclusive bathroom, exercise machines to support labor and a humanized decor for the expectant mother.
All apartments and suites will be decorated and automated with artificial intelligence, voice commands and automatic blinds, lighting and air conditioning, providing comfort for families. There are also large spaces designed for patient and family comfort, in addition to a restaurant with panoramic view on the 22nd floor.
Patients and companions will also rely on nutrition and dietary services with menus signed off by French chef, Rolland Villard.
With a total built-up area of over 22,000 square meters, the new tower of the future Hospital São Luiz Osasco (current Sino Brasileiro) will offer patients and visitors much more than the 90 additional beds that will increase the unit’s capacity to 296.
The inauguration of the new structure will be followed by a significant improvement of the complex’s operational flow, expansion and modernization of operation rooms – with technology including robotics– as well as new SADT equipment, including the installation of a new Hemodynamics.
A new doctors’ lounge will be available to provide a better experience to the medical staff, plus the new obstetric center will offer the new Espaço Nascer area and lounges for families and visitors to watch the birth deliveries, in addition to the implementation of 2 prenatal, delivery and postpartum (PPP, in Portuguese) rooms.
Finally, the entire new building – which will offer the possibility to convert ICU rooms into admission rooms if needed – will enjoy cutting-edge technology and focus on sustainability, with systems for the rational use of water and energy resources.
Located in downtown Jacareí, in the countryside of the state of São Paulo, the hospital is a local and regional reference in healthcare services.
Founded in 1991, it is acknowledged for offering quality services, experienced professionals, respected medical staff and a client focused operation.
Located in Vila Yolanda, in the capital of the state of São Paulo, the Hospital has 153 beds and receives averagely 800 patients per month in the admissions department. It is currently being renovated to increase its service capacity.
Health excellence center in the city of Mauá (SP), the Hospital is located in a 10,000 m² area and offers 112 beds, including adult ICUs, and neonatal and pediatric ICUs, serving 1,200 patients every day. The first hospital in Mauá to receive the ONA III – Excellence Management certification, it is one of the few hospitals in the ABC region that enjoys financial independence and makes its own investments. It has a highly-specialized, modern and equipped surgical center, which includes a hybrid hemodynamics room, ready for low-complexity procedures as well as major and minimally-invasive surgeries.
Located in Olaria, in the city of Rio de Janeiro (RJ), it offers nearly 150 fully equipped, operational beds and is a reference in the Leopoldina region. It stands out for offering excellent services, humanized care and a modern infrastructure.
Located in a highly populated region in the southwestern region of the city of São Paulo, Serra Mayor is a general hospital that will have 102 beds after construction work is completed. It has expansion capacity for 80 additional beds.
Biocor, a renowned, high-complexity and reference general hospital in the metropolitan region of the city of Belo Horizonte, has 350 beds.
We plan to build a new tower in the hospital complex, under the premium brand “Star” (BH Star), with 150 to 200 beds, totaling 500 or more.
Proncor is a reference general hospital in the city of Campo Grande (MS) and was the highlight of Rede D’Or São Luiz’s arrival in the region. It offers 136 fully equipped beds for patient care.
High-complexity, reference general hospitals in the city of João Pessoa (PB), the Nossa Senhora das Neves (HNSN) and Clim hospitals have, altogether, 235 fully-equipped beds for patient care and expansion capacity for 400 more.
Both institutions are leaders in their operational markets and will work as a platform for the company to explore new opportunities in the State of Paraíba.
A reference maternity and general hospital in the city of Feira de Santana (BA), Hospital Santa Emília offers 109 beds.
The construction of additional 35 beds is in progress, plus a future expansion capacity of up to 115 beds, totaling 224. Feira de Santana is the second largest city of Bahia population wise, and the largest in the countryside of Brazil’s Northern, Northeastern and Midwestern regions.
Novo Atibaia is a high-complexity general hospital, a reference in the city of Atibaia (SP) and other cities in the region (Bragança Paulista, Itatiba and Mairiporã, among others). With 150 beds and immediate expansion capacity for 16 additional ones, totaling 166.
Orthopedic hospital located in the city of São José dos Campos (SP) with 12 admission beds, a capacity for 1,660 surgeries/year and serves 21,000 patients/ year. It is a reference in Orthopedics and Traumatology in the Vale do Paraíba, North Cost and Serra da Mantiqueira regions, in the state of São Paulo. It has a broad and modern infrastructure, with the most modern and advanced orthopedic prevention, diagnosis and treatment equipment.
* In 2021, the Company also acquired Hospital Aeroporto, in Lauro de Freitas, in the city of Salvador (BA), Santa Isabel, in São Paulo (SP) and Arthur Ramos, in Maceió (AL), which are still pending the Brazilian antitrust authority’s (CADE) evaluation to be completed.
Hospital Yutaka Takeda
Parauapebas (PA)
Hospital Cinco de Outubro
Canaã dos Carajás (PA)
Both hospitals, whose real estate properties belong to Vale, run outpatient, emergency and medical- hospital activities for adult and pediatric patients. The 10-year agreement reinforces Rede D’Or São Luiz’s partnership with Vale, a company committed to the investment and long-term development of the region where the largest mining complex in the company’s history is located.
Rede D’Or São Luiz’s consolidated net revenue stood at R$20.4 billion in 2021, up by 45.3% compared to the previous year, mainly boosted by our capacity to attract a greater patient flow and perform a larger volume of surgical procedures; to efficiently manage our units with healthy occupancy rates during the year; and to accelerate our expansion process, increasing the number of operational beds to 8,946 by the end of 2021. In 2020, there were 7,393 beds.
In 2021, Rede D’Or São Luiz’s EBITDA reached R$4.9 billion, up by 97.3% compared to 2020. Excluding non- recurring costs and expenses, especially those related to fighting the Covid-19 pandemic, our adjusted EBITDA was R$5.7 billion in the year, 79.2% above 2020 figures.
Despite the challenges imposed by the pandemic and all efforts devoted to ensuring the safety and the delivery of the best clinic outcomes to our patients, Rede D’Or São Luiz’s operating cash generation, before interest, rates and social contribution was R$ 1.6 billion in 2021. This result is evidence that we are on the right path, increasingly confident about delivering our ambitious expansion plan, increasing enhancing our offer and service quality considerably.
| 2021 | 2020 | 2019 | |
|---|---|---|---|
| Revenue | 21,820,899 | 14,946,817 | 14,159,127 |
| Sale of products and services | 22,803,109 | 15,776,646 | 14,989,059 |
| Provision for disallowance | (1,103,432) | (833,749) | (833,852) |
| Other revenues | 121,222 | 3,920 | 3,920 |
| Supplies acquired from third parties | (8,991,333) | (6,108,608) | (5,111,547) |
| Cost of Services sold | (8,449,526) | (5,823,637) | (4,796,892) |
| Materials, energy, outsourced services and other expenses | (520,065) | (282,231) | (296,261) |
| Loss/ recovery of assets | (21,742) | (2,740) | (18,394) |
| Gross added value | 12,829,566 | 8,838,209 | 9,047,580 |
| Depreciation and amortization | (1,228,670) | (844,527) | (708,797) |
| Net added value | 11,600,896 | 7,993,682 | 8,338,783 |
| Added value received in transfer | 5,778,776 | 8,161,991 | 1,571,713 |
| Income using the equity method | 79,338 | (6,091) | 4,427 |
| Financial revenue | 5,699,438 | 8,168,082 | 1,567,286 |
| Total added value | 17,379,672 | 16,155,673 | 9,910,496 |
| Distribution of added value | 17,379,672 | 16,155,673 | 9,910,496 |
| Personnel and charges | 6,242,615 | 5,088,672 | 4,443,108 |
| Taxes, fees and contributions | 1,672,675 | 937,523 | 1,342,810 |
| Interest, rents and other operating expenses | 7,786,647 | 9,670,055 | 2,933,061 |
| Dividends and Interest on Equity | 1,677,735 | 428,329 | 1,191,517 |
Aware our indirect impacts in the regions where we operate, we seek to constantly ensure that the interferences from Rede D’Or São Luiz’s operations are as positive as possible for the different stakeholders.
In 2021, we carried out construction projects for 8 new units and expansion of existing ones: São Lucas, Memorial Star, DF Star hospitals and construction of the Guarulhos (SP), Circular do Bosque – Morumbi (SP), Alphaville (SP) hospitals, the UDI’s New Tower and the External Management building (RJ). Together, they represent investments of R$690.1 million and creation of 8,145 indirect jobs. The projects foster the hospital care expansion in their regions; include several improvements to the surroundings of those units and the adoption of sustainable construction practices, providing a better quality of life to the population of the regions as well as to Rede D’Or São Luiz’s employees.
Thirteen special projects were also carried out, which include Medical Centers, Oncology, Pathological natomy, SADT and Nephrology, with investments of R$37.3 million and creation of 1,037 indirect jobs. Payment of municipal taxes amounted to R$646,760, estimated based on the total amount spent with services x municipal service tax (ISS in Portuguese) rate for the city that received the new project.
Further to the important milestone achieved at the end of 2020, when Rede D’ Or São Luiz had its initial public offering (IPO), year 2021 marked the intensification of our relationship with the market. After pulling off the third largest IPO in the history of the Brazilian stock exchange, when the company became part of a restricted group of domestic companies with market cap higher than R$100 billion, Rede D’Or São Luiz wrote another important chapter of its history in its first year as a public company when the company had its Follow-On at the Brazilian stock exchange.
2021 was also the year when Rede D’Or São Luiz’s shares were included in two important indexes from the Brazilian stock exchange, the traditional Ibovespa and the IBrX-100, which gathers the 100 most representative and liquid companies in the domestic market.
The operation’s success ratifies the capital markets and society’s trust in our vision to be a reference in hospital management and provision of high- efficiency medical services. Thus, we reinforced our commitment to our customers, partners, employees and shareholders to continue on our sustainable growth path, expanding our excellent services to even more Brazilian states.
The follow-on was completed in May 2021 and raised R$ 4.9 billion. Out of this amount, nearly R$1.8 billion were allocated to strengthening our cash position to speed up our ambitious project of organic and inorganic expansion, which is expected to be completed by 2025. These new funds allowed us to increase the amount to be invested in organic expansion to R$9.4 billion, incrementing the number of mapped projects from 32 to 43. Following this increase in investments and project volume, the number of expected beds was bumped up to 6,663 beds, 25.9% more than the 5,294 beds at the time of the IPO.
In 2021, Rede D’Or São Luiz’s shares were included in the MSCI Emerging Markets Index, which gathers listed companies from 27 countries considered as emerging markets, including Brazil. Being a part of this index gives the company more visibility in the international investors community and contributes to attract an important trade flow from index funds, i.e., investment funds that seek to replicate a particular theoretical portfolio or benchmark index.
2021 was also the year when Rede D’Or São Luiz’s shares were included in two important indexes from the Brazilian stock exchange, the traditional Ibovespa and the IBrX-100, which gathers the 100 most representative and liquid companies in the domestic market. Rede D’Or São Luiz’s securities were included in the Ibovespa with a theoretical weight of 1.2631% and are ranked 19th among the 91 securities of 84 companies comprising the index at the end of the year.
4.9 billions follow on
of which R$1.78 billion were allocated to cash. The offering made possible to add 11 new projects to the existing expansion plan in 2020, incrementing the capacity by 1,369 beds.
The index is updated by B3 three times per year, in January, May and September.
Furthermore, our shares are part of several indexes prepared by B3, among which we emphasize the IGC, which gathers companies with high corporate governance level, and the ITAG, which gathers companies that offer the best conditions to minority shareholders in the event of sale of control.
Shareholding structure 12/31/2021
Percentage
In 2021, securities’ liquidity represented by the average daily trading volume of Rede D’Or São Luiz’s shares stood at R$142.0 million.
Another factor that is even more relevant for publicly-held companies is the presence of individual investors in the capital markets. By the end of 2021, Rede D’ Or São Luiz had 56,000 individual shareholders, 37% more than the 41,000 recorded at the time of the IPO.
| RDOR3 on B3 | |
|---|---|
| Existing shares - end of the period | 2,010,367,155 |
| Treasury shares - end of the period | 38,913,916 |
| Closing price (R$) - end of the period | 44.83 |
| Average closing price (R$) | 54.66 |
| Average daily traded volume (R$ million) | 142.00 |
| Average number of daily trades | 11,641 |
| Market cap (R$ million) - end of period | 88,380 |
In a Material Fact notice disclosed on May 26, 2021, Rede D’Or São Luiz informed the completion of the public offering of 68,860,000 shares, comprised by a primary offering of 25,040,000 shares and a secondary offering of 43,820,000 of the company’s shares. The offering raised R$4.9 billion, of which R$1.78 billion were allocated to the company’s cash flow. After the offering was completed, our capital stock came to R$7.58 billion.
Funds raised in the transaction will be allocated to finance the company’s expansion plan, which includes the acquisition of hospitals from third parties and the construction of new hospitals, in addition to the expansion of units that are already part of our portfolio. The offering made possible to add 11 new projects to the existing expansion plan in 2020, incrementing the capacity by 1,369 beds.
As set forth in our Bylaws, Rede D’ Or São Luiz commits to remunerate its shareholders with at least 25% of adjusted net income1 recorded in every fiscal year through the payment of the annual mandatory dividend. This year, we approved and paid to our shareholders the amount of R$656.9 million, related to fiscal year 2020. Furthermore, in September 2021, we announced and paid R$1.96 billion as dividends related to fiscal year 2020.
Dividends paid related to fiscal year 2021
| Reference Date: | Type | Approval Date | Payment Date | Ex-dividend date | Amount (R$) | Gross amount per share (R$) |
|---|---|---|---|---|---|---|
| Dec/21 | Interest on Equity | December 14, 2021 | 12/29/21 | 12/17/2021 | 186,083,505.04 | 0.09 |
| Sep/21 | Interest on Equity | September 03, 2021 | 9/17/2021 | 9/09/2021 | 168,922,454.10 | 0.09 |
| Jun/21 | Interest on Equity | June 21, 2021 | 7/05/2021 | 6/24/2021 | 156,220,490.35 | 0.08 |
| Mar/21 | Interest on Equity | March 25, 2021 | 5/18/2021 | 3/31/2021 | 145,687,604.19 | 0.07 |
Adjusted net income is the portion of net income suitable for distribution after all adjustments and deductions related to statutory reserves and/or reserves for investment projects.
In 2021, Rede D’ Or São Luiz invested R$5.6 billion, of which R$2.0 billion were for new hospitals development, expansions and renovations, in addition to the maintenance of existing units, and R$3.6 billion were for the acquisition of new hospital assets.
Two important projects are in the final construction stage: Hospital Maternidade São Luiz Star and the expansion of Hospital São Luiz Osasco (previously Hospital Sino Brasileiro), both in the state of São Paulo. We also denote other 9 ongoing construction works: Hospital Memorial Star, in the city of Recife (PE); expansion of Hospital São Rafael and Hospital in addition to the expansion of Hospital Aliança to create the Aliança Complex, also in the same city; the new tower of Hospital Vila Nova Star and the expansion of Hospital Villa Lobos, in the city of São Paulo (SP); expansion of Hospital Ribeirão Pires, in the city of Ribeirão Pires (SP); Hospital São Luiz Campinas, in the city of Campinas (SP); and the modernization and expansion of Clínica São Vicente, in the city of Rio de Janeiro (RJ).
As a result, considering the delivered works and completed acquisitions, investments mentioned above allowed Rede D’Or São Luiz to end 2021 with a total of 10,618 beds, posting a strong increase in total capacity, compared to the 8,819 beds at the end of 2020.
With a view to stay on a sustainable path, Rede D’ Or São Luiz acquired R$50 million in a Sustainable CDB (Certificate of Deposit) issued by BTG Pactual, according to the Sustainable Financing Framework published by the bank in October 2021 and reviewed with the Second Opinion Report by Sustainalytics in November 2021. This transaction is aimed at eligible assets and projects, according to criteria defined by the bank that seek to foster environmental and social benefits generated by assets or projects financed or refinanced by raised funds, in line with international principles.
On December 31, 2021, Rede D’Or São Luiz’s gross debt stood at R$25.2 billion, up by 18.8% compared to 2020. This indebtedness increase throughout the year was mainly due to the purpose of improving the company’s debt profile and expand its maturity term.
By the end of the year, almost 75.8% of Rede D’Or São Luiz’s gross debt was denominated in Brazilian Reais, while the remaining amount was fully hedged against foreign exchange variations via hedge and derivative operations. The average cost of debt by the end of the year was equal to CDI + 0.7%, with an average term of 5.9 years.
Considering the strong cash position of R$12.6 billion on December 31, 2021, Rede D’Or São Luiz’s net debt was R$12.7 billion at the end of the year. Lastly, 31.6% of net debt was pegged to fixed interest rates, while the remaining amount was tied to floating interest rates. Therefore, indebtedness measured by the net debt/EBITDA ratio stood at 2.6x in 2021.
Prepayment of debt security issued abroad:
On August 26, 2021, Rede D’ Or São Luiz partially prepaid debt securities issued abroad (Senior Notes II) whose principal amount is US$315 million, with fixed remuneration of 4.5% and maturing in 2030.
19th issue of debentures:
On August 27 and September 6, 2021, Rede D’Or São Luiz issued the 2nd and 3rd series of the 19th debenture issue in the amounts of R$2.5 billion and R$1.5 billion, respectively, totaling R$4.0 billion maturing in 2031. Debentures are remunerated by the CDI + 1.9% per year, with half-year payments. There are no guarantees.
6th issue of Real Estate Receivables (CRI): May 11, 2021, through a securitization company, Rede D’Or São Luiz completed its 6th issue of nominative, book-entry Real Estate Receivables (CRI in Portuguese) in the amount of R$1.5 billion, with maturity in 2036 in three annual amortizations in 2034, 2035 and 2036. CRI remuneration was set at IPCA + 4.9347% per year, to be paid semiannually. Concurrently, we contracted a derivative financial instrument to hedge against the IPCA inflation rate, converting into interest corresponding to 100.0% of CDI plus 1.35% per year. There are no guarantees.
7th issue of Real Estate Receivables (CRI): On December 3, 2021, through a securitization company, Rede D’Or São Luiz completed its 7th issue of nominative, book-entry Real Estate Receivables (CRI in Portuguese) in two tranches, in the total amount of R$1.0 billion. The 1st tranche in the amount of R$400 million will mature on December 15, 2031 and will be remunerated by IPCA + 5.5758% per year, to be paid semiannually. The 2nd tranche in the amount of R$600 million will mature on December 15, 2036 and will be remunerated by IPCA + 6.1017% per year, paid semiannually. Concurrently, we contracted a derivative financial instrument to hedge against the IPCA inflation rate, converting into interest corresponding to 100.0% of CDI plus 0.56% per year for the 1st tranche and 1.403% per year for the 2nd tranche. There are no guarantees
In May 2021, we announced the expansion of our business relationship with Amil by adding (or supplementing) Amil’s coverage to 21 of Rede D’Or São Luiz’s hospitals, including an oncology clinic.
One of the highlights of the agreement is the debut of Gloria D’Or and Niterói D’Or hospitals, both in the state of Rio de Janeiro, which had never been accredited with Amil and 3 Star brand hospitals located in the cities of Rio de Janeiro, São Paulo and Brasília.
This partnership consolidates the importance and attractiveness of the services provided by both companies, creating a positive impact on more than 1.3 million Amil beneficiaries in the Federal District and the states of Rio de Janeiro and São Paulo.
