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Good morning one and all. I would like to welcome you to Fleury Group Second Quarter '23 Results Conference call. Present with us today are Mrs. Jeane Tsutsui, Chief Executive Officer; Mr. Jose Filippo, Executive Director Finance; and Mr. Renato Braun, the IR Director.
I would like to takes this opportunity to inform you that this event is being recorded and that we are providing simultaneous translation into English. Initially, we will present the company results and then we will go to the Q&A session. At the end of this session, Mrs. Jeane Tsutsui will make the closing remarks.
All the figures we are going to quote here today are compared to the same period in the year 2022, except when specified and have been rounded to the nearest thousand. Before proceeding, I would like to clarify that this presentation may contain information about future events. Such information is not just historical facts, but would reflect the wishes and expectations of the company management. The words believes, expects, plans, anticipates, estimates, projects, targets and the like are intended to identify statements that necessarily involve known and unknown risks.
Known risks include uncertainties which are not limited to the impact of price and service competitiveness and uncertainties also include market acceptance of services, service transactions of the company and its competitors regulatory approval, currently fluctuation changes in the mix of services offered and other risks described in the company's remarks.
I would now like to turn the floor over to Mrs. Jeane Tsutsui.
Good morning to all, and thank you for your participation in our second quarter '23 conference call, which marks the beginning of the disclosure of Grupo Fleury's results after the business combination between Fleury and Instituto Hermes Pardini, which took place on April 24. This reinforces our growth and strengthening strategy as one of the most relevant diagnostic medicine companies. In the company we started writing a new chapter in our history based on a well-defined strategy of building an integrated health ecosystem, and we deliver one more quarter of consistent results.
In the agenda, we will initially present a business overview, evolution of the Lab-to-Lab then move on to the financial highlights. As you have been following in our disclosure, Slide 5 illustrates the strategic positioning set forth by Grupo Fleury as a health care ecosystem, we continue to strengthen our diagnostic medicine core with recognized brands and partner laboratories throughout the national territory.
We offer services at different stages of care from prevention with vaccination, checkup, primary care, consultations in person and by telemedicine, secondary care with medical specialties such as orthopedics, ophthalmology, fertility, drug infusions and tertiary care with low complexity surgeries. We are increasingly building care journey solutions that contribute to the sustainability of the health system.
Slide 6 illustrates the fourth growth avenues. The first is B2C diagnostic medicine increasingly presenting the competitive advantage of scale and revenue with a foothold in all segments. The second avenue is B2B diagnostic medicine, which allows us to expand our addressable market and increase logistics efficiency. The third avenue is New Link, strengthening our diagnostic medicine and increasing the integration of patient journey. All of this allows us to explore new avenues of growth.
Slide 7 shows you that the Fleury Group reaches a new level with complementarity of brand portfolio and expansion of geographic coverage, the business combination between Fleury and Pardini results and revenues of BRL 7.1 million and EBITDA of BRL 1.6 billion. If we consider the year 2022 we have 520 service units in the main economic centers of the country with regional brands recognized for quality and relationship with customers and doctors. We have 20,000 employees and 4,300 doctors.
In Slide 9, we see the Lab-to-Lab business works with a decentralized production model that allows us to be highly competitive in the market. This was reinforced with the business combination, considering our regional technical areas. We have a strong technical reputation with customers with the benchmark for quality and reliability. The high volume process by Lab-to-Lab provides operational leverage with dilution of fixed cost and market share gains in areas such as toxicology and genomics.
On Slide 10, you see the Lab-to-Lab business has served 7,300 customers, mainly laboratories that pharmaceutical companies and verticalized operators in more than 2,000 cities in all regions of the country. This business line has been showing consistent growth with a CAGR of 15.2% and it has highly specialized logistics, it carries out 390 routes in the national territory travels 93,000 kilometers every day, which corresponds to 2.3 labs around the world with sample traceability.
Before presenting the financial highlights for the second quarter '23, I would like to clarify that we offer in addition to accounting results figures on the basis for the period of this year and the same period last year. According the table presented in Slide 12, the accounting results for the second quarter, '23 captures Fleury's quarterly results and Pardini's results from May 2023.
The unaudited pro forma results for a simple comparison contemplates a 3-month, for the quarter and 6 months for semester of Fleury and Pardini as if both operations were combined in the same period between 2022 and '23. On Slide 13, we bring you the financial accounting highlights of the second quarter '23. Taking the business company to a new level, we achieved a record quarterly revenue of BRL 1.8 billion, up for 49.2% vis-a-vis the same period last year. With consolidation of Pardini's May and June results the quarter was marked once again by the recognition of the Fleury brand, which recorded growth of 13.2% growth in the solidity of the premium brand that combines tradition, quality and innovation with customers satisfaction and relationship with the medical community.
We also highlight the performance of service units in Rio de Janeiro with a growth of 24.4% and the performance of mobile care, which grew 40.4% vis-a-vis the same quarter last year, representing 7.6% of the group's total revenue. Another highlight was the revenue of New Links, which reached BRL 180.6 million, an increase of 137% over the second quarter '22, explained by organic growth and the expected effective acquisitions of Saha and Retina Clinic.
We have 4 new units, 4 for diagnostic medicine and the rest for New Links. The EBITDA for the second quarter '23 reached BRL 421.1 million (sic) [ 429.1 million ], an increase of 44% over the second quarter '22 with a 25.9% margin. This result is due to the discipline in controlling cost and expenses and the new mix of Fleury and Pardini, the business combination in the second quarter had a onetime cost of BRL 65.5 million mainly relating to acquisition expenses and the integration process.
For the second quarter '23, the net revenues totaled BRL 117 million, an increase of 66.9% vis-a-vis the second quarter '22 with a 7.1% margin. On Slide 14, we see the pro forma result unaudited and for simple comparison, considering the 3 months of Fleury and Pardini quarterly revenue was BRL 2 billion, 12.7% higher than the second quarter of '22. 5.2% for organic growth and 17.4% for ex-COVID growth. The Fleury brand grew 13.2%; Rio de Janeiro, 9.9%; mobile service, 25.9% and New Links 137% in pro forma.
EBITDA ex business combination expenses pro forma reached BRL 464 million in the quarter, an increase of 14.4% over the second quarter '22 with a 25.2% margin. These figures demonstrate the consistency of our results and give us peace of mind to continue our strategy for organic and inorganic growth and leverage this combination to improve our service offering to patients, physicians, partner, laboratories and health care operators.
I would now like to hand the floor over to Jose Filippo, Executive Director of Finance and IR, who will comment on our financial performance.
Thank you, Jeane, and good day to all. I will continue now with the presentation speaking about financial results for the second quarter '23.
On Slide 15, we can see that the book growth revenue reached BRL 1.8 billion in the second quarter, with a growth of 49.2% compared to the same period of the previous year. If we discount the effects of COVID test, this growth rises to 54.5%. The mobile service segment continued to grow and registered an expansion of 44%, representing 7.6% of gross revenue in the quarter. New Links registered an expansion of 137% with organic growth of 30.5%, in the quarter.
The accounting revenue grew 31.4%. We go on to Slide 16, considering the pro forma view, gross revenue reached BRL 2 billion in the second quarter, with a growth of 12.7% vis-a-vis the same period last year. If we discount effects of the COVID test, this growth increases to 17.4%. Total organic growth was 5.2%. The mobile service segment, as already mentioned, once again had significant growth of 25.9%, representing 7.1% of gross revenues in the quarter. The total growth of New Links in the quarter was 137%, with an organic growth of 30.5%.
We go on to Slide 17, and we see that once again, the contribution of COVID exams and gross accounting revenue had a drop vis-a-vis the previous year. In the second quarter, the COVID revenues corresponded to 0.5% compared to 3.9% in the second quarter '22. In the pro forma view, there is a reduction in the share of COVID revenue from 4.6% in the second quarter '22 to 0.5% in the second quarter '23, reaching the lowest level since the beginning of the pandemic.
On Slide 18, we show you that gross revenue from service units reached BRL 1.3 billion in the second quarter '23 with an increase of 33.8% compared to the second quarter '22, with an emphasis on the 13.2% growth of Fleury brand. Rio de Janeiro and Sao Paulo also had expressive growth of 24.4% and 38.1%, respectively, in addition to the 32.2% growth of the regional brands.
On Slide 19 on a pro forma basis, gross revenue from service units grew 11.2% in the second quarter, reaching BRL 1.4 billion, mainly reflecting the 13.2% growth of the Fleury brand mainly reflecting market share gains, growth in covered lives and expansion in mobile service. In Minas Gerais, we recorded a growth of 10.9% as a result of the expected effect of the acquisition of Methodos in October '22. Sao Paulo recorded a growth of 10.8% due to the good execution of the a+ brand in Sao Paulo.
In Rio de Janeiro, there was a growth of 9.9%, indicating a gain in market share, mainly due to the expansion of supply and services despite the contraction of the number of beneficiaries served by supplementary health. The growth of 8.5% of the regionals was due to our good performance in the Northeast.
We go on to Slide 20 with the accounting results of new links and platforms. The gross revenue totaled BRL 193.8 million, up 137% vis-a-vis the same period last year. And in the health platform, revenue reached BRL 13.1 million in the quarter. For the half of the year, the combined revenues of New Links and health platform reached BRL 141 million, a growth of 103% vis-a-vis the previous year.
On Slide 21, we show you the pro forma results of New Links and the health platform. Jointly, they grew 116% in the second quarter of '23 and 94.8% in the first half of '23. And the health platform, the pro forma revenue reached BRL 13.7 million in the second quarter '23. We highlight New Links with a growth of 137% in the quarter with 35% of organic growth.
We go on to Slide 22. In the second quarter '23 gross profit reached BRL 455.1 million, a growth of 51.5% compared to the same period last year, with a margin of 27.4%. For the year, the accounting gross profit reached BRL 111 million with a growth of 29% vis-a-vis last year.
In Slide 23 in the pro forma vision gross revenue reached BRL 500.6 million in the second quarter '23, an increase of 14.6% and a gross margin of 27.2%. For the entire year, the pro forma gross revenue reached BRL 1 billion with a growth of 8% compared to last year.
In Slide 24, we see that operating expenses in the second quarter '23 increased by 65.7% compared to the same quarter of the previous year, reaching BRL 191.8 million, equivalent to 11.6% of net revenue because of expenses related to the business combination of BRL 65.5 million. For the semester operating expenses reached BRL 134 million, an increase of 59% and 11.5% of net revenue due to the expenses relating mainly to the business combination.
In the next slide, Slide 25, we see that the pro forma operating expenses in the second quarter '23 amounted to BRL 216.6 million, equivalent to 11.8% of net revenue, including the expenses linked to the business combination. Once again, the pro forma expenses grew 25.3%, reaching BRL 433.1 million, impacted by the expenses relating to the business partnership.
On Slide 26, we can see that in the second quarter of '23, the EBITDA ex business combination expenses reached BRL 429.1 million for the quarter, an increase of 44% over the second quarter '22 with a margin of 25.9%. The adjusted EBITDA reached BRL 364 million, an increase of 24.1% over the second quarter '22 with a margin of 26.8%.
In the next slide, #27, we see that pro forma EBITDA for the second quarter '23 ex business combination expenses reached BRL 464 million, an increase of 14.4% compared to the same period of the previous year with a margin of 25.2%. The adjusted EBITDA reached BRL 398.5 million, an increase of 26.7% compared to the second quarter '22 and a margin of 26%.
We go on to Slide 28. Now the accounting profit reached BRL 117.6 million, a growth of 66.8% if compared to the same period the previous year with a margin of 7.1% for the year. This profit reached BRL 211.5 million, a growth of 16.9% vis-a-vis the previous year with a margin of 7.3%.
On Slide 29, we can see that the investments in the quarter totaled BRL 106.3 million, a decrease of 5.8% compared to the second quarter '22. Most of this investment was focused on Digital and IT for the year. Investments added to BRL 177 million, a reduction of 1.3% compared to 2022.
We go on to Slide #30. In the second quarter operating cash reached BRL 322.4 million with a growth of 7.7% compared to the same period of '22. The conversion rate stood at 88.7% of EBITDA. On Slide 21, we note that leverage was 1.3x at the end of the quarter, stable compared to the previous quarter and below the same indicator at the end of the second quarter of '22.
Our leverage has allowed the company to face the scenario of higher interest rates in a more calm way. Our leverage has been below the 3x guidance established by debt instrument in Slide 32, we can see the amortization schedule of debentures financing and acquisitions of the Fleury Group highlighting our robust cash position against our obligations. We have a healthy debt profile with an average maturity of 3.4 years without a concentration of maturities. Before we go on to the question-and-answer session.
I will hand the floor over to Jeane to conclude the presentation.
Thank you, Filippo. Our excellent results show that we remain firm and disciplined in executing the integration plan and extracting synergies that were estimated between BRL 220 million of incremental EBITDA per year with 95% of capture by the third year.
Once again, we emphasize that we have established solid follow-up processes. We have experienced executives leading 60 integration initiatives, a management structure led by the Integration Director, a system for monitoring action plans of financial planning team to calculate synergies and a steering committee with members in the Board of Directors.
In the course of this process, it is an additional satisfaction to note that the cultures of Grupo Fleury and Grupo Pardini are convergent as planned with the business combination, we have reached a new level of revenues for group with new healthy levels of profitability, we are reinforcing our B2C, Diagnostic Medicine, B2B, New Links and Digital platform.
We have robust governance to ensure short-term deliveries combined with a long-term strategy. All of these elements are key to meet a growing demand for quality health care services that occurs with population aging and the consequent increase in chronic diseases. We have a unique positioning in this sector. We are the reference in diagnostic medicine in the country, and we offer outpatient solutions that range from prevention to treatment and continue -- contribute to the sustainability of the health system.
Our ambition is doing increasingly strengthen ourselves as one of the leaders in health care in Brazil, adding value to the system through prevention and integrated care in people's health journey. I am very grateful to our medical and health care teams who allow us to continue to be at the forefront of medicine, bringing innovations, productivity gains and solutions to the health care system and all of our stakeholders. Thank you very much and we are now available for the question-and-answer session.
[Operator Instructions] The first question is from Vinicius Figueiredo from Itau BBA.
I would like to explore some topics in greater detail. First of all, when we look at the regions that are part of the business unit when we break down performance, we're under the impression that we see a very robust growth in your more mature brand, the Fleury brand.
I would to understand which have been the main drivers of this acceleration if there is something happening with the mobile segment that is significant. And if we can look upon this as being sustainable in the medium and long run, still speaking about this when we see the improvement in costs when you speak about occupation and utilities. We see an expressive improvement. We would like to know if there are measures that you have adopted, if this is due to the premium brand in the revenues.
And the last point, a comparison quarter-on-quarter, when we look at the pro forma figures, we can see that the year-on-year growth is quite strong but it is sequential from the first to the second quarter revenues and volume sort of went sideways, which is not very common when we look at a longer period of time. What is this due to? Is it a normalization on frequency? Is it due to a quarter that had several holidays? Simply to be able to understand this point.
Well, thank you, Vinicius, for the questions. We truly did observe a consistency in the Fleury brand, which is our 97-year-old premium brand. We have carried out several initiatives for this brand, reinforcing the medical staff, strengthening the unit. We have enhanced the offer in the more mature units. An example is JK where we increased services by 7% per square meter. And we see the Fleury customer that is highly satisfied with our services.
And through time, we have created other services around the Fleury brand and the presence of New Links reinforces the diagnosis of the Fleury brand. But you write a mobile service has been growing in all brands in the Fleury brand 5.9%, we have expanded our routes going to the hinterland, going to the coast and generally, the mobile services contribute to this growth, but we see a high occupation in our service units.
So the Fleury brand and our vision is a brand that ever more shows excellence, innovation and customer satisfaction. And we expect that it will continue to grow as mobile services do. Regarding cost, I will give the floor to Filippo, and then I will come back to speak about revenue and volume.
Good morning, Vinicius. Now if we look at the two maps, as we mentioned at the beginning of the presentation, we're comparing the year 2023 for the two companies. And with the combined partnership and without a combined partnership in 2022. In the pro forma, we have a simpler comparison. You mentioned service occupation and utilities in the accounting part this line item grows because we have combined business that we did not have in 2022.
And it may be difficult to compare for you because we're dealing with figures that were not combined last year. Now if we look at the pro forma, we have a fair comparison, so to say, we see a minor dilution in terms of the revenues, we went from something that last year represented 15.2% of the revenues and now is 3.1%. This is due to our operating leverage.
As you grow revenues, well, this line is made up of fixed cost, and it allows you to have dilution and we have taken advantage of this characteristic. So this is how we look upon this. Now if you require greater details, please advise us so that we can dwell more on this.
Very good. Thank you, Filippo. And Vinicius, we have all of our action plans regarding synergy. But in the second quarter, we have very little influence on the synergy captured. We should only see this in coming quarters. It's a cost efficiency and a dilution of fixed cost. When we work on quarter-on-quarter comparison, the first quarter compared to the second quarter, in the first quarter, we had a greater influence of COVID tests. We now observe a normalization.
We only have 0.5% of our revenues coming from COVID, and we believe that this volume will remain. This is not a guidance, but we do observe stabilization in the second quarter of '23, we had a figure that was somewhat higher in terms of holidays compared to the first quarter. And we remind you that because of these holidays, we end up having an impact, of course.
But speaking generally, our growth is very robust. If we look at the service unit, we already spoke about Fleury, but we see that a+ has a growth of 14% in the quarter. Rio de Janeiro, a growth of 10% for the quarter. So these brands continue to have very robust growth which allows us to believe that this should remain in the coming quarters.
The next question is from Mr. Giordano from JPMorgan.
I'm going to return to the growth of the Fleury brand, and there has been a growth in lives coverage. I would like to explore the terms of these new contracts, if I understood correctly. And what's going to happen with B2B going forward, if COVID will be more relevant, if you could further quantify the growth of this specific line item, separate what you had as part of the legacy of Pardini and the B2B, the hospital part of Fleury.
I know that there were some contractual changes that were somewhat hampering the growth of this part of the business.
Well, thank you, Joseph for the questions. You're right. We have explored all of the initiatives we have in the Fleury brand, and we remind you that the general trend of the people in Brazil is aging chronic diseases. And yes, we have closed some contracts for the Fleury brand. These are very important contracts for us and they show a position of partnership with health care operators always emphasizing the part of prevention of more integrated solutions satisfaction with our services.
And of course, operators in general do detect value in the Fleury brand because of this premium positioning. We had a growth in the number of lives. It's not a significant growth, Joseph, but we did bring in new contracts for the Fleury brand with a very satisfactory level when it comes to negotiations. Regarding B2B, we see the Lab-to-Lab continues to grow, but it does have an influence, a higher percentage of COVID test in Lab-to-Lab in hospitals for the second quarter of '22.
The combined company pro forma had 4.6% of revenues in the second quarter of 22% and 0.5% in this quarter when we look at the B2B line specifically, this percentage is higher because Lab-to-Lab was a significant reference for laboratory tests, last year, we no longer have this revenue and also in hospitals last year, all patients entering hospitals had to have a COVID test protocol.
When we compare the year with the second quarter '23 in B2B, we had 2 effects: a drop in the revenues of COVID and year-on-year, especially in the hospital line item, a drop of revenues because of the phaseout of a contract that we have already explained to the market.
Our outlook in hospitals is that we will continue to renew our portfolio of contracts. And in Lab-to-Lab, we have a great opportunity of gaining market share. We have 24 technical areas after the partnership with Pardini and the time to release test is important for hospitals, and this will enable us to increase our competitiveness. If we exclude COVID tests, we have a good growth in Lab-to-Lab. And I remind you that a CAGR of Lab-to-Lab from 2018 to '22 was 15% per year.
The next question is from Gustavo from Goldman Sachs.
I would like to pose two questions if you allow me. The first, I would like to explore the health platform topic, New Links. And you mentioned that in the growth -- while the growth was interesting. And apparently, we had an expansion of margin that was reasonable.
We understand that, of course, this dilutes the consolidated margin somewhat, but it was consolidated from the year-on-year viewpoint. Now when we speak about New Links and I would like to know if there is a gain in mix that you begin to realize? That is my first question.
My second question is more strategic, this week we saw news about ANVISA allowing drug stores to carry out some tests like glycemia, for example, how are you following up on this evolution? Is this something new for the company? Do you have to address issues of accreditation. How are you looking upon this topic?
Well, thank you, Gustavo, for the questions. Let's begin with the health platform. We see a very robust growth for New Links. Organic is 30% growth. We did open up new service units and orthopedics and medication infusion. But we're occupying our agendas better in the existing units and the orthopedic clinic in the cornea eye center.
And we also brought in the revenues of the acquisition of Saha and others. Now throughout time we have the opportunity of enhancing the margin of New Links. Structurally, the margins are different. They're different from margins from diagnostic medicine, but we do detect a path for improvement.
We have increased the volume with infusion of medication and immuno biologics. We are able to create better negotiations with pharmaceuticals. We improved the margin and to your question, if the mix changed, yes, infusions have been growing significantly with Saha and also organically. We still have improvement of margin that is possible. We understand that with growth, with this greater volume of New Links and the ramp of the units that we inoculated there's a period of ramp up and we will improve the margin of New Links.
It will never reach the margin of diagnostic medicine. But we have also invested less capital. In terms of ROIC, it is a healthy ROIC. Regarding the strategy that you mentioned the RNC 380 that was approved reviews the 302 resolution.
This is a very broad resolution. It regulates 3 levels of people that render medicine. It also speaks about supervision and it pays attention to quality, and it allows drug stores to carry out rapid tests, which are triage screening tests. They're not diagnostic tests with the complexity that we have with different stages and different mechanisms to control quality.
We don't foresee direct competition with these fast test compared to what we do in Fleury. Diagnostic medicine has its complexity. It is a benchmark for the physicians. These rapid test will be done by people directly at drug stores as triage, and they don't have the coverage of supplementary medicine. It will simply broaden access, which is important. I always mention the example of a pregnancy test normally carried out at a drug store, but the physician and the patient will have to confirm this with a true laboratory test. And all of those discussions, we have associations [indiscernible] for example, participating in public consultations with a focus to guarantee the quality of these tests that go to the end user.
The next question is from Mauricio Cepeda from Credit Suisse.
I have three questions here. The first referring to the medium term and your strategy for this and the balance of tickets and diagnostic volumes, we see that the volume of exams has grown well. it's somewhat more difficult to do a comparison of tickets because of the part that is contaminated by COVID, and you have mentioned the growth of accreditation as a way of increasing the volume as well. So in terms of a strategic operation. What are you going to do in the medium term? Are you going to reposition your premium brands to increase the volume and which would be the trade-off of this? We have seen a downgrade in health plans, and well, this is significant.
My second question refers to demand. If you can explain the growth of demand for the diagnostic market and which is a share that you have achieved here, share and volume, not in accreditation. And the third question that was just asked about the health platform if that new RDC, the new resolution for drug stores, if you thought about using your health platform to explore the out-of-pocket diagnostic market using a more technical and sophisticated product for these triage test and taking an additional step, if -- well, which is the positioning that you're going to adopt for the platform, how are you going to use the platform to leverage the business?
Thank you, Cepeda for questions. Regarding the first question about the tickets. We see that the gross revenues for exam, have dropped in pro forma, and we significantly increased the volume of exams. We have two components here. First, as you mentioned, a decrease in the COVID test when we compare quarter-on-quarter, those who came to take COVID test slip with last exams, but they had a higher ticket because this was a molecular test compared to routine clinical exams. So there's a lesser share for COVID, but there's an increase in routine clinical tests and because of our mobile service, for example, people carry out several routine exams.
This increases the volume, increases the number of exams per patient. And when we work with simpler exams, the revenue per exam will decrease. It's like doing a cholesterol test or magnetic resonance tests. So we are bringing in more routine tests, clinical test because of these movements, we have carried out. We had a growth with Methodos, which is a brand that basically carries out clinical exams or the mobile service that also has that profile.
What explains this change, therefore, is that somewhat different mix, less COVID, more routine tests regarding the repositioning of tickets, what we have done, we're not changing our premium tickets at all. We have brought in more lives, so we have become ever more competitive, especially in areas like Sao Paulo and Rio de Janeiro with a+ and the Rio de Janeiro brands bringing in contracts where we made an agreement to guarantee higher volumes, and we were more competitive in price.
This is interesting for us. We occupy the afternoon periods where we had greater availability, taking those new lives to the afternoon slot. And this helps us dilute the fixed cost of the unit of magnetic resonance or ultrasound exam. So we're bringing in more lives, making agreements with the operators because there is a cost pressure at this moment. And it is very important to include increased volume to dilute fixed costs.
It's very difficult to divide what is a market share specifically, we follow up on market share. In general, we have increased our market share depending on the region in Rio de Janeiro, for example, there is no relevant growth of lives, but we grew 10%. This means that we have made strides in share especially because of the new contracts. And in a certain way there is a component of frequency that is also important with a higher number of chronic diseases.
We know that the profile of an elderly patient with more chronic diseases will end up having that characteristic. So the health platform is a very good topic. We have matured significantly. I answered this when speaking about New Links with Gustavo. There is a time to mature, and we now have that business combination with Pardini that brings in more products into the platform, they have precision care, for example, we had other initiatives and there is a positive outlook that we will proceed with new solutions, especially for the topic that you mentioned out of pocket.
Now depending on the brand nowadays, we have a higher percentage of out of pocket in some brands in the Northeast that out-of-pocket can reach 20% to 25%. And in digital solutions, we're designing new products for the B2C, direct B2C and taking the opportunity to use the capillarity that we have and eventually creating products with a partner laboratories in Lab-to-Lab. So there are plenty of opportunities to explore new routes for the growth of revenue with the platforms and also thinking about pro forma.
The next question is from Fred Mendes from Bank of America.
I have two questions as well. In terms of cash burn, there is a variation of BRL 540 million quarter-on-quarter and BRL 300 million linked to Pardini. With variations in the medium term for this. If you could give me more color here? Secondly, if you could reinforce a part of organic growth. Of course, I'm not referring to guidance, and what will happen with diagnostic medicine, this would be important.
Fred, good morning. Well, let's speak about cash generation first, and then I will give the floor to Jeane. As you mentioned, it is important to understand the evolution of net debt. When we look at the graph that we presented, what basically happens here is the following. We have a payment of an installment in cash for the business combination so that we can execute and conclude this.
If there was a payment of dividends made by the Pardini Institute before the closing, this was discounted and then we added the complementation of this that refers to BRL 300 million, as you mentioned. Now basically, this is a significant variation that we have in cash. Another variation in net debt was the incorporation of the net debt of Pardini when we combine the businesses. When you look at the graph that we show you in the release, it compares the net debt at the end of June with the net debt in the first quarter, where we did not have Hermes Pardini. So this delta is also explained the Pardini net debt, which is approximately BRL 300 million.
At the end in the presentation, we showed you that in the quarter, we had an operational cash generation of BRL 300 million and then the cash burn, the payment of dividends, we had BRL 106 million in CapEx for the quarter, also impacting cash, of course, and BRL 120 million in interest rates because of the management of our debt. So the logic is BRL 300 million of operating cash generation and the rest was consumed because of the combination of business, the payout of dividends and the combination of CapEx and interest rates.
Thank you, Filippo. Let's speak about the organic growth of New Links. We do see a very good outlook of maintaining robust organic growth because of some factors. First, we have structured and learned from the model, I will give you clear examples. The infusion of medication and immuno biologicals. We acquired Saha and another company, we now are able to carry out better negotiations with pharmaceuticals for the purchase of medication.
We know how to operate this and we can use space in our diagnostic medicine units. In almost all of the units, we have rooms for functional tests that we use in the morning to carry out diagnostic medicine test. They have couches, infusion pumps, and we can use this also for the infusion of medication.
We have the business model, and we can expand it organically. Another example is orthopedics, the coming of Vita brings us the knowledge and the training of professionals that allows us to have an organic expansion of new units and new spaces. And based on this medical knowledge, the training protocols and the leadership in physical therapy, we can expand organically. We're going to continue on with the organic growth of New Links as an avenue for growth. New Links, of course, is highly connected to diagnostic medicine. And we offer this full solution that avoids waste and it avoids the claims for the operators. And with this, we have been able to make partnerships with the health operators. Thank you, Fred, for your question.
The next question is from Leandro Bastos from Citi.
Simply one question referring to the business combination. I would like to understand if here you have contemplated a recession or a contractual adjustment for expenses of that sort going forward. And because of the synergies, the BRL 160 million, if they came out of cash this quarter?
Yes, to begin by the end. In truth, everything was paid in cash. There were some retention payments that were very minor. This total amount has already been disimbursed and it relates to our capacity for provision. We're speaking of advisers to conclude the business, attorneys, the consultancy that gave us support in the integration plan.
A part refers to retention and other related issues. And of course, this has allowed us to make the payment or the provision when we speak about the recession of contracts and costs, this will be recognized as it comes up. We cannot provision for those costs now unless we would have for excellent accuracy or the evidence that the cost is happening.
This is for the projection and execution of our synergy plan and only then will it be recognized, we attempted in these payments and provisions that we came up with. We dealt with this as nonrecurrent expenses, and we made adjustment. But going forward, they will no longer be nonrecurring.
They will become operational expenses so that we can avoid making adjustments every quarter and the synergy relates to both of these, the cost of execution, recession for example, but the benefits will be part of the operating expenses. And we imagine that this is what we will see going forward as of the execution of the plan that we worked with, with our advisers.
The next question is from Artur Alves.
Congratulations for your results, and thank you for the very clear disclosure of this merger. Now this integration was quite rapid. You had 95% of synergy. I would like to know what is happening at present compared to the time line that you presented. Secondly, considering that your essence is in mobile services. Is there still opportunity for expansion or enhancement of services in the areas that historically belong to Hermes Pardini. These are my questions.
Thank you for the questions. First, referring to integration, we have been very disciplined in terms of execution with the governance that we have set up. All of the actions are being implemented and we're following up very closely on them.
Artur, at this point in time it's difficult to say if we're going to capture more than we had set forth. We have the commitment of 200 to 250 more in incremental EBITDA, and we're executing according to our schedule. This is what we can tell you now. We will try to capture any additional opportunity, but it's too early on to say if we will go beyond those values or not. We continue with a great deal of discipline in this execution.
The critical point is that the entire organization is involved, not only the executives that are leading this, but all of the directors of a single company acting in a very convergent way with a converging culture so that we can carry out not only the integration, but also continue to grow and capture synergy.
Regarding the mobile services, yes, we do have opportunities to grow, 25% growth in pro forma shows that we are looking upon this business as a significant avenue, a significant opportunity because we learned how to do this by increasing route by putting the mobile service as a hub to decrease the distance for the collection compared to the patient's house, the use of technologies. You mentioned Pardini.
Pardini has mobile services in its different region but the combination allows us to use different models, and we're now assessing how to optimize these models based on the learnings of each organization in the past using health mob that Pardini already brings in. So we already see a change in behavior of the customer who does like the mobile services, the NPS is high. We have increased the number of routes, and we're offering a new level of digital services. And this takes us to believe that this is a business that will continue to grow.
The next question is from Caio Moscardini from Santander.
Well, there has been a growth, significant growth because of the reduction in COVID. What can we expect going forward as the basis for comparison is more difficult. And another question refers to your cyber attack in May. Did this have a negative impact on revenues. And if you have any sort of insurance for this type of event? The first time that this happened, you did receive a certain amount.
Thank you, Caio, for the question. I missed out at the beginning of your question. If you could repeat the beginning of the question, please.
Yes, of course. It's about the dynamic of growth in the number of exams with patient cards that has grown a great deal because of the reduction of COVID test. What will happen with this going forward because the base for comparison has become more difficult?
The number of exams for patient card has some factors. First of all, if you work with a population with more chronic diseases. Of course, you will have a higher number of exams, but this is a slow evolution. It doesn't explain the growth now. The growth now refers to COVID exams and the mix that brings in more clinical analysis in our service centers like Methodos, for example, and bio clinical exams or because of what is happening with the mobile service that leads to enhancing the number of clinical exams.
We tend to work quite a bit with the mix. And it's interesting to grow the number of clinical exams. We already have the production centers. We dilute the fixed costs, and this helps us gain productivity. In our vision, the exams per patient card, if we follow this trend of bringing in more volume of clinical exams. And I remind you that Pardini Lab-to-Lab and diagnostic medicine in the unit tends to have a higher number of clinical exams.
And we will see that we will maintain the number of exams per card regarding your other case of the cyber attack that we had on May 7. Since 2021, we had gotten prepared with investments, with contingency plans and the creation of what we call cybernetic resilience, that is to say a faster recovery. And this is what happened. We had an incident on May 7, but we continue to service everybody at the units and hospitals.
This did cause an impact on the operation. But in general, there was no impact on our revenues. In our Fleury brand, we grew 13.2%. For example, this shows the level of maturity of the organization in terms of recovery.
We're very careful when it comes to security. We do have an insurance policy. Well, we know that there's an entire negotiation involved with this but yes, we do have insurance that we might need at some point in time, but we did not need it now. Now when this happens, we have a notification for the policy. We're now putting together the documents to support our claim. Unfortunately, this attack was repeated, and we're going to proceed as we did before. Thank you.
Well, it seems to be much less impacting than it was the first time.
Thank you, Caio. It is precisely that this time, we were prepared and we were able to reduce the impact.
As we have no further questions, we will return the floor to Mrs. Jeane Tsutsui for her closing remarks.
Thank you very much for attending the earnings release for the second quarter '23, we're highly confident as a single company, Grupo Fleury and Grupo Pardini working with a clear strategy to build an ecosystem with discipline to capture synergies and to enhance the number of services for all Brazilians in the country. Thank you very much, and have a good afternoon.
The conference call for the Fleury Group has come to an end. We would like to thank all of you for your attendance, and have a very good day.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]