Odontoprev SA

BOVESPA:ODPV3

Earnings Call Transcript 2021-Q2

[Stella Hong, executive]

Good morning, ladies and gentlemen, and thank you for holding. Welcome to the Odontoprev Conference Call to discuss the earnings of the second quarter and first half of 2021. I'm Stella Hong, IR Supervisor. And today, we have with us Mr. Rodrigo Bacellar, CEO; and José Roberto Pacheco, CFO and IR Officer of Odontoprev.

This webcast is being recorded and streamed only on the Internet, and the link is available at the company IR website at ri.odontoprev.com.br with the respective presentation is also available or on the company's YouTube channel.

This video conference has simultaneous translation. To activate, click on the interpretation button, the globe icon at the bottom right of your screen and choose the preferred language. You may also click on mute original audio.

Next, we'll start the question-and-answer session. [Operator Instructions]

The aforementioned instructions are also available in the chat as well as the presentation of this webcast. Before proceeding, let me mention that statements made during this call relating to the Odontoprev business prospectives, projections, operating and financial goals are based on the beliefs and assumptions of company management and on information currently available to Odontoprev.

Forward-looking statements are not a guarantee of performance as they involve risks, uncertainties and assumptions because they relate to future events and, therefore, depend on circumstances that may or may not occur. Investors and analysts should understand that overall conditions, industry conditions and other operating factors could also affect Odontoprev's future results and therefore, could lead to results that materially differ from those expressed in such forward-looking statements.

Now I'll turn the conference over to José Roberto Pacheco, who will begin his presentation. You may begin.

[Jose Robert Pacheco, executive]

Thank you, Stella. Good morning, everyone. Welcome. Thank you very much for your interest and trust. We are Odontoprev. I would like to thank you for attending this company event to present the performance of the second quarter and first half of 2021.

Now to begin the presentation on Slide #3, we can see data from ANS since 2006 where dental plans on the right-hand side of the screen, continue presenting continuous growth with over 20 million new members compared to the increase of only 11 million members and health plans, a more mature market segment. And specifically in 2021, we see the gradual resumption of the net additions in the industry, not only in health but also in dental, with a growth of 756,000 customers in the dental plans exceeding 27 million members by the end of May.

According to next slide, #4, we can see the revenues and average ticket of the main dental plans in Brazil. We highlight the Odontoprev portfolios in the corporate, large companies segment, and noncorporate segments, which includes SMEs and individual plans with an expressive leadership in both.

On the next slide, #5, according to ANS data, we can observe the company's presence in all regions of Brazil, in a generally domestic operation and the credit network in more than 2,500 municipalities and exclusive distribution channels, the only one in the market.

On next slide, #6, we can see the net addition of 152,000 new members in the quarter, and over 0.5 million, more precisely, 506,000 new members in the last 12 months, the best commercial performance in over 10 years, not only for the data for the second quarter, but also the 12-month evolution, as you can see on Slide #7.

On our next slide, #8, you can see the quarterly evolution of revenues with a sequential growth and the annual variation after the harsh impacts of the pandemic in 2Q '20, mainly in the months of April and May.

On Slide #9, we demonstrate the execution of the long-term strategy. We can see that the corporate segment revenues has grown 16% since 2014. And on the other hand, revenues of the noncorporate segment, meaning SMEs and individual plans, goes from BRL 284 million in 2014 to BRL 753 million in the last 12 months, a 16% growth per year in the period, adding a higher ticket compared to the industry and better profitability with relevant barriers of entrance.

On Slide #10, we can see the DLR per segment compared to 6 months of 2020 and the first 6 months of 2019, with a significant drop in corporate and SME DLR and stable in the individual segment. The consolidated DLR was 39% in the half year, more competitive than the history standard, showing the resilience of the Odontoprev business model that even in this scenario with high competition and the pandemic.

On our next slide, #11, we can see that bad debt was 2.8% in the quarter, lower than the historical levels, mainly given the transition and growth of the noncorporate segment and bank channels. The shareholders that give us such a very relevant competitive edge to act on company margin expansion.

On our next slide, #12, we can see cash generation. With the drop in the cost of services, gains in admin expenses, [ in additions ] in sales, SG&A, the half year EBITDA was BRL 297 million, greater than the realized a year ago with the margin increase to record figure of 32% in the period.

On the next slide, #13, we highlight the new profile of financial investments in which during the second quarter of this year, we moved part of the current assets portfolio to long-term government bond with post fixed and prefixed interest rates higher than the short-term interest rate with the same credit risk profile. These new instruments are accounted for in the curve, mitigating the volatility of the consolidated portfolio and will be held until maturity and were the main reasons for the higher financial income observed.

On our next slide, #14, we see that in the quarter, the company generated BRL 108 million in cash, ending the period with net cash of BRL 858 million with no debt. On Slide 15, we can see the annual shareholder compensation. On March 30 of this year, the Board of Directors approved a buyback program of up to 10 million shares aiming at maximizing value generation for shareholders, given that in the Odontoprev's view, the current price of shares does not reflect the fundamentals of the business model and competitive differentials and perspective of future return.

During 2Q '21, approximately 7 million shares were purchased at an average cost of BRL 13.05 at an investment of BRL 90 million, which added to the cash divisions already paid up this year totaled BRL 325 million in shareholder compensation in 2021.

Moving on to the end of this brief presentation. According to our next slide, #16, we have our ESG highlights. We published the Annual Sustainability Report last month in June based on the international guidelines set forth by the GRI. In addition, we highlight the recent achievement of the Amigo do Clima certificate in which total carbon emissions from company's foundation back in 1987 have now been neutralized in 2021.

So on the sustainability agenda, we were very pleased to receive yesterday the confirmation of Odontoprev as part of the portfolio, FTSE4Good, a British Index for the fifth consecutive year.

Moving on to the end on the next slide, 17, we see the continuous growth in the number of individual shareholders, which for us at Odontoprev is a great reason for pride, as well as the growth of our globalized investor base with approximate free float of 86% of -- with investors from over 30 countries.

Once again, we would like to thank you all for your interest and trust in the company. Now I would like to move on to the Q&A session in our common practice of a 45-minute earnings conference call. Thank you, everyone.

[Operator]

[Operator Instructions] Our first question is from Emerson Souza from Itaú BBA.

[Emerson Souza, analyst]

I have a couple. The first one is that I'd like to understand how the company sees the capital allocation rates moving forward given we have the tax reform and dividend distribution and this -- the people that are investing are very interested in this investment profile. So that's the first question.

Second question, I'd like to understand the performance throughout the quarter. ANS said it was a very shy performance, and you exceeded the expectations in net adds. So I'd like to know if that was closer to the end of the quarter, focused on a specific client or portfolio. If you can give us some more flavor on that would be great.

I'd also like to understand the DLR dynamics, still lower than 2019. So I'd like to understand what you expect, how that figure would behave in the second half if you believe that things will increase in July, given more vaccination happening.

[Jose Robert Pacheco, executive]

Emerson, I will make the first comment in relation to capital allocation. Historically, the company aims at distributing the cash generation for each period, not only in the year, but also every quarter. Our #1 priority has always been interest over own capital, and the company maximizes that tool every -- year after year, quarter after quarter, and that's how it will continue in 2021. Right after that, we also distributed relevant dividends. We're listed in the new market and the minimum payout is 25%. And in our bylaws, we have the double, 50%. And in practice, we do execute the double of that. So 100% has been our practice, our common practice.

Well, what's new, as we mentioned in the presentation is the buyback program. So the company has been trying to signal the market in relation to the current price of shares. In relation to the tax reform, it could increase the importance of buyback programs as of 2022 in addition to the fact that the company is a traditional participant in the market of inorganic transactions in the dental industry. So we have focused on that. There were a number of acquisitions that were made in the past years. And in the value chain, not only in the company's shares that we have in companies that we acquired, but also in the value chain, be it in material distribution or even outside Brazil. So I believe that it's a theme that we constantly dialogue with the market. As of next year, let's wait for the conditions of the tax reform. But without a doubt, we will not hesitate in paying attention to that and being extremely focused on adding value to all company shareholders.

Rodrigo, can you comment on the other points?

[Rodrigo Bacellar, executive]

Emerson, thank you for your question. About net adds in the month, you said that there was a difference in June to the others in rating. But what we can say is that net adds came from a big extensive front in the company. So we're talking about the contracts where the company negotiates in the name of employees, something more advantaged, and the employees adhere if they wish.

So we visit these companies to talk about open enrollment to see if they haven't adhered for the first time. And sometimes, some left the company, others joined the company, so we visit the company to talk to people and offer them the benefit again. In those operations, we had expressive gains during the pandemic because we have the possibility of doing -- bringing in these new members in a remote manner as we're doing this conference.

So if you consider that we've been improving in terms of sales peaks and the material that we take there, the planning and scheduling with these companies, in addition to the possibility of reaching out to more people in shorter periods of time. Sometimes we get meetings with 250, 150 employees. We even did one with 500 employees plugged into a conference like this one.

So that is a result of operational improvements that we dearly call fishing in an aquarium. The other thing is our integration with the Bradesco Health, not just Bradesco Health, but also their sales strength, their sales organization where we also act faster with better apps, better facilities. So the Bradesco sales strength is entering the game, be it to sell these packages with the health plans or dental plans alone, and that's why you see that result.

The dental system rollout is another important aspect. In 2018, Odonto System, when the transaction was approved, we were present in 11 states and 51 cities. The 11 states, after 3 years, we're in 22 states in Brazil, and the 51 cities became 211. So we are already providing quality services in our more affordable model in all of national territory. So we're adding a number of commercial activities and improvements that happen.

We wake up in the morning thinking of mouth and go to bed thinking of mouth. That's our focus here, dental. And we're also celebrating new partnerships in the medical area, so health care operators that do not have dental plans. And given our high quality and capillarity in the facility to plug in because we've been working with this kind of contract for years can provide these services for health care operators. So when you bring together these 4 major causes or effects that I just mentioned, that's what explains our net adds.

And lastly, you asked about DLR, right? So I need to say that this will even be repeated for many of you in individuals. As Pacheco already mentioned in the preamble, it's going back to normal, actually. June was very similar to what we would expect in normal -- in terms of normal activities. We see this control on a daily basis because that reflects in the approvals that we give for treatment. And in July, we see that a bit lower, not as high as June. But in a way, we believe that by the fourth quarter this year, we should see a more normal situation. Now that we've been advancing with the vaccination campaigns in Brazil and [ flexibilizations ] here in São Paulo where businesses are now open and restaurants and so on. So we will monitor this on a monthly basis, but we should expect things getting back to normal in the fourth quarter. Let's wait and see.

I believe that with that, we've addressed all your questions. Thank you, Emerson, again, for your question.

[Operator]

Next question is from Yan Cesquim from BTG Pactual.

[Yan Cesquim, analyst]

Can you hear me?

[Rodrigo Bacellar, executive]

Yes, we can. It's perfect.

[Yan Cesquim, analyst]

Okay. My first question was about DLR, but now it's very clear about how you see the resumption of frequency. And the second question that I have here is about SG&A. When we look at the quarter, we see that there is a gradual improvement of SG&A. So I'd like to know if we can consider that, that will continue with gaining more efficiencies in that line. And specifically, even though there was an improvement in the first half of the year, I'd like to know what was more important in the second quarter.

[Rodrigo Bacellar, executive]

Thank you, Yan. I'll start, and then I'll hand over to Pacheco. The SG&A is about sales expenses, right? It's the sales mix. So as Pacheco mentioned, and you saw that in our report, the fact that retail performed less, it helps in SG&A because it's a more expensive channel. So we'd love it if all channels -- we're talking about channel, product and segment, right. We'd love it if everything would be at full speed. And the beauty of our model is that we have different -- we have eggs in different baskets. So what we saw in the second wave in the beginning of the second quarter was still a moment of difficulty in retail and trying to take off, especially when we had the second wave with more severe restrictions in February, March and April.

When that happens, the expenses in retail, which are more expensive, will make that index go down. So we do have channels that are more expensive, some that are not as expensive as this one, and let's see how sales will behave because that automatically comes from the mix. It's nothing premeditated in terms of higher commissions or the sort. It's actually a result of the mix of how sales are behaving.

About G&A, another goal that we have is that we have to leave the pandemic with the best of both worlds. So we had a world pre-pandemic with a lot of actual travel, printing their dental card, mail and many other expenses that we had, which we moved into digital during the pandemic. Like I mentioned during Emerson's question about travel, that we do to prospect, that's very -- that's a lot of learning, right? Obviously, we will still visit companies. We'll still have a roadshow to show the product benefits and prospect even more and bring in more members, but we also have to take this opportunity in remote regions where you have to take long flights and then long car drives, and you're spending with food and accommodation and highways and everything. So sometimes it will take you 3 days to visit a plant in remote areas. So we've gained with that.

I believe in G&A, we have an ambition of using everything that we used to do well and like pre-pandemic with everything that we can improve and do better during the pandemic and live with the best of both worlds. So some of you asked, at what level would that be stable? I don't think it's the pandemic level, it won't, but it's not going to be similar -- or actually pre-pandemic, and it's not going to be similar to the level -- pandemic level because we had 3 or 4 months where everybody was grounded, stuck at home. So I think there's something in the middle, right, where we can use all these improvements and innovations and that we've mentioned, that Pacheco mentioned in rentals and printing the dental cards and travel and so on. Pacheco?

[Jose Robert Pacheco, executive]

As Rodrigo mentioned, SG&A is a factor that increases the margin, right? It has been and it will continue to be. In selling, considering the [ bankalization ] of individual plans, obviously, the company's sales expenses is more relevant in individual plans. And with the growing bankalization of individual plans, we've had a substantially low commissioning compared to department stores.

In G&A, a relevant point here is the technology, right, that we have to add. You've already seen that and you will continue to see in -- a relevant increase in company CapEx, which is focused on technology and technology enabling us to no longer have to have the printed cards or digitization processes in the admin area and back office area with large-sized system and more sophisticated ones in the world, and that's what's happening in 2021 through to '22. So we've had many gains in efficiency based on state-of-the-art technology. And that's already been happening since the middle of last year and becoming more intense in 2021 and 2022.

[Operator]

Our next question is from Vinicius Ribeiro from UBS.

[Vinicius Ribeiro, analyst]

You can hear me, right?

[Rodrigo Bacellar, executive]

Yes, we can.

[Vinicius Ribeiro, analyst]

My original questions were questions that were already touched on. Can you talk about net adds for the second half? We understood that the second quarter performance was endogenous. And after an economic recovery, supposing that we will, do you believe that this trend in that commercial moment will continue moving forward. So what are you doing for that to continue? And my second question, focused on the long term. And I even apologize for repeating this, but how can we think about new distribution channels and the attempt to being part of platforms and so on. That's it.

[Rodrigo Bacellar, executive]

Great. Vinicius, thank you for your question. I saw those -- your original questions and you improved them, I guess. That's great because then you're covering new sides, very interesting. About growth, I think there are different profiles. For instance, growth in corporate and SMEs, that sale takes longer. So in corporate world, which is the more penetrated market, most of these companies already have a contract. So it's about a contract renewal where in 6 or 3 months before that, we get in the game to start that negotiation and that could be connected to health plans such as Bradesco's or from one of our other partners of the health plans that do not have dental, we could get in that game alone as dental.

So I'd say it's a longer maturation process. But I can say that we work hard. We have a very dedicated team. Our mapping is very well done across each region in Brazil, company to company, who has the contract, who is the broker that represents that -- represents them, what type of contract they had, so how we get ready to get in that game. And we pay a lot of attention to that to be a part of that.

So there may be a period where you have renewals with more employees, companies with more employees or not. So it has its own rhythm, I'd say. And in SMEs, we created a very interesting thing, which is we segment SMEs. So you can expect for upcoming months, and with fundamental presence of Bradesco with SME performing in a very interesting manner.

So usually, SME is considered by ANS from 3 to 199 lives. Now we have different segments for SMEs, where we have different pricing -- different segments and different pricing for the SMEs. And when those contracts are connected to health care, and we've been doing that better and better, they have lower DLR and a longer duration. So once again, a number of different baskets, our eggs are in different baskets, and we're balancing out the plates, right?

So not just only through the Bradesco Bank channel and doing that increasingly better, but also that characteristics, and I believe that we got this right in terms of segmentation, and the sub-segmentation inside SMEs and also the ability of having longer duration and lower DLR when we connect these contracts with health care. So that's the first question.

And then I believe Pacheco can add to that. I forgot what was your second question? Could you repeat that, please?

[Vinicius Ribeiro, analyst]

About channel.

[Rodrigo Bacellar, executive]

New channels, right? Yes. Perfect. Okay. You brought in something important. So here in the platform concept that you mentioned, our total Odontoprev portfolio, nowadays, we have 25% to 30% of our portfolio is already open platform. We're providing services for retailers, for credit card companies and benefit, for private label cards, we're doing that for operators, other channels, websites, so that's a strong footprint. We have a very interesting pipeline. And when you expand to platforms, you have to be sure that when you plug it in, it's going to work, right? So we have a dedicated team in technology. I'd say that 5, 10 years ago, when we started off with these partnerships, the systems were customized. And now what we see is that with the systems architecture that we have and the app and developing APIs to plug and play with new partners today is much faster and instant.

So here, today, we can say we're going to market to talk to these companies with lower terms and adapting and be able to capture them and bring them into our framework and with that, being able to generate all the necessary information and files and billing and members and so on. So by having that strong presence, 25% to 30% already is part of that concept. We have new contracts as well in that modality that we started off in January. And we also have an interesting pipeline of the conversations that we're having to evolve in terms of the platform, as you well mentioned. Thank you for the question, Vinicius.

[Jose Robert Pacheco, executive]

I'd like to add, Vinicius, the acquisition of Mogidonto is coming in the third quarter, 60,000 members as we've already communicated. And another interesting point is that the growth of Odontoprev is seasonal. It's much more relevant in the second half of the year than the first half of the year. So we believe that 2021 will not be an exception to that, and there are many reasons for that. Rodrigo already gave many examples. And there's the Odonto System rollout that gives us a new product for new patient profile and not just limited to the Northeast, but now available in the South and Southeast. So we're more constructive now in the adds in the second half of the year. And we've had very interesting performance and 0.5 million members in the last 12 months. Thank you, Vinicius.

[Operator]

Our next question is from Pedro Mariani, Merrill Lynch.

[Pedro Mariani, analyst]

Can you hear me?

[Jose Robert Pacheco, executive]

Yes, we can.

[Pedro Mariani, analyst]

Okay. So the 2 questions that I had were already answered, net adds, for instance, but I'd like to take this opportunity to ask about the ticket dynamics. And there were different dynamics in the segments. Could you give us some more details on -- about those dynamics? Is it the competition? Is it the mix? So any details will help a lot in that sense.

[Jose Robert Pacheco, executive]

Pedro, the average ticket has been decreasing in an environment where the cost is lower. So given the long-term commercial aspect and starting that comment here, in relation to corporate, when you're not using the benefit as much, there's a combination of the average ticket aiming at a very long-term duration. So on average, in a large company contract, we have a 10-year or more relationship. In SME, the dynamics are different. In that segment, as there's a high concentration of bank channels, not only in 2020 but also in 2021, there was an interesting increase in revenues and ticket given the launch of new products with higher value added, so increasing the company's average ticket, which allows us to say that almost -- or more than double, maybe even the triple of the consolidated ticket, and that shows the beauty of strategy, enabling us to achieve customers that have a higher barrier to enter given that large distribution platform in SMEs.

In individual plans, we have 2 different dynamics. We've been feeling, in general, the faster introduction of bank channels and also Odonto System products. The bank channels raised the average ticket in Odonto System products. For this particular segment, they bring that average ticket down. As our pricing is very rational, focused on value and considering the very relevant quality standards for the company, which is also perceived by our customers across Brazil. That's it, Pedro. Thank you.

[Operator]

Our next question is from Leandro Bastos from Citi.

[Leandro Bastos, analyst]

On my side, just a follow-up. I'd like to explore the Odonto System side in the Southeast. I'd like to understand the difference between this product in terms of the network and coverage and cost compared to a normal corporate plan in the region and ticket.

[Jose Robert Pacheco, executive]

Great, Leandro, thank you. The difference in the Odonto System model, it's very unique because if an employee or an individual member, if they have the product, they have a proactive action of calling that individual or that member, if that's an employee of a company, to do a mouth inspection, so cleaning, right? It's an assessment, right? So the person's called in. Our dentist will not do the treatment, that's very important. So they inspect, assess and say, okay -- and cleans the mouth and they say, okay, the treatment set for you, we call it the treatment plan, you have to treat problem A, B and C, for instance.

After they do that, the network is not the same that did the assessment. So we can attack and avoid waste and fraud. So it's a group of dentists that do that procedure, and then we have a registered network that actually does the treatment, right? So the network that will give the treatment, when you saw, diagnosed, see what has to be done, and then with that chosen network at a lower cost, even at a lower ticket from Odonto System, you can control DLR much better.

So for those who are buying a plan, it's a great feeling because they feel that someone's really taking care of their mouth, right? Someone's proactively taking measures, right? They call them in to have -- to be -- to do the prevention, cleaning and say that they have to get treatment, be it A, B or C, schedule those treatments. So we do that in dentist slots that accept the cost and at a lower ticket even.

So the difference in that model is exactly that. So 2,000 dentists -- dentist network compared to the 32,000, which are not the same, but with a different type of philosophy about managing the members in a different way, right? So that's the business model. That even with -- at a lower ticket, you can get -- you can have your DLR under control.

[Leandro Bastos, analyst]

Perfect. How about the difference in the ticket of the product on average?

[Rodrigo Bacellar, executive]

At Odonto System, in the spectrum, it goes to BRL 5 or BRL 6, if it's a mixed or not plan, up to BRL 30 if it's a more robust plan. On average, you can save BRL 16 maybe. Pacheco, correct me if I'm wrong, approximately BRL 14, BRL 16.

[Jose Robert Pacheco, executive]

Yes. In general, the Odonto System plans have a discount. Obviously, it's a different business model, and they do have a discount considered to the company's traditional plans. Once again, it's a different business model. As Rodrigo mentioned, it enables us to have a final price for consumers that's lower, cheaper and it leads to the same type of return for the company. So I believe that, that's the beauty of that model.

[Leandro Bastos, analyst]

Yes, very clear. And just one last question. I know that the geographic rollout is recently -- recent. But how can -- how much does that account for in terms of sale by achieving maturity?

[Jose Robert Pacheco, executive]

That's a great question. It's too early. It's too early to talk about maturity. I believe that the company is taking a concrete step in dialoguing with other types of not just consumers, but also the corporates and even medical or health plan operators. So that strategic bias of that movement is very relevant. It hasn't started this year to reach the level that we're at. It took us a lot of work to set up that network and operations in states that we already operated, but with a different type of service provider.

So imagine the back office that we need for that to start up that operation in so many states like Rodrigo mentioned. So it's just another important movement that the company is doing. So being able to service any type of risk profile across any state and the entire country. We don't see any other operation with the same type of calling and geography and willingness to offer or bring in different patient profiles to the portfolio, overall.

[Operator]

Our next question is from Mauricio Cepeda from Credit Suisse.

[Mauricio Cepeda, analyst]

This is Cepeda speaking. Well, we're reaching the end of the Q&A session. So going back to DLR, I would like to match that with the ticket in terms of timing. We know that as Pacheco mentioned, tickets are dropping because you're renegotiating and use was lower, so you can't renegotiate the same contract amount. And at the same time, we know that DLR will go back to normal levels, I'd say. So how do you plan on bridging that?

And going through one contract that you had negotiated at a lower amount and then DLR coming back to normal levels, what are you thinking on that for the future? And then a very mundane question, I see that the third-party services increased in G&A. That's the only line that really deviates from the historical pattern. Can you explain what's embedded in that?

[Rodrigo Bacellar, executive]

Thank you, Mauricio. What you mentioned about the company -- well, again, we're talking about a mix. So if on one hand, DLR was low and, consequently, the renegotiation was with a lower price increase or none, that normalizes in time. And we helped out many companies and dentists in the peak of the situation, the companies that suffered the most. Imagine the airlines, imagine service providers, cleaning and security companies that provide services for airlines or for shopping malls. We were their partners, and that has -- was reflected in the figures. So we met their expectations. When you help them out in a moment that's more difficult, that shows in the figures, right?

And we want things to come back to normal. We want people to use their plans. We want them to see the benefit in that. We're here to provide services. So we want things to get back to normal. The dynamic -- it's -- so the negotiation that happened was because of a pandemic. And after life goes back to normal, things go back to normal and negotiating contracts as it has always been, so we're not concerned about that at all. And we have a challenge of being able to win contracts, provide good services in all the different segments that we're in.

So Pacheco, next question -- to answer the second question.

[Jose Robert Pacheco, executive]

Cepeda, about expenses and services. There, the name of the game is technology. Again, we're in a big project that will go up to 2022. It's a large system with a global services provider. And in implementing that project we do have some groups that are providing consulting that are helping us out in that. The project involves all company areas. We're really excited with its conclusion in mid next year. That's our forecast. It's not the first time that we do that process and it will give us the benefits and interesting return on that mid next year.

[Operator]

Our next question is from Eugenia Cavalheiro from JPMorgan.

[Eugenia Cavalheiro, analyst]

You can hear me, right?

[Rodrigo Bacellar, executive]

Yes.

[Eugenia Cavalheiro, analyst]

I have 2 questions, a follow-up on some things that were already mentioned during the Q&A. The first one is I'd like to know about the cross-selling trend, mainly with Bradesco and how that has helped in net adds. And the second, in pricing, do you see any changes in the pricing environment given the low frequency that we saw last year?

[Rodrigo Bacellar, executive]

Thank you, Eugenia. In the Bradesco trend for cross-selling, I think we've been more integrated than ever. There is currently a project that we've been running all together, us, Bradesco Seguros, Bradesco Saúde, the sales organization, the bank, so we're very close. We have a monthly follow-up meeting for the project in addition to weekly meetings when we talk about working with banks and companies and all the segments. So there is a very positive moment of -- that's the complete union to do business in common and providing quality dental services for all our members.

So the Board also takes part in that and is also helping us out in that. In pricing, Eugenia, and then I can hand over to Pacheco, I think it's about what we said in the other answers. During difficult times, we were very sensitive in postponement and negotiations that would service their needs, and even given the DLR rates that were much lower.

So if we think -- when we know that -- when you think of it, we have corporate contracts that are 25 years old, and we're able to do that because we have a long-term vision with our customers. We're not here trying to do things that are magical or in the short term. No. We have a vision of building a partnership and service as we've had all these cases that I mentioned of many large important corporate customers that have been with us for decades.

And I believe that the best answer for that, Eugenia, is that when there's top of mind HR here in Brazil with 28 additions -- or 23 additions with the -- now it's the 24th of that, we were the finalist in 22 and we were the winners in 18. And out of the 18, I think in the last 8 or 9 years, it was consecutive, we're consecutive winners.

So the best NPS that we can have is when we hear from all HR departments in the world that they vote in relation to dental plan service providers is being the winner in so many additions. So that's the idea of focusing more and more. We currently have 19 areas focused on that. The agile -- I'm talking about agile methodology, focused on servicing members, legal demand, brokers, HR departments and companies.

So that's our focus. Like I said, we wake up thinking about mouths and go to bed thinking about mouths every day. So there are no distractions with any other areas. Here, it's about providing increasingly better services to enchant our users, be it B2B or be it B2C or B2B2C. So that always reflects in the results that we've seen. Thank you for your question. Pacheco, would you like to add?

[Jose Robert Pacheco, executive]

No. Just one thing about pricing, Eugenia. You mentioned pricing. And traditionally, Odontoprev has an award for the product mix. So we have -- the average ticket price is higher than -- much higher than the industry, and particularly compared to those that compete directly with us. I believe that, that premium, that spread should grow in 2021 based on the level of maybe aggressiveness that we see in our -- in peer companies that are closer to us. The good news is that in 2022, with the resumption of economic activity and the potential job generation, there will be -- it's likely to have more use of dental benefit and, therefore, the average ticket would recover as well.

So the company differentials this year will be even more clear, particularly the average ticket compared to the companies that compete directly with us. So you'll be able to follow that and -- numerically and based on public data after they are disclosed.

[Operator]

[Operator Instructions] We have no further questions. This Q&A session is now over. Pacheco, your final remarks?

[Jose Robert Pacheco, executive]

I would like to thank everyone for participating another event talking about our earnings for 2Q '21 and the first half of '21. So we're continuing to be focused and constructive in relation to adding future value. See you soon at our next event. Have a good day. Thank you.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]