Good morning. Welcome to the audio conference of Oncoclínicas. At this moment, all the participants are connected as listeners. Later on, we will start the question and answer session, when we will give you instructions about how to participate. If you need any assistance during the conference, please ask for help from an operator by typing [asterisk] 0. You can also remember that this audio conference is being recorded. I would now like to pass the word to Bruno Ferrari, Founder and CEO of Grupo Oncoclínicas. Dr. Bruno, please go ahead.
Thank you very much. Good morning to everyone, and thank you for your presence in our teleconference of results with the market. It's a pleasure and a privilege to talk with you about one more exceptional year that we've had. We had the capacity to continue transforming thousands of lives and following our mission of overcoming cancer.
The year of 2021 was a record year for Oncoclínicas in several aspects. Starting with the quality of our care, we reached an NPS of 96, proving our excellence in the care and in the experience of our patients. We are also proud to share with you that we've been certified for the second consecutive time as a Pró-Ética company, a seal conceded by the CGU for private companies with a high level of ethical excellence in the business world. We finished our IPO in August of 2021, raising BRL 1.7 billion for the cash situation of the company. It also permitted us to accelerate our expansion plan. We announced seven strategic transactions in the past year. Among them, the acquisition of 100% of Unity, the second largest provider exclusively of oncological care in the country.
We will also work together with it as soon as this transaction is approved by the regulators. As far as the financial aspects, we had the best performance in the history of the company with net revenue, EBITDA, adjusted EBITDA and net profit, and record net profit. As an example to show how year of 2021 was for Oncoclínicas, our adjusted EBITDA grew by 50%. Here, I would like to add that 2/3 of this growth came from organic growth. Going to the next slide. We would like to show the evidence of our growth in terms of the number of units. Over the year of 2021, we went from 69- 91 units with a presence in 25 cities as compared to 2020. Soon we will open 30 more units in seven cities with the transactions that have already been announced, were approved by the regulators.
On the following slide, we present the evolution of our program of cancer centers. Currently, we have seven cancer centers in the city of Rio de Janeiro, Belo Horizonte, Salvador, and Uberlândia. We had three new cancer centers just in 2021. Beyond our entry into the inpatient operations of low and medium complexity with the acquisition of Itaigara Memorial in Salvador, and of specialty clinics and diagnostic clinics with an emphasis in oncology. Expanding even more our coverage in the journey of our cancer patients. We are very well positioned from the strategic standpoint, capitalized and with strong fundamentals. We have administered our capital structure with discipline. We are inserted in a sector very resilient and in a sector which is already resilient by itself, which is health. Cancer is the second most prevalent disease in the world and in Brazil, and it will be the first soon.
The cancer treatment is not an elective procedure, and it cannot wait. We continue firm in the direction of elevating the quality of oncological care in Brazil, expanding our presence in an accelerated rhythm. With a subsequent event of the fourth quarter of 2021, we signed the acquisition of a relevant participation in MEDSIR one of the leading companies in the planning and design of international clinical tests aimed at the oncology market. This transaction will complement the group of competencies that our data arm and precision medicine arm, the OCPM, Oncoclínicas Precision Medicine, raising us to a higher level from the standpoint of academic and scientific work. Our journey is just beginning. We operate in a sector highly fragmented, and we are very sure that we will soon transform many other lives.
I would like to now pass the word to our Director of Relations with other works in the area who will talk about our financial story.
Thank you, Bruno. Today, I am going to present the financial highlights of the fourth quarter of 2021, and of 2021 as a year. A record year of growth, which continues quite robust for the company. On slide six, in terms of the volume of procedures, we had an increase of 24.6% in comparison with the fourth quarter of 2020 and the fourth quarter of 2021. In terms of net revenue, the growth was 33.7% in the period mentioned. We can mention the sequential growth of 13% between the third and fourth quarters of 2021. Our adjusted EBITDA grew 18.1% in the period, reaching BRL 140 million in the quarter.
In the annual comparison, the growth in the number of procedures was 21.9% versus 2020. Even in a year still quite impacted by COVID, we demonstrate once again the resilience of the sector of oncological treatment. The net revenue grew 32.8% in the year 2021, reaching a record level of BRL 2.7 billion. As Bruno mentioned, 62% of this growth came organically. In other words, in a base of the same clinics. Our adjusted EBITDA grew by 50% in 2021 compared to the previous year, reaching the level of BRL 481 million and with a margin of 17.8%. There was an expansion of 200 basis points, greatly due to the gains and operational leverage that we continue to receive once our revenue is growing at a level much higher than our base of operational expenses.
Now, I am going to pass it over to Rodrigo Medeiros, who will give an overview about our operational performance.
Thank you, Cristiano. As they mentioned recently, the recent months of Oncoclínicas have been a great deal of work and integration in the acquisitions already concluded with Cebrom in Goiânia and UMC in Uberlândia. In January of 2022, we integrated CAM/CLION to our operations in Salvador. Now in March, we are starting the integration of Cemise in Aracaju. All of these integrations are moving along in line with our playbook and continue to demonstrate our execution capacity and the capacity to extract value by adding best practices. We have a profound knowledge of the proven experience in these integrations, which permits us to continue to expand our presence in new regions and increasing our coverage on the line of oncological care in the cities where we are.
On slide seven of the presentation, looking at our results in the number of procedures and average ticket, I would like to remember that our sequential growth in the last quarters. As demonstrated in the graph at the left, we grew by 24.6% in number of procedures in relation to the fourth quarter of 2020, and we reached a total of BRL 8,000 in average ticket in the fourth quarter of 2021. Growth of 6% in relation to the fourth quarter of 2020. On the graph on the right, you can observe the expansion in the number of procedures and the average ticket in comparison with the annual numbers.
We've highlighted is for the already mentioned growth of 21.9% in the number of procedures year-on-year and an expansion of 8% in the average ticket [audio distortion] since the middle of the year, reaching BRL 7.6 thousand in the accumulated number over the year. At this moment, I'd like to pass it over to Eric Alencar, our CFO, who will comment on the results of the fourth quarter and for the year of 2021.
Thank you, Rodrigo. Starting on slide eight, we would like to present our financial results for the fourth quarter of 2021 and for the year of 2021. On the graph on the right, it shows the growth of net revenue. It reached [BRL 168 million], a growth of 34% compared to the same period of the previous year, and growth of 13% when compared to the previous quarter.
For the year, net revenue added up to BRL 2, 702 million, 33% higher than the same period of 2020. Remembering that this growth in 2021 are compared to a base of growth also solid and consistent, which we've had in 2020 compared to 2019, showing the resilience of the oncology market, even in periods of the pandemic. On slide number nine, we point out that the gross margin of costs and adjusted expenses for the period. The graph on the right show the expansion of gross margins in the periods mentioned, principally due to better commercial conditions in the acquisition of inputs and gains in synergy with the maturation of operations. In the graphs on the left, we show the cost and expenses excluding the effects of the extraordinary items from the period.
We note that in relation to the net revenue reduced by two points, reaching 82% in the year 2021, a reflection of our effort for the reduction of costs and expenses in relation to net revenue. On the next slide, we present the adjusted EBITDA in the value of BRL 140 million in the fourth quarter of 2021, superior in 18% to the fourth quarter of 2020. With a margin. In the year, the growth was even higher. Compared to the previous year, the increase was 50%, reaching BRL 481 million with a margin of 17.8% in relation to net revenue. For the second consecutive quarter, we reported a book profit. It was BRL 23 million in the fourth quarter. Excluding the extraordinary items, the adjusted net revenue for 2021 was BRL 179 million. Moving to slide 11, we're going to talk about debt.
First of all, we would talk about our chronogram for the amortization that accounts for BRL 358 million in bank debt to pay over 2022. On the graph below that, the financial leverage that reached the level of 0.2x EBITDA for the year, due to our comfortable cash position, especially with the resources that we attracted during the IPO. On our last slide about the cash flow for 2021, we had two major effects of these resources. The first, as I mentioned previously, were the resources from the IPO, and the second was for debts contracted towards the end of 2021. Beyond that, we noticed the generation of cash of [BRL 240.4 million], impacted principally by the higher level of profitability reported for the year, and our continuous discipline in the reduction of non-payment and forgiveness of debt.
In 2021, we represented 1.8% of our net revenue, compared to 2.7% the previous year. On the line of cash flow and investment activities, there was a cash consumption of BRL 1 billion due to the payment of acquisitions. The cash flow from financing activities reported a consumer of BRL 535 million, due principally to the prepayment of several more expensive debts. With that, I finish my contribution to the presentation, and I place myself at your service for any questions that you might have.
Ladies and gentlemen, we will now talk about the session of questions and answers. To make a question, please type asterisk one. To remove your question from the list, type asterisk two. Our first question comes from Gustavo Miele from Goldman Sachs.
Good morning, Bruno, Eric, Cristiano, Rodrigo. Thank you for the presentation. Two quick questions from my side. First of all, a little bit more operational.
What caught our attention was the performance of the average ticket of the company with a comparative base, both sequential. Wanted to understand basically, especially with the question of year-on-year, how much of this year-on-year growth is due to recomposition of prices that was pent up with the operators, and how much of it do you believe is due to the increase of high complexity? And my second point is a little more strategic. I would like to understand how is evolving the role of the doctor in the generation of the flow of procedures for the company. Are you able to share with us how much of the traffic that you have today is being generated by the brand, and how much is generated by doctors, and how this evolved since the IPO?
Jumping on that, adding to the clinical team, if you could give us an update in terms of the medical career program, and how is the new doctors that are joining the base of the company, are they joining that program? Which seems to be an important tool for retention of doctors for the company. So these two questions. Thank you very much.
This is Rodrigo. I am going to answer the first question, unless Bruno answered the second. The average ticket was principally recomposition. As we mentioned during the previous semesters, last year especially, there was that dynamic of some operators due to the negative impact of negative growth in individual plans, and we got these results. So this, we arrived at the same level as we had in the IPO. So it was a delay, but now we have a catch-up.
Thank you, Miele. This is a subject which, as you know, it is very dear to our hearts. I think the group here has three principal routes of the entrance of our exclusivity agreements with some payers. More importantly, it will continue to be this relationship, doctor to doctor. Remembering that more and more it is interpersonal and becomes institutionalized. We have created here an environment, a relationship with essential arms, with our scientific committees, which is a reference for the industry, and more and more, we are participating in the journey of the patient, bringing this into the institution. Even though the doctor to doctor relationship is extremely important, we have very strong relationships between the doctors. The medical career was innovative. One of the programs that was more important in the company's history, and we have always said that our motor are our doctors.
Since 2015, we have concerned ourselves and been very concerned and invest a lot of time and resources so that we can have this medical career program, which permits us to develop and retain doctors when we make an acquisition. Part of this acquisition is inspired by the medical career program. Contributing within this dynamic. We are seeing this in a way that was a very positive way in the deal with Unity, which once said to bring these doctors into this medical career program. We do not think we are going to have any difficulties with that.
Thank you, Bruno and Rodrigo.
Thank you.
Our next question comes from Vinicius Ribeiro from UBS.
Good morning to everyone. A little bit about the expansion of gross margins since the IPO.
Also, if you can give us an idea of how much this expansion is related to organic growth and how much is due to the M&As. The second question is a little bit about the volume. We see that the organic volume fell off a little bit in the fourth quarter. How do you see this question of volume and the backlog of procedures that has been left behind?
Vinicius. [The main] is Eric. I am going to answer the first question about the gross margin, and I am going to pass that over to Rodrigo, who will answer your second question. The expansion is principally organic, the gross margin growth, because it is the fruit of the work we have been doing. First, for the recomposition of the ticket.
As we mentioned in the medications, there was a smaller increase in the level of complexity and also better negotiations with the pharmacy industry and our focus on fixed protocols for oncology, which has given us a very healthy growth in our margin. So it is principally organic growth. It has not been so affected so much by the new acquisitions, which certainly improved our gross margins, but it was not the principal cause.
This is Rodrigo. As far as the number of procedures, excluding the part of inorganic growth, we had a relevant growth in the year of 12% in procedures, just organically, and in the quarter, also about 10%. It continues to be very robust, as [Camargo] mentioned, in the financial area. The average ticket is the organic procedures.
Okay. Thank you.
Thank you.
Our next question comes from Leandro Bastos of Citi.
Hello, everybody. Good morning. I want to follow up on the last question on the part of organic growth. When you open on the graph, can you break this down between volume and ticket? How does this behave during this year and during the quarter? The second question about your margins. The perspectives of margins this year. Do you see growth and the vectors for gross margins and operational margins?
Hello, Leandro. This is Cris here. As far as volume of procedures, when we look at the number that we heard, which was the growth of 22% in the volume of procedures, approximately 12.5% came organically. We are talking about approximately half of the growth in procedures came organically. I am going to pass it over to Eric to talk a little bit about the question of the gross margin part of the question.
I am going to talk about the gross margin.
Did you want to know about the gross margin or EBITDA? I am going to talk about both and improve your understanding. Our group here, we have a strategy designed for the expansion of EBITDA margin to have this through gross margin and through operational questions which generate savings in SG&A. Our structural point is the maintenance of growth in these margins, because the leading indicators of these increases continues to appear for us. Whether they be better negotiations with the payers, operational efficiency in SG&A, or the incorporation of new companies to the group, which promotes this gain of scale, which we talk about so much. First it was a question of trying to see impeccable in the second count and have a low expense, which it helps the payers not to waste money as well.
Considering all of this, the idea here is that if there is volatility in the next quarters, but that the EBITDA margin of the group will continue to grow, both due to the expansion of gross margin as well as the reduction of SG&A, since once these new M&As are absorbed.
And also adding to Eric's comments, not talking about gross margin, but about adjusted EBITDA margin. But one thing translates into the other. We had an expansion of 200 basis points from 15.4%- 17.8% in the adjusted EBITDA margin. This gain of operational leverage, which we are able to deliver during 2021, is greatly due to the growth of our top-line growth in a rhythm well above the growth of the base of operational expenses. One of the pillars of the business model of Oncoclínicas, in which we imagine should be maintained during 2022 because we have been able to execute above this margin gain over recent years.
Very good, Eric. Just one quick follow-up. What caused it for 2022? Can we imagine how the numbers will look for 2022?
Sorry, his audio is very low. There is some volatility, yes, due to the higher level of profitability of the company itself. In the fourth quarter, we had a 55% growth, adjusted by 37%. But if you compare it year-on-year, you will see that there has been a very strong, significant adjust in terms of [RTR] and 34% at the end of the year, which converts with each other. Now next question.
Thank you.
Thank you.
Our next question comes from Lucas Marchesini from Itaú BBA.
Good. Thank you for the questions. On the other side, in relation to 11% on the other side, the ticket improvement in the second quarter, how have the negotiations been going?
Hi, Lucas, Rodrigo speaking. Thank you for the question. A good part of our contracts have this automatic pass-through. There's a negotiation which is already in the contract. As we commented previously, 2021 was very atypical due to the negative readjustment in the individual health plans. Hopefully with the publication of the cost in April, starting in April and May, we should start to have these pass-throughs to our reimbursements from the payers.
Thank you.
Our next question comes from Eugenio [Garcia] from JP Morgan.
Good morning, everybody. Thank you for the call. We have two questions here on our side. You mentioned a little bit the margin going forward.
I just want to know if you can give us a little more detail as far as analyzing the structure, the integrations, and acquisitions that you have made. The second point is how do you consider the impact of the joint venture in your P&L? What will be the impact of this? Is this going to the equity income or if this will be part of the top line in growth, which we see as margin? Just to understand a little bit more of this point. Thank you.
This is Eric. Hi, how are you? Thank you for the questions. As far as the SG&A, we delivered in 2021, 14.1%. We had investments to support the new acquisitions, which are happening in 2021, but which are now entering. With the finalizing of these acquisitions, we will come to an average level of SG&A for the company.
More than 50% of our SG&A goes through, can be diluted in an acquisition. This is the first item, which is good news. We have a huge pipeline of acquisitions which are coming in, and this will help greatly our SG&A to be further diluted below the level of 14%, which is still in 2021 to 2022. Volatility quarter by quarter happens. As you mentioned, as far as the accounting of the JVs, it's consolidated and is treated normally on our accounting. So it goes through our P&L, and the great majority of the joint venture, several partnerships, but that's a very large minority of the situations are outside of our P&L.
We close at this moment the session of questions and answers. I would like to pass the word to Dr. Bruno Ferrari for his final considerations. Dr. Bruno, please go ahead.
Thank you. Again, we would like to thank all of you for your presence in our conference and for the questions realized. With that, we've finalized our presentation of results, and we want to thank you all for your presence. Have a good day, and thank you very much.
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