Good morning everyone, and welcome to the 2026 Auna Investor Day. It's very nice to see a lot of familiar faces here in Lima, and it's also great to welcome everyone who is joining us via the webcast. Just a few words in Spanish. [Foreign language]. So over the next few hours, you will hear how Auna is building an integrated healthcare platform across Latin America, expanding access, improving outcomes, and creating sustainable value for patients, partners, and shareholders.
Our management team will share how we are combining the strength of our network, our patient-centered model, and discipline execution to drive sustainable growth and capture the opportunity ahead of us. We will also discuss the progress we are making, the challenges we are addressing, and the priorities that will shape Auna in the next phase. But before we get started, you can read this nice statement on the screen.
Please note that today discussion will include certain forward-looking statements, which are based on management current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to materially differ. Please direct your attention to the safe harbor statement on the screen, which investors should read carefully.
It also can be found in our press release published earlier this morning, along with our filing with the SEC. In addition to discussing financial results in accordance to IFRS, we will discuss certain non-IFRS financial measures. Definitions and reconciliations are included in the presentation. Today in the room, in person, we have Suso Zamora, our President and Executive Chairman. Gisele Remy on the far right, our CFO. Rayet Harb, our COO, sorry. And Vicente Checa, our leader of our Peruvian operations. And obviously, myself.
You will also hear from our leaders in Mexico and Colombia, who are not with us today. You will hear from Alejandro Torres and Pablo Cervera, respectively, for Mexico and Colombia. We're very excited about the agenda that we have today. Following the presentations, we will have a Q&A session.
For those participating on the webcast, you may submit your questions at any time during the presentations by using There should be a box directly below the broadcast screen. Ask a question, just put your question there, and we'll address them at the end. Also, at the end of the day, we're going to appreciate if you can give us feedback on today's event by completing a brief survey.
For the people in Lima, there is a QR code on your tables that you can fill, and for people on the webcast, there is a resource tab at the top of your screen, and you can complete the survey. At the end of each of the presentations today, the presentations will be available on our investor relations website as we present. Now let's start the session. We're going to start with a quick video on Auna, and with that, I will turn to Suso.
Health, the single most vital asset of every individual and family, and it always starts with the person. Everyone deserves access to quality care. Yet traditional health systems in Latin America are antiquated and leave too many people to navigate them alone. At Auna, we built a fully integrated healthcare platform that is modernizing care and increasing access through affordable healthcare plans.
Our value-based care approach prioritizes prevention and early detection, driving superior clinical outcomes and predictable costs. When health challenges arise, our fully integrated hospital network across Mexico, Peru, and Colombia is designed to manage them with a focus on high-complexity care for diseases that drive most systemic health spending now and in the future. Specialized in oncology, with over 35 years of clinical leadership and proven world-class survival outcomes.
Cardiology, driven by a focus on proactive prevention, covering comprehensive cardiac subspecialties, and consistently ranked among the region's best. Neuroscience, combining certified stroke response, advanced neurosurgical precision, and dedicated neuro ICUs. Orthopedics and traumatology, delivering rapid emergency care, high-complexity surgeries, and comprehensive postoperative recovery. Equipped with state-of-the-art medical technology and backed by in-house research centers, we are constantly advancing protocols and bringing the medicine of tomorrow to Latin America today.
Led by top specialists who turn advanced infrastructure into life-saving outcomes. Because equipment does not treat patients, people do. All of it organized around the person. Because at Auna, advanced medicine reaches its full potential through our integrated patient-centric care. From proactive prevention and early detection, to closely accompanying our patients and their families throughout every stage of their health journey, where every patient feels heard, understood, and supported.
This human-first commitment serves as the backbone of our value-based care, a proven scalable model strongly positioned for sustainable organic growth. We seamlessly integrate health plans, high-complexity care, and clinical research around the patient in one seamless ecosystem. Powered by more than 30 facilities across Latin America, we are accompanying 8 million lives daily. This is Auna, leading the healthcare transformation in Latin America.
Very good. Suso?
Great. Good morning, everybody, and thank you for being here, especially those that are here in Lima. We appreciate the visit and some of the events that we have scheduled for today. Of course, everybody that supports us through the webcast. Thank you very much. Today, I want to start by saying that it is really important that you, at the end of the day, tell us how we are doing, because we are doing this and we are deciding we want to repeat this every year in different venues.
If you find it of use for the investor community, please do let us know. Also let us know how we can improve, if there is. There always is improvement on our side. Here we are today to talk about transformation. Let me just go back here. Recalling what we have been saying to the market for years now.
Auna's mission is to lead healthcare transformation across Spanish-speaking America by increasing access to high-complexity care through our vertically and horizontally integrated model. Before I start the whole presentation, I do want to address 2026 more directly. We did, I think, report this morning or something. While the year is not unfolding entirely as anticipated, as we expected, our revenue remains firmly within our guidance range.
We are comfortable there. However, our EBITDA will fall short of our expectations. I do want to report that. We have this morning. I think finishing broadly in line with what we have had last year on an underlying basis. Of course, we take full responsibility of that and full ownership of that performance. This pressure, the downward pressure, is concentrated in Colombia and reflects reimbursement and contracting dynamics.
It is not a deterioration in demand or clinical performance or the Auna operating model. I do want to make that point. Of course, and in contrast, Mexico is having a much more encouraging year. We have addressed last year's operational bottlenecks. We have recalibrated our commercial engine and strengthened the foundations of our Mexico operation. We see today the harvest of that. The actions we have taken are beginning to show clearly in our operating trends. Some of those we already reported a few weeks ago.
Very clearly, particularly in Mexico, upward trends. More broadly, our integrated model continues to demonstrate structural advantages in efficiency, in coordination, of course in outcomes, medical and patient journey outcomes. CapEx remains within the range that we have been reporting in the past. Leverage continues to evolve also favorably, given our disciplined management of our balance sheet. Our priority is clear.
Convert that progress into scale and sustainable EBITDA growth. Today, this is what I ambition for today. Today, all of us, we at Auna and of course our investor community, will come out with a clear picture of how we intend to accelerate growth in 2027 and beyond. Going into the presentation. Let me start with the major problems we face in healthcare across Latin American countries.
Number one, the access gap. As you can see in this first graph, the percentage of people having access to care through some kind of complementary insurance is only, depending on the country, between 4% and 16% of the population. But we know from more mature markets in the region, like Brazil, that has something like 25% of the population with some kind of complementary insurance, that that is the opportunity.
In many country, we can multiply our penetration by 4 to 25, that's 6 or more. In some country, we can double that, like Mexico. In the complementary insurance aspect, what's critical to understand, it resolves access for a large part of the population that cannot afford general healthcare insurance. It actually allocates a substantial part of family income to healthcare expenditure, and that has been always our focus and our target audience.
This shows ample room to grow in markets in which Auna currently operates and some of the markets dominates. Additionally to that, our region faces severe gaps in other dimensions. General capacity of doctors is way below OECD standards. High-complexity capacity, measured as procedures, is particularly low.
All this increases the effective care gap, which produces the tragedy in Latin America, which is preventable deaths are considerably higher among Latin American countries than they are on average in the OECD. In combination, this context shows a regional, deeply structural problem, and for us, opportunity.
This is what we strive to do. With Auna's model, we aim to solve through three basic differentiators: vertical integration to increase access, to contain costs; horizontal integration to optimize operations; and a passionate focus on high-complexity care to address a disproportionately larger opportunity than that is much simpler to conquer.
We are going to talk about that during the day today, and we can, of course, field questions as well. However, to turn these capabilities into sustainable compounding structural advantage, we need to continue scaling. There's a critical component of the Auna Way, grow, and grow.
Now let me show you how we have done this so far and how we will continue to do so in our path forward to scale. Today we are executing on a playbook that most of you recognize as a high-growth playbook.
Our model has developed in practice across our markets these capabilities that I am going to right now highlight. First, in Peru, our platform most evolved. Today, Peru represents something that's proven, integrated, high complexity, profitable blueprint, which we plan to deploy across the markets. This model of insurance policies that are served at our network shows how well it works at scale, and also demonstrating high capacity utilization.
Here in Peru, we plan to grow through selectively expanding capacity in what we do best and where growth requires proven skills, always focused on access, thus capturing the mid-price market, and growing B2G, something we are going to talk about, business to government, via the Trecca Ambulatory Center, something that we will do a deep dive later on one of the sessions.
This is Peru. In Colombia, we adapt to a universal healthcare system. Most Colombians enjoy universal healthcare. In Colombia, we serve 3.2 million lives through risk-sharing contracts with the largest insurance companies there. These populations are served in our networks, in the cities in which we operate. In addition, the demand for complementary private coverage increases. This is a huge and new opportunity in Colombia. This is increasing at double-digit rates in Colombia.
And we are positioned well to become an important player there over time. In short, in Colombia we have scale and also, as we do in Peru, a vertically integrated patient management system which grows and grows with the confidence and trust of the largest, most sophisticated insurance companies there. Finally, let's look into Mexico, the highest growth potential.
Auna faces a very similar challenge in Mexico that we faced before. An inundated healthcare network and a soaring demand for private alternatives, exactly like Peru. The offerings from the state never resolve the demand from the population that has a right to those. In Mexico, it's a very similar opportunity that we had in Peru when we started over 10 years ago. But of course, our operations there are younger. They're still maturing. Our model, we've had to implement at a slower rate.
But definitely making great progress, because we see today strong operation momentum and promising conversations with the largest insurance companies there to share risk. I want to always insist on the coincidence of the things that I'm saying. We're doing the same thing over and over again. In 2026, as we've reported, we've produced higher patient volumes in Mexico from the largest payers there. And of course, our oncology operations there have grown at very high rates.
Above what we expected, and we're very satisfied what we're doing. Opening a new radiation therapy unit and I think we have a great runway in Monterrey and in Mexico in general. Having high complexity as a core engine of higher growth and higher margins. Something I'm also going to repeat over the course of the meetings today. We are ready for further growth in Mexico.
We envision landing in Mexico City, in Guadalajara and in Tijuana in the next years. Capturing a share of this highly under-penetrated market with a clear focus on high complexity. Again, I'm repeating myself. As you know, Mexico is by far the market where we see the biggest growth potential in the region, the most fractured backward, the most and the greatest opportunity we have at Auna.
There, consolidation is ripe, is ready. This will offer Auna a great and significant opportunity. Growth has to be disciplined. It has to be aligned with our strategy. Let me share now more detail on how we plan to do so in the short to medium term. We are spurred by market needs and also the time-bound opportunity to capture demand quickly.
Our unique operational model and proven capabilities allow us to replicate a highly profitable business that has proven to be first in class in patient journeys and in medical resolution. Thus, consolidate and scale first and then specialize over time. In the short and medium term, consolidation allows us to seize demand, build scale and cash flow, and deepen patient and physician relationships, given that high complexity scales at a slower rate.
It scales at a slower rate, produces an expert and differentiated offering that takes all. We need to land, scale and then specialize in the high complexity practices that we have with large, dominant market share there. It's important to recognize, so that I ground it in a number.
Today with Opción Oncología, the group of doctors and facilities that we purchased in Monterrey, we represent around 30%-35% of the chemotherapies paid by private insurance. We have a significant position there. That is something we are going to replicate and repeat. In this chart, you can see where we try to depict in the yellow area as the additional value that the opportunity from scaling and consolidating first produces.
We will grow organically with profitable populations and providers. We will selectively scale best-of-class high complexity, well-positioned platforms. You have seen us do that. We land in Mexico, huge position. We buy an oncology group, and that is growing at double the rate that Mexico is growing. We will continue to do and replicate that playbook.
This allows us, at the later stages of the implementation of the strategy, it is particularly aligned with what we call the Auna Way, is to implement the Auna Way in phases. This produces a win-win-win. When I repeat win-win-win, I always see the patient, I see the medical resolution, the physician group, and I see the financial returns and the value creation.
When I repeat something in three times, it is related to those three dimensions of healthcare. That produces a win-win-win in these three dimensions, patient journey, medical outcomes, and of course, financial results. We will do so as a playbook and applied to each operation depending on its maturity. This sequence allows us to create the scale and cash flow that will fund deeper integration over time. Let me walk you through the two stages.
In the near term, consolidation helps us to scale and build a long-term competitive moat, and this creates more value through four major mechanisms. The first, we prioritize profitable high-complexity platforms specialized in surgery, advanced diagnostics, treatment centers that capture high-margin volume. Second, we capture organic volume growth by driving higher utilization across our installed capacity, of course, because there is a significant unmet market demand.
Third, of course, we deepen patient and physician relationships, and we create the intimacy to keep those patient and physician relationships. All of this delivers additional EBITDA growth, that in due time will have higher margins with that specialization than general healthcare, of course. These scale advantages allows us to create durable competitive moats, and we see them today, superior purchasing terms for high-end equipment, for medical devices, of course, for pharmaceuticals.
It allows us to spread the cost of our digital tools, the EHR, the electronics health records, and automated operations over a much larger volume base. Of course, it also helps us lower unit level SG&A over time, achieving operating leverage naturally without forcing disruptive day 1 overhauls. In summary, consolidation helps us to scale and create the platform that is essential for the ultimate goal, a fully synchronized and integrated platform.
In this second stage, growth and consolidation brings us closer to our long-term strategy of the fully integrated model. That means that over time, every acquired asset transitions into our unique model with three core differentiators that build our competitive advantage. Of course, vertical integration, which results in large populations that give us scale. It creates better coordination from prevention to treatment.
It aligns, this is critical, and we will talk about it in value-based care, how we see it so related to vertical integration, value-based care. It creates much better incentive, alignment of incentives for the benefit of patients, for the benefit of providers, and for the benefit of payers. So vertical integration is critical in our strategy, and we have seen the value of that in Peru and in the risk-sharing contracts that we have in Colombia. In horizontal integration, that creates seamless continuity from prevention to advanced care.
It creates great intimacy with patient experience. Of course, it delivers a predictable journey, a predictable medical pathway, and predictable cost for the system. Focus on high-complexity care. Again, high-complexity care, where most of the spending currently and will continue to occur in the coming years. We develop high-complexity research.
It gives us a huge advantage, and we apply such research to our clinical practice to enhance clinical outcomes. In high-complexity care, of course, we produce faster growth of a larger margin operation. These differentiators all align perfectly with our value-based care proposition. As I said before, that we will discuss in a minute.
Finally, this is the Auna Way. Let me bring this back to the Auna Way, which is so critical, and we talk about it so much within the company. The Auna Way is built on these three reinforcing pillars. The patient-centric model delivers an efficient and predictable journey, and our commitment to value-based care. It aligns incentives, as I said before, around outcomes. Second, the network scale and reach across Peru, Colombia, and Mexico unlocks procurement, administrative, and clinical synergies.
Third, of course, medical excellence, standardized clinical pathways, governance, data, and execution across the platform. Together, these three pillars turn scale into better outcomes, stronger economics, and harder to replicate platform.
Let me end by sharing these last points here. The key takeaways for path forward, we see a market that is hugely under-penetrated. Unmet demand across the region. We will deliver organic growth and selective consolidation, capturing value from very profitable, well-positioned populations and providers. Of course, our North Star, the Auna Way. It is a big differentiator. It will produce a compounding of the value that we create over time. With that, thank you very much.
I did not get the applause at the beginning, but hopefully, I will get it now. Thank you, Suso. For this next section, what I would like to do is dig in a little bit more on what Suso just discussed and make an attempt to answer the following questions. How does Auna's strategy translate into shareholder value?
The answer is not a single transaction, and it is not a short-term event. It is the way we build the platform, the way we allocate capital, and the way we turn operating scale into stronger earnings and cash flow generation. Our approach is disciplined. We grow organically, we consolidate selectively, and we integrate over time, as Suso just mentioned. That sequence matters because it allows us to capture demand and build cash generation while preserving financial flexibility. Over time, the platform becomes more integrated, more efficient, and harder to replicate.
But before we get into some of these details, let me explain first why we believe Auna is attractive today and how our strategy creates a clear path to sustained value creation. There are two reasons we believe Auna is particularly attractive today. On the left-hand side, we have discussed this at length in the past, our differentiated integrated model.
We combine patient-centric approach, regional network scale, and the operating capabilities of the Auna Way. On the right-hand side, it is where we have visible near-term catalysts. For example, in Mexico this year, we have proven that there is a path towards operational recovery supported by higher utilization, a better specialty mix, and growth in recurring revenues. Across the platform, these operating improvements will translate into normalized earnings, stronger cash generation, and continued deleveraging. We also see selective consolidation opportunities. These include small accretive transactions.
I think the example of what we did last year in Mexico with Opción Oncología proved to be an incredible acquisition. If you look at the volumes in oncology, the way we doubled them since last year, it is clearly very accretive and builds towards what we want the platform to be. That also can include new cities, partnerships. Larger transactions would only come when leverage and return thresholds support them. The discipline is important.
We are not pursuing growth at any cost. We are building a platform where each step strengths the next one. In short, the near-term catalysts make the equity story more visible, while the platform makes the value creation more durable. This graph is a little bit busy, but our playbook is relatively simple. We grow first, we consolidate selectively, and we integrate over time.
We always begin with an urban healthcare ecosystem where we attempt to connect prevention, diagnostic, ambulatory care, and high-complexity specialty care in dense markets. From there, we have several paths to grow. Our hospital networks allows us to expand high-complexity practices and make better use of the existing capacity that we have.
Our oncology and healthcare plans platform gives us the opportunity to grow the population and the plan member base and connect more patients with our care delivery network. We can also develop new city networks using the right model for each market. It may look like we can own asset, we can do partnerships, we can do risk-sharing agreements, or we can also do asset-light acquisitions, for example, or asset-light expansions.
As we announced last quarter in Lima with the expansion of Lima Sur, this is a very good example where we can increase capacity through an asset-light model. The model does not need to look identical in every city. What matters is that each market uses the structure that best matches its demand, its maturity, its competitive environment, and the capital requirements of those investments.
Over time, these building blocks can create an integrated healthcare platform with national reach in each market and regional scale across Peru, Colombia, and Mexico. The sequencing is very important. We want operating growth and cash generation to come before deeper integration and complexity. That gives us a stronger financial base and more flexibility to make the right long-term investments. Let us go and dig into each of the parts that I just discussed. The integrated model is what creates higher quality earnings.
Plans and population provide a recurring revenue base. Care delivery creates the relationship with patients and physicians. High complexity care improves the specialty mix. Risk management and data helps us manage medical cost and make better operating decisions. Together, these elements produce several important outcomes: recurring revenue, medical cost control, patient and physician retention, better margin visibility, and more predictable cash flow generation.
These components reinforce one another. A stronger connection with patients support better outcomes, better outcomes support stronger economics, and stronger economics allow us to continue investing in the platform. This is the foundation for more resilient earnings over time. Our capital allocation framework is designed to fund growth while maintaining financial flexibility. The first priority is to fund maintenance capital and high-return organic investments.
We want to continue investing in the assets and capabilities that support long-term growth while remaining disciplined about the returns we expect from those investments. The second priority is the deleveraging. Our objective continues to be moving toward the 3x net debt leverage to EBITDA during 2027. As you know, we're coming from levels that were 5x and higher in the recent past. The third priority is to pursue small accretive growth transaction, as I just mentioned.
Those transactions don't need to be large, but they can be very accretive and very complementary to what we're trying to achieve in each of the geographies. Larger transactions might come later, but only when the leverage and the return thresholds can support those transactions. Finally, and subject to some approvals by our board, we expect to begin dividend buybacks in the coming years.
But obviously, we need to make sure that our operations can support those policies. You can see at the bottom that that creates a very clear progression. In 2026 and 2027, the focus is on deleveraging, organic growth, and very small M&As. As the balance sheet strengthens, we can consider larger transactions, begin capital returns, and deepen integration.
The decision rules are as important as the priority themselves. Organic investments must generate attractive returns. Organic, sorry, growth transactions must be strategically relevant. They need to be complementary to our business, and they need to be accretive. Leverage must remain within our target range at all times. Once we go below 3x, we've always said we would not go back above the 3x threshold that we've established for ourselves.
This is how we intend to balance the ambition that we have with the discipline that we have. If we go to the next slide, the organic growth. The organic growth is the base that builds our earnings and our cash flow capacity. In Mexico, the focus is recovery and mix improvement.
That includes insured tier repositioning, higher physician referrals and utilization, and very important, what we did in oncology last year, that is leading our high complexity mix in Monterrey, and potentially down the road, the development of new city networks. Mexico is particularly important because the fixed cost base that we have is already in place. As utilization improves, we have the opportunity to create a lot of operating leverage out of our base in Mexico. In Colombia, our primary focus and our priority in the near term remains cash flow protection.
We also see opportunities to grow very selectively, activate available capacity as we announced in the previous quarter, and expand into HS and specialties. But again, in Colombia, our priority remains cash flow protection. In Peru, the focus is expanding access to continue our growth. We are targeting plan membership and product growth, selective expansion as the one we announced in Lima.
There might be others coming in Lima and in other cities. And further growth through, for example, Trecca, that we announced today, and we will have a panel discussing Trecca specifically, and B2G opportunities that will considerably expand our addressable market in Peru. Today, every country or each country that we have in our network has a distinct role. Mexico provides recovery and operating leverage. Colombia provides scale and opportunities to improve cash generation. Peru provides a recurring revenue base and opportunities to broaden access.
Together and over time, these markets create multiple roads to grow. Our performance is not dependent on a single country or on a single initiative. If we move to consolidation, we also need to be a disciplined near-term consolidator. The principle, again, is relatively simple, is any acquisition standalone needs to create value by itself.
Then with the Auna Way, it needs to create, and the integration with the Auna Way, it is to create additional upside. Consolidation can allow us to expand high complexity care at profitable and cash generative earnings, strengthen existing hubs and physician relationships, and build scale before pursuing deeper integration. But we need to remain very selective. We are looking for profitable cash generation business with a strong fit with an existing hub, high complexity or risk-sharing adjacencies, and a clear organic growth opportunity.
We also require attractive valuation, and we need to be able to manage that with our leverage limits that we have established. The discipline is very, very critical. We are not pursuing scale for its own sake. We are pursuing assets that can strengthen the platform, improve the quality of our earnings, and create value from the beginning. As Suso mentioned a little bit in his presentation, we see two stages. The first stage, we protect the acquired operation and its standalone EBITDA.
We retain physicians and patients, capture demand, improve utilization and specialty mix, and generate earnings and cash flow. Only once the asset is performing within the platform do we move to the second stage, Auna Way integration and compounding value. That includes standardizing clinical protocols, improving procurement, integrating data and technology, strengthening risk management capabilities, optimizing the revenue cycle, and capturing regional operating leverage.
But obviously, that takes not only months, but in many instances, it takes years of work to integrate. But the principle is simple. First, make the asset work within the Auna operating platform, then deepen the integration over time. Mexico is a relatively good example. From the acquisition, we protected the underlying business and grew significantly the EBITDA from the time we acquired the platform, and we made some targeted operational changes.
In 2025, we move into a deeper phase of integration, which integrated more volatility and short-term pressure than we were anticipating. That is clear. But if you look at Mexico today, the model is now recovering, and the integration shows a much stronger platform that is really aligned with the Auna model. This is the sequencing we intend to follow. Protect performance first, improve the business, and integrate more deeply once the foundation is working.
This approach reduces execution risk while preserving the opportunity to create additional value over time. The re-rating of the shares. The reason we believe Auna will re-rate is that our strategy directly addresses the three factors that today we think are currently limiting how the market values the company.
First, we need to demonstrate more consistent and cash-generative earnings. We need to prove the quality of the business, and you can see it in several of our business, but we need to do more of that. Second, we need to improve the operating visibility. Maintaining CapEx discipline, which we have, continue to reduce the leverage, which we have. We lower the risk investors assigning to those risks assigned to those earnings. Third, as we deliver against these commitments and make the progress visible, we believe investor recognition should significantly increase.
Auna's earnings are durable and risk is declining, and the platform is scaling, which allows the market to value Auna on a stronger earning base and a higher multiple. This is the mechanism through which our operating progress translate into re-rating. To close my section, we are not asking investors to underwrite one single event.
What we are presenting in these presentations is really a sequence of compounding choices. Grow the platform organically, consolidate selectively, integrate when the assets are ready to be integrated, and allocate capital in a very disciplined way. As mentioned earlier, near-term catalyst made the equity story visible. The integrated model makes the value creation durable. Our commitment is to execute against clear milestones, protect financial flexibility, and create value for patients, physicians, employees, and shareholders. Thank you.
Good morning, everyone. It is a pleasure to discuss the progress-
That was a very quick transition.
of Auna's regional healthcare platform with you. I will walk through our operations in Peru, Auna's most developed market, and the one that demonstrates how Auna's integrated healthcare model successfully operates at scale. For more than 35 years, we have been building a healthcare platform with strong clinical capabilities and market positions. In addition, Peru still has significant room to grow.
With that context, I will cover our market opportunity, the clinical and financial advantages of our integrated model, and focused capacity expansion that will drive our next phase of growth in Peru. Let's start with why Auna continues to perform so well in Peru. The answer is consistent operational execution and high asset utilization. By the second quarter of 2026, plan memberships continued growing steadily, reaching almost 1.5 million. Across our 15 facilities, we continue delivering a superior customer experience.
Healthcare services recorded an NPS of 85, while healthcare plans scored an NPS of 80. The strength of Peru's platform is also reflected in total network capacity utilization, which has increased to almost 78%. We will continue to grow through targeted capacity expansion while continually improving the returns of our existing network. Why is our capacity utilization so high? Because Auna has leading market positions across our business areas.
As a healthcare provider, we rank second in outpatient visits and third in deliveries in Lima. Outside Lima, we rank number one across outpatient visits, deliveries, and emergencies, and second in surgeries. Another important competitive advantage is our vertically integrated model with a leading position in oncology. Auna has a 44% market share in health plans and an 83% share in oncology plans, with approximately 1 million memberships, which is about 10 times more than our closest competitor.
Auna also has brand strength, which is reflected in consumer awareness. 90% of Peruvians know Oncosalud, while 55% mention us first for oncology coverage. This strong brand equity gives us a clear advantage to continue growing. With this strong foundation and dominant market position, where does our future growth come from? With a population of 35 million, Peru has a total addressable market of approximately 30 million people, representing roughly $9 billion in potential healthcare expenditure.
Within that, we have identified a serviceable addressable market of around 3 million people, representing about $1 billion in potential healthcare expenditure. A large part of this market is underserved in the mid-price segment, with approximately 1.5 million potential customers. This is where we see the next opportunity for growth. To capture this growth, we will focus on two levers.
Geographically, we will target Lima, by far the largest city, and select regional corridors with underserved demand. Commercially, we will scale our oncology and healthcare products through optimized, focused distribution channels. Both enable us to extend our proven model through focused channels without reinventing the platform. To understand how we can capture the mid-price segment profitably, let me walk you through the mechanics of our integrated platform.
Because we are vertically and horizontally integrated, we can create value before a person needs treatment. Annually, we conduct over 100,000 regular preventive checkups. Specifically, we focus on high-risk screenings. We proactively identify members of our healthcare plans who are at high risk of developing cancer, and we track them to ensure they receive the correct screenings for breast, cervical, prostate, and colon cancer.
As of July this year, we have conducted almost 71,000 high-risk early detection screenings, which together with our chronic disease programs, provide important and tangible value. This, along with other member retention activities and market segmentation, results in greater than 62% retention following the initial 12 months of coverage. The longer-term value of early detection is that we can diagnose cancer earlier, and therefore, at a lower average cost of treatment.
Once treatment is needed, our integrated platform keeps the time from diagnosis to start of treatment under four weeks and maintains more than 74% adherence to clinical practice guidelines. All these integrated capabilities are reflected in patient outcomes. Clinically, we achieve a five-year cancer survival rate of 75% versus 69% in the U.S. and 55% in the U.K. Further, our oncology MLR is 50% compared to a 76% median in the region and 87% in the U.S.
Together, these metrics show how our integrated model delivers better outcomes coupled with a controlled cost structure. How do we connect patients to this superior delivery system? The answer is our multi-channel access model. Auna's healthcare plans, together with third-party insurers. Our healthcare plans are accessible to individuals, employers, insurers, and partners, with government services currently under development.
These plans represent 40.5% of our healthcare services revenue and ensure a steady revenue stream to cover a significant portion of our capacity. Regardless of how a patient reaches us, they enter the same integrated care platform. On-site, off-site, and virtual care supported by standardized clinical protocols. This supports a more consistent patient experience, efficient care delivery, better medical outcomes, and value-based services that are aligned across the network. Let's zoom in on the payer mix behind the revenue base.
59% of our consolidated revenues in Peru come from our own healthcare plans, while 41% comes from multiple third-party payers. This gives us a solid base of Auna's own plan members while diversifying revenue from external payers. Within the approximately PEN 239 million generated by third-party healthcare payers, 48% comes from EPSs, 25% from insurance companies, 11% from out-of-pocket payments, and 60% from other sources, such as international patients and those who are self-insured.
Overall, our diversified payer mix supports a reliable revenue base as we expand our platform geographically and grow specialty care. After more than 35 years in oncology, we have built proven clinical protocols, talent retention capabilities, and high-complexity medical governance. This gives us a strong foundation to scale into new high-complexity specialties, including cardiology, neurosciences, and traumatology and orthopedics, creating another avenue of growth. The initial numbers are encouraging.
Year to date through August 2026, revenue from neurosurgeries for spine and tumors increased 20%, traumatology and orthopedic surgeries 10%, and cardiovascular surgeries 5%. This growth is accompanied by ongoing attention to quality. Our arrhythmia unit, for example, is a high-performance clinical unit and the first to be accredited in Peru by the European Foundation for Quality Management.
Receiving this global accreditation, plus the revenue growth that we are already generating, show how we are effectively diversifying from an oncology-led offering into a broader high-complexity platform. To support high-complexity growth and increase capacity to enable further growth, we have an execution strategy focused on disciplined hub-and-spoke expansion. In the short term, we will optimize our Lima network by expanding our outpatient capacity and reallocating space to high-complexity care.
This optimization adds 19 outpatient general health offices and nine outpatient oncology offices, unlocking capacity for higher complexity care with 30 additional beds. In the medium term, we will add 20 outpatient oncology offices and increase inpatient capacity by 50%, adding 90 beds to the Lima network to support growth. At the national level, we also have a clear path to growth. Torre Dos at Vallesur in Arequipa, Peru's second-largest city, will add 40 beds and 20 outpatient offices.
We are also pursuing imaging alliances across Lima, Arequipa, and Piura, and exploring bolt-on acquisitions across the country. Finally, our BTG project, the Trecca Ambulatory Center, is a 20-year public-private partnership. It is designed to increase outpatient capacity in Lima by more than 20% and serve approximately 3 million people a year at full capacity through Auna's partnership with the government agency EsSalud.
To conclude, Auna Peru is not only a mature platform operating at scale, it is a proven and profitable blueprint for Auna's future, with ample room to continue growing in its own market. Peru clearly demonstrates how our integrated model supports high-quality care, operational efficiency, and a stable MLR.
Going forward, we are shifting the mix toward a higher proportion of high-complexity care and Auna's own healthcare plans while executing a disciplined hub-and-spoke expansion to capture more of Peru's mid-price market. Together, these strategic priorities position our Peruvian platform to remain an important engine of Auna's growth and serve as a model for broader growth elsewhere in Latin America.
That was pretty fast. I don't think he breathed for 15 minutes. Anyway, now we are going to do the first panel on Trecca. Suso, Gisele, and Vicente, if you want to come here and take a microphone. Good. Can you hear us well?
You have the mic.
Everybody has a-
You have a mic.
You don't have a mic?
Great. Okay, now I have a mic.
Very good. We are going to start the first panel. As you probably saw yesterday, we issued a press release. All the condition precedents to start the construction of Trecca were met, and that means that Trecca is becoming a reality. In the next 10 days, the Can you hear me or no?
Yeah.
I do not know.
Okay. That in the next 10 days, the construction is going to start. It is a very important milestone, even though it is going to take a little bit of time to refurbish the tower. You can see a picture on how it looks today and how it is going to look in 2 years. It is going to be an amazing project for not only Lima and the people living in Lima, but also for Auna. For this panel, we are going to have Suso, Vicente Checa, who is our leader in Peru, and Gisele Remy.
And myself.
Gisele to talk a little bit about Trecca. I thought I would start with Suso and have Suso talk a little bit of what Trecca means for Auna. Our vision, how do PPPs or, more broadly, B2G fit into the growth strategy of Auna.
Great. I apologize, Lorenzo, because you always try to keep me on track and on script.
I know it's not going to
I just look at this picture, and for those that can see it's so important to recognize. This is the state offering services, not finishing a tower during 40, 50 years. This is a private sector. There are 6 million people around this area, which is a huge healthcare hub, waiting for services.
This is it. This shows you clearly the opportunity here. Yes, for Auna, Trecca brings I think at least two important parts of our strategy. It increases access to healthcare to a huge market. Paid by the state. If you want to be generous, served by the state. Growing the business in a very disciplined way on a new vertical for Auna. This long-term partnership with the government through EsSalud.
Auna can of course apply proven capabilities in this large outpatient facility serving a population that has unmet needs and unmet demand. This is a serviceable addressable market of around 6 million. It is a huge market for us, a huge opportunity for us. And it is a healthcare project, no doubt. More importantly, it is a new vertical in Auna of business to government.
Business to state vertical that we have been growing in Auna, and with this project, much quicker now. B2G, business to government, will complement business to consumer and business to business. And we expect to grow this through different modalities, of course, depending on the government and the partner, and the specific need addressed. I want to remind the audience, we already do this. Today, over 10% of our revenues in Monterrey are related to a very large partnership with ISSSTELEÓN.
That is the social security of the workers and ex-workers of the state of Nuevo León. And with a contract there, this is what the partnership has resulted for them and for us. And I love to say that I am very proud when I meet with the director general there, he always celebrates the highest NPS he has ever had with us, the largest population of course, of beneficiaries now.
There are different structures. The B2G opportunity is immense, and there will be different ways to manage it. But they all demonstrate how Auna can use its operating capabilities, proven capability to work with public sector patients, public sector payers. And of course, again, expand access to care. When in the previous presentation, I spoke about 10% penetration of private insurance, 6% penetration of private insurance in Peru.
Here, we are talking with something that multiplies the serviceable addressable market by a huge factor of 5, 6, 7, 8. That is the opportunity we have in this new vertical. So the project is deeply connected to our core business. It is focused on outpatient care. It addresses a huge structural gap in Lima. And for our operations in Peru, that Vicente was very well-presented by Vicente, a huge incremental growth opportunity for Peru.
Great. Thank you, Suso. Maybe turning to Vicente. Vicente, if you can tell us a little more details how the project is going to look like, that would be great.
Sure. This is a 20-year concession. Two years for construction and 18 years operation. Renewable, with an option to renew for another 20 years. This is a 40-year commitment for us with the government in helping EsSalud cover a large unmet need.
This will be about 59,000 sq m, distributed in 23 floors with three basements, 145 medical offices, and it will include over 300 pieces of medical equipment. We will be employing at full capacity about 1,500 people to provide services, needed services to about 3 million people in Lima, in the city of Lima. And we will do this by building the infrastructure, managing the operation, managing the people and the patients, and providing care that is very needed in Lima.
Very good. Maybe staying with Vicente. Can you give us a sense of what is the gap that Trecca is going to fill in Lima?
Sure. There are about over 11 million medical appointments that are the demand for EsSalud in the city of Lima. EsSalud today covers about 6 million of those. 5 million are not taken care of. We will be able to cover 1.9 million of that. It is a big portion of this unmet need. There is still a lot of demand that is not going to be covered yet, which ensures that our Trecca project will be highly successful.
We will be providing services through seven prearranged packages or service lines that include preventive and ambulatory care, specialty services like colonoscopies, image reading services for images taken throughout the country, MRIs, preventive checkups for oncology, urgent care. Those are the few of the services that we will be providing. And delivering care, again, to a population that urgently needs it, especially on the prevention side, but also taking care of a big load that EsSalud has currently.
Great. Maybe, I am going to take a question that we got over the webcast, and we will continue the conversation. But one of the questions that came up is, the packages that you just described are not necessarily high complexity, which is the DNA of Auna. I do not know, Vicente or Suso, how do you reconcile that with our strategy of high complexity at Auna?
Suso, maybe I could start. I think we are about high complexity, but we are also about operational excellence. We are also about caring for populations and taking preventive care to different people that need it. This is a great opportunity to provide that care with a model that gives us access to a high volume of patient care that will provide probably a lot of capabilities for our continued growth, as well as gives us insights into a population that is currently not being served by us, now that it is being served by social security.
I think also, Lorenzo, behind this project, there is a lot of process. As you scale, process is critical.
Those are key capabilities that no one actually sees. But behind this, there are huge columns that support our practice based on process. The other issue is, we are about high complexity practices.
This unit in particular has services that are related to pre-surgical risk. That is a critical low complexity episode related to high complexity practice. We do pre-surgery risk all over the region, and it is a part of the high complexity practice. Imaging in this facility or this contract, we do that every day. It is a very low complexity event, very much related to a high complexity treatment. I would not confuse this as something unrelated to our high complexity practice and obsession, because this captures high complexity in a huge way.
Very good. Excellent. Let us move on. It also is not only different from the point I just mentioned, but Gisele, maybe turning to you. This is a very particular type of contract, a PPP. What are the implications for Auna? How do we manage that? If you can expand a little bit on more the financial parts so investors can relate. How important is this to Auna? What can we expect going forward?
Great. Thanks, Lorenzo. First of all, I think it is important to understand that under the PPP modality in Peru, the project is self-financed and non-recourse to Auna. The way that this works is that the contractual framework is based on certificates of completion for the construction phase, and basically EsSalud reimburses Trecca every time a pre-agreed milestone is reached.
Therefore, the project limits any upfront capital needs and reduces liquidity risk. At the same time, the project is obviously designed to scale rapidly once we initiate the operation, and that is particularly important. In addition, once we reach operation, there is a minimum guaranteed demand. Under the PPP agreement, this provides great visibility on the revenue profile. We firmly believe that we will exceed that minimum demand rapidly given all the market needs that Suso very clearly discussed earlier.
On top of that, the revenue stream is even more predictable because the price package has already been agreed, and it will continue to increase by a predetermined formula during the whole concession term. As Lorenzo noted earlier, it is progressing according to the timeline, and we expect to initiate construction this month, which will have us initiating operations in late 2028.
Basically, to give you a sense of scale, based on the minimum guaranteed demand, which we expect, as I mentioned earlier, will be exceeded, Trecca is expected to generate approximately PEN 120 million of revenue by 2030. To put this in context of the numbers that Vicente was mentioning earlier, is approximately 20% of Peru's current revenues. I think that point is extremely important.
It's going to be an important share of our revenue, and that's reflecting the minimum demand, which we think will be higher than that. I think that gives us a little bit of an idea of the financial profile and also what we could expect in the future.
Yeah. No, that's very helpful. The PEN 120 million revenue figure, the concession agreement is public, so we're not giving you any information that we shouldn't be giving you. If you take the minimum guaranteed demand by the government and you look at the formula on the price, that's how you come up with that PEN 120 million.
But as Gisele mentioned, it's very significant now, and it's one of the We get a lot of questions about how much more can you grow Peru. You can still grow Peru very substantially in the coming years. Maybe to a couple of last questions, given the time is, what are the synergies, Vicente, that we see with something like Torre Trecca and the current operations that we have in Lima?
Well, I think there are many synergies there. Also, it would also give us a lot of scale as well. We're going to be doing a lot of lab work, a lot of imaging work that we currently do. There is a lot of synergy also in the human capital that we'll have operating the tower, and the capabilities of managing a highly efficient healthcare facility that needs to be very precise in terms of cost controls and patient journeys throughout the operation is something that we are going to be leveraging. That'll also provide us a lot of learning as we continue to grow and expand.
Perfect. Maybe a last question for Suso to close this panel. You mentioned what we're doing in Mexico with ISSSTELEÓN, which is not a PPP, but it's also trying to do something on the B2G vertical. What other opportunities do you see to expand that into a larger business for Auna going forward?
I think that in Peru, we will see the government requesting more participation from the private sector in the social sectors of healthcare and education. I think that will be a growing avenue. In Mexico, not that we've marketed anything, we've already been called for meetings with the Chihuahua State and some other states. They are thinking of, "How do we get you guys involved in delivery of services?" These conversations are happening, and I see them happening more and more because the state recognizes its incapacity to deliver services.
Perfect. I think, in summary, this is a very large project. It's very important for the Peruvian franchise and, more importantly, for Auna. I think in terms of risk, it's relatively low risk. For people who are not very familiar with the PPP framework in Peru, it's not something new. It's something that has existed for the last 30 years and that works extremely well.
I think it's also important to mention that during the negotiation of the addendum of the contract, we went through three different administrations in Peru or four. Difficult to keep up. Every administration was pushing for Trecca to happen. We just basically completed all the conditions precedent with the new administration. You never know how the transition is going to work, obviously, when you have a new government taking place, but it's been phenomenal. It's been very quick, it's been seamless, and it's something that is very important not only for us at Auna but also for the healthcare system in general in Peru.
Just to add there to what you're saying, Lorenzo, I think there's a lot of goodwill in the people that are running the different public organizations because they recognize that there's a huge need, and they recognize what role we can play. There are other opportunities there that we need to capture and work through.
Very good. Thank you, Suso, Vicente, Rayet.
No, Gisele.
Sorry. Sorry, Vicente and Gisele. Sorry.
Thank you.
Hopefully, the transition for the next video is going to be a little bit shorter, smoother.
Thank you, Lorenzo.
Very good. Now we're going to move to the Colombia section.
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Very good. This was Pablo Cervera, the leader of our Colombian operations. Now we're going to move to Monterrey with Alejandro Torres.
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Now we're going to have our second panel. We're going to take a minute just to Suso, you need a microphone?
Yeah, I have it.
Oh, you have it.
I kept it.
Well, as we prepare for the panel, just to remind people, we have been receiving questions on the webcast. If you can continue sending questions, that way, for the Q&A, we will be able to cover all of them. Yes. Very good. For this panel, we have Suso again, and Rayet. And we are going to talk a little bit about value-based care.
You heard Pablo mentioning that several times during his presentation. So far, I think we have talked a fair amount about where we are going, what we want to do, the operations in each of the countries. But value-based care is something that cut across all what we just discussed, and the central to our model. We thought it would be a good idea to spend a little bit of time having a discussion around that. Maybe I can start with Suso.
Value-based care is a term that we hear more and more across healthcare and more and more in Latin America. Can you tell us a little bit what it means for Auna, and why is it important?
Great. Thank you, Lorenzo. First of all, value-based care changes what the healthcare system is optimizing for. This is critical. This is at the core of the ambition of value-based care. It must be compared to the traditional fee-for-service model, in which providers are largely paid for activity. That is, more consultations, more procedures, more hospitalizations, more days of hospitalization. They are rewarded for volume rather than the patient outcome.
Therefore, the incentives of the provider and the payer are not aligned. Value-based care aligns payer, provider, patient incentives. Those incentives come together. The objective, of course, becomes delivering the best clinical outcome for the patient. But critically, managing the total cost of care efficiently. Value-based care resolves that. For Auna in particular, because we operate these vertically integrated platforms, the Auna Way uses value-based care as a fundamental element.
It is at the heart of our strategy. It's not an additional element of our strategy. It is at the heart of the strategy. We have the clinical capabilities, the hospitals, the physicians, the data, of course, in all our facilities, and then the risk-sharing relationship with our payers.
So when we prevent unnecessary utilization, when we diagnose earlier, when we diagnose a disease earlier, when we standardize a clinical pathway, a patient journey, more effectively, we are creating better outcomes for the patient and better economics. That efficiency of a fee-for-service versus a value-based care system, that efficiency improves the cost of care for all and improves the delivery of care for the patient. This agreement, this alignment on this agreement, is the essence of value-based care.
Very good. Thanks, Suso. Now that we've looked a little bit about the differences between the traditional model and the value-based care, maybe Rayet, why don't you tell us what changes operationally for the patient when you move from a traditional model to a value-based care model?
So I think that the biggest change is that we manage the entire patient journey rather than individual episodes of care. What this means, this means that we have earlier diagnosis, we have a better coordination between specialties, and also we have a unifying clinical pathways. One thing very important is that we have a strong use of data.
This is fundamental and key for our processes because with that information, we can define the specific pertinent treatment should be for each patient. We have some examples on that. We have for oncology, and we have cardiology. As Vicente was presented, we think that when cancer is detected earlier, of course, the outcomes improve for the patient. That is our priority. Of course, we have lower cost in the treatment.
You know that if we detected an advanced stage of cancer in patients, the treatment, I think, can be multiple times that if you detected the cancer earlier, of course. We have this integrated process defined, and we practice this in Mexico, in Colombia, and of course, in Peru. Lorenzo, this is not simply to reducing healthcare spending. It is to integrated the journey and deliver the care more effectively.
We think that this is a strength of Auna, and we are working to have these kind of contracts not only in oncology and in cardiology, but in other specialties, as Pablo said before, in neuroscience and, of course, in trauma and orthopedics. I think that another good example is to talk about the cardiology part. As you know, we have different services line in Auna.
We integrated the consultations part, the imaging part, and we, of course, have hemodynamics and cardiac surgery. When we have this integrated part, we can, of course, have a better adverse events, better complications rates, and of course, we can have better readmission rates. We have these KPIs, and we monitor these for all of the patients that we have.
A very interesting part here is that with that information, we can define fixed and predictable prices to the insurance company. It is important in the relationship with the companies. So we improve the patient outcomes, and at the same time, the total cost of care, and I think that Vicente was talking about the MLR. We have our MLR close to 50%, 51%, and with a net promoter score like 88.
Perfect. Very helpful. Out of the three geographies, and obviously that is where the ambition to do that and more everywhere, but Colombia is probably the best example where we have done that for the longest time, and it works very well, no? Can you give us maybe some examples specifically to Colombia?
Yes. Absolutely. As Pablo said before, we have the experience, we have the population there. We have 3.2 million people under these type of contracts. We have been implementing, incentivizing these type of model value-based care through risk-sharing contracts like 14 years.
In Colombia, when we talk about the oncology, we have an integrated patient journey and unifying clinical pathways that we can diagnose earlier the patients, and we have, in this moment, 10 days in diagnosis process. It's amazing to have these KPIs in less than 30 days. It's a good KPI when we talk about oncology.
When we talk about the survival rates, for example, in lung cancer, survival rates in 5 years, we have 33%, and the national KPI in Colombia is close to 17%. So we are above these KPI. These are, Lorenzo, concrete examples how you can adapt and have processes to have better value-based care contracts.
Very good. Maybe let's go back to Suso. Suso, why do you believe this model is particularly relevant in Latin America? Not a lot of people think about that today in the region. Why is it especially relevant for the region?
In many healthcare conferences, and particularly in recent ones that I've been to in Mexico, it's clear that the fee-for-service model has its future days counted. Value-based care is no doubt the solution. The context is healthcare costs are rising for payers, both public and private. It's not only that they're rising, it's that there's a high factor of unpredictability of what's going to come in terms of cost and growth of cost.
Secondly, populations are getting older, but the prevalence of chronic and acute diseases and complex diseases is growing dramatically. This, again, chronic complex diseases require a pathway of treatment that is all-inclusive to all the services that patient requires. That means that more demand for precisely the kinds of high acuity care that's required, that are most expensive, that are coming up with higher frequencies.
That today are managed in a fragmented system, in a system that little silos don't talk to the next silo. Third, there's increasing pressure across the region to really improve the quality of life after 60, 70, 80 years. Really to improve the medical outcome after surgery, after a radiation chemotherapy sessions. Value-based care focuses on that medical outcome.
Value-based care addresses all three of these. When you put it together with risk-sharing contracts, or when you put it together with a policy that actually needs to pay for all those services, the alignment is structural. It's cultural for us at Auna. We believe that this shift from volume towards risk-sharing, value-based care is the only way for sustainability in healthcare. Not only in Latin America, we see it in other countries in the world. It's not something that is a fad. It's something that today makes systems in the world be sustainable. It's about cost predictability, it's about efficiency, it's about really focusing on the patient and the medical resolution.
Very good. Thank you. Rayet, there are a lot of obviously players that can claim that they do value-based care. How do we practice it and on the ground in each of the countries, and what gives Auna the right to win as a very value-based care player?
Lorenzo, first value-based care only creates financial value for whoever is integrated vertical, and thus holds both the premium part and the total cost of care as we have, for example, in Peru. Auna does so in distinct views. For example, in Peru we have the both sides. We have the insurance part, and we have our clinics and hospitals, and we work in integrated form.
But in Colombia, we do value-based care through risk-sharing contracts or risk-sharing models. In Mexico, we are working in the B2G strategy that Suso was talking about, and we have these type of models with ISSSTELEÓN in the state of Nuevo León. We can adapt the value-based care in each country, in each city, or actually depending on the insurance company needs, and we can offer different ways of value-based care.
This show that we can have three, four, or five distinct ways of implementing this. We think we are in a strong position. You said why do you think that we have the right to win? We think that we have the experience, the data, the protocols, we have the physicians, we have strong positions in research, as Pablo Cervera said before.
We have more than 100 active clinical trials, not only in oncology, we have in cardiology too, and we plan to have more sites in our region. For example, we are working to open in the next months our site in Monterrey. We have here the knowledge, the physicians, and the processes. Suso Zamora was talking about the processes when you talk about Trecca, for example. We have the processes, the guidelines, the protocols to compete in this part. When you combine these capabilities, you are in a strong position, and we can grow in this.
Very good. Thanks, Rayet Harb. Maybe to close, Suso Zamora, why should investors care at all about value-based care? What does it mean for our growth and for our financial model?
Well, I think investors care and should care more because healthcare is being dislocated by that.
Fee for service is out and a lot of players have their days counted. Those that grow their value base, their risk sharing of that value base will be clear winners that will take a huge part of the market. That is very important. Risk sharing models, in addition for players like ourselves, they produce recurring, predictable revenue.
The traditional collection cycles in healthcare are a challenge. These actually produce monthly payments, and we have the platform of services that has been paid for to deliver those services. Doing value-based care does not require an additional CapEx investment. It actually delivers, through the processes that Rayet was talking about a minute ago, through processes, efficiency on the same asset. Like Torre Trecca, we scale the same procedures. Let's focus on that one minute on Torre Trecca. That huge building doing six services.
What kind of efficiency are we going to get there when normally a hospital delivers 10,000 to 15,000 different services? That tower is going to deliver six services. Our oncology practice delivers in the hundreds of services, not more. The more you specialize, the more you scale, you produce these efficiencies.
Going back to the point. We have this platform that is still producing 60%, 70%, 80% of revenue from fee for service. Those assets are paid for. If we can use them much more efficiently, scale them, and specialize them, their financial returns to Auna will be much greater, and of course, that will bring, we believe, value appreciation to the company and of course to investors. I think this is not something that is far from us. It is very natural for us.
We started, Oncosalud had this view on integration, on making sure that the prescription was managed by the institution. It was the adequate. It could scale. It could produce predictability in the patient journey, the medical outcome, and financial returns. We are doing exactly what is natural to us, and we think that will definitely produce great outcomes for Auna and for its investors that support it. Yeah.
Maybe just a follow-up on this for both of you. How do we measure success for us? What should people expect to make sure we are on track? How do we measure success?
In terms of value-based care, we measure success in those three dimensions, and we're very passionate about that. We measure NPS to measure the journey of the patient, the scheduling, the experience, and the administrative experience, and of course, the experience with the physician or the nursing staff. We measured it on a continued basis, and we compensate our teams based on patient experience.
In addition to that, medical outcome. We measure, in cancer it's easy, survivor rates. In other practices it's days out of the hospital. It depends on the practice, but it's very clear and quantitative, is that it's very much we're measuring medical outcome. This patient has actually received full value for what he or she is paying for. Of course, value-based care must be measured financially. It must be measured financially. We do it for the different practices that we have, and we do it to make sure that it accretes value to the capital base, and it accretes additional marginal returns to our EBITDA growth.
Great. Well, I think this is a good place to end this panel. I think value-based care, as you mentioned, brings together a lot of the capabilities that we've discussed today in our clinical expertise and excellence our integrated network, the data, and we're going to very briefly speak about data, digital innovation, and so on, and our experience managing
Yeah
complex diseases. Thanks a lot, Suso and Rayet.
Thank you, Lorenzo. Thank you. And thank you, everybody.
The next, let me just test. We thought it's something we don't discuss a lot with investors and that doesn't come up, but we thought it would be important to talk a little bit about our digital strategy and how do we, in our operations in the countries, manage all the digital transformation data and artificial intelligence. We're going to show you a prerecorded presentation from Rayet that I think will give you a sense of what we're doing in our operations.
Good morning, everyone. I am delighted to share with you how our digital strategy contributes to Auna path forward. I want to be clear from the start, our digital strategy is deeply embedded into our company's Auna Way. Unlike the traditional approaches in Latin American healthcare, whereby custom IT solutions are built for every new clinic or country, our strategy is to build one scalable architecture for the region, reducing duplication and accelerating implementation.
This creates significant business impact across Auna's regional platform. It increases operational efficiency and drives sustainable growth. As we expand our platform, the marginal cost of deploying new technologies decreases, which strengthens our overall margins. At the same time, our digital architecture supports value-based care. To execute this vision, we have structured our teams around three drivers that directly impact Auna's P&L in a measurable way: growth, efficiency, and patient outcomes.
First, our digital channel supports growth by increasing the number of patients accessing our services. Through own channels and a regional CRM, we acquire patients more efficiently and at a lower cost, and this is measured directly by the sales leads originated by our digital channels. Second, our digital strategy fosters efficiency.
By automating operational tasks and digitizing the revenue cycle, we aim to lower our cost to serve and our revenue cycle base while maintaining our clinical standards. Third, regional digital initiatives increase patient engagement through omni-channel self-service across the patient journey, ensuring treatment continuity. One example is the Auna app, which will be on display as part of the tour at Clínica Delgado later today. This app works with 15 functionality and has 650,000 users, 110,000 of which are active users.
We place a strong focus on patient experience with NPS for healthcare services at 88 and 80 for our healthcare plan NPS. While mining, analyzing, and employing data effectively delivers superior results, the data obtained through our regional integrated network is our competitive advantage. Unlike the rest of the industry, we are actively unifying our cooperation data and insights.
Today, this data advantage is driving cross-border synergy in three critical areas of Auna. First, revenue cycle management. By managing patient and payer contracts as unified master data, we automate reconciliation and create a single billing to collection workflow. Second, optimal external spend. We have transformed our procurement model using data-enabled analytics to track spending and for strategic sourcing, identifying product substitutions and tracking contract adherence across the region. Third, revenue growth through commercial planning.
We now rely on a single regional dashboard that monitors our commercial initiatives, sales performance, and conversion rates. This gives our management team better visibility for demand planning. Using a large regional database proactively creates a competitive moat that is difficult to duplicate, enabling us to achieve efficiencies across our operations. Now, let me explain the path forward with a strategy to become a robust digital system that is regionally integrated and scalable.
This path follows three phases using a clear execution roadmap. Today, we are consolidating quick wins, which include the implementation of regional capabilities and active AI initiatives. In the medium term, we are developing the scale of digital solutions aiming to implement AI across both clinical and back-office operations. Our long-term vision is to operate an integrated regional digital ecosystem that facilitates the scaling of Auna's regional platform and generates persistent P&L value over time.
Our digital roadmap for the future is possible because we invest in four shared capacities. These include unified master data, scalable platform, AI as a strategic partner, and Auna's digital talent and culture of accountability. As we look at scalability, artificial intelligence is a vital strategic tool which must be evaluated and employed with discipline in a highly regulated industry like healthcare. Our governance framework is built on four steps. First, strict selection.
Every initiative is prioritized by a clear business case and strictly governed to mitigate any regulatory risks. Second, agile co-creation. Our digital team works directly with our core medical and business talent to focus on practical, everyday efficiencies. Third, rapid deployment. We test minimum viable products in weeks and continuously track adoption. Finally, each AI initiative is weighed against its potential and must deliver auditable operational savings, revenue protection, and growth.
Rigorous discipline has enabled us to safely deploy AI across Peru, Colombia, and Mexico. We have built in-house capabilities using vendors only selectively when we need to accelerate time to market, and each AI implementation is measured by the return it delivers to Auna. Now, let me show you some AI use cases that are in deployment stages or are already driving efficiencies and cross-border synergies. For clinical note efficiency, we developed Medbox, a tool to structure post-surgical notes.
For billing accuracy, we are piloting the conversion of images and text into structured data to reduce the number of returned invoices. We use AI for smart scheduling for patient retention. For revenue cycle management, are validating medical record completeness within 24 hours. Finally, we are deploying risk scoring for sales and admissions for revenue protection.
These examples show you that we use AI across different processes and maturity levels with a focus on verifiable results. With those examples of use cases in mind, I would like to zoom in a successful AI case in Mexico. Traditionally, post-surgical documentation is a bottleneck and pain point for physicians. With Medbox, we have reduced the time doctors spend writing notes nearly to 85%. We have established a new time to document a standard of just five minutes, down from an average of 48 hours.
These improvements have also led to 60% fewer days in clinical records, which directly accelerates our billing and collection cycles. Given the success we have had in Mexico, we are now evaluating its deployment for Peru and Colombia. I will conclude with our key takeaway. Every investment and initiative delivers real impact to Auna's bottom line, and we guarantee this in three ways.
First, we focus our investment purely on quantifiable value, strictly prioritizing initiatives that deliver tangible savings or incremental revenues. Second, business cases and KPIs underpin every single digital initiative. We define the expected value upfront and track execution through adoption and efficiency metrics. Third, we continuously review our digital portfolio, always reallocating resources toward initiatives with the strongest demonstrated returns. Digital at Auna is a highly governed, scalable engine designed to drive our margins and accelerate our regional growth. Thank you very much.
Great, thanks. Thank you, Rayet. Now we're going to go to the financial strategy section with Gisele, our CFO.
Hi, everyone. Thank you for sticking around for the last presentation before we move to the Q&A. I am tasked with summing up everything we have seen today. What does it actually mean as far as our financial strategy and our financial metrics and performance? To get started, there we go. To start off, six financial priorities anchor our path to disciplined and profitable growth.
Our financial mandate obviously is centered around these six priorities. First of all, we start off with revenue growth. We are delivering robust top-line performance and have already achieved 9% revenue growth year to date on an FX-neutral basis. This is year to date to the second quarter and is driven by organic growth across Peru, Colombia, and Mexico.
Second, our annual target is to achieve 20% adjusted EBITDA growth through a combination of organic and inorganic expansion, and this target is a long-term target. This is our target, and even though we have encountered setbacks in 2026, we continue to remain committed to this target in the long term, as I mentioned, through a combination of organic and inorganic growth. Further in the presentation, we are going to talk a little bit about the structural value levers that are going to take us to that long-term target.
Third, I think that our investor community is very much aware that we are laser-focused on cash generation. I think it is very powerful to note that we have had a 95% adjusted EBITDA to operating cash flow conversion rate over the last 12 months. We are very proud of this, and it is the product of strict discipline in our day-to-day operations.
We have heard a lot about the value drivers behind that today, the predictability of collections in value-based care, everything that we are doing in the revenue cycle management, both through the digital initiatives as well as process excellence. Finally, all of this coupled with the entire working cycle, and through a whole host of supply chain management initiatives as well.
Fourth, we have talked about it in several of our interactions with you and the investor community, we continue committed to deleveraging. We closed the second quarter with 3.6 times net debt to EBITDA, and our path is set to reach the below three times target that we have in the medium term. Very much off the back of the strong cash conversion that we are achieving and the EBITDA recovery that we will talk about further in the coming slides. Fifth, we maintain very strict capital expenditure discipline.
As we mentioned in our guidance, we are targeting 4% of revenues for CapEx in 2026. This CapEx discipline is very much reflected in our return on invested capital target. Our investments are guided by this 20% ROIC target, ensuring that we only fund highly accretive projects. I want to be clear that we use this target in all the capital allocation decisions that we make and monitor it over time.
To make this a little bit more tangible, I would like to give you a few examples. Several of our organic investments in Peru that are currently at maturity have already reached or even surpassed these levels on a recurring basis. In the case of Mexico, for example, Suso mentioned earlier as well as Lorenzo, the acquisition of the Opción Oncología medical practice that we executed in Monterrey.
This project is obviously the first stage of a larger project as far as oncology in Monterrey, the Center of Excellence, and everything that we're going to continue to do there. The first stage of that project through the acquisition of the medical practice is already approaching this 20% return on invested capital target and will reach it in the near term.
We expect this to be duplicative through everything else that we're doing with the Center of Excellence and also the acquisition of the linear accelerator that Alejandro mentioned earlier. Moving on. We heard from each one of the three geographies where we operate today, and each country's strategy is very clearly translating into a more resilient earnings base. We look at our geographies.
They all operate at different levels of maturity of the value-based care and vertically integrated model that we're building in Auna. In the case of Peru, our most mature platform, we basically capture demand and broaden access through a highly integrated model that's supported by 1.4 million plan memberships.
This provides a highly recurring revenue base with a healthy 21% adjusted EBITDA margin. In Colombia, we have deliberately prioritized cash flow over volume growth the last few years. As we stabilize our new prospective global payment PGP contracts, we have 20% of revenue now under these value-based care models in the case of Colombia, and 21% of revenue from the private market, as Pablo was mentioning earlier. I think it's important to note that this transition has obviously had a concrete effect on cash conversion in Colombia.
This is a question that we receive from investors a lot, and I think it's powerful to note that we have accomplished an 88% EBITDA to operating cash flow rate this year. Moving on to Mexico. We are obviously focused on capacity utilization through accretive high-complexity volumes. It's not just increasing utilization for the sake of it, but making sure that it's a quality revenue base that takes us there.
At the current occupancy levels, you can see that we are at 26% EBITDA margins. The recovery that we've had over the last 12 months has also shown how accretive volumes have been directly correlated to improvement in the EBITDA margin. That is why we continue to be confident that as we continue to scale, we will continue approaching the 30% structural adjusted EBITDA margin that we target in the case of Mexico.
Moving on to the next slide. Suso talked about scaled, right? He mentioned operating leverage. A little bit about how we're seeing the results of this in Auna is that basically, capacity utilization over the past few years has provided a strong mitigation against the inflationary pressures that we've seen in the region and across the healthcare sector. I think since each country is in a different level of maturity,
it's interesting to look at this on a geography by geography basis. In the case of Peru, we've reflected a decreasing trend in fixed costs as a percentage of revenue as capacity utilization has continued to scale over the past few years, and the results are clear. In Colombia, as I mentioned, we have purposefully contained volume growth in order to prioritize cash flow.
However, in that context, we have continued to maintain strict cost discipline, which has permitted us to maintain stable ratios of fixed cost over revenues, again, within the context of an inflationary pressure. This is obviously the product of discipline. In the case of Mexico, this was also mentioned earlier by Suso, our fixed cost base is already built. We have made also investments in that fixed cost base over the past few years.
That is why we think that we are very well positioned now as we continue to scale and increase volumes, as has been the case over the last 12 months, that we will continue to see that operating leverage that will take us to the increased margins that I mentioned before.
We talked earlier about our medium-term earnings ambition and the long-term targets that we set in terms of EBITDA growth, earnings growth, et cetera. I think it is important to note that a lot of the levers that are going to drive that growth in earnings are under our control. To achieve our medium-term earnings ambition, our strategy is divided in two phases, as you can see.
The first being to recover some of the setbacks that we have had this year, and then going forward, how we expand, given the structure and everything we have talked about today and the underlying strength of the business. First, we are recovering from identified one-off transitional items in 2026. This includes, we have talked about before, the normalization of billing write-offs in Peru related to consolidations from previous years.
Also, we would add to that, and what Suso was mentioning earlier in the introduction, the stabilization costs of our new PGP contracts and payer mix in Colombia. Specifically this year, we have encountered a specific setback related to a payer contract that we have there.
This is a one-off situation that we expect to stabilize. Once normalized, we move on to the expand phase. I think we have already seen a lot of these levers in our actual results, and we think they will continue to expand as we continue to scale. We will drive margin expansion through accelerated growth in Mexico and our operating KPIs already show that very positive trend.
The regional procurement savings that have been mentioned in Rayet's presentation and what Suso mentioned in scale are evident and are also reflected in the fixed cost numbers that we have seen, and that will continue to scale as well, as well as diluting SG&A efficiencies. All of these impact directly in EBITDA growth.
Furthermore, deleveraging will impact directly on the reduction of finance cost, as well as the improvement of our effective tax rate, which will further impact the quality of our earnings. Ultimately, maximizing returns on our existing base and generating cash flow is also going to help fund that deleveraging which I was mentioning. We talked a little bit about cash conversion, and I did want to highlight some of the underlying metrics that we are seeing and how we are measuring this and how it has had a very strong impact on the sustainability of the business.
All of our underlying cash metrics demonstrate the structural integrity of the plan. We successfully fund our operations through a negative cash conversion cycle continuously over time. We are able to fund our operations through our working capital management. CapEx discipline, I already mentioned, and we have maintained it between 3%-4% over the past few years.
Because of these efficiencies, our free cash flow after interest payment has improved materially over the past few years, going from the cash burn that we had in 2023 to the accretive cash generation levels that we are currently seeing. This cash flow generation is what has led us to deleveraging over the past few years, and what is also putting us in a very good position to reach that 3.0 times net debt to EBITDA target that we have in the medium term.
We recently published our operating KPIs, as we do in the following two weeks after we have closed the quarter. The solid operating growth continues to be reflected in those operating KPIs. Before addressing our financial outlook and addressing the press release, which was released earlier this morning, I did want to highlight the operational strength of our platform through some of these operating KPIs.
You can see emergency treatments in the third quarter growing 8%, surgeries growing 12%, days hospitalized growing 6%, capacity utilization continues to increase on a consolidated level, chemotherapy and radiotherapy sessions growing 7%, and our plan memberships, which are already at a very, very high scale, continuing to grow. This is the engine and the driver behind what is going on with the revenue growth this year.
Consistent with those favorable operating trends which I just mentioned, we do expect full-year revenue growth to remain aligned to our previously communicated guidance range. Furthermore, we expect capital expenditure to remain within the guidance range, and our cash flow and leverage are evolving favorably this year with strong working capital management being an important driver behind that and the cash conversion numbers that we saw earlier.
However, we are updating our outlook on EBITDA, as Suso mentioned in the introduction. While we previously expected full-year EBITDA, excluding one-time effects primarily related to the billing payer penalties associated with reconciliations from prior years in Peru, to land at the lower end of our guidance range. We are currently experiencing subsequent downward margin pressure from, as I mentioned, a specific contract in Colombia, and this is leading to a weaker full-year performance.
Therefore, we now anticipate EBITDA growth in 2026 to be broadly stable year-over-year. Obviously, we have not published our third quarter numbers yet. We are completing our review of these full-year implications, and will provide more precise quantified details during our upcoming earnings call when we publish the third quarter numbers.
I think it is important that we wrap up the financial strategy, leaving it very clear that we are addressing these 2026 headwinds head on, and that the addressing of those headwinds will position Auna for growth in 2027. We have a clear path to recovery from this year's one-off impacts, which have already been mentioned, and with expanding margins through all the value drivers that I mentioned, through rising utilization and structural efficiency levers, both in EBITDA as well as in cash conversion.
We continue to focus on our country-specific capabilities to support that consolidated earnings growth. Also, I think it is very important that the investor community be very clear that we execute very disciplined capital allocation focused on growth, cash flow generation, and accretive returns, which will translate into shareholder value. We continue committed with our increasing EBITDA targets coupled with high conversion, which will take us below those 3.0x net debt to EBITDA target that we are aiming for in the medium term. That concludes my presentation.
[Foreign language]. So obviously we are running late, as usually these events go. We have about more than 150 people on the webcast, so there are a lot of questions coming in. I am going to start with a few questions that came in, and I will open to questions in the room. You can ask them in English or in Spanish.
I will repeat the question so everybody in the podcast can hear the question and the answers. So I am just going to wait for everybody to be ready, and we can start. Very good. So the first question, and again, it is not a question that we get. Recently, we have had the question more, but we do not discuss that a lot publicly, but it is related to El Niño, Vicente. How are we preparing for El Niño? What are we doing? What do we expect?
Yes. Thank you, Enzo. Good question. We have a forecast for a strong to extremely strong El Niño for the end of this year, beginning of next year, and weather can be highly unpredictable. We have activated a plan that is dedicated to driving forward different action plans to make sure that we have operational continuity, and we ensure the safety of our patients and our staff.
We are reinforcing infrastructures. We are ensuring critical supply for different medications and other kinds of supplies. We are making sure that we have backup suppliers for fuel, water, electricity, our own generators, both backup generators, and making sure that we have pre-organized flows of patients back and forth between where needed. Between northern Peru and Lima or between Arequipa and Lima. We are doing this not only for-
Arequipa, Chiclayo, and Trujillo were where probably most impact will happen, but also in Arequipa and Lima, where we will have also some impact. We are doing this as efficiently as possible, but again, making sure that we cover and make sure that our patients will be well taken care of and there is safety for our staff as well.
Very good. Thanks, Vicente. The next question, and after I'll turn to people in the room, is related to Mexico and how much the recent operational improvement reflects the sustainable recovery. I'm not sure who wants to answer. I'll start answering the question, and I'll pass it along. I think it's very important.
The performance of Mexico this year, in my opinion, has been remarkable. This year in Mexico, at the beginning of the year, the government changed the rules on the VAT and the deductibility of the VAT on insurance policies. For the first time in Mexico, the stock of insurance has declined as a result of that implementation from the government. Obviously, there is a lot of pressure from that perspective. Second is the economy. Consumer consumption has been very sluggish.
In the north of Mexico, where we operate with uncertainty with free trade with the U.S., obviously, we've seen a little bit less of investment than expected. As you know, this investment is formal economy. It insured people. It's good business for us. I just wanted to put that into context because despite all these headwinds, the operation has done remarkably well and has grown a lot this year. With this, I'll pass it to, I don't know, Suso, if you want to start.
Maybe Lorenzo. I was going to also start the response in the same contextual light. It's been a very difficult year for insurance companies in Mexico with around, this is not an official number, I've heard 1.5 million less policies.
because of this impact. In addition to that, of course, higher premiums, higher deductibilities, higher co-payments. It has been a very difficult last 12 months, I would say, even at the end of last year, preparing for that. And notwithstanding that, we have grown. We have grown quantitatively, clearly, and qualitatively with the relationship with insurance companies that are stressed.
They have seen that we can contain costs. We can be a great partner with them. We can actually do what we have expressed here over and over again, medical resolution, great patient experience, and of course, a great cost efficiency. So, this has been a difficult year, but we have grown. And I think that one thing stabilizes in Mexico and the insurance sector continues to grow, I think we will be growing at an even faster click as well.
Very good. Thank you. Any other comments or any questions in the room before I continue with some of the ones we have on the webcast? Parzer.
Hi, everyone.
[Foreign language]
Hi, everyone. Thanks. Thank you all for the presentation. Just focusing a little bit on the B2G projects and Trecca, it looks really even too good to be true because the CapEx is paid in alignment with the government and the volume is guaranteed to a certain degree. I was wondering what could be preventing from expanding this model.
How does this work? Does the government approach you? Do you try to approach them? How is the competition to get more of these projects going? Lastly, how is margins? Because I imagine the government must be a little bit more tricky in terms of paying and the prices that they settle. Just trying to understand what is the opportunity there.
I would just set up the response and everything in B2G is auctioned off. Very formally, officially. Even our large contract, which we have renewed, I think three times now in Monterrey, it is auctioned every year. Every year we win. We win on service, and we win on price. This year, just on the specifics of Monterrey.
Yeah
we've increased prices dramatically, and we won again. Very important. In Peru, you will see the same structure. We won Trecca many years ago on an auction. We gave the idea, and then it was auctioned off, and we won it based on our proposal.
Very importantly, these are complicated, sophisticated contracts that require a lot of work with the government side. Then have a high hurdle for other players to be able to deliver the service. So it gives us, I think, an advantage as well. I don't know if anybody wants to complement my idea.
Maybe just to complement on what Suso says, because in Peru, you can have the government that basically put for auction a project and everybody can participate. But you can also go to the government and propose your own initiative. That's the way, for example, Trecca happened, and that has a very big advantage. It still gets auctioned.
So you go to the government, say, "I have an idea. Why don't we do that?" If they like it, they will open it to the public. But you have a very big advantage, because you're the one that, in a way, is designing the process. And also in Peru, there is a distinction between whatever the government puts out there and what you can push. And in our particular case, obviously, there are several ideas that we think we can go and push to the government. Sorry, Gisele.
Yeah, and then I would complement to Artur's question about the capital allocation, the margins. You mentioned it's almost too good to be true how it's pre-funded. We do receive that question a lot, and I think it's important to clarify that the contractual framework behind these PPPs in Peru is completely self-funded, and it's completely non-recourse to Auna. So all these funds are separated automatically from the public budgets into a trust.
And it's not just our interpretation. It's also our strategic allies in the banking community that have funded this project finance entirely. And as we know, in the investment stage, you receive the certificates, and really the only thing that the banking partners have to fund is the working capital dislocations between receiving those certificates. And all of those lines of credit to fund those working capital dislocations, again, are non-recourse to Auna. I think that also shows that the entire market is very clear on the certainty of funds behind these types of structures.
There is a related question that came on the webcast, is someone mentioning that I apologize if I do not attribute the questions, but we are trying also to group the questions, so prefer to answer questions than to spend too much time on that. But someone is questioning the Peruvian government is the worst payer in terms of timing. How do we basically deal with that? It might be helpful to also explain how the project is funded into an irrevocable trust.
Yeah
from the government.
Which is.
Yeah.
Yeah. No, I think that's kind of what I was mentioning before. Those public funds go automatically into that irrevocable trust, and I think it's very clear throughout the market that these payments are guaranteed.
Yeah, I think there's a difference between a non-structured contract
Exactly
and this very structured contract that, as Lorenzo was saying at the beginning, has decades now of refinements and improvements, where we're harvesting today something that works very well in Peru.
Has the Republic of Peru name on it
and hitting very objective milestones. You get paid on construction, and on monthly, you are delivering services, you get paid on a monthly basis. You get paid, Gisele, with a certificate that says Republic of Peru, that you deliver and discount if you wish.
Very good. Other questions in the room before I continue, please?
Yes. Thank you for the presentation.
I was going to repeat the question, which I did not, so hopefully the mic. Yeah.
Okay.
Thank you.
Thank you for the presentation. I would like to ask you about this billing adjustment and all these penalties that Peru faced recently. Have these issues been resolved? You mentioned the AI and digital infrastructure. How is this planned to prevent those future bottlenecks and these kind of problems in the future?
I can answer this question.
Perfect
As I presented before, we have some initiatives around the revenue cycle management. We have different initiatives using data and AI because we need to address the process at the beginning so we can have less closes, less devolutions, and then we can have less penalties. We are working on reducing the days of our cycle, as Gisele said before. We envision that we are going to less our days of cycle, but we are going to have better quality in the process.
I want to also, again, try to put it back to everything we've shared today about value-based care.
Most of the problems one has with billing and collection is related to fee-for-service.
Yeah.
Is related to the fact that was this surgery really required? Was this additional diagnostic necessary? The insurer's going to be saying, "Why?" The doctor's saying, "Yes, I need it." Then the back and forth continuously, then I really want to question it. Again, as we move to value-based care, as we move to risk-sharing, to vertical integration, we'll see less and less of that.
Yeah.
That's very important to see where we're heading.
And specifically there, Suso, to address the point about the billing adjustments in Peru and the numbers specifically, the situation that we had in Peru is we had historically seen accounts receivable days with third-party payers, specifically insurance companies, increase. A portion of that were accounts from previous years that had not finalized their conciliation progress.
So that did generate a larger stock of old accounts, and this is something that we had already identified. That, and also in the context of insurance companies becoming much more strict, as Suso mentioned, with the medical audits and with the consolidation of accounts, is basically something that we've been talking about with the market for some time.
Everything we've been doing in revenue cycle management to make that whole process much more efficient. That's why what we're expecting this year is to clean out those old accounts. And I think what's important to note is that the new services that are originating today are originating in the new process, which is much more automated, which is much better with all the
Support
the supports of all the services that have been rendered. Therefore, you have a much healthier stock going forward. We're going to see an impact of that in accounts receivable days, as we have already seen and will continue to see.
Yeah.
As the market changes because of what we said before, the population aging, the situation of MLRs getting higher
for insurance companies, for payers that are not integrated, we are upping up our standard because there's less tolerance for insurance today. They're fighting for every little PEN now because their MLR is so high, sometimes even in Mexico because of this crisis with the VAT in Mexico, over 100%.
They're paying more than the premiums they are getting. So of course, they're very sensitive to the PEN, and that's where we come in, and that's where we can make a difference.
Very good. Let me take one of the questions that we received. Obviously, we made the announcement this morning on Colombia, and it's a specific contract. Do we think that there is a risk of other contracts to be in the same situation or not?
No. The answer is no. We have a special situation with this contract in Colombia. When we have a value-based care like this risk-sharing contract, we need to receive the information related to the population, because our technical notes are based on that. In this special case, we need to address some things with the payer. We are in this part, but we don't have risk with the other contracts that we already have.
Very good. Other questions in the room? Yes, please.
Thank you for the opportunity to get to know you and hear about your operations. There are hiccups in your growth, and I think you are managing them well. I have an observation. I do not doubt that things are moving forward, and they are going well, and they are going to be going better. Now, moving the conversation about the value of the stock. Obviously, the market does not do justice to what is here, what you have, what you are developing.
I have several observations just by me being here in Lima, Peru. I come from abroad. When I told people in the business I am going to talk to an Investor Day for Auna. "Oh, a Peruvian company?" "Well, yeah, they are from Luxembourg." "Yeah, but you are going to Peru. Why in Peru?" They report in PEN. It is complicated. It is complex. In that line, have you considered the narrative to make it a little bit more understandable for the market? I do not know, a narrative in which maybe have you considered reporting in dollars?
Of course, that has its complications. My answer to those people was, they are an international company. There is a number of companies that are based in Luxembourg that transition from Latin America. That is my question.
Maybe let me address and direction anybody else can add. I think you are absolutely right. I for myself, because I know the company so well, we were part of the founding group, and it is a complex company, but strives to the Auna Way that is a simpler model. To get there, you need to row out of general healthcare. You need to row out of many things in healthcare that happen that are anecdotal. You need to row into a process-based company. Rayet and I talk a lot about this needs to be recognized as a company that is run by processes.
Not by the next anecdote of the patient or the clinician or the nurse group. That is very important. More and more, we look at each other as standardize. I myself am an industrial engineer, so for me, it seems natural, but it is challenging. I can see the momentum we are gaining. I can see the progress we are establishing.
But no doubt, we still have a long way to go. In addition to that, I would say that I was really impacted this morning because someone came in, and she already left, and she told me, "My mother had an incredible experience. You guys saved her life," all this. Then she said, "I am so proud it is a Peruvian company." I was in Colombia two weeks ago.
Nice.
I walked in Barranquilla in the lobby, and someone approached me. I could say almost the same story. "I am so proud it is a Colombian company." In Mexico, the same thing will happen. We are not a Luxembourg company. We are a local company with a lot of local sensitivity about what we do there in front of the patient, and that makes a huge difference. I think for the market, we need to definitely focus on few concepts.
Access, vertical integration, and scale. We just need to focus on delivering on those. Of course, EBITDA margins and EBITDA growth, but those will deliver the big leverage of growth in the company. Given access, because I have tried to explain today, the market out there is huge. It is not a little bit, it is huge. When I see some of these numbers of growth, I am too ambitious sometimes with the team. Always I am not satisfied. But you see some of the or in oncology, you saw 100% numbers.
Yeah
in Mexico. Those are the right numbers because those strategies of take all in high complexity actually can be delivered. The rest of general healthcare grows 10%-20% per year, not more than that. But as we capture high complexity, we need to deliver a high complexity, we need to deliver on that scale and high complexity, and that will definitely simplify our operations, our strategy, and of course, the understanding of the company by investors.
When are we reporting in dollars?
When? I think Suso answered it well.
I've been asking for that as well.
It is, and I think it is something we underestimated when we became public, is that the complexity of the story for people, we understand it very well. But it is a different story in each of the countries. That is very difficult for investors to really see the nuances in each of the countries. An event like today that we decided to do this year is precisely to try to be a little bit more transparent, try to provide more information to the market. We have taken steps to try to improve the liquidity of the stock and so on. It is going to take time, but there are a lot of things that are being done to try to improve that.
But as Suso mentioned, I think in terms of making sure that we focus on the right messages, investors can see different milestones and see how we are making progress on those milestones, it is something that we need to improve on. There was some questions on the back.
Hello. Thank you for the presentations. I see you showed in the beginning that dividends are going to be distributed in the next 2, 3 years. If this is the case, what will be the analysis to do that instead of delivering the balance or investing for the role?
I can maybe just put in context to
Because I think what I did mention, I am the one that mentioned that, is that dividends, share buybacks, it is a question that we get a lot from investors. We are not ready right now. When you look at how we need to spend capital, at the end, as you say, the deleveraging is our priority.
But we are starting to see the light at the end of the tunnel. We think that 2027, 2028, it is something that obviously will need to be approved by the board, but it is always going to be a conversation on where do we spend the cash that we have in the most efficient way.
I think what we said is, when we are getting there, and probably 2027 and 2028, you are going to start some of that money going back to shareholders. I just want to make sure I clarify a little bit that comment. Suso or Gisele, anything else?
Yeah, I think the response is, we have had the discussion at the board.
And we will continue to have it. It is in our mind as one additional element that helps us solve the undervaluation of the company. I do not want to give a date on it, as like Lorenzo's response, but I want to make sure that it is on the agenda. As repurchases, dividends, and of course, deleveraging growth, the clear agendas that we have in the radar to act on in the next couple of years to deliver full value to shareholders.
Next, any other question? There was another question in the room, please.
Hello. Thank you for the conference and the panels. They were great. I think the growth story and the corporate strategy is pretty clear, and so is the opportunity in Auna given the discounted multiples. But I think the market's main focus today is the balance sheet. With that in mind, could you walk us through the free cash flow bridge towards the end of this year, given the flattish EBITDA and the maintained CapEx at 4% of sales? That is one question. Could you also give us the free cash flow bridge to reach the 3x net leverage for the long term, please?
Yeah, of course. I think we talked a little bit about on the cash flow side, both of our cash conversion metrics. When we talked about 95% of adjusted EBITDA converting into operating cash flow this year, and complemented that also with the fact that for the past 12 months and really the last 18 months, we have been able to generate solid free cash flow after interest payments. These are both of the levers that are basically taking us to the path that we need in order for that leverage reduction to continue to occur.
When we talk about EBITDA growth, I think it's important to note what I mentioned as to the points that we have to recover from the impacts that we've had this year, which are the specific one-offs in billing in Peru and the specific risk-sharing contract in Colombia, which will position us for EBITDA growth next year.
That EBITDA growth will, again, as I mentioned, convert to cash at those over 90% levels. The fact that we're now being able to cover not only 100% of our interest payments with free cash flow, but also leave extra cash in order to continue deleveraging, I think is a clear path to get to that 3x net debt to EBITDA in the medium term and in those time frames that Lorenzo shared in his presentation.
Very good. There is another question on Trecca. You mentioned the PEN 120 million revenues by 2030 that represents the minimum flow guaranteed by the government. Could you give some color on what occupancy level this would represent now? The way that the concession agreement has been set up is there is a minimum guarantee by the government, but there is also a ramp-up phase.
That ramp-up phase relates to the appointments are still going to come from EsSalud. They're managing, they get appointments from people, and they send that to us. There is a ramp-up phase. That's why the number that we gave you, it's about 2030. Before that, there will be some ramp-up. The minimum guarantee is around between 50% and 60% of the total demand.
Obviously, we cannot provide you guidance on what we gave you is what we know is guaranteed. Whether people come to the Torre Trecca or Centro Ambulatorio Trecca or not, we get paid for that. But as Vicente and others mentioned during the panel, the lack of infrastructure and the potential to basically fill out Centro Ambulatorio Trecca, our base case is definitely going to be there. It's not a matter of if it's going to be there, it's a matter of how quickly it's going to get there.
Because there are so many appointments that today cannot be fulfilled by EsSalud that we think it's a good opportunity. But we don't want to provide better guidance or different guidance because at this point, there's still a little bit of time to go for that. Any other questions in the room? I'm being told that we're late, but-
Thanks for the presentation. Regarding this one-off in Colombia, is it fair to say that all the impact will be seen this year, or there is any chance that maybe in the first or second quarter there will be some additional impact?
As I was noting earlier, we've had this setback, and Rayet elaborated with a specific contract, right? In the case of Colombia, in one of our risk-sharing contracts. We're currently assessing basically to be able to give more color as far as specific financial impacts and when we will see EBITDA returning to growth, specifically in the case of Colombia, and we will be addressing those quantifications on our third quarter earnings call.
Mm-hmm. Very good.
Yeah.
I'll take another few questions because the lunch is ready, and we don't want you guys to have a cold lunch. We didn't talk today about Auna Seguros in Mexico, and there is a question on how we're doing and how we're thinking about Auna Seguros in Mexico.
Auna Seguros, which has this profitable and
dominant market share in dental and vision is our platform for growth in our oncology plans. We are making good progress in B2B plans. It is encouraging that we had a lot of conversations. The momentum is slower than what we would want, I would say. But definitely, there are a lot of requests for us to grow that plan and take some risk off, be it employers or be it insurance companies.
I think it has been a difficult year for Auna Seguros as well on the dental and insurance side because of the value-added tax as well, the whole contraction of the system. But we see ourselves very well-positioned for growth with this product, of vertical integration, value-based care in Mexico. I do not know, Vicente, you want to add something on Auna Seguros in Mexico?
Just that like Suso said, aside from the VAT issue, that has put some pressure on the business and growth of the business, really. The business is going well. Our oncology products are being placed. There is a lot of interest in the market, both from customers and brokers. We are working on making that higher rate of growth. We think it can grow faster, and we are developing plans and taking action to make sure that happens.
Very good. There are a couple of questions that ask the same thing, and it is similar to a question that was just asked with regards to the contract in Colombia. That contract, as Rayet mentioned, has been suspended at this point.
Yeah
and there are negotiations, obviously, with the payer now, and there are several questions on whether the contract is continuing or not. I just want to make clear that it has been suspended at this point.
Very good. I think we are done with the Q&A because we are already very late. We will leave a few quick minutes for Suso
Suso
to just give some closing remarks.
Great.
And we will talk about the next steps for the people that are here in Lima.
Great. So that it is easier, let me just finish here. I wanted to make sure that the audience takes these key messages. Auna is about access in a huge market of unmet demand. Our model is very unique. It captures all in due time of scaled vertical integration and a model that is sustainable because we have the patient in the center.
All the providers or services aligned with what must be delivered. And of course, financial returns, which feeds all our growth. I think those are the three key elements that one needs to take home when one thinks about Auna. This is a market that is being dislocated. I think Rayet made a good presentation on AI. It has been this primary care and low-value care is being dislocated by AI.
by robotics. And we are playing that game. That is going to be a low-value game. And we are very well-positioned and dominant and becoming more dominant in high-complexity care in which we want to scale.
Yeah.
I think those are the messages. I think everybody concludes the stock is undervalued. This is a great opportunity to get the market to recognize its value, and we are on it. It is not only about delivering growth, it is not only about delivering predictability, it is also delivering a broader range of investors, more coverage. It is all about making sure that we have the dividends in mind. We have the repurchase in mind. We will deliver to investors as well.
Very good. So, with this, we are going to conclude the webcast. Just before we close it, if I can ask people here, it says that the survey is optional. Actually, it is not optional. We would really appreciate if you can fill it out. It will take five minutes, but it is extremely good feedback for us to be able to improve this event and obviously improve what we are doing at Auna. So with this, we want to thank all the people that connected to the webcast. And for the people that are staying, that are here in Lima, we are going to go to the second floor or two floors up to have lunch.
For the people that are coming to do the tour to Clínica Delgado and the Centro de Bienestar at 1:20, we are going to meet in the lobby, and there will be a bus to take us to make the tour.
Lorenzo, I just want to finish off by thanking you and thanking your team. We know this is a lot of work, and we really appreciate the work that you have done delivering it. Thank you very much.
Thank you. Very good. You two. Thank you.