Rede D'Or São Luiz S.A. (RDOR3) Q4 FY2025 Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the earnings call of the fourth quarter of 2025 of Rede D'Or. We have Mr. Paulo Moll, President; Rodrigo Gavina, CEO of Hospitals; Raquel Reis, CEO of Healthcare and Dental of SulAmérica; and Otavio Lazcano, Financial VP and Investor Relations VP. We're going to start, and it should take about 1 hour. The information will be recorded in the website of IR of the company. After the presentation, we're going to start with the Q&A. So we'd like to tell you that any forward-looking statements that are done during the earnings call about the business perspectives of Rede D'Or projections, operational goals are based on beliefs and premises of the Board of Directors based on information that is currently available. Forward-looking statements are not guarantees of performance. Investors should understand that general economic conditions, industry conditions and other operational factors can affect the performance of the company, and they might be different from the forward-looking statements. I'd like to give the floor to Mr. Paulo Moll. He will start the earnings call. The floor is yours.

Thank you. Good morning, everyone. So let me start talking about 2025, the year of record results in several dimensions. And here, we see the consistent execution and a balanced growth with the quality. Today, Rede D'Or, we operate with a platform that is integrated for health care with hospitals, health care, oncology, all the coordination of care that we do. This integration is the one that sustains the quality of the results that we're going to present. The model shows solidity, high-quality assets and also the quality of our team. With this, let me show you the main numbers. The gross consolidated income, BRL 60.4 billion, a growth and EBITDA consolidated of 10.4%, which is a growth of 23%. If we consider the broad EBITDA with the connected assets, we're going to get to BRL 11.9 billion, a growth year-on-year and the net revenue, a growth of 27%. Also, I'd like to highlight the robust cash generation of the company that allowed us to do profit sharing, very important for the shareholders, BRL 1.75 billion interest of our capital, another BRL 5 billion in dividends, keeping up with the investment standards and still keeping leverage. The company leveraged for a reduction of 1.82x comparing to the beginning of the year. So this is the quality that we've been having the cash generation and also keeping our discipline of capital allocation. Hospitals, a solid demand, very healthy. A level of day patients, patient day volume, getting to BRL 3 million, occupancy of 79%. It's equal to our records. We have over 500,000 surgeries, a growth of 14%, 570,000. And we've got to 19% of growth in the surgeries in this quarter. This is a growth that has increased the occupancy of our beds and bringing complexity to our mix. We are also advancing in productivity. I was looking at the bed utilization, surgical center, more centardization on the processes, and we see that quarter-on-quarter, we can evolve. We're very optimistic. Oncology. We got to 11% in the invoicing of the hospitals compared to 10.2%. So this is relevant. This is a growth in the volume of infusions growth of 10% and also in the complexity growing 11%. I'd like to highlight that this is the biggest differential, which is the biggest integrated oncology networks to the hospital, which is our differential for ourselves, for patients and for the physicians. In SulAmerica, the beneficiary base, a growth of 11.3%, BRL 5.9 million. The administrative expenses, we have -- the consolidated loss ratio indicator of 79%. It's a consistent trajectory of improvement of the efficiency. Rafael will go into the details of SulAmerica, but also highlighting in a very broad way, we are evolving more and more in the coordination of care, the clinical protocols, the efficiency, the integration with the network and also Rede D'Or itself. Looking at the quality that we're providing for the patient and keeping up with the economic sustainability. We are very well received by our patients, our clients, and this is a growth in the number of lives, reflected on the growth of number of lives. Now a point specifically about the fourth quarter that really caught my attention, and I've seen a few reports I'd like to make it clear. We have BRL 89 million in our expenses that are changes of criteria in our provisions. We decided to do a provision that is more conservative. Those BRL 80 million are coming up from the changes, not of the process of the fourth quarter, but regarding the record. So we can see that the -- this is a one-off impact. We also have the expenses, BRL 22 million in the fourth quarter of the incentive laws. Of course, we have deductibility and compensation and the taxes, but comparison quarter-on-quarter, that can show a growth, but there is a compensation with the taxes. This is for SulAmerica and Rede D'Or. We also have an impact. We have an impact throughout the year and on the fourth quarter of a few legal expenses because of legal issues. We are discussing for the next quarters that we're going to -- well, to avoid to have a difficulty in the comparison of the evolution of the expenses, we're going to have this line debiting the benefit that we have of winning that legal case and that will make it more clear for everyone that follows our numbers. Now discussing expansion. We have today 13,555 total beds, a growth of 501 number of beds in the year, 10,351 operational beds, robust pipeline, as you know, most of them are brownfields with the organic expansion for the next years. In [ Atlanticador ], we have the expansion that is important, low risk of execution. We have 6 assets in operation. We have new projects in development. We will follow our investments with an overview of discipline focus choosing what is strategic and what has adequate returns. Also, our capital structure is very solid. A average debt, the cost of CDI was plus 2.1%, an average of 6 years, robust cash composition and also keeping up with our priority of investment with intelligence preserving the solidity and surety of the company and the value creation long term. We are very excited in efficiency and innovation. We have a big agenda ahead. We have benefits that we are foreseeing month-on-month of better automation of the cycle of the revenue, robotization of the processes and also a lot of use of artificial intelligence in assistance, supporting the physicians, something that we will support, and we will bring more quality to the assistance given to the patients and allowing for less bureaucracy supported by AI and automation. And in SulAmerica also regulation and combat of fraud. Now I'd like to state a very important -- a very important point. We are at the end of February, and we started the year in a very strong way in both operations. So -- even though we are discussing February, we still are -- we still have Carnival. We have a few days post Carnival, but we see Rede D'Or with a growth that is important. We added 116 operational beds, and there is a project in February SulAmerica, keeping the trend of reduction of the claims when we compare January of '26 with '25. But last but not least, we are trusting in our growth and the growth of the health care area in Brazil. We will continue to be leaders. with the scalability that we have with our team, with our -- everyone that works with us, the physicians in our purpose of always trying to get the best of medicine for more Brazilians and more markets. Now I'll give the floor to Raquel.

Thank you, Paolo. Good morning, everyone, 2025 was for SulAmerica a year of execution. And I'd like to thank the team that makes the wheel turn with a lot of discipline and welcoming our beneficiaries. We have to thank all the partners. This is a result of this ecosystem. Paulo mentioned, but it's worth reinforcing 2025, there is a growth of a lot of quality, 250,000 lives added to our portfolio and 350,000. So the beneficiaries. And this is a portfolio that is ever more sustainable and adequate to different profiles of clients, always preserving something that is nonnegotiable. And you hear us repeating this every call, quality of service provided and discipline in the pricing. We've had a cycle of improvement of profitability. We got 79.5%, the consolidated loss ratio and also the performance of the quarter that is 4 points below '24. Another point that we should highlight is that we are advancing in the agenda, structural agenda of this sector. What does this mean? Continue to be firm in fighting abuses and frauds, defending the rational use of resources, incorporation of technology, new technologies, medications and focusing on the client. This is something that we mentioned to the team, always looking -- working with empathy and people depend on us on their most difficult times. So we closed the year in a more efficient way and with more strategic surety. For '26, there is no change in the guidelines. We continue with the same agenda of growth and profitability and balancing that. We know the challenges of the sector, but we are aware and we are sure of our model and the consistency of our execution. I will give the floor to Davina.

Good morning, everyone. not going to repeat, but I need to also do a thank you -- to thank you for the team in 2025, the effort of everyone, physicians, patients that trust us, our investors, providers and the reps in our pain, we improve and make our patients feel safer and with a better quality of assistance. The highlights on our volumes were already mentioned. So it's important to mention that we increased our volume of patients regardless of growing the number of beds, we had more patient days quarter-on-quarter, a growth of 7%. And we grew the volume of surgeries as well quarter-on-quarter, almost 20% -- we've done 570,000 surgeries in 2025. We also grew in complex surgeries, which contributes in a few lines, not only at the top line, but also contributes in a few lines of cost because surgeries are more complex, more intensive utilization of resources, BRL 5 billion of growth, 13.4% facing in '24, a growth -- an average growth of ticket in a growth of the patient base in 5%. So we have graphically the records of the evolution of the average ticket for the segment. Page 8, same information. For oncology, starting with the information on the left, the fourth quarter of '25 we have a gross revenue for this segment of BRL 1.05 billion, growth of 26% in the fourth quarter of '24, an average -- an increase of 22% and a growth of infusion that is seen in the slide. So there is a decrease facing the previous quarter because of the seasonality and the reduction in the number of infusions. In the center of the page, we had the gross revenue for this BRL 3.9 billion, a growth of 22%, an increase in the average ticket of 10.8%, a growth in the infusions 10.4%. The graph on your right, we have graphically the evolution of the average ticket of oncology. Let's go to the next Page 9. Cost and expenses, hospital services. On your left, we have the cost with the hospital services, BRL 6.3 billion in the fourth quarter of '25, a growth of 13.7% in the comparison year-on-year, a growth of 3% in the quarterly comparison. Center on the page, we have the cost for the hospital services in '25 of BRL 24.4 billion, a growth of 13.2%, facing the FY of the previous year. On your right, the general administrative expenses, BRL 350 million fourth quarter of '25. We had events nonrecurrent, all of them positive fourth quarter of '24 in the third quarter of '25 and the fourth quarter of '25. When adjusted for the nonrecurrent events, this line is absolutely stable, 13.5%. Last but not least, on your right, 2025, we have the general and administrative expenses of BRL 1.2 billion, a growth of 6.6% facing the FY -- previous FY. Let's go to Page 10, EBITDA and net income. Once again, the Hospital Services segment. On your left, we have an EBITDA of BRL 2.89 billion in the fourth quarter of '25, a growth of 36.3% in the annual comparison, a decrease of 10.1% in the quarterly comparison, the EBITDA margin, 25%. Center on the page here, the EBITDA for the segment was BRL 8.142 billion, a growth of 13.6% a margin EBITDA of 25.9%. On your right, we have the net consolidated income, which in the fourth quarter was BRL 1.277 billion, a growth of 39% in the annual comparison. Now the adjusted net income for the amortization of the portfolios of SulAmerica because of the acquisition of the company in '22 was BRL 1.277 billion. I apologize. In the past -- the previous summer was BRL 1.224 billion. So on your right, the net income adjusted was BRL 4.27 billion, BRL 538 billion, respectively, for the FY of '25, a growth of over 20% facing the previous FY. Page 11, data of the SulAmerica companies, starting with the graph in the beginning on the left, in the fourth quarter of '25, we have net revenue of BRL 8.55 billion, a growth of 8.3% in the comparison annual. In the FY '25, the net income was BRL 33.168 billion, a growth of 10.5% facing '24. Clockwise, on your right, we have the consolidated loss ratio was BRL 75 million and a decrease of 4.4%. The consolidated loss ratio of 79% in '25, there is a decrease of 3 percentage points. Still on your right, below health and dental beneficiaries, BRL 5,904,00 and the comparison stable, a growth of 11.3% annual comparison growth. On the left below, the company has an adjusted EBITDA of BRL 1.057 billion, a growth of 45.6% in the annual comparison. In the year, the EBITDA adjusted for the SulAmerica companies was BRL 3.797 billion, a growth of 65%. The consolidated EBITDA of the company was BRL 10.447 billion. The adjusted EBITDA consolidated was BRL 11.492 billion. Next page, indebtedness. On the left top, the company has the consolidated cash position of BRL 42 billion. The net with the technical reserves, BRL 23 billion, the gross debt -- the net debt is BRL 21 billion, the net debt over EBITDA 1.82x. If we insert in the calculation, the technical provisions just for insurance, we get to the net debt over EBITDA of 1.26x. Center of the page, we have the evolution of the average cost of debt, 6 years, third-party is controlled, CDI plus 1.1%. We have all of our assets free of any type of collateral credit -- this company doesn't have covenants in that sense. On the right, we have the debt amortization schedule, BRL 23.7 billion and the scheduled amortization. The cash is enough to pay anything until 2030, including the cash generation of the company is stable. Last page before the Q&A. Page 13, managerial cash flow. Let's do the reconciliation of the managerial cash flow, always starting in the left information and moving towards the right, an EBITDA that is reported in BRL 10.4 billion. Sequence delta cash flow -- we have Rede D'Or with a working capital negative, which is aligned with the nature of the segment. SulAmerica, Healthcare. Other point, a cash flow that is positive BRL 1.3 billion. Thereafter, we have other items of the balance sheet that are negative BRL 714 million. We have contingencies, judicial deposits, advances, the cash of SH as the company is alienated and the gains of the alienation of TSH. Moving to the right, we have leasing BRL 800 million. Thereafter, the payment of taxes, BRL 1.4 billion. We have Cash flow stemming from the financial activities of the company, negative BRL 230 million. Here, we have investments of BRL 13 billion in 2025, amortizations, BRL 5.3 billion. The management of liabilities that was to increase the horizon and keep the liquidity, payment of the interest of our capital, BRL 6.1 billion -- BRL 6.5 billion, expenses of BRL 1.2 billion and repurchasing of shares, BRL 390 million. Thereafter, we have cash flow stemming from investment, negative BRL 2.5 billion. Here, we have investments in greenfields, brownfields, BRL 1.97 billion and the small expansions, BRL 585 million, investments in IT investment in maintenance, BRL 577 million. And we also have positive BRL 570 million with the M&A. Here, we have the migration of the Campinas hospital with the joint venture of Bradesco Sure. We have the door consultancy closing in BRL 71 million and GSH, which is BRL 305 million. So we have a cash variation of BRL 5.3 million. Once we deducted the technical provisions of the -- we have the cash variation of 2025 of positive BRL 1.8 billion. So I finish here, and I open the space for the Q&A.

[Operator Instructions] First question from BTG Pactual.

Two questions. First, in regards to commercial expenses. It's clear in the speech of Paulo of a few effects that were including the line of other operational expenses, we see the increase of the commercial expenses of SulAmerica. I wanted to understand the recurrent level. Was there a commercial campaign more concentrated in the fourth quarter so we can see the recurrence of this line. The third question is the margin of hospitals. The company had a growth of topline that is very strong in the fourth quarter in the second quarter of '25, but the number of the year wasn't -- there wasn't a lot of expansion of margin. So I wanted to get your diagnosis. Is there any extemporaneous factor that pollutes this margin for the hospital services?

Thank you for the question. I think that here, we have 2 factors. We have BRL 22 billion of expenses with the investment in the campaign of 130 years of SulAmerica. Besides that, we have very good sales with retail -- and there is a capture of the business, and that brings a little bit of pressure in DC. So nothing different. So, about the margin of hospital. We see a space for improvement. Of course, when you see the consolidated is a sum of parts. And we have a certain adjustment of profile. Of course, we see the lines of costs a few subcontracting that are more efficient, some expenses. We always have that opportunity, but maybe we have to look at the big picture. We grew a lot with the surgical profile. that helps us with the ticket. We had a good performance of the ticket. It helps us with the top line. And because of utilization of materials and usage for this service, we have a few impacts on that margin. So in the whole, we have the nominal EBITDA, we have the behavior with the nominal EBITDA where they were a bit below for the margin that we projected for the year, but they delivered the nominal EBITDA. And at the end of the day, this is delivery. It doesn't mean that there is a space for seeing the dilution of cost opportunities. But for a change of profile of mix, we can -- if we can reach through a higher top line with a more pressured margin, then this is not bringing a lot of concerns for us. But we are looking for the several ramp-ups of several hospitals in the brownfields. We have the hospitals that are maturing. And this is what we are seeking for 2025. But for 2026. But 2025 is the explanation of the behavior.

Next question is [indiscernible] from Citibank.

Two questions as well. And SulAmerica, what is the strategy of passing on the price and the growth of ticket? We saw in the fourth quarter, cost per life very controlled and the ticket is accelerating. You commented that at the beginning of the year, that consolidated loss ratio is well balanced. So is there a continuity of this movement? Maybe the sectors are a bit different. If you can discuss this, it would be the first point. And the second one, another follow-up with the initial comments -- you've seen the hospitals starting the year in a consistent way. I also wanted to get an update how you're seeing the occupancy rate and how it changed the -- in the third quarter, does it keep it kept with the data at the end?

Rael, thank you for the question. So let's talk about the growth of ticket. This is a great point, so we can make our position very clear. The position is being discussed in all the quarters. SulAmerica doesn't have a specific focus in maturating the average ticket. So we -- on the opposite, we are fighting to present this even a reduction of the readjustments in the portfolios of retail and the entrepreneurial ones. This readjustment is a combination of everything that we are paying for the claims and what we get paid. And we have the conviction that the more assertive that we are in this balance, the better we can be with the growth of the base. Now to give you a few numbers, give you some color. In 2023, if you remember, we launched the modular reimbursement strategy. So these are different reimbursements for different products where we look at the base of the pyramid, where we have the reimbursement just for the emergency, then if there is elective appointments and then we get to physicians on our area and then the top of the pyramid that has everything, therapies, exams, et cetera. So this is one of the strategies that is very well assertive for the control. And now we have the position in December, 825,000 lives in this modular reimbursement model. Everything that we sell in the wholesale -- in the retail gets in here a great deal of what we sell in the entrepreneurial is here. And in the renegotiations of adjustments, we are always seeking when there is a bigger readjustment, we always try to get possibilities that lead to a lower readjustment and even the exchange of the products. And then there is a co-participation that I've been discussing for many, many years, and I believe that this is the most important tool to make the beneficiary aware of the correct utilization of the health care plan. Now talking about the sales, 40% of what we sell for small- and medium-sized companies, 50% what we sell with the companies of 3200 lives, 85% of what we sell and 100% of what is sold in the adherence gets in with the corporate. So when we combine this in a few exclusive products, we get to the growth of the ticket that is lower. Second one, about the hospitals. We started very well with the year in volume and ticket. That's the optimism in regards to this first quarter, we can talk about January, February, but we've had good dynamics in the volume of ticket comparing to the first quarter of last year.

Next question, Gustavo Miele, Goldman Sachs.

I wanted to do 2 follow-ups. First, I wanted to go back to the margin discussion. So the medical materials of hospitals, you make it very clear that the biggest penetration of oncology in the business is naturally the one that weighs down on this line. But when we try to get some sensitivity and take out the oncological [indiscernible] looking at the state of the sector to see what is the medical materials cost of hospital and not just oncology, we seem to see a small impression year-on-year. So I wanted to understand if this is correct? And is there any point in the medical materials of the hospital that you've seen as an offender a more acid readjustment and effect of mix. If you can discuss this, it would be nice. That's the first question. And the second one, and doing a follow-up, what Paolo commented, trying to understand the dynamic of the ticket. And it calls your attention because in the fourth quarter, you have a lower exposure of price readjustment. So we wanted to understand if this is the impact of the surgeries growing 20% year-on-year or maybe there is a carryover of readjustments that you've done through the third quarter that wasn't perceived in the third quarter, but in the fourth quarter, they will appear in a more significant way. So these are the 2 points.

So this is connected to my answer for Samuel. Of course, the higher weight on consolidated is oncology and the other infusions, non-oncologic. Of course, the cost of medications in that revenue is double of the cost that these hospitals have as a whole. So when you exclude and you have a substantial reduction, you have a growth in the hospitals. So this is not because of the negotiation of price. We had a good performance scalability, new products, all the actions have worked very well. We're very happy with the result of the work of this team, but there is a difference on the mix. A few hospitals, when we aggregate it, you have more surgeries, more complex surgeries. And in a few hospitals, there is high complexity surgeries and also a few strategies of a few excellence centers that we assembled. We are happy because it helps the top line of the hospital and the ticket. So a few hospitals and the company growing as a whole with the ticket in a more accelerated way and a few points with the readjustments that we get of the mix we have an aggregated way in 2025, especially in a few hospitals where we have the high complexity surgeries that have an important weight, the hospitals with the top line and having more pressure, but something that is under control and is not bringing any concern for us.

Next question, Vinicius Sig.

Now I wanted to get a follow-up with the question of Leandro. It's very clear the answer of Rael with the products of corp modular reimbursement. But what I wanted to hear from you is the product -- the mix of products. When we look at the most sold of ANS, we've seen the industry, and I'm not even discussing SulAmerica, the one that has advanced a lot in regards to the network and within Firm and even taking -- working with SulAmerica, something that we can suppose that through the last quarters, even though you're showing a strong growth in the special plan, and other plans in a more premium segment, it's called Direto Nacional. It's gaining some representative even Dirat Nacional is a big part of the gross adds. So I wanted to understand how do you perceive this competitive environment for this specific product? How do you add the value? I understand that it has a smaller ticket, but how does it add value to the consolidated loss ratio? Another point that I wanted to take in regards to contingency. Paulo commented in regards to the one-off. I understand that there is a part that in the third quarter, it was a bit higher and you start to be more conservative with the judicialization. But I wanted to understand the nature of the fourth quarter of having this contingency, which was stronger. Is it just this part of judicialization? Or is there any other nature that we should take into consideration?

So let me start by the first. First, what we've seen in selling over the last years, we went back to the origins. So we are focusing more and more in products in the middle of the pyramid and up. So these are about 62% of everything that we sell. As I told you, all the products are going through a retrofit negotiation with providers with adjustments in the reimbursement layer when we talk about the executive plan, prestige, the part of the reimbursement is relevant. So it's a combination of everything. But the concentration of what is being sold, in fact, is connected to these products. [indiscernible] is an evolution of the previous evolutions of [indiscernible] in 2020 with 2019 with the generation of the products, regional products, we've learned a lot through time and Giraernacional is completely retrofitted with a renegotiation complete of the service providers that are part. So we are offering a product with a reduced network, but these products are seen as products that are profitable for us, the ones that are based on the pyramid. So I see a few actions that are more aggressive, so to speak, of a competitor or others in customer, but I don't see a structural change in the competitive environment that we've observed in comparison to last year. Now in regards to your second question, this is a change of practice. We want to register the provisions before we provisioned when we get to the insurance. Now we provision at the moment that we know of the existence of a judicial complaint. So basically is a change of accounting practice. Just to make it clear, the answer. What happened in the fourth quarter -- well, in the third quarter, that should have been that practice more conservative practice. In the fourth quarter, was there a change in regards to the third? Well, we implemented this practice in the fourth quarter. So when you look at year-on-year, you see a variation of BRL 80 million, BRL 1 million in 2025. When you look at the fourth quarter of '25 against the fourth quarter of '24, you see the same variation. A great deal of the variation is because of this new practice in the fourth quarter. -- so it's a change of practice.

Our next question comes from Joseph Giordano from JPMorgan.

So the first one, we shouldn't look for the maximization of ticket, but with the growth of profitability. So we've seen the best numbers over the last 10 years. So I wanted to understand if there is more appetite with the consolidated loss ratio a little bit lower, a counterpart of increase in number of lives, and this would contribute in a more healthy way. So going back to the point of the provision, given this change of being more conservative in the provisions, given that we cannot see the reversion in a more relevant way. We have the bus, but probably we're going to have a bonus of more -- so what should we think about -- what is recurring in this line? And this is a one-off. So what should be the net of the reversals and additions and if the [indiscernible]

So thank you for the question. It's a very fine adjustment. So we have to highlight that we are very concerned with the current consolidated loss ratio that we are presenting. And this is from new products, but this is from the new organism that we've had of using a few synergies and the bargaining power -- even though we are comfortable with the consolidated loss ratio with the team, we have a goal of increasing the base and reducing the consolidated loss ratio. In the day-to-day, we do this calibration in a very specific way. So there is a certain region that we see per capita where there is a profile where we can get products with more adherence. Can we invest here? Well, it might make sense. And in that region, we might have a higher consolidated loss ratio for entry. The same logic when you want to get a certain brand, specifically when you discuss big clients. This is a point that we are adjusting day-to-day. These meetings are not weekly. We have a war room. So we can always find a maintenance in that balance. So second question, the fourth quarter is good so you can project the behavior of this line in the future of the company. BRL 90 million specific of the fourth quarter, BRL 6.5 million.

Next question, Gustavo Tiseo, Bank of America.

So we have 2. We're going to do a follow-up of what was discussed more of medical materials. Paulo made it clear the specificities, oncology, but I wanted to understand the recurrence that higher complexity comes with a lower margin, and this is recurring? Or was that something specific that we couldn't see -- so what is the high complexity of why and what we expect from now on? And the second point in SulAmérica, when you look at the technical provisions, it's decelerating, and we use it as a proxy of the PO. And this quarter was BRL 130 million versus the BRL 300 million, BRL 400 million in the previous quarter. So we want to understand is, do we see a cycle inversion? Does it make sense to work with a PO that is closer to what the market works with or the lower level because you've done done your purchase and the ticket was lower. But I wanted to understand how factual it is to drag down an improvement given the seasonality of that consolidated loss ratio.

So talking about this, let's try to be more clear. If we, in the next quarters have the same type of mix, we have an expectation of reduction of our expenses of our revenue because this is what we've managed. We can grow more the top line than what we readjust of the price of the medical materials. So this is what happened in 2025 that even though we had that stability, we had a change of mix. When you have that change of mix, you can have an increase. But all the hospitals that we have the change of mix and it's more of a loaded, there is a compensation with the ticket ongoing. So if there is a mix that is more complex, we can have a more loaded expenses but you're going to have a growth of top line that when you look at your nominal EBITDA is going to be better. So this is not a point of concern. We have the same dynamic of efficiency of procurement and the improved mix, the gain in the top line is better than a point that will hurt you in the revenue. So about the technical provisions, we don't have any change in criteria. So nothing that you can consider of dragging down the number that was seen in the fourth quarter. On the contrary, we reinforce that the maintenance being conservative is strong, but when you use the -- being conservative in the constitution of the reserves. The same thing that we've done since the inception of the second quarter of 2023. And this reduction was due to the seasonality. So now we see a seasonality that was close to what we see to the pandemic.

So now the question from Eduardo Re from UBS.

Two questions on our side as well. The first one would be about the volume of surgeries that was very strong in the fourth quarter. And following the third quarter, there was very high. If you can comment the main drivers, will it be more elective procedures? Is there a new trend in prevention, diagnosis? That would be the first question. Second question, I wanted to get an update in the pipeline of projects. We had 3 brownfields for the mobilization of total beds of the company.

So if you can comment which one of these assets are operational and can contribute to the increase of beds for the beginning of the year. And for the other ones, the expectation is to start the operation in the first quarter in the third quarter, that would be all. Thank you for the question. That issue of the surgical mix is an interesting question because it goes through several aspects of action that we have in the company. We have surgeries that are more complex. surgeries, let me give you an example. The volume of transplant that has been growing year-on-year. even lung and heart, this is just one of the examples. But what it brings is not just a transplant. These are liver complexes that are more complex, surgeries that in the past had some technical difficulties and great with our roll part, the training of the teams, we've gotten -- well, stemming from a medical relationship project that is very robust. So we work every day to understand what our physicians need, what is the format and the need so that they can bring not only volume but quality and safety for the patient. So the physician feels safe to use to realize very complex procedures in our installations. The teams are ready, and this stems from all this. About the hospitals, the contribution is very small in the first quarter, very discrete, and it starts to decelerate... And we can start to have a ramp-up of these beds and an impact that is more relevant.

Next question, Artur Alves, Morgan Stanley.

Two questions on our side. First, thinking about seasonality. As you move towards a mix of surgeries that is more relevant, should we think about a variability of results of the quarters that is higher given that the elective surgeries are delayed in the fourth quarter, even though we should see higher volume in the third quarter, so we should have a higher margin from now on. So a dynamic that is a fourth quarter that is weaker as you grow in this trend of improving the positions of surgery. So second point is the risks, regulatory risks. We see that the regulatory agency is a bit quiet, but in the election year, the Congress is very active. Have you mapped anything? So the seasonality -- we are doing more surgeries, but we -- until now, we don't see a reason that we should have a change of profile of contribution of every result. Year-on-year, you have small variations. We have a few events that impact and eventually a few issues of volume of emergency.

So everything is impacted, but the increase of volume of surgery, highlighting the fourth quarter, which is more -- which is weaker, it was very strong for elective surgeries. And we see in the first quarter, the Well, I like it, but it's not a contribution for the different quarters in this result. As the regulatory issues, nothing that we have to add.

Next question, Caio Moscardini, Santander.

Two on my side. Operational beds what do you think about ramp-up of operational beds? 500, 600 beds does it make sense? And the second point about the working capital cycle, days of receiving improving quarter-on-quarter, but the stocks have worsened and the average deadline has deteriorated. So I wanted to understand this dynamic. What should we expect from now on?

Operational beds, we -- our objective, I don't want to give any commitment. But of course, we're going to seek try to deliver an operational -- growth of operational beds even higher than 2025 due to the ramp-up that is very important that we have of several hospitals, many of them that have contributed to our growth in operational beds in 2025, but we hope that they improve in 2026. So due to other hospitals such as the ones that were mentioned that we just had the operational beds already. So our objective is to do more in the previous year. So we have a few effects. So we have the consolidation of BDL. Recently, we have the loss of leverage. We have a few impacts. And also, we have a good number of hospitals. And here, we have a growth... There is no increase that in fact the deadline...

The Q&A session is closed. We'd like to give the floor to Mr. Palomo, so he can close the session.

Thank you very much for your support, all the investors, and it's a pleasure to be with you. Shortly, we should be together.

Thank you. The earnings call is closed. Thank you for your participation. Have a nice day.