By Brazil Stock Guide – Fleury Group (B3: FLRY3) used its 3Q25 earnings call to emphasize that its expansion push remains selective, data-driven, and fully under control — even as Brazil’s biggest diagnostic network steps up acquisitions in key regional markets.
CEO Gianna Tsutsui and CFO José Filippo said the company will sustain its pace of organic growth and bolt-on M&As without compromising returns or leverage, which remains at 1x EBITDA. “Our M&A cycle will remain disciplined — we look for cultural fit, strategic alignment, and fast synergy capture,” Tsutsui said.
Women’s health becomes a strategic pillar
Analysts pressed Fleury about its latest move into women’s health through the R$207.5 million acquisition of FEMI, a São Paulo-based brand with 12 units and R$287 million in annual revenue.
Tsutsui said the deal expands Fleury’s integrated portfolio — from diagnostics to fertility and endometriosis treatment — and leverages a core demographic: 62% of the group’s clients are women.
“The FEMI acquisition adds depth to our women’s health ecosystem. We see it as complementary, not just incremental,” she said. The company expects synergies to cut the EV/EBITDA multiple to 3.3x post-integration, with fast implementation once CADE approval is received.
Pipeline active, but pricing cautious
CFO José Filippo told analysts the M&A pipeline remains “structured and active,” but said negotiations have become tougher as higher capital costs push sellers to hold on to elevated valuations.
“We’re not chasing size for the sake of it,” he said. “We evaluate three dimensions: strategic positioning, financial returns, and cultural alignment. The hit rate falls when capital costs rise, but our discipline doesn’t change.”
Filippo added that most acquisitions are EBITDA-generating assets that do not meaningfully impact leverage, reinforcing the group’s ability to self-fund expansion through cash flow.
Regional focus: São Paulo’s interior and Lab2Lab
Asked about the geographic concentration of recent deals, Tsutsui explained that the company’s short-term focus remains on São Paulo’s interior, where economic growth and private-health penetration exceed national averages.
“Regions like Rio Claro and Campinas grow faster than GDP and have nearly double the private-insurance coverage of Brazil overall,” she said. “That’s where we find both demand and synergies.”
The Lab2Lab unit — Fleury’s B2B platform serving hospitals and partner labs — grew 7.8% in the quarter, and Tsutsui confirmed new production capacity was added in São Paulo and Rio Grande do Sul to meet rising demand.
Margins hold, brand resilience
Analysts from Goldman Sachs and Bank of America questioned how Fleury’s premium brand sustained 12.2% growth without expanding margins. Tsutsui said only 1.2 percentage points of that growth stemmed from a calendar effect; the rest reflects stronger client engagement and efficiency.
Filippo added that Fleury’s portfolio mix — between diagnostics, B2B services, and the “New Care” unit — explains the stable 27.4% EBITDA margin, despite heavy tech depreciation. “Our model blends high-margin B2C with scalable B2B. The result is consistency, not volatility,” he said.
Payout, leverage, and long-term view
In response to questions about capital allocation, Filippo reaffirmed Fleury’s high payout policy, with dividends reaching 90% of 2024 earnings, and said this will continue as long as leverage stays low.
“Our capital structure covers debt maturities through 2028, and we see no need to stretch. We’ll keep rewarding shareholders without sacrificing investment capacity,” he said.