3. Profarma makes herein statements about future events that are subject to risks and uncertainties. Such statements are based on the beliefs and estimations of the
Company’s Management and information to which it currently has access. Statements about future events include information regarding our present intentions,
beliefs or expectations, as well as those of the members of the Company’s Board of Directors and Executive Officers’ Committee. The qualifications in relation to
statements and forward-looking information also include information regarding potential or presumed operating results, as well as statements that are preceded or
followed by or include the words "believe", "may", "will", "continue", "expect", "forecast", "intend", "plan", "estimate" or similar expressions. The forward-looking
statements and information are not guarantees of performance. They are subject to risks, uncertainties and beliefs because they refer to future events, thus
depending on circumstances that may or may not materialize. Future results and creation of value for shareholders may differ to a material degree from those
expressed or suggested by statements in relation to the future. Many of the factors that determine such results and amounts are beyond Profarma’s ability to control
or predict matters.
3
4. Period Highlights
Gross
Revenues
Increase
Net Profit Ebitda
Increase Increase
Growth of Arpmed
Generic Acquisition
Sales
Prodiet
Positive Revenues
Cash and Ebitda
Generation Margin
Increase
4
7. ArpMed | Company Overview
Established in 1998, ArpMed focuses on special, higher value-added pharmaceuticals by means of two
complementary business units that provide services for industries dealing with specialties.
Business Units:
Sales Synergy Services and Consulting
Distinct Features:
• It is possible to reduce the number of steps in the distribution process (Manufacturer–Points of Sale–Client), thus speeding
it up, reducing costs and increasing margins;
• Supply can be optimized through an automatic replenishment policy;
• Delivery at home or doctors’ offices provides comfort and convenience for clients;
• All the steps in the logistics process comply with the regulations of ANVISA [Brazilian National Health Surveillance Agency
• Each unit sold is tracked;
• The Company’s relationship with laboratories and nutrition industry companies provides a solid basis to increase volumes
and launch new high value-added products.
Management, logistics, sale and marketing solutions for special, niche high-cost cold-chain products or Rx
products that need to be repositioned or require market information
7
8. ArpMed | Company Overview
The Company:
• ArpMed already serves several Brazilian and international laboratories.
• It focuses on the segment of high-priced prescription medication (average ticket upwards of R$600.00).
• It specializes in products that require specific procedures, and follow-up and support services.
• It has a sound product portfolio, comprising fertility, ophthalmology and oncology products; breast implants; hearing aids
and diabetes medicines among others.
• It has a tradition in providing ancillary services for the industry and is, therefore, a solution to manage the channel as a
whole and serves as a reference for laboratories.
• 53% of its gross revenues come from sales with ancillary services.
• New contracts are being negotiated.
Suppliers:
• Laboratories need a logistics partner able to offer a different system from that used for conventional products.
• Even though profitable, the distribution of these products is a complex process due to the volume (low amounts: 2,000-
5,000 products for the whole country), the careful handling required by the product, the dispersal of users, and the follow-up
and tracking processes involved.
8
9. ArpMed | Flow of Operations
Patients
Laboratories
Structure Doctors and
- Cold Chain Clinics
- Experienced Pharmaceutical Team
- Approved packaging process
- Process complying with the standards in effect
- Regular internal and independent audit
Receipt Storage Distribution
9
10. ArpMed | Specialties and Operational highlights
Specialties Operational Highlights Geographical Coverage
• Plastic Surgery (breast implants) • 121,000 orders in 2011
• Average ticket upwards of R$600.00
• Dermatology
• 260 sold items
• Endocrinology (hormones and insuline)
• About 170 employees
• Gynecology
• Ophthalmology Sales
Sales through Own Call Center - % Sales with Ancillary Services - %
• Orthopedics
• Rheumatology 46% 47% 53%
Others 54% W/o W/
Through Service Service
Call Center
10
11. ArpMed | Drives for the Transaction
• One of the leading companies in direct sale of specialty and high-cost medications
Leadership • Strong presence in the Southeast Region, and competing for leadership in São Paulo and Rio de
Janeiro and
• Present in several states through a network of partner companies
• A 24% year-over-year increase in 2011
Growth
• Planned growth in existing markets
Potential
• New markets
• Increased amount of purchases, which allows improving the relationship with manufacturers
Synergy
• Synergies in the administrative and operational areas
• Mr. Guilherme Porto and Mr. Guilherme Rocha have each over 10 years’ experience in the
Experience industry and
• Both executive management and the consolidated management structure will be strengthened.
11
12. ArpMed | Acquisition Model
Acquisition of an 80% stake in Arpmed’s total capital stock.
Payment Schedule
Primary Offer:
• 40% paid on Execution Date
• 30% paid one year after the Execution Date
• 30% paid two years after the Execution Date
Secondary Offer:
• 50% paid on Execution Date
• 50% paid 12 monthly installments from the Execution Date.
Earn-out:
• Payment of an additional secondary offer in the first three years, based on EBITDA and the Cash Cycle.
Contingency Cover and Description of Guarantees
Contingency Coverand
• ArpMed’s current shareholders will be liable for all contingencies arising from taxable events prior to the Execution Date.
Description of Guarantees:
• Capital Stock Adjustment via Subscription Bonus, Escrow Account and Retained Payments.
12
13. ArpMed | Sinergy Gains
Operational Efficiency Relationship with
Manufacturers
New Business
New Segments
Opportunities
13
16. Financial Numbers | 2Q12 Results
Gross Profit and Revenues from Services Operating Expenses - SGA
to Suppliers
8.4%
12.4% 7.5% 7.5%
10.7% 10.2%
64.5
61.1
49.5
42.0
37,8
27.4
45.0 52.8
42.9
2Q11 1Q12 2Q12 2Q11 1Q12 2Q12
Gross Profit
Revenues from Services to Suppliers (R$ million and % Net Revenues)
Gross Profit Margin(%)
16
17. Financial Numbers | 2Q12 Results
Ebitda and Ebitda Margin Net Financial Expenses
1.4%
4.1% 1.3% 0.9%
3.2%
2.5%
31.2 10.5
8.8
20.7 7.2
20.2
2Q11 1Q12 2Q12 2Q11 1Q12 2Q12
(R$ million and % Net Revenues)
17
18. Financial Numbers | 2Q12 Results
Net Profit Cash Cycle
1.4% 1.2% 1.6%
2Q11 1Q12 2Q12
12.4
9.5 9.5 Cash Cycle - Days * 60.4 54.6 59.1
Accounts Receivable (1) 39.4 50.7 47.4
Inventories (2) 53.1 49.7 48.9
Accounts Payable (3) 32.0 45.8 37.1
* Average
(1) Average of Gross Revenues in the Quarter
(2) Average of COGS in the Quarter
2Q11 1Q12 2Q12 (3) Average of COGS in the Quarter
(R$ million and % Net Revenues)
18
