2. Disclaimer
This material contains statements that are forward looking and information related to the Company and its subsidiaries which reflect current views and/or
Company’s and its management expectation with respect to its performance, its business and future events. This presentation contains forward-looking
statements which were not based on historical data, and they reflect expectations of Company’s management. The words “foresees”, “estimates”, “wishes”,
“expects”, “intends”, “plans”, “believes”, “projects”, as well as other similar words were used to identify these statements. Although the Company believes
the expectations and hypothesis reflected in those forward looking statements are reasonable and were based in current information made available to
Company's management, the Company can not guarantee its results or future events. Please consider that real results may differ significantly from those
expressed or implicit in forward looking statements. The Company and its subsidiaries, as well as its board members, directors, agents, employees,
consultants or representatives, are not liable for any losses arising from the herein presented information nor for any damage arising from it, correspondent
or specific. The information presented in this material is based on internal research, market research, public information and corporate editorials, and the
Company did not check the accuracy of these date with the respective sources. Therefore, the Company does not provide any guarantee on the accuracy
and integrity of these data. Such data involve risks and uncertainties, as well as remain subject to changes based on several factors. The Company does
not assume responsibility for the veracity of such information. Except for the figures for the 2nd , 3rd and 4th quarter of 2011, which were object of limited
review, the other financial information presented herein, as well as possible comparisons and/or resulting inferences, were not the object of a limited review
or audit and corresponds to pro-forma internal management information and should not be considered in an isolated manner as sufficient for any
investment decision and should be read jointly with the Company’s financial information that are the object of limited review or audit filed with the CVM. For
a complete analysis of the Company, please verify all the information related to it on its website and at the CVM. This presentation and its content are
property of the Company and can not be reproduced or circulated, partial or entirely, without the Company’s previous written consent.
2
3. 2011 Highlights
• 737 points of sale, 378 own stores and 359 franchise stores
• 86 new own stores opened in 2011, 26 new stores in 4T11
• New store opening guidance of 100 stores for 2012
• Gross revenue growth of 24.0% when compared to 2010, reaching R$1.1 billion in 2011
• Same-store sales (SSS) growth of 11.1% in 2011
• Gross margin of 34.7%, a margin expansion of 4.5 p.p when compared to 2010
• Adjusted EBITDA of R$70.9 million in 2011, growth of 59,7% when compared to 2010.
• EBITDA margin of 6.2% in 2011, growth of 1.4 percentage points when compared to 2010
• Integration process in 4 fronts: Administrative, Commercial, Operation and Cultural
• Issuing of Debentures up to R$250.0 million: Moody’s assigned ratings of "Aa3.br" (national scale) and
"Ba2" (global scale)
• Acquisition of Drogarias Big Ben and Farmácias Sant´ana chains: Brazil Pharma becomes the 3rd largest
Brazilian chain in number of stores and largest operation outside Southeast
3
4. Market Growth – 2007 a 2011
The growth of the regions which we are acting were higher than the growth of São Paulo State
CAGR 4 years
15.3% North CAGR region v.s CAGR Brazil
9.3%
CAGR region v.s CAGR São Paulo
33.0%
Northeast
18.7%
-5.2% 15.3%
Mid West 42.2%
23.3%
20.0%
14.8% Southeast
São Paulo
14.0%
5.1%
South 23.2%
17.3% -8.8%
-13.3%
6.8%
Source: IMS 2011
4
5. Brazil Pharma’s Expansion in 2011
National presence with regional focus and accelerated organic growth with the opening of 86 new own
stores in 2011
Our Platform (as of December 31, 2011) Accelerated Organic Growth
Number of own stores (Pro-Forma)
737 Points of Sale
378 own stores and 359 franchise stores
378
352
323 26
292 302 29
259 270 10 21
245 11 22
14
80 own stores
5
68
7
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
8
89 Distribution of the Stores by Stage
7 (Existing stores on December 31, 2011)
26
104 own stores 3
203 4 96 Stores with less than 12 months
73 150 25%
7 40% Stores with 12 to 24 months
27
187 23
359 franchise stores Stores with 24 to 36 months
194 own stores 72
Stores with more than 36 months
19%
60 (mature)
16%
Own Stores Franchise stores
5
7. Sales Mix and Average Ticket
Sales Mix more profitable compared to the rest of the market
Sales Mix Average Ticket
(% of sales) (R$)
29.46
27.70
2010 2011
30.70
29.47 29.41
28.31 28.05
27.69 27.74
26.89
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
7
8. Gross Profit and Expenses
Gross margin expansion, given better mix and inventory management
Selling, General, Administrative and Other
Gross Profit and Gross Margin Expenses1 and % of Gross Revenue
(R$ million, % of gross revenues) (R$ million, % of gross revenue)
28.5%
25.4%
34.7% 325.3
396.2 234.1
30.2%
278.5
2010 2011
2010 2011 27.8% 28.8% 30.5%
26.1% 25.2% 26.1% 26.6%
24.4% 98.7
34.3% 33.5% 37.5% 79.0 81.0
32.9%
31.1% 30.4% 29;8% 29.9% 121.1 67.7 66.7
60.8
55.3
102.1 50.2
94.1
77.6 78.9
74.3
66.7
59.8
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 (1) The figures disregard each period’s SOP expenses and “non-recurring expenses”. In 4Q11, our non-
recurring expenses came to R$3.4 million, relating to M&As.
8
9. EBITDA and Net Income
Positive EBITDA evolution since the creation of Brazil Pharma
EBITDA and EBITDA Margin Net Income and Net Margin1
(R$ million, % of gross revenue) (R$ million, % of gross revenue)
6.2% 4.0%
70.9
4.8% 2.6%
2.2% 45.8
44.4
16.2
20.1
29.6
2010 2011
6.2%
2010 2011 4.9%
2.8% 4.3%
2.4% 2.5% 2.4% 2.2%
6.9% 6.9% 1.5%
0.8% 1.7% 18.9 2.4%
5.0% 5.2% 5.4% 5.1% 5.5%
3.8% 22.4 3.9 14.0
21.1
7.8 6.1
15.2 5.4 6.1
13.4 4.6 4.0
5.2 3.0 15.0
11.4 12.2 3.2
9.9 7.9
9.6 4.7
2.0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
Adjusted for key money amortization Net Income
Net Margin Adjusted Net Margin
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
(1) Net income before minority interest and adjusted to exclude non-recurring expenses in the period.
9
10. Working Capital, Cash Flow and Debt
Brazil Pharma in a continuous process of financial management improvement
Working Capital Operating and Investing Cash Flow Debt
(R$ million) (R$ million)
4Q11 3Q11 2Q11 1Q11
4Q11 4Q10
4Q11 3Q11
EBIT 0.7 (20.1)
Receivables (in (+) Depreciation and
days) 21 24 23 20 amortization 9.3 3.4 Loans and financing 64.4 70.8
Inventory (in days) 114 96 87 86 (+) Others 1.9 - Current 22.4 23.0
Suppliers (in days) 62 53 60 69 Cash generated from
Working Capital operations 11.8 (16.7) Non-Current 42.0 47.8
(in days) 72 67 50 37 (-) Working capital (11.7) 6.5 Accounts payable -
(-) Others (18.1) (3.6) (acquisition) 54.4 70.4
Net cash generated from Current 17.7 17.7
operations (18.0) (13.8)
(-) Capex (18.1) (4.1) Non-Current 36.7 52.7
(-) Aquisitions (16.9) (14.8)
Cash flow from operations Total Debt 118.8 141.2
and investments (53.0) (32.6)
2011 2010 Cash and cash equivalents 263.6 324.0
EBIT 19.0 (27.4)
(+) Depreciation and
amortization 25.5 5.8 Net Debt (Net Cash) (144.8) (182.8)
(+) Others 9.0 0.2
Cash generated from
operations 53.5 (21.4)
(-) Working capital (117.3) (3.8)
(-) Others (39.3) 0.4
Net cash generated from
operations (103.1) (24.8)
(-) Capex (77.6) (18.1)
(-) Aquisitions (230.3) (23.2)
Cash flow from operations
and investments (411.0) (66.1)
10
11. The New Brazil Pharma
Brazil Pharma consolidates its leadership position in four of the five regions of Brazil, becoming the
(1)
largest retail pharmacy, excluding Southeast.
1
986 points of sale 228 own stores
627 own stores 95 20 1
359 Franchise stores 14 5
85
7
101
8 101 lown stores
89
7
104 own stores
7
359 franchise stores
194 own stores 187 2011 Abrafarma Ranking
1
Number of Stores Number of Stores Revenue
(1).
North Northeast Mid-West Southeast South Brazil
1o
2o
(2)
n/a
3o
(2) (2) (2) (2) (2)
n/a n/a n/a n/a n/a
4o
(1)Ranking by number of own stores as on September 30, 2011, considering the four largest drugstore chains in Brazil; and
(2)n/a: other chains do not have operations in the region. 11
12. The New Brazil Pharma
Creation of value and scale post acquisition
(1) Combined
Volume (R$ million)
Gross Revenue 1,142.5 1,415.9 2.558.4
Gross Profit 396.2 405.3 801.5
Gross Margin 34.7% 28.6% 31.3%
EBITDA 70,9 84.5 155.4
EBITDA Margin 6.2% 6.0% 6.1%
Net Profit 45.8(2) 49.9 95.7
Net Margin 4.0% 3.5% 3.7%
Sales Mix Distribution of the Stores by Stage
(R$ million) (Existing stores on December 31, 2011)
16.7%
123
36.7% Non medicines 20% Stores with less than 12 months
Branded Stores with 12 to 24 months
96
Generic 332 15% Stores with 24 to 36 months
46.6% 53%
76
12% Stores with more than 36 months
(mature)
(1) Pro-Forma data based on the 12 last months ended December 31, 2011
(2) Net Profit ajusted by the amortization of points-of-sale
12
13. The New Brazil Pharma - Debt
Debt Pro-forma Breakdown indexes
(considers Big Ben and Sant’ana´s acquisition) 83% of our debt is indexed by IPCA or IGPM
(without Coupon)
Net Debt (Net Cash) 4Q11 (144.8)
(+) Debt of Big Ben´s acquisition1 314.4
(+) Debt of Sant'ana´s acquisition2 333.0
Net Debt (Net Cash) 4Q11 Pro-forma 502.6
(1) Considers the installment in cash of the acquisition (R$293.0 millions) and net debt of R$21.4 millions in October
31, 2011.
(2) Considers the installment in cash of the acquisition (R$347.0 millions) and net cash of R$14.0 millions in the data
which occurred the assignment.
Debentures issuance up to R$250 million
Assignment of Aa3.br rating (national scale) and, Ba2 (global scale)
• Moody’s assigned ratings of Aa3.br (national scale) and Ba2 (global scale)
• Issuance of 25.000 debentures
• Unit nominal value of R$ 10 (ten thousand reais) on the issue date
• The first and second series mature in four and five years, respectively, from the issue date
• The debenture´s remuneration will be established by the Bookbuilding process which will be held in April 03,
2012
13
14. Integration – full power
Our integration process is represented by 4 work-fronts
1- Administrative
“Integrating talents and services, sharing excellence"
Brazil Pharma’s Shared Services Center (CSC) was inaugurated on March 5, 2012..
The CSC centralizes support functions such as finance, human resources, procurement, management and systems, so that the other
areas can focus on the company’s core business.
2 - Commercial “Building Long-standing Partnerships”
2º event “Brazil Pharma with the Pharmaceutical Industry”: a closer relationship with the industry and strengthen the Group Brazil
Pharma
Objective: always be the best long-term solution for our supplier, to position ourselves as the first choice of our suppliers
Result: improvement in our trading conditions, optimizing the performance of point of sale and priority in the new product launches
3 - Operations “More with Less”
Project “More with Less”: increase sales per store, average ticket and decrease expenses
Objective: standardize and speccially improve the actual stores´ performance, increasing productivity of our portfolio
4 - Cultural “We are Brazil Pharma”
“Newsletter” nationally circulated to all employees
Monthly meetings with regional stores managers and RH of each operation: makes them spreaders of BRPH culture
“We are Brazil Pharma” Project: visit stores carrying our “Dream, Mission and People (values)”
Implementation of variable remuneration in the platforms: “Meritocracy to recognize our talents”
Implementation of standard training for store front and back office
14
15. Strategy 2012-2014
Operational Differentiation
Efficiency Product development,
Strong synergy to come private label and loyalty
through integration programs
Market Consolidation Organic Growth
Highly fragmented market Opening of new stores to
with large room for consolidate local leadership
consolidation and enter new states
15
16. Contact Details
Investor Relations
Renato Lobo Brazil Pharma S.A.
IR Officer
Mara Boaventura
IR Manager Rua Gomes de Carvalho, 1629
6th and 7th floors
ri@brph.com.br CEP 04547-006
(55 11) 2117 -5200 São Paulo, SP, Brazil
www.brazilpharma.com.br/ri
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