5. Sponsorship from Active and Experienced
Shareholders and Management
Experienced management with more than 25 years in the pharmacy retail industry on average
# Years # Years Experience
Management Pharmacy Retail Financial Industry
André Sá
CEO 2 12 Highly active and
performance-oriented
Marcelo Doubek 2 14 shareholders, with high
CFO ambitions in the sector
Renato Lobo n/a 18
Investor Relations
Álvaro Silveira Jr.
Head of Midwest and Commercial Director
22 n/a
Solid and rich expertise
Wilson José Lopes 25 n/a acquired from previous
Head of South Operations endeavors
Gilberto Portela 30 n/a
Head of Northeast Operations
Ernandes Cunha
Farmais Director
11 n/a
Unique successful story in
playing the consolidation
Board of Directors trend in the Real Estate
industry: PDG Realty
Marcelo Kalim
n/a 15
Board Member
Carlos Fonseca
Board Member
n/a 14
Álvaro Silveira
36 n/a Partnership with TAM: the
Board Member
merchant banking division
Roberto Martins of BTG Pactual
20 22 successfully created value
Board Member
for TAM through (i)
José Luiz Depiere Multiplus IPO and (ii)
14 n/a merger with LAN
Board Member
Artur Grynbaum
25 n/a
Independent Board Member
5
6. Value Creation Strategy
Market Organic Growth
Consolidation Opening of new stores to Unparalleled 31
Highly fragmented consolidate local Growth
market with large room leadership and enter new (# of stores 12
for consolidation states 1H11) 15
Large Integration
Amount of G&A synergies
Synergy to
Consolidation of
Capture operations
Enhance Development of new
Differentiation Operational products to enhance
Consumer
Efficiency client experience and
Product development, Experience maximize profitability
private label and loyalty Strong synergy to come
programs through integration
Source: Drogasil and Droga Raia’s press releases as of June 30th, 2011
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7. Brazil Pharma at a Glance
Largest Pharmacy Retail Company in Brazil: Ready for further consolidation
Our Platform (as of June 30, 2011) Number of Proprietary Stores1
367
44
31
681 points of sale 71
323 own stores e 358 franchise stores 71
323
292
1st 52
221
150
63 own stores 98
2007 2008 2009 2010 1H11
Distribution of the Stores by Stage 2H11 Medicine Sales Mix (%)
(Existing stores on June 30, 2011)
70
115
1st 22% 30,7
35%
%
92 own stores 83 69,3
55 26%
%
17%
1st
Stores with less than 12 months Refence Drugs
2nd
Stores with 12 to 24 months Generic Drugs
358 franchise stores
168 own stores
Stores with 24 to 36 months
Proprietary Stores Franchise Stores New Frontiers Stores with more than 36 months
(mature)
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8. Market Consolidation
Consolidation Trend and Primary Regional Targets
Brazil Pharma is located in strategic regions with low competition, high growth perspectives and large
complementarities to top players.
Market Share and Players Footprint
Revenues
Drogaria Brazil
Breakdown Raia Drogasil Pacheco
per State S. Paulo Pharma
São Paulo 31% South
East
Rio de Janeiro 14% Region
Minas Gerais 10%
Rio Grande do Sul 8% Other
Regions
Paraná 6%
Goiás + DF 5%
Bahia 4% Primary Regional Targets
Santa Catarina 4%
Pernambuco 3%
Revenues Growth (R$000) Store Growth
Ceará 3% 2010 2009 2008 2010 2009 2008
Droga Raia 1.860 1.594 1.147 350 299 259
Pará 2%
grow th % 16,7% 39,0% 17,1% 15,4%
Others 11% Drogasil 2.089 1.788 1.326 338 283 256
grow th % 16,8% 34,8% 19,4% 10,5%
São Paulo 2.214 1.706 1.412 342 249 214
grow th % 29,8% 20,8% 37,3% 16,4%
Pacheco 1.843 1.621 1.248 340 370 280
grow th % 13,7% 29,9% -8,1% 32,1%
Pague Menos 2.235 1.855 1.551 400 333 301
grow th % 20,5% 19,6% 20,1% 10,6%
Brazil Pharma 921 660 470 292 221 150
Source: IMS Health, Companies web site, Brazil Pharma
grow th % 39,5% 40,4% 32,1% 47,3%
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14. Sales Mix and Average Ticket
Increase in average ticket even with the growing relevance of generics in our sales mix
Sales Mix Average Ticket
(% of sales) (R$)
29.47
19.6% 20.5% 21.8% 20.4% 21.6% 21.3%
19,6% 20,5% 21,8% 20,4% 21,6% 21,3% 28.31
28.05
47.0% 47.7% 46.1%
47.1% 46.7% 48.0% 27.74
27.69
47,0% 47,7% 47,1% 46,1% 46,7% 48,0%
26.89
33,5% 31,7% 31.7%
33.5% 31,1%
31.1% 33,5%
33.5% 31,6% 30.7%
31.6% 30,7%
1T10 2T10 3T10 4T10 1T11 2T11
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Non-drugs
Non medicines Brands Generic Generic
Branded drugs
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15. 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)
27.8% 28.8%
34.3%
32.9% 26.1% 26.1%
25.2%
31.1% 24.4% 79.0
30.4% 29.8% 29.9%
94.1
67.7 66.7
60.8
55.3
78.9 50.2
77.6
74.3
66.7
59.8
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Gross Profit Gross Margin SG&A % of gross revenue
(1) Includes other net operating expenses of R$0.7 million. Excludes depreciation and amortization expenses
of R$4.9 million, non-recurring expenses related to the IPO of R$2.1 million and other non-recurring expenses
of R$1.6 million.
15
16. EBITDA and Depreciation and Amortization
Higher EBITDA margin since the creation of Brazil Pharma
EBITDA and EBITDA Margin Depreciation and Amortization Expenses
(R$ million, % of gross revenue) (R$ million)
Starting January 2011 there was a change in our accounting criteria and
5.4% 5.5% the key money (commercial establishments) amortization was classified
5.0% 5.2% 5.1% under depreciation and amortization expenses in the income statement.
3.8% This same line includes the depreciation of our plant and equipment and
the investments in the layout adjustment at our stores.
15.2
Out of the total depreciation and amortization expenses in 2Q11,
13.4 R$3.0 million represented the amortization of intangible assets
12.2 (commercial establishments).
11.4
9.6 9.9 5.0 4.9
0.7 0.8 0.8 0.8
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
EBITDA EBITDA Margin
16
17. Financial Result and Net Income
Lower financial expenses given Company’s capitalization and maintenance of profitability
Financial Result, Net Expenses Net Income and Net Margin1
(R$ million) (R$ million, % of gross revenue)
(4.6)
(4.4) 2.8%
2.4% 2.5% 2.4%
2.2%
1.5% 1.7%
0.8% 7.8
(3.4)
(2.9) 6.1
5.4
(2.4) 5.2
4.6
(1.8) 4.0 4.7
2.0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Net Income Adjusted for key money amortization
Net Margin Adjusted Net Margin
(1) Net income before non-controlling interest and adjusted to exclude the non-recurring expenses.
17
18. Contact Details
Investor Relations Brazil Pharma S.A.
Renato Lobo
IR Officer
renato.lobo@brph.com.br Rua Gomes de Carvalho, 1629
(55 11) 2117 -5200 6º e 7º andares
CEP 04547-006
www.brazilpharma.com.br/ri São Paulo, SP, Brasil
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