1. 8th Annual Brazil Consumer & Healthcare Check-up
J.P. Morgan
August 19th, 2014
2. Administrative structure
ORGANIZATIONAL RESTRUCTURING
• Greater specialization and team’s reinforcement:
Finance area;
HR area;
Legal area (labor / real state) and
Commercial area (greater specialization / expertise);
Creation of Competitive Intelligence area.
• Result-oriented Management:
Restructuring of internal meetings’ agenda / committees focused on core
business (results, investments, cash generation, commercial , legal, IT, loss
prevention, etc)
• Team alignment towards results:
Restructuring of compensation model aiming mid and long term alignment.
Focus on results: on going actions
3. Redesign of organizational structure align strong managerial experience and industry&product knowledge
with extensive retail pharmacy experience and further strengthening of the Financial Department
VP Operations
Álvaro Jr.
CEO
José Ricardo
BOARD OF
DIRECTORS
IR
Otavio Lyra
MANAGEMENT
Rodrigo Silveira
LEGAL
Cristina Caiuby
RISK.Mgm
TBD
HR
Marisa Salgado
CFO
Orivaldo Padilha
Controller Dir.
Gilberto Tavella
Planning Dir.
Sara Rezende
IT
Rogério Segala
Commercial Dir.
TBD
Operations Dir.
Renato Lobo
BIG BEN
Raul Aguilera
Competitive Int.
Igor Rangel
4. Administrative structure
• SAP System
Implemented in 3 platforms: (Mid-west, South and Bahia);
Implementation in the South completed in July;
• Layoff of 1,600 employees from stores and DC’s structure;
• Complete analysis of all active service contracts;
• Centralization of all expenditure decisions;
Focus on results: on going actions
7. Generic penetration in medicine sales
37.6% 38.4% 40.3% 39.4% 36.8%
16.9% 15.8% 13.9% 13.8% 14.2%
45.5% 45.8% 45.8% 46.8% 49.0%
2Q13 3Q13 4Q13 1Q14 2Q14
Non-medicines Generic Medicine Branded medicine
8. • Platforms accountability:
• Daily management of KPIs (sales, progression, sales mix between categories,
POS margin, inventory level and stock-outs);
• Pricing strategy:
• Gross margin recovery without losing competitiveness;
• Regional market share protection;
Focus on results: on going actions
9. • Expansion:
Investment Committee: focus on ROI of new stores;
Speed will depend on short-term liquidity;
• POS System: under evaluation for exchange.
Focus on results: on going actions
GESTÃO ?
Back-office Commercial POS
10. Distribution centers structure
• WMS system implemented in all DCs – appropriate service level
• “Gestão” (commercial management system):
Implemented in 3 platforms: (Mid-west, South and Bahia);
External support to guarantee full use of its functionalities;
• Controlled Drugs’ authorization still pending (Mais Economica and Sant’Ana);
• Increasing direct procurement from the industry;
• Inventory Reduction:
Mapping of products due in the next 20 months (base jul 14);
Negotiation of pre-expired products with the industry;
Better distribution of excess inventory.
Focus on results: on going actions
11. • Capital Increase: R$400 million (completed on June 24th);
• New debt issue R$255 million (short-term);
• Early redemption of debentures: R$560 million (paid on June 23rd);
• Mid-term debt issue seeking normalization of working capital structure;
Receivables;
Payables to suppliers;
• Extending debt terms.
12.
13. • Capturing synergies:
Proposal for organized purchase / joint negotiations;
Transferring of surplus inventory between platforms;
Administrative integration;
Investments (decision made by the Investment Committee)
• Plan for targets’ achievement;
• Monthly evaluation of results and of improvements’ action plan;
14. RESPONSIBILITIES
• Guaranteeing that action plan has strong adherence to the Company’s strategy;
• Increasing profitability of the different categories in our mix of sales;
• Careful analysis of products to be introduced/maintained in the sales mix;
• Creation of strategic partnerships with suppliers;
• Assuring ROI on marketing investments.